Revolving Credit Agreement

REVOLVING CREDIT AGREEMENT


among


AFFILIATED COMPUTER SERVICES, INC. AND OTHER BORROWERS FROM TIME TO
TIME PARTY HERETO,
Borrowers


WELLS FARGO BANK, NATIONAL ASSOCIATION,
Co-Lead Arranger and Sole Book Runner


JPMORGAN CHASE BANK,
Co-Lead Arranger


WELLS FARGO BANK TEXAS, NATIONAL ASSOCIATION
Administrative Agent


JPMORGAN CHASE BANK AND BANK ONE, N.A.,
Co-Syndication Agents


and


KEY CORPORATE CAPITAL, INC. AND THE BANK OF TOKYO-MITSUBISHI, LTD.
Co-Documentation Agents,


The Senior Managing Agent and Managing Agents defined herein


and


THE LENDERS NAMED HEREIN,
Lenders


$875,000,000


DATED AS OF SEPTEMBER 12, 2002


TABLE OF CONTENTS


Page SECTION 1 DEFINITIONS AND TERMS................................................................................1
1.1 DEFINITIONS............................................................................................1
1.2 NUMBER AND GENDER OF WORDS; OTHER REFERENCES..........................................................16
1.3 ACCOUNTING PRINCIPLES.................................................................................16
1.4 CURRENCY REFERENCES...................................................................................16 SECTION 2 BORROWING PROVISIONS................................................................................16
2.1 REVOLVER FACILITY.....................................................................................16
2.2 LC SUBFACILITY........................................................................................17
2.3 SWING LINE SUBFACILITY................................................................................20
2.4 INCREASE IN REVOLVER COMMITMENT.......................................................................21
2.5 TERMINATIONS OR REDUCTIONS OF COMMITMENTS.............................................................22
2.6 BORROWING PROCEDURE...................................................................................23 SECTION 3 TERMS OF PAYMENT....................................................................................24
3.1 LOAN ACCOUNTS, NOTES, AND PAYMENTS....................................................................24
3.2 INTEREST AND PRINCIPAL PAYMENTS.......................................................................24
3.3 PREPAYMENTS...........................................................................................25
3.4 INTEREST OPTIONS......................................................................................25
3.5 QUOTATION OF RATES....................................................................................26
3.6 DEFAULT RATE..........................................................................................26
3.7 INTEREST RECAPTURE....................................................................................26
3.8 INTEREST CALCULATIONS.................................................................................26
3.9 MAXIMUM RATE..........................................................................................26
3.10 INTEREST PERIODS......................................................................................27
3.11 CONVERSIONS...........................................................................................27
3.12 ORDER OF APPLICATION..................................................................................27
3.13 SHARING OF PAYMENTS, ETC..............................................................................28
3.14 OFFSET................................................................................................29
3.15 BOOKING BORROWINGS....................................................................................29 SECTION 4 CHANGE IN CIRCUMSTANCES.............................................................................29
4.1 INCREASED COST AND REDUCED RETURN.....................................................................29
4.2 LIMITATION ON TYPES OF LOANS..........................................................................30
4.3 ILLEGALITY............................................................................................30
4.4 TREATMENT OF AFFECTED LOANS...........................................................................31
4.5 COMPENSATION..........................................................................................31
4.6 TAXES.................................................................................................31
4.7 REMOVAL OF LENDERS....................................................................................33 SECTION 5 FEES................................................................................................34
5.1 TREATMENT OF FEES.....................................................................................34
5.2 FEES OF ADMINISTRATIVE AGENT AND ARRANGER.............................................................34
5.3 FACILITY FEE..........................................................................................34
5.4 UTILIZATION FEE.......................................................................................34
5.5 LC FEES...............................................................................................35 SECTION 6. SECURITY; GUARANTIES................................................................................35
6.1 BORROWERS, GUARANTIES, AND FOREIGN STOCK PLEDGES......................................................35
6.2 RELEASE OF BORROWERS, GUARANTIES, AND COLLATERAL......................................................35
6.3 CONTROL; LIMITATION OF RIGHTS.........................................................................36 SECTION 7 CONDITIONS PRECEDENT................................................................................36
7.1 CONDITIONS PRECEDENT TO CLOSING.......................................................................36
7.2 CONDITIONS PRECEDENT TO EACH BORROWING................................................................36


