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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
SCHEDULE 14D-1
TENDER OFFER STATEMENT PURSUANT TO SECTION 14(d)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
AND
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
------------------------
BDM INTERNATIONAL, INC.
(Name of Subject Company)
SYSTEMS ACQUISITION INC.
A WHOLLY OWNED SUBSIDIARY OF
TRW INC.
(Bidders)
COMMON STOCK, PAR VALUE $0.01 PER SHARE
(Title of Class of Securities)
05537W-20-9
(Cusip Number of Class of Securities)
WILLIAM B. LAWRENCE, ESQ.
EXECUTIVE VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
TRW INC.
1900 RICHMOND ROAD
CLEVELAND, OHIO 44124
TELEPHONE: (216) 291-7230
(Name, Address and Telephone Number of Person Authorized to Receive Notices
and Communications on Behalf of Bidders)
COPY TO:
JONES, DAY, REAVIS & POGUE
599 LEXINGTON AVENUE
NEW YORK, NEW YORK 10022
(212) 326-3939
ATTENTION: ROBERT A. PROFUSEK, ESQ.
NOVEMBER 20, 1997
(Date of Event Which Requires Filing Statement on Schedule 13D)
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CALCULATION OF FILING FEE
TRANSACTION VALUATION* AMOUNT OF FILING FEE**
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$925,921,014 $185,184
</TABLE>
*This amount assumes the purchase, pursuant to the Offer to Purchase, of all
the 29,723,431 outstanding shares of Common Stock ("Shares") of the Subject
Company outstanding as of November 19, 1997 and 1,663,722 Shares issuable upon
exercise of certain options at $29.50 per Share.
**1/50 of 1% of Transaction Valuation.
[ ] Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the Form
or Schedule and the date of its filing.
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Amount Previously Paid: None
Form or Registration No.: Not applicable
Filing Party: Not applicable
Date Filed: Not applicable
</TABLE>
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CUSIP NO. 05537W-20-9 14D-1
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1) Names of Reporting Persons; S.S. or I.R.S. Identification Nos. of Above Persons
TRW Inc. ("Parent")
I.R.S. No. 34-0575430
2) Check the Appropriate Box if a Member of a Group
(a) [X]
(b) [ ]
3) SEC USE ONLY
4) Source of Funds
WC, BK, OO
5) Check Box if Disclosure of Legal Proceedings is Required Pursuant to Item 2(e) or
2(f) [X]
6) Citizenship or Place of Organization
Ohio
7) Aggregate Amount Beneficially Owned by Each Reporting Person
7,660,000
8) Check Box if the Aggregate Amount in Row (7) Excludes Certain Shares [ ]
9) Percent of Class Represented by Amount in Row (7)
25.8% of the Shares issued and outstanding as of November 19, 1997.
10) Type of Reporting Person
CO, GM
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CUSIP NO. 05537W-20-9 14D-1
<TABLE>
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1) Names of Reporting Persons; S.S. or I.R.S. Identification Nos. of Above Persons
Systems Acquisition Inc. ("Purchaser")
I.R.S. No. Applied for
2) Check the Appropriate Box if a Member of a Group
(a) [X]
(b) [ ]
3) SEC USE ONLY
4) Source of Funds
WC, AF
5) Check Box if Disclosure of Legal Proceedings is Required Pursuant to Item 2(e) or
2(f) [ ]
6) Citizenship or Place of Organization
Delaware
7) Aggregate Amount Beneficially Owned by Each Reporting Person
7,660,000
8) Check Box if the Aggregate Amount in Row (7) Excludes Certain Shares [ ]
9) Percent of Class Represented by Amount in Row (7)
25.8% of the Shares issued and outstanding as of November 19, 1997.
10) Type of Reporting Person
CO, GM
</TABLE>
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This Tender Offer Statement on Schedule 14D-1 relates to the offer by
Systems Acquisition Inc. ("Purchaser"), a wholly owned subsidiary of TRW Inc.
("Parent"), to purchase all the outstanding shares of Common Stock (the
"Shares") of BDM International, Inc. (the "Company"), at a purchase price of
$29.50 per Share, net to the seller in cash without interest thereon (the "Per
Share Amount"), upon the terms and subject to the conditions set forth in the
Offer to Purchase, dated November 26, 1997 (the "Offer to Purchase"), and in the
related Letter of Transmittal (which, together with the Offer to Purchase, as
amended from time to time, constitute the "Offer"). Copies of the Offer to
Purchase and the Letter of Transmittal are attached hereto as Exhibits (a)(1)
and (a)(2), respectively.
Item 1. Security and Subject Company.
(a) The name of the subject company is BDM International, Inc., a Delaware
corporation. The address of the Company's principal executive offices is 1501
BDM Way, McLean, Virginia 22101-3204.
(b) The exact title of the class of equity securities being sought in the
Offer is Common Stock, par value $0.01 per share, of the Company. The
information set forth in the Introduction of the Offer to Purchase is
incorporated herein by reference.
(c) The information set forth in Section 6 ("Price Range of Shares;
Dividends") of the Offer to Purchase is incorporated herein by reference.
Item 2. Identity and Background.
(a)-(d) and (g) This Statement is filed on behalf of Parent and Purchaser.
The principal offices of Parent and Purchaser are located at 1900 Richmond Road,
Cleveland, Ohio 44124. The information set forth in Section 8 ("Certain
Information Concerning Parent and Purchaser") of the Offer to Purchase and in
Schedule I thereto is incorporated herein by reference. Parent is incorporated
under the laws of the State of Ohio and Purchaser is incorporated under the laws
of the State of Delaware.
(e) During the last five years neither Parent, Purchaser nor, to the best
knowledge of Parent and Purchaser, any of the persons listed in Schedule I to
the Offer to Purchase has been convicted in a criminal proceeding (excluding
traffic violations or similar misdemeanors).
(f) During the last five years, neither Parent, Purchaser nor, to the best
knowledge of Parent and Purchaser, any of the persons listed in Schedule I to
the Offer to Purchase was a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such proceeding
was or is subject to a judgment, decree or final order enjoining future
violations of, or prohibiting activities subject to, federal or state securities
laws or finding any violation of such laws.
Item 3. Past Contacts, Transactions or Negotiations with the Subject Company.
(a)-(b) The information set forth in the Introduction, in Section 10
("Background of the Offer") and Section 11 ("Purpose; Merger Agreement;
Stockholders Agreement; Vote Required to Approve the Merger; Appraisal Rights;
Plans for the Company; Going Private Transactions") of the Offer to Purchase is
incorporated herein by reference.
Item 4. Source and Amount of Funds or Other Consideration.
(a)-(b) The information set forth in Section 9 ("Source and Amount of
Funds") of the Offer to Purchase is incorporated herein by reference.
(c) Not applicable.
Item 5. Purpose of the Tender Offer and Plans or Proposals of the Bidder.
(a)-(g) The information set forth in the Introduction and in Section 10
("Background of the Offer"), Section 11 ("Purpose; Merger Agreement;
Stockholders Agreement; Vote Required to Approve the Merger; Appraisal Rights;
Plans for the Company; Going Private Transactions"), Section 13 ("Effect of the
Offer on the
2
<PAGE> 5
Market for Shares, Nasdaq Listing and Exchange Act Registration") and Section 12
("Dividends and Distributions") of the Offer to Purchase is incorporated herein
by reference.
Item 6. Interest in Securities of the Subject Company.
(a) and (b) The information set forth in the Introduction, Section 8
("Certain Information Concerning Parent and Purchaser"), Section 11 ("Purpose;
Merger Agreement; Stockholders Agreement; Vote Required to Approve the Merger;
Appraisal Rights; Plans for the Company; Going Private Transactions") and
Schedule I to the Offer to Purchase is incorporated herein by reference.
Item 7. Contracts, Arrangements, Understandings or Relationships with Respect to
the Subject Company's Securities.
The information set forth in the Introduction, Section 8 ("Certain
Information Concerning Parent and Purchaser"), Section 10 ("Background of the
Offer") and Section 11 ("Purpose; Merger Agreement; Stockholders Agreement; Vote
Required to Approve the Merger; Appraisal Rights; Plans for the Company; Going
Private Transactions") of the Offer to Purchase is incorporated herein by
reference.
Item 8. Persons Retained, Employed or to be Compensated.
The information set forth in the Introduction, Section 10 ("Background of
the Merger"), Section 16 ("Fees and Expenses") and Section 17 ("Miscellaneous")
of the Offer to Purchase is incorporated herein by reference.
Item 9. Financial Statements of Certain Bidders.
The information set forth in Section 8 ("Certain Information Concerning
Parent and Purchaser") of the Offer to Purchase is incorporated herein by
reference.
The incorporation by reference herein of the above-referenced financial
information does not constitute an admission that such information is material
to a decision by a stockholder of the Company whether to sell, tender or hold
Shares being sought in the Offer.
Item 10. Additional Information.
(a) The information set forth in the Introduction and in Section 8
("Certain Information Concerning Parent and Purchaser"), Section 10 ("Background
of the Offer") and Section 11 ("Purpose; Merger Agreement; Stockholders
Agreement; Vote Required to Approve the Merger; Appraisal Rights; Plans for the
Company; Going Private Transactions") of the Offer to Purchase is incorporated
herein by reference.
(b) and (c) The information set forth in Section 11 ("Purpose; Merger
Agreement; Stockholders Agreement; Vote Required to Approve the Merger;
Appraisal Rights; Plans for the Company; Going Private Transactions"), Section
13 ("Effect of the Offer on the Market for Shares, Nasdaq Listing and Exchange
Act Registration") and Section 15 ("Certain Legal Matters and Regulatory
Approvals") of the Offer to Purchase is incorporated herein by reference.
(d) The information set forth in Section 13 ("Effect of the Offer on the
Market for Shares, Nasdaq Listing and Exchange Act Registration") and Section 15
("Certain Legal Matters and Regulatory Approvals") of the Offer to Purchase is
incorporated herein by reference.
(e) Not applicable.
(f) The information set forth in the Offer to Purchase and the Letter of
Transmittal is incorporated herein by reference in its entirety.
3
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Item 11. Material to be Filed as Exhibits.
EXHIBIT INDEX
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NO. DOCUMENT PG. NO.
- ------- ------------------------------------------------------------------------------- -------
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(a)(1) Offer to Purchase, dated November 26, 1997.....................................
(a)(2) Letter of Transmittal..........................................................
(a)(3) Notice of Guaranteed Delivery..................................................
(a)(4) Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other
Nominees.......................................................................
(a)(5) Letter to Clients for Use by Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees...................................................
(a)(6) Guidelines for Certification of Taxpayer Identification Number on Substitute
Form W-9.......................................................................
(a)(7) Text of Press Release issued by Parent, dated November 21, 1997................
(a)(8) Summary Advertisement, dated November 26, 1997.................................
(b)(1) Amendment to Multi-Year Revolving Credit Agreement, dated as of May 8, 1996, by
and among Parent and various financial institutions............................
(b)(2) Amendment to Multi-Year Revolving Credit Agreement (as amended and restated as
of May 8, 1996), dated August 7, 1997, by and among Parent and various
financial institutions.........................................................
(b)(3) Form of Commitment Letter for 364-Day Revolving Credit Facility................
(b)(4) Form of Revolving Credit Agreement.............................................
(c)(1) Agreement and Plan of Merger, dated as of November 20, 1997, by and among the
Company, Parent, and Purchaser.................................................
(c)(2) Stockholders Agreement, dated as of November 20, 1997, by and among Parent,
Purchaser, The Carlyle Partners Leveraged Capital Fund I, L.P., BDM Acquisition
Partners, L.P., BDM Acquisition Partners II, L.P., The Carlyle Group, L.P., and
TWC Virginia, Inc..............................................................
(c)(3) Confidentiality Agreement, dated as of September 12, 1997, by and among
Wasserstein Perella & Co., Inc., acting on behalf of BDM International, Inc.,
and Parent.....................................................................
(c)(4) Exclusivity Agreement, dated November 14, 1997, by BDM International, Inc., The
Carlyle Partners Leveraged Capital Fund I, L.P., BDM Acquisition Partners,
L.P., BDM Acquisition Partners II, L.P., The Carlyle Group, L.P., and TWC
Virginia, Inc..................................................................
(c)(5) Form of Employment Agreement, dated as of November 20, 1997, between Parent and
each of Thomas A. Grissen, Helen M. Seltzer, William C. Hoover, Philip A.
Odeen, David L. Patterson and Roy V. Woodle....................................
</TABLE>
4
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SIGNATURES
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
TRW INC. (Parent)
By /s/ William B. Lawrence
------------------------------------
William B. Lawrence
Executive Vice President, General
Counsel and Secretary
SYSTEMS ACQUISITION INC. (Purchaser)
By /s/ Kathleen A. Weigand
------------------------------------
Kathleen A. Weigand
Vice President and Secretary
Date: November 26, 1997
5
<PAGE> 1
Exhibit (a)(1)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
BDM INTERNATIONAL, INC.
BY
SYSTEMS ACQUISITION INC.
A WHOLLY OWNED SUBSIDIARY OF
TRW INC.
AT
$29.50 NET PER SHARE
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON WEDNESDAY, DECEMBER 24, 1997, UNLESS THE OFFER IS EXTENDED.
THE BOARD OF DIRECTORS OF BDM INTERNATIONAL, INC. HAS UNANIMOUSLY APPROVED
THE MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED BY THE MERGER AGREEMENT,
INCLUDING THE OFFER, THE MERGER AND THE STOCKHOLDERS AGREEMENT (AS SUCH TERMS
ARE DEFINED HEREIN), HAS DETERMINED THAT THE OFFER AND THE MERGER ARE FAIR TO,
AND IN THE BEST INTERESTS OF, THE STOCKHOLDERS AND RECOMMENDS THAT THE
STOCKHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES (AS DEFINED HEREIN)
PURSUANT TO THE OFFER. IN CONNECTION WITH THE EXECUTION OF THE MERGER AGREEMENT,
CERTAIN AFFILIATES OF THE CARLYLE GROUP, L.P., WHICH BENEFICIALLY OWN
APPROXIMATELY 25.8% OF THE OUTSTANDING SHARES, HAVE AGREED, AMONG OTHER THINGS,
TO TENDER THEIR SHARES PURSUANT TO THE OFFER.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (i) THERE HAVING BEEN
VALIDLY TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION DATE, A NUMBER OF
SHARES WHICH REPRESENTS AT LEAST A MAJORITY OF THE TOTAL VOTING POWER OF
SECURITIES OF THE COMPANY ENTITLED TO VOTE IN THE ELECTION OF DIRECTORS OR IN A
MERGER, CALCULATED ON A FULLY DILUTED BASIS, AND (ii) ANY APPLICABLE WAITING
PERIOD UNDER THE HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976, AS
AMENDED (THE "HSR ACT"), HAVING EXPIRED OR BEEN TERMINATED. THE OFFER IS ALSO
SUBJECT TO CERTAIN OTHER CONDITIONS. SEE SECTION 14.
------------------------
Stockholders desiring to tender all or any portion of their Shares should
either (1) complete and sign the Letter of Transmittal (or a facsimile thereof)
in accordance with the instructions in the Letter of Transmittal and mail or
deliver it together with the certificate(s) representing tendered Shares and any
other required documents to the Depositary (as defined herein) or tender such
Shares pursuant to the procedure for book-entry transfer set forth in Section 3
or (2) request such Stockholder's broker, dealer, commercial bank, trust company
or other nominee to effect such transaction on the Stockholder's behalf. If
Shares are registered in the name of a broker, dealer, commercial bank, trust
company or other nominee, Stockholders must contact such broker, dealer,
commercial bank, trust company or other nominee if they desire to tender the
Shares so registered. A Stockholder who desires to tender Shares and whose
certificates representing such Shares are not immediately available, or who
cannot comply with the procedure for book-entry transfer on a timely basis, may
tender such Shares by following the procedures for guaranteed delivery set forth
in Section 3.
Questions and requests for assistance may be directed to Bear, Stearns &
Co. Inc. (the "Dealer Manager") or to Georgeson & Company Inc. (the "Information
Agent") at their respective addresses and telephone numbers set forth on the
back cover of this Offer to Purchase. Additional copies of this Offer to
Purchase, the Letter of Transmittal and the Notice of Guaranteed Delivery may
also be obtained from the Information Agent or the Dealer Manager, or from
brokers, dealers, commercial banks or trust companies.
------------------------
The Dealer Manager for the Offer is:
BEAR, STEARNS & CO. INC.
November 26, 1997
<PAGE> 2
TABLE OF CONTENTS
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PAGE
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INTRODUCTION.......................................................................... 1
THE TENDER OFFER...................................................................... 2
1. Terms of the Offer; Expiration Date.............................................. 2
2. Acceptance for Payment and Payment for Shares.................................... 4
3. Procedures for Tendering......................................................... 5
4. Withdrawal Rights................................................................ 8
5. Certain Federal Income Tax Consequences.......................................... 8
6. Price Range of Shares; Dividends................................................. 9
7. Certain Information Concerning the Company....................................... 9
8. Certain Information Concerning Parent and Purchaser.............................. 13
9. Source and Amount of Funds....................................................... 15
10. Background of the Offer.......................................................... 16
11. Purpose; Merger Agreement; Stockholders Agreement;
Vote Required to Approve the Merger; Appraisal Rights;
Plans for the Company; Going Private Transactions................................ 17
12. Dividends and Distributions...................................................... 31
13. Effect of the Offer on the Market for Shares,
Nasdaq Listing and Exchange Act Registration..................................... 32
14. Certain Conditions of the Offer.................................................. 33
15. Certain Legal Matters and Regulatory Approvals................................... 34
16. Fees and Expenses................................................................ 37
17. Miscellaneous.................................................................... 38
SCHEDULE I
Certain Information Regarding the Directors and
Executive Officers of Parent and Purchaser....................................... I-1
</TABLE>
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TO THE STOCKHOLDERS OF BDM INTERNATIONAL, INC.:
INTRODUCTION
Systems Acquisition Inc. ("Purchaser"), a wholly owned subsidiary of TRW
Inc., an Ohio corporation ("Parent"), hereby offers to purchase all the
outstanding shares of Common Stock (the "Shares") of BDM International, Inc., a
Delaware corporation (the "Company"), at $29.50 per Share, net to the seller in
cash without interest thereon (the "Per Share Amount"), upon the terms and
subject to the conditions set forth in this Offer to Purchase and in the related
Letter of Transmittal (which, as amended or supplemented from time to time,
together constitute the "Offer").
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (i) THERE HAVING BEEN
VALIDLY TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION DATE A NUMBER OF
SHARES WHICH REPRESENTS AT LEAST A MAJORITY OF THE TOTAL VOTING POWER OF
SECURITIES OF THE COMPANY ENTITLED TO VOTE IN THE ELECTION OF DIRECTORS OR IN A
MERGER, CALCULATED ON A FULLY DILUTED BASIS (THE "MINIMUM CONDITION"), AND (ii)
ANY APPLICABLE WAITING PERIOD UNDER THE HSR ACT HAVING EXPIRED OR BEEN
TERMINATED. THE OFFER IS ALSO SUBJECT TO CERTAIN OTHER CONDITIONS. SEE SECTION
14.
Tendering Stockholders will not be obligated to pay brokerage fees or
commissions or, subject to Instruction 6 of the Letter of Transmittal, stock
transfer taxes on the transfer and sale of Shares pursuant to the Offer.
Purchaser will pay all fees and expenses of Bear, Stearns & Co. Inc. ("Bear
Stearns"), which is acting as dealer manager for the Offer (in such capacity,
the "Dealer Manager"), First Chicago Trust Company of New York ("First
Chicago"), which is acting as the depositary (in such capacity, the
"Depositary"), and Georgeson & Company Inc. ("Georgeson"), which is acting as
the information agent (in such capacity, the "Information Agent"), incurred in
connection with the Offer. See Section 16.
THE BOARD OF DIRECTORS OF THE COMPANY (THE "COMPANY BOARD") HAS UNANIMOUSLY
APPROVED THE MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED BY THE MERGER
AGREEMENT, INCLUDING THE OFFER, THE MERGER AND THE STOCKHOLDERS AGREEMENT (AS
DEFINED HEREIN), HAS DETERMINED THAT THE OFFER AND THE MERGER ARE FAIR TO, AND
IN THE BEST INTERESTS OF, THE STOCKHOLDERS AND RECOMMENDS THAT THE STOCKHOLDERS
OF THE COMPANY ACCEPT THE OFFER AND TENDER THEIR SHARES PURSUANT TO THE OFFER.
Wasserstein Perella & Co., Inc., the Company's financial advisor ("WP&Co."), has
delivered to the Company Board its written opinion to the effect that, as of
November 20, 1997, the date of such opinion, the cash consideration to be
received by Stockholders pursuant to the Offer and the Merger is fair to
Stockholders from a financial point of view. Such opinion is set forth in full
as an exhibit to the Company's Schedule 14D-9. The Company has filed with the
Securities and Exchange Commission (the "Commission") a
Solicitation/Recommendation Statement on Schedule 14D-9 (the "Schedule 14D-9")
which is being mailed to Stockholders simultaneously with the Offer to Purchase.
In connection with the execution of the Merger Agreement, Parent and
certain affiliates of The Carlyle Group, L.P., which beneficially own 25.8% of
the outstanding Shares, entered into a Stockholders Agreement (the "Stockholders
Agreement") pursuant to which those Stockholders (the "Carlyle Stockholders")
agreed, among other things, to tender their Shares pursuant to the Offer. See
Section 11.
The Offer is being made pursuant to an Agreement and Plan of Merger, dated
as of November 20, 1997 (the "Merger Agreement"), among the Company, Parent and
Purchaser. The Merger Agreement provides, among other things, that as soon as
practicable after the satisfaction or waiver of the conditions to the merger set
forth in the Merger Agreement, on the terms and subject to the conditions of the
Merger Agreement and in accordance with the Delaware General Corporation Law
(the "Delaware Code"), Purchaser will be merged with and into the Company (the
"Merger"), with the Company continuing as the surviving corporation in the
Merger (the "Surviving Corporation") and as a wholly owned subsidiary of Parent.
At the effective time of the Merger (the "Effective Time"), subject to certain
exceptions, each issued and outstanding Share will be converted into the right
to receive the Per Share Amount or such higher price as may be paid in the Offer
(the "Merger Consideration"), less any required withholding taxes. The Merger
Agreement is more fully described in Section 11.
<PAGE> 4
The Merger Agreement provides that promptly upon purchase by Purchaser of
any Shares pursuant to the Offer (assuming the Minimum Condition has been
satisfied), and from time to time thereafter as Shares are acquired by
Purchaser, Purchaser will be entitled to designate such number of members,
rounded up to the next whole number, of the Company Board as will give Purchaser
representation on the Company Board equal to at least that number of directors
which is the product of (i) the total number of directors on the Company Board
(giving effect to the directors appointed or elected pursuant to this sentence
and including current directors serving as officers of the Company) multiplied
by (ii) the percentage that (a) the aggregate number of such Shares beneficially
owned by Purchaser or any affiliate of Parent bears to (b) the number of Shares
outstanding. Notwithstanding the foregoing, Parent and Purchaser have agreed
that, until the Effective Time, the Company Board will have at least one member
who was a director on the date of the Merger Agreement and who is neither an
officer of the Company nor a designee, stockholder, affiliate or associate
(within the meaning of the federal securities laws) of Parent (one or more of
such directors, the "Independent Directors"), provided that, if no Independent
Directors remain, the Merger Agreement requires the other members of the Company
Board to designate one person to fill one of the vacancies who shall not be
either an officer of the Company or a designee, shareholder, affiliate or
associate of Parent, and such person will be deemed to be an Independent
Director for purposes of the Merger Agreement. The Company has agreed to
increase the size of the Company Board as is necessary to enable Purchaser's
designees to be elected or appointed to the Company Board. Purchaser is
similarly entitled to proportionate representation on committees of the Company
Board. The information required by Section 14(f) of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), and Rule 14f-1 promulgated thereunder
relating to Purchaser's designees to the Company Board is included as Schedule
II to the Company's Schedule 14D-9.
Under the Delaware Code, if Purchaser acquires, pursuant to the Offer or
otherwise, at least 90% of the then-outstanding Shares, Purchaser will be able
to adopt the Merger Agreement and the transactions contemplated thereby,
including the Merger, without a vote of the Stockholders. In such event, Parent,
Purchaser and the Company have agreed to take, at the request of Purchaser, all
necessary and appropriate action to cause the Merger to become effective as soon
as practicable after such acquisition. If, however, the Purchaser does not
acquire at least 90% of the then-outstanding Shares pursuant to the Offer or
otherwise, a vote of Stockholders will be required to adopt the Merger Agreement
under the Delaware Code and a significantly longer period of time may be
required to effect the Merger. See Section 11. If the Minimum Condition has been
satisfied in connection with the Offer, however, Purchaser will have sufficient
voting power to adopt the Merger Agreement without the vote in favor of the
adoption of the Merger Agreement by any other Stockholder.
According to the Company, as of the close of business on November 19, 1997,
29,723,431 Shares were issued and outstanding. For purposes of the Offer, in
determining the number of Shares outstanding calculated on a "fully diluted
basis," there will be included the number of outstanding securities of the
Company entitled to vote in the election of directors or in a merger ("Voting
Securities") together with Voting Securities issuable pursuant to obligations
outstanding at that date under the Company's employee stock option or other
benefit plans or otherwise. Based upon the foregoing, the Minimum Condition
would be satisfied if at least 14,861,717 Shares were validly tendered in the
Offer and not properly withdrawn.
As of the date of this Offer to Purchase, neither Parent nor Purchaser
beneficially owns any Shares. Pursuant to the Stockholders Agreement, Purchaser
has an option exercisable upon the occurrence of certain future events to
acquire the 7,660,000 Shares (25.8% of the outstanding Shares) beneficially
owned by the Carlyle Stockholders. See Section 11.
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE
WITH RESPECT TO THE OFFER.
THE TENDER OFFER
1. TERMS OF THE OFFER; EXPIRATION DATE.
Upon the terms and subject to the conditions of the Offer (including, if
the Offer is extended or amended, the terms and conditions of such extension or
amendment), Purchaser will accept for payment and pay for all Shares
2
<PAGE> 5
validly tendered on or prior to the Expiration Date of the Offer and not
properly withdrawn as permitted and described in Section 4 herein. The term
"Expiration Date" means 12:00 Midnight, New York City time, on Wednesday,
December 24, 1997, unless and until Purchaser, in its sole discretion (but
subject to the terms and conditions of the Merger Agreement), shall have
extended the period during which the Offer is open, in which event the term
"Expiration Date" shall mean the latest time and date at which the Offer, as so
extended by Purchaser, shall expire.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, SATISFACTION OF THE
MINIMUM CONDITION AND CERTAIN OTHER CONDITIONS (THE "OFFER CONDITIONS"). SEE
SECTION 14, WHICH SETS FORTH IN FULL THE CONDITIONS TO THE OFFER. SUBJECT TO THE
PROVISIONS OF THE MERGER AGREEMENT AND THE APPLICABLE RULES AND REGULATIONS OF
THE COMMISSION, PURCHASER RESERVES THE RIGHT, IN ITS SOLE DISCRETION, TO WAIVE
ANY OR ALL CONDITIONS TO THE OFFER (OTHER THAN THE MINIMUM CONDITION) AND TO
MAKE ANY OTHER CHANGES IN THE TERMS AND CONDITIONS OF THE OFFER. SUBJECT TO THE
PROVISIONS OF THE MERGER AGREEMENT, INCLUDING THOSE PROVISIONS DESCRIBED IN THE
NEXT PARAGRAPH, AND THE APPLICABLE RULES AND REGULATIONS OF THE COMMISSION, IF,
BY THE EXPIRATION DATE, ANY OR ALL OF SUCH CONDITIONS TO THE OFFER HAVE NOT BEEN
SATISFIED, PURCHASER RESERVES THE RIGHT (BUT SHALL NOT BE OBLIGATED) TO (i)
DECLINE TO PURCHASE ANY OF THE SHARES TENDERED IN THE OFFER AND TERMINATE THE
OFFER AND RETURN ALL TENDERED SHARES TO TENDERING STOCKHOLDERS, (ii) WAIVE SUCH
UNSATISFIED CONDITIONS TO THE EXTENT PERMITTED BY LAW AND THE MERGER AGREEMENT
AND PURCHASE ALL SHARES VALIDLY TENDERED, (iii) EXTEND THE OFFER AND, SUBJECT TO
THE TERMS OF THE OFFER (INCLUDING THE RIGHTS OF STOCKHOLDERS TO WITHDRAW THEIR
SHARES), RETAIN THE SHARES WHICH HAVE BEEN TENDERED, UNTIL THE TERMINATION OF
THE OFFER, AS EXTENDED, OR (iv) AMEND THE OFFER. THE RIGHTS RESERVED BY
PURCHASER IN THIS AND THE FOLLOWING PARAGRAPH ARE IN ADDITION TO PURCHASER'S
RIGHTS TO TERMINATE THE OFFER AS DESCRIBED IN SECTION 14.
The Merger Agreement provides, however, that, subject to the applicable
rules and regulations of the Commission, Purchaser expressly reserves the right,
in its sole discretion, at any time or from time to time, subject to the terms
of the Merger Agreement and regardless of whether or not any of the events set
forth in Section 14 shall have occurred or shall have been determined by the
Purchaser to have occurred (i) to extend the period of time during which the
Offer is open and thereby delay acceptance for payment of, and the payment for,
any Shares, by giving oral or written notice of such extension to the
Depositary, and (ii) to amend the Offer in any respect by giving oral or written
notice of such amendment to the Depositary. The rights reserved by the Purchaser
in this paragraph are in addition to Purchaser's rights to terminate the Offer
pursuant to Section 14. Parent and Purchaser will not terminate or withdraw the
Offer or extend the Expiration Date, unless at the Expiration Date, the Offer
Conditions shall not have been satisfied or earlier waived. Notwithstanding the
foregoing, Purchaser may (i) extend the Expiration Date (including as it may be
extended) for up to ten business days in connection with an increase in the
consideration to be paid pursuant to the Offer so as to comply with applicable
rules and regulations of the Commission, (ii) in its sole discretion, extend the
initial Expiration Date for up to ten business days after the initial Expiration
Date, and (iii) extend the initial Expiration Date (including as it may be
extended) for up to ten business days, notwithstanding that on such Expiration
Date the Offer Conditions shall have been satisfied or waived, if the number of
Shares that have been validly tendered and not properly withdrawn represent more
than 50% but less than 90% of the voting power of the then issued and
outstanding Shares; provided, however, that, in the case of clause (iii) of this
sentence, Parent and Purchaser expressly and irrevocably waive any Offer
Condition that subsequently may not be satisfied during such extension of the
Offer. During any such extension, all Shares previously tendered and not
properly withdrawn will remain subject to the Offer, subject to the right of a
tendering Stockholder to withdraw such Stockholder's Shares. Under the terms of
the Merger Agreement, however, unless previously approved by the Company in
writing, Parent shall not permit Purchaser to (i) decrease the Per Share Amount
or change the form of consideration payable in the Offer, (ii) decrease the
number of Shares sought in the Offer, (iii) amend or waive satisfaction of the
Minimum Condition, or (iv) impose additional conditions to the Offer or amend
any other terms of the Offer in any manner adverse to the Stockholders,
provided, however, that nothing in the Merger Agreement will prohibit any waiver
of any condition or term of the Offer (other than the Minimum Condition) or any
other action permitted thereby. Purchaser shall have no obligation to pay
interest on the purchase price of tendered Shares, whether or not it exercises
its rights to extend the Offer.
3
<PAGE> 6
Any extension, delay, termination, waiver or amendment of the Offer will be
followed as promptly as practicable by public announcement thereof. In the case
of an extension, such announcement will be made in accordance with Rules
14d-4(c), 14d-6(d) and 14e-1(d) under the Exchange Act no later than 9:00 A.M.,
New York City time, on the next business day after the previously scheduled
Expiration Date. Without limiting the manner in which Purchaser may choose to
make any public announcement, except as provided by applicable law (including
Rules 14d-4(c), 14d-6(d) and 14e-1(d) under the Exchange Act which require that
material changes be promptly disseminated to holders of Shares), Purchaser
currently intends to make any such public announcements by issuing a release to
the Dow Jones News Service.
If Purchaser makes a material change in the terms of the Offer or if it
waives a material condition of the Offer, Purchaser will disseminate additional
tender offer material and extend the Offer to the extent required by Rules
14d-4(c), 14d-6(d) and 14e-1 under the Exchange Act. The minimum period during
which an offer must remain open following material changes in the terms of the
Offer, other than a change in price or a change in the percentage of securities
sought, will depend upon the facts and circumstances, including the materiality,
of the changes. With respect to a change in price or, subject to certain
limitations, a change in the percentage of securities sought, a minimum ten
business day period from the day of such change is generally required to allow
for adequate dissemination to stockholders. For purposes of the Offer, a
"business day" means any day other than a Saturday, Sunday, or federal holiday,
and consists of the time period from 12:01 A.M. through 12:00 Midnight, New York
City time.
The Company has provided Purchaser with a list of its Stockholders and
security position listings for the purpose of disseminating the Offer to
Stockholders. This Offer to Purchase and the related Letter of Transmittal and
other relevant materials will be mailed by Purchaser to record holders of Shares
and furnished to brokers, dealers, commercial banks, trust companies and similar
persons whose names, or the names of whose nominees, appear on the Stockholder
list or, if applicable, who are listed as participants in a clearing agency's
security position listing, for subsequent transmittal to beneficial owners of
Shares.
2. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES.
Upon the terms and subject to the conditions of the Offer (including, if
the Offer is extended or amended, the terms and conditions of any such extension
or amendment), Purchaser will accept for payment and, as soon as permitted after
the Expiration Date, purchase all Shares validly tendered and not properly
withdrawn on or prior to the Expiration Date. In addition, subject to applicable
rules of the Commission, Purchaser expressly reserves the right to delay
acceptance for payment of or payment for Shares until any applicable waiting
period under the HSR Act and similar German laws shall have expired or been
terminated prior to the Expiration Date. Any such delays will be effected in
compliance with Rule 14e-1(c) under the Exchange Act.
For information with respect to approvals required to be obtained prior to
the consummation of the Offer, including the HSR Act and similar German laws,
see Section 15.
In all cases, payment for Shares tendered and accepted for payment pursuant
to the Offer will be made only after timely receipt by the Depositary of (i)
certificates for such Shares ("Share Certificates") or timely confirmation of a
book-entry transfer of such Shares (a "Book-Entry Confirmation") into the
Depositary's account at The Depository Trust Company or the Philadelphia
Depository Trust Company (each a "Book-Entry Transfer Facility" and,
collectively, the "Book-Entry Transfer Facilities"), pursuant to the procedures
set forth in Section 3; (ii) the Letter of Transmittal (or a facsimile thereof),
properly completed and duly executed, with any required signature guarantees, or
an Agent's Message (as defined below) in connection with a book-entry transfer;
and (iii) any other documents required by the Letter of Transmittal.
The term "Agent's Message" means a message transmitted by a Book-Entry
Transfer Facility to and received by the Depositary and forming a part of a
Book-Entry Confirmation, which states that such Book-Entry Transfer Facility has
received an express acknowledgment from the participant in such Book-Entry
Transfer Facility tendering Shares that such participant has received and agrees
to be bound by the terms of the Letter of Transmittal and that Purchaser may
enforce such agreement against such participant.
4
<PAGE> 7
For purposes of the Offer, Purchaser will be deemed to have accepted for
payment (and thereby purchased) Shares validly tendered and not properly
withdrawn as of the Expiration Date, if, as and when Purchaser gives oral or
written notice to the Depositary of Purchaser's acceptance for payment of such
Shares pursuant to the Offer. Upon the terms and subject to the conditions of
the Offer, payment for Shares accepted for payment pursuant to the Offer will be
made by deposit of the purchase price therefor with the Depositary, which will
act as agent for tendering Stockholders for the purpose of receiving payments
from Purchaser and transmitting such payments to Stockholders whose Shares have
been accepted for payment. Upon the deposit of funds with the Depositary for the
purpose of making payments to tendering Stockholders, Purchaser's obligation to
make such payment shall be satisfied, and tendering Stockholders must thereafter
look solely to the Depositary for payment of amounts owed to them by reason of
the acceptance for payment of Shares pursuant to the Offer. Purchaser will pay
any stock transfer taxes with respect to the transfer and sale to it or its
order pursuant to the Offer, except as otherwise provided in Instruction 6 of
the Letter of Transmittal, as well as any expenses of the Dealer Manager, the
Depositary and the Information Agent incurred in connection with the Offer.
UNDER NO CIRCUMSTANCES WILL INTEREST ON THE PER SHARE AMOUNT BE PAID BY
PURCHASER, REGARDLESS OF ANY EXTENSION OF THE OFFER OR ANY DELAY IN MAKING SUCH
PAYMENT. If, for any reason whatsoever, acceptance for payment of or payment for
any Shares validly tendered pursuant to the Offer is delayed or Purchaser is
unable to accept for payment or pay for Shares tendered pursuant to the Offer,
then without prejudice to Purchaser's rights set forth herein, the Depositary
may nevertheless, on behalf of Purchaser and subject to Rule 14e-1(c) under the
Exchange Act, retain tendered Shares, and such Shares may not be withdrawn
except to the extent that the tendering Stockholder is entitled to and duly
exercises withdrawal rights as described in Section 4.
If any tendered Shares are not accepted for payment for any reason or if
Share Certificates are submitted for more Shares than are tendered, Share
Certificates evidencing unpurchased or untendered Shares will be returned
without expense to the tendering Stockholder (or, in the case of Shares tendered
by book-entry transfer into the Depositary's account at a Book-Entry Transfer
Facility pursuant to the procedures set forth in Section 3, such Shares will be
credited to the appropriate Stockholder's account maintained at such Book-Entry
Transfer Facility) as promptly as practicable following the expiration,
termination or withdrawal of the Offer.
Parent reserves the right to designate another direct subsidiary of Parent
in lieu of Purchaser as the bidder (within the meaning of Rule 14d-1(c)) in the
Offer, but Parent shall remain responsible for the performance of such bidder
and will in no way prejudice the rights of tendering Stockholders to receive
payment for Shares validly tendered and accepted for payment pursuant to the
Offer.
3. PROCEDURES FOR TENDERING.
Valid Tenders. Except as set forth below, in order for Shares to be
validly tendered pursuant to the Offer, the Letter of Transmittal (or a
facsimile thereof), properly completed and duly executed, together with any
required signature guarantees, or an Agent's Message in connection with a
book-entry delivery of Shares, and any other documents required by the Letter of
Transmittal, must be received by the Depositary at one of its addresses set
forth on the back cover of this Offer to Purchase on or prior to the Expiration
Date. In addition, the Depositary must receive either: (i) Share Certificates
evidencing validly tendered Shares or Book-Entry Confirmation of book-entry
transfer of such Shares or (ii) Notice of Guaranteed Delivery of such Shares
prepared and executed as described below, in each case on or prior to the
Expiration Date.
Book-Entry Transfer. The Depositary will make a request to establish
accounts with respect to Shares at the Book-Entry Transfer Facilities for
purposes of the Offer within two business days after the date of this Offer to
Purchase. Any financial institution that is a participant in the system of any
Book-Entry Transfer Facility may make book-entry delivery of Shares by causing
such Book-Entry Transfer Facility to transfer such Shares into the Depositary's
account at such Book-Entry Transfer Facility in accordance with such Book-Entry
Transfer Facility's procedures for such transfer. However, although delivery of
Shares may be effected through book-entry transfer at a Book-Entry Transfer
Facility, the Letter of Transmittal (or a facsimile thereof), properly completed
and duly executed, together with any required signature guarantees, or an
Agent's Message in connection with a book-entry transfer, and any other
documents required by the Letter of Transmittal, must in any case be received
5
<PAGE> 8
by the Depositary at one of its addresses set forth on the back cover of this
Offer to Purchase on or prior to the Expiration Date, or the guaranteed delivery
procedures described below must be complied with.
DELIVERY OF DOCUMENTS TO A BOOK-ENTRY TRANSFER FACILITY IN ACCORDANCE WITH
SUCH BOOK-ENTRY TRANSFER FACILITY'S PROCEDURES DOES NOT CONSTITUTE DELIVERY TO
THE DEPOSITARY.
THE METHOD OF DELIVERY OF SHARE CERTIFICATES, THE LETTER OF TRANSMITTAL AND
ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH ANY BOOK-ENTRY TRANSFER
FACILITY, IS AT THE OPTION AND RISK OF THE TENDERING STOCKHOLDER, AND THE
DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY
(INCLUDING, IN THE CASE OF BOOK-ENTRY TRANSFER, BY BOOK-ENTRY CONFIRMATION). IF
DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY
INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO
ENSURE TIMELY DELIVERY.
Signature Guarantees. Signatures on Letters of Transmittal must be
guaranteed by a firm which is a bank, broker, dealer, credit union, savings
association or other entity which is a member in good standing of the Securities
Transfer Agents Medallion Program (each of the foregoing being referred to as an
"Eligible Institution"), except in cases where Shares are tendered (i) by a
registered Stockholder who has not completed either the box labeled "Special
Payment Instructions" or the box labeled "Special Delivery Instructions" on the
Letter of Transmittal or (ii) for the account of an Eligible Institution. See
Instructions 1 and 5 of the Letter of Transmittal.
If the Share Certificates are registered in the name of a person other than
the signer of the Letter of Transmittal, or if payment is to be made, or Share
Certificates not accepted for payment or not tendered are to be returned, to a
person other than the registered Stockholder, the Share Certificates must be
endorsed or accompanied by appropriate stock powers, in either case, signed
exactly as the name of the registered Stockholder appears on such certificates,
with the signatures on such certificates or stock powers guaranteed as
aforesaid. See Instructions 1 and 5 of the Letter of Transmittal.
If Share Certificates are forwarded separately to the Depositary, a
properly completed and duly executed Letter of Transmittal (or a facsimile
thereof) must accompany each such delivery.
Guaranteed Delivery. If a Stockholder desires to tender Shares pursuant to
the Offer and such Stockholder's Share Certificates are not immediately
available, or such Stockholder cannot deliver the Share Certificates and all
other required documents in time to reach the Depositary on or prior to the
Expiration Date, or such Stockholder cannot complete the procedure for delivery
by book-entry transfer on a timely basis, such Shares may nevertheless be
tendered, provided that all of the following conditions are satisfied:
(i) such tender is made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form provided by Purchaser with this Offer
to Purchase, is received by the Depositary as provided below on or prior to
the Expiration Date; and
(iii) the Share Certificates (or a Book-Entry Confirmation),
representing all tendered Shares in proper form for transfer, together with
the Letter of Transmittal (or a facsimile thereof) properly completed and
duly executed, with any required signature guarantees (or, in the case of a
book-entry transfer, an Agent's Message) and any other documents required
by the Letter of Transmittal are received by the Depositary within three
Nasdaq National Market trading days after the date of execution of such
Notice of Guaranteed Delivery.
The Notice of Guaranteed Delivery may be delivered by hand or transmitted
by telegram, telex, facsimile transmission or mail to the Depositary and must
include a guarantee by an Eligible Institution and a representation that the
Stockholder owns Shares tendered within the meaning of, and that the tender of
Shares effected thereby complies with, Rule 14e-4 under the Exchange Act, each
in the form set forth in such Notice of Guaranteed Delivery.
Notwithstanding any other provision hereof, payment for Shares accepted for
payment pursuant to the Offer will in all cases be made only after timely
receipt by the Depositary of Share Certificates for, or of Book-Entry
6
<PAGE> 9
Confirmation with respect to, such Shares, a properly completed and duly
executed Letter of Transmittal (or a facsimile thereof), together with any
required signature guarantees (or, in the case of a book-entry transfer, an
Agent's Message), and any other documents required by the Letter of Transmittal.
Accordingly, payment might not be made to all tendering Stockholders at the same
time and will depend upon when Share Certificates or Book-Entry Confirmations of
such Shares are received into the Depositary's account at a Book-Entry Transfer
Facility. Under no circumstances will interest be paid on the purchase price of
the Shares to be paid by Purchaser, regardless of any extension of the Offer or
any delay in making such payment.
Appointment as Proxy. By executing the Letter of Transmittal, a tendering
Stockholder irrevocably appoints designees of Purchaser and each of them as such
Stockholder's attorneys-in-fact and proxies, with full power of substitution, in
the manner set forth in the Letter of Transmittal, to the full extent of such
Stockholder's rights with respect to Shares tendered by such Stockholder and
accepted for payment by Purchaser (and with respect to any and all other Shares
or other securities issued or issuable in respect of such Shares on or after the
date hereof). All such powers of attorney and proxies shall be considered
irrevocable and coupled with an interest in the tendered Shares. Such
appointment will be effective when, and only to the extent that, Purchaser
accepts such Shares for payment. Upon such acceptance for payment, all prior
powers of attorney and proxies given by such Stockholder with respect to such
Shares (and such other Shares and securities) will be revoked without further
action, and no subsequent powers of attorney and proxies may be given nor any
subsequent written consents executed (and, if given or executed, will not be
deemed effective). The designees of Purchaser will, with respect to Shares (and
such other Shares and securities) for which such appointment is effective, be
empowered to exercise all voting and other rights of such Stockholder as they,
in their sole discretion, may deem proper at any annual or special meeting of
the Company's Stockholders or any adjournment or postponement thereof, by
written consent in lieu of any such meeting or otherwise. Purchaser reserves the
right to require that, in order for Shares to be deemed validly tendered,
immediately upon Purchaser's payment for such Shares, Purchaser must be able to
exercise full voting and other rights with respect to such Shares and other
securities, including rights in respect of voting at any meeting of Stockholders
and acting by such written consent.
Determination of Validity. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance for payment of any tender
of Shares will be determined by Purchaser in its sole discretion, which
determination shall be final and binding on all parties. Purchaser reserves the
absolute right to reject any and all tenders determined by it not to be in
proper form or the acceptance for payment of which may in the opinion of its
counsel be unlawful. Purchaser also reserves the absolute right to waive any of
the conditions of the Offer (other than the Minimum Condition) or any defect or
irregularity in any tender of Shares of any particular Stockholder whether or
not similar defects or irregularities are waived in the case of other
Stockholders. No tender of Shares will be deemed to have been validly made until
all defects and irregularities have been cured or waived. None of Parent,
Purchaser, any of their affiliates or assigns, the Dealer Manager, the
Depositary, the Information Agent or any other person will be under any duty to
give notification of any defects or irregularities in tenders or incur any
liability for failure to give any such notification. Purchaser's interpretation
of the terms and conditions of the Offer (including the Letter of Transmittal
and the instructions thereto) will be final and binding on all parties.
Backup Federal Income Tax Withholding and Substitute Form W-9. Under the
"backup withholding" provisions of federal income tax law, the Depositary may be
required to withhold 31% of the amount of any payments of cash pursuant to the
Offer. In order to avoid backup withholding, each Stockholder surrendering
Shares in the Offer must, unless an exemption applies, provide the payer of such
cash with such Stockholder's correct taxpayer identification number ("TIN") on a
substitute Form W-9 and certify, under penalties of perjury, that such TIN is
correct and that such Stockholder is not subject to backup withholding. If a
Stockholder does not provide its correct TIN or fails to provide the
certifications described above, the Internal Revenue Service ("IRS") may impose
a penalty on such Stockholder, and payment of cash to such Stockholder pursuant
to the Offer may be subject to backup withholding of 31%. All Stockholders
surrendering Shares pursuant to the Offer should complete and sign the
substitute Form W-9 included in the Letter of Transmittal to provide the
information and certification necessary to avoid backup withholding (unless an
applicable exemption exists and is proved in a manner satisfactory to the
Depositary). Certain Stockholders (including, among others, all
7
<PAGE> 10
corporations and certain foreign individuals and entities) are not subject to
backup withholding. Noncorporate foreign Stockholders should complete and sign a
Form W-8, Certificate of Foreign Status, a copy of which may be obtained from
the Depositary, in order to avoid backup withholding. See Instruction 10 of the
Letter of Transmittal.
Other Requirements. Purchaser's acceptance for payment of Shares tendered
pursuant to any of the procedures described above will constitute a binding
agreement between the tendering Stockholder and Purchaser, upon the terms and
subject to the conditions of the Offer, including the tendering Stockholder's
representation and warranty that the Stockholder is the holder of Shares within
the meaning of, and that the tender of Shares complies with, Rule 14e-4 under
the Exchange Act.
4. WITHDRAWAL RIGHTS.
Tenders of Shares made pursuant to the Offer are irrevocable, except that
Shares tendered pursuant to the Offer may be withdrawn at any time on or prior
to the Expiration Date and, unless theretofore accepted for payment by Purchaser
pursuant to the Offer, may also be withdrawn at any time after January 25, 1998.
If Purchaser extends the Offer, is delayed in its acceptance for payment of
Shares, or is unable to purchase Shares validly tendered pursuant to the Offer
for any reason, then without prejudice to Purchaser's rights under the Offer,
the Depositary may nevertheless, on behalf of Purchaser, retain tendered Shares,
and such Shares may not be withdrawn except to the extent that tendering
Stockholders are entitled to withdrawal rights as described in this Section 4.
Any such delay in acceptance for payment will be accompanied by an extension of
the Offer to the extent required by law. See Section 1.
For a withdrawal to be effective, a written, telegraphic, telex or
facsimile transmission notice of withdrawal must be timely received by the
Depositary at one of its addresses or facsimile numbers set forth on the back
cover of this Offer to Purchase. Any notice of withdrawal must specify the name
of the person who tendered Shares to be withdrawn, the number of Shares to be
withdrawn and the name of the registered Stockholder, if different from that of
the person who tendered such Shares. If Share Certificates to be withdrawn have
been delivered or otherwise identified to the Depositary, then prior to the
physical release of such certificates, the serial numbers shown on such
certificates must be submitted to the Depositary, and the signatures on the
notice of withdrawal must be guaranteed by an Eligible Institution unless such
Shares have been tendered for the account of an Eligible Institution. If Shares
have been tendered pursuant to the procedure for book-entry transfer as set
forth in Section 3, any notice of withdrawal must specify the name and number of
the account at the Book-Entry Transfer Facility to be credited with the
withdrawn Shares, in which case a notice of withdrawal will be effective if
delivered to the Depositary by any method of delivery described in the first
sentence of this paragraph.
