-----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, RWsLeSmgP1ytzkQrgN7u4nDIQ6KJ1pJ/Ys/THE1cUs1Pi3vYGu7fXdw6KKkphNCg I/H7E71N8+3ykx5pzqGcxQ== 0000950135-98-002071.txt : 19980401 0000950135-98-002071.hdr.sgml : 19980401 ACCESSION NUMBER: 0000950135-98-002071 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19980317 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19980331 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: WANG LABORATORIES INC CENTRAL INDEX KEY: 0000104519 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PREPACKAGED SOFTWARE [7372] IRS NUMBER: 042192707 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-05677 FILM NUMBER: 98581407 BUSINESS ADDRESS: STREET 1: 600 TECHNOLOGY PARK DR CITY: BILLERICA STATE: MA ZIP: 01821-4120 BUSINESS PHONE: 5089675000 MAIL ADDRESS: STREET 1: 600 TECHNOLOGY PARK DRIVE STREET 2: MAILSTOP 014-B3C CITY: BILLERICA STATE: MA ZIP: 01821-4120 8-K 1 WANG LABORATORIES, INC. 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K Current Report Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): March 17, 1998 -------------- Wang Laboratories, Inc. ----------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware -------------------------------------------- (State or other jurisdiction of incorporation) 1-5677 04-2192707 - ------------------------ --------------------------------- (Commission File Number) (IRS Employer Identification No.) 600 Technology Park Drive, Billerica, Massachusetts 01821 - --------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (978) 967-5000 -------------- 2 ITEM 5. OTHER EVENTS. On March 18, 1998 Wang Laboratories, Inc. ("Wang") announced that it had completed the previously announced purchase of Olsy, the wholly-owned information technology solutions and service subsidiary of Olivetti S.p.A. Wang also finalized a $500 million multicurrency revolving credit agreement designed to support the development of the combined business. ITEM 7. FINANCIAL STATEMENT AND EXHIBITS. (c) Exhibits Item Description - ---- ----------- 1. Press release "Wang Global and Olivetti finalize Olsy transaction" 2. Stock Purchase Agreement by and among Wang Laboratories, Inc., Wang Nederland BV, Ing. C. Olivetti & C. S.P.A., Olivetti Sistemas e Servicios Limitada and Olivetti do Brasil S.A. 3. Credit Agreement among Wang Laboratories, Inc., Various Subsidiary Borrowers, Various Lending Institutions, Bankers Trust Company, as Administrative Agent and Arranger and National Westminster Bank Plc, as Syndication Agent and Arranger and Lehman Commercial Paper Inc., as Documentation Agent and Co-Arranger 3 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. WANG LABORATORIES, INC. Dated: MARCH 31, 1998 By: /s/ Albert A. Notini -------------- ------------------------------ Senior Vice President and General Counsel 4 EXHIBIT INDEX Exhibit No. Description - ---------- ----------- 1. Press release "Wang Global and Olivetti finalize Olsy transaction" 2. Stock Purchase Agreement by and among Wang Laboratories, Inc., Wang Nederland BV, Ing. C. Olivetti & C. S.P.A., Olivetti Sistemas e Servicios Limitada and Olivetti do Brasil S.A. 3. Credit Agreement among Wang Laboratories, Inc., Various Subsidiary Borrowers, Various Lending Institutions, Bankers Trust Company, as Administrative Agent and Arranger and National Westminster Bank Plc, as Syndication Agent and Arranger and Lehman Commercial Paper Inc., as Documentation Agent and Co-Arranger EX-1 2 PRESS RELEASE 1 EXHIBIT 1 WANG GLOBAL AND OLIVETTI FINALIZE OLSY TRANSACTION BILLERICA, Mass. - (March 18, 1998) - Wang (NASDAQ: WANG), Wang Global, announced today that it has completed the previously announced purchase of Olsy, the wholly-owned information technology (IT) solutions and service subsidiary of Olivetti S.p.A. The transaction is valued at approximately 700 billion lire ($390 million). Coincident with the acquisition, Wang Global also finalized a $500 million multi-currency revolving credit facility, designed to support the development of the combined company. Bankers Trust Company acted as Agent. National Westminster Bank PLC and a unit of Lehman Brothers Inc. were Co-arrangers. ABOUT WANG GLOBAL Headquartered in Billerica, Massachusetts, Wang Global is a leading international network and desktop integration and services company providing a comprehensive range of information technology services for today's network-centric business environments. With annualized revenues in excess of $3.0 billion, Wang Global designs, installs, operates and maintains global computing and telecommunications networks for some of the world's largest multinational companies. Services include systems architecture design, installation, warranty, help desk, maintenance, software support, and management of enterprise networks to the desktop. Wang Global integration services provide business (more) 2 Wang/Page 2 solutions primarily for the banking industry as well as defense and civilian government agencies. Wang Global employs more than 21,000 professionals and has subsidiaries and affiliates in over 40 countries. Information about Wang Global and its services can be found on the World Wide Web at www.wang.com. ### This press release contains forward-looking statements that involve a number of risks and uncertainties. Among the important factors that could cause actual results to differ materially from those indicated by such forward-looking statements are changes in the mix of the company's services business, competitive pressures, general economic conditions and the risk factors detailed in the company's periodic reports and registration statements filed with the Securities and Exchange Commission. EX-2 3 STOCK PURCHASE AGREEMENT 1 EXHIBIT 2 STOCK PURCHASE AGREEMENT by and among WANG LABORATORIES, INC., WANG NEDERLAND BV, ING. C. OLIVETTI & C. S.P.A., OLIVETTI SISTEMAS E SERVICIOS LIMITADA and OLIVETTI DO BRASIL S.A. dated as of February 28, 1998 2 TABLE OF CONTENTS ARTICLE I CERTAIN PRE-CLOSING ACTIONS.........................2 1.1 Business Items......................................2 1.2 NonBusiness Items...................................3 1.3 Securitization; Factoring...........................4 1.4 Third Party and Intercompany Funded Debt............5 1.5 Intercompany Trade Receivables......................6 1.6 La Defense..........................................6 1.7 Separation of Personnel, Assets and Records; Termination of Powers of Attorney and Employment Agreements........7 1.8 12/31/97 Projected Balance Sheet Actions; Additional Capital Contribution..... ..................................8 1.9 Olsy France........................................10 1.10 Olsy Germany.......................................10 1.11 Oliricerca.........................................11 1.12 Lexikon............................................11 1.13 Cerdanyola Factory.................................12 ARTICLE II SALES AND PURCHASES................................12 2.1 Sales and Purchases................................12 ARTICLE III THE CLOSING........................................14 3.1 Time and Place of Closing..........................14 3.2 Deliveries by the Sellers..........................14 3.3 Deliveries by Wang.................................15 3.4 Escrows............................................16 3.5 Further Assurances.................................16 3.6 Simultaneous Deliveries and Actions................17 ARTICLE IV REPRESENTATIONS AND WARRANTIES OF OLIVETTI........................................17 4.1 Organization, Standing and Qualification; Disclosure Schedule.................17 4.2 Capitalization; Minority Interests.................19 4.3 No Other Interests.................................21 4.4 Authority..........................................21 4.5 Consents; No Violation.............................23 4.6 Financial Statements; Accounts and Accounting Controls............................24 4.7 No Undisclosed Liabilities.........................27 4.8 Absence of Certain Changes.........................27 4.9 Properties and Assets..............................28 i 3 4.10 Title to Personal Properties and Assets............28 4.11 Real Estate........................................29 4.12 Real Estate Leases.................................32 4.13 Personal Property Leases...........................35 4.14 Contracts..........................................36 4.15 Intellectual Property..............................41 4.16 Bank Accounts......................................50 4.17 Insurance..........................................50 4.18 Taxes..............................................51 4.19 Employees; Employee Relations......................53 4.20 Employee Benefit Plans; ERISA......................56 4.21 Compliance with Law; Political Payments...........................................61 4.22 Environmental Matters..............................63 4.23 Litigation.........................................67 4.24 Products Liability.................................68 4.25 Securities Act.....................................69 4.26 Brokers and Finders................................69 4.27 Disclosure.........................................70 ARTICLE V REPRESENTATIONS AND WARRANTIES OF WANG.............70 5.1 Organization, Standing and Qualification......................................70 5.2 Capitalization.....................................71 5.3 Authority..........................................72 5.4 Consents; No Violation.............................73 5.5 Reports............................................74 5.6 Financial Statements...............................74 5.7 Political Payments.................................74 5.8 Litigation.........................................75 5.9 Brokers and Finders................................75 5.10 Letter Concerning Financing........................76 5.11 Net Operating Loss.................................76 5.12 Absence of Adverse Change..........................76 5.13 Disclosure.........................................76 ARTICLE VI CERTAIN COVENANTS, AGREEMENTS AND REPRESENTATIONS AND WARRANTIES OF THE PARTIES........................................77 6.1 Conduct of Business Pending the Closing............77 6.2 Nonsolicitation....................................84 6.3 Full Access........................................86 6.4 Supplements to Disclosure Schedules................87 6.5 Non-Governmental Consents..........................87 6.6 Governmental Consents..............................90 ii 4 6.7 Best Efforts.......................................91 6.8 Expenses...........................................91 6.9 Records; Access....................................92 6.10 Delivery of Reports By Wang........................94 6.11 Financing..........................................95 6.12 Certain Information and Financial Statements...............................96 6.13 1997 EBITDA Purchase Price Adjustment.............100 6.14 Closing Balance Sheet Purchase Price Adjustment........................................102 6.15 Olsy Germany Asbestos Clean-Up....................107 6.16 Guarantees........................................107 6.17 Certain Employee Benefit Matters..................109 6.18 Determination of Funding Status of OCJ Pension Plan...............................111 6.19 Spares............................................115 6.20 Trade Receivables.................................116 6.21 Work in Progress..................................117 6.22 Statutory Recapitalization........................118 6.23 Coopers & Lybrand Consent.........................118 6.24 Cooperation in Italy..............................120 6.25 Cooperation With Respect to Certain Business Items and NonBusiness Items..............121 6.26 Certain Intellectual Property Covenants.........................................122 6.27 Subleases.........................................125 ARTICLE VII TAX MATTERS.......................................125 7.1 Preparation and Filing of Tax Returns; Payment of Taxes..................................125 7.2 Tax Indemnification...............................126 7.3 Entity Classification Election....................128 7.4 Tax Claims........................................128 7.5 Refunds...........................................130 7.6 Tax Payments Resulting from Audit Adjustment........................................131 7.7 Amnesty...........................................132 7.8 Transfer and Similar Taxes........................133 7.9 FIRPTA Compliance.................................133 7.10 Assistance and Cooperation........................133 7.11 Characterization of Indemnification Payments..........................................134 7.12 Indemnity Payments................................134 7.13 Survival..........................................136 iii 5 ARTICLE VIII ONDITIONS TO THE OBLIGATIONS OF SELLERS........................................136 8.1 Representations and Warranties....................136 8.2 Performance.......................................136 8.3 Officers' Certificate.............................136 8.4 Non-Governmental Consents.........................137 8.5 Waiting Periods...................................137 8.6 No Injunction.....................................137 8.7 Governmental Actions..............................137 8.8 Absence of Adverse Change.........................137 8.9 Related Agreements................................137 8.10 Opinions..........................................138 ARTICLE IX CONDITIONS TO THE OBLIGATIONS OF BUYERS..........138 9.1 Representations and Warranties....................138 9.2 Performance; Olsy Shares; Pre-Closing.............138 9.3 Officers' Certificate.............................138 9.4 Olivetti Non-Governmental Notices.................139 9.5 Waiting Periods...................................139 9.6 No Injunction.....................................139 9.7 Governmental Actions..............................139 9.8 Financing.........................................139 9.9 Absence of Adverse Change.........................139 9.10 Related Agreements................................140 9.11 Opinions..........................................140 ARTICLE X SURVIVAL AND INDEMNIFICATION......................140 10.1 Survival..........................................140 10.2 Indemnification by Olivetti.......................141 10.3 Indemnification by Wang...........................144 10.4 Procedures Relating to Indemnification............145 10.5 Consideration for Payment of Indemnification Obligations.......................147 10.6 Recovery Principles...............................147 ARTICLE XI TERMINATION AND ABANDONMENT.......................148 11.1 Termination.......................................148 11.2 Procedure Upon Termination........................149 ARTICLE XII MISCELLANEOUS PROVISIONS..........................150 12.1 Amendment and Modification........................150 12.2 Waiver of Compliance..............................150 12.3 Notices...........................................150 12.4 Assignment........................................152 12.5 Publicity.........................................152 12.6 Governing Law.....................................153 iv 6 12.7 Counterparts......................................153 12.8 Headings..........................................153 12.9 Entire Agreement..................................153 12.10 Third Parties.....................................153 12.11 Certain Defined Terms.............................154 12.12 Dispute Resolution................................159 12.13 Miscellaneous.....................................161 v 7 LIST OF SCHEDULES Schedule 1 Description of the Business Schedule 1.2 Presumed NonBusiness Items Schedule 1.8(a)(iv) Public Administration Trade Receivables Schedule 1.10 Olsy Germany Shares Schedule 3.2(d) Certain Directors Schedule 4.2(e) Certain Formation Transactions Schedule 4.14(a) Major Customers Schedule 4.14(b)(xvi) Certain Countries Schedule 6.12(a) 12/31/97 Projected Balance Sheet Schedule 6.12(b) Information Documents Schedule 6.13(d) 1997 EBITDA Illustration Schedule 6.14(d) Closing Tangible Equity Value Adjustment Amount Illustration Schedule 6.16(b) Customer Bonds Schedule 6.16(c) Guarantees Schedule 6.18(b) Actuarial Assumptions Schedule 6.20 Trade Receivables Collection Periods Schedule 6.21 Works in Progress Collection Periods Schedule 6.27 Sublets with Olivetti Affiliates Schedule 8.4 Wang Non-Governmental Consents Schedule 9.4 Olivetti Non-Governmental Notices Schedule 10.2(a)(viii) Civil Cases Pending in Italy Schedule 10.6(d) Certain Plans Schedule 12.11(a) Indemnified Related Agreements Schedule 12.11(b) Major Subsidiaries Schedule 12.11(c) Real Estate Agreements Schedule 12.11(d) Related Agreements Schedule 12.13 Defined Terms LIST OF EXHIBITS Exhibit 1 Oliricerca Share Transfer and Shareholder Agreement Exhibit 2 Oliricerca Development and Cooperation Agreement Exhibit 3 Lexikon Agreement Exhibit 4 Earn-Out Agreement Exhibit 5 Ancillary Consideration Agreement Exhibit 6 Stock Appreciation Right Certificate Exhibit 7 Letter of Credit Exhibit 8 Cash Escrow Agreement Exhibit 9 Stock Escrow Agreement Exhibit 10 Stockholder Agreement Exhibit 11 Form of Customer Consents vi 8 Exhibit 12 Transitional Authorisation and Trademark License Agreement Exhibit 13 Matters to be Covered in Opinion of Counsel for Wang Exhibit 14 Matters to be Covered in Opinion of Counsel for Olivetti Exhibit 15 Noncompetition and Nonsolicitation Agreement Exhibit 16 Indemnification Agreement (MIS) Exhibit 17 Oliman Agreement Exhibit 18 Transitional Services Agreement (Olivetti to Olsy) Exhibit 19 Transitional Services Agreement (Olsy to Olivetti Exhibit 20 Framework Preferred Services Provider Agreement vii 9 STOCK PURCHASE AGREEMENT STOCK PURCHASE AGREEMENT, dated as of February 28, 1998 (this "Agreement"), by and among Wang Laboratories, Inc., a Delaware corporation ("Wang"), Wang Nederland BV, a Netherlands corporation ("Wang Nederland" and together with Wang, the "Buyers"), Ing. C. Olivetti & C. S.P.A., an Italian corporation ("Olivetti"), Olivetti Sistemas e Servicios Limitada, a Brazilian corporation ("Olivetti Sistemas"), and Olivetti do Brasil S.A., a Brazilian corporation ("Olivetti Brazil" and together with Olivetti and Olivetti Sistemas, the "Sellers"). Olivetti is engaged in, among other things, the business of providing information technology solutions and services to customers worldwide more fully described on Schedule 1 hereto (such business being hereinafter referred to as the "Business"). Through a series of transactions beginning at the end of 1995 and concluding on the date hereof described in general terms in the notes to the 9/30/97 Italian GAAP Financial Statements (as defined in Section 4.6(b)), Olivetti has transferred its entire right, title and interest in the Business to Olivetti Solutions S.P.A., an Italian corporation ("Olsy"), Olivetti Corporation of Japan, a Japanese corporation ("Olsy Japan"), or Olsy do Brasil Ltda., a Brazilian corporation ("Olsy Brazil") (such series of transactions being hereinafter referred to as the "Formation"). This Agreement sets forth the terms and conditions upon which Olivetti will sell to Wang, and Wang will purchase from Olivetti, the Business through the sale and purchase of the outstanding shares of Olsy and Olsy Japan, owned by Olivetti and of Olsy Brazil, owned by Olivetti Sistemas and Olivetti Brazil, and certain related transactions. NOW, THEREFORE, in consideration of the foregoing and the respective representations, warranties, covenants and agreements hereinafter set forth, and intending to be legally bound hereby, the parties hereto agree as follows: 1 10 ARTICLE I CERTAIN PRE-CLOSING ACTIONS --------------------------- 1.1 BUSINESS ITEMS. Prior to the Closing (as defined in Section 3.1) (except as otherwise provided in this Agreement or in any Related Agreement (as defined in Section 12.11)), Olivetti (at its expense and without any consideration from the Buyers, Olsy, Olsy Japan, Olsy Brazil, any Subsidiary (as defined in Section 12.11) or any Olsy Japan Subsidiary (as defined in Section 12.11) therefor other than as set forth in Section 2.1(b)) shall (with not less than five Business Days prior notice to, and the consent of, Wang) sell, transfer, convey, assign and deliver to Olsy, Olsy Japan, Olsy Brazil or a Wholly-Owned Subsidiary (as defined in Section 12.11) (a) any employment relationship, benefit plan or arrangement, asset, property, Contract (as defined in Section 12.11), Intellectual Property (as defined in Section 4.15(a)(ii)), right, privilege, franchise, operation or business (or any interest in or license for or relating to any of the foregoing) owned or held by Olivetti or any Olivetti Affiliate (as defined in Section 12.11) which does or did relate exclusively to, or arises or arose exclusively out of, the Business, or is or was used in providing products, services or support predominately (measured by usage, revenue or cost) to customers of the Business or pursuant to or under which products, services or support are or were provided predominately (measured by usage, revenue or cost) to customers of the Business (such employment relationship, benefit plan or arrangement, assets, properties, Contracts, rights, privileges, franchises, operations or businesses (whether or not so transferred) being hereinafter referred to as a "Business Item" and collectively as the "Business Items") and (b) any liability or obligation which does or did relate exclusively to, or arises or arose predominately out of any Business Item so sold, transferred, conveyed, assigned and delivered. Notwithstanding anything herein to the contrary, if Olivetti has unintentionally failed to sell, transfer, convey, assign or deliver a Business Item prior to the Closing in accordance with this Section 1.1 it shall not be in breach of this Section 1.1 if (a) (i) such Business Item is de minimis or (ii) the failure to so sell, transfer, convey, assign or deliver has not had 2 11 an adverse financial or economic effect on the business, assets, properties, liabilities, results of operations or financial condition of Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary and (b) it sells, transfers, conveys, assigns or delivers such Business Item within 45 days of the earlier of (i) the date it becomes aware of such failure or (ii) the date of notice from Wang of such failure. Wang acknowledges that (except as otherwise provided in this Agreement or in any Related Agreement) it is not, pursuant to this Agreement, acquiring (a) Olivetti's interest in OIS Italia S.p.A., Olivetti Information Services S.p.A., Olivetti Sanita S.p.A. or Lottomatica S.c.p.A. (or any employment relationship, benefit plan or arrangement, asset, property, right, privilege, franchise, operation or business owned or held by any of the foregoing on or before January 1, 1997 or acquired by any of the foregoing since such date other than by way of sale, transfer, conveyance, assignment or delivery from Olsy, Olsy Japan, Olsy Brazil or any Subsidiary) or (b) the general purpose printers and specialized printers manufactured by Olivetti Lexikon S.p.A. ("Lexikon") or any Affiliate (as defined in Section 12.11) of Lexikon and any intellectual property relating solely and specifically thereto; and Wang shall not assert that these are Business Items. 1.2 NONBUSINESS ITEMS. Prior to the Closing (except as otherwise provided in this Agreement or in any Related Agreement), Olivetti (at its expense and without any consideration from the Buyers, Olsy, Olsy Japan, Olsy Brazil, any Subsidiary or any Olsy Japan Subsidiary therefor other than as set forth in Section 2.1(b)) shall (with not less than five Business Days prior notice to, and the consent of, Wang) cause Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary (as defined in Section 12.11) to transfer to it (in exchange for an amount in cash from Olivetti, in immediately available funds, equal to the net book value thereof, if any) any employment relationship, benefit plan or arrangement, asset, property, Contract, right, privilege, franchise, operation or business (or any interest in or license for or relating to any of the foregoing) owned or held by Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary, or any liability or obligation to which Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary is subject, in each case, which does not or did not relate exclusively to, or does not or did not arise exclusively out of, the 3 12 Business, or is not or was not used in providing products, services or support predominately (measured by usage, revenue or cost) to customers of the Business or pursuant to or under which products, services or support are not or were not provided predominately (measured by usage, revenue or cost) to customers of the Business (such employment relationships, benefit plans or arrangements, assets, properties, Contracts, rights, privileges, franchises, operations, businesses, liabilities or obligations (whether or not so transferred) being hereinafter referred to individually as a "NonBusiness Item" and collectively as the "NonBusiness Items"). Notwithstanding anything herein to the contrary, if Olivetti has unintentionally failed to cause Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary to transfer a NonBusiness Item to it prior to the Closing in accordance with this Section 1.2 it shall not be in breach of this Section 1.2 if (a) the failure to cause such transfer has not had an adverse financial or economical effect on the business, assets, properties, liabilities, results of operations or financial condition of Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary and (b) it causes the transfer of such NonBusiness Item within 45 days of the earlier of (i) the date it becomes aware of such failure or (ii) the date of notice from Wang of such failure. The entities listed on Schedule 1.2 hereto shall be presumed to be NonBusiness Items (subject to this Section 1.2 prior to the Closing and Section 3.5(a) after the Closing) unless Wang notifies Olivetti otherwise within 90 days after the date hereof. 1.3 SECURITIZATION; FACTORING. (a) Prior to the Closing, Olivetti (at Olsy's expense and without any consideration from the Buyers, Olsy, Olsy Japan, Olsy Brazil, any Subsidiary or any Olsy Japan Subsidiary therefor other than as set forth in Section 2.1(b)) shall cause (i) all plans, programs or arrangements under which any trade receivables of any of Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary were securitized to be terminated, (ii) all amounts due to or from Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary thereunder to be settled, (iii) all ongoing reporting obligations thereunder of Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary to be terminated and (iv) all Liens (as defined in Section 12.11) arising thereunder to be released. At the Closing, Olivetti shall deliver to Wang true, complete and correct copies of letters from each 4 13 Person (as defined in Section 12.11) with whom any trade receivable of Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary was securitized confirming the foregoing. (b) Prior to the Closing, Olivetti (at Olsy's expense and without any consideration from the Buyers, Olsy, Olsy Japan, Olsy Brazil, any Subsidiary or any Olsy Japan Subsidiary therefor other than as set forth in Section 2.1(b)) shall cause (i) all plans, programs or arrangements under which any trade receivables of any of Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary were factored with recourse to be terminated, (ii) all trade receivables factored thereunder to be repurchased and (iii) all Liens arising thereunder to be released. 1.4 THIRD PARTY AND INTERCOMPANY FUNDED DEBT. (a) Prior to the Closing, Olivetti (at its expense and without any consideration from the Buyers, Olsy, Olsy Japan, Olsy Brazil, any Subsidiary or any Olsy Japan Subsidiary therefor other than as set forth in Section 2.1(b)) shall cause (i) all amounts owed under any credit facility, loan agreement or similar arrangement by Olsy, Olivetti Australia Pty, Ltd., Olsy Canada Ltd. or any Major Subsidiary (as defined in Section 12.11) (other than Olsy Japan) to be paid or otherwise extinguished, (ii) all such credit facilities, loan agreements or similar agreements to be terminated and (iii) all Liens arising thereunder to be released, such that as of the Closing, none of Olsy, Olivetti Australia Pty, Ltd., Olsy Canada Ltd. or any Major Subsidiary (other than Olsy Japan) will owe any amounts to third parties under any such credit facility, loan agreement or similar agreement (provided that Olivetti and Wang may mutually agree in writing to defer any of the foregoing with respect to a particular credit facility, loan agreement or similar arrangement until after the Closing if such deferral would avoid substantial termination expenses associated with consummation of any of the foregoing prior to the Closing). (b) Prior to the Closing, Olivetti (at its expense and without any consideration from the Buyers, Olsy, Olsy Japan, Olsy Brazil, any Subsidiary or any Olsy Japan Subsidiary therefor other than as set forth in Section 2.1(b)) shall cause all amounts owed by Olivetti 5 14 or any Olivetti Affiliate, on the one hand, to Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary, on the other hand, or VICE VERSA, arising out of loans from one to the other to be paid or otherwise extinguished, such that as of the Closing there will be a single amount owing from Olivetti to Olsy, which Olivetti shall pay in cash, in immediately available funds, immediately prior to the Closing. 1.5 INTERCOMPANY TRADE RECEIVABLES. Prior to the Closing, Olivetti (at its expense and without any consideration from the Buyers, Olsy, Olsy Japan, Olsy Brazil, any Subsidiary or any Olsy Japan Subsidiary therefor other than as set forth in Section 2.1(b)) shall cause all amounts owed by Olivetti or any Olivetti Affiliate, on the one hand, to Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary, on the other hand, or VICE VERSA, arising out of the sale of products, services or support by one to the other to be, subject to payment terms stated in OLGA (as defined in Section 12.11) or other specific stated terms, paid, such that as of the Closing none of such amounts shall be in dispute. 1.6 LA DEFENSE. Not later than the later of the Closing or June 30, 1998, Olivetti (at its expense and without any consideration from the Buyers, Olsy, Olsy Japan, Olsy Brazil, any Subsidiary or any Olsy Japan Subsidiary therefor other than as set forth in Section 2.1(b)) shall cause Olsy to transfer to a newly formed French Olivetti Affiliate the sale-leaseback agreement, dated December 23, 1987, as amended, among Societe Lyonnaise Immobiliere pour le Commerce et l'Industrie ("SLICOMI"), Compagnie Financiere pour la Location d'Immeubles Industriels et Commerciaux ("LOCINDUS"), "NATIOCREDIBAIL", "Societe Immobiliere pour le Commerce et l'Industrie", "Societe Generale pour le Developpement des Operations de Credit Bail Immobilier SOGEBAIL" (collectively, the "Landlord") and Olivetti Logabax S.A. renamed "Olsy France S.A." (the "La Defense Agreement"). The assignment shall be evidenced by a deed of assignment in form and substance reasonably satisfactory to Wang among the Landlord, Olsy France S.A. ("Olsy France") and the French Olivetti Affiliate (the "La Defense Deed of Assignment") duly executed before French notaries which La Defense Deed of Assignment shall record (i) the Landlord's consent to the assignment of the La 6 15 Defense Agreement to the French Olivetti Affiliate, (ii) a full and unconditional release by the Landlord of Olsy France's obligations as joint guarantor under Article 204.5 of the La Defense Agreement (or alternatively, the joint undertaking of the French Olivetti Affiliate and of Olivetti to indemnify Olsy France should the Landlord not waive its right of recourse against Olsy France under Article 204.5 of the La Defense Agreement) and (iii) an acknowledgement that the terms and conditions stipulated in the La Defense Agreement shall remain applicable. The La Defense Deed of Assignment shall be delivered by Olivetti to Wang not later than the later of the Closing or June 30, 1998. Olivetti shall reimburse Wang for all costs and expenses associated with the La Defense Agreement (in excess of its obligations under the sublease for a portion of the La Defense premises referred to on Schedule 12.11(c) hereto) incurred by Olsy, Olsy France or any Affiliate of Olsy between the Closing and the date the La Defense Deed of Assignment is delivered. If Olivetti does not deliver the La Defense Deed of Assignment by the later of the Closing or June 30, 1998, Olivetti shall pay Wang 5,000,000,000 Italian lira and remain obligated under this Section 1.6 to deliver the La Defense Deed of Assignment as soon as practicable thereafter. Olivetti shall be responsible for the payment of all taxes, if any, which may become due by reason of the assignment to the French Olivetti Affiliate of the La Defense Agreement and shall indemnify and hold Olsy France harmless with respect to any negative tax impact on Olsy France of such assignment. 1.7 SEPARATION OF PERSONNEL, ASSETS AND RECORDS; TERMINATION OF POWERS OF ATTORNEY AND EMPLOYMENT AGREEMENTS. (a) Prior to the Closing or as soon as practicable thereafter, Olivetti (at its expense and without any consideration from the Buyers, Olsy, Olsy Japan, Olsy Brazil, any Subsidiary or any Olsy Japan Subsidiary therefor other than as set forth in Section 2.1(b)) shall (except as otherwise provided in this Agreement or any Related Agreement) move the personnel, assets and records of Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary into contiguous and secure space separated from the personnel, assets and records of 7 16 Olivetti or any Olivetti Affiliate as is reasonable for the personnel, assets or records concerned. (b) Prior to the Closing (or in the case of clause (ii) not later than 30 days after the Closing), Olivetti (at its expense and without any consideration from the Buyers, Olsy, Olsy Japan, Olsy Brazil, any Subsidiary or any Olsy Japan Subsidiary therefor other than as set forth in Section 2.1(b)) shall cause (i) all powers of attorney granted by Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary to any director, officer or employee of Olivetti or any Olivetti Affiliate to be terminated and (ii) cause the employment agreements with the four executives previously identified to Olivetti by Wang to be terminated. 1.8 12/31/97 PROJECTED BALANCE SHEET ACTIONS; ADDITIONAL CAPITAL CONTRIBUTION. (a) Prior to the Closing and effective not later than as of December 31, 1997 (or in the case of clauses (ii) and (iii), effective as at January 1, 1998 or in the case of clauses (v) and (vii), effective as at February 15, 1998), Olivetti (at its expense and without any consideration from the Buyers, Olsy, Olsy Japan, Olsy Brazil, any Subsidiary or any Olsy Japan Subsidiary therefor other than as set forth in this Section 1.8(a) or Section 2.1(b)) has caused or shall cause each of the following actions to be taken: (i) the sale, transfer, conveyance, assignment and delivery by Olsy Espana S.A. of all the assets or liabilities of, or associated with, the "Fondo de Indemnizaciones de pago diferido" to an Olivetti Affiliate and the purchase by such Olivetti Affiliate of all such assets for 71,400,000,000 Italian lira and the assumption by such Olivetti Affiliate of all costs, expenses, liabilities and obligations relating to the "Fondo de Indemnizaciones de pago diferido" and the provision of retirement income benefits and death benefits to former employees of Olsy Espana S.A., including, without limitation, all internal and external administrative costs (including, but not limited to, legal fees, expenses of paying benefits, responding to participant inquiries and record keeping) and funding obligations relating thereto; 8 17 (ii) the increase of the restructuring fund for empty spaces on the books and records of Olsy and the Controlled Subsidiaries to an aggregate of 30,000,000,000 Italian lira; (iii) the increase of the accrual for unpaid holidays on the books and records of Olsy and the Controlled Subsidiaries to an aggregate of whatever amount as is necessary to reflect the status thereof as of December 31, 1997; (iv) the sale, transfer, conveyance, assignment and delivery by Olsy to Olivetti of the trade receivables set forth on Schedule 1.8(a)(iv) hereto for 102,300,000,000 Italian lira in cash, in immediately available funds; (v) the payment by Olivetti to Olsy of 25,000,000,000 Italian lira in cash, in immediately available funds, which payment shall be converted prior to the Closing into a contribution to capital with the resulting share capital increase resolved at the extraordinary shareholders meeting of Olsy held on January 30, 1998; (vi) the increase of the headcount restructuring fund on the books and records of Olsy and the Controlled Subsidiaries in Italy to 50,000,000,000 Italian lira; and (vii) the increase of the restructuring fund for the clean-up of the building located in Frankfurt-am-Main at Lyner Strasse, 34 on the books and records of Olsy by an amount of D.M. 12,936,000 (converted in Italian lira on the basis of the exchange rate of the day on which the increase is effective) additional to the fund of D.M. 12,780,000 recorded on the books and records of Olivetti G.m.b.H., a German company ("Olsy Germany"). (b) In addition, not later than February 15, 1998, Olivetti (at its expense and without any consideration from the Buyers, Olsy, Olsy Japan, Olsy Brazil, any Subsidiary or any Olsy Japan Subsidiary therefor other than as set forth in this Section 1.8(b) or Section 2.1(b)) shall pay 15,000,000,000 Italian lira in cash, in immediately available funds to Olsy, which 9 18 payment shall be converted prior to the Closing into a contribution to capital with the resulting share capital increase resolved at the extraordinary shareholders meeting of Olsy held on January 30, 1998. 1.9 OLSY FRANCE. At a pre-closing to be held immediately prior to the Closing at places to be mutually agreed by Wang and Olivetti (the "Pre-Closing"), Olivetti (without any consideration from the Buyers, Olsy Japan, Olsy Brazil, any Subsidiary or any Olsy Japan Subsidiary therefor other than as set forth in this Section 1.9 or Section 2.1(b)) shall cause Olsy International NV, a Dutch company which shall remain a Wholly-Owned Subsidiary after the Closing ("Olsy International"), to sell, transfer, convey, assign and deliver to Wang (or any subsidiary assignee of Wang permitted under Section 12.4) 3,000,000 shares, par value 10 French francs per share (the "Olsy France Shares"), of Olsy France, representing all of the outstanding shares of capital stock of Olsy France, free and clear of any Lien. In consideration for such sale, transfer, conveyance, assignment and delivery, Wang shall pay (or cause to be paid) the consideration to be agreed not later than two Business Days prior to the Pre-Closing (the "Olsy France Consideration") to Olsy International. At the Pre-Closing, Olivetti will deliver (or cause to be delivered) (i) duly executed ORDRES DE MOUVEMENT and (ii) the resignations of those individuals who are members of the Board of Directors of Olsy France and those officers of Olsy France specified by Wang not later than five Business Days prior to the Pre-Closing, and Wang will deliver (or cause to be delivered) the Olsy France Consideration by wire transfer of immediately available funds to an account designated by Olsy International at least three Business Days prior to the Pre-Closing. 1.10 OLSY GERMANY. At the Pre-Closing, Olivetti (without any consideration from the Buyers, Olsy Japan, Olsy Brazil, any Subsidiary or any Olsy Japan Subsidiary therefor other than as set forth in this Section 1.10 or Section 2.1(b)) shall cause Olsy International to sell, transfer, convey, assign and deliver to Wang (or any subsidiary assignee of Wang permitted under Section 12.4) the eleven shares set forth in Schedule 1.10 hereto with total nominal value of DM 50,100,000 (the "Olsy Germany Shares"), of Olsy Germany, representing all of the outstanding shares of capital stock of 10 19 Olsy Germany, free and clear of any Lien. In consideration for such sale, transfer, conveyance, assignment and delivery, Wang shall pay (or cause to be paid) the consideration to be agreed not later than two Business Days prior to the Pre-Closing (the "Olsy Germany Consideration") to Olsy International. At the Pre-Closing, Olivetti will deliver (or cause to be delivered) a duly executed and notarized deed of sale and transfer, and Wang will deliver (or cause to be delivered) the Olsy Germany Consideration by wire transfer of immediately available funds to an account designated by Olsy International at least three Business Days prior to the Pre-Closing. At the Closing, Olivetti shall cause appropriate notification to be made pursuant to ' 16(1) of the Gesetz betreffend die Gesellschaften mit beschrankter Haftung. 1.11 OLIRICERCA. Concurrently with the execution hereof, Olivetti (without any consideration from the Buyers, Olsy Japan, Olsy Brazil, any Subsidiary or any Olsy Japan Subsidiary therefor, except as set forth in Section 2.1(b)) shall, and shall cause Olsy to, execute the Share Transfer and Shareholder Agreement substantially in the form of Exhibit 1 hereto (the "Oliricerca Share Transfer and Shareholder Agreement"). Olivetti shall not, and shall cause Olsy not to, consent to any modification, amendment, termination or waiver of any provision of the Share Transfer and Shareholder Agreement prior to the Closing. At the Pre-Closing, Olivetti shall, and shall cause Olsy to, consummate the transactions described in the Share Transfer and Shareholder Agreement, including causing Oliricerca to execute a Development and Cooperation Agreement substantially in the form of Exhibit 2 hereto (the "Oliricerca Development and Cooperation Agreement"). 1.12 LEXIKON. Prior to the Pre-Closing, Olivetti shall have caused Lexikon and Olsy to execute a Supplemental Agreement substantially in the form of Exhibit 3 hereto (the "Lexikon Agreement"), amending the Framework OEM Agreement between Lexikon and Olivetti S.p.A. Olivetti shall not, and shall cause Lexikon not to, consent to any modification, amendment, termination or waiver of any provision of such Lexikon Agreement or Framework OEM Agreement prior to the Closing. 11 20 1.13 CERDANYOLA FACTORY. Prior to the Closing, Olivetti (at its expense and without any consideration from the Buyers, Olsy, Olsy Japan, Olsy Brazil, any Subsidiary or any Olsy Japan Subsidiary therefor other than as set forth in Section 2.1(b)) shall cause (a) Olivetti Espana S.A. to sell, transfer, convey, assign and deliver the real property known as Boters 5 Cerdanyola, Property Register No. 5 of Barcelona, volume No. 648, book No. 500 sheet No. 62, estate No. 22.737 and all buildings and improvements thereon to an Olivetti Affiliate for an amount in cash, in immediately available funds, equal to the OLGA net book value thereof as of December 31, 1997 and (b) such Olivetti Affiliate to purchase such real property and all buildings and improvements thereon and assume all liabilities and obligations associated therewith. ARTICLE II SALES AND PURCHASES ------------------- 2.1 SALES AND PURCHASES. (a) Subject to the terms and conditions of this Agreement, at the Closing, and in consideration of the payments to be made hereunder: (i) Olivetti shall sell, transfer, convey, assign and deliver to Wang Nederland (or any subsidiary assignee of Wang permitted under Section 12.4) all of the ordinary shares, par value 1,000 Italian lira per share, of Olsy outstanding as of the Closing Date (as defined in Section 3.1) (which shall include those to be issued pursuant to Sections 1.8(a)(v) and 1.8(b) and in satisfaction of the condition in Section 9.2(b)), representing all of the outstanding shares of capital stock of Olsy (the "Olsy Shares"), free and clear of any Lien; (ii) Olivetti shall sell, transfer, convey, assign and deliver to Wang (or any non-Japanese subsidiary assignee of Wang permitted under Section 12.4) 87,000 shares, par value 50,000 yen per share, of Olsy Japan, representing 80% of the outstanding shares of capital stock of Olsy Japan (the "Olsy Japan Shares"), free and clear of any Lien (other than the restrictions in the by-laws of 12 21 Olsy Japan or in the Memorandum of Understanding and Shareholders Agreement, both dated as of May 13, 1985, by and between Olivetti and Toshiba Corporation of Tokyo, Japan); and (iii) Olivetti Sistemas and Olivetti Brazil shall sell, transfer, convey, assign and deliver to Wang (or any subsidiary assignee of Wang permitted under Section 12.4) the quotas of Real 1,126,318 and 5,229,566 respectively, held in the capital of Olsy Brazil, representing all of the outstanding shares of capital stock of Olsy Brazil (the "Olsy Brazil Shares"), free and clear of any Lien. (b) Subject to the terms and conditions of this Agreement (including, without limitations, the adjustment of the Purchase Price (as defined in Section 2.1(c)) pursuant to Sections 6.13 and 6.14), at the Closing, in consideration of the sale, transfer, conveyance, assignment and delivery by Olivetti pursuant to Section 2.1(a), Wang shall pay, deliver or transfer (or cause Wang Nederland or any subsidiary assignee of Wang permitted under Section 12.4 to pay) to Olivetti: (i) 123,400,000,000 Italian lira in cash (the "Cash Portion of the Purchase Price"), 30,000,000,000 Italian lira of which shall be deposited in escrow in accordance with Section 3.4(a); (ii) 7,250,000 shares of common stock, par value $0.01 per share ("Wang Common Stock"), of Wang (the "Wang Shares"), all of which shall be deposited in escrow in accordance with Section 3.4(b); (iii) the right to the earn-outs (the "Earn-Outs") set forth in an Earn-Out Agreement by and between Wang and Olivetti substantially in the form of Exhibit 4 hereto; (iv) the right to the ancillary consideration (the "Ancillary Consideration") set forth in the Ancillary Consideration Agreement by and between Wang and Olivetti substantially in the form of Exhibit 5 hereto, all of 13 22 which shall be deposited in escrow in accordance with Section 3.4(b); and (v) the Stock Appreciation Rights (the "Rights") set forth in a Stock Appreciation Right Certificate substantially in the form of Exhibit 6 hereto. (c) The Cash Portion of the Purchase Price, the Wang Shares, the Earn-Outs, the Ancillary Consideration and the Rights are hereinafter collectively referred to as the "Purchase Price." The Purchase Price is subject to adjustment pursuant to Sections 6.13 and 6.14. ARTICLE III THE CLOSING ----------- 3.1 TIME AND PLACE OF CLOSING. The closing of the transactions contemplated by this Agreement (the "Closing") shall take place at the offices of Skadden, Arps, Slate, Meagher & Flom LLP, One Beacon Street, Boston, Massachusetts at 10:00 a.m. (local time) on the later of (a) March 16, 1998 or (b) the third Business Day following the date on which all of the conditions in Articles VIII and IX to each party's respective obligations to consummate the transactions contemplated by this Agreement shall have been satisfied or waived (the "Condition Satisfaction Date"), provided that if the clause (b) applies and the Condition Satisfaction Date occurs after the fifteenth day of any month, the Closing shall occur on the later of (i) the last Business Day of the month in which the Condition Satisfaction Date occurs or (ii) the third Business Day following the Condition Satisfaction Date, or (c) at such other time and place as the parties may agree in writing. The date on which the Closing occurs is referred to herein as the "Closing Date." 3.2 DELIVERIES BY THE SELLERS. At the Closing, the Sellers will deliver (or cause to be delivered) the following to Wang: (a) the certificate or certificates representing the Olsy Shares and the Olsy Japan Shares, 14 23 duly executed, and a power of attorney authorizing the named attorney-in-fact to record the transfer of the Olsy Brazil Shares in accordance with applicable Brazilian law, duly executed; (b) a Letter of Credit (the "Letter of Credit") issued in accordance with ICC publication 500 substantially in the form of Exhibit 7 hereto issued by Banca Commerciale Italiana S.p.A. (or any other primary Italian or U.S. bank reasonably acceptable to Wang) in the face amount of 50,000,000,000 Italian lira; (c) each Related Agreement to which any Seller or any Affiliate of Olivetti is a party, duly executed; (d) the resignations of all directors of Olsy and each Controlled Subsidiary listed on Schedule 3.2(d) hereto, duly executed, and resolutions electing successors thereto designated by Wang; and (e) all other previously undelivered documents required to be delivered by Olivetti or any Affiliate of Olivetti to Wang pursuant to this Agreement at or prior to the Closing (including, without limitation, the officers' certificate and the opinions of counsel required to be delivered by Olivetti pursuant to Sections 9.3 and 9.11, respectively), duly executed where such execution is called for. 3.3 DELIVERIES BY WANG. At the Closing, Wang will deliver (or cause Wang Nederland or any assignee of Wang permitted under Section 12.4 to deliver) the following to Sellers: (a) the Cash Portion of the Purchase Price, by wire transfer of immediately available funds, 93,400,000,000 Italian lira of which shall be delivered to one or more accounts as shall be designated by Olivetti at least three Business Days prior to the Closing, and 30,000,000,000 Italian lira of which shall be deposited in escrow in accordance with Section 3.4(a); (b) a certificate representing the Wang Shares issued in the name of Olivetti or its designee, duly executed by Wang (the "Wang Shares Certificate"), 15 24 which shall be deposited in escrow in accordance with Section 3.4(b); (c) each Related Agreement to which it is a party, duly executed; and (d) all other previously undelivered documents required to be delivered by Wang or any of its Affiliates to the Sellers pursuant to this Agreement at or prior to the Closing (including, without limitation, the officers' certificate and opinion of counsel required to be delivered by Wang pursuant to Sections 8.3 and 8.10, respectively), duly executed where such execution is called for. 3.4 ESCROWS. At the Closing, Wang and Olivetti shall deposit (a) 30,000,000,000 Italian lira of the Cash Portion of the Purchase Price in escrow pursuant to a Cash Escrow Agreement, substantially in the form of Exhibit 8 hereto (the "Cash Escrow Agreement") and (b) the Wang Shares Certificate and the Ancillary Consideration in escrow pursuant to a Stock Escrow Agreement, substantially in the form of Exhibit 9 hereto (the "Stock Escrow Agreement"). 3.5 FURTHER ASSURANCES. (a) After the Closing, Olivetti shall from time to time, at the request of Wang and, except as otherwise provided in the proviso to this Section 3.5(a), without further cost or expense to Wang, execute and deliver such other instruments of sale, transfer, conveyance and assignment and take such other actions as Wang may reasonably request in order to more effectively consummate the transactions contemplated hereby (including, without limitation, the transactions contemplated by Article I) without regard to whether such transactions were to be consummated before or after the Closing and to vest in Wang or Wang Nederland (or any subsidiary assignee of Wang permitted under Section 12.4) good, valid and marketable title to the Olsy Shares, the Olsy Japan Shares, the Olsy Brazil Shares, the Olsy France Shares, the Olsy Germany Shares, the Business Items and the assets, properties, Contracts, Intellectual Property, rights, privileges, franchises, operations and business of the Business, free and clear of any Lien (other than those contemplated by this Agreement); provided, however, that Wang shall reimburse Olivetti for any out-of-pocket costs or expenses incurred by Olivetti 16 25 with respect to any action taken pursuant to this Section 3.5(a) with respect to the Olsy France Shares or the Olsy Germany Shares; and provided further, however, that Olivetti's obligations under this Section 3.5(a) with respect to Sections 1.1, 1.2 and 1.7 shall expire on the second year anniversary of the Closing Date, the eighteen month anniversary of the Closing Date and the second year anniversary of the Closing Date, respectively; provided further, however, that Olivetti's obligations under this Section 3.5(a) with respect to any Business Item or NonBusiness Item the subject of the second sentences of Section 1.1 and 1.2, respectively, shall be satisfied by Olivetti's sale, transfer, conveyance, assignment or delivery of such Business Item or NonBusiness Item in accordance with such sentences. (b) After the Closing, Wang shall from time to time, at the request of Olivetti and without further cost or expense to Olivetti, execute and deliver such other instruments of sale, transfer, conveyance and assignment and take such other actions as Olivetti may reasonably request in order to more effectively consummate the transactions contemplated hereby. 3.6 SIMULTANEOUS DELIVERIES AND ACTIONS. All deliveries shall be made or other actions to be taken at the Closing shall be deemed to occur simultaneously, and no such delivery or action shall be deemed complete until all such deliveries and actions have been completed or the relevant parties had agreed to waive such delivery or action. If the Closing does not occur, any delivery made or other action taken at the Pre-Closing shall be deemed not to have occurred and be without force or effect. ARTICLE IV REPRESENTATIONS AND WARRANTIES OF OLIVETTI ------------------------------------------ Olivetti hereby represents and warrants to (and as provided in Sections 4.5(a), 4.16, 4.23(a) and 4.25 covenants with) Wang as follows: 4.1 ORGANIZATION, STANDING AND QUALIFICATION; DISCLOSURE SCHEDULE. (a) Each of the Sellers, Olsy, Olsy Japan, Olsy Brazil and the Controlled Subsidiaries: 17 26 (i) is a corporation duly organized or incorporated, validly existing and in good standing under the laws of its jurisdiction of incorporation; (ii) has full corporate power and authority to carry on its business as it is now being conducted and to own, lease and operate its properties and assets; and (iii) is duly qualified or licensed to do business as a foreign corporation in good standing in each jurisdiction in which the conduct of its business or the ownership, leasing or operation of its properties or assets or the nature of the business conducted by it makes such qualification necessary, except where the failure to be so qualified or licensed would not, in the aggregate, have or result in a Material Adverse Effect (as defined in Section 12.11). (b) Olivetti has previously delivered to Wang a true, complete and correct copy of a Disclosure Schedule, dated as of the date hereof (the "Olivetti Disclosure Schedule"), which sets forth on individual schedules corresponding to the sections of this Article IV or other Articles of this Agreement to which they relate, without any general cross reference to other schedules, the various disclosures required to be made pursuant to this Article IV or other Articles of this Agreement and which, with respect to any disclosure required to be made pursuant to this Article IV or other Articles of this Agreement based on amounts in U.S. dollars stated therein, is based on the conversion rates for U.S. dollars and the local currency in effect on December 31, 1997. Any paraphrasing of the text of this Article IV or other Articles of this Agreement in the Olivetti Disclosure Schedule is for reference purposes only and does not affect the disclosures required to be made pursuant to this Article IV or other Articles of this Agreement. (c) Schedule 4.1 of the Olivetti Disclosure Schedule sets forth a complete and correct list of all jurisdictions in which each of Olivetti (with respect to the Business), Olsy, Olsy Japan, Olsy Brazil and the Controlled Subsidiaries is qualified to do business as a foreign corporation. The copies of the certificates or articles of incorporation, memoranda or articles of association or by-laws (or other organizational documents) of each of Olivetti, Olsy, Olsy Japan, Olsy Brazil and the Controlled Subsidiaries heretofore 18 27 delivered to Wang by Olivetti are complete and correct copies of such instruments, as currently in effect. 4.2 CAPITALIZATION; MINORITY INTERESTS. (a) Schedule 4.2(a) of the Olivetti Disclosure Schedule sets forth (i) the jurisdiction of incorporation and capitalization of each of Olsy, Olsy Japan, Olsy Brazil and the Controlled Subsidiaries, (ii) the type (including currency denomination), number and percentage of the outstanding shares of capital stock of or other ownership interest in (aa) Olsy owned by Olivetti, (bb) Olsy Japan owned by Olivetti, (cc) Olsy Brazil owned by Olivetti Sistemas or Olivetti Brazil or (dd) each Controlled Subsidiary owned by Olsy or a Controlled Subsidiary and, in each case, the holder of record thereof, (iii) the holder of record of any outstanding shares of capital stock of or other ownership interest in (aa) Olsy Japan not owned by Olivetti or (bb) any Controlled Subsidiary not owned by Olsy or a Controlled Subsidiary and, in each case, the type (including currency denomination), number and percentage of the outstanding shares of capital stock or other ownership interest so held of record and (iv) the holder of record of any outstanding shares of capital stock of or other ownership interest in any Noncontrolled Subsidiary (as defined in Section 12.11) or any Olsy Japan Subsidiary held of record by Olsy, Olsy Japan or a Controlled Subsidiary and, in each case, the type (including currency denomination), number of the shares of capital stock or other ownership interest so held of record and, to the Best Knowledge of Olivetti (as defined in Section 12.11), the jurisdiction of incorporation of any such Noncontrolled Subsidiary or Olsy Japan Subsidiary and the holder of record of any outstanding shares of capital stock of or other ownership interest in any such Noncontrolled Subsidiary or Olsy Japan Subsidiary not held of record by Olsy, Olsy Japan or a Controlled Subsidiary. Except as set forth on Schedule 4.2(a) of the Olivetti Disclosure Schedule, neither Olivetti nor any Olivetti Affiliate owns, directly or indirectly, any capital stock of or other ownership interest in Olsy, Olsy Japan, Olsy Brazil, any Subsidiary or any Olsy Japan Subsidiary. (b) Except as set forth in Schedule 4.2(b) of the Olivetti Disclosure Schedule, there is (i) no outstanding right of subscription, option, warrant, call or other right (including any right of conversion or 19 28 exchange under any outstanding security or other instrument but excluding any rights of preemption required by laws of their respective jurisdictions of incorporation) to acquire any capital stock of or other ownership interest in Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary or (ii) no outstanding put right or other right to sell any capital stock of or other ownership interest in Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary to Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary. Except as set forth on Schedule 4.2(b) of the Olivetti Disclosure Schedule, there is no agreement, commitment, understanding or arrangement relating to the voting, issuance, sale, operation, delivery, transfer or redemption of any of the capital stock, asset or business of or ownership interest in Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary. Upon consummation of the transactions contemplated hereby, Wang will acquire good, valid and marketable title to all of the issued and outstanding shares of capital stock of or other ownership interest in (i) Olsy owned by Olivetti, (ii) Olsy Japan owned by Olivetti, (iii) Olsy Brazil owned by Olivetti Sistemas or Olivetti Brazil, (iv) each Controlled Subsidiary owned by Olsy or a Controlled Subsidiary, (v) each Noncontrolled Subsidiary owned directly by Olsy or a Controlled Subsidiary or (vi) each Olsy Japan Subsidiary owned directly by Olsy Japan, free and clear of any Lien (other than restrictions set forth on Schedule 4.2(b) of the Olivetti Disclosure Schedule). (c) Except as set forth on Schedule 4.2(c) of the Olivetti Disclosure Schedule, all of the outstanding shares of capital stock of or other ownership interest in each of Olsy, Olsy Japan, Olsy Brazil and the Controlled Subsidiaries are duly authorized, validly issued, fully paid, nonassessable and, except as required by the laws of their respective jurisdictions of incorporation, free of preemptive rights and all of the outstanding shares of capital stock of or other ownership interest in each of the Noncontrolled Subsidiaries held of record by Olsy or a Controlled Subsidiary and each of the Olsy Japan Subsidiaries held of record by Olsy Japan are fully paid and nonassessable. Except as set forth on Schedule 4.2(c) of the 20 29 Olivetti Disclosure Schedule, each of Olsy, Olsy Japan, Olsy Brazil and the Controlled Subsidiaries is capitalized in accordance with applicable law. Except as set forth on Schedule 4.2(c) of the Olivetti Disclosure Schedule, neither Olsy, Olsy Japan, Olsy Brazil nor any Controlled Subsidiary has any obligation to contribute additional capital to any Subsidiary, except as required by the laws of a Subsidiary's jurisdiction of incorporation. Except as set forth in Schedule 4.2(c) of the Olivetti Disclosure Schedule, neither Olsy, Olsy Japan, Olsy Brazil nor any Controlled Subsidiary has any obligation to make any payments to any other current or former stockholder of Olsy, Olsy Japan, Olsy Brazil, any Subsidiary or any Olsy Japan Subsidiary (other than payments made in the ordinary course of business for services rendered or products provided in the ordinary course of business at arm's length). (d) The minority partners and managers of Open Systems Olivetti Austria Gesellschaft mbH & Co. K.G. ("Open Systems") do not have rights relating to the interests currently or previously held by the same in, or other interests in, the capital of Open Systems or to their relationships with Open Systems, other than those set forth in the Partnership Agreement dated June 18, 1996 or in the Share Transfer Agreement (version September 30, 1996) as amended and supplemented by the Option Agreement, Call Option Agreement and Declaration of Waiver previously supplied by Olivetti to Wang or, as to compensation, so agreed with the same in the ordinary course of business. (e) In the Formation, the transactions set forth on Schedule 4.2(e) hereto were effected in the manner set forth thereon. 4.3 NO OTHER INTERESTS. Neither Olsy, Olsy Japan, Olsy Brazil nor any Controlled Subsidiary owns, directly or indirectly, any capital stock of or other ownership interest in any Person not listed in Schedule 4.2(a) of the Olivetti Disclosure Schedule. 4.4 AUTHORITY. (a) Each of the Sellers has full corporate power and authority to execute and deliver this Agreement and each of the Related Agreements to which it is a party and to consummate the transactions contemplated hereby and thereby. The execution and delivery by each of the Sellers of this Agreement and each of the Related Agreements to which it is a party and the consummation of the transactions contemplated hereby and thereby have been duly and validly authorized by all 21 30 necessary action on the part of each of the Sellers. Each of the Sellers has duly and validly executed and delivered this Agreement and, at or prior to the Closing, shall duly and validly execute and deliver each of the Related Agreements to which it is a party and, assuming the due authorization, execution and delivery thereof by Wang (where such authorization, execution and delivery thereof is called for), this Agreement constitutes and each of the Related Agreements to which it is a party, when executed and delivered, shall constitute a legal, valid and binding obligation of each of the Sellers, enforceable against each of the Sellers in accordance with its respective terms, except as such enforceability may be limited by bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other similar laws now or hereafter in effect relating to creditors' rights and by general equitable principles (regardless of whether enforceability is considered in a proceeding in equity or at law). (b) Each Olivetti Affiliate which is a party to a Related Agreement has full corporate power and authority to execute and deliver such Related Agreement to which it is a party and to consummate the transactions contemplated thereby. The execution and delivery by each Olivetti Affiliate which is a party to a Related Agreement of such Related Agreement and the consummation of the transactions contemplated thereby have been duly and validly authorized by all necessary action on the part of such Affiliate. Each Olivetti Affiliate which is a party to a Related Agreement, at or prior to the Closing, shall duly and validly execute and deliver each of the Related Agreements to which it is a party and, assuming the due authorization, execution and delivery thereof by Wang (where such authorization, execution and delivery thereof is called for), each of the Related Agreements to which an Olivetti Affiliate is a party, when executed and delivered, shall constitute a legal, valid and binding obligation of such Olivetti Affiliate a party thereto, enforceable against such Olivetti Affiliate in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other similar laws now or hereafter in effect relating to creditors' rights and by general equitable principles (regardless of whether enforceability is considered in a proceeding in equity or at law). 22 31 4.5 CONSENTS; NO VIOLATION. (a) Except as set forth on Schedule 4.5(a) of the Olivetti Disclosure Schedule, there is no requirement applicable to Olivetti, any Olivetti Affiliate, Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary to give any notice to, make any filing with, or obtain any consent or approval of, any Person or Governmental Authority (as defined in Section 12.11) (in its capacity as a customer of Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary) in connection with the execution and delivery of this Agreement or any of the Related Agreements or the consummation of the transactions contemplated hereby or thereby except any individual such notice, filing, consent or approval the failure of which to give, does not cause Olsy, Olsy Japan, Olsy Brazil and the Controlled Subsidiaries to lose aggregate (without duplication) revenue of U.S. $1,500,000 (or an equivalent amount in another currency) or more or incur aggregate (without duplication) cost or expense of U.S. $250,000 (or an equivalent amount in another currency) or more (including, without limitation, cost or expense incurred in giving, making or obtaining such notice, filing, consent or approval). Olivetti shall reimburse Wang for all costs and expenses (in excess of the first U.S. $2,000,000 thereof) associated with Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary giving any notice to, making any filing with, or obtaining any consent or approval of, any Person or Governmental Authority (in its capacity as a customer of Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary) required to be given, made or obtained in connection with the execution and delivery of this Agreement or any of the Related Agreements or the consummation of the transactions contemplated hereby or thereby which are not set forth on Schedule 4.5(a) of the Olivetti Disclosure Schedule. (b) Except as set forth in Schedule 4.5(b) of the Olivetti Disclosure Schedule, there is no (and in the case of the Drop-Down (as defined in Section 12.11), was no) requirement applicable to Olivetti, any Olivetti Affiliate, Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary to make any filing with or obtain any permit, authorization, consent or approval of, any Governmental Authority (in its capacity as such and not in its capacity as a customer of Olsy, Olsy Japan, Olsy Brazil, a Subsidiary or an Olsy Japan Subsidiary) in connection with the execution and delivery of this Agreement 23 32 or any of the Related Agreements, the consummation of the transactions contemplated hereby or thereby or the consummation of the Drop-Down. (c) Except as set forth in Schedule 4.5(c) of the Olivetti Disclosure Schedule, neither the execution and delivery by Olivetti of this Agreement or any of the Related Agreements to which it is a party nor the consummation of the transactions contemplated hereby or thereby will (and, in the case of clause (iii), the Drop-Down did not): (i) conflict with or result in a breach of any provision of the certificates or articles of incorporation, memoranda or articles of association or by-laws (or other organizational documents) of Olivetti, any Olivetti Affiliate, Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary; (ii) result in a breach of or default under (or give rise to any right of termination, cancellation or acceleration under) any note, bond, mortgage, indenture, license, agreement, lease or other similar instrument or obligation (other than any of the foregoing with respect to which the representations and warranties in this clause (ii) is given in Sections 4.12, 4.13, 4.14(a) or 4.15) to which Olivetti, any Olivetti Affiliate, Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary is a party or by which any of their respective properties or assets may be bound, except for any such individual breach or default; (or right of termination, cancellation or acceleration) (aa) as to which any requisite waiver or consent has been or, on or prior to the Closing, shall have been, obtained or (bb) which does not cause Olsy, Olsy Japan, Olsy Brazil and the Controlled Subsidiaries to lose aggregate (without duplication) revenue of U.S. $1,500,000 (or an equivalent amount in another currency) or more or incur aggregate (without duplication) cost or expense of U.S. $250,000 (or an equivalent amount in another currency) or more (including, without limitation, cost or expense incurred in curing such breach or default); or (iii) violate any order, judgment, writ, injunction, decree, statute, rule or regulation applicable to Olivetti, any Olivetti Affiliate, Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary or any of their respective assets or properties. 4.6 FINANCIAL STATEMENTS; ACCOUNTS AND ACCOUNTING CONTROLS. (a) Olivetti has previously delivered to Wang true, complete and correct copies of a 24 33 carve-out consolidated balance sheet of the Olivetti Solutions (Olsy) Business Unit described in the notes thereto (the "12/31/96 Business Unit") as of December 31, 1996 and carve-out consolidated statements of income and cash flows of the 12/31/96 Business Unit for the twelve month period then ended, all audited (other than the carve-out consolidated statement of cash flows) by Coopers & Lybrand s.a.s. ("Coopers & Lybrand"), independent certified public accountants, whose audit report thereon is included therein, and accompanied by footnotes (collectively, the "12/31/96 Italian GAAP Financial Statements"). The 12/31/96 Italian GAAP Financial Statements (i) give a true and fair view of the combined consolidated financial position of the 12/31/96 Business Unit as of December 31, 1996 and the combined consolidated results of operations of the 12/31/96 Business Unit for the twelve month period then ended and (ii) were prepared in accordance with Italian GAAP (as defined in Section 12.11) and OLGA (as defined in Section 12.11) applied on a consistent basis and presented with reference to a presentation generally accepted in the United States. (b) Olivetti has previously delivered to Wang true, complete and correct copies of a combined consolidated balance sheet of the Olivetti Solutions (Olsy) Business Unit described in the notes thereto (the "9/30/97 Business Unit") as of September 30, 1997 (the "9/30/97 Italian GAAP Balance Sheet") and combined consolidated statements of income and cash flows of the 9/30/97 Business Unit for the period then ended, all audited (other than the combined consolidated statement of cash flows) by Coopers & Lybrand, independent certified public accountants, whose audit report thereon is included therein, and accompanied by footnotes (collectively, "9/30/97 Italian GAAP Financial Statements"). The 9/30/97 Italian GAAP Financial Statements (i) give a true and fair view of the combined consolidated financial position of the 9/30/97 Business Unit as of September 30, 1997 and the combined consolidated results of operations and cash flows of the 9/30/97 Business Unit for the nine month period then ended and (ii) were prepared in accordance with Italian GAAP and OLGA applied on a consistent basis consistent with the 12/31/96 Italian GAAP Financial Statements and presented with reference to a presentation generally accepted in the United States, except that in preparing the 9/30/97 Italian GAAP Financial Statements, Olivetti referred to the rules issued by CONSOB allowing 25 34 companies listed in the Italian Stock Exchange to prepare interim financial statements without accounting for income taxes. (c) Olivetti has previously delivered to Wang true, complete and correct copies of combined consolidated balance sheets of the Olivetti Solutions (Olsy) Business Unit described in the notes thereto (the "U.S. GAAP Business Unit") as of December 31, 1996 and September 30, 1997 and combined consolidated statements of income and cash flows of the U.S. GAAP Business Unit for the twelve month and nine month periods then ended, respectively, all audited by Coopers & Lybrand, independent certified public accountants, whose audit report thereon is included therein, and accompanied by footnotes (collectively, the "U.S. GAAP Financial Statements"). The U.S. GAAP Financial Statements (i) present fairly in all material respects the combined consolidated financial position of the U.S. GAAP Business Unit as of December 31, 1996 and September 30, 1997 and the combined consolidated results of operations and cash flows of the U.S. GAAP Business Unit for the twelve month and nine month periods then ended, respectively, and (ii) were prepared in accordance with United States generally accepted accounting principles ("U.S. GAAP") applied on a consistent basis. (d) The books, records and accounts of Olivetti (with respect to the Business), Olsy, Olsy Japan, Olsy Brazil and the Controlled Subsidiaries accurately and fairly reflect in reasonable detail the transactions in which they have engaged and the dispositions of their assets, have been maintained in a manner adequate to permit the preparation of financial statements which give a true and fair view of the financial position, results of operations and cash flows of the Business, Olsy, Olsy Japan, Olsy Brazil and the Controlled Subsidiaries in accordance with Italian GAAP and OLGA and do permit the preparation of the U.S. GAAP Financial Statements. The operations of the Business, Olsy, Olsy Japan, Olsy Brazil and the Controlled Subsidiaries have continuously been subject to a system of internal accounting controls sufficient to provide reasonable assurances that: (i) transactions have been executed in accordance with management's authorization; and (ii) transactions have been recorded as necessary to permit preparation of financial statements in conformity with 26 35 Italian GAAP and OLGA and other applicable criteria and to maintain accountability for assets and do permit preparation of the U.S. GAAP Financial Statements. 4.7 NO UNDISCLOSED LIABILITIES. Except as set forth in Schedule 4.7 of the Olivetti Disclosure Schedule, neither Olsy, Olsy Japan, Olsy Brazil nor any Controlled Subsidiary has any liabilities (whether reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured or unsecured and whether or not of a nature required by Italian GAAP to be reflected in a consolidated balance sheet of Olsy, Olsy Japan, Olsy Brazil and the Controlled Subsidiaries or disclosed in the notes thereto), except (a) such liabilities which (i) are reflected in the 9/30/97 Italian GAAP Balance Sheet or (ii) were incurred after the date of the 9/30/97 Italian GAAP Balance Sheet in the ordinary course of business and consistent with past practice and (b) such liabilities not covered by clause (a) which in the aggregate do not exceed 15,000,000,000 Italian lira. 4.8 ABSENCE OF CERTAIN CHANGES. (a) Except as set forth in Schedule 4.8 of the Olivetti Disclosure Schedule, since September 30, 1997, and through and as of the date of this Agreement, (i) Olsy, Olsy Japan, Olsy Brazil and each Controlled Subsidiary have been operated in the ordinary course of business and consistent with past practice, (ii) neither Olsy, Olsy Japan, Olsy Brazil and the Controlled Subsidiaries, taken as a whole, nor Olsy or any of the Major Subsidiaries, taken separately, has suffered any material adverse change in their business, assets, properties, liabilities, results of operations or condition (financial or otherwise) and (iii) neither Olsy, Olsy Japan, Olsy Brazil nor any Controlled Subsidiary has (aa) taken any action which, if it were taken after the date hereof, would require the prior written consent of Wang pursuant to Sections 6.1(b)(i), (iii), (ix), (xiii), (xvi), (xvii), (xix), (xx), (xxii), (xxiii), (xxiv) or (xxv), (bb) written up the value of any assets, (cc) increased in any manner the compensation of any of its directors, officers or employees (including any such increase under any Plan (as defined in Section 4.20)), except increases required to comply with applicable law, any Plan or any applicable collective bargaining agreement, sales commission increases or regularly scheduled merit increases for other than general managers of 27 36 Olsy, Olsy Japan, Olsy Brazil or the Controlled Subsidiaries or their direct reports, (dd) hired any additional employees (other than in the ordinary course of business consistent with past practice) or (ee) reversed any fund for headcount reductions other than the reversal reflected on the 12/31/97 Projected Balance Sheet (as defined in Section 6.12). (b) The 12/31/97 Net Financial Position (as defined in Section 6.14(d)) shall not be less than negative 65,000,000,000 Italian lira (meaning there shall not be less than 65,000,000,000 Italian lira in cash) after giving effect to the actions required to be taken pursuant to Sections 1.3(a) or (b). Since December 31, 1997, neither Olsy, Olsy Japan, Olsy Brazil nor any Controlled Subsidiary has paid, distributed or otherwise transferred any cash to Olivetti or any Olivetti Affiliate except in exchange for goods or services pursuant to existing contractual relationships and in compliance with the same or, while retaining title thereto, in connection with the centralized treasury functions of Olivetti, in each case in the ordinary course of business consistent with past practice. 4.9 PROPERTIES AND ASSETS. The assets, properties, furniture, equipment, Contracts, Intellectual Property, rights, privileges, franchises, operations and business presently owned, leased or licensed by Olsy, Olsy Japan, Olsy Brazil or a Controlled Subsidiary include all assets, properties, Contracts, Intellectual Property, rights, privileges, franchises, operations and business used by Olsy, Olsy Japan, Olsy Brazil and each Controlled Subsidiary to conduct their respective businesses as going concerns as conducted on the date hereof. 4.10 TITLE TO PERSONAL PROPERTIES AND ASSETS. Each of Olsy, Olsy Japan, Olsy Brazil and the Controlled Subsidiaries has good, valid and marketable title to all of the personal (tangible or intangible) properties or assets which it purports to own, in each case, including, without limitation, all of the personal properties and assets reflected in the 9/30/97 Italian GAAP Balance Sheet and all of the personal properties and assets purchased by Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary since the date of the 9/30/97 Italian GAAP Balance Sheet, except such items of personal property or assets (a) sold since the date of the 9/30/97 28 37 Italian GAAP Balance Sheet in the ordinary course of business and consistent with past practice or (b) the failure to have good, valid and marketable title to which will not cause Olsy, Olsy Japan, Olsy Brazil and the Controlled Subsidiaries to lose aggregate revenue with respect to any individual item of personal property or asset or all such items of personal property or assets respectively, of U.S. $1,500,000 or U.S. $5,000,000 (or an equivalent amount in another currency) or more or incur aggregate cost or expense with respect to any individual item of personal property or asset or all such items of personal property or assets respectively, of U.S. $250,000 or U.S. $2,000,000 (or an equivalent amount in another currency) or more (including, without limitation, cost or expense incurred in acquiring good, valid and marketable title to any such item of personal property or asset). All such personal properties and assets (other than those excepted in the except clause of the immediately preceding sentence) are free and clear of all Liens except, with respect to all such properties and assets: (i) Liens shown on the 9/30/97 Italian GAAP Balance Sheet as securing specified liabilities or obligations with respect to which no default exists; (ii) Liens that will be released or discharged at or prior to Closing; (iii) statutory Liens for current Taxes (as defined in Section 4.18(g)) not yet due and payable or being contested in good faith by appropriate proceedings; (iv) statutory Liens arising in the ordinary course of business by operation of law (including mechanic's, workmen's or warehousemen's Liens); and (v) minor imperfections of title which do not impair the value of the personal property or asset to which they relate. 4.11 REAL ESTATE. (a) Schedule 4.11(a) of the Olivetti Disclosure Schedule contains the complete and correct address and legal description of all of the real property in which either Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary holds a fee interest (the "Real Estate") and a complete and correct list of all Liens affecting the Real Estate (collectively the "Permitted Exceptions"). Either Olsy, Olsy Japan, Olsy Brazil or a Controlled Subsidiary has as of the date hereof, and will have as of the Closing Date, good, valid and marketable title to the Real Estate, free and clear of all Liens other than the Permitted Exceptions. 29 38 (b) Except as set forth in Schedule 4.11(b) of the Olivetti Disclosure Schedule, no work has been performed on or materials supplied to the Real Estate within any applicable statutory period which could give rise to any individual valid mechanic's or materialmen's lien which would cause Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary to incur aggregate (without duplication) cost or expense of U.S. $250,000 (or an equivalent amount in another currency) or more. (c) There is no pending or, to the Best Knowledge of Olivetti, threatened condemnation or eminent domain proceeding or proceeding to change or redefine the zoning classification with respect to the Real Estate. (d) To the Best Knowledge of Olivetti, the Real Estate is legally subdivided and consists of separate tax lots so that it is assessed separate and apart from any other property, and is an independent facility which does not rely upon any other facility to fulfill any zoning or other legal requirement, for structural support or the furnishing of utilities to the Real Estate. (e) To the Best Knowledge of Olivetti, all utility systems serving the Real Estate, public or private, are, in all material respects, in good operating condition, all installation charges therefor have been fully paid and all service charges therefor have been or will be paid by the respective owner up to and including the Closing Date. (f) To the Best Knowledge of Olivetti and except as set forth in Schedule 4.11(f) of the Olivetti Disclosure Schedule, the Real Estate is not located in any special flood hazard area designated by any Governmental Authority having jurisdiction over the Real Estate. (g) To the Best Knowledge of Olivetti, the Real Estate complies with the requirements of all building, zoning, subdivision, health, safety, environmental, pollution control, waste products, sewage control and all other applicable statutes, laws, codes, ordinances, rules, orders, regulations and decrees (collectively the "Government Regulations"). 30 39 Olivetti has obtained all material consents, permits, licenses and approvals required by such Government Regulations (the "Approvals"), and none of Olivetti, Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary has received notice that such Approvals are not in full force and effect, or have not been properly and validly issued. If not solely in the name of Olsy, Olsy Japan, Olsy Brazil or a Controlled Subsidiary on or prior to the Closing or as soon thereafter as practicable unless such approval is required to be obtained earlier under this Agreement, such Approvals will be assigned to Wang by Olivetti. There is no action pending or, to the Best Knowledge of Olivetti, threatened, by any Governmental Authority claiming that the Real Estate violates such Government Regulations. To the Best Knowledge of Olivetti, the conduct of the operation of the Business by Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary in the Real Estate, including the right to ingress or egress from the premises, does not violate any Governmental Regulations, and does not depend upon the continuing consent of any Person. (h) There are no suits, petitions, notices or proceedings pending, given or, to the Best Knowledge of Olivetti, threatened by any Persons or Governmental Authority before any Governmental Authority or otherwise, which, if given, commenced or concluded, would have an adverse effect on the title of Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary to the Real Estate. (i) To the Best Knowledge of Olivetti, all of the buildings, fixtures and other improvements located on the Real Estate, including the mechanical and utility systems, are, in all material respects, in good operating condition and repair, free of material construction defects, and the operation thereof as presently conducted is not in material violation of any applicable building code, zoning ordinance or other law or regulation. (j) Schedule 4.11(j) of the Olivetti Disclosure Schedule contains a true, complete and correct list of the building amnesties ("condono edilizio") duly filed in compliance with the relevant Government Regulations. All the amounts due in connection thereof have been fully paid, no further obligations are pending 31 40 towards the relevant Governmental Authority and no claims have been filed or are expected to be filed by such Governmental Authority. (k) Except as set forth in Schedule 4.11(k) of the Olivetti Disclosure Schedule, none of Olivetti, Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary has assigned any interest in the Real Estate nor leased all or any portion of the Real Estate or granted any license, concession or option or entered into any management or other service contract with respect to any portion of the Real Estate to any Person other than Olsy or a Controlled Subsidiary. 