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7.3 CONDITIONS PRECEDENT TO ADDITIONAL BORROWERS, GUARANTORS, OR FOREIGN STOCK PLEDGES....................36 SECTION 8 REPRESENTATIONS AND WARRANTIES......................................................................37
8.1 PURPOSE OF CREDIT FACILITY............................................................................37
8.2 EXISTENCE, GOOD STANDING, AUTHORITY, AND AUTHORIZATIONS...............................................37
8.3 SUBSIDIARIES; CAPITAL STOCK...........................................................................37
8.4 AUTHORIZATION AND CONTRAVENTION.......................................................................37
8.5 BINDING EFFECT........................................................................................37
8.6 FINANCIAL STATEMENTS..................................................................................38
8.7 LITIGATION, CLAIMS, INVESTIGATIONS....................................................................38
8.8 TAXES.................................................................................................38
8.9 ENVIRONMENTAL MATTERS.................................................................................38
8.10 EMPLOYEE BENEFIT PLANS................................................................................38
8.11 PROPERTIES; LIENS.....................................................................................39
8.12 GOVERNMENT REGULATIONS................................................................................39
8.13 INTELLECTUAL PROPERTY.................................................................................39
8.14 COMPLIANCE WITH LAWS..................................................................................39
8.15 REGULATION U..........................................................................................39
8.16 FULL DISCLOSURE.......................................................................................39
8.17 NO DEFAULT............................................................................................39
8.18 CONTINGENT EARN-OUT PAYMENTS..........................................................................39 SECTION 9 COVENANTS...........................................................................................40
9.1 USE OF PROCEEDS.......................................................................................40
9.2 BOOKS AND RECORDS.....................................................................................40
9.3 ITEMS TO BE FURNISHED.................................................................................40
9.4 INSPECTIONS...........................................................................................41
9.5 TAXES.................................................................................................41
9.6 PAYMENT OF OBLIGATIONS................................................................................41
9.7 MAINTENANCE OF EXISTENCE, ASSETS, AND BUSINESS........................................................41
9.8 INSURANCE.............................................................................................42
9.9 PRESERVATION AND PROTECTION OF RIGHTS.................................................................42
9.10 EMPLOYEE BENEFIT PLANS................................................................................42
9.11 ENVIRONMENTAL LAWS....................................................................................42
9.12 DEBT AND GUARANTIES...................................................................................42
9.13 LIENS.................................................................................................42
9.14 TRANSACTIONS WITH AFFILIATES..........................................................................44
9.15 COMPLIANCE WITH LAWS AND DOCUMENTS....................................................................44
9.16 ACCOUNTING METHODS....................................................................................44
9.17 GOVERNMENT REGULATIONS................................................................................44
9.18 RESTRICTIONS ON SUBSIDIARIES..........................................................................44
9.19 SALE OF ASSETS........................................................................................44
9.20 ACCOUNTS RECEIVABLE FINANCING.........................................................................45
9.21 MERGERS AND DISSOLUTIONS..............................................................................45
9.22 FINANCIAL COVENANTS...................................................................................45
9.23 ACQUISITIONS..........................................................................................45 SECTION 10 DEFAULT.............................................................................................45
10.1 PAYMENT OF OBLIGATION.................................................................................45
10.2 COVENANTS.............................................................................................45
10.3 DEBTOR RELIEF.........................................................................................46
10.4 JUDGMENTS AND ATTACHMENTS.............................................................................46
10.5 GOVERNMENT ACTION.....................................................................................46
10.6 MISREPRESENTATION.....................................................................................46


