-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Pk6C/TlwVupu8n4/xARVzR2pdhtEzNnyjRF8KbW2GHKxYjTmjLqR/c7SomP0rNt6 5eXE+GzAZhme4i5K1heF1A== 0000950135-97-001371.txt : 19970507 0000950135-97-001371.hdr.sgml : 19970507 ACCESSION NUMBER: 0000950135-97-001371 CONFORMED SUBMISSION TYPE: 10-K405 PUBLIC DOCUMENT COUNT: 20 CONFORMED PERIOD OF REPORT: 19961231 FILED AS OF DATE: 19970327 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: PRIMARK CORP CENTRAL INDEX KEY: 0000356064 STANDARD INDUSTRIAL CLASSIFICATION: 8731 IRS NUMBER: 382383282 STATE OF INCORPORATION: MI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K405 SEC ACT: 1934 Act SEC FILE NUMBER: 001-08260 FILM NUMBER: 97564835 BUSINESS ADDRESS: STREET 1: 1000 WINTER STREET STE 4300N CITY: WALTHAM STATE: MA ZIP: 02154 BUSINESS PHONE: 6174666611 MAIL ADDRESS: STREET 1: 1000 WINTER ST STREET 2: STE 4300 NORTH CITY: WALTHAM STATE: MA ZIP: 02154 10-K405 1 PRIMARK CORPORATION 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED) FOR THE FISCAL YEAR ENDED DECEMBER 31, 1996 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED) COMMISSION FILE NUMBER 1-8260 PRIMARK CORPORATION (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) MICHIGAN 38-2383282 (STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.) 1000 WINTER STREET, SUITE 4300N 02154 WALTHAM, MA (ZIP CODE) (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (617) 466-6611 SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: NAME OF EACH EXCHANGE TITLE OF EACH CLASS ON WHICH REGISTERED ------------------- ------------------- Common stock, without par value New York Stock Exchange Pacific Stock Exchange
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: None Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. Yes X No --- --- Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No --- --- The aggregate market value of the registrant's common stock held by non-affiliates as of February 28, 1997 was $673,885,292, based on the closing price on that day (New York Stock Exchange -- Composite Transactions). Number of Shares outstanding of the registrant's common stock without par value on February 28, 1997 was 27,090,866. DOCUMENTS INCORPORATED BY REFERENCE Portions of Primark's 1996 Annual Report are incorporated by reference in Part I, Item 1, and Part II, Items 5, 6, 7 and 8. Portions of Primark's 1997 Proxy Statement for its 1997 Annual Meeting of Shareholders, which will be filed within 120 days of December 31, 1996, are incorporated by reference in Part III, Items 10, 11, 12 and 13. 2 TABLE OF CONTENTS
PAGE ---- Cover Page................................................................. i Index...................................................................... ii PART I Item 1. Business................................................................... 1 Item 2. Properties................................................................. 14 Item 3. Legal Proceedings.......................................................... 15 Item 4. Submission of Matters to a Vote of Security Holders........................ 15 Executive Officers of the Registrant....................................... 16 PART II Item 5. Market for Registrant's Common Equity and Related Stockholder Matters...... 17 Item 6. Selected Financial Data.................................................... 17 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations............................................................... 17 Item 8. Financial Statements and Supplementary Data................................ 17 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure............................................................... 17 PART III Item 10. Directors and Executive Officers of the Registrant......................... 17 Item 11. Executive Compensation..................................................... 17 Item 12. Security Ownership of Certain Beneficial Owners and Management............. 17 Item 13. Certain Relationships and Related Transactions............................. 17 PART IV Item 14. Exhibits, Financial Statements, Schedules and Reports on Form 8-K.......... 18 Signatures................................................................. 23
ii 3 PART I ITEM 1. BUSINESS GENERAL Primark Corporation ( the "Company" or "Primark") is a Michigan corporation organized in 1981. The Company is engaged principally in the information services industry serving two primary markets, Financial Information and Applied Technology. The Company's Financial Information businesses consist of the operations of Datastream International Limited and affiliates ("Datastream"), Disclosure Incorporated ("Disclosure"), Groupe DAFSA S.A. ("DAFSA"), I/B/E/S International, Inc. ("I/B/E/S"), ICV Limited ("ICV"), Vestek Systems, Inc. ("Vestek") and Worldscope/Disclosure LLC ("Worldscope"). Primark also has an equity interest in Primark Decision Economics, Inc. ("PDE"). Subsequent to year end, Primark purchased two additional financial information businesses, Baseline Financial Services, Inc. ("Baseline") and WEFA Holdings, Inc. ("WEFA"). Primark develops and markets "value-added" database and information products that cover established and emerging markets worldwide, as well as proprietary analytical software for the analysis and presentation of financial and economic information. Customers include investment managers, investment bankers, financial market traders, analysts, accounting and legal professionals and information and reference service providers. The Applied Technology activities, conducted through TASC, Inc. ("TASC"), the Yankee Group Research, Inc. (the "Yankee Group") and WSI Corporation ("WSI"), provide a broad spectrum of technology-based information services and products primarily to U.S. government agencies principally involved in national security and intelligence related activities, and increasingly to commercial customers such as vendors and users of telecommunications and computing, as well as users of real-time weather information. The Company is also engaged in transportation services through its wholly-owned subsidiary, Triad International Maintenance Corporation ("TIMCO"). At December 31, 1996, the Company and its subsidiaries employed 5,938 persons. Commencing with Primark's acquisition of TASC in 1991, the Company embarked on a strategy of combining information technology expertise with proprietary data content to serve the increasing information requirements of its customers with value-added products. The Company focused its strategy on the Financial Information market through its acquisitions of Datastream in 1992 and Vestek in 1994, while divesting certain of its non-core operations. In 1995, Primark expanded its domestic presence in Financial Information content services through the acquisition of Disclosure and I/B/E/S. During 1996, the Company expanded its Financial information businesses through the acquisitions of DAFSA and ICV along with obtaining a controlling interest in Worldscope and by forming a joint venture, Primark Decision Economics. Primark continued this expansion into 1997 with the acquisitions of Baseline and WEFA. The acquisition of the Yankee Group, also in 1996, expanded Primark's presence in the Applied Technology Market. Information regarding the revenues, operating results and identifiable assets of the Company and its subsidiaries, both by industry and geographical region, is incorporated by reference herein from Note 11 to the Consolidated Financial Statements entitled "Segment and Geographic Information" in the Company's 1996 Annual Report. Acquisitions On October 24, 1996, the Company acquired all the outstanding stock of ICV. ICV supplies a variety of real-time data and news products covering U.K. Domestic equities to equity traders and investors in London and throughout the United Kingdom. ICV reported total revenues of $40 million for the year ended December 31, 1995. On October 15, 1996, the Company acquired an additional 30% ownership interest in Worldscope, giving Primark a controlling ownership interest of 80%. Prior to the transaction, Worldscope was a 50% investment accounted for under the equity method. Worldscope's database contains descriptive profiles, news and detailed financial statements on over 13,000 publicly traded companies in 52 countries. The financial statements contained in the database are adjusted to a common accounting format, allowing cross-border screening 1 4 and searching. Worldscope reported approximately $6 million in revenues for the twelve months ended December 31, 1995. On August 9, 1996, the Company acquired Yankee Group which provides information technology research services covering a range of topics including wireless communications, data communications, client/server issues, enterprise computing, intranets and Internet applications. The company's 1995 revenues were approximately $14 million. On June 18, 1996, the Company acquired DAFSA. DAFSA supplies company account information on all listed companies in France and ownership information on French companies through print and CD-ROM. DAFSA produces annual sector analysis and reports and provides independent research coverage and earnings estimates on major French companies. The company reported $7.3 million of revenues for the twelve months ended December 31, 1995. On January 6, 1997, the Company purchased all of the outstanding stock of Baseline for $40.7 million in cash. Baseline generated revenues estimated at $12.8 million for the twelve months ended October 31, 1996. Headquartered in New York City, Baseline has an office in Philadelphia and employs approximately 80 people. Baseline provides institutional investors with visual valuation graphics which portray financial market information to institutional accounts throughout the U.S., Canada and the United Kingdom. On February 7, 1997, the Company acquired all of the outstanding stock of WEFA Holdings, Inc. ("WEFA") for $45.0 million in cash. WEFA generated an estimated $28.6 million in revenues for the year ended December 31, 1996. Headquartered in Pennsylvania, WEFA has offices in Canada, Europe, and South Africa and employs over 150 economists. WEFA is an international provider of value added economic information, software and consulting services to Fortune 1,000 companies, governments, universities and financial institutions. Information regarding the Company's acquisitions is incorporated by reference herein from Note 2 and Note 12 to the Consolidated Financial Statements entitled "Acquisitions" and "Subsequent Events", respectively in the 1996 Annual Report. Discontinued Operations On September 30, 1996, the Company sold all of the issued and outstanding stock of its wholly-owned subsidiary, Primark Storage Leasing Corporation ("PSLC"). The results of PSLC's operations have been reported separately as a component of discontinued operations. Prior year consolidated financial statements have been restated to present the PSLC business as a discontinued operation. Information regarding the Company's discontinued operation is incorporated herein from Note 3 to the Consolidated Financial Statements entitled "Dispositions and Other Charges" in the 1996 Annual Report. INFORMATION SERVICES SEGMENT Primark's information services industry serves two primary markets, Financial Information and Applied Technology. During 1996, the operations of Datastream, DAFSA, Disclosure, I/B/E/S , ICV, PDE, Vestek, and Worldscope provided the financial information markets with economic and financial information and analysis of the information through proprietary software. The applied technology activities, consisting of the operations of TASC, WSI and the Yankee Group, provide a myriad of technology-based information services and products, primarily to U.S. Government national security and intelligence agencies and commercial customers. FINANCIAL INFORMATION MARKET Datastream Founded in 1964 and acquired by Primark in 1992, Datastream provides on-line historical economic and financial information, along with proprietary analytical software for accessing and manipulating such information. Datastream is also a leading provider of computer-based investment valuation and fund services in the United Kingdom. Datastream's customers include approximately 1,600 financial organizations in 50 2 5 countries, including investment bankers, brokers, pension and money fund managers and insurance companies that use financial and economic information for investment research and analysis. Other users include publishers of financial journals and daily newspapers, business schools and universities. The core of Datastream's operations is its centralized data system which maintains a series of linked databases of extensive international economic and financial data collected from wire services, official publications of national agencies, stock, options and futures exchanges, other information vendors, brokers, dealers, banks and issuers. Customers have on-line access to Datastream's databases through personal computers, networks or workstations. Datastream's products and services enable customers to perform extensive investment research and analysis, investment administration and portfolio valuations on securities in all major markets, and to produce graphics, statistics, time series analysis and perform other analytical functions. Datastream's customers typically subscribe through annual contracts. These contracts are automatically renewed, unless notice of cancellation is given three months before the annual renewal date. None of Datastream's customers contribute more than 2% of Datastream's total revenues. Accordingly, the Company does not believe that the loss of any one of Datastream's customers would have a material adverse effect on Datastream's business. Datastream's products and services fall into two principal categories -- investment research and fund management services. Investment research services accounted for approximately 85%, 85% and 82% of Datastream's total revenues for the fiscal years ended December 31, 1996, November 30, 1995 and 1994, respectively. These services consist of a set of software programs to manipulate, analyze and present financial and economic information obtained from Datastream's databases. The software is designed to facilitate the customers' access to data from any of Datastream's databases, and to manipulate this data in a variety of pre-programmed and pre-formatted ways such as graphs, regressions, and tables. Fund management services accounted for approximately 15%, 15% and 18% of Datastream's total revenues for the fiscal years ended December 31, 1996, November 30, 1995, and 1994, respectively. Fund management services provide investment accounting, portfolio valuation and performance measurement activities predominantly to fund managers, unit trusts, mutual funds and portfolio managers located primarily in the U.K. Other customers include U.K. clearing banks, insurance companies and international financial institutions. A critical component of Datastream's business is the data itself. Datastream's principal supply requirements are for raw financial and economic data which are acquired from numerous data suppliers worldwide and developed internally. Once acquired, the data are edited and stored in Datastream's databases for access and manipulation through Datastream's applications and value-added software programs. Data suppliers generally retain ownership of the raw data, but allow Datastream and its customers the use of such data. Datastream places great importance on the quality of its data and has developed a program to continuously review its data sources to ensure quality control and continuity. Wherever possible, Datastream develops multiple sources of data to provide backup and cross-checking. Data relating to equities include pricing information for earnings and dividends on approximately 45,000 stocks from 59 countries, including all major markets and a number of emerging markets. This data includes historical earnings and dividend data, as well as forecast data supplied by market specialists. Data relating to bonds include maturity and yield on approximately 97,000 corporate and government bonds from 32 countries, all Eurobonds and related indices. Data relating to futures and options includes current prices, previously traded prices, trading volume and intra-day high and low values from the international options and futures exchanges, including LIFFE (London), MONEP and MATIF (Paris), SOFFEX (Switzerland), EOE (Amsterdam), DTB (Germany), Chicago and Philadelphia. Datastream has included databases from both I/B/E/S and Worldscope as an integral part of its investment research services. This integration has resulted in new customers for I/B/E/S, Worldscope and Datastream. Datastream has also installed the full Disclosure index on its on-line system, and offers index 3 6 searches and electronic ordering of hard copy documents to Datastream users. Vestek is also developing investment management software products that are marketed and supported by Datastream's European sales and service personnel. DAFSA Headquartered in Paris, France, DAFSA supplies company account information on most listed companies in France and ownership information on approximately 70,000 French companies. The company produces over 250 sector analyses and reports annually and provides independent research coverage and earnings estimates on over 350 major French companies. DAFSA's products and services are delivered primarily through CD-ROM, paper, and fiche subscriptions, principally to the financial community. The company has two significant customers. Banque Paribas accounted for 23% and Associes en Finance accounted for 8%, of DAFSA's revenues for the year ended 1996. Loss or default of either of these contracts could have a material adverse effect on DAFSA. Disclosure Founded in 1968, Disclosure was acquired by the Company on June 29, 1995. Disclosure is a leading provider of "as reported" and abstracted financial information in the U.S. market, distributing information on over 16,000 U.S. companies and 13,000 foreign companies, derived from a variety of government and third-party sources. Disclosure's proprietary content is provided on a subscription and per use basis through electronic media such as on-line services and compact laser disks, as well as through printed products. Disclosure's customer base includes the majority of U.S. investment banks, money managers, large law and accounting firms, together with other institutions and individuals performing financial research. Disclosure also distributes its information through over 35 third-party vendors. The United States market accounted for 92% of Disclosure's 1996 revenues. Disclosure's financial information products and services include a wide spectrum of Securities and Exchange Commission ("SEC") documents, such as Forms 10-K and 10-Q, proxy statements, registration statements and material event reports, as well as non-SEC documents such as U.S. and foreign annual reports. The information included in Disclosure's products is obtained through contractual relationships with the SEC and major stock exchanges, as well as through commercial acquisition of the information. Once acquired, Disclosure indexes, tags, abstracts and formats the information to allow for ease in navigation, searches and analysis. Disclosure's image-based services are delivered through the Global Access and Laser D products as well as through Info Centers. Global Access is a web-based front end that offers on-line, real-time access to Disclosure's proprietary electronic index of public company documents and on-line delivery of Disclosure's value-added EDGAR database, access to over ten years of data on 29,000 companies in the Worldscope and SEC databases, institutional and corporate ownership data, and links to third-party content such as I/B/E/S and industry news. Global Access provides real-time broadcast alert functionality as well as desktop full text and field searching and screening of company and industry information with direct downloading to spreadsheets and word processors. Laser D is a multi-disc CD-ROM document database that provides a desktop library of information to high volume document users who require instant access to documents filed with the SEC, banking agencies and U.S. and foreign stock exchanges. The Info Centers are staffed by research specialists who assist customers in locating requested information and produce alert services for customers who want early identification of specified documents. Approximately 81%, 81% and 83% of Disclosure's total revenues were derived from imaged based services for the twelve months ended December 31, 1996, 1995, and 1994, respectively. Disclosure's database segment provides products which can be machine read and manipulated by the end users. Disclosure's Global Researcher and Compact D products provide access to perform sophisticated searching of financial and text information on over 29,000 companies. These products also provide reporting and graphing functionality. Proprietary Disclosure databases include EdgarPlus (SEC filings with value-added navigational and style tags), the SEC 34 Act database (over 13,000 U.S. company profiles and financial 4 7 statement abstracts dating back over 10 years), and other databases on institutional and corporate insider transactions. These proprietary databases are offered by third-party vendors which target both the commercial and consumer markets, enhancing Disclosure's products through their hardware, software, and market focus. Such vendors include Bridge, Lexis, West, Dow Jones, Factset, MAID and UMI. Approximately 19%, 19% and 17% of Disclosure's total revenues were derived from database services for the years ended December 31, 1996, 1995 and 1994, respectively. Approximately 53% and 51% of Disclosure's revenues were derived from annual subscriptions for the fiscal years ended December 31, 1996 and 1995, respectively. Disclosure has experienced renewal rates for its subscription services in excess of 90%. The remainder of Disclosure's revenues are predominately derived from sales at Disclosure's Info Centers. No single customer accounts for more than 5% of Disclosure's revenues. I/B/E/S I/B/E/S is a leading source of global earnings expectational information for investors, financial institutions and portfolio managers worldwide. I/B/E/S collects and processes earnings per share estimates provided by over 7,100 individual securities analysts representing approximately 800 firms on over 17,000 companies globally. The estimates and related data are delivered through third-party distributors, I/B/E/S Express (a proprietary software delivery system) and in printed publications. Many I/B/E/S products permit the customer to perform analytical functions and are enhanced by reports and graphics. Approximately 30%, 38%, and 18% of I/B/E/S' revenues were generated from the I/B/E/S Express product for the years ended December 31, 1996, 1995 and 1994, respectively. All of I/B/E/S's 1996 revenues were derived through annual subscription contracts of which 15% were through soft dollar arrangements. I/B/E/S, founded in 1971, directly serves over 1,500 customers worldwide and thousands more through its distribution networks. I/B/E/S customers are represented by financial institutions and portfolio managers globally, with particular interest by the quantitative analysts who access and download information directly into analytic models. I/B/E/S products are also sold to end users, such as management consultants and traditional investment analysts who utilize I/B/E/S for general research. No I/B/E/S customer contributes more than 2% of I/B/E/S' total revenues. I/B/E/S has expanded its product line by launching I/B/E/S Trapeze, a real-time, electronic brokerage research distribution system. This state-of-the-art technology delivers brokerage reports created in Hong Kong to managers' desks in major financial centers within a few moments, complete with rich color graphics, audio and video capabilities. ICV Founded in 1981, and acquired by Primark in October 1996, ICV provides real-time on-line prices, news and research on the U.K. equities market as well as systems for order entry and trade reporting. The company's software combines real-time prices with news and other data in a unique format which has become the standard presentation for U.K. equity data. ICV's customers include investors, fund managers, banks, brokers and market makers. The company's customers are based predominantly in the U.K. The core of ICV's products are developed from its central systems which take real-time data from several exchanges and combine the prices with news produced by an in-house editorial team. The information is then broadcast to a customer base of nearly 8,500 terminals using the datacast bandwidth on terrestrial television, leased telecommunication circuits or via satellite. The data is broadcast to customers' systems, provided by ICV, where the signal is decoded, stored on a local database and presented on user screens utilizing software designed and maintained by ICV. Timeliness and reliability are critical aspects of ICV's services. ICV's central systems are designed to provide state of the art timeliness by handling incoming data within a few milliseconds, utilizing program code that resides in memory. Reliability is provided through several back-up sites. The investment in trading systems has allowed for the set-up of a U.K. wide interactive network which can be used to link customer's offices and provide a future conduit to any new data sources ICV may acquire or develop in the future. 5 8 ICV has leveraged its existing technology through alliances with other financial information companies, providing access to new markets. During 1996, ICV entered into an agreement with Merrill Lynch to leverage its technology with Merrill Lynch's expertise in live trading systems which developed and launched MAX, a live trading system. Also during 1996, ICV announced a joint venture with Dow Jones and Company to develop an international equity system by combining ICV's technology with the global news capability of Dow Jones. It is expected that the new system will cover over 140 international exchanges and provide global news coverage and historical information. ICV's two principal products are TOPIC and MARKET-EYE. TOPIC services accounted for 47%, 45%, and 33% of ICV's total revenues for the fiscal years ended December 31, 1996, 1995 and 1994, respectively. TOPIC services provide real-time data on prices and comparative quotes from market makers with historical charts and research from brokers. The services are used by traders and fund managers, stockbrokers, U.K. clearing banks and major quoted corporations. MARKET-EYE services accounted for 11%, 11% and 19% of ICV's revenues for the fiscal years ended December 31, 1996, 1995 and 1994, respectively. MARKET-EYE is aimed predominantly at the private investor. The data includes prices and news and may be combined with analytical and charting packages supplied by third parties. Exchange fees accounted for 35%, 36% and 33% of ICV's revenues for the fiscal years ended December 31, 1996, 1995, and 1994, respectively. Exchange fees are revenues generated from the use of data feeds provided by various sources, including the exchanges. Approximately 96% of ICV's 1996 revenues were generated through subscriptions. These contracts are automatically renewed, unless notice of cancellation is given two months before the annual renewal date. ICV's renewal rates have historically exceeded 85%. None of ICV's customers contributes more than 5% of total revenues. Vestek Acquired by Primark in June of 1994, Vestek develops, markets and supports investment information services and application software used to manage, analyze, and optimize institutional portfolios of equity, fixed income, and other financial instruments. Vestek also provides consulting services for investment managers and plan sponsors. Through its international sales force, Vestek currently serves over 200 clients in five countries. Vestek clients include major banks, plan sponsors, consultants, insurers, and investment managers. The majority of Vestek's revenues are derived from on-line subscription services. None of Vestek's customers contribute more than 6% of Vestek's total revenues. Worldscope The Worldscope database contains a collection of descriptive profiles and detailed financial statements on over 13,000 companies in 52 countries. The Worldscope database is standardized, indexed and organized for cross-border screening and searching. In addition to its global database, Worldscope offers an emerging market database. Worldscope products are delivered via third-party distributors, CD-ROM and on-line platforms. In October 1996, Primark acquired an additional 30% ownership interest in Worldscope, giving Primark an 80% controlling interest. Primark Decision Economics On August 5, 1996, Primark announced the formation of a joint venture with noted economist Dr. Allen Sinai. The newly formed company is called Primark Decision Economics, Inc., and Dr. Sinai has been appointed its Chief Executive Officer and Chief Global Economist. The purpose of this venture is to disseminate timely value-added economic forecasts, analysis and commentaries covering the world's major economies and markets to support real-time and longer-term decision making by financial institutions, corporations, governments, non-profit organizations and individuals engaged in trading, investing, and planning. 6 9 Trademarks Primark's Financial Information companies hold numerous trademarks worldwide that are subject to continuous renewal ranging up to 20 years. These trademarks are significant to the Company's business, and are registered in all of the Company's major markets to ensure recognition among its many global trading customers. Marketing The products and services of Primark's Financial Information companies are marketed worldwide. Datastream is based in London, England and has sales and support offices located in Germany, France, Italy, Scotland, Spain, South Africa, Switzerland, the Netherlands, Belgium, Luxembourg, Sweden, Japan, Hong Kong, Singapore, Australia, Korea, Thailand, Canada and the United States. DAFSA, headquartered in Paris, markets predominately throughout France. In addition, Datastream is marketing and selling I/B/E/S products in Asia and Disclosure products in both Asia and Europe. Disclosure, headquartered in Bethesda, Maryland, markets and distributes its products predominantly in the United States. In addition to its domestic and international sales force, Disclosure extends its sales and marketing reach with Info Centers strategically located in the major financial centers including ten major U.S. cities and several international locations including London, Frankfurt, Madrid, Paris, Milan, Hong Kong, Mexico City and Tokyo. Worldscope's products are also marketed through the Disclosure sales force. I/B/E/S, headquartered in New York City with offices in London, Hong Kong and Tokyo, delivers its products directly to customers via state-of-the-art electronic delivery media. I/B/E/S Express, the company's fastest growing delivery mechanism, is a PC-based proprietary software, database management and communications package. I/B/E/S also offers its products through a network of more than 30 electronic third-party and internal distributors, including FactSet, OneSource, Datastream, FAME, Vestek, Bloomberg, Reuters, Bridge, S & P Compustat, Telerate and CompuServe. These distributors offer I/B/E/S a mechanism to reach new markets and link I/B/E/S data to other databases and applications software. ICV is based in London, England and has sales and support offices throughout the U.K. ICV plans to combine its technology and real-time pricing and news capabilities with Datastream's historical content, thereby marketing these services to a larger customer base. PDE is headquartered in Boston, has a major office in New York and locations in Washington, London and Tokyo. Its products and information support services are placed worldwide. Headquartered in San Francisco, Vestek's products are marketed by its sales force located in New York, Los Angeles, London and through the Datastream sales force in Japan. No single customer of the Financial Information businesses accounts for more than 10% of the Company's consolidated revenues. Competition The global information industry is highly competitive. The advancement of electronic delivery via on-line vendors and the Internet has further impacted the competitive environment in the financial information market. There are many large and successful companies in the financial information services industry that supply financial data competitive to products and services provided by Primark's Financial Information businesses. Certain of the Company's financial information businesses compete directly with products or services of other financial information companies including First Call, Fact Set, Barra and Reuters. Primark's principal competitive factors include the quality, reliability and comprehensiveness of the analytical services and data provided, flexibility in tailoring services to client needs, experience, innovation, the capability of technical and client service personnel, data processing and decision support software, reputation, price and geographic coverage. Primark distinguishes its products through its broad international coverage, wide range of databases, accuracy of the data, proprietary software applications, reputation, experience and quality of customer support provided. 7 10 Overall, Primark's ability to remain competitive in the financial information markets will depend largely upon its ability to maintain and develop new products and access new markets in a cost efficient manner, including integration of all its financial information products and services. There can be no assurance that Primark will continue to maintain its market share in the future. Foreign Operating Risks Substantially all of the operations of DAFSA, Datastream and ICV are derived from various foreign markets. Approximately 11% of Primark's consolidated revenues were derived from the U.K. and an additional 11% from various other foreign markets. Consequently, the Company is exposed to certain risks associated with an international business, particularly with respect to foreign currency exchange rate movements. Primark's foreign operations are also subject to the customary risks associated with international transactions, including political risks, local laws and taxes, the potential imposition of trade or currency exchange restrictions, tariff increases and difficulties or delays in collecting accounts receivable. Weak foreign economies and/or a weakening of foreign currencies in certain countries against the U.S. dollar would adversely affect Primark's overall future operating results and cash flows. However, operating income under this condition has been and will continue to be somewhat insulated due to high levels of British pound-based operating expenses which also fluctuate against the U.S. dollar. The Company has been and will continue to hedge the currency risk associated with Primark's foreign operations as may be needed in the future. APPLIED INFORMATION TECHNOLOGY TASC TASC was founded in 1966 to provide solutions to complex analytical and technological problems. Concentrating on the application of leading-edge information technology, TASC now provides a broad spectrum of products, services and systems primarily to U.S. government organizations responsible for intelligence and national defense activities. Growing demand for information technology support has increased TASC's government and commercial customer base, both in the United States and internationally. Primark acquired TASC in August 1991 as the information technology cornerstone of its planned information services business. Primark recognized that not only would the U.S. government have greater needs for information technology, but also that TASC was capable of expanding its customer base to many other organizations. Technology developed by TASC under U.S. government contracts continues to be readily applied to create new products and services and used to assist commercial organizations in improving internal performance as well as servicing their own customers. For example, using internally developed imaging, database, communications and workstation technology, TASC has leveraged its weather information subsidiary, WSI, into a leading market position. As Primark has acquired data content companies, it has used TASC's technology in a variety of ways. TASC has participated in the development of technology platforms used to deliver data and software to Financial Information customers and, in one case, undertook turn-key development of the internal computer systems architecture and worldwide communications networks used by one of the larger financial information businesses. Finally, TASC has assisted the customers of the financial information companies with their own internal information technology requirements, often involving the integration of data from Primark with other internal databases and other third-party data. To accomplish these various objectives, TASC enters into contracts with other companies within Primark. TASC maintains its leadership in information technology in two principal ways. First, TASC's core business involves the design and development of advanced systems that encompass various information technologies, including database development and access, software engineering, information system architecture, simulation and modeling, signal processing and visual computing. While this work keeps TASC at the leading edge, TASC also receives research contracts sponsored by U.S. government agencies to develop these technologies further. In addition, TASC conducts its own internal research and development programs. Total TASC research spending has historically exceeded $30 million annually. TASC has built the information 8 11 technology research area as an independent revenue source and uses the results of such research to continue to support other business areas of TASC and the Company. Second, TASC recruits top talent with advanced degrees from leading universities, research laboratories and businesses, retaining these individuals by providing challenging work in a stimulating atmosphere. Of TASC's 2,600 employees as of December 31, 1996, approximately 84% were professional or technical personnel, the majority of which hold advanced degrees in engineering, computer science, mathematics, earth and environmental sciences, business or economics. TASC maintains 27 offices in the United States and abroad to provide its customers with ready access to its personnel. The recognized quality and professionalism of TASC's staff in providing unique information technology solutions to both governmental and commercial customers have contributed to TASC's record of 30 years of uninterrupted growth in revenues. For the years ended December 31, 1996, 1995 and 1994, respectively, approximately 44%, 49% and 58% of Primark's consolidated revenues were derived from contracts that TASC holds with U.S. government agencies and from subcontracts with U.S. government prime contractors. Government Business TASC's strategy with its U.S. government customers is to provide high value through the design, development and implementation of major systems that will enable these customers to perform their missions in a superior manner and at lower cost. Through the experience and qualifications of its personnel and its history of performing top quality work, TASC is able to command higher prices and margins than many competitors. However, TASC believes its solutions provide the lowest overall cost to customers since systems provided through TASC are typically completed within schedule and budget, and most importantly, combine state-of-the-art capabilities with reliable performance. In many cases, TASC assists its Federal government customers with the determination of future requirements, assessments of technical feasibility, cost estimates and systems design. Work of this nature is often termed systems engineering, and involves mathematical modeling of complex systems development, risk assessment, cost-performance tradeoffs, engineering, management information systems development and decision support services. Once a system has been designed and approved for procurement, TASC frequently supports its customers in the development, testing and deployment of such systems. Work of this nature is called program management support. TASC will participate in structuring requests for proposals and in evaluating responses. Once contractors have been selected, TASC supports its government customers in overseeing the performance of these contractors. In addition to continuing much of the systems engineering work described in the preceding paragraph, TASC will perform configuration control, testing and independent validation and verification, along with maintaining the management systems used to monitor cost, schedule and performance. TASC has developed its own tools, models, software and methods to perform both systems engineering and program management support. In performing systems engineering and program management support work, in many ways TASC acts as an "extension" of the government organization management team, supporting them in their responsibilities to manage multiple contractors to create complex operational systems. TASC has tended to align itself with a wide variety of long-term classified government programs of significant national importance. TASC helps government managers in their oversight of these programs and maintains technological superiority by moving systems from one generation to the next. Systems engineering and program management support comprise the majority of TASC's work for the Federal government, but TASC also builds and implements turn-key systems itself. This work, called specialized information system integration, is usually done by integrating commercial hardware and software programs with TASC-developed custom software. Due to its technology and management expertise, TASC is also called upon to provide analytic studies and evaluations of various technical, organizational and policy issues for U.S. government customers in areas of defense, intelligence, arms control, economic assessment, procurement and manufacturing. For use in 9 12 manufacturing applications, TASC has developed unique analytical tools and databases to measure the cost and effectiveness of government incentive strategies and defense system warranties. TASC has successfully grown its U.S. government business revenues in the face of national security spending cutbacks through the company's emphasis on leading edge technology and its application to critical missions. As the U.S. government has shifted to using information technology to maintain an adequate defense posture with fewer resources, TASC has increased its emphasis on surveillance, command/control/communications, simulation, "smart weapons," information warfare and the integration of tactical and strategic intelligence. The following are certain important characteristics of TASC's business with the Federal government. Concentration. Approximately 87%, 87% and 88% of TASC's revenues for the years ended December 31, 1996, 1995, and 1994, respectively, were derived from contracts held by TASC with U.S. government agencies and from subcontractors with U.S. government prime contractors. TASC's revenues from its three largest contracts with the U.S. government comprised approximately 22%, 23%, and 26% of TASC's total revenues for the years ended December 31, 1996, 1995 and 1994, respectively. No other single customer accounted for 10% or more of TASC's or Primark's consolidated revenues for these years. Government Security Clearances. TASC is involved in a number of classified programs and its ability to maintain its current base of business and to grow in the future is based in part upon its ability to provide employees and facilities which meet rigorous U.S. government security requirements. There can be no assurance that the company will be able to meet these requirements in the future. Pricing. TASC's U.S. government business is performed under cost reimbursement, fixed price and fixed-rate time and materials ("T&M") contracts. Cost reimbursement contracts awarded to TASC include cost plus fixed fee and cost plus award fee contracts. Fees may either be fixed by the contract (cost plus fixed fee), or variable based on actual performance within specified limits for such factors as cost, quality and delivery schedule, and the customer's subjective evaluation of TASC's work (cost plus award fee). TASC is subject to regular audits with respect to costs incurred and charged to the government. Such audits may result in the disallowance of amounts charged to or paid by the government. There can be no assurance that such disallowance will not be claimed or imposed against the company, and if imposed, will not have a material impact. For the year ended December 31, 1996, approximately 80% of TASC's revenue from U.S. government contracts was generated by cost reimbursement contracts; approximately $399 million and $321 million of TASC's backlog at December 31, 1996, and 1995, respectively, were associated with cost reimbursement contracts. See "Backlog." Under fixed price contracts, TASC agrees to perform certain work for a fixed price and, accordingly, realizes the benefit or detriment resulting from decreased or increased costs of performing the contract. Under a fixed-rate T&M contract, TASC has the responsibility to deliver professional services at a predetermined hourly rate; thus, the profitability of such contracts depends upon TASC's ability to deliver the specified services at costs below the rates received from the government. For the year ended December 31, 1996, approximately 20% of TASC's revenue from U.S. government contracts was fixed price or fixed rate T&M contracts. Approximately $159 million and $131 million of TASC's backlog at December 31, 1996 and 1995, respectively, were associated with fixed price or fixed rate T&M contracts. See "Backlog." Annual Funding. The U.S. government programs in which TASC participates may extend for several years, but are normally contracted and funded on an annual basis. Government contracts generally are conditioned upon the continuing availability of Congressional appropriations. Congress usually appropriates funds on a fiscal year basis, even though contract performance may take several years. Consequently, at the outset of a major program, the contract is generally partially funded and additional monies are normally committed to the contract by the procuring agency only if and as appropriations are made by Congress for future fiscal years. Limitations imposed on spending by U.S. government agencies, which might result from efforts to reduce the Federal deficit or for other reasons, may limit the continued funding of TASC's existing contracts with the U.S. government and may limit the ability of TASC to obtain additional contracts. All contracts made with 10 13 the U.S. government may be terminated by the U.S. government at any time, with or without cause. In addition, TASC's operations are subject to the usual risks inherent in contracting with the U.S. government on national security related programs such as national and global political, social and economic events that may affect U.S. national security programs. No assurance can be given that the current level of government spending for national security programs will continue, that the U.S. government will continue its commitment to programs in which TASC's products and services are applicable, or that TASC will not be adversely affected by any decline in that spending or commitment by the U.S. government. TASC has rarely had a contract canceled and has been working on most of its programs for many years; in the case of some programs, TASC's involvement has encompassed the entire 30-year history of the company. However, one notable exception was TASC's contract with the Ballistic Missile Defense Organization (the "BMDO"), which was formerly called the Strategic Defense Initiative. TASC was the second largest systems engineering and technical assistance contractor for this program, and held a contract to support the program for six and one-half years, from April 1988 to December 1994. Revenues from this contract peaked in 1992, reaching $55.6 million. Due to changing government priorities, funding was reduced to $16.5 million in 1994 and $1.5 million in 1995. In 1995, the number of prime contractors was reduced from three to one. Although TASC was not selected for the contract, it continues to perform a modest amount of work for BMDO. Despite the loss of this contract, TASC was able to grow its government contract revenues in 1994, 1995 and 1996 by 5.6%, 10.9% and 12.1%, respectively. Backlog. TASC's backlog (anticipated revenues from the uncompleted portions of existing contracts, including options to continue specific contracts beyond the current funding period) at December 31, 1996 and 1995 was approximately $533 million and $453 million, respectively. TASC's total backlog includes $14.1 million and $8.3 million of backlog related to commercial business activity for the years ended 1996 and 1995, respectively. Approximately $303 million of TASC's 1996 backlog and $247 million of the 1995 backlog represents revenues expected to be realized beyond a twelve month period. TASC's backlog is subject to seasonal fluctuations as a result of multi-year contracts and annual renewals of other contracts throughout the year. Substantially all of TASC's contracts reflected in the backlog are subject to termination at the convenience of the customer. WSI and Other Commercial Business While the U.S. government's need for information technology remains a stable source of growth, the principal growth strategy for TASC is to leverage information technology developed under government contracts into new, higher margin commercial markets. As an example, TASC has used its satellite imaging, communications database and workstation technology as the foundation for the weather information business of its subsidiary, WSI. WSI provides its clients with timely and accurate weather information services on a 24 hour basis. WSI, through the application of information technology supplied by TASC, has developed automated satellite ground stations to receive information from meteorological satellites that are used to create a variety of information products, including weather satellite images commonly seen on commercial television. An information system has been built to use this information from meteorological satellites, together with inputs from the U.S. national network of weather radar and worldwide observations of weather conditions supplied through the World Meteorological Organization. This data, along with forecasts and warnings provided by the U.S. National Weather Service, is used as the basis for specialized information services that are provided to users of real-time weather information including news media organizations, the aviation industry, agri-businesses and energy utilities. WSI provides these clients with workstations to receive and analyze the data, as well as to display the results. WSI is more directly reaching consumers of weather information through INTELLICAST, the Company's popular worldwide web site, and through agreements to provide weather data, imagery, and on-site broadcast services to cable news channels, such as MSNBC and Fox. TASC is entering a number of new commercial markets on a worldwide basis, using information technology developed under U.S. government contracts. Document management is a fast-growing market as more businesses move to the "paperless office" to organize their data, speed information retrieval and reduce 11 14 storage costs. Using proprietary data compression and COLD (computer output to laser disk) software, TASC has designed and built document management systems for financial services and healthcare firms, as well as for state government agencies. TASC's geographic information systems software, sensor technology and hyperspectral analysis capabilities have positioned TASC to perform environmental analysis, surveillance and monitoring for business and government, both within the United States and in foreign countries. Additionally, TASC's communications engineers have assisted major oil companies and financial institutions with network design and are providing support to Motorola in the development of the Iridium satellite-based personal communications system. Yankee Group Founded in 1970 and acquired by Primark in 1996, the Yankee Group is a global team of highly skilled technology and market experts that focuses on identifying current trends and future directions in communications and computer systems industries for commercial, industrial and consumer markets. The company markets these insights by providing strategic planning, technology forecasting, consulting and market research to clients worldwide, including vendors and users of major computer and communications systems and services. The Yankee Group's products and services fall into three principal categories -- Planning Services, Custom Consulting Engagements, and Seminars and Conferences. Planning Services accounted for 71% of Yankee Group's revenues for the year ended December 31, 1996. The Yankee Group currently offers several Planning Service packages catered to specific customer information technology needs. An annually renewable subscription for this service provides consultation time with a research analyst, quarterly audio conferences, subscription to the Yankee Group's published research reports and whitepapers, as well as access to electronic distribution of the company's research, discounts on seminars and participation in quarterly audio conferences. Custom consulting engagements accounted for 20% of Yankee Group's revenues for the year ended December 31, 1996. Custom consulting engagements often result from an extension of Planning Services when an inquiry or a study is more extensive than that offered through a Planning Service subscription. Custom consulting contracts are also entered into with external parties where the company considers the study to be of strategic importance. Seminars and Conferences accounted for 9% of the company's total revenues for the year ended December 31, 1996. The Yankee Group holds an average of fifteen to twenty events a year, often in conjunction with industry publication houses. None of Yankee Group's customers contributes more than 10% of its revenues. Accordingly, the company does not believe that the loss of any one Yankee Group customer would have a material effect on the Yankee Group's business. The Yankee Group's industry analysts are one of its critical resources. These individuals have significant expertise in their areas of concentration, gained through industry experience, constant study of the technology market and through communications with vendors and users in the industry. Marketing TASC's marketing activities are conducted principally by its senior management and by its professional staff of engineers, scientists and analysts. TASC's marketing approach for both U.S. government and commercial organizations begins with the development and organization of information concerning both present and future requirements of potential customers. TASC believes that its marketing approach enables it to anticipate the technical and other needs of its customers, and allows it to develop proposals that satisfy customers' requirements. TASC places significant emphasis on the importance of client satisfaction and development of repeat business. TASC prepares a number of proposals in response to U.S. government Requests for Proposals ("RFPs"). The bidding on RFPs is often highly competitive and preparing bids is an expensive and time consuming process requiring significant allocation of highly qualified TASC personnel. If TASC's proposal for a contract 12 15 is accepted, TASC and its customer will negotiate and enter into a contract with agreed upon price, terms and conditions. In addition, TASC often submits unsolicited proposals to various U.S. government agencies which often lead to contract awards on a negotiated basis. Approximately 40% of TASC's 1996 contracts resulted from the competitive RFP process. WSI, the Yankee Group, and other commercial efforts utilize direct sales personnel, mailings, trade journal advertising and trade shows to distribute information on the products and services offered. The marketing of larger, customized systems often uses techniques similar to those employed for the U.S. government, involving professional personnel, the submission of unsolicited proposals and the response to commercially prepared RFPs. Competition Information technologies ("IT") are becoming increasingly important to organizations' business strategy. The pace of technological change has accelerated, and the ability of an organization to integrate and deploy new information technologies is critical to its competitiveness. As a result, organizations are making substantial financial commitments to IT systems and products. The Yankee Group differentiates itself from its competitors based upon its excellence in market research and consulting done at the crossroads where computer and communication technologies meet. Additionally, the Yankee Group differentiates its services from those offered by other IT research firms such as The Meta Group and The Gartner Group Inc. by delivering IT industry coverage through a higher level of personal service, a greater emphasis on client/analyst interaction and a balance between vendor and user clients. Most of the business areas in which the applied technology services are involved are competitive and require highly skilled and experienced technical personnel. These companies believe that skilled and experienced technical personnel are critical to maintaining their competitive position. Many of the TASC business areas also require high levels of U.S. government security clearances, as previously discussed. Many of TASC's contracts are acquired as a result of competitive bidding, only a portion of which may result in the award of contracts. TASC believes that its success in the competitive bidding process depends on a variety of factors, including the technical content of the contract proposal, performance on previous contracts, reputation, experience and price. The applied technology companies compete with many companies in the business areas in which they are engaged, some of which have greater resources. There can be no assurance that these companies will be able to compete successfully with these companies in the future. Patents and Technical Data TASC owns six patents and has two pending patent applications. In selected business areas, patent protection is increasingly important to TASC's operations. In addition, TASC utilizes trade secret protection to safeguard key technologies and software critical to its business. Commercial software products benefit from copyright protection and are marketed under limited license agreements. Certain technical data and software that was developed wholly under government contracts and delivered to the government is subject to unlimited rights of the U.S. government and may be disclosed by the government to third parties, including competitors of TASC. The Company does not believe that the subsequent use of this data or software by the U.S. government or its contractors has had or will have a material adverse effect on its business. TRANSPORTATION SERVICES TIMCO was formed by the Company in 1989 to operate a newly constructed heavy aircraft maintenance facility located at the Piedmont Triad International Airport in Greensboro, North Carolina. TIMCO opened for business in October 1990. The company provides major aircraft maintenance services such as scheduled maintenance checks, modifications, overhauls and repair work on cargo and passenger aircraft. TIMCO holds a Class IV Repair Station Certificate issued by the Federal Aviation Administration ("FAA") which enables TIMCO to work on all aircraft types. TIMCO has also been classified as a Designated Alteration Station by the FAA, allowing the company to approve major modifications to aircraft normally reserved for the FAA. 13 16 TIMCO's services are offered to the industry at large, and in particular to operators and owners of aircraft who do not have maintenance facilities of their own, or whose facilities are unable to accommodate an increasing workload. Emphasis has been and will continue to be placed on air cargo carrier customers who have limited facilities to accomplish the required work and on passenger airlines that desire to outsource maintenance services. In addition, TIMCO targets both aircraft involved in sale or lease transactions as potential sources of business. TIMCO currently has five anchor customers: ABX Air, Inc. (also known as Airborne Express), Emery Worldwide Airlines, Continental Airlines, Northwest Airlines and United Parcel Service. These customers generated over 1,389,000 man-hours of TIMCO's 1,948,000 total man-hours in 1996. Loss of any of the above customers' contracts, or any future contracts with major customers, could have a material adverse effect on TIMCO. As of December 31, 1996, TIMCO had approximately 1,223,000 man-hours worth of business contracted for 1997. The industry in which TIMCO operates is highly competitive. Space availability, price, quality, trained personnel, on-time delivery and accountability are the key competitive factors in the heavy aircraft maintenance industry. These factors will determine its future success in the industry. ITEM 2. PROPERTIES The Company currently occupies its principal executive offices, comprised of approximately 18,000 square feet, in Waltham, Massachusetts under lease agreements that expire in July 2001 with provision for two five-year renewal options. Datastream's two principal office facilities are located in London, England. Comprised of an aggregate total of 100,995 square feet, these facilities are occupied under lease agreements that expire in 2005 and 2018. Through its affiliates, Datastream also occupies, under short-term leases, an aggregate total of approximately 55,000 square feet of office space, principally located in Australia, Canada, France, Germany, Hong Kong, Italy, Japan, the Netherlands, Singapore, Sweden, Switzerland, Thailand and the United States. Disclosure's headquarters, comprised of approximately 99,640 square feet, is located in Bethesda, Maryland. The property is occupied under lease agreements that expire in 2006. Disclosure's regional offices occupy approximately 64,200 square feet of office space under lease terms that expire through 2004. These offices are located in California, Georgia, Illinois, Massachusetts, New York, Texas and Washington, D.C. I/B/E/S occupies 39,800 square feet of space at its New York City headquarters under a lease agreement that expires in 2007. Additional office space totaling 5,300 square feet is located in England, Japan and Hong Kong with lease terms through 2004. ICV's facilities occupy approximately 24,300 square feet of space located throughout the United Kingdom under lease terms through 2001. TASC's principal facilities, aggregating approximately 780,000 square feet, are occupied under leases expiring at various dates through 2006. TASC's headquarters is located in Reading, Massachusetts and has regional offices in Alabama, Arizona, Colorado, Florida, Georgia, Illinois, Maryland, Michigan, Missouri, New Mexico, New York, Ohio, Oklahoma, Texas, Utah, Virginia, Washington, D.C. and England. TIMCO leases a heavy aircraft maintenance facility from the Piedmont Triad International Airport Authority (the "Triad Authority") for an initial 30-year lease term, with renewal options which could extend the lease term to the year 2029. Located in Greensboro, North Carolina, the facility encompasses over 523,000 square feet, which includes 281,600 square feet of hanger space, 137,600 square feet of support shop area and 33,200 square feet of administrative office space. The facility is located on 45 acres. Vestek occupies approximately 13,400 square feet of space at its San Francisco headquarters under a lease agreement that expires in 1999 with provision for one five-year renewal option. 14 17 Worldscope occupies 7,100 square feet at its Bridgeport Connecticut headquarters with lease terms through 2000. Its operating facilities, located in Ireland and India occupy an additional 17,500 square feet with lease terms expiring through 2013. The Yankee Group occupies approximately 23,600 square feet of space at its Boston headquarters under a lease agreement that expires in 2003. The company has international offices located in London, Tokyo and Sydney. The Company believes that its facilities are adequate for its present needs, but will continue to evaluate the need for additional space as the growth of the business requires. ITEM 3. LEGAL PROCEEDINGS BRADLEY V. GELB ET AL. On June 24, 1994, a jury in a civil case in the Massachusetts Superior Court (the "Court") returned an unfavorable verdict against the two founders of TASC, and against TASC itself. The suit was brought by a former employee regarding a TASC stock transaction which took place in 1976, prior to the Company's acquisition of TASC in 1991. On June 28, 1994, the Court ordered that judgment be entered on the verdict requiring the two founders (but not TASC itself) to disgorge $19,800,000. Such amount accrues post-judgment interest at a statutory rate. As an alternative course of action, the plaintiff may pursue the two founders and TASC, jointly and severally, for $48,600. Based on the adjudication, the Company has denied requests of the two founders for indemnification. Certain post-verdict motions (including a motion for judgment notwithstanding the verdict, and in the alternative, a motion for a new trail) are pending. While the outcome of these motions cannot be predicted with certainty, the Company believes it will not be required to pay any portion of this judgment. OTHER MATTERS The Company and its subsidiaries are involved in certain other administrative proceedings and matters concerning issues arising in the ordinary course of business. Management cannot predict the final disposition of such issues, but believes that adequate provision has been made for the probable losses, and the ultimate resolution of these proceedings will not have a material adverse effect on the Company's financial condition, results of operations or financial liquidity. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS No matters were submitted to a vote of security holders during the last quarter of 1996. 15 18 EXECUTIVE OFFICERS OF THE REGISTRANT Information with respect to the executive officers of the Company, as of February 28, 1997, is set forth below. Such officers are elected by the Company's Board of Directors generally for a one-year term expiring at the next organizational meeting to be held in May 1997. The terms for Mr. Kasputys, Mr. Holt and Mr. Herenstein are governed by their respective employment agreements. Under these agreements, Mr. Kasputys is employed as the Chairman, President and Chief Executive Officer of Primark through December 31, 2001; Mr. Holt is employed as President and Chief Executive Officer of TASC until December 31, 1998; and Mr. Herenstein is employed as Senior Vice President of Marketing of Primark through June 30, 1998.
NAME AGE BUSINESS EXPERIENCE DURING PAST FIVE YEARS - - --------------------------- --- ----------------------------------------------------------- Joseph E. Kasputys......... 60 Chairman, President and Chief Executive Officer of the Company since 1988. Mr. Kasputys has been a director of the Company since 1987. John C. Holt............... 56 Executive Vice President of the Company, President and Chief Executive Officer of TASC, Inc. since February 1994. From 1982 until January 1994, Mr. Holt held the position of Executive Vice President of The Dun & Bradstreet Corporation ("D&B"), an information services company, and served as a director of that company from 1985 until 1994. In addition, Mr. Holt is the former Chairman, President and Chief Executive Officer of the A.C. Nielsen Company, a marketing information business and an affiliate of D&B. Mr. Holt has been a director of the Company since 1985. Stephen H. Curran.......... 49 Senior Vice President and Chief Financial Officer of the Company since 1988. Ira Herenstein............. 59 Senior Vice President of Marketing of the Company since December 1996. From June 1995 to November 1996, Mr. Herenstein was Managing Director of Datastream International, Inc. From March of 1994 to June of 1995, he was president of Datastream's North American operations. From 1992 until March of 1994, Mr. Herenstein was an independent consultant in the financial information services industry. In addition, Mr. Herenstein was with the McGraw-Hill Corporation for 28 years, during which he held the positions of president of Standard & Poor's Corporation and executive vice president of the Computer and Communications Information Group. Michael R. Kargula......... 49 Senior Vice President, General Counsel and Secretary of the Company since 1988. Patrick G. Richmond........ 47 Vice President of Corporate Development of the Company since May 1989. William J. Swift III....... 45 Vice President and Tax Counsel of the Company since 1988.
16 19 PART II ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS The Company's common stock is listed and traded on the New York Stock Exchange and the Pacific Stock Exchange. Other information set forth in the section entitled "Supplementary Financial Information-Quarterly Data" on page 43 of the Company's 1996 Annual Report is incorporated by reference herein. Since 1988, the Company has not paid cash dividends on common stock to its shareholders in order to reinvest available cash in the Company's operations. Information regarding restrictions on the Company's ability to pay cash dividends on its common stock is incorporated by reference herein from Note 6 to the Consolidated Financial Statements entitled "Short-Term and Long-Term Debt," on page 30 of the Company's 1996 Annual Report. ITEM 6. SELECTED FINANCIAL DATA The information set forth in the section entitled "Selected Financial Information -- Five Year Data" on page 42 of the Company's 1996 Annual Report is incorporated by reference herein. ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION The information set forth in the section entitled "Management's Discussion and Analysis of Results of Operations and Financial Condition" on pages 39 through 41 of the Company's 1996 Annual Report is incorporated by reference herein. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The Consolidated Financial Statements and the related notes thereto, and the Report of Independent Certified Public Accountants, as contained on pages 22 through 38 of the Company's 1996 Annual Report, and the "Supplementary Financial Information -- Quarterly Data", as contained on page 43 of the Company's 1996 Annual Report, are incorporated by reference herein. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE Not Applicable. PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT The information set forth in the section entitled "Election of Directors" in the Company's 1997 Proxy Statement for its May 1997 Annual Meeting of Shareholders is incorporated by reference herein. Information regarding the executive officers of the Company is set forth in the section entitled "Executive Officers of the Registrant" on page 16 in Part I of this report on Form 10-K. ITEM 11. EXECUTIVE COMPENSATION The information set forth in the sections entitled "Directors' Compensation," "Executive Compensation," "Compensation Committee Report," "Employment Agreements and Other Arrangements," and "Compensation Committee Interlocks and Insider Participation" of the Company's 1997 Proxy Statement for its May 1997 Annual Meeting of Shareholders is incorporated by reference herein. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The information set forth in the sections entitled "Security Ownership of Certain Beneficial Owners" and "Security Ownership of Management" of the Company's 1997 Proxy Statement for its May 1997 Annual Meeting of Shareholders is incorporated by reference herein. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS The information set forth in the sections entitled "Executive Compensation," "Compensation Committee Interlocks and Insider Participation" and "Employment Agreements and Other Arrangements" of the Company's 1997 Proxy Statement for its May 1997 Annual Meeting of Shareholders is incorporated by reference herein. 17 20 PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K (a) LIST OF DOCUMENTS FILED AS PART OF FORM 10-K 1. Financial Statements: - Consolidated Statements of Financial Position as of December 31, 1996 and 1995* - Consolidated Statements of Income for each of the three years in the period ended December 31, 1996* - Consolidated Statements of Cash Flows for each of the three years in the period ended December 31, 1996* - Consolidated Statements of Common Shareholders' Equity for each of the three years in the period ended December 31, 1996* - Notes to the Consolidated Financial Statements* - Management's Discussion and Analysis of Results of Operations and Financial Condition* - Report of Independent Certified Public Accountants* - Selected Financial Information -- Quarterly Data* 2. Financial Statement Schedules: - Financial statement schedules have been omitted as they are not applicable or not required, or the required information is not material or is included in the consolidated financial statements thereto. 3. Exhibits: - The Exhibits filed as part of this Annual Report on Form 10-K are listed in the Index to Exhibits on pages 18 to 21, and are incorporated by reference herein. (b) REPORTS ON FORM 8-K - On November 13, 1996, the Company filed a report on Form 8-K under Item 2, related to the acquisition of ICV, Ltd. - On February 7, 1997, the Company filed an amendment to Item 7 of the Form 8-K filed on November 13, 1996 related to the acquisition of ICV. - On February 4, 1997, the Company filed a report on Form 8-K under Item 9 related to the sales of equity securities overseas in reliance upon Regulation S promulgated under the Securities Act of 1933. (c) EXHIBITS The Company hereby files as part of this Annual Report on Form 10-K the Exhibits listed in the Index to Exhibits. (d) FINANCIAL STATEMENT SCHEDULES Not Applicable. - - --------------- * Referenced information is contained in Primark's 1996 Annual Report filed as Exhibit 13.1 hereto. 18 21 EXHIBIT INDEX
EXHIBIT NUMBER DESCRIPTION OF DOCUMENT - - ------ ----------------------------------------------------------------------------------- Plan of Acquisition, Reorganization, Arrangement, Liquidation or Succession 2.1 Purchase Agreement dated as of June 18, 1996, between Datastream International (France) SA and Talisman Management LTD (Exhibit 2-1 to the Company's June 20, 1996 Form 10-Q). 2.2 Stock Purchase Agreement between the Company and Howard Anderson dated as of August 9, 1996 (Exhibit 2-1 to the Company's August 15, 1996 Form 8-K). 2.3 Stock Purchase and Sale Agreement dated as of September 30, 1996, between the Company and American Natural Resources Company (Exhibit 2-3 to the Company's September 30, 1996 Form 10-Q). 2.4 Agreement for sale/purchase of the issued share capital of ICV Limited, between D. Taylor Esq. and others, Primark Information Services UK Limited and Primark Corporation dated October 24, 1996 (Filed as Exhibit 2.1 to the Company's Form 8-K dated November 13, 1996). 2.5* Amended and Restated Partnership Agreement for Worldscope/Disclosure International Partners; Irish Partnership Interest Purchase and Sale Agreement; and Partnership Interest Purchase and Sale Agreement; dated as of October 15, 1996; filed herewith. 2.6* Stock Purchase Agreement dated as of November 24, 1996, between the Company, Bowne & Co., Inc., and Robert G. Patterson, filed herewith. 2.7* Stock Purchase Agreement dated as of January 16, 1997, between the Company, WEFA Holdings, Inc., and the stockholders of WEFA Holdings, Inc., filed herewith. 2.8 Stock Purchase Agreement between Primark Corporation and VNU International B.V. dated as of May 26, 1995 (Exhibit 2.1 to the Company's Form 8-K dated June 2, 1995); Amendment to Agreement dated as of June 29, 1995 (Exhibit 2.1 to the Company's Form 8-K dated July 3, 1995). 2.9 Acquisition Agreement by and among Datastream International, Inc., VSI Acquisition, Inc. and Vestek Systems, Inc. dated May 20, 1994 (Exhibit 2.7 to the Company's 1994 Form 10-K). 2.10 Loan Modification Agreement dated July 15, 1994, by and among Network Financial Services, Inc., Westmark Mortgage Corporation, Primark Corporation, and JMS Companies, Inc. (Exhibit 2.5 to the Company's 1994 Form 10-K). Articles of Incorporation and By-Laws 3.1 Articles of Incorporation of the Company (Exhibit 3.1 to the Company's Registration Statement No. 2-74688); Amendment to the Articles of Incorporation (Exhibit 3.1 to the Company's 1985 Form 10-K); Amendment dated June 16, 1988 (Exhibit 3.1 to the Company's 1988 Form 10-K); Amendment dated August 8, 1991 (Exhibit 3(a) to the Company's Form 8-K dated August 9, 1991); Amendment dated May 27, 1992 (Exhibit 3.1 to the Company's June 30, 1992 Form 10-Q). 3.2 By-Laws of the Company, as amended (Exhibit 3.1 to the Company's September 30, 1990 Form 10-Q). Instruments defining the rights of security holders, including indentures. 4.1* Registration Rights Agreement dated January 7, 1997, between the Company and Joseph E. Kasputys; filed herewith. 4.2 Indenture dated as of October 18, 1993 by and among the Company and The First National Bank of Boston, as Trustee (Exhibit 4.1 to the Company's September 30, 1993 Form 10-Q).
19 22
EXHIBIT NUMBER DESCRIPTION OF DOCUMENT - - ------ ----------------------------------------------------------------------------------- 4.3 Rights Agreement dated January 12, 1988, between the Company and Bankers Trust Company, which includes, as Exhibit A thereto, the Rights Certificate and, as Exhibit B thereto, the Summary of Rights to Purchase Common Stock (Exhibit 28.1 to the Company's Form 8-K dated January 14, 1988); Certified Copy of Resolution amending the Company's rights Agreement (Exhibit 28.4 to the Company's Form 8-K dated July 13, 1988); Amendment to Rights Agreement dated April 9, 1990 (Exhibit 28.1 to the Company's Form 8-K dated April 12, 1990); Letter, dated May 10, 1990, regarding appointment of Bank of America as new Rights Agent under the Rights Agreement, as amended (Exhibit 28.1 to the Company's 1990 Form 10-K); Amendment to Rights Agreement dated May 31, 1992, between the Company and Bank of America National Trust and Savings Association, as Rights Agent (Exhibit 28.1 to the Company's June 30, 1992 Form 10-Q); Letter dated July 31, 1992, regarding the appointment of The First National Bank of Boston as new Rights Agent (Exhibit 28.2 to the Company's June 30, 1992 Form 10-Q). Material Contracts 10.1 Primark Corporation 1992 Stock Option Plan dated March 2, 1992 (Exhibit 10.26 to the Company's 1991 From 10-K); Amendment dated September 28, 1995 (Exhibit 10.22 to the Company's 1995 Form 10-K). 10.2* Primark Corporation Stock Option Plan for Non-Employee Directors, as amended, dated January 12, 1988 (Exhibit 10.57 to the Company's 1987 From 10-K); Amendment dated February 21, 1992 (Exhibit 10.24 to the Company's 1991 Form 10-K); Amendment dated September 28, 1992 (Exhibit 28.3 to the Company's September 30, 1992 Form 10-Q). Amendment dated September 22, 1995; filed herewith. 10.3 Primark Corporation Executive Share Option Scheme (Exhibit 10.26 to the Company's 1992 Form 10-K); Amendment dated September 28, 1995. (Exhibit 10.24 to the Company's 1995 Form 10-K). 10.4 Primark Corporation Savings and Stock Ownership Plan, as amended and restated, effective January 1, 1997; (filed as Exhibit 4.4 to the Company's Registration Statement on Form S-8 dated December 10, 1996). 10.5 Primark Corporation 1992 Employee Stock Purchase Plan dated March 2, 1992 (Exhibit 10.27 to the Company's 1991 Form 10-K); Amended and Restated Stock Purchase Plan and related Prospectus as filed under the Securities Act of 1933 (Exhibit 10.27 to the Company's 1993 Form 10-K); Amendment dated October 4, 1995 (Exhibit 10.26 to the Company's 1995 Form 10-K). 10.6 Management Incentive Plan adopted by Board of Directors on January 12, 1988 (Exhibit 10.64 to the Company's 1987 Form 10-K); Amendment dated February 21, 1992 (Exhibit 10.33 to the Company's 1991 Form 10-K). 10.7 Form of promissory note to be issued to the Company by executive officers in connection with the Company's 1988 Management Incentive Plan (Exhibit 10.1 to the Company's March 31, 1989 Form 10-Q). 10.8 Promissory notes dated September 30, 1988, issued to the Company by executive officers (Exhibit 10.1 to the Company's September 30, 1988 Form 10-Q). 10.9 Restricted Stock Award Agreements and Stock Option Agreements (Exhibit 4(b) to the Company's Registration Statement No. 2-3876). 10.10 Employment and related agreements between the Company and Joseph E. Kasputys dated February 21, 1992 (Exhibit 10.32 to the Company's 1991 Form 10-K). 10.11* Employment and Option agreements between the Company and Joseph E. Kasputys dated January 7, 1997; filed herewith. 10.12* Employment and related agreements between The Analytic Sciences Corporation, the Company and John C. Holt dated February 28, 1994 (Exhibit 10.32 to the Company's 1993 Form 10-K); Amendment dated February 29, 1996; filed herewith. 10.13* Employment Agreement between the Company and Ira Herenstein dated December 3, 1996; filed herewith.
20 23
EXHIBIT NUMBER DESCRIPTION OF DOCUMENT - - ------ ----------------------------------------------------------------------------------- 10.14 Supplemental Death Benefit and Retirement Income Plan Agreement, as amended and restated, dated March 25, 1986 (Exhibit 19.1 to the Company's March 31, 1985 Form 10-Q); Certified Copy of Resolution amending the Supplemental Death Benefit and Retirement Income Plan Agreement (Exhibit 10.17 to the Company's 1990 Form 10-K); as amended and restated as of January 1, 1992 (Exhibit 10.22 to the Company's 1991 Form 10-K); Amendment dated September 28, 1992 (Exhibit 28.4 to the Company's September 30, 1992 Form 10-Q). 10.15* Supplemental Medical Reimbursement Insurance Plan; filed herewith. 10.16 Form of Change of Control Compensation Agreement entered into between the Company and selected executive officers (Exhibit 10.60 to the Company's 1987 Form 10-K). 10.17* Refinancing Agreements (Revolving Credit Agreement, Term Loan Agreement, Pledge Agreement, Collateral Agency Agreement, and Note Backup Agreement) dated as of February 7, 1997, by and among Primark Corporation, Lenders Parties, Mellon Bank, N.A. and other related documents; filed herewith. 10.18* Form of variable rate unsecured loan notes dated October 24, 1996 between the Company and the former shareholders of ICV, Ltd; filed herewith. 10.19* Credit Agreement dated October 23, 1996, by and among the Company, Lenders Parties and Mellon Bank, N.A.; (Exhibit 10.1 to the Company's Form 8-K dated November 13, 1996). Amendments dated October 23, 1996; filed herewith as Exhibit 10.20, December 18, 1996; filed herewith as Exhibit 10.21 and January 9, 1997; filed herewith as amended by Note Backup Agreement dated February 7, 1997, filed herewith as Exhibit 10.17. 10.20* Revolving Credit Agreement dated as of June 29, 1995, between Primark Corporation, Lenders Parties, Mellon Bank, N.A. and The First National Bank of Boston and other related documents (Exhibit 10.1 to the Company's Form 8-K dated July 3, 1995); amendments dated October 23, 1996; filed herewith, December 18, 1996; filed herewith as Exhibit 10.21 and January 9, 1997; filed herewith as Exhibit 10.19. 10.21* Term Loan Agreement dated as of June 29, 1995, between Primark Corporation, Lenders Parties, Mellon Bank, N.A. and The First National Bank of Boston and other related documents (Exhibit 10.2 to the Company's Form 8-K dated July 3, 1995); amendments dated October 23, 1996; filed herewith as Exhibit 10.20, December 18, 1996; filed herewith and January 9, 1997; filed herewith as Exhibit 10.19. 10.22 Loan Agreement dated as of June 29, 1995, between TASC, Inc. and Mellon Bank, N.A. (Exhibit 10.1 to the Company's Form 8-K dated July 3, 1995). 10.23 Guaranty Agreement dated November 1, 1989, between Triad International Maintenance Corporation and Piedmont Triad Airport Authority (Exhibit 10.30 to the Company's 1989 Form 10-K). 10.24 Reimbursement Agreement dated October 1, 1989, between Triad International Maintenance Corporation and Mellon Bank, N.A. (Exhibit 10.31 to the Company's 1989 Form 10-K); Amendment dated September 25, 1992 and other related documents (Exhibit 28-4 to the Company's Form 8-K dated October 7, 1992); Amendments to Agreement and other related documents dated February 1, 1993 (Exhibit 10.43 to the Company's 1993 Form 10-K). 10.25 Underwriting Agreement dated November 29, 1995, by and among Primark Corporation and Paine Webber Incorporated (Exhibit 1.1 to the Company's November 7, 1995 Form S-3 Amendment No.1). 10.26 International Underwriting Agreement dated December 5, 1995, by and among the Primark Corporation and Paine Webber Incorporated (Exhibit 1.2 to the Company's November 7, 1995 Form S-3 Amendment No. 1). Annual Report to Security Holders 13.1* Primark Corporation 1996 Annual Report (which is not deemed to be "filed" except to the extent that portions thereof are expressly incorporated by reference in this Annual Report on Form 10-K); filed herewith.
21 24
EXHIBIT NUMBER DESCRIPTION OF DOCUMENT - - ------ ----------------------------------------------------------------------------------- Subsidiaries of Registrant 21.1* Subsidiaries of Primark Corporation; filed herewith. Consents of Experts and Counsel 23.1* Consent of Independent Certified Public Accountants; filed herewith. 24.1* Powers of Attorney; filed herewith 27* Financial Data Schedule; filed herewith
- - --------------- * Indicates document filed herewith. For the Company's documents incorporated by reference, references are to File No. 1-8260. 22 25 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on the 27th day of March, 1997. PRIMARK CORPORATION -------------------------------------- (Registrant) By: /s/ STEPHEN H. CURRAN ------------------------------------ STEPHEN H. CURRAN SENIOR VICE PRESIDENT AND CHIEF FINANCIAL OFFICER The undersigned directors and officers of Primark Corporation, a Michigan corporation, hereby severally constitute and appoint Joseph E. Kasputys, Stephen H. Curran and Michael R. Kargula, and each of them, his or her true and lawful attorneys-in-fact and agents, each with full power and authority (acting alone and without the others) to execute in the name of and on behalf of the undersigned as such Director or Officer, an Annual Report on Form 10-K, for the year ended December 31, 1996, under the Securities and Exchange act of 1934, of said Corporation, and all amendments to such Annual Report on Form 10-K; hereby granting to such attorney and agents, and each of them full power of substitution and revocation in the premises; and hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
SIGNATURE TITLE DATE - - ---------------------------------------- ----------------------------- ------------------ /s/ JOSEPH E. KASPUTYS Chairman, President and Chief March 26, 1997 - - ---------------------------------------- Executive Officer (Principal Joseph E. Kasputys Executive Officer) /s/ STEPHEN H. CURRAN Senior Vice President and January 15, 1997 - - ---------------------------------------- Chief Financial Officer Stephen H. Curran (Principal Financial and Accounting Officer) /s/ JOHN C. HOLT Director and Executive Vice January 13, 1997 - - ---------------------------------------- President John C. Holt /s/ KEVIN J. BRADLEY Director January 31, 1997 - - ---------------------------------------- Kevin J. Bradley /s/ STEVEN LAZARUS Director January 15, 1997 - - ---------------------------------------- Steven Lazarus /s/ PATRICIA MCGINNIS Director January 15, 1997 - - ---------------------------------------- Patricia McGinnis
23 26
SIGNATURE TITLE DATE - - ---------------------------------------- ----------------------------- ------------------ /s/ JONATHAN NEWCOMB Director January 15, 1997 - - ---------------------------------------- Jonathan Newcomb /s/ CONSTANCE K. WEAVER Director January 15, 1997 - - ---------------------------------------- Constance K. Weaver /s/ IRA HERENSTEIN Senior Vice President of January 15, 1997 - - ---------------------------------------- Marketing Ira Herenstein /s/ MICHAEL R. KARGULA Senior Vice President, January 15, 1997 - - ---------------------------------------- General Counsel and Secretary Michael R. Kargula /s/ PATRICK G. RICHMOND Vice President of Corporate January 20, 1997 - - ---------------------------------------- Development Patrick G. Richmond /s/ WILLIAM J. SWIFT III Vice President and Tax January 2, 1997 - - ---------------------------------------- Counsel William J. Swift III By: /s/ STEPHEN H. CURRAN ------------------------------------ Stephen H. Curran Attorney-in-fact
24 EX-2.5 2 PURCHASE AGREEMENT 1 Exhibit 2.5 AMENDED AND RESTATED PARTNERSHIP AGREEMENT FOR WORLDSCOPE/DISCLOSURE INTERNATIONAL PARTNERS AMENDED AND RESTATED PARTNERSHIP AGREEMENT FOR WORLDSCOPE/DISCLOSURE INTERNATIONAL PARTNERS, an Irish partnership subject to the Partnership Act, 1890 of Ireland ("WDI"), (the "Partnership") is made and entered into as of this 15th day of October, 1996 by and among Disclosure International Incorporated, a Delaware corporation ("DII") and Wright Investors' Service International Limited, a limited liability company incorporated in Ireland ("WISI") and The Winthrop Corporation, a Connecticut corporation ("TWC"). DII and WISI and any other individual and/or business entity subsequently admitted shall be known as and referred to collectively as "Partners" and individually as a "Partner". RECITALS WHEREAS, Disclosure International, Incorporated, a Delaware corporation ("DII") and WISI had entered into a partnership agreement dated November 16, 1990, as amended by an agreement dated as of June 22, 1995 executed by Primark Corporation, a Michigan corporation, and TWC on behalf of themselves and their respective Affiliates, forming the Partnership pursuant to which each of DII and WISI had a 50% partnership interest in the Partnership; WHEREAS, simultaneously with the execution of this Agreement, TWC transferred 100% of its partnership interest in the Partnership to DII pursuant to the Partnership Interest Purchase and Sale Agreement entered into between DII and TWC (the "Irish Purchase and Sale Agreement"); with the result that, as of the date hereof, DII holds an 80% partnership interest in the Partnership and WISI holds a 20% partnership interest in the Partnership; 2 WHEREAS, DII and WISI, each a partner in the Partnership, have agreed to amend and restate the partnership agreement for the Partnership; WHEREAS, DII and WISI desire to enter into this written agreement (the "Agreement") in accordance with the Act (as defined herein) as to the affairs of the Partnership and the conduct of its business, which shall become effective upon consummation of the Closing (as defined herein); and WHEREAS, subsequent to the execution of the Irish Purchase and Sale Agreement, TWC will not be a partner in the Partnership but has agreed to assume certain obligations, including those under Article 10 hereof. NOW THEREFORE, in consideration of the mutual covenants contained herein, the Partners agree as follows: ARTICLE 1 Definitions ----------- "ABSTRACTED DATABASE PRODUCTS" means an electronic database, the contents of which are primarily the compilation of financial information extracted from various sources (including, but not limited to, corporate financial reports, print and electronic news sources and information services). Such products consist of templated or fielded data retrievable data item by data item and may include all of the numeric data and footnotes of any single securities filing or annual report, extracts of full text from various sources (including, but not limited to, the Chairman's letter, accounting footnotes, business description, and the explanation of financial results). No Abstracted Database Products will contain full text in amounts which would infringe any third party's copyrights or which would constitute more than 50% of the text (excluding numeric data and associated footnotes) of any single securities filing, annual report, etc. "ACT" means the Partnership Act, 1890 as in effect on the date hereof, and as it may be amended from time to time. "ADDITIONAL CAPITAL CONTRIBUTIONS" means any additional capital contributions made pursuant to Section 3.2 of this Agreement. 2 3 "AFFILIATE" means, with reference to a specific person, a person who, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, the specified person. "AT COST" means all direct incremental "out of pocket" costs (excluding overhead and general and administrative costs) associated with the provision of goods or services including an appropriate share of personnel compensation costs including benefits. "AT COST PLUS" means all costs associated with the provision of goods or services, plus a profit margin of 10%. Resources of the Partnership utilized by a Partner to which Section 2.10 applies shall include, but not be limited to: (a) personnel compensation costs including benefits; (b) services, supplies and utilized space; (c) general and administrative costs; (d) depreciation costs; (e) equipment maintenance costs; (f) legal services costs; and (g) library and database costs. "BUSINESS DAY" means any day (other than a day which is a Saturday, Sunday or public holiday in Ireland). "CALL" means the right of DII or DI to purchase all or part of WISI's Interest in the Partnership, pursuant to the terms of the Put and Call Agreement. "CAPITAL ACCOUNT" means, for each Partner, the capital account maintained by the Partnership for such Partner as described in Section 4.1. "CAPITAL CONTRIBUTION" means the amount of 3 4 money and the fair market value mutually agreed upon by the Partners of other property (net of any liabilities secured by such property that the Partnership is considered to assume or take) voluntarily contributed by a Partner to the Partnership, including Additional Capital Contributions. "CHANGE IN CONTROL" with respect to a Partner or DI shall mean the occurrence of one or more of the following events after the date hereof: (i) a person or group (as that term is used in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended) of persons shall have become the beneficial owner or have control over the voting of securities of such Partner, including any entity which, directly or indirectly, through ownership of one or more majority-owned successive subsidiary entities, owns more than 50% of the outstanding capital stock of such Partner, (or any Transferee which has acquired an Interest in the Partnership from such Partner, pursuant to the terms of this Agreement), representing a majority of the combined voting power of the outstanding securities of such Partner (or such Transferee), ordinarily having the right to vote in the election of directors, or (ii) directors representing a person or group (as so defined) of persons shall constitute a majority of the Board of Directors of such Partner (or such Transferee), or (iii) any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all, or substantially all, of the assets of such Partner (or such Transferee), to any person or group (as so defined) of persons, or (iv) the shareholders of such Partner (or such Transferee), shall approve any plan or proposal for the liquidation or dissolution of such Partner (or such Transferee). Notwithstanding the foregoing, (a) the transfer of the capital stock of TWC held by any shareholder, including John or Mildred Wright or their respective estates or trusts, to the School for Ethical Education or similar charitable institutions shall not constitute a Change in Control of TWC and (b) a person or group as used in (i) through (iii) above shall not include an Affiliate of a Partner or of DI. "CLOSING" means the closing at which, among other things, DII and WISI will enter into this Agreement. 4 5 "CODE" means the United States Internal Revenue Code of 1986, as amended from time to time or any successor statute. A reference to the Code shall be deemed to include any mandatory or successor provisions thereto. "DESIGNATED AFFILIATE" means, with respect to TWC, all Affiliates existing on the date hereof as well as any Affiliate that is formed in the future provided that (i) such formation is for legal, compliance or tax purposes and (ii) such Affiliate formed in the future carries on the same type of business activity as is carried on by TWC and its Affiliates on the date hereof. "DI" means Disclosure Incorporated, a Delaware corporation. "DI PARTIES" means DI and DII. "FISCAL YEAR" means the fiscal year of the Partnership as defined in Section 2.8 hereof. "FORMATION DATE" means the date on which the term of the Partnership commenced as defined in Section 2.4 hereof. "GAAP" means United States generally accepted accounting principles, as in effect from time to time. "INTEREST" means, with respect to any Partner at any time, such Partner's entire beneficial ownership interest in the Partnership at such time, including such Partner's Capital Account, voting rights, and right to share in profits and losses, all items of income, gain, loss, deduction and credit, distributions and all other benefits and liabilities of the Partnership, together with such Partner's obligations to comply with all of the terms of this Agreement. "LLC OPERATING AGREEMENT" means the Limited Liability Company Operating Agreement dated as of even date herewith by and between DII and TWC. "MANAGING PARTNER" means DII. "PERCENTAGE INTEREST" means, for each Partner, 5 6 such Partner's Interest in the Partnership as set forth in Schedule A hereto, as such may be adjusted from time to time in accordance with this Agreement and the Put and Call Agreement. "PUT AND CALL AGREEMENT" means the Put and Call Agreement dated as of the date hereof, by and among DII DI, TWC and WISI. "PUT" means the right of WISI to sell part or all of its Interest in the Partnership to DI and DII pursuant to the terms of the 15% Put and the 5% Put of the Put and Call Agreement. "REGULATIONS" means the income tax regulations promulgated under the Code by the United States Department of the Treasury, as such regulations may be amended from time to time. "SELECTED COMPANIES" means those publicly listed companies in which the clients of WISI or its Affiliates have an investment that is managed by WISI or its Affiliates, the Approved Wright Investment List (the "AWIL"), and those companies which are being considered by WISI or its Affiliates for investment. For purposes of Section 2.3, the number of companies which are being considered by WISI or its Affiliates for investment shall not exceed 7.5% of the number of companies in which the clients of WISI or its Affiliates have an investment that is managed by WISI or its Affiliates. "SUBSTITUTE PARTNER" means a person who has become a substitute Partner pursuant to Section 11.4 hereof. "TRANSFER" means any sale, assignment, gift, hypothecation, pledge, encumbrance, alienation, mortgage or other disposition, whether voluntary or by operation of law (other than a transfer which may arise by reason of death or incapacity), of an Interest or any portion thereof; provided that Transfer shall not include a pledge of the proceeds to be received upon the exercise of a Put or the Call under the Put and Call Agreement. "TRANSFEREE" means a purchaser, transferee, assignee (other than assignees for purposes of collater- 6 7 alizing a Partner's loan) or any other person who takes, in accordance with the terms of this Agreement, an interest in the Partnership. "WORLDSCOPE" means, as the context requires, (i) an Abstracted Database Product, containing, on the date hereof, financial information on approximately 13,000 companies, or (ii) all domestic and foreign rights to the trademark and service mark represented by such mark. "WORLDSCOPE COMPANIES" means Worldscope/Disclosure L.L.C., Worldscope/Disclosure Incorporated, L.L.C. and the Partnership, and their successors and subsidiaries. 7 8 ARTICLE 2 The Partnership --------------- 2.1 FORMATION. WISI and DII have formed the Partnership as a partnership within the meaning of the Act. The Partnership is governed by the provisions of the Act and in accordance with the further terms and provisions hereof. In the event of any conflict or inconsistency between the provisions of the Act and the provisions of this Agreement, then, to the extent permitted by the Act, the provisions of this Agreement shall prevail. Each of the Partners shall execute or cause to be executed from time to time all other instruments, certificates, notices and documents, and shall do or cause to be done all such filing, recording, publishing and other acts, in each case, as may be necessary or appropriate from time to time to comply with all applicable requirements for the formation and/or operation and, when appropriate, termination of a partnership in Ireland and all other jurisdictions where the Partnership shall desire to conduct its business. 2.2 NAME. The name of the Partnership shall be Worldscope/Disclosure International Partners and its business shall be carried on in this name with such variations and changes as are necessary to comply with the requirements of the jurisdictions in which the Partnership's operations are conducted. The Partners shall, as soon as practicable following the Closing, cause the name of the Partnership to be registered as a business name under the Registration of Business Names Act, 1963 of Ireland. 2.3 BUSINESS PURPOSE. The purpose of the Partnership is to provide services and develop products under contract with Worldscope/Disclosure LLC. Such products and services include, without limitation (i) collecting and processing data for the Worldscope database, (ii) updating and auditing the Worldscope database, and (iii) developing software and other tools for the collection, formatting and use of such data. The Partnership will continue to provide services to TWC and its Affiliates as expressly set forth in this Agreement and as set forth in that certain Limited Liability Company Operating Agreement for Worldscope/Disclosure L.L.C., a 8 9 Delaware limited liability company, of even date herewith by and between DI, DII and TWC. The Partners agree that such services shall always be sufficient to enable Worldscope to include, at a minimum, the depth and breadth of reporting for each country that is included in Worldscope on the Business Day immediately preceding execution of this Agreement, such that the number of companies reported on for each such country shall not decline below the number so included on said Business Day, and specifically in the case of the United States, such number shall not decline below the number so included on such Business Day nor exceed 3500 public companies. The Partnership will use all commercially reasonable efforts to insure that such products and services will be superior to the products of the Partnership's competitors, will enhance each Partner's reputation, will be of at least as high quality (in terms of accuracy, timeliness and data elements collected) as those presently produced by Worldscope/Disclosure International Partners on the date hereof and will be based on data collected from the first available source. Each of the parties hereto agrees that the products and services of Worldscope/Disclosure International Partners, as produced on the date hereof, are superior to the products of its competitors. In updating and expanding the Worldscope database, the Partnership shall give priority first to Selected Companies; and next to companies on the AWIL ("Updating Priority"). The Partnership shall be required to give such Updating Priority at no cost to WISI or its Affiliates so long as the aggregate incremental cost of doing so incurred by the Worldscope Companies under this Agreement and the LLC Operating Agreement does not exceed $50,000 per annum on an At Cost basis (the "Cost Limit"). If the annual incremental cost of such Updating Priority incurred by the Worldscope Companies exceeds the Cost Limit, the Partnership shall perform (i) at no cost to WISI or its Affiliates all possible Updating Priority activities up to the Cost Limit and (ii) if WISI or any of its Designated Affiliates requests, the Partnership will perform Updating Priority activities in excess of the Cost Limit PROVIDED THAT WISI or its Designated Affiliate, as the case may be, shall promptly reimburse to the Partnership on an At Cost Plus basis, any amount expended by the Company in excess of the Cost Limit. 2.4 TERM. The term of the Partnership com- 9 10 menced on November 16, 1990 (the "Formation Date") and shall continue until dissolved and wound up in accordance with Article 12 hereof or otherwise terminated in accordance with this Agreement. 2.5 PRINCIPAL PLACE OF BUSINESS. The Partnership shall maintain its principal place of business at Bay K7B, Shannon Industrial Estate, Shannon, Co. Clare, Ireland or such other location or locations as the Managing Partner may from time to time select. For so long as WISI is a Partner in the Partnership, WISI shall be permitted to list the address of the Partnership as WISI's address. 2.6 TITLE TO PARTNERSHIP PROPERTY. Legal title to all property of the Partnership shall be held and, if necessary, registered, and conveyed in the names of the Partners. Pending the completion of any transfer or registration contemplated by this Section 2.6, any Partnership property not held or registered in the name of the Partners shall be held in trust for the Partnership. 2.7 THE PARTNERS. The name and place of residence of each Partner is as follows: Name Residence ---- --------- DII 5161 River Road Bethesda, Maryland 20816 Attn: Steven Schneider, President WISI Unit K7B Shannon Industrial Estate Shannon, Co. Clare Ireland Attn: Peter M. Donovan, Managing Director with a copy to: The Winthrop Corporation 1000 Lafayette Boulevard Bridgeport, CT 06604 Attn: Peter M. Donovan, President 10 11 2.8 FISCAL YEAR. Unless the Managing Partner shall at any time otherwise determine in accordance with Section 706 of the Code, the fiscal year of the Partnership shall be DII's taxable year, which ends on December 31. 2.9 SERVICES BY PARTNERS. Except as provided herein, any and all services performed by the Partners or their Affiliates to, or on behalf of, the Partnership shall be provided At Cost. Each Partner shall have the right, at its own expense, to have a certified public or chartered accountant audit the books of the other Partner or any of such Partner's Affiliates that perform services for the Partnership at reasonable times and with reasonable notice for the sole purpose of verifying such costs, but no more than one audit per Partner in any 12-month period shall be permitted. Notwithstanding anything to the contrary herein, no Partner and none of its Affiliates shall be permitted to charge the Partnership for expenses incurred as a result of the performance of general management, general oversight or strategic planning activities for or on behalf of the Partnership. 2.10 SERVICES TO PARTNERS. Except as specifically provided elsewhere herein, services provided to any Partner or its Affiliates by the Partnership shall be At Cost Plus. All such costs shall be based on a pro rata share of the Partnership's resources used by the Partner and its Affiliates. With the consent of the Managing Partner, which shall not be unreasonably withheld, the Partnership will honor each request by a Partner or its Affiliates to provide goods or services, provided that no disadvantage to the Partnership results therefrom. Notwithstanding the foregoing, Updating Priority services shall be performed on the basis provided in Section 2.3 hereof. 2.11 REPRESENTATIONS AND WARRANTIES OF THE PARTIES. Each of the parties represents and warrants that: (a) It is duly organized, validly existing and in good standing (or comparable status) under the laws of the jurisdiction of its organization; (b) It has all requisite power and au- 11 12 thority to enter into this Agreement; the execution and delivery by such party of this Agreement and the consummation by such party of the transactions contemplated hereby have been duly authorized by all necessary corporate action on the part of such party; and this Agreement has been duly and validly executed and delivered by such party and constitutes (assuming the due and valid execution and delivery of this Agreement by the other parties), the legal, valid and binding obligations of each party, enforceable against each party in accordance with its terms; (c) There is no litigation pending or, to the best knowledge of such party, threatened against such party which has a reasonable likelihood of materially and adversely affecting the operations, properties or business of the Partnership or any of such party's obligations under this Agreement; (d) The execution, delivery and performance by such party of this Agreement will not result in a breach of any of the terms, provisions or conditions of any agreement to which such party is a party which has a reasonable likelihood of materially and adversely affecting the operations, properties or business of the Partnership or such party's obligations under this Agreement; (e) There are no claims, either administrative or judicial, at law or in equity, pending or, to the knowledge of such Partner, threatened against it which could, if continued, have a material adverse affect on the business, operations, properties, assets or condition (financial or otherwise) of such Partner, or the ability of such Partner to perform its obligations under this Agreement; and 12 13 (f) Except for contracts or agreements entered into in the ordinary course of business, there are no contracts or binding agreements currently in force or being negotiated to which any of the Worldscope Companies is or may be a party that have not been disclosed to the other Partner. 2.12 EMPLOYEE MATTERS. The Partners agree that provided that Paddy Corley (the "Employee") executes a Non-Disclosure and Business Ethics Agreement in a form that is satisfactory to the Partnership, in the event that prior to the third anniversary of the date hereof the Partnership terminates without cause the Employee's employment, the Company shall pay to the Employee a lump sum severance payment equal to one year's salary in exchange for a Release executed by the Employee in a form that is satisfactory to the Partnership. Further, (i) TWC shall be responsible for amounts accrued by the Employee under TWC's Officers' Retirement Bonus (the "Bonus") prior to January 1, 1991 and (ii) the Partnership shall be responsible for amounts accrued by the Employee under the Bonus from January 1, 1991 to the date hereof. The Employee shall be entitled to the amounts referenced in the immediately preceding sentence only if the Employ- ee retires at or after age 65 from TWC, the Partnership or any of their Affiliates. ARTICLE 3 CAPITAL CONTRIBUTIONS --------------------- 3.1 CAPITAL CONTRIBUTIONS. The Percentage Interests, the Capital Contributions and Capital Accounts as of the date hereof for each Partner are as set forth in Schedule A attached hereto. The Partners shall be entitled to make Additional Capital Contributions as provided in Section 3.2. 3.2 ADDITIONAL CAPITAL CONTRIBUTIONS. -------------------------------- (a) No Partner shall be obligated to make any additional capital contribution to the Partnership (an "Additional Capital Contribution"). Partners may agree by unanimous consent to make Additional Capital Contributions, provided that the Partner Interests set forth in Schedule A shall be adjusted accordingly. 13 14 (b) Notwithstanding the provisions of Section 3.2(a), a Partner may advance funds to the Partnership voluntarily, in the form of a loan at prevailing interest rates, at the request of the Managing Partner, provided however, that any such advance shall not be considered an Additional Capital Contribution and shall have no effect on any Partner's Interest as set forth in Schedule A. ARTICLE 4 CAPITAL ACCOUNTS ---------------- 4.1 CAPITAL ACCOUNTS. Each Partner shall have a capital account (a "Capital Account") which account shall be (1) increased by the amount of (a) the Capital Contributions of such Partner, (b) the allocations to such Partner of all items of income and gain of the Partnership pursuant to Section 5.1, (c) any positive adjustment to such Capital Account necessary to reflect the exercise of a Put by WISI or a Call by DII, and (d) any positive adjustment to such Capital Account by reason of an adjustment to reflect a revaluation of, or adjustment to the basis of, Partnership assets as provided under Regulation section 1.704-1(b)(2)(iv), and (2) decreased by (w) the amount of any cash and the book value of any property distributed to such Partner (net of liabilities secured by such property that such Partner is considered to assume or take subject to Code section 752), (x) the allocation to such Partner of all items of loss and deductions of the Partnership pursuant to Section 5.1, (y) any negative adjustment to such Capital Account necessary to reflect the exercise of a Put by WISI or the exercise of the Call by DII, and (z) any negative adjustment to such Capital Account by reason of an adjustment to reflect a revaluation of, or adjustment to the basis of, Partnership assets as provided under Regulation section 1.704-1(b)(2)(iv). The provisions of this Agreement relating to the maintenance of Capital Accounts are intended to comply with Regulation section 1.704-1(b), and shall be interpreted and applied in a manner consistent with such Regulation. 4.2 NO OTHER CAPITAL CONTRIBUTIONS. Except as provided in Section 3.2(a), no Partner shall be permitted or obligated to make any Additional Capital Contributions to the Partnership's capital without the unanimous con- 14 15 sent of all of the Partners. 4.3 NO INTEREST ON CAPITAL CONTRIBUTIONS. No Partner shall be entitled to demand or receive interest on its Capital Contributions. 4.4 NO RIGHT OF WITHDRAWAL. No Partner shall have the right to withdraw any portion of such Partner's Capital Contributions to, or to receive any distributions from, the Partnership, except as provided in Articles 6 and 12 hereof. 4.5 LOANS. The Partnership may borrow funds from third parties or enter into other similar credit, guarantee, financing or refinancing arrangements with third parties for any prudent business purpose and at reasonable rates. 4.6 RESTORATION OF NEGATIVE CAPITAL ACCOUNTS. Except as may be required by the Act or otherwise by law, or in respect of any negative balance resulting from withdrawal of capital or a distribution which is in contravention of this Agreement, no Partner with a negative balance in its Capital Account shall have any obligation to the Partnership or to another Partner to restore such negative balance. ARTICLE 5 ALLOCATION OF INCOME AND LOSS ----------------------------- 5.1 ALLOCATION OF INCOME AND LOSS. ----------------------------- (a) ALLOCATIONS TO CAPITAL ACCOUNTS. All items of income, gain, loss and deduction of the Partnership shall be allocated to the Partners in accordance with their Percentage Interests. (b) ADJUSTMENTS. Any allocation pursuant to Section 5.1(a) will, for United States federal income tax purposes, be subject to any adjustment required to comply with Regulation section 1.704-1(b) and (c), including, without limitation, any qualified income offset within the meaning of Regulation section 1.704-1(b)(2)(ii)(d) and any nonrecourse deduction or minimum gain chargeback within the meaning of Regulation section 1.704-2. Any special allocations of items pursuant to 15 16 this Section 5.1(b) shall be taken into account, to the extent permitted by the Regulations, in computing subsequent allocations of income, gain, loss or deduction pursuant to Section 5.1(a) so that the net amount of any items so allocated and all other items allocated to each Partner shall, to the extent possible, be equal to the amount that would have been allocated to each Partner pursuant to Section 5.1(a) had such special allocations under this Section 5.1(b) not occurred. (c) CAPITAL ACCOUNTS SHALL BE DETERMINED WITHOUT REGARD TO THE PARTNERS' METHOD OF ACCOUNTING USED FOR FINANCIAL REPORTING PURPOSES. Items of income, gain, loss and deduction allocated to Capital Accounts pursuant to Section 5.1(a) and net income computed for purposes of determining distributions pursuant to Section 6.1 and Section 12.4 shall be determined without regard to the Partners' method of accounting used for financial reporting purposes. For example, for purposes of allocations to Capital Accounts and for purposes of determining distributions under Sections 6.1 and 12.4 hereof, net income of the Partnership shall be calculated without regard to the amortization of acquisition goodwill or other assets created by the transactions contemplated in the Irish Purchase and Sale Agreement and the Put and Call Agreement. (d) REDETERMINATIONS. If for any taxable period of the Partnership, the Partnership is deemed to have a net increase (or decrease) in income for tax purposes as a result of a redetermination by a tax authority resulting from transactions between the Partnership and any Partner or any Affiliate of any Partner, the item or items of income or gain (or loss or deduction) that resulted in such increase (or decrease) in income shall be allocated to the Partner that was (or the Affiliate of which was) a party to the transaction and the Capital Accounts of the Partners shall reflect such allocations but shall not result in any change in the respective Percentage Interests of the Partners. 5.2 TAX ALLOCATIONS. For United States federal income tax purposes, items of income, gain, loss, deduction and credit realized by the Partnership shall, for each fiscal period, be allocated, for federal, state and local income tax purposes, among the Partners in the 16 17 same manner as the items of income, gain, loss, deduction and credit were allocated pursuant to Section 5.1(a). 5.3 FEDERAL INCOME TAX. For United States federal income tax purposes, it is the intent of this Partnership and its Partners that this Partnership will be governed by the applicable provisions of Subchapter K, of Chapter 1, of the Code. 5.4 ALLOCATION OF INCOME AND LOSS IN RESPECT OF TRANSFERRED INTERESTS. (a) If any Interest in the Partnership is transferred, in whole or in part, in accordance with the provisions of this Agreement, the Irish Purchase and Sale Agreement or the Put and Call Agreement during any calendar year, the income or loss attributable to such Interest for such calendar year shall be divided and allocated pro rata between the Partners based on each Partner's Percentage Interest and based upon an interim closing of the Partnership's books effective on the date of notice of such Transfer. (b) Notwithstanding any provisions above to the contrary, gain or loss of the Partnership realized in connection with a sale or other disposition of any of the assets of the Partnership shall be allocated solely to the Partners owning Interests in the Partnership as of the date such sale or other disposition occurs. ARTICLE 6 DISTRIBUTIONS ------------- 6.1 CASH DISTRIBUTIONS. The Managing Partner shall distribute to each Partner, in accordance with such Partner's Percentage Interest in the Partnership, net income on a calendar quarterly basis, after retaining amounts necessary for working capital, provided that the minimum distribution to each Partner shall equal at least forty percent (40%) of such Partner's share of net income. 17 18 6.2 DISTRIBUTIONS IN KIND. No distributions of property other than cash shall be made without the consent of all of the Partners. In the event of a distribution of property other than cash, for United States federal income tax purposes such property shall be deemed to be equal to its fair market value (net of any liabilities securing such distributed property that the recipient Partners are considered to assume or take subject to under Section 752 of the Code). Any gain or loss associated with such property shall be allocated to the Partners' Capital Accounts in accordance with Article 5 and adjustments to Capital Accounts in respect of distributions of such property shall reflect its fair market value. ARTICLE 7 ACCOUNTING AND REPORTS ---------------------- 7.1 BOOKS AND RECORDS. ----------------- (a) The Partnership shall maintain or cause to be maintained at the Bridgeport, Connecticut office of TWC or the Bethesda, Maryland office of the Partnership, this Agreement and all amendments thereto and full and accurate books of the Partnership showing all receipts and expenditures, assets and liabilities, profits and losses, and all other books, records and information required by the Act and by law as necessary for recording the Partnership's business and affairs. The Partnership's books and records for financial reporting purposes shall be maintained in accordance with GAAP, consistently applied, except to the extent provided hereunder for purposes of maintaining Capital Accounts in accordance with Article 5 hereof and calculating the profits or losses charged or credited thereto. The accounting policies and practices used for purposes of maintaining the books and records of the Partnership shall be consistent with the policies and practices employed by the Partnership prior to the date hereof with any departure from such policies and practices permitted only with the prior approval of the Managing Partner. Such documents, books and records shall be maintained at the designated office until two (2) years after the termination and dissolution of the Partnership. (b) Each Partner shall have the right at 18 19 reasonable times during usual business hours to inspect the facilities of the Partnership, to observe the Partnership's operations and to examine, audit and make copies of the books of account and other books and records of the Partnership and other books and records relating to the reserves, assets, liabilities and expenses of the Partnership and expenditures by the Managing Partner on behalf of the Partnership; PROVIDED, HOWEVER, that none of the foregoing activities shall be conducted in a manner that unreasonably interferes with the Partnership's operations or business. Such right may be exercised through any agent or employee of a Partner designated in writing by it or by an independent public or chartered accountant, engineer, attorney or other consultant so designated. The Partner making the request shall bear all expenses incurred in any inspection, audit or examination made at such Partner's behest. Should any inspection, audit or examination disclose any immaterial errors or immaterial improper charges, the Managing Partner shall make, or cause to be made, appropriate adjustments therefor. In the event such errors or such improper charges are material and disadvantage one Partner relative to the other, the Managing Partner shall (i) reimburse the Partnership therefor and (ii) bear all reasonable expenses of such inspection, audit or examination. 7.2 REPORTS TO PARTNERS. ------------------- (a) As soon as available to the Partnership and in any event within thirty (30) days after the end of the first eleven (11) months of each Fiscal Year and within forty-five (45) days after the end of the last month of each Fiscal Year, the Managing Partner shall cause to be prepared and sent to each Partner for the prior month and for the period from the beginning of such Fiscal Year to the end of such fiscal month, a financial statement package substantially similar in content and detail to the latest monthly package prepared for the Partnership prior to the date of execution of this Agreement, all of which shall (i) be prepared in accordance with [GAAP] (except that certain footnotes may be omitted); and (ii) set forth in each case in comparative form versus both the figures for the previous Fiscal Year, and the forecast for the current Fiscal Year. 19 20 (b) As soon as practicable and in any event within ninety (90) days after the end of each Fiscal Year, the Managing Partner shall provide to each Partner audited financial statements of the Partnership for such Fiscal Year setting forth in each case in comparative form the figures for the previous Fiscal Year, certified by such certified public accountants as may be selected by the Managing Partner. (c) The Partnership or the Managing Partner shall provide to each Partner on a timely basis such information as a Partner may reasonably request regarding the details of transactions recorded in the financial statements described in Subsections 7.2(a) and 7.2(b) hereof. (d) As requested, the Partnership shall provide to each Partner such information as may be necessary for them to comply with applicable financial reporting requirements of any competent governmental authorities or agencies or stock exchange on which the shares of any such company are listed including, without limitation, the New York Stock Exchange and the U.S. Securities and Exchange Commission and such information regarding the financial position, business, properties or affairs of the Partnership as a Partner may reasonably request. 7.3 TAX MATTERS AND ANNUAL TAX RETURNS. ---------------------------------- (a) For Irish taxation purposes, DII shall timely prepare and provide to the Revenue Commissioners of Ireland all taxation returns, statements and other information required in respect of the Partnership pursuant to Section 70 of the Income Tax Act, 1967 (as amended) of Ireland. DII or WISI, as the case may be, shall also promptly send to each Partner a copy of all notices or communications received by the Partnership from any tax authority including, but not limited to, the Revenue Commissioners of Ireland or other Irish taxation authorities (or give written notice of any verbal communications) within ten (10) days after receiving such notice or communication. All decisions regarding any matter with the Revenue Commissioners of Ireland or other Irish taxation authorities shall be made in the sole discretion of DII. 20 21 (b) For United States federal income tax purposes, DII is hereby designated the "Tax Matters Partner" pursuant to Section 6231 of the Code with respect to all taxable years of the Partnership and is authorized to do whatever is necessary to qualify as such. Tax policies and elections will be made by the Tax Matters Partner in its sole discretion. (c) The Tax Matters Partner shall prepare or cause to be prepared all tax returns required of the Partnership. As soon as practicable after the end of each taxable year, the Tax Matters Partner shall furnish to each Partner such information in the possession of the Tax Matters Partner requested by such Partner as necessary to timely fulfill such Partner's United States federal, state, local and foreign tax obligations, including Form K-1, or any similar form as may be required by the Code or the United States Internal Revenue Service (the "IRS") or the Irish Commissioners of Revenue. The Partners shall file their individual or corporate returns, as such pertain to the business of the Partnership, in a manner consistent with the Partnership's tax and information returns. (d) The Tax Matters Partner shall use its best efforts to do all acts and take whatever steps are required to maximize, in the aggregate, the federal, state, local and foreign income tax advantages available to the Partnership and shall defend all tax audits and litigation with respect thereto. (e) DII, DI and their respective successors and permitted assigns shall indemnify and hold harmless WISI and its successors and permitted assigns and the Partnership for any tax claims, liabilities and losses incurred by the Partnership or WISI or its successors and permitted assigns as a result of the gross negligence or willful misconduct of DII, DI or their respective successors and permitted assigns or any agent or employee of DII, DI or their successors and permitted assigns; WISI and its successors and permitted assigns shall indemnify and hold harmless DII, DI and their respective successors and permitted assigns and the Partnership for any tax claims, liabilities and losses incurred by the Partnership or DII, DI or their respective successors and permitted assigns as a result of the gross 21 22 negligence or willful misconduct of WISI or its successors and permitted assigns or any agent or employee of WISI or its successors and permitted assigns. 7.4 ACTIONS IN EVENT OF AUDIT. If an audit of any of the Partnership's tax returns shall occur, the Tax Matters Partner shall, at the expense of the Partnership, control the audit. The Tax Matters Partner may, if it determines that the retention of accountants or other professionals would be in the best interests of the Partnership, retain such accountants or other professionals, to assist in any such audits. The Partnership shall bear all reasonable third party expenses, including legal and accounting fees, claims, liabilities and losses incurred in connection with any administrative or judicial proceeding with respect to any audit of the Partnership's tax returns. The payment of all such expenses to which this indemnification applies shall be made before any distributions are made to the Partners under Article 6 hereof. Except as provided in Section 7.3(e) hereof, neither the Tax Matters Partner, nor any other person shall have any obligation to provide funds for such purpose. The Tax Matters Partner shall have sole authority to contest any assertion made by the IRS or enter into any agreement with the IRS or any other taxing authority or agency. 7.5 TAX ELECTIONS. For United States federal income tax purposes, any elections under section 754 of the Code or any other elections made under the Code by the Partnership shall be made (or caused to be made) by the Tax Matters Partner in its sole discretion, except as provided herein for purposes of maintaining Capital Accounts in accordance with Article 5 hereof and calculating profits or losses charged or credited thereto. 7.6 ANNUAL OPERATING BUDGET AND FIVE YEAR PLAN. No later than forty-five (45) days before the end of each Fiscal Year, the Managing Partner shall prepare in good faith and submit to the Partnership Committee (as defined in Article 8), for its information and comment (but not for its approval), an annual operating budget ("Annual Operating Budget") and five year plan, each of which shall, in the best judgment of the Managing Partner, reflect reasonable expectations for the Partnership during the period covered. The Managing Partner shall in 22 23 its sole discretion approve the Annual Operating Budget and any amendments thereto. ARTICLE 8 ACTIONS BY PARTNERS ------------------- 8.1 PARTNERSHIP COMMITTEE. The Partnership shall have a Partnership Committee made up of all Partners and their representatives, if any, as designated on Schedule B hereto. Except as otherwise provided in this Agreement, each Partner shall be entitled to vote in accordance with its then current Percentage Interest in the Partnership. 8.2 MEETINGS. Meetings of the Partnership Committee shall be held no less frequently than quarterly. Each year, one such meeting shall be held at the offices of DII in Maryland, one at the offices of TWC in Connecticut and the remainder in New York City or such other mutually agreed upon place. The Partners may take action by the vote of Partners at a meeting in person or by proxy, or without a meeting by written consent. In no instance where action is authorized by written consent need a meeting of the Partnership Committee be called or noticed but the Managing Partner shall notify all other Partners within five days of taking an action thus consented to. ARTICLE 9 DUTIES AND RESPONSIBILITIES --------------------------- OF THE MANAGING PARTNER ----------------------- 9.1 Except as otherwise expressly provided in this Agreement, the Managing Partner, in its capacity as a Partner of the Partnership under the Act, shall have sole and complete charge and management of all the affairs and business of the Partnership, in all respects and in all matters. At all times the Managing Partner shall be a fiduciary of the Partnership and shall act in good faith and in a manner that the Managing Partner reasonably believes to be in the best interests of the Partnership. The Managing Partner shall be an agent of the Partnership, and the actions of the Managing Partner taken in such capacity and in accordance with this Agreement shall bind the Partnership. The Managing Partner shall at all times be a Partner of the Partnership. 23 24 Except as otherwise provided in this Agreement, the Partners other than the Managing Partner shall not participate in the control of the Partnership, and shall have no right, power or authority to act for or on behalf of, or otherwise bind the Partnership. Except as expressly provided in Section 8.1 hereof or as otherwise provided in this Agreement or required by any non-waivable provisions of applicable law, Partners other than the Managing Partner shall have no right to vote on or consent to any other matter, act, decision or document involving the Partnership or its business. 9.2 Except as otherwise expressly provided herein, the Managing Partner shall have full, exclusive and complete discretion to manage and control the business and affairs of the Partnership, to make all decisions affecting the business and affairs of the Partnership and to take all such actions as it reasonably deems necessary or appropriate to accomplish the purposes and direct the affairs of the Partnership. The Managing Partner shall have the right to manage and make decisions in a manner that the Managing Partner reasonably believes will foster the long term growth and prospects of the Partnership's business, and the Managing Partner shall have no duties or liabilities to another Partner or other person for actions and decisions that the Managing Partner reasonably believes are necessary, appropriate or consistent with such long term growth and prospects. The Managing Partner shall have the sole power and authority to bind the Partnership, except and to the extent that such power is expressly delegated in writing to any other person by the Managing Partner, provided that the Managing Partner shall indemnify the Partnership from and against any and all liabilities resulting from the actions or failure to act of such other person. 9.3 Except as otherwise expressly provided herein, the Managing Partner shall have the exclusive right, power and authority, in the management of the business and affairs of the Partnership, to do or cause to be done any and all acts at the expense of the Partnership, deemed by the Managing Partner to be necessary or appropriate to effectuate the business of the Partnership. Except as provided herein and, without limiting the generality of the foregoing, the Managing Partner shall have full and complete power and authority, without 24 25 the approval of any other Partner: (a) to conduct any business that is not inconsistent with the Partnership's purpose as set forth in Section 2.3 hereof, and to exercise any rights and powers, permitted of a partnership organized under the laws of Ireland, in any state, territory, district or foreign country as the Managing Partner deems necessary or advisable; (b) to acquire by purchase, lease or otherwise, and/or to otherwise own, hold, operate, finance, maintain, improve, lease, sell, convey, mortgage, transfer or dispose of any property or other assets (except for the transfer or disposal of Abstracted Database Products or other intellectual property rights) that the Managing Partner deems necessary or advisable; (c) to negotiate, enter into, perform, modify, extend, terminate, amend, waive, renegotiate and/or carry out any contract and agreements of any kind and nature, including without limitation, contracts and agreements with any Partner or any agent of the Partnership, as the Managing Partner deems necessary or advisable; (d) to lend money (provided that the outstanding aggregate principal amount of money lent by the Worldscope Companies under this Agreement and the LLC Operating Agreement does not exceed $100,000) and to invest and reinvest its funds; (e) to sue and be sued, complain and defend, and participate in administrative, judicial and other proceedings, in the name of, and on behalf of, the Partnership; provided, however, that the other Partners shall provide such assistance as the Managing Partner considers necessary in order to enable it to perform its obligations hereunder; (f) to pay, collect, compromise, arbitrate or otherwise adjust or settle any and all claims or demands of or against the Partnership, in such amounts and upon such terms and conditions as the Managing Partner shall reasonably determine; 25 26 (g) to, from time to time, employ, engage, hire or otherwise secure the services of such persons, including any Partner, as the Managing Partner may deem necessary or advisable for the proper execution of its duties as Managing Partner hereunder, provided such services are within the scope of the foregoing authority granted to the Managing Partner hereunder, with such employment to be for such reasonable compensation and upon such reasonable terms and conditions as the Managing Partner shall determine consistent with applicable law, regulations or contracts; (h) to, from time to time, appoint such Executive Officers as the Managing Partner deems necessary or advisable, define and modify, from time to time, such Executive Officers' duties, and fix and adjust, as appropriate, such Executive Officers' compensation; (i) to borrow money and issue evidences of indebtedness necessary, convenient or incidental to the business of the Partnership, and secure the same by mortgage, pledge or other lien on any tangible assets of the Partnership; (j) to prepare, execute, file record, publish and deliver any and all instruments, documents or statements necessary or convenient to effectuate any and all actions that the Managing Partner is authorized to take on behalf of the Partnership; (k) to deal with, or otherwise engage in business with, or provide services to and receive compensation therefor from, any person who has provided services to, lent money to, sold property to, or purchased property from the Partnership or a Partner, or any person who may do so in the future; and (l) to establish all accounting and tax policies that the Partnership will use to maintain its books and records. 9.4 Except as expressly provided in Section 8.1 hereof or as otherwise provided in this Agreement or required by any provision of the Act which cannot be excluded by contrary agreements or other applicable law, no Partner other than the Managing Partner shall (a) have 26 27 the right to vote on or consent to any other matter, act, decision or document involving the Partnership or its business, or (b) take part in the day-to-day management, or the operation or control, of the business and affairs of the Partnership. Except to the extent expressly delegated by the Managing Partner, no other Partner or person other than the Managing Partner shall be an agent for the Partnership or have any right, power or authority to transact any business in the name of the Partnership or to act for or on behalf of or to bind the Partnership. 9.5 THIRD PARTY SERVICES. The Managing Partner may engage third parties to provide products and services necessary for the operation of the Partnership. Contracts with such third parties shall be on the most favorable terms possible. The Managing Partner shall include each Partner or its designated Affiliate, at such Partner's option, as a user of third party services provided to the Partnership at the best possible price, provided that each Partner or its designated Affiliate using such services agrees to reimburse the Partnership for any incremental expense incurred by the Partnership as a result of the access to and use of such third party services by such Partner or its designated Affiliate, as the case may be. Third party services shall include, but not be limited to, news wires, news services, analytical services, securities pricing services and services offered by distributors of the Partnership's products. None of the parties hereto shall be considered a "third party" for purposes of this Section 9.5. 9.6 PERSONNEL. The Managing Partner may, in its sole discretion, employ for and on behalf of the Partnership such additional personnel as it deems appropriate, provided that any such additional personnel devote 100% of their working efforts to the pursuit of the Partnership's business. 9.7 DISTRIBUTION. The Managing Partner shall be the exclusive agent for sales and marketing of the Partnership's products and shall maintain a sales and marketing effort that is at least as great as the effort customary to the industry in which the Partnership is engaged. The Managing Partner may appoint other third party distributors provided that the commission or royalty rates to the Partnership from such distributors are 27 28 approximately as favorable to the Partnership as such rates then existing between such distributors and the Managing Partner or any of its Affiliates for their products. Any advertisement or other promotion of the Partnership's products that identifies any Partner or any of its Affiliates shall include references to Wright Investors' Service (or such other Affiliate as WISI shall name) as a partner with equal billing as the other Partners. 9.8 BANKRUPTCY; INSOLVENCY. The Managing Partner may commence a proceeding on behalf of the Partnership under applicable bankruptcy or insolvency laws, provided that all of the Partners consent to the commencement of such action. Any such proceeding commenced by any other Partner shall be deemed unauthorized and in bad faith and all parties to this Agreement shall use their best efforts to cause such proceeding to be dismissed. 9.9 RESTRICTIONS. Notwithstanding any contrary provision of this Agreement, without the written consent of all Partners, the Managing Partner shall not have the authority to: (a) Do any act in contravention of this Agreement or contrary to the best interests of the Partnership; (b) Require any Partner to make Additional Capital Contributions to the Partnership; (c) Transfer, assign, sell, convey, mortgage, merge or otherwise dispose of any Abstracted Database Products or other material intellectual property or the rights thereto; (d) Receive any compensation for performing its duties as the Managing Partner; (e) Revalue, or cause to be revalued, any assets of the Partnership; or (f) Lend the Partnership's money except as provided in Section 9.3(d), invest or reinvest its funds except in the Wright Treasury Money Market Fund or 28 29 similar prudent short term investment vehicles, or to take or hold real or personal property for the payment of funds loaned or invested. ARTICLE 10 DUTIES, OBLIGATIONS AND RIGHTS OF WISI AND TWC ---------------------------------------------- 10.1 EDITORIAL RESPONSIBILITIES. WISI's Affiliate, TWC, will be responsible for analytical and financial expertise with regard to the Partnership's products and services and for the definitions and accounting treatment of data elements included in the Partnership's products and services; provided, however, that the Managing Partner may require additional data or accounting treatments be included in its sole discretion. Subject to the approval of the Managing Partner, TWC shall also have additional oversight of the Partnership's products. Notwithstanding anything to the contrary herein, if WISI or TWC, as the case may be, in its sole discretion, makes a good faith determination that any of the Partnership's products or services have become materially inferior to the products and services of the Partnership (prior to the date of this Agreement) or the Partnership's competitors, then WISI or TWC, as the case may be, shall provide written notice of that determination to the Managing Partner detailing the basis for that determination. In the event that the Partnership's products or services continue to be, in WISI's or TWC's, as the case may be, sole judgment, materially inferior after six (6) months' written notice is provided to the Managing Partner, then TWC may cease performing the obligations under this Section 10.1 and, if requested by WISI, the Managing Partner will cease identifying WISI as a Partner. 10.2 PERMITTED USE OF THE PARTNERSHIP'S RESOURCES AND PRODUCTS BY TWC AND ITS DESIGNATED AFFILIATES. So long as WISI is a Partner, and for ten years thereafter TWC and its Designated Affiliates shall: (i) have for their internal use, investment management and for publications, royalty free use of the Worldscope Companies' resources including but not limited to, collected data, databases, commercial products, software and library. Such use shall 29 30 include investment management, investment advisory and any other investment related products and services including, but not limited to, all of TWC's and its Designated Affiliates' current products and services and any such similar products or services that TWC or its Designated Affiliates may develop in the future; and (ii) continue to receive, at no cost, from the Worldscope Companies the same level of service they have received in the past, including, but not limited to, immediate notification of new information important to investment decision making (e.g. news from news suppliers, company news releases, news wire stories, company financial results) on Selected Companies and use of and immediate access to the Worldscope Companies' collected data, resources and library. Access to such information will be provided on at least as timely a basis as in the past. All data will be delivered to TWC or its designated Affiliate at the time it becomes available to any of the Worldscope Companies from the collecting source, whether internal or external. 30 31 (iii) receive the data continuously and without interruption including, without limitation, during the arbitration of any dispute or controversy between the Partners and/or their respective Affiliates. The Managing Partner agrees that any threatened or actual interruption of the data prior to or during the dispute resolution process would result in immediate and irreparable harm to TWC and its Designated Affiliates such that it would be impossible to measure the damages in money. Accordingly, if the Managing Partner or any of its Affiliates interrupts the data, or threatens to do so, prior to the decision of the arbitrator, the Managing Partner acknowledges WISI's and TWC's right to bring an action on behalf of themselves and TWC's Designated Affiliates to prevent such interruption and the Managing Partner hereby waives for itself and all of its Affiliates, any claim or defense that WISI or TWC and its Designated Affiliates has an adequate remedy at law and the Managing Partner shall not urge that such a remedy at law exists. The Managing Partner agrees to submit to the jurisdiction of any federal or state court in which WISI or TWC or its Designated Affiliates brings an action based solely on this Section 10.2. 10.3 ROYALTY FREE USE. ---------------- 31 32 (a) TWC's and its Designated Affiliates' use of the Partnership's products and information resources pursuant to Section 10.2 for the production of existing products and services of TWC and its Designated Affiliates, and products and services similar to such existing products and services, and their expansion and enhancement (except for Abstracted Database Products) shall be specifically permitted and shall be royalty free. For the purposes of this Agreement, products and services which are primarily designed for the evaluation of investments and which usually include analyzed data or advice or a ranking or a rating or a system or score for evaluating investments plus raw financial or pricing data and are primarily the output of the intellectual labor process (as distinguished from the collection and reproduction of raw data) are specifically permitted to TWC and its Designated Affiliates and shall be royalty free. (b) ROYALTY RATES ON CERTAIN PRODUCTS. If the product is not an Abstracted Database Product and also not exempt from royalties under 10.3(a) above, TWC and its Designated Affiliates may continue to market such product or service and shall pay royalties as follows: (i) No royalties shall be paid if the revenues to TWC and its Designated Affiliates are less than $50,000 per year per product or less than $150,000 per year for all products or services requiring royalty payments. (ii) TWC and its Designated Affiliates or WISI, as the case may be, shall compensate the Partnership at the lowest royalty rate available to any customer or distributor. If no such customer or distributor exists for a similar product, then royalties shall be based on reasonable and customary industry rates. (c) DISPUTED PRODUCTS. If a dispute arises between the Partners over whether a new product of TWC or its Designated Affiliates is exempt from royal- ties, then, if necessary, the matter shall be submitted to the dispute resolution procedure in Article 15 and TWC and its Designated Affiliates shall be permitted to 32 33 market and produce such product or service until final resolution of the dispute. If the new product is found as a consequence of the dispute resolution process to be subject to royalties, the minimums and rates set forth in 10.3(b) will apply. 10.4 DISTRIBUTING RIGHTS. TWC and its Designated Affiliates shall be distributors of all the Partnership's products including, but not limited to, Abstracted Database Products, if any, on the most favorable terms available to any other distributor including, but not limited to, DII or any of its Affiliates. 10.5 CONTINUATION OF SERVICES. WISI, TWC and its Designated Affiliates shall continue to provide services, on an At Cost basis, to the Partnership to the same extent that such entities provided such services to the Partnership on the Business Day immediately prior to the date of this Agreement, except for data processing services, which shall be provided to the Company on the same terms that TWC and its Affiliates provided such services to the Partnership on the Business Day immediately prior to the date of this Agreement. In the event that the Managing Partner chooses an alternative provider, WISI or TWC will have the opportunity to continue to provide such services at rates less than or equal to those proposed by such alternative provider. 10.6 LEASE OF FLOOR SPACE. The Partnership shall comply with the provisions of that certain lease (the "Lease") dated January 23, 1989 by and between Shannon Free Airport Development Company Limited and WISI, which Lease was assigned, as of the date hereof, by WISI to WISI and DII, for the space described in the first schedule to the Lease. Notwithstanding the foregoing, the Partnership shall not be committed to lease any additional space beyond the expiration date of the Lease which is December 31, 2012. 33 34 ARTICLE 11 TRANSFER OF PARTNERSHIP INTERESTS --------------------------------- 11.1 PROHIBITED TRANSFERS. No Partner may Transfer or encumber its Interest or any part thereof in any way whatsoever, and any such Transfer or encumbrance in violation of this Article 11 shall be null and void, except as otherwise permitted herein or provided by law, and the Transferring or withdrawing Partners shall be liable to the Partnership and the other Partners for all damages that they may sustain as a result of such attempted Transfer. 34 35 11.2 CHANGE IN CONTROL. ----------------- (a) Upon the occurrence of a Change of Control of a Partner (the "Changed Party"), each of the other Partners shall have the option to purchase such Partner's pro rata portion of the Interest then owned by the Changed Party (based upon the Percentage Interests of the other Partners), by delivery of a written notice to the Changed Party (the "Participant Purchase Notice"), with a copy to the Partnership stating that such election is unconditional and irrevocable and that such other Partner unconditionally elects to purchase its pro rata portion of the Interest owned by the Changed Party at a price in cash equal to the greater of (i) if the Changed Party is WISI and the 15% Put and the 5% Put have not been exercised, the sum of the 15% Put Exercise Price and the 5% Put Exercise Price (as defined in the Put and Call Agreement) or (ii) if the Changed Party is WISI and one Put or the Call has been exercised, the exercise price of the unexercised Put as set forth in the Put and Call Agreement, or (iii) the Fair Market Value of the Interest. Any Interest owned by the Changed Party that is not purchased by any of the Partners in exercise of their pro rata rights hereunder shall be subject to purchase by the remaining other Partners on the terms and conditions set forth in this Section 11.2(a). For purposes of this Section 11.2, DII shall be deemed a Changed Party upon the occurrence of a Change in Control of DI. For purposes of this Section 11.2(a), "Fair Market Value" of the Interest shall be the average of the valuations determined by three nationally recognized independent appraisers, one to be selected by DII, one to be selected by WISI and the third to be selected and mutually agreed to by the first two appraisers. (b) Within 5 days after the earlier of (i) a Change in Control of a Partner (which, for purposes of this Section 11.2(b) includes DI) or (ii) execution of a definitive agreement upon consummation of which a Change of Control of such Partner will occur, such Partner shall deliver a notice to each other Partner stating: (i) that such a Change of Control has occurred or will occur and that such other Partner has the rights set forth in this 35 36 Section 11.2; and (ii) the circumstances and relevant facts regarding such Change of Control, including information with respect to pro forma historical income, cash flow and capitalization of such Changed Party (or DI, as the case may be) after giving effect to such Change of Control, PROVIDED, that if such information is unavailable at the time of delivery of such notice, such Partner shall provide such information to each other Partner and the Partnership as promptly as practicable after such information becomes available. (c) The other Partners may elect to exercise their rights under this Section 11.2 by delivery of a Participant Purchase Notice to the Changed Party at any time following a Change of Control of such Changed Party, PROVIDED, that such right to deliver a Participant Purchase Notice shall expire after the latest of (i) 60 days after the delivery of notice of such Change of Control pursuant to Section 11.2(b), or (ii) 15 Business Days after the determination of the 15% Put Exercise Price (as defined in the Put and Call Agreement) or (iii) 15 Business days after the determination of the 5% Put Exercise Price (as defined in the Put and Call Agreement). During such period, the Changed Party shall provide to the other Partners any additional information relating to such Change of Control as any other Partner may reasonably request. (d) The closing of the purchase pursuant to the Participant Purchase Notice of the Interest held by the Changed Party shall be no later than 35 Business Days following the delivery of the Participant Purchase Notice subject to (i) extension with the written consent of the Changed Party and the other Partners, which consent shall not be unreasonably withheld, and (ii) reasonable extension as may be necessary to comply with any laws, rule or regulation of any governmental or regulatory authority to secure any necessary consent, waiver, authorization, or approval of any governmental or regulatory authority. (e) The rights of the other Partners to 36 37 purchase the Interest pursuant to this Section 11.2 shall be contingent upon the purchase of all (but not less than all) of the Interest owned by the Changed Party. 11.3 PERMITTED TRANSFERS BY PARTNERS. Except as permitted in the Put and Call Agreement, no Partner may Transfer all or a portion of its Interest unless: (a) each of the other Partners shall have consented in writing to such Transfer, which consent shall be in the sole and absolute discretion of such Partner, except that such written consent shall not be required with respect to a transfer by a Partner of all or part of its Interest to an Affiliate; (b) the Partner desiring to consummate such Transfer (the "Assigning Partner"), and the prospective Transferee each execute, acknowledge and deliver to all the other Partners such instruments of transfer and assignment with respect to such Transfer and such other instruments as are reasonably satisfactory in form and substance to all the Partners; (c) the Transfer will not violate any securities laws or any other applicable federal or state laws or the laws of any other relevant jurisdiction or the order of any court having jurisdiction over the Partnership or any of its assets; (d) the Transfer will not result in or create a "prohibited transaction" as defined in Section 4975(c) of the Code or result in or cause the Partnership or any Partner to be liable for excise tax under Chapter 42 of the Code or result in or cause the Partnership or the Partnership's assets to become the assets of an employee benefit plan (as defined in Section 3(3) of ERISA); (e) the Transfer will not cause any violation of or an event of default under, or result in acceleration of any indebtedness under, any note, mortgage, loan, or similar instrument or document to which the Partnership is a party; (f) the Transfer will not cause a material adverse tax consequence to the Partnership or any of 37 38 the Partners including but not limited to any material adverse tax consequence resulting, directly or indirectly, from the termination of the Partnership under section 708 of the Code; and (g) the Transfer will not cause the Partnership to be classified as an entity other than a partnership for purposes of the Code. 11.4 SUBSTITUTE PARTNER. A Transferee of the whole or any part of a Partnership Interest who satisfies the conditions set forth in Section 11.3 hereof shall have the right to become a Partner in place of the Assigning Partner only if all of the following conditions are satisfied: (a) the fully executed and acknowledged written instrument of assignment that has been filed with the Partnership sets forth a statement of the intention of the Assigning Partner that the Transferee become a Substitute Partner in its place; (b) the Transferee executes, adopts and acknowledges this Agreement and agrees to assume all the obligations of the Assigning Partner; and (c) any costs of the Transfer incurred by the Partnership shall have been reimbursed to the Partnership by the Assigning Partner or the Transferee. 11.5 INVOLUNTARY WITHDRAWAL BY A PARTNER. Upon the occurrence of the event referenced in Section 12.1(a), the Partner with respect to whom such event occurred shall forthwith cease to be a Partner and shall have no rights or powers as a Partner, except that the provisions of Article 10 hereof and the rights and responsibilities then existing under the Put and Call Agreement shall in no way be affected. In the event that a Partner shall cease to be a Partner under the Act, the continuation of the Partnership shall be governed by Section 12.2. 38 39 11.6 VOLUNTARY WITHDRAWAL BY A PARTNER. Except as provided in the Put and Call Agreement, no Partner may resign or withdraw from the Partnership without the prior written consent of each other Partner, which consent may be withheld by any such other Partner in its sole and absolute discretion. ARTICLE 12 DISSOLUTION AND WINDING UP -------------------------- 12.1 DISSOLUTION. The Partnership shall be dissolved upon the first to occur (each a "Dissolution Event"): (a) The withdrawal, resignation, dissolution or liquidation of a Partner; (b) One hundred eighty (180) days after the filing of a bankruptcy petition by or against a Partner, provided that such petition has not been dismissed in the interim or is not an unauthorized filing under Section 9.8 hereof. (c) The sale, transfer or other disposition of all or substantially all the assets of the Partnership, including condemnation by eminent domain; (d) An agreement in writing by all of the Partners to dissolve the Partnership; (e) An entry of a decree of judicial dissolution of the Partnership; or (f) The occurrence of any other event specified under the Act as one requiring such dissolution. 12.2 ELECTION TO CONTINUE THE BUSINESS. The Partnership shall not be dissolved pursuant to a Dissolution Event specified in Subsections 12.1(a) or (e) (except as otherwise provided in the Act), if, within 45 days of such Dissolution Event, all of the remaining Partners unanimously agree in writing to continue the business of the Partnership, and in the event there is only one remaining Partner, such Partner shall have the 39 40 right to admit a new Partner in accordance with the terms of this Agreement. 12.3 CLOSING OF AFFAIRS. In the event of the dissolution of the Partnership for any reason, an unrestricted, royalty-free copy of each product of the Partnership shall be given to each Partner, and in the absence of an election to continue the business of the Partnership, an independent chartered accountant (the "Accountant") selected by unanimous consent of the remaining Partners shall commence to wind-up the Partnership, to wind-up its investments and to terminate the Partnership. The Accountant shall act as a fiduciary to the Partnership and shall have full right and unlimited discretion to manage the business of the Partnership during the period of closing the affairs of the Partnership and to determine the time, manner and terms of any sale or sales of Partnership property pursuant to such action. Upon complete realization and settlement of the Partnership property and compliance with the distribution provisions set forth in Section 12.4 hereof, the Partnership shall cease to be such and the Accountant shall execute, acknowledge and cause to be filed all returns and certificates necessary to terminate the Partnership and to give notice thereof. 12.4 DISTRIBUTIONS UPON DISSOLUTION. (a) The Accountant shall, as soon as practicable, wind-up the Partnership and sell or distribute the assets of the Partnership. The assets of the Partnership shall be applied to the extent permitted by the Act in the following order of priority: (i) FIRST, to pay the costs and expenses of the winding up of the Partnership; (ii) SECOND, to pay the matured debts and liabilities of the Partnership to persons who are not Partners; (iii) THIRD, to establish reserves adequate to meet any and all contingent or unforeseen liabilities or obligations of the Partnership, provided that at the expiration of such period of time as the Accountant may deem 40 41 advisable, the balance of such reserves remaining after the payment of such contingencies or liabilities shall be distributed as hereinafter provided; and (iv) FOURTH, to all Partners with positive Capital Account balances in proportion to such Capital Account balances, until such balances are reduced to zero; and (v) FINALLY, to all Partners in proportion to each Partner's Percentage Interest. (b) If upon dissolution and winding-up of the Partnership, the Accountant determines that (i) an immediate sale of part or all of the assets of the Partnership would cause undue loss to the Partners, and (ii) the assets of the Partnership would be readily susceptible to division for distribution in kind to the Partners, then to that extent the Accountant may distribute such assets to the Partners in kind. For such purposes, the assets of the Partnership shall be valued at fair market value at the time of distribution to be determined by an independent appraiser selected in good faith by the Accountant, provided that such appraiser must have at least ten (10) years of experience in appraising assets of the type owned by the Partnership and must be a member of a recognized national society of appraisers. 12.5 ORDERLY WINDING-UP. A reasonable time shall be allowed for the orderly winding up and realization of the assets of the Partnership and the discharge of liabilities so as to minimize the losses normally attendant upon a winding-up. 12.6 DEFICIT UPON WINDING-UP. Except to the extent otherwise provided in this Agreement or required by the Act or by law with respect to third-party creditors of the Partnership, upon dissolution, none of the Partners shall be liable to the Partnership for any deficit in its Capital Account, nor shall such deficits be deemed assets of the Partnership. 41 42 ARTICLE 13 INDEMNIFICATION --------------- 13.1 INDEMNITY. The Partnership shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he is or was a Partner, an employee or an agent of the Partnership, against expenses, including attorneys' fees, judgment, fines and amounts paid in settlement actually and reasonably incurred by him in connection with the action, suit or proceeding if he acted in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of this Partnership, and, with respect to a criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful; provided that such indemnity shall not be mandatory for any person seeking indemnity in connection with a proceeding voluntarily initiated by such person unless such proceeding was authorized by the Managing Partner. No Partner shall be indemnified with respect to actions between Partners or their Affiliates. 13.2 ADVANCE PAYMENT OF EXPENSES. The expenses of Partners incurred in defending a civil or criminal action, suit or proceeding may be paid by the Partnership as they are incurred and in advance of the final disposition of the action, suit or proceeding, upon receipt of an undertaking by or on behalf of the Partner to repay the amount if it is ultimately determined by a court of competent jurisdiction that he is not entitled to be indemnified by the Partnership. The provisions of this subsection do not affect any rights to advancement of expenses to which personnel other than Partners may be entitled under any contract or otherwise by law. 13.3 OTHER ARRANGEMENTS NOT EXCLUDED. The indemnification and advancement of expenses authorized in or ordered by a court pursuant to this Article 13: (a) Does not exclude any other rights to which a person seeking indemnification or advancement of expenses may be entitled under any agreement, vote of Partners or otherwise, for either an action in his offi- 42 43 cial capacity or an action in another capacity, except that indemnification, unless ordered by a court pursuant to Section 13.3 above, shall not be made to or on behalf of any Partner if a final adjudication established that his acts or omissions involved intentional misconduct, fraud or a knowing violation of the law and was material to the cause of action. (b) Continues for a person who has ceased to be a Partner, employee or agent and inures to the benefit of the heirs, executors and administrators of such a person. ARTICLE 14 AMENDMENT TO AGREEMENT ---------------------- Amendments to this Agreement shall be approved in writing by all of the Partners. An amendment shall become effective as of the date specified in the Partners' approval or if none is specified as of the date of such approval or as otherwise provided by Delaware law. ARTICLE 15 DISPUTE RESOLUTION ------------------ 15.1 SETTLEMENT MEETINGS. In the event the Partners cannot agree on any issue relating to the interpretation of this Agreement, the following procedure shall be followed: (a) FIRST SPECIAL MEETING. A special Partnership Committee meeting shall be called by either Partner sending the other written notice requesting a meeting at a mutually convenient time and place within five (5) days of actual delivery of such notice to discuss the issue. If the issue remains unresolved then; (b) SECOND SPECIAL MEETING. A second special meeting shall be scheduled between the Managing Director of WISI and the President of DII (by either Partner sending the other written notice requesting same) at least five days, but not later than 10 days later. At that second meeting both will make a good faith effort to understand the position of the other and resolve the issue. If the issue remains unresolved then; 43 44 (c) NON-BINDING MEDIATION. The matter shall be submitted forthwith to a qualified mediator. If the Partners cannot reach a final agreement with the mediator, then; (d) TEN ADDITIONAL DAYS. Ten days following the last mediation session, the issue may be submitted to Arbitration by either Partner in accordance with Section 16.9, provided that: (e) FAILURE TO ATTEND MEETING. Any Partner who fails to attend a meeting or mediation session scheduled pursuant to the preceding paragraphs shall not be permitted to institute arbitration. ARTICLE 16 GENERAL PROVISIONS ------------------ 16.1 OTHER ACTIVITIES. Activities related to the production and marketing of Abstracted Database Products that compete directly with Worldscope, such as Worldvest, Global Vantage, Extel's international company database or World Equities, are prohibited to the Partners and their respective Affiliates. A Partner may engage or invest in, and devote its time to, any other business venture or activities of any nature and description (independently or with others) and shall have no duties or liabilities to any other Partner or other person for engaging in such activities or pursuing such opportunities. 16.2 [The Partners agree that it is in the best interests of the Partnership for each Partner to remain in good standing or comparable status with legal, tax and regulatory authorities of the Republic of Ireland and to continue to enjoy such business powers, privileges and licenses as are afforded to each on the Business Day immediately preceding the date of execution of this Agreement. Accordingly, each Partner agrees to execute and deliver, upon request of the other Partner, such documents reasonably deemed by the requesting Partner to be necessary, appropriate or desirable to maintain such powers, privileges and licenses, provided that the responding Partner shall have no such obligation if, in such Partner's good faith judgment, the execution or 44 45 delivery of such document shall be contrary to the best interests of the responding Partner or the Partnership.] 16.3 PUT AND CALL AGREEMENT. Contemporaneously herewith, DII, DI, WISI and TWC shall execute the Put and Call Agreement, attached hereto as Exhibit A. 16.4 NONDISCLOSURE; PUBLICITY. The Partners shall not, at any time directly or through others, use, disclose, publish or otherwise disseminate any and all confidential technological and business information of the Partnership or that of the Partners discovered, developed or known by the Partners as a consequence of their respective ownership of, employment by or relationship with the Partnership, including information entrusted to the Partnership by others, and any proprietary rights, inventions or tangible unpatented proprietary rights of the Partnership except that a Partner may disclose information to an Affiliate provided that such Affiliate agrees to be bound by the provisions of this Section 16.4, and except as required for any Partner's financing, banking or other credit relationships. Furthermore, no Partner shall divulge to any third party the actual Percentage Interest held by any Partner including its own, except as may be required by law or the Partner's own financial statements or as permitted elsewhere in this Agreement. 16.5 FIRST RIGHT OF REFUSAL. If the Partnership has received from a third party a bona fide offer to purchase a material asset, the Managing Part- ner shall give notice of such offer (the "Notice") to all of the Partners by registered mail. The Notice shall include (a) the price offered, (b) the name of the prospective purchaser, (c) all material terms and conditions of the proposed sale, and (d) an offer to sell such asset to any Partner at the same price and on the same terms and conditions. Each Partner shall have 20 days following receipt of the Notice (the "Response Period") to accept or reject the offer made pursuant to Section 16.5, clause (d) hereof. The sale of such asset, whether to a Partner or the third party shall take place within 40 days after the expiration of the Response Period, and shall be on the terms and conditions set forth in the 45 46 Notice. Failure to close within such 40-day period for any reason shall give rise to an opportunity for any Partner who previously approved the sale pursuant to Section 9.9 to reconsider such approval. 16.6 NOTICES. Unless otherwise specifically provided in this Agreement, all notices and other communications required or permitted to be given hereunder shall be in writing and shall be (i) delivered by hand, (ii) delivered by a nationally recognized commercial overnight delivery service, (iii) mailed postage pre-paid by certified mail in any such case directed or addressed to the respective addresses set forth in Section 2.8 hereof (iv) transmitted by facsimile, with receipt confirmed. Such notices shall be effective: (a) in the case of hand deliveries, when received; (b) in the case of an overnight delivery service, on the next business day after being placed in the possession of such delivery service, with delivery charges pre-paid; (c) in the case of certified mail, upon receipt of the written signature card indicating acceptance by addressee; and (d) in the case of facsimile notices, the Business Day following the date on which electronic indication of receipt is received. Any party may change its address and facsimile number by written notice to the other parties given in accordance with this Section 16.6. 16.7 ENTIRE AGREEMENT, ETC. This Agreement and those agreements listed on Exhibit B hereto shall constitute the entire agreement between the parties hereto relating to the operations of the Partnership and shall supersede all prior contracts, agreements and understandings between them relating to such operations. Except as provided in Section 10.2(ii), no course of prior dealings between the parties shall be relevant to supplement or explain any term used in the Agreement. Acceptance or acquiescence in a course of performance rendered under this Agreement shall not be relevant to determine the meaning of this Agreement even though the accepting or the acquiescing party has knowledge of the nature of the performance and an opportunity for objection. No provisions of this Agreement may be waived, amended or modified orally, but only by an instrument in writing executed by a duly authorized officer of the party against whom enforce- 46 47 ment of any waiver or consent or by whom discharge is sought. No waiver of any terms or conditions of this Agreement in one instance shall operate as a waiver of any other term or condition or as a waiver in any other instance. 16.8 CONSTRUCTION PRINCIPLES. As used in this Agreement words in any gender shall be deemed to include all other genders. The singular shall be deemed to include the plural and vice versa. The captions and article and section headings in this Agreement are inserted for convenience of reference only and are not intended to have significance for the interpretation of or construction of the provisions of this Agreement. 16.9 COUNTERPARTS. This Agreement may be executed in two or more counterparts by the parties hereto, each of which when so executed will be an original, but all of which together will constitute one and the same instrument. 16.10 SEVERABILITY. If any provision of this Agreement is held to be invalid or unenforceable for any reason, such provision shall be ineffective to the extent of such invalidity or unenforceability; PROVIDED, HOWEVER, that the remaining provisions will continue in full force without being impaired or invalidated in any way unless such invalid or unenforceable provision or clause shall be so significant as to materially affect the parties' expectations regarding this Agreement. Otherwise, the parties hereto agree to replace any invalid or unenforceable provision with a valid provision which most closely approximates the intent and economic effect of the invalid or unenforceable provision. 16.11 ARBITRATION; GOVERNING LAW. Any dispute or controversy as may arise out of or relating to this Agreement, including any question regarding its existence, validity or construction shall be submitted to arbitration under the Commercial Arbitration Rules of the American Arbitration Association ("AAA"), except that any such dispute or controversy shall be submitted to three arbitrators, one of whom shall be chosen by each party from the AAA panel of arbitrators and the 47 48 third by the two arbitrators previously chosen. Such arbitration shall take place in New York City. The parties agree to observe faithfully this Agreement and such rules, and to abide by and perform any award rendered by the arbitrator, and that a judgment of any court having jurisdiction may be entered on the award. In any such arbitration, this Agreement shall be governed by and construed in accordance with the laws of the State of Delaware without giving effect to any conflicts of law rule. 16.12 BINDING EFFECT. Subject to the provisions of this Agreement relating to transferability, this Agreement shall be binding upon, and inure to the benefit of, the Partners and their respective successors and permitted assigns. 16.13 ADDITIONAL DOCUMENTS AND ACTS. Each Partner agrees to execute and deliver such additional documents and instruments and to perform such additional acts as may be necessary or appropriate to effectuate, carry out and perform all of the terms, provisions, and conditions of this Agreement and of the transactions contemplated hereby. 16.14 NO THIRD PARTY BENEFICIARY. This Agreement is made solely for the benefit of the parties hereto and their successors and permitted assigns and no other person shall have any rights, interest, or claims hereunder or otherwise be entitled to any benefits under or on account of this Agreement as a third party beneficiary or otherwise. 16.15 PARTNERSHIP. DII and WISI intend to carry on a partnership under the laws of the Republic of Ireland; and the Partnership will be treated as a partnership for United States federal, state and local income tax purposes. TWC is not and shall not be regarded as a partner in the Partnership. 48 49 IN WITNESS WHEREOF, each of the parties hereto has duly executed this Agreement as of the date first written above. DISCLOSURE INTERNATIONAL INCORPORATED (Partner) By: /s/ Joseph E. Kasputys ------------------------------- Name: Joseph E. Kasputys Title: Chairman WRIGHT INVESTORS' SERVICE INTERNATIONAL LIMITED (Partner) By /s/ Peter M. Donovan ------------------------------- Name: Peter M. Donovan Title: Managing Director THE WINTHROP CORPORATION By: /s/ Peter M. Donovan ------------------------------- Name: Peter M. Donovan Title President 49 50 Schedule A ---------- Partner Interests Percentage Interests: - - -------------------- DII - 80% Percentage Interest WISI - 20% Percentage Interest 51 Schedule B ---------- Partnership Committee DII: Steven Schneider William O'Connor WISI: Peter Donovan Eugene Helm 52 Exhibit 2.5 IRISH PARTNERSHIP INTEREST PURCHASE AND SALE AGREEMENT This Irish Partnership Interest Purchase and Sale Agreement (this "Agreement") is dated as of October 15, 1996, by and between Disclosure International Incorporated, a Delaware corporation ("Purchaser") and The Winthrop Corporation, a Connecticut corporation ("Seller"). RECITALS WHEREAS, pursuant to the partnership agreement (the "Partnership Agreement"), dated November 16, 1990 by and between Purchaser and Wright Investors' Service International Limited, a limited liability company incorporated in Ireland ("WISI"), as amended by an agreement dated as of June 22, 1995 executed by Primark Corporation, a Michigan corporation, and Seller on behalf of themselves and their respective affiliates, WISI and Purchaser are partners in Worldscope/Disclosure International Partners, a partnership subject to the Partnership Act, 1890 of Ireland ("WDI"), each owning a 50% partnership interest in WDI; and WHEREAS, Purchaser desires to acquire from Seller, and Seller has agreed to sell to Purchaser, 100% of Seller's partnership interest in WDI (the "Interest"), upon the terms and conditions hereinafter set forth (the "Purchase"), resulting in Purchaser holding an 80% partnership interest in WDI and WISI holding a 20% partnership interest in WDI; and NOW, THEREFORE, the parties hereto agree as follows: 1. Seller represents and warrants that (a) Seller is duly authorized to execute, perform and deliver this Agreement and this Agreement is a valid and binding agreement of Seller enforceable in accordance with its terms, and neither the execution of this Agreement nor the completion by Seller of the transactions contemplated hereby will constitute a breach of, or conflict with, or default under, its memorandum of association and articles of association or any contract, commitment, agreement, understanding, arrangement or restriction of any kind to which Seller is a party or by which Seller is bound except as rights hereunder may be limited by insolvency, 53 reorganization or other similar laws affecting the rights of creditors generally; (b) Seller owns the Interest, free and clear of any claims, liens, charges, encumbrances and security interest, and, at the Closing (as hereinafter defined), Purchaser shall acquire title to the Interest, free and clear of any claims, liens, charges, encumbrances and security interests; (c) Seller has full power and authority to sell the Interest to Purchaser; (d) Seller has filed when due all tax returns, if any, that are required to be filed by Seller, including any that Seller is required to file for Irish tax purposes, and each such return, if any, was prepared in the manner required by applicable laws and was true, correct and complete in all material respects; and (e) Seller has timely paid all taxes, if any, imposed on or incurred by Seller. Seller, upon request, shall promptly execute and deliver any additional documents reasonably deemed by Purchaser to be necessary, appropriate or desirable to complete and evidence the sale, assignment and transfer of the Interest pursuant to this Agreement. 2. Purchaser represents and warrants that (a) Purchaser is duly authorized to execute and deliver this Agreement and this Agreement is a valid and binding agreement of Purchaser enforceable in accordance with its terms, except as rights hereunder may be limited by bankruptcy, reorganization or other similar laws affecting the rights of creditors generally; and (b) Purchaser is acquiring the Interest for its own account and not with a view to any resale or distribution thereof. Purchaser, upon request, shall promptly execute and deliver any additional documents reasonably deemed by Seller to be necessary, appropriate or desirable to complete and evidence the sale, assignment and transfer of the Interest pursuant to this Agreement. 3. Each of Purchaser and Seller represents that the assets and liabilities of the Partnership are as set forth on Exhibit A hereto, which Exhibit A will be adjusted to reflect changes in such assets and liabilities between September 30, 1996 and the date hereof. 4. At the Closing provided for in Section 6 of this Agreement (the "Closing"), Seller shall sell, convey, transfer, assign and deliver the Interest to Purchaser and Purchaser shall purchase from Seller the Interest. 2 54 5. In consideration of the foregoing sale, conveyance, transfer, assignment and delivery of the Interest, Purchaser shall pay on the Closing Date by wire transfer to the bank account specified by Seller, in immediately available funds in United States dollars, the amount of Two Million Dollars ($2,000,000). 6. The Closing shall take place at the office of the Purchaser on the date hereof, or at such other time or at such other place as the parties may mutually agree (the "Closing Date"). 7. Seller shall pay all transfer taxes and recording charges (including without limitation, sales, use, stamp, documentary, recording, and similar taxes, filing fees and similar charges) in connection with the purchase and sale of the Interest contemplated herein. The party which has primary responsibility under applicable law for the payment of any such transfer tax or recording charge shall prepare and file the relevant tax return or form and notify the other party in writing of the amount of the tax or charge shown on such tax return or form. If such tax or charge is paid by Purchaser, Seller shall reimburse Purchaser in immediately available funds within ten (10) days of receipt of such notice. 8. The parties hereby agree to cooperate in taking all actions necessary to cause the Partnership to make the election allowable under Section 754 of the Internal Revenue Code of 1986, as amended. 9. On the Closing Date, and contemporaneously with the purchase and sale of the Interest, (a) Seller and Purchaser will execute the Put and Call Agreement, substantially in the form attached hereto as Exhibit B and (b) Purchaser will execute the Amended and Restated Partnership Agreement for WDI, substantially in the form attached hereto as Exhibit C. 10. Seller and Purchaser acknowledge that Purchaser shall file any and all necessary returns and filings with applicable tax authorities as may be required in connection with the transaction contemplated herein, except for those returns and filings which must be filed by Seller in accordance with law which such returns and filings Seller shall file. All such returns 3 55 and filings required to be made by either party are subject to review and approval by the other party hereto prior to their being filed with such tax authorities. 11. All representations, warranties and agreements made by Seller and Purchaser in this Agreement shall survive the Closing hereunder and any investigation at any time made by or on behalf of any party hereto. 12. This Agreement shall be binding upon, inure to the benefit of and be enforceable by (a) the Seller and its successors and assigns and (b) the Pur- chaser and its successors and assigns. 13. All notices and other communications required or permitted to be given hereunder shall be in writing and shall be (a) delivered by hand, (b) delivered by a nationally recognized commercial overnight delivery service, (c) mailed postage prepaid by certified mail in any such case directed or addressed to the respective addresses set forth below, or (d) transmitted by facsimile, with receipt confirmed. Such notices shall be effective: (a) in the case of hand deliveries, when received; (b) in the case of an overnight delivery service, on the next business day after being placed in the possession of such delivery service, with delivery charges prepaid; (c) in the case of certified mail, the date indicated on the written signature card indicating acceptance by addressee; and (d) in the case of facsimile notices, the first Business Day following the date on which electronic indication of receipt is received. Notices to each party shall be sent to the address set forth below for each party, or to such other place as such party may designate by written notice to the other party. If to Purchaser: Disclosure International Incorporated 5161 River Road Bethesda, Maryland 20816 Attn: Steven Schneider, President If to Seller: The Winthrop Corporation 1000 Lafayette Boulevard Bridgeport, Connecticut 06604 Attn: Peter M. Donovan, President 14. This Agreement will be governed by and 4 56 construed in accordance with the laws of the State of Delaware, without regard to its conflicts of law rules. 15. This Agreement may be executed in one or more counterparts, each of which will be deemed to be an original and all of which together will constitute one and the same instrument. 16. Except as otherwise provided in paragraph 7 hereof, and whether or not this Agreement and the transactions contemplated hereby are consummated, all costs and expenses (including legal fees and expenses) incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such expenses. IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the duly authorized officers of Purchaser and Seller as of the date first written above. DISCLOSURE INTERNATIONAL INCORPORATED By /s/ Joseph E. Kasputys ------------------------- Name: Joseph E. Kasputys Title: Chairman THE WINTHROP CORPORATION By /s/ Peter M. Donovan ----------------------- Name: Peter M. Donovan Title: President 5 57 Exhibit 2.5 PARTNERSHIP INTEREST PURCHASE AND SALE AGREEMENT This Partnership Interest Purchase and Sale Agreement (this "Agreement") is dated as of October 15, 1996, by and between Disclosure International Incorporated, a Delaware corporation ("Purchaser") and The Winthrop Corporation, a Connecticut corporation ("Seller"). RECITALS WHEREAS, pursuant to the partnership agreement, dated as of November 16, 1990 by and among Purchaser, Seller and Disclosure Incorporated, a Delaware corporation and an affiliate of Purchaser, as amended by an agreement dated as of June 22, 1995 executed by Primark Corporation, a Michigan corporation, and Seller on behalf of themselves and their respective affiliates, (the "Partnership Agreement"), Seller and Purchaser are general partners in Worldscope/Disclosure Partners, a Connecticut general partnership (the "Partnership"), each owning a 50% general partnership interest in the Partnership; and WHEREAS, Purchaser desires to acquire from Seller, and Seller has agreed to sell to Purchaser, 60% of the Seller's general partnership interest in the Partnership (the "Interest"), upon the terms and conditions hereinafter set forth: NOW, THEREFORE, the parties hereto agree as follows: 1. The Seller represents and warrants that (a) the Seller is duly authorized to execute and deliver this Agreement and this Agreement is a valid and binding agreement of the Seller enforceable in accordance with its terms, and neither the execution of this Agreement nor the consummation by the Seller of the transactions contemplated hereby will constitute a violation of, or conflict with, or default under, any contract, commitment, agreement, understanding, arrangement or restriction of any kind to which the Seller is a party or by which the Seller is bound except as rights hereunder may be limited by bankruptcy, reorganization or other similar laws affecting the rights of creditors generally; (b) the Seller owns the Interest, free and clear of any claims, liens, charges, encumbrances and security interest, and, at the Closing (as hereinafter defined), the Purchaser 58 shall acquire title to the Interest, free and clear of any claims, liens, charges, encumbrances and security interests; and (c) the Seller has full power and authority to sell the Interest to the Purchaser. The Seller, upon request, shall promptly execute and deliver any additional documents reasonably deemed by the Purchaser to be necessary, appropriate or desirable to complete and evidence the sale, assignment and transfer of the Interest pursuant to this Agreement. 2. The Purchaser represents and warrants that (a) the Purchaser is duly authorized to execute and deliver this Agreement and this Agreement is a valid and binding agreement of the Purchaser enforceable in accordance with its terms, except as rights hereunder may be limited by bankruptcy, reorganization or other similar laws affecting the rights of creditors generally; and (b) the Purchaser is acquiring the Interest for its own account and not with a view to any resale or distribution thereof. The Purchaser, upon request, shall promptly execute and deliver any additional documents reasonably deemed by the Seller to be necessary, appropriate or desirable to complete and evidence the sale, assignment and transfer of the Interest pursuant to this Agreement. 3. Each of the Purchaser and Seller represents that as of September 30, 1996 the assets and liabilities of the Partnership are as set forth on Exhibit A hereto, which Exhibit A will be adjusted to reflect changes in such assets and liabilities between September 30, 1996 and the date hereof. 4. At the Closing provided for in Section 6 of this Agreement (the "Closing"), the Seller shall sell, convey, transfer, assign and deliver the Interest to the Purchaser and the Purchaser shall purchase from Seller the Interest. 5. In consideration of the foregoing sale, conveyance, transfer, assignment and delivery of the Interest, Purchaser shall pay on the Closing Date by wire transfer to the bank account specified by Seller, in immediately available funds in United States dollars, the amount of Three Million Dollars ($3,000,000). 6. The Closing shall take place at the office of the Purchaser on the date hereof, or at such other 2 59 time or at such other place as the parties may mutually agree (the "Closing Date"). 7. Purchaser and Seller shall bear equal responsibility for the payment of all transfer taxes and recording charges (including without limitation, sales, use, stamp, documentary, recording, and similar taxes, filing fees and similar charges) in connection with the purchase and sale of the Interest contemplated herein. The party which has primary responsibility under applicable law for the payment of any such transfer tax or recording charge shall prepare and file the relevant tax return or form and notify the other party in writing of the amount of the tax or charge shown on such tax return or form. If such tax or charge is paid by Purchaser, Seller shall reimburse Purchaser one-half of the amount of such tax or charge in immediately available funds within ten (10) days of receipt of such notice; if such tax or charge is paid by Seller, Purchaser shall reimburse Seller one-half of the amount of such tax or charge in immediately available funds within ten (10) days of receipt of such notice. 8. The parties hereby agree to take all actions necessary to cause the Partnership to make the election allowable under Section 754 of the Internal Revenue Code of 1986, as amended. 9. On the Closing Date, and contemporaneously with the purchase and sale of the Interest, (i) the Purchaser and Seller will execute or cause to be executed (a) the Merger Agreement, substantially in the form attached hereto as Exhibit B, (b) the Limited Liability Company Operating Agreement for Worldscope/Disclosure L.L.C., substantially in the form attached hereto as Exhibit C, and (c) the Put and Call Agreement, substantially in the form attached hereto as Exhibit D, and (ii) will cause the Certificate of Merger, substantially in the form attached hereto as Exhibit E, to be filed with the Secretary of State of the State of Delaware. 10. All representations, warranties and agreements made by the Seller and the Purchaser in this Agreement shall survive the Closing hereunder and any investigation at any time made by or on behalf of any party hereto. 3 60 11. This Agreement will be binding upon, inure to the benefit of and be enforceable by (i) the Seller and its successors and assigns, and (ii) the Purchaser and its successors and assigns. 12. All notices and other communications required or permitted to be given hereunder shall be in writing and shall be (i) delivered by hand, (ii) delivered by a nationally recognized commercial overnight delivery service, (iii) mailed postage prepaid by certified mail in any such case directed or addressed to the respective addresses set forth below, or (iv) transmitted by facsimile, with receipt confirmed. Such notices shall be effective: (a) in the case of hand deliveries, when received; (b) in the case of an overnight delivery service, on the next business day after being placed in the possession of such delivery service, with delivery charges prepaid; (c) in the case of certified mail, on the date indicated on the written signature card indicating acceptance by addressee; and (d) in the case of facsimile notices, the first Business Day following the date on which electronic indication of receipt is received. Notices to each party shall be sent to the address set forth below for each party, or to such other place as such party may designate by written notice to the other party. If to Purchaser: 5161 River Road Bethesda, Maryland 20816 Attn: Steven Schneider, President If to Seller: 1000 Lafayette Boulevard Bridgeport, Connecticut 06604 Attn: Peter M. Donovan, President 13. This Agreement will be governed by and construed in accordance with the laws of the State of Delaware, without regard to its conflicts of law rules. 14. This Agreement may be executed in one or more counterparts, each of which will be deemed to be an original and all of which together will constitute one and the same instrument. 15. Except as otherwise provided in paragraph 7 hereof, and whether or not this Agreement and the 4 61 transactions contemplated hereby are consummated, all costs and expenses (including legal fees and expenses) incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such expenses. 5 62 IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the duly authorized officers of the Purchaser and by the Seller as of the date first written above. DISCLOSURE INTERNATIONAL INCORPORATED By /s/ JOSEPH E. KASPUTYS --------------------------------- Name: Joseph E. Kasputys Title: Chairman THE WINTHROP CORPORATION By /s/ PETER M. DONOVAN --------------------------------- Name: Peter M. Donovan Title: President 6 EX-2.6 3 STOCK PURCHASE AGREEMENT DATED NOVEMBER 24, 1996 1 Exhibit 2.6 STOCK PURCHASE AGREEMENT dated as of November 27, 1996 by and between Primark Corporation, Bowne & Co., Inc., Robert G. Patterson, and Robert G. Patterson, as Trustee of the Rob and Molly Patterson Trust with respect to all outstanding capital stock of Baseline Financial Services, Inc. 2 TABLE OF CONTENTS This Table of Contents is not part of the Agreement to which it is attached but is inserted for convenience only.