All questions as to the form and validity (including time of receipt) of
any notice of withdrawal will be determined by Purchaser, in its sole
discretion, whose determination will be final and binding on all parties. None
of Parent, Purchaser, any of their affiliates or assigns, the Dealer Manager,
the Depositary, the Information Agent or any other person will be under any duty
to give notification of any defects or irregularities in any notice of
withdrawal or incur any liability for failure to give any such notification.
Withdrawals of Shares may not be rescinded. Any Shares properly withdrawn
will thereafter be deemed not to have been validly tendered for purposes of the
Offer. However, withdrawn Shares may be re-tendered at any time prior to the
Expiration Date by following one of the procedures described in Section 3.
5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES.
The summary of tax consequences set forth below is for general information
only and is based on the law as currently in effect. The tax treatment of each
Stockholder will depend in part upon such Stockholder's particular situation.
Special tax consequences not described herein may be applicable to particular
classes of taxpayers, such as financial institutions, broker-dealers, persons
who are not citizens or residents of the United States, Stockholders who
acquired their Shares through the exercise of an employee stock option or
otherwise as compensation, and persons who received payments in respect of
options to acquire Shares. ALL STOCKHOLDERS SHOULD CONSULT WITH THEIR OWN TAX
ADVISORS AS TO THE PARTICULAR TAX CONSEQUENCES OF THE OFFER AND THE
8
<PAGE> 11
MERGER TO THEM, INCLUDING THE APPLICABILITY AND EFFECT OF THE ALTERNATIVE
MINIMUM TAX AND ANY STATE, LOCAL OR FOREIGN INCOME AND OTHER TAX LAWS AND
CHANGES IN SUCH TAX LAWS.
The receipt of cash pursuant to the Offer or the Merger will be a taxable
transaction for federal income tax purposes under the Internal Revenue Code of
1986, as amended, and may also be a taxable transaction under applicable state,
local, foreign income or other tax laws. Generally, for federal income tax
purposes, a tendering Stockholder will recognize gain or loss in an amount equal
to the difference between the cash received by the
Stockholder pursuant to the Offer or the Merger and the Stockholder's adjusted
tax basis in Shares tendered by the Stockholder and purchased pursuant to the
Offer or converted into cash in the Merger. Various tax rates apply to capital
gains depending upon the holding period, and there are limitations on the
deductibility of capital losses.
6. PRICE RANGE OF SHARES; DIVIDENDS.
From October 1990 through June 28, 1995, the Company's Shares were not
traded on any national exchange or on the over-the-counter market. Since June
29, 1995, the Company's Shares have been traded on the Nasdaq National Market
(Symbol: BDMI). The following table sets forth the high and low sales prices per
Share for the quarters indicated on the Nasdaq National Market as reported in
the Company's Annual Report on Form 10-K for the year ended December 31, 1996
with respect to periods occurring in 1995 and 1996 and as reported by the Dow
Jones News Service thereafter. The Company has advised Purchaser that it neither
declared nor paid any dividends since June 29, 1995.
<TABLE>
<CAPTION>
HIGH* LOW*
------ ------
<S> <C> <C>
Year Ended December 31, 1995:
June 29 and 30, 1995........................................ $10.75 $ 9.94
Third Quarter............................................... $14.25 $10.13
Fourth Quarter.............................................. $15.25 $11.88
Year Ended December 31, 1996:
First Quarter............................................... $20.57 $12.72
Second Quarter.............................................. $24.50 $18.13
Third Quarter............................................... $30.75 $22.50
Fourth Quarter.............................................. $30.00 $22.13
Year Ended December 31, 1997:
First Quarter............................................... $28.63 $20.50
Second Quarter.............................................. $27.63 $19.75
Third Quarter............................................... $27.00 $21.38
Fourth Quarter through November 25, 1997.................... $29.75 $20.00
</TABLE>
- ---------------
* Sales prices for 1995 and 1996 are adjusted for the 2:1 stock split that
became effective March 20, 1997.
On November 20, 1997, the last full trading day prior to the public
announcement of the Merger Agreement and Purchaser's intention to commence the
Offer, the closing sale price per Share reported on the Nasdaq National Market
was $22.50. On November 25, 1997, the last full trading day before commencement
of the Offer, the closing sale price per Share reported on the Nasdaq National
Market was $29.25. STOCKHOLDERS ARE URGED TO OBTAIN A CURRENT MARKET QUOTATION
FOR THE SHARES.
As outlined in the Company's 1996 Annual Report on Form 10-K, the Company
does not have a policy of paying regular dividends and has no present intention
of paying any dividends. The payment of dividends is subject to the discretion
of the Company Board and will depend on the Company's results of operations,
financial position and capital requirements, general business conditions,
restrictions imposed by financing arrangements, if any, legal restrictions on
the payment of dividends, and other factors, such as continued growth
opportunities in which to invest, which the Company Board deems relevant. In
addition, pursuant to the Company's credit facility, dividends can only be paid
after September 1, 1996, and are not to exceed 20% of the Company's cumulative
net income subsequent to July 1, 1996. The payment of future dividends by the
Company should not be assumed.
Pursuant to the Merger Agreement, the Company has agreed, from the date of
the Merger Agreement until the Effective Time, not to declare, pay or set aside
any dividend or other distribution, other than dividends or
9
<PAGE> 12
distributions to the Company or the Company Subsidiaries (as defined in the
Merger Agreement) in the ordinary course of business, without the prior written
consent of Parent.
7. CERTAIN INFORMATION CONCERNING THE COMPANY.
The information concerning the Company contained in this Section 7 and
elsewhere in this Offer to Purchase, including financial information, has been
taken or derived from information furnished to Parent and Purchaser by the
Company or on file with the Commission and other public sources, including,
among other things, the Company's Annual Reports on Form 10-K for the years
ended December 31, 1996 and December 31, 1995 and the Company's Quarterly
Reports on Form 10-Q for the nine months ended September 30, 1997 and September
30, 1996. Although Parent and Purchaser do not have any knowledge that would
indicate that any statements contained herein are untrue in any material
respect, neither Parent nor Purchaser assumes any responsibility for the
accuracy or completeness of the information contained therein, or for any
failure by the Company to disclose events that may have occurred and may affect
the significance or accuracy of any such information but which are unknown to
Parent and Purchaser.
General. The Company was formed in 1959 under the name of Braddock, Dunn &
McDonald, Incorporated and later reorganized under the name of BDM
International, Inc. (the "Predecessor Company"). The Predecessor Company was a
public company from 1980 until 1988, at which time a wholly owned subsidiary of
Ford Motor Company acquired all the outstanding stock of the Predecessor
Company. In October 1990, a group of investors, including the Carlyle
Stockholders, formed the Company and acquired the Predecessor Company.
The Company is a multinational information technology company that operates
in three interrelated markets: systems and software integration, computer and
technical services, and enterprise management and operations. Effective December
31, 1996, the Company reorganized its business operations into five strategic
business units: federal systems, state and local systems, enterprise management
services, integrated supply chain solutions and BDM Europe.
The Company is a Delaware corporation with its principal offices located at
1501 BDM Way, McLean, Virginia 22102-3204. The telephone number of the Company
at such offices is (703) 848-5000.
Summary Financial Information. Set forth below is a summary of certain
consolidated financial information with respect to the Company taken or derived
from the Company's Annual Reports on Form 10-K for the years ended December 31,
1996 and December 31, 1995 and the Company's Quarterly Reports on Form 10-Q for
the nine months ended September 30, 1997 and September 30, 1996, each as filed
by the Company with the Commission. As set forth in the Company's Quarterly
Report on Form 10-Q for the three months ended March 31, 1997, the amounts have
been restated to give retroactive recognition to the Company's two-for-one stock
split in the form of a stock dividend. The summary information set forth below
is qualified in its entirety by reference to such reports (which may be obtained
and inspected as described below) and should be considered in conjunction with
the more comprehensive financial and other information in such reports and other
publicly available reports and documents filed by the Company with the
Commission and other publicly available information.
10
<PAGE> 13
BDM INTERNATIONAL, INC.
SELECTED SUMMARY CONSOLIDATED FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
(UNAUDITED)
NINE MONTH ENDED FISCAL YEAR ENDED
SEPTEMBER 30, DECEMBER 31,
------------------- --------------------------------
1997 1996 1996 1995 1994
-------- -------- ---------- -------- --------
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA
Revenue........................... $818,316 $723,727 $1,001,559 $889,974 $774,249
Net income........................ 9,140 15,961 17,675 18,392 13,078
BALANCE SHEET DATA
Working capital................... 167,270 137,101 136,905 116,124 94,914
Total assets...................... 497,154 369,712 420,654 363,793 335,551
Total assets less excess cost of
assets acquired over book
value.......................... 431,719 347,099 384,773 354,178 321,737
Total indebtedness................ 314,359 205,559 253,399 248,324 294,446
Stockholder's equity.............. 182,795 164,153 167,255 115,469 41,105
PER SHARE DATA
Net income per share.............. 0.30 0.55 0.61 0.78 0.60
Net income per share on fully
diluted basis.................. 0.30 0.55 0.60 0.77 0.59
</TABLE>
Certain Company Projections. The Company has informed Parent that it does
not, as a matter of course, make public forecasts as to its future financial
performance. However, in the course of discussions giving rise to the Merger
Agreement (see Section 10), the Company prepared and furnished Parent with
certain business and financial information that was not publicly available,
including certain projections for 1997 through 2000 prepared for the Company's
internal purposes (the "Projections").
The Projections were prepared solely for the Company's internal purposes
and were not prepared for publication or with a view to complying with the
published guidelines of the Commission regarding projections or with the AICPA
Guide for Prospective Financial Statements, and the Projections are being
included in this Offer to Purchase solely because they were furnished to Parent
in connection with the discussions giving rise to the Merger Agreement. The
independent accountants of the Company, Coopers & Lybrand L.L.P., have neither
examined nor compiled the Projections and, accordingly, do not express an
opinion or any other form of assurance with respect thereto. The reports of
Coopers & Lybrand L.L.P. included the Company's Annual Reports on Form 10-K
referred to in this Offer to Purchase relate to the historical financial
information of the Company, do not extend to the Projections and should not be
read to do so.
The Projections set forth below necessarily reflect numerous assumptions
with respect to the general business and economic conditions and other matters,
many of which are inherently uncertain or beyond the Company's, Parent's or
Purchaser's control, and do not take into account any changes in the Company's
operations or capital structure which may result from the Offer and the Merger.
It is not possible to predict whether the assumptions made in preparing the
Projections will be valid and actual results may prove to be materially higher
or lower than those contained in the Projections. The inclusion of the
forward-looking information contained in the Projections should not be regarded
as an indication that the Company, Parent or anyone else who received this
information considered it a reliable prediction of future events, and this
information should not be relied on as such. Neither the Company, Parent or
Purchaser nor any of their representatives assumes any responsibility for the
validity, reasonableness, accuracy or completeness of the
11
<PAGE> 14
Projections, and the Company has made no representation to Parent or Purchaser
regarding the Projections. None of the Company, Parent, Purchaser or any other
party intends publicly to update or otherwise publicly revise the Projections
set forth below even if experience or future changes make it clear that the
Projections will not be realized.
The Projections are as follows:
<TABLE>
<CAPTION>
ESTIMATES FOR THE YEAR ENDING DECEMBER 31,
---------------------------------------------
1997* 1998 1999 2000
------ -------- -------- --------
(in millions)
<S> <C> <C> <C> <C>
Net sales............................ $960.4 $1,152.0 $1,353.5 $1,586.5
Cost of goods sold................... 800.3 945.1 1,103.2 1,283.6
Net operating profit................. 51.6 84.0 110.9 145.4
Net income........................... 25.7 41.5 56.9 77.6
</TABLE>
- ---------------
* The 1997 Projections exclude the effects of a third quarter pre-tax charge of
$14.7 million relating to a resolution of issues involving a state government
contract.
The Company has informed Parent and Purchaser that principal assumptions
underlying the Projections are as follows:
(i) No acquisitions during the Projection period;
(ii) Sales increases at a compounded annual rate of approximately 18% over
the period 1997 to 2000 (which compares to the Company's compound
annual sales growth rate of 24% over the four years ended December
31, 1996);
(iii) Gross margin percentage improvement from approximately 17% in 1997 to
19% in 2000, assuming the Company's commercial information technology
business becomes a larger portion of its total business;
(iv) Net operating profit percentage improvement from approximately 5% in
1997 to 9% in 2000, assuming research and development expense remains
constant at $4 million per year and other key elements of operating
costs, as a percentage of sales, remain relatively constant;
(v) Income tax rates of 43%, 45%, 42% and 39% for the years 1997, 1998,
1999 and 2000, respectively; and
(vi) Equity method of accounting for the Company's 45% ownership interest
in IABG Holding GmbH as a result of the Company's agreement to
relinquish voting control, although retaining the same interest in
earnings, effective January 1, 1998 (through 1997, this investment
was accounted for on a consolidated basis).
The foregoing Projections were prepared for the Company's internal
purposes, do not reflect or give effect to the Offer or the Merger and
transactions related thereto (including the financing for the Offer) and,
accordingly, are not necessarily indicative of the results of operations of the
Company following the Offer or the Merger.
Available Information. The Shares are registered under the Exchange Act.
Accordingly, the Company is subject to the informational filing requirements of
the Exchange Act and therefore is obligated to file periodic reports, proxy
statements and other information with the Commission relating to its business,
financial condition and other matters. Information, as of particular dates,
concerning the Company's directors and officers, their remuneration, options
granted to them, the principal holders of the Company's securities and any
material interest of such persons in transactions with the Company is required
to be disclosed in such proxy statements and distributed to the Stockholders and
filed with the Commission. Such reports, proxy statements and other information
should be available for inspection at the public reference facilities of the
Commission located in Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C.
20549, and should also be available for inspection and copying at prescribed
rates at the regional offices of the Commission located at Citicorp Center, 500
West Madison Street, Suite 1400, Chicago, Illinois 60661, and Seven World Trade
Center, Suite 1300, New York, New York 10048. Such reports, proxy statements and
other information may also be obtained at the Web site that the Commission
maintains at http://www.sec.gov. Copies of this material may also be obtained by
mail, upon payment of the Commission's customary fees, from the Commission's
principal office at 450 Fifth Street, N.W.,
12
<PAGE> 15
Washington, D.C. 20549. In addition, such material should also be available for
inspection at the library of the Nasdaq National Market System, 1735 K Street,
N.W., Washington, D.C. 20006.
8. CERTAIN INFORMATION CONCERNING PARENT AND PURCHASER.
General. Parent, with 1996 sales of approximately $10 billion, has its
world headquarters at 1900 Richmond Road, Cleveland, Ohio 44124 and has
approximately 68,000 employees based in over 26 countries. The telephone number
for Parent is (216) 291-7000.
Parent is an international manufacturing and service company that provides
advanced technology products and services. The principal businesses of Parent
and its subsidiaries are the design, manufacture and sale of products and the
performance of systems engineering, research and technical services for industry
and the United States Government in two industry segments: automotive and space
& defense. Parent's principal products and services include automotive systems
and components; spacecraft; software and systems engineering support services;
and electronic systems, equipment and services. Parent holds leading positions
in most of its markets.
Purchaser, a Delaware corporation and a wholly owned subsidiary of Parent,
was organized in connection with the Offer and has not carried on any activities
to date other than those incident to its formation and the commencement of the
Offer. The address and telephone number for Purchaser is the same as that of
Parent.
The name, citizenship, business address, principal occupation or employment
and five-year employment history of each of the directors and executive officers
of Parent and Purchaser and certain other information are set forth in Schedule
I hereto.
Summary Financial Information. Set forth below is a summary of certain
consolidated financial data with respect to Parent taken or derived from
Parent's Annual Report on Form 10-K for the years ended December 31, 1996 and
December 31, 1995 and Quarterly Report on Form 10-Q for the nine months ended
September 30, 1997, as filed by Parent with the Commission. As set forth in
Parent's Annual Report on Form 10-K for the year ended December 31, 1996, the
amounts have been restated to reflect the sale of Parent's Information Systems
and Services segment and to report it as discontinued operations, and to give
retroactive recognition to Parent's two-for-one stock dividend, each of which
occurred in 1996. More comprehensive financial information is included in such
reports (including management's discussion and analysis of financial condition
and results of operations) and other documents filed by Parent with the
Commission, and the following financial data is qualified in its entirety by
reference to such reports and other documents, including the financial
information and related notes contained therein. Such reports and other
documents may be examined and copies thereof may be obtained from the offices of
the Commission and the New York Stock Exchange, Inc. in the manner set forth
below.
13
<PAGE> 16
TRW INC.
SELECTED CONSOLIDATED FINANCIAL DATA
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
(UNAUDITED)
NINE MONTH
ENDED FISCAL YEAR ENDED
SEPTEMBER 30, DECEMBER 31,
--------------- ------------------------
1997 1996 1996 1995 1994
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA
Sales........................................ $8,033 $7,406 $9,857 $9,568 $8,491
Earnings from continuing operations.......... 362 73 182 395 277
Net earnings................................. 362 353 480 446 333
BALANCE SHEET DATA
Working capital.............................. 114 575 624 317 244
Total assets................................. 6,081 5,938 5,899 5,670 5,435
Long-term debt............................... 531 479 458 539 693
Stockholder's investment..................... 2,225 2,224 2,189 2,172 1,822
PER SHARE OF COMMON STOCK
Fully diluted earnings
Continuing operations..................... 2.82 .53 1.37 2.93 2.09
Net earnings.............................. 2.82 2.63 3.60 3.31 2.50
Primary earnings
Continuing operations..................... 2.85 .54 1.38 2.96 2.10
Net earnings.............................. 2.85 2.66 3.64 3.34 2.52
</TABLE>
Available Information. Parent is subject to the informational filing
requirements of the Exchange Act and therefore is obligated to file periodic
reports, proxy statements and other information with the Commission relating to
its business, financial condition and other matters. Information, as of
particular dates, concerning Parent's directors and officers, their
remuneration, options granted to them, the principal holders of Parent's
securities and any material interest of such persons in transactions with Parent
is required to be disclosed in such proxy statements and distributed to Parent's
stockholders and filed with the Commission. Such reports, proxy statements and
other information should be available for inspection at the public reference
facilities of the Commission located in Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and should also be available for inspection and copying
at prescribed rates at the regional offices of the Commission located at
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661,
and Seven World Trade Center, Suite 1300, New York, New York 10048. Such
reports, proxy statements and other information may also be obtained at the Web
site that the Commission maintains at http://www.sec.gov. Copies of this
material may also be obtained by mail, upon payment of the Commission's
customary fees, from the Commission's principal office at 450 Fifth Street,
N.W., Washington, D.C. 20549. Such material is also available for inspection at
the offices of the New York Stock Exchange, Inc., 20 Broad Street, New York, New
York 10005.
Beneficial Ownership of the Company Securities; Contacts with the
Company. As of the date of this Offer to Purchase, none of Parent, Purchaser
nor, to the knowledge of Parent and Purchaser, any of the persons listed on
Schedule I hereto or any associate or majority owned subsidiary of Parent,
Purchaser or any of the persons so listed, beneficially owns or has a right to
acquire directly or indirectly any Shares, and none of Parent, Purchaser nor, to
the knowledge of Parent and Purchaser, any of the persons or entities referred
to above, or any of the respective executive officers, directors or subsidiaries
of any of the foregoing, has effected any transactions in Shares during the past
60 days. Pursuant to the Stockholders Agreement, Purchaser has an option
exercisable
14
<PAGE> 17
only upon the occurrence of certain future events, to acquire the Shares
beneficially owned by the Carlyle Stockholders. See Section 11.
Except as set forth in Section 10, there have been no contacts,
negotiations or transactions between Parent, Purchaser, or, to the best
knowledge of Parent or Purchaser, any of the persons listed in Schedule I hereto
or any subsidiary of such persons, on the one hand, and the Company or its
executive officers, directors or affiliates, on the other hand, concerning a
merger, consolidation or acquisition, tender offer or other acquisition of
securities, election of directors, or a sale or other transfer of a material
amount of assets that would require reporting under the rules of the Commission.
Except as set forth in Section 11, none of Parent, Purchaser, or, to the best
knowledge of Parent or Purchaser, any of the persons listed in Schedule I hereto
or any subsidiary of such persons, has any contract, arrangement, understanding
or relationship with any other person with respect to any securities of the
Company.
9. SOURCE AND AMOUNT OF FUNDS.
The total amount of funds required by Purchaser to purchase all outstanding
Shares pursuant to the Offer and to pay fees and expenses related to the Offer
and the proposed Merger is estimated to be approximately $930 million.
Purchaser plans to obtain all funds needed for the Offer and the Merger
through a capital contribution and/or a loan which will be made by Parent to
Purchaser. Parent plans to use funds obtained from the issuance of commercial
paper, the issuance of long-term debt in the U.S. capital markets and/or from
borrowing from banks under its lines of credit. If Parent uses funds obtained
from borrowing under its lines of credit with banks, Parent anticipates that
such borrowings would be repaid with internally generated funds (including, if
the Merger is consummated, those of the Company) and from other sources which
may include the proceeds of future refinancings. The plan for repayment will be
based on Parent's review from time to time of the advisability of particular
actions, as well as prevailing interest rates, financial and other economic
conditions and such other factors as Parent may deem appropriate.
Parent maintains a committed revolving credit agreement with 17 banks (the
"Multi-Year Revolver"). The Multi-Year Revolver allows Parent and its borrowing
subsidiaries to borrow up to $750 million through the incurrence of base rate,
domestic CD, Eurocurrency and/or negotiated loans. The commitments under the
Multi-Year Revolver terminate on July 1, 2002, unless extended for one or more
successive one-year periods as provided for by the Multi-Year Revolver.
Parent has requested and obtained commitments from members of its
Multi-Year Revolver bank group to provide a 364-day revolving credit agreement
(the "364-Day Revolver," together with the Multi-Year Revolver the "Revolving
Credit Facilities") to become effective on December 10, 1997. The 364-Day
Revolver will allow Parent and its borrowing subsidiaries to borrow up to an
additional $750 million through the incurrence of base rate, domestic CD,
Eurocurrency and/or negotiated loans. The commitments under the 364-Day Revolver
will terminate on December 8, 1998, unless the Parent elects to extend the
termination as provided by the 364-Day Revolver.
The following is a summary of the principal terms of the Revolving Credit
Facilities based upon the Commitment Letters. This summary is qualified in its
entirety by reference to the Commitment Letters, a form of which is filed as an
exhibit to Parent's and Purchaser's Tender Offer Statement on Schedule 14D-1
(the "Schedule 14D-1") of which this Offer to Purchase is an exhibit.
The amounts borrowed pursuant to the Revolving Credit Facilities will bear
interest at (i) a negotiated rate, (ii) the banks' prime, base or reference
rate, (iii) a rate based on the banks' cost of funds in the secondary
certificate of deposit market plus an interest rate margin ranging from 0.275%
to 0.600% based on the rating of the senior, unsecured long-term debt of Parent
assigned from time to time by Moody's Investor Service ("Moody's") and Standard
& Poor's ("S&P"), or (iv) a rate based upon an Interbank Offered Rate plus an
interest rate margin ranging from 0.175% to 0.500% based on the rating of the
senior, unsecured long-term debt of Parent assigned from time to time by Moody's
and S&P. Parent has agreed to pay a quarterly commitment fee
15
<PAGE> 18
on the undrawn portion of the Revolving Credit Facilities at rates based on
ratings of the senior unsecured long-term debt of Parent assigned from time to
time by Moody's and S&P.
The commitments provide that each bank will enter into the form of
Revolving Credit Agreement attached to the commitment letters.
The Revolving Credit Agreement will contain conditions precedent,
representations and warranties, covenants (including financial covenants),
events of default and other provisions customary for such financings.
10. BACKGROUND OF THE OFFER.
In September 1997, a representative of WP&Co., the Company's financial
advisor, contacted a representative of Parent to inquire as to whether Parent
would be interested in exploring the possible acquisition of the Company. The
representative of Parent indicated that Parent would be interested in exploring
the possible acquisition of the Company and, on September 29, 1997, Parent
executed a confidentiality/standstill agreement providing for, among other
things, the receipt and treatment of confidential information regarding the
Company.
A meeting between the senior management of the Company and representatives
of Parent was held on October 10, 1997. Representatives of the parties exchanged
information and held a number of conversations over the following two-week
period.
On October 31, 1997, a representative of Parent informed a representative
of WP&Co. that Parent would be interested in pursuing the possible acquisition
of the Company at $28.00 per Share. The representative of WP&Co. expressed the
view that the Company Board would not be interested in pursuing a sale of the
Company at that price indication. The representative of Parent informed the
representative of WP&Co. that Parent would be willing to consider enhancing its
indication only if it had a high level of assurance that the transaction would
be completed.
On November 4, 1997, a representative of WP&Co. suggested that the Company
would be unlikely to proceed to enter into exclusive negotiations with Parent
unless Parent increased its indicated price. A representative of Parent informed
the WP&Co. representative that Parent's willingness to enhance its indication
from $28.00 per Share would depend on the specific terms of the transaction,
particularly the terms relevant to the likelihood that the transaction would be
completed. Accordingly, the Company furnished Parent drafts of the Merger
Agreement and the Stockholders Agreement.
On November 6, 1997, Mr. Odeen met with, among other representatives of
Parent, Joseph T. Gorman, the Chairman and Chief Executive Officer of Parent.
Mr. Gorman indicated at the meeting that, if the transaction were to proceed,
Parent would require that arrangements be developed to ensure the continuity of
management of the Company.
On November 10, 1997, a representative of Parent informed a representative
of WP&Co. that Parent would be prepared to increase its $28.00 per Share price
indication, subject to modifying the terms of draft documentation so as to
provide a high level of assurance that the transaction would be completed. These
modifications included the receipt of an irrevocable option and agreement to
tender by the Carlyle Stockholders, a $35 million break-up fee and a no-shop
covenant which specifically defined the types of transactions that would be
excepted therefrom. Parent's representative also reiterated Parent's requirement
that satisfactory employment arrangements be agreed upon by certain members of
senior management of the Company as a part of the transaction. The WP&Co.
representative indicated that these terms might be acceptable at a price close
to $30.00 per Share. The Parent representative requested that the WP&Co.
representative confirm whether these conditions would be acceptable before
further price discussions were conducted. Thereafter, a WP&Co. representative
informed a Parent representative that Parent's preconditions to further price
negotiations were acceptable in principle to the Company, subject to final
agreement on price, and, based on a conversation with the Carlyle Stockholders,
were similarly acceptable to them.
On November 12, 1997, a representative of Parent informed a representative
of WP&Co. that, subject to the Company's agreement to the terms outlined on
November 10, 1997 and to the Company's willingness to negotiate exclusively with
Parent for the period required to reach an agreement on definitive
documentation, Parent would be willing to increase its indicated price to $29.50
per Share. A representative of
16
<PAGE> 19
WP&Co., on behalf of the Company, informed a representative of Parent that the
Company would be willing to begin a period of exclusive negotiations based on
the foregoing. On November 14, 1997, the Company and the Carlyle Stockholders
entered into an agreement to negotiate with Parent exclusively, for up to 17
days, regarding a possible acquisition. Over the course of the next week,
representatives of the parties continued to exchange information and meet or
otherwise communicate on a substantially continuous basis to finalize the
documentation relating to the Offer and the Merger.
At a special meeting of the Board of Directors of Parent held on November
20, 1997, Bear Stearns rendered its opinion to the Board of Directors of Parent
that the $29.50 per Share price to be paid pursuant to the Offer is fair, from a
financial point of view, to the public shareholders of Parent. After receiving
such opinion, the Board of Directors of Parent unanimously approved the Merger
Agreement the Stockholders Agreement and the transactions contemplated thereby.
Later that afternoon, the Company Board unanimously approved the Merger
Agreement, the Stockholders Agreement and the transactions contemplated thereby.
Late in the evening on November 20, 1997, the parties executed the Merger
Agreement and the Stockholders Agreement. At approximately 3:00 a.m., New York
City time, on November 21, 1997, Parent and the Company published a joint press
release announcing the transaction.
11. PURPOSE; MERGER AGREEMENT; STOCKHOLDERS AGREEMENT; VOTE REQUIRED TO APPROVE
THE MERGER; APPRAISAL RIGHTS; PLANS FOR THE COMPANY; GOING PRIVATE
TRANSACTIONS.
PURPOSE
The purpose of the Offer is to acquire control of, and the entire equity
interest in, the Company. The Offer, as the first step in the acquisition of the
Company, is intended to facilitate the acquisition of all the Shares. The
purpose of the Merger is to acquire all Shares not purchased pursuant to the
Offer or otherwise.
MERGER AGREEMENT
The following is a summary of certain provisions of the Merger Agreement
which, together with summaries of Merger Agreement provisions described
elsewhere in this Offer to Purchase, constitutes a summary of all of the
material provisions of the Merger Agreement. The summary of Merger Agreement
provisions in this Offer to Purchase is qualified in its entirety by reference
to the Merger Agreement. A copy of the Merger Agreement has been filed with the
Commission as an exhibit to the Schedule 14D-1 and is incorporated herein by
reference. The Merger Agreement may be examined and copies may be obtained at
the places and in the manner set forth in Section 8.
The Offer. The Merger Agreement provides for the commencement of the Offer
as promptly as practicable, but in no event later than five business days
following public announcement of the Merger Agreement. The obligation of Parent
to cause Purchaser to accept for payment any Shares tendered shall be subject to
the satisfaction of only the Offer Conditions described in Section 14. Under the
Merger Agreement, unless previously approved by the Company in writing, Parent
shall not permit Purchaser to (i) decrease the Per Share Amount or change the
form of consideration payable in the Offer, (ii) decrease the number of Shares
sought in the Offer, (iii) amend or waive satisfaction of the Minimum Condition,
or (iv) impose additional conditions to the Offer or amend any other term of the
Offer in any manner adverse to the Stockholders, provided that nothing in the
Merger Agreement will prohibit any waiver of any condition or term of the Offer
(other than the Minimum Condition) or any other action permitted thereby. Upon
the terms and subject to the conditions of the Offer, Parent will cause
Purchaser to accept for payment and purchase, as soon as practicable after the
Expiration Date, all Shares validly tendered and not properly withdrawn prior to
the Expiration Date.
Directors. The Merger Agreement provides that, promptly upon the purchase
by Purchaser of any Shares pursuant to the Offer (and assuming that the Minimum
Condition has been satisfied), and from time to time thereafter as Shares are
acquired by Purchaser, Purchaser shall be entitled to designate such number of
directors,
17
<PAGE> 20
rounded up to the next whole number, on the Company Board as will give
Purchaser, subject to compliance with Section 14(f) of the Exchange Act,
representation on the Company Board equal to at least that number of directors
which equals the product of the total number of members of the Company Board
(giving effect to the directors appointed or elected pursuant to this sentence
and including current directors serving as officers of the Company) multiplied
by the percentage that the aggregate number of Shares beneficially owned by
Purchaser or any affiliate of Parent (including for purposes of such
calculations such Shares as are accepted for payment pursuant to the Offer, but
excluding Shares held by the Company) bears to the number of Shares outstanding.
At such times, if requested by Parent, the Company will also cause each
committee of the Company Board and the Board of Directors of each Company
Subsidiary (as defined in the Merger Agreement) to include persons designated by
Parent constituting the same percentage of each such committee and the Board of
Directors of each Company Subsidiary as Purchaser's designees are of the Company
Board. The Company shall, upon request of Parent, promptly increase the size of
the Company Board by whatever number of directors as is necessary to enable
Purchaser's designees to be elected to the Company Board in accordance with the
terms of the Merger Agreement and shall cause Purchaser's designees to be so
elected.
The Merger Agreement further provides that in the event that Purchaser's
designees are appointed or elected to the Company Board, until the Effective
Time, the Company Board shall have at least one member who is a director of the
Company on the date of the Merger Agreement and who is neither an officer of the
Company nor a designee, stockholder, affiliate or associate (within the meaning
of the federal securities laws) of Parent (one or more of such directors being
referred to herein as the "Independent Directors"). If no Independent Directors
remain, the other members of the Company Board shall designate one person to
fill one of the vacancies who shall not be either an officer of the Company or a
designee, shareholder, affiliate or associate of Parent, and such person shall
be deemed to be an Independent Director for purposes of the Merger Agreement.
Following the election or appointment of Purchaser's designees pursuant to the
Merger Agreement and prior to the Effective Time, any (i) amendment or
termination of the Merger Agreement on behalf of the Company, (ii) exercise or
waiver of any of the Company's rights or remedies under the Merger Agreement,
(iii) extension of the time for performance of Parent's obligations under the
Merger Agreement or (iv) other action required to be taken by the Company Board
in connection with the Merger Agreement will require the affirmative vote of a
majority of the Independent Directors then in office.
The Merger. The Merger Agreement provides that as soon as practicable
after the satisfaction or waiver of the conditions to the Merger set forth in
the Merger Agreement, on the terms and subject to the conditions of the Merger
Agreement and in accordance with the Delaware Code, Purchaser shall be merged
with and into the Company, and the Company, as the Surviving Corporation in the
Merger shall continue its corporate existence under the laws of the State of
Delaware as a subsidiary of Parent. At Parent's election, any direct or indirect
subsidiary of Parent other than Purchaser may be merged with and into the
Company instead of Purchaser. In the event of such an election, the parties
agree to execute an appropriate amendment to the Merger Agreement to reflect
such election. The parties will prepare and execute a certificate of merger in
order to comply in all respects with the requirements of the Delaware Code and
with the provisions of the Merger Agreement or, if applicable, a certificate of
ownership and merger (each, a "Certificate of Merger"). The Merger will become
effective at the time of the filing of the Certificate of Merger with the
Secretary of State of the State of Delaware in accordance with the Delaware Code
or at such later time as is specified in the Certificate of Merger.
Pursuant to the Merger Agreement, in the Merger each then outstanding Share
(other than shares held in the treasury of the Company or owned by Parent or any
direct or indirect wholly owned subsidiary of Parent (other than Shares held by
TRW Investment Management Company, its advisors or Parent's employee benefit
plans) or Dissenting Shares, as defined below) will be canceled and extinguished
and converted into the right to receive an amount in cash equal to the Per Share
Amount or such higher price as is paid by Purchaser pursuant to the Offer,
without interest thereon (the "Merger Consideration"). Although it is Parent's
intention to consummate the Merger as promptly as practicable, there can be no
assurance that the Merger will be consummated or, if consummated, of the timing
thereof.
The Merger Agreement also provides that the Certificate of Incorporation
and the Bylaws of the Surviving Corporation shall be the Certificate of
Incorporation and the Bylaws of Purchaser in effect at the Effective Time
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(subject to any subsequent amendments) and that the directors of Purchaser
immediately prior to the Effective Time shall be the directors of the Surviving
Corporation, and the officers of the Company immediately prior to the Effective
Time shall be the officers of the Surviving Corporation, in each case until
their successors are duly elected or appointed and qualified.
Stockholders Meeting and Approval. Pursuant to the Merger Agreement, as
soon as practicable after the consummation of the Offer and if required by
applicable law, the Company will take all steps necessary to duly call, give
notice of, convene and hold a meeting of its Stockholders for the purpose of
voting upon the approval and adoption of the Merger Agreement and the
transactions contemplated thereby (the "Company Proposals"). The Merger
Agreement provides that (i) the Company shall prepare and file with the
Commission, and promptly thereafter shall mail to Stockholders, a proxy
statement in connection with a meeting of the Stockholders to consider the
Merger, or an information statement, as appropriate (such proxy statement or
information statement, as amended or supplemented, is referred to as the "Proxy
Statement"), (ii) the Proxy Statement will include the unanimous recommendation
of the Company Board that the Stockholders of the Company vote in favor of the
adoption of the Merger Agreement and the transactions contemplated thereby and
the written fairness opinion of WP&Co. that the consideration to be received by
the Stockholders of the Company pursuant to the Offer and the Merger is fair
from a financial point of view and (iii) the Company will use its reasonable
best efforts to obtain any necessary approval by the Stockholders of the Company
Proposals.
The Merger Agreement provides that, notwithstanding the foregoing, in the
event that Purchaser shall acquire at least 90% of the outstanding Shares, the
Company will, at the request of Purchaser, subject to the satisfaction of the
conditions to the Merger set forth in the Merger Agreement, take all necessary
and appropriate action to cause the Merger to become effective as soon as
reasonably practicable after such acquisition, without a meeting of the
Company's Stockholders, in accordance with the "short form" merger provisions of
Section 253 of the Delaware Code.
Conversion of Shares. At the Effective Time, by virtue of the Merger and
without any action on the part of Purchaser, the Company or the holder of any of
the following securities:
(i) each Share issued and outstanding immediately prior to the
Effective Time (other than any Shares to be canceled as described in clause
(ii) below and any Dissenting Shares) shall be canceled and extinguished
and be converted into the right to receive the Merger Consideration
promptly upon surrender of the certificate representing such Share or
appropriate proof of lost certificates, in accordance with the Merger
Agreement and from and after the Effective Time, the holders of
certificates evidencing ownership of any such Shares outstanding
immediately prior to the Effective Time shall cease to have any rights with
respect to such Shares except as otherwise provided for in the Merger
Agreement or by applicable law;
(ii) each Share held in the treasury of the Company and each Share
owned by Parent or any direct or indirect wholly owned subsidiary of Parent
(other than Shares held by TRW Investment Management Company, its advisors,
or Parent's employee benefit plans) immediately before the Effective Time
shall be canceled and extinguished and no payment or other consideration
shall be made with respect thereto; and
(iii) the shares of Purchaser common stock outstanding immediately
prior to the Merger shall be converted into one validly issued, fully paid
and non-assessable share of the common stock of the Surviving Corporation,
which such share shall constitute all of the issued and outstanding capital
stock of the Surviving Corporation and shall be owned by Parent.
The Merger Agreement further provides that, notwithstanding any provision
of the Merger Agreement to the contrary, any Shares issued and outstanding
immediately prior to the Effective Time and held by a Stockholder who has
demanded and perfected his demand for appraisal of his Shares in accordance with
the Delaware Code (including, but not limited to Section 262 thereof) and as of
the Effective Time has neither effectively withdrawn nor lost his right to such
appraisal ("Dissenting Shares") shall not be converted into or represent a right
to receive the Merger Consideration, but the holder thereof shall be entitled to
only such rights as are granted by the Delaware Code. If any Stockholder who
demands appraisal of his Shares under the Delaware Code shall effectively
withdraw or lose (through failure to perfect or otherwise) his right to
appraisal, then as of the Effective Time or the occurrence of such event,
whichever occurs later, such Stockholder's Shares shall automatically be
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<PAGE> 22
converted into and represent only the right to receive the Merger Consideration,
without interest thereon, upon surrender of the Share Certificate(s).
Termination of the Merger Agreement. The Merger Agreement may be
terminated and the Merger may be abandoned at any time prior to the Effective
Time, whether before or after adoption of the Merger Agreement by the
Stockholders:
(i) by mutual written consent of the Company and Parent or by the
mutual action of their respective Boards of Directors;
(ii) by either Parent or the Company if any nation or government, any
state or other political subdivision thereof, any entity, authority or body
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government, domestic or foreign (each a
"Governmental Authority") shall have issued an order, decree or ruling or
taken any other action permanently enjoining, restraining or otherwise
prohibiting the consummation of the transactions contemplated by the Merger
Agreement or, for the benefit of Parent only, the Stockholders Agreement,
and such order, decree or ruling or other action shall have become final
and nonappealable;
(iii) by Parent if the Company shall have breached in any material
respect any of its representations, warranties, covenants or other
agreements in the Merger Agreement and such breach is incapable of being
cured or has not been cured within one business day prior to the then
scheduled Expiration Date;
(iv) by Parent if (a) the Company Board or any committee thereof shall
have withdrawn or modified in a manner adverse to Parent its approval or
recommendation of the Offer or the approval or adoption of any of the
Company Proposals, or failed to reconfirm its recommendation within five
business days after a written request to do so, or approved or recommended
any Takeover Proposal (as defined below) or (b) the Company Board or any
committee thereof shall have resolved to take any of the foregoing actions;
(v) by Parent if the Offer shall have expired or been terminated or
withdrawn in accordance with the Merger Agreement without any Shares being
purchased under the Offer by Purchaser or any of the events that are Offer
Conditions shall have occurred and be continuing at the time of
termination;
(vi) by the Company or Parent if the Offer shall not have been
consummated on or before March 20, 1998, provided that the Company's
failure to perform any of its obligations under the Merger Agreement does
not result in the failure of the Offer to be so consummated by such time;
(vii) by the Company if Parent shall have breached in any material
respect any of its representations, warranties, covenants or other
agreements contained in the Merger Agreement, which breach or failure to
perform is incapable of being cured or has not been cured within one
business day prior to the Expiration Date;
(viii) by the Company in order to enter into a definitive agreement
providing for a Superior Proposal (as defined below) entered into in
accordance with the exceptions to the non-solicitation covenants described
below, provided that prior thereto the Company has paid the Termination Fee
(as defined below) in accordance with the Merger Agreement; or
(ix) by Parent if the Company, any of its officers or directors or
financial or legal advisors shall take any of the actions that would be
proscribed by the non-solicitation covenants described below but for the
exceptions thereto described below.
Non-Solicitation Covenants. The Merger Agreement provides that the Company
may not, nor permit any of the Company Subsidiaries to, nor authorize or permit
any of its officers, directors or employees, or any investment banker, attorney,
accountant or other representative retained by it or any of the Company
Subsidiaries to, directly or indirectly, (i) solicit, initiate or encourage
(including by way of furnishing information), or take any other action designed
or reasonably likely to facilitate, any inquiries or the making of any proposal
which constitutes, or may reasonably be expected to lead to, any Takeover
Proposal or (ii) participate in any discussions or negotiations regarding any
Takeover Proposal. In addition, pursuant to the Merger Agreement, neither the
Company Board nor any committee thereof may (a) withdraw or modify, or propose
publicly to withdraw or
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<PAGE> 23
modify, in a manner adverse to Parent, the approval or recommendation by the
Company Board or such committee of the Offer, the Stockholders Agreement or the
Company Proposals, (b) approve or recommend, or propose to approve or recommend,
any Takeover Proposal, or (c) cause the Company to enter into any letter of
intent, agreement in principle, acquisition agreement or similar agreement
related to any Takeover Proposal.
The foregoing restrictions contain exceptions so that if, at any time prior
to the Expiration Date and following the receipt of a Superior Proposal, the
Company Board determines in good faith, based upon the advice of outside
counsel, that such action is necessary for the Company Board to comply with its
fiduciary duties to the Stockholders under applicable law, in response to a
Superior Proposal that was made in circumstances not otherwise involving a
breach of the Merger Agreement, and subject to compliance with the covenants
described in the second succeeding paragraph, (i) the Company may (a) furnish
information with respect to the Company to any person pursuant to a
confidentiality agreement having terms substantially the same as the
Confidentiality Agreement, provided that (1) such confidentiality agreement may
not include any provision calling for an exclusive right to negotiate with the
Company and (2) the Company advises Parent of all such nonpublic information
delivered to such person concurrently with its delivery to the requesting party,
and (b) participate in negotiations regarding such Superior Proposal and (ii)
the Company Board may (a) withdraw or modify its approval or recommendation of
the Offer or the Company Proposals or (b) approve or recommend a Superior
Proposal, provided, however, that any actions described in the preceding clauses
(a) and (b) of this clause (ii) may be taken only at a time that is after the
fifth business day following Parent's receipt of written notice (a "Board Action
Notice") advising Parent that the Company Board has received a Superior
Proposal, specifying the material terms and conditions of such Superior
Proposal, identifying the person making such Superior Proposal and providing
notice of the determination of the Company Board of what action referred to
above that the Company Board has determined to take (provided further that the
foregoing proviso shall not prevent the Company Board from taking any actions
described in clause (ii)(a) above within five business days of the Expiration
Date so long as the Board Action Notice is received by Parent prior to 12:00
Noon, New York City time, on the then-scheduled Expiration Date.
Under the Merger Agreement (i) the term "Takeover Proposal" means any
inquiry, proposal or offer from any person relating to any direct or indirect
acquisition or purchase of 15% or more of the assets of the Company and the
Company Subsidiaries or 15% or more of any class of equity securities of the
Company or any Company Subsidiary, any tender offer or exchange offer that if
consummated would result in any person beneficially owning 15% or more of any
class of equity securities of the Company or any Company Subsidiary, any merger,
consolidation, share exchange, business combination, recapitalization,
liquidation, dissolution or similar transaction involving the Company or any
Company Subsidiary, other than the transactions contemplated by the Merger
Agreement and (ii) the term "Superior Proposal" means a bona fide written
Takeover Proposal which the majority of the disinterested members of the Company
Board determines, in their good faith judgment (based on the opinion of
independent financial advisors) that the value of the consideration provided for
in such proposal exceeds 110% of the Per Share Amount then provided in the
Offer, and, considering all relevant factors, is as or more favorable to the
Company and the Stockholders than the Offer and the Merger and for which
financing, to the extent required, is fully committed or which, in the good
faith judgment of a majority of the disinterested members of the Company Board
(based on the advice of independent financial advisors), is reasonably capable
of being financed by such third party.
The Merger Agreement requires the Company to promptly advise Parent orally
and in writing of any request for information or of any Takeover Proposal, the
material terms and conditions of such request or Takeover Proposal and the
identity of the person making such request or Takeover Proposal and to promptly
advise Parent of all significant developments which could reasonably be expected
to culminate in the Company Board withdrawing, modifying or amending its
recommendation of the Offer, the Merger and the transactions contemplated by the
Merger Agreement.
The Merger Agreement does not prohibit the Company from (i) taking and
disclosing to the Stockholders a position contemplated by Rule 14e-2(a) under
the Exchange Act or (ii) from making any disclosure to the Stockholders,
provided, however, that neither the Company nor the Company Board nor any
committee thereof shall, except in accordance with the covenants in the Merger
Agreement described above, withdraw or modify, or
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<PAGE> 24
propose publicly to withdraw or modify, its position with respect to the Offer
or the Company Proposals or approve or recommend, or propose publicly to approve
or recommend, a Takeover Proposal.
Termination Fee. The Merger Agreement provides that the Company shall pay
to Parent a fee of $35,000,000 (the "Termination Fee") in the event that:
(i) a Takeover Proposal has been made known to the Company or has been
made directly to the Stockholders generally or any person or entity has
publicly announced an intention (whether or not conditional) to make a
Takeover Proposal and thereafter the Merger Agreement has been terminated
by the Company because the Offer has not been consummated on or before
March 20, 1998 (provided the Company's failure to perform any of its
obligations under the Merger Agreement does not result in the failure of
the Offer to be consummated by such time);
(ii) the Company terminates the Merger Agreement in order to enter
into a definitive agreement providing for a Superior Proposal entered into
in accordance with the non-solicitation provisions of the Merger Agreement;
(iii) Parent terminates the Merger Agreement after the Company Board
or any committee thereof has withdrawn or modified in a manner adverse to
Parent its approval or recommendation of the Offer or any of the Company
Proposals, or failed to reconfirm its recommendation within five business
days after a written request to do so, or approved or recommended any
Takeover Proposal or the Company Board or any committee thereof has
resolved to take any of the foregoing actions;
(iv) Parent terminates the Merger Agreement after the Company or any
of its officers or directors or financial or legal advisors takes any
action that would be proscribed by the non-solicitation provisions of the
Merger Agreement, but for the exceptions contained therein; or
(v) Parent terminates the Merger Agreement after a Takeover Proposal
has been made and the Company has intentionally breached in any material
respect any of its representations, warranties, covenants or other
agreements contained in the Merger Agreement which breach or failure to
perform is incapable of being cured and has not been cured within one
business day prior to the then scheduled Expiration Date;
provided that the Termination Fee will not become payable under clauses (i) or
(v) above unless and until, within 18 months of such termination, the Company or
any of the Company Subsidiaries enters into a definitive agreement providing for
any Takeover Proposal.
In the event a Termination Fee becomes payable pursuant to the Merger
Agreement, in addition to the Termination Fee, the Company is obligated to pay
up to $5,000,000 of Parent's reasonable out-of-pocket charges and expenses
incurred in connection with the Merger Agreement and the transactions
contemplated thereby. Such charges and expenses and the Termination Fee must be
paid by the Company regardless of any alleged breach by Parent of its
obligations under the Merger Agreement, provided that no payment of such amounts
by the Company will operate or be construed as a waiver by the Company of any
breach of the Merger Agreement by Parent or Purchaser or of any rights of the
Company in respect thereof.
Except as described above, each party will bear its own expenses in
connection with the Merger Agreement and the transactions contemplated thereby.
Access to Information; Confidentiality. Pursuant to the Merger Agreement,
from the date thereof to the Effective Time, the Company is obligated to, and to
cause its accountants and legal counsel to, give Parent and its respective
authorized representatives (including, without limitation, its financial
advisors, accountants and legal counsel), at all reasonable times, access as
reasonably requested to all personnel, offices and other facilities and to all
contracts, agreements, commitments, books and records of or pertaining to the
Company and the Company Subsidiaries. The Company will also permit the foregoing
to make such reasonable inspections as they may require and will cause its
officers promptly to furnish Parent with (i) such financial and operating data
and other information with respect to the business and properties of the Company
and the Company Subsidiaries as Parent may from time to time reasonably request,
and (ii) a copy of each report, schedule and other document filed or
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received by the Company or any of the Company Subsidiaries pursuant to the
requirements of applicable securities laws or the National Association of
Securities Dealers ("NASD").
The parties to the Merger Agreement will continue to be bound by the terms
of the Confidentiality Agreement, dated as of September 12, 1997, between Parent
and the Company (the "Confidentiality Agreement") except that the
non-solicitation of Company employees, standstill and certain other provisions
of the Confidentiality Agreement are terminated as of the date of the Merger
Agreement and all of Parent's obligations under the Confidentiality Agreement
will be extinguished as of the Effective Time. In the event of a termination of
the Merger Agreement in accordance with its terms, Parent's covenants regarding
non-solicitation of Company employees, the standstill provisions and certain
other provisions in the Confidentiality Agreement will be reinstated as of the
date of such termination.