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10.7 CHANGE OF CONTROL.....................................................................................46
10.8 DEFAULT UNDER OTHER DEBT AND AGREEMENTS...............................................................46
10.9 EMPLOYEE BENEFIT PLANS................................................................................47
10.11 VALIDITY AND ENFORCEABILITY OF LOAN DOCUMENTS.........................................................47 SECTION 11 RIGHTS AND REMEDIES.................................................................................47
11.1 REMEDIES UPON DEFAULT.................................................................................47
11.2 COMPANY WAIVERS; NO RELEASE...........................................................................48
11.3 PERFORMANCE BY ADMINISTRATIVE AGENT...................................................................48
11.4 DELEGATION OF DUTIES AND RIGHTS.......................................................................48
11.5 NOT IN CONTROL........................................................................................48
11.6 COURSE OF DEALING.....................................................................................48
11.7 CUMULATIVE RIGHTS.....................................................................................49
11.8 APPLICATION OF PROCEEDS...............................................................................49
11.9 CERTAIN PROCEEDINGS...................................................................................49
11.10 EXPENDITURES BY LENDERS...............................................................................49
11.11 INDEMNIFICATION.......................................................................................49 SECTION 12 AGREEMENT AMONG LENDERS.............................................................................50
12.1 ADMINISTRATIVE AGENT; LC ISSUERS......................................................................50
12.2 EXPENSES..............................................................................................52
12.3 PROPORTIONATE ABSORPTION OF LOSSES....................................................................52
12.4 DELEGATION OF DUTIES; RELIANCE........................................................................52
12.5 LIMITATION OF LIABILITY...............................................................................52
12.6 DEFAULT; COLLATERAL...................................................................................53
12.7 LIMITATION OF LIABILITY...............................................................................55
12.8 RELATIONSHIP OF LENDERS...............................................................................56
12.9 BENEFITS OF AGREEMENT.................................................................................56
12.10 AGENTS................................................................................................56
12.11 OBLIGATIONS SEVERAL...................................................................................56 SECTION 13 MISCELLANEOUS.......................................................................................56
13.1 HEADINGS..............................................................................................56
13.2 NONBUSINESS DAYS......................................................................................56
13.3 COMMUNICATIONS; FACSIMILE COPIES......................................................................56
13.4 FORM AND NUMBER OF DOCUMENTS..........................................................................57
13.5 SURVIVAL..............................................................................................57
13.6 GOVERNING LAW.........................................................................................57
13.7 INVALID PROVISIONS....................................................................................58
13.8 ENTIRETY..............................................................................................58
13.9 JURISDICTION; VENUE; SERVICE OF PROCESS; JURY TRIAL...................................................58
13.10 AMENDMENTS, CONSENTS, CONFLICTS, AND WAIVERS..........................................................59
13.11 MULTIPLE COUNTERPARTS.................................................................................60
13.12 SUCCESSORS AND ASSIGNS; ASSIGNMENTS AND PARTICIPATIONS................................................60
13.13 DISCHARGE ONLY UPON PAYMENT IN FULL; REINSTATEMENT IN CERTAIN CIRCUMSTANCES...........................62
13.14 CONFIDENTIALITY.......................................................................................63
13.15 DESIGNATED SENIOR INDEBTEDNESS........................................................................63


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SCHEDULES AND EXHIBITS


Schedule 2.1 - Lenders and Commitments Schedule 2.2 - Existing Letters of Credit Schedule 7.1 - Conditions Precedent to Closing Schedule 7.3 - Condition Precedent to Additional Borrowers Schedule 8.7 - Litigation Schedule 8.18 - Contingent "Earn-Out" Payments