Page No. ---- ARTICLE I SALE OF SHARES AND CLOSING 1.01 Purchase and Sale............................................................. 1 1.02 Purchase Price................................................................ 1 1.03 Additional Payments........................................................... 1 1.04 Closing....................................................................... 2 1.05 The Merger.................................................................... 2 1.06 Further Assurances; Post-Closing Cooperation.................................. 2 ARTICLE II REPRESENTATIONS AND WARRANTIES OF SELLERS 2.01 Organization of Bowne......................................................... 3 2.02 Authority..................................................................... 3 2.03 Organization of the Company................................................... 4 2.04 Capital Stock................................................................. 4 2.05 Subsidiaries.................................................................. 4 2.06 No Conflicts.................................................................. 4 2.07 Governmental Approvals and Filings............................................ 5 2.08 Books and Records............................................................. 5 2.09 Financial Statements.......................................................... 6 2.10 Absence of Changes............................................................ 6 2.11 No Undisclosed Liabilities.................................................... 8 2.12 Taxes......................................................................... 8 2.13 Legal Proceedings............................................................. 10 2.14 Compliance With Laws and Orders............................................... 10 2.15 Benefit Plans; ERISA.......................................................... 11 2.16 Real Property................................................................. 14 2.17 Tangible Personal Property.................................................... 14 2.18 Intellectual Property......................................................... 14 2.19 Computer Programs............................................................. 15 2.20 Contracts..................................................................... 16 2.21 Licenses...................................................................... 18 2.22 Insurance..................................................................... 18 2.23 Affiliate Transactions........................................................ 18 2.24 Employees; Labor Relations.................................................... 19 2.25 Environmental Matters......................................................... 19 2.26 Substantial Customers and Suppliers........................................... 20 2.27 Brokers....................................................................... 20 2.28 Schedules..................................................................... 20 2.29 No Implied Representation..................................................... 20
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Page No. ---- ARTICLE III REPRESENTATIONS AND WARRANTIES OF PURCHASER 3.01 Organization.................................................................... 21 3.02 Authority....................................................................... 21 3.03 No Conflicts.................................................................... 21 3.04 Governmental Approvals and Filings.............................................. 22 3.05 Legal Proceedings............................................................... 22 3.06 Purchase for Investment......................................................... 22 3.07 Brokers......................................................................... 22 ARTICLE IV COVENANTS OF SELLERS 4.01 Regulatory and Other Approvals.................................................. 23 4.02 HSR Filings..................................................................... 23 4.03 Investigation by Purchaser...................................................... 23 4.04 No Solicitations................................................................ 24 4.05 Conduct of Business............................................................. 24 4.06 Financial Statements and Reports; Filings....................................... 25 4.07 Employee Matters................................................................ 25 4.08 Certain Restrictions............................................................ 26 4.09 Affiliate Transactions.......................................................... 27 4.10 Books and Records............................................................... 27 4.11 Noncompetition.................................................................. 28 4.12 Appeal Assets................................................................... 29 4.13 Fulfillment of Conditions....................................................... 29 ARTICLE V COVENANTS OF PURCHASER 5.01 Regulatory and Other Approvals.................................................. 29 5.02 HSR Filings..................................................................... 30 5.03 Fulfillment of Conditions....................................................... 30 ARTICLE VI CONDITIONS TO OBLIGATIONS OF PURCHASER 6.01 Representations and Warranties................................................... 30 6.02 Performance...................................................................... 31 6.03 Officers' Certificates........................................................... 31 6.04 Orders and Laws.................................................................. 31 6.05 Regulatory Consents and Approvals................................................ 31 6.06 Third Party Consents............................................................. 31 6.07 Opinion of Counsel............................................................... 32
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Page No. ---- 6.08 Resignations of Directors and Officers........................................... 32 6.09 Employment Agreements............................................................ 32 ARTICLE VII CONDITIONS TO OBLIGATIONS OF SELLERS 7.01 Representations and Warranties................................................... 32 7.02 Performance...................................................................... 33 7.03 Officers' Certificates........................................................... 33 7.04 Orders and Laws.................................................................. 33 7.05 Regulatory Consents and Approvals................................................ 33 7.06 Third Party Consents............................................................. 33 7.07 Opinion of Counsel............................................................... 33 ARTICLE VIII TAX MATTERS AND POST-CLOSING TAXES 9.01 General.......................................................................... 39 9.02 Growth Participation Plan........................................................ 39 9.03 Bowne Pension Plan............................................................... 39 9.04 Bowne Profit Sharing Plan........................................................ 40 9.05 Employee Bonuses................................................................. 40 ARTICLE X SURVIVAL OF REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS 10.01 Survival of Representations, Warranties, Covenants and Agreements...................................................... 40 ARTICLE XI INDEMNIFICATION 11.01 Indemnification................................................................. 41 11.02 Method of Asserting Claims...................................................... 42
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Page No. ---- ARTICLE XII TERMINATION 12.01 Termination..................................................................... 46 12.02 Effect of Termination........................................................... 46 ARTICLE XIII DEFINITIONS 13.01 Definitions..................................................................... 46 ARTICLE XIV MISCELLANEOUS 14.01 Notices......................................................................... 55 14.02 Entire Agreement................................................................ 56 14.03 Expenses........................................................................ 56 14.04 Public Announcements............................................................ 56 14.05 Confidentiality................................................................. 57 14.06 Waiver.......................................................................... 57 14.07 Amendment....................................................................... 58 14.08 No Third Party Beneficiary...................................................... 58 14.09 No Assignment; Binding Effect................................................... 58 14.10 Headings........................................................................ 58 14.11 Invalid Provisions.............................................................. 58 14.12 Governing Law................................................................... 59 14.13 Counterparts.................................................................... 59
- iv - 6 EXHIBITS EXHIBIT A Officer's Certificate of Bowne EXHIBIT B Secretary's Certificate of Bowne EXHIBIT C Opinions of Counsel to Sellers EXHIBIT D Form of Employment Agreement EXHIBIT E Officer's Certificate of Purchaser EXHIBIT F Secretary's Certificate of Purchaser EXHIBIT G Opinion of Counsel to Purchaser - v - 7 This STOCK PURCHASE AGREEMENT dated as of November 27, 1996 is made and entered into by and among Primark Corporation, a Michigan corporation ("Purchaser"), Bowne & Co., Inc., a New York corporation ("Bowne") and Robert G. Patterson ("Patterson") and Robert G. Patterson, as Trustee of the Rob and Molly Patterson Trust ("Trust" and, together with Bowne and Patterson, the "Sellers"). Capitalized terms not otherwise defined herein have the meanings set forth in Section 13.01. WHEREAS, Bowne owns Nine Hundred (900) shares of common stock, par value $0.01 per share, of Baseline Financial Services, Inc., a New York corporation (the "Company"), and Patterson owns 50 shares of common stock, par value $0.01 per share, of the Company and Trust owns 50 shares of common stock, par value $0.01 per share, of the Company, which shares together constitute all issued and outstanding shares of capital stock of the Company (such shares being referred to herein as the "Shares"); and WHEREAS, Sellers desire to sell, and Purchaser desires to purchase, the Shares on the terms and subject to the conditions set forth in this Agreement; NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: ARTICLE I SALE OF SHARES AND CLOSING 1.01 Purchase and Sale. Sellers agree to sell to Purchaser, and Purchaser agrees to purchase from Sellers, all of the right, title and interest of Sellers in and to the Shares at the Closing on the terms and subject to the conditions set forth in this Agreement. 1.02 Purchase Price. The aggregate purchase price for the Shares and for the covenant of Sellers contained in Section 4.11 is $40,000,000 (the "Purchase Price") (allocable to Sellers as follows: $36 million to Bowne, $2 million to Patterson and $2 million to the Trust), payable in immediately available funds at the Closing in the manner provided in Section 1.04. 1.03 Additional Payments. At the Closing, Purchaser shall pay the following amounts to Bowne: (i) an aggregate of $541,000 in respect of the vesting of the interests in the Bowne Profit Sharing Plan of each employee of the Company participating in such plan who is not vested as of the Closing Date, and (ii) $192,000 in respect of the vesting of the interests in the Bowne 8 Pension Plan of each employee of the Company participating in such plan who is not vested as of the Closing Date. In addition, Purchaser hereby agrees to pay and discharge when due the following amounts: (x) up to $284,000 in the aggregate, to the employees entitled thereto under the Baseline Growth Participation Plan, (y) up to $230,000, in the aggregate, to Bowne in payment of the Company's contribution to the Bowne Pension Plan for fiscal year 1996 in respect of the employees of the Company with vested interests in such plan as of October 31, 1996, and (z) up to $250,000 in the aggregate, to the employees entitled thereto in payment of bonuses in respect of the fiscal year ended October 31, 1996. 1.04 Closing. The Closing will take place at the offices of Milbank, Tweed, Hadley & McCloy, 1 Chase Manhattan Plaza, New York, N.Y. 10005-1413, or at such other place as Purchaser and Sellers mutually agree, at 10:00 A.M. local time, on the Closing Date. At the Closing, Purchaser will pay the Purchase Price by wire transfer of immediately available funds to such accounts as each Seller may reasonably direct by written notice delivered to Purchaser by Seller at least two (2) Business Days before the Closing Date. Simultaneously, Sellers will assign and transfer to Purchaser all of their right, title and interest in and to the Shares by delivering to Purchaser certificates representing the Shares, in genuine and unaltered form, duly endorsed in blank or accompanied by duly executed stock powers endorsed in blank, with requisite stock transfer tax stamps, if any, attached. At the Closing, there shall also be delivered to Sellers and Purchaser the opinions, certificates and other Contracts, documents and instruments to be delivered under Articles VI and VII. 1.05 The Merger. As soon as practicable following the Closing Date, a wholly-owned subsidiary of Purchaser will be merged with and into the Company with the Company as the surviving corporation. 1.06 Further Assurances; Post-Closing Cooperation. (a) At any time or from time to time after the Closing, Sellers shall execute and deliver to Purchaser such other documents and instruments, provide such materials and information and take such other actions as Purchaser may reasonably request more effectively to vest title to the Shares in Purchaser and, to the full extent permitted by Law, to put Purchaser in actual possession and operating control of the Company and its Assets and Properties and Books and Records, and otherwise to cause Sellers to fulfill their obligations under this Agreement and the Operative Agreements to which either of them is a party. (b) Following the Closing, each party will afford the other party, its counsel and its accountants, during normal business hours, reasonable access to the books, records and other - 2 - 9 data relating to the Business or Condition of the Company in its possession with respect to periods prior to the Closing and the right to make copies and extracts therefrom, to the extent that such access may be reasonably required by the requesting party in connection with (i) the preparation of Tax Returns, (ii) the determination or enforcement of rights and obligations under this Agreement, (iii) compliance with the requirements of any Governmental or Regulatory Authority, (iv) the determination or enforcement of the rights and obligations of any party to this Agreement or any of the Operative Agreements or (v) in connection with any actual or threatened Action or Proceeding. Further, each party agrees for a period extending six (6) years after the Closing Date not to destroy or otherwise dispose of any such books, records and other data unless such party shall first offer in writing to surrender such books, records and other data to the other party and such other party shall not agree in writing to take possession thereof during the ten (10) day period after such offer is made. (c) Notwithstanding anything to the contrary contained in this Section , if the parties are in an adversarial relationship in litigation or arbitration, the furnishing of information, documents or records in accordance with any provision of this Section shall be subject to applicable rules relating to discovery. ARTICLE II REPRESENTATIONS AND WARRANTIES OF SELLERS Sellers hereby represent and warrant to Purchaser as follows: 2.01 Organization of Bowne. Bowne is a corporation duly organized, validly existing and in good standing under the Laws of the State of New York. 2.02 Authority. Each Seller has full power and authority (corporate and otherwise) to execute and deliver this Agreement and the Operative Agreements to which it is a party and to perform its obligations hereunder and thereunder and to consummate the transactions contemplated hereby and thereby. The execution and delivery by Bowne of this Agreement and the Operative Agreements to which it is a party, and the performance by Bowne of its obligations hereunder and thereunder, have been duly and validly authorized by the Board of Directors of Bowne, no other corporate action on the part of Bowne or its stockholders being necessary. This Agreement has been duly and validly executed and delivered by each Seller and constitutes, and upon the execution and delivery by each Seller of the Operative Agreements to which it is a party, such Operative - 3 - 10 Agreements will constitute, (assuming due authorization, execution and delivery by Purchaser and the other parties to any Operative Agreements) legal, valid and binding obligations of each Seller enforceable against each Seller in accordance with their terms, except to the extent limited by bankruptcy, insolvency, reorganization, moratorium or other laws relating to or affecting creditors' rights generally and by general equity principles, regardless of whether such enforceability is considered in a proceeding in equity or at law. 2.03 Organization of the Company. The Company is a corporation duly organized, validly existing and in good standing under the Laws of the State of New York, and has full corporate power and authority to conduct its business as and to the extent now conducted and to own, use and lease its Assets and Properties. The Company is duly qualified, licensed or admitted to do business and is in good standing in those jurisdictions specified in Section 2.03 of the Disclosure Schedule, which are the only jurisdictions in which the ownership, use or leasing of its Assets and Properties, or the conduct or nature of its business, makes such qualification, licensing or admission necessary, except for those jurisdictions in which the adverse effects of all such failures by the Company to be qualified, licensed or admitted and in good standing would not have a material adverse effect on the Business and Condition of the Company. Sellers have prior to the execution of this Agreement delivered to Purchaser true and complete copies of the certificate of incorporation and by-laws of the Company as in effect on the date hereof. 2.04 Capital Stock. The authorized capital stock of the Company consists solely of One Thousand (1,000) shares of Common Stock, of which only the Shares have been issued. The Shares are duly authorized, validly issued, fully paid and nonassessable. Each Seller owns the Shares listed opposite its name in Section 2.04 of the Disclosure Schedule beneficially and of record, free and clear of all Liens (other than Liens arising out of, under or in connection with this Agreement). Except for this Agreement and as disclosed in Section 2.04 of the Disclosure Schedule, there are no outstanding Options with respect to the Company. The delivery of a certificate or certificates at the Closing representing the Shares in the manner provided in Section 1.03 will transfer to Purchaser good and valid title to the Shares, free and clear of all Liens, except for any Liens created by or on behalf of Purchaser or any of its Affiliates. 2.05 Subsidiaries. The Company does not have any subsidiaries, nor does the Company own any equity securities of any other Person. 2.06 No Conflicts. The execution and delivery by each Seller of this Agreement do not, and the execution and delivery - 4 - 11 by each Seller of the Operative Agreements to which it is a party, the performance by each Seller of its obligations under this Agreement and such Operative Agreements and the consummation of the transactions contemplated hereby and thereby will not: (a) conflict with or result in a violation or breach of any of the terms, conditions or provisions of the certificate or articles of incorporation or by-laws (or other comparable corporate charter documents) of Bowne or the Company; (b) subject to obtaining the consents, approvals and actions, making the filings and giving the notices disclosed in Section 2.07 of the Disclosure Schedule, conflict with or result in a violation or breach of any term or provision of any Law or Order applicable to Sellers or the Company or any of their respective Assets and Properties; or (c) except as disclosed in Section 2.06 of the Disclosure Schedule, (i) conflict with or result in a violation or breach of, (ii) constitute (with or without notice or lapse of time or both) a default under, (iii) require Sellers or the Company to obtain any consent, approval or action of, make any filing with or any payment to, or give any notice to any Person as a result or under the terms of, (iv) result in or give to any Person any right of termination, cancellation, acceleration or modification in or with respect to, or (v) result in the creation or imposition of any Lien upon the Company or any of its respective Assets and Properties under, any Contract required to be listed on Section 2.20 of the Disclosure Schedule or any License required to be listed on Section 2.21 of the Disclosure Statement. 2.07 Governmental Approvals and Filings. Except as disclosed in Section 2.07 of the Disclosure Schedule, no consent, approval or action of, filing with or notice to any Governmental or Regulatory Authority on the part of Sellers or the Company is required in connection with the execution, delivery and performance of this Agreement or any of the Operative Agreements to which it is a party or the consummation of the transactions contemplated hereby or thereby. 2.08 Books and Records. The minute books of the Company as made available to Purchaser prior to the execution of this Agreement contain a true and complete record, in all material respects, of all action taken at all meetings and by all written consents in lieu of meetings of the stockholders, the boards of directors and committees of the boards of directors of the Company. The stock transfer ledgers of the Company as made available to Purchaser prior to the execution of this Agreement accurately reflect all record transfers prior to the execution of this Agreement in the capital stock of the Company. Except as set forth in Section 2.08 of the Disclosure Schedule, the Company - 5 - 12 does not have any of its Books and Records recorded, stored, maintained, operated or otherwise wholly or partly dependent upon or held by any means (including any electronic, mechanical or photographic process, whether computerized or not) which (including all means of access thereto and therefrom) are not under the exclusive ownership and direct control of the Company. 2.09 Financial Statements. Prior to the execution of this Agreement, Sellers have delivered to Purchaser true and complete copies of the unaudited balance sheets of the Company as of October 31, 1994, 1995 and 1996, and the related unaudited statements of operations, stockholders' equity and cash flows for each of the fiscal years then ended. Except as disclosed in Section 2.09 of the Disclosure Schedule, all such financial statements (i) were prepared in accordance with GAAP (except that such financial statements do not include notes), (ii) fairly present the financial condition and results of operations of the Company as of the respective dates thereof and for the respective periods covered thereby, and (iii) were compiled from the Books and Records of the Company regularly maintained by management and used to prepare the financial statements of the Company in accordance with the principles stated therein. 2.10 Absence of Changes. Except for the execution and delivery of this Agreement and the transactions to take place pursuant hereto on or prior to the Closing Date, since the Year End Financial Statement Date (i) there has not been any material adverse change in the Business or Condition of the Company and (ii) the business and activities of the Company have been conducted in all material respects only in the ordinary course. Without limiting the foregoing, except as disclosed in Section 2.10 of the Disclosure Schedule, there has not occurred between the Year End Financial Statement Date and the date hereof: (i) any declaration, setting aside or payment of any dividend or other distribution in respect of the capital stock of the Company, or any direct or indirect redemption, purchase or other acquisition by the Company of any such capital stock of or any Option with respect to the Company; (ii) any authorization, issuance, sale or other disposition by the Company of any shares of capital stock of or Option with respect to the Company, or any modification or amendment of any right of any holder of any outstanding shares of capital stock of or Option with respect to the Company; (iii) any increase in the salary, wages or other compensation of any officer, employee or consultant of the Company, except for increases in the ordinary course of business and consistent with past practice or as a result of - 6 - 13 or as required by any employment or other agreement, any policy or any bonus, pension, profit sharing or other plan or commitment; (iv) (A) incurrences by the Company of Indebtedness in an aggregate principal amount exceeding $25,000 (net of any amounts discharged during such period), or (B) any voluntary purchase, cancellation, prepayment or complete or partial discharge in advance of a scheduled payment date with respect to, or waiver of any right of the Company under, any Indebtedness of or owing to the Company; (v) any physical damage, destruction or other casualty loss affecting any of the plant, real or personal property or equipment of the Company that would, after taking into account any insurance recoveries payable in respect thereof, have a material adverse effect on the Business or Condition of the Company; (vi) any material change in (x) any investment, accounting, financial reporting, inventory, credit, allowance or Tax practice or policy of the Company, or (y) any method of calculating any bad debt, contingency or other reserve of the Company for accounting, financial reporting or Tax purposes, or any change in the fiscal year of the Company; (vii) any write-off or write-down of or any determination to write off or write down any of the Assets and Properties of the Company in an aggregate amount exceeding $10,000; (viii) any acquisition or disposition of, or incurrence of a Lien (other than a Permitted Lien) on, any Assets and Properties of the Company, other than in the ordinary course of business consistent with past practice; (ix) any (x) amendment of the certificate or articles of incorporation or by-laws of the Company, (y) recapitalization, reorganization, liquidation or dissolution of the Company or (z) merger or other business combination involving the Company and any other Person; (x) capital expenditures or commitments for additions to property, plant or equipment of the Company and the constituting capital assets in an aggregate amount exceeding $100,000; (xi) any transaction by the Company with a Seller, any officer, director or Affiliate (other than the Company) of either Seller (A) outside the ordinary course of business consistent with past practice or (B) other than on an arm's- - 7 - 14 length basis, other than pursuant to any Contract in effect on the Year End Financial Statement Date and disclosed pursuant to Section 2.20(a)(vii) of the Disclosure Schedule; or (xii) any entering into of a Contract to do or engage in any of the foregoing after the date hereof. 2.11 No Undisclosed Liabilities. Except as reflected or reserved against in the balance sheet included in the Year End Financial Statements or in the notes thereto or as disclosed in Section 2.11 of the Disclosure Schedule or any other Section of the Disclosure Schedule, there are no Liabilities against, relating to or affecting the Company or any of its Assets and Properties, other than Liabilities (i) incurred in the ordinary course of business consistent with past practice or (ii) which, individually or in the aggregate, are not material to the Business or Condition of the Company. 2.12 Taxes. (a) The Company has filed all Tax Returns (or the Tax Returns have been filed on behalf of the Company) required to be filed under applicable law as of the date hereof. All these Tax Returns were true, complete and correct in all material respects and filed on a timely basis. The Company has paid all Taxes that are due on such returns, or claimed or asserted by any taxing authority to be due, from the Company and each Subsidiary for the periods covered by the Tax Returns. (b) Except as disclosed in Section 2.12 of the Disclosure Schedule, there are no tax liens upon the assets of the Company except Liens for Taxes not yet due. (c) Except as disclosed in Section 2.12 of the Disclosure Schedule, the Company has not requested (and no request has been made on the Company's behalf) any extension of time within which to file any Tax Return that does not close under operation of law prior to or on the Closing Date. (d) Except as disclosed in Section 2.12 of the Disclosure Schedule, for all Tax Periods that do not close by operation of law prior to or on the Closing Date (i) the Company has not entered into any agreements with any taxing authority extending the statute of limitations for the assessment of Taxes; (ii) there are no ongoing audits or administrative proceedings with respect to any Taxes of the Company; and (iii) no deficiency for any Taxes has been proposed, asserted or assessed against the Company that has not been resolved and paid in full. (e) Except as disclosed in Section 2.12 of the Disclosure Schedule, with respect to all Tax Periods that do not close by operation of law prior to or on the Closing Date, there are no audits or other administrative proceedings or court - 8 - 15 proceedings presently pending with regard to any Taxes or Tax Returns of the Company. (f) Except as disclosed in Section 2.12 of the Disclosure Schedule, with respect to all Tax Periods that do not close by operation of law prior to or on the Closing Date, the Company has not received any written ruling of a taxing authority relating to Taxes or entered into any written and legally binding agreement with any taxing authority relating to Taxes. (g) Except as disclosed in Section 2.12 of the Disclosure Schedule, the Company has made available to Purchaser complete copies of all Tax Returns and associated work papers related to separate company returns filed by or on behalf of the Company for all taxable years ending on or prior to the date of this Agreement. (h) The Company is not a party or subject to, or bound by, any agreements relating to the allocation or sharing of Taxes that will be effective after the Closing Date. (i) Except as disclosed in Section 2.12 of the Disclosure Schedule, the Company is not a party to any agreement, contract, or arrangement that would result, separately or in the aggregate, in the payment of any "excess parachute payments" within the meaning of Code Section 280G. (j) No indebtedness of the Company is "corporate acquisition indebtedness" within the meaning of Code Section 279(b). (k) Except as disclosed in Section 2.12 of the Disclosure Schedule, the Company has not engaged in any transaction with Sellers or any affiliate of Sellers which would result in the recognition of income by Company with respect to such transaction for any period ending after the Closing Date. (l) The Company has complied (and until the Closing Date will comply) with all applicable laws, rules and regulations relating to the payment and withholding of Taxes (including, without limitations, withholding of Taxes pursuant to Code Sections 1441 and 1442 or similar provisions under any foreign laws) in all material respects and has, within the time and in the manner prescribed by law, withheld from employee wages and paid over to the proper governmental authorities all amounts required to be so withheld and paid over under all applicable laws. (m) Bowne is the common parent corporation of an "affiliated group" (within the meaning of Code Section 1504(a)), and has filed a consolidated return for Federal income tax purposes on behalf of itself and the Company for all tax periods in which the Company was an "includible corporation" (within the meaning of Code Section 1504(b)). - 9 - 16 (n) No power of attorney has been granted by the Company with respect to any matter relating to Taxes which is currently in force and will be in force after the Closing Date. (o) The Company has not participated, nor will the Company participate prior to the Closing Date, in or cooperated with an international boycott within the meaning of Code Section 999. (p) The Company has not filed, nor will the Company file prior to the Closing Date, a consent pursuant to Code Section 341(f)(2) or agreed to have Code Section 341(f)(2) apply to any disposition of a "subsection(f) asset" (as such term is defined in Code Section 341(f)(4)) owned by the Company. (q) No property of the Company is property that the Company is or will be required to treat as being owned by another Person pursuant to the provisions of Code Section 168(f)(8) (as in effect prior to amendment by the Tax Reform Act of 1986) or is "tax-exempt use property" within the meaning of Code Section 168. (r) Except as disclosed in Section 2.12 of the Disclosure Schedule, all elections and consents with respect to any Taxes (or computation thereof) affecting the Company as of the date hereof have been supplied to the Purchaser. After the date hereof, no election or consent with respect to any Taxes (or computation thereof) affecting the Company on a separate company return basis will be made without the written consent of Purchaser. (s) The Company has not been subject to taxation in any jurisdiction outside the United States of America. 2.13 Legal Proceedings. Except as disclosed in Section 2.13 of the Disclosure Schedule (with paragraph references corresponding to those set forth below): (a) there are no Actions or Proceedings pending or, to the Knowledge of Sellers, threatened against, relating to or affecting Sellers or the Company or any of their respective Assets and Properties; and (b) there are no Orders outstanding against the Company. 2.14 Compliance With Laws and Orders. Except as disclosed in Section 2.14 of the Disclosure Schedule, the Company is not, and has not received any notice that it is, in violation of or in default under, any Law or Order applicable to the Company or any of its respective Assets and Properties, other than immaterial violations and defaults. - 10 - 17 2.15 Benefit Plans; ERISA. (a) Section 2.15(a) of the Disclosure Schedule (i) contains a true and complete list and description of each of the Benefit Plans, and (ii) lists each other Plan maintained, established, sponsored or contributed to by an ERISA Affiliate, or any predecessor thereof, which, during the five-year period preceding the date of this Agreement, was at any time a Defined Benefit Plan. Except as disclosed in Section 2.15(a) of the Disclosure Schedule, no loan is outstanding between the Company and any employee. (b) The Company does not maintain and is not obligated to provide benefits under any life, medical or health plan (other than as an incidental benefit under a Qualified Plan) which provides benefits to retirees or other terminated employees other than benefit continuation rights under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended. (c) Except as set forth in Section 2.15(c) of the Disclosure Schedule, each Benefit Plan is maintained by Bowne and covers employees who are employed by the Company (or former employees or beneficiaries with respect to service with the Company), as well as other employees of Bowne and its subsidiaries; however, other than as specifically provided in this Agreement, the transactions contemplated by this Agreement will require no spin-off of assets and liabilities or other division or transfer of rights with respect to any such plan. (d) Neither the Company, any ERISA Affiliate nor any other corporation or organization controlled by or under common control with any of the foregoing within the meaning of Section 4001 of ERISA has at any time contributed to any "multiemployer plan", as that term is defined in Section 4001 of ERISA. (e) Each of the Benefit Plans is and has been operated and administered, in all material respects in substantial compliance with, and the Company has not received any claim or notice that any such Benefit Plan is not in compliance with, all applicable Laws and Orders, including the requirements of ERISA, the Code, the Age Discrimination in Employment Act, the Equal Pay Act and Title VII of the Civil Rights Act of 1964. Each Qualified Plan is qualified under Section 401(a) of the Code, and, if applicable, complies with the requirements of Section 401(k) of the Code. Each Benefit Plan which is intended to provide for the deferral of income, the reduction of salary or other compensation or to afford other Tax benefits complies with the requirements of the applicable provisions of the Code or other Laws required in order to provide such Tax benefits. - 11 - 18 (f) Neither Bowne nor the Company is in default in performing any of its contractual obligations under any of the Benefit Plans or any related trust agreement or insurance contract. All contributions and other payments required to be made by Bowne or, the Company to any Benefit Plan with respect to any period ending before or at or including the Closing Date have been made or reserves adequate for such contributions or other payments have been or will be set aside therefor and have been or will be reflected in the Financial Statements in accordance with GAAP. There are no material outstanding liabilities of any Benefit Plan other than liabilities for benefits to be paid to participants in such Benefit Plan and their beneficiaries in accordance with the terms of such Benefit Plan. (g) No event has occurred, and to the Knowledge of Sellers there exists no condition or set of circumstances in connection with any Benefit Plan, under which the Company, directly or indirectly (through any indemnification agreement or otherwise), could reasonably be expected to be subject to any material liability under Section 409 of ERISA, Section 502(i) of ERISA, Title IV of ERISA or Section 4975 of the Code. (h) No transaction contemplated by this Agreement will result in liability to the PBGC under Section 302(c)(ii), 4062, 4063, 4064 or 4069 of ERISA, or otherwise, with respect to the Company, Purchaser or any corporation or organization controlled by or under common control with any of the foregoing within the meaning of Section 4001 of ERISA, and no event or condition exists or has existed which could reasonably be expected to result in any such liability with respect to Purchaser, the Company or any such corporation or organization. No "reportable event" within the meaning of Section 4043 of ERISA has occurred with respect to any Defined Benefit Plan other than those for which the reporting requirement has been waived pursuant to the regulations promulgated under such Sections (except for a "reportable event" under Section 4043(c)(5) of ERISA). No Subject Defined Benefit Plan has incurred any accumulated funding deficiency whether or not waived. No filing has been made and no proceeding has been commenced for the complete or partial termination of, or withdrawal from, any Benefit Plan which is a Pension Benefit Plan. (i) No benefit under any Benefit Plan, including, without limitation, any severance or parachute payment plan or agreement, will be established or become accelerated, vested, funded or payable by reason of any transaction contemplated under this Agreement. (j) To the Knowledge of Sellers, there are no pending or threatened claims by or on behalf of any Benefit Plan (other than benefits payable in the ordinary course), by any Person covered thereby, or otherwise, which allege violations of Law - 12 - 19 which could reasonably be expected to result in material liability on the part of Purchaser, the Company or any fiduciary of any such Benefit Plan, nor is there any reasonable basis for such a claim. (k) No employer securities, employer real property or other employer property is included in the assets of any Benefit Plan where the holding or acquisition of such property would or is reasonably likely to constitute a "prohibited transaction." (l) The fair market value of the assets of each Subject Defined Benefit Plan, as determined as of the last day of the plan year of such plan which coincides with or first precedes the date of this Agreement, was not less than the present value of the projected benefit obligations under such plan at such date as established on the basis of the actuarial assumptions applicable under such Subject Defined Benefit Plan at said date and, to the Knowledge of Sellers, there have been no material changes in such values since said date. (m) Complete and correct copies of the following documents have been furnished to Purchaser prior to the execution of this Agreement: (i) the Benefit Plans and any predecessor plans referred to therein, any related trust agreements, and service provider agreements, insurance contracts or agreements with investment managers, including without limitation, all amendments thereto; (ii) current summary Plan descriptions of each Benefit Plan subject to ERISA, and any similar descriptions of all other Benefit Plans; (iii) the most recent Form 5500 and Schedules thereto for each Benefit Plan subject to ERISA reporting requirements; (iv) the most recent determination of the IRS with respect to the qualified status of each Qualified Plan; (v) the most recent accountings with respect to any Benefit Plan funded through a trust; (vi) the most recent actuarial report of the qualified actuary of any Subject Defined Benefit Plan or any other Benefit Plan with respect to which actuarial valuations are conducted; and (vii) all qualified domestic relations orders or other orders governing payments from any Benefit Plan. - 13 - 20 2.16 Real Property. (a) Section 2.16(a) of the Disclosure Schedule contains a true and correct list of each parcel of real property leased by the Company (as lessor or lessee). The Company does not own any real property. (b) The Company has a valid and subsisting leasehold estate in the real properties leased by it for the full term of the lease thereof. Each lease referred to in paragraph (a) above is a legal, valid and binding agreement, enforceable in accordance with its terms, of the Company and to the Knowledge of Sellers, of each other Person that is a party thereto, and except as set forth in Section 2.16(b) of the Disclosure Schedule, there is no, and the Company has not received notice of any, default (or any condition or event which, after notice or lapse of time or both, would constitute a default) thereunder. 2.17 Tangible Personal Property. The Company is in possession of and has good title to, or has valid leasehold interests in or valid rights under Contract to use, all tangible personal property used in the conduct of their business as presently conducted, including all tangible personal property reflected on the balance sheet included in the Unaudited Financial Statements and tangible personal property acquired since the Unaudited Financial Statement Date other than property disposed of since such date in the ordinary course of business consistent with past practice. All such tangible personal property is free and clear of all Liens, other than Permitted Liens and Liens disclosed in Section 2.17 of the Disclosure Schedule, and is in good working order and condition, ordinary wear and tear excepted. 2.18 Intellectual Property. (a) Section 2.18 of the Disclosure Schedule sets forth a complete and accurate list of (i) all patents, including all reissues, reexaminations, continuations, continuations-in-part and divisions thereof, all trademarks, service marks, and designs, and all copyrights that, in the case of each of the foregoing items described in this clause (i), have been issued to or registered by the Company; (ii) all pending patent applications and all pending trademark, service mark and design applications and all pending applications for the registration of copyrights in each case filed by or on behalf of the Company; and (iii) all material unregistered trademarks, service marks, trade names, service names, design rights, topography rights, logos and assumed names which are owned by the Company. Section 2.18 of the Disclosure Schedule also identifies each material license or similar material agreement entered into by the Company with respect to any Intellectual Property. (b) The Company, to the extent so identified on Section 2.18 of the Disclosure Schedule: (i) is the sole and exclusive owner of the Intellectual Property described in clause - 14 - 21 (i) of Section 2.18(a) and listed in Section 2.18 of the Disclosure Schedule; and (ii) is listed in the records of the appropriate agency as the sole and exclusive owner of record for each registration and grant listed in Section 2.18 of the Disclosure Schedule. Sellers are not aware, after due inquiry, of any registration and maintenance fees that have become due and payable to any governmental agency in respect of any material Intellectual Property owned by the Company and for which a patent or registration has been issued, that have not been paid, nor are Sellers aware of any act that has been done or omitted to be done by the Company or any licensee, distributor, sublicensee, or subdistributor thereof, to impair or dedicate to the public or entitle any governmental authority to cancel, forfeit, modify or hold abandoned any of such Intellectual Property so owned by the Company and listed in Section 2.18 of the Disclosure Schedule, and to the Knowledge of Sellers, all such Intellectual Property so owned and listed is valid and enforceable. (c) Except as set forth in Section 2.18(a) of the Disclosure Schedule: (i) there are no pending or, to Sellers' knowledge, threatened suits, claims, oppositions or other challenges by any person against the ownership by the Company of or the use by the Company of any of the Intellectual Property owned or used by it; (ii) the Company is in material compliance with the terms of all licenses, leases or other agreements under which the right to use any of the Intellectual Property listed in Section 2.18 of the Disclosure Schedule arose or pursuant to which the Company licenses or otherwise distributes such Intellectual Property to any third party; and (iii) to the Knowledge of Sellers, no third party has asserted that the use of any Intellectual Property by the Company in connection with the conduct of the business of the Company as currently conducted infringes upon or otherwise violate any right of such third party. (d) The Company owns, or is licensed or otherwise has the right to use, all Intellectual Property necessary for it to conduct its businesses as currently conducted, free and clear of all Liens other than Permitted Liens, including without limitation (i) the data bases and computer programs, and (ii) any user manuals, technical manuals, or other documentation, or any advertisements or other materials, related to such Intellectual Property, which are offered or made available to customers by the Company. 2.19 Computer Programs. (a) Section 2.19 of the Disclosure Schedule lists all of the material computer programs and databases which are owned, licensed, leased or otherwise used by the Company in connection with the operation of its business as currently conducted (other than those that are "off-the-shelf" or otherwise readily commercially available). - 15 - 22 (b) Except as disclosed in Section 2.19(a) of the Disclosure Schedule, the data bases and computer programs used in or necessary for the conduct of the business of the Company as currently conducted (including without limitation the data, articles and other content included therein) are (i) owned or licensed by the Company, or (ii) currently in the public domain or otherwise available to the Company without the approval or consent of any third party, or (iii) included in such database or computer program or system pursuant to rights granted to the Company so including the same pursuant to a written license or lease or other consent from a third party. (c) Except as disclosed in Section 2.19(b) of the Disclosure Schedule, the Company, with respect to all data bases and computer programs owned by it, has taken or caused to be taken commercially reasonable steps to obtain and retain valid and enforceable Intellectual Property rights therein; provided, however, that patents and registrations of trademarks, service marks, designs, copyrights or other Intellectual Property or computer programs issued or applied for are limited to those listed in Section 2.18 of the Disclosure Schedule. In the ordinary course of its business, it is the Company's practice to obtain non-disclosure agreements from its employees as a condition to employment. Such agreements are intended to protect the secrecy and confidentiality of all trade secrets, know-how and other confidential information material to the conduct of the business of the Company. (d) The material computer programs listed in Section 2.19(b) of the Disclosure Statement as owned by the Company (i) function in all material respects reasonably in accordance with the specifications therefor published by the Company; and (ii) provide in all material respects all of the functionality, features and content described in any user manuals, technical manuals, and any other documentation related thereto published by the Company or in any advertisements or other materials therefor made available to customers by the Company, subject, in the case of clause (i) and (ii) of this Section 2.19(d), to errors and bugs that arise and are corrected in the normal course of the Company's business. (e) In the ordinary course of its business, the Company uses "anti-virus" software that is intended to identify disabling or destructive software programs or processes. 2.20 Contracts. (a) Section 2.20(a) of the Disclosure Schedule (with paragraph references corresponding to those set forth below) contains a true and complete list of each of the following Contracts or other arrangements (true and complete copies or, if none, reasonably complete and accurate written descriptions of which, together with all amendments and supplements thereto, have been delivered to Purchaser prior to - 16 - 23 the execution of this Agreement), to which the Company is a party or by which any of its Assets and Properties is bound: (i) (A) all Contracts (excluding Benefit Plans) providing for a commitment of employment or consultation services for a specified or unspecified term; and (B) any written representations, commitments, promises, or other enforceable obligations (excluding Benefit Plans and any such Contracts referred to in clause (A)) involving an obligation of the Company to make payments in any year, other than with respect to salary or incentive compensation payments in the ordinary course of business, to any employee exceeding $20,000 or any group of employees exceeding $50,000 in the aggregate; (ii) all Contracts with any Person containing any provision or covenant prohibiting or limiting the ability of the Company to engage in any business activity or compete with any Person or, except as provided in Section 4.11, prohibiting or limiting the ability of any Person to compete with the Company; (iii) all partnership, joint venture, shareholders' or other similar Contracts with any Person; (iv) all Contracts relating to Indebtedness of the Company in excess of $25,000; (v) all (A) Contracts with distributors, or content or information providers providing for annual payments in excess of $25,000, and (B) all Contracts with customers of the Company providing for annual payments in excess of $25,000 (excepting for purposes of this clause (v)(B) immaterial and inadvertent omissions); (vi) all Contracts relating to (A) the future disposition or acquisition of any Assets and Properties, other than dispositions or acquisitions in the ordinary course of business consistent with past practice, and (B) any merger or other business combination; (vii) all Contracts between or among the Company, on the one hand, and a Seller, any officer, director or Affiliate (other than the Company) of either Seller, on the other hand; (viii) all collective bargaining or similar labor Contracts; and (ix) all other Contracts (other than Benefit Plans, leases listed in Section 2.16(a) of the Disclosure Schedule and insurance policies listed in Section 2.22 of the - 17 - 24 Disclosure Schedule) that (A) involve the payment or potential payment, pursuant to the terms of any such Contract, by or to the Company of more than $25,000 annually and (B) cannot be terminated within thirty (30) days after giving notice of termination without resulting in any material cost or penalty to the Company. (b) Except as would not, individually or in the aggregate, have a material adverse effect on the Business or Condition of the Company, each Contract required to be disclosed in Section 2.20(a) of the Disclosure Schedule is in full force and effect and constitutes a legal, valid and binding agreement, enforceable in accordance with its terms, of the Company, and to the Knowledge of Sellers, each other party thereto; and except as disclosed in Section 2.20(b) of the Disclosure Schedule neither the Company nor, to the Knowledge of Sellers, any other party to such Contract is, or has received notice that it is, in violation or breach of or default under any such Contract (or with notice or lapse of time or both, would be in violation or breach of or default under any such Contract) in any material respect. 2.21 Licenses. Section 2.21 of the Disclosure Schedule contains a true and complete list of all Licenses used in and material to the business or operations of the Company (and all pending applications for any such Licenses). Except as disclosed in Section 2.21 of the Disclosure Schedule: (i) the Company owns or validly holds all Licenses that are material to its business or operations; (ii) each License listed in Section 2.21 of the Disclosure Schedule is in full force and effect; and (iii) the Company is not, nor has received any notice that it is, in default (or with the giving of notice or lapse of time or both, would be in default) under any such License. 2.22 Insurance. Section 2.22 of the Disclosure Schedule contains a list of all insurance policies currently in effect that insure the business, operations or employees of the Company or affect or relate to the ownership, use or operation of any of the Assets and Properties of the Company and that (i) have been issued to the Company or (ii) have been issued to any Person (other than the Company) for the benefit of the Company. 2.23 Affiliate Transactions. Except as disclosed in Section 2.20(a)(vii) or Section 2.23(a) of the Disclosure Schedule, (i) there are no intercompany Liabilities between the Company, on the one hand, and a Seller, any officer, director or Affiliate (other than the Company) of a Seller, on the other, (ii) neither Sellers nor any such officer, director or Affiliate - 18 - 25 provides or causes to be provided any assets, services or facilities to the Company and (iii) the Company does not provide or cause to be provided any assets, services or facilities to either Seller or any such officer, director or Affiliate, except, in the case of clause (ii), the provision of assets, services or facilities in the ordinary course of business on an arm's length basis consistent with past practice. Except as disclosed in Section 2.23(b) of the Disclosure Schedule, each of the Liabilities and transactions listed in Section 2.23(a) of the Disclosure Schedule was incurred or engaged in, as the case may be, on an arm's-length basis. Except as disclosed in Section 2.23(c) of the Disclosure Schedule, since the Year End Financial Statement Date, all settlements of intercompany Liabilities between the Company, on the one hand, and a Seller or any such officer, director or Affiliate, on the other, have been made, and all allocations of intercompany expenses have been applied, in the ordinary course of business consistent with past practice. 2.24 Employees; Labor Relations. (a) Section 2.24 of the Disclosure Schedule lists the year end annual base salary of each officer and employee of the Company. Sellers have not received any information that would lead it to believe that a material number of such persons will or may cease to be employees, or will refuse offers of employment from Purchaser, because of the consummation of the transactions contemplated by this Agreement. (b) Except as disclosed in Section 2.24(b) of the Disclosure Schedule, (i) no employee of the Company is presently a member of a collective bargaining unit and, to the Knowledge of Sellers, there are no threatened or contemplated attempts to organize for collective bargaining purposes any of the employees of the Company, and (ii) no unfair labor practice complaint or sex, age, race or other discrimination claim has been brought during the last five (5) years against the Company before the National Labor Relations Board, the Equal Employment Opportunity Commission or any other Governmental or Regulatory Authority. Since January 1, 1991, there has been no work stoppage, strike or other concerted action by employees of the Company. During that period, the Company have complied in all material respects with all applicable Laws relating to the employment of labor, including, without limitation those relating to wages, hours and collective bargaining. (c) Except as disclosed in Section 2.24(c) of the Disclosure Schedule, as of the date hereof, the Company has not had a layoff of any of its employees which constitutes a "plant closing" or "mass layoff" under the Workers' Adjustment and Retraining Notification Act of 1988, as amended. 2.25 Environmental Matters. The Company is not in material violation of any federal, state and local Environmental - 19 - 26 Laws (as defined in Section 13.01) applicable to it or its properties, or any material limitations, restrictions, conditions, standards, obligations or timetables contained in any Environmental Law or any regulation, code, plan, order, decree, notice or demand letter issued, entered, promulgated or approved thereunder. No notice or action alleging such violation is pending or, to the Knowledge of Sellers, threatened, and no past or present condition or practice of the businesses conducted by the Company would prevent continued compliance with applicable permits or give rise to any common law or statutory liability or otherwise form the basis of any claim, action or proceeding with respect to the Company involving any pollutant or hazardous or toxic material or waste. The Company has no liability, present and past, under CERCLA, including, without limitation, as the result of its ownership or operation of any "facility" as defined in CERCLA, or its arrangement for disposal, treatment or transport of "hazardous substances," also as defined in CERCLA. 2.26 Substantial Customers and Suppliers. To the Knowledge of Sellers, none of the Company's twenty (20) largest customers or suppliers (on the basis of a revenues for goods sold and services provided and the cost of goods or services purchased for the eleven (11) months ended September 30, 1996) has, during the 90 days prior to the date of this Agreement, threatened to cease or materially reduce such purchases, use, sales or provision of services after the date hereof. 2.27 Brokers. All negotiations relative to this Agreement and the transactions contemplated hereby have been carried out by Sellers directly with Purchaser without the intervention of any Person on behalf of Sellers in such manner as to give rise to any valid claim by any Person against Purchaser or the Company for a finder's fee, brokerage commission or similar payment. 2.28 Schedules. Disclosure of any fact or item in any Section of the Disclosure Schedule hereto referenced by a particular paragraph or section in this Agreement shall, should the existence of the fact or item or its contents be relevant to any other paragraph or section, be deemed to be disclosed with respect to that other paragraph or section whether or not a specific cross reference appears. 2.29 No Implied Representation. Sellers are not making any representation or warranty whatsoever, express or implied, except those representations and warranties of Sellers contained in this Agreement or in any Section of the Disclosure Schedule hereto and Purchaser acknowledges and agrees that it has not relied on or been induced to enter into this Agreement by any representation or warranty other than those expressly set forth in this Agreement. - 20 - 27 ARTICLE III REPRESENTATIONS AND WARRANTIES OF PURCHASER Purchaser hereby represents and warrants to Sellers as follows: 3.01 Organization. Purchaser is a corporation duly organized, validly existing and in good standing under the Laws of the State of Michigan. 3.02 Authority. Purchaser has full corporate power and authority to execute and deliver this Agreement and the Operative Agreements to which it is a party, to perform its obligations hereunder and thereunder and to consummate the transactions contemplated hereby and thereby. The execution and delivery by Purchaser of this Agreement and the Operative Agreements to which it is a party, and the performance by Purchaser of its obligations hereunder and thereunder, have been duly and validly authorized by the Board of Directors of Purchaser, no other corporate action on the part of Purchaser or its stockholders being necessary. This Agreement has been duly and validly executed and delivered by Purchaser and constitutes, and upon the execution and delivery by Purchaser of the Operative Agreements to which it is a party, such Operative Agreements will constitute, (assuming due authorization, execution and delivery by Sellers and the other parties to any Operative Agreements) legal, valid and binding obligations of Purchaser enforceable against Purchaser in accordance with their terms, except to the extent limited by bankruptcy insolvency, reorganization, moratorium or other laws relating to or affecting creditors' rights generally and by general equity principles, regardless of whether such enforceability is considered in a proceeding in equity or at law. 3.03 No Conflicts. The execution and delivery by Purchaser of this Agreement do not, and the execution and delivery by Purchaser of the Operative Agreements to which it is a party, the performance by Purchaser of its obligations under this Agreement and such Operative Agreements and the consummation of the transactions contemplated hereby and thereby will not: (a) conflict with or result in a violation or breach of any of the terms, conditions or provisions of the articles of incorporation or by-laws (or other comparable corporate charter document) of Purchaser; (b) subject to obtaining the consents, approvals and actions, making the filings and giving the notices disclosed in Schedule 3.04 hereto, conflict with or result in a violation or breach of any term or provision of any Law or Order applicable to Purchaser or any of its Assets and Properties; or - 21 - 28 (c) except as disclosed in Schedule 3.03 hereto, (i) conflict with or result in a violation or breach of, (ii) constitute (with or without notice or lapse of time or both) a default under, (iii) require Purchaser to obtain any consent, approval or action of, make any filing with or give any notice to any Person as a result or under the terms of, or (iv) result in the creation or imposition of any Lien upon Purchaser or any of its Assets or Properties under, any material Contract or License to which Purchaser is a party or by which any of its material Assets and Properties is bound. 3.04 Governmental Approvals and Filings. Except as disclosed in Schedule 3.04 hereto, no consent, approval or action of, filing with or notice to any Governmental or Regulatory Authority on the part of Purchaser is required in connection with the execution, delivery and performance of this Agreement or the Operative Agreements to which it is a party or the consummation of the transactions contemplated hereby or thereby. 3.05 Legal Proceedings. There are no Actions or Proceedings pending or, to the knowledge of Purchaser, threatened against, relating to or affecting Purchaser or any of its Assets and Properties which could reasonably be expected to result in the issuance of an Order restraining, enjoining or otherwise prohibiting or making illegal the consummation of any of the transactions contemplated by this Agreement or any of the Operative Agreements. 3.06 Purchase for Investment. The Shares will be acquired by Purchaser (or, if applicable, its assignee pursuant to Section 14.09(b)(i)) for its own account for the purpose of investment, it being understood that the right to dispose of such Shares shall be entirely within the discretion of Purchaser (or such assignee, as the case may be). Purchaser (or such assignee, as the case may be) will refrain from transferring or otherwise disposing of any of the Shares, or any interest therein, in such manner as to cause Seller to be in violation of the registration requirements of the Securities Act of 1933, as amended, or applicable state securities or blue sky laws. 3.07 Brokers. All negotiations relative to this Agreement and the transactions contemplated hereby have been carried out by Purchaser directly with Sellers without the intervention of any Person on behalf of Purchaser in such manner as to give rise to any valid claim by any Person against Sellers, the Company or any Subsidiary for a finder's fee, brokerage commission or similar payment. - 22 - 29 ARTICLE IV COVENANTS OF SELLERS 4.01 Regulatory and Other Approvals. Sellers will, and will cause the Company to, as promptly as practicable (a) use its best efforts to obtain all consents, approvals or actions of, make all filings with and give all notices to Governmental or Regulatory Authorities or any other Person required of Sellers or the Company to consummate the transactions contemplated hereby and by the Operative Agreements, including without limitation those described in Sections 2.06 and 2.07 of the Disclosure Schedule, (b) provide such other information and communications to such Governmental or Regulatory Authorities or other Persons as Purchaser or such Governmental or Regulatory Authorities or other Persons may reasonably request in connection therewith and (c) cooperate with Purchaser in connection with the performance of its obligations under Sections 5.01 and 5.02. Sellers will provide prompt notification to Purchaser when any such consent, approval, action, filing or notice referred to in clause (a) above is obtained, taken, made or given, as applicable, and will advise Purchaser of any material communications (and, unless precluded by Law, provide copies of any such communications that are in writing) with any Governmental or Regulatory Authority or other Person regarding any of the transactions contemplated by this Agreement or any of the Operative Agreements. 4.02 HSR Filings. In addition to and not in limitation of Sellers' covenants contained in Section 4.01, Sellers will (a) take promptly all actions necessary to make the filings required of Sellers or their Affiliates under the HSR Act, (b) comply at the earliest practicable date with any request for additional information received by Sellers or their Affiliates from the Federal Trade Commission or the Antitrust Division of the Department of Justice pursuant to the HSR Act and (c) cooperate with Purchaser in connection with Purchaser's filing under the HSR Act and in connection with resolving any investigation or other inquiry concerning the transactions contemplated by this Agreement commenced by either the Federal Trade Commission or the Antitrust Division of the Department of Justice or state attorneys general. 4.03 Investigation by Purchaser. During the period commencing on the date hereof and ending on the earlier of the Closing Date or the termination of this Agreement in accordance with Section 12 hereof, Sellers will, and will cause the Company to, (a) provide Purchaser and its officers, directors, employees, agents, counsel, accountants, financial advisors, consultants and other representatives (together "Representatives") with reasonable access, upon reasonable prior notice and during normal business hours, to all officers, employees, agents and accountants of the Company and its Assets and Properties and - 23 - 30 Books and Records to the extent that doing so does not materially disrupt or interfere with the operations of the Company, and (b) within a reasonable period of time, furnish Purchaser and such other Persons with all such information and data (including without limitation copies of Contracts, Benefit Plans and other Books and Records) concerning the business and operations of the Company as Purchaser or any of such other Persons reasonably may request in connection with such investigation. All requests for information shall be submitted only to Robert Patterson or to Simpson Thacher & Bartlett. Purchaser will not initiate or maintain contact with any employee of Sellers or the Company without Sellers' prior consent, such consent not to be unreasonably withheld or delayed. Prior to the Closing, Sellers will also provide Purchaser with a complete and correct list containing the names of each bank in which the Company has an account or safe deposit or lock box, the account or box number, as the case may be, and the name of every person authorized to draw thereon or having access thereto. 4.04 No Solicitations. Sellers will not take, nor will they permit the Company or any Affiliate of Sellers (or authorize or permit any investment banker, financial advisor, attorney, accountant or other Person retained by or acting for or on behalf of Sellers, the Company or any such Affiliate) to take, directly or indirectly, any action to solicit, encourage, assist or otherwise facilitate (including by furnishing confidential information with respect to the Company or permitting access to the Assets and Properties and Books and Records of the Company) any offer or inquiry from any Person concerning an Acquisition Proposal or participate in any discussions or negotiations regarding an Acquisition Proposal. If Sellers, the Company or any such Affiliate (or any such Person acting for or on their behalf) receives from any Person any offer, inquiry or informational request referred to above, Sellers will promptly advise such Person, by written notice, of the terms of this Section 4.04 and will promptly, orally and in writing, advise Purchaser of such offer, inquiry or request and deliver a copy of such notice to Purchaser. 4.05 Conduct of Business. During the period commencing on the date hereof and ending on the earlier of the Closing Date or the termination of this Agreement in accordance with Section 12 hereof, Sellers will cause the Company to conduct business only in the ordinary course consistent with past practice. Without limiting the generality of the foregoing, except as permitted, required or specifically contemplated by this Agreement or as otherwise consented to or approved in writing by Purchaser, Sellers will: (a) cause the Company to use commercially reasonable efforts to (i) preserve intact the present business organization and reputation of the Company, (ii) keep available (subject to - 24 - 31 dismissals and retirements in the ordinary course of business consistent with past practice) the services of the present officers, employees and consultants of the Company, (iii) maintain the Assets and Properties of the Company in good working order and condition, ordinary wear and tear excepted, (iv) maintain the good will of customers, suppliers, lenders and other Persons to whom the Company sells goods or provides services or with whom the Company otherwise has significant business relationships and (v) continue all current sales, marketing and promotional activities relating to the business and operations of the Company; (b) except to the extent required by applicable Law, (i) cause the Books and Records to be maintained in the usual, regular and ordinary manner, (ii) not permit any material change in (A) any pricing, investment, accounting, financial reporting, inventory, credit, allowance or Tax practice or policy of the Company, or (B) any method of calculating any bad debt, contingency or other reserve of the Company for accounting, financial reporting or Tax purposes and (iii) not permit any change in the fiscal year of the Company; (c) (i) use, and will cause the Company to use, commercially reasonable efforts to maintain in full force and effect until the Closing substantially the same levels of coverage as the insurance afforded under the Contracts listed in Section 2.21 of the Disclosure Schedule; and (d) cause the Company to comply, in all material respects, with all Laws and Orders applicable to the business and operations of the Company, and promptly following receipt thereof to give Purchaser copies of any notice received from any Governmental or Regulatory Authority or other Person alleging any violation of any such Law or Order. 4.06 Financial Statements and Reports; Filings. As promptly as practicable, Sellers will deliver to Purchaser true and complete copies of all financial statements, reports and analyses that are prepared or received by Sellers or the Company relating to the business or operations of the Company in the ordinary course of business. 4.07 Employee Matters. Except as may be required by Law or any Benefit Plans existing on the date hereof, during the period commencing on the date hereof an ending on the earlier of the closing Date or the termination of this Agreement, Sellers will refrain, and will cause the Company to refrain, from directly or indirectly: (a) making any increase in the salary, wages or other compensation of any officer, employee or consultant of the Company whose annual salary is or, after giving effect to such - 25 - 32 change, would be $50,000 or more, other than any increases in the ordinary course of business and consistent with past practice; or (b) adopting, entering into or becoming bound by any Benefit Plan, employment-related Contract or collective bargaining agreement, or amending, modifying or terminating (partially or completely) any Benefit Plan, employment-related Contract or collective bargaining agreement, except to the extent required by applicable Law. Sellers will cause the Company to administer each Benefit Plan, or cause the same to be so administered, in all material respects in accordance with the applicable provisions of the Code, ERISA and all other applicable Laws. Sellers will promptly notify Purchaser in writing of each receipt by Sellers or the Company (and furnish Purchaser with copies) of any notice of investigation or administrative proceeding by the IRS, Department of Labor, PBGC or other Person involving any Benefit Plan. 4.08 Certain Restrictions. During the period commencing on the date hereof and ending on the earlier of the Closing Date or the termination of this Agreement in accordance with Section 12 hereof, except as permitted, required or specifically contemplated by this Agreement or as otherwise consented to or approved in writing by Purchaser, Sellers will cause the Company to refrain from: (a) amending its certificate of incorporation or by-laws or taking any action with respect to any such amendment or any recapitalization, reorganization, liquidation or dissolution; (b) authorizing, issuing, selling or otherwise disposing of any shares of capital stock of or any Option with respect to the Company, or modifying or amending any right of any holder of outstanding shares of capital stock of or Option with respect to the Company; (c) declaring, setting aside or paying any dividend or other distribution in respect of the capital stock of the Company, or directly or indirectly redeeming, purchasing or otherwise acquiring any capital stock of or any Option with respect to the Company; (d) acquiring or disposing of, or incurring any Lien (other than a Permitted Lien) on, any Assets and Properties in excess of $10,000 in value in the aggregate, other than in the ordinary course of business consistent with past practice; (e) entering into, amending, modifying, terminating (partially or completely), granting any waiver under or giving any consent with respect to (A) any Contract that would, if in - 26 - 33 existence on the date of this Agreement, be required to be disclosed in the Disclosure Schedule pursuant to Section 2.19(a) or (B) any material License, other than, in each case, immaterial amendments, modifications, waivers or consents. (f) (i) incurring Indebtedness in an aggregate principal amount exceeding $25,000 (net of any amounts of Indebtedness discharged during such period), or (ii) voluntarily purchasing, cancelling, prepaying or otherwise providing for a complete or partial discharge in advance of a scheduled payment date with respect to, or waiving any right of the Company under, any Indebtedness of or owing to the Company (other than indebtedness due and owing to Bowne); (g) engaging with any Person in any merger or other business combination; (h) making capital expenditures or commitments for additions to property, plant or equipment constituting capital assets in an aggregate amount exceeding $100,000; (i) making any change in the lines of business in which the Company participates or is engaged; (j) writing off or writing down any of its Assets and Properties outside the ordinary course of business consistent with past practice; or (k) entering into any Contract to do or engage in any of the foregoing. 4.09 Affiliate Transactions. Except as set forth in Section 4.09 of the Disclosure Schedule, immediately prior to the Closing, all Indebtedness and other amounts owing under Contracts between a Seller, any officer, director or Affiliate (other than the Company) of a Seller, on the one hand, and the Company, on the other, will be cancelled, and Sellers will terminate and will cause any such officer, director or Affiliate to terminate each Contract with the Company. Prior to the Closing, the Company will not enter into any Contract or amend or modify any existing Contract, and will not engage in any transaction outside the ordinary course of business consistent with past practice or not on an arm's-length basis (other than pursuant to Contracts disclosed pursuant to Section 2.19(a)(vii) of the Disclosure Schedule), with a Seller or any such officer, director or Affiliate. The parties acknowledge that prior to the Closing, Bowne may cause the Company to pay to Bowne all cash held by the Company (whether by way of dividend, payment of intercompany advances or otherwise). 4.10 Books and Records. On the Closing Date, Sellers will deliver or make available to Purchaser at the offices of the - 27 - 34 Company all of the Books and Records, and if at any time after the Closing Sellers discover in their possession or under their control any other Books and Records, they will forthwith deliver such Books and Records to Purchaser. 4.11 Noncompetition. (a) Bowne will, for a period of three (3) years from the Closing Date, refrain from, either alone or in conjunction with any other Person, or directly or indirectly through its present or future Affiliates: (i) employing, engaging or seeking to employ or engage any Person who within the prior twelve (12) months had been an officer or employee of the Company (other than Persons who have theretofore been terminated by the Company or who have voluntarily left the employ of the Company prior to having been contacted in any way by Sellers or any Affiliate of Sellers; (ii) causing or attempting to cause (A) any client, customer or supplier of the Company to terminate or materially reduce its business with the Company or (B) any officer, employee or consultant of the Company to resign or sever a relationship with the Company; (iii) disclosing (unless compelled by judicial or administrative process) or using any confidential or secret information relating to the Company or any of its clients, customers or suppliers; or (iv) participating or engaging in (other than through the ownership of five percent (5%) or less of any class of securities registered under the Securities Exchange Act of 1934, as amended), or otherwise lending assistance (financial or otherwise) to any Person participating or engaged in, any Competitive Business in the United States. For purposes of this Section 4.11, "Competitive Business" shall mean the business of developing, selling and supporting computer based analytical tools for institutional equity analysts and investors that incorporate electronic delivery of information on company fundamental data, earnings, stock prices and industry and economic statistics. (b) The parties hereto recognize that the Laws and public policies of the various states of the United States may differ as to the validity and enforceability of covenants similar to those set forth in this Section . It is the intention of the parties that the provisions of this Section be enforced to the fullest extent permissible under the Laws and policies of each jurisdiction in which enforcement may be sought, and that the unenforceability (or the modification to conform to such Laws or policies) of any provisions of this Section shall not render unenforceable, or impair, the remainder of the provisions of this - 28 - 35 Section. Accordingly, if any provision of this Section shall be determined to be invalid or unenforceable, such invalidity or unenforceability shall be deemed to apply only with respect to the operation of such provision in the particular jurisdiction in which such determination is made and not with respect to any other provision or jurisdiction. (c) The parties hereto acknowledge and agree that any remedy at Law for any breach of the provisions of this Section would be inadequate, and each Seller hereby consents to the granting by any court of an injunction or other equitable relief, without the necessity of actual monetary loss being proved, in order that the breach or threatened breach of such provisions may be effectively restrained. 4.12 Appeal Assets. Prior to the Closing Date, Sellers shall cause the Company to transfer to Bowne the Appeal Assets and all Liabilities relating thereto, and shall provide Purchaser with a copy of the agreement pursuant to which such transfer shall occur. 4.13 Fulfillment of Conditions. Sellers will execute and deliver at the Closing each Operative Agreement that Sellers are required hereby to execute and deliver as a condition to the Closing, will take all commercially reasonable steps necessary or desirable and proceed diligently and in good faith to satisfy each other condition to the obligations of Purchaser contained in this Agreement and will not, and will not permit the Company to, take or fail to take any action that could reasonably be expected to result in the nonfulfillment of any such condition. ARTICLE V COVENANTS OF PURCHASER 5.01 Regulatory and Other Approvals. Purchaser will as promptly as practicable (a) use its best efforts to obtain all consents, approvals or actions of, make all filings with and give all notices to Governmental or Regulatory Authorities or any other Person required of Purchaser to consummate the transactions contemplated hereby and by the Operative Agreements, including without limitation those described in Schedules 3.03 and 3.04 hereto, (b) provide such other information and communications to such Governmental or Regulatory Authorities or other Persons as Sellers or such Governmental or Regulatory Authorities or other Persons may reasonably request in connection therewith and (c) cooperate with Sellers and the Company in connection with the performance of their obligations under Sections 4.01 and 4.02. Purchaser will provide prompt notification to Seller when any such consent, approval, action, filing or notice referred to in clause (a) above is obtained, taken, made or given, as - 29 - 36 applicable, and will advise Sellers of any material communications (and, unless precluded by Law, provide copies of any such communications that are in writing) with any Governmental or Regulatory Authority or other Person regarding any of the transactions contemplated by this Agreement or any of the Operative Agreements. 5.02 HSR Filings. In addition to and without limiting Purchaser's covenants contained in Section 5.01, Purchaser will (i) take promptly all actions necessary to make the filings required of Purchaser or its Affiliates under the HSR Act, (ii) comply at the earliest practicable date with any request for additional information received by Purchaser or its Affiliates from the Federal Trade Commission or the Antitrust Division of the Department of Justice pursuant to the HSR Act and (iii) cooperate with Sellers in connection with Sellers' filing under the HSR Act and in connection with resolving any investigation or other regulatory inquiry concerning the transactions contemplated by this Agreement commenced by either the Federal Trade Commission or the Antitrust Division of the Department of Justice or state attorneys general. 5.03 Fulfillment of Conditions. Purchaser will execute and deliver at the Closing each Operative Agreement that Purchaser is hereby required to execute and deliver as a condition to the Closing, will take all commercially reasonable steps necessary or desirable and proceed diligently and in good faith to satisfy each other condition to the obligations of Sellers contained in this Agreement and will not take or fail to take any action that could reasonably be expected to result in the nonfulfillment of any such condition. ARTICLE VI CONDITIONS TO OBLIGATIONS OF PURCHASER The obligations of Purchaser hereunder to purchase the Shares are subject to the fulfillment, at or before the Closing, of each of the following conditions (all or any of which may be waived in whole or in part by Purchaser in its sole discretion): 6.01 Representations and Warranties. Each of the representations and warranties of Sellers set forth in this Agreement that are qualified as to materiality shall be true and correct, and each of the representations and warranties of Sellers set forth in this Agreement that are not so qualified shall be true and correct in all material respects, in each case as of the date of this Agreement and (except to the extent such representations and warranties speak as of an earlier date) as of the Closing Date as though made on and as of the Closing Date. - 30 - 37 6.02 Performance. Sellers shall have performed and complied with, in all material respects, each agreement, covenant and obligation required by this Agreement to be so performed or complied with by Sellers at or before the Closing. 6.03 Officers' Certificates. Bowne shall have delivered to Purchaser a certificate, dated the Closing Date and executed in the name and on behalf of Bowne by the Chairman of the Board, the President or any Executive or Senior Vice President of Bowne, substantially in the form and to the effect of Exhibit A hereto, and a certificate, dated the Closing Date and executed by the Secretary or any Assistant Secretary of Bowne, substantially in the form and to the effect of Exhibit B hereto. 6.04 Orders and Laws. There shall not be in effect on the Closing Date any Order or Law restraining, enjoining or otherwise prohibiting or making illegal the consummation of any of the transactions contemplated by this Agreement or any of the Operative Agreements or which could reasonably be expected to otherwise result in a material diminution of the benefits of the transactions contemplated by this Agreement or any of the Operative Agreements to Purchaser, and there shall not be pending or threatened on the Closing Date any Action or Proceeding in, before or by any Governmental or Regulatory Authority which could reasonably be expected to result in the issuance of any such Order or the enactment, promulgation or deemed applicability to Purchaser, the Company or the transactions contemplated by this Agreement or any of the Operative Agreements of any such Law. 6.05 Regulatory Consents and Approvals. All consents, approvals and actions of, filings with and notices to any Governmental or Regulatory Authority necessary to permit Purchaser and Sellers to perform their obligations under this Agreement and the Operative Agreements and to consummate the transactions contemplated hereby and thereby (a) shall have been duly obtained, made or given, (b) shall not be subject to the satisfaction of any condition that has not been satisfied or waived and (c) shall be in full force and effect, and all terminations or expirations of waiting periods imposed by any Governmental or Regulatory Authority necessary for the consummation of the transactions contemplated by this Agreement and the Operative Agreements, including under the HSR Act, shall have occurred. 6.06 Third Party Consents. The consents (or in lieu thereof waivers) listed in Section 6.06 of the Disclosure Schedule, (a) shall have been obtained, (b) shall be in form and substance reasonably satisfactory to Purchaser, (c) shall not be subject to the satisfaction of any condition that has not been satisfied or waived and (d) shall be in full force and effect, except where the failure to obtain any such consent (or in lieu - 31 - 38 thereof waiver) could not reasonably be expected, individually or in the aggregate with other such failures, to materially adversely affect Purchaser or the Business or Condition of the Company or otherwise result in a material diminution of the benefits of the transactions contemplated by this Agreement and the Operative Agreements to Purchaser. 6.07 Opinion of Counsel. Purchaser shall have received (a) the opinion of Simpson Thacher & Bartlett, counsel to Bowne and the Company, dated the Closing Date, substantially in the form and to the effect of Exhibit C-1 hereto and (b) the opinion of counsel to Patterson and the Trust, dated the Closing Date, substantially in the form and to the effect of Exhibit C-2 hereto. 6.08 Resignations of Directors and Officers. Each member of the board of directors of the Company other than Mr. Robert G. Patterson shall have tendered, effective at the Closing, their resignations as such directors. 6.09 Employment Agreements. Patterson shall have executed and delivered to Purchaser an employment agreement substantially in the form of Exhibit D hereto. 6.10 Financial Statements. Sellers shall have delivered to Purchaser true and complete copies of the unaudited balance sheets of the Company as of October 31, 1994, 1995, and 1996, and the related unaudited statements of operations, stockholders equity and cash flows for the fiscal years then ended,in each case prepared in accordance with GAAP in all respects (including, with respect to fiscal year 1996 only, notes thereto; provided, that footnotes relating to liabilities that will not continue as liabilities of the Company following the Closing may be prepared in summary form); and such financial statements shall not reflect a financial condition of the Company materially adversely different from the financial condition reflected in the financial statements previously delivered to Purchaser pursuant to Section 2.09 hereof. ARTICLE VII CONDITIONS TO OBLIGATIONS OF SELLERS The obligations of Sellers hereunder to sell the Shares are subject to the fulfillment, at or before the Closing, of each of the following conditions (all or any of which may be waived in whole or in part by Sellers in their sole discretion): 7.01 Representations and Warranties. Each of the representations and warranties made by Purchaser in this Agreement shall be true and correct in all material respects on - 32 - 39 and as of the Closing Date as though such representation or warranty was made on and as of the Closing Date. 7.02 Performance. Purchaser shall have performed and complied with, in all material respects, each agreement, covenant and obligation required by this Agreement to be so performed or complied with by Purchaser at or before the Closing. 7.03 Officers' Certificates. Purchaser shall have delivered to each Seller a certificate, dated the Closing Date and executed in the name and on behalf of Purchaser by the Chairman of the Board, the President or any Executive or Senior Vice President of Purchaser, substantially in the form and to the effect of Exhibit E hereto, and a certificate, dated the Closing Date and executed by the Secretary or any Assistant Secretary of Purchaser, substantially in the form and to the effect of Exhibit F hereto. 7.04 Orders and Laws. There shall not be in effect on the Closing Date any Order or Law that became effective after the date of this Agreement restraining, enjoining or otherwise prohibiting or making illegal the consummation of any of the transactions contemplated by this Agreement or any of the Operative Agreements. 7.05 Regulatory Consents and Approvals. All consents, approvals and actions of, filings with and notices to any Governmental or Regulatory Authority necessary to permit Seller and Purchaser to perform their obligations under this Agreement and the Operative Agreements and to consummate the transactions contemplated hereby and thereby (a) shall have been duly obtained, made or given, (b) shall not be subject to the satisfaction of any condition that has not been satisfied or waived and (c) shall be in full force and effect, and all terminations or expirations of waiting periods imposed by any Governmental or Regulatory Authority necessary for the consummation of the transactions contemplated by this Agreement and the Operative Agreements, including under the HSR Act, shall have occurred. 7.06 Third Party Consents. All consents (or in lieu thereof waivers) to the performance by Sellers of their obligations hereunder and to the consummation of the transactions contemplated hereby as are required under the Contracts listed in Section 7.06 of the Disclosure Schedule (a) shall have been obtained, (b) shall not be subject to the satisfaction of any condition that has not been satisfied or waived and (c) shall be in full force and effect. 7.07 Opinion of Counsel. Sellers shall have received the opinion of Michael R. Kargula, General Counsel of Purchaser, - 33 - 40 dated the Closing Date, substantially in the form and to the effect of Exhibit G hereto. ARTICLE VIII TAX MATTERS AND POST-CLOSING TAXES 8.1 (a) General Intention of Parties. In general, subject to the specific provisions contained in this Agreement, it is the intention of the parties hereto that Bowne will pay, or will cause to be paid, all Taxes with respect to taxable periods that are Pre-Closing Periods or Pre-Closing Partial Periods except that Bowne shall not be responsible for the first forty-six thousand dollars ($46,000) of state and local income taxes for such Pre-Closing Periods and Pre-Closing Partial Periods, and that Purchaser will pay, or will cause to be paid, all Taxes with respect to taxable periods that are Post-Closing Periods or Post-Closing Partial Periods. (b) Consolidated/Combined Returns. Bowne will cause to be duly prepared and timely filed all Tax Returns of any consolidated or combined group in which Bowne or any of its Affiliates (other than the Company) and the Company are included (any such group being referred to herein as a "Seller Group") for all Pre-Closing Periods of the Company. Bowne will include the Company in the Seller Group's consolidated federal Income Tax Returns for all Pre-Closing Periods of the Company. Bowne will include (or cause to be included) the Company in any other consolidated or combined basis filing for any Pre-Closing Periods of the Company as Bowne shall deem appropriate. Bowne will pay, and will indemnify and hold harmless the Company, Purchaser and Purchaser's Affiliates from and against any Taxes imposed upon the Company for any Pre-Closing Period including any Taxes arising as a result of the application of Treas. Reg. Section 1.1502-6 or any equivalent provision under state or foreign Tax law except that Bowne shall not be responsible for the first forty-six thousand dollars ($46,000) of state and local income taxes for such Pre-Closing Periods and Pre-Closing Partial Periods. (c) Other Returns. Bowne will cause to be prepared and filed on a timely basis all Tax Returns other than those described in Section 8.1(b) above required to be filed on behalf of the Company for all Pre-Closing Periods. Bowne will pay, and will indemnify and hold harmless the Company, Purchaser and Purchaser's Affiliates from and against any Taxes imposed on the Company attributable to any Pre-Closing Periods except that Bowne shall not be responsible for the first forty-six thousand dollars ($46,000) of state and local income taxes for such Pre-Closing Periods and Pre-Closing Partial Periods. - 34 - 41 (d) Straddle Period. Any tax period of the Company which Bowne has elected, or caused the Company to have elected, to terminate on or before the Closing Date shall not constitute a Straddle Period and shall constitute a Pre-Closing Period. Bowne will take all actions necessary to have the Company terminate on the Closing Date the tax periods which commence within twelve (12) months prior to the Closing Date. Purchaser will timely prepare and file all Tax Returns required to be filed by the Company for Straddle Periods and shall pay all Taxes due with respect to such Tax Returns, provided, however, Purchaser will notify Bowne of Purchaser's calculation of Bowne's share of the Taxes of the Company for any Straddle Periods (determined in accordance with this paragraph (the "Tax Statement)) and provide to Bowne copies of the Tax Returns and such Tax Statement at least 15 days after the due date for filing any such Tax Returns. The Sellers shall have the right to review such Tax Returns and the Tax Statement and to request that the Purchaser make any reasonable changes to such Tax Returns. Purchaser and Bowne shall attempt to resolve in good faith any disagreement arising out of any Straddle Period Tax Return and/or any calculation of Bowne's share of the related Tax liability; if any such dispute is not resolved within ten days after the receipt of the Tax Return and Tax Statement, the matter shall be submitted for binding resolution to a mutually acceptable nationally recognized accounting firm in the relevant jurisdiction with no material relationship to Purchaser or Sellers. No later than fifteen (15) days following receipt of any such Tax Return and Tax Statement, Bowne shall pay to Purchaser, an amount equal to the Taxes shown on the Tax Statement as being chargeable to Bowne to the extent the amount exceeds the forty-six thousand dollars ($46,000) referred to in Sections 8.1(a), 8.1(b), and 8.1(c) unless Bowne has disputed such amount. If Bowne has disputed such amount, then Bowne shall pay to Purchaser on that date an amount reasonably determined by Bowne as the proper amount of Taxes chargeable to Sellers to the extent the amount exceeds the forty-six thousand dollars ($46,000) referred to in Sections 8.1(a), 8.1(b), and 8.1(c). Bowne shall pay any additional amount in order to reflect the decision of the Independent Accounting Firm within three (3) days of the Independent Accounting Firm decision. The Purchaser shall pay to the Bowne excess, if any, of the amount paid by Bowne, if any, pursuant to the preceding sentence over the amount decided upon by the Independent Accounting Firm. Interest will also be paid with respect to any such adjustments at a rate equal to the U.S. Federal underpayment rate from the date of the delivery of the calculation to the date the amount of any adjustment is paid. Purchaser will cause the Company to pay, and will indemnify and hold harmless Sellers and Sellers' Affiliates from and against any Taxes imposed upon the Company for any such Straddle Period, except that Bowne will reimburse Purchaser for, and will indemnify and hold harmless the Company, Purchaser and Purchaser's Affiliates from and against, the amount of Taxes attributable to any Pre-Closing Partial - 35 - 42 Period. In the case of a Straddle Period, for purposes of this Agreement, Taxes for the entire Straddle Period shall be allocated between a Pre-Closing Partial Period and a Post-Closing Partial Period assuming that the books of the Company were closed as of and including the Closing Date, except that exemptions, allowances or deductions (such as depreciation deductions) calculated on an annual basis shall be prorated between the Pre-Closing Partial Period and Post-Closing Partial Period on a per diem basis and real property Taxes shall be allocated in accordance with Code Section 164(d). Any Taxes for a Straddle Period paid prior to the Closing shall be deducted from Bowne's liability pursuant to the immediately preceding sentence. (e) Post-Closing Periods. Purchaser will cause to be prepared and filed all Tax Returns required to be filed by or on behalf of the Company for Post-Closing Periods. Purchaser will pay, and will indemnify and hold harmless Sellers and Seller's Affiliates from and against any Taxes imposed on the Company with respect to any such period. (f) Payment of Taxes. Sellers and Purchaser hereby agree that any amount of Taxes paid by Sellers to Purchaser constitute a reduction in the Purchase Price of the Shares of the Company to which such payments relate. (g) Refund/Overpayment. Bowne will be entitled to retain, or receive prompt payment from the Company of any refund or credit for overpayment of Taxes for a Pre-Closing Period or a Pre-Closing Partial Period, plus any interest received with respect thereto from the relevant taxing authorities provided, however, that the Purchaser or the Company may retain such refund or credit to offset any liability of Sellers or Seller Affiliates to Purchaser or the Company. All refunds received by Bowne of Taxes with respect to a Post-Closing Period or Post-Closing Partial Period of the Company shall be delivered to Purchaser or the Company promptly after receipt thereof by Sellers, provided, however, that Bowne may retain such refund or credit to offset any liability of Purchaser to Sellers. (h) Notice. Purchaser will promptly notify Bowne in writing upon receipt by Purchaser or any of its Affiliates (including, after the Closing, the Company) of any written notice of any audit or assessment with respect to Taxes for which Bowne would be required to pay or indemnify Purchaser or any of its Affiliates. Bowne shall promptly notify Purchaser in writing upon receipt by Bowne or any Affiliate of Bowne of any written notice of any federal, state, local or foreign Tax audits or assessments or other written communications from any tax authority relating to the income, properties or operations of the Company for Post-Closing Periods or Straddle Periods. Bowne shall have the right to control the audit (and disposition thereof) of any Tax Return actually filed prior to the Closing - 36 - 43 Date relating to a Pre-Closing Period (a "Pre-closing Return"), and at its own expense to participate in and approve (which approval shall not be unreasonably withheld) the disposition of the audit of any Tax Return relating to a Straddle Period, if any such audit or disposition thereof could give rise to a claim for indemnification hereunder. Purchaser shall have the right to review in advance and comment upon all submissions made in the course of audits or appeals of any Pre-closing Return to any Governmental Entity and to approve (which approval shall not be unreasonably withheld) the disposition of any audit adjustment with respect to such Pre-closing Return if such submissions and/or disposition could result in an increase in Taxes of Purchaser, any Affiliate of Purchaser or the Company for the Partial Post-Closing Period or any Post-Closing Period. Notwithstanding any of the foregoing, any submission made on behalf of the Company after the Closing Date (including any documentation relating to a disposition) that must be signed by the Company shall be signed by the Purchaser or any of its Affiliates and such signature shall not be unreasonably withheld. Bowne shall have the right to request that Purchaser initiate any claim for refund prepaid by Bowne, or file any amended Tax Return prepaid by Bowne relating to a Pre-closing or Straddle Period and Purchaser shall honor such request provided Purchaser makes a good faith determination that there is a reasonable basis for such claim or filing and that such claim or filing does not result in an increase in Taxes of the Purchaser, any Affiliate of the Purchaser, or the Company for any period. Bowne shall be responsible for all costs associated with such claims for refund or amended filings. (i) Access to Documentation. After the Closing Date, each of Purchaser and Sellers shall furnish or cause to be furnished to each other, upon request, as promptly as practicable, such information (including access to books, records and personnel) and assistance as is reasonably requested for the preparation and filing of any Tax Return or related document, for the preparation for any Tax audit or for the prosecution or defense of any claim, suit or proceeding relating to Taxes. (j) Tax Sharing Agreement. As of the Closing, the Company will be released from any obligation with respect to any Tax sharing or other Tax agreements. (k) Transfer Taxes. Purchaser will pay or cause to be paid, and will indemnify and hold harmless Sellers from and against, any sales, use, transfer, stamp, documentary or similar Taxes incurred in connection with the transactions contemplated by this Agreement. (l) Purchaser and Bowne shall jointly make the election allowed by Code Section 338(h)(10) in respect of Purchaser's acquisition of the Shares pursuant to this Agreement the ("Code - 37 - 44 Section 338(h)(10) Election"). Purchaser, Sellers and Sellers' Affiliates shall timely take all steps to properly complete and sign all forms or certificates necessary or helpful to properly and timely qualify the Code Section 338(h)(10) Election. Bowne will pay or cause to be paid any and all Taxes imposed as a result of the sale of assets deemed made pursuant to the Code Section 338(h)(10) Election and the regulations thereunder upon the sale of the Shares. Within sixty (60) days after the Closing Date, Purchaser shall deliver to Bowne a completed Internal Revenue Service Form 8023-A and required schedules thereto (the "Form"), as well as any applicable state, local or foreign forms (the "State Form"). Provided that the information on the Form is, in the reasonable determination of Bowne, correct and complete in all material respects, Bowne shall, within 30 days after receipt of such Form, execute the Form and deliver the Form to Purchaser. If any changes or supplements are required to the Form, the Parties will promptly inform each other of same and Bowne and Purchaser will promptly agree on such changes. Purchaser will timely file the Form, and any required supplements thereto, and will provide assurance to Bowne that it has done so. Bowne and Purchaser agree that neither of them nor any of their Affiliates shall take any unilateral action to modify or revoke the elections contained in or the content of the Form, any State Forms and any supplements. Bowne and its Affiliates shall file their respective Federal tax returns (and affected state and local returns) in a manner consistent with the Section 338(h)(10) Election. (m) Allocation of Purchase Price. Bowne and Purchaser agree to negotiate in good faith on an allocation of the Purchase Price, as adjusted, among the assets of the Company that are deemed to have been acquired pursuant to the 338(h)(10) Election or any state law equivalent. The agreed allocation shall be set forth in a letter agreement used to file all reports and returns for taxes. If Bowne and Purchaser are unable to agree on an allocation within sixty days after the Closing Date, Purchaser and Bowne shall be free to make any allocation they desire, and Purchaser shall allow Bowne and its authorized agent and representatives access to the Company and its books and assets to allow Bowne to make an appraisal of such assets and a tax allocation. Should Purchaser or Bowne hire an appraiser to appraise the value of the assets of the Company, Purchaser or Bowne shall provide the other with a true copy of the written appraisal report made by such firm, upon payment of one-half of the cost of any such appraisal. (n) From and after the date hereof, Bowne will not make, or cause the Company to make, any Tax Election not consistent with past practice. - 38 - 45 (o) Sellers will provide certifications of non-foreign status in accordance with Treasury Regulation Section 1.1445-2(b) substantially in the form and to the effect of Exhibit H hereto. ARTICLE IX EMPLOYEE BENEFITS MATTERS 9.01 General. Purchaser shall cause all employees of the Company to be eligible as of the Closing to participate in the "employee welfare benefit plans" and "employee pension plans" (within the meaning of Section 3(1) and Section 3(2) of ERISA, respectively) of Purchaser, if any, in which similarly situated employees of Purchaser are generally eligible to participate, provided that (a) nothing herein shall prevent Purchaser from terminating the employment of any employee of the Company or modifying or terminating such plans of Purchaser from time to time, and (b) all employees of the Company and their dependents shall be covered immediately after the Closing (and shall not be excluded from coverage on account of any pre-existing condition) under any such plan that is a group health plan of Purchaser subject to Part 6 of Title I of ERISA. For purposes of any length of service requirements, waiting periods, vesting periods or differential benefits based on length of service in any such plan for which an Employee may be eligible after the Closing, Purchaser shall ensure that service by such Employee with the Seller or with the Company shall be deemed to have been service with the Purchaser. Except as provided otherwise in this Article IX, Purchaser shall be under no obligation to provide or continue any such plans or other arrangements after the Closing Date and may amend or terminate any such plan or arrangement in whole or in part, and may modify any provision thereof, including any provision dealing with eligibility, levels or types of benefits, deductibles or co-payment obligations, or any other right, feature other or characteristic. 9.02 Growth Participation Plan. Purchaser shall pay or cause to be paid when due to employees of the Company, any and all amounts vested and due to any such employee under the Company's Growth Participation Plan as in effect on the date hereof (up to a maximum aggregate amount of $284,000). Any amounts due to employees of the Company under the Company's Growth Participation Plan in excess of such $284,000 shall be the responsibility of Bowne. 9.03 Bowne Pension Plan. Bowne shall cause each employee of the Company participating in the Bowne Pension Plan and not yet vested therein to be fully vested on and as of the Closing Date with respect to all benefits accrued as of the Closing Date - 39 - 46 9.04 Bowne Profit Sharing Plan. Bowne shall cause each employee of the Company participating in the Bowne Profit Sharing Plan and not yet vested therein to be fully vested on and as of the Closing Date with respect to all benefits accrued as of the Closing Date. 9.05 Employee Bonuses. Purchaser or the Company shall be responsible for and shall pay all bonus amounts earned by employees of the Company under any Benefit Plans in respect of the year ended October 31, 1996 up to a maximum of $250,000. Any bonus amounts due to employees of the Company in respect of such period in excess of $250,000 shall be the responsibility of Bowne. ARTICLE X SURVIVAL OF REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS 10.01 Survival of Representations, Warranties, Covenants and Agreements. Notwithstanding any right of Purchaser (whether or not exercised) to investigate the affairs of the Company or any right of any party (whether or not exercised) to investigate the accuracy of the representations and warranties of the other party contained in this Agreement, Sellers and Purchaser have the right to rely fully upon the representations, warranties, covenants and agreements of the other contained in this Agreement. The representations, warranties, covenants and agreements of Sellers and Purchaser contained in this Agreement will survive the Closing (a) indefinitely with respect to (i) the representations and warranties contained in Sections 2.02, 2.04, 2.27, 3.02 and 3.07 and (ii) the covenants and agreements contained in Sections 1.06, 14.03 and 14.05; (b) until sixty (60) days after the expiration of all applicable statutes of limitation (including all periods of extension, whether automatic or permissive) with respect to matters covered by Section 2.12 and Article VIII and (insofar as they relate to ERISA or the Code) Section 2.15 and Article IX; (c) until June 30, 1998 in the case of all other representations and warranties and any covenant or agreement to be performed in whole or in part on or prior to the Closing or (d) with respect to each other covenant or agreement contained in this Agreement, until sixty (60) days following the last date on which such covenant or agreement is to be performed or, if no such date is specified, indefinitely; provided that the termination of any representation, warranty, covenant or agreement in accordance with clause (b), (c) or (d) above will have no effect on any Claim Notice or Indemnity Notice (as applicable) that shall have been timely given under Article XI on or prior to such termination date. - 40 - 47 ARTICLE XI INDEMNIFICATION 11.01 Indemnification. (a) Subject to paragraph (c) of this Section and the other Sections of this Article XI, Sellers shall indemnify severally and not jointly, in proportion to their respective share of the aggregate consideration received pursuant to this Agreement, the Purchaser Indemnified Parties in respect of, and hold each of them harmless from and against, any and all Losses suffered, incurred or sustained by any of them or to which any of them becomes subject, resulting from, arising out of or relating to (i) any breach of representation or warranty of Sellers contained in this Agreement determined in all cases as if the terms "material" or "materially" were not included therein), (ii) any nonfulfillment of or failure to perform any covenant or agreement on the part of Sellers contained in this Agreement, and (iii) any and all Liabilities relating to, or arising out of or in connection with the Appeal Assets or the operation of the Appeal Business. (b) Subject to the other Sections of this Article XI, Purchaser shall indemnify the Seller Indemnified Parties in respect of, and hold each of them harmless from and against, any and all Losses suffered, incurred or sustained by any of them or to which any of them becomes subject, resulting from, arising out of or relating to (i) any breach of representation or warranty of the Purchaser contained in this Agreement, and (ii) any nonfulfillment of or failure to perform any covenant or agreement on the part of Purchaser contained in this Agreement. (c) No amounts of indemnity shall be payable in the case of a claim by any Indemnified Party under Section 11.01(a)(i) or 11.01(b)(i) (x) unless and until such Indemnified Parties have suffered, incurred, sustained or become subject to Losses referred to in such Section in excess of $100,000 in the aggregate; in which event the Indemnified Parties shall be entitled to claim indemnity for Losses over and above such amount, and (y) in excess of $15,000,000 in the aggregate; provided that this paragraph (c) shall not apply to a breach of a representation or warranty contained in Section 2.02, 2.04, 2.06, 2.07 or 2.27. For the avoidance of doubt, the parties reiterate that any amounts payable by Sellers in respect of indemnity claims hereunder shall be payable severally, in proportion to their respective share of the aggregate consideration received hereunder. (d) Notwithstanding anything to the contrary contained in this Agreement, Sellers shall have no liability under any provision of this Agreement for any Losses to the extent and only - 41 - 48 to the extent that such Losses result from or arise out of actions taken by Purchaser, the Company or their respective Affiliates after the Closing Date. (e) Notwithstanding anything to the contrary contained in this Article XI, this Article XI shall not apply to any Losses related to Taxes for which indemnifications are provided in Article VIII. 11.02 Method of Asserting Claims. All claims for indemnification by any Indemnified Party under Section 11.01 will be asserted and resolved as follows: (a) In the event any claim or demand in respect of which an Indemnified Party might seek indemnity under Section 11.01 is asserted against or sought to be collected from such Indemnified Party by a Person other than Seller or any Affiliate of Seller or of Purchaser (a "Third Party Claim"), the Indemnified Party shall deliver a Claim Notice to the Indemnifying Party as soon as is practicable and in any event within 30 days of the time that the Indemnified Party learns of such Third Party Claim. If the Indemnified Party fails so to provide the Claim Notice, the Indemnifying Party will not be obligated to indemnify the Indemnified Party with respect to such Third Party Claim to the extent that the Indemnifying Party's ability to defend has been irreparably prejudiced by such failure of the Indemnified Party. The Indemnifying Party will notify the Indemnified Party as soon as practicable within the Dispute Period whether the Indemnifying Party disputes its liability to the Indemnified Party under Section 11.01 and whether the Indemnifying Party desires, at its sole cost and expense, to defend the Indemnified Party against such Third Party Claim. (i) If the Indemnifying Party notifies the Indemnified Party within the Dispute Period that the Indemnifying Party desires to defend the Indemnified Party with respect to the Third Party Claim pursuant to this Section 11.02(a), then the Indemnifying Party will have the right to defend, with counsel reasonably satisfactory to the Indemnified Party, at the sole cost and expense of the Indemnifying Party, such Third Party Claim by all appropriate proceedings, which proceedings will be prosecuted by the Indemnifying Party in good faith or will be settled at the discretion of the Indemnifying Party (but only with the consent of the Indemnified Party, which consent will not be unreasonably withheld, in the case of any settlement that provides for any relief other than the payment of monetary damages as to which the Indemnified Party will be indemnified in full). The Indemnifying Party will be deemed to have waived its right to dispute its liability to the Indemnified Party under Section 11.01 with respect to any Third Party Claim as to which it elects to control the defense. The Indemnifying - 42 - 49 Party will have full control of such defense and proceedings, including (except as provided in the immediately preceding sentence) any settlement thereof; provided, however, that the Indemnified Party may, at the sole cost and expense of the Indemnified Party, at any time prior to the Indemnifying Party's delivery of the notice referred to in the first sentence of this clause (i), file any motion, answer or other pleadings or take any other action that the Indemnified Party reasonably believes to be necessary or appropriate to protect its interests; and provided further, that if requested by the Indemnifying Party, the Indemnified Party will, at the sole cost and expense of the Indemnifying Party, provide reasonable cooperation to the Indemnifying Party in contesting any Third Party Claim that the Indemnifying Party elects to contest. The Indemnified Party may retain separate counsel to represent it in, but not control, any defense or settlement of any Third Party Claim controlled by the Indemnifying Party pursuant to this clause (i), and the Indemnified Party will bear its own costs and expenses with respect to such separate counsel, except that the Indemnifying Party will pay the costs and expenses of such separate counsel if in the Indemnified Party's good faith judgment, it is advisable, based on advice of counsel, for the Indemnified Party to be represented by separate counsel because a conflict or potential conflict exists between the Indemnifying Party and the Indemnified Party which makes representation of both parties inappropriate under applicable standards of professional conduct. Notwithstanding the foregoing, the Indemnified Party may retain or take over the control of the defense or settlement of any Third Party Claim the defense of which the Indemnifying Party has elected to control if the Indemnified Party irrevocably waives its right to indemnity under Section 11.01 with respect to such Third Party Claim. (ii) If the Indemnifying Party fails to notify the Indemnified Party within the Dispute Period that the Indemnifying Party desires to defend the Third Party Claim pursuant to Section 11.02(a), or if the Indemnifying Party gives such notice but fails to prosecute or settle the Third Party Claim, then the Indemnified Party will have the right to defend, at the sole cost and expense of the Indemnifying Party, the Third Party Claim by all appropriate proceedings, which proceedings will be prosecuted by the Indemnified Party in good faith or will be settled at the discretion of the Indemnified Party (with the consent of the Indemnifying Party, which consent will not be unreasonably withheld). The Indemnified Party will have full control of such defense and proceedings, including (except as provided in the immediately preceding sentence) any settlement thereof; provided, however, that if requested by the Indemnified - 43 - 50 Party, the Indemnifying Party will, at the sole cost and expense of the Indemnifying Party, provide reasonable cooperation to the Indemnified Party and its counsel in contesting any Third Party Claim which the Indemnified Party is contesting. Notwithstanding the foregoing provisions of this clause (ii), if the Indemnifying Party has notified the Indemnified Party within the Dispute Period that the Indemnifying Party disputes its liability hereunder to the Indemnified Party with respect to such Third Party Claim and if such dispute is resolved in favor of the Indemnifying Party in the manner provided in clause (iii) below, the Indemnifying Party will not be required to bear the costs and expenses of the Indemnified Party's defense pursuant to this clause (ii) or of the Indemnifying Party's participation therein at the Indemnified Party's request, and the Indemnified Party will reimburse the Indemnifying Party in full for all reasonable costs and expenses incurred by the Indemnifying Party in connection with such litigation. (iii) If the Indemnifying Party notifies the Indemnified Party that it does not dispute its liability to the Indemnified Party with respect to the Third Party Claim under Section 11.01 or fails to notify the Indemnified Party within the Dispute Period whether the Indemnifying Party disputes its liability to the Indemnified Party with respect to such Third Party Claim, the Loss arising from such Third Party Claim will be conclusively deemed a liability of the Indemnifying Party under Section 11.01 and the Indemnifying Party shall pay the amount of such Loss to the Indemnified Party on demand following its final determination. If the Indemnifying Party has timely disputed its liability with respect to such claim, the Indemnifying Party and the Indemnified Party will proceed in good faith to negotiate a resolution of such dispute, and if not resolved through negotiations within the Resolution Period, such dispute shall be resolved by arbitration in accordance with paragraph (c) of this Section 11.02. (b) In the event any Indemnified Party should determine in good faith that it has a claim under Section 11.01 against any Indemnifying Party that does not involve a Third Party Claim, the Indemnified Party shall deliver an Indemnity Notice with reasonable promptness to the Indemnifying Party. The failure by any Indemnified Party to give the Indemnity Notice shall not impair such party's rights hereunder except to the extent that an Indemnifying Party has been irreparably prejudiced thereby. If the Indemnifying Party notifies the Indemnified Party that it does not dispute the claim described in such Indemnity Notice or fails to notify the Indemnified Party within the Dispute Period whether the Indemnifying Party disputes the claim described in such Indemnity Notice, the Loss arising from - 44 - 51 the claim specified in such Indemnity Notice will be conclusively deemed a liability of the Indemnifying Party under Section 11.01 and the Indemnifying Party shall pay the amount of such Loss to the Indemnified Party on demand following its final determination. If the Indemnifying Party has timely disputed its liability with respect to such claim, the Indemnifying Party and the Indemnified Party will proceed in good faith to negotiate a resolution of such dispute, and if not resolved through negotiations within the Resolution Period, such dispute shall be resolved by arbitration in accordance with paragraph (c) of this Section 11.02. (c) Any dispute submitted to arbitration pursuant to this Section 11.02 shall be finally and conclusively determined by the decision of a board of arbitration consisting of three (3) members (hereinafter sometimes called the "Board of Arbitration") selected as hereinafter provided. Each of the Indemnified Party and the Indemnifying Party shall select one (1) member and the third member shall be selected by mutual agreement of the other members, or if the other members fail to reach agreement on a third member within twenty (20) days after their selection, such third member shall thereafter be selected by the American Arbitration Association upon application made to it for a third member possessing expertise or experience appropriate to the dispute jointly by the Indemnified Party and the Indemnifying Party. The Board of Arbitration shall reach and render a decision in writing (concurred in by a majority of the members of the Board of Arbitration) with respect to the amount, if any, which the Indemnifying Party is required to pay to the Indemnified Party in respect of a claim filed by the Indemnified Party. In connection with rendering its decisions, the Board of Arbitration shall adopt and follow such rules and procedures as a majority of the members of the Board of Arbitration deems necessary or appropriate. To the extent practical, decisions of the Board of Arbitration shall be rendered no more than thirty (30) days following commencement of proceedings with respect thereto. The Board of Arbitration shall cause its written decision to be delivered to the Indemnified Party and the Indemnifying Party. Any decision made by the Board of Arbitration (either prior to or after the expiration of such thirty (30) calendar day period) shall be final, binding and conclusive on the Indemnified Party and the Indemnifying Party and entitled to be enforced to the fullest extent permitted by law and entered in any court of competent jurisdiction. Each party to any arbitration shall bear its own expense in relation thereto, including but not limited to such party's attorneys' fees, if any, and the expenses and fees of the member of the Board of Arbitration appointed by such party, provided, however, that the expenses and fees of the third member of the Board of Arbitration and any other expenses of the Board of Arbitration not capable of being attributed to any one member shall be borne - 45 - 52 in equal parts by the Indemnifying Party and the Indemnified Party. ARTICLE XII TERMINATION 12.01 Termination. This Agreement may be terminated, and the transactions contemplated hereby may be abandoned: (a) at any time before the Closing, by mutual written agreement of Sellers and Purchaser; (b) at any time before the Closing, by Sellers or Purchaser, in the event of a material breach hereof by the non-terminating party if such non-terminating party fails to cure such breach within five (5) Business Days following notification thereof by the terminating party; or (c) at any time after January 31, 1997 by Sellers or Purchaser upon notification of the non-terminating party by the terminating party if the Closing shall not have occurred on or before such date and such failure to consummate is not caused by a breach of this Agreement by the terminating party. 12.02 Effect of Termination. If this Agreement is validly terminated pursuant to Section 12.01, this Agreement will forthwith become null and void, and there will be no liability or obligation on the part of Sellers or Purchaser (or any of their respective officers, directors, employees, agents or other representatives or Affiliates), except as provided in the next succeeding sentence and except that the provisions with respect to expenses in Section 14.03 and confidentiality in Section 14.05 will continue to apply following any such termination. Nothing herein shall relieve either party from liability for any willful breach hereof. ARTICLE XIII DEFINITIONS 13.01 Definitions. (a) Defined Terms. As used in this Agreement, the following defined terms have the meanings indicated below: "Acquisition Proposal" means any proposal for a merger or other business combination to which the Company is a party or the direct or indirect acquisition of any equity interest in, or a substantial portion of the assets of, the Company, other than the transactions contemplated by this Agreement. - 46 - 53 "Actions or Proceedings" means any action, suit, proceeding, arbitration or Governmental or Regulatory Authority investigation or audit. "Affiliate" means any Person that directly, or indirectly through one of more intermediaries, controls or is controlled by or is under common control with the Person specified. For purposes of this definition, control of a Person means the power, direct or indirect, to direct or cause the direction of the management and policies of such Person whether by Contract or otherwise and, in any event and without limitation of the previous sentence, any Person owning ten percent (10%) or more of the voting securities of another Person shall be deemed to control that Person. "Agreement" means this Stock Purchase Agreement and the Exhibits, the Disclosure Schedule and the Schedules hereto, as the same shall be amended from time to time. "Appeal Assets" means the Assets and Properties of the Company used or held for use in operation of the Appeal Business. "Appeal Business" means the Company's line of business pursuant to which the Company publishes, markets, sells and distributes the "Appeal Securities Act Handbook" and related products under the "Bowne Publishing" name. "Assets and Properties" of any Person means all assets and properties of every kind, nature, character and description (whether real, personal or mixed, whether tangible or intangible, whether absolute, accrued, contingent, fixed or otherwise and wherever situated), including the goodwill related thereto, operated, owned or leased by such Person. "Benefit Plan" means any Plan established by the Company, or any predecessor or Affiliate of any of the foregoing, existing at the Closing Date or prior thereto, to which the Company contributes or has contributed, or under which any employee, former employee or director of the Company or any beneficiary thereof is covered, is eligible for coverage or has benefit rights. "Board of Arbitration" has the meaning ascribed to it in Section 11.02(d). "Books and Records" means all files, documents, instruments, papers, books and records relating to the Business or Condition of the Company, including without limitation financial statements, Tax Returns and related work papers and letters from accountants, budgets, pricing guidelines, ledgers, journals, deeds, title policies, minute books, stock certificates and books, stock transfer ledgers, Contracts, Licenses, customer - 47 - 54 lists, computer files and programs, retrieval programs, operating data and plans and environmental studies and plans. "Business Day" means a day other than Saturday, Sunday or any day on which banks located in the States of New York and Massachusetts are authorized or obligated to close. "Business or Condition of the Company" means the business, condition (financial or otherwise), results of operations, Assets and Properties of the Company. "CERCLA" means the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, and the rules and regulations promulgated thereunder. "CERCLIS" means the Comprehensive Environmental Response and Liability Information System, as provided for by 40 C.F.R. Section 300.5. "Claim Notice" means written notification pursuant to Section 11.02(a) of a Third Party Claim as to which indemnity under Section 11.01 is sought by an Indemnified Party, enclosing a copy of all papers served, if any, and specifying the nature of and basis for such Third Party Claim and for the Indemnified Party's claim against the Indemnifying Party under Section 11.01, together with the amount or, if not then reasonably determinable, the estimated amount, determined in good faith, of the Loss arising from such Third Party Claim. "Closing" means the closing of the transactions contemplated by Section 1.03. "Closing Date" means (a) the second Business Day after the day on which the last of the consents, approvals, actions, filings, notices or waiting periods described in or related to the filings described in Sections 6.04 through 6.07 and Sections 7.04 through 7.07 has been obtained, made or given or has expired, as applicable, or (b) such other date as Purchaser and Sellers mutually agree upon in writing. "Code" means the Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated thereunder. "Common Stock" means the common stock, par value $0.01 per share, of the Company. "Company" has the meaning ascribed to it in the forepart of this Agreement. "Contract" means any agreement, lease, license, evidence of Indebtedness, mortgage, indenture, security agreement or other contract. - 48 - 55 "Defined Benefit Plan" means each Benefit Plan which is subject to Part 3 of Title I of ERISA, Section 412 of the Code or Title IV of ERISA. "Disclosure Schedule" means the record delivered to Purchaser by Sellers herewith and dated as of the date hereof, containing all lists, descriptions, exceptions and other information and materials as are required to be included therein by Sellers pursuant to this Agreement. "Dispute Period" means the period ending thirty (30) days following receipt by an Indemnifying Party of either a Claim Notice or an Indemnity Notice. "Environmental Law" means any Law or Order relating to the regulation or protection of the environment or to emissions, discharges, releases or threatened releases of pollutants, contaminants, chemicals or industrial, toxic or hazardous substances or wastes into the environment (including, without limitation, ambient air, soil, surface water, ground water, wetlands, land or subsurface strata), or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of pollutants, contaminants, chemicals or industrial, toxic or hazardous substances or wastes. "ERISA" means the Employee Retirement Income Security Act of 1974, as amended, and the rules and regulations promulgated thereunder. "ERISA Affiliate" means any Person who is in the same controlled group of corporations or who is under common control with Sellers or, before the Closing, the Company (within the meaning of Section 414 of the Code). "Financial Statements" means the financial statements of the Company delivered to Purchaser pursuant to Section 2.09 or 4.06. "GAAP" means generally accepted accounting principles, consistently applied throughout the specified period. "Governmental or Regulatory Authority" means any court, tribunal, arbitrator, authority, agency, commission, official or other instrumentality of the United States, any foreign country or any domestic or foreign state, county, city or other political subdivision. "Hazardous Material" means (A) any petroleum or petroleum products, flammable explosives, radioactive materials, asbestos in any form that is or could become friable, urea formaldehyde foam insulation and transformers or other equipment - 49 - 56 that contain dielectric fluid containing levels of polychlorinated biphenyls (PCBs); (B) any chemicals or other materials or substances which are now or hereafter become defined as or included in the definition of "hazardous substances," "hazardous wastes," "hazardous materials," "extremely hazardous wastes," "restricted hazardous wastes," "toxic substances," "toxic pollutants" or words of similar import under any Environmental Law; and (C) any other chemical or other material or substance, exposure to which is now or hereafter prohibited, limited or regulated by any Governmental or Regulatory Authority under any Environmental Law. "HSR Act" means Section 7A of the Clayton Act (Title II of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended) and the rules and regulations promulgated thereunder. "Indebtedness" of any Person means all obligations of such Person (i) for borrowed money, (ii) evidenced by notes, bonds, debentures or similar instruments, (iii) for the deferred purchase price of goods or services (other than trade payables or accruals incurred in the ordinary course of business), (iv) under capital leases and (v) in the nature of guarantees of the obligations described in clauses (i) through (iv) above of any other Person. "Indemnified Party" means any Person claiming indemnification under any provision of Article XI. "Indemnifying Party" means any Person against whom a claim for indemnification is being asserted under any provision of Article XI. "Indemnity Notice" means written notification pursuant to Section 11.02(b) of a claim for indemnity under Article XI by an Indemnified Party, specifying the nature of and basis for such claim, together with the amount or, if not then reasonably determinable, the estimated amount, determined in good faith, of the Loss arising from such claim. "Intellectual Property" means all patents and patent rights, trademarks and trademark rights, trade names and trade name rights, service marks and service mark rights, service names and service name rights, brand names, inventions, processes, formulae, copyrights and copyright rights, trade dress, business and product names, logos, slogans, trade secrets, industrial models, processes, designs, methodologies, data bases and computer programs (including all source codes) and related documentation, technical information, manufacturing, engineering and technical drawings, know-how and all pending applications for and registrations of patents, trademarks, service marks and copyrights. - 50 - 57 "IRS" means the United States Internal Revenue Service. "Knowledge of Sellers" or "Known to Sellers" means the knowledge of Robert G. Patterson, the Chief Executive Officer, President, Chief Financial Officer and Controller of Bowne, or any vice President of the Company. "Laws" means all laws, statutes, rules, regulations, ordinances and other pronouncements having the effect of law of the United States, any foreign country or any domestic or foreign state, county, city or other political subdivision or of any Governmental or Regulatory Authority. "Liabilities" means all obligations and other liabilities of a Person (whether absolute, accrued, contingent, fixed or otherwise, or whether due or to become due). "Licenses" means all licenses, permits, certificates of authority, authorizations, approvals, registrations, franchises and similar consents granted or issued by any Governmental or Regulatory Authority. "Liens" means any mortgage, pledge, assessment, security interest, lease, lien, adverse claim, levy, charge or other encumbrance of any kind. "Loss" means any and all damages, fines, fees, penalties, deficiencies, losses and expenses (including without limitation interest, court costs, reasonable fees of attorneys, accountants and other experts or other expenses of litigation or other proceedings or of any claim, default or assessment) actually suffered or named by any Person. "Operative Agreements" means any support or other agreements to be entered into in connection with the transaction. "Option" with respect to any Person means any security, right, subscription, warrant, option, "phantom" stock right or other Contract that gives the right to (i) purchase or otherwise receive or be issued any shares of capital stock of such Person or any security of any kind convertible into or exchangeable or exercisable for any shares of capital stock of such Person or (ii) receive or exercise any benefits or rights similar to any rights enjoyed by or accruing to the holder of shares of capital stock of such Person, including any rights to participate in the equity or income of such Person or to participate in or direct the election of any directors or officers of such Person or the manner in which any shares of capital stock of such Person are voted. - 51 - 58 "Order" means any writ, judgment, decree, injunction or similar order of any Governmental or Regulatory Authority (in each such case whether preliminary or final). "PBGC" means the Pension Benefit Guaranty Corporation established under ERISA. "Pension Benefit Plan" means each Benefit Plan which is a pension benefit plan within the meaning of Section 3(2) of ERISA. "Permitted Lien" means (i) any Lien for Taxes not yet due or delinquent or being contested in good faith by appropriate proceedings for which adequate reserves have been established in accordance with GAAP, (ii) any statutory Lien arising in the ordinary course of business by operation of Law with respect to a Liability or Indebtedness that is not yet due or delinquent, (iii) any Lien disclosed in the Financial Statements, and (iv) any Lien or imperfection of title not materially affect the use of such property in the conduct of the business of the Company consistent with past practice. "Person" means any natural person, corporation, general partnership, limited partnership, proprietorship, other business organization, trust, union, association or Governmental or Regulatory Authority. "Plan" means any bonus, incentive compensation, deferred compensation, pension, profit sharing, retirement, stock purchase, stock option, stock ownership, stock appreciation rights, phantom stock, leave of absence, layoff, vacation, day or dependent care, legal services, cafeteria, life, health, accident, disability, workmen's compensation or other insurance, severance, separation or other employee benefit plan, practice, policy or arrangement of any kind, whether written or oral, including, but not limited to, any "employee benefit plan" within the meaning of Section 3(3) of ERISA. "Post-Closing Partial Period" means that portion of any Straddle Period beginning the day after the Closing Date and ending on the last day of the Straddle Period. "Post-Closing Period" means a taxable period beginning after the Closing Date. "Pre-Closing Partial Period" means that portion of any Straddle Period beginning on the first day of the Straddle Period and ending on and including the Closing Date. "Pre-Closing Period" means any Tax period ending on or prior to the Closing Date and, with respect to any Straddle - 52 - 59 Period, the portion of such Straddle Period that ends on and includes the Closing Date. "Purchase Price" has the meaning ascribed to it in Section 1.02. "Purchaser" has the meaning ascribed to it in the forepart of this Agreement. "Purchaser Indemnified Parties" means Purchaser and its officers, directors, employees, agents and Affiliates. "Qualified Plan" means each Benefit Plan which is intended to qualify under Section 401 of the Code. "Release" means any release, spill, emission, leaking, pumping, injection, deposit, disposal, discharge, dispersal, leaching or migration into the indoor or outdoor environment, including, without limitation, the movement of Hazardous Materials through ambient air, soil, surface water, ground water, wetlands, land or subsurface strata. "Representatives" has the meaning ascribed to it in Section 4.03. "Resolution Period" means the period ending thirty (30) days following receipt by an Indemnified Party of a written notice from an Indemnifying Party stating that it disputes all or any portion of a claim set forth in a Claim Notice or an Indemnity Notice. "Sellers" has the meaning ascribed to it in the forepart of this Agreement. "Seller Indemnified Parties" means each Seller and its officers, directors, employees, agents and Affiliates. "Shares" has the meaning ascribed to it in the forepart of this Agreement. "Straddle Period" means a taxable year or taxable period of the Company which begins before the Closing Date and ends after the Closing Date. "Subject Defined Benefit Plan" means each Defined Benefit Plan listed and described in Section 2.15(a) of the Disclosure Schedule. "Tax Benefit" means in the case of any Tax Return, the sum of the amount by which the Tax liability is reduced (or the Tax refund is increased) plus any interest relating to such Tax liability (or Tax refund), and in the case of a consolidated - 53 - 60 federal income Tax Return or similar state, local or other Tax Return, the sum of the amount by which the Tax liability of the affiliated group of corporations is reduced (or the Tax refund is increased) plus any interest from such government or jurisdiction relating to such Tax liability (or Tax refund). "Tax Election" shall include, but is not limited to, any election, claim, disclaimer, waiver relating to any Tax, Tax Return, Tax Attribute or Tax Benefit. "Tax Return" means a report, return or other information required to be supplied to a governmental entity with respect to Taxes including, where permitted or required, combined or consolidated returns for any group of entities that includes Company or any Subsidiary. "Taxes" means any federal, state, county, local or foreign taxes, charges, fees, levies, other assessments, or withholding taxes or charges imposed by any governmental entity, and includes any interest and penalties (civil or criminal) on or additions to any such taxes and any expenses incurred in connection with the determination, settlement or litigation of any Tax liability. "Third Party Claim" has the meaning ascribed to it in Section 11.02(a). "Unaudited Financial Statement Date" means September 30, 1996. "Unaudited Financial Statements" means the Financial Statements for the eleven month period ended September 30, 1996 of the Company delivered to Purchaser pursuant to Section 2.09. "Year-End Financial Statement Date" means the fiscal year of the Company ending on October 31, 1996 for which Financial Statements are delivered to Purchaser pursuant to Section 2.09. "Year-End Financial Statements" means the Financial Statements for the fiscal year of the Company ending on October 31, 1996 and delivered to Purchaser pursuant to Section 2.09. (b) Construction of Certain Terms and Phrases. Unless the context of this Agreement otherwise requires, (i) words of any gender include each other gender; (ii) words using the singular or plural number also include the plural or singular number, respectively; (iii) the terms "hereof," "herein," "hereby" and derivative or similar words refer to this entire Agreement; (iv) the terms "Article" or "Section " refer to the specified Article or Section of this Agreement; and (v) the - 54 - 61 phrases "ordinary course of business" and "ordinary course of business consistent with past practice" refer to the business and practice of the Company. Whenever this Agreement refers to a number of days, such number shall refer to calendar days unless Business Days are specified. All accounting terms used herein and not expressly defined herein shall have the meanings given to them under GAAP. ARTICLE XIV MISCELLANEOUS 14.01 Notices. All notices, requests and other communications hereunder must be in writing and will be deemed to have been duly given only if delivered personally or by facsimile transmission or mailed (first class postage prepaid) to the parties at the following addresses or facsimile numbers: If to Purchaser, to: Primark Corporation 1000 Winter Street Waltham, MA 02154 Facsimile No.: (617) 890-6187 Attn: Joseph E. Kasputys Michael R. Kargula with a copy to: Milbank, Tweed, Hadley & McCloy 1 Chase Manhattan Plaza New York, NY 10005 Facsimile No.: (212) 530-5219 Attn: John T. O'Connor If to Bowne, to: Bowne & Co., Inc. 345 Hudson Street New York, NY 10014 Facsimile No.: (212) 229-7202 Attn: Robert M. Johnson with a copy to: Simpson Thacher & Bartlett 425 Lexington Avenue New York, NY 10017 Facsimile No.: (212) 455-2502 Attn: Vincent Pagano, Jr. - 55 - 62 If to Patterson or the Trust, to: Robert G. Patterson c/o Baseline Financial Services, Inc. 61 Broadway New York, NY 10006 Facsimile No.: (212) 785-0262 with a copy to: Dyer S. Wadsworth 215 E. 48th Street New York, NY 10017 Tel: (212) 688-8962 All such notices, requests and other communications will (i) if delivered personally to the address as provided in this Section, be deemed given upon delivery, (ii) if delivered by facsimile transmission to the facsimile number as provided in this Section, be deemed given upon receipt, and (iii) if delivered by mail in the manner described above to the address as provided in this Section, be deemed given upon receipt (in each case regardless of whether such notice, request or other communication is received by any other Person to whom a copy of such notice, request or other communication is to be delivered pursuant to this Section). Any party from time to time may change its address, facsimile number or other information for the purpose of notices to that party by giving notice specifying such change to the other party hereto. 14.02 Entire Agreement. This Agreement and the Operative Agreements supersede all prior discussions and agreements between the parties with respect to the subject matter hereof and thereof, including without limitation that certain letter of intent between the parties dated September 30, 1996, and contain the sole and entire agreement between the parties hereto with respect to the subject matter hereof and thereof. 14.03 Expenses. Except as otherwise expressly provided in this Agreement (including without limitation as provided in Section 12.02), whether or not the transactions contemplated hereby are consummated, each party will pay its own costs and expenses, and Sellers shall pay the costs and expenses of the Company, incurred in connection with the negotiation, execution and closing of this Agreement and the Operative Agreements and the transactions contemplated hereby and thereby. 14.04 Public Announcements. At all times at or before the Closing, Sellers and Purchaser will consult with each other with respect to, and where reasonably practicable, prior to making, any reports, statements or releases to the public with respect to this Agreement or the transactions contemplated - 56 - 63 hereby. Sellers and Purchaser will also consult with each other with respect to the content of any press release to be issued immediately following the Closing announcing the consummation of the transactions contemplated by this Agreement. Nothing contained in this Section 14.04 shall be deemed to prohibit any party from complying with any Law or any requirement of any stock exchange binding upon such party with respect to any public announcements. 14.05 Confidentiality. Each party hereto will hold, and will cause its Affiliates and their respective Representatives to hold, in strict confidence from any Person (other than any such Affiliate or Representative), unless (i) compelled to disclose by judicial or administrative process (including without limitation in connection with obtaining the necessary approvals of this Agreement and the transactions contemplated hereby of Governmental or Regulatory Authorities) or by other requirements of Law or (ii) disclosed in an Action or Proceeding brought by a party hereto in pursuit of its rights or in the exercise of its remedies hereunder, all documents and information concerning the other party or any of its Affiliates furnished to it by the other party or such other party's Representatives in connection with this Agreement or the transactions contemplated hereby, except to the extent that such documents or information can be shown to have been (a) previously known by the party receiving such documents or information, (b) in the public domain (either prior to or after the furnishing of such documents or information hereunder) through no fault of such receiving party or (c) later acquired by the receiving party from another source if the receiving party is not aware that such source is under an obligation to another party hereto to keep such documents and information confidential; provided that following the Closing the foregoing restrictions will not apply to Purchaser's use of documents and information concerning the Company furnished by Sellers hereunder. In the event the transactions contemplated hereby are not consummated, upon the request of the other party, each party hereto will, and will cause its Affiliates and their respective Representatives to, promptly (and in no event later than five (5) Business Days after such request) redeliver or cause to be redelivered all copies of documents and information furnished by the other party in connection with this Agreement or the transactions contemplated hereby and destroy or cause to be destroyed all notes, memoranda, summaries, analyses, compilations and other writings related thereto or based thereon prepared by the party furnished such documents and information or its Representatives. 14.06 Waiver. Any term or condition of this Agreement may be waived at any time by the party that is entitled to the benefit thereof, but no such waiver shall be effective unless set forth in a written instrument duly executed by or on behalf of the party waiving such term or condition. No waiver by any party - 57 - 64 of any term or condition of this Agreement, in any one or more instances, shall be deemed to be or construed as a waiver of the same or any other term or condition of this Agreement on any future occasion. All remedies, either under this Agreement or by Law or otherwise afforded, will be cumulative and not alternative. 14.07 Amendment. This Agreement may be amended, supplemented or modified only by a written instrument duly executed by or on behalf of each party hereto. 14.08 No Third Party Beneficiary. The terms and provisions of this Agreement are intended solely for the benefit of each party hereto and their respective successors or permitted assigns, and it is not the intention of the parties to confer third-party beneficiary rights upon any other Person other than any Person entitled to indemnity under Article XI. 14.09 No Assignment; Binding Effect. Neither this Agreement nor any right, interest or obligation hereunder may be assigned by any party hereto without the prior written consent of the other party hereto and any attempt to do so will be void, except (a) for assignments and transfers by operation of Law and (b) that Purchaser may assign any or all of its rights, interests and obligations hereunder (including without limitation its rights under Article XI) to (i) a wholly-owned subsidiary, provided that any such subsidiary agrees in writing to be bound by all of the terms, conditions and provisions contained herein, (ii) any post-Closing purchaser of all of the issued and outstanding stock of the Company or a substantial part of its assets or (iii) any financial institution providing purchase money or other financing to Purchaser or the Company from time to time as collateral security for such financing, but no such assignment shall relieve Purchaser of its obligations hereunder. Subject to the preceding sentence, this Agreement is binding upon, inures to the benefit of and is enforceable by the parties hereto and their respective successors and assigns. 14.10 Headings. The headings used in this Agreement have been inserted for convenience of reference only and do not define or limit the provisions hereof. 14.11 Invalid Provisions. If any provision of this Agreement is held to be illegal, invalid or unenforceable under any present or future Law, and if the rights or obligations of any party hereto under this Agreement will not be materially and adversely affected thereby, (a) such provision will be fully severable, (b) this Agreement will be construed and enforced as if such illegal, invalid or unenforceable provision had never comprised a part hereof, and (c) the remaining provisions of this Agreement will remain in full force and effect and will not be - 58 - 65 affected by the illegal, invalid or unenforceable provision or by its severance herefrom. 14.12 Governing Law. This Agreement shall be governed by and construed in accordance with the Laws of the State of New York applicable to a Contract executed and performed in such State, without giving effect to the conflicts of laws principles thereof. 14.13 Counterparts. This Agreement may be executed in any number of counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument. - 59 - 66 IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the duly authorized officer of each party hereto as of the date first above written. PRIMARK CORPORATION By: /s/ Joseph E. Kasputys -------------------------------- Name: Joseph E. Kasputys Title: Chairman, President & CEO BOWNE & CO., INC. By: /s/ R. H. Johnson -------------------------------- Name: Title: Chairman & CEO /s/ Robert G. Patterson -------------------------------- Robert G. Patterson ROB and MOLLY PATTERSON TRUST By: /s/ Robert G. Patterson, Trustee --------------------------------- Robert G. Patterson, Trustee - 60 - EX-2.7 4 STOCK PURCHASE AGREMENT DATED JANUARY 16, 1997 1 Exhibit 2.7 - - -------------------------------------------------------------------------------- - - -------------------------------------------------------------------------------- STOCK PURCHASE AGREEMENT among WEFA HOLDINGS, INC., THE STOCKHOLDERS OF WEFA HOLDINGS, INC. and PRIMARK CORPORATION Dated as of January 16, 1997 - - -------------------------------------------------------------------------------- - - -------------------------------------------------------------------------------- 2 TABLE OF CONTENTS
Page ---- 1. DEFINITIONS.................................................................................1 1.1. Certain Matters of Construction...............................................1 1.2. Certain Definitions...........................................................2 2. ACQUISITION................................................................................12 3. PAYMENT AND CLOSING........................................................................13 3.1. Purchase Price...............................................................13 3.2. Cash Statement...............................................................13 3.3. Time and Place of Closing....................................................14 3.4. Delivery.....................................................................14 4. REPRESENTATIONS AND WARRANTIES OF THE SELLERS..............................................15 4.1. Organization and Authority...................................................16 4.2. Authorization and Enforceability.............................................16 4.3. Non-Contravention, Etc.......................................................16 4.4. Title to Shares and Warrants.................................................16 5. REPRESENTATIONS AND WARRANTIES RELATING TO THE COMPANY....................................................................................17 5.1. Corporate Matters, etc.......................................................17 5.2. Financial Statements, etc....................................................19 5.3. Change in Condition..........................................................20 5.4. Environmental Matters, etc...................................................22 5.5. Real and Personal Property...................................................23 5.6. Intellectual Property Rights.................................................23 5.7. Certain Contractual Obligations..............................................25 5.8. Insurance, etc...............................................................27 5.9. Litigation, etc..............................................................28 5.10. Compliance with Laws, etc....................................................28 5.11. Tax Matters..................................................................28 5.12. Employee Benefit Plans.......................................................31 5.13. Brokers, etc.................................................................33 6. REPRESENTATIONS AND WARRANTIES OF THE BUYER................................................33
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6.1. Corporate Matters, etc.......................................................34 6.2. Financial Condition, etc.....................................................34 6.3. Investment Intent, Related Matters...........................................35 6.4. Litigation...................................................................35 6.5. Brokers, etc.................................................................35 7. CERTAIN AGREEMENTS OF THE PARTIES..........................................................35 7.1. Payment of Transfer Taxes and Other Charges..................................35 7.2. Confidentiality Covenant of the Buyer........................................35 7.3. Operation of Business, Related Matters.......................................36 7.4. Preparation for Closing......................................................37 7.5. Certain Payment and Subscription Rights......................................38 7.6. Non-Solicitation.............................................................38 7.7. Further Assurances...........................................................40 8. CONDITIONS TO THE OBLIGATION TO CLOSE OF THE BUYER.........................................40 8.1. Representations, Warranties and Covenants....................................40 8.2. Legality; Governmental Authorization; Litigation ............................41 8.3. Third Party Consents.........................................................42 8.4. Opinion of Counsel...........................................................42 8.5. Resignations of Directors....................................................42 8.6. Repayment of Debt............................................................42 8.7. Prior Owner Matters..........................................................42 8.8. General......................................................................42 9. CONDITIONS TO THE OBLIGATION TO CLOSE OF THE SELLERS....................................................................................43 9.1. Representations, Warranties and Covenants....................................43 9.2. Legality; Government Authorization; Litigation ..............................43 9.3. Letter of Credit Matters.....................................................44 9.4. Opinion of Counsel...........................................................44 9.5. General......................................................................44 10. TAX COVENANTS AND AGREEMENTS...............................................................44 10.1. General Intention of Parties.................................................44 10.2. Tax Returns..................................................................44 10.3. Payment of Taxes.............................................................45 10.4. Straddle Period..............................................................45 10.5. Purchase Price Reduction for Payment of Taxes ...............................46
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10.6. Notice.......................................................................46 10.7. No 338 Election..............................................................46 10.8. Tax Elections................................................................46 10.9. [Intentionally Omitted]......................................................46 10.10. Control of Audit.............................................................46 10.11. Cooperation..................................................................47 10.12. Access to Tax Records........................................................47 10.13. Disagreement Resolution......................................................47 11. EMPLOYMENT AND EMPLOYEE BENEFITS ARRANGEMENTS..............................................48 11.1. Employment of Affected Employees.............................................48 11.2. Substantially Equivalent Benefits............................................48 11.3. WARN.........................................................................49 11.4. Third-Party Rights...........................................................49 11.5. Indemnity....................................................................49 12. INDEMNIFICATION............................................................................50 12.1. Indemnification..............................................................50 12.2. Time Limitation on Indemnification...........................................50 12.3. Monetary Limitations on Indemnification......................................51 12.4. Third Party Claims, etc......................................................51 12.5. Certain Other Indemnity Matters. ............................................52 13. CONSENT TO JURISDICTION; JURY TRIAL WAIVER.................................................53 13.1. Consent to Jurisdiction......................................................53 13.2. WAIVER OF JURY TRIAL.........................................................54 14. TERMINATION................................................................................54 14.1. Termination of Agreement.....................................................54 14.2. Effect of Termination........................................................55 14.3. Time of Essence..............................................................55 15. MISCELLANEOUS..............................................................................55 15.1. Entire Agreement; Waivers....................................................55 15.2. Amendment or Modification....................................................56 15.3. Investigation; No Additional Representations.................................56 15.4. Severability.................................................................56 15.5. Successors and Assigns.......................................................57
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15.6. Sellers' Representative......................................................57 15.7. Notices......................................................................59 15.8. Public Announcements.........................................................60 15.9. Headings, etc................................................................60 15.10. Disclosure...................................................................60 15.11. Third Party Beneficiaries....................................................60 15.12. Counterparts.................................................................60 15.13. Governing Law................................................................61 15.14. Strict Construction..........................................................61 15.15. Expenses.....................................................................61 15.16. Joinder of Additional Stockholders...........................................61
6 EXHIBITS Exhibit 8.4 Form of Sellers' Counsel Opinion Exhibit 9.4 Form of Buyer's Counsel Opinion SCHEDULES Schedule 3.1 - Selling Shareholders; Shares and Warrants Schedule 4.3 - Sellers' Exceptions to Non-Contravention Schedule 5.1.1 - Company Foreign Qualification Schedule 5.1.2 - Company Exceptions to Non-Contravention Schedule 5.1.4 - Subsidiaries Schedule 5.3.2 - Changes in Condition, etc. Since Most Recent Financials Schedule 5.5.1 - Liens on Assets/Personal Property Schedule 5.5.2 - Leases, Owned Real Property and Related Matters Schedule 5.6 - Trademarks and other Intellectual Property Rights, etc. Schedule 5.7 - Contractual Obligations; Customers Schedule 5.8 - Insurance Schedule 5.9 - Litigation Matters Schedule 5.10 - Compliance with Law Schedule 5.11 - Tax Matters Schedule 5.12 - Company Plans and Benefit Arrangements, etc. Schedule 8.3 - Necessary Consents Schedule 6.4 - Buyer Litigation Schedule 7.3 - Operations of Business Schedule 8.3 - Necessary Consents 7 STOCK PURCHASE AGREEMENT This STOCK PURCHASE AGREEMENT (this "Agreement") is made as of the 16th of January, 1997, among WEFA Holdings, Inc., a Delaware corporation (the "Company"), each stockholder or holder of warrants of the Company signing below as of the date hereof or becoming party hereto pursuant to Section 15.16 hereof (each a "Seller") and Primark Corporation, a Michigan corporation (the "Buyer"). Recitals 1. Each of the Sellers respectively owns the number of issued and outstanding shares of Class A common stock of the Company, par value $.0001 per share (the "Class A Common Stock"), Class L-A common stock of the Company, par value $.0001 per share (the "Class L-A Common Stock"), Class B common stock of the Company, par value $.0001 per share (the "Class B Common Stock") and Class L-B common stock of the Company, $.0001 par value per share (the "Class L-B Common Stock"), and warrants to purchase Class A Common Stock and Class L- A Common Stock (the "Warrants"), in each case as set forth opposite such Seller's name on Schedule 3.1 hereto. The Class A Common Stock, Class L-A Common Stock, Class B Common Stock and Class L-B Common Stock are referred to collectively as the "Shares". 2. The Sellers desire to sell and transfer the Shares and Warrants to the Buyer and the Buyer desires to acquire the Shares and Warrants from the Sellers, all upon the terms and subject to the conditions set forth in this Agreement. Agreement Therefore, in consideration of the foregoing and the mutual agreements and covenants set forth below, the parties hereto hereby agree as follows: 1. DEFINITIONS. For purposes of this Agreement: 1.1. Certain Matters of Construction. In addition to the definitions referred to or set forth below in this Section 1: 8 (a) The words "hereof", "herein", "hereunder" and words of similar import shall refer to this Agreement as a whole and not to any particular Section or provision of this Agreement, and reference to a particular Section of this Agreement shall include all subsections thereof. (b) The words "party" and "parties" shall refer to the Sellers, the Company and the Buyer. (c) Definitions shall be equally applicable to both the singular and plural forms of the terms defined, and references to the masculine, feminine or neuter gender shall include each other gender. (d) Accounting terms used herein and not otherwise defined herein are used herein as defined by Generally Accepted Accounting Principles (as defined below) in effect as of the date hereof, consistently applied. (e) All references in this Agreement to any Exhibit or Schedule shall, unless the context otherwise requires, be deemed to be a reference to an Exhibit or Schedule as such may be amended in accordance with Section 7.4.4, as the case may be, to this Agreement, all of which are made a part of this Agreement. (f) The word "including" shall mean including without limitation. 1.2. Certain Definitions. The following terms shall have the following meanings: 1.2.1. "Action" shall mean any claim, action, cause of action or suit (in contract, tort or otherwise), inquiry, proceeding or investigation by or before any Governmental Authority. 1.2.2. "Affected Employees" shall mean all current employees of any of the WEFA Companies as of the Closing Date, including any such person who is on an approved leave of absence. -2- 9 1.2.3. "Affiliate" shall mean, as to the Company (or other specified Person), each Person directly or indirectly controlling, controlled by or under common control with the Company (or such specified Person). For purposes of this definition, the term "control" (including the terms "controlling," "controlled by" and "under common control with") means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities or otherwise. 1.2.4. "Agreement" is defined in the Preamble. 1.2.5. "Alex Brown" shall mean Alex. Brown & Sons Incorporated. 1.2.6. "Audited Financials" is defined in Section 5.2.1. 1.2.7. "Balance Sheet" is defined in Section 5.2.1. 1.2.8. "Balance Sheet Date" shall mean November 30, 1996. 1.2.9. "Business" shall mean the business of the WEFA Companies as such business is currently conducted. 1.2.10. "Business Day" shall mean any day on which banking institutions in New York, New York are customarily open for the purpose of transacting business. 1.2.11. "Buyer" is defined in the Preamble. 1.2.12. "By-laws" shall mean the corporate by-laws of a corporation, as from time to time in effect. 1.2.13. "Cash Consideration" is defined in Section 3.1. 1.2.14. "Cash Statement" is defined in Section 3.2. -3- 10 1.2.15. "Charter" shall mean the certificate or articles of incorporation or organization or other charter or organizational documents of any Person (other than an individual), each as from time to time in effect. 1.2.16. "Class A Common Stock" is defined in the Preamble. 1.2.17. "Class B Common Stock" is defined in the Preamble. 1.2.18. "Class L-A Common Stock" is defined in the Preamble. 1.2.19. "Class L-B Common Stock" is defined in the Preamble. 1.2.20. "Closing" is defined in Section 3.3. 1.2.21. "Closing Cash Balance" means, as of the Closing Date, the amount of cash balances of the WEFA Companies held in demand and time deposits (as reflected in the records of the depository), other cash equivalent investments (as determined in accordance with Generally Accepted Accounting Principles) or in actual currency and, in the case of amounts denominated in currencies other than United States Dollars, translated into United States Dollars at the then current exchange rate, net of (i) outstanding checks not yet presented for payment and (ii) funds held in escrow or as security deposits (but not $200,000 restricted amount for payroll purposes). 1.2.22. "Closing Date" is defined in Section 3.3. 1.2.23. "Code" shall mean the federal Internal Revenue Code of 1986, as amended. 1.2.24. "Company" is defined in the Preamble. 1.2.25. "Company Plans" is defined in Section 5.12. 1.2.26. "Confidentiality Agreement" is defined in Section 7.2. -4- 11 1.2.27. "Contracts" is defined in Section 5.7. 1.2.28. "Contractual Obligation" shall mean, with respect to any Person, any written contract, agreement, deed, mortgage, lease, license, indenture, note, bond, or other document or instrument (including, without limitation, any document or instrument evidencing or otherwise relating to any indebtedness, but excluding the Charter and Bylaws of such Person) to which or by which such Person is legally bound. 1.2.29. "Debt" shall mean all obligations of such Person (i) for borrowed money, (ii) evidenced by notes, bonds, debentures or similar instruments, but in no event including operating leases, (iii) in respect of capitalized leases and purchase money obligations for the acquisition of equipment and fixed assets, but in no event including trade payables, and (iv) in the nature of guarantees of obligations of the type described in clauses (i), (ii) and (iii) above of any other Person. 1.2.30. "Enforceable" shall mean, with respect to any Contractual Obligation, that such Contractual Obligation is the legal, valid and binding obligation of the Person in question, enforceable against such Person in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization or other laws affecting creditors' rights generally and general principles of equity (whether considered in a proceeding at law or in equity). 1.2.31. "Environmental Laws" shall mean any federal, state or local law as in effect as of the date hereof relating to (i) releases or threatened releases of Hazardous Substances, and (ii) the manufacture, handling, transport, use, treatment, storage or disposal of Hazardous Substances. 1.2.32. "ERISA" shall mean the federal Employee Retirement Income Security Act of 1974 or any successor statute, as amended and as in effect as of the date hereof 1.2.33. "Financial Statements" is defined in Section 5.2.1. -5- 12 1.2.34. "Generally Accepted Accounting Principles" shall mean generally accepted accounting principles in the United States as in effect and applied in the preparation of the Financial Statements. 1.2.35. "Government Contract" shall mean a contract between the Company and the federal government of the United States of America or any subdivision or agency thereof. 1.2.36. "Governmental Authority" shall mean any federal, state or local government, regulatory or administrative agency (or any department, bureau or division thereof). 1.2.37. "Governmental Order" shall mean any material decree, stipulation, determination or award entered by any Governmental Authority. 1.2.38. "Hazardous Substances" shall mean (i) substances defined in or regulated as toxic or hazardous under the following federal statutes and their state counterparts, as well as these statutes' implementing regulations, in each case, as amended and as in effect as of the date: the Hazardous Materials Transportation Act, the Resource Conservation and Recovery Act, the Comprehensive Environmental Response, Compensation and Liability Act, the Clean Water Act, the Safe Drinking Water Act, the Asbestos Hazard Emergency Response Act, the Atomic Energy Act, the Toxic Substances Control Act, the Federal Insecticide, Fungicide, and Rodenticide Act, and the Clean Air Act; (ii) petroleum and petroleum products, including crude oil and any fractions thereof; (iii) natural gas, synthetic gas and any mixtures thereof; (iv) PCBs and (v) asbestos. 1.2.39. "Heller" means Heller Financial, Inc., a Delaware corporation. 1.2.40. "Heller Debt" shall mean all Debt (including, without limitation, all outstanding principal, prepayment premiums, if any, and accrued interest, fees and expenses related thereto) of the WEFA Companies to Heller, whether under the Credit Agreement dated as of August 2, 1994 between WEFA, Inc. and Heller or otherwise. -6- 13 1.2.41. "HSR Act" is defined in Section 6.1.3. 1.2.42. "Income Tax" shall mean any (and in the plural "Income Taxes" shall mean all) federal, state, local or foreign income, gross receipts, franchise, estimated, alternative minimum taxes, assessments, or levies, in each case measured by income, arising under the laws of or imposed by the United States or any state, county, local or foreign government or subdivision or agency thereof, including without limitation all interest and penalties and additions with respect to any of the foregoing. 1.2.43. "Income Tax Return" shall mean all Tax Returns related to Income Taxes. 1.2.44. "Indemnifying Party" is defined in Section 12.1. 1.2.45. "Indemnitee" is defined in Section 12.1. 1.2.46. "Individual Sellers" is defined in Section 15.6. 1.2.47. "Intangibles" is defined in Section 5.6. 1.2.48. "Intellectual Property" means all patents and patent rights, trademarks and trademark rights, trade names and trade name rights, service marks and service mark rights, service names and service name rights, brand names, inventions, processes, formulae, copyrights and copyright rights, trade dress, business and product names, logos, slogans, trade secrets, industrial models, designs, methodologies, data bases and computer programs (including all source codes) and related documentation, technical information, manufacturing, engineering and technical drawings, know-how and all pending applications for and registrations of patents, trademarks, service marks and copyrights. 1.2.49. "Interim Financials" is defined in Section 5.2.1. 1.2.50. "IRS" is defined in Section 5.11. -7- 14 1.2.51. "Knowledge of Sellers" or "Known to Sellers" or "Sellers' Knowledge" means the actual knowledge of David Dominik, Marc Wolpow, Michael Krupka, William Mundell or Douglas Anthony. 1.2.52. "Leases" is defined in Section 5.5.2. 1.2.53. "Legal Requirement" shall mean any federal, state or local statute, ordinance, code, rule or regulation, or any Governmental Order, or any license, franchise, consent, approval, permit or similar right granted under any of the foregoing. 1.2.54. "Licenses" is defined in Section 5.6. 1.2.55. "Lien" shall mean any mortgage, pledge, lien, security interest, attachment or encumbrance, provided, however, that the term "Lien" shall not include (i) statutory liens for Taxes not yet due and payable, (ii) encumbrances in the nature of zoning restrictions, easements, rights or restrictions of record on the use of real property if the same do not materially detract from the value of the property encumbered thereby or materially impair the use of such property in the Business as currently conducted or proposed to be conducted, (iii) statutory or common law liens to secure landlords, lessors or renters under leases or rental agreements confined to the premises rented, (iv) deposits or pledges made in connection with, or to secure payment of, worker's compensation, unemployment insurance, old age pension programs mandated under applicable Legal Requirements or other social security, (v) statutory or common law liens in favor of carriers, warehousemen, mechanics and materialmen, statutory or common law liens to secure claims for labor, materials or supplies and other like liens, (vi) restrictions on transfer of securities imposed by applicable state and federal securities laws and (vii) liens securing the Heller Debt that will be released on the Closing Date. 1.2.56. "Losses" shall mean any and all losses, damages, deficiencies, awards, assessments, judgments, fines, penalties, costs and expenses (including, without limitation, reasonable legal costs and expenses); provided, however, that the amount of any such Losses for the purposes of indemnification hereunder shall be determined net of the sum of any amounts actually recovered by the Indemnitee under insurance policies -8- 15 with respect to such Loss. Buyer and Sellers agree that any indemnification payments under the Agreement shall be considered an adjustment to the Purchase Price. 1.2.57. "Material Adverse Effect" shall mean any change in or effect on the business of any of the WEFA Companies which has a material adverse effect on the business, assets or financial condition of the WEFA Companies taken as a whole. 1.2.58. "Options" means stock options granted under the Company's 1994 Stock Option Plan. 1.2.59. "Ordinary Course of Business" shall mean the ordinary course of the WEFA Companies' business consistent with current custom and practice. 1.2.60. "Payment Percentage" is defined in Section 12.3. 1.2.61. "Permits" is defined in Section 5.10. 1.2.62. "Person" shall mean any individual, partnership, corporation, association, trust, joint venture, unincorporated organization or other entity other than any Governmental Authority. 1.2.63. "Personalty Leases" is defined in Section 5.5.1. 1.2.64. "Post-Closing Partial Period" shall mean with respect to any Tax period beginning prior to the Closing Date and ending after the Closing Date, the portion of such period beginning the day after the Closing Date. 1.2.65. "Post-Closing Period" shall mean any Tax period beginning and ending after the Closing Date. 1.2.66. "Pre-Closing Partial Period" shall mean with respect to any Tax period beginning prior to the Closing Date and ending after the Closing Date, the portion of such period up to and including the Closing Date. -9- 16 1.2.67. "Pre-Closing Period" shall mean any Tax period ending on or prior to the Closing Date. 1.2.68. "Principal Seller" is defined in Section 7.6. 1.2.69. "Prior Owner" means WEF Associates CI Limited, a Channel Islands company. 1.2.70. "Prior Owner Debt" shall mean all Debt (including, without limitation, all outstanding principal, prepayment premiums, if any, and accrued interest, fees and expenses related thereto) of the WEFA Companies to the Prior Owner, whether under the Company's $4,500,000 Subordinated Note due 1999, dated August 2, 1994, or otherwise. 1.2.71. "Purchase Price" is defined in Section 3.1. 1.2.72. "Real Property" is defined in Section 5.5.2. 1.2.73. "Securities Act" is defined in Section 6.3. 1.2.74. "Sellers" is defined in the Preamble. 1.2.75. "Seller's Percentage" is defined in Section 3.1. 1.2.76. "Sellers' Representative" is defined in Section 14.6. 1.2.77. "Shares" is defined in the Recitals. 1.2.78. "Straddle Period" shall mean a taxable year or taxable period of any member of the WEFA Tax Group that begins before the Closing Date and ends after the Closing Date. 1.2.79. "Subsidiary" shall mean any Person of which the Company (or other -10- 17 specified Person) shall own directly or indirectly through a Subsidiary, a nominee arrangement or otherwise at least a majority of the outstanding capital stock (or other shares of beneficial interest) entitled to vote generally. 1.2.80. "Tax Attribute" shall mean any loss, deduction or credit for any Tax purpose or any other item that could give rise to a Tax Benefit. 1.2.81. "Tax Benefit" shall mean in the case of any Tax Return, the sum of the amount by which the Tax liability is reduced (or the Tax refund is increased) plus any interest relating to such Tax liability (or Tax refund), and in the case of a consolidated federal Income Tax Return or similar state, local or other Tax Return, the sum of the amount by which the Tax liability of the affiliated group of corporations is reduced (or the Tax refund is increased) plus any interest from such government or jurisdiction relating to such Tax liability (or Tax refund). 1.2.82. "Tax Election" shall include, but is not limited to, any election, claim, disclaimer, or waiver relating to any Tax, Tax Return, Tax Attribute or Tax Benefit. 1.2.83. "Tax" shall mean any (and in the plural "Taxes" shall mean all) federal, state, local or foreign income, gross receipts, franchise, estimated, alternative minimum, add-on minimum, sales, use, transfer, registration, value added, excise, severance, stamp, occupation, premium, profit, windfall profit, customs, duties, real property, personal property, capital stock, social security, employment, unemployment, disability, payroll, license, employee, and other taxes, withholding taxes, assessments, imposts, levies, and other charges of every kind and nature arising under the laws of or imposed by the United States, or any state, county, local or foreign government or subdivision or agency thereof, including, without limitation, all interest, penalties and additions with respect to any of the foregoing. 1.2.84. "Tax Return" shall mean all federal, state, local, and foreign Tax returns, Tax reports, claims for refund of Tax, and declarations of estimated Tax, or other statement relating to Taxes and any schedule or attachments to any of the foregoing or amendments thereto, including (where permitted or required) consolidated, combined or -11- 18 unitary returns for any group of entities. 1.2.85. "WARN" shall mean the Worker Adjustment and Retraining Notification Act of 1988. 1.2.86. "Warrants" is defined in the Recitals. 1.2.87. "WEFA Companies" shall mean, collectively, the Company, its Subsidiaries and CIEMEX, Inc., a Delaware corporation of which the Company owns 45% of the outstanding capital stock. 1.2.88. "WEFA Tax Group" shall mean, collectively, the affiliated group as defined in Section 1504 of the Code for which the Company is the common parent, without the exclusion of foreign corporations pursuant to section 1504(b)(3). 2. ACQUISITION. Upon the terms, subject to the conditions, and in reliance on the representations, warranties and covenants set forth herein, on the Closing Date, each of the Sellers agrees to sell, transfer and deliver to the Buyer the number of Shares and Warrants, as the case may be, set forth opposite such Seller's name in Schedule 3.1, as supplemented on account of the joinder of additional Sellers pursuant to Section 15.16 (or, in the case of Warrants, Shares in respect of which such Warrants have been exercised or exchanged, if any) and the Buyer agrees to purchase and acquire from each of the Sellers such Shares and Warrants for the consideration specified in Section 3.1. 3. PAYMENT AND CLOSING. 3.1. Purchase Price. In consideration of the sale and transfer of the Shares and Warrants by the Sellers to the Buyer at the Closing, the Buyer will pay an aggregate amount equal to the sum of (a) $45,000,000 plus (b) the Closing Cash Balance (the "Purchase Price"). The Purchase Price shall be payable at the Closing (i) by wire transfer of immediately available funds, to such accounts as the holders of the Heller Debt and the Prior Owner Debt may specify, as payment in full of the outstanding Heller Debt and Prior Owner Debt, respectively, as specified by the Company in writing to the Buyer on the Business Day preceding the Closing, (ii) -12- 19 by wire transfer of immediately available funds to such account as the Company may specify to pay all termination amounts for unexercised Options, as specified by the Company in writing to the Buyer on the Business Day preceding the Closing and (iii) by wire transfer of immediately available funds to such account as the Sellers' Representative may specify, of the balance of the Purchase Price (the "Cash Consideration"). The Cash Consideration shall be allocated among each of the Sellers in the respective percentages of Shares and Warrants (each a "Seller's Percentage") set forth on Schedule 3.1 (as supplemented on account of the joinder of additional Sellers in accordance with Section 15.16) and, in the case of the Warrants, net of the exercise price therefor. 3.2. Cash Statement. On the Closing Date, the Company shall deliver to the Buyer and the Sellers' Representative a statement (the "Cash Statement") reflecting the Company's best estimate of the Closing Cash Balance. The Buyer may dispute the amount reflected on the Cash Statement after the Closing by notifying the Sellers' Representative in writing of any such dispute, specifying the amount thereof and setting forth, in reasonable detail, the basis for such dispute within ten Business Days after the Buyer's receipt of the Cash Statement. In the event of such a dispute, the Sellers' Representative and the Buyer shall attempt to reconcile their differences and any resolution by them as to any disputed amounts shall be final, binding and conclusive on the parties hereto. If the Sellers' Representative and the Buyer are unable to reach a resolution within 15 days after the delivery to the Sellers' Representative of the Buyer's written notice of dispute with respect to the Cash Statement, the Sellers' Representative and the Buyer shall submit the items remaining in dispute for resolution to an accounting firm of national reputation mutually acceptable to the Buyer and the Sellers' Representative (or, in the absence of mutual agreement on the choice of accounting firm, one of the "big six" accounting firms chosen by lot, with each of the Buyer and the Sellers' Representative having the right to veto one firm so chosen), which shall, within 20 days after such submission, determine and report to the Sellers' Representative and the Buyer upon such remaining disputed items, and such report shall be final, binding and conclusive on the Sellers and the Buyer. The Sellers and the Buyer shall each be responsible for one-half of the fees and disbursements of such accounting firm. 3.3. Time and Place of Closing. The closing (the "Closing") shall take place at the offices of Ropes & Gray, One International Place, Boston, Massachusetts at 10:00 a.m. (local time) on a date jointly specified by the parties, which date shall be not later than five Business -13- 20 Days after the satisfaction or waiver of all conditions precedent set forth in Sections 8 and 9 or at such other time or place upon which the parties may agree (the day on which the Closing takes place being referred to herein as the "Closing Date"). 3.4. Delivery. At the Closing, each of the Sellers shall deliver to the Buyer the certificate or certificates, in genuine and unaltered form, evidencing all of the Shares and Warrants held by such Seller, duly endorsed in blank, against delivery by the Buyer of the Purchase Price. In addition, (i) Sellers shall deliver to Buyer an executed cross-receipt evidencing the sale to Buyer of all outstanding Warrants and Buyer's full payment therefor, and (ii) each of Heller and the Prior Owner shall have executed and delivered to Buyer letters or other documents evidencing payment in full of the Heller Debt and the Prior Owner Debt and the release by each of them of any and all security interests that either of them have in the shares or assets of any WEFA Company. 3.5. Further Assurances; Post-Closing Cooperation. (a) At any time or from time to time after the Closing, Sellers shall execute and deliver to Buyer such other documents and provide such materials and information and take such other actions as Buyer may reasonably request (i) more effectively to vest title to the Shares and Warrants in Buyer, (ii) to the full extent permitted by law, to put Buyer in actual possession and operating control of the Company and its assets and properties and books and records, (iii) to assist Buyer by executing votes, waivers, resignations and other documents with respect to certain corporate housekeeping measures with respect to the WEFA Companies and (iv) otherwise to cause Sellers to fulfill their obligations under this Agreement. (b) Following the Closing, each party will afford the other party, its counsel and its accountants, during normal business hours, reasonable access to the books, records and other data relating to the Business, the Company or the WEFA Companies in its possession with respect to periods prior to the Closing and Straddle Periods (with respect to Taxes), and the right to make copies and extracts therefrom, to the extent that such access may be reasonably required by the requesting party in connection with (i) the preparation of Tax Returns, (ii) the determination or enforcement of rights and obligations under this Agreement, (iii) compliance with Legal Requirements, (iv) the determination or enforcement of the rights and obligations of any party to this Agreement or (v) in connection with any actual or threatened Action. Further, -14- 21 both parties agree for a period extending six years after the Closing Date not to destroy or otherwise dispose of any such books, records and other data unless such party shall first offer in writing to surrender such books, records and other data to such other party and such other party shall not agree in writing to take possession thereof during the ten day period after such offer is made. (c) Notwithstanding anything to the contrary contained in this Section, if the parties are in an adversarial relationship in litigation or arbitration, the furnishing of information, documents or records in accordance with any provision of this Section shall be subject to applicable rules relating to discovery. 3.6. Merger. As soon as practicable following the Closing Date, a wholly-owned subsidiary of Buyer will be merged with and into the Company, with the Company as the surviving corporation. 4. REPRESENTATIONS AND WARRANTIES OF THE SELLERS. In order to induce the Buyer to enter into and perform this Agreement and to consummate the transactions contemplated hereby, each of the Sellers, severally and not jointly, represents and warrants to the Buyer, but only with respect to such Seller and the Shares and Warrants owned by such Seller that, except as set forth in the applicable Schedule to this Agreement, bearing the Section number of the representation sought to be modified: 4.1. Organization and Authority. Such Seller (other than an individual) is an entity duly formed, legally existing and in good standing under the laws of the jurisdiction of its organization and such Seller has full power and authority to enter into this Agreement, to carry out and perform its obligations hereunder and to consummate the transactions contemplated hereby. 4.2. Authorization and Enforceability. This Agreement has been duly authorized, executed and delivered by, and is Enforceable against, such Seller. 4.3. Non-Contravention, Etc. Except as set forth in Schedule 4.3, the execution and delivery of this Agreement by such Seller and the consummation by such Seller of the Closing -15- 22 hereunder in accordance with the terms and conditions of this Agreement do not and will not conflict with or result in the breach of any of the terms or provisions of, or constitute a default under, any Contractual Obligation to which such Seller is a party or by which such Seller is, or the Shares and Warrants to be sold by such Seller hereunder are, bound or any Legal Requirement applicable to such Seller or to the Shares and Warrants to be sold by such Seller. The existence of any such conflict, whether or not set forth on Schedule 4.3, shall not constitute a failure on the part of such Seller to comply with the requirements of Section 8.1.1 to the extent that any such conflict shall have been waived prior to the Closing in writing by the other party to such Contractual Obligation or by the appropriate Governmental Authority. No consent is required to be obtained by such Seller in connection with the execution, delivery and performance of this Agreement by such Seller or the sale of the Shares and Warrants to be sold by such Seller as contemplated hereby, except as set forth in Schedule 4.3, and other than any consent where the failure of such Seller to obtain such consent would not prevent the Sellers from consummating the Closing hereunder in accordance with the terms and conditions of this Agreement and would not prevent such Seller from performing in all material respects any of its obligations under this Agreement. 4.4. Title to Shares and Warrants. Such Seller is the record and beneficial owner of and has good and valid title to the Shares and Warrants set forth opposite such Seller's name on Schedule 3.1 (as supplemented on account of the joinder of additional Sellers pursuant to Section 15.16) which will be sold by such Seller as contemplated hereby, free and clear of any liens. 5. REPRESENTATIONS AND WARRANTIES RELATING TO THE COMPANY. In order to induce the Buyer to enter into and perform this Agreement and to consummate the transactions contemplated hereby, the Company represents and warrants to the Buyer that, except as set forth in the applicable Schedule to this Agreement, bearing the Section number of the representation sought to be modified: 5.1. Corporate Matters, etc. 5.1.1. Organization, Power and Standing of the Company. The Company is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Delaware and the Company has the corporate power and authority to own, -16- 23 operate or lease its properties and to carry on its business in all material respects as currently conducted. The Company is duly qualified, licensed or admitted to do business and is in good standing in those jurisdictions specified in Schedule 5.1.1, which are the only jurisdictions in which the ownership, use or leasing of its assets and properties, or the conduct or nature of its business, makes such qualification, licensing or admission necessary, except for those jurisdictions in which the adverse effects of all such failures by the Company to be qualified, licensed or admitted and in good standing would not have a Material Adverse Effect. 5.1.2. Non-Contravention, etc. Except for items listed on Schedule 5.1.2, neither the execution, delivery or performance of this Agreement nor the consummation of the Closing hereunder in accordance with the terms and conditions of this Agreement does or will constitute, result in or give rise to (i) a material breach, violation or default under any Legal Requirement applicable to any WEFA Company, (ii) a breach of or a default under any Charter or By-Laws provision of any WEFA Company, (iii) the imposition of any material Lien upon any asset of any WEFA Company or (iv) a material breach of or a default under (or the acceleration of the time for performance of any material obligation under) any material Contractual Obligation of any WEFA Company. Except as set forth in Schedule 5.1.2, no approval, consent, waiver, authorization or other order of, and no declaration, filing, registration, qualification or recording with, any Governmental Authority is required to be obtained or made by or on behalf of any WEFA Company in connection with the execution, delivery or performance of this Agreement and the consummation of the Closing hereunder in accordance with the terms and conditions of this Agreement, except those (i) which shall have been obtained or made on or prior to, and shall be in full force and effect at, the Closing Date and (ii) where failure to obtain such approval, consent, waiver, authorization or other order, or to make such declaration, filing, registration, qualification or recording has not had a Material Adverse Effect. 5.1.3. Title to Stock. The entire authorized capital stock of the Company consists of (i) 12,400,000 shares of Class A Common Stock, of which 1,019,414 shares are issued and outstanding and 517,375 shares are reserved for issuance upon exercise of the Options and Warrants, (ii) 2,000,000 shares of Class L-A Common Stock, of which 1,019,414 shares are issued and outstanding, (iii) 510,000 shares of Class B Common -17- 24 Stock, of which no shares are issued and outstanding and (iv) 90,000 shares of Class L-B Common Stock, of which no shares are issued and outstanding. The Shares constitute all of the issued and outstanding shares of common stock of the Company and are duly authorized, validly issued and are fully paid and nonassessable. The Shares and Warrants are held of record and, to the Sellers' Knowledge, beneficially by the Sellers as set forth on Schedule 3.1 (as supplemented on account of the joinder of additional Sellers pursuant to Section 15.16). Except for this Agreement, the Options (which will be terminated on the Closing Date) and the Warrants, there is no Contractual Obligation pursuant to which the Company has granted any option, warrant or other right to any Person to acquire the shares of common stock or any other securities of, or equity interests in, the Company. 5.1.4. Subsidiaries. Schedule 5.1.4 sets forth a true and complete list of all Subsidiaries of the Company, including the name and jurisdiction of organization of each such Subsidiary. Each Subsidiary listed on Schedule 5.1.4 is a corporation or other entity duly formed, validly existing and in good standing under the laws of its jurisdiction of organization, has the power and authority to own, operate or lease the properties and assets now owned, operated or leased by such Subsidiary and to carry on its business in all material respects as currently conducted, and is duly qualified, licensed or admitted to do business as a foreign corporation or other entity and in good standing in each jurisdiction indicated on Schedule 5.1.4, which are the only jurisdictions in which the ownership, use or leasing of such Subsidiary's assets and properties, or the conduct or nature of its business, makes such qualification, licensing or admission necessary, except for those jurisdictions in which the adverse effects of all such failures by such Subsidiary to be qualified, licensed or admitted and in good standing would not have a Material Adverse Effect. Except as set forth in Schedule 5.1.4, each Subsidiary listed on Schedule 5.1.4 is wholly-owned by the Company (either directly or indirectly by way of ownership through another Subsidiary listed on Schedule 5.1.4). 5.1.5. Charter and By-laws. The Company has heretofore delivered or made available to the Buyer true and complete copies of the Charter and By-laws of each WEFA Company, in each case as in effect on the date hereof. 5.2. Financial Statements, etc. -18- 25 5.2.1. Financial Information. The Buyer has been furnished with each of the following: (a) The consolidated audited balance sheet of the Company and its consolidated Subsidiaries as of December 31, 1995 and the related statements of earnings and shareholders equity and cash flows for the fiscal year then ended, accompanied by the notes thereto and the report thereon of Price Waterhouse LLP (collectively, the "Audited Financials" and, together with the Interim Financials (as defined in paragraph (b) below), the "Financial Statements"). (b) The unaudited consolidated balance sheet (the "Balance Sheet") of the Company and its consolidated Subsidiaries as of the Balance Sheet Date and related unaudited consolidated statements of earnings and cash flows for the eleven-month period then ended (collectively the "Interim Financials"). 5.2.2. Character of Financial Information. The Financial Statements were prepared in accordance with Generally Accepted Accounting Principles consistently applied throughout the periods specified therein and present fairly, in all material respects, the consolidated financial position and results of operations of the Company and its Subsidiaries as of the dates and for the periods specified therein in accordance with Generally Accepted Accounting Principles, subject in the case of the Interim Financials to the absence of footnotes and to normal year-end adjustments. 5.3. Change in Condition. 5.3.1. Accounting Practices. Since the Balance Sheet Date the Company has not made or agreed to make, and has not permitted any of its Subsidiaries to make or agree to make, any material change in its methods of accounting or accounting practices. 5.3.2. Since Balance Sheet Date. Except for matters set forth in Schedule 5.3.2, since the Balance Sheet Date the Business has been conducted only in the Ordinary Course of Business (except as otherwise required or permitted by the terms of this -19- 26 Agreement) and: (a) Other than transactions between or among the Company and its Subsidiaries, neither the Company nor any of its Subsidiaries has: (i) entered into any Contractual Obligation other than this Agreement relating to, or authorized (A) the sale of any capital stock or equity interest in any WEFA Company (other than the issuance of Options pursuant to the 1994 Stock Option Plan), (B) the purchase of assets other than in the Ordinary Course of Business or (C) any merger, consolidation or other business combination; (ii) settled or agreed to settle any material Action; (iii) mortgaged, pledged or subjected to any Lien any of their assets other than (A) conditional sales or similar security interests granted in connection with the lease or purchase of equipment or supplies in the Ordinary Course of Business, and (B) Liens disclosed on Schedule 5.5.1; (iv) sold, leased, transferred or exchanged any material property for less than the fair value thereof; (v) declared or paid any dividends on any shares of its capital stock; (vi) made any increase in the salary, wages or other compensation of any officer, employee or consultant of any WEFA Company, except for increases in the Ordinary Course of Business or as required by any employment or other agreement, any policy or any bonus, pension, profit sharing or other plan or commitment; (vii) (A) incurred Debt in an aggregate principal amount exceeding $100,000 (net of any amounts discharged during such period) (of -20- 27 which no more than $25,000 shall be on account of items other than new computer equipment), other than advances under the revolving credit facility included in the Heller Debt or (B) made any voluntary purchase, cancellation, prepayment or complete or partial discharge in advance of a scheduled payment date with respect to, or waiver of any right of any WEFA Company under, any Debt of or owing to any WEFA Company in an amount exceeding $25,000 other than under the revolving credit facility included in the Heller Debt; (viii) experienced any physical damage, destruction or other casualty loss affecting any of the plant, real or personal property or equipment of any WEFA Company that would, after taking into account any insurance recoveries payable in respect thereof, have a Material Adverse Effect; (ix) made any write-off or write-down of or any determination to write off or write down any of the assets and properties of any WEFA Company in an aggregate amount exceeding $25,000; (x) authorized or experienced any (x) material amendment of the certificate or articles of incorporation or by-laws of any WEFA Company, or (y) recapitalization, reorganization, liquidation or dissolution of any WEFA Company; (xi) incurred or authorized capital expenditures or commitments for additions to property, plant or equipment of any WEFA Company in an aggregate amount exceeding $100,000; or (xii) entered into any transaction between any WEFA Company and a Seller, any officer, director or Affiliate (other than a WEFA Company) of any Seller (A) outside the Ordinary Course of Business or (B) other than on an arm's-length basis. -21- 28 (b) None of the WEFA Companies has entered into any Contractual Obligation to do any of the actions referred to in clause (a) above; and (c) There has not been any material adverse change in the Business and financial condition of the WEFA Companies, taken as a whole. 5.4. Environmental Matters, etc. Each of the WEFA Companies is as of the date hereof, and has been for the past two years, in compliance in all material respects with all Environmental Laws. There is as of the date hereof no Action pending or, to the Knowledge of Sellers threatened, against any WEFA Company in respect of, nor has any WEFA Company received any written notice alleging (i) noncompliance by any WEFA Company with any Environmental Laws or (ii) the release or threatened release into the environment of any Hazardous Substance by any WEFA Company or (iii) the handling, storage, use, transportation or disposal of any Hazardous Substance by any WEFA Company. No WEFA Company has any material liability, present and past, under CERCLA, including, without limitation, as the result of its ownership or operation of any "facility" as defined in CERCLA, or its arrangement for disposal, treatment or transport of "hazardous substances," also as defined in CERCLA. 5.5. Real and Personal Property. 5.5.1. The applicable WEFA Company has valid title to all of its material personal property, and such material personal property is not subject to any Lien except as set forth on Schedule 5.5.1. (i) All material leases and material licensing agreements for personal property ("Personalty Leases") leased or licensed by any of the WEFA Companies are valid and in full force and effect in all material respects and are listed on Schedule 5.5.1 (other than agreements for the acquisition of database information, the licensing of subscription and economic data to customers and off-the shelf software licenses, in each case in the Ordinary Course of Business); (ii) the WEFA Companies have performed in all material respects all obligations required to be performed by them under such leases and licenses; and (iii) no event or condition exists which constitutes or, with the giving of notice or the passage of time or both, would constitute a material default by any of the WEFA Companies as lessee or licensee under such leases and -22- 29 licenses. 5.5.2. Schedule 5.5.2 sets forth a list of all real property owned by any of the WEFA Companies, and all real property leased to the WEFA Companies (the AReal Property@). Except as has not had a Material Adverse Effect, (i) all leases (the "Leases") of Real Property leased to the WEFA Companies are valid and in full force and effect; (ii) the WEFA Companies have performed in all material respects all obligations required to be performed by them under such Leases; and (iii) no event or condition exists which constitutes or, with the giving of notice or passage of time or both, would constitute a material default by any of the WEFA Companies as lessee under such Lease. 5.6. Intellectual Property Rights. (a) Schedule 5.6(a) sets forth a complete and accurate list of (i) all patents, including all reissues, reexaminations, continuations, continuations-in-part and divisions thereof, all trademarks, service marks and designs that, in the case of each of the foregoing items described in this clause (i), have been issued to or registered by any WEFA Company; (ii) all pending patent applications and all pending trademark, service mark and design applications, in each case filed by or on behalf of any WEFA Company; and (iii) all material unregistered trademarks, service marks, trade names, service names, trade dress design rights, topography rights, logos and assumed names which are owned by any WEFA Company. Schedule 5.6(a) also identifies each license or similar agreement entered into by any WEFA Company with respect to any Intellectual Property other than in the Ordinary Course of Business. (b) Except as disclosed in Schedule 5.6(b), a WEFA Company is the sole and exclusive owner of the Intellectual Property described in clause (i) of Section 5.6(a) and listed in Schedule 5.6(a). All registration and maintenance fees that have become due and payable to any governmental agency in respect of any Intellectual Property owned by a WEFA Company and for which a patent or registration has been issued, have been paid, and no act has been done or omitted to be done by any WEFA Company or, to the Knowledge of Sellers, any licensee, distributor, sublicensee or subdistributor thereof, to impair or dedicate to the public or entitle any governmental authority to cancel, forfeit, modify or hold abandoned any of such Intellectual Property so owned by a WEFA Company and listed in Schedule 5.6(a), and to the Knowledge of Sellers, all such Intellectual Property so owned and listed is valid and enforceable in all material respects. -23- 30 (c) Except as set forth in Schedule 5.6(c): (i) there are no pending or, to Sellers' Knowledge, threatened suits, written claims or written oppositions by any person against the ownership by any WEFA Company or the use by any WEFA Company of any of the Intellectual Property owned or used by it in its Business as currently conducted; (ii) the WEFA Companies are in compliance with the terms of all licenses, leases or other agreements under which the right to use any of the Intellectual Property listed in Schedule 5.6(a) arose or pursuant to which a WEFA Company licenses or otherwise distributes such Intellectual Property to any third party except where noncompliance has not had a Material Adverse Effect; and (iii) to the Knowledge of Sellers, the use of any Intellectual Property by a WEFA Company in connection with the conduct of the business of the WEFA Companies as currently conducted does not infringe upon or otherwise violate in any material respect any right of any third party. (d) Each WEFA Company owns or is licensed or otherwise has the right to use, all material Intellectual Property used by it in, or necessary for it to conduct, its businesses as currently conducted, free and clear of all Liens, including without limitation (i) material Computer Programs and databases, and (ii) material user manuals, technical manuals or other documentation related to such Intellectual Property, in each case which are offered or made available to customers by the WEFA Companies. (e) Except as disclosed in Schedule 5.6(e), the material Computer Programs and material databases used in the conduct of the Business to date (including without limitation the data, articles and other content included therein) are (i) owned or licensed by a WEFA Company, or (ii) currently in the public domain or otherwise available to the WEFA Companies without the approval or consent of any third party, or (iii) included in such database or computer program or system pursuant to a written license or lease or other consent from a third party. (f) The Company has a policy requiring all employees of the WEFA Companies to maintain the confidentiality of all trade secrets and other confidential information material to the conduct of the Business. (g) The material Computer Programs listed in Schedule 5.6(e) as owned by a WEFA Company (i) function in all material respects reasonably in accordance with the specifications and user manuals therefor published by the applicable WEFA Company, subject to -24- 31 errors and bugs that arise and are corrected in the normal course of the applicable WEFA Company's business; and (ii) to the Knowledge of Sellers, do not contain any software routines that in any material respect cause harm, disable or permit unauthorized access to software, hardware or data. The Company has a policy to use anti-virus programs in the computer systems of the WEFA Companies. 5.7. Certain Contractual Obligations. Set forth on Schedule 5.7(a) is a true and complete list of all of the following Contractual Obligations (including all amendments or modifications thereof) of the WEFA Companies: (a) All collective bargaining agreements and all written employment or individual consulting agreements pursuant to which services are rendered to the WEFA Companies (other than the Company Plans), in each case which are likely to involve payments by or on behalf of a WEFA Company in excess of $25,000 per year; (b) All material Contractual Obligations under which any WEFA Company is or will after the Closing be restricted in any material respect from carrying on any business or other activities anywhere in the world; (c) All Contractual Obligations (but excluding the Options) to sell or otherwise dispose of any assets having a fair market value in excess of $25,000 except in the Ordinary Course of Business; (d) All Contractual Obligations between any WEFA Company on the one hand and any Affiliate of any WEFA Company (other than the WEFA Companies) on the other hand in excess of $25,000; (e) All Contractual Obligations (including, without limitation, partnership and joint venture agreements) under which (i) any WEFA Company has any liability or obligation for Debt, or constituting or giving rise to a guarantee of any liability or obligation of any Person (other than any WEFA Company) or (ii) any Person has any liability or obligation constituting or giving rise to a guarantee of any liability or obligation of any WEFA Company, in either case involving any Debt or liability in -25- 32 excess of $25,000 individually; (f) All Contractual Obligations pursuant to which any WEFA Company incurred an obligation to pay any amounts in excess of $25,000 in respect of indemnification obligations, purchase price adjustment or otherwise in connection with any (i) acquisition or disposition of assets constituting a business or securities representing a controlling interest in any Person, (ii) merger, consolidation or other business combination, or (iii) series or group of related transactions or events of a type specified in subclauses (i) through (ii); (g) All Contractual Obligations (including Government Contracts) pursuant to which any WEFA Company may be expected to perform services with a value in excess of $25,000 and which cannot be canceled by any WEFA Company within 30 days without penalty, except for contracts entered into in the Ordinary Course of Business; and (h) All Contractual Obligations pursuant to which any WEFA Company may be obligated to pay for goods and services to be delivered or performed in excess of $25,000 per year, except for purchase orders issued and contracts entered into in the Ordinary Course of Business. Each of the Contractual Obligations listed on Schedule 5.7(a), as in effect on the date hereof, shall be referred to herein collectively as the "Contracts". No breach or default in performance by any WEFA Company under any of the Contracts has occurred and is continuing, and no event has occurred which with notice or lapse of time or both would constitute such a breach or default, other than any breach or default which has not had a Material Adverse Effect. To the Knowledge of Sellers, no material breach or default by any other Person under any of the Contracts has occurred and is continuing, and no event has occurred which with notice or lapse of time or both would constitute such a material breach or default, except a breach or default which has not had a Material Adverse Effect. Schedule 5.7(i) sets forth a list of United States customers that have accounted for at least 90% of the United States sales of the WEFA Companies for the period from December 1, 1995 through November 30, 1996. By the Closing Date the Company shall update Schedule 5.7(i) pursuant to Section 7.4.4 to set forth a list of customers that have accounted for at least 90% of the worldwide sales of the WEFA Companies for the period from -26- 33 January 1, 1996 through December 31, 1996. 5.8. Insurance, etc. Schedule 5.8 is a true and accurate list as of the date hereof of all material policies or binders of insurance covering the operations of the WEFA Companies. The Company has delivered or made available to the Buyer true and accurate copies of all such policies or binders as in effect on the date hereof. None of the WEFA Companies is in any material default with respect to its obligations under any of such policies. 5.9. Litigation, etc. Except as set forth on Schedule 5.9, as of the date hereof, there is no Action against any WEFA Company pending and, to the Knowledge of Sellers, no material Action against any WEFA Company is threatened. There is no Action pending or, to the Knowledge of Sellers, threatened against the Company or the Sellers which seeks rescission of or seeks to enjoin the consummation of this Agreement or any of the transactions contemplated hereby. 5.10. Compliance with Laws, etc. The operations of the Business and the WEFA Companies are in compliance as of the date hereof in all material respects with applicable Legal Requirements, except as set forth in Schedule 5.10 or as has not had a Material Adverse Effect. The WEFA Companies have been granted all licenses, permits, consents, approvals, franchises and other authorizations under any Legal Requirement necessary for and material to the conduct of the Business, except where the failure to obtain such licenses, permits, consents, approvals, franchises or other authorization has not had a Material Adverse Effect (the "Permits"). The Company has not received any written notice that any Governmental Authority or other licensing authority will revoke, cancel, rescind, materially modify or refuse to renew in the ordinary course any of the Permits. 5.11. Tax Matters. Except as set forth on Schedule 5.11: (i) Each of the members of the WEFA Tax Group, including the affiliated, combined or unitary group of which any such corporation or other entity is or was a member, has filed or has -27- 34 had filed on its behalf all material Tax Returns that it was required to file on or before the date hereof (or the Closing Date), and has paid (within the term and the manner prescribed by law) all Taxes shown thereon as owing; (ii) all deficiencies asserted in writing and any assessments made as a result of any examinations of the Tax Returns referred to in clause (i) by the Internal Revenue Service ("IRS") or the appropriate state, local or foreign taxing authority have been paid in full; (iii) none of the members of the WEFA Tax Group has received any written notice of any audit, claim, deficiency or assessment pending or proposed with respect to Taxes of any of the members of the WEFA Tax Group; (iv) none of the members of the WEFA Tax Group is party, nor will be a party as of the Closing Date, to any written agreements or waivers extending the statutory period of limitation applicable to any Taxes of any members of the WEFA Tax Group; (v) none of the members of the WEFA Tax Group (A) files or is required to file any combined, consolidated or unitary federal, state, local or foreign Tax Returns (other than Tax Returns filed by a group the common parent of which was the Company) and (B) is a party to any Contractual Obligation relating to the allocation or sharing of Taxes; (vi) there are no liens with respect to Taxes upon any of the properties or assets of any members of the WEFA Tax Group other than for current Taxes not yet due and payable; (vii) the members of the WEFA Tax Group have withheld and timely paid to the appropriate governmental authority all amounts -28- 35 required to be withheld by sections 1441 and 1442 of the Code or similar provisions under any foreign laws) and have, within the time and in the manner prescribed by law, withheld from employee wages and paid over to the proper governmental authorities all amounts required to be so withheld and paid over under all applicable laws; (viii) the members of the WEFA Tax Group have not requested any extension of time within which to file any Tax Return, which Tax Return has not since been filed; (ix) the Company has filed, as a common parent corporation of an "affiliated group" (within the meaning of section 1504(a) of the Code), a consolidated return for Federal income tax purposes on behalf of itself and all of the members of the WEFA Tax Group which are "includible corporations" (within the meaning of section 1504(b) of the Code); (x) the members of the WEFA Tax Group are not and will not become a party to any agreement, contract or arrangement that would result, separately or in the aggregate, in the payment of any "excess parachute payments" within the meaning of section 280G of the Code; (xi) no power of attorney has been granted by the members of the WEFA Tax Group with respect to any matter relating to Taxes which is currently in force; (xii) the members of the WEFA Tax Group have not participated (nor will the members of the WEFA Tax Group participate prior to the Closing Date) in or cooperated with an international boycott within the meaning of section 999 of the Code; -29- 36 (xiii) the members of the WEFA Tax Group have not filed (and will not file prior to the Closing Date) a consent pursuant to section 341(f)(2) of the Code or agreed to have section 341(f)(2) of the Code apply to any disposition of a "subsection (f) asset" (as such term is defined in section 341(f)(4) of the Code) owned by the members of the WEFA Tax Group; (xiv) the members of the WEFA Tax Group are not required to include in income any adjustments pursuant to section 481(a) of the Code by reason of a voluntary change in accounting method initiated by the members of the WEFA Tax Group and the members of the WEFA Tax Group have not received written notice that the Internal Revenue Service has proposed any such adjustment or change in accounting method; (xv) the members of the WEFA Tax Group are not and have not been United States real property holding companies (as defined in section 897(c)(2) of the Code) during the applicable period specified in section 897(c)(1)(A)(ii) of the Code; and (xvi) the Buyer has been furnished Financial Statements, including reserves for the payment of all Taxes required to be accrued that are not yet due and payable. 5.12. Employee Benefit Plans. (a) Schedule 5.12 lists each employee benefit plan, program or policy (including, without limitation, each "employee benefit plan" within the meaning of section 3(3) of ERISA) that is maintained or otherwise contributed to by the Company or any of its Subsidiaries as of the date hereof (collectively, "Company Plans"). (b) With respect to each of the Company Plans, the Company has made available to the Buyer a current, accurate and complete copy (or, to the extent no such -30- 37 copy exists, an accurate description) thereof and, to the extent applicable, (i) any related trust agreement, annuity contract or other funding instrument; (ii) any summary plan description, (iii) the two most recent annual Forms 5500 (if applicable) with respect to such Company Plans and (iv) if such Company Plan is intended to be a qualified single employer plan under section 401(a) of the Code, the most recent favorable determination letter received from the Internal Revenue Service. (c) Except as set forth in Schedule 5.12, (i) each Company Plan is in compliance as of the date hereof in all material respects with the applicable provisions, if any, of ERISA and the Code; (ii) each Company Plan that is intended to be qualified within the meaning of section 401(a) of the Code has received a favorable determination letter as to its qualification; (iii) no "reportable event" (as such term is used in section 4043 of ERISA), "prohibited transaction" (as such term is used in section 4975 of the Code or section 406 of ERISA) or "accumulated funding deficiency" (as such term is used in section 412 or 4971 of the Code) has heretofore occurred with respect to any Company Plan subject to ERISA; (iv) no material litigation or administrative or other proceedings involving the Company Plans have occurred or to the Knowledge of Sellers are threatened; (v) each WEFA Company has complied in all material respects with the health care continuation requirements of section 601, et. seq., of ERISA with respect to employees and their spouses, former spouses and dependents; and (vi) no WEFA Company has obligations under any Company Plan to provide health benefits to former employees of a WEFA Company except as specifically required by law. (d) No WEFA Company nor any ERISA Affiliate of a WEFA Company nor any other Person controlled by or under common control with any of the foregoing within the meaning of section 4001 of ERISA has at any time maintained or contributed to any "multiemployer plan" (as such term is defined in section 3(37) of ERISA) (e) No WEFA Company is in default in any material respect in performing any of its contractual obligations under any of the Company Plans or any related trust agreement or insurance contract. All material contributions and other payments required to be made by any WEFA Company to any Company Plan with respect to any period ending before or at or including the Closing Date have been made or reserves adequate -31- 38 aside therefor and have been or will be reflected in the Financial Statements in accordance with GAAP. There are no material outstanding liabilities of any Company Plan other than liabilities for benefits to be paid to participants in such Company Plan and their beneficiaries in accordance with the terms of such Company Plan. (f) No event has occurred, and to the Knowledge of Sellers there exists no condition or set of circumstances in connection with any Company Plan, under which any WEFA Company, directly or indirectly (through any indemnification agreement or otherwise), could reasonably be expected to be subject to any material liability under section 409 of ERISA, section 502(i) of ERISA, Title IV of ERISA or section 4975 of the Code. (g) No transaction contemplated by this Agreement will result in material liability to the PBGC under section 302(c)(ii), 4062, 4063, 4064 or 4069 of ERISA, or otherwise, with respect to any WEFA Company, Buyer or any corporation or organization controlled by or under common control with any of the foregoing within the meaning of section 4001 of ERISA, and no event or condition exists or has existed which could reasonably be expected to result in any such material liability with respect to Buyer, any WEFA Company or any such corporation or organization. (h) No material benefit under any Company Plan, including, without limitation, any severance or parachute payment plan or agreement, will be established or become accelerated, vested, funded or payable by reason of any transaction contemplated under this Agreement, except the exercisability of Options. 5.13. Brokers, etc. Except for payments to be made by the Company to Alex Brown, no broker, finder, investment bank or similar agent is entitled to any brokerage or finder's fee in connection with the transactions contemplated by this Agreement based upon agreements or arrangements made by or on behalf of the Sellers, the Company or any of their respective Affiliates. 6. REPRESENTATIONS AND WARRANTIES OF THE BUYER. In order to induce each Seller to enter into and perform this Agreement and to consummate the transactions -32- 39 contemplated hereby, the Buyer represents and warrants to each Seller as follows: 6.1. Corporate Matters, etc. 6.1.1. Organization, Power and Standing of the Buyer. The Buyer is a corporation duly incorporated, validly existing and in good standing under the laws of the jurisdiction of its incorporation and has full power and authority, corporate and otherwise, to enter into this Agreement, to carry out and perform its obligations hereunder and to consummate the transactions contemplated hereby. 6.1.2. Authorization and Enforceability. This Agreement has been duly authorized, executed and delivered by, and is Enforceable against, the Buyer. 6.1.3. Non-Contravention, etc. The execution, delivery and performance of this Agreement by the Buyer and the consummation by the Buyer of the Closing hereunder in accordance with the terms and conditions of this Agreement does not and will not conflict with or result in the breach of any terms or provisions of, or constitute a default, under any Contractual Obligation of or the Charter or By-Laws of the Buyer or a breach of any Legal Requirement applicable to the Buyer. Except for satisfaction of the notification requirements of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"), no consent is required to be obtained or made by or on behalf of the Buyer in connection with the execution, delivery or performance of this Agreement and the consummation of the transactions contemplated hereby, except (i) for items which shall have been obtained or made on or prior to, and shall be in full force and effect at, the Closing Date and (ii) where failure to obtain such consent would not materially and adversely affect the Buyer's ability to consummate the Closing hereunder in accordance with the terms and conditions of this Agreement and would not prevent the Buyer from performing in all material respects any of its obligations under this Agreement. 6.2. Financial Condition, etc. The Buyer has as of the date hereof and will have as of the Closing available funds in an aggregate amount sufficient to (i) pay the Purchase Price and all contemplated fees and expenses related to the transactions contemplated by this Agreement and (ii) provide adequate working capital for the Business. -33- 40 6.3. Investment Intent, Related Matters. The Buyer is purchasing the Shares and Warrants for its own account and has the present intention of holding the Shares and Warrants for investment purposes and not with a view to, or for sale in connection with, any distribution thereof in violation of any federal or state securities laws. The Buyer is an "accredited investor" within the definition set forth in Rule 501(a) of the Securities Act of 1933, as amended (the "Securities Act"). 6.4. Litigation. To the knowledge of the Buyer, as of the date hereof, there is no Action pending or threatened (i) against the Buyer or any of its Affiliates which has had a material adverse effect on the ability of the Buyer to perform its obligations under this Agreement or (ii) which seeks rescission of or seeks to enjoin the consummation of this Agreement or any of the transactions contemplated hereby 6.5. Brokers, etc. No broker, finder, investment bank or similar agent is entitled to any brokerage or finder's fee in connection with the transactions contemplated by this Agreement based upon agreements or arrangements made by or on behalf of the Buyer or any of its Affiliates. 7. CERTAIN AGREEMENTS OF THE PARTIES. 7.1. Payment of Transfer Taxes and Other Charges. The Buyer shall be responsible for and shall pay all stock transfer Taxes, real property transfer Taxes, sales Taxes, documentary stamp Taxes, recording charges and other similar Taxes arising in connection with the transactions contemplated by this Agreement. Each of the parties hereto shall prepare and file, and shall fully cooperate with each other party with respect to the preparation and filing of, any Tax Returns and other filings relating to any such Taxes or charges as may be required. 7.2. Confidentiality Covenant of the Buyer. The Confidentiality Agreement fully executed in June, 1996 as amended and modified through the date hereof (the "Confidentiality Agreement") by and between the Buyer and WEFA, Inc. on behalf of the Company and the Sellers is hereby confirmed and acknowledged as a continuing obligation of the parties to the Closing Date. -34- 41 7.3. Operation of Business, Related Matters. From the date hereof and on and prior to the Closing Date, except as otherwise permitted or required by this Agreement, the Company will cause the WEFA Companies to conduct the Business in the Ordinary Course of Business and substantially as presently operated and use reasonable efforts to maintain the value of the Business as a going concern. From the date hereof and on and prior to the Closing Date no Seller will sell, pledge or otherwise encumber his, her or its Shares or Warrants without the prior written consent of the Buyer. From the date hereof and prior to the Closing Date, Sellers (other than Heller) shall cause the WEFA Companies not to, without the prior written consent of Buyer, which will not be unreasonably withheld: (a) enter into any transactions otherwise than on an arms' length basis with any Seller or any other Affiliate of the WEFA Companies (other than as contemplated by this Agreement and transactions in the Ordinary Course of Business among the WEFA Companies); (b) pay any compensation other than in the Ordinary Course of Business or increase any compensation of any officer or employee other than such increases in compensation for employees as may be made in the Ordinary Course of Business; (c) incur any Debt (including, without limitation, any capital lease) except in the Ordinary Course of Business and in no event in excess of $100,000 in the aggregate (of which no more than $25,000 shall be on account of items other than new computer equipment) other than revolving credit Heller Debt; (d) amend the Charter or Bylaws of any WEFA Company or sell, lease or otherwise dispose of any material assets (except (i) for sales or other dispositions of inventory or excess equipment in the Ordinary Course of Business and (ii) as may otherwise be specifically permitted by the terms of this Agreement); (e) make any material change in the Business or operations of any of the WEFA Companies; -35- 42 (f) make any capital expenditure in excess of $100,000 with respect to the Business or enter into any contract or commitment therefor; (g) take any of the actions described in Section 5.3.2(a); or (h) enter into any Contractual Obligation to do any of the actions referred to in this Section 7.3. The Buyer shall respond with reasonable promptness to any and all requests by the Sellers for consent(s) for any WEFA Company to take any of the actions specified in this Section 7.3. 7.4. Preparation for Closing. The Buyer on the one hand and the Sellers on the other hand will each use all reasonable best efforts to bring about the fulfillment of each of the conditions precedent to the obligations of the other set forth in this Agreement, subject to the following: 7.4.1. HSR Filing. Promptly upon execution and delivery of this Agreement, each of Buyer and the Company will prepare and file, or cause to be prepared and filed, with the appropriate Governmental Authorities, a notification with respect to the transactions contemplated by this Agreement pursuant to the HSR Act, supply all information requested by Governmental Authorities in connection with the HSR notification and cooperate with each other in responding to any such request. Buyer shall be solely responsible for all filing fees required to be paid in connection therewith. 7.4.2. Consents, etc. Prior to the Closing Date, the Company and Sellers (other than Heller) shall use reasonable efforts (but the Company and the Sellers shall have no obligation to pay any fees or incur any expenses) to secure required written consents or waivers under or with respect to the Contracts indicated on Schedule 5.1.2. 7.4.3. Buyer Disclosure Obligation. From time to time, on and prior to the Closing Date, the Buyer shall promptly notify the Sellers upon becoming aware of any fact, occurrence or event that would cause any of the representations and warranties -36- 43 contained in Sections 4 or 5 to be inaccurate or incomplete in any respect; provided, that no such notification shall in any way impair or limit any of Buyer's rights under this Agreement or otherwise with respect to inaccuracies in any of the representations or warranties of Sellers or the Company contained in this Agreement. 7.4.4. Supplemental Schedules. The Sellers may (but will not be required to, except as contemplated by Section 5.7), from time to time prior to or on the Closing Date, by notice in accordance with this Agreement, supplement or amend Schedules, including without limitation one or more supplements or amendments to correct any matter which would otherwise constitute a breach of any representation, warranty or covenant herein contained; provided, however, that subject to the last sentence of this Section 7.4.4, no supplement or amendment will affect the rights or obligations of the parties to this Agreement (other than supplements to Schedule 3.1 on account of the joinder of additional Sellers pursuant to Section 15.16 and the supplement to Schedule 5.7(i) contemplated by Section 5.7). If a supplement or amendment of any Schedule (other than such supplements to Schedule 3.1 and Schedule 5.7(i)) adversely affects the benefits to be obtained by Buyer under this Agreement then Buyer shall have the right to terminate this Agreement, with such termination being Buyer's sole remedy relating to matters set forth in amendments or supplements to any Schedule. Notwithstanding any other provision hereof, each supplement or amendment of any Schedule will be effective to cure and correct for all purposes any breach of any representation, warranty or covenant relating to such Schedule not having read at all times as so supplemented and amended. 7.5. Certain Payment and Subscription Rights. On or prior to the Closing Date, the Company shall pay $500,000 to Information Partners, a Massachusetts general partnership, to terminate its management agreement with the Company. The Company shall provide to Information Partners free of charge a subscription to receive through February 28, 1999 one macro-economic U.S. forecast subscription. 7.6. Non-Solicitation. (a) Each of Information Partners Capital Fund, L.P., BCIP Associates and BCIP Trust Associates (the "Principal Sellers") will, for a period of one year from the Closing Date with respect to clauses (i), (ii) and (iv) below, and indefinitely with respect to clause (iii) below, refrain from, either alone or in conjunction with any other person, or directly -37- 44 or indirectly through its present or future Affiliates (other than companies in its investment portfolio): (i) employing, engaging or seeking to employ or engage any Person who within the prior twelve (12) months had been an officer or employee of the Company (other than Persons who have theretofore been terminated by the Company or who have voluntarily left the employ of the Company prior to having been contacted in any way by any Principal Seller or any Affiliate) (other than companies in its investment portfolio) of either Principal Seller; (ii) causing or attempting to cause (A) any client, customer or supplier of the Company to terminate or materially reduce its business with the Company or (B) any officer, employee or consultant of the Company to resign or sever a relationship with the Company; (iii) disclosing (unless compelled by judicial or administrative process) or using any confidential or secret information relating to the Company or any of its clients, customers or suppliers; or (iv) acquiring a controlling interest in DRI/McGraw-Hill, a division of The McGraw-Hill Companies, Inc. (b) The parties hereto recognize that the laws and public policies of the various states of the United States may differ as to the validity and enforceability of covenants similar to those set forth in this Section. It is the intention of the parties that the provisions of this Section be enforced to the fullest extent permissible under the laws and policies of each jurisdiction in which enforcement may be sought, and that the unenforceability (or the modification to conform to such laws or policies) of any provisions of this Section shall not render unenforceable, or impair, the remainder of the provisions of this Section. Accordingly, if any provision of this Section shall be determined to be invalid or unenforceable, such invalidity or unenforceability shall be deemed to apply only with respect to the operation of such provision in the particular jurisdiction in which such determination is made and not with respect to any -38- 45 other provision or jurisdiction. (c) The parties hereto acknowledge and agree that any remedy at law for any breach of the provisions of this Section would be inadequate, and each Principal Seller hereby consents to the granting by any court of an injunction or other equitable relief, without the necessity of actual monetary loss being proved, in order that the breach or threatened breach of such provisions may be effectively restrained. 7.7. Further Assurances. Each party, upon the request from time to time of any other party hereto after the Closing, and at the expense of the requesting party but without further consideration, will do each and every act and thing as may be necessary or reasonably requested to consummate the transactions contemplated hereby in an orderly fashion. After the Closing Date, the Sellers (other than Heller) shall use reasonable efforts (but the Sellers shall have no obligation to pay any fees or incur any expenses) to secure required written consents or waivers under or with respect to the Contracts indicated on Schedule 5.1.2. In addition, the Sellers (other than Heller) shall use reasonable efforts to assist the Buyer in terminating the requirement for the letters of credit referred to in Section 9.3. 8. CONDITIONS TO THE OBLIGATION TO CLOSE OF THE BUYER. The obligations of the Buyer to consummate the Closing under this Agreement are subject to the satisfaction, at or prior to the Closing, of all of the following conditions, compliance with which, or the occurrence of which, may be waived prior to the Closing in writing by the Buyer in its sole discretion: 8.1. Representations, Warranties and Covenants. 8.1.1. Continued Accuracy of Representations and Warranties. Each representation and warranty of the Sellers and the Company contained in this Agreement shall be true and accurate in all material respects as of the Closing Date as if made on and as of the Closing Date, except for changes expressly permitted or contemplated by Section 7.4.4. 8.1.2. Performance of Agreements. The Sellers and the Company shall have -39- 46 performed and satisfied, in all material respects, all covenants and agreements required by this Agreement to be performed or satisfied by them at or prior to the Closing. 8.1.3. Sellers' Closing Certificate. At the Closing, each of the Sellers shall furnish a certificate, signed by such Seller, dated the Closing Date, to the effect that the conditions specified in Sections 8.1.1 and 8.1.2, to the extent relating to representations, warranties, covenants and agreements of such Seller, have been satisfied. 8.1.4. Company's Closing Certificate. At the Closing, the Company shall furnish a certificate, signed by the President or a Vice President of the Company, dated the Closing Date, to the effect that the conditions specified in Sections 8.1.1 and 8.1.2, to the extent relating to representations, warranties, covenants and agreements of the Company, have been satisfied. 8.1.5. Outstanding Capital. The Shares shall constitute all the outstanding stock of the Company and the Warrants shall constitute all the outstanding Contractual Obligations pursuant to which the Company has granted any option, warrant or other right to any Person to acquire the shares of common stock or any other securities of, or equity interest in, the Company. 8.2. Legality; Governmental Authorization; Litigation. The acquisition of the Shares and Warrants and the consummation of the other transactions contemplated hereby, shall not be prohibited by any Legal Requirement, and all necessary filings, if any, pursuant to the HSR Act shall have been made and all applicable waiting periods thereunder shall have expired or been terminated. No Action shall have been instituted at or prior to the Closing by any Person other than a party hereto, or instituted by any Governmental Authority, relating to this Agreement or any of the transactions contemplated hereby, which has a reasonable likelihood of success and the result of which would prevent or make illegal the consummation of any such transaction or could otherwise have a material adverse effect on the ability of the Buyer to consummate the transactions contemplated hereby. 8.3. Third Party Consents. There shall have been obtained by the Company the consents listed on Schedule 8.3. -40- 47 8.4. Opinion of Counsel. The Sellers and the Company shall have furnished the Buyer with favorable opinions of Ropes & Gray and Morgan, Lewis & Bockius LLP, dated as of the Closing Date, together covering the issues set forth in Exhibit 8.4. 8.5. Resignations of Directors. Each member of the board of directors of the Company, and each member of the board of directors and each officer of each Subsidiary identified by the Buyer in writing to the Sellers within 10 days prior to the Closing Date, shall have tendered, effective at the Closing, their resignations as such directors. 8.6. Repayment of Debt. After giving effect to the repayment of the Heller Debt and the Prior Owner Debt on the Closing Date, the WEFA Companies shall not be obligated with respect to Debt in an aggregate amount exceeding $25,000 except for capitalized leases and purchase money equipment debt and debt owing from one WEFA Company to another WEFA Company. 8.7. Prior Owner Matters. The Prior Owner shall have entered into a non-solicitation agreement on substantially the terms of Section 7.6. WEF Basel, A.G., a Swiss company that is an Affiliate of the Prior Owner, shall have issued an option to WEFA, Inc. to purchase the "AREMOS" trademark for $10,000 at the end of the license term for the licensing of the "AREMOS" trademark from WEF Basel, A.G. to WEFA, Inc. WEF Basel, A.G. and the Prior Owner shall have entered into an assignment to WEFA, Inc. of all copyrights, including registered United States copyrights, for the AREMOS computer program. 8.8. General. All corporate proceedings required to be taken on the part of the Company in connection with the transactions contemplated by this Agreement shall have been taken. The Buyer shall have received copies of such officers' certificates, good standing certificates, incumbency certificates and other customary closing documents as the Buyer may reasonably request in connection with the transactions contemplated hereby. 9. CONDITIONS TO THE OBLIGATION TO CLOSE OF THE SELLERS. The obligations of the Sellers to consummate the Closing under this Agreement are subject to the satisfaction, at or prior to the Closing, of all of the following conditions, compliance with which, -41- 48 or the occurrence of which, may be waived prior to the Closing in writing by the Sellers in their sole discretion: 9.1. Representations, Warranties and Covenants. 9.1.1. Continued Accuracy of Representations and Warranties. All representations and warranties of the Buyer contained in this Agreement shall be true and accurate in all material respects as of the Closing Date as if made on and as of the Closing Date. 9.1.2. Performance of Agreements. The Buyer shall have performed and satisfied, in all material respects, all covenants and agreements required by this Agreement to be performed or satisfied by the Buyer at or prior to the Closing. 9.1.3. Officer's Certificate. At the Closing, the Buyer shall furnish to the Sellers a certificate signed by the President or any Vice President of the Buyer, dated the Closing Date, to the effect that the conditions specified in Sections 9.1.1 and 9.1.2 have been satisfied. 9.2. Legality; Government Authorization; Litigation. The Sellers' consummation of the transactions contemplated hereby shall not be prohibited by any Legal Requirement, and all necessary filings, if any, pursuant to the HSR Act shall have been made and all applicable waiting periods thereunder shall have expired or been terminated. No Action shall have been instituted at or prior to the Closing by any Person other than a party hereto, or instituted by any Governmental Authority, relating to this Agreement or any of the transactions contemplated hereby, which has a reasonable likelihood of success and the result of which would prevent or make illegal the consummation any such transaction or could otherwise have a material adverse effect on the ability of the Sellers to consummate the transactions contemplated hereby. 9.3. Letter of Credit Matters. The letters of credit in the amount of $250,000 to the Company's landlord and $50,000 to the State of Connecticut issued by or on behalf of Heller shall have been terminated or supported by credit satisfactory to Heller. -42- 49 9.4. Opinion of Counsel. The Buyer shall have furnished the Sellers with a favorable opinion of Michael R. Kargula, general counsel of Buyer, dated the Closing Date in the form of Exhibit 9.4. 9.5. General. All corporate proceedings required to be taken by the Buyer in connection with the transactions contemplated by this Agreement shall have been taken. The Sellers shall have received copies of such officers' certificates, good standing certificates, incumbency certificates and other customary closing documents as the Sellers may reasonably request in connection with the transactions contemplated hereby. 10. TAX COVENANTS AND AGREEMENTS 10.1. General Intention of Parties. In general, subject to the specific provisions contained in this Agreement, it is the intention of the parties hereto that the Sellers will pay, or cause to be paid, all Income Taxes of the WEFA Tax Group with respect to Pre-Closing Periods and Pre-Closing Partial Periods except the first $250,000 of such Income Taxes, which the Buyer will pay or cause to be paid. The Buyer also will pay, or will cause to be paid, all Taxes of the WEFA Tax Group with respect to Post-Closing Periods and Post-Closing Partial Periods, and all Taxes other than Income Taxes that relate to Pre-Closing Periods or Pre-Closing Partial Periods. 10.2. Tax Returns. Sellers (other than Heller) will prepare and file, or cause to be prepared and filed, on a timely basis, all Income Tax Returns of or which include the WEFA Tax Group (including any amendments thereto) with respect to any Pre-Closing Period. Buyer will file all other Tax Returns of or which include the WEFA Tax Group. Buyer will have the right to review all Income Tax Returns prepared by Sellers (and supporting documents) that have not been filed, as of the date of this Agreement no later than 15 days after the due date for filing such Income Tax Returns. Any dispute arising with respect to any Income Tax Returns filed on or after the date of this Agreement will be resolved in accordance with Section 10.13. 10.3. Payment of Taxes. Subject to the Buyer's obligation to pay the first $250,000 of such Income Taxes, Sellers will pay, or will cause to be paid, all Income Taxes of the WEFA Tax Group for Pre-Closing Periods and Pre-Closing Partial Periods, including any such Income Taxes arising as a result of Treasury Regulation section 1.1502-6 or any equivalent provision -43- 50 under state or foreign Income Tax law. Buyer will pay, or will cause to be paid, all Taxes for all Post-Closing Periods and Post-Closing Partial Periods, the first $250,000 of any Income Taxes for any Pre-Closing Period or Pre-Closing Partial Period that are due after the Closing Date and all Taxes other than Income Taxes for any Pre-Closing Period or Pre-Closing Partial Period. 10.4. Straddle Period. Buyer will cause to be prepared and filed all Tax Returns required to be filed by the WEFA Tax Group for Straddle Periods. In the case of a Straddle Period, for purposes of this Agreement, Income Taxes for the Straddle Period shall be allocated between a Pre-Closing Partial Period and a Post-Closing Partial Period assuming that the books of the Company were closed as of and including the Closing Date, except that exemptions, allowances or deductions (such as depreciation deductions) calculated on an annual basis shall be prorated between the Pre-Closing Partial Period and Post-Closing Partial Period on a per diem basis and real property Taxes shall be allocated in accordance with section 164(d) of the Code. Any Income Taxes for a Straddle Period paid prior to the Closing shall be deducted from Sellers' liability. Buyer will notify Sellers of Buyer's calculation of Sellers' share of the Income Taxes of the WEFA Tax Group for any Straddle Period and provide to Sellers copies of such Income Tax Returns no later than 15 days after the due date for filing such Income Tax Returns. Buyer and Sellers will attempt to resolve in good faith any disagreement arising out of any Straddle Period Income Tax Returns and/or any calculation of Sellers' share of the related Income Tax liability. If any such dispute is not resolved within five days after the receipt of the Income Tax Return and calculation by letter, the matter will be resolved in accordance with Section 10.13. 10.5. Purchase Price Reduction for Payment of Taxes. Sellers and Buyer hereby agree that any amount of Income Taxes paid by Sellers to Buyer constitutes a reduction in the Purchase Price of the shares of the Company to which such payment relates. 10.6. Notice. Buyer will promptly notify Sellers in writing upon receipt by Buyer of notice of any pending or threatened federal, state, local or foreign Income Tax audits or assessments of the WEFA Tax Group related to a Pre-Closing Period or a Straddle Period. Sellers will promptly notify Buyer in writing upon receipt by Sellers of notice of any pending or threatened federal, state, local or foreign Tax audits or assessments or other written communications from any Tax authority relating to the income, properties or operations of the WEFA Tax Group. -44- 51 10.7. No 338 Election. Buyer will not make an election pursuant to Section 338 of the Code for the WEFA Companies. 10.8. Tax Elections. The WEFA Tax Group either will not make any Income Tax Election or the Sellers will pay Buyer for the effects of any Income Tax Election made after the date of this Agreement to which Buyer has not consented that adversely affects Income Taxes payable by or Income Tax refunds payable to Buyer or Buyer's Affiliates for any Post-Closing Period or Post-Closing Partial Period. Buyer will not take any action or will pay Sellers for the effects of any action taken on or after the Closing Date to which Sellers have not consented that adversely affects Income Taxes payable by Sellers for any Pre-Closing Period or Pre-Closing Partial Period. 10.9. [Intentionally Omitted] 10.10. Control of Audit. The Buyer will have the right to control any audit or determination by any Tax authority, to initiate any claim for refund or file any amended Tax Return, and to contest, resolve and defend against any assessment, notice of deficiency, or other adjustment or proposed adjustment of Taxes for any taxable period, provided, however, that Buyer shall consult with the Sellers prior to any substantive communications with the IRS relating to Income Taxes of the WEFA Companies for any Pre-Closing Period or Straddle Period and shall not have the right to settle any audit or other proceeding that relates to Income Taxes of the WEFA Companies for a Pre-Closing Period or Straddle Period without the Sellers' consent, which will not be unreasonably withheld. 10.11. Cooperation. The Sellers will cooperate fully with Buyer in making any Income Tax election permitted under this Agreement. 10.12. Access to Tax Records. Sellers will provide Buyer, and Buyer and its Affiliates will provide the Sellers, with the right, at reasonable times and upon reasonable notice, to have access to, and to copy and use, any records or information and personnel which may be relevant for a taxable period for which the requesting party is charged with payment responsibility for Income Taxes under Section 10.3 of this Agreement, including any Straddle Period, in -45- 52 connection with the preparation of any Tax Returns, any audits or other examination by any Tax authority, the filing of any claim for a refund of Tax or for the allowance of any Tax credit, or any judicial or administrative proceedings relating to liability for Taxes. Any information obtained pursuant to this Section 10 will be held in strict confidence and will be used solely in connection with the reason for which it was requested. 10.13. Disagreement Resolution. If the Sellers or the Buyer disagree as to any matters governed by this Section 10, such Sellers and Buyer will promptly consult with each other in an effort to resolve such dispute. Any amounts not in dispute will be paid promptly, and, any amount payable upon the resolution of a dispute will be made to a bank account designed by the payee no later than three Business Days after such resolution. If any such disagreement cannot be resolved within three days after the Sellers or Buyer asserts in writing that such dispute cannot be resolved, such Sellers and Buyer will jointly select an independent accounting firm to act as an arbitrator to resolve the disagreement. The independent accounting firm's determination will be final and binding upon the parties, and any fees and expenses relating to the engagement of the independent accounting firm will be shared equally by Sellers and Buyer. Upon the resolution of such dispute by the independent accounting firm, any amounts payable will be made to a bank account designated by the payee no later than three Business Days after such resolution, interest will be paid with respect to any such amounts at a rate per annum equal to the rate charged by the Internal Revenue Service for underpayments for large corporations from the date of the assertion in writing that the dispute cannot be resolved to the date of payment. 11. EMPLOYMENT AND EMPLOYEE BENEFITS ARRANGEMENTS. 11.1. Employment of Affected Employees. Buyer shall cause the WEFA Companies to employ on the Closing Date, at the same rate of pay as in effect immediately preceding the Closing Date, all Affected Employees; provided that Buyer shall have no obligation to continue such employment or rate of pay subsequent to the Closing Date. The Sellers shall not retain any obligations or liabilities with respect to any benefits or wages, regardless of whether such benefits or wages were accrued (or relate to claims incurred) prior to, on or after the Closing Date, with respect to Affected Employees. 11.2. Substantially Equivalent Benefits. With respect to the Company Plans in effect -46- 53 immediately prior to the Closing Date, Buyer shall, at Buyer's option, either (a) for a period of no less than one year following the Closing Date continue to provide or cause to be provided such plans, programs, agreements or arrangements on behalf of the Affected Employees so as to provide, in the aggregate, employee benefits which are substantially equivalent to the benefits provided to such individuals under the Company Plans immediately prior to the Closing Date; or (b) cause all employees of the WEFA Companies to be eligible as of the Closing to participate in the "employee welfare benefit plans" and "employee pension plans" (within the meaning of section 3(1) and section 3(2) of ERISA, respectively) of Buyer, if any, in which similarly situated employees of Buyer are generally eligible to participate, provided that (a) nothing herein shall prevent Buyer from terminating the employment of any employee of the WEFA Companies or modifying or terminating such plans of Buyer from time to time, and (b) all employees of the WEFA Companies and their dependents shall be covered immediately after the Closing (and shall not be excluded from coverage on account of any pre-existing condition) under any such plan that is a group health plan of Buyer subject to Part 6 of Title I of ERISA. For purposes of any length of service requirements, waiting periods, vesting periods or differential benefits based on length of service in any such plan for which an employee may be eligible after the Closing, Buyer shall ensure that service by such employee with the WEFA Companies shall be deemed to have been service with the Buyer. Except as provided otherwise in this Section 11, Buyer shall be under no obligation to provide or continue any such plans or other arrangements after the Closing Date and may amend or terminate any such plan or arrangement in whole or in part, and may modify any provision thereof, including any provision dealing with eligibility, levels or types of benefits, deductibles or co-payment obligations, or any other right, feature or other characteristic. Buyer shall assume sole responsibility for the payment of severance and benefit continuation benefits to any Affected Employee whose employment with Buyer or with the Company or any of its Subsidiaries is terminated by Buyer on or after the Closing Date. Notwithstanding the foregoing provisions of this Section 11.2, after Closing the Buyer may terminate the Company=s 1994 Stock Option Plan and 1994 Stock Purchase Plan. 11.3. WARN. The Buyer shall indemnify the Sellers and their Affiliates and defend and hold each of them harmless from and against any Losses which may be incurred by any of them under WARN, or any state plant closing or notification law or otherwise, arising out of, or relating to, any actions taken by the Buyer or the Company after the Closing. -47- 54 11.4. Third-Party Rights. No provision of this Section 11 shall create any third-party beneficiary rights in any employee or former employee (including any beneficiary or dependent thereof), the Company or any Subsidiaries of the Company in respect of continued employment (or resumed employment) for any specified period of any nature or kind whatsoever. 11.5. Indemnity. Buyer agrees to indemnify the Sellers and their Affiliates and defend and hold the Sellers and their Affiliates harmless from and against any and all claims, losses, damages, expenses, obligations and liabilities (including without limitation costs of collection, attorney's fees and other costs of defense) arising out of any claims by or in respect of any Affected Employee (or such Affected Employee's successors or assigns) with respect to any of the obligations or liabilities assumed by Buyer or retained by the Company hereunder or any other events occurring after the Closing. 12. INDEMNIFICATION. 12.1. Indemnification. Subject to the terms of this Section 12, each of the Sellers (each in its capacity as an indemnifying party, an "Indemnifying Party"), for itself only and not jointly in the case of the indemnification provided in Sections 12.1.1(i) and 12.1.1(iii) below, and jointly and severally in the case of the indemnification provided in Section 12.1.1(ii) below, agrees to indemnify Buyer (in its capacity as indemnified party, an "Indemnitee") and hold the Buyer harmless, and the Buyer (in its capacity as indemnifying party, an "Indemnifying Party") agrees to indemnify each of the Sellers (each in its capacity as indemnified party, an "Indemnitee") and hold each of the Sellers harmless, from, against and in respect of any and all Losses arising from or related to any of the following: 12.1.1. The Sellers. In the case of each Seller as an Indemnifying Party (i) any breach of any representation or warranty made by or on behalf of such Seller in this Agreement; (ii) any breach of any representation or warranty made by or on behalf of the Company in this Agreement; or (iii) any breach or violation of any covenant or agreement made by or on behalf of such Seller in this Agreement. 12.1.2. The Buyer. In the case of the Buyer as Indemnifying Party (i) any breach of any representation or warranty made by or on behalf of the Buyer in this Agreement; -48- 55 or (ii) any breach or violation of any covenant or agreement made by or on behalf of the Buyer in this Agreement. 12.2. Time Limitation on Indemnification. No claim may be made or suit instituted by the Buyer under any provision of this Section 12 after April 30, 1998, except for: (i) claims as to which any Indemnitee has given any Indemnifying Party written notice (describing with reasonable specificity the amount and basis of such claims) on or prior to April 30, 1998, (ii) claims for breaches of the representations and warranties contained in Sections 4.1, 4.2, 4.4 and 5.1.3 and the last sentence of Section 5.1.4, which may be made at any time without limitation, and (iii) claims for breaches of the representations and warranties contained in Sections 5.11, which may be made at any time prior to the expiration of the statute of limitations applicable to the matters covered by each such Section. No claim may be made or suit instituted by any Seller under any provision of this Section 12 after April 30, 1998 except for claims as to which any Indemnitee has given any Indemnifying Party written notice (describing with reasonable specificity the amount and basis of such claims) on or prior to April 30, 1998. 12.3. Monetary Limitations on Indemnification. Indemnifying Parties shall not have any obligation to indemnify an Indemnitee under Section 12.1.1 unless the aggregate cumulative total of all Losses incurred by the Indemnitee (deeming all Sellers as a single Indemnitee for purposes of this Section 12.3) exceeds $250,000, whereupon such Indemnitee shall be entitled to indemnification for such Losses but only to the extent that the aggregate cumulative total of such Losses exceeds $250,000. Notwithstanding any other provision of this Agreement the total maximum aggregate indemnification for all claims pursuant to Section 12.1.1 or 12.2 (other than claims described in clauses (ii) and (iii) of Section 12.2) as the case may be, shall not exceed $2,000,000 for all Sellers as a group; provided, however, that, in addition to the foregoing aggregate limit, each Seller's aggregate obligation under this Section 12 shall in no event exceed such Seller's Percentage of the Cash Consideration. 12.4. Third Party Claims, etc. Promptly after (a) becoming aware of any fact, occurrence or event which may give rise to a claim for indemnification under this Section 12 or (b) the receipt by any Indemnitee of notice of the commencement of any action or other claim against such Indemnitee by a third party, such Indemnitee shall, if a claim with respect thereto is or may be made against any Indemnifying Party pursuant to this Section 12, give such -49- 56 Indemnifying Party written notice of the nature and basis of such claim. Prior to the thirtieth day after receipt by the Indemnifying Party of a notice from the Indemnitee with respect to the commencement of an action or other claim by a third party, the Indemnitee will defend against such claim (provided that the Indemnitee shall not settle such claim). The Indemnifying Parties shall have the right to defend such claim, at the Indemnifying Parties' expense and with counsel of their choice reasonably satisfactory to the Indemnitee, provided that the Indemnifying Parties so notify the Indemnitee within 30 days after receipt of such notice. So long as the Indemnifying Parties are conducting the defense of such claim as provided in the previous sentence, the Indemnitee may retain separate co-counsel at its sole cost and expense and may participate in defense of such claim, and the Indemnifying Parties will not consent to the entry of any judgment or enter into any settlement with respect to such claim unless such judgment or settlement (i) requires only that cash payments be made, and (ii) contains an unconditional term providing for a release to be given by the claimant in question or plaintiff to the Indemnitee of and from all liability in respect of such claim. In the event the Indemnifying Parties do not assume defense of such claim as so provided, (x) the Indemnitee shall defend against such claim (provided that the Indemnitee shall not settle such claim unless such judgment or settlement contains an unconditional term providing for a release to be given by the claimant in question or plaintiff to the Indemnifying Parties of and from all liability in respect of such claim) and (y) the Indemnifying Parties will remain responsible for any Losses the Indemnitee may suffer as a result of such claim to the full extent provided in this Section 12. Regardless of which party shall assume the defense of such claim, each party shall provide to the other parties on request all information and documentation reasonably necessary to support and verify any Losses which give rise to such claim for indemnification and shall provide reasonable access to all books, records and personnel in their possession or under their control which would have a bearing on such claim. 12.5. Certain Other Indemnity Matters. (a) From and after the Closing the Buyer's sole and exclusive remedy with respect to any and all claims relating to the subject matter of this Agreement shall be pursuant to the indemnification provisions set forth in this Section 11; provided that the remedies provided in Sections 10 and 11 shall govern the subject matter of such Sections 10 and 11. In furtherance of the foregoing, the Buyer hereby waives, to the fullest extent permitted under applicable law, and agrees not to assert in any action or proceeding of any kind, any and all rights, claims and causes of action it may now or hereafter have against the -50- 57 Sellers other than claims for indemnification asserted as permitted by and in accordance with the provisions set forth in this Section 12 (including, without limitation, to the fullest extent permitted under applicable law, any such rights, claims or causes of action arising under or based upon common law or other Legal Requirements). (b) No party shall be liable under this Section 12, and no claim for indemnification may in any event be asserted under this Section 12, for any loss of profits or consequential damages by reason of a breach of any representation, warranty, covenant or other provision. (c) Upon making any payment to an Indemnitee for any indemnification claim pursuant to this Section 12, the Indemnifying Party shall be subrogated, to the extent of such payment, to any rights which the Indemnitee may have against other Persons with respect to the subject matter underlying such indemnification claim. (d) The Sellers shall have no liability under any provision of this Agreement for any Losses to the extent that such Losses relate to actions taken or not taken by Buyer or its Affiliates after the Closing. (f) Nothing in this Section 12 shall in any way limit any liability arising pursuant to Sections 10 or 11. 13. CONSENT TO JURISDICTION; JURY TRIAL WAIVER. 13.1. Consent to Jurisdiction. Each party to this Agreement, by its execution hereof, (i) hereby irrevocably submits, and agrees to cause each of its Subsidiaries to submit, to the exclusive jurisdiction of the state courts of the State of Delaware or the United States District Court located in the State of Delaware for the purpose of any action, claim, cause of action or suit (in contract, tort or otherwise), inquiry, proceeding or investigation arising out of or based upon this Agreement or relating to the subject matter hereof, (ii) hereby waives, and agrees to cause each of its Subsidiaries to waive, to the extent not prohibited by applicable law, and agrees not to assert, and agrees not to allow any of its Subsidiaries to assert, by way of motion, as a defense or otherwise, in any such action, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or -51- 58 execution, that any such proceeding brought in one of the above-named courts is improper, or that this Agreement or the subject matter hereof may not be enforced in or by such court and (iii) hereby agrees not to commence or to permit any of its Subsidiaries to commence any action, claim, cause of action or suit (in contract, tort or otherwise), inquiry proceeding or investigation arising out of or based upon this Agreement or relating to the subject matter hereof other than before one of the above-named courts nor to make any motion or take any other action seeking or intending to cause the transfer or removal of any such action, claim, cause of action or suit (in contract, tort or otherwise), inquiry, proceeding or investigation to any court other than one of the above-named court whether on the grounds of inconvenient forum or otherwise. Each party hereby consents to service of process in any such proceeding in any manner permitted by Delaware law, and agrees that service of process by registered or certified mail, return receipt requested, at its address specified pursuant to Section 15.7 is reasonably calculated to give actual notice. 13.2. WAIVER OF JURY TRIAL. TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW WHICH CANNOT BE WAIVED, EACH OF THE PARTIES HERETO HEREBY WAIVES, AND AGREES TO CAUSE EACH OF ITS SUBSIDIARIES TO WAIVE, AND COVENANTS THAT NEITHER IT NOR ANY OF ITS SUBSIDIARIES WILL ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE) ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT OF ANY ISSUE OR ACTION CLAIM , CAUSE OF ACTION OR SUIT (IN CONTRACT, TORT OR OTHERWISE), INQUIRY, PROCEEDING OR INVESTIGATION ARISING OUT OF OR BASED UPON THIS AGREEMENT OR THE SUBJECT MATTER HEREOF OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE TRANSACTIONS CONTEMPLATED HEREBY, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING. EACH PARTY ACKNOWLEDGES THAT IT HAS BEEN INFORMED BY THE OTHER PARTIES THAT THIS SECTION 13.2 CONSTITUTES A MATERIAL INDUCEMENT UPON WHICH SUCH PARTIES ARE RELYING AND WILL RELY IN ENTERING INTO THIS AGREEMENT AND ANY OTHER AGREEMENTS RELATING HERETO OR CONTEMPLATED HEREBY. ANY PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION 13.2 WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF EACH SUCH PARTY TO THE WAIVER OF ITS RIGHT TO TRIAL BY JURY. -52- 59 14. TERMINATION. 14.1. Termination of Agreement. This Agreement may be terminated by the parties only as provided below: (a) The Buyer and the Sellers may terminate this Agreement by mutual written consent at any time prior to the Closing. (b) The Buyer may terminate this Agreement by giving written notice to the Sellers at any time prior to the Closing in the event the Sellers are in material breach of any representation, warranty, covenant or agreement contained in this Agreement, the Buyer has notified the Sellers of the breach and such breach has continued without cure for a period of 30 days after the notice of breach and there is a reasonable likelihood that such breach will result in an inability of the Sellers to satisfy the conditions set forth in Section 8.1. (c) The Sellers may terminate this Agreement by giving written notice to the Buyer at any time prior to the Closing in the event the Buyer is in material breach of any representation, warranty, covenant or agreement contained in this Agreement, the Sellers have notified the Buyer of the breach and such breach has continued without cure for a period of 30 days after the notice of breach and there is a reasonable likelihood that such breach will result in an inability of the Buyer to satisfy the conditions set forth in Section 9.1. (d) By the Sellers on or after February 28, 1997 if the Closing of the transactions contemplated by this Agreement shall not have occurred by such date and by the Buyer on or after February 28, 1997 if the Closing of the transactions contemplated by this Agreement shall not have occurred by such date. 14.2. Effect of Termination. In the event of the termination of this Agreement pursuant to Section 14.1, all obligations of the parties hereunder (other than obligations under Sections 7.2, 13, 15 and this Section 14, which shall survive termination) shall terminate without any liability of any party to any other party; provided, however, that no termination pursuant to -53- 60 clause (b), (c) or (d) of Section 14.1 shall relieve any party from any liability arising from or relating to any breach by such party prior to termination. 14.3. Time of Essence. Time is and shall be of the essence in this Agreement. 15. MISCELLANEOUS. 15.1. Entire Agreement; Waivers. This Agreement constitutes the entire agreement among the parties hereto pertaining to the subject matter hereof and supersedes all prior and contemporaneous agreements, understandings, negotiations and discussions, whether oral or written, of the parties with respect to such subject matter, other than the Confidentiality Agreement (which shall survive execution and delivery of this Agreement and shall survive any termination of this Agreement but shall terminate upon consummation of the Closing) and the Escrow Agreement. No waiver of any provision of this Agreement shall be deemed or shall constitute a waiver of any other provision hereof (whether or not similar), shall constitute a continuing waiver unless otherwise expressly provided nor shall be effective unless in writing and executed (i) in the case of a waiver by the Buyer, and (ii) in the case of a waiver by the Sellers, by each of the Sellers. 15.2. Amendment or Modification. Except as set forth in Section 7.4.4, the parties hereto may not amend or modify this Agreement except in such manner as may be agreed upon by a written instrument executed by the Buyer and the Sellers' Representative. 15.3. Investigation; No Additional Representations. The Sellers and the Company have not made and are not making any representation, warranty, covenant or agreement, express or implied, with respect to the matters contained in this Agreement other than the explicit representations, warranties, covenants and agreements set forth herein. The Buyer acknowledges and agrees that it (i) has made its own inquiry and investigation into, and based thereon has formed an independent judgment concerning, the Business and the WEFA Companies, (ii) has been furnished with or given adequate access to such information about the Business and the WEFA Companies as it has requested, and (iii) will not assert, except pursuant to Section 12, any claim against the Sellers or any of their respective partners, directors, officers, employees, agents, stockholders, consultants, investment bankers, brokers, representatives or controlling -54- 61 persons, or any Affiliate of any of the foregoing, or hold the Sellers or any such persons liable, for any inaccuracies, misstatements or omissions with respect to information furnished by the Company, the Sellers or such persons concerning the Business, the WEFA Companies, this Agreement or the transactions contemplated hereby. 15.4. Severability. In the event that any provision hereof would, under applicable law, be invalid or unenforceable in any respect, such provision shall (to the extent permitted under applicable law) be construed by modifying or limiting it so as to be valid and enforceable to the maximum extent compatible with, and possible under, applicable law. The provisions hereof are severable, and in the event any provision hereof should be held invalid or unenforceable in any respect, it shall not invalidate, render unenforceable or otherwise affect any other provision hereof. 15.5. Successors and Assigns. All of the terms and provisions of this Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective transferees and assigns (each of which transferees and assigns shall be deemed to be a party hereto for all purposes hereof); provided, however, that (i) no transfer or assignment by any party hereto shall be permitted without the prior written consent of the other parties hereto and any such attempted transfer or assignment without consent shall be null and void and (ii) no transfer or assignment by any party shall relieve such party of any of its obligations hereunder. 15.6. Sellers' Representative. (a) Each of the Sellers hereby appoints Information Partners Capital Fund, L.P. (the "Sellers' Representative") or its designee (as appointed in writing), as the agent, proxy and attorney-in-fact for the Sellers for all purposes under this Agreement (including without limitation full power and authority to act on the Sellers' behalf) to take any action, should it elect to do so in its sole discretion, (i) to consummate the transactions contemplated under this Agreement, (ii) in the event of such consummation, to receive on behalf of the Sellers each of such Seller's Percentage of the Cash Consideration, (iii) to pay out of each Seller's Percentage of the Cash Consideration his, her or its pro rata share of all costs, expenses and fees incurred by or on behalf of the Sellers in connection with the transactions contemplated by this Agreement and to pay to the Sellers his, her or its Seller's Percentage of the Cash Consideration, (iv) to settle the final Cash Statement as contemplated by Section 3.2, (v) to conduct or cease to conduct, should it elect to do so in its sole discretion, the defense of all -55- 62 claims against any of the Sellers in connection with this Agreement other than claims under Sections 12.1.1(i) or 12.1.1(iii), and settle all such claims in its sole discretion on behalf of all the Sellers and exercise any and all rights which the Sellers are permitted or required to do or exercise under this Agreement and (vi) to execute and deliver, should it elect to do so in its sole discretion, on behalf of the Sellers any amendment to this Agreement so long as such amendment shall apply to all parties to this Agreement, and to take all other actions to be taken by or on behalf of the Sellers and exercise any and all rights which the Sellers are permitted or required to do or exercise under this Agreement; provided, however, that (a) the Sellers' Representative shall have no authority to enter into any settlement of any claim under clause (v) above or to execute and deliver any amendment to this Agreement under clause (vi) above on behalf of (1) the Sellers listed as Individual Sellers on the signature pages hereto (the "Individual Sellers"), without the consent of William A. Mundell, (2) WEF Associates CI Limited without the consent of an officer or director thereof and (3) Heller Financial, Inc. without the consent of an officer thereof, (b) the Sellers' Representative shall have no obligation to conduct any defense or settle any claim or enter into any amendment or take any other action whatsoever on behalf of any Seller under this Section 15.6 or otherwise in its capacity as Sellers' Representative and (c) any settlement entered into or other action taken by an Individual Seller, WEF Associates CI Limited or Heller Financial, Inc. shall be valid only to the extent expressly permitted by this Section 15.6, and no such settlement or action (whether permitted or not by this Section 15.6) shall bind or otherwise affect the rights or obligations of the Seller's Representative or any other Seller. (b) Each of the Sellers hereby agrees not to assert any claim against, and to indemnify and hold harmless Sellers' Representative from and against any and all Losses incurred by, the Sellers' Representative or any of its partners, directors, officers, employees, agents, stockholders, consultants, investment bankers, brokers, representatives or controlling persons, or any Affiliate of any of the foregoing, relating to Sellers' Representative's capacity as Sellers' Representative other than such claims or Losses resulting from the Sellers' Representative's gross negligence or willful misconduct (c) Each Seller hereby unconditionally and irrevocably agrees to pay to the Sellers' Representative, promptly upon request and in any event within 10 days of such request, such Seller's Percentage of any amounts paid by the Sellers' Representative on behalf of the Sellers and agrees to pay its Seller's Percentage of any and all costs and expenses (including counsel and -56- 63 legal fees and expenses) incurred by the Sellers' Representative in connection with the protection, defense, enforcement or other expense of any rights under this Agreement. Any and all payments made by any Sellers under this Section 15.6 shall be made free and clear of any present or future taxes, deductions, charges or withholdings and all liabilities with respect thereto. 