The Merger Agreement further provides that each of Parent and Purchaser
will hold and will cause its respective officers, employees, accountants,
counsel, financial advisors and other representatives to hold, any nonpublic
information in accordance with the terms of the Confidentiality Agreement. A
copy of such Confidentiality Agreement is filed as an Exhibit to the Schedule
14D-1.
Efforts to Consummate. On the terms and subject to the conditions of the
Merger Agreement, each of the parties has agreed to use its reasonable best
efforts to take, or cause to be taken, all actions and to do, or cause to be
done, all things necessary, proper or advisable to consummate and make effective
as promptly as practicable the transactions contemplated by the Merger
Agreement, including, but not limited to, (i) obtaining all consents, approvals,
waivers or authorizations of, notices to or declarations or filings ("Consents")
with Governmental Authorities and each party's respective other third parties
required for the consummation of the Offer and the Merger and the transactions
contemplated thereby, (ii) timely making all necessary filings under the HSR Act
and German anticompetition laws and (iii) having vacated, dismissed or withdrawn
any order, stay, decree, judgment or injunction of any Governmental Authority
which temporarily, preliminarily or permanently prohibits or prevents the
transactions contemplated by the Merger Agreement. Upon the terms and subject to
the conditions of the Merger Agreement, each party has committed to use their
reasonable best efforts to take, or cause to be taken, all actions and to do, or
cause to be done, all things necessary to satisfy the other conditions to the
closing of the transactions contemplated by the Merger Agreement.
Notwithstanding any other provision contained in the Merger Agreement, in
no event will Parent, Purchaser or any of their affiliates be required to take
or fail to take any action in order to obtain or make a Consent arising out of
any contractual or legal obligation of or applicable to the Company or the
Company Subsidiaries, other than obligations such as those under the HSR Act
which apply to both the Company and Parent, Purchaser and any of their
affiliates, and in no event will Parent, Purchaser or any of their affiliates be
required to enter into or offer to enter into any divestiture, hold-separate,
business limitation or similar agreement or undertaking in connection with the
Merger Agreement or the transactions contemplated thereby.
Conduct of Business Pending the Merger. Pursuant to the Merger Agreement,
the Company has covenanted and agreed that, except for certain limited
exceptions set forth in the Company Disclosure Letter dated November 20, 1997,
during the period from the date of the Merger Agreement to the Effective Time,
the Company shall conduct, and shall cause the Company Subsidiaries to conduct,
its or their businesses in the ordinary course and consistent with past
practice, and the Company shall, and shall cause the Company Subsidiaries to,
use its or their reasonable commercial efforts to preserve intact its business
organization, to keep available the services of its officers and employees and
preserve intact the present commercial relationships of the Company and the
Company Subsidiaries with all persons with whom it does business. Without
limiting the generality of or effect of the foregoing, the Company has agreed
that neither it nor any of the Company Subsidiaries will:
(i) amend or propose to amend its certificate of incorporation or
bylaws (or comparable governing instruments);
(ii) authorize for issuance, issue, deliver, grant, sell, pledge,
dispose of or propose to issue, deliver, grant, sell, pledge or dispose of
any shares of, or any rights of any kind to acquire or sell any shares of,
the capital stock or other securities of the Company or any of the Company
Subsidiaries, except for (a) the
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issuance of up to 3,327,445 Shares pursuant to the exercise of either
incentive or non-qualified stock options outstanding on November 19, 1997
in accordance with their present terms and (b) shares issued under the
Company's 1996 Employee Stock Purchase Plan that are issuable on or prior
to the date of the Merger Agreement;
(iii) split, combine or reclassify any shares of its capital stock or
declare, pay or set aside any dividend or other distribution (whether in
cash, stock or property or any combination thereof) in respect of its
capital stock, other than dividends or distributions to the Company or a
Company Subsidiary in the ordinary course of business, or directly or
indirectly redeem, purchase or otherwise acquire or offer to acquire,
directly or indirectly, any shares of its capital stock or other
securities;
(iv) (a) other than in the ordinary course of business consistent with
past practice, (1) assume, guarantee, endorse or otherwise become liable or
responsible (whether directly, indirectly, contingently or otherwise) for
the obligations of any person or (2) make any loans, advances or capital
contributions to, or investments in, any other person (other than to a
Company Subsidiary and customary travel, relocation or business advances to
employees); (b) acquire the stock or assets of, or merge or consolidate
with, any other person; (c) voluntarily incur any material liability or
obligation (absolute, accrued, contingent or otherwise) other than in the
ordinary course of business consistent with past practice; (d) sell,
transfer, mortgage, pledge or otherwise dispose of, or encumber, or agree
to sell, transfer, mortgage, pledge or otherwise dispose of or encumber,
any assets or properties, real, personal or mixed material to the Company
and the Company Subsidiaries other than sales of products in the ordinary
course of business and in a manner consistent with past practice; (e) incur
any indebtedness for borrowed money or issue any debt securities or assume,
guarantee or endorse, or otherwise as an accommodation become responsible
for, the obligations of any person, or make any loans, advances or capital
contributions to, or investments in, any other person (other than in the
ordinary course of business, consistent with past practice); (f) enter into
any contract or agreement other than in the ordinary course of business
consistent with past practice; or (g) authorize any single capital
expenditure which is in excess of $1,400,000 or capital expenditures
(during any two month period) which are, in the aggregate, in excess of
$4,000,000 for the Company and the Company Subsidiaries taken as a whole;
(v) increase in any manner the compensation of any of its directors,
officers or employees or enter into, establish, amend or terminate any
employment, consulting, retention, change in control, collective
bargaining, bonus or other incentive compensation, profit sharing, health
or other welfare, stock option or other equity, pension, retirement,
vacation, severance, deferred compensation or other compensation or benefit
plan, policy, agreement, trust, fund or arrangement with, for or in respect
of, any Stockholder, officer, director, other employee, agent, consultant
or affiliate other than (a) as required pursuant to the terms of agreements
in effect on the date of the Merger Agreement and specifically disclosed to
Parent (b) increases in salaries of employees who are not directors or
officers or Key Employees ("Key Employees" being all employees entitled to
severance and retention bonuses under arrangements established pursuant to
the Merger Agreement) made in the ordinary course of business consistent
with past practice, or (c) increases in salaries of Key Employees (other
than to Key Employees who are officers or are entitled to senior management
severance) with Parent's written consent, which may not be unreasonably
withheld;
(vi) except as may be required as a result of a change in law or in
generally accepted accounting principles, change any of the accounting
practices or principles used by it;
(vii) make any material tax election, settle or compromise any
material federal, state, local or foreign tax liability, or waive any
statute of limitations for any tax claim or assessment;
(viii) settle or compromise any pending or threatened suit, action or
claim which is material or which relates to the transactions contemplated
thereby;
(ix) adopt a plan of complete or partial liquidation, dissolution,
merger, consolidation, restructuring, recapitalization or other
reorganization of the Company or any of the Company Subsidiaries not
constituting an inactive subsidiary (other than the Merger);
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<PAGE> 27
(x) pay, discharge or satisfy any claims, liabilities or obligations
(absolute, accrued, asserted or unasserted, contingent or otherwise), other
than the payment, discharge or satisfaction (a) in the ordinary course of
business consistent with past practice of liabilities reflected or reserved
against in the financial statements of the Company or incurred in the
ordinary course of business and consistent with past practice and (b) of
liabilities required to be paid, discharged or satisfied pursuant to the
terms of any contract in existence on the date hereof (including, without
limitation, benefit plans relating to directors) or entered into in
accordance with the Merger Agreement;
(xi) permit any insurance policy naming the Company or any of the
Company Subsidiaries as a beneficiary or a loss payable payee to be
canceled or terminated without notice to Parent, except in the ordinary
course of business consistent with past practice; or
(xii) take, or offer or propose to take, or agree to take in writing
or otherwise, any of the actions described above or any action which would
make any of the representations or warranties of the Company contained in
the Merger Agreement untrue and incorrect in any material respect as of the
date when made if such action had then been taken, or would result in any
of the Offer Conditions not being satisfied.
The Company also agreed to, and to cause the Company Subsidiaries to, use
its or their best efforts to comply in all material respects with all laws
applicable to it or any of its properties, assets or business and maintain in
full force and effect all the permits of the Company necessary for, or otherwise
material to, such business.
Severance And Employee Benefit Arrangements. The Merger Agreement provides
that prior to the Effective Time, the Company will terminate its existing
severance plan, which was adopted as of September 26, 1997 (the "Company
Supplemental Severance Plan"), and that Parent will (i) enter into new
individual employment agreements with certain of the Company's executive
officers which will become effective upon the consummation of the Offer and (ii)
adopt the new severance arrangements described below. The Company Supplemental
Severance Plan provided, among other things, for the payment of severance
amounts and benefits of up to three times salary to the Company's executive
officers and certain other employees, including all those in positions of vice
president and above, upon certain terminations of employment following a change
in control. If the Merger Agreement is terminated prior to the Effective Time,
the new employment agreements and severance arrangements will not be effective,
and the Company Supplemental Severance Plan will continue in effect. The
following is a summary of the material terms of the new employment agreements
(the "New Employment Agreements") (the form of which is filed as an exhibit to
the Schedule 14D-1 and is incorporated herein by reference), severance
arrangements and other employee benefits arrangements made pursuant to the
Merger Agreement.
New Employment Agreements. Each of Philip A. Odeen, the Company's
President and Chief Executive Officer, William C. Hoover, an Executive Vice
President of the Company, Thomas A. Grissen, President, State and Local Systems,
David L. Patterson, President, Integrated Supply Chain, Helen M. Seltzer,
Corporate Vice President of the Company, and Roy V. Woodle, President and Chief
Executive Officer of Vinnell Corporation, a subsidiary of the Company, will
enter into a New Employment Agreement. During the three year term of each New
Employment Agreement, the executive will receive (i) an annual base salary of
not less than his or her annual base salary in effect immediately prior to the
Effective Time, (ii) annual incentive compensation based on incentive target
percentages of base salary comparable to such percentages in effect immediately
prior to the Effective Time and (iii) a continuation of comparable benefits. If
the executive is involuntarily terminated other than for cause, or if the
executive voluntarily terminates for certain specified limited reasons, he or
she will receive a termination payment determined as follows: (i) if the
termination occurs on or prior to the second anniversary of the Effective Time,
the termination payment will be three times the sum of the executive's annual
salary and target annual incentive compensation in effect immediately prior to
the termination, multiplied by a fraction the numerator of which is the number
of full months remaining in the employment term and the denominator of which is
36 and (ii) if the termination occurs after the second anniversary of the
Effective Time, the termination payment will be the sum of the executive's
annual salary and target annual compensation in effect immediately prior to the
termination.
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Management Severance. Up to 30 management employees and five senior
management employees who are not parties to a New Employment Agreement, will be
covered by a management severance policy which, among other things, will provide
for a termination payment if the employee is involuntarily terminated, other
than for cause, within two years of the Effective Time. The amount of the
termination payment will vary depending upon the time of their termination
relative to the Effective Time with a maximum termination payment of two times
the sum of the employee's annual salary and target annual incentive compensation
in effect at the time of termination.
Senior Management Severance. Five members of senior management who are not
parties to New Employment Agreements will, in addition to severance the benefits
described in the foregoing paragraph, receive a retention bonus equal to between
two and four months base salary provided they remain employed by the Surviving
Corporation, or another corporation designated by Parent, for a period between
six and twelve months after the Effective Time.
Professional Severance. Up to 85 management employees will be covered by a
professional severance policy which, among other things, will provide for a
termination payment if the employee is involuntarily terminated, other than for
cause, within one year of the Effective Time. The amount of the termination
payment will vary depending upon the time of the termination relative to the
Effective Time with a maximum termination payment of the sum of the employee's
annual salary and target annual incentive compensation in effect at the time of
termination.
Long-Term Incentive Plan; Retention Bonuses. In the Merger Agreement,
Parent and the Company agreed to develop a new long-term incentive plan that is
designed to incentivize and retain key employees of the Company. In addition, in
the Merger Agreement, Parent and the Company agreed to adopt a retention bonus
program to encourage certain employees not covered by the New Employment
Agreements or the new severance policies described above to remain employed by
the Surviving Corporation following the Effective Time. A covered employee will
receive a bonus equal to between two and four months base salary (in addition to
remaining eligible for normal severance benefits), provided such employee
remains employed for a period of between six and 12 months after the Effective
Time. If a covered employee remains employed for a period of at least four
months, but less than six months, after the Effective Time, the employee will
receive a bonus equal to between one and two months base salary (in addition to
remaining eligible for normal severance benefits).
Continuation of Certain Company Employee Benefit Plans. The Merger
Agreement provides that Parent will continue the Company's Supplemental
Executive Retirement Plan for current plan participants and Executive Deferred
Compensation Plan, or, in either case, provide comparable benefits. The Merger
Agreement also provides for the continuation of the Company 401(k) Savings Plan
and the Company-Oklahoma 401(k) Savings Plan, subject to certain amendments made
in connection with the Merger.
Indemnification. Purchaser and Parent have agreed in the Merger Agreement
that all rights to indemnification and exculpation from liabilities for acts or
omissions occurring at or prior to the Effective Time existing in favor of the
current or former directors, officers or employees of the Company as provided in
the Company's certificate of incorporation or by-laws will be assumed by the
Surviving Corporation, and Parent will cause the Surviving Corporation to honor
such obligations in accordance with the terms thereof, without further action,
as of the Effective Time, and such rights will continue in full force and effect
in accordance with their respective terms. Such rights, and the Surviving
Corporation's and Parent's concomitant obligations, shall apply in all respects
to the current or former directors, officers and employees of each of the
Company Subsidiaries as though such directors, officers and employees were
entitled to indemnification rights pursuant to the Company's certificate of
incorporation or bylaws as in effect on the date of the Merger Agreement. In
addition, from and after the Effective Time, directors and officers of the
Company who become or remain directors or officers of Parent will be entitled to
the same indemnity rights and protections (including those provided by
directors' and officers' liability insurance) as are afforded to other directors
and officers of Parent. The Merger Agreement provides further that Parent will,
and will cause the Surviving Corporation to, maintain for a period of not less
than six years from the Effective Time policies of directors' and officers'
liability insurance equivalent in all material respects to those maintained by
or on behalf of the Company and the Company Subsidiaries on the date of the
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Merger Agreement (and having coverage and containing terms and conditions which
in the aggregate are not less advantageous to the persons currently covered by
such policies as insured) with respect to claims arising from any actual or
alleged wrongful act or omission occurring prior to the Effective Time for which
a claim has not been made against any director or officer of the Company and/or
any director or officer of the Company Subsidiaries prior to the Effective Time,
so long as the aggregate annual premium therefor would not be in excess of 150%
of the premium currently paid by the Company and the Company Subsidiaries for
such insurance on the date of the Merger Agreement (such 150% amount, the
"Maximum Premium"). If the annual premium for such insurance exceeds the Maximum
Premium, then Parent will cause the Surviving Corporation to provide the maximum
coverage available for the Maximum Premium.
Options. In the Merger Agreement, the Company represented and warranted
and Parent and Purchaser acknowledged that all outstanding options to purchase
Shares (the "Company Options") granted under the Company's stock option plans,
each as amended (collectively, the "Company Option Plans"), whether or not then
exercisable or vested, pursuant to the terms of the Company Option Plans, will
be fully exercisable and vested during the ten-day period immediately prior to
the initial Expiration Date, and that, pursuant to the terms of the Company
Option Plans, all Company Options which are outstanding immediately prior to the
consummation of the Offer shall be canceled as of the consummation of the Offer
and the holders of Company Options will be entitled to receive from the Company
(or, at Parent's option, Parent) upon consummation of the Offer, in respect of
each Share subject to such Company Option, an amount in cash equal to the
excess, if any, of the Per Share Amount over the exercise price per share of
such Company Option (such payment to be net of applicable withholding taxes).
With respect to any person subject to Section 16(a) of the Exchange Act, any
such amount shall be paid as soon as practicable after the first date payment
can be made without liability to such person under Section 16(b) of the Exchange
Act. Upon the consummation of the Offer, Parent shall provide the Company with
the funds necessary to satisfy any such obligations under the Merger Agreement.
The Company has agreed to cause the Company Option Plans to terminate as of
the Effective Time and the Company has represented and warranted to Parent that
all Company Option Plans provide, or have been amended to provide, for the
actions described in the preceding paragraph.
The Company has represented and warranted that 3,327,445 Shares are
issuable pursuant to Company Options as of November 19, 1997 (and will therefore
become exercisable and canceled pursuant to the foregoing paragraph), and that
the aggregate exercise price of such options is approximately $49 million.
Representations and Warranties. The Merger Agreement contains various
customary representations and warranties of the parties thereto including,
without limitation, representations and warranties by the Company as to the
Company's capitalization, the absence of any required filings and consents, the
absence of conflicts with charter documents and contracts, Commission filings
and financial statements, the absence of certain changes or events, compliance
with laws, the absence of litigation, employee benefit plans, the filing and
compliance of reports with the requirements of the Commission, environmental
matters, brokers and taxes.
Merger Conditions. Under the Merger Agreement, the obligations of each
party to effect the Merger shall be subject to the fulfillment or waiver at or
prior to the Effective Time of the following conditions, provided that the
obligation of each party to effect the Merger shall not be relieved by the
failure of any such conditions if such failure is the proximate result of any
breach by such party of any of its material obligations under the Merger
Agreement:
(i) Purchaser shall have accepted for payment all Shares validly
tendered in the Offer and not withdrawn; provided, however, that neither
Parent nor Purchaser may invoke this condition if Parent shall have failed
to purchase Shares so tendered and not withdrawn in violation of the terms
of the Merger Agreement or the Offer;
(ii) if required, the Company Proposals shall have been approved at or
prior to the Effective Time by the requisite vote of the Stockholders of
the Company in accordance with the Delaware Code and the Company's
Certificate of Incorporation, which the Company has represented shall be
solely the affirmative vote of a majority of the outstanding Shares;
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(iii) no order, statute, rule, regulation, executive order, stay,
decree, judgment or injunction shall have been enacted, entered,
promulgated or enforced by any court or other Governmental Authority which
temporarily, preliminarily or permanently prohibits or prevents the
consummation of the Merger which has not been vacated, dismissed or
withdrawn prior to the Effective Time; or
(iv) on or prior to the closing date of the Merger, the waiting period
(and any extensions thereof) applicable to the Merger under the HSR Act and
similar German laws (see Section 15) shall have been terminated or shall
have expired.
Pursuant to the Merger Agreement, the obligations of Parent and Purchaser
to effect the Merger are subject to the satisfaction of the condition (which may
be waived in whole or in part by Parent) that the Company shall have performed
in all material respects all material obligations required to be performed by it
under the Merger Agreement on or before the earlier of (i) such time as Parent's
or Purchaser's designees shall constitute at least a majority of the Company
Board and (ii) the closing date; provided, however, that no failure by the
Company to have so performed any such material obligation shall constitute a
failure of satisfaction of the foregoing condition where the Company's failure
of performance was caused by Parent or occurred, and was actually known to
Parent, at or prior to the time Parent, Purchaser or any of their affiliates
accepted for payment any Shares pursuant to the Offer.
STOCKHOLDERS AGREEMENT
The following summary of the material terms of the Stockholders Agreement
is qualified in its entirety by reference to the copy of the Stockholders
Agreement filed as an exhibit to the Schedule 14D-1 and incorporated herein by
reference.
In connection with the execution of the Merger Agreement, certain
affiliates of The Carlyle Group, L.P. (each, a "Carlyle Stockholder") which
beneficially own 7,660,000 Shares, or approximately 25.8% of the issued and
outstanding Shares (the "Option Shares"), entered into an agreement (the
"Stockholders Agreement") in which they have agreed to tender their Shares
pursuant to the Offer and have granted Purchaser an option (the "Option") to
purchase such Shares at $29.50 per Share if (i) the Company becomes obligated to
pay the Termination Fee by reason of a termination of the Merger Agreement (a)
by Parent because the Company has breached in any material respect any of its
representations, warranties, covenants or other agreements in the Merger
Agreement (subject to opportunity to cure), (b) by Parent because the Company
Board has withdrawn or modified in a manner adverse to Parent its approval or
recommendation of the Offer or any of the Company Proposals or failed to
reconfirm its recommendation within five business days after a written request
to do so, or approved or recommended any Takeover Proposal or the Company Board
or any committee thereof has resolved to take any such action, or (c) by the
Company in order to enter into a definitive agreement providing for a Superior
Proposal or (ii) the Merger Agreement is terminated in accordance with its terms
for reasons other than the failure of Parent or Purchaser to fulfill any
obligation under the Merger Agreement. The Option also becomes exercisable if
the Offer is consummated but (due to failure by any Carlyle Stockholder to
validly tender and not properly withdraw) Purchaser has not accepted for payment
or paid for the Option Shares (in which case the price per Option Share will be
equal to the highest price paid in the Offer). The Option will become
exercisable in whole but not in part on the first to occur of the foregoing
events or, if later, the date on which the HSR Act and similar German law
waiting periods have expired or terminated or been waived or there exists no
injunction with respect to exercise of the Option and will remain exercisable
for a period of 30 days after the Option first becomes exercisable.
Voting of Shares. In the Stockholders Agreement, each Carlyle Stockholder
agrees that from the date thereof until the termination of the Stockholders
Agreement, at any meeting of the Stockholders, however called, and in any action
by consent of the Stockholders, such Carlyle Stockholder shall vote its Shares
(i) in favor of the Merger and the Merger Agreement (as amended from time to
time), (ii) against any Takeover Proposal and against any proposal for action or
agreement that would result in a breach of any covenant, representation or
warranty or any other obligation or agreement of the Company under the Merger
Agreement or which is reasonably likely to result in any of the conditions of
the Company's obligations under the Merger Agreement not being fulfilled, any
change in the directors of the Company, any change in the present capitalization
of the
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Company or any amendment to the Company's Certificate of Incorporation or
Bylaws, any other material change in the Company's corporate structure or
business, or any other action which in the case of each of the matters referred
to in this clause (ii) could reasonably be expected to impede, interfere with,
delay, postpone or materially adversely affect the transactions contemplated by
the Merger Agreement or the likelihood of such transactions being consummated
and (iii) in favor of any other matter necessary for consummation of the
transactions contemplated by the Merger Agreement which is considered at any
such meeting of Stockholders or in such consent, and in connection therewith to
execute any documents which are necessary or appropriate in order to effectuate
the foregoing, including the ability for Purchaser or its nominees to vote the
Shares directly.
Agreement not to Dispose or Encumber Shares. Each Carlyle Stockholder
agreed that during the term of the Stockholders Agreement, it will not, and will
not offer or agree to, sell, transfer, tender, assign, pledge, hypothecate or
otherwise dispose of, or create or permit to exist any encumbrance on any of
such Carlyle Stockholder's Shares.
Grant of Proxy. Each Carlyle Stockholder agrees to revoke any and all
prior proxies or powers of attorney in respect of any of their respective Shares
and constituted and appointed Purchaser and Parent, or any nominee of Purchaser
and Parent, with full power of substitution and resubstitution, at any time
during the term of the Stockholders Agreement, as its true and lawful attorney
and proxy (its "Proxy"), for and in its name, place and stead, to demand that
the Secretary of the Company call a special meeting of Stockholders for the
purpose of considering any matter referred to in the above paragraph captioned
"Voting of Shares" and to vote each of such Shares as its Proxy, at every
annual, special, adjourned or postponed meeting of Stockholders, including the
right to sign its name (as stockholder) to any consent, certificate or other
document relating to the Company that the law of the State of Delaware may
permit or require in connection with any such matter.
Agreement to Tender. Each Carlyle Stockholder agreed to validly tender (or
cause the record owner of such Shares to validly tender), and not to withdraw,
pursuant to and in accordance with the terms of the Offer, not later than the
fifth business day after commencement of the Offer, its Shares. For its Shares
validly tendered in the Offer and not properly withdrawn, each Carlyle
Stockholder will be entitled to receive the highest price paid by Parent
pursuant to the Offer.
No Solicitation. Each Carlyle Stockholder agreed in the Stockholders
Agreement that during the term of the Stockholders Agreement, it will not,
directly or indirectly, through any officer, director, agent or other
representative, solicit, initiate or encourage, or take any other action
designed or reasonably likely to facilitate, any inquiries or the making of any
proposal from any person (other than Parent, Purchaser and any of their
affiliates) relating to (i) any acquisition of all or any of the Carlyle
Stockholder's Shares or (ii) any transaction that constitutes a Takeover
Proposal, or participate in any negotiations regarding, or furnish to any person
any information with respect to, or otherwise cooperate in any way with, or
assist or participate in or facilitate or encourage, any effort or attempt by
any person to do or seek any of the foregoing. Each Carlyle Stockholder agreed
to notify Parent and Purchaser promptly if any such proposal or offer, or any
inquiry or contact with any person with respect thereto, is made and shall, in
any such notice to Parent and Purchaser, indicate in reasonable detail the
identity of the person making such proposal, offer, inquiry or contact and the
terms and conditions of such proposal, offer, inquiry or contact.
Notwithstanding any provision of this paragraph to the contrary, if any Carlyle
Stockholder or any officer, director, agent or representative of such Carlyle
Stockholder is a member of the Company Board, such member may take actions in
such capacity to the extent permitted by the Merger Agreement.
Representations and Warranties. The Stockholders Agreement contains
various customary representations and warranties of the parties thereto
including, without limitation, representations and warranties by the Carlyle
Stockholders as to organization, power and authority, the absence of any
required filings and consents, the absence of conflicts with charter documents
and contracts and title to Shares. The Stockholders Agreement also provides
that, as of the Effective Time, each Carlyle Stockholder terminates on behalf of
itself and its affiliates, any and all contractual rights in favor of such
Carlyle Stockholder and its affiliates then in effect between such Carlyle
Stockholder or affiliates, on the one hand, and the Company, on the other hand,
including without limitation, any monitoring and advisory fees to The Carlyle
Group, L.P.
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Termination. The Stockholders Agreement shall terminate and be of no
further force and effect (i) by the written mutual consent of the parties
thereto, (ii) by Parent or any Carlyle Stockholder (with respect to such Carlyle
Stockholder) if the Offer or the Merger shall not have been consummated on or
before March 20, 1998, or (iii) automatically and without any required action of
the parties thereto upon the earlier to occur of (a) the Effective Time of the
Merger and (b) immediately after the termination of the Merger Agreement in
accordance with its terms; provided, however, that in the event that the Stock
Option shall become exercisable, the provisions of the Stockholders Agreement
governing the exercise and exercisability of the Option, the representations,
warranties and covenants (other than covenants with respect to voting, grant of
proxy, agreement to tender, and transfer restrictions) of the Stockholders,
representations and warranties of Parent and Purchaser and other miscellaneous
matters of the Stockholders Agreement shall survive the termination of the
Stockholders Agreement until the earlier to occur of the closing of the exercise
of the Stock Option and the expiration of the Stock Option. No such termination
of the Stockholders Agreement shall relieve any party thereto from any liability
for any breach of the Stockholders Agreement prior to termination.
VOTE REQUIRED TO APPROVE THE MERGER
The Company Board has approved the Merger Agreement in accordance with the
Delaware Code. If required for approval of the Merger, the Company has agreed,
subject to the satisfaction of the conditions to the Merger set forth in the
Merger Agreement, in accordance with and subject to the Delaware Code, to duly
convene a meeting of its Stockholders as soon as practicable following
consummation of the Offer for the purpose of considering and taking action on
the Merger Agreement. If Stockholder approval is required, the Merger Agreement
must generally be adopted by the vote of the holders of a majority of the
outstanding Shares. As a result, if the Minimum Condition is satisfied,
Purchaser will have the power to adopt the Merger Agreement without the
affirmative vote of any other Stockholder of the Company. If Purchaser acquires
at least 90% of the outstanding Shares, Purchaser intends to take, and the
Company has agreed, at the request of Purchaser, to take all necessary and
appropriate action to cause the Merger to become effective as soon as reasonably
practicable after such acquisition, without a meeting of the Company's
Stockholders, in accordance with the "short form" merger provisions of Section
253 of the Delaware Code.
APPRAISAL RIGHTS
Stockholders do not have appraisal or dissenters' rights in connection with
the Offer. However, if the Merger is consummated, Stockholders of the Company at
the time of the Merger who do not vote in favor of the Merger and comply with
all statutory requirements will have the right under the Delaware Code to demand
appraisal of, and receive payment in cash of the fair value of, their Shares
outstanding immediately prior to the effective date of the Merger in accordance
with Section 262 of the Delaware Code.
Under the Delaware Code, Stockholders who properly demand appraisal and
otherwise comply with the applicable statutory procedures will be entitled to
receive a judicial determination of the fair value of their Shares (exclusive of
any element of value arising from the accomplishment or expectation of the
Merger) and to receive payment of such fair value in cash. Any such judicial
determination of the fair value of such Shares could be based upon
considerations other than or in addition to the price paid in the Offer and the
Merger and the market value of Shares. In Weinberger v. UOP, Inc., the Delaware
Supreme Court stated, among other things, that "proof of value by any techniques
or methods which are generally considered acceptable in the financial community
and otherwise admissible in court" should be considered in an appraisal
proceeding. Stockholders should recognize that the value so determined could be
equal to or higher or lower than the Per Share Amount or the Merger
Consideration.
In addition, several decisions by Delaware courts have held that in certain
circumstances a controlling stockholder of a corporation involved in a merger
has a fiduciary duty to other stockholders that requires that the merger be fair
to other stockholders. In determining whether a merger is fair to minority
stockholders, Delaware courts have considered, among other things, the type and
amount of the consideration to be received by the stockholders and whether there
was fair dealing among the parties. The Delaware Supreme Court stated in
Weinberger and Rabkin v. Philip A. Hunt Chemical Corp. that the remedy
ordinarily available to minority stockholders in a cash-out merger is the right
to appraisal described above. However, a damages remedy or
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injunctive relief may be available if a merger is found to be the product of
unfairness, including fraud, misrepresentation or other misconduct.
THE FOREGOING DESCRIPTION OF THE DELAWARE CODE AND SUMMARY OF THE RIGHTS OF
STOCKHOLDERS DOES NOT PURPORT TO BE A COMPLETE STATEMENT OF THE PROCEDURES TO BE
FOLLOWED BY STOCKHOLDERS DESIRING TO EXERCISE ANY AVAILABLE APPRAISAL RIGHTS.
THE PRESERVATION AND EXERCISE OF APPRAISAL RIGHTS REQUIRE STRICT ADHERENCE TO
THE APPLICABLE PROVISIONS OF THE DELAWARE CODE.
PLANS FOR THE COMPANY
If Purchaser obtains control of the Company pursuant to the Offer, Parent
expects to conduct a detailed review of the Company and its businesses, assets,
corporate structure, capitalization, operations, properties, policies,
management and personnel and to consider what, if any, changes would be
desirable in light of the circumstances that then exist. Such changes could
include changes in the Company's businesses, corporate structure, certificate of
incorporation, by-laws, capitalization, board of directors, management or
dividend policy.
Except as described in this Offer to Purchase, none of Parent, Purchaser
nor, to the best knowledge of Parent and Purchaser, any of the persons listed on
Schedule I have any present plans or proposals that would relate to or result in
an extraordinary corporate transaction such as a merger, reorganization or
liquidation involving the Company or any of the Company Subsidiaries or a sale
or other transfer of a material amount of assets of the Company or any of the
Company Subsidiaries, any material change in the capitalization or dividend
policy of the Company or any other material change in the Company's corporate
structure or business or the composition of its Board of Directors or
management.
Parent or Purchaser or an affiliate of Parent may, following the
consummation or termination of the Offer, seek to acquire additional Shares
through open market purchases, privately negotiated transactions, a tender offer
or exchange offer, or otherwise, upon such terms and at such prices as it shall
determine, which may be more or less than the price to be paid pursuant to the
Offer. Parent, Purchaser and Parent's affiliates also reserve the right to
dispose of any or all Shares acquired by them.
GOING PRIVATE TRANSACTIONS
The Commission has adopted Rule 13e-3 under the Exchange Act which is
applicable to certain "going private" transactions and which may under certain
circumstances be applicable to the Merger. Rule 13e-3 should not be applicable
to the Merger if the Merger is consummated within one year after the expiration
or termination of the Offer and the Merger Consideration is not less than the
Per Share Amount. However, in the event that Purchaser is deemed to have
acquired control of the Company pursuant to the Offer and if the Merger is
consummated more than one year after completion of the Offer or an alternative
acquisition transaction is effected whereby Stockholders receive consideration
less than that paid pursuant to the Offer, in either case at a time when Shares
are still registered under the Exchange Act, Purchaser may be required to comply
with Rule 13e-3 under the Exchange Act. If applicable, Rule 13e-3 would require,
among other things, that certain financial information concerning the Company
and certain information relating to the fairness of the Merger or such
alternative transaction and the consideration offered to minority Stockholders
in the Merger or such alternative transaction, be filed with the Commission and
disclosed to Stockholders prior to consummation of the Merger or such
alternative transaction. The purchase of a substantial number of Shares pursuant
to the Offer may result in the Company being able to terminate its Exchange Act
registration prior to consummation of the Merger or such alternative
transaction. See Section 13. If such registration were terminated, Rule 13e-3
would be inapplicable to the Merger or such alternative transaction.
12. DIVIDENDS AND DISTRIBUTIONS.
The Company has agreed that, from the date of the Merger Agreement until
the Effective Time, the Company will neither split, combine or reclassify any
Shares of its capital stock nor declare, set aside, or pay any dividends or
other distributions in respect of its capital stock, other than dividends or
distributions to the Company or the Company Subsidiaries in the ordinary course
of business consistent with past practice.
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13. EFFECT OF THE OFFER ON THE MARKET FOR SHARES, NASDAQ LISTING AND EXCHANGE
ACT REGISTRATION.
Market for Shares. The purchase of Shares pursuant to the Offer will
reduce the number of Shares that might otherwise trade publicly and will reduce
the number of holders of Shares. This could adversely affect the liquidity and
market value of the remaining Shares held by the public. Depending upon the
number of Shares purchased pursuant to the Offer, the Shares may no longer meet
the requirements of the NASD for continued inclusion in the Nasdaq National
Market, which require that an issuer have at least 200,000 publicly held shares,
held by at least 400 stockholders or 300 holders of round lots, with a market
value of at least $1,000,000 and have net tangible assets of at least
$1,000,000. If the Shares were no longer eligible for inclusion in the Nasdaq
National Market, they may nevertheless continue to be included in the Nasdaq
SmallCap Market unless, among other things, the number of holders of Shares were
to fall below 300, the number of publicly held Shares were to fall below 100,000
or there were not at least two registered and active market makers for Shares,
in which case the NASD's rules provide that the Shares would no longer be
"qualified" for Nasdaq Stock Market reporting and the Nasdaq Stock Market would
cease to provide any quotations. Shares held directly or indirectly by
directors, officers or beneficial owners of more than 10% of Shares are not
considered as being publicly held for this purpose. The Company has informed
Purchaser that, as of November 20, 1997, there were approximately 1,245 holders
of record or through nominee or street name accounts with brokers of Shares and
that, as of close of business on such date, 29,723,431 Shares were issued and
outstanding. If, as a result of the purchase of Shares pursuant to the Offer or
otherwise, the Shares no longer meet the requirements of the NASD for continued
inclusion in the Nasdaq National Market or in any other tier of the Nasdaq Stock
Market and Shares are no longer included in the Nasdaq National Market or in any
other tier of the Nasdaq Stock Market, as the case may be, the market for Shares
could be adversely affected.
In the event that Shares no longer meet the requirements of the NASD for
continued inclusion in any tier of the Nasdaq Stock Market, it is possible that
such Shares would continue to trade on other securities exchanges or in the
over-the-counter market and that price quotations would be reported by such
exchanges or through other sources. However, the extent of the public market for
Shares and the availability of such quotations would depend upon such factors as
the number of Stockholders and/or the aggregate market value of Shares remaining
at such time, the interest in maintaining a market in Shares on the part of
securities firms, the possible termination of registration under the Exchange
Act as described below and other factors. Purchaser cannot predict whether the
reduction in the number of Shares that might otherwise trade publicly would have
an adverse or beneficial effect on the market price for or marketability of
Shares.
Exchange Act Registration. The Shares are currently registered under the
Exchange Act. The purchase of Shares pursuant to the Offer may result in Shares
becoming eligible for deregistration under the Exchange Act. Registration of
Shares may be terminated upon application of the Company to the Commission if
the Shares are not listed on a national securities exchange and there are fewer
than 300 record holders. The termination of the registration of the Shares under
the Exchange Act would substantially reduce the information required to be
furnished by the Company to holders of the Shares and would make certain
provisions of the Exchange Act, such as the short-swing profit recovery
provisions of Section 16(b), the requirement of furnishing a proxy statement in
connection with Stockholders' meetings and the requirements of Rule 13e-3 under
the Exchange Act with respect to "going private" transactions, no longer
applicable to the Shares. Furthermore, "affiliates" of the Company and persons
holding "restricted securities" of the Company may be deprived of the ability to
dispose of the securities pursuant to Rule 144 under the Securities Act of 1933.
Parent intends to seek to cause the Company to apply for termination of
registration of the Shares under the Exchange Act as soon as practicable
following completion of the Offer as the requirements for such termination are
met. If registration of the Shares is not terminated prior to the Merger, then
the registration of the Shares under the Exchange Act will be terminated
following the consummation of the Merger. The Shares are currently "margin
securities" under the rules of the Board of Governors of the Federal Reserve
System (the "Federal Reserve Board"), which has the effect, among other things,
of allowing brokers to extend credit on the collateral of such Shares for the
purpose of buying, carrying, or trading in securities ("purpose loans").
Depending upon factors similar to those described above with respect to listing
and market quotations, it is possible that, following the Offer, the Shares
might no longer constitute "margin securities" for the purposes of the Federal
Reserve
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Board's margin regulations and therefore could no longer be used as collateral
for purposes of loans made by brokers.
14. CERTAIN CONDITIONS OF THE OFFER.
Notwithstanding any other provision of the Offer, Purchaser shall not be
required to accept for payment or, subject to any applicable rules and
regulations of the Commission, including Rule 14e-1(c) promulgated under the
Exchange Act (relating to Purchaser's obligation to pay for or return tendered
Shares promptly after termination or withdrawal of the Offer), pay for, and
subject to any such rules or regulations, may delay the acceptance for payment
of any tendered Shares and (except as provided in the Merger Agreement) amend or
terminate the Offer (whether or not any Shares have been theretofore purchased
or paid for pursuant to the Offer) (i) unless the following conditions shall
have been satisfied: (a) there shall be validly tendered and not withdrawn prior
to the Expiration Date a number of Shares which represents at least a majority
of the total voting power of the outstanding securities of the Company entitled
to vote in the election of directors or in a merger ("Voting Securities")
calculated on a fully diluted basis (the "Minimum Condition") ("on a fully
diluted basis" having the following meaning as of any date: the number of Voting
Securities outstanding, together with Voting Securities issuable pursuant to
obligations outstanding at that date under employee stock option or other
benefit plans or otherwise) and (b) any applicable waiting period under the HSR
Act and similar German laws (see Section 15) shall have expired or been
terminated prior to the Expiration Date or (ii) if at any time after the date of
the Merger Agreement and before the time of payment for any such Shares (whether
or not any Shares have theretofore been accepted for payment or paid for
pursuant to the Offer), any of the following events shall occur and be
continuing:
(a) there shall be in effect an injunction or other order, decree,
judgment or ruling by a Governmental Authority of competent jurisdiction or
a law shall have been promulgated, enacted, taken or threatened by a
Governmental Authority of competent jurisdiction which in any such case (1)
restrains or prohibits the making or consummation of the Offer, the
consummation of the Merger or the transactions contemplated by the
Stockholders Agreement, (2) prohibits or restricts the ownership or
operation by Parent (or any of its affiliates or subsidiaries) of any
portion of its or the Company's business or assets which is material to the
business of all such entities taken as a whole, or compels Parent (or any
of its affiliates or subsidiaries) to dispose of or hold separate any
portion of its or the Company's business or assets which is material to the
business of all such entities taken as a whole, (3) imposes material
limitations on the ability of Purchaser effectively to acquire or to hold
or to exercise full rights of ownership of the Shares, including, without
limitation, the right to vote the Shares purchased by Purchaser on all
matters properly presented to the Stockholders, or (4) imposes any material
limitations on the ability of Parent or any of its affiliates or
subsidiaries effectively to control in any material respect the business
and operations of the Company;
(b) any Governmental Authority shall have instituted any action, suit
or proceeding seeking any relief or remedy referred to in paragraph (a) or
material damages as a result of any of the Merger Agreement, the
Stockholders Agreement or any transactions contemplated thereby;
(c) the Merger Agreement shall have been terminated by the Company or
Parent in accordance with its terms or any event shall have occurred which
gives Parent or Purchaser the right to terminate the Merger Agreement or
not to consummate the Merger;
(d) there shall have occurred any event that, individually or when
considered together with any other matter, has had or is reasonably likely
in the future to have a material adverse effect on the business, assets,
condition (financial or otherwise), liabilities or results of operations of
the Company and the Company Subsidiaries taken as a whole (a "Company
Material Adverse Effect");
(e) there shall have occurred (1) any general suspension of, or
limitation on prices (other than suspensions or limitations triggered on
the New York Stock Exchange, Inc. by price fluctuations on a trading day)
for, trading in securities on any national securities exchange or the
over-the-counter market, (2) a declaration of a banking moratorium or any
suspension of payments in respect of banks in the United States, (3) any
material limitation (whether or not mandatory) by any government or
governmental, administrative or regulatory authority or agency, domestic or
foreign, on, the extension of credit by banks or other lending
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<PAGE> 36
institutions, (4) a commencement of a war or armed hostilities or other
national calamity directly involving the United States and Parent shall
have determined that there is a reasonable likelihood that such event may
be of material adverse significance to it or the Company, (5) any decline
of at least 20% in the Dow Jones Average of Industrial Stocks or 20% in the
Standard & Poor's 500 Index from the levels thereof as of the last trading
day immediately preceding the date of the Merger Agreement or (6) in the
case of any of the foregoing existing at the time of the execution of the
Merger Agreement, a material acceleration or worsening thereof;
(f) it shall have been publicly disclosed or Purchaser shall have
otherwise learned that beneficial ownership (determined for the purposes of
this paragraph as set forth in Rule 13d-3 promulgated under the Exchange
Act) of more than 25% of the outstanding Shares has been acquired by any
person (including the Company, any of the Company Subsidiaries or
affiliates thereof) or group (as defined in Section 13 (d) (3) of the
Exchange Act), other than Purchaser or any of its affiliates;
(g) the Company or any of its officers, directors or financial or
legal advisors shall have, directly or indirectly, (1) solicited,
initiated, encouraged (including by way of furnishing information) or taken
any other action designed or reasonably likely to facilitate, any inquiries
or the making of any proposal which constituted, or may reasonably be
expected to lead to, any Takeover Proposal or (2) participated in any
discussions or negotiations regarding any Takeover Proposal regardless of
whether or not any of the foregoing actions are permitted by the Merger
Agreement;
(h) any of the representations and warranties of the Company set forth
in the Merger Agreement that are qualified by reference to materiality or a
Company Material Adverse Effect shall not be true and correct, or any such
representations and warranties that are not so qualified shall not be true
and correct in any respect that is reasonably likely to have a Company
Material Adverse Effect, in each case as if such representations and
warranties were made at the time of such determination;
(i) the Company shall have failed to perform in any material respect
any material obligation or to comply in any material respect with any
material agreement or covenant of the Company to be performed or complied
with by it under the Merger Agreement; or
(j) Parent and the Company shall have agreed that Parent shall amend
the Offer to terminate the Offer or postpone the payment for Shares
pursuant thereto;
which, in the judgment of Parent with respect to each and every matter referred
to above and regardless of the circumstances giving rise to any such condition,
makes it inadvisable to proceed with the Offer or with such acceptance for
payment of or payment for Shares or to proceed with the Merger.
The foregoing conditions are for the sole benefit of Parent and may be
asserted by Parent regardless of the circumstances giving rise to any such
condition (except for any action or inaction by Parent or any of its affiliates
constituting a breach of the Merger Agreement) or (other than the Minimum
Condition) may be waived by Parent in whole or in part at any time and from time
to time in its sole discretion (subject to the terms of the Merger Agreement).
The failure by Parent at any time to exercise any of the foregoing rights shall
not be deemed a waiver of any such right, the waiver of any such right with
respect to particular facts and other circumstances shall not be deemed a waiver
with respect to any other facts and circumstances, and each such right shall be
deemed an ongoing right that may be asserted at any time and from time to time.
15. CERTAIN LEGAL MATTERS AND REGULATORY APPROVALS.
General. Except as set forth below, based upon its examination of publicly
available filings by the Company with the Commission and other publicly
available information concerning the Company, neither Parent nor Purchaser is
aware of any licenses or other regulatory permits that appear to be material to
the business of the Company and the Company Subsidiaries, taken as a whole, that
might be adversely affected by Purchaser's acquisition of Shares (and the
indirect acquisition of the stock of the Company Subsidiaries) as contemplated
herein, or of any filings, approvals or other actions by or with any domestic
(federal or state), foreign or supranational governmental authority or
administrative or regulatory agency that would be required prior to the
acquisition of Shares (or the indirect acquisition of the stock of the Company
Subsidiaries) by Purchaser pursuant
34
<PAGE> 37
to the Offer as contemplated herein. Should any such approval or other action be
required, it is Purchaser's present intention to seek such approval or action.
There can be no assurance that any such approval or other action, if needed,
would be obtained without substantial conditions, that adverse consequences
might not result to the business of the Company, Parent or Purchaser, that
certain parts of the businesses of the Company, Parent or Purchaser might not
have to be disposed of or held separate or other substantial conditions complied
with in order to obtain such approval or other action or in the event that such
approval was not obtained or such other action was not taken, any of which could
cause Purchaser to elect (subject to the terms of the Merger Agreement) to
terminate the Offer without the purchase of the Shares thereunder. Purchaser's
obligation under the Offer to accept for payment and pay for Shares is subject
to certain conditions, including conditions relating to the legal matters
discussed in this Section 15. See Section 14.
State Takeover Laws. The Company is incorporated under the laws of the
State of Delaware. In general, Section 203 of the DGCL ("Section 203") prevents
an "interested stockholder" (including a person who owns or has the right to
acquire 15% or more of a corporation's outstanding voting stock) from engaging
in a "business combination" (defined to include mergers and certain other
actions) with a Delaware corporation for a period of three years following the
date such person became an interested stockholder unless, among other things,
the "business combination" is approved by the Board of Directors of such
corporation prior to such date. The Company Board has approved the Offer and the
Merger. Accordingly, Section 203 is inapplicable to the Offer and the Merger.
A number of other states have adopted takeover laws and regulations which
purport to varying degrees to be applicable to attempts to acquire securities of
corporations which are incorporated in such states or which have or whose
business operations have substantial economic effects in such states, or which
have substantial assets, security holders, principal executive offices or
principal places of business therein. In 1982, the Supreme Court of the United
States, in Edgar v. Mite Corp., invalidated on constitutional grounds the
Illinois Business Takeovers Act, which as a matter of state securities law made
takeovers of corporations meeting certain requirements more difficult. However,
in 1987, in CTS Corp. v. Dynamics Corp. of America, the Supreme Court of the
United States held that the State of Indiana could, as a matter of corporate law
and in particular those aspects of corporate law concerning corporate
governance, constitutionally disqualify a potential acquiror from voting on the
affairs of a target corporation without the prior approval of the remaining
stockholders, provided that such laws were applicable only under certain
conditions. Subsequently, in TLX Acquisition Corp. v. Telex Corp., a federal
district court in Oklahoma ruled that the Oklahoma statutes were
unconstitutional insofar as they applied to corporations incorporated outside
Oklahoma in that they would subject such corporations to inconsistent
regulations. Similarly, in Tyson Foods, Inc. v. McReynolds, a federal district
court in Tennessee ruled that four Tennessee takeover statutes were
unconstitutional as applied to corporations incorporated outside Tennessee. This
decision was affirmed by the United States Court of Appeals for the Sixth
Circuit. In December 1988, a federal district court in Florida held in Grand
Metropolitan PLC v. Butterworth that the provisions of the Florida Affiliated
Transactions Act and the Florida Control Share Acquisition Act were
unconstitutional as applied to corporations incorporated outside of Florida.
The Company, directly or through subsidiaries, conducts business in a
number of states throughout the United States, some of which have enacted
takeover laws. Purchaser does not know whether any of these laws will, by their
terms, apply to the Offer or the Merger and has not complied with any such laws.
Should any person seek to apply any state takeover law, Purchaser will take such
action as then appears desirable, which may include challenging the validity or
applicability of any such statute in appropriate court proceedings. In the event
it is asserted that one or more state takeover laws is applicable to the Offer
or the Merger, and an appropriate court does not determine that it is
inapplicable or invalid as applied to the Offer, Purchaser might be required to
file certain information with, or receive approvals from, the relevant state
authorities. In addition, if enjoined, the Purchaser might be unable to accept
for payment any Shares tendered pursuant to the Offer, or be delayed in
continuing or consummating the Offer and the Merger. In such event, the
Purchaser may not be obligated to accept for payment any Shares tendered. See
Section 14.
Pursuant to the Merger Agreement, the Company and the Company Board will
grant such approvals and take such actions as are necessary so that the
transactions contemplated by the Merger Agreement and the Company
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<PAGE> 38
Proposals may be consummated as promptly as practicable on the terms
contemplated thereby and otherwise act to eliminate or minimize the effects of
any takeover statute on any of the transactions contemplated.