4.12 REAL ESTATE LEASES. (a) Schedule 4.12(a) of the Olivetti Disclosure Schedule sets forth (i) the addresses and the name of the record owner of all real property in which Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary holds a leasehold interest or rental contract interest (the "Leased Premises") and (ii) a complete and correct list of each of the leases or rental contracts for each of the Leased Premises, including all amendments, modifications and supplements thereto (whether embodied in a formal amendment, a letter or other written document) (the "Real Estate Leases"). Complete and correct copies of the Real Estate Leases, including all such amendments, modifications and supplements, have previously been delivered to Wang by Olivetti. (b) Except as set forth on Schedule 4.12(b) of the Olivetti Disclosure Schedule, each of the Leased Premises is occupied only by Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary pursuant to a Real Estate Lease between Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary and the record owner of the Leased Premises (other than Olivetti or an Olivetti Affiliate). Each Real Estate Lease between Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary on the one hand, and Olivetti or an Olivetti Affiliate, on the other hand, for leased premises occupied by Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary has a remaining term of not more than three years. (c) To the Best Knowledge of Olivetti, each of the Real Estate Leases is valid, is in full force and effect and is binding and enforceable against each of 32 41 the parties thereto in accordance with its terms. None of the Real Estate Leases has been modified or amended, in any material respect, since the date of delivery of copies thereof to Wang by Olivetti. There has not occurred any event which would constitute a material breach of or default in the performance of any covenant, agreement or condition contained in any Real Estate Lease, nor, to the Best Knowledge of Olivetti, has there occurred any event which with the passage of time or the giving of notice or both would constitute such a breach or default. To the Best Knowledge of Olivetti, none of Olivetti, Olsy, Olsy Japan, Olsy Brazil, any Subsidiary or an Olsy Japan Subsidiary has given or received any notice or claim of such breach or default, other than under a Real Estate Lease under which the gross annual rent is less than U.S. $60,000 (or an equivalent amount in another currency). (d) To the Best Knowledge of Olivetti, none of Olivetti, Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary is obligated to pay any leasing or brokerage commission relating to any Real Estate Lease, and Wang will not have any enforceable obligation to pay any leasing or brokerage commission upon the renewal of any Real Estate Lease. (e) No material construction, alteration or other leasehold improvement work with respect to any of the Real Estate Leases remains to be paid for or to be performed by Olivetti, Olsy, Olsy Japan, Olsy Brazil, any Subsidiary or any Olsy Japan Subsidiary, other than any such payment or work having a cost of less than U.S. $250,000 (or an equivalent amount in another currency). (f) To the Best Knowledge of Olivetti, Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary has obtained all permits, licenses and approvals required for the use and operation of the business of Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiaries in each of the Leased Premises, and the conduct of the Business by Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary in the Leased Premises, including the right to ingress or egress from the Leased Premises, does not violate any Government Regulations and does not depend on the continuing consent of any Person. At the Closing, no notices, permits, licenses, approvals, Taxes 33 42 or fees, including, without limitation, transfer Taxes and recording fees, are required to be filed, secured or paid with respect to the Real Estate Leases in connection with the transactions contemplated by this Agreement or any of the Real Estate Agreements (as defined in Section 12.11). (g) To the Best Knowledge of Olivetti, all of the buildings, fixtures and other improvements located on or comprising a part of each of the Leased Premises (including, without limitation, the heat, ventilation, air-conditioning and sprinkler systems) are, in all material respects, in good operating condition and repair, and the operation thereof and the business thereon as presently conducted is not in violation of any applicable building code, zoning ordinance or other law or regulation; provided, however, that the above representation as to buildings (as opposed to Leased Premises) shall apply only with respect to buildings leased by Olsy in La Defense, France and Lorenteggio, Italy, and buildings in which Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary is the sole occupant. (h) None of Olivetti, Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary has received any notice that a lessor or sublessor under any of the Real Estate Leases has commenced any litigation with respect to any Real Estate Lease nor have Olivetti, Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary received notice that any such lessor or sublessor intends to cancel, terminate or refuse to renew any Real Estate Lease under which the gross annual rent is greater than U.S. $60,000 (or an equivalent amount in another currency), and to the Best Knowledge of Olivetti, no such notices have been received for any of the other Real Estate Leases. (i) Except as set forth in Schedule 4.12(i) of the Olivetti Disclosure Schedule, none of Olivetti, Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary has assigned any interest under any Real Estate Lease or subleased all or any portion of such Leased Premises or granted any license or concession or entered into any management or other service contract with respect to any portion of such Leased Premises. Where Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary has assigned any interest under any Real 34 43 Estate Lease or subleased all or any portion of such Leased Premises or granted any license or concession or entered into any management or other service contract with respect to any portion of such Leased Premises as set forth on Schedule 4.12(i) of the Olivetti Disclosure Schedule, there has not, to the Best Knowledge of Olivetti, occurred any event which would constitute a material breach of or default in the performance of any covenant, agreement or condition contained in any such assignment, sublease, license, concession or contract, nor has there occurred, to the Best Knowledge of Olivetti, any event which with the passage of time or the giving of notice or both would constitute such a breach or default. None of Olivetti, Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary has given or received any notice or claim of such breach or default. (j) To the Best Knowledge of Olivetti, except as set forth in Schedule 4.12(j) of the Olivetti Disclosure Schedule, the Drop-Down did not, and neither the execution and delivery by Olivetti of this Agreement or any of the Related Agreements to which it is a party nor the consummation of the transactions contemplated hereby or thereby will, result in any breach, violation or default of any material provision of any Real Estate Lease, or require the consent of any lessor under, any such Real Estate Lease. (k) Schedule 4.12(k) of the Olivetti Disclosure Schedule contains a true, complete and correct list of the building amnesties ("condono edilizio") duly filed in compliance with the relevant Government Regulations. All the amounts due in connection thereof have been fully paid, no further obligations are pending towards the relevant Governmental Authority and no claims have been filed or are expected to be filed by such Governmental Authority. 4.13 PERSONAL PROPERTY LEASES. Schedule 4.13 of the Olivetti Disclosure Schedule lists all personal property leases pursuant to which Olsy, Olsy Japan, Olsy Brazil and the Controlled Subsidiaries paid an aggregate U.S. $350,000 (or an equivalent amount in another currency) or more in the fiscal year ended December 31, 1997. Except as set forth in Schedule 4.13 of the Olivetti Disclosure Schedule, (a) all such leases are in full force and effect and valid, binding and enforceable 35 44 in accordance with their respective terms, (b) none of Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary party thereto nor, to the Best Knowledge of Olivetti, any other party thereto, is in breach, violation or default under any such lease (other than breaches, violations or defaults which would not reasonably be expected to result in termination of any such lease or the acceleration of the payment of any amounts under any such lease) and (c) neither the execution and delivery by Olivetti of this Agreement or any of the Related Agreements to which it is a party nor the consummation of the transactions contemplated hereby or thereby will, result in any breach, violation or default of any term (other than a nonmaterial term) of, or require the consent of any lessor under, any such lease. 4.14 CONTRACTS. (a) (i) Each Customer Contract (as defined in this Section 4.14(a)) is in the name of or was (or pursuant to Section 1.1 will be) duly and validly assigned to Olsy, Olsy Japan, Olsy Brazil or a Controlled Subsidiary. (ii) Each Major Customer Contract (as defined in this Section 4.14(a)) is in full force and effect and is valid, binding and enforceable by and against all of the parties thereto in accordance with its terms. (iii) None of Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary party to a Major Customer Contract nor, to the Best Knowledge of Olivetti, any other Person or Governmental Authority party to a Major Customer Contract, is in breach (other than a de minimis breach), violation or default under any such Major Customer Contract. (iv) Neither the execution and delivery by the Sellers of this Agreement or any of the Related Agreements to which any Seller is a party nor the consummation of the transactions contemplated hereby or thereby will, result in any breach, violation or default under, or require the consent of any Person or Governmental Authority under, any Major Customer Contract. (v) To the Best Knowledge of Olivetti, Schedule 4.14(a)(v) of the Olivetti Disclosure Schedule sets forth, by Major Customer (as defined in this Section 4.14(a)), each written complaint from a Major Customer received by Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary since January 1, 1997. (vi) The term "Customer Contract" means any written agreement, contract, understanding or legally binding arrangement of any nature pursuant to which Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary has agreed to provide, or is providing, any products, service 36 45 or support. The term "Major Customer Contract" means (aa) any Customer Contract pursuant to, or with respect to which, Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary, individually or in the aggregate, earned or received U.S. $1,000,000 (or an equivalent amount in another currency) or more during the fiscal year ended December 31, 1997 or (bb) any Customer Contract with a Major Customer pursuant to, or with respect to which, Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary, individually or in the aggregate, earned or received U.S. $650,000 (or an equivalent amount in another currency) or more during the fiscal year ended December 31, 1997. The term "Major Customer" means the customers set forth on Schedule 4.14(a) hereto. (b) Except as set forth in Schedule 4.14(b) of the Olivetti Disclosure Schedule, none of Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary is a party to, nor is Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary or any of their respective properties or assets bound by, any of the following: (i) any Contract relating to the employment of, or the performance of services by, any director, officer or employee for an amount in annual base compensation and bonus in excess of U.S. $150,000 (or an equivalent amount in another currency); (ii) any Contract with any agent, contractor, subcontractor, consultant, advisor, salesperson, sales representative, distributor or dealer (other than any of the foregoing in their capacity as a supplier of products) pursuant to which Olsy, Olsy Japan, Olsy Brazil and the Controlled Subsidiaries paid or are expected to pay an aggregate of U.S. $1,500,000 (or an equivalent amount in another currency) or more in any year which is not terminable on not more than 60 days notice (without penalty or premium); (iii) any Contract pursuant to which Olsy, Olsy Japan, Olsy Brazil and the Controlled Subsidiaries is in possession of inventory or other assets (including, without limitation, service and repair parts) with an aggregate value of U.S. 37 46 $2,000,000 (or an equivalent amount in another currency) or more by way of consignment; (iv) any Contract that contains any severance or termination pay liabilities or obligations of U.S. $600,000 (or an equivalent amount in another currency) or more; (v) any Contract imposing any restriction on the right or ability of Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary (aa) to compete with any other Person, (bb) to acquire any product or other assets or any services from any other Person, to sell any product or other asset or to perform any services for any other Person or to transact business or deal in any other manner with any other Person or (cc) to develop or distribute any technology or Intellectual Property, except any such restriction which will not cause Olsy, Olsy Japan, Olsy Brazil and the Controlled Subsidiaries to lose aggregate revenue of U.S. $1,500,000 (or an equivalent amount in another currency) or more or incur aggregate cost or expense of U.S. $250,000 (or an equivalent amount in another currency) or more (including, without limitation, cost or expense to relieve such restriction); (vi) any Contract creating or involving (aa) any agency or franchise relationship pursuant to which Olsy, Olsy Japan, Olsy Brazil and the Controlled Subsidiaries earned or received or is expected to earn or receive an aggregate of U.S. $5,000,000 (or an equivalent amount in another currency) or more in any year or (bb) any power of attorney in favor of any Person not a full time employee of Olsy, Olsy Japan, Olsy Brazil or a Controlled Subsidiary; (vii) any Contract relating to the acquisition, disposition, issuance or transfer (other than in the ordinary course of business consistent with past practice) of any securities, assets, properties, rights, privileges, franchises, operation or business (real, personal or mixed, tangible or intangible) with respect to which there remains any obligation to make any future payments of any kind of U.S. $2,000,000 (or an equivalent 38 47 amount in another currency) or more, including, without limitation, payments with respect to indemnification given thereunder; (viii) any Contract relating to the creation of any Lien of U.S. $5,000,000 (or an equivalent amount in another currency) or more on any asset or property of Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary; (ix) any Contract involving or incorporating any guaranty, any pledge, any performance or completion bond, any indemnity or any surety arrangements of U.S. $1,000,000 (or an equivalent amount in another currency) or more; (x) any Contract creating or relating to any partnership, joint venture or strategic alliance or any sharing of revenues, profits, losses, costs or liabilities pursuant to which Olsy, Olsy Japan, Olsy Brazil and the Controlled Subsidiaries (aa) earned or received or is expected to earn or receive an aggregate of U.S. $1,500,000 (or an equivalent amount in another currency) or more, or (bb) incurred or paid or is expected to incur or pay an aggregate of U.S. $250,000 (or an equivalent amount in another currency) or more; (xi) any Contract relating to the purchase or sale of any product or other asset by or to, or the performance of any services or support by or for, (aa) Olivetti or any Olivetti Affiliate pursuant to which Olsy, Olsy Japan, Olsy Brazil and the Controlled Subsidiaries (x) earned or received or is expected to earn or receive an aggregate of U.S. $1,000,000 (or an equivalent amount in another currency) or more in any year, or (y) incurred or paid or is expected to incur or pay an aggregate of U.S. $1,000,000 (or an equivalent amount in another currency) or more in any year, or (bb) any officer or director of Olivetti or any such Affiliate or any Associate (as defined in Section 12.11) of any such director or officer; (xii) any Contract relating to the return of inventory or other assets with a value of U.S. $2,000,000 (or an equivalent amount in another 39 48 currency) or more in the possession of wholesalers, distributors, retailers or other customers; (xiii) any Contract relating to software development pursuant to which Olsy, Olsy Japan, Olsy Brazil and the Controlled Subsidiaries (aa) earned or received or is expected to earn or receive an aggregate of U.S. $1,500,000 (or an equivalent amount in another currency) or more in any year, or (bb) incurred or paid or is expected to incur or pay an aggregate of U.S. $1,500,000 (or an equivalent amount in another currency) or more in any year; (xiv) any Contract for borrowed money in amount of U.S. $5,000,000 (or an equivalent amount in another currency) or more; (xv) any Contract not otherwise disclosed on Schedule 4.14(b) of the Olivetti Disclosure Schedule pursuant to which Olsy, Olsy Japan, Olsy Brazil and the Controlled Subsidiaries (aa) earned or received an aggregate of U.S. $5,000,000 (or an equivalent amount in another currency) or more in any year, or (bb) incurred or paid an aggregate of U.S. $5,000,000 (or an equivalent amount in another currency) or more in any year; and (xvi) any Contract with any Person or Governmental Authority in any of the countries set forth in Schedule 4.14(b)(xvi) hereto. (c) Schedule 4.14(c) of the Olivetti Disclosure Schedule sets forth the standard warranties given by Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary in connection with providing products, services or support. (d) Except as set forth on Schedule 4.14(d) of the Olivetti Disclosure Schedule, none of the Business, Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary has given any uncapped warranty or representation specifically with respect to the Year 2000 or eurocompliance. (e) Except as set forth in Schedule 4.14(e) of the Olivetti Disclosure Schedule, to the Best Knowledge of Olivetti, no direct or indirect shareholder 40 49 in, nor member of the Board of Directors (or other governing body) of, any Person, that has a direct or indirect interest in any partnership, joint venture, alliance or other venture set forth in Section 4.14(b) of the Olivetti Disclosure Schedule with respect to Section 4.14(b)(x) is an Official (as defined in Section 12.11) of any Governmental Authority in which such venture conducts operations related to any such Official or candidate. (f) Olivetti has, to the Best Knowledge of Olivetti, previously delivered to Wang true, complete and correct copies of all notices of breach, default or termination received by Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary with respect to any Customer Contracts (i) pursuant to which, or with respect to which, Olsy, Olsy Japan, Olsy Brazil and the Controlled Subsidiaries earned or received an aggregate of U.S. $1,000,000 (or an equivalent amount in another currency) or more during the fiscal year ended December 31, 1997 and (ii) which provides for the payment of consequential damages or lost profits. (g) The Lexikon Agreement and Oliricerca Share Transfer and Shareholder Agreement will be in full force and effect in the forms attached hereto, and will not have been altered, modified, amended or terminated, and no provision thereof waived or breached by any party thereto, prior to the Closing Date. 4.15 INTELLECTUAL PROPERTY. (a) CERTAIN DEFINITIONS. As used herein: (i) "Copyrights" shall mean all copyrights (except moral rights), rights in mask works and database rights, and all registrations and applications for registration of any of the foregoing; (ii) "Intellectual Property" shall mean Copyrights, Patents, Know-How, Software and Trademarks, and all rights (except moral rights) vesting in the owner thereof pursuant to the applicable laws of any competent jurisdiction; 41 50 (iii) "Intellectual Property Agreements" shall mean the Olsy IP Agreements (as defined in Section 4.15(c)(i)) and the Olsy Licensing Agreements (as defined in Section 4.15(c)(iii)); (iv) "Know How" shall mean methods, devices, technology, trade secrets, industrial designs, know-how, technical manuals and documentation and other proprietary information, including, without limitation, proprietary processes and formulae; (v) "Olsy Intellectual Property" shall mean such Intellectual Property as is required by Sections 4.15(b)(i) and 4.15(b)(ii) to be listed in Schedules 4.15(b)(i) and 4.15(b)(ii) of the Olivetti Disclosure Schedule; (vi) "Patents" shall mean patents and patent applications, all continuations, continuations-in-part, divisions, reissues, reexaminations, extensions and foreign counterparts of such patents and patent applications, and all invention disclosures; (vii) "Software" shall mean all (aa) computer software, including, without limitation, all source code, object code, interpreted code, Java byte code, firmware, middleware, programs, utilities, languages, subroutines or routines, (bb) databases and compilations, including any and all data and collections of data, whether machine readable or otherwise, (cc) all content contained on any Internet or intranet site(s) and (dd) descriptions, flowcharts and other work product used to design, plan, organize and develop any of the foregoing; and (viii) "Trademark" shall mean (aa) registered trademarks and registered service marks, applications for registration for trademarks and service marks, renewal registrations and applications for renewal registrations, extensions and foreign counterparts of such registrations and applications for registration; (bb) material unregistered trademarks and service marks; (cc) corporate names, business names and trade names, whether 42 51 registered or unregistered; and (dd) Internet domain names and associated addresses and URLs. (b) OWNED INTELLECTUAL PROPERTY. (i) Schedule 4.15(b)(i) of the Olivetti Disclosure Schedule sets forth a correct and complete list of all (aa) Patents, (bb) Trademarks and (cc) registered Copyrights and material unregistered Copyrights (inclusive of but not limited to material Software), that are owned as of the date hereof by Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary. Such list includes the name of the owner of each item of Intellectual Property and the state or country where such item is owned, and shall also indicate whether such item qualifies as a NonBusiness Item as defined in and for the purposes of Section 1.2. (ii) Schedule 4.15(b)(ii) of the Olivetti Disclosure Schedule sets forth a correct and complete list of all (aa) Patents, (bb) Trademarks (other than the Olivetti Trademarks as defined in Section 6.26(a)(i)) and (cc) registered Copyrights and material unregistered Copyrights (inclusive of but not limited to material Software), that are owned as of the date hereof by Olivetti or any Olivetti Affiliate, provided that such item qualifies as a Business Item as defined in and for the purposes of Section 1.1. Such list includes the name of the owner of each such item of Intellectual Property and the state or country where such item is owned. (iii) Schedule 4.15(b)(iii) of the Olivetti Disclosure Schedule sets forth a correct and complete list of all (aa) Patents, (bb) Trademarks and (cc) registered Copyrights and material unregistered Copyrights (inclusive of, but not limited to, material Software), that are owned as of the date hereof by Olivetti or any Olivetti Affiliate, provided that such item qualifies as a NonBusiness Item as defined in and for purposes of Section 1.2 and such item was used by Olsy, Olsy Japan, Olsy Brazil or a Subsidiary in their respective commercial activities during the two-year period ending on the date of the Closing (collectively, with all 43 52 other Patents, Trademarks (other than the Olivetti Trademarks) and Copyrights (including Software) used in the Business which qualify as NonBusiness Items, the "Licensed Olivetti Intellectual Property"). Such list includes the name of the owner of each such item of Intellectual Property and the state or country where such item is owned. (iv) Except as set forth in Schedule 4.15(b)(iv) of the Olivetti Disclosure Schedule: (aa) either Olsy, Olsy Japan, Olsy Brazil or a Controlled Subsidiary is, or will be upon Closing, the sole and exclusive owner of the Olsy Intellectual Property, free and clear of any Lien; (bb) either Olsy, Olsy Japan, Olsy Brazil or a Controlled Subsidiary has, or will have upon Closing, such rights to use, protect, prosecute, sell, transfer, license, dispose of or bring actions for the infringement of its rights in and to, and to exclude others from using the Olsy Intellectual Property as are established by the applicable laws of each relevant jurisdiction to the sole and exclusive owner of an item of Intellectual Property of such kind; (cc) the Olsy Intellectual Property which is registered or the subject of an application for registration (collectively, the "Olsy Registered Intellectual Property") has been duly maintained in all material respects in accordance with the legal and administrative requirements of the appropriate jurisdictions, and has not lapsed, expired, been cancelled or been abandoned; (dd) no registration or application for registration of any material item of Olsy Registered Intellectual Property is the subject of any pending opposition, interference, cancellation or other legal or governmental proceeding filed before any Governmental Authority in any competent jurisdiction before September 30, 1997, nor to the Best Knowledge of Olivetti, has any of the foregoing been filed after such date; (ee) there is no pending or threatened claim by any former or present employees, officers, directors or independent contractors of Olsy, Olsy Japan, Olsy Brazil or a Controlled Subsidiary asserted with respect to any Olsy Intellectual Property (including, but not limited to such Olsy Intellectual Property which has been or will be acquired by Olsy, Olsy Japan, Olsy Brazil or a Subsidiary from Olivetti or any Olivetti Affiliate); 44 53 (ff) to the Best Knowledge of Olivetti neither Olsy, Olsy Japan, Olsy Brazil, Olivetti nor any Controlled Subsidiary or Affiliate of Olivetti has provided, licensed, sublicensed or disclosed a material portion of any source code for any of the Software listed in Schedules 4.15(b)(i)-(iii) of the Olivetti Disclosure Schedule to any third party, except pursuant to a signed agreement requiring the licensee, for an indefinite period, to maintain the confidentiality of such source code and not to use the source code other than for purposes approved by Olsy or the applicable Affiliate; and (gg) all Trademarks included in the Olsy Intellectual Property are or will be at the Closing assigned (but not necessarily recorded) to Olsy. For purposes of this Section 4.15 the terms "registered" and "registration" shall include issued patents. (c) INTELLECTUAL PROPERTY AGREEMENTS. (i) Schedule 4.15(c)(i) of the Olivetti Disclosure Schedule sets forth a correct and complete list of (aa) all material Contracts to which Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary is a Party and pursuant to which Olsy, Olsy Japan, Olsy Brazil or the relevant Controlled Subsidiary has obtained from any Person the right to use, copy, disclose, distribute, transmit, modify, maintain, create derivative works of or otherwise exploit any Intellectual Property or which relate to the development for, acquisition by, sale or transfer to Olsy, Olsy Japan, Olsy Brazil or a Controlled Subsidiary, of any Intellectual Property, and (bb) all material Contracts of such a kind to which Olivetti or any Olivetti Affiliate is a Party which qualify as Business Items as defined in Section 1.1. Schedule 4.15(c)(i) of the Olivetti Disclosure Schedule identifies the parties to such Contracts and the nature and subject matter thereof. The Contracts listed in Schedule 4.15(c)(i) of the Olivetti Disclosure Schedule are collectively referred to as "Olsy IP Agreements". (ii) Except as set forth in Schedule 4.15(c)(ii) of the Olivetti Disclosure Schedule: (aa) each Olsy IP Agreement is, or will be at Closing, valid, binding and enforceable in accordance 45 54 with its terms; (bb) to the Best Knowledge of Olivetti none of Olsy, Olsy Japan, Olsy Brazil or a Controlled Subsidiary (or, as the case may be, Olivetti or any Affiliate of Olivetti), or any other Person or Governmental Authority party to an Olsy IP Agreement is in material breach, material violation or default under any Olsy IP Agreement; (cc) neither the execution and delivery of this Agreement or any of the Related Agreements, nor the transfer by Olivetti or any Affiliate of Olivetti of any Olsy IP Agreement pursuant to Section 1.1, nor the consummation of the transactions contemplated hereby or thereby, will result in any material breach, material violation, default under or termination of any Olsy IP Agreement and (dd) the transfer by Olivetti or any Affiliate of Olivetti of any Olsy IP Agreement pursuant to Section 1.1 will not require the consent of any Person or Governmental Authority. (iii) Schedule 4.15(c)(iii) of the Olivetti Disclosure Schedule sets forth a correct and complete list of (aa) all material Contracts (other than Customer Contracts) to which Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary is a party pursuant to which Olsy, Olsy Japan, Olsy Brazil or the relevant Controlled Subsidiary has licensed, sublicensed, assigned (in part) or otherwise granted to any Person the right to use, copy, disclose, distribute, transmit, modify, maintain, create derivative works of or otherwise exploit any Intellectual Property, or which relate to the development of any Intellectual Property for any Person by Olsy, Olsy Japan, Olsy Brazil or a Controlled Subsidiary or which relate to the sale, transfer or other disposition of any Olsy Intellectual Property to any Person by Olsy, Olsy Japan, Olsy Brazil or a Controlled Subsidiary, (bb) all material Contracts to which Olivetti or any Olivetti Affiliate is a Party which qualify as Business Items as defined in and for the purposes of Section 1.1 and which relate in any way to the Olsy Intellectual Property, and (cc) all Customer Contracts that grant licenses, sublicenses or other rights in or to, or which sell, transfer, assign or otherwise dispose of, any Olsy Intellectual Property, other than solely by granting to end user customers non-exclusive licenses to use or reproduce object code versions of software for 46 55 their internal business purposes. Schedule 4.15(c)(iii) of the Olivetti Disclosure Schedule identifies the parties to such agreements and the nature and subject matter thereof. The Contracts listed in Schedule 4.15(c)(iii) of the Olivetti Disclosure Schedule are collectively referred to as "Olsy Licensing Agreements". (iv) Except as set forth in Schedule 4.15(c)(iv) of the Olivetti Disclosure Schedule: (aa) each Olsy Licensing Agreement is or will be at Closing valid, binding and enforceable in accordance with its terms; (bb) none of Olsy, Olsy Japan, Olsy Brazil or a Controlled Subsidiary (or, as the case may be, Olivetti or any Affiliate of Olivetti), or any other Person or Governmental Authority party to an Olsy Licensing Agreement is in material breach, material violation or default under any Olsy Licensing Agreement; (cc) neither the execution and delivery of this Agreement or any of the Related Agreements, nor the transfer by Olivetti or any Affiliate of Olivetti of any Olsy Licensing Agreement pursuant to Section 1.1, nor the consummation of the transactions contemplated hereby or thereby, will result in any material breach, material violation or default under any such Olsy Licensing Agreement; and (dd) the transfer by Olivetti or any Affiliate of Olivetti of any Olsy IP Agreement pursuant to Section 1.1 will not require the consent of any Person or Governmental Authority. (v) Except as set forth in Schedule 4.15(c)(v) of the Olivetti Disclosure Schedule, there are no milestone or other payments of more than U.S. $200,000 except payments which are royalties and license fees due and payable in the ordinary course of business by Olsy, Olsy Japan, Olsy Brazil or any of the Controlled Subsidiaries to any Person by reason of the ownership, use, reproduction or distribution of any Olsy Intellectual Property. (d) INFRINGEMENT. Except as set forth in Schedule 4.15(d) of the Olivetti Disclosure Schedule: (i) neither the manufacture, marketing, use or sale of any product, the rendering of any service under, or the licensing or sublicensing of, 48 56 any Intellectual Property by Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary in the manner such product is manufactured, marketed, used or sold, such service is rendered, or such Intellectual Property is licensed or sublicensed by Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary as of the date hereof, nor the conduct by Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary of the Business as heretofore conducted by each of them do or will: (aa) materially violate any Contract with any Person or Governmental Authority; or (bb) to the Best Knowledge of Olivetti, infringe upon, violate, misappropriate, misuse or otherwise conflict with any Patents or Trademarks of any Person or Governmental Authority; or (cc) infringe upon, violate, misappropriate, misuse or otherwise conflict with any Intellectual Property other than Patents and Trademarks of any Person or Governmental Authority; (ii) there is no pending material claim or litigation, or to the Best Knowledge of Olivetti, any threatened claim or litigation or grounds therefor, by any Person or Governmental Authority (aa) alleging the infringement, violation, misappropriation, misuse or conflict with the Intellectual Property of any Person or Governmental Authority, or (bb) challenging or questioning the ownership, validity or enforceability of any Olsy Intellectual Property; (iii) there is no pending litigation brought by Olivetti or any Affiliate of Olivetti (including Olsy, Olsy Japan, Olsy Brazil and the Controlled Subsidiaries) against any Person or Governmental Authority claiming the infringement, violation, misappropriation or misuse by any such Person or Governmental Authority of Olsy Intellectual Property; and (iv) to the Best Knowledge of Olivetti, there are no grounds for any claim or litigation which could be brought by Olivetti or any Affiliate of Olivetti (including Olsy, Olsy Japan, Olsy Brazil and the Controlled Subsidiaries) against any Person or Governmental Authority based on the material infringement, violation, misappropriation or misuse 48 57 of any Olsy Intellectual Property. (e) MISCELLANEOUS. (i) YEAR 2000. Olivetti represents and warrants that Olivetti and its Affiliates (including Olsy, Olsy Japan, Olsy Brazil and its Controlled Subsidiaries) have not received any written claims, demands or complaints alleging a breach of any Contract on the grounds that the Software listed in Schedules 4.15(b)(i)-(iii) of the Olivetti Disclosure Schedule has not or will not operate prior to, during, and after the calendar year 2000 AD, without error relating to date data, specifically including but not limited to any error relating to calculations, sorting, interpretation, processing or acceptance date data which represents or references different centuries or more than one century or any specific date. (ii) VIRUSES. To the best knowledge of the Managing Director of Olivetti, any of the finance, treasury, legal, administration, human resources, industrial relations, real estate, intellectual property, tax or corporate development staff function directors of Olivetti or Marco De Benedetti (acquired (x) in the performance of their respective duties in the ordinary course of business or (y) in the course of consulting with the general manager and controller of Olsy with respect to the subject matter of these representations or warranties, which consulting Olivetti hereby represents and warrants to Wang was conducted), the Software listed in Schedules 4.15(b)(i)-(iii) of the Olivetti Disclosure Schedule will not at the time of the Closing contain any codes, commands or instructions, including material viruses, time bombs, worms, and Trojan horses (collectively, "Viruses"), that may, or may be used to, access, alter, delete, damage or disable such Software or any other software, data, information or machines. Schedule 4.15(e)(ii) of the Olivetti Disclosure Schedule contains a description of the procedures adopted by Olsy to protect the Software developed or distributed by Olsy, Olsy Japan, Olsy Brazil and the Controlled Subsidiaries from Viruses. To the best knowledge of the Managing Director of Olivetti, any of the finance, treasury, 49 58 legal, administration, human resources, industrial relations, real estate, intellectual property, tax or corporate development staff function directors of Olivetti or Marco De Benedetti (acquired (x) in the performance of their respective duties in the ordinary course of business or (y) in the course of consulting with the general manager and controller of Olsy with respect to the subject matter of these representations or warranties, which consulting Olivetti hereby represents and warrants to Wang was conducted), there have been no material failures to follow the procedures described in Schedule 4.15(e)(ii) of the Olivetti Disclosure Schedule. 4.16 BANK ACCOUNTS. As of the Closing, no funds or other assets of Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary will be in any account of any nature of any bank, trust company, savings or loan association or other financial institution maintained by Olivetti or any Olivetti Affiliate. Olivetti shall cause each of Olsy, Olsy Japan, Olsy Brazil and the Controlled Subsidiaries to deliver to Wang, not later than five Business Days prior to the Closing, a schedule setting forth the names and addresses of all banks, trust companies, savings and loan associations and other financial institutions and post offices at which Olsy, Olsy Japan, Olsy Brazil or any of the Controlled Subsidiaries maintains any account (including, without limitation, any safe deposit account), the account numbers thereof and the names of all persons authorized to draw thereon, make withdrawals therefrom or have access thereto. 4.17 INSURANCE. Schedule 4.17 of the Olivetti Disclosure Schedule (a) lists all policies of fire, liability (including products liability), property, workers' compensation, officers' and directors' liability and other forms of insurance covering any of the assets or properties of, or relating to, Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary owned or held by Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary and (b) identifies all risks of Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary which have been designated as being self-insured. Except as set forth in Schedule 4.17 of the Olivetti Disclosure Schedule, each policy listed is valid, binding and enforceable in accordance with its respective terms and is in full force and effect, all premiums due with respect to each policy 50 59 listed have been paid or deferred with the agreement of the insurers or are the subject of a legitimate dispute, and there are no notices of cancellation or termination with respect to any policy listed. The coverage provided by the policies listed is consistent with the past practice of the Business and the business of Olsy, Olsy Japan, Olsy Brazil or each Controlled Subsidiary and is normal and customary for businesses similarly situated in the jurisdictions in which they are located or are conducting business. To the Best Knowledge of Olivetti, neither Olivetti (with respect to the Business), Olsy, Olsy Japan, Olsy Brazil nor any Controlled Subsidiary has been refused any insurance with respect to its respective assets, properties or operations, nor has its coverage been limited by any insurance carrier to which it has applied for any such insurance or with which it has carried insurance during the last three years. 4.18 TAXES. (a) Except as set forth in Schedule 4.18(a) of the Olivetti Disclosure Schedule, all Tax Returns (as defined in this Section 4.18) by or on behalf of Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary or any affiliated, combined or unitary group of which Olsy, Olsy Japan, Olsy Brazil or a Controlled Subsidiary is or was a member, have been duly and timely filed with the appropriate taxing authorities and were, in all respects, true, complete and correct, except for any errors or omissions on such Tax Returns which would not have a Material Adverse Effect. (b) Except as set forth in Schedule 4.18(b) of the Olivetti Disclosure Schedule, Olsy, Olsy Japan, Olsy Brazil and each Controlled Subsidiary has paid or will have had paid to the appropriate taxing authority on its behalf, within the time and in the manner prescribed by law, all Taxes for which it is liable, except for Taxes the failure of which to pay would not have a Material Adverse Effect. (c) Except as set forth in Schedule 4.18(c) of the Olivetti Disclosure Schedule (which shall set forth the nature of the proceeding, the type of return, the deficiencies claimed, asserted, proposed or assessed and the amount thereof, and the taxable year in question), no Tax audits, investigations or written claims or other administrative proceedings or court proceedings are presently pending against Olivetti or any 51 60 Olivetti Affiliate or against Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary with regard to any Taxes or Tax Returns of Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary and no written notification has been received by Olivetti, any Olivetti Affiliate, Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary that such an audit or other proceeding is pending or threatened with regard to any such Taxes or Tax Return. (d) Except as set forth in Schedule 4.18(d) of the Olivetti Disclosure Schedule, no jurisdiction where Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary has not filed a Tax Return has made a written claim that Olsy, Olsy Japan, Olsy Brazil or such Controlled Subsidiary is required to file a Tax Return in such jurisdiction. (e) Except as set forth in Schedule 4.18(e) of the Olivetti Disclosure Schedule, no Controlled Subsidiary that has been organized, created or otherwise formed pursuant to the laws of the United States or any state or territory thereof (each a "U.S. Controlled Subsidiary") or any entity (regardless of its organizational form) Controlled (as defined in Section 12.11) by a U.S. Controlled Subsidiary has elected under Treasury Regulation ' 301.7701-3 to be classified for U.S. federal income tax purposes (i) as a partnership or disregarded as a separate entity where such entity would otherwise be classified as a corporation, or (ii) as a corporation where such entity would otherwise be classified as a partnership or disregarded as a separate entity. (f) Olivetti and/or its Affiliates (including Olsy, Olsy Japan, Olsy Brazil and any Controlled Subsidiary) has previously delivered or made available to Wang complete and accurate copies of each of (i) all audit reports, letter rulings and technical advice memoranda relating to United States federal, state, local or foreign Taxes due with respect to the income or business of Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary, (ii) any closing agreement, settlement agreement or similar agreement or arrangement entered into by or on behalf of Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary with any taxing authority, and (iii) any Tax sharing agreement, Tax indemnification agreement or similar contract or arrange- 52 61 ment entered into by or on behalf of Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary. (g) For purposes of this Agreement, "Taxes" shall mean all taxes, charges, fees, levies or other assessments, including, without limitation, all net income, gross income, gross receipts, sales, use, ad valorem, goods and services, capital, transfer, franchise, profits, license, withholding, payroll, employment, employer health, excise, severance, stamp, occupation, real and personal property, social security, estimated, recording, gift, value assessed, windfall profits or other taxes, customs duties, fees, assessments or charges of any kind whatsoever, whether computed on a separate, consolidated, unitary, combined or other basis, together with any interest, fines, penalties, additions to tax or other additional amounts imposed by any taxing authority. For the avoidance of any doubt, any and all interest, penalties, additions to tax or other additional amounts included within the definition of "Taxes" shall be treated as attributable to the same taxable period as the Taxes to which such interest, penalties, additions to tax or other additional amounts relate. For purposes of this Agreement, "Tax Return" shall mean any return, declaration, report, estimate, information or other document (including any documents or statements attached thereto) required to be filed with any taxing authority with respect to Taxes. 4.19 EMPLOYEES; EMPLOYEE RELATIONS. (a) Schedule 4.19(a)(i) of the Olivetti Disclosure Schedule contains a true and complete list of all the employees of Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary in Italy as of January 31, 1998 with an indication of their employment classification for purposes of applicable collective bargaining agreements. Schedule 4.19(a)(ii) of the Olivetti Disclosure Schedule contains a true and complete list of all other employees of Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary as of January 31, 1998 by country with an indication of their employment classification for purposes of applicable collective bargaining agreements, if any. As of December 31, 1997, Olsy and the Controlled Subsidiaries employed 3,817 employees in Italy. No present or former employees of Olivetti or any of its Affiliates other than those listed in Schedules 4.19(a)(i) or (ii) of the Olivetti Disclosure Schedule have a right vis-a-vis Olsy, 53 62 Olsy Japan, Olsy Brazil or any Controlled Subsidiary which will entitle them to be hired as an employee of the latter nor has any of the employees listed in Schedules 4.19(a)(i) or (ii) a right to obtain an employment classification other than as listed in Schedules 4.19(a)(i) or (ii) of the Olivetti Disclosure Schedule under any collective bargaining agreement or applicable law. Except as set forth on Schedule 4.19(a)(iii) of the Olivetti Disclosure Schedule, none of the employees listed on Schedules 4.19(a)(i) or (ii) of the Olivetti Disclosure Schedule is employed or paid by, or receives or is entitled to receive benefits from, more than one of Olsy, Olsy Japan, Olsy Brazil or a Controlled Subsidiary. None of the employees listed on Schedules 4.19(a)(i) or (ii) of the Olivetti Disclosure Schedule has been authorized or instructed not to report to work or otherwise designated "no-shows". None of the employees listed on Schedules 4.19(a)(i) or (ii) of the Olivetti Disclosure Schedule are performing services for Olivetti or any Olivetti Affiliate on a regular basis. The approximately 80 contractors/fixed term employees in Holland previously discussed by Olivetti and Wang may be terminated at the expiration of their respective contract terms without cost or expense to Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary. All costs of the employees listed on Schedule 4.19(a)(i) or (ii) of the Olivetti Disclosure Schedule for the period ended September 30, 1997 are reflected on the 9/30/97 Italian GAAP Financial Statements. (b) Schedule 4.14(b)(i) of the Olivetti Disclosure Schedule lists all employees of Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary with annual base compensation and bonus in excess of U.S. $150,000 (or an equivalent amount in another currency) for the calendar year ended December 31, 1997. (c) Schedule 4.19(c) of the Olivetti Disclosure Schedule lists all collective bargaining agreements or other written agreements (including shop level agreements), work rules or practices, agreed to with any labor organization, employee association or works council, applicable to employees of Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary. (d) Except as set forth in Schedule 4.19(d) of the Olivetti Disclosure Schedule, to the Best 54 63 Knowledge of Olivetti, there are no controversies involving an amount greater than U.S. $35,000 (or an equivalent amount in another currency) pending (or to the Best Knowledge of Olivetti, threatened) between Olivetti, Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary and any employees, former employees, employees' collective bargaining representatives, job applicants or any association or group of such persons, relating to employment in or with Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary. Except as set forth in Schedule 4.19(d) of the Olivetti Disclosure Schedule, there are no written personnel policies, rules or procedures applicable to employees of Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary. True and correct copies of all such policies, rules or procedures scheduled in Schedule 4.19(d) of the Olivetti Disclosure Schedule have been provided to Wang. Each of Olivetti, Olsy, Olsy Japan, Olsy Brazil and the Controlled Subsidiaries has complied in all material respects with all federal, state, local or foreign laws applicable to present or former employees (or any Person found to be a present or former employee), employees' collective bargaining representatives, job applicants or any association or group of such persons, of Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary, including without limitation any provisions thereof relating to terms and conditions of employment, wages, hours, the payment of social security and similar taxes and occupational safety and health. (e) Except as set forth in Schedule 4.19(e) of the Olivetti Disclosure Schedule, neither Olivetti, Olsy, Olsy Japan, Olsy Brazil nor any Controlled Subsidiary (i) is a party to, otherwise involved in (or to the Best Knowledge of Olivetti, threatened by) any labor dispute, strike, stoppage, slowdown or lockout, any union organizing activity in the United States, or any administrative, governmental, judicial or appellate proceeding or investigation, directly or indirectly, arising out of the wages, hours or other terms or conditions of employment of any person who was or is now employed by Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary, (ii) is currently negotiating, or is subject to any order, judgment, decree or injunction of any court, regulatory authority, arbitrator or other tribunal requiring it to negotiate any collective bargaining agreement with regard to persons employed by Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsid- 55 64 iary or (iii) has experienced any strike, stoppage, slowdown or lockout during the preceding three years. (f) Each of Olivetti, Olsy, Olsy Japan, Olsy Brazil and the Controlled Subsidiaries has complied with any applicable foreign, state or local law with regard to plant closings, mass layoffs, collective dismissals or redundancies, as such terms are defined for purposes of such laws, applicable to present or former employees of the Business, Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary. Except as set forth in Schedule 4.19(f) of the Olivetti Disclosure Schedule, none of the present or former employees of the Business, Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary has suffered an employment loss, dismissal, redundancy, or termination as those terms are defined for purposes of such laws in the six-month period ending on the Closing Date. (g) Olivetti North America complied with the Worker Adjustment and Retraining Notification Act of 1988 (the "WARN Act") with regard to plant closings or mass layoffs, as such terms are defined in the WARN Act. Except as set forth in Schedule 4.19(g) of the Olivetti Disclosure Schedule, none of the present or former employees of Olivetti North America has suffered an employment loss as that term is defined in the WARN Act in the six-month period ending on the Closing Date. (h) Olivetti has taken or will take in a timely fashion all necessary actions required by law or by agreement to inform, consult, notify or obtain the consent, as applicable, of the works council or other employee representation bodies of all entities which shall be acquired directly or indirectly by Wang pursuant to this Agreement. 4.20 EMPLOYEE BENEFIT PLANS; ERISA. (a) For purposes of this Agreement, "Plan" shall mean each thrift, savings, bonus, deferred compensation, incentive compensation, stock purchase, stock option, severance or termination pay, vacation or sick leave, hospitalization or other medical, life or other insurance, supplemental unemployment benefits, employee welfare, profit-sharing, pension, or retirement plan, program, agreement or arrangement, statutory, contractual or otherwise, and each other fringe or employee benefit plan, program, agreement 56 65 or arrangement, statutory, contractual or otherwise, sponsored, maintained or contributed to or required to be contributed to by Olivetti or by any Controlled Subsidiary, for the benefit of any employee or former employee of the Business, Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary, other than any such plan, program, agreement or arrangement sponsored or maintained by a state, local, federal or foreign government or governmental subdivision or entity of any kind. Schedule 4.20(a) of the Olivetti Disclosure Schedule sets forth a true and complete list of all Plans. (b) With respect to each Plan other than any Plan maintained for the benefit of any employees of any United States Subsidiary (the "Olsy Plans"), Olivetti has delivered or made available to Wang all correct and complete copies of material documentation available to Olivetti, Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary with respect to such Olsy Plan, including, without limitation, Plan texts and all amendments thereto, funding agreements, actuarial reports, funding and financial information returns and statements, all professional opinions (whether or not internally prepared) with respect to each Olsy Plan, all material internal memoranda concerning the Olsy Plan, copies of material correspondence with all regulatory authorities with respect to each Olsy Plan and plan summaries, booklets and personnel manuals. (c) Each Olsy Plan has been maintained in material compliance with its terms and with the requirements of any and all applicable laws, statutes, rules, regulations and orders and has been maintained, where required, in good standing with applicable regulatory authorities; neither Olsy, Olsy Japan, Olsy Brazil, nor any Controlled Subsidiary has incurred, nor reasonably expects to incur, any obligation in connection with the termination of or withdrawal from any Olsy Plan that has not been satisfied in full. Except as set forth in Schedule 4.20(c) of the Olivetti Disclosure Schedule, no Olsy Plan that provides pension or retirement benefits is intended to enjoy any special tax status under applicable law, nor have any advance tax rulings been sought or received in respect of any such Olsy Plan. No fact or circumstances exist that would reasonably be expected to materially adversely affect such special tax status of any such Olsy Plan. Except as set forth in Schedule 57 66 4.20(c) of the Olivetti Disclosure Schedule, Olsy, Olsy Japan, Olsy Brazil or each Controlled Subsidiary may unilaterally amend, modify, vary or terminate, in whole or in part, each Olsy Plan, merge any such Olsy Plan with another arrangement, plan or fund and, to the extent permitted under applicable law, take contribution holidays under or withdraw surplus, on an ongoing and termination basis, from each such Olsy Plan, subject only to approvals required by applicable law. No Olsy Plan is liable, or would reasonably be expected to be liable, to an order that it be wound-up in whole or in part. Except as set forth in Schedule 4.20(c) of the Olivetti Disclosure Schedule, no amounts are required to be transferred out of, or in respect of, any Olsy Plans. As of the Closing Date, all employee and other data necessary to administer each Olsy Plan will be provided by Olivetti to Wang and will be true, correct and complete as of the Closing Date. No insurance policy or any other contract or agreement affecting any Olsy Plan requires or permits a retroactive increase in premiums or payments due thereunder in respect of events or circumstances occurring prior to the Closing Date. The level of insurance reserves under or in respect of each insured Olsy Plan is reasonable and sufficient to provide for all incurred but unreported claims. (d) With respect to (i) each Plan that is not an Olsy Plan, in the case of clause (aa) below and (ii) each Plan that is an "employee benefit plan" (as that term is defined in section 3(3) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA")) subject to ERISA (hereinafter referred to collectively as the "ERISA Plans"), in the case of clauses (bb) through (gg) below, Olivetti has heretofore delivered to Wang correct and complete copies of each of the following documents: (aa) a copy thereof (including all amendments thereto); (bb) a copy of the annual report, if required under ERISA, with respect thereto for the last two years; (cc) a copy of the actuarial report, if any, with respect thereto for the last two years; 58 67 (dd) a copy of the most recent report prepared with respect thereto in accordance with Statement of Financial Accounting Standards No. 87 or No. 106, if any; (ee) a copy of the most recent Summary Plan Description, together with each Summary of Material Modifications, required under ERISA with respect thereto; (ff) if the Plan is funded through a trust or any third party funding vehicle, a copy of the trust or other funding agreement (including all amendments thereto) and the latest financial statements thereof; and (gg) the most recent determination letter, if any, received from the Internal Revenue Service with respect to each Plan that is intended to be qualified under section 401 of the Code. (e) Except as set forth in Schedule 4.20(e) of the Olivetti Disclosure Schedule, (i) no material liability under Title IV of ERISA has been incurred by Olivetti or any ERISA Affiliate that has not been satisfied in full except for any such liability the payment of which is not yet due and (ii) no condition exists that presents a material risk to Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary of incurring a liability under such Title, other than liability for premiums due the Pension Benefit Guaranty Corporation ("PBGC") (which premiums have been paid when due). (f) Neither Olivetti nor any ERISA Affiliate, nor any ERISA Plan, nor any trust created thereunder, nor any trustee or administrator thereof has engaged in a transaction in connection with which Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary could reasonably be expected to be subject to either a material civil penalty assessed pursuant to section 409 or 502(i) of ERISA or a material Tax imposed pursuant to section 4975 or 4976 of the Code. (g) No ERISA Plan, or any trust established thereunder has incurred any "accumulated funding deficiency" (as defined in section 302 of ERISA and 59 68 section 412 of the Code), whether or not waived, as of the last day of the most recent fiscal year of each ERISA Plan ended prior to the Closing Date; and all contributions (other than contributions that are not material in amount) required to be made with respect to each ERISA Plan (whether pursuant to the terms thereof or otherwise) on or prior to the Closing Date have been timely made. (h) Except as set forth in Schedule 4.20(h) of the Olivetti Disclosure Schedule, no ERISA Plan is a "multiemployer pension plan," as such term is defined in section 3(37) of ERISA, nor is any ERISA Plan a multiple employer plan described in section 4063(a) of ERISA. (i) Except as set forth in Schedule 4.20(i) of the Olivetti Disclosure Schedule, each Plan (other than any Olsy Plan) has been operated and administered in all material respects in accordance with its terms and applicable law, including but not limited to ERISA and the Code. (j) Each ERISA Plan which is intended to be "qualified" within the meaning of section 401(a) of the Code has received a favorable determination letter from the Internal Revenue Service as to its "qualified" status. (k) Except as set forth in Schedule 4.20(k) of the Olivetti Disclosure Schedule, no Plan provides benefits, including, without limitation, death or medical benefits (whether or not insured), with respect to current or former employees of the Business, Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary beyond their retirement or other termination of service (other than (i) coverage mandated by applicable law, (ii) death benefits or retirement benefits under any "employee pension plan," as that term is defined in section 3(2) of ERISA, (iii) benefits the full cost of which are borne by the current or former employee (or his beneficiary) or (iv) benefits the payment of which would not result in material cost to Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary). (l) Except as set forth in Schedule 4.20(l) of the Olivetti Disclosure Schedule, the Drop-Down did not, and the consummation of the transac- 60 69 tions contemplated by this Agreement or any of the Related Agreements will not by themselves (i) entitle any current or former employee or officer of Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary to severance pay, unemployment compensation or any other payment or (ii) accelerate the time of payment or vesting, or increase the amount of compensation due any such employee or officer. (m) Except as set forth in Schedule 4.20(m) of the Olivetti Disclosure Schedule, there are no pending, threatened or anticipated claims by or on behalf of any Plan, by any employee or beneficiary covered under any such Plan or otherwise involving any such Plan (other than routine claims for benefits) that is reasonably expected to result in a material cost or liability to Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary. 4.21 COMPLIANCE WITH LAW; POLITICAL PAYMENTS. (a) Except (i) as set forth in Schedule 4.21(a) of the Olivetti Disclosure Schedule or disclosed to Wang in the review referred to in Section 4.21(c) and (ii) any noncompliance which would cause Olsy, Olsy Japan, Olsy Brazil and the Controlled Subsidiaries to lose aggregate (without duplication) revenue of U.S. $1,500,000 (or an equivalent amount in another currency) or more or incur aggregate (without duplication) cost or expense of U.S. $250,000 (or an equivalent amount in another currency) or more, the operations of the Business and the business of each of Olsy, Olsy Japan, Olsy Brazil and the Controlled Subsidiaries have been since January 1, 1995, and are being, conducted in compliance, in all material respects, with all (applicable from time to time) laws, rules, regulations and other requirements of all national Governmental Authorities and of all states, municipalities and other political subdivisions and agencies thereof, having jurisdiction over the Business, Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary, including, without limitation, all such laws, rules, regulations and other requirements relating to antitrust, consumer protection, currency exchange, employment (including equal opportunity), health, occupational safety, pension, securities, anti-boycott compliance, export control, foreign asset control, foreign corrupt practices, trading-with-the-enemy matters or doing business with or providing services to a Governmental Authority. Except 61 70 as set forth in Schedule 4.21(a) of the Olivetti Disclosure Schedule, neither Olivetti, Olsy, Olsy Japan, Olsy Brazil nor any Controlled Subsidiary has received any notification, demand, subpoena or inquiry relating to any present or past failure by the Business, Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary to comply, in any material respect, with such laws, rules, regulations or other requirements nor, to the Best Knowledge of Olivetti, has the Business, Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary been the subject of any inquiry or investigation by any Governmental Authority regarding any such present or past failure. (b) Except as set forth in Schedule 4.21(b) of the Olivetti Disclosure Schedule or disclosed to Wang in the review referred to in Section 4.21(c): (i) no offer, payment, gift, promise to pay or give, or authorization of the payment or giving of any money or anything of value has been made by or on behalf of the Business, Olsy, Olsy Japan, Olsy Brazil or any of the Controlled Subsidiaries, either directly or through any intermediary, to any Official of any Governmental Authority, or to any political party or Official thereof, or to any candidate for governmental or political office, for the purpose of affecting or influencing any act or decision of such person or inducing such person to use his influence to affect or influence any act or decision of any Governmental Authority in order to assist the Business, Olsy, Olsy Japan, Olsy Brazil or any of the Controlled Subsidiaries in obtaining or retaining business for or with, or directing business to, any person and (ii) neither Olivetti, Olsy, Olsy Japan, Olsy Brazil nor any of the Controlled Subsidiaries has received any written communication, whether from a Governmental Authority, competitor, employee or otherwise, alleging that Olivetti, Olsy, Olsy Japan, Olsy Brazil or any of the Controlled Subsidiaries has engaged in any action that would be inconsistent with the representations and warranties set forth in this Section 4.21(b). Olivetti has delivered or otherwise made available for inspection to Wang, true, complete and correct copies of any and all reports, studies, analyses, or other writings regarding any audits, inquiries, investigations, reviews or other evaluations that have been conducted by or on behalf of Olivetti, Olsy, Olsy Japan, Olsy Brazil, any of the Controlled Subsidiaries, or any of the Boards of Directors thereof with respect to the possible occurrence of 62 71 any action that would be inconsistent with the representations and warranties set forth in this Section 4.21(b). (c) Olivetti has reviewed with Wang the material facts relating to any pending inquiries or investigations by any Governmental Authority concerning the Business or the business of Olsy, Olsy Japan, Olsy Brazil, any Subsidiary or any Olsy Japan Subsidiary. 4.22 ENVIRONMENTAL MATTERS. (a) Except as set forth in Schedule 4.22(a) of the Olivetti Disclosure Schedule: (i) The operations of Olsy, Olsy Japan, Olsy Brazil and each of the Controlled Subsidiaries, including the use and operations of all Real Estate and the Leased Premises, are in compliance with all applicable Environmental Laws (as defined in Section 4.22(c)) (which compliance includes, but is not limited to, the possession by Olsy, Olsy Japan, Olsy Brazil and the Controlled Subsidiaries of all permits, licenses and other governmental authorizations required under applicable Environmental Laws, and compliance with the terms and conditions thereof) except where any Individual Environmental Noncompliance (as defined in Section 4.22(c)) will not cause Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiaries to lose aggregate (without duplication) revenue of U.S. $1,500,000 (or an equivalent amount in another currency) or more or incur aggregate (without duplication) costs or expense of U.S. $250,000 (or an equivalent amount in another currency) or more. Neither Olivetti, Olsy, Olsy Japan, Olsy Brazil nor any of the Controlled Subsidiaries has received any written communication, whether from a Governmental Authority, citizens group, employee or otherwise, alleging that the Business, Olsy, Olsy Japan, Olsy Brazil or any of the Controlled Subsidiaries is not in such compliance, and to the Best Knowledge of Olivetti, there are no past or present actions, activities, circumstances, conditions, events or incidents that may prevent or interfere with such compliance in the future. (ii) There is no Environmental Claim (as defined in Section 4.22(c)) pending (or to the Best Knowledge of Olivetti threatened) against Olsy, 63 72 Olsy Japan, Olsy Brazil, any of the Controlled Subsidiaries or, to the Best Knowledge of Olivetti, against any person or entity whose liability for any Environmental Claim Olsy, Olsy Japan, Olsy Brazil or any of the Controlled Subsidiaries has or may have retained or assumed either contractually or by operation of law. (iii) To the Best Knowledge of Olivetti, there are no past or present actions, activities, circumstances, conditions, events or incidents, including, without limitation, the Release (as defined in Section 4.22(c)) or presence of any Hazardous Material (as defined in Section 4.22(c)), of which could form the basis of any Environmental Claim against Olsy, Olsy Japan, Olsy Brazil, any of the Controlled Subsidiaries or, to the Best Knowledge of Olivetti, against any person or entity whose liability for any Environmental Claim Olsy, Olsy Japan, Olsy Brazil or any of the Controlled Subsidiaries has or may have retained or assumed either contractually or by operation of law except where any individual such action, activity, circumstance, condition, event, incident or Individual Environmental Noncompliance will not cause Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary to lose aggregate (without duplication) revenue of U.S. $1,500,000 (or an equivalent amount in another currency) or more or incur aggregate (without duplication) costs or expense of U.S. $250,000 (or an equivalent amount in another currency) or more. (iv) No transfer, reissuance or renewal of any permit, license or other governmental authorization and no notice to any Governmental Authority under any Environmental Law will be required to permit Wang to conduct the business of Olsy, Olsy Japan, Olsy Brazil or any of the Controlled Subsidiaries, and the business of Olsy, Olsy Japan, Olsy Brazil and each of the Controlled Subsidiaries will be in compliance with all applicable Environmental Laws immediately following the Closing except where any Individual Environmental Noncompliance will not cause Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary to lose aggregate (without duplication) revenue of U.S. $1,500,000 (or an equivalent amount in another currency) or more or incur aggre- 64 73 gate (without duplication) costs or expense of U.S. $250,000 (or an equivalent amount in another currency) or more. (v) (i) Neither Olsy, Olsy Japan, Olsy Brazil nor any of the Controlled Subsidiaries has, and to the Best Knowledge of Olivetti, no other Person has, Released, placed, stored, buried or disposed of any Hazardous Material in, on, beneath, from or adjacent to any real property now owned, leased, operated or used by Olsy, Olsy Japan, Olsy Brazil, any of the Controlled Subsidiaries or any of their respective predecessors in interest, except for inventories of such items to be used in the ordinary course of business of Olsy, Olsy Japan, Olsy Brazil or any of the Controlled Subsidiaries (which inventories were and are stored, tested, handled and disposed of in accordance with applicable Environmental Laws and in a manner such that there has been no Release of any such item) and (ii) no Person, including Olsy, Olsy Japan, Olsy Brazil or any of the Controlled Subsidiaries will be required to Cleanup (as defined in Section 4.22(c)) any site or facility owned, leased, operated or used by Olsy, Olsy Japan, Olsy Brazil or any of the Controlled Subsidiaries pursuant to any Environmental Law, as a result of any act or omission of Olsy, Olsy Japan, Olsy Brazil or any of the Controlled Subsidiaries or any use or Release or threatened Release of any Hazardous Material at or from real property owned, operated, leased or used by Olsy, Olsy Japan, Olsy Brazil or any of the Controlled Subsidiaries prior to the Closing, except where any individual circumstance or state of fact referred to in this clause (v) will not cause Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary to lose aggregate (without duplication) revenue of U.S. $1,500,000 (or an equivalent amount in another currency) or more or incur aggregate (without duplication) costs or expense of U.S. $250,000 (or an equivalent amount in another currency) or more. (b) Schedule 4.22(b) of the Olivetti Disclosure Schedule sets forth all permits, licenses and other governmental authorizations currently held by Olsy, Olsy Japan, Olsy Brazil or any of the Controlled Subsidiaries pursuant to applicable Environmental Laws. 65 74 Olivetti has delivered or otherwise made available for inspection to Wang true, complete and correct copies and results of any reports, studies, analyses, tests or monitoring possessed or initiated by Olivetti, Olsy, Olsy Japan, Olsy Brazil or any of the Controlled Subsidiaries pertaining to Hazardous Materials in, on, beneath or adjacent to any Real Estate and Leased Premises currently or formerly owned, operated or leased by Olsy, Olsy Japan, Olsy Brazil or any of the Controlled Subsidiaries, or regarding compliance with applicable Environmental Laws by the Business, Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary. (c) For purposes of this Section 4.22: (i) "Cleanup" means all actions required to (aa) clean up, remove, treat or remediate Hazardous Materials in the indoor or outdoor environment, (bb) prevent the Release of Hazardous Materials so that they do not migrate, endanger or threaten to endanger public health or welfare or the indoor or outdoor environment or (cc) perform pre-remedial studies and investigations and post-remedial monitoring and care; (ii) "Environmental Claim" means any claim, action, cause of action, investigation or written notice by any person or entity alleging potential liability (including, without limitation, potential liability for investigatory costs, Cleanup costs, governmental response costs, natural resources damages, property damages, personal injuries, or penalties) arising out of, based on or resulting from (aa) the presence or Release of any Hazardous Materials at any location, whether or not owned or operated by Olsy, Olsy Japan, Olsy Brazil or any of the Controlled Subsidiaries or (bb) circumstances forming the basis of any violation, or alleged violation, of any Environmental Law; (iii) "Environmental Laws" means all national, federal, state, and local laws and regulations relating to pollution or protection of human health or the environment, including without limitation, laws relating to Releases or threatened Releases of Hazardous Materials or otherwise relating to the manufacture, processing, distribution, use, 66 75 treatment, storage, Release, disposal, transport or handling of Hazardous Materials, and all laws and regulations with regard to recordkeeping, notification, disclosure and reporting requirements respecting Hazardous Materials; (iv) "Hazardous Materials" means all materials, substances and wastes defined in an Environmental Law as "hazardous substances," "hazardous waste," "dangerous materials," and "solid waste" or words of similar import as in effect as of the Closing Date, and in addition, shall include, without limitation, petroleum and petroleum products, chemicals, pollutants, contaminants, wastes, toxic substances, asbestos in any form that is friable, and transformers and other equipment that contain dielectric fluid containing polychlorinated biphenyls; (v) "Individual Environmental Noncompliance" means (aa) all claims of noncompliance with Environmental Law set forth in a notice of violation of a certain date prepared by a governmental entity or in a civil or criminal complaint alleging noncompliance with Environmental Laws, or (bb) any specific violation of Environmental Law, including but not limited to exceedances of permit requirements, from the first date of a violation until the violation is corrected or the facility involved otherwise comes into compliance with law; and (vi) "Release" means any release, spill, emission, discharge, leaking, pumping, injection, deposit, disposal, dispersal, leaching or migration into the indoor or outdoor environment (including, without limitation, ambient air, surface water, groundwater and surface or subsurface strata) or into or out of any property, including the movement of Hazardous Materials through or in the air, soil, surface water, groundwater or property. 4.23 LITIGATION. (a) Except as set forth in Schedule 4.23(a) of the Olivetti Disclosure Schedule, there is no action, suit, charge, proceeding, arbitration, inquiry, grievance or investigation pending (or, to the Best Knowledge of Olivetti, threatened) by or before 67 76 any court or governmental or other regulatory or administrative agency or commission involving Olivetti (with respect to the Business), Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary involving, individually, an amount in excess of U.S. $500,000, or in the aggregate, an amount in excess of U.S. $2,000,000. Olivetti shall reimburse Wang for all costs (including, without limitation, all judgments, awards, assessments or expenses (including, without limitation, reasonable out-of-pocket expenses of investigation and reasonable attorneys' and consultants' fees) associated with any action, suit, charge, proceeding, arbitration, inquiry, grievance or investigation pending as of the Closing (or, to the Best Knowledge of Olivetti, threatened as of the Closing) by or before any court or governmental or other regulatory or administrative agency or commission involving Olivetti (with respect to the Business), Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary in excess of the amounts specifically reserved therefor on the Closing Balance Sheet plus U.S. $2,000,000. (b) Except as set forth in Schedule 4.23(b) of the Olivetti Disclosure Schedule, there is no action, suit, charge, proceeding, arbitration, inquiry, grievance or investigation, pending (or, to the Best Knowledge of Olivetti, threatened) against Olivetti (with respect to the Business), Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary by or before any court or governmental or other regulatory or administrative agency or commission which questions or challenges the validity of this Agreement or any of the Related Agreements or any action taken or to be taken by the Sellers, Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary pursuant to this Agreement, or any of the Related Agreements or in connection with the transactions contemplated hereby or thereby, and neither Olivetti, Olsy, Olsy Japan, Olsy Brazil nor any Controlled Subsidiary knows or has reason to know of any valid basis for any such action, suit, inquiry, grievance, proceeding, arbitration or investigation. 4.24 PRODUCTS LIABILITY. Except as set forth in Schedule 4.24 of the Olivetti Disclosure Schedule, there is no action, suit, inquiry, proceeding, arbitration, grievance or investigation pending (or, to the Best Knowledge of Olivetti, threatened) by or before any court or governmental or other regulatory or administrative 68 77 agency or commission against or involving Olivetti (with respect to the Business), Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary relating to any product alleged to have been manufactured or sold by Olivetti, Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary and alleged to have been defective or improperly designed or manufactured or any service alleged to have been provided by Olivetti, Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary and alleged to have been defective or improperly performed, in each case, involving an amount in excess of U.S. $500,000. To the Best Knowledge of Olivetti, Olivetti has previously delivered to Wang true, complete and correct copies of any and all reports, studies, analyses or other writings regarding any audits, inquiries, investigations, reviews or other evaluations that have been conducted by or on behalf of Olivetti, Olsy, Olsy Japan, Olsy Brazil, the Controlled Subsidiaries or any of the Boards of Directors thereof with respect to whether any product may have been defective or improperly designed or manufactured or any service that may have been defective or improperly performed. 4.25 SECURITIES ACT. Olivetti represents that the Wang Shares being delivered to Olivetti (or its designee) pursuant to Section 2.1(b)(ii) of this Agreement are being received for its own account, not as nominee or agent for any other person, firm or corporation and not for distribution or resale to others in contravention of the Securities Act (as defined in Section 12.11). Olivetti agrees that it will not sell or otherwise transfer the Wang Shares unless they are registered under the Securities Act or unless an exemption from such registration is available. Olivetti consents to the placement of a legend on any certificate or other document evidencing the Wang Shares stating that such Wang Shares have not been registered under the Securities Act or under any state securities or "blue sky" laws and setting forth or referring to the restrictions on transferability and sale thereof set forth in the Stockholder Agreement attached as Exhibit 10 hereto until such time as such restrictions are no longer applicable. 4.26 BROKERS AND FINDERS. Except for Lehman Brothers, which are serving as financial advisors to Olivetti and whose fees will be paid by Olivetti, neither Olivetti nor any Affiliate of Olivetti is obliged to pay, 69 78 or has retained any broker or finder or other person who is entitled to, any broker's or finder's fee based upon any agreement or undertaking made by Olivetti or any Affiliate of Olivetti in connection with this Agreement or any Related Agreements to which any of them is a party or the transactions contemplated hereby or thereby. 4.27 DISCLOSURE. No representations or warranties by Olivetti in this Agreement or any Related Agreement to which Olivetti is a party and no statement contained in the financial statements referred to in Sections 4.6(a) or (b), the Olivetti Disclosure Schedule or Schedules 1, 1.8(a)(iv), 1.10, 4.2(e), 6.16(b), 6.16(c), 6.20, 6.21, 10.2(a)(viii) or 10.6(d) hereto contain (or, with respect to any of the foregoing which are completed, amended or supplemented after the date hereof, will contain) any untrue statement of material fact or omit (or, with respect to any of the foregoing which are completed, amended or supplemented after the date hereof, will omit) to state any material fact necessary, in light of the circumstances under which it was made, in order to make such representation, warranty or statement not misleading. ARTICLE V REPRESENTATIONS AND WARRANTIES OF WANG -------------------------------------- Wang represents and warrants to Olivetti as follows: 5.1 ORGANIZATION, STANDING AND QUALIFICATION. Each of the Buyers (a) is a corporation duly organized or incorporated, validly existing and in good standing under the laws of its jurisdiction of incorporation, (b) has full corporate power and authority to carry on its business as it is now being conducted and to own, lease and operate its properties and assets and (c) is duly qualified or licensed to do business as a foreign corporation in good standing in each jurisdiction in which the conduct of its business, the ownership, leasing or operation of its properties or assets or the nature of the business conducted by it makes such qualification necessary, except where the failure to be so qualified or licensed would not, in the aggregate, have or result in a material adverse effect on or change in the business, 70 79 assets, properties, liabilities, results of operations or condition (financial or otherwise) of Wang, taken as a whole. The copies of the certificate of incorporation and by-laws of Wang heretofore delivered to Olivetti by Wang are complete and correct copies of such instruments, as currently in effect. The copies of the minutes of the meetings of the Board of Directors of Wang held during the period beginning on January 1, 1995 and ending on December 31, 1997 heretofore made available to Olivetti by Wang are, except for the portions thereof redacted relating to the transactions contemplated hereby, other business combinations, acquisitions or similar transactions or strategic investments by or in Wang, true and complete copies of such minutes (other than the exhibits thereto). 5.2 CAPITALIZATION. As of the date of this Agreement, the authorized capital stock of Wang consists of (a) 5,000,000 shares of preferred stock, $.01 par value per share (the "Wang Preferred Stock"), of which 90,000 shares have been designated as 4-1/2% Series A Cumulative Convertible Preferred Stock and are issued and outstanding, 143,750 shares have been designated as 6-1/2% Series B Cumulative Convertible Preferred Shares and are issued and outstanding and (b) 100,000,000 shares of common stock, $.01 par value per share (the "Wang Common Stock"), of which 38,503,186 shares are issued and outstanding (2,591,331 of which remain in a disputed claims reserve established pursuant to (i) the reorganization plan of Wang pursuant to Chapter 11 of the United States Bankruptcy Code that was approved by the United States Bankruptcy Court for the District of Massachusetts (the "Bankruptcy Court") on September 20, 1993, (ii) the disclosure statement used to solicit consents to such reorganization plan and (iii) the signed confirmation order with respect to such reorganization plan (the documents referred to in clauses (i), (ii) and (iii) being referred to hereinafter collectively as the "Reorganization Plan") of which 2,585,331 are expected to be distributed within 90 days of the date hereof). All issued and outstanding shares of Wang Preferred Stock and Wang Common Stock are duly authorized, validly issued, fully paid, nonassessable and free of preemptive rights, and there is no outstanding subscription, option, warrant, call, right, agreement, commitment, understanding or arrangement relating to the issuance, sale, delivery, transfer or redemption of Wang Preferred Stock or Wang 71 80 Common Stock (including any right of conversion or exchange under any outstanding security or other instrument) other than, in the case of Wang Common Stock, in each case as of January 31, 1998, up to 12,500,000 shares which may be issued upon the conversion of intercompany convertible instruments issued or issuable to subsidiaries of Wang pursuant to the Reorganization Plan, up to 7,500,000 shares which may be issued upon exercise of common stock purchase warrants issued or issuable to former stockholders of Wang pursuant to the Reorganization Plan, up to 9,324,807 shares which may be issued upon the conversion of the Wang Preferred Stock, up to 303,030 shares which may be issued upon exercise of a common stock purchase warrant issued to Microsoft Corporation, up to 11,530,021 shares which may be issued to employees of Wang pursuant to Wang's 1993 Stock Incentive Plan, 1994 Employees' Stock Incentive Plan, Employees' Stock Purchase Plan and 1995 Employees' Stock Purchase Plan and 320,000 shares issuable upon the exercise of stock options granted to the directors of Wang pursuant to Wang's 1993 and 1995 Directors' Stock Option Plans. The issuance of the Wang Shares has been duly authorized and, upon delivery to Olivetti of certificates therefor against payment in accordance with the terms hereof, the Wang Shares will have been validly issued, fully paid, nonassessable and free of preemptive rights. 5.3 AUTHORITY. Each of the Buyers has full corporate power and authority to execute and deliver this Agreement and each of the Related Agreements to which it is a party and to consummate the transactions contemplated hereby and thereby. The execution and delivery by each of the Buyers of this Agreement and each of the Related Agreements to which it is a party and the consummation of the transactions contemplated hereby and thereby have been duly and validly authorized by all necessary action on the part of each of the Buyers. Each of the Buyers has duly and validly executed and delivered this Agreement and, at or prior to the Closing, shall duly and validly execute and deliver each of the Related Agreements to which it is a party and, assuming the due authorization, execution and delivery thereof by Olivetti, this Agreement constitutes and each of the Related Agreements to which it is a party, when executed and delivered, shall constitute a legal, valid and binding obligation of each of the Buyers, enforceable against each of the Buyers in accordance with its terms, except 72 81 as such enforceability may be limited by bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other similar laws now or hereafter in effect relating to creditors' rights and by general equitable principles (regardless of whether enforceability is considered in a proceeding in equity or at law). 5.4 CONSENTS; NO VIOLATION. (a) Except as set forth in Schedule 5.4(a) of the Disclosure Schedule delivered by Wang to Olivetti dated as of the date of this Agreement (the "Wang Disclosure Schedule"), there is no requirement applicable to any of the Buyers to give any notice to, to make any filing with, or to obtain any consent or approval of, any Person in connection with the execution and delivery of this Agreement or any of the Related Agreements or the consummation of the transactions contemplated hereby or thereby. (b) Except as set forth in Schedule 5.4(b) of the Wang Disclosure Schedule, there is no requirement applicable to any of the Buyers to make any filing with, or to obtain any permit, authorization, consent or approval of, any Governmental Authority in connection with the execution and delivery of this Agreement or any of the Related Agreements or the consummation of the transactions contemplated hereby or thereby. (c) Except as set forth in Schedule 5.4(c) of the Wang Disclosure Schedule, neither the execution and delivery of this Agreement or any of the Related Agreements to which any of the Buyers is a party nor the consummation of the transactions contemplated hereby or thereby will (i) conflict with or result in a breach of any provision of the certificate of incorporation or by-laws of any of the Buyers, (ii) result in a breach of or default under (or give rise to any right of termination, cancellation or acceleration under) any of any note, bond, mortgage, indenture, license, agreement, lease or other similar instrument or obligation to which any of the Buyers is a party or by which their respective properties or assets may be bound, except for such breaches or defaults (or rights of termination, cancellation or acceleration) as to which requisite consents have been or, on or prior to the Closing, shall have been obtained or (iii) violate any order, judgment, writ, injunction, decree, statute, rule or regulation applica- 73 82 ble to any of the Buyers or any of their respective assets or properties. 