15.7. Notices. Any notices or other communications required or permitted hereunder shall be sufficiently given if in writing and delivered personally or sent by telecopier, Federal Express, or registered or certified mail, postage prepaid, addressed as follows: If to the Sellers, to: Information Partners, Inc. Two Copley Place Boston, MA 02116 Telecopier: (617) 572-3274 Attention: Michael A. Krupka with a copy to: Ropes & Gray One International Place Boston, MA 02110 Telecopier: 617-951-7050 Attention: Thomas B. Draper If to Buyer, to: Primark Corporation 1000 Winter Street Waltham, MA 02154 Facsimile No.: (617) 890-6187 Attn: Joseph E. Kasputys Michael R. Kargula with a copy to: Milbank, Tweed, Hadley & McCloy 1 Chase Manhattan Plaza New York, NY 10005 Facsimile No.: (212) 530-5219 -57- 64 Attn: John T. O'Connor Unless otherwise specified herein, such notices or other communications shall be deemed received (a) on the date delivered, if delivered personally, (b) two Business Days after being sent by Federal Express, if sent by Federal Express, (c) one Business Day after being delivered, if delivered by telecopier and (d) three Business Days after being sent, if sent by registered or certified mail. Each of the parties hereto shall be entitled to specify a different address by giving notice as aforesaid to each of the other parties hereto. 15.8. Public Announcements. At all times at or before Closing no party hereto will issue or make any reports, statements or releases to the public with respect to this Agreement or the transactions contemplated hereby without the consent of the other parties hereto, which consent shall not be unreasonably withheld or delayed. If any party hereto is unable to obtain, after reasonable effort, the approval of its public report, statement or release from the other parties hereto and such report, statement or release is, in the opinion of legal counsel to such party, required by law in order to discharge such party's disclosure obligations, then such party may make or issue the legally required report, statement or release and promptly furnish the other parties with a copy thereof. Each party hereto will also obtain the prior approval by the other parties hereto (which prior approval shall not be unreasonably withheld or delayed, except by any Principal Seller with respect to references to any Principal Seller or its Affiliates in such press release) of any press release to be issued immediately following the Closing announcing the consummation of the transactions contemplated by this Agreement. 15.9. Headings, etc. Section and subsection headings are not to be considered part of this Agreement, are included solely for convenience, are not intended to be full or accurate descriptions of the content thereof and shall not affect the construction hereof. 15.10. Disclosure. Any item listed or described in any Schedule pursuant to any Section of this Agreement shall be deemed to have been listed in or incorporated by reference into each other Schedule where such listing or description would be appropriate. 15.11. Third Party Beneficiaries. Nothing in this Agreement is intended or shall be construed to entitle any Person other than the Seller's Representative, the parties or their respective transferees and assigns permitted hereby to any claim, cause of action, remedy or right of any kind. -58- 65 15.12. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute but one and the same instrument. 15.13. Governing Law. This Agreement shall be governed by and construed in accordance with the domestic substantive laws of the State of Delaware, without giving effect to any choice or conflict of law provision or rule that would cause the application of the laws of any other jurisdiction. 15.14. Strict Construction. No rule of strict construction shall apply to or be used against any party hereto. 15.15. Expenses. All costs and expenses (including legal fees and expenses, and any "success" fees) incurred by the Sellers in connection with this Agreement and the transactions contemplated hereby shall be paid by the Company at or prior to Closing. All such costs and expenses incurred by the Company shall be paid by the Company at or prior to the Closing, whether or not the transactions contemplated hereby are consummated, and all such costs and expenses incurred by the Buyer shall be paid by the Buyer whether or not the transactions contemplated hereby are consummated. 15.16. Joinder of Additional Stockholders. Prior to the Closing Date, existing owners of Shares who have not yet signed this Agreement and Option holders who exercise Options may become party to this Agreement as Sellers by executing a joinder hereto in form reasonably satisfactory to the Buyer and the Sellers' Representative. Upon the joinder of any such Seller, the Sellers' Representative shall supplement Schedule 3.1 by adding the name and type and number of Shares owned by such Seller. -59- 66 IN WITNESS WHEREOF, the parties hereto, intending to be legally bound hereby, have caused this Agreement to be executed, as of the date first above written by their respective officers thereunto duly authorized. THE COMPANY: WEFA HOLDINGS, INC. By: Michael A. Krupka ------------------------------------ Title: Vice President THE BUYER: PRIMARK CORPORATION By: /s/ JOSEPH E. KASPUTYS ------------------------------------ Title: Chairman, President and CEO THE SELLERS: INFORMATION PARTNERS CAPITAL FUND, L.P. By: Information Partners, a Massachusetts general partnership, its general partner By: Bain Capital Partners IV, L.P., its general partner By: Bain Capital Investors, Inc., its general partner By: David A. Dominick --------------------------------- Title: Vice President -60- 67 BCIP ASSOCIATES By: David A. Dominick --------------------------------------- general partner BCIP TRUST ASSOCIATES, L.P. By: David A. Dominick --------------------------------------- general partner HELLER FINANCIAL, INC. By: /s/ TIMOTHY CANON --------------------------------------- Title: Timothy Canon Vice-President INDIVIDUAL SELLERS: /s/ WILLIAM MUNDELL ------------------------------------------- William A. Mundell /s/ DOUGLAS ANTHONY ------------------------------------------- Douglas N. Anthony -61- 68 FRAZAR LIMITED By: Nicolas D. Moss -------------------------------------- Title: First Board Limited Director POLEGATE LIMITED By: Nicolas D. Moss -------------------------------------- Title: First Board Limited Director JIGSAW LIMITED By: Nicolas D. Moss -------------------------------------- Title: First Board Limited Director CASTLE LIMITED By: Nicolas D. Moss -------------------------------------- Title: First Board Limited Director -62- EX-4.1 5 REGISTRATION RIGHTS AGREEMENT 1 Exhibit 4.1 REGISTRATION RIGHTS AGREEMENT ----------------------------- This Registration Rights Agreement (this "Agreement") is made and entered into as of January 7, 1997, by and between Primark Corporation, a Michigan corporation ("Primark"), and Joseph E. Kasputys ("Executive"). The parties hereby agree as follows: 1. Securities Subject to this Agreement. ------------------------------------- DEFINITIONS. The term "Registrable Securities" means any shares of common stock, without par value, of Primark (the "Common Stock") which may be issued to Executive under the terms of a Non-Qualified Stock Option Agreement dated January 7, 1997. 2. Registration Rights. -------------------- (a) Demand Registration Right. ------------------------- (i) RIGHT TO DEMAND. At any time after the issuance to Executive of Registrable Securities, Executive may make a written request to Primark for registration under and in accordance with the provisions of the Securities Act of 1933 ("Securities Act"), of all or part of the Registrable Securities (a "Demand Registration"). Such request shall specify the aggregate amount of the Registrable Securities to be registered and shall also specify the intended methods of disposition thereof. (ii) NUMBER OF DEMAND REGISTRATIONS. Executive shall be entitled to one Demand Registration. Primark shall not be deemed to have effected a Demand Registration unless and until a registration statement covering the requested amount of Registrable Securities is declared effective by the Securities and Exchange Commission ("SEC"). (b) EFFECTIVE REGISTRATION STATEMENT AND EXPENSES. Primark agrees to file with the SEC as soon as reasonably practicable after a request for Demand Registration, but in no event later than the later of (x) ninety days after such request for Demand Registration and (y) in the event Primark exercises its privilege to delay the filing of a registration statement pursuant to Section 2(d) hereof, fifteen days after the end of the period during which Primark delays such filing, a registration statement on any appropriate form (the "Registration Statement") with respect to all of the Registrable Securities requested to be included in such Demand Registration in accordance with the foregoing. Primark agrees to use its reasonable best efforts to have the Registration Statement declared effective by the SEC as soon as reasonably practicable after such filing and to keep the Registration Statement continuously effective until the earlier of (i) the date on which all of the Registrable Securities registered thereunder have been disposed of and (ii) two years following the date on which the Registration Statement is declared effective. 2 Subject to Section 4(e) hereof, Primark further agrees, if necessary, to supplement or amend the Registration Statement, as required by the registration form utilized by Primark or by the instructions applicable to such registration form or by the Securities Act or the rules and regulations thereunder. Primark agrees to pay all Registration Expenses (as hereinafter defined) in connection with such Demand Registration, whether or not the Registration Statement becomes effective. (c) PIGGYBACK REGISTRATION RIGHTS. Subject to the terms of this Agreement, in the event that Primark determines for its own account to register for sale to the public shares of Primark common stock, Primark shall include in such registration the Registrable Securities, provided that the Executive makes a written request to Primark to have such shares of Registrable Securities or any portion thereof registered and that request is received by Primark at least 30 days prior to the filing with the SEC of the registration statement. (d) PRIMARK'S ABILITY TO POSTPONE. Primark shall have the privilege to delay the filing of the Registration Statement for a reasonable period of time (not exceeding 90 days) if Primark furnishes Executive with a certificate stating that Primark has determined in good faith that effecting the registration at such time would adversely affect a material financing, acquisition, disposition of assets or stock, merger or other comparable transaction or would require Primark to make public disclosure of information the public disclosure of which would have a material adverse effect upon Primark. 3. HOLDBACK AGREEMENTS. ------------------- Executive agrees not to effect any public sale or distribution of the issue being registered or a similar security of Primark, or any securities convertible into or exchangeable or exercisable for such securities, including a sale pursuant to Rule 144 under the Securities Act, during the ten business days prior to, and during the 90-day period beginning on, the effective date of the Registration Statement (except as part of such registration), if and to the extent timely notified in writing by Primark. 4. REGISTRATION PROCEDURES. ------------------------ Whenever Executive has requested that any Registrable Securities be registered pursuant to Section 2 of this Agreement, Primark will use its reasonable best efforts to effect the registration and the sale of such Registrable Securities and, in connection with any such request, Primark will as expeditiously as possible: (a) prepare and file with the SEC the Registration Statement and use its best efforts to cause such Registration Statement to become effective; (b) prepare and file with the SEC such amendments and post-effective amendments to the Registration Statement as may be necessary to keep the Registration Statement effective for as long as such registration is required to remain effective pursuant to the terms hereof, cause the 2 3 prospectus to be supplemented by any required prospectus supplement, and, as so supplemented, to be filed pursuant to Rule 424 under the Securities Act; (c) furnish to Executive at least one signed copy of the Registration Statement and any post-effective amendment thereto, as soon as such documents become available to Primark, and such number of conformed copies thereof and such number of copies of the prospectus (including each preliminary prospectus) and any amendments or supplements thereto, and any documents incorporated by reference therein, as Executive may reasonably request as soon as such documents become available to Primark; (d) on or prior to the date on which the Registration Statement is declared effective, use its reasonable best efforts to register or qualify such Registrable Securities under such other securities or blue sky laws of such jurisdictions as Executive reasonably requests and do any and all other acts and things which may be reasonably necessary or advisable to enable Executive to consummate the disposition in such jurisdictions of such Registrable Securities; provided, that Primark will not be required to (i) qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify but for this paragraph (d), (ii) subject itself to general taxation in any such jurisdiction or (iii) consent to general service of process in any such jurisdiction; (e) notify Executive at any time during which a prospectus relating to such Registrable Securities is required to be delivered under the Securities Act of the happening of any event (including, without limitation, the involvement of Primark in a material financing, acquisition, disposition of assets or stock, merger or other comparable transaction (a "Material Transaction")) as a result of which the prospectus included in the Registration Statement contains an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading, and Primark will prepare a supplement or amendment to such prospectus so that, as thereafter delivered to the purchasers of such Registrable Securities, such prospectus will not contain an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading; provided, however, that if such event relates solely to a Material Transaction, Primark shall not be obligated to prepare such supplement or amendment if Primark determines not to proceed with such Material Transaction and notifies Executive of such determination; (f) notify Executive of any stop order or other suspension of effectiveness of the Registration Statement; (g) use its reasonable efforts to obtain the withdrawal of any order suspending the effectiveness of the Registration Statement at the earliest possible time; (h) notify Executive promptly of the receipt by Primark of any notification with respect to the suspension of the qualification of the Registrable Securities for sale in any jurisdiction; 3 4 (i) use its reasonable efforts to obtain the withdrawal of any suspension of the qualification of the Registrable Securities for sale in a certain jurisdiction at the earliest possible time; and (j) use its reasonable efforts to take all other steps necessary to effect the registration of the Registrable Securities contemplated hereby. Primark may require Executive to furnish to Primark such information regarding the distribution of such Registrable Securities and such other information relating to Executive and its ownership of Registrable Securities as Primark may from time to time reasonably request in writing. Executive agrees that, upon receipt of any notice from Primark of the happening of any event of the kind described in Section 4(e) hereof, Executive will forthwith discontinue disposition of Registrable Securities pursuant to the registration statement covering such Registrable Securities until Executive's receipt of the copies of the supplemented or amended prospectus contemplated by Section 4(e) hereof (or, in the event of a Material Transaction, until Executive's receipt either of such supplemented or amended prospectus or of notice from Primark that Primark has determined not to proceed with such Material Transaction) and, if so directed by Primark, Executive will deliver to Primark (at the expense of Primark) all copies, other than permanent file copies then in Executive's possession, of the prospectus covering such Registrable Securities current at the time of receipt of such notice. 5. REGISTRATION EXPENSES. ---------------------- All expenses incident to Primark's performance of or compliance with this Agreement including, without limitation, all registration and filing fees, fees and expenses of compliance with securities or blue sky laws, printing expenses and fees and expenses of counsel for Primark and its independent certified public accountants (all such expenses being herein called "Registration Expenses") will be borne by Primark; provided that in no event shall Registration Expenses include any underwriting discounts, sales commissions or similar fees attributable to the sale of the Registrable Securities or the fees and expenses of counsel or any special experts retained by Executive. 6. MISCELLANEOUS. -------------- (a) AMENDMENT AND WAIVERS. Except as otherwise provided herein, the provisions of this Agreement may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given unless the parties hereto have agreed thereto in writing. 4 5 (b) NOTICES. All notices and other communications provided for or permitted hereunder shall be made by hand-delivery, registered first-class mail or telecopier: (i) if to Executive, at: Mr. Joseph E. Kasputys 398 Simon Willard Road Concord, Massachusetts 01742 (ii) if to Primark, at: Primark Corporation 1000 Winter Street, Suite 4300N Waltham, Massachusetts 02154 Attn: Michael R. Kargula, Esq. All such notices and communications shall be deemed to have been duly given when delivered by hand, if personally delivered, or two business days after being deposited in the mail, postage prepaid, if mailed, or upon electronic confirmation of receipt, if sent via telecopier. (c) SUCCESSORS AND ASSIGNS. This Agreement may not be assigned except by an instrument in writing signed by the parties hereto. Subject to the foregoing, this Agreement shall inure to the benefit of and be binding upon the heirs, successors and assigns of each of the parties hereto, and no other person shall have any right, benefit or obligation under this Agreement, express or implied, as a third party beneficiary or otherwise. (d) COUNTERPARTS. This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. (e) HEADINGS. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof. (f) GOVERNING LAW. This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts applicable to contracts made and to be performed wholly within that Commonwealth. (g) SEVERABILITY. In the event that any one or more of the provisions contained herein, or the application thereof in any circumstances, is held invalid, illegal or unenforceable in any respect for any reason, the validity, or legality and enforceability of any such provision in every other respect and of the remaining provisions contained herein shall not be in any way impaired thereby. 5 6 7. SHAREHOLDER APPROVAL. This Agreement shall be subject to the approval of the shareholders of Primark at the next Annual Meeting of Shareholders and shall be of no further force or effect unless such approval is obtained in a separate vote by the affirmative vote of a majority of the voting shares present or represented and entitled to vote at such meeting. In the event that such shareholder approval is not forthcoming, this Agreement shall automatically terminate. IN WITNESS WHEREOF, the parties have executed and delivered this Agreement as of the date first written above. PRIMARK CORPORATION EXECUTIVE By: /s/ MICHAEL R. KARGULA /s/ JOSEPH E. KASPUTYS ------------------------------- ----------------------------- Name: Michael R. Kargula Joseph E. Kasputys Title: Senior Vice President, General Counsel and Secretary EX-10.2 6 PRIMARK CORPORATION STOCK OPTION PLAN 1 Exhibit 10.2 PRIMARK CORPORATION SECRETARY'S CERTIFICATE I, MICHAEL R. KARGULA, SECRETARY OF PRIMARK CORPORATION, A MICHIGAN CORPORATION, DO HEREBY CERTIFY THAT FOLLOWING IS A TRUE COPY OF CERTAIN RESOLUTIONS ADOPTED BY THE BOARD OF DIRECTORS AT REGULAR MEETINGS OF SUCH BOARD HELD ON SEPTEMBER 22, 1995: RESOLVED, that effective September 22, 1995 Article V of the Primark Corporation Stock Option Plan for Non-Employee Directors is amended by adding a new paragraph 8 thereto to read in its entirety as follows: "8. Withholding Taxes. ----------------- The Corporation's obligation to deliver Shares upon the exercise of an option by a Director who has become an employee of the Corporation or one of its affiliates since the date of grant of the option shall be subject to the satisfaction of applicable federal, state and local tax withholding requirements. Any such withholding tax obligation may be satisfied in whole or in part by any of the following means or by a combination of such means: (a) tendering a cash payment, (b) authorizing the Corporation to withhold Shares otherwise issuable to the Director, or (c) delivering to the Corporation already owned and unencumbered Shares. A director's election to pay the withholding tax obligation by either of the latter two methods of payment is irrevocable and may be made only during the period beginning the third business day following the date of release of the Corporation's quarterly or annual summary statements of sales and earnings and ending on the twelfth business day following such date." I have hereunto set my hand this 28th day of September, 1995. /s/ MICHAEL R. KARGULA -------------------------- Secretary EX-10.11 7 EMPLOYMENT AGREEMENT - JOSEPH E. KASPUTYS 1 Exhibit 10.11 EMPLOYMENT AGREEMENT -------------------- This Employment Agreement (the "Agreement") is dated as of January 7, 1997 between Primark Corporation (the "Company"), and Joseph E. Kasputys (the "Employee"). WHEREAS, the Board of Directors of the Company has approved and authorized the entry into this Agreement with the Employee to take effect on the Effective Date, as defined in Paragraph 6 herein; WHEREAS, the parties desire to enter into this Agreement setting forth all of the terms and conditions of the employment relationship of the Employee with the Company. NOW, THEREFORE, it is agreed as follows: 1. EMPLOYMENT. The Employee shall be employed as Chairman, President and Chief Executive Officer of the Company from the Effective Date through the term of this Agreement. As Chief Executive Officer of the Company, the Employee shall render executive, policy, and other management services to the Company of the type customarily performed by persons serving in a similar executive officer capacity and shall report only to the Board of Directors of the Company. The Employee shall also perform such duties as the Board of Directors of the Company may from time to time reasonably direct. During the term of this Agreement, there shall be no material increase or decrease in the duties and responsibilities of the Employee otherwise than as provided herein, unless the parties otherwise agree in writing. 2. SALARY. The Company agrees to pay the Employee during the term of this Agreement an annual salary of $602,000, with the salary to be increased from time to time as determined by the Board of Directors of the Company. The salary of the Employee shall not be decreased at any time during the term of this Agreement from the amount then in effect, unless the Employee otherwise agrees in writing. The salary under this Paragraph 2 shall be payable by the Company to the Employee in equal installments during each month pursuant to its standard pay practices. 3. BONUSES. -------- In addition to his salary under Paragraph 2 hereof, the Employee shall be paid an annual bonus in an amount determined based on the extent to which Company performance goals, as established by the Compensation Committee of the Board of Directors (the "Committee") each year, have been achieved by the Company during the year for which the bonus is paid. If such goals have been achieved but not exceeded in any year, Employee shall be paid a bonus equal to 60% of his annual salary. It is expressly understood and agreed that the amount of bonus shall increase or decrease depending upon the amount by which the actual financial results for the Company vary from the goals. In no event, however, shall the Employee's annual bonus be greater than $1 million or be less than $120,000 (this minimum bonus amount is hereinafter referred to as the "Annual Guaranteed Bonus"). Employee agrees that an amount equal to at least 50% of his Annual Guaranteed Bonus (after applicable taxes) shall be paid by Employee to the Company in partial satisfaction of his payment obligations under promissory notes that he has with the Company. The Committee shall certify in writing before an annual bonus in excess of $120,000 is paid that the performance goals were attained." 2 4. STOCK OPTIONS. ------------- (a) Subject to the terms and conditions set forth in the Primark Corporation Non-Qualified Stock Option Agreement ("Stock Option Agreement") which is attached hereto as Exhibit A, the Company hereby grants to Employee a non-qualified stock option ("Option") to purchase the number of shares of the Company's common stock set forth in Exhibit A. (b) Simultaneously with the execution of this Agreement, the Company shall execute the Stock Option Agreement and the Registration Rights Agreement in the form attached hereto as Exhibit B. 5. PARTICIPATION IN RETIREMENT AND EMPLOYEE BENEFITS PLANS; INSURANCE; ------------------------------------------------------------------- OTHER FRINGE BENEFITS. ---------------------- (a) The Employee shall be entitled to participate in any plan of the Company relating to pension, profit-sharing, group life insurance, medical coverage, education, or other retirement or employee benefits that the Company has adopted or may adopt for the benefit of its executive officers. (b) The Company shall provide the Employee with annual retirement compensation for life in an amount which, after including all amounts paid to the Employee under the Company's defined benefit plan, if any, shall equal 55% of the salary (not including bonus) payable to the Employee during the final year prior to the date of the Employee's retirement from the Company at age 62 or later. In the event that the Employee predeceases his spouse at the time of his retirement or thereafter, such spouse shall be entitled to receive annual payments for life in an amount equal to 60% of that which otherwise would have been payable to the Employee. In the event that the Employee dies prior to his retirement from the Company, his spouse shall be entitled to receive until such date on which the Employee would have become 65 years of age annual payments equal to 50% of the Employee's final salary until such time as the Employee would have reached age 65 and annual payments of 33% of such salary for life. The obligations created by this paragraph shall continue beyond the term of this Agreement, provided, however, that in the event that, prior to reaching age 62, the Employee is terminated with cause during the term of this Agreement, or the Employee voluntarily terminates his employment relationship with the Company during such term, the obligations created in this paragraph shall also terminate. If the Employee is terminated without cause prior to reaching age 62, he will be entitled to reduced retirement compensation calculated in the same manner as set forth in Paragraph 11 of this Agreement. The payments provided for in this Paragraph 5(b) shall be in lieu of any payments pursuant to the Supplemental Death Benefit and Retirement Income Plan Agreement. (c) The Employee shall be entitled to receive up to $10,000 annually as reimbursement for expenses incurred in obtaining tax and estate planning assistance. (d) The Employee shall be entitled to participate in any other fringe benefits which are now or may be or become applicable to the Company's executive officers, including participation in stock-based plans, the payment of reasonable expenses for attending annual and 3 3 periodic meetings of trade associations, the provision of an automobile for business use, and any other benefits which are commensurate with the duties and responsibilities to be performed by the Employee under this Agreement. (e) Participation in these retirement and employee benefit plans, insurance and other fringe benefits shall not reduce the salary or bonuses payable to the Employee under Paragraphs 2 and 3 hereof, respectively. 6. TERM. The term of this Agreement shall be for a period commencing on the date hereof ("Effective Date"), and ending on December 31, 2001. 7. STANDARDS. The Employee shall perform the Employee's duties and responsibilities under this Agreement in accordance with such reason-able standards as may be established from time to time by the Board of Directors of the Company. Employee shall report only to the Board of Directors of the Company. The reasonableness of such standards shall be measured against standards for executive performance generally prevailing in the industries in which the Company conducts business. 8. VOLUNTARY ABSENCES; VACATIONS. The Employee shall be entitled, without loss of pay, to be absent voluntarily for reasonable periods of time from the performance of the duties and responsibilities under this Agreement. All such voluntary absence shall count as paid vacation time, unless the Board of Directors of the Company otherwise approves. The Employee shall be entitled to an annual paid vacation of at least six weeks per year or such longer period as the Board of Directors of the Company may approve. The timing of paid vacations shall be scheduled in a reasonable manner by the Employee. 9. TERMINATION OF EMPLOYMENT. (a) The Board of Directors of the Company may terminate the Employee's employment during the term of this Agreement at any time with or without cause (as defined below), but any termination by the Board of Directors other than termination for cause shall not, unless otherwise provided herein, prejudice the Employee's right to compensation or other benefits under this Agreement and upon any termination without cause all options granted to the Employee shall be exercisable in accordance with the terms of their governing documents. The Employee's employment during the term of this Agreement may be terminated by a two-thirds vote of all of the members of the Board of Directors of the Company for cause by written notice to the Employee setting forth in reasonable detail the nature of such cause. Only the following shall constitute "cause" for such termination: the refusal to perform duties assigned in accordance with the Employee's employment agreement with the Company; or overt and willful disobedience of orders or directives issued to the Employee by the Company and within the scope of the Employee's duties to the Company; or conviction or commission of illegal acts in connection with the performance of duties on behalf of the Company, which refusal, disobedience or commission of illegal acts shall continue for more than thirty days after written notice is given to the Employee pursuant to a two-thirds vote of all of the members of the Board of Directors of the Company, such notice to set forth in reasonable detail the nature of the Board's determination. A termination of 4 4 employment by the Employee after a "substantial breach" (as defined below) of this Agreement by the Company shall be considered for all purposes of this Agreement a termination of the Employee's employment by the Company without cause. Notwithstanding anything in this Agreement to the contrary, under no circumstances may the Employee's employment hereunder be terminated by the Company without cause except as set forth in the preceding sentence. "Substantial breach" shall mean (i) the assignment of the Employee to any position or duties materially inconsistent with the provisions of Paragraph 1 hereof; (ii) a reduction by the Company in the Employee's salary as specified in Paragraph 2 hereof; (iii) the failure by the Company to pay to the Employee the bonus provided for in Paragraph 3 hereof; or (iv) the failure by the Company to allow the Employee to participate in other benefit programs as provided in Paragraph 5 hereof, provided, however, that the term "substantial breach" shall not include an immaterial breach by the Company of any provisions of this Agreement, including clauses (i) and (iv) above, which does not result in substantial detriment to the Employee. The Employee shall have no right to receive compensation or other benefits for any period after termination for cause. (b) The parties acknowledge and agree that damages which will result to Employee for termination by the Company without cause shall be extremely difficult or impossible to establish or prove, and agree that, unless the termination is for cause, the Company shall be obligated, concurrently with such termination, to make a lump sum cash payment to the Employee as severance pay of an amount equal to the sum of the following: (i) Two times the amount of the Employee's then annual salary as provided in Paragraph 2 hereof; (ii) An amount equal to the bonus paid to the Employee in the year prior to termination pro-rated for the time Employee has worked in the year of termination; (iii) The Company shall at its sole cost and expense provide Employee with health insurance, life insurance and disability insurance for a period of two years following termination in the same amounts provided prior to termination; The Employee agrees that, except for such other payments and benefits to which the Employee may be entitled as expressly provided by the terms of this Agreement, such severance pay shall be in lieu of all other claims which the Employee may make by reason of such termination. Such payment to the Employee shall be made on or before the Employee's last day of employment with the Company. The severance pay amount shall not be reduced by any compensation which the Employee may receive for other employment with another employer after termination of his employment with the Company. 10. NONPERFORMANCE BY COMPANY. If the Company fails to make timely payment of the amounts then owed to the Employee under this Agreement, the Employee shall be entitled to reimbursement for all reasonable costs, including attorneys' fees, incurred by the Employee in taking action to collect such amounts or otherwise to enforce this Agreement, plus interest on such amounts at the rate of one percent above the prime rate (defined as the base rate on corporate loans 5 5 at large U.S. money center commercial banks as published by the Wall Street Journal), compounded monthly, for the period from the date the payment is due to be paid to the Employee until payment is made. 11. DISABILITY. If the Employee shall become disabled or incapacitated to the extent that the Employee is unable to perform the Employee's duties and responsibilities hereunder, the Employee shall be entitled to receive (in addition to the insurance benefits provided for in Paragraph 5 hereof) disability benefits of the type provided for other executive officers of the Company. In such event, the Employee shall be entitled to receive the retirement compensation as specified in Paragraph 5(b), reduced by 2% for each full year not worked by the Employee prior to age 62. 12. NO ASSIGNMENTS. This Agreement is personal to each of the parties hereto. No party may assign or delegate any rights or obligations hereunder without first obtaining the written consent of the other party hereto. Except for the obligations of the Company under Paragraph 5(b) hereof, this Agreement shall terminate immediately upon the death of the Employee. 13. OTHER CONTRACTS. The Employee shall not, during the term of this Agreement, have any other paid employment other than with a subsidiary of the Company or provide services to any other Company other than services to a subsidiary of the Company, except that the Employee may be a member of the Board of Directors of companies not affiliated with the Company, with the prior approval of the Board of Directors of the Company. This provision shall not apply with respect to Lifeline Corporation and The Hitachi Foundation where Employee currently serves as Director and Trustee respectively. This Agreement supersedes and cancels the agreement dated as of February 21, 1992 between the parties hereto. 14. RESTRICTIVE COVENANTS. As consideration for the execution of this Agreement by the Company and the grant of the Option, the Executive covenants and agrees as follows: (a) For the twelve month period following termination of his employment, the Employee shall not solicit business from any person, firm or entity which was a customer of the Company or any of its subsidiaries at any time within one year preceding the termination date of the Employee's employment with the Company, induce or attempt to induce any such customer to reduce its business with the Company or any of its subsidiaries, or solicit or attempt to solicit any employees of the Company or any of its subsidiaries to leave the employ of the Company or any of its subsidiaries. (b) For a period of one year following termination of his employment with the Company, the Employee shall keep confidential and not disclose to any person, firm or corporation the trade secrets or confidential information or knowledge relating to the business of the Company or any of its subsidiaries. 15. AMENDMENTS OR ADDITIONS; ACTION BY BOARD OF DIRECTORS. No amendments or additions to this Agreement shall be binding unless in writing and signed by all parties hereto. Except as otherwise provided in this Agreement, the prior approval of the Board of Directors of the 6 6 Company shall be required in order for the Company to authorize any amendments or additions to this Agreement, to give any consents or waivers of provisions of this Agreement, or to take any other action under this Agreement including any termination of employment under Paragraph 9(a) hereof. 16. PARAGRAPH HEADINGS. The paragraph headings used in this Agreement are included solely for convenience and shall not affect, or be used in connection with, the interpretation of this Agreement. 17. SEVERABILITY. The provisions of this Agreement shall be deemed severable and the invalidity or unenforceability of any provision shall not affect the validity or enforceability of the other provisions hereof. 18. GOVERNING LAW. This Agreement shall be governed by the laws of the United States to the extent applicable and otherwise by the laws of the Commonwealth of Massachusetts. 19. ARBITRATION OF DISPUTES. Any controversy or claim arising out of or relating to this Employment Agreement or the breach thereof shall be settled by arbitration in accordance with the laws of the Commonwealth of Massachusetts by three arbitrators, one of whom shall be appointed by the Company, one by the Employee and the third by the first two arbitrators. If the first two arbitrators cannot agree on the appointment of a third arbitrator, then the third arbitrator shall be appointed by the American Arbitration Association. Such arbitration shall be conducted in accordance with the rules of the American Arbitration Association, except with respect to the selection of arbitrators which shall be as provided in this Paragraph 18. Judgment upon the award rendered by the arbitrators may be entered in any court having jurisdiction thereof. In the event that it shall be necessary or desirable for the Employee to retain legal counsel and/or incur other costs and expenses in connection with the enforcement of any or all of the Employee's rights under this Agreement, the Company shall pay or the Employee shall be entitled to recover from the Company, as the case may be, the Employee's reasonable attorneys' fees and other reasonable costs and expenses in connection with the enforcement of said rights (including the enforcement of any arbitration award in court) regardless of the final outcome, unless and to the extent the arbitrators shall determine that under the circumstances recovery by the Employee of all or a part of any such fees and costs and expenses would be unjust. 20. SHAREHOLDER APPROVAL. This Agreement shall be subject to the approval of the shareholders of the Company at the next Annual Meeting of Shareholders and shall be of no further force or effect unless such approval is obtained in a separate vote by the affirmative vote of a majority of the voting shares present or represented and entitled to vote at such meeting. In the event that such shareholder approval is not forthcoming, the Option granted under Paragraph 4 of this Agreement shall not become exercisable and shall otherwise become cancelled. ATTEST: PRIMARK CORPORATION 7 7 /s/ LINDA LUKE LEE By /s/ MICHAEL R. KARGULA - - ----------------------------- -------------------------------- Assistant Secretary Senior Vice President, General Counsel and Secretary WITNESS: EMPLOYEE /s/ JILL A. HOGUE /s/ JOSEPH E. KASPUTYS - - ----------------------------- ----------------------------------- Joseph E. Kasputys 8 8 Exhibit 10.11 PRIMARK CORPORATION NON-QUALIFIED STOCK OPTION AGREEMENT ------------------------------------ This Non-Qualified Stock Option Agreement (the "Option Agreement") is made this 7th day of January, 1997, by and between Primark Corporation, a Michigan corporation (the "Company") and Joseph E. Kasputys (the "Optionee"). WHEREAS, the Company has determined that it is desirable and in its best interests to grant to the Optionee an option to purchase a certain number of shares of the Company's Common Stock (the "Stock"); WHEREAS, this Option Agreement and the grant of the option to the Optionee have been authorized and approved by the Compensation Committee of the Board of Directors of the Company (the "Committee"); NOW, THEREFORE, in consideration of the mutual promises and covenants, and subject to the conditions, contained herein, the parties hereto do hereby agree as follows: 1. GRANT OF OPTION. Subject to the terms and conditions set forth herein, the Company hereby grants to the Optionee the right and option (the "Option") to purchase from the Company, on the terms and subject to the conditions hereinafter set forth, 1,000,000 shares of Stock. 2. PRICE. The purchase price (the "Option Price") for the shares of Stock subject to the Option granted by this Option Agreement shall be as follows: (a) For 500,000 shares of Stock subject to the Option, the Option Price is $24.25 per share, which price is not less than the closing price of a share of Stock on the New York Stock Exchange on the date of grant; (b) For 250,000 shares of Stock subject to the Option, the Option Price is $30.313 per share, which price is not less than 125% of the closing price of a share of Stock on the New York Stock Exchange on the date of grant; and (c) For the remaining 250,000 shares of Stock subject to the Option, the Option Price is $36.375 per share, which price is not less than 150% of the closing price of a share of Stock on the New York Stock Exchange on the date of grant. 3. EXERCISE OF OPTION. ------------------ (a) Except as otherwise provided herein and provided the Optionee is an employee of the Company at each vesting date, the Option granted pursuant to this Option Agreement shall become exercisable in the following installments: 9 (i) That portion of the Option covering the 500,000 shares of Stock referred to in Section 2(a) above shall be exercisable on or after the second anniversary of the date of grant of the Option; (ii) That portion of the Option covering the 250,000 shares of Stock referred to in Section 2(b) above shall be exercisable on or after the third anniversary of the date of grant of the Option; and (iii) That portion of the Option covering the 250,000 shares of Stock referred to in Section 2(c) above shall be exercisable on or after the fourth anniversary of the date of grant of the Option. Notwithstanding the foregoing, the vesting of such Option shall be accelerated, in the sole discretion of the Committee, in the event that the Optionee develops a successor as Chief Executive Officer of the Company. (b) In the event of a "Change of Control" (as defined in Section 2 of the Change of Control Compensation Agreement dated April 30, 1987 between the Company and Optionee): (i) all of the shares of common stock with respect to which the Option was not previously exercisable and vested shall become fully exercisable and vested; and (ii) if the Optionee so elects, the value of the Option shall, to the extent exercisable and vested (after application of the preceding clause (i)), be cashed out on the basis of the "Change of Control Price" as of the date the Change of Control occurs or such other date as the Board of Directors of the Company may determine prior to the Change of Control. (c) For purposes of this Paragraph 3, "Change of Control Price" means the higher of (i) the highest price per share paid or offered in any transaction related to a Change of Control of the Company or (ii) the highest price per share paid in any transaction reported on the exchange on which the common stock is traded, at any time during the preceding sixty day period, as determined by the Board of Directors of the Company. (d) During the lifetime of the Optionee, only the Optionee (or, in the event of the Optionee's legal incapacity or incompetency, the Optionee's guardian or legal representative) may exercise the Option. (e) The Optionee may exercise the Option only while the Optionee is employed by the Company or any corporation in which the Company owns, directly or indirectly, stock possessing 50 percent or more of the total combined voting power of all classes of stock (a "Subsidiary"), and immediately upon the Optionee's termination of employment the Option shall terminate and the Optionee shall have no further right to purchase shares of Stock under this 2 10 Option, except as provided in Subsections (f), (g) and (h) of this Section. However, if the Optionee's employment with the Company is terminated without cause, all options granted to Executive hereunder shall become fully vested and all such options shall be exercisable until the 90th day following the date of such termination. Any options remaining unexercised shall thereafter immediately terminate. (f) In the event of the Optionee's death while employed by the Company or within three years following the Optionee's retirement from the Company at age 62 or older, the Optionee's designated beneficiary or, in the absence of a beneficiary designation, the personal representative or legatees or distributees of the Optionee's estate, as the case may be, shall have the right to exercise all or any part of the Option to the extent the Option was exercisable on the date of the Optionee's death, only until the later of one year after the date of the Optionee's death and three years after the Optionee's retirement from the Company at age 62 or older but in any event not later than the original expiration date of the Option. The Optionee may designate to the Company on a form provided by the Company for that purpose, a beneficiary who may exercise the Option after the Optionee's death under this Subsection (f). Such designation may be cancelled or changed by the Optionee in his discretion, but no cancellation or change will be recognized by the Company unless effected in writing on a form provided by the Company for that purpose and filed with the Company. (g) If the Optionee's termination of employment is by reason of "permanent and total disability" (within the meaning of Section 22(e)(3) of the Internal Revenue Code of 1986, as amended (the "Code")), the Optionee or the Optionee's guardian or legal representative shall have the right to exercise all or any part of the Option to the extent the Option was exercisable at the time of such termination of employment, at any time within one year after such termination of employment but not later than the original expiration date of the Option. (h) Upon termination of employment from the Company by reason of retirement at age 62 or older, the Option may be exercised, to the extent that the Option was exercisable on the date of such termination of employment, only until the earlier of three years after the date of such termination of employment or the original expiration date of the Option. (i) The Option shall terminate upon the earlier of (i) the expiration of a period of ten years from the date of grant of the Option, as set forth in Section 13 below; or (ii) the Optionee's termination of employment with the Company or a subsidiary, unless such termination falls within the scope of the penultimate sentence of Subsection (e) or within Subsection (f), (g) or (h) of this Section and in such event upon the expiration of the period after the Optionee's termination of employment within which the Option is exercisable as specified in such subsections. (j) In no event shall the Optionee be entitled to exercise the Option unless and until this Agreement shall have been approved in a separate vote by the affirmative vote of the holders of a majority of the voting shares of the Company present or represented and entitled to vote at the Company's next annual meeting of shareholders. 3 11 4. METHOD OF EXERCISE OF OPTION. Subject to the terms and conditions of this Option Agreement, the Option may be exercised by delivering written notice of exercise to the Company, at its principal office, addressed to the attention of the Secretary of the Company, which notice shall specify the number of shares for which the Option is being exercised, and shall be accompanied by payment in full of the Option Price for the shares for which the Option is being exercised. Payment of the Option Price for the shares of Stock purchased pursuant to the exercise of the Option shall be made (i) in cash or in cash equivalent, or (ii) by delivery of a promissory note to the Company, in accordance with the provisions set forth below, or (iii) by delivery of shares of Stock, unless otherwise prohibited by the Committee, having at the time the Option is exercised, an aggregate fair market value equal to the portion of the Option price not paid for in cash or by promissory note. Upon exercise of the Option the Optionee may borrow from the Company an amount not exceeding the lesser of 80% of the fair market value on the exercise date of the shares for which the Option is being exercised or 100% of the Option Price. Any such loan shall be evidenced by a promissory note, in a form previously approved by the Company, which shall bear interest at the minimum rate required to preclude the imputation of interest under applicable provisions of the Code. The term of the note shall not exceed three years; PROVIDED, HOWEVER, that upon the Optionee's termination of employment with the Company or a subsidiary, other than by reason of the death, permanent and total disability (within the meaning of Section 22(e)(3) of the Code) of the Optionee or retirement from the Company by the Optionee and other than as described in the immediately following sentence, the balance of the note together with interest accrued thereon shall become immediately due and payable. In the event that the Executive's employment is terminated by the Company without cause, the balance of the note together with interest accrued thereon shall be due and payable on the 90th day following such termination date. If the person exercising the Option is not the Optionee, such person shall also deliver with the notice of exercise appropriate proof of his or her right to exercise the Option. An attempt to exercise the Option granted hereunder other than as set forth above shall be invalid and of no force and effect. Promptly after exercise of the Option as provided for above, the Company shall deliver to the person exercising the Option a certificate or certificates for the shares of Stock being purchased; PROVIDED, HOWEVER, that certificates for any shares paid for by delivery of a promissory note shall be retained by the Company accompanied by a separate stock power endorsed in blank by the Optionee, in pledge as security for the payment of the promissory note. In the event that the balance of principal and interest owing under the promissory note on the last business day of any month exceeds 90% of the fair market value of those shares held in pledge as security for payment of such principal and interest, the Company shall notify the Optionee that an additional amount is due and payable within seven days to the Company so as to reduce the balance owing under such promissory note to within 80% of the fair market value of such shares. In total or partial satisfaction thereof, the Optionee may pledge additional shares of Stock provided that certificates for such shares are delivered to the Company accompanied by a separate stock power endorsed in blank by the Optionee. In the event additional shares of Stock are delivered to the Company pursuant to the preceding sentence, such shares shall be valued at the closing price of the Stock on the New York Stock Exchange on the business day immediately prior to the day the Company receives such shares from the Optionee. Any dividends on the shares held in pledge in connection with the loan shall be paid to the Company on behalf of the Optionee and first shall be applied by the Company against unpaid interest and thereafter to unpaid principal owed under the note. 4 12 5. LIMITATION ON TRANSFER. The Option is not transferable by the Optionee, other than by will or the laws of descent and distribution in the event of death of the Optionee. 6. RIGHTS AS SHAREHOLDER. Neither the Optionee nor any executor, administrator, distributee or legatee of the Optionee's estate shall be, or have any of the rights or privileges of, a shareholder of the Company in respect of any shares of Stock transferable hereunder unless and until such shares have been fully paid and certificates representing such shares have been endorsed, transferred and delivered, and the name of the Optionee (or of such personal representative, administrator, distributee or legatee of the Optionee's estate) has been entered as the shareholder of record on the books of the Company. 7. EFFECT OF CHANGES IN CAPITALIZATION. ------------------------------------ (a) CHANGES IN STOCK. If the outstanding shares of Stock are increased or decreased or changed into or exchanged for a different number or kind of shares or other securities of the Company by reason of any recapitalization, reclassification, stock split-up, combination of shares, exchange of shares, stock dividend or other distribution payable in capital stock, or other increase or decrease in such shares effected without receipt of consideration by the Company occurring after the date the Option is granted, a proportionate and appropriate adjustment shall be made by the Company in the number and kind of shares subject to the Option, so that the proportionate interest of the Optionee immediately following such event shall, to the extent practicable, be the same as immediately prior to such event. Any such adjustment in the Option shall not change the total Option Price with respect to shares subject to the unexercised portion of the Option but shall include a corresponding proportionate adjustment in the Option Price per share. (b) REORGANIZATION IN WHICH THE COMPANY IS THE SURVIVING CORPORATION. Subject to Subsection C of this Section, if the Company shall be the surviving corporation in any reorganization, merger or consolidation of the Company with one or more other corporations, the Option shall pertain to and apply to the securities to which a holder of the number of shares of Stock subject to the Option would have been entitled immediately following such reorganization, merger or consolidation, with a corresponding proportionate adjustment of the Option Price per share so that the aggregate Option Price thereafter shall be the same as the aggregated Option Price of the shares remaining subject to the Option immediately prior to such reorganization, merger or consolidation. (c) REORGANIZATION IN WHICH THE COMPANY IS NOT THE SURVIVING CORPORATION OR SALE OF ASSETS OR STOCK. Upon the dissolution or liquidation of the Company, or upon a merger, consolidation or reorganization of the Company with one or more other corporations in which the Company is not the surviving corporation, or upon a sale of substantially all of the assets of the Company to another corporation, or upon any transaction (including, without limitation, a merger or reorganization in which the Company is the surviving corporation) approved by the Board which results in any person or entity owning eighty percent (80%) or more of the combined voting power of all classes of stock of the Company, the Option hereunder shall terminate, except to the extent provision is made in connection with such transaction for the continuation and/or the assumption of 5 13 the Option, or for the substitution for the Option of new options covering the stock of a successor employer corporation, or a parent or subsidiary thereof, with appropriate adjustments as to the number and kinds of shares and exercise prices, in which event the Option shall continue in the manner and under the terms so provided. In the event of any such termination of the Option, the entire Option shall become fully vested and exercisable and the Optionee shall have the right (subject to the limitations on exercise set forth in Section 3 above), for thirty (30) days immediately prior to the occurrence of such termination, to exercise the Option in whole or in part, to the extent the Option had not expired. The Company shall send written notice of an event that will result in such a termination to the Optionee not later than the time at which the Company gives notice thereof to its shareholders. (d) ADJUSTMENTS. Adjustments specified in this Section relating to stock or securities of the Company shall be made by the Committee, whose determination in that respect shall be final, binding and conclusive. No fractional shares of Stock or units of other securities shall be issued pursuant to any such adjustment, and any fractions resulting from any such adjustment shall be eliminated in each case by rounding downward to the nearest whole share or unit. 8. GENERAL RESTRICTIONS. The Company shall not be required to sell or issue any shares of Stock under the Option if the sale or issuance of such shares would constitute a violation by the individual exercising the Option or by the Company of any provision of any law or regulation of any governmental authority, including without limitation any federal or state securities laws or regulations. If at any time the Company shall determine, in its discretion, that the listing, registration or qualification of any shares subject to the Option upon any securities exchange or under any state or federal law, or the consent or approval of any government regulatory body, is necessary or desirable as a condition of, or in connection with, the issuance or purchase of shares hereunder, the Option may not be exercised in whole or in part unless such listing, registration, qualification, consent or approval shall have been effected or obtained free of any conditions not acceptable to the Company, and any delay caused thereby shall in no way affect the date of termination of the Option. Specifically in connection with the Securities Act of 1993 (as now in effect or as hereafter amended), unless a registration statement under such Act is in effect with respect to the shares of Stock covered by the Option, the Company shall not be required to sell or issue such shares unless the Company has received evidence satisfactory to it that the holder of the Option may acquire such shares pursuant to an exemption from registration under such Act. Any determination in this connection by the Company shall be final, binding, and conclusive. The Company may, but shall in no event be obligated to, register any securities covered hereby pursuant to the Securities Act of 1933 (as not in effect or as hereafter amended). The Company shall not be obligated to take any affirmative action in order to cause the exercise of the Option or the issuance of shares pursuant thereto to comply with any law or regulation of any governmental authority. As to any jurisdiction that expressly imposes the requirements that the Option shall not be exercisable unless and until the shares of Stock covered by the Option are registered or are subject to an available exemption from registration, the exercise of the Option (under circumstances in which the laws of such jurisdiction apply) shall be deemed conditioned upon the effectiveness of such registration or the availability of such an exemption. 6 14 9. WITHHOLDING OF TAXES. The parties hereto recognize that the Company may be obligated to withhold federal and local income taxes and Social Security taxes to the extent that the Optionee realizes ordinary income in connection with the exercise of the Option. The Optionee agrees that the Company may withhold amounts needed to cover such taxes from payments otherwise due and owing to the Optionee, and also agrees that upon demand the Optionee will promptly pay to the Company having such obligation any additional amounts as may be necessary to satisfy such withholding tax obligation. Unless otherwise prohibited by the Committee, the Optionee may satisfy any such withholding tax obligation by any of the following means or by a combination of such means: (a) tendering a cash payment, (2) authorizing the Company to withhold from the shares of Stock otherwise issuable to the Optionee as a result of the exercise of the Option that number of shares having a fair market value, as of the date the withholding tax obligation arises, less than or equal to the amount of the withholding tax obligation; or (3) delivering to the Company owned and unencumbered shares of Stock having a fair market value as of the date the withholding tax obligation arises, less than or equal to the amount of the withholding tax obligation. A participant's election to pay the withholding tax obligation by either of the latter two means of payment is irrevocable and may be disapproved by the Committee. 10. DISCLAIMER OF RIGHTS. No provision in this Option Agreement shall be construed to confer upon the Optionee the right to be employed by the Company or any subsidiary, or to interfere in any way with the right and authority of the Company or any subsidiary to terminate any employment or other relationship between the Optionee and the Company or any subsidiary, or to obligate the Company to appoint the Optionee as the President of the Company. 11. INTERPRETATION OF THIS OPTION AGREEMENT. All decisions and interpretations made by the Committee or the Board of Directors of the Company with regard to any question arising under this Option Agreement shall be binding and conclusive on the Company and the Optionee and any other person entitled to exercise the Option as provided for herein. 12. GOVERNING LAW. This Option Agreement is executed pursuant to and shall be governed by the laws of the State of Massachusetts (but not including the choice of law rules thereof). 13. DATE OF GRANT. The date of grant of this Option is January 7, 1997, subject to approval of this Agreement by the shareholders of the Company as provided in Section 3(i) above. 14. BINDING EFFECT. Subject to all restrictions provided for in this Option Agreement and by applicable law relating to assignment and transfer of this Option Agreement and the option provided for herein, this Option Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, executors, administrators, successors, and assigns. 15. NOTICE. Any notice hereunder by the Optionee to the Company shall be in writing and shall be deemed duly given if mailed or delivered to the Company at its principal office, addressed to the attention of the Committee, or if so mailed or delivered to such other address as the Company may hereafter designate by notice to the Optionee. Any notice hereunder by the Company to the Optionee shall be in writing and shall be deemed duly given if mailed or delivered 7 15 to the Optionee at the address specified below by the Optionee for such purpose, or if so mailed or delivered to such other address as the Optionee may hereafter designate by written notice given to the Company. 16. ENTIRE AGREEMENT. This Option Agreement, the Change of Control Compensation Agreement, Registration Rights Agreement and the Employment Agreement entered into between the Company and the Optionee constitutes the entire agreement and supersedes all prior understandings and agreements, written or oral, of the parties hereto with respect to the subject matter hereof. Neither this Option Agreement nor any term hereof may be amended, waived, discharged or terminated except by a written instrument signed by the Company and the Optionee; PROVIDED, HOWEVER, that the Company unilaterally may waive any provision hereof in writing to the extent that such waiver does not adversely affect the interests of the Optionee hereunder, but no such waiver shall operate as or be construed to be a subsequent waiver of the same provision or a waiver of any other provision hereof. IN WITNESS WHEREOF, the parties hereto have duly executed this Option Agreement, or caused this Option Agreement to be duly executed on their behalf, as of the day and year first above written. ATTEST: PRIMARK CORPORATION /s/ LINDA LUKE LEE By: /s/ MICHAEL R. KARGULA - - --------------------------- --------------------------------------- Title: SR. Vice President & General Counsel & Secretary ------------------------------------- OPTIONEE: /s/ JOSEPH E. KASPUTYS ------------------------------------------ Joseph E. Kasputys ADDRESS FOR NOTICE TO OPTIONEE: ------------------------------------------ ------------------------------------------ ------------------------------------------ 8 16 NOTICE OF BENEFICIARY DESIGNATION --------------------------------- Pursuant to Section 3f of that certain Primark Corporation Non-Qualified Stock Option Agreement dated January 7, 1997 (the "Agreement"), I hereby revoke all prior designations and designate ________________ as my beneficiary under the Agreement in the event of my death. I understand that this designation may be cancelled or changed by me at any time by filing a new written Notice of Beneficiary Designation with Primark Corporation at its principal offices, directed to the attention of the Secretary. OPTIONEE: Date: /s/ LINDA LUKE LEE /s/ JOSEPH E. KASPUTYS ------------------------- ------------------------------------ Joseph E. Kasputys WITNESS: /s/ MICHAEL R. KARGULA ------------------------------------ Michael R. Kargula 9 EX-10.12 8 EMPLOYMENT AGREEMENT - THE ANALYTIC SCIENCES CORP. 1 Exhibit 10.12 LONG-TERM INCENTIVE AGREEMENT ----------------------------- This Long-Term Incentive Agreement (the "Agreement") is dated as of February 29, 1996 between TASC, Inc., a Massachusetts corporation ("TASC") and John C. Holt (the "Executive"). WHEREAS, TASC, the Executive and Primark Corporation ("Primark" or the "Company") are parties to a certain Employment Agreement dated as of February 28, 1994 (the "Employment Agreement") pursuant to which the Executive would be entitled to receive a cash payment (the "EVA Agreement") if TASC achieved a certain amount of economic value-added ("EVA"); and WHEREAS, since entering into the Employment Agreement, the Company and TASC have determined that using the full 5-year performance period and EVA criteria contained in the Employment Agreement would penalize the Executive for operations and strategic decisions made prior to his becoming President and Chief Executive Officer of TASC; and WHEREAS, in order to correct the unintentional results described above and provide the Executive with an effective incentive, the Employment Agreement was amended in the summer of 1995 to commence a new performance period on January 1, 1995 (the "1995 Amendment"); and WHEREAS, subsequently the Company and TASC sought, but were unable to obtain from the Internal Revenue Service, a change in the requirements of the performance-based compensation exception contained in Section 162(m) of the Internal Revenue Code ("Code") that would have allowed the use of an EVA performance period commencing on January 1, 1995; and WHEREAS, the final regulations relating to Section 162(m) of the Code were promulgated on December 19, 1995; and 2 WHEREAS, the parties now desire to terminate the EVA provision of the Employment Agreement and the entire 1995 Amendment and establish a new long-term incentive compensation plan for the Executive that would commence on January 1, 1996 and otherwise comply with the requirements of Section 162(m) of the Code. NOW, THEREFORE, in consideration of the premises and the mutual promises set forth in the Employment Agreement, the parties hereto agree as follows: 1. In consideration of the payment to the Executive of $516,316, the parties hereto agree that Paragraphs 3(b), 3(c), and 3(d) of the Employment Agreement and the 1995 Amendment are hereby cancelled and superceded by the terms and provisions of this Agreement, and the Executive hereby releases TASC and Primark and their respective officers, directors and employees from any and all claims, debts, obligations and liabilities arising from or in connection with the aforementioned paragraphs and the 1995 Amendment. 2. (a). The Executive shall be entitled to receive from TASC, subject to the payment limitations and forfeiture provisions described below, a cash payment in the event TASC achieves a certain cumulative amount of "economic value-added" ("EVA") from calendar year 1996 through each calendar year up to and including 1998. Notwithstanding anything herein to the contrary and subject to the provisions of Paragraph 3 hereof, any such cash payment shall be made in accordance with Paragraph (b) hereof. "Economic value-added" is defined as operating income before goodwill and other acquisition costs arising from acquisitions made prior to 1995 minus interest expense incurred by TASC (plus any interest income accrued by TASC) and minus a capital charge. Interest includes interest expense associated with external debt, inter-company loans and capital leases. The capital charge shall be calculated annually as 10% of the average of the net book value of TASC at the opening and close of the year. All figures shall be determined in accordance with generally accepted accounting principles and in a manner consistent with past practices. For purposes of this Paragraph (a), Executive understands and agrees that he shall forfeit his entitlement to any amounts that he may have earned under this Paragraph (a) if (i) he terminates his employment with TASC prior to December 31, 1998 or his employment with 2 3 TASC is terminated for "cause" as that term is defined in Paragraph 9(a) of the Employment Agreement prior to December 31, 1998; or (ii) TASC does not achieve an annual compound growth rate of EVA on a cumulative basis of greater than 10% for the three full years ended December 31, 1998. No payment shall be made before the Compensation Committee of the Board of Directors of Primark (the "Committee") shall have certified in writing that the relevant standard for EVA growth (determined under the table below) shall have been attained and that other material terms shall have been satisfied. The impact of the settlement of any items shall be excluded from the computation of EVA, but only to the extent of the amount of the reserve that may have been established prior to 1996 to cover any such settlement. The expenses incurred by TASC to satisfy a judgment in, or to settle, a lawsuit or proceeding in which TASC was involved as of February 28, 1994, the date Mr. Holt entered into the Employment Agreement, shall be added to EVA. The release of any portion of a general reserve of $350,000 established in 1995 will be deducted from the EVA calculation in any year in which any portion of this reserve may be released. Additionally, with respect to other reserves, it is the intention of this Agreement that EVA be calculated throughout the Agreement using consistently applied methodologies in arriving at such reserves recorded both directly and indirectly (indirect methods include such means as estimates to complete on long-term contracts or overhead rates). The amount of cash payment shall be determined at the end of each calendar year from the following table (all amounts shall be interpolated): =====================================================================================================================
($) (ii) ($000s) ($) (iii) ($000s) ($) Cumulative EVA as Determined Cumulative 32.57% Cumulative Cumulative (i) ($000s) ----------- ------------------ ----------- ------------------ ---------- Year 10% Cumulative EVA Payment from 1995 Plan Payment EVA Payment ---- ------------------ ------- -------------- ------- --- ------- - - --------------------------------------------------------------------------------------------------------------------- 1996 14,779 0 15,702 289,000 21,373 1,056,000 - - --------------------------------------------------------------------------------------------------------------------- 1997 31,036 0 34,303 632,000 49,706 2,474,000 - - --------------------------------------------------------------------------------------------------------------------- 1998 48,919 0 57,193 1,053,000 87,267 4,379,000 =====================================================================================================================
Notes: EVA and cumulative EVA figures are reduced for expenses incurred and/or accrued under this Agreement. References in column (ii) hereinabove to "Plan" shall mean the 1995-1999 Plan. References in column (iii) hereinabove to "32.57% Cumulative EVA" shall mean 32.57% compounded annual growth of EVA from the 1995 EVA originally anticipated in the 1995-1999 Plan. 3 4 TASC agrees to provide Executive with an annual statement, starting in 1997, showing the EVA for the previous year and the calculations used in deriving the EVA. The Executive shall have the opportunity to review such calculations with the Board of Directors of TASC or its designee. The failure to provide such a statement shall not in any way inure to the benefit of the Executive or to the detriment of TASC. In no event shall the cash payment exceed $4.379 million. (b). As an example, if cumulative EVA from 1996 through 1998 was $82,000,000, the entitlement for payment from TASC would be $3,796,502. This is calculated by $1,053,000 + [($82,000,000 - $57,193,000) / ($87,267,000 - $57,193,000)] x ($4,379,000 - $1,053,000). (c). The parties hereto agree that if the payment hereunder is greater than $2 million, TASC may make such payment over a 3-year period in three equal annual installments with interest at the rate of one percent above the prime rate (defined as the base rate on corporate loans at large U.S. money center commercial banks as published by the Wall Street Journal). The first such installment shall be paid not later than March 31, 1999, the second installment shall be paid not later than March 31, 2000 and the third installment shall be paid not later than March 31, 2001. If the payment hereunder is less than $2 million, such payment shall be made not later than March 31, 1999. 3. Notwithstanding anything to the contrary in the Employment Agreement and in lieu of the EVA amount payable under Section 9(b) of the Employment Agreement, if the Executive's employment with TASC is terminated without cause in 1997 or 1998, TASC shall be obligated, concurrently with such termination, to make a cash payment to the Executive (in addition to any other severance amount payable under the Employment Agreement), the amount of which shall be calculated as follows: (a). Commencing with calendar year 1996, determine the sum of the EVA for each full year ended December 31st in which the Executive was actually employed by TASC; 4 5 (b). Using the table in Paragraph 2(a) above, determine the dollar amount of payment, interpolating if necessary; (c). The amount derived in (b) above minus applicable taxes shall be the amount of the cash payment. Thus, for purposes of illustration only, if the Executive was terminated on January 1, 1998 and assuming that EVA for 1996 and 1997 was $20 million and $25 million, respectively, the cumulative EVA would be $45 million. Interpolating in the 1997 row of the table in Paragraph 2(a) above, the cash payment would be $1,911,223, i.e. $632,000 + [($45,000,000 - $34,303,000)/($49,706,000 - $34,303,000)] x ($2,474,000 - $632,000). Such amount shall constitute the sole obligation of TASC with respect to the payment of any amount calculated on the basis of EVA. Upon payment of such amount, the Executive shall have no further rights or claims with respect thereto and expressly waives all liabilities and cause of actions that he may have against TASC with respect to any payment calculated on the basis of EVA. No amount referred to in this Paragraph 3 shall be made unless and until the Committee shall have certified the extent to which the relevant standard for EVA growth shall have been obtained for the relevant periods. 4. This Agreement shall be administered by the Committee. 5. This Agreement is in no way intended to guarantee continued employment for the Executive with TASC or any affiliated company or entity. 6. This Agreement shall be governed by the laws of the United States to the extent applicable and otherwise by the Commonwealth of Massachusetts. 7. Any controversy or claim arising out of or relating to this Agreement or the breach thereof shall be settled by arbitration in accordance with the laws of the Commonwealth of Massachusetts by three arbitrators, one of whom shall be appointed by TASC, one by the Executive and the third by the first two arbitrators. TASC and the Executive agree to appoint their arbitrator within 90 days of receipt of a notice delivered in accordance with Paragraph 8 hereunder from the 5 6 other party setting forth a description of the controversy or claim and requesting that the arbitrators be appointed. If either party fails to select an arbitrator within such 90 day period the non-failing party may appoint a second arbitrator and the failing party shall be deemed to have waived its or his rights to appoint an arbitrator. If the first two arbitrators cannot agree on the appointment of a third arbitrator, then the third arbitrator shall be appointed by the American Arbitration Association. Such arbitration shall be conducted in accordance with the rules of the American Arbitration Association, except with respect to the selection of arbitrators which shall be as provided in this Paragraph 7. Judgment upon the award rendered by the arbitrators may be entered in any court having jurisdiction thereof. In the event that it shall be necessary or desirable for the Executive to retain legal counsel and/or incur other costs and expenses in connection with the enforcement of any or all of the Executive's rights under this Agreement and assuming that the Executive is more successful in such enforcement than TASC, TASC shall pay or the Executive shall be entitled to recover from TASC, as the case may be, the Executive's reasonable attorneys' fees and other reasonable costs and expenses in connection with the enforcement of said rights (including the enforcement of any arbitration award in court). 8. For purposes of this Agreement, notices and all other communications provided for in the Agreement shall be in writing and shall be deemed to have been duly given when delivered or mailed by United States Registered mail, return receipt requested, postage prepaid, as follows: If to TASC: TASC 55 Walkers Brook Drive Reading, Massachusetts 01867 Attention: General Counsel If to the Executive: Mr. John C. Holt 313 Ocean Avenue Marblehead, MA 01945 or such other address as either party may have furnished to the other in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt. 6 7 9. This Agreement shall be subject to the approval of the shareholders of Primark at the 1996 Annual Meeting of Shareholders and shall be of no further force or effect unless such approval is obtained in a separate vote by the affirmative vote of a majority of the voting shares present or represented and entitled to vote at such meeting. ATTEST: TASC, INC. Michael R. Kargula By: /s/ JOSEPH E. KASPUTYS - - ---------------------------------- ----------------------------- Chairman WITNESS: EXECUTIVE /s/ MARYANN MADORE /s/ JOHN C. HOLT - - ---------------------------------- ------------------------------------ John C. Holt ACKNOWLEDGED: PRIMARK CORPORATION By: /s/ JOSEPH E. KASPUTYS ------------------------------ Title: Chairman, President and CEO ---------------------------- EX-10.13 9 EMPLOYMENT AGREEMENT - IRA HERENSTEIN 1 Exhibit 10.13 EMPLOYMENT AGREEMENT -------------------- This EMPLOYMENT AGREEMENT (the "Agreement") is dated as of December 3, 1996 between DATASTREAM INTERNATIONAL, INC., a Delaware corporation ("DII"), PRIMARK CORPORATION, a Michigan Corporation (the "Company"), PRIMARK INFORMATION SERVICES UK LIMITED, a corporation organized under the laws of the United Kingdom and Wales ("Primark UK"), and IRA HERENSTEIN (the "Executive"). WHEREAS, pursuant to an employment agreement dated as of June 30, 1995 by and between the above referenced parties (the "Old Employment Agreement"), the Executive is employed as Managing Director of Datastream International Limited, a corporation organized under the laws of the United Kingdom and Wales ("Datastream"); and WHEREAS, all of the parties to the Old Employment Agreement desire to cancel and terminate substantially all of the provisions of such agreement; and WHEREAS, Primark Corporation and Executive desire to execute a new employment agreement setting forth all of the terms and conditions of the Executive's employment relationship with Primark. NOW, THEREFORE, IT IS AGREED AS FOLLOWS: 1. CANCELLATION OF OLD EMPLOYMENT AGREEMENT. Except as stated below, the employment agreement dated June 30, 1995 by and between DII, the Company, Primark UK and the Executive (the "Old Employment Agreement") is hereby cancelled and terminated and each party thereto releases all of the other parties thereto from any claims, damages, obligations or liabilities that such party may have against any other party thereto relating to the employment of the Executive. Notwithstanding anything herein to the contrary, the Restrictive Covenants contained in Paragraph 8 to the Old Employment Agreement shall continue to survive and shall not be deemed cancelled or terminated. The Executive hereby resigns voluntarily effective as of this date, from all positions and offices he holds with Datastream, DII, Primark UK and their affiliates. 2. EMPLOYMENT AND SALARY. ---------------------- (a) As of the date hereof, Executive shall be employed as Senior Vice President of Marketing for the Company. In such capacity, the Executive shall render on a full-time basis marketing services ("services") to the Company of the type customarily performed by persons serving in a similar executive officer capacity and shall report to the Chief Executive Officer of the Company. In 2 devoting his full-time and undivided attention during normal business hours to the foregoing responsibilities, Executive shall be permanently located in DII's New York office. During the term of this Agreement, there shall be no material increase or decrease in the duties and responsibilities of the Executive otherwise than as provided herein, unless the parties otherwise agree in writing. (b) The Company agrees to pay the Executive during the term of this Agreement an annual salary of $325,000 with such salary to be increased from time to time as determined by the Company's Chief Executive Officer and approved by the Company's Board of Directors. The salary of the Executive shall not be decreased at any time during the term of this Agreement from the amount then in effect, unless the Executive otherwise agrees in writing. The salary under this Paragraph 2 shall be payable by the Company to the Executive in equal installments during each month pursuant to the Company's standard pay practices. 3. BONUS. ----- (a) The Executive shall have the opportunity to earn a bonus at target of 40 percent of his annual salary determined on the basis of the attainment of annual financial and/or non-financial targets for the Company. It is expressly understood, however, that the amount of the bonus shall increase or decrease depending upon the amount by which the actual annual financial and/or non-financial results for the Company exceed or fall short of the targets. The formula for establishing the amount of bonus to be paid, in the event the targets are exceeded or not achieved, shall be established annually by the Company's Chief Executive Officer and approved by the Company's Board of Directors. (b) In no event shall Executive earn or be entitled to receive an annual bonus greater than 80% of his salary, nor shall the Executive receive an annual bonus less than $75,000. 4. PARTICIPATION IN EMPLOYEE BENEFIT PLANS; INSURANCE; OTHER FRINGE ---------------------------------------------------------------- BENEFITS. -------- (a) While the Executive shall be governed by the Company's policies applicable to other employees and executive officers, the Executive shall not be entitled to participate in any plan of the Company's relating to pension, profit-sharing, group life insurance, medical coverage, disability, dental, education, or other retirement or employee benefits that the Company had adopted or may adopt for the benefit of its executive officers or employees, and Executive expressly waives such participation. (b) Notwithstanding the foregoing, the Executive shall be entitled to receive the following fringe benefits during the term of this Agreement: 2 3 (i) Participation in stock-based plans such as the Company's Employee Stock Ownership Plan and any stock based plan that may be adopted in the future for the benefit of the Company's employees; (ii) The Executive shall be entitled to a vacation of 20 days during each year of his employment pursuant to this Agreement. The Executive shall also be entitled to all public holidays observed by the Company. (iii) The Executive shall be reimbursed by the Company for reasonable travel and other expenses which are incurred and accounted for in accordance with the Company's normal practices or as otherwise agreed to by the Company and the Executive. (iv) The provision of an automobile under a three-year lease with the right of the Executive to purchase such automobile at the end of such three-year lease pursuant to the terms of the lease provided that the total lease payments over the three-year period shall not exceed $30,000. (v) The Executive shall be entitled to receive up to $3,000 annually as reimbursement for expenses incurred in obtaining tax and estate planning assistance. (vi) The Executive shall be entitled to be covered under the Company's life insurance policy in an amount equal to two times salary. (vii) Participation in the foregoing fringe benefits shall not reduce the salary or bonus payable to the Executive under Paragraph 2 or 3 above. 5. STOCK OPTIONS AND OTHER LONG-TERM INCENTIVES. --------------------------------------------- (a) The stock option of 100,000 shares of common stock of the Company granted to the Executive under the terms of the Old Employment Agreement shall continue to vest in 3 equal installments with the final installment vesting on June 30, 1998. (b) All vested Value Appreciation Rights that have been granted to the Executive under Primark UK's Long-Term Incentive Plan ("Incentive Plan") shall be deemed exercised as of September 30, 1996 and that date shall be the Valuation Date, as that term is defined in the Incentive Plan. Any monies payable to Executive due to the aforementioned exercise shall be paid to him as soon as practicable following the execution of this Agreement by all parties. All Value Appreciation Rights that have been granted to the Executive that are 3 4 unvested as of the date hereof shall be cancelled and shall never become exercisable. 6. TERM. The term of this Agreement shall be for a period commencing as of the date hereof and ending June 30, 1998. 7. TERMINATION OF EMPLOYMENT. -------------------------- (a) Notwithstanding any provision of this Agreement, the employment of the Executive pursuant to this Agreement shall be terminated immediately upon (i) the death of the Executive; (ii) a determination by the Board of Directors of the Company, acting in good faith with reasonable basis in fact, but made in the sole discretion of such Board, that the Executive has performed his services in a materially unsatisfactory manner, provided, however, such determination shall not be arbitrary or capricious and provided further that prior to any such determination being made, the Executive shall be notified of the grounds for the termination whereupon the Executive shall have thirty (30) days to correct the same unless such time period is extended by the Board of Directors in its sole discretion; (iii) a determination by the Board of Directors of the Company, acting in good faith and with reasonable basis in fact, but made in the sole discretion of such Board, that the Executive (a) has become physically or mentally incapacitated and unable to perform his normal duties under this Agreement and that such incapacity or inability has continued for a period of three consecutive calendar months, (b) has breached any of the terms of this Agreement, provided that Executive shall be given written notice of such breach and shall have fifteen days from the date of receipt of such notice to cure the breach or if the breach is of a type which cannot be readily cured within 15 days shall have taken material steps to cure such breach, (c) has refused or failed to carry out any reasonable order of the Board of Directors of the Company, (d) has demonstrated gross negligence in the execution of his duties which resulted or could result in material harm to the Company, or (e) has committed misconduct by willfully violating established corporate policies, or by committing a felony, or by engaging in unlawful acts detrimental to the Company. (b) The parties acknowledge and agree that damages which will result to Executive from employment termination by the Company without cause shall be extremely difficult or impossible to establish or prove, and agree that, unless the termination is for cause pursuant to Paragraph 7(a)(iii)(b), (c), (d) or (e), the Company shall be obligated, concurrently with such termination, to make a lump sum cash payment to the Executive as severance pay of an amount equal to the sum of his then monthly salary times 18 months. In addition, in the event of the employment termination of the Executive by the Company without cause pursuant to Paragraph 7(a)(i), (iii)(a), all stock options referred to in Paragraph 5 shall become immediately vested. Notwithstanding anything herein to the contrary, if the Company terminates the employment of the Executive pursuant 4 5 to Paragraph 7(a)(ii), then the Company shall pay to Executive a lump sum amount equal to the greater of (i) the sum of his then monthly salary times the number of months remaining under the term of this Agreement, or (ii) the sum of his then monthly salary times 18 months. In addition, in the event of the employment termination of the Executive by the Company pursuant to Paragraph 7(a)(ii), (a)(iii)(b), (c), (d) or (e), all unvested stock options referred to in Paragraph 5 shall expire effective on the date of such termination. (c) The Executive understands and agrees that such severance pay and accelerated vesting of stock options shall be in lieu of all other claims which the Executive may make by reason of such termination. 8. RESTRICTIVE COVENANTS. --------------------- (a) The Executive agrees that during the term of this Agreement and for a 24-month period after his termination of employment, he shall not knowingly compete, directly or indirectly, with the products or services of the Company, its subsidiaries or affiliates, nor shall he induce or assist others to knowingly compete, directly or indirectly, with the products or services of the Company, its subsidiaries or affiliates. (b) Unless authorized or instructed in writing by the Company, the Executive shall not, except as required in the conduct of the Company's business, during or after the term of this Agreement, disclose to others, or use, any of the Company's inventions or discoveries or its secret or confidential information, knowledge or data, (oral, written, or in machine-readable form) which the Executive may obtain during the course of or in connection with the Executive's employment, including such inventions, discoveries, information, knowledge, know-how or data relating to machines, equipment, products, systems, software, research and/or development, designs, compositions, formulae, processes, or business methods, whether or not developed by the Company or from third parties, and irrespective or whether or not such inventions, discoveries, information, knowledge or data have been identified by the Company as secret or confidential, unless and until, and then to the extent and only to the extent that, such inventions, discoveries, information, knowledge or data become available to the public otherwise than by the Executive's act or omission. (c) During the term of this Agreement and for a period of two years thereafter the Executive shall not, except as required in the conduct of the Company's business, disclose to others, or use, any of the information relating to present and prospective customers of the Company, business dealings with such customers, prospective sales and advertising programs and agreements with representatives or prospective representatives of the Company, present or prospective sources of supply or any other business arrangements of the 5 6 Company, including but not limited to customers, customer lists, costs, prices and earnings, whether or not such information is developed by the Executive, by others in the Company or obtained by the Company from third parties, and irrespective of whether or not such information has been identified by the Company as secret or confidential, unless and until, and then to the extent and only to the extent that, such information becomes available to the public otherwise than by the Executive's act or omission. (d) Executive agrees that all improvements, developments, or discoveries conceived or made by him, either alone or with others, during his employment with the Company and for a 24-month period thereafter which relate to current or likely future business of the Company or any of its affiliates, whether or not conceived or made on the Company's time or with the Company's resources, are the sole and exclusive property of the Company and the Company may use or pursue them without restriction or further compensation. Executive hereby assigns and transfers to the Company all of his right title and interest in and to such improvements, developments and discoveries. (e) All computer software, computer programs, source codes, object codes, magnetic tapes, printouts, samples, notes, records, reports, documents, customer lists, photographs, catalogs and other writings, whether copyrightable or not, relating to or dealing with the Company's business and plans, and those of others entrusted to the Company, which are prepared or created by the Executive or which may come into his possession during or as a result of his employment, are the property of the Company, and upon termination of his employment, the Executive agrees to return all such computer software, computer programs, source codes, object codes, magnetic tapes, printouts, samples, notes, records, reports, documents, customer lists, photographs, catalogs and writings and all copies thereof to the Company. The Company may withhold the Executive's outstanding salary checks against return of these materials and any other materials of the Company or its customers. (f) During the term of this Agreement and for a 24-month period after his termination of employment, the Executive shall not induce or attempt to induce any customer of the Company or any affiliate to reduce its business with the Company or any affiliate or solicit or attempt to solicit any employee of the Company or any affiliate to leave the employ of the Company or any of its affiliates. (g) The above covenants on the part of the Executive shall survive termination of this Agreement, and the existence of any claim or cause of action of the Executive against the Company or its affiliates, whether predicated on this Agreement or otherwise, shall not constitute a defense to the enforcement by the Company of such covenants. The Executive agrees that a remedy at law for any breach of the foregoing covenants would be inadequate and that the Company 6 7 shall be entitled to a temporary and permanent injunction or any order for specific performance of such covenants without the necessity of proving actual damage to the Company. 9. (Intentionally left blank.) 10. CHANGE OF CONTROL. If the employment of Executive is terminated unilaterally by the Company within one year following the sale to one person or group of sixty percent (60%) or more of the common stock of the Company other than to a corporation wholly owned, directly or indirectly, by the Company, and such termination is for reasons other than as set forth in Paragraphs 7(a)(iii)(b), 7(a)(iii)(c), 7(a)(iii)(d) or 7(a)(iii)(e), then all stock options referred to in Paragraph 5 shall become vested on the date of such termination, and Executive shall receive upon such termination of employment a lump sum equal to the product of (i) the Executive's then monthly salary times (ii) the number of months remaining under the term of this Agreement. 11. ASSIGNMENT. The rights and obligations of the Company under this Agreement shall be assigned by the Company to the successors in interest of the Company. This Agreement may not be assigned by the Executive, but any amounts owing to the Executive upon his death shall inure to the benefit of his heirs, legatees, personal representative, executor or administrator. 12. AMENDMENTS OR ADDITIONS. No amendments or additions to this Agreement shall be binding unless in writing and signed by all parties hereto. 13. PARAGRAPH HEADINGS. The paragraph headings used in this Agreement are included solely for convenience and shall not affect, or be used in connection with, the interpretation of this Agreement. 14. SEVERABILITY. The provisions of this Agreement shall be deemed severable and the invalidity or unenforceability of any provision shall not affect the validity or enforceability of the other provisions hereof. 15. NOTICE. For purposes of this Agreement, notices and all other communications provided for in the Agreement shall be in writing and shall be deemed to have been duly given when delivered or mailed by United States Registered mail, return receipt requested, postage prepaid, as follows: If to DII: Datastream International, Inc. 120 Wall Street, 15th Floor New York, NY 10005 7 8 If to the Company Primark Corporation 1000 Winter Street, Suite 4300N Waltham, MA 02154 Attention: General Counsel and Secretary If to Primark UK: Primark Information Services UK Limited Monmouth House 58-64 City Road London, England EC1Y 2AL If to the Executive: Mr. Ira Herenstein 951 Carol Avenue Woodmere, NY 1598 or such other address as either party may have furnished to the other in writing in accordance herewith, except that notice of change of address shall be effective only upon receipt. 16. GOVERNING LAW. This Agreement shall be governed by the laws of the United States to the extent applicable and otherwise by the State of New York. 17. ARBITRATION OF DISPUTES. Any controversy or claim arising out of or relating to this Agreement or the breach thereof shall be settled by binding arbitration in accordance with the laws of the State of New York by three arbitrators, one of whom shall be appointed by the Company, one by the Executive and the third by the first two arbitrators. The Company and the Executive agree to appoint their arbitrator within 90 days of receipt of a notice delivered in accordance with Paragraph 17 hereunder from the other party setting forth a description of the controversy or claim and the requesting that the arbitrators be appointed. If either party fails to select an arbitrator within such 90-day period the non-failing party may appoint a second arbitrator and the failing party shall be deemed to have waived its or his rights to appoint an arbitrator. If the first two arbitrators cannot agree on the appointment of a third arbitrator, then the third arbitrator shall be appointed by the American Arbitration Association. Such arbitration shall be conducted in accordance with the rules of the American Arbitration Association, except with respect to the selection of arbitrators which shall be provided in this Paragraph 17. Judgment upon the award rendered by the arbitrators may be entered in any court having jurisdiction thereof. In the event that it shall be necessary or desirable for the Executive to retain legal counsel and/or incur other costs and expenses in connection with the enforcement of any or all of the Executive's rights under this Agreement and assuming that the Executive is more successful in such enforcement than the 8 9 Company, the Company shall pay or the Executive shall be entitled to recover from the Company, as the case may be, the Executive's reasonable attorneys' fees and other reasonable costs and expenses in connection with the enforcement of said rights (including the enforcement of any arbitration award in court). 18. ENTIRE AGREEMENT. The foregoing contains the entire agreement between the parties relating to the subject matter of this Agreement, and this Agreement supersedes all prior understandings and agreements relating to employment of the Executive. ATTEST: Datastream International, Inc. /s/ MICHAEL R. KARGULA By: /s/ JOSEPH E. KASPUTYS - - ---------------------------- -------------------------------- Title: Chairman -------------------------------- ATTEST: Primark Corporation /s/ MICHAEL R. KARGULA By: /s/ JOSEPH E. KASPUTYS - - ---------------------------- -------------------------------- Title: Chairman -------------------------------- ATTEST: Primark Information Services UK Limited /s/ MICHAEL R. KARGULA By: /s/ JOSEPH E. KASPUTYS - - ---------------------------- -------------------------------- Title: Chairman -------------------------------- WITNESS: Executive /s/ STACY B. HOWARD By: /s/ IRA HERENSTEIN -------------------------------- Ira Herenstein EX-10.15 10 SUPPLEMENTAL MEDICAL REIMBURSEMENT 1 Exhibit 10.15 LINCOLN [LOGO] NATIONAL Group Policy LIFE Number 40,000 The Lincoln National Life Insurance Company Fort Wayne, Indiana 46801 POLICYHOLDER Trustee of Medical Reimbursement Plan Trust DATE OF ISSUE January 1, 1980 DATE OF REISSUE January 1, 1993 RENEWAL PREMIUMS are due on the 1st day of January, April, July, October and upon submission of claims. POLICY ANNIVERSARIES occur annually beginning January 1, 1994. The situs of Delivery of this policy is Washington, D.C. and it is governed by the laws thereof. IN ACCORDANCE WITH AND SUBJECT TO THE TERMS AND CONDITIONS OF THIS POLICY: The Lincoln National Life Insurance Company (herein called Lincoln National) in consideration of the application of the Policyholder and of the payment of premium due on the Date of Issue and Renewal Premiums as due agrees to provide group insurance benefits with respect to each individual insured on and after the Date of Issue. Coverage under the policy will terminate with respect to a Participating Employer: upon failure of that Employer to pay any premium when due or following written notice by Lincoln National or the Policyholder. This policy and the application of the Policyholder, a copy of which is attached hereto, constitute the entire contract between the parties. IN WITNESS WHEREOF, The Lincoln National Life Insurance Company has caused this policy to be executed this 29th day of April, 1993. /s/ T. L. SPURLING /s/ ROBERT A. AIKEN - - ------------------------------ ------------------------- Assistant Secretary President FORM 40,000 2 INDEX This policy has been arranged to permit easy reference by the persons using it. It is divided into seven sections as follows: Section I -- BENEFITS Section II -- INDIVIDUALS Section III -- GENERAL PROVISIONS Section IV -- DEFINITIONS Section V -- POLICYHOLDER-EMPLOYER Section VI -- LINCOLN NATIONAL Section VII -- ADMINISTRATOR The policy follows a number-letter sequence. It is not necessary that this policy include all numbers or letters in complete sequence to be correct. The DEFINITIONS section may define terms which are not included in the policy. FORM 40,000-INDEX C 3 SECTION I * BENEFITS SCHEDULE OF BENEFITS MEDICAL REIMBURSEMENT BENEFITS Maximum Benefit is as shown in the participating Employer's Application and Adoption Agreement. Maximum Benefit is payable for an employee's family unit during a calendar year. Benefits Percentage ---------------------------------- 100% Benefit Period A Benefit Period with respect to an insured individual commences when the individual has been paid benefits by Lincoln National during a calendar year for eligible charges for treatment or prevention of illnesses. A Benefit Period with respect to an individual's illness terminates on the earliest of the following: 1. the last day of the calendar year in which it was established; 2. the day coverage provided herein terminates; or 3. the day the maximum benefit is paid. ELIGIBLE INDIVIDUALS The individuals eligible for insurance hereunder are those who are covered under an employer-sponsored group insurance plan or an individual health policy, herein called "the underlying plan," and are: 1. employees as designated by the Participating Employer(s) as indicated on the Employer Participation Agreement; or 2. dependents of those employees who are meeting the requirements of No 1. above. WAITING PERIOD There is no waiting period. CLASSIFICATION CHANGE DATE A change in an employee's benefits caused by a change in his classification will be effective on January 1, following the change in classification. OCCUPATIONAL AND NON-OCCUPATIONAL BENEFITS Benefits are issued on a non-occupational basis. FORM 40,001 4 MEDICAL REIMBURSEMENT BENEFITS If an insured individual incurs eligible charges during a Benefit Period established with respect to the individual's family unit, Medical Reimbursement Benefits are payable. I. Benefit Period A Benefit Period with respect to an insured individual commences and terminates as shown on the Schedule of Benefits. II. Determination of Benefit Benefits payable are equal to A. the Benefits Percentage shown on the Schedule of Benefits, multiplied by B. the total eligible charges payable by Lincoln National during the Benefit Period. III. Maximum Benefit The total Medical Reimbursement Benefits payable for an individual's illnesses will not exceed the individual's Maximum Benefit, even though the individual may not have been continuously insured. IV. Eligible Charges are charges that are not covered under any other group insurance plan, individual health policy, and/or Medicare and which are for one of the following: A. Room and board and routine nursing services for each day of confinement in a hospital B. Room and board for each day of confinement in a skilled nursing facility C. Intensive nursing care for each day of confinement in a hospital D. Medical services and supplies furnished by the hospital E. Anesthetics and their administration F. Medical treatment or prevention of illness (including but not limited to surgical operations) rendered by and in the physical presence of a legally qualified physician G. Charges for the diagnosis of Infertility H. Charges for the treatment of Infertility (only to the extent that such charges are payable by the underlying plan) I. Services provided by 1. a registered nurse (R.N.) for private duty nursing services 2. a licensed practical nurse (L.P.N.) for private duty nursing services or 3. a licensed physiotherapist J. X-ray examination (other than dental), microscopic and laboratory tests and other diagnostic services K. X-ray and radiation therapy L. Transportation within the United States and Canada of the individual by professional ambulance service, railroad or regularly scheduled airline to a hospital or sanitarium M. Medical supplies, as follows: 1. Drugs and medicines that are prescribed by a physician 2. Blood and other fluids to be injected into the circulatory system 3. Artificial limbs and eyes for loss of natural limbs and eyes 4. Casts, splints, trusses, braces, crutches and surgical dressings FORM 40,001-1 5 5. Rental of hospital-type equipment, including wheelchair, hospital bed, iron lung and other mechanical equipment for the treatment of respiratory paralysis and equipment for the administration of oxygen 6. Purchase or rental of hospital-type equipment for kidney dialysis for the personal and exclusive use of the patient, the total price to be eligible on a monthly pro-rata basis during the first 24 months of ownership, but only so long as dialysis treatment continues to be medically required. Lincoln National also will consider as eligible all charges for supplies, materials and repairs necessary for the proper operation of such equipment and also reasonable and necessary expenses for the training of a person to operate and maintain the equipment for the sole benefit of the patient, EXCEPT THAT: No benefits are payable for an individual on or after the day such individual is entitled to benefits under Medicare. N. Services provided by a legally qualified physician or qualified speech therapist for restoratory or rehabilitory speech therapy for speech loss or impairment due to an illness, or to surgery on account of an illness O. Dental Benefits 1. Payment will be made up to the Maximum Benefit for one or more of the following charges: a. Dental care performed by or under the direct supervision of a legally qualified dentist b. Dental X-ray examinations c. Cosmetic dental procedures performed as a result of an accident d. Space maintainers for deciduous teeth e. Orthodontics f. Medications prescribed or ordered by a dentist g. Oral examinations and/or prophylaxis h. Denture adjustment or relinings i. Payment will be made for the following: i. Dentures or fixed bridgework ii. Addition of one or more teeth to dentures or fixed bridgework iii. Crowns or gold restorations involving dentures or fixed bridgework j. Replacement of any lost or stolen dental appliance 2. Exclusions No Dental Benefits will be paid for the following charges: a. Any dental procedure (other than Orthodontia Treatment for which charges are billed on a monthly basis) not initiated and completed while insured b. Dental appointments which are not kept c. Teeth bleaching and other cosmetic dental procedures P. Hearing Aid Benefits 1. Eligible charges for audio examinations and/or audio supplies, will be payable according to the Maximum Benefit and Benefit Percentage as shown on the Schedule of Benefits for the following: a. Otologic examination by a physician b. Hearing evaluation by a qualified audiologist, if such evaluation is recommended on the basis of the otologic examination. The hearing evaluation will include: i. Audiometric testing, including testing of hearing acuity with respect to air conduction, bone conduction, speech reception and discrimination of speech, and ii. A hearing aid evaluation to determine and recommend the type of hearing aid necessary to improve the insured hearing acuity FORM 40,001-2 6 c. Follow-up consultation with the audiologist d. A hearing aid (monaural or binaural) as prescribed by a qualified audiologist e. Ear molds, batteries, cord and ancillary equipment in connection with the hearing aid 2. Exclusions No Hearing Aid Benefits will be paid for: a. Hearing aids not prescribed as a result of an otologic examination by a qualified physician b. Hearing evaluation not prescribed as a result of an otologic examination by a legally qualified physician c. Medical or surgical treatment of the ear d. Any services or supplies to the extent that benefits are payable for such under any other provisions of the policy e. Drugs or medication The term "qualified audiologist" means an audiologist who has a masters degree in speech pathology, possesses a Certificate of Clinical Competence in audiology from The American Speech and Hearing Association and is licensed to perform audiometric examinations in the state in which the testing is performed, if such licensing is required. Q. Vision Benefits Eligible charges for vision examination and materials up to the Maximum Benefit and Benefits Percentage as shown on the Schedule of Benefits for the following: Complete visual analysis, including case history and refraction (payable only when an eye refraction is performed). Lens (single-vision, bi-focal, tri-focal, lenticular, contact) and frames. FORM 40,001-3 7 SECTION II * INDIVIDUALS I. ELIGIBLE INDIVIDUALS The individuals eligible for insurance hereunder are shown on the Schedule of Benefits. II INSURANCE BENEFITS The Insurance Benefits provided under the policy for an insured individual will be in accordance with the provisions of this policy and the individual insured's insurance classification, as shown, in the Employer's Application and Adoption Agreement. If more than one insurance classification is designated, any change in the amount of an individual's insurance, occasioned by change in an employee's classification, is effective on the Classification Change Date shown on the Schedule of Benefits. III. EFFECTIVE DATES OF INSURANCE An individual's insurance hereunder will be effective as follows: A. EMPLOYEES An employee's insurance will become effective automatically on the date he or she becomes eligible. B. DEPENDENTS 1. An employee's insurance with respect to his or her dependent(s) will become effective automatically with respect to each dependent on the date such dependent of the employee becomes an eligible individual hereunder and while the employee qualifies as an individual eligible for insurance as shown on the Schedule of Benefits. 2. A dependent will become an insured individual automatically if the employee is insured for dependents' insurance on the date such person becomes a dependent. C. EMPLOYEES AND DEPENDENTS 1. If a person does not qualify as an eligible individual because, a. in the case of an employee, he or she is not actively expanding time and energy in the employ of the Employer on the date the individual would otherwise become insured, the individual will not become insured until the next following date on which he or she is actively expending time and energy in the employ of the Participating Employer(s); or b. in the case of dependent, i. the employee does not qualify because of a. above or ii. the dependent is confined in a hospital, such dependent will not become insured until the next following day on which both the employee is actively expending time and energy in the employ of the Employer and the dependent is no longer confined in a hospital. FORM 40,002 8 IV. NOTICE AND PROOF OF CLAIM AND EXAMINATION A. NOTICE--30 DAYS 1. Written notice of each injury or illness for which benefits may be claimed must be given to Lincoln National within thirty (30) days of the date any expense is incurred. 2. Failure to furnish notice within thirty (30) days will not invalidate or reduce any claim if it is shown that notice was provided as soon as was reasonably possible. 3. Lincoln National, upon receipt of such notice, will furnish its form(s) for filing proof of claim to the employee. If such forms are not furnished within fifteen (15) days after Lincoln National's receipt of notice, the individual insured will be deemed to have complied with the requirements of the policy as to proof of claim upon submitting, within the time fixed in the policy for filing proofs of claim, written proof concerning the occurrence, character and extent of the loss for which claim is made. B. PROOF--90 DAYS 1. Affirmative proof of claim on account of hospital confinement for which claim is made must be furnished to Lincoln National within ninety (90) days after the termination of the period for which claim is made, and while this policy is in force. 2. Affirmative proof of any other claim must be furnished Lincoln National not later than ninety (90) days after the date of loss. 3. Failure to furnish proof of any claim within ninety (90) days will not invalidate or reduce any claim if it is shown that proof was provided as soon as was reasonably possible and while this policy is in force. C. PAYMENT OF CLAIM All benefits are payable to the employee. If any such benefits remain unpaid at the death of the employee, or if the employee is a minor or is, in the opinion of Lincoln National, incapable of giving a legally binding receipt for payment of any benefit, Lincoln National may, at its option, pay such benefit to any one or more of the following relatives of the employee: spouse, parent(s), child(ren), brother(s), or sister(s). Any payments so made by Lincoln National will completely discharge its obligation to the extent of such payment. Lincoln National will not be responsible as to the application of such payment. D. EXAMINATION 1. Lincoln National will have the right and opportunity at its own expense to examine the person of any individual whose injury or illness is the basis of a claim hereunder when and so often as it may reasonably require during pendency of such claim. 2. Lincoln National will have the right and opportunity to make an autopsy where not prohibited by law. V. CHOICE OF PHYSICIAN The individual insured will have free choice of any legally qualified physician. FORM 40,002-1 9 VI. WORKER'S COMPENSATION This policy is not in lieu of, and does not affect, any requirement for coverage by worker's compensation insurance. VII. LEGAL PROCEEDINGS No action at law or in equity will be brought to recover on this policy before the expiration of sixty (60) days after proof of claim has been filed in accordance with the requirements of this policy. No such action will be brought at any time unless brought within the time allowed by the laws of the Situs of Delivery. If the laws of the Situs of Delivery do not designate the maximum length of time during which such action may be brought, no action may be brought after the expiration of two (2) years of the time within which proof of loss is required by the policy. VIII.STATEMENTS In the absence of fraud, all statements made by an insured employee and his or her dependents will be deemed representations and not warranties. No such representations will void the insurance or be used in defense to a claim hereunder unless a copy of the instrument containing such representation is or has been furnished to such employee or to his beneficiary, if any. IX. TERMINATION OF INDIVIDUAL'S INSURANCE An individual's insurance will automatically terminate immediately upon the earliest of the following dates: A. The date the policy terminates B. The date the individual's Participating Employer(s) ceases to participate under the policy or C. The day the individual is no longer insured under his or her employer-sponsored group health insurance plan or individual policy. FORM 40,002-2 10 SECTION III -- GENERAL POLICY PROVISIONS I. BENEFIT EXCLUSIONS AND LIMITATIONS A. Non-occupational Coverage No benefits are provided as a result of 1. any accidental bodily injury that arises out of or in the course of any employment with any Participating Employer(s) and/or for which the individual is entitled to benefits under any worker's compensation law or occupational disease law, or receives any settlement from a worker's compensation carrier; or 2. any illness in which the individual is entitled to benefits under any worker's compensation or occupational disease law, or receives any settlement from a worker's compensation carrier. B. War No benefits are provided for losses that are due to war or any action of war, whether declared or undeclared. C. Individual Must Be Under the Direct Care of a Physician No benefits are payable unless the individual is under the direct care of a legally qualified physician. D. Legal Obligation Insurance is provided only in connection with charges for treatment for which the individual is, in the absence of this insurance, legally obligated to pay. E. Necessary, Reasonable and Customary Insurance is provided only for 1. charges for treatment, equipment or supplies that are necessary to the treatment or prevention of illness, are medically cost efficient and incurred on the recommendation of a legally qualified physician, and 2. charges that are not in excess of the regular and customary charges for the services performed and the materials furnished. No benefits are provided unless the individual is under the direct care of a legally qualified physician. F. The following charges are specifically excluded from coverage: 1. All charges for which benefits are not specifically provided hereunder 2. Charges for any cosmetic treatment or surgery. However, we will pay for cosmetic treatment or surgery that is due solely to any of the following: FORM 40,003 11 a. An accidental bodily injury b. The surgical removal or reconstruction of all or part of the breast tissue as a result of an illness c. A birth defect 3. Charges for hospitalization, services, treatments or supplies furnished by the United States or a foreign governmental agency unless otherwise prohibited by law 4. Charges for the treatment of infertility, if such charges are excluded by the underlying plan 5. Charges for medical treatment by a legally qualified physician for any treatment that is not rendered by or in the physical presence of the attending physician 6. Charges made by a hospital for confinement as a bed patient in a long term care unit, or for confinement in a skilled nursing facility, unless such confinement a. commences within fourteen (14) days after the sick or injured individual is discharged from hospital confinement, for which at least three consecutive days of hospital room and board charges were eligible charges hereunder, and b. is for treatment of the illness causing the hospital confinement mentioned in (a.) above, and c. is one during which professional calls are made by the physician or surgeon on and in the physical presence of such individual in a frequency of not less than one such call per thirty (30) consecutive days of such confinement, and d. does not primarily involve routine custodial type care 7. Insurance premiums of any kind 8. Weight Control Treatment. This exclusion applies but is not limited to all methods of treatment that seek to result in weight reduction or control, including but not limited to, dietary treatment or counseling, nutritional supplements, testing required with the use of low-calorie diets, gastric bypasses, gastric balloons, stomach stapling, wiring of the jaw and jejunal bypasses, unless the obesity is primarily responsible for a medical illness or condition that is life-threatening or causing total disability. 9. Non-prescription drugs. II. NON-FORFEITURE If the terms and conditions set forth in this policy are performed by the insured within the prescribed period, then the benefits which accrue under this policy will become payable. However, if any terms and conditions are not performed within the prescribed period, then the insured will forfeit his/her right to such benefits that may have arisen under this policy with respect to the loss not timely reported. III. DATE OF SERVICE OR PURCHASE The charge for service or purchase will be deemed to have been incurred on the date the service is performed or the date the purchase occurs. FORM 40,003-1 12 SECTION IV -- DEFINITIONS For all purposes of this policy: 1. "Administrator" means HRM Claim Management, Inc. 2. "Medical Reimbursement Insurance" means only coverages provided herein. 3. "Certificate" means a written statement, including all riders and supplements, if any, setting forth the insurance benefits to which the insured individual is entitled, to whom the benefits are payable and any limitations or requirements applicable to the insured individual. Such certificates will not constitute a part of this policy. 4. "Cosmetic surgery" means the surgical alteration of tissue for the improvement of the insured individual's appearance rather than improvement or restoration of bodily function. 5. "Dependent" -- See Definition No. 22. 6. "Employee" means a person a. directly employed in the regular business of and compensated for services by the Participating Employer(s) and b. who actively expends time and energy in the service of the Participating Employer(s). No director or officer of a corporate employer will be considered as being an employee unless such person is otherwise eligible as a bona fide employee of the corporation by performing services other than the usual duties of a director. No individual proprietor or partner will be considered as being an employee unless he/she is actively engaged in and devotes time and energy to the conduct of the business of the proprietorship or partnership. Notwithstanding 6.b., a person will be deemed actively expending time and energy in the service of the Participating Employer(s) on each day of a regular paid vacation and on a regular non-working day on which he/she is not disabled, provided he/she was actively expending time and energy in the service of the Participating Employer(s) on the last preceding regular working day. Any person performing services of a recognized profession, including but not limited to an attorney-at-law and an accountant, who is remunerated on a basis other than regular wage or salary by the Participating Employer(s), will not be considered an employee for the purposes of the definition. 7. "Family unit" means an insured employee and, if they are insured persons, his/her children, if any, and his/her spouse. 8. "Herein", "hereof", "hereunder" and "hereinafter" refer to the policy in its entirety. 9. "Hospital" means an institution that a. is licensed as a hospital (if hospital licensing is required where it is situated), FORM 40,004 13 b. is open at all times, c. is operated primarily for the medical treatment of sick and/or injured persons as patients, d. has a staff of one or more licensed physicians available at all times, e. provides continuous 24-hour nursing service by graduate registered nurses (R.N.), f. provides organized facilities for diagnosis and major surgery, and g. is not primarily a clinic, nursing home, rest home, convalescent home or similar establishment. 10. "Illness" means a bodily disorder or disease, mental infirmity, accidental bodily injury or pregnancy. All bodily injuries sustained by an individual in a single accident, or all illnesses that are due to the same or related cause or causes, will be deemed one illness. 11. "Individual" means a. an employee and/or b. a dependent with respect to whom an employee is or may become insured. 12. "Intensive care unit" means a section, ward or wing within the hospital that is separated from other hospital facilities and a. is operated exclusively for the purpose of providing professional medical treatment for critically ill patients, b. has special supplies and equipment necessary for such medical treatment available on a standby basis for immediate use, and c. provides constant observation and treatment by registered nurses (R.N.) or other highly trained hospital personnel. A hospital facility maintained for the purpose of providing normal post-operative recovery treatment or service is not considered an "intensive care unit". 13. "Lincoln National" means The Lincoln National Life Insurance Company. 14. "Medical Insurance" means any coverages provided herein under the individual's group medical insurance plan or individual health policy. 15. "Medicare" means the medical benefits provided by Title XVIII of the Social Security Act as amended from time to time. 16. "Month" means "calendar month," which, for the purposes hereof, will mean the time period from and including any date of any of the months in the calendar to, but not including, the corresponding date of the next month in the calendar; but if there be no corresponding date, then to and including the last day of the next month in the calendar. For example, June 15 through July 14 inclusive, or January 31 through February 28 inclusive. 17. "Policy" whenever used herein without qualification will mean this policy. 18. "Qualified speech therapist" means a speech therapist who has a master's degree in speech pathology, has completed a supervised internship and who is licensed by the state in which the services are performed, if that state requires licensing. FORM 40,004-1 14 19. "Reasonable and customary" means the usual charge made by the person, group or other entity rendering or furnishing the services, treatments or materials, but in no event meaning a charge in excess of the level of charges made by such persons, groups or other entities rendering or furnishing such services, treatment or material to persons of similar income or net worth. 20. "Room and board charges" are charges made by the hospital or skilled nursing facility for the cost of the room, meals and services (such as general nursing services) that are routinely provided to all inpatients. 21. "Skilled nursing facility" means an institution qualified as such under Medicare. 22. "Dependent" means a. an employee's spouse (unless such spouse is legally separated from the employee), or b. an employee's unmarried child (including a stepchild or legally adopted child) from live birth until the date the child attains 19 years of age; except that the term "dependent" includes an employee's unmarried child who has attained age 19 while i) the child is a) mentally or physically incapable of earning his/her own living, and proof of incapacity is submitted to Lincoln National within 31 days of the date insurance hereunder would have terminated due to age, b) actually dependent on the employee for a majority of his/her support, and c) insured hereunder on the date immediately preceding the day insurance otherwise would have been terminated due to age. ii) the child is registered in an accredited school as a full-time student as defined in the regulations of the school that he/she is attending. In no event, however, is such child eligible or insured hereunder on or after the date of attainment of age 25. To maintain the eligibility under b. above, due proof that the employee's child continues to qualify as an insured dependent must be furnished to Lincoln National as it reasonably requires. Any spouse or child who is insured under the policy as an employee, or who is entitled to benefits under any extension of such insurance, is not a dependent. In the event that a husband and wife are both insured as employees herein, their dependents, if any, may be considered dependents of either the husband or the wife for purposes of this policy. FORM 40,004-2 15 SECTION V * POLICYHOLDER-EMPLOYER A. EFFECT OF ACTIONS OF POLICYHOLDER The Policyholder may act for and on behalf of the Participating Employer(s) in all matters pertaining to this policy. Every agreement made with the Policyholder will be binding on such Policyholder and the Participating Employer(s). B. RECORD OF EMPLOYEES INSURED 1. The Participating Employer(s) will furnish periodically to Lincoln National information relative to individuals a. who qualify to become insured, b. whose amounts of insurance change, and/or c. whose insurance terminates all as Lincoln National may require for its administration of the insurance hereunder. Such of the Participating Employer(s) and/or Policyholder's records which, in the opinion of Lincoln National, have a bearing on the insurance hereunder will be opened for inspection by Lincoln National at any reasonable time upon a timely and reasonable request. 2. Inadvertent error or omission on the part of the Participating Employer(s) to report the name of any individual who is qualified as an insured individual in accordance with the prescribed requirements, or whose amount of insurance is to be changed in accordance with provisions hereunder, will not deprive such employee of insurance nor affect its amount; nor will the Participating Employer's failure to report the name of any employee whose insurance has terminated or reduced be construed as involving or affecting continuation of such insurance beyond the date of termination determined in accordance with the provisions hereof. C. PAYMENT OF PREMIUMS 1. All premiums due under this policy, including adjustments thereof, if any, are payable by the Participating Employer(s) on or before their respective due dates, as specified on the first page of this policy, at the Home Office of Lincoln National in Fort Wayne, Indiana. The payment of any Renewal Premium will not maintain in force the insurance provided under this policy beyond the day immediately preceding the next Renewal Premium due date. 2. If the Participating Employer(s) fails to pay any renewal Premium, the Participating Employer(s) participation under the policy will automatically terminate at midnight of the last day for which premium has been paid. D. PREMIUM ADJUSTMENT Premium adjustment, for whatever reason made, involving a return of unearned premium to FORM 40,005 16 SECTION VI * LINCOLN NATIONAL A. COMPUTATION OF PREMIUMS 1. The premium rates used in computing the premiums due under this policy will be the published premium rates of Lincoln National adjusted to reflect the underwriting risk as determined by Lincoln National. Lincoln National may, however, establish a new rate for the computation of all future premiums as well as the one then due a. on any Policy Anniversary, b. on any premium due date provided that Lincoln National notifies the Policyholder of such change at least 31 days in advance of such premium due date, or c. when the terms of this policy are changed. However, the premium rates may not be changed in accordance with b. above within the first twelve (12) months following the Date of Issue. 2. Notwithstanding the above, premiums may be computed by any method mutually agreeable to Lincoln National and the Policyholder which will produce approximately the same total amount. B. NONPARTICIPATING-PREMIUM REFUNDS This policy does not share in the surplus earnings of Lincoln National. C. AMENDMENT AND ALTERATION OF CONTRACT 1. This policy may be amended or altered at any time by written agreement between the Policyholder and Lincoln National, without the consent of the insured employees or their beneficiaries, if any. 2. Only the President, a Vice President, the Secretary or an Assistant Secretary of Lincoln National has the authority to amend, alter, waive or change in any manner the provisions of this policy. Such amendment, authorization, waiver or change must be in writing and signed by one of the above stated officers. 3. Lincoln National will not be bound by any promise or representation heretofore or hereafter made by or to any agent or person other than as authorized in 2. above. D. TERMINATION OF POLICY Lincoln National may terminate this policy on any premium due date by giving written notice to the Policyholder at least 31 days in advance of the date of termination. FORM 40,006 17 E. EMPLOYEE'S CERTIFICATE Lincoln National will issue to the Participating Employer(s) for delivery to each insured employee an individual certificate stating a. the coverage provided, b. to whom benefits are payable, and c. limitations or requirements of this policy that may apply to the insured individual. The certificates will not constitute a part of this policy. FORM 40,006-1 18 SECTION VII * ADMINISTRATOR A. RECORDS 1. The Administrator will maintain a record which will show at all times a. the names of all employees insured hereunder, b. the date when each employee became insured, c. the effective date of any increase or decrease in the amount of each employee's insurance, and d. such other information as may be required to administer the insurance hereunder. FORM 40,007 EX-10.17 11 TERM LOAN AGREEMENT DATED FEBRUARY 7, 1997 1 ending on the last day of such fiscal quarter, considered as a single accounting period, is less than 4.00 and greater than or equal to 3.00. LEVEL III PERFORMANCE MARGINS:
Interest Rate Option Applicable Margin -------------------- ----------------- Base Rate Option Zero Euro-Rate Option 0.625%
Level III Performance Margins shall apply in the event that Financial Test III is satisfied and the other conditions set forth above are met. "Financial Test III" means that, as of the end of the relevant fiscal quarter, the Consolidated Funded Debt Ratio (Adjusted) for the period of four consecutive fiscal quarters ending on the last day of such fiscal quarter, considered as a single accounting period, is less than 3.00 and greater than or equal to 2.50. LEVEL IV PERFORMANCE MARGINS:
Interest Rate Option Applicable Margin -------------------- ----------------- Base Rate Option Zero Euro-Rate Option 0.50%
Level IV Performance Margins shall apply in the event that Financial Test IV is satisfied and the other conditions set forth above are met. "Financial Test IV" means that, as of the end of the relevant fiscal quarter, the Consolidated Funded Debt Ratio (Adjusted) for the period of four consecutive fiscal quarters ending on the last day of such fiscal quarter, considered as a single accounting period, is less than 2.50. (c) FUNDING PERIODS. At any time when the Borrower shall select, convert to or renew the Euro-Rate Option to apply to any part of the Loans, the Borrower shall specify one or more periods (the "Funding Periods") during which each such Option shall apply, such Funding Periods being as set forth below:
Interest Rate Option Available Funding Periods - - -------------------- ------------------------- Euro-Rate Option One, two, three or six months ("Euro-Rate Funding Period");
provided, that: (i) Each Euro-Rate Funding Period shall begin on a London Business Day, and the term "month," when used in connection with a Euro-Rate Funding Period, shall be construed in accordance with prevailing practices in the interbank eurodollar market at the commencement of such Euro-Rate Funding Period, as determined in good faith by the Agent (which determination shall be conclusive); -5- 2 (ii) The Borrower may not select a Funding Period that would end after the Revolving Credit Maturity Date; and (iii) The aggregate number of Funding Segments of the Euro-Rate Portion of the Revolving Credit Loans at any time shall not exceed six. (d) TRANSACTIONAL AMOUNTS. Subject to Section 3.09 hereof as to Swingline Loans, each selection of, conversion from, conversion to or renewal of an interest rate Option and each payment or prepayment of any Loans (other than mandatory prepayments to the extent set forth in Section 2.05(c) hereof) shall be in a principal amount such that after giving effect thereto the aggregate principal amount of the Base Rate Portion of the Revolving Credit Loans, and the aggregate principal amount of each Funding Segment of the Euro-Rate Portion of the Revolving Credit Loans, shall be as set forth below:
Portion or Funding Segment Allowable Aggregate Principal Amounts - - -------------------------- ------------------------------------- Base Rate Portion Any Each Funding Segment $500,000 or an integral of the Euro-Rate Portion multiple thereof
(e) EURO-RATE UNASCERTAINABLE; IMPRACTICABILITY. If (i) on any date on which a Euro-Rate would otherwise be set the Agent (in the case of clauses (A) or (B) below) or any Lender (in the case of clause (C) below) shall have determined in good faith (which determination shall be conclusive) that: (A) adequate and reasonable means do not exist for ascertaining such Euro-Rate, (B) a contingency has occurred which materially and adversely affects the interbank eurodollar market, or (C) the effective cost to such Lender of funding a proposed Funding Segment of the Euro-Rate Portion from a Corresponding Source of Funds shall exceed the Euro-Rate applicable to such Funding Segment, or (ii) at any time any Lender shall have determined in good faith (which determination shall be conclusive) that the making, maintenance or funding of any part of the Euro-Rate Portion has been made impracticable or unlawful by compliance by such Lender or a Notional Euro-Rate Funding Office in good faith with any Law or guideline or interpretation or administration thereof by any Governmental Authority charged with the interpretation or administration thereof or with any request or directive of any such Governmental Authority (whether or not having the force of law); then, and in any such event, the Agent or such Lender, as the case may be, may notify the Borrower of such determination (and any Lender giving such notice shall notify the Agent). Upon such date as shall be specified in such notice (which shall not be earlier than the date such notice is given), the obligation -6- 3 of each of the Lenders to allow the Borrower to select, convert to or renew the Euro-Rate Option shall be suspended until the Agent or such Lender, as the case may be, shall have later notified the Borrower (and any Lender giving such notice shall notify the Agent) of the Agent's or such Lender's determination in good faith (which determination shall be conclusive) that the circumstance giving rise to such previous determination no longer exist. If any Lender notifies the Borrower of a determination under clause (ii) of this Section 2.03(e), the Euro-Rate Portion of the Loans of such Lender (the "Affected Lender") shall automatically be converted to the Base Rate Option as of the date specified in such notice (and accrued interest thereon shall be due and payable on such date). If at the time the Agent or a Lender makes a determination under clause (i) or (ii) of this Section 2.03(e) the Borrower previously has notified the Agent that it wishes to select, convert to or renew the Euro-Rate Option with respect to any proposed Loans but such Loans have not yet been made, such notification shall be deemed to provide for selection of, conversion to or renewal of the Base Rate Option instead of the Euro-Rate Option with respect to such Loans or, in the case of a determination by a Lender, such Loans of such Lender. 2.04. CONVERSION OR RENEWAL OF INTEREST RATE OPTIONS. (a) CONVERSION OR RENEWAL. Subject to Section 3.09 hereof as to Swingline Loans, and subject to the provisions of Section 2.10(b) hereof, the Borrower may convert any part of its Loans from any interest rate Option or Options to one or more different interest rate Options and may renew the Euro-Rate Option as to any Funding Segment of the Euro-Rate Portion: (i) At any time with respect to conversion from the Base Rate Option; or (ii) At the expiration of any Funding Period with respect to conversions from or renewals of the Euro-Rate Option, as to the Funding Segment corresponding to such expiring Funding Period. Whenever the Borrower desires to convert or renew any interest rate Option or Options, the Borrower shall provide to the Agent Standard Notice setting forth the following information: (w) The date, which shall be a Business Day, on which the proposed conversion or renewal is to be made; (x) The principal amounts selected in accordance with Section 2.03(d) hereof of the Base Rate Portion and each Funding Segment of the Euro-Rate Portion to be converted from or renewed; (y) The interest rate Option or Options selected in accordance with Section 2.03(a) hereof and the principal amounts selected in accordance with Section 2.03(d) hereof of the Base Rate Portion and each Funding Segment of the Euro-Rate Portion to be converted to; and (z) With respect to each Funding Segment to be converted to or renewed, the Funding Period selected in accordance with Section 2.03(c) hereof to apply to such Funding Segment. Standard Notice having been so provided, after the date specified in such Standard Notice, interest shall be calculated upon the principal amount of the Loans as so converted or renewed. Interest on the -7- 4 principal amount of any part of the Loans converted or renewed (automatically or otherwise) shall be due and payable on the conversion or renewal date. (b) FAILURE TO CONVERT OR RENEW. Absent due notice from the Borrower of conversion or renewal in the circumstances described in Section 2.04(a)(ii) hereof, any part of the Euro-Rate Portion for which such notice is not received shall be converted automatically to the Base Rate Option on the last day of the expiring Funding Period. 2.05. PREPAYMENTS GENERALLY. Subject to Section 3.09 hereof as to Swingline Loans, whenever the Borrower desires or is required to prepay any part of the Loans, it shall provide Standard Notice to the Agent setting forth the following information: (a) The date, which shall be a Business Day, on which the proposed prepayment is to be made; (b) The total principal amount of such prepayment, which shall be the sum of the principal amounts selected pursuant to clause (c) of this Section 2.05, and which, if a partial prepayment, shall be an integral multiple of $500,000 (or, in the case of a mandatory prepayment pursuant to Section 2.07(b) hereof, an integral multiple of $100,000); and (c) The principal amounts selected in accordance with Section 2.03(d) hereof of the Base Rate Portion and each part of each Funding Segment of the Euro-Rate Portion to be prepaid; provided, that in the case of a mandatory prepayment under Section 2.07(b) hereof, any excess of the amount of such mandatory prepayment over the Base Rate Portion of the Revolving Credit Loans may be applied to the Euro-Rate Portion of the Revolving Credit Loans without regard to Section 2.03(d) hereof. Standard Notice having been so provided, on the date specified in such Standard Notice, the principal amounts of the Base Rate Portion and each part of the Euro-Rate Portion specified in such notice, together with interest on each such principal amount to such date, shall be due and payable. 2.06. OPTIONAL PREPAYMENTS. The Borrower shall have the right at its option from time to time to prepay its Loans in whole or part without premium or penalty (subject, however, to Section 2.10(b) hereof): (a) At any time with respect to any part of the Base Rate Portion; or (b) At the expiration of any Funding Period with respect to prepayment of the Euro- Rate Portion with respect to any part of the Funding Segment corresponding to such expiring Funding Period. Any such prepayment shall be made in accordance with Section 2.05 hereof. 2.07. MANDATORY PREPAYMENTS AND MANDATORY REDUCTIONS OF THE COMMITMENTS. -8- 5 (a) REVOLVING CREDIT COMMITTED AMOUNTS. Subject to Section 2.07(b)(ii) hereof, if at any time the aggregate Revolving Credit Exposures of the Lenders exceeds the aggregate Revolving Credit Committed Amounts, the Borrower shall prepay (and, to the extent required by Section 3.07 hereof, provide cash collateral with respect to) the Revolving Credit Exposures in an aggregate principal amount not less than the amount of such excess. Such amount shall be applied first to the principal amount of Swingline Loans, then to the principal amount of Revolving Credit Loans, then to outstanding Letter of Credit Unreimbursed Draws, and the balance shall be deposited into the Letter of Credit Collateral Account. Any such prepayments of the Swingline Loans and the Revolving Credit Loans shall be made in accordance with Section 2.05 hereof. (b) RECAPTURE ASSET DISPOSITIONS. (i) The Borrower shall be required from time to time to reduce the aggregate Revolving Credit Committed Amounts by an amount not less than the Recapture Asset Amount from each Recapture Asset Disposition. If a reduction in the aggregate Revolving Credit Committed Amounts is required under this Section 2.07(b), the Borrower shall give notice of such reduction in accordance with Section 2.01(f) hereof so that such reduction shall be effective not later than (x) in the case of a Recapture Asset Disposition of Type A, the date of receipt of the related Net Sale Proceeds by the Borrower or any of its Subsidiaries, and (y) in the case of a Recapture Asset Disposition of Type B (which is not also of Type A), the date on which an amount arising out of such Recapture Asset Disposition would (but for the requirement hereunder to reduce the Revolving Credit Committed Amounts and prepay the Revolving Credit Exposures, and any requirement under the Term Loan Agreement to prepay the Indebtedness outstanding thereunder) constitute "Excess Proceeds" under the Senior Note Indenture (taking into account the periods specified in the Senior Note Indenture which must elapse before amounts constitute "Excess Proceeds"). (ii) If, due to any reduction in the aggregate Revolving Credit Committed Amounts required by this Section 2.07(b), the aggregate Revolving Credit Exposures of the Lenders exceeds the aggregate Revolving Credit Committed Amounts, the Borrower shall prepay (and, to the extent required by Section 3.07 hereof, provide cash collateral with respect to) the Revolving Credit Exposures in an amount not less than the excess in accordance with Section 2.07(a) hereof, and the Borrower shall give notice of any such prepayment so that such prepayment shall be made not later than the effective date of such reduction; provided, that if and to the extent that a prepayment of a Funding Segment of the Euro- Rate Portion of the Loans otherwise would be required to be made on a day other than the last day of the corresponding Euro-Rate Funding Period, the Borrower may defer such prepayment until the last day of such Funding Segment. (iii) As used in this Agreement, the term "Recapture Asset Disposition" means (A) any disposition of any Shares of Capital Stock of TIMCO or of any of its assets outside the ordinary course of business (Recapture Asset Dispositions described in this clause (A) being sometimes referred to herein as being of "Type A"); and -9- 6 (B) any event or condition which would (but for the requirement hereunder to reduce the Revolving Credit Committed Amounts and prepay the Revolving Credit Exposures, and any requirement under the Term Loan Agreement to prepay the Indebtedness outstanding thereunder) give rise to any "Excess Proceeds" as defined in the Senior Note Indenture (taking into account the periods specified in the Senior Note Indenture which must elapse before amounts constitute "Excess Proceeds") (Recapture Asset Dispositions described in this clause (B) being sometimes referred to herein as being of "Type B"). The Borrower shall advise the Agent in writing promptly of each proposed, actual or anticipated Recapture Asset Disposition and of the material terms thereof and each scheduled date for the consummation or occurrence thereof promptly after the Borrower becomes aware of the same (but in any event not later than the date of such Recapture Asset Disposition). (iv) As used in this Agreement, the term "Recapture Asset Amount" has the following meaning: (A) With respect to any Recapture Asset Disposition of Type A, "Recapture Asset Amount" means the amount, if any, not less than zero, equal to (i) 50% of the Net Sale Proceeds from such Recapture Asset Disposition, minus (ii) the amount of Net Sale Proceeds from such Recapture Asset Disposition applied to reduction of the principal amount of outstanding Indebtedness under the Term Loan Agreement. (B) With respect to any Recapture Asset Disposition of Type B, "Recapture Asset Amount" means the amount with respect to such Recapture Asset Disposition which (but for the requirement hereunder to reduce the Revolving Credit Committed Amounts and prepay the Revolving Credit Exposures, and any requirement under the Term Loan Agreement to prepay the Indebtedness outstanding thereunder, it being understood that amounts shall first be applied as so required under the Term Loan Agreement before any application is required hereunder) would constitute "Excess Proceeds" as defined in the Senior Note Indenture (taking into account the periods specified in the Senior Note Indenture which must elapse before amounts constitute "Excess Proceeds"). If an event constitutes a Recapture Asset Disposition of both Type A and Type B, "Recapture Asset Amount" with respect to such event shall mean the greater of the amounts described in the foregoing clauses (A) or (B). (v) "Net Sale Proceeds" means, with respect to any Recapture Asset Disposition of Type A, the gross proceeds thereof in the form of cash or cash equivalents (including payments in respect of deferred payment obligations upon the earliest of (x) receipt of such payments in the form of cash or cash equivalents, (y) to the extent that such obligations are financed or sold without recourse to the Borrower or any Subsidiary, the time of such financing or sale, or (z) to the extent that such obligations are financed or sold with recourse to the Borrower or such Subsidiary the time that either the original obligation is discharged or such recourse is no longer in effect), net of the sum of the following (without duplication): (A) brokerage commissions and other fees and expenses (including, without limitation, fees and expenses of legal counsel and investment bankers) related to such Recapture Asset Disposition, (B) all taxes actually paid or estimated in good faith to be or become payable as a result of -10- 7 such Recapture Asset Disposition, (C) payments made to retire obligations (other than to the Borrower and its Subsidiaries) that are secured by the properties that are the subject of such Recapture Asset Disposition, (D) payments to holders (other than the Borrower and its Subsidiaries) of Shares of Capital Stock or other equity interests in Subsidiaries of the Borrower subject to such Recapture Asset Disposition, so long as such payments are made on a pro rata basis, consistent with the ownership of such interests, to the holders of such interests, and (E) appropriate amounts to be provided by the Borrower or any Subsidiary as a reserve required in accordance with generally accepted accounting principles in the United States, consistently applied, against any liabilities associated with such Recapture Asset Disposition and retained by the Borrower or any Subsidiary thereof after such Recapture Asset Disposition, including, without limitation, pension and other post-employment benefit liabilities, liabilities related to environmental matters and liabilities under any indemnification obligations associated with such Recapture Asset Disposition; provided, however, that if all or any portion of such reserve is no longer required, the amount in respect of such reserve shall immediately be deemed to constitute, and shall be applied as, Net Sale Proceeds. 2.08. INTEREST PAYMENT DATES. Accrued and unpaid interest on the Loans shall be due and payable on the following dates (and on such other dates as may be specified elsewhere in this Agreement and the other Loan Documents): (a) in the case of the Base Rate Portion, on each Regular Monthly Payment Date, and (b) in the case of each Funding Segment of the Euro-Rate Portion, on the last day of the corresponding Euro-Rate Funding Period and, if such Euro-Rate Funding Period is longer than three months, also on the last day of the third month during such Funding Period. After maturity of any part of the Loans (by acceleration or otherwise), interest on such part of the Loans shall be due and payable on demand. 2.09. PRO RATA TREATMENT; PAYMENTS GENERALLY. (a) PRO RATA TREATMENT. Each borrowing and each conversion or renewal of interest rate Options hereunder shall be made, and all payments made in respect of principal of and interest on Loans, Revolving Credit Commitment Fees and Letter of Credit Fees due from the Borrower hereunder or under the Notes shall be applied, Pro Rata from and to each Lender, except for (x) borrowings of, and payments in respect of principal and interest on, Swingline Loans, (y) payments of interest involving an Affected Lender as provided in Section 2.03(e) hereof, and (z) payments to a Lender subject to a withholding deduction under Section 2.11(c) hereof. The failure of any Lender to make a Loan shall not relieve any other Lender of its obligation to lend hereunder, but neither the Agent nor any Lender shall be responsible for the failure of any other Lender to make a Loan. (b) PAYMENTS GENERALLY. All payments and prepayments to be made by the Borrower in respect of principal, interest, fees, indemnities, expenses or other amounts due from the Borrower hereunder or under any other Loan Document shall be payable in Dollars at 1:00 p.m., Pittsburgh time, on the day when due without presentment, demand, protest or notice of any kind, all of which are hereby expressly waived, and an action therefor shall immediately accrue, without setoff, counterclaim, withholding or other deduction of any kind or nature (except for payments to a Lender subject to a withholding deduction under Section 2.11(c) hereof). Except for payments under Sections 2.10 or 10.06 hereof, such payments shall be made to the Agent at its Office in funds immediately available at such Office, and payments under Sections 2.10 or 10.06 hereof shall be made to the applicable Lender or Issuing Bank at such domestic account as it shall specify to the Borrower from time to time in funds -11- 8 immediately available at such account. Any payment received by the Agent or such Lender or Issuing Bank after 1:00 p.m., Pittsburgh time, on any day shall be deemed to have been received on the next succeeding Business Day. The Agent shall distribute to the Lenders or the Issuing Bank, as the case may be, all such payments received by the Agent for their respective accounts as promptly as practicable after receipt by the Agent. (c) INTEREST ON OVERDUE AMOUNTS. To the extent permitted by law, after there shall have become due (by acceleration or otherwise) principal, interest, fees, indemnity, expenses or any other amounts due from the Borrower hereunder or under any other Loan Document, such amounts shall bear interest for each day until paid (before and after judgment), payable on demand, at a rate per annum (in each case based on a year of 365 or 366 days, as the case may be, and actual days elapsed) which for each day shall be equal to the following: (i) In the case of any part of the Euro-Rate Portion of any Loans, (A) until the end of the applicable then-current Funding Period at a rate per annum 2.00% above the rate otherwise applicable to such part, and (B) thereafter in accordance with the following clause (ii); and (ii) In the case of any other amount due from the Borrower hereunder or under any Loan Document, 2.00% above the then-current Base Rate Option. To the extent permitted by law, interest accrued on any amount which has become due hereunder or under any Loan Document shall compound on a day-by-day basis, and hence shall be added daily to the overdue amount to which such interest relates. 2.10. ADDITIONAL COMPENSATION IN CERTAIN CIRCUMSTANCES. (a) INCREASED COSTS OR REDUCED RETURN RESULTING FROM TAXES, RESERVES, CAPITAL ADEQUACY REQUIREMENTS, EXPENSES, ETC. If any Law or guideline or interpretation or application thereof by any Governmental Authority charged with the interpretation or administration thereof or compliance with any request or directive of any Governmental Authority (whether or not having the force of law) now existing or hereafter adopted: (i) subjects any Lender Party or any Notional Euro-Rate Funding Office to any tax or changes the basis of taxation with respect to this Agreement, the Notes, the Loans, the Letters of Credit, the Letter of Credit Participating Interests or the Swingline Loan Participating Interests, or payments by the Borrower of principal, interest, fees or other amounts due from the Borrower hereunder or under the Notes (except for taxes on the overall net income or overall gross receipts of such Lender Party or such Notional Euro-Rate Funding Office imposed by the jurisdictions (federal, state and local) in which the Lender Party's principal office or Notional Euro-Rate Funding Office is located), (ii) imposes, modifies or deems applicable any reserve, special deposit, insurance assessment or any other requirement against credits or commitments to extend credit extended by, assets (funded or contingent) of, deposits with or for the account of, other acquisitions of funds by, such Lender Party or any Notional Euro-Rate Funding Office (other than requirements expressly included herein in the determination of the Euro-Rate hereunder), -12- 9 (iii) imposes, modifies or deems applicable any capital adequacy or similar requirement against assets (funded or contingent) of, or credits or commitments to extend credit extended by, any Lender Party or any Notional Euro-Rate Funding Office, or applicable to the obligations of any Lender Party or any Notional Euro-Rate Funding Office under this Agreement, or (iv) imposes upon any Lender Party or any Notional Euro-Rate Funding Office any other condition or expense with respect to this Agreement, the Notes or its making, maintenance or funding of any Loan, Letter of Credit, Letter of Credit Participating Interest or Swingline Loan Participating Interest, and the result of any of the foregoing is to increase the cost to, reduce the income receivable by, or impose any expense (including loss of margin) upon any Lender Party, any Notional Euro-Rate Funding Office or, in the case of clause (iii) hereof, any Person controlling a Lender Party, with respect to this Agreement, the Notes or the making, maintenance or funding of any Loan, Letter of Credit, Letter of Credit Participating Interest or Swingline Loan Participating Interest, (or, in the case of any capital adequacy or similar requirement, to have the effect of reducing the rate of return on such Lender Party's or controlling Person's capital, taking into consideration such Lender Party's or controlling Person's policies with respect to capital adequacy) by an amount which such Lender Party deems to be material (such Lender Party being deemed for this purpose to have made, maintained or funded each Funding Segment of the Euro-Rate Portion from a Corresponding Source of Funds), such Lender Party may from time to time notify the Borrower of the amount determined in good faith by such Lender Party (which determination shall be conclusive) to be necessary to compensate such Lender Party or such Notional Euro-Rate Funding Office for such increase, reduction or imposition. In making any such determination such Lender Party may take into account any special, supplemental or other nonrecurring items, may apply any averaging or attribution methods, and may make such determination prospectively or retrospectively. Such amount shall be due and payable by the Borrower to such Lender Party five Business Days after such notice is given, together with an amount equal to interest on such amount from the date two Business Days after the date demanded until such due date at the Base Rate Option. The Borrower shall not be required to make any payment in respect of clause (a)(i) above to a Lender to the extent that such payment is attributable to a breach by such Lender of its obligations under Section 2.11(c) below. (b) FUNDING BREAKAGE. In the event that for any reason (i) the Borrower fails to borrow, convert or renew any part of any Loan hereunder which would, after such borrowing, conversion or renewal, have a Euro-Rate Portion, after notice requesting such borrowing, conversion or renewal has been given by the Borrower (whether such failure results from failure to satisfy applicable conditions to such borrowing, conversion or renewal or otherwise), or (ii) any part of any Funding Segment of any Euro-Rate Portion becomes due (by acceleration or otherwise), or is paid, prepaid or converted to another interest rate Option (whether or not such payment, prepayment or conversion is mandatory or automatic and whether or not such payment or prepayment is then due), on a day other than the last day of the corresponding Funding Period, the Borrower shall indemnify each Lender on demand against any loss, liability, cost or expense of any kind or nature which such Lender may sustain or incur in connection with or as a result of such event. Such indemnification in any event shall include an amount equal to the excess, if any, of (x) the aggregate amount of interest which would have accrued -13- 10 on the amount of the Euro-Rate Portion not so borrowed, converted or renewed, or which so becomes due, or which is so paid, prepaid or converted, as the case may be, from and including the date on which such borrowing, conversion or renewal would have been made pursuant to such notice, or on which such part of such Funding Segment so becomes due, or on which such part of such Funding Segment is so paid, prepaid or converted, as the case may be, to the last day of the Funding Period applicable to such amount (or, in the case of a failure to borrow, convert or renew, the Funding Period that would have been applicable to such amount but for such failure), in each case at the applicable rate of interest for such Euro-Rate Portion provided for herein (excluding, however, the Applicable Margin included therein, if any), over (y) the aggregate amount of interest (as determined in good faith by such Lender) which would have accrued to such Lender on such amount for such period by placing such amount on deposit for such period with leading banks in the interbank market. A certificate by the Lender as to any amount that such Lender is entitled to receive pursuant to this Section 2.10(b) shall be conclusive if made in good faith. 2.11. TAXES. (a) PAYMENT NET OF TAXES. All payments made by the Borrower under this Agreement or any other Loan Document shall be made free and clear of, and without reduction or withholding for or on account of, any present or future income, stamp or other taxes, levies, imposts, duties, charges, fees, deductions or withholdings, now or hereafter imposed, levied, collected, withheld or assessed by any Governmental Authority, and all liabilities with respect thereto, excluding (i) in the case of each Lender Party, income or franchise taxes imposed on such Lender Party by the jurisdiction under the laws of which such Lender Party is organized or any political subdivision or taxing authority thereof or therein or as a result of a connection between such Lender Party and any jurisdiction other than a connection resulting solely from this Agreement and the transactions contemplated hereby, and (ii) in the case of each Lender, income or franchise taxes imposed by any jurisdiction in which such Lender's lending offices which make or book Loans are located or any political subdivision or taxing authority thereof or therein (all such non-excluded taxes, levies, imposts, deductions, charges or withholdings being hereinafter called "Taxes"). If any Taxes are required to be withheld or deducted from any amounts payable to any Lender Party under this Agreement or any other Loan Document, the Borrower shall pay the relevant amount of such Taxes and the amounts so payable to such Lender Party shall be increased to the extent necessary to yield to such Lender Party (after payment of all Taxes) interest or any such other amounts payable hereunder at the rates or in the amounts specified in this Agreement and the other Loan Documents. Whenever any Taxes are paid by the Borrower with respect to payments made in connection with this Agreement or any other Loan Document, as promptly as possible thereafter, the Borrower shall send to the Agent for its own account or for the account of such Lender Party, as the case may be, a certified copy of an original official receipt received by the Borrower showing payment thereof. (b) INDEMNITY. The Borrower hereby indemnifies each Lender Party for the full amount of all Taxes attributable to payments by or on behalf of the Borrower to such Lender Party hereunder or -14- 11 under any of the other Loan Documents, any Taxes paid by such Lender Party, and any present or future claims, liabilities or losses with respect to or resulting from any omission to pay or delay in paying any Taxes (including any incremental Taxes, interest or penalties that may become payable by such Lender Party as a result of any failure to pay such Taxes). Such indemnification shall be made within five Business Days from the date such Lender Party makes written demand therefor. The Borrower shall not be required to make any payment under this Section 2.11(b) to a Lender to the extent that such payment is attributable to a breach by such Lender of its obligations under Section 2.11(c) below. (c) WITHHOLDING. Each Lender that is incorporated or organized under the laws of any jurisdiction other than the United States or any state thereof agrees that, on or prior to the date it becomes party to this Agreement, it will furnish to the Borrower and the Agent two valid, duly completed copies of United States Internal Revenue Service Form 4224 or United States Internal Revenue Service Form 1001 or successor applicable form, as the case may be, certifying in each case that such Lender is entitled to receive payments under this Agreement and the other Loan Documents without deduction or withholding of any United States federal income taxes. Each Lender which so delivers to the Borrower and the Agent a Form 1001 or 4224, or a successor applicable form, agrees to deliver to the Borrower and the Agent two further copies of the said Form 1001 or 4224 or a successor applicable form, or other manner of certification, as the case may be, on or before the date that any such form expires or becomes obsolete or otherwise is required to be resubmitted as a condition to obtaining an exemption from withholding tax, or after the occurrence of any event requiring a change in the most recent form previously delivered by it, and such extensions or renewals thereof as may reasonably be requested by the Borrower or the Agent, certifying in the case of a Form 1001 or Form 4224 that such Lender is entitled to receive payments under this Agreement or any other Loan Document without deduction or withholding of any United States federal income taxes, unless in any such cases an event (including any changes in law) has occurred prior to the date on which any such delivery would otherwise be required which renders all such forms inapplicable or which would prevent such Lender from duly completing and delivering any such letter or form with respect to it and such Lender advises the Borrower and the Agent that it is not capable of receiving payments without any deduction or withholding of United States federal income tax. In addition, if at any time the Borrower believes that payments to any Lender (foreign or domestic) may be subject to U.S. backup withholding tax, such Lender shall, at the Borrower's reasonable request from time to time, if such Lender is legally able to do so, provide the Borrower with evidence establishing an exemption from U.S. backup withholding tax. (d) CREDITS. If any payment by the Borrower is made to or for the account of the Lender Party after deduction for or on account of any Taxes, and increased payments are made by the Borrower pursuant to Section 2.11(a), then, if such Lender Party in its reasonable opinion determines that it has received or been granted a credit against or remission for such Taxes, such Lender Party shall, to the extent it can do so without prejudice to the retention of the amount of such credit or remission, reimburse to the Borrower such amount as such Lender Party shall, in its reasonable opinion acting in good faith, have determined to be attributable to the relevant Taxes or deduction or withholding. Any payment made by a Lender Party under this Section 2.11(d) shall be prima facie evidence of the amount due to the Borrower hereunder. Nothing herein contained shall interfere with the right of any Lender Party to arrange its tax affairs in whatever manner it thinks fit and, in particular, no Lender Party shall be under any obligation to claim relief from its corporate profits or similar tax liability in respect of such tax in priority to any other claims, reliefs, credits or deductions available to it nor oblige any Lender Party to disclose any information relating to its tax affairs or any computations in respect thereof. -15- 12 2.12. FUNDING BY BRANCH, SUBSIDIARY OR AFFILIATE. (a) NOTIONAL FUNDING. Each Lender shall have the right from time to time, prospectively or retrospectively, without notice to the Borrower, to deem any branch, subsidiary or affiliate of such Lender to have made, maintained or funded any part of the Euro-Rate Portion at any time. Any branch, subsidiary or affiliate so deemed shall be known as a "Notional Euro-Rate Funding Office." Such Lender shall deem any part of the Euro-Rate Portion of the Loans or the funding therefor to have been transferred to a different Notional Euro-Rate Funding Office if such transfer would avoid or cure an event or condition described in Section 2.03(e)(ii) hereof or would lessen compensation payable by the Borrower under Section 2.10(a) hereof, and if such Lender determines in its sole discretion that such transfer would be practicable and would not have a material adverse effect on such part of the Loans, such Lender or any Notional Euro-Rate Funding Office (it being assumed for purposes of such determination that each part of the Euro-Rate Portion is actually made or maintained by or funded through the corresponding Notional Euro-Rate Funding Office). Notional Euro-Rate Funding Offices may be selected by such Lender without regard to such Lender's actual methods of making, maintaining or funding Loans or any sources of funding actually used by or available to such Lender. (b) ACTUAL FUNDING. Each Lender shall have the right from time to time to make or maintain any part of the Euro-Rate Portion by arranging for a branch, subsidiary or affiliate of such Lender to make or maintain such part of the Euro-Rate Portion. Such Lender shall have the right to (i) hold any applicable Note payable to its order for the benefit and account of such branch, subsidiary or affiliate or (ii) request the Borrower to issue one or more promissory notes in the principal amount of such Euro-Rate Portion, in substantially the form attached hereto as Exhibit A-1, with the blanks appropriately filled, payable to such branch, subsidiary or affiliate and with appropriate changes reflecting that the holder thereof is not obligated to make any additional Loans to the Borrower. The Borrower agrees to comply promptly with any request under clause (ii) of this Section 2.12(b). If any Lender causes a branch, subsidiary or affiliate to make or maintain any part of the Euro-Rate Portion hereunder, all terms and conditions of this Agreement shall, except where the context clearly requires otherwise, be applicable to such part of the Euro-Rate Portion and to any note payable to the order of such branch, subsidiary or affiliate to the same extent as if such part of the Euro-Rate Portion were made or maintained and such note were a Revolving Credit Note payable to such Lender's order. ARTICLE III THE SUBFACILITIES 3.01. THE LETTER OF CREDIT SUBFACILITY. (a) GENERAL. Subject to the terms and conditions of this Agreement, and relying upon the representations and warranties herein set forth and upon the agreements of the Lenders set forth in Sections 3.03 and 3.04 hereof, the Issuing Banks may issue for the account of the Borrower letters of credit (each, as amended, modified or supplemented from time to time, a "Letter of Credit", as such term is further defined in the Collateral Agency Agreement) at any time or from time to time on or after the date hereof. The Borrower shall not request any Letter of Credit to be issued except within the following limitations: (i) no Letter of Credit shall be issued later than 90 days before the Revolving -16- 13 Credit Maturity Date, (ii) no Letter of Credit shall be issued if the Agent shall have received the notice from the Required Lenders referred to in Section 3.02(c)(iii) hereof, (iii) at the time any Letter of Credit is issued, the aggregate Revolving Credit Exposures of the Lenders (after giving effect to issuance of the requested Letter of Credit) shall not exceed the sum of the Revolving Credit Committed Amounts of the Lenders at such time, and (iv) on the date of issuance of any Letter of Credit (and after giving effect to such issuance) the aggregate Letter of Credit Exposure shall not at any time exceed $10,000,000. (b) TERMS OF LETTERS OF CREDIT. The Borrower shall not request any Letter of Credit to be issued, nor shall the Issuing Banks be obligated to issue any Letter of Credit, except within the following limitations: each Letter of Credit (i) shall have an expiration date no later than the earlier of (A) 12 months after the date of issuance thereof, or (B) ten days before the Revolving Credit Maturity Date, (ii) shall not be an evergreen Letter of Credit, (iii) shall be denominated in Dollars, (iv) shall be payable only against sight drafts (and not time drafts), and (v) shall be in a minimum stated amount of $50,000. (c) PURPOSES OF LETTERS OF CREDIT. Each Letter of Credit shall be satisfactory in form, substance and beneficiary to the relevant Issuing Bank in its discretion. Each Letter of Credit shall be used by the Borrower as a standby letter of credit used solely (x) to provide credit enhancement for workers' compensation obligations, contract performance guarantees, leasing arrangements and like bonding requirements of the Borrower and its Wholly Owned Subsidiaries, all in the ordinary course of business of the Borrower or such Subsidiaries, and (y) for other purposes approved by the relevant Issuing Bank in its discretion. Letters of Credit shall not be used to provide credit support for any Indebtedness or other direct or indirect financing arrangements of the Borrower or any other Person without the written consent of the Agent and the relevant Issuing Bank. The Borrower shall not at any time permit any Letter of Credit to be issued or to remain outstanding to support, directly or indirectly, any obligations of any Person except the Borrower and its Wholly Owned Subsidiaries. The provisions of this Section 3.01(c) represent only an obligation of the Borrower to the Issuing Banks and the Lenders; no Issuing Bank shall have any obligation to the Lenders to ascertain the purpose of any Letter of Credit, and the rights and obligations of the Lenders and the Issuing Banks among themselves shall not be impaired or affected by a breach of this Section 3.01(c). (d) LETTER OF CREDIT FEE. The Borrower shall pay to the Agent for the account of each Lender a fee (the "Letter of Credit Fee") for each Letter of Credit for each day from and including the date of issuance thereof to and including the date of expiration or termination thereof, equal to (x) the Letter of Credit Undrawn Availability on such day, times (y) the Applicable Margin applicable under the Euro-Rate Option on such day, times (z) 1/365 (or 1/366, as the case may be). Such Letter of Credit Fee shall be due and payable for the preceding period for which such fee has not been paid on each of the following dates: (i) each Regular Quarterly Payment Date, and (ii) the date of expiration or termination of such Letter of Credit. (e) FACING FEE; ADMINISTRATION FEES. The Borrower shall pay to the Agent, for the sole account of the relevant Issuing Bank, a fee (the "Letter of Credit Facing Fee") for each Letter of Credit for each day from and including the date of issuance thereof to and including the date of expiration or termination thereof, equal to (x) the Letter of Credit Undrawn Availability on such day, times (y) 0.25%, times (z) 1/365 (or 1/366, as the case may be). Such Letter of Credit Facing Fee shall be due and payable for the preceding period for which such fee has not been paid on each of the following dates: (i) -17- 14 each Regular Quarterly Payment Date, and (ii) the date of expiration or termination of such Letter of Credit. In addition, the Borrower shall pay to the Agent, for the sole account of the Issuing Bank, such other administration, maintenance, amendment, drawing and negotiation fees as may be customarily charged by the relevant Issuing Bank from time to time in connection with letters of credit. (f) PRIOR LETTERS OF CREDIT. Any letters of credit ("Prior Letters of Credit") issued by Mellon Bank, N.A. or any of its affiliates under the prior "Revolving Credit Agreement" referred to in Section 5.01(f) (the "Prior Revolving Credit Agreement") and outstanding on the Closing Date shall, as of the Closing Date, automatically and without further action be deemed to be Letters of Credit issued under this Agreement. The Borrower hereby represents and warrants that such Prior Letters of Credit will comply with the limitations set forth in Sections 3.01(a) and 3.01(b) hereof as of the Closing Date as if issued hereunder on the Closing Date. Fees with respect to such Prior Letters of Credit for each day to and including the Closing Date shall accrue at the rates set forth under the Prior Revolving Credit Agreement and shall be payable on the Closing Date, and fees with respect to such Prior Letters of Credit for each day after the Closing Date shall accrue and be payable as provided for Letters of Credit in this Agreement. The parties hereto acknowledge and agree that (i) the TIMCO Bonds Letter of Credit was not, and will not be deemed to have been, issued under the Prior Revolving Credit Agreement, and (ii) the letters of credit subject to the Note Backup Agreement were not, and will not be deemed to have been, issued under the Prior Revolving Credit Agreement. 3.02. PROCEDURE FOR ISSUANCE AND AMENDMENT OF LETTERS OF CREDIT. (a) REQUEST FOR ISSUANCE. The Borrower may from time to time request, upon at least three Business Days' notice, Mellon Bank, N.A. to issue a Letter of Credit by delivering to Mellon Bank, N.A. (or such other Issuing Bank as Mellon Bank, N.A. may from time to time designate) and the Agent a written request to such effect, specifying the date on which such Letter of Credit is to be issued, the expiration date thereof, and the stated amount thereof, together with such other certificates, documents and other papers and information as such Issuing Bank may request. If the Issuing Bank desires to issue such Letter of Credit, the Issuing Bank shall promptly notify the Agent (by telephone or otherwise), and furnish the Agent with the proposed form of Letter of Credit to be issued. The Agent shall determine, as of the close of business on the day before such proposed issuance, whether such proposed Letter of Credit complies with the limitations set forth in Sections 3.01(a) and 3.01(b) hereof. Unless such limitations are not satisfied, or unless the Required Lenders have given notice to the Agent to cease issuing Letters of Credit pursuant to Section 3.02(c)(iii) hereof, the Agent shall notify the relevant Issuing Bank (in writing or by telephone promptly confirmed in writing) that such Issuing Bank is authorized to issue such Letter of Credit. If the Issuing Bank issues a Letter of Credit, it shall deliver the original of such Letter of Credit to the beneficiary thereof or as the Borrower shall otherwise direct, and shall promptly notify the Agent thereof and furnish a copy thereof to the Agent. (b) EXTENSION OR INCREASE. The Borrower may from time to time request an Issuing Bank to extend the expiration date of an outstanding Letter of Credit issued by such Issuing Bank or to increase the Letter of Credit Undrawn Availability of such Letter of Credit. Such extension or increase shall for all purposes hereunder (including but not limited to Sections 3.02(a) and 5.02) be treated as though the Borrower had requested issuance of a replacement Letter of Credit; provided, however, that the Issuing Bank may, if it elects, issue an amendment to the particular Letter of Credit providing for -18- 15 such an extension or increase in lieu of issuing a new Letter of Credit in substitution for the outstanding Letter of Credit. (c) LIMITATIONS ON ISSUANCE, EXTENSION AND AMENDMENT. (i) As between the Borrower, on the one hand, and the Lender Parties, on the other hand, the issuance or extension of any Letter of Credit (including any deemed issuance arising from increase or extension of a Letter of Credit as provided in Section 3.02(b) hereof) is within the discretion of each Issuing Bank. (ii) As between each Issuing Bank, on the one hand, and the Agent and the Lenders, on the other hand, such Issuing Bank shall be justified and fully protected in issuing any Letter of Credit (including any deemed issuance arising from increase or extension of a Letter of Credit as provided in Section 3.02(b) hereof) after receiving authorization from the Agent as provided in Section 3.02(a) hereof, notwithstanding any subsequent notices to the Issuing Bank, any knowledge of an Event of Default or Potential Default, any knowledge of failure of any condition specified in Section 5.02 hereof to be satisfied, any other knowledge of the Issuing Bank, or any other event, condition or circumstance whatever. (iii) As between the Agent, on the one hand, and the Lenders, on the other hand, the Agent shall not authorize issuance of any Letter of Credit pursuant to Section 3.02(a) (including any deemed issuance arising from increase or extension of a Letter of Credit as provided in Section 3.02(b)) if the Agent shall have received, at least two Business Days before authorizing such issuance, from the Required Lenders an unrevoked written notice that any condition precedent set forth in Section 5.02 will not be satisfied and expressly requesting that the Agent direct the Issuing Banks to cease to issue Letters of Credit. Unless the Agent has received such notice or has determined that the applicable limitations set forth in Sections 3.01(a) and 3.01(b) hereof are not satisfied, the Agent shall be justified and fully protected, as against the Lenders, in authorizing the Issuing Bank to issue such Letter of Credit, notwithstanding any subsequent notices to the Agent, any knowledge of an Event of Default or Potential Default, any knowledge of failure of any condition specified in Section 5.02 hereof to be satisfied, any other knowledge of the Agent, or any other event, condition or circumstance whatever. (d) AMENDMENTS. At the request of the Borrower from time to time, and subject to satisfaction of such conditions as the relevant Issuing Bank may require, each Issuing Bank may amend, modify or supplement Letters of Credit, or waive compliance with any condition of issuance or payment, without the consent of, and without liability to, the Agent or any Lender, provided that any such amendment, modification or supplement that extends the expiration date or increases the Letter of Credit Undrawn Availability of an outstanding Letter of Credit shall be subject to Section 3.02(b) hereof. 3.03. LETTER OF CREDIT PARTICIPATING INTERESTS. (a) GENERALLY. Concurrently with the issuance of each Letter of Credit, the relevant Issuing Bank automatically shall be deemed, irrevocably and unconditionally, to have sold, assigned, transferred and conveyed to each other Lender, and each other Lender automatically shall be deemed, irrevocably and unconditionally, severally to have purchased, acquired, accepted and assumed from the -19- 16 Issuing Bank, without recourse to, or representation or warranty by, the Issuing Bank, an undivided interest, in a proportion equal to such Lender's Pro Rata share, in all of the Issuing Bank's rights and obligations in, to or under such Letter of Credit, the Letter of Credit Reimbursement Obligations, and all collateral, guarantees and other rights from time to time directly or indirectly securing the foregoing (such interest of each Lender being referred to herein as a "Letter of Credit Participating Interest"). Amounts other than Letter of Credit Reimbursement Obligations and Letter of Credit Fees payable from time to time under or in connection with a Letter of Credit shall be for the sole account of the relevant Issuing Bank. On the date that any Purchasing Lender becomes a party to this Agreement in accordance with Section 10.14 hereof, Letter of Credit Participating Interests in any outstanding Letters of Credit held by the Lender from which such Purchasing Lender acquired its interest hereunder shall be proportionately reallotted between such Purchasing Lender and such transferor Lender (and, to the extent such transferor Lender is an Issuing Bank, the Purchasing Lender shall be deemed to have acquired a Letter of Credit Participating Interest from such transferor Lender to such extent). (b) OBLIGATIONS ABSOLUTE. Notwithstanding any other provision hereof, each Lender hereby agrees that its obligation to participate in each Letter of Credit issued in accordance herewith, and its obligation to make the payments specified in Section 3.04 hereof, are each absolute, irrevocable and unconditional and shall not be affected by any event, condition or circumstance whatever. The failure of any Lender to make any such payment shall not relieve any other Lender of its funding obligation hereunder on the date due, but no Lender shall be responsible for the failure of any other Lender to meet its funding obligations hereunder. 3.04. LETTER OF CREDIT DRAWINGS AND REIMBURSEMENTS. (a) BORROWER'S REIMBURSEMENT OBLIGATION. The Borrower hereby agrees to reimburse the relevant Issuing Bank, by making payment to the Agent for the account of such Issuing Bank in accordance with Section 2.09(b) hereof, on the date and in the amount of each payment made by the such Issuing Bank under any Letter of Credit, without notice, protest or demand, all of which are hereby waived, and an action therefor shall immediately accrue. To the extent such payment is not timely made, the Borrower hereby agrees to pay to the Agent, for the account of the relevant Issuing Bank, on demand, interest on any Letter of Credit Unreimbursed Draws for each day from and including the date of such payment by such Issuing Bank until reimbursed in full (before and after judgment), in accordance with Section 2.09(c) hereof, at the rate per annum set forth in Section 2.09(c)(ii) hereof. (b) PAYMENT BY LENDERS ON ACCOUNT OF UNREIMBURSED DRAWS. If an Issuing Bank makes a payment under any Letter of Credit and is not reimbursed in full therefor on such payment date in accordance with Section 3.04(a) hereof, such Issuing Bank will promptly notify the Agent thereof (which notice may be by telephone), and the Agent shall forthwith notify each Lender (which notice may be by telephone promptly confirmed in writing) thereof. No later than the Agent's close of business on the date such notice is given, each such Lender will pay to the Agent, for the account of such Issuing Bank, in immediately available funds, an amount equal to such Lender's Pro Rata share of the unreimbursed portion of such payment by such Issuing Bank. If and to the extent that any Lender fails to make such payment to the Agent for the account of such Issuing Bank on such date, such Lender shall pay such amount on demand, together with interest, for such Issuing Bank's own account, for each day from and including the date of such Issuing Bank's payment to and including the date of payment to the Issuing Bank (before and after judgment) at the following rates per annum: (x) for each day from and -20- 17 including the date of such payment by the Issuing Bank to and including the second Business Day thereafter, at the Federal Funds Effective Rate for such day, and (y) for each day thereafter, at the rate applicable to Letter of Credit Unreimbursed Draws under Section 3.04(a) hereof for such day. (c) DISTRIBUTIONS TO PARTICIPANTS. If, at any time, after an Issuing Bank has made a Letter of Credit Unreimbursed Draw and has received from any Lender such Lender's share of such Letter of Credit Unreimbursed Draw, such Issuing Bank receives any payment or makes any application of funds on account of the Letter of Credit Reimbursement Obligation arising from such Letter of Credit Unreimbursed Draw, such Issuing Bank will pay to the Agent, for the account of such Lender, such Lender's Pro Rata share of such payment or application. (d) RESCISSION. If any amount received by an Issuing Bank on account of any Letter of Credit Reimbursement Obligation shall be avoided, rescinded or otherwise returned or paid over by such Issuing Bank for any reason at any time, whether before or after the termination of this Agreement (or such Issuing Bank believes in good faith that such avoidance, rescission, return or payment is required, whether or not such matter has been adjudicated), each such Lender will, promptly upon notice from the Agent or such Issuing Bank, pay over to the Agent for the account of such Issuing Bank its Pro Rata share of such amount, together with its Pro Rata share of any interest or penalties payable with respect thereto. (e) EQUALIZATION. If any Lender receives any payment or makes any application on account of its Letter of Credit Participating Interest, such Lender shall forthwith pay over to the relevant Issuing Bank, in Dollars and in like kind of funds received or applied by it the amount in excess of such Lender's ratable share of the amount so received or applied. 3.05. OBLIGATIONS ABSOLUTE. The payment obligations of the Borrower under Section 3.04 hereof shall be unconditional and irrevocable and shall be paid strictly in accordance with the terms of this Agreement under all circumstances, including, without limitation, the following circumstances: (a) any lack of validity or enforceability of this Agreement, any Letter of Credit, any other Loan Document or any documents, instruments or agreements evidencing or otherwise relating to any obligation of the Borrower or Subsidiary of the Borrower secured or supported by any Letter of Credit; (b) the existence of any claim, set-off, defense or other right which the Borrower or any other Person may have at any time against any beneficiary or transferee of any Letter of Credit (or any Persons for whom any such beneficiary or transferee may be acting), the relevant Issuing Bank, any Lender, or any other Person, whether in connection with this Agreement, the transactions contemplated hereby or any unrelated transaction; (c) any draft, certificate, statement or other document presented under any Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect; -21- 18 (d) payment by the Issuing Bank under any Letter of Credit against presentation of a draft or certificate which does not comply with the terms of such Letter of Credit, or payment by the Issuing Bank under the Letter of Credit in any other circumstances in which conditions to payment are not met, except any such payment resulting solely from the gross negligence or willful misconduct of the Issuing Bank; or (e) any other event, condition or circumstance whatever, whether or not similar to any of the foregoing. The Borrower bears the risk of, and neither the Issuing Bank, any of its directors, officers, employees or agents, nor any Lender, shall be liable or responsible for the use which may be made of any Letter of Credit, or acts or omissions of the beneficiary or any transferee in connection therewith. 3.06. FURTHER ASSURANCES. The Borrower hereby agrees, from time to time, to do and perform any and all acts and to execute any and all further instruments reasonably requested by any Issuing Bank more fully to effect the purposes of this Agreement and the issuance of the Letters of Credit hereunder. 3.07. CASH COLLATERAL FOR LETTERS OF CREDIT. To the extent that this Agreement or any other Loan Document requires a payment, prepayment or other application of funds to be made with respect to the Revolving Credit Loans, such provision shall be construed as follows: after payment in full of the outstanding Revolving Credit Loans (whether or not such payment would require the Borrower to pay any amount under Section 2.10(b) hereof), and the payment in full of all outstanding Letter of Credit Unreimbursed Draws, then, to the extent of the excess, if any, of the aggregate Letter of Credit Exposure at such time over the balance in the Letter of Credit Collateral Account, an amount equal to the remainder of the amount so required to be paid by the Borrower shall immediately be paid by the Borrower to the Collateral Agent for deposit in the Letter of Credit Collateral Account. In addition, the Borrower agrees that, without limitation of the foregoing or of any other provisions of this Agreement or the Loan Documents requiring collateral for the Letters of Credit or other Obligations in whole or in part, and without limitation of other rights and remedies under this Agreement or the Loan Documents or at law or in equity, if all of the Revolving Credit Loans become due and payable pursuant to Section 8.02 hereof, the Borrower shall immediately pay to the Collateral Agent, for deposit in the Letter of Credit Collateral Account, an amount equal to the excess, if any, of the aggregate Letter of Credit Exposure at such time over the balance in the Letter of Credit Collateral Account. The Agent shall direct the Collateral Agent to release funds in the Letter of Credit Collateral Account to the Issuing Bank for payment of Letter of Credit Reimbursement Obligations constituting Letter of Credit Unreimbursed Draws, as and when the same become due and payable if and to the extent the Borrower fails to pay the same. 3.08. CERTAIN PROVISIONS RELATING TO THE ISSUING BANKS. (a) GENERAL. The Issuing Banks shall have no duties or responsibilities except those expressly set forth in this Agreement and the other Loan Documents, and no implied duties or responsibilities on the part of the Issuing Banks shall be read into this Agreement or any Loan Document or shall otherwise exist. The duties and responsibilities of the Issuing Banks to the other Lender Parties under this Agreement and the other Loan Documents shall be mechanical and administrative in nature, -22- 19 and no Issuing Bank shall have a fiduciary relationship in respect of any Lender Party or any other Person. No Issuing Bank shall be liable for any action taken or omitted to be taken by it under or in connection with this Agreement or any other Loan Document, unless caused by its own gross negligence or willful misconduct. No Issuing Bank shall be under any obligation to ascertain, inquire or give any notice relating to (i) the performance or observance of any of the terms or conditions of this Agreement or any other Loan Document on the part of the Borrower, (ii) the business, operations, condition (financial or otherwise) or prospects of the Borrower or any other Person, or (iii) the existence of any Event of Default or Potential Default. No Issuing Bank shall be under any obligation, either initially or on a continuing basis, to provide the Agent or any Lender with any notices, reports or information of any nature, whether in its possession presently or hereafter, except for such notices, reports and other information expressly required by this Agreement to be so furnished. (b) ADMINISTRATION. Each Issuing Bank may rely upon any notice or other communication of any nature (written or oral, including but not limited to telephone conversations, whether or not such notice or other communication is made in a manner permitted or required by this Agreement or any Loan Document) purportedly made by or on behalf of the proper party or parties, and no Issuing Bank shall have any duty to verify the identity or authority of any Person giving such notice or other communication. Each Issuing Bank may consult with legal counsel (including, without limitation, in-house counsel for such Issuing Bank or in-house or other counsel for the Borrower), independent public accountants and any other experts selected by it from time to time, and no Issuing Bank shall be liable for any action taken or omitted to be taken in good faith in accordance with the advice of such counsel, accountants or experts. Whenever any Issuing Bank shall deem it necessary or desirable that a matter be proved or established with respect to the Borrower or any Lender Party, such matter may be established by a certificate of the Borrower or such Lender Party, as the case may be, and such Issuing Bank may conclusively rely upon such certificate. (c) INDEMNIFICATION OF ISSUING BANKS BY LENDERS. Each Lender hereby agrees to reimburse and indemnify each Issuing Bank and each of their respective directors, officers, employees and agents (to the extent not reimbursed by the Borrower and without limitation of the obligations of the Borrower to do so), Pro Rata, from and against any and all amounts, losses, liabilities, claims, damages, expenses, obligations, penalties, actions, judgments, suits, costs or disbursements of any kind or nature (including, without limitation, the fees and disbursements of counsel (other than in-house counsel) for such Issuing Bank or such other Person in connection with any investigative, administrative or judicial proceeding commenced or threatened, whether or not such Issuing Bank or such other Person shall be designated a party thereto) that may at any time be imposed on, incurred by or asserted against such Issuing Bank, in its capacity as such, or such other Person, as a result of, or arising out of, or in any way related to or by reason of, this Agreement, any other Loan Document, any transaction from time to time contemplated hereby or thereby, or any transaction secured or financed in whole or in part, directly or indirectly, with any Letter of Credit or the proceeds thereof, provided, that no Lender shall be liable for any portion of such amounts, losses, liabilities, claims, damages, expenses, obligations, penalties, actions, judgments, suits, costs or disbursements resulting from the gross negligence or willful misconduct of such Issuing Bank or such other Person, as finally determined by a court of competent jurisdiction. 3.09. THE SWINGLINE SUBFACILITY. -23- 20 (a) GENERAL. Subject to the terms and conditions of this Agreement, and relying upon the representations and warranties herein set forth and the upon the agreements of the Lenders set forth in Section 3.11 hereof, the Swingline Lender may in its discretion make loans (the "Swingline Loans") to the Borrower at any time or from time to time on or after the date hereof and to but not including the Revolving Credit Maturity Date. The Swingline Lender shall not make any Swingline Loan to the extent that the aggregate amount of Swingline Loans outstanding would exceed $5,000,000 (the "Swingline Subfacility Amount"). The Swingline Lender shall not make any Swingline Loan to the extent that the aggregate amount of Swingline Loans outstanding would exceed the Swingline Current Availability most recently notified to it, as more fully provided in Section 3.10(a) hereof. (b) NATURE OF CREDIT. Within the limits of time and amount set forth in this Section 3.09, and subject to the provisions of this Agreement, and so long as the Swingline Lender is willing in its discretion to make Swingline Loans, the Borrower may borrow, repay and reborrow Swingline Loans hereunder. (c) SWINGLINE NOTE. The obligation of the Borrower to repay the unpaid principal amount of the Swingline Loans made to it by the Swingline Lender and to pay interest thereon shall be evidenced in part by a promissory note of the Borrower to the Swingline Lender, dated the Closing Date (the "Swingline Note") in substantially the form attached hereto as Exhibit A-2, with the blanks appropriately filled, payable to the order of the Swingline Lender in a face amount equal to the Swingline Subfacility Amount. (d) MATURITY. To the extent not due and payable earlier, the Swingline Loans shall be due and payable on the Revolving Credit Maturity Date. (e) MAKING OF SWINGLINE LOANS, ETC. The Swingline Lender may in its discretion elect to make Swingline Loans from time to time by paying items presented for payment on, or otherwise crediting, zero-balance or other accounts maintained with the Swingline Lender, from time to time without any express request or notice from the Borrower, it being agreed that the Borrower shall nevertheless be deemed for all purposes of this Agreement and the other Loan Documents (including but not limited to Section 5.02 hereof) to have made a request for such Loan as of the date such item is paid or such credit is made, as the case may be. In addition, the Borrower may, in the alternative, request Swingline Loans to be made in accordance with the provisions of Section 2.02 hereof, except that (x) the Borrower need give notice only to the Agent and the Swingline Lender, such notice need be given no later than 1:00 p.m., Pittsburgh time, on the date on which such proposed Swingline Loan is to be made, and the Agent need not notify other Lenders of such request, and (y) Swingline Loans may be requested and made in any amount (subject to the overall limits of time and amount set forth in this Section 3.09). Until due, all Swingline Loans shall bear interest at the Base Rate Option. (f) REPAYMENT OF SWINGLINE LOANS, ETC. Without limitation of any other provision hereof, the Swingline Lender may in its discretion elect to apply to repayment of Swingline Loans any amounts on deposit from time to time in accounts maintained with it (individually or as Agent or as Collateral Agent) by or for the benefit of the Borrower. Any such application may be made without regard to the limitations of Section 2.05 hereof. The Borrower may, in the alternative, prepay Swingline Loans in accordance with the provisions of Section 2.05 hereof, except that (x) the Borrower need give notice only to the Agent and the Swingline Lender, such notice need be given no later than 1:00 p.m., -24- 21 Pittsburgh time, on the date on which such proposed prepayment of the Swingline Loans is to be made, and the Agent need not notify other Lenders of such request, and (y) Swingline Loans may be prepaid in any amount (subject to the overall limits of time and amount set forth in this Section 3.09). (g) PRIOR SWINGLINE LOANS. The outstanding principal amount of all "Swingline Loans" ("Prior Swingline Loans") made by the Swingline Lender under the prior "Revolving Credit Agreement" referred to in Section 5.01(f) (the "Prior Revolving Credit Agreement") and outstanding on the Closing Date shall, as of the Closing Date, automatically and without further action be deemed to be Swingline Loans made under this Agreement. The Borrower hereby represents and warrants that such Prior Swingline Loans will comply with the limitations set forth in Section 3.09(a) hereof as of the Closing Date as if made hereunder on the Closing Date. Accrued and unpaid interest with respect to such Prior Swingline Loans for each day to and including the Closing Date shall accrue at the rates set forth under the Prior Revolving Credit Agreement, and shall be payable on the next Regular Monthly Payment Date after the Closing Date (or, if the Swingline Lender so requests, on demand). 3.10. LIMITATIONS ON THE MAKING OF SWINGLINE LOANS. (a) SWINGLINE CURRENT AVAILABILITY. The Agent shall calculate the Swingline Current Availability each time there is a change in the aggregate outstanding principal amount of the Revolving Credit Loans, the aggregate Letter of Credit Exposure or the Revolving Credit Committed Amounts. The "Swingline Current Availability" at any time shall be equal to the lesser of (i) the Swingline Subfacility Amount, or (ii) the amount equal to (A) the sum of the Revolving Credit Committed Amounts of the Lenders at such time, minus (B) the aggregate principal amount of Revolving Credit Loans plus the aggregate Letter of Credit Exposure at such time. Each time the Swingline Current Availability changes, the Agent shall promptly notify the Swingline Lender (by telephone promptly confirmed in writing) of such fact, stating the new Swingline Current Availability. From and after the second Business Day after receiving such notice from the Agent, the Swingline Lender shall not make any Swingline Loan to the extent that the aggregate principal amount of Swingline Loans would exceed the Swingline Current Availability so notified to the Swingline Lender. (b) RIGHTS OF THE PARTIES. As between the Borrower on the one hand, and the Swingline Lender, the Agent and the Lenders, on the other hand, the making of any Swingline Loan is within the discretion of the Swingline Lender. As between the Swingline Lender, on the one hand, and the Agent and the Lenders, on the other hand, the Swingline Lender shall not make any Swingline Loan outside the limitations of time and amount set forth in Section 3.09 hereof, and shall not make any Swingline Loan if the Swingline Lender shall have received, at least two Business Days before making such Swingline Loan, from the Required Lenders an unrevoked written notice that any condition precedent set forth in Section 5.02 will not be satisfied and expressly requesting that the Swingline Lender cease to make Swingline Loans. Absent such notice, the Swingline Lender shall be justified and fully protected, as against the Agent and the Lenders, in making Swingline Loans, notwithstanding any knowledge of an Event of Default or Potential Default, any knowledge of failure of any condition specified in -25- 22 Section 5.02 hereof to be satisfied, any other knowledge of the Swingline Lender, or any other event, condition or circumstance whatever. 3.11. SWINGLINE LOAN PARTICIPATING INTERESTS. (a) GENERALLY. At the discretion of the Swingline Lender at any time, on one Business Day's notice to each Lender, the Swingline Lender may require each other Lender to purchase, acquire, accept and assume from the Swingline Lender, without recourse to, or representation or warranty by, the Swingline Lender, an undivided interest, in a proportion equal to such Lender's Pro Rata share, in all of the Swingline Lender's rights and obligations in, to or under the outstanding Swingline Loans, together with accrued and unpaid interest thereon, and all collateral, guarantees and other rights from time to time directly or indirectly securing the foregoing (such interest of each Lender being referred to herein as a "Swingline Loan Participating Interest"). Amounts other than principal and interest on Swingline Loans payable under or in connection with any zero-balance or other account maintained with the Swingline Lender or otherwise payable to the Swingline Lender in connection with any automatic borrowing system, automatic investment system or other cash management operations for the Borrower shall be for the sole account of the Swingline Lender. On the date that any Purchasing Lender becomes a party to this Agreement in accordance with Section 10.14 hereof, Swingline Loan Participating Interests in any outstanding Swingline Loans held by the Lender from which such Purchasing Lender acquired its interest hereunder shall be proportionately reallotted between such Purchasing Lender and such transferor Lender (and, to the extent such transferor Lender is a Swingline Lender, the Purchasing Lender shall be deemed to have acquired a Swingline Loan Participating Interest from such transferor Lender to such extent). (b) OBLIGATIONS ABSOLUTE. Notwithstanding any other provision hereof, each Lender hereby agrees that its obligation to participate in each Swingline Loan issued in accordance herewith, and its obligation to make the payments specified in Section 3.04 hereof, are each absolute, irrevocable and unconditional and shall not be affected by any event, condition or circumstance whatever. The failure of any Lender to make any such payment shall not relieve any other Lender of its funding obligation hereunder on the date due, but no Lender shall be responsible for the failure of any other Lender to meet its funding obligations hereunder. (c) PAYMENT BY LENDERS ON ACCOUNT OF SWINGLINE LOANS. If the Swingline Lender desires to sell Swingline Loan Participating Interests to the Lenders, the Swingline Lender will promptly notify the Agent thereof (which notice may be by telephone), and the Agent shall forthwith notify each Lender (which notice may be by telephone promptly confirmed in writing) thereof. No later than the Agent's close of business on the date such notice is given by the Agent (if such notice is given by the Agent before 12:00 p.m., Pittsburgh time on such date), each such Lender will pay to the Agent, for the account of the Swingline Lender, in immediately available funds, an amount equal to such Lender's Pro Rata share of the outstanding principal amount of the Swingline Loans and accrued and unpaid interest thereon. If and to the extent that any Lender fails to make such payment to the Swingline Lender on such date, such Lender shall pay such amount on demand, together with interest, for the Swingline Lender's own account, for each day from and including the date of the Swingline Lender's payment to and including the date of repayment to the Swingline Lender (before and after judgment) following rates per annum: (x) for each day from and including the date of such payment by the Swingline Lender to -26- 23 and including the second Business Day thereafter, at the Federal Funds Effective Rate for such day, and (y) for each day thereafter, at the rate applicable to the Swingline Loans for such day. (d) DISTRIBUTIONS TO PARTICIPANTS. If, at any time, after the Swingline Lender has made a Swingline Loan and has received from any Lender such Lender's share of such Swingline Loan, and the Swingline Lender receives any payment or makes any application of funds on account of such Swingline Loan, the Swingline Lender will pay to the Agent, for the account of such Lender, such Lender's Pro Rata share of such payment. (e) RESCISSION. If any amount received by the Swingline Lender on account of any Swingline Loan or interest thereon shall be avoided, rescinded or otherwise returned or paid over by the Swingline Lender for any reason at any time, whether before or after the termination of this Agreement (or the Swingline Lender believes in good faith that such avoidance, rescission, return or payment is required, whether or not such matter has been adjudicated), each such Lender will, promptly upon notice from the Agent or the Swingline Lender, pay over to the Agent for the account of the Swingline Lender its Pro Rata share of such amount, together with its Pro Rata share of any interest or penalties payable with respect thereto. (f) EQUALIZATION. If any Lender receives any payment or makes any application on account of its Swingline Loan Participating Interest, such Lender shall forthwith pay over to the Swingline Lender, in Dollars and in like kind of funds received or applied by it the amount in excess of such Lender's ratable share of the amount so received or applied. 3.12. CASH MANAGEMENT DOCUMENTATION. The representations, warranties and covenants by the Borrower under, and rights and remedies of the Swingline Lender under, any agreements or instruments relating to any zero-balance or other accounts maintained by the Borrower with the Swingline Lender from time to time, or relating to any automatic borrowing system, automatic investment system or other cash management operations in connection therewith, are in addition to, and not in limitation or derogation of, representations, warranties and covenants by the Borrower under, and rights and remedies of the Swingline Lender and the Lenders under, this Agreement, the Loan Documents, any other applicable documents, instruments and agreements, and applicable law. Subject to the foregoing, in the event of any inconsistency between the terms of this Agreement and any such agreements or instruments, this Agreement shall prevail. The terms of this Agreement shall be deemed to be incorporated by reference into each such agreement or instrument (whether or not such agreement or instrument so states). 3.13. CERTAIN PROVISIONS RELATING TO THE SWINGLINE LENDER. (a) GENERAL. The Swingline Lender shall have no duties or responsibilities except those expressly set forth in this Agreement and the other Loan Documents, and no implied duties or responsibilities on the part of the Swingline Lender shall be read into this Agreement or any Loan Document or shall otherwise exist. The duties and responsibilities of the Swingline Lender to the other Lender Parties under this Agreement and the other Loan Documents shall be mechanical and administrative in nature, and no Swingline Lender shall have a fiduciary relationship in respect of any Lender Party or any other Person. The Swingline Lender shall not be liable for any action taken or omitted to be taken by it under or in connection with this Agreement or any other Loan Document, -27- 24 unless caused by its own gross negligence or willful misconduct. The Swingline Lender shall not be under any obligation to ascertain, inquire or give any notice relating to (i) the performance or observance of any of the terms or conditions of this Agreement or any other Loan Document on the part of the Borrower, (ii) the business, operations, condition (financial or otherwise) or prospects of the Borrower or any other Person, or (iii) the existence of any Event of Default or Potential Default. The Swingline Lender shall not be under any obligation, either initially or on a continuing basis, to provide the Agent or any Lender with any notices, reports or information of any nature, whether in its possession presently or hereafter, except for such notices, reports and other information expressly required by this Agreement to be so furnished. (b) ADMINISTRATION. The Swingline Lender may rely upon any notice or other communication of any nature (written or oral, including but not limited to telephone conversations, whether or not such notice or other communication is made in a manner permitted or required by this Agreement or any Loan Document) purportedly made by or on behalf of the proper party or parties, and the Swingline Lender shall not have any duty to verify the identity or authority of any Person giving such notice or other communication. The Swingline Lender may consult with legal counsel (including, without limitation, in-house counsel for the Swingline Lender or in-house or other counsel for the Borrower), independent public accountants and any other experts selected by it from time to time, and the Swingline Lender shall not be liable for any action taken or omitted to be taken in good faith in accordance with the advice of such counsel, accountants or experts. Whenever the Swingline Lender shall deem it necessary or desirable that a matter be proved or established with respect to the Borrower or any Lender Party, such matter may be established by a certificate of the Borrower or such Lender Party, as the case may be, and the Swingline Lender may conclusively rely upon such certificate. (c) INDEMNIFICATION OF SWINGLINE LENDER BY LENDERS. Each Lender hereby agrees to reimburse and indemnify the Swingline Lender and its directors, officers, employees and agents (to the extent not reimbursed by the Borrower and without limitation of the obligations of the Borrower to do so), Pro Rata, from and against any and all amounts, losses, liabilities, claims, damages, expenses, obligations, penalties, actions, judgments, suits, costs or disbursements of any kind or nature (including, without limitation, the fees and disbursements of counsel (other than in-house counsel) for the Swingline Lender or such other Person in connection with any investigative, administrative or judicial proceeding commenced or threatened, whether or not the Swingline Lender or such other Person shall be designated a party thereto) that may at any time be imposed on, incurred by or asserted against the Swingline Lender, in its capacity as such, or such other Person, as a result of, or arising out of, or in any way related to or by reason of, this Agreement, any other Loan Document, any transaction from time to time contemplated hereby or thereby, or any transaction financed in whole or in part, or directly or indirectly, with the proceeds of any Swingline Loan, provided, that no Lender shall be liable for any portion of such amounts, losses, liabilities, claims, damages, expenses, obligations, penalties, actions, judgments, suits, costs or disbursements resulting from the gross negligence or willful misconduct of the Swingline Lender or such other Person, as finally determined by a court of competent jurisdiction. ARTICLE IV REPRESENTATIONS AND WARRANTIES The Borrower hereby represents and warrants to each Lender Party as follows: -28- 25 4.01. CORPORATE STATUS. The Borrower and each Subsidiary of the Borrower is a Corporation duly organized and validly existing under the laws of its jurisdiction of organization. The Borrower and each Subsidiary of the Borrower has corporate power and authority to own its property and to transact the business in which it is engaged or presently proposes to engage. The Borrower and each Subsidiary of the Borrower is duly qualified to do business as a foreign Corporation and, to the extent applicable, is in good standing in all jurisdictions in which the ownership of its properties or the nature of its activities or both makes such qualification necessary or advisable, except for matters that, individually or in the aggregate, do not, and would not be likely to, have a Material Adverse Effect. 4.02. CORPORATE POWER AND AUTHORIZATION. The Borrower has corporate power and authority to execute, deliver, perform, and take all actions contemplated by, each Loan Document to which it is a party, and all such action has been duly and validly authorized by all necessary corporate proceedings on its part. Without limitation of the foregoing, the Borrower has the corporate power and authority to borrow and request Letters of Credit to be issued pursuant to the Loan Documents to the fullest extent permitted hereby and thereby from time to time, and has taken all necessary corporate action to authorize such borrowings and requests for issuance of Letters of Credit. 4.03. EXECUTION AND BINDING EFFECT. This Agreement, each other Loan Document to which the Borrower is a party and which is executed and delivered or required to be executed and delivered on or before the date as of which this representation and warranty is made, has been duly and validly executed and delivered by the Borrower. This Agreement and each such Loan Document constitutes, and each other Loan Document when executed and delivered by the Borrower will constitute, the legal, valid and binding obligation of the Borrower, enforceable in accordance with its terms. 4.04. GOVERNMENTAL APPROVALS AND FILINGS. No approval, order, consent, authorization, certificate, license, permit or validation of, or exemption or other action by, or filing, recording or registration with, or notice to, any Governmental Authority (collectively, "Governmental Action") is or will be necessary or advisable in connection with execution and delivery of any Loan Document, consummation of the transactions herein or therein contemplated, performance of or compliance with the terms and conditions hereof or thereof or to ensure the legality, validity, binding effect, enforceability or admissibility in evidence hereof or thereof, except for the following: (a) filings and recordings in respect of the Liens in favor of the Collateral Agent and the Agent contemplated hereby and thereby, and (b) other matters set forth in Schedule 4.04 hereof. Each Governmental Action referred to in the foregoing clauses (a) and (b) has been duly obtained or made, as the case may be, and is in full force and effect (except, in the case of clause (a), for the filing of continuation statements and like renewal filings and recordings which are not yet required to be made). There is no action, suit, proceeding or investigation pending or (to the Borrower's knowledge after due inquiry) threatened which seeks or may result in the reversal, rescission, termination, modification or suspension of any such Governmental Action. 4.05. ABSENCE OF CONFLICTS. Neither the execution and delivery of any Loan Document nor consummation of the transactions herein or therein contemplated, nor performance of or compliance with the terms and conditions hereof or thereof, does or will (a) violate or conflict with any Law, or -29- 26 (b) violate or conflict with, or constitute a default under, or result in (or give rise to any right, contingent or other, of any Person to cause) any termination, cancellation, prepayment or acceleration of performance of, or result in the creation or imposition of (or give rise to any obligation, contingent or other, to create or impose) any Lien upon any property of the Borrower or any Subsidiary of the Borrower (except for any Lien in favor of the Collateral Agent securing the Obligations) pursuant to, or otherwise result in (or give rise to any right, contingent or other, of any Person to cause) any change in any right, power, privilege, duty or obligation of the Borrower or any Subsidiary of the Borrower under or in connection with, (i) the articles of incorporation or by-laws (or other constituent documents) of the Borrower or any Subsidiary of the Borrower, or (ii) any agreement or instrument to which the Borrower or any Subsidiary of the Borrower is a party or by which any of them or any of their respective properties may be subject or bound, except, in the case of the foregoing clause (b)(ii), for matters set forth on Schedule 4.05 hereof. 4.06. AUDITED FINANCIAL STATEMENTS. The Borrower has heretofore furnished to the Agent and each Lender consolidated balance sheets of the Borrower and its consolidated Subsidiaries as of December 31, 1994 and December 31, 1995 and the related consolidated statements of income, cash flows and changes in stockholders' equity for the fiscal years then ended, as audited and reported on by Deloitte & Touche, independent certified public accountants for the Borrower, who delivered an unqualified opinion in respect thereof. Such financial statements (including the notes thereto) present fairly the financial position of the Borrower and its consolidated Subsidiaries as of the end of each such fiscal year and the results of their operations and their cash flows for the fiscal years then ended, all in conformity with GAAP. 4.07. INTERIM FINANCIAL STATEMENTS. The Borrower has heretofore furnished to the Agent and each Lender interim consolidated balance sheets of the Borrower and its consolidated Subsidiaries as of September 30, 1996, together with the related consolidated statements of income, cash flows and changes in stockholders' equity for the period from January 1, 1996 to such date. Such financial statements (including the notes thereto) present fairly the financial condition of the Borrower and its consolidated Subsidiaries as of September 30, 1996, and their respective results of operations and cash flows for the fiscal period then ended, all in conformity with GAAP (except that such financial statements do not contain all of the footnote disclosures required by GAAP), subject to normal and recurring year-end audit adjustments. 4.08. ABSENCE OF UNDISCLOSED LIABILITIES. Neither the Borrower nor any Subsidiary of the Borrower has any liability or obligation of any nature (whether absolute, accrued, contingent or other, whether or not due, including but not limited to forward or long-term commitments or unrealized or anticipated losses from unfavorable commitments) that would be required by GAAP to be reflected on a consolidated balance sheet of the Borrower and its Subsidiaries (including the notes thereto) or that has, or would be likely to have, a Material Adverse Effect, except (a) matters set forth on Schedule 4.08 hereto, (b) liabilities and obligations disclosed in the financial statements referred to in Sections 4.05 and 4.06 hereof, (c) liabilities and obligations incurred after December 31, 1995 in the ordinary course of business and consistent with past practices, and (d) obligations under the Credit Facilities. -30- 27 4.09. ACCURATE AND COMPLETE DISCLOSURE. All written information heretofore, contemporaneously or hereafter provided by or on behalf of the Borrower or any Subsidiary of the Borrower to any Secured Party pursuant to or in connection with any Loan Document or any transaction contemplated hereby or thereby is or will be (as the case may be) true and accurate in all material respects on the date as of which such information is dated (or, if not dated, when received by such Secured Party) and does not or will not (as the case may be) omit to state any material fact necessary to make such information not misleading at such time in light of the circumstances in which it was provided. Except as disclosed to the Agent and each Lender in writing, the Borrower is not aware of any event, change or effect (other than political, social or economic events, changes or effects of general national or global scope) having or likely to have individually or in the aggregate, a Material Adverse Effect. 4.10. PROJECTIONS. The Borrower has delivered to the Agent projections prepared by the Borrower, dated February 5, 1997, for the years 1997 through 2001, demonstrating the projected consolidated financial condition, results of operations and cash flows of the Borrower and its Subsidiaries, which projections are accompanied by a written statement of the assumptions and estimates underlying such projections. Such projections, assumptions and estimates, as of the Closing Date, are reasonable, consistent with the Loan Documents, and represent the best judgment of the Borrower on such matters. Such projections, assumptions and estimates are based upon political, social and economic assumptions that are believed to be reasonable. Nothing has come to the attention of the Borrower as of the Closing Date which would lead it to believe that such projections will not be attained or exceeded. Such projections are not a guarantee of future performance. 4.11. SOLVENCY. On and as of the date hereof, and on each date on which a Loan is made, Letter of Credit is issued or credit is otherwise extended hereunder, the Borrower and each Significant Subsidiary of the Borrower is and will be Solvent (and for this purpose, each Subsidiary of the Borrower which is not Solvent shall be deemed a Significant Subsidiary if, collectively, together with their respective Subsidiaries, treated as a single entity, they would constitute a Significant Subsidiary). 4.12. MARGIN REGULATIONS. No part of the proceeds of any extension of credit hereunder will be used for the purpose of buying or carrying any "margin stock," as such term is used in Regulations G and U of the Board of Governors of the Federal Reserve System, as amended from time to time, to extend credit to others for the purpose of buying or carrying any "margin stock," or to extend credit to any Subsidiary of the Borrower that is a Broker-Dealer. Neither the Borrower nor any Subsidiary of the Borrower is engaged in the business of extending credit to others for the purpose of buying or carrying "margin stock." Neither the Borrower nor any Subsidiary of the Borrower owns "margin stock" sufficient to cause any Loan Obligations to be deemed "indirectly secured" by "margin stock" within the meaning of such Regulations. Neither any extension of credit pursuant to this Agreement nor any use of proceeds of any such extension of credit will violate or conflict with the provisions of Regulation G, T, U or X of the Board of Governors of the Federal Reserve System, as amended from time to time. 4.13. REGULATORY RESTRICTIONS. Except as set forth in Schedule 4.13 hereof, neither the Borrower nor any Subsidiary of the Borrower is (a) an "investment company" or a company "controlled" by an investment company within the meaning of the Investment Company Act of 1940, as amended, (b) a "holding company" or a "subsidiary company" of a "holding company" or an "affiliate" of either a -31- 28 "holding company" or a "subsidiary company" within the meaning of the Public Utility Holding Company Act of 1935, as amended, (c) subject to regulation under the Federal Power Act, the Interstate Commerce Act, or the Investment Company Act of 1940, as amended, or (d) subject to any other Law which purports to restrict or regulate its ability to borrow money or obtain credit as a consequence of the nature of the business conducted by such Person. 4.14. SUBSIDIARIES. Schedule 4.14 hereof states the authorized capitalization of each Subsidiary of the Borrower, the number of Shares of Capital Stock of each class issued and outstanding of each such Subsidiary, and the number and percentage of outstanding Shares of Capital Stock of each such class owned by the Borrower and by each Subsidiary of the Borrower. The outstanding Shares of Capital Stock of each Subsidiary of the Borrower have been duly authorized and validly issued and are fully paid and nonassessable. The Borrower and each Subsidiary of the Borrower owns beneficially and of record and has good title to all of the Shares of Capital Stock it is listed as owning in such Schedule 4.14, free and clear of any Lien, except for Liens in favor of the Collateral Agent securing the Obligations. Except as set forth on Schedule 4.14 hereof, there are no options, warrants, calls, subscriptions, conversion rights, exchange rights, preemptive rights or other rights, agreements or arrangements (contingent or other) which may in any circumstances now or hereafter obligate any Subsidiary of the Borrower to issue any Shares of its Capital Stock or any other securities. 4.15. PARTNERSHIPS, ETC. Neither the Borrower nor any Subsidiary of the Borrower is a partner (general or limited) of any partnership, is a party to any joint venture, or owns (beneficially or of record) any equity or similar interest in any Person (including but not limited to any interest pursuant to which the Borrower or such Subsidiary has or may in any circumstance have an obligation to make capital contributions to, or be generally liable for or on account of the liabilities, acts or omissions of such other Person), except (a) distributorship or similar arrangements that do not involve liability on the part of the Borrower or any of its Subsidiaries in the nature of the liability of a general partner, and (b) partnership interests permitted under Sections 7.05(g) and 7.05(j) hereof. 4.16. LITIGATION. There is no pending or (to the knowledge of the Borrower after due inquiry) threatened action, suit, proceeding or investigation by or before any Governmental Authority against or affecting the Borrower or any Subsidiary of the Borrower, except for (x) matters set forth on Schedule 4.16 hereto, and (y) matters that if adversely decided, individually or in the aggregate, do not, and would not be likely to, have a Material Adverse Effect. 4.17. ABSENCE OF OTHER CONFLICTS. Neither the Borrower nor any Subsidiary of the Borrower is in violation of or conflict with, or is subject to any contingent liability on account of any violation of or conflict with: (a) any Law, (b) its articles of incorporation or by-laws (or other constituent documents), or (c) any agreement or instrument to which it is party or by which it or any of its properties may be subject or bound, -32- 29 except for matters that, individually or in the aggregate, do not, and would not be likely to, have a Material Adverse Effect. 4.18. INSURANCE. The Borrower and each Subsidiary of the Borrower maintains, or causes there to be maintained, with financially sound and reputable insurers not related to or affiliated with the Borrower insurance with respect to its properties and business and against at least such liabilities, casualties and contingencies and in at least such types and amounts as is customary in the case of Persons engaged in the same or a similar business or having similar properties similarly situated. 4.19. TITLE TO PROPERTY. The Borrower and each Subsidiary of the Borrower has good and marketable title in fee simple to all real property owned or purported to be owned by it and good title to all other property of whatever nature owned or purported to be owned by it, including but not limited to all property reflected in the most recent audited balance sheet referred to in Section 4.06 hereof or submitted pursuant to Section 6.01(a) hereof, as the case may be (except as sold or otherwise disposed of in the ordinary course of business, or in a transaction permitted by the Loan Documents, after the date of such balance sheet), in each case free and clear of all Liens, other than Permitted Liens. 4.20. INTELLECTUAL PROPERTY. The Borrower and each Subsidiary of the Borrower owns, or is licensed or otherwise has the right to use, all the patents, trademarks, service marks, names (trade, service, fictitious or other), copyrights, technology (including but not limited to computer programs and software), know-how, processes, data bases and other rights, free from burdensome restrictions, necessary to own and operate its properties and to carry on its business as presently conducted and presently planned to be conducted without conflict with the rights of others, except for matters that, individually or in the aggregate, do not, and would not be likely to, have a Material Adverse Effect. 4.21. TAXES. All federal income tax returns required to be filed by or on behalf of the Borrower or any Subsidiary of the Borrower have been properly prepared, executed and filed. All other tax and information returns required to be filed by or on behalf of the Borrower or any Subsidiary of the Borrower have been properly prepared, executed and filed, except for matters that, individually or in the aggregate, do not, and would not be likely to, have a Material Adverse Effect. All taxes, assessments, fees and other governmental charges upon the Borrower or any Subsidiary of the Borrower or upon any of their respective properties, incomes, sales or franchises which are due and payable have been paid, other than those not yet delinquent and payable without premium or penalty, and except for those being diligently contested in good faith by appropriate proceedings, and in each case such reserves and provisions for taxes as may be required by GAAP shall have been made on the books of the Borrower and each Subsidiary of the Borrower. The reserves and provisions for taxes on the books of the Borrower and each Subsidiary of the Borrower for all open years and for its current fiscal period are adequate in accordance with GAAP. As of the Closing Date, neither the Borrower nor any Subsidiary of the Borrower knows of any proposed additional assessment or basis for any material assessment for additional taxes (whether or not reserved against), other than as set forth on Schedule 4.21 hereto. 4.22. EMPLOYEE BENEFITS. Except for matters disclosed to the Agent before the date as of which this representation and warranty is made or reaffirmed, neither the Borrower, any Subsidiary of the Borrower or Controlled Group Member has incurred any liability that has not been fully discharged (or any contingent or other potential liability that represents a material risk of becoming an actual -33- 30 liability) exceeding $150,000 in the aggregate for all such Persons for or in connection with any of the following: (a) any Pension-Related Event (whether or not any such Pension-Related Event has occurred) or (b) any complete or partial withdrawal from any Multiemployer Plan (whether or not such withdrawal has occurred). All employee benefit arrangements covering employees of the Borrower or any of its Subsidiaries have been administered in substantial compliance with, and funded in accordance with, applicable Law. 4.23. ENVIRONMENTAL MATTERS. Except as disclosed in Schedule 4.23 hereof, the Borrower and each Subsidiary of the Borrower and each of their respective Environmental Affiliates is and has been in full compliance with all applicable Environmental Laws, except for matters which, individually or in the aggregate, do not, and would not be likely to, have a Material Adverse Effect. Except as disclosed in Schedule 4.23 hereof, there is no Environmental Claim pending or to the knowledge of the Borrower threatened, and there are no past or present acts, omissions, events or circumstances (including but not limited to any dumping, leaching, deposition, removal, abandonment, escape, emission, discharge or release of any Environmental Concern Material at, on or under any facility or property now or previously owned, operated or leased by the Borrower or any Subsidiary of the Borrower or any of their respective Environmental Affiliates) that could form the basis of any Environmental Claim, against the Borrower or any Subsidiary of the Borrower or any of their respective Environmental Affiliates, except for matters which do not, and, if adversely decided, individually or in the aggregate, would not, have a Material Adverse Effect. Except as disclosed in Schedule 4.23 hereof, no facility or property now or previously owned, operated or leased by the Borrower or any Subsidiary of the Borrower or any of their respective Environmental Affiliates is an Environmental Cleanup Site. No Lien exists, and no condition exists which would be likely to result in the filing of a Lien, against any property of the Borrower or any Subsidiary of the Borrower under any Environmental Law. ARTICLE V CONDITIONS OF LENDING 5.01. CONDITIONS TO INITIAL LOANS. The obligation of each Lender to make Revolving Credit Loans on the Closing Date and the willingness of the Issuing Banks to issue any Letter of Credit on the Closing Date and of the Swingline Lender to make any Swingline Loans on the Closing Date is subject to the satisfaction, immediately prior to or concurrently with the making of such Loan or the issuance of such Letter of Credit, as the case may be, of the following further conditions precedent: (a) AGREEMENT; NOTES. The Agent shall have received, with a copy for each Lender, this Agreement, duly executed on behalf of the Borrower, and Revolving Credit Notes and a Swingline Note conforming to the requirements hereof, duly executed on behalf of the Borrower. (b) SHARED SECURITY DOCUMENTS. The Collateral Agent shall have received the following, each of which shall be in form and substance satisfactory to the Agent, with a copy for each Lender (except that the Lenders shall not be entitled to receive duplicate originals of the stock certificates and other instruments pledged pursuant to the following Shared Security Documents and the stock powers delivered in connection therewith): -34- 31 (i) The Collateral Agency Agreement, duly executed on behalf of Borrower and the other parties thereto. (ii) The Borrower Pledge Agreement, duly executed on behalf of the Borrower. (iii) Certificates and instruments representing the stock certificates and other instruments pledged pursuant to the Borrower Pledge Agreement, accompanied by undated duly executed instruments of transfer or assignment in blank, in form and substance satisfactory to the Agent. (iv) Financing statements executed by the Borrower and in proper form for filing under the Uniform Commercial Code in such jurisdictions as may be necessary or, in the opinion of the Agent, desirable to create, perfect or protect the Liens created or purported to be created by the Borrower Pledge Agreement (which financing statements shall cover all personal property of the Borrower, whether or not constituting collateral security under the Borrower Pledge Agreement). (v) Evidence that all other actions necessary or, in the opinion of the Agent, desirable to create, perfect or protect the Liens created or purported to be created by the Borrower Pledge Agreement have been taken. (vi) Evidence of contemporaneous searches of UCC, tax and other appropriate registers, dockets and records, which shall have revealed no filings or recordings with respect to property of the Borrower (other than those relating to Permitted Liens). (c) WEFA ACQUISITION. The Borrower or a Wholly Owned Subsidiary of the Borrower shall have entered into a contract to acquire good title, free of all Liens, to all of the outstanding Shares of Capital Stock of WEFA Holdings, Inc. ("WEFA"). (d) ACQUISITION DOCUMENTS. The Agent shall have received, with copies for each Lender, true and correct copies (in each case certified as to authenticity on behalf of the Borrower) of the following, each of which shall be satisfactory in form and substance to the Agent: all agreements relating to the acquisition of the Shares of Capital Stock of WEFA (including in each case all exhibits, schedules and disclosure letters delivered pursuant thereto), all amendments, waivers and consents relating thereto, and all other side letters or agreements affecting the terms thereof or other transactions contemplated thereby. (e) OTHER CREDIT FACILITIES. The Agent shall have received evidence satisfactory to it that all conditions precedent to funding under the Term Loan Agreement and the Note Backup Agreement shall have been satisfied, and that, concurrently with the Closing Date, the Borrower shall have received $225,000,000 gross cash proceeds under the Term Loan Agreement. (f) DISCHARGE OF PRIOR CREDIT FACILITIES. With respect to (a) the Revolving Credit Agreement dated as of June 29, 1995 among the Borrower, the Issuing Banks referred to therein, the Lenders parties thereto from time to time, Mellon Bank, N.A., The First National Bank of Boston, and NationsBank, N.A. (Carolinas), as Co-Agents, and Mellon Bank, N.A., as Agent, as amended, (b) the Term Loan Agreement dated as of June 29, 1995 among the Borrower, the Lenders parties thereto from time to time, Mellon Bank, N.A., The First National Bank of -35- 32 Boston and NationsBank, N.A. (Carolinas), as Co-Agents, and Mellon Bank, N.A., as Agent, as amended, and (c) the Credit Agreement dated as of October 23, 1996 among the Borrower, the Issuing Bank referred to therein, and Mellon Bank, N.A., as Agent, as amended, all principal, interest, letter of credit draws, fees and other amounts outstanding or otherwise due and payable shall have been paid in full, all commitments thereunder shall have terminated, all outstanding letters of credit thereunder shall have been terminated or assumed under one of the Credit Facilities, and all collateral security therefor shall have been released. (g) GOVERNMENTAL APPROVALS AND FILINGS. The Agent shall have received, with copies for each Lender, true and correct copies (in each case certified as to authenticity on such date on behalf of the Borrower) of all items referred to in clause (b) of Section 4.04 hereof and such items shall be satisfactory in form and substance to the Agent and shall be in full force and effect. (h) OTHER CONFLICTS. The Agent shall have received, with copies for each Lender, true and correct copies (in each case certified as to authenticity on such date on behalf of the Borrower) of each consent, waiver, amendment or agreement which has been obtained by or on behalf of the Borrower or any Subsidiary of the Borrower in respect of any matter which would, absent such consent, waiver, amendment or agreement, be within the scope of clause (b)(ii) of Section 4.05 hereof, and such items shall be satisfactory in form and substance to the Agent and shall be in full force and effect. (i) CORPORATE PROCEEDINGS. The Agent shall have received, with a counterpart for each Lender, certificates by the Secretary or Assistant Secretary of the Borrower dated as of the Closing Date as to (i) true copies of the articles of incorporation and by-laws (or other constituent documents) of the Borrower in effect on such date, (ii) true copies of all corporate action taken by the Borrower relative to this Agreement and the other Loan Documents and (iii) the incumbency and signature of the respective officers of the Borrower executing this Agreement and the other Loan Documents to which the Borrower is a party, together with satisfactory evidence of the incumbency of such Secretary or Assistant Secretary. The Agent shall have received, with a copy for each Lender, certificates from the appropriate Secretary of State or other applicable Governmental Authorities dated not more than 30 days before the Closing Date showing the good standing of the Borrower in its state of incorporation. (j) 1996 FINANCIAL STATEMENTS. The Borrower shall have furnished to the Agent an unaudited consolidated balance sheet of the Borrower and its consolidated Subsidiaries as of December 31, 1996, and unaudited consolidated statements of income and stockholders' equity of the Borrower and its consolidated Subsidiaries for the fiscal year ended December 31, 1996. Such financial statements shall have been certified by a Responsible Officer of the Borrower as presenting fairly the consolidated financial position of the Borrower and its consolidated Subsidiaries as of the end of such fiscal year and the consolidated results of their operations and stockholders' equity for such fiscal year, in conformity with GAAP, subject to normal and recurring audit adjustments. -36- 33 (k) FORM U-1. The Agent shall have received, with a counterpart for each Lender, a Federal Reserve Board Form U-1, duly executed by the Borrower, satisfactory in form and substance to the Agent. (l) LITIGATION. There shall not be pending or (to the knowledge of the Borrower after due inquiry) threatened action, suit, proceeding or investigation by or before any Governmental Authority seeking to challenge, prevent or declare illegal any of the transactions contemplated by the Loan Documents. (m) LEGAL OPINION OF COUNSEL TO THE BORROWER. The Agent shall have received, with an executed counterpart for each Lender, an opinion addressed to the Agent and each Lender, dated the Closing Date, of counsel to the Borrower (who shall be satisfactory to the Agent), as to such matters as may be requested by the Agent and in form and substance satisfactory to the Agent. (n) OFFICERS' CERTIFICATES. The Agent shall have received, with an executed counterpart for each Lender, certificates from such officers of the Borrower as to such matters as the Agent may request. (o) REPRESENTATIONS AND WARRANTIES, ETC. All representations and warranties set forth in Article IV hereof shall be true and correct on and as of the Closing Date as if made on and as of the Closing Date, after giving effect to the transactions contemplated by the Loan Documents to occur on or before the Closing Date. (p) GENERAL CONDITIONS. The conditions set forth in subsections (a), (c), (d) and (e) of Section 5.02 hereof shall have been satisfied. (q) FEES, EXPENSES, ETC. The Borrower shall have executed and delivered an origination fee letter (the "Origination Fee Letter") of even date herewith satisfactory in form and substance to the Agent. All fees and other compensation required to be paid to the Agent or the Lenders pursuant hereto or pursuant to such Origination Fee Letter on or prior to the Closing Date shall have been paid or received. (r) ADDITIONAL MATTERS. All corporate and other proceedings, and all documents, instruments and other matters in connection with the transactions contemplated by this Agreement and the other Loan Documents, shall be satisfactory in form and substance to the Agent. The Agent shall have received such other documents, instruments and other items as the Agent may reasonably request. 5.02. CONDITIONS TO SUBSEQUENT LOANS. The obligation of each Lender to make Revolving Credit Loans after the Closing Date and the willingness of the Issuing Banks to issue any Letters of Credit after the Closing Date and of the Swingline Lender to make any Swingline Loans on or after the Closing Date is subject to performance by the Borrower of its respective obligations to be performed hereunder or under the other Loan Documents on or before the date such Loan is made or such Letter of Credit is issued, satisfaction of the conditions precedent set forth herein and in the other Loan Documents and to satisfaction of the following further conditions precedent: -37- 34 (a) NOTICE. Notice with respect to such Loan or Letter of Credit shall have been given by the Borrower in accordance with Article II hereof or Article III hereof, as the case may be (subject to Section 3.09 hereof in the case of Swingline Loans). (b) REPRESENTATIONS AND WARRANTIES. Each of the representations and warranties made by the Borrower herein and in each other Loan Document shall be true and correct in all material respects on and as of such date as if made on and as of such date, both before and after giving effect to the Loans requested to be made (including any deemed request) and Letters of Credit requested to be issued on such date (except only that (i) the following representations and warranties need be true only on and as of the date hereof and the Closing Date: Sections 4.06, 4.07, 4.08 and 4.10 hereof and each of the representations and warranties set forth in the Borrower Pledge Agreement, and (ii) after the Closing Date, each reference to Schedule 4.14 in Section 4.14 shall be deemed a reference to such Schedule as the same may have been most recently amended in accordance with Section 6.01(m) hereof (and subject to changes since the date of such most recent amendment). (c) NO DEFAULTS. No Event of Default or Potential Default shall have occurred and be continuing or exist on such date or after giving effect to the Loans requested to be made (including any deemed request) or the Letters of Credit requested to be issued on such date. (d) NO VIOLATIONS OF LAW, ETC. Neither the making nor use of the Loans or the Letters of Credit shall cause any Lender Party to violate any Law. (e) NO MATERIAL ADVERSE CHANGE. There shall not have occurred, or be threatened, a material adverse change in the business, operations, condition (financial or otherwise) or prospects of the Borrower and its Subsidiaries taken as a whole since September 30, 1996. Each request (including any deemed request) by the Borrower for any Loan or Letter of Credit shall constitute a representation and warranty by the Borrower that the conditions set forth in this Section 5.02 have been satisfied as of the date of such request. Failure of the Agent to receive notice from the Borrower to the contrary before such Loan is made or Letter of Credit is issued shall constitute a further representation and warranty by the Borrower that the conditions referred to in this Section 5.02 have been satisfied as of the date such Loan is made or such Letter of Credit is issued. Without limitation of any other provision of this Agreement relating to deemed requests, the Borrower may be deemed to have requested a Loan for purposes of this Section 5.02, whether or not the Borrower had made an express request for a Loan, in the circumstances set forth in Section 3.09(e) hereof. ARTICLE VI AFFIRMATIVE COVENANTS The Borrower hereby covenants to each Lender Party as follows: 6.01. BASIC REPORTING REQUIREMENTS. -38- 35 (a) ANNUAL AUDIT REPORTS. As soon as practicable, and in any event within 105 days after the close of each fiscal year of the Borrower, the Borrower shall furnish to the Agent, with a copy for each Lender, audited consolidated statements of income, cash flows and stockholders' equity of the Borrower and its consolidated Subsidiaries for such fiscal year, an unaudited consolidating statement of income of the Borrower and its consolidated Subsidiaries for such fiscal year, and an audited consolidated balance sheet and unaudited consolidating balance sheet of the Borrower and its consolidated Subsidiaries as of the close of such fiscal year, and notes to each, all in reasonable detail, prepared on a comparative basis in accordance with GAAP. Such audited financial statements shall be accompanied by an opinion of Deloitte & Touche or other independent certified public accountants of recognized national standing selected by the Borrower and reasonably satisfactory to the Agent. Such opinion shall be free of any exception, qualification or explanation not acceptable to the Agent (and in any event shall be free of any exception, qualification or explanation relating to ability to continue as a going concern, a limited scope of examination or independence). Such opinion in any event shall contain a written statement of such accountants substantially to the effect that (i) such accountants audited such consolidated financial statements in accordance with generally accepted auditing standards and (ii) in the opinion of such accountants such audited financial statements present fairly the financial position of the Borrower and its consolidated Subsidiaries as of the end of such fiscal year and the results of their operations and their cash flows and stockholders' equity for such fiscal year, in conformity with GAAP. Such unaudited financial statements shall be certified by a Responsible Officer of the Borrower as presenting fairly the consolidated and consolidating financial position of the Borrower and its consolidated Subsidiaries as of the end of such fiscal year, and the respective consolidated and consolidating results of their operations and their cash flows and stockholders' equity for such fiscal year, in conformity with GAAP. (b) QUARTERLY REPORTS. As soon as practicable, and in any event within 60 days after the close of each of the first three fiscal quarters of each fiscal year of the Borrower, the Borrower shall furnish to the Agent, with a copy for each Lender, unaudited consolidated statements of income, cash flows and stockholders' equity of the Borrower and its consolidated Subsidiaries for such fiscal quarter and for the period from the beginning of such fiscal year to the end of such fiscal quarter, an unaudited consolidating statement of income for such fiscal quarter and for the period from the beginning of such fiscal year to the end of such fiscal quarter, and unaudited consolidated and consolidating balance sheets of the Borrower and its consolidated Subsidiaries as of the close of such fiscal quarter, and notes to each, all in reasonable detail, setting forth in comparative form the corresponding figures for the same periods or as of the same date during the preceding fiscal year (except for the consolidated balance sheet, which shall set forth in comparative form the corresponding balance sheet as of the prior fiscal year end, and cash flow statements, which shall report only year to date periods). Such financial statements shall be certified by a Responsible Officer of the Borrower as presenting fairly the consolidated and consolidating financial position of the Borrower and its consolidated Subsidiaries as of the end of such fiscal quarter and the respective consolidated and consolidating results of their operations and their cash flows and stockholders' equity for such fiscal quarter, in conformity with GAAP, subject to normal and recurring year-end audit adjustments. (c) COMPLIANCE CERTIFICATES. Concurrently with the delivery of the financial statements referred to in Sections 6.01(a) and 6.01(b), the Borrower shall deliver, or cause to be delivered, to the -39- 36 Agent, with a copy for each Lender, a certificate in substantially the form set forth as Exhibit C, duly completed and signed by a Responsible Officer of the Borrower. (d) ACCOUNTANTS' CERTIFICATES. Concurrently with the Agent's receipt from the Borrower of each set of audited financial statements delivered pursuant to Section 6.01(a), the Borrower shall deliver, or cause to be delivered, to the Agent, with sufficient copies for each Lender, a report signed by the independent certified public accountants who opined on such financial statements and dated the date of such financial statements, stating in substance that they have reviewed this Agreement and the other Loan Documents and that in making the examination necessary for their opinion on such financial statements they did not become aware of any Event of Default or Potential Default pursuant to Sections 7.01, 7.02(e)(iv), 7.03(e) and 7.03(f) as of the end of such fiscal year, or, if they did become so aware, such certificate or report shall state the nature and period of existence thereof. (e) ANNUAL BUSINESS PLAN. Not later than January 31 of each year, the Borrower shall furnish to the Agent, with a copy for each Lender, a business plan for the Borrower and its Subsidiaries for the next five years, certified as such by a Responsible Officer of the Borrower. Such business plan shall be not less detailed than the 1997-2001 corporate plan heretofore delivered to the Agent and each Lender, and shall include or be accompanied by, among other matters reasonably requested from time to time, projected income, cash flows and summary balance sheet for the Borrower and its Subsidiaries, on both a consolidated and a separate unconsolidated basis for each year in such five year period. (f) QUARTERLY PLAN UPDATES. Concurrently with the delivery of the financial statements referred to in Section 6.01(b), the Borrower shall furnish to the Agent, with a copy for each Lender, a quarterly update to the most recent annual business plan, certified as such by a Responsible Officer of the Borrower. Such business plan shall be not less detailed than the third quarter update for 1996 heretofore delivered to the Agent and each Lender. (g) QUARTERLY FINANCIAL INFORMATION. Concurrently with the delivery of the financial statements referred to in Sections 6.01(a) and 6.01(b), the Borrower shall provide the Agent, with a copy for each Lender, summary financial information as to the Borrower and its consolidated Subsidiaries on a consolidated basis (and separate financial information for such Subsidiaries as the Agent may reasonably request) as of the end of the preceding month, all in reasonable detail and in any case including, among other matters reasonably requested by the Agent from time to time, financial information on a monthly and year-to-date basis, and separate line-items showing EBIT, depreciation and amortization, all certified by a Responsible Officer of the Borrower. (h) CERTAIN OTHER REPORTS AND INFORMATION. Promptly upon their becoming available to the Borrower, the Borrower shall deliver, or cause to be delivered, to the Agent, with a copy for each Lender, a copy of (i) all regular or special reports, registration statements and amendments to the foregoing which the Borrower or any Subsidiary of the Borrower shall file with the Securities and Exchange Commission (or any successor thereto) or any securities exchange, (ii) all reports, proxy statements, financial statements and other information distributed by the Borrower to its security holders or the financial community generally, and (iii) upon request by any Lender Party, all reports submitted by outside accountants in connection with any audit of the Borrower or any Subsidiary of the Borrower, including but not limited to all management letters commenting on the internal controls of the Borrower or any Subsidiary of the Borrower submitted in connection with any such audit. -40- 37 (i) FURTHER INFORMATION. The Borrower will promptly furnish, or cause to be furnished, to the Agent, with a copy for each Lender, such other information and in such form as the Agent or any Lender may reasonably request from time to time. (j) NOTICE OF CERTAIN EVENTS. Promptly upon becoming aware of any of the following, the Borrower shall give the Agent notice thereof, together with a written statement of a Responsible Officer of the Borrower setting forth the details thereof and any action with respect thereto taken or proposed to be taken by the Borrower, and the Agent shall promptly notify each Lender thereof: (i) Any Event of Default or Potential Default. (ii) Any material adverse change in the business, operations, condition (financial or otherwise) or prospects (exclusive, in the case of prospects, of political, social or economic events, changes or effects of general national or global scope) of the Borrower and its Subsidiaries taken as a whole. (iii) Any pending or threatened action, suit, proceeding or investigation by or before any Governmental Authority against or affecting the Borrower or any Subsidiary of the Borrower which, if adversely decided, individually or in the aggregate, would, or would be likely to, have a Material Adverse Effect. (iv) Any termination for default by the Borrower of any contract which would reasonably be likely to result in a direct loss of aggregate revenues in excess of $20,000,000 to which the Borrower or any Subsidiary of the Borrower is a party. (v) Any Pension-Related Event, other than (w) any Reportable Event described in subsection (i) of the definition of such term herein as to which the 30 day notice requirement to the PBGC is waived under applicable regulations, and (x) any Pension-Related Event described in subsection (d) or (f) of the definition thereof which involves a liability of the Borrower, any Subsidiary of the Borrower or any Controlled Group Member that has not been fully discharged (or a contingent or other potential liability that represents a material risk of becoming an actual liability) of less than $1,000,000 in the aggregate for all such Persons. Such notice shall be accompanied by the following: (y) a copy of any notice, request, return, petition or other document received by the Borrower, any Subsidiary of the Borrower or any Controlled Group Member from any Person, or which has been or is to be filed with or provided to any Person (including, without limitation, the Internal Revenue Service, the Department of Labor, the PBGC or any Plan participant, beneficiary, alternate payee or employer representative), in connection with such Pension-Related Event, and (z) in the case of any Pension-Related Event with respect to a Plan, the most recent Annual Report (5500 Series), with attachments thereto, and if such Plan is required by applicable Law to have an actuarial valuation report, the most recent actuarial valuation report, for such Plan. (k) VISITATION AND VERIFICATION GENERALLY. The Borrower shall permit such Persons as the Agent or any Lender may designate from time to time to visit and inspect any of the properties of the Borrower and any Subsidiary of the Borrower, to examine their respective books and records and take -41- 38 copies and extracts therefrom and to discuss their respective affairs with their respective directors, officers, employees and independent accountants at such times and as often as the Agent or any Lender may reasonably request, subject to mandatory national security regulations. The Borrower hereby authorizes such officers, employees and independent accountants to discuss with the Agent or any Lender the affairs of the Borrower and its Subsidiaries, subject to mandatory national security regulations. The Agent and the Lenders shall have the right to examine and verify accounts, inventory and other properties and liabilities of the Borrower and its Subsidiaries from time to time, and the Borrower shall cooperate, and shall cause each of its Subsidiaries to cooperate, with the Agent and the Lenders in such verification, subject to mandatory national security regulations. (l) DUTY TO MAINTAIN INDEPENDENT ACCOUNTANTS WITH SECURITY CLEARANCES; VERIFICATION OF CLASSIFIED CONTRACTS. The Borrower shall, and shall cause each such Subsidiary to, retain at all times an independent certified public accountant of national standing having personnel who at all times have security clearances sufficient to permit them to examine and verify all such classified contracts, accounts and other assets which, individually or in the aggregate, are material to the business, operations, condition (financial or otherwise) or prospects of the Borrower and its Subsidiaries taken as a whole. The Borrower shall, from time to time at the reasonable request of the Agent, cause such independent accountants to examine, verify and report to the Agent on such classified contracts, accounts and assets as the Agent may request, to the fullest extent permitted by mandatory national security regulations. (m) CHANGES IN CORPORATE STRUCTURE. Concurrently with the delivery of the financial statements referred to in Sections 6.01(a) and 6.01(b), the Borrower shall deliver to the Agent notice of any change in the matters set forth in Section 4.14 hereof, together with an amended and restated Schedule 4.14 which reflects such change. 6.02. INSURANCE. The Borrower shall, and shall cause each of its Subsidiaries to, maintain with financially sound and reputable insurers insurance with respect to its properties and business and against such liabilities, casualties and contingencies and of such types as are reasonably satisfactory to the Agent from time to time, and in any case as is customary in the case of Persons engaged in the same or a similar business or having similar properties similarly situated. The Borrower shall, if so requested by the Agent, deliver to the Agent original or duplicate policies or certificates of such insurance and, as often as the Agent may reasonably request, a report of a reputable insurance broker, or an insurance company representative if an insurance broker is not involved, with respect to such insurance. 6.03. PAYMENT OF TAXES AND OTHER POTENTIAL CHARGES AND PRIORITY CLAIMS. The Borrower shall promptly notify the Agent in writing if it or any of its Subsidiaries learns of any proposed additional assessment or basis for any assessment for additional taxes (whether or not reserved against) which, if paid or incurred, would have a Material Adverse Effect. The Borrower shall, and shall cause each of its Subsidiaries to, pay and discharge, or cause to be paid and discharged, (a) on or prior to the date on which penalties attach thereto, all taxes, assessments and other governmental charges imposed upon it, or any of them, or any of its, or any of their, properties; -42- 39 (b) on or prior to the date when due, all lawful claims of materialmen, mechanics, carriers, warehousemen, landlords and other like Persons which, if unpaid, might result in the creation of a Lien upon any such property; and (c) on or prior to the date when due, all other lawful claims which, if unpaid, might result in the creation of a Lien upon any such property or which, if unpaid, might give rise to a claim entitled to priority over general creditors of the Borrower or such Subsidiary in any bankruptcy, insolvency, receivership or similar proceeding; provided, that, unless and until foreclosure, distraint, levy, sale or similar proceedings shall have been commenced, the Borrower or such Subsidiary need not pay or discharge, or cause the payment or discharge, of any such tax, assessment, charge or claim above so long as (x) the validity thereof is contested in good faith and by appropriate proceedings diligently conducted, and (y) such reserves or other appropriate provisions as may be required by GAAP shall have been made therefor. 6.04. PRESERVATION OF CORPORATE STATUS. The Borrower shall, and shall cause each of its Subsidiaries to, maintain its status as a Corporation duly organized, validly existing and, to the extent applicable, in good standing under the laws of its jurisdiction of organization, except for Permitted Mergers. The Borrower shall, and shall cause each of its Subsidiaries to, at all times be duly qualified to do business as a foreign Corporation and, to the extent applicable, in good standing in all jurisdictions in which the ownership of its properties or the nature of its business or both make such qualification necessary or advisable, except for matters that, individually or in the aggregate, do not, and would not be likely to, have a Material Adverse Effect. 6.05. GOVERNMENTAL APPROVALS AND FILINGS. The Borrower shall, and shall cause each of its Subsidiaries to, keep and maintain in full force and effect all Governmental Actions necessary or advisable in connection with execution and delivery of any Loan Document, consummation of the transactions herein or therein contemplated, performance of or compliance with the terms and conditions hereof or thereof, or to ensure the legality, validity, binding effect, enforceability or admissibility in evidence hereof or thereof. 6.06. MAINTENANCE OF PROPERTIES, FRANCHISES, ETC. The Borrower shall, and shall cause each of its Subsidiaries to, (a) maintain or cause to be maintained in good repair, working order and condition the properties now or hereafter owned, leased or otherwise possessed by it and shall make or cause to be made all needful and proper repairs, renewals, replacements and improvements thereto so that the business carried on in connection therewith may be properly and advantageously conducted at all times, except where failure to do so does not, and would not be likely to, have a Material Adverse Effect, and (b) maintain and hold in full force and effect all franchises, licenses, permits, certificates, authorizations, qualification, accreditations and other rights, consents and approvals (whether issued, made or given by a Governmental Authority or otherwise), necessary to own and operate its properties and to carry on its business as presently conducted and as presently planned to be conducted, except where failure to do so does not, and would not be likely to, have a Material Adverse Effect. 6.07. AVOIDANCE OF OTHER CONFLICTS. The Borrower shall not, and shall not permit any of its Subsidiaries to, violate or conflict with, be in violation of or conflict with, or be or remain subject to any liability (contingent or other) on account of any violation or conflict with -43- 40 (a) any Law, (b) its certificate or articles of incorporation or by-laws (or other constituent documents), or (c) any agreement or instrument to which it or any of its Subsidiaries is a party or by which any of them or any of their respective properties may be subject or bound, except for matters of the type referred to in clauses (a) and (c) that could not, individually or in the aggregate, do not, and would not be likely to, have a Material Adverse Effect. 6.08. FINANCIAL ACCOUNTING PRACTICES. The Borrower shall, and shall cause each of its Subsidiaries to, make and keep books, records and accounts which, in reasonable detail, accurately and fairly reflect its transactions and dispositions of its assets, and maintain a system of internal accounting controls sufficient to provide reasonable assurances that (a) transactions are executed in accordance with management's general or specific authorization, (b) transactions are recorded as necessary (i) to permit preparation of financial statements in conformity with GAAP and (ii) to maintain accountability for assets, (c) access to assets is permitted only in accordance with management's general or specific authorization and (d) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. 6.09. USE OF PROCEEDS. The Borrower shall apply the proceeds of the Loans under this Agreement, together with other funds of the Borrower, to (a) payment in full on the Closing Date of all principal, interest and fees outstanding and accrued under the prior credit facilities of the Borrower referred to in Section 5.01(f), and (b) from and after the Closing Date, for general corporate purposes of the Borrower (including, to the extent otherwise consistent with this Agreement and the other Loan Documents, the making of acquisitions). The Borrower shall not use any Letters of Credit or the proceeds of any Loans directly or indirectly for any unlawful purpose, in any manner inconsistent with Section 4.12, or inconsistent with any other provision of this Agreement or any other Loan Document. 6.10. CONTINUATION OF OR CHANGE IN BUSINESS. The Borrower shall, and shall cause each of its Subsidiaries to, engage in the businesses they have engaged in during the present and preceding fiscal years and the Borrower shall not, and shall not permit any of its Subsidiaries to, engage in any business other than the financial information services business, other information services businesses and matters incidental thereto; provided, that TIMCO may continue to conduct its business in substantially the manner in which it conducts such business as of the date hereof. Without limitation of the foregoing, the Borrower shall continue to operate as a holding company and shall not conduct any material business other than holding the capital stock of Subsidiaries and matters incidental thereto. 6.11. PLANS AND MULTIEMPLOYER PLANS. (a) REQUIRED CONTRIBUTIONS. The Borrower shall, and shall cause each Subsidiary of the Borrower and Controlled Group Members to, make contributions to each Plan when due in accordance with the minimum funding requirements under ERISA and the Code applicable to such Plan and pay any required PBGC premiums as and when due for such Plan. -44- 41 (b) REQUIRED CONTRIBUTIONS TO MULTIEMPLOYER PLANS. The Borrower shall, and shall cause each Subsidiary of the Borrower and Controlled Group Members to, make contributions required to be made by it, or any of them, to each Multiemployer Plan, if any, when due in accordance with its, or any of their, obligations under any collective bargaining agreement related to such Multiemployer Plan or participation agreements applicable to such Multiemployer Plan, except those contributions the requirement of which are reasonably being contested by a Controlled Group Member provided that failure to make such contested contributions is not a violation of applicable Law and does not present a material risk of resulting in liability (contingent or other) to the Borrower or any Subsidiary of the Borrower. (c) FUNDING. The Borrower shall, and shall cause each of its Subsidiaries to, make any required contributions to any arrangements for providing retirement and/or death benefits when due, in accordance with the terms of the arrangement and/or any minimum funding requirements which are applicable to the arrangement from time to time. The Borrower shall not, nor shall it permit any of its Subsidiaries to, allow any arrangement for providing retirement and/or death benefits to become underfunded (as determined on the basis of reasonable actuarial assumptions) by an amount which, in the aggregate for all such arrangements, exceeds $10,000,000. 6.12. DISASTER RECOVERY PLAN. The Borrower shall cause each of Datastream International Limited, Disclosure Incorporated and ICV Limited to maintain in full force and effect at all times disaster recovery plans consistent with prudent practice for Persons engaged in the same or a similar business. 6.13. ANNUAL BANK MEETING. The Borrower shall hold meetings of the Lenders annually at the request of the Agent. 6.14. SEPARATE CORPORATE EXISTENCE. The Borrower acknowledges that the Lender Parties are entering into the transactions contemplated by this Agreement and the other Loan Documents in reliance upon the identity of the Subsidiaries of the Borrower as legal entities separate from the Borrower. Accordingly, the Borrower shall take, and shall cause its Subsidiaries to take, all reasonable steps to continue the identities of its Subsidiaries as separate legal entities, and to make it apparent to third Persons that its Subsidiaries are entities with assets and liabilities distinct from those of the Borrower. Without limiting the generality of the foregoing, the Borrower shall take such actions as shall be required in order that: (a) For each Subsidiary of the Borrower in which the Borrower directly owns, beneficially or of record, Shares of Capital Stock, at least one director or officer of the Borrower shall be a person who is not a director or officer of such Subsidiary. (b) The books and records of each Subsidiary of the Borrower shall be maintained separately from those of the Borrower and each of its other Subsidiaries. (c) The assets of each Subsidiary of the Borrower will be maintained in a manner that facilitates their identification and segregation from those of the Borrower and its other Subsidiaries. -45- 42 (d) The Borrower and each Subsidiary of the Borrower shall strictly observe corporate formalities. The Borrower and each of its Subsidiaries will conduct their respective businesses in their own respective names. The business and affairs of the Borrower and each Subsidiary shall be managed by or under the direction of the board of directors of such Person. (e) Funds or other assets of Subsidiaries of the Borrower will not be commingled with those of the Borrower and its other Subsidiaries (it being understood that such restriction shall not be interpreted to forbid intercompany loans and Advances that have been properly documented and accounted for on the books and records of each relevant entity, made in compliance with corporate formalities, and otherwise made in compliance with this Agreement and the other Loan Documents). (f) The operating expenses of the Borrower and each Subsidiary of the Borrower will be paid by such Person. To the extent, if any, that the Borrower and any of its Subsidiaries share items of expenses, such expenses will be allocated to the extent practical on the basis of actual use or the value of services rendered, and otherwise on a basis reasonably related to actual use or the value of services rendered, and each such Person shall pay its allocated share of such expenses on a current basis. To the extent, if any, that the Borrower and any of its Subsidiaries provides services to one another, the provider shall be compensated by the recipient on a current basis at fair and reasonable rates. To the extent, if any, that any consolidated or combined tax return is filed including any of the Borrower or its Subsidiaries, each such Person shall pay or be paid, as the case may be, on a current basis an equitable share of the consolidated tax payment or refund associated therewith. (g) Annual financial statements of the Borrower which are consolidated to include its Subsidiaries will contain notes clearly stating that each such Subsidiary is a corporate or similar entity separate from the Borrower and its other Subsidiaries, and that the stock of each direct Subsidiary of the Borrower has been pledged to secure the Obligations. 6.15. ADDITIONAL SECURITY. (a) GENERAL. Promptly upon the request of the Agent from time to time, the Borrower shall as promptly as practicable (and in any case within 30 days after such request, or such longer period as the Agent may specify in writing) further secure the Obligations by granting to the Collateral Agent a valid and perfected Lien, prior to all other Liens except Permitted Liens, on such of its properties from time to time as the Agent may designate (except for property subject to a Permitted Lien as to which the Borrower is required to obtain the consent of the holder of such Permitted Lien before granting such a Lien to the Collateral Agent and as to which the Borrower is unable, using reasonable efforts, to obtain such consent). In connection therewith, the Borrower shall (i) execute and deliver to the Agent such mortgages, security agreements and other agreements and instruments, and do such other acts and things as shall be necessary or, in the judgment of the Agent, appropriate to grant to the Collateral Agent a valid and perfected Lien on such property, prior to all other Liens except Permitted Liens, and (ii) procure and deliver to the Agent such other items (including but not limited to lien searches, title insurance policies, surveys, environmental audits, insurance endorsements and opinions of counsel), and do such other acts and things, as the Agent may request in connection with the foregoing. All of the -46- 43 foregoing shall be in form and substance satisfactory to the Agent. From time to time as requested by the Agent, the Borrower shall use reasonable efforts to (w) obtain the consent of any Person whose consent is necessary or advisable to the creation, perfection or maintenance of any such Lien, including but not limited to that of any lessor whose consent may be required in connection with any such Lien on any leasehold interest, and to obtain nondisturbance and like agreements from mortgagees and other holders of superior rights in the property subject to any such leasehold interest, (x) obtain waivers of Liens from such landlords and mortgagees and from other Persons described in Section 6.03(b) hereof, (y) with respect to securities accounts, commodity accounts, deposit accounts or similar interests, obtain consent agreements from each securities intermediary, commodity intermediary, depository bank or similar person, satisfactory in form and substance to the Agent, which shall include provisions giving the Collateral Agent sole dominion and control over such interest upon the giving of notice by the Collateral Agent (it being understood that the related security agreement shall provide that the Collateral Agent may exercise such sole dominion and control upon the occurrence and during the continuance of an Event of Default), and (z) do such other acts and things as the Agent may deem appropriate to enhance, preserve or protect the security for the Obligations. (b) NOTICE OF CERTAIN REALTY TRANSACTIONS. The Borrower shall promptly give notice to the Agent of any acquisition by the Borrower of any interest or interests in real property (fee, leasehold or otherwise) or fixtures having a fair market value, individually or in the aggregate, in excess of $5,000,000 (except for leasehold interests having a term, including all options exercisable by the lessee, less than 5 years). 6.16. INTEREST RATE PROTECTION. (a) REQUIRED HEDGE. The Borrower shall, promptly (and in any event not later than 60 days) after the first date on or after the Closing Date on which the three-month Euro-Rate (as determined by the Agent) is at least 8.00% on at least ten of the 30 days immediately preceding such date, enter into an Interest Rate Hedging Agreement having an effective rate and other terms and conditions satisfactory to the Agent, for notional principal amounts and tenors sufficient to hedge at least 65% of the scheduled outstanding principal amount of the Indebtedness under the Term Loan Agreement for the period from the effective date of such Interest Rate Hedging Agreement through the fifth anniversary thereof (or, if earlier, the Term Loan Maturity Date). The Borrower shall thereafter select interest rate options under the Term Loan Agreement that match, in time and amount, as closely as may be the terms of the rate hedge represented by such Interest Rate Hedging Agreement. (b) SECURING THE REQUIRED HEDGE. If the Borrower so requests, the Agent shall consent to a Swap Party Supplement to the Collateral Agency Agreement whereby the Interest Rate Hedging Agreement referred to in Section 6.16(a) hereof shall be deemed a Swap Agreement entitled to the benefits of the Collateral Agency Agreement, but only if the following conditions are met: (i) the counterparty to such Interest Rate Hedging Agreement is a Lender, (ii) the "Swap Shared Security Cap" set forth in such Swap Party Supplement is, in the good faith judgment of the Agent, not more than 110% of the credit equivalent exposure represented by such Swap Agreement (calculated in accordance with the Agent's ordinary methods), and (iii) the Borrower provides the Agent with such contemporaneous bringdown Lien searches as the Agent may request, the results of which shall be satisfactory to the Agent. -47- 44 (c) EXISTING RATE HEDGES, ETC. To the extent otherwise consistent with this Agreement and the other Loan Documents, the Borrower may enter into Interest Rate Hedging Agreements in advance of the date on which it is required to do so under Section 6.16(a), and to the extent that such Interest Rate Hedging Agreements satisfy the requirements of Sections 6.16(a) and 6.16(b) the Agent may enter into a Swap Party Supplement to the Collateral Agency Agreement with respect to such Interest Rate Hedging Agreements. In the event that the Borrower becomes obligated to enter into Interest Rate Hedging Agreements under Section 6.16(a), any then-existing Interest Rate Hedging Agreements to which Borrower is party and which otherwise satisfy the requirements of Section 6.16(a) shall be counted toward satisfaction of the Borrower's obligations under Section 6.16(a), to the extent of the notional amounts and tenors of such then-existing Interest Rate Hedging Agreements. Nothing in Section 6.16(b) shall be construed to forbid the Agent from consenting to a Swap Party Supplement relating to Interest Rate Hedging Agreements if the conditions set forth in Section 6.16(b) are satisfied, even if such Interest Rate Hedging Agreements in the aggregate exceed in amount or time the minimum requirements set forth in Section 6.16(a). ARTICLE VII NEGATIVE COVENANTS The Borrower hereby covenants to each Lender Party as follows: 7.01. FINANCIAL COVENANTS. (a) CONSOLIDATED NET WORTH (ADJUSTED). As of the end of each fiscal quarter of the Borrower ending on or after December 31, 1996, Consolidated Net Worth (Adjusted) shall not be less than the applicable amount specified below:
Consolidated Net Worth (Adjusted) From and including To and including shall not be less than ------------------ ---------------- ---------------------- December 31, 1996 December 30, 1997 $425,000,000 December 31, 1997 December 30, 1998 $450,000,000 December 31, 1998 December 30, 1999 $475,000,000 Thereafter $500,000,000
(b) CONSOLIDATED FIXED CHARGE COVERAGE RATIO. As of the end of each fiscal quarter of the Borrower ending on or after December 31, 1996, the Consolidated Fixed Charge Coverage Ratio for the period of four consecutive fiscal quarters ending on the last day of such fiscal quarter, considered as a single accounting period, shall not be less than the applicable amount set forth below.