Exhibit A-1 - Form of Revolver Note Exhibit A-2 - Form of Swing Line Note Exhibit B-1 - Form of Borrowing Notice Exhibit B-2 - Form of Conversion Notice Exhibit B-3 - Form of LC Request Exhibit C - Form of Guaranty Exhibit D - Form of Compliance Certificate Exhibit E - Form of Assignment and Acceptance Agreement Exhibit F - Form of Contribution Agreement Exhibit G - Forms of Release Exhibit H - Form of Supplemental Document


iv


REVOLVING CREDIT AGREEMENT


THIS REVOLVING CREDIT AGREEMENT is entered into as of September __ , 2002, among AFFILIATED COMPUTER SERVICES, INC. a Delaware corporation ("ACS"), other Borrowers from time to time party hereto (collectively with ACS, "BORROWERS"), Lenders (hereinafter defined), WELLS FARGO BANK TEXAS, NATIONAL ASSOCIATION, as Administrative Agent (hereinafter defined), for itself and the other Lenders, Key Corporate Capital, Inc. and The Bank of Tokyo-Mitsubishi, Ltd., as Co-Documentation Agents (hereinafter defined), JPMorgan Chase Bank and Bank One, N.A., as Co-Syndication Agents (hereinafter defined), and Wachovia Bank, National Association, as Senior Managing Agent.


RECITALS


ACS has requested that Lenders extend a revolving credit facility to Borrowers not to exceed a total outstanding principal amount of $875,000,000 (subject to increase pursuant to SECTION 2.4) at any time (with certain subfacilities for letters of credit and swing-line advances) to be used by Borrowers as provided in SECTION 8.1. Lenders are willing to extend the requested credit facility on the terms and conditions of this agreement.


ACCORDINGLY, for adequate and sufficient consideration, ACS, other Borrowers, Lenders, and Agents agree as follows:


SECTION 1 DEFINITIONS AND TERMS.


1.1 DEFINITIONS. As used herein:


ACQUISITION means any transaction or series of related transactions for the purpose of, or resulting in, directly or indirectly, (a) the acquisition by any Company of all or substantially all of the assets of a Person or of any business or division of a Person, (b) the acquisition by any Company of more than 50% of any class of Voting Stock (or similar ownership interests) of any Person, or (c) a merger, consolidation, amalgamation, or other combination by any Company with another Person if a Company is the surviving entity; provided that, in any merger, consolidation, amalgamation, or other combination involving ACS, ACS must be the surviving entity.


ACS means Affiliated Computer Services, Inc., a Delaware corporation.


ADJUSTED EBITDA means EBITDA of the Companies on a consolidated basis adjusted (a) as permitted and in accordance with, Article 11 of Regulation S-X of the Securities Act of 1933 and (b) to give effect to any Acquisitions and divestitures of or by the Companies during the applicable Rolling Period as if such transactions had occurred on the first day of such Rolling Period regardless of whether the effect is positive or negative.


ADJUSTED EURODOLLAR RATE means, for any Eurodollar Rate Borrowing for any Interest Period therefor, the rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) determined by Administrative Agent to be equal to the quotient obtained by dividing (a) the Eurodollar Rate for such Eurodollar Rate Borrowing for such Interest Period by (b) 1 minus the Reserve Requirement for such Eurodollar Rate Borrowing for such Interest Period.


ADMINISTRATIVE AGENT means Wells Fargo Bank Texas, National Association, and its permitted successors or assigns as "Administrative Agent" for Lenders under the Loan Documents.


1 ACS CREDIT AGREEMENT


ADMINISTRATIVE QUESTIONNAIRE means an Administrative Questionnaire in a form supplied by Administrative Agent.


AFFILIATE of any Person means any other Person who directly or indirectly Controls, or is Controlled by, or is under common Control with, such Person.


AGENTS means, collectively, Administrative Agent, Co-Syndication Agents, Co-Documentation Agents, and Senior Managing Agent.


ALTERNATIVE CURRENCY means Canadian Dollars, Pounds Sterling, Euros, or any other currency that Administrative Agent has notified Borrowers, upon their request, that Administrative Agent and Required Lenders have determined to be freely transferable and convertible into Dollars, so long as (a) such currency is dealt with in the London interbank deposit market, (b) such currency is freely transferable and convertible into Dollars in the London foreign exchange market, (c) no Governmental Authority in the country of issue of such currency is required to permit use of such currency by any applicable LC Issuer for issuing LCs or honoring drafts presented under LCs in such currency, and (d) there is no restriction or prohibition under any applicable Law against the use of such currency for such purposes. If, after the issuance of an LC in an Alternative Currency, the Alternative Currency denominated in such LC ceases to be lawful currency freely-convertible into Dollars and is replaced by the Euro, then thereafter the Alternative Currency for purposes of such LC shall be the Euro.