5.5 REPORTS. Since June 30, 1996, Wang has filed all required forms, reports and documents with the SEC (as defined in Section 12.11) required to be filed by it pursuant to the Securities Act or the Exchange Act (as defined in Section 12.11), all of which complied at the time of filing in all material respects with all then applicable requirements of the Securities Act or the Exchange Act. Schedule 5.5 of the Wang Disclosure Schedule lists all such forms, reports or documents, complete and correct copies of which have previously been furnished to Olivetti. None of such forms, reports or documents, including, without limitation, any financial statements or schedules included therein, at the time filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. 5.6 FINANCIAL STATEMENTS. The balance sheets and financial statements included in the reports and other documents referred to in Section 5.5 fairly present the financial position of Wang as of the dates therein indicated and the results of Wang's operations for the periods then ended and have been prepared in conformity with U.S. GAAP applied on a consistent basis. 5.7 POLITICAL PAYMENTS. No offer, payment, gift, promise to pay or give, or authorization of the payment or giving of any money or anything of value has been made by or on behalf of Wang, either directly or through any intermediary, to any Official of any Governmental Authority, or to any political party or Official thereof, or to any candidate for governmental or political office, for the purpose of affecting or influencing any act or decision of such person or inducing such person to use his influence to affect or influence any act or decision of any Governmental Authority in order to assist Wang in obtaining or retaining business for or with, or directing business to, any person. Wang has not received any communication (written or oral), whether from a Governmental Authority, competitor, employee or otherwise, alleging that Wang has engaged in any action that would be inconsistent with the representations and 74 83 warranties set forth in this Section 5.7. Wang has delivered or otherwise made available for inspection to Olivetti, true, complete and correct copies of any and all reports, studies, analyses, or other writings regarding any audits, inquiries, investigations, reviews or other evaluations that have been conducted by or on behalf of Wang or its Board of Directors with respect to the possible occurrence of any action that would be inconsistent with the representations and warranties set forth in this Section 5.7. 5.8 LITIGATION. (a) Except as set forth in Schedule 5.8(a) of the Wang Disclosure Schedule, there is no action, suit, proceeding or arbitration, or (to the best knowledge of Wang) no inquiry, grievance or investigation, pending (or, to the best knowledge of Wang after due inquiry, threatened) by or before any court or governmental or other regulatory or administrative agency or commission involving Wang involving an amount in excess of U.S. $500,000 or which, in the aggregate, would have or result in a material adverse effect on or change in the business, assets, properties, liabilities, results of operations or condition (financial or otherwise) of Wang and its subsidiaries taken as a whole. (b) Except as set forth in Schedule 5.8(b) of the Wang Disclosure Schedule, there is no action, suit, proceeding or arbitration, or (to the best knowledge of Wang) no inquiry, grievance or investigation, pending (or, to the best knowledge of Wang after due inquiry, threatened) by or before any court or governmental or other regulatory or administrative agency or commission which questions or challenges the validity of this Agreement or any of the Related Agreements to which Wang is a party or any action taken or to be taken by Wang pursuant to this Agreement or any of the Related Agreements to which Wang is a party or in connection with the transactions contemplated hereby or thereby and Wang does not know or have reason to know of any valid basis for any such action, suit, inquiry, grievance, proceeding, arbitration or investigation. 5.9 BROKERS AND FINDERS. Except for Greenhill & Co., LLC, which is serving as financial advisor to, and whose fees will be paid by, Wang, Wang is not obliged to pay, and has not retained any broker or finder or other person who is entitled to, any broker's or 75 84 finder's fee based upon any agreement or undertaking made by Wang in connection with this Agreement or any Related Agreements to which it is a party or the transactions contemplated hereby or thereby. 5.10 LETTER CONCERNING FINANCING. Wang has previously delivered to Olivetti a true, complete and correct copy of a letter from Bankers Trust Company to Wang, dated February 20, 1998, concerning the financing for the transactions contemplated by this Agreement and related financing, and, as of the date hereof, such letter has not been withdrawn or modified in writing. 5.11 NET OPERATING LOSS. Based solely on the cumulative owner shifts of which Wang is aware as of the date of this Agreement, Wang has not been subject to an "ownership change" (as defined in Section 382(g) of the Code) which would limit the use of its United States net operating loss ("NOL") under Section 382 of the Code. Based solely on the cumulative owner shifts of which Wang is aware as of the date of this Agreement, the issuance of the Wang Shares pursuant to Section 2.1(b)(ii) herein will not result in an "ownership change" under Section 382(g) of the Code. 5.12 ABSENCE OF ADVERSE CHANGE. Since December 31, 1997 (and excluding any effects of the transactions contemplated hereby), Wang and its subsidiaries, taken as a whole, have not suffered any material adverse change in their business, assets, properties, liabilities, results of operations or condition (financial or otherwise). 5.13 DISCLOSURE. No representations or warranties by Wang in this Agreement or in any Related Agreement to which Wang is a party and no statement contained in the financial statements referred to in Section 5.6 or the Wang Disclosure Schedule contain (or, with respect to any of the foregoing which are completed, amended or supplemented after the date hereof, will contain) any untrue statement of material fact or omit (or, with respect to any of the foregoing which are completed, amended or supplemented after the date hereof, will omit) to state any material fact necessary, in light of the circumstances under which it was made, in order to make such representation, warranty or statement not misleading. 76 85 ARTICLE VI CERTAIN COVENANTS, AGREEMENTS AND --------------------------------- REPRESENTATIONS AND WARRANTIES OF THE PARTIES --------------------------------------------- 6.1 CONDUCT OF BUSINESS PENDING THE CLOSING. (a) Except as otherwise expressly provided in this Agreement or in any Related Agreement, or as expressly required to consummate the transactions contemplated hereby or thereby, during the period from the date of this Agreement through the Closing Date, Olivetti shall cause each of Olsy, Olsy Japan, Olsy Brazil and the Controlled Subsidiaries to conduct its business in the same manner as such businesses have been conducted prior to the date hereof. (b) Except as otherwise expressly provided in this Agreement or in any Related Agreement, or as expressly required to consummate the transactions contemplated hereby or thereby, during the period from the date of this Agreement through the Closing Date, without the prior written consent of Wang to be provided in accordance with Section 6.1(g), Olivetti shall not, shall not cause and shall not permit: (i) Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary to amend their respective certificates or articles of incorporation, memoranda or articles of association or by-laws (or other organizational documents), except as required to capitalize Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary in accordance with the laws of their jurisdiction of incorporation; (ii) Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary to (aa) issue, sell, deliver, transfer or redeem any of its capital stock or other ownership interest or issue or sell any securities convertible into, or options with respect to, or warrants to purchase or rights to subscribe to, any of its capital stock or other ownership interest, (bb) organize any new subsidiary or (cc) take any action that would change the organizational structure of Olsy, Olsy Japan, Olsy Brazil and the 77 86 Controlled Subsidiaries from that set forth on Schedule 4.2(a) of the Olivetti Disclosure Schedule; (iii) Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary to effect any recapitalization, reclassification, stock dividend, stock split or like change in capitalization; (iv) Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary to sell, transfer, convey, assign, deliver or otherwise dispose of any assets, properties, Contracts, Intellectual Property, rights, privileges, franchises, operations or business (real, personal or mixed, tangible or intangible) to Olivetti or any Olivetti Affiliate, except in exchange for goods or services pursuant to existing contractual relationships and in compliance with the same; (v) Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary (aa) except in exchange for goods or services pursuant to existing contractual relationships and in compliance with the same, to purchase or otherwise acquire any assets, properties, rights, privileges, franchises, operations or business (real, personal or mixed, tangible or intangible) from, (bb) to loan or advance any amount to or (cc) to amend or enter into any new agreement or other arrangement with, Olivetti or any Olivetti Affiliate; (vi) Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary to declare, pay or set aside for payment any dividend or other distribution (whether in cash, stock or property or any combination thereof); (vii) Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary, except in the ordinary course of business and consistent with past practice, to sell, transfer, convey, assign, deliver or otherwise dispose of any assets, properties, rights, privileges, franchises, operations or business (real, personal or mixed, tangible or intangible); (viii) Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary to (aa) purchase or other- 78 87 wse acquire any capital stock, assets, properties, rights, privileges, franchises, operations or business (real, personal or mixed, tangible or intangible) of, or any other ownership interest in, any Person, except such of the foregoing as are utilized in the ordinary course of their respective business consistent with past practice, (bb) enter into any partnership, joint venture, strategic alliance or sharing of revenues, profits, losses, costs or liabilities with any Person which would be required to be disclosed pursuant to Section 4.14(b)(x) or (cc) enter into any agreement or other arrangement relating to the development of Software requiring 1,000 or more man hours; (ix) Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary to (aa) borrow any funds other than in the ordinary course of business consistent with past practice or (bb) incur, assume or become subject to, whether directly or by way of guarantee or otherwise, any liability or obligation (whether reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured or unsecured), except liabilities and obligations incurred in the ordinary course of business and consistent with past practice; (x) Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary, except in the ordinary course of business and consistent with past practice, to pay, discharge or satisfy any liability or obligation (whether reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured or unsecured); (xi) Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary to permit or allow any of their respective assets, properties, rights, privileges, franchises, operations or business (real, personal or mixed, tangible or intangible) to be subjected to any Lien other than (aa) Liens that will be released or discharged at or prior to Closing, (bb) Liens for Taxes not yet due or delinquent or being contested in good faith by appropriate proceedings or (cc) statutory Liens arising in the 80 88 ordinary course of business by operation of law (including mechanic's, workmen's or warehousemen's Liens); (xii) Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary to write down or write up the value of any assets or write off as uncollectible any trade accounts receivable; (xiii) Olivetti (with respect to Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary), Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary to make any change in accounting methods, principles or practices; (xiv) Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary to make any individual expenditure or commitment for inventory (including consumable spares) in excess of U.S. $500,000 or make aggregate expenditures and commitments for inventory or spares in excess of U.S. $5,000,000; (xv) Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary to make any individual expenditure or commitment for additions to property, plant or equipment (including repairable spares) in excess of U.S. $500,000 or make aggregate expenditures and commitments for additions to property, plant or equipment in excess of U.S. $5,000,000; (xvi) Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary (aa) to dispose of any rights to the use of any Intellectual Property or dispose of or disclose to any person any trade secret, formula, process or know-how not theretofore a matter of public knowledge, except in accordance with existing contractual commitments disclosed in the Olivetti Disclosure Schedule or in the ordinary course of business consistent with past practice or (bb) to permit to lapse any rights to use any Intellectual Property; (xvii) Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary to sell, transfer, convey, assign, deliver or otherwise dispose of any assets, properties, rights, privileges, franchises, operations or business (real, personal or mixed, tangible 81 89 or intangible) to, or to purchase or otherwise acquire any of the foregoing from, to pay, loan or advance any amount to, or to enter into any agreement or other arrangement with, any officer or director of Olivetti, Olsy, Olsy Japan, Olsy Brazil, any Subsidiary, any Olsy Japan Subsidiary or any Affiliate of Olivetti or any Associate of any such officer or director; (xviii) Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary to change any of the banking or safe deposit arrangements; (xix) Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary to grant or extend any power of attorney to any Person (other than full time employees of Olsy, Olsy Japan, Olsy Brazil or a Controlled Subsidiary or attorneys engaged by Olsy, Olsy Japan, Olsy Brazil or a Controlled Subsidiary) or act as guarantor, surety, co-signer, endorser, co-maker, indemnitor or otherwise in respect of the obligation of any Person other than (aa) Olsy, Olsy Japan, Olsy Brazil or a Controlled Subsidiary or (bb) a supplier of products, services or support to customers of Olsy, Olsy Japan, Olsy Brazil or a Controlled Subsidiary in the ordinary course of business consistent with past practice; (xx) Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary to permit any of its current insurance (or reinsurance) policies to be cancelled or terminated or any of the coverage thereunder to lapse, unless simultaneously with such cancellation, termination or lapse, replacement policies providing coverage equal to or greater than coverage under those policies cancelled, terminated or lapsed are in full force and effect other than in the ordinary course of business consistent with past practice; (xxi) Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary to increase in any manner the compensation of any of its directors, officers or employees (including any such increase under any Plan), except such increases required to comply with applicable law, any Plan or any applicable collective bargaining agreement; 81 90 (xxii) Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary to hire any employees of Olivetti or any Olivetti Affiliate or Olivetti or any Olivetti Affiliate to hire any employees of Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary; (xxiii) Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary, except in the ordinary course of business consistent with past practice, to hire any additional employees or terminate the employment of any existing employees; (xxiv) Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary to (aa) amend, terminate or create any Plan or (bb) enter into any collective bargaining agreement; (xxv) Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary, except in the ordinary course of business and consistent with past practice, to (aa) make any bid or proposal for, or enter into any agreement, contract or commitment to, provide products, service or support to customers or (bb) accept any bid or proposal from, or enter into any agreement, contract or commitment with, any supplier; (xxvi) Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary to settle any litigation set forth in Schedule 4.23(a) of the Olivetti Disclosure Schedule without Wang's prior written consent, which shall not be unreasonably withheld; (xxvii) Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary to give any warranty or representation specifically with respect to Year 2000 or eurocompliance; or (xxviii) Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary to agree to do any of the foregoing. (c) Except as otherwise expressly provided in this Agreement or in any Related Agreement, or as expressly required to consummate the transactions 82 91 contemplated hereby or thereby, during the period from the date of this Agreement through the Closing Date, Olivetti shall and shall cause each of Olsy, Olsy Japan, Olsy Brazil and the Controlled Subsidiaries to use its commercially reasonable best efforts to preserve its corporate existence and business relationships intact, to keep available to Wang its officers and key employees and to preserve for Wang its relationships with employees, licensors, suppliers, distributors, customers and others having business relations with it, provided that Wang acknowledges that the transactions contemplated by this Agreement and the Related Agreements may impact relationships with the foregoing. (d) During the period from the date of this Agreement through the Closing Date, neither Olivetti, Olsy, Olsy Japan nor any Controlled Subsidiary shall do any act or omit to do any act which act or omission would cause a breach of any of the representations and warranties or covenants or agreements made by Olivetti in this Agreement. (e) During the period from the date of this Agreement through the Closing Date, Olivetti shall and shall cause each of Olsy, Olsy Japan, Olsy Brazil and the Controlled Subsidiaries to continue to generate internal reports on the businesses of each of Olsy, Olsy Japan, Olsy Brazil and the Controlled Subsidiaries in the ordinary course of business consistent with past practice and to provide copies thereof to Wang promptly after the generation thereof. Not later than February 28, 1998, Olivetti shall prepare and deliver (or cause to be prepared and delivered) to Wang an unaudited combined profit and loss statement for Olsy and the Subsidiaries and Olsy Japan and a report on the combined net financial position of Olsy and the Subsidiaries, Olsy Japan and Olsy Brazil for the twelve month period ended December 31, 1997, in each case, reflecting the best estimate of the senior management of Olivetti, Olsy, Olsy Japan, Olsy Brazil and the Controlled Subsidiaries as of the date thereof. (f) During the period from the date of this Agreement through the Closing Date, (i) Olivetti shall and shall cause each of Olsy, Olsy Japan, Olsy Brazil and the Controlled Subsidiaries to strictly adhere to Italian GAAP and OLGA as selected and applied in the preparation of the 9/30/97 Italian GAAP Financial State- 83 92 ents and (ii) except as otherwise provided in this Agreement or any Related Agreement, Olivetti shall not, and shall cause each of Olsy, Olsy Japan, Olsy Brazil and the Controlled Subsidiaries not to, make any change in any policy or practice relating to non-cash balance sheet accruals or adjustments. (g) Not later than two Business Days after the date hereof, each of Olivetti and Wang shall designate two representatives to address matters arising under Section 6.1(b) (respectively, the "Olivetti Interim Operating Representatives" and the "Wang Interim Operating Representatives") and agree to protocols for the communications contemplated by this Section 6.1(g). In the event that Olivetti desires to cause Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary to take any action which requires the consent of Wang pursuant to Section 6.1(b), an Olivetti Interim Operating Representative shall deliver a notice containing a description of the proposed action and the rationale therefor to the Wang Interim Operating Representatives at the address set forth in and in accordance with the provisions of Section 12.3. Within five Business Days following the receipt of such notice, a Wang Interim Operating Representative shall deliver a notice to an Olivetti Interim Operating Representative containing either Wang's consent to such proposed action or rationale for not consenting to such proposed action. If a Wang Interim Operating Representative does not deliver such notice within such period, Wang shall be deemed to have consented to such action. (h) Notwithstanding anything in this Section 6.1 to the contrary, Olivetti shall, per Wang's consent prior to the date hereof, cause (i) Olivetti Belgium SA/NV to sell the 24% interest held in the capital of Infotechnique S.A. for approximately Luxembourg Fl 70,000,000 (with the proceeds of such sale remaining with Olsy) and (ii) Olsy to subscribe for its pro-rata share of the capital increase resolved upon by the shareholders of Oliricerca to cover 1997 losses. 6.2 NONSOLICITATION. Neither Olivetti, any Affiliates of Olivetti nor any directors, officers or employees of Olivetti or any such Affiliate shall, and Olivetti shall use its best efforts to cause its and any such Affiliate's investment bankers not to, directly or indirectly, (a) (i) initiate contact with, solicit or 84 93 encourage any inquiries or proposals by, (ii) enter into any discussions or negotiations with, (iii) disclose, directly or indirectly, any information not customarily disclosed concerning the Business, Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary to or (iv) afford any access to Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary or any properties, books and records relating to the Business or any of the foregoing to any Person in connection with any possible proposal regarding a sale or transfer of all or any portion of or any merger involving (or any similar transaction involving) the assets, stock or business of Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary or (b) enter into any agreement with any Person with respect to any such transaction. Olivetti shall notify Wang immediately if any discussions or negotiations are sought to be initiated, any inquiry or proposal is made or any such information is requested, with respect to any such proposal, or if any such proposal is received or indicated to be forthcoming. If Olivetti, any of its Affiliates, any of the directors, officers or employees of Olivetti or any of its Affiliates or any of its or any such Affiliate's investment bankers takes any action prohibited by this Section 6.2, then Olivetti shall reimburse Wang for one-half of the documented, external fees, costs and expenses incurred by Wang in connection with the transactions contemplated by this Agreement including, without limitation, fees, costs and expenses of investment bankers, accountants, attorneys and other advisors and potential financial sources and their advisors and travel expenses of Wang personnel (but excluding the time of such personnel) (collectively "Wang Transaction Expenses"), by wire transfer of immediately available funds to an account designated by Wang. Such reimbursement will be made not later than ten Business Days after the date on which such action was taken. In addition to the right to reimbursement provided for in this Section 6.2, Wang shall have all other legal and equitable remedies as may be available to it, with respect to any action taken by Olivetti, any of its Affiliates, any of the directors, officers or employees of Olivetti or any of its Affiliates or any agent or representative of Olivetti or any of its Affiliates prohibited by this Section 6.2 (including, without limitation, the right to initiate arbitration pursuant to Section 12.12 with respect thereto). 85 94 6.3 FULL ACCESS. (a) From the date of this Agreement to the Closing Date, Olivetti shall and shall cause each of Olsy, Olsy Japan, Olsy Brazil and the Controlled Subsidiaries to (i) afford to Wang and its authorized representatives reasonable access (including the time thereof) to all books, records, plants, offices, warehouses and other facilities and properties of the Business, Olsy, Olsy Japan, Olsy Brazil and each Controlled Subsidiary and their respective officers and managers, (ii) permit Wang and its authorized representatives to make such inspections thereof as Wang may reasonably request (including the time thereof) and (iii) cause their officers and managers (and, where appropriate their financial, legal, accounting or other advisory firms) to furnish Wang with such financial and operating data and other information (which is not duplicative of the reports delivered by Olivetti to Wang pursuant to Section 6.1(e)) with respect to the Business, Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary as Wang may from time to time reasonably request. (b) From the date of this Agreement to the Closing Date, Wang shall (i) afford to senior officers of the Olivetti group reasonable access (including the time thereof) to its senior officers responsible for finance, legal, human resources and business development and cause such finance, legal, human resources and business development officers to furnish such senior officers of the Olivetti group with such financial and operating data and other information (which is not duplicative of the reports delivered by Wang to Olivetti pursuant to Section 6.10) with respect to, and to respond to questions concerning, Wang as they may from time to time reasonably request or ask and (ii) afford to Olivetti's legal counsel referred to in Section 12.3 reasonable access (including the time thereof) to the so-called data room established in connection with the transactions contemplated by this Agreement. (c) No investigation by, or furnishing of information to, Wang shall affect the right of Wang to rely on the representations, warranties, covenants and agreements of Olivetti set forth herein (including, without limitation, Article IV), and no investigation by, or furnishing of information to, Olivetti shall affect the right of Olivetti to rely on the representations, 86 95 warranties, covenants and agreements of Wang set forth herein (including, without limitation, Article V). 6.4 SUPPLEMENTS TO DISCLOSURE SCHEDULES. (a) From time to time prior to the Closing, Olivetti shall promptly (i) supplement or amend the Olivetti Disclosure Schedule with respect to (aa) any matter which is required to be set forth or described in the Olivetti Disclosure Schedule as of the date hereof of which Olivetti becomes aware after the date hereof or (bb) any matter hereafter arising which, if existing or occurring on the date hereof, would have been required to be set forth or described in the Olivetti Disclosure Schedule and (ii) deliver a copy of such supplement or amendment to Wang. No supplement or amendment of the Olivetti Disclosure Schedule made pursuant to this Section 6.4(a) shall be deemed to cure any breach of any representation or warranty made by Olivetti unless Wang specifically agrees thereto in writing. (b) From time to time prior to the Closing, Wang shall promptly (i) supplement or amend the Wang Disclosure Schedule with respect to (aa) any matter which is required to be set forth or described in the Wang Disclosure Schedule as of the date hereof of which Wang becomes aware after the date hereof or (bb) any matter hereafter arising which, if existing or occurring on the date hereof, would have been required to be set forth or described in the Wang Disclosure Schedule and (ii) deliver a copy of such supplement or amendment to Olivetti. No supplement or amendment of the Wang Disclosure Schedule made pursuant to this Section 6.4(b) shall be deemed to cure any breach of any representation or warranty made by Wang unless Olivetti specifically agrees thereto in writing. 6.5 NON-GOVERNMENTAL CONSENTS. (a) Each of Wang and Olivetti shall use its respective commercially reasonable best efforts to give or make or cause to be given or made in a timely manner all notices to and filings with, and to obtain or cause to be obtained, prior to Closing, all authorizations, consents or approvals of, all Persons or Governmental Authority (in its capacity as a customer of Olsy, Olsy Japan, Olsy Brazil or a Controlled Subsidiary) required to be given, made or obtained by it (or any of its Affiliates) in connection with the execution and delivery of this Agreement or any 87 96 of the Related Agreements or the consummation of the transactions contemplated hereby or thereby. In obtaining any authorization, consent or approval of any Person or Governmental Authority (in its capacity as a customer of Olsy, Olsy Japan, Olsy Brazil or a Controlled Subsidiary) required to be given, made or obtained by Olivetti (or any of its Affiliates) in connection with the execution and delivery of this Agreement or any Related Agreement or the consummation of the transactions contemplated hereby or thereby, Olivetti (i) shall submit to such Person or Governmental Authority the standard form attached as Exhibit 11 hereto and shall not agree to any material modification thereof without Wang's prior consent, which shall not be unreasonably withheld, and (ii) shall not agree to any modification of any commercial or economic term of any Contract between Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary and such Person or Governmental Authority or the assumption by Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary of any liability or obligation, without Wang's prior written consent. (b) Notwithstanding anything herein to the contrary, if (i) the approval of the Board of Directors of Olsy Japan and (ii) the consent of Toshiba Corporation under the Shareholders Agreement dated May 13, 1985 required in connection with the consummation of the transactions contemplated hereby (collectively, the "Olsy Japan Consents") are not all obtained prior to Closing, (aa) the delivery of the certificate or certificates representing the Olsy Japan Shares provided for in Section 3.2(a) shall be delayed until the earlier of (x) the date all of the Olsy Japan Consents are obtained or (y) the date six months after the Closing Date (the earlier of (x) and (y) being referred to herein as the "Olsy Japan Delayed Date"), (bb) 71,200,000,000 Italian lira of the Cash Portion of the Purchase Price shall be placed in escrow until the Olsy Japan Delayed Date and (cc) Section 6.1 shall continue to apply to Olsy Japan until the Olsy Japan Delayed Date. If all of the Olsy Japan Consents are not obtained by the date six months after the Closing Date, (i) Olivetti shall retain the certificate or certificates representing the Olsy Japan Shares and (ii) the 71,200,000,000 Italian lira in escrow shall be returned to Wang (together with all interest thereon). 88 97 (c) Notwithstanding anything herein to the contrary, if the consents of Bull S.A. under the Shareholders Agreement dated October 10, 1989 between Olivetti and Bull S.A., Master Agreement dated December 20, 1985 between Olivetti and Bull S.A. and Shareholders Agreement dated December 20, 1985 between Olivetti and Bull S.A. required in connection with the consummation of the transactions contemplated hereby (collectively the "Bull Consents") are not obtained prior to Closing, (i) Olivetti shall cause Olsy or a Controlled Subsidiary to transfer all the outstanding shares of SIAB S.A. to Olivetti or an Olivetti Affiliate for an amount in cash equal to the net book value thereof at the time of such transfer, (ii) Olivetti and Wang shall continue to use their respective commercially reasonable best efforts to obtain the Bull Consents, and (iii) Wang and Olivetti shall enter into an arrangement (such as a pledge or usufruct of such shares) providing Wang with control (including, without limitation, the economic benefit thereof) over SIAB S.A. as nearly as practicable equal to what Wang would have had if SIAB S.A. remained a Controlled Subsidiary until the Bull Consents are obtained. When the Bull Consents are obtained, Olivetti shall transfer all the outstanding shares of SIAB S.A. to Olsy for an amount in cash equal to the amount referred to in clause (i) of the preceding sentence. (d) Notwithstanding anything herein to the contrary, if the consents of the minority shareholders under the Shareholders Agreement for Regulus S.p.A. dated July 28, 1994 as amended by Amendment dated March 11, 1996 by and among Olteco - Fin S.p.A. (predecessor to Olsy S.p.A.) Mr. Dalla Valle, Mr. S. Ghedini, Mr. P. Natali, and Mrs. M. Pasquini required in connection with the consummation of the transactions contemplated hereby (collectively the "Regulus Consents") are not obtained prior to Closing, (i) Olivetti shall cause Olsy or a Controlled Subsidiary to transfer all the outstanding shares of Regulus S.p.A. to Olivetti or an Olivetti Affiliate for an amount in cash equal to the net book value thereof at the time of such transfer, (ii) Olivetti and Wang shall continue to use their respective commercially reasonable best efforts to obtain the Regulus Consents and (iii) Wang and Olivetti shall enter into an arrangement (such as a pledge or usufruct of such shares) providing Wang with ownership and operational control (including, without limitation, the economic benefit 89 98 thereof) over Regulus S.p.A. as nearly as practicable equal to what Wang would have had if Regulus S.p.A. remained a Controlled Subsidiary until the Regulus Consents are obtained. When the Regulus Consents are obtained, Olivetti shall transfer all the outstanding shares of Regulus S.p.A. to Olsy for an amount in cash equal to the amount referred to in clause (i) of the preceding sentence. (e) If the Master Distribution Agreement, dated December 14, 1993, by and between Olsy and Hitachi Data Systems Europe Holdings BV is not renewed and as a result of such nonrenewal Olsy (or a Controlled Subsidiary) terminates all or any portion of the employees of the division known as Olivetti Informatica Centrale, Olivetti shall reimburse Wang for one-half of all amounts associated with the termination of up to 150 of such employees (including without limitation, all termination and incentives payments and reasonable advisory costs with the exception of any TFR severance payment and of any payment on account of unused holidays, thirteenth or fourteenth monthly salaries and reimbursement of expenses). (f) If the Engagement for Purchasing Services dated 1996 between Olivetti France and France Telecom or the Agreement #968004795 dated May 17, 1996 between Olivetti France and La Poste are terminated as a result of the failure to obtain the consents thereunder required in connection with the transactions contemplated hereby, Olivetti shall indemnify Wang against and hold it harmless from the consequences (including, without limitation, lost profits) of such termination. 6.6 GOVERNMENTAL CONSENTS. (a) Each of Wang and Olivetti shall use its respective commercially reasonable best efforts to make or cause to be made in a timely manner all filings with, and to obtain or cause to be obtained, prior to Closing, any permit, authorization, consent or approval of, any Governmental Authority (in their capacity as such) required to be made or obtained by it in connection with this Agreement or any of the Related Agreements or the consummation of the transactions contemplated hereby or thereby not specifically provided for in Section 6.6(b). 90 99 (b) As soon as practicable after the date hereof, Olivetti and Wang will prepare and file (i) any notification or special report with respect to this Agreement and the transactions contemplated hereby required pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"), or any other statute, rule or regulation administered by the Antitrust Division of the United States Department of Justice (the "DOJ") and the Federal Trade Commission (the "FTC") with the DOJ or the FTC, (ii) pre-closing notifications with the Italian Competition Authority, German Federal Cartel Office, Dutch Competition Authority and Australian Foreign Investment Review Board and (iii) all other foreign pre-closing competition filings or notifications, the failure of which to make would have or result in a material adverse effect on either party. Olivetti and Wang shall promptly comply with any request by any such Governmental Authority for additional documents or information and shall use their best efforts to obtain early termination of the waiting period under any of the foregoing. 6.7 BEST EFFORTS. Subject to the terms and conditions of this Agreement, Wang and Olivetti shall use their respective commercially reasonable best efforts to take, or cause to be taken, and to do or cause to be done, all action and all things necessary (including, without limitation, under applicable laws and regulations) to consummate and make effective the transactions contemplated by this Agreement or the Related Agreements as soon as practicable after the date hereof. 6.8 EXPENSES. (a) Except as otherwise provided in Sections 6.2, 6.8(c) or 11.2(c)(i), whether or not the transactions contemplated hereby are consummated, (i) all costs and expenses incurred through the Closing Date by Olivetti, Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary in connection with this Agreement or any Related Agreement and the transactions contemplated hereby or thereby shall be paid by Olivetti and (ii) all costs and expenses incurred through the Closing Date by Wang in connection with this Agreement or any Related Agreement and the transactions contemplated hereby or thereby shall be paid by Wang. (b) All costs and expenses required to be borne by Olivetti pursuant to Article I and those 91 100 costs and expenses incurred by Olivetti, Olsy, Olsy Japan, Olsy Brazil, any Subsidiary or any Olsy Japan Subsidiary in connection with the preparation, delivery and audit of the financial statements referred to in Sections 4.6 or 6.12(c) shall be paid by Olivetti. (c) Olivetti shall pay all expenses associated with actions required to be taken with regard to any credit facility, loan agreement or similar agreement pursuant to Section 1.4(a) which were not completed prior to the Closing and which Wang causes to be taken after the Closing (provided that if Olivetti and Wang mutually agreed in writing pursuant to the proviso to Section 1.4(a) to defer any such action with respect to a particular credit facility, loan agreement or similar arrangement until after the Closing, Wang shall defer such action as so mutually agreed). 6.9 RECORDS; ACCESS. (a) Not later than two Business Days after the date hereof, each of Olivetti and Wang shall designate an appropriate number of representatives (respectively, the "Olivetti Records Representatives" and the "Wang Records Representatives") to: (i) identify all original agreements, documents, books, records and files relating to the Business, Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary (or any Subsidiary or Olsy Japan Subsidiary, if any) or any asset, property, Contract, Intellectual Property, right, privilege, franchise, operation, business, liability or obligation of any of the foregoing which are in the possession of Olivetti or an Olivetti Affiliate (the "Olsy Records") and (ii) prepare copies of any of the Olsy Records which also relate to Olivetti or an Olivetti Affiliate which Olivetti elects to retain. Olivetti and Wang, respectively, shall cause the Olivetti Records Representatives and the Wang Records Representatives to work in a cooperative fashion. As soon as practicable after the Closing (but not later than 90 days thereafter), Olivetti shall deliver the Olsy Records to Olsy. On the Closing Date, Olivetti shall deliver or cause to be delivered to Olsy or a Major Subsidiary the contents of the so-called data rooms established in connection with the transactions contemplated by this Agreement as existing as of the date hereof; Olivetti may copy the contents of such data rooms prior to the delivery thereof. 92 101 (b) After the Closing and upon reasonable notice, Olivetti shall give, or cause to be given, to Wang and its designated representatives access to any agreements, documents, books, records or files containing information concerning Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary (or any Subsidiary or Olsy Japan Subsidiary, if any) or the Drop-Down not delivered pursuant to Section 6.9(a) relating to periods prior to the Closing, and Olivetti shall permit such persons to examine and copy such books, records or files to the extent requested by Wang, at Wang's expense, in connection with tax and financial reporting matters, tax audits or any pending or threatened litigation or other proceeding in which Wang, Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary is involved. After the Closing, Olivetti shall direct the employees of Olivetti and Olivetti Affiliates, upon reasonable notice from Wang or Olsy, to be reasonably available to Wang or Olsy for the purpose of assisting Wang or Olsy in connection with any matter referred to in the preceding sentence (provided that if such assistance requires any such personnel to be absent from their place of employment, Wang or Olsy shall reimburse such personnel's employer for the cost of such absence and any travel costs incurred by such employee in providing such assistance). (c) After the Closing and upon reasonable notice, Wang shall give, or cause to be given, to Olivetti and its designated representatives access to any agreements, documents, books, records and files of Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary (or any Subsidiary or Olsy Japan Subsidiary, if any) relating to periods prior to the Closing, and Wang shall permit such persons to examine and copy such books, records and files to the extent requested by Olivetti, at Olivetti's expense, in connection with tax and financial reporting matters, tax audits or any pending or threatened litigation or other proceeding in which Olivetti is involved and which involves or arises out of the ownership or operation of the Business, Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary by Olivetti. After the Closing, Wang shall direct the employees of Olsy, Olsy Japan, Olsy Brazil and the Controlled Subsidiaries, upon reasonable notice from Olivetti, to be reasonably available to Olivetti for the purpose of assisting Olivetti in connection with any matter referred to in the preceding sentence (provided that if such assistance requires any 93 102 such personnel to be absent from their place of employment, Olivetti shall reimburse such personnel's employer for the cost of such absence and any travel costs incurred by such employee in providing such assistance). (d) Olivetti and Wang acknowledge that in certain circumstances it may be necessary for them and their designated representatives to have access to, and to present to third parties, the originals of the agreements, documents, books, records and files referred to in Sections 6.9(a) or (b) and each shall give, or cause to be given, to the other and its designated representatives access to such originals and, with the written assurance of the other to return such originals, shall permit the other to present such originals to third parties. (e) Olivetti shall retain, and after the Closing Wang shall cause each of Olsy, Olsy Japan, Olsy Brazil and the Controlled Subsidiaries to retain, any agreements, documents, books, records or files relating to the Business, Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary (or any Subsidiary or Olsy Japan Subsidiary, if any) for not less than six years, and Olivetti shall notify Wang, and Wang shall cause each of Olsy, Olsy Japan, Olsy Brazil and the Controlled Subsidiaries to notify Olivetti, not less than 30 days prior to the destruction of any documents, books, records or files. 6.10 DELIVERY OF REPORTS BY WANG. Between the date hereof and the Closing Date, Wang shall deliver to Olivetti promptly after the filing thereof, copies of all forms, reports and documents filed by Wang with the SEC or distributed by Wang to its stockholders, all of which shall comply at the time of filing in all material respects with all then applicable requirements of the Securities Act and the Exchange Act. Prior to the date hereof, Wang has provided Olivetti's previously designated representative with four true, complete and correct copies of the most recent report delivered to Wang's lenders pursuant to Section 7.1 of that certain Credit Agreement among Wang, Bankers Trust, as agent and the other persons named therein on Schedule I, dated August 29, 1996; between the date hereof and the Closing, Wang shall provide Olivetti's previously designated representative with four true, complete and correct copies of all other reports delivered to Wang's lenders pursuant to 94 103 such section. Olivetti shall not permit such representative to distribute such reports or the Financing Plan referred to in Section 9.8, or disclose the contents thereof, to any Person other than the three Olivetti officers previously identified. Olivetti shall not permit any reproduction of all or any portion of any such report. 6.11 FINANCING. (a) From the date of this Agreement to the Closing Date, Olivetti shall and shall cause each of Olsy, Olsy Japan, Olsy Brazil and the Controlled Subsidiaries to (i) afford to financing sources identified by Wang and their officers and authorized representatives reasonable access (including the time thereof) to all books, records, plants, offices, warehouses and other facilities and properties of each of Olsy, Olsy Japan, Olsy Brazil and the Controlled Subsidiaries and their respective officers and managers, (ii) permit such financing sources and their officers and authorized representatives to make such inspections thereof as they may reasonably (including the time thereof) request, (iii) cause their officers and managers (and, where appropriate, their financial, legal, accounting or other advisory firms) to furnish such financing sources with such financial and operating data and other information with respect to the Business, Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary as such financing sources may from time to time reasonably request and (iv) cause the officers and managers of each of Olivetti, Olsy, Olsy Japan, Olsy Brazil and the Controlled Subsidiaries to otherwise assist Wang in arranging financing from such financing sources, including, without limitation, by attending meetings with such financing sources; provided, however, that Wang shall cooperate with Olivetti to minimize any disruption of its business resulting from the foregoing and to endeavor to satisfy any such financing source's request for access to books or records from those contained in the so-called data rooms established in connection with the transactions contemplated by this Agreement. The terms and conditions of arrangements for financing satisfying the condition in Section 9.8 shall permit, as of the Closing, the consummation of the transactions contemplated by this Agreement and the Related Agreements, including without limitation, the payment of the Ancillary Consideration. 95 104 (b) Wang shall use its commercially reasonable best efforts to satisfy the condition in Section 9.8. 6.12 CERTAIN INFORMATION AND FINANCIAL STATEMENTS. (a) Olivetti has previously delivered to Wang a true, complete and correct copy of a reclassified, projected consolidated balance sheet of Olsy, Olsy Japan and certain of the Subsidiaries projected as of December 31, 1997 (the "12/31/97 Projected Balance Sheet"). The 12/31/97 Projected Balance Sheet is attached as Schedule 6.12(a) hereto. Olivetti hereby represents and warrants to Wang that (i) the projected consolidated financial position of Olsy, Olsy Japan and such Subsidiaries presented in the column of the 12/31/97 Projected Balance Sheet entitled "Projected MRP 31/12/1997" reflected the best estimate of the senior management of Olivetti, Olsy, Olsy Japan and such Subsidiaries (which was based on and was consistent with the management reporting package available at that time), as of the date of the preparation of the 12/31/97 Projected Balance Sheet, of the projected consolidated financial position of Olsy, Olsy Japan and such Subsidiaries as of December 31, 1997 and (ii) the pro forma adjustments to the 12/31/97 Projected Balance Sheet reflected on Schedule 6.12(a) fairly reflect the adjustments required to be made to reflect the transactions contemplated by this Agreement and the actions which Olivetti is required to have taken or to cause to be taken pursuant to Section 1.8(a). (b) Olivetti acknowledges that during the course of the negotiation of the transactions contemplated by this Agreement, Olivetti or its advisors have heretofore supplied Wang with a certain book of written documents, the table of contents of which is set forth on Schedule 6.12(b) hereto (the "Information Documents"). Olivetti hereby represents and warrants to Wang that such Information Documents were prepared from time to time: (i) as to the historical data contained therein, on the basis of the information available at Olsy in Ivrea (Italy) or obtained from the controllers of the Controlled Subsidiaries which information was consistent with the books, records and systems of Olsy, Olsy Japan or the Controlled Subsidiaries, as the case may be, and (ii) as to the projected data contained therein, on the basis of then current best estimates of senior management 96 105 of Olivetti, Olsy, Olsy Japan and the Controlled Subsidiaries of the projected performance reflected therein. (c) Not later than April 15, 1998, Olivetti shall prepare and deliver (or cause to be prepared and delivered) to Wang true, complete and correct copies of (i) a consolidated balance sheet of Olsy and the Subsidiaries, a balance sheet of Olsy Japan, a balance sheet of Olsy Brazil and a combined balance sheet of Olsy and the Subsidiaries, Olsy Japan and Olsy Brazil, in each case as of December 31, 1997 (such combined balance sheet being referred to herein as the "12/31/97 Balance Sheet"), a consolidated statement of income of Olsy and the Subsidiaries, a statement of income of Olsy Japan, and a combined statement of income of Olsy and the Subsidiaries and Olsy Japan (the "12/31/97 Income Statement"), in each case for the twelve month period then ended and a consolidated statement of cash flows of Olsy and the Subsidiaries, a statement of cash flows of Olsy Japan and a combined statement of cash flows of Olsy and the Subsidiaries and Olsy Japan, in each case for the twelve month period then ended, all (other than statements of cash flows) audited by Coopers & Lybrand, independent certified public accountants, whose audit report thereon shall be included therein and accompanied by footnotes (collectively, the "12/31/97 Financial Statements") and (ii) a version of the 12/31/97 Balance Sheet reclassified consistent with the 12/31/97 Projected Balance Sheet (the "Reclassified 12/31/97 Balance Sheet"). The 12/31/97 Financial Statements (i) shall give a true and fair view of the consolidated financial position of Olsy and the Subsidiaries, the financial position of Olsy Japan, the financial position of Olsy Brazil and the combined financial position of Olsy and the Subsidiaries, Olsy Japan and Olsy Brazil, in each case as of December 31, 1997, and the consolidated results of operations and cash flows of Olsy and the Subsidiaries, the results of operations and cash flows of Olsy Japan and the combined results of operations and cash flows of Olsy and the Subsidiaries and Olsy Japan, in each case, for the period then ended, and (ii) shall be prepared in accordance with Italian GAAP and OLGA as selected and applied in the preparation of the 9/30/97 Italian GAAP Financial Statements. (d) Not later than 105 days after the Closing Date, Wang shall prepare and deliver (or cause to 97 106 be prepared and delivered) to Olivetti true, complete and correct copies of (i) a consolidated balance sheet of Olsy and the Subsidiaries, a balance sheet of Olsy Japan, a balance sheet of Olsy Brazil and a combined balance sheet of Olsy and the Subsidiaries and Olsy Japan (such combined balance sheet being referred to herein as the "Closing Balance Sheet"), in each case as of (aa) the Closing Date or (bb) if the Closing Date is not a month end, as of the month end immediately preceding the Closing Date (such date being referred to herein as the "Closing Financial Statements Date"), consolidated statements of income of Olsy and the Subsidiaries, a statement of income of Olsy Japan, a statement of income of Olsy Brazil and a combined statement of income of Olsy and the Subsidiaries, Olsy Japan and Olsy Brazil, in each case for the period beginning on January 1, 1998 and ending on the Closing Financial Statements Date (the "Closing Financial Statements Period"), and a consolidated statement of cash flows of Olsy and the Subsidiaries, a statement of cash flows of Olsy Japan, a statement of cash flows of Olsy Brazil and a combined statement of cash flows of Olsy and the Subsidiaries, Olsy Japan and Olsy Brazil, in each case for the Closing Financial Statements Period, all (other than statements of cash flows) audited by Ernst & Young LLP ("Ernst & Young"), independent certified public accountants, whose audit report thereon shall be included therein, and accompanied by footnotes (collectively, the "Closing Financial Statements") and (ii) a version of the Closing Balance Sheet reclassified consistent with the 12/31/97 Projected Balance Sheet (the "Reclassified Closing Balance Sheet"). The Closing Financial Statements (i) shall give a true and fair view of the consolidated financial position of Olsy and the Subsidiaries, the financial position of Olsy Japan, the financial position of Olsy Brazil and the combined financial position of Olsy and the Subsidiaries and Olsy Japan, in each case as of the Closing Financial Statements Date and the consolidated results of operations and cash flows of Olsy and the Subsidiaries, the results of operations and cash flows of Olsy Japan, the results of operations and cashflows of Olsy Brazil and the combined results of operations and cash flows of Olsy and the Subsidiaries, Olsy Japan and Olsy Brazil, in each case, for the Closing Financial Statements Period and (ii) shall be prepared in accordance with Italian GAAP and OLGA as selected and applied in the preparation of the 9/30/97 Italian GAAP Financial Statements, except (aa) if 98 107 such application was improper under Italian GAAP or OLGA or (bb) to the extent that such application was inconsistent. In connection with the preparation of the Closing Financial Statements, (i) if any of the actions required to be taken pursuant to Section 1.8(a) shall not have been taken prior to the Closing Financial Statements Date, Wang shall cause such actions to be taken effective as of the date such actions should have been taken pursuant to Section 1.8(a) and (ii) Wang shall cause all repair costs capitalized by Olsy North America, Inc. not previously reversed and expensed to be reversed and expensed. (e) After the date hereof and through the Closing Date, upon reasonable notice, Olivetti shall give, or cause to be given, to Wang and its representatives access to the books, records, files and personnel of the Business, Olsy, Olsy Japan, Olsy Brazil and the Controlled Subsidiaries for purposes of monitoring the preparation or audit of the 12/31/97 Financial Statements. After the date hereof, upon reasonable notice, Olivetti shall give, or cause to be given, to Wang and its representatives access to the books, records and files of Olivetti (and if still in the possession of Olivetti, of Olsy, Olsy Japan, Olsy Brazil and the Controlled Subsidiaries) relating to any of the financial statements delivered by Olivetti to Wang pursuant to this Agreement and any work papers, audits or reports thereon and all analyses, reports, memoranda and documents relating thereto for purposes of performing its obligations or enforcing its rights under Sections 6.13, 6.14, 6.16, 6.17, 6.18, 6.19, 6.20, 6.21 or 6.22 or with respect to the Earn-Outs. (f) After the Closing and through the date the Closing Financial Statements are delivered pursuant to Section 6.12(d), upon reasonable notice, Wang shall give, or cause to be given, to Olivetti and its representatives access to the books, records, files and personnel of Olsy, Olsy Japan, Olsy Brazil and the Controlled Subsidiaries for purposes of preparing or auditing the 12/31/97 Financial Statements and monitoring the preparation or audit of the Closing Financial Statements. After the Closing, upon reasonable notice, Wang shall give, or cause to be given, to Olivetti and its representatives access to the books, records and files of Olsy, Olsy Japan, Olsy Brazil and the Controlled Subsidiaries 99 108 relating to any of the financial statements delivered by Wang to Olivetti pursuant to this Agreement and any work papers, audits or reports thereon and all analyses, reports, memoranda and documents relating thereto for purposes of performing its obligations or enforcing its rights under Sections 6.13, 6.14, 6.16, 6.17, 6.18, 6.19, 6.20, 6.21 or 6.22 or with respect to the Earn-Outs. 6.13 1997 EBITDA PURCHASE PRICE ADJUSTMENT. (a) Not later than 60 days after the date Olivetti delivers (or causes to be delivered) the 12/31/97 Financial Statements (the "12/31/97 Objection Period"), Wang shall notify Olivetti of any and all objections, if any, to the 12/31/97 Financial Statements (the "12/31/97 Objections"). If Wang fails to notify Olivetti of any 12/31/97 Objections within the 12/31/97 Objection Period, Wang shall be deemed to have accepted the 12/31/97 Financial Statements. If Wang notifies Olivetti of any 12/31/97 Objections within the 12/31/97 Objection Period, Olivetti and Wang shall attempt to resolve such 12/31/97 Objections not later than 30 days after the date Wang notifies Olivetti of such 12/31/97 Objections. If Olivetti and Wang are unable to resolve all such 12/31/97 Objections within such period, either party may submit the unresolved 12/31/97 Objections to arbitration in London, England before three arbitrators, then active certified public accountants, in accordance with the Rules of Arbitration of the International Chamber of Commerce (the "Rules") then in effect as modified herein, as the sole means of resolving such 12/31/97 Objections. Each party shall bear its own costs in any such proceeding, and the expenses of the arbitration tribunal shall be borne by Wang and Olivetti in equal portions. The decision of the arbitrators shall be final and binding upon Wang and Olivetti and may be enforced in any court of competent jurisdiction. To the fullest extent permitted by law, each party to this Agreement irrevocably submits to the jurisdiction of such forum with respect to unresolved 12/31/97 Objections and waives any objection it may have to either the jurisdiction or venue of such forum with respect to unresolved 12/31/97 Objections. If any 12/31/97 Objections are to be submitted to arbitration pursuant to this Section 6.13(a), then each party shall nominate an active certified public accountant knowledgeable in Italian GAAP to serve as its party-appointed arbitrator within ten days of submission or its receipt of notice thereof. The two arbitrators so nomi- 100 109 ated shall mutually nominate a third then active certified public accountant knowledgeable in Italian GAAP within ten days of the nomination of the second arbitrator to serve as the chair of the arbitral tribunal. If any party fails to timely nominate an arbitrator or if the two party-nominated arbitrators fail to timely agree on a third arbitrator, then any party may request that an active certified public accountant be appointed by the International Chamber of Commerce Court of Arbitration within 15 days of such request in accordance with the Rules. The hearing (if any) shall be held, if possible, within 30 days of the confirmation of the appointment of the third arbitrator, and the tribunal shall render its award within 30 days of the conclusion of the hearing or, if there is no hearing, within 30 days after the parties' final submissions to the arbitrators. The parties expressly agree that leave to appeal under Section 45 or 69 of the English Arbitration Act 1996 may not be sought with respect to any question of law arising in the course of the arbitration or with respect to any award made. (b) If the amount of 1997 EBITDA (as defined in Section 6.13(d)) is less than 120,000,000,000 Italian lira, then, not later than (i) if Wang fails to notify Olivetti of any 12/31/97 Objections within the 12/31/97 Objection Period, five days after expiration of the 12/31/97 Objection Period or (ii) if Wang notifies Olivetti of any 12/31/97 Objections within such 12/31/97 Objection Period, five days after the date all such 12/31/97 Objections are resolved (by mutual agreement or arbitration) in accordance with Section 6.13(a) (the later of clause (i) or (ii) being referred to as the "1997 EBITDA Determination Date"), Olivetti shall pay Wang an amount (the "1997 EBITDA Determined Cash Payment Amount") in cash, in immediately available funds, equal to 60,000,000,000 Italian lira minus 4 times the difference between 120,000,000,000 Italian lira and the amount of 1997 EBITDA. If the amount of 1997 EBITDA is equal to or greater than 105,000,000,000 Italian lira, Olivetti shall not be obligated to make any payment to Wang pursuant to this Section 6.13(b). (c) If the amount of 1997 EBITDA is greater than 88,750,000,000 Italian lira, then, effective as of the EBITDA Determination Date, the number of rights shall be adjusted to a number of Rights (the "1997 EBITDA Determined Number of Rights") equal to (i) if the amount 101 110 of 1997 EBITDA is 105,000,000,000 Italian lira or more, 5,000,000 or (ii) if the amount of 1997 EBITDA is less than 105,000,000,000 Italian lira but more than 88,750,000,000 Italian lira, then a number determined by multiplying 5,000,000 by a fraction, the numerator of which equals 65,000,000,000 minus 4 times the difference between 105,000,000,000 Italian lira and the amount of 1997 EBITDA and the denominator of which is 65,000,000,000. If the amount of 1997 EBITDA is equal to or less than 88,750,000,000 Italian lira, the Rights shall become wholly void and of no force or effect. (d) The term "1997 EBITDA" means the sum of (i) the aggregate amount of earnings of Olsy and the Subsidiaries and Olsy Japan, before interest (including securitization and factoring related charges), taxes, depreciation and amortization and excluding any extraordinary items set forth on Schedule 6.13(d), derived from the 12/31/97 Income Statement (as adjusted to reflect the resolution of any 12/31/97 Objections, if any, by mutual agreement or arbitration in accordance with Section 6.13(a)) and (ii) 25,000,000,000 Italian lira of the share capital increase made pursuant to Sections 1.8(a)(v) and 1.8(b). For purposes of determining 1997 EBITDA, repair costs capitalized by Olsy North America, Inc. during the nine month period ended September 30, 1997 shall be reversed and expensed and repair costs of Olsy North America, Inc. for the three month period ended December 31, 1997 shall be expensed. By way of example and solely for illustration purposes, Schedule 6.13(d) hereto illustrates how 1997 EBITDA is derived from the 9/30/97 Italian GAAP Income Statement in accordance with this definition. 6.14 CLOSING BALANCE SHEET PURCHASE PRICE ADJUSTMENT. (a) Not later than 60 days after the date Wang delivers (or causes to be delivered) the Closing Financial Statements (plus a number of days equal to the number of days, if any, in the month of August falling in such period the "Closing Objection Period"), Olivetti shall notify Wang of any and all objections, if any, to the Closing Financial Statements (the "Closing Objections"). If Olivetti fails to notify Wang of any Closing Objections within the Closing Objection Period, Olivetti shall be deemed to have accepted the Closing Financial Statements. If Olivetti notifies Wang of any Closing Objections within the Closing Objection Period, Wang and 102 111 Olivetti shall attempt to resolve such Closing Objections not later than 30 days after the date Olivetti notifies Wang of such Closing Objections. If Wang and Olivetti are unable to resolve all such Closing Objections within such period, either party may submit the unresolved Closing Objections to arbitration in London, England before three arbitrators, then active certified public accountants, in accordance with the Rules then in effect as modified herein, as the sole means of resolving such Closing Objections. Each party shall bear its own costs in any such proceeding, and the expenses of the arbitration tribunal shall be borne by Wang and Olivetti in equal portions. The decision of the arbitrators shall be final and binding upon Wang and Olivetti and may be enforced in any court of competent jurisdiction. To the fullest extent permitted by law, each party to this Agreement irrevocably submits to the jurisdiction of such forum with respect to unresolved Closing Objections and waives any objection it may have to either the jurisdiction or venue of such forum with respect to unresolved Closing Objections. If any Closing Objections are to be submitted to arbitration pursuant to this Section 6.14(a), then each party shall nominate an active certified public accountant knowledgeable in Italian GAAP to serve as its party-appointed arbitrator within ten days of submission or its receipt of notice thereof. The two arbitrators so nominated shall mutually nominate a third then active certified public accountant knowledgeable in Italian GAAP within ten days of the nomination of the second arbitrator to serve as the chair of the tribunal. If any party fails to timely nominate an arbitrator or if the two party-nominated arbitrators fail to timely nominate on a third arbitrator, then any party may request that an active certified public accountant be appointed by the International Chamber of Commerce Court of Arbitration within 15 days of such request in accordance with the Rules. The hearing (if any) shall be held, if possible, within 30 days of the confirmation of the appointment of the third arbitrator, and the tribunal shall render its award within 30 days of the conclusion of the hearing or, if there is no hearing, within 30 days after the parties' final submissions to the arbitrators. The parties expressly agree that leave to appeal under Section 45 or 69 of the English Arbitration Act 1996 may not be sought with respect to any question of law arising in the course of the arbitration or with respect to any award made. 103 112 (b) Not later than (i) if Olivetti fails to notify Wang of any Closing Objections within the applicable Closing Objection Period, five days after expiration of such Closing Objection Period or (ii) if Olivetti notifies Wang of any Closing Objections within such Closing Objection Period, five days after the date all such Closing Objections are resolved (by mutual agreement or arbitration) in accordance with Section 6.14(a) (the later of clauses (i) or (ii) being referred to as the "Closing Balance Sheet Determination Date"), either: (aa) Olivetti shall pay Wang the amount by which the Target Tangible Equity Value (as defined in Section 6.14(d)) exceeds the sum of (x) the Closing Tangible Equity Value (as defined in Section 6.14(d)) and (y) the Closing Tangible Equity Value Adjustment Amount (as defined in Section 6.14(d)); or (bb) Wang shall pay Olivetti the amount by which the sum of (x) the Closing Tangible Equity Value and (y) the Closing Tangible Equity Value Adjustment Amount exceeds the Target Tangible Equity Value. Any payment pursuant to this Section 6.14(b) by Olivetti shall be made in cash first by the escrow agent under the Cash Escrow Agreement to Wang by wire transfer of immediately available funds in escrow in accordance with the Cash Escrow Agreement and, if the amount of such payment exceeds funds in escrow available therefor, by Olivetti to Wang by wire transfer of immediately available funds. Any payment pursuant to this Section 6.14(b) by Wang shall be made in cash by Wang to Olivetti by wire transfer of immediately available funds. (c) Not later than the Closing Balance Sheet Determination Date, Olivetti shall pay Wang (i) the amount, if any, by which the 12/31/97 Net Financial Position was greater than negative 65,000,000,000 Italian lira (meaning there was less than 65,000,000,000 Italian lira in cash) after giving effect to the actions required to be taken pursuant to Sections 1.3(a) or (b) and (ii) an amount equal to the amount of Cash Leakage (as defined in Section 6.14(d)), if any. Any payment pursuant to this Section 6.14(c) by Olivetti shall be made in cash, to the extent any funds remain in escrow under the Cash Escrow Agreement after any payment therefrom pursuant to Section 6.14(b), first by the escrow agent under the Cash Escrow Agreement to Wang by wire transfer of immediately available funds in escrow in accordance with the Cash Escrow Agreement and, if the amount of such payment 104 113 exceeds funds in escrow available therefor, by Olivetti to Wang by wire transfer of immediately available funds. (d) The following terms shall have the following meanings: CASH LEAKAGE. The term "Cash Leakage" means the use of cash (decrease in cash) due to dividends and equity distributions, or payments and loans out of the ordinary course of business as prohibited and not otherwise waived pursuant to Section 6.1 for the Closing Financial Statements Period (as if such Section 6.1 applied throughout the Closing Financial Statements Period); provided that any such use of cash is not captured in the Closing Tangible Equity Value and provided that any loan or purchased asset made other than in the ordinary course of business and not approved in writing by Wang shall be transferred to Olivetti free of charge other than any related expense of transfer. CLOSING TANGIBLE EQUITY VALUE. The term "Closing Tangible Equity Value" means the result obtained by subtracting the amount of "Intangible Assets" shown on the Reclassified Closing Balance Sheet (as adjusted to reflect the resolution of any Closing Objections, if any, by mutual agreement or arbitration in accordance with Section 6.14(a)) from the amount of "Total Shareholders' Equity" shown on the Reclassified Closing Balance Sheet (as adjusted to reflect the resolution of any Closing Objections, if any, by mutual agreement or arbitration in accordance with Section 6.14(a)). CLOSING TANGIBLE EQUITY VALUE ADJUSTMENT AMOUNT. The term "Closing Tangible Equity Value Adjustment Amount" means the amount of the "Loss" (expressed as a positive number) derived from the Closing Financial Statements and the books and records relating thereto (as adjusted to reflect the resolution of any Closing Objections, if any, by mutual agreement or arbitration in accordance with Section 6.14(a)), less the sum of the following (each of which shall be expressed as a positive number and similarly derived): (i) the amortization of intangible assets and the amortization of goodwill for the Closing Financial Statements Period; (ii) any non-recurring loss, expense or provision or non ordinary course of business expense for the Closing Financial Statements Period, including any audit adjustment result- 105 114 ing from the Closing Financial Statements audit that effects shareholders' equity through the income statement, provided that such non-recurring loss, expense or provision or non ordinary course of business expense do not result from any of the actions in accordance with Section 1.8 or Section 6.1(h) or that have not been agreed in writing by Olivetti and Wang; and (iii) the amount, if any, by which the 1998 Operating Loss (as defined in this Section 6.14(d)) exceeds 65,000,000,000 Italian lira. By way of example and solely for illustration purposes, Schedule 6.14(d) hereto sets forth some computations (using hypothetical numbers) of the Closing Tangible Equity Value Adjustment Amount in accordance with this definition and based on the assumption that the "Tangible Equity Value" as of 12/31/97 is equal to the Target Tangible Equity Value. 12/31/97 NET FINANCIAL POSITION. The term "12/31/97 Net Financial Position" means the amount, positive or negative, of "Total Net Debt" shown on the Reclassified 12/31/97 Balance Sheet (as adjusted to reflect the resolution of any EBITDA Objections, if any, by mutual agreement or arbitration in accordance with Section 6.13(a)) and, if negative, means there is net cash and, if positive, means there is net debt. 1998 OPERATING LOSS. The term "1998 Operating Loss" means the amount of Income/(Loss) for the Closing Financial Statements Period derived from the Closing Financial Statements and the books and records relating thereto (as adjusted to reflect the resolution of any Closing Objections, if any, by mutual agreement or arbitration in accordance with Section 6.14(a)) before the following (each of which shall be similarly derived): (i) taxes for the Closing Financial Statements Period; (ii) minority interest for the Closing Financial Statements Period; (iii) accounting adjustments relating to decisions made by Wang after the Closing; (iv) any closing costs associated with the transactions provided for in Sections 1.9 and 1.10; (v) goodwill amortization for the Closing Financial Statements Period; (vi) non-recurring income, gain, loss, expense or provision for the Closing Financial Statements Period, including any audit adjustment resulting from the Closing Financial Statements audit that effects shareholders' equity through the income statement; and (vii) net financial charges for the Closing Financial Statements Period. 106 115 TARGET TANGIBLE EQUITY VALUE. The term "Target Tangible Equity Value" means 361,700,000,000 Italian lira. (e) For purposes of the adjustments to the Purchase Price set forth in this Section 6.14, no effect shall be given to (i) any amount which effected the adjustment to the Purchase Price set forth in Section 6.13 if the Purchase Price was adjusted pursuant thereto or (ii) any amount covered by the more specific provisions of Sections 6.18, 6.19, 6.20 or 6.21. 6.15 OLSY GERMANY ASBESTOS CLEAN-UP. After the Closing and while Wang has authority to do so, Wang shall not permit Olsy Germany to change the current scope of work of, or the current contractor administering, the clean-up referred to in Section 10.2(a)(vi) without Olivetti's consent, which consent shall not be unreasonably withheld. If the clean-up referred to in Section 1.8(a)(vii) is completed in accordance with all Environmental Laws for less than the restructuring fund therefor referred to in Section 1.8(a)(vii), Wang shall cause Olsy Germany to refund the difference to Olivetti if Wang then has authority to do so. 6.16 GUARANTEES. (a) After the Closing, Wang shall use its commercially reasonable best efforts to replace financial guarantees of Olivetti with respect to the business of Olsy, Olsy Japan, Olsy Brazil or any Subsidiary, including, without limitation, financial guarantees with respect to VAT, customs, import/export, rent deposits or insurance, to be replaced with a financial guarantee of Wang or Affiliate of Wang. Wang shall indemnify Olivetti for any amounts paid by Olivetti after the Closing (other than with respect to events which occurred prior to the Closing and of which Olsy, Olsy Japan, Olsy Brazil or any Subsidiary had notice) under any such financial guarantees prior to the replacement thereof pursuant to this Section 6.16(a). (b) Olivetti hereby represents and warrants to Wang that (i) Schedule 6.16(b) hereto sets forth all bid, performance, advance payment or residual bonds (the "Customer Bonds") issued by Olivetti with respect to (aa) any Customer Contract which as of the date hereof, has not been fully performed by Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary and under 107 116 which any product, service or support provided after the date hereof can be invoiced in accordance with such Customer Contract, (bb) any Customer Contract with respect to which, as of the date hereof, there is any trade receivable on the books and records of Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary, (cc) any Customer Contract which, as of the date hereof, has not been fully performed by Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary with a customer to whom Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary is providing invoiceable products, services or support, (dd) any Customer Contract which is being performed in substantial part by a subcontractor of Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary or (ee) Customer Contracts or tender mutually agreed by Olivetti and Wang prior to the date hereof and (ii) Schedule 6.16(b) does not set forth any Customer Bond issued with respect to any Customer Contract or tender with respect to which any action, suit or proceeding is pending (or to the Best Knowledge of the Olivetti Group, threatened). In reliance on the foregoing representation and warranty, after the Closing, Wang shall indemnify Olivetti if and to the extent any of the Customer Bonds set forth on Schedule 6.16(b) are called after the Closing as a result of any breach (other than a breach which occurred prior to the Closing and of which Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary had notice) by Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary of the Customer Contract with respect to which Olivetti issued any such Customer Bond (provided that the sole and exclusive remedy for Wang for any breach of the foregoing representation and warranty with respect to any particular Customer Bond or Customer Contract shall be that Wang shall be relieved of the foregoing indemnification obligation with respect to such Customer Bond or Customer Contract). Olivetti hereby waives all rights of subrogation or similar rights, whether arising under law or contract (including, without limitation, any counter guarantee given by Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary to Olivetti), with respect to all Customer Bonds issued by Olivetti with respect to the Business, Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary not listed on Schedule 6.16(b) hereto. (c) Olivetti hereby represents and warrants to Wang that (i) Schedule 6.16(c) hereto sets forth all corporate guarantees issued by Olivetti to 108 117 suppliers of Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary and with respect to each such corporate guarantee, the supplier to which it was issued and the amount outstanding thereunder as of December 31, 1997 and (ii) that Schedule 6.16(c) does not set forth any such corporate guarantee with respect to which any action, suit or proceeding is pending (or to the Best Knowledge of Olivetti, threatened). In reliance on the foregoing representation and warranty, after the Closing, Wang shall (i) use its commercially reasonable best efforts to assist Olivetti in obtaining the return of such corporate guarantees and (ii) indemnify Olivetti for any amounts paid by Olivetti after the Closing other than with respect to events which occurred prior to the Closing and of which Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary had notice) under any such corporate guarantees prior to the return thereof pursuant to this Section 6.16(c) (provided that the sole and exclusive remedy for Wang for any breach of the foregoing representation and warranty with respect to any particular corporate guarantee shall be that Wang shall be relieved of the foregoing indemnification obligation with respect to such corporate guarantee). 6.17 CERTAIN EMPLOYEE BENEFIT MATTERS. (a) Olivetti prior to the Closing, and Wang on and after the Closing, shall use their respective best efforts, and shall cause Olsy U.K. Ltd. ("Olsy U.K.") to use its respective best efforts, take all actions necessary or appropriate to (i) cause the trustees of the Olsy U.K. Employees Pension Scheme (the "UK Scheme") to declare a full pension contribution holiday such that, for the period ending on April 1, 2002 (the "Holiday Close Date"), Olsy U.K. will not be required to make any contributions to the UK Scheme and (ii) amend the UK Scheme such that no individual first hired after the Closing Date shall become eligible to participate therein. Olivetti shall promptly reimburse Wang for any contributions required (whether pursuant to applicable law or as may be required by the trustees of the UK Scheme) to be made by Wang or Olsy U.K. to the UK Scheme on or before the Holiday Close Date. Without limiting any other provision of this Section 6.17(a), (i) Wang shall not take any actions during the period ending on the Holiday Close Date which would indicate to the trustees of the U.K. Pension Scheme that (aa) Wang intends to alter the U.K. Pension Scheme in any manner other than as required 109 118 by applicable law, or (bb) the U.K. Pension Scheme should be funded at more than 105% of the Minimum Funding Requirement (as defined in applicable law), (ii) if Wang elects to terminate or wind up the U.K. Pension Scheme, Olivetti shall have no further liability with respect to such scheme, and (iii) if Wang elects to increase benefits under the U.K. Pension Scheme in any manner, the cost of such increased benefits shall be borne solely by Wang. (b) Prior to the Closing, Olivetti shall assume all liabilities and obligations of Olsy or any Controlled Subsidiary in Italy arising under or pursuant to or otherwise relating to the FASIDO, FSIO-SI and FSIO-SC plans of Olsy or any Controlled Subsidiary in Italy (the "Welfare Plans") and shall take all such actions necessary or appropriate to ensure that neither Wang, Olsy nor any Controlled Subsidiary has any liability therefore following the Closing. Without limiting the generality of the foregoing, for so long as Olivetti provides benefits to its Italian employees under the Welfare Plans or other similar plans, Olivetti shall provide benefits to employees and former employees of Olsy or any Controlled Subsidiary in Italy and their respective dependents and beneficiaries (other than any individual (and his or her dependents and beneficiaries) who first becomes employed by Olsy or any Controlled Subsidiary in Italy after the Closing Date) under the Welfare Plans or such other similar Plans, as applicable, which benefits shall not be materially less favorable to the participants therein as those in effect with respect to other participants therein at any relevant time. Wang shall, or shall cause Olsy or any Controlled Subsidiary in Italy to, reimburse Olivetti for the normal contributions incurred by Olivetti in providing such benefits to employees of Olsy or any Controlled Subsidiary in Italy and their dependents and beneficiaries but shall have no obligation to pay any amounts in respect of the benefits provided by Olivetti, the Welfare Plans or such other similar plans to (i) any individual who, at the time such benefits are provided, is a former employee or retiree of Olsy or any Controlled Subsidiary in Italy or (ii) their respective dependents and beneficiaries. The amount required to be reimbursed by Wang pursuant to the preceding sentence shall be determined on the same basis as is applied with respect to other participating employers for the applicable year. 110 119 (c) As soon as practicable after the date hereof, Olivetti shall provide to Wang a complete and accurate list of all active and inactive participants and beneficiaries in the pension plans of any Controlled Subsidiary in Germany, the United Kingdom or Spain and all information required in order for Wang to effectively administer each such plan including, but not limited to, with respect to each such participant and beneficiary, the (i) date of birth, (ii) date of hire, (iii) gender, (iv) pensionable earnings, (v) marital status, (vi) frozen benefit amount (in the case of the frozen pension plans of Controlled Subsidiaries in Germany, the United Kingdom or Spain only) and (vii) date of termination and/or retirement and benefit amounts (in the case of inactive participants and beneficiaries only). (d) Olivetti shall pay to Wang an amount equal to any amounts required to be contributed by Wang, Olsy or any Controlled Subsidiary in Spain to or in respect of the retirement or death benefits of former employees of Controlled Subsidiaries in Spain accrued as of the date hereof. Such payment or payments shall be made no later than the third Business Day preceding the day any such amounts are required to be paid by Wang, Olsy or any Controlled Subsidiary in Spain. 