Fiscal quarter ending on Consolidated Fixed Charge Coverage Ratio a date in the following for the four fiscal quarters ending period (inclusive) on such date shall not be less than ------------------ ----------------------------------- December 31, 1996 through December 31, 1997 1.75
-48- 45
January 1, 1998 through December 31, 1998 2.00 January 1, 1999 through December 31, 1999 2.25 Thereafter 2.50
(c) CONSOLIDATED FUNDED DEBT RATIO (ADJUSTED). As of the end of each fiscal quarter of the Borrower ending on or after December 31, 1996, the Consolidated Funded Debt Ratio (Adjusted) for the period of four consecutive fiscal quarters ending on the last day of such fiscal quarter, considered as a single accounting period, shall not be greater than the applicable amount set forth below.
Fiscal quarter ending on Consolidated Funded Debt Ratio (Adjusted) a date in the following for the four fiscal quarters ending period (inclusive) on such date shall not be greater than ------------------ -------------------------------------- December 31, 1996 through December 30, 1997 5.50 December 31, 1997 through December 30, 1998 5.00 December 31, 1998 through December 30, 1999 4.00 Thereafter 3.00
7.02. LIENS. The Borrower shall not, and shall not permit any Subsidiary of the Borrower to, at any time create, incur, assume or permit to exist any Lien on any of its property (now owned or hereafter acquired), or agree, become or remain liable (contingently or otherwise) to do any of the foregoing, except for the following (referred to herein as "Permitted Liens"): (a) Liens pursuant to the Shared Security Documents in favor of the Collateral Agent for the benefit of the Secured Parties to secure the Obligations; (b) Liens arising from taxes, assessments, charges or claims described in Sections 6.03(a) and 6.03(b), to the extent permitted to remain unpaid under such Section 6.03; (c) Deposits or pledges of cash or securities in the ordinary course of business to secure (i) workmen's compensation, unemployment insurance or other social security obligations, (ii) performance of bids, tenders, trade contracts (other than for payment of money) or leases, (iii) stay, surety or appeal bonds, or (iv) other obligations of a like nature incurred in the ordinary course of business; (d) Judgment liens fully bonded pending appeal; (e) Liens by the Borrower or a Subsidiary of the Borrower on property securing all or part of the purchase price thereof and Liens (whether or not assumed) existing on property at the time of purchase thereof by the Borrower or a Subsidiary of the Borrower, provided that: (i) such Lien is created before or substantially simultaneously with the purchase of such property in the ordinary course of business by the Borrower or such Subsidiary (or is a Lien securing successor obligations incurred to extend or refinance predecessor obligations allowed under this Section 7.02(e), provided that in each case the -49- 46 successor obligation is an obligation of the same Person subject to the predecessor obligation, is not greater than (and is not otherwise on terms less advantageous than) the predecessor obligation, and the Lien securing the successor obligation does not extend to any property other than that subject to the Lien securing the predecessor obligation); (ii) such Lien is confined solely to the property so purchased, improvements thereto and proceeds thereof; (iii) the aggregate amount secured by all such Liens on any particular property at the time purchased by the Borrower or such Subsidiary, as the case may be, shall not exceed the lesser of the purchase price of such property or the fair market value of such property at the time of purchase thereof ("purchase price" for this purpose including the amount secured by each such Lien thereon whether or not assumed); and (iv) the obligation secured by such Lien is Indebtedness permitted under Section 7.03(e) hereof; (f) Liens in favor of the United States Government which arise in the ordinary course of business resulting from progress payments or partial payments under United States Government contracts or subcontracts thereunder; (g) Rights arising or reserved to the lessor under any Capitalized Lease Obligations permitted by Section 7.03(e) hereof; (h) Zoning restrictions, easements, minor restrictions on the use of real property, minor irregularities in title thereto and other minor Liens that do not secure the payment of money or the performance of an obligation and that do not in the aggregate materially detract from the value of a property or asset to, or materially impair its use in the business of, the Borrower or such Subsidiary; (i) Liens existing on the Closing Date and listed on Schedule 7.02 hereof (but not any extension, renewal or replacement Liens); and (j) Liens on property of TIMCO to secure payment of reimbursement obligations of TIMCO with respect to the TIMCO Bonds Letter of Credit, and Liens on property of TIMCO securing Indebtedness of TIMCO constituting a refinancing of the TIMCO Bonds and the TIMCO Lease permitted by Section 7.03(j) hereof. Notwithstanding the foregoing, "Permitted Lien" in respect of the Borrower or any Subsidiary of the Borrower shall in no event include (x) any Lien imposed by, or required to be granted pursuant to, ERISA, the Code or any Environmental Law, (y) except as provided in Section 7.02(a) hereof, any Lien on the Shared Collateral Account or any other account (custodial, deposit or other) maintained by or with the Collateral Agent pursuant to the Shared Security Documents, or any other investment property or deposit account (as such terms are defined in the Uniform Commercial Code), or (z) except as provided in Section 7.02(a) hereof, any Lien on Shares of Capital Stock of, or obligations owed by, a Subsidiary of the Borrower. -50- 47 7.03. INDEBTEDNESS. The Borrower shall not, and shall not permit any Subsidiary of the Borrower to, at any time create, incur, assume or permit to exist any Indebtedness, or agree, become or remain liable (contingently or otherwise) to do any of the foregoing, except: (a) Indebtedness of the Borrower in favor of the Lender Parties pursuant to this Agreement and the other Loan Documents; (b) Indebtedness of the Borrower under the Term Loan Agreement, in aggregate principal amount not to exceed $225,000,000 (but not any extensions, renewals or refinancings of any thereof); (c) Indebtedness of the Borrower or any of its Subsidiaries not exceeding $8,250,000 in principal amount, issued in connection with the acquisition by the Borrower or a Subsidiary of all of the Shares of Capital Stock of ICV (such Indebtedness being referred to herein as the "ICV Notes"); and Indebtedness of the Borrower under the Note Backup Agreement and the letters of credit subject thereto; (d) Indebtedness of the Borrower under the Senior Notes, in aggregate principal amount not to exceed $112,000,000 (but not any extensions, renewals or refinancings of any thereof); (e) Indebtedness constituting Capitalized Lease Obligations of the Borrower and its Subsidiaries incurred in the ordinary course of business from time to time, and Indebtedness of the Borrower and its Subsidiaries secured by Liens described in Section 7.02(e) on property used in the ordinary course of business of the Borrower or such Subsidiary from time to time; provided, that the aggregate amount of Indebtedness described in this Section 7.03(e) shall not exceed $20,000,000 at any time; (f) Other Indebtedness of the Borrower and its Subsidiaries not exceeding $30,000,000 aggregate principal amount at any time outstanding; (g) Current accounts payable of the Borrower or any of its Subsidiaries on normal trade terms to trade creditors arising out of purchases of goods or services in the ordinary course of business; (h) Indebtedness of the Borrower pursuant to any Interest Rate Hedge Agreement required to be entered into pursuant to Section 6.16(a) hereof; and Indebtedness of the Borrower or any of its Subsidiaries under any other interest rate or currency swap, cap, floor, collar, future, forward or option agreement, or similar interest rate or currency protection agreement, entered into for the purpose of hedging and not for purposes of speculation (and not structured to contain an embedded loan); (i) Indebtedness constituting intercompany loans and Advances permitted by Sections 7.05(d), 7.05(e), 7.05(h) and 7.05(i) hereof; -51- 48 (j) Indebtedness of TIMCO constituting a letter of credit issued for its account not exceeding $12,600,000 in stated amount, which letter of credit effectively secures the TIMCO Bonds; any extension, renewal or refinancing of such letter of credit, provided, however, that the stated amount thereof is not increased and TIMCO remains the account party with respect thereto (such letter of credit, together with any such extension, renewal or refinancing letter of credit, being referred to herein as the "TIMCO Bonds Letter of Credit"); and any Indebtedness of TIMCO which amends, renews or refinances (collectively, "refinances") the TIMCO Bonds, the TIMCO Lease and the TIMCO Bonds Letter of Credit, provided, however, that after giving effect to such refinancing, (i) the principal amount of Indebtedness is not increased, (ii) neither the stated maturity nor the average life of the Indebtedness is reduced, and (iii) TIMCO remains the obligor on such refinancing Indebtedness; and (k) Indebtedness for borrowed money of Primark Economics or any of its Subsidiaries not exceeding $6,000,000 in aggregate principal amount at any time outstanding. 7.04. GUARANTIES, INDEMNITIES, ETC. The Borrower shall not, and shall not permit any Subsidiary of the Borrower to, be or become subject to or bound by any Guaranty Equivalent, or agree, become or remain liable (contingently or otherwise) to do any of the foregoing, except: (a) Contingent liabilities arising from the endorsement of negotiable or other instruments for deposit or collection or similar transactions in the ordinary course of business; (b) Indemnities by the Borrower or a Subsidiary of the liabilities of its directors, officers and employees in their capacities as such as permitted by Law; (c) Guaranty Equivalents existing on the Closing Date and listed in Schedule 7.04 hereof (but not extensions, renewals or refinancings thereof or of any associated Assured Obligation); provided, that this Section 7.04(c) shall not apply to any Guaranty Equivalent as to which the Deemed Obligor is, on the Closing Date, a Subsidiary of the Borrower if such Subsidiary thereafter ceases to be a Subsidiary of the Borrower; (d) Guaranty Equivalents by the Borrower or a Subsidiary constituting usual and customary indemnities with respect to liabilities (other than Indebtedness) in connection with a disposition of stock or assets by the Borrower or such Subsidiary; (e) Other Guaranty Equivalents by the Borrower or a Subsidiary of the Borrower from time to time of obligations of a Substantially Owned Subsidiary of the Borrower, provided that the Deemed Obligor in respect of such Guaranty Equivalent is a Substantially Owned Subsidiary of the Deemed Guarantor; (f) Other Guaranty Equivalents by a Borrower or a Subsidiary of the Borrower from time to time, provided that the sum of (i) the maximum aggregate potential obligation of the Borrower or any Subsidiary of the Borrower under Guaranty Equivalents described in this Section 7.04(f), plus (ii) the aggregate amount of all payments made by the Borrower and its Subsidiaries after the date hereof under Guaranty Equivalents described in this Section 7.04(f), shall not exceed $2,000,000; and -52- 49 (g) Obligations of a Subsidiary of the Borrower as general partner of a partnership permitted under Sections 7.05(g) or 7.05(j). 7.05. LOANS, ADVANCES AND INVESTMENTS. The Borrower shall not, and shall not permit any Subsidiary of the Borrower to, at any time make or permit to exist or remain outstanding any loan or Advance to, or purchase, acquire or own (beneficially or of record) any Shares of Capital Stock of, any stock, bonds, notes or securities of, or any partnership interest (whether general or limited), membership interest or beneficial interest in, or any other debt or equity interest in, or make any capital contribution to or other investment in, any other Person, or agree, become or remain liable (contingently or otherwise) to do any of the foregoing, except: (a) Receivables owing to the Borrower or any Subsidiary of the Borrower arising from performance of services and sales of goods under usual and customary terms in the ordinary course of business; (b) Loans and Advances extended by the Borrower or any Subsidiary of the Borrower to contractors or suppliers (excluding contractors or suppliers that are Affiliates of the Borrower) under usual and customary terms in the ordinary course of business and in amount at any one time outstanding not exceeding $1,000,000 (or the equivalent thereof in one or more foreign currencies) in the aggregate; (c) Advances to officers and employees of the Borrower and its Subsidiaries in the ordinary course of business, in amounts at any time outstanding not exceeding $1,000,000 (or the equivalent thereof in one or more foreign currencies) to any one officer or employee and $2,000,000 (or the equivalent thereof in one or more foreign currencies) in the aggregate; provided, however, that for purposes of this Section 7.05(c) only, the outstanding amount of Advances shall not be deemed to include amounts secured by perfected liens on shares of the publicly-traded common stock of the Borrower, to the extent of the market value of such common stock (as determined at least quarterly, based on publicly-available quotations); (d) Loans and Advances by a Subsidiary of the Borrower to the Borrower; (e) Ownership of Shares of Capital Stock of, and capital contributions, loans and Advances to, Corporations that are Wholly Owned Subsidiaries of the Borrower (other than a Broker-Dealer); (f) (i) Ownership of Shares of Capital Stock of a Corporation that is a Wholly Owned Subsidiary of the Borrower that is a Broker-Dealer, as owned on the Closing Date, and (ii) capital contributions by the Borrower or its Subsidiaries from time to time to such Subsidiary, so long as such Subsidiary does not at the time of such capital contribution, or immediately thereafter and after giving effect thereto, have net capital (calculated in accordance with regulatory standards) in excess of 150% of the minimum capital required by Law; (g) (i) Ownership of general partnership interests and other equity interests in the Worldscope Entities representing an 80% or greater interest in the capital, profits and losses of -53- 50 each of the Worldscope Entities, as owned on the Closing Date, and (ii) capital contributions to and acquisition of additional equity interests in the Worldscope Entities from time to time after the Closing Date, and loans and Advances to the Worldscope Entities from time to time; (h) Acquisition and ownership of Shares of Capital Stock of Corporations that are Subsidiaries of the Borrower other than Wholly Owned Subsidiaries of the Borrower, and capital contributions, loans and Advances to Subsidiaries of the Borrower other than Wholly Owned Subsidiaries of the Borrower, provided, that the aggregate amount of all such acquisitions and capital contributions made under this Section 7.05(h) after the Closing Date, plus the aggregate outstanding principal amount of all such loans and Advances made under this Section 7.05(h), shall not at any time exceed $10,000,000; (i) Acquisition and ownership by the Borrower or its Subsidiaries of equity interests in Primark Economics representing a 20% or greater interest in the capital, profits and losses of Primark Economics, and capital contributions, convertible debt and demand loans by the Borrower or its Subsidiaries to Primark Economics from time to time; provided, that (i) the sum of the aggregate amount of all consideration paid for such equity interests and convertible debt plus the aggregate amount of all such capital contributions (in each case whether before or after the Closing Date), plus the aggregate outstanding principal amount of all such demand loans, shall not at any time exceed $5,000,000, and (ii) no such acquisitions, capital contributions or loans may be made unless the Borrower continues to own (directly or indirectly) at least a 20% interest (and, assuming full conversion of convertible loans due to the Borrower or its Subsidiaries, a 51% or greater interest) in the capital, profits and losses of Primark Economics; (j) Partnerships and joint ventures of which all partners, participants and other Persons having ownership interests therein are Wholly Owned Subsidiaries of the Borrower; (k) Other loans, Advances and investments, not to exceed $3,000,000 in the aggregate; and (l) Cash Equivalent Investments. 7.06. DIVIDENDS AND RELATED DISTRIBUTIONS. The Borrower shall not, and shall not permit any Subsidiary to, declare or make any Stock Payment, or agree, become or remain liable (contingently or otherwise) to do any of the foregoing, except as follows: (a) The Borrower may from time to time repurchase for cash shares of its common stock of a series publicly traded, subject to the following conditions: (i) Repurchases under this Section 7.06(a) shall not exceed $25,000,000 from and after the Closing Date; (ii) No Event of Default or Potential Default shall exist on the date of such repurchase, or immediately thereafter and after giving effect to such repurchase; -54- 51 (iii) The Borrower would have been in compliance with Sections 7.01(a) and 7.01(c) on the last day of the fiscal quarter ending most recently before such repurchase, after giving effect on a pro forma basis to such repurchase and to any incurrence of Indebtedness after such day, as if such repurchase and incurrence had occurred on such day; and (iv) The Agent shall receive, with a copy for each Lender, not later than the Business Day after the date such repurchase is made, a certificate signed by a Responsible Officer of the Borrower, dated such repurchase date, describing such dividend, certifying that such repurchase is in compliance with the provisions of this Section 7.06(a), and including a statement in reasonable detail of the information and calculations necessary to establish compliance with this Section 7.06(a); (b) A Subsidiary of the Borrower may declare and pay dividends or other distributions with respect to its Shares of Capital Stock, provided, that such dividend or other distribution is made on a pro rata basis, consistent with the ownership interests in such Shares of Capital Stock, to the owners of such shares; and (c) The Borrower may make Stock Payments if such Stock Payment is paid solely in Shares of Capital Stock (or warrants, options or rights therefor) of the Borrower. The Borrower shall not declare any dividend payable later than 60 days after declaration, and the Borrower shall not permit any Subsidiary to declare any dividend payable later than 15 days after declaration. 7.07. SALE-LEASEBACKS. The Borrower shall not, and shall not permit any Subsidiary to, at any time enter into or permit to remain in effect any transaction to which the Borrower or such Subsidiary is a party involving the sale, transfer or other disposition by the Borrower or any Subsidiary of any property (now owned or hereafter acquired), with a view directly or indirectly to the leasing back of any part of the same property or any other property used for the same or a similar purpose or purposes, or agree, become or remain liable (contingently or otherwise) to do any of the foregoing, except for transactions existing on the date hereof and listed in Schedule 7.07 hereof (but not extensions, renewals or refinancings thereof). 7.08. MERGERS, ETC. The Borrower shall not, and shall not permit any Subsidiary of the Borrower to, directly or indirectly, (w) merge with or into or consolidate with any other Person, or (x) liquidate, Wind-Up, dissolve or divide, (y) acquire all or any substantial portion of the properties of any going concern or going line of business (whether or not constituting a distinct legal entity), or (z) acquire all or any substantial portion of the properties of any other Person, or all or any substantial portion of the Shares of Capital Stock of any other Person which is organized as a Corporation, or all or any substantial portion of any equity interest in any other Person which is not organized as a Corporation, or agree, become or remain liable (contingently or otherwise) to do any of the foregoing, except for the following (referred to herein as "Permitted Mergers"): (a) A Subsidiary of the Borrower may merge with or into or consolidate with, or acquire all or any substantial portion of the properties of, or liquidate or dissolve into, any other -55- 52 Subsidiary of the Borrower, if the acquiring, surviving or new Corporation shall be a Wholly Owned Subsidiary of the Borrower; and (b) The Borrower, or a Subsidiary of the Borrower, may make acquisitions of the types referred to in the foregoing clauses (y) and (z) of properties of Persons other than a Subsidiary of the Borrower, consistent with the other provisions of this Agreement and the other Loan Documents, provided that the aggregate Adjusted Acquisition Consideration in connection with all such acquisitions made after the Closing Date (and specifically excluding the acquisition of WEFA, if made on or before the Closing Date) shall not exceed the sum of $75,000,000 plus the amount, if any, of aggregate cash proceeds (net of underwriting discounts, fees and other transaction costs) received by the Borrower after the Closing Date from issuance of Shares of Capital Stock of the Borrower (or options or warrants therefor). 7.09. DISPOSITIONS OF PROPERTIES. The Borrower shall not, and shall not permit any Subsidiary to, sell, convey, assign, lease, transfer, abandon or otherwise dispose of, voluntarily or involuntarily, directly or indirectly, any of its properties, now existing or hereafter acquired, or agree, become or remain liable (contingently or otherwise) to do any of the foregoing, except: (a) Sales of inventory, licenses (as licensor) of software or other intellectual property, all in the ordinary course of business; (b) Disposition of equipment and other operating assets which are obsolete or no longer useful in the business of the Borrower or such Subsidiary, as the case may be; (c) Lease or sublease of unoccupied office space; (d) Dispositions in Permitted Mergers, and other dispositions between Wholly Owned Subsidiaries of the Borrower; (e) Disposition outside the ordinary course of business of all (but not less than all) of the Shares of Capital Stock of TIMCO, or substantially all the assets of TIMCO (but not less than substantially all of such assets), subject to the following conditions: (i) any such disposition of property is for not less than the Fair Market Value of the property disposed of (as determined in good faith by the Board of Directors of the transferor, whose determination shall be evidenced by a written resolution of such Board), and the consideration received by the Borrower or the relevant Subsidiary in respect of such disposition consists entirely of cash or Cash Equivalent Investments; and (ii) in the case of disposition of Shares of Capital Stock of, or assets of, TIMCO, TIMCO shall be conducting substantially the business conducted by it on the Closing Date, and shall not be conducting any different or additional business or have any material assets in addition to those it had on the Closing Date; and -56- 53 (f) Other dispositions of property from time to time for not less than its Fair Market Value, provided that dispositions under this Section 7.09(f) shall not exceed $5,000,000 in the aggregate in any fiscal year. Without limitation of the foregoing, it is understood that the following are dispositions of property subject to this Section 7.09: any disposition of accounts, chattel paper or general intangibles, with or without recourse; any disposition of any leasehold interest; and any disposition of any Shares of Capital Stock in or Indebtedness of any Subsidiary. The Borrower shall not, and shall not permit any Subsidiary to sell, convey, assign, transfer or otherwise dispose of, voluntarily or involuntarily, any of its accounts, chattel paper, general intangibles or other financial assets with or without recourse, in any factoring, structured financing, or other transaction having the practical effect, directly or indirectly, of a financing, whether or not such transaction is in the form of a "true sale" of such financial assets by the Borrower or such Subsidiary. 7.10. DEALINGS WITH AFFILIATES. The Borrower shall not, and shall not permit any Subsidiary of the Borrower to, enter into or carry out any transaction with (including, without limitation, purchase or lease property or services from, sell or lease property or services to, loan or advance to, or enter into, permit to remain in existence or amend any contract, agreement or arrangement with) any Affiliate of the Borrower, directly or indirectly, or agree, become or remain liable (contingently or otherwise) to do any of the foregoing, except: (a) Transactions between (i) on the one hand, any Affiliate of the Borrower, and (ii) on the other hand, the Borrower or any of its Subsidiaries, in good faith and on fair and reasonable terms; and (b) Compensation of directors, officers, employees and consultants of the Borrower and its Subsidiaries for services rendered in such capacity in good faith and on fair and reasonable terms, which terms (in the case of compensation under employment contracts entered into after the Closing Date will be approved by a majority of the board of directors of such Borrower or Subsidiary (including a majority of the directors having no direct or indirect interest in such transaction). 7.11. LIMITATIONS ON MODIFICATION OF CERTAIN AGREEMENTS AND INSTRUMENTS. (a) SENIOR NOTES. The Borrower shall not amend, modify or supplement the terms or provisions contained in, or applicable to, the Senior Notes, the Senior Note Indenture, or any agreement or instrument evidencing or applicable to any of the foregoing. (b) [Reserved] (c) TERM LOAN AGREEMENT. The Borrower shall not amend, modify or supplement the Term Loan Agreement or its obligations thereunder, in any way that would (i) increase the principal amount thereof, or require payments on account of principal to be made (by way of scheduled amortization, mandatory prepayment or otherwise) earlier or in greater amount than is required under the terms of the Term Loan Agreement as constituted on the Closing Date, (ii) increase the rate or shorten the date for payment of interest thereon, or (iii) require payment of any fee or other amount not -57- 54 provided for under the Term Loan Agreement as constituted on the Closing Date. In the event that the Agent hereunder is not also the "Agent" under the Term Loan Agreement, the Borrower shall promptly (and in any event within five days) give the Agent, with a copy for each Lender, a copy of any amendment, modification or supplement to the Term Loan Agreement. (d) NOTE BACKUP AGREEMENT. The Borrower shall not amend, modify or supplement the Note Backup Agreement (as constituted on the Closing Date) or its obligations thereunder, in any way that would (i) increase the principal amount thereof (including the aggregate stated amount of letters of credit issued thereunder), or require payments on account of principal (including reimbursement of draws under letters of credit issued thereunder) to be made earlier or in greater amount than is required under the terms of the Note Backup Agreement as constituted on the Closing Date, or (ii) increase the rate or shorten the date for payment of interest thereon. In the event that the Agent hereunder is not also the "Agent" under the Note Backup Agreement, the Borrower shall promptly (and in any event within five days) give the Agent, with a copy for each Lender, a copy of any amendment, modification or supplement to the Note Backup Agreement. (e) [Reserved] 7.12. LIMITATION ON PAYMENTS ON CERTAIN OBLIGATIONS. The Borrower shall not, and shall not permit any Subsidiary to, directly or indirectly, pay, prepay, purchase, redeem, retire, defease or acquire, or otherwise make any payment (on account of principal, interest, premium or otherwise) of, any obligation under or evidenced by the Senior Notes, except that the Borrower may (x) pay principal and interest on the Senior Notes as and when expressly required to do so by the mandatory terms of the Senior Notes, and (y) purchase Senior Notes as and when expressly required to do so by the mandatory terms of Sections 4.12 and 4.13 of the Senior Note Indenture (it being understood that the foregoing may nevertheless give rise to an Event of Default). 7.13. LIMITATION ON OTHER RESTRICTIONS ON LIENS, DIVIDEND RESTRICTIONS ON SUBSIDIARIES, ETC. The Borrower shall not, and shall not permit any Subsidiary to, (x) enter into, become or remain subject to any agreement or instrument to which the Borrower or such Subsidiary is a party or by which any of them or any of their respective properties (now owned or hereafter acquired) may be subject or bound that would (i) prohibit the grant of any Lien upon any of its properties (now owned or hereafter acquired), or (ii) restrict or prohibit the transfer or disposition of any of its properties (now owned or hereafter acquired), or require it to dispose of or apply the proceeds of any such disposition in a specified manner, or (y) be or become subject to any restriction of any nature (whether arising by operation of Law, by agreement, by its certificate or articles of incorporation, by-laws or other constituent documents, or otherwise) on the right of the Borrower or such Subsidiary from time to time (i) in the case of a Subsidiary, to declare and pay Stock Payments with respect to Shares of Capital Stock owned by the Borrower or any Subsidiary of the Borrower, (ii) in the case of the Borrower or any Subsidiary of the Borrower, to pay any obligations from time to time owed to the Borrower or any Subsidiary of the Borrower, or (iii) in the case of the Borrower or any Subsidiary of the Borrower, make loans or advances to the Borrower or any Subsidiary of the Borrower, -58- 55 except: (a) the Credit Facilities; (b) the Senior Notes and the Senior Note Indenture; (c) with respect to the foregoing clause (x), non-assignment provisions of any executory contract or software or programs or of any lease by the Borrower or such Subsidiary as lessee; (d) with respect to the foregoing clause (x), restrictions on property subject to a Permitted Lien in favor of the holder of such Permitted Lien; (e) restrictions with respect to TIMCO imposed pursuant to an agreement entered into for sale or disposition (which sale or disposition is not in violation of this Agreement or any other Loan Document) of all or substantially all of the Shares of Capital Stock or assets of such Subsidiary; provided, that such restriction, by its terms, terminates on the earlier of the termination of such agreement or the consummation of such agreement, and is agreed to in good faith; and (f) in the case of the foregoing clause (y), legal restrictions of general applicability under the corporation or similar law under which the Borrower or such Subsidiary is incorporated, fraudulent conveyance or similar laws or general applicability for the benefit of creditors generally, and other legal restrictions of general applicability to similarly situated business corporations; and (g) in the case of subclause (ii) of the foregoing clause (x), restrictions on transfer of property arising in the ordinary course of business; provided, that such restrictions do not directly or indirectly secure any obligation of the Borrower or such Subsidiary to pay money or to perform an obligation, and do not in the aggregate materially detract from the value of a property or asset to, or materially impair its use in the business of, the Borrower or such Subsidiary. 7.14. LIMITATION ON OTHER RESTRICTIONS ON AMENDMENT OF THE LOAN DOCUMENTS, ETC. The Borrower shall not, and shall not permit any Subsidiary of the Borrower to, enter into, become or remain subject to any agreement or instrument to which the Borrower or such Subsidiary is a party or by which any of them or any of their respective properties (now owned or hereafter acquired) may be subject or bound that would prohibit or require the consent of any Person to any amendment, modification or supplement to any of the Loan Documents, except: (a) the Loan Documents, and (b) provisions in each of the other Credit Facilities no more restrictive than those in such other Credit Facility, respectively, as constituted on the Closing Date. 7.15. LIMITATION ON CERTAIN BENEFIT LIABILITIES. The Borrower shall not, and shall not permit any Subsidiary of the Borrower or any Controlled Group Member to, become subject to Primark Group Benefits Exposures in excess of $20,000,000 in the aggregate for all such Persons. As used herein, the term "Primark Group Benefits Exposures" shall mean the sum of the maximum potential -59- 56 liabilities (direct, contingent or other) of the Borrower and its Subsidiaries and the Controlled Group Members in connection with the following: (a) withdrawal liability (within the meaning of Section 4201 of ERISA) from any Multiemployer Plan, whether or not such liability has yet been triggered as a result of a withdrawal; (b) contributions due and unpaid with respect to a Multiemployer Plan; (c) the "amount of unfunded benefit liabilities" (within the meaning of Section 4001(a)(18) of ERISA) under any Plan, whether or not such liability has yet been triggered as a result of a termination of such Plan; (d) excise taxes assessed in connection with all of the above or otherwise in connection with any Plan; (e) Postretirement Benefit Obligations of the Borrower, any Subsidiary of the Borrower or any Controlled Group Member; and (f) any other liability (contingent or other) in connection with a Plan or Multiemployer Plan which represent a material risk that it may result in a Lien attaching to assets of the Borrower or any Subsidiary of the Borrower, without regard to any minimum amount required by Law to cause such Lien to attach. 7.16. FISCAL YEAR. The Borrower shall maintain a fiscal year beginning on each January 1 and ending on the following December 31, divided into fiscal quarters ending on the last day of each March, June, September and December. ARTICLE VIII DEFAULTS 8.01. EVENTS OF DEFAULT. An "Event of Default" shall mean the occurrence or existence of one or more of the following events or conditions (for any reason, whether voluntary, involuntary or effected or required by Law): (a) The Borrower shall fail to pay when due principal of any Loan, any Letter of Credit Reimbursement Obligation, or make when due any required cash collateralization of outstanding Letters of Credit. (b) The Borrower shall fail to pay when due interest on any Loan, any fees, indemnity or expenses, or any other amount due hereunder or under any other Loan Document, and such failure shall have continued for a period of five Business Days. (c) Any representation or warranty made or deemed made by the Borrower in or pursuant to or in connection with any Loan Document or any transaction contemplated hereby or thereby, or any statement made by the Borrower or any Subsidiary of the Borrower or any in any financial statement, certificate, report, exhibit or document furnished by the Borrower or any Subsidiary of the Borrower to the Collateral Agent or any Lender Party pursuant to or in connection with any Loan Document or any transaction contemplated hereby or thereby, shall prove to have been false or misleading in any material respect as of the time when made or deemed made (including by omission of material information necessary to make such representation, warranty or statement not misleading). (d) The Borrower shall default in the performance or observance of any covenant contained in Article VII hereof or any of the covenants contained in Sections 2.07, 6.01(j)(i), -60- 57 6.11, 6.12, 6.14, 6.15 or 6.16 hereof, or in Sections 4.02 or 4.06 of the Borrower Pledge Agreement. (e) The Borrower shall default in the performance or observance of any other covenant, agreement or duty under this Agreement or any other Loan Document and (i) in the case of a default under Section 6.01 hereof (other than as referred to in Sections 6.01(j)(i) hereof) such default shall have continued for a period of 10 days and (ii) in the case of any other default such default shall have continued for a period of 30 days. (f) (i) The Borrower or any Subsidiary of the Borrower shall default in any payment of any amount in respect of any Cross-Default Triggering Obligation beyond any period of grace with respect thereto or, if any amount payable in respect of any Cross-Default Triggering Obligation is payable on demand, shall fail to pay such amount when demanded, or (ii) the Borrower or any Subsidiary of the Borrower shall default in the observance of any covenant, term or condition of any agreement or instrument by which any Cross-Default Triggering Obligation is created, secured or evidenced, if the effect of such default referred to in this clause (ii) is to cause, or to permit the holder or holders of any Cross-Default Triggering Obligation (or a trustee or agent on behalf of such holder or holders) to cause, all or part of such Cross-Default Triggering Obligation to become due before its otherwise stated maturity (by way of acceleration, mandatory prepayment or otherwise), or, in the case of an interest rate or currency swap, cap, collar, floor, future, forward or similar transaction, to terminate before its otherwise scheduled termination. As used in this Agreement, "Cross-Default Triggering Obligation" shall mean (A) any obligation under or in connection with any of the other Credit Facilities, any Swap Agreement, the Senior Notes or the Senior Note Indenture, (B) any obligation, as principal or as guarantor or other surety, in respect of the TIMCO Bond Order, the TIMCO Lease, any reimbursement agreement relating to the TIMCO Bonds Letter of Credit, or any other obligation referred to in Section 7.03(j) hereof, (C) any obligation (or set of related obligations), as principal or as guarantor or other surety, in respect of Indebtedness in excess of $5,000,000 (or the equivalent thereof in one or more foreign currencies) in aggregate amount, and (D) any obligation (or set of related obligations, including all obligations under a master agreement), as principal or as guarantor or other surety, in respect of any interest rate or currency swap, cap, collar, floor, future, forward or similar transactions relating to a principal or notional principal amount in excess of $5,000,000 (or the equivalent thereof in one or more foreign currencies) in aggregate amount. (g) One or more judgments for the payment of money shall have been entered against the Borrower or any Subsidiary of the Borrower, which judgment or judgments exceed $2,000,000 in the aggregate, and such judgment or judgments shall have remained undischarged and unstayed for a period of 30 consecutive days. -61- 58 (h) Any Governmental Action now or hereafter made by or with any Governmental Authority in connection with any Loan Document is not obtained or shall have ceased to be in full force and effect or shall have been modified or amended or shall have been held to be illegal or invalid, and such event or condition has, or would be likely to have, a Material Adverse Effect. (i) Any Shared Security Document shall cease to be in full force and effect; or any Lien created or purported to be created in any Shared Collateral pursuant to any Shared Security Document shall fail to be a valid, enforceable and perfected Lien in favor of the Collateral Agent for the benefit of the Secured Parties securing the Obligations, prior to all other Liens except Permitted Liens. (j) Any Loan Document or term or provision thereof shall cease to be in full force and effect (except in accordance with the express terms of such Loan Document), or the Borrower or any other party to any Loan Document shall, or shall purport to, terminate (except in accordance with the terms of such Loan Document), repudiate, declare voidable or void or otherwise contest, any Loan Document or term or provision thereof or any obligation or liability of the Borrower or such other party thereunder. (k) Any one or more Pension-Related Events referred to in subsection (b) or (e) of the definition of "Pension-Related Event" shall have occurred; or any one or more other Pension-Related Events shall have occurred which, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect. (l) The Borrower shall make, or shall be required by the terms of the Senior Note Indenture to make or to offer to make, any purchase of Senior Notes under Sections 4.12 or 4.13 of the Senior Note Indenture; or the Borrower or any of its Subsidiaries otherwise shall make or offer to make any payment on account of principal of, or any purchase, redemption, retirement, defeasance or acquisition of, any of the Senior Notes (except for principal payment in accordance with the terms thereof at the scheduled maturity thereof). (m) Any Person or group (as such term is used in Sections 13 and 14 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the rules and regulations thereunder) shall have become the direct or indirect beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act) of 35% or more of any class of voting securities of the Borrower; or any Person shall have been elected or shall have become a director of the Borrower who was not nominated and recommended for such position or elected to such position by a majority of the then-incumbent Board of Directors of the Borrower; or a "Change in Control" (as defined in the Senior Note Indenture as constituted on the Closing Date shall have occurred (without regard to any subsequent amendment, modification or supplement to, or termination or expiration of, the Senior Note Indenture). (n) A Control-Related Event shall have occurred, and the Required Lenders shall have determined in good faith that such Control-Related Event has or would be likely to have a Material Adverse Effect (by reason of suspension, withdrawal or impairment of any security -62- 59 clearance of the Borrower or any of its Subsidiaries, or impairment of the business relationship between the Borrower and its Subsidiaries, on the one hand, and the U.S. Government and its agencies and departments, on the other hand). "Control-Related Event" shall mean that any Person or group (as such term is used in Sections 13 and 14 of the Exchange Act, and the rules and regulations thereunder) shall have become the direct or indirect beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act) of 5% or more of any class of voting securities of the Borrower (except for any such Person or group existing on the Closing Date, to the extent of the voting securities then owned by them). (o) A proceeding shall have been instituted in respect of the Borrower or any Significant Subsidiary of the Borrower (and for this purpose, each Subsidiary of the Borrower which is subject to an event or condition described in this Section 8.01(o) or in Section 8.01(p) hereof shall be deemed a Significant Subsidiary if, collectively, together with their respective Subsidiaries, treated as a single entity, they would constitute a Significant Subsidiary) (i) seeking to have an order for relief entered in respect of such Person, or seeking a declaration or entailing a finding that such Person is insolvent or a similar declaration or finding, or seeking dissolution, Winding-up, administration, charter revocation or forfeiture, liquidation, reorganization, arrangement, adjustment, composition or other similar relief with respect to such Person, its assets or its debts under any Law relating to bankruptcy, insolvency, relief of debtors or protection of creditors, termination of legal entities or any other similar Law now or hereafter in effect, or (ii) seeking appointment of a receiver, administrative receiver, trustee, liquidator, assignee, sequestrator or other custodian for such Person or for all or any substantial part of its property and such proceeding shall result in the entry, making or grant of any such order for relief, declaration, finding, relief or appointment, or such proceeding shall remain undismissed and unstayed for a period of 30 consecutive days. (p) The Borrower or any Significant Subsidiary of the Borrower (and for this purpose, each Subsidiary of the Borrower which is subject to an event or condition described in Section 8.01(o) hereof or in this Section 8.01(p) shall be deemed a Significant Subsidiary if, collectively, together with their respective Subsidiaries, treated as a single entity, they would constitute a Significant Subsidiary) shall not be Solvent; shall fail to pay, become unable to pay, or state that it is or will be unable to pay, its debts as they become due; shall voluntarily suspend transaction of its business; shall make a general assignment for the benefit of creditors; shall institute (or fail to controvert in a timely and appropriate manner) a proceeding described in Section 8.01(o)(i) hereof, or (whether or not any such proceeding has been instituted) shall consent to or acquiesce in any such order for relief, declaration, finding or relief described therein; shall institute (or fail to controvert in a timely and appropriate manner) a proceeding described in Section 8.01(o)(ii) hereof, or (whether or not any such proceeding has been instituted) shall consent to or acquiesce in any such appointment or to the taking of possession by any such custodian of all or any substantial part of its or his property; shall dissolve, Wind-up, go into administration or revoke -63- 60 61 or forfeit its articles of incorporation (or other constituent documents); or shall take any action in furtherance of any of the foregoing. 8.02. CONSEQUENCES OF AN EVENT OF DEFAULT. (a) GENERAL. If an Event of Default specified in subsections (a) through (n) of Section 8.01 hereof shall have occurred and be continuing or exist, or if an Event of Default specified in subsections (o) or (p) of Section 8.01 hereof shall have occurred and be continuing or exist with respect to a Person other than the Borrower, then, in addition to all other rights and remedies which the Collateral Agent or any Lender Party may have hereunder or under any other Loan Document, at law, in equity or otherwise, the Lenders shall be under no further obligation to make Loans, and the Agent may, and upon the written request of the Required Lenders shall, by notice to the Borrower, from time to time do any or all of the following: (i) Declare the Commitments terminated, whereupon the Commitments will terminate and any fees hereunder shall be immediately due and payable without presentment, demand, protest or further notice of any kind, all of which are hereby waived, and an action therefor shall immediately accrue. (ii) Declare the unpaid principal amount of the Loans, interest accrued thereon and all other Loan Obligations (including the obligation to cash collateralize outstanding Letters of Credit) to be immediately due and payable without presentment, demand, protest or further notice of any kind, all of which are hereby waived, and an action therefor shall immediately accrue. (b) BANKRUPTCY AND CERTAIN OTHER EVENTS. If an Event of Default specified in subsection (o) or (p) of Section 8.01 hereof shall have occurred and be continuing or exist with respect to the Borrower, then, in addition to all other rights and remedies which the Collateral Agent or any Lender Party may have hereunder or under any other Loan Document, at law, in equity or otherwise, the Commitments shall automatically terminate and the Lenders shall be under no further obligation to make Loans, and the unpaid principal amount of the Loans, interest accrued thereon and all other Loan Obligations (including but not limited to the obligation to cash collateralize outstanding Letters of Credit) shall become immediately due and payable without presentment, demand, protest or notice of any kind, all of which are hereby waived, and an action therefor shall immediately accrue. 8.03. APPLICATION OF PROCEEDS. Subject to Section 3.07 hereof, after the occurrence of an Event of Default and acceleration of the Loans, any distributions made on account of Loan Obligations under the Collateral Agency Agreement and all other payments received on account of Loan Obligations shall be applied by the Agent to payment of the Loan Obligations in the following order: First, to payment of that portion of the Loan Obligations constituting fees, indemnities and other amounts due to the Agent in its capacity as such; Second, to payment of that portion of the Loan Obligations constituting fees, indemnities and other amounts due to the Swingline Lender and the Issuing Banks in their capacities as such, other than principal of and interest on Swingline Loans, Letter of Credit Reimbursement -64- 62 Obligations and accrued and unpaid Letter of Credit Fees, ratably amongst the Swingline Lender and the Issuing Banks in proportion to the respective amounts described in this clause "Second" due to them; Third, to payment of that portion of the Loan Obligations constituting accrued and unpaid interest on Loans, accrued and unpaid interest on Letter of Credit Unreimbursed Draws, and accrued and unpaid Letter of Credit Fees and Revolving Credit Commitment Fees, ratably amongst the Lenders and the Issuing Banks in proportion to the respective amounts described in this clause "Third" due to them; Fourth, to payment of that portion of the Loan Obligations constituting unpaid principal of the Loans and Letter of Credit Unreimbursed Draws, ratably amongst the Lenders and the Issuing Banks in proportion to the respective amounts described in this clause "Fourth" due to them; Fifth, to payment of all other Loan Obligations, ratably amongst the Lender Parties in proportion to the respective amounts described in this clause "Fifth" due to them; and Finally, the balance, if any, after all of the Loan Obligations have been indefeasibly paid in full in cash, all Commitments have terminated, and all Letters of Credit shall have terminated, to the Borrower or as otherwise required by law. ARTICLE IX THE AGENT 9.01. APPOINTMENT. Each Lender Party hereby irrevocably appoints Mellon Bank, N.A. to act as Agent for the Lender Parties under this Agreement and the other Loan Documents. Each Lender Party hereby irrevocably authorizes the Agent to take such action on behalf of the Lender Parties under the provisions of this Agreement and the other Loan Documents, and to exercise such powers and to perform such duties, as are expressly delegated to or required of the Agent by the terms hereof or thereof, together with such powers as are reasonably incidental thereto. Mellon Bank, N.A. hereby agrees to act as Agent on behalf of the Lender Parties on the terms and conditions set forth in this Agreement and the other Loan Documents, subject to its right to resign as provided herein. Each Lender Party hereby irrevocably authorizes the Agent to execute and deliver each of the Loan Documents and to accept delivery of such of the other Loan Documents as may not require execution by the Agent. Without limiting the generality of the foregoing, each Lender Party hereby irrevocably authorizes the Agent to execute and deliver the Collateral Agency Agreement on behalf of such Lender Party. Each Lender Party hereby agrees that the rights and remedies granted to the Agent under the Loan Documents shall be exercised exclusively by the Agent, and that no Lender Party shall have any right individually to exercise any such right or remedy, except to the extent, if any, expressly provided herein or therein. 9.02. GENERAL NATURE OF AGENT'S DUTIES. (a) NO IMPLIED DUTIES. The Agent shall have no duties or responsibilities except those expressly set forth in this Agreement and the other Loan Documents, and no implied duties or -65- 63 responsibilities on the part of the Agent shall be read into this Agreement or any Loan Document or shall otherwise exist. (b) NOT A FIDUCIARY. The duties and responsibilities of the Agent under this Agreement and the other Loan Documents shall be mechanical and administrative in nature, and the Agent shall not have a fiduciary relationship in respect of any Lender Party. (c) AGENT OF LENDER PARTIES. The Agent is and shall be solely the agent of the Lender Parties. The Agent does not assume, and shall not at any time be deemed to have, any relationship of agency or trust with or for, or any other duty or responsibility to, the Borrower or any Person other than the Lender Parties. The provisions of this Article IX are for the benefit of the Lender Parties (and the other Persons named in Section 9.07 hereof), and the Borrower shall not have any rights under any of the provisions of this Article IX. (d) NO OBLIGATION TO TAKE ACTION. The Agent shall be under no obligation to take any action hereunder or under any other Loan Document if the Agent believes in good faith that taking such action may conflict with any Law or any provision of this Agreement or any other Loan Document, or may require the Agent to qualify to do business in any jurisdiction where it is not then so qualified. 9.03. EXERCISE OF POWERS. Subject to the other provisions of this Agreement and the other Loan Documents, the Agent shall take any action of the type specified in this Agreement or any other Loan Document as being within the Agent's rights, powers or discretion in accordance with directions from the Required Lenders (or, to the extent this Agreement or such Loan Document expressly requires the direction or consent of some other Person or set of Persons, then instead in accordance with the directions of such other Person or set of Persons). In the absence of such directions, the Agent shall have the authority (but under no circumstances shall be obligated), in its sole discretion, to take any such action, except to the extent this Agreement or such Loan Document expressly requires the direction or consent of the Required Lenders (or some other Person or set of Persons), in which case the Agent shall not take such action absent such direction or consent. Any action or inaction pursuant to such direction, discretion or consent shall be binding on all the Lender Parties. The Agent shall not have any liability to any Person as a result of (x) the Agent acting or refraining from acting in accordance with the directions of the Required Lenders (or other applicable Person or set of Persons), (y) the Agent refraining from acting in the absence of instructions to act from the Required Lenders (or other applicable Person or set of Persons), whether or not the Agent has discretionary power to take such action, or (z) the Agent taking discretionary action it is authorized to take under this Section (subject, in the case of this clause (z), to the provisions of Section 9.04(a) hereof). 9.04. GENERAL EXCULPATORY PROVISIONS. (a) GENERAL. The Agent shall not be liable for any action taken or omitted to be taken by it under or in connection with this Agreement or any other Loan Document, unless caused by its own gross negligence or willful misconduct. (b) AGENT NOT RESPONSIBLE FOR LOAN DOCUMENTS, ETC. The Agent shall not be responsible for (i) the execution, delivery, effectiveness, enforceability, genuineness, validity or adequacy of this Agreement or any other Loan Document, (ii) any recital, representation, warranty, -66- 64 document, certificate, report or statement in, provided for in, or received under or in connection with, this Agreement or any other Loan Document, (iii) any failure of the Borrower, any Lender or Issuing Bank to perform any of their respective obligations under this Agreement or any other Loan Document, (iv) the existence, validity, enforceability, perfection, recordation, priority, adequacy or value, now or hereafter, of any Lien or other direct or indirect security afforded or purported to be afforded by any of the Loan Documents or otherwise from time to time, or (v) caring for, protecting, insuring, or paying any taxes, charges or assessments with respect to any collateral. (c) NO DUTY OF INQUIRY. The Agent shall not be under any obligation to ascertain, inquire or give any notice relating to (i) the performance or observance of any of the terms or conditions of this Agreement or any other Loan Document on the part of the Borrower, (ii) the business, operations, condition (financial or otherwise) or prospects of the Borrower or any other Person, or (iii) except to the extent set forth in Section 9.05(f) hereof, the existence of any Event of Default or Potential Default. (d) NOTICES. The Agent shall not be under any obligation, either initially or on a continuing basis, to provide any Lender Party with any notices, reports or information of any nature, whether in its possession presently or hereafter, except for such notices, reports and other information expressly required by this Agreement or any other Loan Document to be furnished by the Agent to such Lender Party. 9.05. ADMINISTRATION BY THE AGENT. (a) RELIANCE ON NOTICES. The Agent may rely upon any notice or other communication of any nature (written or oral, including but not limited to telephone conversations, whether or not such notice or other communication is made in a manner permitted or required by this Agreement or any Loan Document) purportedly made by or on behalf of the proper party or parties, and the Agent shall not have any duty to verify the identity or authority of any Person giving such notice or other communication. (b) CONSULTATION. The Agent may consult with legal counsel (including, without limitation, in-house counsel for the Agent or in-house or other counsel for the Borrower), independent public accountants and any other experts selected by it from time to time, and the Agent shall not be liable for any action taken or omitted to be taken in good faith by it in accordance with the advice of such counsel, accountants or experts. (c) RELIANCE ON CERTIFICATES, ETC. The Agent may conclusively rely upon the truth of the statements and the correctness of the opinions expressed in any certificates or opinions furnished to the Agent in accordance with the requirements of this Agreement or any other Loan Document. Whenever the Agent shall deem it necessary or desirable that a matter be proved or established with respect to the Borrower or any Lender Party, such matter may be established by a certificate of the Borrower or such Lender Party, as the case may be, and the Agent may conclusively rely upon such certificate (unless other evidence with respect to such matter is specifically prescribed in this Agreement or another Loan Document). (d) INDEMNITY. The Agent may fail or refuse to take any action unless it shall be indemnified to its satisfaction from time to time against any and all amounts, liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or -67- 65 nature which may be imposed on, incurred by or asserted against the Agent by reason of taking or continuing to take any such action. (e) PERFORMANCE THROUGH AGENTS. The Agent may perform any of its duties under this Agreement or any other Loan Document by or through agents or attorneys-in-fact. The Agent shall not be responsible for the negligence or misconduct of any agents or attorneys-in fact selected by it with reasonable care. (f) NOTICE OF DEFAULT. The Agent shall not be deemed to have any knowledge or notice of the occurrence of any Event of Default or Potential Default unless the Agent has received notice from a Lender Party or the Borrower referring to this Agreement, describing such Event of Default or Potential Default, and stating that such notice is a "notice of default." If the Agent receives such a notice, the Agent shall give prompt notice thereof to each Lender. 9.06. LENDERS NOT RELYING ON AGENT OR OTHER LENDERS. Each Lender Party hereby acknowledges as follows: (a) Neither the Agent nor any other Lender Party has made any representations or warranties to it, and no act taken hereafter by the Agent or any other Lender Party shall be deemed to constitute any representation or warranty by the Agent or such other Lender Party to it. (b) It has, independently and without reliance upon the Agent or any other Lender Party, and based upon such documents and information as it has deemed appropriate, made its own credit and legal analysis and decision to enter into this Agreement and the other Loan Documents. (c) It will, independently and without reliance upon the Agent or any other Lender Party, and based upon such documents and information as it shall deem appropriate at the time, make its own decisions to take or not take action under or in connection with this Agreement and the other Loan Documents. 9.07. INDEMNIFICATION OF AGENT BY LENDERS. Each Lender hereby agrees to reimburse and indemnify the Agent and its directors, officers, employees and agents (to the extent not reimbursed by the Borrower and without limitation of the obligations of the Borrower to do so), Pro Rata, from and against any and all amounts, losses, liabilities, claims, damages, expenses, obligations, penalties, actions, judgments, suits, costs or disbursements of any kind or nature (including, without limitation, the fees and disbursements of counsel for the Agent or such other Person in connection with any investigative, administrative or judicial proceeding commenced or threatened, whether or not the Agent or such other Person shall be designated a party thereto) that may at any time be imposed on, incurred by or asserted against the Agent or such other Person as a result of, or arising out of, or in any way related to or by reason of, this Agreement, any other Loan Document, any transaction from time to time contemplated hereby or thereby, or any transaction financed in whole or in part or directly or indirectly with the proceeds of any Loan or Letter of Credit; provided, that no Lender shall be liable for any portion of such amounts, losses, liabilities, claims, damages, expenses, obligations, penalties, actions, judgments, suits, costs or disbursements resulting from the gross negligence or willful misconduct of the Agent or such other Person, as finally determined by a court of competent jurisdiction. 9.08. AGENT IN ITS INDIVIDUAL CAPACITY. With respect to its Commitments and the Loan Obligations owing to it, the Agent shall have the same rights and powers under this Agreement and each other Loan Document as any other Lender and may exercise the same as though it were not the Agent, and the terms "Lender," "Swingline Lender," "Issuing Bank," "holders of Notes" and like terms shall include the Agent in its individual capacity as such. The Agent and its affiliates may, without liability to -68- 66 account, make loans to, accept deposits from, acquire debt or equity interests in, enter into interest rate or currency hedging transactions with, act as trustee under indentures of, and engage in any other business or transaction with, the Borrower or any stockholder, subsidiary or affiliate of the Borrower, as though the Agent were not the Agent hereunder. 9.09. HOLDERS OF NOTES. The Agent may deem and treat the Lender which is payee of a Note as the owner and holder of such Note for all purposes hereof unless and until a Transfer Supplement with respect to the assignment or transfer thereof shall have been filed with the Agent in accordance with Section 10.14 hereof. Any authority, direction or consent of any Person who at the time of giving such authority, direction or consent is shown in the Register as being a Lender shall be conclusive and binding on each present and subsequent holder, transferee or assignee of any Note or Notes payable to such Lender or of any Note or Notes issued in exchange therefor. 9.10. SUCCESSOR AGENT. The Agent may resign at any time by giving 45 days' prior written notice thereof to the Lenders and the Borrower. The Agent may be removed by the Required Lenders at any time by giving 10 days' prior written notice thereof to the Agent, the other Lenders and the Borrower. Upon any such resignation or removal, the Required Lenders shall have the right to appoint a successor Agent. If no successor Agent shall have been so appointed and consented to, and shall have accepted such appointment, within 30 days after such notice of resignation or removal, then the retiring Agent may (but shall not be required to) appoint a successor Agent. Each successor Agent shall be a commercial bank or trust company organized under the laws of the United States of America or any State thereof and having a combined capital and surplus of at least $500,000,000. Upon the acceptance by a successor Agent of its appointment as Agent hereunder, such successor Agent shall thereupon succeed to and become vested with all the properties, rights, powers, privileges and duties of the former Agent in its capacity as such, without further act, deed or conveyance. Upon the effective date of resignation or removal of a retiring Agent, such Agent shall be discharged from its duties as such under this Agreement and the other Loan Documents, but the provisions of this Agreement shall inure to its benefit as to any actions taken or omitted by it while it was Agent under this Agreement. If and so long as no successor Agent shall have been appointed, then any notice or other communication required or permitted to be given by the Agent shall be sufficiently given if given by the Required Lenders, all notices or other communications required or permitted to be given to the Agent shall be given to each Lender, and all payments to be made to the Agent shall be made directly to the Borrower or Lender Party for whose account such payment is made. 9.11. CALCULATIONS. The Agent shall not be liable for any calculation, apportionment or distribution of payments made by it in good faith. If such calculation, apportionment or distribution is subsequently determined to have been made in error, the sole recourse of any Lender Party to whom payment was due but not made shall be to recover from the other Lender Parties any payment in excess of the amount to which they are determined to be entitled or, if the amount due was not paid by the Borrower, to recover such amount from the Borrower. 9.12. AGENT'S FEE. The Borrower agrees to pay to the Agent, for its individual account, a nonrefundable Agent's fee of $50,000 per annum, payable for the period from and including the Closing Date to but not including the date on which all Loan Obligations (other than Contingent Indemnification Obligations) have been indefeasibly paid in full and all Revolving Credit Commitments have been terminated. Payments of such Agent's fee shall be made (a) on the Closing Date, for the -69- 67 period from and including such date to but not including June 29, 1997 (provided, that to the extent that the Borrower has paid the Agent's fee allocable to such period under the prior "Revolving Credit Agreement" referred to in Section 5.01(f), such payment shall be credited against the Borrower's obligation under this clause (a)), and (b) thereafter, in advance on each June 29 and December 29 for the period from and including such payment date to but not including the next such payment date. 9.13. FUNDING BY AGENT. Unless the Agent shall have been notified in writing by any Lender not later than the close of business on the day before the day on which Loans are requested by the Borrower to be made that such Lender will not make its ratable share of such Loans, the Agent may assume that such Lender will make its ratable share of the Loans, and in reliance upon such assumption the Agent may (but in no circumstances shall be required to) make available to the Borrower a corresponding amount. If and to the extent that any Lender fails to make such payment to the Agent on such date, such Lender shall pay such amount on demand (or, if such Lender fails to pay such amount on demand, the Borrower shall pay such amount on demand), together with interest, for the Agent's own account, for each day from and including the date of the Agent's payment to and including the date of repayment to the Agent (before and after judgment) at the following rates per annum: (x) for each day from and including the date of such payment by the Agent to and including the second Business Day thereafter, at the Federal Funds Effective Rate for such day, and (y) for each day thereafter, at the rate applicable to such Loans for such day. All payments to the Agent under this Section shall be made to the Agent at its Office in Dollars in funds immediately available at such Office, without set-off, withholding, counterclaim or other deduction of any nature. ARTICLE X MISCELLANEOUS 10.01. HOLIDAYS. Except as otherwise expressly provided herein or therein, whenever any payment or action to be made or taken hereunder or under any other Loan Document shall be stated to be due on a day which is not a Business Day, such payment or action shall be made or taken on the next following Business Day and such extension of time shall be included in computing interest or fees, if any, in connection with such payment or action. 10.02. RECORDS. The unpaid principal amount of the Revolving Credit Loans owing to each Lender, the unpaid interest accrued thereon, the interest rate or rates applicable to such unpaid principal amount, the duration of such applicability, each Lender's Revolving Credit Committed Amount and the accrued and unpaid fees owing to each Lender Party shall at all times be ascertained from the records of the Agent, which shall be conclusive absent manifest error. The unpaid Letter of Credit Reimbursement Obligations, the unpaid interest accrued thereon, and the interest rate or rates applicable thereto shall at all times be ascertained from the records of the Issuing Bank, which shall be conclusive absent manifest error. The unpaid principal amount of the Swingline Loans, the unpaid interest accrued thereon and the interest rate or rates applicable thereto shall at all times be ascertained from the records of the Swingline Lender, which shall be conclusive absent manifest error. 10.03. AMENDMENTS AND WAIVERS. The Agent and the Borrower may from time to time amend, modify or supplement the provisions of this Agreement or any other Loan Document (other than the Shared Security Documents) for the purpose of amending, adding to, or waiving any provisions, -70- 68 releasing any collateral, or changing in any manner the rights and duties of the Borrower or any Lender Party. Any such amendment, modification or supplement made by the Borrower and the Agent in accordance with the provisions of this Section 10.03 shall be binding upon the Borrower and each Lender Party. The Agent shall enter into such amendments, modifications or supplements from time to time as directed by the Required Lenders, and only as so directed, provided, that no such amendment, modification or supplement may be made which will: (a) Increase the Revolving Credit Committed Amount of any Lender over the amount thereof then in effect without the written consent of each Lender affected thereby, or extend the Revolving Credit Maturity Date without the written consent of each Lender; (b) Reduce the principal amount of or extend the time for any scheduled payment of principal of any Loan without the written consent of each Lender affected thereby, or reduce the rate of interest or extend the time for payment of interest borne by any Loan or Letter of Credit Reimbursement Obligation (other than as a result of waiving the applicability of any increase in interest rates applicable to overdue amounts), or extend the time for payment of or reduce the amount of any Revolving Credit Commitment Fee or Letter of Credit Fee, without the written consent of each Lender affected thereby; (c) Change the definition of "Required Lenders" or amend this Section 10.03, without the written consent of each Lender; (d) Amend or waive any of the provisions of Article IX, or impose additional duties upon the Agent, or otherwise affect the rights, interests or obligations of the Agent, without the written consent of the Agent; (e) Release all or a major portion of the Shared Collateral (other than in accordance with the provisions of the Loan Documents), or subordinate the priority of the Liens in favor of the Collateral Agent to Liens in favor of another Person with respect to all or a major portion of the Shared Collateral (other than in accordance with the provisions of the Loan Documents), without the written consent of each Lender; (f) Alter the priority of distributions set forth in Section 8.03 hereof, without the written consent of each Lender affected thereby; (g) Amend or waive any of the provisions of Article III, or impose additional duties upon the Swingline Lender or any Issuing Bank or otherwise affect the rights, interests or obligations of the Swingline Lender or any Issuing Bank, without the written consent of Mellon Bank, N.A.; or (h) Reduce any Letter of Credit Unreimbursed Draw, or extend the time for repayment by the Borrower of any Letter of Credit Unreimbursed Draw, without the written consent of each Lender; and provided further, that Transfer Supplements may be entered into in the manner provided in Section 10.14 hereof. Any such amendment, modification or supplement must be in writing, manually -71- 69 signed by or on behalf of the Borrower and the Lender Party which is party thereto, and shall be effective only to the extent set forth in such writing. Any Event of Default or Potential Default waived or consented to in any such amendment, modification or supplement shall be deemed to be cured and not continuing to the extent and for the period set forth in such waiver or consent, but no such waiver or consent shall extend to any other or subsequent Event of Default or Potential Default or impair any right consequent thereto. Shared Security Documents may be amended, modified and supplemented from time to time in accordance with the terms thereof and of the Collateral Agency Agreement, and any such amendment, modification or supplement so made shall be binding upon the Borrower and each Lender Party (and to the extent that any consent, direction or other action is required by the Agent in connection therewith, the provisions of the third sentence of this Section 10.03 shall apply to the Agent in giving such consent or direction or taking such action). 10.04. NO IMPLIED WAIVER; CUMULATIVE REMEDIES. No course of dealing and no delay or failure of the Collateral Agent or any Lender Party in exercising any right, power or privilege under this Agreement or any other Loan Document shall affect any other or future exercise thereof or exercise of any other right, power or privilege; nor shall any single or partial exercise of any such right, power or privilege or any abandonment or discontinuance of steps to enforce such a right, power or privilege preclude any further exercise thereof or of any other right, power or privilege. The rights and remedies of the Collateral Agent and the Lender Parties under this Agreement and any other Loan Document are cumulative and not exclusive of any rights or remedies which any of them would otherwise have hereunder or thereunder, at law, in equity or otherwise. 10.05. NOTICES. (a) GENERAL. Except to the extent otherwise expressly permitted hereunder or thereunder, all notices, requests, demands, directions and other communications (collectively "notices") to the Borrower or any Lender Party under this Agreement or any Loan Document shall be in writing (including telexes and facsimile transmission) and shall be sent by first-class mail, or by nationally-recognized overnight courier, or by telex or facsimile transmission (with confirmation in writing mailed first-class or sent by such an overnight courier), or by personal delivery. All notices shall be sent to the applicable party at the address stated on the signature pages hereof or in accordance with the last unrevoked written direction from such party to the other parties hereto, in all cases with postage or other charges prepaid. Any such properly given notice to any Lender Party shall be effective when received. Any such properly given notice to the Borrower shall be effective on the earliest to occur of receipt, telephone confirmation of receipt of telex or facsimile transmission, one Business Day after delivery to a nationally-recognized overnight courier, or three Business Days after deposit in the mail. (b) COPIES TO AGENT. Any Lender giving any notice to the Borrower or any other party to a Loan Document shall simultaneously send a copy thereof to the Agent, and the Agent shall promptly notify the other Lenders of the receipt by it of any such notice. (c) RELIANCE. Each Lender Party may rely on any notice (whether or not such notice is made in a manner permitted or required by this Agreement or any Loan Document) purportedly made by or on behalf of the Borrower, and no Lender Party shall have any duty to verify the identity or authority of any Person giving such notice. -72- 70 10.06. EXPENSES; TAXES; INDEMNITY. (a) EXPENSES. The Borrower agrees to pay or cause to be paid and to save each Lender Party harmless against liability for the payment of all reasonable out-of-pocket costs and expenses (including but not limited to reasonable fees and expenses of outside counsel, including local counsel, auditors, and all other professional, accounting, evaluation and consulting costs) incurred by any Lender Party from time to time arising from or relating to (i) in the case of the Agent, the negotiation, preparation, execution, delivery, administration and performance of this Agreement and the other Loan Documents, (ii) in the case of the Agent, any requested amendments, modifications, supplements, waivers or consents (whether or not ultimately entered into or granted) to this Agreement or any Loan Document, (iii) in the case of each Lender Party, the enforcement or preservation of rights under this Agreement or any Loan Document (including but not limited to any such costs or expenses arising from or relating to (A) the creation, perfection or protection of any Lien on any collateral, (B) the protection, collection, lease, sale, taking possession of, preservation of, or realization on, any collateral, including without limitation advances for taxes, filing fees and the like, (C) collection or enforcement by any Lender Party of any outstanding Loan or any other amount owing hereunder or thereunder, and (D) any litigation, proceeding, dispute, work-out, restructuring or rescheduling related in any way to this Agreement or the Loan Documents), and (iv) in the case of Mellon Bank, N.A., any syndication of this Agreement prior to the first anniversary of the Closing Date (but amounts payable under this clause (iv), plus amounts payable under Section 10.06(a)(iv) of the other Credit Facilities as constituted on the Closing Date, shall in no event exceed an aggregate of $50,000). (b) TAXES. The Borrower hereby agrees to pay all stamp, document, transfer, recording, filing, registration, search, sales and excise fees and taxes and all similar impositions now or hereafter determined by any Lender Party to be payable in connection with this Agreement or any other Loan Documents or any other documents, instruments or transactions pursuant to or in connection herewith or therewith, and the Borrower agrees to save each Lender Party harmless from and against any and all present or future claims, liabilities or losses with respect to or resulting from any omission to pay or delay in paying any such fees, taxes or impositions. (c) INDEMNITY. The Borrower hereby agrees to reimburse and indemnify the Lender Parties, their respective affiliates, and the directors, officers, employees, attorneys and agents of each of the foregoing (the "Lender Indemnified Parties"), and each of them, and to hold each of them harmless from and against, any and all losses, liabilities, claims, damages, expenses, obligations, penalties, actions, judgments, suits, costs or disbursements of any kind or nature whatsoever (including, without limitation, the fees and disbursements of outside counsel for such Lender Indemnified Party in connection with any investigative, administrative or judicial proceeding commenced or threatened, whether or not such Lender Indemnified Party shall be designated a party thereto) that may at any time be imposed on, asserted against or incurred by such Lender Indemnified Party as a result of, or arising out of, or in any way related to or by reason of this Agreement or any other Loan Document, any transaction from time to time contemplated hereby or thereby, or any transaction financed or secured in whole or in part, directly or indirectly, with the proceeds of any Loan or by any Letter of Credit or the proceeds thereof (and without in any way limiting the generality of the foregoing, including any grant of any Lien on collateral or any exercise by the Collateral Agent or any Lender Party of any of its rights or remedies under this Agreement or any other Loan Document); but excluding any portion of such losses, liabilities, claims, damages, expenses, obligations, penalties, actions, judgments, suits, costs or -73- 71 disbursements resulting from the gross negligence or willful misconduct of such Lender Indemnified Party, as finally determined by a court of competent jurisdiction. If and to the extent that the foregoing obligations of the Borrower under this Section 10.06(c), or any other indemnification obligation of the Borrower hereunder or under any other Loan Document, are unenforceable for any reason, the Borrower hereby agrees to make the maximum contribution to the payment and satisfaction of such obligations which is permissible under applicable Law. 10.07. SEVERABILITY. The provisions of this Agreement are intended to be severable. If any provision of this Agreement shall be held invalid or unenforceable in whole or in part in any jurisdiction such provision shall, as to such jurisdiction, be ineffective to the extent of such invalidity or unenforceability without in any manner affecting the validity or enforceability thereof in any other jurisdiction or the remaining provisions hereof in any jurisdiction. 10.08. PRIOR UNDERSTANDINGS. This Agreement and the other Loan Documents supersede all prior and contemporaneous understandings and agreements, whether written or oral, among the parties hereto and thereto relating to the transactions provided for herein and therein, including the engagement letter between the Borrower and Mellon Bank, N.A. dated December 13, 1996. 10.09. DURATION; SURVIVAL. All representations and warranties of the Borrower contained herein or in any other Loan Document or made in connection herewith or therewith shall survive the making of, and shall not be waived by the execution and delivery, of this Agreement or any other Loan Document, any investigation by or knowledge of any Lender Party, the making of any Loan, the issuance of any Letter of Credit or any other event or condition whatever. All covenants and agreements of the Borrower contained herein or in any other Loan Document shall continue in full force and effect from and after the date hereof (or, in the case of Section 7.01 hereof, from and after December 31, 1996) until all Commitments have terminated, all Letters of Credit have expired or have been terminated, and all Loan Obligations (other than Contingent Indemnification Obligations) have been indefeasibly paid in full in cash. Without limitation, all obligations of the Borrower hereunder or under any other Loan Document to make payments to or indemnify any Lender Party or Lender Indemnified Party (including but not limited to obligations arising under Sections 2.10, 2.11 and 10.06 hereof) shall survive the payment in full of all other Loan Obligations, termination of the Borrower's right to borrow hereunder, and all other events and conditions whatever. In addition, all obligations of each Lender to make payments to or indemnify the Agent, the Swingline Lender or the Issuing Banks and Persons related to the Agent, the Swingline Lender or the Issuing Banks (including but not limited to obligations arising under Sections 3.08(c), 3.13(c) and 9.07 hereof) shall survive the payment in full by the Borrower of all Loan Obligations, termination of the Borrower's right to borrow hereunder, and all other events and conditions whatever. 10.10. COUNTERPARTS. This Agreement may be executed in any number of counterparts and by the different parties hereto on separate counterparts each of which, when so executed, shall be deemed an original, but all such counterparts shall constitute but one and the same instrument. 10.11. LIMITATION ON PAYMENTS. The parties hereto intend to conform to all applicable Laws in effect from time to time limiting the maximum rate of interest that may be charged or collected. Accordingly, notwithstanding any other provision hereof or of any other Loan Document, the Borrower shall not be required to make any payment to or for the account of any Lender, and each Lender shall -74- 72 refund any payment made by the Borrower, to the extent that such requirement or such failure to refund would violate or conflict with nonwaivable provisions of applicable Laws limiting the maximum amount of interest which may be charged or collected by such Lender. 10.12. SET-OFF. The Borrower hereby agrees that if any Loan Obligation of the Borrower shall be due and payable (by acceleration or otherwise), each Lender Party shall have the right, without notice to the Borrower, to set-off against and to appropriate and apply to such Loan Obligation any obligation of any nature owing to the Borrower by such Lender Party, including but not limited to all deposits (whether time or demand, general or special, provisionally credited or finally credited, whether or not evidenced by a certificate of deposit) now or hereafter maintained by the Borrower with such Lender Party. Such right shall be absolute and unconditional in all circumstances and, without limitation, shall exist whether or not such Lender Party or any other Person shall have given notice or made any demand to the Borrower or any other Person, whether such obligation owed to the Borrower is contingent, absolute, matured or unmatured (it being agreed that such Lender Party may deem such obligation to be then due and payable at the time of such setoff), and regardless of the existence or adequacy of any collateral, guaranty or any other security, right or remedy available to any Lender Party or any other Person. The Borrower hereby agrees that, to the fullest extent permitted by law, any Participant and any branch, subsidiary or affiliate of any Lender Party or any Participant shall have the same rights of set-off as a Lender as provided in this Section 10.12 (regardless of whether such Participant, branch, subsidiary or affiliate would otherwise be deemed in privity with or a direct creditor of the Borrower). The rights provided by this Section 10.12 are in addition to all other rights of set-off and banker's lien and all other rights and remedies which any Lender Party (or any such Participant, branch, subsidiary or affiliate) may otherwise have under this Agreement, any other Loan Document, at law or in equity, or otherwise, and nothing in this Agreement or any Loan Document shall be deemed a waiver or prohibition of or restriction on the rights of set-off or bankers' lien of any such Person. 10.13. SHARING OF COLLECTIONS. Subject to Section 2.06 of the Collateral Agency Agreement, the Lenders hereby agree among themselves that if any Lender shall receive (by voluntary payment, realization upon security, set-off or from any other source) any amount on account of the Loans, interest thereon, or any other Loan Obligation contemplated by this Agreement or the other Loan Documents to be made by the Borrower ratably to all Lenders in greater proportion than any such amount received by any other Lender, then the Lender receiving such proportionately greater payment shall notify each other Lender and the Agent of such receipt, and equitable adjustment will be made in the manner stated in this Section so that, in effect, all such excess amounts will be shared ratably among all of the Lenders. The Lender receiving such excess amount shall purchase (which it shall be deemed to have done simultaneously upon the receipt of such excess amount) for cash from the other Lenders a participation in the applicable Loan Obligations owed to such other Lenders in such amount as shall result in a ratable sharing by all Lenders of such excess amount (and to such extent the receiving Lender shall be a Participant). If all or any portion of such excess amount is thereafter recovered from the Lender making such purchase, such purchase shall be rescinded and the purchase price restored to the extent of such recovery, together with interest or other amounts, if any, required by Law to be paid by the Lender making such purchase. The Borrower hereby consents to and confirms the foregoing arrangements. Each Participant shall be bound by this Section as fully as if it were a Lender hereunder. 10.14. SUCCESSORS AND ASSIGNS; PARTICIPATIONS; ASSIGNMENTS. -75- 73 (a) SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and inure to the benefit of the Borrower, the Lender Parties, all future holders of the Notes, and their respective successors and assigns, except that the Borrower may not assign or transfer any of its rights hereunder without the prior written consent of all the Lenders and the Agent, and any purported assignment without such consent shall be void, and except that, to the fullest extent permitted by law, a Lender may not voluntarily assign or transfer any of its rights hereunder except in accordance with the other provisions of this Section 10.14, and any other purported voluntary assignment or transfer shall be void; provided, that this Agreement shall inure to the benefit of successors of Lenders by operation of law or resulting from an involuntary assignment or transfer (including but not limited to receivers, conservators, trustees and like Persons, and successors by merger or consolidation). (b) PARTICIPATIONS. Any Lender may, in the ordinary course of its business and in accordance with applicable Law, at any time sell participations to one or more commercial banks or other Persons (each a "Participant") in all or a portion of its rights and obligations under this Agreement and the other Loan Documents (including, without limitation, all or a portion of its Commitments and the Loans owing to it and any Note held by it); provided, that (i) any such Lender's obligations under this Agreement and the other Loan Documents shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations, (iii) the parties hereto shall continue to deal solely and directly with such Lender in connection with such Lender's rights and obligations under this Agreement and each of the other Loan Documents, and (iv) such Participant shall, by accepting such Participation, be bound by the provisions of Section 10.13 hereof, and (v) if such Participant is not already a Participant or a Lender, and if such Participation gives such Participant any voting rights (other than on matters described in clauses (a) through (h), inclusive, of Section 10.03 hereof), such Participation shall be subject to consent of the Agent, Mellon Bank, N.A. and the Borrower pursuant to clause (i) of Section 10.14(c) hereof as if such Participation were an assignment described therein. The Borrower agrees that any such Participant shall be entitled to the benefits of Sections 2.10, 2.11, 10.06 and 10.12 hereof with respect to its participation in the Commitments and the Loans outstanding from time to time; provided, that no such Participant shall be entitled to receive any greater amount pursuant to such Sections than the transferor Lender would have been entitled to receive in respect of the amount of the participation transferred to such Participant had no such transfer occurred. (c) ASSIGNMENTS. Any Lender may, in the ordinary course of its business and in accordance with applicable Law, at any time assign all or a portion of its rights and obligations under this Agreement and the other Loan Documents (including, without limitation, all or any portion of its -76- 74 Commitments and Loans owing to it and any Note held by it) to any Lender or to one or more additional commercial banks or other Persons (each a "Purchasing Lender"); provided, that (i) any such assignment to a Purchasing Lender shall be made only with the consent of the Agent and Mellon Bank, N.A. (which each of them may grant or withhold in their absolute discretion) and of the Borrower (which consent may not be unreasonably withheld or delayed); (ii) if a Lender makes such an assignment of less than all of its then remaining rights and obligations under this Agreement and the other Loan Documents, such transferor Lender shall retain, after such assignment, a minimum principal amount of $10,000,000 of the Commitments, and after giving effect to such assignment the transferee Lender shall have a minimum aggregate principal amount of $10,000,000 of the Commitments, (iii) each such assignment shall be of a constant, and not a varying, percentage of the Revolving Credit Commitment and Revolving Credit Loans of the transferor Lender, and of all of the transferor Lender's related rights and obligations under this Agreement and the other Loan Documents, (iv) each such assignment shall be made pursuant to a Transfer Supplement in substantially the form of Exhibit B to this Agreement, duly completed (a "Transfer Supplement"). In order to effect any such assignment, the transferor Lender and the Purchasing Lender shall execute and deliver to the Agent a duly completed Transfer Supplement (including the consents required by clause (i) of the preceding sentence) with respect to such assignment, together with any Note or Notes subject to such assignment (the "Transferor Lender Notes") and a processing and recording fee of $3,500; and, upon receipt thereof, the Agent shall accept such Transfer Supplement. Upon receipt of the Purchase Price Receipt Notice pursuant to such Transfer Supplement, the Agent shall record such acceptance in the Register. Upon such execution, delivery, acceptance and recording, from and after the close of business at the Agent's Office on the Transfer Effective Date specified in such Transfer Supplement (x) the Purchasing Lender shall be a party hereto and, to the extent provided in such Transfer Supplement, shall have the rights and obligations of a Lender hereunder, and (y) the transferor Lender thereunder shall be released from its obligations under this Agreement to the extent so transferred (and, in the case of an Transfer Supplement covering all or the remaining portion of a transferor Lender's rights and obligations under this Agreement, such transferor Lender shall cease to be a party to this Agreement) from and after the Transfer Effective Date. On or prior to the Transfer Effective Date specified in a Transfer Supplement, the Borrower, at its expense, shall execute and deliver to the Agent (for delivery to the Purchasing Lender) new Revolving Credit Notes evidencing such Purchasing Lender's assigned Commitments or Loans and (for delivery to the transferor Lender) replacement Revolving Credit Notes in the principal amount of the Loans or Commitments retained by the transferor Lender (such Notes to be in exchange for, but not in payment -77- 75 of, those Notes then held by such transferor Lender). Each such Note shall be dated the date and be substantially in the form of the predecessor Note. The Agent shall mark the predecessor Notes "exchanged" and deliver them to the Borrower. Accrued interest and accrued fees shall be paid to the Purchasing Lender at the same time or times provided in the predecessor Notes and this Agreement. (d) REGISTER. The Agent shall maintain at its office a copy of each Transfer Supplement delivered to it and a register (the "Register") for the recordation of the names and addresses of the Lenders and the Commitment of, and principal amount of the Loans owing to, each Lender from time to time. The entries in the Register shall be conclusive absent manifest error and the Borrower and each Lender Party may treat each person whose name is recorded in the Register as a Lender hereunder for all purposes of the Agreement. The Register shall be available for inspection by the Borrower or any Lender at any reasonable time and from time to time upon reasonable prior notice. (e) FINANCIAL AND OTHER INFORMATION. Subject to Section 10.14(g) hereof, the Borrower authorizes the Agent and each Lender to disclose to any Participant or Purchasing Lender, or prospective Participant or Purchasing Lender, any and all financial and other information delivered to, received by, or otherwise in the possession of, such Person from time to time relating to the Borrower, its Subsidiaries and affiliates, or the matters contemplated by the Loan Documents. At the request of any Lender, the Borrower, at the Borrower's expense, shall provide to each prospective transferee the conformed copies of documents referred to in Section 4 of the form of Transfer Supplement. (f) SYNDICATION. The Borrower shall, at the reasonable request of Mellon Bank, N.A. from time to time, at the Borrower's expense, use all reasonable efforts to cooperate with its syndication effort, including, without limitation, (i) assisting it from time to time in preparing information packages for delivery to prospective Participants and Purchasing Lenders, and (ii) causing appropriate officers, representative and experts to meet with prospective Participants and Purchasing Lenders from time to time. Mellon Bank, N.A. agrees to make such information packages available to the Borrower for reasonable review before initial dissemination of the same in primary syndication, and to consult with the Borrower as to the content thereof. (g) CONFIDENTIALITY. Each Lender Party agrees to take reasonable precautions to maintain the confidentiality of information designated in writing as confidential and provided to it by the Borrower or any Subsidiary in connection with this Agreement; provided, however, that any Lender Party may disclose such information (i) at the request of any bank regulatory authority or other Governmental Authority or in connection with an examination of such Lender Party by any such Governmental Authority, (ii) pursuant to subpoena or other court process, (iii) to the extent such Lender Party is required (or believes in good faith that it is required) to do so in accordance with any applicable Law, (iv) to such Lender Party's independent auditors and other professional advisors, (v) in connection with the enforcement of any of its rights under or in connection with any Loan Document, (vi) to any other Lender Party, and (vii) to any actual or potential Participant or Purchasing Lender, or to any other actual or potential creditor of or participant in a credit to the Borrower or any of its Subsidiaries or Affiliates, so long as, in the case of this clause (vii), such Person agrees to comply with the provisions of this Section 10.14(g). (h) ASSIGNMENTS TO FEDERAL RESERVE BANK. Any Lender may at any time assign all or any portion of its rights under this Agreement, including without limitation any Loans owing to it and -78- 76 any Note held by it, to a Federal Reserve Bank. No such assignment shall relieve the transferor Lender from any of its obligations hereunder. 10.15. GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL; LIMITATION OF LIABILITY. (a) GOVERNING LAW. THIS AGREEMENT AND ALL OTHER LOAN DOCUMENTS (EXCEPT TO THE EXTENT, IF ANY, OTHERWISE EXPRESSLY STATED IN SUCH OTHER LOAN DOCUMENTS) SHALL BE GOVERNED BY, CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH OF PENNSYLVANIA, WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES. (b) CERTAIN WAIVERS. THE BORROWER HEREBY IRREVOCABLY AND UNCONDITIONALLY: (i) AGREES THAT ANY ACTION, SUIT OR PROCEEDING BY ANY PERSON ARISING FROM OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR ANY STATEMENT, COURSE OF CONDUCT, ACT, OMISSION, OR EVENT OCCURRING IN CONNECTION HEREWITH OR THEREWITH (COLLECTIVELY, "RELATED LITIGATION") MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION SITTING IN ALLEGHENY COUNTY, PENNSYLVANIA, SUBMITS TO THE JURISDICTION OF SUCH COURTS, AND TO THE FULLEST EXTENT PERMITTED BY LAW AGREES THAT IT WILL NOT BRING ANY RELATED LITIGATION IN ANY OTHER FORUM (BUT NOTHING HEREIN SHALL AFFECT THE RIGHT OF ANY LENDER PARTY TO BRING ANY ACTION, SUIT OR PROCEEDING IN ANY OTHER FORUM); (ii) WAIVES ANY OBJECTION WHICH IT MAY HAVE AT ANY TIME TO THE LAYING OF VENUE OF ANY RELATED LITIGATION BROUGHT IN ANY SUCH COURT, WAIVES ANY CLAIM THAT ANY SUCH RELATED LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM, AND WAIVES ANY RIGHT TO OBJECT, WITH RESPECT TO ANY RELATED LITIGATION BROUGHT IN ANY SUCH COURT, THAT SUCH COURT DOES NOT HAVE JURISDICTION OVER THE BORROWER; (iii) CONSENTS AND AGREES TO SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER LEGAL PROCESS IN ANY RELATED LITIGATION BY REGISTERED OR CERTIFIED U.S. MAIL, POSTAGE PREPAID, TO THE BORROWER AT THE ADDRESS FOR NOTICES DESCRIBED IN SECTION 10.05 HEREOF, AND CONSENTS AND AGREES THAT SUCH SERVICE SHALL CONSTITUTE IN EVERY RESPECT VALID AND EFFECTIVE SERVICE (BUT NOTHING HEREIN SHALL AFFECT THE VALIDITY OR EFFECTIVENESS OF PROCESS SERVED IN ANY OTHER MANNER PERMITTED BY LAW); AND (iv) WAIVES THE RIGHT TO TRIAL BY JURY IN ANY RELATED LITIGATION. (c) LIMITATION OF LIABILITY. TO THE FULLEST EXTENT PERMITTED BY LAW, NO CLAIM MAY BE MADE BY THE BORROWER AGAINST ANY LENDER PARTY OR ANY AFFILIATE, DIRECTOR, OFFICER, EMPLOYEE, ATTORNEY OR AGENT OF ANY OF THEM FOR ANY SPECIAL, INCIDENTAL, INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES IN RESPECT OF ANY CLAIM ARISING FROM OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR ANY STATEMENT, COURSE OF CONDUCT, ACT, OMISSION, OR EVENT OCCURRING IN CONNECTION HEREWITH OR THEREWITH (WHETHER FOR BREACH OF CONTRACT, TORT OR ANY OTHER THEORY OF LIABILITY). THE BORROWER HEREBY WAIVES, RELEASES AND AGREES NOT TO SUE UPON ANY CLAIM FOR ANY SUCH DAMAGES, WHETHER SUCH CLAIM PRESENTLY EXISTS OR ARISES HEREAFTER AND WHETHER OR NOT SUCH CLAIM IS KNOWN OR SUSPECTED TO EXIST IN ITS FAVOR. [Remainder of page intentionally left blank] -79- 77 IN WITNESS WHEREOF, the parties hereto, by their officers thereunto duly authorized, have executed and delivered this Agreement as of the date first above written. PRIMARK CORPORATION By /s/ STEPHEN H. CURRAN ------------------------------------------ Stephen H. Curran Senior Vice President and Chief Financial Officer Address for Notices: Primark Corporation 1000 Winter Street, Suite 4300N Waltham, MA 02154 Attn: Stephen H. Curran, Senior Vice President and Chief Financial Officer Telephone: 617-487-2140 Facsimile: 617-890-6129 -80- 78 MELLON BANK, N.A., individually and as Agent By /s/ R. JANE WESTRICH ------------------------------------------- R. Jane Westrich Vice President Initial Revolving Credit Committed Amount: $75,000,000 Commitment Percentage: 100% Address for Notices: Mellon Bank, N.A. Loan Administration Three Mellon Bank Center Room 153-2332 Pittsburgh, PA 15259-0003 Attn: Terpsie Katsafanas Telephone: 412-234-4769 Facsimile: 412-236-2028 With a copy to: Mellon Bank, N.A. One Boston Place, 6th Floor Boston, MA 02108 Attn: R. Jane Westrich, Vice President Telephone: 617-722-7969 Facsimile: 617-722-3516 -81- 79 ANNEX A TO REVOLVING CREDIT AGREEMENT DEFINITIONS; CONSTRUCTION 1.01. CERTAIN DEFINITIONS. In addition to other words and terms defined elsewhere in this Agreement, as used in this Agreement the following words and terms defined have the meanings given them below, unless the context of this Agreement otherwise clearly requires. "Adjusted Acquisition Consideration" in connection with an acquisition of a type referred to in clause (y) or (z) of Section 7.08 hereof by the Borrower or a Subsidiary of the Borrower means the amount, not less than zero, equal to, without duplication, the sum of: (a) the gross consideration paid or payable by the Borrower and its Subsidiaries in connection with such acquisition (including, without limitation, the purchase price therefor and transaction expenses), with non-cash consideration valued at its Fair Market Value on the closing date of the acquisition; provided, that for purposes of this clause (a) (i) the value of consideration in the form of Shares of Capital Stock of the Borrower or options or warrants therefor shall be deemed zero, and (ii) the value of consideration in the form of Indebtedness or other deferred payment obligations of the Borrower or its Subsidiaries (exclusive of Indebtedness or other deferred payment obligations payable and paid exclusively in Shares of Capital Stock of the Borrower or options or warrants therefor) shall be deemed the maximum aggregate amount of all payments which in any circumstances may be required thereunder, as determined at the time such Indebtedness or other deferred payment obligation is incurred (except that, for purposes of this clause (ii), interest on Indebtedness accruing after such determination date at a market rate shall be excluded from such maximum aggregate amount), plus (b) the aggregate Indebtedness and Guarantee Equivalents assumed or incurred, directly or indirectly, by the Borrower or any Subsidiary of the Borrower in connection with such acquisition (including, in the case of an acquisition of any or all of the Shares of Capital Stock or other equity interests of a Person, the aggregate Indebtedness and Guarantee Equivalents of such Person), exclusive of Indebtedness and Guarantee Equivalents of the Person being acquired constituting current accounts payable of such Person on normal trade terms to trade creditors arising out of purchases of goods or services in the ordinary course of business and not incurred in contemplation of such acquisition, minus (c) the aggregate cash and Cash Equivalent Investments (valued at the lower of cost or market) acquired by the Borrower and its Subsidiaries in such acquisition (including, in the case of an acquisition of all, but not less than all, of the Shares of Capital Stock or other A-1 80 equity interests of a Person, the aggregate cash and Cash Equivalent Investments of such Person, it being understood that in the event that the Borrower and its Subsidiaries acquire less than all of the Shares of Capital Stock or other equity interests of a Person, no part of the cash or Cash Equivalent Investments of such Person shall be deemed within the scope of this clause (c)); provided, that in the event that the Borrower and its Subsidiaries acquire all of the Shares of Capital Stock or other equity interests of a Person, the cash and Cash Equivalent Investments of such Person shall be deemed within the scope of this clause (c) only in the event that the relevant acquisition agreement requires the amount of cash and Cash Equivalent Investments of such Person to be determined at the closing date of the acquisition and provides for an adjustment to the purchase price based on such amount. "Advance" shall mean any loan, advance or other extension of credit, direct or indirect. "Affected Lender" shall have the meaning set forth in Section 2.03(e) hereof. "Affiliate" of a Person shall mean any Person which directly or indirectly controls, or is controlled by, or is under common control with, such Person. For purposes of the preceding sentence, "control" of a Person shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by contract or otherwise, and in any case shall include, without limitation, (a) being a director or officer (or a Person having powers analogous to those of a corporate director or officer) of such Person, or of a Person that directly or indirectly controls such Person, (b) having direct or indirect ownership (beneficially or of record) of, or direct or indirect power to vote, 30% or more of the outstanding Shares of Capital Stock of any class of such Person having ordinary voting power for the election of directors (or in the case of a Person that is not a Corporation, 30% or more of any class of equity interest having voting or control power analogous to corporate common stock), and (b) being a general partner of such Person, or of a Person having direct or indirect control over a general partner of such Person. "Applicable Margin" shall have the meaning set forth in Section 2.03(b) hereof. "Assured Obligation" shall have the meaning given that term in the definition of "Guaranty Equivalent." "Base Rate" for any day shall mean the greater of (a) the Prime Rate for such day or (b) 0.50% plus the Federal Funds Effective Rate for such day, such interest rate to change automatically from time to time effective as of the effective date of each change in the Prime Rate or the Federal Funds Effective Rate. "Base Rate Option" shall have the meaning set forth in Section 2.03(a) hereof. "Base Rate Portion" of any Loan or Loans shall mean at any time the portion, including the whole, of such Loan or Loans bearing interest at such time (i) under the Base Rate Option or (ii) in accordance with Section 2.09(c)(ii) hereof. If no Loan or Loans is specified, "Base Rate Portion" shall refer to the Base Rate Portion of all Loans outstanding at such time. A-2 81 "Borrower Pledge Agreement" shall mean the Pledge Agreement of approximately even date herewith between the Borrower and the Collateral Agent, as amended, modified or supplemented from time to time. "Broker-Dealer" shall mean a Person who is, or is registered as, a broker, dealer, municipal securities dealer, government securities broker or government securities dealer under the Securities Exchange Act of 1934, as amended, or under any state securities law, or who has a comparable status under any securities law of any other Governmental Authority. "Business Day" shall mean any day other than a Saturday, Sunday, public holiday under the laws of the Commonwealth of Pennsylvania or other day on which banking institutions are authorized or obligated to close in the city in which is located the Agent's Office. "Capital Expenditures" of any Person shall mean, for any period, all expenditures (whether paid in cash or accrued as liabilities during such period) of such Person during such period which would be classified as capital expenditures in accordance with GAAP (including, without limitation, expenditures for maintenance and repairs which are capitalized, and Capitalized Leases to the extent an asset is recorded in connection therewith in accordance with GAAP). "Capitalized Lease" shall mean at any time any lease which is, or is required under GAAP to be, capitalized on the balance sheet of the lessee at such time, and "Capitalized Lease Obligation" of any Person at any time shall mean the aggregate amount which is, or is required under GAAP to be, reported as a liability on the balance sheet of such Person at such time as lessee under a Capitalized Lease. "Capitalized Software" of any Person shall mean, for any period, all expenditures (whether paid in cash or accrued as liabilities during such period) of such Person which would be classified as capitalized software in accordance with GAAP. "Cash Equivalent Investments" shall have the meaning given that term in the Collateral Agency Agreement. "CERCLA" shall mean the Comprehensive Environmental Response, Compensation and Liability Act, as amended, and any successor statute of similar import, and regulations thereunder, in each case as in effect from time to time. "CERCLIS" shall mean the Comprehensive Environmental Response, Compensation and Liability Information System List, as the same may be amended from time to time. "Closing Date" shall mean the date of the first Loan hereunder. "Code" means the Internal Revenue Code of 1986, as amended, and any successor statute of similar import, and regulations thereunder, in each case as in effect from time to time. References to sections of the Code shall be construed also to refer to any successor sections. A-3 82 "Collateral Agency Agreement" shall mean the Collateral Agency Agreement of approximately even date herewith between the Borrower, certain "Revolving Credit Parties," by Mellon Bank, N.A., as Revolving Credit Agent, certain "Term Loan Parties," by Mellon Bank, N.A., as Term Loan Agent, certain "Note Backup Parties," by Mellon Bank, N.A., as Note Backup Agent, and Mellon Bank, N.A., as Collateral Agent, as amended, modified or supplemented from time to time. "Collateral Agent" shall have the meaning given that term in the Collateral Agency Agreement. "Commitment" of a Lender shall mean the Revolving Credit Commitment of such Lender. "Commitment Percentage" of a Lender at any time shall mean the Commitment Percentage for such Lender set forth below its name on the signature page hereof, subject to transfer to another Lender as provided in Section 10.14 hereof. "Consolidated Cash Interest Expense" for any period shall mean the total cash interest expense payable by the Borrower and its Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP. "Consolidated EBITDA" for any period shall mean the sum of (a) Consolidated Net Income for such period, (b) Consolidated Interest Expense for such period, (c) Consolidated Income Tax Expense for such period, (d) depreciation expense of the Borrower and its Subsidiaries for such period, and (e) amortization expense of the Borrower and its Subsidiaries for such period, minus the sum of (x) extraordinary gains (but not any losses) to the extent included in determining such Consolidated Net Income, and (y) equity earnings (but not any losses) of Affiliates of the Borrower to the extent included in determining Consolidated Net Income for such period, all as determined on a consolidated basis in accordance with GAAP. "Consolidated EBITDA Less Capital Expenditures" for any period shall mean Consolidated EBITDA for such period, minus the sum of Capital Expenditures of the Borrower and its Subsidiaries for such period and, without duplication of amounts included in Capital Expenditures, Capitalized Software of the Borrower and its Subsidiaries for such period, all as determined on a consolidated basis in accordance with GAAP. "Consolidated Fixed Charge Coverage Ratio" for any period shall mean the ratio of the Consolidated EBITDA Less Capital Expenditures for such period to the Consolidated Fixed Charges for such period. "Consolidated Fixed Charges" for any period shall mean the sum of (a) Consolidated Cash Interest Expense for such period, (b) principal payments made by the Borrower and its Subsidiaries during such period with respect to any outstanding Indebtedness (excluding (i) payments of Indebtedness under the Revolving Credit Agreement, (ii) prepayments made at the option of the Borrower of Indebtedness under the Term Loan Agreement, to the extent the amounts so prepaid are not otherwise due during such period, and (iii) payments of the Senior A-4 83 Notes at the scheduled maturity thereof), (c) the amount of Stock Payments made by the Borrower and its Subsidiaries during such period (excluding (i) Stock Payments made to the Borrower or its Subsidiaries, and (ii) Stock Payments made solely in Shares of Capital Stock (or warrants, options or rights therefor) of the Borrower) all as determined on a consolidated basis in accordance with GAAP. "Consolidated Funded Debt Ratio (Adjusted)" for any period shall mean the following ratio: (a) the amount, not less than zero, determined as of the last day of such period, equal to (i) Consolidated Funded Indebtedness, minus (ii) the amount, not less than zero, equal to (A) the amount of cash and Cash Equivalent Investments owned by the Borrower and its Subsidiaries, valued at the lower of cost or market, minus (B) $10,000,000, divided by (b) Consolidated EBITDA Less Capital Expenditures for such period. "Consolidated Funded Indebtedness" at any time shall mean Indebtedness (including the current portion thereof) of the Borrower and its Subsidiaries which as of such date would be classified in whole or in part as a long-term liability in accordance with GAAP, and in any event includes (a) Indebtedness under the Credit Facilities and the Senior Notes, (b) any Indebtedness of the Borrower and its Subsidiaries having a final maturity later than one year after the date of incurrence of such Indebtedness, (c) any Indebtedness, regardless of its term, of the Borrower and its Subsidiaries which is renewable or extendable by the obligor to a date later than one year after the date of incurrence of such Indebtedness, and (d) Indebtedness of TIMCO described in Section 7.03(j) hereof. "Consolidated Income Tax Expense" for any period shall mean the charges against income of the Borrower and its Subsidiaries for foreign, federal, state and local income taxes for such period, determined on a consolidated basis in accordance with GAAP. "Consolidated Interest Expense" for any period shall mean the total interest expense of the Borrower and its Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP. "Consolidated Net Income" for any period shall mean the net earnings (or loss) after taxes of the Borrower and its Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP; provided, that there shall be deducted therefrom (a) the income (but not any deficit) of any Person accrued prior to the date it becomes a Subsidiary or is merged into or consolidated with or is otherwise acquired by or combined with the Borrower or any Subsidiary in a business combination accounted for as a pooling of interests, including, in the case of a successor to the Borrower or any Subsidiary by consolidation or merger or transfer of assets, any earnings of the successor Corporation prior to such consolidation, merger or transfer of assets, (b) income (but not any loss) accounted for by the Borrower on the equity method resulting from an ownership interest in any Person, but the deduction for such equity income shall be reversed to the extent that during such period an amount not in excess of such income has been actually received by the Borrower or such Subsidiary in the form of cash dividends or similar cash distributions, (c) the undistributed earnings of any Subsidiary to the extent that the declaration or payment of dividends or similar distributions by such Subsidiary is restricted (whether such restriction arises by operation of Law, by agreement, by its certificate or articles of incorporation A-5 84 or by-laws (or other constituent documents), or otherwise), (d) any gain arising from the acquisition of any securities, or the extinguishment, under GAAP, of any Indebtedness, of the Borrower or any Subsidiary, and (e) income (but not any loss) from discontinued operations of the Borrower or any Subsidiary. "Consolidated Net Worth" at any time shall mean the total amount of common stockholders' equity and preferred stock of the Borrower and its consolidated Subsidiaries at such time, determined on a consolidated basis in accordance with GAAP; provided, that each item of the following types shall be deducted, to the extent such item is positive and is otherwise included therein: (a) any write-ups or other revaluation after the Closing Date in the book value of any asset owned by the Borrower or any of its consolidated Subsidiaries (other than write-ups resulting from the acquisition of assets of a business made within one year after such acquisition and accounted for by purchase accounting, and write-ups resulting from the valuation in the ordinary course of business of investment securities and inventory at the lower of cost or market), (b) all investments in and loans and Advances to (i) unconsolidated Subsidiaries of the Borrower, and (ii) Persons that are not Subsidiaries of the Borrower (other than Cash Equivalent Investments), (c) treasury stock, (d) assets attributable to interests held by Persons other than the Borrower and its Subsidiaries that are Wholly Owned Subsidiaries of the Borrower, (e) Disqualified Capital Stock of the Borrower or of any Subsidiary of the Borrower, and (f) the amount, whether positive or negative, of foreign currency translation adjustments to stockholders' equity of the Borrower and its Subsidiaries, all of the foregoing as determined in accordance with GAAP. "Consolidated Net Worth (Adjusted)" at any time shall mean Consolidated Net Worth at such time plus the lesser of (a) $50,000,000, or (b) the sum of (i) aggregate writeoffs of goodwill on or after January 1, 1997 resulting from an impairment loss pursuant to Statement of Financial Accounting Standards No. 121, made by the Borrower in accordance with GAAP, and (ii) aggregate writeoffs of the cost of computer software purchased in an acquisition of the Person which developed such software (or by acquisition of assets comprising a line of business of such Person which includes such software) on or after January 1, 1997, made pursuant to Statement of Financial Accounting Standards No. 86, provided that such writeoffs are made at the time of the related acquisition and are made by the Borrower in accordance with GAAP. "Contingent Indemnification Obligations" shall have the meaning given that term in the Collateral Agency Agreement. "Controlled Group Member" shall mean each trade or business (whether or not incorporated) which together with the Borrower or any Subsidiary of the Borrower is treated as a controlled group or single employer under Sections 4001(a)(14) or 4001(b)(1) of ERISA or Sections 414(b), (c), (m) or (o) of the Code. "Corporation" shall mean a corporation, limited liability company or business trust organized under the Laws of any state of the United States, a company limited by shares incorporated under the Laws of England and Wales, or any similar entity organized under the A-6 85 Laws of any other jurisdiction, the owners of which are not by operation of Law generally liable for the obligations of such entity. "Corresponding Source of Funds" shall mean, in the case of any Funding Segment of the Euro-Rate Portion, the proceeds of hypothetical receipts by a Notional Euro-Rate Funding Office or by a Lender through a Notional Euro-Rate Funding Office of one or more Dollar deposits in the interbank eurodollar market at the beginning of the Euro-Rate Funding Period corresponding to such Funding Segment having maturities approximately equal to such Euro-Rate Funding Period and in an aggregate amount approximately equal to such Lender's Pro Rata share of such Funding Segment. "Credit Facilities" shall mean the Revolving Credit Agreement, the Term Loan Agreement and the Note Backup Agreement. "Datastream" shall mean Datastream International Limited, a corporation incorporated under the Laws of England and Wales. "Disqualified Capital Stock" shall mean any Shares of Capital Stock that, other than solely at the option of the issuer thereof, by their terms (or by the terms of any security into which they are convertible or exchangeable) are, or upon the happening of an event or the passage of time would be, required to be redeemed or repurchased, in whole or in part, or have, or upon the happening of an event or the passage of time would have, a redemption or similar payment due on or prior to the Facilities Termination Date. "Dollar," "Dollars" and the symbol "$" shall mean lawful money of the United States of America. "Environmental Affiliate": a Person ("Y") shall be an "Environmental Affiliate" of another Person ("X"), if X has retained or assumed, or is otherwise liable (contingently or otherwise) for, any liability (contingent or other) of Y with respect to any Environmental Claim, whether such retention, assumption or liability on the part of X arises by agreement, by Law or otherwise. "Environmental Approvals" shall mean any Governmental Action pursuant to or required under any Environmental Law. "Environmental Claim" shall mean, with respect to any Person (the "specified Person"), any action, suit, proceeding, investigation, notice, claim, complaint, demand, request for information or other communication (written or oral) by any other Person (including but not limited to any Governmental Authority, citizens' group or present or former employee of the specified Person) alleging, asserting or claiming any actual or potential liability on the part of the specified Person for investigatory costs, cleanup costs, governmental response costs, natural resources damages, property damages, personal injuries, fines or penalties, arising out of, based on or resulting from (a) the presence, or release into the environment, of any Environmental Concern Materials at any location, whether or not owned by such Person, or (b) circumstances forming the basis of any violation or alleged violation of any Environmental Law. A-7 86 "Environmental Cleanup Site" shall mean any location which is listed or proposed for listing on the National Priorities List, on CERCLIS or on any similar state list of sites requiring investigation or cleanup, or which is the subject of any pending or threatened action, suit, proceeding or investigation related to or arising from any alleged violation of any Environmental Law. "Environmental Concern Materials" shall mean (a) any flammable substance, explosive, radioactive material, hazardous material, hazardous waste, toxic substance, solid waste, pollutant, contaminant or any related material, raw material, substance, product or by-product of any substance, as the foregoing terms are defined in, or any other substance regulated by, any Environmental Law (including but not limited to any "hazardous substance" as defined in CERCLA or any similar state Law), (b) any toxic chemical from or related to industrial, commercial or institutional activities, and (c) asbestos, gasoline, diesel fuel, motor oil, waste and used oil, heating oil and other petroleum products or compounds, polychlorinated biphenyls, radon and urea formaldehyde. "Environmental Law" shall mean any Law, whether now existing or subsequently enacted or amended, relating to (a) pollution or protection of the environment, including natural resources, (b) exposure of Persons, including but not limited to employees, to Environmental Concern Materials, (c) protection of the public health or welfare from the effects of products, by-products, wastes, emissions, discharges or releases of Environmental Concern Materials or (d) regulation of the manufacture, use or introduction into commerce of Environmental Concern Materials including their manufacture, formulation, packaging, labeling, distribution, transportation, handling, storage or disposal. Without limitation, "Environmental Law" shall also include any Environmental Approval and the terms and conditions thereof. "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as amended, and any successor statute of similar import, and regulations thereunder, in each case as in effect from time to time. References to sections of ERISA shall be construed also to refer to any successor sections. "Euro-Rate" for any day, as used herein, shall mean for each Funding Segment of the Euro-Rate Portion corresponding to a proposed or existing Euro-Rate Funding Period the rate per annum determined by the Agent by dividing (the resulting quotient to be rounded upward to the nearest 1/100 of 1%) (a) the rate of interest (which shall be the same for each day in such Euro-Rate Funding Period) determined in good faith by the Agent in accordance with its usual procedures (which determination shall be conclusive) to be the average of the rates per annum for deposits in Dollars offered to major money center banks in the London interbank market at approximately 11:00 a.m., London time, two London Business Days prior to the first day of such Euro-Rate Funding Period for delivery on the first day of such Euro-Rate Funding Period in amounts comparable to such Funding Segment and having maturities comparable to such Funding Period by (b) a number equal to 1.00 minus the Euro-Rate Reserve Percentage. "Euro-Rate Funding Period" shall have the meaning set forth in Section 2.03(c) hereof. A-8 87 "Euro-Rate Option" shall have the meaning set forth in Section 2.03(a) hereof. "Euro-Rate Portion" of any part of any Loan or Loans shall mean at any time the portion, including the whole, of such part of such Loan or Loans bearing interest at any time under the Euro-Rate Option or at a rate calculated by reference to the Euro-Rate under Section 2.09(c)(i) hereof. If no Loan or Loans is specified, "Euro-Rate Portion" shall refer to the Euro-Rate Portion of all Loans outstanding at such time. "Euro-Rate Reserve Percentage" for any day shall mean the percentage (expressed as a decimal, rounded upward to the nearest 1/100 of 1%), as determined in good faith by the Agent (which determination shall be conclusive), which is in effect on such day as prescribed by the Board of Governors of the Federal Reserve System (or any successor) representing the maximum reserve requirement (including, without limitation, supplemental, marginal and emergency reserve requirements) with respect to eurocurrency funding (currently referred to as "Eurocurrency liabilities") of a member bank in such System. The Euro-Rate shall be adjusted automatically as of the effective date of each change in the Euro-Rate Reserve Percentage. The Euro-Rate Option shall be calculated in accordance with the foregoing whether or not any Lender is actually required to hold reserves in connection with its eurocurrency funding or, if required to hold such reserves, is required to hold reserves at the "Euro-Rate Reserve Percentage" as herein defined. "Event of Default" shall mean any of the Events of Default described in Section 8.01 hereof. "Facilities Termination Date" shall mean the later to occur of the Revolving Credit Maturity Date, the Term Loan Maturity Date and the Note Backup Final Expiration Date. "Fair Market Value" shall mean, with respect to any asset, the sale value that would be obtained in an arm's length transaction between an informed and willing seller under no compulsion to sell and an informed and willing buyer. "Federal Funds Effective Rate" for any day shall mean the rate per annum (rounded upward to the nearest 1/100 of 1%) determined by the Agent (which determination shall be conclusive) to be the rate per annum announced by the Federal Reserve Bank of New York (or any successor) as being the weighted average of the rates on overnight Federal funds transactions arranged by Federal funds brokers on the previous trading day, as computed and announced by such Federal Reserve Bank (or any successor) in substantially the same manner as such Federal Reserve Bank computes and announces the weighted average it refers to as the "Federal Funds Effective Rate" as of the date of this Agreement; provided, that if such Federal Reserve Bank (or its successor) does not so announce such rate for such previous trading day, the "Federal Funds Effective Rate" shall be the average rate charged to Mellon Bank, N.A. on such previous trading day on such transactions as determined by the Agent. "Funding Periods" shall have the meaning set forth in Section 2.03(c) hereof. A-9 88 "Funding Segment" of the Euro-Rate Portion at any time shall mean the entire principal amount of such Portion to which at the time in question there is applicable a particular Funding Period beginning on a particular day and ending on a particular day. (By definition, each such Portion is at all times composed of an integral number of discrete Funding Segments and the sum of the principal amounts of all Funding Segments of any such Portion at any time equals the principal amount of such Portion at such time.) "GAAP" shall have the meaning given that term in Section 1.03 of this Annex A. "Governmental Action" shall have the meaning set forth in Section 4.04 hereof. "Governmental Authority" shall mean any government or political subdivision or any agency, authority, bureau, central bank, commission, department or instrumentality of either, or any court, tribunal, grand jury or arbitrator, in each case whether foreign or domestic. "Guaranty Equivalent": A Person (the "Deemed Guarantor") shall be deemed to subject to a Guaranty Equivalent in respect of any obligation (the "Assured Obligation") of another Person (the "Deemed Obligor") if the Deemed Guarantor directly or indirectly guarantees, becomes surety for, endorses, assumes, agrees to indemnify the Deemed Obligor against, or otherwise agrees, becomes or remains liable (contingently or otherwise) for, such Assured Obligation, in whole or in part. Without limitation, a Guaranty Equivalent shall be deemed to exist if a Deemed Guarantor agrees, becomes or remains liable (contingently or otherwise), directly or indirectly, to do any of the following: (a) to purchase or assume, or to supply funds for the payment, purchase or satisfaction of, an Assured Obligation, (b) to make any loan, advance, capital contribution or other investment in, or to purchase or lease any property or services from, a Deemed Obligor (i) to maintain the solvency of the Deemed Obligor, (ii) to enable the Deemed Obligor to meet any other financial condition, (iii) to enable the Deemed Obligor to satisfy any Assured Obligation or to make any Stock Payment or any other payment, or (iv) to assure the holder of such Assured Obligation against loss, (c) to purchase or lease property or services from the Deemed Obligor regardless of the non-delivery of or failure to furnish of such property or services, (d) in a transaction having the characteristics of a take-or-pay or throughput contract or as described in paragraph 6 of FASB Statement of Financial Accounting Standards No. 47, or (e) in respect of any other transaction the effect of which is to assure the payment or performance (or payment of damages or other remedy in the event of nonpayment or nonperformance) in whole or in part of any Assured Obligation. "ICV" shall mean ICV Limited, a Corporation incorporated under the Laws of England and Wales. "ICV Notes" shall have the meaning given that term in Section 7.03(c) hereof. "Indebtedness" of a Person shall mean the following: (a) all obligations on account of money borrowed by, or credit extended to or on behalf of, or for or on account of deposits with or advances to, such Person; (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments; (c) all obligations of such Person for the deferred purchase price of property or services; (d) all obligations secured by a Lien on property owned by such Person A-10 89 (whether or not assumed), and all obligations of such Person under Capitalized Leases (without regard to any limitation of the rights and remedies of the holder of such Lien or the lessor under such Capitalized Lease to repossession or sale of such property); (e) the stated amount of all letters of credit issued for the account of such Person and, without duplication, the unreimbursed amount of all drafts drawn thereunder, and all other obligations of such Person associated with such letters of credit or draws thereon; (f) all obligations of such Person in respect of acceptances or similar obligations issued for the account of such Person; (g) all obligations of such Person under a product financing or similar arrangement described in paragraph 8 of FASB Statement of Accounting Standards No. 49 or any similar requirement of GAAP; (h) all obligations of such Person under any interest rate or currency swap, cap, floor, collar, future, forward or option agreement, or other interest rate or currency protection agreement; and (i) the maximum fixed repurchase price of any Disqualified Capital Stock of such Person. "Initial Revolving Credit Committed Amount" shall have the meaning set forth in Section 2.01(a) hereof. "Interest Rate Hedging Agreement" shall mean an interest rate swap, cap or collar agreement. "Issuing Banks" shall mean (x) Mellon Bank, N.A., and (y) such of its affiliates as Mellon Bank, N.A. may in its discretion (subject to the approval of the Borrower, such approval not to be unreasonably withheld) from time to time elect to cause to issue Letters of Credit. "Law" shall mean any law (including common law), constitution, statute, treaty, convention, regulation, rule, ordinance, order, injunction, writ, decree or award of any Governmental Authority. "Lender" shall mean any of the Lenders listed on the signature pages hereof, subject to the provisions of Section 10.14 hereof pertaining to Persons becoming or ceasing to be Lenders. "Lender" shall in any event include the Issuing Banks and the Swingline Lender. "Lender Indemnified Parties" shall have the meaning given that term in Section 10.06(c) hereof. "Lender Parties" shall mean the Lenders and the Agent. "Letter of Credit" shall mean any letter of credit outstanding under this Agreement from time to time (and is synonymous with the term "Revolving Credit LOC" as defined in the Collateral Agency Agreement). "Letter of Credit Collateral Account" shall mean the "Revolving Credit LOC Collateral Account" as defined in the Collateral Agency Agreement. "Letter of Credit Exposure" shall mean the "Revolving Credit LOC Exposure" as defined in the Collateral Agency Agreement). A-11 90 "Letter of Credit Facing Fee" shall have the meaning given that term in Section 3.01(e) hereof. "Letter of Credit Fee" shall have the meaning given that term in Section 3.01(d) hereof. "Letter of Credit Participating Interest" shall have the meaning given that term in Section 3.03(a) hereof. "Letter of Credit Reimbursement Obligation" with respect to a Letter of Credit means the obligation of the Borrower to reimburse the Issuing Bank for Letter of Credit Unreimbursed Draws, together with interest thereon. "Letter of Credit Undrawn Availability" shall mean the "Revolving Credit LOC Undrawn Availability" as defined in the Collateral Agency Agreement. "Letter of Credit Unreimbursed Draws" shall mean "Revolving Credit LOC Unreimbursed Draws" as defined in the Collateral Agency Agreement. "Lien" shall mean any mortgage, deed of trust, pledge, lien, security interest, charge or other encumbrance or security arrangement of any nature whatsoever, including but not limited to any conditional sale or title retention arrangement, and any assignment, deposit arrangement or lease intended as, or having the effect of, security. "Loan" shall mean any loan by a Lender to the Borrower under this Agreement, and "Loans" shall mean all Loans made by the Lenders under this Agreement, including Revolving Credit Loans and Swingline Loans. "Loan Documents" shall mean this Agreement, the Notes, the Transfer Supplements, the Letters of Credit, the Shared Security Documents and the Origination Fee Letter. "Loan Obligations" shall mean the "Revolving Credit Obligations" as defined in the Collateral Agency Agreement. "London Business Day" shall mean a day for dealing in deposits in Dollars by and among banks in the London interbank market and which is a Business Day. "Material Adverse Effect" shall mean: (a) a material adverse effect on the business, operations, condition (financial or otherwise) or prospects of the Borrower and its Subsidiaries, taken as a whole, (b) a material adverse effect on the ability of the Borrower to perform or comply with any of the terms and conditions of any Loan Document, or (c) an adverse effect on the legality, validity, binding effect, enforceability or admissibility into evidence of any Loan Document, or the ability of the Collateral Agent or any Lender Party to enforce any rights or remedies under or in connection with any Loan Document. "Multiemployer Plan" shall mean any employee benefit plan which is a "multiemployer plan" within the meaning of Section 4001(a)(3) of ERISA and to which the Borrower, any A-12 91 Subsidiary of the Borrower or any other Controlled Group Member has or had an obligation to contribute. "Net Sale Proceeds" shall have the meaning given that term in Section 2.07(b) hereof. "Note" or "Notes" shall mean the Revolving Credit Note(s) and the Swingline Note of the Borrower executed and delivered under this Agreement. "Note Backup Agreement" shall mean the Note Backup Agreement of even date herewith by and among the Borrower, the lenders parties thereto from time to time, the issuing bank referred to therein, and Mellon Bank, N.A., as Agent, as the same may be amended, modified or supplemented from time to time in accordance with this Agreement. "Note Backup Final Expiration Date" shall mean the final scheduled maturity of Indebtedness under the Note Backup Agreement (being the later of (i) the latest expiration date permitted under the Note Backup Credit Agreement for letters of credit issued thereunder, or (ii) the final scheduled maturity of the Borrower's reimbursement obligation under the Note Backup Agreement). "Notional Euro-Rate Funding Office" shall have the meaning given to that term in Section 2.12(a) hereof. "Obligations" shall have the meaning given that term in the Collateral Agency Agreement. "Office," when used in connection with the Agent, shall mean its office located at One Mellon Bank Center, Pittsburgh, Pennsylvania 15258, or at such other office or offices of the Agent or any branch, subsidiary or affiliate thereof as may be designated in writing from time to time by the Agent to the Borrower. "Option" shall mean the Base Rate Option or the Euro-Rate Option. "Origination Fee Letter" shall have the meaning given that term in Section 5.01(q) hereof. "Participants" shall have the meaning set forth in Section 10.14(b) hereof. "PBGC" means the Pension Benefit Guaranty Corporation established under Title IV of ERISA or any other governmental agency, department or instrumentality succeeding to the functions of said corporation. "Pension-Related Event" shall mean any of the following events or conditions: (a) Any action is taken by any Person (i) to terminate, or which would result in the termination of, a Plan pursuant to the distress termination provisions of A-13 92 Section 4041(c) of ERISA or (ii) to have a trustee appointed for a Plan pursuant to Section 4042 of ERISA; (b) PBGC notifies any Person of its determination that an event described in Section 4042 of ERISA has occurred with respect to a Plan, that a Plan should be terminated, or that a trustee should be appointed for a Plan; (c) Any Reportable Event occurs with respect to a Plan; (d) Any action (other than becoming obligated to contribute to a Multiemployer Plan) occurs or is taken which could result in the Borrower, any Subsidiary of the Borrower or any Controlled Group Member becoming subject to liability for a complete or partial withdrawal by any Person from a Multiemployer Plan (including, without limitation, seller liability incurred under Section 4204(a)(2) of ERISA), or the Borrower, any Subsidiary of the Borrower or any Controlled Group Member receives from any Multiemployer Plan a notice or demand for payment on account of any such alleged or asserted liability; (e) (i) There occurs any failure to meet the minimum funding standard under Section 302 of ERISA or Section 412 of the Code with respect to a Plan, or any tax return is filed showing any tax payable under Section 4971(a) of the Code with respect to any such failure, or the Borrower, any Subsidiary of the Borrower or any Controlled Group Member receives a notice of deficiency from the Internal Revenue Service with respect to any alleged or asserted such failure, (ii) any request is made by any Person for a variance from the minimum funding standard, or an extension of the period for amortizing unfunded liabilities, with respect to a Plan, or (iii) the Borrower, any Subsidiary of the Borrower or any Controlled Group Member fails to pay the PBGC premium with respect to a Plan when due and it remains unpaid for more than 30 days thereafter; or (f) There occurs any "prohibited transaction" within the meaning of Section 406 of ERISA or Section 4975 of the Code involving a Plan. "Permitted Liens" shall have the meaning given that term in Section 7.02 hereof. "Permitted Mergers" shall have the meaning given that term in Section 7.08 hereof. "Person" shall mean an individual, Corporation, partnership, trust, limited liability company, unincorporated association, joint venture, joint-stock company, Governmental Authority or any other entity. "Plan" shall mean (a) any employee pension benefit plan within the meaning of Section 3(2) of ERISA covered by Title IV of ERISA by reason of Section 4021 of ERISA, of which the Borrower, any Subsidiary of the Borrower or any Controlled Group Member is or has been within the preceding five years a "contributing sponsor" within the meaning of Section 4001(a)(13) of ERISA, or which is or has been within the preceding five years A-14 93 maintained for employees of the Borrower, any Subsidiary of the Borrower or any Controlled Group Member and (b) any employee pension benefit plan within the meaning of Section 3(2) of ERISA which is subject to Title I of ERISA by reason of Section 4 of ERISA and is subject to the minimum funding requirements of Section 302 of ERISA or Section 412 of the Code, of which the Borrower, any Subsidiary of the Borrower or any Controlled Group Member is or has been within the preceding five years an employer liable for contributions within the meaning of Section 302(c)(11) of ERISA or Section 412(c)(11) of the Code, or which is or has been within the preceding five years maintained for employees of the Borrower, any Subsidiary of the Borrower or any Controlled Group Member. "Portion" shall mean the Prime Rate Portion or the Euro-Rate Portion. "Postretirement Benefits" of a Person shall mean any benefits, other than retirement income, provided by such Person to retired employees, or to their spouses, dependents or beneficiaries, including, without limitation, group medical insurance or benefits, or group life insurance or death benefits. "Postretirement Benefit Obligation" of a Person shall mean that portion of the actuarial present value of all Postretirement Benefits expected to be provided by such Person which is attributable to employees' service rendered to the date of determination (assuming that such liability accrues ratably over an employee's working life to the earlier of his date of retirement or the date on which the employee would first become eligible for full benefits), reduced by the fair market value as of the date of determination of any assets which are segregated from the assets of such Person and which have been restricted so that they cannot be used for any purpose other than to provide Postretirement Benefits or to defray related expenses. "Potential Default" shall mean any event or condition which with notice, passage of time or a determination by the Agent or the Lenders, or any combination of the foregoing, would constitute an Event of Default. "Primark Economics" shall mean Primark Decision Economics, Inc. "Prime Rate" as used herein, shall mean the interest rate per annum announced from time to time by Mellon Bank, N.A. as its prime rate, such rate to change automatically effective as of the effectiveness of each announced change in such prime rate. "Pro Rata" shall mean from or to each Lender in proportion to such Lender's applicable Commitment Percentage. "Purchasing Lender" shall have the meaning set forth in Section 10.14(c) hereof. "Recapture Asset Amount" shall have the meaning given that term in Section 2.07(b) hereof. "Recapture Asset Disposition" shall have the meaning given that term in Section 2.07(b) hereof. A-15 94 "Register" shall have the meaning set forth in Section 10.14(d) hereof. "Regular Monthly Payment Date" shall mean the last Business Day of each month after the Closing Date. "Regular Quarterly Payment Date" shall mean the last Business Day of each September, December, March and June after the Closing Date. "Reportable Event" means (i) a reportable event described in Section 4043 of ERISA and regulations thereunder, (ii) a withdrawal by a substantial employer from a Plan to which more than one employer contributes, as referred to in Section 4063(b) of ERISA, (iii) a cessation of operations at a facility causing more than twenty percent (20%) of Plan participants to be separated from employment, as referred to in Section 4062(e) of ERISA, or (iv) a failure to make a required installment or other payment with respect to a Plan when due in accordance with Section 412 of the Code or Section 302 of ERISA which causes the total unpaid balance of missed installments and payments (including unpaid interest) to exceed $250,000. "Required Lenders" shall mean Lenders holding in the aggregate 51% of the Commitment Percentages. "Responsible Officer" of a Person shall mean its Chairman of the Board, President, Chief Financial Officer or Treasurer. "Revolving Credit Agreement" shall mean this Revolving Credit Agreement as amended, modified or supplemented from time to time (and is synonymous with references to "this Agreement" herein). "Revolving Credit Commitment" shall have the meaning set forth in Section 2.01(a) hereof. "Revolving Credit Commitment Fee" shall have the meaning set forth in Section 2.01(e) hereof. "Revolving Credit Commitment Fee Percentage" shall have the meaning set forth in Section 2.01(e) hereof. "Revolving Credit Committed Amount" shall have the meaning set forth in Section 2.01(a) hereof. "Revolving Credit Exposure" of any Lender at any time shall mean the sum at such time of the outstanding principal amount of such Lender's Revolving Credit Loans plus such Lender's Pro Rata share of the sum of the aggregate Letter of Credit Exposure and the aggregate outstanding principal amount of Swingline Loans. "Revolving Credit Loans" shall have the meaning set forth in Section 2.01(a) hereof. A-16 95 "Revolving Credit Maturity Date" shall mean October 15, 2000. "Revolving Credit Note" shall mean the promissory note of the Borrower executed and delivered under Section 2.01(c) hereof and any promissory note issued in substitution therefor pursuant to Sections 2.12(b) or 10.14(c) hereof. "Secured Parties" shall have the meaning given that term in the Collateral Agency Agreement. "Senior Note Indenture" shall mean the Indenture dated as of October 18, 1993 between the Borrower and The First National Bank of Boston, as Trustee, relating to the Senior Notes, as constituted on the Closing Date. "Senior Notes" shall mean the Borrower's 8 3/4% Senior Notes Due 2000. "Shared Collateral" shall have the meaning given that term in the Collateral Agency Agreement. "Shared Collateral Account" shall have the meaning given that term in the Collateral Agency Agreement. "Shared Security Documents" shall have the meaning given that term in the Collateral Agency Agreement. "Shares of Capital Stock" shall mean shares of capital stock of, membership interest in, beneficial interest in, or similar ownership interest in, a Corporation organized under the Laws of any state of the United States or any other jurisdiction, including, without limitation, in the case of Corporations incorporated under the Laws of England and Wales, equity share capital, ordinary shares and loan stock. "Significant Subsidiary" of Borrower shall mean any Subsidiary of the Borrower (a) which is TASC, Datastream, Disclosure Incorporated, or a Subsidiary of any of the foregoing, (b) which, together with its Subsidiaries, has assets (determined on a consolidated basis) greater than or equal to 5% of the total assets of the Borrower and its Subsidiaries (determined on a consolidated basis) as of the end of the most recently completed fiscal year for which financial information is available, or (c) which, together with its Subsidiaries, has revenues (determined on a consolidated basis) greater than or equal to 5% of the total revenues of the Borrower and its Subsidiaries (determined on a consolidated basis) for the most recent four fiscal quarters for which financial information is available. "Solvent" means: (a) with respect to any Person organized under the Laws of any state of the United States or subject to the U.S. Bankruptcy Code of 1978, as amended, the Uniform Fraudulent Conveyance Act as enacted by any state, the Uniform Fraudulent Transfer A-17 96 Act as enacted by any state or any other applicable U.S. Law pertaining to fraudulent conveyances, fraudulent transfers or preferences at any time, that at such time (i) the sum of the debts and liabilities (including, without limitation, contingent liabilities) of such Person is not greater than all of the assets of such Person at a fair valuation, (ii) the present fair salable value of the assets of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become absolute and matured, (iii) such Person has not incurred, will not incur, does not intend to incur, and does not believe that it will incur, debts or liabilities (including, without limitation, contingent liabilities) beyond such person's ability to pay as such debts and liabilities mature, (iv) such Person is not engaged in, and is not about to engage in, a business or a transaction for which such person's property constitutes or would constitute unreasonably small capital (as such term is used in any Law referred to in the following clause (v)), and (v) such Person is not otherwise insolvent as defined in, or otherwise in a condition which could in any circumstances then or subsequently render any transfer, conveyance, obligation or act then made, incurred or performed by it avoidable or fraudulent pursuant to, any Law that may be applicable to such Person pertaining to bankruptcy, insolvency or creditors' rights (including but not limited to the Bankruptcy Code of 1978, as amended, and, to the extent applicable to such Person, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act, or any other applicable Law pertaining to fraudulent conveyances or fraudulent transfers or preferences); (b) With respect to any Person organized under the Laws of England and Wales or subject to any English insolvency law at any time, that at such time such Person is not insolvent, or unable to pay its debts and is not deemed by an English court to be unable to pay its debts within the meaning of Section 123 of the United Kingdom Insolvency Act of 1986; and (c) With respect to any other Person, that at such time such Person is not insolvent or unable to pay its debts as they come due as contemplated by any applicable insolvency, bankruptcy or similar Law. "Standard Notice" shall mean an irrevocable notice provided to the Agent on a Business Day which is (a) At least one Business Day in advance in the case of selection of, conversion to or renewal of the Base Rate Option or prepayment of any Base Rate Portion; and (b) At least three London Business Days in advance in the case of selection of the Euro-Rate Option or prepayment of any Euro-Rate Portion. Standard Notice must be provided no later than 10:00 a.m., Pittsburgh time, on the last day permitted for such notice. "Stock Payment" by any Person shall mean any dividend, distribution or payment of any nature (whether in cash, securities, or other property) on account of or in respect of any Shares A-18 97 of the Capital Stock (or warrants, options or rights therefor) of such Person, including but not limited to any payment on account of the purchase, redemption, retirement, defeasance or acquisition of any Shares of the Capital Stock (or warrants, options or rights therefor) of such Person, in each case regardless of whether required by the terms of such capital stock (or warrants, options or rights) or any other agreement or instrument. "Subsidiary" of a Person at any time shall mean any Corporation of which a majority (by number of shares or number of votes) of the outstanding Shares of Capital Stock of any class is at such time owned directly or indirectly, beneficially or of record, by such Person or one or more Subsidiaries of such Person, and any partnership, trust or other Person of which a majority of any class of outstanding equity interest is at such time owned directly or indirectly, beneficially or of record, by such Person or one or more Subsidiaries of such Person. For the avoidance of doubt, as used in the preceding sentence "majority" means more than half (and not precisely half). "Substantially Owned Subsidiary" of a Person at any time shall mean any Corporation of which 80% or more of the outstanding Shares of Capital Stock of each class are at such time beneficially owned directly or indirectly by such Person (both on the basis of outstanding shares and on a fully diluted basis). "Swap Agreement" shall have the meaning given that term in the Collateral Agency Agreement. "Swingline Current Availability" shall have the meaning given that term in Section 3.10(a) hereof. "Swingline Lender" shall mean Mellon. "Swingline Loan Participating Interest" shall have the meaning given that term in Section 3.11(a) hereof. "Swingline Loans" shall have the meaning given that term in Section 3.09(a) hereof. "Swingline Note" shall mean the promissory note of the Borrower executed and delivered under Section 3.09(c) hereof, together with all extensions, renewals, refinancings or refundings thereof in whole or part. "Swingline Subfacility Amount" shall have the meaning given that term in Section 3.09(a) hereof. "TASC" shall mean TASC, Inc., a Massachusetts Corporation. "Taxes" shall have the meaning set forth in Section 2.11 hereof. "Term Loan Agreement" shall mean the Term Loan Agreement of even date herewith by and among the Borrower, the lenders parties thereto from time to time, and Mellon Bank, N.A., A-19 98 as Agent, as the same may be amended, modified or supplemented from time to time in accordance with this Agreement (but not any refinancing or renewal thereof). "Term Loan Maturity Date" shall mean the final scheduled maturity of Indebtedness under the Term Loan Agreement. "TIMCO" shall mean Triad International Maintenance Corporation, a Delaware Corporation. "TIMCO Bond Order" means the Bond Order adopted by the Piedmont Triad Airport Authority on October 31, 1989 with respect to the TIMCO Bonds, as such Bond Order may be amended, supplemented or otherwise modified from time to time in accordance with this Agreement. "TIMCO Bonds" means the $13,800,000 original aggregate principal amount of Special Facility Revenue Bonds (Triad International Maintenance Corporation Project), Series 1989 issued by the Piedmont Triad Airport Authority pursuant to the TIMCO Bond Order. "TIMCO Bonds Letter of Credit" has the meaning given that term in Section 7.03(j) hereof. "TIMCO Lease" shall mean the Lease Agreement, dated as of November 1, 1989, between the Piedmont Triad Airport Authority, as lessor, and TIMCO, as lessee, covering certain property situate at the Piedmont Triad International Airport in Guilford County, North Carolina, as such Lease Agreement may be amended, supplemented or otherwise modified from time to time in accordance with this Agreement. "Transfer Effective Date" shall have the meaning set forth in the applicable Transfer Supplement. "Transfer Supplement" shall have the meaning set forth in Section 10.14(c) hereof. "Wholly Owned Subsidiary" of any Person means a Corporation that is a Subsidiary of such Person as to which all of the Shares of Capital Stock of each class (other than directors' qualifying shares that are required under applicable law) are at such time beneficially owned directly or indirectly by such Person (both on the basis of outstanding shares and on a fully diluted basis). "Wind-up" or "Winding-up" of a Person shall include the liquidation, administration, amalgamation, reconstruction, reorganization or dissolution of such Person and any equivalent or analogous procedure under the laws of any jurisdiction in which such Person is incorporated, domiciled, resident or carries on a business or has assets. "Worldscope Entities" shall mean Worldscope/Disclosure Partners, a Connecticut general partnership, Worldscope/Disclosure International Partners, an partnership organized under the laws of Ireland, Worldscope/Disclosure Incorporated LLC, a Connecticut limited A-20 99 liability company, and Worldscope/Disclosure India Pvt. Ltd., a Corporation organized under the laws of India, and each of their respective Subsidiaries from time to time. 1.02. CONSTRUCTION. In this Agreement and each other Loan Document, unless the context otherwise clearly requires, references to the plural include the singular, the singular the plural and the part the whole; "or" has the inclusive meaning represented by the phrase "and/or;" and the terms "property" and "assets" each includes all properties and assets of any kind or nature, tangible or intangible, real, personal or mixed, now existing or hereafter acquired. The words "hereof," "herein" and "hereunder" (and similar terms) in this Agreement or any other Loan Document refer to this Agreement or such other Loan Document, as the case may be, as a whole and not to any particular provision of this Agreement or such other Loan Document. The words "includes" and "including" (and similar terms) in this Agreement or any other Loan Document mean "includes without limitation" and "including without limitation," respectively (and similarly for similar terms). References in this Agreement or any other Loan Document to "determination" (and similar terms) by the Agent or by any Lender include good faith estimates by the Agent or by such Lender (in the case of quantitative determinations) and good faith beliefs by the Agent or by such Lender (in the case of qualitative determinations). No doctrine of construction of ambiguities in agreements or instruments against the interests of the party controlling the drafting thereof shall apply to this Agreement or any other Loan Document. The section and other headings contained in this Agreement and in each other Loan Document, and any tables of contents contained herein or therein, are for reference purposes only and shall not affect the construction or interpretation of this Agreement or such other Loan Document in any respect. Section, subsection, annex, exhibit and schedule references in this Agreement and in each other Loan Document are to this Agreement or such other Loan Document, as the case may be, unless otherwise specified. Each annex, exhibit and schedule to this Agreement or any other Loan Document constitutes part of this Agreement or such Loan Document, as the case may be. Each of the covenants, terms and provisions of this Agreement and the other Loan Documents is intended to have, and shall have, independent effect, and compliance with any particular covenant, term or provision shall not constitute compliance with any other covenant, term or provision. 1.03. ACCOUNTING PRINCIPLES. (a) GAAP. As used herein, "GAAP" shall mean generally accepted accounting principles in the United States, applied on a basis consistent with the principles used in preparing the Borrower's financial statements as of December 31, 1995, and for the fiscal year then ended, as referred to in Section 4.06 hereof. (b) ACCOUNTING AND FINANCIAL DETERMINATIONS, ETC. Except as otherwise provided in this Agreement, all computations and determinations as to accounting or financial matters shall be made, and all financial statements to be delivered pursuant to this Agreement shall be prepared, in accordance with GAAP (including principles of consolidation where appropriate), and all accounting or financial terms shall have the meanings ascribed to such terms by GAAP. (c) CHANGES. If and to the extent that the financial statements generally prepared by the Borrower apply accounting principles other than GAAP, all financial statements referred to in this Agreement or any other Loan Document shall be delivered in duplicate, one set based on the accounting principles then generally applied by the Borrower and one set based on GAAP. To the extent this A-21 100 Agreement or such other Loan Document requires financial statements to be accompanied by an opinion of independent accountants, each such set of financial statements shall be accompanied by such an opinion. [End of Annex A] A-22 101 Exhibit 10.17 - - -------------------------------------------------------------------------------- - - -------------------------------------------------------------------------------- TERM LOAN AGREEMENT dated as of February 7, 1997 by and among PRIMARK CORPORATION, as Borrower, THE LENDERS PARTIES HERETO FROM TIME TO TIME, and MELLON BANK, N.A., as Agent U.S. $225,000,000 - - -------------------------------------------------------------------------------- - - -------------------------------------------------------------------------------- 102 TABLE OF CONTENTS
SECTION TITLE PAGE ARTICLE I DEFINITIONS; CONSTRUCTION........................................................... 1 1.01 Definitions; Construction........................................................... 1 ARTICLE II THE FACILITY........................................................................ 1 2.01 The Term Loan Facility.............................................................. 1 2.02 Making of Loans..................................................................... 2 2.03 Interest Rates...................................................................... 2 2.04 Conversion or Renewal of Interest Rate Options...................................... 6 2.05 Prepayments Generally............................................................... 7 2.06 Optional Prepayments................................................................ 8 2.07 Mandatory Prepayments .............................................................. 8 2.08 Interest Payment Dates.............................................................. 10 2.09 Pro Rata Treatment; Payments Generally.............................................. 10 2.10 Additional Compensation in Certain Circumstances.................................... 11 2.11 Taxes............................................................................... 12 2.12 Funding by Branch, Subsidiary or Affiliate.......................................... 14 ARTICLE III [Reserved].......................................................................... 15 ARTICLE IV REPRESENTATIONS AND WARRANTIES...................................................... 15 4.01 Corporate Status.................................................................... 15 4.02 Corporate Power and Authorization................................................... 15 4.03 Execution and Binding Effect........................................................ 15 4.04 Governmental Approvals and Filings.................................................. 15 4.05 Absence of Conflicts................................................................ 16 4.06 Audited Financial Statements........................................................ 16 4.07 Interim Financial Statements........................................................ 16 4.08 Absence of Undisclosed Liabilities.................................................. 16 4.09 Accurate and Complete Disclosure.................................................... 17 4.10 Projections......................................................................... 17 4.11 Solvency............................................................................ 17 4.12 Margin Regulations.................................................................. 17 4.13 Regulatory Restrictions............................................................. 17 4.14 Subsidiaries........................................................................ 17 4.15 Partnerships, etc................................................................... 18 4.16 Litigation.......................................................................... 18 4.17 Absence of Other Conflicts.......................................................... 18 4.18 Insurance........................................................................... 18 4.19 Title to Property................................................................... 18 4.20 Intellectual Property............................................................... 19 4.21 Taxes............................................................................... 19
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4.22 Employee Benefits................................................................... 19 4.23 Environmental Matters............................................................... 19 ARTICLE V CONDITIONS OF LENDING............................................................... 20 5.01 Conditions to Initial Loans......................................................... 20 ARTICLE VI AFFIRMATIVE COVENANTS............................................................... 23 6.01 Basic Reporting Requirements........................................................ 23 6.02 Insurance........................................................................... 26 6.03 Payment of Taxes and Other Potential Charges and Priority Claims.................... 26 6.04 Preservation of Corporate Status.................................................... 26 6.05 Governmental Approvals and Filings.................................................. 27 6.06 Maintenance of Properties, Franchises, etc.......................................... 27 6.07 Avoidance of Other Conflicts........................................................ 27 6.08 Financial Accounting Practices...................................................... 27 6.09 Use of Proceeds..................................................................... 27 6.10 Continuation of or Change in Business............................................... 28 6.11 Plans and Multiemployer Plans....................................................... 28 6.12 Disaster Recovery Plan.............................................................. 28 6.13 Annual Bank Meeting................................................................. 28 6.14 Separate Corporate Existence........................................................ 28 6.15 Additional Security................................................................. 29 6.16 Interest Rate Protection............................................................ 30 ARTICLE VII NEGATIVE COVENANTS.................................................................. 31 7.01 Financial Covenants................................................................. 31 7.02 Liens............................................................................... 32 7.03 Indebtedness........................................................................ 33 7.04 Guaranties, Indemnities, etc........................................................ 34 7.05 Loans, Advances and Investments..................................................... 35 7.06 Dividends and Related Distributions................................................. 36 7.07 Sale-Leasebacks..................................................................... 37 7.08 Mergers, etc........................................................................ 37 7.09 Dispositions of Properties.......................................................... 38 7.10 Dealings with Affiliates............................................................ 39 7.11 Limitations on Modification of Certain Agreements and Instruments................... 39 7.12 Limitation on Payments on Certain Obligations....................................... 40 7.13 Limitation on Other Restrictions on Liens, Dividend Restrictions on Subsidiaries, etc............................................................. 40 7.14 Limitation on Other Restrictions on Amendment of the Loan Documents, etc.............................................................. 41 7.15 Limitation on Certain Benefit Liabilities........................................... 41 7.16 Fiscal Year......................................................................... 41 ARTICLE VIII DEFAULTS............................................................................ 41
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8.01 Events of Default................................................................... 41 8.02 Consequences of an Event of Default................................................. 44 8.03 Application of Proceeds............................................................. 45 ARTICLE IX THE AGENT........................................................................... 45 9.01 Appointment......................................................................... 45 9.02 General Nature of Agent's Duties.................................................... 46 9.03 Exercise of Powers.................................................................. 46 9.04 General Exculpatory Provisions...................................................... 46 9.05 Administration by the Agent......................................................... 47 9.06 Lenders Not Relying on Agent or Other Lenders....................................... 48 9.07 Indemnification of Agent by Lenders................................................. 48 9.08 Agent in its Individual Capacity.................................................... 48 9.09 Holders of Notes.................................................................... 48 9.10 Successor Agent..................................................................... 49 9.11 Calculations........................................................................ 49 9.12 Agent's Fee......................................................................... 49 ARTICLE X MISCELLANEOUS....................................................................... 49 10.01 Holidays............................................................................ 49 10.02 Records............................................................................. 50 10.03 Amendments and Waivers.............................................................. 50 10.04 No Implied Waiver; Cumulative Remedies.............................................. 51 10.05 Notices............................................................................. 51 10.06 Expenses; Taxes; Indemnity.......................................................... 51 10.07 Severability........................................................................ 52 10.08 Prior Understandings................................................................ 52 10.09 Duration; Survival.................................................................. 52 10.10 Counterparts........................................................................ 53 10.11 Limitation on Payments.............................................................. 53 10.12 Set-Off............................................................................. 53 10.13 Sharing of Collections.............................................................. 53 10.14 Successors and Assigns; Participations; Assignments................................. 54 10.15 Governing Law; Submission to Jurisdiction; Waiver of Jury Trial; Limitation of Liability.......................................................... 57 ANNEX A DEFINITIONS; CONSTRUCTION........................................................... A-1
Exhibit A-1 Form of Term Loan Note Exhibit B Form of Transfer Supplement Exhibit C Form of Annual and Quarterly Compliance Certificate Schedule 4.04 Governmental Approvals and Filings -iii- 105 Schedule 4.05 Conflicts Schedule 4.08 Liabilities Schedule 4.13 Regulatory Restrictions Schedule 4.14 Subsidiaries Schedule 4.16 Litigation Schedule 4.21 Taxes Schedule 4.23 Environmental Matters Schedule 7.02 Liens Schedule 7.04 Guaranty Equivalents Schedule 7.07 Sale-Leasebacks -iv- 106 TERM LOAN AGREEMENT THIS AGREEMENT, dated as of February 7, 1997, by and among PRIMARK CORPORATION, a Michigan Corporation (the "Borrower"), the Lenders parties hereto from time to time, and MELLON BANK, N.A., a national banking association, as agent for the Lender Parties hereunder (in such capacity, together with its successors in such capacity, the "Agent"). In consideration of the mutual covenants herein contained and intending to be legally bound, the parties hereto hereby agree as follows: ARTICLE I DEFINITIONS; CONSTRUCTION 1.01. DEFINITIONS; CONSTRUCTION. In addition to other words and terms defined elsewhere in this Agreement, as used in this Agreement the words and terms defined in Annex A hereto have the meanings given them in such Annex A, and this Agreement shall be construed in accordance with the provisions of Annex A. ARTICLE II THE FACILITY 2.01. THE TERM LOAN FACILITY. (a) TERM LOAN COMMITMENTS. Subject to the terms and conditions and relying upon the representations and warranties herein set forth, each Lender, severally and not jointly, agrees (such agreement being herein called such Lender's "Term Loan Commitment") to make a loan (the "Term Loan") to the Borrower on the date of execution and delivery hereof in principal amount equal to such Lender's Term Loan Committed Amount. The Term Loan Commitments shall automatically expire at the close of business on the date of the execution and delivery hereof by all parties hereto. Each Lender's "Term Loan Committed Amount" at any time shall be equal to the amount set forth as its "Term Loan Committed Amount" below its name on the signature pages hereof, subject to transfer to another Lender as provided in Section 10.14 hereof. The sum of the Term Loan Committed Amounts of the Lenders shall not exceed $225,000,000 at any time. (b) NATURE OF CREDIT. The Borrower may not reborrow amounts repaid with respect to Term Loans. (c) TERM LOAN NOTES. The obligation of the Borrower to repay the unpaid principal amount of the Term Loans made to it by each Lender and to pay interest thereon shall be evidenced in part by promissory notes of the Borrower, one to each Lender, dated the Closing Date (the "Term Loan Notes") in substantially the form attached hereto as Exhibit A-1, with the blanks appropriately filled, payable to the order of such Lender in a face amount equal to such Lender's Term Loan. (d) SCHEDULED AMORTIZATION. The Term Loans shall be due and payable on the dates ("Scheduled Maturity Dates") and in the aggregate principal amounts set forth below: A-1 107
Aggregate Principal Amount Last Business Day of of Term Loans due and payable -------------------- ----------------------------- December 1997 $ 5,000,000 June 1998 $ 5,000,000 December 1998 $ 10,000,000 June 1999 $ 10,000,000 December 1999 $ 10,000,000 June 2000 $ 15,000,000 December 2000 $ 15,000,000 June 2001 $ 15,000,000 December 2001 $ 20,000,000 June 2002 $ 20,000,000 December 2002 $ 25,000,000 June 2003 $ 25,000,000 December 2003 $ 25,000,000 June 2004 $ 25,000,000
To the extent not due and payable earlier, the Term Loans shall be due and payable on the Term Loan Maturity Date. 2.02. MAKING OF LOANS. Prior to the making of the Loans, the Borrower shall provide Standard Notice to the Agent setting forth the following information: (a) The date, which shall be a Business Day, on which the Loans are to be made; (b) The aggregate principal amount of the Loans, which shall be $225,000,000, and which shall be the sum of the principal amounts selected pursuant to clause (c) of this Section 2.02; (c) The interest rate Option or Options selected in accordance with Section 2.03(a) hereof and the principal amounts selected in accordance with Section 2.03(d) hereof of the Base Rate Portion and each Funding Segment of the Euro-Rate Portion of the Loans; and (d) With respect to each such Funding Segment of the Loans, the Funding Period to apply to such Funding Segment and the Maturity Tranche with respect thereto, selected in accordance with Section 2.03(c) hereof. Standard Notice having been so provided, the Agent shall promptly notify each Lender of the information contained therein and of the amount of such Lender's Loan. Unless any applicable condition specified in Article V hereof has not been satisfied, on the date specified in such Standard Notice each Lender shall make the proceeds of its Loan available to the Agent at the Agent's Office, no later than 12:00 o'clock Noon, Pittsburgh time, in funds immediately available at such Office. The Agent will make the funds so received available to the Borrower in funds immediately available at the Agent's Office. 2.03. INTEREST RATES. A-2 108 (a) OPTIONAL BASES OF BORROWING. The unpaid principal amount of the Loans shall bear interest for each day until due on one or more bases selected by the Borrower from among the interest rate Options set forth below. Subject to the provisions of this Agreement the Borrower may select different Options to apply simultaneously to different Portions of the Loans and may select different Funding Segments to apply simultaneously to different parts of the Euro-Rate Portion of the Loans. (i) BASE RATE OPTION: A rate per annum (computed on the basis of a year of 365 or 366 days, as the case may be, and actual days elapsed) for each day equal to the Base Rate for such day plus the Applicable Margin for such day. (ii) EURO-RATE OPTION: A rate per annum (based on a year of 360 days and actual days elapsed) for each day equal to the Euro-Rate for such day plus the Applicable Margin for such day. (b) APPLICABLE MARGINS. (i) The "Applicable Margin" for each interest rate Option for each day shall mean the applicable percentage set forth below under "Level II Performance Margins," "Level III Performance Margins," or "Level IV Performance Margins," as the case may be, in the event that (x) no Event of Default or Potential Default shall have occurred and be continuing or exist on such day and (y) Financial Test II, Financial Test III or Financial Test IV, respectively, set forth below is satisfied on such day. For purposes of determining the Applicable Margin, Financial Test II, Financial Test III or Financial Test IV, as the case may be, shall be deemed to be satisfied effective on the first day of the calendar month following the calendar month in which the Agent shall have received from the Borrower a certificate, duly completed and signed by a Responsible Officer, accompanied by the Borrower's financial statements for the fiscal quarter most recently ended (or, if such most recently ended fiscal quarter is the last of a fiscal year, for the fiscal year then ended), demonstrating compliance with the applicable financial test, and such financial test shall be deemed to remain satisfied until the last day of the calendar month in which the Borrower's next annual or quarterly financial statements are required to be delivered under Section 6.01(a) or 6.01(b) hereof, as the case may be (or, if earlier, the last day of the calendar month in which the Borrower's next annual or quarterly financial statements are actually delivered in compliance with such Section); provided, that for each day in the period from and including the Closing Date to and including the last day of the calendar month in which the Borrower's quarterly financial statements for the quarter ending September 30, 1997 are required to be delivered under Section 6.01(b) hereof (or, if earlier, the last day of the calendar month in which such quarterly financial statements are actually delivered in compliance with Section 6.01(b) hereof), the Borrower will be deemed to have satisfied Financial Test II. If the conditions for application of the Level II Performance Margins, Level III Performance Margins or Level IV Performance Margins do not apply on a particular day, the "Applicable Margin" for such day shall mean the applicable percentage set forth below under "Level I Performance Margins": LEVEL I PERFORMANCE MARGINS:
Applicable Margin for Applicable Margin for Interest Rate Option Early Maturity Tranches Late Maturity Tranches -------------------- ----------------------- ---------------------- Base Rate Option Zero Zero Euro-Rate Option 1.00% 1.25%
A-3 109 Level I Performance Margins shall apply in the event that the conditions for application of the Level II Performance Margins, Level III Performance Margins or Level IV Performance Margins do not apply. LEVEL II PERFORMANCE MARGINS:
Applicable Margin for Applicable Margin for Interest Rate Option Early Maturity Tranches Late Maturity Tranches -------------------- ----------------------- ---------------------- Base Rate Option Zero Zero Euro-Rate Option 0.75% 1.00%
Level II Performance Margins shall apply in the event that Financial Test II is satisfied and the other conditions set forth above are met. "Financial Test II" means that, as of the end of the relevant fiscal quarter, the Consolidated Funded Debt Ratio (Adjusted) for the period of four consecutive fiscal quarters ending on the last day of such fiscal quarter, considered as a single accounting period, is less than 4.00 and greater than or equal to 3.00. LEVEL III PERFORMANCE MARGINS:
Applicable Margin for Applicable Margin for Interest Rate Option Early Maturity Tranches Late Maturity Tranches -------------------- ----------------------- ---------------------- Base Rate Option Zero Zero Euro-Rate Option 0.625% 0.875%
Level III Performance Margins shall apply in the event that Financial Test III is satisfied and the other conditions set forth above are met. "Financial Test III" means that, as of the end of the relevant fiscal quarter, the Consolidated Funded Debt Ratio (Adjusted) for the period of four consecutive fiscal quarters ending on the last day of such fiscal quarter, considered as a single accounting period, is less than 3.00 and greater than or equal to 2.50. LEVEL IV PERFORMANCE MARGINS:
Applicable Margin for Applicable Margin for Interest Rate Option Early Maturity Tranches Late Maturity Tranches -------------------- ----------------------- ---------------------- Base Rate Option Zero Zero Euro-Rate Option 0.50% 0.75%
Level IV Performance Margins shall apply in the event that Financial Test IV is satisfied and the other conditions set forth above are met. "Financial Test IV" means that, as of the end of the relevant fiscal quarter, the Consolidated Funded Debt Ratio (Adjusted) for the period of four consecutive fiscal quarters ending on the last day of such fiscal quarter, considered as a single accounting period, is less than 2.50. (ii) As used in this Agreement, the "Maturity Tranche" corresponding to a particular Scheduled Maturity Date at any time means the aggregate principal amount of the Term Loans then outstanding which is scheduled to be due and payable on such Scheduled Maturity Date in accordance A-4 110 with the scheduled maturities set forth in Section 2.01(d) hereof, taking into account any prepayments applied in accordance with Section 2.05 hereof. As used in this Agreement, "Early Maturity Tranche" means a Maturity Tranche corresponding to a Scheduled Maturity Date occurring on or before the June 2000 Scheduled Maturity Date. As used in this Agreement, "Late Maturity Tranche" means a Maturity Tranche corresponding to a Scheduled Maturity Date occurring on or after the December 2000 Scheduled Maturity Date. If and to the extent for any reason any part of any Early Maturity Tranche becomes due (by acceleration or otherwise) on a day other than its Scheduled Maturity Date, the Applicable Margin for such part of such Early Maturity Tranche from and after such due date shall be determined as if such part were a Late Maturity Tranche. (c) FUNDING PERIODS. At any time when the Borrower shall select, convert to or renew the Euro-Rate Option to apply to any part of the Loans, the Borrower shall specify one or more periods (the "Funding Periods") during which each such Option shall apply, such Funding Periods being as set forth below:
Interest Rate Option Available Funding Periods - - -------------------- ------------------------- Euro-Rate Option One, two, three or six months ("Euro-Rate Funding Period");
provided, that: (i) Each Euro-Rate Funding Period shall begin on a London Business Day, and the term "month," when used in connection with a Euro-Rate Funding Period, shall be construed in accordance with prevailing practices in the interbank eurodollar market at the commencement of such Euro-Rate Funding Period, as determined in good faith by the Agent (which determination shall be conclusive); (ii) Each Funding Segment shall be designated by the Borrower to correspond to a single Maturity Tranche, and the Borrower may not select a Funding Period that would end after the Scheduled Maturity Date corresponding to such Maturity Tranche (it being understood that, subject to the other limitations set forth in this Agreement, a Maturity Tranche may be comprised of more than one Funding Segment); (iii) The Borrower shall, in selecting any Funding Period, allow for reasonably foreseeable mandatory prepayments, so as to avoid to the extent practicable application of Section 2.10(b) hereof; (iv) The Borrower may not select a Funding Period that would end after the Term Loan Maturity Date; and (v) The aggregate number of Funding Segments at any time shall not exceed twenty. (d) TRANSACTIONAL AMOUNTS. Each selection of, conversion from, conversion to or renewal of an interest rate Option and each payment or prepayment of any Loans (other than mandatory prepayments to the extent set forth in Section 2.05(c) hereof) shall be in a principal amount such that after giving effect thereto the aggregate principal amount of the Base Rate Portion of the Term Loans, A-5 111 and the aggregate principal amount of each Funding Segment of the Euro-Rate Portion of the Term Loans, shall be as set forth below:
Portion or Funding Segment Allowable Aggregate Principal Amounts - - -------------------------- ------------------------------------- Base Rate Portion Any Each Funding Segment $500,000 or an integral of the Euro-Rate Portion multiple thereof
(e) EURO-RATE UNASCERTAINABLE; IMPRACTICABILITY. If (i) on any date on which a Euro-Rate would otherwise be set the Agent (in the case of clauses (A) or (B) below) or any Lender (in the case of clause (C) below) shall have determined in good faith (which determination shall be conclusive) that: (A) adequate and reasonable means do not exist for ascertaining such Euro-Rate, (B) a contingency has occurred which materially and adversely affects the interbank eurodollar market, or (C) the effective cost to such Lender of funding a proposed Funding Segment of the Euro-Rate Portion from a Corresponding Source of Funds shall exceed the Euro-Rate applicable to such Funding Segment, or (ii) at any time any Lender shall have determined in good faith (which determination shall be conclusive) that the making, maintenance or funding of any part of the Euro-Rate Portion has been made impracticable or unlawful by compliance by such Lender or a Notional Euro-Rate Funding Office in good faith with any Law or guideline or interpretation or administration thereof by any Governmental Authority charged with the interpretation or administration thereof or with any request or directive of any such Governmental Authority (whether or not having the force of law); then, and in any such event, the Agent or such Lender, as the case may be, may notify the Borrower of such determination (and any Lender giving such notice shall notify the Agent). Upon such date as shall be specified in such notice (which shall not be earlier than the date such notice is given), the obligation of each of the Lenders to allow the Borrower to select, convert to or renew the Euro-Rate Option shall be suspended until the Agent or such Lender, as the case may be, shall have later notified the Borrower (and any Lender giving such notice shall notify the Agent) of the Agent's or such Lender's determination in good faith (which determination shall be conclusive) that the circumstance giving rise to such previous determination no longer exist. If any Lender notifies the Borrower of a determination under clause (ii) of this Section 2.03(e), the Euro-Rate Portion of the Loans of such Lender (the "Affected Lender") shall automatically be converted to the Base Rate Option as of the date specified in such notice (and accrued interest thereon shall be due and payable on such date). If at the time the Agent or a Lender makes a determination under clause (i) or (ii) of this Section 2.03(e) the Borrower previously has notified the Agent that it wishes to select, convert to or renew the Euro-Rate Option with respect to any proposed Loans but such Loans have not yet been made, such notification shall be deemed to provide for selection A-6 112 of, conversion to or renewal of the Base Rate Option instead of the Euro-Rate Option with respect to such Loans or, in the case of a determination by a Lender, such Loans of such Lender. 2.04. CONVERSION OR RENEWAL OF INTEREST RATE OPTIONS. (a) CONVERSION OR RENEWAL. Subject to the provisions of Section 2.10(b) hereof, the Borrower may convert any part of its Loans from any interest rate Option or Options to one or more different interest rate Options and may renew the Euro-Rate Option as to any Funding Segment of the Euro-Rate Portion: (i) At any time with respect to conversion from the Base Rate Option; or (ii) At the expiration of any Funding Period with respect to conversions from or renewals of the Euro-Rate Option, as to the Funding Segment corresponding to such expiring Funding Period. Whenever the Borrower desires to convert or renew any interest rate Option or Options, the Borrower shall provide to the Agent Standard Notice setting forth the following information: (w) The date, which shall be a Business Day, on which the proposed conversion or renewal is to be made; (x) The principal amounts selected in accordance with Section 2.03(d) hereof of the Base Rate Portion and each Funding Segment of the Euro-Rate Portion to be converted from or renewed; (y) The interest rate Option or Options selected in accordance with Section 2.03(a) hereof and the principal amounts selected in accordance with Section 2.03(d) hereof of the Base Rate Portion and each Funding Segment of the Euro-Rate Portion to be converted to; and (z) With respect to each Funding Segment to be converted to or renewed, the Funding Period to apply to such Funding Segment and the Maturity Tranche with respect thereto, selected in accordance with Section 2.03(c) hereof. Standard Notice having been so provided, after the date specified in such Standard Notice, interest shall be calculated upon the principal amount of the Loans as so converted or renewed. Interest on the principal amount of any part of the Loans converted or renewed (automatically or otherwise) shall be due and payable on the conversion or renewal date. (b) FAILURE TO CONVERT OR RENEW. Absent due notice from the Borrower of conversion or renewal in the circumstances described in Section 2.04(a)(ii) hereof, any part of the Euro-Rate Portion for which such notice is not received shall be converted automatically to the Base Rate Option on the last day of the expiring Funding Period. 2.05. PREPAYMENTS GENERALLY. Whenever the Borrower desires or is required to prepay any part of the Loans, it shall provide Standard Notice to the Agent setting forth the following information: A-7 113 (a) The date, which shall be a Business Day, on which the proposed prepayment is to be made; (b) The total principal amount of such prepayment, which shall be the sum of the principal amounts selected pursuant to clause (c) of this Section 2.05, and which, if a partial prepayment, shall be an integral multiple of $1,000,000 (or, in the case of a mandatory prepayment pursuant to Section 2.07(b) hereof, an integral multiple of $100,000); and (c) The principal amounts selected in accordance with Section 2.03(d) hereof of the Base Rate Portion and each part of each Funding Segment of the Euro-Rate Portion to be prepaid; provided, that in the case of a mandatory prepayment under Section 2.07(b) hereof, any excess of the amount of such mandatory prepayment applied to a particular Maturity Tranche over the Base Rate Portion of such Maturity Tranche may be applied to the Euro-Rate Portion of such Maturity Tranche without regard to Section 2.03(d) hereof. Standard Notice having been so provided, on the date specified in such Standard Notice, the principal amounts of the Base Rate Portion and each part of the Euro-Rate Portion specified in such notice, together with interest on each such principal amount to such date, shall be due and payable. Prepayments of the Term Loans shall be applied to the remaining scheduled installments of the Term Loans set forth in Section 2.01(d) hereof in the following order of priority (in each case to the extent such scheduled installment remains outstanding): (i) first, to the installment due December 2000; (ii) second, to the installment due June 2000; (iii) third, to the installment due December 1999; (iv) fourth, to the installment due June 1999; and (v) thereafter, to remaining installments in the inverse order of their scheduled maturity. 2.06. OPTIONAL PREPAYMENTS. The Borrower shall have the right at its option from time to time to prepay its Loans in whole or part without premium or penalty (subject, however, to Section 2.10(b) hereof): (a) At any time with respect to any part of the Base Rate Portion; or (b) At the expiration of any Funding Period with respect to prepayment of the Euro- Rate Portion with respect to any part of the Funding Segment corresponding to such expiring Funding Period. Any such prepayment shall be made in accordance with Section 2.05 hereof. 2.07. MANDATORY PREPAYMENTS. (a) EXPIRATION OF THE REVOLVING CREDIT AGREEMENT. The Borrower shall be required to prepay the Term Loans in full in the event that at any time (i) there shall fail to be in force a Revolving Credit Agreement (which, so long as the Senior Note Indenture is in force, shall constitute a "Credit Agreement" as defined therein), under which the Borrower at such time has the right to borrow from financial institutions on a revolving basis from time to time an aggregate principal amount not less than $75,000,000, or the Revolving Credit Maturity Date thereunder shall have occurred, or the Borrower shall be required to make any prepayment of principal thereunder or to post cash collateral thereunder A-8 114 (except prepayments of principal or the posting of cash collateral which otherwise would be mandatory solely as a result of the Borrower's provision of notice of prepayment), or (ii) the Borrower shall not have procured a commitment from a financial institution to provide a successor Revolving Credit Agreement complying with the foregoing clause (i) by the 90th day before the Revolving Credit Maturity Date under the then-current Revolving Credit Agreement. If prepayment of the Term Loans is required under this Section 2.07(a), the Borrower shall give notice of such prepayment in accordance with Section 2.05 hereof so that such prepayment is made not later than the date of the applicable event referred to in the foregoing clause (i) or (ii). (b) RECAPTURE ASSET DISPOSITIONS. (i) The Borrower shall be required from time to time to prepay the principal amount of the Term Loans by an amount not less than the Recapture Asset Amount from each Recapture Asset Disposition. If prepayment of the Term Loans is required under this Section 2.07(b), the Borrower shall give notice of such reduction in accordance with Section 2.05 hereof so that such reduction shall be effective not later than (x) in the case of a Recapture Asset Disposition of Type A, the date of receipt of the related Net Sale Proceeds by the Borrower or any of its Subsidiaries, and (y) in the case of a Recapture Asset Disposition of Type B (which is not also of Type A), the date on which an amount arising out of such Recapture Asset Disposition would (but for the requirement hereunder to prepay the Term Loans) constitute "Excess Proceeds" under the Senior Note Indenture (taking into account the periods specified in the Senior Note Indenture which must elapse before amounts constitute "Excess Proceeds"). (ii) If a prepayment of the Term Loans is required by this Section 2.07(b), then, if and to the extent that a prepayment of a Funding Segment of the Euro-Rate Portion of the Loans otherwise would be required to be made on a day other than the last day of the corresponding Euro-Rate Funding Period, the Borrower may defer such prepayment until the last day of such Funding Segment. (iii) As used in this Agreement, the term "Recapture Asset Disposition" means (A) any disposition of any Shares of Capital Stock of TIMCO or of any of its assets outside the ordinary course of business (Recapture Asset Dispositions described in this clause (A) being sometimes referred to herein as being of "Type A"); and (B) any event or condition which would (but for the requirement hereunder to prepay the Term Loans) give rise to any "Excess Proceeds" as defined in the Senior Note Indenture (taking into account the periods specified in the Senior Note Indenture which must elapse before amounts constitute "Excess Proceeds") (Recapture Asset Dispositions described in this clause (B) being sometimes referred to herein as being of "Type B"). The Borrower shall advise the Agent in writing promptly of each proposed, actual or anticipated Recapture Asset Disposition and of the material terms thereof and each scheduled date for the A-9 115 consummation or occurrence thereof promptly after the Borrower becomes aware of the same (but in any event not later than the date of such Recapture Asset Disposition). (iv) As used in this Agreement, the term "Recapture Asset Amount" has the following meaning: (A) With respect to any Recapture Asset Disposition of Type A, "Recapture Asset Amount" means 50% of the Net Sale Proceeds from such Recapture Asset Disposition. (B) With respect to any Recapture Asset Disposition of Type B, "Recapture Asset Amount" means the amount with respect to such Recapture Asset Disposition which (but for the requirement hereunder to prepay the Term Loans) would constitute "Excess Proceeds" as defined in the Senior Note Indenture (taking into account the periods specified in the Senior Note Indenture which must elapse before amounts constitute "Excess Proceeds"). If an event constitutes a Recapture Asset Disposition of both Type A and Type B, "Recapture Asset Amount" with respect to such event shall mean the greater of the amounts described in the foregoing clauses (A) or (B). (v) "Net Sale Proceeds" means, with respect to any Recapture Asset Disposition of Type A, the gross proceeds thereof in the form of cash or cash equivalents (including payments in respect of deferred payment obligations upon the earliest of (x) receipt of such payments in the form of cash or cash equivalents, (y) to the extent that such obligations are financed or sold without recourse to the Borrower or any Subsidiary, the time of such financing or sale, or (z) to the extent that such obligations are financed or sold with recourse to the Borrower or such Subsidiary the time that either the original obligation is discharged or such recourse is no longer in effect), net of the sum of the following (without duplication): (A) brokerage commissions and other fees and expenses (including, without limitation, fees and expenses of legal counsel and investment bankers) related to such Recapture Asset Disposition, (B) all taxes actually paid or estimated in good faith to be or become payable as a result of such Recapture Asset Disposition, (C) payments made to retire obligations (other than to the Borrower and its Subsidiaries) that are secured by the properties that are the subject of such Recapture Asset Disposition, (D) payments to holders (other than the Borrower and its Subsidiaries) of Shares of Capital Stock or other equity interests in Subsidiaries of the Borrower subject to such Recapture Asset Disposition, so long as such payments are made on a pro rata basis, consistent with the ownership of such interests, to the holders of such interests, and (E) appropriate amounts to be provided by the Borrower or any Subsidiary as a reserve required in accordance with generally accepted accounting principles in the United States, consistently applied, against any liabilities associated with such Recapture Asset Disposition and retained by the Borrower or any Subsidiary thereof after such Recapture Asset Disposition, including, without limitation, pension and other post-employment benefit liabilities, liabilities related to environmental matters and liabilities under any indemnification obligations associated with such Recapture Asset Disposition; provided, however, that if all or any portion of such reserve is no longer required, the amount in respect of such reserve shall immediately be deemed to constitute, and shall be applied as, Net Sale Proceeds. 2.08. INTEREST PAYMENT DATES. Accrued and unpaid interest on the Loans shall be due and payable on the following dates (and on such other dates as may be specified elsewhere in this Agreement and the other Loan Documents): (a) in the case of the Base Rate Portion, on each Regular Monthly Payment Date, and (b) in the case of each Funding Segment of the Euro-Rate Portion, on the A-10 116 last day of the corresponding Euro-Rate Funding Period and, if such Euro-Rate Funding Period is longer than three months, also on the last day of the third month during such Funding Period. After maturity of any part of the Loans (by acceleration or otherwise), interest on such part of the Loans shall be due and payable on demand. 2.09. PRO RATA TREATMENT; PAYMENTS GENERALLY. (a) PRO RATA TREATMENT. Each borrowing and each conversion or renewal of interest rate Options hereunder shall be made, and all payments made in respect of principal of and interest on Loans due from the Borrower hereunder or under the Notes shall be applied, Pro Rata from and to each Lender, except for (y) payments of interest involving an Affected Lender as provided in Section 2.03(e) hereof, and (z) payments to a Lender subject to a withholding deduction under Section 2.11(c) hereof. The failure of any Lender to make a Loan shall not relieve any other Lender of its obligation to lend hereunder, but neither the Agent nor any Lender shall be responsible for the failure of any other Lender to make a Loan. (b) PAYMENTS GENERALLY. All payments and prepayments to be made by the Borrower in respect of principal, interest, fees, indemnities, expenses or other amounts due from the Borrower hereunder or under any other Loan Document shall be payable in Dollars at 1:00 p.m., Pittsburgh time, on the day when due without presentment, demand, protest or notice of any kind, all of which are hereby expressly waived, and an action therefor shall immediately accrue, without setoff, counterclaim, withholding or other deduction of any kind or nature (except for payments to a Lender subject to a withholding deduction under Section 2.11(c) hereof). Except for payments under Sections 2.10 or 10.06 hereof, such payments shall be made to the Agent at its Office in funds immediately available at such Office, and payments under Sections 2.10 or 10.06 hereof shall be made to the applicable Lender at such domestic account as it shall specify to the Borrower from time to time in funds immediately available at such account. Any payment received by the Agent or such Lender after 1:00 p.m., Pittsburgh time, on any day shall be deemed to have been received on the next succeeding Business Day. The Agent shall distribute to the Lenders all such payments received by the Agent for their respective accounts as promptly as practicable after receipt by the Agent. (c) INTEREST ON OVERDUE AMOUNTS. To the extent permitted by law, after there shall have become due (by acceleration or otherwise) principal, interest, fees, indemnity, expenses or any other amounts due from the Borrower hereunder or under any other Loan Document, such amounts shall bear interest for each day until paid (before and after judgment), payable on demand, at a rate per annum (in each case based on a year of 365 or 366 days, as the case may be, and actual days elapsed) which for each day shall be equal to the following: (i) In the case of any part of the Euro-Rate Portion of any Loans, (A) until the end of the applicable then-current Funding Period at a rate per annum 2.00% above the rate otherwise applicable to such part, and (B) thereafter in accordance with the following clause (ii); and (ii) In the case of any other amount due from the Borrower hereunder or under any Loan Document, 2.00% above the then-current Base Rate Option applicable to Late Maturity Tranches. A-11 117 To the extent permitted by law, interest accrued on any amount which has become due hereunder or under any Loan Document shall compound on a day-by-day basis, and hence shall be added daily to the overdue amount to which such interest relates. 2.10. ADDITIONAL COMPENSATION IN CERTAIN CIRCUMSTANCES. (a) INCREASED COSTS OR REDUCED RETURN RESULTING FROM TAXES, RESERVES, CAPITAL ADEQUACY REQUIREMENTS, EXPENSES, ETC. If any Law or guideline or interpretation or application thereof by any Governmental Authority charged with the interpretation or administration thereof or compliance with any request or directive of any Governmental Authority (whether or not having the force of law) now existing or hereafter adopted: (i) subjects any Lender Party or any Notional Euro-Rate Funding Office to any tax or changes the basis of taxation with respect to this Agreement, the Notes, the Loans, or payments by the Borrower of principal, interest, fees or other amounts due from the Borrower hereunder or under the Notes (except for taxes on the overall net income or overall gross receipts of such Lender Party or such Notional Euro-Rate Funding Office imposed by the jurisdictions (federal, state and local) in which the Lender Party's principal office or Notional Euro-Rate Funding Office is located), (ii) imposes, modifies or deems applicable any reserve, special deposit, insurance assessment or any other requirement against credits or commitments to extend credit extended by, assets (funded or contingent) of, deposits with or for the account of, other acquisitions of funds by, such Lender Party or any Notional Euro-Rate Funding Office (other than requirements expressly included herein in the determination of the Euro-Rate hereunder), (iii) imposes, modifies or deems applicable any capital adequacy or similar requirement against assets (funded or contingent) of, or credits or commitments to extend credit extended by, any Lender Party or any Notional Euro-Rate Funding Office, or applicable to the obligations of any Lender Party or any Notional Euro-Rate Funding Office under this Agreement, or (iv) imposes upon any Lender Party or any Notional Euro-Rate Funding Office any other condition or expense with respect to this Agreement, the Notes or its making, maintenance or funding of any Loan, and the result of any of the foregoing is to increase the cost to, reduce the income receivable by, or impose any expense (including loss of margin) upon any Lender Party, any Notional Euro-Rate Funding Office or, in the case of clause (iii) hereof, any Person controlling a Lender Party, with respect to this Agreement, the Notes or the making, maintenance or funding of any Loan (or, in the case of any capital adequacy or similar requirement, to have the effect of reducing the rate of return on such Lender Party's or controlling Person's capital, taking into consideration such Lender Party's or controlling Person's policies with respect to capital adequacy) by an amount which such Lender Party deems to be material (such Lender Party being deemed for this purpose to have made, maintained or funded each Funding Segment of the Euro-Rate Portion from a Corresponding Source of Funds), such Lender Party may from time to time notify the Borrower of the amount determined in good faith by such Lender Party (which determination shall be conclusive) to be necessary to compensate such Lender Party or such Notional Euro-Rate Funding Office for such increase, reduction or imposition. In making any such determination A-12 118 such Lender Party may take into account any special, supplemental or other nonrecurring items, may apply any averaging or attribution methods, and may make such determination prospectively or retrospectively. Such amount shall be due and payable by the Borrower to such Lender Party five Business Days after such notice is given, together with an amount equal to interest on such amount from the date two Business Days after the date demanded until such due date at the Base Rate Option applicable to the related portion of the Loan. The Borrower shall not be required to make any payment in respect of clause (a)(i) above to a Lender to the extent that such payment is attributable to a breach by such Lender of its obligations under Section 2.11(c) below. (b) FUNDING BREAKAGE. In the event that for any reason (i) the Borrower fails to borrow, convert or renew any part of any Loan hereunder which would, after such borrowing, conversion or renewal, have a Euro-Rate Portion, after notice requesting such borrowing, conversion or renewal has been given by the Borrower (whether such failure results from failure to satisfy applicable conditions to such borrowing, conversion or renewal or otherwise), or (ii) any part of any Funding Segment of any Euro-Rate Portion becomes due (by acceleration or otherwise), or is paid, prepaid or converted to another interest rate Option (whether or not such payment, prepayment or conversion is mandatory or automatic and whether or not such payment or prepayment is then due), on a day other than the last day of the corresponding Funding Period, the Borrower shall indemnify each Lender on demand against any loss, liability, cost or expense of any kind or nature which such Lender may sustain or incur in connection with or as a result of such event. Such indemnification in any event shall include an amount equal to the excess, if any, of (x) the aggregate amount of interest which would have accrued on the amount of the Euro-Rate Portion not so borrowed, converted or renewed, or which so becomes due, or which is so paid, prepaid or converted, as the case may be, from and including the date on which such borrowing, conversion or renewal would have been made pursuant to such notice, or on which such part of such Funding Segment so becomes due, or on which such part of such Funding Segment is so paid, prepaid or converted, as the case may be, to the last day of the Funding Period applicable to such amount (or, in the case of a failure to borrow, convert or renew, the Funding Period that would have been applicable to such amount but for such failure), in each case at the applicable rate of interest for such Euro-Rate Portion provided for herein (excluding, however, the Applicable Margin included therein, if any), over (y) the aggregate amount of interest (as determined in good faith by such Lender) which would have accrued to such Lender on such amount for such period by placing such amount on deposit for such period with leading banks in the interbank market. A certificate by the Lender as to any amount that such Lender is entitled to receive pursuant to this Section 2.10(b) shall be conclusive if made in good faith. 2.11. TAXES. (a) PAYMENT NET OF TAXES. All payments made by the Borrower under this Agreement or any other Loan Document shall be made free and clear of, and without reduction or withholding for or on account of, any present or future income, stamp or other taxes, levies, imposts, duties, charges, fees, deductions or withholdings, now or hereafter imposed, levied, collected, withheld or assessed by any Governmental Authority, and all liabilities with respect thereto, excluding (i) in the case of each Lender Party, income or franchise taxes imposed on such Lender Party by the jurisdiction under the laws of which such Lender Party is organized or any political subdivision or taxing authority thereof or therein or as a result of a connection between such Lender Party and any jurisdiction other than a connection resulting solely from this Agreement and the transactions contemplated hereby, and A-13 119 (ii) in the case of each Lender, income or franchise taxes imposed by any jurisdiction in which such Lender's lending offices which make or book Loans are located or any political subdivision or taxing authority thereof or therein (all such non-excluded taxes, levies, imposts, deductions, charges or withholdings being hereinafter called "Taxes"). If any Taxes are required to be withheld or deducted from any amounts payable to any Lender Party under this Agreement or any other Loan Document, the Borrower shall pay the relevant amount of such Taxes and the amounts so payable to such Lender Party shall be increased to the extent necessary to yield to such Lender Party (after payment of all Taxes) interest or any such other amounts payable hereunder at the rates or in the amounts specified in this Agreement and the other Loan Documents. Whenever any Taxes are paid by the Borrower with respect to payments made in connection with this Agreement or any other Loan Document, as promptly as possible thereafter, the Borrower shall send to the Agent for its own account or for the account of such Lender Party, as the case may be, a certified copy of an original official receipt received by the Borrower showing payment thereof. (b) INDEMNITY. The Borrower hereby indemnifies each Lender Party for the full amount of all Taxes attributable to payments by or on behalf of the Borrower to such Lender Party hereunder or under any of the other Loan Documents, any Taxes paid by such Lender Party, and any present or future claims, liabilities or losses with respect to or resulting from any omission to pay or delay in paying any Taxes (including any incremental Taxes, interest or penalties that may become payable by such Lender Party as a result of any failure to pay such Taxes). Such indemnification shall be made within five Business Days from the date such Lender Party makes written demand therefor. The Borrower shall not be required to make any payment under this Section 2.11(b) to a Lender to the extent that such payment is attributable to a breach by such Lender of its obligations under Section 2.11(c) below. (c) WITHHOLDING. Each Lender that is incorporated or organized under the laws of any jurisdiction other than the United States or any state thereof agrees that, on or prior to the date it becomes party to this Agreement, it will furnish to the Borrower and the Agent two valid, duly completed copies of United States Internal Revenue Service Form 4224 or United States Internal Revenue Service Form 1001 or successor applicable form, as the case may be, certifying in each case that such Lender is entitled to receive payments under this Agreement and the other Loan Documents without deduction or withholding of any United States federal income taxes. Each Lender which so delivers to the Borrower and the Agent a Form 1001 or 4224, or a successor applicable form, agrees to deliver to the Borrower and the Agent two further copies of the said Form 1001 or 4224 or a successor applicable form, or other manner of certification, as the case may be, on or before the date that any such form expires or becomes obsolete or otherwise is required to be resubmitted as a condition to obtaining an exemption from withholding tax, or after the occurrence of any event requiring a change in the most recent form previously delivered by it, and such extensions or renewals thereof as may reasonably be requested by the Borrower or the Agent, certifying in the case of a Form 1001 or Form 4224 that such Lender is entitled to receive payments under this Agreement or any other Loan Document without deduction or withholding of any United States federal income taxes, unless in any such cases an event (including any changes in law) has occurred prior to the date on which any such delivery would otherwise be required which renders all such forms inapplicable or which would prevent such Lender from duly completing and delivering any such letter or form with respect to it and such Lender advises the Borrower and the Agent that it is not capable of receiving payments without any deduction or withholding of United States federal income tax. In addition, if at any time the Borrower believes that A-14 120 payments to any Lender (foreign or domestic) may be subject to U.S. backup withholding tax, such Lender shall, at the Borrower's reasonable request from time to time, if such Lender is legally able to do so, provide the Borrower with evidence establishing an exemption from U.S. backup withholding tax. (d) CREDITS. If any payment by the Borrower is made to or for the account of the Lender Party after deduction for or on account of any Taxes, and increased payments are made by the Borrower pursuant to Section 2.11(a), then, if such Lender Party in its reasonable opinion determines that it has received or been granted a credit against or remission for such Taxes, such Lender Party shall, to the extent it can do so without prejudice to the retention of the amount of such credit or remission, reimburse to the Borrower such amount as such Lender Party shall, in its reasonable opinion acting in good faith, have determined to be attributable to the relevant Taxes or deduction or withholding. Any payment made by a Lender Party under this Section 2.11(d) shall be prima facie evidence of the amount due to the Borrower hereunder. Nothing herein contained shall interfere with the right of any Lender Party to arrange its tax affairs in whatever manner it thinks fit and, in particular, no Lender Party shall be under any obligation to claim relief from its corporate profits or similar tax liability in respect of such tax in priority to any other claims, reliefs, credits or deductions available to it nor oblige any Lender Party to disclose any information relating to its tax affairs or any computations in respect thereof. 2.12. FUNDING BY BRANCH, SUBSIDIARY OR AFFILIATE. (a) NOTIONAL FUNDING. Each Lender shall have the right from time to time, prospectively or retrospectively, without notice to the Borrower, to deem any branch, subsidiary or affiliate of such Lender to have made, maintained or funded any part of the Euro-Rate Portion at any time. Any branch, subsidiary or affiliate so deemed shall be known as a "Notional Euro-Rate Funding Office." Such Lender shall deem any part of the Euro-Rate Portion of the Loans or the funding therefor to have been transferred to a different Notional Euro-Rate Funding Office if such transfer would avoid or cure an event or condition described in Section 2.03(e)(ii) hereof or would lessen compensation payable by the Borrower under Section 2.10(a) hereof, and if such Lender determines in its sole discretion that such transfer would be practicable and would not have a material adverse effect on such part of the Loans, such Lender or any Notional Euro-Rate Funding Office (it being assumed for purposes of such determination that each part of the Euro-Rate Portion is actually made or maintained by or funded through the corresponding Notional Euro-Rate Funding Office). Notional Euro-Rate Funding Offices may be selected by such Lender without regard to such Lender's actual methods of making, maintaining or funding Loans or any sources of funding actually used by or available to such Lender. (b) ACTUAL FUNDING. Each Lender shall have the right from time to time to make or maintain any part of the Euro-Rate Portion by arranging for a branch, subsidiary or affiliate of such Lender to make or maintain such part of the Euro-Rate Portion. Such Lender shall have the right to (i) hold any applicable Note payable to its order for the benefit and account of such branch, subsidiary or affiliate or (ii) request the Borrower to issue one or more promissory notes in the principal amount of such Euro-Rate Portion, in substantially the form attached hereto as Exhibit A-1, with the blanks appropriately filled, payable to such branch, subsidiary or affiliate. The Borrower agrees to comply promptly with any request under clause (ii) of this Section 2.12(b). If any Lender causes a branch, subsidiary or affiliate to make or maintain any part of the Euro-Rate Portion hereunder, all terms and conditions of this Agreement shall, except where the context clearly requires otherwise, be applicable to such part of the Euro-Rate Portion and to any note payable to the order of such branch, subsidiary or affiliate to the same extent as if such part of the Euro-Rate Portion were made or maintained and such note were a Term Loan Note payable to such Lender's order. A-15 121 ARTICLE III [RESERVED] ARTICLE IV REPRESENTATIONS AND WARRANTIES The Borrower hereby represents and warrants to each Lender Party as follows: 4.01. CORPORATE STATUS. The Borrower and each Subsidiary of the Borrower is a Corporation duly organized and validly existing under the laws of its jurisdiction of organization. The Borrower and each Subsidiary of the Borrower has corporate power and authority to own its property and to transact the business in which it is engaged or presently proposes to engage. The Borrower and each Subsidiary of the Borrower is duly qualified to do business as a foreign Corporation and, to the extent applicable, is in good standing in all jurisdictions in which the ownership of its properties or the nature of its activities or both makes such qualification necessary or advisable, except for matters that, individually or in the aggregate, do not, and would not be likely to, have a Material Adverse Effect. 4.02. CORPORATE POWER AND AUTHORIZATION. The Borrower has corporate power and authority to execute, deliver, perform, and take all actions contemplated by, each Loan Document to which it is a party, and all such action has been duly and validly authorized by all necessary corporate proceedings on its part. Without limitation of the foregoing, the Borrower has the corporate power and authority to borrow pursuant to the Loan Documents to the fullest extent permitted hereby and thereby, and has taken all necessary corporate action to authorize such borrowings. 