AGREEMENT means this Revolving Credit Agreement (as the same may hereafter be amended, modified, supplemented, or restated from time to time in accordance with the terms hereof).


APPLICABLE LENDING OFFICE means, for each Lender and for each Type of Borrowing, the "Lending Office" of such Lender (or an affiliate of such Lender) designated on SCHEDULE 2.1 attached hereto or such other office that such Lender (or an affiliate of such Lender) may from time to time specify to Administrative Agent and Borrowers by written notice in accordance with the terms hereof.


APPLICABLE MARGIN means, from time to time, the following percentage per annum, based upon the Debt Rating as set forth below:


APPLICABLE MARGIN PRICING LEVEL FROM DEBT RATINGS EURODOLLAR RATE HIGHEST TO LOWEST S&P/MOODY'S FACILITY FEE BORROWINGS UTILIZATION FEE ------------------ ------------------ --------------- ----------------- ---------------
1 A-/A3 or better 0.150% 0.375% 0.100%
2 BBB+/Baa1 0.175% 0.575% 0.125%
3 BBB/Baa2 0.200% 0.775% 0.150%
4 BBB-/Baa3 0.250% 0.925% 0.200%
5 Worse than 0.250% 1.250% 0.250%
BBB-/Baa3 or Not
Rated


For purposes of the foregoing: (a) if the Debt Rating issued by Moody's and the Debt Rating issued by S&P shall fall within different Pricing Levels (but not more than one (1) Pricing Level apart), then the Applicable Margin shall be determined by reference to the higher Pricing Level (e.g., if the Debt Rating issued by S&P is in Pricing Level 1 and the Debt Rating issued by Moody's is in Pricing Level 2, then the Applicable Margin shall be determined by reference to Pricing Level 1); (b) if the Debt Rating issued by Moody's and the Debt Rating issued by S&P shall fall within different Pricing Levels (and by more than


2 ACS CREDIT AGREEMENT


one (1) Pricing Level), then the Applicable Margin shall be determined by reference to the Pricing Level that is one (1) Pricing Level higher than the lower Pricing Level (e.g., if the Debt Rating issued by S&P is in Pricing Level 1 and the Debt Rating issued by Moody's is in Pricing Level 4, then the Applicable Margin shall be determined by reference to Pricing Level 3); and (c) if either Moody's or S&P no longer publishes ratings and ACS and Administrative Agent cannot agree on another ratings agency to replace Moody's or S&P, as the case may be, then the Debt Rating issued by Moody's or the Debt Rating issued by S&P which is still being published, as the case may be, shall be deemed to be the Debt Rating.


Initially, the Applicable Margin shall be determined based upon the Debt Rating specified in the certificate delivered pursuant to SCHEDULE 7.1, ITEM 19. Thereafter, each change in the Applicable Margin resulting from a publicly announced change in the Debt Rating shall be effective, in the case of an upgrade, commencing on the date of the public announcement thereof so long as Borrowers have delivered to Administrative Agent notice thereof pursuant to SECTION 9.3(c)(vi) and ending on the date immediately preceding the effective date of the next such change and, in the case of a downgrade, commencing on the date of the public announcement thereof and ending on the date immediately preceding the effective date of the next such change.


ARRANGER means Wells Fargo Bank, National Association and its successors and assigns, in its capacity as co-lead arranger and sole book manager under the Loan Documents.


ASSIGNMENT AND ACCEPTANCE is defined in SECTION 13.12(b)(iv).


ATTRIBUTABLE DEBT means, with respect to any Synthetic Lease, as of any date of determination, the total obligation (discounted to present value at the rate of interest implicit in the lease included in such transaction) of the lessee for rental payments (other than amounts required to be paid on acc ...