6.18 DETERMINATION OF FUNDING STATUS OF OCJ PENSION PLAN. (a) Olivetti shall promptly reimburse Wang for all amounts paid by Wang, Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary during the period commencing on the Closing Date and ending on December 31, 2000 in respect of benefits accrued under the Olivetti Corporation of Japan Employee Benefit Fund (the "OCJ Pension Plan") as of the Closing Date as described in clause (A)(iii) of the definition of Part I Assets in Section 6.18(b) below. (b) For purposes of this Agreement, the following terms shall have the following meanings: OCJ ASSET REQUIREMENT. The term "OCJ Asset Requirement" means the present value of all benefits, whether or not vested, accrued under the OCJ Pension Plan for each OCJ Designated Employee as of December 31, 2000, determined under U.S. Benefit Accounting Standards. For purposes of the foregoing, (a) all service of the OCJ Designated Employees through the Closing Date, projected 111 120 future increases in remuneration, and cost of living adjustments to pensions shall be taken into account, (b) the actuarial method to be used will be the Projected Unit Credit Method as prescribed in U.S. Benefit Accounting Standards, and (c) the actuarial assumptions to be used shall be the assumptions specified in Schedule 6.18(b). If an actuarial assumption is required but is not specified in Schedule 6.18(b), an assumption proposed by Wang (on a basis which is in accordance with U.S. Benefit Accounting Standards) and consented to by Olivetti, which consent shall not be unreasonably withheld, shall be used. OCJ BENEFIT DEFICIT. The term "OCJ Benefit Deficit" means the excess, if any, of (a) the OCJ Asset Requirement over (b) the fair market value, determined as of December 31, 2000, of the Part I Assets held under the OCJ Pension Plan to the extent such Part I Assets are transferred to or remain with Wang, Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary (or a trust or other funding arrangement to which Wang, Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary is a party) as of such date. OCJ BENEFIT SURPLUS. The term "OCJ Benefit Surplus" means the excess, if any, of (a) the fair market value, determined as of December 31, 2000, of the Part I Assets held under the OCJ Pension Plan to the extent such assets are transferred to or remain with Wang, Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary (or a trust or other funding arrangement to which Wang, Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary is a party) as of such date over (b) the OCJ Asset Requirement; provided however, that the amount taken into account under clause (a) of this definition shall not exceed the OCJ Asset Requirement, except to the extent that Wang could, consistent with applicable law, either withdraw such excess from the OCJ Pension Plan or utilize such excess to reduce the contributions it would otherwise be required to make thereto, in either case, during the five-year period immediately following December 31, 2000. OCJ DESIGNATED EMPLOYEE. The term "OCJ Designated Employee" means an employee of Olivetti, any Affiliate of Olivetti, Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary who will continue as or become an 112 121 employee of Olsy, Olsy Japan, Olsy Brazil or a Controlled Subsidiary as of the Closing and who participates in the OCJ Pension Plan. The term shall also include any other person for whom liabilities under the OCJ Pension Plan are assumed by Wang, Olsy, Olsy Japan, Olsy Brazil or a Controlled Subsidiary (or retained by Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary) as of the Closing. OLIVETTI ACTUARY. The term "Olivetti Actuary" shall mean an actuarial consulting firm selected by Olivetti to perform the functions described in Section 6.18(c). OLIVETTI TAX ADJUSTMENT. The term "Olivetti Tax Adjustment" means the number one (1) minus the highest marginal rate of tax (expressed as a decimal number) actually applicable to the income of Olivetti in its fiscal year in which the payment, if any, required to be made to Olivetti under Section 6.18(d) below is required to be made. PART I ASSETS. The term "Part I Assets" means the excess, if any, of (A) the sum of (i) the assets held under the OCJ Pension Plan as of the Closing Date, (ii) a pro rata portion, determined on a monthly basis (based upon the ratio of the value of the Part I Assets to the value of all assets held under the OCJ Pension Plan) of the income, gains and losses of the OCJ Pension Plan after the Closing Date and prior to January 1, 2001 and (iii) the amount, if any, by which the amount of the contributions made to the OCJ Pension Plan after the Closing Date and prior to January 1, 2001 in respect of individuals who were participants in the OCJ Pension Plan as of the Closing Date exceeds the normal cost funding contributions during such period in respect of individuals who were participants in the OCJ Pension Plan as of the Closing Date (excluding any such amounts attributable to any enhancement of the benefit formula under the OCJ Pension Plan adopted after the Closing Date) over (B) all amounts paid or distributed from the OCJ Pension Plan after the Closing Date and prior to January 1, 2001 in respect of benefits accrued thereunder as of the Closing Date. U.S. BENEFIT ACCOUNTING STANDARDS. The term "U.S. Benefit Accounting Standards" means the U.S. GAAP 113 122 relating to Employee Benefit Plans under FAS 87 and 88, and other relevant principles and, in particular, shall refer to the methodology used to determine the projected benefit obligation (as that term is defined in FAS 87). WANG ACTUARY. The term "Wang Actuary" shall mean an actuarial consulting firm selected by Wang to perform the functions described in Section 6.18(c). WANG TAX ADJUSTMENT. The term "Wang Tax Adjustment" means the number one (1) minus the highest marginal rate of tax (expressed as a decimal number) actually applicable to the income of Olsy Japan in its fiscal year in which the payment, if any, required to be made to Wang under Section 6.18(d) below is required to be made. (c) As soon as practicable following December 31, 2000, but in no event more than 90 days following the later of (i) December 31, 2000 and (ii) the date Olivetti or the Olivetti Actuary delivers to the Wang Actuary all information requested by the Wang Actuary pursuant to the last sentence of this Section 6.18(c), Wang shall cause the Wang Actuary to compute the OCJ Benefit Deficit or OCJ Benefit Surplus, as the case may be, and to deliver its calculations together with reasonable supporting information with respect thereto, to the Olivetti Actuary. If the Olivetti Actuary objects to the manner in which the actuarial assumptions specified in Schedule 6.18(b) are applied in such calculations, it shall notify the Wang Actuary of its objections, and shall supply to the Wang Actuary reasonable detail supporting its objections, no later than 15 days following its receipt of the calculations of the Wang Actuary. If the Olivetti Actuary fails to so object during such 15 day period, the calculations of the Wang Actuary shall be final and binding upon the parties. If the Olivetti Actuary shall notify the Wang Actuary of its objections during such 15 day period, the Wang Actuary and the Olivetti Actuary shall consult with one another and attempt to agree upon the correct application of the actuarial assumptions. If, at the end of the 15 day period commencing on the date the Olivetti Actuary notifies the Wang Actuary of its objections to the calculations, the Wang Actuary and the Olivetti Actuary shall fail to so agree, the appropriate application of such actuarial assumptions shall be determined by arbitration 114 123 by an actuary mutually agreeable to the Wang Actuary and the Olivetti Actuary, which determination shall be final and binding upon the parties and may be enforced in any court having jurisdiction. If the Wang Actuary and the Olivetti Actuary fail to agree on an actuary arbitrator within 20 days after the expiration of the 15 day period in the preceding sentence, then either Wang or Olivetti may request that the International Chamber of Commerce Court of Arbitration appoint such actuary arbitrator within 30 days of such request. Wang shall be responsible for all fees and expenses of the Wang Actuary, Olivetti shall be responsible for all fees and expenses of the Olivetti Actuary, and Wang and Olivetti shall each be responsible for 50% of the fees and expenses incurred by any actuary appointed in accordance with the preceding sentences. Olivetti shall, or shall cause the Olivetti Actuary to, provide to the Wang Actuary, as soon as reasonably practicable following any such request, such information with respect to the OCJ Pension Plan and the OCJ Designated Employees as the Wang Actuary shall reasonably request in order to perform the calculations required of it pursuant to this Section 6.18(c). The arbitrator shall render an award if possible within 90 days of his or her appointment. (d) As soon as practicable following the final determination of the OCJ Benefit Deficit and the OCJ Benefit Surplus, but in no event more than 10 days following such determination, Olivetti shall pay to Wang an amount equal to eighty percent (80%) of the OCJ Benefit Deficit multiplied by the Wang Tax Adjustment or Wang shall pay to Olivetti an amount equal to eighty percent (80%) of the OCJ Benefit Surplus multiplied by the Olivetti Tax Adjustment. 6.19 SPARES. In preparing (or causing to be prepared) the Closing Financial Statements, Wang shall (a) conduct (or cause to be conducted) a physical inventory of all of the fixed assets of Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary and (b) prepare (or cause to be prepared) a report with respect to the spares ("Repairable Spares") of Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary which are accounted for in accordance with OLGA as fixed assets (the "Repairable Spares Report") reflecting (i) by part number, the number of Repaired Repairable Spares, (ii) by part number, the number of Repairable Spares which would have to be ac- 115 124 quired or repaired by Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary to reach target stocking levels for such part number set by Olsy as of December 31, 1997 (the "12/31/97 TSLs") and (iii) by part number, the aggregate cost of acquiring or repairing, whichever is less, a number of Repairable Spares to reach the 12/31/97 TSLs for such part number and the total of such costs for all part numbers (the "Total Repairable Spares Cost"). If Olivetti objects to the Repairable Spares Report, Olivetti shall notify Wang of such objections within not later than 60 days after receipt thereof and Wang and Olivetti shall attempt to resolve such objections, or failing that submit such objections to arbitration, in conjunction with any Closing Objections in accordance with Section 6.14(a). Not later than five days after Wang delivers the Spares Report to Olivetti (or if Olivetti notifies Wang of any objections to the Repairable Spares Report, five days after the resolution thereof by mutual agreement or arbitration), Olivetti shall pay Wang an amount in cash equal to the lesser of (a) the Total Repairable Spares Cost or (b) 20% of the net book value of the Repairable Spares on the 12/31/97 Balance Sheet (excluding any residual capitalized repair costs). Olivetti shall have the right to participate in the physical inventory referred to in this Section 6.19. 6.20 TRADE RECEIVABLES. As promptly as practicable after the end of each month following the Closing, Wang shall cause Olsy to deliver to Olivetti an ageing report for the trade receivables of Olsy, Olsy Japan, Olsy Brazil and the Controlled Subsidiaries as of the Closing Financial Statements Date (other than trade receivables owed from Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary), classified according to the categories set forth on Schedule 6.20 hereto (each a "Trade Receivables Ageing Report"). Within ten Business Days of receipt of a Trade Receivables Ageing Report, Olivetti shall purchase any trade receivable of Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary reflected on such report which has not been collected, from the date of billing, within the period specified for trade receivables of such category on Schedule 6.20 hereto, plus 45 days, for an amount in cash, in immediately available funds, equal to the amount of such trade receivable (less the amount of any reserve specifically matched in the books and records of Olsy, Olsy Japan, Olsy Brazil or a Controlled Subsidiary to such trade 116 125 receivable as of the Closing Date, if any); provided, however, that Olivetti shall not be obligated to purchase any trade receivables pursuant to this Section 6.20 until an amount in trade receivable equal to the aggregate general reserve therefor reflected in the books and records of Olsy, Olsy Japan, Olsy Brazil and the Controlled Subsidiaries as of the Closing Financial Statements Date shall not have been collected, from the date of billing, within the applicable periods specified on Schedule 6.20 hereto, plus 45 days. If Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary subsequently receives any payment with respect to any trade receivable sold to Olivetti pursuant to this Section 6.20, such payment shall be promptly (and in any event, within ten Business Days of receipt) paid over to Olivetti. At the request of Olivetti, Wang shall cause Olsy, Olsy Japan, Olsy Brazil or a Controlled Subsidiary to continue its collection efforts, in its ordinary course of business and consistent with its past practice, with respect to any trade receivable purchased from it pursuant to this Section 6.20; with respect to any such trade receivable collected, Olsy, Olsy Japan, Olsy Brazil or the Controlled Subsidiary, as the case may be, shall retain 5% of the amount collected and promptly (and in any event, within ten Business Days of receipt) pay the balance of the amount collected over to Olivetti. 6.21 WORK IN PROGRESS. (a) Attached as Schedule 6.21 hereto is a report on the Customer Contracts with respect to which unbilled trade receivables for work in progress are reflected in the books and records of Olsy as of December 31, 1997 (the "Unbilled Trade Receivables") which sets forth (i) each such Customer Contract and (ii) with respect to each such Customer Contract the date by which the Unbilled Trade Receivables relating thereto will be paid. As promptly as practicable after the end of each month following the Closing, Wang shall cause Olsy to deliver to Olivetti an ageing report for the Unbilled Trade Receivables (each, a "WIP Ageing Report"). Within ten Business Days of receipt of a WIP Ageing Report, Olivetti shall purchase any Unbilled Trade Receivable on such report which has not been paid by the date specified therefor on Schedule 6.21 hereto for an amount in cash, in immediately available funds, equal to the amount of such Unbilled Trade Receivable. If Olsy subsequently receives any payment with respect to any Unbilled Trade Receivable sold to Olivetti 117 126 pursuant to this Section 6.21, such payment shall be promptly (and in any event, within ten Business Days of receipt) paid over to Olivetti. At the request of Olivetti, Wang shall cause Olsy to continue its collection efforts, in its ordinary course of business and consistent with its past practice, with respect to any Unbilled Trade Receivables purchased from it pursuant to this Section 6.21; with respect to any such trade receivable collected, Olsy shall retain 5% of the amount collected and promptly (an in any event, within ten Business Days of receipt) pay the balance of the amount collected over to Olivetti. After the Closing, Wang shall cause Olsy to use its commercially reasonable best efforts to continue to perform the Customer Contracts set forth on Schedule 6.21 relating to the work in progress in substantially the same manner as such Customer Contract was being performed prior to the Closing. (b) As promptly as practicable at the end of the year ending December 31, 1999, Wang shall deliver (or cause to be delivered) to Olivetti a report with respect to the work in progress receivables and inventories of "Poste Italiane" set forth on Schedule 6.21 hereto showing the amount thereof which remained unpaid as of December 31, 1999, and within ten Business Days of receipt of such report Olivetti shall pay Wang an amount in cash, in immediately available funds, equal to the amount of such work in progress receivables and inventories which remained unpaid as of December 31, 1999. If Olsy subsequently receives any payment with respect to any such work in progress receivables and inventories, such payment shall be promptly (and in any event, within ten Business Days of receipt) paid over to Olivetti. 6.22 STATUTORY RECAPITALIZATION. As soon as practicable after the Closing, Wang shall recapitalize (or shall cause to be recapitalized) any Controlled Subsidiary which was not, as of the Closing Date, capitalized in accordance with local law, and Olivetti shall reimburse Wang for all Taxes and costs associated with such recapitalization (up to the amount required by local law) within ten days of the receipt of a notice from Wang specifying the amount of such Taxes and costs. 6.23 COOPERS & LYBRAND CONSENT. (a) Simultaneously with the execution and delivery of this Agree- 118 127 ment, Coopers and Lybrand delivered to Wang a duly executed letter in which Coopers & Lybrand (i) acknowledged that it understood that Wang intends to file the U.S. GAAP Financial Statements in statements and reports required to be filed by Wang from time to time with the SEC pursuant to the Securities Act and the Exchange Act ("SEC Filings") and (ii) subject to its usual procedures and professional standards and after being given reasonable opportunity to review such SEC Filings and documents incorporated by reference therein, has agreed that it shall consent to the inclusion of any of its audit reports on the U.S. GAAP Financial Statements in any SEC Filing. Olivetti shall use its commercially reasonable best efforts to cause Coopers & Lybrand to consent to the inclusion of any of its audit reports on the U.S. GAAP Financial Statements in any SEC Filing. (b) If Coopers & Lybrand fails, for any reason whatsoever, to consent to the inclusion of any such audit report in any SEC filing, Olivetti (i) shall provide Wang and its representatives access to its books, records, files and personnel commensurate with what it provided to Coopers & Lybrand in connection with its audit of the 12/31/96 Italian GAAP Financial Statements, the 9/30/97 Italian GAAP Financial Statements or the U.S. GAAP Financial Statements so that Wang may expeditiously cause any or all or such financial statements to be reaudited and (ii) shall use its commercially reasonable best efforts to cause Coopers & Lybrand to cooperate with the auditors engaged by Wang to conduct such audit. Olivetti acknowledges that if Coopers & Lybrand fails to consent to the inclusion of any such audit report in any SEC filing and Wang is denied in any manner whatsoever the access provided for in this Section 6.23(b), Wang will suffer irreparable injury and damage. Therefore, Olivetti agrees that if Wang is denied the access provided for in this Section 6.23(b) in any manner whatsoever Wang will be entitled to, in addition to all other remedies available to it, injunctive relief and specific performance to prevent a breach of and to secure the enforcement of this Section 6.23(b) hereof. (c) Wang acknowledges that the U.S. GAAP Financial Statements are not being delivered for purposes of the adjustments to the Purchase Price pursuant to Sections 6.13 or 6.14. 119 128 6.24 COOPERATION IN ITALY. (a) (i) For a period of two years following the Closing, Olivetti will cause Olivetti executives to use their commercially reasonable best efforts to provide Wang executives with personal introductions to significant customers of Olsy and customer prospects with whom Olivetti or its officers maintain relationships. (ii) For a period of two years following the Closing, Olivetti will cause Olivetti executives to provide Wang, upon Wang's request, with advice and the benefit of Olivetti's past experience relating to the handling of industrial relations and government relations issues and relations with banks and other financial institutions in Italy. (iii) For a period of two years following the Closing, and provided that Wang or Olsy has advised Olivetti of its position regarding the matters concerned and Wang or Olsy's position is not unreasonable, or adverse to Olivetti, Olivetti will afford Wang or Olsy reasonable access to Olivetti's personnel who deal with industrial, labor and governmental relations issues with respect to industrial relations matters for consultation on such issues and will cause its executives (aa) to assist in arranging meetings relating to industrial relations matters with industrial, labor and governmental officials and (bb) at Wang or Olsy's request, with reasonable notice and at reasonable times, attend such meetings and assist Wang or Olsy in negotiating with such officials. (iv) For a period of two years following the Closing, and provided that Wang or Olsy has advised Olivetti of its position regarding the matters concerned and Wang or Olsy's position is not unreasonable or adverse to Olivetti, Olivetti will afford Wang and Olsy reasonable access to Olivetti's personnel who deal with governmental officials and officers of banks and financial institutions for consultations on such issues and will cause its executive (aa) to assist Wang or Olsy in arranging meetings with governmental officials and officers of banks and financial institutions and (bb) at Wang or Olsy's request, with reasonable notice and at rea- 120 129 sonable times, attend such meetings and assist Wang and Olsy in negotiations with such officials. (b) Each party agrees to comply with all applicable laws, regulations, court orders and ethical rules in the performance of the obligations described herein. Olivetti and Wang expressly agree and understand that nothing contained in this Section 6.24 shall be construed as any inducement or invitation to violate any law, regulation, court order or ethical rule. 6.25 COOPERATION WITH RESPECT TO CERTAIN BUSINESS ITEMS AND NONBUSINESS ITEMS. (a) Wang acknowledges that there may be Business Items which are being used in providing products, services or support to customers of the Business and other customers of Olivetti or an Olivetti Affiliate or pursuant to or under which products, services or support are being provided to customers of the Business and other customers of Olivetti or an Olivetti Affiliate, and for a period of two years following the Closing, shall cause Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary to cooperate with Olivetti or such Olivetti Affiliate to permit Olivetti or such Olivetti Affiliate to continue to use such Business Items to provide products, services or support to their respective customers or to continue to provide products, services or support pursuant to or under such Business Items to their respective customers in substantially the same manner as used or provided prior to the Closing as is practicable. (b) Olivetti acknowledges that there may be NonBusiness Items which are being used in providing products, services or support to customers of the Business or pursuant to or under which products, services or support are being provided to customers of the Business, and for a period of two years following the Closing, Olivetti shall (or shall cause an Olivetti Affiliate to) cooperate with Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary to permit Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary to continue to use such NonBusiness Items to provide products, services or support to their respective customers or to continue to provide products, services or support pursuant to or under such NonBusiness Items to their respective customers in substantially the same manner as used or provided prior to the Closing as is practicable. 121 130 6.26 CERTAIN INTELLECTUAL PROPERTY COVENANTS. (a) OLIVETTI TRADEMARKS. Wang acknowledges, accepts and respectively undertakes, as follows: (i) Olivetti is and shall remain the sole and exclusive owner of any and all rights to the exclusive use of any and all Trademarks (as defined in Section 4.15(a)(viii) consisting of or including the words "Olivetti" and/or any other word including as a prefix the combination of letters "OLI", howsoever written, pronounced or spelled and in whatever form of written, verbal or visual communication, which constitute a family of Trademarks (collectively, the "Olivetti Trademarks"), in any form and for any purpose. (ii) Olsy, Olsy Brazil, Olsy Japan and certain Subsidiaries have used heretofore and will continue to use hereafter until Closing the Olivetti Trademarks in the carrying out of the Business on the strength of license rights and privileges which have been granted or as has been otherwise consented by Olivetti to Olsy, Olsy Brazil, Olsy Japan and the relevant Subsidiaries solely in consideration of their belonging to the group of companies controlled by Olivetti, and only so long as such group relationship continues to exist, and any and all such license rights and privileges or consents granted by Olivetti to Olsy, Olsy Brazil, Olsy Japan and the Subsidiaries shall and shall to all effects be deemed to be automatically terminated or revoked forthwith upon Closing and of no further effect. (iii) Any Olivetti Trademark which is registered or applied for registration by Olsy, Olsy Brazil, Olsy Japan or any Subsidiary anywhere in the world: (aa) if registered or applied for registration at any time before Closing, shall qualify as a Non Business Item for the purposes of Section 1.2 hereof and (bb) if registered or applied for registration after Closing by Wang or any Affiliate of Wang in violation of the Transitional Authorization and Trademark License Agreement substantially in the form of Exhibit 12 hereto (the "Transitional Authorization and Trademark License Agreement"), shall be deemed for all purposes to be the sole and exclusive property of Olivetti, and the registration or appli- 122 131 cation for registration thereof shall be promptly transferred by Wang or the relevant Affiliate of Wang (at Wang's expense and without any consideration from Olivetti) to Olivetti or any Affiliate of Olivetti, as Olivetti may direct, without prejudice of any other right or remedy available to Olivetti against Wang, Olsy, Olsy Brazil, Olsy Japan or any Subsidiary under the Transitional Authorization and Trademark License Agreement or the applicable laws of any country of competent jurisdiction. (iv) All rights or consents granted to Olsy, Olsy Brazil, Olsy Japan and all Subsidiaries in the Olivetti Trademarks are terminated upon the Closing and all future rights to use the Olivetti Trademarks shall be governed by the Transitional Authorization and Trademark License Agreement. (b) LICENSED OLIVETTI INTELLECTUAL PROPERTY. (i) Olivetti hereby grants to Wang, Olsy, Olsy Japan, Olsy Brazil and the Controlled Subsidiaries, to the extent it is entitled to do so, a perpetual, worldwide, non-exclusive license to use, copy, modify, enhance, maintain, distribute and create derivative works of the Licensed Olivetti Intellectual Property (except Olivetti Trademarks the use of which shall be governed by the Transitional Authorization and Trademark License Agreement) in a manner and for purposes consistent with, and to an extent not exceeding, the manner, purposes and extent in and for which such Licensed Olivetti Intellectual Property was in use by Olsy, Olsy Japan, Olsy Brazil and the relevant Controlled Subsidiaries during the two-year period ending on the date of Closing and in connection with any direct and immediate evolution thereof imposed by technological evolution or by the market. (ii) If subsequent to Closing Wang wishes (whether directly or through Olsy, Olsy Brazil, Olsy Japan or any Subsidiary) to use, copy, modify, enhance, maintain, distribute and create derivative works of the Licensed Olivetti Intellectual Property in a manner, for purposes and/or to an extent exceeding that specified in Paragraph (i) 123 132 above, then, in such event, Wang shall notify Olivetti thereof, in writing, and the terms and conditions of any such new license to use, copy, modify, enhance, maintain, distribute and/or create derivative works of such Licensed Olivetti Intellectual Property shall be negotiated and agreed upon by Olivetti and Wang on an arms-length basis. (iii) After Closing Wang shall and shall cause Olsy, Olsy Brazil, Olsy Japan and any relevant Subsidiary to extend to Olivetti or the relevant Affiliate of Olivetti all reasonable co-operation in respect of the foregoing. After Closing Olivetti shall extend to Wang and the Controlled Subsidiaries all reasonable co-operation in respect of the foregoing. To the extent Wang or a Controlled Subsidiary reasonably requires a copy of any Licensed Olivetti Intellectual Property to continue the use of such Licensed Olivetti Intellectual Property, Olivetti shall deliver such copy to Wang or the Controlled Subsidiary. (c) REGISTRATION OF OWNERSHIP. (i) Olivetti agrees that promptly upon execution of this Agreement it shall or shall cause any relevant Affiliate of Olivetti to file the necessary documents to record Olsy, Olsy Japan, Olsy Brazil or a Controlled Subsidiary, as applicable, as the registered owner of such Patents as constitute an Olsy Intellectual Property (as identified in Schedule 4.15(b)(i)(aa) or Schedule 4.15(b)(ii)(aa) of Olivetti Disclosure Schedule) and are not so recorded as at the date hereof. Olivetti and Wang shall each pay one-half of all costs and expenses for such filings. (ii) Olivetti further agrees that promptly upon request by Wang it shall or shall cause any relevant Affiliate of Olivetti to file the necessary documents to record Olsy, Olsy Brazil, Olsy Japan or a Controlled Subsidiary, as applicable, as the registered owner of such registered Trademarks as constitute an Olsy Intellectual Property (as identified in Schedule 4.15(b)(i)(bb) or Schedule 4.15(b)(ii)(bb) of Olivetti Disclosure Schedule) and are not so recorded as at the date 124 133 hereof; provided however that Wang agrees that it shall not require without reason the filing of such documents in respect of such Trademarks as consist of or contain the word Olsy and such other Trademarks which are not in use by Olsy, Olsy Brazil, Olsy Japan or the Controlled Subsidiaries. Olivetti shall pay all costs and expenses for such filings. 6.27 SUBLEASES. Prior to the Closing Date, Olivetti shall have caused the terms of those sublease agreements listed on Schedule 6.27 to be amended in the manner set forth on Schedule 6.27. ARTICLE VII TAX MATTERS ----------- 7.1 PREPARATION AND FILING OF TAX RETURNS; PAYMENT OF TAXES. (a) Olivetti shall prepare or cause to be prepared (at its own cost and expense and in a manner consistent with past practice) all Tax Returns of Olsy, Olsy Japan, Olsy Brazil and/or each Controlled Subsidiary (including the Tax Returns of any affiliated, combined, consolidated, unitary or aggregate Tax Return of which Olsy, Olsy Japan, Olsy Brazil and/or any Controlled Subsidiary is a member before the Closing Date) required to be filed on or before the Closing Date. Olivetti shall, on a timely basis, file the Tax Return and pay the amount due with the Tax Return to the appropriate taxing authority. At or prior to the Closing Date, Olivetti shall deliver a copy of such Tax Return (or that portion of such Tax Return as it relates to Olsy, Olsy Japan, Olsy Brazil and/or any Controlled Subsidiary) to Wang. (b) Wang shall cause Olsy, Olsy Japan, Olsy Brazil and each Controlled Subsidiary (or the common parent of any affiliated, combined, consolidated, unitary or aggregate group of which Olsy, Olsy Japan, Olsy Brazil and/or any Controlled Subsidiary is a member after the Closing Date) to prepare and file, on a timely basis, all Tax Returns (other than those provided for in Section 7.1(a)) of Olsy, Olsy Japan, Olsy Brazil and/or each Controlled Subsidiary. With respect to any Tax Return for any taxable period beginning before the Closing Date and ending after the Closing Date (such period, a "Strad- 125 134 dle Period"), not less than 30 Business Days prior to the date on which any such Tax Return is due to be filed (taking into account any applicable extensions), Wang shall deliver a draft of each such Tax Return (or that portion of such Tax Return as it relates to Olsy, Olsy Japan, Olsy Brazil and/or each Controlled Subsidiary) to Olivetti. Wang shall timely pay or cause the appropriate company to timely pay the amount shown to be due with such Tax Return to the appropriate taxing authority. (c) Any disputes with respect to such Tax Returns shall be resolved by arbitration by an independent accounting firm, or such other independent expert as may be mutually agreed upon by Olivetti and Wang (the "Tax Arbitrator"), whose determination shall be binding upon the parties and may be enforced in any court having jurisdiction. The fees and expenses of the Tax Arbitrator shall be borne equally by Olivetti and Wang. If Olivetti and Wang fail to agree on a Tax Arbitrator within 20 days of receipt of notice of a dispute with respect to Tax Returns, then at the request of either party, the International Chamber of Commerce Court of Arbitration shall appoint an independent accounting firm or independent expert to serve as the Tax Arbitrator within 30 days of such request. The Tax Arbitrator shall, if possible, render an award within 90 days of his or her appointment. 7.2 TAX INDEMNIFICATION. (a) Subject to Section 10.2(b)(ii) and to the extent not accrued on the Closing Balance Sheet, Olivetti shall indemnify, defend and hold harmless Wang and its Affiliates (including, after the Closing Date, Olsy, Olsy Japan, Olsy Brazil and any Controlled Subsidiary) and their respective officers, directors, employees and agents (collectively, the "Wang Tax Indemnified Parties") from and against any and all Taxes, claims or damages imposed on, sustained, incurred or suffered by any Wang Tax Indemnified Party, directly or indirectly, by reason of or resulting from any and all Taxes imposed upon Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary (other than claims or damages solely arising as a result of any Taxes imposed due to any failure by Wang or its Affiliates, including, after the Closing Date, Olsy, Olsy Japan, Olsy Brazil or the Controlled Subsidiaries, to fully comply with any applicable law or regulation relating to Taxes) with respect or pursuant to (i) any Pre-Closing Period, (ii) any 126 135 Straddle Period, but only with respect to the portion of such Straddle Period ending on the Closing Date and in the manner provided in Section 7.2(c) (such portion, a "Pre-Closing Straddle Period"), and (iii) Treasury Regulations section 1.1502-6 (or any comparable provision under state, local or foreign law or regulation imposing several liability upon members of a consolidated, combined, affiliated or unitary group) for any Pre-Closing Period or Pre-Closing Straddle Period. Notwithstanding anything to the contrary herein, the amount that Olivetti shall be obligated to indemnify Wang under this Section 7.2(a) with respect to Pre-Closing Straddle Periods shall not exceed the amount by which the sum of the 1998 Operating Loss and the aggregate amount of Taxes, claims or damages with respect to such Pre-Closing Straddle Periods exceeds 65,000,000,000 Italian lira. For purposes of this Article VII, Taxes with respect to a Pre-Closing Straddle Period shall be considered accrued on the Closing Balance Sheet only to the extent such accrual is specifically designated on the Closing Balance Sheet as attributable to a Pre-Closing Straddle Period. (b) Subject to Section 10.3(b)(ii), Wang shall indemnify, defend and hold harmless Olivetti and its Affiliates and their respective officers, directors, employees and agents (collectively, the "Olivetti Tax Indemnified Parties") from and against any and all Taxes, claims or damages imposed on, sustained, incurred or suffered by any Olivetti Tax Indemnified Party, directly or indirectly, by reason of or resulting from any and all Taxes imposed upon Olsy, Olsy Japan, Olsy Brazil, or any Controlled Subsidiary (other than claims or damages solely arising as a result of any Taxes imposed due to a failure by Olivetti or its Affiliates, including, prior to the Closing Date, Olsy, Olsy Japan, Olsy Brazil and the Controlled Subsidiaries, to fully comply with any applicable law or regulation relating to Taxes) with respect or pursuant to (i) any taxable period beginning after the Closing Date (such period, a "Post-Closing Period") and (ii) any Straddle Period, but only with respect to the portion of such Straddle Period beginning the day after the Closing Date and in the manner provided in Section 7.2(c) (such portion, a "Post-Closing Straddle Period"). (c) For purposes of calculating the Taxes imposed which relate to a Straddle Period and must 127 136 be allocated between a Pre-Closing Straddle Period and a Post-Closing Straddle Period, the Taxes attributable to the Pre-Closing Straddle Period shall be computed as if such taxable period ended on and included the Closing Date and the Taxes attributable to the Post-Closing Straddle Period shall be computed as if such taxable period began on the day immediately following the Closing Date. 7.3 ENTITY CLASSIFICATION ELECTION. With respect to the acquisition of the Olsy Shares, the Olsy Japan Shares, the Olsy Brazil Shares and the capital stock of any Controlled Subsidiary pursuant to this Agreement, at the sole option and discretion of Wang and with the assumption of and payment by Wang of all costs, expenses or damages payable by Olivetti as a result of or attributable thereto, Olivetti, prior to the Closing Date, shall make an election under Treasury Regulations section 301.7701-3(c) to have Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary classified as a partnership or disregarded as a separate entity for United States federal income tax purposes. 7.4 TAX CLAIMS. (a) Except as otherwise provided in this Section 7.4, if a notice of deficiency, proposed adjustment, adjustment, audit, examination or other administrative or court proceeding, suit, dispute or other claim (a "Tax Claim") is delivered, sent, commenced or initiated to or against Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary by any taxing authority and, as of the date such Tax Claim is so delivered, sent, commenced or initiated, such entity has any Tax credits or net operating losses ("Tax Benefits"), Wang shall be solely responsible for controlling the defense of such Tax Claim. Notwithstanding anything to the contrary herein and to the extent that a Tax Claim relates to a Pre-Closing Period or a Pre-Closing Straddle Period for which Olivetti is responsible pursuant to Section 7.2(a), (i) Olivetti and its Affiliates agree to cooperate with Wang in pursuing such contest, (ii) Wang shall consult with Olivetti and shall not enter into any settlement with respect to any such Tax Claim without Olivetti's prior written consent, which shall not be unreasonably withheld, (iii) Wang shall keep Olivetti informed of all material developments and events relating to such Tax Claim, (iv) at its own cost and expense, Olivetti shall have the right to participate in (but not 128 137 control) the defense of such Tax Claim and (iv) Wang shall be responsible for all costs and expenses incurred in connection with such Tax Claim, excluding costs and expenses incurred by Olivetti in connection with its participation in the defense of such Tax Claim pursuant to (iv) above. (b) Any disputes with respect to Olivetti's consent to settle a Tax Claim described in Section 7.4(a) shall be resolved by arbitration by the Tax Arbitrator, whose determination shall be binding upon the parties and may be enforced in any court having jurisdiction. The fees and expenses of the Tax Arbitrator shall be borne equally by Olivetti and Wang. If Olivetti and Wang fail to agree on a Tax Arbitrator with respect to such dispute within 20 days of receipt by Wang of notice of a settlement offer with respect to such Tax Claim, then at the request of either party, the International Chamber of Commerce Court of Arbitration shall appoint an independent accounting firm or independent expert to serve as the Tax Arbitrator within 30 days of such request. The Tax Arbitrator shall, if possible, render a decision within 90 days of his or her appointment. (c) If a Tax Claim involving Taxes for any Pre-Closing Period for which Olivetti is responsible pursuant to Section 7.2(a) is delivered, sent, commenced or initiated to or against Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary by any taxing authority and, as of the date such Tax Claim is so delivered, sent, commenced or initiated, such entity does not have any Tax Benefits, Olivetti shall be solely responsible for controlling the defense of such Tax Claim. Notwithstanding anything to the contrary herein, (i) Wang and its Affiliates (including, after the Closing Date, Olsy, Olsy Japan, Olsy Brazil and each Controlled Subsidiary) agree to cooperate with Olivetti in pursuing such contest, (ii) Olivetti shall consult with Wang and shall not enter into any settlement with respect to any such Tax Claim without Wang's prior written consent, which shall not be unreasonably withheld, (iii) Olivetti shall keep Wang informed of all material developments and events relating to such Tax Claim, (iv) at its own cost and expense, Wang shall have the right to participate in (but not control) the defense of such Tax Claim and (v) Olivetti shall be responsible for all costs and expenses incurred in con- 129 138 nection with such Tax Claim, excluding costs and expenses incurred by Wang in connection with its participation in the defense of such Tax Claim pursuant to (iv) above. (d) If Wang has withheld its consent with respect to a bona fide settlement offer by any taxing authority for any Tax Claim described in Section 7.4(c), Olivetti may, at its election and in lieu of continuing to control the defense of such Tax Claim, pay to Wang the amount that would be necessary to settle such Tax Claim, as determined by the bona fide settlement offer. Upon such payment to Wang, (i) Olivetti shall be released from any further liability with respect to further adjustments related to such Tax Claim, (ii) Wang shall assume and control the defense of such Tax Claim and (iii) regardless of the final outcome of such Tax Claim, Wang shall be entitled to retain the full amount of Olivetti's payment to Wang pursuant to the preceding sentence and Olivetti shall have no right to any reimbursement or refund of any kind with respect to such payment. (e) If Olivetti or any of its Affiliates (including, before the Closing Date, Olsy, Olsy Japan, Olsy Brazil and any Controlled Subsidiary) receives notice of a Tax Claim by any taxing authority with respect to a Pre-Closing Period or Pre-Closing Straddle Period, Olivetti or such Affiliate shall notify Wang of such notice and the nature of such Tax Claim within five days of receipt of such notice by Olivetti or such Affiliate. If Wang or any of its Affiliates (including, after the Closing Date, Olsy, Olsy Japan, Olsy Brazil and any Controlled Subsidiary) receives notice of a Tax Claim by any taxing authority with respect to a Pre-Closing Period or Pre-Closing Straddle Period, Wang or such Affiliate shall notify Olivetti of such notice and the nature of such Tax Claim within five days of receipt of such notice by Wang or such Affiliate. 7.5 REFUNDS. To the extent not accrued on the Closing Balance Sheet, any refund of Taxes (including any statutory interest thereon) received by Wang, Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary attributable to any Pre-Closing Period, or that are attributable to amounts paid by Olivetti pursuant to this Article VII, shall be for the benefit of Olivetti, and Wang shall cause any such refund to be paid to Olivetti 130 139 within ten (10) Business Days after Wang, Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary receives such refund. 7.6 TAX PAYMENTS RESULTING FROM AUDIT ADJUSTMENT. (a) To the extent not accrued on the Closing Balance Sheet, if there is an adjustment to any item reported on a Tax Return with respect to a Pre-Closing Period or Pre-Closing Straddle Period that results in an increase in the Taxes payable by Olivetti, and such adjustment results in a corresponding adjustment to items reported on a Tax Return with respect to a Post-Closing Period with the result that the Taxes payable either by Wang, Olsy, Olsy Japan, Olsy Brazil, any Controlled Subsidiary or any consolidated, affiliated, combined or unitary group of companies of which Wang, Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary is a member are reduced, or a refund of Taxes is increased, then Wang shall pay to Olivetti the amount by which such Taxes are reduced or such refund is increased within five Business Days following the date on which a payment or refund of such Taxes is made or received. The amount of such payment shall be the excess of (i) the Tax liability of Wang, Olsy, Olsy Japan, Olsy Brazil, any Controlled Subsidiary or, if applicable, any consolidated, affiliated, combined or unitary group of companies of which Wang, Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary is a member for the taxable period in question computed without regard to such adjustment or amendment, over (ii) the actual Tax liability of Wang, Olsy, Olsy Japan, Olsy Brazil, any Controlled Subsidiary or, if applicable, any consolidated, affiliated, combined or unitary group of companies of which Wang, Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary is a member for the taxable period in question. Notwithstanding the foregoing, the amount that Wang shall pay to Olivetti pursuant to this Section 7.6 with respect to Pre-Closing Straddle Periods shall not exceed the amount that Olivetti is obligated to indemnify Wang pursuant to Section 7.2(a) with respect to such Pre-Closing Straddle Periods. (b) To the extent not accrued on the Closing Balance Sheet, if there is an adjustment to any item reported on a Tax Return with respect to a Pre-Closing Period or Pre-Closing Straddle Period that results in a decrease in the Taxes payable by Olivetti, and 131 140 such adjustment results in a corresponding adjustment to items reported on a Tax Return with respect to a Post-Closing-Period with the result that the Taxes payable either by Wang, Olsy, Olsy Japan, Olsy Brazil, any Controlled Subsidiary or any consolidated, affiliated, combined or unitary group of companies of which Wang, Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary is a member are increased, or a refund of Taxes is decreased, then Olivetti shall pay to Wang the amount by which such Taxes are increased or such refund is decreased within five Business Days following the date on which a payment or refund of such Taxes is made or received. The amount of such payment shall be the excess of (i) the actual Tax liability of Wang, Olsy, Olsy Japan, Olsy Brazil, any Controlled Subsidiary or, if applicable, any consolidated affiliated, combined or unitary group of companies of which Wang, Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary is a member for the tax period in question, over (ii) the tax liability of Wang, Olsy, Olsy Japan, Olsy Brazil, any Controlled Subsidiary or, if applicable, any consolidated, affiliated, combined or unitary group of companies of which Wang, Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary is a member for the tax period in question computed without regard to such adjustment or amendment. 7.7 AMNESTY. In the event that, at any time between the Closing Date and the date upon which the liability of Olivetti for Taxes shall expire pursuant to this Agreement, any law, regulation, order or decree should be enacted in any relevant jurisdiction having as an effect the right to settle, in whole or in part, the Tax obligation of any entity covered by Olivetti's indemnity obligation hereunder (any such law, regulation, order or decree is hereinafter referred to as an "Amnesty"), (a) Olivetti shall have the right to request Wang to cause such entity to avail itself of the Amnesty, (b) Wang shall have the right to determine, in its sole discretion (irrespective of any request of Olivetti under Section 7.7(a)), whether or not to cause such entity to avail itself of the Amnesty, (c) if Wang elects to proceed with the Amnesty without the prior agreement or request of Olivetti, all cost and expenses of such Amnesty shall be borne by Wang or such entity, without recourse against Olivetti, (d) if Wang elects to proceed with the Amnesty in agreement with Olivetti or pursuant 132 141 to Olivetti's request hereunder, all costs and expenses of such Amnesty shall be borne by Olivetti, and (e) if Wang elects not to proceed with an Amnesty notwithstanding Olivetti's request pursuant to Section 7.7(a) preceding, Wang shall be free to do so, but Olivetti's liability in respect of the matter constituting the subject of such Amnesty shall be limited to the amount that would have been paid by Olivetti had Wang elected to proceed with the Amnesty in accordance with Olivetti's request. 7.8 TRANSFER AND SIMILAR TAXES. Olivetti and Wang shall each pay one-half of all sales, use, transfer, recording, ad valorem, privilege, documentary, gains, stamp, duties, or similar Taxes and fees (collectively, the "Transfer Taxes"), arising out of, in connection with or attributable to the transactions contemplated by this Agreement, including, without limitation, the sales, transfers, conveyances, assignments and deliveries contemplated by Section 2.1(a) or (b); provided, however, Olsy shall pay all Transfer Taxes arising out of, in connection with or attributable to the transactions contemplated by Sections 1.9 or 1.10. The party which has primary responsibility for the payment of any particular Transfer Tax shall prepare and timely file all relevant Tax Returns required to be filed in respect of such Transfer Tax, pay the Transfer Tax shown on such Tax Return, and notify the other party in writing of the Transfer Tax shown on such Tax Return and how such Transfer Tax was calculated, and the other party shall reimburse the party paying such Transfer Tax for its applicable share of such Transfer Tax in immediately available funds within five days of receipt of such notice. 7.9 FIRPTA COMPLIANCE. Olivetti shall deliver to Wang at the Closing a certification of non-foreign status for Olivetti in a form which complies with the requirements of section 1445 of the Code and the regulations promulgated thereunder; provided, however, that if Olivetti shall fail to deliver any such certification of non-foreign status, Wang shall withhold at the Closing and pay over to the appropriate taxing authority an amount equal to ten percent (10%) of the total "amount realized" as defined in section 1445 of the Code. 7.10 ASSISTANCE AND COOPERATION. Olivetti and Wang agree that, after the Closing Date: 133 142 (a) each party shall assist (and cause their respective Affiliates to assist) the other party in preparing any Tax Returns (including, without limitation, making available personnel) which such other party is responsible for preparing and filing in accordance with Section 7.1; (b) each party shall cooperate fully in preparing for any audits of, or disputes or litigation with, any taxing authority regarding, any Tax Return with respect to Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary, and payments in respect thereof; (c) each party shall make available to the other party and to any taxing authority as reasonably requested all information, records and documents relating to Taxes of Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary; (d) each party shall provide timely notice to the other in writing of any pending, proposed or threatened Tax audits, assessments or litigation with respect to Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary for which the other party may have an indemnification obligation under Section 7.2; and (e) each party shall furnish the other party with copies of all relevant correspondence received from any taxing authority in connection with any Tax audit or information request with respect to any taxable period for which the other may have an indemnification obligation under Section 7.2. 7.11 CHARACTERIZATION OF INDEMNIFICATION PAYMENTS. All amounts paid by Olivetti to Wang or by Wang to Olivetti pursuant to Article VII or Article X shall be treated as adjustments to the Purchase Price for all Tax purposes. 7.12 INDEMNITY PAYMENTS. (a) All amounts payable or to be paid to Wang or to Olivetti under Section 7.2 ("Indemnity Payments") shall be paid in immediately available funds within 20 Business Days after the later of (a) receipt of a written request from the party entitled to such Indemnity Payment which demonstrates to the reasonable satisfaction of the party receiving such request that the party providing such request is entitled 134 143 to such payment under the terms of the Agreement and (b) the day of payment of the amount that is the subject of the Indemnity Payment by the party entitled to receive the Indemnity Payment. All such Indemnity Payments shall be made to the accounts and in the manner specified in such written notice. If the party receiving a request for an Indemnity Payment notifies the party providing such request within such 20 Business Day period that it rejects such request for an Indemnity Payment, in whole or in part, the matter shall be resolved in accordance with Section 12.12. In addition to the right of payment in this Section 7.12(a), Wang has, at its option and without any further action, the right to be paid for any Indemnity Payment not paid by Olivetti within ten days of Olivetti becoming obligated to pay such Indemnity Payment pursuant to (a) the Letter of Credit until the Original Amount (as defined therein) is reduced to zero or the issuing bank thereof shall refuse to honor any proper draw of Wang thereunder and then (b) the Stock Escrow Agreement. (b) The amount due any Wang Tax Indemnified Party or Olivetti Tax Indemnified Party (for purposes of this provision, a "Tax Indemnified Party"), as the case may be, under Sections 7.2 with respect to any Taxes, claims or damages (for purposes of this provision, a "Tax Loss") shall be determined after taking into account (i) any insurance proceeds or other indemnity payments actually received by such Tax Indemnified Party with respect to such Tax Loss at the time the amount of such obligation is determined and paid and (ii) if the Tax Indemnified Party owns, directly or indirectly, less than all of the outstanding capital stock of the Person to which such Tax Loss relates, the percentage of the outstanding capital stock of the Person to which such Tax Loss relates that is owned, directly or indirectly, by the Tax Indemnified Party. Tax Indemnified Parties shall use their commercially reasonable best efforts to collect any insurance proceeds or other indemnity payments to which they may be entitled with respect to any Tax Loss, but the collection thereto shall not be a condition to or defer the obligation of any indemnifying party under Section 7.2. If any Tax Indemnified Party receives any insurance proceeds or other indemnity payments with respect to a Tax Loss after such Tax Loss has been determined and paid, such Tax Indemnified Party shall promptly 135 144 turn over such proceeds or payments to the indemnifying party who paid such Tax Loss. 7.13 SURVIVAL. (a) The respective covenants and agreements of Olivetti and Wang in this Article VII shall be unconditional and absolute and, notwithstanding any other provision of this Agreement to the contrary, including Article X, shall remain in effect as long as any taxing authority could issue an assessment for Taxes for any Pre-Closing Period. (b) Notwithstanding any other provision of this Agreement to the contrary (other than Sections 10.2(b) and 10.3(b)), including Article 7.6(b) (other than Sections 10.2(b) and 10.3(b)), any indemnification for matters relating to Taxes shall be governed by this Article VII. ARTICLE VIII CONDITIONS TO THE OBLIGATIONS OF SELLERS ---------------------------------------- The obligations of the Sellers under this Agreement to consummate the transactions contemplated by this Agreement are subject to the satisfaction, on or before the Closing, of each of the following conditions, unless waived in writing by Olivetti: 8.1 REPRESENTATIONS AND WARRANTIES. The representations and warranties of Wang in this Agreement shall be true, complete and correct as of the date hereof, except for representations and warranties made as of a specified date, which will be true, complete and correct as of such date, except for changes expressly permitted or contemplated by this Agreement. 8.2 PERFORMANCE. Wang shall have performed and complied with all covenants and agreements required by this Agreement to be performed or complied with by it on or prior to the Closing. 8.3 OFFICERS' CERTIFICATE. Wang shall have delivered to Olivetti a certificate, dated the Closing Date and signed by its president and the chief financial officer certifying, to the best of their knowledge, to 137 145 the fulfillment of the conditions specified in Sections 8.1 and 8.2. 8.4 NON-GOVERNMENTAL CONSENTS. The authorizations, consents or approvals of Persons required to be obtained by Wang in connection with the transactions contemplated by this Agreement or any Related Agreement set forth on Schedule 8.4 hereto shall have been obtained. 8.5 WAITING PERIODS. All waiting or review periods applicable to this Agreement and the transactions contemplated hereby under the HSR Act, the German 1990 Act Against Restraints of Competition, the Italian Law on the Protection of Competition and the Market (Law No. 287 of Oct. 10, 1990), the Dutch Competition Act of May 22, 1997 and the Australian Foreign Acquisitions and Takeovers Act 1975 shall have expired or been earlier terminated. 8.6 NO INJUNCTION. Olivetti shall not be prohibited by any order, judgment, writ, injunction, decree, statute, rule or regulation of any Governmental Authority of competent jurisdiction from consummating the transactions contemplated by this Agreement or any Related Agreement. 8.7 GOVERNMENTAL ACTIONS. No suit, action or other proceeding shall have been initiated and remain in effect by any Governmental Authority seeking to enjoin or otherwise restrain the consummation of the transactions contemplated by this Agreement or any Related Agreement. 8.8 ABSENCE OF ADVERSE CHANGE. Excluding any effects of the transactions contemplated hereby, Wang and its subsidiaries, taken as a whole, shall not have suffered any material adverse change in their business, assets, properties, liabilities, results of operations or condition (financial or otherwise). 8.9 RELATED AGREEMENTS. The Related Agreements to which Olivetti or any Olivetti Affiliate is a party shall have executed and delivered by Wang and the other parties thereto in a form reasonably satisfactory to Olivetti. 137 146 8.10 OPINIONS. Wang shall have delivered to Olivetti the opinions of counsel reasonably acceptable to Olivetti, dated the Closing Date, covering the matters set forth on Exhibit 13 hereto. ARTICLE IX CONDITIONS TO THE OBLIGATIONS OF BUYERS --------------------------------------- The obligations of the Buyers under this Agreement to consummate the transactions contemplated by this Agreement are subject to the satisfaction, on or before the Closing, of each of the following conditions, unless waived in writing by Wang: 9.1 REPRESENTATIONS AND WARRANTIES. The representations and warranties of Olivetti in this Agreement shall be true, complete and correct as of the date hereof, except for representations and warranties made as of a specified date, which will be true, complete and correct as of such date, and except for changes expressly permitted or contemplated by this Agreement. 9.2 PERFORMANCE; OLSY SHARES; PRE-CLOSING. (a) Each of the Sellers, Olsy, Olsy Japan, Olsy Brazil and the Controlled Subsidiaries shall have performed and complied with all covenants and agreements (including, without limitation, the covenants and agreements in Article I) required by this Agreement to be performed or complied with by them on or prior to the Closing. (b) The Olsy Shares to be issued in connection with the share capital increase resolved at the extraordinary shareholders meeting of Olsy held on January 30, 1998 referred to in Sections 1.8(a)(v) and 1.8(b) shall have been duly and validly issued. (c) The transactions contemplated by Sections 1.9, 1.10, 1.11 and 1.12 shall have been consummated prior to or at the Pre-Closing. 9.3 OFFICERS' CERTIFICATE. Olivetti shall have delivered to Wang a certificate, dated the Closing Date and signed by its chief executive officer and chief financial officer (in any case duly authorized to bind Olivetti by resolution of its Board of Directors), certi- 138 147 fying, to the best of their knowledge, to the fulfillment of the conditions specified in Sections 9.1 and 9.2. 9.4 OLIVETTI NON-GOVERNMENTAL NOTICES. The notices required to be given by Olivetti, Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary in connection with the transactions contemplated by this Agreement or any Related Agreement set forth on Schedule 9.4 hereto shall have been given. 9.5 WAITING PERIODS. All waiting or review periods applicable to this Agreement and the transactions contemplated hereby under the HSR Act or, the German 1990 Act Against Restraint of Competition, the Italian Law on the Protection of Competition and the Market (Law No. 287 of Oct. 10, 1990), the Dutch Competition Act of May 22, 1997 and the Australian Foreign Acquisitions and Takeovers Act 1975 shall have expired or been earlier terminated. 9.6 NO INJUNCTION. Wang shall not be prohibited by any order, judgment, writ, injunction, decree, statute, rule or regulation of any Governmental Authority of competent jurisdiction from consummating the transactions contemplated by this Agreement or any Related Agreement. 9.7 GOVERNMENTAL ACTIONS. No suit, action or other proceeding shall have been initiated and remain in effect by any Governmental Authority seeking to enjoin or otherwise restrain the consummation of the transactions contemplated by this Agreement or any Related Agreement. 9.8 FINANCING. Wang shall have completed arrangements for financing with a group of lenders led by Bankers Trust Company in an aggregate principal amount of no less than U.S. $500,000,000 and on terms and conditions consistent with the Financing Plan of Wang dated February 12, 1998, a copy of which was made available to Olivetti prior to the date hereof, and shall have the availability of the aggregate principal amount able to be drawn thereunder. 9.9 ABSENCE OF ADVERSE CHANGE. Neither Olsy, Olsy Japan, Olsy Brazil and the Controlled Subsidiaries, taken as a whole, nor Olsy or any of the Major 139 148 Subsidiaries, taken separately, shall have suffered any material adverse change in their business, assets, properties, liabilities, results of operations or condition (financial or otherwise). 9.10 RELATED AGREEMENTS. The Related Agreements to which any of Wang, any Affiliate of Wang, Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary is a party shall have been executed and delivered by Olivetti and the other parties thereto in a form reasonably satisfactory to Wang. 9.11 OPINIONS. Olivetti shall have delivered to Wang the opinions of counsel reasonably acceptable to Wang, dated the Closing Date, covering the matters set forth on Exhibit 14 hereto. ARTICLE X SURVIVAL AND INDEMNIFICATION ---------------------------- 10.1 SURVIVAL. (a) The respective representations and warranties of Wang and Olivetti in this Agreement shall survive the Closing for a period of three years and shall terminate and be of no further force or effect as of the date three years after the Closing Date, except that (i) the representations and warranties of Olivetti in Sections 4.2, 4.3, 4.4 and 4.26 shall survive the Closing forever and shall not terminate, (ii) the representations and warranties of Olivetti in Section 4.18 shall survive the Closing for so long as any taxing authority could issue an assessment for Taxes for any Pre-Closing Period, (iii) the representations and warranties of Olivetti in Section 6.12(a) shall terminate and be of no further force or effect as of the Closing Balance Sheet Determination Date and (iv) the representations and warranties of Wang in Sections 5.2, 5.3 and 5.9 shall survive the Closing forever and shall not terminate. (b) The respective covenants and agreements of Olivetti and Wang in this Agreement shall survive the Closing and shall be fully effective and enforceable for the periods therein indicated or where not indicated, forever. 140 149 (c) Neither Olivetti nor Wang shall be entitled to any indemnification under Section 10.2 or 10.3 with respect to any breach of a representation or warranty, covenant or agreement after the termination thereof pursuant to Sections 10.1(a) or (b), except for claims previously asserted pursuant to Section 10.4(a). 10.2 INDEMNIFICATION BY OLIVETTI. (a) In addition to the indemnification pursuant to Section 7.2(a), Olivetti shall indemnify Wang and its Affiliates (including, without limitation, after the Closing Olsy, Olsy Japan, Olsy Brazil and the Controlled Subsidiaries) and their respective directors, officers, employees, agents and representatives (individually a "Wang Indemnified Person" and collectively the "Wang Indemnified Persons") against and hold them harmless from any loss, liability, damage, demand, claim, payment, cost, suit, action, cause of action, investigation, inquiry, judgment, award, assessment, interest, penalty or expense (including, without limitation, reasonable out-of-pocket expenses of investigation and reasonable attorneys' and consultants' fees) (any of the foregoing being hereinafter referred to individually as a "Loss" and collectively as "Losses") suffered or incurred by any such indemnified person for or on account of or arising from or in connection with: (i) any breach of any representation or warranty of Olivetti in this Agreement or any of the Indemnified Related Agreements (as defined in Section 12.11) or of any representation or warranty of Oliricerca in the Oliricerca Development and Corporation Agreement; (ii) any breach of any covenant or agreement of Olivetti in this Agreement or any of the Indemnified Related Agreements or of any covenant or agreement of Oliricerca in the Oliricerca Development and Cooperation Agreement; (iii) the La Defense Agreement; (iv) any of the Retained Liabilities (as defined in Section 12.11); (v) subject to the Indemnification Agreement (MIS) to be entered into by and among 141 150 Wang, Olsy and Olivetti simultaneously with the Closing, the IT Frame Agreement, dated as of July 24, 1996, among Olivetti, Syntax Processing S.p.A. and Sema Group plc to which Olsy became a party pursuant to a letter dated July 10, 1997; (vi) the amount by which the costs and expenses associated with the clean-up referred to in Section 1.8(a)(vii) exceeds the restructuring fund established therefor referred to in Section 1.8(a)(vii); (vii) UNITED STATES V. HELEN KRAMER, ET AL., STATE OF NEW JERSEY V. ALMO ANTIPOLLUTION SERVICES CORP. ET AL. or the Buzby Bros. landfill environmental matters; (viii) all civil cases pending in Italy against Olsy or any Controlled Subsidiary set forth on Schedule 10.2(a)(viii) hereto; (ix) any decision of the competent Italian authorities taken in relation to or arising out of the inquiries and investigations disclosed or required to be disclosed to Wang in the review referred to in Section 4.21(c) which affects the qualification of Olsy to participate in bids or auctions for supply of products services or support to Governmental Authorities in Italy; or (x) any matter set forth on an amendment or supplement to the Olivetti Disclosure Schedule (aa) pursuant to Section 6.4(a)(i)(aa) to the extent any such matter materially changes the disclosures on the Olivetti Disclosure Schedule or has an adverse effect on the business, assets, properties, liabilities, results of operation or condition (financial or otherwise) of Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary or (bb) pursuant to Section 6.4(a)(i)(bb). (b) Notwithstanding anything herein to the contrary: (i) Olivetti shall have no obligation to indemnify any Wang Indemnified Person pursuant to Sections 10.2(a)(i) or (ii) unless and until the aggregate amount of Losses incurred by Wang Indemnified Persons with respect thereto exceeds 20,000,000,000 Italian lira 142 151 (the "Olivetti Indemnification Threshold"), and then, subject to the immediately following clause (ii), Olivetti's obligation shall be to indemnify Wang Indemnified Persons to the full extent of such Losses (provided, however, that the representations and warranties of Olivetti in Sections 4.2, 4.4, 4.18 or 4.27 and the covenants or agreements of Olivetti in Articles I, II or III or Sections 4.5(a) (last sentence), 6.1(b)(xxvii), 6.5(b)-(f), 6.12(c), 6.13, 6.14, 6.17, 6.18, 6.19, 6.20, 6.21, 6.22, 6.23, 6.25(b), 6.26, 7.2(a), 7.6(b) or 10.2(a)(iii)-(x) shall not be subject to the Olivetti Indemnification Threshold); and (ii) Olivetti shall have no obligation to indemnify any Wang Indemnified Person or Wang Tax Indemnified Person pursuant to Sections 10.2(a)(i) or (ii) or 7.2(a) after it has paid an aggregate amount pursuant thereto equal to 500,000,000,000 Italian lira (the "Olivetti Indemnification Cap") (provided, however, that the representations and warranties of Olivetti in Sections 4.2, 4.4 or 4.27 and the covenants or agreements of Olivetti in Articles I, II or III or Sections 6.5(b)-(f), 6.12(c), 6.13, 6.14, 6.17, 6.18, 6.19, 6.20, 6.21, 6.22, 6.25(b), 6.26, or 10.2(a)(iii)-(x) shall not be subject to the Olivetti Indemnification Cap). Notwithstanding anything herein to the contrary, Olivetti shall have no obligation to indemnify any Wang Indemnified Person for Losses pursuant to Section 10.2(a)(i) with respect to Section 4.6(c) unless such Loss is suffered or incurred by such Wang Indemnified Person as a result of a demand, claim, suit, action, cause of action, investigation or inquiry made or brought by a Person not party to this Agreement or a Governmental Authority. Notwithstanding anything herein to the contrary, Olivetti shall have no obligation to indemnify Wang pursuant to Section 10.2(a)(ix) if the qualification can be re-obtained (or the striking of Olsy from any relevant log can be avoided) by a sale by Olivetti to Wang of all or part of the Wang Shares and Olivetti offers to sell the relevant number of Wang Shares to Wang at the then market value thereof. If Olivetti tenders all or part of the Wang Shares to Wang in order to avoid any obligation to indemnify Wang pursuant to Section 10.2(a)(ix) by sending Wang written notice to that effect, Wang shall have the obligation to acquire the Wang Shares so tendered by Olivetti at a per share price equal to the Average Market Price (as defined in Section 12.11) for the date of the written notice from Olivetti. 143 152 10.3 INDEMNIFICATION BY WANG. (a) In addition to the indemnification pursuant to Section 7.2(b), Wang shall indemnify Olivetti and the Olivetti Affiliates and their respective directors, officers, employees, agents and representatives (individually an "Olivetti Indemnified Person" and collectively the "Olivetti Indemnified Persons") against, and hold them harmless from, any Losses suffered or incurred by any such indemnified person for or on account of or arising from or in connection with: (i) any breach of any representation or warranty of Wang contained in this Agreement or any of the Indemnified Related Agreements; or (ii) any breach of any covenant or agreement of Wang contained in this Agreement or any of the Indemnified Related Agreements. (b) Notwithstanding anything herein to the contrary: (i) Wang shall have no obligation to indemnify any Olivetti Indemnified Person for Losses pursuant to Sections 10.3(a)(i) or (ii) unless and until the aggregate amount of Losses incurred by Olivetti Indemnified Persons with respect thereto exceeds 20,000,000,000 Italian lira (the "Wang Indemnification Threshold"), and then, subject to the immediately following clause (ii), Wang's obligation shall be to indemnify Olivetti Indemnified Persons to the full extent of such Losses (provided, however, that the representations and warranties of Wang in Sections 5.2, 5.3 or 5.13 and the covenants or agreements of Wang in Articles II or III or Sections 6.12(d), 6.13, 6.14, 6.17, 6.18, 6.25(a), 6.26, 7.2(b), 7.5 or 7.6(a) or the Ancillary Consideration Agreement shall not be subject to the Wang Indemnification Threshold); and (ii) Wang shall have no obligation to indemnify any Olivetti Indemnified Person or Olivetti Tax Indemnified Person pursuant to Sections 10.3(a)(i) or (ii) or 7.2(b) after it has paid an aggregate amount pursuant thereto equal to 500,000,000,000 Italian lira (the "Wang Indemnification Cap") (provided, however, that the representation and warranties of Wang in Sections 5.2, 5.3 or 5.13 and the covenants or agreements of Wang in Articles II or III or Sections 6.12(d), 6.13, 6.14, 6.17, 6.18, 6.25(a) or 6.26 or the Ancillary Consideration Agreement shall not be subject to the Wang Indemnification Cap). 144 153 10.4 PROCEDURES RELATING TO INDEMNIFICATION. (a) An indemnified person under Sections 10.2 or 10.3 (the "Indemnified Party") shall give prompt written notice to the indemnifying party (the "Indemnifying Party") of any Loss in respect of which such Indemnifying Party is obligated to indemnify such Indemnified Party under Sections 10.2 or 10.3, specifying in reasonable detail the nature of such Loss, the section or sections of this Agreement or any Related Agreement to which the Loss relates, and the amount of such Loss (or if not then determinable, its best estimate of the amount of such Loss), except that any delay or failure so to notify the Indemnifying Party shall only relieve the Indemnifying Party of its obligations hereunder to the extent, if at all, that it is prejudiced by reason of such delay or failure. (b) If a Loss is suffered or incurred for or on account of or arises from or in connection with any demand, claim, suit, action, cause of action, investigation or inquiry by a Person not party to this Agreement or a Governmental Authority (a "Third Party Claim"), the Indemnifying Party shall assume the defense thereof, including the employment of counsel reasonably satisfactory to the Indemnified Party and the payment of all expenses. The Indemnified Party shall have the right to employ separate counsel in such Third Party Claim and participate in such defense thereof, but the fees and expenses of such counsel shall be at the expense of the Indemnified Party. If the Indemnifying Party fails to assume the defense of any Third Party Claim within 20 days after notice thereof, the Indemnified Party shall have the right to undertake the defense, compromise or settlement of such Third Party Claim for the account of the Indemnifying Party, subject to the right of the Indemnifying Party to assume the defense of such Third Party Claim with counsel reasonably satisfactory to the Indemnified Party at any time prior to the compromise, settlement or final determination thereof. Anything in this Section 10.4 to the contrary notwithstanding, the Indemnifying Party shall not, without the Indemnified Party's prior written consent, settle or compromise any Third Party Claim or consent to the entry of any judgment with respect to any Third Party Claim which would have an adverse effect on the Indemnified Party. The Indemnifying Party may, without the Indemnified Party's prior written consent, compromise or settle any such Third 145 154 Party Claim or consent to entry of any judgment with respect to any Third Party Claim which requires solely money damages paid by the Indemnifying Party, and which includes as an unconditional term thereof the release by the claimant or the plaintiff of the Indemnified Party from all liability in respect of such Third Party Claim. If an Indemnifying Party refuses to pay, in whole or in part, any Loss suffered or incurred for or on account of or arising from or in connection with any Third Party Claim within 20 Business Days of receipt of notice from the Indemnified Party of such Loss, the matter shall be resolved in accordance with Section 12.12. (c) With respect to any Loss (other than any Loss suffered or incurred for or on account of or arising from or in connection with any Third Party Claim), the Indemnifying Party shall have 20 Business Days from receipt of notice from the Indemnified Party of such Loss within which to respond thereto. If the Indemnifying Party does not respond within such 20 Business Day period, the Indemnifying Party shall be deemed to have accepted responsibility to make payment and shall have no further right to contest the validity of such Loss. If the Indemnifying Party notifies the Indemnified Party within such 20 Business Day period that it rejects such Loss, in whole or in part, the matter shall be resolved in accordance with Section 12.12. (d) The amount of the obligation of any Indemnifying Party to any Indemnified Party under Sections 10.2 or 10.3 with respect to any Loss shall be determined after taking into account (i) any insurance proceeds or other indemnity payments actually received by such Indemnified Party with respect to such Loss at the time the amount of such obligation is determined and paid, (ii) the then present value of any reduction in Taxes to be paid by such Indemnified Party as result of such Loss, (iii) if the Indemnified Person owns, directly or indirectly, less than all of the outstanding capital stock of the Person to which such Loss relates, the percentage of the outstanding capital stock of the Person to which such Loss relates owned, directly or indirectly, by the Indemnified Person and (iv)(aa) in the case of any Wang Indemnified Person, any reserve specifically for the matter resulting in such Loss on the Closing Balance Sheet or (bb) in the case of any Olivetti Indemnified Party, any reserve specifically for the matter resulting 146 155 in such Loss on the books and records of Wang or its subsidiaries as of the Closing Date. Indemnified Parties shall use their commercially reasonable best efforts to collect any insurance proceeds or other indemnity payments to which they may be entitled with respect to any Loss, but the collection thereto shall not be a condition to or defer the obligation of any Indemnifying Party under Sections 10.2 or 10.3. If any Indemnified Party receives any insurance proceeds or other indemnity payments with respect to a Loss after such Loss has been determined and paid, such Indemnified Party shall promptly turn over such proceeds or payments to the Indemnifying Party who paid such Loss. (e) The procedures set forth in Sections 10.4(a), (b), (c) or (d) (and to the extent set forth in Sections 10.4(b) or (c), the dispute resolution procedures set forth in Section 12.12) shall apply to any Loss suffered or incurred for or on account of or arising from or in connection with any breach of any representation or warranty or covenant or agreement in any Indemnified Related Agreement unless such Indemnified Related Agreement specifically provides for alternative procedures and any such Loss shall remain subject to indemnification pursuant to Section 10.2 or 10.3, as the case may be, irrespective of which procedures apply. 10.5 CONSIDERATION FOR PAYMENT OF INDEMNIFICATION OBLIGATIONS. With respect to any indemnification obligation under this Article X, such obligation shall be satisfied by means of a payment in cash by the Indemnifying Party to the applicable Indemnified Party in an amount equal to the Loss incurred by such Indemnified Party; provided, however, that Wang has, in addition to any other rights it may have, at its option and without any further action, the right to be paid for any Loss not paid by Olivetti within ten days of Olivetti becoming obligated to pay such Loss pursuant to Sections 10.4(b), (c) or (d) pursuant to (a) the Letter of Credit until the Original Amount (as defined therein) is reduced to zero or the issuing bank thereof shall refuse to honor any proper draw of Wang thereunder and then (b) the Stock Escrow Agreement. 10.6 RECOVERY PRINCIPLES. (a) If the transactions contemplated by this Agreement are consummated, the indemnification provisions of Section 7.2 shall be 147 156 the sole and exclusive remedy of the parties hereto against one another with respect to the matters covered by Section 7.2. (b) If the transactions contemplated by this Agreement are consummated, the indemnification provisions of this Article X shall be the sole and exclusive remedy of the parties hereto against one another with respect to the matters covered by this Article X. (c) Whenever a party hereto may have more than one remedy hereunder for any matter, the remedy most specifically relating to such matter (and any indemnification hereunder for such remedy) shall be such party's sole and exclusive remedy hereunder for such matter. For avoidance of doubt, no party hereto may recover hereunder more than once for the same matter. (d) For avoidance of doubt, no party hereto may recover hereunder for any underfunding or overfunding of the plans set forth on Schedule 10.6(d). ARTICLE XI TERMINATION AND ABANDONMENT --------------------------- 11.1 TERMINATION. This Agreement may be terminated at any time prior to the Closing Date under the following circumstances: (a) by mutual consent of Wang and Olivetti; (b) by Wang at any time after April 20, 1998, if the Closing shall not have occurred by such date, unless the failure of such consummation shall be due to failure of Wang to have satisfied the conditions to Closing in Sections 8.1 or 8.2; or (c) by Olivetti at any time after April 20, 1998, if the Closing shall not have occurred by such date, unless the failure of such consummation shall be due to the failure of Olivetti to have satisfied the conditions to Closing in Sections 9.1 or 9.2. 148 157 11.2 PROCEDURE UPON TERMINATION. In the event of termination of this Agreement and abandonment of the transactions contemplated hereby by one of the parties hereto pursuant to Sections 11.1(b) or (c), notice thereof shall forthwith be given to the other party hereto and the transactions contemplated by this Agreement shall be abandoned, without further action by either of the parties hereto. If this Agreement is terminated as provided herein: (a) Olivetti and each of its Affiliates will redeliver to Wang or destroy (and if Olivetti elects to destroy, Olivetti shall certify as to the destruction of) all documents, work papers and other material of Wang relating to the transactions contemplated hereby, whether obtained before or after the execution hereof, and Wang will redeliver to Olivetti or destroy (and if Wang elects to destroy, Wang shall certify as to the destruction of) all documents, work papers and other material of Olivetti, Olsy, Olsy Japan, Olsy Brazil, any Subsidiary or any Olsy Japan Subsidiary relating to the transactions contemplated hereby, whether obtained before or after the execution hereof; (b) all confidential information received by any party hereto with respect to the business of any other party shall be treated in accordance with the Confidential Disclosure Agreements, dated as of December 11, 1996 and February 18, 1997 (the "Confidentiality Agreements"), between Olivetti and Wang; (c) this Agreement shall become wholly void and of no force or effect and no party hereto, nor its respective directors, officers, affiliates, representatives or advisors, shall have any liability or further obligation to any other party to this Agreement, except (i) for any breach of this Agreement by such party prior to the termination hereof, (ii) for any action taken prior to the termination hereof by Olivetti, any of its Affiliates, any of the directors, officers or employees of Olivetti or any of its Affiliates or any of its or any such Affiliate's investment bankers inconsistent with Section 6.2 and (iii) that Sections 6.8, 11.2(a) and 11.2(b) and (to the extent applicable to any breach referred to in clause (i), any action referred to in clause (ii) or Sections 6.8, 11.2(a) or 11.2(b)) Article 149 158 X and the Confidentiality Agreements shall survive any termination of this Agreement; and (d) all filings, applications and other submissions made pursuant to Section 6.6 shall, to the extent practicable, be withdrawn from the Governmental Authority to which made. ARTICLE XII MISCELLANEOUS PROVISIONS ------------------------ 12.1 AMENDMENT AND MODIFICATION. This Agreement may be amended, modified and supplemented only by written agreement of Wang and Olivetti. 12.2 WAIVER OF COMPLIANCE. Except as otherwise provided in this Agreement, any failure of any of the parties to comply with any obligation, covenant, agreement or condition herein may be waived by the party or parties entitled to the benefits thereof only by a written instrument signed by the party granting such waiver, but such waiver or failure to insist upon strict compliance with such obligation, covenant, agreement or condition shall not operate as a waiver of, or estoppel with respect to, any subsequent or other failure. Whenever this Agreement requires or permits consent by or on behalf of any party hereto, such consent shall be given in writing in a manner consistent with the notice provisions set forth in Section 12.3 and the requirements for a waiver of compliance as set forth in this Section 12.2. 12.3 NOTICES. All notices and other communications hereunder shall be in writing and shall be sent by hand delivery or overnight courier, in each case receipt acknowledged, registered or certified mail, in each case with postage prepaid and return receipt requested, to the respective parties at the following addresses: 150 159 If to Wang, to Wang Laboratories, Inc. 600 Technology Park Drive Billerica, MA 01821 United States Attention: Albert A. Notini, Senior Vice President, General Counsel and Secretary with a copy to Skadden, Arps, Slate, Meagher & Flom LLP One Beacon Street Boston, MA 02108 United States Attention: David T. Brewster, Esq. and Gianni, Origoni & Partners 20121 Milano Piazza Belgioioso, 2 Italy Attention: Avv. Mario Amoroso If to Olivetti, to Ing. C. Olivetti & C. S.p.A. Via Jervis, 77 10015 Ivrea Italy Attention: Dott. Vincenzo Cassibba Ing. Marino Bonamico with a copy to Erede & Associati Via Serbelloni, 12 20122 Milano Italy Attention: Avv. Umberto Nicodano and 151 160 Rogers & Wells 40 Basinghall Street London EC2V 5DE England Attention: Michael S. Immordino, Esq. Any party may change its address for receiving notice by written notice given to the other parties. All notices and other communications hereunder shall be deemed to have been duly given as of the earlier of (x) the date received at the address and in the manner provided above or (y) the date receipt is acknowledged. 12.4 ASSIGNMENT. This Agreement and all of the provisions hereof shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns, but neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any of the parties hereto without the prior written consent of the other parties, except (a) by operation of law, (b) that Wang may assign any of its rights (but not its obligations to the Sellers) under this Agreement to any one or more of its majority-owned subsidiaries, foreign or domestic, and (c) that Wang may grant a security interest in its entire right, title and interest in this Agreement to the party or parties from which it obtains the financing for the transactions contemplated hereby (provided, however, that until foreclosure of such security interest Wang shall at all times be the sole counterparty of Olivetti for any matter arising under this Agreement). 12.5 PUBLICITY. Neither Olivetti, on the one hand, nor Wang, on the other hand, shall make, issue or publish, or cause to be made, issued or published, any announcement or written statement concerning this Agreement, the Related Agreements or the transactions contemplated hereby or thereby for dissemination to the general public without the prior consent of the other party. This provision shall not apply, however, to any announcement or written statement required to be made by law or the regulations of any Governmental Authority or any stock exchange, except that the party required to make such announcement shall, whenever practicable, consult with the other party concerning the timing and content of such announcement before such announcement is made. 152 161 12.6 GOVERNING LAW. This Agreement shall be governed by the laws of the State of New York (without giving effect to the principles of conflicts of law thereof except for General Obligations Law Sections 5-1401 and 5-1402) as to all matters, including but not limited to, matters of validity, construction, effect, performance and remedies. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision. 12.7 COUNTERPARTS. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 12.8 HEADINGS. The table of contents, headings of the sections and articles of this Agreement are inserted for convenience only and shall not constitute a part hereof or affect in any way the meaning or interpretation of this Agreement. 12.9 ENTIRE AGREEMENT. This Agreement (including the Olivetti Disclosure Schedule, the Wang Disclosure Schedule and the other documents and certificates delivered pursuant hereto), the Related Agreements, the Indemnified Related Agreements, and the Confidentiality Agreements embody the entire agreement and understanding of the parties hereto in respect of the transactions contemplated by this Agreement. This Agreement supersedes all prior agreements, promises, covenants, arrangements, communications or representations or warranties, whether oral or written, by any officer, employee or representative of any party hereto (other than the Confidentiality Agreements which shall remain in full force and effect), including, without limitation, (a) the Memorandum of Understanding dated as of November 12, 1997, by and among Wang, Olivetti and Olsy, as amended by Amendment No. 1 thereto dated as of November 25, 1997 and Amendment No. 2 thereto dated as of December 17, 1997 and (b) the Letter of Intent, by and among Wang, Olivetti and Olsy dated as of January 31, 1998. 12.10 THIRD PARTIES. Nothing herein expressed or implied is intended or shall be construed to confer upon or give to any person or corporation other than the parties hereto and their successors or assigns, any rights or remedies under or by reason of this Agreement. 