4.03. EXECUTION AND BINDING EFFECT. This Agreement, each other Loan Document to which the Borrower is a party and which is executed and delivered or required to be executed and delivered on or before the date as of which this representation and warranty is made, has been duly and validly executed and delivered by the Borrower. This Agreement and each such Loan Document constitutes, and each other Loan Document when executed and delivered by the Borrower will constitute, the legal, valid and binding obligation of the Borrower, enforceable in accordance with its terms. 4.04. GOVERNMENTAL APPROVALS AND FILINGS. No approval, order, consent, authorization, certificate, license, permit or validation of, or exemption or other action by, or filing, recording or registration with, or notice to, any Governmental Authority (collectively, "Governmental Action") is or will be necessary or advisable in connection with execution and delivery of any Loan Document, consummation of the transactions herein or therein contemplated, performance of or compliance with the terms and conditions hereof or thereof or to ensure the legality, validity, binding effect, enforceability or admissibility in evidence hereof or thereof, except for the following: (a) filings and recordings in respect of the Liens in favor of the Collateral Agent and the Agent contemplated hereby and thereby, and (b) other matters set forth in Schedule 4.04 hereof. Each Governmental Action referred to in the foregoing clauses (a) and (b) has been duly obtained or made, as the case may be, and is in full force and effect (except, in the case of clause (a), for the filing of continuation statements and like renewal filings and recordings which are not yet required to be made). There is no action, suit, proceeding or investigation pending or (to the Borrower's knowledge after due inquiry) threatened which A-16 122 seeks or may result in the reversal, rescission, termination, modification or suspension of any such Governmental Action. 4.05. ABSENCE OF CONFLICTS. Neither the execution and delivery of any Loan Document nor consummation of the transactions herein or therein contemplated, nor performance of or compliance with the terms and conditions hereof or thereof, does or will (a) violate or conflict with any Law, or (b) violate or conflict with, or constitute a default under, or result in (or give rise to any right, contingent or other, of any Person to cause) any termination, cancellation, prepayment or acceleration of performance of, or result in the creation or imposition of (or give rise to any obligation, contingent or other, to create or impose) any Lien upon any property of the Borrower or any Subsidiary of the Borrower (except for any Lien in favor of the Collateral Agent securing the Obligations) pursuant to, or otherwise result in (or give rise to any right, contingent or other, of any Person to cause) any change in any right, power, privilege, duty or obligation of the Borrower or any Subsidiary of the Borrower under or in connection with, (i) the articles of incorporation or by-laws (or other constituent documents) of the Borrower or any Subsidiary of the Borrower, or (ii) any agreement or instrument to which the Borrower or any Subsidiary of the Borrower is a party or by which any of them or any of their respective properties may be subject or bound, except, in the case of the foregoing clause (b)(ii), for matters set forth on Schedule 4.05 hereof. 4.06. AUDITED FINANCIAL STATEMENTS. The Borrower has heretofore furnished to the Agent and each Lender consolidated balance sheets of the Borrower and its consolidated Subsidiaries as of December 31, 1994 and December 31, 1995 and the related consolidated statements of income, cash flows and changes in stockholders' equity for the fiscal years then ended, as audited and reported on by Deloitte & Touche, independent certified public accountants for the Borrower, who delivered an unqualified opinion in respect thereof. Such financial statements (including the notes thereto) present fairly the financial position of the Borrower and its consolidated Subsidiaries as of the end of each such fiscal year and the results of their operations and their cash flows for the fiscal years then ended, all in conformity with GAAP. 4.07. INTERIM FINANCIAL STATEMENTS. The Borrower has heretofore furnished to the Agent and each Lender interim consolidated balance sheets of the Borrower and its consolidated Subsidiaries as of September 30, 1996, together with the related consolidated statements of income, cash flows and changes in stockholders' equity for the period from January 1, 1996 to such date. Such financial statements (including the notes thereto) present fairly the financial condition of the Borrower and its consolidated Subsidiaries as of September 30, 1996, and their respective results of operations and cash flows for the fiscal period then ended, all in conformity with GAAP (except that such financial statements do not contain all of the footnote disclosures required by GAAP), subject to normal and recurring year-end audit adjustments. 4.08. ABSENCE OF UNDISCLOSED LIABILITIES. Neither the Borrower nor any Subsidiary of the Borrower has any liability or obligation of any nature (whether absolute, accrued, contingent or other, whether or not due, including but not limited to forward or long-term commitments or unrealized or anticipated losses from unfavorable commitments) that would be required by GAAP to be reflected on A-17 123 a consolidated balance sheet of the Borrower and its Subsidiaries (including the notes thereto) or that has, or would be likely to have, a Material Adverse Effect, except (a) matters set forth on Schedule 4.08 hereto, (b) liabilities and obligations disclosed in the financial statements referred to in Sections 4.05 and 4.06 hereof, (c) liabilities and obligations incurred after December 31, 1995 in the ordinary course of business and consistent with past practices, and (d) obligations under the Credit Facilities. 4.09. ACCURATE AND COMPLETE DISCLOSURE. All written information heretofore, contemporaneously or hereafter provided by or on behalf of the Borrower or any Subsidiary of the Borrower to any Secured Party pursuant to or in connection with any Loan Document or any transaction contemplated hereby or thereby is or will be (as the case may be) true and accurate in all material respects on the date as of which such information is dated (or, if not dated, when received by such Secured Party) and does not or will not (as the case may be) omit to state any material fact necessary to make such information not misleading at such time in light of the circumstances in which it was provided. Except as disclosed to the Agent and each Lender in writing, the Borrower is not aware of any event, change or effect (other than political, social or economic events, changes or effects of general national or global scope) having or likely to have individually or in the aggregate, a Material Adverse Effect. 4.10. PROJECTIONS. The Borrower has delivered to the Agent projections prepared by the Borrower, dated February 5, 1997, for the years 1997 through 2001, demonstrating the projected consolidated financial condition, results of operations and cash flows of the Borrower and its Subsidiaries, which projections are accompanied by a written statement of the assumptions and estimates underlying such projections. Such projections, assumptions and estimates, as of the Closing Date, are reasonable, consistent with the Loan Documents, and represent the best judgment of the Borrower on such matters. Such projections, assumptions and estimates are based upon political, social and economic assumptions that are believed to be reasonable. Nothing has come to the attention of the Borrower as of the Closing Date which would lead it to believe that such projections will not be attained or exceeded. Such projections are not a guarantee of future performance. 4.11. SOLVENCY. On and as of the date hereof, and on the Closing Date, the Borrower and each Significant Subsidiary of the Borrower is and will be Solvent (and for this purpose, each Subsidiary of the Borrower which is not Solvent shall be deemed a Significant Subsidiary if, collectively, together with their respective Subsidiaries, treated as a single entity, they would constitute a Significant Subsidiary). 4.12. MARGIN REGULATIONS. No part of the proceeds of any extension of credit hereunder will be used for the purpose of buying or carrying any "margin stock," as such term is used in Regulations G and U of the Board of Governors of the Federal Reserve System, as amended from time to time, to extend credit to others for the purpose of buying or carrying any "margin stock," or to extend credit to any Subsidiary of the Borrower that is a Broker-Dealer. Neither the Borrower nor any Subsidiary of the Borrower is engaged in the business of extending credit to others for the purpose of buying or carrying "margin stock." Neither the Borrower nor any Subsidiary of the Borrower owns "margin stock" sufficient to cause any Loan Obligations to be deemed "indirectly secured" by "margin stock" within the meaning of such Regulations. Neither any extension of credit pursuant to this Agreement nor any use of proceeds of any such extension of credit will violate or conflict with the provisions of Regulation G, T, U or X of the Board of Governors of the Federal Reserve System, as amended from time to time. A-18 124 4.13. REGULATORY RESTRICTIONS. Except as set forth in Schedule 4.13 hereof, neither the Borrower nor any Subsidiary of the Borrower is (a) an "investment company" or a company "controlled" by an investment company within the meaning of the Investment Company Act of 1940, as amended, (b) a "holding company" or a "subsidiary company" of a "holding company" or an "affiliate" of either a "holding company" or a "subsidiary company" within the meaning of the Public Utility Holding Company Act of 1935, as amended, (c) subject to regulation under the Federal Power Act, the Interstate Commerce Act, or the Investment Company Act of 1940, as amended, or (d) subject to any other Law which purports to restrict or regulate its ability to borrow money or obtain credit as a consequence of the nature of the business conducted by such Person. 4.14. SUBSIDIARIES. Schedule 4.14 hereof states the authorized capitalization of each Subsidiary of the Borrower, the number of Shares of Capital Stock of each class issued and outstanding of each such Subsidiary, and the number and percentage of outstanding Shares of Capital Stock of each such class owned by the Borrower and by each Subsidiary of the Borrower. The outstanding Shares of Capital Stock of each Subsidiary of the Borrower have been duly authorized and validly issued and are fully paid and nonassessable. The Borrower and each Subsidiary of the Borrower owns beneficially and of record and has good title to all of the Shares of Capital Stock it is listed as owning in such Schedule 4.14, free and clear of any Lien, except for Liens in favor of the Collateral Agent securing the Obligations. Except as set forth on Schedule 4.14 hereof, there are no options, warrants, calls, subscriptions, conversion rights, exchange rights, preemptive rights or other rights, agreements or arrangements (contingent or other) which may in any circumstances now or hereafter obligate any Subsidiary of the Borrower to issue any Shares of its Capital Stock or any other securities. 4.15. PARTNERSHIPS, ETC. Neither the Borrower nor any Subsidiary of the Borrower is a partner (general or limited) of any partnership, is a party to any joint venture, or owns (beneficially or of record) any equity or similar interest in any Person (including but not limited to any interest pursuant to which the Borrower or such Subsidiary has or may in any circumstance have an obligation to make capital contributions to, or be generally liable for or on account of the liabilities, acts or omissions of such other Person), except (a) distributorship or similar arrangements that do not involve liability on the part of the Borrower or any of its Subsidiaries in the nature of the liability of a general partner, and (b) partnership interests permitted under Sections 7.05(g) and 7.05(j) hereof. 4.16. LITIGATION. There is no pending or (to the knowledge of the Borrower after due inquiry) threatened action, suit, proceeding or investigation by or before any Governmental Authority against or affecting the Borrower or any Subsidiary of the Borrower, except for (x) matters set forth on Schedule 4.16 hereto, and (y) matters that if adversely decided, individually or in the aggregate, do not, and would not be likely to, have a Material Adverse Effect. 4.17. ABSENCE OF OTHER CONFLICTS. Neither the Borrower nor any Subsidiary of the Borrower is in violation of or conflict with, or is subject to any contingent liability on account of any violation of or conflict with: (a) any Law, (b) its articles of incorporation or by-laws (or other constituent documents), or (c) any agreement or instrument to which it is party or by which it or any of its properties may be subject or bound, A-19 125 except for matters that, individually or in the aggregate, do not, and would not be likely to, have a Material Adverse Effect. 4.18. INSURANCE. The Borrower and each Subsidiary of the Borrower maintains, or causes there to be maintained, with financially sound and reputable insurers not related to or affiliated with the Borrower insurance with respect to its properties and business and against at least such liabilities, casualties and contingencies and in at least such types and amounts as is customary in the case of Persons engaged in the same or a similar business or having similar properties similarly situated. 4.19. TITLE TO PROPERTY. The Borrower and each Subsidiary of the Borrower has good and marketable title in fee simple to all real property owned or purported to be owned by it and good title to all other property of whatever nature owned or purported to be owned by it, including but not limited to all property reflected in the most recent audited balance sheet referred to in Section 4.06 hereof (except as sold or otherwise disposed of in the ordinary course of business after the date of such balance sheet), in each case free and clear of all Liens, other than Permitted Liens. 4.20. INTELLECTUAL PROPERTY. The Borrower and each Subsidiary of the Borrower owns, or is licensed or otherwise has the right to use, all the patents, trademarks, service marks, names (trade, service, fictitious or other), copyrights, technology (including but not limited to computer programs and software), know-how, processes, data bases and other rights, free from burdensome restrictions, necessary to own and operate its properties and to carry on its business as presently conducted and presently planned to be conducted without conflict with the rights of others, except for matters that, individually or in the aggregate, do not, and would not be likely to, have a Material Adverse Effect. 4.21. TAXES. All federal income tax returns required to be filed by or on behalf of the Borrower or any Subsidiary of the Borrower have been properly prepared, executed and filed. All other tax and information returns required to be filed by or on behalf of the Borrower or any Subsidiary of the Borrower have been properly prepared, executed and filed, except for matters that, individually or in the aggregate, do not, and would not be likely to, have a Material Adverse Effect. All taxes, assessments, fees and other governmental charges upon the Borrower or any Subsidiary of the Borrower or upon any of their respective properties, incomes, sales or franchises which are due and payable have been paid, other than those not yet delinquent and payable without premium or penalty, and except for those being diligently contested in good faith by appropriate proceedings, and in each case such reserves and provisions for taxes as may be required by GAAP shall have been made on the books of the Borrower and each Subsidiary of the Borrower. The reserves and provisions for taxes on the books of the Borrower and each Subsidiary of the Borrower for all open years and for its current fiscal period are adequate in accordance with GAAP. As of the Closing Date, neither the Borrower nor any Subsidiary of the Borrower knows of any proposed additional assessment or basis for any material assessment for additional taxes (whether or not reserved against), other than as set forth on Schedule 4.21 hereto. 4.22. EMPLOYEE BENEFITS. Except for matters disclosed to the Agent before the date as of which this representation and warranty is made or reaffirmed, neither the Borrower, any Subsidiary of the Borrower or Controlled Group Member has incurred any liability that has not been fully discharged (or any contingent or other potential liability that represents a material risk of becoming an actual liability) exceeding $150,000 in the aggregate for all such Persons for or in connection with any of the following: (a) any Pension-Related Event (whether or not any such Pension-Related Event has occurred) or (b) any complete or partial withdrawal from any Multiemployer Plan (whether or not such withdrawal A-20 126 has occurred). All employee benefit arrangements covering employees of the Borrower or any of its Subsidiaries have been administered in substantial compliance with, and funded in accordance with, applicable Law. 4.23. ENVIRONMENTAL MATTERS. Except as disclosed in Schedule 4.23 hereof, the Borrower and each Subsidiary of the Borrower and each of their respective Environmental Affiliates is and has been in full compliance with all applicable Environmental Laws, except for matters which, individually or in the aggregate, do not, and would not be likely to, have a Material Adverse Effect. Except as disclosed in Schedule 4.23 hereof, there is no Environmental Claim pending or to the knowledge of the Borrower threatened, and there are no past or present acts, omissions, events or circumstances (including but not limited to any dumping, leaching, deposition, removal, abandonment, escape, emission, discharge or release of any Environmental Concern Material at, on or under any facility or property now or previously owned, operated or leased by the Borrower or any Subsidiary of the Borrower or any of their respective Environmental Affiliates) that could form the basis of any Environmental Claim, against the Borrower or any Subsidiary of the Borrower or any of their respective Environmental Affiliates, except for matters which do not, and, if adversely decided, individually or in the aggregate, would not, have a Material Adverse Effect. Except as disclosed in Schedule 4.23 hereof, no facility or property now or previously owned, operated or leased by the Borrower or any Subsidiary of the Borrower or any of their respective Environmental Affiliates is an Environmental Cleanup Site. No Lien exists, and no condition exists which would be likely to result in the filing of a Lien, against any property of the Borrower or any Subsidiary of the Borrower under any Environmental Law. ARTICLE V CONDITIONS OF LENDING 5.01. CONDITIONS TO INITIAL LOANS. The obligation of each Lender to make Term Loans on the Closing Date is subject to performance by the Borrower of its obligations to be performed hereunder or under the other Loan Documents, to the satisfaction of the conditions precedent set forth herein and in the other Loan Documents and to the satisfaction, immediately prior to or concurrently with the making of such Loan of the following further conditions precedent: (a) AGREEMENT; NOTES. The Agent shall have received, with a copy for each Lender, this Agreement, duly executed on behalf of the Borrower, and Term Loan Notes conforming to the requirements hereof, duly executed on behalf of the Borrower. (b) SHARED SECURITY DOCUMENTS. The Collateral Agent shall have received the following, each of which shall be in form and substance satisfactory to the Agent, with a copy for each Lender (except that the Lenders shall not be entitled to receive duplicate originals of the stock certificates and other instruments pledged pursuant to the following Shared Security Documents and the stock powers delivered in connection therewith): (i) The Collateral Agency Agreement, duly executed on behalf of Borrower and the other parties thereto. (ii) The Borrower Pledge Agreement, duly executed on behalf of the Borrower. A-21 127 (iii) Certificates and instruments representing the stock certificates and other instruments pledged pursuant to the Borrower Pledge Agreement, accompanied by undated duly executed instruments of transfer or assignment in blank, in form and substance satisfactory to the Agent. (iv) Financing statements executed by the Borrower and in proper form for filing under the Uniform Commercial Code in such jurisdictions as may be necessary or, in the opinion of the Agent, desirable to create, perfect or protect the Liens created or purported to be created by the Borrower Pledge Agreement (which financing statements shall cover all personal property of the Borrower, whether or not constituting collateral security under the Borrower Pledge Agreement). (v) Evidence that all other actions necessary or, in the opinion of the Agent, desirable to create, perfect or protect the Liens created or purported to be created by the Borrower Pledge Agreement have been taken. (vi) Evidence of contemporaneous searches of UCC, tax and other appropriate registers, dockets and records, which shall have revealed no filings or recordings with respect to property of the Borrower (other than those relating to Permitted Liens). (c) WEFA ACQUISITION. The Borrower or a Wholly Owned Subsidiary of the Borrower shall have entered into a contract to acquire good title, free of all Liens, to all of the outstanding Shares of Capital Stock of WEFA Holdings, Inc. ("WEFA"). (d) ACQUISITION DOCUMENTS. The Agent shall have received, with copies for each Lender, true and correct copies (in each case certified as to authenticity on behalf of the Borrower) of the following, each of which shall be satisfactory in form and substance to the Agent: all agreements relating to the acquisition of the Shares of Capital Stock of WEFA (including in each case all exhibits, schedules and disclosure letters delivered pursuant thereto), all amendments, waivers and consents relating thereto, and all other side letters or agreements affecting the terms thereof or other transactions contemplated thereby. (e) OTHER CREDIT FACILITIES. The Agent shall have received evidence satisfactory to it that all conditions precedent to funding under the Revolving Credit Agreement and the Note Backup Agreement shall have been satisfied. (f) DISCHARGE OF PRIOR CREDIT FACILITIES. With respect to (a) the Revolving Credit Agreement dated as of June 29, 1995 among the Borrower, the Issuing Banks referred to therein, the Lenders parties thereto from time to time, Mellon Bank, N.A., The First National Bank of Boston, and NationsBank, N.A. (Carolinas), as Co-Agents, and Mellon Bank, N.A., as Agent, as amended, (b) the Term Loan Agreement dated as of June 29, 1995 among the Borrower, the Lenders parties thereto from time to time, Mellon Bank, N.A., The First National Bank of Boston and NationsBank, N.A. (Carolinas), as Co-Agents, and Mellon Bank, N.A., as Agent, as amended, and (c) the Credit Agreement dated as of October 23, 1996 among the Borrower, the Issuing Bank referred to therein, and Mellon Bank, N.A., as Agent, as amended, all principal, interest, letter of credit draws, fees and other amounts outstanding or otherwise due and payable shall have been paid in full, all commitments thereunder shall have terminated, all outstanding letters of credit thereunder shall have been terminated or assumed under one of the Credit Facilities, and all collateral security therefor shall have been released. A-22 128 (g) GOVERNMENTAL APPROVALS AND FILINGS. The Agent shall have received, with copies for each Lender, true and correct copies (in each case certified as to authenticity on such date on behalf of the Borrower) of all items referred to in clause (b) of Section 4.04 hereof and such items shall be satisfactory in form and substance to the Agent and shall be in full force and effect. (h) OTHER CONFLICTS. The Agent shall have received, with copies for each Lender, true and correct copies (in each case certified as to authenticity on such date on behalf of the Borrower) of each consent, waiver, amendment or agreement which has been obtained by or on behalf of the Borrower or any Subsidiary of the Borrower in respect of any matter which would, absent such consent, waiver, amendment or agreement, be within the scope of clause (b)(ii) of Section 4.05 hereof, and such items shall be satisfactory in form and substance to the Agent and shall be in full force and effect. (i) CORPORATE PROCEEDINGS. The Agent shall have received, with a counterpart for each Lender, certificates by the Secretary or Assistant Secretary of the Borrower dated as of the Closing Date as to (i) true copies of the articles of incorporation and by-laws (or other constituent documents) of the Borrower in effect on such date, (ii) true copies of all corporate action taken by the Borrower relative to this Agreement and the other Loan Documents and (iii) the incumbency and signature of the respective officers of the Borrower executing this Agreement and the other Loan Documents to which the Borrower is a party, together with satisfactory evidence of the incumbency of such Secretary or Assistant Secretary. The Agent shall have received, with a copy for each Lender, certificates from the appropriate Secretary of State or other applicable Governmental Authorities dated not more than 30 days before the Closing Date showing the good standing of the Borrower in its state of incorporation. (j) 1996 FINANCIAL STATEMENTS. The Borrower shall have furnished to the Agent an unaudited consolidated balance sheet of the Borrower and its consolidated Subsidiaries as of December 31, 1996, and unaudited consolidated statements of income and stockholders' equity of the Borrower and its consolidated Subsidiaries for the fiscal year ended December 31, 1996. Such financial statements shall have been certified by a Responsible Officer of the Borrower as presenting fairly the consolidated financial position of the Borrower and its consolidated Subsidiaries as of the end of such fiscal year and the consolidated results of their operations and stockholders' equity for such fiscal year, in conformity with GAAP, subject to normal and recurring audit adjustments. (k) FORM U-1. The Agent shall have received, with a counterpart for each Lender, a Federal Reserve Board Form U-1, duly executed by the Borrower, satisfactory in form and substance to the Agent. (l) LITIGATION. There shall not be pending or (to the knowledge of the Borrower after due inquiry) threatened action, suit, proceeding or investigation by or before any Governmental Authority seeking to challenge, prevent or declare illegal any of the transactions contemplated by the Loan Documents. (m) LEGAL OPINION OF COUNSEL TO THE BORROWER. The Agent shall have received, with an executed counterpart for each Lender, an opinion addressed to the Agent and each Lender, dated the Closing Date, of counsel to the Borrower (who shall be satisfactory to the Agent), as to A-23 129 such matters as may be requested by the Agent and in form and substance satisfactory to the Agent. (n) OFFICERS' CERTIFICATES. The Agent shall have received, with an executed counterpart for each Lender, certificates from such officers of the Borrower as to such matters as the Agent may request. (o) NO MATERIAL ADVERSE CHANGE. No material adverse change shall have occurred in the business, operations, assets, condition (financial or otherwise) or prospects of the Borrower and its Subsidiaries taken as a whole since September 30, 1996. (p) REPRESENTATIONS AND WARRANTIES, ETC. All representations and warranties set forth in Article IV hereof shall be true and correct on and as of the Closing Date as if made on and as of the Closing Date, after giving effect to the transactions contemplated by the Loan Documents to occur on or before the Closing Date. (q) NO DEFAULTS. No Event of Default or Potential Default shall have occurred and be continuing or exist on the Closing Date or after giving effect to the transactions contemplated by the Loan Documents to occur on or before the Closing Date. (r) NO VIOLATIONS OF LAW, ETC. Neither the making nor use of the Loans shall cause any Lender Party to violate any Law. (s) NOTICE. Notice with respect to the Loans shall have been given by the Borrower in accordance with Article II hereof. (t) FEES, EXPENSES, ETC. The Borrower shall have executed and delivered an origination fee letter (the "Origination Fee Letter") of even date herewith satisfactory in form and substance to the Agent. All fees and other compensation required to be paid to the Agent or the Lenders pursuant hereto or pursuant to such Origination Fee Letter on or prior to the Closing Date shall have been paid or received. (u) ADDITIONAL MATTERS. All corporate and other proceedings, and all documents, instruments and other matters in connection with the transactions contemplated by this Agreement and the other Loan Documents, shall be satisfactory in form and substance to the Agent. The Agent shall have received such other documents, instruments and other items as the Agent may reasonably request. ARTICLE VI AFFIRMATIVE COVENANTS The Borrower hereby covenants to each Lender Party as follows: 6.01. BASIC REPORTING REQUIREMENTS. (a) ANNUAL AUDIT REPORTS. As soon as practicable, and in any event within 105 days after the close of each fiscal year of the Borrower, the Borrower shall furnish to the Agent, with a copy A-24 130 for each Lender, audited consolidated statements of income, cash flows and stockholders' equity of the Borrower and its consolidated Subsidiaries for such fiscal year, an unaudited consolidating statement of income of the Borrower and its consolidated Subsidiaries for such fiscal year, and an audited consolidated balance sheet and unaudited consolidating balance sheet of the Borrower and its consolidated Subsidiaries as of the close of such fiscal year, and notes to each, all in reasonable detail, prepared on a comparative basis in accordance with GAAP. Such audited financial statements shall be accompanied by an opinion of Deloitte & Touche or other independent certified public accountants of recognized national standing selected by the Borrower and reasonably satisfactory to the Agent. Such opinion shall be free of any exception, qualification or explanation not acceptable to the Agent (and in any event shall be free of any exception, qualification or explanation relating to ability to continue as a going concern, a limited scope of examination or independence). Such opinion in any event shall contain a written statement of such accountants substantially to the effect that (i) such accountants audited such consolidated financial statements in accordance with generally accepted auditing standards and (ii) in the opinion of such accountants such audited financial statements present fairly the financial position of the Borrower and its consolidated Subsidiaries as of the end of such fiscal year and the results of their operations and their cash flows and stockholders' equity for such fiscal year, in conformity with GAAP. Such unaudited financial statements shall be certified by a Responsible Officer of the Borrower as presenting fairly the consolidated and consolidating financial position of the Borrower and its consolidated Subsidiaries as of the end of such fiscal year, and the respective consolidated and consolidating results of their operations and their cash flows and stockholders' equity for such fiscal year, in conformity with GAAP. (b) QUARTERLY REPORTS. As soon as practicable, and in any event within 60 days after the close of each of the first three fiscal quarters of each fiscal year of the Borrower, the Borrower shall furnish to the Agent, with a copy for each Lender, unaudited consolidated statements of income, cash flows and stockholders' equity of the Borrower and its consolidated Subsidiaries for such fiscal quarter and for the period from the beginning of such fiscal year to the end of such fiscal quarter, an unaudited consolidating statement of income for such fiscal quarter and for the period from the beginning of such fiscal year to the end of such fiscal quarter, and unaudited consolidated and consolidating balance sheets of the Borrower and its consolidated Subsidiaries as of the close of such fiscal quarter, and notes to each, all in reasonable detail, setting forth in comparative form the corresponding figures for the same periods or as of the same date during the preceding fiscal year (except for the consolidated balance sheet, which shall set forth in comparative form the corresponding balance sheet as of the prior fiscal year end, and cash flow statements, which shall report only year to date periods). Such financial statements shall be certified by a Responsible Officer of the Borrower as presenting fairly the consolidated and consolidating financial position of the Borrower and its consolidated Subsidiaries as of the end of such fiscal quarter and the respective consolidated and consolidating results of their operations and their cash flows and stockholders' equity for such fiscal quarter, in conformity with GAAP, subject to normal and recurring year-end audit adjustments. (c) COMPLIANCE CERTIFICATES. Concurrently with the delivery of the financial statements referred to in Sections 6.01(a) and 6.01(b), the Borrower shall deliver, or cause to be delivered, to the Agent, with a copy for each Lender, a certificate in substantially the form set forth as Exhibit C, duly completed and signed by a Responsible Officer of the Borrower. (d) ACCOUNTANTS' CERTIFICATES. Concurrently with the Agent's receipt from the Borrower of each set of audited financial statements delivered pursuant to Section 6.01(a), the Borrower shall deliver, or cause to be delivered, to the Agent, with sufficient copies for each Lender, a report signed by A-25 131 the independent certified public accountants who opined on such financial statements and dated the date of such financial statements, stating in substance that they have reviewed this Agreement and the other Loan Documents and that in making the examination necessary for their opinion on such financial statements they did not become aware of any Event of Default or Potential Default pursuant to Sections 7.01, 7.02(e)(iv), 7.03(e) and 7.03(f) as of the end of such fiscal year, or, if they did become so aware, such certificate or report shall state the nature and period of existence thereof. (e) ANNUAL BUSINESS PLAN. Not later than January 31 of each year, the Borrower shall furnish to the Agent, with a copy for each Lender, a business plan for the Borrower and its Subsidiaries for the next five years, certified as such by a Responsible Officer of the Borrower. Such business plan shall be not less detailed than the 1997-2001 corporate plan heretofore delivered to the Agent and each Lender, and shall include or be accompanied by, among other matters reasonably requested from time to time, projected income, cash flows and summary balance sheet for the Borrower and its Subsidiaries, on both a consolidated and a separate unconsolidated basis for each year in such five year period. (f) QUARTERLY PLAN UPDATES. Concurrently with the delivery of the financial statements referred to in Section 6.01(b), the Borrower shall furnish to the Agent, with a copy for each Lender, a quarterly update to the most recent annual business plan, certified as such by a Responsible Officer of the Borrower. Such business plan shall be not less detailed than the third quarter update for 1996 heretofore delivered to the Agent and each Lender. (g) QUARTERLY FINANCIAL INFORMATION. Concurrently with the delivery of the financial statements referred to in Sections 6.01(a) and 6.01(b), the Borrower shall provide the Agent, with a copy for each Lender, summary financial information as to the Borrower and its consolidated Subsidiaries on a consolidated basis (and separate financial information for such Subsidiaries as the Agent may reasonably request) as of the end of the preceding month, all in reasonable detail and in any case including, among other matters reasonably requested by the Agent from time to time, financial information on a monthly and year-to-date basis, and separate line-items showing EBIT, depreciation and amortization, all certified by a Responsible Officer of the Borrower. (h) CERTAIN OTHER REPORTS AND INFORMATION. Promptly upon their becoming available to the Borrower, the Borrower shall deliver, or cause to be delivered, to the Agent, with a copy for each Lender, a copy of (i) all regular or special reports, registration statements and amendments to the foregoing which the Borrower or any Subsidiary of the Borrower shall file with the Securities and Exchange Commission (or any successor thereto) or any securities exchange, (ii) all reports, proxy statements, financial statements and other information distributed by the Borrower to its security holders or the financial community generally, and (iii) upon request by any Lender Party, all reports submitted by outside accountants in connection with any audit of the Borrower or any Subsidiary of the Borrower, including but not limited to all management letters commenting on the internal controls of the Borrower or any Subsidiary of the Borrower submitted in connection with any such audit. (i) FURTHER INFORMATION. The Borrower will promptly furnish, or cause to be furnished, to the Agent, with a copy for each Lender, such other information and in such form as the Agent or any Lender may reasonably request from time to time. (j) NOTICE OF CERTAIN EVENTS. Promptly upon becoming aware of any of the following, the Borrower shall give the Agent notice thereof, together with a written statement of a Responsible A-26 132 Officer of the Borrower setting forth the details thereof and any action with respect thereto taken or proposed to be taken by the Borrower, and the Agent shall promptly notify each Lender thereof: (i) Any Event of Default or Potential Default. (ii) Any material adverse change in the business, operations, condition (financial or otherwise) or prospects (exclusive, in the case of prospects, of political, social or economic events, changes or effects of general national or global scope) of the Borrower and its Subsidiaries taken as a whole. (iii) Any pending or threatened action, suit, proceeding or investigation by or before any Governmental Authority against or affecting the Borrower or any Subsidiary of the Borrower which, if adversely decided, individually or in the aggregate, would, or would be likely to, have a Material Adverse Effect. (iv) Any termination for default by the Borrower of any contract which would reasonably be likely to result in a direct loss of aggregate revenues in excess of $20,000,000 to which the Borrower or any Subsidiary of the Borrower is a party. (v) Any Pension-Related Event, other than (w) any Reportable Event described in subsection (i) of the definition of such term herein as to which the 30 day notice requirement to the PBGC is waived under applicable regulations, and (x) any Pension-Related Event described in subsection (d) or (f) of the definition thereof which involves a liability of the Borrower, any Subsidiary of the Borrower or any Controlled Group Member that has not been fully discharged (or a contingent or other potential liability that represents a material risk of becoming an actual liability) of less than $1,000,000 in the aggregate for all such Persons. Such notice shall be accompanied by the following: (y) a copy of any notice, request, return, petition or other document received by the Borrower, any Subsidiary of the Borrower or any Controlled Group Member from any Person, or which has been or is to be filed with or provided to any Person (including, without limitation, the Internal Revenue Service, the Department of Labor, the PBGC or any Plan participant, beneficiary, alternate payee or employer representative), in connection with such Pension-Related Event, and (z) in the case of any Pension-Related Event with respect to a Plan, the most recent Annual Report (5500 Series), with attachments thereto, and if such Plan is required by applicable Law to have an actuarial valuation report, the most recent actuarial valuation report, for such Plan. (k) VISITATION AND VERIFICATION GENERALLY. The Borrower shall permit such Persons as the Agent or any Lender may designate from time to time to visit and inspect any of the properties of the Borrower and any Subsidiary of the Borrower, to examine their respective books and records and take copies and extracts therefrom and to discuss their respective affairs with their respective directors, officers, employees and independent accountants at such times and as often as the Agent or any Lender may reasonably request, subject to mandatory national security regulations. The Borrower hereby authorizes such officers, employees and independent accountants to discuss with the Agent or any Lender the affairs of the Borrower and its Subsidiaries, subject to mandatory national security regulations. The Agent and the Lenders shall have the right to examine and verify accounts, inventory and other properties and liabilities of the Borrower and its Subsidiaries from time to time, and the Borrower shall cooperate, and shall cause each of its Subsidiaries to cooperate, with the Agent and the Lenders in such verification, subject to mandatory national security regulations. A-27 133 (l) DUTY TO MAINTAIN INDEPENDENT ACCOUNTANTS WITH SECURITY CLEARANCES; VERIFICATION OF CLASSIFIED CONTRACTS. The Borrower shall, and shall cause each such Subsidiary to, retain at all times an independent certified public accountant of national standing having personnel who at all times have security clearances sufficient to permit them to examine and verify all such classified contracts, accounts and other assets which, individually or in the aggregate, are material to the business, operations, condition (financial or otherwise) or prospects of the Borrower and its Subsidiaries taken as a whole. The Borrower shall, from time to time at the reasonable request of the Agent, cause such independent accountants to examine, verify and report to the Agent on such classified contracts, accounts and assets as the Agent may request, to the fullest extent permitted by mandatory national security regulations. (m) CHANGES IN CORPORATE STRUCTURE. Concurrently with the delivery of the financial statements referred to in Sections 6.01(a) and 6.01(b), the Borrower shall deliver to the Agent notice of any change in the matters set forth in Section 4.14 hereof, together with an amended and restated Schedule 4.14 which reflects such change. 6.02. INSURANCE. The Borrower shall, and shall cause each of its Subsidiaries to, maintain with financially sound and reputable insurers insurance with respect to its properties and business and against such liabilities, casualties and contingencies and of such types as are reasonably satisfactory to the Agent from time to time, and in any case as is customary in the case of Persons engaged in the same or a similar business or having similar properties similarly situated. The Borrower shall, if so requested by the Agent, deliver to the Agent original or duplicate policies or certificates of such insurance and, as often as the Agent may reasonably request, a report of a reputable insurance broker, or an insurance company representative if an insurance broker is not involved, with respect to such insurance. 6.03. PAYMENT OF TAXES AND OTHER POTENTIAL CHARGES AND PRIORITY CLAIMS. The Borrower shall promptly notify the Agent in writing if it or any of its Subsidiaries learns of any proposed additional assessment or basis for any assessment for additional taxes (whether or not reserved against) which, if paid or incurred, would have a Material Adverse Effect. The Borrower shall, and shall cause each of its Subsidiaries to, pay and discharge, or cause to be paid and discharged, (a) on or prior to the date on which penalties attach thereto, all taxes, assessments and other governmental charges imposed upon it, or any of them, or any of its, or any of their, properties; (b) on or prior to the date when due, all lawful claims of materialmen, mechanics, carriers, warehousemen, landlords and other like Persons which, if unpaid, might result in the creation of a Lien upon any such property; and (c) on or prior to the date when due, all other lawful claims which, if unpaid, might result in the creation of a Lien upon any such property or which, if unpaid, might give rise to a claim entitled to priority over general creditors of the Borrower or such Subsidiary in any bankruptcy, insolvency, receivership or similar proceeding; provided, that, unless and until foreclosure, distraint, levy, sale or similar proceedings shall have been commenced, the Borrower or such Subsidiary need not pay or discharge, or cause the payment or discharge, of any such tax, assessment, charge or claim above so long as (x) the validity thereof is A-28 134 contested in good faith and by appropriate proceedings diligently conducted, and (y) such reserves or other appropriate provisions as may be required by GAAP shall have been made therefor. 6.04. PRESERVATION OF CORPORATE STATUS. The Borrower shall, and shall cause each of its Subsidiaries to, maintain its status as a Corporation duly organized, validly existing and, to the extent applicable, in good standing under the laws of its jurisdiction of organization, except for Permitted Mergers. The Borrower shall, and shall cause each of its Subsidiaries to, at all times be duly qualified to do business as a foreign Corporation and, to the extent applicable, in good standing in all jurisdictions in which the ownership of its properties or the nature of its business or both make such qualification necessary or advisable, except for matters that, individually or in the aggregate, do not, and would not be likely to, have a Material Adverse Effect. 6.05. GOVERNMENTAL APPROVALS AND FILINGS. The Borrower shall, and shall cause each of its Subsidiaries to, keep and maintain in full force and effect all Governmental Actions necessary or advisable in connection with execution and delivery of any Loan Document, consummation of the transactions herein or therein contemplated, performance of or compliance with the terms and conditions hereof or thereof, or to ensure the legality, validity, binding effect, enforceability or admissibility in evidence hereof or thereof. 6.06. MAINTENANCE OF PROPERTIES, FRANCHISES, ETC. The Borrower shall, and shall cause each of its Subsidiaries to, (a) maintain or cause to be maintained in good repair, working order and condition the properties now or hereafter owned, leased or otherwise possessed by it and shall make or cause to be made all needful and proper repairs, renewals, replacements and improvements thereto so that the business carried on in connection therewith may be properly and advantageously conducted at all times, except where failure to do so does not, and would not be likely to, have a Material Adverse Effect, and (b) maintain and hold in full force and effect all franchises, licenses, permits, certificates, authorizations, qualification, accreditations and other rights, consents and approvals (whether issued, made or given by a Governmental Authority or otherwise), necessary to own and operate its properties and to carry on its business as presently conducted and as presently planned to be conducted, except where failure to do so does not, and would not be likely to, have a Material Adverse Effect. 6.07. AVOIDANCE OF OTHER CONFLICTS. The Borrower shall not, and shall not permit any of its Subsidiaries to, violate or conflict with, be in violation of or conflict with, or be or remain subject to any liability (contingent or other) on account of any violation or conflict with (a) any Law, (b) its certificate or articles of incorporation or by-laws (or other constituent documents), or (c) any agreement or instrument to which it or any of its Subsidiaries is a party or by which any of them or any of their respective properties may be subject or bound, except for matters of the type referred to in clauses (a) and (c) that could not, individually or in the aggregate, do not, and would not be likely to, have a Material Adverse Effect. 6.08. FINANCIAL ACCOUNTING PRACTICES. The Borrower shall, and shall cause each of its Subsidiaries to, make and keep books, records and accounts which, in reasonable detail, accurately and A-29 135 fairly reflect its transactions and dispositions of its assets, and maintain a system of internal accounting controls sufficient to provide reasonable assurances that (a) transactions are executed in accordance with management's general or specific authorization, (b) transactions are recorded as necessary (i) to permit preparation of financial statements in conformity with GAAP and (ii) to maintain accountability for assets, (c) access to assets is permitted only in accordance with management's general or specific authorization and (d) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. 6.09. USE OF PROCEEDS. The Borrower shall apply the proceeds of the Loans under this Agreement, together with other funds of the Borrower, to (a) payment in full on the Closing Date of all principal, interest and fees outstanding and accrued under the prior credit facilities of the Borrower referred to in Section 5.01(f), and (b) from and after the Closing Date, for general corporate purposes of the Borrower (including, to the extent otherwise consistent with this Agreement and the other Loan Documents, the making of acquisitions). The Borrower shall not use the proceeds of any Loans directly or indirectly for any unlawful purpose, in any manner inconsistent with Section 4.12, or inconsistent with any other provision of this Agreement or any other Loan Document. 6.10. CONTINUATION OF OR CHANGE IN BUSINESS. The Borrower shall, and shall cause each of its Subsidiaries to, engage in the businesses they have engaged in during the present and preceding fiscal years and the Borrower shall not, and shall not permit any of its Subsidiaries to, engage in any business other than the financial information services business, other information services businesses and matters incidental thereto; provided, that TIMCO may continue to conduct its business in substantially the manner in which it conducts such business as of the date hereof. Without limitation of the foregoing, the Borrower shall continue to operate as a holding company and shall not conduct any material business other than holding the capital stock of Subsidiaries and matters incidental thereto. 6.11. PLANS AND MULTIEMPLOYER PLANS. (a) REQUIRED CONTRIBUTIONS. The Borrower shall, and shall cause each Subsidiary of the Borrower and Controlled Group Members to, make contributions to each Plan when due in accordance with the minimum funding requirements under ERISA and the Code applicable to such Plan and pay any required PBGC premiums as and when due for such Plan. (b) REQUIRED CONTRIBUTIONS TO MULTIEMPLOYER PLANS. The Borrower shall, and shall cause each Subsidiary of the Borrower and Controlled Group Members to, make contributions required to be made by it, or any of them, to each Multiemployer Plan, if any, when due in accordance with its, or any of their, obligations under any collective bargaining agreement related to such Multiemployer Plan or participation agreements applicable to such Multiemployer Plan, except those contributions the requirement of which are reasonably being contested by a Controlled Group Member provided that failure to make such contested contributions is not a violation of applicable Law and does not present a material risk of resulting in liability (contingent or other) to the Borrower or any Subsidiary of the Borrower. (c) FUNDING. The Borrower shall, and shall cause each of its Subsidiaries to, make any required contributions to any arrangements for providing retirement and/or death benefits when due, in accordance with the terms of the arrangement and/or any minimum funding requirements which are applicable to the arrangement from time to time. The Borrower shall not, nor shall it permit any of its Subsidiaries to, allow any arrangement for providing retirement and/or death benefits to become A-30 136 underfunded (as determined on the basis of reasonable actuarial assumptions) by an amount which, in the aggregate for all such arrangements, exceeds $10,000,000. 6.12. DISASTER RECOVERY PLAN. The Borrower shall cause each of Datastream International Limited, Disclosure Incorporated and ICV Limited to maintain in full force and effect at all times disaster recovery plans consistent with prudent practice for Persons engaged in the same or a similar business. 6.13. ANNUAL BANK MEETING. The Borrower shall hold meetings of the Lenders annually at the request of the Agent. 6.14. SEPARATE CORPORATE EXISTENCE. The Borrower acknowledges that the Lender Parties are entering into the transactions contemplated by this Agreement and the other Loan Documents in reliance upon the identity of the Subsidiaries of the Borrower as legal entities separate from the Borrower. Accordingly, the Borrower shall take, and shall cause its Subsidiaries to take, all reasonable steps to continue the identities of its Subsidiaries as separate legal entities, and to make it apparent to third Persons that its Subsidiaries are entities with assets and liabilities distinct from those of the Borrower. Without limiting the generality of the foregoing, the Borrower shall take such actions as shall be required in order that: (a) For each Subsidiary of the Borrower in which the Borrower directly owns, beneficially or of record, Shares of Capital Stock, at least one director or officer of the Borrower shall be a person who is not a director or officer of such Subsidiary. (b) The books and records of each Subsidiary of the Borrower shall be maintained separately from those of the Borrower and each of its other Subsidiaries. (c) The assets of each Subsidiary of the Borrower will be maintained in a manner that facilitates their identification and segregation from those of the Borrower and its other Subsidiaries. (d) The Borrower and each Subsidiary of the Borrower shall strictly observe corporate formalities. The Borrower and each of its Subsidiaries will conduct their respective businesses in their own respective names. The business and affairs of the Borrower and each Subsidiary shall be managed by or under the direction of the board of directors of such Person. (e) Funds or other assets of Subsidiaries of the Borrower will not be commingled with those of the Borrower and its other Subsidiaries (it being understood that such restriction shall not be interpreted to forbid intercompany loans and Advances that have been properly documented and accounted for on the books and records of each relevant entity, made in compliance with corporate formalities, and otherwise made in compliance with this Agreement and the other Loan Documents). (f) The operating expenses of the Borrower and each Subsidiary of the Borrower will be paid by such Person. To the extent, if any, that the Borrower and any of its Subsidiaries share items of expenses, such expenses will be allocated to the extent practical on the basis of actual use or the value of services rendered, and otherwise on a basis reasonably related to actual use or the value of services rendered, and each such Person shall pay its allocated share of such A-31 137 expenses on a current basis. To the extent, if any, that the Borrower and any of its Subsidiaries provides services to one another, the provider shall be compensated by the recipient on a current basis at fair and reasonable rates. To the extent, if any, that any consolidated or combined tax return is filed including any of the Borrower or its Subsidiaries, each such Person shall pay or be paid, as the case may be, on a current basis an equitable share of the consolidated tax payment or refund associated therewith. (g) Annual financial statements of the Borrower which are consolidated to include its Subsidiaries will contain notes clearly stating that each such Subsidiary is a corporate or similar entity separate from the Borrower and its other Subsidiaries, and that the stock of each direct Subsidiary of the Borrower has been pledged to secure the Obligations. 6.15. ADDITIONAL SECURITY. (a) GENERAL. Promptly upon the request of the Agent from time to time, the Borrower shall as promptly as practicable (and in any case within 30 days after such request, or such longer period as the Agent may specify in writing) further secure the Obligations by granting to the Collateral Agent a valid and perfected Lien, prior to all other Liens except Permitted Liens, on such of its properties from time to time as the Agent may designate (except for property subject to a Permitted Lien as to which the Borrower is required to obtain the consent of the holder of such Permitted Lien before granting such a Lien to the Collateral Agent and as to which the Borrower is unable, using reasonable efforts, to obtain such consent). In connection therewith, the Borrower shall (i) execute and deliver to the Agent such mortgages, security agreements and other agreements and instruments, and do such other acts and things as shall be necessary or, in the judgment of the Agent, appropriate to grant to the Collateral Agent a valid and perfected Lien on such property, prior to all other Liens except Permitted Liens, and (ii) procure and deliver to the Agent such other items (including but not limited to lien searches, title insurance policies, surveys, environmental audits, insurance endorsements and opinions of counsel), and do such other acts and things, as the Agent may request in connection with the foregoing. All of the foregoing shall be in form and substance satisfactory to the Agent. From time to time as requested by the Agent, the Borrower shall use reasonable efforts to (w) obtain the consent of any Person whose consent is necessary or advisable to the creation, perfection or maintenance of any such Lien, including but not limited to that of any lessor whose consent may be required in connection with any such Lien on any leasehold interest, and to obtain nondisturbance and like agreements from mortgagees and other holders of superior rights in the property subject to any such leasehold interest, (x) obtain waivers of Liens from such landlords and mortgagees and from other Persons described in Section 6.03(b) hereof, (y) with respect to securities accounts, commodity accounts, deposit accounts or similar interests, obtain consent agreements from each securities intermediary, commodity intermediary, depository bank or similar person, satisfactory in form and substance to the Agent, which shall include provisions giving the Collateral Agent sole dominion and control over such interest upon the giving of notice by the Collateral Agent (it being understood that the related security agreement shall provide that the Collateral Agent may exercise such sole dominion and control upon the occurrence and during the continuance of an Event of Default), and (z) do such other acts and things as the Agent may deem appropriate to enhance, preserve or protect the security for the Obligations. (b) NOTICE OF CERTAIN REALTY TRANSACTIONS. The Borrower shall promptly give notice to the Agent of any acquisition by the Borrower of any interest or interests in real property (fee, leasehold or otherwise) or fixtures having a fair market value, individually or in the aggregate, in excess of A-32 138 $5,000,000 (except for leasehold interests having a term, including all options exercisable by the lessee, less than 5 years). 6.16. INTEREST RATE PROTECTION. (a) REQUIRED HEDGE. The Borrower shall, promptly (and in any event not later than 60 days) after the first date on or after the Closing Date on which the three-month Euro-Rate (as determined by the Agent) is at least 8.00% on at least ten of the 30 days immediately preceding such date, enter into an Interest Rate Hedging Agreement having an effective rate and other terms and conditions satisfactory to the Agent, for notional principal amounts and tenors sufficient to hedge at least 65% of the scheduled outstanding principal amount of the Indebtedness under the Term Loan Agreement for the period from the effective date of such Interest Rate Hedging Agreement through the fifth anniversary thereof (or, if earlier, the Term Loan Maturity Date). The Borrower shall thereafter select interest rate options under the Term Loan Agreement that match, in time and amount, as closely as may be the terms of the rate hedge represented by such Interest Rate Hedging Agreement. (b) SECURING THE REQUIRED HEDGE. If the Borrower so requests, the Agent shall consent to a Swap Party Supplement to the Collateral Agency Agreement whereby the Interest Rate Hedging Agreement referred to in Section 6.16(a) hereof shall be deemed a Swap Agreement entitled to the benefits of the Collateral Agency Agreement, but only if the following conditions are met: (i) the counterparty to such Interest Rate Hedging Agreement is a Lender, (ii) the "Swap Shared Security Cap" set forth in such Swap Party Supplement is, in the good faith judgment of the Agent, not more than 110% of the credit equivalent exposure represented by such Swap Agreement (calculated in accordance with the Agent's ordinary methods), and (iii) the Borrower provides the Agent with such contemporaneous bringdown Lien searches as the Agent may request, the results of which shall be satisfactory to the Agent. (c) EXISTING RATE HEDGES, ETC. To the extent otherwise consistent with this Agreement and the other Loan Documents, the Borrower may enter into Interest Rate Hedging Agreements in advance of the date on which it is required to do so under Section 6.16(a), and to the extent that such Interest Rate Hedging Agreements satisfy the requirements of Sections 6.16(a) and 6.16(b) the Agent may enter into a Swap Party Supplement to the Collateral Agency Agreement with respect to such Interest Rate Hedging Agreements. In the event that the Borrower becomes obligated to enter into Interest Rate Hedging Agreements under Section 6.16(a), any then-existing Interest Rate Hedging Agreements to which Borrower is party and which otherwise satisfy the requirements of Section 6.16(a) shall be counted toward satisfaction of the Borrower's obligations under Section 6.16(a), to the extent of the notional amounts and tenors of such then-existing Interest Rate Hedging Agreements. Nothing in Section 6.16(b) shall be construed to forbid the Agent from consenting to a Swap Party Supplement relating to Interest Rate Hedging Agreements if the conditions set forth in Section 6.16(b) are satisfied, even if such Interest Rate Hedging Agreements in the aggregate exceed in amount or time the minimum requirements set forth in Section 6.16(a). ARTICLE VII NEGATIVE COVENANTS The Borrower hereby covenants to each Lender Party as follows: A-33 139 7.01. FINANCIAL COVENANTS. (a) CONSOLIDATED NET WORTH (ADJUSTED). As of the end of each fiscal quarter of the Borrower ending on or after December 31, 1996, Consolidated Net Worth (Adjusted) shall not be less than the applicable amount specified below:
Consolidated Net Worth (Adjusted) From and including To and including shall not be less than ------------------ ---------------- ---------------------- December 31, 1996 December 30, 1997 $425,000,000 December 31, 1997 December 30, 1998 $450,000,000 December 31, 1998 December 30, 1999 $475,000,000 December 31, 1999 December 30, 2000 $500,000,000 December 31, 2000 December 30, 2001 $525,000,000 December 31, 2001 December 30, 2002 $550,000,000 December 31, 2002 December 30, 2003 $575,000,000 Thereafter $600,000,000
(b) CONSOLIDATED FIXED CHARGE COVERAGE RATIO. As of the end of each fiscal quarter of the Borrower ending on or after December 31, 1996, the Consolidated Fixed Charge Coverage Ratio for the period of four consecutive fiscal quarters ending on the last day of such fiscal quarter, considered as a single accounting period, shall not be less than the applicable amount set forth below.
Fiscal quarter ending on Consolidated Fixed Charge Coverage Ratio a date in the following for the four fiscal quarters ending period (inclusive) on such date shall not be less than ------------------ ----------------------------------- December 31, 1996 through December 31, 1997 1.75 January 1, 1998 through December 31, 1998 2.00 January 1, 1999 through December 31, 1999 2.25 Thereafter 2.50
(c) CONSOLIDATED FUNDED DEBT RATIO (ADJUSTED). As of the end of each fiscal quarter of the Borrower ending on or after December 31, 1996, the Consolidated Funded Debt Ratio (Adjusted) for the period of four consecutive fiscal quarters ending on the last day of such fiscal quarter, considered as a single accounting period, shall not be greater than the applicable amount set forth below.
Fiscal quarter ending on Consolidated Funded Debt Ratio (Adjusted) a date in the following for the four fiscal quarters ending period (inclusive) on such date shall not be greater than ------------------ -------------------------------------- December 31, 1996 through December 30, 1997 5.50 December 31, 1997 through December 30, 1998 5.00
A-34 140
December 31, 1998 through December 30, 1999 4.00 Thereafter 3.00
7.02. LIENS. The Borrower shall not, and shall not permit any Subsidiary of the Borrower to, at any time create, incur, assume or permit to exist any Lien on any of its property (now owned or hereafter acquired), or agree, become or remain liable (contingently or otherwise) to do any of the foregoing, except for the following (referred to herein as "Permitted Liens"): (a) Liens pursuant to the Shared Security Documents in favor of the Collateral Agent for the benefit of the Secured Parties to secure the Obligations; (b) Liens arising from taxes, assessments, charges or claims described in Sections 6.03(a) and 6.03(b), to the extent permitted to remain unpaid under such Section 6.03; (c) Deposits or pledges of cash or securities in the ordinary course of business to secure (i) workmen's compensation, unemployment insurance or other social security obligations, (ii) performance of bids, tenders, trade contracts (other than for payment of money) or leases, (iii) stay, surety or appeal bonds, or (iv) other obligations of a like nature incurred in the ordinary course of business; (d) Judgment liens fully bonded pending appeal; (e) Liens by the Borrower or a Subsidiary of the Borrower on property securing all or part of the purchase price thereof and Liens (whether or not assumed) existing on property at the time of purchase thereof by the Borrower or a Subsidiary of the Borrower, provided that: (i) such Lien is created before or substantially simultaneously with the purchase of such property in the ordinary course of business by the Borrower or such Subsidiary (or is a Lien securing successor obligations incurred to extend or refinance predecessor obligations allowed under this Section 7.02(e), provided that in each case the successor obligation is an obligation of the same Person subject to the predecessor obligation, is not greater than (and is not otherwise on terms less advantageous than) the predecessor obligation, and the Lien securing the successor obligation does not extend to any property other than that subject to the Lien securing the predecessor obligation); (ii) such Lien is confined solely to the property so purchased, improvements thereto and proceeds thereof; (iii) the aggregate amount secured by all such Liens on any particular property at the time purchased by the Borrower or such Subsidiary, as the case may be, shall not exceed the lesser of the purchase price of such property or the fair market value of such property at the time of purchase thereof ("purchase price" for this purpose including the amount secured by each such Lien thereon whether or not assumed); and (iv) the obligation secured by such Lien is Indebtedness permitted under Section 7.03(e) hereof; A-35 141 (f) Liens in favor of the United States Government which arise in the ordinary course of business resulting from progress payments or partial payments under United States Government contracts or subcontracts thereunder; (g) Rights arising or reserved to the lessor under any Capitalized Lease Obligations permitted by Section 7.03(e) hereof; (h) Zoning restrictions, easements, minor restrictions on the use of real property, minor irregularities in title thereto and other minor Liens that do not secure the payment of money or the performance of an obligation and that do not in the aggregate materially detract from the value of a property or asset to, or materially impair its use in the business of, the Borrower or such Subsidiary; (i) Liens existing on the Closing Date and listed on Schedule 7.02 hereof (but not any extension, renewal or replacement Liens); and (j) Liens on property of TIMCO to secure payment of reimbursement obligations of TIMCO with respect to the TIMCO Bonds Letter of Credit, and Liens on property of TIMCO securing Indebtedness of TIMCO constituting a refinancing of the TIMCO Bonds and the TIMCO Lease permitted by Section 7.03(j) hereof. Notwithstanding the foregoing, "Permitted Lien" in respect of the Borrower or any Subsidiary of the Borrower shall in no event include (x) any Lien imposed by, or required to be granted pursuant to, ERISA, the Code or any Environmental Law, (y) except as provided in Section 7.02(a) hereof, any Lien on the Shared Collateral Account or any other account (custodial, deposit or other) maintained by or with the Collateral Agent pursuant to the Shared Security Documents, or any other investment property or deposit account (as such terms are defined in the Uniform Commercial Code), or (z) except as provided in Section 7.02(a) hereof, any Lien on Shares of Capital Stock of, or obligations owed by, a Subsidiary of the Borrower. 7.03. INDEBTEDNESS. The Borrower shall not, and shall not permit any Subsidiary of the Borrower to, at any time create, incur, assume or permit to exist any Indebtedness, or agree, become or remain liable (contingently or otherwise) to do any of the foregoing, except: (a) Indebtedness of the Borrower under the Revolving Credit Agreement, in aggregate principal amount not to exceed $75,000,000 (including any extension, renewal or refinancing thereof made in compliance with Section 7.11(c) hereof); (b) Indebtedness of the Borrower in favor of the Lender Parties pursuant to this Agreement and the other Loan Documents; (c) Indebtedness of the Borrower or any of its Subsidiaries not exceeding $8,250,000 in principal amount, issued in connection with the acquisition by the Borrower or a Subsidiary of all of the Shares of Capital Stock of ICV (such Indebtedness being referred to herein as the "ICV Notes"); and Indebtedness of the Borrower under the Note Backup Agreement and the letters of credit subject thereto; A-36 142 (d) Indebtedness of the Borrower under the Senior Notes, in aggregate principal amount not to exceed $112,000,000 (but not any extensions, renewals or refinancings of any thereof); (e) Indebtedness constituting Capitalized Lease Obligations of the Borrower and its Subsidiaries incurred in the ordinary course of business from time to time, and Indebtedness of the Borrower and its Subsidiaries secured by Liens described in Section 7.02(e) on property used in the ordinary course of business of the Borrower or such Subsidiary from time to time; provided, that the aggregate amount of Indebtedness described in this Section 7.03(e) shall not exceed $20,000,000 at any time; (f) Other Indebtedness of the Borrower and its Subsidiaries not exceeding $30,000,000 aggregate principal amount at any time outstanding; (g) Current accounts payable of the Borrower or any of its Subsidiaries on normal trade terms to trade creditors arising out of purchases of goods or services in the ordinary course of business; (h) Indebtedness of the Borrower pursuant to any Interest Rate Hedge Agreement required to be entered into pursuant to Section 6.16(a) hereof; and Indebtedness of the Borrower or any of its Subsidiaries under any other interest rate or currency swap, cap, floor, collar, future, forward or option agreement, or similar interest rate or currency protection agreement, entered into for the purpose of hedging and not for purposes of speculation (and not structured to contain an embedded loan); (i) Indebtedness constituting intercompany loans and Advances permitted by Sections 7.05(d), 7.05(e), 7.05(h) and 7.05(i) hereof; (j) Indebtedness of TIMCO constituting a letter of credit issued for its account not exceeding $12,600,000 in stated amount, which letter of credit effectively secures the TIMCO Bonds; any extension, renewal or refinancing of such letter of credit, provided, however, that the stated amount thereof is not increased and TIMCO remains the account party with respect thereto (such letter of credit, together with any such extension, renewal or refinancing letter of credit, being referred to herein as the "TIMCO Bonds Letter of Credit"); and any Indebtedness of TIMCO which amends, renews or refinances (collectively, "refinances") the TIMCO Bonds, the TIMCO Lease and the TIMCO Bonds Letter of Credit, provided, however, that after giving effect to such refinancing, (i) the principal amount of Indebtedness is not increased, (ii) neither the stated maturity nor the average life of the Indebtedness is reduced, and (iii) TIMCO remains the obligor on such refinancing Indebtedness; and (k) Indebtedness for borrowed money of Primark Economics or any of its Subsidiaries not exceeding $6,000,000 in aggregate principal amount at any time outstanding. 7.04. GUARANTIES, INDEMNITIES, ETC. The Borrower shall not, and shall not permit any Subsidiary of the Borrower to, be or become subject to or bound by any Guaranty Equivalent, or agree, become or remain liable (contingently or otherwise) to do any of the foregoing, except: (a) Contingent liabilities arising from the endorsement of negotiable or other instruments for deposit or collection or similar transactions in the ordinary course of business; A-37 143 (b) Indemnities by the Borrower or a Subsidiary of the liabilities of its directors, officers and employees in their capacities as such as permitted by Law; (c) Guaranty Equivalents existing on the Closing Date and listed in Schedule 7.04 hereof (but not extensions, renewals or refinancings thereof or of any associated Assured Obligation); provided, that this Section 7.04(c) shall not apply to any Guaranty Equivalent as to which the Deemed Obligor is, on the Closing Date, a Subsidiary of the Borrower if such Subsidiary thereafter ceases to be a Subsidiary of the Borrower; (d) Guaranty Equivalents by the Borrower or a Subsidiary constituting usual and customary indemnities with respect to liabilities (other than Indebtedness) in connection with a disposition of stock or assets by the Borrower or such Subsidiary; (e) Other Guaranty Equivalents by the Borrower or a Subsidiary of the Borrower from time to time of obligations of a Substantially Owned Subsidiary of the Borrower, provided that the Deemed Obligor in respect of such Guaranty Equivalent is a Substantially Owned Subsidiary of the Deemed Guarantor; (f) Other Guaranty Equivalents by a Borrower or a Subsidiary of the Borrower from time to time, provided that the sum of (i) the maximum aggregate potential obligation of the Borrower or any Subsidiary of the Borrower under Guaranty Equivalents described in this Section 7.04(f), plus (ii) the aggregate amount of all payments made by the Borrower and its Subsidiaries after the date hereof under Guaranty Equivalents described in this Section 7.04(f), shall not exceed $2,000,000; and (g) Obligations of a Subsidiary of the Borrower as general partner of a partnership permitted under Sections 7.05(g) or 7.05(j). 7.05. LOANS, ADVANCES AND INVESTMENTS. The Borrower shall not, and shall not permit any Subsidiary of the Borrower to, at any time make or permit to exist or remain outstanding any loan or Advance to, or purchase, acquire or own (beneficially or of record) any Shares of Capital Stock of, any stock, bonds, notes or securities of, or any partnership interest (whether general or limited), membership interest or beneficial interest in, or any other debt or equity interest in, or make any capital contribution to or other investment in, any other Person, or agree, become or remain liable (contingently or otherwise) to do any of the foregoing, except: (a) Receivables owing to the Borrower or any Subsidiary of the Borrower arising from performance of services and sales of goods under usual and customary terms in the ordinary course of business; (b) Loans and Advances extended by the Borrower or any Subsidiary of the Borrower to contractors or suppliers (excluding contractors or suppliers that are Affiliates of the Borrower) under usual and customary terms in the ordinary course of business and in amount at any one time outstanding not exceeding $1,000,000 (or the equivalent thereof in one or more foreign currencies) in the aggregate; A-38 144 (c) Advances to officers and employees of the Borrower and its Subsidiaries in the ordinary course of business, in amounts at any time outstanding not exceeding $1,000,000 (or the equivalent thereof in one or more foreign currencies) to any one officer or employee and $2,000,000 (or the equivalent thereof in one or more foreign currencies) in the aggregate; provided, however, that for purposes of this Section 7.05(c) only, the outstanding amount of Advances shall not be deemed to include amounts secured by perfected liens on shares of the publicly-traded common stock of the Borrower, to the extent of the market value of such common stock (as determined at least quarterly, based on publicly-available quotations); (d) Loans and Advances by a Subsidiary of the Borrower to the Borrower; (e) Ownership of Shares of Capital Stock of, and capital contributions, loans and Advances to, Corporations that are Wholly Owned Subsidiaries of the Borrower (other than a Broker-Dealer); (f) (i) Ownership of Shares of Capital Stock of a Corporation that is a Wholly Owned Subsidiary of the Borrower that is a Broker-Dealer, as owned on the Closing Date, and (ii) capital contributions by the Borrower or its Subsidiaries from time to time to such Subsidiary, so long as such Subsidiary does not at the time of such capital contribution, or immediately thereafter and after giving effect thereto, have net capital (calculated in accordance with regulatory standards) in excess of 150% of the minimum capital required by Law; (g) (i) Ownership of general partnership interests and other equity interests in the Worldscope Entities representing an 80% or greater interest in the capital, profits and losses of each of the Worldscope Entities, as owned on the Closing Date, and (ii) capital contributions to and acquisition of additional equity interests in the Worldscope Entities from time to time after the Closing Date, and loans and Advances to the Worldscope Entities from time to time; (h) Acquisition and ownership of Shares of Capital Stock of Corporations that are Subsidiaries of the Borrower other than Wholly Owned Subsidiaries of the Borrower, and capital contributions, loans and Advances to Subsidiaries of the Borrower other than Wholly Owned Subsidiaries of the Borrower, provided, that the aggregate amount of all such acquisitions and capital contributions made under this Section 7.05(h) after the Closing Date, plus the aggregate outstanding principal amount of all such loans and Advances made under this Section 7.05(h), shall not at any time exceed $10,000,000; (i) Acquisition and ownership by the Borrower or its Subsidiaries of equity interests in Primark Economics representing a 20% or greater interest in the capital, profits and losses of Primark Economics, and capital contributions, convertible debt and demand loans by the Borrower or its Subsidiaries to Primark Economics from time to time; provided, that (i) the sum of the aggregate amount of all consideration paid for such equity interests and convertible debt plus the aggregate amount of all such capital contributions (in each case whether before or after the Closing Date), plus the aggregate outstanding principal amount of all such demand loans, shall not at any time exceed $5,000,000, and (ii) no such acquisitions, capital contributions or loans may be made unless the Borrower continues to own (directly or indirectly) at least a 20% interest (and, assuming full conversion of convertible loans due to the Borrower or its Subsidiaries, a 51% or greater interest) in the capital, profits and losses of Primark Economics; A-39 145 (j) Partnerships and joint ventures of which all partners, participants and other Persons having ownership interests therein are Wholly Owned Subsidiaries of the Borrower; (k) Other loans, Advances and investments, not to exceed $3,000,000 in the aggregate; and (l) Cash Equivalent Investments. 7.06. DIVIDENDS AND RELATED DISTRIBUTIONS. The Borrower shall not, and shall not permit any Subsidiary to, declare or make any Stock Payment, or agree, become or remain liable (contingently or otherwise) to do any of the foregoing, except as follows: (a) The Borrower may from time to time repurchase for cash shares of its common stock of a series publicly traded, subject to the following conditions: (i) Repurchases under this Section 7.06(a) shall not exceed $25,000,000 from and after the Closing Date; (ii) No Event of Default or Potential Default shall exist on the date of such repurchase, or immediately thereafter and after giving effect to such repurchase; (iii) The Borrower would have been in compliance with Sections 7.01(a) and 7.01(c) on the last day of the fiscal quarter ending most recently before such repurchase, after giving effect on a pro forma basis to such repurchase and to any incurrence of Indebtedness after such day, as if such repurchase and incurrence had occurred on such day; and (iv) The Agent shall receive, with a copy for each Lender, not later than the Business Day after the date such repurchase is made, a certificate signed by a Responsible Officer of the Borrower, dated such repurchase date, describing such dividend, certifying that such repurchase is in compliance with the provisions of this Section 7.06(a), and including a statement in reasonable detail of the information and calculations necessary to establish compliance with this Section 7.06(a); (b) A Subsidiary of the Borrower may declare and pay dividends or other distributions with respect to its Shares of Capital Stock, provided, that such dividend or other distribution is made on a pro rata basis, consistent with the ownership interests in such Shares of Capital Stock, to the owners of such shares; and (c) The Borrower may make Stock Payments if such Stock Payment is paid solely in Shares of Capital Stock (or warrants, options or rights therefor) of the Borrower. The Borrower shall not declare any dividend payable later than 60 days after declaration, and the Borrower shall not permit any Subsidiary to declare any dividend payable later than 15 days after declaration. 7.07. SALE-LEASEBACKS. The Borrower shall not, and shall not permit any Subsidiary to, at any time enter into or permit to remain in effect any transaction to which the Borrower or such A-40 146 Subsidiary is a party involving the sale, transfer or other disposition by the Borrower or any Subsidiary of any property (now owned or hereafter acquired), with a view directly or indirectly to the leasing back of any part of the same property or any other property used for the same or a similar purpose or purposes, or agree, become or remain liable (contingently or otherwise) to do any of the foregoing, except for transactions existing on the date hereof and listed in Schedule 7.07 hereof (but not extensions, renewals or refinancings thereof). 7.08. MERGERS, ETC. The Borrower shall not, and shall not permit any Subsidiary of the Borrower to, directly or indirectly, (w) merge with or into or consolidate with any other Person, or (x) liquidate, Wind-Up, dissolve or divide, (y) acquire all or any substantial portion of the properties of any going concern or going line of business (whether or not constituting a distinct legal entity), or (z) acquire all or any substantial portion of the properties of any other Person, or all or any substantial portion of the Shares of Capital Stock of any other Person which is organized as a Corporation, or all or any substantial portion of any equity interest in any other Person which is not organized as a Corporation, or agree, become or remain liable (contingently or otherwise) to do any of the foregoing, except for the following (referred to herein as "Permitted Mergers"): (a) A Subsidiary of the Borrower may merge with or into or consolidate with, or acquire all or any substantial portion of the properties of, or liquidate or dissolve into, any other Subsidiary of the Borrower, if the acquiring, surviving or new Corporation shall be a Wholly Owned Subsidiary of the Borrower; and (b) The Borrower, or a Subsidiary of the Borrower, may make acquisitions of the types referred to in the foregoing clauses (y) and (z) of properties of Persons other than a Subsidiary of the Borrower, consistent with the other provisions of this Agreement and the other Loan Documents, provided that the aggregate Adjusted Acquisition Consideration in connection with all such acquisitions made after the Closing Date (and specifically excluding the acquisition of WEFA, if made on or before the Closing Date) shall not exceed the sum of $75,000,000 plus the amount, if any, of aggregate cash proceeds (net of underwriting discounts, fees and other transaction costs) received by the Borrower after the Closing Date from issuance of Shares of Capital Stock of the Borrower (or options or warrants therefor). 7.09. DISPOSITIONS OF PROPERTIES. The Borrower shall not, and shall not permit any Subsidiary to, sell, convey, assign, lease, transfer, abandon or otherwise dispose of, voluntarily or involuntarily, directly or indirectly, any of its properties, now existing or hereafter acquired, or agree, become or remain liable (contingently or otherwise) to do any of the foregoing, except: (a) Sales of inventory, licenses (as licensor) of software or other intellectual property, all in the ordinary course of business; (b) Disposition of equipment and other operating assets which are obsolete or no longer useful in the business of the Borrower or such Subsidiary, as the case may be; (c) Lease or sublease of unoccupied office space; (d) Dispositions in Permitted Mergers, and other dispositions between Wholly Owned Subsidiaries of the Borrower; A-41 147 (e) Disposition outside the ordinary course of business of all (but not less than all) of the Shares of Capital Stock of TIMCO, or substantially all the assets of TIMCO (but not less than substantially all of such assets), subject to the following conditions: (i) any such disposition of property is for not less than the Fair Market Value of the property disposed of (as determined in good faith by the Board of Directors of the transferor, whose determination shall be evidenced by a written resolution of such Board), and the consideration received by the Borrower or the relevant Subsidiary in respect of such disposition consists entirely of cash or Cash Equivalent Investments; and (ii) in the case of disposition of Shares of Capital Stock of, or assets of, TIMCO, TIMCO shall be conducting substantially the business conducted by it on the Closing Date, and shall not be conducting any different or additional business or have any material assets in addition to those it had on the Closing Date; and (f) Other dispositions of property from time to time for not less than its Fair Market Value, provided that dispositions under this Section 7.09(f) shall not exceed $5,000,000 in the aggregate in any fiscal year. Without limitation of the foregoing, it is understood that the following are dispositions of property subject to this Section 7.09: any disposition of accounts, chattel paper or general intangibles, with or without recourse; any disposition of any leasehold interest; and any disposition of any Shares of Capital Stock in or Indebtedness of any Subsidiary. The Borrower shall not, and shall not permit any Subsidiary to sell, convey, assign, transfer or otherwise dispose of, voluntarily or involuntarily, any of its accounts, chattel paper, general intangibles or other financial assets with or without recourse, in any factoring, structured financing, or other transaction having the practical effect, directly or indirectly, of a financing, whether or not such transaction is in the form of a "true sale" of such financial assets by the Borrower or such Subsidiary. 7.10. DEALINGS WITH AFFILIATES. The Borrower shall not, and shall not permit any Subsidiary of the Borrower to, enter into or carry out any transaction with (including, without limitation, purchase or lease property or services from, sell or lease property or services to, loan or advance to, or enter into, permit to remain in existence or amend any contract, agreement or arrangement with) any Affiliate of the Borrower, directly or indirectly, or agree, become or remain liable (contingently or otherwise) to do any of the foregoing, except: (a) Transactions between (i) on the one hand, any Affiliate of the Borrower, and (ii) on the other hand, the Borrower or any of its Subsidiaries, in good faith and on fair and reasonable terms; and (b) Compensation of directors, officers, employees and consultants of the Borrower and its Subsidiaries for services rendered in such capacity in good faith and on fair and reasonable terms, which terms (in the case of compensation under employment contracts entered into after the Closing Date will be approved by a majority of the board of directors of such Borrower or Subsidiary (including a majority of the directors having no direct or indirect interest in such transaction). 7.11. LIMITATIONS ON MODIFICATION OF CERTAIN AGREEMENTS AND INSTRUMENTS. A-42 148 (a) SENIOR NOTES. The Borrower shall not amend, modify or supplement the terms or provisions contained in, or applicable to, the Senior Notes, the Senior Note Indenture, or any agreement or instrument evidencing or applicable to any of the foregoing. (b) REVOLVING CREDIT AGREEMENT. The Borrower shall not amend, modify, supplement, renew or refinance the Revolving Credit Agreement or its obligations thereunder, in any way that would change its nature as a revolving credit facility, increase or reduce the principal amount available to be borrowed thereunder, or cause the Revolving Credit Maturity Date or the final date on which loans may be borrowed thereunder by the Borrower to occur sooner than the relevant dates applicable under the Revolving Credit Agreement as constituted on the Closing Date. In the event that the Agent hereunder is not also the "Agent" under the Revolving Credit Agreement, the Borrower shall promptly (and in any event within five days) give the Agent, with a copy for each Lender, a copy of any amendment, modification or supplement to, or renewal or refinancing of, the Revolving Credit Agreement. (c) [Reserved] (d) NOTE BACKUP AGREEMENT. The Borrower shall not amend, modify or supplement the Note Backup Agreement (as constituted on the Closing Date) or its obligations thereunder, in any way that would (i) increase the principal amount thereof (including the aggregate stated amount of letters of credit issued thereunder), or require payments on account of principal (including reimbursement of draws under letters of credit issued thereunder) to be made earlier or in greater amount than is required under the terms of the Note Backup Agreement as constituted on the Closing Date, or (ii) increase the rate or shorten the date for payment of interest thereon. In the event that the Agent hereunder is not also the "Agent" under the Note Backup Agreement, the Borrower shall promptly (and in any event within five days) give the Agent, with a copy for each Lender, a copy of any amendment, modification or supplement to the Note Backup Agreement. (e) [Reserved] 7.12. LIMITATION ON PAYMENTS ON CERTAIN OBLIGATIONS. The Borrower shall not, and shall not permit any Subsidiary to, directly or indirectly, pay, prepay, purchase, redeem, retire, defease or acquire, or otherwise make any payment (on account of principal, interest, premium or otherwise) of, any obligation under or evidenced by the Senior Notes, except that the Borrower may (x) pay principal and interest on the Senior Notes as and when expressly required to do so by the mandatory terms of the Senior Notes, and (y) purchase Senior Notes as and when expressly required to do so by the mandatory terms of Sections 4.12 and 4.13 of the Senior Note Indenture (it being understood that the foregoing may nevertheless give rise to an Event of Default). 7.13. LIMITATION ON OTHER RESTRICTIONS ON LIENS, DIVIDEND RESTRICTIONS ON SUBSIDIARIES, ETC. The Borrower shall not, and shall not permit any Subsidiary to, (x) enter into, become or remain subject to any agreement or instrument to which the Borrower or such Subsidiary is a party or by which any of them or any of their respective properties (now owned or hereafter acquired) may be subject or bound that would (i) prohibit the grant of any Lien upon any of its properties (now owned or hereafter acquired), or (ii) restrict or prohibit the transfer or disposition of any of its properties (now owned or hereafter acquired), or require it to dispose of or apply the proceeds of any such disposition in a specified manner, or A-43 149 (y) be or become subject to any restriction of any nature (whether arising by operation of Law, by agreement, by its certificate or articles of incorporation, by-laws or other constituent documents, or otherwise) on the right of the Borrower or such Subsidiary from time to time (i) in the case of a Subsidiary, to declare and pay Stock Payments with respect to Shares of Capital Stock owned by the Borrower or any Subsidiary of the Borrower, (ii) in the case of the Borrower or any Subsidiary of the Borrower, to pay any obligations from time to time owed to the Borrower or any Subsidiary of the Borrower, or (iii) in the case of the Borrower or any Subsidiary of the Borrower, make loans or advances to the Borrower or any Subsidiary of the Borrower, except: (a) the Credit Facilities; (b) the Senior Notes and the Senior Note Indenture; (c) with respect to the foregoing clause (x), non-assignment provisions of any executory contract or software or programs or of any lease by the Borrower or such Subsidiary as lessee; (d) with respect to the foregoing clause (x), restrictions on property subject to a Permitted Lien in favor of the holder of such Permitted Lien; (e) restrictions with respect to TIMCO imposed pursuant to an agreement entered into for sale or disposition (which sale or disposition is not in violation of this Agreement or any other Loan Document) of all or substantially all of the Shares of Capital Stock or assets of such Subsidiary; provided, that such restriction, by its terms, terminates on the earlier of the termination of such agreement or the consummation of such agreement, and is agreed to in good faith; and (f) in the case of the foregoing clause (y), legal restrictions of general applicability under the corporation or similar law under which the Borrower or such Subsidiary is incorporated, fraudulent conveyance or similar laws or general applicability for the benefit of creditors generally, and other legal restrictions of general applicability to similarly situated business corporations; and (g) in the case of subclause (ii) of the foregoing clause (x), restrictions on transfer of property arising in the ordinary course of business; provided, that such restrictions do not directly or indirectly secure any obligation of the Borrower or such Subsidiary to pay money or to perform an obligation, and do not in the aggregate materially detract from the value of a property or asset to, or materially impair its use in the business of, the Borrower or such Subsidiary. 7.14. LIMITATION ON OTHER RESTRICTIONS ON AMENDMENT OF THE LOAN DOCUMENTS, ETC. The Borrower shall not, and shall not permit any Subsidiary of the Borrower to, enter into, become or remain subject to any agreement or instrument to which the Borrower or such Subsidiary is a party or by which any of them or any of their respective properties (now owned or hereafter acquired) may be subject or bound that would prohibit or require the consent of any Person to any amendment, A-44 150 modification or supplement to any of the Loan Documents, except: (a) the Loan Documents, and (b) provisions in each of the other Credit Facilities no more restrictive than those in such other Credit Facility, respectively, as constituted on the Closing Date. 7.15. LIMITATION ON CERTAIN BENEFIT LIABILITIES. The Borrower shall not, and shall not permit any Subsidiary of the Borrower or any Controlled Group Member to, become subject to Primark Group Benefits Exposures in excess of $20,000,000 in the aggregate for all such Persons. As used herein, the term "Primark Group Benefits Exposures" shall mean the sum of the maximum potential liabilities (direct, contingent or other) of the Borrower and its Subsidiaries and the Controlled Group Members in connection with the following: (a) withdrawal liability (within the meaning of Section 4201 of ERISA) from any Multiemployer Plan, whether or not such liability has yet been triggered as a result of a withdrawal; (b) contributions due and unpaid with respect to a Multiemployer Plan; (c) the "amount of unfunded benefit liabilities" (within the meaning of Section 4001(a)(18) of ERISA) under any Plan, whether or not such liability has yet been triggered as a result of a termination of such Plan; (d) excise taxes assessed in connection with all of the above or otherwise in connection with any Plan; (e) Postretirement Benefit Obligations of the Borrower, any Subsidiary of the Borrower or any Controlled Group Member; and (f) any other liability (contingent or other) in connection with a Plan or Multiemployer Plan which represent a material risk that it may result in a Lien attaching to assets of the Borrower or any Subsidiary of the Borrower, without regard to any minimum amount required by Law to cause such Lien to attach. 7.16. FISCAL YEAR. The Borrower shall maintain a fiscal year beginning on each January 1 and ending on the following December 31, divided into fiscal quarters ending on the last day of each March, June, September and December. ARTICLE VIII DEFAULTS 8.01. EVENTS OF DEFAULT. An "Event of Default" shall mean the occurrence or existence of one or more of the following events or conditions (for any reason, whether voluntary, involuntary or effected or required by Law): (a) The Borrower shall fail to pay when due principal of any Loan. (b) The Borrower shall fail to pay when due interest on any Loan, any fees, indemnity or expenses, or any other amount due hereunder or under any other Loan Document, and such failure shall have continued for a period of five Business Days. (c) Any representation or warranty made or deemed made by the Borrower in or pursuant to or in connection with any Loan Document or any transaction contemplated hereby or thereby, or any statement made by the Borrower or any Subsidiary of the Borrower or any in any financial statement, certificate, report, exhibit or document furnished by the Borrower or any Subsidiary of the Borrower to the Collateral Agent or any Lender Party pursuant to or in connection with any Loan Document or any transaction contemplated hereby or thereby, shall prove to have been false or misleading in any material respect as of the time when made or deemed made (including by omission of material information necessary to make such representation, warranty or statement not misleading). A-45 151 (d) The Borrower shall default in the performance or observance of any covenant contained in Article VII hereof or any of the covenants contained in Sections 2.07, 6.01(j)(i), 6.11, 6.12, 6.14, 6.15 or 6.16 hereof, or in Sections 4.02 or 4.06 of the Borrower Pledge Agreement. (e) The Borrower shall default in the performance or observance of any other covenant, agreement or duty under this Agreement or any other Loan Document and (i) in the case of a default under Section 6.01 hereof (other than as referred to in Sections 6.01(j)(i) hereof) such default shall have continued for a period of 10 days and (ii) in the case of any other default such default shall have continued for a period of 30 days. (f) (i) The Borrower or any Subsidiary of the Borrower shall default in any payment of any amount in respect of any Cross-Default Triggering Obligation beyond any period of grace with respect thereto or, if any amount payable in respect of any Cross-Default Triggering Obligation is payable on demand, shall fail to pay such amount when demanded, or (ii) the Borrower or any Subsidiary of the Borrower shall default in the observance of any covenant, term or condition of any agreement or instrument by which any Cross-Default Triggering Obligation is created, secured or evidenced, if the effect of such default referred to in this clause (ii) is to cause, or to permit the holder or holders of any Cross-Default Triggering Obligation (or a trustee or agent on behalf of such holder or holders) to cause, all or part of such Cross- Default Triggering Obligation to become due before its otherwise stated maturity (by way of acceleration, mandatory prepayment or otherwise), or, in the case of an interest rate or currency swap, cap, collar, floor, future, forward or similar transaction, to terminate before its otherwise scheduled termination. As used in this Agreement, "Cross-Default Triggering Obligation" shall mean (A) any obligation under or in connection with any of the other Credit Facilities, any Swap Agreement, the Senior Notes or the Senior Note Indenture, (B) any obligation, as principal or as guarantor or other surety, in respect of the TIMCO Bond Order, the TIMCO Lease, any reimbursement agreement relating to the TIMCO Bonds Letter of Credit, or any other obligation referred to in Section 7.03(j) hereof, (C) any obligation (or set of related obligations), as principal or as guarantor or other surety, in respect of Indebtedness in excess of $5,000,000 (or the equivalent thereof in one or more foreign currencies) in aggregate amount, and (D) any obligation (or set of related obligations, including all obligations under a master agreement), as principal or as guarantor or other surety, in respect of any interest rate or currency swap, cap, collar, floor, future, forward or similar transactions relating to a principal or notional principal amount in excess of $5,000,000 (or the equivalent thereof in one or more foreign currencies) in aggregate amount. (g) One or more judgments for the payment of money shall have been entered against the Borrower or any Subsidiary of the Borrower, which judgment or judgments exceed A-46 152 $2,000,000 in the aggregate, and such judgment or judgments shall have remained undischarged and unstayed for a period of 30 consecutive days. (h) Any Governmental Action now or hereafter made by or with any Governmental Authority in connection with any Loan Document is not obtained or shall have ceased to be in full force and effect or shall have been modified or amended or shall have been held to be illegal or invalid, and such event or condition has, or would be likely to have, a Material Adverse Effect. (i) Any Shared Security Document shall cease to be in full force and effect; or any Lien created or purported to be created in any Shared Collateral pursuant to any Shared Security Document shall fail to be a valid, enforceable and perfected Lien in favor of the Collateral Agent for the benefit of the Secured Parties securing the Obligations, prior to all other Liens except Permitted Liens. (j) Any Loan Document or term or provision thereof shall cease to be in full force and effect (except in accordance with the express terms of such Loan Document), or the Borrower or any other party to any Loan Document shall, or shall purport to, terminate (except in accordance with the terms of such Loan Document), repudiate, declare voidable or void or otherwise contest, any Loan Document or term or provision thereof or any obligation or liability of the Borrower or such other party thereunder. (k) Any one or more Pension-Related Events referred to in subsection (b) or (e) of the definition of "Pension-Related Event" shall have occurred; or any one or more other Pension-Related Events shall have occurred which, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect. (l) The Borrower shall make, or shall be required by the terms of the Senior Note Indenture to make or to offer to make, any purchase of Senior Notes under Sections 4.12 or 4.13 of the Senior Note Indenture; or the Borrower or any of its Subsidiaries otherwise shall make or offer to make any payment on account of principal of, or any purchase, redemption, retirement, defeasance or acquisition of, any of the Senior Notes (except for principal payment in accordance with the terms thereof at the scheduled maturity thereof). (m) Any Person or group (as such term is used in Sections 13 and 14 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the rules and regulations thereunder) shall have become the direct or indirect beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act) of 35% or more of any class of voting securities of the Borrower; or any Person shall have been elected or shall have become a director of the Borrower who was not nominated and recommended for such position or elected to such position by a majority of the then-incumbent Board of Directors of the Borrower; or a "Change in Control" (as defined in the Senior Note Indenture as constituted on the Closing Date shall have occurred (without regard to any subsequent amendment, modification or supplement to, or termination or expiration of, the Senior Note Indenture). (n) A Control-Related Event shall have occurred, and the Required Lenders shall have determined in good faith that such Control-Related Event has or would be likely to have a Material Adverse Effect (by reason of suspension, withdrawal or impairment of any security A-47 153 clearance of the Borrower or any of its Subsidiaries, or impairment of the business relationship between the Borrower and its Subsidiaries, on the one hand, and the U.S. Government and its agencies and departments, on the other hand). "Control-Related Event" shall mean that any Person or group (as such term is used in Sections 13 and 14 of the Exchange Act, and the rules and regulations thereunder) shall have become the direct or indirect beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act) of 5% or more of any class of voting securities of the Borrower (except for any such Person or group existing on the Closing Date, to the extent of the voting securities then owned by them). (o) A proceeding shall have been instituted in respect of the Borrower or any Significant Subsidiary of the Borrower (and for this purpose, each Subsidiary of the Borrower which is subject to an event or condition described in this Section 8.01(o) or in Section 8.01(p) hereof shall be deemed a Significant Subsidiary if, collectively, together with their respective Subsidiaries, treated as a single entity, they would constitute a Significant Subsidiary) (i) seeking to have an order for relief entered in respect of such Person, or seeking a declaration or entailing a finding that such Person is insolvent or a similar declaration or finding, or seeking dissolution, Winding-up, administration, charter revocation or forfeiture, liquidation, reorganization, arrangement, adjustment, composition or other similar relief with respect to such Person, its assets or its debts under any Law relating to bankruptcy, insolvency, relief of debtors or protection of creditors, termination of legal entities or any other similar Law now or hereafter in effect, or (ii) seeking appointment of a receiver, administrative receiver, trustee, liquidator, assignee, sequestrator or other custodian for such Person or for all or any substantial part of its property and such proceeding shall result in the entry, making or grant of any such order for relief, declaration, finding, relief or appointment, or such proceeding shall remain undismissed and unstayed for a period of 30 consecutive days. (p) The Borrower or any Significant Subsidiary of the Borrower (and for this purpose, each Subsidiary of the Borrower which is subject to an event or condition described in Section 8.01(o) hereof or in this Section 8.01(p) shall be deemed a Significant Subsidiary if, collectively, together with their respective Subsidiaries, treated as a single entity, they would constitute a Significant Subsidiary) shall not be Solvent; shall fail to pay, become unable to pay, or state that it is or will be unable to pay, its debts as they become due; shall voluntarily suspend transaction of its business; shall make a general assignment for the benefit of creditors; shall institute (or fail to controvert in a timely and appropriate manner) a proceeding described in Section 8.01(o)(i) hereof, or (whether or not any such proceeding has been instituted) shall consent to or acquiesce in any such order for relief, declaration, finding or relief described therein; shall institute (or fail to controvert in a timely and appropriate manner) a proceeding described in Section 8.01(o)(ii) hereof, or (whether or not any such proceeding has been instituted) shall consent to or acquiesce in any such appointment or to the taking of possession by any such custodian of all or any substantial part of its or his property; shall dissolve, Wind-up, go into administration or revoke or forfeit its articles of incorporation (or other constituent documents); or shall take any action in furtherance of any of the foregoing. A-48 154 8.02. CONSEQUENCES OF AN EVENT OF DEFAULT. (a) GENERAL. If an Event of Default specified in subsections (a) through (n) of Section 8.01 hereof shall have occurred and be continuing or exist, or if an Event of Default specified in subsections (o) or (p) of Section 8.01 hereof shall have occurred and be continuing or exist with respect to a Person other than the Borrower, then, in addition to all other rights and remedies which the Collateral Agent or any Lender Party may have hereunder or under any other Loan Document, at law, in equity or otherwise, the Agent may, and upon the written request of the Required Lenders shall, by notice to the Borrower, declare the unpaid principal amount of the Loans, interest accrued thereon and all other Loan Obligations to be immediately due and payable without presentment, demand, protest or further notice of any kind, all of which are hereby waived, and an action therefor shall immediately accrue. (b) BANKRUPTCY AND CERTAIN OTHER EVENTS. If an Event of Default specified in subsection (o) or (p) of Section 8.01 hereof shall have occurred and be continuing or exist with respect to the Borrower, then, in addition to all other rights and remedies which the Collateral Agent or any Lender Party may have hereunder or under any other Loan Document, at law, in equity or otherwise, the unpaid principal amount of the Loans, interest accrued thereon and all other Loan Obligations shall become immediately due and payable without presentment, demand, protest or notice of any kind, all of which are hereby waived, and an action therefor shall immediately accrue. 8.03. APPLICATION OF PROCEEDS. After the occurrence of an Event of Default and acceleration of the Loans, any distributions made on account of Loan Obligations under the Collateral Agency Agreement and all other payments received on account of Loan Obligations shall be applied by the Agent to payment of the Loan Obligations in the following order: First, to payment of that portion of the Loan Obligations constituting fees, indemnities and other amounts due to the Agent in its capacity as such; Second, to payment of that portion of the Loan Obligations constituting accrued and unpaid interest on Loans, ratably amongst the Lenders in proportion to the respective amounts described in this clause "Second" due to them; Third, to payment of that portion of the Loan Obligations constituting unpaid principal of the Loans, ratably amongst the Lenders in proportion to the respective amounts described in this clause "Third" due to them; Fourth, to payment of all other Loan Obligations, ratably amongst the Lender Parties in proportion to the respective amounts described in this clause "Fourth" due to them; and Finally, the balance, if any, after all of the Loan Obligations have been indefeasibly paid in full in cash, and all Commitments have terminated, to the Borrower or as otherwise required by law. ARTICLE IX THE AGENT A-49 155 9.01. APPOINTMENT. Each Lender Party hereby irrevocably appoints Mellon Bank, N.A. to act as Agent for the Lender Parties under this Agreement and the other Loan Documents. Each Lender Party hereby irrevocably authorizes the Agent to take such action on behalf of the Lender Parties under the provisions of this Agreement and the other Loan Documents, and to exercise such powers and to perform such duties, as are expressly delegated to or required of the Agent by the terms hereof or thereof, together with such powers as are reasonably incidental thereto. Mellon Bank, N.A. hereby agrees to act as Agent on behalf of the Lender Parties on the terms and conditions set forth in this Agreement and the other Loan Documents, subject to its right to resign as provided herein. Each Lender Party hereby irrevocably authorizes the Agent to execute and deliver each of the Loan Documents and to accept delivery of such of the other Loan Documents as may not require execution by the Agent. Without limiting the generality of the foregoing, each Lender Party hereby irrevocably authorizes the Agent to execute and deliver the Collateral Agency Agreement on behalf of such Lender Party. Each Lender Party hereby agrees that the rights and remedies granted to the Agent under the Loan Documents shall be exercised exclusively by the Agent, and that no Lender Party shall have any right individually to exercise any such right or remedy, except to the extent, if any, expressly provided herein or therein. 9.02. GENERAL NATURE OF AGENT'S DUTIES. (a) NO IMPLIED DUTIES. The Agent shall have no duties or responsibilities except those expressly set forth in this Agreement and the other Loan Documents, and no implied duties or responsibilities on the part of the Agent shall be read into this Agreement or any Loan Document or shall otherwise exist. (b) NOT A FIDUCIARY. The duties and responsibilities of the Agent under this Agreement and the other Loan Documents shall be mechanical and administrative in nature, and the Agent shall not have a fiduciary relationship in respect of any Lender Party. (c) AGENT OF LENDER PARTIES. The Agent is and shall be solely the agent of the Lender Parties. The Agent does not assume, and shall not at any time be deemed to have, any relationship of agency or trust with or for, or any other duty or responsibility to, the Borrower or any Person other than the Lender Parties. The provisions of this Article IX are for the benefit of the Lender Parties (and the other Persons named in Section 9.07 hereof), and the Borrower shall not have any rights under any of the provisions of this Article IX. (d) NO OBLIGATION TO TAKE ACTION. The Agent shall be under no obligation to take any action hereunder or under any other Loan Document if the Agent believes in good faith that taking such action may conflict with any Law or any provision of this Agreement or any other Loan Document, or may require the Agent to qualify to do business in any jurisdiction where it is not then so qualified. 9.03. EXERCISE OF POWERS. Subject to the other provisions of this Agreement and the other Loan Documents, the Agent shall take any action of the type specified in this Agreement or any other Loan Document as being within the Agent's rights, powers or discretion in accordance with directions from the Required Lenders (or, to the extent this Agreement or such Loan Document expressly requires the direction or consent of some other Person or set of Persons, then instead in accordance with the directions of such other Person or set of Persons). In the absence of such directions, the Agent shall have the authority (but under no circumstances shall be obligated), in its sole discretion, to take any such action, except to the extent this Agreement or such Loan Document expressly requires A-50 156 the direction or consent of the Required Lenders (or some other Person or set of Persons), in which case the Agent shall not take such action absent such direction or consent. Any action or inaction pursuant to such direction, discretion or consent shall be binding on all the Lender Parties. The Agent shall not have any liability to any Person as a result of (x) the Agent acting or refraining from acting in accordance with the directions of the Required Lenders (or other applicable Person or set of Persons), (y) the Agent refraining from acting in the absence of instructions to act from the Required Lenders (or other applicable Person or set of Persons), whether or not the Agent has discretionary power to take such action, or (z) the Agent taking discretionary action it is authorized to take under this Section (subject, in the case of this clause (z), to the provisions of Section 9.04(a) hereof). 9.04. GENERAL EXCULPATORY PROVISIONS. (a) GENERAL. The Agent shall not be liable for any action taken or omitted to be taken by it under or in connection with this Agreement or any other Loan Document, unless caused by its own gross negligence or willful misconduct. (b) AGENT NOT RESPONSIBLE FOR LOAN DOCUMENTS, ETC. The Agent shall not be responsible for (i) the execution, delivery, effectiveness, enforceability, genuineness, validity or adequacy of this Agreement or any other Loan Document, (ii) any recital, representation, warranty, document, certificate, report or statement in, provided for in, or received under or in connection with, this Agreement or any other Loan Document, (iii) any failure of the Borrower or any Lender to perform any of their respective obligations under this Agreement or any other Loan Document, (iv) the existence, validity, enforceability, perfection, recordation, priority, adequacy or value, now or hereafter, of any Lien or other direct or indirect security afforded or purported to be afforded by any of the Loan Documents or otherwise from time to time, or (v) caring for, protecting, insuring, or paying any taxes, charges or assessments with respect to any collateral. (c) NO DUTY OF INQUIRY. The Agent shall not be under any obligation to ascertain, inquire or give any notice relating to (i) the performance or observance of any of the terms or conditions of this Agreement or any other Loan Document on the part of the Borrower, (ii) the business, operations, condition (financial or otherwise) or prospects of the Borrower or any other Person, or (iii) except to the extent set forth in Section 9.05(f) hereof, the existence of any Event of Default or Potential Default. (d) NOTICES. The Agent shall not be under any obligation, either initially or on a continuing basis, to provide any Lender Party with any notices, reports or information of any nature, whether in its possession presently or hereafter, except for such notices, reports and other information expressly required by this Agreement or any other Loan Document to be furnished by the Agent to such Lender Party. 9.05. ADMINISTRATION BY THE AGENT. (a) RELIANCE ON NOTICES. The Agent may rely upon any notice or other communication of any nature (written or oral, including but not limited to telephone conversations, whether or not such notice or other communication is made in a manner permitted or required by this Agreement or any Loan Document) purportedly made by or on behalf of the proper party or parties, and the Agent shall not have any duty to verify the identity or authority of any Person giving such notice or other communication. A-51 157 (b) CONSULTATION. The Agent may consult with legal counsel (including, without limitation, in-house counsel for the Agent or in-house or other counsel for the Borrower), independent public accountants and any other experts selected by it from time to time, and the Agent shall not be liable for any action taken or omitted to be taken in good faith by it in accordance with the advice of such counsel, accountants or experts. (c) RELIANCE ON CERTIFICATES, ETC. The Agent may conclusively rely upon the truth of the statements and the correctness of the opinions expressed in any certificates or opinions furnished to the Agent in accordance with the requirements of this Agreement or any other Loan Document. Whenever the Agent shall deem it necessary or desirable that a matter be proved or established with respect to the Borrower or any Lender Party, such matter may be established by a certificate of the Borrower or such Lender Party, as the case may be, and the Agent may conclusively rely upon such certificate (unless other evidence with respect to such matter is specifically prescribed in this Agreement or another Loan Document). (d) INDEMNITY. The Agent may fail or refuse to take any action unless it shall be indemnified to its satisfaction from time to time against any and all amounts, liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature which may be imposed on, incurred by or asserted against the Agent by reason of taking or continuing to take any such action. (e) PERFORMANCE THROUGH AGENTS. The Agent may perform any of its duties under this Agreement or any other Loan Document by or through agents or attorneys-in-fact. The Agent shall not be responsible for the negligence or misconduct of any agents or attorneys-in fact selected by it with reasonable care. (f) NOTICE OF DEFAULT. The Agent shall not be deemed to have any knowledge or notice of the occurrence of any Event of Default or Potential Default unless the Agent has received notice from a Lender Party or the Borrower referring to this Agreement, describing such Event of Default or Potential Default, and stating that such notice is a "notice of default." If the Agent receives such a notice, the Agent shall give prompt notice thereof to each Lender. 9.06. LENDERS NOT RELYING ON AGENT OR OTHER LENDERS. Each Lender Party hereby acknowledges as follows: (a) Neither the Agent nor any other Lender Party has made any representations or warranties to it, and no act taken hereafter by the Agent or any other Lender Party shall be deemed to constitute any representation or warranty by the Agent or such other Lender Party to it. (b) It has, independently and without reliance upon the Agent or any other Lender Party, and based upon such documents and information as it has deemed appropriate, made its own credit and legal analysis and decision to enter into this Agreement and the other Loan Documents. (c) It will, independently and without reliance upon the Agent or any other Lender Party, and based upon such documents and information as it shall deem appropriate at the time, make its own decisions to take or not take action under or in connection with this Agreement and the other Loan Documents. 9.07. INDEMNIFICATION OF AGENT BY LENDERS. Each Lender hereby agrees to reimburse and indemnify the Agent and its directors, officers, employees and agents (to the extent not reimbursed by the Borrower and without limitation of the obligations of the Borrower to do so), Pro Rata, from and against any and all amounts, losses, liabilities, claims, damages, expenses, obligations, penalties, actions, judgments, suits, costs or disbursements of any kind or nature (including, without limitation, the fees and A-52 158 disbursements of counsel for the Agent or such other Person in connection with any investigative, administrative or judicial proceeding commenced or threatened, whether or not the Agent or such other Person shall be designated a party thereto) that may at any time be imposed on, incurred by or asserted against the Agent or such other Person as a result of, or arising out of, or in any way related to or by reason of, this Agreement, any other Loan Document, any transaction from time to time contemplated hereby or thereby, or any transaction financed in whole or in part or directly or indirectly with the proceeds of any Loan; provided, that no Lender shall be liable for any portion of such amounts, losses, liabilities, claims, damages, expenses, obligations, penalties, actions, judgments, suits, costs or disbursements resulting from the gross negligence or willful misconduct of the Agent or such other Person, as finally determined by a court of competent jurisdiction. 9.08. AGENT IN ITS INDIVIDUAL CAPACITY. With respect to its Commitments and the Loan Obligations owing to it, the Agent shall have the same rights and powers under this Agreement and each other Loan Document as any other Lender and may exercise the same as though it were not the Agent, and the terms "Lender," "holders of Notes" and like terms shall include the Agent in its individual capacity as such. The Agent and its affiliates may, without liability to account, make loans to, accept deposits from, acquire debt or equity interests in, enter into interest rate or currency hedging transactions with, act as trustee under indentures of, and engage in any other business or transaction with, the Borrower or any stockholder, subsidiary or affiliate of the Borrower, as though the Agent were not the Agent hereunder. 9.09. HOLDERS OF NOTES. The Agent may deem and treat the Lender which is payee of a Note as the owner and holder of such Note for all purposes hereof unless and until a Transfer Supplement with respect to the assignment or transfer thereof shall have been filed with the Agent in accordance with Section 10.14 hereof. Any authority, direction or consent of any Person who at the time of giving such authority, direction or consent is shown in the Register as being a Lender shall be conclusive and binding on each present and subsequent holder, transferee or assignee of any Note or Notes payable to such Lender or of any Note or Notes issued in exchange therefor. 9.10. SUCCESSOR AGENT. The Agent may resign at any time by giving 45 days' prior written notice thereof to the Lenders and the Borrower. The Agent may be removed by the Required Lenders at any time by giving 10 days' prior written notice thereof to the Agent, the other Lenders and the Borrower. Upon any such resignation or removal, the Required Lenders shall have the right to appoint a successor Agent. If no successor Agent shall have been so appointed and consented to, and shall have accepted such appointment, within 30 days after such notice of resignation or removal, then the retiring Agent may (but shall not be required to) appoint a successor Agent. Each successor Agent shall be a commercial bank or trust company organized under the laws of the United States of America or any State thereof and having a combined capital and surplus of at least $500,000,000. Upon the acceptance by a successor Agent of its appointment as Agent hereunder, such successor Agent shall thereupon succeed to and become vested with all the properties, rights, powers, privileges and duties of the former Agent in its capacity as such, without further act, deed or conveyance. Upon the effective date of resignation or removal of a retiring Agent, such Agent shall be discharged from its duties as such under this Agreement and the other Loan Documents, but the provisions of this Agreement shall inure to its benefit as to any actions taken or omitted by it while it was Agent under this Agreement. If and so long as no successor Agent shall have been appointed, then any notice or other communication required or permitted to be given by the Agent shall be sufficiently given if given by the Required Lenders, all notices or other communications required or permitted to be given to the Agent shall be given to each A-53 159 Lender, and all payments to be made to the Agent shall be made directly to the Borrower or Lender Party for whose account such payment is made. 9.11. CALCULATIONS. The Agent shall not be liable for any calculation, apportionment or distribution of payments made by it in good faith. If such calculation, apportionment or distribution is subsequently determined to have been made in error, the sole recourse of any Lender Party to whom payment was due but not made shall be to recover from the other Lender Parties any payment in excess of the amount to which they are determined to be entitled or, if the amount due was not paid by the Borrower, to recover such amount from the Borrower. 9.12. AGENT'S FEE. The Borrower agrees to pay to the Agent, for its individual account, a nonrefundable Agent's fee of $50,000 per annum, payable for the period from and including the Closing Date to but not including the date on which all Loan Obligations (other than Contingent Indemnification Obligations) have been indefeasibly paid in full. Payments of such Agent's fee shall be made (a) on the Closing Date, for the period from and including such date to but not including June 29, 1997 (provided, that to the extent that the Borrower has paid the Agent's fee allocable to such period under the prior "Term Loan Agreement" referred to in Section 5.01(f), such payment shall be credited against the Borrower's obligation under this clause (a)), and (b) thereafter, in advance on each June 29 and December 29 for the period from and including such payment date to but not including the next such payment date. ARTICLE X MISCELLANEOUS 10.01. HOLIDAYS. Except as otherwise expressly provided herein or therein, whenever any payment or action to be made or taken hereunder or under any other Loan Document shall be stated to be due on a day which is not a Business Day, such payment or action shall be made or taken on the next following Business Day and such extension of time shall be included in computing interest or fees, if any, in connection with such payment or action. 10.02. RECORDS. The unpaid principal amount of the Loans owing to each Lender, the unpaid interest accrued thereon, the interest rate or rates applicable to such unpaid principal amount, and the duration of such applicability, shall at all times be ascertained from the records of the Agent, which shall be conclusive absent manifest error. 10.03. AMENDMENTS AND WAIVERS. The Agent and the Borrower may from time to time amend, modify or supplement the provisions of this Agreement or any other Loan Document (other than the Shared Security Documents) for the purpose of amending, adding to, or waiving any provisions, releasing any collateral, or changing in any manner the rights and duties of the Borrower or any Lender Party. Any such amendment, modification or supplement made by the Borrower and the Agent in accordance with the provisions of this Section 10.03 shall be binding upon the Borrower and each Lender Party. The Agent shall enter into such amendments, modifications or supplements from time to time as directed by the Required Lenders, and only as so directed, provided, that no such amendment, modification or supplement may be made which will: A-54 160 (a) Increase the Term Loan Committed Amount of any Lender over the amount thereof then in effect without the written consent of each Lender affected thereby, or extend the Term Loan Maturity Date without the written consent of each Lender; (b) Reduce the principal amount of or extend the time for any scheduled payment of principal of any Loan without the written consent of each Lender affected thereby, or reduce the rate of interest or extend the time for payment of interest borne by any Loan (other than as a result of waiving the applicability of any increase in interest rates applicable to overdue amounts), without the written consent of each Lender affected thereby; (c) Change the definition of "Required Lenders" or amend this Section 10.03, without the written consent of each Lender; (d) Amend or waive any of the provisions of Article IX, or impose additional duties upon the Agent, or otherwise affect the rights, interests or obligations of the Agent, without the written consent of the Agent; (e) Release all or a major portion of the Shared Collateral (other than in accordance with the provisions of the Loan Documents), or subordinate the priority of the Liens in favor of the Collateral Agent to Liens in favor of another Person with respect to all or a major portion of the Shared Collateral (other than in accordance with the provisions of the Loan Documents), without the written consent of each Lender; or (f) Alter the priority of distributions set forth in Section 8.03 hereof, without the written consent of each Lender affected thereby; and provided further, that Transfer Supplements may be entered into in the manner provided in Section 10.14 hereof. Any such amendment, modification or supplement must be in writing, manually signed by or on behalf of the Borrower and the Lender Party which is party thereto, and shall be effective only to the extent set forth in such writing. Any Event of Default or Potential Default waived or consented to in any such amendment, modification or supplement shall be deemed to be cured and not continuing to the extent and for the period set forth in such waiver or consent, but no such waiver or consent shall extend to any other or subsequent Event of Default or Potential Default or impair any right consequent thereto. Shared Security Documents may be amended, modified and supplemented from time to time in accordance with the terms thereof and of the Collateral Agency Agreement, and any such amendment, modification or supplement so made shall be binding upon the Borrower and each Lender Party (and to the extent that any consent, direction or other action is required by the Agent in connection therewith, the provisions of the third sentence of this Section 10.03 shall apply to the Agent in giving such consent or direction or taking such action). 10.04. NO IMPLIED WAIVER; CUMULATIVE REMEDIES. No course of dealing and no delay or failure of the Collateral Agent or any Lender Party in exercising any right, power or privilege under this Agreement or any other Loan Document shall affect any other or future exercise thereof or exercise of any other right, power or privilege; nor shall any single or partial exercise of any such right, power or privilege or any abandonment or discontinuance of steps to enforce such a right, power or privilege preclude any further exercise thereof or of any other right, power or privilege. The rights and remedies of the Collateral Agent and the Lender Parties under this Agreement and any other Loan Document are A-55 161 cumulative and not exclusive of any rights or remedies which any of them would otherwise have hereunder or thereunder, at law, in equity or otherwise. 10.05. NOTICES. (a) GENERAL. Except to the extent otherwise expressly permitted hereunder or thereunder, all notices, requests, demands, directions and other communications (collectively "notices") to the Borrower or any Lender Party under this Agreement or any Loan Document shall be in writing (including telexes and facsimile transmission) and shall be sent by first-class mail, or by nationally-recognized overnight courier, or by telex or facsimile transmission (with confirmation in writing mailed first-class or sent by such an overnight courier), or by personal delivery. All notices shall be sent to the applicable party at the address stated on the signature pages hereof or in accordance with the last unrevoked written direction from such party to the other parties hereto, in all cases with postage or other charges prepaid. Any such properly given notice to any Lender Party shall be effective when received. Any such properly given notice to the Borrower shall be effective on the earliest to occur of receipt, telephone confirmation of receipt of telex or facsimile transmission, one Business Day after delivery to a nationally-recognized overnight courier, or three Business Days after deposit in the mail. (b) COPIES TO AGENT. Any Lender giving any notice to the Borrower or any other party to a Loan Document shall simultaneously send a copy thereof to the Agent, and the Agent shall promptly notify the other Lenders of the receipt by it of any such notice. (c) RELIANCE. Each Lender Party may rely on any notice (whether or not such notice is made in a manner permitted or required by this Agreement or any Loan Document) purportedly made by or on behalf of the Borrower, and no Lender Party shall have any duty to verify the identity or authority of any Person giving such notice. 10.06. EXPENSES; TAXES; INDEMNITY. (a) EXPENSES. The Borrower agrees to pay or cause to be paid and to save each Lender Party harmless against liability for the payment of all reasonable out-of-pocket costs and expenses (including but not limited to reasonable fees and expenses of outside counsel, including local counsel, auditors, and all other professional, accounting, evaluation and consulting costs) incurred by any Lender Party from time to time arising from or relating to (i) in the case of the Agent, the negotiation, preparation, execution, delivery, administration and performance of this Agreement and the other Loan Documents, (ii) in the case of the Agent, any requested amendments, modifications, supplements, waivers or consents (whether or not ultimately entered into or granted) to this Agreement or any Loan Document, (iii) in the case of each Lender Party, the enforcement or preservation of rights under this Agreement or any Loan Document (including but not limited to any such costs or expenses arising from or relating to (A) the creation, perfection or protection of any Lien on any collateral, (B) the protection, collection, lease, sale, taking possession of, preservation of, or realization on, any collateral, including without limitation advances for taxes, filing fees and the like, (C) collection or enforcement by any Lender Party of any outstanding Loan or any other amount owing hereunder or thereunder, and (D) any litigation, proceeding, dispute, work-out, restructuring or rescheduling related in any way to this Agreement or the Loan Documents), and (iv) in the case of Mellon Bank, N.A., any syndication of this Agreement prior to the first anniversary of the Closing Date (but amounts payable under this clause (iv), plus amounts payable under Section 10.06(a)(iv) of the other Credit Facilities as constituted on the Closing Date, shall in no event exceed an aggregate of $50,000). A-56 162 (b) TAXES. The Borrower hereby agrees to pay all stamp, document, transfer, recording, filing, registration, search, sales and excise fees and taxes and all similar impositions now or hereafter determined by any Lender Party to be payable in connection with this Agreement or any other Loan Documents or any other documents, instruments or transactions pursuant to or in connection herewith or therewith, and the Borrower agrees to save each Lender Party harmless from and against any and all present or future claims, liabilities or losses with respect to or resulting from any omission to pay or delay in paying any such fees, taxes or impositions. (c) INDEMNITY. The Borrower hereby agrees to reimburse and indemnify the Lender Parties, their respective affiliates, and the directors, officers, employees, attorneys and agents of each of the foregoing (the "Lender Indemnified Parties"), and each of them, and to hold each of them harmless from and against, any and all losses, liabilities, claims, damages, expenses, obligations, penalties, actions, judgments, suits, costs or disbursements of any kind or nature whatsoever (including, without limitation, the fees and disbursements of outside counsel for such Lender Indemnified Party in connection with any investigative, administrative or judicial proceeding commenced or threatened, whether or not such Lender Indemnified Party shall be designated a party thereto) that may at any time be imposed on, asserted against or incurred by such Lender Indemnified Party as a result of, or arising out of, or in any way related to or by reason of this Agreement or any other Loan Document, any transaction from time to time contemplated hereby or thereby, or any transaction financed or secured in whole or in part, directly or indirectly, with the proceeds of any Loan (and without in any way limiting the generality of the foregoing, including any grant of any Lien on collateral or any exercise by the Collateral Agent or any Lender Party of any of its rights or remedies under this Agreement or any other Loan Document); but excluding any portion of such losses, liabilities, claims, damages, expenses, obligations, penalties, actions, judgments, suits, costs or disbursements resulting from the gross negligence or willful misconduct of such Lender Indemnified Party, as finally determined by a court of competent jurisdiction. If and to the extent that the foregoing obligations of the Borrower under this Section 10.06(c), or any other indemnification obligation of the Borrower hereunder or under any other Loan Document, are unenforceable for any reason, the Borrower hereby agrees to make the maximum contribution to the payment and satisfaction of such obligations which is permissible under applicable Law. 10.07. SEVERABILITY. The provisions of this Agreement are intended to be severable. If any provision of this Agreement shall be held invalid or unenforceable in whole or in part in any jurisdiction such provision shall, as to such jurisdiction, be ineffective to the extent of such invalidity or unenforceability without in any manner affecting the validity or enforceability thereof in any other jurisdiction or the remaining provisions hereof in any jurisdiction. 10.08. PRIOR UNDERSTANDINGS. This Agreement and the other Loan Documents supersede all prior and contemporaneous understandings and agreements, whether written or oral, among the parties hereto and thereto relating to the transactions provided for herein and therein, including the engagement letter between the Borrower and Mellon Bank, N.A. dated December 13, 1996. 10.09. DURATION; SURVIVAL. All representations and warranties of the Borrower contained herein or in any other Loan Document or made in connection herewith or therewith shall survive the making of, and shall not be waived by the execution and delivery, of this Agreement or any other Loan Document, any investigation by or knowledge of any Lender Party, the making of any Loan, or any other event or condition whatever. All covenants and agreements of the Borrower contained A-57 163 herein or in any other Loan Document shall continue in full force and effect from and after the date hereof (or, in the case of Section 7.01 hereof, from and after December 31, 1996) until all Commitments have terminated, and all Loan Obligations (other than Contingent Indemnification Obligations) have been indefeasibly paid in full in cash. Without limitation, all obligations of the Borrower hereunder or under any other Loan Document to make payments to or indemnify any Lender Party or Lender Indemnified Party (including but not limited to obligations arising under Sections 2.10, 2.11 and 10.06 hereof) shall survive the payment in full of all other Loan Obligations, termination of the Borrower's right to borrow hereunder, and all other events and conditions whatever. In addition, all obligations of each Lender to make payments to or indemnify the Agent and Persons related to the Agent (including but not limited to obligations arising under Section 9.07 hereof) shall survive the payment in full by the Borrower of all Loan Obligations, termination of the Borrower's right to borrow hereunder, and all other events and conditions whatever. 10.10. COUNTERPARTS. This Agreement may be executed in any number of counterparts and by the different parties hereto on separate counterparts each of which, when so executed, shall be deemed an original, but all such counterparts shall constitute but one and the same instrument. 10.11. LIMITATION ON PAYMENTS. The parties hereto intend to conform to all applicable Laws in effect from time to time limiting the maximum rate of interest that may be charged or collected. Accordingly, notwithstanding any other provision hereof or of any other Loan Document, the Borrower shall not be required to make any payment to or for the account of any Lender, and each Lender shall refund any payment made by the Borrower, to the extent that such requirement or such failure to refund would violate or conflict with nonwaivable provisions of applicable Laws limiting the maximum amount of interest which may be charged or collected by such Lender. 10.12. SET-OFF. The Borrower hereby agrees that if any Loan Obligation of the Borrower shall be due and payable (by acceleration or otherwise), each Lender Party shall have the right, without notice to the Borrower, to set-off against and to appropriate and apply to such Loan Obligation any obligation of any nature owing to the Borrower by such Lender Party, including but not limited to all deposits (whether time or demand, general or special, provisionally credited or finally credited, whether or not evidenced by a certificate of deposit) now or hereafter maintained by the Borrower with such Lender Party. Such right shall be absolute and unconditional in all circumstances and, without limitation, shall exist whether or not such Lender Party or any other Person shall have given notice or made any demand to the Borrower or any other Person, whether such obligation owed to the Borrower is contingent, absolute, matured or unmatured (it being agreed that such Lender Party may deem such obligation to be then due and payable at the time of such setoff), and regardless of the existence or adequacy of any collateral, guaranty or any other security, right or remedy available to any Lender Party or any other Person. The Borrower hereby agrees that, to the fullest extent permitted by law, any Participant and any branch, subsidiary or affiliate of any Lender Party or any Participant shall have the same rights of set-off as a Lender as provided in this Section 10.12 (regardless of whether such Participant, branch, subsidiary or affiliate would otherwise be deemed in privity with or a direct creditor of the Borrower). The rights provided by this Section 10.12 are in addition to all other rights of set-off and banker's lien and all other rights and remedies which any Lender Party (or any such Participant, branch, subsidiary or affiliate) may otherwise have under this Agreement, any other Loan Document, at law or in equity, or otherwise, and nothing in this Agreement or any Loan Document shall be deemed a waiver or prohibition of or restriction on the rights of set-off or bankers' lien of any such Person. A-58 164 10.13. SHARING OF COLLECTIONS. Subject to Section 2.06 of the Collateral Agency Agreement, the Lenders hereby agree among themselves that if any Lender shall receive (by voluntary payment, realization upon security, set-off or from any other source) any amount on account of the Loans, interest thereon, or any other Loan Obligation contemplated by this Agreement or the other Loan Documents to be made by the Borrower ratably to all Lenders in greater proportion than any such amount received by any other Lender, then the Lender receiving such proportionately greater payment shall notify each other Lender and the Agent of such receipt, and equitable adjustment will be made in the manner stated in this Section so that, in effect, all such excess amounts will be shared ratably among all of the Lenders. The Lender receiving such excess amount shall purchase (which it shall be deemed to have done simultaneously upon the receipt of such excess amount) for cash from the other Lenders a participation in the applicable Loan Obligations owed to such other Lenders in such amount as shall result in a ratable sharing by all Lenders of such excess amount (and to such extent the receiving Lender shall be a Participant). If all or any portion of such excess amount is thereafter recovered from the Lender making such purchase, such purchase shall be rescinded and the purchase price restored to the extent of such recovery, together with interest or other amounts, if any, required by Law to be paid by the Lender making such purchase. The Borrower hereby consents to and confirms the foregoing arrangements. Each Participant shall be bound by this Section as fully as if it were a Lender hereunder. 10.14. SUCCESSORS AND ASSIGNS; PARTICIPATIONS; ASSIGNMENTS. (a) SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and inure to the benefit of the Borrower, the Lender Parties, all future holders of the Notes, and their respective successors and assigns, except that the Borrower may not assign or transfer any of its rights hereunder without the prior written consent of all the Lenders and the Agent, and any purported assignment without such consent shall be void, and except that, to the fullest extent permitted by law, a Lender may not voluntarily assign or transfer any of its rights hereunder except in accordance with the other provisions of this Section 10.14, and any other purported voluntary assignment or transfer shall be void; provided, that this Agreement shall inure to the benefit of successors of Lenders by operation of law or resulting from an involuntary assignment or transfer (including but not limited to receivers, conservators, trustees and like Persons, and successors by merger or consolidation). (b) PARTICIPATIONS. Any Lender may, in the ordinary course of its business and in accordance with applicable Law, at any time sell participations to one or more commercial banks or other Persons (each a "Participant") in all or a portion of its rights and obligations under this Agreement and the other Loan Documents (including, without limitation, all or a portion of its Commitments and the Loans owing to it and any Note held by it); provided, that (i) any such Lender's obligations under this Agreement and the other Loan Documents shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations, (iii) the parties hereto shall continue to deal solely and directly with such Lender in connection with such Lender's rights and obligations under this Agreement and each of the other Loan Documents, and A-59 165 (iv) such Participant shall, by accepting such Participation, be bound by the provisions of Section 10.13 hereof, and (v) if such Participant is not already a Participant or a Lender, and if such Participation gives such Participant any voting rights (other than on matters described in clauses (a) through (f), inclusive, of Section 10.03 hereof), such Participation shall be subject to consent of the Agent, Mellon Bank, N.A. and the Borrower pursuant to clause (i) of Section 10.14(c) hereof as if such Participation were an assignment described therein. The Borrower agrees that any such Participant shall be entitled to the benefits of Sections 2.10, 2.11, 10.06 and 10.12 hereof with respect to its participation in the Commitments and the Loans outstanding from time to time; provided, that no such Participant shall be entitled to receive any greater amount pursuant to such Sections than the transferor Lender would have been entitled to receive in respect of the amount of the participation transferred to such Participant had no such transfer occurred. (c) ASSIGNMENTS. Any Lender may, in the ordinary course of its business and in accordance with applicable Law, at any time assign all or a portion of its rights and obligations under this Agreement and the other Loan Documents (including, without limitation, all or any portion of its Commitments and Loans owing to it and any Note held by it) to any Lender or to one or more additional commercial banks or other Persons (each a "Purchasing Lender"); provided, that (i) any such assignment to a Purchasing Lender shall be made only with the consent of the Agent and Mellon Bank, N.A. (which each of them may grant or withhold in their absolute discretion) and of the Borrower (which consent may not be unreasonably withheld or delayed); (ii) if a Lender makes such an assignment of less than all of its then remaining rights and obligations under this Agreement and the other Loan Documents and under the Note Backup Agreement, such transferor Lender shall retain, after such assignment (and any concurrent assignment under the Note Backup Agreement), a minimum principal amount of $10,000,000 under this Agreement and the Note Backup Agreement in the aggregate, and after giving effect to such assignment (and any concurrent assignment under the Note Backup Agreement) the transferee Lender shall have a minimum principal amount of $10,000,000 under this Agreement and the Note Backup Agreement in the aggregate, (iii) each such assignment shall be of a constant, and not a varying, percentage of the Term Loan Commitment and Term Loan of the transferor Lender, and of all of the transferor Lender's related rights and obligations under this Agreement and the other Loan Documents, (iv) each such assignment shall be made pursuant to a Transfer Supplement in substantially the form of Exhibit B to this Agreement, duly completed (a "Transfer Supplement"). In order to effect any such assignment, the transferor Lender and the Purchasing Lender shall execute and deliver to the Agent a duly completed Transfer Supplement (including the consents required by clause (i) of the preceding sentence) with respect to such assignment, together with any Note or Notes subject to such assignment (the "Transferor Lender Notes") and a processing and recording fee of $3,500; and, upon receipt thereof, the Agent shall accept such Transfer Supplement. Upon receipt of the Purchase Price Receipt Notice pursuant to such Transfer Supplement, the Agent shall record such A-60 166 acceptance in the Register. Upon such execution, delivery, acceptance and recording, from and after the close of business at the Agent's Office on the Transfer Effective Date specified in such Transfer Supplement (x) the Purchasing Lender shall be a party hereto and, to the extent provided in such Transfer Supplement, shall have the rights and obligations of a Lender hereunder, and (y) the transferor Lender thereunder shall be released from its obligations under this Agreement to the extent so transferred (and, in the case of an Transfer Supplement covering all or the remaining portion of a transferor Lender's rights and obligations under this Agreement, such transferor Lender shall cease to be a party to this Agreement) from and after the Transfer Effective Date. On or prior to the Transfer Effective Date specified in a Transfer Supplement, the Borrower, at its expense, shall execute and deliver to the Agent (for delivery to the Purchasing Lender) new Term Loan Notes evidencing such Purchasing Lender's assigned Commitments or Loans and (for delivery to the transferor Lender) replacement Term Loan Notes in the principal amount of the Loans or Commitments retained by the transferor Lender (such Notes to be in exchange for, but not in payment of, those Notes then held by such transferor Lender). Each such Note shall be dated the date and be substantially in the form of the predecessor Note. The Agent shall mark the predecessor Notes "exchanged" and deliver them to the Borrower. Accrued interest and accrued fees shall be paid to the Purchasing Lender at the same time or times provided in the predecessor Notes and this Agreement. (d) REGISTER. The Agent shall maintain at its office a copy of each Transfer Supplement delivered to it and a register (the "Register") for the recordation of the names and addresses of the Lenders and the Commitment of, and principal amount of the Loans owing to, each Lender from time to time. The entries in the Register shall be conclusive absent manifest error and the Borrower and each Lender Party may treat each person whose name is recorded in the Register as a Lender hereunder for all purposes of the Agreement. The Register shall be available for inspection by the Borrower or any Lender at any reasonable time and from time to time upon reasonable prior notice. (e) FINANCIAL AND OTHER INFORMATION. Subject to Section 10.14(g) hereof, the Borrower authorizes the Agent and each Lender to disclose to any Participant or Purchasing Lender, or prospective Participant or Purchasing Lender, any and all financial and other information delivered to, received by, or otherwise in the possession of, such Person from time to time relating to the Borrower, its Subsidiaries and affiliates, or the matters contemplated by the Loan Documents. At the request of any Lender, the Borrower, at the Borrower's expense, shall provide to each prospective transferee the conformed copies of documents referred to in Section 4 of the form of Transfer Supplement. (f) SYNDICATION. The Borrower shall, at the reasonable request of Mellon Bank, N.A. from time to time, at the Borrower's expense, use all reasonable efforts to cooperate with its syndication effort, including, without limitation, (i) assisting it from time to time in preparing information packages for delivery to prospective Participants and Purchasing Lenders, and (ii) causing appropriate officers, representative and experts to meet with prospective Participants and Purchasing Lenders from time to time. Mellon Bank, N.A. agrees to make such information packages available to the Borrower for reasonable review before initial dissemination of the same in primary syndication, and to consult with the Borrower as to the content thereof. A-61 167 (g) CONFIDENTIALITY. Each Lender Party agrees to take reasonable precautions to maintain the confidentiality of information designated in writing as confidential and provided to it by the Borrower or any Subsidiary in connection with this Agreement; provided, however, that any Lender Party may disclose such information (i) at the request of any bank regulatory authority or other Governmental Authority or in connection with an examination of such Lender Party by any such Governmental Authority, (ii) pursuant to subpoena or other court process, (iii) to the extent such Lender Party is required (or believes in good faith that it is required) to do so in accordance with any applicable Law, (iv) to such Lender Party's independent auditors and other professional advisors, (v) in connection with the enforcement of any of its rights under or in connection with any Loan Document, (vi) to any other Lender Party, and (vii) to any actual or potential Participant or Purchasing Lender, or to any other actual or potential creditor of or participant in a credit to the Borrower or any of its Subsidiaries or Affiliates, so long as, in the case of this clause (vii), such Person agrees to comply with the provisions of this Section 10.14(g). (h) ASSIGNMENTS TO FEDERAL RESERVE BANK. Any Lender may at any time assign all or any portion of its rights under this Agreement, including without limitation any Loans owing to it and any Note held by it, to a Federal Reserve Bank. No such assignment shall relieve the transferor Lender from any of its obligations hereunder. 10.15. GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL; LIMITATION OF LIABILITY. (a) GOVERNING LAW. THIS AGREEMENT AND ALL OTHER LOAN DOCUMENTS (EXCEPT TO THE EXTENT, IF ANY, OTHERWISE EXPRESSLY STATED IN SUCH OTHER LOAN DOCUMENTS) SHALL BE GOVERNED BY, CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH OF PENNSYLVANIA, WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES. (b) CERTAIN WAIVERS. THE BORROWER HEREBY IRREVOCABLY AND UNCONDITIONALLY: (i) AGREES THAT ANY ACTION, SUIT OR PROCEEDING BY ANY PERSON ARISING FROM OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR ANY STATEMENT, COURSE OF CONDUCT, ACT, OMISSION, OR EVENT OCCURRING IN CONNECTION HEREWITH OR THEREWITH (COLLECTIVELY, "RELATED LITIGATION") MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION SITTING IN ALLEGHENY COUNTY, PENNSYLVANIA, SUBMITS TO THE JURISDICTION OF SUCH COURTS, AND TO THE FULLEST EXTENT PERMITTED BY LAW AGREES THAT IT WILL NOT BRING ANY RELATED LITIGATION IN ANY OTHER FORUM (BUT NOTHING HEREIN SHALL AFFECT THE RIGHT OF ANY LENDER PARTY TO BRING ANY ACTION, SUIT OR PROCEEDING IN ANY OTHER FORUM); (ii) WAIVES ANY OBJECTION WHICH IT MAY HAVE AT ANY TIME TO THE LAYING OF VENUE OF ANY RELATED LITIGATION BROUGHT IN ANY SUCH COURT, WAIVES ANY CLAIM THAT ANY SUCH RELATED LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM, AND WAIVES ANY RIGHT TO OBJECT, WITH RESPECT TO ANY RELATED LITIGATION BROUGHT IN ANY SUCH COURT, THAT SUCH COURT DOES NOT HAVE JURISDICTION OVER THE BORROWER; (iii) CONSENTS AND AGREES TO SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER LEGAL PROCESS IN ANY RELATED LITIGATION BY REGISTERED OR CERTIFIED U.S. MAIL, POSTAGE PREPAID, TO THE BORROWER AT THE ADDRESS FOR NOTICES DESCRIBED IN SECTION 10.05 HEREOF, AND CONSENTS AND AGREES THAT SUCH A-62 168 SERVICE SHALL CONSTITUTE IN EVERY RESPECT VALID AND EFFECTIVE SERVICE (BUT NOTHING HEREIN SHALL AFFECT THE VALIDITY OR EFFECTIVENESS OF PROCESS SERVED IN ANY OTHER MANNER PERMITTED BY LAW); AND (iv) WAIVES THE RIGHT TO TRIAL BY JURY IN ANY RELATED LITIGATION. (c) LIMITATION OF LIABILITY. TO THE FULLEST EXTENT PERMITTED BY LAW, NO CLAIM MAY BE MADE BY THE BORROWER AGAINST ANY LENDER PARTY OR ANY AFFILIATE, DIRECTOR, OFFICER, EMPLOYEE, ATTORNEY OR AGENT OF ANY OF THEM FOR ANY SPECIAL, INCIDENTAL, INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES IN RESPECT OF ANY CLAIM ARISING FROM OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR ANY STATEMENT, COURSE OF CONDUCT, ACT, OMISSION, OR EVENT OCCURRING IN CONNECTION HEREWITH OR THEREWITH (WHETHER FOR BREACH OF CONTRACT, TORT OR ANY OTHER THEORY OF LIABILITY). THE BORROWER HEREBY WAIVES, RELEASES AND AGREES NOT TO SUE UPON ANY CLAIM FOR ANY SUCH DAMAGES, WHETHER SUCH CLAIM PRESENTLY EXISTS OR ARISES HEREAFTER AND WHETHER OR NOT SUCH CLAIM IS KNOWN OR SUSPECTED TO EXIST IN ITS FAVOR. [Remainder of page intentionally left blank] A-63 169 IN WITNESS WHEREOF, the parties hereto, by their officers thereunto duly authorized, have executed and delivered this Agreement as of the date first above written. PRIMARK CORPORATION By /s/ STEPHEN H. CURRAN --------------------------------------------- Stephen H. Curran Senior Vice President and Chief Financial Officer Address for Notices: Primark Corporation 1000 Winter Street, Suite 4300N Waltham, MA 02154 Attn: Stephen H. Curran, Senior Vice President and Chief Financial Officer Telephone: 617-487-2140 Facsimile: 617-890-6129 A-64 170 MELLON BANK, N.A., individually and as Agent By /s/ R. JANE WESTRICH ------------------------------------------- R. Jane Westrich Vice President Term Loan Committed Amount: $225,000,000 Commitment Percentage: 100% Address for Notices: Mellon Bank, N.A. Loan Administration Three Mellon Bank Center Room 153-2332 Pittsburgh, PA 15259-0003 Attn: Terpsie Katsafanas Telephone: 412-234-4769 Facsimile: 412-236-2028 With a copy to: Mellon Bank, N.A. One Boston Place, 6th Floor Boston, MA 02108 Attn: R. Jane Westrich, Vice President Telephone: 617-722-7969 Facsimile: 617-722-3516 A-65 171 ANNEX A TO TERM LOAN AGREEMENT DEFINITIONS; CONSTRUCTION 1.01. CERTAIN DEFINITIONS. In addition to other words and terms defined elsewhere in this Agreement, as used in this Agreement the following words and terms defined have the meanings given them below, unless the context of this Agreement otherwise clearly requires. "Adjusted Acquisition Consideration" in connection with an acquisition of a type referred to in clause (y) or (z) of Section 7.08 hereof by the Borrower or a Subsidiary of the Borrower means the amount, not less than zero, equal to, without duplication, the sum of: (a) the gross consideration paid or payable by the Borrower and its Subsidiaries in connection with such acquisition (including, without limitation, the purchase price therefor and transaction expenses), with non-cash consideration valued at its Fair Market Value on the closing date of the acquisition; provided, that for purposes of this clause (a) (i) the value of consideration in the form of Shares of Capital Stock of the Borrower or options or warrants therefor shall be deemed zero, and (ii) the value of consideration in the form of Indebtedness or other deferred payment obligations of the Borrower or its Subsidiaries (exclusive of Indebtedness or other deferred payment obligations payable and paid exclusively in Shares of Capital Stock of the Borrower or options or warrants therefor) shall be deemed the maximum aggregate amount of all payments which in any circumstances may be required thereunder, as determined at the time such Indebtedness or other deferred payment obligation is incurred (except that, for purposes of this clause (ii), interest on Indebtedness accruing after such determination date at a market rate shall be excluded from such maximum aggregate amount), plus (b) the aggregate Indebtedness and Guarantee Equivalents assumed or incurred, directly or indirectly, by the Borrower or any Subsidiary of the Borrower in connection with such acquisition (including, in the case of an acquisition of any or all of the Shares of Capital Stock or other equity interests of a Person, the aggregate Indebtedness and Guarantee Equivalents of such Person), exclusive of Indebtedness and Guarantee Equivalents of the Person being acquired constituting current accounts payable of such Person on normal trade terms to trade creditors arising out of purchases of goods or services in the ordinary course of business and not incurred in contemplation of such acquisition, minus (c) the aggregate cash and Cash Equivalent Investments (valued at the lower of cost or market) acquired by the Borrower and its Subsidiaries in such acquisition (including, in the case of an acquisition of all, but not less than all, of the Shares of Capital Stock or other equity interests of a Person, the aggregate cash and Cash Equivalent Investments of such Person, it being understood that in the event that the Borrower and its Subsidiaries acquire less than all of the Shares of Capital Stock or other equity interests of a Person, no part of the cash or Cash Equivalent Investments of such Person shall be deemed within the scope of this clause (c)); provided, that in the event A-1 172 that the Borrower and its Subsidiaries acquire all of the Shares of Capital Stock or other equity interests of a Person, the cash and Cash Equivalent Investments of such Person shall be deemed within the scope of this clause (c) only in the event that the relevant acquisition agreement requires the amount of cash and Cash Equivalent Investments of such Person to be determined at the closing date of the acquisition and provides for an adjustment to the purchase price based on such amount. "Advance" shall mean any loan, advance or other extension of credit, direct or indirect. "Affected Lender" shall have the meaning set forth in Section 2.03(e) hereof. "Affiliate" of a Person shall mean any Person which directly or indirectly controls, or is controlled by, or is under common control with, such Person. For purposes of the preceding sentence, "control" of a Person shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by contract or otherwise, and in any case shall include, without limitation, (a) being a director or officer (or a Person having powers analogous to those of a corporate director or officer) of such Person, or of a Person that directly or indirectly controls such Person, (b) having direct or indirect ownership (beneficially or of record) of, or direct or indirect power to vote, 30% or more of the outstanding Shares of Capital Stock of any class of such Person having ordinary voting power for the election of directors (or in the case of a Person that is not a Corporation, 30% or more of any class of equity interest having voting or control power analogous to corporate common stock), and (b) being a general partner of such Person, or of a Person having direct or indirect control over a general partner of such Person. "Applicable Margin" shall have the meaning set forth in Section 2.03(b) hereof. "Assured Obligation" shall have the meaning given that term in the definition of "Guaranty Equivalent." "Base Rate" for any day shall mean the greater of (a) the Prime Rate for such day or (b) 0.50% plus the Federal Funds Effective Rate for such day, such interest rate to change automatically from time to time effective as of the effective date of each change in the Prime Rate or the Federal Funds Effective Rate. "Base Rate Option" shall have the meaning set forth in Section 2.03(a) hereof. "Base Rate Portion" of any Loan or Loans shall mean at any time the portion, including the whole, of such Loan or Loans bearing interest at such time (i) under the Base Rate Option or (ii) in accordance with Section 2.09(c)(ii) hereof. If no Loan or Loans is specified, "Base Rate Portion" shall refer to the Base Rate Portion of all Loans outstanding at such time. "Borrower Pledge Agreement" shall mean the Pledge Agreement of approximately even date herewith between the Borrower and the Collateral Agent, as amended, modified or supplemented from time to time. "Broker-Dealer" shall mean a Person who is, or is registered as, a broker, dealer, municipal securities dealer, government securities broker or government securities dealer under A-2 173 the Securities Exchange Act of 1934, as amended, or under any state securities law, or who has a comparable status under any securities law of any other Governmental Authority. "Business Day" shall mean any day other than a Saturday, Sunday, public holiday under the laws of the Commonwealth of Pennsylvania or other day on which banking institutions are authorized or obligated to close in the city in which is located the Agent's Office. "Capital Expenditures" of any Person shall mean, for any period, all expenditures (whether paid in cash or accrued as liabilities during such period) of such Person during such period which would be classified as capital expenditures in accordance with GAAP (including, without limitation, expenditures for maintenance and repairs which are capitalized, and Capitalized Leases to the extent an asset is recorded in connection therewith in accordance with GAAP). "Capitalized Lease" shall mean at any time any lease which is, or is required under GAAP to be, capitalized on the balance sheet of the lessee at such time, and "Capitalized Lease Obligation" of any Person at any time shall mean the aggregate amount which is, or is required under GAAP to be, reported as a liability on the balance sheet of such Person at such time as lessee under a Capitalized Lease. "Capitalized Software" of any Person shall mean, for any period, all expenditures (whether paid in cash or accrued as liabilities during such period) of such Person which would be classified as capitalized software in accordance with GAAP. "Cash Equivalent Investments" shall have the meaning given that term in the Collateral Agency Agreement. "CERCLA" shall mean the Comprehensive Environmental Response, Compensation and Liability Act, as amended, and any successor statute of similar import, and regulations thereunder, in each case as in effect from time to time. "CERCLIS" shall mean the Comprehensive Environmental Response, Compensation and Liability Information System List, as the same may be amended from time to time. "Closing Date" shall mean the date of the Loans hereunder. "Code" means the Internal Revenue Code of 1986, as amended, and any successor statute of similar import, and regulations thereunder, in each case as in effect from time to time. References to sections of the Code shall be construed also to refer to any successor sections. "Collateral Agency Agreement" shall mean the Collateral Agency Agreement of approximately even date herewith between the Borrower, certain "Revolving Credit Parties," by Mellon Bank, N.A., as Revolving Credit Agent, certain "Term Loan Parties," by Mellon Bank, N.A., as Term Loan Agent, certain "Note Backup Parties," by Mellon Bank, N.A., as Note Backup Agent, and Mellon Bank, N.A., as Collateral Agent, as amended, modified or supplemented from time to time. A-3 174 "Collateral Agent" shall have the meaning given that term in the Collateral Agency Agreement. "Commitment" of a Lender shall mean the Term Loan Commitment of such Lender. "Commitment Percentage" of a Lender at any time shall mean the Commitment Percentage for such Lender set forth below its name on the signature page hereof, subject to transfer to another Lender as provided in Section 10.14 hereof. "Consolidated Cash Interest Expense" for any period shall mean the total cash interest expense payable by the Borrower and its Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP. "Consolidated EBITDA" for any period shall mean the sum of (a) Consolidated Net Income for such period, (b) Consolidated Interest Expense for such period, (c) Consolidated Income Tax Expense for such period, (d) depreciation expense of the Borrower and its Subsidiaries for such period, and (e) amortization expense of the Borrower and its Subsidiaries for such period, minus the sum of (x) extraordinary gains (but not any losses) to the extent included in determining such Consolidated Net Income, and (y) equity earnings (but not any losses) of Affiliates of the Borrower to the extent included in determining Consolidated Net Income for such period, all as determined on a consolidated basis in accordance with GAAP. "Consolidated EBITDA Less Capital Expenditures" for any period shall mean Consolidated EBITDA for such period, minus the sum of Capital Expenditures of the Borrower and its Subsidiaries for such period and, without duplication of amounts included in Capital Expenditures, Capitalized Software of the Borrower and its Subsidiaries for such period, all as determined on a consolidated basis in accordance with GAAP. "Consolidated Fixed Charge Coverage Ratio" for any period shall mean the ratio of the Consolidated EBITDA Less Capital Expenditures for such period to the Consolidated Fixed Charges for such period. "Consolidated Fixed Charges" for any period shall mean the sum of (a) Consolidated Cash Interest Expense for such period, (b) principal payments made by the Borrower and its Subsidiaries during such period with respect to any outstanding Indebtedness (excluding (i) payments of Indebtedness under the Revolving Credit Agreement, (ii) prepayments made at the option of the Borrower of Indebtedness under the Term Loan Agreement, to the extent the amounts so prepaid are not otherwise due during such period, and (iii) payments of the Senior Notes at the scheduled maturity thereof), (c) the amount of Stock Payments made by the Borrower and its Subsidiaries during such period (excluding (i) Stock Payments made to the Borrower or its Subsidiaries, and (ii) Stock Payments made solely in Shares of Capital Stock (or warrants, options or rights therefor) of the Borrower) all as determined on a consolidated basis in accordance with GAAP. "Consolidated Funded Debt Ratio (Adjusted)" for any period shall mean the following ratio: (a) the amount, not less than zero, determined as of the last day of such period, equal to (i) Consolidated Funded Indebtedness, minus (ii) the amount, not less than zero, equal to (A) the amount of cash and Cash Equivalent Investments owned by the Borrower and its Subsidiaries, A-4 175 valued at the lower of cost or market, minus (B) $10,000,000, divided by (b) Consolidated EBITDA Less Capital Expenditures for such period. "Consolidated Funded Indebtedness" at any time shall mean Indebtedness (including the current portion thereof) of the Borrower and its Subsidiaries which as of such date would be classified in whole or in part as a long-term liability in accordance with GAAP, and in any event includes (a) Indebtedness under the Credit Facilities and the Senior Notes, (b) any Indebtedness of the Borrower and its Subsidiaries having a final maturity later than one year after the date of incurrence of such Indebtedness, (c) any Indebtedness, regardless of its term, of the Borrower and its Subsidiaries which is renewable or extendable by the obligor to a date later than one year after the date of incurrence of such Indebtedness, and (d) Indebtedness of TIMCO described in Section 7.03(j) hereof. "Consolidated Income Tax Expense" for any period shall mean the charges against income of the Borrower and its Subsidiaries for foreign, federal, state and local income taxes for such period, determined on a consolidated basis in accordance with GAAP. "Consolidated Interest Expense" for any period shall mean the total interest expense of the Borrower and its Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP. "Consolidated Net Income" for any period shall mean the net earnings (or loss) after taxes of the Borrower and its Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP; provided, that there shall be deducted therefrom (a) the income (but not any deficit) of any Person accrued prior to the date it becomes a Subsidiary or is merged into or consolidated with or is otherwise acquired by or combined with the Borrower or any Subsidiary in a business combination accounted for as a pooling of interests, including, in the case of a successor to the Borrower or any Subsidiary by consolidation or merger or transfer of assets, any earnings of the successor Corporation prior to such consolidation, merger or transfer of assets, (b) income (but not any loss) accounted for by the Borrower on the equity method resulting from an ownership interest in any Person, but the deduction for such equity income shall be reversed to the extent that during such period an amount not in excess of such income has been actually received by the Borrower or such Subsidiary in the form of cash dividends or similar cash distributions, (c) the undistributed earnings of any Subsidiary to the extent that the declaration or payment of dividends or similar distributions by such Subsidiary is restricted (whether such restriction arises by operation of Law, by agreement, by its certificate or articles of incorporation or by-laws (or other constituent documents), or otherwise), (d) any gain arising from the acquisition of any securities, or the extinguishment, under GAAP, of any Indebtedness, of the Borrower or any Subsidiary, and (e) income (but not any loss) from discontinued operations of the Borrower or any Subsidiary. "Consolidated Net Worth" at any time shall mean the total amount of common stockholders' equity and preferred stock of the Borrower and its consolidated Subsidiaries at such time, determined on a consolidated basis in accordance with GAAP; provided, that each item of the following types shall be deducted, to the extent such item is positive and is otherwise included therein: (a) any write-ups or other revaluation after the Closing Date in the book value of any asset owned by the Borrower or any of its consolidated Subsidiaries (other than write-ups resulting from the acquisition of assets of a business made within one year after such acquisition A-5 176 and accounted for by purchase accounting, and write-ups resulting from the valuation in the ordinary course of business of investment securities and inventory at the lower of cost or market), (b) all investments in and loans and Advances to (i) unconsolidated Subsidiaries of the Borrower, and (ii) Persons that are not Subsidiaries of the Borrower (other than Cash Equivalent Investments), (c) treasury stock, (d) assets attributable to interests held by Persons other than the Borrower and its Subsidiaries that are Wholly Owned Subsidiaries of the Borrower, (e) Disqualified Capital Stock of the Borrower or of any Subsidiary of the Borrower, and (f) the amount, whether positive or negative, of foreign currency translation adjustments to stockholders' equity of the Borrower and its Subsidiaries, all of the foregoing as determined in accordance with GAAP. "Consolidated Net Worth (Adjusted)" at any time shall mean Consolidated Net Worth at such time plus the lesser of (a) $50,000,000, or (b) the sum of (i) aggregate writeoffs of goodwill on or after January 1, 1997 resulting from an impairment loss pursuant to Statement of Financial Accounting Standards No. 121, made by the Borrower in accordance with GAAP, and (ii) aggregate writeoffs of the cost of computer software purchased in an acquisition of the Person which developed such software (or by acquisition of assets comprising a line of business of such Person which includes such software) on or after January 1, 1997, made pursuant to Statement of Financial Accounting Standards No. 86, provided that such writeoffs are made at the time of the related acquisition and are made by the Borrower in accordance with GAAP. "Contingent Indemnification Obligations" shall have the meaning given that term in the Collateral Agency Agreement. "Controlled Group Member" shall mean each trade or business (whether or not incorporated) which together with the Borrower or any Subsidiary of the Borrower is treated as a controlled group or single employer under Sections 4001(a)(14) or 4001(b)(1) of ERISA or Sections 414(b), (c), (m) or (o) of the Code. "Corporation" shall mean a corporation, limited liability company or business trust organized under the Laws of any state of the United States, a company limited by shares incorporated under the Laws of England and Wales, or any similar entity organized under the Laws of any other jurisdiction, the owners of which are not by operation of Law generally liable for the obligations of such entity. "Corresponding Source of Funds" shall mean, in the case of any Funding Segment of the Euro-Rate Portion, the proceeds of hypothetical receipts by a Notional Euro-Rate Funding Office or by a Lender through a Notional Euro-Rate Funding Office of one or more Dollar deposits in the interbank eurodollar market at the beginning of the Euro-Rate Funding Period corresponding to such Funding Segment having maturities approximately equal to such Euro-Rate Funding Period and in an aggregate amount approximately equal to such Lender's Pro Rata share of such Funding Segment. "Credit Facilities" shall mean the Revolving Credit Agreement, the Term Loan Agreement and the Note Backup Agreement. A-6 177 "Datastream" shall mean Datastream International Limited, a corporation incorporated under the Laws of England and Wales. "Disqualified Capital Stock" shall mean any Shares of Capital Stock that, other than solely at the option of the issuer thereof, by their terms (or by the terms of any security into which they are convertible or exchangeable) are, or upon the happening of an event or the passage of time would be, required to be redeemed or repurchased, in whole or in part, or have, or upon the happening of an event or the passage of time would have, a redemption or similar payment due on or prior to the Facilities Termination Date. "Dollar," "Dollars" and the symbol "$" shall mean lawful money of the United States of America. "Early Maturity Tranche" shall have the meaning given that term in Section 2.03(b)(ii) hereof. "Environmental Affiliate": a Person ("Y") shall be an "Environmental Affiliate" of another Person ("X"), if X has retained or assumed, or is otherwise liable (contingently or otherwise) for, any liability (contingent or other) of Y with respect to any Environmental Claim, whether such retention, assumption or liability on the part of X arises by agreement, by Law or otherwise. "Environmental Approvals" shall mean any Governmental Action pursuant to or required under any Environmental Law. "Environmental Claim" shall mean, with respect to any Person (the "specified Person"), any action, suit, proceeding, investigation, notice, claim, complaint, demand, request for information or other communication (written or oral) by any other Person (including but not limited to any Governmental Authority, citizens' group or present or former employee of the specified Person) alleging, asserting or claiming any actual or potential liability on the part of the specified Person for investigatory costs, cleanup costs, governmental response costs, natural resources damages, property damages, personal injuries, fines or penalties, arising out of, based on or resulting from (a) the presence, or release into the environment, of any Environmental Concern Materials at any location, whether or not owned by such Person, or (b) circumstances forming the basis of any violation or alleged violation of any Environmental Law. "Environmental Cleanup Site" shall mean any location which is listed or proposed for listing on the National Priorities List, on CERCLIS or on any similar state list of sites requiring investigation or cleanup, or which is the subject of any pending or threatened action, suit, proceeding or investigation related to or arising from any alleged violation of any Environmental Law. "Environmental Concern Materials" shall mean (a) any flammable substance, explosive, radioactive material, hazardous material, hazardous waste, toxic substance, solid waste, pollutant, contaminant or any related material, raw material, substance, product or by-product of any substance, as the foregoing terms are defined in, or any other substance regulated by, any Environmental Law (including but not limited to any "hazardous substance" as defined in CERCLA or any similar state Law), (b) any toxic chemical from or related to industrial, A-7 178 commercial or institutional activities, and (c) asbestos, gasoline, diesel fuel, motor oil, waste and used oil, heating oil and other petroleum products or compounds, polychlorinated biphenyls, radon and urea formaldehyde. "Environmental Law" shall mean any Law, whether now existing or subsequently enacted or amended, relating to (a) pollution or protection of the environment, including natural resources, (b) exposure of Persons, including but not limited to employees, to Environmental Concern Materials, (c) protection of the public health or welfare from the effects of products, by-products, wastes, emissions, discharges or releases of Environmental Concern Materials or (d) regulation of the manufacture, use or introduction into commerce of Environmental Concern Materials including their manufacture, formulation, packaging, labeling, distribution, transportation, handling, storage or disposal. Without limitation, "Environmental Law" shall also include any Environmental Approval and the terms and conditions thereof. "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as amended, and any successor statute of similar import, and regulations thereunder, in each case as in effect from time to time. References to sections of ERISA shall be construed also to refer to any successor sections. "Euro-Rate" for any day, as used herein, shall mean for each Funding Segment of the Euro-Rate Portion corresponding to a proposed or existing Euro-Rate Funding Period the rate per annum determined by the Agent by dividing (the resulting quotient to be rounded upward to the nearest 1/100 of 1%) (a) the rate of interest (which shall be the same for each day in such Euro-Rate Funding Period) determined in good faith by the Agent in accordance with its usual procedures (which determination shall be conclusive) to be the average of the rates per annum for deposits in Dollars offered to major money center banks in the London interbank market at approximately 11:00 a.m., London time, two London Business Days prior to the first day of such Euro-Rate Funding Period for delivery on the first day of such Euro-Rate Funding Period in amounts comparable to such Funding Segment and having maturities comparable to such Funding Period by (b) a number equal to 1.00 minus the Euro-Rate Reserve Percentage. "Euro-Rate Funding Period" shall have the meaning set forth in Section 2.03(c) hereof. "Euro-Rate Option" shall have the meaning set forth in Section 2.03(a) hereof. "Euro-Rate Portion" of any part of any Loan or Loans shall mean at any time the portion, including the whole, of such part of such Loan or Loans bearing interest at any time under the Euro-Rate Option or at a rate calculated by reference to the Euro-Rate under Section 2.09(c)(i) hereof. If no Loan or Loans is specified, "Euro-Rate Portion" shall refer to the Euro-Rate Portion of all Loans outstanding at such time. "Euro-Rate Reserve Percentage" for any day shall mean the percentage (expressed as a decimal, rounded upward to the nearest 1/100 of 1%), as determined in good faith by the Agent (which determination shall be conclusive), which is in effect on such day as prescribed by the Board of Governors of the Federal Reserve System (or any successor) representing the maximum reserve requirement (including, without limitation, supplemental, marginal and emergency reserve requirements) with respect to eurocurrency funding (currently referred to as "Eurocurrency liabilities") of a member bank in such System. The Euro-Rate shall be adjusted A-8 179 automatically as of the effective date of each change in the Euro-Rate Reserve Percentage. The Euro-Rate Option shall be calculated in accordance with the foregoing whether or not any Lender is actually required to hold reserves in connection with its eurocurrency funding or, if required to hold such reserves, is required to hold reserves at the "Euro-Rate Reserve Percentage" as herein defined. "Event of Default" shall mean any of the Events of Default described in Section 8.01 hereof. "Facilities Termination Date" shall mean the later to occur of the Revolving Credit Maturity Date, the Term Loan Maturity Date and the Note Backup Final Expiration Date. "Fair Market Value" shall mean, with respect to any asset, the sale value that would be obtained in an arm's length transaction between an informed and willing seller under no compulsion to sell and an informed and willing buyer. "Federal Funds Effective Rate" for any day shall mean the rate per annum (rounded upward to the nearest 1/100 of 1%) determined by the Agent (which determination shall be conclusive) to be the rate per annum announced by the Federal Reserve Bank of New York (or any successor) as being the weighted average of the rates on overnight Federal funds transactions arranged by Federal funds brokers on the previous trading day, as computed and announced by such Federal Reserve Bank (or any successor) in substantially the same manner as such Federal Reserve Bank computes and announces the weighted average it refers to as the "Federal Funds Effective Rate" as of the date of this Agreement; provided, that if such Federal Reserve Bank (or its successor) does not so announce such rate for such previous trading day, the "Federal Funds Effective Rate" shall be the average rate charged to Mellon Bank, N.A. on such previous trading day on such transactions as determined by the Agent. "Funding Periods" shall have the meaning set forth in Section 2.03(c) hereof. "Funding Segment" of the Euro-Rate Portion at any time shall mean the entire principal amount of such Portion to which at the time in question there is applicable a particular Funding Period beginning on a particular day and ending on a particular day. (By definition, each such Portion is at all times composed of an integral number of discrete Funding Segments and the sum of the principal amounts of all Funding Segments of any such Portion at any time equals the principal amount of such Portion at such time.) "GAAP" shall have the meaning given that term in Section 1.03 of this Annex A. "Governmental Action" shall have the meaning set forth in Section 4.04 hereof. "Governmental Authority" shall mean any government or political subdivision or any agency, authority, bureau, central bank, commission, department or instrumentality of either, or any court, tribunal, grand jury or arbitrator, in each case whether foreign or domestic. "Guaranty Equivalent": A Person (the "Deemed Guarantor") shall be deemed to subject to a Guaranty Equivalent in respect of any obligation (the "Assured Obligation") of another Person (the "Deemed Obligor") if the Deemed Guarantor directly or indirectly guarantees, A-9 180 becomes surety for, endorses, assumes, agrees to indemnify the Deemed Obligor against, or otherwise agrees, becomes or remains liable (contingently or otherwise) for, such Assured Obligation, in whole or in part. Without limitation, a Guaranty Equivalent shall be deemed to exist if a Deemed Guarantor agrees, becomes or remains liable (contingently or otherwise), directly or indirectly, to do any of the following: (a) to purchase or assume, or to supply funds for the payment, purchase or satisfaction of, an Assured Obligation, (b) to make any loan, advance, capital contribution or other investment in, or to purchase or lease any property or services from, a Deemed Obligor (i) to maintain the solvency of the Deemed Obligor, (ii) to enable the Deemed Obligor to meet any other financial condition, (iii) to enable the Deemed Obligor to satisfy any Assured Obligation or to make any Stock Payment or any other payment, or (iv) to assure the holder of such Assured Obligation against loss, (c) to purchase or lease property or services from the Deemed Obligor regardless of the non-delivery of or failure to furnish of such property or services, (d) in a transaction having the characteristics of a take-or-pay or throughput contract or as described in paragraph 6 of FASB Statement of Financial Accounting Standards No. 47, or (e) in respect of any other transaction the effect of which is to assure the payment or performance (or payment of damages or other remedy in the event of nonpayment or nonperformance) in whole or in part of any Assured Obligation. "ICV" shall mean ICV Limited, a Corporation incorporated under the Laws of England and Wales. "ICV Notes" shall have the meaning given that term in Section 7.03(c) hereof. "Indebtedness" of a Person shall mean the following: (a) all obligations on account of money borrowed by, or credit extended to or on behalf of, or for or on account of deposits with or advances to, such Person; (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments; (c) all obligations of such Person for the deferred purchase price of property or services; (d) all obligations secured by a Lien on property owned by such Person (whether or not assumed), and all obligations of such Person under Capitalized Leases (without regard to any limitation of the rights and remedies of the holder of such Lien or the lessor under such Capitalized Lease to repossession or sale of such property); (e) the stated amount of all letters of credit issued for the account of such Person and, without duplication, the unreimbursed amount of all drafts drawn thereunder, and all other obligations of such Person associated with such letters of credit or draws thereon; (f) all obligations of such Person in respect of acceptances or similar obligations issued for the account of such Person; (g) all obligations of such Person under a product financing or similar arrangement described in paragraph 8 of FASB Statement of Accounting Standards No. 49 or any similar requirement of GAAP; (h) all obligations of such Person under any interest rate or currency swap, cap, floor, collar, future, forward or option agreement, or other interest rate or currency protection agreement; and (i) the maximum fixed repurchase price of any Disqualified Capital Stock of such Person. "Interest Rate Hedging Agreement" shall mean an interest rate swap, cap or collar agreement. "Law" shall mean any law (including common law), constitution, statute, treaty, convention, regulation, rule, ordinance, order, injunction, writ, decree or award of any Governmental Authority. A-10 181 "Late Maturity Tranche" shall have the meaning given that term in Section 2.03(b)(ii) hereof. "Lender" shall mean any of the Lenders listed on the signature pages hereof, subject to the provisions of Section 10.14 hereof pertaining to Persons becoming or ceasing to be Lenders. "Lender Indemnified Parties" shall have the meaning given that term in Section 10.06(c) hereof. "Lender Parties" shall mean the Lenders and the Agent. "Lien" shall mean any mortgage, deed of trust, pledge, lien, security interest, charge or other encumbrance or security arrangement of any nature whatsoever, including but not limited to any conditional sale or title retention arrangement, and any assignment, deposit arrangement or lease intended as, or having the effect of, security. "Loan" and "Loans" are synonymous with "Term Loan" and "Term Loans," respectively. "Loan Documents" shall mean this Agreement, the Notes, the Transfer Supplements, the Shared Security Documents and the Origination Fee Letter. "Loan Obligations" shall mean the "Term Loan Obligations" as defined in the Collateral Agency Agreement. "London Business Day" shall mean a day for dealing in deposits in Dollars by and among banks in the London interbank market and which is a Business Day. "Material Adverse Effect" shall mean: (a) a material adverse effect on the business, operations, condition (financial or otherwise) or prospects of the Borrower and its Subsidiaries, taken as a whole, (b) a material adverse effect on the ability of the Borrower to perform or comply with any of the terms and conditions of any Loan Document, or (c) an adverse effect on the legality, validity, binding effect, enforceability or admissibility into evidence of any Loan Document, or the ability of the Collateral Agent or any Lender Party to enforce any rights or remedies under or in connection with any Loan Document. "Maturity Tranche" shall have the meaning given that term in Section 2.03(b)(ii) hereof. "Multiemployer Plan" shall mean any employee benefit plan which is a "multiemployer plan" within the meaning of Section 4001(a)(3) of ERISA and to which the Borrower, any Subsidiary of the Borrower or any other Controlled Group Member has or had an obligation to contribute. "Net Sale Proceeds" shall have the meaning given that term in Section 2.07(b) hereof. "Note" and "Notes" are synonymous with "Term Loan Note" and "Term Loan Notes," respectively. A-11 182 "Note Backup Agreement" shall mean the Note Backup Agreement of even date herewith by and among the Borrower, the lenders parties thereto from time to time, the issuing bank referred to therein, and Mellon Bank, N.A., as Agent, as the same may be amended, modified or supplemented from time to time in accordance with this Agreement. "Note Backup Final Expiration Date" shall mean the final scheduled maturity of Indebtedness under the Note Backup Agreement (being the later of (i) the latest expiration date permitted under the Note Backup Credit Agreement for letters of credit issued thereunder, or (ii) the final scheduled maturity of the Borrower's reimbursement obligation under the Note Backup Agreement). "Notional Euro-Rate Funding Office" shall have the meaning given to that term in Section 2.12(a) hereof. "Obligations" shall have the meaning given that term in the Collateral Agency Agreement. "Office," when used in connection with the Agent, shall mean its office located at One Mellon Bank Center, Pittsburgh, Pennsylvania 15258, or at such other office or offices of the Agent or any branch, subsidiary or affiliate thereof as may be designated in writing from time to time by the Agent to the Borrower. "Option" shall mean the Base Rate Option or the Euro-Rate Option. "Origination Fee Letter" shall have the meaning given that term in Section 5.01(t) hereof. "Participants" shall have the meaning set forth in Section 10.14(b) hereof. "PBGC" means the Pension Benefit Guaranty Corporation established under Title IV of ERISA or any other governmental agency, department or instrumentality succeeding to the functions of said corporation. "Pension-Related Event" shall mean any of the following events or conditions: (a) Any action is taken by any Person (i) to terminate, or which would result in the termination of, a Plan pursuant to the distress termination provisions of Section 4041(c) of ERISA or (ii) to have a trustee appointed for a Plan pursuant to Section 4042 of ERISA; (b) PBGC notifies any Person of its determination that an event described in Section 4042 of ERISA has occurred with respect to a Plan, that a Plan should be terminated, or that a trustee should be appointed for a Plan; (c) Any Reportable Event occurs with respect to a Plan; A-12 183 (d) Any action (other than becoming obligated to contribute to a Multiemployer Plan) occurs or is taken which could result in the Borrower, any Subsidiary of the Borrower or any Controlled Group Member becoming subject to liability for a complete or partial withdrawal by any Person from a Multiemployer Plan (including, without limitation, seller liability incurred under Section 4204(a)(2) of ERISA), or the Borrower, any Subsidiary of the Borrower or any Controlled Group Member receives from any Multiemployer Plan a notice or demand for payment on account of any such alleged or asserted liability; (e) (i) There occurs any failure to meet the minimum funding standard under Section 302 of ERISA or Section 412 of the Code with respect to a Plan, or any tax return is filed showing any tax payable under Section 4971(a) of the Code with respect to any such failure, or the Borrower, any Subsidiary of the Borrower or any Controlled Group Member receives a notice of deficiency from the Internal Revenue Service with respect to any alleged or asserted such failure, (ii) any request is made by any Person for a variance from the minimum funding standard, or an extension of the period for amortizing unfunded liabilities, with respect to a Plan, or (iii) the Borrower, any Subsidiary of the Borrower or any Controlled Group Member fails to pay the PBGC premium with respect to a Plan when due and it remains unpaid for more than 30 days thereafter; or (f) There occurs any "prohibited transaction" within the meaning of Section 406 of ERISA or Section 4975 of the Code involving a Plan. "Permitted Liens" shall have the meaning given that term in Section 7.02 hereof. "Permitted Mergers" shall have the meaning given that term in Section 7.08 hereof. "Person" shall mean an individual, Corporation, partnership, trust, limited liability company, unincorporated association, joint venture, joint-stock company, Governmental Authority or any other entity. "Plan" shall mean (a) any employee pension benefit plan within the meaning of Section 3(2) of ERISA covered by Title IV of ERISA by reason of Section 4021 of ERISA, of which the Borrower, any Subsidiary of the Borrower or any Controlled Group Member is or has been within the preceding five years a "contributing sponsor" within the meaning of Section 4001(a)(13) of ERISA, or which is or has been within the preceding five years maintained for employees of the Borrower, any Subsidiary of the Borrower or any Controlled Group Member and (b) any employee pension benefit plan within the meaning of Section 3(2) of ERISA which is subject to Title I of ERISA by reason of Section 4 of ERISA and is subject to the minimum funding requirements of Section 302 of ERISA or Section 412 of the Code, of which the Borrower, any Subsidiary of the Borrower or any Controlled Group Member is or has been within the preceding five years an employer liable for contributions within the meaning of Section 302(c)(11) of ERISA or Section 412(c)(11) of the Code, or which is or has been within the preceding five years maintained for employees of the Borrower, any Subsidiary of the Borrower or any Controlled Group Member. "Portion" shall mean the Prime Rate Portion or the Euro-Rate Portion. A-13 184 "Postretirement Benefits" of a Person shall mean any benefits, other than retirement income, provided by such Person to retired employees, or to their spouses, dependents or beneficiaries, including, without limitation, group medical insurance or benefits, or group life insurance or death benefits. "Postretirement Benefit Obligation" of a Person shall mean that portion of the actuarial present value of all Postretirement Benefits expected to be provided by such Person which is attributable to employees' service rendered to the date of determination (assuming that such liability accrues ratably over an employee's working life to the earlier of his date of retirement or the date on which the employee would first become eligible for full benefits), reduced by the fair market value as of the date of determination of any assets which are segregated from the assets of such Person and which have been restricted so that they cannot be used for any purpose other than to provide Postretirement Benefits or to defray related expenses. "Potential Default" shall mean any event or condition which with notice, passage of time or a determination by the Agent or the Lenders, or any combination of the foregoing, would constitute an Event of Default. "Primark Economics" shall mean Primark Decision Economics, Inc. "Prime Rate" as used herein, shall mean the interest rate per annum announced from time to time by Mellon Bank, N.A. as its prime rate, such rate to change automatically effective as of the effectiveness of each announced change in such prime rate. "Pro Rata" shall mean from or to each Lender in proportion to such Lender's applicable Commitment Percentage. "Purchasing Lender" shall have the meaning set forth in Section 10.14(c) hereof. "Recapture Asset Amount" shall have the meaning given that term in Section 2.07(b) hereof. "Recapture Asset Disposition" shall have the meaning given that term in Section 2.07(b) hereof. "Register" shall have the meaning set forth in Section 10.14(d) hereof. "Regular Monthly Payment Date" shall mean the last Business Day of each month after the Closing Date. "Regular Quarterly Payment Date" shall mean the last Business Day of each September, December, March and June after the Closing Date. "Reportable Event" means (i) a reportable event described in Section 4043 of ERISA and regulations thereunder, (ii) a withdrawal by a substantial employer from a Plan to which more than one employer contributes, as referred to in Section 4063(b) of ERISA, (iii) a cessation of operations at a facility causing more than twenty percent (20%) of Plan participants to be A-14 185 separated from employment, as referred to in Section 4062(e) of ERISA, or (iv) a failure to make a required installment or other payment with respect to a Plan when due in accordance with Section 412 of the Code or Section 302 of ERISA which causes the total unpaid balance of missed installments and payments (including unpaid interest) to exceed $250,000. "Required Lenders" shall mean Lenders holding in the aggregate 51% of the Commitment Percentages. "Responsible Officer" of a Person shall mean its Chairman of the Board, President, Chief Financial Officer or Treasurer. "Revolving Credit Agreement" shall mean the Revolving Credit Agreement of even date herewith by and among the Borrower, the lenders parties thereto from time to time, the issuing banks referred to therein, and Mellon Bank, N.A., as Agent, as the same may be amended, modified, supplemented, renewed or refinanced from time to time in accordance with this Agreement. "Revolving Credit Maturity Date" shall mean the final scheduled maturity of Indebtedness under the Revolving Credit Agreement. "Scheduled Maturity Date" shall have the meaning given that term in Section 2.01(d) hereof. "Secured Parties" shall have the meaning given that term in the Collateral Agency Agreement. "Senior Note Indenture" shall mean the Indenture dated as of October 18, 1993 between the Borrower and The First National Bank of Boston, as Trustee, relating to the Senior Notes, as constituted on the Closing Date. "Senior Notes" shall mean the Borrower's 8 3/4% Senior Notes Due 2000. "Shared Collateral" shall have the meaning given that term in the Collateral Agency Agreement. "Shared Collateral Account" shall have the meaning given that term in the Collateral Agency Agreement. "Shared Security Documents" shall have the meaning given that term in the Collateral Agency Agreement. "Shares of Capital Stock" shall mean shares of capital stock of, membership interest in, beneficial interest in, or similar ownership interest in, a Corporation organized under the Laws of any state of the United States or any other jurisdiction, including, without limitation, in the case of Corporations incorporated under the Laws of England and Wales, equity share capital, ordinary shares and loan stock. A-15 186 "Significant Subsidiary" of Borrower shall mean any Subsidiary of the Borrower (a) which is TASC, Datastream, Disclosure Incorporated, or a Subsidiary of any of the foregoing, (b) which, together with its Subsidiaries, has assets (determined on a consolidated basis) greater than or equal to 5% of the total assets of the Borrower and its Subsidiaries (determined on a consolidated basis) as of the end of the most recently completed fiscal year for which financial information is available, or (c) which, together with its Subsidiaries, has revenues (determined on a consolidated basis) greater than or equal to 5% of the total revenues of the Borrower and its Subsidiaries (determined on a consolidated basis) for the most recent four fiscal quarters for which financial information is available. "Solvent" means: (a) with respect to any Person organized under the Laws of any state of the United States or subject to the U.S. Bankruptcy Code of 1978, as amended, the Uniform Fraudulent Conveyance Act as enacted by any state, the Uniform Fraudulent Transfer Act as enacted by any state or any other applicable U.S. Law pertaining to fraudulent conveyances, fraudulent transfers or preferences at any time, that at such time (i) the sum of the debts and liabilities (including, without limitation, contingent liabilities) of such Person is not greater than all of the assets of such Person at a fair valuation, (ii) the present fair salable value of the assets of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become absolute and matured, (iii) such Person has not incurred, will not incur, does not intend to incur, and does not believe that it will incur, debts or liabilities (including, without limitation, contingent liabilities) beyond such person's ability to pay as such debts and liabilities mature, (iv) such Person is not engaged in, and is not about to engage in, a business or a transaction for which such person's property constitutes or would constitute unreasonably small capital (as such term is used in any Law referred to in the following clause (v)), and (v) such Person is not otherwise insolvent as defined in, or otherwise in a condition which could in any circumstances then or subsequently render any transfer, conveyance, obligation or act then made, incurred or performed by it avoidable or fraudulent pursuant to, any Law that may be applicable to such Person pertaining to bankruptcy, insolvency or creditors' rights (including but not limited to the Bankruptcy Code of 1978, as amended, and, to the extent applicable to such Person, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act, or any other applicable Law pertaining to fraudulent conveyances or fraudulent transfers or preferences); (b) With respect to any Person organized under the Laws of England and Wales or subject to any English insolvency law at any time, that at such time such Person is not insolvent, or unable to pay its debts and is not deemed by an English court to be unable to pay its debts within the meaning of Section 123 of the United Kingdom Insolvency Act of 1986; and (c) With respect to any other Person, that at such time such Person is not insolvent or unable to pay its debts as they come due as contemplated by any applicable insolvency, bankruptcy or similar Law. A-16 187 "Standard Notice" shall mean an irrevocable notice provided to the Agent on a Business Day which is (a) At least one Business Day in advance in the case of selection of, conversion to or renewal of the Base Rate Option or prepayment of any Base Rate Portion; and (b) At least three London Business Days in advance in the case of selection of the Euro-Rate Option or prepayment of any Euro-Rate Portion. Standard Notice must be provided no later than 10:00 a.m., Pittsburgh time, on the last day permitted for such notice. "Stock Payment" by any Person shall mean any dividend, distribution or payment of any nature (whether in cash, securities, or other property) on account of or in respect of any Shares of the Capital Stock (or warrants, options or rights therefor) of such Person, including but not limited to any payment on account of the purchase, redemption, retirement, defeasance or acquisition of any Shares of the Capital Stock (or warrants, options or rights therefor) of such Person, in each case regardless of whether required by the terms of such capital stock (or warrants, options or rights) or any other agreement or instrument. "Subsidiary" of a Person at any time shall mean any Corporation of which a majority (by number of shares or number of votes) of the outstanding Shares of Capital Stock of any class is at such time owned directly or indirectly, beneficially or of record, by such Person or one or more Subsidiaries of such Person, and any partnership, trust or other Person of which a majority of any class of outstanding equity interest is at such time owned directly or indirectly, beneficially or of record, by such Person or one or more Subsidiaries of such Person. For the avoidance of doubt, as used in the preceding sentence "majority" means more than half (and not precisely half). "Substantially Owned Subsidiary" of a Person at any time shall mean any Corporation of which 80% or more of the outstanding Shares of Capital Stock of each class are at such time beneficially owned directly or indirectly by such Person (both on the basis of outstanding shares and on a fully diluted basis). "Swap Agreement" shall have the meaning given that term in the Collateral Agency Agreement. "TASC" shall mean TASC, Inc., a Massachusetts Corporation. "Taxes" shall have the meaning set forth in Section 2.11 hereof. "Term Loan" shall have the meaning set forth in Section 2.01(a) hereof, and "Term Loans" shall mean the Term Loans of the Lenders collectively. "Term Loan Agreement" shall mean this Term Loan Agreement as amended, modified or supplemented from time to time (and is synonymous with references to "this Agreement" herein). A-17 188 "Term Loan Commitment" shall have the meaning set forth in Section 2.01(a) hereof. "Term Loan Committed Amount" shall have the meaning set forth in Section 2.01(a) hereof. "Term Loan Maturity Date" shall mean the last Business Day of June 2004. "Term Loan Notes" shall mean the promissory notes of the Borrower executed and delivered under Section 2.01(c) hereof and any promissory note issued in substitution therefor pursuant to Sections 2.12(b) or 10.14(c) hereof. "TIMCO" shall mean Triad International Maintenance Corporation, a Delaware Corporation. "TIMCO Bond Order" means the Bond Order adopted by the Piedmont Triad Airport Authority on October 31, 1989 with respect to the TIMCO Bonds, as such Bond Order may be amended, supplemented or otherwise modified from time to time in accordance with this Agreement. "TIMCO Bonds" means the $13,800,000 original aggregate principal amount of Special Facility Revenue Bonds (Triad International Maintenance Corporation Project), Series 1989 issued by the Piedmont Triad Airport Authority pursuant to the TIMCO Bond Order. "TIMCO Bonds Letter of Credit" has the meaning given that term in Section 7.03(j) hereof. "TIMCO Lease" shall mean the Lease Agreement, dated as of November 1, 1989, between the Piedmont Triad Airport Authority, as lessor, and TIMCO, as lessee, covering certain property situate at the Piedmont Triad International Airport in Guilford County, North Carolina, as such Lease Agreement may be amended, supplemented or otherwise modified from time to time in accordance with this Agreement. "Transfer Effective Date" shall have the meaning set forth in the applicable Transfer Supplement. "Transfer Supplement" shall have the meaning set forth in Section 10.14(c) hereof. "Wholly Owned Subsidiary" of any Person means a Corporation that is a Subsidiary of such Person as to which all of the Shares of Capital Stock of each class (other than directors' qualifying shares that are required under applicable law) are at such time beneficially owned directly or indirectly by such Person (both on the basis of outstanding shares and on a fully diluted basis). "Wind-up" or "Winding-up" of a Person shall include the liquidation, administration, amalgamation, reconstruction, reorganization or dissolution of such Person and any equivalent or analogous procedure under the laws of any jurisdiction in which such Person is incorporated, domiciled, resident or carries on a business or has assets. A-18 189 "Worldscope Entities" shall mean Worldscope/Disclosure Partners, a Connecticut general partnership, Worldscope/Disclosure International Partners, an partnership organized under the laws of Ireland, Worldscope/Disclosure Incorporated LLC, a Connecticut limited liability company, and Worldscope/Disclosure India Pvt. Ltd., a Corporation organized under the laws of India, and each of their respective Subsidiaries from time to time. 1.02. CONSTRUCTION. In this Agreement and each other Loan Document, unless the context otherwise clearly requires, references to the plural include the singular, the singular the plural and the part the whole; "or" has the inclusive meaning represented by the phrase "and/or;" and the terms "property" and "assets" each includes all properties and assets of any kind or nature, tangible or intangible, real, personal or mixed, now existing or hereafter acquired. The words "hereof," "herein" and "hereunder" (and similar terms) in this Agreement or any other Loan Document refer to this Agreement or such other Loan Document, as the case may be, as a whole and not to any particular provision of this Agreement or such other Loan Document. The words "includes" and "including" (and similar terms) in this Agreement or any other Loan Document mean "includes without limitation" and "including without limitation," respectively (and similarly for similar terms). References in this Agreement or any other Loan Document to "determination" (and similar terms) by the Agent or by any Lender include good faith estimates by the Agent or by such Lender (in the case of quantitative determinations) and good faith beliefs by the Agent or by such Lender (in the case of qualitative determinations). No doctrine of construction of ambiguities in agreements or instruments against the interests of the party controlling the drafting thereof shall apply to this Agreement or any other Loan Document. The section and other headings contained in this Agreement and in each other Loan Document, and any tables of contents contained herein or therein, are for reference purposes only and shall not affect the construction or interpretation of this Agreement or such other Loan Document in any respect. Section, subsection, annex, exhibit and schedule references in this Agreement and in each other Loan Document are to this Agreement or such other Loan Document, as the case may be, unless otherwise specified. Each annex, exhibit and schedule to this Agreement or any other Loan Document constitutes part of this Agreement or such Loan Document, as the case may be. Each of the covenants, terms and provisions of this Agreement and the other Loan Documents is intended to have, and shall have, independent effect, and compliance with any particular covenant, term or provision shall not constitute compliance with any other covenant, term or provision. 1.03. ACCOUNTING PRINCIPLES. (a) GAAP. As used herein, "GAAP" shall mean generally accepted accounting principles in the United States, applied on a basis consistent with the principles used in preparing the Borrower's financial statements as of December 31, 1995, and for the fiscal year then ended, as referred to in Section 4.06 hereof. (b) ACCOUNTING AND FINANCIAL DETERMINATIONS, ETC. Except as otherwise provided in this Agreement, all computations and determinations as to accounting or financial matters shall be made, and all financial statements to be delivered pursuant to this Agreement shall be prepared, in accordance with GAAP (including principles of consolidation where appropriate), and all accounting or financial terms shall have the meanings ascribed to such terms by GAAP. (c) CHANGES. If and to the extent that the financial statements generally prepared by the Borrower apply accounting principles other than GAAP, all financial statements referred to in this Agreement or any other Loan Document shall be delivered in duplicate, one set based on the accounting A-19 190 principles then generally applied by the Borrower and one set based on GAAP. To the extent this Agreement or such other Loan Document requires financial statements to be accompanied by an opinion of independent accountants, each such set of financial statements shall be accompanied by such an opinion. [End of Annex A] A-20 191 Exhibit 10.18 - - -------------------------------------------------------------------------------- - - -------------------------------------------------------------------------------- PLEDGE AGREEMENT dated as of February 7, 1997 made by PRIMARK CORPORATION, as Grantor, in favor of MELLON BANK, N.A., as Collateral Agent - - -------------------------------------------------------------------------------- - - -------------------------------------------------------------------------------- 192 TABLE OF CONTENTS
SECTION TITLE PAGE ARTICLE I DEFINITIONS 1.01 Definitions.................................................................... 2 1.02 UCC Definitions................................................................ 2 ARTICLE II THE SECURITY 2.01 Grant of Security ............................................................. 2 2.02 Grantor Remains Liable......................................................... 3 2.03 Continuing Agreement........................................................... 3 2.04 Release........................................................................ 3 ARTICLE III REPRESENTATIONS AND WARRANTIES 3.01 Title.......................................................................... 4 3.02 Validity, Perfection and Priority.............................................. 4 3.03 Governmental Approvals and Filings............................................. 4 3.04 Offices, etc................................................................... 4 3.05 Names, etc..................................................................... 4 3.06 Certain Receivables............................................................ 5 3.07 Compliance with Laws, etc...................................................... 5 3.08 Designated Collateral.......................................................... 5 ARTICLE IV COVENANTS 4.01 Books and Records; Inspection.................................................. 5 4.02 Transfers and Other Liens, etc................................................. 5 4.03 Change in Name, etc............................................................ 6 4.04 Certain Covenants Relating Primarily to Subsidiary Receivables.................................................... 6 4.05 Certain Covenants Relating Primarily to Security Collateral....................................................... 7 4.06 Further Assurances............................................................. 8 ARTICLE V CERTAIN RIGHTS AND REMEDIES OF THE SECURED PARTIES 5.01 Collateral Agent May Perform................................................... 8 5.02 No Duty to Exercise Powers..................................................... 9 5.03 Duties of Collateral Agent..................................................... 9 5.04 Power of Attorney.............................................................. 9 5.05 Certain Remedies............................................................... 9 5.06 Application of Payments........................................................ 10
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ARTICLE VI MISCELLANEOUS 6.01 Amendments, etc................................................................ 11 6.02 No Implied Waiver; Remedies Cumulative......................................... 11 6.03 Notices........................................................................ 11 6.04 Indemnity and Expenses......................................................... 11 6.05 Entire Agreement............................................................... 11 6.06 Survival....................................................................... 11 6.07 Counterparts................................................................... 11 6.08 Construction................................................................... 12 6.09 Successors and Assigns......................................................... 12 6.10 Certain Legal Matters.......................................................... 12