Other Governmental or Foreign Approvals. The Company owns property in a
number of foreign countries and jurisdictions. In connection with the
acquisition of the Shares pursuant to the Offer, the laws of certain of those
foreign countries and jurisdictions may require the filing of information with,
or the obtaining of the approval of, Governmental Authorities in such countries
and jurisdictions. The governments in such countries and jurisdictions might
attempt to impose additional conditions on the Company's operations conducted in
such countries and jurisdictions as a result of the acquisition of the Shares
pursuant to the Offer or the Merger. The Company has represented to Parent that
no consent, approval, waiver or authorization of, notice to or declaration of
filing with, any Governmental Authority on the part of the Company or any of the
Company Subsidiaries is required in connection with the execution, delivery or
performance by the Company of the Merger Agreement or the delivery or
performance by the Company of the transactions contemplated thereby other than
(i) the filing of the Certificate of Merger with the Secretary of State of
Delaware in accordance with the Delaware Code, (ii) filings with the Commission
and the NASD, (iii) filings under the HSR Act and the rules and regulations
promulgated thereunder and similar foreign requirements, (iv) such filings as
may be required in any jurisdiction where the Company is qualified or authorized
to do business as a foreign corporation in order to maintain such qualification
or authorization and (v) those consents that, if they were not obtained or made,
individually or in the aggregate would not be reasonably likely to have a
Company Material Adverse Effect, or prevent or materially delay consummation of
the Offer or the Merger or prevent the Company from performing its obligations
under the Merger Agreement.
Antitrust. Under the HSR Act and the rules that have been promulgated
thereunder by the Federal Trade Commission (the "FTC"), certain acquisition
transactions may not be consummated unless certain information has been
furnished to the Antitrust Division of the Department of Justice (the "Antitrust
Division") and the FTC and certain waiting period requirements have been
satisfied. The acquisition of Shares pursuant to the Offer is subject to such
requirements. See Section 2. There may be similar antitrust requirements in
other jurisdictions.
On November 25, 1997, Parent filed with the FTC and the Antitrust Division
a Premerger Notification and Report Form in connection with the purchase of
Shares pursuant to the Offer. Under the provisions of the HSR Act applicable to
the Offer, the purchase of Shares pursuant to the Offer may not be consummated
until the expiration of a 15-calendar day waiting period following the filing by
Parent, unless both the Antitrust Division and the FTC terminate the waiting
period prior thereto. If, within such 15-calendar day waiting period, either the
Antitrust Division or the FTC requests additional information or documentary
material from Parent, the waiting period would be extended for an additional 10
calendar days following substantial compliance by Parent with such request.
Thereafter, the waiting period could be extended only by court order. If the
acquisition of Shares is delayed pursuant to a request by the FTC or the
Antitrust Division for additional information or documentary material pursuant
to the HSR Act, the Offer may, but need not, be extended and in any event the
purchase of and payment for Shares will be deferred until 10 days after the
request is substantially complied with, unless the waiting period is sooner
terminated by the FTC and the Antitrust Division. See Section 2. Only one
extension of such waiting period pursuant to a request for additional
information is authorized by the HSR Act and the rules promulgated thereunder,
except by court order. Any such extension of the waiting period will not give
rise to any withdrawal rights not otherwise provided for by applicable law. See
Section 4.
The November 25, 1997 Premerger Notification and Report Form filing
described above was also applicable to the Option granted to Purchaser pursuant
to the Stockholders Agreement. Under the provisions of the HSR Act applicable to
the Option, the purchase of Shares pursuant to the Option may not be consummated
until the expiration of a 30-calendar day waiting period following the filing by
Parent, unless both the Antitrust Division and the FTC terminate the waiting
period thereto. If, within such 30-calendar day waiting period, either the
Antitrust Division or the FTC requests additional information or documentary
material from Parent, the waiting period would be extended for an additional 20
calendar days following substantial compliance by Parent with such request.
Thereafter, the waiting period could be extended only by court order. Only one
extension of such waiting period pursuant to a request for additional
information is authorized by the HSR Act and the rules promulgated thereunder,
except by court order. Pursuant to the Stockholders Agreement, among other
things, if
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<PAGE> 39
the Option becomes exercisable, it would continue to be exercisable until 30
days after the waiting period (including as extended) under the HSR Act has
expired. See Section 11.
The FTC and the Antitrust Division frequently scrutinize the legality under
the antitrust laws of transactions such as the proposed acquisition of Shares by
Purchaser pursuant to the Offer. At any time before or after the purchase by
Purchaser of Shares pursuant to the Offer, either of the FTC or the Antitrust
Division could take such action under the antitrust laws as it deems necessary
or desirable in the public interest, including seeking to enjoin the purchase of
Shares pursuant to the Offer or seeking the divestiture of Shares purchased by
Purchaser or the divestiture of substantial assets of Parent, its subsidiaries
or the Company. Private parties and state attorneys general may also bring legal
action under federal or state antitrust laws under certain circumstances.
In connection with the acquisition of the Shares pursuant to the Offer or
the Merger, Parent and the Company will be required to file a pre-merger
notification with the German Federal Cartel Office ("FCO"), which is the
governmental authority charged with enforcing German competition laws applicable
to mergers and acquisitions. Parent and the Company intend to make the
appropriate filings with the FCO as promptly as practicable following the
commencement of the Offer. The FCO has one month following the filing to advise
the parties of its intention to investigate the transactions, in which case the
FCO has four months from the date of filing in which to take steps to oppose the
transactions. There can be no assurance that the FCO will not investigate or
oppose the transactions.
Based upon an examination of publicly available information, and
information provided to Parent by the Company, relating to the businesses in
which the Company and the Company Subsidiaries are engaged, Purchaser has
determined that the Company and Parent both provide similar services in certain
geographic areas. Although Purchaser believes that the acquisition of Shares
pursuant to the Offer would not violate the antitrust laws, there can be no
assurance that a challenge to the Offer on antitrust grounds will not be made
or, if such challenge is made, what the outcome will be. See Section 14 for
certain conditions to the Offer, including conditions with respect to litigation
and certain government actions.
Margin Credit Regulations. Federal Reserve Board Regulations G, T, U and X
(the "Margin Credit Regulations") restrict the extension or maintenance of
credit for the purpose of buying or carrying margin stock, including the Shares,
if the credit is secured directly or indirectly thereby. Such secured credit may
not be extended or maintained in an amount that exceeds the maximum loan value
of the margin stock. Under the Margin Credit Regulations, the Shares are
presently margin stock and the maximum loan value thereof is generally 50% of
their current market value. The definition of "indirectly secured" contained in
the Margin Credit Regulations provides that the term does not include an
arrangement with a customer if the lender in good faith has not relied upon
margin stock as collateral in extending or maintaining the particular credit.
16. FEES AND EXPENSES.
Bear Stearns is acting as Dealer Manager in connection with the Offer and
serving as financial advisor to Parent and Purchaser in connection with the
acquisition of the Company. Parent has agreed, pursuant to an engagement letter
dated November 19, 1997, to pay to Bear Stearns an advisory fee of $100,000
which will be credited against the payment of the fairness opinion fee. Parent
has agreed to pay Bear Stearns a fairness opinion fee of $1,000,000. Parent has
also agreed to pay Bear Stearns a fee of $500,000 upon the consummation of the
Offer, an acquisition of 50% or more of the Shares or the consummation of any
other business combination (including a sale of assets) in which the parent
acquires control of the Company. Parent and Purchaser will also reimburse Bear
Stearns for reasonable out-of-pocket expenses, including reasonable attorney's
fees, and have also agreed to indemnify Bear Stearns for certain liabilities and
expenses in connection with the Offer, including certain liabilities under the
federal securities laws.
Purchaser has retained Georgeson to act as the Information Agent and First
Chicago Trust to act as the Depositary in connection with the Offer. The
Information Agent may contact holders of Shares by mail, telephone, telex,
telegraph and personal interview and may request brokers, dealers and other
nominee Stockholders to forward the Offer materials to beneficial owners. The
Information Agent and the Depositary will receive reasonable and customary
compensation for services relating to the Offer and will be reimbursed for
certain out-of-pocket expenses. Parent and Purchaser have also agreed to
indemnify the Information Agent and
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<PAGE> 40
the Depositary against certain liabilities and expenses in connection with the
Offer, including certain liabilities under the federal securities laws.
Purchaser will not pay any fees or commissions to any broker or dealer or
any other person for soliciting tenders of Shares pursuant to the Offer (other
than to the Dealer Manager, the Information Agent and the Depositary). Brokers,
dealers, commercial banks and trust companies will, upon request, be reimbursed
by Purchaser for customary mailing and handling expenses incurred by them in
forwarding offering materials to their customers.
17. MISCELLANEOUS.
The Offer is being made solely by this Offer to Purchase and the related
Letter of Transmittal and is being made to all Stockholders. Purchaser is not
aware of any state where the making of the Offer is prohibited by administrative
or judicial action pursuant to any valid state statute. If Purchaser becomes
aware of any valid state statute prohibiting the making of the Offer or the
acceptance of Shares pursuant thereto, Purchaser will make a good faith effort
to comply with any such state statute. If after such good faith effort Purchaser
cannot comply with such state statute, the Offer will not be made to, nor will
tenders be accepted from or on behalf of, the Stockholders in such state. In any
jurisdiction where the securities, blue sky or other laws require the Offer to
be made by a licensed broker or dealer, the Offer shall be deemed to be made on
behalf of Purchaser by the Dealer Manager or one or more registered brokers or
dealers that are licensed under the laws of such jurisdiction.
Parent and Purchaser have filed with the Commission a Schedule 14D-1
(including exhibits) pursuant to Rule 14d-3 under the Exchange Act, furnishing
certain additional information with respect to the Offer. Such statement and any
amendments thereto, including exhibits, may be inspected and copies may be
obtained from the offices of the Commission (except that they will not be
available at the regional offices of the Commission) in the manner set forth in
Section 8 of this Offer to Purchase.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION ON BEHALF OF PURCHASER OR PARENT NOT CONTAINED HEREIN OR IN THE
LETTER OF TRANSMITTAL AND IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED.
SYSTEMS ACQUISITION INC.
November 26, 1997
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SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS OF PURCHASER AND PARENT
1. Directors and Executive Officers of Purchaser. The name, business
address, present principal occupation or employment and material occupations,
positions, offices or employments during the last five years of each director
and executive officer of Purchaser and certain other information are set forth
below. Unless otherwise indicated, the business address of each such director
and executive officer is 1900 Richmond Road, Cleveland, Ohio 44124. Unless
otherwise indicated, each occupation set forth opposite an individual's name
refers to employment with Purchaser. Information for Mr. Lawrence is set forth
below under "Directors and Executive Officers of Parent." All directors and
executive officers listed below are citizens of the United States.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT AND MATERIAL
OCCUPATIONS, POSITIONS, OFFICES OR EMPLOYMENT HELD DURING THE
NAME AND BUSINESS ADDRESS LAST FIVE YEARS
- ---------------------------------------------------------------------------------------------
<S> <C>
David B. Goldston............. Director, Vice President and Assistant Secretary since 1997.
Mr. Goldston also serves as a Vice President-Law and Assistant
General Counsel and Assistant Secretary of Parent, a position
he has held since 1995. He previously served as Vice
President-Law and Assistant General Counsel and Assistant
Secretary in the Parent's Steering, Suspension & Engine Group
from 1994 to 1995; as Vice President-Law and Assistant General
Counsel and Assistant Secretary in the Parent's Engine
Components and Steering Systems Groups in 1994; and as
Assigned Group Counsel in the Parent's Engine Components Group
from 1990 to 1994.
Donald G. Kovar............... Director and Vice President since 1997. Dr. Kovar also serves
as Vice President of Corporate Development for Parent, a
position he has held since June 1997. He previously served as
Parent's Vice President, Planning & Development from 1993 to
1997 and as Vice President of Planning for the Parent's Space
& Defense Sector from 1989 to 1993.
William B. Lawrence........... Director and President since 1997.
Jeanne R. Sydenstricker....... Vice President and Treasurer since 1997. Ms. Sydenstricker
also serves as Vice President and Treasurer of Parent, a
position she has held since 1996. She previously served as
Vice President, Finance for the Parent's Space & Electronics
Group from 1993 to 1996 and as Deputy Program Manager in the
Parent's Electronic Systems Group from 1986 to 1993.
William A. Warren............. Vice President since 1997. Mr. Warren also serves as Parent's
Vice President, Tax, a position he has held since 1989.
Kathleen A. Weigand........... Director, Vice President and Secretary since 1997. Mrs.
Weigand also serves as Senior Counsel, Securities and Finance
of the Parent, a position she has held since 1997. She also
served as Parent's Counsel, Securities and Finance from 1995
to 1997. Prior to joining Parent for a short time during 1995,
Mrs. Weigand was General Counsel of Corrpro Companies, Inc.
She previously was an Associate with the Cleveland law firm of
Thompson, Hine and Flory from 1987 to 1994.
</TABLE>
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<PAGE> 42
2. Directors and Executive Officers of Parent. The name, business address,
present principal occupation or employment and material occupations, positions,
offices or employments during the last five years of each director and executive
officer of Parent and certain other information are set forth below. Unless
otherwise indicated, the business address of each such director and executive
officer is 1900 Richmond Road, Cleveland, Ohio 44124. Unless otherwise
indicated, each occupation set forth opposite an individual's name refers to
employment with Parent. All directors and executive officers listed below are
citizens of the United States, except that Dr. Blankenstein is a citizen of
Germany and Dr. Hahn is a citizen of Austria.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT AND MATERIAL
OCCUPATIONS, POSITIONS, OFFICES OR EMPLOYMENT HELD DURING THE
NAME AND BUSINESS ADDRESS LAST FIVE YEARS
- ---------------------------------------------------------------------------------------------
<S> <C>
Michael H. Armacost........... Director since 1993. Mr. Armacost has been President of the
Brookings Institution since October 1995. He served as a
distinguished fellow and visiting professor at the
Asia/Pacific Research Center of Stanford University from 1993
to 1995. Mr. Armacost was U.S. Ambassador to Japan from 1989
to 1993. He is also a director of American Family Life
Assurance Company, Applied Materials, Inc. and Cargill,
Incorporated.
Martin Feldstein.............. Director of Parent. Dr. Feldstein was elected a Director of
Parent in 1981, resigned his position upon joining the
government in August 1982 and was again elected a Director in
July 1984. Dr. Feldstein has been Professor of Economics at
Harvard University since 1967. In addition, he serves as
President and Chief Executive Officer of the National Bureau
of Economic Research, a position he held from 1977 to 1982 and
from July 1984 until the present. Dr. Feldstein also is a
director of American International Group, Inc. and J. P.
Morgan & Co. Incorporated.
Robert M. Gates............... Director since 1994. Dr. Gates is a consultant, author and
lecturer. From 1991 to 1993, he served as Director of Central
Intelligence for the United States. He served as Assistant to
the President of the United States and Deputy National
Security Advisor from 1989 to 1991. Dr. Gates also is a
director of The Charles Stark Draper Laboratory, Inc.,
LucasVarity plc, and NACCO Industries, Inc.; a trustee of
Fidelity Investments; a consultant to Koch Industries and
Placer Dome Inc.; and a senior advisor to The Mitchell Group.
Joseph T. Gorman.............. Director since 1984. Mr. Gorman has been Chairman of the Board
and Chief Executive Officer of Parent since 1988. He also
served as President of Parent from 1985 to 1991 and as Chief
Operating Officer of Parent from 1985 to 1988. Mr. Gorman
currently is a director of Aluminum Company of America and The
Procter & Gamble Company.
Carl H. Hahn.................. Director since 1993. Dr. Hahn served as Chairman of the Board
of Volkswagen AG from 1981 until his retirement at the end of
1992. He also is a director of PACCAR Inc. and a member of the
supervisory board of Perot Systems Corporation. Dr. Hahn also
serves as a member of the supervisory boards of a number of
European companies, including DAF Trucks N.V., Thyssen AG and
Volkswagen AG.
George H. Heilmeier........... Director since 1992. Dr. Heilmeier is Chairman Emeritus of
Bell Communications Research Inc. (Bellcore). He served as
Chairman and Chief Executive Officer of Bellcore from January
1, 1997 to November 14, 1997. He served as President and Chief
Executive Officer of Bellcore from 1991 to year-end 1996. Dr.
Heilmeier also is a director of Automatic Data Processing,
Inc. and Compaq Computer Corporation and a trustee of The
MITRE Corporation.
</TABLE>
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<PAGE> 43
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT AND MATERIAL
OCCUPATIONS, POSITIONS, OFFICES OR EMPLOYMENT HELD DURING THE
NAME AND BUSINESS ADDRESS LAST FIVE YEARS
- ---------------------------------------------------------------------------------------------
<S> <C>
Peter S. Hellman.............. Director since 1995. Mr. Hellman has been President and Chief
Operating Officer of Parent since 1995. He was Executive Vice
President and Assistant President of Parent from 1994 to 1995.
Previously, Mr. Hellman served as Executive Vice President and
Chief Financial Officer of Parent from 1991 to 1994. He also
is a director of Arkwright Mutual Insurance Company.
Karen N. Horn................. Director since 1990. Mrs. Horn has served as Senior Managing
Director and Head of International Private Banking of Bankers
Trust New York Corporation since 1996. She was Chairman of
Bank One, Cleveland, N.A. from 1987 to 1996 and also served as
Chief Executive Officer of Bank One from 1987 to 1995. Mrs.
Horn also is a director of The British Petroleum Company
p.1.c., Eli Lilly and Company and Rubbermaid Incorporated.
E. Bradley Jones.............. Director since 1982. Mr. Jones served as Chairman and Chief
Executive Officer of Republic Steel Corporation and its
successor LTV Steel Company from 1982 until his retirement in
1984. He also is a director of Birmingham Steel Corporation,
Consolidated Rail Corporation and RPM, Inc. and a trustee of
Fidelity Investments.
William S. Kiser.............. Director since 1985. Dr. Kiser has been Vice Chairman and
Chief Medical Officer of Primary Health Systems, Inc. since
1994. He served as medical director of American Health Care
Management, Inc. from 1992 to 1994. Dr. Kiser also is a
director of Positron Corporation and a trustee and an officer
of the American Foundation of Urologic Diseases.
David B. Lewis................ Director since 1995. Mr. Lewis has been Chairman of the Board
of Lewis & Munday, a Detroit law firm, since 1982. He also is
a director of Comerica Bank, Consolidated Rail Corporation, M.
A. Hanna Company and LG&E Energy Corporation.
James T. Lynn................. Director since 1993. Mr. Lynn has been senior advisor to
Lazard Freres & Co. LLC, investment bankers, since November
1992. He served as Chairman of the Board and Chief Executive
Officer of Aetna Life and Casualty Company from 1984 until his
retirement in 1992.
Lynn M. Martin................ Director since 1995. Ms. Martin has chaired Deloitte &
Touche's Council on the Advancement of Women and has served as
an advisor to the firm since 1993. She also has held the Davee
chair at the J. L. Kellogg Graduate School of Management,
Northwestern University, since 1993. Previously, Ms. Martin
served as U. S. Secretary of Labor from 1991 to 1993. She also
is a director of Ameritech Corporation, Dreyfus Funds,
Harcourt General, Inc., The Procter & Gamble Company and Ryder
System, Inc.
John D. Ong................... Director since 1995. Mr. Ong is Chairman Emeritus of The
BFGoodrich Company. He served as Chairman of the Board of
BFGoodrich from 1979 until his retirement earlier this year.
He was also Chief Executive Officer of BFGoodrich from July
1979 to year-end 1996. Currently, Mr. Ong is a director of
Ameritech Corporation, ASARCO, Inc., Cooper Industries, The
Geon Company and The Kroger Company.
Richard W. Pogue.............. Director since 1994. Mr. Pogue has served as senior advisor to
Dix & Eaton, a public relations firm, since 1994. Previously,
he was senior partner at the law firm of Jones, Day, Reavis &
Pogue from 1993 to 1994 and managing partner of that firm from
1984 to 1992. Mr. Pogue also is a director of Continental
Airlines, Inc., Derlan Industries Limited, M. A. Hanna
Company, KeyCorp, Lamalie Inc., OHM Corporation and Redland
PLC.
</TABLE>
I-3
<PAGE> 44
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT AND MATERIAL
OCCUPATIONS, POSITIONS, OFFICES OR EMPLOYMENT HELD DURING THE
NAME AND BUSINESS ADDRESS LAST FIVE YEARS
- ---------------------------------------------------------------------------------------------
<S> <C>
Bernd Blankenstein............ Executive Vice President and General Manager, TRW Steering,
Suspension & Engine Group since 1996. He was Managing
Director, TRW Deutschland GmbH from 1995 to 1996; Vice
President and General Manager, TRW's Global Engine Components
business from 1994 to 1996; and Managing Director, TRW
Motorkomponenten GmbH & Co. KG from 1991 to 1995.
Timothy W. Hannemann.......... Executive Vice President and General Manager, TRW Space &
Electronics Group since 1993. He was Executive Vice President
and General Manager, TRW Space & Defense Sector from 1991 to
1992.
Howard V. Knicely............. Executive Vice President, Human Resources and Communications
since 1995. He was Executive Vice President, Human Resources,
Communications & Information Resources from 1989 to 1994.
William B. Lawrence........... Executive Vice President, General Counsel and Secretary since
June 1997. He was Executive Vice President, Planning,
Development & Government Affairs from 1989 to June 1997.
Carl G. Miller................ Executive Vice President and Chief Financial Officer since
1996. He was Executive Vice President, Chief Financial Officer
and Controller in 1996 and Vice President and Controller from
1990 to 1996.
James S. Remick............... Executive Vice President and General Manager, TRW Occupant
Restraint Systems Group since 1996. He was Executive Vice
President and General Manager, TRW Steering, Suspension &
Engine Group from 1995 to 1996; Vice President and Deputy
General Manager, Automotive in 1995; and Vice President and
General Manager, TRW Steering & Suspension Systems, North and
South America from 1991 to 1995.
Peter Staudhammer............. Vice President, Science & Technology since 1993. He was Vice
President and Director of the Center for Automotive Technology
from 1990 to 1993.
John P. Stenbit............... Executive Vice President and General Manager, TRW Systems
Integration Group since 1994. He was Vice President and
General Manager, TRW Systems Integration Group from 1990 to
1994.
Ronald D. Sugar............... Executive Vice President and General Manager, TRW Automotive
Electronics Group since 1996. He was Executive Vice President
and Chief Financial Officer from 1994 to 1996; Vice President,
Group Development, TRW Space & Electronics Group from 1992 to
1994; Vice President, Strategic Business Development, TRW
Space & Defense Sector in 1992; and Vice President and General
Manager, TRW Space Communications Division from 1987 to 1992.
</TABLE>
I-4
<PAGE> 45
Facsimile copies of the Letter of Transmittal, properly completed and duly
executed, will be accepted. The Letter of Transmittal, certificates for Shares
and any other required documents should be sent or delivered by each Stockholder
of the Company or his broker, dealer, commercial bank, trust company or other
nominee to the Depositary as follows:
The Depositary for the Offer is:
FIRST CHICAGO TRUST COMPANY OF NEW YORK
<TABLE>
<S> <C> <C>
By Facsimile Transmission:
(For Eligible Institutions
Only)
201-222-4720
or
201-222-4721
By Hand: By Mail: By Overnight Courier:
Tenders & Exchanges Tenders & Exchanges Tenders & Exchanges
c/o The Depository Trust Suite 4660 -- BDM Suite 4680 -- BDM
Company P.O. Box 2569 14 Wall Street -- 8th Floor
55 Water Street Jersey City, NJ 07303-2569 New York, NY 10005
DTC TAD
Vietnam Veterans Memorial Plaza
New York, NY 10041
</TABLE>
To Confirm Receipt of Notice of Guaranteed Delivery:
201-222-4707
Any questions and requests for assistance may be directed to the
Information Agent or the Dealer Manager at their respective telephone numbers
and addresses listed below. Additional copies of this Offer to Purchase, the
Letter of Transmittal and the Notice of Guaranteed Delivery may also be obtained
from the Information Agent or the Dealer Manager. You may also contact your
broker, dealer, commercial bank or trust company for assistance concerning the
Offer.
The Information Agent for the Offer is:
(Georgeson & Company Logo)
Wall Street Plaza
New York, New York 10005
Banks and Brokers call collect:
(212) 440-9800
All others call toll free:
(800) 223-2064
The Dealer Manager for the Offer is:
BEAR, STEARNS & CO. INC.
245 Park Avenue
New York, New York 10167
Call toll free:
(888) 285-3977
<PAGE> 1
Exhibit (a)(2)
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK
OF
BDM INTERNATIONAL, INC.
PURSUANT TO THE OFFER TO PURCHASE
DATED NOVEMBER 26, 1997
BY
SYSTEMS ACQUISITION INC.
A WHOLLY OWNED SUBSIDIARY
OF
TRW INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON WEDNESDAY, DECEMBER 24, 1997, UNLESS THE OFFER IS EXTENDED.
THE DEPOSITARY FOR THE OFFER IS:
FIRST CHICAGO TRUST COMPANY OF NEW YORK
<TABLE>
<S> <C> <C>
BY HAND: BY MAIL: BY OVERNIGHT COURIER:
TENDERS & EXCHANGES TENDERS & EXCHANGES TENDERS & EXCHANGES
C/O THE DEPOSITORY TRUST COMPANY SUITE 4660 -- BDM SUITE 4680 -- BDM
55 WATER STREET P.O. BOX 2569 14 WALL STREET -- 8TH FLOOR
DTC TAD JERSEY CITY, NJ 07303-2569 NEW YORK, NY 10005
VIETNAM VETERANS MEMORIAL PLAZA
NEW YORK, NY 10041
- ------------------------------------------------------------------------------------------------------------------------
DESCRIPTION OF SHARES TENDERED
- ------------------------------------------------------------------------------------------------------------------------
Name(s) and Address(es) of Registered Holder(s)
(Please fill in, if blank, exactly as Name(s) Stock Certificate(s) Tendered
appear(s) on Stock Certificate(s)) (Attach additional list if necessary)
- ------------------------------------------------------------------------------------------------------------------------
Total Number
of Shares
Stock Evidenced Number
Certificate by Stock of Shares
Number(s)* Certificate(s)* Tendered**
----------------------------------------------------
----------------------------------------------------
----------------------------------------------------
----------------------------------------------------
Total Shares
- ------------------------------------------------------------------------------------------------------------------------
* Need not be completed by Stockholders tendering Shares by book-entry transfer.
** Unless otherwise indicated, it will be assumed that all Shares evidenced by any Stock Certificates delivered to the
Depositary are being tendered. See Instruction 4.
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 2
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET
FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. YOU MUST SIGN THIS LETTER OF
TRANSMITTAL WHERE INDICATED BELOW AND COMPLETE THE SUBSTITUTE FORM W-9 PROVIDED
BELOW.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
This Letter of Transmittal is to be completed by Stockholders either if
certificates evidencing Shares (as defined below) are to be forwarded herewith
or if delivery of Shares is to be made by book-entry transfer to the
Depositary's account at The Depository Trust Company ("DTC") or The Philadelphia
Depository Trust Company ("PDTC") (each a "Book-Entry Transfer Facility" and,
collectively, the "Book-Entry Transfer Facilities") pursuant to the book-entry
transfer procedure described in Section 3 of the Offer to Purchase (as defined
below). Delivery of documents to a Book-Entry Transfer Facility does not
constitute delivery to the Depositary.
Holders of Shares ("Stockholders") (i) whose certificates evidencing Shares
("Share Certificates") are not immediately available or who cannot deliver their
Share Certificates and all other documents required hereby to the Depositary
prior to the Expiration Date (as defined in Section l of the Offer to Purchase)
or (ii) who cannot complete the procedure for delivery by book-entry transfer on
a timely basis and who wish to tender their Shares, must do so pursuant to the
guaranteed delivery procedure described in Section 3 of the Offer to Purchase.
See Instruction 2.
<TABLE>
<S> <C>
[ ] CHECK HERE IF SHARES ARE BEING [ ] CHECK HERE IF SHARES ARE BEING TENDERED
DELIVERED BY BOOK-ENTRY TRANSFER TO THE PURSUANT TO A NOTICE OF GUARANTEED
DEPOSITARY'S ACCOUNT AT ONE OF THE DELIVERY PREVIOUSLY SENT TO THE
BOOK-ENTRY TRANSFER FACILITIES AND DEPOSITARY AND COMPLETE THE FOLLOWING:
COMPLETE THE FOLLOWING:
Name(s) of Tendering Institution: Name(s) of Registered Holder(s):
- --------------------------------------------- ---------------------------------------------
Check Box of Applicable Book-Entry Transfer Window Ticket Number (if any):
Facility:
(CHECK ONE) [ ] DTC [ ] PDTC ---------------------------------------------
Account Number: Date of Execution of Notice of Guaranteed
Delivery:
- ---------------------------------
Transaction Code Number: ---------------------------------------------
Name of Institution which Guaranteed
- ------------------------- Delivery:
---------------------------------------------
If Delivered by Book-Entry Transfer, Check
Box of Book-Entry Transfer Facility:
(CHECK ONE) [ ] DTC [ ] PDTC
Account Number:
----------------------------------
Transaction Code Number:
-------------------------
</TABLE>
<PAGE> 3
NOTE: SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ THE INSTRUCTIONS SET FORTH IN THIS LETTER OF
TRANSMITTAL CAREFULLY.
LADIES AND GENTLEMEN:
The undersigned hereby tenders to Systems Acquisition Inc. ("Purchaser"), a
wholly owned subsidiary of TRW Inc. ("Parent"), the above-described shares of
Common Stock ("Shares"), of BDM International, Inc. (the "Company"), pursuant to
Purchaser's offer to purchase all outstanding Shares, at $29.50 per Share, net
to the seller in cash without interest thereon (the "Per Share Amount"), upon
the terms and subject to the conditions set forth in the Offer to Purchase,
dated November 26, 1997, receipt of which is hereby acknowledged, and in this
Letter of Transmittal (the Offer to Purchase and the Letter of Transmittal
which, as amended or supplemented from time to time, together constitute the
"Offer"). The undersigned understands that Purchaser reserves the right to
transfer or assign, in whole or from time to time in part, to one or more of its
affiliates, the right to purchase all or any portion of all Shares tendered
pursuant to the Offer.
Subject to, and effective upon, acceptance for payment of Shares tendered
herewith, in accordance with the terms of the Offer (including, if the Offer is
extended or amended, the terms and conditions of such extension or amendment),
the undersigned hereby sells, assigns and transfers to, or upon the order of,
Purchaser all right, title and interest in and to all Shares that are being
tendered hereby and all dividends, distributions (including, without limitation,
distributions of additional Shares) and rights declared, paid or distributed in
respect of such Shares on or after November 26, 1997 (collectively,
"Distributions"), and irrevocably appoints the Depositary the true and lawful
agent and attorney-in-fact of the undersigned with respect to such Shares and
all Distributions, with full power of substitution (such power of attorney being
deemed to be an irrevocable power coupled with an interest), to (i) deliver
Share Certificates evidencing such Shares and all Distributions, or transfer
ownership of such Shares and all Distributions on the account books maintained
by a Book-Entry Transfer Facility, together, in either case, with all
accompanying evidences of transfer and authenticity, to or upon the order of
Purchaser, (ii) present such Shares and all Distributions for transfer on the
books of the Company and (iii) receive all benefits and otherwise exercise all
rights of beneficial ownership of such Shares and all Distributions, all in
accordance with the terms of the Offer.
The undersigned hereby irrevocably appoints designees of Purchaser and each
of them as such Stockholder's attorneys-in-fact and proxies, with full power of
substitution, in the manner set forth in the Letter of Transmittal, to the full
extent of such Stockholder's rights with respect to Shares tendered by such
Stockholder and accepted for payment by Purchaser (and with respect to any and
all other Shares or other securities issued or issuable in respect of such
Shares on or after the date hereof). All such powers of attorney and proxies
shall be considered irrevocable and coupled with an interest in the tendered
Shares. Such appointment will be effective when, and only to the extent that,
Purchaser accepts such Shares for payment. Upon such acceptance for payment, all
prior powers of attorney and proxies given by such Stockholder with respect to
such Shares (and such other Shares and securities) will be revoked without
further action, and no subsequent powers of attorney and proxies may be given
nor any subsequent written consents executed (and, if given or executed, will
not be deemed effective). The designees of Purchaser will, with respect to
Shares (and such other Shares and securities) for which such appointment is
effective, be empowered to exercise all voting and other rights of such
Stockholder as they, in their sole discretion, may deem proper at any annual or
special meeting of the Company's Stockholders or any adjournment or postponement
thereof. Purchaser reserves the right to require that, in order for Shares to be
deemed validly tendered, immediately upon Purchaser's payment for such Shares,
Purchaser must be able to exercise full voting and other rights with respect to
such Shares and other securities, including voting at any meeting of
Stockholders.
<PAGE> 4
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, sell, assign and transfer Shares tendered
hereby and all Distributions, and that when such Shares are accepted for payment
by Purchaser, Purchaser will acquire good, marketable and unencumbered title
thereto and to all Distributions, free and clear of all liens, restrictions,
charges and encumbrances (other than those resulting from action of Purchaser,
Parent or any of its subsidiaries), and that none of such Shares and
Distributions will be subject to any adverse claim (other than those resulting
from action of Purchaser, Parent or any of its subsidiaries). The undersigned,
upon request, shall execute and deliver all additional documents deemed by the
Depositary or Purchaser to be necessary or desirable to complete the sale,
assignment and transfer of Shares tendered hereby and all Distributions. In
addition, the undersigned shall remit and transfer promptly to the Depositary
for the account of Purchaser, all Distributions in respect of Shares tendered
hereby, accompanied by appropriate documentation of transfer, and, pending such
remittance and transfer or appropriate assurance thereof, Purchaser shall be
entitled to all rights and privileges as owner of each such Distribution and may
withhold the entire purchase price of Shares tendered hereby or deduct from such
purchase price the amount or value of such Distribution as determined by
Purchaser in its sole discretion.
No authority herein conferred or agreed to be conferred shall be affected
by, and all such authority shall survive, the death or incapacity of the
undersigned. All obligations of the undersigned hereunder shall be binding upon
the heirs, personal representatives, successors and assigns of the undersigned.
Except as otherwise stated in the Offer to Purchase, this tender is irrevocable.
The undersigned understands that tenders of Shares pursuant to any one of
the procedures described in Section 3 of the Offer to Purchase and in the
instructions hereto will constitute the undersigned's acceptance of the terms
and conditions of the Offer. Purchaser's acceptance of such Shares for payment
will constitute a binding agreement between the undersigned and Purchaser upon
the terms and subject to the conditions of the Offer, including, without
limitation, the undersigned's representation and warranty that the undersigned
owns all Shares being tendered.
Unless otherwise indicated herein in the box entitled "Special Payment
Instructions," please issue the check for the purchase price of all Shares
purchased, and return all Share Certificates evidencing Shares not tendered or
not purchased, in the name(s) of the registered holder(s) appearing above under
"Description of Shares Tendered." Similarly, unless otherwise indicated in the
box entitled "Special Delivery Instructions," please mail the check for the
purchase price of all Shares purchased and all Share Certificates evidencing
Shares not tendered or not purchased (and accompanying documents, as
appropriate) to the address(es) of the registered holder(s) appearing above
under "Description of Shares Tendered." In the event that the boxes entitled
"Special Payment Instructions" and "Special Delivery Instructions" are both
completed, please issue the check for the purchase price of all Shares purchased
and return all Stock Certificates evidencing Shares not purchased or not
tendered in the name(s) of, and mail such check and Share Certificates to, the
person(s) so indicated. Unless otherwise indicated herein in the box entitled
"Special Payment Instructions," please credit any Shares tendered hereby and
delivered by book-entry transfer, but which are not purchased, by crediting the
account at the Book-Entry Transfer Facility designated above. The undersigned
recognizes that Purchaser has no obligation, pursuant to the Special Payment
Instructions, to transfer any Shares from the name of the registered holder(s)
thereof if Purchaser does not purchase any of the Shares tendered hereby.
<PAGE> 5
<TABLE>
<S> <C>
SPECIAL PAYMENT INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7) (SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if the check for To be completed ONLY if the check for the
the purchase price of Shares purchased or purchase price of Shares purchased or Share
Share Certificates evidencing Shares not Certificates evidencing Shares not tendered
tendered or not purchased are to be issued in or not purchased are to be mailed to someone
the name of someone other than the other than the undersigned, or to the
undersigned. undersigned at an address other than that
shown under "Description of Shares Tendered."
Issue [ ] check [ ] Share Certificate(s) to:
Name: Issue [ ] check [ ] Share Certificate(s) to:
Name:
- ---------------------------------------------
(PRINT) ---------------------------------------------
(PRINT)
Address: Address:
- --------------------------------------------- --------------------------------------------
- --------------------------------------------- ---------------------------------------------
(INCLUDE ZIP CODE) (INCLUDE ZIP CODE)
- ---------------------------------------------
(TAXPAYER IDENTIFICATION OR SOCIAL SECURITY
NUMBER)
(SEE SUBSTITUTE FORM W-9 INCLUDED HEREIN)
</TABLE>
<PAGE> 6
<TABLE>
<S> <C>
IMPORTANT GUARANTEE OF SIGNATURE(S)
STOCKHOLDERS: (IF REQUIRED -- SEE INSTRUCTIONS
SIGN HERE (ALSO, PLEASE COMPLETE 1 AND 5)
SUBSTITUTE FORM W-9 INCLUDED FOR USE BY FINANCIAL INSTITUTIONS ONLY. PLACE
HEREIN) MEDALLION GUARANTEE IN SPACE BELOW.
- --------------------------------------------- Authorized Signature:
- --------------------------------------------- ---------------------------------------------
SIGNATURE(S) OF HOLDER(S) Name:
Date: --------------------- ,199 -- ---------------------------------------------
(PLEASE PRINT)
(Must be signed by registered holder(s)
exactly as name(s) appear(s) on Share Name of Firm:
Certificates or on a security position
listing or by a person(s) authorized to ---------------------------------------------
become registered holder(s) by certificates
and documents transmitted herewith. If Address:
signature is by a trustee, executor,
administrator, guardian, attorney- in-fact, ---------------------------------------------
officer of a corporation or other person (INCLUDE ZIP CODE)
acting in a fiduciary or representative
capacity, please pro- Area Code and Telephone Number:
vide the following information. See
Instruction 5.) ---------------------------------------------
Name(s): Date: ---------------------,199 --
- ------------------------------------------
(PLEASE PRINT)
Capacity (full title):
- ------------------------------------------
Address:
- ------------------------------------------
- ------------------------------------------
(INCLUDE ZIP CODE)
Area Code and Telephone Number:
- ------------------------------------------
Tax Identification or
Social Security Number:
- ------------------------------------------
(SEE SUBSTITUTE FORM W-9
INCLUDED HEREIN)
</TABLE>
<PAGE> 7
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURES. Except as otherwise provided below, all
signatures on this Letter of Transmittal must be guaranteed by a financial
institution (including most banks, savings and loans associations and brokerage
houses) that is a participant in the Security Transfer Agents Medallion Program,
the New York Stock Exchange Medallion Signature Guarantee Program or the Stock
Exchange Medallion Program (each an "Eligible Institution"). No signature
guarantee is required on this Letter of Transmittal (a) if this Letter of
Transmittal is signed by the registered holder(s) (which term, for purposes of
this document, shall include any participant in a Book-Entry Transfer Facility
whose name appears on a security position listing as the owner of Shares) of
Shares tendered herewith, unless such holder(s) has completed either the box
entitled "Special Delivery Instructions" or the box entitled "Special Payment
Instructions," or (b) if such Shares are tendered for the account of an Eligible
Institution. See Instruction 5.
2. DELIVERY OF LETTER OF TRANSMITTAL AND SHARE CERTIFICATES. This Letter of
Transmittal is to be used either if Share Certificates are to be forwarded
herewith or if Shares are to be delivered by book-entry transfer pursuant to the
procedure set forth in Section 3 of the Offer to Purchase. Share Certificates
evidencing all physically tendered Shares, or a confirmation of a book-entry
transfer into the Depositary's account at a Book-Entry Transfer Facility of all
Shares delivered by book-entry transfer, as well as, in each case, a properly
completed and duly executed Letter of Transmittal (or facsimile thereof) with
any required signature guarantees (or, in the case of a book-entry transfer, an
Agent's Message, as defined below) and any other documents required by this
Letter of Transmittal, must be received by the Depositary at one of its
addresses set forth herein prior to the Expiration Date (as defined in Section l
of the Offer to Purchase). If Share Certificates are forwarded to the Depositary
in multiple deliveries, a properly completed and duly executed Letter of
Transmittal must accompany each such delivery. Stockholders whose Share
Certificates are not immediately available, who cannot deliver their Share
Certificates and all other required documents to the Depositary prior to the
Expiration Date or who cannot complete the procedure for delivery by book-entry
transfer on a timely basis may tender their Shares pursuant to the guaranteed
delivery procedure described in Section 3 of the Offer to Purchase. Pursuant to
such procedure: (i) such tender must be made by or through an Eligible
Institution; (ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form made available by Purchaser, must be
received by the Depositary prior to the Expiration Date; and (iii) the Share
Certificates evidencing all physically delivered Shares in proper form for
transfer, or a confirmation of a book-entry transfer into the Depositary's
account at a Book-Entry Transfer Facility of all Shares delivered by book-entry
transfer, in each case together with a Letter of Transmittal (or a facsimile
thereof), properly completed and duly executed, with any required signature
guarantees (or, in the case of a book-entry transfer, an Agent's Message), and
any other documents required by this Letter of Transmittal, must be received by
the Depositary within three Nasdaq National Market System trading days after the
date of execution of such Notice of Guaranteed Delivery, all as described in
Section 3 of the Offer to Purchase. The term "Agent's Message" means a message,
transmitted by a Book-Entry Transfer Facility to, and received by, the
Depositary and forming a part of the Book-Entry Confirmation, which states that
such Book-Entry Transfer Facility has received an express acknowledgment from
the participant in such Book-Entry Transfer Facility tendering the Shares that
such participant has received and agrees to be bound by the terms of this Letter
of Transmittal and that Purchaser may enforce such agreement against the
participant.
THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL, SHARE CERTIFICATES
AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH ANY BOOK-ENTRY
TRANSFER FACILITY, IS AT THE OPTION AND RISK OF THE TENDERING STOCKHOLDER, AND
THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY.
IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY
INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO
ENSURE TIMELY DELIVERY.
No alternative, conditional or contingent tenders will be accepted and no
fractional Shares will be purchased. By execution of this Letter of Transmittal
(or a facsimile hereof), all tendering Stockholders waive any right to receive
any notice of the acceptance of their Shares for payment.
3. INADEQUATE SPACE. If the space provided herein under "Description of
Shares Tendered" is inadequate, the Share Certificate numbers, the number of
Shares evidenced by such Share Certificates and the number of Shares tendered
should be listed on a separate schedule and attached hereto.
4. PARTIAL TENDERS. (Not applicable to Stockholders who tender by
book-entry transfer.) If fewer than all the Shares evidenced by any Share
Certificate delivered to the Depositary herewith are to be tendered hereby, fill
in the number of Shares which are to be tendered in the box entitled "Number of
Shares Tendered." In such cases, new Share Certificate(s) evidencing the
remainder of the Shares that were evidenced by the Share Certificates delivered
to the Depositary herewith will be sent to the person(s) signing this Letter of
Transmittal, unless otherwise provided in the box entitled "Special Delivery
Instructions", as soon as practicable after the expiration or termination of the
Offer. All Shares evidenced by Share Certificates delivered to the Depositary
will be deemed to have been tendered unless otherwise indicated.
<PAGE> 8
5. SIGNATURES ON LETTER OF TRANSMITTAL; STOCK POWERS AND ENDORSEMENTS. If
this Letter of Transmittal is signed by the registered holder(s) of the Shares
tendered hereby, the signature(s) must correspond with the name(s) as written on
the face of the Share Certificates evidencing such Shares without alteration,
enlargement or any other change whatsoever. If any Share tendered hereby is
owned of record by two or more persons, all such persons must sign this Letter
of Transmittal.
If any of the Shares tendered hereby are registered in the names of
different holders, it will be necessary to complete, sign and submit as many
separate Letters of Transmittal as there are different registrations of such
Shares.
If this Letter of Transmittal is signed by the registered holder(s) of the
Shares tendered hereby, no endorsements of Share Certificates or separate stock
powers are required, unless payment is to be made to, or Share Certificates
evidencing Shares not tendered or not purchased are to be issued in the name of,
a person other than the registered holder(s), in which case the Share
Certificate(s) evidencing the Shares tendered hereby must be endorsed or
accompanied by appropriate stock powers, in either case signed exactly as the
name(s) of the registered holder(s) appear(s) on such Share Certificate(s).
Signatures on such Share Certificate(s) and stock powers must be guaranteed by
an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the Shares tendered hereby, the Share Certificate(s)
evidencing the Shares tendered hereby must be endorsed or accompanied by
appropriate stock powers, in either case signed exactly as the name(s) of the
registered holder(s) appear(s) on such Share Certificate(s). Signatures on such
Share Certificate(s) and stock powers must be guaranteed by an Eligible
Institution.
If this Letter of Transmittal or any Share Certificate or stock power is
signed by a trustee, executor, administrator, guardian, attorney-in-fact,
officer of a corporation or other person acting in a fiduciary or representative
capacity, such person should so indicate when signing, and proper evidence
satisfactory to Purchaser of such person's authority so to act must be
submitted.
6. STOCK TRANSFER TAXES. Except as otherwise provided in this Instruction
6, Purchaser will pay all stock transfer taxes with respect to the sale and
transfer of any Shares to it or its order pursuant to the Offer. If, however,
payment of the purchase price of any Shares purchased is to be made to, or Share
Certificate(s) evidencing Shares not tendered or not purchased are to be issued
in the name of, a person other than the registered holder(s), the amount of any
stock transfer taxes (whether imposed on the registered holder(s), such other
person or otherwise) payable on account of the transfer to such other person
will be deducted from the purchase price of such Shares purchased, unless
evidence satisfactory to Purchaser of the payment of such taxes, or exemption
therefrom, is submitted.
EXCEPT AS PROVIDED IN THIS INSTRUCTION 6, IT WILL NOT BE NECESSARY FOR
TRANSFER TAX STAMPS TO BE AFFIXED TO THE SHARE CERTIFICATES EVIDENCING THE
SHARES TENDERED HEREBY.
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If a check for the purchase
price of any Shares tendered hereby is to be issued, or Share Certificate(s)
evidencing Shares not tendered or not purchased are to be issued, in the name of
a person other than the person(s) signing this Letter of Transmittal or if such
check or any such Share Certificate is to be sent to someone other than the
person(s) signing this Letter of Transmittal or to the person(s) signing this
Letter of Transmittal but at an address other than that shown in the box
entitled "Description of Shares Tendered", the appropriate boxes on this Letter
of Transmittal must be completed. With respect to Stockholders delivering Shares
tendered hereby by book-entry transfer, all Shares not purchased will be
returned by crediting the account at the Book-Entry Transfer Facility designated
in this Letter of Transmittal as the account from which such Shares were
delivered.
8. WAIVER OF CONDITIONS. Except as described in the Offer to Purchase, the
conditions to the Offer may be waived by Purchaser, in whole or in part, at any
time and from time to time, in Purchaser's sole discretion.
9. QUESTIONS AND REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions
and requests for assistance may be directed to the Dealer Manager or the
Information Agent at their respective addresses or telephone numbers set forth
below. Additional copies of the Offer to Purchase, this Letter of Transmittal
and the Notice of Guaranteed Delivery may be obtained from the Information Agent
or the Dealer Manager or from brokers, dealers, commercial banks or trust
companies.
10. SUBSTITUTE FORM W-9. Each tendering Stockholder is required to provide
the Depositary with a correct Taxpayer Identification Number ("TIN") on the
Substitute Form W-9 which is provided under "Important Tax Information" below,
and to certify, under penalties of perjury, that such number is correct and that
such Stockholder is not subject to backup withholding of federal income tax. If
a tendering Stockholder has been notified by the Internal Revenue Service that
such Stockholder is subject to backup withholding, such Stockholder must cross
out item (2) of the Certification box of the Substitute Form W-9, unless such
Stockholder has since been notified by the Internal Revenue Service that such
Stockholder is no longer subject to backup withholding. Failure to provide the
information on the Substitute Form W-9 may subject the tendering Stockholder to
31% federal income tax withholding on the payment of the purchase price of all
Shares purchased from such Stockholder. If the tendering Stockholder has not
been issued a TIN and has applied for one or intends to apply for one in the
near future, such Stockholder should write "Applied For" in the space provided
for the TIN in Part I of the Substitute Form W-9, sign and date the Substitute
Form W-9 and complete the Certificate of Awaiting Taxpayer Identification Number
below. Notwithstanding that "Applied For" is written in Part I and the
Certificate of Awaiting Taxpayer
<PAGE> 9
Identification Number is completed, the Depositary will withhold 31% of all
payments of the purchase price to such Stockholder until a TIN is provided to
the Depositary. Such amounts will be refunded to such Stockholder if a TIN is
provided to the Depositary within 60 days.
11. LOST, DESTROYED OR STOLEN CERTIFICATES. If any Share Certificate(s)
representing Shares has been lost, destroyed or stolen, the tendering
Stockholder should promptly notify the Company's Transfer Agent, First Chicago
Trust Company of New York at (800) 446-2617. The tendering Stockholder will then
be instructed as to the steps that must be taken in order to replace the Share
Certificate(s). This Letter of Transmittal and related documents cannot be
processed until the procedures for replacing lost or destroyed certificates have
been followed.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR FACSIMILE HEREOF), PROPERLY
COMPLETED AND DULY EXECUTED (TOGETHER WITH ANY REQUIRED SIGNATURE GUARANTEES AND
SHARE CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY TRANSFER AND ALL OTHER REQUIRED
DOCUMENTS) OR A PROPERLY COMPLETED AND DULY EXECUTED NOTICE OF GUARANTEED
DELIVERY MUST BE RECEIVED BY THE DEPOSITARY PRIOR TO THE EXPIRATION DATE (AS
DEFINED IN THE OFFER TO PURCHASE).
<PAGE> 10
IMPORTANT TAX INFORMATION
Under the federal income tax law, a Stockholder whose tendered Shares are
accepted for payment is required by law to provide the Depositary (as payer)
with such Stockholder's correct TIN on Substitute Form W-9 below. If such
Stockholder is an individual, the TIN is such Stockholder's social security
number. If the Depositary is not provided with the correct TIN, the Stockholder
may be subject to a $50 penalty imposed by the Internal Revenue Service. In
addition, payments that are made to such Stockholder with respect to Shares
purchased pursuant to the Offer may be subject to backup withholding at a rate
of 31%.