153 162 12.11 CERTAIN DEFINED TERMS. The following terms shall have the following meanings: AFFILIATE. The term "Affiliate" means, with respect to any Person, each Person, directly or indirectly, controlling, controlled by or under common control with such Person. ASSOCIATE. The term "Associate" means, with respect to any Person, any corporation or other business organization of which such Person is an officer or partner or is the beneficial owner, directly or indirectly, of 5% or more of any class of equity securities, any trust or estate in which such Person has a substantial beneficial interest or as to which such Person serves as a trustee or in a similar capacity and any spouse or child of such Person who has the same home as such Person. AVERAGE MARKET PRICE. The term "Average Market Price" means the average of the daily Current Market Prices of a share of Wang Common Stock during the 45 consecutive trading days immediately prior to the day in question. BEST KNOWLEDGE OF OLIVETTI. The term "Best Knowledge of Olivetti" means the knowledge of the Managing Director of Olivetti, any of the finance, treasury, legal, administration, human resources, industrial relations, real estate, intellectual property, tax or corporate development staff function directors of Olivetti or Marco De Benedetti acquired (a) in the performance of their respective duties in the ordinary course of business or (b) in the course of consulting (directly or indirectly and including, without limitation, through the distribution of questionnaires) with the general managers and controllers of each of Olsy, Olsy Japan, Olsy Brazil and the Controlled Subsidiaries and the functional reports of such staff function directors of Olivetti in connection with the transactions contemplated by this Agreement with respect to the subject matter of the pertinent representations or warranties or covenants or agreements of Olivetti herein (which consulting (including, without limitation, through the distribution of questionnaires) Olivetti hereby represents and warrants to Wang was conducted). BUSINESS DAY. The term "Business Day" means any day other than a Saturday, Sunday or a day on which commer- 154 163 cial banks in New York, New York or Milan, Italy are required or permitted by law to close. CONTRACT. The term "Contract" means any written or oral agreement, contract, understanding or other legally binding arrangement of any nature. CONTROL. The term "Control" (including the terms "controlling", "controlled by" and "under common control with") means the possession, directly or indirectly, of the power to direct or cause the direction or the management and policies of a Person, whether through ownership of voting securities or otherwise. CONTROLLED SUBSIDIARY. The term "Controlled Subsidiary" means any partnership, corporation, association, trust, joint venture, unincorporated organization, consortia (including, without limitations, pure consortia, mandatory consortia or societa consortili) or other entity (or groups including any of the foregoing), directly or indirectly, controlled by Olsy as of the date hereof. Olsy shall be deemed to control any partnership, corporation, association, trust, joint venture, unincorporated organization, consortia (including, without limitations, pure consortia, mandatory consortia or societa consortili) or other entity (or groups including any of the foregoing) in which Olsy, directly or indirectly, owns or controls any shares of stock or other ownership interests having ordinary voting power to elect a majority of the board of directors or other governing body of such partnership, corporation, association, trust, joint venture, unincorporated organization, consortia (including, without limitations, pure consortia, mandatory consortia or societa consortili) or other entity (or groups including any of the foregoing) as of the date hereof. For the avoidance of any doubt, the term "Controlled Subsidiary" shall include, without limitation, Olsy France, Olsy UK and Olsy Germany. The term "Controlled Subsidiaries" means all of the foregoing. CURRENT MARKET PRICE. The term "Current Market Price" of share of Wang Common Stock means the last reported sales price, regular way on such day, or, if no sale takes place on such day, the average of the reported closing bid and asked prices on such day, regular way, in either case as reported on the Nasdaq National Market System of the National Association of Securities Dealers, or, if such security is not quoted on such Nasdaq National Market, on the 155 164 principal national securities exchange on which such security is listed or admitted for trading on any national securities exchange, the average of the closing bid and asked prices on such day in the over-the-counter market as reported by Nasdaq or, if bid and asked prices for such security on such day shall not have been reported through Nasdaq, the average of the bid and asked prices on such day as furnished by any New York Stock Exchange member firm regularly making a market in such security selected for such purpose by Wang. DROP-DOWN. The term "Drop-Down" means the contribution of the assets and liabilities constituting the portion of the Business directly operated by Olivetti as well as the contribution of the equity participation in certain Subsidiaries made by Olivetti to Olsy (effective as of January 1, 1997) by the deed of contribution dated December 23, 1996 n. 38,550 (Rep n. 14,772 Notary Public Soudaz of Ivrea) as supplemented by the supplementary expertise dated June 16, 1997 approved at Olsy's Board of Directors Meeting held on June 30, 1997 and subsequent Olsy Shareholders' Meeting held on September 2, 1997 (Rep. n. 15,123 Notary Public Soudaz of Ivrea). EXCHANGE ACT. The term "Exchange Act" means the United States Securities and Exchange Act of 1934, as amended. GOVERNMENTAL AUTHORITY. The term "Governmental Authority" means any federal, state, local or foreign government, or any regulatory or administrative agency or instrumentality thereof (or any department, bureau or division thereof). INDEMNIFIED RELATED AGREEMENT. The term "Indemnified Related Agreement" means any agreement by and among or between any of the parties hereto that specifically provides that it is an Indemnified Related Agreement within the meaning of this Agreement and any agreement set forth on Schedule 12.11(a) hereto. ITALIAN GAAP. The term "Italian GAAP" means the accounting standards approved by the National Councils of "Dottori Commercialisti e Ragioneri," and in the absence thereof, those issued by the International Accounting Standards Committee. 156 165 LIEN. The term "Lien" means any title defect or objection, lien, claim, charge, security interest, easement, restriction, tenancy or other encumbrance of any nature whatsoever. MAJOR SUBSIDIARIES. The term "Major Subsidiaries" means the entities set forth in Schedule 12.11(b) hereto. MATERIAL ADVERSE EFFECT. The term "Material Adverse Effect" means a material adverse effect on or change in the business, assets, properties, liabilities, results of operations or condition (financial or otherwise) of Olsy, Olsy Japan, Olsy Brazil and the Controlled Subsidiaries, taken as a whole, or Olsy or any of the Major Subsidiaries, taken separately. NONCONTROLLED SUBSIDIARY. The term "Noncontrolled Subsidiary" means any partnership, corporation, association, trust, joint venture, unincorporated organization, consortia (including, without limitations, pure consortia, mandatory consortia or societa consortili) or other entity (or group including any of the foregoing) in which Olsy, directly or indirectly, owns or controls any shares of stock or other ownership interest as of the date hereof other than a Controlled Subsidiary. The term "Noncontrolled Subsidiaries" means all of the foregoing. OFFICIAL. The term "Official" means any officer or employee of a Governmental Authority or political party, or any person acting in an official capacity for or on behalf of such Governmental Authority or political party. OLGA. The term "OLGA" means general accounting policies reflected in the "OLGA II - 1997 Accounting Manual O.S." previously delivered by Olivetti to Wang. OLIVETTI AFFILIATE. The term "Olivetti Affiliate" means any Affiliate of Olivetti other than Olsy, Olsy Japan, Olsy Brazil, any Subsidiary or any Olsy Japan Subsidiary. OLSY JAPAN SUBSIDIARY. The term "Olsy Japan Subsidiary" means any partnership, corporation, association, trust, joint venture, unincorporated organization, consortia (including, without limitations, pure consortia, mandatory consortia or societa consortili) or other entity (or groups including any of the foregoing) in which Olsy Japan, di- 157 166 rectly or indirectly, owns or controls any shares of stock or other ownership interest as of the date hereof. PERSON. The term "Person" means any individual, partnership, corporation, association, trust, joint venture, unincorporated organization, consortia (including, without limitations, pure consortia, mandatory consortia or societa consortili) or other entity (or group including any of the foregoing) other than any Governmental Authority. REAL ESTATE AGREEMENT. The term "Real Estate Agreement" means any agreement set forth on Schedule 12.11(c) hereto. RELATED AGREEMENT. The term "Related Agreement" means any agreement by and among or between any of the parties hereto that specifically provides that it is an Indemnified Related Agreement within the meaning of this Agreement, any Real Estate Agreement and any agreement set forth on Schedule 12.11(d) hereto. RETAINED LIABILITIES. The term "Retained Liabilities" means (a) all liabilities or obligations of Olivetti or any Affiliate of Olivetti (whether reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured or unsecured) other than the liabilities or obligations of Olsy, Olsy Japan, Olsy Brazil or any Subsidiary (including, without limitation, the liabilities of Olsy, Olsy Japan, Olsy Brazil or any Subsidiary reflected on the 9/30/97 Italian GAAP Balance Sheet or incurred after the date of the 9/30/97 Italian GAAP Balance Sheet by any of them in the ordinary course of business and consistent with past practice) and (b) the liabilities or obligations of Olsy, Olsy Japan, Olsy Brazil or any Controlled Subsidiary transferred to Olivetti or an Olivetti Affiliate pursuant to Sections 1.2, 1.3, 1.4, 1.5, 1.6, 1.8, 1.13 or otherwise pursuant to this Agreement. SECURITIES ACT. The term "Securities Act" means the United States Securities Act of 1933, as amended. SEC. The term "SEC" means the United States Securities Exchange Commission. 158 167 SUBSIDIARY. The term "Subsidiary" means any Controlled Subsidiary or Noncontrolled Subsidiary. The terms "Subsidiaries" means all of the foregoing. WHOLLY-OWNED SUBSIDIARY. The term "Wholly-Owned Subsidiary" means any Controlled Subsidiary in which Olsy owns or controls all of the outstanding shares of stock or other ownership interest. 12.12 DISPUTE RESOLUTION. (a) Except as otherwise provided in Sections 6.2, 6.13, 6.14, 6.18(c), 6.19, 7.1(c) or 12.12(c) or any Related Agreement, any dispute, controversy or claim arising out of or relating to this Agreement or any of the Related Agreements, or the breach, termination or validity thereof ("Dispute"), shall be finally resolved in accordance with the Rules (as defined in Section 6.13) then in effect, except as modified herein. (b) The arbitration shall be held in London, England. The arbitration proceedings shall be conducted and the award shall be rendered in the English language. There shall be three arbitrators of whom each the claimant and the respondent shall nominate one. The claimant shall nominate its arbitrator in its Request For Arbitration which shall also include its statement of claim. The respondent shall nominate its arbitrator in its Answer. The two arbitrators so appointed shall nominate a third arbitrator to serve as presiding arbitrator, such nomination to be made within 30 days of the nomination of the second arbitrator. If any arbitrator has not been nominated within the time limits specified herein, such appointment shall be made by the International Chamber of Commerce Court of Arbitration in accordance with the Rules. The hearing shall be held, if possible, within 120 days of the confirmation of the third arbitrator, and the tribunal shall render its award within 30 days of the conclusion of the hearing. (c) By agreeing to arbitration the parties do not intend to deprive any court of its jurisdiction to issue a prearbitral injunction, prearbitral attachment or other order in aid of arbitration proceedings or the enforcement of any award. Without prejudice to such provisional remedies as may be available under the jurisdiction of a national court, the arbitral tribunal shall have full authority to grant provisional remedies and to award damages for the failure of any party to respect the arbitral tribunal's order to that effect. Nothing in this Agreement shall 159 168 limit the rights of either party, either before or during the pendency of the arbitration proceedings, to seize and foreclose (through judicial foreclosure or otherwise) against any funds, securities or any other real or personal property placed as collateral, guarantee, bond or security under this Agreement. (d) The arbitrators shall have the authority to award any remedy or relief that is not in conflict with the provisions of this Agreement including, without limitation, specific performance of any obligation created hereunder and the issuance of permanent injunctive relief; provided, however, that the arbitrators shall have no authority to award punitive or exemplary damages or any other monetary damages not measured by the prevailing party's actual damages. (e) The award shall be final and binding upon the parties and shall be the sole and exclusive remedy between the parties regarding any claims, counter-claims, issues, or accounting presented to the arbitral tribunal. Judgment upon any award may be entered in any court having jurisdiction thereof. Any monetary award shall be made and promptly payable in U.S. dollars, and the arbitral tribunal shall have the authority in its discretion to grant pre-award and post-award interest at commercial rates. Any arbitration proceedings, decision or award rendered hereunder shall be governed by the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 1958. (f) Service of all notices, statements and written communications shall be at the addresses specified in Section 12.3 of this Agreement and in accordance with the Rules. (g) The rights and obligations of the parties shall remain in full force and effect pending the award in any arbitration proceeding hereunder, except that if this Agreement is terminated in accordance with Article XI, only the rights and obligations which survive such termination shall so remain in full force and effect. (h) The arbitration conducted pursuant to this Agreement shall be confidential. Neither party shall disclose or permit the disclosure of any of the documents produced by the other party in the arbitration proceedings 160 169 or the existence, contents or results of any proceeding except as may be required by a Governmental Authority or as required in an action in aid of arbitration or for enforcement of an arbitral award. Before making any disclosure permitted by the preceding sentence, the party intending to make such disclosure shall if practicable give the other party reasonable written notice of the intended disclosure and afford the other party a reasonable opportunity to protect its interests. (i) The parties unconditionally and irrevocably agree to submit to the non-exclusive jurisdiction of the courts located in London, England for the purpose of any proceedings in aid of arbitration, for pre-arbitral attachment or injunction, for enforcement of an arbitral award or for any claim by Wang under Section 6.2 and unconditionally and irrevocably waive any objections which they may have now or in the future to such jurisdiction including, without limitation, objections by reason of lack of personal jurisdiction, improper venue, or inconvenient forum. The parties expressly agree that leave to appeal under Section 45 or 69 of the English Arbitration Act 1996 may not be sought with respect to any question of law arising in the course of the arbitration or with respect to any award made. (j) The arbitral tribunal may consolidate any arbitration arising under or relating to this Agreement, with any arbitration arising under or relating to any of the Related Agreements, if the subject matter of the Dispute arises out of or relates essentially to the same set of facts or transactions. In any consolidated proceedings, any or all of Wang, Wang Nederland and their respective Affiliates that participate shall be treated as one party and any or all of Olivetti, Olivetti Sistemas, Olivetti Brazil and their respective Affiliates that participate shall be treated as one party. Such consolidated arbitration shall be determined by the arbitral tribunal appointed for the arbitration proceeding that was commenced first in time. 12.13. MISCELLANEOUS. A chart of all defined terms used in this Agreement and the respective section in which they are defined is set forth on Schedule 12.13. 161 170 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be signed by their duly authorized officers as of the date first above written. WANG LABORATORIES, INC. Attest: By: /s/ JOSEPH M. TUCCI ----------------------------------- Name: JOSEPH M. TUCCI Title: CHAIRMAN AND CHIEF EXECUTIVE OFFICER - ---------------------------- Title: WANG NEDERLAND BV Attest: By: /s/ ALBERT A. NOTINI ----------------------------------- Name: ALBERT A. NOTINI Title: DIRECTOR - ----------------------------- Title: ING. C. OLIVETTI & C. S.P.A. Attest: By: /s/ ROBERTO COUANINNO ----------------------------------- Name: ROBERTO COUANINNO Title: ??????????????? - ----------------------------- Title: 171 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be signed by their duly authorized officers as of the date first above written. WANG LABORATORIES, INC. Attest: By: /s/ ----------------------------------- Name: Title: - ---------------------------- Title: WANG NEDERLAND BV Attest: By: /s/ ----------------------------------- Name: Title: - ----------------------------- Title: ING. C. OLIVETTI & C. S.P.A. Attest: By: /s/ ROBERTO COUANINNO ----------------------------------- Name: ROBERTO COUANINNO Title: ??????????????? - ----------------------------- Title: 172 OLIVETTI SISTEMAS E SERVICIOS LIMITADA Attest: By: /s/ MARINO BONARICO ------------------------------------ Name: MARINO BONARICO Title: ATTORNEY-IN-FACT - -------------------------------- Title: OLIVETTI DO BRASIL S.A. Attest: By: /s/ MARINO BONARICO ----------------------------------- Name: MARINO BONARICO Title: ATTORNEY-IN-FACT - -------------------------------- Title: EX-3 4 CREDIT AGREEMENT 1 Exhibit 3 ================================================================================ CREDIT AGREEMENT among WANG LABORATORIES, INC., VARIOUS SUBSIDIARY BORROWERS, VARIOUS LENDING INSTITUTIONS, BANKERS TRUST COMPANY, AS ADMINISTRATIVE AGENT AND ARRANGER and NATIONAL WESTMINSTER BANK PLC, AS SYNDICATION AGENT AND ARRANGER and LEHMAN COMMERCIAL PAPER INC., AS DOCUMENTATION AGENT AND CO-ARRANGER ------------------------------------ Dated as of March 13, 1998 ------------------------------------ $500,000,000 ================================================================================ 2 TABLE OF CONTENTS ----------------- Page ---- SECTION 1. Amount and Terms of Credit................................. 1 1.01 Commitment................................................. 1 1.02 Minimum Borrowing Amounts, etc............................. 4 1.03 Notice of Borrowing........................................ 4 1.04 Disbursement of Funds...................................... 5 1.05 Notes ..................................................... 6 1.06 Conversions................................................ 6 1.07 Pro Rata Borrowings, etc................................... 7 1.08 Interest................................................... 7 1.09 Interest Periods........................................... 8 1.10 Increased Costs, Illegality, etc........................... 10 1.11 Compensation............................................... 12 1.12 Change of Lending Office................................... 13 1.13 Replacement of Lenders..................................... 13 SECTION 2. Letters of Credit.......................................... 14 2.01 Letters of Credit.......................................... 14 2.02 Lender Default............................................. 15 2.03 Letter of Credit Requests; Notices of Issuance............. 15 2.04 Agreement to Repay Letter of Credit Drawings............... 16 2.05 Letter of Credit Participations............................ 16 2.06 Increased Costs............................................ 19 SECTION 3. Fees; Commitments.......................................... 20 3.01 Fees ..................................................... 20 3.02 Voluntary Reduction of Commitments......................... 21 3.03 Mandatory Adjustments of Commitments, etc.................. 21 SECTION 4. Payments................................................... 22 4.01 Voluntary Prepayments...................................... 22 4.02 Mandatory Prepayments...................................... 23 4.03 Method and Place of Payment................................ 24 4.04 Net Payments............................................... 25 SECTION 5. Conditions Precedent....................................... 28 5.01 Conditions Precedent to Closing Date....................... 28 5.02 Conditions Precedent to the Full Utilization Date.......... 32 5.03 Conditions Precedent to All Credit Events.................. 34 SECTION 6. Representations, Warranties and Agreements................. 34 6.01 Corporate Status........................................... 34 6.02 Corporate Power and Authority.............................. 35 3 Page ---- 6.03 No Violation............................................... 35 6.04 Litigation................................................. 35 6.05 Use of Proceeds; Margin Regulations........................ 35 6.06 Governmental Approvals..................................... 36 6.07 Investment Company Act..................................... 36 6.08 Public Utility Holding Company Act......................... 36 6.09 True and Complete Disclosure............................... 36 6.10 Financial Condition; Financial Statements.................. 37 6.11 Security Interests......................................... 38 6.12 Representations and Warranties in Documents................ 38 6.13 Tax Returns and Payments................................... 39 6.14 Compliance with ERISA...................................... 39 6.15 Subsidiaries............................................... 40 6.16 Intellectual Property...................................... 40 6.17 Environmental Matters...................................... 41 6.18 Labor Relations............................................ 42 6.19 Existing Indebtedness...................................... 42 6.20 Compliance with Statutes, etc.............................. 42 6.21 Acquisition................................................ 42 SECTION 7. Affirmative Covenants...................................... 42 7.01 Information Covenants...................................... 43 7.02 Books, Records and Inspections............................. 45 7.03 Insurance.................................................. 45 7.04 Payment of Taxes........................................... 45 7.05 Corporate Franchises....................................... 46 7.06 Compliance with Statutes, etc.............................. 46 7.07 ERISA ..................................................... 46 7.08 Good Working Order......................................... 47 7.09 End of Fiscal Years; Fiscal Quarters....................... 47 7.10 Additional Security; Further Assurances.................... 48 7.11 Compliance with Environmental Laws......................... 48 7.12 Material Subsidiaries...................................... 48 SECTION 8. Negative Covenants......................................... 49 8.01 Changes in Business........................................ 49 8.02 Consolidation, Merger, Sale or Purchase of Assets, etc..... 49 8.03 Liens ..................................................... 51 8.04 Indebtedness............................................... 53 8.05 Capital Expenditures....................................... 55 8.06 Advances, Investments and Loans............................ 55 8.07 Prepayments of Indebtedness, etc........................... 56 8.08 Dividends, etc............................................. 57 (ii) 4 Page ---- 8.09 Transactions with Affiliates............................... 58 8.10 Current Ratio.............................................. 58 8.11 Leverage Ratio............................................. 59 8.12 Minimum Consolidated EBITDA................................ 59 8.13 Minimum Interest Coverage.................................. 59 8.14 Minimum Consolidated Net Worth............................. 60 8.15 Limitation On Issuance of Stock............................ 60 8.16 Creation of Subsidiaries................................... 60 SECTION 9. Events of Default.......................................... 60 9.01 Payments................................................... 60 9.02 Representations, etc....................................... 60 9.03 Covenants.................................................. 60 9.04 Default Under Other Agreements............................. 61 9.05 Bankruptcy, etc............................................ 61 9.06 ERISA ..................................................... 62 9.07 Security Documents......................................... 62 9.08 Guaranties................................................. 62 9.09 Judgments.................................................. 63 9.10 Full Utilization Date...................................... 63 SECTION 10. Definitions............................................... 64 SECTION 11. Agents, etc............................................... 98 11.01 Appointment............................................... 98 11.02 Nature of Duties.......................................... 98 11.03 Lack of Reliance on the Agents............................ 98 11.04 Certain Rights of the Agents.............................. 99 11.05 Reliance.................................................. 99 11.06 Indemnification........................................... 99 11.07 The Agents in Their Individual Capacities.................100 11.08 Holders...................................................100 11.09 Resignation by an Agent...................................100 SECTION 12. Miscellaneous.............................................101 12.01 Payment of Expenses, etc..................................101 12.02 Right of Setoff...........................................102 12.03 Notices...................................................102 12.04 Benefit of Agreement......................................102 12.05 No Waiver; Remedies Cumulative............................104 12.06 Payments Pro Rata.........................................105 (iii) 5 Page ---- 12.07 Calculations; Computations................................105 12.08 Governing Law; Submission to Jurisdiction; Venue; Waiver of Jury Trial...................................106 12.09 Counterparts..............................................107 12.10 Effectiveness.............................................107 12.11 Headings Descriptive......................................108 12.12 Amendment or Waiver.......................................108 12.13 Survival..................................................108 12.14 Domicile of Loans.........................................108 12.15 Confidentiality...........................................108 12.16 Lender Register...........................................109 12.17 Judgment Currency.........................................109 12.18 Euro .....................................................110 12.19 Covenant to Pay...........................................110 12.20 Sharing...................................................111 SECTION 13. Guaranty..................................................111 13.01 The Guaranty..............................................111 13.02 Bankruptcy................................................112 13.03 Nature of Liability.......................................112 13.04 Independent Obligation....................................112 13.05 Authorization.............................................113 13.06 Reliance..................................................114 13.07 Subordination.............................................114 13.08 Waiver....................................................114 13.09 Enforcement...............................................115 ANNEX I -- Commitments ANNEX II -- Lenders Addresses ANNEX III -- Plans ANNEX IV -- Subsidiaries ANNEX V -- Proposed Dispositions ANNEX VI -- Existing Indebtedness ANNEX VII -- Existing Liens ANNEX VIII -- Existing Investments ANNEX IX -- Affiliate Transactions ANNEX X -- Limits on Foreign Subsidiary Investments EXHIBIT A -- Form of Notice of Borrowing (iv) 6 EXHIBIT B-1 -- Form of USF Note EXHIBIT B-2 -- Form of MCF Note EXHIBIT B-3 -- Form of Lira Note EXHIBIT B-4 -- Form of Swingline Note EXHIBIT C -- Form of Letter of Credit Request EXHIBIT D -- Form of Section 4.04 Certificate EXHIBIT E-1 -- Form of Opinions of Skadden, Arps, Slate, Meagher & Flom LLP and Alan Cormier, Esq. EXHIBIT E-2 -- Form of Opinion of White & Case LLP EXHIBIT F-1 -- Form of Officers' Certificate - Closing Date EXHIBIT F-2 -- Form of Officers' Certificate - Full Utilization Date EXHIBIT G -- Form of US Guaranty EXHIBIT H -- Form of US Pledge Agreement EXHIBIT I -- Form of US Security Agreement EXHIBIT J -- Form of Consent Letter EXHIBIT K -- Form of Solvency Certificate EXHIBIT L -- Form of Assignment Agreement (v) 7 CREDIT AGREEMENT, dated as of March 13, 1998, among WANG LABORATORIES, INC., a Delaware corporation, WANG NEDERLAND B.V., a Dutch company and upon its becoming party hereto as contemplated by Section 5.02(a) OLIVETTI SOLUTIONS SPA, the lenders from time to time party hereto (each, a "Lender" and, collectively, the "Lenders"), BANKERS TRUST COMPANY as Administrative Agent and Arranger, NATIONAL WESTMINSTER BANK PLC, as Syndication Agent and Arranger and LEHMAN COMMERCIAL PAPER INC. as Documentation Agent and Co-Arranger. Unless otherwise defined herein, all capitalized terms used herein and defined in Section 10 are used herein as so defined. W I T N E S E T H : WHEREAS, subject to and upon the terms and conditions herein set forth, the Lenders are willing to make available to the Borrowers the credit facilities provided for herein; NOW, THEREFORE, IT IS AGREED: SECTION 1. AMOUNT AND TERMS OF CREDIT. 1.01 COMMITMENT. (A) Subject to and upon the terms and conditions herein set forth, each USF Lender severally agrees, at any time and from time to time on and after the Closing Date and prior to the Final Maturity Date, to make a loan or loans (each, a "USF Loan" and, collectively, the "USF Loans") to WLI, which USF Loans (i) shall be made and maintained in Dollars; (ii) except as hereinafter provided, may, at the option of WLI, be incurred and maintained, and/or converted into Base Rate Loans or Eurodollar Loans, provided that all USF Loans made as part of the same Borrowing shall, unless otherwise specifically provided herein, consist of USF Loans of the same Type; (iii) may be repaid and reborrowed in accordance with the provisions hereof; and (iv) shall not exceed for any USF Lender at the time of the making of any such USF Loan, and after giving effect thereto, that aggregate Principal Amount which, when added to the sum of (I) the aggregate Principal Amount of all other USF Loans made by such USF Lenders then outstanding and (II) such USF Lender's Percentage of (x) the USF Letter of Credit Outstandings at such time and (y) the outstanding principal amount of Swingline Loans at such time, equals the USF Commitment of such USF Lender at such time. (B) Subject to and upon the terms and conditions herein set forth, each MCF Lender severally agrees, at any time and from time to time on and after the Closing Date and prior to the Final Maturity Date, to make a loan or loans (each, a "MCF Loan" and, collect- 8 ively, the "MCF Loans") to one or more of the MCF Borrowers (on a several basis), which MCF Loans (i) may be made and maintained in such Approved Currency as is requested by the applicable MCF Borrower; (ii) may be repaid and reborrowed in accordance with the provisions hereof; (iii) shall not (w) be made to the Italian Borrower prior to the Full Utilization Date, (x) exceed $150,000,000 in Principal Amount at any time outstanding prior to the Full Utilization Date, (y) in the case of MCF Loans made to WLI, exceed $150,000,000 in Principal Amount at any time outstanding or (z) in the case of MCF Loans denominated in Spanish Pesetas, Danish Krone, Belgian Francs and Dutch Guilders, exceed $50,000,000 in Principal Amount for any one such currency at any time outstanding; and (iv) shall not exceed for any MCF Lender at the time of the making of any such MCF Loan, and after giving effect thereto, that aggregate Principal Amount which, when added to (I) the aggregate Principal Amount of all other MCF Loans made by such MCF Lender then outstanding and (II) such MCF Lender's Percentage of the MCF Letter of Credit Outstandings at such time, equals the MCF Commitment of such MCF Lender at such time, PROVIDED that all then outstanding MCF Loans denominated in Italian Lira shall be repaid on the Full Utilization Date and then and thereafter the Lira Lender shall alone make all Lira Loans. (C) The Lira Lender shall not be required to make any Lira Loan while a Lender Default exists with respect to a MCF Lender unless the Lira Lender has entered into arrangements satisfactory to it and the Italian Borrower to eliminate its risk with respect to the participation of the Defaulting Lender or Lenders in any such Lira Loan (including by way of example cash collateralization of each such Defaulting Lender's MCF Percentage of such requested Lira Loan). The Lira Lender will not make any Lira Loan after it has received a written notice (not subsequently withdrawn) from WLI or the Required Lenders that one or more of the applicable conditions to the Credit Events specified in Section 5.02 are not then satisfied. (D) At any time when an Acceleration Event has occurred and/or a default in the payment of principal or interest on the Lira Loans exists, the Lira Lender may, on any Business Day and in its sole discretion, give notice (which notice shall be deemed to be given upon the occurrence of any Acceleration Event or any other bankruptcy, insolvency or similar proceedings in respect of any Designated Party if the Lira Lender is prohibited from giving such notice under applicable law) to each MCF Lender that each such MCF Lender is required to purchase, and each such MCF Lender (other than the Lira Lender) hereby irrevocably agrees to promptly purchase from the Lira Lender (without recourse or warranty), an assignment of the outstanding Lira Loans as shall be necessary to cause each such MCF Lender, to share in the outstanding Lira Loans ratably based on its respective MCF Percentage, PROVIDED that all interest payable on each outstanding Lira Loan shall, not withstanding any other provision of this Agreement, be for the account of the Lira Lender from the date of any such notice until the date the respective participation or assignment is purchased by such Lender. Each purchase of a participation or assignment by a MCF Lender under this Section 1.01(D) shall -2- 9 be effected in Italian Lira. The Lira Lender shall not make any Lira Loan on and after the date on which it gives any notice contemplated by this Section 1.01(D). (E) Subject to and upon the terms and conditions herein set forth, the Swingline Lender agrees to make at any time and from time to time after the Closing Date and prior to the Swingline Expiry Date, a loan or loans to WLI (each, a "Swingline Loan" and, collectively, the "Swingline Loans"), which Swingline Loans (i) shall be made and maintained as Base Rate Loans, (ii) may be repaid and reborrowed in accordance with the provisions hereof, (iii) shall not exceed (giving effect to any incurrence thereof and the use of the proceeds of such incurrence) in aggregate principal amount at any time outstanding that amount which, when combined with the aggregate principal amount of all USF Loans made by Non-Defaulting Lenders then outstanding and the USF Letter of Credit Outstandings at such time, equals the Adjusted Total USF Commitment then in effect (after giving effect to any changes thereto on such date) and (iv) shall not exceed in aggregate principal amount at any time outstanding the Maximum Swingline Amount. The Swingline Lender will not make a Swingline Loan after it has received written notice from the Required Lenders that one or more of the applicable conditions to Credit Events specified in Section 5.02 are not then satisfied until such conditions are satisfied. (F) On any Business Day, the Swingline Lender may, in its sole discretion, give notice to the USF Lenders that its outstanding Swingline Loans shall be funded with a Borrowing of USF Loans (PROVIDED that each such notice shall be deemed to have been automatically given upon the occurrence of an Event of Default under Section 9.05 with respect to WLI or upon the exercise of any of the remedies provided in the last paragraph of Section 9), in which case a Borrowing of USF Loans constituting Base Rate Loans (each such Borrowing, a "Mandatory Borrowing") shall be made on the immediately succeeding Business Day by all USF Lenders that are Non-Defaulting Lenders PRO RATA based on each such USF Lender's Percentage, and the proceeds thereof shall be applied directly to repay the Swingline Lender for such outstanding Swingline Loans. Each USF Lender hereby irrevocably agrees to make Base Rate Loans upon one Business Day's notice pursuant to each Mandatory Borrowing in the amount and in the manner specified in the preceding sentence and on the date specified in writing by the Swingline Lender notwithstanding: (i) that the amount of the Mandatory Borrowing may not comply with the Minimum Borrowing Amount otherwise required hereunder, (ii) whether any conditions specified in Section 5.02 are then satisfied, (iii) whether a Default or an Event of Default has occurred and is continuing, (iv) the date of such Mandatory Borrowing and (v) the amount of the Total USF Commitment at such time. In the event that any Mandatory Borrowing cannot for any reason be made on the date otherwise required above (including, without limitation, as a result of the commencement of a proceeding under the Bankruptcy Code in respect of the Borrower), each USF Lender that is a Non-Defaulting Lender (other than BTCo) hereby agrees that it shall forthwith purchase from the Swingline Lender (without recourse or warranty) such assignment of the outstanding -3- 10 Swingline Loans as shall be necessary to cause such USF Lenders to share in such Swingline Loans ratably based upon their respective Percentages, PROVIDED that all interest payable on the Swingline Loans shall be for the account of the Swingline Lender until the date the respective assignment is purchased and, to the extent attributable to the purchased assignment, shall be payable to the USF Lender purchasing same from and after such date of purchase. 1.02 MINIMUM BORROWING AMOUNTS, ETC. The aggregate principal amount of each Borrowing shall not be less than the Minimum Borrowing Amount. More than one Borrowing may be incurred on any day, PROVIDED that at no time shall there be outstanding more than 10 Borrowings of Eurodollar Loans under the US Facility and no more than 20 Borrowings under the MC Facility. 1.03 NOTICE OF BORROWING. (a) Whenever (I) WLI desires to incur USF Loans, it shall give the Administrative Agent at its Notice Office, (x) prior to 12:00 Noon (New York time) at least three Business Days' prior written notice (or telephonic notice promptly confirmed in writing) of each Borrowing of Eurodollar Loans and (y) prior to 12:00 Noon (New York time) at least one Business Day's prior written notice (or telephonic notice promptly confirmed in writing) of each Borrowing of Base Rate Loans and (II) a Borrower desires to incur MCF Loans, it shall give the Administrative Agent at its Notice Office prior to 12:00 Noon (London time) at least three Business Days' (one Business Day in the case of Pound Sterling-denominated Loans) prior written notice (or telephonic notice promptly confirmed in writing) of each Borrowing of such MCF Loans, provided that Lira Loans will be made upon such written notice (or telephonic notice promptly confirmed in writing) being given to the Lira Lender (with a copy to the Administrative Agent) by the Italian Borrower as agreed by such parties. Each such notice (each, a "Notice of Borrowing") shall be in the form of Exhibit A and shall be irrevocable and shall specify (i) the identity of the Borrower, (ii) the Facility pursuant to which such Borrowing is being made and, in the case of MCF Loans, the Approved Currency for such Loans, (iii) the aggregate principal amount of the Loans to be made pursuant to such Borrowing (stated in the applicable Approved Currency), (iv) the date of Borrowing (which shall be a Business Day), (v) in the case of USF Loans, whether the respective Borrowing shall consist of Base Rate Loans or Eurodollar Loans and (vi) if MCF Loans or Eurodollar Loans, the Interest Period to be initially applicable thereto. The Administrative Agent shall promptly give each Lender written notice (or telephonic notice promptly confirmed in writing) of each proposed Borrowing, of the portion, if any, thereof to be funded by such Lender and of the other matters covered by the Notice of Borrowing. (b) (i) Whenever WLI desires to incur Swingline Loans, it shall give the Swingline Lender, prior to 2:00 P.M. (New York time) on the day such Swingline Loan is to be made, written notice (or telephonic notice promptly confirmed in writing) of each Swingline Loan to be made hereunder. Each such notice shall be irrevocable and shall specify in each case (x) the date of such Borrowing (which shall be a Business Day) and (y) the aggregate principal amount of the Swingline Loans to be made pursuant to such Borrowing. -4- 11 (ii) Mandatory Borrowings shall be made upon the notice specified in Section 1.01(F), with WLI irrevocably agreeing, by its incurrence of any Swingline Loan, to the making of Mandatory Borrowings as set forth in such Section 1.01(F). (c) Without in any way limiting the obligation of any Borrower to confirm in writing any telephonic notice permitted to be given hereunder, the Administrative Agent or the Lira Lender (in the case of Lira Loans) may prior to receipt of written confirmation act without liability upon the basis of such telephonic notice, believed by it in good faith to be from an Authorized Officer of such Borrower. In each such case, each Borrower hereby waives the right to dispute the Administrative Agent's or Lira Lender's record of the terms of such telephonic notice absent manifest error. 1.04 DISBURSEMENT OF FUNDS. (a) No later than (i) 12:00 Noon (Local time) on the date specified in each Notice of Borrowing, each Lender required to participate in a Syndicated Borrowing will make available its PRO RATA share of such Borrowing requested to be made on such date and (ii) 2:00 P.M. (New York time) on each date for the making of Swingline Loans, the Swingline Lender will make available the amount of such Swingline Loans, in each case in the manner provided below. All such amounts shall be made available to the Administrative Agent in the relevant Approved Currency and immediately available funds at the Payment Office and the Administrative Agent promptly will make available to the applicable Borrower by depositing to its account at the Payment Office the aggregate of the amounts so made available in the type of funds received. Lira Loans shall be made available by the Lira Lender to the Italian Borrower no later than 12:00 Noon (Milan time) in such manner as is agreed by such parties. Unless the Administrative Agent shall have been notified by any Lender required to participate in a Syndicated Borrowing prior to the date of Borrowing that such Lender does not intend to make available to the Administrative Agent its portion of the Syndicated Borrowing or Borrowings to be made on such date, the Administrative Agent may assume that such Lender has made such amount available to the Administrative Agent on such date of Borrowing, and the Administrative Agent, in reliance upon such assumption, may (in its sole discretion and without any obligation to do so) make available to the applicable Borrower a corresponding amount. If such corresponding amount is not in fact made available to the Administrative Agent by such Lender and the Administrative Agent has made available same to the applicable Borrower, the Administrative Agent shall be entitled to recover such corresponding amount from such Lender. If such Lender does not pay such corresponding amount forthwith upon the Administrative Agent's demand therefor, the Administrative Agent shall promptly notify the applicable Borrower, and such Borrower shall pay such corresponding amount to the Administrative Agent within three Business Days of receipt of such notice unless previously paid by such Lender. The Administrative Agent shall also be entitled to recover on demand from such Lender or such Borrower, as the case may be, interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Administrative Agent to such Borrower to the date such corresponding amount is recovered by the Administrative Agent, at a rate per annum equal to (x) if paid by -5- 12 such Lender, the overnight Federal Funds Effective Rate or (y) if paid by such Borrower, the then applicable rate of interest, calculated in accordance with Section 1.08, for the respective Loans. (b) Nothing herein shall be deemed to relieve any Lender from its obligation to fulfill its commitments hereunder or to prejudice any rights which any Borrower may have against any Lender as a result of any default by such Lender hereunder. 1.05 NOTES. (a) A Borrower's obligation to pay the principal of, and interest on, the Loans made to it by each Lender shall be evidenced (i) if USF Loans, by a promissory note substantially in the form of Exhibit B-1 with blanks appropriately completed (each, a "USF Note" and, collectively, the "USF Notes"), (ii) if MCF Loans other than Lira Loans and if requested by the respective MCF Lender, by a promissory note substantially in the form of Exhibit B-2 with blanks appropriately completed (each, a "MCF Note" and, collectively, the "MCF Notes"), (iii) if Lira Loans, by a promissory note substantially in the form of Exhibit B-3, with blanks appropriately completed (the "Lira Note") and (iv) if Swingline Loans, by a promissory note substantially in the form of Exhibit B-4 with the blanks appropriately completed (the "Swingline Note"). (b) Each Lender will note on its internal records the amount of each Loan made by it and each payment in respect thereof and will, prior to any transfer of any of its Notes, endorse on the reverse side thereof the outstanding Principal Amount of Loans evidenced thereby. Failure to make any such notation shall not affect a Borrower's obligations in respect of such Loans. 1.06 CONVERSIONS. WLI shall have the option to convert on any Business Day all or a portion at least equal to the applicable Minimum Borrowing Amount of its USF Loans of one Type into a Borrowing or Borrowings of USF Loans of the other Type, provided that (i) no partial conversion shall reduce the outstanding principal amount of the available to the applicable Borrower a corresponding amount. If such corresponding amount is not in fact made available to the Administrative Agent by such Lender and the Administrative Agent has made available same to the applicable Borrower, the Administrative Agent shall be entitled to recover such corresponding amount from such Lender. If such Lender does not pay such corresponding amount forthwith upon the Administrative Agent's demand therefor, the Administrative Agent shall promptly notify the applicable Borrower, and such Borrower shall pay such corresponding amount to the Administrative Agent within three Business Days of receipt of such notice unless previously paid by such Lender. The Administrative Agent shall also be entitled to recover on demand from such Lender or such Borrower, as the case may be, interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Administrative Agent to such Borrower to the date such corresponding amount is recovered by the Administrative Agent, at a rate per annum equal to (x) if paid by Eurodollar Loans made pursuant to a Borrowing to less than the Minimum Borrowing Amount applicable thereto, (ii) Base Rate Loans may not be converted into Eurodollar Loans (x) when a Default under Section 9.01 or Event of Default is then in existence if the Administrative Agent or the Required Lenders shall have determined in its or their sole discretion not to permit such conversion or (y) prior to the Syndication Date except for a conversion into Eurodollar Loans with a PSD Interest Period and (iii) Borrowings of Eurodollar Loans resulting from this Section 1.06 shall be limited in number as provided in Section 1.02. Each such conversion shall be effected by WLI giving the Administrative Agent at the Notice Office, prior to 12:00 Noon (New York time), at least three Business Days' (or one Business Day in the case of a conversion into Base Rate Loans) prior written notice (or telephonic notice promptly confirmed in writing) (each, a "Notice of Conversion") specifying the Loans to be so converted, the Type of Loans to be converted into and, if to be converted into a Borrowing of Eurodollar Loans, the Interest Period to be initially applicable thereto. The Administrative Agent shall -6- 13 give each USF Lender prompt notice of any such proposed conversion affecting any of its USF Loans. 1.07 PRO RATA BORROWINGS, ETC. All Loans incurred pursuant to a Syndicated Borrowing shall be made by the Lenders required to participate therein PRO RATA on the basis of their respective USF Commitments or MCF Commitments, as the case may be. It is understood that no Lender shall be responsible for any default by any other Lender in its obligation to make Loans hereunder and that each Lender shall be obligated to make the Loans provided to be made by it hereunder, regardless of the failure of any other Lender to fulfill its commitments hereunder. 1.08 INTEREST. (a) The unpaid principal amount of each Base Rate Loan shall bear interest from the date of the Borrowing thereof until maturity (whether by acceleration or otherwise) or conversion at a rate per annum which shall at all times be the Applicable Margin plus the Base Rate applicable to such Loan in effect from time to time. (b) The unpaid principal amount of each Loan (other than Base Rate Loans) shall bear interest from the date of the Borrowing thereof until maturity (whether by acceleration or otherwise) or conversion at a rate per annum which shall at all times during each Interest Period applicable thereto be the Applicable Margin plus the relevant LIBOR for such Interest Period. (c) All overdue principal and, to the extent permitted by law, overdue interest in respect of any Loans shall bear interest at the Base Rate in effect from time to time PLUS the sum of (i) 2% and (ii) the Applicable Margin then in effect for Base Rate Loans, provided that principal in respect of Eurodollar Loans and MCF Loans shall bear interest from the date same becomes due (whether by acceleration or otherwise) until (x) in the case of Eurodollar Loans, the end of the Interest Period applicable to such Eurodollar Loans at such maturity or (y) in the case of MCF Loans, until paid in full, at a rate per annum equal to 2% in excess of the rate of interest applicable thereto at such maturity. (d) Interest shall accrue from and including the date of any Borrowing to but excluding the date of any repayment thereof and shall be payable (i) in respect of each Base Rate Loan, quarterly in arrears on the last Business Day of each March, June, September and December, (ii) in respect of each Eurodollar Loan and each MCF Loan, on the last day of each Interest Period applicable thereto and, in the case of an Interest Period in excess of three months, on each date occurring at three month intervals after the first day of such Interest Period and (iii) in respect of each Loan, on any prepayment or conversion (other than the prepayment or conversion of any Base Rate Loan) (on the amount prepaid or converted), at maturity (whether by acceleration or otherwise) and, after such maturity, on demand. -7- 14 (e) Subject to the provisions of Section 1.01(D), the Lira Lender shall (x) retain for itself the LL Portion of all interest payments it receives on Lira Loans in respect of all periods prior to the purchase of assignments thereof by the MCF Lenders pursuant to Section 1.01(D) (subject to the rights of MCF Lenders who purchased participations therein to their PRO RATA share of such interest under such participations) and (y) pay over to the Administrative Agent for prompt payment to all MCF Lenders that are Non-Defaulting Lenders (for application, PRO RATA among them on the basis of their MCF Percentages) the remaining portion of such interest payments (with the Lira Lender to be paid all such interest otherwise payable to Defaulting Lenders). (f) All computations of interest hereunder shall be made in accordance with Section 12.07(b). (g) The Administrative Agent, upon determining the interest rate for any Borrowing for any Interest Period, shall promptly notify the applicable Borrower and the Lenders thereof. 1.09 INTEREST PERIODS. (a) At the time a Borrower gives a Notice of Borrowing (or WLI gives a Notice of Conversion) in respect of the making of, or conversion into, a Borrowing of Eurodollar Loans or MCF Loans (in the case of the initial Interest Period applicable thereto) or prior to 12:00 Noon (Local Time) on the third Business Day prior to the expiration of an Interest Period applicable to a Borrowing of Eurodollar Loans or MCF Loans, it shall have the right to elect by giving the Administrative Agent written notice (or telephonic notice promptly confirmed in writing) of the Interest Period applicable to such Borrowing, which Interest Period shall, at the option of such Borrower, be a one, two, three or six month period (or if prior to the Syndication Date and to the extent then available in the relevant currency in the opinion of the Administrative Agent, a 7, 14 or 21 day period or such other period less than one month as is agreed by the respective Borrower and the Administrative Agent). Notwithstanding anything to the contrary contained above: (i) the initial Interest Period for any Borrowing shall commence on the date of such Borrowing (including, where relevant, the date of any conversion from a Borrowing of Base Rate Loans) and each Interest Period occurring thereafter in respect of such Borrowing shall commence on the day on which the next preceding Interest Period expires; (ii) if any Interest Period begins on (x) the last Business Day of a month, it shall end on the last Business Day of the month in which it is to end and (y) a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period, such Interest Period shall end on the last Business Day of such calendar month; -8- 15 (iii) if any Interest Period would otherwise expire on a day which is not a Business Day, such Interest Period shall expire on the next succeeding Business Day, PROVIDED that if any Interest Period would otherwise expire on a day which is not a Business Day but is a day of the month after which no further Business Day occurs in such month, such Interest Period shall expire on the next preceding Business Day; (iv) subject to the foregoing clauses (i) through (iii), inclusive, all Interest Periods selected prior to the Syndication Date must end (I) if selected prior thereto, on the date one month after the Closing Date, (II) if selected on or after such one month date and prior to the date two months after the Closing Date, on the date two months after the Closing Date, (III) if selected on or after such two month date and on or prior to the date three months after the Closing Date, on the date three months after the Closing Date and (IV) if selected on or after such three month date, on the date four months after the Closing Date; (v) no Interest Period may be elected that would extend beyond the Final Maturity Date; (vi) no Interest Period may be elected at any time when a Default under Section 9.01 or an Event of Default is then in existence if the Administrative Agent or the Required Lenders shall have determined in its or their sole discretion not to permit such election; (vii) all Eurodollar Loans or MCF Loans comprising a Borrowing shall at all times have the same Interest Period. (b) If upon the expiration of any Interest Period, the applicable Borrower has failed to (or may not) elect a new Interest Period to be applicable to the Loans subject to the expiring Interest Period as provided above, such Borrower shall be deemed to have elected, in the case of Eurodollar Loans, to convert such Borrowing into a Borrowing of Base Rate Loans effective as of the expiration date of such current Interest Period and, in the case of all MCF Loans, to continue such Loans pursuant to a one-month Interest Period. 1.10 INCREASED COSTS, ILLEGALITY, ETC. (a) In the event that (x) in the case of clause (i) or (iv) below, the Administrative Agent or (y) in the case of clauses (ii) and (iii) below, any Lender shall have determined (which determination shall, absent manifest error, be final and conclusive and binding upon all parties hereto): (i) on any date for determining any LIBOR for any Interest Period that, by reason of any changes arising after the date of this Agreement affecting the relevant interbank market, adequate and fair means do not exist for ascertaining the applicable interest rate on the basis provided for in the definition of the respective LIBOR; or -9- 16 (ii) at any time, that such Lender shall actually incur increased costs or reductions in the amounts received or receivable hereunder with respect to any Eurodollar Loans or MCF Loans (other than any increased cost or reduction in the amount received or receivable resulting from the imposition of or a change in the rate of taxes or similar charges) because of (x) any change since the Effective Date in any applicable law, governmental rule, regulation, guideline or order (or in the interpretation or administration thereof and including the introduction of any new law or governmental rule, regulation, guideline or order) (such as, for example, but not limited to, a change in official reserve requirements, but, in all events, excluding reserves payable pursuant to Section 1.10(c) and those included in determining any Associated Costs Rate) and/or (y) other circumstances occurring since the Effective Date affecting the relevant interbank market; or (iii) at any time, that the making or continuance of any Eurodollar Loans or MCF Loans has become unlawful by compliance by such Lender in good faith with any law, governmental rule, regulation, guideline, or has become impracticable as a result of a contingency occurring after the Effective Date which materially and adversely affects the relevant interbank market; or (iv) at any time that any Alternate Currency is not available in sufficient amounts, as determined in good faith by the Administrative Agent, to fund any Borrowing of Loans denominated in such Alternate Currency; then, and in any such event, such Lender (or the Administrative Agent in the case of clause (i) or (iv) above) shall (x) on such date and (y) within ten Business Days of the date on which such event no longer exists give notice (by telephone confirmed in writing) to the respective Borrower and, except in the case of clause (i) or (iv) above, to the Administrative Agent of such determination (which notice the Administrative Agent shall promptly transmit to each of the other Lenders). Thereafter and for so long as the applicable circumstance continues to exist (w) in the case of clause (i) above, Loans priced in respect of the affected LIBOR shall no longer be available until such time as the Administrative Agent notifies the respective Borrower and the Lenders that the circumstances giving rise to such notice by the Administrative Agent no longer exist in accordance with clause (y) of the preceding sentence, and any Notice of Borrowing or Notice of Conversion given by a Borrower with respect to such Loans which have not yet been incurred shall be deemed rescinded by the relevant Borrower, (x) in the case of clause (ii) above, the applicable Borrower shall pay to such Lender, upon written demand therefor, such additional amounts (in the form of an increased rate of, or a different method of calculating, interest or otherwise as such Lender in its sole discretion shall determine) as shall be required to compensate such Lender for such increased costs or reductions in amounts receivable hereunder (a written notice as to the additional amounts owed to such Lender, showing the basis for the calculation thereof in reasonable detail, submitted to the applicable Borrower by such Lender shall, absent manifest error, be -10- 17 final and conclusive and binding upon all parties hereto), (y) in the case of clause (iii) above, the applicable Borrower shall take one of the actions specified in Section 1.10(b) as promptly as possible and, in any event, within the time period required by law and (z) in the case of clause (iv) above, Loans in the affected Alternate Currency shall no longer be available until such time as the Administrative Agent notifies the respective Borrower and the Lenders that the circumstances giving rise to such notice by the Administrative Agent no longer exist in accordance with clause (y) of the preceding sentence, and any Notice of Borrowing given by a Borrower with respect to such Alternate Currency Loans which have not yet been incurred shall be deemed rescinded by such Borrower. (b) At any time when any Loan is affected by the circumstances described in Section 1.10(a)(ii) or (iii), the applicable Borrower may (and in the case of a Loan affected pursuant to Section 1.10(a)(iii), the applicable Borrower shall) either (i) if the affected Loan is then being made pursuant to a Borrowing, cancel said Borrowing (or, in the case of clause (iii) at a time when no Default under Section 9.01 or Event of Default exists, the proposed MCF Loan of the affected MCF Lender) by giving the Administrative Agent telephonic notice (confirmed promptly in writing) thereof on the same date that the respective Borrower was notified by a Lender pursuant to Section 1.10(a)(ii) or (iii), or (ii) if the affected Loan is then outstanding, upon at least three Business Days' notice to the Administrative Agent, (A) in the case of a Eurodollar Loan, require the affected Lender to convert each such Eurodollar Loan into a Base Rate Loan, and (B) in the case of any other Loan, repay all such Loans in full (or, in the case of clause (iii) at a time when no Default under Section 9.01 or Event of Default exists, the affected Loans of the affected MCF Lender), provided that if more than one Lender is affected at any time, then all affected Lenders must be treated the same pursuant to this Section 1.10(b). (c) If any Lender shall have determined that after the Effective Date, the adoption or effectiveness of any applicable law, rule or regulation regarding capital adequacy, or any change therein, or any change in the interpretation or administration thereof by any governmental authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by such Lender or any corporation controlling such Lender with any request or directive regarding capital adequacy (whether or not having the force of law) of any such authority, central bank or comparable agency, has or would have the effect of reducing the rate of return on such Lender's or such corporation's capital or assets as a consequence of its commitments or obligations hereunder to a level below that which such Lender or such other corporation could have achieved but for such adoption, effectiveness, change or compliance (taking into consideration such Lender's or such other corporation's policies with respect to capital adequacy), then from time to time, within 15 days after written demand by such Lender (with a copy to the Administrative Agent), WLI will pay to such Lender such additional amount or amounts as will compensate such Lender or such other corporation for such reduction. In determining such additional amounts, each Lender will act reasonably and in good faith and will use averaging and attribution methods that are -11- 18 reasonable. Each Lender, upon so determining that any additional amounts will be payable pursuant to this Section 1.10(c), will give prompt written notice thereof to WLI, which notice shall set forth in reasonable detail the basis of the calculation of such additional amounts, although the failure to give any such notice shall not, subject to Section 1.11(b), release or diminish any Borrower's obligations to pay additional amounts pursuant to this Section 1.10(c) upon the subsequent receipt of such notice. 1.11 COMPENSATION. (a) Each Borrower shall compensate each Lender, upon its written request (which request shall set forth the basis for requesting such compensation), for all reasonable losses, expenses and liabilities (including, without limitation, any loss, expense or liability incurred by reason of the liquidation or reemployment of deposits or other funds required by such Lender to fund any Eurodollar Loans or MCF Loans made, or to be made, by it to such Borrower but excluding in any event the loss of anticipated profits) which such Lender may actually sustain: (i) if for any reason (other than a default by such Lender or the Administrative Agent) a Borrowing of Eurodollar Loans or MCF Loans does not occur on a date specified therefor in a Notice of Borrowing or Notice of Conversion, given by such Borrower (whether or not withdrawn by such Borrower or deemed withdrawn pursuant to Section 1.10(a)); (ii) if any prepayment, repayment or conversion of any such Eurodollar Loans or MCF Loans occurs on a date which is not the last day of an Interest Period applicable thereto; (iii) if any prepayment of any such Eurodollar Loans or MCF Loans is not made on any date specified in a notice of prepayment given by such Borrower; or (iv) as a consequence of (x) any other default by such Borrower to repay its Eurodollar Loans or MCF Loans when required by the terms of this Agreement or (y) an election made pursuant to Section 1.10(b). (b) Notwithstanding anything in this Agreement to the contrary, to the extent any notice required by Section 1.10, 1.11, 2.06 or 4.04 is given by any Lender more than 90 days after such Lender obtained, or reasonably should have obtained, knowledge of the occurrence of the event giving rise to the additional costs of the type described in such Section, such Lender shall not be entitled to compensation under Section 1.10, 1.11, 2.06 or 4.04 for any amounts incurred or accruing prior to the giving of such notice to the respective Borrower. 1.12 CHANGE OF LENDING OFFICE. Each Lender agrees that, upon the occurrence of any event giving rise to the operation of Section 1.10(a)(ii) or (iii), 1.10(c), 2.06 or 4.04 with respect to such Lender, it will, if requested by the applicable Borrower, use reasonable efforts (subject to overall policy considerations of such Lender) to designate another lending office for any Loans or Commitments affected by such event, PROVIDED that such designation is made on such terms that such Lender and its lending office suffer no economic, legal or regulatory disadvantage, with the object of avoiding or materially mitigating the consequence of the event giving rise to the operation of any such Section. Nothing in this Section 1.12 shall affect or postpone any of the obligations of any Borrower or the right of any Lender provided in Section 1.10, 2.06 or 4.04. -12- 19 1.13 REPLACEMENT OF LENDERS. (x) Upon the occurrence of any event giving rise to the operation of Section 1.10(a)(ii) or (iii), Section 1.10(c), Section 2.06 or Section 4.04 with respect to any Lender which results in such Lender charging to any Borrower in creased costs in excess of those being generally charged by the other Lenders, (y) if a Lender becomes a Defaulting Lender and/or (z) in the case of a refusal by a Lender to consent to a proposed change, waiver, discharge or termination with respect to this Agreement which has been approved by the Required Lenders, WLI shall have the right, if no Default under Section 9.01 or Event of Default then exists, to replace such Lender (the "Replaced Lender"), upon prior written notice to the Administrative Agent and such Replaced Lender, with one or more other Eligible Transferee or Transferees, none of whom shall constitute a Defaulting Lender at the time of such replacement (collectively, the "Replacement Lender") reasonably acceptable to the Administrative Agent, the Letter of Credit Issuers, to the extent assuming any USF Commitment, the Swingline Lender, and, to extent assuming any MCF Commitment, the Lira Lender PROVIDED that (i) at the time of any replacement pursuant to this Section 1.13, the Replacement Lender and the Replaced Lender shall enter into one or more Assignment Agreements pursuant to Section 12.04(b) (and with all fees payable pursuant to said Section 12.04(b) to be paid by the Replacement Lender) pursuant to which the Replacement Lender shall acquire all of the Commitments and outstanding Loans of, and in each case participations in Letters of Credit and Swingline Loans (if any) by, the Replaced Lender and, in connection therewith, shall pay to (x) the Replaced Lender in respect thereof an amount equal to the sum of (A) an amount equal to the Principal Amount of, and all accrued but unpaid interest on, all outstanding Loans of the Replaced Lender and the Principal Amount of all participations in Lira Loans funded by the Replaced Lender (and not reimbursed), (B) an amount equal to the Principal Amount of all Unpaid Drawings that have been funded by (and not reimbursed to) such Replaced Lender, together with all then unpaid interest with respect thereto at such time, and (C) an amount equal to all accrued, but theretofore unpaid, Fees owing to the Replaced Lender pursuant to Section 3.01 and (y) the Letter of Credit Issuer an amount equal to such Replaced Lender's Percentage of the principal amount of any Unpaid Drawing (which at such time remains an Unpaid Drawing) to the extent such amount was not theretofore funded by such Replaced Lender, in each case in the applicable currency, and (ii) all obligations of the Borrowers owing to the Replaced Lender (other than those specifically described in clause (i) above in respect of which the assignment purchase price has been, or is concurrently being, paid) shall be paid in full to such Replaced Lender concurrently with such replacement. Upon the execution of the respective Assignment Agreements, the payment of amounts referred to in clauses (i) and (ii) above and, if so requested by the Replacement Lender, delivery to the Replacement Lender of the appropriate Note or Notes executed by the relevant Borrowers, the Replacement Lender shall become a Lender hereunder and the Replaced Lender shall cease to constitute a Lender here under, except with respect to indemnification provisions applicable to the Replaced Lender under this Agreement, which shall survive as to such Replaced Lender. In connection with any replacement of Lenders pursuant to, and as contemplated by, this Section 1.13, each of the Borrowers (other than WLI) hereby irrevocably authorizes WLI to take all necessary action, in the name of such Borrowers, as described above in this Section -13- 20 1.13 in order to effect the replacement of the respective Lender or Lenders in accordance with the preceding provisions of this Section 1.13. SECTION 2. LETTERS OF CREDIT. 2.01 LETTERS OF CREDIT. (a) Subject to and upon the terms and conditions herein set forth, (x) WLI, in the case of USF Letters of Credit and (y) WLI (to the extent issued in support of obligations of or relating to Other Foreign Subsidiaries), EU Holdco and the Italian Borrower, in the case of MCF Letters of Credit, may request that a Letter of Credit Issuer at any time and from time to time on or after the Closing Date and prior to the tenth Business Day preceding the Final Maturity Date issue, for the account of such Borrower denominated in Dollars (in the case of USF Letters of Credit) or an Approved Currency (in the case of MCF Letters of Credit) and in support of (x) obligations arising in the ordinary course of business of such Borrower and its Subsidiaries, (y) such other obligations of such Borrower and its Subsidiaries as could be financed through the incurrence by such Borrower of Loans and (z) such other obligations that are acceptable to the respective Letter of Credit Issuer and, subject to and upon the terms and conditions herein set forth, each Letter of Credit Issuer agrees to issue from time to time, irrevocable standby letters of credit and/or bank guaranties (to the extent issued outside the United States) in such form as may be approved by such Letter of Credit Issuer. The term "Letter of Credit" shall include each such letter of credit and bank guaranty and all Existing Letters of Credit (each of which Existing Letters of Credit shall be deemed issued for all purposes of this Agreement on the Closing Date) (each such letter of credit and bank guaranty, a "Letter of Credit" and, collectively, the "Letters of Credit"). (b) Notwithstanding the foregoing, (i) no Letter of Credit shall be issued if after giving effect thereto, (A) the USF Letter of Credit Outstandings would exceed either (x) $100 million in Principal Amount or (y) when added to the aggregate outstanding Principal Amount of all USF Loans and Swingline Loans, the Total USF Commitment at such time or (B) the MCF Letter of Credit Outstandings would exceed either (x) $100 million in Principal Amount or (y) when added to the aggregate outstanding Principal Amount of all MCF Loans, the Total MCF Commitment at such time and (ii) each Letter of Credit shall have an expiry date occurring not later than one year after such Letter of Credit's date of issuance, provided that any standby Letter of Credit may be extendable for successive periods of up to 12 months on terms acceptable to the Letter of Credit Issuer and in no event shall any Letter of Credit have an expiry date occurring later than the fifth Business Day preceding the Final Maturity Date provided that a Letter of Credit may be issued with an expiry date extending past the Final Maturity Date if arrangements are entered into at such time, satisfactory to the Administrative Agent and the respective Letter of Credit Issuer, for cash collateralizing the respective Borrower's obligations under such Letter of Credit on the Final Maturity Date (at 103% of the Stated Amount of such Letter of Credit), it being agreed that all participations of the Lenders in such Letter of Credit will terminate on the Final Maturity Date. -14- 21 2.02 LENDER DEFAULT. In the event a Lender Default exists, each Letter of Credit Issuer shall not be required to issue any Letter of Credit in which the Defaulting Lender is required to participate unless such Letter of Credit Issuer has entered into arrangements satisfactory to it with the respective Borrower or Borrowers to eliminate the Letter of Credit Issuer's risk with respect to the participation in Letters of Credit of the Defaulting Lender or Lenders (including by way of example, cash collateralization of such Defaulting Lender's or Lenders' Percentage of the USF Letter of Credit Outstandings and/or MCF Letters of Credit Outstandings). 2.03 LETTER OF CREDIT REQUESTS; NOTICES OF ISSUANCE. (a) Whenever it desires that a Letter of Credit be issued as provided in Section 2.01, the respective Borrower shall give the Administrative Agent and the Letter of Credit Issuer written notice thereof (including by way of facsimile transmission) in the form of Exhibit C prior to 1:00 P.M. (Local Time) at least three Business Days (or such shorter period as may be acceptable to the Letter of Credit Issuer) prior to the proposed date of issuance (which shall be a Business Day) (each, a "Letter of Credit Request"), which Letter of Credit Request shall include any other documents that the Letter of Credit Issuer customarily requires in connection therewith. (b) The Letter of Credit Issuer shall, promptly after each issuance of or amendment to a Letter of Credit by it, give the Administrative Agent (who will in turn give written notice to each USF Lender and/or MCF Lender (depending on the Facility being utilized)) and WLI written notice of such issuance or amendment, accompanied by a copy to the Administrative Agent of such Letter of Credit or amendment. 2.04 AGREEMENT TO REPAY LETTER OF CREDIT DRAWINGS. (a) Each Borrower hereby agrees, to reimburse each Letter of Credit Issuer for any payment or disbursement made by such Letter of Credit Issuer under any Letter of Credit issued for the account of such Borrower (each such amount so paid or disbursed until reimbursed, an "Unpaid Drawing") by making payment to the Administrative Agent at the Payment Office and in the relevant Approved Currency, immediately after, and in any event on the date on which such Borrower is notified by such Letter of Credit Issuer of such payment or disbursement, with interest on the amount so paid or disbursed by such Letter of Credit Issuer, to the extent not reimbursed prior to 1:00 P.M. (Local Time) on the date of such payment or disbursement, from and including the date paid or disbursed to but not including the date the Letter of Credit Issuer is reimbursed therefor at a rate per annum which shall be the Base Rate as in effect from time to time plus the Applicable Margin (plus, in each case, an additional 2% per annum if not reimbursed by the third Business Day after the date of such notice of payment or disbursement), such interest also to be payable on demand. (b) Each Borrower's obligation under this Section 2.04 to reimburse each Letter of Credit Issuer with respect to Unpaid Drawings under Letters of Credit issued by such Letter of Credit Issuer for such Borrower's account (including, in each case, interest thereon) -15- 22 shall be absolute and unconditional under any and all circumstances and irrespective of any setoff, counterclaim or defense to payment which such Borrower may have or have had against any Letter of Credit Issuer, the Administrative Agent or any Lender, including, without limitation, any defense based upon the failure of any drawing under a Letter of Credit to conform substantially to the terms of the Letter of Credit or any non-application or misapplication by the beneficiary of the proceeds of such drawing; PROVIDED, HOWEVER, that such Borrower shall not be obligated to reimburse a Letter of Credit Issuer for any wrongful payment made by such Letter of Credit Issuer under a Letter of Credit as a result of acts or omissions constituting willful misconduct or gross negligence on the part of such Letter of Credit Issuer as determined by a court of competent jurisdiction. 2.05 LETTER OF CREDIT PARTICIPATIONS. (a) Immediately upon the issuance of any Letter of Credit under a Facility, the Letter of Credit Issuer issuing same shall be deemed to have sold and transferred to each other Lender under such Facility, and each such Lender (each, a "Participant") shall be deemed irrevocably and unconditionally to have purchased and received from such Letter of Credit Issuer, without recourse or warranty, an undivided interest and participation, to the extent of such Participant's Percentage for such Facility, in such Letter of Credit, each substitute letter of credit, each drawing made thereunder and the obligations of the respective Borrower under this Agreement with respect thereto (although the Letter of Credit Fee shall be payable directly to the Administrative Agent for the account of the Lenders as provided in Section 3.01(c) and the Participants shall have no right to receive any portion of any Facing Fees) and any security therefor or guaranty pertaining thereto. Upon any change in the USF Commitments or MCF Commitments, as the case may be, pursuant to Section 1.13 and/or 12.04(b), it is hereby agreed that, with respect to all out standing Letters of Credit and Unpaid Drawings affected thereby, there shall be an automatic adjustment to the participations pursuant to this Section 2.05 to reflect the new Percentages of the assigning and assignee Lender or of all Lenders, as the case may be. (b) In determining whether to pay under any Letter of Credit, issued by it, a Letter of Credit Issuer shall not have any obligation relative to the Participants other than to determine that any documents required to be delivered under such Letter of Credit have been delivered and that they substantially comply on their face with the requirements of such Letter of Credit. Any action taken or omitted to be taken by a Letter of Credit Issuer under or in connection with any Letter of Credit if taken or omitted in the absence of gross negligence or willful misconduct as determined by a court of competent jurisdiction, shall not create for such Letter of Credit Issuer any resulting liability. (c) In the event that a Letter of Credit Issuer makes any payment under any Letter of Credit and the respective Borrower shall not have reimbursed such amount in full to such Letter of Credit Issuer pursuant to Section 2.04(a), such Letter of Credit Issuer shall promptly notify the Administrative Agent, and the Administrative Agent shall promptly notify each Participant under the respective Facility of such failure, and each such Participant shall -16- 23 promptly and unconditionally pay to the Administrative Agent for the account of such Letter of Credit Issuer, the amount of such Participant's Percentage of such payment in the applicable currency and in same day funds, PROVIDED that no Participant shall be obligated to pay to the Administrative Agent its applicable Percentage of such unreimbursed amount for any wrongful payment made by a Letter of Credit Issuer under a Letter of Credit as a result of acts or omissions constituting willful misconduct or gross negligence on the part of such Letter of Credit Issuer as determined by a court of competent jurisdiction. If the Administrative Agent so notifies any Participant required to fund an Unpaid Drawing under a Letter of Credit prior to 11:00 A.M. (Local Time) on any Business Day, such Participant shall make available to the Administrative Agent for the account of the respective Letter of Credit Issuer such Participant's Percentage of the Principal Amount of such Unpaid Drawing on such Business Day in the applicable currency and in same day funds. If and to the extent such Participant shall not have so made its Percentage of the Principal Amount of such Unpaid Drawing available to the Administrative Agent for the account of the respective Letter of Credit Issuer, such Participant agrees to pay to the Administrative Agent for the account of the respective Letter of Credit Issuer, forthwith on demand such amount, together with interest thereon, for each day from such date until the date such amount is paid to the Administrative Agent for the account of the respective Letter of Credit Issuer at the overnight Federal Funds Effective Rate. The failure of any Participant to make available to the Administrative Agent for the account of the respective Letter of Credit Issuer its Percentage of the Principal Amounts of any Unpaid Drawing under any Letter of Credit on which it is a Participant shall not relieve any other Participant of its obligation hereunder to make avail able to the Administrative Agent for the account of the respective Letter of Credit Issuer its Percentage of such Unpaid Drawing on the date required, as specified above, but no Participant shall be responsible for the failure of any other Participant to make available to the Administrative Agent for the account of a Letter of Credit Issuer such other Participant's Percentage of any such Unpaid Drawing. (d) Whenever a Letter of Credit Issuer receives a payment of a reimbursement obligation as to which the Administrative Agent has received for the account of such Letter of Credit Issuer any payments from the respective Participants pursuant to clause (c) above, such Letter of Credit Issuer shall pay to the Administrative Agent and the Administrative Agent shall promptly pay to each such Participant which has paid its Percentage thereof, in the applicable currency and in same day funds, an amount equal to such Participant's Percentage of the principal amount of such payment and interest thereon accruing at the overnight Federal Funds Effective Rate after the purchase of the respective participations. (e) The obligations of the Participants hereunder to make payments to the Administrative Agent for the account of the Letter of Credit Issuers with respect to Letters of Credit shall be irrevocable and not subject to counterclaim, set-off or other defense or any other qualification or exception whatsoever (provided that no Participant shall be required to make payments resulting from a Letter of Credit Issuer's gross negligence or willful misconduct, as determined by a court of competent jurisdiction) and shall be made in -17- 24 accordance with the terms and conditions of this Agreement under all circumstances, including, without limitation, any of the following circumstances: (i) any lack of validity or enforceability of this Agreement or any of the other Credit Documents; (ii) the existence of any claim, set-off, defense or other right which WLI or any of its Subsidiaries may have at any time against a beneficiary named in a Letter of Credit, any transferee of any Letter of Credit (or any Person for whom any such transferee may be acting), any Agent, any Letter of Credit Issuer, any Lender or other Person, whether in connection with this Agreement, any Letter of Credit, the transactions contemplated herein or any unrelated transactions (including any underlying transaction between a Designated Party or any Subsidiary and the beneficiary named in any such Letter of Credit); (iii) any draft, certificate or other document presented under the 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; (iv) the surrender or impairment of any security for the performance or observance of any of the terms of any of the Credit Documents; or (v) the occurrence of any Default or Event of Default. (f) To the extent a Letter of Credit Issuer is not indemnified by a Borrower as provided above, each Participant will reimburse and indemnify such Letter of Credit Issuer, in proportion to its aggregate Percentages, for and against any and all liabilities, obligations, losses, damages, penalties, claims, actions, judgments, costs, expenses or disbursements of whatsoever kind or nature which may be imposed on, asserted against or incurred by such Letter of Credit Issuer in performing its respective duties in any way relating to or arising out of its issuance of Letters of Credit; PROVIDED that no Participant shall be liable for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from a Letter of Credit Issuer's gross negligence or willful misconduct as determined by a court of competent jurisdiction. 2.06 INCREASED COSTS. If at any time after the Effective Date, the adoption or effectiveness of any applicable law, rule or regulation, or any change therein, or any change in the interpretation or administration thereof by any governmental authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by a Letter of Credit Issuer or any Participant with any request or directive (whether or not having the force of law) by any such authority, central bank or comparable agency shall either (i) impose, modify or make applicable any reserve, deposit, capital adequacy or similar -18- 25 requirement against Letters of Credit issued by such Letter of Credit Issuer or such Participant's participation therein, or (ii) shall impose on such Letter of Credit Issuer or any Participant any other conditions affecting this Agreement, any Letter of Credit or such Participant's participation therein; and the result of any of the foregoing is to increase the cost to such Letter of Credit Issuer or such Participant of issuing, maintaining or participating in any Letter of Credit, or to reduce the amount of any sum received or receivable by such Letter of Credit Issuer or such Participant hereunder (other than any increased cost or reduction in the amount received or receivable resulting from the imposition of or a change in the rate of taxes or similar charges), then, upon demand to WLI by such Letter of Credit Issuer or such Participant (a copy of which notice shall be sent by the Letter of Credit Issuer or such Participant to the Administrative Agent), the Borrowers, jointly and severally, shall pay to such Letter of Credit Issuer or such Participant such additional amount or amounts as will compensate such Letter of Credit Issuer or such Participant for such increased cost or reduction. A certificate submitted to WLI by a Letter of Credit Issuer or such Participant, as the case may be (a copy of which certificate shall be sent by such Letter of Credit Issuer or such Participant to the Administrative Agent), setting forth in reasonable detail the basis for the determination of such additional amount or amounts necessary to compensate such Letter of Credit Issuer or such Participant as aforesaid shall be conclusive and binding on the Borrowers absent manifest error, although the failure to deliver any such certificate shall not, subject to Section 1.11(b), release or diminish any of the Borrowers, obligations to pay additional amounts pursuant to this Section 2.06 upon the subsequent receipt thereof. SECTION 3. FEES; COMMITMENTS. 