Schedule 3.04 Location of Offices, etc. Schedule 3.05 Names, etc. Schedule 3.08 Designated Collateral PLEDGE AGREEMENT THIS AGREEMENT, dated as of February 7, 1997 made by PRIMARK CORPORATION, a Michigan Corporation (the "Grantor"), in favor of MELLON BANK, N.A., as Collateral Agent under the Collateral Agency Agreement referred to below (in such capacity, together with its successors, the "Collateral Agent") for the Secured Parties (as defined in the Collateral Agency Agreement). RECITALS: A. The Grantor has entered into a Revolving Credit Agreement of even date herewith (the "Revolving Credit Agreement", as more fully defined in the Collateral Agency Agreement) with the lenders from time to time parties thereto, the issuing banks referred to therein, and Mellon Bank, N.A., as Agent (together with its successors, the "Revolving Credit Agent", as more fully defined in the Collateral Agency Agreement). The Grantor also has entered into a Term Loan Agreement of even date herewith (the "Term Loan Agreement", as more fully defined in the Collateral Agency Agreement) with the lenders from time to time parties thereto, and Mellon Bank, N.A., as Agent (together with its successors, the "Term Loan Agent", as defined in the Collateral Agency Agreement). The Grantor also has entered into a Note Backup Agreement of even date hereunder (the "Note Backup Agreement", as more fully defined in the Collateral Agency Agreement) with the lenders from time to time parties thereto, the issuing bank referred to therein, and Mellon Bank, N.A., as Agent (together with its successors, the "Note Backup Agent", as defined in the Collateral Agency Agreement). B. The Grantor, certain "Revolving Credit Parties", by Mellon Bank, N.A., as Revolving Credit Agent, certain "Term Loan Parties", by Mellon Bank, N.A., as Term Loan Agent, certain "Note Backup Parties", by Mellon Bank, N.A., as Note Backup Agent, and the Collateral Agent, have entered into a Collateral Agency Agreement of even date herewith (as amended, modified or supplemented from time to time, the "Collateral Agency Agreement"). Pursuant to the Collateral Agency Agreement, the Collateral Agent has agreed to serve as the collateral agent of the Secured -iii- 194 Parties with respect to certain security (including the security granted by this Agreement) for obligations of the Grantor to such Secured Parties, including obligations under or in connection with the Revolving Credit Agreement, the Term Loan Agreement and the Note Backup Agreement. C. It is a condition precedent to the extension of credit under the Revolving Credit Agreement and the Term Loan Agreement that the Grantor execute and deliver this Agreement. This Agreement is made by the Grantor among other things to induce the Revolving Credit Parties to enter into the Revolving Credit Agreement and to extend credit pursuant thereto, and to induce the Term Loan Parties to enter into the Term Loan Agreement and to extend credit pursuant thereto, and to induce the Note Backup Parties to enter into the Note Backup Agreement and to extend credit pursuant thereto. D. This Agreement is a "Shared Security Document" as provided in the Collateral Agency Agreement. NOW, THEREFORE, in consideration of the premises, and intending to be legally bound, the Grantor hereby agrees as follows: ARTICLE I DEFINITIONS 1.01. DEFINITIONS. Capitalized terms not otherwise defined herein shall have the meanings given in the Collateral Agency Agreement. In addition to the other terms defined elsewhere in this Agreement, as used herein the following terms shall have the following meanings: "Designated Collateral" shall mean the Shares of Capital Stock, other securities and investment property, promissory notes and other instruments, chattel paper and negotiable documents identified in Schedule 3.08. "Distributions" shall mean all property, rights and interests of any kind or nature (whether cash, securities or other) from time to time received, receivable or otherwise distributed with respect to or in exchange for any Security Collateral, including without limitation all cash, securities or other property received or receivable as dividends, or as a result of any stock splits, reclassifications, mergers or consolidations, or as any other distributions (whether similar or dissimilar to the foregoing), or as a result of exercise of any options, warrants or rights included in or associated with any Security Collateral, or as principal, interest or premium. "UCC" shall mean the Uniform Commercial Code as in effect in the Commonwealth of Pennsylvania from time to time. 1.02. UCC DEFINITIONS. Unless otherwise defined herein, terms defined in Article 8 or Article 9 of the UCC shall have the same meanings in this Agreement. ARTICLE II THE SECURITY -4- 195 2.01. GRANT OF SECURITY. As security for the full and timely payment and performance of the Obligations, the Grantor hereby assigns and pledges to the Collateral Agent for the benefit of the Secured Parties, and grants to the Collateral Agent for the benefit of the Secured Parties a security interest in, all right, title and interest of the Grantor in, to and under the following, whether now or hereafter existing or acquired (the "Collateral"): (a) all of the following (collectively, the "Security Collateral"): (i) the Designated Collateral, (ii) all other Shares of Capital Stock in any Person which at any time is or was a Subsidiary of the Grantor, (iii) all other Shares of Capital Stock and all other securities of any kind or nature (certificated or uncertificated), and all other investment property of any kind or nature, and (iv) all Distributions; (b) all obligations from time to time of any Person which at any time is or was (i) an issuer of any Designated Collateral, (ii) a Subsidiary of the Grantor (direct or indirect), or (iii) an issuer of any Security Collateral, in each case of any kind or nature, whether such obligations constitute accounts, contract rights, chattel paper, instruments, documents, general intangibles or otherwise, and whether such obligations are direct or indirect, secured or unsecured, joint or several, absolute or contingent, due or to become due, for payment or performance, now existing or hereafter arising; together with all rights of the Grantor now or hereafter existing in and to all security agreements, guaranties, leases and other contracts securing or otherwise relating to any such obligations (such obligations being referred to collectively as the "Subsidiary Receivables", and such security agreements, guaranties, leases and other contracts being referred to collectively as the "Related Contracts"); (c) the Shared Collateral Account and all other accounts (custodial, deposit or other) maintained by or with the Collateral Agent pursuant to the Shared Security Documents, and all cash, securities, instruments, investment property and other property from time to time held in any of the foregoing, and all interest, dividends, cash, securities, instruments, investment property and other property from time to time received, receivable or otherwise distributed in respect of or in exchange for any of the foregoing; and (d) all proceeds of any of the foregoing (including, without limitation, proceeds which constitute property of the types described in the foregoing clauses (a) through (c)). Notwithstanding the foregoing, Shares of Capital Stock in HealthQual Systems Corporation and Westmark Group Holdings, Inc. shall not be deemed Collateral hereunder unless and until the Collateral Agent, in its sole discretion, elects to give notice to the Borrower that it desires such Shares of Capital Stock to constitute Collateral hereunder. All Collateral hereunder constitutes "Shared Collateral", as such term is used in the Collateral Agency Agreement. -5- 196 2.02. GRANTOR REMAINS LIABLE. Notwithstanding anything to the contrary herein or in any other Secured Party Document, (a) the Grantor shall remain liable under the contracts and agreements included in the Collateral to the extent set forth therein to perform all of its duties and obligations thereunder to the same extent as if this Agreement had not been executed, (b) the exercise by any Secured Party of any rights or remedies under or in connection with this Agreement or any other Secured Party Document shall not release the Grantor from any of its duties or obligations under the contracts and agreements included in the Collateral, and (c) the Secured Parties shall not have any obligation or liability under the contracts and agreements included in the Collateral by reason of this Agreement or any other Secured Party Document, nor shall any Secured Party be obligated to perform any of the obligations or duties of the Grantor thereunder or to take any action to collect or enforce any claim for payment assigned hereunder. 2.03. CONTINUING AGREEMENT. This Agreement creates a continuing Lien in the Collateral. The Collateral Agent shall release the Liens created hereby as provided in Section 6.08 of the Collateral Agency Agreement, and upon such release the Collateral Agent will, at the Grantor's request and expense, return to the Grantor, without any representations, warranties or recourse of any kind whatsoever (except as to Liens created by the Collateral Agent), such of the Collateral as then may be held by the Collateral Agent hereunder, and execute and deliver to the Grantor such documents as the Grantor may reasonably request to evidence such termination. 2.04. RELEASE. Upon any sale, lease, transfer or other disposition of any item of Collateral in accordance with the terms of the Secured Party Documents, the Collateral Agent will, at the Grantor's expense, execute and deliver to the Grantor such documents as the Grantor may reasonably request to release such item of Collateral from the Lien granted hereby; provided, however, that (a) at the time of such request and such release no Facility Potential Default arising from failure by the Grantor to make a payment under the Secured Party Documents when due, and no Facility Event of Default, shall have occurred and be continuing, (b) the Grantor shall have delivered to the Collateral Agent and each Facility Agent, at least two Business Days prior to the date of the proposed release, a written request for release describing the item of Collateral and the term of the sale, lease, transfer or other disposition in reasonable detail, including the price thereof and any expenses in connection therewith, together with a form for release for execution by the Collateral Agent and a certification by the Grantor to the effect that the transaction is in compliance with the Secured Party Documents and as to such matters as the Collateral Agent may in good faith request, (c) no Facility Agent shall have given to the Collateral Agent prior to the proposed release a notice to the effect that the conditions set forth in this Section 2.04 have not been satisfied and specifically requesting that the Collateral Agent not effect such release, and (d) the proceeds of any such sale, lease, transfer or other disposition required to be applied in accordance with Section 2.07(b) of the Revolving Credit Agreement as constituted on the date hereof, or any successor provision of similar import, or Section 2.07(b) of the Term Loan Agreement as constituted on the date hereof, or any successor provision of similar import, shall be paid to, or in accordance with the instructions of, the Revolving Credit Agent or the Term Loan Agent, as the case may be, in accordance with the Revolving Credit Agreement and the Term Loan Agreement. ARTICLE III REPRESENTATIONS AND WARRANTIES The Grantor hereby represents and warrants to each Secured Party as follows: -6- 197 3.01. TITLE. The Grantor is the legal and beneficial owner of the Collateral, free and clear of any Lien, except for Facility Permitted Liens. No effective financing statement or other item similar in effect covering any Collateral is on file in any recording office, except for filings with respect to Facility Permitted Liens covering only Collateral subject to such Facility Permitted Liens. 3.02. VALIDITY, PERFECTION AND PRIORITY. This Agreement creates a valid assignment of and security interest in the Collateral in favor of the Collateral Agent securing the Obligations, which assignment and security interest has been duly perfected and is prior to all other Liens except Facility Permitted Liens. All filings and other actions necessary or desirable to perfect and protect such assignment and security interest in favor of the Collateral Agent have been duly made and taken. 3.03. GOVERNMENTAL APPROVALS AND FILINGS. No authorization, approval or other action by, and no notice to or filing with, any Governmental Authority is or will be necessary (a) for the grant by the Grantor of the assignment of and security interest in the Collateral hereunder or for the execution, delivery or performance of this Agreement by the Grantor, (b) to ensure the validity, perfection or priority of the assignment of and security interest in the Collateral granted hereunder, or (c) for the exercise by the Collateral Agent of any of its rights or remedies hereunder, except for (y) the filing of UCC financing statements and continuation statements in appropriate jurisdictions, and (z) completion of such actions as may be required in connection with any disposition of Collateral constituting securities by Laws affecting the offering and sale of securities generally. 3.04. OFFICES, ETC. Schedule 3.04 identifies as of the date hereof the address of the chief executive office of the Grantor, of each office (whether maintained by the Grantor or otherwise) where books and records relating to the Collateral are kept, and of each place of business of the Grantor. Schedule 3.04 also identifies all changes in the foregoing information during the one year period ending on the date hereof. 3.05. NAMES, ETC. During the one year period ending on the date hereof, neither the Grantor nor any of its direct or indirect predecessors by merger, consolidation or other corporate reorganization is or has been known by or used any corporate or fictitious name or trade name (other than the corporate name of the Grantor as of the date hereof), nor has the Grantor or any such predecessor been the subject of any merger, consolidation or other corporate reorganization, nor has the Grantor or any such predecessor otherwise changed its name, identity or corporate structure, except as set forth in Schedule 3.05. For each such direct and indirect predecessor of the Grantor, Schedule 3.05 also identifies the addresses referred to in Section 3.04 for all times during such period. 3.06. CERTAIN RECEIVABLES. The Grantor has delivered to the Collateral Agent possession of all originals of all promissory notes or other instruments, chattel paper and negotiable documents constituting Collateral. 3.07. COMPLIANCE WITH LAWS, ETC. The Grantor is in compliance with all laws, the noncompliance with which might have a material adverse effect on the value of any material portion of the Collateral or the value of the Lien in favor of the Collateral Agent under this Agreement in any material portion of the Collateral. 3.08. DESIGNATED COLLATERAL. The Designated Collateral includes (i) all of the securities and other investment property (including all Shares of Capital Stock) directly owned by the Grantor as of the date hereof, except for items constituting Cash Equivalent Investments, and (ii) all of the promissory notes or other instruments, chattel paper or other documents directly owned by the -7- 198 Grantor as of the date hereof issued by a Subsidiary (direct or indirect) of the Grantor. Schedule 3.08 sets forth (a) for each item of Designated Collateral constituting Shares of Capital Stock, a description of such Shares of Capital Stock and the total number of issued and outstanding shares of such class and the percentage of such total number of issued and outstanding shares represented by the Designated Collateral, and (b) for each item of Designated Collateral other than Shares of Capital Stock, a description of such item. The Grantor owns the Designated Collateral beneficially and of record, free and clear of any Lien. The Designated Collateral constituting Shares of Capital Stock have been duly authorized and validly issued and are fully paid and nonassessable, and the Designated Collateral constituting obligations constitute the legal, valid, binding and enforceable obligation of the issuer thereof. ARTICLE IV COVENANTS 4.01. BOOKS AND RECORDS; INSPECTION. Subject to mandatory national security regulations, the Grantor shall (a) keep complete and accurate books and records concerning the Collateral and, at the request of any Secured Party from time to time, permit such Secured Party or its representatives to inspect and copy such books and records, (b) at the request of any Secured Party from time to time, permit such Secured Party or its representatives to inspect any Collateral not in the possession of the Collateral Agent, and (c) furnish to the Collateral Agent such information and reports in connection with the Collateral at such times and in such form as the Collateral Agent may reasonably request. Subject to mandatory national security regulations, the Collateral Agent shall have the right to verify the Collateral from time to time. 4.02. TRANSFERS AND OTHER LIENS, ETC. (a) TRANSFERS. The Grantor shall not sell, assign, lease, transfer or otherwise dispose of any Collateral (voluntarily or involuntarily, by operation of Law or otherwise) in contravention of any provision of any other Secured Party Document (including but not limited to Section 7.09 of each of the Revolving Credit Agreement, the Term Loan Agreement and the Note Backup Agreement). (b) OTHER LIENS. The Grantor shall not create or permit to exist any Lien on any Collateral (voluntarily or involuntarily, by operation of Law or otherwise) in contravention of any provision of any other Secured Party Document (including but not limited to Section 7.02 of each of the Revolving Credit Agreement, the Term Loan Agreement and the Note Backup Agreement). (c) OTHER SHARES. The Grantor shall cause each issuer of Designated Collateral, and each other Subsidiary of the Grantor in which the Grantor directly owns (beneficially or of record) any Shares of Capital Stock, not to issue any Shares of Capital Stock or other securities, except to the Grantor. All Shares of Capital Stock and other securities of each issuer of Designated Collateral, and of each Subsidiary of the Grantor in which the Grantor owns (beneficially or of record) any Shares of Capital Stock, from time to time outstanding shall constitute Collateral, and the Grantor shall deliver to the Collateral Agent, immediately upon issuance thereof, all certificates and instruments constituting or evidencing any such Shares of Capital Stock or other securities. 4.03. CHANGE IN NAME, ETC. The Grantor shall not have, use or be known by any corporate or fictitious name or trade name (other than its corporate name as of the date hereof and names set forth in Schedule 3.05), nor be the subject of any merger, consolidation or other corporate -8- 199 reorganization, nor otherwise change its name, identity or corporate structure, except, upon 30 days' notice to the Collateral Agent (specifically referring to this Section 4.03), and after all actions referred to in Section 4.06(a) have been completed. 4.04. CERTAIN COVENANTS RELATING PRIMARILY TO SUBSIDIARY RECEIVABLES. (a) OFFICES. The Grantor shall keep its chief executive office, the offices (whether maintained by the Grantor or otherwise) where books and records relating to the Collateral are kept, and its places of business, at the respective addresses identified in Section 3.04 or, upon 30 days' notice (specifically referring to this Section 4.04(a)) to the Collateral Agent, at such other locations in jurisdictions where all actions referred to in Section 4.06(a) have been completed. The Grantor shall maintain its chief executive office in the 48 contiguous United States. (b) COLLECTION; SERVICING. Except as otherwise provided in this Section 4.04(b), the Grantor shall continue to collect, at its own expense, all amounts due or to become due the Grantor under the Subsidiary Receivables. The Collateral Agent shall have the right at any time to notify (or require the Grantor to notify) the account debtors or obligors under any Subsidiary Receivables of the Lien in favor of the Collateral Agent in the Subsidiary Receivables. In connection with such collections, the Grantor may take (and, at the Collateral Agent's direction, shall take) such action as the Grantor or the Collateral Agent may deem necessary or advisable to enforce collection of the Subsidiary Receivables; provided, however, that the Collateral Agent shall have the right at any time upon the occurrence and during the continuance of a Facility Event of Default or Facility Potential Default to direct (or require the Grantor to direct) such account debtors or obligors to make payments of all amounts due or to become due to the Grantor thereunder directly to the Collateral Agent and, upon notification by the Collateral Agent to the Grantor, and at the expense of the Grantor, to enforce collection of any such Subsidiary Receivables, and to adjust, settle or compromise the amount or payment thereof, in the same manner and to the same extent as the Grantor may have done. After receipt by the Grantor of the notice from the Collateral Agent referred to in the proviso to the preceding sentence, (i) all amounts and proceeds (including instruments) received by the Grantor in respect of the Subsidiary Receivables shall be received in trust for the benefit of the Secured Parties hereunder, shall be segregated from other funds of the Grantor and shall be forthwith paid over or delivered to the Collateral Agent in the same form as so received (with any necessary indorsement) to be held as collateral hereunder and either (A) released to the Grantor so long as no Facility Event of Default or Facility Potential Default shall have occurred and be continuing, or (B) if a Facility Event of Default or Facility Potential Default shall have occurred and be continuing, and if the Collateral Agent does not otherwise elect to release such amounts to Grantor, held by the Collateral Agent as collateral for the Obligations (or, if a Facility Event of Default shall have occurred and be continuing, applied as provided in Section 5.06), and (ii) the Grantor shall not adjust, settle or compromise the amount or payment of any Subsidiary Receivable, release wholly or partly any account debtor or obligor thereof, or allow any credit or discount thereon. 4.05. CERTAIN COVENANTS RELATING PRIMARILY TO SECURITY COLLATERAL. (a) DELIVERY OF CERTIFICATES AND INSTRUMENTS. All certificates or instruments at any time representing or evidencing any Security Collateral (other than Cash Equivalent Investments) shall be immediately delivered to and held by or on behalf of the Collateral Agent pursuant hereto, and shall be in suitable form for transfer by delivery, or shall be accompanied by instruments of transfer or assignment, duly executed in blank, all in form and substance satisfactory to the Collateral Agent. The Collateral Agent shall have the right, at any time in its discretion and without notice to the Grantor, to -9- 200 transfer to or to register in the name of the Collateral Agent or its nominee any collateral in registered form. In addition, the Collateral Agent shall have the right at any time to exchange certificates or instruments representing or evidencing Security Collateral for certificates or instruments of smaller or larger denominations. (b) VOTING RIGHTS. (i) Subject to Section 4.05(b)(ii), the Grantor shall be entitled to exercise all voting and other consensual rights pertaining to the Security Collateral; provided, that the Grantor shall not exercise or refrain from exercising any such right if such action would (A) conflict with any provision of this Agreement or any other Secured Party Document, or (B) impair the value of any Security Collateral or impair the interest or rights of the Grantor or the Collateral Agent. (ii) If a Facility Event of Default or Facility Potential Default has occurred and is continuing, the Collateral Agent may from time to time give notice to the Grantor revoking in whole or in part the rights of the Grantor under Section 4.05(b)(i). If and to the extent such notice has been given, and such Facility Event of Default or Facility Potential Default is continuing, all voting and other consensual rights pertaining to the Security Collateral shall thereupon be vested in the Collateral Agent, who shall have the sole right to exercise or refrain from exercising such rights. (iii) The Collateral Agent shall execute and deliver to the Grantor such proxies and other instruments as the Grantor may reasonably request for the purpose of enabling the Grantor to exercise the voting and other consensual rights which it is entitled to exercise pursuant to Section 4.05(b)(i). The Grantor hereby grants the Collateral Agent an irrevocable proxy, with full power of substitution, coupled with an interest, to exercise all voting and other consensual rights pertaining to the Security Collateral, exercisable if and to the extent that the Collateral Agent is entitled to exercise such rights pursuant to Section 4.05(b)(ii). All third parties are entitled to rely conclusively on a representation by the Collateral Agent that it is entitled to exercise such power of attorney. (c) DISTRIBUTIONS. (i) Subject to Section 4.05(c)(ii), the Grantor shall be entitled to receive and retain all Distributions that are paid and payable in cash. Distributions paid or payable other than in cash shall be Security Collateral, and shall be forthwith delivered to the Collateral Agent to hold as such. (ii) If a Facility Event of Default has occurred and is continuing, all rights of the Grantor to receive and retain the Distributions that it would otherwise be authorized to receive and retain pursuant to Section 4.05(c)(i) shall automatically cease, and all such rights shall thereupon vest in the Collateral Agent. Such Distributions shall be Security Collateral, and shall be forthwith delivered to the Collateral Agent and applied as provided in Section 5.06. (iii) If the Grantor receives any payment or property which it is not entitled to retain pursuant to Section 4.05(c)(i) or 4.05(c)(ii), such payment or property shall be received in trust for the benefit of the Collateral Agent, shall be segregated from other funds and property of the Grantor, and shall be forthwith delivered to the Collateral Agent as Security Collateral in the same form as so received (with any necessary endorsement). 4.06. FURTHER ASSURANCES. -10- 201 (a) GENERAL. The Grantor shall from time to time, at its expense, promptly execute and deliver all further instruments and agreements, and take all further actions that may be necessary or appropriate, or that the Collateral Agent may reasonably request, in order to perfect or protect any assignment, pledge or security interest granted or purported to be granted hereby or to enable the Collateral Agent to exercise or enforce its rights and remedies hereunder. Without limiting the generality of the foregoing, the Grantor will: (i) if any Collateral shall be evidenced by a promissory note or other instrument, chattel paper or negotiable document, immediately deliver to the Collateral Agent such promissory note or instrument or chattel paper or negotiable document, duly endorsed and accompanied by duly executed instruments of transfer or assignment, all in form and substance satisfactory to the Collateral Agent, (ii) execute and file such financing or continuation statements, or amendments thereto, and such other instruments or notices, as may be necessary or desirable, or as the Collateral Agent may reasonably request, in order to perfect and preserve the assignment, pledge or security interest granted or purported to be granted hereby, (iii) at the request of the Collateral Agent, mark conspicuously each copy of all chattel paper and negotiable documents included in the Collateral and each Related Contract and each of its records pertaining to the Collateral with a legend, in form and substance satisfactory to the Collateral Agent, indicating that such chattel paper, negotiable document, Related Contract or Collateral is subject to the security interest granted pursuant hereto, and (iv) with respect to securities accounts, commodity accounts or similar interests constituting or holding Collateral, promptly following request by the Collateral Agent obtain consent agreements from each securities intermediary, commodity intermediary or similar person, satisfactory in form and substance to the Collateral Agent, which shall include provisions giving the Collateral Agent sole dominion and control over such securities account, commodity account or other interest upon the giving of notice by the Collateral Agent to such securities intermediary, commodity intermediary or similar person (it being understood that (x) the Collateral Agent may give such notice only upon the occurrence or during the continunace of a Facility Event of Default, and (y) the Collateral Agent shall revoke such notice promptly after request by the Grantor if no Facility Event of Default is continuing). (b) FINANCING STATEMENTS, ETC. The Grantor hereby authorizes the Collateral Agent to file one or more financing or continuation statements, and amendments thereto, relating to any Collateral without the signature of the Grantor where permitted by law. A photocopy or other reproduction of this Agreement or any financing statement covering any Collateral shall be sufficient as a financing statement where permitted by law. ARTICLE V CERTAIN RIGHTS AND REMEDIES OF THE SECURED PARTIES 5.01. COLLATERAL AGENT MAY PERFORM. If the Grantor fails to perform any obligation under or in connection with this Agreement, the Collateral Agent may (but shall have no duty to) itself perform or cause performance of such obligation, and the expenses of the Collateral Agent incurred in connection therewith shall be payable by the Grantor pursuant to Section 6.04. The Collateral Agent -11- 202 may from time to time take any other action which the Collateral Agent deems necessary or appropriate for the maintenance, preservation or protection of any of the Collateral or of its Lien therein. 5.02. NO DUTY TO EXERCISE POWERS. The powers of the Collateral Agent under and in connection with this Agreement are solely to protect its interest in the Collateral and shall not impose any duty upon it to exercise any such powers. 5.03. DUTIES OF COLLATERAL AGENT. Except for exercise of reasonable care in the custody and preservation of any Collateral in its possession and accounting for moneys received by it pursuant to this Agreement, the Collateral Agent shall have no duty as to any Collateral. In any event the Collateral Agent (a) shall have no duty to take any steps to preserve rights against prior parties or any other rights pertaining to any Collateral, (b) shall have no duty as to ascertaining or taking action with respect to calls, conversions, exchanges, tenders, maturities or other matters pertaining to any Collateral, whether or not the Collateral Agent or any other Secured Party has any knowledge of such matters, and (c) shall not be liable for any action, omission, insolvency or default on the part of any agent or custodian (other than the Collateral Agent) appointed by the Collateral Agent in good faith. The Collateral Agent shall be deemed to have exercised reasonable care in the custody and preservation of Collateral in its possession if it takes such action for such purpose as the Grantor requests in writing from time to time (but failure to take any such action shall not in itself be deemed a failure to exercise reasonable care or evidence of such failure). Subject only to the performance by the Collateral Agent of its duties set forth in this Section 5.03, risk of loss, damage and diminution in value of the Collateral, of whatever nature and however caused, shall be on the Grantor. 5.04. POWER OF ATTORNEY. The Grantor hereby irrevocably appoints the Collateral Agent, with full power of substitution, to be the attorney-in-fact of the Grantor, with full authority in the place and stead of the Grantor and in the name of the Grantor or otherwise, from time to time in the Collateral Agent's discretion, to take any action and to execute any instruments and agreements which the Collateral Agent may deem necessary or advisable to accomplish the purposes of this Agreement, including the following: (a) to demand, collect, enforce, file claims for, sue for, recover, compromise, release, and take any action or institute any proceedings to collect or enforce, all rights to payments due or to become due and all other rights of the Grantor under or in connection with any Collateral, (b) to receive, endorse and collect any checks, notes or other instruments, documents, chattel paper or any other payment media in connection with the foregoing clause (a), and (c) to perform all obligations of the Grantor hereunder; provided, however, that except for taking actions referred to in Section 4.06(a), such power of attorney may be exercised only so long as a Facility Event of Default or Facility Potential Default has occurred and is continuing. Such power of attorney is irrevocable and coupled with an interest. All third parties are entitled to rely conclusively on a representation by the Collateral Agent that it is entitled to exercise such power of attorney. Promptly after exercising such power of attorney to execute and file any financing statement in the name of and on behalf of the Grantor, the Collateral Agent shall notify the Grantor of such fact (but failure to do so shall not invalidate such exercise). 5.05. CERTAIN REMEDIES. If a Facility Event of Default shall have occurred and be continuing, the Collateral Agent may exercise all rights and remedies which it may have under this -12- 203 Agreement, any other agreement, at law or otherwise, and in addition, the following provisions shall apply: (a) The Collateral Agent may exercise all rights and remedies with respect to the Collateral and each part thereof as are provided by the UCC to a secured party on default (whether or not the UCC applies to the affected Collateral). To the extent, if any, the Collateral Agent does not otherwise have the right to do so, the Collateral Agent may (i) take absolute possession and control of the Collateral or any part thereof, (ii) transfer any Collateral into the name of the Collateral Agent or its nominees, (iii) notify the parties obligated on the Collateral to make to the Collateral Agent any payments due or to become due, (iv) receive any payments made under or in connection with the Collateral, (v) exercise all rights and remedies of the Grantor under or in connection with the Collateral, (vi) demand, collect, enforce, file claims for, sue for, recover, compromise, release, and take any action or institute any proceedings to collect or enforce, all rights to payments due or to become due and all other rights of the Grantor under or in connection with any Collateral, and (vii) otherwise deal in and act with respect to the Collateral in all respects as though it were the outright owner thereof. (b) All payments received by the Grantor in respect of any Collateral shall be received in trust for the benefit of the Secured Parties, shall be segregated from other funds of the Grantor and shall be forthwith paid over to the Collateral Agent in the same form as so received (with any necessary endorsement). (c) The Collateral Agent may, without notice except to the extent required by law, sell the Collateral or any part thereof, in one or more parcels, at public or private sale, at any of the Collateral Agent's offices or elsewhere, for cash, on credit or for future delivery, and upon such other terms as the Collateral Agent may deem commercially reasonable. The Grantor agrees that, to the extent notice of sale is required by law, at least ten days' notice to the Grantor of the time and place of any public sale or the time after which any private sale is to be made, shall constitute reasonable notification. The Collateral Agent shall not be obligated to make any sale, regardless of notice of sale having been given. The Collateral Agent may adjourn any public or private sale from time to time by announcement at the time and place fixed therefor, and such sale may, without further notice, be made at the time and place to which it was so adjourned. (d) The Grantor agrees that the Collateral Agent may comply with any limitation or restriction in connection with any sale of any Collateral as the Collateral Agent may deem to be necessary or advisable in order to comply with any law, or in order to obtain or make, or avoid the need to obtain or make, any approval or registration of the offering, sale or purchaser by or with any governmental agency or regulatory body. The Grantor agrees that (i) the Collateral Agent may make sales in compliance with such limitations and restrictions, even though such sales may be at prices and on other terms less favorable to the seller than if such approvals or registrations were obtained or made, (ii) the Collateral Agent shall have no obligation to delay sale of any Collateral in order to obtain or make any such approval or registration, and (iii) it shall not be commercially unreasonable to make sales in compliance with such limitations and restrictions. Without limiting the generality of the foregoing, the Grantor recognizes that the Collateral Agent may be unable, or may deem it inadvisable, to effect a public sale of some or all of the Collateral by reason of requirements of applicable securities laws, but may deem it advisable, for the purpose of complying with such laws, to resort to one or more private sales to members of a restricted group of offerees who will be obliged, among other things, to -13- 204 acquire such Collateral for their own accounts for investment and not with a view to distribution or resale. The Grantor agrees that (x) the Collateral Agent may make private sales in such manner, even though such sales may be at prices and on other terms less favorable to the seller than if such Collateral were sold by public sale, (y) the Collateral Agent shall have no obligation to delay sale of any Collateral in order to permit the issuers of such Collateral, even if such issuers would agree, to register or qualify such Collateral for public sale under applicable securities laws, and (z) that it shall not be commercially unreasonable to make private sales in such manner. 5.06. APPLICATION OF PAYMENTS. Except to the extent otherwise provided by this Agreement or the other Shared Security Documents, all cash held by the Collateral Agent as Collateral and all cash proceeds received by the Collateral Agent in respect of any sale of, collection from, or other realization upon any of the Collateral, shall (after payment of any amounts payable to the Collateral Agent pursuant to Section 6.04) be deposited in the Shared Collateral Account and applied as provided in the Collateral Agency Agreement. The Grantor shall remain liable for any deficiency. ARTICLE VI MISCELLANEOUS 6.01. AMENDMENTS, ETC. No amendment to or waiver of any provision of this Agreement, and no consent to any departure by the Grantor herefrom, shall in any event be effective unless in a writing manually signed by or on behalf of the Grantor and the Collateral Agent. Any such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. Such amendments, waivers and consents shall be made in accordance with, and shall be subject to, Section 6.01 of the Collateral Agency Agreement. 6.02. NO IMPLIED WAIVER; REMEDIES CUMULATIVE. No delay or failure of the Collateral Agent in exercising any right or remedy under this Agreement shall operate as a waiver thereof; nor shall any single or partial exercise of any such right or remedy preclude any other or further exercise thereof or the exercise of any other right or remedy. The rights and remedies of the Collateral Agent under this Agreement are cumulative and not exclusive of any other rights or remedies available hereunder, under any other agreement, at law, or otherwise. 6.03. NOTICES. Except to the extent, if any, otherwise expressly provided herein, all notices and other communications (collectively, "notices") under this Agreement shall be given, shall be effective, and may be relied upon, in the same way as notices under the Collateral Agency Agreement. 6.04. INDEMNITY AND EXPENSES. (a) INDEMNITY. The Grantor agrees to indemnify each Secured Party from and against any and all claims, losses, liabilities and expenses (including reasonable attorney's fees) arising out of or resulting from this Agreement (including, without limitation, enforcement of this Agreement), except claims, losses, liabilities and expenses resulting solely from the gross negligence or willful misconduct of a Secured Party. (b) EXPENSES. The Grantor will upon demand pay to the Collateral Agent the amount of all reasonable expenses, including the reasonable fees and expenses of its counsel and of any experts -14- 205 and agents, which the Collateral Agent may incur in connection with (i) the administration of this Agreement, (ii) the custody, preservation, use or operation of, or the sale of, collection of or other realization upon, any Collateral, (iii) the exercise or enforcement of any of the rights of the Collateral Agent hereunder, or (iv) the failure by the Grantor to perform or observe any of the provisions hereof. 6.05. ENTIRE AGREEMENT. This Agreement and the other Secured Party Documents constitute the entire agreement of the parties hereto with respect to the subject matter hereof and thereof and supersede all prior and contemporaneous understandings and agreements. 6.06. SURVIVAL. All representations and warranties of the Grantor contained in or made in connection with this Agreement shall survive, and shall not be waived by, the execution and delivery of this Agreement, any investigation by or knowledge of any Secured Party, any extension of credit, termination of this Agreement, or any other event or circumstance whatever. The obligations of the Grantor under Section 6.04 shall survive termination of this Agreement and the other Secured Party Documents. 6.07. COUNTERPARTS. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, and all such counterparts shall constitute but one and the same agreement. 6.08. CONSTRUCTION. This Agreement is a Shared Security Document referred to in the Collateral Agency Agreement. The provisions of the Collateral Agency Agreement are supplemental to the provisions of this Agreement, as provided in the Collateral Agency Agreement. 6.09. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon the Grantor and its successors and assigns, and shall inure to the benefit of and be enforceable by the Collateral Agent and the other Secured Parties and their respective successors and assigns. 6.10. CERTAIN LEGAL MATTERS. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH OF PENNSYLVANIA, EXCLUSIVE OF CHOICE OF LAW PRINCIPLES, EXCEPT TO THE EXTENT THAT PERFECTION AND THE EFFECT OF PERFECTION OR NONPERFECTION OF THE SECURITY INTERESTS IN THE COLLATERAL IS GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE COMMONWEALTH OF PENNSYLVANIA PURSUANT TO THE UCC. IN WITNESS WHEREOF, the Grantor has caused this Agreement to be duly executed and delivered as of the date first above written. PRIMARK CORPORATION By /s/ STEPHEN H. CURRAN ----------------------------------------- Stephen H. Curran Senior Vice President and Chief Financial Officer Accepted and Agreed: MELLON BANK, N.A., as Collateral Agent By /s/ R. JANE WESTRICH --------------------------- R. Jane Westrich -15- 206 Vice President -16- 207 Exhibit 10.17 - - -------------------------------------------------------------------------------- - - -------------------------------------------------------------------------------- COLLATERAL AGENCY AGREEMENT dated as of February 7, 1997 among PRIMARK CORPORATION, as Borrower, THE REVOLVING CREDIT PARTIES, THE TERM LOAN PARTIES, THE NOTE BACKUP PARTIES and MELLON BANK, N.A., as Collateral Agent - - -------------------------------------------------------------------------------- - - -------------------------------------------------------------------------------- 208 TABLE OF CONTENTS
SECTION TITLE PAGE ARTICLE I DEFINITIONS; CONSTRUCTION 1.01 Certain Definitions................................................................. 1 1.02 Construction........................................................................ 10 ARTICLE II SECURED PARTY DOCUMENTS 2.01 Notice of Default................................................................... 10 2.02 The Swap Agreement and the Swap Party............................................... 11 2.03 Amendments and Refinancing.......................................................... 12 2.04 Delivery of Documents............................................................... 12 2.05 Termination of a Facility Party..................................................... 12 2.06 Certain Intercreditor Matters ...................................................... 13 ARTICLE III SHARED SECURITY DOCUMENTS 3.01 General Relation to Shared Security Documents....................................... 14 3.02 Power of Attorney................................................................... 14 3.03 Certain Rights After Facility Event of Default...................................... 14 3.04 Right to Initiate Judicial Proceedings.............................................. 15 3.05 Right to Appoint a Receiver......................................................... 15 3.06 Remedies Not Exclusive, etc......................................................... 15 3.07 Certain Waivers..................................................................... 16 3.08 Limitation on Collateral Agent's Duty in Respect of Shared Collateral............................................................. 17 3.09 Fees, Taxes, etc.................................................................... 17 3.10 Maintenance of Liens................................................................ 17 3.11 Further Assurances.................................................................. 17 ARTICLE IV ACCOUNTS 4.01 Shared Collateral Account........................................................... 17 4.02 Investment.......................................................................... 18 4.03 Deposits............................................................................ 18 4.04 Distributions....................................................................... 18 4.05 Calculations........................................................................ 20 4.06 Application of Monies............................................................... 20 4.07 Revolving Credit LOC Collateral Account............................................. 20 4.08 Note Backup LOC Collateral Account.................................................. 21 4.09 General Provisions Relating to Accounts............................................. 21
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ARTICLE V THE COLLATERAL AGENT 5.01 Appointment......................................................................... 22 5.02 General Nature of Collateral Agent's Duties......................................... 22 5.03 Exercise of Powers.................................................................. 23 5.04 General Exculpatory Provisions...................................................... 23 5.05 Administration by the Collateral Agent.............................................. 24 5.06 No Reliance by Facility Parties..................................................... 24 5.07 Indemnification..................................................................... 24 5.08 Collateral Agent in its Individual Capacity......................................... 25 5.09 Facility Parties.................................................................... 25 5.10 Successor Collateral Agent.......................................................... 25 5.11 Additional Collateral Agents........................................................ 26 5.12 Calculations........................................................................ 27 5.13 Collateral Agent's Fee.............................................................. 27 5.14 Expenses; Indemnity................................................................. 28 5.15 Financial and Other Information; Confidentiality.................................... 29 5.16 Moneys Held as Collateral Agent..................................................... 29 ARTICLE VI MISCELLANEOUS 6.01 Amendments, Supplements and Waivers................................................. 29 6.02 Notices............................................................................. 30 6.03 No Implied Waiver; Cumulative Remedies.............................................. 30 6.04 Severability........................................................................ 30 6.05 Prior Understandings................................................................ 31 6.06 Survival............................................................................ 31 6.07 Counterparts........................................................................ 31 6.08 Termination of Liens................................................................ 31 6.09 Successors and Assigns.............................................................. 31 6.10 Governing Law; Submission to Jurisdiction; Waiver of Jury Trial; Limitation of Liability.......................................................... 31
Exhibit A Form of Swap Party Supplement Exhibit B Form of Revolving Credit Refinancing Supplement -2- 210 COLLATERAL AGENCY AGREEMENT THIS AGREEMENT, dated as of February 7, 1997, among Primark Corporation, a Michigan corporation (the "Borrower"), Mellon Bank, N.A., as "Agent" under the Revolving Credit Agreement referred to hereinbelow (in such capacity, together with its successors thereunder or under any successor Revolving Credit Agreement, the "Revolving Credit Agent", as further defined hereinafter), on behalf of the "Lenders" (as defined in such Revolving Credit Agreement) from time to time parties to such Revolving Credit Agreement (together with their successors thereunder or under any successor Revolving Credit Agreement, the "Revolving Credit Lenders"), the "Issuing Banks" (as defined in such Revolving Credit Agreement) from time to time under such Revolving Credit Agreement (together with their successors thereunder or under any successor Revolving Credit Agreement, the "Revolving Credit Issuing Banks") and the Revolving Credit Agent (the Revolving Credit Lenders, the Revolving Credit Issuing Banks and the Revolving Credit Agent being referred to herein as the "Revolving Credit Parties"), Mellon Bank, N.A., as "Agent" under the Term Loan Agreement referred to hereinbelow (in such capacity, together with its successors, the "Term Loan Agent", as further defined hereinafter), on behalf of the "Lenders" (as defined in such Term Loan Agreement) from time to time parties to such Term Loan Agreement (the "Term Lenders"), and the Term Loan Agent (the Term Lenders and the Term Loan Agent being referred to herein as the "Term Loan Parties"), Mellon Bank, N.A., as "Agent" under the Note Backup Agreement referred to hereinbelow (in such capacity, together with its successors, the "Note Backup Agent", as further defined hereinafter), on behalf of the "Lenders" (as defined in such Note Backup Agreement) from time to time parties to such Note Backup Agreement (the "Note Backup Lenders"), and the Note Backup Agent (the Note Backup Lenders and the Note Backup Agent being referred to herein as the "Note Backup Parties"), and Mellon Bank, N.A., as agent for the Secured Parties (as hereinafter defined) (in such capacity, together with its successors, the "Collateral Agent"). The parties hereto, intending to be legally bound hereby, agree as follows: ARTICLE I DEFINITIONS; CONSTRUCTION 1.01. CERTAIN DEFINITIONS. In addition to other words and terms defined elsewhere in this Agreement, as used herein the following words and terms shall have the following meanings, respectively, unless the context hereof otherwise clearly requires: "Borrower Pledge Agreement" shall mean the Pledge Agreement of even date herewith between the Borrower and the Collateral Agent, as the same may be amended, modified or supplemented from time to time. -1- 211 "Bankruptcy Default" means the occurrence or existence of either of the following events or conditions (for any reason, whether voluntary, involuntary, or effected or required by Law): (a) a proceeding shall have been instituted in respect of the Borrower (i) seeking to have an order for relief entered in respect of the Borrower, or seeking a declaration or entailing a finding that the Borrower is insolvent or a similar declaration or finding, or seeking dissolution, winding-up, administration, charter revocation or forfeiture, liquidation, reorganization, arrangement, adjustment, composition or other similar relief with respect to the Borrower, its assets or its debts under any Law relating to bankruptcy, insolvency, relief of debtors or protection of creditors, termination of legal entities or any other similar Law now or hereafter in effect, or (ii) seeking appointment of a receiver, administrative receiver, trustee, liquidator, assignee, sequestrator or other custodian for the Borrower or for all or any substantial part of its property and such proceeding shall result in the entry, making or grant of any such order for relief, declaration, finding, relief or appointment, or such proceeding shall remain undismissed and unstayed for a period of 30 consecutive days; or (b) the Borrower shall be insolvent; shall fail to pay, become unable to pay, or state that it is or will be unable to pay, its debts as they become due; shall voluntarily suspend transaction of its business; shall make a general assignment for the benefit of creditors; shall institute (or fail to controvert in a timely and appropriate manner) a proceeding described in the foregoing clause (a)(i), or (whether or not any such proceeding has been instituted) shall consent to or acquiesce in any such order for relief, declaration, finding or relief described therein; shall institute (or fail to controvert in a timely and appropriate manner) a proceeding described in the foregoing clause (a)(ii) hereof, or (whether or not any such proceeding has been instituted) shall consent to or acquiesce in any such appointment or to the taking of possession by any such custodian of all or any substantial part of its or his property; shall dissolve, wind-up, go into administration or revoke or forfeit its articles of incorporation (or other constituent documents); or shall take any action in furtherance of any of the foregoing. "Business Day" shall mean any day other than a Saturday, Sunday, public holiday under the laws of the Commonwealth of Pennsylvania or other day on which banking institutions are authorized or obligated to close in the city in which is located the Collateral Agent's Office. "Cash Equivalent Investments" shall mean any of the following, to the extent acquired for investment and not with a view to achieving trading profits: (a) obligations fully backed by the full faith and credit of the United States of America or sterling denominated debt securities issued or guaranteed by the government of the United Kingdom, in each case maturing not in excess of one year -2- 212 from the date of acquisition, (b) commercial paper maturing not in excess of 180 days from the date of acquisition and rated "P-1" by Moody's Investors Service or "A-1" by Standard & Poor's Corporation on the date of acquisition, (c) the following obligations of any commercial bank (not in excess of $5,000,000 (or the equivalent thereof in foreign currencies) in the aggregate for any commercial bank having capital and surplus less than $500,000,000 (or the equivalent thereof in foreign currencies)): (i) time deposits, certificates of deposit and acceptances maturing not in excess of 180 days from the date of acquisition, or (ii) fully secured overnight repurchase obligations for underlying securities of the type referred to in clause (a) above, (d) freely tradeable and readily marketable money market preferred stock which, pursuant to its terms, has a yield reset not less frequently than every 60 days and rated "AA" or better by Standard & Poor's Corporation or "Aa" or better by Moody's Investors Service, Inc., and (e) other investments designated in writing by the Collateral Agent as being "Cash Equivalent Investments" for purposes of this Agreement (it being understood that any such designation shall be revocable by the Collateral Agent upon 60 days' notice to the Borrower). In no event shall any investment as to which the Borrower or any Subsidiary of the Borrower is an issuer or a direct or indirect obligor be deemed a Cash Equivalent Investment. "Collateral Agent Obligations" shall mean all obligations from time to time of the Borrower to the Collateral Agent in its capacity as such, including but not limited to amounts payable pursuant to Sections 3.09, 5.13 and 5.14 hereof or Section 6.04 of the Borrower Pledge Agreement, in each case whether such obligations are direct or indirect, otherwise secured or unsecured, joint or several, absolute or contingent, due or to become due, whether for payment or performance, now existing or hereafter arising (specifically including but not limited to obligations arising or accruing after the commencement of any bankruptcy, insolvency or similar proceedings with respect to the Borrower, or which would have arisen or accrued but for the commencement of such proceeding, even if the claim for such obligation is not allowed in such proceeding under applicable Law). "Contingent Indemnification Obligations" at any time shall mean Obligations which at such time are contingent obligations under indemnification provisions of the Secured Party Documents which survive indefinitely; provided, however, that an Obligation under such an indemnification provision shall not constitute a Contingent Indemnification Obligation to the extent that (a) an unsatisfied claim for payment of such Obligation has been made, or (b) an action, suit or proceeding is pending or threatened at such time which may give rise to a claim under such indemnification provision. "Corporation" shall mean a corporation, limited liability company or business trust organized under the Laws of any state of the United States, a company limited by shares incorporated under the Laws of England and Wales, or any similar entity organized under the Laws of any other jurisdiction, the owners of which are not by operation of Law generally liable for the obligations of such entity. "Directing Party" at any time shall mean: (a) the Term Loan Agent, if at such time (i) a Term Loan Notice of Default is in effect, at least 15 Business Days have elapsed since the giving of such Term Loan Notice of Default, and no Revolving Credit Notice of Default, Note Backup Notice of Default or Bankruptcy Default is in effect, or (ii) (A) all Revolving Credit Obligations (other than Contingent Indemnification Obligations) have been paid in full, all -3- 213 commitments to extend credit under the Revolving Credit Documents have terminated, and all Letters of Credit have terminated, and (B) all Note Backup Obligations (other than Contingent Indemnification Obligations) have been paid in full, all commitments to extend credit under the Note Backup Documents have terminated, and all Note Backup LOCs have terminated; (b) the Revolving Credit Agent, if at such time (i) a Revolving Credit Notice of Default is in effect, at least 15 Business Days have elapsed since the giving of such Revolving Credit Notice of Default, and no Term Loan Notice of Default, Note Backup Notice of Default or Bankruptcy Default is in effect, or (ii) (A) all Term Loan Obligations (other than Contingent Indemnification Obligations) have been paid in full, and (B) all Note Backup Obligations (other than Contingent Indemnification Obligations) have been paid in full, all commitments to extend credit under the Note Backup Documents have terminated, and all Note Backup LOCs have terminated; (c) the Note Backup Agent, if at such time (i) a Note Backup Notice of Default is in effect, at least 15 Business Days have elapsed since the giving of such Note Backup Notice of Default, and no Term Loan Notice of Default, Revolving Credit Notice of Default or Bankruptcy Default is in effect, or (ii) (A) all Term Loan Obligations (other than Contingent Indemnification Obligations) have been paid in full, and (B) all Revolving Credit Obligations (other than Contingent Indemnification Obligations) have been paid in full, all commitments to extend credit under the Revolving Credit Documents have terminated, and all Letters of Credit have terminated; (d) all Swap Parties, acting together, if at such time (i) all Term Loan Obligations (other than Contingent Indemnification Obligations) have been paid in full, (ii) all Revolving Credit Obligations (other than Contingent Indemnification Obligations) have been paid in full, all commitments to extend credit under the Revolving Credit Documents have terminated, and (iii) all Letters of Credit have terminated, all Note Backup Obligations (other than Contingent Indemnification Obligations) have been paid in full, all commitments to extend credit under the Note Backup Documents have terminated, and all Note Backup LOCs have terminated; (e) otherwise, Facility Lenders whose Facility Lender Percentages at such time aggregate at least 51%, acting together. "Facility Agents" shall mean the Revolving Credit Agent, the Term Loan Agent and the Note Backup Agent. "Facility Event of Default" shall mean the occurrence or existence of an "Event of Default" under the Revolving Credit Agreement, the Term Loan Agreement or the Note Backup Agreement. "Facility Lenders" shall mean the Revolving Credit Lenders, the Term Loan Lenders and the Note Backup Lenders. -4- 214 "Facility Lender Exposure" for a Facility Lender at any time shall mean the sum of the following: (a) the principal amount of loans outstanding to such Facility Lender under the Term Loan Agreement, plus (b) the principal amount of extensions of credit made by or for the account of such Facility Lender under the Revolving Credit Agreement, plus (c) the amount equal to (i) if no Revolving Credit Notice of Default or Bankruptcy Default is in effect, and if the commitment of such Facility Lender to extend credit under the Revolving Credit Agreement has not expired or been terminated, then an amount equal to the principal amount of such Facility Lender's unborrowed commitment to extend credit under the Revolving Credit Agreement, (ii) otherwise, zero, plus (d) the principal amount of extensions of credit made by or for the account of such Facility Lender under the Note Backup Agreement. "Facility Lender Percentage" at any time for any Facility Lender shall mean a fraction, the numerator of which is the Facility Lender Exposure of such Facility Lender, and the denominator of which is the sum of the Facility Lender Exposures of each Facility Lender. "Facility Parties" shall mean the Revolving Credit Parties, the Term Loan Parties, the Note Backup Parties and the Swap Parties. "Facility Permitted Lien" shall mean a Lien which is a "Permitted Lien" under each of the Revolving Credit Agreement, the Term Loan Agreement and the Note Backup Agreement. "Facility Potential Default" shall mean any event or condition which, with notice, passage of time or a determination by the appropriate Facility Party or Facility Parties, or any combination of the foregoing, would constitute a Facility Event of Default. "Governmental Authority" shall mean any government or political subdivision or any agency, authority, bureau, central bank, commission, department or instrumentality of either, or any court, tribunal, grand jury or arbitrator, in each case whether foreign or domestic. "Interest Rate Hedge Agreement" shall mean an interest rate swap, cap or collar agreement, forward rate agreement, any other similar agreement, and any combination of the foregoing. "Law" shall mean any law (including common law), constitution, statute, treaty, convention, regulation, rule, ordinance, order, injunction, writ, decree or award of any Governmental Authority. "Lien" shall mean any mortgage, deed of trust, pledge, lien, security interest, charge or other encumbrance or security arrangement of any nature whatsoever, including but not limited to any conditional sale or title retention arrangement, and any assignment, deposit arrangement or lease intended as, or having the effect of, security. "Note Backup Agent" at any time shall mean the "Agent" under the Note Backup Agreement at such time. If there is no Agent under the Note Backup Agreement at such time, then any notice, demand, or other communication required or permitted to be given by the Note Backup Agent hereunder or under any Shared Security Document shall be sufficiently -5- 215 given or made if given by the "Required Lenders" (as defined in the Note Backup Agreement as constituted on the date hereof, as such definition may be amended, modified or supplemented from time to time, and any successor term of similar import from time to time in the Note Backup Agreement), and any notification, demand, consent, document, payment or other communication or item required to be given or made to the Note Backup Agent shall be sufficiently given or made if given directly to each Note Backup Party entitled thereto. "Note Backup Agreement" shall mean the Note Backup Agreement dated on or about February 7, 1997 by and among the Borrower, the lenders parties thereto from time to time, the issuing bank referred to therein, and Mellon Bank, N.A., as Agent, as the same may be amended, modified or supplemented from time to time; provided, however, that for purposes of this Agreement no effect shall be given to any amendment, modification or supplement entered into without the written consent of the Revolving Credit Agent and the Term Loan Agent that increases the maximum aggregate principal amount of extensions of credit thereunder to the Borrower above $8,382,343.75. "Note Backup Documents" shall mean the "Loan Documents" as defined in the Note Backup Agreement, and any successor term of similar import from time to time in the Note Backup Agreement. "Note Backup Issuing Bank" shall mean the "Issuing Bank" (as defined in the Note Backup Agreement) under the Note Backup Agreement, together with its successors thereunder. "Note Backup Lenders" shall mean the "Lenders" (as defined in the Note Backup Agreement) from time to time under the Note Backup Agreement. "Note Backup LOC" shall mean any letter of credit outstanding under the Note Backup Agreement from time to time. "Note Backup LOC Collateral Account" shall have the meaning given that term in Section 4.08 hereof. "Note Backup LOC Exposure" at any time shall mean the sum at such time of (a) the aggregate Note Backup LOC Unreimbursed Draws and (b) the aggregate Note Backup LOC Undrawn Availability. "Note Backup LOC Undrawn Availability" with respect to a Note Backup LOC at any time shall mean the maximum amount available to be drawn under such Note Backup LOC at such time or thereafter, regardless of the existence or satisfaction of any conditions or limitations on drawing. "Note Backup LOC Unreimbursed Draws" with respect to a Note Backup LOC at any time shall mean the aggregate amount at such time of all payments made by the issuer under such Note Backup LOC, to the extent not repaid by the Borrower. -6- 216 "Note Backup Notice of Default" shall mean a written certification delivered to the Collateral Agent by the Note Backup Agent at any time stating that a Facility Event of Default or Facility Potential Default (as specified therein) has occurred and is continuing or exists under the Note Backup Agreement, and specifically stating that such notice is a "Note Backup Notice of Default" under this Agreement. "Note Backup Obligations" shall mean all obligations from time to time of the Borrower to any Note Backup Party from time to time arising under or in connection with or related to or evidenced by or secured by the Note Backup Agreement or any other Note Backup Document, whether such obligations are direct or indirect, otherwise secured or unsecured, joint or several, absolute or contingent, due or to become due, whether for payment or performance, now existing or hereafter arising (specifically including but not limited to obligations arising or accruing after the commencement of any bankruptcy, insolvency or similar proceedings with respect to the Borrower, or which would have arisen or accrued but for the commencement of such proceeding, even if the claim for such obligation is not allowed in such proceeding under applicable Law). Without limitation of the foregoing, such obligations include the principal amount of loans, interest, Note Backup reimbursement obligations, and fees, indemnities or expenses under or in connection with any Note Backup Document. Note Backup Obligations shall remain such notwithstanding any assignment or transfer or any subsequent assignment or transfer of any of the Note Backup Obligations or any interest therein. "Note Backup Parties" shall mean the Note Backup Lenders, the Note Backup Issuing Bank and the Note Backup Agent. "Notice of Default" shall mean a Revolving Credit Notice of Default, a Term Loan Notice of Default or a Note Backup Notice of Default. "Obligations" shall mean all Revolving Credit Obligations, Term Loan Obligations, Note Backup Obligations, Swap Obligations, and Collateral Agent Obligations. "Office" of the Collateral Agent shall mean its office located at One Mellon Bank Center, Pittsburgh, Pennsylvania, or at such other domestic office or offices of the Collateral Agent as may be designated in writing from time to time by the Collateral Agent to the Borrower and the Facility Agents. "Person" shall mean an individual, corporation, partnership, trust, limited liability company, unincorporated association, joint venture, joint-stock company, Governmental Authority or any other entity. "Restricted Investments" shall mean: (a) readily marketable obligations backed by the full faith and credit of the United States of America, maturing not later than 90 days from the date of acquisition, (b) overnight dollar-denominated deposits in, overnight certificates of deposit in, or overnight repurchase agreements with, a United States commercial bank having shareholders' equity of at least $1,000,000,000 which has outstanding general unsecured short-term debt rated "A-1" or better, and general unsecured short-term debt rated "P-1," in each case by Moody's Investors Service, Inc., (c) readily marketable commercial paper maturing not -7- 217 later than 90 days from the date of acquisition and rated "P-1" by Moody's Investors Service, Inc., and (d) freely redeemable shares of stock or beneficial interest in a money market mutual fund, substantially all of the assets of which consist of obligations described in the foregoing clauses (a) through (c). "Revolving Credit Agent" at any time shall mean the "Agent" under the Revolving Credit Agreement at such time. If there is no Agent under the Revolving Credit Agreement at such time, then any notice, demand, or other communication required or permitted to be given by the Revolving Credit Agent hereunder or under any Shared Security Document shall be sufficiently given or made if given by the "Required Lenders" (as defined in the Revolving Credit Agreement as constituted on the date hereof, as such definition may be amended, modified or supplemented from time to time, and any successor term of similar import from time to time in the Revolving Credit Agreement), and any notification, demand, consent, document, payment or other communication or item required to be given or made to the Revolving Credit Agent shall be sufficiently given or made if given directly to each Revolving Credit Party entitled thereto. "Revolving Credit Agreement" shall mean the Revolving Credit Agreement of even date herewith by and among the Borrower, the lenders parties thereto from time to time, the issuing banks referred to therein, and Mellon Bank, N.A., as Agent, as the same may be amended, modified, supplemented, renewed or refinanced from time to time; provided, however, that for purposes of this Agreement no effect shall be given to any amendment, modification, supplement, renewal or refinancing entered into without the written consent of the Term Loan Agent and the Note Backup Agent that increases the maximum aggregate principal amount of extensions of credit thereunder to the Borrower (whether in the form of loans, Letters of Credit or otherwise) above $75,000,000. "Revolving Credit Documents" shall mean the "Loan Documents" as defined in the Revolving Credit Agreement, and any successor term of similar import from time to time in the Revolving Credit Agreement. "Revolving Credit LOC" shall mean any letter of credit outstanding under the Revolving Credit Agreement from time to time. "Revolving Credit LOC Collateral Account" shall have the meaning given that term in Section 4.07 hereof. "Revolving Credit LOC Exposure" at any time shall mean the sum at such time of (a) the aggregate Revolving Credit LOC Unreimbursed Draws and (b) the aggregate Revolving Credit LOC Undrawn Availability. "Revolving Credit LOC Undrawn Availability" with respect to a Revolving Credit LOC at any time shall mean the maximum amount available to be drawn under such Revolving Credit LOC at such time or thereafter, regardless of the existence or satisfaction of any conditions or limitations on drawing. -8- 218 "Revolving Credit LOC Unreimbursed Draws" with respect to a Revolving Credit LOC at any time shall mean the aggregate amount at such time of all payments made by the issuer under such Revolving Credit LOC, to the extent not repaid by the Borrower. "Revolving Credit Notice of Default" shall mean a written certification delivered to the Collateral Agent by the Revolving Credit Agent at any time stating that a Facility Event of Default or Facility Potential Default (as specified therein) has occurred and is continuing or exists under the Revolving Credit Agreement, and specifically stating that such notice is a "Revolving Credit Notice of Default" under this Agreement. "Revolving Credit Obligations" shall mean all obligations from time to time of the Borrower to any Revolving Credit Party from time to time arising under or in connection with or related to or evidenced by or secured by the Revolving Credit Agreement or any other Revolving Credit Document, whether such obligations are direct or indirect, otherwise secured or unsecured, joint or several, absolute or contingent, due or to become due, whether for payment or performance, now existing or hereafter arising (specifically including but not limited to obligations arising or accruing after the commencement of any bankruptcy, insolvency or similar proceedings with respect to the Borrower, or which would have arisen or accrued but for the commencement of such proceeding, even if the claim for such obligation is not allowed in such proceeding under applicable Law). Without limitation of the foregoing, such obligations include the principal amount of loans, interest, Revolving Credit LOC reimbursement obligations, and fees, indemnities or expenses under or in connection with any Revolving Credit Document. Revolving Credit Obligations shall remain such notwithstanding any assignment or transfer or any subsequent assignment or transfer of any of the Revolving Credit Obligations or any interest therein. "Secured Parties" shall mean the Collateral Agent and the Facility Parties. "Secured Party Documents" shall mean the Revolving Credit Documents, the Term Loan Documents, the Note Backup Documents and the Swap Documents, including the Shared Security Documents. "Shared Collateral" shall mean the collateral from time to time subject to or intended or purported to be subject to a Lien under the Shared Security Documents. "Shared Collateral Account" shall have the meaning given that term in Section 4.01 hereof. "Shared Security Documents" shall mean this Agreement, the Borrower Pledge Agreement, and any other agreements or instruments from time to time granting or purporting to grant the Collateral Agent a Lien in any property for the benefit of the Secured Parties to secure the Obligations. "Shares of Capital Stock" shall mean shares of capital stock of, membership interest in, beneficial interest in, or similar ownership interest in, a Corporation organized under the Laws of any state of the United States or any other jurisdiction, including, without limitation, in the -9- 219 case of Corporations incorporated under the Laws of England and Wales, equity share capital, ordinary shares and loan stock. "Subsidiary" of a Person at any time shall mean any Corporation of which a majority (by number of shares or number of votes) of the outstanding Shares of Capital Stock of any class is at such time owned directly or indirectly, beneficially or of record, by such Person or one or more Subsidiaries of such Person, and any partnership, trust or other Person of which a majority of any class of outstanding equity interest is at such time owned directly or indirectly, beneficially or of record, by such Person or one or more Subsidiaries of such Person. For the avoidance of doubt, as used in the preceding sentence "majority" means more than half (and not precisely half). "Swap Agreement" shall mean an Interest Rate Hedging Agreement which is designated a "Swap Agreement" in accordance with Section 2.03 hereof, as the same may be amended, modified or supplemented from time to time in accordance with this Agreement. "Swap Documents" shall mean each Swap Agreement and the Shared Security Documents. "Swap Obligations" shall mean all obligations from time to time of the Borrower to any Swap Party under or in connection with a Swap Agreement, whether such obligations are direct or indirect, otherwise secured or unsecured, joint or several, absolute or contingent, due or to become due, whether for payment or performance, now existing or hereafter arising (specifically including but not limited to obligations arising or accruing after the commencement of any bankruptcy, insolvency or similar proceedings with respect to the Borrower, or which would have arisen or accrued but for the commencement of such proceeding, even if the claim for such obligation is not allowed in such proceeding under applicable Law). "Swap Party" shall mean any Person who becomes party hereto as "Swap Party" in accordance with Section 2.03 hereof. "Swap Shared Security Cap" with respect to a Swap Agreement shall have the meaning given that term in the Swap Party Supplement with respect to such Swap Agreement. "Term Loan Agent" at any time shall mean the "Agent" under the Term Loan Agreement at such time. If there is no Agent under the Term Loan Agreement at such time, then any notice, demand, or other communication required or permitted to be given by the Term Loan Agent hereunder or under any Shared Security Document shall be sufficiently given or made if given by the "Required Lenders" (as defined in the Term Loan Agreement), and any notification, demand, consent, document, payment or other communication or item required to be given or made to the Term Loan Agent shall be sufficiently given or made if given directly to each Term Loan Party entitled thereto. "Term Loan Agreement" shall mean the Term Loan Agreement of even date herewith by and among the Borrower, the lenders parties thereto from time to time, and Mellon Bank, N.A., as Agent, as the same may be amended, modified or supplemented from time to time; -10- 220 provided, however, that for purposes of this Agreement no effect shall be given to any amendment, modification or supplement entered into without the written consent of the Revolving Credit Agent and the Note Backup Agent that increases the principal amount outstanding thereunder. "Term Loan Documents" shall mean the "Loan Documents" as defined in the Term Loan Agreement, and any successor term of similar import from time to time in the Term Loan Agreements. "Term Loan Notice of Default" shall mean a written certification delivered to the Collateral Agent by the Term Loan Agent at any time stating that a Facility Event of Default or Facility Potential Default (as specified therein) has occurred and is continuing or exists under the Term Loan Agreement, and specifically stating that such notice is a "Term Loan Notice of Default" under this Agreement. "Term Loan Obligations" shall mean all obligations from time to time of the Borrower to any Term Loan Party from time to time arising under or in connection with or related to or evidenced by or secured by the Term Loan Agreement or any other Term Loan Document, whether such obligations are direct or indirect, otherwise secured or unsecured, joint or several, absolute or contingent, due or to become due, whether for payment or performance, now existing or hereafter arising (specifically including but not limited to obligations arising or accruing after the commencement of any bankruptcy, insolvency or similar proceedings with respect to the Borrower, or which would have arisen or accrued but for the commencement of such proceeding, even if the claim for such obligation is not allowed in such proceeding under applicable Law). Without limitation of the foregoing, such obligations include the principal amount of loans, interest, and fees, indemnities or expenses under or in connection with any Term Loan Document. Term Loan Obligations shall remain such notwithstanding any assignment or transfer or any subsequent assignment or transfer of any of the Loan Obligations or any interest therein. 1.02. CONSTRUCTION. In this Agreement and each other Shared Security Document, unless the context otherwise clearly requires, references to the plural include the singular, the singular the plural and the part the whole; "or" has the inclusive meaning represented by the phrase "and/or"; and "property" includes all properties and assets of any kind or nature, tangible or intangible, real, personal or mixed. The words "hereof," "herein" and "hereunder" (and similar terms) in this Agreement or any other Shared Security Document refer to this Agreement or such other Shared Security Document, as the case may be, as a whole and not to any particular provision of this Agreement or such other Shared Security Document. The words "includes" and "including" (and similar terms) in this Agreement or any other Shared Security Document mean "includes without limitation" and "including without limitation," respectively (and similarly for similar terms). References in this Agreement or any other Shared Security Document to "determination" (and similar terms) by the Collateral Agent or by any Secured Party include good faith estimates by the Collateral Agent or by such Secured Party (in the case of quantitative determinations) and good faith beliefs by the Collateral Agent or by such Secured Party (in the case of qualitative determinations). No doctrine of construction of ambiguities in agreements or instruments against the interests of the party controlling the drafting thereof shall apply to this Agreement or any other Shared Security Document. The section and other headings contained in this Agreement and in each other Shared Security Document, and any -11- 221 tables of contents contained herein or therein, are for reference purposes only and shall not affect the construction or interpretation of this Agreement or such other Shared Security Document in any respect. Section, subsection, annex, exhibit and schedule references in this Agreement and in each other Shared Security Document are to this Agreement or such other Shared Security Document, as the case may be, unless otherwise specified. ARTICLE II SECURED PARTY DOCUMENTS 2.01. NOTICE OF DEFAULT. (a) EFFECTIVENESS. A Notice of Default given by a Facility Agent shall become effective upon receipt thereof by the Collateral Agent. A Notice of Default given by a Facility Agent, once effective, shall remain in effect unless and until it is cancelled as provided in Section 2.01(b). Upon receipt of a Notice of Default from a Facility Agent the Collateral Agent shall promptly notify the Borrower and the other Facility Agents thereof. (b) CANCELLATION. A Facility Agent who gave a Notice of Default may cancel a Notice of Default given by it by delivering a written notice of cancellation to the Collateral Agent. The Collateral Agent shall promptly notify the Borrower and the other Facility Agents of any such cancellation. (c) BANKRUPTCY DEFAULTS. A Notice of Default shall be deemed automatically to be in effect from and after the occurrence of a Bankruptcy Default. Such Notice of Default may not be cancelled except by written notice of cancellation by each Facility Agent. The Borrower shall immediately give notice to the Collateral Agent of any Bankruptcy Default. Any Secured Party may give notice of a Bankruptcy Default to the Collateral Agent. The Collateral Agent shall be protected and fully justified in relying on any such notice. (d) EFFECT. To the extent this Agreement or any other Shared Security Document gives the Collateral Agent any right or remedy upon the occurrence or existence or during the continuance of a Facility Event of Default or Facility Potential Default, the Collateral Agent may exercise such right or remedy regardless of whether it has received a Notice of Default to such effect. However, the Collateral Agent shall be protected and fully justified in declining to exercise any such right or remedy at the direction of a Directing Party absent an effective Notice of Default specifying the existence of a Facility Event of Default or Facility Potential Default, as the case may be. 2.02. THE SWAP AGREEMENT AND THE SWAP PARTY (a) GENERALLY. An Interest Rate Hedging Agreement entered into by the Borrower shall constitute a "Swap Agreement" entitled to the benefit of this Agreement, and the counterparty to such agreement shall constitute a "Swap Party," if and only if the Collateral Agent has received the following items, each in form and substance satisfactory to it: (i) a Swap Party Supplement executed by the counterparty in substantially the form of Exhibit A hereto, duly completed, and consented to by the Facility Agents and the Borrower, pursuant to which such counterparty shall agree to become party hereto and bound hereby as a "Swap Party," and pursuant to which a particular Interest Rate Hedging -12- 222 Agreement is designated as a "Swap Agreement," and (ii) such bringdown Lien searches, certificates and evidence of completion of such other acts and things as the Collateral Agent may require in connection with the foregoing. Each Facility Agent may grant or withhold such consent in its discretion, subject to any obligation it may have under the Secured Party Documents to which it is party to grant or withhold such designation. (b) AMENDMENTS TO THE SWAP PARTY DOCUMENTS. A Swap Agreement shall cease to constitute a "Swap Agreement" if, without the consent of the Facility Agents, such Swap Agreement is amended, modified or supplemented, unless such amendment merely eliminates, waives or renders less restrictive on the Borrower any term or condition otherwise applicable to the Borrower, reduces or defers amounts otherwise payable by the Borrower or increases or accelerates amounts otherwise receivable by the Borrower. Without limiting the generality of the foregoing, to the extent a Swap Agreement is in the form of a master agreement, pursuant to which multiple "confirmations" (however named) may be entered into from time to time, only the transactions evidenced by confirmations attached to the related Swap Party Supplement shall constitute part of such "Swap Agreement," and the relevant Swap Party and the Borrower each represent, warrant and agree that no other transactions have been or will be entered into pursuant to such master agreement. If the Borrower desires to enter into more than one Swap Agreement with the same Swap Party at different times, then, if the provisions of this Agreement are otherwise met, and the Borrower and the Swap Party so request, all such Swap Agreements may be documented under a single master agreement, covered by a single Swap Party Supplement (which will supercede prior Swap Party Supplements relating to such Swap Agreements), in which case all such Swap Agreements shall be considered to constitute a single Swap Agreement and will be subject to a single Swap Shared Security Cap. 2.03. AMENDMENTS AND REFINANCING. (a) AMENDMENTS TO AND REFINANCING OF THE REVOLVING CREDIT AGREEMENT. The provisions of this Agreement shall remain in full force and effect as applied to any amendment, modification or supplement to or renewal or refinancing of the Revolving Credit Agreement, provided that the Revolving Credit Agreement as so amended, modified, supplemented, renewed or refinanced remains a "Revolving Credit Agreement" as defined herein. In the event of any such refinancing, the Collateral Agent shall not make any distribution to or for the benefit of any incoming Revolving Credit Party or otherwise recognize such Revolving Credit Agreement as the "Revolving Credit Agreement" hereunder or the incoming Revolving Credit Parties as the "Revolving Credit Parties" hereunder, unless the Collateral Agent has received the following items, each in form and substance satisfactory to it: (i) a Revolving Credit Refinancing Supplement, executed by each incoming Revolving Credit Party in substantially the form of Exhibit B hereto, duly completed, and consented to by the Borrower, whereby such incoming Revolving Credit Parties agree to become party hereto and bound hereby as "Revolving Credit Parties," (ii) a notice from the outgoing Revolving Credit Agent under Section 2.05 hereof whereby such outgoing Revolving Credit Parties cease to be "Revolving Credit Parties" hereunder, and (iii) such opinions of counsel, certificates, bringdown Lien searches, and evidence of completion of such other acts and things as the Collateral Agent may require in connection with the foregoing. (b) TERM LOAN AGREEMENT. The provisions of this Agreement shall remain in full force and effect as applied to any amendment, modification or supplement to the Term Loan -13- 223 Agreement, provided that the Term Loan Agreement as so amended, modified or supplemented remains a "Term Loan Agreement," as defined herein. (c) NOTE BACKUP AGREEMENT. The provisions of this Agreement shall remain in full force and effect as applied to any amendment, modification or supplement to the Note Backup Agreement, provided that the Note Backup Agreement as so amended, modified or supplemented remains a "Note Backup Agreement" as defined herein. 2.04. DELIVERY OF DOCUMENTS. The Borrower shall, promptly upon the execution thereof, deliver to the Collateral Agent a true and complete copy of any and all Shared Security Documents and all amendments, modifications, supplements, renewals or refinancings of the Shared Security Documents, the Revolving Credit Agreement, the Term Loan Agreement, the Note Backup Agreement or any Swap Agreement. 2.05. TERMINATION OF A FACILITY PARTY. In the event there is delivered to the Collateral Agent at any time: (a) in the case of the Revolving Credit Parties, a written notice from the Revolving Credit Agent to the effect that (i) the Liens created hereby and by the other Shared Security Documents are to be released and discharged with respect to the Revolving Credit Parties, or (ii) all commitments to extend credit under the Revolving Credit Documents have terminated, all Letters of Credit have terminated, and all Revolving Credit Obligations (other than Contingent Indemnification Obligations) have been indefeasibly paid in full in cash; (b) in the case of the Term Loan Parties, a written notice from the Term Loan Agent to the effect that (i) the Liens created hereby and by the other Shared Security Documents are to be released and discharged with respect to the Term Loan Parties, or (ii) all Term Loan Obligations (other than Contingent Indemnification Obligations) have been indefeasibly paid in full in cash; (c) in the case of the Note Backup Parties, a written notice from the Note Backup Agent to the effect that (i) the Liens created hereby and by the other Shared Security Documents are to be released and discharged with respect to the Note Backup Parties, or (ii) all commitments to extend credit under the Note Backup Documents have terminated, all Note Backup LOCs have terminated, and all Note Backup Obligations (other than Contingent Indemnification Obligations) have been indefeasibly paid in full in cash; or (d) in the case of a Swap Party, a written notice from such Swap Party to the effect that (i) the Liens created hereby and by the other Shared Security Documents are to be released and discharged with respect to such Swap Party, or (ii) all Interest Rate Hedge Agreements under the Swap Documents with respect to such Swap Party have terminated and all Swap Obligations (other than Contingent Indemnification Obligations) with respect to such Swap Party have been indefeasibly paid in full in cash; then the Facility Parties on whose behalf such notice is given shall for all purposes hereof cease to be Facility Parties. The Revolving Credit Agent, the Term Loan Agent, the Note Backup Agent, and each Swap Party, respectively, shall deliver to the Collateral Agent written notice to the effect set forth in -14- 224 clause (a)(ii), (b)(ii), (c)(ii) and (d)(ii), respectively, promptly after receiving written request to do so by the Borrower after the conditions described in such clause are satisfied. 2.06. CERTAIN INTERCREDITOR MATTERS. (a) PAYMENT OBLIGATIONS NOT SUBORDINATED. The provisions of Article IV hereof apply solely to priorities of distributions resulting from realization on the Shared Security Documents, and not to the priorities of the Obligations. Nothing contained in this Agreement or in any other Shared Security Document is intended to effect a subordination of any Obligation to any other Obligation. Notwithstanding any other provision of this Agreement or any other Shared Security Document, nothing herein or therein shall limit or impair the right of each Secured Party to receive payment of the Obligations owing to it when due (whether at the stated maturity thereof, by acceleration or otherwise) or to institute suit for the enforcement of such payment on or after such due date, or the obligation of the Borrower to make such payment when due. (b) RIGHTS AND REMEDIES OF SECURED PARTIES NOT IMPAIRED. Except to the extent specifically provided in this Agreement, nothing contained herein shall be construed to limit any right or remedy otherwise available to any Secured Party under any Secured Party Document, at law, in equity, or otherwise. Nothing contained in this Agreement or in any other Shared Security Document shall limit or otherwise derogate from the right of any Secured Party to initiate a proceeding with respect to the Borrower under the U.S. Bankruptcy Code or similar Laws or to file, vote, give or withhold consent or otherwise exercise rights in respect to Obligations or any claim in respect thereof in connection with any proceeding under the U.S. Bankruptcy Code or similar Laws. (c) SHARED COLLATERAL. Subject to Section 2.06(d) hereof, the Secured Parties hereby agree that, if any Secured Party (other than the Collateral Agent, in its capacity as such) shall realize any funds on any Shared Collateral, or otherwise realize any funds under any Shared Security Document, other than as a result of distributions by the Collateral Agent in accordance with the provisions of this Agreement or the other Shared Security Documents, such Secured Party shall forthwith remit the same to the Collateral Agent, who shall deposit the same in the Shared Collateral Account. (d) SHARING OF SETOFFS. The Facility Parties hereby agree among themselves that if, so long as a Facility Event of Default is in effect, any Facility Party shall receive any amount on account of the Obligations through the exercise of set-off, bankers' lien or similar right against any accounts maintained by the Borrower with such Facility Party, then the Facility Party receiving such payment shall notify the Collateral Agent of such receipt, and equitable adjustment will be made in the manner stated in this Section 2.06(d) so that, in effect, all such amounts will be shared among all of the Secured Parties as if they had been deposited in the Shared Collateral Account. The Facility Party receiving such amount shall purchase (which it shall be deemed to have done simultaneously upon the receipt of such amount) for cash from the other Facility Parties a participation in the applicable Obligations owed to such other Facility Parties in such amount as shall result in a sharing by all Facility Parties of such amount in the proportions in which they would have been entitled to receive the same had such amount been deposited in the Shared Collateral Account and distributed to the Secured Parties in accordance with the terms of this Agreement. If all or any portion of such amount is thereafter recovered from the Facility Party making such purchase, such purchase shall be rescinded and the purchase price restored to the extent of such recovery, together with interest or other amounts, if any, required by Law to be -15- 225 paid by the Facility Party making such purchase. The Borrower hereby consents to and confirms the foregoing arrangements and hereby confirms the right of the Facility Parties, without notice to or consent of the Borrower, to create participations in accordance with this Section 2.08(d) notwithstanding any restrictions contained elsewhere in the Secured Party Documents. Each holder of a participation in Obligations shall be bound by this Section 2.06(d) fully as if it were a Facility Party hereunder. ARTICLE III SHARED SECURITY DOCUMENTS 3.01. GENERAL RELATION TO SHARED SECURITY DOCUMENTS. All of the powers, remedies and rights of the Collateral Agent as set forth in this Agreement may be exercised by the Collateral Agent in respect of any other Shared Security Document as though set forth in full therein and all of the powers, remedies and rights of the Collateral Agent as set forth in any other Shared Security Document may be exercised from time to time as herein and therein provided. Any property taken or held by the Collateral Agent, in its capacity as such, by foreclosure or otherwise, shall be held by it pursuant to this Agreement. This Agreement is intended to be supplemental to, and not in limitation of, the other Shared Security Documents, and the rights and remedies of the Collateral Agent contained herein and therein are intended to be cumulative. In the event of any irreconcilable conflict between the provisions of this Agreement and any Shared Security Document, the provisions of this Agreement shall prevail. 3.02. POWER OF ATTORNEY. The Borrower hereby irrevocably constitutes and appoints the Collateral Agent and any officer or agent thereof, with full power of substitution, as its true and lawful attorney-in-fact with full power and authority in the name of the Borrower or the name of such attorney-in-fact, from time to time in the Collateral Agent's discretion, for the purpose of signing documents and taking other action as the Collateral Agent may deem necessary or appropriate to perfect, promote and protect the Liens of the Collateral Agent in the Shared Collateral or otherwise to accomplish the purposes hereof. This power of attorney is a power coupled with an interest, shall be irrevocable and shall not be subject to the limitations of Section 3.03 hereof. Without limiting the generality of the foregoing, so long as the Collateral Agent shall be entitled under this Agreement or any other Shared Security Document to make collections in respect of the Shared Collateral, the Collateral Agent shall have the right and power to receive, endorse and collect all checks made payable to the order of the Borrower representing any Shared Collateral or dividend, payment or other distribution in respect of the Shared Collateral and to give full discharge for the same. 3.03. CERTAIN RIGHTS AFTER FACILITY EVENT OF DEFAULT. The Borrower hereby irrevocably constitutes and appoints the Collateral Agent and any officer or agent thereof, with full power of substitution, as its true and lawful attorney-in-fact with full power and authority in the name of the Borrower or otherwise, from time to time in the Collateral Agent's discretion, so long as any Facility Event of Default has occurred and is continuing, to take any and all appropriate action and to execute any and all documents and instruments which may be necessary or desirable to carry out the terms of this Agreement or any other Shared Security Document and to accomplish the purposes hereof and thereof and, without limiting the generality of the foregoing, the Borrower hereby gives the Collateral Agent the power and right on behalf of the Borrower, without notice to or further assent by the Borrower, to do the following: -16- 226 (a) to ask for, demand, sue for, collect, receive and give acquittance for any and all moneys due or to become due upon, or in connection with, the Shared Collateral; (b) to receive, take, endorse, assign and deliver any and all checks, notes, drafts, acceptances, documents and other negotiable and non-negotiable instruments taken or received by the Collateral Agent as, or in connection with, the Shared Collateral; (c) to commence, prosecute, defend, settle, compromise or adjust any claim, suit, action or proceeding with respect to, or in connection with, the Shared Collateral; (d) to sell, transfer, assign or otherwise deal in or with the Shared Collateral or any part thereof as fully and effectively as if the Collateral Agent were the absolute owner thereof; and (e) to do, at its option and at the expense and for the account of the Borrower, at any time or from time to time, all acts and things which the Collateral Agent deems necessary to protect or preserve the Shared Collateral and to realize upon the Shared Collateral. 3.04. RIGHT TO INITIATE JUDICIAL PROCEEDINGS. If a Facility Event of Default has occurred and is continuing, the Collateral Agent (a) shall have the right and power to institute and maintain such suits and proceedings as it may deem appropriate to protect and enforce the rights vested in it by this Agreement and each other Shared Security Document and (b) may either after entry, or without entry, proceed by suit or suits at law or in equity to enforce such rights and to foreclose upon the Shared Collateral and to sell all or, from time to time, any of the Shared Collateral under the judgment or decree of a court of competent jurisdiction. 3.05. RIGHT TO APPOINT A RECEIVER. If a Facility Event of Default has occurred and is continuing, upon the filing of a bill in equity or other commencement of judicial proceedings to enforce the rights of the Collateral Agent under this Agreement or any other Shared Security Document, the Collateral Agent shall, to the extent permitted by Law and except to the extent (if any) expressly forbidden by a Shared Security Document, without notice to the Borrower or any party claiming through the Borrower, without regard to the solvency or insolvency at the time of the Borrower or any other Person then liable for the payment of any of the Obligations, without regard to the then value of the Shared Collateral, and without requiring any bond from any complainant in such proceedings, be entitled as a matter of right to the appointment of a receiver or receivers (who may be the Collateral Agent) of the Shared Collateral, or any part thereof, and of the rents, issues, tolls, profits, royalties, revenues and other income thereof, pending such proceedings, with such powers as the court making such appointment shall confer, and to the entry of an order directing that the rents, issues, tolls, profits, royalties, revenues and other income of the property constituting the whole or any part of the Shared Collateral be segregated, sequestered and impounded for the benefit of the Collateral Agent, and the Borrower irrevocably consents to the appointments of such receiver or receivers and to the entry of such order; provided, that notwithstanding the appointment of any receiver, the Collateral Agent shall be entitled to retain possession and control of all cash held by or deposited with it pursuant to this Agreement, any other Shared Security Document or any other Secured Party Document. 3.06. REMEDIES NOT EXCLUSIVE, ETC. -17- 227 (a) REMEDIES NOT EXCLUSIVE. No remedy conferred upon or reserved to the Collateral Agent or any other Secured Party herein or in any other Shared Security Document is intended to be exclusive of any other remedy or remedies, but every such remedy shall be cumulative and shall be in addition to every other remedy conferred herein or in any other Shared Security Document or now or hereafter existing at law or in equity or otherwise. (b) NO IMPLIED WAIVER, ETC. No delay or omission by the Collateral Agent to exercise any right, remedy or power hereunder or under any other Shared Security Document or any other Secured Party Document shall impair any such right, remedy or power or shall be construed to be a waiver thereof, and every right, power and remedy given by this Agreement, any other Shared Security Document or any other Secured Party Document to the Collateral Agent may be exercised from time to time and as often as may be deemed expedient by the Collateral Agent. (c) REINSTATEMENT. If the Collateral Agent shall have proceeded to enforce any right, remedy or power under this Agreement or any other Shared Security Document and the proceeding for the enforcement thereof shall have been discontinued or abandoned for any reason or shall have been determined adversely to the Collateral Agent, then the Borrower, the Collateral Agent and the Facility Parties shall, subject to any determination in such proceeding, severally and respectively be restored to their former positions and rights hereunder or thereunder in all respects and, subject to any determination in such proceeding, thereafter all rights, remedies and powers of the Collateral Agent and shall continue as though no such proceeding had been taken. (d) ORIGINAL INSTRUMENTS. All rights of action and of asserting claims upon or under this Agreement and the other Shared Security Documents may be enforced by the Collateral Agent without the possession of any original or executed instrument evidencing or governing any Obligation and without the production thereof at any trial or other proceeding relative to such claims, and any suit or proceeding instituted by the Collateral Agent shall be, subject to the provisions of this Agreement, brought in its name as Collateral Agent, and any recovery of judgment shall be held as part of the Shared Collateral Account. 3.07. CERTAIN WAIVERS. (a) VALUATION, ETC. The Borrower agrees, to the extent it may lawfully do so, that it will not at any time in any manner whatsoever claim or take the benefit or advantage of, any appraisement, valuation, stay, extension, moratorium, turnover or redemption Law, or any Law permitting it to direct the order in which the Shared Collateral shall be sold, now or at any time hereafter in force, which may delay, prevent or otherwise affect the performance or enforcement of this Agreement or any other Shared Security Document, hereby waives all benefit or advantage of all such Laws, and covenants that it will not hinder, delay or impede under color of any such Law the execution of any power granted to the Collateral Agent in this Agreement or any other Shared Security Document but will suffer and permit the execution of every such power as though no such Law were in force. (b) MARSHALLING, ETC. The Borrower, to the extent it may lawfully do so, on behalf of itself and all who may claim through or under it, including without limitation any and all subsequent creditors, vendees, assignees and lienors, waives and releases all rights to demand or to have any marshalling of the Shared Collateral upon any sale, whether made under any power of sale granted -18- 228 herein or in any other Shared Security Document or pursuant to judicial proceedings or upon any foreclosure or any enforcement of this Agreement or any other Shared Security Document, and consents and agrees that all the Shared Collateral may at any such sale be offered and sold as an entirety. To the fullest extent permitted by Law, the Borrower hereby waives any and all rights it may at any time have to require the Collateral Agent or any other Secured Party to exercise its rights and remedies under this Agreement, any other Shared Security Document any other Secured Party Document, any other agreement or instrument, at law or in equity, as between different Persons or against any single Person in any particular order, method or manner. (c) NOTICES, ETC. The Borrower waives, to the extent permitted by applicable Law, presentment, demand, protest and any notice of any kind (except notices expressly required hereunder or under any other Shared Security Document) in connection with this Agreement and the other Shared Security Documents and any action taken by the Collateral Agent with respect to the Shared Collateral. 3.08. LIMITATION ON COLLATERAL AGENT'S DUTY IN RESPECT OF SHARED COLLATERAL. Beyond its duties expressly provided herein or in any other Shared Security Document and its duty to account to the Borrower and Facility Parties for moneys and other property received by it hereunder or under any other Shared Security Document, the Collateral Agent shall not have any duty to the Borrower or Facility Party as to any other Shared Collateral in its possession or control or in the possession or control of any of its agents or nominees, or any income thereon or as to the preservation of rights against prior parties or any other rights pertaining thereto. 3.09. FEES, TAXES, ETC. The Borrower agrees to pay upon demand any and all Lien search, stamp, document, transfer, filing, recording, registration, excise and sales taxes and fees and any and all similar impositions now or hereafter payable or determined in good faith by the Collateral Agent to be payable in connection with this Agreement, the other Shared Security Documents, or any other documents, instruments or transactions pursuant to or in connection herewith or therewith, and agrees to save the Collateral Agent and each Facility Party harmless from and against any and all present or future claims or liabilities with respect to, or resulting from any delay in paying or omission to pay, any such fees, taxes or impositions. Such agreement extends, without limitation, to any and all state documentary stamp or intangible tax with respect to the filing or recording of this Agreement or any financing statements or mortgages or other instruments in connection herewith or in connection with any other Shared Security Document, regardless of whom such taxes are levied or assessed against. The obligations of the Borrower under this Section 3.09 shall survive the termination of the other provisions of this Agreement and the termination of any other Shared Security Document. 3.10. MAINTENANCE OF LIENS. The Borrower at its expense will cause financing statements (and continuation statements with respect to such financing statements), and any mortgages or other appropriate instruments from time to time constituting Shared Security Documents, to be recorded, published, registered and filed in such manner, at such times and in such places, and will pay all such recording, publishing, registration, filing and other taxes, fees and charges, and will do such other acts and things as may be required from time to time to establish, perfect, maintain, preserve, and protect the Liens of the Shared Security Documents as valid and perfected Liens on the Shared Collateral covered thereby, prior to all other Liens except Facility Permitted Liens. -19- 229 3.11. FURTHER ASSURANCES. At any time and from time to time, upon the reasonable request of the Collateral Agent, and at the expense of the Borrower, the Borrower will promptly execute and deliver any and all such further instruments and documents and take such further actions as are necessary or requested to establish, confirm, maintain and continue and to perfect, or to protect the perfection of, the Liens created and intended to be created hereunder and under the other Shared Security Documents, and all assignments made or intended to be made pursuant thereto, or to obtain the full benefits of this Agreement and the other Shared Security Documents and of the rights and powers herein and therein granted, including, without limitation, the execution and delivery of any further deeds, conveyances, mortgages, assignments, security agreements, pledges and further assurances and the filing of any financing or continuation statements. The Borrower also hereby authorizes the Collateral Agent to sign and file financing statements and continuation statements at any time with respect to any Shared Collateral without the signature of the Borrower (where permitted by applicable Law) and appoints the Collateral Agent as its attorney-in-fact to do all other acts and things which the Collateral Agent may deem necessary or advisable to preserve, perfect and continue perfected the Collateral Agent's Liens in the Shared Collateral. ARTICLE IV ACCOUNTS 4.01. SHARED COLLATERAL ACCOUNT. Not later than the first date on which funds are required to be deposited therein pursuant to this Agreement or any other Shared Security Document, the Collateral Agent shall maintain an account (the "Shared Collateral Account") at such office as it may designate from time to time in its own name as Collateral Agent. All right, title and interest in and to the Shared Collateral Account and funds on deposit therein and investments and reinvestments thereof shall vest in the Collateral Agent and shall be subject to the exclusive dominion and control of the Collateral Agent. 4.02. INVESTMENT. The Collateral Agent shall invest and reinvest moneys on deposit in the Shared Collateral Account in its own name in such Restricted Investments as the Collateral Agent may select in its discretion, and all such investments and the interest and income received thereon and the net proceeds on the sale or redemption thereof shall be held in the Shared Collateral Account. The Collateral Agent shall not be responsible or liable to any other Person for any loss or decline in value of such investments or any loss or penalties incurred in the liquidation or sale thereof. The Collateral Agent may liquidate investments prior to maturity to make a distribution pursuant to Section 4.04 hereof. 4.03. DEPOSITS. Except to the extent, if any, otherwise expressly provided in this Agreement or in another Shared Security Document, all moneys which are required by this Agreement or any other Shared Security Document to be delivered to the Collateral Agent in its capacity as such, or which are received by the Collateral Agent in its capacity as such in respect of any property described in the Shared Security Documents (as proceeds of Shared Collateral or otherwise), shall be deposited by the Collateral Agent in the Shared Collateral Account. No other funds shall be deposited in the Shared Collateral Account or commingled with funds in the Shared Collateral Account. 4.04. DISTRIBUTIONS. The Collateral Agent shall make distributions from the Shared Collateral Account from time to time when directed by the Directing Party or at such other times as it -20- 230 may in good faith believe are required by Law, except that the Collateral Agent shall have the right at any time to apply monies held by it in the Shared Collateral Account to the payment of due and unpaid Collateral Agent Obligations. All remaining monies held by the Collateral Agent in the Shared Collateral Account shall be distributed by the Collateral Agent as follows: First: to the Collateral Agent for any Collateral Agent Obligations due and unpaid upon such distribution date; Second: to (a) the Revolving Credit Agent, for the payment of all amounts due to the Revolving Credit Agent in its capacity as such which are unpaid on such distribution date, (b) the Term Loan Agent, for the payment of all amounts due to the Term Loan Agent in its capacity as such which are unpaid on such distribution date, and (c) the Note Backup Agent, for the payment of all amounts due to the Note Backup Agent in its capacity as such which are unpaid on such distribution date; provided, that if such monies to be distributed by the Collateral Agent shall be insufficient to pay in full the amounts referred to in the foregoing clauses (a), (b) and (c), then such distribution shall be made ratably (without priority of any one over any other) to the Revolving Credit Agent, the Term Loan Agent and the Note Backup Agent in proportion to the respective amounts referred to in the foregoing clauses (a), (b) and (c) on such distribution date; Third: to (a) the Revolving Credit Agent, for the account of the Revolving Credit Parties, in an amount equal to all amounts due and payable to the Revolving Credit Parties on such distribution date with respect to Revolving Credit Obligations (including obligations to pay Revolving Credit LOC Unreimbursed Draws and to provide cash collateral for outstanding undrawn Letters of Credit, but only to the extent the aggregate Revolving Credit LOC Exposure exceeds the amount on deposit in the Revolving Credit LOC Collateral Account) (to the extent not paid pursuant to item "Second" above), (b) the Term Loan Agent, for the account of the Term Loan Parties, in an amount equal to all amounts due and payable to the Term Loan Parties on such distribution date with respect to Term Loan Obligations (to the extent not paid pursuant to item "Second" above), (c) the Note Backup Agent, for the account of the Note Backup Parties, in an amount equal to all amounts due and payable to the Note Backup Parties on such distribution date with respect to Note Backup Obligations (including obligations to pay Note Backup LOC Unreimbursed Draws and to provide cash collateral for outstanding undrawn Note Backup LOCs, but only to the extent the aggregate Note Backup LOC Exposure exceeds the amount on deposit in the Note Backup LOC Collateral Account) (to the extent not paid pursuant to item "Second" above), and (d) each Swap Party, in an amount (calculated separately for each Swap Agreement to which such Swap Party is party) equal to the lesser of (i) all amounts due and payable to the Swap Party on such distribution date with respect to Swap Obligations under or in connection with such Swap Agreement or (ii) the Swap Shared Security Cap for such Swap Agreement minus the aggregate amount of all distributions previously made from time to time to the Swap Party with respect to Swap Obligations under or in connection with such Swap Agreement pursuant to this item "Third"; provided, that if such moneys to be distributed by the Collateral Agent shall be insufficient to pay in full the amounts referred to in the foregoing clauses (a), (b), (c) and (d), then such distribution shall be made ratably (without priority of any one over any other) to the Revolving Credit Agent, the Term Loan Agent, the Note Backup Agent and the Swap Parties in proportion to the respective amounts referred to in the foregoing clauses (a), (b), (c) and (d) on such distribution date; and -21- 231 further provided, that no further distributions shall be made under this item "Third" to a Swap Party on account of Swap Obligations under or in connection with a particular Swap Agreement once the aggregate amount of all distributions made from time to time to such Swap Party on account of Swap Obligations under or in connection with such Swap Agreement pursuant to clause (d) of this item "Third" shall equal the Swap Shared Security Cap for such Swap Agreement; and further provided, that no further distributions shall be made under this item "Third" once the aggregate amount of all distributions made from time to time pursuant to clause (d) of this item "Third" to each Swap Party on account of the Swap Obligations under or in connection with each Swap Agreement shall equal the Swap Shared Security Cap for all such Swap Agreements; Fourth: to (a) the Revolving Credit Agent, for the account of the Revolving Credit Parties, in an amount equal to all amounts due and payable to the Revolving Credit Parties on such distribution date with respect to Revolving Credit Obligations (including obligations to pay Revolving Credit LOC Unreimbursed Draws and to provide cash collateral for outstanding undrawn Letters of Credit, but only to the extent the aggregate Revolving Credit LOC Exposure exceeds the amount on deposit in the Revolving Credit LOC Collateral Account) (to the extent not paid pursuant to items "Second" and "Third" above), (b) the Term Loan Agent, for the account of the Term Loan Parties, in an amount equal to all amounts due and payable to the Term Loan Parties on such distribution date with respect to Term Loan Obligations (to the extent not paid pursuant to items "Second" and "Third" above), and (c) the Note Backup Agent, for the account of the Note Backup Parties, in an amount equal to all amounts due and payable to the Note Backup Parties on such distribution date with respect to Note Backup Obligations (including obligations to pay Note Backup LOC Unreimbursed Draws and to provide cash collateral for outstanding undrawn Note Backup LOCs, but only to the extent the aggregate Note Backup LOC Exposure exceeds the amount on deposit in the Note Backup LOC Collateral Account) (to the extent not paid pursuant to items "Second" and "Third" above); provided, that if such moneys to be distributed by the Collateral Agent shall be insufficient to pay in full the amounts referred to in the foregoing clauses (a), (b) and (c), then such distribution shall be made ratably (without priority of any one over any other) to the Revolving Credit Agent, the Term Loan Agent and the Note Backup Agent in proportion to the respective amounts referred to in the foregoing clauses (a), (b) and (c) on such distribution date; Fifth: to each Swap Party, in an amount equal to all amounts due and payable to the Swap Party on such distribution date with respect to Swap Obligations (to the extent not paid pursuant to item "Third" above); provided, that if such moneys to be distributed by the Collateral Agent shall be insufficient to pay in full the amounts referred to in the foregoing clause, then such distribution shall be made ratably (without priority of any one over any other) to the Swap Parties in proportion to the respective amounts referred to in the foregoing clause on such distribution date; and Finally: if all Revolving Credit Obligations, Term Loan Obligations, Note Backup Obligations and Swap Obligations (other than, in each case, Contingent Indemnification Obligations) shall have been indefeasably paid in full in cash, all commitments to extend credit under the Revolving Credit Agreement shall have terminated, all outstanding Letters of Credit shall have terminated, all commitments to extend credit under the Note Backup Agreement shall have terminated, all outstanding Note Backup LOCs shall have terminated, and all Interest -22- 232 Rate Hedge Agreements under the Swap Documents have terminated, any surplus then remaining shall be paid to the Borrower or its successors or assigns or to whomsoever may be lawfully entitled to receive the same or as a court of competent jurisdiction may direct. 4.05. CALCULATIONS. In making the determinations and allocations required by Section 4.04 hereof, the Collateral Agent may rely upon information supplied by (a) the Revolving Credit Agent, as to the amounts described in clause (a) of item "Second", clause (a) of item "Third", and clause (a) of item "Fourth", (b) the Term Loan Agent, as to the amounts described in clause (b) of item "Second", clause (b) of item "Third", and clause (b) of item "Fourth", (c) the Note Backup Agent, as to the amounts described in clause (c) of item "Second", clause (c) of item "Third" and clause (c) of item "Fourth," and (d) each Swap Party, as to the amounts described in clause (d) of item "Third" and item "Fifth," and the Collateral Agent shall have no liability to any Secured Party for actions taken in reliance on such information. All distributions made by the Collateral Agent pursuant to Section 4.04 hereof shall be final as against the Collateral Agent (subject to any decree of any court of competent jurisdiction), and the Collateral Agent shall have no duty to inquire as to the application by any Secured Party of any amounts distributed to it. 4.06. APPLICATION OF MONIES. Each Secured Party agrees to apply monies distributed under Section 4.04 hereof to the corresponding obligation described therein. 4.07. REVOLVING CREDIT LOC COLLATERAL ACCOUNT. (a) REVOLVING CREDIT LOC COLLATERAL ACCOUNT. Not later than the first date on which funds are required to be deposited therein pursuant to this Agreement or any other Shared Security Document, the Collateral Agent shall maintain an account (the "Revolving Credit LOC Collateral Account") at such office as it may designate from time to time in its own name as Collateral Agent. (b) INVESTMENT. The Collateral Agent shall invest and reinvest moneys on deposit in the Revolving Credit LOC Collateral Account in its own name in such Restricted Investments as the Collateral Agent may select in its discretion, and all such investments and the interest and income received thereon and the net proceeds on the sale or redemption thereof shall be held in the Revolving Credit LOC Collateral Account. The Collateral Agent shall not be responsible or liable to any other Person for any loss or decline in value of such investments or any loss or penalties incurred in the liquidation or sale thereof. The Collateral Agent may liquidate investments prior to maturity to make a distribution pursuant to Section 4.07(d) hereof or otherwise permitted or required pursuant to this Agreement. (c) DEPOSITS. Notwithstanding anything to the contrary contained herein, all funds distributable from the Shared Collateral Account under Section 4.04 hereof on account of Revolving Credit LOC Exposure shall be deposited into the Revolving Credit LOC Collateral Account. In addition, the Revolving Credit Agent shall remit to the Collateral Agent, for deposit into the Revolving Credit LOC Collateral Account, such amounts as the Revolving Credit Agreement or any Revolving Credit Document requires or permits to be deposited therein. No other funds shall be deposited in the Revolving Credit LOC Collateral Account or commingled with funds in the Revolving Credit LOC Collateral Account. -23- 233 (d) DISBURSEMENTS. The Collateral Agent shall remit funds on deposit from time to time in the Revolving Credit LOC Collateral Account to, or at the direction of, the Revolving Credit Agent when and as requested by the Revolving Credit Agent for the reimbursement of Revolving Credit LOC Unreimbursed Draws, as and when the same become due and payable, if and to the extent the Borrower fails to pay the same. The Revolving Credit Agent shall forthwith remit, or cause the Collateral Agent to remit, such funds to the Secured Party which is the issuer of such Revolving Credit LOC, who shall apply such funds to payment of such Revolving Credit LOC Unreimbursed Draw. If at any time the amount on deposit in the Revolving Credit LOC Collateral Account exceeds the aggregate Revolving Credit LOC Exposure with respect to all outstanding Letters of Credit, the excess shall be deposited into the Shared Collateral Account. 4.08. NOTE BACKUP LOC COLLATERAL ACCOUNT. (a) NOTE BACKUP LOC COLLATERAL ACCOUNT. Not later than the first date on which funds are required to be deposited therein pursuant to this Agreement or any other Shared Security Document, the Collateral Agent shall maintain an account (the "Note Backup LOC Collateral Account") at such office as it may designate from time to time in its own name as Collateral Agent. (b) INVESTMENT. The Collateral Agent shall invest and reinvest moneys on deposit in the Note Backup LOC Collateral Account in its own name in such Restricted Investments as the Collateral Agent may select in its discretion, and all such investments and the interest and income received thereon and the net proceeds on the sale or redemption thereof shall be held in the Note Backup LOC Collateral Account. The Collateral Agent shall not be responsible or liable to any other Person for any loss or decline in value of such investments or any loss or penalties incurred in the liquidation or sale thereof. The Collateral Agent may liquidate investments prior to maturity to make a distribution pursuant to Section 4.08(d) hereof or otherwise permitted or required pursuant to this Agreement. (c) DEPOSITS. Notwithstanding anything to the contrary contained herein, all funds distributable from the Shared Collateral Account under Section 4.04 hereof on account of Note Backup LOC Exposure shall be deposited into the Note Backup LOC Collateral Account. In addition, the Note Backup Agent shall remit to the Collateral Agent, for deposit into the Note Backup LOC Collateral Account, such amounts as the Note Backup Agreement or any Note Backup Document requires or permits to be deposited therein. No other funds shall be deposited in the Note Backup LOC Collateral Account or commingled with funds in the Note Backup LOC Collateral Account. (d) DISBURSEMENTS. The Collateral Agent shall remit funds on deposit from time to time in the Note Backup LOC Collateral Account to, or at the direction of, the Note Backup Agent when and as requested by the Note Backup Agent for the reimbursement of Note Backup LOC Unreimbursed Draws, as and when the same become due and payable, if and to the extent the Borrower fails to pay the same. The Note Backup Agent shall forthwith remit, or cause the Collateral Agent to remit, such funds to the Secured Party which is the issuer of such Note Backup LOC, who shall apply such funds to payment of such Note Backup LOC Unreimbursed Draw. If at any time the amount on deposit in the Note Backup LOC Collateral Account exceeds the aggregate Note Backup LOC Exposure with respect to all outstanding Note Backup LOCs, the excess shall be deposited into the Shared Collateral Account. -24- 234 4.09. GENERAL PROVISIONS RELATING TO ACCOUNTS. To the extent that the Collateral Agent is permitted or required by this Agreement or any other Shared Security Document to establish or maintain any deposit, custody or other account (including but not limited to the Shared Collateral Account, the Revolving Credit LOC Collateral Account and the Note Backup LOC Collateral Account), the Borrower shall from time to time pay to the Collateral Agent, for its own account, all custodial fees, service charges, and other fees and charges as the Collateral Agent customarily charges in respect of similar accounts from time to time. The Collateral Agent may establish and maintain such subaccounts as it may elect from time to time within any such account, and to the extent it does so, each such subaccount shall be accounted for separately and the Collateral Agent may apportion deposits and withdrawals among such subaccounts in such manner as it may elect. Nothing in this Agreement or any other Secured Party Document shall be construed to require the Collateral Agent to offer to make any investment in the Collateral Agent's own certificates of deposit or in other investment media of the Collateral Agent. Notwithstanding any other provision of this Agreement or any other Shared Security Document, the Agent shall not be liable for any failure to perform, inability to perform, or delay in performance due to acts of God, war, civil commotion, governmental action, fire, explosion, strikes, other labor disturbances, equipment malfunction, interruption of communications facilities, any action, non-action or delayed action on the part of any other Person other than the Collateral Agent, or other causes beyond the Collateral Agent's reasonable control. ARTICLE V THE COLLATERAL AGENT 5.01. APPOINTMENT. Each Facility Party hereby irrevocably appoints Mellon Bank, N.A. to act as Collateral Agent for the Facility Parties under this Agreement and the other Shared Security Documents. Each Facility Party hereby irrevocably authorizes the Collateral Agent to take such action on behalf of the Facility Parties under the provisions of this Agreement and the other Shared Security Documents, and to exercise such powers and to perform such duties, as are expressly delegated to or required of the Collateral Agent by the terms hereof or thereof, together with such powers as are reasonably incidental thereto. Mellon Bank, N.A. hereby agrees to act as Collateral Agent on behalf of the Facility Parties on the terms and conditions set forth in this Agreement and the other Shared Security Documents, subject to its right to resign as provided herein. Each Facility Party hereby irrevocably authorizes the Collateral Agent to execute and deliver each of the Shared Security Documents and to accept delivery of such of the other Shared Security Documents as may not require execution by the Collateral Agent. Each Facility Party hereby agrees that the rights and remedies granted to the Collateral Agent under the Shared Security Documents shall be exercised exclusively by the Collateral Agent, and that no Facility Party shall have any right individually to exercise any such right or remedy, except to the extent, if any, expressly provided herein or therein. 5.02. GENERAL NATURE OF COLLATERAL AGENT'S DUTIES. (a) NO IMPLIED DUTIES. The Collateral Agent shall have no duties or responsibilities except those expressly set forth in this Agreement and the other Shared Security Documents, and no implied duties or responsibilities on the part of the Collateral Agent shall be read into this Agreement or any Shared Security Document or shall otherwise exist. -25- 235 (b) NOT A FIDUCIARY. The duties and responsibilities of the Collateral Agent under this Agreement and the other Shared Security Documents shall be mechanical and administrative in nature, and the Collateral Agent shall not have a fiduciary relationship in respect of any Facility Party. (c) AGENT OF FACILITY PARTIES. The Collateral Agent is and shall be solely the agent of the Facility Parties. The Collateral Agent does not assume, and shall not at any time be deemed to have, any relationship of agency or trust with or for the Borrower or any Person other than the Facility Parties. The provisions of this Article V are for the benefit of the Facility Parties (and the other Persons named in Section 5.07 hereof), and the Borrower shall not have any rights under any of the provisions of this Article V (other than Sections 5.11(a) and 5.15(b) hereof). (d) NO OBLIGATION TO TAKE ACTION. The Collateral Agent shall be under no obligation to take any action hereunder or under any other Shared Security Document if the Collateral Agent believes in good faith that taking such action may conflict with any Law or any provision of this Agreement or any other Shared Security Document, or may require the Collateral Agent to qualify to do business in any jurisdiction where it is not then so qualified. 5.03. EXERCISE OF POWERS. Subject to the other provisions of this Agreement and the other Shared Security Documents, the Collateral Agent shall take any action of the type specified in this Agreement or any other Shared Security Document as being within the Collateral Agent's rights, powers or discretion in accordance with directions from the Directing Party (or, to the extent this Agreement or such Shared Security Document expressly requires the direction or consent of some other Person or set of Persons, then instead in accordance with the directions of such other Person or set of Persons). In the absence of such directions, the Collateral Agent shall have the authority (but under no circumstances shall be obligated), in its sole discretion, to take any such action, except to the extent this Agreement or such Shared Security Document expressly requires the direction or consent of the Directing Party (or some other Person or set of Persons), in which case the Collateral Agent shall not take such action absent such direction or consent. Any action or inaction pursuant to such direction, discretion or consent shall be binding on all the Facility Parties. The Collateral Agent shall not have any liability to any Person as a result of (x) the Collateral Agent acting or refraining from acting in accordance with the directions of the Directing Party (or other applicable Person or set of Persons), (y) the Collateral Agent refraining from acting in the absence of instructions to act from the Directing Party (or other applicable Person or set of Persons), whether or not the Collateral Agent has discretionary power to take such action, or (z) the Collateral Agent taking discretionary action it is authorized to take under this Section (subject, in the case of this clause (z), to the provisions of Section 5.04(a) hereof). 5.04. GENERAL EXCULPATORY PROVISIONS. (a) GENERAL. The Collateral Agent shall not be liable for any action taken or omitted to be taken by it under or in connection with this Agreement or any other Shared Security Document, unless caused by its own gross negligence or willful misconduct. (b) COLLATERAL AGENT NOT RESPONSIBLE FOR SHARED SECURITY DOCUMENTS, ETC. The Collateral Agent shall not be responsible for (i) the execution, delivery, effectiveness, enforceability, genuineness, validity or adequacy of this Agreement or any other Secured Party Document, (ii) any recital, representation, warranty, document, certificate, report or statement in, provided for in, or -26- 236 received under or in connection with, this Agreement or any other Secured Party Document, (iii) any failure of the Borrower or any Facility Party to perform any of their respective obligations under this Agreement or any other Secured Party Document, (iv) the existence, validity, enforceability, perfection, recordation, priority, adequacy or value, now or hereafter, of any Lien or other direct or indirect security afforded or purported to be afforded by any of the Shared Security Documents or otherwise from time to time, or (v) except to the extent, if any, expressly provided in the Shared Security Documents, caring for, protecting, insuring, or paying any taxes, charges or assessments with respect to any Shared Collateral. (c) NO DUTY OF INQUIRY. The Collateral Agent shall not be under any obligation to ascertain, inquire or give any notice relating to (i) the performance or observance of any of the terms or conditions of this Agreement or any other Shared Security Document on the part of the Borrower, (ii) the business, operations, condition (financial or otherwise) or prospects of the Borrower or any other Person, or (iii) the existence of any default under any Secured Party Document. (d) NOTICES. The Collateral Agent shall not be under any obligation, either initially or on a continuing basis, to provide any Facility Party with any notices, reports or information of any nature, whether in its possession presently or hereafter, except for such notices, reports and other information expressly required by this Agreement or any other Shared Security Document to be furnished by the Collateral Agent to such Facility Party. 5.05. ADMINISTRATION BY THE COLLATERAL AGENT. (a) RELIANCE ON NOTICES. The Collateral Agent may rely upon any notice or other communication of any nature (written or oral, including but not limited to telephone conversations, whether or not such notice or other communication is made in a manner permitted or required by this Agreement or any Shared Security Document) purportedly made by or on behalf of the proper party or parties, and the Collateral Agent shall not have any duty to verify the identity or authority of any Person giving such notice or other communication. (b) CONSULTATION. The Collateral Agent may consult with legal counsel (including, without limitation, in-house counsel for the Collateral Agent or in-house or other counsel for the Borrower), independent public accountants and any other experts selected by it from time to time, and the Collateral Agent shall not be liable for any action taken or omitted to be taken in good faith by it in accordance with the advice of such counsel, accountants or experts. (c) RELIANCE ON CERTIFICATES, ETC. The Collateral Agent may conclusively rely upon the truth of the statements and the correctness of the opinions expressed in any certificates or opinions furnished to the Collateral Agent in accordance with the requirements of this Agreement or any other Shared Security Document. Whenever the Collateral Agent shall deem it necessary or desirable that a matter be proved or established with respect to the Borrower or any Facility Party, such matter may be established by a certificate of the Borrower or such Facility Party, as the case may be, and the Collateral Agent may conclusively rely upon such certificate (unless other evidence with respect to such matter is specifically prescribed in this Agreement or another Shared Security Document). (d) INDEMNITY. The Collateral Agent may fail or refuse to take any action unless it shall be indemnified to its satisfaction from time to time against any and all amounts, liabilities, -27- 237 obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature which may be imposed on, incurred by or asserted against the Collateral Agent by reason of taking or continuing to take any such action. (e) PERFORMANCE THROUGH AGENTS. The Collateral Agent may perform any of its duties under this Agreement or any other Shared Security Document by or through agents or attorneys-in-fact. The Collateral Agent shall not be responsible for the negligence or misconduct of any agents or attorneys-in-fact selected by it with reasonable care. 5.06. NO RELIANCE BY FACILITY PARTIES. Each Facility Party hereby acknowledges as follows: (a) Neither the Collateral Agent nor any other Facility Party has made any representations or warranties to it, and no act taken hereafter by the Collateral Agent or any other Facility Party shall be deemed to constitute any representation or warranty by the Collateral Agent or such other Facility Party to it. (b) It has, independently and without reliance upon the Collateral Agent or any other Facility Party, and based upon such documents and information as it has deemed appropriate, made its own credit and legal analysis and decision to enter into this Agreement and the other Secured Party Documents. (c) It will, independently and without reliance upon the Collateral Agent or any other Facility Party, and based upon such documents and information as it shall deem appropriate at the time, make its own decisions to take or not take action under or in connection with this Agreement and the other Secured Party Documents. 5.07. INDEMNIFICATION. Each Facility Lender hereby agrees to reimburse and indemnify each Collateral Agent Indemnified Party (to the extent not reimbursed by the Borrower and without limitation of the obligations of the Borrower to do so), ratably in proportion to its Facility Lender Percentage, from and against, any and all losses, liabilities, claims, damages, expenses, obligations, penalties, actions, judgments, suits, costs or disbursements of any kind or nature whatsoever (including, without limitation, the fees and disbursements of outside counsel for such Collateral Agent Indemnified Party in connection with any investigative, administrative or judicial proceeding commenced or threatened, whether or not such Collateral Agent Indemnified Party shall be designated a party thereto) that may at any time be imposed on, asserted against or incurred by such Collateral Agent Indemnified Party as a result of, or arising out of, or in any way related to or by reason of this Agreement or any other Secured Party Document, any transaction from time to time contemplated hereby or thereby, or any transaction financed or secured in whole or in part, directly or indirectly, with the proceeds of any extension of credit hereunder or thereunder or the proceeds thereof (and without in any way limiting the generality of the foregoing, including any grant of any Lien on Collateral or any exercise by the Collateral Agent or any Facility Party of any of its rights or remedies under this Agreement or any other Shared Security Document); but excluding any portion of such losses, liabilities, claims, damages, expenses, obligations, penalties, actions, judgments, suits, costs or disbursements resulting from the gross negligence or willful misconduct of such Collateral Agent Indemnified Party, as finally determined by a court of competent jurisdiction. The agreements contained in this Section 5.07 shall survive the termination of this Agreement and the other Shared Security Documents. 5.08. COLLATERAL AGENT IN ITS INDIVIDUAL CAPACITY. The Collateral Agent may be a Facility Party, and in such event the Collateral Agent, in its capacity as Facility Party, shall have the same rights and powers under this Agreement and each other Secured Party Document as any other Facility Party and may exercise the same as thought it were not the Collateral Agent. The Collateral -28- 238 Agent and its affiliates may, without liability to account, make loans to, accept deposits from, acquire debt or equity interests in, enter into interest rate or currency hedging transactions with, act as trustee under indentures of, and engage in any other business or transaction with, the Borrower or any stockholder, subsidiary or affiliate of the Borrower, as though the Collateral Agent were not the Collateral Agent hereunder. 5.09. FACILITY PARTIES. Each Facility Party agrees to deliver to the Collateral Agent promptly upon its request such information with respect to the Obligations held by such Secured Party (or, in the case of a Facility Agent, Obligations under the Revolving Credit Agreement, Term Loan Agreement or Note Backup Agreement, as the case may be, agented by such Facility Agent) as the Collateral Agent may request from time to time for the purpose of taking any action required or permitted to be taken by the Collateral Agent under this Agreement or any other Shared Security Document, and the Collateral Agent may rely conclusively upon such information. Without limiting the generality of the foregoing, the Collateral Agent may rely conclusively upon information supplied by each Facility Agent as to the identity of each Facility Party under the Revolving Credit Agreement, Term Loan Agreement or Note Backup Agreement, as the case may be, agented by such Facility Agent, and as to the Facility Lender Percentage of each Facility Lender at any time. Any authority, direction or consent of any Person who at the time of giving such authority, direction or consent is a Facility Party shall be conclusive and binding on each present and subsequent holder, transferee or assignee of such Facility Party. 5.10. SUCCESSOR COLLATERAL AGENT. The Collateral Agent may resign at any time by giving 45 days' prior written notice thereof to each Facility Agent and the Borrower. The Collateral Agent may be removed by the Facility Agents, acting together, at any time by giving 10 days' prior written notice thereof to the Collateral Agent and the Borrower. Upon any such resignation or removal, the Facility Agents, acting together, shall have the right to appoint a successor Collateral Agent. If no successor Collateral Agent shall have been so appointed and consented to, and shall have accepted such appointment, within 30 days after such notice of resignation or removal, then the retiring Collateral Agent may (but shall not be required to) appoint a successor Collateral Agent. If no successor Collateral Agent shall be appointed and shall have accepted such appointment within thirty days after such notice of resignation or removal, any Secured Party may apply to any court of competent jurisdiction to appoint a successor Collateral Agent until such time, if any, as a successor Collateral Agent shall have been appointed as provided in this Section 5.10. Any successor so appointed by such court shall immediately and without further act be superseded by any successor Collateral Agent appointed by the Agent as provided in this Section 5.10. Each successor Collateral Agent shall be a commercial bank or trust company organized under the laws of the United States of America or any State thereof and having a combined capital and surplus of at least $500,000,000. Upon the acceptance by a successor Collateral Agent of its appointment as Collateral Agent hereunder, such successor Collateral Agent shall thereupon succeed to and become vested with all the properties, rights, powers, privileges and duties of the former Collateral Agent in its capacity as such, without further act, deed or conveyance. Upon the effective date of resignation or removal of a retiring Collateral Agent, such Collateral Agent shall be discharged from its duties as such under this Agreement and the other Shared Security Documents, but the provisions of this Agreement shall inure to its benefit as to any actions taken or omitted by it while it was Collateral Agent under this Agreement. If and so long as no successor Collateral Agent shall have been appointed, then any notice or other communication required or permitted to be -29- 239 given by the Collateral Agent shall be sufficiently given if given by the Directing Party, all notices or other communications required or permitted to be given to the Collateral Agent shall be given to each Lender, and all payments to be made to the Collateral Agent shall be made directly to the Borrower or Facility Party for whose account such payment is made. Notwithstanding any other provision of this Agreement or any other Shared Security Document to the contrary, neither the Collateral Agent nor any of its directors, officers, employees or agents shall be liable to any Facility Party for any action taken or omitted to be taken by it or them under or in connection with this Section 5.10. 5.11. ADDITIONAL COLLATERAL AGENTS. (a) APPOINTMENT. Whenever the Collateral Agent shall deem it necessary or advisable, for its own protection in the performance of its duties hereunder or in the interest of the Facility Parties, or in the event that the Collateral Agent shall have been requested to do so by the Directing Party, the Collateral Agent and the Borrower shall execute and deliver all instruments and agreements necessary or advisable, in the judgment of the Collateral Agent, to constitute another bank or trust company, or one or more other Persons approved by the Collateral Agent and, so long as no Facility Event of Default shall have occurred and be continuing, consented to by the Borrower (which consent shall not be unreasonably withheld or delayed), either to act as an additional collateral agent or trustee of all or any part of the Shared Collateral, jointly with the Collateral Agent, or to act as a separate collateral agent or trustee of all or any part of the Shared Collateral (any such additional or separate collateral agent or trustee being herein called an "Additional Collateral Agent"). If the Borrower shall have withheld its consent as provided above and shall not have joined in the execution of such instruments and agreements within ten days after the Borrower receives a written request from the Collateral Agent to do so, or if a Facility Event of Default has occurred and is continuing, the Collateral Agent may act under the foregoing provisions of this Section 5.11(a) without the concurrence of the Borrower and execute and deliver such instruments and agreements on behalf of the Borrower. The Borrower hereby irrevocably appoints the Collateral Agent as its agent and attorney-in-fact to act for it under the foregoing provisions of this Section 5.11(a) in any such contingency. (b) PROVISIONS. Every Additional Collateral Agent shall, to the extent permitted by Law, be appointed and act and be such, subject to the following provisions and conditions: (i) all powers, duties, obligations and rights conferred upon the Collateral Agent in respect of the receipt, custody, investment and payment of moneys, shall be exercised solely by the Collateral Agent; (ii) all other rights, powers, duties and obligations conferred or imposed upon the Collateral Agent hereunder and under the Shared Security Documents shall be conferred or imposed and exercised or performed by the Collateral Agent and such Additional Collateral Agent, jointly, as shall be provided in the instrument appointing such Additional Collateral Agent, except to the extent that under any law of any jurisdiction in which any particular act or acts are to be performed the Collateral Agent shall be incompetent or unqualified to perform such act or acts, or unless the performance of such act or acts would result in the imposition of any tax on the Collateral Agent which would not be imposed absent such joint acts or acts, in which event such rights, powers, duties and obligations shall be exercised and performed by such Additional Collateral Agent; -30- 240 (iii) no power given hereby or by the Shared Security Documents to, or with respect to which it is hereby or thereby provided may be exercised by, any such Additional Collateral Agent, shall be exercised hereunder or thereunder by such Additional Collateral Agent except jointly with, or with the consent of, the Collateral Agent, anything contained herein to the contrary notwithstanding; (iv) no Collateral Agent or Additional Collateral Agent shall be personally liable by reason of any act or omission of any other Person which is a Collateral Agent or Additional Collateral Agent; and (v) the Borrower and the Collateral Agent, at any time by an instrument in writing executed by them jointly, may accept the resignation of or remove any Additional Collateral Agent and, in that case by an instrument in writing executed by them jointly, may appoint a successor Additional Collateral Agent. If the Borrower shall not have joined in the execution of any such instrument within ten days after receipt of a written request from the Collateral Agent to do so as provided above, or if a Facility Event of Default shall have occurred and be continuing, the Collateral Agent shall have the power to accept the resignation of or remove any such Additional Collateral Agent and to appoint a successor without the consent of the Borrower, which hereby irrevocably appoints the Collateral Agent its agent and attorney-in-fact to act for it in such connection in any such contingency. If the Collateral Agent shall have appointed an Additional Collateral Agent as above provided, the Collateral Agent may at any time, by an instrument in writing, accept the resignation of or remove any such Additional Collateral Agent and the successor to any such Additional Collateral Agent shall be appointed by the Borrower and the Collateral Agent, or by the Collateral Agent alone pursuant to this Section 5.11. 5.12. CALCULATIONS. The Collateral Agent shall not be liable for any calculation, apportionment or distribution of payments made by it in good faith. If such calculation, apportionment or distribution is subsequently determined to have been made in error, the sole recourse of any Facility Party to whom payment was due but not made shall be to recover from the other Facility Parties any payment in excess of the amount to which they are determined to be entitled or, if the amount due was not paid by the Borrower, to recover such amount from the Borrower. 5.13. COLLATERAL AGENT'S FEE. The Borrower hereby agrees to pay to the Collateral Agent, from time to time upon demand, reasonable compensation (which shall not be limited by any provision of Law in regard to compensation of fiduciaries or of a trustee of an express trust) for its services hereunder and under the other Shared Security Documents; provided, that if and so long as the Collateral Agent is also the Revolving Credit Agent, the Term Loan Agent and the Note Backup Agent and no Facility Event of Default has occurred and is continuing, the Collateral Agent shall not be entitled to any compensation under this Section 5.13. 5.14. EXPENSES; INDEMNITY. (a) EXPENSES. The Borrower agrees to pay or cause to be paid and to save the Collateral Agent harmless against liability for the payment of all reasonable out-of-pocket costs and expenses (including but not limited to reasonable fees and expenses of outside counsel, including local counsel, auditors, and all other professional, accounting, evaluation and consulting costs) incurred by -31- 241 the Collateral Agent from time to time arising from or relating to (i) the negotiation, preparation, execution, delivery, administration and performance of this Agreement and the other Shared Security Documents, (ii) any requested amendments, modifications, supplements, waivers or consents (whether or not ultimately entered into or granted) to this Agreement or any Shared Security Document Document, (iii) the enforcement or preservation of rights under this Agreement or any Shared Security Document (including but not limited to any such costs or expenses arising from or relating to (A) the creation, perfection or protection of any Lien on any Shared Collateral, (B) the protection, collection, lease, sale, taking possession of, preservation of, or realization on, any Shared Collateral, including without limitation advances for taxes, filing fees and the like, (C) collection or enforcement by the Collateral Agent of any amount owing hereunder or thereunder, and (D) any litigation, proceeding, dispute, work-out, restructuring or rescheduling related in any way to this Agreement or the Shared Security Documents). (b) INDEMNITY. The Borrower hereby agrees to reimburse and indemnify the Collateral Agent, its affiliates, and the directors, officers, employees, attorneys and agents of each of the foregoing (the "Collateral Agent Indemnified Parties"), and each of them, and to hold each of them harmless from and against, any and all losses, liabilities, claims, damages, expenses, obligations, penalties, actions, judgments, suits, costs or disbursements of any kind or nature whatsoever (including, without limitation, the fees and disbursements of outside counsel for such Collateral Agent Indemnified Party in connection with any investigative, administrative or judicial proceeding commenced or threatened, whether or not such Collateral Agent Indemnified Party shall be designated a party thereto) that may at any time be imposed on, asserted against or incurred by such Collateral Agent Indemnified Party as a result of, or arising out of, or in any way related to or by reason of this Agreement or any other Secured Party Document, any transaction from time to time contemplated hereby or thereby, or any transaction financed or secured in whole or in part, directly or indirectly, with the proceeds of any extension of credit hereunder or thereunder or the proceeds thereof (and without in any way limiting the generality of the foregoing, including any grant of any Lien on Shared Collateral or any exercise by the Collateral Agent or any Facility Party of any of its rights or remedies under this Agreement or any other Shared Security Document); but excluding any portion of such losses, liabilities, claims, damages, expenses, obligations, penalties, actions, judgments, suits, costs or disbursements resulting from the gross negligence or willful misconduct of such Collateral Agent Indemnified Party, as finally determined by a court of competent jurisdiction. If and to the extent that the foregoing obligations of the Borrower under this Section 5.14(b), or any other indemnification obligation of the Borrower hereunder or under any other Shared Security Document, are unenforceable for any reason, the Borrower hereby agrees to make the maximum contribution to the payment and satisfaction of such obligations which is permissible under applicable Law. (c) INTEREST. All amounts payable by the Borrower to the Collateral Agent in its capacity as such under this Agreement or any other Shared Security Document shall bear interest for each day from the date when due to the date of payment (before and after judgment) at a rate per annum equal to 2% above the Base Rate Option (as such term is defined in the Term Loan Agreement as constituted on the date hereof). (d) SURVIVAL. The agreements contained in this Section 5.14 shall survive the termination of this Agreement and the other Shared Security Documents. 5.15. FINANCIAL AND OTHER INFORMATION; CONFIDENTIALITY. -32- 242 (a) FINANCIAL AND OTHER INFORMATION. Subject to Section 5.15(b), the Borrower authorizes the Collateral Agent to disclose to any actual or prospective assignee or participant in any Obligation, any and all financial and other information delivered to, received by, or otherwise in the possession of, the Collateral Agent from time to time relating to the Borrower, its Subsidiaries and affiliates, or the matters contemplated hereby or by the Secured Party Documents. (b) CONFIDENTIALITY. The Collateral Agent agrees to take reasonable precautions to maintain the confidentiality of information designated in writing as confidential and provided to it by the Borrower in connection with this Agreement; provided, however, that the Collateral Agent may disclose such information (i) at the request of any bank regulatory authority or other Governmental Authority or in connection with an examination of the Collateral Agent by any such Governmental Authority, (ii) pursuant to subpoena or other court process, (iii) to the extent the Collateral Agent is required (or believes in good faith that it is required) to do so in accordance with any applicable Law, (iv) to the Collateral Agent's independent auditors and other professional advisors, (v) in connection with the enforcement of any of its rights under or in connection with any Secured Party Document, (vi) to any other Secured Party, and (vii) to any actual or potential assignee or participant in any of the Obligations, or to any other actual or potential creditor of or participant in a credit to the Borrower or any of its Subsidiaries or affiliates, so long as, in the case of this clause (vii), such Person agrees to comply with the provisions of this Section 5.15(b). 5.16. MONEYS HELD AS COLLATERAL AGENT. All moneys received by the Collateral Agent under or pursuant to any provision of this Agreement or any other Shared Security Document shall be held by it as agent for the purposes for which they were paid or are held. The Collateral Agent shall not be liable for any interest thereon (except to the extent, if any, otherwise expressly provided herein or therein). ARTICLE VI MISCELLANEOUS 6.01. AMENDMENTS, SUPPLEMENTS AND WAIVERS. The Collateral Agent and the Borrower may from time to time enter into amend, modify or supplement this Agreement or any other Shared Security Document for the purpose of amending, adding to, or waiving any provisions of, this Agreement or any other Shared Security Document, releasing any Shared Collateral, releasing or limiting the obligations of the Borrower under any Shared Security Document, or changing in any manner the rights of the Collateral Agent, any Secured Party or the Borrower hereunder or thereunder. The Collateral Agent shall enter into such agreements from time to time as directed by the Facility Agents, acting together, and only as so directed; provided, that the Collateral Agent shall not be required, without its consent, to enter into any amendment of Article V hereof or any amendment which would impose additional duties or responsibilities upon it or otherwise affect its rights, interests or obligations; and further provided, that no direction by or consent of the Facility Agents shall be required (i) to any amendment that would do more than add to the covenants of the Borrower or surrender any right or power conferred upon the Borrower, or (ii) for any release of Shared Collateral in accordance with the provisions of this Agreement or the other Shared Security Documents. Any such amendment, modification or supplement made in accordance with this Section 6.01 shall be binding upon the Borrower and each Secured Party and their respective successors and assigns. No -33- 243 amendment, modification or supplement relating hereto or to any other Shared Security Document shall be effective unless in writing manually signed by or on behalf of the party to be charged therewith (it being understood that any such amendment, modification or supplement signed by the Collateral Agent shall be binding upon each Secured Party as aforesaid). The Collateral Agent shall furnish to each Facility Agent a fully executed or conformed copy of any such amendment, modification, supplement or waiver promptly after the effectiveness thereof. 6.02. NOTICES. (a) GENERALLY. Except to the extent otherwise expressly permitted hereunder or thereunder, all notices, requests, demands, directions and other communications (collectively "notices") to the Borrower or any Secured Party under this Agreement or any other Shared Security Document shall be given in writing (including telexes and facsimile transmission) and shall be sent by first-class mail, or by nationally-recognized overnight courier, or by telex or facsimile transmission (with confirmation in writing mailed first-class or sent by such an overnight courier) or by personal delivery. All notices shall be sent to the applicable party at the address stated on the signature pages hereof (or, in the case of a Swap Party, as set forth under its signature to a Swap Party Supplement or, in the case of any other Facility Party, at its address for notices under the Revolving Credit Agreement, Term Loan Agreement or Note Backup Agreement, as the case may be) or in accordance with the last unrevoked written direction from such party to the other parties hereto, in all cases with postage or other charges prepaid. Any such properly given notice to any Secured Party shall be effective when received. Any such properly given notice to the Borrower shall be effective upon the earliest to occur of receipt, telephone confirmation of receipt of telex or facsimile transmission, one Business Day after delivery to a nationally-recognized overnight courier, or three Business Days after deposit in the mail. (b) MULTIPLE CAPACITIES. To the extent that this Agreement or any other Shared Security Document permits or requires any notice to be given by a Person to itself, acting in a different capacity (such as notices by the Collateral Agent to a Facility Agent, or vice versa, when the same Person is acting in both such capacities), such Person need not give actual notice to itself, but may deem such notice to have been given. 6.03. NO IMPLIED WAIVER; CUMULATIVE REMEDIES. No course of dealing and no delay or failure of the Collateral Agent or any other Secured Party in exercising any right, power or privilege hereunder or under any other Shared Security Document, any Secured Party Document, or any other documents or instruments pursuant to or in connection herewith shall affect any other or future exercise thereof or exercise of any other right, power or privilege; nor shall any single or partial exercise of any such right, power or privilege or any abandonment or discontinuance of steps to enforce such a right, power or privilege preclude any further exercise thereof or of any other right, power or privilege. The rights and remedies of the Collateral Agent and each other Secured Party under this Agreement, the other Shared Security Documents, the Secured Party Documents and all other agreements and instruments pursuant to or in connection herewith or therewith are cumulative and not exclusive of any rights or remedies which any of them would otherwise have. Any waiver, permit, consent or approval of any kind or character on the part of the Collateral Agent of any breach or default under, or term or condition of, this Agreement or any other Shared Security Document shall be in writing and shall be effective only to the extent specifically set forth in such writing. -34- 244 6.04. SEVERABILITY. The provisions of this Agreement and of the other Shared Security Documents are intended to be severable. If any provision of this Agreement or any other Shared Security Document shall be held invalid or unenforceable in whole or in part in any jurisdiction such provision shall, as to such jurisdiction, be ineffective to the extent of such invalidity or unenforceability without in any manner affecting the validity or enforceability thereof in any other jurisdiction or the remaining provisions hereof or thereof in any jurisdiction. Where, however, such invalidity or unenforceability may be waived, it is hereby waived by the Borrower to the fullest extent permitted by Law, to the end that this Agreement and the other Shared Security Documents shall be valid and binding agreements enforceable in accordance with their terms. 6.05. PRIOR UNDERSTANDINGS. This Agreement and the other Shared Security Documents supersede all prior understandings and agreements, whether written or oral, among the parties hereto relating to the transactions provided for herein. 6.06. SURVIVAL. All representations and warranties of the Borrower contained herein or in any other Shared Security Document or made in connection herewith or therewith shall be deemed to have been relied upon by the Collateral Agent and the other Secured Parties and shall survive the execution and delivery of this Agreement and the other Shared Security Documents, any knowledge of or investigation by the Collateral Agent or any other Secured Party, and all other events and conditions whatever. All statements in any financial statement, certificate, document or instrument from time to time delivered by or on behalf of the Borrower under or in connection with this Agreement or any other Shared Security Document shall be deemed to constitute representations and warranties by the Borrower. 6.07. COUNTERPARTS. This Agreement and any other Shared Security Document may be executed in any number of counterparts and by the different parties hereto or thereto on separate counterparts each of which, when so executed, shall be deemed an original, but all such counterparts shall constitute but one and the same instrument. 6.08. TERMINATION OF LIENS. Upon payment in full of all Collateral Agent Obligations and receipt by the Collateral Agent of written notices (a) from the Revolving Credit Agent to the effect that (i) the Liens created hereby and by the other Shared Security Documents are to be released and discharged, or (ii) all commitments to extend credit under the Revolving Credit Documents have terminated, all Letters of Credit have terminated, and all Revolving Credit Obligations (other than Contingent Indemnification Obligations) have been indefeasibly paid in full in cash, (b) from the Term Loan Agent to the effect that (i) the Liens created hereby and by the other Shared Security Documents are to be released and discharged, or (ii) all Term Loan Obligations (other than Contingent Indemnification Obligations) have been indefeasibly paid in full in cash, (c) from the Note Backup Agent to the effect that (i) the Liens created hereby and by the other Shared Security Documents are to be released and discharged, or (ii) all commitments to extend credit under the Note Backup Documents have terminated, all Note Backup LOC's have terminated, and all Note Backup Obligations (other than Contingent Indemnification Obligations) have been indefeasibly paid in full in cash, and (d) from any Swap Party to the effect that (i) the Liens created hereby and by the other Shared Security Documents are to be released and discharged, or (ii) all Interest Rate Hedge Agreements under the Swap Documents have terminated and all Swap Obligations (other than Contingent Indemnification Obligations) have been indefeasibly paid in full in cash, any surplus then remaining shall be paid to the Borrower or its successors or assigns or to whomsoever may be lawfully entitled the Collateral Agent -35- 245 shall, at the request of the Borrower, release the Liens created hereby and by the other Shared Security Documents with respect to the Borrower's property. 6.09. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and inure to the benefit of the Collateral Agent (and the Collateral Agent Indemnified Parties), the other Secured Parties, the Borrower and their respective successors and assigns, except that the Borrower may not assign or transfer any of its rights hereunder or any interest therein, and any such purported assignment or transfer shall be void. No other Person shall have any rights hereunder or shall be entitled to rely on any provision hereof. 6.10. GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL; LIMITATION OF LIABILITY. (a) GOVERNING LAW. THIS AGREEMENT AND ALL OTHER SHARED SECURITY DOCUMENTS (EXCEPT TO THE EXTENT, IF ANY, OTHERWISE EXPRESSLY STATED IN SUCH OTHER SHARED SECURITY DOCUMENTS) SHALL BE GOVERNED BY, CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH OF PENNSYLVANIA, WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES. (b) CERTAIN WAIVERS. THE BORROWER HEREBY IRREVOCABLY AND UNCONDITIONALLY: (i) AGREES THAT ANY ACTION, SUIT OR PROCEEDING BY ANY PERSON ARISING FROM OR RELATING TO THIS AGREEMENT OR ANY OTHER SHARED SECURITY DOCUMENT OR ANY STATEMENT, COURSE OF CONDUCT, ACT, OMISSION OR EVENT OCCURRING IN CONNECTION HEREWITH OR THEREWITH (COLLECTIVELY, "RELATED LITIGATION") MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION SITTING IN ALLEGHENY COUNTY, PENNSYLVANIA, SUBMITS TO THE JURISDICTION OF SUCH COURTS, AND TO THE FULLEST EXTENT PERMITTED BY LAW AGREES THAT WILL NOT BRING ANY RELATED LITIGATION IN ANY OTHER FORUM (BUT NOTHING HEREIN SHALL AFFECT THE RIGHT OF ANY SECURED PARTY TO BRING ANY ACTION, SUIT OR PROCEEDING IN ANY OTHER FORUM); (ii) WAIVES ANY OBJECTION WHICH IT MAY HAVE AT ANY TIME TO THE LAYING OF VENUE OF ANY RELATED LITIGATION BROUGHT IN ANY SUCH COURT, WAIVES ANY CLAIM THAT ANY SUCH RELATED LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM, AND WAIVES ANY RIGHT TO OBJECT, WITH RESPECT TO ANY RELATED LITIGATION BROUGHT IN ANY SUCH COURT, THAT SUCH COURT DOES NOT HAVE JURISDICTION OVER THE BORROWER; (iii) CONSENTS AND AGREES TO SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER LEGAL PROCESS IN ANY RELATED LITIGATION BY REGISTERED OR CERTIFIED U.S. MAIL, POSTAGE PREPAID, TO THE BORROWER AT THE ADDRESS FOR NOTICES DESCRIBED IN SECTION 6.02 HEREOF, AND CONSENTS AND AGREES THAT SUCH SERVICE SHALL CONSTITUTE IN EVERY RESPECT VALID AND EFFECTIVE SERVICE (BUT NOTHING HEREIN SHALL AFFECT THE VALIDITY OR EFFECTIVENESS OF PROCESS SERVED IN ANY OTHER MANNER PERMITTED BY LAW); AND (iv) WAIVES THE RIGHT TO TRIAL BY JURY IN ANY RELATED LITIGATION. (c) LIMITATION OF LIABILITY. TO THE FULLEST EXTENT PERMITTED BY LAW, NO CLAIM MAY BE MADE BY THE BORROWER AGAINST ANY SECURED PARTY OR ANY AFFILIATE, DIRECTOR, OFFICER, EMPLOYEE, ATTORNEY OR AGENT OF ANY OF THEM FOR ANY SPECIAL, INCIDENTAL, INDIRECT, CONSEQUENTIAL OR PUNITIVE -36- 246 DAMAGES IN RESPECT OF ANY CLAIM ARISING FROM OR RELATING TO THIS AGREEMENT OR ANY OTHER SHARED SECURITY DOCUMENT OR ANY STATEMENT, COURSE OF CONDUCT, ACT, OMISSION, OR EVENT OCCURRING IN CONNECTION HEREWITH OR THEREWITH (WHETHER FOR BREACH OF CONTRACT, TORT OR ANY OTHER THEORY OF LIABILITY). THE BORROWER HEREBY WAIVES, RELEASES AND AGREES NOT TO SUE UPON ANY CLAIM FOR ANY SUCH DAMAGES, WHETHER SUCH CLAIM PRESENTLY EXISTS OR ARISES HEREAFTER AND WHETHER OR NOT SUCH CLAIM IS KNOWN OR SUSPECTED TO EXIST IN ITS FAVOR. IN WITNESS WHEREOF, the parties hereto, by their officers thereunto duly authorized, have executed and delivered this Agreement as of the date first above written. PRIMARK CORPORATION By /s/ STEPHEN H. CURRAN -------------------------------------- Stephen H. Curran Senior Vice President and Chief Financial Officer Address for Notices: Primark Corporation 1000 Winter Street, Suite 4300N Waltham, MA 02154 Attn: Stephen H. Curran, Senior Vice President and Chief Financial Officer Telephone: 617-487-2140 Telecopier: 617-890-6129 MELLON BANK, N.A., as Collateral Agent, as Revolving Credit Agent on behalf of each Revolving Credit Party, as Term Loan Agent on behalf of each Term Loan Party, and as Note Backup Agent on behalf of each Note Backup Party By /s/ R. JANE WESTRICH -------------------------------------- R. Jane Westrich Vice President -37- 247 Address for Notices: Mellon Bank, N.A. Loan Administration Three Mellon Bank Center Room 153-2332 Pittsburgh, PA 15259-0003 Attn: Terpsie Katsafanas Telephone: 412-234-4769 Telecopier: 412-236-2028 With a copy to: Mellon Bank, N.A. One Boston Place, 6th Floor Boston, MA 02108 Attn: R. Jane Westrich, Vice President Telephone: 617-722-7969 Telecopier: 617-722-3516 -38- 248 EXHIBIT A TO COLLATERAL AGENCY AGREEMENT SWAP PARTY SUPPLEMENT THIS SWAP PARTY SUPPLEMENT to the Collateral Agency Agreement dated as of February 7, 1997 among Primark Corporation, a Michigan corporation (the "Borrower"), the Revolving Credit Parties referred to therein, the Term Loan Parties referred to therein, the Note Backup Parties referred to therein, and Mellon Bank, N.A., as Collateral Agent (together with its successors, the "Collateral Agent") (such Collateral Agency Agreement, as amended, modified or supplemented, being referred to as the "Collateral Agency Agreement"). RECITALS: A. Capitalized terms used herein and not otherwise defined shall have the meanings given them in, or by reference in, the Collateral Agency Agreement. B. The Collateral Agency Agreement contemplates that in certain circumstances a Person which enters into an Interest Rate Hedging Agreement with the Borrower may become party to the Collateral Agency Agreement as a "Swap Party," with such Interest Rate Hedging Agreement being deemed a "Swap Agreement" as defined in the Collateral Agency Agreement, in which event, among other things, the Borrower's obligations under such Swap Agreement will be entitled to the benefit of certain Shared Security Documents. C. The Person executing this Swap Party Supplement as Swap Party below desires to become party to the Collateral Agency Agreement as a "Swap Party," with the Interest Rate Hedging Agreement attached hereto being deemed a "Swap Agreement" referred to therein. NOW, THEREFORE, the Swap Party, intending to be legally bound , hereby represents, warrants and covenants to the Secured Parties and the Borrower as follows: SECTION 1. JOINDER. The Swap Party hereby becomes party to the Collateral Agency Agreement as a "Swap Party" thereunder, and shall be subject to and bound by all of the provisions thereof and of the other Shared Security Documents referred to therein. The attached Interest Rate Hedging Agreement is hereby designated to be a "Swap Agreement" referred to in such Collateral Agency Agreement. SECTION 2. SWAP AGREEMENT. The Swap Party and the Borrower hereby represent, warrant and agree as follows: (a) the attached Interest Rate Hedging Agreement, including all schedules and confirmations thereto and attached hereto, is true, correct and complete and contains the entire agreement of the Swap Party and the Borrower relating to the subject matter thereof, (b) to the extent the attached Interest Rate Hedging Agreement is in the form of a master agreement, pursuant to which multiple "confirmations" (however named) may be entered into from time to time, only the transactions evidenced by confirmations attached hereto shall constitute part of such "Swap Agreement," and (c) no other transactions have been or will be entered into pursuant to such master agreement. SECTION 3. SWAP SHARED SECURITY CAP. The Swap Shared Security Cap shall be $______________ . SECTION 4. PRIOR SWAP PARTY SUPPLEMENTS. If this Swap Party Supplement is to supercede any prior Swap Party Supplement between the Swap Party and the Borrower pursuant to Section 2.02(b) of the Collateral Agency Agreement, such prior Swap Party Supplement is identified as follows; otherwise, set -1- 249 forth "Not Applicable": SECTION 5. CERTAIN REPRESENTATIONS AND AGREEMENTS. By executing and delivering this Swap Party Supplement, the Swap Party confirms to and agrees with the Collateral Agent and each other Secured Party as follows: (a) The Collateral Agent and the other Secured Parties make no representation or warranty and assume no responsibility with respect to (i) the execution, delivery, effectiveness, enforceability, genuineness, validity or adequacy of the Collateral Agency Agreement or any other Shared Security Document, (ii) any recital, representation, warranty, document, certificate, report or statement in, provided for in, received under or in connection with, the Collateral Agency Agreement or any other Shared Security Document, or (iv) the existence, validity, enforceability, perfection, recordation, priority, adequacy or value, now or hereafter, of any Lien or other direct or indirect security afforded or purported to be afforded by any of the Shared Security Documents or otherwise from time to time. (b) The Collateral Agent and the other Secured Parties make no representation or warranty and assume no responsibility with respect to (i) the performance or observance of any of the terms or conditions of the Collateral Agency Agreement or any other Shared Security Document on the part of the Borrower, (ii) the business, operations, condition (financial or otherwise) or prospects of the Borrower or any other Person, or (iii) the existence of any default under any Secured Party Document. (c) The Swap Party confirms that it has received a copy of the Collateral Agency Agreement and each of the other Shared Security Documents, together with copies of such other documents and information as it has deemed appropriate to make its own credit and legal analysis and decision to enter into this Swap Party Supplement. The Swap Party confirms that it has made such analysis and decision independently and without reliance upon the Collateral Agent or any other Secured Party. (d) The Swap Party, independently and without reliance upon the Collateral Agent or any other Secured Party, and based on such documents and information as it shall deem appropriate at the time, will make its own decisions to take or not take action under or in connection with the Collateral Agency Agreement or any other Shared Security Document. (e) The Swap Party irrevocably appoints the Collateral Agent to act as Collateral Agent for the Swap Party under the Collateral Agency Agreement and the other Shared Security Documents, all in accordance with the Collateral Agency Agreement and the other Shared Security Documents. SECTION 6. EFFECTIVENESS. This Swap Party Supplement shall be effective on the date set forth under the Collateral Agent's signature below, evidencing its receipt of copy of hereof executed by the Swap Party and consented to by the Revolving Credit Agent, the Term Loan Agent, the Note Backup Agent and the Borrower by executing a copy of the same where indicated below. SECTION 7. GOVERNING LAW. This Swap Party Supplement shall be governed by, construed and enforced in accordance with the laws of the Commonwealth of Pennsylvania, without regard to principles of conflicts of law. IN WITNESS WHEREOF, the Swap Party has caused this Swap Party Supplement to be executed on its behalf as of the date set forth below. as Swap Party By_________________________________ Name:______________________________ Title:_____________________________ Address: ___________________________________ ___________________________________ ___________________________________ Attn: Telephone:_________________________ Telex:_____________________________ -2- 250 (Answerback: ) Telecopier: CONSENTED AND AGREED TO: MELLON BANK, N.A., as Revolving Credit Agent, Term Loan Agent and Note Backup Agent By_________________________________ Name:______________________________ Title:_____________________________ CONSENTED AND AGREED TO: PRIMARK CORPORATION By_________________________________ Name:______________________________ Title:_____________________________ RECEIPT ACKNOWLEDGED: MELLON BANK, N.A., as Collateral Agent By:________________________________ Name:______________________________ Title:_____________________________ Date: ____________________________ -3- 251 EXHIBIT B TO COLLATERAL AGENCY AGREEMENT REVOLVING CREDIT REFINANCING SUPPLEMENT THIS REVOLVING CREDIT REFINANCING SUPPLEMENT to the Collateral Agency Agreement dated as of February 7, 1997 among Primark Corporation, a Michigan corporation (the "Borrower"), the Revolving Credit Parties referred to therein, the Term Loan Parties referred to therein, the Note Backup Parties referred to therein, and Mellon Bank, N.A., as Collateral Agent (together with its successors, the "Collateral Agent") (such Collateral Agency Agreement, as amended, modified or supplemented, being referred to as the "Collateral Agency Agreement"). RECITALS: A. Capitalized terms used herein and not otherwise defined shall have the meanings given them in, or by reference in, the Collateral Agency Agreement. B. The Collateral Agency Agreement contemplates that in certain circumstances the Borrower may refinance the Revolving Credit Agreement, with the incoming Revolving Credit Agreement being deemed the "Revolving Credit Agreement" as defined in the Collateral Agency Agreement, in which event, among other things, the Borrower's obligations under such incoming Revolving Credit Agreement will be entitled to the benefit of certain Shared Security Documents. C. The Persons executing this Revolving Credit Refinancing Supplement as incoming Revolving Credit Parties below desire to become party to the Collateral Agency Agreement as "Revolving Credit Parties," with the Revolving Credit Agreement attached hereto being deemed the "Revolving Credit Agreement" referred to therein. NOW, THEREFORE, each incoming Revolving Credit Party, intending to be legally bound, hereby represents, warrants and covenants to the Secured Parties and the Borrower as follows: SECTION 1. JOINDER. Each incoming Revolving Credit Party set forth below hereby becomes party to the Collateral Agency Agreement as a "Revolving Credit Party" thereunder, and shall be subject to and bound by all of the provisions thereof and of the other Shared Security Documents referred to therein. Each such incoming Revolving Credit Party is a "Revolving Credit Lender," "Revolving Credit Issuing Bank" or "Revolving Credit Agent" thereunder, as set forth after such Person's name below. The attached Revolving Credit Agreement is hereby designated to be the "Revolving Credit Agreement" referred to in such Collateral Agency Agreement. SECTION 2. REVOLVING CREDIT AGREEMENT. Each incoming Revolving Credit Party and the Borrower hereby represents, warrants and agrees that the attached Revolving Credit Agreement, including all schedules and confirmations thereto and attached hereto, is true, correct and complete and contains the entire agreement of the incoming Revolving Credit Parties and the Borrower relating to the subject matter thereof, and that such Revolving Credit Agreement complies with the definition of a "Revolving Credit Agreement" in the Collateral Agency Agreement. SECTION 3. CERTAIN REPRESENTATIONS AND AGREEMENTS. By executing and delivering this Revolving Credit Refinancing Supplement, each incoming Revolving Credit Party confirms to and agrees with the Collateral Agent and each other Secured Party as follows: (a) The Collateral Agent and the other Secured Parties make no representation or warranty and assume no responsibility with respect to (i) the execution, delivery, effectiveness, enforceability, genuineness, validity or adequacy of the Collateral Agency Agreement or any other Shared Security Document, (ii) any recital, representation, warranty, document, certificate, report or statement in, provided for in, received under or in connection with, the Collateral Agency Agreement or any other Shared Security Document, or (iv) the existence, validity, enforceability, perfection, recordation, priority, adequacy or value, now or hereafter, of any Lien or other direct or indirect security afforded or purported to be afforded by any of the Shared Security Documents or otherwise from time to time. -1- 252 (b) The Collateral Agent and the other Secured Parties make no representation or warranty and assume no responsibility with respect to (i) the performance or observance of any of the terms or conditions of the Collateral Agency Agreement or any other Shared Security Document on the part of the Borrower, (ii) the business, operations, condition (financial or otherwise) or prospects of the Borrower or any other Person, or (iii) the existence of any default under any Secured Party Document. (c) Each incoming Revolving Credit Party confirms that it has received a copy of the Collateral Agency Agreement and each of the other Shared Security Documents, together with copies of such other documents and information as it has deemed appropriate to make its own credit and legal analysis and decision to enter into this Revolving Credit Refinancing Supplement. Each incoming Revolving Credit Party confirms that it has made such analysis and decision independently and without reliance upon the Collateral Agent or any other Secured Party. (d) Each incoming Revolving Credit Party, independently and without reliance upon the Collateral Agent or any other Secured Party, and based on such documents and information as it shall deem appropriate at the time, will make its own decisions to take or not take action under or in connection with the Collateral Agency Agreement or any other Shared Security Document. (e) Each incoming Revolving Credit Party irrevocably appoints the Collateral Agent to act as Collateral Agent for such Revolving Credit Party under the Collateral Agency Agreement and the other Shared Security Documents, all in accordance with the Collateral Agency Agreement and the other Shared Security Documents. SECTION 4. EFFECTIVENESS. This Revolving Credit Refinancing Supplement shall be effective on the date set forth under the Collateral Agent's signature below, evidencing its receipt of (a) a copy hereof executed by each incoming Revolving Credit Party, and consented to by the Borrower by executing a copy of the same where indicated below, (b) a notice from the outgoing Revolving Credit Agent under Section 2.05 of the Collateral Agency Agreement whereby the outgoing Revolving Credit Parties cease to be "Revolving Credit Parties" under the Collateral Agency Agreement, and (c) such other items as the Collateral Agent may require as set forth in Section 2.03(a) of the Collateral Agency Agreement. SECTION 5. GOVERNING LAW. This Revolving Credit Refinancing Supplement shall be governed by, construed and enforced in accordance with the laws of the Commonwealth of Pennsylvania, without regard to principles of conflicts of law. IN WITNESS WHEREOF, each incoming Revolving Credit Party has caused this Revolving Credit Refinancing Supplement to be executed on its behalf as of the date set forth below. _____________________________________________ as an incoming Revolving Credit Party [and as a Revolving Credit Lender, Revolving Credit Issuing Bank, and/or Revolving Credit Agent] under the incoming Revolving Credit Agreement By_______________________________ Name:____________________________ Title:___________________________ Address: Attn: Telephone:_______________________ Telex:___________________________ (Answerback: ) Telecopier: -2- 253 CONSENTED AND AGREED TO: MELLON BANK, N.A., as Term Loan Agent [and Note Backup Agent] By_______________________________ Name:____________________________ Title:___________________________ CONSENTED AND AGREED TO: PRIMARK CORPORATION By_______________________________ Name:____________________________ Title:___________________________ RECEIPT ACKNOWLEDGED: MELLON BANK, N.A., as Collateral Agent By:______________________________ Name:____________________________ Title:___________________________ Date: ____________________________ -3- 254 ================================================================================ NOTE BACKUP AGREEMENT dated as of February 7, 1997 by and among PRIMARK CORPORATION, as Borrower, THE LENDERS PARTIES HERETO FROM TIME TO TIME, THE ISSUING BANK REFERRED TO HEREIN, and MELLON BANK, N.A., as Agent ------------------ U.S. $8,382,343.75 ------------------ ================================================================================ 255 TABLE OF CONTENTS SECTION TITLE PAGE ARTICLE I DEFINITIONS; CONSTRUCTION................................ 1 1.01 Definitions; Construction................................ 1 ARTICLE II [RESERVED]............................................... 1 ARTICLE III THE FACILITIES........................................... 1 3.01 The Letter of Credit Facility............................ 1 3.02 Amendment of Letters of Credit........................... 2 3.03 Letter of Credit Participating Interests................. 2 3.04 Letter of Credit Drawings and Reimbursements............. 3 3.05 Obligations Absolute..................................... 4 3.06 Further Assurances....................................... 4 3.07 Cash Collateral for Letters of Credit.................... 4 3.08 Certain Provisions Relating to the Issuing Bank.......... 5 3.09 Interest Rates........................................... 6 3.10 Conversion or Renewal of Interest Rate Options........... 9 3.11 Prepayments Generally....................................10 3.12 Optional Prepayments.....................................10 3.13 Mandatory Prepayment and Cash Collateralization..........10 3.14 Interest Payment Dates...................................11 3.15 Payments Generally.......................................11 3.16 Additional Compensation in Certain Circumstances.........................................12 3.17 Taxes....................................................13 3.18 Funding by Branch, Subsidiary or Affiliate...............15 ARTICLE IV REPRESENTATIONS AND WARRANTIES...........................15 4.01 Corporate Status.........................................15 4.02 Corporate Power and Authorization........................15 4.03 Execution and Binding Effect.............................15 4.04 Governmental Approvals and Filings.......................16 4.05 Absence of Conflicts.....................................16 4.06 Audited Financial Statements.............................16 4.07 Interim Financial Statements.............................16 4.08 Absence of Undisclosed Liabilities.......................17 4.09 Accurate and Complete Disclosure.........................17 4.10 Projections..............................................17 4.11 Solvency.................................................17 4.12 Margin Regulations.......................................17 4.13 Regulatory Restrictions..................................18 4.14 Subsidiaries.............................................18 4.15 Partnerships, etc........................................18 4.16 Litigation...............................................18 -i- 256 4.17 Absence of Other Conflicts...............................18 4.18 Insurance................................................19 4.19 Title to Property........................................19 4.20 Intellectual Property....................................19 4.21 Taxes....................................................19 4.22 Employee Benefits........................................19 4.23 Environmental Matters....................................19 ARTICLE V CONDITIONS OF ISSUANCE...................................20 5.01 Conditions to Issuance...................................20 ARTICLE VI AFFIRMATIVE COVENANTS....................................23 6.01 Basic Reporting Requirements.............................23 6.02 Insurance................................................26 6.03 Payment of Taxes and Other Potential Charges and Priority Claims...................................... 26 6.04 Preservation of Corporate Status.........................27 6.05 Governmental Approvals and Filings.......................27 6.06 Maintenance of Properties, Franchises, etc...............27 6.07 Avoidance of Other Conflicts.............................27 6.08 Financial Accounting Practices...........................27 6.09 Use of Proceeds..........................................28 6.10 Continuation of or Change in Business....................28 6.11 Plans and Multiemployer Plans............................28 6.12 Disaster Recovery Plan...................................28 6.13 Annual Bank Meeting......................................28 6.14 Separate Corporate Existence.............................29 6.15 Additional Security......................................29 6.16 Interest Rate Protection.................................30 ARTICLE VII NEGATIVE COVENANTS.......................................31 7.01 Financial Covenants......................................31 7.02 Liens....................................................32 7.03 Indebtedness.............................................33 7.04 Guaranties, Indemnities, etc.............................35 7.05 Loans, Advances and Investments..........................35 7.06 Dividends and Related Distributions......................37 7.07 Sale-Leasebacks..........................................37 7.08 Mergers, etc.............................................38 7.09 Dispositions of Properties...............................38 7.10 Dealings with Affiliates.................................39 7.11 Limitations on Modification of Certain Agreements and Instruments....................39 7.12 Limitation on Payments on Certain Obligations............40 7.13 Limitation on Other Restrictions on Liens, Dividend Restrictions on Subsidiaries, etc............40 7.14 Limitation on Other Restrictions on Amendment of the Loan Documents, etc............................41 -ii- 257 7.15 Limitation on Certain Benefit Liabilities................41 7.16 Fiscal Year..............................................41 ARTICLE VIII DEFAULTS.................................................42 8.01 Events of Default........................................42 8.02 Consequences of an Event of Default......................45 8.03 Application of Proceeds..................................45 ARTICLE IX THE AGENT................................................46 9.01 Appointment..............................................46 9.02 General Nature of Agent's Duties.........................46 9.03 Exercise of Powers.......................................47 9.04 General Exculpatory Provisions...........................47 9.05 Administration by the Agent..............................48 9.06 Lenders Not Relying on Agent or Other Lenders............48 9.07 Indemnification of Agent by Lenders......................48 9.08 Agent in its Individual Capacity.........................49 9.09 [Reserved]...............................................49 9.10 Successor Agent..........................................49 9.11 Calculations.............................................49 ARTICLE X MISCELLANEOUS............................................50 10.01 Holidays.................................................50 10.02 Records..................................................50 10.03 Amendments and Waivers...................................50 10.04 No Implied Waiver; Cumulative Remedies...................51 10.05 Notices..................................................51 10.06 Expenses; Taxes; Indemnity...............................52 10.07 Severability.............................................53 10.08 Prior Understandings.....................................53 10.09 Duration; Survival.......................................53 10.10 Counterparts.............................................53 10.11 Limitation on Payments...................................53 10.12 Set-Off..................................................53 10.13 Sharing of Collections...................................54 10.14 Successors and Assigns; Participations; Assignments......54 10.15 Governing Law; Submission to Jurisdiction; Waiver of Jury Trial; Limitation of Liability.........57 10.16 Withholding Taxes, etc...................................58 10.17 Defeasance of Certain Covenants..........................58 ANNEX A DEFINITIONS; CONSTRUCTION................................A-1 Exhibit A [Reserved] Exhibit B Form of Transfer Supplement Exhibit C Form of Annual and Quarterly Compliance Certificate -iii- 258 Schedule 4.04 Governmental Approvals and Filings Schedule 4.05 Conflicts Schedule 4.08 Liabilities Schedule 4.13 Regulatory Restrictions Schedule 4.14 Subsidiaries Schedule 4.16 Litigation Schedule 4.21 Taxes Schedule 4.23 Environmental Matters Schedule 7.02 Liens Schedule 7.04 Guaranty Equivalents Schedule 7.07 Sale-Leasebacks -iv- 259 NOTE BACKUP AGREEMENT THIS AGREEMENT, dated as of February 7, 1997, by and among PRIMARK CORPORATION, a Michigan Corporation (the "Borrower"), the Lenders parties hereto from time to time, the Issuing Bank referred to herein, and MELLON BANK, N.A., a national banking association, as agent for the Lender Parties hereunder (in such capacity, together with its successors in such capacity, the "Agent"). In consideration of the mutual covenants herein contained and intending to be legally bound, the parties hereto hereby agree as follows: ARTICLE I DEFINITIONS; CONSTRUCTION 1.01. DEFINITIONS; CONSTRUCTION. In addition to other words and terms defined elsewhere in this Agreement, as used in this Agreement the words and terms defined in Annex A hereto have the meanings given them in such Annex A, and this Agreement shall be construed in accordance with the provisions of Annex A. ARTICLE II [RESERVED] ARTICLE III THE FACILITY 3.01. THE LETTER OF CREDIT FACILITY. (a) GENERAL. Subject to the terms and conditions of this Agreement, and relying upon the representations and warranties herein set forth and upon the agreements of the Lenders set forth in Sections 3.03 and 3.04 hereof, the Issuing Bank agrees (such agreement being herein referred to as the "Letter of Credit Commitment") to cause the following five letters of credit previously issued by the Issuing Bank:
BENEFICIARY NUMBER STATED AMOUNT DATE EXPIRATION DATE David Taylor S849190 $5,588,229.17 October 24, 1996 November 8, 2002 Adrian Dear S849191 $762,031.25 October 24, 1996 November 8, 2002 Claire Stevens S849192 $1,016,041.67 October 24, 1996 November 8, 2002 Paren Knadjian S849193 $508,020.83 October 24, 1996 November 8, 2002 Kevin Underwood S849194 $508,020.83 October 24, 1996 November 8, 2002