Certain Stockholders (including, among others, all corporations and certain
foreign individuals) are not subject to these backup withholding and reporting
requirements. In order for a foreign individual to qualify as an exempt
recipient, such individual must submit a statement, signed under penalties of
perjury, attesting to such individual's exempt status. Forms of such statements
can be obtained from the Depositary. See the enclosed Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9 for
additional instructions.
If backup withholding applies, the Depositary is required to withhold 31%
of any payments made to the Stockholder. Backup withholding is not an additional
tax. Rather, the tax liability of persons subject to backup withholding will be
reduced by the amount of tax withheld. If withholding results in an overpayment
of taxes, a refund may be obtained from the Internal Revenue Service.
PURPOSE OF SUBSTITUTE FORM W-9
To prevent backup withholding on payments that are made to a Stockholder
with respect to Shares purchased pursuant to the Offer, the Stockholder is
required to notify the Depositary of such Stockholder's correct TIN by
completing the form below certifying (i) that the TIN provided on Substitute
Form W-9 is correct (or that such Stockholder is awaiting a TIN), and (ii) that
such Stockholder is not subject to backup withholding because (a) such
Stockholder has not been notified by the Internal Revenue Service that such
Stockholder is subject to backup withholding as a result of a failure to report
all interest or dividends, (b) the Internal Revenue Service has notified such
Stockholder that such Stockholder is no longer subject to backup withholding, or
(c) such Stockholder is exempt from backup withholding.
WHAT NUMBER TO GIVE THE DEPOSITARY
The Stockholder is required to give the Depositary the social security
number or employer identification number of the record holder of the Shares
tendered hereby. If the Shares are in more than one name or are not in the name
of the actual owner, consult the enclosed Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9 for additional guidance on
which number to report. If the tendering Stockholder has not been issued a TIN
and has applied for a number or intends to apply for a number in the near
future, the Stockholder should write "Applied For" in the space provided for the
TIN in Part I, sign and date the Substitute Form W-9 and complete the
Certificate of Awaiting Taxpayer Identification Number below. Notwithstanding
that "Applied For" is written in Part I and the Certificate of Awaiting Taxpayer
Identification Number is completed, the Depositary will withhold 31% of all
payments of the purchase price to such Stockholder until a TIN is provided to
the Depositary. Such amounts will be refunded to such surrendering Stockholder
if a TIN is provided to the Depositary within 60 days.
<PAGE> 11
<TABLE>
<S> <C> <C>
- --------------------------------------------------------------------------------------------------------
PAYER'S NAME: FIRST CHICAGO TRUST COMPANY OF NEW YORK
- --------------------------------------------------------------------------------------------------------
SUBSTITUTE PART I -- Taxpayer Identification Number -- ------------------------------------
FORM W-9 For all accounts, enter taxpayer Social Security Number
identification number in the box at right. OR
(For most individuals this is your social -----------------------------------
security number. If you do not have a Employer Identification Number
number, see Obtaining a Number in the (If awaiting TIN, write "Applied
enclosed Guidelines.) Certify by signing and For")
dating below. Note: If the account is in
more than one name, see the chart in the
enclosed Guidelines to determine which
number to give the Payer.
---------------------------------------------------------------------------------
PART II -- For Payees Exempt From Backup Withholding, see the enclosed
Guidelines and complete as instructed therein.
CERTIFICATION--Under penalties of perjury, I certify that:
(1) The number shown on this form is my correct Taxpayer Identification Number
(or a Taxpayer Identification Number has not been issued to me and either (a) I
have mailed or delivered an application to receive a Taxpayer Identification
Number to the appropriate Internal Revenue Service Center ("IRS") or Social
Security Administration Office or (b) I intend to mail or deliver an application
in the near future. I understand that, notwithstanding that I have written
"Applied For" in Part I and have completed the Certificate of Awaiting Taxpayer
Identification Number, 31% of all reportable payments made to me thereafter will
DEPARTMENT OF THE be withheld until I provide a correct Taxpayer Identification Number); and
TREASURY (2) I am not subject to backup withholding either because (a) I am exempt from
INTERNAL REVENUE backup withholding, (b) I have not been notified by the IRS that I am subject to
SERVICE backup withholding as a result of failure to report all interest or dividends,
PAYER'S REQUEST or (c) the IRS has notified me that I am no longer subject to backup
FOR TAXPAYER withholding.
IDENTIFICATION CERTIFICATION INSTRUCTIONS -- You must cross out item (2) above if you have been
NUMBER (TIN) notified by the IRS that you are subject to backup withholding because of
underreporting interest or dividends on your tax return. However, if after being
notified by the IRS that you were subject to backup withholding you received
another notification from the IRS that you are no longer subject to backup
withholding, do not cross out item (2). (Also see instructions in the enclosed
Guidelines.)
---------------------------------------------------------------------------------
SIGNATURE ----------------------------------------
DATE -------------------------------, 199---
- --------------------------------------------------------------------------------------------------------
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW
THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU WROTE "APPLIED FOR" IN THE
BOX IN PART I OF THE SUBSTITUTE FORM W-9.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification
number has not been issued to me, and either (1) I have mailed or delivered an
application to receive a taxpayer identification number to the appropriate
Internal Revenue Service Center or Social Security Administration Office or
(2) I intend to mail or deliver an application in the near future. I
understand that, notwithstanding that I have written "Applied For" in Part I
and have completed the Certificate of Awaiting Taxpayer Identification Number,
31% of all reportable payments made to me prior to the time I provide a
properly certified Taxpayer Identification Number will be withheld.
SIGNATURE
-----------------------------------------------------
DATE -------------------------------------------- 199-----
<PAGE> 12
Any questions or requests for assistance may be directed to the Dealer
Manager or the Information Agent at their respective telephone numbers and
addresses listed below. Additional copies of this Offer to Purchase, the Letter
of Transmittal and the Notice of Guaranteed Delivery may be obtained from the
Information Agent or the Dealer Manager at their respective addresses and
telephone numbers set forth below. You may also contact your broker, dealer,
commercial bank, trust company or nominee for assistance concerning the Offer.
The Information Agent for the Offer is:
(Georgeson & Company Logo)
Wall Street Plaza
New York, New York 10005
Banks and Brokers call collect:
(212) 440-9800
All others call toll free:
(800) 223-2064
The Dealer Manager for the Offer is:
BEAR, STEARNS & CO. INC.
245 Park Avenue
New York, New York 10167
Call toll free:
(888) 285-3977
<PAGE> 1
Exhibit (a)(3)
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF SHARES OF COMMON STOCK
OF
BDM INTERNATIONAL, INC.
(NOT TO BE USED FOR SIGNATURE GUARANTEES)
This Notice of Guaranteed Delivery, or one substantially in the form
hereof, must be used to accept the Offer (as defined below) (i) if certificates
("Share Certificates") evidencing shares of Common Stock (the "Shares"), of BDM
International, Inc., a Delaware corporation (the "Company"), are not immediately
available; (ii) if Share Certificates and all other required documents cannot be
delivered to First Chicago Trust Company of New York, as depositary (the
"Depositary"), on or prior to the Expiration Date (as defined in Section 1 of
the Offer to Purchase); or (iii) if the procedure for delivery by book-entry
transfer cannot be completed on a timely basis. This Notice of Guaranteed
Delivery may be delivered by hand, or transmitted by telegram, telex, or
facsimile transmission, or mail to the Depositary and must include a guarantee
by an Eligible Institution (as defined in Section 3 of the Offer to Purchase)
and a representation that the Stockholder owns Shares tendered within the
meaning of, and that the tender of Shares effected hereby complies with, Rule
14e-4 under the Securities Exchange Act of 1934, as amended. See Section 3 of
the Offer to Purchase.
THE DEPOSITARY FOR THE OFFER IS:
FIRST CHICAGO TRUST COMPANY OF NEW YORK
By Facsimile Transmission:
(FOR ELIGIBLE INSTITUTIONS ONLY)
201-222-4720
OR
201-222-4721
<TABLE>
<S> <C> <C>
By Hand: By Mail: By Overnight Courier:
TENDERS & EXCHANGES TENDERS & EXCHANGES TENDERS & EXCHANGES
C/O THE DEPOSITORY TRUST COMPANY SUITE 4660 -- BDM SUITE 4680 -- BDM
55 WATER STREET P. O. BOX 2569 14 WALL STREET -- 8TH FLOOR
DTC TAD JERSEY CITY, NJ NEW YORK, NY 10005
VIETNAM VETERANS MEMORIAL PLAZA 07303-2569
NEW YORK, NY 10041
</TABLE>
To Confirm Receipt of Notice of Guaranteed Delivery:
201-222-4707
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE, OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TRANSMISSION
OTHER THAN AS SET FORTH ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY.
THIS FORM IS NOT TO BE USED TO GUARANTEE SIGNATURES. IF A SIGNATURE ON A
LETTER OF TRANSMITTAL IS REQUIRED TO BE GUARANTEED BY AN ELIGIBLE INSTITUTION
UNDER THE INSTRUCTIONS THERETO, SUCH SIGNATURE GUARANTEE MUST APPEAR IN THE
APPLICABLE SPACE PROVIDED IN THE SIGNATURE BOX ON THE LETTER OF TRANSMITTAL.
<PAGE> 2
Ladies and Gentlemen:
The undersigned hereby tenders to Systems Acquisition Inc., a wholly owned
subsidiary of TRW Inc., upon the terms and subject to the conditions set forth
in the Offer to Purchase, dated November 26, 1997 (the "Offer to Purchase"), and
the related Letter of Transmittal (which, as amended or supplemented from time
to time, together constitute the "Offer"), receipt of each of which is hereby
acknowledged, the number of Shares specified below pursuant to the guaranteed
delivery procedures described in Section 3 of the Offer to Purchase.
<TABLE>
<S> <C>
- ---------------------------------------------------------------------------------------------
Number of Shares: Please Type or Print Name(s) of Record
------------------------------------------ Holder(s) Below:
Certificate Nos. (if available): --------------------------------------------
--------------------- --------------------------------------------
------------------------------------------ Please Type or Print Address(es) Below:
Account Number: --------------------------------------------
--------------------------------- --------------------------------------------
Check one box if Shares will be tendered --------------------------------------------
by book-entry transfer: --------------------------------------------
[ ] The Depository Trust Company --------------------------------------------
[ ] Philadelphia Depository Trust Company --------------------------------------------
Date: , 199 --------------------------------------------
---------------------------- --- Please Type or Print Telephone Number(s)
Below:
--------------------------------------------
--------------------------------------------
Sign Below:
--------------------------------------------
--------------------------------------------
Signature(s)
- ---------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 3
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a participant in the Security Transfer Agents Medallion
Program, the New York Stock Exchange Medallion Signature Guarantee Program, or
the Stock Exchange Medallion Program, hereby guarantees to deliver to the
Depositary either the Share Certificates tendered hereby, in proper form for
transfer, or a Book-Entry Confirmation (as defined in Section 2 of the Offer to
Purchase), of a transfer of such Shares, in any such case together with a
properly completed and duly executed Letter of Transmittal, or a manually signed
facsimile thereof, with any required signature guarantees, or an Agent's Message
(as defined in Section 2 of the Offer to Purchase), and any other documents
required by the Letter of Transmittal within three Nasdaq National Market
trading days after the date of execution of this Notice of Guaranteed Delivery.
The Eligible Institution that completes this form must communicate the
guarantee to the Depositary and must deliver the Letter of Transmittal and Share
Certificates for Shares to the Depositary within the time period shown herein.
Failure to do so could result in financial loss to such Eligible Institution.
<TABLE>
<S> <C>
- ---------------------------------------------------------------------------------------------
Name of Firm: --------------------------------------------
------------------------------------------ (Authorized Signature)
------------------------------------------ Name:
Address (including Zip Code): --------------------------------------------
------------------------------------------ (Please Type or Print)
------------------------------------------ Title:
------------------------------------------ --------------------------------------------
------------------------------------------ --------------------------------------------
Area Code and Tel. No.: Date:
------------------------------------------ --------------------------------------------
- ---------------------------------------------------------------------------------------------
</TABLE>
NOTE: DO NOT SEND SHARE CERTIFICATES FOR SHARES WITH THIS NOTICE. SHARE
CERTIFICATES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL.
<PAGE> 1
Exhibit (a)(4)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
BDM INTERNATIONAL, INC.
AT
$29.50 NET PER SHARE
BY
SYSTEMS ACQUISITION INC.
A WHOLLY OWNED SUBSIDIARY OF
TRW INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON WEDNESDAY, DECEMBER 24, 1997, UNLESS THE OFFER IS EXTENDED.
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
We have been appointed by Systems Acquisition Inc. ("Purchaser"), a wholly
owned subsidiary of TRW Inc., to act as Dealer Manager in connection with
Purchaser's offer to purchase all the outstanding shares of Common Stock (the
"Shares") of BDM International, Inc. (the "Company"), at a price of $29.50 per
Share, net to the seller in cash without interest thereon (the "Per Share
Amount"), upon the terms and subject to the conditions set forth in the Offer to
Purchase, dated November 26, 1997 (the "Offer to Purchase"), and the related
Letter of Transmittal (which, as amended or supplemented from time to time,
together constitute the "Offer") enclosed herewith. Please furnish copies of the
enclosed materials to those of your clients for whose accounts you hold Shares
registered in your name or in the name of your nominee.
The Offer is being made pursuant to an Agreement and Plan of Merger, dated
as of November 20, 1997 (the "Merger Agreement"), among the Company, Parent and
Purchaser. The Merger Agreement provides, among other things, that as soon as
practicable after the satisfaction or waiver of the conditions to the Merger set
forth in the Merger Agreement, on the terms and subject to the conditions of the
Merger Agreement and in accordance with the Delaware General Corporation Law,
Purchaser will be merged with and into the Company (the "Merger"), with the
Company continuing as the surviving corporation in the Merger as a wholly owned
subsidiary of Parent. At the effective time of the Merger, subject to certain
exceptions, each issued and outstanding Share will be converted into the right
to receive the Per Share Amount less any required withholding taxes. The Merger
Agreement is more fully described in Section 11 of the Offer to Purchase.
The Offer is conditioned upon, among other things, (i) there having been
validly tendered and not withdrawn prior to the expiration of the Offer a number
of Shares which represents at least a majority of the total voting power of
securities of the Company entitled to vote in the election of directors or in a
merger calculated on a fully diluted basis, and (ii) any applicable waiting
period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended, having expired or been terminated. The Offer is also subject to other
conditions. See Section 14.
Enclosed for your information and use are copies of the following
documents:
1. Offer to Purchase;
2. Letter of Transmittal to be used by holders of Shares in accepting
the Offer and tendering Shares;
3. Notice of Guaranteed Delivery to be used to accept the Offer if the
Shares and all other required documents are not immediately available or
cannot be delivered to First Chicago Trust Company of
<PAGE> 2
New York (the "Depositary") by the expiration of the Offer, or if the
procedure for book-entry transfer cannot be completed by the expiration of
the Offer;
4. A letter to stockholders of the Company from Philip A. Odeen,
President and Chief Executive Officer of the Company, together with the
Company's Solicitation/Recommendation Statement on Schedule 14D-9 filed
with the Securities and Exchange Commission by the Company;
5. A letter which may be sent to your clients for whose accounts you
hold Shares registered in your name or in the name of your nominee, with
space provided for obtaining such clients' instructions with regard to the
Offer;
6. Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9; and
7. Return envelope addressed to the Depositary.
WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE. PLEASE NOTE
THAT THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON WEDNESDAY, DECEMBER 24, 1997, UNLESS THE OFFER IS EXTENDED.
In all cases, payment for Shares tendered and accepted for payment pursuant
to the Offer will be made only after timely receipt by the Depositary of Share
Certificates evidencing such Shares or a confirmation of a book-entry transfer
of such Shares into the Depositary's account at one of the Book-Entry Transfer
Facilities (as defined in the Offer to Purchase), a Letter of Transmittal (or
facsimile thereof) properly completed and duly executed, or an Agent's Message
(as defined in the Offer to Purchase), and any other required documents in
accordance with the instructions contained in the Letter of Transmittal.
Stockholders who wish to tender Shares but cannot deliver the Share
Certificates or other required documents representing the Shares, or cannot
comply with the procedures for book-entry transfer, prior to the expiration of
the Offer, a tender of Shares may be effected by following the guaranteed
delivery procedures described in Section 3 of the Offer to Purchase.
Purchaser will not pay any fees or commissions to any broker, dealer, or
other person (other than the Dealer Manager or the Information Agent as
described in the Offer) in connection with the solicitation of tenders of Shares
pursuant to the Offer. However, Purchaser will reimburse you for customary
mailing and handling expenses incurred by you in forwarding any of the enclosed
materials to your clients. Purchaser will pay or cause to be paid any stock
transfer taxes payable with respect to the transfer of Shares to it, except as
otherwise provided in Instruction 6 of the Letter of Transmittal.
Any questions or requests for assistance or additional copies of the
enclosed materials may be directed to or obtained from the Information Agent or
the Dealer Manager at their respective telephone numbers and addresses set forth
on the back cover of the Offer to Purchase.
Very truly yours,
Bear, Stearns & Co. Inc.
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR
ANY OTHER PERSON THE AGENT OF PARENT, PURCHASER, THE COMPANY, THE DEALER
MANAGER, THE INFORMATION AGENT OR THE DEPOSITARY, OR OF ANY AFFILIATE OF ANY OF
THEM, OR AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR TO MAKE ANY
STATEMENT ON BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN THE
ENCLOSED DOCUMENTS AND THE STATEMENTS CONTAINED THEREIN.
<PAGE> 1
Exhibit (a)(5)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
BDM INTERNATIONAL, INC.
AT
$29.50 NET PER SHARE
BY
SYSTEMS ACQUISITION INC.
A WHOLLY OWNED SUBSIDIARY OF
TRW INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON WEDNESDAY, DECEMBER 24, 1997, UNLESS THE OFFER IS EXTENDED.
To Our Clients:
Enclosed for your consideration is an Offer to Purchase, dated November 26,
1997 (the "Offer to Purchase"), and a related Letter of Transmittal (which, as
amended or supplemented from time to time, together constitute the "Offer") in
connection with the offer by Systems Acquisition Inc. ("Purchaser"), a wholly
owned subsidiary of TRW Inc. ("Parent"), to purchase all the outstanding shares
of Common Stock (the "Shares") of BDM International, Inc. (the "Company") at a
price of $29.50 per Share, net to the seller in cash without interest thereon
(the "Per Share Amount"), upon the terms and subject to the conditions set forth
in the Offer. Also enclosed is the Letter to Stockholders of the Company from
Philip A. Odeen, President and Chief Executive Officer of the Company, together
with the Company's Solicitation/Recommendation Statement on Schedule 14D-9.
The Offer is being made pursuant to an Agreement and Plan of Merger, dated
as of November 20, 1997 (the "Merger Agreement"), among the Company, Parent and
Purchaser. The Merger Agreement provides, among other things, that as soon as
practicable after the satisfaction or waiver of the conditions to the Merger set
forth in the Merger Agreement, on the terms and subject to the conditions of the
Merger Agreement, and in accordance with the Delaware General Corporation Law,
Purchaser will be merged with and into the Company (the "Merger"), with the
Company continuing as the surviving corporation in the Merger as a wholly owned
subsidiary of Parent. At the effective time of the Merger, subject to certain
exceptions, each issued and outstanding Share will be converted into the right
to receive the Per Share Amount less any required withholding taxes. The Merger
Agreement is more fully described in Section 11 of the Offer to Purchase.
WE ARE THE HOLDER OF RECORD OF SHARES HELD BY US FOR YOUR ACCOUNT. A TENDER
OF SUCH SHARES CAN BE MADE ONLY BY US AS THE HOLDER OF RECORD AND PURSUANT TO
YOUR INSTRUCTIONS. THE LETTER OF TRANSMITTAL IS FURNISHED TO YOU FOR YOUR
INFORMATION ONLY AND CANNOT BE USED BY YOU TO TENDER SHARES HELD BY US FOR YOUR
ACCOUNT.
We request instructions as to whether you wish to have us tender, on your
behalf, any or all the Shares held by us for your account, upon the terms and
subject to the conditions set forth in the Offer.
Your attention is invited to the following:
1. The tender price is $29.50 per Share, net to the seller in cash
without interest thereon.
<PAGE> 2
2. The Offer is being made for all outstanding Shares.
3. The Company's Board of Directors has unanimously approved the
Merger Agreement and the transactions contemplated thereby, including the
Offer and the Merger, has determined that the terms of the Offer and the
Merger are fair to and in the best interests of the stockholders of the
Company, and recommends that stockholders accept the Offer and tender their
Shares pursuant to the Offer.
4. The Offer and Withdrawal Rights will expire at 12:00 Midnight, New
York City time, on Wednesday, December 24, 1997, unless the Offer is
extended.
5. The Offer is conditioned upon, among other things, (i) there having
been validly tendered and not withdrawn prior to the expiration of the
Offer a number of Shares which represents at least a majority of the total
voting power of securities of the Company entitled to vote in the election
of directors or in a merger calculated on a fully diluted basis, and (ii)
any applicable waiting period under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, having expired or been terminated.
The Offer is also subject to certain other conditions. See Section 14 of
the Offer to Purchase.
6. Tendering stockholders will not be obligated to pay brokerage fees
or commissions or, subject to Instruction 6 of the Letter of Transmittal,
stock transfer taxes on the transfer and sale of Shares pursuant to the
Offer.
If you wish to have us tender any or all of your Shares, please so instruct
us by completing, executing and returning to us the instruction form attached to
this letter. A return envelope is enclosed for your use in delivering your
instructions to us. If you authorize the tender of your Shares, all such Shares
will be tendered, unless otherwise specified in your instructions. YOUR
INSTRUCTIONS SHOULD BE FORWARDED TO US IN AMPLE TIME TO PERMIT US TO SUBMIT A
TENDER ON YOUR BEHALF PRIOR TO THE EXPIRATION OF THE OFFER.
The Offer is made solely by the Offer to Purchase and the related Letter of
Transmittal and is being made to all holders of Shares of the Company. The Offer
is not being made to (nor will tenders be accepted from or on behalf of) the
holders of Shares in any jurisdiction in which the making of the Offer or the
acceptance thereof would not be in compliance with the laws of such
jurisdiction. In any jurisdiction where the securities, blue sky or other laws
require the Offer to be made by a licensed broker or dealer, the Offer shall be
deemed to be made on behalf of Purchaser by the Dealer Manager or by one or more
registered brokers or dealers licensed under the laws of such jurisdiction.
<PAGE> 3
INSTRUCTIONS WITH RESPECT TO THE OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF BDM INTERNATIONAL, INC.
AT $29.50 NET PER SHARE
BY SYSTEMS ACQUISITION INC.
A WHOLLY OWNED SUBSIDIARY OF
TRW INC.
The undersigned acknowledge(s) receipt of your letter, the enclosed Offer
to Purchase, dated November 26, 1997, and the related Letter of Transmittal
(which, as amended or supplemented from time to time, together constitute the
"Offer"), in connection with the offer by Systems Acquisition Inc., a wholly
owned subsidiary of TRW Inc., to purchase all the outstanding shares of Common
Stock (the "Shares") of BDM International, Inc.
This will instruct you to instruct your nominee to tender the number of
Shares indicated below (or, if no number is indicated below, all Shares) that
are held for the account of the undersigned, upon the terms and subject to the
conditions set forth in the Offer.
<TABLE>
<S> <C>
- ---------------------------------------------------------------------------------------------
NUMBER OF SHARES TO BE TENDERED* SIGN BELOW:
Shares --------------------------------------------
------------------------------------------ --------------------------------------------
Certificate Nos. (if available): Signature(s)
------------------------------------------ Please Type or Print Name(s) Below:
------------------------------------------ --------------------------------------------
Account Number: --------------------------------------------
------------------------------------------ Please Type or Print Address(es) Below:
Taxpayer Identification or Social Security --------------------------------------------
Number(s): --------------------------------------------
------------------------------------------ --------------------------------------------
------------------------------------------ --------------------------------------------
Dated: , 199 --------------------------------------------
--------------------------- ----- --------------------------------------------
Please Type or Print Area Code and Telephone
* Unless otherwise indicated, it will be Number(s):
assumed that all Shares held by us for --------------------------------------------
your account are to be tendered. --------------------------------------------
- ---------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 1
Exhibit (a)(6)
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GUIDE THE
PAYER. -- Social Security numbers have nine digits separated by two hyphens:
i.e. 000-00-0000. Employer identification numbers have nine digits separated by
only one hyphen: i.e. 00-0000000. The table below will help determine the number
to give the payer.
<TABLE>
<S> <C> <C> <C>
- ------------------------------------------------------ ------------------------------------------------------
FOR THIS TYPE OF ACCOUNT: GIVE THE SOCIAL SECURITY NUMBER OF--
- ------------------------------------------------------ ------------------------------------------------------
1. An individual's account The individual
2. Two or more individuals (joint account) The actual owner of the account or, if combined
funds, any one of the individuals(1)
3. Husband and wife (joint account) The actual owner of the account or, if joint
funds, either person(1)
4. Custodian account of a minor (Uniform Gift to The minor(2)
Minors Act)
5. Adult and minor (joint account) The adult or, if the minor is the only
contributor, the minor(1)
6. Account in the name of guardian or committee for The ward, minor or incompetent person(3)
a designated ward, minor or incompetent person
7. (a) The usual revocable savings trust account The grantor-trustee(1)
(grantor is also trustee)
(b) So-called trust account that is not a legal The actual owner(1)
or valid trust under State law
8. Sole proprietorship account The owner(4)
- ------------------------------------------------------ ------------------------------------------------------
FOR THIS TYPE OF ACCOUNT: GIVE THE EMPLOYER IDENTIFICATION NUMBER OF--
- ------------------------------------------------------ ------------------------------------------------------
9. A valid trust, estate or pension trust The legal entity (do not furnish the identifying
number of the personal representative or trustee
unless the legal entity itself is not designated
in the account title)(5)
10. Corporate account The corporation
11. Religious, charitable or educational The organization
organization account
12. Partnership The partnership
13. Association, club or other tax-exempt The organization
organization
14. A broker or registered nominee The broker or nominee
15. Account with the Department of Agriculture in The public entity
the name of a public entity (such as a State or
local government, school district or prison)
that receives agricultural program payments
</TABLE>
- ---------------
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number.
(4) Show the name of the owner. You may also enter your business name. You may
use your Social Security Number or Employer Identification Number.
(5) List first and circle the name of the legal trust, estate, or pension trust.
NOTE: If no name is circled when there is more than one name, the number will be
considered to be that of the first name listed.
<PAGE> 2
OBTAINING A NUMBER
If you don't have a taxpayer identification number or you don't know your
number, obtain Form SS-5, Application for a Social Security Number Card, or Form
SS-4, Application for Employer Identification Number, at the local office of the
Social Security Administration or the Internal Revenue Service and apply for a
number.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding on broker transactions
include the following:
- A corporation.
- A financial institution.
- An organization exempt from tax under section 501(a), or an individual
retirement plan.
- The United States or any agency or instrumentality thereof.
- A State, the District of Columbia, a possession of the United States, or
any subdivision or instrumentality thereof.
- A foreign government, a political subdivision of a foreign government, or
any agency or instrumentality thereof.
- An international organization or any agency, or instrumentality thereof.
- A registered dealer in securities or commodities registered in the U.S.
or a possession of the U.S.
- A real estate investment trust.
- A common trust fund operated by a bank under section 584(a).
- An entity registered at all times under the Investment Company Act of
1940.
- A foreign central bank of issue.
Payments of dividends not generally subject to backup withholding include the
following:
- Payments to nonresident aliens subject to withholding under section 1441.
- Payments to partnerships not engaged in a trade or business in the U.S.
and which have at least one nonresident partner.
- Payments of patronage dividends where the amount received is not paid in
money.
- Payments made by certain foreign organizations.
Exempt payees described above should file Substitute Form W-9 to avoid possible
erroneous backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR
TAXPAYER IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, SIGN AND
DATE THE FORM AND RETURN IT TO THE PAYER.
PRIVACY ACT NOTICE -- Section 6109 requires most recipients of dividend,
interest, or other payments to give taxpayer identification numbers to payers
who must report the payments to IRS. IRS uses the numbers for identification
purposes. Payers must be given the numbers whether or not recipients are
required to file tax returns. Payers must generally withhold 31% of taxable
interest, dividend, and certain other payments to a payee who does not furnish a
taxpayer identification number to a payer. Certain penalties may also apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER -- If you fail
to furnish your taxpayer identification number to a payer, you are subject
to a penalty of $50 for each such failure unless your failure is due to
reasonable cause and not to willful neglect.
(2) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING -- If you
make a false statement with no reasonable basis which results in no
imposition of backup withholding, you are subject to a penalty of $500.
(3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION -- Falsifying certifications or
affirmations may subject you to criminal penalties including fines and/or
imprisonment. FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE
INTERNAL REVENUE SERVICE.
<PAGE> 1
Exhibit (a)(7)
NEWS RELEASE TRW Inc. [TRW LOGO]
1900 Richmond Road
Cleveland, OH 44124
For Immediate Release Contact
Jay A. McCaffrey, TRW
216.291.7179
Todd A. Stottlemyer, BDM
703.848.5115
Thomas A. Myers, TRW Investor Relations
216.291.7506
TRW TO ACQUIRE BDM INTERNATIONAL, INC.
IN MERGER VALUED AT APPROXIMATELY $1 BILLION
TRW TO LAUNCH TENDER OFFER AT $29.50 PER SHARE;
COMBINATION TO ADD $1 BILLION IN INFORMATION TECHNOLOGY SALES
- -------------------------------------------------------------
CLEVELAND, OH and McLEAN, VA, Nov. 21, 1997 -- TRW Inc. (NYSE: TRW) and BDM
International, Inc. (Nasdaq: BDMI) announced today that both companies' boards
of directors have voted unanimously to approve a definitive agreement under
which TRW will acquire BDM in a transaction valued at nearly $1 billion. Under
the executed agreement, a wholly owned subsidiary, Systems Acquisition Inc.,
will commence a cash tender offer within the next five business days for all of
the outstanding shares of BDM at $29.50 per share.
In connection with the merger agreement, The Carlyle Group and certain of
its affiliates owning approximately 26 percent of BDM's stock have agreed to
tender their shares pursuant to the tender offer and have also granted an option
to TRW to purchase their BDM shares at $29.50 per share.
- more -
<PAGE> 2
TRW/2
The tender offer is conditioned on the valid tender of BDM's shares
representing a majority of the voting power of BDM, and customary regulatory
approvals and other closing conditions. TRW has arranged for financing of the
transaction. BDM has approximately 33 million shares outstanding on a fully
diluted basis. The tender offer is expected to close prior to the end of the
year.
"The acquisition of BDM is an important strategic move that provides the
platform for growth in the rapidly developing information technology markets.
Those markets include opportunities in both the government and commercial
sectors, here and overseas," said Joseph T. Gorman, chairman and chief executive
officer of TRW. "The merger expands the reach and scope of our strong space and
defense business. It complements our existing systems integration and
information technology businesses. Moreover, it will broaden our services and
products to government customers and increase our participation in rapidly
growing civil, commercial, and international markets."
Prior to potential revenue and cost synergies, the acquisition is expected
to be slightly dilutive to TRW shareholders in the first year, neutral in the
second, and accretive thereafter.
"Everyone who knows BDM and TRW and understands the enormous global
potential of information technology will recognize this merger as a win-win
combination of talents, resources, and leadership," said Frank C. Carlucci, BDM
chairman of the board and chairman of the board and managing director of The
Carlyle Group, L.P.
- more -
<PAGE> 3
TRW/3
"TRW is an outstanding company," said Philip A. Odeen, BDM president and
chief executive officer. "It has similar roots as BDM and similar values. It
does things that count -- for shareholders, customers, employees, and the
community -- and it does them extraordinarily well. Together, I am very
confident that we are going to do great things to solve our customers' most
difficult problems, boost value for shareholders, and provide new career growth
and advancement opportunities for our employees."
Gorman said, "BDM's strong presence in Europe and in the Middle East,
coupled with TRW's strong European operations, provides an established base for
further international growth."
"Once the acquisition is completed, TRW's space and defense business will
represent more than 40 percent of total annual sales and more than 37 percent of
operating income. Since 1992, BDM has achieved 24 percent compound annual
growth, accomplished through both internal growth and acquisitions. We expect
our acquisition of BDM to enhance sales and earnings growth," Gorman said.
"Consistent with our long-term strategy, this acquisition is our most
significant action to double the company's sales and market capitalization and
build shareholder value," Gorman said. "BDM is an ideal fit with TRW. We will
move forward together in new applications of our space, defense, information,
and telecommunications technologies.
- more -
<PAGE> 4
TRW/4
"Additionally, BDM's expertise in integrated supply chain management offers
important efficiencies to our own automotive organization and its customers.
BDM's Automotive Center of Excellence in Michigan serves the automotive industry
by providing global solutions to reduce costs for companies developing world
cars and components."
Following the transaction, Odeen will continue to lead BDM in his new TRW
management role, reporting to Peter S. Hellman, TRW president and chief
operating officer.
"BDM is recognized worldwide for its expertise in information technology,"
Hellman said. "The merger brings together two leading companies with similar
cultures and backgrounds dating back to the 1950s. Both advanced technology
operations were founded by distinguished scientists in the aerospace and defense
fields and are now highly respected by their customers. We look forward to the
new contributions Phil Odeen and the entire BDM team will provide TRW as we work
together to become preeminent in the information technology business."
Bear, Stearns & Co. Inc. is financial adviser to TRW and dealer manager for
the tender offer. Wasserstein Perella & Co., Inc., is financial adviser to BDM.
BDM is a multinational information technology company based in McLean, Va.,
that provides systems integration and computer services to public sector and
commercial customers. Revenue in 1996 totaled approximately $1 billion. The
company employs approximately 9,000 people in 110 worldwide locations.
Additional information is available on BDM's internet Web site
(http://www.bdm.com).
- more -
<PAGE> 5
TRW/5
TRW provides advanced technology products and services for the automotive
and space and defense markets. Systems integration activities involve the
development and application of systems engineering, systems integration,
information systems, and software development products and services for domestic
and international customers in government and commercial markets. TRW's total
revenue in 1996 was approximately $10 billion. The company's news releases are
available on the internet through TRW's Web site (http://www.trw.com).
Statements in this release that are not historical facts are
forward-looking statements, which involve risks and uncertainties that could
affect the company's actual results. Information regarding the important factors
that could cause TRW's actual results to differ materially from the
forward-looking statements contained in this release can be found in TRW's
reports filed with the Securities and Exchange Commission.
###
<PAGE> 1
Exhibit (a)(8)
This announcement is neither an offer to purchase nor a solicitation of an offer
to sell Shares. The Offer is made solely by the Offer to Purchase, dated
November 26, 1997, and related Letter of Transmittal and is being made to all
holders of Shares. The Offer is not being made to (nor will tenders be accepted
from or on behalf of) holders of Shares in any jurisdiction in which the making
of the Offer or the acceptance thereof would not be in compliance with the laws
of such jurisdiction. In any jurisdiction in which the Offer is required by law
to be made by a licensed broker or dealer, the Offer shall be deemed to be made
on behalf of Purchaser by Bear, Stearns & Co. Inc. or one or more registered
brokers or dealers licensed under the laws of such jurisdiction.
Notice of Offer to Purchase for Cash
All Outstanding Shares of Common Stock
of
BDM INTERNATIONAL, INC.
at
$29.50 Net Per Share
by
Systems Acquisition Inc.
a wholly owned subsidiary of
TRW INC.
Systems Acquisition Inc. ("Purchaser"), a wholly owned subsidiary of TRW
Inc. ("Parent"), is offering to purchase all outstanding shares of Common Stock
(the "Shares") of BDM International, Inc. (the "Company") at a price of $29.50
per Share, net to the seller in cash without interest thereon, on the terms and
subject to the conditions set forth in the Offer to Purchase (the "Offer to
Purchase") and in the related Letter of Transmittal (which, as amended or
supplemented from time to time, together constitute the "Offer"). Following the
Offer, Purchaser intends to effect the Merger described below.
- --------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON WEDNESDAY, DECEMBER 24, 1997, UNLESS THE OFFER IS EXTENDED.
- --------------------------------------------------------------------------------
The Offer is conditioned upon, among other things, (i) there being validly
tendered and not withdrawn prior to the expiration of the Offer, a number of
Shares which represents at least a majority of the total voting power of
securities of the Company entitled to vote in the election of directors or in a
merger calculated on a fully diluted basis, and (ii) the expiration or
termination of any applicable waiting period under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended. The Offer is also subject to
other terms and conditions.
The Offer is being made pursuant to an Agreement and Plan of Merger, dated
as of November 20, 1997 (the "Merger Agreement"), by and among Parent, Purchaser
and the Company. The Merger Agreement provides that, among other things, after
the purchase of Shares pursuant to the Offer and the satisfaction or waiver of
the other conditions set forth in the Merger Agreement and in accordance with
the relevant provisions of the General Corporation Law of the State of Delaware
("Delaware Code"), Purchaser will be merged with and into the Company (the
"Merger"). Following consummation of the Merger, the Company will continue as
the surviving corporation and will be a wholly owned subsidiary of Parent. At
the effective time of the Merger (the "Effective Time") each issued and
outstanding Share (subject to certain exceptions including for Shares as to
which dissenters' rights are perfected and exercised under the Delaware Code)
will be converted into the right to receive $29.50 in cash, without interest
thereon.
In connection with the Merger Agreement, Parent and Purchaser have entered
into a Stockholders Agreement dated as of November 20, 1997 with certain
affiliates of The Carlyle Group, L.P. (the "Selling Stockholders"), which
beneficially own an aggregate of 7,660,000 Shares, or 25.8% of the issued and
outstanding Shares, pursuant to which, among other things, the Selling
Stockholders have agreed to tender their Shares in the Offer.
The Board of Directors of the Company has unanimously approved the Merger
Agreement and the Transactions contemplated thereby, including the Offer, the
Merger and the Stockholders Agreement described herein, and has determined that
the Offer and the Merger are fair to, and in the best interests of, holders of
Shares ("Stockholders"), and recommends that Stockholders accept the Offer and
tender their Shares pursuant to the Offer.
For purposes of the Offer, Purchaser will be deemed to have accepted for
payment (and thereby purchased) Shares validly tendered and not properly
withdrawn if, as and when Purchaser gives oral or written notice to First
Chicago Trust Company of New York (the "Depositary") of Purchaser's acceptance
for payment of such Shares pursuant to the Offer. Upon the terms and subject to
the conditions of the Offer, payment for Shares accepted for payment pursuant to
the Offer will be made by deposit of the purchase price therefor with the
Depositary, which will act as agent for tendering Stockholders for the purpose
of receiving payments from Purchaser and transmitting such payments to tendering
Stockholders whose Shares have been accepted for payment. Under no circumstances
will interest on the purchase price for Shares be paid, regardless of any
extension of the Offer or delay in making such payment. In all cases, payment
for Shares tendered and accepted for payment pursuant to the Offer will be made
only after timely receipt by the Depositary of (i) the certificates evidencing
such Shares or timely confirmation of a book-entry transfer of such Shares into
the Depositary's account at one of the Book-Entry Transfer Facilities (as
defined in Section 2 of the Offer to Purchase) pursuant to the procedures set
forth in the Offer to Purchase, (ii) the Letter of Transmittal (or a facsimile
thereof), properly completed and duly executed, with any required signature
guarantees, or an Agent's Message (as defined in Section 2 of the Offer to
Purchase) in connection with a book-entry transfer, and (iii) any other
documents required under the Letter of Transmittal.
Purchaser expressly reserves the right, in its sole discretion (but subject
to the terms of the Merger Agreement), at any time and from time to time, to
extend the Offer for any reason, by giving oral or written notice of such
extension to the Depositary. Any such extension will be followed as promptly as
practicable by public announcement thereof, such announcement to be made no
later than 9:00 a.m, New York City time, on the next business day after the
previously scheduled expiration date of the Offer. During any such extension,
all Shares previously tendered and not withdrawn will remain subject to the
Offer, subject to the rights of a tendering Stockholder to withdraw such Shares.
The term "Expiration Date" means 12:00 Midnight, New York City time, on
Wednesday, December 24, 1997, unless and until Purchaser, in its sole discretion
(but subject to the terms of the Merger Agreement), shall have extended the
period of time during which the Offer is open, in which event the term
"Expiration Date" will mean the latest time and date at which the Offer, as so
extended by Purchaser, will expire.
Tenders of Shares made pursuant to the Offer are irrevocable except that
such Shares may be withdrawn at any time prior to the Expiration Date and,
unless theretofore accepted for payment by Purchaser pursuant to the Offer, may
also be withdrawn at any time after January 25, 1998. For a withdrawal to be
effective, a written, telegraphic, telex or facsimile transmission notice of
withdrawal must be timely received by the Depositary at its address set forth on
the back cover page of the Offer to Purchase. Any such notice of withdrawal
must specify the name of the person who tendered the Shares to be withdrawn, the
number of Shares to be withdrawn and the name of the registered holder of such
Shares, if different from that of the person who tendered such Shares. If Share
certificates evidencing Shares to be withdrawn have been delivered or otherwise
identified to the Depositary, then prior to the physical release of such Share
certificates, the serial numbers shown on such Share certificates must be
submitted to the Depositary and the signature(s) on the notice of withdrawal
must be guaranteed by an Eligible Institution (as defined in the Offer to
Purchase), unless such Shares have been tendered for the account of an Eligible
Institution. If Shares have been tendered pursuant to the procedure for
book-entry transfer as set forth in the Offer to Purchase, any notice of
withdrawal must specify the name and number of the account at the Book-Entry
Transfer Facility to be credited with the withdrawn Shares. All questions as to
the form and validity (including the time or receipt) of any notice of
withdrawal will be determined by Purchaser, in its sole discretion, whose
determination will be final and binding.
The information required to be disclosed by Rule 14d-6(e)(1)(vii) of the
General Rules and Regulations under the Securities Exchange Act of 1934, as
amended, is contained in the Offer to Purchase and is incorporated herein by
reference.
The Company has provided Purchaser with the Company's Stockholder list and
security position listings for the purpose of disseminating the Offer to
Stockholders. The Offer to Purchase and related Letter of Transmittal will be
mailed to Stockholders whose names appear of record on the Company's Stockholder
list and will be furnished to brokers, dealers, commercial banks, trust
companies and similar persons whose names, or the names of whose nominees,
appear on the Stockholder list or, if applicable, who are listed as participants
in a clearing agency's security position listing for subsequent transmittal to
beneficial owners of Shares.
The Offer to Purchase and the Letter of Transmittal contain important
information which should be read carefully before any decision is made with
respect to the Offer.
Questions and requests for assistance may be directed to Bear, Stearns &
Co. Inc., the Dealer Manager, or Georgeson & Company Inc., the Information
Agent, at their addresses and telephone numbers as set forth below. Additional
copies of the Offer to Purchase and the related Letter of Transmittal and other
tender offer materials may be obtained from the Information Agent as set forth
below. No fees or commissions will be paid to brokers, dealers or other persons
(other than the Dealer Manager and the Information Agent) for soliciting
tenders of Shares pursuant to the Offer.
The Information Agent for the Offer is:
[Georgeson & Company Inc. Logo]
Wall Street Plaza
New York, New York 10005
Banks and Brokers call collect: (212) 440-9800
All others call toll free: (800) 223-2064
The Dealer Manager for the Offer is:
Bear, Stearns & Co. Inc.
245 Park Avenue
New York, New York 10167
Call toll free: (888) 285-3977
November 26, 1997
<PAGE> 1
Exhibit (b)(1)
AMENDMENT TO
MULTI-YEAR REVOLVING CREDIT AGREEMENT
This Amendment to Multi-Year Revolving Credit Agreement, dated as of May 8,
1996 (this "Amendment"), is among TRW Inc., an Ohio corporation (the "Company")
and the financial institutions listed on the signature pages hereof together
with their successors or assigns (collectively, the "Banks" and individually, a
"Bank").
W I T N E S S E T H:
--------------------
WHEREAS, on July 1, 1992, the Company and the Banks entered into the
Three-Year Revolving Credit Agreement (as it was then titled), which agreement
was amended on June 30, 1993, on March 1, 1994 and on February 28, 1995 (the
agreement as amended is known hereinafter as the "Agreement"); and
WHEREAS, the Company and the Banks have agreed to make such changes to the
Agreement as are reflected in this Amendment;
NOW, THEREFORE, in consideration of the mutual agreements contained herein,
the parties hereto agree as follows:
SECTION 1 THE AMENDMENTS
1.1 AMENDMENT OF "COMMITMENT". Section 1.1 of the Agreement shall be
amended to read in its entirety as set forth below:
1.1 COMMITMENT. Subject to the terms and conditions of this Agreement,
each of the Banks, severally and for itself alone, agrees to make loans
(collectively, the "Loans" and individually, a "Loan") to the Company and,
as provided in Section 1.8, to any Designated Subsidiary on a revolving
basis from time to time before the Termination Date, as it may be extended
from time to time pursuant to Section 1.2, in such aggregate amounts as the
Company or any Designated Subsidiary may from time to time request from
such Bank; provided, however, that the aggregate principal amount of Loans
that any Bank shall be committed to have outstanding to the Company and the
Designated Subsidiaries shall not at any one time exceed the amount set
forth opposite such Bank's signature hereto, or any subsequent amendment
hereto (except to the extent provided in Section 1.9 hereof). The foregoing
commitment of each Bank to make Loans as reduced from time to time in
accordance with the terms hereof is herein called such Bank's "Commitment"
and the commitments of all Banks are herein sometimes collectively called
the "Commitments."
-1-
<PAGE> 2
1.2 DELETION OF "TERMINATION OF COMMITMENT". Section 1.9 of the Agreement
shall be deleted in its entirety.
1.3 RENUMBERING OF "LOANS OUTSTANDING UNDER PRIOR FACILITY". Section 1.10
of the Agreement shall be renumbered to now be Section 1.9.
1.4 AMENDMENT OF "COMMITMENT FEE". Section 4.1 of the Agreement shall be
amended to delete references to Section 1.9 of the Agreement and, as amended,
shall read in its entirety as set forth below:
4.1 COMMITMENT FEE. The Company agrees to pay to each Bank a commitment
fee, for the period from and including the date of this Agreement to the
Termination Date on the daily average of the Unused Amount of such Bank's
Commitment hereunder equal to the Applicable Commitment Fee in effect from
time to time multiplied by the Unused Amount. Such commitment fee shall be
payable quarterly in arrears on the tenth day of each April, July, October,
and January (the first such payment to be made on October 10, 1992) for the
quarterly period ended on the last day of the preceding month and on the
Termination Date. The Company may make such payments according to the
Electronic Payment Instructions.
1.5 DELETION OF "UTILIZATION FEE". Section 4.2 of the Agreement shall be
deleted in its entirety.
1.6 RENUMBERING OF "COMPUTATION OF FEES". Section 4.3 of the Agreement
shall be renumbered to now be Section 4.2.
1.7 AMENDMENT OF "MANDATORY PREPAYMENT". Section 5.3 of the Agreement shall
be amended to read in its entirety as set forth below:
5.3 MANDATORY PREPAYMENT. On each day on which the aggregate
outstanding principal amount of Loans owing to any Bank on such day exceeds
(whether as a result of currency fluctuations or otherwise) such Bank's
Commitment hereunder, the Company shall pay to such Bank on demand a
mandatory prepayment in the amount of such excess. Mandatory prepayments
required by this Section 5.3 shall be applied first to Base Rate Loans
until paid in full and then, at the Company's election and in the order
specified by the Company, to Fixed Rate Loans.
1.8 AMENDMENT OF "NET WORTH". Section 9.2 of the Agreement shall be amended
to read in its entirety as set forth below:
-2-
<PAGE> 3
9.2 NET WORTH. The Company will not permit Consolidated Net Worth to be
less than 1,600,000,000 U.S. Dollars less an amount equal to the lesser of
(i) the aggregate amount expended by the Company subsequent to December 31,
1995 for the repurchase of its common stock and (ii) 600,000,000 U.S.
Dollars.
1.9 AMENDMENT OF "APPLICABLE COMMITMENT FEE" DEFINITION. The definition to
"Applicable Commitment Fee" set forth in Section 13 shall be amended to read in
its entirety as follows:
"APPLICABLE COMMITMENT FEE" means the percentage in effect from time to
time as set forth in the following table opposite the highest of the
then-current rating assigned to the Company's senior unsecured long-term
debt by Moody's Investors Service, Inc. ("Moody's") or Standard & Poor's
Ratings Group ("S&P"):
<TABLE>
<CAPTION>
Rating Applicable
(Moody's/S&P) Commitment Fee
------------- --------------
<S> <C>
higher than A1/A+ 0.060%
A1/A+ 0.070%
A2/A 0.080%
A3/A- 0.090%
Baa1/BBB+ 0.100%
Baa2/BBB 0.125%
Baa3/BBB- 0.150%
lower than Baa3/BBB- 0.175%
</TABLE>
1.10 AMENDMENT OF "APPLICABLE MARGIN" DEFINITION. The definition to
"Applicable Margin" set forth in Section 13 shall be amended to read in its
entirety as follows:
"APPLICABLE MARGIN" means, at any time, the percentage set forth in the
following table opposite the highest of the then-current rating assigned to
the Company's senior unsecured long-term debt by Moody's or S&P:
<TABLE>
<CAPTION>
Applicable Applicable
Margin for Margin for
Rating Domestic CD Eurocurrency
(Moody's/S&P) Loans Loans
- --------------------------------------------------------------------------------
<S> <C> <C>
higher than A1/A+ 0.275% 0.175%
A1/A+ 0.300% 0.200%
A2/A 0.325% 0.225%
A3/A- 0.350% 0.250%
Baa1/BBB+ 0.400% 0.300%
Baa2/BBB 0.475% 0.375%
</TABLE>
-3-
<PAGE> 4
<TABLE>
<CAPTION>
<S> <C> <C>
Baa3/BBB- 0.550% 0.450%
lower than Baa3/BBB- 0.600% 0.500%
</TABLE>
1.11 REPLACEMENT OF "CONSOLIDATED TANGIBLE NET WORTH" DEFINITION. The
definition of "Consolidated Tangible Net Worth" set forth in Section 13 shall be
deleted and replaced by the defined term "Consolidated Net Worth" which shall
read in its entirety as follows:
"CONSOLIDATED NET WORTH" means at any date the sum of the consolidated
shareholders' investment and minority interests of the Company and its
Consolidated Subsidiaries determined as of such date. Consolidated
shareholders' investment and minority interests shall be as included in the
annual and quarterly financial statements of the Company, as applicable.