3.01 FEES. (a) WLI agrees to pay to the Administrative Agent a commitment fee (the "USF Commitment Fee") for the account of each USF Lender that is a Non- Defaulting Lender for the period from and including the Closing Date to, but not including, the day upon which the Total USF Commitment has been terminated, computed for each day at a per annum rate equal to the Applicable CF Percentage on an amount equal to such USF Lender's Unutilized USF Commitment on such date. Such USF Commitment Fees shall be due and payable in arrears on the last Business Day of each March, June, September and December and on the date upon which the Total USF Commitment is terminated. (b) The MCF Borrowers jointly and severally agree to pay to the Administrative Agent a commitment fee (the "MCF Commitment Fee") for the account of each MCF Lender that is a Non-Defaulting Lender for the period from and including the Closing Date to, but not including, the day upon which the Total MCF Commitment has been terminated, computed for each day at a per annum rate equal to the Applicable CF Percentage on an amount equal to such MCF Lender's Unutilized MCF Commitment on such date. Such MCF Commitment Fees shall be due and payable in arrears on the last Business Day of each March, June, September and December and on the date upon which the Total MCF Commitment is terminated. -19- 26 (c) Each Borrower agrees to pay to the Administrative Agent, for the account of each Lender that is a Non-Defaulting Lender that is participating in a Letter of Credit issued for the account of such Borrower, PRO RATA on the basis of its respective applicable Percentage, a fee in respect of each Letter of Credit (the "Letter of Credit Fee") issued for the account of such Borrower, computed for each day at a per annum rate equal to the Applicable Margin for Eurodollar Loans for such day multiplied by the then daily Stated Amount of such Letter of Credit. Accrued Letter of Credit Fees shall be due and payable quarterly in arrears on the last Business Day of each March, June, September and December of each year and on the date upon which the Total Commitment is terminated. (d) Each Borrower agrees to pay to each Letter of Credit Issuer a fee in respect of each Letter of Credit (the "Facing Fee") issued by such Letter of Credit Issuer for the account of such Borrower, computed for each day at the rate of .25% per annum on the then Stated Amount of such Letter of Credit (but in any event not less than $500 per year). Accrued Facing Fees shall be due and payable quarterly in arrears on the last Business Day of each March, June, September and December of each year and on the date upon which the Total Commitment is terminated. (e) Each Borrower agrees to pay directly to each Letter of Credit Issuer upon each issuance of, payment under, and/or amendment of, a Letter of Credit issued by such Letter of Credit Issuer for the account of such Borrower, such amount as shall at the time of such issuance, payment or amendment be the administrative charge which the Letter of Credit Issuer is customarily charging for issuances of, drawings under or amendments of, letters of credit issued by it. (f) The Italian Borrower agrees to pay the Lira Lender until such time, if any, as assignments of the Lira Loans are made to the MCF Lenders pursuant to Section 1.01(D) a fee (the "LL Fee"), computed for each day at the rate of .25% per annum on the then aggregate outstanding Principal Amount of all Lira Loans. Accrued LL Fees shall be due and payable quarterly in arrears on the last Business Day of each March, June, September and December of each year and on the Final Maturity Date. (g) WLI shall pay to (x) each Agent on the Closing Date, for its own account and/or for distribution to the Lenders, such fees as heretofore agreed by WLI and the Agents and (y) the Administrative Agent, for its own account, such other fees as agreed to between WLI and the Administrative Agent, when and as due. (h) All computations of Fees shall be made in accordance with Section 12.07(b). 3.02 VOLUNTARY REDUCTION OF COMMITMENTS. Upon at least three Business Days' prior written notice (or telephonic notice confirmed in writing) to the Administrative Agent -20- 27 at the Notice Office (which notice shall be deemed to be given on a certain day only if given before 12:00 Noon (New York time) on such day and shall be promptly transmitted by the Administrative Agent to each of the Lenders), WLI shall have the right, without premium or penalty, to terminate or partially reduce the Total Unutilized USF Commitment and/or the Total Unutilized MCF Commitment, PROVIDED that (x) any such termination shall apply to proportionately and permanently reduce the USF Commitment or the MCF Commitment, as the case may be, of each Lender and (y) any partial reduction pursuant to this Section 3.02 shall be in the amount of at least $5,000,000. 3.03 MANDATORY ADJUSTMENTS OF COMMITMENTS, ETC. (a) The Total Commitment (and the USF Commitment and MCF Commitment of each Lender) shall terminate in its entirety on April 30, 1998 unless the Closing Date has occurred on or before such date. (b) The Total USF Commitment and the Total MCF Commitment shall terminate in its entirety on the Final Maturity Date. (c) On the third Business Day following the date of receipt thereof by WLI and/or any of its Subsidiaries of any Net Cash Proceeds from any Excluded Asset Sale, the Total Commitment shall be reduced in an amount equal to 100% of such Net Cash Proceeds. (d) On the date specified in a written notice given by the Administrative Agent (at the direction of the Required Lenders) to WLI after a Change of Control has occurred, the Total Commitment shall terminate. (e) Each mandatory reduction of the Total Commitment required to be made pursuant to Section 3.03(c) shall be applied to reduce the Total USF Commitment, if any, in an amount equal to the USF Percentage of such reduction and to reduce the Total MCF Commitment, if any, in an amount equal to the MCF Percentage of such reduction. (f) Each partial reduction of the Total USF Commitment and/or the Total MCF Commitment pursuant to this Section 3.03 shall apply proportionately to the USF Commitment or the MCF Commitment, as the case may be, of each USF Lender or MCF Lender, as the case may be. SECTION 4. PAYMENTS. 4.01 VOLUNTARY PREPAYMENTS. Each of WLI and EU Holdco shall have the right to prepay Loans made to it in whole or in part, without premium or penalty, from time to time on the following terms and conditions: (i) such Borrower shall give the Administrative Agent at the Payment Office written notice (or telephonic notice promptly confirmed in writing) of its intent to prepay the Loans, whether such Loans are USF Loans or MCF Loans, the amount of such prepayment, the currency in which such Loans are denominated and (in the case of -21- 28 LIBOR Loans) the specific Borrowing(s) pursuant to which made, which notice shall be given by such Borrower at least one Business Day (six Business Days in the case of MCF Loans) prior to the date of such prepayment and which notice shall promptly be transmitted by the Administrative Agent to each of the Lenders; (ii) each partial prepayment of any Borrowing shall be in an aggregate principal amount of at least $1,000,000 (or the Dollar Equivalent thereof) ($100,000 in the case of Swingline Loans), provided that no partial prepayment of Eurodollar Loans or MCF Loans made pursuant to a Borrowing shall reduce the aggregate principal amount of the Loans outstanding pursuant to such Borrowing to an amount less than the Minimum Borrowing Amount applicable thereto; and (iii) each prepayment in respect of any Loans made pursuant to a Borrowing shall be applied PRO RATA among such Loans. The Italian Borrower may prepay Lira Loans upon such notice and in such amounts as may be agreed from time to time by the Italian Borrower and the Lira Lender. 4.02 MANDATORY PREPAYMENTS. (A) REQUIREMENTS: (a) (i) If on any date the sum of (A) the aggregate outstanding Principal Amount of (x) Swingline Loans and (y) USF Loans made by Non-Defaulting Lenders and (B) the USF Letter of Credit Outstandings exceeds the Adjusted Total USF Commitment as then in effect, WLI shall repay no later than the next following Business Day the principal amount of Swingline Loans and, once all outstanding Swingline Loans are paid in full, USF Loans made by Non-Defaulting Lenders (and after all such USF Loans have been repaid in full, Unpaid Drawings in respect of Letters of Credit issued under the US Facility), in an aggregate Principal Amount equal to such excess. If, after giving effect to the repayment of all such outstanding Swingline Loans, and USF Loans and all such Unpaid Drawings, the aggregate USF Letter of Credit Outstandings exceeds the Total USF Commitment then in effect, WLI shall pay to the Administrative Agent an amount in cash and/or Cash Equivalents equal to such excess and the Administrative Agent shall hold such payment as security for the obligations of WLI hereunder pursuant to a cash collateral agreement to be entered into in form and substance satisfactory to the Administrative Agent (which shall permit certain investments in Cash Equivalents satisfactory to the Administrative Agent until the proceeds are applied to the secured obligations pursuant to this Agreement). (ii) If on any date on which Dollar Equivalents are determined, pursuant to Section 12.07(c), the sum of the aggregate outstanding Principal Amount of MCF Loans made by Non-Defaulting Lenders and the MCF Letter of Credit Outstandings exceeds the Total MCF Commitment as then in effect, the MCF Borrowers, jointly and severally, shall repay no later than the next following Business Day the principal amount of MCF Loans made by Non-Defaulting Lenders (and after all such MCF Loans have been repaid in full, Unpaid Drawings in respect of Letters of Credit issued under the MC Facility), in an aggregate Principal Amount equal to such excess. If, after giving effect to the repayment of all such outstanding MCF -22- 29 Loans and all such Unpaid Drawings, the aggregate MCF Letter of Credit Outstandings exceeds the Total MCF Commitment then in effect, the MCF Borrowers, jointly and severally, shall pay to the Administrative Agent an amount in cash and/or Cash Equivalents equal to such excess and the Administrative Agent shall hold such payment as security for the obligations of the respective MCF Borrowers hereunder pursuant to a cash collateral agreement to be entered into in form and substance satisfactory to the Administrative Agent (which shall permit certain investments in Cash Equivalents satisfactory to the Administrative Agent until the proceeds are applied to the secured obligations pursuant to this Agreement). (b) Following (x) the consummation of any Asset Sale and (y) any date on which the cash purchase price of the Acquisition is reduced as a result of a post-closing adjustment (effected through repayment to WLI, release from escrow of funds contained therein or otherwise), the Loans shall be repaid in an amount equal to the Net Cash Proceeds of such Asset Sale or to such reduction, as the case may be, with such repayment (x) to be made as promptly as possible after receipt of such Net Cash Proceeds or reduction amount provided that such repayments may be delayed to the extent necessary to avoid breakage costs under Section 1.11(a), (y) subject to the preceding clause (x), to be applied among the Loans as elected by WLI and (z) not to reduce the Total Commitment. (c) Notwithstanding anything to the contrary contained elsewhere in this Agreement, all outstanding USF Loans and MCF Revolving Loans shall be repaid in full on the Final Maturity Date. (B) APPLICATION: (a) With respect to each prepayment of Loans required by Section 4.02(A), the applicable Borrower may designate the Types of Loans which are to be prepaid and the specific Borrowing(s) under the affected Facility pursuant to which made, provided that (i) if any prepayment of Eurodollar Loans or MCF Loans made pursuant to a single Borrowing shall reduce the outstanding Loans made pursuant to such Borrowing to an amount less than the Minimum Borrowing Amount for such Borrowing, then all Loans outstanding pursuant to such Borrowing shall be immediately converted into Base Rate Loans (or repaid if outstanding in any Alternate Currency) and (ii) each prepayment of any Loans made pursuant to a Borrowing shall be applied PRO RATA among such Loans. In the absence of a designation by a Borrower as described in the preceding sentence, the Administrative Agent shall, subject to the above, make such designation in its sole discretion with a view, but no obligation, to minimize breakage costs owing under Section 1.11. 4.03 METHOD AND PLACE OF PAYMENT. Except as otherwise specifically provided herein, all payments under this Agreement shall be made to the Administrative Agent for the ratable (based on its PRO RATA share) account of the Lenders entitled thereto (provided that until such time, if any, that the Lira Lender's obligation to make Lira Loans terminates, payments -23- 30 in respect of the Lira Loans will be made by the Italian Borrower to the Lira Lender at such times and in such manner as agreed between them), not later than 12:00 Noon (Local Time) on the date when due and shall be made in immediately available funds at the Payment Office in: (x) Dollars, if such payment is made in respect of any obligation of the Borrowers under this Agreement except as otherwise provided in the immediately succeeding clause (y); and (y) the appropriate Alternate Currency, if such payment is made in respect of principal of or interest on Alternate Currency Loans or on any Unpaid Drawing arising under a MCF Letter of Credit denominated in an Alternate Currency, it being understood that written notice by a Borrower to the Administrative Agent to make a payment from the funds in such Borrower's account at the Payment Office shall constitute the making of such payment to the extent of such funds held in such account. Except as may otherwise be agreed upon by the Italian Borrower and the Lira Lender, any payments under this Agreement which are made later than 12:00 Noon (Local Time) shall be deemed to have been made on the next succeeding Business Day. Whenever any payment to be made hereunder shall be stated to be due on a day which is not a Business Day, the due date thereof shall be extended to the next succeeding Business Day and, with respect to payments of principal, interest shall be payable during such extension at the applicable rate in effect immediately prior to such extension. The Administrative Agent will make available to each Lender its pro rata share of each payment so received by the Administrative Agent in the funds and currency so received. 4.04 NET PAYMENTS. () All payments made by each Borrower hereunder or under any Note will be made without setoff, counterclaim or other defense. Except as provided in Section 4.04(b), all such payments will be made free and clear of, and without deduction or withholding for, any present or future taxes, levies, imposts, duties, fees, assessments or other charges of whatever nature now or hereafter imposed by any jurisdiction (or by any political subdivision or taxing authority thereof or therein) with respect to such payments (but excluding, except as provided in the second succeeding sentence, any tax levy, impost, duty, fee, assessment or other governmental charge imposed on or measured by the net income or net profits of a Lender (including, without limitation, any franchise tax imposed on or measured by net income or net profits and any branch profits taxes) pursuant to the laws of the jurisdiction in which it is organized or the jurisdiction in which the principal office or applicable lending office of such Lender is located (or any subdivision or taxing authority thereof or therein)) and all interest, penalties or similar liabilities with respect to such non-excluded taxes, levies, imposts, duties, fees, assessments or other governmental charges (all such non-excluded taxes, levies, imposts, duties, fees, assessments or other governmental charges being referred to collectively as "Taxes"). If any Taxes are so levied or imposed, the relevant Borrower shall pay the full amount of such Taxes to the relevant taxing authority in accordance with applicable law and shall pay to the relevant Lender such additional amounts as may be necessary so that every payment of all amounts due under this Agreement or under any Note, after withholding or deduction for or on account of any Taxes, will not be less than the amount provided for herein or in such Note. If any amounts are payable in respect of Taxes pursuant to the preceding sentence, the relevant Borrower agrees to reimburse each Lender lending to -24- 31 such Borrower, upon the written request of such Lender, for taxes imposed on or measured by the net income or net profits of such Lender (including, without limitation, any franchise tax imposed on or measured by net income or net profits and any branch profits taxes imposed by the United States of America or similar taxes imposed by any political subdivision thereof) pursuant to the laws of the jurisdiction in which such Lender is organized or in which the principal office or applicable lending office of such Lender is located (or of any subdivision or taxing authority therein or thereof) and for any withholding of taxes as such Lender shall determine are payable by, or withheld from, such Lender in respect of such amounts so paid to or on behalf of such Lender pursuant to the preceding sentence and in respect of any amounts paid to or on behalf of such Lender pursuant to this sentence. Each Borrower will furnish to the Administrative Agent within 45 days after the date the payment of any Taxes is due pursuant to applicable law certified copies of tax receipts, if any, issued by such taxing authority or other evidence reasonably acceptable to the Administrative Agent evidencing such payment by such Borrower (or, if such Borrower has not received such certified copies of tax receipts within such time period, then such Borrower shall furnish such certified copies of tax receipts to the Administrative Agent within 15 days after such Borrower has received such certified copies of tax receipts). Each Borrower agrees to indemnify and hold harmless each Lender, and reimburse such Lender upon its written request, for the amount of any Taxes so levied or imposed and paid by such Lender, other then penalties, additions to tax, interest and expenses arising as a result of the willful misconduct or gross negligence of such Lender. Such indemnification shall be made within 30 days after the date upon which such Lender makes written demand therefor, which demand shall identify the nature and the amount of Taxes for which indemnification is sought and shall include a copy of any written assessment thereof. (b) Each Lender that is not a United States person (as such term is defined in Section 7701(a)(30) of the Code) for Federal income tax purposes agrees to deliver to WLI and the Administrative Agent on or prior to the Effective Date, or in the case of a Lender that is an assignee or transferee of an interest under this Agreement pursuant to Section 1.13 or 12.04 (unless the respective Lender was already a Lender hereunder immediately prior to such assignment or transfer), on the date of such assignment or transfer to such Lender, (i) two accurate and complete original signed copies of Internal Revenue Service Form 4224 or 1001 (or successor forms) certifying to such Lender's entitlement to a complete exemption from United States withholding tax with respect to payments to be made by WLI under this Agreement and under any Note or (ii) if the Lender is not a "bank" within the meaning of Section 881(c)(3)(A) of the Code and cannot deliver either Internal Revenue Service Form 1001 or 4224 pursuant to clause (i) above, (x) a certificate substantially in the form of Exhibit D (any such certificate, a "Section 4.04 Certificate") and (y) two accurate and complete original signed copies of Internal Revenue Service Form W-8 (or successor form) certifying to such Lender's entitlement to a complete exemption from United States withholding tax with respect to payments of interest to be made by WLI under this Agreement and under any Note. In addition, each such Lender agrees that, from time to time after the Effective Date, when a lapse in time or change in circumstances renders the previous certification obsolete or -25- 32 inaccurate in any material respect, it will deliver to WLI and the Administrative Agent two new accurate and complete original signed copies of Internal Revenue Service Form 4224 or 1001, or Form W-8 and a Section 4.04 Certificate, as the case may be, and such other forms as may be required in order to confirm or establish the entitlement of such Lender to a continued exemption from or reduction in United States withholding tax with respect to payments made by WLI under this Agreement and any Note, or, if legally unable to deliver such forms, it shall immediately notify WLI and the Administrative Agent of its inability to deliver any such Form or Certificate in which case such Lender shall not be required to deliver any such Form or Certificate pursuant to this Section 4.04(b). Notwithstanding anything to the contrary contained in Section 4.04(a), but subject to Section 12.04(b) and the immediately succeeding sentence, (x) WLI shall be entitled, to the extent it is required to do so by law, to deduct or withhold income or similar taxes imposed by the United States (or any political subdivision or taxing authority hereof or therein) from interest, fees or other amounts payable hereunder by WLI for the account of any Lender which is not a United States person (as such term is defined in Section 7701(a)(30) of the Code) for Federal income tax purposes to the extent that such Lender has not provided to WLI Internal Revenue Service Forms that establish a complete exemption from such deduction or withholding and (y) WLI shall not be obligated pursuant to Section 4.04(a) hereof to gross-up payments to be made to any such Lender in respect of income or similar taxes imposed by the United States if (I) such Lender has not provided to WLI the Internal Revenue Service Forms required to be provided to WLI pursuant to this Section 4.04(b) or (II) in the case of a payment, other than interest, to a Lender described in clause (ii) of the last sentence of this Section 4.04(b) above, to the extent that such Forms do not establish a complete exemption from withholding of such taxes. Notwithstanding anything to the contrary contained in the preceding sentence or elsewhere in this Section 4.04 and except as set forth in Section 12.04(b), WLI agrees to pay additional amounts and to indemnify each Lender in the manner set forth in Section 4.04(a) (without regard to the identity of the jurisdiction requiring the deduction or withholding) in respect of any Taxes deducted or withheld by it as described in the immediately preceding sentence as a result of any changes after the Effective Date in any applicable law, treaty, governmental rule, regulation, guideline or order, or in the interpretation thereof, relating to the deducting or withholding of such Taxes. (c) If a Borrower pays any additional amount under this Section 4.04 to a Lender and such Lender determines in its sole discretion that it has actually received or realized in connection therewith any refund or any reduction of, or credit against, its Tax liabilities in or with respect to the taxable year in which the additional amount is paid, such Lender shall pay to the Borrower an amount that such Lender shall, in its sole discretion, determine is equal to the net benefit, after tax, which was obtained by the Lender in such year as a consequence of such refund, reduction or credit. Such amount shall be paid as soon as practicable after receipt or realization by such Lender of such refund, reduction or credit. Nothing in this Section 4.04(c) shall require any Lender to disclose or detail the basis of its -26- 33 calculation of the amount of any refund or reduction of, or credit against, its tax liabilities or any other information to any Borrower or any other Person. (d) Each Lender shall use reasonable efforts (consistent with legal and regula tory restrictions and subject to overall policy considerations of such Lender) to file any certificate or document or to furnish any information as reasonably requested by a Borrower pursuant to any applicable treaty, law or regulation, if the making of such filing or the furnishing of such information would avoid the need for or reduce the amount of any amounts payable by a Borrower under Section 4.04(a) and would not, in the reasonable judgment of such Lender, be disadvantageous to such Lender. SECTION 5. CONDITIONS PRECEDENT. 5.01 CONDITIONS PRECEDENT TO CLOSING DATE. The obligation of the Lenders to make Loans, and of the Letter of Credit Issuer to issue Letters of Credit, on the Closing Date is subject to the satisfaction of each of the following conditions at such time: (a) EFFECTIVENESS; NOTES. On or prior to the Closing Date, (i) the Effective Date shall have occurred and (ii) there shall have been delivered to the Administrative Agent for the account of each Lender the appropriate Note or Notes executed by WLI and EU Holdco, in each case, in the amount, maturity and as otherwise provided herein. (b) OPINIONS OF COUNSEL. On the Closing Date, the Administrative Agent shall have received opinions, addressed to each Agent and each of the Lenders and dated the Closing Date, from (i) Skadden, Arps, Slate, Meagher & Flom LLP, special counsel to WLI and Alan R. Cormier, Esq., Corporate Counsel of WLI, which opinions shall cover the matters contained in Exhibit E-1 hereto, (ii) White & Case LLP, special counsel to the Administrative Agent, which opinion shall cover the matters contained in Exhibit E-2 hereto and (iii) such counsel in the Netherlands as is satisfactory to the Agents, which opinion shall cover certain matters relating to the Credit Documents executed by EU Holdco and such other matters incident to the transactions contemplated herein as the Agents may reasonably request and shall be in form and substance satisfactory to the Agents. (c) CORPORATE PROCEEDINGS. (I) On the Closing Date, the Administrative Agent shall have received from WLI a certificate, dated the Closing Date, signed by its President, any Vice-President or its Secretary in the form of Exhibit F-1 with appropriate insertions and deletions, together with (x) copies of the certificate of incorporation, by-laws or other organizational documents of each Domestic Credit Party and EU Holdco, (y) the resolutions of each Domestic Credit Party and EU Holdco relating to the Credit Documents and, to the extent relevant, the Transaction, which shall be satisfactory to the Agents, and (z) a statement that all of the applicable conditions set forth in Sections 5.01(h) and (i) and 5.03 exist as of such date. -27- 34 (II) On the Closing Date, all corporate and legal proceedings and all instruments and agreements in connection with the transactions contemplated by this Agreement and the other Transaction Documents shall be satisfactory in form and substance to the Agents, and the Administrative Agent shall have received all information and copies of all certificates, documents and papers, including good standing certificates and any other records of corporate proceedings and governmental approvals, if any, which the Agents may have requested in connection therewith, such documents and papers, where appropriate, to be certified by proper corporate or governmental authorities. (d) PLANS; ETC. On or prior to the Closing Date, there shall have been made available to the Administrative Agent: (i) all Plans (and for each Plan that is required to file an annual report on Internal Revenue Service Form 5500-series, a copy of the most recent such report (including, to the extent required, the related financial and actuarial statements and opinions and other supporting statements, certifications, schedules and information), and for each Plan that is a "single-employer plan," as defined in Section 4001(a)(15) of ERISA, the most recently prepared actuarial valuation therefor), Foreign Pension Plans (and all actuarial evaluations prepared therefor), Multiemployer Plans and any other "employee benefit plans," as defined in Section 3(3) of ERISA, and any other material agreements, plans or arrangements, with or for the benefit of current or former employees of any Designated Party or any ERISA Affiliate (provided that the foregoing shall apply in the case of any Multiemployer Plan, only to the extent that any document described therein is in the possession of a Designated Party or any ERISA Affiliate or reasonably available thereto from the sponsor or trustee of any such plan); (ii) any material collective bargaining agreements or any other similar agreement or arrangements covering the employees of any Designated Party; (iii) all agreements evidencing or relating to the Existing Indebtedness listed on Annex VI; (iv) all agreements entered into by any Designated Party governing the terms and relative rights of its capital stock; (v) any agreement with respect to the management of any Designated Party; (vi) any material employment agreements entered into by any Designated Party; and -28- 35 (vii) any tax sharing, tax allocation and other similar agreements entered into by any Designated Party; all of which shall be in form and substance satisfactory to the Agents and shall be in full force and effect on the Closing Date. (e) ADVERSE CHANGE, ETC. Since September 30, 1997, nothing shall have occurred (and neither any Lender nor any Agent shall have become aware of any facts or conditions not previously known) which either Agent or the Required Lenders shall deter mine has had, or is reasonably likely to have, a Material Adverse Effect. (f) CONSENT LETTER. On the Closing Date, the Administrative Agent shall have received a letter from CT Corporation System, substantially in the form of Exhibit J hereto, indicating its consent to its present or future appointment by each Designated Party as its agent to receive service of process. (g) APPROVALS. On the Closing Date, all material necessary govern mental and third party approvals in connection with the Acquisition shall have been obtained and remain in effect, and all applicable waiting periods shall have expired without any action being taken by any competent authority which restrains or prevents the Acquisition or imposes, in the judgment of the Required Lenders or either Agent, materially adverse conditions upon the consummation of the Acquisition. (h) CONSUMMATION OF THE ACQUISITION, ETC. (I) On or prior to the Closing Date, (i) all conditions precedent set forth in the Acquisition Documents shall have been satisfied and not waived (unless waived with the consent of the Agents), (ii) WLI shall have effected the Equity Issuance and (iii) the Acquisition shall have been consummated in accordance with the Acquisition Documents and all applicable laws. (II) On or prior to the Closing Date, the Administrative Agent shall have received true and correct copies of each of the Transaction Documents certified as such by an Authorized Officer of WLI, each of which shall have been duly authorized, executed and delivered by the parties thereto and shall be in full force and effect and in form and sub stance (including all terms and conditions thereof) reasonably satisfactory to the Agents (including, without limitation, the percentage of the Equity Issuance comprised of SARs and the timing of any required payment in respect of the SARs so issued). (i) INDEBTEDNESS. On the Closing Date and after giving effect to the Acquisition and the refinancing of existing Indebtedness of WLI and its Subsidiaries on such date, WLI and its Subsidiaries shall have no outstanding Indebtedness other than (x) the Loans hereunder and (y) the Existing Indebtedness. -29- 36 (j) GUARANTIES. On the Closing Date, each Domestic Subsidiary shall have duly authorized, executed and delivered a guaranty of all the Obligations in the form of Exhibit G hereto (as modified, amended or supplemented from time to time in accordance with the terms hereof and thereof, the "US Guaranty"), and the US Guaranty shall be in full force and effect. (k) SECURITY DOCUMENTS. (I) On the Closing Date, each Domestic Credit Party shall have each duly authorized, executed and delivered a pledge agreement in the form of Exhibit H (as modified, amended or supplemented from time to time in accordance with the terms thereof and hereof, the "US Pledge Agreement") and (except as provided therein) shall have delivered to the Collateral Agent, as pledgee thereunder, certificates representing all the Pledged Securities referred to therein and then existing, endorsed in blank or accompanied by executed and undated stock powers, and the US Pledge Agreement shall be in full force and effect. (II) On the Closing Date, each Domestic Credit Party shall have each duly authorized, executed and delivered a security agreement substantially in the form of Exhibit I (as modified, supplemented or amended from time to time, the "US Security Agreement") covering all the Collateral described therein, in each case together with: (i) executed copies of Financing Statements (Form UCC-1) in appropriate form for filing under the UCC of each jurisdiction as may be necessary to perfect the security interests purported to be created by the U.S. Security Agreement; (ii) copies of Requests for Information or Copies (Form UCC-11), or equivalent reports, each of recent date listing all effective financing statements that name any Domestic Credit Party as debtor and that are filed in the jurisdictions referred to in clause (i), together with copies of such financing statements (none of which shall cover the Collateral except (x) those with respect to which appropriate termination statements executed by the secured lender thereunder have been filed or delivered to the Administrative Agent and (y) to the extent evidencing Permitted Liens); (iii) evidence of the completion of all other recordings and filings of, or with respect to, the US Security Agreement as may be necessary or, in the reasonable opinion of the Collateral Agent, desirable to perfect the security interests intended to be created by the US Security Agreement (or arrangements satisfactory to the Administrative Agent providing for the subsequent completion thereof); and (iv) evidence that all other actions necessary or, in the reasonable opinion of the Collateral Agent, desirable to perfect and protect the security interests purported -30- 37 to be created by the US Security Agreement have been taken or provided for in a manner satisfactory to the Administrative Agent; and the US Security Agreement shall be in full force and effect. (III) On the Closing Date, EU Holdco shall have duly authorized, executed and delivered a pledge agreement and/or security agreement in form and substance, and purporting to cover collateral (which will in any event include the pledge of all EU Intercompany Notes), satisfactory to the Agents (as modified, supplemented or amended from time to time, the "EU Holdco Security Documents") securing EU Holdco's obligations hereunder and under its Foreign Guaranty (once executed). (l) SOLVENCY. On the Closing Date, the Administrative Agent shall receive from the vice president and treasurer of WLI, a certificate in the form of Exhibit K hereto. (m) FEES. On the Closing Date, the Borrowers shall have paid to the Agents and the Lenders all Fees and expenses agreed upon by such parties to be paid on or prior to such date. (n) LITIGATION. There shall be no actions, suits or proceedings pending or threatened with respect to the Acquisition, this Agreement or any other Credit Document or which the Agents or Required Lenders shall determine has had or is reasonably likely to have a Material Adverse Effect. 5.02 CONDITIONS PRECEDENT TO THE FULL UTILIZATION DATE. The occurrence of the Full Utilization Date is subject to the satisfaction of each of the following conditions at such time: (a) EXECUTION; NOTES. On or prior to the Full Utilization Date, (i) the Italian Borrower shall have become party to this Agreement by authorizing, executing and delivering to the Agents a counterpart of this Agreement (executed on the signature line provided for the Italian Borrower) and (ii) there shall have been delivered to the Lira Lender the Lira Note executed by the Italian Borrower in the amount, maturity and as otherwise provided herein. (b) OPINIONS OF COUNSEL. On the Full Utilization Date, the Administrative Agent shall have received opinions, addressed to each Agent and each of the Lenders and dated the Full Utilization Date, from such counsel in the United Kingdom, France, Germany, Denmark, the Netherlands, Spain and Italy as are satisfactory to the Agents, which opinions shall cover certain matters relating to the Credit Documents executed by the Designated Parties located in such countries and/or security interests granted pursuant to such Credit Documents and such other matters incident to the transactions contemplated herein as the Agents may reasonably request and shall be in form and substance satisfactory to the Agents. -31- 38 (c) CORPORATE PROCEEDINGS. (I) On the Full Utilization Date, the Administrative Agent shall have received from WLI a certificate, dated the Full Utilization Date, signed by its President, any Vice-President or its Secretary in the form of Exhibit F-2 with appropriate insertions and deletions, together with (x) copies of the certificate of incorporation, by-laws or other organizational documents of each Designated Party not delivered pursuant to Section 5.01(c) and required by the Agents and (y) the resolutions of each such Designated Party relating to the Credit Documents, which shall be satisfactory to the Agents. (II) On the Full Utilization Date, all corporate and legal proceedings and all instruments and agreements in connection with the transactions contemplated by this Agreement shall be satisfactory in form and substance to the Agents, and the Administrative Agent shall have received all information and copies of all certificates, documents and papers, including good standing certificates and any other records of corporate proceedings and governmental approvals, if any, which the Agents may have requested and required in connection therewith, such documents and papers, where appropriate, to be certified by proper corporate or governmental authorities. (d) GUARANTIES. (I) On or prior to the Full Utilization Date, each Foreign Subsidiary that is listed on Annex IV, Part II shall have duly authorized, executed and delivered a guaranty in respect of all Obligations owing by the Foreign Borrowers in form and substance satisfactory to the Agents to achieve substantially the same result as the US Guaranty but subject to the requirements of local law (as modified, amended or supplemented from time to time in accordance with the terms hereof and thereof, the "Foreign Guaranties"), and the Foreign Guaranties shall be in full force and effect. (II) On or prior to the Full Utilization Date, each Subsidiary of EU Holdco that (x) is a Material Subsidiary or (y) has outstanding intercompany loans and or advances owing to EU Holdco shall have duly authorized, executed and delivered to EU Holdco a EU Intercompany Note, each of which shall be in full force and effect. (e) SECURITY DOCUMENTS. On or prior to the Full Utilization Date, each Foreign Subsidiary listed on Annex IV, Part III shall have duly authorized, executed and delivered a pledge agreement and/or security agreement in form and substance, and purporting to cover collateral, satisfactory to the Agents (together with the EU Holdco Security Documents and any of such agreements executed in compliance with Section 7.12, and as modified, supplemented or amended from time to time, the "EU Holdco Security Documents") securing such Foreign Subsidiary's obligations hereunder, under its Foreign Guaranty (if any) and/or its EU Intercompany Note (if any) and, in each case together with evidence of the completion of all deliveries under, and recordings and filings of, or with respect to, the Foreign Security Documents as may be necessary or, in the reasonable opinion of the Collateral Agent, desirable to perfect the security interest intended to be created by the Foreign Security Documents. -32- 39 5.03 CONDITIONS PRECEDENT TO ALL CREDIT EVENTS. The obligation of each Lender to make Loans and the obligation of the Letter of Credit Issuer to issue any Letter of Credit (including in each case Loans made, and Letters of Credit issued, on the Closing Date) is subject, at the time of each such Credit Event, to the satisfaction of the following conditions: (a) NOTICE OF BORROWING; LETTER OF CREDIT REQUEST. The Administrative Agent shall have received a Notice of Borrowing meeting the requirements of Section 1.02 with respect to the incurrence of Loans or a Letter of Credit Request meeting the requirements of Section 2.03 with respect to the issuance of a Letter of Credit. (b) NO DEFAULT; REPRESENTATIONS AND WARRANTIES. At the time of each Credit Event and also after giving effect thereto, (i) there shall exist no Default or Event of Default and (ii) all representations and warranties made by any Designated Party contained herein or in the other Credit Documents shall be true and correct in all material respects with the same effect as though such representations and warranties had been made on and as of the date of such Credit Event. The acceptance of the benefits of each Credit Event shall constitute a representation and warranty by the respective Borrower to the Agents and each of the Lenders that all of the applicable conditions specified in Section 5.01 (in the case of the Credit Events occurring on the Closing Date), 5.02 (in the case of the occurrence of the Full Utilization Date) and/or 5.03, as the case may be, exist as of that time. All of the certificates, legal opinions and other documents and papers referred to in Section 5.01, 5.02 or 5.03, unless otherwise specified, shall be delivered to the Administrative Agent at its Notice Office for the account of each of the Lenders and, except for the Notes, in sufficient counterparts for each of the Lenders and shall be satisfactory in form and substance to the Agents. SECTION 6. REPRESENTATIONS, WARRANTIES AND AGREEMENTS. In order to induce the Lenders to enter into this Agreement and to make the Loans and issue and/or participate in Letters of Credit provided for herein, WLI makes the following representations and warranties to, and agreements with, the Lenders, all of which shall survive the execution and delivery of this Agreement and the making of the Loans: 6.01 CORPORATE STATUS. Each of WLI and each of its Material Subsidiaries (i) is a duly organized and validly existing Company in good standing under the laws of the juris diction of its organization and has the Company power and authority to own its property and assets and to transact the business in which it is engaged and presently proposes to engage and (ii) has duly qualified and is authorized to do business and is in good standing in all juris dictions where it is required to be so qualified and where the failure to be so qualified would have a Material Adverse Effect. -33- 40 6.02 CORPORATE POWER AND AUTHORITY. Each Designated Party has the Company power and authority to execute, deliver and carry out the terms and provisions of the Credit Documents to which it is a party and has taken all necessary Company action to authorize the execution, delivery and performance of the Credit Documents to which it is a party. Each Designated Party has duly executed and delivered each Credit Document to which it is a party and each such Credit Document constitutes the legal, valid and binding obligation of such Person enforceable in accordance with its terms except to the extent the enforceability thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws generally affecting creditors' rights and by equitable principles (regardless of whether enforcement is sought in equity or at law). 6.03 NO VIOLATION. Neither the execution, delivery and performance by any Designated Party of the Credit Documents to which it is a party nor compliance with the terms and provisions thereof, nor the consummation of the transactions contemplated therein (i) will contravene any applicable provision of any law, statute, rule, regulation, order, writ, injunction or decree of any court or governmental instrumentality, (ii) will conflict or be inconsistent with or result in any breach of, any of the terms, covenants, conditions or provisions of, or constitute a default under, or (other than pursuant to the Security Documents) result in the creation or imposition of (or the obligation to create or impose) any Lien upon any of the property or assets of WLI or any of its Subsidiaries pursuant to the terms of any indenture, mortgage, deed of trust, agreement or other instrument to which WLI or any of its Subsidiaries is a party or by which it or any of its property or assets are bound or to which it may be subject or (iii) will violate any provision of the certificate of incorporation, by-laws or equivalent organizational documents of WLI or any of its Subsidiaries. 6.04 LITIGATION. There are no actions, suits or proceedings pending or to WLI's knowledge threatened with respect to WLI or any of its Subsidiaries that have had or are reasonably likely to have (i) a Material Adverse Effect or (ii) a material adverse effect on the rights or remedies of the Lenders or on the ability of the Designated Parties to perform their obligations to them hereunder and under the other Credit Documents. 6.05 USE OF PROCEEDS; MARGIN REGULATIONS. (a) The proceeds of all Loans may be used (x) on the Closing Date to finance the Net Cash Payment owing on the Closing Date under the Acquisition Agreement, to refinance Indebtedness of WLI and its Subsidiaries outstanding on the Closing Date and to pay fees and expenses incurred in connection with the Acquisition, provided that (x) only Loans incurred by WLI may be used to finance the Acquisition (including payments pursuant to the Deferred Payment Agreement) and (y) no more than $100 million in Principal Amount of Loans may be incurred for such purposes plus Loans incurred to finance any cash payment obligation of WLI under the Deferred Payment Agreement and (y) after the Closing Date, (i) in the case of borrowings by WLI for the general corporate and working capital purposes of WLI and the Domestic Subsidiaries, to make advances to Other Foreign Subsidiaries to finance their respective general corporate and -34- 41 working capital requirements to the extent such advances are permitted by Section 8.04(b) and, on and after the Full Utilization Date, are evidenced by WLI Intercompany Notes and to make investments to the extent permitted by Section 8.06(l), (ii) in the case of borrowings by EU Holdco, to make advances to its Subsidiaries to finance their respective general corporate and working capital requirements (but excluding increases of capital to the Italian Borrower and its Subsidiaries) to the extent such advances are permitted by Section 8.04(b) and, on and after the Full Utilization Date, are evidenced by EU Intercompany Notes and (z) in the case of the Italian Borrower, to finance its and its Subsidiaries' general corporate and working capital needs. (b) Neither the making of any Loan hereunder, nor the use of the proceeds thereof, will violate or be inconsistent with the provisions of Regulation G, T, U or X of the Board of Governors of the Federal Reserve System and no part of the proceeds of any Loan will be used to purchase or carry any Margin Stock or to extend credit for the purpose of purchasing or carrying any Margin Stock. 6.06 GOVERNMENTAL APPROVALS. Except for filings and recordings in connection with the Security Documents, no order, consent, approval, license, authorization, or validation of, or filing, recording or registration with, or exemption by, any foreign or domestic governmental or public body or authority, or any subdivision thereof, is required to authorize or is required in connection with (i) the execution, delivery and performance of any Credit Document or (ii) the legality, validity, binding effect or enforceability of any Credit Document. 6.07 INVESTMENT COMPANY ACT. Neither WLI nor any of its Subsidiaries is an "investment company" within the meaning of the Investment Company Act of 1940, as amended. 6.08 PUBLIC UTILITY HOLDING COMPANY ACT. Neither WLI nor any of its Subsidiaries is a "holding company," or a "subsidiary company" of a "holding company," or an "affiliate" of a "holding company" or of a "subsidiary company" of a "holding company," within the meaning of the Public Utility Holding Company Act of 1935, as amended. 6.09 TRUE AND COMPLETE DISCLOSURE. All factual information (taken as a whole) heretofore or contemporaneously furnished by or on behalf of (at the direction or with the knowledge of) WLI or any of its Subsidiaries (giving effect to the Acquisition) in writing to the Agents for purposes of or in connection with this Agreement or any transaction contemplated herein is, and all other such factual information (taken as a whole) hereafter furnished by or on behalf of any such Person in writing to the Agents will be, true and accurate in all material respects on the date as of which such information is dated or certified and not incomplete by omitting to state any material fact necessary to make such information (taken as a whole) not misleading at such time in light of the circumstances under which such information was provided. The projections and PRO FORMA financial information contained in -35- 42 such materials are based on good faith estimates and assumptions believed by WLI to be reasonable at the time made, it being recognized by the Lenders that such projections as to future events are not to be viewed as facts or an assurance of performance and that actual results during the period or periods covered by any such projections may differ from the projected results. There is no fact known to WLI which is reasonably likely to have a Material Adverse Effect, which has not been disclosed herein or in such other documents, certificates and statements furnished to the Lenders for use in connection with the transactions contemplated hereby. 6.10 FINANCIAL CONDITION; FINANCIAL STATEMENTS. (a) On and as of the Closing Date, on a PRO FORMA basis after giving effect to the Transaction and all Indebtedness incurred, and to be incurred (including, without limitation, the Loans), and Liens created, and to be created, by each Designated Party in connection therewith, (x) the sum of the assets, at a fair valuation, of WLI and its Subsidiaries taken as a whole will exceed their debts, (y) WLI and its Subsidiaries taken as a whole will not have incurred or intended to, or believe that they will, incur debts beyond their ability to pay such debts as such debts mature and (z) WLI and its Subsidiaries taken as a whole would not have unreasonably small capital with which to conduct their business. For purposes of this Section 6.10, "debt" means any liability on a claim, and "claim" means (i) right to payment whether or not such a right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured or unsecured; or (ii) right to an equitable remedy for breach of performance if such breach gives rise to a payment, whether or not such right to an equitable remedy is reduced to judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured or unsecured. (b) (i) The audited consolidated balance sheets of WLI as at June 30, 1996 and June 30, 1997, and the related consolidated statements of operations and cash flows of WLI for the periods ended as of said dates, which have been examined by Ernst & Young LLP, independent certified public accountants, (ii) the unaudited consolidated and consolidating balance sheet of WLI as at December 31, 1997, and the related consolidated and consolidating statements of operations and cash flows of WLI for the six-month period ended as of such date, (iii) the audited combined consolidated balance sheets of the Acquired Businesses as at December 31, 1996 and September 30, 1997, and the related combined consolidated statements of operations and cash flows of the Acquired Businesses for the periods ended as of said dates, which have been examined by Coopers & Lybrand, independent certified public accountants, (iv) an unaudited combined profit and loss statement for Olivetti Solutions S.p.A. and the Subsidiaries and Olivetti Corporation of Japan and a report on the combined net financial position of Olivetti Solutions S.p.A. and the Subsidiaries, Olivetti Corporation of Japan and Olsy do Brasil Ltda for the twelve month period ended December 31, 1997, in each case, reflecting the best estimate of the senior management of Ing. C. Olivetti & C.S.p.A., Olivetti Solutions S.p.A., Olivetti Corporation of Japan, Olsy do Brasil Ltda and their Subsidiaries as of the date thereof, and (v) the PRO FORMA projected consolidated balance sheet of WLI dated -36- 43 as of December 31, 1997 after giving effect to the Transaction, copies of which have heretofore been furnished to each Lender, present fairly the consolidated financial position of such entities at the dates of said statements and the consolidated results for the periods covered thereby (or, in the case of the PRO FORMA balance sheet, presents a good faith estimate of the consolidated PRO FORMA consolidated financial position of WLI (after giving effect to the Transaction) at the date thereof) in conformity with GAAP, except to the extent provided in the notes to said financial statements and, with respect to such interim financial statements, subject to changes resulting from audit and normal year-end audit adjustments. All such financial statements (other than the aforesaid PRO FORMA balance sheet) have been prepared in conformity with GAAP consistently applied except to the extent provided in the notes to said financial statements and, with respect to interim financial statements, subject to changes resulting from audit and normal year-end audit adjustments. Since December 31, 1997 nothing has occurred that has had or is reasonably likely to have a Material Adverse Effect. (c) Except as reflected in the financial statements and the notes thereto described in Section 6.10(b), there were as of the Closing Date (and after giving effect to the Transaction) no liabilities or obligations with respect to WLI or any of its Subsidiaries of a nature (whether absolute, accrued, contingent or otherwise and whether or not due) which, either individually or in aggregate, would be material to WLI and its Subsidiaries taken as a whole, except as incurred in the ordinary course of business consistent with past practices subsequent to December 31, 1997. 6.11 SECURITY INTERESTS. Once executed and delivered as required by the terms of this Agreement or the other Credit Documents and all filings, recordings and deliveries required thereunder have been accomplished, each of the Security Documents creates, as security for the Obligations purported to be secured thereby, a valid and enforce able perfected security interest in and Lien on all of the Collateral subject thereto, superior to and prior to the rights of all third Persons and subject to no other Liens (except Permitted Liens relating thereto), in favor of the Collateral Agent for the benefit of the Lenders. 6.12 REPRESENTATIONS AND WARRANTIES IN DOCUMENTS. All representations and warranties of WLI and EU Holdco, and to WLI's knowledge, of Sellers, set forth in the Acquisition Documents were true and correct in all material respects as of the time such representations and warranties were made and shall be true and correct in all material respects as of the Closing Date as if such representations and warranties were made on and as of such date, unless stated to relate to a specific earlier date. 6.13 TAX RETURNS AND PAYMENTS. Each of WLI and each of its Subsidiaries has filed all income tax returns and all other material tax returns, domestic and foreign, required to be filed by it and has paid all material taxes and assessments payable by it which have become due, except for (x) those contested in good faith and adequately disclosed and fully provided for on the financial statements of WLI and its Subsidiaries in accordance with -37- 44 generally accepted accounting principles and (y) those of Foreign Subsidiaries acquired pursuant to the Acquisition to the extent (i) occurring or arising prior to the Closing Date and (ii) the aggregate tax liabilities (not indemnified by the Sellers) for all such Foreign Subsidiaries do not exceed $5,000,000 (or the equivalent thereof). 6.14 COMPLIANCE WITH ERISA. (a) Annex III sets forth each Plan and Multiemployer Plan; each Plan (and each related trust, insurance contract or fund) is in substantial compliance with its terms and with all applicable laws, including, without limitation, ERISA and the Code; each Plan which is intended to be qualified under Section 401(a) of the Code has received a determination letter from the Internal Revenue Service to the effect that it meets the requirements of Sections 401(a) and its related trust, if any, meets the requirements of Section 501(a) of the Code; no Reportable Event has occurred; to the knowledge of WLI, any Subsidiary or any ERISA Affiliate, Multiemployer Plan is insolvent or in reorganization; no Plan has an Unfunded Current Liability which, when added to the aggregate amount of Unfunded Current Liabilities with respect to all other Plans, is reasonably likely to have a Material Adverse Effect; no Plan which is subject to Section 412 of the Code or Section 302 of ERISA has an accumulated funding deficiency, within the meaning of such sections of the Code or ERISA, or has applied for or received a waiver of an accumulated funding deficiency or an extension of any amortization period, within the meaning of Section 412 of the Code or Section 303 or 304 of ERISA; all contributions required to be made by WLI, any Subsidiary or any ERISA Affiliate with respect to a Plan or Multiemployer Plan have been timely made; neither WLI nor any of its Subsidiaries nor any ERISA Affiliate has incurred any material liability (including any indirect, contingent or secondary liability) to or on account of a Plan or Multiemployer Plan pursuant to Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section 401(a)(29), 4971 or 4975 of the Code or expects to incur any such material liability under any of the foregoing sections with respect to any Plan or Multiemployer Plan; no condition exists which presents a material risk to WLI or any of its Subsidiaries or any ERISA Affiliate of incurring a liability to or on account of a Plan or Multiemployer Plan pursuant to the foregoing provisions of ERISA and the Code; no proceedings have been instituted to terminate or appoint a trustee to administer any Plan which is subject to Title IV of ERISA; no action, suit, proceeding, hearing, audit or investigation with respect to the administration, operation or the investment of assets of any Plan (other than routine claims for benefits) is pending, expected or threatened; using actuarial assumptions and compilation methods consistent with Part 1 of subtitle E of Title IV of ERISA, the aggregate liabilities of WLI and its Subsidiaries and its ERISA Affiliates to all Multiemployer Plans in the event of a complete withdrawal therefrom, as of the close of the most recent fiscal year of each such Plan ended prior to the date of the most recent Credit Event, would not be reasonably likely to have a Material Adverse Effect; each group health plan (as defined in Section 607(1) of ERISA or Section 4980B(g)(2) of the Code) which covers or has covered employees or former employees of WLI, any Subsidiary or any ERISA Affiliate has at all times been operated in substantial compliance with the provisions of Part 6 of subtitle B of Title I of ERISA and Section 4980B of the Code and any failure to so comply would not -38- 45 result in a material liability; no lien that can be imposed under the Code or ERISA on the assets of WLI or any Subsidiary or any ERISA Affiliate exists or is likely to arise on account of any Plan; and WLI and its Subsidiaries may cease contributions to or terminate any employee benefit plan maintained by any of them without incurring any liability that would have a Material Adverse Effect. (b) Each Foreign Pension Plan has been maintained in substantial compliance with its terms and with the requirements of any and all applicable laws, statutes, rules, regulations and orders and has been maintained, where required, in good standing with applicable regulatory authorities, except in each case where the failure to so maintain any such Foreign Pension Plan is not reasonably likely to have a Material Adverse Effect. Neither WLI nor any of its Subsidiaries has incurred any material obligation in connection with the termination of or withdrawal from any Foreign Pension Plan. The present value of the accrued benefit liabilities (whether or not vested) under each Foreign Pension Plan, determined as of the end of WLI's most recently ended fiscal year on the basis of actuarial assumptions, each of which is reasonable, did not exceed the current value of the assets of such Foreign Pension Plan allocable to such benefit liabilities to an extent which is reasonably likely to have a Material Adverse Effect. 6.15 SUBSIDIARIES. On and as of the Closing Date and after giving effect to the consummation of the Transaction, WLI has no Material Subsidiaries other than those Subsidiaries listed on Annex IV, Part I. Annex IV, Part I correctly sets forth, as of the Closing Date and after giving effect to the Transaction, the percentage ownership (direct and indirect) of WLI in each class of equity securities of each of its Material Subsidiaries and also identifies the direct owner thereof. All outstanding shares of equity securities of each Material Subsidiary of WLI have been duly and validly issued, are fully paid and non-assessable and have been issued free of preemptive rights. As of the Closing Date, WLI and the Material Subsidiaries then in existence accounted for at least 85% of the combined revenues of WLI and its Subsidiaries (prior to the Acquisition) and the Acquired Business for the 12 months ending on December 31, 1997. 6.16 INTELLECTUAL PROPERTY. WLI and each of its Subsidiaries have obtained all patents, trademarks, service marks, trade names, copyrights, licenses and other rights that are necessary for the operation of their businesses taken as a whole as presently conducted and as proposed to be conducted without any known conflict with the rights of others which, or the failure to obtain which, as the case may be, has had or is reasonably likely to have a Material Adverse Effect. 6.17 ENVIRONMENTAL MATTERS. (a) Each of WLI and each of its Subsidiaries is in compliance with all applicable Environmental Laws governing its business for which failure to comply has had or is reasonably likely to have a Material Adverse Effect, and neither WLI nor any of its Subsidiaries is liable for any penalties, fines or forfeitures for failure to comply -39- 46 with any of the foregoing which has had or is reasonably likely to have a Material Adverse Effect. All licenses, permits, registrations or approvals required for the business of WLI and each of its Subsidiaries, as conducted as of the Closing Date, under any Environmental Law have been secured and WLI and each of its Subsidiaries is in substantial compliance therewith, except such licenses, permits, registrations or approvals the failure to secure which or to comply with which is not reasonably likely to have a Material Adverse Effect. Neither WLI nor any of its Subsidiaries is in any respect in noncompliance with, breach of or default under any applicable writ, order, judgment, injunction, or decree to which WLI or such Subsidiary is a party or which would affect the ability of WLI or such Subsidiary to operate any real property and no event has occurred and is continuing which, with the passage of time or the giving of notice or both, would constitute noncompliance, breach of or default thereunder, except in each such case, such noncompliance, breaches or defaults as have not had and are not reasonably likely to, in the aggregate, have a Material Adverse Effect. There are as of the Closing Date no Environmental Claims pending or, to the knowledge of WLI, threatened which is reasonably likely to have a Material Adverse Effect. There are no facts, circumstances, conditions or occurrences on any real property at any time owned or operated by WLI or any of its Subsidiaries or, to the knowledge of WLI, on any property adjacent to any such real property that are reasonably likely to (i) to form the basis of an Environmental Claim against WLI, any of its Subsidiaries or any currently owned or operated real property of WLI or any of its Subsidiaries, or (ii) to cause such currently owned or operated real property to be subject to any restrictions on the ownership, occupancy, use or transferability of such Real Property under any Environmental Law, except in each such case, such Environmental Claims or restrictions that individually, or in the aggregate, have not had and are not reasonably likely to have a Material Adverse Effect. (b) Hazardous Materials have not been (to the knowledge of WLI with respect to any time prior to WLI's or any of its Subsidiaries' ownership or operation of any such real property) (i) generated, used, treated or stored on, or transported to or from, any real property owned or operated by WLI or any of its Subsidiaries or (ii) released on or from any real property, in each case where such occurrence or event individually or in the aggregate has had and is reasonably likely to have a Material Adverse Effect. 6.18 LABOR RELATIONS. No Designated Party is engaged in any unfair labor practice that could reasonably be expected to have a Material Adverse Effect. There is (i) no unfair labor practice complaint pending against any Designated Party or threatened against any of them, before any governmental authority or regulatory body, and no grievance or arbitration proceeding arising out of or under any collective bargaining agreement is so pending against any Designated Party or threatened against any of them, (ii) no strike, labor dispute, slowdown or stoppage pending against any Designated Party or threatened against any Designated Party and (iii) no union representation question existing with respect to the employees of any Designated Party and no union organizing activities are taking place, except with respect to -40- 47 any matter specified in clause (i), (ii) or (iii) above, either individually or in the aggregate, such as has not had and is not reasonably likely to have a Material Adverse Effect. 6.19 EXISTING INDEBTEDNESS. Annex VI sets forth a true and complete list of all Indebtedness of WLI and each of its Subsidiaries as of the Closing Date in excess of $1,000,000 (or the equivalent) individually and which is to remain outstanding after giving effect to the Transaction (excluding the Loans, the Letters of Credit and intercompany Indebtedness permitted by 8.04(b), the "Existing Indebtedness"), in each case showing the aggregate principal amount thereof and the name of the respective borrower (or issuer) and any other entity which directly or indirectly guaranteed such debt. 6.20 COMPLIANCE WITH STATUTES, ETC. Each of WLI and each of its Subsidiaries is in compliance with all applicable statutes, regulations and orders of, and all applicable restrictions imposed by, all governmental bodies, domestic or foreign, in respect of the conduct of its business and the ownership of its property, except such non-compliance as has not had and is not reasonably likely to, individually or in the aggregate, have a Material Adverse Effect. 6.21 ACQUISITION. On and as of the Closing Date, (i) all material consents and approvals of, and filings and registrations with, and all other actions in respect of, all governmental agencies, authorities or instrumentalities required to be obtained, given, filed or taken in order to make or consummate the Acquisition will have been obtained, given, filed or taken and are or will be in full force and effect (or effective judicial relief with respect thereto will have been obtained) and (ii) the Acquisition shall have been consummated in accordance, in all material respects, with the applicable Acquisition Documents and in compliance, in all material respects, with all applicable laws. SECTION 7. AFFIRMATIVE COVENANTS. WLI hereby covenants and agrees that on the Closing Date and thereafter until the Commitments have terminated, no Letters of Credit or Notes are outstanding and the Loans and Unpaid Drawings, together with interest, Fees and all other Obligations (other than any indemnities described in Section 12.13 which are not then owing) incurred hereunder, are paid in full: 7.01 INFORMATION COVENANTS. WLI will furnish to each Lender: (a) ANNUAL FINANCIAL STATEMENTS. Within 90 days after the close of each fiscal year of WLI, the consolidated balance sheet of WLI and its Subsidiaries, as at the end of such fiscal year and the related consolidated statements of income, changes in stockholders equity and cash flows for such fiscal year, in each case setting forth comparative figures for the preceding fiscal year, and examined by independent certified public accountants of recognized national standing whose opinion shall not be qualified as to the scope of audit and as to the status of WLI and its Subsidiaries as a going concern, together with a certificate of such -41- 48 accounting firm stating that in the course of its regular audit of the business of WLI and its Subsidiaries, which audit was conducted in accordance with generally accepted auditing standards, such accounting firm has obtained no knowledge of any Default or Event of Default which has occurred and is continuing or, if in the opinion of such accounting firm such a Default or Event of Default has occurred and is continuing, a statement as to the nature thereof. (b) QUARTERLY FINANCIAL STATEMENTS. As soon as available and in any event within 45 days after the close of each of the first three quarterly accounting periods in each fiscal year, the consolidated balance sheet of WLI and its Subsidiaries, as at the end of such quarterly period and the related consolidated statements of income, changes in stockholders equity and cash flows for such quarterly period and for the elapsed portion of the fiscal year ended with the last day of such quarterly period, and in each case setting forth comparative figures for the related periods in the prior fiscal year, all of which shall be certified by the chief financial officer, controller or treasurer of WLI, subject to changes resulting from audit and normal year-end audit adjustments. (c) BUDGETS; ETC. Not more than 90 days after the commencement of each fiscal year of WLI, a consolidated budget of WLI and its Subsidiaries in reasonable detail for each quarter of such fiscal year. Together with each delivery of consolidated financial statements pursuant to Sections 7.01(a) and (b), a comparison of the current year-to-date quarterly financial results against the budgets required to be submitted pursuant to this clause (d) shall be presented. (d) OFFICER'S CERTIFICATES. At the time of the delivery of the financial statements provided for in Sections 7.01(a) and (b) a certificate of the chief financial officer, controller, treasurer or other Authorized Officer of WLI to the effect that no Default or Event of Default exists or, if any Default or Event of Default does exist, specifying the nature and extent thereof, which certificate shall set forth the calculations required to establish (I) the Leverage Ratio for the Test Period ending on the last day of the fiscal year or quarter covered by such financial statements and (II) whether WLI and its Subsidiaries were in compliance with the provisions of Sections 8.10 through 8.14 as at the end of such fiscal year or quarter, as the case may be. (e) NOTICE OF DEFAULT OR LITIGATION. Promptly, and in any event within five Business Days after any executive officer of WLI obtains knowledge thereof, notice of (x) the occurrence of any event which constitutes a Default or Event of Default and (y) the commencement of or any significant development in any litigation or governmental proceeding pending against WLI or any of its Subsidiaries which is likely to have a Material Adverse Effect or is likely to have a material adverse effect on the ability of WLI or any of its Subsidiaries to perform its obligations hereunder or under any other Credit Document. -42- 49 (f) ENVIRONMENTAL MATTERS. Promptly after obtaining knowledge of any of the following (but only to the extent that any of the following could reasonably be expected to (x) have a Material Adverse Effect, either individually or in the aggregate, or (y) result in a remedial cost to WLI or any of its Subsidiaries in excess of $5,000,000, written notice of: (i) any pending or threatened Environmental Claim against WLI or any of its Subsidiaries or any Real Property owned or operated by WLI or any of its Subsidiaries; (ii) any condition or occurrence on any Real Property owned or operated by WLI or any of its Subsidiaries that (x) results in noncompliance by WLI or any of its Subsidiaries with any applicable Environmental Law or (y) could reasonably be anticipated to form the basis of an Environmental Claim against WLI or any of its Subsidiaries or any such Real Property; (iii) any condition or occurrence on any Real Property owned or operated by WLI or any of its Subsidiaries that could reasonably be anticipated to cause such Real Property to be subject to any restrictions on the ownership, occupancy, use or transferability by WLI or its Subsidiary, as the case may be, of its interest in such Real Property under any Environmental Law; and (iv) the taking of any removal or remedial action in response to the actual or alleged presence of any Hazardous Material on any Real Property owned or operated by WLI or any of its Subsidiaries. All such notices shall describe in reasonable detail the nature of the claim, investigation, condition, occurrence or removal or remedial action and the respective Borrower's response or proposed response thereto. In addition, WLI agrees to provide the Lenders with copies of all material communications by WLI or any of its Subsidiaries with any Person, government or governmental agency relating to any of the matters set forth in clauses (i)-(iv) above, and such detailed reports relating to any of the matters set forth in clauses (i)-(iv) above (subject to clauses (x) and (y) above) as may reasonably be requested by the Administrative Agent or the Required Lenders. (g) OTHER INFORMATION. Promptly upon transmission thereof, (i) copies of any filings and registrations with, and reports to, the U.S. Securities and Exchange Commission (the "SEC") by WLI or any of its Subsidiaries, (ii) copies of all financial statements, proxy statements, notices and reports as WLI or any of its Subsidiaries shall send generally to analysts and the holders of their capital stock in their capacity as such holders (to the extent not theretofore delivered to the Lenders pursuant to this Agreement) and with reasonable promptness, such other information or documents (financial or otherwise) as either Agent on its own behalf or on behalf of the Required Lenders may reasonably request from time to time. -43- 50 7.02 BOOKS, RECORDS AND INSPECTIONS. WLI will, and will cause its Subsidiaries to, permit, upon reasonable notice to, and coordination with, the chief financial officer, controller or any other Authorized Officer of WLI, officers and designated representatives of the Agents or the Required Lenders to visit and inspect any of the properties or assets of WLI and any of its Subsidiaries in whomsoever's possession, and to examine the books of account of WLI and any of its Subsidiaries and discuss the affairs, finances and accounts of WLI and of any of its Subsidiaries with, and be advised as to the same by, its and their officers and independent accountants, all at such reasonable times and intervals and to such reasonable extent as the Agents or the Required Lenders may desire, PROVIDED that no such visits, meetings or discussions with the independent accountants will be held without WLI and/or its Subsidiaries being given any opportunity to participate therein through their senior officers. 7.03 INSURANCE. WLI will at all times maintain in full force and effect insurance in respect of itself and its Subsidiaries in such amounts, covering such risks and liabilities and with such deductibles or self-insured retentions as are in accordance with normal industry practice. 7.04 PAYMENT OF TAXES. WLI will pay and discharge, and will cause each of its Material Subsidiaries to pay and discharge, all material taxes, assessments and governmental charges or levies imposed upon it or upon its income or profits, or upon any properties belonging to it, prior to the date on which material penalties attach thereto, and all material lawful claims for sums that have become due and payable which, if unpaid, might become a Lien or charge upon any properties of WLI or any of its Material Subsidiaries, PROVIDED that neither WLI nor any Material Subsidiary shall be required to pay any such material tax, assessment, charge, levy or claim which is being contested in good faith and by proper proceedings if it has maintained adequate reserves (in the good faith judgment of the management of WLI) with respect thereto in conformity with GAAP. 7.05 CORPORATE FRANCHISES. Except as may be waived by the Agents, WLI will do, and will cause each Material Subsidiary to do, or cause to be done, all things necessary to preserve and keep in full force and effect its existence, material rights, franchises and authority, PROVIDED that (x) any transaction permitted by Section 8.02 will not constitute a breach of this Section 7.05 and (y) any Material Subsidiary may withdraw from doing business in any jurisdiction not the situs of its principal operations to the extent any such withdrawal, individually or in the aggregate, is not reasonably likely to have a Material Adverse Effect. 7.06 COMPLIANCE WITH STATUTES, ETC. WLI will, and will cause each Subsidiary to, comply with all applicable statutes, regulations and orders of, and all applicable restrictions imposed by, all governmental bodies, domestic or foreign, in respect of the con duct of its business and the ownership of its property (including in all events Environmental Laws) other than those the non-compliance with which would not have a Material Adverse Effect or would not -44- 51 have a material adverse effect on the ability of the Designated Parties as a whole to perform their obligations under any Credit Document. 7.07 ERISA. As soon as possible and, in any event, within fifteen (15) days after WLI, any Subsidiary or any ERISA Affiliate knows or has reason to know of the occurrence of any of the following, WLI will deliver to each of the Lenders a certificate of the chief financial officer of WLI setting forth the full details as to such occurrence and the action, if any, that WLI, such Subsidiary or such ERISA Affiliate is required or proposes to take, together with any notices required or proposed to be given to or filed with or by WLI, the Subsidiary, the ERISA Affiliate, the PBGC, a Plan or Multiemployer Plan participant or the Plan administrator with respect thereto: that a Reportable Event has occurred (except to the extent that WLI has previously delivered to the Lenders a certificate and notices (if any) concerning such event pursuant to the next clause hereof); that a contributing sponsor (as defined in Section 4001(a)(13) of ERISA) of a Plan subject to Title IV of ERISA is subject to the advance reporting requirements of PBGC Regulation Section 4043.61 (without regard to subparagraph (b) (1) thereof), and an event described in subsection .62, .63, .64, .65, .66, .67 or .68 of PBGC Regulation Section 4043 is reasonably expected to occur with respect to such Plan within the following 30 days; that an accumulated funding deficiency, within the meaning of Section 412 of the Code or Section 302 of ERISA, has been incurred or an application may be or has been made for a waiver or modification of the minimum funding standard (including any required installment payments) or an extension of any amortization period under Section 412 of the Code or Section 303 or 304 of ERISA with respect to a Plan or Multiemployer Plan; that any contribution required to be made with respect to a Plan or a Multiemployer Plan has not been timely made; that a Plan or Multiemployer Plan has been or may be terminated, reorganized, partitioned or declared insolvent under Title IV of ERISA; that a Plan has an Unfunded Current Liability which, when added to aggregate amount of Unfunded Current Liabilities with respect to all other Plans could reasonably be expected to have a Material Adverse Effect; that proceedings may be or have been instituted to terminate or appoint a trustee to administer a Plan which is subject to Title IV of ERISA; that a proceeding has been instituted against WLI, any Subsidiary or any ERISA Affiliate pursuant to Section 515 of ERISA to collect a delinquent contribution to a Plan or Multiemployer Plan; that WLI, any Subsidiary or any ERISA Affiliate will or may incur any material liability (including any indirect, contingent, or secondary liability) to or on account of the termination of or withdrawal from a Plan or Multiemployer Plan under Section 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or with respect to a Plan or Multiemployer Plans under Section 401(a)(29), 4971, 4975 or 4980 of the Code or Section 409 or 502(i) or 502(l) of ERISA or with respect to a group health plan (as defined in Section 607(1) of ERISA or Section 4980B(g)(2) of the Code) under Section 4980B of the Code; or that WLI or any Subsidiary may incur any material liability pursuant to any employee welfare benefit plan (as defined in Section 3(1) of ERISA) that provides benefits to retired employees or other former employees (other than as required by Section 601 of ERISA) or any Plan or Multiemployer Plans or any Foreign Pension Plan. WLI will deliver to each of the Lenders (i) a complete copy of the annual report (on Internal -45- 52 Revenue Service Form 5500-series) of each Plan (including, to the extent required, the related financial and actuarial statements and opinions and other supporting statements, certifications, schedules and information) required to be filed with the Internal Revenue Service and (ii) copies of any records, documents or other information that must be furnished to the PBGC with respect to any Plan pursuant to Section 4010 of ERISA. In addition to any certificates or notices delivered to the Lenders pursuant to the first sentence hereof, copies of annual reports and any records, documents or other information required to be furnished to the PBGC, and any material notices received by WLI, any Subsidiary or any ERISA Affiliate from any government agency with respect to any Plan or Multiemployer Plans or any Foreign Pension Plan shall be delivered to the Lenders no later than fifteen (15) days after the date such annual report has been filed with the Internal Revenue Service or such records, documents and/or information has been furnished to the PBGC or such notice has been received by WLI, such Subsidiary or such ERISA Affiliate, as applicable. 7.08 GOOD WORKING ORDER. WLI will, and will cause each of its Material Subsidiaries to, ensure that its material properties and equipment required in the conduct of its business in whomsoever's possession they may be, are kept in good working order and condition, normal wear and tear excepted. 7.09 END OF FISCAL YEARS; FISCAL QUARTERS. WLI will, for financial reporting purposes, cause (i) each of its, and each of its Subsidiaries' (except as disclosed to the Agents on or prior to the Closing Date and with such other exceptions as are acceptable to the Administrative Agent) fiscal years to end on June 30 of each year (provided that upon prior written notice from WLI to the Administrative Agent such fiscal year end may be changed to December 31) and (ii) each of its, and each of its Subsidiaries' (except as disclosed to the Agents on or prior to the Closing Date and with such other exceptions as are acceptable to the Administrative Agent) fiscal quarters to end on March 31, June 30, September 30 and December 31 of each year. 7.10 ADDITIONAL SECURITY; FURTHER ASSURANCES. (a) WLI will, and will cause its Material Subsidiaries to, at the expense of such Person make, execute, endorse, acknowledge, file and/or deliver to the Collateral Agent from time to time such vouchers, invoices, schedules, confirmatory assignments, conveyances, financing statements, transfer endorsements, powers of attorney, certificates, reports and other assurances or instruments and take such further steps relating to the collateral covered by any of the Security Documents as the Collateral Agent may reasonably require. Furthermore, WLI shall cause to be delivered to the Collateral Agent such opinions of counsel and other related documents as may be reasonably requested by the Administrative Agent to assure itself that this Section 7.10 has been complied with. (b) Each action required above by this Section 7.10 shall be completed as soon as possible, but in no event later than 90 days after such action is requested in writing to be -46- 53 taken by the Administrative Agent or the Collateral Agent, PROVIDED that in no event shall any Borrower be required to take any action, other than using its reasonable commercial efforts without any material expenditure, to obtain consents from third parties with respect to its compliance with this Section 7.10. 7.11 COMPLIANCE WITH ENVIRONMENTAL LAWS. (i) WLI will comply, and will cause each of its Subsidiaries to comply, with all Environmental Laws applicable to the ownership, lease or use of all real property now or hereafter owned, leased or operated by WLI or any of its Subsidiaries, will promptly pay or cause to be paid all costs and expenses incurred in connection with such compliance, and will keep or cause to be kept all such real property free and clear of any Liens imposed pursuant to such Environmental Laws and (ii) neither WLI nor any of its Subsidiaries will generate, use, treat, store, release or dispose of, or permit the generation, use, treatment, storage, release or disposal of Hazardous Materials on any real property now or hereafter owned, leased or operated by WLI or any of its Subsidiaries, or transport or permit the transportation of Hazardous Materials to or from any such real property, except in accordance with, in all material respects, applicable Environmental Laws or otherwise to the extent that the failure to comply with the requirements specified in clause (i) or (ii) above, either individually or in the aggregate, has not had and is not reasonably likely to have a Material Adverse Effect. 7.12 MATERIAL SUBSIDIARIES. (a) WLI will cause (i) each Material Subsidiary acquired or first established after the Closing Date and (ii) each existing Subsidiary that first becomes a Material Subsidiary after the Closing Date pursuant to clauses (iv) and (v) of the definitions of Material Subsidiary (the "Relevant Clauses") to execute a Guaranty (except in the case of a Foreign Subsidiary to the extent it is not permitted to execute a Guaranty under local law), an EU Intercompany Note (if a Subsidiary of EU Holdco), and/or a WLI Intercompany Note (if an Other Foreign Subsidiary) and all related U.S. Security Documents or (unless and to the extent waived by the Agents) all related Foreign Security Documents, and to execute and deliver, or cause to be delivered, all other certificates and opinions in each case as would have had to have been delivered on the Closing Date (if a Domestic Subsidiary) or the Full Utilization Date (if a Foreign Subsidiary) if such new Material Subsidiary were in existence at such date, with all of the foregoing to be effected (I) if such new Material Subsidiary is a Domestic Subsidiary, within 15 Business Days after the acquisition or creation thereof, or of the date it became a Material Subsidiary pursuant to the Relevant Clauses and (II) if such new Material Subsidiary is a Foreign Subsidiary, within 45 days after the acquisition or creation thereof, or of the date it became a Material Subsidiary pursuant to the Relevant Clauses. (b) WLI will make a Material Subsidiary Determination within 90 days after the end of each calendar year (commencing with the calendar year ended December 31, 1998) and promptly convey in writing the results of such determination to the Administrative Agent. -47- 54 (c) WLI will cause the aggregate revenues of WLI and all Material Subsidiaries for each fiscal year of WLI to account for at least 85% of the aggregate revenues of WLI and all of its Subsidiaries for such fiscal year. SECTION 8. NEGATIVE COVENANTS. WLI hereby covenants and agrees that on the Closing Date and thereafter until the Commitments have terminated, no Letters of Credit or Notes are outstanding and the Loans and Unpaid Drawings, together with interest, Fees and all other Obligations (other than any indemnities described in Section 12.13 which are not then owing) incurred hereunder, are paid in full: 8.01 CHANGES IN BUSINESS. WLI will not, and will not permit any of its Subsidiaries to, materially alter the character of the business of WLI and its Subsidiaries from the business conducted and presently proposed to be conducted by WLI and its Subsidiaries on the Closing Date (giving effect to the Acquisition). 