-1- 260 (as amended, modified or supplemented from time to time, together with any successors and replacements, the "Letters of Credit") to be deemed to be issued under this Agreement effective from and after a date (the "Closing Date"), which shall not be later than February 15, 1997 (the "Letter of Credit Commitment Termination Date"). Such deemed issuance under this Agreement shall be effected by the Issuing Bank and the Borrower executing a certificate, satisfactory in form and substance to the Issuing Bank, declaring that the Closing Date hereunder has occurred and specifying such Closing Date. As of the Closing Date so specified, each of the Letters of Credit shall be deemed to be issued under this Agreement and shall be subject to all of the terms and provisions of this Agreement. (b) PURPOSES OF LETTERS OF CREDIT. Each Letter of Credit shall be used by the Borrower as a standby letter of credit used solely to provide credit enhancement for the ICV Notes. The provisions of this Section 3.01(b) represent only an obligation of the Borrower to the Issuing Bank and the Lenders; the Issuing Bank shall have no obligation to the Lenders to ascertain the purpose of any Letter of Credit, and the rights and obligations of the Lenders and the Issuing Bank among themselves shall not be impaired or affected by a breach of this Section 3.01(b). (c) LETTER OF CREDIT FEE. The Borrower shall pay to the Agent for the account of each Lender a fee (the "Letter of Credit Fee") for each Letter of Credit for each day from and including the date of issuance thereof to and including the date of expiration or termination thereof, equal to (x) the Letter of Credit Undrawn Availability on such day, times (y) the Letter of Credit Fee Rate applicable on such day, times (z) 1/365 (or 1/366, as the case may be). Such Letter of Credit Fee shall be due and payable for the preceding period for which such fee has not been paid on each of the following dates: (i) each Regular Quarterly Payment Date, and (ii) the date of expiration or termination of such Letter of Credit. The "Letter of Credit Fee Rate" for any day shall mean the Applicable Margin applicable under the Euro-Rate Option on such day. (d) FACING FEE; ADMINISTRATION FEES. The Borrower shall pay to the Agent, for the sole account of the Issuing Bank, a fee (the "Letter of Credit Facing Fee") for each Letter of Credit for each day from and including the date of issuance thereof to and including the date of expiration or termination thereof, equal to (x) the Letter of Credit Undrawn Availability on such day, times (y) 0.25%, times (z) 1/365 (or 1/366, as the case may be). Such Letter of Credit Facing Fee shall be due and payable for the preceding period for which such fee has not been paid on each of the following dates: (i) each Regular Quarterly Payment Date, and (ii) the date of expiration or termination of such Letter of Credit. In addition, the Borrower shall pay to the Agent, for the sole account of the Issuing Bank, such other administration, maintenance, amendment, drawing and negotiation fees as may be customarily charged by the Issuing Bank from time to time in connection with letters of credit. 3.02. AMENDMENT OF LETTERS OF CREDIT. At the request of the Borrower from time to time, and subject to satisfaction of such conditions as the Issuing Bank may require, the Issuing Bank may amend, modify or supplement Letters of Credit, or waive compliance with any condition of issuance or payment, without the consent of, and without liability to, the Agent or any Lender, provided that no such amendment, modification or supplement shall extend the expiration date or increase the Letter of Credit Undrawn Availability of an outstanding Letter of Credit. 3.03. LETTER OF CREDIT PARTICIPATING INTERESTS. (a) GENERALLY. Concurrently with the Closing Date, the Issuing Bank automatically shall be deemed, irrevocably and unconditionally, to have sold, assigned, transferred and conveyed to each other Lender, and each other Lender automatically shall be deemed, irrevocably and unconditionally, severally to have purchased, acquired, accepted and assumed from the Issuing Bank, without recourse to, or representation or warranty by, the Issuing Bank, an undivided interest, in a proportion equal to such -2- 261 Lender's Pro Rata share, in all of the Issuing Bank's rights and obligations in, to or under such Letter of Credit, the Letter of Credit Reimbursement Obligations, and all collateral, guarantees and other rights from time to time directly or indirectly securing the foregoing (such interest of each Lender being referred to herein as a "Letter of Credit Participating Interest"). Amounts other than Letter of Credit Reimbursement Obligations and Letter of Credit Fees payable from time to time under or in connection with a Letter of Credit shall be for the sole account of the Issuing Bank. On the date that any Purchasing Lender becomes a party to this Agreement in accordance with Section 10.14 hereof, Letter of Credit Participating Interests in any outstanding Letters of Credit held by the Lender from which such Purchasing Lender acquired its interest hereunder shall be proportionately reallotted between such Purchasing Lender and such transferor Lender (and, to the extent such transferor Lender is the Issuing Bank, the Purchasing Lender shall be deemed to have acquired a Letter of Credit Participating Interest from such transferor Lender to such extent). (b) OBLIGATIONS ABSOLUTE. Notwithstanding any other provision hereof, each Lender hereby agrees that its obligation to participate in each Letter of Credit issued in accordance herewith, and its obligation to make the payments specified in Section 3.04 hereof, are each absolute, irrevocable and unconditional and shall not be affected by any event, condition or circumstance whatever. The failure of any Lender to make any such payment shall not relieve any other Lender of its funding obligation hereunder on the date due, but no Lender shall be responsible for the failure of any other Lender to meet its funding obligations hereunder. 3.04. LETTER OF CREDIT DRAWINGS AND REIMBURSEMENTS. (a) BORROWER'S REIMBURSEMENT OBLIGATION. The Borrower hereby agrees to reimburse the Issuing Bank, by making payment to the Agent for the account of the Issuing Bank in accordance with Section 3.15(b) hereof, in the amount of each Letter of Credit Unreimbursed Draw, on October 16, 2000 (the "Reimbursement Target Date") and thereafter ON DEMAND. Such reimbursement shall also be due at such earlier times as are provided elsewhere in this Agreement and the other Loan Documents. (b) PAYMENT BY LENDERS ON ACCOUNT OF UNREIMBURSED DRAWS. If the Issuing Bank makes a payment under any Letter of Credit and is not reimbursed in full therefor on such payment date, the Issuing Bank will promptly notify the Agent thereof (which notice may be by telephone), and the Agent shall forthwith notify each Lender (which notice may be by telephone promptly confirmed in writing) thereof. No later than the Agent's close of business on the date such notice is given, each such Lender will pay to the Agent, for the account of the Issuing Bank, in immediately available funds, an amount equal to such Lender's Pro Rata share of the unreimbursed portion of such payment by the Issuing Bank. If and to the extent that any Lender fails to make such payment to the Agent for the account of the Issuing Bank on such date, such Lender shall pay such amount on demand, together with interest, for the Issuing Bank's own account, for each day from and including the date of the Issuing Bank's payment to and including the date of payment to the Issuing Bank (before and after judgment) at the following rates per annum: (x) for each day from and including the date of such payment by the Issuing Bank to and including the second Business Day thereafter, at the Federal Funds Effective Rate for such day, and (y) for each day thereafter, at the rate applicable to such Letter of Credit Unreimbursed Draw for such day. (c) DISTRIBUTIONS TO PARTICIPANTS. If, at any time, after the Issuing Bank has made a Letter of Credit Unreimbursed Draw and has received from any Lender such Lender's share of such Letter of Credit Unreimbursed Draw, the Issuing Bank receives any payment or makes any application of funds on account of the Letter of Credit Reimbursement Obligation arising from such Letter of Credit -3- 262 Unreimbursed Draw, the Issuing Bank will pay to the Agent, for the account of such Lender, such Lender's Pro Rata share of such payment or application. (d) RESCISSION. If any amount received by the Issuing Bank on account of any Letter of Credit Reimbursement Obligation shall be avoided, rescinded or otherwise returned or paid over by the Issuing Bank for any reason at any time, whether before or after the termination of this Agreement (or the Issuing Bank believes in good faith that such avoidance, rescission, return or payment is required, whether or not such matter has been adjudicated), each such Lender will, promptly upon notice from the Agent or the Issuing Bank, pay over to the Agent for the account of the Issuing Bank its Pro Rata share of such amount, together with its Pro Rata share of any interest or penalties payable with respect thereto. (e) EQUALIZATION. If any Lender receives any payment or makes any application on account of its Letter of Credit Participating Interest, such Lender shall forthwith pay over to the Issuing Bank, in Dollars and in like kind of funds received or applied by it the amount in excess of such Lender's ratable share of the amount so received or applied. 3.05. OBLIGATIONS ABSOLUTE. The payment obligations of the Borrower under Section 3.04 hereof shall be unconditional and irrevocable and shall be paid strictly in accordance with the terms of this Agreement under all circumstances, including, without limitation, the following circumstances: (a) any lack of validity or enforceability of this Agreement, any Letter of Credit, any other Loan Document, any ICV Note or any documents, instruments or agreements evidencing or otherwise relating to any obligation of the Borrower or Subsidiary of the Borrower secured or supported by any Letter of Credit; (b) the existence of any claim, set-off, defense or other right which the Borrower or any other Person may have at any time against any beneficiary or transferee of any Letter of Credit (or any Persons for whom any such beneficiary or transferee may be acting), the Issuing Bank, any Lender, or any other Person, whether in connection with this Agreement, the transactions contemplated hereby or any unrelated transaction; (c) any purported Letter of Credit, draft, certificate, statement or other document presented under any Letter of Credit proving to be not genuine, stolen, forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect; (d) payment by the Issuing Bank under any Letter of Credit against presentation of a draft, certificate or documents which do not comply with the terms of such Letter of Credit, or payment by the Issuing Bank under any Letter of Credit in any other circumstances in which conditions to payment are not met, except any such payment resulting solely from the gross negligence or willful misconduct of the Issuing Bank; or (e) any other event, condition or circumstance whatever, whether or not similar to any of the foregoing. The Borrower bears the risk of, and neither the Issuing Bank, any of its directors, officers, employees or agents, nor any Lender, shall be liable or responsible for the use which may be made of any Letter of Credit, or acts or omissions of the beneficiary or any transferee in connection therewith. -4- 263 3.06. FURTHER ASSURANCES. The Borrower hereby agrees, from time to time, to do and perform any and all acts and to execute any and all further instruments reasonably requested by the Issuing Bank more fully to effect the purposes of this Agreement and the issuance of the Letters of Credit hereunder. 3.07. CASH COLLATERAL FOR LETTERS OF CREDIT. The Borrower agrees that, without limitation of other rights and remedies under this Agreement or the Loan Documents or at law or in equity, if the Borrower is required to cash collateralize outstanding Letters of Credit pursuant to Section 3.13, Section 8.02 or any other provision of this Agreement or any other Loan Document, the Borrower shall immediately pay to the Collateral Agent, for deposit in the Letter of Credit Collateral Account, an amount equal to the excess, if any, of the aggregate Letter of Credit Exposure at such time over the balance in the Letter of Credit Collateral Account. The Agent shall direct the Collateral Agent to release funds in the Letter of Credit Collateral Account to the Issuing Bank for payment of Letter of Credit Reimbursement Obligations constituting Letter of Credit Unreimbursed Draws, as and when the same become due and payable if and to the extent the Borrower fails to pay the same. 3.08. CERTAIN PROVISIONS RELATING TO THE ISSUING BANK. (a) GENERAL. The Issuing Bank shall have no duties or responsibilities except those expressly set forth in this Agreement and the other Loan Documents, and no implied duties or responsibilities on the part of the Issuing Bank shall be read into this Agreement or any Loan Document or shall otherwise exist. The duties and responsibilities of the Issuing Bank to the other Lender Parties under this Agreement and the other Loan Documents shall be mechanical and administrative in nature, and the Issuing Bank shall not have a fiduciary relationship in respect of any Lender Party or any other Person. The Issuing Bank shall not be liable for any action taken or omitted to be taken by it under or in connection with this Agreement or any other Loan Document, unless caused by its own gross negligence or willful misconduct. The Issuing Bank shall not be under any obligation to ascertain, inquire or give any notice relating to (i) the performance or observance of any of the terms or conditions of this Agreement or any other Loan Document on the part of the Borrower, (ii) the business, operations, condition (financial or otherwise) or prospects of the Borrower or any other Person, or (iii) the existence of any Event of Default or Potential Default. The Issuing Bank shall not be under any obligation, either initially or on a continuing basis, to provide the Agent or any Lender with any notices, reports or information of any nature, whether in its possession presently or hereafter, except for such notices, reports and other information expressly required by this Agreement to be so furnished. (b) ADMINISTRATION. The Issuing Bank may rely upon any notice or other communication of any nature (written or oral, including but not limited to telephone conversations, whether or not such notice or other communication is made in a manner permitted or required by this Agreement or any Loan Document) purportedly made by or on behalf of the proper party or parties, and no Issuing Bank shall have any duty to verify the identity or authority of any Person giving such notice or other communication. The Issuing Bank may consult with legal counsel (including, without limitation, in-house counsel for the Issuing Bank or in-house or other counsel for the Borrower), independent public accountants and any other experts selected by it from time to time, and no Issuing Bank shall be liable for any action taken or omitted to be taken in good faith in accordance with the advice of such counsel, accountants or experts. Whenever the Issuing Bank shall deem it necessary or desirable that a matter be proved or established with respect to the Borrower or any Lender Party, such matter may be established by a certificate of the Borrower or such Lender Party, as the case may be, and the Issuing Bank may conclusively rely upon such certificate. -5- 264 (c) INDEMNIFICATION OF ISSUING BANK BY LENDERS. Each Lender hereby agrees to reimburse and indemnify the Issuing Bank and its directors, officers, employees and agents (to the extent not reimbursed by the Borrower and without limitation of the obligations of the Borrower to do so), Pro Rata, from and against any and all amounts, losses, liabilities, claims, damages, expenses, obligations, penalties, actions, judgments, suits, costs or disbursements of any kind or nature (including, without limitation, the fees and disbursements of counsel (other than in-house counsel) for the Issuing Bank or such other Person in connection with any investigative, administrative or judicial proceeding commenced or threatened, whether or not the Issuing Bank or such other Person shall be designated a party thereto) that may at any time be imposed on, incurred by or asserted against the Issuing Bank, in its capacity as such, or such other Person, as a result of, or arising out of, or in any way related to or by reason of, this Agreement, any other Loan Document, any transaction from time to time contemplated hereby or thereby, or any transaction secured or financed in whole or in part, directly or indirectly, with any Letter of Credit or the proceeds thereof, provided, that no Lender shall be liable for any portion of such amounts, losses, liabilities, claims, damages, expenses, obligations, penalties, actions, judgments, suits, costs or disbursements resulting from the gross negligence or willful misconduct of the Issuing Bank or such other Person, as finally determined by a court of competent jurisdiction. 3.09. INTEREST RATES. (a) INTEREST RATE OPTIONS. Before the Reimbursement Target Date, the unpaid amount of Letter of Credit Unreimbursed Draws shall bear interest for each day until due on one or more bases selected by the Borrower from among the interest rate Options set forth below. From and after the Reimbursement Target Date, the unpaid amount of Letter of Credit Unreimbursed Draws shall bear interest in accordance with Section 3.15(c) hereof, at the rate set forth in clause (ii) thereof. Subject to the provisions of this Agreement, for the period before the Reimbursement Target Date, each Letter of Credit Unreimbursed Draw shall bear interest for each day until due at the Base Rate Option, unless and until converted to the Euro-Rate Option in accordance with the provisions of this Agreement. Subject to the provisions of this Agreement, for the period before the Reimbursement Target Date, the Borrower may select different Options to apply simultaneously to different Portions of the Letter of Credit Unreimbursed Draws and may select different Funding Segments to apply simultaneously to different parts of the Euro-Rate Portion of the Letter of Credit Unreimbursed Draws. The interest rate Options applicable before the Reimbursement Target Date are as follows: (i) BASE RATE OPTION: A rate per annum (computed on the basis of a year of 365 or 366 days, as the case may be, and actual days elapsed) for each day equal to the Base Rate for such day plus the Applicable Margin for such day. (ii) EURO-RATE OPTION: A rate per annum (based on a year of 360 days and actual days elapsed) for each day equal to the Euro-Rate for such day plus the Applicable Margin for such day. (b) APPLICABLE MARGINS. The "Applicable Margin" for each interest rate Option for each day shall mean the applicable percentage set forth below under "Level II Performance Margins," "Level III Performance Margins," or "Level IV Performance Margins," as the case may be, in the event that (x) no Event of Default or Potential Default shall have occurred and be continuing or exist on such day and (y) Financial Test II, Financial Test III or Financial Test IV, respectively, set forth below is satisfied on such day. For purposes of determining the Applicable Margin, Financial Test II, Financial Test III or Financial Test IV, as the case may be, shall be deemed to be satisfied effective on the first day of the calendar month following the calendar month in which the Agent shall have received from the Borrower a certificate, duly completed and signed by a Responsible Officer, accompanied by the -6- 265 Borrower's financial statements for the fiscal quarter most recently ended (or, if such most recently ended fiscal quarter is the last of a fiscal year, for the fiscal year then ended), demonstrating compliance with the applicable financial test, and such financial test shall be deemed to remain satisfied until the last day of the calendar month in which the Borrower's next annual or quarterly financial statements are required to be delivered under Section 6.01(a) or 6.01(b) hereof, as the case may be (or, if earlier, the last day of the calendar month in which the Borrower's next annual or quarterly financial statements are actually delivered in compliance with such Section ); provided, that for each day in the period from and including the Closing Date to and including the last day of the calendar month in which the Borrower's quarterly financial statements for the quarter ending September 30, 1997 are required to be delivered under Section 6.01(b) hereof (or, if earlier, the last day of the calendar month in which such quarterly financial statements are actually delivered in compliance with Section 6.01(b) hereof), the Borrower will be deemed to have satisfied Financial Test II. If the conditions for application of the Level II Performance Margins, Level III Performance Margins or Level IV Performance Margins do not apply on a particular day, the "Applicable Margin" for such day shall mean the applicable percentage set forth below under "Level I Performance Margins": LEVEL I PERFORMANCE MARGINS: Interest Rate Option Applicable Margin Base Rate Option Zero Euro-Rate Option 1.25% Level I Performance Margins shall apply in the event that the conditions for application of the Level II Performance Margins, Level III Performance Margins or Level IV Performance Margins do not apply. LEVEL II PERFORMANCE MARGINS: Interest Rate Option Applicable Margin Base Rate Option Zero Euro-Rate Option 1.00% Level II Performance Margins shall apply in the event that Financial Test II is satisfied and the other conditions set forth above are met. "Financial Test II" means that, as of the end of the relevant fiscal quarter, the Consolidated Funded Debt Ratio (Adjusted) for the period of four consecutive fiscal quarters ending on the last day of such fiscal quarter, considered as a single accounting period, is less than 4.00 and greater than or equal to 3.00. LEVEL III PERFORMANCE MARGINS: Interest Rate Option Applicable Margin Base Rate Option Zero Euro-Rate Option 0.875% Level III Performance Margins shall apply in the event that Financial Test III is satisfied and the other conditions set forth above are met. "Financial Test III" means that, as of the end of the relevant fiscal quarter, the Consolidated Funded Debt Ratio (Adjusted) for the period of four consecutive fiscal quarters -7- 266 ending on the last day of such fiscal quarter, considered as a single accounting period, is less than 3.00 and greater than or equal to 2.50. LEVEL IV PERFORMANCE MARGINS: Interest Rate Option Applicable Margin Base Rate Option Zero Euro-Rate Option 0.75% Level IV Performance Margins shall apply in the event that Financial Test IV is satisfied and the other conditions set forth above are met. "Financial Test IV" means that, as of the end of the relevant fiscal quarter, the Consolidated Funded Debt Ratio (Adjusted) for the period of four consecutive fiscal quarters ending on the last day of such fiscal quarter, considered as a single accounting period, is less than 2.50. (c) FUNDING PERIODS. At any time when the Borrower shall select, convert to or renew the Euro-Rate Option to apply to any part of the Letter of Credit Unreimbursed Draws, the Borrower shall specify one or more periods (the "Funding Periods") during which each such Option shall apply, such Funding Periods being as set forth below: Interest Rate Option Available Funding Periods Euro-Rate Option One, two, three or six months ("Euro-Rate Funding Period"); provided, that: (i) Each Euro-Rate Funding Period shall begin on a London Business Day, and the term "month," when used in connection with a Euro-Rate Funding Period, shall be construed in accordance with prevailing practices in the interbank eurodollar market at the commencement of such Euro-Rate Funding Period, as determined in good faith by the Agent (which determination shall be conclusive); (ii) The Borrower may not select a Funding Period that would end after the Reimbursement Target Date; and (iii) The aggregate number of Funding Segments of the Euro-Rate Portion at any time shall not exceed two. (d) TRANSACTIONAL AMOUNTS. Each selection of, conversion from, conversion to or renewal of an interest rate Option and each payment or prepayment of any Letter of Credit Unreimbursed Draws shall be in a principal amount such that after giving effect thereto the aggregate principal amount of the Base Rate Portion, and the aggregate principal amount of each Funding Segment of the Euro-Rate Portion, shall be as set forth below: Portion or Funding Segment Allowable Aggregate Principal Amounts Base Rate Portion Any Each Funding Segment $500,000 or an integral -8- 267 of the Euro-Rate Portion multiple thereof (e) EURO-RATE UNASCERTAINABLE; IMPRACTICABILITY. If (i) on any date on which a Euro-Rate would otherwise be set the Agent (in the case of clauses (A) or (B) below) or any Lender (in the case of clause (C) below) shall have determined in good faith (which determination shall be conclusive) that: (A) adequate and reasonable means do not exist for ascertaining such Euro-Rate, (B) a contingency has occurred which materially and adversely affects the interbank eurodollar market, or (C) the effective cost to such Lender of funding a proposed Funding Segment of the Euro-Rate Portion from a Corresponding Source of Funds shall exceed the Euro-Rate applicable to such Funding Segment, or (ii) at any time any Lender shall have determined in good faith (which determination shall be conclusive) that the making, maintenance or funding of any part of the Euro-Rate Portion has been made impracticable or unlawful by compliance by such Lender or a Notional Euro-Rate Funding Office in good faith with any Law or guideline or interpretation or administration thereof by any Governmental Authority charged with the interpretation or administration thereof or with any request or directive of any such Governmental Authority (whether or not having the force of law); then, and in any such event, the Agent or such Lender, as the case may be, may notify the Borrower of such determination (and any Lender giving such notice shall notify the Agent). Upon such date as shall be specified in such notice (which shall not be earlier than the date such notice is given), the obligation of each of the Lenders to allow the Borrower to select, convert to or renew the Euro-Rate Option shall be suspended until the Agent or such Lender, as the case may be, shall have later notified the Borrower (and any Lender giving such notice shall notify the Agent) of the Agent's or such Lender's determination in good faith (which determination shall be conclusive) that the circumstance giving rise to such previous determination no longer exist. If any Lender notifies the Borrower of a determination under clause (ii) of this Section 3.09(e), the Euro-Rate Portion of the Letter of Credit Unreimbursed Draws in which such Lender (the "Affected Lender") has a Letter of Credit Participating Interest shall automatically be converted to the Base Rate Option as of the date specified in such notice (and accrued interest thereon shall be due and payable on such date). 3.10. CONVERSION OR RENEWAL OF INTEREST RATE OPTIONS. (a) CONVERSION OR RENEWAL. Subject to the provisions of Section 3.16(b) hereof and the other provisions of this Agreement, before the Reimbursement Target Date the Borrower may convert any part of the Letter of Credit Unreimbursed Draws from any interest rate Option or Options to one or more different interest rate Options and may renew the Euro-Rate Option as to any Funding Segment of the Euro-Rate Portion: (i) At any time with respect to conversion from the Base Rate Option; or -9- 268 (ii) At the expiration of any Funding Period with respect to conversions from or renewals of the Euro-Rate Option, as to the Funding Segment corresponding to such expiring Funding Period. Whenever the Borrower desires to convert or renew any interest rate Option or Options, the Borrower shall provide to the Agent Standard Notice setting forth the following information: (w) The date, which shall be a Business Day, on which the proposed conversion or renewal is to be made; (x) The principal amounts selected in accordance with Section 3.09(d) hereof of the Base Rate Portion and each Funding Segment of the Euro-Rate Portion to be converted from or renewed; (y) The interest rate Option or Options selected in accordance with Section 3.09(a) hereof and the principal amounts selected in accordance with Section 3.09(d) hereof of the Base Rate Portion and each Funding Segment of the Euro-Rate Portion to be converted to; and (z) With respect to each Funding Segment to be converted to or renewed, the Funding Period selected in accordance with Section 3.09(c) hereof to apply to such Funding Segment. Standard Notice having been so provided, after the date specified in such Standard Notice, interest shall be calculated upon the amount of the Letter of Credit Unreimbursed Draws as so converted or renewed. Interest on any Letter of Credit Unreimbursed Draws converted or renewed (automatically or otherwise) shall be due and payable on the conversion or renewal date. (b) FAILURE TO CONVERT OR RENEW. Absent due notice from the Borrower of conversion or renewal in the circumstances described in Section 3.10(a)(ii) hereof, any part of the Euro-Rate Portion for which such notice is not received shall be converted automatically to the Base Rate Option on the last day of the expiring Funding Period. 3.11. PREPAYMENTS GENERALLY. Whenever the Borrower desires or is required to prepay any part of the Letter of Credit Unreimbursed Draws, it shall provide Standard Notice to the Agent setting forth the following information: (a) The date, which shall be a Business Day, on which the proposed prepayment is to be made; (b) The total principal amount of such prepayment, which shall be the sum of the principal amounts selected pursuant to clause (c) of this Section 3.11, and which, if a partial prepayment, shall be an integral multiple of $500,000; and (c) The principal amounts selected in accordance with Section 3.09(d) hereof of the Base Rate Portion and each part of each Funding Segment of the Euro-Rate Portion to be prepaid. Standard Notice having been so provided, on the date specified in such Standard Notice, the principal amounts of the Base Rate Portion and each part of the Euro-Rate Portion specified in such notice, together with interest on each such principal amount to such date, shall be due and payable. -10- 269 3.12. OPTIONAL PREPAYMENTS. The Borrower shall have the right at its option from time to time to prepay any Letter of Credit Unreimbursed Draws in whole or part without premium or penalty (subject, however, to Section 3.16(b) hereof): (a) At any time with respect to any part of the Base Rate Portion; or (b) At the expiration of any Funding Period with respect to prepayment of the Euro-Rate Portion with respect to any part of the Funding Segment corresponding to such expiring Funding Period. Any such prepayment shall be made in accordance with Section 3.11 hereof. 3.13. MANDATORY PREPAYMENT AND CASH COLLATERALIZATION. The Borrower shall prepay the Letter of Credit Unreimbursed Draws in full, and shall provide cash collateral for all outstanding Letters of Credit in accordance with Section 3.07 hereof, in the event that at any time (i) there shall fail to be in force a Revolving Credit Agreement (which, so long as the Senior Note Indenture is in force, shall constitute a "Credit Agreement" as defined therein), under which the Borrower at such time has the right to borrow from financial institutions on a revolving basis from time to time an aggregate principal amount not less than $75,000,000, or the Revolving Credit Maturity Date thereunder shall have occurred, or the Borrower shall be required to make any prepayment of principal thereunder or to post cash collateral thereunder (except prepayments of principal or the posting of cash collateral which otherwise would be mandatory solely as a result of the Borrower's provision of notice of prepayment), or (ii) the Borrower shall not have procured a commitment from a financial institution to provide a successor Revolving Credit Agreement complying with the foregoing clause (i) by the 90th day before the Revolving Credit Maturity Date under the then-current Revolving Credit Agreement. If prepayment of the Letter of Credit Unreimbursed Draws and cash collateralization of outstanding Letters of Credit is required under this Section 3.13, the Borrower shall give notice of such prepayment in accordance with Section 3.11 hereof so that such prepayment is made not later than the date of the applicable event referred to in the foregoing clause (i) or (ii), and shall make such cash collateralization not later than such date. 3.14. INTEREST PAYMENT DATES. Accrued and unpaid interest on the Letter of Credit Unreimbursed Draws shall be due and payable on the following dates (and on such other dates as may be specified elsewhere in this Agreement and the other Loan Documents): (a) in the case of the Base Rate Portion, on each Regular Monthly Payment Date, and (b) in the case of each Funding Segment of the Euro-Rate Portion, on the last day of the corresponding Euro-Rate Funding Period and, if such Euro-Rate Funding Period is longer than three months, also on the last day of the third month during such Funding Period. After maturity of any part of the Letter of Credit Unreimbursed Draws (by acceleration or otherwise), interest on such part of the Letter of Credit Unreimbursed Draws shall be due and payable on demand. 3.15. PAYMENTS GENERALLY. (a) [Reserved]. -11- 270 (b) PAYMENTS GENERALLY. All payments and prepayments to be made by the Borrower in respect of Letter of Credit Unreimbursed Draws, interest, fees, indemnities, expenses or other amounts due from the Borrower hereunder or under any other Loan Document shall be payable in Dollars at 1:00 p.m., Pittsburgh time, on the day when due without presentment, demand, protest or notice of any kind, all of which are hereby expressly waived, and an action therefor shall immediately accrue, without setoff, counterclaim, withholding or other deduction of any kind or nature (except for payments to a Lender subject to a withholding deduction under Section 3.17(c) hereof). Except for payments under Sections 3.16 or 10.06 hereof, such payments shall be made to the Agent at its Office in funds immediately available at such Office, and payments under Sections 3.16 or 10.06 hereof shall be made to the applicable Lender or Issuing Bank at such domestic account as it shall specify to the Borrower from time to time in funds immediately available at such account. Any payment received by the Agent or such Lender or Issuing Bank after 1:00 p.m., Pittsburgh time, on any day shall be deemed to have been received on the next succeeding Business Day. The Agent shall distribute to the Lenders or the Issuing Bank, as the case may be, all such payments received by the Agent for their respective accounts as promptly as practicable after receipt by the Agent. (c) INTEREST ON OVERDUE AMOUNTS. To the extent permitted by law, after there shall have become due (by acceleration or otherwise) Letter of Credit Unreimbursed Draws, interest, fees, indemnity, expenses or any other amounts due from the Borrower hereunder or under any other Loan Document, such amounts shall bear interest for each day until paid (before and after judgment), payable on demand, at a rate per annum (in each case based on a year of 365 or 366 days, as the case may be, and actual days elapsed) which for each day shall be equal to the following: (i) In the case of any part of the Euro-Rate Portion, (A) until the end of the applicable then-current Funding Period at a rate per annum 2.00% above the rate otherwise applicable to such part, and (B) thereafter in accordance with the following clause (ii); and (ii) In the case of any other amount due from the Borrower hereunder or under any Loan Document, 2.00% above the then-current Base Rate Option. To the extent permitted by law, interest accrued on any amount which has become due hereunder or under any Loan Document shall compound on a day-by-day basis, and hence shall be added daily to the overdue amount to which such interest relates. 3.16. ADDITIONAL COMPENSATION IN CERTAIN CIRCUMSTANCES. (a) INCREASED COSTS OR REDUCED RETURN RESULTING FROM TAXES, RESERVES, CAPITAL ADEQUACY REQUIREMENTS, EXPENSES, ETC. If any Law or guideline or interpretation or application thereof by any Governmental Authority charged with the interpretation or administration thereof or compliance with any request or directive of any Governmental Authority (whether or not having the force of law) now existing or hereafter adopted: (i) subjects any Lender Party or any Notional Euro-Rate Funding Office to any tax or changes the basis of taxation with respect to this Agreement, the Letter of Credit Unreimbursed Draws, the Letters of Credit, or the Letter of Credit Participating Interests, or payments by the Borrower of principal, interest, fees or other amounts due from the Borrower hereunder (except for taxes on the overall net income or overall gross receipts of such Lender Party or such Notional Euro-Rate Funding Office imposed by the jurisdictions (federal, state and local) in which the Lender Party's principal office or Notional Euro-Rate Funding Office is located), -12- 271 (ii) imposes, modifies or deems applicable any reserve, special deposit, insurance assessment or any other requirement against credits or commitments to extend credit extended by, assets (funded or contingent) of, deposits with or for the account of, other acquisitions of funds by, such Lender Party or any Notional Euro-Rate Funding Office (other than requirements expressly included herein in the determination of the Euro-Rate hereunder), (iii) imposes, modifies or deems applicable any capital adequacy or similar requirement against assets (funded or contingent) of, or credits or commitments to extend credit extended by, any Lender Party or any Notional Euro-Rate Funding Office, or applicable to the obligations of any Lender Party or any Notional Euro-Rate Funding Office under this Agreement, or (iv) imposes upon any Lender Party or any Notional Euro-Rate Funding Office any other condition or expense with respect to this Agreement or its making, maintenance or funding of any Letter of Credit Unreimbursed Draw, Letter of Credit, or Letter of Credit Participating Interest, and the result of any of the foregoing is to increase the cost to, reduce the income receivable by, or impose any expense (including loss of margin) upon any Lender Party, any Notional Euro-Rate Funding Office or, in the case of clause (iii) hereof, any Person controlling a Lender Party, with respect to this Agreement or the making, maintenance or funding of any Letter of Credit Unreimbursed Draw, Letter of Credit, or Letter of Credit Participating Interest (or, in the case of any capital adequacy or similar requirement, to have the effect of reducing the rate of return on such Lender Party's or controlling Person's capital, taking into consideration such Lender Party's or controlling Person's policies with respect to capital adequacy) by an amount which such Lender Party deems to be material (such Lender Party being deemed for this purpose to have made, maintained or funded each Funding Segment of the Euro-Rate Portion from a Corresponding Source of Funds), such Lender Party may from time to time notify the Borrower of the amount determined in good faith by such Lender Party (which determination shall be conclusive) to be necessary to compensate such Lender Party or such Notional Euro-Rate Funding Office for such increase, reduction or imposition. In making any such determination such Lender Party may take into account any special, supplemental or other nonrecurring items, may apply any averaging or attribution methods, and may make such determination prospectively or retrospectively. Such amount shall be due and payable by the Borrower to such Lender Party five Business Days after such notice is given, together with an amount equal to interest on such amount from the date two Business Days after the date demanded until such due date at the Base Rate Option. The Borrower shall not be required to make any payment in respect of clause (a)(i) above to a Lender to the extent that such payment is attributable to a breach by such Lender of its obligations under Section 3.17(c) below. (b) FUNDING BREAKAGE. In the event that for any reason (i) the Borrower fails to convert or renew any part of the Letter of Credit Unreimbursed Draws which would, after such conversion or renewal, have a Euro-Rate Portion, after notice requesting such conversion or renewal has been given by the Borrower (whether such failure results from failure to satisfy applicable conditions to such conversion or renewal or otherwise), or (ii) any part of any Funding Segment of any Euro-Rate Portion becomes due (by acceleration or otherwise), or is paid, prepaid or converted to another interest rate Option (whether or not such payment, prepayment or conversion is mandatory or automatic and whether or not such payment or prepayment is then due), on a day other than the last day of the corresponding Funding Period, the Borrower shall indemnify each Lender on demand against any loss, liability, cost or expense of any kind or nature which such Lender may sustain or incur in connection with or as a result -13- 272 of such event. Such indemnification in any event shall include an amount equal to the excess, if any, of (x) the aggregate amount of interest which would have accrued on the amount of the Euro-Rate Portion not so converted or renewed, or which so becomes due, or which is so paid, prepaid or converted, as the case may be, from and including the date on which such conversion or renewal would have been made pursuant to such notice, or on which such part of such Funding Segment so becomes due, or on which such part of such Funding Segment is so paid, prepaid or converted, as the case may be, to the last day of the Funding Period applicable to such amount (or, in the case of a failure to convert or renew, the Funding Period that would have been applicable to such amount but for such failure), in each case at the applicable rate of interest for such Euro-Rate Portion provided for herein (excluding, however, the Applicable Margin included therein, if any), over (y) the aggregate amount of interest (as determined in good faith by such Lender) which would have accrued to such Lender on such amount for such period by placing such amount on deposit for such period with leading banks in the interbank market. A certificate by the Lender as to any amount that such Lender is entitled to receive pursuant to this Section 3.16(b) shall be conclusive if made in good faith. 3.17. TAXES. (a) PAYMENT NET OF TAXES. All payments made by the Borrower under this Agreement or any other Loan Document shall be made free and clear of, and without reduction or withholding for or on account of, any present or future income, stamp or other taxes, levies, imposts, duties, charges, fees, deductions or withholdings, now or hereafter imposed, levied, collected, withheld or assessed by any Governmental Authority, and all liabilities with respect thereto, excluding (i) in the case of each Lender Party, income or franchise taxes imposed on such Lender Party by the jurisdiction under the laws of which such Lender Party is organized or any political subdivision or taxing authority thereof or therein or as a result of a connection between such Lender Party and any jurisdiction other than a connection resulting solely from this Agreement and the transactions contemplated hereby, and (ii) in the case of each Lender, income or franchise taxes imposed by any jurisdiction in which such Lender's lending offices which make or book Letter of Credit Unreimbursed Draws are located or any political subdivision or taxing authority thereof or therein (all such non-excluded taxes, levies, imposts, deductions, charges or withholdings being hereinafter called "Taxes"). If any Taxes are required to be withheld or deducted from any amounts payable to any Lender Party under this Agreement or any other Loan Document, the Borrower shall pay the relevant amount of such Taxes and the amounts so payable to such Lender Party shall be increased to the extent necessary to yield to such Lender Party (after payment of all Taxes) interest or any such other amounts payable hereunder at the rates or in the amounts specified in this Agreement and the other Loan Documents. Whenever any Taxes are paid by the Borrower with respect to payments made in connection with this Agreement or any other Loan Document, as promptly as possible thereafter, the Borrower shall send to the Agent for its own account or for the account of such Lender Party, as the case may be, a certified copy of an original official receipt received by the Borrower showing payment thereof. (b) INDEMNITY. The Borrower hereby indemnifies each Lender Party for the full amount of all Taxes attributable to payments by or on behalf of the Borrower to such Lender Party hereunder or under any of the other Loan Documents, any Taxes paid by such Lender Party, and any present or future claims, liabilities or losses with respect to or resulting from any omission to pay or delay in paying any Taxes (including any incremental Taxes, interest or penalties that may become payable by such Lender -14- 273 Party as a result of any failure to pay such Taxes). Such indemnification shall be made within five Business Days from the date such Lender Party makes written demand therefor. The Borrower shall not be required to make any payment under this Section 3.17(b) to a Lender to the extent that such payment is attributable to a breach by such Lender of its obligations under Section 3.17(c) below. (c) WITHHOLDING. Each Lender that is incorporated or organized under the laws of any jurisdiction other than the United States or any state thereof agrees that, on or prior to the date it becomes party to this Agreement, it will furnish to the Borrower and the Agent two valid, duly completed copies of United States Internal Revenue Service Form 4224 or United States Internal Revenue Service Form 1001 or successor applicable form, as the case may be, certifying in each case that such Lender is entitled to receive payments under this Agreement and the other Loan Documents without deduction or withholding of any United States federal income taxes. Each Lender which so delivers to the Borrower and the Agent a Form 1001 or 4224, or a successor applicable form, agrees to deliver to the Borrower and the Agent two further copies of the said Form 1001 or 4224 or a successor applicable form, or other manner of certification, as the case may be, on or before the date that any such form expires or becomes obsolete or otherwise is required to be resubmitted as a condition to obtaining an exemption from withholding tax, or after the occurrence of any event requiring a change in the most recent form previously delivered by it, and such extensions or renewals thereof as may reasonably be requested by the Borrower or the Agent, certifying in the case of a Form 1001 or Form 4224 that such Lender is entitled to receive payments under this Agreement or any other Loan Document without deduction or withholding of any United States federal income taxes, unless in any such cases an event (including any changes in law) has occurred prior to the date on which any such delivery would otherwise be required which renders all such forms inapplicable or which would prevent such Lender from duly completing and delivering any such letter or form with respect to it and such Lender advises the Borrower and the Agent that it is not capable of receiving payments without any deduction or withholding of United States federal income tax. In addition, if at any time the Borrower believes that payments to any Lender (foreign or domestic) may be subject to U.S. backup withholding tax, such Lender shall, at the Borrower's reasonable request from time to time, if such Lender is legally able to do so, provide the Borrower with evidence establishing an exemption from U.S. backup withholding tax. (d) CREDITS. If any payment by the Borrower is made to or for the account of the Lender Party after deduction for or on account of any Taxes, and increased payments are made by the Borrower pursuant to Section 3.17(a), then, if such Lender Party in its reasonable opinion determines that it has received or been granted a credit against or remission for such Taxes, such Lender Party shall, to the extent it can do so without prejudice to the retention of the amount of such credit or remission, reimburse to the Borrower such amount as such Lender Party shall, in its reasonable opinion acting in good faith, have determined to be attributable to the relevant Taxes or deduction or withholding. Any payment made by a Lender Party under this Section 3.17(d) shall be prima facie evidence of the amount due to the Borrower hereunder. Nothing herein contained shall interfere with the right of any Lender Party to arrange its tax affairs in whatever manner it thinks fit and, in particular, no Lender Party shall be under any obligation to claim relief from its corporate profits or similar tax liability in respect of such tax in priority to any other claims, reliefs, credits or deductions available to it nor oblige any Lender Party to disclose any information relating to its tax affairs or any computations in respect thereof. 3.18. FUNDING BY BRANCH, SUBSIDIARY OR AFFILIATE. Each Lender shall have the right from time to time, prospectively or retrospectively, without notice to the Borrower, to deem any branch, subsidiary or affiliate of such Lender to have made, maintained or funded any part of the Euro-Rate Portion at any time. Any branch, subsidiary or affiliate so deemed shall be known as a "Notional Euro-Rate Funding Office." Such Lender shall deem any part of the Euro-Rate Portion or the funding therefor to have been transferred to a different Notional Euro-Rate Funding Office if such transfer would avoid or -15- 274 cure an event or condition described in Section 3.09(e)(ii) hereof or would lessen compensation payable by the Borrower under Section 3.16(a) hereof, and if such Lender determines in its sole discretion that such transfer would be practicable and would not have a material adverse effect on such part of the Letter of Credit Unreimbursed Draws, such Lender or any Notional Euro-Rate Funding Office (it being assumed for purposes of such determination that each part of the Euro-Rate Portion is actually made or maintained by or funded through the corresponding Notional Euro-Rate Funding Office). Notional Euro-Rate Funding Offices may be selected by such Lender without regard to such Lender's actual methods of making, maintaining or funding Letter of Credit Unreimbursed Draws or any sources of funding actually used by or available to such Lender. ARTICLE IV REPRESENTATIONS AND WARRANTIES The Borrower hereby represents and warrants to each Lender Party as follows: 4.01. CORPORATE STATUS. The Borrower and each Subsidiary of the Borrower is a Corporation duly organized and validly existing under the laws of its jurisdiction of organization. The Borrower and each Subsidiary of the Borrower has corporate power and authority to own its property and to transact the business in which it is engaged or presently proposes to engage. The Borrower and each Subsidiary of the Borrower is duly qualified to do business as a foreign Corporation and, to the extent applicable, is in good standing in all jurisdictions in which the ownership of its properties or the nature of its activities or both makes such qualification necessary or advisable, except for matters that, individually or in the aggregate, do not, and would not be likely to, have a Material Adverse Effect. 4.02. CORPORATE POWER AND AUTHORIZATION. The Borrower has corporate power and authority to execute, deliver, perform, and take all actions contemplated by, each Loan Document to which it is a party, and all such action has been duly and validly authorized by all necessary corporate proceedings on its part. Without limitation of the foregoing, the Borrower has the corporate power and authority to cause the Letters of Credit to become subject to the Loan Documents and has taken all necessary corporate action to authorize the foregoing. 4.03. EXECUTION AND BINDING EFFECT. This Agreement, each other Loan Document to which the Borrower is a party and which is executed and delivered or required to be executed and delivered on or before the date as of which this representation and warranty is made, has been duly and validly executed and delivered by the Borrower. This Agreement and each such Loan Document constitutes, and each other Loan Document when executed and delivered by the Borrower will constitute, the legal, valid and binding obligation of the Borrower, enforceable in accordance with its terms. 4.04. GOVERNMENTAL APPROVALS AND FILINGS. No approval, order, consent, authorization, certificate, license, permit or validation of, or exemption or other action by, or filing, recording or registration with, or notice to, any Governmental Authority (collectively, "Governmental Action") is or will be necessary or advisable in connection with execution and delivery of any Loan Document, consummation of the transactions herein or therein contemplated, performance of or compliance with the terms and conditions hereof or thereof or to ensure the legality, validity, binding effect, enforceability or admissibility in evidence hereof or thereof, except for the following: (a) filings and recordings in respect of the Liens in favor of the Collateral Agent and the Agent contemplated hereby and thereby, and (b) other matters set forth in Schedule 4.04 hereof. Each Governmental Action referred to in the foregoing clauses (a) and (b) has been duly obtained or made, as the case may be, and is in full force and effect (except, in the case of clause (a), for the filing of continuation statements and -16- 275 like renewal filings and recordings which are not yet required to be made). There is no action, suit, proceeding or investigation pending or (to the Borrower's knowledge after due inquiry) threatened which seeks or may result in the reversal, rescission, termination, modification or suspension of any such Governmental Action. 4.05. ABSENCE OF CONFLICTS. Neither the execution and delivery of any Loan Document nor consummation of the transactions herein or therein contemplated, nor performance of or compliance with the terms and conditions hereof or thereof, does or will (a) violate or conflict with any Law, or (b) violate or conflict with, or constitute a default under, or result in (or give rise to any right, contingent or other, of any Person to cause) any termination, cancellation, prepayment or acceleration of performance of, or result in the creation or imposition of (or give rise to any obligation, contingent or other, to create or impose) any Lien upon any property of the Borrower or any Subsidiary of the Borrower (except for any Lien in favor of the Collateral Agent securing the Obligations) pursuant to, or otherwise result in (or give rise to any right, contingent or other, of any Person to cause) any change in any right, power, privilege, duty or obligation of the Borrower or any Subsidiary of the Borrower under or in connection with, (i) the articles of incorporation or by-laws (or other constituent documents) of the Borrower or any Subsidiary of the Borrower, or (ii) any agreement or instrument to which the Borrower or any Subsidiary of the Borrower is a party or by which any of them or any of their respective properties may be subject or bound, except, in the case of the foregoing clause (b)(ii), for matters set forth on Schedule 4.05 hereof. 4.06. AUDITED FINANCIAL STATEMENTS. The Borrower has heretofore furnished to the Agent and each Lender consolidated balance sheets of the Borrower and its consolidated Subsidiaries as of December 31, 1994 and December 31, 1995 and the related consolidated statements of income, cash flows and changes in stockholders' equity for the fiscal years then ended, as audited and reported on by Deloitte & Touche, independent certified public accountants for the Borrower, who delivered an unqualified opinion in respect thereof. Such financial statements (including the notes thereto) present fairly the financial position of the Borrower and its consolidated Subsidiaries as of the end of each such fiscal year and the results of their operations and their cash flows for the fiscal years then ended, all in conformity with GAAP. 4.07. INTERIM FINANCIAL STATEMENTS. The Borrower has heretofore furnished to the Agent and each Lender interim consolidated balance sheets of the Borrower and its consolidated Subsidiaries as of September 30, 1996, together with the related consolidated statements of income, cash flows and changes in stockholders' equity for the period from January 1, 1996 to such date. Such financial statements (including the notes thereto) present fairly the financial condition of the Borrower and its consolidated Subsidiaries as of September 30, 1996, and their respective results of operations and cash flows for the fiscal period then ended, all in conformity with GAAP (except that such financial statements do not contain all of the footnote disclosures required by GAAP), subject to normal and recurring year-end audit adjustments. 4.08. ABSENCE OF UNDISCLOSED LIABILITIES. Neither the Borrower nor any Subsidiary of the Borrower has any liability or obligation of any nature (whether absolute, accrued, contingent or other, whether or not due, including but not limited to forward or long-term commitments or unrealized or anticipated losses from unfavorable commitments) that would be required by GAAP to be reflected on -17- 276 a consolidated balance sheet of the Borrower and its Subsidiaries (including the notes thereto) or that has, or would be likely to have, a Material Adverse Effect, except (a) matters set forth on Schedule 4.08 hereto, (b) liabilities and obligations disclosed in the financial statements referred to in Sections 4.05 and 4.06 hereof, (c) liabilities and obligations incurred after December 31, 1995 in the ordinary course of business and consistent with past practices, and (d) obligations under the Credit Facilities. 4.09. ACCURATE AND COMPLETE DISCLOSURE. All written information heretofore, contemporaneously or hereafter provided by or on behalf of the Borrower or any Subsidiary of the Borrower to any Secured Party pursuant to or in connection with any Loan Document or any transaction contemplated hereby or thereby is or will be (as the case may be) true and accurate in all material respects on the date as of which such information is dated (or, if not dated, when received by such Secured Party) and does not or will not (as the case may be) omit to state any material fact necessary to make such information not misleading at such time in light of the circumstances in which it was provided. Except as disclosed to the Agent and each Lender in writing, the Borrower is not aware of any event, change or effect (other than political, social or economic events, changes or effects of general national or global scope) having or likely to have individually or in the aggregate, a Material Adverse Effect. 4.10. PROJECTIONS. The Borrower has delivered to the Agent projections prepared by the Borrower, dated February 5, 1997, for the years 1997 through 2001, demonstrating the projected consolidated financial condition, results of operations and cash flows of the Borrower and its Subsidiaries, which projections are accompanied by a written statement of the assumptions and estimates underlying such projections. Such projections, assumptions and estimates, as of the Closing Date, are reasonable, consistent with the Loan Documents, and represent the best judgment of the Borrower on such matters. Such projections, assumptions and estimates are based upon political, social and economic assumptions that are believed to be reasonable. Nothing has come to the attention of the Borrower as of the Closing Date which would lead it to believe that such projections will not be attained or exceeded. Such projections are not a guarantee of future performance. 4.11. SOLVENCY. On and as of the date hereof, and on the Closing Date, the Borrower and each Significant Subsidiary of the Borrower is and will be Solvent (and for this purpose, each Subsidiary of the Borrower which is not Solvent shall be deemed a Significant Subsidiary if, collectively, together with their respective Subsidiaries, treated as a single entity, they would constitute a Significant Subsidiary). 4.12. MARGIN REGULATIONS. No part of the proceeds of any extension of credit hereunder will be used for the purpose of buying or carrying any "margin stock," as such term is used in Regulations G and U of the Board of Governors of the Federal Reserve System, as amended from time to time, to extend credit to others for the purpose of buying or carrying any "margin stock," or to extend credit to any Subsidiary of the Borrower that is a Broker-Dealer. Neither the Borrower nor any Subsidiary of the Borrower is engaged in the business of extending credit to others for the purpose of buying or carrying "margin stock." Neither the Borrower nor any Subsidiary of the Borrower owns "margin stock" sufficient to cause any Loan Obligations to be deemed "indirectly secured" by "margin stock" within the meaning of such Regulations. Neither any extension of credit pursuant to this Agreement nor any use of proceeds of any such extension of credit will violate or conflict with the provisions of Regulation G, T, U or X of the Board of Governors of the Federal Reserve System, as amended from time to time. 4.13. REGULATORY RESTRICTIONS. Except as set forth in Schedule 4.13 hereof, neither the Borrower nor any Subsidiary of the Borrower is (a) an "investment company" or a company "controlled" -18- 277 by an investment company within the meaning of the Investment Company Act of 1940, as amended, (b) a "holding company" or a "subsidiary company" of a "holding company" or an "affiliate" of either a "holding company" or a "subsidiary company" within the meaning of the Public Utility Holding Company Act of 1935, as amended, (c) subject to regulation under the Federal Power Act, the Interstate Commerce Act, or the Investment Company Act of 1940, as amended, or (d) subject to any other Law which purports to restrict or regulate its ability to borrow money or obtain credit as a consequence of the nature of the business conducted by such Person. 4.14. SUBSIDIARIES. Schedule 4.14 hereof states the authorized capitalization of each Subsidiary of the Borrower, the number of Shares of Capital Stock of each class issued and outstanding of each such Subsidiary, and the number and percentage of outstanding Shares of Capital Stock of each such class owned by the Borrower and by each Subsidiary of the Borrower. The outstanding Shares of Capital Stock of each Subsidiary of the Borrower have been duly authorized and validly issued and are fully paid and nonassessable. The Borrower and each Subsidiary of the Borrower owns beneficially and of record and has good title to all of the Shares of Capital Stock it is listed as owning in such Schedule 4.14, free and clear of any Lien, except for Liens in favor of the Collateral Agent securing the Obligations. Except as set forth on Schedule 4.14 hereof, there are no options, warrants, calls, subscriptions, conversion rights, exchange rights, preemptive rights or other rights, agreements or arrangements (contingent or other) which may in any circumstances now or hereafter obligate any Subsidiary of the Borrower to issue any Shares of its Capital Stock or any other securities. 4.15. PARTNERSHIPS, ETC. Neither the Borrower nor any Subsidiary of the Borrower is a partner (general or limited) of any partnership, is a party to any joint venture, or owns (beneficially or of record) any equity or similar interest in any Person (including but not limited to any interest pursuant to which the Borrower or such Subsidiary has or may in any circumstance have an obligation to make capital contributions to, or be generally liable for or on account of the liabilities, acts or omissions of such other Person), except (a) distributorship or similar arrangements that do not involve liability on the part of the Borrower or any of its Subsidiaries in the nature of the liability of a general partner, and (b) partnership interests permitted under Sections 7.05(g) and 7.05(j) hereof. 4.16. LITIGATION. There is no pending or (to the knowledge of the Borrower after due inquiry) threatened action, suit, proceeding or investigation by or before any Governmental Authority against or affecting the Borrower or any Subsidiary of the Borrower, except for (x) matters set forth on Schedule 4.16 hereto, and (y) matters that if adversely decided, individually or in the aggregate, do not, and would not be likely to, have a Material Adverse Effect. 4.17. ABSENCE OF OTHER CONFLICTS. Neither the Borrower nor any Subsidiary of the Borrower is in violation of or conflict with, or is subject to any contingent liability on account of any violation of or conflict with: (a) any Law, (b) its articles of incorporation or by-laws (or other constituent documents), or (c) any agreement or instrument to which it is party or by which it or any of its properties may be subject or bound, except for matters that, individually or in the aggregate, do not, and would not be likely to, have a Material Adverse Effect. -19- 278 4.18. INSURANCE. The Borrower and each Subsidiary of the Borrower maintains, or causes there to be maintained, with financially sound and reputable insurers not related to or affiliated with the Borrower insurance with respect to its properties and business and against at least such liabilities, casualties and contingencies and in at least such types and amounts as is customary in the case of Persons engaged in the same or a similar business or having similar properties similarly situated. 4.19. TITLE TO PROPERTY. The Borrower and each Subsidiary of the Borrower has good and marketable title in fee simple to all real property owned or purported to be owned by it and good title to all other property of whatever nature owned or purported to be owned by it, including but not limited to all property reflected in the most recent audited balance sheet referred to in Section 4.06 hereof (except as sold or otherwise disposed of in the ordinary course of business after the date of such balance sheet), in each case free and clear of all Liens, other than Permitted Liens. 4.20. INTELLECTUAL PROPERTY. The Borrower and each Subsidiary of the Borrower owns, or is licensed or otherwise has the right to use, all the patents, trademarks, service marks, names (trade, service, fictitious or other), copyrights, technology (including but not limited to computer programs and software), know-how, processes, data bases and other rights, free from burdensome restrictions, necessary to own and operate its properties and to carry on its business as presently conducted and presently planned to be conducted without conflict with the rights of others, except for matters that, individually or in the aggregate, do not, and would not be likely to, have a Material Adverse Effect. 4.21. TAXES. All federal income tax returns required to be filed by or on behalf of the Borrower or any Subsidiary of the Borrower have been properly prepared, executed and filed. All other tax and information returns required to be filed by or on behalf of the Borrower or any Subsidiary of the Borrower have been properly prepared, executed and filed, except for matters that, individually or in the aggregate, do not, and would not be likely to, have a Material Adverse Effect. All taxes, assessments, fees and other governmental charges upon the Borrower or any Subsidiary of the Borrower or upon any of their respective properties, incomes, sales or franchises which are due and payable have been paid, other than those not yet delinquent and payable without premium or penalty, and except for those being diligently contested in good faith by appropriate proceedings, and in each case such reserves and provisions for taxes as may be required by GAAP shall have been made on the books of the Borrower and each Subsidiary of the Borrower. The reserves and provisions for taxes on the books of the Borrower and each Subsidiary of the Borrower for all open years and for its current fiscal period are adequate in accordance with GAAP. As of the Closing Date, neither the Borrower nor any Subsidiary of the Borrower knows of any proposed additional assessment or basis for any material assessment for additional taxes (whether or not reserved against), other than as set forth on Schedule 4.21 hereto. 4.22. EMPLOYEE BENEFITS. Except for matters disclosed to the Agent before the date as of which this representation and warranty is made or reaffirmed, neither the Borrower, any Subsidiary of the Borrower or Controlled Group Member has incurred any liability that has not been fully discharged (or any contingent or other potential liability that represents a material risk of becoming an actual liability) exceeding $150,000 in the aggregate for all such Persons for or in connection with any of the following: (a) any Pension-Related Event (whether or not any such Pension-Related Event has occurred) or (b) any complete or partial withdrawal from any Multiemployer Plan (whether or not such withdrawal has occurred). All employee benefit arrangements covering employees of the Borrower or any of its Subsidiaries have been administered in substantial compliance with, and funded in accordance with, applicable Law. 4.23. ENVIRONMENTAL MATTERS. Except as disclosed in Schedule 4.23 hereof, the Borrower and each Subsidiary of the Borrower and each of their respective Environmental Affiliates is -20- 279 and has been in full compliance with all applicable Environmental Laws, except for matters which, individually or in the aggregate, do not, and would not be likely to, have a Material Adverse Effect. Except as disclosed in Schedule 4.23 hereof, there is no Environmental Claim pending or to the knowledge of the Borrower threatened, and there are no past or present acts, omissions, events or circumstances (including but not limited to any dumping, leaching, deposition, removal, abandonment, escape, emission, discharge or release of any Environmental Concern Material at, on or under any facility or property now or previously owned, operated or leased by the Borrower or any Subsidiary of the Borrower or any of their respective Environmental Affiliates) that could form the basis of any Environmental Claim, against the Borrower or any Subsidiary of the Borrower or any of their respective Environmental Affiliates, except for matters which do not, and, if adversely decided, individually or in the aggregate, would not, have a Material Adverse Effect. Except as disclosed in Schedule 4.23 hereof, no facility or property now or previously owned, operated or leased by the Borrower or any Subsidiary of the Borrower or any of their respective Environmental Affiliates is an Environmental Cleanup Site. No Lien exists, and no condition exists which would be likely to result in the filing of a Lien, against any property of the Borrower or any Subsidiary of the Borrower under any Environmental Law. ARTICLE V CONDITIONS OF ISSUANCE 5.01. CONDITIONS TO ISSUANCE. The obligation of the Issuing Bank to cause the Closing Date to occur is subject to performance by the Borrower of its obligations to be performed hereunder or under the other Loan Documents, to the satisfaction of the conditions precedent set forth herein and in the other Loan Documents and to the satisfaction, immediately prior to or concurrently with such event of the following further conditions precedent: (a) AGREEMENT; CERTIFICATE OF CLOSING. The Agent shall have received, with a copy for each Lender, this Agreement, duly executed on behalf of the Borrower, and the Agent shall have received the certificate referred to in Section 3.01(a), duly executed on behalf of the Borrower, satisfactory in form and substance to the Agent. (b) SHARED SECURITY DOCUMENTS. The Collateral Agent shall have received the following, each of which shall be in form and substance satisfactory to the Agent, with a copy for each Lender (except that the Lenders shall not be entitled to receive duplicate originals of the stock certificates and other instruments pledged pursuant to the following Shared Security Documents and the stock powers delivered in connection therewith): (i) The Collateral Agency Agreement, duly executed on behalf of Borrower and the other parties thereto. (ii) The Borrower Pledge Agreement, duly executed on behalf of the Borrower. (iii) Certificates and instruments representing the stock certificates and other instruments pledged pursuant to the Borrower Pledge Agreement, accompanied by undated duly executed instruments of transfer or assignment in blank, in form and substance satisfactory to the Agent. (iv) Financing statements executed by the Borrower and in proper form for filing under the Uniform Commercial Code in such jurisdictions as may be necessary or, in the opinion of the Agent, desirable to create, perfect or protect the Liens created or -21- 280 purported to be created by the Borrower Pledge Agreement (which financing statements shall cover all personal property of the Borrower, whether or not constituting collateral security under the Borrower Pledge Agreement). (v) Evidence that all other actions necessary or, in the opinion of the Agent, desirable to create, perfect or protect the Liens created or purported to be created by the Borrower Pledge Agreement have been taken. (vi) Evidence of contemporaneous searches of UCC, tax and other appropriate registers, dockets and records, which shall have revealed no filings or recordings with respect to property of the Borrower (other than those relating to Permitted Liens). (c) WEFA ACQUISITION. The Borrower or a Wholly Owned Subsidiary of the Borrower shall have entered into a contract to acquire good title, free of all Liens, to all of the outstanding Shares of Capital Stock of WEFA Holdings, Inc. ("WEFA"). (d) ACQUISITION DOCUMENTS. The Agent shall have received, with copies for each Lender, true and correct copies (in each case certified as to authenticity on behalf of the Borrower) of the following, each of which shall be satisfactory in form and substance to the Agent: all agreements relating to the acquisition of the Shares of Capital Stock of WEFA (including in each case all exhibits, schedules and disclosure letters delivered pursuant thereto), all amendments, waivers and consents relating thereto, and all other side letters or agreements affecting the terms thereof or other transactions contemplated thereby. (e) OTHER CREDIT FACILITIES. The Agent shall have received evidence satisfactory to it that all conditions precedent to funding under the Revolving Credit Agreement and the Term Loan Agreement shall have been satisfied, and that, concurrently with the Closing Date, the Borrower shall have received $225,000,000 gross cash proceeds under the Term Loan Agreement. (f) DISCHARGE OF PRIOR CREDIT FACILITIES. With respect to (a) the Revolving Credit Agreement dated as of June 29, 1995 among the Borrower, the Issuing Banks referred to therein, the Lenders parties thereto from time to time, Mellon Bank, N.A., The First National Bank of Boston, and NationsBank, N.A. (Carolinas), as Co-Agents, and Mellon Bank, N.A., as Agent, as amended, (b) the Term Loan Agreement dated as of June 29, 1995 among the Borrower, the Lenders parties thereto from time to time, Mellon Bank, N.A., The First National Bank of Boston and NationsBank, N.A. (Carolinas), as Co-Agents, and Mellon Bank, N.A., as Agent, as amended, and (c) the Credit Agreement dated as of October 23, 1996 among the Borrower, the Issuing Bank referred to therein, and Mellon Bank, N.A., as Agent, as amended, all principal, interest, letter of credit draws, fees and other amounts outstanding or otherwise due and payable shall have been paid in full, all commitments thereunder shall have terminated, all outstanding letters of credit thereunder shall have been terminated or assumed under one of the Credit Facilities, and all collateral security therefor shall have been released. (g) GOVERNMENTAL APPROVALS AND FILINGS. The Agent shall have received, with copies for each Lender, true and correct copies (in each case certified as to authenticity on such date on behalf of the Borrower) of all items referred to in clause (b) of Section 4.04 hereof and such items shall be satisfactory in form and substance to the Agent and shall be in full force and effect. -22- 281 (h) OTHER CONFLICTS. The Agent shall have received, with copies for each Lender, true and correct copies (in each case certified as to authenticity on such date on behalf of the Borrower) of each consent, waiver, amendment or agreement which has been obtained by or on behalf of the Borrower or any Subsidiary of the Borrower in respect of any matter which would, absent such consent, waiver, amendment or agreement, be within the scope of clause (b)(ii) of Section 4.05 hereof, and such items shall be satisfactory in form and substance to the Agent and shall be in full force and effect. (i) CORPORATE PROCEEDINGS. The Agent shall have received, with a counterpart for each Lender, certificates by the Secretary or Assistant Secretary of the Borrower dated as of the Closing Date as to (i) true copies of the articles of incorporation and by-laws (or other constituent documents) of the Borrower in effect on such date, (ii) true copies of all corporate action taken by the Borrower relative to this Agreement and the other Loan Documents and (iii) the incumbency and signature of the respective officers of the Borrower executing this Agreement and the other Loan Documents to which the Borrower is a party, together with satisfactory evidence of the incumbency of such Secretary or Assistant Secretary. The Agent shall have received, with a copy for each Lender, certificates from the appropriate Secretary of State or other applicable Governmental Authorities dated not more than 30 days before the Closing Date showing the good standing of the Borrower in its state of incorporation. (j) 1996 FINANCIAL STATEMENTS. The Borrower shall have furnished to the Agent an unaudited consolidated balance sheet of the Borrower and its consolidated Subsidiaries as of December 31, 1996, and unaudited consolidated statements of income and stockholders' equity of the Borrower and its consolidated Subsidiaries for the fiscal year ended December 31, 1996. Such financial statements shall have been certified by a Responsible Officer of the Borrower as presenting fairly the consolidated financial position of the Borrower and its consolidated Subsidiaries as of the end of such fiscal year and the consolidated results of their operations and stockholders' equity for such fiscal year, in conformity with GAAP, subject to normal and recurring audit adjustments. (k) FORM U-1. The Agent shall have received, with a counterpart for each Lender, a Federal Reserve Board Form U-1, duly executed by the Borrower, satisfactory in form and substance to the Agent. (l) LITIGATION. There shall not be pending or (to the knowledge of the Borrower after due inquiry) threatened) action, suit, proceeding or investigation by or before any Governmental Authority seeking to challenge, prevent or declare illegal any of the transactions contemplated by the Loan Documents. (m) LEGAL OPINION OF COUNSEL TO THE BORROWER. The Agent shall have received, with an executed counterpart for each Lender, an opinion addressed to the Agent and each Lender, dated the Closing Date, of counsel to the Borrower (who shall be satisfactory to the Agent), as to such matters as may be requested by the Agent and in form and substance satisfactory to the Agent. (n) OFFICERS' CERTIFICATES. The Agent shall have received, with an executed counterpart for each Lender, certificates from such officers of the Borrower as to such matters as the Agent may request. -23- 282 (o) NO MATERIAL ADVERSE CHANGE. No material adverse change shall have occurred in the business, operations, assets, condition (financial or otherwise) or prospects of the Borrower and its Subsidiaries taken as a whole since September 30, 1996. (p) REPRESENTATIONS AND WARRANTIES, ETC. All representations and warranties set forth in Article IV hereof shall be true and correct on and as of the Closing Date as if made on and as of the Closing Date, after giving effect to the transactions contemplated by the Loan Documents to occur on or before the Closing Date. (q) NO DEFAULTS. No Event of Default or Potential Default shall have occurred and be continuing or exist on the Closing Date or after giving effect to the transactions contemplated by the Loan Documents to occur on or before the Closing Date. (r) NO VIOLATIONS OF LAW, ETC. Neither the making nor use of the Letters of Credit shall cause any Lender Party to violate any Law. (s) FEES, EXPENSES, ETC. The Borrower shall have executed and delivered an origination fee letter (the "Origination Fee Letter") of even date herewith satisfactory in form and substance to the Agent. All fees and other compensation required to be paid to the Agent or the Lenders pursuant hereto or pursuant to such Origination Fee Letter on or prior to the Closing Date shall have been paid or received. (t) ADDITIONAL MATTERS. All corporate and other proceedings, and all documents, instruments and other matters in connection with the transactions contemplated by this Agreement and the other Loan Documents, shall be satisfactory in form and substance to the Agent. The Agent shall have received such other documents, instruments and other items as the Agent may reasonably request. ARTICLE VI AFFIRMATIVE COVENANTS The Borrower hereby covenants to each Lender Party as follows: 6.01. BASIC REPORTING REQUIREMENTS. (a) ANNUAL AUDIT REPORTS. As soon as practicable, and in any event within 105 days after the close of each fiscal year of the Borrower, the Borrower shall furnish to the Agent, with a copy for each Lender, audited consolidated statements of income, cash flows and stockholders' equity of the Borrower and its consolidated Subsidiaries for such fiscal year, an unaudited consolidating statement of income of the Borrower and its consolidated Subsidiaries for such fiscal year, and an audited consolidated balance sheet and unaudited consolidating balance sheet of the Borrower and its consolidated Subsidiaries as of the close of such fiscal year, and notes to each, all in reasonable detail, prepared on a comparative basis in accordance with GAAP. Such audited financial statements shall be accompanied by an opinion of Deloitte & Touche or other independent certified public accountants of recognized national standing selected by the Borrower and reasonably satisfactory to the Agent. Such opinion shall be free of any exception, qualification or explanation not acceptable to the Agent (and in any event shall be free of any exception, qualification or explanation relating to ability to continue as a going concern, a limited scope of examination or independence). Such opinion in any event shall contain a written statement of such accountants substantially to the effect that (i) such accountants audited such -24- 283 consolidated financial statements in accordance with generally accepted auditing standards and (ii) in the opinion of such accountants such audited financial statements present fairly the financial position of the Borrower and its consolidated Subsidiaries as of the end of such fiscal year and the results of their operations and their cash flows and stockholders' equity for such fiscal year, in conformity with GAAP. Such unaudited financial statements shall be certified by a Responsible Officer of the Borrower as presenting fairly the consolidated and consolidating financial position of the Borrower and its consolidated Subsidiaries as of the end of such fiscal year, and the respective consolidated and consolidating results of their operations and their cash flows and stockholders' equity for such fiscal year, in conformity with GAAP. (b) QUARTERLY REPORTS. As soon as practicable, and in any event within 60 days after the close of each of the first three fiscal quarters of each fiscal year of the Borrower, the Borrower shall furnish to the Agent, with a copy for each Lender, unaudited consolidated statements of income, cash flows and stockholders' equity of the Borrower and its consolidated Subsidiaries for such fiscal quarter and for the period from the beginning of such fiscal year to the end of such fiscal quarter, an unaudited consolidating statement of income for such fiscal quarter and for the period from the beginning of such fiscal year to the end of such fiscal quarter, and unaudited consolidated and consolidating balance sheets of the Borrower and its consolidated Subsidiaries as of the close of such fiscal quarter, and notes to each, all in reasonable detail, setting forth in comparative form the corresponding figures for the same periods or as of the same date during the preceding fiscal year (except for the consolidated balance sheet, which shall set forth in comparative form the corresponding balance sheet as of the prior fiscal year end, and cash flow statements, which shall report only year to date periods). Such financial statements shall be certified by a Responsible Officer of the Borrower as presenting fairly the consolidated and consolidating financial position of the Borrower and its consolidated Subsidiaries as of the end of such fiscal quarter and the respective consolidated and consolidating results of their operations and their cash flows and stockholders' equity for such fiscal quarter, in conformity with GAAP, subject to normal and recurring year-end audit adjustments. (c) COMPLIANCE CERTIFICATES. Concurrently with the delivery of the financial statements referred to in Sections 6.01(a) and 6.01(b), the Borrower shall deliver, or cause to be delivered, to the Agent, with a copy for each Lender, a certificate in substantially the form set forth as Exhibit C, duly completed and signed by a Responsible Officer of the Borrower. (d) ACCOUNTANTS' CERTIFICATES. Concurrently with the Agent's receipt from the Borrower of each set of audited financial statements delivered pursuant to Section 6.01(a), the Borrower shall deliver, or cause to be delivered, to the Agent, with sufficient copies for each Lender, a report signed by the independent certified public accountants who opined on such financial statements and dated the date of such financial statements, stating in substance that they have reviewed this Agreement and the other Loan Documents and that in making the examination necessary for their opinion on such financial statements they did not become aware of any Event of Default or Potential Default pursuant to Sections 7.01, 7.02(e)(iv), 7.03(e) and 7.03(f) as of the end of such fiscal year, or, if they did become so aware, such certificate or report shall state the nature and period of existence thereof. (e) ANNUAL BUSINESS PLAN. Not later than January 31 of each year, the Borrower shall furnish to the Agent, with a copy for each Lender, a business plan for the Borrower and its Subsidiaries for the next five years, certified as such by a Responsible Officer of the Borrower. Such business plan shall be not less detailed than the 1997-2001 corporate plan heretofore delivered to the Agent and each Lender, and shall include or be accompanied by, among other matters reasonably requested from time to time, projected income, cash flows and summary balance sheet for the Borrower and its Subsidiaries, on both a consolidated and a separate unconsolidated basis for each year in such five year period. -25- 284 (f) QUARTERLY PLAN UPDATES. Concurrently with the delivery of the financial statements referred to in Section 6.01(b), the Borrower shall furnish to the Agent, with a copy for each Lender, a quarterly update to the most recent annual business plan, certified as such by a Responsible Officer of the Borrower. Such business plan shall be not less detailed than the third quarter update for 1996 heretofore delivered to the Agent and each Lender. (g) QUARTERLY FINANCIAL INFORMATION. Concurrently with the delivery of the financial statements referred to in Sections 6.01(a) and 6.01(b), the Borrower shall provide the Agent, with a copy for each Lender, summary financial information as to the Borrower and its consolidated Subsidiaries on a consolidated basis (and separate financial information for such Subsidiaries as the Agent may reasonably request) as of the end of the preceding month, all in reasonable detail and in any case including, among other matters reasonably requested by the Agent from time to time, financial information on a monthly and year-to-date basis, and separate line-items showing EBIT, depreciation and amortization, all certified by a Responsible Officer of the Borrower. (h) CERTAIN OTHER REPORTS AND INFORMATION. Promptly upon their becoming available to the Borrower, the Borrower shall deliver, or cause to be delivered, to the Agent, with a copy for each Lender, a copy of (i) all regular or special reports, registration statements and amendments to the foregoing which the Borrower or any Subsidiary of the Borrower shall file with the Securities and Exchange Commission (or any successor thereto) or any securities exchange, (ii) all reports, proxy statements, financial statements and other information distributed by the Borrower to its security holders or the financial community generally, and (iii) upon request by any Lender Party, all reports submitted by outside accountants in connection with any audit of the Borrower or any Subsidiary of the Borrower, including but not limited to all management letters commenting on the internal controls of the Borrower or any Subsidiary of the Borrower submitted in connection with any such audit. (i) FURTHER INFORMATION. The Borrower will promptly furnish, or cause to be furnished, to the Agent, with a copy for each Lender, such other information and in such form as the Agent or any Lender may reasonably request from time to time. (j) NOTICE OF CERTAIN EVENTS. Promptly upon becoming aware of any of the following, the Borrower shall give the Agent notice thereof, together with a written statement of a Responsible Officer of the Borrower setting forth the details thereof and any action with respect thereto taken or proposed to be taken by the Borrower, and the Agent shall promptly notify each Lender thereof: (i) Any Event of Default or Potential Default. (ii) Any material adverse change in the business, operations, condition (financial or otherwise) or prospects (exclusive, in the case of prospects, of political, social or economic events, changes or effects of general national or global scope) of the Borrower and its Subsidiaries taken as a whole. (iii) Any pending or threatened action, suit, proceeding or investigation by or before any Governmental Authority against or affecting the Borrower or any Subsidiary of the Borrower which, if adversely decided, individually or in the aggregate, would, or would be likely to, have a Material Adverse Effect. -26- 285 (iv) Any termination for default by the Borrower of any contract which would reasonably be likely to result in a direct loss of aggregate revenues in excess of $20,000,000 to which the Borrower or any Subsidiary of the Borrower is a party. (v) Any Pension-Related Event, other than (w) any Reportable Event described in subsection (i) of the definition of such term herein as to which the 30 day notice requirement to the PBGC is waived under applicable regulations, and (x) any Pension-Related Event described in subsection (d) or (f) of the definition thereof which involves a liability of the Borrower, any Subsidiary of the Borrower or any Controlled Group Member that has not been fully discharged (or a contingent or other potential liability that represents a material risk of becoming an actual liability) of less than $1,000,000 in the aggregate for all such Persons. Such notice shall be accompanied by the following: (y) a copy of any notice, request, return, petition or other document received by the Borrower, any Subsidiary of the Borrower or any Controlled Group Member from any Person, or which has been or is to be filed with or provided to any Person (including, without limitation, the Internal Revenue Service, the Department of Labor, the PBGC or any Plan participant, beneficiary, alternate payee or employer representative), in connection with such Pension-Related Event, and (z) in the case of any Pension-Related Event with respect to a Plan, the most recent Annual Report (5500 Series), with attachments thereto, and if such Plan is required by applicable Law to have an actuarial valuation report, the most recent actuarial valuation report, for such Plan. (k) VISITATION AND VERIFICATION GENERALLY. The Borrower shall permit such Persons as the Agent or any Lender may designate from time to time to visit and inspect any of the properties of the Borrower and any Subsidiary of the Borrower, to examine their respective books and records and take copies and extracts therefrom and to discuss their respective affairs with their respective directors, officers, employees and independent accountants at such times and as often as the Agent or any Lender may reasonably request, subject to mandatory national security regulations. The Borrower hereby authorizes such officers, employees and independent accountants to discuss with the Agent or any Lender the affairs of the Borrower and its Subsidiaries, subject to mandatory national security regulations. The Agent and the Lenders shall have the right to examine and verify accounts, inventory and other properties and liabilities of the Borrower and its Subsidiaries from time to time, and the Borrower shall cooperate, and shall cause each of its Subsidiaries to cooperate, with the Agent and the Lenders in such verification, subject to mandatory national security regulations. (l) DUTY TO MAINTAIN INDEPENDENT ACCOUNTANTS WITH SECURITY CLEARANCES; VERIFICATION OF CLASSIFIED CONTRACTS. The Borrower shall, and shall cause each such Subsidiary to, retain at all times an independent certified public accountant of national standing having personnel who at all times have security clearances sufficient to permit them to examine and verify all such classified contracts, accounts and other assets which, individually or in the aggregate, are material to the business, operations, condition (financial or otherwise) or prospects of the Borrower and its Subsidiaries taken as a whole. The Borrower shall, from time to time at the reasonable request of the Agent, cause such independent accountants to examine, verify and report to the Agent on such classified contracts, accounts and assets as the Agent may request, to the fullest extent permitted by mandatory national security regulations. (m) CHANGES IN CORPORATE STRUCTURE. Concurrently with the delivery of the financial statements referred to in Sections 6.01(a) and 6.01(b), the Borrower shall deliver to the Agent notice of any change in the matters set forth in Section 4.14 hereof, together with an amended and restated Schedule 4.14 which reflects such change. -27- 286 6.02. INSURANCE. The Borrower shall, and shall cause each of its Subsidiaries to, maintain with financially sound and reputable insurers insurance with respect to its properties and business and against such liabilities, casualties and contingencies and of such types as are reasonably satisfactory to the Agent from time to time, and in any case as is customary in the case of Persons engaged in the same or a similar business or having similar properties similarly situated. The Borrower shall, if so requested by the Agent, deliver to the Agent original or duplicate policies or certificates of such insurance and, as often as the Agent may reasonably request, a report of a reputable insurance broker, or an insurance company representative if an insurance broker is not involved, with respect to such insurance. 6.03. PAYMENT OF TAXES AND OTHER POTENTIAL CHARGES AND PRIORITY CLAIMS. The Borrower shall promptly notify the Agent in writing if it or any of its Subsidiaries learns of any proposed additional assessment or basis for any assessment for additional taxes (whether or not reserved against) which, if paid or incurred, would have a Material Adverse Effect. The Borrower shall, and shall cause each of its Subsidiaries to, pay and discharge, or cause to be paid and discharged, (a) on or prior to the date on which penalties attach thereto, all taxes, assessments and other governmental charges imposed upon it, or any of them, or any of its, or any of their, properties; (b) on or prior to the date when due, all lawful claims of materialmen, mechanics, carriers, warehousemen, landlords and other like Persons which, if unpaid, might result in the creation of a Lien upon any such property; and (c) on or prior to the date when due, all other lawful claims which, if unpaid, might result in the creation of a Lien upon any such property or which, if unpaid, might give rise to a claim entitled to priority over general creditors of the Borrower or such Subsidiary in any bankruptcy, insolvency, receivership or similar proceeding; provided, that, unless and until foreclosure, distraint, levy, sale or similar proceedings shall have been commenced, the Borrower or such Subsidiary need not pay or discharge, or cause the payment or discharge, of any such tax, assessment, charge or claim above so long as (x) the validity thereof is contested in good faith and by appropriate proceedings diligently conducted, and (y) such reserves or other appropriate provisions as may be required by GAAP shall have been made therefor. 6.04. PRESERVATION OF CORPORATE STATUS. The Borrower shall, and shall cause each of its Subsidiaries to, maintain its status as a Corporation duly organized, validly existing and, to the extent applicable, in good standing under the laws of its jurisdiction of organization, except for Permitted Mergers. The Borrower shall, and shall cause each of its Subsidiaries to, at all times be duly qualified to do business as a foreign Corporation and, to the extent applicable, in good standing in all jurisdictions in which the ownership of its properties or the nature of its business or both make such qualification necessary or advisable, except for matters that, individually or in the aggregate, do not, and would not be likely to, have a Material Adverse Effect. 6.05. GOVERNMENTAL APPROVALS AND FILINGS. The Borrower shall, and shall cause each of its Subsidiaries to, keep and maintain in full force and effect all Governmental Actions necessary or advisable in connection with execution and delivery of any Loan Document, consummation of the transactions herein or therein contemplated, performance of or compliance with the terms and conditions hereof or thereof, or to ensure the legality, validity, binding effect, enforceability or admissibility in evidence hereof or thereof. -28- 287 6.06. MAINTENANCE OF PROPERTIES, FRANCHISES, ETC. The Borrower shall, and shall cause each of its Subsidiaries to, (a) maintain or cause to be maintained in good repair, working order and condition the properties now or hereafter owned, leased or otherwise possessed by it and shall make or cause to be made all needful and proper repairs, renewals, replacements and improvements thereto so that the business carried on in connection therewith may be properly and advantageously conducted at all times, except where failure to do so does not, and would not be likely to, have a Material Adverse Effect, and (b) maintain and hold in full force and effect all franchises, licenses, permits, certificates, authorizations, qualification, accreditations and other rights, consents and approvals (whether issued, made or given by a Governmental Authority or otherwise), necessary to own and operate its properties and to carry on its business as presently conducted and as presently planned to be conducted, except where failure to do so does not, and would not be likely to, have a Material Adverse Effect. 6.07. AVOIDANCE OF OTHER CONFLICTS. The Borrower shall not, and shall not permit any of its Subsidiaries to, violate or conflict with, be in violation of or conflict with, or be or remain subject to any liability (contingent or other) on account of any violation or conflict with (a) any Law, (b) its certificate or articles of incorporation or by-laws (or other constituent documents), or (c) any agreement or instrument to which it or any of its Subsidiaries is a party or by which any of them or any of their respective properties may be subject or bound, except for matters of the type referred to in clauses (a) and (c) that could not, individually or in the aggregate, do not, and would not be likely to, have a Material Adverse Effect. 6.08. FINANCIAL ACCOUNTING PRACTICES. The Borrower shall, and shall cause each of its Subsidiaries to, make and keep books, records and accounts which, in reasonable detail, accurately and fairly reflect its transactions and dispositions of its assets, and maintain a system of internal accounting controls sufficient to provide reasonable assurances that (a) transactions are executed in accordance with management's general or specific authorization, (b) transactions are recorded as necessary (i) to permit preparation of financial statements in conformity with GAAP and (ii) to maintain accountability for assets, (c) access to assets is permitted only in accordance with management's general or specific authorization and (d) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. 6.09. USE OF PROCEEDS. The Borrower shall not use any Letters of Credit directly or indirectly for any unlawful purpose, in any manner inconsistent with Section 4.12, or inconsistent with any other provision of this Agreement or any other Loan Document. 6.10. CONTINUATION OF OR CHANGE IN BUSINESS. The Borrower shall, and shall cause each of its Subsidiaries to, engage in the businesses they have engaged in during the present and preceding fiscal years and the Borrower shall not, and shall not permit any of its Subsidiaries to, engage in any business other than the financial information services business, other information services businesses and matters incidental thereto; provided, that TIMCO may continue to conduct its business in substantially the manner in which it conducts such business as of the date hereof. Without limitation of the foregoing, the Borrower shall continue to operate as a holding company and shall not conduct any material business other than holding the capital stock of Subsidiaries and matters incidental thereto. -29- 288 6.11. PLANS AND MULTIEMPLOYER PLANS. (a) REQUIRED CONTRIBUTIONS. The Borrower shall, and shall cause each Subsidiary of the Borrower and Controlled Group Members to, make contributions to each Plan when due in accordance with the minimum funding requirements under ERISA and the Code applicable to such Plan and pay any required PBGC premiums as and when due for such Plan. (b) REQUIRED CONTRIBUTIONS TO MULTIEMPLOYER PLANS. The Borrower shall, and shall cause each Subsidiary of the Borrower and Controlled Group Members to, make contributions required to be made by it, or any of them, to each Multiemployer Plan, if any, when due in accordance with its, or any of their, obligations under any collective bargaining agreement related to such Multiemployer Plan or participation agreements applicable to such Multiemployer Plan, except those contributions the requirement of which are reasonably being contested by a Controlled Group Member provided that failure to make such contested contributions is not a violation of applicable Law and does not present a material risk of resulting in liability (contingent or other) to the Borrower or any Subsidiary of the Borrower. (c) FUNDING. The Borrower shall, and shall cause each of its Subsidiaries to, make any required contributions to any arrangements for providing retirement and/or death benefits when due, in accordance with the terms of the arrangement and/or any minimum funding requirements which are applicable to the arrangement from time to time. The Borrower shall not, nor shall it permit any of its Subsidiaries to, allow any arrangement for providing retirement and/or death benefits to become underfunded (as determined on the basis of reasonable actuarial assumptions) by an amount which, in the aggregate for all such arrangements, exceeds $10,000,000. 6.12. DISASTER RECOVERY PLAN. The Borrower shall cause each of Datastream International Limited, Disclosure Incorporated and ICV Limited to maintain in full force and effect at all times disaster recovery plans consistent with prudent practice for Persons engaged in the same or a similar business. 6.13. ANNUAL BANK MEETING. The Borrower shall hold meetings of the Lenders annually at the request of the Agent. 6.14. SEPARATE CORPORATE EXISTENCE. The Borrower acknowledges that the Lender Parties are entering into the transactions contemplated by this Agreement and the other Loan Documents in reliance upon the identity of the Subsidiaries of the Borrower as legal entities separate from the Borrower. Accordingly, the Borrower shall take, and shall cause its Subsidiaries to take, all reasonable steps to continue the identities of its Subsidiaries as separate legal entities, and to make it apparent to third Persons that its Subsidiaries are entities with assets and liabilities distinct from those of the Borrower. Without limiting the generality of the foregoing, the Borrower shall take such actions as shall be required in order that: (a) For each Subsidiary of the Borrower in which the Borrower directly owns, beneficially or of record, Shares of Capital Stock, at least one director or officer of the Borrower shall be a person who is not a director or officer of such Subsidiary. (b) The books and records of each Subsidiary of the Borrower shall be maintained separately from those of the Borrower and each of its other Subsidiaries. -30- 289 (c) The assets of each Subsidiary of the Borrower will be maintained in a manner that facilitates their identification and segregation from those of the Borrower and its other Subsidiaries. (d) The Borrower and each Subsidiary of the Borrower shall strictly observe corporate formalities. The Borrower and each of its Subsidiaries will conduct their respective businesses in their own respective names. The business and affairs of the Borrower and each Subsidiary shall be managed by or under the direction of the board of directors of such Person. (e) Funds or other assets of Subsidiaries of the Borrower will not be commingled with those of the Borrower and its other Subsidiaries (it being understood that such restriction shall not be interpreted to forbid intercompany loans and Advances that have been properly documented and accounted for on the books and records of each relevant entity, made in compliance with corporate formalities, and otherwise made in compliance with this Agreement and the other Loan Documents). (f) The operating expenses of the Borrower and each Subsidiary of the Borrower will be paid by such Person. To the extent, if any, that the Borrower and any of its Subsidiaries share items of expenses, such expenses will be allocated to the extent practical on the basis of actual use or the value of services rendered, and otherwise on a basis reasonably related to actual use or the value of services rendered, and each such Person shall pay its allocated share of such expenses on a current basis. To the extent, if any, that the Borrower and any of its Subsidiaries provides services to one another, the provider shall be compensated by the recipient on a current basis at fair and reasonable rates. To the extent, if any, that any consolidated or combined tax return is filed including any of the Borrower or its Subsidiaries, each such Person shall pay or be paid, as the case may be, on a current basis an equitable share of the consolidated tax payment or refund associated therewith. (g) Annual financial statements of the Borrower which are consolidated to include its Subsidiaries will contain notes clearly stating that each such Subsidiary is a corporate or similar entity separate from the Borrower and its other Subsidiaries, and that the stock of each direct Subsidiary of the Borrower has been pledged to secure the Obligations. 6.15. ADDITIONAL SECURITY. (a) GENERAL. Promptly upon the request of the Agent from time to time, the Borrower shall as promptly as practicable (and in any case within 30 days after such request, or such longer period as the Agent may specify in writing) further secure the Obligations by granting to the Collateral Agent a valid and perfected Lien, prior to all other Liens except Permitted Liens, on such of its properties from time to time as the Agent may designate (except for property subject to a Permitted Lien as to which the Borrower is required to obtain the consent of the holder of such Permitted Lien before granting such a Lien to the Collateral Agent and as to which the Borrower is unable, using reasonable efforts, to obtain such consent). In connection therewith, the Borrower shall (i) execute and deliver to the Agent such mortgages, security agreements and other agreements and instruments, and do such other acts and things as shall be necessary or, in the judgment of the Agent, appropriate to grant to the Collateral Agent a valid and perfected Lien on such property, prior to all other Liens except Permitted Liens, and (ii) procure and deliver to the Agent such other items (including but not limited to lien searches, title insurance policies, surveys, environmental audits, insurance endorsements and opinions of counsel), and do such other acts and things, as the Agent may request in connection with the foregoing. All of the foregoing shall be in form and substance satisfactory to the Agent. From time to time as requested by -31- 290 the Agent, the Borrower shall use reasonable efforts to (w) obtain the consent of any Person whose consent is necessary or advisable to the creation, perfection or maintenance of any such Lien, including but not limited to that of any lessor whose consent may be required in connection with any such Lien on any leasehold interest, and to obtain nondisturbance and like agreements from mortgagees and other holders of superior rights in the property subject to any such leasehold interest, (x) obtain waivers of Liens from such landlords and mortgagees and from other Persons described in Section 6.03(b) hereof, (y) with respect to securities accounts, commodity accounts, deposit accounts or similar interests, obtain consent agreements from each securities intermediary, commodity intermediary, depository bank or similar person, satisfactory in form and substance to the Agent, which shall include provisions giving the Collateral Agent sole dominion and control over such interest upon the giving of notice by the Collateral Agent (it being understood that the related security agreement shall provide that the Collateral Agent may exercise such sole dominion and control upon the occurrence and during the continuance of an Event of Default), and (z) do such other acts and things as the Agent may deem appropriate to enhance, preserve or protect the security for the Obligations. (b) NOTICE OF CERTAIN REALTY TRANSACTIONS. The Borrower shall promptly give notice to the Agent of any acquisition by the Borrower of any interest or interests in real property (fee, leasehold or otherwise) or fixtures having a fair market value, individually or in the aggregate, in excess of $5,000,000 (except for leasehold interests having a term, including all options exercisable by the lessee, less than 5 years). 6.16. INTEREST RATE PROTECTION. (a) REQUIRED HEDGE. The Borrower shall, promptly (and in any event not later than 60 days) after the first date on or after the Closing Date on which the three-month Euro-Rate (as determined by the Agent) is at least 8.00% on at least ten of the 30 days immediately preceding such date, enter into an Interest Rate Hedging Agreement having an effective rate and other terms and conditions satisfactory to the Agent, for notional principal amounts and tenors sufficient to hedge at least 65% of the scheduled outstanding principal amount of the Indebtedness under the Term Loan Agreement for the period from the effective date of such Interest Rate Hedging Agreement through the fifth anniversary thereof (or, if earlier, the Term Loan Maturity Date). The Borrower shall thereafter select interest rate options under the Term Loan Agreement that match, in time and amount, as closely as may be the terms of the rate hedge represented by such Interest Rate Hedging Agreement. (b) SECURING THE REQUIRED HEDGE. If the Borrower so requests, the Agent shall consent to a Swap Party Supplement to the Collateral Agency Agreement whereby the Interest Rate Hedging Agreement referred to in Section 6.16(a) hereof shall be deemed a Swap Agreement entitled to the benefits of the Collateral Agency Agreement, but only if the following conditions are met: (i) the counterparty to such Interest Rate Hedging Agreement is a Lender, (ii) the "Swap Shared Security Cap" set forth in such Swap Party Supplement is, in the good faith judgment of the Agent, not more than 110% of the credit equivalent exposure represented by such Swap Agreement (calculated in accordance with the Agent's ordinary methods), and (iii) the Borrower provides the Agent with such contemporaneous bringdown Lien searches as the Agent may request, the results of which shall be satisfactory to the Agent. (c) EXISTING RATE HEDGES, ETC. To the extent otherwise consistent with this Agreement and the other Loan Documents, the Borrower may enter into Interest Rate Hedging Agreements in advance of the date on which it is required to do so under Section 6.16(a), and to the extent that such Interest Rate Hedging Agreements satisfy the requirements of Sections 6.16(a) and 6.16(b) the Agent may enter into a Swap Party Supplement to the Collateral Agency Agreement with respect to such -32- 291 Interest Rate Hedging Agreements. In the event that the Borrower becomes obligated to enter into Interest Rate Hedging Agreements under Section 6.16(a), any then-existing Interest Rate Hedging Agreements to which Borrower is party and which otherwise satisfy the requirements of Section 6.16(a) shall be counted toward satisfaction of the Borrower's obligations under Section 6.16(a), to the extent of the notional amounts and tenors of such then-existing Interest Rate Hedging Agreements. Nothing in Section 6.16(b) shall be construed to forbid the Agent from consenting to a Swap Party Supplement relating to Interest Rate Hedging Agreements if the conditions set forth in Section 6.16(b) are satisfied, even if such Interest Rate Hedging Agreements in the aggregate exceed in amount or time the minimum requirements set forth in Section 6.16(a). ARTICLE VII NEGATIVE COVENANTS The Borrower hereby covenants to each Lender Party as follows: 7.01. FINANCIAL COVENANTS. (a) CONSOLIDATED NET WORTH (ADJUSTED). As of the end of each fiscal quarter of the Borrower ending on or after December 31, 1996, Consolidated Net Worth (Adjusted) shall not be less than the applicable amount specified below:
Consolidated Net Worth (Adjusted) From and including To and including shall not be less than December 31, 1996 December 30, 1997 $425,000,000 December 31, 1997 December 30, 1998 $450,000,000 December 31, 1998 December 30, 1999 $475,000,000 December 31, 1999 December 30, 2000 $500,000,000 December 31, 2000 December 30, 2001 $525,000,000 Thereafter $550,000,000
(b) CONSOLIDATED FIXED CHARGE COVERAGE RATIO. As of the end of each fiscal quarter of the Borrower ending on or after December 31, 1996, the Consolidated Fixed Charge Coverage Ratio for the period of four consecutive fiscal quarters ending on the last day of such fiscal quarter, considered as a single accounting period, shall not be less than the applicable amount set forth below. Fiscal quarter ending on Consolidated Fixed Charge Coverage Ratio a date in the following for the four fiscal quarters ending on period (inclusive) such date shall not be less than - - ------------------ -------------------------------- December 31, 1996 through December 31, 1997 1.75 January 1, 1998 through December 31, 1998 2.00 January 1, 1999 through December 31, 1999 2.25 Thereafter 2.50 -33- 292 (c) CONSOLIDATED FUNDED DEBT RATIO (ADJUSTED). As of the end of each fiscal quarter of the Borrower ending on or after December 31, 1996, the Consolidated Funded Debt Ratio (Adjusted) for the period of four consecutive fiscal quarters ending on the last day of such fiscal quarter, considered as a single accounting period, shall not be greater than the applicable amount set forth below. Fiscal quarter ending on Consolidated Funded Debt Ratio (Adjusted) a date in the following for the four fiscal quarters ending on period (inclusive) such date shall not be greater than - - ------------------------- ----------------------------------------- December 31, 1996 through December 31, 1997 5.50 December 31, 1997 through December 30, 1998 5.00 December 31, 1998 through December 30, 1999 4.00 Thereafter 3.00 7.02. LIENS. The Borrower shall not, and shall not permit any Subsidiary of the Borrower to, at any time create, incur, assume or permit to exist any Lien on any of its property (now owned or hereafter acquired), or agree, become or remain liable (contingently or otherwise) to do any of the foregoing, except for the following (referred to herein as "Permitted Liens"): (a) Liens pursuant to the Shared Security Documents in favor of the Collateral Agent for the benefit of the Secured Parties to secure the Obligations; (b) Liens arising from taxes, assessments, charges or claims described in Sections 6.03(a) and 6.03(b), to the extent permitted to remain unpaid under such Section 6.03; (c) Deposits or pledges of cash or securities in the ordinary course of business to secure (i) workmen's compensation, unemployment insurance or other social security obligations, (ii) performance of bids, tenders, trade contracts (other than for payment of money) or leases, (iii) stay, surety or appeal bonds, or (iv) other obligations of a like nature incurred in the ordinary course of business; (d) Judgment liens fully bonded pending appeal; (e) Liens by the Borrower or a Subsidiary of the Borrower on property securing all or part of the purchase price thereof and Liens (whether or not assumed) existing on property at the time of purchase thereof by the Borrower or a Subsidiary of the Borrower, provided that: (i) such Lien is created before or substantially simultaneously with the purchase of such property in the ordinary course of business by the Borrower or such Subsidiary (or is a Lien securing successor obligations incurred to extend or refinance predecessor obligations allowed under this Section 7.02(e), provided that in each case the successor obligation is an obligation of the same Person subject to the predecessor obligation, is not greater than (and is not otherwise on terms less advantageous than) the predecessor obligation, and the Lien securing the successor obligation does not extend to any property other than that subject to the Lien securing the predecessor obligation); -34- 293 (ii) such Lien is confined solely to the property so purchased, improvements thereto and proceeds thereof; (iii) the aggregate amount secured by all such Liens on any particular property at the time purchased by the Borrower or such Subsidiary, as the case may be, shall not exceed the lesser of the purchase price of such property or the fair market value of such property at the time of purchase thereof ("purchase price" for this purpose including the amount secured by each such Lien thereon whether or not assumed); and (iv) the obligation secured by such Lien is Indebtedness permitted under Section 7.03(e) hereof; (f) Liens in favor of the United States Government which arise in the ordinary course of business resulting from progress payments or partial payments under United States Government contracts or subcontracts thereunder; (g) Rights arising or reserved to the lessor under any Capitalized Lease Obligations permitted by Section 7.03(e) hereof; (h) Zoning restrictions, easements, minor restrictions on the use of real property, minor irregularities in title thereto and other minor Liens that do not secure the payment of money or the performance of an obligation and that do not in the aggregate materially detract from the value of a property or asset to, or materially impair its use in the business of, the Borrower or such Subsidiary; (i) Liens existing on the Closing Date and listed on Schedule 7.02 hereof (but not any extension, renewal or replacement Liens); and (j) Liens on property of TIMCO to secure payment of reimbursement obligations of TIMCO with respect to the TIMCO Bonds Letter of Credit, and Liens on property of TIMCO securing Indebtedness of TIMCO constituting a refinancing of the TIMCO Bonds and the TIMCO Lease permitted by Section 7.03(j) hereof. Notwithstanding the foregoing, "Permitted Lien" in respect of the Borrower or any Subsidiary of the Borrower shall in no event include (x) any Lien imposed by, or required to be granted pursuant to, ERISA, the Code or any Environmental Law, (y) except as provided in Section 7.02(a) hereof, any Lien on the Shared Collateral Account or any other account (custodial, deposit or other) maintained by or with the Collateral Agent pursuant to the Shared Security Documents, or any other investment property or deposit account (as such terms are defined in the Uniform Commercial Code), or (z) except as provided in Section 7.02(a) hereof, any Lien on Shares of Capital Stock of, or obligations owed by, a Subsidiary of the Borrower. 7.03. INDEBTEDNESS. The Borrower shall not, and shall not permit any Subsidiary of the Borrower to, at any time create, incur, assume or permit to exist any Indebtedness, or agree, become or remain liable (contingently or otherwise) to do any of the foregoing, except: (a) Indebtedness of the Borrower under the Revolving Credit Agreement, in aggregate principal amount not to exceed $75,000,000 (including any extension, renewal or refinancing thereof made in compliance with Section 7.11(c) hereof); -35- 294 (b) Indebtedness of the Borrower under the Term Loan Agreement, in aggregate principal amount not to exceed $225,000,000 (but not any extensions, renewals or refinancings of any thereof); (c) Indebtedness of the Borrower or any of its Subsidiaries not exceeding $8,250,000 in principal amount, issued in connection with the acquisition by the Borrower or a Subsidiary of all of the Shares of Capital Stock of ICV (such Indebtedness being referred to herein as the "ICV Notes"); and Indebtedness of the Borrower in favor of the Lender Parties pursuant to this Agreement and the other Loan Documents; (d) Indebtedness of the Borrower under the Senior Notes, in aggregate principal amount not to exceed $112,000,000 (but not any extensions, renewals or refinancings of any thereof); (e) Indebtedness constituting Capitalized Lease Obligations of the Borrower and its Subsidiaries incurred in the ordinary course of business from time to time, and Indebtedness of the Borrower and its Subsidiaries secured by Liens described in Section 7.02(e) on property used in the ordinary course of business of the Borrower or such Subsidiary from time to time; provided, that the aggregate amount of Indebtedness described in this Section 7.03(e) shall not exceed $20,000,000 at any time; (f) Other Indebtedness of the Borrower and its Subsidiaries not exceeding $30,000,000 aggregate principal amount at any time outstanding; (g) Current accounts payable of the Borrower or any of its Subsidiaries on normal trade terms to trade creditors arising out of purchases of goods or services in the ordinary course of business; (h) Indebtedness of the Borrower pursuant to any Interest Rate Hedge Agreement required to be entered into pursuant to Section 6.16(a) hereof; and Indebtedness of the Borrower or any of its Subsidiaries under any other interest rate or currency swap, cap, floor, collar, future, forward or option agreement, or similar interest rate or currency protection agreement, entered into for the purpose of hedging and not for purposes of speculation (and not structured to contain an embedded loan); (i) Indebtedness constituting intercompany loans and Advances permitted by Sections 7.05(d), 7.05(e), 7.05(h) and 7.05(i) hereof; (j) Indebtedness of TIMCO constituting a letter of credit issued for its account not exceeding $12,600,000 in stated amount, which letter of credit effectively secures the TIMCO Bonds; any extension, renewal or refinancing of such letter of credit, provided, however, that the stated amount thereof is not increased and TIMCO remains the account party with respect thereto (such letter of credit, together with any such extension, renewal or refinancing letter of credit, being referred to herein as the "TIMCO Bonds Letter of Credit"); and any Indebtedness of TIMCO which amends, renews or refinances (collectively, "refinances") the TIMCO Bonds, the TIMCO Lease and the TIMCO Bonds Letter of Credit, provided, however, that after giving effect to such refinancing, (i) the principal amount of Indebtedness is not increased, (ii) neither the stated maturity nor the average life of the Indebtedness is reduced, and (iii) TIMCO remains the obligor on such refinancing Indebtedness; and -36- 295 (k) Indebtedness for borrowed money of Primark Economics or any of its Subsidiaries not exceeding $6,000,000 in aggregate principal amount at any time outstanding. 7.04. GUARANTIES, INDEMNITIES, ETC. The Borrower shall not, and shall not permit any Subsidiary of the Borrower to, be or become subject to or bound by any Guaranty Equivalent, or agree, become or remain liable (contingently or otherwise) to do any of the foregoing, except: (a) Contingent liabilities arising from the endorsement of negotiable or other instruments for deposit or collection or similar transactions in the ordinary course of business; (b) Indemnities by the Borrower or a Subsidiary of the liabilities of its directors, officers and employees in their capacities as such as permitted by Law; (c) Guaranty Equivalents existing on the Closing Date and listed in Schedule 7.04 hereof (but not extensions, renewals or refinancings thereof or of any associated Assured Obligation); provided, that this Section 7.04(c) shall not apply to any Guaranty Equivalent as to which the Deemed Obligor is, on the Closing Date, a Subsidiary of the Borrower if such Subsidiary thereafter ceases to be a Subsidiary of the Borrower; (d) Guaranty Equivalents by the Borrower or a Subsidiary constituting usual and customary indemnities with respect to liabilities (other than Indebtedness) in connection with a disposition of stock or assets by the Borrower or such Subsidiary; (e) Other Guaranty Equivalents by the Borrower or a Subsidiary of the Borrower from time to time of obligations of a Substantially Owned Subsidiary of the Borrower, provided that the Deemed Obligor in respect of such Guaranty Equivalent is a Substantially Owned Subsidiary of the Deemed Guarantor; (f) Other Guaranty Equivalents by a Borrower or a Subsidiary of the Borrower from time to time, provided that the sum of (i) the maximum aggregate potential obligation of the Borrower or any Subsidiary of the Borrower under Guaranty Equivalents described in this Section 7.04(f), plus (ii) the aggregate amount of all payments made by the Borrower and its Subsidiaries after the date hereof under Guaranty Equivalents described in this Section 7.04(f), shall not exceed $2,000,000; and (g) Obligations of a Subsidiary of the Borrower as general partner of a partnership permitted under Sections 7.05(g) or 7.05(j). 7.05. LOANS, ADVANCES AND INVESTMENTS. The Borrower shall not, and shall not permit any Subsidiary of the Borrower to, at any time make or permit to exist or remain outstanding any loan or Advance to, or purchase, acquire or own (beneficially or of record) any Shares of Capital Stock of, any stock, bonds, notes or securities of, or any partnership interest (whether general or limited), membership interest or beneficial interest in, or any other debt or equity interest in, or make any capital contribution to or other investment in, any other Person, or agree, become or remain liable (contingently or otherwise) to do any of the foregoing, except: (a) Receivables owing to the Borrower or any Subsidiary of the Borrower arising from performance of services and sales of goods under usual and customary terms in the ordinary course of business; -37- 296 (b) Loans and Advances extended by the Borrower or any Subsidiary of the Borrower to contractors or suppliers (excluding contractors or suppliers that are Affiliates of the Borrower) under usual and customary terms in the ordinary course of business and in amount at any one time outstanding not exceeding $1,000,000 (or the equivalent thereof in one or more foreign currencies) in the aggregate; (c) Advances to officers and employees of the Borrower and its Subsidiaries in the ordinary course of business, in amounts at any time outstanding not exceeding $1,000,000 (or the equivalent thereof in one or more foreign currencies) to any one officer or employee and $2,000,000 (or the equivalent thereof in one or more foreign currencies) in the aggregate; provided, however, that for purposes of this Section 7.05(c) only, the outstanding amount of Advances shall not be deemed to include amounts secured by perfected liens on shares of the publicly-traded common stock of the Borrower, to the extent of the market value of such common stock (as determined at least quarterly, based on publicly-available quotations); (d) Loans and Advances by a Subsidiary of the Borrower to the Borrower; (e) Ownership of Shares of Capital Stock of, and capital contributions, loans and Advances to, Corporations that are Wholly Owned Subsidiaries of the Borrower (other than a Broker-Dealer); (f) (i) Ownership of Shares of Capital Stock of a Corporation that is a Wholly Owned Subsidiary of the Borrower that is a Broker-Dealer, as owned on the Closing Date, and (ii) capital contributions by the Borrower or its Subsidiaries from time to time to such Subsidiary, so long as such Subsidiary does not at the time of such capital contribution, or immediately thereafter and after giving effect thereto, have net capital (calculated in accordance with regulatory standards) in excess of 150% of the minimum capital required by Law; (g) (i) Ownership of general partnership interests and other equity interests in the Worldscope Entities representing an 80% or greater interest in the capital, profits and losses of each of the Worldscope Entities, as owned on the Closing Date, and (ii) capital contributions to and acquisition of additional equity interests in the Worldscope Entities from time to time after the Closing Date, and loans and Advances to the Worldscope Entities from time to time; (h) Acquisition and ownership of Shares of Capital Stock of Corporations that are Subsidiaries of the Borrower other than Wholly Owned Subsidiaries of the Borrower, and capital contributions, loans and Advances to Subsidiaries of the Borrower other than Wholly Owned Subsidiaries of the Borrower, provided, that the aggregate amount of all such acquisitions and capital contributions made under this Section 7.05(h) after the Closing Date, plus the aggregate outstanding principal amount of all such loans and Advances made under this Section 7.05(h), shall not at any time exceed $10,000,000; (i) Acquisition and ownership by the Borrower or its Subsidiaries of equity interests in Primark Economics representing a 20% or greater interest in the capital, profits and losses of Primark Economics, and capital contributions, convertible debt and demand loans by the Borrower or its Subsidiaries to Primark Economics from time to time; provided, that (i) the sum of the aggregate amount of all consideration paid for such equity interests and convertible debt plus the aggregate amount of all such capital contributions (in each case whether before or after the Closing Date), plus the aggregate outstanding principal amount of all such demand loans, shall not at any time exceed $5,000,000, and (ii) no such acquisitions, capital contributions or -38- 297 loans may be made unless the Borrower continues to own (directly or indirectly) at least a 20% interest (and, assuming full conversion of convertible loans due to the Borrower or its Subsidiaries, a 51% or greater interest) in the capital, profits and losses of Primark Economics; (j) Partnerships and joint ventures of which all partners, participants and other Persons having ownership interests therein are Wholly Owned Subsidiaries of the Borrower; (k) Other loans, Advances and investments, not to exceed $3,000,000 in the aggregate; and (l) Cash Equivalent Investments. 7.06. DIVIDENDS AND RELATED DISTRIBUTIONS. The Borrower shall not, and shall not permit any Subsidiary to, declare or make any Stock Payment, or agree, become or remain liable (contingently or otherwise) to do any of the foregoing, except as follows: (a) The Borrower may from time to time repurchase for cash shares of its common stock of a series publicly traded, subject to the following conditions: (i) Repurchases under this Section 7.06(a) shall not exceed $25,000,000 from and after the Closing Date; (ii) No Event of Default or Potential Default shall exist on the date of such repurchase, or immediately thereafter and after giving effect to such repurchase; (iii) The Borrower would have been in compliance with Sections 7.01(a) and 7.01(c) on the last day of the fiscal quarter ending most recently before such repurchase, after giving effect on a pro forma basis to such repurchase and to any incurrence of Indebtedness after such day, as if such repurchase and incurrence had occurred on such day; and (iv) The Agent shall receive, with a copy for each Lender, not later than the Business Day after the date such repurchase is made, a certificate signed by a Responsible Officer of the Borrower, dated such repurchase date, describing such dividend, certifying that such repurchase is in compliance with the provisions of this Section 7.06(a), and including a statement in reasonable detail of the information and calculations necessary to establish compliance with this Section 7.06(a); (b) A Subsidiary of the Borrower may declare and pay dividends or other distributions with respect to its Shares of Capital Stock, provided, that such dividend or other distribution is made on a pro rata basis, consistent with the ownership interests in such Shares of Capital Stock, to the owners of such shares; and (c) The Borrower may make Stock Payments if such Stock Payment is paid solely in Shares of Capital Stock (or warrants, options or rights therefor) of the Borrower. The Borrower shall not declare any dividend payable later than 60 days after declaration, and the Borrower shall not permit any Subsidiary to declare any dividend payable later than 15 days after declaration. -39- 298 7.07. SALE-LEASEBACKS. The Borrower shall not, and shall not permit any Subsidiary to, at any time enter into or permit to remain in effect any transaction to which the Borrower or such Subsidiary is a party involving the sale, transfer or other disposition by the Borrower or any Subsidiary of any property (now owned or hereafter acquired), with a view directly or indirectly to the leasing back of any part of the same property or any other property used for the same or a similar purpose or purposes, or agree, become or remain liable (contingently or otherwise) to do any of the foregoing, except for transactions existing on the date hereof and listed in Schedule 7.07 hereof (but not extensions, renewals or refinancings thereof). 7.08. MERGERS, ETC. The Borrower shall not, and shall not permit any Subsidiary of the Borrower to, directly or indirectly, (w) merge with or into or consolidate with any other Person, or (x) liquidate, Wind-Up, dissolve or divide, (y) acquire all or any substantial portion of the properties of any going concern or going line of business (whether or not constituting a distinct legal entity), or (z) acquire all or any substantial portion of the properties of any other Person, or all or any substantial portion of the Shares of Capital Stock of any other Person which is organized as a Corporation, or all or any substantial portion of any equity interest in any other Person which is not organized as a Corporation, or agree, become or remain liable (contingently or otherwise) to do any of the foregoing, except for the following (referred to herein as "Permitted Mergers"): (a) A Subsidiary of the Borrower may merge with or into or consolidate with, or acquire all or any substantial portion of the properties of, or liquidate or dissolve into, any other Subsidiary of the Borrower, if the acquiring, surviving or new Corporation shall be a Wholly Owned Subsidiary of the Borrower; and (b) The Borrower, or a Subsidiary of the Borrower, may make acquisitions of the types referred to in the foregoing clauses (y) and (z) of properties of Persons other than a Subsidiary of the Borrower, consistent with the other provisions of this Agreement and the other Loan Documents, provided that the aggregate Adjusted Acquisition Consideration in connection with all such acquisitions made after the Closing Date (and specifically excluding the acquisition of WEFA, if made on or before the Closing Date) shall not exceed the sum of $75,000,000 plus the amount, if any, of aggregate cash proceeds (net of underwriting discounts, fees and other transaction costs) received by the Borrower after the Closing Date from issuance of Shares of Capital Stock of the Borrower (or options or warrants therefor). 7.09. DISPOSITIONS OF PROPERTIES. The Borrower shall not, and shall not permit any Subsidiary to, sell, convey, assign, lease, transfer, abandon or otherwise dispose of, voluntarily or involuntarily, directly or indirectly, any of its properties, now existing or hereafter acquired, or agree, become or remain liable (contingently or otherwise) to do any of the foregoing, except: (a) Sales of inventory, licenses (as licensor) of software or other intellectual property, all in the ordinary course of business; (b) Disposition of equipment and other operating assets which are obsolete or no longer useful in the business of the Borrower or such Subsidiary, as the case may be; (c) Lease or sublease of unoccupied office space; (d) Dispositions in Permitted Mergers, and other dispositions between Wholly Owned Subsidiaries of the Borrower; -40- 299 (e) Disposition outside the ordinary course of business of all (but not less than all) of the Shares of Capital Stock of TIMCO, or substantially all the assets of TIMCO (but not less than substantially all of such assets), subject to the following conditions: (i) any such disposition of property is for not less than the Fair Market Value of the property disposed of (as determined in good faith by the Board of Directors of the transferor, whose determination shall be evidenced by a written resolution of such Board), and the consideration received by the Borrower or the relevant Subsidiary in respect of such disposition consists entirely of cash or Cash Equivalent Investments; and (ii) in the case of disposition of Shares of Capital Stock of, or assets of, TIMCO, TIMCO shall be conducting substantially the business conducted by it on the Closing Date, and shall not be conducting any different or additional business or have any material assets in addition to those it had on the Closing Date; and (f) Other dispositions of property from time to time for not less than its Fair Market Value, provided that dispositions under this Section 7.09(f) shall not exceed $5,000,000 in the aggregate in any fiscal year. Without limitation of the foregoing, it is understood that the following are dispositions of property subject to this Section 7.09: any disposition of accounts, chattel paper or general intangibles, with or without recourse; any disposition of any leasehold interest; and any disposition of any Shares of Capital Stock in or Indebtedness of any Subsidiary. The Borrower shall not, and shall not permit any Subsidiary to sell, convey, assign, transfer or otherwise dispose of, voluntarily or involuntarily, any of its accounts, chattel paper, general intangibles or other financial assets with or without recourse, in any factoring, structured financing, or other transaction having the practical effect, directly or indirectly, of a financing, whether or not such transaction is in the form of a "true sale" of such financial assets by the Borrower or such Subsidiary. 7.10. DEALINGS WITH AFFILIATES. The Borrower shall not, and shall not permit any Subsidiary of the Borrower to, enter into or carry out any transaction with (including, without limitation, purchase or lease property or services from, sell or lease property or services to, loan or advance to, or enter into, permit to remain in existence or amend any contract, agreement or arrangement with) any Affiliate of the Borrower, directly or indirectly, or agree, become or remain liable (contingently or otherwise) to do any of the foregoing, except: (a) Transactions between (i) on the one hand, any Affiliate of the Borrower, and (ii) on the other hand, the Borrower or any of its Subsidiaries, in good faith and on fair and reasonable terms; and (b) Compensation of directors, officers, employees and consultants of the Borrower and its Subsidiaries for services rendered in such capacity in good faith and on fair and reasonable terms, which terms (in the case of compensation under employment contracts entered into after the Closing Date will be approved by a majority of the board of directors of such Borrower or Subsidiary (including a majority of the directors having no direct or indirect interest in such transaction). 7.11. LIMITATIONS ON MODIFICATION OF CERTAIN AGREEMENTS AND INSTRUMENTS. -41- 300 (a) SENIOR NOTES. The Borrower shall not amend, modify or supplement the terms or provisions contained in, or applicable to, the Senior Notes, the Senior Note Indenture, or any agreement or instrument evidencing or applicable to any of the foregoing. (b) REVOLVING CREDIT AGREEMENT. The Borrower shall not amend, modify, supplement, renew or refinance the Revolving Credit Agreement or its obligations thereunder, in any way that would change its nature as a revolving credit facility, increase or reduce the principal amount available to be borrowed thereunder, or cause the Revolving Credit Maturity Date or the final date on which loans may be borrowed thereunder by the Borrower to occur sooner than the relevant dates applicable under the Revolving Credit Agreement as constituted on the Closing Date. In the event that the Agent hereunder is not also the "Agent" under the Revolving Credit Agreement, the Borrower shall promptly (and in any event within five days) give the Agent, with a copy for each Lender, a copy of any amendment, modification or supplement to, or renewal or refinancing of, the Revolving Credit Agreement. (c) TERM LOAN AGREEMENT. The Borrower shall not amend, modify or supplement the Term Loan Agreement or its obligations thereunder, in any way that would (i) increase the principal amount thereof, or require payments on account of principal to be made (by way of scheduled amortization, mandatory prepayment or otherwise) earlier or in greater amount than is required under the terms of the Term Loan Agreement as constituted on the Closing Date, (ii) increase the rate or shorten the date for payment of interest thereon, or (iii) require payment of any fee or other amount not provided for under the Term Loan Agreement as constituted on the Closing Date. In the event that the Agent hereunder is not also the "Agent" under the Term Loan Agreement, the Borrower shall promptly (and in any event within five days) give the Agent, with a copy for each Lender, a copy of any amendment, modification or supplement to the Term Loan Agreement. (d) [Reserved] (e) ICV NOTES. The Borrower shall not amend, modify or supplement the terms and provisions contained in, or applicable to, the ICV Notes. 7.12. LIMITATION ON PAYMENTS ON CERTAIN OBLIGATIONS. The Borrower shall not, and shall not permit any Subsidiary to, directly or indirectly, pay, prepay, purchase, redeem, retire, defease or acquire, or otherwise make any payment (on account of principal, interest, premium or otherwise) of, any obligation under or evidenced by the Senior Notes, except that the Borrower may (x) pay principal and interest on the Senior Notes as and when expressly required to do so by the mandatory terms of the Senior Notes, and (y) purchase Senior Notes as and when expressly required to do so by the mandatory terms of Sections 4.12 and 4.13 of the Senior Note Indenture (it being understood that the foregoing may nevertheless give rise to an Event of Default). 7.13. LIMITATION ON OTHER RESTRICTIONS ON LIENS, DIVIDEND RESTRICTIONS ON SUBSIDIARIES, ETC. The Borrower shall not, and shall not permit any Subsidiary to, (x) enter into, become or remain subject to any agreement or instrument to which the Borrower or such Subsidiary is a party or by which any of them or any of their respective properties (now owned or hereafter acquired) may be subject or bound that would (i) prohibit the grant of any Lien upon any of its properties (now owned or hereafter acquired), or (ii) restrict or prohibit the transfer or disposition of any of its properties (now owned or hereafter acquired), or require it to dispose of or apply the proceeds of any such disposition in a specified manner, or -42- 301 (y) be or become subject to any restriction of any nature (whether arising by operation of Law, by agreement, by its certificate or articles of incorporation, by-laws or other constituent documents, or otherwise) on the right of the Borrower or such Subsidiary from time to time (i) in the case of a Subsidiary, to declare and pay Stock Payments with respect to Shares of Capital Stock owned by the Borrower or any Subsidiary of the Borrower, (ii) in the case of the Borrower or any Subsidiary of the Borrower, to pay any obligations from time to time owed to the Borrower or any Subsidiary of the Borrower, or (iii) in the case of the Borrower or any Subsidiary of the Borrower, make loans or advances to the Borrower or any Subsidiary of the Borrower, except: (a) the Credit Facilities; (b) the Senior Notes and the Senior Note Indenture; (c) with respect to the foregoing clause (x), non-assignment provisions of any executory contract or software or programs or of any lease by the Borrower or such Subsidiary as lessee; (d) with respect to the foregoing clause (x), restrictions on property subject to a Permitted Lien in favor of the holder of such Permitted Lien; (e) restrictions with respect to TIMCO imposed pursuant to an agreement entered into for sale or disposition (which sale or disposition is not in violation of this Agreement or any other Loan Document) of all or substantially all of the Shares of Capital Stock or assets of such Subsidiary; provided, that such restriction, by its terms, terminates on the earlier of the termination of such agreement or the consummation of such agreement, and is agreed to in good faith; and (f) in the case of the foregoing clause (y), legal restrictions of general applicability under the corporation or similar law under which the Borrower or such Subsidiary is incorporated, fraudulent conveyance or similar laws or general applicability for the benefit of creditors generally, and other legal restrictions of general applicability to similarly situated business corporations; and (g) in the case of subclause (ii) of the foregoing clause (x), restrictions on transfer of property arising in the ordinary course of business; provided, that such restrictions do not directly or indirectly secure any obligation of the Borrower or such Subsidiary to pay money or to perform an obligation, and do not in the aggregate materially detract from the value of a property or asset to, or materially impair its use in the business of, the Borrower or such Subsidiary. 7.14. LIMITATION ON OTHER RESTRICTIONS ON AMENDMENT OF THE LOAN DOCUMENTS, ETC. The Borrower shall not, and shall not permit any Subsidiary of the Borrower to, enter into, become or remain subject to any agreement or instrument to which the Borrower or such Subsidiary is a party or by which any of them or any of their respective properties (now owned or hereafter acquired) may be subject or bound that would prohibit or require the consent of any Person to any amendment, modification or supplement to any of the Loan Documents, except: (a) the Loan Documents, and (b) provisions in each of the other Credit Facilities no more restrictive than those in such other Credit Facility, respectively, as constituted on the Closing Date. -43- 302 7.15. LIMITATION ON CERTAIN BENEFIT LIABILITIES. The Borrower shall not, and shall not permit any Subsidiary of the Borrower or any Controlled Group Member to, become subject to Primark Group Benefits Exposures in excess of $20,000,000 in the aggregate for all such Persons. As used herein, the term "Primark Group Benefits Exposures" shall mean the sum of the maximum potential liabilities (direct, contingent or other) of the Borrower and its Subsidiaries and the Controlled Group Members in connection with the following: (a) withdrawal liability (within the meaning of Section 4201 of ERISA) from any Multiemployer Plan, whether or not such liability has yet been triggered as a result of a withdrawal; (b) contributions due and unpaid with respect to a Multiemployer Plan; (c) the "amount of unfunded benefit liabilities" (within the meaning of Section 4001(a)(18) of ERISA) under any Plan, whether or not such liability has yet been triggered as a result of a termination of such Plan; (d) excise taxes assessed in connection with all of the above or otherwise in connection with any Plan; (e) Postretirement Benefit Obligations of the Borrower, any Subsidiary of the Borrower or any Controlled Group Member; and (f) any other liability (contingent or other) in connection with a Plan or Multiemployer Plan which represent a material risk that it may result in a Lien attaching to assets of the Borrower or any Subsidiary of the Borrower, without regard to any minimum amount required by Law to cause such Lien to attach. 7.16. FISCAL YEAR. The Borrower shall maintain a fiscal year beginning on each January 1 and ending on the following December 31, divided into fiscal quarters ending on the last day of each March, June, September and December. ARTICLE VIII DEFAULTS 8.01. EVENTS OF DEFAULT. An "Event of Default" shall mean the occurrence or existence of one or more of the following events or conditions (for any reason, whether voluntary, involuntary or effected or required by Law): (a) The Borrower shall fail to pay when due principal of any Letter of Credit Reimbursement Obligation, or make when due any required cash collateralization of outstanding Letters of Credit. (b) The Borrower shall fail to pay when due interest on any Letter of Credit Reimbursement Obligation, any fees, indemnity or expenses, or any other amount due hereunder or under any other Loan Document, and such failure shall have continued for a period of five Business Days. (c) Any representation or warranty made or deemed made by the Borrower in or pursuant to or in connection with any Loan Document or any transaction contemplated hereby or thereby, or any statement made by the Borrower or any Subsidiary of the Borrower or any in any financial statement, certificate, report, exhibit or document furnished by the Borrower or any Subsidiary of the Borrower to the Collateral Agent or any Lender Party pursuant to or in connection with any Loan Document or any transaction contemplated hereby or thereby, shall prove to have been false or misleading in any material respect as of the time when made or deemed made (including by omission of material information necessary to make such representation, warranty or statement not misleading). -44- 303 (d) The Borrower shall default in the performance or observance of any covenant contained in Article VII hereof or any of the covenants contained in Sections 3.13, 6.01(j)(i), 6.11, 6.12, 6.14, 6.15 or 6.16 hereof, or in Sections 4.02 or 4.06 of the Borrower Pledge Agreement. (e) The Borrower shall default in the performance or observance of any other covenant, agreement or duty under this Agreement or any other Loan Document and (i) in the case of a default under Section 6.01 hereof (other than as referred to in Sections 6.01(j)(i) hereof) such default shall have continued for a period of 10 days and (ii) in the case of any other default such default shall have continued for a period of 30 days. (f) (i) The Borrower or any Subsidiary of the Borrower shall default in any payment of any amount in respect of any Cross-Default Triggering Obligation beyond any period of grace with respect thereto or, if any amount payable in respect of any Cross-Default Triggering Obligation is payable on demand, shall fail to pay such amount when demanded, or (ii) the Borrower or any Subsidiary of the Borrower shall default in the observance of any covenant, term or condition of any agreement or instrument by which any Cross-Default Triggering Obligation is created, secured or evidenced, if the effect of such default referred to in this clause (ii) is to cause, or to permit the holder or holders of any Cross-Default Triggering Obligation (or a trustee or agent on behalf of such holder or holders) to cause, all or part of such Cross-Default Triggering Obligation to become due before its otherwise stated maturity (by way of acceleration, mandatory prepayment or otherwise), or, in the case of an interest rate or currency swap, cap, collar, floor, future, forward or similar transaction, to terminate before its otherwise scheduled termination. As used in this Agreement, "Cross-Default Triggering Obligation" shall mean (A) any obligation under or in connection with any of the other Credit Facilities, any Swap Agreement, the Senior Notes or the Senior Note Indenture, (B) any obligation, as principal or as guarantor or other surety, in respect of the TIMCO Bond Order, the TIMCO Lease, any reimbursement agreement relating to the TIMCO Bonds Letter of Credit, or any other obligation referred to in Section 7.03(j) hereof, (C) any obligation (or set of related obligations), as principal or as guarantor or other surety, in respect of Indebtedness in excess of $5,000,000 (or the equivalent thereof in one or more foreign currencies) in aggregate amount, and (D) any obligation (or set of related obligations, including all obligations under a master agreement), as principal or as guarantor or other surety, in respect of any interest rate or currency swap, cap, collar, floor, future, forward or similar transactions relating to a principal or notional principal amount in excess of $5,000,000 (or the equivalent thereof in one or more foreign currencies) in aggregate amount. (g) One or more judgments for the payment of money shall have been entered against the Borrower or any Subsidiary of the Borrower, which judgment or judgments exceed $2,000,000 in the aggregate, and such judgment or judgments shall have remained undischarged and unstayed for a period of 30 consecutive days. -45- 304 (h) Any Governmental Action now or hereafter made by or with any Governmental Authority in connection with any Loan Document is not obtained or shall have ceased to be in full force and effect or shall have been modified or amended or shall have been held to be illegal or invalid, and such event or condition has, or would be likely to have, a Material Adverse Effect. (i) Any Shared Security Document shall cease to be in full force and effect; or any Lien created or purported to be created in any Shared Collateral pursuant to any Shared Security Document shall fail to be a valid, enforceable and perfected Lien in favor of the Collateral Agent for the benefit of the Secured Parties securing the Obligations, prior to all other Liens except Permitted Liens. (j) Any Loan Document or term or provision thereof shall cease to be in full force and effect (except in accordance with the express terms of such Loan Document), or the Borrower or any other party to any Loan Document shall, or shall purport to, terminate (except in accordance with the terms of such Loan Document), repudiate, declare voidable or void or otherwise contest, any Loan Document or term or provision thereof or any obligation or liability of the Borrower or such other party thereunder. (k) Any one or more Pension-Related Events referred to in subsection (b) or (e) of the definition of "Pension-Related Event" shall have occurred; or any one or more other Pension-Related Events shall have occurred which, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect. (l) The Borrower shall make, or shall be required by the terms of the Senior Note Indenture to make or to offer to make, any purchase of Senior Notes under Sections 4.12 or 4.13 of the Senior Note Indenture; or the Borrower or any of its Subsidiaries otherwise shall make or offer to make any payment on account of principal of, or any purchase, redemption, retirement, defeasance or acquisition of, any of the Senior Notes (except for principal payment in accordance with the terms thereof at the scheduled maturity thereof). (m) Any Person or group (as such term is used in Sections 13 and 14 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the rules and regulations thereunder) shall have become the direct or indirect beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act) of 35% or more of any class of voting securities of the Borrower; or any Person shall have been elected or shall have become a director of the Borrower who was not nominated and recommended for such position or elected to such position by a majority of the then-incumbent Board of Directors of the Borrower; or a "Change in Control" (as defined in the Senior Note Indenture as constituted on the Closing Date shall have occurred (without regard to any subsequent amendment, modification or supplement to, or termination or expiration of, the Senior Note Indenture). (n) A Control-Related Event shall have occurred, and the Required Lenders shall have determined in good faith that such Control-Related Event has or would be likely to have a Material Adverse Effect (by reason of suspension, withdrawal or impairment of any security clearance of the Borrower or any of its Subsidiaries, or impairment of the business relationship between the Borrower and its Subsidiaries, on the one hand, and the U.S. Government and its agencies and departments, on the other hand). "Control-Related Event" shall mean that any Person or group (as such term is used in Sections 13 and 14 of the Exchange Act, and the rules and regulations thereunder) shall have become the direct or indirect beneficial owner (as defined -46- 305 in Rules 13d-3 and 13d-5 under the Exchange Act) of 5% or more of any class of voting securities of the Borrower (except for any such Person or group existing on the Closing Date, to the extent of the voting securities then owned by them). (o) A proceeding shall have been instituted in respect of the Borrower or any Significant Subsidiary of the Borrower (and for this purpose, each Subsidiary of the Borrower which is subject to an event or condition described in this Section 8.01(o) or in Section 8.01(p) hereof shall be deemed a Significant Subsidiary if, collectively, together with their respective Subsidiaries, treated as a single entity, they would constitute a Significant Subsidiary) (i) seeking to have an order for relief entered in respect of such Person, or seeking a declaration or entailing a finding that such Person is insolvent or a similar declaration or finding, or seeking dissolution, Winding-up, administration, charter revocation or forfeiture, liquidation, reorganization, arrangement, adjustment, composition or other similar relief with respect to such Person, its assets or its debts under any Law relating to bankruptcy, insolvency, relief of debtors or protection of creditors, termination of legal entities or any other similar Law now or hereafter in effect, or (ii) seeking appointment of a receiver, administrative receiver, trustee, liquidator, assignee, sequestrator or other custodian for such Person or for all or any substantial part of its property and such proceeding shall result in the entry, making or grant of any such order for relief, declaration, finding, relief or appointment, or such proceeding shall remain undismissed and unstayed for a period of 30 consecutive days. (p) The Borrower or any Significant Subsidiary of the Borrower (and for this purpose, each Subsidiary of the Borrower which is subject to an event or condition described in Section 8.01(o) hereof or in this Section 8.01(p) shall be deemed a Significant Subsidiary if, collectively, together with their respective Subsidiaries, treated as a single entity, they would constitute a Significant Subsidiary) shall not be Solvent; shall fail to pay, become unable to pay, or state that it is or will be unable to pay, its debts as they become due; shall voluntarily suspend transaction of its business; shall make a general assignment for the benefit of creditors; shall institute (or fail to controvert in a timely and appropriate manner) a proceeding described in Section 8.01(o)(i) hereof, or (whether or not any such proceeding has been instituted) shall consent to or acquiesce in any such order for relief, declaration, finding or relief described therein; shall institute (or fail to controvert in a timely and appropriate manner) a proceeding described in Section 8.01(o)(ii) hereof, or (whether or not any such proceeding has been instituted) shall consent to or acquiesce in any such appointment or to the taking of possession by any such custodian of all or any substantial part of its or his property; shall dissolve, Wind-up, go into administration or revoke or forfeit its articles of incorporation (or other constituent documents); or shall take any action in furtherance of any of the foregoing. 8.02. CONSEQUENCES OF AN EVENT OF DEFAULT. (a) GENERAL. If an Event of Default specified in subsections (a) through (n) of Section 8.01 hereof shall have occurred and be continuing or exist, or if an Event of Default specified in subsections (o) or (p) of Section 8.01 hereof shall have occurred and be continuing or exist with respect to a Person other than the Borrower, then, in addition to all other rights and remedies which the -47- 306 Collateral Agent or any Lender Party may have hereunder or under any other Loan Document, at law, in equity or otherwise, the Agent may, and upon the written request of the Required Lenders shall, by notice to the Borrower, from time to time do any or all of the following: (i) declare the Letter of Credit Commitment terminated, whereupon the Letter of Credit Commitment will terminate; (ii) declare all Letter of Credit Reimbursement Obligations and all other Loan Obligations to be immediately due and payable without presentment, demand, protest or further notice of any kind, all of which are hereby waived, and an action therefor shall immediately accrue, and (iii) require the Borrower to immediately cash collateralize all outstanding Letters of Credit in accordance with Section 3.07 hereof. (b) BANKRUPTCY AND CERTAIN OTHER EVENTS. If an Event of Default specified in subsection (o) or (p) of Section 8.01 hereof shall have occurred and be continuing or exist with respect to the Borrower, then, in addition to all other rights and remedies which the Collateral Agent or any Lender Party may have hereunder or under any other Loan Document, at law, in equity or otherwise, (i) the Letter of Credit Commitment shall automatically terminate, (ii) all Letter of Credit Reimbursement Obligations and all other Loan Obligations shall become immediately due and payable without presentment, demand, protest or notice of any kind, all of which are hereby waived, and an action therefor shall immediately accrue, and (iii) the Borrower shall immediately cash collateralize all outstanding Letters of Credit in accordance with Section 3.07 hereof. 8.03. APPLICATION OF PROCEEDS. Subject to Section 3.07 hereof, after the occurrence of an Event of Default and the occurrence of either acceleration of the Letter of Credit Reimbursement Obligations or a requirement that the Borrower cash collateralize all outstanding Letters of Credit, any distributions made on account of Loan Obligations under the Collateral Agency Agreement and all other payments received on account of Loan Obligations shall be applied by the Agent to payment of the Loan Obligations in the following order: First, to payment of that portion of the Loan Obligations constituting fees, indemnities and other amounts due to the Agent in its capacity as such; Second, to payment of that portion of the Loan Obligations constituting fees, indemnities and other amounts due to the Issuing Bank in its capacity as such, other than principal of and interest on Letter of Credit Reimbursement Obligations and accrued and unpaid Letter of Credit Fees, to the Issuing Bank; Third, to payment of that portion of the Loan Obligations constituting accrued and unpaid interest on Letter of Credit Unreimbursed Draws, and accrued and unpaid Letter of Credit Fees, ratably amongst the Lenders and the Issuing Bank in proportion to the respective amounts described in this clause "Third" due to them; Fourth, to payment of that portion of the Loan Obligations constituting Letter of Credit Unreimbursed Draws, to the Issuing Bank; Fifth, to payment of all other Loan Obligations, ratably amongst the Lender Parties in proportion to the respective amounts described in this clause "Fifth" due to them; and Finally, the balance, if any, after all of the Loan Obligations have been indefeasibly paid in full in cash, the Letter of Credit Commitment shall have terminated and all Letters of Credit shall have terminated, to the Borrower or as otherwise required by law. -48- 307 ARTICLE IX THE AGENT 9.01. APPOINTMENT. Each Lender Party hereby irrevocably appoints Mellon Bank, N.A. to act as Agent for the Lender Parties under this Agreement and the other Loan Documents. Each Lender Party hereby irrevocably authorizes the Agent to take such action on behalf of the Lender Parties under the provisions of this Agreement and the other Loan Documents, and to exercise such powers and to perform such duties, as are expressly delegated to or required of the Agent by the terms hereof or thereof, together with such powers as are reasonably incidental thereto. Mellon Bank, N.A. hereby agrees to act as Agent on behalf of the Lender Parties on the terms and conditions set forth in this Agreement and the other Loan Documents, subject to its right to resign as provided herein. Each Lender Party hereby irrevocably authorizes the Agent to execute and deliver each of the Loan Documents and to accept delivery of such of the other Loan Documents as may not require execution by the Agent. Without limiting the generality of the foregoing, each Lender Party hereby irrevocably authorizes the Agent to execute and deliver the Collateral Agency Agreement on behalf of such Lender Party. Each Lender Party hereby agrees that the rights and remedies granted to the Agent under the Loan Documents shall be exercised exclusively by the Agent, and that no Lender Party shall have any right individually to exercise any such right or remedy, except to the extent, if any, expressly provided herein or therein. 9.02. GENERAL NATURE OF AGENT'S DUTIES. (a) NO IMPLIED DUTIES. The Agent shall have no duties or responsibilities except those expressly set forth in this Agreement and the other Loan Documents, and no implied duties or responsibilities on the part of the Agent shall be read into this Agreement or any Loan Document or shall otherwise exist. (b) NOT A FIDUCIARY. The duties and responsibilities of the Agent under this Agreement and the other Loan Documents shall be mechanical and administrative in nature, and the Agent shall not have a fiduciary relationship in respect of any Lender Party. (c) AGENT OF LENDER PARTIES. The Agent is and shall be solely the agent of the Lender Parties. The Agent does not assume, and shall not at any time be deemed to have, any relationship of agency or trust with or for, or any other duty or responsibility to, the Borrower or any Person other than the Lender Parties. The provisions of this Article IX are for the benefit of the Lender Parties (and the other Persons named in Section 9.07 hereof), and the Borrower shall not have any rights under any of the provisions of this Article IX. (d) NO OBLIGATION TO TAKE ACTION. The Agent shall be under no obligation to take any action hereunder or under any other Loan Document if the Agent believes in good faith that taking such action may conflict with any Law or any provision of this Agreement or any other Loan Document, or may require the Agent to qualify to do business in any jurisdiction where it is not then so qualified. 9.03. EXERCISE OF POWERS. Subject to the other provisions of this Agreement and the other Loan Documents, the Agent shall take any action of the type specified in this Agreement or any other Loan Document as being within the Agent's rights, powers or discretion in accordance with directions from the Required Lenders (or, to the extent this Agreement or such Loan Document expressly requires the direction or consent of some other Person or set of Persons, then instead in accordance with the directions of such other Person or set of Persons). In the absence of such directions, the Agent shall have the authority (but under no circumstances shall be obligated), in its sole discretion, to take any such action, except to the extent this Agreement or such Loan Document expressly requires -49- 308 the direction or consent of the Required Lenders (or some other Person or set of Persons), in which case the Agent shall not take such action absent such direction or consent. Any action or inaction pursuant to such direction, discretion or consent shall be binding on all the Lender Parties. The Agent shall not have any liability to any Person as a result of (x) the Agent acting or refraining from acting in accordance with the directions of the Required Lenders (or other applicable Person or set of Persons), (y) the Agent refraining from acting in the absence of instructions to act from the Required Lenders (or other applicable Person or set of Persons), whether or not the Agent has discretionary power to take such action, or (z) the Agent taking discretionary action it is authorized to take under this Section (subject, in the case of this clause (z), to the provisions of Section 9.04(a) hereof). 9.04. GENERAL EXCULPATORY PROVISIONS. (a) GENERAL. The Agent shall not be liable for any action taken or omitted to be taken by it under or in connection with this Agreement or any other Loan Document, unless caused by its own gross negligence or willful misconduct. (b) AGENT NOT RESPONSIBLE FOR LOAN DOCUMENTS, ETC. The Agent shall not be responsible for (i) the execution, delivery, effectiveness, enforceability, genuineness, validity or adequacy of this Agreement or any other Loan Document, (ii) any recital, representation, warranty, document, certificate, report or statement in, provided for in, or received under or in connection with, this Agreement or any other Loan Document, (iii) any failure of the Borrower, any Lender or Issuing Bank to perform any of their respective obligations under this Agreement or any other Loan Document, (iv) the existence, validity, enforceability, perfection, recordation, priority, adequacy or value, now or hereafter, of any Lien or other direct or indirect security afforded or purported to be afforded by any of the Loan Documents or otherwise from time to time, or (v) caring for, protecting, insuring, or paying any taxes, charges or assessments with respect to any collateral. (c) NO DUTY OF INQUIRY. The Agent shall not be under any obligation to ascertain, inquire or give any notice relating to (i) the performance or observance of any of the terms or conditions of this Agreement or any other Loan Document on the part of the Borrower, (ii) the business, operations, condition (financial or otherwise) or prospects of the Borrower or any other Person, or (iii) except to the extent set forth in Section 9.05(f) hereof, the existence of any Event of Default or Potential Default. (d) NOTICES. The Agent shall not be under any obligation, either initially or on a continuing basis, to provide any Lender Party with any notices, reports or information of any nature, whether in its possession presently or hereafter, except for such notices, reports and other information expressly required by this Agreement or any other Loan Document to be furnished by the Agent to such Lender Party. 9.05. ADMINISTRATION BY THE AGENT. (a) RELIANCE ON NOTICES. The Agent may rely upon any notice or other communication of any nature (written or oral, including but not limited to telephone conversations, whether or not such notice or other communication is made in a manner permitted or required by this Agreement or any Loan Document) purportedly made by or on behalf of the proper party or parties, and the Agent shall not have any duty to verify the identity or authority of any Person giving such notice or other communication. (b) CONSULTATION. The Agent may consult with legal counsel (including, without limitation, in-house counsel for the Agent or in-house or other counsel for the Borrower), independent public accountants and any other experts selected by it from time to time, and the Agent shall not be -50- 309 liable for any action taken or omitted to be taken in good faith by it in accordance with the advice of such counsel, accountants or experts. (c) RELIANCE ON CERTIFICATES, ETC. The Agent may conclusively rely upon the truth of the statements and the correctness of the opinions expressed in any certificates or opinions furnished to the Agent in accordance with the requirements of this Agreement or any other Loan Document. Whenever the Agent shall deem it necessary or desirable that a matter be proved or established with respect to the Borrower or any Lender Party, such matter may be established by a certificate of the Borrower or such Lender Party, as the case may be, and the Agent may conclusively rely upon such certificate (unless other evidence with respect to such matter is specifically prescribed in this Agreement or another Loan Document). (d) INDEMNITY. The Agent may fail or refuse to take any action unless it shall be indemnified to its satisfaction from time to time against any and all amounts, liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature which may be imposed on, incurred by or asserted against the Agent by reason of taking or continuing to take any such action. (e) PERFORMANCE THROUGH AGENTS. The Agent may perform any of its duties under this Agreement or any other Loan Document by or through agents or attorneys-in-fact. The Agent shall not be responsible for the negligence or misconduct of any agents or attorneys-in fact selected by it with reasonable care. (f) NOTICE OF DEFAULT. The Agent shall not be deemed to have any knowledge or notice of the occurrence of any Event of Default or Potential Default unless the Agent has received notice from a Lender Party or the Borrower referring to this Agreement, describing such Event of Default or Potential Default, and stating that such notice is a "notice of default." If the Agent receives such a notice, the Agent shall give prompt notice thereof to each Lender. 9.06. LENDERS NOT RELYING ON AGENT OR OTHER LENDERS. Each Lender Party hereby acknowledges as follows: (a) Neither the Agent nor any other Lender Party has made any representations or warranties to it, and no act taken hereafter by the Agent or any other Lender Party shall be deemed to constitute any representation or warranty by the Agent or such other Lender Party to it. (b) It has, independently and without reliance upon the Agent or any other Lender Party, and based upon such documents and information as it has deemed appropriate, made its own credit and legal analysis and decision to enter into this Agreement and the other Loan Documents. (c) It will, independently and without reliance upon the Agent or any other Lender Party, and based upon such documents and information as it shall deem appropriate at the time, make its own decisions to take or not take action under or in connection with this Agreement and the other Loan Documents. 9.07. INDEMNIFICATION OF AGENT BY LENDERS. Each Lender hereby agrees to reimburse and indemnify the Agent and its directors, officers, employees and agents (to the extent not reimbursed by the Borrower and without limitation of the obligations of the Borrower to do so), Pro Rata, from and against any and all amounts, losses, liabilities, claims, damages, expenses, obligations, penalties, actions, judgments, suits, costs or disbursements of any kind or nature (including, without limitation, the fees and disbursements of counsel for the Agent or such other Person in connection with any investigative, administrative or judicial proceeding commenced or threatened, whether or not the Agent or such other Person shall be designated a party thereto) that may at any time be imposed on, incurred by or asserted against the Agent or such other Person as a result of, or arising out of, or in any way related to or by reason of, this Agreement, any other Loan Document, any transaction from time to time contemplated -51- 310 hereby or thereby, or any transaction financed in whole or in part or directly or indirectly with the proceeds of any Letter of Credit; provided, that no Lender shall be liable for any portion of such amounts, losses, liabilities, claims, damages, expenses, obligations, penalties, actions, judgments, suits, costs or disbursements resulting from the gross negligence or willful misconduct of the Agent or such other Person, as finally determined by a court of competent jurisdiction. 9.08. AGENT IN ITS INDIVIDUAL CAPACITY. With respect to the Loan Obligations owing to it, the Agent shall have the same rights and powers under this Agreement and each other Loan Document as any other Lender and may exercise the same as though it were not the Agent, and the terms "Lender," "Issuing Bank," and like terms shall include the Agent in its individual capacity as such. The Agent and its affiliates may, without liability to account, make loans to, accept deposits from, acquire debt or equity interests in, enter into interest rate or currency hedging transactions with, act as trustee under indentures of, and engage in any other business or transaction with, the Borrower or any stockholder, subsidiary or affiliate of the Borrower, as though the Agent were not the Agent hereunder. 9.09. [Reserved] 9.10. SUCCESSOR AGENT. The Agent may resign at any time by giving 45 days' prior written notice thereof to the Lenders and the Borrower. The Agent may be removed by the Required Lenders at any time by giving 10 days' prior written notice thereof to the Agent, the other Lenders and the Borrower. Upon any such resignation or removal, the Required Lenders shall have the right to appoint a successor Agent. If no successor Agent shall have been so appointed and consented to, and shall have accepted such appointment, within 30 days after such notice of resignation or removal, then the retiring Agent may (but shall not be required to) appoint a successor Agent. Each successor Agent shall be a commercial bank or trust company organized under the laws of the United States of America or any State thereof and having a combined capital and surplus of at least $500,000,000. Upon the acceptance by a successor Agent of its appointment as Agent hereunder, such successor Agent shall thereupon succeed to and become vested with all the properties, rights, powers, privileges and duties of the former Agent in its capacity as such, without further act, deed or conveyance. Upon the effective date of resignation or removal of a retiring Agent, such Agent shall be discharged from its duties as such under this Agreement and the other Loan Documents, but the provisions of this Agreement shall inure to its benefit as to any actions taken or omitted by it while it was Agent under this Agreement. If and so long as no successor Agent shall have been appointed, then any notice or other communication required or permitted to be given by the Agent shall be sufficiently given if given by the Required Lenders, all notices or other communications required or permitted to be given to the Agent shall be given to each Lender, and all payments to be made to the Agent shall be made directly to the Borrower or Lender Party for whose account such payment is made. 9.11. CALCULATIONS. The Agent shall not be liable for any calculation, apportionment or distribution of payments made by it in good faith. If such calculation, apportionment or distribution is subsequently determined to have been made in error, the sole recourse of any Lender Party to whom payment was due but not made shall be to recover from the other Lender Parties any payment in excess of the amount to which they are determined to be entitled or, if the amount due was not paid by the Borrower, to recover such amount from the Borrower. ARTICLE X MISCELLANEOUS -52- 311 10.01. HOLIDAYS. Except as otherwise expressly provided herein or therein, whenever any payment or action to be made or taken hereunder or under any other Loan Document shall be stated to be due on a day which is not a Business Day, such payment or action shall be made or taken on the next following Business Day and such extension of time shall be included in computing interest or fees, if any, in connection with such payment or action. 10.02. RECORDS. The unpaid Letter of Credit Reimbursement Obligations, the unpaid interest accrued thereon, and the interest rate or rates applicable thereto shall at all times be ascertained from the records of the Issuing Bank, which shall be conclusive absent manifest error. 10.03. AMENDMENTS AND WAIVERS. The Agent and the Borrower may from time to time amend, modify or supplement the provisions of this Agreement or any other Loan Document (other than the Shared Security Documents) for the purpose of amending, adding to, or waiving any provisions, releasing any collateral, or changing in any manner the rights and duties of the Borrower or any Lender Party. Any such amendment, modification or supplement made by the Borrower and the Agent in accordance with the provisions of this Section 10.03 shall be binding upon the Borrower and each Lender Party. The Agent shall enter into such amendments, modifications or supplements from time to time as directed by the Required Lenders, and only as so directed, provided, that no such amendment, modification or supplement may be made which will: (a) Increase the Commitment Percentage of any Lender over the amount thereof then in effect without the written consent of each Lender, or extend the Note Backup Final Expiration Date without the written consent of each Lender; (b) Reduce the rate of interest or extend the time for payment of interest borne by any Letter of Credit Reimbursement Obligation (other than as a result of waiving the applicability of any increase in interest rates applicable to overdue amounts), or extend the time for payment of or reduce the amount of any Letter of Credit Fee, without the written consent of each Lender affected thereby; (c) Change the definition of "Required Lenders" or amend this Section 10.03, without the written consent of each Lender; (d) Amend or waive any of the provisions of Article IX, or impose additional duties upon the Agent, or otherwise affect the rights, interests or obligations of the Agent, without the written consent of the Agent; (e) Release all or a major portion of the Shared Collateral (other than in accordance with the provisions of the Loan Documents), or subordinate the priority of the Liens in favor of the Collateral Agent to Liens in favor of another Person with respect to all or a major portion of the Shared Collateral (other than in accordance with the provisions of the Loan Documents), without the written consent of each Lender; (f) Alter the priority of distributions set forth in Section 8.03 hereof, without the written consent of each Lender affected thereby; (g) Amend or waive any of the provisions of Article III, or impose additional duties upon the Issuing Bank or otherwise affect the rights, interests or obligations of the Issuing Bank, without the written consent of the Issuing Bank; or -53- 312 (h) Reduce any Letter of Credit Unreimbursed Draw, or extend the time for repayment by the Borrower of any Letter of Credit Unreimbursed Draw, without the written consent of each Lender; and provided further, that Transfer Supplements may be entered into in the manner provided in Section 10.14 hereof. Any such amendment, modification or supplement must be in writing, manually signed by or on behalf of the Borrower and the Lender Party which is party thereto, and shall be effective only to the extent set forth in such writing. Any Event of Default or Potential Default waived or consented to in any such amendment, modification or supplement shall be deemed to be cured and not continuing to the extent and for the period set forth in such waiver or consent, but no such waiver or consent shall extend to any other or subsequent Event of Default or Potential Default or impair any right consequent thereto. Shared Security Documents may be amended, modified and supplemented from time to time in accordance with the terms thereof and of the Collateral Agency Agreement, and any such amendment, modification or supplement so made shall be binding upon the Borrower and each Lender Party (and to the extent that any consent, direction or other action is required by the Agent in connection therewith, the provisions of the third sentence of this Section 10.03 shall apply to the Agent in giving such consent or direction or taking such action). 10.04. NO IMPLIED WAIVER; CUMULATIVE REMEDIES. No course of dealing and no delay or failure of the Collateral Agent or any Lender Party in exercising any right, power or privilege under this Agreement or any other Loan Document shall affect any other or future exercise thereof or exercise of any other right, power or privilege; nor shall any single or partial exercise of any such right, power or privilege or any abandonment or discontinuance of steps to enforce such a right, power or privilege preclude any further exercise thereof or of any other right, power or privilege. The rights and remedies of the Collateral Agent and the Lender Parties under this Agreement and any other Loan Document are cumulative and not exclusive of any rights or remedies which any of them would otherwise have hereunder or thereunder, at law, in equity or otherwise. 10.05. NOTICES. (a) GENERAL. Except to the extent otherwise expressly permitted hereunder or thereunder, all notices, requests, demands, directions and other communications (collectively "notices") to the Borrower or any Lender Party under this Agreement or any Loan Document shall be in writing (including telexes and facsimile transmission) and shall be sent by first-class mail, or by nationally-recognized overnight courier, or by telex or facsimile transmission (with confirmation in writing mailed first-class or sent by such an overnight courier), or by personal delivery. All notices shall be sent to the applicable party at the address stated on the signature pages hereof or in accordance with the last unrevoked written direction from such party to the other parties hereto, in all cases with postage or other charges prepaid. Any such properly given notice to any Lender Party shall be effective when received. Any such properly given notice to the Borrower shall be effective on the earliest to occur of receipt, telephone confirmation of receipt of telex or facsimile transmission, one Business Day after delivery to a nationally-recognized overnight courier, or three Business Days after deposit in the mail. (b) COPIES TO AGENT. Any Lender giving any notice to the Borrower or any other party to a Loan Document shall simultaneously send a copy thereof to the Agent, and the Agent shall promptly notify the other Lenders of the receipt by it of any such notice. (c) RELIANCE. Each Lender Party may rely on any notice (whether or not such notice is made in a manner permitted or required by this Agreement or any Loan Document) purportedly made -54- 313 by or on behalf of the Borrower, and no Lender Party shall have any duty to verify the identity or authority of any Person giving such notice. 10.06. EXPENSES; TAXES; INDEMNITY. (a) EXPENSES. The Borrower agrees to pay or cause to be paid and to save each Lender Party harmless against liability for the payment of all reasonable out-of-pocket costs and expenses (including but not limited to reasonable fees and expenses of outside counsel, including local counsel, auditors, and all other professional, accounting, evaluation and consulting costs) incurred by any Lender Party from time to time arising from or relating to (i) in the case of the Agent, the negotiation, preparation, execution, delivery, administration and performance of this Agreement and the other Loan Documents, (ii) in the case of the Agent, any requested amendments, modifications, supplements, waivers or consents (whether or not ultimately entered into or granted) to this Agreement or any Loan Document, (iii) in the case of each Lender Party, the enforcement or preservation of rights under this Agreement or any Loan Document (including but not limited to any such costs or expenses arising from or relating to (A) the creation, perfection or protection of any Lien on any collateral, (B) the protection, collection, lease, sale, taking possession of, preservation of, or realization on, any collateral, including without limitation advances for taxes, filing fees and the like, (C) collection or enforcement by any Lender Party of any amount owing hereunder or thereunder, and (D) any litigation, proceeding, dispute, work-out, restructuring or rescheduling related in any way to this Agreement or the Loan Documents), and (iv) in the case of Mellon Bank, N.A., any syndication of this Agreement prior to the first anniversary of the Closing Date (but amounts payable under this clause (iv), plus amounts payable under Section 10.06(a)(iv) of the other Credit Facilities as constituted on the Closing Date, shall in no event exceed an aggregate of $50,000). (b) TAXES. The Borrower hereby agrees to pay all stamp, document, transfer, recording, filing, registration, search, sales and excise fees and taxes and all similar impositions now or hereafter determined by any Lender Party to be payable in connection with this Agreement or any other Loan Documents or any other documents, instruments or transactions pursuant to or in connection herewith or therewith, and the Borrower agrees to save each Lender Party harmless from and against any and all present or future claims, liabilities or losses with respect to or resulting from any omission to pay or delay in paying any such fees, taxes or impositions. (c) INDEMNITY. The Borrower hereby agrees to reimburse and indemnify the Lender Parties, their respective affiliates, and the directors, officers, employees, attorneys and agents of each of the foregoing (the "Lender Indemnified Parties"), and each of them, and to hold each of them harmless from and against, any and all losses, liabilities, claims, damages, expenses, obligations, penalties, actions, judgments, suits, costs or disbursements of any kind or nature whatsoever (including, without limitation, the fees and disbursements of outside counsel for such Lender Indemnified Party in connection with any investigative, administrative or judicial proceeding commenced or threatened, whether or not such Lender Indemnified Party shall be designated a party thereto) that may at any time be imposed on, asserted against or incurred by such Lender Indemnified Party as a result of, or arising out of, or in any way related to or by reason of this Agreement or any other Loan Document, any transaction from time to time contemplated hereby or thereby, or any transaction financed or secured in whole or in part, directly or indirectly, by any Letter of Credit or the proceeds thereof (and without in any way limiting the generality of the foregoing, including any grant of any Lien on collateral or any exercise by the Collateral Agent or any Lender Party of any of its rights or remedies under this Agreement or any other Loan Document); but excluding any portion of such losses, liabilities, claims, damages, expenses, obligations, penalties, actions, judgments, suits, costs or disbursements resulting from the gross negligence or willful misconduct of such Lender Indemnified Party, as finally determined -55- 314 by a court of competent jurisdiction. If and to the extent that the foregoing obligations of the Borrower under this Section 10.06(c), or any other indemnification obligation of the Borrower hereunder or under any other Loan Document, are unenforceable for any reason, the Borrower hereby agrees to make the maximum contribution to the payment and satisfaction of such obligations which is permissible under applicable Law. 10.07. SEVERABILITY. The provisions of this Agreement are intended to be severable. If any provision of this Agreement shall be held invalid or unenforceable in whole or in part in any jurisdiction such provision shall, as to such jurisdiction, be ineffective to the extent of such invalidity or unenforceability without in any manner affecting the validity or enforceability thereof in any other jurisdiction or the remaining provisions hereof in any jurisdiction. 10.08. PRIOR UNDERSTANDINGS. This Agreement and the other Loan Documents supersede all prior and contemporaneous understandings and agreements, whether written or oral, among the parties hereto and thereto relating to the transactions provided for herein and therein, including the engagement letter between the Borrower and Mellon Bank, N.A. dated December 13, 1996. 10.09. DURATION; SURVIVAL. All representations and warranties of the Borrower contained herein or in any other Loan Document or made in connection herewith or therewith shall survive the making of, and shall not be waived by the execution and delivery, of this Agreement or any other Loan Document, any investigation by or knowledge of any Lender Party, the issuance of any Letter of Credit or any other event or condition whatever. All covenants and agreements of the Borrower contained herein or in any other Loan Document shall continue in full force and effect from and after the date hereof (or, in the case of Section 7.01 hereof, from and after December 31, 1996) until the Letter of Credit Commitment shall have terminated, all Letters of Credit have expired or have been terminated, and all Loan Obligations (other than Contingent Indemnification Obligations) have been indefeasibly paid in full in cash. Without limitation, all obligations of the Borrower hereunder or under any other Loan Document to make payments to or indemnify any Lender Party or Lender Indemnified Party (including but not limited to obligations arising under Sections 3.16, 3.17, 10.06 and 10.16 hereof) shall survive the payment in full of all other Loan Obligations, termination of the Borrower's right to borrow hereunder, and all other events and conditions whatever. In addition, all obligations of each Lender to make payments to or indemnify the Agent or the Issuing Bank and Persons related to the Agent or the Issuing Bank (including but not limited to obligations arising under Sections 3.08(c) and 9.07 hereof) shall survive the payment in full by the Borrower of all Loan Obligations, termination of the Borrower's right to borrow hereunder, and all other events and conditions whatever. 10.10. COUNTERPARTS. This Agreement may be executed in any number of counterparts and by the different parties hereto on separate counterparts each of which, when so executed, shall be deemed an original, but all such counterparts shall constitute but one and the same instrument. 10.11. LIMITATION ON PAYMENTS. The parties hereto intend to conform to all applicable Laws in effect from time to time limiting the maximum rate of interest that may be charged or collected. Accordingly, notwithstanding any other provision hereof or of any other Loan Document, the Borrower shall not be required to make any payment to or for the account of any Lender, and each Lender shall refund any payment made by the Borrower, to the extent that such requirement or such failure to refund would violate or conflict with nonwaivable provisions of applicable Laws limiting the maximum amount of interest which may be charged or collected by such Lender. 10.12. SET-OFF. The Borrower hereby agrees that if any Loan Obligation of the Borrower shall be due and payable (by acceleration or otherwise), each Lender Party shall have the -56- 315 right, without notice to the Borrower, to set-off against and to appropriate and apply to such Loan Obligation any obligation of any nature owing to the Borrower by such Lender Party, including but not limited to all deposits (whether time or demand, general or special, provisionally credited or finally credited, whether or not evidenced by a certificate of deposit) now or hereafter maintained by the Borrower with such Lender Party. Such right shall be absolute and unconditional in all circumstances and, without limitation, shall exist whether or not such Lender Party or any other Person shall have given notice or made any demand to the Borrower or any other Person, whether such obligation owed to the Borrower is contingent, absolute, matured or unmatured (it being agreed that such Lender Party may deem such obligation to be then due and payable at the time of such setoff), and regardless of the existence or adequacy of any collateral, guaranty or any other security, right or remedy available to any Lender Party or any other Person. The Borrower hereby agrees that, to the fullest extent permitted by law, any Participant and any branch, subsidiary or affiliate of any Lender Party or any Participant shall have the same rights of set-off as a Lender as provided in this Section 10.12 (regardless of whether such Participant, branch, subsidiary or affiliate would otherwise be deemed in privity with or a direct creditor of the Borrower). The rights provided by this Section 10.12 are in addition to all other rights of set-off and banker's lien and all other rights and remedies which any Lender Party (or any such Participant, branch, subsidiary or affiliate) may otherwise have under this Agreement, any other Loan Document, at law or in equity, or otherwise, and nothing in this Agreement or any Loan Document shall be deemed a waiver or prohibition of or restriction on the rights of set-off or bankers' lien of any such Person. 10.13. SHARING OF COLLECTIONS. Subject to Section 2.06 of the Collateral Agency Agreement, the Lenders hereby agree among themselves that if any Lender shall receive (by voluntary payment, realization upon security, set-off or from any other source) any amount on account of any Loan Obligation contemplated by this Agreement or the other Loan Documents to be made by the Borrower ratably to all Lenders in greater proportion than any such amount received by any other Lender, then the Lender receiving such proportionately greater payment shall notify each other Lender and the Agent of such receipt, and equitable adjustment will be made in the manner stated in this Section so that, in effect, all such excess amounts will be shared ratably among all of the Lenders. The Lender receiving such excess amount shall purchase (which it shall be deemed to have done simultaneously upon the receipt of such excess amount) for cash from the other Lenders a participation in the applicable Loan Obligations owed to such other Lenders in such amount as shall result in a ratable sharing by all Lenders of such excess amount (and to such extent the receiving Lender shall be a Participant). If all or any portion of such excess amount is thereafter recovered from the Lender making such purchase, such purchase shall be rescinded and the purchase price restored to the extent of such recovery, together with interest or other amounts, if any, required by Law to be paid by the Lender making such purchase. The Borrower hereby consents to and confirms the foregoing arrangements. Each Participant shall be bound by this Section as fully as if it were a Lender hereunder. 10.14. SUCCESSORS AND ASSIGNS; PARTICIPATIONS; ASSIGNMENTS. (a) SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and inure to the benefit of the Borrower, the Lender Parties, and their respective successors and assigns, except that the Borrower may not assign or transfer any of its rights hereunder without the prior written consent of all the Lenders and the Agent, and any purported assignment without such consent shall be void, and except that, to the fullest extent permitted by law, a Lender may not voluntarily assign or transfer any of its rights hereunder except in accordance with the other provisions of this Section 10.14, and any other purported voluntary assignment or transfer shall be void; provided, that this Agreement shall inure to the benefit of successors of Lenders by operation of law or resulting from an involuntary assignment or transfer (including but not limited to receivers, conservators, trustees and like Persons, and successors by merger or consolidation). -57- 316 (b) PARTICIPATIONS. Any Lender may, in the ordinary course of its business and in accordance with applicable Law, at any time sell participations to one or more commercial banks or other Persons (each a "Participant") in all or a portion of its rights and obligations under this Agreement and the other Loan Documents; provided, that (i) any such Lender's obligations under this Agreement and the other Loan Documents shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations, (iii) the parties hereto shall continue to deal solely and directly with such Lender in connection with such Lender's rights and obligations under this Agreement and each of the other Loan Documents, and (iv) such Participant shall, by accepting such Participation, be bound by the provisions of Section 10.13 hereof, and (v) if such Participant is not already a Participant or a Lender, and if such Participation gives such Participant any voting rights (other than on matters described in clauses (a) through (h), inclusive, of Section 10.03 hereof), such Participation shall be subject to consent of the Agent, the Issuing Bank and the Borrower pursuant to clause (i) of Section 10.14(c) hereof as if such Participation were an assignment described therein. The Borrower agrees that any such Participant shall be entitled to the benefits of Sections 3.16, 3.17, 10.06 and 10.12 hereof with respect to its participation from time to time; provided, that no such Participant shall be entitled to receive any greater amount pursuant to such Sections than the transferor Lender would have been entitled to receive in respect of the amount of the participation transferred to such Participant had no such transfer occurred. (c) ASSIGNMENTS. Any Lender may, in the ordinary course of its business and in accordance with applicable Law, at any time assign all or a portion of its rights and obligations under this Agreement and the other Loan Documents to any Lender or to one or more additional commercial banks or other Person (each a "Purchasing Lender"); provided, that (i) any such assignment to a Purchasing Lender shall be made only with the consent of the Agent and the Issuing Bank (which each of them may grant or withhold in their absolute discretion) and of the Borrower (which consent may not be unreasonably withheld or delayed); (ii) if a Lender makes such an assignment of less than all of its then remaining rights and obligations under this Agreement and the other Loan Documents and under the Term Loan Agreement, such transferor Lender shall retain, after such assignment (and any concurrent assignment under the Term Loan Agreement), a minimum principal amount of $10,000,000 under this Agreement and the Term Loan Agreement in the aggregate, and after giving effect to such assignment (and any concurrent assignment under the Term Loan Agreement) the transferee Lender shall have a minimum principal amount of $10,000,000 under this Agreement and the Term Loan Agreement in the aggregate, -58- 317 (iii) each such assignment shall be of a constant, and not a varying, percentage of the Commitment Percentage of the transferor Lender, and of all of the transferor Lender's related rights and obligations under this Agreement and the other Loan Documents, (iv) each such assignment shall be made pursuant to a Transfer Supplement in substantially the form of Exhibit B to this Agreement, duly completed (a "Transfer Supplement"). In order to effect any such assignment, the transferor Lender and the Purchasing Lender shall execute and deliver to the Agent a duly completed Transfer Supplement (including the consents required by clause (i) of the preceding sentence) with respect to such assignment, and a processing and recording fee of $3,500; and, upon receipt thereof, the Agent shall accept such Transfer Supplement. Upon receipt of the Purchase Price Receipt Notice pursuant to such Transfer Supplement, the Agent shall record such acceptance in the Register. Upon such execution, delivery, acceptance and recording, from and after the close of business at the Agent's Office on the Transfer Effective Date specified in such Transfer Supplement (x) the Purchasing Lender shall be a party hereto and, to the extent provided in such Transfer Supplement, shall have the rights and obligations of a Lender hereunder, and (y) the transferor Lender thereunder shall be released from its obligations under this Agreement to the extent so transferred (and, in the case of an Transfer Supplement covering all or the remaining portion of a transferor Lender's rights and obligations under this Agreement, such transferor Lender shall cease to be a party to this Agreement) from and after the Transfer Effective Date. Accrued interest and accrued fees shall be paid to the Purchasing Lender at the same time or times provided in this Agreement. (d) REGISTER. The Agent shall maintain at its office a copy of each Transfer Supplement delivered to it and a register (the "Register") for the recordation of the names and addresses of the Lenders and the Commitment Percentages of, each Lender from time to time. The entries in the Register shall be conclusive absent manifest error and the Borrower and each Lender Party may treat each person whose name is recorded in the Register as a Lender hereunder for all purposes of the Agreement. The Register shall be available for inspection by the Borrower or any Lender at any reasonable time and from time to time upon reasonable prior notice. (e) FINANCIAL AND OTHER INFORMATION. Subject to Section 10.14(g) hereof, the Borrower authorizes the Agent and each Lender to disclose to any Participant or Purchasing Lender, or prospective Participant or Purchasing Lender, any and all financial and other information delivered to, received by, or otherwise in the possession of, such Person from time to time relating to the Borrower, its Subsidiaries and affiliates, or the matters contemplated by the Loan Documents. At the request of any Lender, the Borrower, at the Borrower's expense, shall provide to each prospective transferee the conformed copies of documents referred to in Section 4 of the form of Transfer Supplement. (f) SYNDICATION. The Borrower shall, at the reasonable request of Mellon Bank, N.A. from time to time, at the Borrower's expense, use all reasonable efforts to cooperate with its syndication effort, including, without limitation, (i) assisting it from time to time in preparing information packages for delivery to prospective Participants and Purchasing Lenders, and (ii) causing appropriate officers, representative and experts to meet with prospective Participants and Purchasing Lenders from time to -59- 318 time. Mellon Bank, N.A. agrees to make such information packages available to the Borrower for reasonable review before initial dissemination of the same in primary syndication, and to consult with the Borrower as to the content thereof. (g) CONFIDENTIALITY. Each Lender Party agrees to take reasonable precautions to maintain the confidentiality of information designated in writing as confidential and provided to it by the Borrower or any Subsidiary in connection with this Agreement; provided, however, that any Lender Party may disclose such information (i) at the request of any bank regulatory authority or other Governmental Authority or in connection with an examination of such Lender Party by any such Governmental Authority, (ii) pursuant to subpoena or other court process, (iii) to the extent such Lender Party is required (or believes in good faith that it is required) to do so in accordance with any applicable Law, (iv) to such Lender Party's independent auditors and other professional advisors, (v) in connection with the enforcement of any of its rights under or in connection with any Loan Document, (vi) to any other Lender Party, and (vii) to any actual or potential Participant or Purchasing Lender, or to any other actual or potential creditor of or participant in a credit to the Borrower or any of its Subsidiaries or Affiliates, so long as, in the case of this clause (vii), such Person agrees to comply with the provisions of this Section 10.14(g). (h) ASSIGNMENTS TO FEDERAL RESERVE BANK. Any Lender may at any time assign all or any portion of its rights under this Agreement, to a Federal Reserve Bank. No such assignment shall relieve the transferor Lender from any of its obligations hereunder. 10.15. GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL; LIMITATION OF LIABILITY. (a) GOVERNING LAW. THIS AGREEMENT AND ALL OTHER LOAN DOCUMENTS (EXCEPT TO THE EXTENT, IF ANY, OTHERWISE EXPRESSLY STATED IN SUCH OTHER LOAN DOCUMENTS) SHALL BE GOVERNED BY, CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH OF PENNSYLVANIA, WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES. (b) CERTAIN WAIVERS. THE BORROWER HEREBY IRREVOCABLY AND UNCONDITIONALLY: (i) AGREES THAT ANY ACTION, SUIT OR PROCEEDING BY ANY PERSON ARISING FROM OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR ANY STATEMENT, COURSE OF CONDUCT, ACT, OMISSION, OR EVENT OCCURRING IN CONNECTION HEREWITH OR THEREWITH (COLLECTIVELY, "RELATED LITIGATION") MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION SITTING IN ALLEGHENY COUNTY, PENNSYLVANIA, SUBMITS TO THE JURISDICTION OF SUCH COURTS, AND TO THE FULLEST EXTENT PERMITTED BY LAW AGREES THAT IT WILL NOT BRING ANY RELATED LITIGATION IN ANY OTHER FORUM (BUT NOTHING HEREIN SHALL AFFECT THE RIGHT OF ANY LENDER PARTY TO BRING ANY ACTION, SUIT OR PROCEEDING IN ANY OTHER FORUM); (ii) WAIVES ANY OBJECTION WHICH IT MAY HAVE AT ANY TIME TO THE LAYING OF VENUE OF ANY RELATED LITIGATION BROUGHT IN ANY SUCH COURT, WAIVES ANY CLAIM THAT ANY SUCH RELATED LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM, AND WAIVES ANY RIGHT TO OBJECT, WITH RESPECT TO ANY RELATED LITIGATION BROUGHT IN ANY SUCH COURT, THAT SUCH COURT DOES NOT HAVE JURISDICTION OVER THE BORROWER; (iii) CONSENTS AND AGREES TO SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER LEGAL PROCESS IN ANY RELATED LITIGATION BY REGISTERED OR CERTIFIED U.S. MAIL, POSTAGE PREPAID, TO THE BORROWER AT THE ADDRESS FOR NOTICES DESCRIBED IN SECTION 10.05 HEREOF, AND CONSENTS AND AGREES THAT SUCH -60- 319 SERVICE SHALL CONSTITUTE IN EVERY RESPECT VALID AND EFFECTIVE SERVICE (BUT NOTHING HEREIN SHALL AFFECT THE VALIDITY OR EFFECTIVENESS OF PROCESS SERVED IN ANY OTHER MANNER PERMITTED BY LAW); AND (IV) WAIVES THE RIGHT TO TRIAL BY JURY IN ANY RELATED LITIGATION. (c) LIMITATION OF LIABILITY. TO THE FULLEST EXTENT PERMITTED BY LAW, NO CLAIM MAY BE MADE BY THE BORROWER AGAINST ANY LENDER PARTY OR ANY AFFILIATE, DIRECTOR, OFFICER, EMPLOYEE, ATTORNEY OR AGENT OF ANY OF THEM FOR ANY SPECIAL, INCIDENTAL, INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES IN RESPECT OF ANY CLAIM ARISING FROM OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR ANY STATEMENT, COURSE OF CONDUCT, ACT, OMISSION, OR EVENT OCCURRING IN CONNECTION HEREWITH OR THEREWITH (WHETHER FOR BREACH OF CONTRACT, TORT OR ANY OTHER THEORY OF LIABILITY). THE BORROWER HEREBY WAIVES, RELEASES AND AGREES NOT TO SUE UPON ANY CLAIM FOR ANY SUCH DAMAGES, WHETHER SUCH CLAIM PRESENTLY EXISTS OR ARISES HEREAFTER AND WHETHER OR NOT SUCH CLAIM IS KNOWN OR SUSPECTED TO EXIST IN ITS FAVOR. 10.16. WITHHOLDING TAXES, ETC. (a) INDEMNITY. Without limiting the generality of any other provision of this Agreement or any other Loan Document, the Borrower hereby agrees to reimburse and indemnify the Lender Indemnified Parties, and each of them, and to hold each of them harmless from and against, any and all losses, liabilities, claims, damages, expenses, obligations, penalties, actions, judgments, suits, costs or disbursements of any kind or nature whatsoever (including, without limitation, (x) the fees and disbursements of outside counsel for such Lender Indemnified Party in connection with any investigative, administrative or judicial proceeding commenced or threatened, whether or not such Lender Indemnified Party shall be designated a party thereto, and (y) any present or future taxes, levies, imposts, deductions, charges or withholdings, and any liability arising therefrom or with respect thereto, including without limitation penalties, interest and expenses) that may at any time be imposed on, asserted against or incurred by such Lender Indemnified Party as a result of, or arising out of, or in any way related to or by reason of, payments by the Issuing Bank on any Letter of Credit or the obligation of the Issuing Bank to make any such payments. (b) WITHHOLDING TAX FORMS, ETC. Without limiting the generality of Section 10.16(a), the Borrower assumes full responsibility for assuring that payments on any Letter of Credit, and the obligation of the Issuing Bank to make such payments, comply with all present and future Laws relating to taxation, including all withholding obligations under such Laws. Without limiting the generality of the foregoing, the Borrower shall (i) procure from each of the initial beneficiaries of the Letters of Credit (who will also be the initial holders of the ICV Notes) U.S. Internal Revenue Service Forms 1001 and W-8 demonstrating exemption from United States withholding taxes with respect to payments under the ICV Notes, and provide copies of such forms to the Issuing Bank, and (ii) use its best efforts to procure from any successor beneficiaries of any Letter of Credit from time to time such forms (and any other or successor forms prescribed by applicable Law from time to time relating to potential withholding obligations with respect to payments under the ICV Notes) demonstrating exemption from United States withholding taxes with respect to payments under the ICV Notes, and provide copies of the such forms to the Issuing Bank. 10.17. DEFEASANCE OF CERTAIN COVENANTS. In the event that any of the events described in clause (i) or (ii) of Section 3.13 hereof shall occur, and the Borrower prepays the Letter of Credit Unreimbursed Draws in full and provides cash collateral for all outstanding Letters of Credit in accordance with Section 3.07 hereof, then, notwithstanding any other provision of this Agreement to the contrary, from and after the date the foregoing conditions are satisfied and so long as Section 4.15 of the Senior Note Indenture shall be in force, the Defeased Covenants shall not restrict any Subsidiary of the -61- 320 Borrower from taking any action referred to in clause (a), (b), (c) or (d) of Section 4.15 of the Senior Note Indenture, to the extent that application of the Defeased Covenants to restrict such action would violate Section 4.15 of the Senior Note Indenture. As used herein, "Defeased Covenants" shall mean the covenants set forth in Article VII hereof, other than Section 7.01 hereof. [Remainder of page intentionally left blank] -62- 321 IN WITNESS WHEREOF, the parties hereto, by their officers thereunto duly authorized, have executed and delivered this Agreement as of the date first above written. PRIMARK CORPORATION By /s/ STEPHEN H. CURRAN ------------------------------------------------- Stephen H. Curran Senior Vice President and Chief Financial Officer Address for Notices: Primark Corporation 1000 Winter Street, Suite 4300N Waltham, MA 02154 Attn: Stephen H. Curran, Senior Vice President and Chief Financial Officer Telephone: 617-487-2140 Facsimile: 617-890-6129 -63- 322 MELLON BANK, N.A., individually and as Agent By /s/ R. JANE WESTRICH -------------------------------------- R. Jane Westrich Vice President Commitment Percentage: 100% Address for Notices: Mellon Bank, N.A. Trade Banking Operations Three Mellon Bank Center, Room 2329 Pittsburgh, PA 15259-0110 Attn: Standby Letter of Credit Unit Telephone: 412-234-9495 Facsimile: 412-234-2733 With copies to: Mellon Bank, N.A. Loan Administration Three Mellon Bank Center Room 153-2332 Pittsburgh, PA 15259-0003 Attn: Terpsie Katsafanas Telephone: 412-234-4769 Facsimile: 412-236-2028 and to: Mellon Bank, N.A. One Boston Place, 6th Floor Boston, MA 02108 Attn: R. Jane Westrich, Vice President Telephone: 617-722-7969 Facsimile: 617-722-3516 -64- 323 ANNEX A TO NOTE BACKUP AGREEMENT DEFINITIONS; CONSTRUCTION 1.01. CERTAIN DEFINITIONS. In addition to other words and terms defined elsewhere in this Agreement, as used in this Agreement the following words and terms defined have the meanings given them below, unless the context of this Agreement otherwise clearly requires. "Adjusted Acquisition Consideration" in connection with an acquisition of a type referred to in clause (y) or (z) of Section 7.08 hereof by the Borrower or a Subsidiary of the Borrower means the amount, not less than zero, equal to, without duplication, the sum of: (a) the gross consideration paid or payable by the Borrower and its Subsidiaries in connection with such acquisition (including, without limitation, the purchase price therefor and transaction expenses), with non-cash consideration valued at its Fair Market Value on the closing date of the acquisition; provided, that for purposes of this clause (a) (i) the value of consideration in the form of Shares of Capital Stock of the Borrower or options or warrants therefor shall be deemed zero, and (ii) the value of consideration in the form of Indebtedness or other deferred payment obligations of the Borrower or its Subsidiaries (exclusive of Indebtedness or other deferred payment obligations payable and paid exclusively in Shares of Capital Stock of the Borrower or options or warrants therefor) shall be deemed the maximum aggregate amount of all payments which in any circumstances may be required thereunder, as determined at the time such Indebtedness or other deferred payment obligation is incurred (except that, for purposes of this clause (ii), interest on Indebtedness accruing after such determination date at a market rate shall be excluded from such maximum aggregate amount), plus (b) the aggregate Indebtedness and Guarantee Equivalents assumed or incurred, directly or indirectly, by the Borrower or any Subsidiary of the Borrower in connection with such acquisition (including, in the case of an acquisition of any or all of the Shares of Capital Stock or other equity interests of a Person, the aggregate Indebtedness and Guarantee Equivalents of such Person), exclusive of Indebtedness and Guarantee Equivalents of the Person being acquired constituting current accounts payable of such Person on normal trade terms to trade creditors arising out of purchases of goods or services in the ordinary course of business and not incurred in contemplation of such acquisition, minus (c) the aggregate cash and Cash Equivalent Investments (valued at the lower of cost or market) acquired by the Borrower and its Subsidiaries in such acquisition (including, in the case of an acquisition of all, but not less than all, of the Shares of Capital Stock or other equity interests of a Person, the aggregate cash and Cash Equivalent Investments of such Person, it being understood that in the event that the Borrower and its Subsidiaries acquire less than all of the Shares of Capital Stock or other equity interests of a Person, no part of the cash or Cash Equivalent Investments of such Person shall be deemed within the scope of this clause (c)); provided, that in the event that the Borrower and its Subsidiaries acquire all of the Shares of Capital Stock or other equity interests of a Person, the cash and Cash Equivalent Investments of such Person shall be deemed within the scope of this clause (c) only in the event that the relevant A-1 324 acquisition agreement requires the amount of cash and Cash Equivalent Investments of such Person to be determined at the closing date of the acquisition and provides for an adjustment to the purchase price based on such amount. "Advance" shall mean any loan, advance or other extension of credit, direct or indirect. "Affected Lender" shall have the meaning set forth in Section 3.09(e) hereof. "Affiliate" of a Person shall mean any Person which directly or indirectly controls, or is controlled by, or is under common control with, such Person. For purposes of the preceding sentence, "control" of a Person shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by contract or otherwise, and in any case shall include, without limitation, (a) being a director or officer (or a Person having powers analogous to those of a corporate director or officer) of such Person, or of a Person that directly or indirectly controls such Person, (b) having direct or indirect ownership (beneficially or of record) of, or direct or indirect power to vote, 30% or more of the outstanding Shares of Capital Stock of any class of such Person having ordinary voting power for the election of directors (or in the case of a Person that is not a Corporation, 30% or more of any class of equity interest having voting or control power analogous to corporate common stock), and (b) being a general partner of such Person, or of a Person having direct or indirect control over a general partner of such Person. "Applicable Margin" shall have the meaning set forth in Section 3.09(b) hereof. "Assured Obligation" shall have the meaning given that term in the definition of "Guaranty Equivalent." "Base Rate" for any day shall mean the greater of (a) the Prime Rate for such day or (b) 0.50% plus the Federal Funds Effective Rate for such day, such interest rate to change automatically from time to time effective as of the effective date of each change in the Prime Rate or the Federal Funds Effective Rate. "Base Rate Option" shall have the meaning set forth in Section 3.09(a) hereof. "Base Rate Portion" of any part of the Letter of Credit Unreimbursed Draws shall mean at any time the portion, including the whole, of such part of the Letter of Credit Unreimbursed Draws bearing interest at such time (i) under the Base Rate Option or (ii) in accordance with Section 3.15(c)(ii) hereof. If no part of the Letter of Credit Unreimbursed Draws is specified, "Base Rate Portion" shall refer to the Base Rate Portion of all Letter of Credit Unreimbursed Draws outstanding at such time. "Borrower Pledge Agreement" shall mean the Pledge Agreement of approximately even date herewith between the Borrower and the Collateral Agent, as amended, modified or supplemented from time to time. "Broker-Dealer" shall mean a Person who is, or is registered as, a broker, dealer, municipal securities dealer, government securities broker or government securities dealer under the Securities Exchange Act of 1934, as amended, or under any state securities law, or who has a comparable status under any securities law of any other Governmental Authority. A-2 325 "Business Day" shall mean any day other than a Saturday, Sunday, public holiday under the laws of the Commonwealth of Pennsylvania or other day on which banking institutions are authorized or obligated to close in the city in which is located the Agent's Office. "Capital Expenditures" of any Person shall mean, for any period, all expenditures (whether paid in cash or accrued as liabilities during such period) of such Person during such period which would be classified as capital expenditures in accordance with GAAP (including, without limitation, expenditures for maintenance and repairs which are capitalized, and Capitalized Leases to the extent an asset is recorded in connection therewith in accordance with GAAP). "Capitalized Lease" shall mean at any time any lease which is, or is required under GAAP to be, capitalized on the balance sheet of the lessee at such time, and "Capitalized Lease Obligation" of any Person at any time shall mean the aggregate amount which is, or is required under GAAP to be, reported as a liability on the balance sheet of such Person at such time as lessee under a Capitalized Lease. "Capitalized Software" of any Person shall mean, for any period, all expenditures (whether paid in cash or accrued as liabilities during such period) of such Person which would be classified as capitalized software in accordance with GAAP. "Cash Equivalent Investments" shall have the meaning given that term in the Collateral Agency Agreement. "CERCLA" shall mean the Comprehensive Environmental Response, Compensation and Liability Act, as amended, and any successor statute of similar import, and regulations thereunder, in each case as in effect from time to time. "CERCLIS" shall mean the Comprehensive Environmental Response, Compensation and Liability Information System List, as the same may be amended from time to time. "Closing Date" shall have the meaning given that term in Section 3.01(a) hereof. "Code" means the Internal Revenue Code of 1986, as amended, and any successor statute of similar import, and regulations thereunder, in each case as in effect from time to time. References to sections of the Code shall be construed also to refer to any successor sections. "Collateral Agency Agreement" shall mean the Collateral Agency Agreement of approximately even date herewith between the Borrower, certain "Revolving Credit Parties," by Mellon Bank, N.A., as Revolving Credit Agent, certain "Term Loan Parties," by Mellon Bank, N.A., as Term Loan Agent, certain "Note Backup Parties," by Mellon Bank, N.A., as Note Backup Agent, and Mellon Bank, N.A., as Collateral Agent, as amended, modified or supplemented from time to time. "Collateral Agent" shall have the meaning given that term in the Collateral Agency Agreement. "Commitment Percentage" of a Lender at any time shall mean the Commitment Percentage for such Lender set forth below its name on the signature page hereof, subject to transfer to another Lender as provided in Section 10.14 hereof. A-3 326 "Consolidated Cash Interest Expense" for any period shall mean the total cash interest expense payable by the Borrower and its Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP. "Consolidated EBITDA" for any period shall mean the sum of (a) Consolidated Net Income for such period, (b) Consolidated Interest Expense for such period, (c) Consolidated Income Tax Expense for such period, (d) depreciation expense of the Borrower and its Subsidiaries for such period, and (e) amortization expense of the Borrower and its Subsidiaries for such period, minus the sum of (x) extraordinary gains (but not any losses) to the extent included in determining such Consolidated Net Income, and (y) equity earnings (but not any losses) of Affiliates of the Borrower to the extent included in determining Consolidated Net Income for such period, all as determined on a consolidated basis in accordance with GAAP. "Consolidated EBITDA Less Capital Expenditures" for any period shall mean Consolidated EBITDA for such period, minus the sum of Capital Expenditures of the Borrower and its Subsidiaries for such period and, without duplication of amounts included in Capital Expenditures, Capitalized Software of the Borrower and its Subsidiaries for such period, all as determined on a consolidated basis in accordance with GAAP. "Consolidated Fixed Charge Coverage Ratio" for any period shall mean the ratio of the Consolidated EBITDA Less Capital Expenditures for such period to the Consolidated Fixed Charges for such period. "Consolidated Fixed Charges" for any period shall mean the sum of (a) Consolidated Cash Interest Expense for such period, (b) principal payments made by the Borrower and its Subsidiaries during such period with respect to any outstanding Indebtedness (excluding (i) payments of Indebtedness under the Revolving Credit Agreement, (ii) prepayments made at the option of the Borrower of Indebtedness under the Term Loan Agreement, to the extent the amounts so prepaid are not otherwise due during such period, and (iii) payments of the Senior Notes at the scheduled maturity thereof), (c) the amount of Stock Payments made by the Borrower and its Subsidiaries during such period (excluding (i) Stock Payments made to the Borrower or its Subsidiaries, and (ii) Stock Payments made solely in Shares of Capital Stock (or warrants, options or rights therefor) of the Borrower) all as determined on a consolidated basis in accordance with GAAP. "Consolidated Funded Debt Ratio (Adjusted)" for any period shall mean the following ratio: (a) the amount, not less than zero, determined as of the last day of such period, equal to (i) Consolidated Funded Indebtedness, minus (ii) the amount, not less than zero, equal to (A) the amount of cash and Cash Equivalent Investments owned by the Borrower and its Subsidiaries, valued at the lower of cost or market, minus (B) $10,000,000, divided by (b) Consolidated EBITDA Less Capital Expenditures for such period. "Consolidated Funded Indebtedness" at any time shall mean Indebtedness (including the current portion thereof) of the Borrower and its Subsidiaries which as of such date would be classified in whole or in part as a long-term liability in accordance with GAAP, and in any event includes (a) Indebtedness under the Credit Facilities and the Senior Notes, (b) any Indebtedness of the Borrower and its Subsidiaries having a final maturity later than one year after the date of incurrence of such Indebtedness, (c) any Indebtedness, regardless of its term, of the Borrower and its Subsidiaries which is renewable or extendable by the obligor to a date later than one year A-4 327 after the date of incurrence of such Indebtedness, and (d) Indebtedness of TIMCO described in Section 7.03(j) hereof. "Consolidated Income Tax Expense" for any period shall mean the charges against income of the Borrower and its Subsidiaries for foreign, federal, state and local income taxes for such period, determined on a consolidated basis in accordance with GAAP. "Consolidated Interest Expense" for any period shall mean the total interest expense of the Borrower and its Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP. "Consolidated Net Income" for any period shall mean the net earnings (or loss) after taxes of the Borrower and its Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP; provided, that there shall be deducted therefrom (a) the income (but not any deficit) of any Person accrued prior to the date it becomes a Subsidiary or is merged into or consolidated with or is otherwise acquired by or combined with the Borrower or any Subsidiary in a business combination accounted for as a pooling of interests, including, in the case of a successor to the Borrower or any Subsidiary by consolidation or merger or transfer of assets, any earnings of the successor Corporation prior to such consolidation, merger or transfer of assets, (b) income (but not any loss) accounted for by the Borrower on the equity method resulting from an ownership interest in any Person, but the deduction for such equity income shall be reversed to the extent that during such period an amount not in excess of such income has been actually received by the Borrower or such Subsidiary in the form of cash dividends or similar cash distributions, (c) the undistributed earnings of any Subsidiary to the extent that the declaration or payment of dividends or similar distributions by such Subsidiary is restricted (whether such restriction arises by operation of Law, by agreement, by its certificate or articles of incorporation or by-laws (or other constituent documents), or otherwise), (d) any gain arising from the acquisition of any securities, or the extinguishment, under GAAP, of any Indebtedness, of the Borrower or any Subsidiary, and (e) income (but not any loss) from discontinued operations of the Borrower or any Subsidiary. "Consolidated Net Worth" at any time shall mean the total amount of common stockholders' equity and preferred stock of the Borrower and its consolidated Subsidiaries at such time, determined on a consolidated basis in accordance with GAAP; provided, that each item of the following types shall be deducted, to the extent such item is positive and is otherwise included therein: (a) any write-ups or other revaluation after the Closing Date in the book value of any asset owned by the Borrower or any of its consolidated Subsidiaries (other than write-ups resulting from the acquisition of assets of a business made within one year after such acquisition and accounted for by purchase accounting, and write-ups resulting from the valuation in the ordinary course of business of investment securities and inventory at the lower of cost or market), (b) all investments in and loans and Advances to (i) unconsolidated Subsidiaries of the Borrower, and (ii) Persons that are not Subsidiaries of the Borrower (other than Cash Equivalent Investments), (c) treasury stock, (d) assets attributable to interests held by Persons other than the Borrower and its Subsidiaries that are Wholly Owned Subsidiaries of the Borrower, (e) Disqualified Capital Stock of the Borrower or of any Subsidiary of the Borrower, and (f) the amount, whether positive or negative, of foreign currency translation adjustments to stockholders' equity of the Borrower and its Subsidiaries, all of the foregoing as determined in accordance with GAAP. A-5 328 "Consolidated Net Worth (Adjusted)" at any time shall mean Consolidated Net Worth at such time plus the lesser of (a) $50,000,000, or (b) the sum of (i) aggregate writeoffs of goodwill on or after January 1, 1997 resulting from an impairment loss pursuant to Statement of Financial Accounting Standards No. 121, made by the Borrower in accordance with GAAP, and (ii) aggregate writeoffs of the cost of computer software purchased in an acquisition of the Person which developed such software (or by acquisition of assets comprising a line of business of such Person which includes such software) on or after January 1, 1997, made pursuant to Statement of Financial Accounting Standards No. 86, provided that such writeoffs are made at the time of the related acquisition and are made by the Borrower in accordance with GAAP. "Contingent Indemnification Obligations" shall have the meaning given that term in the Collateral Agency Agreement. "Controlled Group Member" shall mean each trade or business (whether or not incorporated) which together with the Borrower or any Subsidiary of the Borrower is treated as a controlled group or single employer under Sections 4001(a)(14) or 4001(b)(1) of ERISA or Sections 414(b), (c), (m) or (o) of the Code. "Corporation" shall mean a corporation, limited liability company or business trust organized under the Laws of any state of the United States, a company limited by shares incorporated under the Laws of England and Wales, or any similar entity organized under the Laws of any other jurisdiction, the owners of which are not by operation of Law generally liable for the obligations of such entity. "Corresponding Source of Funds" shall mean, in the case of any Funding Segment of the Euro-Rate Portion, the proceeds of hypothetical receipts by a Notional Euro-Rate Funding Office or by a Lender through a Notional Euro-Rate Funding Office of one or more Dollar deposits in the interbank eurodollar market at the beginning of the Euro-Rate Funding Period corresponding to such Funding Segment having maturities approximately equal to such Euro-Rate Funding Period and in an aggregate amount approximately equal to such Lender's Pro Rata share of such Funding Segment. "Credit Facilities" shall mean the Revolving Credit Agreement, the Term Loan Agreement and the Note Backup Agreement. "Datastream" shall mean Datastream International Limited, a corporation incorporated under the Laws of England and Wales. "Disqualified Capital Stock" shall mean any Shares of Capital Stock that, other than solely at the option of the issuer thereof, by their terms (or by the terms of any security into which they are convertible or exchangeable) are, or upon the happening of an event or the passage of time would be, required to be redeemed or repurchased, in whole or in part, or have, or upon the happening of an event or the passage of time would have, a redemption or similar payment due on or prior to the Facilities Termination Date. "Dollar," "Dollars" and the symbol "$" shall mean lawful money of the United States of America. A-6 329 "Environmental Affiliate": a Person ("Y") shall be an "Environmental Affiliate" of another Person ("X"), if X has retained or assumed, or is otherwise liable (contingently or otherwise) for, any liability (contingent or other) of Y with respect to any Environmental Claim, whether such retention, assumption or liability on the part of X arises by agreement, by Law or otherwise. "Environmental Approvals" shall mean any Governmental Action pursuant to or required under any Environmental Law. "Environmental Claim" shall mean, with respect to any Person (the "specified Person"), any action, suit, proceeding, investigation, notice, claim, complaint, demand, request for information or other communication (written or oral) by any other Person (including but not limited to any Governmental Authority, citizens' group or present or former employee of the specified Person) alleging, asserting or claiming any actual or potential liability on the part of the specified Person for investigatory costs, cleanup costs, governmental response costs, natural resources damages, property damages, personal injuries, fines or penalties, arising out of, based on or resulting from (a) the presence, or release into the environment, of any Environmental Concern Materials at any location, whether or not owned by such Person, or (b) circumstances forming the basis of any violation or alleged violation of any Environmental Law. "Environmental Cleanup Site" shall mean any location which is listed or proposed for listing on the National Priorities List, on CERCLIS or on any similar state list of sites requiring investigation or cleanup, or which is the subject of any pending or threatened action, suit, proceeding or investigation related to or arising from any alleged violation of any Environmental Law. "Environmental Concern Materials" shall mean (a) any flammable substance, explosive, radioactive material, hazardous material, hazardous waste, toxic substance, solid waste, pollutant, contaminant or any related material, raw material, substance, product or by-product of any substance, as the foregoing terms are defined in, or any other substance regulated by, any Environmental Law (including but not limited to any "hazardous substance" as defined in CERCLA or any similar state Law), (b) any toxic chemical from or related to industrial, commercial or institutional activities, and (c) asbestos, gasoline, diesel fuel, motor oil, waste and used oil, heating oil and other petroleum products or compounds, polychlorinated biphenyls, radon and urea formaldehyde. "Environmental Law" shall mean any Law, whether now existing or subsequently enacted or amended, relating to (a) pollution or protection of the environment, including natural resources, (b) exposure of Persons, including but not limited to employees, to Environmental Concern Materials, (c) protection of the public health or welfare from the effects of products, by-products, wastes, emissions, discharges or releases of Environmental Concern Materials or (d) regulation of the manufacture, use or introduction into commerce of Environmental Concern Materials including their manufacture, formulation, packaging, labeling, distribution, transportation, handling, storage or disposal. Without limitation, "Environmental Law" shall also include any Environmental Approval and the terms and conditions thereof. "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as amended, and any successor statute of similar import, and regulations thereunder, in each case as in effect from time to time. References to sections of ERISA shall be construed also to refer to any successor sections. A-7 330 "Euro-Rate" for any day, as used herein, shall mean for each Funding Segment of the Euro-Rate Portion corresponding to a proposed or existing Euro-Rate Funding Period the rate per annum determined by the Agent by dividing (the resulting quotient to be rounded upward to the nearest 1/100 of 1%) (a) the rate of interest (which shall be the same for each day in such Euro-Rate Funding Period) determined in good faith by the Agent in accordance with its usual procedures (which determination shall be conclusive) to be the average of the rates per annum for deposits in Dollars offered to major money center banks in the London interbank market at approximately 11:00 a.m., London time, two London Business Days prior to the first day of such Euro-Rate Funding Period for delivery on the first day of such Euro-Rate Funding Period in amounts comparable to such Funding Segment and having maturities comparable to such Funding Period by (b) a number equal to 1.00 minus the Euro-Rate Reserve Percentage. "Euro-Rate Funding Period" shall have the meaning set forth in Section 3.09(c) hereof. "Euro-Rate Option" shall have the meaning set forth in Section 3.09(a) hereof. "Euro-Rate Portion" of any part of the Letter of Credit Unreimbursed Draws shall mean at any time the portion, including the whole, of such part of the Letter of Credit Unreimbursed Draws bearing interest at any time under the Euro-Rate Option or at a rate calculated by reference to the Euro-Rate under Section 3.15(c)(i) hereof. If no part of the Letter of Credit Unreimbursed Draws is specified, "Euro-Rate Portion" shall refer to the Euro-Rate Portion of all Letter of Credit Unreimbursed Draws outstanding at such time. "Euro-Rate Reserve Percentage" for any day shall mean the percentage (expressed as a decimal, rounded upward to the nearest 1/100 of 1%), as determined in good faith by the Agent (which determination shall be conclusive), which is in effect on such day as prescribed by the Board of Governors of the Federal Reserve System (or any successor) representing the maximum reserve requirement (including, without limitation, supplemental, marginal and emergency reserve requirements) with respect to eurocurrency funding (currently referred to as "Eurocurrency liabilities") of a member bank in such System. The Euro-Rate shall be adjusted automatically as of the effective date of each change in the Euro-Rate Reserve Percentage. The Euro-Rate Option shall be calculated in accordance with the foregoing whether or not any Lender is actually required to hold reserves in connection with its eurocurrency funding or, if required to hold such reserves, is required to hold reserves at the "Euro-Rate Reserve Percentage" as herein defined. "Event of Default" shall mean any of the Events of Default described in Section 8.01 hereof. "Facilities Termination Date" shall mean the later to occur of the Revolving Credit Maturity Date, the Term Loan Maturity Date and the Note Backup Final Expiration Date. "Fair Market Value" shall mean, with respect to any asset, the sale value that would be obtained in an arm's length transaction between an informed and willing seller under no compulsion to sell and an informed and willing buyer. "Federal Funds Effective Rate" for any day shall mean the rate per annum (rounded upward to the nearest 1/100 of 1%) determined by the Agent (which determination shall be conclusive) to be the rate per annum announced by the Federal Reserve Bank of New York (or A-8 331 any successor) as being the weighted average of the rates on overnight Federal funds transactions arranged by Federal funds brokers on the previous trading day, as computed and announced by such Federal Reserve Bank (or any successor) in substantially the same manner as such Federal Reserve Bank computes and announces the weighted average it refers to as the "Federal Funds Effective Rate" as of the date of this Agreement; provided, that if such Federal Reserve Bank (or its successor) does not so announce such rate for such previous trading day, the "Federal Funds Effective Rate" shall be the average rate charged to Mellon Bank, N.A. on such previous trading day on such transactions as determined by the Agent. "Funding Periods" shall have the meaning set forth in Section 3.09(c) hereof. "Funding Segment" of the Euro-Rate Portion at any time shall mean the entire principal amount of such Portion to which at the time in question there is applicable a particular Funding Period beginning on a particular day and ending on a particular day. (By definition, each such Portion is at all times composed of an integral number of discrete Funding Segments and the sum of the principal amounts of all Funding Segments of any such Portion at any time equals the principal amount of such Portion at such time.) "GAAP" shall have the meaning given that term in Section 1.03 of this Annex A. "Governmental Action" shall have the meaning set forth in Section 4.04 hereof. "Governmental Authority" shall mean any government or political subdivision or any agency, authority, bureau, central bank, commission, department or instrumentality of either, or any court, tribunal, grand jury or arbitrator, in each case whether foreign or domestic. "Guaranty Equivalent": A Person (the "Deemed Guarantor") shall be deemed to subject to a Guaranty Equivalent in respect of any obligation (the "Assured Obligation") of another Person (the "Deemed Obligor") if the Deemed Guarantor directly or indirectly guarantees, becomes surety for, endorses, assumes, agrees to indemnify the Deemed Obligor against, or otherwise agrees, becomes or remains liable (contingently or otherwise) for, such Assured Obligation, in whole or in part. Without limitation, a Guaranty Equivalent shall be deemed to exist if a Deemed Guarantor agrees, becomes or remains liable (contingently or otherwise), directly or indirectly, to do any of the following: (a) to purchase or assume, or to supply funds for the payment, purchase or satisfaction of, an Assured Obligation, (b) to make any loan, advance, capital contribution or other investment in, or to purchase or lease any property or services from, a Deemed Obligor (i) to maintain the solvency of the Deemed Obligor, (ii) to enable the Deemed Obligor to meet any other financial condition, (iii) to enable the Deemed Obligor to satisfy any Assured Obligation or to make any Stock Payment or any other payment, or (iv) to assure the holder of such Assured Obligation against loss, (c) to purchase or lease property or services from the Deemed Obligor regardless of the non-delivery of or failure to furnish of such property or services, (d) in a transaction having the characteristics of a take-or-pay or throughput contract or as described in paragraph 6 of FASB Statement of Financial Accounting Standards No. 47, or (e) in respect of any other transaction the effect of which is to assure the payment or performance (or payment of damages or other remedy in the event of nonpayment or nonperformance) in whole or in part of any Assured Obligation. "ICV" shall mean ICV Limited, a Corporation incorporated under the Laws of England and Wales. A-9 332 "ICV Notes" shall have the meaning given that term in Section 7.03(c) hereof. "Indebtedness" of a Person shall mean the following: (a) all obligations on account of money borrowed by, or credit extended to or on behalf of, or for or on account of deposits with or advances to, such Person; (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments; (c) all obligations of such Person for the deferred purchase price of property or services; (d) all obligations secured by a Lien on property owned by such Person (whether or not assumed), and all obligations of such Person under Capitalized Leases (without regard to any limitation of the rights and remedies of the holder of such Lien or the lessor under such Capitalized Lease to repossession or sale of such property); (e) the stated amount of all letters of credit issued for the account of such Person and, without duplication, the unreimbursed amount of all drafts drawn thereunder, and all other obligations of such Person associated with such letters of credit or draws thereon; (f) all obligations of such Person in respect of acceptances or similar obligations issued for the account of such Person; (g) all obligations of such Person under a product financing or similar arrangement described in paragraph 8 of FASB Statement of Accounting Standards No. 49 or any similar requirement of GAAP; (h) all obligations of such Person under any interest rate or currency swap, cap, floor, collar, future, forward or option agreement, or other interest rate or currency protection agreement; and (i) the maximum fixed repurchase price of any Disqualified Capital Stock of such Person. "Interest Rate Hedging Agreement" shall mean an interest rate swap, cap or collar agreement. "Issuing Bank" shall mean Mellon Bank, N.A. "Law" shall mean any law (including common law), constitution, statute, treaty, convention, regulation, rule, ordinance, order, injunction, writ, decree or award of any Governmental Authority. "Lender" shall mean any of the Lenders listed on the signature pages hereof, subject to the provisions of Section 10.14 hereof pertaining to Persons becoming or ceasing to be Lenders. "Lender" shall in any event include the Issuing Bank. "Lender Indemnified Parties" shall have the meaning given that term in Section 10.06(c) hereof. "Lender Parties" shall mean the Lenders, the Issuing Bank and the Agent. "Letter of Credit" shall mean any letter of credit outstanding under this Agreement from time to time (and is synonymous with the term "Note Backup LOC" defined in the Collateral Agency Agreement). "Letter of Credit Collateral Account" shall mean the "Note Backup LOC Collateral Account" as defined in the Collateral Agency Agreement. "Letter of Credit Commitment" shall have the meaning given that term in Section 3.01(a) hereof. "Letter of Credit Commitment Termination Date" shall have the meaning given that term in Section 3.01(a) hereof. A-10 333 "Letter of Credit Exposure" shall mean the "Note Backup LOC Exposure" as defined in the Collateral Agency Agreement. "Letter of Credit Facing Fee" shall have the meaning given that term in Section 3.01(d) hereof. "Letter of Credit Fee" shall have the meaning given that term in Section 3.01(c) hereof. "Letter of Credit Fee Rate" shall have the meaning given that term in Section 3.01(c) hereof. "Letter of Credit Participating Interest" shall have the meaning given that term in Section 3.03(a) hereof. "Letter of Credit Reimbursement Obligation" with respect to a Letter of Credit means the obligation of the Borrower to reimburse the Issuing Bank for Letter of Credit Unreimbursed Draws, together with interest thereon. "Letter of Credit Undrawn Availability" shall mean the "Note Backup LOC Undrawn Availability" as defined in the Collateral Agency Agreement. "Letter of Credit Unreimbursed Draws" shall mean "Note Backup LOC Unreimbursed Draws" as defined in the Collateral Agency Agreement. "Lien" shall mean any mortgage, deed of trust, pledge, lien, security interest, charge or other encumbrance or security arrangement of any nature whatsoever, including but not limited to any conditional sale or title retention arrangement, and any assignment, deposit arrangement or lease intended as, or having the effect of, security. "Loan Documents" shall mean this Agreement, the Transfer Supplements, the Letters of Credit, the Shared Security Documents and the Origination Fee Letter. "Loan Obligations" shall mean the "Note Backup Obligations" as defined in the Collateral Agency Agreement. "London Business Day" shall mean a day for dealing in deposits in Dollars by and among banks in the London interbank market and which is a Business Day. "Material Adverse Effect" shall mean: (a) a material adverse effect on the business, operations, condition (financial or otherwise) or prospects of the Borrower and its Subsidiaries, taken as a whole, (b) a material adverse effect on the ability of the Borrower to perform or comply with any of the terms and conditions of any Loan Document, or (c) an adverse effect on the legality, validity, binding effect, enforceability or admissibility into evidence of any Loan Document, or the ability of the Collateral Agent or any Lender Party to enforce any rights or remedies under or in connection with any Loan Document. "Multiemployer Plan" shall mean any employee benefit plan which is a "multiemployer plan" within the meaning of Section 4001(a)(3) of ERISA and to which the Borrower, any A-11 334 Subsidiary of the Borrower or any other Controlled Group Member has or had an obligation to contribute. "Note Backup Agreement" shall mean this Note Backup Agreement as amended, modified or supplemented from time to time (and is synonymous with references to "this Agreement" herein). "Note Backup Final Expiration Date" shall mean November 8, 2002. "Notional Euro-Rate Funding Office" shall have the meaning given to that term in Section 3.18(a) hereof. "Obligations" shall have the meaning given that term in the Collateral Agency Agreement. "Office," when used in connection with the Agent, shall mean its office located at One Mellon Bank Center, Pittsburgh, Pennsylvania 15258, or at such other office or offices of the Agent or any branch, subsidiary or affiliate thereof as may be designated in writing from time to time by the Agent to the Borrower. "Option" shall mean the Base Rate Option or the Euro-Rate Option. "Origination Fee Letter" shall have the meaning given that term in Section 5.01(s) hereof. "Participants" shall have the meaning set forth in Section 10.14(b) hereof. "PBGC" means the Pension Benefit Guaranty Corporation established under Title IV of ERISA or any other governmental agency, department or instrumentality succeeding to the functions of said corporation. "Pension-Related Event" shall mean any of the following events or conditions: (a) Any action is taken by any Person (i) to terminate, or which would result in the termination of, a Plan pursuant to the distress termination provisions of Section 4041(c) of ERISA or (ii) to have a trustee appointed for a Plan pursuant to Section 4042 of ERISA; (b) PBGC notifies any Person of its determination that an event described in Section 4042 of ERISA has occurred with respect to a Plan, that a Plan should be terminated, or that a trustee should be appointed for a Plan; (c) Any Reportable Event occurs with respect to a Plan; (d) Any action (other than becoming obligated to contribute to a Multiemployer Plan) occurs or is taken which could result in the Borrower, any Subsidiary of the Borrower or any Controlled Group Member becoming subject to liability for a complete or partial withdrawal by any Person from a Multiemployer Plan (including, without limitation, seller liability incurred under Section 4204(a)(2) of ERISA), or the Borrower, any Subsidiary of the Borrower or any Controlled Group Member receives from any A-12 335 Multiemployer Plan a notice or demand for payment on account of any such alleged or asserted liability; (e) (i) There occurs any failure to meet the minimum funding standard under Section 302 of ERISA or Section 412 of the Code with respect to a Plan, or any tax return is filed showing any tax payable under Section 4971(a) of the Code with respect to any such failure, or the Borrower, any Subsidiary of the Borrower or any Controlled Group Member receives a notice of deficiency from the Internal Revenue Service with respect to any alleged or asserted such failure, (ii) any request is made by any Person for a variance from the minimum funding standard, or an extension of the period for amortizing unfunded liabilities, with respect to a Plan, or (iii) the Borrower, any Subsidiary of the Borrower or any Controlled Group Member fails to pay the PBGC premium with respect to a Plan when due and it remains unpaid for more than 30 days thereafter; or (f) There occurs any "prohibited transaction" within the meaning of Section 406 of ERISA or Section 4975 of the Code involving a Plan. "Permitted Liens" shall have the meaning given that term in Section 7.02 hereof. "Permitted Mergers" shall have the meaning given that term in Section 7.08 hereof. "Person" shall mean an individual, Corporation, partnership, trust, limited liability company, unincorporated association, joint venture, joint-stock company, Governmental Authority or any other entity. "Plan" shall mean (a) any employee pension benefit plan within the meaning of Section 3(2) of ERISA covered by Title IV of ERISA by reason of Section 4021 of ERISA, of which the Borrower, any Subsidiary of the Borrower or any Controlled Group Member is or has been within the preceding five years a "contributing sponsor" within the meaning of Section 4001(a)(13) of ERISA, or which is or has been within the preceding five years maintained for employees of the Borrower, any Subsidiary of the Borrower or any Controlled Group Member and (b) any employee pension benefit plan within the meaning of Section 3(2) of ERISA which is subject to Title I of ERISA by reason of Section 4 of ERISA and is subject to the minimum funding requirements of Section 302 of ERISA or Section 412 of the Code, of which the Borrower, any Subsidiary of the Borrower or any Controlled Group Member is or has been within the preceding five years an employer liable for contributions within the meaning of Section 302(c)(11) of ERISA or Section 412(c)(11) of the Code, or which is or has been within the preceding five years maintained for employees of the Borrower, any Subsidiary of the Borrower or any Controlled Group Member. "Portion" shall mean the Prime Rate Portion or the Euro-Rate Portion. "Postretirement Benefits" of a Person shall mean any benefits, other than retirement income, provided by such Person to retired employees, or to their spouses, dependents or beneficiaries, including, without limitation, group medical insurance or benefits, or group life insurance or death benefits. "Postretirement Benefit Obligation" of a Person shall mean that portion of the actuarial present value of all Postretirement Benefits expected to be provided by such Person which is A-13 336 attributable to employees' service rendered to the date of determination (assuming that such liability accrues ratably over an employee's working life to the earlier of his date of retirement or the date on which the employee would first become eligible for full benefits), reduced by the fair market value as of the date of determination of any assets which are segregated from the assets of such Person and which have been restricted so that they cannot be used for any purpose other than to provide Postretirement Benefits or to defray related expenses. "Potential Default" shall mean any event or condition which with notice, passage of time or a determination by the Agent or the Lenders, or any combination of the foregoing, would constitute an Event of Default. "Primark Economics" shall mean Primark Decision Economics, Inc. "Prime Rate" as used herein, shall mean the interest rate per annum announced from time to time by Mellon Bank, N.A. as its prime rate, such rate to change automatically effective as of the effectiveness of each announced change in such prime rate. "Pro Rata" shall mean from or to each Lender in proportion to such Lender's applicable Commitment Percentage. "Purchasing Lender" shall have the meaning set forth in Section 10.14(c) hereof. "Register" shall have the meaning set forth in Section 10.14(d) hereof. "Regular Monthly Payment Date" shall mean the last Business Day of each month after the Closing Date. "Reimbursement Target Date" shall have the meaning given that term in Section 3.04(a) hereof. "Regular Quarterly Payment Date" shall mean the last Business Day of each September, December, March and June after the Closing Date. "Reportable Event" means (i) a reportable event described in Section 4043 of ERISA and regulations thereunder, (ii) a withdrawal by a substantial employer from a Plan to which more than one employer contributes, as referred to in Section 4063(b) of ERISA, (iii) a cessation of operations at a facility causing more than twenty percent (20%) of Plan participants to be separated from employment, as referred to in Section 4062(e) of ERISA, or (iv) a failure to make a required installment or other payment with respect to a Plan when due in accordance with Section 412 of the Code or Section 302 of ERISA which causes the total unpaid balance of missed installments and payments (including unpaid interest) to exceed $250,000. "Required Lenders" shall mean Lenders holding in the aggregate 51% of the Commitment Percentages. "Responsible Officer" of a Person shall mean its Chairman of the Board, President, Chief Financial Officer or Treasurer. "Revolving Credit Agreement" shall mean the Revolving Credit Agreement of even date herewith by and among the Borrower, the lenders parties thereto from time to time, the issuing A-14 337 banks referred to therein, and Mellon Bank, N.A., as Agent, as the same may be amended, modified, supplemented, renewed or refinanced from time to time in accordance with this Agreement. "Revolving Credit Maturity Date" shall mean the final scheduled maturity of Indebtedness under the Revolving Credit Agreement. "Secured Parties" shall have the meaning given that term in the Collateral Agency Agreement. "Senior Note Indenture" shall mean the Indenture dated as of October 18, 1993 between the Borrower and The First National Bank of Boston, as Trustee, relating to the Senior Notes, as constituted on the Closing Date. "Senior Notes" shall mean the Borrower's 8 3/4% Senior Notes Due 2000. "Shared Collateral" shall have the meaning given that term in the Collateral Agency Agreement. "Shared Collateral Account" shall have the meaning given that term in the Collateral Agency Agreement. "Shared Security Documents" shall have the meaning given that term in the Collateral Agency Agreement. "Shares of Capital Stock" shall mean shares of capital stock of, membership interest in, beneficial interest in, or similar ownership interest in, a Corporation organized under the Laws of any state of the United States or any other jurisdiction, including, without limitation, in the case of Corporations incorporated under the Laws of England and Wales, equity share capital, ordinary shares and loan stock. "Significant Subsidiary" of Borrower shall mean any Subsidiary of the Borrower (a) which is TASC, Datastream, Disclosure Incorporated, or a Subsidiary of any of the foregoing, (b) which, together with its Subsidiaries, has assets (determined on a consolidated basis) greater than or equal to 5% of the total assets of the Borrower and its Subsidiaries (determined on a consolidated basis) as of the end of the most recently completed fiscal year for which financial information is available, or (c) which, together with its Subsidiaries, has revenues (determined on a consolidated basis) greater than or equal to 5% of the total revenues of the Borrower and its Subsidiaries (determined on a consolidated basis) for the most recent four fiscal quarters for which financial information is available. "Solvent" means: (a) with respect to any Person organized under the Laws of any state of the United States or subject to the U.S. Bankruptcy Code of 1978, as amended, the Uniform Fraudulent Conveyance Act as enacted by any state, the Uniform Fraudulent Transfer Act as enacted by any state or any other applicable U.S. Law pertaining to fraudulent conveyances, fraudulent transfers or preferences at any time, that at such time (i) the sum of the debts and liabilities (including, without limitation, contingent liabilities) of such Person is not greater than all of the assets of such Person at a fair valuation, (ii) the A-15 338 present fair salable value of the assets of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become absolute and matured, (iii) such Person has not incurred, will not incur, does not intend to incur, and does not believe that it will incur, debts or liabilities (including, without limitation, contingent liabilities) beyond such person's ability to pay as such debts and liabilities mature, (iv) such Person is not engaged in, and is not about to engage in, a business or a transaction for which such person's property constitutes or would constitute unreasonably small capital (as such term is used in any Law referred to in the following clause (v)), and (v) such Person is not otherwise insolvent as defined in, or otherwise in a condition which could in any circumstances then or subsequently render any transfer, conveyance, obligation or act then made, incurred or performed by it avoidable or fraudulent pursuant to, any Law that may be applicable to such Person pertaining to bankruptcy, insolvency or creditors' rights (including but not limited to the Bankruptcy Code of 1978, as amended, and, to the extent applicable to such Person, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act, or any other applicable Law pertaining to fraudulent conveyances or fraudulent transfers or preferences); (b) With respect to any Person organized under the Laws of England and Wales or subject to any English insolvency law at any time, that at such time such Person is not insolvent, or unable to pay its debts and is not deemed by an English court to be unable to pay its debts within the meaning of Section 123 of the United Kingdom Insolvency Act of 1986; and (c) With respect to any other Person, that at such time such Person is not insolvent or unable to pay its debts as they come due as contemplated by any applicable insolvency, bankruptcy or similar Law. "Standard Notice" shall mean an irrevocable notice provided to the Agent on a Business Day which is (a) At least one Business Day in advance in the case of selection of, conversion to or renewal of the Base Rate Option or prepayment of any Base Rate Portion; and (b) At least three London Business Days in advance in the case of selection of the Euro-Rate Option or prepayment of any Euro-Rate Portion. Standard Notice must be provided no later than 10:00 a.m., Pittsburgh time, on the last day permitted for such notice. "Stock Payment" by any Person shall mean any dividend, distribution or payment of any nature (whether in cash, securities, or other property) on account of or in respect of any Shares of the Capital Stock (or warrants, options or rights therefor) of such Person, including but not limited to any payment on account of the purchase, redemption, retirement, defeasance or acquisition of any Shares of the Capital Stock (or warrants, options or rights therefor) of such Person, in each case regardless of whether required by the terms of such capital stock (or warrants, options or rights) or any other agreement or instrument. "Subsidiary" of a Person at any time shall mean any Corporation of which a majority (by number of shares or number of votes) of the outstanding Shares of Capital Stock of any class is A-16 339 at such time owned directly or indirectly, beneficially or of record, by such Person or one or more Subsidiaries of such Person, and any partnership, trust or other Person of which a majority of any class of outstanding equity interest is at such time owned directly or indirectly, beneficially or of record, by such Person or one or more Subsidiaries of such Person. For the avoidance of doubt, as used in the preceding sentence "majority" means more than half (and not precisely half). "Substantially Owned Subsidiary" of a Person at any time shall mean any Corporation of which 80% or more of the outstanding Shares of Capital Stock of each class are at such time beneficially owned directly or indirectly by such Person (both on the basis of outstanding shares and on a fully diluted basis). "Swap Agreement" shall have the meaning given that term in the Collateral Agency Agreement. "TASC" shall mean TASC, Inc., a Massachusetts Corporation. "Taxes" shall have the meaning set forth in Section 3.17 hereof. "Term Loan Agreement" shall mean the Term Loan Agreement of even date herewith by and among the Borrower, the lenders parties thereto from time to time, and Mellon Bank, N.A., as Agent, as the same may be amended, modified or supplemented from time to time in accordance with this Agreement (but not any refinancing or renewal thereof). "Term Loan Maturity Date" shall mean the final scheduled maturity of Indebtedness under the Term Loan Agreement. "TIMCO" shall mean Triad International Maintenance Corporation, a Delaware Corporation. "TIMCO Bond Order" means the Bond Order adopted by the Piedmont Triad Airport Authority on October 31, 1989 with respect to the TIMCO Bonds, as such Bond Order may be amended, supplemented or otherwise modified from time to time in accordance with this Agreement. "TIMCO Bonds" means the $13,800,000 original aggregate principal amount of Special Facility Revenue Bonds (Triad International Maintenance Corporation Project), Series 1989 issued by the Piedmont Triad Airport Authority pursuant to the TIMCO Bond Order. "TIMCO Bonds Letter of Credit" has the meaning given that term in Section 7.03(j) hereof. "TIMCO Lease" shall mean the Lease Agreement, dated as of November 1, 1989, between the Piedmont Triad Airport Authority, as lessor, and TIMCO, as lessee, covering certain property situate at the Piedmont Triad International Airport in Guilford County, North Carolina, as such Lease Agreement may be amended, supplemented or otherwise modified from time to time in accordance with this Agreement. "Transfer Effective Date" shall have the meaning set forth in the applicable Transfer Supplement. A-17 340 "Transfer Supplement" shall have the meaning set forth in Section 10.14(c) hereof. "Wholly Owned Subsidiary" of any Person means a Corporation that is a Subsidiary of such Person as to which all of the Shares of Capital Stock of each class (other than directors' qualifying shares that are required under applicable law) are at such time beneficially owned directly or indirectly by such Person (both on the basis of outstanding shares and on a fully diluted basis). "Wind-up" or "Winding-up" of a Person shall include the liquidation, administration, amalgamation, reconstruction, reorganization or dissolution of such Person and any equivalent or analogous procedure under the laws of any jurisdiction in which such Person is incorporated, domiciled, resident or carries on a business or has assets. "Worldscope Entities" shall mean Worldscope/Disclosure Partners, a Connecticut general partnership, Worldscope/Disclosure International Partners, an partnership organized under the laws of Ireland, Worldscope/Disclosure Incorporated LLC, a Connecticut limited liability company, and Worldscope/Disclosure India Pvt. Ltd., a Corporation organized under the laws of India, and each of their respective Subsidiaries from time to time. 1.02. CONSTRUCTION. In this Agreement and each other Loan Document, unless the context otherwise clearly requires, references to the plural include the singular, the singular the plural and the part the whole; "or" has the inclusive meaning represented by the phrase "and/or;" and the terms "property" and "assets" each includes all properties and assets of any kind or nature, tangible or intangible, real, personal or mixed, now existing or hereafter acquired. The words "hereof," "herein" and "hereunder" (and similar terms) in this Agreement or any other Loan Document refer to this Agreement or such other Loan Document, as the case may be, as a whole and not to any particular provision of this Agreement or such other Loan Document. The words "includes" and "including" (and similar terms) in this Agreement or any other Loan Document mean "includes without limitation" and "including without limitation," respectively (and similarly for similar terms). References in this Agreement or any other Loan Document to "determination" (and similar terms) by the Agent or by any Lender include good faith estimates by the Agent or by such Lender (in the case of quantitative determinations) and good faith beliefs by the Agent or by such Lender (in the case of qualitative determinations). No doctrine of construction of ambiguities in agreements or instruments against the interests of the party controlling the drafting thereof shall apply to this Agreement or any other Loan Document. The section and other headings contained in this Agreement and in each other Loan Document, and any tables of contents contained herein or therein, are for reference purposes only and shall not affect the construction or interpretation of this Agreement or such other Loan Document in any respect. Section, subsection, annex, exhibit and schedule references in this Agreement and in each other Loan Document are to this Agreement or such other Loan Document, as the case may be, unless otherwise specified. Each annex, exhibit and schedule to this Agreement or any other Loan Document constitutes part of this Agreement or such Loan Document, as the case may be. Each of the covenants, terms and provisions of this Agreement and the other Loan Documents is intended to have, and shall have, independent effect, and compliance with any particular covenant, term or provision shall not constitute compliance with any other covenant, term or provision. 