1.12 AMENDMENT OF "ELECTRONIC PAYMENT INSTRUCTIONS" DEFINITION. The
definition of "Electronic Payment Instructions" set forth in Section 13 shall be
amended to read in its entirety as follows:
"ELECTRONIC PAYMENT INSTRUCTIONS" means the Bank Routing and account
number information identifying the account of each Bank to receive the ACH
payment of Commitment Fees. Such Electronic Payment Instructions for each
Bank are set forth below the signature block of such Bank to the Amendment
dated as of May 8, 1996 to the Agreement and may be changed at any time by
written notice by such Bank to the Company.
1.13 AMENDMENT OF "INTEREST PERIOD" DEFINITION. The definition of "Interest
Period" set forth in Section 13 shall be amended to read in its entirety as
follows:
"INTEREST PERIOD" means, with respect to any Fixed Rate Loan, the
period commencing on the date such Loan was made, or on the date such Loan
was Converted from a Loan of a different type, or on the date of expiration
of the immediately preceding Interest Period for such Loan, and (i) ending
30, 60, 90, 120, 150, 180 days, or, if available, more than 180 days up to
and including 360 days, thereafter in the case of a Domestic CD Loan, or
(ii) ending one, two, three, or six months, or, if available, more than six
months up to and including twelve months, thereafter in the case of a
Eurocurrency Loan, all as the Company or any Designated Subsidiary may
specify pursuant to Section 1.4, 1.5, or 3.3; the Interest Period for any
Negotiated Loan or any Local Currency Loan shall be as agreed by the
Company or any Designated Subsidiary and the Relevant Bank pursuant to
Section 1.6 or 1.7 . Each Interest Period for a Fixed Rate Loan that would
otherwise end on a day that is not a Business Day shall end on the next
succeeding Business Day (unless such next succeeding Business Day is the
first Business Day of a calendar month, in which case with respect to a
Eurocurrency Loan such Interest Period shall end on the next preceding
Business Day).
-4-
<PAGE> 5
1.14 DELETION OF "NET WORTH" DEFINITION. The definition of "Net Worth" set
forth in Section 13 shall be deleted in its entirety.
1.15 AMENDMENT OF "PERCENTAGE" DEFINITION. The definition of "Percentage"
set forth in Section 13 shall be amended to read in its entirety as follows:
"PERCENTAGE" means as to any Bank the percentage of such Bank's share
of the total Commitments of all Banks.
1.16 AMENDMENT OF "TERMINATION DATE" DEFINITION. The definition of
"Termination Date" set forth in Section 13 shall be amended to read in its
entirety as follows:
"TERMINATION DATE" means the earlier to occur of (a) July 1, 2001,
subject to extension for one or more successive one-year periods as to any
Bank or Banks pursuant to Section 1.2, or (b) such other date on which the
Commitments shall terminate pursuant to Section 11.2.
1.17 AMENDMENT OF "COMPUTATIONS". Section 14.4 of the Agreement shall be
amended to delete references to certain calculations and, as amended, shall read
in its entirety as set forth below:
14.4 COMPUTATIONS. Where the character or amount of any asset or
liability or item of income or expense is required to be determined, or any
consolidation or other accounting computation is required to be made, for
the purpose of this Agreement, such determination or calculation shall, to
the extent applicable and except as otherwise specified in this Agreement,
be made in accordance with the Company's then current method of accounting,
which method must be in accordance with GAAP; provided, however, if any
changes in accounting principles from those used in the preparation of the
financial statements referred to in Section 8.4 hereafter occasioned by the
promulgation of rules, regulations, pronouncements, and opinions by or
required by the Financial Accounting Standards Board or the American
Institute of Certified Public Accountants (or successors thereto or
agencies with similar functions) result in a change in the method of
calculation of the financial covenants, standards, or terms found in
Section 9.2 hereof, the parties hereto agree to enter into negotiations to
amend such provisions so as equitably to reflect such changes with the
desired result that the criteria for evaluating the Company's financial
condition shall be the same after such changes as if such changes had not
been made.
-5-
<PAGE> 6
SECTION 2 GENERAL.
2.1 RESTATEMENT OF AGREEMENT. The Three-Year Revolving Credit Agreement
dated as of July 1, 1992 has been restated to incorporate all changes contained
in this and all prior Amendments and is attached as Exhibit I.
2.2 REISSUANCE OF NOTES. In connection with the effectiveness of this
Amendment, the Company shall issue to each of the Banks a Note in the principal
amounts set forth next to such Bank's name in the signature blocks below.
Contemporaneously with the issuance of such Notes, the Notes dated February 28,
1995 currently pertaining to the Agreement shall be deemed null and void and
each Bank shall cancel and return to the Company such Note pertaining to the
Agreement currently in such Bank's possession.
2.3 EFFECTIVENESS OF FEE CHANGES. All fee and interest rate changes set
forth in this Amendment shall be effective only on a prospective basis from the
date hereof.
2.4 OTHER TERMS AND CONDITIONS. Unless amended hereby, all other terms and
conditions of the Agreement shall remain in full force and effect without change
and are hereby ratified and confirmed in all respects.
2.5 GOVERNING LAW. This Amendment and each Note issued pursuant hereto
shall be a contract made under and governed by the internal laws of the State of
Ohio. Wherever possible each provision of this Amendment shall be interpreted in
such manner as to be effective and valid under applicable law, but if any
provision of this Amendment shall be prohibited by or invalid under such law,
such provision shall be ineffective to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Amendment. All obligations of the Company and
rights of the Banks and any other holders of the Notes expressed herein or in
the Notes shall be in addition to and not in limitation of those provided by
applicable law.
2.6 COUNTERPARTS. This Amendment may be executed in any number of
counterparts and by the different parties on separate counterparts and each such
counterpart shall be deemed to be an original, but all such counterparts shall
together constitute but one and the same Amendment. When counterparts executed
by all the parties shall have been lodged with the Company (or, in the case of
any Bank as to which an executed counterpart shall not have been so lodged, the
Company shall have received telegraphic, telex, or other written confirmation
from such Bank of execution of a counterpart hereof by such Bank), this
Amendment shall become effective as of the date hereof.
-6-
<PAGE> 7
2.7 CAPTIONS. Section captions used in this Amendment are for convenience
only, and shall not affect the construction of this Amendment.
Delivered at Cleveland, Ohio, as of the day and year first above written.
TRW INC.
By /s/ W.C. Seeger, Jr.
----------------------------
William C. Seeger, Jr.
Vice President and Treasurer
1900 Richmond Road
Cleveland, Ohio 44124
Telephone 216/291-7540
Facsimile: 216/291-7831
-7-
<PAGE> 8
BANKS:
Amount of Percentage of
Commitment Commitments
- ---------- -----------
$60,000,000 8 % Bank of America National Trust
----- and Savings Association
By: /s/ Deborah Graziano
-----------------------
Name: Deborah Graziano
Title: Vice President
DOMESTIC OFFICE
Bank of America NT & SA
1850 Gateway Boulevard
Concord, California 94520
Telephone: (510) 675-7485
---------------
Facsimile: (510) 675-7531
---------------
Attention: Selina Button
EUROCURRENCY OFFICE
Bank of America NT & SA
1850 Gateway Boulevard
Concord, California 94520
Telephone: (510) 675-7485
---------------
Facsimile: (510) 675-7531
---------------
Attention: Selina Button
ELECTRONIC PAYMENT
INSTRUCTIONS
Receiving Bank: Bank of America
---------------
ABA Routing No.: 121000358
---------------
Account No.: 12331-83980
---------------
Account Name: Incoming Money Transfer
-----------------------
Reference No.: TRW Commitment Fee
------------------
-8-
<PAGE> 9
Amount of Percentage of
Commitment Commitments
- ---------- -----------
$60,000,000 8 % Barclays Bank PLC
-----
By: /s/ L. Peter Yetman
-----------------------
Name: L. Peter Yetman
Title: Associate Director
DOMESTIC OFFICE
Barclays Bank PLC
222 Broadway
New York, New York 10038
Telephone: (212) 412-1196
-----------------
Facsimile: (212) 412-1099
-----------------
EUROCURRENCY OFFICE
Barclays Nassau, Bahamas Branch
c/o Barclays Bank PLC
222 Broadway
New York, New York 10038
Telephone: (212) 412-1196
-----------------
Facsimile: (212) 412-1099
-----------------
ELECTRONIC PAYMENT
INSTRUCTIONS
Receiving Bank: Barclays Bank PLC - New York
----------------------------
ABA Routing No.: 026-002--574
---------------
Account No.: 050-019-104
----------------------
Account Name: TRW
----------------------
Reference No.: TRW Commitment Fee; N. Sangle
------------------------------
-9-
<PAGE> 10
Amount of Percentage of
Commitment Commitments
- ---------- -----------
$60,000,000 8 % The Chase Manhattan Bank, N.A.
-----
By: /s/ Joan F. Garvin
-----------------------
Name: Joan F. Garvin
Title: Vice President
DOMESTIC OFFICE
The Chase Manhattan Bank, N.A.
One Chase Manhattan Plaza
Fifth Floor
New York, New York 10081
Telephone: (212) 552-2722
--------------
Facsimile: (212) 552-1372
--------------
EUROCURRENCY OFFICE
The Chase Manhattan Bank, N.A.
One Chase Manhattan Plaza
Fifth Floor
New York, New York 10081
Telephone:
-------------
Facsimile:
-------------
ELECTRONIC PAYMENT
INSTRUCTIONS
Receiving Bank: Chase Manhattan Bank
----------------------
ABA Routing No.: 021-000021
----------------------
Account No.: 900-9-000036
----------------------
Account Name: Commercial Loan Opns.
----------------------
Reference No.: TRW Commitment Fee
----------------------
-10-
<PAGE> 11
Amount of Percentage of
Commitment Commitments
- ---------- -----------
$60,000,000 8 % Citibank, N.A.
-----
By: /s/ Marjorie Futornick
-----------------------
Name: Marjorie Futornick
Title: Vice President
DOMESTIC OFFICE
Citibank, N.A.
c/o Citicorp N.A., Inc.
200 S. Wacker Dr.
Chicago, IL 60606
Telephone: 312-993-3871
Facsimile: 312-993-6840
EUROCURRENCY OFFICE
Citibank, N.A.
c/o Citicorp N.A., Inc.
200 S. Wacker Dr.
Chicago, IL 60606
Telephone: 312-993-3871
Facsimile: 312-993-6840
ELECTRONIC PAYMENT
INSTRUCTIONS
Receiving Bank: Citibank, N.A., New York
ABA Routing No.: 021000089
Account No.: 38483095
Account Name: Chicago NEO Loan Acct.
-------------------------
Reference No.: TRW Commitment Fee
-11-
<PAGE> 12
Amount of Percentage of
Commitment Commitments
- ---------- -----------
$60,000,000 8 % Morgan Guaranty Trust Company
--- of New York
By: /s/ J.M. Mikolay
--------------------------
Name: John M. Mikolay
Title: Vice President
DOMESTIC OFFICE
Morgan Guaranty Trust Company
of New York
60 Wall Street
New York, New York 10260-0060
Telephone: (302) 634-1800
--------------
Facsimile: (302) 634-1094
--------------
EUROCURRENCY OFFICE
Morgan Guaranty Trust Company
of New York
Nassau, Bahamas Office
c/o J.P. Morgan Services Inc.
Euro-Loan Servicing Unit
902 Market Street
Wilmington, Delaware 19801
Telephone: (302) 634-1800
--------------
Facsimile: (302) 634-1094
--------------
ELECTRONIC PAYMENT
INSTRUCTIONS
Receiving Bank: Morgan Guaranty Trust
---------------------
ABA Routing No.: 021000238
---------------------
Account No.: 999-99-090
---------------------
Account Name: Loan Department
---------------------
Reference No.: TRW Com. Fee
---------------------
Corp. Proc. Module 30
-12-
<PAGE> 13
Amount of Percentage of
Commitment Commitments
- ---------- -----------
$60,000,000 8 % National City Bank
-----
By: /s/ Davis R. Bonner
-------------------------
Name: Davis R. Bonner
Title: Vice President
DOMESTIC OFFICE
National City Bank
National City Center
P.O. Box 5756
Cleveland, Ohio 44101-0756
Telephone: (216) 575-3285
--------------
Facsimile: (216) 575-9396
--------------
EUROCURRENCY OFFICE
National City Bank
National City Center
P.O. Box 5756
Cleveland, Ohio 44101-0756
Telephone: (216) 575-3285
--------------
Facsimile: (216) 575-9396
--------------
ELECTRONIC PAYMENT
INSTRUCTIONS
Receiving Bank: National City Bank
------------------
ABA Routing No.: 041000124
------------------
Account No.: 2537557
------------------
Account Name:
------------------
Reference No.: TRW Commitment Fee
------------------
-13-
<PAGE> 14
Amount of Percentage of
Commitment Commitments
$60,000,000 8 % The Sumitomo Bank, Limited
-----
By: /s/ H. Iwami
----------------------------
Name: Hiroyuki Iwami
Title: Joint General Manager
DOMESTIC OFFICE
The Sumitomo Bank, Limited
Chicago Branch
Sears Tower
233 South Wacker Drive, Suite 4800
Chicago, Illinois 60606-6448
Telephone: (312) 876-6431
--------------
Facsimile: (312) 876-6436
--------------
EUROCURRENCY OFFICE
The Sumitomo Bank, Limited
Chicago Branch
Sears Tower
233 South Wacker Drive, Suite 4800
Chicago, Illinois 60606-6448
Telephone: (312) 876-6431
--------------
Facsimile: (312) 876-6436
--------------
ELECTRONIC PAYMENT
INSTRUCTIONS
Receiving Bank: FNB of Chicago
------------------
ABA Routing No.: 071000013
------------------
Account No.: 15-01208
------------------
Account Name: Sumitomo Bank Ltd.,
Chicago Branch
------------------
Reference No.: TRW Commitment Fee
------------------
-14-
<PAGE> 15
Amount of Percentage of
Commitment Commitments
- ---------- -----------
$45,000,000 6 % Banque Nationale De Paris
-----
By: /s/
-------------------------
Name:
Title:
DOMESTIC OFFICE
Banque Nationale De Paris
Chicago Branch
Rookery Building
209 South LaSalle, 5th Floor
Chicago, Illinois 60604
Telephone: (312) 977-2200
-------------------
Facsimile: (312) 977-1380
-------------------
EUROCURRENCY OFFICE
Banque Nationale De Paris
Chicago Branch
Rookery Building
209 South LaSalle, 5th Floor
Chicago, Illinois 60604
Telephone: (312) 977-2200
-------------------
Facsimile: (312) 977-1380
-------------------
ELECTRONIC PAYMENT
INSTRUCTIONS
Receiving Bank: Banque Nationale de
Paris, New York
Branch
-------------------
ABA Routing No.: 026007689
-------------------
Account No.: 14119400189
-------------------
Account Name: BNP, Chicago Branch
-------------------
Reference No.: TRW Commitment Fee
-------------------
-15-
<PAGE> 16
Amount of Percentage of
Commitment Commitments
- ---------- -----------
$45,000,000 6 % Dresdner Bank AG
-----
By: /s/ D. Slusarczyk
-----------------------------
Name: Deborah Slusarczyk
Title: Vice President
By: /s/ Robert Grella
-----------------------------
Name: Robert Grella
Title: Vice President
DOMESTIC OFFICE
Dresdner Bank AG New York Branch
75 Wall Street
New York, New York 10005
Telephone: (212) 429-2244
-----------------------
Facsimile: (212) 429-2524
-----------------------
EUROCURRENCY OFFICE
Dresdner Bank AG Grand Cayman
Branch
c/o Dresdner Bank AG New York Branch
75 Wall Street
New York, New York 10005
Telephone: (212) 429-2244
-----------------------
Facsimile: (212) 429-2524
-----------------------
ELECTRONIC PAYMENT
INSTRUCTIONS
Receiving Bank: Chase Manhattan (NY,NY)
-----------------------
ABA Routing No.: 021-000-021
-----------------------
Account No.: 920-1-059-079
-----------------------
Account Name: Dresdner Bank AG,
New York Branch
-----------------------
Reference No.: TRW Commitment Fee
-----------------------
-16-
<PAGE> 17
Amount of Percentage of
Commitment Commitments
- ---------- -----------
$45,000,000 6 % NBD Bank
------
By: /s/ Andrew W. Strait
---------------------------
Name: Andrew W. Strait
Title: Vice President
DOMESTIC OFFICE
NBD Bank
Attention: Mid-Corporate Banking
611 Woodward
Detroit, Michigan 48226
Telephone: (313) 225-3300
--------------------
Facsimile: (313) 225-3269
--------------------
EUROCURRENCY OFFICE
NBD Bank, N.A.
Attention: Mid-Corporate Banking
611 Woodward
Detroit, Michigan 48226
Telephone: (313) 225-3300
--------------------
Facsimile: (313) 225-3269
--------------------
ELECTRONIC PAYMENT
INSTRUCTIONS
Receiving Bank: NBD Bank
--------------------
ABA Routing No.: 072000326
--------------------
Account No.: 1424183
--------------------
Account Name: Commercial Loans
--------------------
Reference No.: TRW Commitment Fee
--------------------
-17-
<PAGE> 18
Amount of Percentage of
Commitment Commitments
- ---------- -----------
$45,000,000 6 % Royal Bank of Canada
-----
By: /s/ P. Shields
----------------------------
Name: Patrick Shields
Title: Manager, Corporate Banking
DOMESTIC OFFICE
Royal Bank of Canada
New York Branch
c/o Financial Square, 23rd Floor
New York, New York 10005
Telephone: (212) 428-6323
---------------------
Facsimile: (212) 428-2372
---------------------
EUROCURRENCY OFFICE
Royal Band of Canada
New York Branch
c/o Financial Square, 23rd Floor
New York, New York 10005
Telephone: (212) 428-6323
---------------------
Facsimile: (212) 428-2372
---------------------
ELECTRONIC PAYMENT
INSTRUCTIONS
Receiving Bank: Chase Manhattan, NY
--------------------
ABA Routing No.: 021000021
--------------------
Account No.: 9201033363
--------------------
Account Name: Royal Bank
--------------------
Reference No.: TRW Commitment Fee
--------------------
-18-
<PAGE> 19
Amount of Percentage of
Commitment Commitments
- ---------- -----------
$30,000,000 4 % The Sakura Bank, Limited
-----
By: /s/ Hajime Miyagi
-------------------------
Name: Hajime Miyagi
Title: Joint General Manager
DOMESTIC OFFICE
The Sakura Bank, Limited
Chicago Branch
227 West Monroe Street
Suite 4700
Chicago, Illinois 60606
Telephone: (312) 580-3276
---------------------
Facsimile: (312) 332-5345
---------------------
EUROCURRENCY OFFICE
The Sakura Bank, Limited
Chicago Branch
227 West Monroe Street
Suite 4700
Chicago, Illinois 60606
Telephone: (312) 580-3276
---------------------
Facsimile: (312) 332-5345
---------------------
ELECTRONIC PAYMENT
INSTRUCTIONS
Receiving Bank: FNB of Chicago
---------------------
ABA Routing No.: 071000013
---------------------
Account No.: 1512951
---------------------
Account Name: Sakura Bank Chicago
---------------------
Reference No.: TRW Commitment Fee
---------------------
-19-
<PAGE> 20
Amount of Percentage of
Commitment Commitments
- ---------- -----------
$30,000,000 4 % Society National Bank
-----
By: /s/ Marianne Meil
--------------------------
Name: Marianne Meil
Title: Assistant Vice President
DOMESTIC OFFICE
Society National Bank
127 Public Square
Cleveland, Ohio 44114
Telephone: (216) 689-4450
---------------------
Facsimile: (216) 689-4981
---------------------
EUROCURRENCY OFFICE
Society National Bank
127 Public Square
Cleveland, Ohio 44114
Telephone: (216) 689-4450
---------------------
Facsimile: (216) 689-4981
---------------------
ELECTRONIC PAYMENT
INSTRUCTIONS
Receiving Bank: Society National Bank
---------------------
ABA Routing No.: 041001039
---------------------
Account No.: 00100-39140
---------------------
Account Name: Commercial Loan Opns
---------------------
Reference No.: TRW Commitment Fee
---------------------
-20-
<PAGE> 21
Amount of Percentage of
Commitment Commitments
- ---------- -----------
$30,000,000 4 % The Tokai Bank, Limited
-----
By: /s/ Tatsuo Ito
-----------------------------
Name: Tatsuo Ito
Title: Joint General Manager
DOMESTIC OFFICE
The Tokai Bank, Limited
Chicago Branch
Attention: Corporate Finance
181 West Madison Street, Suite 3600
Chicago, Illinois 60602
Telephone: (312) 456-3427
----------------------
Facsimile: (312) 977-0003
----------------------
EUROCURRENCY OFFICE
The Tokai Bank, Limited
Chicago Branch
Attention: Corporate Finance
181 West Madison Street, Suite 3600
Chicago, Illinois 60602
Telephone:
----------------------
Facsimile:
----------------------
ELECTRONIC PAYMENT
INSTRUCTIONS
Receiving Bank: FNB of Chicago
----------------------
ABA Routing No.: 071000013
----------------------
Account No.: 15-08997
----------------------
Account Name: Tokai Bank, Chicago
Branch
----------------------
Reference No.: TRW Commitment Fee
----------------------
Loan Administration
-21-
<PAGE> 22
Amount of Percentage of
Commitment Commitments
- ---------- -----------
$30,000,000 4 % Union Bank of Switzerland
-----
By: /s/ S. M. Dadmun /s/ E. P. Weinheimer
--------------------------------------
Name: Steven M. Dadmun/
Eric P. Weinheimer
Title: Vice President/
Lending Officer
DOMESTIC OFFICE
Union Bank of Switzerland
Chicago Branch
30 South Wacker Drive, Suite 40
Chicago, Illinois 60606
Telephone: (312) 993-5471
-----------------------
Facsimile: (312) 993-5530
-----------------------
EUROCURRENCY OFFICE
Union Bank of Switzerland
Chicago Branch
30 South Wacker Drive, Suite 40
Chicago, Illinois 60606
Telephone: (312) 993-5471
-----------------------
Facsimile: (312) 993-5530
-----------------------
ELECTRONIC PAYMENT
INSTRUCTIONS
Receiving Bank: FNB of Chicago
-----------------------
ABA Routing No.: 071000013
-----------------------
Account No.: 15-12188
-----------------------
Account Name: UBS, Chicago Branch
-----------------------
Reference No.: TRW Commitment Fee
-----------------------
-22-
<PAGE> 23
Amount of Percentage of
Commitment Commitments
- ---------- -----------
$30,000,000 4 % Wells Fargo Bank, N.A.
-----
By: /s/ Peter G. Olson
-------------------------
Name: Peter G. Olson
Title: SVP
By: /s/ Lancy Gin
-------------------------
Name: Lancy Gin
Title: AVP
DOMESTIC OFFICE
Wells Fargo Bank, N.A.
Special Loan Processing
18700 NW Walker Road, Bldg. 92
Beaverton, OR 97006
Telephone: (503) 614-6436
Facsimile: (503) 614-5878
EUROCURRENCY OFFICE
Wells Fargo Bank, N.A.
Special Loan Processing
18700 NW Walker Road, Bldg. 92
Beaverton, OR 97006
Telephone: (503) 614-6436
Facsimile: (503) 614-5878
ELECTRONIC PAYMENT INSTRUCTIONS
Receiving Bank: First Interstate Bank of California
ABA Routing No.: 122000218
Account No.: 3030-98989
Account Name: Special Loan Processing
Reference No.: TRW
- ------------ ----
$750,000,000 100% Total
-23-
<PAGE> 24
Exhibit I
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
MULTI-YEAR REVOLVING CREDIT AGREEMENT
AS AMENDED AND RESTATED
as of May 8, 1996
among
TRW INC.
and
THE FINANCIAL INSTITUTIONS
LISTED ON THE SIGNATURE
PAGES HEREOF
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 25
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
PREAMBLE......................................................................................... 1
SECTION 1 COMMITMENT OF THE BANKS; TYPES
OF LOANS; PROCEDURES FOR BORROWING
OR CONVERTING................................................................ 1
1.1 Commitment................................................................... 1
1.2 Extension of Commitment...................................................... 1
1.3 Various Types of Loans....................................................... 2
1.4 Notice of Borrowing, Continuation, or
Conversion.............................................................. 2
1.5 Conversion and Continuation Procedures....................................... 3
1.6 Negotiated Loans............................................................. 3
1.7 Local Currency Loans......................................................... 3
1.8 Loans to Designated Subsidiaries............................................. 4
1.9 Loans Outstanding Under Prior Facility....................................... 4
SECTION 2 REPAYMENT OF LOANS; NOTES EVIDENCING LOANS................................... 4
2.1 Repayment of Loans........................................................... 4
2.2 Notes........................................................................ 4
2.3 Other Provisions of the Notes................................................ 4
2.4 Recordkeeping................................................................ 5
SECTION 3 INTEREST..................................................................... 5
3.1 Interest Rates............................................................... 5
3.2 Interest Payment Dates....................................................... 5
3.3 Interest Periods for Fixed Rate Loans........................................ 6
3.4 Setting and Notice of Rates.................................................. 6
3.5 Computation of Interest...................................................... 6
SECTION 4 FEES ........................................................................ 6
4.1 Commitment Fee............................................................... 6
4.2 Computation of Fees.......................................................... 7
SECTION 5 REDUCTION OR TERMINATION OF THE
COMMITMENTS; PREPAYMENT................................................. 7
5.1 Reduction or Termination of the Commitments.................................. 7
</TABLE>
(i)
<PAGE> 26
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
5.2 Optional Prepayment.......................................................... 7
5.3 Mandatory Prepayment......................................................... 7
SECTION 6 MAKING AND APPLICATION OF PAYMENTS........................................... 7
6.1 Making of Payments........................................................... 7
6.2 Application of Certain Payments.............................................. 7
6.3 Due Date Extension........................................................... 8
SECTION 7 INCREASED COSTS AND TAXES.................................................... 8
7.1 Increased Capital............................................................ 8
7.2 Increased Costs.............................................................. 9
7.3 Basis for Determining Interest Rate Inadequate............................... 9
7.4 Changes in Law Rendering Certain Loans Unlawful.............................. 10
7.5 Funding Losses............................................................... 10
7.6 Currency Indemnity........................................................... 10
7.7 Increased Tax Costs.......................................................... 11
SECTION 8 WARRANTIES................................................................... 12
8.1 Corporate Organization....................................................... 12
8.2 Authorization; No Conflict................................................... 12
8.3 Validity and Binding Nature.................................................. 12
8.4 Financial Statements......................................................... 12
8.5 Litigation................................................................... 12
8.6 Compliance with ERISA........................................................ 13
8.7 Environmental Matters........................................................ 13
8.8 Taxes........................................................................ 13
8.9 Government Regulation........................................................ 13
SECTION 9 COVENANTS.................................................................... 14
9.1 Reports, Certificates and Other Information.................................. 14
9.1.1 Audit Report.......................................................... 14
9.1.2 Quarterly Reports..................................................... 14
9.1.3 Compliance Certificates............................................... 14
9.1.4 Current Reports....................................................... 14
9.1.5 Other Information..................................................... 14
9.2 Net Worth .................................................................. 14
9.3 Liens........................................................................ 15
9.4 Sale and Leaseback........................................................... 16
9.5 Mergers, Consolidations, Sales............................................... 17
SECTION 10 CONDITIONS OF LENDING........................................................ 17
10.1 Initial Loan to the Company.................................................. 17
10.1.1 Note.............................................................. 17
</TABLE>
(ii)
<PAGE> 27
<TABLE>
<CAPTION>
Page
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<S> <C> <C>
10.1.2 Resolutions....................................................... 17
10.1.3 Incumbency and Signatures......................................... 18
10.1.4 Opinion of Counsel................................................ 18
10.2 Loans to Designated Subsidiaries............................................. 18
10.2.1 Resolutions....................................................... 18
10.2.2 Acceptance of this Agreement...................................... 18
10.2.3 Incumbency and Signatures......................................... 18
10.3 All Loans .................................................................. 18
10.4 Conversions.................................................................. 19
SECTION 11 EVENTS OF DEFAULT AND THEIR EFFECT........................................... 19
11.1 Events of Default............................................................ 19
11.1.1 Nonpayment of Notes or Fees....................................... 19
11.1.2 Nonpayment of Other Indebtedness for
Borrowed Money.................................................. 19
11.1.3 Bankruptcy or Insolvency.......................................... 19
11.1.4 Noncompliance with Other Provisions............................... 19
11.1.5 Warranties........................................................ 20
11.1.6 Judgments......................................................... 20
11.2 Effect of Event of Default................................................... 20
SECTION 12 GUARANTY .................................................................. 21
SECTION 13 CERTAIN DEFINITIONS.......................................................... 21
SECTION 14 GENERAL .................................................................. 30
14.1 Waiver; Amendments........................................................... 30
14.2 Confirmations................................................................ 31
14.3 Notices .................................................................. 31
14.4 Computations................................................................. 32
14.5 Confidentiality.............................................................. 32
14.6 Assignments and Participations............................................... 33
14.6.1 Assignments....................................................... 33
14.6.2 Participations.................................................... 33
14.6.3 Disclosure of Information......................................... 33
14.7 Securities Laws.............................................................. 34
14.8 Costs and Expenses........................................................... 34
14.9 Governing Law................................................................ 34
14.10 Counterparts................................................................. 34
14.11 Captions .................................................................. 34
14.12 Successors and Assigns....................................................... 34
14.13 Entire Agreement............................................................. 35
14.14 Appointment of Administrator................................................. 35
14.15 Non-U.S. Bank Tax Information................................................ 35
14.16 Regulation U................................................................. 35
</TABLE>
(iii)
<PAGE> 28
EXHIBITS
EXHIBIT A Form of Note
EXHIBIT B Form of Compliance Certificate
EXHIBIT C Form of Opinion of Counsel to the Company
SCHEDULES
SCHEDULE 1.10 Prior Facilities Pursuant to Section 1.10
SCHEDULE 8.5 Undisclosed Material Legal Proceedings
(iv)
<PAGE> 29
MULTI-YEAR REVOLVING CREDIT AGREEMENT
This Multi-Year Revolving Credit Agreement, dated as of July 1, 1992, as
amended pursuant to Agreements dated as of June 30, 1993, March 1, 1994 and
February 28, 1995 and as amended and restated pursuant to an Agreement dated as
of May 8, 1996 (this "Agreement"), is among TRW Inc., an Ohio corporation (the
"Company") and the financial institutions listed on the signature pages hereof
together with their successors or assigns (collectively, the "Banks" and
individually, a "Bank"). Certain terms being used in this Agreement are
hereinafter defined in Section 13.
W I T N E S S E T H:
--------------------
WHEREAS, the Company has requested the Banks to make certain unsecured
loans to the Company and certain Subsidiaries of the Company designated by the
Company for general corporate purposes, including without limitation for working
capital, capital expenditures, acquisitions (directly or indirectly) of assets,
stock or other ownership interests, and repurchases or redemptions of
securities; and
WHEREAS, the Banks have agreed to make such loans on the terms and subject
to the conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the mutual agreements contained herein,
the parties hereto agree as follows:
SECTION 1 COMMITMENT OF THE BANKS; TYPES OF LOANS;
PROCEDURES FOR BORROWING OR CONVERTING.
1.1 COMMITMENT. Subject to the terms and conditions of this Agreement, each
of the Banks, severally and for itself alone, agrees to make loans
(collectively, the "Loans" and individually, a "Loan") to the Company and, as
provided in Section 1.8, to any Designated Subsidiary on a revolving basis from
time to time before the Termination Date, as it may be extended from time to
time pursuant to Section 1.2, in such aggregate amounts as the Company or any
Designated Subsidiary may from time to time request from such Bank; provided,
however, that the aggregate principal amount of Loans that any Bank shall be
committed to have outstanding to the Company and the Designated Subsidiaries
shall not at any one time exceed the amount set forth opposite such Bank's
signature hereto, or any subsequent amendment hereto (except to the extent
provided in Section 1.9 hereof). The foregoing commitment of each Bank to make
Loans as reduced from time to time in accordance with the terms hereof is herein
called such Bank's "Commitment" and the commitments of all Banks are herein
sometimes collectively called the "Commitments."
1.2 EXTENSION OF COMMITMENT. No later than 90 days prior to the Termination
Date then in effect, the Company may request, by written notice, that any one or
more of the Banks extend the Termination Date as to that Bank's Commitment for a
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period of one year commencing on the Termination Date then in effect. Each Bank
receiving such an extension request from the Company shall notify the Company in
writing no later than 45 days prior to the Termination Date then in effect of
such Bank's determination to extend or not to extend the Termination Date. A
notice given by a Bank to extend the Termination Date pursuant to this Section
1.2 shall be irrevocable (subject to Section 11.2). Any Bank that fails to
respond to the Company's request to extend the Termination Date within such time
period shall be deemed to have given notice to the Company that such Bank does
not desire to extend the Termination Date.
1.3 VARIOUS TYPES OF LOANS. Each Loan shall be either a Base Rate Loan, a
Domestic CD Loan, a Eurocurrency Loan, a Local Currency Loan, or a Negotiated
Loan (each herein called a "type" of Loan), as the Company shall specify in the
related notice of borrowing, Continuation, or Conversion pursuant to Section 1.4
or 1.5. Domestic CD Loans, Eurocurrency Loans, Local Currency Loans, and
Negotiated Loans bearing interest at a fixed rate for a fixed period of time are
sometimes collectively called "Fixed Rate Loans." Each Loan shall be made in
U.S. Dollars or such other currency as is requested by the Company and shall be
available at the time and for the period requested by the Company. Each Loan
shall bear interest at the rate specified in Section 3.1 and shall mature on and
be due and payable in full on the earliest of (i) the Termination Date, (ii) the
end of an Interest Period (unless the Loan is Continued or Converted) or (iii)
such other date as the Company and the Relevant Bank shall otherwise agree in
writing. The Eurocurrency specified in any notice of borrowing, Continuation, or
Conversion given by the Company pursuant to Section 1.4 or 1.5 shall be deemed
to be available for purposes of this Agreement, unless the Relevant Bank gives
the Company notice (which may be by telephone) no later than the earlier of (a)
12:00 noon, Cleveland time, on the second Business Day prior to the proposed
date making the Eurocurrency Loan, or (b) one hour after the Relevant Bank has
received the notice of borrowing, Continuation, or Conversion, as applicable.
The Relevant Bank's determination in good faith that a proposed Eurocurrency is
or is not available shall be final.
1.4 NOTICE OF BORROWING. CONTINUATION. OR CONVERSION. The Company, through
an Authorized Person, shall give written or telephonic notice to the Relevant
Bank of each proposed borrowing from such Bank, or Conversion or Continuation of
Loans made by such Bank, by 11:00 a.m., Cleveland time, (a) on the proposed date
of such borrowing, Conversion, or Continuation if such borrowing, Conversion, or
Continuation is comprised of Base Rate Loans, Domestic CD Loans, or Negotiated
Loans, (b) at least two Business Days prior to the proposed date of such
borrowing, Conversion, or Continuation if such borrowing, Conversion, or
Continuation is comprised of Eurocurrency Loans (provided that at least one
Business Day prior to such written or telephonic notice of proposed nondollar
denominated Eurocurrency Loan borrowing, Continuation or Conversion, the
Company, through an Authorized Person, shall give written or telephonic notice
to the Relevant Bank of the Company's intention to request a Eurocurrency Loan),
and (c) with respect to Local Currency Loans, at least two Business Days prior
to the proposed date of such borrowing, Conversion, or
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<PAGE> 31
Continuation or such other period of time as is customary for the particular
Local Currency. Each such notice shall be effective upon receipt by the Relevant
Bank and shall specify the date, amount, currency, and type of borrowing and, in
the case of a borrowing comprising Fixed Rate Loans, the initial Interest Period
for such borrowing. Each notice of a Conversion or Continuation of Loans shall
specify the date and amount of such Conversion or Continuation, the Loans to be
so Converted or Continued, the type and currency of Loans to be Converted into
or Continued, and, in the case of a Conversion into or Continuation of Fixed
Rate Loans, the initial or succeeding Interest Period, as the case may be. Each
borrowing shall be on a Business Day and shall be in an aggregate amount of not
less than 1,000,000 U.S. Dollars for Base Rate Loans and not less than 5,000,000
U.S. Dollars (or the Eurocurrency Equivalent Amount) for any other type of Loan,
other than Local Currency Loans (which shall be as agreed between the Company
and the Relevant Bank).
1.5 CONVERSION AND CONTINUATION PROCEDURES. The Company may convert all or
part of any outstanding Loans to Loans of a different type, or may elect to
continue any Fixed Rate Loans for an additional Interest Period, by giving
notice to the Relevant Bank of such Conversion or Continuation within the time
periods specified in Section 1.4. If, with respect to any Fixed Rate Loan, the
Company shall not either repay the Loan in full by 2:00 p.m., Cleveland time, on
the last day of the Interest Period applicable thereto or give notice of its
intention to Convert or Continue such Fixed Rate Loan within the time periods
specified in Section 1.4, then the Company shall be deemed to have requested
that such Loan automatically be converted into a Base Rate Loan at the end of
such Interest Period (and such Loan shall automatically so Convert into a Base
Rate Loan at the end of such Interest Period). Except as provided in Section
7.4, no Fixed Rate Loans shall be Converted on any day other than the last day
of the current Interest Period relating to such Loans.
1.6 NEGOTIATED LOANS. From time to time, the Company may request, through
an Authorized Person, and a Bank may, but shall not be obligated to, agree to
make, a Loan in U.S. Dollars bearing interest at a rate per annum, and for a
fixed period, agreed to by the Relevant Bank and the Company (each, a
"Negotiated Loan" and collectively, the "Negotiated Loans").
1.7 LOCAL CURRENCY LOANS. From time to time, the Company may request,
through an Authorized Person, and a Bank may, but shall not be obligated to,
agree to make a Loan in a Local Currency specified by the Company bearing
interest at a rate per annum agreed to by the Bank and the Company (each, a
"Local Currency Loan" and collectively, the "Local Currency Loans"). Repayments
of principal of and interest on Local Currency Loans shall be made in the
currency borrowed and shall be paid to the local office of the Relevant Bank
which made the Loan. The local office may request additional documentation of
the indebtedness if customary at the place of business of the branch; provided,
however, that the terms and conditions of that documentation shall be consistent
with those set forth in this Agreement unless unlawful or ineffective under
local law.
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<PAGE> 32
1.8 LOANS TO DESIGNATED SUBSIDIARIES. Each Designated Subsidiary may
request, through an Authorized Person, Local Currency Loans or Eurocurrency
Loans and Convert or Continue such Loans, and shall repay the principal of and
accrued interest on such Loans, all as though the Designated Subsidiaries were
parties to this Agreement and references to the "Company" in Sections 1.3, 1.4,
1.5, 1.7, 2.1, 3.1, 3.4, 3.5, 5.2 and 6.1 shall mean and include the Designated
Subsidiaries. The Relevant Bank may request additional documentation of the
indebtedness if customary at the place of business of the Relevant Bank;
provided, however, that the terms and conditions of that documentation shall be
consistent with those set forth in this Agreement unless unlawful or ineffective
under local law.
1.9 LOANS OUTSTANDING UNDER PRIOR FACILITY. Effective as of the date on
which the conditions of lending set forth in Section 10.1 and 10.3 are
satisfied, (i) the facility under this Agreement shall replace the facilities
under the credit agreements set forth on Schedule 1.10 (the "Prior Facilities'),
(ii) all loans outstanding under the Prior Facilities shall be and shall be
deemed to be outstanding under this Agreement (with all such loans retaining the
interest rate, maturity, interest period and similar terms as existed
immediately prior to the termination of the Prior Facilities; provided, however,
that if any such loan under the Prior Facilities exceeds the Bank's Commitment
hereunder and if such Bank's commitment under the Prior Facilities exceeds such
Bank's Commitment hereunder, then such Bank's commitment under the Prior
Facilities will be deemed such Bank's Commitment hereunder until such loan that
previously existed under the Prior Facilities has been repaid according to its
original terms) and (iii) the obligations of the banks under the Prior
Facilities shall terminate and be discharged.
SECTION 2 REPAYMENT OF LOANS; NOTES EVIDENCING LOANS.
2.1 REPAYMENT OF LOANS. The Company hereby promises to pay to each Bank the
aggregate unpaid principal amount of such Bank's Loans on the earliest of (i)
the Termination Date, (ii) the end of the applicable Interest Period for such
Loan (unless the Loan is Continued or Converted) or (iii) such other date as the
Company and the Relevant Bank may agree in writing. Repayment of any
Eurocurrency Loan shall be in the same currency in which such Loan was advanced.
2.2 NOTES. The Loans of each Bank shall be evidenced by a promissory note
(individually, a "Note", and collectively for all Banks, the "Notes")
substantially in the form set forth in Exhibit A, with appropriate insertions,
dated the date of the initial Loan (or such earlier date as shall be
satisfactory to the Relevant Bank), payable to the order of such Bank in the
principal amount of such Bank's Commitment (or, if less, in the aggregate unpaid
principal amount of all of such Bank's Loans hereunder).
2.3 OTHER PROVISIONS OF THE NOTES. Each Note shall provide for the payment
of interest as provided in Section 3.
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<PAGE> 33
2.4 RECORDKEEPING. Each Bank shall record in its records, or at its option
on the schedule attached to its Note, the date, amount, and type of each Loan
made by such Bank, each repayment, Continuation, or Conversion thereof, and the
dates on which each Interest Period for each Fixed Rate Loan shall begin and
end. The aggregate unpaid principal amount so recorded shall be rebuttable
presumptive evidence of the principal amount owing and unpaid on such Note. The
failure so to record any such amount or any error in so recording any such
amount, however, shall not limit or otherwise affect the obligations of the
Company hereunder or under any Note to repay the principal amount of the Loans,
together with all interest accruing thereon.
SECTION 3 INTEREST.
3.1 INTEREST RATES. With respect to each Loan, the Company hereby promises
to pay interest on the unpaid principal amount thereof for the period commencing
on the date of such Loan until such Loan is paid in full, as follows:
(a) At all times while such Loan is a Base Rate Loan, at a rate per annum
equal to the Base Rate from time to time in effect;
(b) At all times while such Loan is a Domestic CD Loan, during each
Interest Period, at a rate per annum equal to the Domestic CD Rate
(Adjusted) applicable to such Interest Period, plus the Applicable
Margin;
(c) At all times while such Loan is a Eurocurrency Loan, during each
Interest Period, at a rate per annum equal to the Eurocurrency Rate
(Reserve Adjusted) applicable to such Interest Period, plus the
Applicable Margin; and
(d) At all times while such Loan is a Negotiated Loan or a Local Currency
Loan, at the rate per annum agreed to by the Company and the Relevant
Bank pursuant to Section 1.6 or 1.7, as applicable.
Notwithstanding the provisions of the preceding clauses (a), (b), (c) or
(d) and subject to Section 1.5, in the event that any principal of any Loan is
not paid when due (whether by acceleration or otherwise), after the due date of
such principal until such principal is paid, the unpaid principal amount of, and
accrued but unpaid interest on, Revolving Loan shall bear interest at a rate per
annum equal to the higher of the rate borne by such Loan or the Relevant Bank's
Base Rate from time to time in effect, plus 1% per annum, subject to the maximum
applicable legal rate.
3.2 INTEREST PAYMENT DATES. Accrued interest on each Base Rate Loan
outstanding for 45 days or more shall be payable (i) quarterly in arrears on the
tenth day of each April, July, October, and January for the quarterly period
ended on the last day of the preceding month, and (ii) at maturity, commencing
with the earlier of such dates to occur after the date hereof. Accrued interest
on each Base Rate Loan outstanding for less than 45 days shall be payable in
full on the date
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<PAGE> 34
such Base Rate Loan is paid in full. Except as otherwise agreed by the Relevant
Bank, accrued interest on each Fixed Rate Loan shall be payable on the last day
of the Interest Period of each such Loan (or, in the case of a Domestic CD Loan
or Negotiated Rate Loan with an Interest Period of 90 days or longer or a
Eurocurrency Loan with an Interest Period of three months or longer, accrued
interest shall be payable quarterly in arrears on the tenth day of each April,
July, October and January and on the last day of each such Interest Period).
After maturity, accrued interest on all Loans shall be payable on demand.
Interest on any Eurocurrency Loan shall be paid in the same currency in which
such Loan was advanced.
3.3 INTEREST PERIODS FOR FIXED RATE LOANS. Prior to each borrowing,
Continuation, or Conversion of Fixed Rate Loans, the Company shall specify, in
the related notice of borrowing, Continuation, or Conversion pursuant to
Sections 1.4 or 1.5, the duration of the Interest Period for such Fixed Rate
Loans. Each notice to the Relevant Bank of an Interest Period shall be in
writing or by telephone and shall be given by an Authorized Person.
3.4 SETTING AND NOTICE OF RATES. For each Loan made hereunder, the
applicable interest rate for each Interest Period or other period shall be the
rate quoted by the Relevant Bank to the Company for that particular type of
Loan. The Relevant Bank shall, upon written request of the Company, deliver to
the Company a statement showing the calculation of (i) any applicable Domestic
CD Rate (Adjusted), (ii) any applicable Eurocurrency Rate (Reserve Adjusted) or
(iii) the rate of interest per annum applicable to Negotiated Loans or Local
Currency Loans hereunder.
3.5 COMPUTATION OF INTEREST. Interest shall be computed for the actual
number of days elapsed (with interest accruing on the first day, but not the
last day, of such Loan) on the basis of (a) with respect to Domestic CD Loans
and Eurocurrency Loans, a 360 day year, (b) with respect to Base Rate Loans, a
365 or 366 day year, as the case may be, (c) with respect to Negotiated Loans, a
365 or 366 day year, as the case may be, or such other basis as is agreed to by
the Company and the Relevant Bank, and (d) with respect to Local Currency Loans,
on a basis consistent with local customs that is agreed to by the Relevant Bank
and the Company.
SECTION 4 FEES.
4.1 COMMITMENT FEE. The Company agrees to pay to each Bank a commitment
fee, for the period from and including the date of this Agreement to the
Termination Date, on the daily average of the Unused Amount of such Bank's
Commitment hereunder equal to the Applicable Commitment Fee in effect from time
to time times the Unused Amount. Such commitment fee shall be payable quarterly
in arrears on the tenth day of each April, July, October, and January (the first
such payment to be made on October 10, 1992) for the quarterly period ended on
the last day of the preceding month and on the Termination Date. The
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<PAGE> 35
Company may make such payments according to the Electronic Payment Instructions.
4.2 COMPUTATION OF FEES. Fees shall be computed for the actual number of
days elapsed on the basis of a 365 or 366 day year, as the case may be.
SECTION 5 REDUCTION OR TERMINATION OF THE COMMITMENTS;
PREPAYMENT.
5.1 REDUCTION OR TERMINATION OF THE COMMITMENTS. The Company may from time
to time prior to the Termination Date on at least three Business Days' prior
written notice given by an Authorized Person to any Bank permanently reduce the
amount of such Bank's Commitment to an amount not less than the aggregate unpaid
principal amount of the Loans made by such Bank then outstanding. Any such
reduction shall be in an aggregate amount of not less than 1,000,000 U.S.
Dollars, or such lesser amount of such Bank's Unused Amount then remaining.
5.2 OPTIONAL PREPAYMENT. The Company may from time to time prepay the Loans
in whole or in part, provided that (a) an Authorized Person shall give the
Relevant Bank not less than three Business Days' prior notice thereof,
specifying the Loans to be prepaid, and the date and amount of prepayment and
(b) each partial prepayment shall be in the principal amount of 1,000,000 U.S.
Dollars (or the Eurocurrency or Local Equivalent Amount thereof) or such lesser
amount as is then outstanding on the Loan being prepaid.
5.3 MANDATORY PREPAYMENT. On each day on which the aggregate outstanding
principal amount of Loans owing to any Bank on such day exceeds (whether as a
result of currency fluctuations or otherwise) such Bank's Commitment hereunder,
the Company shall pay to such Bank on demand a mandatory prepayment in the
amount of such excess. Mandatory prepayments required by this Section 5.3 shall
be applied first to Base Rate Loans until paid in full and then, at the
Company's election and in the order specified by the Company, to Fixed Rate
Loans.
SECTION 6 MAKING AND APPLICATION OF PAYMENTS.
6.1 MAKING OF PAYMENTS. Except as otherwise provided in Section 11.2
hereof, all payments (including those made pursuant to Section 5) of principal
of, or interest on, the Loans shall be made by the Company to the Relevant Bank
in immediately available funds in the Obligation Currency.
6.2 APPLICATION OF CERTAIN PAYMENTS. Each payment of principal on any Loan
shall be applied first to Base Rate Loans and then to such of the other Loans as
the Company shall direct by written or telephonic notice given by an Authorized
Person to the Relevant Bank on or before the date of such payment, or in the
absence of such notice, as the Relevant Bank shall determine in its discretion.
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<PAGE> 36
6.3 DUE DATE EXTENSION. If any payment of principal or interest with
respect to any of the Loans or Notes falls due on a Saturday, Sunday, or other
day which is not a Business Day, then such due date shall be extended to the
next following Business Day (except as provided in the last sentence of the
definition of Interest Period), and additional interest shall accrue and be
payable for the period of such extension.
SECTION 7 INCREASED COSTS AND TAXES.