8.02 CONSOLIDATION, MERGER, SALE OR PURCHASE OF ASSETS, ETC. WLI will not, and will not permit any Subsidiary to, wind up, liquidate or dissolve its affairs, or enter into any transaction of merger or consolidation, or sell or otherwise dispose of all or any part of its property or assets or purchase, lease or otherwise acquire all or any part of the property or assets of any Person (other than purchases or other acquisitions of inventory, leases, materials and equipment in the ordinary course of business) or agree to do any of the foregoing at any future time (without a contingency relating to obtaining any required approval hereunder or the prior or contemporaneous satisfaction of the Obligations), except that the following shall be permitted: (a) (I) any Domestic Credit Party may be merged or consolidated with or into, or be liquidated into, or transfer all or any part of its business, properties and assets to another Domestic Credit Party that is a Material Subsidiary (provided that in any such transaction involving (x) WLI, WLI shall be the surviving party or (y) a Material Subsidiary (where WLI is not a party), a Material Subsidiary shall be the surviving party), (II) any Foreign Subsidiary that is a Guarantor may be merged or consolidated with or into, or be liquidated into, another Foreign Subsidiary that is a Guarantor, (III) any Foreign Subsidiary that is not a Guarantor may be merged or consolidated with or into, or be liquidated into, another Foreign Subsidiary (provided that in any such transaction involving a Guarantor, such Guarantor is the surviving party), (IV) all or any part of the business, properties and assets of a Foreign Subsidiary that is not a Guarantor may be conveyed or otherwise transferred to another Foreign Subsidiary, (V) any Foreign Subsidiary that is not a Material Subsidiary (or, if not a Guarantor, whose liquidation is consented to by the Agents) may be liquidated and (VI) assets of WLI, any Domestic Credit Party and/or any Foreign Subsidiary that is a Guarantor may be conveyed or otherwise transferred to Foreign Subsidiaries that are not -48- 55 Guarantors provided that after giving effect thereto the NFG Investments shall not exceed $30,000,000; (b) capital expenditures to the extent not prohibited by Section 8.05 hereof; (c) the investments, acquisitions and transfers or dispositions of properties permitted pursuant to Section 8.06; (d) WLI and each Subsidiary may lease (as lessee) real or personal property in the ordinary course of business (so long as such lease does not create a Capitalized Lease Obligation not otherwise permitted by Section 8.04(d) or would not violate Section 8.07); (e) licenses or sublicenses by WLI or any Subsidiary of intellectual property in the ordinary course of business; (f) the Acquisition (including all intercompany loans, advances and investments made on the Closing Date to effectuate same); (g) any Borrower or Guarantor may acquire (other than through an unsolicited public offer) assets constituting all or substantially all of a business, business unit, division or product line of any Person not already a Subsidiary of such Person or capital stock of any such Person (including any such acquisition by way of merger or consolidation) to the extent (x) if such acquired Person or the surviving entity of such merger or consolidation will be a Material Subsidiary, such Person or surviving entity becomes a Guarantor (unless not permitted to do so under local law) and executes appropriate Security Documents to secure its Guaranty with its assets (unless waived by the Administrative Agent) and (y) the capital stock of such Person or surviving entity is pledged pursuant to a Pledge Agreement (any such acquisition permitted by this clause (g), a "Permitted Acquisition"), so long as (i) after giving effect to such Permitted Acquisition WLI is in compliance with Section 8.01, (ii) no Default under Section 9.01 or Event of Default then exists, (iii) PRO FORMA compliance is established to the Agents' satisfaction with the covenants contained in Sections 8.10 through 8.13 after giving effect to such Permitted Acquisition as if such Permitted Acquisition were consummated on the first day of the Test Period then last ending, (iv) the Agents have received financial projections for the acquired business or Person, (v) the Required Lenders' consent shall have been obtained if the total cash consideration paid for (I) any such acquisition or related series of acquisitions exceeds $100 million or (II) all Permitted Acquisitions after the Closing Date exceeds $250 million and (vi) after giving effect to such Permitted Acquisition and the Loans, if any, incurred to finance same the Total Unutilized Commitment is at least $150 million; -49- 56 (h) acquisitions (other than through an unsolicited public offer) not otherwise permitted pursuant to the foregoing provisions of this Section 8.02 to the extent that the aggregate amount of cash consideration paid for all such acquisitions does not exceed $50 million (or the equivalent) provided that at the time of each such acquisition PRO FORMA compliance is established to the Agents' satisfaction with the covenants contained in Sections 8.10 through 8.13 after giving effect to such acquisition as if such acquisition were consummated on the first day of the Test Period then last ended; and (i) other sales or dispositions of assets PROVIDED that (w) the provisions of Sections 3.03(c) and/or 4.02(A)(b)(x) are complied with in connection therewith (to the extent applicable), (x) each such sale shall be in an amount at least equal to the fair market value thereof and, in the case of sales for Net Proceeds in excess of $10 million, for proceeds consisting of at least 75% cash, (y) other than in the case of any such sale or disposition listed on Annex V hereto, the Agents shall have consented thereto to the extent the Net Proceeds of any such sale or disposition, or related series of sales or disposition, exceed $100 million (or the equivalent) and (z) the sale or disposition of the capital stock of (i) any Borrower shall be prohibited and (ii) any other Subsidiary shall be prohibited unless it is for all of the outstanding capital stock of such Subsidiary owned by WLI and its other Subsidiaries. 8.03 LIENS. WLI will not, and will not permit any of its Subsidiaries to, create, incur, assume or suffer to exist any Lien upon or with respect to any property or assets of any kind (real or personal, tangible or intangible) of WLI or any such Subsidiary whether now owned or hereafter acquired, or sell any such property or assets subject to an understanding or agreement, contingent or otherwise, to repurchase such property or assets (including sales of accounts receivable or notes with recourse to WLI or any of its Subsidi aries) or assign any right to receive income, or file or permit the filing of any financing statement under the UCC or any other similar notice of Lien under any similar recording or notice statute, except: (a) Liens for taxes, assessments or other governmental charges not yet due or Liens for taxes, assessment or other governmental charges being contested in good faith and by appropriate proceedings for which adequate reserves (in the good faith judgment of the management of the applicable Designated Party) have been established; (b) Liens in respect of property or assets imposed by law which were incurred in the ordinary course of business, such as carriers', materialmen's, warehousemen's and mechanics' Liens, statutory and common law landlord's Liens, and other similar Liens arising in the ordinary course of business, and (x) which do not in the aggregate materially detract from the value of such property or assets or materially impair the use thereof in the operation of the business of any such Subsidiary and (y) which are being -50- 57 contested in good faith by appropriate proceedings, which proceedings have the effect of preventing the forfeiture or sale of the property or asset subject to such Lien; (c) Liens created by or pursuant to this Agreement or the other Credit Documents; (d) Liens to the extent existing on the Closing Date and listed on Annex VII hereto (specifically or generally) without giving effect to any subsequent extensions or renewals thereof not consented to by the Agents; (e) Liens arising from judgments, decrees or attachments in circumstances not constituting an Event of Default under Section 9.09; (f) Liens (i) (other than any Lien imposed by ERISA) incurred or deposits made in the ordinary course of business in connection with workers' compensation, unemployment insurance and other types of social security, or to secure the performance of tenders, statutory obligations, surety and appeal bonds, bids, leases, government contracts, performance and return-of-money bonds and other similar obligations incurred in the ordinary course of business (exclusive of obligations in respect of the payment for borrowed money) and (ii) on assets of Subsidiaries that are not Material Subsidiaries provided that the Indebtedness secured by all Liens permitted by this clause (ii) shall be permitted by Section 8.04(j); (g) leases or subleases granted to others not interfering in any material respect with the business of WLI or any Subsidiary; (h) easements, rights-of-way, restrictions, minor defects or irregularities in title, encroachments and other similar charges or encumbrances and minor title deficiencies, in each case not interfering in any material respect with the ordinary conduct of the business of WLI or any of its Subsidiaries; (i) Liens arising from precautionary UCC financing statements regarding operating leases, consignments and similar arrangements entered into in the ordinary course of business and not otherwise prohibited by this Agreement; (j) purchase money Liens securing payables arising from the purchase of any equipment or goods in the normal course of business provided that such payables shall not constitute Indebtedness; (k) any interest or title of a lessor under any lease permitted by this Agreement; -51- 58 (l) Liens arising pursuant to purchase money mortgages or security interests securing Indebtedness representing the purchase price of assets acquired after the Closing Date (which purchase price shall not exceed the fair market value of the purchased assets), provided that any such Liens attach only to the assets so acquired and are created contemporaneously with, or within 90 days following, such acquisition, and the Indebtedness secured by Liens created pursuant to this clause (l) so permitted pursuant to Section 8.04(c); (m) Liens created pursuant to Capital Leases permitted pursuant to Section 8.04(c) or pursuant to Customer Associated Leases; and (n) Liens on property or assets acquired pursuant to a Permitted Acquisition or other acquisition permitted by Section 8.02(h) or on property or assets of a Person in existence at the time such Person is acquired pursuant to a Permitted Acquisition or any such other acquisition, in each case securing Permitted Acquired Debt, PROVIDED that such Liens existed prior to, and were not incurred in contemplation of, such Permitted Acquisition or any such other acquisition, and do not attach to any other asset of WLI or any of its Subsidiaries. 8.04 INDEBTEDNESS. WLI will not, and will not permit any of its Subsidiaries to, contract, create, incur, assume or suffer to exist any Indebtedness, except: (a) Indebtedness incurred pursuant to this Agreement and the Credit Documents; (b) Indebtedness owing by (i) any Domestic Credit Party to another Domestic Credit Party (in each case to the extent a Material Subsidiary); (ii) a Foreign Subsidiary (other than, on and after the Full Utilization Date, Italian Borrower) to EU Holdco (or if an Other Foreign Subsidiary, to WLI) to the extent (x) evidenced on and after the Full Utilization Date by an EU Intercompany Note (or WLI Intercompany Note if owed to WLI) and (y) in the case of each such Foreign Subsidiary, within the limits, if any, for intercompany Indebtedness owing by such Foreign Subsidiary as set forth on Annex X, Part I; and (iii) a Foreign Subsidiary that is not a Guarantor to another Foreign Subsidiary that is not a Guarantor; (c) Capitalized Lease Obligations of WLI and its Subsidiaries and Indebtedness incurred pursuant to purchase money mortgages or security interests permitted by Section 8.03(l) to the extent that the sum thereof does not exceed $30 million (or the equivalent) at any time outstanding; (d) Existing Indebtedness, without giving effect to any subsequent extension, renewal or refinancing thereof not consented to by the Agents; -52- 59 (e) Contingent Obligations constituting (x) the guaranty by a Guarantor of the obligations (not otherwise in violation of this Agreement) of other Guarantors and (y) the guaranty by a Subsidiary that is not a Guarantor of the obligations (not otherwise in violation of this Agreement) of other Subsidiaries; (f) Indebtedness under Interest Rate Agreements to the extent satisfactory in amount and in substance to the Agents; (g) Permitted Subordinated Debt; (h) Permitted Training Advances; (i) Permitted Acquired Debt in an amount not to exceed $50,000,000 provided that (x) all the terms and conditions of such Permitted Acquired Debt are satisfactory to the Agents and (y) the principal amount of any Permitted Acquired Debt incurred pursuant to this clause (i) shall reduce the amount of cash consideration that may otherwise be paid under Section 8.02(g) or (h) as appropriate to the acquisition in connection with which such Permitted Acquired Debt was incurred; and (j) Indebtedness not otherwise permitted by the foregoing provisions of this Section 8.04 in an aggregate outstanding principal amount not to exceed $50 million (or the equivalent). 8.05 CAPITAL EXPENDITURES. (a) WLI will not, and will not permit any of its Subsidiaries to, incur Consolidated Capital Expenditures, provided that WLI and its Subsidiaries may make Consolidated Capital Expenditures in any fiscal year in an aggregate amount of up to the Permitted CAPEX Amount for such fiscal year. (b) In the event that the Consolidated Capital Expenditures equal to the Permitted CAPEX Amount for a fiscal year (without giving effect to this clause (b)) are not expended during such fiscal year, the maximum amount of Consolidated Capital Expenditures which may be expended during the immediately succeeding fiscal year pursuant to Section 8.05(a) shall be increased by such unutilized amount. 8.06 ADVANCES, INVESTMENTS AND LOANS. WLI will not, and will not permit any of its Subsidiaries to, lend money or credit or make advances to any Person, or purchase or acquire any stock, obligations or securities of, or any other interest in, or make any capital contribution to any Person, except: (a) WLI and any of its Subsidiaries may invest in cash and Cash Equivalents; -53- 60 (b) WLI and any Subsidiary may acquire and hold receivables owing to them, if created or acquired in the ordinary course of business and payable or dischargeable in accordance with customary trade terms; (c) the intercompany Indebtedness described in Section 8.04 (b) shall be permitted; (d) loans and advances to officers, directors and employees (x) in the ordinary course of business for business, travel, entertainment and relocation purposes and/or representing the deferred purchase price of the capital stock of WLI purchased by such persons from WLI and (y) otherwise in an aggregate principal amount not to exceed $5 million (or the equivalent) at any time outstanding shall be permitted; (e) WLI or any Subsidiary may acquire and own investments (including debt obligations) received (x) in connection with the bankruptcy or reorganization of suppliers and customers and (y) in settlement of delinquent obligations of, and other disputes with, customers and suppliers arising in the ordinary course of business; (f) (i) any Domestic Credit Party may make investments in any Domestic Credit Party that is a Material Subsidiary, (ii) WLI and/or EU Holdco may make investments (other than intercompany Indebtedness) in Foreign Subsidiaries that are Material Subsidiaries within the limitations, if any, specified in Annex X, Part I, (iii) WLI, any Domestic Credit Party and/or any Foreign Subsidiary that is a Guarantor may make investments in Foreign Subsidiaries that are not Guarantors provided that after giving effect thereto the NFG Investments shall not exceed $30,000,000 and (iv) any Foreign Subsidiary that is not a Guarantor may make investments in a Foreign Subsidiary that is a Guarantor; (g) investments outstanding on the Closing Date and listed on Annex VIII, without giving effect to any extension or renewal thereof; (h) promissory notes and other securities received as proceeds of asset dispositions permitted by Section 8.02(i); (i) Permitted Acquisitions and/or acquisitions permitted by Section 8.02(h); (j) issuances of WLI common stock pursuant to the Convertible Instruments; (k) investments to the extent made with WLI common stock; (l) at any time prior to the Full Utilization Date, investments in the Italian Borrower not exceeding in aggregate amount $20 million (or the equivalent); and -54- 61 (m) other investments not permitted by the foregoing provisions of this Section 8.06 not exceeding in aggregate amount $30 million (or the equivalent). 8.07 PREPAYMENTS OF INDEBTEDNESS, ETC. WLI will not, and will not permit any of its Subsidiaries to: (a) make (or give any notice in respect thereof) any voluntary or optional payment or prepayment or redemption or acquisition for value of (including, without limitation, by way of depositing with the trustee with respect thereto money or securities before due for the purpose of paying when due) or exchange of any Permitted Subordinated Debt (once issued); (b) amend or modify, or permit the amendment or modification in any manner adverse to the Lenders of, any provisions of any Permitted Subordinated Debt (once issued); and/or (c) amend, modify or change in any manner adverse to the interests of the Lenders the certificate of incorporation (including the certificate of description for the WLI Preferred and, without limitation, in each case, by the filing of any certificate of designation), by-laws or equivalent organizational documents of any Designated Party or any of the Acquisition Documents. 8.08 DIVIDENDS, ETC. (a) WLI will not, and will not permit any of its Subsidiaries to, make any cash payments on or in respect of the SARs ("SAR Cash Payments"), make Excess Deferred Payments and/or declare or pay any dividends (other than dividends payable solely in capital stock of such Person) or return any capital to, its stockholders or authorize or make any other distribution, payment or delivery of property or cash to its stockholders as such, or redeem, retire, purchase or otherwise acquire, directly or indirectly, for a consideration, any shares of any class of its capital stock now or hereafter outstanding (or any warrants for or options or stock appreciation rights in respect of any of such shares), or set aside any funds for any of the foregoing purposes, or permit any of its Subsidiaries to purchase or otherwise acquire for consideration any shares of any class of the capital stock of WLI or any other Subsidiary, as the case may be, now or hereafter outstanding (or any options or warrants or stock appreciation rights issued by such Person with respect to its capital stock) (all of the foregoing "Dividends"), except that: (i) any Subsidiary that is not a Material Subsidiary and Japan Subsidiary may pay dividends to its shareholders, provided that the amounts paid to any shareholder that is WLI or a Subsidiary of WLI shall not be less than such shareholder's PRO RATA share of the dividends being paid based on ownership interests in such Subsidiary; -55- 62 (ii) any Subsidiary that is a Material Subsidiary may pay dividends to any Guarantor; (iii) issuances of WLI common stock pursuant to the Convertible Instruments; (iv) provided that no Default under Section 9.01 or Event of Default is then in existence or would arise therefrom (determined for the purposes of Sections 8.10 through 8.14 on a PRO FORMA basis as if the Dividends and Repurchases referred to below were effected on the last day of the Test Period last ended) WLI may (A) pay dividends in cash on the WLI Preferred when due and payable in accordance with its terms, (B) make Excess Deferred Payments, (C) make SAR Cash Payments and/or (D) purchase, redeem, retire or otherwise acquire ("Repurchases") capital stock of WLI now or hereafter outstanding (or any warrants for or stock appreciation rights (other than SARs) in respect of any such shares), provided that (w) WLI may not expend more than $50 million during the first two years following the Closing Date or $150 million in the aggregate after the Closing Date to make Repurchases and Excess Deferred Payments, (x) after giving effect to any Repurchase or Excess Deferred Payment, the Total Unutilized Commitment shall equal at least $150 million, (y) no more than $10 million may be expended in connection with Repurchases of WLI stock held by officers and directors and (z) after giving effect to any SAR Cash Payment, the Total Unutilized Commitment shall equal at least $100 million. (b) WLI will not, and will not permit any of its Material Subsidiaries to, create or otherwise cause or suffer to exist any encumbrance or restriction which prohibits or otherwise restricts (A) the ability of any Subsidiary to (a) pay dividends or make other distributions or pay any Indebtedness owed to any Designated Party, (b) make loans or advances to any Designated Party or (c) transfer any of its properties or assets to any Designated Party or (B) the ability of any Designated Party to create, incur, assume or suffer to exist any Lien upon its property or assets to secure the Obligations, other than prohibitions or restrictions existing under or by reason of (i) this Agreement and the other Credit Documents; (ii) applicable law; (iii) customary provisions restricting subletting or assignments of leases and/or non-assignment provisions entered into in the ordinary course of business and consistent with past practices; (iv) any restriction or encumbrance with respect to a Subsidiary imposed pursuant to an agreement which has been entered into for the sale or disposition of all or substantially all of the capital stock or assets of such Subsidiary, so long as such sale or disposition is permitted under this Agreement; and (v) Liens permitted under Section 8.03 and any documents or instruments governing the terms of any Indebtedness or other obligations secured by any such Liens, provided that such prohibitions or restrictions apply only to the assets subject to such Liens. -56- 63 8.09 TRANSACTIONS WITH AFFILIATES. WLI will not, and will not permit any Subsidiary to, enter into any transaction or series of transactions after the Closing Date whether or not in the ordinary course of business, with any Affiliate other than on terms and conditions substantially as favorable to WLI or such Subsidiary as would be obtainable by WLI or such Subsidiary at the time in a comparable arm's-length transaction with a Person other than an Affiliate, except that: (i) each such Person may pay reasonable fees and compensation to and indemnity provided on behalf of, their respective officers, directors and employees as determined in good faith by such Person's Board of Directors or senior management to the extent not otherwise prohibited by the terms of this Agreement; (ii) transactions among WLI and its Wholly-Owned Subsidiaries; and (iii) the transaction listed on Annex IX. 8.10 CURRENT RATIO. WLI will not permit the ratio of (i) Consolidated Current Assets to (ii) Consolidated Current Liabilities as at the end of any fiscal quarter to be less than 1.00 to 1.0. 8.11 LEVERAGE RATIO. WLI will not permit the Leverage Ratio as at the end of any fiscal quarter set forth below to exceed the ratio set forth opposite such fiscal quarter: Fiscal Quarter Ending Ratio --------------------- ----- June 30, 1998 through December 31, 1999 2.75 to 1.0 March 31, 2000 and June 30, 2000 2.70 to 1.0 September 30, 2000 2.60 to 1.0 Thereafter 2.50 to 1.0 8.12 MINIMUM CONSOLIDATED EBITDA. WLI will not permit Consolidated EBITDA for any Test Period ending on the last day of any fiscal quarter set forth below to be less than the amount set forth opposite such fiscal quarter: Fiscal Quarter Ending Amount --------------------- ------ June 30, 1998 $125.0 million September 30, 1998 150.0 million December 31, 1998 175.0 million March 31, 1999 200.0 million June 30, 1999 200.0 million September 30, 1999 210.0 million December 31, 1999 210.0 million March 31, 2000 220.0 million June 30, 2000 230.0 million -57- 64 September 30, 2000 240.0 million Thereafter 250.0 million 8.13 MINIMUM INTEREST COVERAGE. WLI will not permit the ratio of (x) Consolidated EBITA to (y) Consolidated Adjusted Interest Expense for any Test Period ending on the last day of any fiscal quarter set forth below to be less than the ratio set forth opposite such fiscal quarter: Fiscal Quarter Ending Ratio --------------------- ----- December 31, 1998 and March 31, 1999 3.5 to 1.0 June 30, 1999 and September 30, 1999 4.0 to 1.0 December 31, 1999 and March 31, 2000 4.5 to 1.0 June 30, 2000 to March 31, 2001 5.0 to 1.0 Thereafter 6.0 to 1.0 8.14 MINIMUM CONSOLIDATED NET WORTH. WLI will not permit Consolidated Net Worth at any time to be less than the Minimum Net Worth Amount. 8.15 LIMITATION ON ISSUANCE OF STOCK. WLI will not permit any Subsidiary, directly or indirectly, to issue any shares of its capital stock or other equity securities (or warrants, rights or options to acquire shares or other equity securities), except, to the extent permitted by Section 8.06, to any Designated Party or to qualify directors if required by applicable law. 8.16 CREATION OF SUBSIDIARIES. WLI will not permit (i) any Material Subsidiary to be created or acquired after the Closing Date unless such Person is a Wholly- Owned Subsidiary and (ii) any Subsidiary that is not a Material Subsidiary to have gross revenues in any fiscal year of WLI of $50 million (or the equivalent) or more unless such Subsidiary becomes a Wholly-Owned Subsidiary by the date of the relevant Material Subsidiary Determination. SECTION 9. EVENTS OF DEFAULT. Upon the occurrence of any of the following specified events (each, an "Event of Default"): 9.01 PAYMENTS. Any Borrower shall (i) default in the payment when due of any principal of the Loans or (ii) default, and such default shall continue for three or more Business Days, in the payment when due of any Unpaid Drawing, any interest on the Loans or any Fees or any other amounts owing hereunder or under any other Credit Document; or -58- 65 9.02 REPRESENTATIONS, ETC. Any representation, warranty or statement made by any Designated Party herein or in any other Credit Document or in any statement or certificate delivered or required to be delivered pursuant hereto or thereto shall prove to be untrue in any material respect on the date as of which made or deemed made; or 9.03 COVENANTS. Any Designated Party shall (a) default in the due performance or observance by it of any term, covenant or agreement contained in Section 7.10, 7.12 or 8, or (b) default in the due performance or observance by it of any term, covenant or agreement (other than those referred to in Section 9.01, 9.02 or clause (a) of this Section 9.03) contained in this Agreement and such default shall continue unremedied for a period of at least 30 days after written notice to the defaulting party by the Administrative Agent or the Required Lenders; or 9.04 DEFAULT UNDER OTHER AGREEMENTS. (a) WLI or any of its Material Subsidiaries shall (i) default in any payment with respect to any Indebtedness (other than the Obligations) beyond any originally applicable period of grace, if any, applicable thereto or (ii) default in the observance or performance of any agreement or condition relating to any such Indebtedness or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event shall occur or condition exist, the effect of which default or other event or condition is to cause, or to permit the holder or holders of such Indebtedness (or a trustee or agent on behalf of such holder or holders) to cause any such Indebtedness to become due prior to its stated maturity; or (b) any such Indebtedness of WLI or any of its Material Subsidiaries shall be declared to be due and payable, or required to be prepaid other than by a regularly scheduled required prepayment, prior to the stated maturity thereof, PROVIDED that it shall not constitute an Event of Default pursuant to this Section 9.04 unless the aggregate amount of all Indebtedness referred to in clauses (a) and (b) above exceeds $5 million (or the equivalent thereof) at any one time; or 9.05 BANKRUPTCY, ETC. WLI or any of its Material Subsidiaries shall commence a voluntary case concerning itself under Title 11 of the United States Code entitled "Bankruptcy", as now or hereafter in effect, or any successor thereto (the "Bankruptcy Code"); or an involuntary case is commenced against WLI or any of its Material Subsidiaries and the petition is not controverted within 10 days, or is not dismissed within 60 days, after commencement of the case; or a custodian (as defined in the Bankruptcy Code) is appointed for, or takes charge of, all or substantially all of the property of WLI or any of its Material Subsidiaries; or WLI or any of its Material Subsidiaries commences any other proceeding under any reorganization, arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or similar law of any jurisdiction whether now or hereafter in effect relating to WLI or any of its Subsidiaries; or there is commenced against WLI or any of its Material Subsidiaries any such proceeding which remains undismissed for a period of 60 days; or WLI or any of its Material Subsidiaries is adjudicated insolvent or bankrupt; or any order of relief or other order approving any such case or proceeding is entered; WLI or any of its Material -59- 66 Subsidiaries suffers any appointment of any custodian or the like for it or any substantial part of its property to continue undischarged or unstayed for a period of 60 days; or WLI or any of its Material Subsidiaries makes a general assignment for the benefit of creditors; or any corporate action is taken by WLI or any of its Material Subsidiaries for the purpose of effecting any of the foregoing (provided that none of the foregoing, as they affect a Material Subsidiary that is a Foreign Subsidiary but not a Guarantor, shall constitute an Event of Default to the extent waived by the Agents); or any event similar to any of the foregoing shall occur under the law of any other jurisdiction relating to WLI or any of its Material Subsidiaries; or 9.06 ERISA. (a) Any Plan shall fail to satisfy the minimum funding standard required for any plan year or part thereof under Section 412 of the Code or Section 302 of ERISA or a waiver of such standard or extension of any amortization period is sought or granted under Section 412 of the Code or Section 303 or 304 of ERISA, a Reportable Event shall have occurred, a contributing sponsor (as defined in Section 4001(a)(13) or ERISA) of a Plan subject to Title IV of ERISA shall be subject to the advance reporting requirements of PBGC Regulation 4043.61 (without regard to subparagraph (b)(1) thereof) and an event described in subsection .62, .63, .64, .65, .66, .67 or .68 of PBGC Regulation Section 4043 shall be reasonably expected to occur with respect to such Plan within the following 30 days, any Plan which is subject to Title IV of ERISA shall have had or is likely to have a trustee appointed to administer such Plan, any Plan which is subject to Title IV of ERISA is, shall have been or is likely to be terminated or to be the subject of termination proceedings under ERISA, any Plan shall have an Unfunded Current Liability, a contribution required to be made by WLI, any Subsidiary or any ERISA Affiliate with respect to a Plan, a Multiemployer Plan or a Foreign Pension Plan has not been timely made, WLI or any Subsidiary of WLI or any ERISA Affiliate has incurred or is likely to incur any liability to or on account of a Plan or Multiemployer Plan under Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section 401(a)(29), 4971 or 4975 of the Code or on account of a group health plan (as defined in Section 607(1) of ERISA or Section 4980B(g)(2) of the Code) under Section 4980B of the Code, or WLI or any Subsidiary of WLI has incurred or is likely to incur liabilities pursuant to one or more employee welfare benefit plans (as defined in Section 3(1) of ERISA) that provide benefits to retired employees or other former employees (other than as required by Section 601 of ERISA) or Plans or Multiemployer Plans or Foreign Pension Plans; (b) there shall result from any such event or events the imposition of a lien, the granting of a security interest, or a liability or a material risk of incurring a liability; and (c) such lien, security interest or liability, individually, and/or in the aggregate, in the reasonable opinion of the Required Lenders, has had, or is reasonably likely to have, a Material Adverse Effect; or 9.07 SECURITY DOCUMENTS. (a) Any Security Document shall cease to be in full force and effect, or shall cease to give the Collateral Agent the material Liens, rights, powers and privileges purported to be created thereby in favor of the Collateral Agent, or (b) any Designated Party shall default in the due performance or observance of any term, covenant or -60- 67 agreement on its part to be performed or observed pursuant to any such Security Document and such default shall continue unremedied for a period of at least 30 days after written notice to the defaulting party by the Collateral Agent; or 9.08 GUARANTIES. The Guaranties or any provision thereof shall cease to be in full force and effect, or any Guarantor or any Person acting by or on behalf of such Guarantor shall deny or disaffirm such Guarantor's obligations under any Guaranty or any Guarantor shall default in the due performance or observance of any term, covenant or agreement on its part to be performed or observed pursuant to any Guaranty; or 9.09 JUDGMENTS. One or more judgments or decrees shall be entered against WLI or any of its Material Subsidiaries involving a liability of $5 million (or the equivalent thereof) or more in the aggregate for all such judgments and decrees for WLI and its Material Subsidiaries (not paid or to the extent not covered by insurance) and any such judgments or decrees shall not have been vacated, discharged or stayed or bonded pending appeal within 60 days from the entry thereof; or 9.10 FULL UTILIZATION DATE. The Full Utilization Date shall not have occurred on or prior to the date 45 days after the Closing Date and the Administrative Agent shall, upon the written request of the Required Lenders, have delivered to WLI written notice that same shall constitute an Event of Default; then, and in any such event, and at any time thereafter, if any Event of Default shall then be continuing, the Administrative Agent shall, upon the written request of the Required Lenders, by written notice to WLI, take any or all of the following actions, without prejudice to the rights of the Administrative Agent or any Lender to enforce its claims against any Guarantor or WLI, except as otherwise specifically provided for in this Agreement (provided that, if an Event of Default specified in Section 9.05 shall occur with respect to WLI, the result which would occur upon the giving of written notice by the Administrative Agent as specified in clauses (i) and (ii) below shall occur automatically without the giving of any such notice): (i) declare the Total Commitment terminated, whereupon the Commitment of each Lender shall forthwith terminate immediately and any Commitment Fees shall forthwith become due and payable without any other notice of any kind; (ii) declare the principal of and any accrued interest in respect of all Loans and all obligations owing hereunder (including Unpaid Drawings) and thereunder to be, whereupon the same shall become, forthwith due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby waived by each Borrower; (iii) enforce, as Collateral Agent (or direct the Collateral Agent to enforce), any or all of the Liens and security interests created pursuant to the Security Documents; (iv) terminate any Letter of Credit which may be terminated in accordance with its terms; and (v) direct each Borrower to pay (and each Borrower hereby agrees upon receipt of such notice, or upon the occurrence of any Event of Default specified in Section 9.05 in respect of such Borrower, it will pay) to the Collateral Agent at the appropriate Payment Office such -61- 68 additional amounts of cash, to be held as security for such Borrower's reimbursement obligations in respect of Letters of Credit then outstanding equal to the aggregate Stated Amount of all Letters of Credit of such Borrower then outstanding. SECTION 10. DEFINITIONS. As used herein, the following terms shall have the meanings herein specified unless the context otherwise requires. Defined terms in this Agreement shall include in the singular number the plural and in the plural the singular: "Acceleration Event" shall have the meaning provided in Section 12.20. "Acquired Businesses" shall mean the information technology solutions and services businesses of Olivetti Solutions S.p.A. and its subsidiaries, Olivetti Corporation of Japan and Olsy do Brasil Ltda. being acquired pursuant to the Acquisition Agreement. "Acquisition" shall mean the acquisition by WLI and its Subsidiaries of the Acquired Businesses in accordance with the Acquisition Documents. "Acquisition Agreement" shall mean the Stock Purchase Agreement dated as of February 28, 1998 among the Sellers, WLI and EU Holdco. "Acquisition Documents" shall mean the Acquisition Agreement and all other material agreements relating to the Acquisition (including the Deferred Payment Agreement and the SARs) as in effect on the Closing Date and as the same may be supplemented, amended or modified from time to time in accordance with the terms hereof and thereof. "Adjusted Certificate of Deposit Rate" shall mean, on any day, the sum (rounded to the nearest 1/100 of 1%) of (1) the rate obtained by dividing (x) the most recent weekly average dealer offering rate for negotiable certificates of deposit with a three-month maturity in the secondary market as published in the most recent Federal Reserve System publication entitled "Select Interest Rates," published weekly on Form H.15 as of the date hereof, or if such publication or a substitute containing the foregoing rate information shall not be published by the Federal Reserve System for any week, the weekly average offering rate determined by the Administrative Agent on the basis of quotations for such certificates received by it from three certificate of deposit dealers in New York of recognized standing or, if such quotations are unavailable, then on the basis of other sources reasonably selected by the Administrative Agent, by (y) a percentage equal to 100% minus the stated maximum rate of all reserve requirements as specified in Regulation D applicable on such day to a three-month certificate of deposit of a member bank of the Federal Reserve System in excess of $100,000 (including, without limitation, any marginal, emergency, supplemental, special or other reserves), plus (2) the then daily net annual assessment rate as estimated by the Administrative Agent for determining the current annual assessment payable by the -62- 69 Administrative Agent to the Federal Deposit Insurance Corporation for insuring three-month certificates of deposit. "Adjusted Total MCF Commitment" shall mean at any time the Total MCF Commitment less the aggregate MCF Commitments of all Defaulting Lenders. "Adjusted Total USF Commitment" shall mean at any time the Total USF Commitment less the aggregate USF Commitments of all Defaulting Lenders. "Administrative Agent" shall mean Bankers Trust Company and shall include any successor to the Administrative Agent appointed pursuant to Section 11.09. "Affiliate" shall mean, with respect to any Person, any other Person directly or indirectly controlling (including but not limited to all directors and officers of such Person), controlled by, or under direct or indirect common control with such Person. A Person shall be deemed to control a corporation if such Person possesses, directly or indirectly, the power (i) to vote 10% or more of the securities having ordinary voting power for the election of directors of such corporation or (ii) to direct or cause the direction of the management and policies of such corporation, whether through the ownership of voting securities, by contract or otherwise. "Agents" shall mean the Administrative Agent, the Syndication Agent and the Documentation Agent. "Agreement" shall mean this Credit Agreement, as the same may be from time to time further modified, amended and/or supplemented. "Alternate Currency" shall mean each Approved Currency other than Dollars. "Alternate Currency Loan" shall mean any Loan denominated in an Alternate Currency. "Applicable CF Percentage" shall mean .50%, provided that at any time the Applicable Margin then in effect for Eurodollar Loans is 0.75%, the Applicable CF Percentage shall instead be .375%. "Applicable Margin" shall mean the applicable percentage set forth below based upon the Level then in effect: -63- 70 Level LIBOR Base Rate ----- ----- --------- Level I 1.50% 0.50% Level II 1.25% 0.25% Level III 1.00% 0.00% Level IV 0.75% 0.00% The Leverage Ratio utilized in connection with any determination of the foregoing Levels and the related Applicable Margins shall be determined for each Relevant Test Period by delivery of an officer's certificate of WLI to the Lenders pursuant to Section 7.01(e), which certificate shall set forth the calculation of the Leverage Ratio. The Level and Applicable Margin so determined shall apply, except as set forth below, from the date on which such officer's certificate is delivered to the Administrative Agent to the earlier of (x) the date on which the next certificate is delivered to the Administrative Agent pursuant to Section 7.01(e) and (y) the 45th day following the end of the fiscal quarter in which such first certificate was delivered to the Administrative Agent (or 90 days if such fiscal quarter was the last fiscal quarter of a fiscal year). Notwithstanding anything to the contrary contained above, the Applicable Margins in effect, (w) until an officer's certificate is delivered under Section 7.01(e) in respect of the fiscal quarter ending September 30, 1998, shall be based on Level I pricing, (x) shall be based upon Level I pricing if no officer's certificate which sets forth the Leverage Ratio for the Relevant Test Period has been delivered to the Lenders pursuant to Section 7.01(e) within the time period specified therein or the financial statements upon which any such calculations are based have not been delivered, until such a certificate and/or financial statements are delivered and (y) shall be based upon Level I pricing at all times when there shall exist a Default under Section 9.01 or an Event of Default. "Approved Currency" shall mean each of Dollars, Deutsche Marks, Euros, Pounds Sterling, French Francs, Italian Lira, Japanese Yen, Spanish Pesetas, Danish Krone, Belgian Francs, Dutch Guilder and any other freely transferable currency requested by WLI and acceptable to the MCF Lenders and the Administrative Agent. "Approved Currency Equivalent" shall mean the Dollar Equivalent, the Deutsche Mark Equivalent, the Euro Equivalent, the Sterling Equivalent, French Franc Equivalent, the Italian Lira Equivalent, Japanese Yen Equivalent, Spanish Pesetas Equivalent, Danish Krone Equivalent or Dutch Guilder Equivalent or the comparable equivalent of any other Alternate Currency, as the case may be. "Asset Sale" shall mean and include (x) the sale, transfer or other disposition by WLI or any Subsidiary of any of their assets (including, without limitation, in the case of any Subsidiary of WLI, any issuance of equity by each Subsidiary) to any Person other than any Designated Party (other than (i) sales, transfers or other dispositions in the ordinary course of business of inventory or worn-out, unuseful, obsolete or excess equipment and (ii) other -64- 71 sales that generate in the aggregate less than $1,000,000 (or the equivalent) of proceeds in any calendar year) and (y) the receipt of casualty insurance and/or condemnation proceeds, in each case in excess of $5,000,000 (or the equivalent) and not utilized to repair or replace the asset damaged or condemned. "Assignment Agreement" shall mean the Assignment Agreement in the form of Exhibit L (appropriately completed). "Associated Cost Rate" shall mean, with respect to each Interest Period for Pounds Sterling-denominated MCF Loans, the costs (expressed as a percentage rounded up to the nearest four decimal places and as determined on the first day of such Interest Period and any three month anniversary thereof by the Administrative Agent) of compliance with then existing requirements of the Bank of England in respect of MCF Loans denominated in Pounds Sterling. "Authorized Officer" shall mean any senior officer of any Borrower designated as such in writing to the Administrative Agent by such Borrower. "Bankruptcy Code" shall have the meaning provided in Section 9.05. "Base Rate" shall mean, at any time, the highest of (i) the rate which is 1/2 of 1% in excess of the Federal Funds Effective Rate, (ii) the Prime Lending Rate and (iii) 1/2 of 1% in excess of the Adjusted Certificate of Deposit Rate. "Base Rate Loan" shall mean (x) each USF Loan that is not a Eurodollar Loan and (y) each Swingline Loan. "Belgian Franc Equivalent" shall mean, at any time for the determination thereof, the amount of Belgian Francs which could be purchased with the amount of Dollars involved in such computation at the spot exchange rate therefor as quoted by BTCo as of 11:00 A.M. (London time) on the date two Business Days prior to the date of any determination thereof for purchase on such date. "Belgian Franc LIBOR" shall mean, for each Interest Period applicable to any MCF Loan denominated in Belgian Francs, the rate per annum that appears on page 3750 of the Dow Jones Telerate Screen (or any successor page) for Belgian Franc deposits with maturities comparable to such Interest Period as of 11:00 A.M. (London time) on the date which is two Business Days prior to the commencement of such Interest Period or, if such a rate does not appear on page 3750 of the Dow Jones Telerate Screen (or any successor page), the average of the offered quotations to first-class banks in the London interbank market by each Reference Bank that reports same to the Administrative Agent for Belgian Franc deposits of amounts in same day funds comparable to the outstanding principal amount of such MCF -65- 72 Loan with maturities comparable to such Interest Period determined as of 11:00 A.M. (London time) on the date which is two Business Days prior to the commencement of such Interest Period. "Belgian Francs" shall mean freely transferable lawful money of Belgium. "Borrowers" shall mean and include WLI, EU Holdco and Italian Borrower. "Borrowing" shall mean the incurrence of (i) Lira Loans from the Lira Lender, (ii) USF Loans that are Base Rate Loans on a PRO RATA basis from all of the USF Lenders, (iii) Eurodollar Loans on a PRO RATA basis from all USF Lenders and (iv) MCF Loans of a single Approved Currency by a Borrower on a PRO RATA basis from all of MCF Lenders, in each case on a given date (or resulting from conversions on a given date), having in the case of Eurodollar Loans or MCF Loans the same Interest Period provided that Base Rate Loans incurred pursuant to Section 1.10(b) shall be considered part of any related Borrowing of Eurodollar Loans. "BTCo" shall mean Bankers Trust Company in its individual capacity. "Business Day" shall mean (i) for all purposes other than as covered by clauses (ii) and (iii) below, any day excluding Saturday, Sunday and any day which shall be in the City of New York a legal holiday or a day on which banking institutions are authorized by law or other governmental actions to close, (ii) (except as provided in clause (iii) below) with respect to all notices and determinations in connection with, and payments of principal and interest on, Eurodollar Loans, MCF Loans and/or MCF Letters of Credit (and Unpaid Drawings thereunder), any day which is a Business Day described in clause (i) and which is also a day for trading by and between banks in the London interbank Eurodollar market and, with respect to any notices or determinations in respect of Euros, which is customarily a "Business Day" for such notices or determinations and (iii) with respect to all notices and determinations in connection with, and payments of principal and interest on, any Lira Loan and/or a MCF Letter of Credit issued for the account of the Italian Borrower (and Unpaid Drawings thereunder), any day which is a Business Day described in clause (i) and (ii) above and which shall not be a legal holiday or a day on which banking institutions are authorized or required by law or other government action to close in Milan, Italy. "Capital Lease" as applied to any Person shall mean any lease of any property (whether real, personal or mixed) by that Person as lessee which, in conformity with GAAP, is accounted for as a capital lease on the balance sheet of that Person. "Capitalized Lease Obligations" shall mean all obligations under Capital Leases of the Borrowers or any of their respective Subsidiaries in each case taken at the -66- 73 amount thereof accounted for as liabilities in conformity with GAAP provided that Customer Associated Leases shall not constitute Capitalized Lease Obligations. "Cash Equivalents" shall mean (i) securities (I) issued or directly and fully guaranteed or insured by the United States of America or any agency or instrumentality thereof (provided that the full faith and credit of the United States of America is pledged in support thereof) and (II) issued by such non-U.S. governmental entities as are acceptable to the Agents and WLI, in each case having maturities of not more than one year from the date of acquisition, (ii) time deposits, certificates of deposit and bankers' acceptances denominated in Dollars, and such other Approved Currencies as are acceptable to the Agents and WLI of (x) any Lender or (y) any bank (or the parent company of such bank) whose short-term commercial paper rating from Standard & Poor's Ratings Services, a division of McGraw- Hill, Inc. ("S&P") is at least A-1 or the equivalent thereof or from Moody's Investors Service, Inc. ("Moody's") is at least P-1 or the equivalent thereof (any such bank, an "Approved Bank"), in each case with maturities of not more than one year from the date of acquisition, (iii) repurchase obligations with a term of not more than seven days for underlying securities of the types described in clause (i) above entered into with any bank meeting the qualifications specified in clause (ii) above, (iv) commercial paper issued by any Lender or Approved Bank or by the parent company of any Lender or Approved Bank and commercial paper issued by, or guaranteed by, any industrial or financial company with a short-term commercial paper rating of at least A-1 or the equivalent thereof by S&P or at least P-1 or the equivalent thereof by Moody's (any such company, an "Approved Company"), or guaranteed by any industrial company with a long term unsecured debt rating of at least A or A2, or the equivalent of each thereof, from S&P or Moody's, as the case may be, and in each case maturing within one year after the date of acquisition, (v) investments in money market funds substantially all of whose assets are comprised of securities of the type described in clauses (i) through (iv) above and (vi) overnight and/or demand deposits in the respective local currencies maintained by a Foreign Subsidiary. "Cash Proceeds" shall mean, with respect to any Asset Sale, the aggregate cash payments (including any cash received by way of deferred payment pursuant to a note receivable issued in connection with such Asset Sale, other than the portion of such deferred payment constituting interest, but only as and when so received) received by the WLI and/or any Subsidiary from such Asset Sale. "Change of Control" shall mean an occurrence whereby (i) any person or group (as such terms are used in sections 13(d) and 14(d) of the Exchange Act) becomes the "beneficial owner" (as defined in rule 13d-3 of the Exchange Act), directly or indirectly, of securities of WLI representing 40% or more of the combined voting power of WLI's then outstanding securities; (ii) during any period of two consecutive years, individuals who at the beginning of such period constitute the Board of Directors, and any new director whose election by WLI's Board of Directors or nomination for election by WLI's shareholders was -67- 74 approved by a vote of at least two-thirds of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority thereof, (iii) the shareholders of WLI approve a plan of complete liquidation of WLI or an agreement for the sale or disposition by WLI of all of substantially all of the WLI's assets or (iv) any "Change of Control" or similar term as defined in any other agreement evidencing or governing Indebtedness of WLI or any Subsidiary in an amount of $20 million or more (or the equivalent). "Closing Date" shall mean the date upon which the Acquisition is consummated (or if the Acquired Businesses are to be acquired on more than one date, upon which the Italian Acquired Business is consummated) "Code" shall mean the Internal Revenue Code of 1986, as amended from time to time and the regulations promulgated and the rulings issued thereunder. Section references to the Code are to the Code, as in effect at the Effective Date and any subsequent provisions of the Code, amendatory thereof, supplemental thereto or substituted therefor. "Collateral" shall mean all of the Collateral as defined in, and/or all the properties subject to the Lien created under, each of the Security Documents. "Collateral Agent" shall mean the Administrative Agent acting as collateral agent for the Lenders. "Commitment" shall mean, with respect to each Lender, such Lender's USF Commitment and MCF Commitment. "Commitment Fees" shall mean and include the USF Commitment Fee and the MCF Commitment Fee. "Company" shall mean any corporation, limited liability company, partner ship or other business entity (or the adjectival form thereof, where appropriate). "Consolidated Adjusted Interest Expense" shall mean, for any period, the sum of (i) Consolidated Interest Expense for such period plus (ii) cash dividends payable on the WLI Preferred during such period. "Consolidated Capital Expenditures" shall mean, for any period, the aggregate of all expenditures (whether paid in cash or accrued as liabilities and including in all events all amounts expended or capitalized under Capital Leases but excluding any amount representing capitalized interest or payable under Customer Associated Leases) by WLI and its Subsidiaries during that period that, in conformity with GAAP, are or are required to be -68- 75 included in the property, plant or equipment reflected in the consolidated balance sheet of WLI and its Subsidiaries, including in any event for spare parts, provided that Consolidated Capital Expenditures shall in any event (x) exclude the purchase price paid in cash in connection with any Permitted Acquisition including any portion thereof allocable to property, plant and equipment, (y) only include the amount thereof actually paid in cash during such period and (z) exclude amounts expended with casualty insurance or condemnation proceeds. "Consolidated Current Assets" shall mean, as to any Person at any time, the current assets (other than, to the extent otherwise included therein, cash, Cash Equivalents and receivables relating to Customer Associated Leases) of such Person and its Subsidiaries determined on a consolidated basis in conformity with GAAP. "Consolidated Current Liabilities" shall mean, as to any Person at any time, the current liabilities of such Person and its Subsidiaries determined on a consolidated basis in conformity with GAAP, but excluding, to the extent otherwise included therein, all Loans, all restructuring and integration costs and the short-term portion of Customer Associated Leases. "Consolidated Debt" shall mean, as of any date of determination (I) the aggregate stated balance sheet amount of all Indebtedness (excluding any amounts owing under Customer Associated Leases and Permitted Training Advances) of WLI and its Subsidiaries on a consolidated basis as determined in conformity with GAAP plus any Indebtedness for borrowed money of any other Person as to which WLI and/or any of its Subsidiaries has created a guarantee or other Contingent Obligation, with the then Dollar Equivalent of all such indebtedness denominated other than in Dollars to be used in any determination of Consolidated Debt less (if a positive number) (II) the excess of the aggregate of all cash on such consolidated balance sheet over $100 million. "Consolidated EBIT" shall mean, for any period, (A) the sum of the amounts for such period of (i) Consolidated Net Income, (ii) provisions for taxes based on income, (iii) Consolidated Interest Expense, (iv) amortization or write-off of deferred financing costs to the extent deducted in determining Consolidated Net Income and (v) losses on sales of assets (excluding sales in the ordinary course of business) and other extraordinary losses LESS (B) the amount for such period of gains on sales of assets (excluding sales in the ordinary course of business) and other extraordinary gains, all as determined on a consolidated basis in conformity with GAAP. "Consolidated EBITA" shall mean, for any period, the sum of the amounts for such period of (i) Consolidated EBIT and (ii) amortization expense, all as determined on a consolidated basis in conformity with GAAP. -69- 76 "Consolidated EBITDA" shall mean, for any period, the sum of the amounts for such period of (i) Consolidated EBIT, (ii) depreciation expense and (iii) amortization expense, all as determined on a consolidated basis in conformity with GAAP. "Consolidated Interest Expense" shall mean, for any period, total interest expense (including that attributable to Capital Leases in conformity with GAAP) of WLI and its Subsidiaries on a consolidated basis with respect to all outstanding Indebtedness of WLI and its Subsidiaries, including, without limitation, all commissions, discounts and other fees and charges owed with respect to letters of credit and bankers' acceptance financing and net costs under Interest Rate Agreements and Other Hedging Arrangements, but excluding (x) amortization of deferred financing costs incurred in connection with this Agreement, (y) interest expense on Customer Associated Leases and (z) imputed noncash interest on Permitted Training Advances. "Consolidated Net Income" shall mean for any period, the net income (or loss) of WLI and its Subsidiaries on a consolidated basis for such period taken as a single accounting period determined in conformity with GAAP, PROVIDED that there shall be excluded (i) the income (or loss) of any Person (other than Material Subsidiaries) in which any other Person (other than WLI or any of its Material Subsidiaries) has a joint interest, except to the extent of the amount of dividends or other distributions actually paid to WLI or any of its Material Subsidiaries by such Person during such period, (ii) except for determinations of Consolidated Net Income to be made on a PRO FORMA basis in connection with a Permitted Acquisition pursuant to Section 8.02(g), the income (or loss) of any Person accrued prior to the date it becomes a Subsidiary of WLI or is merged into or consolidated with WLI or any of its Subsidiaries or that Person's assets are acquired by WLI or any of its Subsidiaries, (iii) the income of any Subsidiary to the extent that the declaration or payment of dividends or similar distributions by that Subsidiary of that income is not at the time permitted by operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Subsidiary, (iv) one time costs and expenses relating to the Transaction and (v) all restructuring and integration related costs and expenses resulting from the Transaction. "Consolidated Net Worth" shall mean, at any time for the determination thereof, all amounts which, in conformity with GAAP, would be included under the caption "Total Shareholders' Equity" (or any like caption) on a consolidated balance sheet of WLI and its Subsidiaries as of such date provided that the WLI Preferred shall be included in Consolidated Net Worth whether or not otherwise included pursuant to the foregoing. "Contingent Obligations" shall mean as to any Person any obligation of such Person guaranteeing any Indebtedness, leases, dividends or other obligations ("primary obligations") of any other Person (the "primary obligor") in any manner, whether directly or indirectly, including, without limitation, any obligation of such Person, whether or not contin- -70- 77 gent, (a) to purchase any such primary obligation or any property constituting direct or indirect security therefor, (b) to advance or supply funds (i) for the purchase or payment of any such primary obligation or (ii) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, (c) to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation or (d) otherwise to assure or hold harmless the owner of such primary obligation against loss in respect thereof, provided that the term Contingent Obligation shall not include endorsements of instruments for deposit or collection in the ordinary course of business. The amount of any Contingent Obligation shall be deemed to be an amount equal to the stated or determinable amount of the primary obligation in respect of which such Contingent Obligation is made or, if such primary obligation is not stated or determinable, the maximum reasonably anticipated liability in respect thereof (assuming such Person is required to perform thereunder) as determined by such Person in good faith. "Convertible Instruments" shall mean the Intercompany Convertible Instruments outstanding on the Closing Date and without any amendment or modification thereof, or transfer by any Subsidiary holding same, not consented to by the Agents. "Credit Documents" shall mean this Agreement, the Notes, the Security Documents, the Guaranties, the EU Intercompany Notes and the WLI Intercompany Notes. "Credit Event" shall mean and include the making of a Loan or the issuance of a Letter of Credit. "Customer Associated Leases" shall mean leases entered into by WLI and its Subsidiaries of equipment or other tangible or intangible assets to be made available to customers to the extent that the lease costs thereunder are reimbursed to WLI and its Subsidiaries by such customers (pursuant to a single transaction or series of transactions), with such leases to be treated for all purposes of this Agreement as if they were operating leases. "Danish Krone Equivalent" shall mean, at any time for the determination thereof, the amount of Danish Krone which could be purchased with the amount of Dollars involved in such computation at the spot exchange rate therefor as quoted by BTCo as of 11:00 A.M. (London time) on the date two Business Days prior to the date of any determination thereof for purchase on such date. "Danish Krone LIBOR" shall mean, for each Interest Period applicable to an MCF Loan denominated in Danish Krones, the average of the offered quotations to first-class banks in the London interbank market by each Reference Bank that reports same to the Administrative Agent for Danish Krone deposits of amounts in same day funds comparable to the outstanding principal amount of such MCF Loan with maturities comparable to such -71- 78 Interest Period determined as of 11:00 A.M. (London time) on the date which is two Business Days prior to the commencement of such Interest Period. "Danish Krone" shall mean freely transferable lawful money of Denmark. "Default" shall mean any event, act or condition which with notice or lapse of time, or both, would constitute an Event of Default. "Defaulting Lender" shall mean any Lender with respect to which a Lender Default is in effect. "Deferred Payment Agreement" shall mean the agreement deferring a portion of the purchase price of the Acquisition equal to 1,500,000 shares of WLI until December 25, 1998, at which time, if such shares are not paid to the Sellers, the cash value of such shares must be paid by WLI to the Sellers, as in effect on the Closing Date and as the same may be subsequently amended, modified or supplemented in accordance with the terms thereof and hereof. "Designated Party" shall mean each Guarantor and each other Material Subsidiary. "Deutsche Mark Equivalent" shall mean, at any time for the determination thereof, the amount of Deutsche Marks which could be purchased with the amount of Dollars involved in such computation at the spot exchange rate therefor as quoted by BTCo as of 11:00 A.M. (London time) on the date two Business Days prior to the date of any determination thereof for purchase on such date. "Deutsche Mark LIBOR" shall mean, for each Interest Period applicable to an MCF Loan denominated in Deutsche Marks, the rate per annum that appears on page 3750 of the Dow Jones Telerate Screen (or any successor page) for Deutsche Mark deposits with maturities comparable to such Interest Period as of 11:00 A.M. (London time) on the date which is two Business Days prior to the commencement of such Interest Period or, if such a rate does not appear on page 3750 of the Dow Jones Telerate Screen (or any successor page), the average of the offered quotations to first-class banks in the London interbank market by each Reference Bank that reports same to the Administrative Agent for Deutsche Mark deposits of amounts in same day funds comparable to the outstanding principal amount of such MCF Loan with maturities comparable to such Interest Period determined as of 11:00 A.M. (London time) on the date which is two Business Days prior to the commencement of such Interest Period. "Deutsche Marks" shall mean freely transferable lawful money of Germany. -72- 79 "Dividends" shall have the meaning provided in Section 8.08. "Documentation Agent" shall mean Lehman Commercial Paper Inc. "Dollar Equivalent" shall mean, at any time for the determination thereof, the amount of Dollars which could be purchased with the amount of the relevant Alternate Currency involved in such computation at the spot exchange rate therefor as quoted by the Administrative Agent as of 11:00 A.M. (London time) on the date two Business Days prior to the date of any determination thereof for purchase on such date. "Dollars" and the sign "$" shall each mean freely transferable lawful money of the United States. "Domestic Credit Party" shall mean WLI and each Domestic Subsidiary party to the U.S. Guaranty. "Domestic Subsidiary" shall mean each Subsidiary of WLI that is incorporated or formed under the laws of the United States of America or any state thereof or the District of Columbia. "Dutch Guilder Equivalent" shall mean, at any time for the determination thereof, the amount of Dutch Guilders which could be purchased with the amount of Dollars involved in such computation at the spot exchange rate therefor as quoted by BTCo as of 11:00 A.M. (London time) on the date two Business Days prior to the date of any determination thereof for purchase on such date. "Dutch Guilder LIBOR" shall mean, for each Interest Period applicable to an MCF Loan denominated in Dutch Guilders, the rate per annum that appears on page 3750 of the Dow Jones Telerate Screen (or any successor page) for Dutch Guilder deposits with maturities comparable to such Interest Period as of 11:00 A.M. (London time) on the date which is two Business Days prior to the commencement of such Interest Period or, if such a rate does not appear on page 3750 of the Dow Jones Telerate Screen (or any successor page), the average of the offered quotations to first-class banks in the London interbank market by each Reference Bank that reports same to the Administrative Agent for Dutch Guilder deposits of amounts in same day funds comparable to the outstanding principal amount of such MCF Loan with maturities comparable to such Interest Period determined as of 11:00 A.M. (London time) on the date which is two Business Days prior to the commencement of such Interest Period. "Dutch Guilders" shall mean freely transferable lawful money of the Netherlands. -73- 80 "Effective Date" shall have the meaning provided in Section 12.10. "Eligible Transferee" shall mean and include a commercial bank, financial institution or other institutional "accredited investor" as defined in Regulation D of the Securities Act. "EMU Legislation" shall mean the legislative measures of the European Council for the introduction of, changeover to or operation of a single or unified European currency. "Environmental Claims" means any and all administrative, regulatory or judicial actions, suits, demands, demand letters, claims, liens, notices of noncompliance or violation, investigations (other than internal reports prepared by WLI or any of its Subsidiaries solely in the ordinary course of such Person's business and not in response to any third party action or request of any kind) or proceedings relating in any way to any Environmental Law or any permit issued, or any approval given, under any such Environmental Law (hereafter, "Claims"), including, without limitation, (a) any and all Claims by governmental or regulatory authorities for enforcement, cleanup, removal, response, remedial or other actions or damages pursuant to any applicable Environmental Law, and (b) any and all Claims by any third party seeking damages, contribution, indemnification, cost recovery, compensation or injunctive relief in connection with alleged injury or threat of injury to health, safety or the environment due to the presence of Hazardous Materials. "Environmental Law" means any applicable U.S. Federal, state or local or any foreign statute, law, rule, regulation, ordinance, code and rule of common law now or hereafter in effect and in each case as amended, and any judicial or administrative decision, including any judicial or administrative order, consent decree or judgment, relating to the environment, health, safety or Hazardous Materials. "Equity Issuance" shall mean WLI's issuance of its common equity, and granting of stock appreciation rights (the "SARs") in respect of its common equity, as part of the aggregate purchase price for the Acquisition. "Equity Issuance Documents" shall mean all of the agreements governing, or relating to, the Equity Issuance. "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated and rulings issued there under. Section references to ERISA are to ERISA, as in effect as of the Effective Date and any subsequent provisions of ERISA, amendatory thereof, supplemental thereto or substituted therefor. -74- 81 "ERISA Affiliate" shall mean each person (as defined in Section 3(9) of ERISA) which together with WLI or a Subsidiary would be deemed to be a "single employer" (i) within the meaning of Sections 414(b), (c), (m) and (o) of the Code or (ii) as a result of WLI or a Subsidiary being or having been a general partner of such person. "EU Holdco" shall mean Wang Nederland B.V., a Dutch company. "EU Holdco Security Documents" shall have the meaning provided in Section 5.01(k)(III). "EU Intercompany Notes" shall mean the promissory notes in form and substance satisfactory to the Agents evidencing intercompany advances made by EU Holdco to its various Subsidiaries provided that, in the case of any such note issued by a Material Subsidiary after the Full Utilization Date (x) the Administrative Agent shall have received an opinion in form and substance, and from counsel, satisfactory to the Administrative Agent as to the due authorization, execution and enforceability thereof and (y) such note shall be secured pursuant to appropriate Foreign Security Documents, unless waived by the Agents. "Euro" shall mean the single currency of participating member states of the European Union. "Euro Equivalent" shall mean, at any time for the determination thereof, the amount of Euros which could be purchased with the amount of Dollars involved in such computation at the spot exchange rate therefor as quoted by BTCo as of 11:00 A.M. (London time) on the date two Business Days prior to the date of any determination thereof for purchase on such date. "Euro LIBOR" shall mean, for each Interest Period applicable to an MCF Loan denominated in Euros, the rate per annum that appears on the appropriate page of the Dow Jones Telerate Screen (or any successor page) for Euro deposits with maturities comparable to such Interest Period as of 11:00 A.M. (London time) on the date which is two Business Days prior to the commencement of such Interest Period or, if such a rate does not appear on the Dow Jones Telerate Screen (or any successor page), the average of the offered quotations to first-class banks in the London interbank market by each Reference Bank that reports same to the Administrative Agent for Euro deposits of amounts in same day funds comparable to the outstanding principal amount of such MCF Loan with maturities comparable to such Interest Period determined as of 11:00 A.M. (London time) on the date which is two Business Days prior to the commencement of such Interest Period. "Eurodollar Loan" shall mean each USF Loan that at the election of WLI is bearing interest by reference to US LIBOR. -75- 82 "Event of Default" shall have the meaning provided in Section 9. "Excess Deferred Payment" shall mean the aggregate cash payments made by WLI in excess of $50 million pursuant to the Deferred Payment Agreement. "Exchange Act" shall mean the U.S. Securities Exchange Act of 1934, as amended. "Excluded Asset Sale" shall mean each Asset Sale consummated after the Closing Date other than (i) the proposed asset dispositions listed on Annex V hereto, (ii) Asset Sales in any fiscal year to the extent that the aggregate Net Proceeds resulting therefrom do not exceed $50 million (or the equivalent) (plus the amount, if any, by which the Net Proceeds of all Asset Sales during the previous fiscal year were less than $50 million (or the equivalent)) provided that the Net Proceeds of all Asset Sales provided for in this clause (ii) shall not exceed $150 million in the aggregate and (iii) any Asset Sale, in whole or in part, to the extent that after giving effect thereto the ratio of the Total Commitment to Consolidated EBITDA for the four quarters then last ended (determined on a PRO FORMA basis as if such Asset Sale had been consummated on the first day of such four quarter period) is less than 2.0 to 1.0 (provided that if the application of only a portion of the Net Proceeds of any such Asset Sale to reduce the Total Commitment would result in such ratio being 2.0 to 1.0 or less then the portion of such Asset Sale generating the remaining Net Proceeds shall not constitute an Excluded Asset Sale). "Existing Indebtedness" shall have the meaning provided in Section 6.19. "Existing Letters of Credit" shall mean each letter of credit outstanding on the Closing Date that is (x) issued by BTCo, (y) to remain outstanding after the Closing Date and (z) listed on Annex VI, Part II. "Facility" shall mean any of the credit facilities established under this Agreement, I.E., the US Facility or the MC Facility. "Facing Fee" shall have the meaning provided in Section 3.01(d). "Federal Funds Effective Rate" shall mean for any period, a fluctuating interest rate equal for each day during such period to the weighted average of the rates on overnight Federal Funds transactions with members of the Federal Reserve System arranged by Federal Funds brokers, as published for such day (or, if such day is not a Business Day, for the next preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day which is a Business Day, the average of the quotations for such day on such transactions received by the Administrative Agent from three Federal Funds brokers of recognized standing selected by the Administrative Agent. -76- 83 "Fees" shall mean all amounts payable pursuant to, or referred to in, Section 3.01. "Final Maturity Date" shall mean the fifth anniversary of the Closing Date. "Foreign Borrower" shall mean EU Holdco and the Italian Borrower. "Foreign Guaranties" shall have the meaning provided in Section 5.02(d). "Foreign Security Documents" shall have the meaning provided in Section 5.02(e). "Foreign Subsidiary" shall mean each Subsidiary of WLI that is not a Domestic Subsidiary. "Foreign Pension Plan" shall mean any plan, fund (including, without limitation, any superannuation fund) or other similar program established or maintained outside the United States of America by WLI or any one or more of its Subsidiaries primarily for the benefit of employees of WLI or such Subsidiaries residing outside the United States of America, which plan, fund or other similar program provides, or results in, retirement income, a deferral of income in contemplation of retirement or payments to be made upon termination of employment, and which plan is not subject to ERISA or the Code. "French Franc Equivalent" shall mean, at any time for the determination thereof, the amount of French Francs which could be purchased with the amount of Dollars involved in such computation at the spot exchange rate therefor as quoted by BTCo as of 11:00 A.M. (London time) on the date two Business Days prior to the date of any determination thereof for purchase on such date. "French Franc LIBOR" shall mean, for each Interest Period applicable to an MCF Loan denominated in French Francs, the rate per annum that appears on page 3750 of the Dow Jones Telerate Screen (or any successor page) for French Franc deposits with maturities comparable to such Interest Period as of 11:00 A.M. (London time) on the date which is two Business Days prior to the commencement of such Interest Period or, if such a rate does not appear on page 3750 of the Dow Jones Telerate Screen (or any successor page), the average of the offered quotations to first-class banks in the London interbank market by such Reference Bank that reports same to the Administrative Agent for French Franc deposits of amounts in same day funds comparable to the outstanding principal amount of such MCF Loan with maturities comparable to such Interest Period as of 11:00 A.M. (London time) on the date which is two Business Days prior to the commencement of such Interest Period. "French Francs" shall mean freely transferable lawful money of France. -77- 84 "Full Utilization Date" shall mean the date on which all the conditions specified in Section 5.02 are first satisfied. "GAAP" shall mean generally accepted accounting principles in the United States of America as in effect on the date of this Agreement; it being understood and agreed that determinations in conformity with GAAP for purposes of Section 8, including defined terms as used therein, are subject (to the extent provided therein) to Section 12.07(a). "Guaranteed Creditors" shall mean and include each of the Agents, the Collateral Agent and the Lenders. "Guaranteed Obligations" shall mean the principal and interest on each Note issued by each Foreign Borrower, and Loans made to each Foreign Borrower, under this Agreement and all reimbursement obligations and Unpaid Drawings with respect to Letters of Credit issued for the account of a Foreign Borrower, together with all the other obligations (including obligations which, but for the automatic stay under Section 362(a) of the Bankruptcy Code, would become due) and liabilities (including, without limitation, indemnities, fees and interest thereon) of each Foreign Borrower to any Lender or any Agent and/or the Collateral Agent now existing or hereafter incurred under, arising out of or in connection with this Agreement or any other Credit Document and the due performance and compliance with all the terms, conditions and agreements contained in the Credit Documents by each Foreign Borrower. "Guarantor" shall mean, at any time, each Designated Party that has executed, or is then executing a Guaranty. "Guaranty" shall mean and include the guaranty of WLI set forth in Section 13, the US Guaranty, each Foreign Guaranty and any counterpart of the foregoing guaranties executed and delivered after the Closing Date. "Hazardous Materials" means (a) any petroleum or petroleum products, radio active materials, asbestos in any form that is or could become friable, urea formaldehyde foam insulation, transformers or other equipment that contained, electric fluid containing levels of polychlorinated biphenyls, and radon gas; and (b) any chemicals, materials or sub stances defined as or included in the definition of "hazardous substances," "hazardous waste," "hazardous materials," "extremely hazardous waste," "restricted hazardous waste," "toxic substances," "toxic pollutants," "contaminants" or "pollutants" under any applicable Environmental Law. "Immaterial Subsidiary" shall mean any Domestic Subsidiary that has annual revenues of less than $100,000 and a book value for all its assets of less than $100,000. -78- 85 "Indebtedness" of any Person shall mean, without duplication, (i) all indebted ness of such Person for borrowed money, (ii) the deferred purchase price of assets or services which in conformity with GAAP would be shown on the liability side of the balance sheet of such Person, (iii) the face amount of all letters of credit issued for the account of such Person and, without duplication, all drafts drawn thereunder, (iv) all Indebtedness of a second Person secured by any Lien on any property owned by such first Person, whether or not such indebtedness has been assumed, (v) all Capitalized Lease Obligations of such Person, (vi) all obligations of such Person to pay a specified purchase price for goods or services whether or not delivered or accepted, I.E., take-or-pay and similar obligations, (vii) all net obligations of such Person under Interest Rate Agreements and Other Hedging Arrangements and (viii) all Contingent Obligations of such Person (other than Contingent Obligations arising from the guaranty by such Person of the obligations of WLI and/or its Subsidiaries to the extent such guaranteed obligations do not constitute Indebtedness and are otherwise not prohibited hereunder), provided that Indebtedness shall not include trade payables and accrued expenses, in each case arising in the ordinary course of business and all lease obligations under Customer Associated Leases. "Interest Period" with respect to any Eurodollar Loan or MCF Loan shall mean the interest period applicable thereto, as determined pursuant to Section 1.09. "Interest Rate Agreement" shall mean any interest rate swap agreement, any interest rate cap agreement, any interest rate collar agreement or other similar agreement or arrangement designed to protect any Person against fluctuations in interest rates. "Italian Borrower" shall mean Olivetti Solutions SpA, an Italian company. "Italian Lira Equivalent" shall mean, at any time for the determination thereof, the amount of Italian Liras which could be purchased with the amount of Dollars involved in such computation at the spot exchange rate therefor as quoted by BTCo as of 11:00 A.M. (London time) on the date two Business Days prior to the date of any determination thereof for purchase on such date. "Italian Lira LIBOR" shall mean, for each Interest Period applicable to an MCF Loan denominated in Italian Liras, the rate per annum that appears on page 3750 of the Dow Jones Telerate Screen (or any successor page) for Italian Lira deposits with maturities comparable to such Interest Period as of 11:00 A.M. (London time) on the date which is two Business Days prior to the commencement of such Interest Period or, if such a rate does not appear on page 3750 of the Dow Jones Telerate Screen (or any successor page), the average of the offered quotations to first-class banks in the London interbank market by Reference Banks that report same to the Administrative Agent for Italian Lira deposits of amounts in same day funds comparable to the outstanding principal amount of such MCF Loan with -79- 86 maturities comparable to such Interest Period determined as of 11:00 A.M. (London time) on the date which is two Business Days prior to the commencement of such Interest Period. "Italian Liras" shall mean freely transferable lawful money of Italy. "Japan Subsidiary" shall mean Olivetti Corp. Japan. "Japanese Yen" shall mean freely transferable lawful money of Japan. "Japanese Yen Equivalent" shall mean, at any time for the determination thereof, the amount of Japanese Yen which could be purchased with the amount of Dollars involved in such computation at the spot exchange rate therefor as quoted by BTCo as of 11:00 A.M. (London time) on the date two Business Days prior to the date of any determination thereof for purchase on such date. "Japanese Yen LIBOR" shall mean, for each Interest Period applicable to an MCF Loan denominated in Japanese Yen, the rate per annum that appears on page 3750 of the Dow Jones Telerate Screen (or any successor page) for Japanese Yen deposits with maturities comparable to such Interest Period as of 11:00 A.M. (London time) on the date which is two Business Days prior to the commencement of such Interest Period or, if such a rate does not appear on page 3750 of the Dow Jones Telerate Screen (or any successor page), the average of the offered quotations to first-class banks in the London interbank market by Reference Banks that report same to the Administrative Agent for Japanese Yen deposits of amounts in same day funds comparable to the outstanding principal amount of such MCF Loan with maturities comparable to such Interest Period determined as of 11:00 A.M. (London time) on the date which is two Business Days prior to the commencement of such Interest Period. "Judgment Currency" shall have the meaning provided in Section 12.17(a). "Judgment Currency Conversion Date" shall have the meaning provided in Section 12.17(a). "L/C Allocation Basis" shall have the meaning provided in Section 12.20. "Lehman" shall mean Lehman Commercial Paper Inc. "Lender" shall have the meaning provided in the first paragraph of this Agreement. "Lender Default" shall mean (i) the refusal (which has not been retracted) of a Lender to make available its portion of any incurrence of Loans or to fund its portion of any unreimbursed payment under Section 2.05(c) or (ii) a Lender having notified the -80- 87 Administrative Agent and/or any Borrower that it does not intend to comply with its obligations under Section 1.01 or under Section 2.05(c), in the case of either clause (i) or (ii) as a result of the appointment of a receiver or conservator with respect to such Lender at the direction or request of any regulatory agency or authority. "Lender Register" shall have the meaning provided in Section 12.16. "Letter of Credit" shall have the meaning provided in Section 2.01(a). "Letter of Credit Fee" shall have the meaning provided in Section 3.01(c). "Letter of Credit Issuer" shall mean BTCo or NatWest (MCF Letters of Credit only), as requested by WLI with respect to any particular Letter of Credit. "Letter of Credit Outstandings" shall mean, at any time, the sum of (x) the USF Letter of Credit Outstandings and (ii) the MCF Letter of Credit Outstandings, in each case at such time. "Letter of Credit Request" shall have the meaning provided in Section 2.03(a). "Level" shall mean and include Level I, Level II, Level III or Level IV, whichever is then in effect. "Level I" shall exist at any time that the Leverage Ratio for the Relevant Test Period is equal to or greater than 2.00:1.0. "Level II" shall exist at any time that the Leverage Ratio for the Relevant Test Period is less than 2.00:1.0 and greater than or equal to 1.50:1.0. "Level III" shall exist at any time that the Total Leverage Ratio for the Relevant Test Period is less than 1.50:1.0 and greater than or equal to 1.00:1.0. "Level IV" shall exist at any time the Total Leverage Ratio for the Relevant Test Period is less than 1.00:1.0. "Leverage Ratio" shall mean, at any date of determination, the ratio of Consolidated Debt on such date to Consolidated EBITDA for the Test Period ending on such date (or most recently ended). "LIBOR" shall mean (i) any Borrowing of Eurodollar Loans, the US LIBOR Rate determined with respect thereto and (ii) any Borrowing of MCF Loans of an Approved Currency, the relevant interest rate, I.E., U.S. LIBOR, Deutsche Mark LIBOR, Euro LIBOR, -81- 88 Sterling LIBOR, French Franc LIBOR, Italian Lira LIBOR, Japanese Yen LIBOR, Spanish Peseta LIBOR, Danish Krone LIBOR, Belgian Franc LIBOR, Dutch Guilder LIBOR and such rate per annum as may be agreed upon by the respective Borrower and the MCF Lenders, as the case may be, for any other Approved Currency. "Lien" shall mean any mortgage, pledge, security interest, encumbrance, lien or charge of any kind (including any agreement to give any of the foregoing, any conditional sale or other title retention agreement or any lease in the nature thereof). "Lira Lender" shall mean Bankers Trust International Plc (which shall become party to this Agreement by executing a counterpart hereof in the space provided below on or prior to the Full Utilization Date) or such other Lender acceptable to the Agents that agrees with WLI to become the Lira Lender hereunder, it being understood that the Lira Lender shall be a Lender for all purposes of this Agreement. "Lira Loan" shall mean each MCF Loan denominated in Italian Lira that is made on and after the Full Utilization Date, all of which MCF Loans may only be made to the Italian Borrower, provided that the aggregate Principal Amount of outstanding Lira Loans shall not exceed at any time $100 million (or such greater amount not in excess of $200 million as is agreed to by the Lira Lender). "Lira Note" shall have the meaning provided in Section 1.05(a). "LL Fee" shall have the meaning provided in Section 3.01(f). "LL Portion" of any interest payment made in respect of a Lira Loan shall mean the portion of such interest payment that would have been payable had the interest rate for such Lira Loan been equal to the relevant Italian Lira LIBOR. "Loan" shall mean each MCF Loan, each USF Loan and each Swingline Loan. "Loan Allocation Basis" shall mean have the meaning provided in Section 12.20. "Local Time" shall mean the local time in effect at (x) the applicable Notice Office (in the case of Notices of Borrowings, Notices of Conversions and Letter of Credit Requests) and (y) the applicable