1.03. ACCOUNTING PRINCIPLES. (a) GAAP. As used herein, "GAAP" shall mean generally accepted accounting principles in the United States, applied on a basis consistent with the principles used in preparing the A-18 341 Borrower's financial statements as of December 31, 1995, and for the fiscal year then ended, as referred to in Section 4.06 hereof. (b) ACCOUNTING AND FINANCIAL DETERMINATIONS, ETC. Except as otherwise provided in this Agreement, all computations and determinations as to accounting or financial matters shall be made, and all financial statements to be delivered pursuant to this Agreement shall be prepared, in accordance with GAAP (including principles of consolidation where appropriate), and all accounting or financial terms shall have the meanings ascribed to such terms by GAAP. (c) CHANGES. If and to the extent that the financial statements generally prepared by the Borrower apply accounting principles other than GAAP, all financial statements referred to in this Agreement or any other Loan Document shall be delivered in duplicate, one set based on the accounting principles then generally applied by the Borrower and one set based on GAAP. To the extent this Agreement or such other Loan Document requires financial statements to be accompanied by an opinion of independent accountants, each such set of financial statements shall be accompanied by such an opinion. 1.04. CERTAIN TERMINOLOGY AND PROVISIONS. This Agreement uses the defined terms "Lender," "Lender Indemnified Parties," "Lender Parties," "Loan Documents" and "Loan Obligations," even though extensions of credit to the Borrower hereunder take the form of issuance of Letters of Credit only, rather than loans. Such defined terms are used as a convenience to facilitate comparison of this Agreement with the Revolving Credit Agreement and the Term Loan Agreement. Such defined terms shall have the respective meanings given them in this Agreement, and the use of such defined terms shall not be construed to imply that any loans are contemplated under this Agreement. [End of Annex A] A-19 EX-10.18 12 PLEDGE AGREEMENT 1 Exhibit 10.18 THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER ANY STATE SECURITIES LAWS. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED, SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THESE SECURITIES UNDER THE ACT OR APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT ANY PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS. WITHOUT LIMITING THE FOREGOING ANY OF THESE SECURITIES ISSUED OTHER THAN TO A "US PERSON" WITHIN THE MEANING OF REGULATION S PROMULGATED UNDER THE ACT MAY NOT BE RE-SOLD TO A US PERSON PRIOR TO THE EXPIRATION OF THE 40-DAY RESTRICTED PERIOD AFTER THE DATE OF ORIGINAL ISSUANCE OF THESE SECURITIES. VARIABLE RATE UNSECURED LOAN NOTE DUE 2002 OF PRIMARK CORPORATION U.S.$ 24 October, 1996 Primark Corporation, a Michigan corporation (the "COMPANY"), with principal offices at 1000 Winter Street, Suite 4500, Waltham MA 02154, USA, for value received, hereby promises to pay to ______________, or his assigns, the sum of _____________________, United States Dollars (U.S. $_________) plus interest accrued pursuant to section 2.2 hereof from the date of this Note until the principal amount hereof and all interest accrued thereon is paid in full. The principal amount of this Note, and the interest accrued thereon, shall be payable on or before, 24 October, 2002 (the "MATURITY DATE"). The following is a statement of the rights of the holder of this Note and the conditions to which this Note is subject, and to which the holder hereof, by the acceptance of this Note, agrees: 1 RANKING AND DEFINITIONS 1.1 This Note is one of a series of five (5) Variable Rate Unsecured Loan Notes due 2002 (individually, a "NOTE"; collectively, the "NOTES"). The principal amount of all Notes shall aggregate up to U.S.$8,250,000. 1 2 1.2 "NOTEHOLDER", "HOLDER", or similar terms, when the context refers to a holder of this Note, shall mean any person who shall at the time be the registered holder of this Note. 1.3 In this Note, except as otherwise provided; (a) words importing the singular include the plural and vice versa; (b) words denoting gender include every gender; (c) Words denoting persons include any natural person, corporation or other entity; (d) references to statutory provisions shall be construed as references to those provisions as respectively amended or re-enacted (whether before or after the date hereof) from time to time and shall include any provisions of which they are re-enactments (whether with or without modifications) and any subordinate legislation or regulation made under such provisions. 2 PAYMENT OF PRINCIPAL AND INTEREST 2.1 The Company shall on the Maturity Date or on such earlier date as the outstanding principal on this Note shall become repayable in accordance with this Note, pay such principal to the Noteholder at the registered office of the Company, together with interest accrued thereon at the rate referred to in section 2.2 up to and including the date of repayment. 2.2 So long as outstanding principal remains unpaid under this Note, the Company shall pay to the Noteholder interest on the outstanding principal at the rate of LIBOR by quarterly instalments ("INTEREST PERIODS") in arrears on the first Business Day following 1 January, 1 April, 1 July and 1 October in each year, save that the first payment of interest shall be made on the first business day after 1 January, 1997 in respect of the period from 24 October, 1996 to 31 December, 1996 (both dates inclusive). Interest shall be deemed to accrue on the Notes from day to day. For the purpose of this section, "LIBOR" means, in relation to a particular interest period, the rate for deposits of US Dollars for a period equivalent to such period at or about 11 a.m. (New York City Time) on the second Business Day before the first day of such period as displayed in the Wall Street Journal, New York City edition provided that if on such date no such rate is so displayed, LIBOR for such period shall be the arithmetic mean (rounded upward if necessary to five decimal places) of the rates respectively quoted to the Company by two leading United States banks at the request of the Company as such banks' offered rate for deposits of US Dollars in an amount approximately equal to the amount in relation to which LIBOR is to be determined for a period equivalent to such period to prime banks in the London Interbank Market at or about 11 a.m. (New York City time) on the second Business Day before the first day of such interest period. "BUSINESS DAY" 2 3 means any day other than a Saturday, Sunday, or other day on which banks in New York City are authorised or required by law to close. 2.3 Any payment to be made hereunder will be after any withholding or deduction for or on account of any tax or levy or impost or charge or fee or duty of whatsoever nature (present or future) imposed or levied by any authority having power to tax such payment which the Company shall for the time being be required by any applicable law to withhold or deduct and the Company shall not be obliged to pay any additional amount to the Noteholders in respect of the tax or duty so withheld or deducted. 2.4 All payments made to the Noteholder under the Note shall be in US Dollars and shall be subject to all applicable laws and regulations from time to time. 3 REPAYMENT, PURCHASE AND CANCELLATION 3.1 Any Note repaid or purchased by the Company shall be cancelled and the Company shall not be entitled to reserve the same for reissuance or to re-issue the same. 3.2 Any partial repayment of this Note may be endorsed by the holder on the schedule attached hereto, or on continuation of such schedule attached to and made a part hereof. The lack of an endorsement or any endorsements made by the Noteholder on the schedule attached hereto shall not be conclusive of the remaining principal amount outstanding under the Note. 4 EVENTS OF DEFAULT 4.1 The outstanding principal of this Note together with any accrued interest shall become immediately due and repayable on the occurrence of any of the following events: (a) if default is made in the repayment on the due date of any outstanding principal outstanding on this Note or (for a period of 28 days or more) in the payment of any interest accrued thereon; (b) if default is made by the Company in the due performance or observance of any obligation (other than for the repayment outstanding principal on this Note or the payment of interest accrued thereon) contained herein and continues for 28 days or more after the date on which the Company receives written notice of the default; (c) the Company shall commence a voluntary Insolvency Proceeding seeking liquidation, reorganisation 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 take any corporate action to authorise any of the 3 4 foregoing: For the purposes of this section 4.1. "INSOLVENCY PROCEEDING" means (i) any case, action or proceeding before any court or other governmental authority relating to bankruptcy, reorganisation, insolvency, liquidation, receivership, dissolution, winding-up or relief of debtors, or (ii) any general assignment for the benefit of creditors, composition, marshalling of assets for creditors, or other similar arrangement in respect of its creditors, generally or any substantial portion of its creditors undertaken under U.S. federal, state, or foreign law; (d) an involuntary Insolvency Proceeding shall be commenced against the Company seeking liquidation, reorganisation 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 Insolvency Proceeding (if before a court or governmental authority) shall remain undismissed and unstayed for a period of 60 days; (e) an order for relief shall be entered against the Company under the U.S. federal bankruptcy laws; (f) if the letter of credit (the "LETTER OF CREDIT") issued for the benefit of the holder of this Note on the date hereof by Mellon Bank N.A. ("MELLON") shall no longer be or if Mellon or the Company asserts that the Letter of Credit shall no LONGER be valid, binding and enforceable for any reason other than in accordance with its terms; or (g) if this Note shall no longer be, or if the Company shall assert that this Note shall no longer be, legal, valid and binding for any reason other than in accordance with its terms. 4.2 Forthwith on becoming aware of any such event as is mentioned in section 4.1 or of any event which with the giving of notice, lapse of time or satisfaction of any other condition would constitute such an event, the Company shall give notice in writing thereof to the Noteholders. 5 NOTE REGISTER; REPLACEMENT NOTES 5.1 The Company shall at all times keep at its principal office an accurate register of the Notes (the "REGISTER") showing the numbers of Notes for the time being issued, the dates of issue, the dates and particulars of all transfers and repayments thereof and the names and addresses of the Noteholders and the persons deriving title under them. The Register may be closed for up to 3 days prior to each date for payment of interest and the date of final redemption. The Noteholders and any persons entitled to any of the Notes or any of them and any person authorised in writing by any of them shall be at liberty at all reasonable 4 5 times during office hours to inspect the Register and to take copies thereof and extracts therefrom or any part thereof. 5.2 Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of the Note, the Company will at its expense execute and deliver, in lieu thereof, a new Note in the unpaid principal amount of such lost, stolen, destroyed or mutilated Note, dated so that there will be no loss of interest on such Note. Any Note in lieu of which any such new Note has been so executed and delivered by the Company shall not be deemed to be an outstanding Note for any purpose. 6 TRANSFER 6.1 Except as required by law, the Company will recognise the registered holder of any Notes or his executors or administrators as the absolute owner thereof. The rights and obligations of the Company and the Noteholder shall be binding upon and benefit the successors, assigns, heirs, executors, administrators and transferees of the parties. 6.2 Subject as hereinafter provided, and to compliance with applicable securities laws, any holder of this Note will be entitled to transfer this Note in its entirety by an instrument in writing. No fraction of a Note may be transferred. This Note shall not be transferred by any Noteholder that is not a "US Person" (within the meaning of "Regulation S" promulgated under the Securities Act of 1933 as amended) to a "US Person" at any time during the 40-day period after the date of original issuance of this Note. 6.3 Every instrument of transfer must be delivered to the principal office of the Company for registration, accompanied by the original of this Note to be transferred and such other evidence as the Directors of the Company may require to prove the title of the transferor of his right to transfer the Notes and (if the instrument shall be executed by some other person on behalf of the transferor) the authority of that person so to do. 7 PROCEDURES FOR PAYMENT 7.1 Any principal, interest or other moneys repayable or payable hereunder on or in respect of the Note shall be paid by wire transfer to an account designated in writing by the Noteholder or to such person and such account as the Noteholder may in writing direct. 8 MODIFICATION OF RIGHTS 8.1 ANY PROVISION OF THIS NOTE MAY BE AMENDED, WAIVED OR MODIFIED UPON THE WRITTEN CONSENT OF THE COMPANY AND HOLDERS OF AT LEAST A MAJORITY OF THE THEN OUTSTANDING PRINCIPAL AMOUNTS OF THE NOTES: PROVIDED THAT ANY 5 6 AMENDMENT, WAIVER OR MODIFICATION AFFECTS ALL OF THE NOTES IN THE SAME MANNER. 8.2 Neither this Note or any term hereof may be amended, waived or modified orally but only by an instrument in writing executed by the Company and the Note holder. 9 NOTICES 9.1 Any notice or other document may be given or sent to the Company by sending the same by personal delivery, certified or registered air mail (return receipt requested), recognised international courier, or telecopy (confirmed by air mail), charges prepaid, addressed to the Company at its principal office. 9.2 Without prejudice to the provisions of section 6.1. any notice or other document may be given or sent to any Noteholder by sending the same by personal delivery, certified or registered airmail (return receipt requested), recognised international courier, or telecopy (confirmed by airmail), charges prepaid, addressed to such Noteholder, at the registered address. 9.3 Any notice shall be deemed to have been given upon delivery, if by personal delivery; 2 days after the date of posting if posted to an address within the same country; 7 days after the date of posting if posted abroad; 3 days after dispatch if sent by recognised international courier; and upon transmission, if sent by telecopy. 10 CHOICE OF LAWS; AND SUBMISSION TO JURISDICTION 10.1 This Note shall be construed and enforced in accordance with, and governed by, the internal laws of the State of New York, United States of America, excluding that body of law applicable to conflicts of law. 10.2 The Company irrevocably submits for all purposes of or in connection with the Notes to the non-exclusive jurisdiction of the state and federal courts in New York. 11 DOCUMENTARY TAXES 11.1 All stamp, documentary, registration or other like duties or taxes, including any penalties, additions, fines, surcharges or interest relating thereto, which are imposed or chargeable on or in connection with the Notes shall be paid by the Company provided nothing shall oblige the Company to bear or pay any stamp duty or stamp duty reserve tax or other duties or taxes on or arising by reason or in respect of any transfers or other dispositions of the Notes or any interest therein, except to the extent of any stamp duty or stamp duty reserve tax payable on any repurchase, repayment or cancellation of the Notes by the Company itself. 6 7 12 NOT NEGOTIABLE, NOT A SECURITY 12.1 NOTWITHSTANDING ANYTHING TO THE CONTRARY ELSEWHERE IN THIS NOTE, (A) THIS NOTE IS NOT NEGOTIABLE, (B) THIS NOTE IS NOT A SECURITY SUBJECT TO ARTICLE 8 OF THE UNIFORM COMMERCIAL CODE, AND (C) EACH SUCCESSOR, HEIR, EXECUTOR, ADMINISTRATOR, ASSIGNEE, TRANSFEREE, PLEDGEE, OR HOLDER OF THIS NOTE OR ANY INTEREST THEREIN (WHETHER OR NOT A REGISTERED HOLDER) SHALL TAKE THIS NOTE OR SUCH INTEREST THEREIN, AS THE CASE MAY BE, SUBJECT TO ALL DEFENCES, CLAIMS AND OFFSETS WHICH THE ISSUER WOULD HAVE AGAINST THE PREDECESSOR, ASSIGNOR, TRANSFEROR, PLEDGOR OR PREDECESSOR HOLDER (AND ANY PREDECESSOR), WHETHER OR NOT A REGISTERED HOLDER, REGARDLESS OF WHEN SUCH DEFENCE, CLAIM OR OFFSET ACCRUES AND REGARDLESS OF ANY NOTIFICATION TO THE COMPANY. 13 THE LETTER OF CREDIT 13.1 The initial registered holder of this Note is the beneficiary of an Irrevocable Letter of Credit, No _______ dated 24 October 1996, in the original stated amount of U.S. $_________, issued by Mellon Bank, N.A. (the "BANK") (such Irrevocable Letter of Credit being referred to herein as the "LETTER OF CREDIT"), which Letter of Credit is transferable (the original or any transferee beneficiary of such letter of Credit at any time being referred to herein as the "BENEFICIARY"). 13.2 The Beneficiary shall have the right, at any time and from time to time after the first anniversary of the date of original issuance of this Note, to make draws on the Letter of Credit (whether or not amounts hereunder are then due). Each such drawing shall be made in compliance with the conditions set forth in the Certificate (in the form attached as Annex A to the Letter of Credit) presented in connection with such drawing. Without limitation of the foregoing: (a) Each such drawing shall be for a Principal Drawing Amount (as defined in the Letter of Credit) which does not exceed the unpaid principal amount of this Note. The Principal Drawing Amount shall be an integral multiple of U.S.$________. The sum of the Principal Drawing Amount, plus the aggregate amount of all Principal Drawing Amounts previously or contemporaneously drawn under the Letter of Credit shall not exceed U.S.$________ (b) The Beneficiary may in its discretion include in such drawing an Interest Drawing Amount (as defined in the Letter of Credit) in an amount not to exceed the accrued and unpaid interest on the Principal Drawing Amount. The sum of such Interest Drawing Amount, plus the aggregate amount of all Interest Drawing Amounts previously or contemporaneously drawn under the Letter of Credit, shall not exceed 7 8 U.S.$__________. The Beneficiary shall not make a drawing for an interest Drawing Amount in an amount which exceeds accrued and unpaid interest on the Principal Drawing Amount at a rate (calculated on the basis of a year of 360 days and actual days elapsed) which for each day is equal to the lesser of 5.5% or the actual interest rate applicable to outstanding principal under this Note on such day. (c) The total amount of any such drawing shall equal the sum of such Principal Drawing Amount and such Interest Drawing Amount. 13.3 NOTWITHSTANDING ANYTHING TO THE CONTRARY ELSEWHERE IN THIS NOTE, EACH DRAWING PAID BY THE BANK UNDER THE LETTER OF CREDIT SHALL AUTOMATICALLY BE APPLIED TO AND REDUCE THE OBLIGATIONS OF THE COMPANY UNDER THIS NOTE BY THE AMOUNT PAID ON SUCH DRAWING. SUCH AMOUNT SHALL BE APPLIED TO UNPAID PRINCIPAL AND ACCRUED AND UNPAID INTEREST UNDER THIS NOTE IN ACCORDANCE WITH THE PROVISIONS OF THE RELATED CERTIFICATE. IF SUCH CERTIFICATE WAS COMPLETED IN ACCORDANCE WITH THE PROVISIONS HEREOF AND THEREOF; OTHERWISE, SUCH AMOUNT SHALL BE APPLIED FIRST TO UNPAID PRINCIPAL OF THIS NOTE, AND SHALL NOT BE APPLIED TO ACCRUED AND UNPAID INTEREST EXCEPT TO THE EXTENT THAT SUCH AMOUNT EXCEEDS THE UNPAID PRINCIPAL OF THIS NOTE. NO NOTATION OR ENDORSEMENT ON THIS NOTE SHALL BE NECESSARY IN CONNECTION WITH ANY SUCH APPLICATION. THE PROVISION OF THIS SECTION SHALL APPLY WHETHER OR NOT THE BENEFICIARY IS THE SAME PERSON AS THE HOLDER OF THIS NOTE. EACH SUCCESSOR, HEIR, EXECUTOR, ADMINISTRATOR, TRANSFEREE, PLEDGEE OR HOLDER OF THE NOTE OR AN INTEREST HEREIN SHALL TAKE THE NOTE SUBJECT TO THE PROVISIONS OF THIS SECTION. IN WITNESS whereof the Company has caused this Note to be signed in its name as of the date first above written. PRIMARK CORPORATION By: ----------------------------------- Name: ----------------------------------- Title: ----------------------------------- 8 9 ATTEST: By: -------------------------------------- Name: ------------------------------------ Title: 9 EX-10.19 13 COLLATERAL AGENCY AGREEMENT 1 Exhibit 10.21 AMENDMENT TO TRANSACTION DOCUMENTS THIS AMENDMENT, dated as of December 18, 1996, by and among PRIMARK CORPORATION, a Michigan corporation (the "Borrower"), the Lenders party to the Revolving Credit Agreement referred to below, the Lenders party to the Term Loan Agreement referred to below, the Lenders party to the ICV Credit Agreement referred to below, and MELLON BANK, N.A., a national banking association, as Agent under such Revolving Credit Agreement, as Agent under such Term Loan Agreement and as Agent under such ICV Credit Agreement. RECITALS: A. The Borrower has entered into (a) a Revolving Credit Agreement (as amended, the "Revolving Credit Agreement") dated as of June 29, 1995 among Primark Corporation (the "Borrower"), the Issuing Banks referred to therein, the Lenders parties thereto from time to time, Mellon Bank, N.A., The First National Bank of Boston, and NationsBank, N.A. (Carolinas), as Co-Agents, and Mellon Bank, N.A., as Agent, (b) a Term Loan Agreement (as amended, the "Term Loan Agreement") dated as of June 29, 1995 among the Borrower, the Lenders parties thereto from time to time, Mellon Bank, N.A., The First National Bank of Boston and NationsBank, N.A. (Carolinas), as Co-Agents, and Mellon Bank, N.A., as Agent, (c) a Credit Agreement (as amended, the "ICV Credit Agreement") dated as of October 23, 1996 among the Borrower, the Lenders parties thereto from time to time, the Issuing Bank referred to therein, and Mellon Bank, N.A., as Agent. The Revolving Credit Agreement and the Term Loan Agreement have been amended by (i) a letter agreement dated August 8, 1995 (which, among other things, added NationsBank, N.A. (Carolinas) as Co-Agent to the Revolving Credit Agreement and the Term Loan Agreement as initially constituted), (ii) an Amendment to Transaction Documents dated as of March 12, 1996, (iii) an Amendment to Transaction Documents dated as of June 27, 1996, (iv) an Amendment to Transaction Documents dated as of September 30, 1996, and (v) an Amendment to Transaction Documents dated as of October 23, 1996. B. The parties hereto desire to amend further the Revolving Credit Agreement, the Term Loan Agreement and the ICV Credit Agreement. NOW THEREFORE, the parties hereto, intending to be legally bound, hereby agree as follows: SECTION 1. AMENDMENTS RELATING TO SECTION 7.08 (MERGERS, ETC.). (a) Section 1.01 of Annex A to each of the Revolving Credit Agreement, the Term Loan Agreement and the ICV Credit Agreement is hereby amended to add the following new defined term in its appropriate place in alphabetical order: "Adjusted Acquisition Consideration" in connection with an acquisition of a type referred to in clause (y) or (z) of Section 7.08 hereof by the Borrower or a Subsidiary of the Borrower means the amount, not less than zero, equal to: (a) the gross consideration paid or payable by the Borrower and its Subsidiaries in connection with such acquisition (including, without limitation, the purchase price therefor and transaction expenses), with non-cash consideration valued at its fair market value on the closing date of the acquisition; provided, that for purposes of this clause (a) (i) the value of consideration in the form of Shares of Capital Stock of the Borrower or options or warrants therefor shall be deemed zero, and (ii) the value of consideration in the form of Indebtedness or other deferred payment obligations of the Borrower or its Subsidiaries (exclusive of Indebtedness or other deferred payment obligations payable and paid exclusively in Shares of Capital Stock of the 2 Borrower or options or warrants therefor) shall be deemed the maximum aggregate amount of all payments which in any circumstances may be required thereunder, as determined at the time such Indebtedness or other deferred payment obligation is incurred (except that, for purposes of this clause (ii), interest on Indebtedness accruing after such determination date at a market rate shall be excluded from such maximum aggregate amount), plus (b) the aggregate Indebtedness and Guarantee Equivalents assumed or incurred, directly or indirectly, by the Borrower or any Subsidiary of the Borrower in connection with such acquisition (including, in the case of an acquisition of any or all of the Shares of Capital Stock or other equity interests of a Person, the aggregate Indebtedness and Guarantee Equivalents of such Person), exclusive of Indebtedness and Guarantee Equivalents of the Person being acquired constituting current accounts payable of such Person on normal trade terms to trade creditors arising out of purchases of goods or services in the ordinary course of business and not incurred in contemplation of such acquisition, minus (c) the aggregate cash and Cash Equivalent Investments (valued at the lower of cost or market) acquired by the Borrower and its Subsidiaries in such acquisition (including, in the case of an acquisition of all, but not less than all, of the Shares of Capital Stock or other equity interests of a Person, the aggregate cash and Cash Equivalent Investments of such Person, it being understood that in the event that the Borrower and its Subsidiaries acquire less than all of the Shares of Capital Stock or other equity interests of a Person, no part of the cash or Cash Equivalent Investments of such Person shall be deemed within the scope of this clause (c)); provided, that in the event that the Borrower and its Subsidiaries acquire all of the Shares of Capital Stock or other equity interests of a Person, the cash and Cash Equivalent Investments of such Person shall be deemed within the scope of this clause (c) only in the event that the relevant acquisition agreement requires such Person to own a minimum amount of cash and Cash Equivalent Investments, or provides for a dollar-for-dollar reduction in the purchase price to the extent such Person's cash and Cash Equivalent Investments are less than a specified minimum amount. (b) Section 7.08 of each of the Revolving Credit Agreement, the Term Loan Agreement and the ICV Credit Agreement is hereby amended to read as follows: 7.08. MERGERS, ETC. The Borrower shall not, and shall not permit any Subsidiary of the Borrower to, directly or indirectly, (w) merge with or into or consolidate with any other Person, or (x) liquidate, Wind-Up, dissolve or divide, (y) acquire all or any substantial portion of the properties of any going concern or going line of business (whether or not constituting a distinct legal entity), or (z) acquire all or any substantial portion of the properties of any other Person, or all or any substantial portion of the Shares of Capital Stock of any other Person which is organized as a Corporation, or all or any substantial portion of any equity interest in any other Person which is not organized as a Corporation, or agree, become or remain liable (contingently or otherwise) to do any of the foregoing, except for the following (referred to herein as "Permitted Mergers"): (a) A Subsidiary of the Borrower may merge with or into or consolidate with, or acquire all or any substantial portion of the properties of, or liquidate or dissolve into, any other Subsidiary of the Borrower, if the acquiring, surviving or new Corporation shall be a Wholly Owned Subsidiary of the Borrower; and (b) The Borrower, or a Subsidiary of the Borrower, may make acquisitions of the types referred to in the foregoing clauses (y) and (z) of properties of Persons other than a Subsidiary of the Borrower, consistent with the other provisions of this Agreement and the other Loan Documents, provided that the aggregate Adjusted Acquisition Consideration in connection with all such acquisitions made after June 29, 1995 shall not exceed the sum of $20,000,000 plus the -2- 3 amount, not less than zero, equal to (A) the aggregate amount of cash proceeds (net of underwriting discounts, fees and other transaction costs) received by the Borrower after June 29, 1995 from issuance of Shares of Capital Stock of the Borrower (or options or warrants therefor), minus (B) the aggregate amount of Stock Payments made by the Borrower under Section 7.06(a) hereof after June 29, 1995 (it being understood that Designated Stock Repurchases are not Stock Payments of the type referred to in this clause (B)). SECTION 2. EFFECTIVENESS AND EFFECT, ETC. (a) This Amendment shall become effective on the day on which Mellon Bank, N.A., as Agent under each of the Revolving Credit Agreement, Term Loan Agreement and ICV Credit Agreement, shall have received counterparts hereof duly executed by the Borrower, "Required Lenders" and the "Agent" under the Revolving Credit Agreement, "Required Lenders" and the "Agent" under the Term Loan Agreement, and "Required Lenders" and the "Agent" under the ICV Credit Agreement. (b) The Revolving Credit Agreement, the Term Loan Agreement and the ICV Credit Agreement, as amended by the letter agreement dated August 8, 1995, the Amendment to Transaction Documents dated as of March 12, 1996, the Amendment to Transaction Documents dated as of June 27, 1996, the Amendment to Transaction Documents dated as of September 30, 1996, the Amendment to Transaction Documents dated as of October 23, 1996, and as amended and modified hereby, are and shall continue to be in full force and effect and are hereby in all respects ratified and confirmed. Except to the extent expressly set forth herein, the execution, delivery and effectiveness of this Amendment shall not operate as a waiver of any right, power or remedy of any Secured Party under the Revolving Credit Agreement, the Term Loan Agreement or the ICV Credit Agreement or constitute a waiver of any provision of any of the foregoing. SECTION 3. MISCELLANEOUS. This Amendment may be executed in any number of counterparts and by the different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which taken together shall constitute but one and the same document. Section and other headings herein are for reference purposes only and shall not affect the interpretation of this Amendment in any respect. This Amendment shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania, without regard to choice of law rules. This Amendment constitutes a Transaction Document and is a requested amendment within the meaning of Sections 10.06(a) of each of the Revolving Credit Agreement, the Term Loan Agreement and the ICV Credit Agreement. IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their respective officers thereunto duly authorized, as of the date first above written. PRIMARK CORPORATION By /s/ Stephen H. Curran --------------------------------- Name: Stephen H. Curran Title: CFO -3- 4 MELLON BANK, N.A., individually and as Agent under each of the Revolving Credit Agreement, the Term Loan Agreement and ICV Credit Agreement By /s/ R. JANE WESTRICH --------------------------------- Name: R. Jane Westrich Title: Vice President CONSENTED AND AGREED: THE FIRST NATIONAL BANK OF BOSTON By /s/ ROBERTA F. KEELER --------------------------------- Name: Roberta F. Keeler Title: Vice President NATIONSBANK, N.A. By /s/ ELIZABETH S. DUFF --------------------------------- Name: Elizabeth S. Duff Title: Vice President THE ROYAL BANK OF SCOTLAND PLC By /s/ DEREK BONNAR --------------------------------- Name: DEREK BONNAR Title: VICE PRESIDENT THE FUJI BANK, LIMITED By /s/ TEIJI TERAMOTO --------------------------------- Name: TEIJI TERAMOTO Title: Vice President & Manager THE CHASE MANHATTAN BANK By /s/ DAVID M. NACKLEY --------------------------------- Name: DAVID M. NACKLEY Title: Vice President -4- 5 FIRST AMERICAN NATIONAL BANK By /s/ Scott M. Bane --------------------------------- Name: Scott M. Bane Title: Senior Vice President THE BANK OF TOKYO - MITSUBISHI, LIMITED, successor by merger to THE MITSUBISHI BANK, LIMITED By /s/ Nicholas J. Campbell, Jr. --------------------------------- Name: Nicholas J. Campbell, Jr. Title: Attorney-in-Fact -5- 6 Exhibit 10.19 AMENDMENT TO TRANSACTION DOCUMENTS THIS Amendment, dated as of January 9, 1997, by and among PRIMARK CORPORATION, a Michigan corporation (the "Borrower"), the Lenders party to the Revolving Credit Agreement referred to below, the Lenders party to the Term Loan Agreement referred to below, the Lenders party to the ICV Credit Agreement referred to below (such agreements being referred to collectively as the "Facility Agreements"), and MELLON BANK, N.A., a national banking association, as Agent under each such Facility Agreement. RECITALS: A. The Borrower has entered into (a) a Revolving Credit Agreement (as amended, the "Revolving Credit Agreement") dated as of June 29, 1995 among Primark Corporation (the "Borrower"), the Issuing Banks referred to therein, the Lenders parties thereto from time to time, Mellon Bank, N.A., The First National Bank of Boston, and NationsBank, N.A. (Carolinas), as Co-Agents, and Mellon Bank, N.A., as Agent, (b) a Term Loan Agreement (as amended, the "Term Loan Agreement") dated as of June 29, 1995 among the Borrower, the Lenders parties thereto from time to time, Mellon Bank, N.A., The First National Bank of Boston and NationsBank, N.A. (Carolinas), as Co-Agents, and Mellon Bank, N.A., as Agent, (c) a Credit Agreement (as amended, the "ICV Credit Agreement") dated as of October 23, 1996 among the Borrower, the Lenders parties thereto from time to time, the Issuing Bank referred to therein, and Mellon Bank, N.A., as Agent. The Facility Agreements have been amended by (i) a letter agreement dated August 8, 1995, (ii) Amendment to Transaction Documents dated as of March 12, 1996, (iii) Amendment to Transaction Documents dated as of June 27, 1996, (iv) Amendment to Transaction Documents dated as of September 30, 1996, (v) Amendment to Transaction Documents dated as of October 23, 1996, and (vi) Amendment to Transaction Documents dated as of December 18, 1996. B. The parties hereto desire to amend further the Facility Agreements as set forth herein. NOW THEREFORE, the parties hereto, intending to be legally bound, hereby agree as follows: SECTION 1. AMENDMENT RELATING TO SECTION 7.08 (MERGERS, ETC.). Section 7.08(b) of each Facility Agreement is hereby amended by deleting the term "$20,000,000" and replacing it with the term "$75,000,000". SECTION 2. EFFECTIVENESS AND EFFECT, ETC. (a) This Amendment shall become effective on the day on which Mellon Bank, N.A., as Agent under each Facility Agreement, shall have received counterparts hereof duly executed by the Borrower and by the "Required Lenders" and the "Agent" under each Facility Agreement. (b) The Revolving Credit Agreement, the Term Loan Agreement and the ICV Credit Agreement, as amended by the letter agreement dated August 8, 1995, the Amendment to Transaction Documents dated as of March 12, 1996, the Amendment to Transaction Documents dated as of June 27, 1996, the Amendment to Transaction Documents dated as of September 30, 1996, the Amendment to Transaction Documents dated as of October 23, 1996, and the Amendment to Transaction Documents dated as of December 18, 1996, and as amended and modified hereby, are and shall continue to be in 7 full force and effect and are hereby in all respects ratified and confirmed. Except to the extent expressly set forth herein, the execution, delivery and effectiveness of this Amendment shall not operate as a waiver of any right, power or remedy under any Facility Agreement or constitute a waiver of any provision of any Facility Agreement. SECTION 3. MISCELLANEOUS. This Amendment may be executed in any number of counterparts and by the different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which taken together shall constitute but one and the same document. Section and other headings herein are for reference purposes only and shall not affect the interpretation of this Amendment in any respect. This Amendment shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania, without regard to choice of law rules. This Amendment is a requested amendment within the meaning of Section 10.06(a) of each Facility Agreement. IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their respective officers thereunto duly authorized, as of the date first above written. PRIMARK CORPORATION By /s/ PAUL G. SANDFORD --------------------------------- Name: Paul G. Sandford Title: Treasurer MELLON BANK, N.A., individually and as Agent under each Facility Agreement By /s/ R. JANE WESTRICH --------------------------------- Name: R. Jane Westrich Title: Vice President CONSENTED AND AGREED: THE FIRST NATIONAL BANK OF BOSTON By /s/ ROBIN F. KEELER ------------------------------ Name: Robin F. Keeler Title: Vice President NATIONSBANK, N.A. By /s/ ELIZABETH S. DUFF ------------------------------ Name: Elizabeth S. Duff Title: Vice President -2- 8 THE ROYAL BANK OF SCOTLAND PLC By /s/ DEREK BONNAR ------------------------------ Name: Derek Bonnar Title: Vice President THE FUJI BANK, LIMITED By /s/ TEIJI TERAMOTO ------------------------------ Name: Teiji Teramoto Title: Vice President & Manager THE CHASE MANHATTAN BANK By /s/ DAVID M. NACKLEY ------------------------------ Name: David M. Nackley Title: Vice President FIRST AMERICAN NATIONAL BANK By /s/ SCOTT M. BANE ------------------------------ Name: Scott M. Bane Title: Senior Vice President THE BANK OF TOKYO - MITSUBISHI, LIMITED, successor by merger to THE MITSUBISHI BANK, LIMITED By /s/ NICHOLAS J. CAMPBELL ------------------------------ Name: Nicholas J. Campbell, Jr. Title: Attorney-in-fact -3- EX-10.20 14 VARIABLE RATE UNSECURED LOANS NOTES 1 Exhibit 10.20 AMENDMENT TO TRANSACTION DOCUMENTS THIS AMENDMENT, dated as of October 23, 1996, by and among PRIMARK CORPORATION, a Michigan corporation (the "Borrower"), the Lenders party to the Revolving Credit Agreement referred to below, the Lenders party to the Term Loan Agreement referred to below, the Lenders party to the ICV Credit Agreement referred to below, and MELLON BANK, N.A., a national banking association, as Agent under such Revolving Credit Agreement, as Agent under such Term Loan Agreement, as Agent under such ICV Credit Agreement, and as Collateral Agent under the Collateral Agency Agreement referred to below. RECITALS: A. The Borrower has entered into (a) a Revolving Credit Agreement (as amended, the "Revolving Credit Agreement") dated as of June 29, 1995 among Primark Corporation (the "Borrower"), the Issuing Banks referred to therein, the Lenders parties thereto from time to time, Mellon Bank, N.A., The First National Bank of Boston, and NationsBank, N.A. (Carolinas), as Co-Agents, and Mellon Bank, N.A., as Agent, (b) a Term Loan Agreement (as amended, the "Term Loan Agreement") dated as of June 29, 1995 among the Borrower, the Lenders parties thereto from time to time, Mellon Bank, N.A., The First National Bank of Boston and NationsBank, N.A., (Carolinas), as Co-Agents, and Mellon Bank, N.A., as Agent, (c) a Collateral Agency Agreement (as amended, the "Collateral Agency Agreement") dated as of June 29, 1995 among the Borrower, the Revolving Credit Parties (as defined therein), the Term Loan Parties (as defined therein) and Mellon Bank, N.A. as Collateral Agent, and (d) a Security Agreement (as amended, the "Security Agreement") dated as June 29, 1995 made by the Borrower in favor of Mellon Bank, N.A., as Collateral Agent. The Revolving Credit Agreement, the Term Loan Agreement, the Collateral Agency Agreement, and/or the Security Agreement have been amended by (i) a letter agreement dated August 8, 1995 (which, among other things, added NationsBank, N.A. (Carolinas) as Co-Agent to the Revolving Credit Agreement and the Term Loan Agreement as initially constituted), (ii) an Amendment to Transaction Documents dated as of March 12, 1996, (iii) an Amendment to Transaction Documents dated as of June 27, 1996, and (iv) an Amendment to Transaction Documents dated as of September 30, 1996. B. The parties hereto desire to amend further the Revolving Credit Agreement, the Term Loan Agreement, the Collateral Agency Agreement and the Security Agreement as set forth in this Amendment. Capitalized terms used herein and not otherwise defined shall have the meanings given them in, or by reference in, the Collateral Agency Agreement. NOW THEREFORE, the parties hereto, intending to be legally bound, hereby agree as follows: SECTION 1. AMENDMENTS TO THE REVOLVING CREDIT AGREEMENT AND THE TERM LOAN AGREEMENT. (a) Section 7.03 of each of the Revolving Credit Agreement and the Term Loan Agreement is hereby amended by deleting the existing clause (q), by adding the following new clauses (q), (r), and (s) immediately after clause (p), and by deleting the word "and" following clause (p): (q) Indebtedness of a TWN(UK) Entity permitted under Section 7.19(b) hereof; (r) Indebtedness of the Borrower or any of its Subsidiaries not exceeding $10,000,000 in principal amount, issued in connection with the acquisition by the Borrower or a Subsidiary of all of the Shares of Capital Stock of ICV (such Indebtedness being referred to herein as the "ICV Notes"); Indebtedness of the Borrower pursuant to the ICV Credit Agreement (as defined in the 2 Collateral Agency Agreement) constituting letters of credit issued for its account not exceeding $10,250,000 in stated amount, which letters of credit effectively secure the ICV Notes; and any Indebtedness of the Borrower or any of its Subsidiaries which amends, renews or refinances the ICV Notes and the ICV Credit Agreement, provided, however, that after giving effect to such refinancing the principal amount of Indebtedness is not increased; and (s) Indebtedness for borrowed money of Primark Economics or any of its Subsidiaries not exceeding $6,000,000 in aggregate principal amount at any time outstanding. (b) Section 7.04(h) of each of the Revolving Credit Agreement and the Term Loan Agreement is hereby amended by deleting the phrase", and Guaranty Equivalents of Primark Economics permitted under Section 7.20(c) hereof". (c) Section 7.14 of each of the Revolving Credit Agreement and the Term Loan Agreement is hereby deleted and replaced with the word "[Reserved]". (d) Section 7.16 of each of the Revolving Credit Agreement and the Term Loan Agreement is hereby amended by deleting the word "and" immediately before clause (b), deleting the period at the end thereof and appending thereto the following:", and (c) provisions in the ICV Credit Agreement no more restrictive than those in the ICV Credit Agreement as originally constituted". (e) Section 7.20 of each of the Revolving Credit Agreement and the Term Loan Agreement is hereby deleted and replaced with the word "[Reserved]". (f) The following defined terms are hereby added to Section 1.01 of Annex A of each of the Revolving Credit Agreement and the Term Loan Agreement in their appropriate places in alphabetical order (and, in the case of the terms "Credit Facilities," "Facilities Termination Date," and "Primark Economics" which were previously defined, the previous definition of such term is deleted): "Credit Facilities" shall mean the Revolving Credit Agreement, the Term Loan Agreement, the ICV Credit Agreement and the TASC Loan Agreement. "Facilities Termination Date" shall mean the later to occur of the Revolving Credit Maturity Date, the Term Loan Maturity Date and the ICV Credit Maturity Date. "Primark Economics" shall mean Primark Decision Economics, Inc. "ICV" shall mean ICV Limited. "ICV Credit Agreement" shall mean the Credit Agreement dated on or about October 23, 1996 by and among the Borrower, the lenders parties thereto from time to time, the issuing bank referred to therein, and Mellon Bank, N.A., as Agent, as the same may be amended, modified or supplemented from time to time in accordance with this Agreement. "ICV Credit Maturity Date" shall mean the final scheduled maturity of Indebtedness under the ICV Credit Agreement (being the later of (i) the latest expiration date permitted under the ICV Credit Agreement for letters of credit issued thereunder, or (ii) the final scheduled maturity of the Borrower's reimbursement obligations under the ICV Credit Agreement). SECTION 2. AMENDMENTS TO THE COLLATERAL AGENCY AGREEMENT. (a) Mellon Bank, N.A., as ICV Credit Agent (as defined hereinbelow) on behalf of the ICV Credit Parties (as defined hereinbelow), hereby agrees that the ICV Credit Parties hereby become -2- 3 parties to the Collateral Agency Agreement, and shall be subject to and bound by all of the provisions thereof and of the other Shared Security Documents referred to therein. (b) The following defined terms are hereby added to Section 1.01 of the Collateral Agency Agreement in their appropriate places in alphabetical order (and, in the case of the terms "Directing Party," "Facility Agents," "Facility Event of Default," "Facility Lenders," "Facility Lender Exposure," "Facility Parties," "Facility Permitted Lien," "Notice of Default," "Obligations," "Revolving Credit Agreement," "Secured Party Documents" and "Term Loan Agreement," each of which was previously defined, the previous definitions of such terms are deleted): "Directing Party" at any time shall mean: (a) the Term Loan Agent, if at such time (i) a Term Loan Notice of Default is in effect, at least 15 Business Days have elapsed since the giving of such Term Loan Notice of Default, and no Revolving Credit Notice of Default, ICV Credit Notice of Default or Bankruptcy Default is in effect, or (ii) (A) all Revolving Credit Obligations (other than Contingent Indemnification Obligations) have been paid in full, all commitments to extend credit under the Revolving Credit Documents have terminated, and all Letters of Credit have terminated, and (B) all ICV Credit Obligations (other than Contingent Indemnification Obligations) have been paid in full, all commitments to extend credit under the ICV Credit Documents have terminated, and all ICV LOCs have terminated; (b) the Revolving Credit Agent, if at such time (i) a Revolving Credit Notice of Default is in effect, at least 15 Business Days have elapsed since the giving of such Revolving Credit Notice of Default, and no Term Loan Notice of Default, ICV Credit Notice of Default or Bankruptcy Default is in effect, or (ii) (A) all Term Loan Obligations (other than Contingent Indemnification Obligations) have been paid in full, and (B) all ICV Credit Obligations (other than Contingent Indemnification Obligations) have been paid in full, all commitments to extend credit under the ICV Credit Documents have terminated, and all ICV LOCs have terminated; (c) the ICV Credit Agent, if at such time (i) an ICV Credit Notice of Default is in effect, at least 15 Business Days have elapsed since the giving of such ICV Credit Notice of Default, and no Term Loan Notice of Default, Revolving Credit Notice of Default or Bankruptcy Default is in effect, or (ii) (A) all Term Loan Obligations (other than Contingent Indemnification Obligations) have been paid in full, and (B) all Revolving Credit Obligations (other than Contingent Indemnification Obligations) have been paid in full, all commitments to extend credit under the Revolving Credit Documents have terminated, and all Letters of Credit have terminated; (d) all Swap Parties, acting together, if at such time (i) all Term Loan Obligations (other than Contingent Indemnification Obligations) have been paid in full, (ii) all Revolving Credit Obligations (other than Contingent Indemnification Obligations) have been paid in full, all commitments to extend credit under the Revolving Credit Documents have terminated, and (iii) all Letters of Credit have terminated, all ICV Credit Obligations (other than Contingent Indemnification Obligations) have been paid in full, all commitments to extend credit under the ICV Credit Documents have terminated, and all ICV LOCs have terminated; (e) otherwise, Facility Lenders whose Facility Lender Percentages at such time aggregate at least 51%, acting together. -3- 4 "Facility Agents" shall mean the Revolving Credit Agent, the Term Loan Agent and the ICV Credit Agent. "Facility Event of Default" shall mean the occurrence or existence of an "Event of Default" under the Revolving Credit Agreement, the Term Loan Agreement or the ICV Credit Agreement. "Facility Lenders" shall mean the Revolving Credit Lenders, the Term Loan Lenders and the ICV Credit Lenders. "Facility Lender Exposure" for a Facility Lender at any time shall mean the sum of the following: (a) the principal amount of loans outstanding to such Facility Lender under the Term Loan Agreement, plus (b) the principal amount of extensions of credit made by or for the account of such Facility Lender under the Revolving Credit Agreement, plus (c) the amount equal to (i) if no Revolving Credit Notice of Default or Bankruptcy Default is in effect, and if the commitment of such Facility Lender to extend credit under the Revolving Credit Agreement has not expired or been terminated, then an amount equal to the principal amount of such Facility Lender's unborrowed commitment to extend credit under the Revolving Credit Agreement, (ii) otherwise, zero, plus (d) the principal amount of extensions of credit made by or for the account of such Facility Lender under the ICV Credit Agreement. "Facility Parties" shall mean the Revolving Credit Parties, the Term Loan Parties, the ICV Credit Parties and the Swap Parties. "Facility Permitted Lien" shall mean a Lien which is a "Permitted Lien" under each of the Revolving Credit Agreement, the Term Loan Agreement and the ICV Credit Agreement. "ICV Credit Agent" at any time shall mean the "Agent" under the ICV Credit Agreement at such time. If there is no Agent under the ICV Credit Agreement at such time, then any notice, demand, or other communication required or permitted to be given by the ICV Credit Agent hereunder or under any Shared Security Document shall be sufficiently given or made if given by the "Required Lenders" (as defined in the ICV Credit Agreement as constituted on the date hereof, as such definition may be amended, modified or supplemented from time to time, and any successor term of similar import from time to time in the ICV Credit Agreement), and any notification, demand, consent, document, payment or other communication or item required to be given or made to the ICV Credit Agent shall be sufficiently given or made if given directly to each ICV Credit Party entitled thereto. "ICV Credit Agreement" shall mean the Credit Agreement dated on or about October 23, 1996 by and among the Borrower, the lenders parties thereto from time to time, the issuing bank referred to therein, and Mellon Bank, N.A., as Agent, as the same may be amended, modified or supplemented from time to time; provided, however, that for purposes of this Agreement no effect shall be given to any amendment, modification or supplement entered into without the written consent of the Revolving Credit Agent and the Term Loan Agent that increases the maximum aggregate principal amount of extensions of credit thereunder to the Borrower above $10,250,000. "ICV Credit Documents" shall mean the "Loan Documents" as defined in the ICV Credit Agreement, and any successor term of similar import from time to time in the ICV Credit Agreement. "ICV Credit Issuing Bank" shall mean the "Issuing Banks" (as defined in the ICV Credit Agreement) under the ICV Credit Agreement, together with its successors thereunder. -4- 5 "ICV Credit Lenders" shall mean the "Lenders" (as defined in the ICV Credit Agreement) from time to time under the ICV Credit Agreement. "ICV Credit Notice of Default" shall mean a written certification delivered to the Collateral Agent by the ICV Credit Agent at any time stating that a Facility Event of Default or Facility Potential Default (as specified therein) has occurred and is continuing or exists under the ICV Credit Agreement, and specifically stating that such notice is a "ICV Credit Notice of Default" under this Agreement. "ICV Credit Obligations" shall mean all obligations from time to time of the Borrower to any ICV Credit Party from time to time arising under or in connection with or related to or evidenced by or secured by the ICV Credit Agreement or any other ICV Credit Document, whether such obligations are direct or indirect, otherwise secured or unsecured, joint or several, absolute or contingent, due or to become due, whether for payment or performance, now existing or hereafter arising (specifically including but not limited to obligations arising or accruing after the commencement of any bankruptcy, insolvency or similar proceedings with respect to the Borrower, or which would have arisen or accrued but for the commencement of such proceeding, even if the claim for such obligation is not allowed in such proceeding under applicable Law). Without limitation of the foregoing, such obligations include the principal amount of loans, interest, ICV Credit reimbursement obligations, and fees, indemnities or expenses under or in connection with any ICV Credit Document. ICV Credit Obligations shall remain such notwithstanding any assignment or transfer or any subsequent assignment or transfer of any of the ICV Credit Obligations or any interest therein. "ICV Credit Parties" shall mean the ICV Credit Lenders, the ICV Credit Issuing Bank and the ICV Credit Agent. "ICV LOC" shall mean any letter of credit outstanding under the ICV Credit Agreement from time to time. "ICV LOC Collateral Account" shall have the meaning given that term in Section 4.09 hereof. "ICV LOC Exposure" at any time shall mean the sum at such time of (a) the aggregate ICV LOC Unreimbursed Draws and (b) the aggregate ICV LOC Undrawn Availability. "ICV LOC Undrawn Availability" with respect to an ICV LOC at any time shall mean the maximum amount available to be drawn under such ICV LOC at such time or thereafter, regardless of the existence or satisfaction of any conditions or limitations on drawing. "ICV LOC Unreimbursed Draws" with respect to a ICV LOC at any time shall mean the aggregate amount at such time of all payments made by the issuer under such ICV LOC, to the extent not repaid by the Borrower. "Notice of Default" shall mean a Revolving Credit Notice of Default, a Term Loan Notice of Default or an ICV Credit Notice of Default. "Obligations" shall mean all Revolving Credit Obligations, Term Loan Obligations, ICV Credit Obligations, Swap Obligations, and Collateral Agent Obligations. "Revolving Credit Agreement" shall mean the Revolving Credit Agreement of even date herewith by and among the Borrower, the lenders parties thereto from time to time, the issuing banks referred to therein, Mellon Bank, N.A. and The First National Bank of Boston, as -5- 6 Co-Agents, and Mellon Bank, N.A., as Agent, as the same may be amended, modified, supplemented, renewed or refinanced from time to time; provided, however, that for purposes of this Agreement no effect shall be given to any amendment, modification, supplement, renewal or refinancing entered into without the written consent of the Term Loan Agent and the ICV Credit Agent that increases the maximum aggregate principal amount of extensions of credit thereunder to the Borrower (whether in the form of loans, Letters of Credit or otherwise) above $75,000,000. "Secured Party Documents" shall mean the Revolving Credit Documents, the Term Loan Documents, the ICV Credit Documents and the Swap Documents, including the Shared Security Documents. "Term Loan Agreement" shall mean the Term Loan Agreement of even date herewith by and among the Borrower, the lenders parties thereto from time to time, Mellon Bank, N.A., and The First National Bank of Boston, as Co-Agents, and Mellon Bank, N.A., as Agent, as the same may be amended, modified or supplemented from time to time; provided, however, that for purposes of this Agreement no effect shall be given to any amendment, modification or supplement entered into without the written consent of the Revolving Credit Agent and the ICV Loan Agent that increases the principal amount outstanding thereunder. (c) Section 2.01 of the Collateral Agency Agreement is hereby amended as follows: (i) in Section 2.01(a), the phrase "either Facility Agent" is replaced with the phrase "a Facility Agent" in each place in which it appears, (ii) in Section 2.01(a) and 2.02(b), the phrase "the other Facility Agent" is replaced with the phrase "the other Facility Agents" in each place in which it appears, and (iii) in Section 2.01(c), the phrase "both Facility Agents" is replaced with the phrase "each Facility Agent". (d) Section 2.03 of the Collateral Agency Agreement is hereby amended by adding the following new subsection (c): (c) AMENDMENTS TO AND REFINANCING OF THE ICV CREDIT AGREEMENT. The provisions of this Agreement shall remain in full force and effect as applied to any amendment, modification or supplement to the ICV Credit Agreement, provided that the ICV Credit Agreement as so amended, modified or supplemented remains a "ICV Credit Agreement" as defined herein. (e) Section 2.04 of the Collateral Agency Agreement is hereby amended by deleting the phrase "the Revolving Credit Agreement, the Term Loan Agreement or the Swap Agreement" and replacing it with the phrase "the Revolving Credit Agreement, the Term Loan Agreement, the ICV Credit Agreement or the Swap Agreement". (f) Section 2.05 of the Collateral Agency Agreement is hereby amended by deleting the word "or" following clause (b) thereof, adding the word "or" immediately after clause (c) thereof, and adding the following new clause (d) immediately after such clause (c): (d) in the case of the ICV Credit Parties, a written notice from the ICV Credit Agent to the effect that (i) the Liens created hereby and by the other Shared Security Documents are to be released and discharged with respect to the ICV Credit Parties, or (ii) all commitments to extend credit under the ICV Credit Documents have terminated, all ICV LOCs have terminated, and all ICV Credit Obligations (other than Contingent Indemnification Obligations) have been indefeasibly paid in full in cash; In addition, the final sentence of Section 2.05 is hereby amended to read as follows: "The Revolving Credit Agent, the Term Loan Agent, each Swap Party, and the ICV Credit Agent, respectively, shall deliver to the Collateral Agent written notice to the effect set forth in clause (a)(ii), (b)(ii), (c)(ii), and -6- 7 (d)(ii), respectively, promptly after receiving written request to do so by the Borrower after the conditions described in such clause are satisfied." (g) Section 4.04 of the Collateral Agency Agreement is hereby amended by deleting items "Second," "Third," "Fourth", "Fifth" and "Finally" and replacing them with the following, respectively: Second: to (a) the Revolving Credit Agent, for the payment of all amounts due to the Revolving Credit Agent in its capacity as such which are unpaid on such distribution date, (b) the Term Loan Agent, for the payment of all amounts due to the Term Loan Agent in its capacity as such which are unpaid on such distribution date, and (c) the ICV Credit Agent, for the payment of all amounts due to the ICV Credit Agent in its capacity as such which are unpaid on such distribution date; provided, that if such monies to be distributed by the Collateral Agent shall be insufficient to pay in full the amounts referred to in the foregoing clauses (a), (b) and (c), then such distribution shall be made ratably (without priority of any one over any other) to the Revolving Credit Agent, the Term Loan Agent and the ICV Credit Agent in proportion to the respective amounts referred to in the foregoing clauses (a), (b) and (c) on such distribution date; Third: to (a) the Revolving Credit Agent, for the account of the Revolving Credit Parties, in an amount equal to all amounts due and payable to the Revolving Credit Parties on such distribution date with respect to Revolving Credit Obligations (including obligations to pay Letter of Credit Unreimbursed Draws and to provide cash collateral for outstanding undrawn Letters of Credit, but only to the extent the aggregate Letter of Credit Exposure exceeds the amount on deposit in the Letter of Credit Collateral Account) (to the extent not paid pursuant to item "Second" above), (b) the Term Loan Agent, for the account of the Term Loan Parties, in an amount equal to all amounts due and payable to the Term Loan Parties on such distribution date with respect to Term Loan Obligations (to the extent not paid pursuant to item "Second" above), (c) the ICV Credit Agent, for the account of the ICV Credit Parties, in an amount equal to all amounts due and payable to the ICV Credit Parties on such distribution date with respect to ICV Credit Obligations (including obligations to pay ICV LOC Unreimbursed Draws and to provide cash collateral for outstanding undrawn ICV LOCs, but only to the extent the aggregate ICV LOC Exposure exceeds the amount on deposit in the ICV LOC Collateral Account) (to the extent not paid pursuant to item "Second" above), and (d) each Swap Party, in an amount (calculated separately for each Swap Agreement to which such Swap Party is party) equal to the lesser of (i) all amounts due and payable to the Swap Party on such distribution date with respect to Swap Obligations under or in connection with such Swap Agreement or (ii) the Swap Shared Security Cap for such Swap Agreement minus the aggregate amount of all distributions previously made from time to time to the Swap Party with respect to Swap Obligations under or in connection with such Swap Agreement pursuant to this item "Third"; provided, that if such moneys to be distributed by the Collateral Agent shall be insufficient to pay in full the amounts referred to in the foregoing clauses (a), (b), (c) and (d), then such distribution shall be made ratably (without priority of any one over any other) to the Revolving Credit Agent, the Term Loan Agent, the ICV Credit Agent and the Swap Parties in proportion to the respective amounts referred to in the foregoing clauses (a), (b), (c) and (d) on such distribution date; and further provided, that no further distributions shall be made under this item "Third" to a Swap Party on account of Swap Obligations under or in connection with a particular Swap Agreement once the aggregate amount of all distributions made from time to time to such Swap Party on account of Swap Obligations under or in connection with such Swap Agreement pursuant to clause (d) of this item "Third" shall equal the Swap Shared Security Cap for such Swap Agreement; and further provided, that no further distributions shall be made under this item "Third" once the aggregate amount of all distributions made from time to time pursuant to clause (c) of this item "Third" to each Swap Party on account of the Swap Obligations under or in connection with each Swap Agreement shall equal the Swap Shared Security Cap for such Swap Agreement' -7- 8 Fourth: to (a) the Revolving Credit Agent, for the account of the Revolving Credit Parties, in an amount equal to all amounts due and payable to the Revolving Credit Parties on such distribution date with respect to Revolving Credit Obligations (including obligations to pay Letter of Credit Unreimbursed Draws and to provide cash collateral for outstanding undrawn Letters of Credit, but only to the extent the aggregate Letter of Credit Exposure exceeds the amount on deposit in the Letter of Credit Collateral Account) (to the extent not paid pursuant to items "Second" and "Third" above), (b) the Term Loan Agent, for the account of the Term Loan Parties, in an amount equal to all amounts due and payable to the Term Loan Parties on such distribution date with respect to Term Loan Obligations (to the extent not paid pursuant to items "Second" and "Third" above), and (c) the ICV Credit Agent, for the account of the ICV Credit Parties, in an amount equal to all amounts due and payable to the ICV Credit Parties on such distribution date with respect to ICV Credit Obligations (including obligations to pay ICV LOC Unreimbursed Draws and to provide cash collateral for outstanding undrawn ICV LOCs, but only to the extent the aggregate ICV LOC Exposure exceeds the amount on deposit in the ICV LOC Collateral Account) (to the extent not paid pursuant to items "Second" and "Third" above); provided, that if such moneys to be distributed by the Collateral Agent shall be insufficient to pay in full the amounts referred to in the foregoing clauses (a), (b) and (c), then such distribution shall be made ratably (without priority of any one over any other) to the Revolving Credit Agent and the Term Loan Agent in proportion to the respective amounts referred to in the foregoing clauses (a), (b) and (c) on such distribution date; Fifth: to each Swap Party, in an amount equal to all amounts due and payable to the Swap Party on such distribution date with respect to Swap Obligations (to the extent not paid pursuant to item "Third" above); provided, that if such moneys to be distributed by the Collateral Agent shall be insufficient to pay in full the amounts referred to in the foregoing clause, then such distribution shall be made ratably (without priority of any one over any other) to the Swap Parties in proportion to the respective amounts referred to in the foregoing clause on such distribution date; and Finally: if all Revolving Credit Obligations, Term Loan Obligations, ICV Credit Obligations and Swap Obligations (other than, in each case, Contingent Indemnification Obligations) shall have been indefeasably paid in full in cash, all commitments to extend credit under the Revolving Credit Agreement shall have terminated, all outstanding Letters of Credit shall have terminated, all commitments to extend credit under the ICV Credit Agreement shall have terminated, all outstanding ICV LOCs shall have terminated, and all Interest Rate Hedge Agreements under the Swap Documents have terminated, any surplus then remaining shall be paid to the Borrower or its successors or assigns or to whomsoever may be lawfully entitled to receive the same or as a court of competent jurisdiction may direct. (h) Section 4.05 of the Collateral Agency Agreement is amended to read as follows: 4.05. CALCULATIONS. In making the determinations and allocations required by Section 4.04 hereof, the Collateral Agent may rely upon information supplied by (a) the Revolving Credit Agent, as to the amounts described in clause (a) of item "Second",clause (a) of item "Third", and clause (a) of item "Fourth", (b) the Term Loan Agent, as to the amounts described in clause (b) of item "Second", clause (b) of item "Third", and clause (b) of item "Fourth", (c) the ICV Credit Agent, as to the amounts described in clause (c) of item "Second", clause (c) of item "Third" and clause (c) of item "Fourth" and (d) each Swap Party, as to the amounts described in clause (d) of item "Third" and item "Fifth", and the Collateral Agent shall have no liability to any Secured Party for actions taken in reliance on such information. All distributions made by the Collateral Agent pursuant to Section 4.04 hereof shall be final as against the Collateral Agent (subject to any decree of any court of competent jurisdiction), and the Collateral Agent shall have no duty to inquire as to the application by any Secured Party of any amounts distributed to it. -8- 9 (i) The following new Section 4.09 is hereby added to the Collateral Agency Agreement immediately following Section 4.08: 4.09. ICV LOC COLLATERAL ACCOUNT. (a) ICV LOC COLLATERAL ACCOUNT. Not later than the first date on which funds are required to be deposited therein pursuant to this Agreement or any other Shared Security Document, the Collateral Agent shall maintain an account (the "ICV LOC Collateral Account") at such office as it may designate from time to time in its own name as Collateral Agent. (b) INVESTMENT. The Collateral Agent shall invest and reinvest moneys on deposit in the ICV LOC Collateral Account in its own name in such Restricted Investments as the Collateral Agent may select in its discretion, and all such investments and the interest and income received thereon and the net proceeds on the sale or redemption thereof shall be held in the ICV LOC Collateral Account. The Collateral Agent shall not be responsible or liable to any other Person for any loss or decline in value of such investments or any loss or penalties incurred in the liquidation or sale thereof. The Collateral Agent may liquidate investments prior to maturity to make a distribution pursuant to Section 4.09(d) hereof or otherwise permitted or required pursuant to this Agreement. (c) DEPOSITS. Notwithstanding anything to the contrary contained herein, all funds distributable from the Shared Collateral Account under Section 4.04 hereof on account of ICV LOC Exposure shall be deposited into the ICV LOC Collateral Account. In addition, the ICV Credit Agent shall remit to the Collateral Agent, for deposit into the ICV LOC Collateral Account, such amounts as the ICV Credit Agreement or any ICV Credit Document requires or permits to be deposited therein. No other funds shall be deposited in the ICV LOC Collateral Account or commingled with funds in the ICV LOC Collateral Account. (d) DISBURSEMENTS. The Collateral Agent shall remit funds on deposit from time to time in the ICV LOC Collateral Account to, or at the direction of, the ICV Credit Agent when and as requested by the ICV Credit Agent for the reimbursement of ICV LOC Unreimbursed Draws, as and when the same become due and payable, if and to the extent the Borrower fails to pay the same. The ICV Credit Agent shall forthwith remit, or cause the Collateral Agent to remit, such funds to the Secured Party which is the issuer of such ICV LOC, who shall apply such funds to payment of such ICV LOC Unreimbursed Draw. If at any time the amount on deposit in the ICV LOC Collateral Account exceeds the aggregate ICV LOC Exposure with respect to all outstanding ICV LOCs, the excess shall be deposited into the Shared Collateral Account. (j) Section 5.09 of the Collateral Agency Agreement is hereby amended by deleting the phrase "Revolving Credit Agreement or Term Loan Agreement, as the case may be" in each place in which it appears and replacing with the phrase "Revolving Credit Agreement, Term Loan Agreement or ICV Credit Agreement, as the case may be". (k) Section 5.13 of the Collateral Agency Agreement is hereby amended by deleting the phrase "the Revolving Credit Agent and the Term Loan Agent" and replacing it with the phrase "the Revolving Credit Agent, the Term Loan Agent and the ICV Credit Agent" (l) Section 6.08 of the Collateral Agency Agreement is hereby amended by deleting the words "and (c)" and replacing them with the phrase "(c) from the ICV Credit Agent to the effect that (i) the Liens created hereby and by the other Shared Security Documents are to be released and discharged, or (ii) all commitments to extend credit under the ICV Credit Documents have terminated, all ICV -9- 10 LOCs have terminated, and all ICV Credit Obligations (other than Contingent Indemnfication Obligations) have been indefeasibly paid in full in cash, and (d)". (m) Exhibit A to the Collateral Agency Agreement is hereby amended as follows: (i) In Section 5, the phrase "the Revolving Credit Agent, the Term Loan Agent and the Borrower" is deleted and replaced with the phrase "the Revolving Credit Agent, the Term Loan Agent, the ICV Credit Agent and the Borrower". (ii) The signature block is amended by deleting the phrase "as Revolving Credit Agent and Term Loan Agent" and replacing it with the phrase "as Revolving Credit Agent, Term Loan Agent and ICV Credit Agent". (n) To the extent an Interest Rate Hedging Agreement in existence on the effective date of this Amendment constitutes a "Swap Agreement" entitled to the benefit of the Collateral Agency Agreement under Collateral Agency Agreement as constituted before this Amendment, nothing in this Amendment shall be construed to cause such Interest Rate Hedging Agreement to cease to be a "Swap Agreement". SECTION 3. AMENDMENTS TO THE SECURITY AGREEMENT. (a) Section 2.04 of the Security Agreement is hereby amended by deleting the phrase "neither Facility Agent" where it appears in clause (c) and replacing it with the phrase "no Facility Agent". (b) Sections 4.02(a), 4.02(b) and 4.04(e) of the Security Agreement are hereby amended by deleting the phrase "the Revolving Credit Agreement and the Term Loan Agreement" in each place where it appears and replacing it with the phrase "the Revolving Credit Agreement, the Term Loan Agreement and the ICV Credit Agreement". SECTION 4. EFFECTIVENESS AND EFFECT, ETC. (a) This Amendment shall become effective on the day on which each of the following conditions has been satisfied: (i) Mellon Bank, N.A., as Collateral Agent, Revolving Credit Agent and Term Loan Agent, shall have received counterparts hereof duly executed by the Borrower, "Required Lenders" under the Revolving Credit Agreement, "Required Lenders" under the Term Loan Agreement, the Collateral Agent, the Revolving Credit Agent and the Term Loan Agent, and (ii) the ICV Credit Agreement shall have been executed and delivered by the Borrower. (b) The Revolving Credit Agreement, the Term Loan Agreement, the Collateral Agency Agreement and the Security Agreement, as amended by the letter agreement dated August 8, 1995, the Amendment to Transaction Documents dated as of March 12, 1996, the Amendment to Transaction Documents dated as of June 27, 1996, the Amendment to Transaction Documents dated as of September 30, 1996, and as amended and modified hereby, are and shall continue to be in full force and effect and are hereby in all respects ratified and confirmed. Except to the extent expressly set forth herein, the execution, delivery and effectiveness of this Amendment shall not operate as a waiver of any right, power or remedy of any Secured Party under the Revolving Credit Agreement, the Term Loan Agreement, the Collateral Agency Agreement or the Security Agreement or constitute a waiver of any provision of any of the foregoing. SECTION 5. MISCELLANEOUS. This Amendment may be executed in any number of counterparts and by the different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which taken together shall constitute but one and the same document. Section and other headings herein are for reference purposes only and shall not affect the interpretation of this Amendment in any respect. This Amendment shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania, without regard to choice -10- 11 of law rules. This Amendment constitutes a Transaction Document and is a requested amendment within the meaning of Sections 10.06(a) of each of the Revolving Credit Agreement and the Term Loan Agreement and Section 5.14 of the Collateral Agency Agreement. IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their respective officers thereunto duly authorized, as of the date first above written. PRIMARK CORPORATION By /s/ PAUL G. SANDFORD -------------------------------------------- Name: Paul G. Sandford Title: Treasurer MELLON BANK, N.A., individually and as Collateral Agent, Revolving Credit Agent, Term Loan Agent, and ICV Credit Agent By /s/ R. JANE WESTRICH -------------------------------------------- Name: R. Jane Westrich Title: Vice President CONSENTED AND AGREED: THE FIRST NATIONAL BANK OF BOSTON By /s/ MITCHELL B. FELDMAN ------------------------------- Name: Mitchell B. Feldman Title: Managing Director NATIONSBANK, N.A. By /s/ ELIZABETH S. DUFF ------------------------------- Name: Elizabeth S. Duff Title: Vice President THE ROYAL BANK OF SCOTLAND PLC By /s/ GRANT F. STODDART ------------------------------- Name: Grant F. Stoddart Title: Senior Vice President and Manager -11- 12 THE FUJI BANK, LIMITED By /s/ TEIJI TERAMOTO ------------------------------- Name: TEIJI TERAMOTO Title: Vice President & Manager THE CHASE MANHATTAN BANK By /s/ GEORGE W. BURTON ------------------------------ Name: George W. Burton Title: Regional Credit Manager. FIRST AMERICAN NATIONAL BANK By /s/ SCOTT M. BANE ------------------------------- Name: Scott M. Bane Title: Senior Vice President THE BANK OF TOKYO - MITSUBISHI, LIMITED, successor by merger to THE MITSUBISHI BANK, LIMITED By /s/ VICTOR BULZACCHELLI ------------------------------- Name: Victor Bulzacchelli Title: Attorney in Fact -12- EX-10.21 15 CREDIT AGREEMENT 1 Exhibit 10.21 AMENDMENT TO TRANSACTION DOCUMENTS THIS AMENDMENT, dated as of December 18, 1996, by and among PRIMARK CORPORATION, a Michigan corporation (the "Borrower"), the Lenders party to the Revolving Credit Agreement referred to below, the Lenders party to the Term Loan Agreement referred to below, the Lenders party to the ICV Credit Agreement referred to below, and MELLON BANK, N.A., a national banking association, as Agent under such Revolving Credit Agreement, as Agent under such Term Loan Agreement and as Agent under such ICV Credit Agreement. RECITALS: A. The Borrower has entered into (a) a Revolving Credit Agreement (as amended, the "Revolving Credit Agreement") dated as of June 29, 1995 among Primark Corporation (the "Borrower"), the Issuing Banks referred to therein, the Lenders parties thereto from time to time, Mellon Bank, N.A., The First National Bank of Boston, and NationsBank, N.A. (Carolinas), as Co-Agents, and Mellon Bank, N.A., as Agent, (b) a Term Loan Agreement (as amended, the "Term Loan Agreement") dated as of June 29, 1995 among the Borrower, the Lenders parties thereto from time to time, Mellon Bank, N.A., The First National Bank of Boston and NationsBank, N.A. (Carolinas), as Co-Agents, and Mellon Bank, N.A., as Agent, (c) a Credit Agreement (as amended, the "ICV Credit Agreement") dated as of October 23, 1996 among the Borrower, the Lenders parties thereto from time to time, the Issuing Bank referred to therein, and Mellon Bank, N.A., as Agent. The Revolving Credit Agreement and the Term Loan Agreement have been amended by (i) a letter agreement dated August 8, 1995 (which, among other things, added NationsBank, N.A. (Carolinas) as Co-Agent to the Revolving Credit Agreement and the Term Loan Agreement as initially constituted), (ii) an Amendment to Transaction Documents dated as of March 12, 1996, (iii) an Amendment to Transaction Documents dated as of June 27, 1996, (iv) an Amendment to Transaction Documents dated as of September 30, 1996, and (v) an Amendment to Transaction Documents dated as of October 23, 1996. B. The parties hereto desire to amend further the Revolving Credit Agreement, the Term Loan Agreement and the ICV Credit Agreement. NOW THEREFORE, the parties hereto, intending to be legally bound, hereby agree as follows: SECTION 1. AMENDMENTS RELATING TO SECTION 7.08 (MERGERS, ETC.). (a) Section 1.01 of Annex A to each of the Revolving Credit Agreement, the Term Loan Agreement and the ICV Credit Agreement is hereby amended to add the following new defined term in its appropriate place in alphabetical order: "Adjusted Acquisition Consideration" in connection with an acquisition of a type referred to in clause (y) or (z) of Section 7.08 hereof by the Borrower or a Subsidiary of the Borrower means the amount, not less than zero, equal to: (a) the gross consideration paid or payable by the Borrower and its Subsidiaries in connection with such acquisition (including, without limitation, the purchase price therefor and transaction expenses), with non-cash consideration valued at its fair market value on the closing date of the acquisition; provided, that for purposes of this clause (a) (i) the value of consideration in the form of Shares of Capital Stock of the Borrower or options or warrants therefor shall be deemed zero, and (ii) the value of consideration in the form of Indebtedness or other deferred payment obligations of the Borrower or its Subsidiaries (exclusive of Indebtedness or other deferred payment obligations payable and paid exclusively in Shares of Capital Stock of the 2 Borrower or options or warrants therefor) shall be deemed the maximum aggregate amount of all payments which in any circumstances may be required thereunder, as determined at the time such Indebtedness or other deferred payment obligation is incurred (except that, for purposes of this clause (ii), interest on Indebtedness accruing after such determination date at a market rate shall be excluded from such maximum aggregate amount), plus (b) the aggregate Indebtedness and Guarantee Equivalents assumed or incurred, directly or indirectly, by the Borrower or any Subsidiary of the Borrower in connection with such acquisition (including, in the case of an acquisition of any or all of the Shares of Capital Stock or other equity interests of a Person, the aggregate Indebtedness and Guarantee Equivalents of such Person), exclusive of Indebtedness and Guarantee Equivalents of the Person being acquired constituting current accounts payable of such Person on normal trade terms to trade creditors arising out of purchases of goods or services in the ordinary course of business and not incurred in contemplation of such acquisition, minus (c) the aggregate cash and Cash Equivalent Investments (valued at the lower of cost or market) acquired by the Borrower and its Subsidiaries in such acquisition (including, in the case of an acquisition of all, but not less than all, of the Shares of Capital Stock or other equity interests of a Person, the aggregate cash and Cash Equivalent Investments of such Person, it being understood that in the event that the Borrower and its Subsidiaries acquire less than all of the Shares of Capital Stock or other equity interests of a Person, no part of the cash or Cash Equivalent Investments of such Person shall be deemed within the scope of this clause (c)); provided, that in the event that the Borrower and its Subsidiaries acquire all of the Shares of Capital Stock or other equity interests of a Person, the cash and Cash Equivalent Investments of such Person shall be deemed within the scope of this clause (c) only in the event that the relevant acquisition agreement requires such Person to own a minimum amount of cash and Cash Equivalent Investments, or provides for a dollar-for-dollar reduction in the purchase price to the extent such Person's cash and Cash Equivalent Investments are less than a specified minimum amount. (b) Section 7.08 of each of the Revolving Credit Agreement, the Term Loan Agreement and the ICV Credit Agreement is hereby amended to read as follows: 7.08. MERGERS, ETC. The Borrower shall not, and shall not permit any Subsidiary of the Borrower to, directly or indirectly, (w) merge with or into or consolidate with any other Person, or (x) liquidate, Wind-Up, dissolve or divide, (y) acquire all or any substantial portion of the properties of any going concern or going line of business (whether or not constituting a distinct legal entity), or (z) acquire all or any substantial portion of the properties of any other Person, or all or any substantial portion of the Shares of Capital Stock of any other Person which is organized as a Corporation, or all or any substantial portion of any equity interest in any other Person which is not organized as a Corporation, or agree, become or remain liable (contingently or otherwise) to do any of the foregoing, except for the following (referred to herein as "Permitted Mergers"): (a) A Subsidiary of the Borrower may merge with or into or consolidate with, or acquire all or any substantial portion of the properties of, or liquidate or dissolve into, any other Subsidiary of the Borrower, if the acquiring, surviving or new Corporation shall be a Wholly Owned Subsidiary of the Borrower; and (b) The Borrower, or a Subsidiary of the Borrower, may make acquisitions of the types referred to in the foregoing clauses (y) and (z) of properties of Persons other than a Subsidiary of the Borrower, consistent with the other provisions of this Agreement and the other Loan Documents, provided that the aggregate Adjusted Acquisition Consideration in connection with all such acquisitions made after June 29, 1995 shall not exceed the sum of $20,000,000 plus the -2- 3 amount, not less than zero, equal to (A) the aggregate amount of cash proceeds (net of underwriting discounts, fees and other transaction costs) received by the Borrower after June 29, 1995 from issuance of Shares of Capital Stock of the Borrower (or options or warrants therefor), minus (B) the aggregate amount of Stock Payments made by the Borrower under Section 7.06(a) hereof after June 29, 1995 (it being understood that Designated Stock Repurchases are not Stock Payments of the type referred to in this clause (B)). SECTION 2. EFFECTIVENESS AND EFFECT, ETC. (a) This Amendment shall become effective on the day on which Mellon Bank, N.A., as Agent under each of the Revolving Credit Agreement, Term Loan Agreement and ICV Credit Agreement, shall have received counterparts hereof duly executed by the Borrower, "Required Lenders" and the "Agent" under the Revolving Credit Agreement, "Required Lenders" and the "Agent" under the Term Loan Agreement, and "Required Lenders" and the "Agent" under the ICV Credit Agreement. (b) The Revolving Credit Agreement, the Term Loan Agreement and the ICV Credit Agreement, as amended by the letter agreement dated August 8, 1995, the Amendment to Transaction Documents dated as of March 12, 1996, the Amendment to Transaction Documents dated as of June 27, 1996, the Amendment to Transaction Documents dated as of September 30, 1996, the Amendment to Transaction Documents dated as of October 23, 1996, and as amended and modified hereby, are and shall continue to be in full force and effect and are hereby in all respects ratified and confirmed. Except to the extent expressly set forth herein, the execution, delivery and effectiveness of this Amendment shall not operate as a waiver of any right, power or remedy of any Secured Party under the Revolving Credit Agreement, the Term Loan Agreement or the ICV Credit Agreement or constitute a waiver of any provision of any of the foregoing. SECTION 3. MISCELLANEOUS. This Amendment may be executed in any number of counterparts and by the different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which taken together shall constitute but one and the same document. Section and other headings herein are for reference purposes only and shall not affect the interpretation of this Amendment in any respect. This Amendment shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania, without regard to choice of law rules. This Amendment constitutes a Transaction Document and is a requested amendment within the meaning of Sections 10.06(a) of each of the Revolving Credit Agreement, the Term Loan Agreement and the ICV Credit Agreement. IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their respective officers thereunto duly authorized, as of the date first above written. PRIMARK CORPORATION By /s/ Stephen H. Curran --------------------------------- Name: Stephen H. Curran Title: CFO -3- 4 MELLON BANK, N.A., individually and as Agent under each of the Revolving Credit Agreement, the Term Loan Agreement and ICV Credit Agreement By /s/ R. JANE WESTRICH --------------------------------- Name: R. Jane Westrich Title: Vice President CONSENTED AND AGREED: THE FIRST NATIONAL BANK OF BOSTON By /s/ ROBERTA F. KEELER --------------------------------- Name: Roberta F. Keeler Title: Vice President NATIONSBANK, N.A. By /s/ ELIZABETH S. DUFF --------------------------------- Name: Elizabeth S. Duff Title: Vice President THE ROYAL BANK OF SCOTLAND PLC By /s/ DEREK BONNAR --------------------------------- Name: DEREK BONNAR Title: VICE PRESIDENT THE FUJI BANK, LIMITED By /s/ TEIJI TERAMOTO --------------------------------- Name: TEIJI TERAMOTO Title: Vice President & Manager THE CHASE MANHATTAN BANK By /s/ DAVID M. NACKLEY --------------------------------- Name: DAVID M. NACKLEY Title: Vice President -4- 5 FIRST AMERICAN NATIONAL BANK By /s/ Scott M. Bane --------------------------------- Name: Scott M. Bane Title: Senior Vice President THE BANK OF TOKYO - MITSUBISHI, LIMITED, successor by merger to THE MITSUBISHI BANK, LIMITED By /s/ Nicholas J. Campbell, Jr. --------------------------------- Name: Nicholas J. Campbell, Jr. Title: Attorney-in-Fact -5- EX-13.1 16 PRIMARK CORPORATION 1996 ANNUAL REPORT 1 EXHIBIT 13.1 PRIMARK CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME
(000s) Except Per Share Amounts For Year Ended December 31 1996 1995 1994 --------- --------- --------- OPERATING REVENUES $767,125 $610,216 $469,555 -------- -------- -------- OPERATING EXPENSES Cost of services 457,528 361,989 272,770 Selling, general and administrative 199,922 159,113 135,812 Depreciation 19,445 15,068 12,091 Amortization of goodwill 13,369 9,561 6,932 Amortization of other intangible assets 10,540 11,642 8,429 -------- --------- --------- Total operating expenses 700,804 557,373 436,034 -------- --------- --------- Operating income 66,321 52,843 33,521 -------- --------- --------- OTHER INCOME AND (DEDUCTIONS) Investment income 2,703 980 648 Interest expense (20,193) (17,467) (10,996) Foreign currency gain (loss) 1,864 (2,620) (1,329) Other (1,533) (1,026) 334 -------- --------- --------- Total other income and (deductions) (17,159) (20,133) (11,343) -------- --------- --------- INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES 49,162 32,710 22,178 INCOME TAX EXPENSE 21,207 14,863 9,494 -------- --------- --------- INCOME FROM CONTINUING OPERATIONS 27,955 17,847 12,684 -------- --------- --------- DISCONTINUED OPERATIONS (NOTE 3) Income from Discontinued operations, net of income tax expense of $230,000, $249,000 and $273,000, respectively 753 1,003 1,066 Gain on disposal of discontinued operations, net of income tax expense of $5,407,000 8,400 -- -- -------- -------- -------- Total Discontinued Operations 9,153 1,003 1,066 -------- -------- -------- INCOME BEFORE EXTRAORDINARY LOSS 37,108 18,850 13,750 -------- -------- -------- EXTRAORDINARY LOSS ON EARLY EXTINGUISHMENT OF DEBT, net of income tax benefit of $288,000 (Note 6a) -- (534) -- -------- -------- -------- NET INCOME 37,108 18,316 13,750 DIVIDENDS ON PREFERRED STOCK (359) (1,434) (1,434) -------- -------- -------- NET INCOME APPLICABLE TO COMMON STOCK $ 36,749 $ 16,882 $ 12,316 ======== ======== ======== EARNINGS PER COMMON AND COMMON EQUIVALENT SHARE Income from continuing operations $ 1.04 $ 0.80 $ 0.57 -------- -------- -------- Discontinued operations: Income from Discontinued operations 0.03 0.05 0.05 Gain on disposal of discontinued operations 0.31 -- -- -------- -------- -------- Total discontinued operations 0.34 0.05 0.05 -------- -------- -------- Income before extraordinary loss 1.38 0.85 0.62 Extraordinary loss (Note 6a) -- (0.03) -- -------- -------- -------- Total earnings per share $ 1.38 $ 0.82 $ 0.62 ======== ======== ======== WEIGHTED AVERAGE COMMON AND COMMON EQUIVALENT SHARES OUTSTANDING 26,555 20,602 19,909 ======== ======== ========
The accompanying notes to the consolidated financial statements are an integral part of these statements 22 2 PRIMARK CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS
(000s) For the Year Ended December 31 1996 1995 1994 --------- --------- --------- CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 37,108 $ 18,316 $ 13,750 Adjustments to reconcile net income to net cash flows from operating activities: Discontinued operations ($ 9,153) (1,003) (1,066) Change in year end of subsidiary 2,518 -- -- Extraordinary loss on early extinguishment of debt -- 534 -- Depreciation and amortization 43,354 36,271 27,452 Foreign currency transaction (gain) loss - net (1,864) 2,620 1,329 Other 3,069 (5,768) 185 Changes in assets and liabilities which provided (used) cash, exclusive of changes shown separately (10,512) (2,760) (2,752) --------- --------- --------- Net cash provided from operating activities 64,520 48,210 38,898 --------- --------- --------- CASH FLOWS FROM FINANCING ACTIVITIES Issuance of short-term notes payable 2,598 318,601 157,898 Repayment of short-term notes payable (2,598) (318,601) (174,898) Issuance of long-term debt -- 125,000 -- Common stock issuance 8,264 106,528 2,032 Debt issue costs and other (711) (7,405) (512) --------- --------- --------- Net cash provided from financing activities 7,553 224,123 (15,480) --------- --------- --------- CASH FLOWS FROM INVESTING ACTIVITIES Capital expenditures (26,250) (22,645) (22,497) Capitalized software (16,916) (6,232) (4,372) Purchase of subsidiaries - net of acquired cash (71,084) (199,734) (6,106) Proceeds from sale of a subsidiary 14,300 -- 6,500 Cash from discontinued operations 892 402 748 Restriction of cash to secure long-term obligations -- -- 9,529 Other - net (8,223) (1,172) 2,769 --------- --------- --------- Net cash used for investing activities (107,281) (229,381) (13,429) --------- --------- --------- EFFECT OF EXCHANGE RATE CHANGES ON CASH 927 57 477 --------- --------- --------- NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (34,281) 43,009 10,466 CASH AND CASH EQUIVALENTS, JANUARY 1 59,990 16,981 6,515 --------- --------- --------- CASH AND CASH EQUIVALENTS, DECEMBER 31 $ 25,709 $ 59,990 $ 16,981 ========= ========= ========= CHANGES IN ASSETS AND LIABILITIES WHICH PROVIDED (USED) CASH, EXCLUSIVE OF CHANGES SHOWN SEPARATELY Billed, unbilled and other receivables-net ($ 43,418) ($ 10,949) ($ 8,141) Accounts payable (441) (3,105) (4,476) Federal income, property and other taxes payable-net 3,165 1,431 612 Other current assets and liabilities 22,428 7,511 5,528 Other noncurrent assets and liabilities 7,754 2,352 3,725 --------- --------- --------- ($ 10,512) ($ 2,760) ($ 2,752) ========= ========= ========= SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION-CASH PAID FOR: Income taxes, including amounts paid for discontinued operations $ 12,863 $ 10,616 $ 8,086 Interest $ 20,664 $ 20,351 $ 14,503
23 3 PRIMARK CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(000s) At December 31 1996 1995 -------- -------- ASSETS CURRENT ASSETS Cash and cash equivalents, at cost (which approximates market value) $ 25,709 $ 59,990 Billed receivables less allowance for doubtful accounts of $3,647,000 and $2,283,000, respectively 145,793 106,183 Unbilled and other receivables 42,314 33,255 Net assets of discontinued operations -- 632 Other current assets 19,894 14,040 -------- -------- Total current assets 233,710 214,100 -------- -------- DEFERRED CHARGES AND OTHER ASSETS Goodwill, less accumulated amortization of $41,135,000 and $27,330,000, respectively 588,315 436,203 Capitalized data and other intangible assets, less accumulated amortization of $13,935,000 and $9,308,000, respectively 42,241 29,074 Capitalized software, less accumulated amortization of $11,280,000 and $5,015,000, respectively 35,004 20,676 Other 11,458 11,156 -------- -------- Total deferred charges and other assets 677,018 497,109 -------- -------- PROPERTY, PLANT AND EQUIPMENT, AT COST Computer equipment 77,119 56,765 Leasehold improvements 29,903 23,928 Other 17,654 16,611 -------- -------- 124,676 97,304 Less-Accumulated depreciation 56,470 41,666 -------- -------- Net property, plant and equipment 68,206 55,638 -------- -------- Total assets $978,934 $766,847 ======== ======== LIABILITIES AND COMMON SHAREHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable $ 31,693 $ 21,177 Accrued employee payroll and benefits 38,748 30,233 Federal income, property and other taxes payable 19,622 9,602 Deferred income 77,364 41,940 Current portion of long-term debt, including capital lease obligations 6,518 1,353 Other 49,946 28,691 -------- -------- Total current liabilities 223,891 132,996 -------- -------- LONG-TERM DEBT AND OTHER LIABILITIES Long-term debt, including capital lease obligations 241,822 238,123 Deferred income taxes 12,371 11,100 Other 24,633 13,625 -------- -------- Total Long-Term Debt and other Liabilities 278,826 262,848 -------- -------- Total liabilities 502,717 395,844 -------- -------- CONTINGENCIES (NOTE 8) REDEEMABLE PREFERRED STOCK (NOTE 9A) -- 16,874 -------- -------- COMMON SHAREHOLDERS' EQUITY (SEE ACCOMPANYING STATEMENT) 476,217 354,129 -------- -------- Total Liabilities and shareholders' equity $978,934 $766,847 ======== ========
The accompanying notes to the consolidated financial statements are an integral part of these statements. 24 4 PRIMARK CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMMON SHAREHOLDERS' EQUITY
(000s) For the Year Ended December 31 1996 1995 1994 - - ------------------------------------------------------------------------------------------------------------------- COMMON STOCK, without par value-authorized 65,000,000 shares, issued 27,067,951, 24,435,968, and 19,912,668 shares, respectively, at $0.02 stated value Balance-beginning of period $ 489 $ 398 $ 398 Purchase of subsidiary 44 -- -- Conversion of preferred stock to common 6 -- -- Issued for employee stock purchase and option plans 2 -- -- Issued in public offering -- 91 -- - - ------------------------------------------------------------------------------------------------------------------- Balance-end of period 541 489 398 - - ------------------------------------------------------------------------------------------------------------------- ADDITIONAL PAID-IN CAPITAL Balance-beginning of period 226,005 113,696 113,545 Purchase of subsidiary 59,906 -- -- Conversion of preferred stock to common-net of costs 4,738 -- -- Tax benefit relating to stock option plans 3,218 4,177 -- Issued for employee stock purchase plan 1,296 -- -- Option exercises 261 3,076 -- Gain on treasury shares 581 439 151 Issued in public offering -- 104,617 -- - - ------------------------------------------------------------------------------------------------------------------- Balance-end of period 296,005 226,005 113,696 - - ------------------------------------------------------------------------------------------------------------------- RETAINED EARNINGS Balance-beginning of period 141,846 124,964 112,648 Net income 37,108 18,316 13,750 Dividends on preferred stock (359) (1,434) (1,434) Change in year end of subsidiaries 348 -- -- - - ------------------------------------------------------------------------------------------------------------------- Balance-end of period 178,943 141,846 124,964 - - ------------------------------------------------------------------------------------------------------------------- TREASURY STOCK, at average cost, 0; 1,119,287 and 1,392,789 shares, respectively, held in treasury Balance-beginning of period (14,814) (13,145) (14,264) Repurchased -- (6,944) (764) Conversion of preferred stock to common 10,878 -- -- Reissued for stock option plans 2,881 3,342 55 Reissued for employee stock purchase plan 1,055 1,933 1,828 - - ------------------------------------------------------------------------------------------------------------------- Balance-end of period -- (14,814) (13,145) - - ------------------------------------------------------------------------------------------------------------------- UNEARNED COMPENSATION Balance-beginning of period (709) (1,674) (2,678) Amortization of unearned compensation 709 965 1,004 - - ------------------------------------------------------------------------------------------------------------------- Balance-end of period -- (709) (1,674) - - ------------------------------------------------------------------------------------------------------------------- CUMULATIVE FOREIGN CURRENCY TRANSLATION ADJUSTMENT Balance-beginning of period 1,312 542 (1,515) Translation adjustment (886) 1,224 3,070 Income tax benefit (expense) on adjustment 302 (454) (1,013) - - ------------------------------------------------------------------------------------------------------------------- Balance-end of period 728 1,312 542 - - ------------------------------------------------------------------------------------------------------------------- TOTAL COMMON SHAREHOLDERS' EQUITY $ 476,217 $ 354,129 $ 224,781 ===================================================================================================================
The accompanying notes to the consolidated financial statements are an integral part of these statements. 25 5 Primark Corporation and Subsidiaries Notes to the Consolidated Financial Statements 1. Summary of Significant Accounting Policies a. Principles of Consolidation and Basis of Presentation The consolidated financial statements include the accounts of Primark Corporation and its majority-owned subsidiaries (the "Company"). All significant intercompany transactions and balances have been eliminated. Investments in companies of fifty percent or less are accounted for using the equity method. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Effective January 1996, Datastream International Limited and affiliates and Vestek changed their year-end reporting period from November 30 to December 31. The change was made to provide more timely information and enhance comparability. The operating results for December 1995 were credited directly to retained earnings. Cash flow activity for December 1995 has been reflected as a single line item in the operating activities section of the Consolidated Statements of Cash Flows. Certain reclassifications have been made to prior years' statements to conform with the 1996 presentation. All of the prior periods have been restated to separately present continuing operations and discontinued operations (Note 3). b. Foreign Currency Translation The functional currency for most of the Company's foreign operations is the applicable local currency. Foreign currency accounts are translated into U.S. dollars using current exchange rates in effect at the balance sheet date for assets and liabilities, and weighted average monthly exchange rates during the period for revenues and expenses. Adjustments resulting from translating foreign functional currency financial statements into U.S. dollars are reported as a separate component of shareholders' equity. Gains and losses resulting from transactions and certain balance sheet accounts denominated in currencies other than the applicable functional currency are included in income. The net effect of changes in cash are separately identified in the consolidated statement of cash flows. c. Derivative Financial Instruments The Company enters into currency exchange and interest rate swap agreements to minimize interest rate and foreign exchange risk. Gains and losses related to qualifying accounting hedges of firm commitments are deferred and recognized in income when the hedged transaction occurs. Gains and losses from financial instruments which do not qualify for hedge accounting are marked to market and recognized as a gain or loss in the current period. The Company does not hold or issue derivative financial instruments for trading purposes. d. Revenue Recognition Revenue derived from subscription contracts are generally billed in advance of services provided. Amounts billed in advance are recorded to deferred income and recognized ratably over the period in which services are performed. Revenues under cost reimbursement type contracts are recorded as work is performed. Revenues derived from fixed-price contracts are recorded using the percentage-of-completion method measured by costs incurred to date to estimated total costs for each contract. Revenues derived from time and materials contracts are recorded at contractual rates as work is performed and costs are incurred. Revisions in estimates of costs and profits related to contracts are reflected in income currently. Provisions for estimated losses on contracts are recorded to income when identified. e. Cash and Cash Equivalents Cash and cash equivalents represent cash and short-term, highly liquid investments with original maturities of three months or less. f. Goodwill Goodwill represents the excess of the purchase price over the fair value of net identifiable assets acquired and is amortized over the estimated useful lives ranging from 20 to 40 years. The Company evaluates the net carrying value of all long-lived assets, including intangibles and goodwill, for recoverability based upon the undiscounted future cash flows associated with these assets. Management believes there have been no impairments of these assets. g. Capitalized Software Costs related to the conceptual formulation and design of software are expensed as incurred. Costs incurred subsequent to establishment of technological feasibility are capitalized and amortized over periods ranging from 3 to 5 years. Costs to support or service software are expensed as incurred. 26 6 Primark Corporation and Subsidiaries Notes to the Consolidated Financial Statements h. Capitalized Data and Other Intangible Assets Costs incurred to update and maintain the Company's database assets are expensed as incurred. Costs associated with the purchase of historical data not currently part of the Company's database assets, as well as the cost of initiating a new database product, are capitalized. Other intangible assets and liabilities consist of non-compete covenants, trademarks and unfavorable lease commitments. Data and other intangibles are amortized on a straight-line basis over periods ranging from 3 to 20 years. i. Property and Equipment Computer equipment and other property are recorded at cost and depreciated on a straight-line basis over their estimated useful lives, ranging from 3 to 10 years. Leasehold improvements are amortized over the shorter of the remaining life of the lease or the estimated useful life of the improvement. j. Income Taxes Income tax expense is based on reported earnings before income taxes. Deferred income taxes reflect the impact of temporary differences between assets and liabilities recognized for financial reporting purposes and such amounts recognized for tax purposes. Deferred tax balances are adjusted to reflect changes in tax rates expected to be in effect during the periods in which the temporary differences reverse. As temporary differences reverse, the related deferrals are recorded to income. k. Earnings Per Share Earnings per share is computed by dividing income after deduction of preferred stock dividends by the weighted average number of common and common equivalent shares outstanding during the applicable periods. Common equivalent shares result from the assumed exercise of outstanding stock options, reduced by the number of shares that could be purchased from the proceeds of such exercise at the average market price of the Company's common stock. Common equivalent shares of 1,742,000, 1,452,000 and 1,399,000 shares were included in the computation of earnings per share amounts for the years ended December 31, 1996, 1995 and 1994, respectively. Earnings per share assuming full dilution have not been disclosed for any year presented as they do not materially differ from primary earnings per share. l. Accounting for Stock-Based Compensation Statement of Financial Accounting Standards ("SFAS") No. 123, "Accounting for Stock-Based Compensation," encourages, but does not require companies to record compensation cost for stock-based employee compensation plans at fair value. The Company has chosen to continue to account for stock-based compensation using the intrinsic value method prescribed in Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees," and related Interpretations. See Note 9 for the disclosures required by SFAS 123. 2. Acquisitions During the three years ending December 31, 1996, the Company made the acquisitions set forth below, each of which has been accounted for as a purchase. Accordingly, the purchase price has been allocated to the identifiable net assets acquired. The excess of the purchase price over the estimated fair value of net assets acquired has been allocated to goodwill and is amortized on a straight line basis over periods ranging from 20 to 40 years. Future adjustments to the total purchase price allocation, if any, are not expected to materially affect the Company's finacial statement. The consolidated financial statements include the operating results of each business from the date of acquisition. a. Fiscal 1996--Summary of Acquisition Costs
- - ------------------------------------------------------------------------------------------- ICV Worldscope The Yankee DAFSA (000s) Group - - ------------------------------------------------------------------------------------------- Cash $ 40,316 $5,000 $31,000 $ 9,000 Stock Issued 59,950 -- -- -- Notes Issued 8,250 -- -- -- Receivable Forgiven -- 3,889 -- -- Accounts Payable -- -- 2,740 -- Acquisition Fees 3,737 -- 94 199 - - ----------------------------------------------------------------------------------------------- Total Consideration $112,253 $8,889 $33,834 $ 9,199 Acquired Cash (16,309) (353) (1,600) -- - - ----------------------------------------------------------------------------------------------- Net Consideration $ 95,944 $8,536 $32,234 $ 9,199 - - ----------------------------------------------------------------------------------------------- Net Excess of Purchase Price over Fair Value $112,927 $4,406 $29,696 $13,563
ICV On October 24, 1996, the Company acquired all the outstanding stock of ICV Limited. The purchase price, excluding fees, consisted of $24,007,000 in net cash, 2,200,000 shares of Primark common stock at a $27.25 market value and $8,250,000 in six year notes (the "Notes"), issued by the Company to the sellers. The Notes, which are supported by a bank credit agreement (Note 6b), require interest to be paid at LIBOR adjusted quarterly. ICV supplies a variety of real-time data and news products to equity traders and investors in London and throughout the United Kingdom. 27 7 Primark Corporation and Subsidiaries Notes to the Consolidated Financial Statements Worldscope On October 15, 1996, the Company acquired an additional 30% ownership interest in Worldscope for $5,000,000, giving Primark a controlling ownership interest of 80%. Prior to the transaction, Worldscope was a 50% partnership accounted for under the equity method. In connection with the transaction, Primark and the previous 50% owner each forgave working capital advances equal to $3,889,000. Beginning October 15, 1997, the sellers of Worldscope have the option to sell their remaining 20% ownership to Primark, in increments of not less than 5%. As of October 15, 2006, Primark has the right to purchase an additional 15% of Worldscope. The Yankee Group On August 9, 1996, the company acquired Yankee Group Research, Inc. (the "Yankee Group"), pursuant to the terms of a stock purchase agreement by and between the Company and the shareholders of the Yankee Group. The purchase price included a cash payment of $31,000,000 on August 9, 1996, a guaranteed payment of $2,740,000 on the second anniversary of the closing, and future contingent payments ranging from $0 to a maximum of $31,000,000. Of the contingent payout amounts, $4,260,000 will be paid in 1997 if certain 1996 revenue and operating income results are achieved; the remainder, if any, is payable at the end of the three year contingency period. Future contingent payments, if any, will be recorded to goodwill when incurred. The Yankee Group provides market research on telecommunications and computer systems. DAFSA On June 18, 1996, Datastream International (France) S.A. acquired all of the outstanding shares of Groupe DAFSA for $9,000,000 in cash. DAFSA supplies company account information on all listed companies in France and ownership information on French companies through print and CD-ROM. DAFSA produces annual sector analysis and reports and provides independent research coverage and earnings estimates on major French companies. b. Fiscal 1995 Disclosure On June 29, 1995, the Company acquired the entire equity interest of Disclosure Incorporated and certain of its affiliates including I/B/E/S International, Inc. and a 50% ownership of Worldscope for a total purchase price of $200,000,000 in cash. The Company obtained $215,000,000 of external financing, of which $185,000,000 was used to finance the cash consideration paid in the acquisition. The Company incurred fees of approximately $6,076,000 associated with the acquisition. The excess of the purchase price over the estimated fair value of total net assets acquired of approximately $193,713,000 was recorded to goodwill. Disclosure is a provider of "as reported" and abstracted financial information, primarily derived from Securities and Exchange Commission filings and supplemented with information from companies, stock exchanges and other sources, both in the United States and worldwide. I/B/E/S is a source of earnings estimates for investors, financial institutions and portfolio managers on a global basis. The following unaudited pro forma financial information reflects the consolidated results of operations of the Company for the years ended December 31, 1996 and 1995 as though the acquisitions had occurred on January 1 of the respective year. This information has been prepared for comparative purposes only and does not necessarily represent actual operating results that may be achieved in the future or that would have occurred had the acquisitions been consummated on January 1, 1995 or 1996.
- - ------------------------------------------------------------------------------- (000s) except Earnings Per Share 1996 1995 - - ------------------------------------------------------------------------------- Operating revenues $819,762 $728,713 Income from continuing operations $ 26,843 $ 11,742 Net income applicable to common stock $ 35,637 $ 10,777 Earnings per share from continuing operations $ 0.94 $ 0.45 - - --------------------------------------------------------------------------------
c. Fiscal 1994 Vestek On June 30, 1994, the Company acquired all of the assets and assumed substantially all of the liabilities of Vestek Systems, Inc. for a total purchase price of approximately $6,900,000 in cash. Approximately $6,000,000 was recorded as goodwill. Vestek is a provider of financial information services and investment software. 28 8 Primark Corporation and Subsidiaries Notes to the Consolidated Financial Statements 3. Dispositions and Other Charges On September 30, 1996, the Company sold all of the issued and outstanding stock of Primark Storage Leasing Corporation ("PSLC"), for $14,300,000 in cash. The disposal of PSLC resulted in an after-tax gain of approximately $8,400,000 and eliminated $28,700,000 of non-recourse debt from the Company's balance sheet. The purchaser has agreed to indemnify the Company from and against all expenses and liabilities that Primark may incur with respect to any adverse environmental condition relating to PSLC's natural gas storage fields. The results of PSLC's operations have been reported separately as a component of discontinued operations. Prior year consolidated financial statements have been restated to present the PSLC business as a discontinued operation. In July 1994, the Company restructured two promissory notes received in connection with the August 1993 sale of Westmark. The Company agreed to cancel the notes with a remaining value of $2,195,000 in exchange for a $500,000 cash payment, 400,000 shares of Network Financial Services, Inc. common stock and a full release from all indemnity obligations given in connection with the Westmark sale. On June 30, 1994, the Company recorded a pre-tax charge of $1,251,000 reflecting the write-off of these notes. The loss has been recorded to continuing operations in other deductions, as the revaluation of these notes occurred subsequent to the disposal date. On May 20, 1994, the Company sold all of the issued and outstanding common stock of Wellmark Incorporated for $6,500,000 in cash. The sale resulted in a pre-tax gain of $1,781,000 which has been included in other income for 1994. The sale represented a disposal of a portion of the Company's information services business segment. Accordingly, Wellmark's operating results through the date of disposal, along with the gain resulting therefrom, have been included as part of income from continuing operations. 4. Unbilled Receivables Unbilled receivables represent recoverable costs and accrued profit not billed to customers that will be billed on the basis of contractual terms and delivery schedules. At December 31, 1996 and 1995, U.S. Government unbilled receivables included a retainage of $5,126,000 and $4,418,000 respectively. Of the retainage amount at December 31, 1996, $3,083,000 is expected to be collected after one year, subject to government audit and approval. All other unbilled receivables are due within one year.
- - --------------------------------------------------------------- December 31 (000s) 1996 1995 - - --------------------------------------------------------------- U.S.Government $21,230 $19,536 Commercial 19,678 11,347 - - --------------------------------------------------------------- Total unbilled receivables $40,908 $30,883 - - ---------------------------------------------------------------
5. Leases The Company leases a variety of assets principally under noncancellable operating lease agreements, including office facilities, real property, computer and office equipment, and heavy aircraft maintenance facilities and related equipment. There leases expire at various dates through 2021. Certain of TASC's office facilities are leased from a related party under operating leases which expire through the year 2006. Rent expenses under these leases were $3,756,000, $3,750,000, and $3,708,000 for the years ended 1996, 1995, and 1994, respectively. Estimated future minimum commitments under noncancellable leases are shown below.
- - -------------------------------------------------------------------------------- 1997 $1,707 $ 33,633 1998 1,155 28,037 1999 402 21,023 2000 277 18,478 2001 139 15,954 Thereafter - 100,672 - - -------------------------------------------------------------------------------- Total minimum lease payments 3,680 $217,797 -------- Amounts representing interest and other (349) - - -------------------------------------------------------------- Present Value of net minimum payments 3,331 Current portion (1,394) - - -------------------------------------------------------------- Long-term obligations $1,937 - - --------------------------------------------------------------------------------
29 9 Primark Corporation and Subsidiaries Notes to the Consolidated Financial Statements Total rent expense for all operating leases, including TASC's related party rentals, was $33,953,000, $27,524,000, and $20,982,000 (net of sublease rental of $290,000, $250,000, and $1,023,000) for the years ended December 31, 1996, 1995 and 1994, respectively. 6. Short-Term and Long-Term Debt a. Short-Term Debt Information relative to short-term bank borrowings of the Company is shown below.
- - -------------------------------------------------------------------------------------- (000s) 1996 1995 1994 - - -------------------------------------------------------------------------------------- Outstanding borrowings at December 31 $ -- $ -- $ -- Available for future borrowings at December 31 $74,650 $75,000 $75,000 Weighted average effective interest rate on average bank borrowings 8.3% 8.0% 6.1% Aggregate borrowings outstanding: Maximum outstanding $ 1,871 $64,324 $21,858 Average outstanding during the year $ 17 $22,661 $ 6,653 - - --------------------------------------------------------------------------------------
On June 29, 1995, the Company entered into a $75,000,000 revolving credit facility (the "Credit Facility") to replace a credit agreement due to expire in 1996. As a result of entering into this facility, the Company recognized an extraordinary after-tax loss of $534,000 for the write-off of unamortized debt issue costs. The Credit Facility expires on October 15, 2000. Interest on outstanding borrowings under the Credit Facility is based upon performance pricing and was payable at rates ranging from 1.00% to 1.50% above the current prevailing LIBOR rate during 1996; or, at the Company's option, at 0.50% above the prime rate of interest. Commitment fees are payable quarterly at a rate of 0.375% per annum on the average daily unused portion of the facility. The Credit Facility contains various restrictive covenants which, among other things, require the Company to maintain certain minimum levels of consolidated net worth and specific consolidated liquidity and long-term solvency ratios. The Credit Facility is secured by a pledge of the outstanding common stock of certain of Primark's subsidiaries. On June 29, 1995, TASC, a wholly-owned subsidiary of Primark, entered into a $15,000,000 unsecured Loan Agreement (the "Loan") due June 28, 1996 in connection with the Company's acquisition of Disclosure. Interest of approximately 7.625% was charged on outstanding borrowings under the Loan. On December 6, 1995, the Loan was retired through proceeds received from the Company's issuance of common stock (Note 9a). b. Long-Term Debt The Company's outstanding long-term debt, including capital lease obligations, are shown below.
- - ------------------------------------------------------------------------------- December 31 (000s) 1996 1995 - - ------------------------------------------------------------------------------- Primark 8.75% Senior Notes $112,000,000 due 2000 $111,291 $111,140 Primark bank Term Loan due through 2002 125,000 125,000 Notes to Sellers 8,250 - Capital lease obligations and other 3,799 3,336 - - ------------------------------------------------------------------------------- Total debt and capital lease obligations 248,340 239,476 Less-current maturities 6,518 1,353 - - ------------------------------------------------------------------------------- Long-term debt and capital lease obligations $241,822 $238,123 - - -------------------------------------------------------------------------------
Required principal payments on long-term debt and notes payable over the next five years, excluding the Senior Notes and capital lease and other obligations, are $5,000,000 in 1997, $15,000,000 in 1998, $20,000,000 in 1999, $30,000,000 in 2000, and $35,000,000 in 2001. Primark's 8.75% Senior Notes due 2000 ("Senior Notes") are carried at their principal amount due at maturity less unamortized discount. Interest on the Senior Notes is payable semi-annually on April 15 and October 15. The Senior Notes are unsecured obligations of the Company, contain no mandatory sinking fund or redemption requirements, and are redeemable in whole or in part at the option of the Company, on or after October 15, 1997 at redemption prices ranging from 104.375% in 1997 to 100.00% in 1999 and thereafter, plus accrued interest. Under certain circumstances, the Company may redeem up to 35% of the originally issued principal amount of the Senior Notes prior to October 15, 1997, at a price of 109.00% plus accrued interest. The Indenture pursuant to which the Senior Notes were issued contains various restrictive covenants. Under the most restrictive covenants, the Company is restricted from paying cash dividends on its common stock, repurchasing its common stock or making certain other payments which, in the aggregate, exceed the sum of: (i) $10,000,000; (ii) 50% of the Company's consolidated net income (cumulative from the date of issuance of the Senior Notes); plus (iii) 100% of the net proceeds received from sales of the Company's common stock for cash. On June 29, 1995, the Company entered into a $125,000,000 Term Loan Agreement (the "Term Loan") due June 30, 2002. Principal payments are due semi-annually commencing on December 31, 1997. 30 10 Primark Corporation and Subsidiaries Notes to the Consolidated Financial Statements Interest on outstanding borrowings under the Term Loan was payable at rates ranging from 1.25% to 2.00% above the current prevailing LIBOR rate of interest for 1996; or, at the Company's option, at 0.75% above the prime rate of interest. The Term Loan contains various restrictive covenants which, among other things, require the Company to maintain certain minimum levels of consolidated net worth and specific consolidated liquidity and long-term solvency ratios. The Term Loan is secured by a pledge of the outstanding common stock of certain of the Company's subsidiaries. On October 24, 1996, the Company entered into five loan note agreements totaling $8,250,000 in connection with the purchase of ICV (Note 2). The Notes are due October 24, 2002. Interest on the Notes is payable quarterly at the current prevailing LIBOR rate. In connection with the Notes, the Company entered into a $10,250,000 Credit Agreement (the "Credit Agreement") due November 15, 2002. Pursuant to the terms of such Credit Agreement, standby letters of credit were to provide credit enhancement for the payment of the Notes. Interest on outstanding borrowings under the Credit Agreement is based upon performance pricing and payable at 1.50% during 1996. Letter of Credit fees are based upon performance pricing and payable quarterly at a rate of 0.25% per annum on the average daily unused portion of the facility. As of December 31, 1996, the Company had no outstanding borrowing under the Credit Agreement. Deferred debt issue costs are amortized over the terms of the related debt, ranging from 3 to 18 years. 7. Financial Instruments a. Foreign Exchange Risk Management The Company enters into forward exchange contracts and purchases currency options to reduce the exposure of foreign currency fluctuations associated with certain firm commitments and anticipated cash flows. The Company's principal strategy is to protect the net cash flow from foreign customers' contracts. As these contracts are typically under two years in length, most of the derivative financial instruments are similarly two years or less in duration. The Company principally enters into contracts to deliver foreign currencies for U.S. dollars at agreed-upon exchange rates. Other contracts include the purchase of British pounds for U.S. dollars. Counterparties to these agreements are major international financial institutions. The tables below illustrate the U.S. dollar equivalent of foreign exchange contracts at December 31, 1996 and 1995 along with unrecorded gross unrealized gains and losses.
- - --------------------------------------------------------------------------------- December 31 (000s) 1996 - - --------------------------------------------------------------------------------- Notional Gross Unrealized Gross Unrealized Amount Gains Deferred Losses Deferred FORWARD EXCHANGE CONTRACTS: Japanese Yen $ 2,593 $120 $ (7) U.S. Dollars/U.K. Pound Sterling 3,956 - (43) Deutsche Mark 3,804 17 - Swiss Franc 2,451 90 - French Franc 1,452 5 (1) Swedish Krona 4,432 53 (11) Other 5,460 26 (35) - - --------------------------------------------------------------------------------- $24,148 $311 $( 97) - - --------------------------------------------------------------------------------- OPTION CONTRACTS: Japanese Yen $ 3,657 $126 $ - U.S. Dollars/U.K. Pound Sterling 795 216 - Deutsche Mark 6,931 94 - Swiss Franc 4,962 167 - French Franc 3,402 40 - Other 2,816 16 (16) - - --------------------------------------------------------------------------------- $22,563 $659 ($ 16) - - ---------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------- December 31 (000s) 1995 - - --------------------------------------------------------------------------------- Notional Gross Unrealized Gross Unrealized Amount Gains Deferred Losses Deferred FORWARD EXCHANGE CONTRACTS: Japanese Yen $ 5,199 $495 $ - Deutsche Mark/Sterling 2,986 - - Deutsche Mark 4,836 161 (133) Swiss Franc 3,798 165 (66) French Franc 2,827 41 (44) Other - - - - - --------------------------------------------------------------------------------- $19,646 $862 $(243) - - --------------------------------------------------------------------------------- OPTION CONTRACTS: Japanese Yen $876 $ 53 $ - Deutsche Mark/Sterling 2,800 - (13) Deutsche Mark 4,136 2 (24) Swiss Franc 3,582 - (26) French Franc 2,830 - (22) Other 726 4 (1) - - --------------------------------------------------------------------------------- $14,950 $ 59 $ (86) - - ---------------------------------------------------------------------------------
31 11 Primark Corporation and Subsidiaries Notes to the Consolidated Financial Statements b. Interest Rate Swap Agreement On August 1, 1995, the Company entered into an interest rate swap agreement with a major bank, having a notional principal amount of $18,333,000. The swap agreement effectively changed the interest rate of a portion of Primark's long-term debt from a floating rate to a 6.1% fixed rate. This swap agreement expires in December of 1999. As of December 31, 1996, the notional principal amount outstanding was $15,000,000. Though the Company is exposed to credit and market risk in the event of future non-performance by the bank, management does not anticipate that such an event will occur. c. Fair Value of Financial Instruments The carrying and estimated fair value of certain of the Company's financial instruments are shown below.
- - --------------------------------------------------------------------------------- CARRYING VALUE ESTIMATED FAIR VALUE December 31 (000s) 1996 1995 1996 1995 - - --------------------------------------------------------------------------------- Forwards $ 1,301 $ 109 $ 1,515 $ 728 Options $ 343 $ 335 $ 986 $ 308 Interest rate swaps $ -- $ -- $ (45) $ (298) 8.75% Senior Notes $111,291 $111,140 $114,100 $ 114,800 Redeemable preferred stock $ -- $ 16,874 $ -- $ 34,928 - - --------------------------------------------------------------------------------
Estimated fair values of these financial instruments at December 31, 1996 and 1995 were based upon quotes obtained from investment and commercial bankers using comparable securities. The fair values of currency forward contracts and purchased currency options were estimated based on quoted market prices of contracts with similar terms. Other financial instruments have been excluded as their carrying value approximates their market value. 8. Contingencies On June 24, 1994, a jury in a civil case in the Massachusetts Superior Court (the "Court") returned an unfavorable verdict against the two founders of TASC, and against TASC itself. The suit was brought by a former employee regarding a TASC stock transaction that took place in 1976, prior to the Company's acquisition of TASC in 1991. On June 28, 1994, the Court ordered that judgment be entered on the verdict requiring the two founders (but not TASC itself) to disgorge $19,800,000. Such amount accrues post-judgment interest at a statutory rate. As an alternative course of action, the plaintiff may pursue the two founders and TASC, jointly and severally, for $48,600. Based on the adjudication, the Company has denied requests of the two founders for indemnification. Certain post-verdict motions, including a motion for judgment notwithstanding the verdict, and in the alternative, a motion for a new trial, are pending. While the outcome of these motions cannot be predicted with certainty, the Company believes it will not be required to pay any portion of this judgment. The Company and its subsidiaries are involved in certain other administrative proceedings and matters concerning issues arising in the ordinary course of business. Management cannot predict the final disposition of such issues, but believes that adequate provision has been made for the probable losses and the ultimate resolution of these proceedings will not have a material adverse effect on the Company's financial condition, results of operations or financial liquidity. 9. Shareholders' Equity a. Common Stock On October 24, 1996, the Company issued 2,200,000 shares of its common stock as part of the purchase price for ICV Limited. These shares, which are subject to a one year sale restriction, are expected to be registered on or before October 24, 1997 at the Company's expense. On May 2, 1996, the Company received notification to convert the total outstanding shares of Primark Series A, 8.5% Cumulative Convertible Preferred Stock into shares of Primark common stock. The 674,943 preferred shares plus accrued and unpaid dividends were converted into 1,164,276 shares of Primark common stock based upon the stated conversion rate of $14.49. The preferred shares were held entirely by the Profit Sharing and Stock Ownership Plan of TASC, a wholly-owned subsidiary of the Company. 32 12 Primark Corporation and Subsidiaries Notes to the Consolidated Financial Statements On December 5, 1995, the Company completed an equity offering in which it sold 4,068,200 shares of its common stock and offered an additional 288,000 shares for certain selling shareholders. The sale of common stock together with option proceeds related to the selling shareholders provided the Company $107,784,000, net of commissions and expenses. A portion of the proceeds were used to pay down the outstanding balance of $48,166,000 on the Company's revolving credit agreement and to prepay the $15,000,000 TASC Loan (Note 6a). Changes in the number of shares of the Company's common stock are shown below.
- - --------------------------------------------------------------------------------- December 31 1996 1995 1994 - - --------------------------------------------------------------------------------- COMMON STOCK ISSUED 27,067,951 24,435,968 19,912,668 COMMON STOCK HELD IN TREASURY: Balance - beginning of period (1,119,287) (1,392,789) (1,534,463) Treasury shares acquired -- (279,154) (61,030) Treasury shares reissued: Employee stock purchase plan 79,683 203,647 196,617 Exercise of Stock Options 217,715 349,009 6,087 Conversion of Preferred Stock 821,889 -- -- - - ------------------------------------------------------------------------------- Balance - end of period -- (1,119,287) (1,392,789) - - ------------------------------------------------------------------------------- COMMON STOCK OUTSTANDING 27,067,951 23,316,681 18,519,879 - - -------------------------------------------------------------------------------
In November 1993, the Company's Board of Directors authorized the repurchase of up to 1,000,000 shares of the Company's common stock from time to time through open market and/or privately negotiated transactions. During 1994, the Company repurchased 61,030 shares of its outstanding common stock in the open market. During 1995, shares of the Company's common stock were delivered to satisfy the exercise price of stock options and shares were withheld from the exercise of stock options to satisfy the related tax withholding requirements. The Company's Rights Agreement is designed to deter coercive or unfair takeover tactics, and to prevent a buyer from gaining control of the Company without offering a fair price to all of its shareholders. The Rights Agreement, which expires on January 25, 1998, generally becomes effective when an "Acquiring Person" (as defined in the agreement) beneficially owns 20% or more of the outstanding shares of Primark's common stock. In general, upon a "Triggering Event" (as defined in the agreement), each share of Primark's Common Stock carries the right to convert the corresponding "Attached Rights" (as defined in the agreement) into one share of common stock at a specified price. At December 31, 1996, common stock reserved for issuance under the Rights Agreement was 27,067,951 shares. b. Employee Stock Ownership and Profit Sharing Plans Effective January 1, 1997 the Primark Corporation Employee Stock Ownership Plan was renamed the Primark Corporation Savings and Stock Ownership Plan and revised to provide for 401(K) contributions, employer matching contributions and certain other changes. The plan, which covers all employees of Primark and certain subsidiaries, was pre-funded in 1989 with 965,000 shares of the Company's common stock which have been allocated to participants, based upon a percentage of compensation, through 1996. No contributions were made to this plan during 1996. TASC's Profit Sharing and Stock Ownership Plan covers substantially all of its employees. Employer contributions primarily are determined by TASC's Board of Directors at amounts not exceeding the maximum amount deductible for Federal income tax purposes. Contributions to this plan were $11,214,000, $10,625,000, and $9,680,000 for the years ended December 31, 1996, 1995 and 1994, respectively. c. Employee Stock Purchase and Stock Option Plan Established in 1992, the Primark Corporation Employee Stock Purchase Plan is available for all employees of Primark and certain subsidiaries. Under this plan, employees may purchase, through periodic payroll deductions, up to a maximum of 1,000,000 shares of the Company's common stock at 85% of the lower of the average market price of such shares either at the beginning or end of each six month offering period. The Primark Corporation 1992 Stock Option Plan provides for the granting of options to purchase common stock to officers and certain key employees of Primark and its subsidiaries. The Primark Corporation Stock Option Plan for Non-Employee Directors provides for the granting of options to purchase shares of common stock to each director who is not an employee. Generally, options outstanding under the Company's stock option plans: (i) are granted at prices equal to the fair market value of the stock on the date of grant, (ii) vest within a five year period, and (iii) expire ten years subsequent to award. 33 13 Primark Corporation and Subsidiaries Notes to the Consolidated Financial Statements Changes in the number of shares under options granted under the Company's various stock option plans are shown below.
- - ----------------------------------------------------------------------------------------------------------------------------- 1996 1995 1994 ------------------------------------------------------------------------------------------ WEIGHTED Weighted Weighted AVERAGE Average Average EXERCISE Exercise Exercise SHARES PRICE Shares Price Shares Price - - ----------------------------------------------------------------------------------------------------------------------------- Outstanding at January 1 4,213,718 $ 10.07 4,351,285 $ 8.75 3,627,360 $ 7.94 Granted 464,932 34.38 683,786 16.31 798,000 13.25 Exercised (251,068) 10.00 (804,109) 8.18 (6,087) 10.60 Canceled (51,717) 23.09 (17,244) 11.78 (67,988) 12.52 - - ----------------------------------------------------------------------------------------------------------------------------- Outstanding at December 31 4,375,865 $ 12.51 4,213,718 $ 10.07 4,351,285 $ 8.75 - - ----------------------------------------------------------------------------------------------------------------------------- Available for future grant at December 31 687,560 675,331 993,123 - - -----------------------------------------------------------------------------------------------------------------------------
Stock options available for grant in any one year under Primark Corporation's 1992 Stock Option Plan may not exceed 1.5% of the Company's outstanding common stock as of January 1 of each year, plus any excess of available stock options not granted from previous years. Accordingly, stock options available for grant at December 31, 1996 included 427,612 stock options that are available for grant during 1997 under Primark Corporation's 1992 Stock Option Plan. The following table sets forth information regarding options outstanding at December 31, 1996.
- - ----------------------------------------------------------------------------------------------------------------------------- Options Outstanding Options Exercisable ---------------------------------------------------------------------------------------------------------- Range of Number Weighted Weighted Number Weighted Exercise Prices Outstanding at Average Average Exercisable at Average 12/31/96 Remaining Life Exercise Price 12/31/96 Exercise Price - - ----------------------------------------------------------------------------------------------------------------------------- $ 4.51-$7.63 1,530,784 1.22 $ 4.70 1,530,784 $ 4.70 $ 8.38-$12.13 851,514 5.08 $11.20 844,749 $11.20 $12.75-$13.50 774,200 6.80 $13.36 466,717 $13.28 $14.00-$25.25 771,451 7.84 $15.99 449,785 $15.27 $26.00-$39.75 447,916 9.39 $34.18 140,500 $38.94 - - ------------------------------------------------------------------------------------------------------------------------------ $ 4.51-$39.75 4,375,865 4.96 $12.51 3,432,535 $10.25 - - ------------------------------------------------------------------------------------------------------------------------------
The fair value of options on their grant date, including the valuation of the option feature implicit in the Company's stock purchase plan, was measured using the Black-Scholes option pricing model. The fair value of options on their grant date and key assumptions used to apply this model are shown below.
- - ------------------------------------------------------------------------------- December 31 1996 1995 - - ------------------------------------------------------------------------------- Grant date fair value $13.49 $7.12 Range of risk-free interest rates 5.03% TO 6.79% 5.77% to 7.59% Range of expected life of option grants 4 TO 9 YEARS 4 to 9 years Expected volatility of underlying stock 30.9% 30.9% - - -------------------------------------------------------------------------------
It should be noted that the option pricing model used was designed to value readily tradable stock options with relatively short lives. The options granted to employees are not tradable and have contractual lives of up to ten years. However, management believes that the assumptions used and the model applied to value the awards yields a reasonable estimate of the fair value of the grants made under the circumstances. The Company uses the intrinsic value method to measure compensation expense associated with grants of stock options to employees. Had compensation cost been determined based upon the fair value at the grant date for awards under these plans, reported net income and earnings per share would have been as follows:
- - ------------------------------------------------------------------------------- December 31 (000s except per share data) 1996 1995 - - ------------------------------------------------------------------------------- Net income $33,428 $16,360 Net income applicable to common stock $33,069 $14,926 Earnings per share $ 1.25 $ 0.72 - - -------------------------------------------------------------------------------
The effects of applying SFAS 123 in this pro forma disclosure include only the effects of grants made subsequent to January 1, 1995 and, accordingly, are not indicative of future amounts. 34 14 Primark Corporation and Subsidiaries Notes to the Consolidated Financial Statements 10. Income Taxes
- - -------------------------------------------------------------------------------------------------------- December 31 (000s) 1996 1995 1994 - - -------------------------------------------------------------------------------------------------------- FEDERAL AND OTHER INCOME TAXES CONSISTED OF: Current provision $ 22,205 $ 14,198 $ 11,847 Deferred provision (benefit) - net (998) 665 (2,353) - - -------------------------------------------------------------------------------------------------------- Total Federal and other income tax expense $ 21,207 $ 14,863 $ 9,494 - - -------------------------------------------------------------------------------------------------------- RECONCILIATION BETWEEN STATUTORY AND ACTUAL INCOME TAXES: Income from continuing operations $ 27,955 $ 17,847 $ 12,684 Income tax expense $ 21,207 14,863 9,494 - - -------------------------------------------------------------------------------------------------------- Book pretax income $ 49,162 $ 32,710 $ 22,178 - - -------------------------------------------------------------------------------------------------------- Statutory Federal income taxes at a rate of 35% $ 17,207 $ 11,449 7,762 Adjustments to Federal income taxes: Amortization of goodwill 4,337 3,110 2,361 State income taxes - net 1,696 893 24 Effect of foreign tax rates (335) (99) (27) Adjustment of Federal income taxes provided for in prior years (1,101) (205) (419) Other - net (597) (285) (207) - - -------------------------------------------------------------------------------------------------------- Total Federal and other income tax expense $ 21,207 $ 14,863 $ 9,494 - - --------------------------------------------------------------------------------------------------------
The 1996 adjustment of Federal income taxes provided in prior years is primarily the result of the company settling seven open tax years at lower than anticipated levels. Gross deferred income tax liabilities and benefits comprising the Company's net deferred income tax liability are shown below.
- - ------------------------------------------------------------------------------- December 31 (000s) 1996 1995 - - ------------------------------------------------------------------------------- Deferred income tax liability $27,767 $22,140 Deferred tax asset (13,488) (9,208) - - ------------------------------------------------------------------------------- Net deferred income tax liability 14,279 12,932 Current liability 1,908 1,832 - - ------------------------------------------------------------------------------- Non-current liability $12,371 $11,100 - - -------------------------------------------------------------------------------
The tax effects of significant temporary differences which gave rise to the net deferred income tax liability are shown below.
- - ------------------------------------------------------------------------------- December 31 (000s) 1996 1995 - - ------------------------------------------------------------------------------- Intangible assets $10,003 $ 7,370 Unbilled receivables 8,968 7,567 Property, plant and equipment 777 1,178 Unearned ESOP compensation (2) 248 Accruals not currently deductible (2,272) (1,817) Accrued vacation (2,326) (2,260) Other (869) 646 - - ------------------------------------------------------------------------------- Net deferred income tax liability $14,279 $12,932 - - -------------------------------------------------------------------------------
11. Segment and Geographic Information The Company primarily operates in the information services industry. Information services are comprised of two major classes, applied technology and financial information, which provide services and related products principally in the United States and the United Kingdom. Most of Primark's international sales are generated through its affiliated operation structure, which is located throughout Europe, Asia and the United States. The Company is also engaged in the transportation services industry as a provider of heavy aircraft maintenance. 35 15 Primark Corporation and Subsidiaries Notes to the Consolidated Financial Statements The Company's operations by industry segment and geographic region are presented in the following table on a stand-alone basis. Information presented includes acquired companies from their respective dates of acquisition (Note 2), and has been restated to exclude discontinued operations (Note 3).
- - --------------------------------------------------------------------------------------- INDUSTRY SEGMENTS (000s) 1996 1995 1994 - - --------------------------------------------------------------------------------------- Operating Revenues: Information Services (1) Applied Technology $391,440 $346,204 $312,251 Financial Information 269,323 184,776 110,942 Transportation Services 106,362 79,236 46,362 Corporate & Other (2) -- -- -- - - -------------------------------------------------------------------------------------- Consolidated $767,125 $610,216 $469,555 - - -------------------------------------------------------------------------------------- Depreciation & Information Services Amortization: Applied Technology $9,516 $9,430 $8,328 Financial Information 30,865 24,548 17,241 Transportation Services 1,204 952 622 Corporate & Other (2) 1,769 1,341 1,261 - - -------------------------------------------------------------------------------------- Consolidated $43,354 $36,271 $27,452 - - -------------------------------------------------------------------------------------- Operating Income Information Services (Loss): Applied Technology $33,547 $25,945 $24,281 Financial Information 33,435 26,901 12,423 Transportation Services 6,178 6,012 3,016 Corporate & Other (2) (6,839) (6,015) (6,199) - - -------------------------------------------------------------------------------------- Consolidated $66,321 $52,843 $33,521 - - -------------------------------------------------------------------------------------- Identifiable Assets: Information Services Applied Technology $234,171 $193,584 $194,372 Financial Information 609,917 480,341 240,538 Transportation Services 47,640 39,197 14,514 Corporate & Other (2) 87,206 53,725 18,745 - - -------------------------------------------------------------------------------------- Consolidated $978,934 $766,847 $468,169 - - -------------------------------------------------------------------------------------- Capital Expenditures: Information Services Applied Technology $4,137 $5,376 $7,314 Financial Information 18,721 9,038 9,458 Transportation Services 2,760 7,466 4,418 Corporate & Other (2) 632 765 1,307 - - -------------------------------------------------------------------------------------- Consolidated $26,250 $22,645 $22,497 - - --------------------------------------------------------------------------------------
- - -------------------------------------------------------------------------------------- GEOGRAPHIC REGIONS (000S) 1996 1995 1994 - - -------------------------------------------------------------------------------------- Operating Revenues: Domestic $603,908 $483,912 $368,554 United Kingdom 119,600 97,094 76,441 Other International 82,328 62,831 45,933 Affiliate Transfers (3) (38,711) (33,621) (21,373) ------------------------------------------------------------------------------------- Consolidated $767,125 $610,216 $469,555 ------------------------------------------------------------------------------------- Operating Income: Domestic $42,147 $30,309 $16,727 United Kingdom 21,441 17,130 12,662 Other International 2,733 5,404 4,132 ------------------------------------------------------------------------------------- Consolidated $66,321 $52,843 $33,521 ------------------------------------------------------------------------------------- Identifiable Assets: Domestic $562,048 $556,146 $260,903 United Kingdom 353,098 163,647 176,100 Other International 63,788 47,054 31,166 ------------------------------------------------------------------------------------- Consolidated $978,934 $766,847 $468,169 -------------------------------------------------------------------------------------
(1) Information services provided to the U.S. Government accounted for $336,579,000 (44%), $300,566,000 (49%), and $273,541,000 (58%) of total operating revenues for the years ended December 31, 1996, 1995, and 1994, respectively. (2) Corporate and other includes corporate accounts, eliminations and reclassifications, as well as the net assets of discontinued operations. (3) Affiliate transfers represent service fees received by Datastream's United Kingdom operation from its international affiliates. 36 16 Primark Corporation and Subsidiaries Notes to the Consolidated Financial Statements 12. Subsequent Events a. Acquisitions Baseline On January 6, 1997, the Company purchased all of the outstanding stock of Baseline for $40.7 million in cash. Baseline generated revenues estimated at $12.8 million for the twelve months ended October 31, 1996. Headquartered in New York City, Baseline has an office in Philadelphia and employs approximately 80 people. Baseline provides institutional investors with visual valuation graphics which portray financial market information to institutional accounts throughout the U.S., Canada and the United Kingdom. WEFA On February 7, 1997, the Company acquired all of the outstanding stock of WEFA Holdings, Inc. ("WEFA") for $45.0 million in cash. WEFA generated an estimated $28.6 million in revenues for the year ended December 31, 1996. Headquartered in Pennsylvania, WEFA has offices in Canada, Europe, and South Africa and employs over 150 economists. WEFA has leveraged the reputation of its founder, Nobel Laureate Lawrence R. Klein, and its historical affiliation with the Wharton School to become an international provider of value added economic information, software and consulting services to Fortune 1,000 companies, governments, universities and financial institutions. b. Refinancing On February 7, 1997, the Company entered into a $300 million refinancing arrangement to replace some of the funds expended for recent acquisitions and enhance liquidity for future opportunities. The new arrangement, comprised of a $75 million revolving credit facility and a $225 million term loan expiring in June 2004, replaces an outstanding $75 million revolving credit facility and a $125 million term loan (Note 6). Interest on the outstanding borrowings under the new credit facility and term loan are payable at rates ranging from 0.625% to 1.00% and 0.625% to 1.25%, respectively, above the current prevailing LIBOR rate of interest. The Company incurred costs of approximately $2.6 million in conjunction with the arrangement which will be amortized over the term of the debt. The early extinguishment of this debt will require a write-off of its related unamortized debt issue costs and generate an extraordinary after-tax loss of approximately $2 million in the first quarter of 1997. 37 17 Primark Corporation and Subsidiaries Notes to the Consolidated Financial Statements REPORT OF MANAGEMENT Management of Primark Corporation and its subsidiaries (the "Company") is responsible for the preparation and integrity of the accompanying consolidated financial statements and other financial information contained in this Annual Report. Management believes that all such information has been prepared in conformity with generally accepted accounting principles, and necessarily includes certain amounts that are based on management's judgments and estimates. The consolidated financial statements have been audited by Deloitte & Touche LLP, the Company's independent certified public accountants. Their audit was made in accordance with generally accepted auditing standards, as indicated in their report, and included a review of the Company's system of internal accounting controls and test of transactions to the extent they considered necessary to carry out their responsibilities. In management's opinion, the Company's system of internal accounting controls, coupled with an ongoing program of internal audits to review such controls, provide reasonable assurance that the Company's assets are safeguarded from material loss and the transactions are executed and recorded in accordance with established procedures. The system is supported by formal policies and procedures, including an active Code of Conduct program intended to ensure that key employees adhere to the highest standards of personal and professional integrity. The concept of reasonable assurance is based on the recognition that the cost of maintaining a system of internal accounting controls should not exceed the related benefits to be derived. The Audit Committee of the Board of Directors, composed solely of outside directors, meets periodically with management, internal auditors and Deloitte & Touche LLP to review planned audit scope and results and to discuss other matters affecting the adequacy of internal accounting controls and the quality of financial reporting. Deloitte & Touche LLP has full and free access to the Audit Committee and may meet with the committee without management representatives present. /s/ STEPHEN H. CURRAN Stephen H. Curran Senior Vice President and Chief Financial Officer February 11, 1997 REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS TO THE BOARD OF DIRECTORS OF PRIMARK CORPORATION: We have audited the accompanying consolidated statements of financial position of Primark Corporation and its subsidiaries as of December 31, 1996 and 1995 and the related consolidated statements of income, cash flows and common shareholders' equity for each of the three years in the period ended December 31, 1996. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of Primark Corporation and its subsidiaries at December 31, 1996 and 1995, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 1996, in conformity with generally accepted accounting principles. /s/ DELOITTE & TOUCHE LLP Deloitte & Touche LLP Boston, Massachusetts February 11, 1997 38 18 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION RESULTS OF OPERATIONS Primark reported 1996 net income from continuing operations of $28.0 million ($1.04 per share), compared to $17.8 million ($0.80 per share) in 1995 or a 56.6% increase. Primark's natural gas storage operation, PSLC, was sold on September 30, 1996 for an after-tax gain of $8.4 million ($0.31 per share). The gain from that sale, and the operating results of PSLC have been included in discontinued operations for all periods presented. Net income applicable to common stock for 1996 was $36.7 million ($1.38 per share) compared to $16.9 million ($0.82 per share) for 1995. The year 1995 reflects an extraordinary loss of $0.5 million related to the refinancing of the Company's bank credit facilities. Net income applicable to common stock for 1994 was reported at $12.3 million ($0.62 per share). On May 2, 1996 the Company's $16.9 million redeemable preferred stock was converted to 1.2 million common shares. This action reduced the amount of preferred dividends paid in 1996 to $0.4 million from the $1.4 million level paid in 1995 and 1994. The 1996 earnings per share calculation was impacted by a 6.0 million increase in the weighted average shares outstanding. This increase in weighted shares was due to Primark's December 1995 equity offering of 4.1 million shares together with the preferred stock conversion noted above and the October 1996 acquisition of ICV Ltd., which included 2.2 million common shares as a portion of the consideration. In spite of the dilutive effect of these additional issues, earnings per share from continuing operations increased 30.0% in 1996. The dramatic improvement in net income is also reflected in revenue and operating income. Primark reported 1996 revenue of $767.1 million and operating income of $66.3 million, increases of 25.7% and 25.5%, respectively, over 1995. Similarly, 1995 revenue of $610.2 million and operating income of $52.8 million improved 30.0% and 57.6%, respectively, over 1994. During 1996 and 1995, Primark benefited from both solid internal growth and an aggressive acquisition program to expand its operations. This program included the 1996 acquisitions of DAFSA S.A. in June, The Yankee Group in August and ICV Ltd. in October. Additionally, Primark purchased the controlling interest in Worldscope, Inc. during October 1996. In June of 1995 the Company acquired Disclosure and I/B/E/S. The acquisitions collectively added $131.1 million to 1996 revenues and $51.7 million to 1995 revenues. Operating income reflects increases of $10.8 million and $7.5 million in 1996 and 1995, respectively, for these acquisitions. The impact of the new acquisitions on operating income was dampened by the added amortization of intangible assets associated with these purchases. When all acquisitions are excluded from both periods, the remaining businesses grew 14.4% in 1996, reflecting strong growth from the base operations. The information service segment benefited from all of the acquisition activity and is the Company's core operations with $660.8 million of revenue and $67.0 million of operating income in 1996. This segment serves two primary markets, financial information and applied technology. Most of Primark's growth has come in the financial information markets. This group accounted for $269.3 million of revenues and $33.4 million of operating income or a 45.8% and 24.3% increase, respectively, over 1995. The financial information markets were served by seven separate Primark operations during 1996 with Datastream, Disclosure and I/B/E/S representing the major contributors. Datastream improved its reported revenues 10.1% over 1995, but was slowed by a strong dollar against most of its foreign operations. The negative impact of foreign currency exchange on Datastream's revenues was more than 39 19 offset with gains from Primark's hedging program recorded in other income and deductions. When the effects of currency are excluded, Datastream's 1996 revenues improved 12.3% and the 1995 revenues improved 10.6%. Datastream's research product sales increased 12.2% and 14.6% during 1996 and 1995, respectively. Approximately 14.0% of Datastream's 1996 revenues were accounted for by the fund management business. This business produced a significant turnaround in 1996, growing 11.3%. During 1995, the fund management product had 9.2% lower sales than in 1994. All of Datastream's geographic regions showed significant improvements with the Pacific Basin up 21.4%, the Americas up 20.8%, Continental Europe up 16.5% and the United Kingdom up 5.2% when 1996 is compared to 1995. Disclosure and I/B/E/S were acquired on June 30, 1995 and together accounted for $107.4 million and $51.7 million of revenue in 1996 and 1995, respectively. These operations are best viewed on a pro forma basis, due to the partial year inclusion of the operating results in 1995. As such, Disclosure experienced slow revenue growth of 2.4% over 1995. This increase includes the addition of Worldscope's operations from October of 1996 without which Disclosure's growth would have been flat. Disclosure is in transition from its paper-based businesses to on-line services and as its customer base moves to the new electronic products, revenues are expected to be flat. During 1996, the demand centers and Laser D products grew 3.4% with most of the growth coming from the United Kingdom. Disclosure's microfiche and SEC reference room businesses are being phased out but are offset by improved sales in the United Kingdom and the Global Access product line. I/B/E/S' operations, in contrast, exhibited record growth in revenues for 1996 of 18.8% due to strong international data demand and solid acceptance of the I/B/E/S Express product in the marketplace. ICV Ltd. was purchased in October of 1996 and contributed $9.1 million to revenue, representing only two full months of operations. The 1996 operating income margin for the financial information group was 12.4% compared to 14.6% in 1995 and 11.1% in 1994. The 1996 drop in profitability was due to higher than anticipated losses at DAFSA of $2.5 million and one-time communication costs experienced at Datastream as a result of the transition to a new supplier. The DAFSA operation is being integrated into Primark's corresponding operations and additional costs are anticipated until this effort is completed in the first half of 1997. The applied technology market is served by TASC, WSI and The Yankee Group and reported 1996 revenues of $391.4 million, representing a 13.1% increase over 1995. The 1995 revenues of $346.2 million increased 10.9% over 1994. The 1996 increase reflects a 12.1% improvement in TASC's government business and the August acquisition of The Yankee Group which added $7.8 million to current year revenue. The 1995 government revenues improved 9.7% over 1994. During December of 1994, TASC lost its contract with the Ballistic Missile Defense Organization, which provided $16.5 million of revenue in 1994. TASC was able to replace this lost business and continue to exhibit growth in 1995 and 1996. TASC ended 1996 with a contract backlog of $538.9 million or an 18.8% increase over 1995. The backlog includes $254.6 million of contracts maturing within one year, an increase of 14.3% over 1995. Although the government may cancel any such contract at its discretion, TASC has a history of few cancellations and a high rate of success on being awarded competitively bid contracts. Revenue from the weather business, WSI, represented $28.1 million and grew 3.4% in 1996 due to lower than anticipated equipment sales. In contrast, WSI grew 25.4% in 1995 over 1994. The applied technology group accounted for $33.5 million of operating income during 1996, a 29.3% improvement from 1995. The increased profitability reflects higher margins at both WSI and TASC's commercial operations as well as the addition of The Yankee Group. Primark's Transportation segment, served by TIMCO, reported revenues of $106.4 million, an increase of 34.2% over 1995. From 1994 to 1996 this operation has more than doubled its revenues. The 1996 improvement reflects the facility expansion implemented in the fourth quarter of 1995, coupled with TIMCO's ability to market the additional capacity. However, TIMCO reported operating income of $6.2 million or an improvement of only 2.8% over 1995. The rapid rate of growth combined with a declining availability of experienced workers necessitated additional costs associated with training, overtime and outside contracting assistance. Consequently, the utilization rate decreased and the rate of profitability was lowered in 1996. Subsequent to December 31, 1996, the Company completed two additional acquisitions: Baseline Financial Services, Inc. on January 6, 1997 and WEFA Holdings, Inc. on February 7, 1997. These acquisitions were purchased for $85.7 million in cash, excluding fees, and had aggregate 1996 revenues of $41.5 million. When all acquisitions, including those made in early 1997, are presented on a pro forma basis, Primark would have had 1996 revenues in excess of $860.0 million. 40 20 CAPITAL RESOURCES AND LIQUIDITY Primark ended 1996 with $25.7 million of cash and cash equivalents compared to $60.0 million in 1995 and $17.0 million in 1994. During 1996, the Company acquired four separate businesses for $71.1 million in net cash, $8.3 million in seller notes, 2.2 million shares of common stock and $6.6 million of other consideration. Primark also increased expenditures on capitalized software and equipment $14.3 million over 1995. The 1996 cash expenditures were primarily funded from cash on the balance sheet, the sale of PSLC for $14.3 million and increased operating cash flows. During 1995, Primark acquired Disclosure and I/B/E/S for $199.7 million, issued $125.0 million of commercial bank debt as well as $106.5 million of common stock. The year 1994 had no significant financing or investing activities. In 1996, Primark reported $64.5 million of cash provided from operating activities, a 33.8% increase over 1995. During 1995, the Company generated $48.2 million of cash from operations or a 23.9% increase over 1994. The 1996 increase reflects additional cash flows from the acquisitions made from June of 1995 through year end 1996, offset by a $7.8 million increase in working capital requirements. The 1996 working capital requirements were impacted by increases in accounts receivable, partially offset by increases in deferred revenues. Both increases were affected by the Company's acquired businesses and growth in sales. The increase between 1995 and 1994 primarily represents the June 1995 addition of Disclosure and I/B/E/S, while working capital requirements remained constant. All periods benefited from improving growth in the base businesses. Financing activities provided $7.6 million of cash in 1996 compared to $224.1 million in 1995. In June of 1995 the Company acquired Disclosure and I/B/E/S and entered into a $200.0 million credit arrangement with several commercial banks to support that acquisition. The credit arrangement included a $75.0 million revolving credit facility and an $125.0 million term loan expiring in June 2002. During 1996 further financing was not needed to support the acquisition activity; however, on February 7, 1997 the Company entered into a $300.0 million refinancing arrangement to replace some of the funds expended for recent acquisitions and to enhance liquidity for future opportunities. The new arrangement is comprised of a $75.0 million revolving credit facility and a $225.0 million term loan expiring in June 2004. The new agreement provided an additional $100.0 million of capacity and will lower borrowing costs by an estimated 50 basis points. When Primark's year end 1996 capital structure is presented on a pro forma basis for the new financing, the debt to total capitalization is 42.3% or about the same level reported in 1995. In December of 1995, the Company issued 4.1 million shares of common stock for $107.8 million and used the net proceeds to repay loan balances and for other general corporate purposes. During 1996, the Company entered into several financing transactions not involving cash. During May 1996, the Company converted its $16.9 million redeemable preferred stock to 1.2 million shares of common stock at the request of the preferred shareholders. In October 1996 Primark purchased ICV Limited for $92.2 million, excluding fees, with the consideration comprising $8.3 million of seller notes and 2.2 million shares of common stock in addition to $24.0 million in cash. Financing activities for 1994 used $15.5 million of cash as the revolving credit facility was paid down with excess cash from operations. Cash used in investing activities for 1996 totaled $107.2 million compared to uses of $229.4 million in 1995 and $13.4 million in 1994. The 1996 and 1995 periods reflect significant acquisition outlays. During 1996, the Company acquired four separate operations with the net cash consideration totaling $71.1 million. During 1995 Primark purchased Disclosure and I/B/E/S for $199.7 million and in 1994 purchased Vestek for $6.1 million. During the three year period the Company also sold two operations, PSLC for $14.3 million in 1996 and Wellmark, Inc. for $6.5 million in 1994. Capital expenditures increased $3.6 million over the 1995 and 1994 levels due, for the most part, to increased requirements for computer equipment at Disclosure and Datastream. Expenditures for capitalized software increased modestly between 1995 and 1994, but absorbed $16.9 million of cash in 1996, a $10.7 million increase over 1995. Most of the increase represented investments in new Disclosure product lines to facilitate the transition to its on-line service. Currency and inflation did not have a material impact on Primark's cash balances for the periods presented. The rate of inflation in all of Primark's operating areas around the world was consistently absorbed through the local product pricing structures. Currency transactions had a $0.9 million positive impact on cash in 1996, due in part to Primark's hedging programs. 41 21 Primark Corporation and Subsidiaries Notes to the Consolidated Financial Statements PRIMARK CORPORATION AND SUBSIDIARIES SELECTED FINANCIAL INFORMATION--FIVE YEAR DATA
- - -------------------------------------------------------------------------------------------------------------------- (000s) Except Per Share Amounts 1996 1995 1994 1993 1992 - - -------------------------------------------------------------------------------------------------------------------- FINANCIAL AND OPERATING DATA (1) Operating revenues $767,125 $610,216 $469,555 $435,888 $344,016 Operating income $ 66,321 $ 52,843 $ 33,521 $ 32,548 $ 14,210 Income from continuing operations $ 27,955 $ 17,847 $ 12,684 $ 11,055 $ 4,636 Net income applicable to common stock (2) $ 36,749 $ 16,882 $ 12,316 $ 4,087 $ 5,821 Earnings per share from continuing operations $ 1.04 $ 0.80 $ 0.57 $ 0.49 $ 0.17 Total earnings per share (2) $ 1.38 $ 0.82 $ 0.62 $ 0.21 $ 0.30 Total assets $978,934 $766,847 $468,169 $454,449 $477,298 Total debt, including capital lease obligations $248,340 $239,476 $115,573 $130,386 $161,088 Redeemable preferred stock -- $ 16,874 $ 16,874 $ 16,874 $ 16,522 Common shareholders' equity (3) $476,217 $354,129 $224,781 $208,134 $201,555 EBITDA (4) $109,675 $ 89,114 $ 60,973 $ 58,659 $ 25,808 Debt to total capitalization 34.3% 39.2% 32.4% 36.7% 42.5% Capital expenditures $ 26,250 $ 22,645 $ 22,497 $ 12,642 $ 8,098 Capitalized software $ 16,916 $ 6,232 $ 4,372 $ 4,021 $ 529 Total employees 5,938 5,131 3,789 3,439 3,272 - - -------------------------------------------------------------------------------------------------------------------- COMMON STOCK DATA (3) Actual shares outstanding 27,068 23,317 18,520 18,378 18,198 Weighted average common and equivalent shares outstanding 26,555 20,602 19,909 19,805 19,388 Book value per share $ 17.59 $ 15.19 $ 12.14 $ 11.33 $ 11.08 Market price per share on NYSE Composite: High $ 40 $30 1/4 $ 15 $ 16 3/8 $ 14 3/4 Low $ 21 3/8 $12 3/4 $ 11 $ 10 1/2 $ 9 - - --------------------------------------------------------------------------------------------------------------------
(1) The financial data for the Company has been restated to exclude discontinued operations (Note 3) and includes all acquired companies from their respective dates of acquisition (Note 2). (2) Includes an $8.4 million after-tax gain on the sale of discontinued operations in 1996 (Note 3) and an after-tax extraordinary loss of $534 thousand for 1995 (Note 6a). Also includes dividends on the Company's outstanding preferred stock through its conversion to common (Note 9a) and gains and losses associated with discontinued operations of the Company. (3) During 1996, the Company issued 2,200,000 shares of common stock in October of the acquisition of ICV and 1,164,276 shares of common stock in May for the conversion of preferred. In December 1995, the Company issued 4,356,200 shares of common stock (Note 9a). (4) EBITDA represents operating income plus depreciation and amortization expense. Due to the high non-cash amortization expense recorded to net income, the Company presents EBITDA to provide the shareholder a measure of cash flows within operations. EBITDA represents supplemental information only and is not to be construed as an alternative to operating income or to cash flows as defined by generally accepted accounting principles. 42 22 Primark Corporation and Subsidiaries Notes to the Consolidated Financial Statements SUPPLEMENTARY FINANCIAL INFORMATION--QUARTERLY DATA The following quarterly operating results have been restated to exclude operations discontinued as of September 30, 1996 (Note 3). The quarterly data includes the operations of acquired businesses from their respective dates of acquisition (Note 2). Quarterly earnings per share may not total for the year as quarterly computations are based on weighted average common and common equivalent shares outstanding during each quarter. The following quarterly common stock prices set forth the intraday high and low market prices per share on the NYSE Composite Tape. As of the close of business of February 28, 1997, there were 9,051 holders of record of the Company's common stock.
- - ------------------------------------------------------------------------------------------------------------------------ (000s) Except Per Share Amounts FIRST SECOND THIRD FOURTH - - ------------------------------------------------------------------------------------------------------------------------ 1996 - - ------------------------------------------------------------------------------------------------------------------------ Operating revenues, as reported $180,729 $187,658 $ 194,013 $208,165 Less discontinued operations 1,707 1,733 -- -- - - ------------------------------------------------------------------------------------------------------------------------ Operating revenues, restated $179,022 $185,925 $ 194,013 $208,165 - - ------------------------------------------------------------------------------------------------------------------------ Operating income, as reported $ 16,589 $ 17,319 $ 19,251 $ 15,211 Less discontinued operations 987 1,062 -- -- - - ------------------------------------------------------------------------------------------------------------------------ Operating income, restated $ 15,602 $ 16,257 $ 19,251 $ 15,211 - - ------------------------------------------------------------------------------------------------------------------------ Income from continuing operations, as reported (1) $ 6,400 $ 7,517 $ 7,814 $ 6,729 Less discontinued operations 254 251 -- -- - - ------------------------------------------------------------------------------------------------------------------------ Income from continuing operations, restated (1) $ 6,146 $ 7,266 $ 7,814 $ 6,729 - - ------------------------------------------------------------------------------------------------------------------------ Net income applicable to common stock (2) $ 6,041 $ 7,517 $ 16,461 $ 6,730 - - ------------------------------------------------------------------------------------------------------------------------ Earnings per share from continued operations, as reported (2) $ 0.24 $ 0.29 $ 0.30 $ 0.24 Less discontinued operations 0.01 0.01 (0.33) -- - - ------------------------------------------------------------------------------------------------------------------------ Earnings per share, restated (2) $ 0.23 $ 0.28 $ 0.63 $ 0.24 - - ------------------------------------------------------------------------------------------------------------------------ Market price per share: High $ 40 $ 38 1/2 $ 33 5/8 $ 28 1/2 Low $ 27 $ 30 3/4 $ 25 1/8 $ 21 3/8 - - ------------------------------------------------------------------------------------------------------------------------ 1995 - - ------------------------------------------------------------------------------------------------------------------------ Operating revenues, as reported $135,861 $143,041 $168,710 $169,698 Less discontinued operations 1,717 1,778 1,740 1,859 - - ------------------------------------------------------------------------------------------------------------------------- Operating revenues, restated $134,144 $141,263 $166,970 $167,839 - - ------------------------------------------------------------------------------------------------------------------------- Operating income, as reported $ 11,817 $ 13,113 $ 16,249 $ 15,732 Less discontinued operations 969 1,049 961 1,089 - - ------------------------------------------------------------------------------------------------------------------------- Operating income, restated $ 10,848 $ 12,064 $ 15,288 $ 14,643 - - ------------------------------------------------------------------------------------------------------------------------- Income from continuing operations, as reported $ 4,454 $ 4,576 $ 4,701 $ 5,119 Less discontinued operations 201 256 226 320 - - ------------------------------------------------------------------------------------------------------------------------- Income from continuing operations, restated $ 4,253 $ 4,320 $ 4,475 $ 4,799 - - ------------------------------------------------------------------------------------------------------------------------- Net income applicable to common stock (2)(3) $ 4,096 $ 3,683 $ 4,342 $ 4,761 - - ------------------------------------------------------------------------------------------------------------------------- Earnings per share before extraordinary loss, as reported (2) $ 0.20 $ 0.21 $ 0.21 $ 0.22 Less discontinued operations 0.01 0.01 0.01 0.02 - - ------------------------------------------------------------------------------------------------------------------------- Earnings per share before extraordinary loss, restated $ 0.19 $ 0.20 $ 0.20 $ 0.20 - - ------------------------------------------------------------------------------------------------------------------------- Earnings per share, as reported (2) (3) $ 0.20 $ 0.18 $ 0.21 $ 0.22 Less discontinued operations 0.01 0.01 0.01 0.02 - - ------------------------------------------------------------------------------------------------------------------------- Earnings per share, restated (2) (3) $ 0.19 $ 0.17 $ 0.20 $ 0.20 - - ------------------------------------------------------------------------------------------------------------------------- Market price per share: High $14 1/2 $ 18 3/4 $ 26 1/4 $ 30 1/4 Low $12 3/4 $ 14 1/2 $ 17 5/8 $ 21 7/8
(1) Includes, for the fourth quarter of 1996, a $678,000 benefit recorded for the settlement of seven open tax years at lower than anticipated levels. (2) Includes dividends on the Company's preferred stock through its conversion to common stock on May 2, 1996. (3) Includes, for the 1995 second quarter, an after-tax extraordinary loss of $534,000 which resulted from the early extinguishment of debt. 43 EX-21.1 17 SUBSIDIARIES OF PRIMARK CORPORATION 1 Exhibit 21.1 SUBSIDIARIES OF PRIMARK CORPORATION Primark Corporation owns all of the issued and outstanding common stock of Primark Holding Corporation, Triad International Maintenance Corporation, Primark Financial Technologies, Inc., and WEFA Holding, Inc., which are all Delaware corporations. Baseline Financial Services, Inc., a New York Corporation and Yankee Group Research, Inc., a Massachusetts corporation, which owns the stock of Yankee Group and Asia Pacific Pty., Limited (Australia). Primark Corporation also holds a 20% interest on Primark Decision Economics, Inc., a Massachusetts corporation. WEFA Holdings, Inc. owns all of the issued and outstanding common stock of: - WEFA, Inc. (Delaware) who owns a 51% interest in WEFA South Africa (S. Africa) - WEFA GmbH (Germany) - WEFA S.A. (France) - WEFA Benelex SA (Belgium) - WEFA Canada, Inc. (Canada) - WEFA (Holdings) Limited, (England), who owns WEFA Limited (England), who in turn owns Staniland Hall Associates Limited (England) WEFA Holdings also owns a 45% interest in Ciemex, Inc. (Delaware), who owns Ciemex WEFA, Inc. (Delaware). Primark Holding Corporation owns all of the issued and outstanding common stock of: - TASC, Inc., a Massachusetts corporation, which owns all of the issued and outstanding common stock of: - WSI Corporation, a Massachusetts corporation; - TASC Services Corporation, a Delaware corporation; and - TASC Systems Engineering Corporation, a Delaware corporation - Primark Information Services (U.K.) Limited U.K. which owns all the common stock of: - The Analytic Sciences Corporation Limited (U.K.) which owns all of the issued and outstanding common stock of The Weather Department Limited (U.K.) and The Computer Department Limited (U.K.); - Datastream Group (U.K.) which owns Datastream (U.K.); - Datastream Pension Trustees Limited (U.K.); - Primark Investment Management Services Limited (U.K.); 1 2 - Datastream International Limited (U.K.) which owns all the common stock of Datastream International B.V. (the Netherlands) and has a branch in Malaysia. - I/B/E/S (U.K.) LTD; and - Disclosure Limited (U.K.) - Primark Information Services U.K. Limited, also owns a 34.47% interest in ICV Limited - Datastream International (Switzerland) Limited - Datastream International GmbH (Germany) - Primark Hong Kong Limited - Datastream International Inc. (Delaware) - Datastream International (Japan) K.K. (Japan) - Datastream International (Australia ) Pty. Limited - Datastream International (D.C.), Inc. (Delaware) - Datastream International (Canada) Ltd. (Canada) - Datastream International (Italy) Srl (Italy) - Datastream International (Sweden) Aktiebolag (Sweden) - Datastream International (South Africa) (Proprietary) Limited (South Africa) - Datastream International (Korea) Limited (Korea) - Datastream International (Thailand) Limited (Thailand) - Datastream International (Singapore) Pte., Ltd. (Singapore) - Vestek Systems, Inc., a California corporation - Disclosure Incorporated (Delaware) which owns all the issued and outstanding stock of: - Disclosure International, Inc. (Delaware) which owns an 80% interest in: - Worldscope/Disclosure LLC which owns all of the issued and outstanding stock of Worldscope/Disclosure Incorporated (India) Pty. Ltd.; and - Worldscope/Disclosure International Partners (Ireland) - Disclosure Information Services, Inc. (Delaware) - I/B/E/S International, Inc. (Delaware) which owns all the issued and outstanding stock of: - I/B/E/S Inc. (Delaware) 2 3 - I/B/E/S (Japan) K.K. - Disclosure GmbH (Germany) - Talisman SA (France) which owns the stock of Groupe DAFSA S.A. and a 4.4% interest in Globe On-Line. Groupe DAFSA owns a 33% interest in Panrome and the stock of: - DAFSA Edition SNC - SAFE SNC - Primark Holding Corporation also owns a 65.53% interest in ICV Limited which owns the stock of : - ICV Europe Limited (Channel Islands) - Interquote Limited (England) 3 EX-23.1 18 CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCTS. 1 Exhibit 23.1 INDEPENDENT AUDITORS' CONSENT We consent to the incorporation by reference in Registration Statement Nos. 2-92579, 2-77751, 33-23876, 33-6009, 33-49132, 33-49134, 333-17561, 333-17567 and 333-17563 of Primark Corporation on Form S-8 of our report dated February 11, 1997, appearing in and incorporated by reference in this Annual Report of Form 10-K of Primark Corporation for the year ended December 31, 1996. /s/ DELOITTE & TOUCHE LLP Deloite & Touche LLP Boston, Massachusetts March 27, 1997 \consent EX-24.1 19 POWERS OF ATTORNEY 1 Exhibit 24.1 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS: That the undersigned Director or Officer of Primark Corporation, a Michigan corporation, does hereby constitute and appoint Joseph E. Kasputys, Stephen H. Curran and Michael R. Kargula, and each of them, his or her true and lawful attorneys-in-fact and agents, each with full power and authority (acting alone and without the others) to execute in the name and on behalf of the undersigned as such Director or Officer, an Annual Report on Form 10-K, for the year ended December 31, 1996, under the Securities and Exchange Act of 1934, of said Corporation, and all amendments to such Annual Report on Form 10-K; hereby granting to such attorney and agents, and each of them, full power of substitution and revocation in the premises; and hereby ratifying and confirming all that such attorneys and agents, or any of them may do or cause to be done by virtue of these presents. IN WITNESS WHEREOF, I have executed this Power of Attorney this 26 day of March, 1997. /s/ JOSEPH E. KASPUTYS ---------------------------------- Joseph E. Kasputys 2 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS: That the undersigned Director or Officer of Primark Corporation, a Michigan corporation, does hereby constitute and appoint Joseph E. Kasputys, Stephen H. Curran and Michael R. Kargula, and each of them, his or her true and lawful attorneys-in-fact and agents, each with full power and authority (acting alone and without the others) to execute in the name and on behalf of the undersigned as such Director or Officer, an Annual Report on Form 10-K, for the year ended December 31, 1996, under the Securities and Exchange Act of 1934, of said Corporation, and all amendments to such Annual Report on Form 10-K; hereby granting to such attorney and agents, and each of them, full power of substitution and revocation in the premises; and hereby ratifying and confirming all that such attorneys and agents, or any of them may do or cause to be done by virtue of these presents. IN WITNESS WHEREOF, I have executed this Power of Attorney this 15th day of January, 1997. /s/ STEPHEN H. CURRAN ---------------------------------- Stephen H. Curran 3 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS: That the undersigned Director or Officer of Primark Corporation, a Michigan corporation, does hereby constitute and appoint Joseph E. Kasputys, Stephen H. Curran and Michael R. Kargula, and each of them, his or her true and lawful attorneys-in-fact and agents, each with full power and authority (acting alone and without the others) to execute in the name and on behalf of the undersigned as such Director or Officer, an Annual Report on Form 10-K, for the year ended December 31, 1996, under the Securities and Exchange Act of 1934, of said Corporation, and all amendments to such Annual Report on Form 10-K; hereby granting to such attorney and agents, and each of them, full power of substitution and revocation in the premises; and hereby ratifying and confirming all that such attorneys and agents, or any of them may do or cause to be done by virtue of these presents. IN WITNESS WHEREOF, I have executed this Power of Attorney this 2nd day of January, 1997. /s/ WILLIAM J. SWIFT III ---------------------------------- William J. Swift III 4 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS: That the undersigned Director or Officer of Primark Corporation, a Michigan corporation, does hereby constitute and appoint Joseph E. Kasputys, Stephen H. Curran and Michael R. Kargula, and each of them, his or her true and lawful attorneys-in-fact and agents, each with full power and authority (acting alone and without the others) to execute in the name and on behalf of the undersigned as such Director or Officer, an Annual Report on Form 10-K, for the year ended December 31, 1996, under the Securities and Exchange Act of 1934, of said Corporation, and all amendments to such Annual Report on Form 10-K; hereby granting to such attorney and agents, and each of them, full power of substitution and revocation in the premises; and hereby ratifying and confirming all that such attorneys and agents, or any of them may do or cause to be done by virtue of these presents. IN WITNESS WHEREOF, I have executed this Power of Attorney this 15th day of January, 1997. /s/ MICHAEL R. KARGULA ---------------------------------- Michael R. Kargula 5 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS: That the undersigned Director or Officer of Primark Corporation, a Michigan corporation, does hereby constitute and appoint Joseph E. Kasputys, Stephen H. Curran and Michael R. Kargula, and each of them, his or her true and lawful attorneys-in-fact and agents, each with full power and authority (acting alone and without the others) to execute in the name and on behalf of the undersigned as such Director or Officer, an Annual Report on Form 10-K, for the year ended December 31, 1996, under the Securities and Exchange Act of 1934, of said Corporation, and all amendments to such Annual Report on Form 10-K; hereby granting to such attorney and agents, and each of them, full power of substitution and revocation in the premises; and hereby ratifying and confirming all that such attorneys and agents, or any of them may do or cause to be done by virtue of these presents. IN WITNESS WHEREOF, I have executed this Power of Attorney this 20th day of January, 1997. /s/ PATRICK G. RICHMOND ---------------------------------- Patrick G. Richmond 6 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS: That the undersigned Director or Officer of Primark Corporation, a Michigan corporation, does hereby constitute and appoint Joseph E. Kasputys, Stephen H. Curran and Michael R. Kargula, and each of them, his or her true and lawful attorneys-in-fact and agents, each with full power and authority (acting alone and without the others) to execute in the name and on behalf of the undersigned as such Director or Officer, an Annual Report on Form 10-K, for the year ended December 31, 1996, under the Securities and Exchange Act of 1934, of said Corporation, and all amendments to such Annual Report on Form 10-K; hereby granting to such attorney and agents, and each of them, full power of substitution and revocation in the premises; and hereby ratifying and confirming all that such attorneys and agents, or any of them may do or cause to be done by virtue of these presents. IN WITNESS WHEREOF, I have executed this Power of Attorney this 13th day of January, 1997. /s/ JOHN C. HOLT ---------------------------------- John C. Holt 7 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS: That the undersigned Director or Officer of Primark Corporation, a Michigan corporation, does hereby constitute and appoint Joseph E. Kasputys, Stephen H. Curran and Michael R. Kargula, and each of them, his or her true and lawful attorneys-in-fact and agents, each with full power and authority (acting alone and without the others) to execute in the name and on behalf of the undersigned as such Director or Officer, an Annual Report on Form 10-K, for the year ended December 31, 1996, under the Securities and Exchange Act of 1934, of said Corporation, and all amendments to such Annual Report on Form 10-K; hereby granting to such attorney and agents, and each of them, full power of substitution and revocation in the premises; and hereby ratifying and confirming all that such attorneys and agents, or any of them may do or cause to be done by virtue of these presents. IN WITNESS WHEREOF, I have executed this Power of Attorney this 15th day of January, 1997. /s/ PATRICIA McGINNIS ---------------------------------- Patricia McGinnis 8 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS: That the undersigned Director or Officer of Primark Corporation, a Michigan corporation, does hereby constitute and appoint Joseph E. Kasputys, Stephen H. Curran and Michael R. Kargula, and each of them, his or her true and lawful attorneys-in-fact and agents, each with full power and authority (acting alone and without the others) to execute in the name and on behalf of the undersigned as such Director or Officer, an Annual Report on Form 10-K, for the year ended December 31, 1996, under the Securities and Exchange Act of 1934, of said Corporation, and all amendments to such Annual Report on Form 10-K; hereby granting to such attorney and agents, and each of them, full power of substitution and revocation in the premises; and hereby ratifying and confirming all that such attorneys and agents, or any of them may do or cause to be done by virtue of these presents. IN WITNESS WHEREOF, I have executed this Power of Attorney this 15th day of January, 1997. /s/ STEVEN LAZARUS ---------------------------------- Steven Lazarus 9 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS: That the undersigned Director or Officer of Primark Corporation, a Michigan corporation, does hereby constitute and appoint Joseph E. Kasputys, Stephen H. Curran and Michael R. Kargula, and each of them, his or her true and lawful attorneys-in-fact and agents, each with full power and authority (acting alone and without the others) to execute in the name and on behalf of the undersigned as such Director or Officer, an Annual Report on Form 10-K, for the year ended December 31, 1996, under the Securities and Exchange Act of 1934, of said Corporation, and all amendments to such Annual Report on Form 10-K; hereby granting to such attorney and agents, and each of them, full power of substitution and revocation in the premises; and hereby ratifying and confirming all that such attorneys and agents, or any of them may do or cause to be done by virtue of these presents. IN WITNESS WHEREOF, I have executed this Power of Attorney this 15th day of January, 1997. /s/ CONSTANCE K. WEAVER ---------------------------------- Constance K. Weaver 10 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS: That the undersigned Director or Officer of Primark Corporation, a Michigan corporation, does hereby constitute and appoint Joseph E. Kasputys, Stephen H. Curran and Michael R. Kargula, and each of them, his or her true and lawful attorneys-in-fact and agents, each with full power and authority (acting alone and without the others) to execute in the name and on behalf of the undersigned as such Director or Officer, an Annual Report on Form 10-K, for the year ended December 31, 1996, under the Securities and Exchange Act of 1934, of said Corporation, and all amendments to such Annual Report on Form 10-K; hereby granting to such attorney and agents, and each of them, full power of substitution and revocation in the premises; and hereby ratifying and confirming all that such attorneys and agents, or any of them may do or cause to be done by virtue of these presents. IN WITNESS WHEREOF, I have executed this Power of Attorney this 31st day of January, 1997. /s/ KEVIN J. BRADLEY ---------------------------------- Kevin J. Bradley 11 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS: That the undersigned Director or Officer of Primark Corporation, a Michigan corporation, does hereby constitute and appoint Joseph E. Kasputys, Stephen H. Curran and Michael R. Kargula, and each of them, his or her true and lawful attorneys-in-fact and agents, each with full power and authority (acting alone and without the others) to execute in the name and on behalf of the undersigned as such Director or Officer, an Annual Report on Form 10-K, for the year ended December 31, 1996, under the Securities and Exchange Act of 1934, of said Corporation, and all amendments to such Annual Report on Form 10-K; hereby granting to such attorney and agents, and each of them, full power of substitution and revocation in the premises; and hereby ratifying and confirming all that such attorneys and agents, or any of them may do or cause to be done by virtue of these presents. IN WITNESS WHEREOF, I have executed this Power of Attorney this 15th day of January, 1997. /s/ IRA HERENSTEIN ---------------------------------- Ira Herenstein 12 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS: That the undersigned Director or Officer of Primark Corporation, a Michigan corporation, does hereby constitute and appoint Joseph E. Kasputys, Stephen H. Curran and Michael R. Kargula, and each of them, his or her true and lawful attorneys-in-fact and agents, each with full power and authority (acting alone and without the others) to execute in the name and on behalf of the undersigned as such Director or Officer, an Annual Report on Form 10-K, for the year ended December 31, 1996, under the Securities and Exchange Act of 1934, of said Corporation, and all amendments to such Annual Report on Form 10-K; hereby granting to such attorney and agents, and each of them, full power of substitution and revocation in the premises; and hereby ratifying and confirming all that such attorneys and agents, or any of them may do or cause to be done by virtue of these presents. IN WITNESS WHEREOF, I have executed this Power of Attorney this 15th day of January, 1997. /s/ JONATHAN NEWCOMB ---------------------------------- Jonathan Newcomb EX-27 20 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM PRIMARK CORPORATION'S CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 1996 INCLUDED IN THE FORM 10-K AS EXHIBIT 13.1 AND THE 1996 ANNUAL REPORT AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 0000356064 PRIMARK 1,000 U.S. DOLLARS YEAR DEC-31-1996 JAN-01-1996 DEC-31-1996 1 25,709 0 188,107 3,647 0 233,710 124,676 56,470 978,934 223,891 241,822 0 0 541 475,676 978,934 0 767,125 0 457,528 243,276 0 20,193 49,162 21,207 27,955 9,153 0 0 37,108 1.38 1.38
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