7.1 Increased Capital.
-----------------
(a) If, after the date of this Agreement, the adoption of any applicable
law, rule, or regulation regarding capital adequacy, or any change
therein, or change in the interpretation or administration thereof by
any governmental authority, central bank, or comparable agency
charged with the interpretation or administration thereof, or
compliance by any Bank 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 the effect of
reducing the rate of return on such Bank's capital as a consequence
of its obligations hereunder to a level below that which such Bank
would have achieved but for such adoption, change, or compliance
(taking into consideration such Bank's policies with respect to
capital adequacy) by an amount deemed by such Bank to be material,
then from time to time within 15 days after demand by such Bank, the
Company shall pay to such Bank such additional amount or amounts as
will compensate such Bank for such reduction; provided, that, no Bank
shall request, and the Company shall not be obligated to pay, any
amounts in excess of the amounts charged by such Bank to similarly
situated borrowers of such Bank under revolving credit facilities
similar to the one provided herein. Notwithstanding the foregoing, a
Bank shall not be entitled to compensation from the Company for any
such additional amounts incurred more than 30 days before the date on
which the Bank notifies the Company of any event which would entitle
the Bank to compensation pursuant to this Section 7.1.
(b) Each Bank will promptly notify the Company of any event of which it
has knowledge that will entitle such Bank to compensation pursuant to
this Section 7.1, together with a certificate signed by an authorized
officer of the Bank setting forth the basis of such demand and
certifying that the amounts demanded hereunder are not in excess of
the amounts charged by such Bank to similarly situated borrowers of
such Bank under revolving credit facilities similar to the one
provided herein. The Bank will designate a different lending office
if such designation will avoid the need for, or reduce the amount of,
such compensation and will not, in the reasonable judgment of such
Bank, be otherwise disadvantageous to such Bank or contrary to its
stated policies. The Bank's certification of the additional
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<PAGE> 37
amount or amounts to be paid to it hereunder shall be conclusive in
the absence of demonstrable error. In determining such amount, such
Bank may use reasonable averaging and attribution methods.
7.2 INCREASED COSTS. If, after the date hereof, the adoption of any
applicable law, rule, or regulation or any change therein, or any change in the
interpretation or administration thereof, or compliance by any Bank with any
request, or directive (whether or not having the force of law) of any such
authority, central bank, or comparable agency,
(a) shall subject any Bank to any tax, duty, or other charge with respect
to its Fixed Rate Loans, its Notes or its obligation to make Fixed
Rate Loans, or shall change the basis of taxation of payments to any
Bank of the principal of or interest on its Fixed Rate Loans or any
other amounts due under this Agreement in respect of its Fixed Rate
Loans or its obligation to make Fixed Rate Loans (except for the
imposition of any tax or changes in the rate of tax imposed on the
overall income of such Bank); or
(b) shall impose, modify, or deem applicable any reserve (including,
without limitation, any reserve imposed by the Board of Governors of
the Federal Reserve System, but excluding any reserve included in the
determination of interest rates pursuant to Section 3), special
deposit, or similar requirement against assets of, deposits with or
for the account of, or credit extended by, any Bank;
and as a result of any of the foregoing the cost to such Bank of making or
maintaining any Fixed Rate Loan is increased (or a cost is imposed on such
Bank), or the amount of any sum received or receivable by such Bank under this
Agreement or under its Notes with respect thereto is reduced, then within 15
days after demand by such Bank (which demand shall be accompanied by a statement
setting forth the basis of such demand), the Company shall pay directly to such
Bank such additional amount or amounts as will compensate such Bank for such
increased cost or such reduction. Notwithstanding the foregoing, a Bank shall
not be entitled to any compensation from the Company for any such increased cost
or such reduction attributable to any period that is more than 30 days before
the date on which the Bank notifies the Company of any event which would entitle
the Bank to compensation pursuant to this Section 7.2. No Bank is entitled to
reimbursement for any amounts paid as a result of taxes currently imposed on
such Bank.
7.3 BASIS FOR DETERMINING INTEREST RATE INADEQUATE. If with respect to any
Interest Period:
(a) a Bank reasonably determines that deposits in a requested
Eurocurrency (in the applicable amounts) are not being offered to the
Bank in the relevant market for such Interest Period requested by the
Company, or a Bank otherwise reasonably determines (which
determination shall be binding and conclusive on all parties) that by
reason of circumstances affecting the interbank eurocurrency market
adequate and reasonable
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<PAGE> 38
means do not exist for ascertaining the applicable Eurocurrency Rate
(Reserve Adjusted); or
(b) a Bank advises the Company that the making or funding of Eurocurrency
Loans has become impracticable as a result of an event occurring
after the date of this Agreement which in the opinion of such Bank
materially affects Eurocurrency Loans,
then: (i) the affected Bank shall promptly notify the Company of such
circumstance, (ii) so long as such circumstances shall continue the affected
Bank shall not be under any obligation to make, Continue, or Convert Loans into
Eurocurrency Loans, and (iii) on the last day of the then current Interest
Period for Eurocurrency Loans, such Eurocurrency Loans shall, unless then repaid
in full or Converted into a Loan of a different type pursuant to Section 1.5,
automatically Convert to Base Rate Loans.
7.4 CHANGES IN LAW RENDERING CERTAIN LOANS UNLAWFUL. In the event that
there occurs after the date hereof any change in applicable laws or regulations
(including the adoption of any new laws), or any change in the interpretation of
applicable laws or regulations by any governmental or other regulatory body
charged with the administration thereof, that makes it unlawful for a Bank to
make, maintain, or fund a type of Fixed Rate Loans, then (a) such Bank shall
promptly notify the Company of such circumstance, (b) the obligation of such
Bank to make, Continue, or Convert Loans into the type of Fixed Rate Loans made
unlawful for that Bank shall, upon the effectiveness of such event, be suspended
for the duration of such unlawfulness, and (c) on the last day of the current
Interest Period for Fixed Rate Loans of such type (or, in any event, if the Bank
affected by such change so requests, on such earlier date as may be required by
the relevant law, regulation, or interpretation), the Fixed Rate Loans of such
type made by such Bank shall, unless then repaid in full or Converted into a
Loan of a different type pursuant to Section 1.5, automatically Convert to Base
Rate Loans.
7.5 FUNDING LOSSES. The Company hereby agrees that upon demand by any Bank
(which demand shall be accompanied by a statement setting forth the basis for
the calculations of the amount being claimed), the Company will indemnify such
Bank against any net loss or expense which such Bank sustains or incurs
(including, without limitation, any net loss or expense incurred by reason of
the liquidation or reemployment of deposits or other funds acquired by such Bank
to fund or maintain Fixed Rate Loans), as reasonably determined by such Bank, as
a result of (a) any payment or prepayment or Conversion of any Fixed Rate Loan
of such Bank on a date other than the last day of an Interest Period for such
Loan, or (b) any failure of the Company to borrow, Continue, or Convert any
Loans on a date specified therefor in a notice of borrowing (which shall not
include the Company's notice of intention to request a Eurocurrency Loan),
Continuation, or Conversion pursuant to this Agreement.
7.6 CURRENCY INDEMNITY.
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(a) The obligation of the Company under this Agreement and the Notes
to make payments in Dollars or in any Eurocurrency or Local
Currency in which the Loans or any portion thereof are outstanding
(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 to which such tender or recovery shall result
in the effective receipt by the Banks of the full amount of the
Obligation Currency expressed to be payable under this Agreement
or the Notes. If, for the purpose of obtaining or enforcing
judgment against the Company in any court or in any jurisdiction,
it becomes necessary to convert into 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 under the Notes, the conversion shall be made,
at the option of the Relevant Bank, at the rate of exchange
prevailing on the Business Day immediately preceding the day on
which the judgment is given (such Business Day as the case may be,
being hereinafter in this Section 7.6 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 Company agrees to pay such
additional amounts 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) Any amount due from the Company under the foregoing subparagraph
will be due as a separate debt and shall not be affected by
judgment being obtained for any other sums due otherwise
hereunder.
7.7 INCREASED TAX COSTS. The Company agrees to make all payments or
reimbursements under this Agreement free and clear of, and without deduction
for, any future taxes (including withholding taxes) imposed (except for any tax
or changes in the rate of tax imposed on overall income of any Bank) on payments
of principal, interest and fees or charges under the Agreement which are
attributable to, or represent, the application of any such tax for any time
period after the Company has received notice of such tax from such Bank. Such
Bank will use its reasonable efforts to minimize any taxes and will designate a
different lending office if such designation will avoid the need for, or reduce
the amount of, such tax(es) and will not, in the reasonable judgment of such
Bank, be otherwise disadvantageous to such Bank or contrary to its stated
policies. In the event that the Company is required to directly pay any such
taxes, the Company agrees to furnish such Bank with official tax receipts
evidencing payment of such taxes within forty-five (45) days after the due date
for each such payment. Each Bank agrees that in the event that any such
additional amount paid or reimbursed by the
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Company to or for such Bank in respect of any taxes be recovered, in whole or in
part, by such Bank (by credit, offset, deduction or otherwise), against or in
computing any income, franchise or other taxes, such Bank will promptly
reimburse the Company the amount of such recovery. A transferee of any interest
in the Agreement or the Notes shall not be entitled to the benefits of this
Section 7.7 with respect to any taxes which would not have been incurred if
there had been no transfer.
SECTION 8 WARRANTIES.
The Company warrants to the Banks as of the date of this Agreement that:
8.1 CORPORATE ORGANIZATION. The Company is a corporation duly incorporated
and in good standing under the laws of the State of Ohio and the Company is duly
qualified and in good standing as a foreign corporation authorized to do
business in each jurisdiction of the United States where, because of the nature
of its activities or properties, such qualification is required and where the
failure to be so qualified would materially and adversely affect the
consolidated financial condition of the Company and its Consolidated
Subsidiaries taken as a whole.
8.2 AUTHORIZATION; NO CONFLICT. The execution, delivery, and performance by
the Company of this Agreement and the Notes are within the Company's corporate
powers, have been duly authorized by all necessary corporate action, and do not
and will not contravene or conflict with any provision of applicable law in
effect on the date hereof or of the Amended Articles of Incorporation or
Regulations of the Company or of any agreement for borrowed money or other
material agreement binding upon the Company. The Company has duly executed and
delivered this Agreement.
8.3 VALIDITY AND BINDING NATURE. This Agreement is, and the Notes when duly
executed and delivered will be, legal, valid and binding obligations of the
Company enforceable against the Company in accordance with their respective
terms.
8.4 FINANCIAL STATEMENTS. The Company's audited consolidated financial
statements as at December 31, 1991 and its unaudited consolidated financial
statements as at March 31, 1992, copies of which have been furnished to each
Bank, have been prepared in accordance with GAAP, applied on a basis consistent
with that of the preceding fiscal year, and fairly present in all material
respects the consolidated financial condition and results of operations of the
Company and its Consolidated Subsidiaries as of the dates and for the periods
indicated, as applicable, and since the dates thereof until the date of this
Agreement there has been no material adverse change in the consolidated
financial condition of the Company and its Consolidated Subsidiaries taken as a
whole.
8.5 LITIGATION. Except as set forth in Schedule 8.5, there are no material
legal proceedings, other than ordinary routine litigation incidental to the
business, to
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which the Company or any of its Consolidated Subsidiaries is a party or to which
any of their respective properties is subject that are required to be disclosed
in the Company's periodic reports under the Securities Exchange Act of 1934 and
that have not been so disclosed.
8.6 COMPLIANCE WITH ERISA. Each member of the controlled group of
corporations (as defined in Section 414(b) of the Internal Revenue Code of
1986), which includes the Company (the "TRW Group"), has (i) fulfilled its
obligations under the minimum funding standards of Part 3 of Title I of the
Employee Retirement Income Security Act of 1974 ("ERISA") and Section 412 of the
Internal Revenue Code of 1986 ("Code") with respect to each defined benefit plan
(as defined in Section 3 (35) of ERISA) maintained by a member of the TRW Group
("Plan") and (ii) is in compliance in all material respects with the presently
applicable provisions of ERISA and the Code with respect to each such Plan. No
member of the TRW Group has (x) sought a waiver of the minimum funding standard
under Section 412 of the Code in respect of any Plan, (y) failed to make any
contribution or payment required to be made to a Plan or to any multi-employer
plan (as defined in Section 3 (37)(A) of ERISA) or made any amendment to any
Plan which has resulted or could result in the imposition of a lien or the
posting of a bond or other security under ERISA or the Code or (z) incurred any
liability under Title IV of ERISA other than the liability to the Pension
Benefit Guaranty Corporation for premiums under Section 4007 of ERISA.
8.7 ENVIRONMENTAL MATTERS. The Company has conducted periodic reviews of
the effect of compliance with federal, state and local requirements relating to
the discharge of materials into the environment, in the course of which it has
identified and evaluated potential liabilities and costs. The Company has
established accruals for matters that are probable and reasonably estimable as
required by FASB Statement No. 5, "Accounting for Contingencies." To the
Company's knowledge, any liability that may result from the resolution of known
environmental matters in excess of amounts accrued therefor will not have a
material adverse effect on the financial position of the Company.
8.8 TAXES. The Company and its Consolidated Subsidiaries have filed all
United States federal income tax returns and all other material tax returns
which are required to have been filed by them (subject to any available
extensions) and have paid all taxes indicated as due on such returns. The
Company has made adequate and reasonable provision for all material taxes not
yet due and payable, if any, and all material assessments, if any.
8.9 GOVERNMENT REGULATION. Neither the Company nor any of its Consolidated
Subsidiaries is registered as a public utility under the Public Utility Holding
Company Act of 1935 or as an investment company under the Investment Company Act
of 1940.
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SECTION 9 COVENANTS.
Until the later of (i) the expiration or termination of the Commitments and
(ii) all obligations of the Company hereunder and under the Notes are paid in
full, the Company agrees that, unless at any time the Majority Banks shall
otherwise expressly consent in writing:
9.1 REPORTS. CERTIFICATES AND OTHER INFORMATION.
9.1.1 AUDIT REPORT. Within 120 days after each fiscal year of the
Company, the Company will provide to each Bank a copy of the Company's Annual
Report to Shareholders and its Annual Report on Form 10-K for the year then
ended, as filed with the Securities and Exchange Commission and which will
include an annual audit report of the Company, prepared on a consolidated basis
and in accordance with the Company's then current method of accounting, which
methods must be in accordance with GAAP, duly certified by independent certified
public accountants of nationally recognized standing selected by the Company.
9.1.2 QUARTERLY REPORTS. Within 60 days after each quarter (except
the last quarter) of each fiscal year of the Company, the Company will provide
to each Bank a copy of the Company's Quarterly Report on Form 10-Q for the
quarter then ended, as filed with the Securities and Exchange Commission.
9.1.3 COMPLIANCE CERTIFICATES. Contemporaneously with the
furnishing of a copy of each Annual Report on Form 10-K provided for in Section
9.1.1 and of each Quarterly Report on Form 10-Q provided for in Section 9.1.2,
the Company will provide to each Bank a duly completed certificate in the form
of Exhibit B with appropriate insertions (each such certificate called a
"Compliance Certificate"), dated not more than 10 days prior to the date
furnished, signed by an officer of the Company, showing compliance with the
Consolidated Net Worth covenant set forth in Section 9.2, and to the effect that
no Event of Default or Unmatured Event of Default has occurred and is continuing
or, if there is any such an event, describing it and the steps, if any, being
taken to cure it.
9.1.4 CURRENT REPORTS. The Company will provide to each Bank
copies of each Current Report on Form 8-K filed by the Company with the
Securities and Exchange Commission, promptly upon the filing thereof.
9.1.5 OTHER INFORMATION. The Company will provide to a Bank such
other information concerning the Company as such Bank may reasonably request
from time to time.
9.2 NET WORTH. The Company will not permit Consolidated Net Worth to be
less than 1,600,000,000 U.S. Dollars less an amount equal to the lesser of (i)
the aggregate amount expended by the Company subsequent to December 31, 1995 for
the repurchase of its common stock and (ii) 600,000,000 U.S. Dollars.
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9.3 LIENS.
(a) The Company will not, and will not permit any Domestic Subsidiary
to, directly or indirectly, create or assume any mortgage,
encumbrance, lien, pledge, charge, or security interest of any
kind (collectively and individually, a "mortgage" or "lien") upon
or in any of its interests in any Principal Property or upon or in
any shares of capital stock or indebtedness of any Domestic
Subsidiary, whether such interest, capital stock or indebtedness
is now owned or hereafter acquired, if such mortgage secures or is
intended to secure, directly or indirectly, the payment of any
indebtedness for money borrowed evidenced by notes, bonds,
debentures, or other written evidences of indebtedness (such
indebtedness for money borrowed being hereafter in Sections 9.3
and 9.4 collectively called "Debt") without making effective
provision, and the Company in such case will make or cause to be
made effective provision, whereby all of the Loans shall be
secured by such mortgage equally and ratably with any other Debt
thereby secured; excluding, however, from the operation of this
Section 9.3:
(i) mortgages on any Principal Property acquired, constructed,
or improved by the Company or any Domestic Subsidiary after
July 1, 1992 which are created or assumed contemporaneously
with, or within 120 days after, such acquisition or
completion of such construction or improvement to secure or
provide for the payment of any part of the purchase price of
such Principal Property or the cost of such construction or
improvement incurred after July 1, 1992, or, in addition to
mortgages contemplated by clauses (ii) and (iii) below,
mortgages on any such Principal Property existing at the
time or placed thereon at the time of acquisition or leasing
thereof by the Company or any Domestic Subsidiary, or
conditional sales agreements or other title retention
agreements with respect to any Principal Property now owned
or leased or hereafter acquired or leased by the Company or
a Domestic Subsidiary;
(ii) mortgages on property (including shares of capital stock or
indebtedness of a corporation) of a corporation existing at
the time such corporation becomes a Domestic Subsidiary or
is merged or consolidated with the Company or a Domestic
Subsidiary or existing at the time of a sale, lease, or
other disposition of the properties of such corporation (or
a division thereof) or other Person as an entirety or
substantially as an entirety (which includes the sale,
lease, or other disposition of all or substantially all the
assets thereof) to the Company or a Domestic Subsidiary,
provided that no such mortgage shall extend to any other
Principal Property of the Company or any Domestic Subsidiary
or to any shares of capital stock or any indebtedness of any
Domestic Subsidiary;
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(iii) mortgages created by the Company or a Domestic Subsidiary to
secure indebtedness of the Company or a Domestic Subsidiary
to the Company or to a Wholly Owned Domestic Subsidiary;
(iv) mortgages in favor of the United States of America or any
State, territory or possession thereof, or any foreign
country or any department, agency, instrumentality, or
political subdivision of any of such domestic or foreign
jurisdictions to secure partial, progress, advance, or other
payments pursuant to any contract or statute or to secure
any debt incurred for the purpose of financing all or any
part of the purchase price of, or the cost of constructing,
the property subject to such mortgages; and
(v) mortgages for the sole purpose of extending, renewing, or
replacing (or successively extending, renewing, or
replacing) in whole or in part any mortgage existing on July
1, 1992 or referred to in the foregoing clauses (i) to (iv)
inclusive or of any debt secured thereby; provided, however,
that the principal amount of indebtedness secured thereby
shall not exceed the principal amount of indebtedness so
secured at the time of such extension, renewal, or
replacement, and that such extension, renewal, or
replacement mortgage shall be limited to all or a part of
the property which secured the mortgage so extended,
renewed, or replaced (plus improvements on such property).
(b) Notwithstanding the provisions of paragraph (a) of this Section
9.3, the Company or any Domestic Subsidiary may, without equally
and ratably securing all the Loans, create or assume mortgages
which would otherwise be subject to the foregoing restrictions if
at the time of such creation or assumption, and after giving
effect thereto, Exempted Indebtedness does not exceed 15% of
Consolidated Net Tangible Assets determined as of a date not more
than 90 days prior thereto.
9.4 SALE AND LEASEBACK.
(a) The Company will not, and will not permit any Domestic Subsidiary
to, sell, lease or transfer any Principal Property owned by the
Company or a Domestic Subsidiary as an entirety, or any
substantial portion thereof, to anyone other than a Wholly Owned
Domestic Subsidiary (or the Company or a Wholly Owned Domestic
Subsidiary in the case of a Domestic Subsidiary) with the
intention of taking back a lease of such property (herein referred
to as a "Sale and Leaseback Transaction") except a lease for a
period of not more than 36 months by the end of which it is
intended that the use of such property by the lessee will be
discontinued; provided, that, notwithstanding the foregoing, the
Company or any Domestic Subsidiary may sell any such property and
lease it back if the net proceeds of such sale are at least equal
to the fair value (as determined by resolution adopted by the
Board of Directors of the
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Company) of such property, and (i) the Company or such Domestic
Subsidiary would be entitled pursuant to paragraph (a) of Section
9.3 to create Debt secured by a mortgage on the property to be
leased in an amount equal to the Attributable Debt with respect to
such Sale and Leaseback Transaction without equally and ratably
securing all the Loans, or (ii) if such sale or transfer does not
come within the exception provided by the preceding clause (i),
the net proceeds of such sale shall, and in any such case the
Company covenants that they will, within 120 days after such sale,
be applied (to the greatest extent possible) either to the
repayment of the Loans then outstanding when due (whereupon the
Commitments hereunder shall be reduced, on a pro rata basis, to
the extent that such net proceeds are so applied) or to the
retirement of other Consolidated Funded Debt of the Company
ranking at least on a parity with the Loans, or in part to one or
more of such alternatives and in part to another.
(b) Notwithstanding the provisions of paragraph (a) of this Section
9.4, the Company or any Domestic Subsidiary may enter into Sale
and Leaseback Transactions if, at the time of such entering into,
and after giving effect thereto, Exempted Indebtedness does not
exceed 15% of Consolidated Net Tangible Assets determined as of a
date not more than 90 days prior thereto.
9.5 MERGERS, CONSOLIDATIONS, SALES. The Company shall not consolidate with,
or sell or convey all or substantially all its assets to, or merge into, any
other Person, unless (a) the Company is the surviving corporation of such
transaction; or (b) the Company is the nonsurviving party to a merger or
consolidation, the primary purpose of which is to effect a reincorporation of
the Company under the laws of another state.
SECTION 10 CONDITIONS OF LENDING.
The obligation of each Bank to make its Loans is subject to the following
conditions precedent:
10.1 INITIAL LOAN TO THE COMPANY. The obligation of each Bank to make its
initial Loan to the Company is, in addition to the conditions precedent
specified in Section 10.3, subject to the condition precedent that such Bank
shall have received all of the following, each duly executed and dated the date
of such Loan (or such earlier date as shall be satisfactory to such Bank), in
form and substance satisfactory to such Bank:
10.1.1 NOTE. The Note of the Company payable to the order of such
Bank, substantially in the form of Exhibit A.
10.1.2 RESOLUTIONS. Certified copies of resolutions of the Board
of Directors of the Company authorizing the Company to obtain Loans
hereunder.
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10.1.3 INCUMBENCY AND SIGNATURES. A certificate of the Secretary
or an Assistant Secretary of the Company certifying the names of the
officer or officers of the Company who have signed or will sign this
Agreement, the Notes, and other documents provided for in this Agreement to
be executed by the Company, together with a sample of the true signature of
each such officer, and a certificate of authorization setting forth each
Person who is authorized to effect Loans and other transactions hereunder,
together with a sample of the true signature of each such Authorized
Person. Each Bank may conclusively rely on such certificates until it shall
have received notice to the contrary.
10.1.4 OPINION OF COUNSEL. The opinion of counsel to the Company,
substantially in the form of Exhibit C.
10.2 LOANS TO DESIGNATED SUBSIDIARIES. The obligation of each Bank to make
any Loans to any Designated Subsidiary is subject to the condition precedent
that such Bank shall have received the following:
10.2.1 RESOLUTIONS. A certified copy of the resolutions of the
appropriate governing body of the Designated Subsidiary that requested the
Loan authorizing it to obtain Loans hereunder or such other evidence of
corporate authority as is customary in the country of domicile of the
Designated Subsidiary.
10.2.2 ACCEPTANCE OF THIS AGREEMENT. A letter signed by an
authorized officer of such Designated Subsidiary evidencing its agreement
to be bound by the terms of this Agreement with respect to each Loan made
to it hereunder.
10.2.3 INCUMBENCY AND SIGNATURES. A certificate of the Secretary
or an Assistant Secretary of the Designated Subsidiary certifying the name
and signature of the officer or officers of the Designated Subsidiary who
have signed or will sign the letter referenced in Section 10.2.2, together
with a sample of the true signature of each such officer, and a certificate
of authorization setting forth each Person who is authorized to effect
Loans and other transactions hereunder, together with a sample of the true
signature of each such Authorized Person. Each Bank may conclusively rely
on such certificates until it shall have received notice to the contrary.
10.3 ALL LOANS. The obligation of each Bank to make any Loan hereunder is
subject to the further conditions precedent that: (a) No Event of Default or
Unmatured Event of Default has occurred and is continuing or will result from
the making of such Loan, and (b) the warranties of the Company contained in
Sections 8.1, 8.2, and 8.3, are true and correct as of the date of such
requested Loan, with the same effect as though made on the date of such Loan.
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10.4 CONVERSIONS. Except for Section 10.3(a), the conditions set forth in
Sections 10.1, 10.2, and 10.3 shall not apply to the Conversion of Loans from
one type to another type or Continuation of Loans.
SECTION 11 EVENTS OF DEFAULT AND THEIR EFFECT.
11.1 EVENTS OF DEFAULT. Each of the following shall constitute an Event of
Default under this Agreement:
11.1.1 NONPAYMENT OF NOTES OR FEES. Default in the payment when
due of any principal of any Note or default in the payment when due of
interest on any Note or fees payable by the Company hereunder and
continuance of such failure to pay interest or fees for five Business Days
after written notice thereof to the Company from the Bank to which such
amounts are owed.
11.1.2 NONPAYMENT OF OTHER INDEBTEDNESS FOR BORROWED MONEY.
Default in the payment when due at maturity (subject to any applicable
grace period) or by acceleration of any other indebtedness for borrowed
money having a principal amount in excess of 50,000,000 U.S. Dollars of, or
guaranteed by, the Company, or default in the performance or observance of
any obligation or condition with respect to any such other indebtedness if
such default results in the acceleration of the maturity of any such
indebtedness; provided, that, if such default shall subsequently be
remedied, cured, or waived prior to either the termination of Commitments
or the declaration that all Loans are immediately due and payable, in each
case pursuant to Section 11.2 hereof, and as a result the payment of such
indebtedness is no longer due, the Event of Default existing hereunder by
reason thereof shall likewise be deemed thereupon to be remedied, cured, or
waived and no longer in existence, all without any further action by the
parties hereto.
11.1.3 BANKRUPTCY OR INSOLVENCY. The Company generally fails to
pay, or admits in writing its inability to pay, debts as they become due;
or the Company applies for, consents to, or acquiesces in the appointment
of, a trustee, receiver, or other custodian for the Company or for a
substantial part of the property thereof, or makes a general assignment for
the benefit of creditors; or, in the absence of such application, consent
or acquiescence, a trustee, receiver, or other custodian is appointed for
the Company or for a substantial part of the property of the Company; or
any bankruptcy, reorganization, debt arrangement, or other case or
proceeding under any bankruptcy or insolvency law, or any dissolution or
liquidation proceeding is commenced in respect of the Company and if such
case or proceeding is not commenced by the Company, it is consented to or
acquiesced in by the Company or remains for 90 consecutive days undismissed
or unstayed; or the Company takes any corporate action to authorize any of
the foregoing.
11.1.4 NONCOMPLIANCE WITH OTHER PROVISIONS. Failure by the Company
to comply with or to perform in any material respect any other
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provision of this Agreement (and not constituting an Event of Default under
any of the preceding provisions of this Section 11.1) and continuance of
such failure for 30 days after written notice thereof to the Company from
the Majority Banks.
11.1.5 WARRANTIES. Any warranty made by the Company in Sections 8
or 14.16 of this Agreement is breached or is incorrect when made in any
material respect and the Company shall fail to take corrective actions
reasonably satisfactory to the Majority Banks within 30 days after written
notice thereof to the Company from the Majority Banks, except only in the
case of a breach of the warranties contained in Section 8 or 14.16 made on
the date of this Agreement, in which case there shall be no opportunity to
take corrective actions.
11.1.6 JUDGMENTS. Any final and unappealable judgment or order
from a judicial or administrative body (which order or judgment is fully
enforceable against the Company or any of its Consolidated Subsidiaries in
courts of the United States of America or any state thereof) for the
payment of money in excess of 50,000,000 U.S. Dollars (after adjustments to
reflect reductions for credits and set-offs asserted in good faith by the
Company) shall be rendered against the Company, shall not have been
discharged or vacated and shall have been in effect, in its final and
unappealable form, for a period of 30 consecutive days.
11.2 EFFECT OF EVENT OF DEFAULT. If any Event of Default described in
Section 11.1.3 shall occur, the Commitments (if they have not theretofore
terminated) shall immediately terminate and all Loans and Notes shall
automatically become immediately due and payable, all without notice of any
kind; and, in the case of any other Event of Default, the Majority Banks may
declare the Commitments (if they have not theretofore terminated) to be
terminated and the Outstanding Majority Banks may declare that all Loans and
Notes shall become immediately due and payable. The Majority Banks and the
Outstanding Majority Banks shall promptly advise the Company in writing of any
such declaration. Following the declaration that all Loans and Notes are
immediately due and payable, all payments made by the Company on account of the
Loans and Notes shall be made to the Administrator, which shall distribute such
payments on a pro rata basis (in relation to the amounts of outstanding Loans)
to Banks with outstanding Loans. Following such declaration, if any Bank
receives a payment that is not on a pro rata basis, such Bank will remit to the
Administrator any amount in excess of its pro rata portion. Upon receipt of any
such remittance, the Administrator will distribute such amount to the Banks with
outstanding Loans in order that all distributions will be pro rata. The effect
as an Event of Default of any event described in Section 11.1.1 or Section
11.1.3 may be waived only by the written concurrence of the holders of 100% of
the aggregate unpaid principal amount of the Notes and the Majority Banks, and
the effect as an Event of Default of any other event described in this Section
11 may be waived by the written concurrence of the Majority Banks and the
Outstanding Majority Banks.
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SECTION 12 GUARANTY.
The Company hereby unconditionally, absolutely and irrevocably guarantees,
as primary obligor and not merely as surety, the repayment to each Relevant
Bank, when due pursuant to the terms and conditions of this Agreement, of the
amount of any Loan made pursuant to this Agreement to a Designated Subsidiary,
together with accrued interest on such Loan; provided, however, that before any
amount shall be deemed due and payable pursuant to this Section 12, the Relevant
Bank must first give notice to the Company of the nonpayment by the Designated
Subsidiary, and the Company shall have five Business Days from the receipt of
such notice to cure or cause to be cured any and all such nonpayments. The
Company's obligations hereunder constitute a guaranty of payment and not of
collection merely. The Company hereby waives notice of, and consents to, any
extensions of time of payment, renewals, compromises, settlements, releases or
other indulgences from time to time granted by the Relevant Bank in respect of
Loans made to Designated Subsidiaries. Except as otherwise provided in this
Section 12, the Company hereby waives presentment, protest, demand of payment,
notice of dishonor and all notices and demands whatsoever. The obligations of
the Company hereunder shall not be released, discharged or otherwise affected by
(i) any change in the corporate existence or constitution, structure or
ownership of any Designated Subsidiary or the Company, (ii) any insolvency,
bankruptcy, reorganization or similar proceeding affecting the Designated
Subsidiary or its assets or the Company or (iii) the existence of any claim,
set-off or other rights which the Company may have at any time against the
Relevant Bank or any other person. If at any time any payment of any obligation
guaranteed hereunder is rescinded or must otherwise be restored or returned upon
the insolvency, bankruptcy or reorganization of a Designated Subsidiary or
otherwise, the Company's obligations under this Section 12 with respect to such
payment shall be reinstated at such time as though such payment had not been
made. The Company shall not exercise any of its subrogation rights with respect
to amounts paid to a Relevant Bank pursuant to this Section 12 until all amounts
guaranteed hereunder payable to such Relevant Bank have been paid in full.
Following such payment in full with regard to a Relevant Bank, the Company shall
be entitled to subrogation in the Relevant Bank's rights and, upon the
reasonable request of the Company, the Relevant Bank agrees to cooperate with
the Company in enforcement of the Company's subrogation rights, including the
transfer and delivery by the Relevant Bank to the Company of any and all
evidence of indebtedness relating to such Loan within the possession or control
of the Relevant Bank.
SECTION 13 CERTAIN DEFINITIONS.
When used herein the following terms shall have the following meaning:
"AFFILIATE" means, with respect to a particular Person, any Person which,
directly or indirectly, controls, is controlled by, or is under common control
with, such Person. For purposes of this definition, control of a Person shall
mean the power to
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direct or cause the direction of the management and policies of such Person
whether by contract or otherwise.
"AGREEMENT" means this Agreement, as it may be amended, modified, or
supplemented and in effect from time to time.
"APPLICABLE COMMITMENT FEE" means the percentage in effect from time to
time as set forth in the following table opposite the highest of the
then-current rating assigned to the Company's senior unsecured long-term debt by
Moody's Investors Service, Inc. ("Moody's") or Standard & Poor's Ratings Group
("S&P"):
<TABLE>
<CAPTION>
Rating Applicable
(Moody's/S&P) Commitment Fee
------------- --------------
<S> <C>
higher than A1/A+ 0.060%
A1/A+ 0.070%
A2/A 0.080%
A3/A- 0.090%
Baa1/BBB+ 0.100%
Baa2/BBB 0.125%
Baa3/BBB- 0.150%
lower than Baa3/BBB- 0.175%
</TABLE>
"APPLICABLE MARGIN" means, at any time, the percentage set forth in the
following table opposite the highest of the then-current rating assigned to the
Company's senior unsecured long-term debt by Moody's or S&P:
<TABLE>
<CAPTION>
Applicable Applicable
Margin for Margin for
Rating Domestic CD Eurocurrency
(Moody's/S&P) Loans Loans
- -------------------------------------------------------------------------------
<S> <C> <C>
higher than A1/A+ 0.275% 0.175%
A1/A+ 0.300% 0.200%
A2/A 0.325% 0.225%
A3/A- 0.350% 0.250%
Baa1/BBB+ 0.400% 0.300%
Baa2/BBB 0.475% 0.375%
Baa3/BBB- 0.550% 0.450%
lower than Baa3/BBB- 0.600% 0.500%
</TABLE>
"ASSESSMENT RATE" means, for any Domestic CD Loan (and for the purpose of
computing the Domestic CD Rate (Adjusted)), the annual assessment rate (rounded
upwards, if necessary, to the nearest 1/100 of 1%) applicable to the Relevant
Bank on its insured deposits under the Federal Deposit Insurance Act, determined
by annualizing the most recent assessment levied on the Relevant
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Bank by the Federal Deposit Insurance Corporation (the "FDIC") with respect to
such deposits, after giving effect to the most recent rebate granted to the
Relevant Bank by the FDIC with respect to deposit insurance as well as the loss
to the Relevant Bank (determined in the good faith judgment of the Relevant
Bank) of the use of such rebate prior to the date credit is taken by the
Relevant Bank with respect to such rebate.
"ATTRIBUTABLE DEBT" means, as to any particular lease under which any
Person is liable at the time and at any date as of which the amount thereof is
to be determined, the lesser of (a) the fair value of the property subject to
such lease (as determined by the Directors of the Company) or (b) the total net
amount of rent required to be paid by such Person under such lease during the
remaining term thereof, discounted from the respective due dates thereof to such
date at the actual interest factor included in such rent. The net amount of rent
required to be paid under any such lease for any such period shall be the
aggregate amount of the rent payable by the lessee with respect to such period
after excluding amounts required to be paid on account of maintenance and
repairs, insurance, taxes, assessments, water rates and similar charges. In the
case of any lease which is terminable by the lessee upon the payment of a
penalty, such net amount shall also include the amount of such penalty, but no
rent shall be considered as required to be paid under such lease subsequent to
the first date upon which it may be so terminated.
"AUTHORIZED PERSON" means, as to the Company, any person designated as such
in a certificate signed by the Chief Financial Officer, Treasurer, or Assistant
Treasurer of the Company, and, as to any Designated Subsidiary, means any person
designated as such in a certificate signed by one or more officers of the
Designated Subsidiary, as authorized by resolution of the Designated Subsidiary
or otherwise by law.
"BANKS" or "BANK" - see Preamble.
"BASE RATE" means the higher of (i) the rate of interest per annum publicly
announced and in effect from time to time by the Relevant Bank at its Domestic
Office identified on the signature pages hereto as its prime, base or reference
rate for U.S. Dollar Loans or (ii) the Federal Funds Rate plus the Applicable
Margin for Eurocurrency Loans. The Base Rate shall change simultaneously with
each change in such announced prime, base or reference rate and Federal Funds
Rate, as applicable. The Base Rate may not be the lowest rate charged by the
Relevant Bank for commercial or other extensions of credit.
"BASE RATE LOAN" means any Loan of U.S. Dollars that bears interest at or
by reference to the Relevant Bank' s Base Rate.
"BUSINESS DAY" means (i) in the case of a Business Day that relates to a
Eurocurrency Loan, any day of the year on which banks are open for business in
both New York and, with regard to any such Bank only, the city in which the
applicable Eurocurrency Office of such Bank is located and on which dealings are
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<PAGE> 52
carried on in the interbank eurocurrency market; (ii) in the case of a Business
Day that relates to a Base Rate Loan, a Domestic CD Loan, or a Negotiated Loan,
any day of the year on which banks are open for business in both New York and,
with regard to any such Bank only, the city in which the applicable Domestic
Office of such Bank is located; and (iii) in the case of a Business Day that
relates to a Local Currency Loan, any day of the year on which the local office
of the Relevant Bank in that locality is open for business.
"COMMITMENT(S)" means the commitments of the Banks to make Loans hereunder;
and Commitment as to any Bank shall mean the commitment of such Bank to make
Loans hereunder in an aggregate amount not to exceed the U.S. Dollar amount set
forth opposite its signature hereto or any subsequent amendment hereto.
"COMPANY" - see Preamble.
"COMPLIANCE CERTIFICATE" - see Section 9.1.3 and Exhibit B.
"CONSOLIDATED FUNDED DEBT" means the Funded Debt of the Company and its
Consolidated Subsidiaries consolidated in accordance with GAAP.
"CONSOLIDATED NET TANGIBLE ASSETS" means the total of all assets of the
Company and its Consolidated Subsidiaries appearing on a consolidated balance
sheet prepared in accordance with GAAP, including the equity in and the net
amount of advances to other Subsidiaries, after deducting therefrom (without
duplication of deductions) as shown on such balance sheet, the sum of:
(i) intangible assets, including goodwill, cost of acquired businesses in
excess of recorded net assets at acquisition dates, patents,
licenses, trademarks, trade names, copyrights, unamortized debt
discount and expense less unamortized debt premium, and corporate
organization expense (but excluding deferred charges and prepaid
expense);
(ii) any write-up of the book value of any assets (other than equity in
Subsidiaries which are not Consolidated Subsidiaries and other than
as a result of currency revaluations) resulting from the revaluation
thereof subsequent to March 31, 1992;
(iii) all liabilities of the Company and its Consolidated Subsidiaries
other than: Funded Debt; capital stock; surplus; surplus reserves;
reserves for deferred Federal income taxes arising from accelerated
depreciation, investment and other tax credits, and similar
provisions; and contingency reserves not allocated for any particular
purpose;
(iv) reserves for depreciation and amortization and other reserves (other
than the reserves referred to in the preceding clause(iii) ); and
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<PAGE> 53
(v) any minority interest in the shares of stock and surplus of any
Consolidated Subsidiary.
"CONSOLIDATED NET WORTH" means at any date the sum of the consolidated
shareholders' investment and minority interests of the Company and its
Consolidated Subsidiaries determined as of such date. Consolidated shareholders'
investment and minority interests of the Company shall be as included in the
annual and quarterly financial statements of the Company, as applicable.
"CONSOLIDATED SUBSIDIARY" means each Subsidiary other than (a) any
Subsidiary the accounts of which (i) are not required by GAAP to be consolidated
with those of the Company for financial reporting purposes and (ii) were not
consolidated with those of the Company in the Company's then most recent Annual
Report to Shareholders and are not intended by the Company to be consolidated
with those of the Company in its next Annual Report to Shareholders, or (b) any
Subsidiary the primary business of which consists of financing the sale or lease
of merchandise, equipment or services by the Company or any Subsidiary or
owning, leasing, dealing in or developing real property, or providing services
directly related thereto, or which is otherwise primarily engaged in the
business of a finance or real estate company.
"CONTINUE," "CONTINUATION" AND "CONTINUED" shall refer to a continuation of
Loans pursuant to Section 1.5.
"CONVERT," "CONVERSION" AND "CONVERTED" shall refer to a conversion of
Loans pursuant to Sections 1.5, 3.3, 7.3, or 7.4.
"DEBT" - see SECTION 9.3.
"DESIGNATED SUBSIDIARY" means any Subsidiary of the Company which (i) the
Company from time to time designates in writing signed by the Chief Financial
Officer, Treasurer, or Assistant Treasurer of the Company as a Designated
Subsidiary entitled to receive Eurocurrency and Local Currency Loans hereunder
and (ii) the Relevant Bank has not objected in writing to such designation of a
Designated Subsidiary within thirty (30) days of the Relevant Bank's receipt of
the Company's designation. Such designation shall contain the address of the
Subsidiary which shall be used to give notice to the Subsidiary pursuant to
Section 14.3.
"DOMESTIC CD LOAN" shall mean any Loan of U. S. Dollars that bears
interest at a rate determined by reference to the Relevant Bank's Domestic CD
Rate (Adjusted).
"DOMESTIC CD RATE" means, with respect to any Interest Period for any
Domestic CD Loan, the rate of interest determined by the Relevant Bank to be the
average (rounded upward, if necessary, to the nearest 1/100 of 1%) of the rates
quoted to the Relevant Bank on the first day of such Interest Period by two
certificate of
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<PAGE> 54
deposit dealers in New York of recognized standing selected by the Relevant Bank
for the purchase from the Relevant Bank or major commercial banks at face value
of certificates of deposit issued by the Relevant Bank in an amount equal or
comparable to the amount of the Domestic CD Loan and having a maturity equal to
such Interest Period; provided, that, if such quotations from such dealers are
not available to the Relevant Bank, it shall determine a reasonably equivalent
rate on the basis of another source or sources selected by it.
"DOMESTIC CD RATE (ADJUSTED)" means, with respect to any Interest Period
for any Domestic CD Loan, a rate per annum (rounded upwards, if necessary, to
the nearest 1/100 of 1%) determined pursuant to the following formula:
Domestic CD
Domestic CD = Rate + Assessment
Rate (Adjusted) --------------- Rate
(1 - Reserve
Requirement)
"DOMESTIC OFFICE" means, with respect to any Bank, the office of such Bank
or Affiliate of such Bank, designated as such under such Bank's signature
hereto, or such other office of such Bank or Affiliate of such Bank, as such
Bank may hereafter from time to time designate as its Domestic Office.
"DOMESTIC SUBSIDIARY" means each Consolidated Subsidiary other than: (a)
any Consolidated Subsidiary which the Directors of the Company reasonably
determine not to be material to the business or financial condition of the
Company; (b) any Consolidated Subsidiary the major portion of the assets of
which are located, or the major portion of the business of which is carried on,
outside the United States of America, its territories and possessions; (c) any
Consolidated Subsidiary which, during the 12 most recent calendar months (or
such shorter period as shall have elapsed since its organization) derived the
major portion of its gross revenues from sources outside the United States of
America; (d) any Consolidated Subsidiary the major portion of the assets of
which consists of securities or obligations, or both, of one or more
corporations (whether or not Consolidated Subsidiaries) of the types described
in the preceding clauses (b) and (c); and (e) any Consolidated Subsidiary
organized after March 31, 1992 which the Company intends shall be operated in
such manner as to come within one or more of the preceding clauses (b), (c) and
(d).
"ELECTRONIC PAYMENT INSTRUCTIONS" means the Bank Routing and account number
information identifying the account of each Bank to receive the ACH payment of
Commitment Fees. Such Electronic Payment Instructions for each Bank are set
forth below the signature block of such Bank to the Amendment dated as of May 8,
1996 to the Agreement and may be changed at any time by written notice by such
Bank to the Company.
"EUROCURRENCY" means any freely transferable and convertible currency on
deposit outside the country of issuance.
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<PAGE> 55
"EUROCURRENCY LOAN" means any Loan of a Eurocurrency that bears interest at
a rate determined by reference to the Relevant Bank's Eurocurrency Rate (Reserve
Adjusted).
"EUROCURRENCY OFFICE" means, with respect to any Bank, the office of such
Bank or Affiliate of such Bank, designated as such under such Bank's signature
hereto, or such other office of such Bank or Affiliate of such Bank, as such
Bank may hereafter from time to time designate as its Eurocurrency Office. A
Eurocurrency Office may be, at the option of such Bank, either a domestic or
foreign office of such Bank or a domestic or foreign office of an affiliate of
such Bank.
"EUROCURRENCY OR LOCAL CURRENCY EQUIVALENT AMOUNT" means, in the case of a
Eurocurrency or Local Currency, on any Business Day, the amount of such currency
which would be freely converted into a specified amount of U.S. Dollars,
computed at the spot buying rate for dollars of the Relevant Bank at the close
of business on such day.
"EUROCURRENCY RATE" means, with respect to any Eurocurrency Loan for any
Interest Period, the rate per annum equal to the rate per annum at which
deposits of the currency of the Loan in immediately available funds are offered
by the Eurocurrency Office of the Relevant Bank two Business Days prior to the
beginning of such Interest Period to major banks in the interbank eurocurrency
market of such Eurocurrency Office for delivery on the first day of such
Interest Period and for the number of days comprised therein and in an amount
equal or comparable to the amount of the Eurocurrency Loan of the Relevant Bank
for such Interest Period.
"EUROCURRENCY RATE (RESERVE ADJUSTED)" means, with respect to any
Eurocurrency Loan for any Interest Period, a rate per annum (rounded upwards, if
necessary, to the nearest 1/100 of 1%) determined pursuant to the following
formula:
Eurocurrency Rate = Eurocurrency Rate
(Reserve Adjusted) -----------------
l-Eurocurrency Reserve
Percentage
"EUROCURRENCY RESERVE PERCENTAGE" means, with respect to each Interest
Period, that percentage (expressed as a decimal) prescribed by the Board of
Governors of the Federal Reserve System (or any successor) for determining
reserve requirements applicable to "Eurocurrency Liabilities" pursuant to
Regulation D or any other then applicable regulation of the Board of Governors
that prescribes reserve requirements applicable to "Eurocurrency Liabilities" as
presently defined in Regulation D.
"EVENT OF DEFAULT" means any of the events described in Section 11.1.
"EXEMPTED INDEBTEDNESS" means, as of any particular time, the sum of (i)
the aggregate principal amount of all then outstanding indebtedness for borrowed
money of the Company and Domestic Subsidiaries incurred after July 1, 1992 and
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<PAGE> 56
secured by any mortgage, security interest, pledge or lien other than those
permitted by paragraph (a) of Section 9.3 and (ii) all Attributable Debt
pursuant to Sale and Leaseback Transactions (as defined in Section 9.4) incurred
by the Company and Domestic Subsidiaries after July 1, 1992 at such time
outstanding other than that which is not prohibited by or is permitted pursuant
to paragraph (a) of Section 9.4.
"FEDERAL FUNDS RATE" means, for any Interest Period selected by the
Company, the average of rates for Federal funds for the Interest Period quoted
to the Relevant Bank by two leading brokers of Federal funds transactions in New
York City.
"FIXED RATE LOAN(S)" - see Section 1.3.
"FUNDED DEBT" means all indebtedness for money borrowed having a maturity
of more than 12 months from the date such indebtedness was incurred or having a
maturity of 12 months or less but by its terms being renewable or extendable
beyond 12 months from the date such indebtedness was incurred at the option of
the borrower.
"GAAP" means generally accepted accounting principles in the United States
of America as in effect from time to time.
"INTEREST PERIOD" means, with respect to any Fixed Rate Loan, the period
commencing on the date such Loan was made, or on the date such Loan was
Converted from a Loan of a different type, or on the date of expiration of the
immediately preceding Interest Period for such Loan, and (i) ending 30, 60, 90,
120, 150, 180 days, or, if available, more than 180 days up to and including 360
days, thereafter in the case of a Domestic CD Loan, or (ii) ending one, two,
three, or six months, or, if available, more than six months up to and including
twelve months, thereafter in the case of a Eurocurrency Loan, all as the Company
or any Designated Subsidiary may specify pursuant to Section 1.4, 1.5, or 3.3;
the Interest Period for any Negotiated Loan or any Local Currency Loan shall be
as agreed by the Company or any Designated Subsidiary and the Relevant Bank
pursuant to Section 1.6 or 1.7. Each Interest Period for a Fixed Rate Loan that
would otherwise end on a day that is not a Business Day shall end on the next
succeeding Business Day (unless such next succeeding Business Day is the first
Business Day of a calendar month, in which case with respect to a Eurocurrency
Loan such Interest Period shall end on the next preceding Business Day).
"JUDGMENT CURRENCY" - see Section 7.6.
"JUDGMENT CURRENCY CONVERSION DATE" - see Section 7.6.
"LIEN" or "MORTGAGE" - see Section 9.3.
"LOCAL CURRENCY" means, with respect to any Local Currency Loan, any legal
currency of the nation where the Local Currency Loan is being funded.
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<PAGE> 57
"LOCAL CURRENCY LOAN(S)" - see Section 1.7.
"LOANS" or "LOAN" - see Section 1.1.
"MAJORITY BANKS" means Banks having an aggregate Percentage of 66-2/3% or
more.
"NEGOTIATED LOAN(S)" - see Section 1.6.
"NOTE(S)" - see Section 2.2 and Exhibit A.
"OBLIGATION CURRENCY" - see Section 7.6.
"OUTSTANDING MAJORITY BANKS" means Banks having 66-2/3% or more of the
aggregate principal amount of Loans outstanding.
"PERCENTAGE" means as to any Bank the percentage of such Bank's share of
the total Commitments of all Banks.
"PERSON" shall mean an individual or a corporation, partnership, trust,
incorporated or unincorporated association, joint venture, joint stock company,
government (or any agency or political subdivision thereof), or other entity of
any kind.