Payment Office in the case of all payments and disbursements of Loans or Letters of Credit. "Margin Stock" shall have the meaning provided in Regulation U. -82- 89 "Material Adverse Effect" shall mean a material adverse effect on the business, assets, liabilities, operations or condition (financial or otherwise) of WLI and its Subsidiaries taken as a whole after giving effect to the Acquisition. "Material Subsidiary" shall mean (i) each Subsidiary listed on Annex IV, Part I (which will include all Domestic Subsidiaries (other than Immaterial Subsidiaries) in existence on the Closing Date), (ii) each newly created Domestic Subsidiary, (iii) each Foreign Subsidiary first acquired after the Closing Date to the extent that it had gross revenues for the last full 12 months prior to such acquisition of at least $50 million (or the equivalent), (iv) each existing Subsidiary that becomes a Material Subsidiary as a result of a Material Subsidiary Determination and (v) each other existing Wholly-Owned Subsidiary that has been designated in writing by WLI to the Administrative Agent as a Material Subsidiary. "Material Subsidiary Determination" shall mean a determination, made by WLI within the time parameters provided for in Section 7.12(b) and promptly conveyed in writing to the Administrative Agent, as to whether any existing Subsidiary that was not theretofore a Material Subsidiary had gross revenues for the 12 months ended as of the last day of the calendar year last ended aggregating at least $50 million (or the equivalent), with any Subsidiary having such revenues of at least $50 million (or the equivalent) to become a Material Subsidiary on the date of such determination. "Maximum Swingline Amount" shall mean the lesser of $25,000,000 and the amount of the Total USF Commitment. "MC Facility" shall mean the Facility evidenced by the Total MC Commitment. "MCF Borrowers" shall mean and include WLI, EU Holdco and Italian Borrower. "MCF Commitment" shall mean, with respect to each MCF Lender, the amount set forth opposite such MCF Lender's name in Annex I hereto directly below the column entitled "MCF Commitment," as the same may be reduced or terminated from time to time pursuant to Section 3.02, 3.03 and/or 9 or (y) adjusted from time to time as a result of assignments to or from such Lender pursuant to Section 1.13 and/or 12.04. "MCF Commitment Fee" shall have the meaning provided in Section 3.01(b). "MCF Lender" shall mean each Lender with a MCF Commitment or that has outstanding MCF Loans. -83- 90 "MCF Letter of Credit Outstandings" shall mean, at any time, the sum of, without duplication, (i) the Dollar Equivalent of the Stated Amount of all outstanding MCF Letters of Credit and (ii) the Dollar Equivalent of the aggregate principal amount of all Unpaid Drawings in respect of all such MCF Letters of Credit. "MCF Letters of Credit" shall mean Letters of Credit issued pursuant to the MC Facility. "MCF Loan" shall have the meaning provided in Section 1.01(B). "MCF Note" shall have the meaning provided in Section 1.05(a). "MCF Obligations" shall mean any and all of the Obligations to the extent arising under, or relating solely to, the MC Facility. "MCF Percentage" shall mean, at any time, the percentage obtained by dividing the Total MCF Commitment at such time by the Total Commitment at such time. "Minimum Borrowing Amount" shall mean for (i) Swingline Loans $250,000, (ii) USF Loans that are (x) Base Rate Loans, $1,000,000 and (y) Eurodollar Loans, $5,000,000, (iii) MCF Loans that are Dollar denominated, $5,000,000 and (iv) Alternate Currency Loans, an amount in the respective Alternate Currency having a Dollar Equivalent (determined at the time a Notice of Borrowing is received or a prepayment made) of $5,000,000. "Minimum Net Worth Amount" shall mean, at any time, the sum of (x) $630,000,000 (as adjusted for purchase accounting adjustments after the Closing Date and restructuring and integration related charges, in each case related to the Acquisition, all as approved by the Agents in their reasonable discretion) plus (y) (to the extent zero or positive) (i) 50% of an amount equal to Consolidated Net Income less the aggregate amount of all cash dividends paid in respect of WLI Preferred for the period (taken as one accounting period) commencing on the first day of the fiscal quarter after which the Closing Date occurs and ending on the last day of the fiscal quarter then last ended plus (ii) 100% of the proceeds received by WLI from issuances of equity after the Closing Date and (without duplication) any other increases in Consolidated Net Worth after the Closing Date, not resulting from Consolidated Net Income. "Multiemployer Plan" shall mean a plan within the meaning of Section 4001(a)(3) of ERISA to which WLI, a Subsidiary or an ERISA Affiliate is required to contribute. "NatWest" shall mean National Westminster Bank Plc. -84- 91 "Net Cash Payment" shall mean the portion of the total purchase price to be paid in cash by WLI and its Subsidiaries in respect of the Acquisition net of the free cash on hand of the Acquired Businesses on the Closing Date and after giving effect to the Acquisition, which Net Cash Payment shall not exceed 97 billion Italian Liras. "Net Cash Proceeds" shall mean, with respect to any Asset Sale, (x) the Cash Proceeds resulting therefrom net of (y) reasonable transaction costs, the amount of such proceeds required to be used (and used) to repay any Indebtedness (other than the Obligations) which is secured by the respective assets which were sold, the amount of such proceeds that are in good faith reserved for post-closing adjustments (it being understood and agreed that on the day that all such post-closing adjustments have been determined definitively, the amount (if any) by which the reserved amount in respect of such asset sale exceeds the actual post-closing adjustments payable, shall constitute proceeds on such date), and the estimated incremental taxes paid or payable by WLI or any of its Subsidiaries as a result thereof (all the foregoing costs and expenses in this clause (y), "Net Proceeds Deductions"). "Net Proceeds" shall mean, with respect to any Asset Sale, (x) the proceeds resulting therefrom net of (y) the Net Proceeds Deductions for such Asset Sale. "Net Proceeds Deductions" shall have the meaning provided in the definition of Net Cash Proceeds. "NFG Investments" shall mean at any time the then aggregate net amount of all investments in Foreign Subsidiaries that are not Guarantors pursuant to Section 8.02(a)(VI) and 8.06 (f)(ii) determined for the purposes of Section 8.02(a)(vi) by subtracting from the value of assets transferred thereunder the amount of liabilities of the transferring party transferred with such assets to the extent such liabilities cease under law to be liabilities of the transferring party. "Non-Defaulting Lender" shall mean each Lender other than a Defaulting Lender. "Note" shall mean and include each USF Note, each MCF Note, the Lira Note and the Swingline Note. "Notice of Borrowing" shall have the meaning provided in Section 1.03. "Notice of Conversion" shall have the meaning provided in Section 1.06. "Notice Office" shall mean for all matters arising under (x) the US Facility, the office of the Administrative Agent at 130 Liberty Street, New York, New York and, (y) the MCF Facility, the office of the Administrative Agent at 1 Appold Street, Broadgate, London -85- 92 EC1A 2HE (Fax: 011-44171-982-3419) provided that with respect to Lira Loans, the Notice Office shall be the offices of the Lira Lender in Milan, Italy as specified by the Lira Lender to the Italian Borrower, or in any such case, such other office as the Administrative Agent may designate to WLI from time to time. "Obligation Currency" shall have the meaning provided in Section 12.17(a). "Obligations" shall mean all amounts, direct or indirect, contingent or absolute, of every type or description, and at any time existing, owing to the Administrative Agent, the Collateral Agent or any Lender pursuant to the terms of this Agreement or any other Credit Document. "Other Foreign Subsidiary" shall mean each Foreign Subsidiary other than EU Holdco and each Subsidiary of EU Holdco. "Other Hedging Arrangements" shall mean agreements or arrangements designed to protect any Person against fluctuations in currency rates or commodity prices other than any such agreement or arrangement entered into in the ordinary course of business and not for speculative purposes. "Participant" shall have the meaning provided in Section 2.05(a). "Payment Office" shall mean (i) for all purposes other than as specified in clause (ii) below, the office of the Administrative Agent at 130 Liberty Street, New York, New York and (ii) in the case of all payments on MCF Loans the office of the Administrative Agent at 1 Appold Street, Broadgate, London EC1A 2HE (Fax: 011-44171-982-3419) provided that the Payment Office for Lira Loans shall be the offices of the Italian Lender in Milan, Italy as specified by the Lira Lender to the Italian Borrower, or in each case such other office as the Administrative Agent may designate to WLI from time to time. "PBGC" shall mean the Pension Benefit Guaranty Corporation established pursuant to Section 4002 of ERISA, or any successor thereto. "Percentage" shall mean for any Lender at any time (x) with respect to the US Facility, the percentage obtained by dividing such Lender's USF Commitment, if any, by the Total USF Commitment or if the Total USF Commitment has been terminated, by dividing such Lender's USF Commitment, if any, immediately prior to such termination by the Total USF Commitment immediately prior to such termination and (y) with respect to the MC Facility, the percentage obtained by dividing such Lender's MCF Commitment, if any, by the Total MCF Commitment or if the Total MCF Commitment has been terminated, by dividing such Lender's MCF Commitment, if any, immediately prior to such termination by the Total MCF Commitment immediately prior to such termination. -86- 93 "Permitted Acquired Debt" shall mean Indebtedness of a Subsidiary acquired after the Closing Date pursuant to a Permitted Acquisition or other acquisition permitted by Section 8.02(h), to the extent such Indebtedness was outstanding prior to the consummation of such Permitted Acquisition or other acquisition and remains outstanding as Indebtedness of the respective Subsidiary after giving effect thereto, provided that (i) such Indebtedness was not incurred in connection with or in anticipation of such Permitted Acquisition or other acquisition or the respective Person becoming a Subsidiary, (ii) such Indebtedness does not constitute Indebtedness of WLI or any of its Subsidiaries other than the respective Subsidiary acquired pursuant to the respective Permitted Acquisition or other acquisition and shall not be secured by any assets of any Person other than assets of the Subsidiary so acquired serving as security therefor at the time of the respective Permitted Acquisition or other acquisition, (iii) no Person other than the respective Subsidiary shall have any liability (contingent or otherwise) with respect to any Permitted Acquired Debt and (iv) all such Indebtedness shall be permitted by Section 8.04(i) or 8.04(j). "Permitted Acquisition" shall have the meaning provided in Section 8.02(g). "Permitted CAPEX Amount" shall mean (i) for the period from January 1, 1998 to and including December 31, 1998, $150 million, and (ii) for each fiscal year thereafter, $150 million, in each case increased by an amount satisfactory to the Agents to give effect to each Permitted Acquisition and acquisition pursuant to Section 8.02(h) effected during such fiscal year or, in the case of clause (ii), prior thereto but after the Closing Date. "Permitted Liens" shall mean Liens permitted by Section 8.03. "Permitted Subordinated Debt" shall mean unsecured Indebtedness of WLI not exceeding $100 million in aggregate outstanding principal amount on terms and conditions (including subordination provisions) acceptable to the Agents provided that after giving effect to the incurrence thereof and the use of the proceeds thereof (in each case as if effected on the last day of the Test Period then last ended) Section 8.11 would have been complied with on the last day of the Test Period then last ended. "Permitted Training Advances" shall mean unsecured Indebtedness of WLI or its Subsidiaries resulting from the obligation to make payments owing for training services rendered to WLI or such Subsidiary, with all such Indebtedness on terms and conditions satisfactory to the Agents. "Person" shall mean any individual, partnership, limited liability company, joint venture, firm, corporation, association, trust or other enterprise or business entity or any government or political subdivision or any agency, department or instrumentality thereof. -87- 94 "Plan" shall mean any pension plan as defined in Section 3(2) of ERISA, which is maintained or contributed to by (or to which there is an obligation to contribute of) WLI, a Subsidiary or an ERISA Affiliate, and each such plan for the five year period immediately following the latest date on which WLI, a Subsidiary, or an ERISA Affiliate maintained, contributed to or had an obligation to contribute to such plan but excluding all Foreign Pension Plans and Multiemployer Plans. "Pledge Agreement" shall mean the US Pledge Agreement and any pledge agreement constituting a Foreign Security Document. "Pledged Securities" shall mean all the Pledged Securities as defined in the relevant Pledge Agreement. "Pounds Sterling" shall mean freely transferable lawful money of the United Kingdom. "Prime Lending Rate" shall mean the rate which BTCo announces from time to time as its prime lending rate, the Prime Lending Rate to change when and as such prime lending rate changes. The Prime Lending Rate is a reference rate and does not necessarily represent the lowest or best rate actually charged to any customer. BTCo may make commercial loans or other loans at rates of interest at, above or below the Prime Lending Rate. "Principal Amount" shall mean (i) the stated principal amount of each Loan denominated in Dollars, (ii) the aggregate amount of all Unpaid Drawings under each Letter of Credit denominated in Dollars, (iii) the Dollar Equivalent of the stated principal amount of each Alternate Currency Loan, and/or (iv) the Dollar Equivalent of the aggregate amount of all Unpaid Drawings under Letters of Credit denominated in any Alternate Currency, as the context may require. "PSD Interest Period" shall mean an Interest Period commenced prior to the Syndication Date, each of which Interest Periods must satisfy the requirements of Section 1.09(iv). "Reference Banks" shall mean BTCo, NatWest and Lehman. "Regulation D" shall mean Regulation D of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor to all or a portion thereof establishing reserve requirements. "Regulation U" shall mean Regulation U of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor to all or a portion thereof establishing margin requirements. -88- 95 "Relevant Test Period" shall mean, at any time, the Test Period ending on the last day of the then most recently ended fiscal quarter of WLI with respect to which an officer's certificate has been delivered to the Lenders pursuant to Section 7.01(d). "Replaced Lender" shall have the meaning provided in Section 1.13. "Replacement Lender" shall have the meaning provided in Section 1.13. "Reportable Event" shall mean an event described in Section 4043(c) of ERISA with respect to a Plan that is subject to Title IV or ERISA other than those events as to which the 30-day notice period is waived under subsection .22, .23, .25, .27 or .28 of PBGC Regulation Section 4043. "Repurchases" shall have the meaning provided in Section 8.08. "Required Lenders" shall mean Non-Defaulting Lenders whose USF Commitments (or, if after the Total USF Commitment has been terminated, outstanding Principal Amount of USF Loans and Swingline Loans plus an amount equal to their Percentages times the USF Letter of Credit Outstandings) and MCF Commitments (or, if after the Total MCF Commitment has been terminated, outstanding Principal Amount of MCF Loans plus an amount equal to their Percentages times the MCF Letter of Credit Outstandings) constitute greater than 66-2/3% of the sum of (i) the Adjusted Total USF Commitment (or, if after the Total USF Commitment has been terminated, the total outstanding Principal Amount of USF Loans of Non-Defaulting Lenders and of Swingline Loans and the USF Letter of Credit Outstandings) and (ii) the Adjusted Total MCF Commitment (or, if after the Total MCF Commitment has been terminated, the total outstanding Principal Amount of MCF Loans of Non-Defaulting Lenders and the MCF Letter of Credit Outstandings). "Required MCF Lenders" shall mean (i) Non-Defaulting Lenders whose MCF Commitments (or, if after the Total MCF Commitment has been terminated, outstanding Principal Amount of MCF Loans plus an amount equal to their Percentages times the MCF Letter of Credit Outstandings) represents an amount greater than 66-2/3% of the sum of all MCF Commitments of Non-Defaulting Lenders (or, it after the Total MCF Commitment has been terminated, the total outstanding Principal Amount of MCF Loans of Non-Defaulting Lenders and the MCF Letter of Credit Outstandings). "Required USF Lenders" shall mean (i) Non-Defaulting Lenders whose USF Commitments (or, if after the Total USF Commitment has been terminated, outstanding Principal Amount of USF Loans and Swingline Loans plus an amount equal to their Percentage times the USF Letter of Credit Outstandings) represents an amount greater than 66-2/3% of the sum of all USF Commitments of Non-Defaulting Lenders (or, it after the Total USF -89- 96 Commitment has been terminated, the total outstanding Principal Amount of USF Loans of Non-Defaulting Lenders and of Swingline Loans and the USF Letter of Credit Outstandings). "SAR Cash Payment" shall have the meaning provided in Section 8.08(a). "SARs" shall have the meaning set forth in the definition of Equity Issuance. "SEC" shall have the meaning provided in Section 7.01(g). "SEC Regulation D" shall mean Regulation D as promulgated under the Securities Act of 1933, as amended, as the same may be in effect from time to time. "Section 4.04 Certificate" shall have the meaning provided in Section 4.04(b)(ii). "Security Documents" shall mean and include the US Security Documents and the Foreign Security Documents. "Sellers" shall mean ING. C. Olivetti & C. S.P.A., Olivetti Sistemas e Servicios Limitada and Olivetti do Brasil S.A. "Spanish Peseta Equivalent" shall mean, at any time for the determination thereof, the amount of Spanish Pesetas which could be purchased with the amount of Dollars involved in such computation at the spot exchange rate therefor as quoted by BTCo as of 11:00 A.M. (London time) on the date two Business Days prior to the date of any determination thereof for purchase on such date. "Spanish Peseta LIBOR" shall mean, for each Interest Period applicable to an MCF Loan denominated in Spanish Pesetas, the rate per annum that appears on page 3750 of the Dow Jones Telerate Screen (or any successor page) for Spanish Peseta deposits with maturities comparable to such Interest Period as of 11:00 A.M. (London time) on the date which is two Business Days prior to the commencement of such Interest Period or, if such a rate does not appear on page 3750 of the Dow Jones Telerate Screen (or any successor page), the average of the offered quotations to first-class banks in the London interbank market by each Reference Bank that reports same to the Administrative Agent for Spanish Peseta deposits of amounts in same day funds comparable to the outstanding principal amount of such MCF Loan with maturities comparable to such Interest Period determined as of 11:00 A.M. (London time) on the date which is two Business Days prior to the commencement of such Interest Period. "Spanish Pesetas" shall mean freely transferable lawful money of Spain. -90- 97 "Stated Amount" of each Letter of Credit shall mean the maximum available to be drawn thereunder (regardless of whether any conditions for drawing could then be met), or the Dollar Equivalent thereof if such Letter of Credit is denominated in an Alternate Currency. "Sterling Equivalent" shall mean, at any time for the determination thereof, the amount of Pounds Sterling which could be purchased with the amount of Dollars involved in such computation at the spot exchange rate therefor as quoted by BTCo as of 11:00 A.M. (London time) on the date two Business Days prior to the date of any determination thereof for purchase on such date. "Sterling LIBOR" shall mean, with respect to each Interest Period for MCF Loans denominated in Pounds Sterling, (I) the rate per annum that appears on page 3750 of the Dow Jones Telerate Screen (or any successive page) with maturities comparable to such Interest Period as of 11:00 A.M. (London time) on the date which is the commencement date of such Interest Period or, if such a rate does not appear on page 3750 of the Dow Jones Telerate Screen (or any successor page) the average of the offered quotations to first-class banks in the London interbank Eurodollar market by each Reference Bank that reports same to the Administrative Agent for Pounds Sterling deposits of amounts in same day funds comparable to the outstanding principal amount of such MCF Loans with maturities comparable to such Interest Period determined as of 11:00 A.M. (London time) on the date which is the commencement of such Interest Period plus (II) the Associated Cost Rate for such Loans for such Interest Period. "Subsidiary" of any Person shall mean and include (i) any corporation more than 50% of whose stock of any class or classes having by the terms thereof ordinary voting power to elect a majority of the directors of such corporation (irrespective of whether or not at the time stock of any class or classes of such corporation shall have or might have voting power by reason of the happening of any contingency) is at the time owned by such Person directly or indirectly through Subsidiaries and (ii) any partnership, association, joint venture or other entity in which such Person directly or indirectly through Subsidiaries, has more than a 50% equity interest at the time. Unless otherwise expressly provided, all references herein to "Subsidiary" shall mean a Subsidiary of WLI. "Swingline Expiry Date" shall mean the date which is five Business Days prior to the Final Maturity Date. "Swingline Lender" shall mean BTCo or, in the event BTCo ceases to be Swingline Lender upon agreement with WLI, any Lender which at the request of WLI and the consent of the Administrative Agent agrees in such Lender's sole discretion to become the Swingline Lender. -91- 98 "Swingline Loan" shall have the meaning provided in Section 1.01(E). "Swingline Note" shall have the meaning provided in Section 1.05(a). "Syndicated Borrowing" shall mean the incurrence of Loans (other than Lira Loans) under a Facility from all Lenders with a Commitment under such Facility. "Syndication Agent" shall mean National Westminster Bank Plc. "Syndication Date" shall mean the earlier of (x) the date which is 120 days after the Closing Date and (y) the date upon which the Arrangers determine in their sole discretion (and notify WLI) that the primary syndication (and the resulting addition of Lenders pursuant to Section 12.04) has been completed. "Taxes" shall have the meaning provided in Section 4.04(a). "Test Period" shall mean (x) in the case of any determination under Section 8.13 made as of the end of any fiscal quarter ending on or prior to December 31, 1998, a period (taken as one accounting period) commencing on the Closing Date and ending at the end of such fiscal quarter of WLI, and (y) for all other determinations, the four consecutive fiscal quarters of WLI (taken as one accounting period) ending on the last day of the last fiscal quarter of WLI then or theretofore ended. "Total Commitment" shall mean the sum of the Total USF Commitment and the Total MCF Commitment. "Total MCF Commitment" shall mean the sum of the MCF Commitments of each of the MCF Lenders. "Total Unutilized Commitment" shall mean, at any time, (i) the Total Commitment at such time less (ii) the sum of the aggregate Principal Amount of all outstanding Loans at such time plus the Letter of Credit Outstandings at such time. "Total Unutilized MCF Commitment" shall mean, at any time, (i) the Total MCF Commitment at such time less (ii) sum of the aggregate Principal Amount of all outstanding MCF Loans at such time plus the MCF Letter of Credit Outstandings at such time. "Total Unutilized USF Commitment" shall mean, at any time, (i) the Total USF Commitment at such time LESS (ii) the sum of the aggregate Principal Amount of all outstanding USF Loans and Swingline Loans at such time PLUS the USF Letter of Credit Outstandings at such time. -92- 99 "Total USF Commitment" shall mean the sum of the USF Commitments of each of the USF Lenders. "Transaction" shall mean (i) the Acquisition, (ii) the consummation of the Equity Issuance, (iii) the refinancing on the Closing Date of existing Indebtedness of WLI and its Subsidiaries and (iv) the incurrence of Loans and issuance of Letters of Credit, on the Closing Date. "Transaction Documents" shall mean and include the Credit Documents, the Acquisition Documents, the Equity Issuance Documents and all other documents entered into to effectuate with the Transaction. "Type" shall mean any type of Loan determined with respect to currency and the interest option applicable thereto. "UCC" shall mean the Uniform Commercial Code. "Unfunded Current Liability" of any Plan shall mean the amount, if any, by which the actuarial present value of the accumulated plan benefits under the Plan as of the close of its most recent plan year exceeds the fair market value of the assets allocable thereto, each determined in accordance with Statement of Financial Accounting Standards No. 87, based upon the actuarial assumptions used by the Plan's actuary in the most recent annual valuation of the Plan. "Unpaid Drawing" shall have the meaning provided in Section 2.04(a). "Unutilized MCF Commitment" shall mean, at any time for any MCF Lender, (i) its MCF Commitment at such time less (ii) the sum of (x) the aggregate Principal Amount of all outstanding MCF Loans (other than Lira Loans) made by it and (y) its Percentage of (i) MCF Letter of Credit Outstandings at such time and (ii) the aggregate outstanding principal amount of Lira Loans at such time. "Unutilized USF Commitment" shall mean, at any time for any USF Lender, (i) its USF Commitment at such time less (ii) the sum of (x) the aggregate Principal Amount of all outstanding USF Loans and Swingline Loans made by it and (y) its Percentage of USF Letter of Credit Outstandings at such time. "US Facility" shall mean the Facility evidenced by the Total USF Commitment. "US Guaranty" shall have the meaning provided in Section 5.01(j)(I). -93- 100 "US LIBOR" shall mean for each Interest Period applicable to a Loan denominated in Dollars (other than a Base Rate Loan), the rate per annum that appears on page 3750 of the Dow Jones Telerate Screen (or any successor page) for Dollar deposits with maturities comparable to such Interest Period as of 11:00 A.M. (London time) on the date which is two Business Days prior to the commencement of such Interest Period or, if such a rate does not appear on page 3750 of the Dow Jones Telerate Screen (or any successor page), the average of the offered quotations to first-class banks in the London interbank market by each Reference Bank that reports same to the Administrative Agent for Dollar deposits of amounts in same day funds comparable to the outstanding principal amount of such Dollar denominated Loan with maturities comparable to such Interest Period determined as of 11:00 A.M. (London time) on the date which is two Business Days prior to the commencement of such Interest Period. "US Pledge Agreement" shall have the meaning provided in Section 5.01(k)(I). "US Security Agreement" shall have the meaning provided in Section 5.01(k)(II). "US Security Documents" shall mean the US Pledge Agreement and the US Security Agreement. "USF Commitment" shall mean, with respect to each USF Lender, the amount set forth opposite such USF Lender's name in Annex I hereto directly below the column entitled "USF Commitment," as the same may be reduced or terminated from time to time pursuant to Section 3.02, 3.03 and/or 9 or (y) adjusted from time to time as a result of assignments to or from such Lender pursuant to Section 1.13 and/or 12.04. "USF Commitment Fee" shall have the meaning provided in Section 3.01(a). "USF Lender" shall mean each Lender with USF Commitment or that has outstanding USF Loans. "USF Letter of Credit Outstandings" shall mean at any time, the sum of, without duplication, (i) the aggregate Stated Amount of all outstanding USF Letters of Credit and (ii) the aggregate principal amount of all Unpaid Drawings in respect of all such USF Letters of Credit. "USF Letters of Credit" shall mean Letters of Credit issued pursuant to the US Facility. "USF Loan" shall have the meaning provided in Section 1.01(A). "USF Note" shall have the meaning provided in Section 1.05(a). -94- 101 "USF Obligations" shall mean any and all Obligations to the extent arising under, or relating solely to, the US Facility. "USF Percentage" shall mean, at any time, 100% minus the MCF Percentage at such time. "Wholly-Owned Subsidiary" of any Person shall mean any other Person to the extent all of the capital stock or other ownership interests in such other Person, other than directors' qualifying shares, is owned directly or indirectly by such first Person. "WLI" shall mean Wang Laboratories, Inc., a Delaware corporation. "WLI Intercompany Note" shall mean the promissory notes in form and substance satisfactory to the Agents evidencing intercompany advances by WLI to Other Foreign Subsidiaries provided that, in the case of any such note issued by a Material Subsidiary, the Administrative Agent shall have received an opinion in form and substance, and from counsel, satisfactory to the Administrative Agent as to the due authorization, execution and enforceability thereof. "WLI Preferred" shall mean WLI's Series A Preferred Stock and Series B Preferred Stock outstanding on the Closing Date and as subsequently amended or modified pursuant to the terms thereof and hereof. "Working Capital" shall mean the excess of Consolidated Current Assets over Consolidated Current Liabilities. "Written" or "in writing" shall mean any form of written communication or a communication by means of telex, facsimile transmission, telegraph or cable. SECTION 11. AGENTS, ETC. 11.01 APPOINTMENT. The Lenders hereby designate BTCo as Administrative Agent (for purposes of this Section 11, the terms "Administrative Agent" shall include BTCo in its capacity as Collateral Agent pursuant to the Security Documents) NatWest as Syndication Agent and Lehman as Documentation Agent to act as specified herein and in the other Credit Documents. Each Lender hereby irrevocably authorizes, and each holder of any Note by the acceptance of such Note shall be deemed irrevocably to authorize, each Agent to take such action on its behalf under the provisions of this Agreement, the other Credit Documents and any other instruments and agreements referred to herein or therein and to exercise such powers and to perform such duties hereunder and thereunder as are specifically delegated to or required of such Agent by the terms hereof and thereof and such other powers -95- 102 as are reasonably incidental thereto. The Agents may perform any of their duties hereunder by or through their respective officers, directors, agents, employees or affiliates. 11.02 NATURE OF DUTIES. No Agent shall have any duties or responsibilities except those expressly set forth in this Agreement and the Other Credit Documents. No Agent or any of its respective officers, directors, agents, employees or affiliates shall be liable for any action taken or omitted by them hereunder or under any other Credit Document or in connection herewith or therewith, unless caused by their gross negligence or willful misconduct. The duties of each Agent shall be mechanical and administrative in nature; no Agent shall have by reason of this Agreement or any other Credit Document a fiduciary relationship in respect of any Lender or the holder of any Note; and nothing in this Agreement or any other Credit Document, expressed or implied, is intended to or shall be so construed as to impose upon either Agent any obligations in respect of this Agreement or any other Credit Document except as expressly set forth herein or therein with respect to such Agent. 11.03 LACK OF RELIANCE ON THE AGENTS. Independently and without reliance upon either Agent, each Lender and the holder of each Note, to the extent it deems appropriate, has made and shall continue to make (i) its own independent investigation of the financial condition and affairs of WLI and its Subsidiaries in connection with the making and the continuance of the Loans and the taking or not taking of any action in connection herewith and (ii) its own appraisal of the creditworthiness of WLI and its Subsidiaries and, except as expressly provided in this Agreement, no Agent shall have any duty or responsibility, either initially or on a continuing basis, to provide any Lender or the holder of any Note with any credit or other information with respect thereto, whether coming into its possession before the making of the Loans or at any time or times thereafter. No Agent shall be responsible to any Lender or the holder of any Note for any recitals, statements, information, representations or warranties herein or in any document, certificate or other writing delivered in connection herewith or for the execution, effectiveness, genuineness, validity, enforceability, perfection, collectibility, priority or sufficiency of this Agreement or any other Credit Document or the financial condition of WLI and its Subsidiaries or be required to make any inquiry concerning either the performance or observance of any of the terms, provisions or conditions of this Agreement or any other Credit Document, or the financial condition of WLI and its Subsidiaries or the existence or possible existence of any Default or Event of Default. 11.04 CERTAIN RIGHTS OF THE AGENTS. If any Agent shall request instructions from the Required Lenders with respect to any act or action (including failure to act) in connection with this Agreement or any other Credit Document, such Agent shall be entitled to refrain from such act or taking such action unless and until such Agent shall have received instructions from the Required Lenders; and no Agent shall incur liability to any Person by reason of so refraining. Without limiting the foregoing, neither any Lender nor the holder of any Note shall have any right of action whatsoever against an Agent as a result of such Agent acting or -96- 103 refraining from acting hereunder or under any other Credit Document in accordance with the instructions of the Required Lenders. 11.05 RELIANCE. Each Agent shall be entitled to rely, and shall be fully protected in relying, upon any note, writing, resolution, notice, statement, certificate, telex, tele type, facsimile or telecopier message, cablegram, radiogram, order or other document or telephone message signed, sent or made by any Person that such Agent believed to be the proper Person, and, with respect to all legal matters pertaining to this Agreement and any other Credit Document and its duties hereunder and thereunder, upon advice of counsel selected by such Agent. 11.06 INDEMNIFICATION. To the extent an Agent is not reimbursed and indemnified by the Borrowers, the Lenders will reimburse and indemnify such Agent, in proportion to their respective "percentages" as used in determining the Required Lenders, for and against any and all liabilities, obligations, losses, damages, penalties, claims, actions, judg ments, costs, expenses or disbursements of whatsoever kind or nature which may be imposed on, asserted against or incurred by such Agent in performing its respective duties hereunder or under any other Credit Document, in any way relating to or arising out of this Agreement or any other Credit Document provided that no Lender shall be liable for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from the gross negligence or willful misconduct of such Agent. 11.07 THE AGENTS IN THEIR INDIVIDUAL CAPACITIES. With respect to its obligation to make Loans under this Agreement, each Agent shall have the rights and powers specified herein for a "Lender" and may exercise the same rights and powers as though it were not performing the duties specified herein; and the term "Lenders," "Required Lenders," "holders of Notes" or any similar terms shall, unless the context clearly otherwise indicates, include the Agents in their individual capacities. Each Agent may accept deposits from, lend money to, and generally engage in any kind of banking, trust or other business with any Designated Party or any Affiliate of any Designated Party as if they were not performing the duties specified herein, and may accept fees and other consideration from any Borrower or any other Designated Party for services in connection with this Agreement and otherwise without having to account for the same to the Lenders. 11.08 HOLDERS. The Administrative Agent may deem and treat the payee of any Note as the owner thereof for all purposes hereof unless and until a written notice of the assignment, transfer or endorsement thereof, as the case may be, shall have been filed with the Administrative Agent. Any request, authority or consent of any Person who, at the time of making such request or giving such authority or consent, is the holder of any Note shall be conclusive and binding on any subsequent holder, transferee, assignee or indorsee, as the case may be, of such Note or of any Note or Notes issued in exchange therefor. -97- 104 11.09 RESIGNATION BY AN AGENT. (a) The Administrative Agent may resign from the performance of all its functions and duties hereunder and/or under the other Credit Documents at any time by giving 15 Business Days' prior written notice to the Borrowers and the Lenders. Such resignation shall take effect upon the appointment of a successor Administrative Agent pursuant to clauses (b) and (c) below or as otherwise provided below. (b) Upon any such notice of resignation, the Required Lenders shall appoint a successor Administrative Agent hereunder or thereunder who shall be a Lender, commercial bank or trust company reasonably acceptable to the Borrowers. (c) If a successor Administrative Agent shall not have been so appointed within such 15 Business Day period, the Administrative Agent, with the consent of the Borrowers, shall then appoint a successor Administrative Agent who shall serve as Administrative Agent hereunder or thereunder until such time, if any, as the Lenders appoint a successor Administrative Agent as provided above. (d) If no successor Administrative Agent has been appointed pursuant to clause (b) or (c) above by the 20th Business Day after the date such notice of resignation was given by the Administrative Agent, the Administrative Agent's resignation shall become effective and the Required Lenders shall thereafter perform all the duties of the Administrative Agent hereunder and/or under any other Credit Document until such time, if any, as the Lenders appoint a successor Administrative Agent as provided above. (e) The Syndication Agent and the Documentation Agent may each resign from the performance of all of its functions and duties hereunder and/or under the other Credit Documents in such capacity at any time by giving 5 Business Days' prior written notice to the Lenders. Such resignation shall take effect at the end of such 5 Business Days. SECTION 12. MISCELLANEOUS. 12.01 PAYMENT OF EXPENSES, ETC. The Borrowers jointly and severally agree to: (i) whether or not the transactions herein contemplated are consummated, pay all reason able out-of-pocket costs and expenses of the Agents in connection with the negotiation, syndication, preparation, execution and delivery of the Credit Documents and the documents and instruments referred to therein and any amendment, waiver or consent relating thereto (including, without limitation, the reasonable fees and disbursements of White & Case LLP) and of the Agents and each of the Lenders in connection with the enforcement of the Credit Documents and the documents and instruments referred to therein (including, without limitation, the reasonable fees and disbursements of counsel for each Agent and for each of the Lenders); (ii) pay and hold each of the Agents and Lenders harmless from and against any and all present and future stamp, VAT and other similar taxes with respect to the foregoing matters and/or fees and save each of the Lenders harmless from and against any and all liabilities with respect -98- 105 to or resulting from any delay or omission (other than to the extent attributable to such Lender) to pay such taxes; and (iii) indemnify each Lender (including in its capacity as Agent or Letter of Credit Issuer), its officers, directors, employees, representatives and agents from and hold each of them harmless against any and all losses, liabilities, claims, damages or expenses incurred by any of them as a result of, or arising out of, or in any way related to, or by reason of, (a) an investigation, litigation or other proceeding (whether or not an Agent or any Lender is a party thereto and whether or not any such investigation, litigation or other proceeding is between or among an Agent, any Lender, any Designated Party or any third Person or otherwise) related to the entering into and/or performance of any Transaction Document or the use of the proceeds of any Loans hereunder or the Transaction or the consummation of any transactions contemplated in any Credit Document, and (b) any such investigation, litigation or other proceeding relating to the violation of, noncompliance with or liability under, any Environmental Law applicable to the operations of WLI, any of its Subsidiaries or any real property owned or operated by them, or the actual or alleged presence or release of Hazardous Materials on, under or from any real property at any time owned or operated by WLI or any of its Subsidiaries, and in each case including, without limitation, the reasonable fees and disbursements of counsel incurred in connection with any such investigation, litigation or other proceeding (but excluding any such losses, liabilities, claims, damages or expenses to the extent incurred by reason of the gross negligence or willful misconduct of the Person to be indemnified). 12.02 RIGHT OF SETOFF. In addition to any rights now or hereafter granted under applicable law or otherwise, and not by way of limitation of any such rights, if an Event of Default then exists, each Lender is hereby authorized at any time or from time to time, without presentment, demand, protest or other notice of any kind to any Borrower or to any other Person, any such notice being hereby expressly waived, to set off and to appropriate and apply any and all deposits (general or special) and any other Indebtedness at any time held or owing by such Lender (including, without limitation, by branches and agencies of such Lender wherever located) to or for the credit or the account of such Borrower against and on account of the Obligations (regardless of the currency thereof) and liabilities of such Borrower to such Lender under this Agreement or under any of the other Credit Documents, including, without limitation, all interests in Obligations of such Borrower purchased by such Lender pursuant to Section 12.06(b), and all other claims of any nature or description arising out of or connected with this Agreement or any other Credit Document, irrespective of whether or not such Lender shall have made any demand hereunder and although said Obligations, liabilities or claims, or any of them, shall be contingent or unmatured. 12.03 NOTICES. Except as otherwise expressly provided herein, all notices and other communications provided for hereunder shall be in writing (including telecopier or facsimile) and mailed, telecopied, faxed or delivered, if to a Borrower, at the address specified opposite its signature below or in the other relevant Credit Documents, as the case may be; if to any Lender or Agent, at its address specified for such Lender or Agent on Annex II hereto; -99- 106 or, at such other address as shall be designated by any party in a written notice to the other parties hereto. All such notices and communications shall be mailed, telecopied or sent by overnight courier, and shall be effective when received. 12.04 BENEFIT OF AGREEMENT. (a) This Agreement shall be binding upon and inure to the benefit of and be enforceable by the respective successors and assigns of the parties hereto, provided that no Borrower may assign or transfer any of its rights or obligations hereunder without the prior written consent of the Lenders. Each Lender may at any time grant participations in any of its rights hereunder or under any of the Notes to an Eligible Transferee, provided that (x) in the case of any such participation, the participant shall not have any rights under this Agreement or any of the other Credit Documents (the participant's rights against such Lender in respect of such participation to be those set forth in the agreement executed by such Lender in favor of the participant relating thereto) and all amounts payable by the Borrowers hereunder shall be determined as if such Lender had not sold such participation, except that the participant shall be entitled to the benefits of Sections 1.10, 2.06 and 4.04 of this Agreement to the extent that such Lender would be entitled to such benefits if the participation had not been entered into or sold and (y) no Lender shall transfer, grant or assign any participation under which the participant shall have rights to approve any amendment to or waiver of this Agreement or any other Credit Document except to the extent such amendment or waiver would (i) extend the final scheduled maturity of any Loan or Note in which such participant is participating, or reduce the rate or extend the time of payment of interest or Fees thereon (except in connection with a waiver of the applicability of any post-default increase in interest rates), or reduce the principal amount thereof, or increase such participant's participating interest in any Commitment over the amount thereof then in effect (it being understood that a waiver of any Default or Event of Default or of a mandatory reduction in the Total Commitment, or a mandatory prepayment, shall not constitute a change in the terms of any Commitment), (ii) release all or substantially all of the Collateral or (iii) consent to the assignment or transfer by any Designated Party of any of its rights and obligations under this Agreement or any other Credit Document. (b) Notwithstanding the foregoing, (x) any Lender may assign all or a portion of its USF Commitment and/or MCF Commitment and its rights and obligations hereunder to another Lender (or an Affiliate of such assigning Lender), and (y) with the consent of (I) the Administrative Agent, the Lira Lender (in the case of assignments of MCF Commitments), the Swingline Lender (in the case of assignments of USF Commitments) and each Letter of Credit Issuer and (II) so long as no Default under Section 9.01 or 9.05 or Event of Default exists, WLI (which consent shall not be unreasonably withheld), any Lender may assign all or a portion of its USF Commitment and/or MCF Commitment and its rights and obligations hereunder to one or more Eligible Transferees. No assignment pursuant to the immediately preceding sentence by a Lender (or by Lenders which are Affiliates of each other) shall to the extent such assignment represents an assignment to an institution other than one or more Lenders hereunder (or to an Affiliate of an assigning Lender), be in an aggregate amount less than -100- 107 $10,000,000 unless the entire Commitment of the assigning Lender (or group of Lenders which are Affiliates) is so assigned. If any Lender so sells or assigns all or a part of its rights hereunder or under the Notes, any reference in this Agreement or the Notes to such assigning Lender shall thereafter refer to such Lender and to the respective assignee to the extent of their respective interests and the respective assignee shall have, to the extent of such assignment (unless otherwise provided therein), the same rights and benefits as it would if it were such assigning Lender. Each assignment pursuant to this Section 12.04(b) shall be effected by the assigning Lender and the assignee Lender executing an Assignment Agreement (appropriately completed). At the time of any such assignment, (i) either the assigning or the assignee Lender shall pay to the Administrative Agent a nonrefundable assignment fee of $3,500, (ii) Annex I shall be deemed to be amended to reflect the Commitment of the respective assignee (which shall result in a direct reduction to the Commitment of the assigning Lender) and of the other Lenders, and (iii) the relevant Borrower or Borrowers will issue new Notes to the respective assignee and to the assigning Lender in conformity with the requirements of Section 1.05. To the extent any assignment pursuant to this Section 12.04(b) is to a Person which is not already a Lender hereunder and which is not a United States Person (as such term is defined in Section 7701(a)(30) of the Code) for Federal income tax purposes, the respective assignee Lender shall provide to WLI and the Administrative Agent the appropriate Internal Revenue Service Forms (and, if applicable, a Section 4.04 Certificate) described in Section 4.04(b). To the extent that an assignment of all or any portion of a Lender's Commitments and related outstanding Obligations pursuant to this Section 12.04(b) would, at the time of such assignment, result in increased costs under Section 1.10, 2.06 or 4.04 from those being charged by the respective assigning bank prior to such assignment, then the Borrowers shall not be obligated to pay such increased costs (although the Borrowers shall be obligated to pay any other increased costs of the type described above resulting from changes specified in said Section 1.10, 2.06 or 4.04 occurring after the date of the respective assignment). Each Lender and the Borrowers agree to execute such documents (including without limitation amendments to this Agreement and the other Credit Documents) as shall be necessary to effect the foregoing. Nothing in this clause (b) shall prevent or prohibit any Lender from pledging its Notes or Loans to a Federal Reserve Bank in support of borrowings made by such Lender from such Federal Reserve Bank. (c) Notwithstanding any other provisions of this Section 12.04, no transfer or assignment of the interests or obligations of any Lender hereunder or any grant of participation therein shall be permitted if such transfer, assignment or grant would require any Borrower to file a registration statement with the SEC or to qualify the Loans under the "Blue Sky" laws of any State. (d) Each Lender initially party to this Agreement hereby represents, and each Person that became a Lender pursuant to an assignment permitted by this Section 12 will, upon its becoming party to this Agreement, represent that it is an Eligible Transferee which makes loans in the ordinary course of its business and that it will make or acquire Loans for its own account in the ordinary course of such business, PROVIDED that subject to the preceding clauses -101- 108 (a) and (b), the disposition of any promissory notes or other evidences of or interests in Indebtedness held by such Lender shall at all times be within its exclusive control. 12.05 NO WAIVER; REMEDIES CUMULATIVE. No failure or delay on the part of any Agent or any Lender in exercising any right, power or privilege hereunder or under any other Credit Document and no course of dealing between any Designated Party and either Agent or any Lender shall operate as a waiver thereof; nor shall any single or partial exercise of any right, power or privilege hereunder or under any other Credit Document preclude any other or further exercise thereof or the exercise of any other right, power or privilege hereunder or thereunder. The rights and remedies herein expressly provided are cumulative and not exclusive of any rights or remedies which any Agent or any Lender would otherwise have. No notice to or demand on any Designated Party in any case shall entitle any Designated Party to any other or further notice or demand in similar or other circumstances or constitute a waiver of the rights of the Agents or the Lenders to any other or further action in any circumstances without notice or demand. 12.06 PAYMENTS PRO RATA. (a) Subject to the provisions of Sections 1.01(D) and 1.08(e), the Administrative Agent agrees that promptly after its receipt of each payment from or on behalf of any Designated Party in respect of any Obligations of such Designated Party hereunder, it shall distribute such payment to the Lenders (other than any Lender that has expressly waived its right to receive its pro rata share thereof) PRO RATA based upon their respective shares, if any, of the Obligations with respect to which such payment was received. (b) Each of the Lenders agrees that, if it should receive any amount here under (whether by voluntary payment, by realization upon security, by the exercise of the right of setoff or banker's lien, by counterclaim or cross action, by the enforcement of any right under the Credit Documents, or otherwise) which is applicable to the payment of the principal of, or interest on, the Loans or Fees, of a sum which with respect to the related sum or sums received by other Lenders is in a greater proportion than the total of such Obligation then owed and due to such Lender bears to the total of such Obligation then owed and due to all of the Lenders immediately prior to such receipt, then such Lender receiving such excess payment shall purchase for cash without recourse or warranty from the other Lenders an interest in the Obligations of the respective Designated Party to such Lenders in such amount as shall result in a proportional participation by all of the Lenders in such amount, PROVIDED that if all or any portion of such excess amount is thereafter recovered from such Lender, such purchase shall be rescinded and the purchase price restored to the extent of such recovery, but without interest. (c) Notwithstanding anything to the contrary contained herein, the provisions of the preceding Sections 12.06(a) and (b) shall be subject to the express provisions of this Agreement which require, or permit, differing payments to be made to Non-Defaulting Lenders as opposed to Defaulting Lenders. -102- 109 12.07 CALCULATIONS; COMPUTATIONS. (a) The financial statements to be furnished to the Lenders pursuant hereto shall be made and prepared in conformity with GAAP consistently applied throughout the periods involved (except as set forth in the notes thereto or as otherwise disclosed in writing by WLI to the Lenders and with respect to any interim financial statements, subject to changes resulting from audit and normal year-end audit adjustments, provided that (x) except as otherwise specifically provided herein, all computations determining compliance with Section 8, including definitions used therein, shall utilize accounting principles and policies in effect at the time of the preparation of, and in conformity with those used to prepare, the December 31, 1997 financial statements delivered to the Lenders pursuant to Section 6.10(b), (y) that if at any time the computations determining compliance with Section 8 utilize accounting principles different from those utilized in the financial statements furnished to the Lenders, such financial statements shall be accompanied by reconciliation work-sheets and (z) for purposes of determining compliance with any tests set forth in Sections 8 and/or 9 (excluding Sections 8.10 through 8.13), any amounts so incurred or expended (to the extent incurred or expended in a currency other than Dollars) should be converted into Dollars on the basis of the Dollar Equivalent of the respective such amounts as in effect on the date of such incurrence or expenditure under any provision of any such Section that has an aggregate Dollar limitation provided for therein (and to the extent the respective incurrence test regulates the aggregate amount outstanding at any time as expressed in terms of Dollars, all outstanding amounts originally incurred or spent in currencies other than Dollars shall be converted into Dollars on the basis of the Dollar Equivalent of the respective such amounts as in effect on the date any new incurrence or expenditures made under any provision of any such Section that regulates the Dollar Amount outstanding at any time). (b) All computations of interest and Fees hereunder shall be made on the actual number of days elapsed over a year of 360 days (365-366 days for interest on Base Rate Loans and 365 days for interest on Pounds Sterling and Belgian Francs denominated MCF Loans). (c) For purposes of this Agreement, the Dollar Equivalent of (x) each MCF Loan that is an Alternate Currency Loan shall be calculated on the date when any such MCF Loan is made or repaid, each MCF Letter of Credit issued in an Alternate Currency shall be calculated on the date when any such Letter of Credit is issued, on any date drawn on and on any date on which such drawing is repaid and (y) all outstanding Loans denominated in Alternate Currencies and all MCF Letter of Credit Outstandings denominated in Alternate Currencies, on the second Business Day of each month and at such other times as designated by the Administrative Agent at any time when a Default under Section 9.01 or an Event of Default exists. Such Dollar Equivalent shall remain in effect until the same is recalculated by the Administrative Agent as provided above and notice of such recalculation is received by WLI, it being understood that until such notice is received, the Dollar Equivalent shall be that Dollar Equivalent as last reported to WLI by the Administrative Agent. The Administrative -103- 110 Agent shall promptly notify WLI and the Banks of each such determination of the Dollar Equivalent. 12.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY TRIAL. (a) This Agreement and the other Credit Documents (other than the EU Intercompany Notes to the extent set forth therein) and the rights and obligations of the parties hereunder and thereunder shall be construed in accordance with and be governed by the law of the state of New York. Any legal action or proceeding with respect to this Agreement or any other Credit Document may be brought in the courts of the State of New York or of the United States for the Southern District of New York, and, by execution and delivery of this Agreement, each Borrower hereby irrevocably accepts for itself and in respect of its property, generally and unconditionally, the jurisdiction of the aforesaid courts. Each Borrower further irrevocably consents to the service of process out of any of the aforementioned courts in any such action or proceeding by the mailing of copies thereof by registered or certified mail, postage prepaid, to it, to the extent located outside New York City, or by hand, to the extent located within New York City, at its address for notices pursuant to Section 12.03, such service to become effective 30 days after such mailing. Each Borrower hereby irrevocably designates appoints and empowers CT Corporation System, with offices on the date hereof located at 1633 Broadway, New York, New York 10019, as its agent for service of process in respect of any such action or proceeding. Nothing herein shall affect the right of any Agent or any Lender to serve process in any other manner permitted by law or to commence legal proceedings or otherwise proceed against any Borrower in any other jurisdiction. (b) Each Borrower each hereby irrevocably waives any objection which it may now or hereafter have to the laying of venue of any of the aforesaid actions or proceedings arising out of or in connection with this Agreement or any other Credit Document brought in the courts referred to in clause (a) above and hereby further irrevocably waives and agrees not to plead or claim in any such court that any such action or proceeding brought in any such court has been brought in an inconvenient forum. (c) Each of the parties to this Agreement hereby irrevocably waives all right to a trial by jury in any action, proceeding or counterclaim arising out of or relating to this Agreement, the other Credit Documents or the transactions contemplated hereby or thereby. 12.09 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 and delivered shall be an original, but all of which shall together constitute one and the same instrument. A set of counterparts executed by all the parties hereto shall be lodged with each Borrower and the Administrative Agent. 12.10 EFFECTIVENESS. This Agreement shall become effective on the date (the "Effective Date") on which WLI, EU Holdco, each Agent and each of the Lenders other than -104- 111 the Lira Lender shall have signed a copy hereof (whether the same or different copies) and shall have delivered the same to the Administrative Agent at its Notice Office or, in the case of the Lenders and the Agents, shall have given to the Administrative Agent telephonic (confirmed in writing), written telex or facsimile transmission notice (actually received) at such office that the same has been signed and mailed to it. 12.11 HEADINGS DESCRIPTIVE. The headings of the several sections and subsections of this Agreement are inserted for convenience only and shall not in any way affect the meaning or construction of any provision of this Agreement. 12.12 AMENDMENT OR WAIVER. Neither this Agreement nor any other Credit Document nor any terms hereof or thereof may be changed, waived, discharged or terminated unless such change, waiver, discharge or termination is in writing signed by the Borrowers and the Required Lenders, provided that no such change, waiver, discharge or termination shall, without the consent of each Lender (other than a Defaulting Lender) directly affected thereby, (i) extend the Final Maturity Date, or extend the stated maturity of any Letter of Credit beyond the Final Maturity Date (except as contemplated by Section 2.01(b)), or reduce the rate or extend the time of payment of interest (other than as a result of waiving the applicability of any post-default increase in interest rates) or Fees or other amounts payable hereunder, or reduce the principal amount thereof, or increase the Commitment of any Lender over the amount thereof then in effect (it being understood that a waiver of any Default or Event of Default or of a mandatory reduction in the Total Commitment shall not constitute a change in the terms of any Commitment of any Lender), (ii) amend, modify or waive any provision of this Section 12.12, (iii) reduce the percentage specified in, or (except to give effect to any additional facilities hereunder) otherwise modify, the definition of Required Lenders, (iv) consent to the assignment or transfer by any Borrower of any of its rights and obligations under this Agreement or (v) release all or substantially all of the Collateral, PROVIDED FURTHER, that no such change, waiver, discharge or termination shall, without the consent of the Required USF Lenders and the Required MCF Lenders, amend the definition of Required USF Lender or Required MCF Lenders (as applicable) or amend in a manner adverse to the respective Facility the allocation between the USF Facility and the MCF Facility of mandatory commitment reductions. No provision of Section 1.01(B), 1.01(D) and (E), 2 or 11 may be amended without the consent of the Lira Lender, the Swingline Lender, any Letter of Credit Issuer affected thereby or any Agent affected thereby, respectively. 12.13 SURVIVAL. All indemnities set forth herein including, without limitation, in Section 1.10, 1.11, 2.06, 4.04, 11.06 or 12.01 shall survive the execution and delivery of this Agreement and the making and repayment of the Loans. 12.14 DOMICILE OF LOANS. Each Lender may transfer and carry its Loans at, to or for the account of any branch office, subsidiary or affiliate of such Lender, provided that the Borrowers shall not be responsible for costs arising under Section 1.10, 2.06 or 4.04 -105- 112 resulting from any such transfer (other than a transfer pursuant to Section 1.12 or 1.13) to the extent not otherwise applicable to such Lender prior to such transfer. 12.15 CONFIDENTIALITY. Subject to Section 12.04, the Lenders shall hold all non-public information obtained pursuant to the requirements of this Agreement in accordance with its customary procedure for handling confidential information of this nature and in accordance with safe and sound banking practices and in any event may make disclosure to its Affiliates, employees, auditors, advisors or counsel or as reasonably required by any BONA FIDE transferee or participant in connection with the contemplated transfer of any Loans or participation therein (so long as such transferee or participant agrees to be bound by the provisions of this Section 12.15) or as required or requested by any governmental agency or representative thereof or pursuant to legal process, provided that, unless specifically prohibited by applicable law or court order, each Lender shall notify WLI of any request by any governmental agency or representative thereof (other than any such request in connection with an examination of the financial condition of such Lender by such governmental agency) for disclosure of any such non-public information prior to disclosure of such information, and provided further that in no event shall any Lender be obligated or required to return any materials furnished by WLI or any Subsidiary. 12.16 LENDER REGISTER. Each Borrower hereby designates the Administrative Agent to serve as its agent, solely for purposes of this Section 12.16, to maintain a register (the "Lender Register") on which it will record the Commitments from time to time of each of the Lenders, the Loans made by each of the Lenders and each repayment in respect of the principal amount of the Loans of each Lender. Failure to make any such recordation, or any error in such recordation, shall not affect the Borrowers' obligations in respect of such Loans. With respect to any Lender, the transfer of the Commitments of such Lender and the rights to the principal of, and interest on, any Loan made pursuant to such Commitments shall not be effective until such transfer is recorded on the Lender Register maintained by the Administrative Agent with respect to ownership of such Commitments and Loans and prior to such recordation all amounts owing to the transferor with respect to such Commitments and Loans shall remain owing to the transferor. The registration of assignment or transfer of all or part of any Commitments and Loans shall be recorded by the Administrative Agent on the Lender Register only upon the acceptance by the Administrative Agent of a properly executed and delivered Assignment Agreement pursuant to Section 12.04(b). The Borrowers jointly and severally agree to indemnify the Administrative Agent from and against any and all losses, claims, damages and liabilities of whatsoever nature which may be imposed on, asserted against or incurred by the Administrative Agent in performing its duties under this Section 12.16 other than those resulting from the Administrative Agent's willful misconduct or gross negligence. 12.17 JUDGMENT CURRENCY. (a) The Designated Parties' obligations hereunder and under the other Credit Documents to make payments in the applicable Approved Currency -106- 113 (the "Obligation Currency") shall not be discharged or satisfied by any tender or recovery pursuant to any judgment expressed in or converted into any currency other than the Obligation Currency, except to the extent that such tender or recovery results in the effective receipt by the Administrative Agent, the Collateral Agent or the respective Lender of the full amount of the Obligation Currency expressed to be payable to the Administrative Agent, the Collateral Agent or such Lender under this Agreement or the other Credit Documents. If, for the purpose of obtaining or enforcing judgment against any Designated Party in any court or in any jurisdiction, it becomes necessary to convert into or from any currency other than the Obligation Currency (such other currency being hereinafter referred to as the "Judgment Currency") an amount due in the Obligation Currency, the conversion shall be made at the Approved Currency Equivalent, and, in the case of other currencies, the rate of exchange (as quoted by the Administrative Agent or if the Administrative Agent does not quote a rate of exchange on such currency, by a known dealer in such currency designated by the Administrative Agent determined, in each case, as of the Business Day immediately preceding the day on which the judgment is given (such Business Day being hereinafter referred to as the "Judgment Currency Conversion Date"). (b) If there is a change in the rate of exchange prevailing between the Judgment Currency Conversion Date and the date of actual payment of the amount due, the Borrowers covenant and agree to pay, or cause to be paid, such additional amounts, if any (but in any event not a lesser amount) as may be necessary to ensure that the amount paid in the Judgment Currency, when converted at the rate of exchange prevailing on the date of payment, will produce the amount of the Obligation Currency which could have been purchased with the amount of Judgment Currency stipulated in the judgment or judicial award at the rate of exchange prevailing on the Judgment Currency Conversion Date. (c) For purposes of determining the Approved Currency Equivalent or any other rate of exchange for this Section, such amounts shall include any premium and costs payable in connection with the purchase of the Obligation Currency. 12.18 EURO. If at any time that an Alternate Currency Loan is outstanding, the relevant Alternative Currency is fully replaced as the lawful currency of the country that issued such Alternate Currency (the "Issuing Country") by the Euro so that all payments are to be made in the Issuing Country in Euros and not in the Alternate Currency previously the lawful currency of such country then such Alternate Currency Loan shall be automatically converted into a Loan denominated in Euros in a principal amount equal to the amount of Euros into which the principal amount of such Alternate Currency Loan would be converted pursuant to the EMU Legislation and thereafter no further Loans will be available in such Alternate Currency, with the basis of accrual of interest, notices requirements and payment offices with respect to such converted Loans to be that consistent with the convention and practices in the London interbank market for Euro denominated Loans. -107- 114 12.19 COVENANT TO PAY. Each Borrower, as a separate and independent obligation, hereby irrevocably undertakes to pay to BTCo at the first request of BTCo and at any time, an amount equal to the aggregate amount which has theretofore become due and payable by such Borrower to the Lenders under the Credit Agreement and the other Credit Documents, it being understood that (i) the right of BTCo to claim payment from such Borrower hereunder shall be an independent right of BTCo in its individual capacity and (ii) BTCo shall apply the amount so paid as if such amounts were received by BTCo in its capacity as Collateral Agent. 12.20 SHARING. At the time, if any, that the Loans are accelerated pursuant to Section 9, including any automatic acceleration provided therein (an "Acceleration Event"), each USF Lender shall purchase assignments of MCF Commitments (if still in existence) and in any event assignments of MCF Loans and participations in MCF Letter of Credit Outstandings from MCF Lenders, and each MCF Lender shall purchase assignments of USF Commitments (if still in existence) and in any event assignments of USF Loans and participations in USF Letter of Credit Outstandings from USF Lenders so that after giving effect thereto (I) each USF Lender shall have outstanding USF Loans and MCF Loans in an aggregate Principal Amount equal to the Principal Amount of its USF Loans immediately prior to the Acceleration Event, divided between the USF Loans and MCF Loans on the basis of the respective aggregate Principal Amount of the USF Loans and the MCF Loans out standing immediately prior to the Acceleration Event (the "Loan Allocation Basis"), (II) each MCF Lender shall have outstanding USF Loans and MCF Loans in an aggregate Principal Amount equal to the Principal Amount of its MCF Loans immediately prior to the Acceleration Event, divided between the USF Loans and MCF Loans on the Loan Allocation Basis, (III) each USF Lender shall have outstanding participations in the USF Letter of Credit Outstandings and the MCF Letter of Credit Outstandings in an aggregate Principal Amount equal to the aggregate Principal Amount of its participations in the USF Letter of Credit Outstandings immediately prior to the Acceleration Event, divided among each Letter of Credit and each Unpaid Drawing on the basis of the respective Principal Amount of each Letter of Credit and each Unpaid Drawing outstanding immediately prior to the Acceleration Event (the "L/C Allocation Basis") and (IV) each MCF Lender shall have outstanding participations in the USF Letter of Credit Outstandings and the MCF Letter of Credit Outstandings in an aggregate Principal Amount equal to the aggregate Principal Amount of its participation in the MCF Letter of Credit Outstandings immediately prior to the Acceleration Event, divided among each Letter of Credit and each Unpaid Drawing on the L/C Allocation Basis, it being of agreed that all Mandatory Borrowings and the assignments of outstanding Lira Loans to MCF Lenders required by Section 1.01 (D) shall be effected immediately prior to the purchase of assignments by all Lenders pursuant to this Section 12.20. SECTION 13. GUARANTY. 13.01 THE GUARANTY. In order to induce the Lenders to enter into this Agreement and to extend credit hereunder and in recognition of the direct benefits to be -108- 115 received by WLI from the proceeds of the Loans made to the Foreign Borrowers and the issuance of the Letters of Credit issued for the account of the Foreign Borrowers, WLI hereby unconditionally and irrevocably guarantees the full and prompt payment when due, whether upon maturity, acceleration or otherwise, of any and all of the Guaranteed Obligations. This Guaranty is a primary obligation of WLI and not merely a contract of surety. If any of the Guaranteed Obligations becomes due and payable hereunder, WLI unconditionally promises to pay such indebtedness to the Guaranteed Creditors, or order, on demand, together with any and all expenses which may be incurred by the Guaranteed Creditors in collecting any of the Guaranteed Obligations. If claim is ever made upon any Guaranteed Creditor for repayment or recovery of any amount or amounts received in payment or on account of any of the Guaranteed Obligations and any of the aforesaid payees repays all or part of said amount by reason of (i) any judgment, decree or order of any court or administrative body having jurisdiction over such payee or any of its property or (ii) any settlement or compromise of any such claim effected by such payee with any such claimant (including any specified Borrower), then and in such event WLI agrees that any such judgment, decree, order, settlement or compromise shall be binding upon WLI, notwithstanding any revocation of this Guaranty or any other instrument evidencing any liability of the Foreign Borrowers, and WLI shall be and remain liable to the aforesaid payees hereunder for the amount so repaid or recovered to the same extent as if such amount had never originally been received by any such payee. 13.02 BANKRUPTCY. Additionally, WLI unconditionally and irrevocably guarantees the payment of any and all of the Guaranteed Obligations to the Guaranteed Creditors whether or not due or payable by any Foreign Borrowers upon the occurrence in respect of such Foreign Borrower of any of the events specified in Section 9.05, and unconditionally promises to pay such indebtedness on demand, in lawful money of the United States. 13.03 NATURE OF LIABILITY. The liability of WLI hereunder is exclusive and independent of any security for or other guaranty of the Guaranteed Obligations whether executed by WLI, any other guarantor or by any other party, and the liability of WLI hereunder is not affected or impaired by (a) any direction as to application of payment by any Foreign Borrower or by any other party, or (b) any other continuing or other guaranty or undertaking as to the Guaranteed Obligations, or (c) any payment on or in reduction of any such other guaranty or undertaking, or (d) any dissolution, termination or increase, decrease or change in personnel by any Foreign Borrower, or (e) any payment made to the Guaranteed Creditors on the Guaranteed Obligations which any such Guaranteed Creditor repays to any Foreign Borrower pursuant to court order in any bankruptcy, reorganization, arrangement, moratorium or other debtor relief proceeding, and WLI waives any right to the deferral or modification of its obligations hereunder by reason of any such proceeding. 13.04 INDEPENDENT OBLIGATION. The obligations of WLI hereunder are independent of the obligations of any other guarantor, any other party or any Foreign Borrower, and a separate action or actions may be brought and prosecuted against WLI whether or not -109- 116 action is brought against any other guarantor, any other party or any Foreign Borrower and whether or not any other guarantor, any other party or any Foreign Borrower be joined in any such action or actions. WLI waives, to the full extent permitted by law, the benefit of any statute of limitations affecting its liability hereunder or the enforcement hereof. Any payment by any Foreign Borrower or other circumstance which operates to toll any statute of limitations as to such Foreign Borrower shall operate to toll the statute of limitations as to WLI with respect to the Guaranteed Obligations owing by such Foreign Borrower. 13.05 AUTHORIZATION. WLI authorizes the Guaranteed Creditors without notice or demand (except as shall be required by applicable statute and cannot be waived), and without affecting or impairing its liability hereunder, from time to time to: (a) change the manner, place or terms of payment of, and/or change or extend the time of payment of, renew, increase, accelerate or alter, any of the Guaranteed Obligations (including any increase or decrease in the rate of interest thereon), any security therefor, or any liability incurred directly or indirectly in respect thereof, and the Guaranty herein made shall apply to the Guaranteed Obligations as so changed, extended, renewed or altered; (b) take and hold security for the payment of any the Guaranteed Obligations and sell, exchange, release, surrender, realize upon or otherwise deal with in any manner and in any order any property by whomsoever at any time pledged or mortgaged to secure, or howsoever securing, the Guaranteed Obligations or any liabilities (including any of those hereunder) incurred directly or indirectly in respect thereof or hereof, and/or any offset thereagainst; (c) exercise or refrain from exercising any rights against any Foreign Borrower or others or otherwise act or refrain from acting; (d) release or substitute any one or more endorsers, guarantors, any Foreign Borrower or other obligors; (e) settle or compromise any of the Guaranteed Obligations, any security therefor or any liability (including any of those hereunder) incurred directly or indirectly in respect thereof or hereof, and may substitute the payment of all or any part thereof to the payment of any liability (whether due or not) of any Foreign Borrower to its creditors other than the Guaranteed Creditors; (f) apply any sums by whomsoever paid or howsoever realized to any liability or liabilities of any Foreign Borrower to the Guaranteed Creditors regardless of what liability or liabilities of such Borrower remain unpaid; -110- 117 (g) consent to or waive any breach of, or any act, omission or default under, this Agreement, any other Credit Document or any of the instruments or agreements referred to herein or therein, or otherwise amend, modify or supplement this Agreement, any other Credit Document or any of such other instruments or agreements; and/or (h) take any other action which would, under otherwise applicable principles of common law, give rise to a legal or equitable discharge of WLI from its liabilities under this Guaranty. 13.06 RELIANCE. It is not necessary for the Guaranteed Creditors to inquire into the capacity or powers of any Foreign Borrower or the officers, directors, partners or agents acting or purporting to act on their behalf, and any Guaranteed Obligations made or created in reliance upon the professed exercise of such powers shall be guaranteed hereunder. 13.07 SUBORDINATION. Any of the indebtedness of each Foreign Borrower now or hereafter owing to WLI is hereby subordinated to the Guaranteed Obligations of such Foreign Borrower; and if the Administrative Agent so requests at a time when an Event of Default exists, all such indebtedness of each Foreign Borrower to WLI shall be collected, enforced and received by WLI for the benefit of the Guaranteed Creditors and be paid over to the Administrative Agent on behalf of the Guaranteed Creditors on account of the Guaranteed Obligations, but without affecting or impairing in any manner the liability of WLI under the other provisions of this Guaranty. Prior to the transfer by WLI of any note or negotiable instrument evidencing any of the indebtedness of any Foreign Borrower to WLI, shall mark such note or negotiable instrument with a legend that the same is subject to this subordination. Without limiting the generality of the foregoing, WLI hereby agrees with the Guaranteed Creditors that it will not exercise any right of subrogation which it may at any time otherwise have as a result of this Guaranty (whether contractual, under Section 509 of the Bankruptcy Code or otherwise) until all Guaranteed Obligations have been irrevocably paid in full in cash. 13.08 WAIVER. (a) WLI waives any right (except as shall be required by applicable statute and cannot be waived) to require any Guaranteed Creditor (i) proceed against any Foreign Borrower, any other guarantor or any other party, (ii) proceed against or exhaust any security held by any Foreign Borrower, any other guarantor or any other party or (iii) pursue any other remedy in any Guaranteed Creditor's power whatsoever. WLI waives any defense based on or arising out of any defense of any Foreign Borrower, any other guarantor or any other party, other than payment in full of the Guaranteed Obligations, based on or arising out the disability of any Foreign Borrower, any other guarantor or any other party, or the unenforceability of the Guaranteed Obligations or any part thereof from any cause, or the cessation from any cause of the liability of any Foreign Borrower than payment in full of the Guaranteed Obligations. The Guaranteed Creditors may, at their election, foreclose on any security held by the Collateral Agent or any other Guaranteed Creditor by one or more judicial -111- 118 or nonjudicial sales, whether or not every aspect of any such sale is commercially reasonable (to the extent such sale is permitted by applicable law), or exercise any other right or remedy the Guaranteed Creditors may have against any Foreign Borrower or any other party, or any security, without affecting or impairing in any way the liability of WLI hereunder except to the extent the Guaranteed Obligations have been paid. (b) WLI waives all presentments, demands for performance, protests and notices, including, without limitation, notices of nonperformance, notices of protest, notices of dishonor, notices of acceptance of this Guaranty, and notices of the existence, creation or incurring of new or additional Guaranteed Obligations. WLI assumes all responsibility for being and keeping itself informed of each Foreign Borrower's financial condition and assets, and of all other circumstances, bearing upon the risk of nonpayment of the Guaranteed Obligations and the nature, scope and extent of the risks which WLI assumes and incurs hereunder, and agrees that the Guaranteed Creditors shall have no duty to advise WLI of information known to them regarding such circumstances or risks. 13.09 ENFORCEMENT. The Guaranteed Creditors agree that this Guaranty may be enforced only by the action of the Administrative Agent acting upon the instructions of the Required Lenders and no Guaranteed Creditor shall have any right individually to seek to enforce or to enforce this Guaranty, it being understood and agreed that such rights and remedies may be exercised by the Administrative Agent for the benefit of the Guaranteed Creditors upon the terms of this Guaranty and the Security Documents. * * * -112- 119 IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of this Agreement to be duly executed and delivered as of the date first above written. Wang Laboratories, Inc. WANG LABORATORIES, INC., 600 Technology Park Dr. as Borrower Billerica, MA 01821-4130 Tel: (978) 957-5000 Fax: (978) 957-3930 By ---------------------------------------------------------- Attention: General Counsel Name: cc: Treasurer Title: Wang Nederland B.V. WANG NEDERLAND B.V., c/o Wang Laboratories, Inc. as Borrower 600 Technology Park Dr. Tel: (978) 957-5000 Fax: (978) 957-3930 By ---------------------------------------------------------- Attention: General Counsel Name: cc: Treasurer Title: 120 Olivetti Solutions SPA, OLIVETTI SOLUTIONS SPA, c/o Wang Laboratories, Inc. as Borrower 600 Technology Park Dr. Tel: (978) 957-5000 Fax: (978) 957-3930 By ---------------------------------------------------------- Attention: General Counsel Name: cc: Treasurer Title: 121 BANKERS TRUST COMPANY, Individually and as Administrative Agent By ------------------------------------- Name: Title: 122 NATIONAL WESTMINSTER BANK PLC, Individually and as Syndication Agent By ------------------------------------- Name: Title: 123 LEHMAN COMMERCIAL PAPER INC., Individually and as Documentation Agent By ------------------------------------- Name: Title: 124 BANKERS TRUST INTERNATIONAL PLC As Lira Lender By ------------------------------------- Name: Title: 125 ANNEX I COMMITMENTS
USF MCF Lender Commitment Commitment ------ ---------- ---------- Bankers Trust Company $ 82,500,000 $192,500,000 National Westminster Bank Plc 45,000,000 105,000,000 Lehman Commercial Paper Inc. 22,500,000 52,500,000 Total: $150,000,000 $350,000,000 ============ ============
126 ANNEX II LENDER ADDRESSES Bankers Trust Company 130 Liberty Street New York, New York 10006 Attention: Andrew Keith Tel. No.: 212-250-8617 Fax No.: 212-250-7218 National Westminster Bank Plc P.O. Box 122684 Sixth Floor One Princess Street London EC2R 8PB Attention: John Roche Tel. No.: 011-44-171-390-1250 Fax No.: 011-44-171-390-1775 Lehman Commercial Paper Inc. Three World Financial Center 10th Floor New York, New York 10285 Attention: Michele Swanson Tel. No.: 212-526-0330 Fax No.: 212-528-0819 127 ANNEX IV Part I: MATERIAL SUBSIDIARIES Australia: Wang Australia Pty Ltd Olivetti Australia Pty Ltd (collectively, "Australian Subsidiaries") Belgium: Wang Europe S.A. N.V. Olsy Belgium S.A. N.V. (collectively, "Belgian Subsidiaries") Canada: Wang Canada Limited Olsy Canada Ltd. Denmark: Olsy S.A. (Denmark) ("Danish Subsidiary") France: Wang France S.A. Olsy France S.A. (collectively, "French Subsidiaries") Germany: Wang Germany GmbH Olivetti GmbH (collectively, "German Subsidiaries") Italy: Olivetti Solutions SpA ("Italian Borrower") Japan: Olivetti Corp. Japan Netherlands: Wang Nederland B.V. ("EU Holdco") Olsy Nederland B.V. (collectively, "Dutch Subsidiaries") Spain: Olivetti Espana S.A. ("Spanish Subsidiary") 128 ANNEX IV Page 2 United Kingdom: Wang I-NET Ltd. Olsy UK Ltd. (collectively, "UK Subsidiaries") United States: Olsy North America Inc. [I-NET] [WGSI] [Bannex] [All other U.S. subsidiaries that are not Immaterial Subsidiaries] Part II: MATERIAL SUBSIDIARIES PARTY TO FOREIGN GUARANTIES Australian Subsidiaries (unless waived by Agents) Belgian Subsidiaries Italian Borrower Dutch Subsidiaries Spanish Subsidiary UK Subsidiaries Part III: MATERIAL SUBSIDIARIES PARTY TO FOREIGN SECURITY DOCUMENTS (in support of its Guaranty and EU Intercompany Note unless otherwise indicated) Australian Subsidiaries (in support of Guaranty only) unless waived by Agents Belgian Subsidiaries Danish Subsidiary (in support of EU Intercompany Note only) 129 ANNEX IV Page 2 Italian Borrower (in support of Lira Note and subject to review of any additional cost, its Guaranty) EU Holdco (in support of its MCF Loans and its Guaranty) Olsy Nederland B.V. Spanish Subsidiary UK Subsidiaries -----END PRIVACY-ENHANCED MESSAGE-----