"PRINCIPAL PROPERTY" means any single manufacturing plant, engineering
facility or research facility owned or leased by the Company or a Domestic
Subsidiary other than any such plant or facility or portion thereof which the
Board of Directors reasonably determines not to be of material importance to the
Company and its Subsidiaries taken as a whole.
"PROPRIETARY INFORMATION" - see Section 14.5.
"RELEVANT BANK" means, with respect to any Loan, the Bank that made the
Loan, and, prior to the making of such Loan or requested Loan, any Bank that has
been requested to make such Loan.
"RESERVE REQUIREMENT" means, with respect to each Interest Period, a
percentage (expressed as a decimal) equal to the daily average during such
Interest Period of the aggregate reserve requirement (including all basic,
supplemental, marginal, and other reserves and taking into account any
transitional adjustments or other scheduled changes in reserve requirements
during such Interest Period) specified under Regulation D of the Board of
Governors of the Federal Reserve System, or any other regulation of the Board of
Governors which prescribes reserve requirements applicable to nonpersonal time
deposits as presently defined in Regulation D, as then in effect, as applicable
to the class of banks of which the Relevant Bank is a member, on deposits of the
type used as a reference in determining the Domestic CD Rate and having a
maturity approximately equal to such Interest Period.
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<PAGE> 58
"SALE AND LEASEBACK TRANSACTION" - see Section 9.4.
"SUBSIDIARY" means a corporation of which the Company and/or its other
Subsidiaries own, directly or indirectly, such number of outstanding shares as
have more than 50% of the ordinary voting power for the election of directors.
"TERMINATION DATE" means the earlier to occur of (a) July 1, 2001, subject
to extension for one or more successive one-year periods as to any Bank or Banks
pursuant to Section 1.2, or (b) such other date on which the Commitments shall
terminate pursuant to Section 11.2.
"TYPE OF LOAN OR BORROWING" - see Section 1.3. The various types of Loans
or borrowings available under this Agreement are as follows: Base Rate Loans or
borrowings and Fixed Rate Loans or borrowings. Fixed Rate Loans or borrowings
consist of Domestic CD Loans or borrowings, Eurocurrency Loans or borrowings,
Negotiated Loans or borrowings, and Local Currency Loans or borrowings.
"U.S. DOLLAR(S)" and the sign "$" shall mean lawful money of the United
States of America.
"UNMATURED EVENT OF DEFAULT" means any event that if it continues uncured
will, with lapse of time or notice or lapse of time and notice, constitute an
Event of Default.
"UNUSED AMOUNT" means the amount of the Commitment of the Relevant Bank
less any outstanding Loans made by such Bank. Loans in an Obligation Currency
other than U.S. Dollars will be translated into U.S. Dollars for purposes of
this calculation at the spot rate for dollars published in THE WALL STREET
JOURNAL on each day in which such Loan is outstanding (provided, that if such
day is not a Business Day, the applicable spot rate for such day should be the
spot rate on the Business Day immediately prior to such day).
"WHOLLY OWNED DOMESTIC SUBSIDIARY" means each Domestic Subsidiary all the
outstanding shares of which, other than directors' qualifying shares, shall at
the time be owned by the Company, or by the Company and one or more Wholly Owned
Domestic Subsidiaries, or by one or more Wholly Owned Domestic Subsidiaries.
SECTION 14 GENERAL.
14.1 WAIVER; AMENDMENTS. No delay on the part of any Bank or the holder of
any Note in the exercise of any right, power, or remedy shall operate as a
waiver thereof, nor shall any single or partial exercise by any of them of any
right, power, or remedy preclude other or further exercise thereof, or the
exercise of any other right, power, or remedy. No amendment, modification, or
waiver of, or consent with respect to, any provision of this Agreement or the
Notes shall in any event be
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<PAGE> 59
effective unless the same shall be in writing and signed and delivered by Banks
having an aggregate Percentage of not less than the aggregate Percentage
expressly designated herein with respect thereto (or in the case of the
Outstanding Majority Banks, the aggregate principal amount outstanding) or, in
the absence of such designation as to any provision of this Agreement or the
Notes, by the Majority Banks, and then any such amendment, modification, waiver,
or consent shall be effective only in the specific instance and for the specific
purpose for which given. No amendment, modification, waiver, or consent (i)
shall extend or increase the amount of the Commitments, the maturity of the
Notes or reduce the fees hereunder or the rate of interest payable with respect
to the Notes or reduce the aggregate Percentage required to effect an amendment,
modification, waiver, or consent or eliminate the guaranty set forth in Section
12 hereof without the written consent of all of the Banks or (ii) shall extend
the maturity or reduce the principal amount of, or rate of interest on, any Note
without the written consent of the holder of such Note. Notwithstanding the
foregoing, the Company may add one or more financial institutions as Bank
parties to this Agreement, from time to time and without the consent of the
then-current Bank parties to this Agreement; provided, that in no event will the
aggregate amount of the Commitments of the new financial institutions exceed 125
million U.S. Dollars in excess of the Commitments as of the date hereof. Each
such addition of a Bank shall be effective upon such Bank's written agreement to
become a Bank party hereto and to be bound by the terms of this Agreement
applicable to "Banks." The Company shall give the then-current Bank parties to
this Agreement prompt notice of any change to the Bank's respective Percentages
and Commitments resulting from the addition of any Bank as a party to, or the
reduction of any Bank's Commitment under, this Agreement.
14.2 CONFIRMATIONS. The Company and each holder of a Loan agree from time
to time, upon written request received by it from the other, to confirm to the
other in writing the aggregate unpaid principal amount of Loans then outstanding
to such holder.
14.3 NOTICES. Except as otherwise provided in Sections 1.3, 1.4, 1.5, 3.3,
and 6.2, all notices hereunder shall be in writing. Notices given by mail shall
be deemed to have been given three days after the date sent if sent by
registered or certified mail, postage prepaid, and:
(i) if to the Company, addressed to the Company at its address shown
below its signature hereto;
(ii) if to any Designated Subsidiary, addressed to it at the address given
by the Company pursuant to its designation of such Subsidiary as a
Designated Subsidiary entitled to receive Loans hereunder; or
(iii) if to any Bank, addressed to such Bank at the address shown below its
signature as its Domestic Office address; or
in the case of each party, such other address as such party may, by written
notice to the other parties to this Agreement, have designated as its address
for notices.
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<PAGE> 60
Notices given by facsimile, telegram, or telex shall be deemed to have been
given when sent, if properly addressed to the party to whom sent, at its
address, as aforesaid.
Each Bank shall be entitled to rely upon all telephonic notices given by an
Authorized Person pursuant to Sections 1.3, 1.4, 1.5, 3.3, or 6.2, and the
Company shall hold each Bank harmless from any loss, cost, or expense ensuing
from any such reliance, except for such loss, cost or expenses as a result of
the Bank's gross negligence or willful misconduct. All notices, waivers, or
consents given to, or any requests made upon, the Company by any Bank or holder
of any Note shall be promptly notified to all other parties to this Agreement.
Whenever a notice, declaration, or other action is required to be taken, given,
or made by the Majority Banks or the Outstanding Majority Banks, such notice,
declaration, or action shall be in writing and shall be signed by, as the case
may be, Banks having an aggregate Percentage of 66-2/3% or more or Banks having
66-2/3% or more of the aggregate principal amount of Loans outstanding.
14.4 COMPUTATIONS. Where the character or amount of any asset or liability
or item of income or expense is required to be determined, or any consolidation
or other accounting computation is required to be made, for the purpose of this
Agreement, such determination or calculation shall, to the extent applicable and
except as otherwise specified in this Agreement, be made in accordance with the
Company's then current method of accounting, which method must be in accordance
with GAAP; provided, however, if any changes in accounting principles from those
used in the preparation of the financial statements referred to in Section 8.4
hereafter occasioned by the promulgation of rules, regulations, pronouncements,
and opinions by or required by the Financial Accounting Standards Board or the
American Institute of Certified Public Accountants (or successors thereto or
agencies with similar functions) result in a change in the method of calculation
of the financial covenants, standards, or terms found in Section 9.2 hereof, the
parties hereto agree to enter into negotiations to amend such provisions so as
equitably to reflect such changes with the desired result that the criteria for
evaluating the Company's financial condition shall be the same after such
changes as if such changes had not been made.
14.5 CONFIDENTIALITY. Unless the Company otherwise agrees in writing, each
Bank hereby agrees to keep all Proprietary Information (as defined below)
confidential and not to disclose or reveal any Proprietary Information to any
Person other than the Bank's directors, officers, employees, Affiliates, and
agents, and then only on a confidential basis; provided, however, that a Bank
may disclose Proprietary Information (a) as required by law, rule, regulation,
or judicial process, (b) to its attorneys and accountants, (c) as requested or
required by any state, federal, or foreign authority or examiner regulating
banks or banking, or (d) to actual or potential assignees or participants as
permitted by Section 14.6.3. For purposes of this Agreement, the term
"Proprietary Information" shall include all information about the Company, any
Subsidiary, or any of their respective Affiliates which has been furnished by
the Company, any Subsidiary, or any of their respective Affiliates, whether
furnished before or after the date hereof, and
-32-
<PAGE> 61
regardless of the manner furnished; provided, however, that Proprietary
Information shall not include information which (x) is or becomes generally
available to the public other than as a result of a disclosure by a Bank not
permitted by this Agreement, (y) was available to a Bank on a nonconfidential
basis prior to its disclosure to such Bank by the Company, any Subsidiary, or
any of their respective Affiliates, or (z) becomes available to a Bank on a
nonconfidential basis from a Person other than the Company, any Subsidiary, or
any of their respective Affiliates who, to the best knowledge of such Bank, is
not otherwise bound by a confidentiality agreement with the Company, any
Subsidiary, or any of their respective Affiliates, or, to the best knowledge of
such Bank, is not otherwise prohibited from transmitting the information to such
Bank.
14.6 Assignments and Participations.
------------------------------
14.6.1 ASSIGNMENTS. Unless the Company otherwise consents in
writing, which consent shall not be unreasonably withheld, no holder of any
Note (including any Bank) shall assign or transfer such Note or any
interest therein to any other Person, except as otherwise permitted under
Section 14.6. Except as otherwise expressly agreed in writing by the
Company, no Bank shall, by reason of the assignment or transfer of any Note
or otherwise, be relieved of any of its obligations hereunder. Each
transferee of any Note shall take such Note subject to the provisions of
this Agreement and to any request made, waiver or consent given, or other
action taken hereunder, prior to such transfer, by each previous holder of
such Note; and the Company shall be entitled to conclusively assume that
the transferee shall thereafter be vested with all rights and powers under
this Agreement of the Bank named as the payee of the Note which is the
subject of such transfer. Nothing herein shall prohibit any Bank from
pledging or assigning any Note to any Federal Reserve Bank pursuant to
applicable law.
14.6.2 PARTICIPATIONS. Any Bank may grant participations in or to
all or any part of any Loan or Loans then owing to such Bank and the Notes
held by such Bank without the consent of the Company. Except as otherwise
expressly agreed in writing by the Company, no grant of a participation
shall relieve any Bank of its obligations hereunder, the Company shall be
entitled to deal solely with the Banks (and their respective assignees) for
all purposes of this Agreement and the Notes, and no holder of a
participation in all or any part of the Loans or the Notes shall have any
rights under this Agreement, except that the holder of a participation
shall be entitled to the benefits of Section 7 hereunder (but the dollar
amount of such Section 7 benefits shall not exceed those benefits that the
assigning Bank would have otherwise received).
14.6.3 DISCLOSURE OF INFORMATION. The Company hereby consents to
the disclosure of any information obtained in connection herewith by any
Bank to any Person which is an assignee or potential assignee or a
participant or potential participant pursuant to Section 14.6.1 or 14.6.2,
it being understood that such Bank shall advise any such actual or
potential assignee or participant of its obligation to keep confidential
any nonpublic information disclosed to it
-33-
<PAGE> 62
pursuant to this Section 14.6.3 and, prior to the disclosure of such
information, shall cause each such actual or potential assignee or
participant to execute a confidentiality agreement containing the
confidentiality provisions set forth in Section 14.5.
14.7 SECURITIES LAWS. Each Bank represents that it is the present intention
of such Bank to acquire each Note drawn to its order for its own account and not
with a view to the distribution or sale thereof, subject, nevertheless, to the
necessity that such Bank remain in control at all times of the disposition of
the property held by it for its own account, it being understood that the
foregoing representation shall not affect the character of the Loans as
commercial lending transactions.
14.8 COSTS AND EXPENSES. The Company agrees to pay on demand all reasonable
out-of-pocket costs and expenses of the Banks (including the reasonable fees and
out-of-pocket expenses of counsel for the Banks and reasonable allocated costs
of in-house counsel for the Banks) in connection with the enforcement of this
Agreement, the Notes, and any other instruments or documents executed in
connection herewith.
14.9 GOVERNING LAW. This Agreement and each Note shall be a contract made
under and governed by the internal laws of the State of Ohio. Wherever possible
each provision of this Agreement shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of this Agreement
shall be prohibited by or invalid under such law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Agreement. All obligations of the Company and rights of the Banks and any other
holders of the Notes expressed herein or in the Notes shall be in addition to
and not in limitation of those provided by applicable law.
14.10 COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the different parties on separate counterparts and each such
counterpart shall be deemed to be an original, but all such counterparts shall
together constitute but one and the same Agreement. When counterparts executed
by all the parties shall have been lodged with the Company (or, in the case of
any Bank as to which an executed counterpart shall not have been so lodged, the
Company shall have received telegraphic, telex, or other written confirmation
from such Bank of execution of a counterpart hereof by such Bank), this
Agreement shall become effective as of the date hereof.
14.11 CAPTIONS. Section captions used in this Agreement are for convenience
only, and shall not affect the construction of this Agreement.
14.12 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon the
Company, each Bank, and their respective successors and assigns, and shall inure
to the sole benefit of the Company, each Bank, and their respective successors
and assigns.
-34-
<PAGE> 63
14.13 ENTIRE AGREEMENT. This Agreement supersedes any prior agreement or
understanding of the parties hereto, and contains the entire agreement of the
parties hereto, with respect to the matters covered hereby.
14.14 APPOINTMENT OF ADMINISTRATOR. TRW hereby appoints National City Bank
to serve as administrator (the "Administrator") to coordinate any votes that may
be taken under this Agreement and to distribute payments, if any, required to be
made to the Banks on a pro rata basis as provided in Section 11.2. In the event
that National City Bank is unable or unwilling to act as Administrator, TRW
shall appoint a successor, subject to the approval of the Majority Banks, which
shall not be unreasonably withheld. Except as otherwise specifically provided
herein, borrowing, repayment and fee procedures set forth in this Agreement
shall not be affected by the appointment of the Administrator.
14.15 NON-U.S. BANK TAX INFORMATION. Upon the request of the Company, any
Bank that is not organized under the laws of the United States of America or any
state thereof will (i) deliver to the Company accurate and complete signed
copies of Forms 1001 and 4224 (or such additional or successor forms) and any
amendments or modifications thereto and (ii) inform the Company if the Company
can no longer rely upon such forms.
14.16 REGULATION U. The Company hereby represents and warrants that neither
the Company nor any of its Consolidated Subsidiaries is principally engaged in
the business of extending credit for the purpose of purchasing or carrying
margin stock (within the meaning of Regulation U issued by the Board of
Governors of the Federal Reserve System) and covenants that the Company's use of
proceeds of any borrowings under this Agreement will not cause a violation of
Regulation U. Each of the Banks hereby represents and warrants to the Company
that it is not relying and will not rely on any margin stock (as described
above) in determining whether to extend or maintain credit under this Agreement.
-35-
<PAGE> 64
SIGNATURE PAGES TO MULTI-YEAR REVOLVING CREDIT AGREEMENT, DATED AS OF
---------------------------------------------------------------------
JULY 1, 1992, AS AMENDED PURSUANT TO AGREEMENTS DATED AS OF JUNE 30,
--------------------------------------------------------------------
1993, MARCH 1, 1994 AND FEBRUARY 28, 1995 AND AS AMENDED AND RESTATED
---------------------------------------------------------------------
AS OF MAY 8, 1996
-----------------
Delivered at Cleveland, Ohio, as of the day and year first above written.
TRW INC.
/s/ William C. Seeger Jr.
By William C. Seeger Jr.
Vice President and Treasurer
1900 Richmond Road
Cleveland, Ohio 44124
Telephone: 216/291-7540
Facsimile: 216/291-7831
-36-
<PAGE> 65
BANKS:
Amount of Percentage of
Commitment Commitments
- ---------- -----------
$60,000,000 8 % Bank of America National Trust
----- and Savings Association
By Deborah Graziano
Title: Vice President
DOMESTIC OFFICE
Bank of America NT & SA
1850 Gateway Boulevard
Concord, California 94520
Telephone: (510) 675-7485
Facsimile: (510) 675-7531
Attention: Selina Button
EUROCURRENCY OFFICE
Bank of America NT & SA
1850 Gateway Boulevard
Concord, California 94520
Telephone: (510) 675-7485
Facsimile: (510) 675-7531
Attention: Selina Button
ELECTRONIC PAYMENT INSTRUCTIONS
Receiving Bank: Bank of America
ABA Routing No.: 121000358
Account No.: 12331-83980
Account Name: Incoming Money Transfer
Reference No.: TRW Commitment Fee
-37-
<PAGE> 66
Amount of Percentage of
Commitment Commitments
- ---------- -----------
$60,000,000 8 % Barclays Bank PLC
-----
By
DOMESTIC OFFICE
Barclays Bank PLC
222 Broadway
New York, New York 10038
Telephone: _____________
Facsimile: _____________
EUROCURRENCY OFFICE
Barclays Nassau, Bahamas Branch
c/o Barclays Bank PLC
222 Broadway
New York, New York 10038
Telephone: _____________
Facsimile: _____________
ELECTRONIC PAYMENT INSTRUCTIONS
Receiving Bank: Barclays Bank PLC-New York
ABA Routing No.: 026-002-574
Account No.: 050-019-104
Account Name: TRW
Reference No.: TRW Commitment Fee;
N. SANGLE
-38-
<PAGE> 67
Amount of Percentage of
Commitment Commitments
- ---------- -----------
$60,000,000 8 % The Chase Manhattan Bank, N.A.
-----
By
DOMESTIC OFFICE
The Chase Manhattan Bank, N.A.
One Chase Manhattan Plaza
Fifth Floor
New York, New York 10081
Telephone: _____________
Facsimile: _____________
EUROCURRENCY OFFICE
The Chase Manhattan Bank, N.A.
One Chase Manhattan Plaza
Fifth Floor
New York, New York 10081
Telephone: _____________
Facsimile: _____________
ELECTRONIC PAYMENT INSTRUCTIONS
Receiving Bank: Chase Manhattan Bank
ABA Routing No.: 021-000021
Account No.: 900-9-000036
Account Name: Commercial Loan Opns.
Reference No.: TRW Commitment Fee
-39-
<PAGE> 68
Amount of Percentage of
Commitment Commitments
- ---------- -----------
$60,000,000 8 % Citibank, N.A.
-----
By
DOMESTIC OFFICE
Citibank, N.A.
c/o Citicorp Securities, Inc.
200 S. Wacker Dr.
Chicago, IL 60606
Telephone: 312-993-3871
Facsimile: 312-993-6840
EUROCURRENCY OFFICE
Citibank, N.A.
c/o Citicorp Securities, Inc.
200 S. Wacker Dr.
Chicago, IL 60606
Telephone: 312-993-3871
Facsimile: 312-993-6840
ELECTRONIC PAYMENT INSTRUCTIONS
Receiving Bank: Citibank, N.A., New York
ABA Routing No.: 021000089
Account No.: 38483095
Account Name: Chicago NEO Loan Acct.
Reference No.: TRW Commitment Fee
-40-
<PAGE> 69
Amount of Percentage of
Commitment Commitments
- ---------- -----------
$60,000,000 8 % Morgan Guaranty Trust Company
----- of New York
By
DOMESTIC OFFICE
Morgan Guaranty Trust Company
of New York
60 Wall Street
New York, New York 10260-0060
Telephone: _____________
Facsimile: _____________
EUROCURRENCY OFFICE
Morgan Guaranty Trust Company
of New York
Nassau, Bahamas Office
c/o J.P. Morgan Services Inc.
Euro-Loan Servicing Unit
902 Market Street
Wilmington, Delaware 19801
Telephone: _____________
Facsimile: _____________
ELECTRONIC PAYMENT INSTRUCTIONS
Receiving Bank: Morgan Guaranty Trust
ABA Routing No.: 021000238
Account No.: 999-99-090
Account Name: _____________
Reference No.: TRW Com. Fee
Corp. Proc. Module 30
-41-
<PAGE> 70
Amount of Percentage of
Commitment Commitments
$60,000,000 8 % National City Bank
-----
By
DOMESTIC OFFICE
National City Bank
National City Center
P. O. Box 5756
Cleveland, Ohio 44101-0756
Telephone: _____________
Facsimile: _____________
EUROCURRENCY OFFICE
National City Bank
National City Center
P. O. Box 5756
Cleveland, Ohio 44101-0756
Telephone: _____________
Facsimile: _____________
ELECTRONIC PAYMENT INSTRUCTIONS
Receiving Bank: National City Bank
ABA Routing No.: 041000124
Account No.: 2537557
Account Name: _____________
Reference No.: TRW Commitment Fee
-42-
<PAGE> 71
Amount of Percentage of
Commitment Commitments
- ---------- -----------
$60,000,000 8 % The Sumitomo Bank, Limited
-----
By
DOMESTIC OFFICE
The Sumitomo Bank, Limited
Chicago Branch
Sears Tower
233 South Wacker Drive, Suite 4800
Chicago, Illinois 60606-6448
Telephone: (312) 876-6431
Facsimile: (312) 876-6436
EUROCURRENCY OFFICE
The Sumitomo Bank, Limited
Chicago Branch
Sears Tower
233 South Wacker Drive, Suite 4800
Chicago, Illinois 60606-6448
Telephone: (312) 876-6431
Facsimile: (312) 876-6436
ELECTRONIC PAYMENT INSTRUCTIONS
Receiving Bank: FNB of Chicago
ABA Routing No.: 071000013
Account No.: 15-01208
Account Name: Sumitomo Bank Ltd,
Chicago Branch
Reference No.: TRW Commitment Fee
-43-
<PAGE> 72
Amount of Percentage of
Commitment Commitments
- ---------- -------------
$45,000,000 6 % Banque Nationale de Paris
-----
By
DOMESTIC OFFICE
Banque Nationale de Paris
Chicago Branch
Rookery Building
209 South LaSalle, 5th Floor
Chicago, Illinois 60604
Telephone: (312) 977-2200
Facsimile: (312) 977-1380
EUROCURRENCY OFFICE
Banque Nationale de Paris
Chicago Branch
Rookery Building
209 South LaSalle, 5th Floor
Chicago, Illinois 60604
Telephone: (312) 977-2200
Facsimile: (312) 977-1380
ELECTRONIC PAYMENT INSTRUCTIONS
Receiving Bank: Banque Nationale de
Paris,
New York Branch
ABA Routing No.: 026007689
Account No.: 14119400189
Account Name: BNP, Chicago Branch
Reference No.: TRW Commitment Fee
-44-
<PAGE> 73
Amount of Percentage of
Commitment Commitments
- ---------- -----------
$45,000,000 6 % Dresdner Bank AG
-----
By
By
DOMESTIC OFFICE
Dresdner Bank AG New York Branch
75 Wall Street
New York, New York 10005
Telephone: (212) 429-2244
Facsimile: (212) 429-2524
EUROCURRENCY OFFICE
Dresdner Bank AG Grand Cayman Branch
c/o Dresdner Bank AG New York Branch
75 Wall Street
New York, New York 10005
Telephone: (212) 429-2244
Facsimile: (212) 429-2524
ELECTRONIC PAYMENT INSTRUCTIONS
Receiving Bank: Chase Manhattan (NY,NY)
ABA Routing No.: 021-000-021
Account No.: 920-1-059-079
Account Name: Dresdner Bank AG,
New York Branch
Reference No.: TRW Commitment Fee
-45-
<PAGE> 74
Amount of Percentage of
Commitment Commitments
- ---------- -----------
$45,000,000 6 % NBD Bank
-----
By Andrew W. Strait
Title: Vice President
DOMESTIC OFFICE
NBD Bank
Attention: Mid-Corporate Banking
611 Woodward
Detroit, Michigan 48226
Telephone: (313) 225-3300
Facsimile: (313) 225-3269
EUROCURRENCY OFFICE
NBD Bank, N.A.
Attention: Mid-Corporate Banking
611 Woodward
Detroit, Michigan 48226
Telephone: (313) 225-3300
Facsimile: (313) 225-3269
ELECTRONIC PAYMENT INSTRUCTIONS
Receiving Bank: NBD Bank
ABA Routing No.: 072000326
Account No.: 1424183
Account Name: Commercial Loans
Reference No.: TRW Commitment Fee
-46-
<PAGE> 75
Amount of Percentage of
Commitment Commitments
$45,000,000 6 % Royal Bank of Canada
-----
By Patrick Shields
Title: Manager, Corporate Banking
DOMESTIC OFFICE
Royal Bank of Canada
New York Branch
c/o Financial Square, 23rd Floor
New York, New York 10005
Telephone: (212) 428-6323
Facsimile: (212) 428-2372
EUROCURRENCY OFFICE
Royal Bank of Canada
New York Branch
c/o Financial Square, 23rd Floor
New York, New York 10005
Telephone: (212) 428-6323
Facsimile: (212) 428-2372
ELECTRONIC PAYMENT INSTRUCTIONS
Receiving Bank: Chase Manhattan, NY
ABA Routing No.: 021000021
Account No.: 9201033363
Account Name: Royal Bank
Reference No.: TRW Commitment Fee
-47-
<PAGE> 76
Amount of Percentage of
Commitment Commitments
$30,000,000 4 % The Sakura Bank, Limited
-----
By
DOMESTIC OFFICE
The Sakura Bank, Limited
Chicago Branch
227 West Monroe Street
Suite 4700
Chicago, Illinois 60606
Telephone: (312) 580-3276
Facsimile: (312) 332-5345
EUROCURRENCY OFFICE
The Sakura Bank, Limited
Chicago Branch
227 West Monroe Street
Suite 4700
Chicago, Illinois 60606
Telephone: (312) 580-3276
Facsimile: (312) 332-5345
ELECTRONIC PAYMENT INSTRUCTIONS
Receiving Bank: FNB of Chicago
ABA Routing No.: 071000013
Account No.: 1512951
Account Name: Sakura Bank, Chicago
Reference No.: TRW Commitment Fee
-48-
<PAGE> 77
Amount of Percentage of
Commitment Commitments
- ---------- -----------
$30,000,000 4 % Society National Bank
-----
By
DOMESTIC OFFICE
Society National Bank
127 Public Square
Cleveland, Ohio 44114
Telephone: _____________
Facsimile: _____________
EUROCURRENCY OFFICE
Society National Bank
127 Public Square
Cleveland, Ohio 44114
Telephone: _____________
Facsimile: _____________
ELECTRONIC PAYMENT INSTRUCTIONS
Receiving Bank: Society National Bank
ABA Routing No.: 041001039
Account No.: 00100-39140
Account Name: Commercial Loan Opns
Reference No.: TRW Commitment Fee
-49-
<PAGE> 78
Amount of Percentage of
Commitment Commitments
- ---------- -----------
$30,000,000 4 % The Tokai Bank, Limited
-----
By
DOMESTIC OFFICE
The Tokai Bank, Limited
Chicago Branch
Attention: Corporate Finance
181 West Madison Street, Suite 3600
Chicago, Illinois 60602
Telephone: _____________
Facsimile: _____________
EUROCURRENCY OFFICE
The Tokai Bank, Limited
Chicago Branch
Attention: Corporate Finance
181 West Madison Street, Suite 3600
Chicago, Illinois 60602
Telephone: _____________
Facsimile: _____________
ELECTRONIC PAYMENT INSTRUCTIONS
Receiving Bank: FNB of Chicago
ABA Routing No.: 071000013
Account No.: 15-08997
Account Name: Tokai Bank, Chicago Branch
Reference No.: TRW Commitment Fee
Loan Administration
-50-
<PAGE> 79
Amount of Percentage of
Commitment Commitments
- ---------- -----------
$30,000,000 4 % Union Bank of Switzerland
-----
By
DOMESTIC OFFICE
Union Bank of Switzerland
Chicago Branch
30 South Wacker Drive, Suite 40
Chicago, Illinois 60606
Telephone: _____________
Facsimile: _____________
EUROCURRENCY OFFICE
Union Bank of Switzerland
Chicago Branch
30 South Wacker Drive, Suite 40
Chicago, Illinois 60606
Telephone: _____________
Facsimile: _____________
ELECTRONIC PAYMENT INSTRUCTIONS
Receiving Bank: FNB of Chicago
ABA Routing No.: 071000013
Account No.: 15-12188
Account Name: UBS, Chicago Branch
Reference No.: TRW Commitment Fee
-51-
<PAGE> 80
Amount of Percentage of
Commitment Commitments
- ---------- -----------
$30,000,000 4 % Wells Fargo Bank, N.A.
-----
By
By
DOMESTIC OFFICE
Wells Fargo Bank, N.A.
Special Loan Processing
18700 NW Walker Road, Bldg. 92
Beaverton, OR 97006
Telephone: (503) 614-6436
Facsimile: (503) 614-5878
EUROCURRENCY OFFICE
Wells Fargo Bank, N.A.
Special Loan Processing
18700 NW Walker Road, Bldg. 92
Beaverton, OR 97006
Telephone: (503) 614-6436
Facsimile: (503) 614-5878
ELECTRONIC PAYMENT INSTRUCTIONS
Receiving Bank: First Interstate Bank of California
ABA Routing No.: 122000218
Account No.: 3030-98989
Account Name: Special Loan Processing
Reference No.: TRW
- ------------ ----
$750,000,000 100% Total
-52-
<PAGE> 81
EXHIBIT A
to
Multi-Year Revolving
Credit Agreement
REVOLVING NOTE
Up to a maximum of
$---------------
(or the Eurocurrency or Dated: _____________, 1996
Local Currency equivalent Cleveland, Ohio
hereof)
FOR VALUE RECEIVED, the undersigned hereby promises to pay to the order
of ___________________ (the "Bank") for the account of its Domestic or
Eurocurrency Office, as applicable (capitalized terms used herein but not
otherwise defined herein shall have the meanings assigned to such terms in the
Credit Agreement referred to below), the outstanding principal amount of the
Loans made by the Bank to the undersigned pursuant to the Credit Agreement. The
principal amount of each Loan evidenced hereby shall be payable on the earliest
of (i) the Termination Date, (ii) the end of the Interest Period with respect to
such Loan (unless such Loan is Continued or Converted) or (iii) such other date
as the Company and the Relevant Bank may agree in writing.
The undersigned promises to pay interest on the unpaid principal amount
of each Loan evidenced hereby from the date such Loan is made until the
principal amount of such Loan is paid in full, at such interest rates, and
payable at such times, as are specified in the Credit Agreement.
Both principal of, and interest on, any Loan are payable in immediately
available funds in the currency of such Loan to the Bank at its Domestic or
Eurodollar Office that made the Loan. The Loans made by the Bank to the
undersigned, and all payments made on account of principal thereof, shall be
recorded by the Bank and, prior to any transfer hereof, endorsed on the grid
attached hereto which is part of this Note.
This Note is one of the Notes referred to in, and is entitled to the
benefits of, the Multi-Year Revolving Credit Agreement dated as of July 1, 1992,
as amended and restated as of May 8, 1996, among the undersigned, the Bank, and
the other bank parties named therein, as Banks (as the same may be amended,
modified, or supplemented and in effect from time to time, the "Credit
Agreement"). The Credit Agreement, among other things, (i) provides for the
making of Loans by the Bank to the undersigned from time to time in an aggregate
principal amount not to exceed at any time the dollar amount first mentioned
above and the indebtedness of the undersigned resulting from each such Loan
being evidenced by this Note, and (ii)
<PAGE> 82
contains provisions for acceleration of the maturity hereof upon the happening
of certain stated events and also for payments on account of the principal
hereof prior to the maturity hereof upon the terms and conditions and in
accordance with the provisions therein specified. Reference is hereby made to
the Credit Agreement for a statement of said terms and provisions.
In addition to, and not in limitation of, the foregoing and the
provisions of the Credit Agreement hereinabove referred to, the undersigned
further agrees, subject only to any limitation imposed by applicable law, to pay
all expenses, including reasonable attorneys' fees and expenses, incurred by the
holder of this Note in seeking to collect any amounts payable hereunder which
are not paid when due, whether by acceleration or otherwise.
DEMAND, PRESENTMENT, PROTEST, AND NOTICE OF NON-PAYMENT ARE HEREBY
WAIVED BY THE UNDERSIGNED.
THIS PROMISSORY NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE INTERNAL LAWS (AS OPPOSED TO CONFLICT OF
LAWS PROVISIONS) OF THE STATE OF OHIO.
TRW INC.
By:
-----------------------------
William C. Seeger Jr.
Vice President and Treasurer
<PAGE> 83
Schedule Attached to Revolving Note dated ___________, 1996 of TRW Inc. payable
to the order of ____________________________________
BASE RATE BORROWINGS
Unpaid
Date and Date and Amount Principal
Amount of of Repayment Balance of
Base Rate of Base Rate Base Rate Notation
Borrowing Borrowing Borrowings Made by
- --------- --------- ---------- -------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 84
Schedule Attached to Revolving Note dated _______________, 1996 of TRW Inc.
payable to the order of _____________________________________________________
FIXED RATE BORROWINGS
Date, Amount, Date and Unpaid
and Type of Interest Amount of Principal Notation
Borrowing Period Repayment Balance Made by
- --------- ------ --------- ------- -------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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<PAGE> 85
EXHIBlT B
to
Multi-Year Revolving
Credit Agreement
COMPLIANCE CERTIFICATE
To: Each of the Bank Parties to the Credit Agreement referred to below
Reference is made to our Multi-Year Revolving Credit Agreement dated as
of July 1, 1992, as amended and restated as of May 8, 1996 (herein as amended,
modified or supplemented and in effect from time to time called the "CREDIT
AGREEMENT") with you. Terms used but not otherwise defined herein are used
herein as defined in the Credit Agreement.
The Company hereby certifies and warrants to you that the following is
a true and correct computation as at ______________19__ (the "Computation Date")
of Consolidated Net Worth contained in Section 9.2 of the Credit Agreement:
<TABLE>
<CAPTION>
Minimum Consolidated Net Worth
- ------------------------------
Required Under Section 3.2
--------------------------
<S> <C> <C>
$1,600,000,000
LESS: The lesser of (i) the aggregate amount
expended by the Company subsequent
to December 31, 1995 for repurchase of
its Common Stock and (ii) $600,000,000 $
------------------- $
-------------
CONSOLIDATED NET WORTH
OF THE COMPANY
Consolidated shareholders'
investment $
-------------------
PLUS: Minority interests $
------------------- $
--------------
</TABLE>
The Company hereby further certifies and warrants to you that no Event
of Default or Unmatured Event of Default has occurred and is continuing.
IN WITNESS WHEREOF, the Company has caused this Certificate to be
executed and delivered by its duly authorized officer this ____day of
______________, 19__.
TRW INC.
By
----------------------
Its
---------------------
<PAGE> 86
EXHIBIT C
to
Multi-Year Revolving
Credit Agreement
___________________, 1992
To: Each of the Banks party to the
Credit Agreements referred to
below
Ladies and Gentlemen:
I am General Counsel of TRW Inc., an Ohio corporation (the "Company"), and have
acted in such capacity in connection with the Three-Year Revolving Credit
Agreement and the 364-Day Revolving Credit Agreement, each dated as of
July 1, 1992 (the "Credit Agreements") among the Company and each of the
financial institutions listed on the signature pages thereof. Capitalized
terms used but not otherwise defined are used herein as defined in the Credit
Agreements.
In connection with the opinions expressed below, I have examined or caused to be
examined by members of the TRW Law Department a copy of the Credit Agreements
and the Notes thereunder; and I have also made or caused to be made such other
examinations and inquiries as I have deemed necessary to enable me to give the
opinions hereinafter expressed. However, as to each of the opinions set forth
below which is limited to my knowledge, you should be aware that I have neither
made nor caused to be made any independent review for purposes of rendering this
opinion, although in the regular course of advising the Company I have reviewed
or caused to be reviewed various documents, records and matters of law.
Based upon the foregoing, I am of the opinion that:
<PAGE> 87
___________________, 1992
Page 2
1. The Company is a corporation duly incorporated and in good standing
under the laws of the State of Ohio.
2. The Company has full power to execute, deliver, and perform each of the
Credit Agreements and to borrow moneys thereunder and to execute,
deliver, and perform its obligations under the Notes.
3. The execution and delivery of the Credit Agreements and the Notes, the
borrowings under the Credit Agreements, and the performance by the
Company of its obligations under the Credit Agreements and the Notes,
have been duly authorized by all necessary corporate action, and do not
and will not contravene or conflict with any material provision of
applicable law now in effect or of the Amended Articles of
Incorporation or Regulations of the Company or, to my knowledge, of any
agreement for borrowed money or other material agreement binding upon
the Company.
4. The Credit Agreements and the Notes have been duly executed and
delivered by the Company and are the legal, valid, and binding
obligations of the Company, enforceable in accordance with their terms,
except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium laws or debtor relief proceedings or any
similar laws or proceedings affecting creditors' rights generally or by
general principles of equity.
I am a member of the bar of the State of Ohio and do not purport to be an expert
on, generally familiar with or qualified to express legal conclusions based on
laws other than the laws of the State of Ohio and the United States of America.
This opinion is being delivered to you solely for your benefit as creditor under
the Credit Agreements and may be relied upon only by you for such purpose.
Very truly yours,
Martin A. Coyle
General Counsel
<PAGE> 1
Exhibit (b)(2)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
AMENDMENT TO
MULTI-YEAR REVOLVING CREDIT AGREEMENT
(as amended and restated as of May 8, 1996)
dated as of August 7, 1997
among
TRW INC.
and
THE FINANCIAL INSTITUTIONS
LISTED ON THE SIGNATURE
PAGES HEREOF
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
AMENDMENT TO
MULTI-YEAR REVOLVING CREDIT AGREEMENT
(as amended and restated as of May 8, 1996)
This Amendment to Multi-Year Revolving Credit Agreement, dated as of August
7, 1997 (this "Amendment"), is among TRW Inc., an Ohio corporation (the
"Company") and the financial institutions listed on the signature pages hereof
together with their successors or assigns (collectively, the "Banks" and
individually, a "Bank").
W I T N E S S E T H:
--------------------
WHEREAS, on July 1, 1992, the Company and the Banks entered into the
Three-Year Revolving Credit Agreement (as it was then titled), which agreement
was amended on June 30, 1993, March 1, 1994, February 28, 1995, and amended and
restated as of May 8, 1996 (such agreement, as amended and restated, is known
hereinafter as the "Agreement"); and
WHEREAS, the Company and the Banks have agreed to make such changes to the
Agreement as are reflected in this Amendment;
NOW, THEREFORE, in consideration of the mutual agreements contained herein,
the parties hereto agree as follows:
SECTION 1 THE AMENDMENTS
1.1 AMENDMENT TO "TERMINATION DATE" DEFINITION. The definition of
"Termination Date" set forth in Section 13 shall be amended to read in its
entirety as follows:
"TERMINATION DATE" means the earlier to occur of (a) July 1, 2002,
subject to extension for one or more successive one-year periods as to any
Bank or Banks pursuant to Section 1.2, or (b) such other date on which the
Commitments shall terminate pursuant to Section 11.2.
1.2 AMENDMENT OF OTHER INDEBTEDNESS CROSS-DEFAULT. Section 11.1.2 shall be
amended to read in its entirety as follows:
11.1.2 NONPAYMENT OF OTHER INDEBTEDNESS FOR BORROWED MONEY. Default in
the payment when due at maturity (subject to any applicable grace period)
or by acceleration of any other indebtedness for borrowed money having a
principal amount in excess of 50,000,000 U.S. Dollars of, or guaranteed by,
the Company ("Other Indebtedness"), or default in the performance or
observance of any obligation or condition with respect to any such Other
Indebtedness if such default results in the
-1-
<PAGE> 3
acceleration of the maturity of any such Other Indebtedness; provided,
that, if such default shall subsequently be remedied, cured, or waived
prior to either the termination of Commitments or the declaration that all
Loans are immediately due and payable, in each case pursuant to Section
11.2 hereof, and as a result the payment of such Other Indebtedness is no
longer due, the Event of Default existing hereunder by reason thereof shall
likewise be deemed thereupon to be remedied, cured, or waived and no longer
in existence, all without any further action by the parties hereto.
SECTION 2 GENERAL
2.1 REISSUANCE OF NOTES. In connection with the effectiveness of this
Amendment, the Company shall issue to each of the Banks Notes in the principal
amounts set forth next to such Bank's name in the signature blocks below, such
Note shall be substantially in the form of Exhibit A to the Agreement with the
dates therein changed to reflect this Amendment. Contemporaneously with the
issuance of such Notes, the Notes dated May 8, 1996 currently pertaining to the
Agreement shall be deemed null and void and each Bank shall cancel and return to
the Company each such Note pertaining to the Agreement currently in such Bank's
possession.
2.2 OTHER TERMS AND CONDITIONS. Unless amended hereby, all other terms and
conditions of the Agreement shall remain in full force and effect without
change.
2.3 GOVERNING LAW. This Amendment and each Note issued pursuant hereto
shall be a contract made under and governed by the internal laws of the State of
Ohio. Wherever possible each provision of this Amendment shall be interpreted in
such manner as to be effective and valid under applicable law, but if any
provision of this Amendment shall be prohibited by or invalid under such law,
such provision shall be ineffective to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Amendment. All obligations of the Company and
rights of the Banks and any other holders of the Notes expressed herein or in
the Notes shall be in addition to and not in limitation of those provided by
applicable law.
2.4 COUNTERPARTS. This Amendment may be executed in any number of
counterparts and by the different parties on separate counterparts and each such
counterpart shall be deemed to be an original, but all such counterparts shall
together constitute but one and the same Amendment. When counterparts executed
by all the parties shall have been lodged with the Company (or, in the case of
any Bank as to which an executed counterpart shall not have been so lodged, the
Company shall have received telegraphic, telex, or other written confirmation
from such Bank of execution of a counterpart hereof by such Bank), this
Amendment shall become effective as of the date hereof.
-2-
<PAGE> 4
2.5 CAPTIONS. Section captions used in this Amendment are for convenience
only, and shall not affect the construction of this Amendment.
Delivered at Cleveland, Ohio, as of the day and year first above written.
TRW INC.
By: /s/ Jeanne R. Sydenstricker
---------------------------
Jeanne R. Sydenstricker
Vice President and Treasurer
1900 Richmond Road
Cleveland, Ohio 44124
Telephone 216/291-7566
Facsimile: 216/291-7831
-3-
<PAGE> 5
BANKS:
Amount of Percentage of
Commitment Commitments
- ---------- -----------
$60,000,000 8 % Bank of America National Trust
----- and Savings Association
By: /s/ Deborah J. Graziano
-----------------------
Name: Deborah J. Graziano
Title: Vice President
DOMESTIC OFFICE
Bank of America NT & SA
1850 Gateway Boulevard
Concord, California 94520
Telephone: (510) 675-7178
Facsimile: (510) 675-7531
Attention: Mandy Sneary
EUROCURRENCY OFFICE
Bank of America NT & SA
1850 Gateway Boulevard
Concord, California 94520
Telephone: (510) 675-7178
Facsimile: (510) 675-7531
Attention: Mandy Sneary
ELECTRONIC PAYMENT INSTRUCTIONS
Receiving Bank: Bank of America
ABA Routing No. 121000358
Account No.: 12331-83980
Account Name: Incoming Money Transfer
Reference No.: TRW Commitment Fee
-4-
<PAGE> 6
Amount of Percentage of
Commitment Commitments
- ---------- -----------
$60,000,000 8 % Barclays Bank PLC
-----
By: /s/ Gary F. Albanese
-----------------------
Name: Gary F. Albanese
Title: Associate Director
DOMESTIC OFFICE
Barclays Bank PLC
222 Broadway
New York, New York 10038
Telephone: (212) 412-3728
Facsimile: (212) 412-5306
EUROCURRENCY OFFICE
Barclays Nassau, Bahamas Branch
c/o Barclays Bank PLC
222 Broadway
New York, New York 10038
Telephone: (212) 412-3728
Facsimile: (212) 412-5306
ELECTRONIC PAYMENT INSTRUCTIONS
Receiving Bank: Barclays Bank PLC-New York
ABA Routing No.: 026-002-574
Account No.: 050-019-104
Account Name: TRW
Reference No.: TRW Commitment Fee;
C. Tenn Sing Que
-5-
<PAGE> 7
Amount of Percentage of
Commitment Commitments
- ---------- -----------
$60,000,000 8 % The Chase Manhattan Bank
-----
By: /s/ Joan F. Garvin
------------------
Name: Joan F. Garvin
Title: Managing Director
DOMESTIC OFFICE
The Chase Manhattan Bank
270 Park Avenue
10th Floor
New York, New York 10017-2070
Telephone: (212) 270-5730
Facsimile: (212) 270-5127
EUROCURRENCY OFFICE
The Chase Manhattan Bank
One Chase Manhattan Plaza
Eighth Floor
New York, New York 10081
Telephone: (212) 552-7472
Facsimile: (212) 552-5662
ELECTRONIC PAYMENT INSTRUCTIONS
Receiving Bank: Chase Manhattan Bank
ABA Routing No.: 021-000021
Account No.:
Account Name: Commercial Loan Opns.
Reference No.: TRW Commitment Fee
-6-
<PAGE> 8
Amount of Percentage of
Commitment Commitments
- ---------- -----------
$60,000,000 8 % Citibank, N.A.
-----
By: /s/ Mark Stanfield Packard
--------------------------
Name: Mark Stanfield Packard
Title: Vice President
DOMESTIC OFFICE
Citibank, N.A.
c/o Citicorp Securities, Inc.
200 S. Wacker Dr.
Chicago, IL 60606
Telephone: 312-993-3871
Facsimile: 312-993-6840
EUROCURRENCY OFFICE
Citibank, N.A.
c/o Citicorp Securities, Inc.
200 S. Wacker Dr.
Chicago, IL 60606
Telephone: 312-993-3871
Facsimile: 312-993-6840
ELECTRONIC PAYMENT INSTRUCTIONS
Receiving Bank: Citibank, N.A., New York
ABA Routing No. 021000089
Account No.: 38483095
Account Name: Chicago NEO Loan Acct.
Reference No.: TRW Commitment Fee
-7-
<PAGE> 9
Amount of Percentage of
Commitment Commitments
- ---------- -----------
$60,000,000 8 % Morgan Guaranty Trust Company
----- of New York
By: /s/ Patricia P. Lunka
----------------------
Name: Patricia P. Lunka
Title: Vice President
DOMESTIC OFFICE
Morgan Guaranty Trust Company
of New York
60 Wall Street
New York, New York 10260-0060
Telephone: _____________
Facsimile: _____________
EUROCURRENCY OFFICE
Morgan Guaranty Trust Company
of New York
Nassau, Bahamas Office
c/o J.P. Morgan Services Inc.
Euro-Loan Servicing Unit
902 Market Street
Wilmington, Delaware 19801
Telephone: _____________
Facsimile: _____________
ELECTRONIC PAYMENT INSTRUCTIONS
Receiving Bank: Morgan Guaranty Trust
ABA Routing No.:021000238
Account No.: 999-99-090
Account Name: ____________
Reference No.: TRW Com. Fee
Corp. Proc. Module 30
-8-
<PAGE> 10
Amount of Percentage of
Commitment Commitments
- ---------- -----------
$60,000,000 8 % National City Bank
-----
By: /s/ David R. Bonner
----------------------
Name: David R. Bonner
Title: Vice President
DOMESTIC OFFICE
National City Bank
National City Center
P. O. Box 5756
Cleveland, Ohio 44101-0756
Telephone: _____________
Facsimile: _____________
EUROCURRENCY OFFICE
National City Bank
National City Center
P. O. Box 5756
Cleveland, Ohio 44101-0756
Telephone: _____________
Facsimile: _____________
ELECTRONIC PAYMENT INSTRUCTIONS
Receiving Bank: National City Bank
ABA Routing No.: 041000124
Account No.: 2537557
Account Name: _____________
Reference No.: TRW Commitment Fee
-9-
<PAGE> 11
Amount of Percentage of
Commitment Commitments
- ---------- -----------
$60,000,000 8 % The Sumitomo Bank, Limited
-----
By: /s/ John H. Kemper
------------------
Name: John H. Kemper
Title: Senior Vice President
DOMESTIC OFFICE
The Sumitomo Bank, Limited
Chicago Branch
Sears Tower
233 South Wacker Drive, Suite 4800
Chicago, Illinois 60606-6448
Telephone: (312) 876-6444
Facsimile: (312) 876-6436
EUROCURRENCY OFFICE
The Sumitomo Bank, Limited
Chicago Branch
Sears Tower
233 South Wacker Drive, Suite 4800
Chicago, Illinois 60606-6448
Telephone: (312) 879-7668
Facsimile: (312) 876-0523
ELECTRONIC PAYMENT INSTRUCTIONS
Receiving Bank: FNB of Chicago
ABA Routing No. 071000013
Account No.: 15-01208
Account Name: Sumitomo Bank Ltd,
Chicago Branch.
Reference No.: TRW Commitment Fee
-10-
<PAGE> 12
Amount of Percentage of
Commitment Commitments
- ---------- -----------
$45,000,000 6 % Banque Nationale de Paris
-----
By: /s/ Arnaud Collin Du Bocage
---------------------------
Name: Arnaud Collin du Bocage
Title: Executive Vice President and
General Manager
DOMESTIC OFFICE
Banque Nationale de Paris
Chicago Branch
Rookery Building
209 South LaSalle, 5th Floor
Chicago, Illinois 60604
Telephone: (312) 977-2211
Facsimile: (312) 977-1380
EUROCURRENCY OFFICE
Banque Nationale de Paris
Chicago Branch
Rookery Building
209 South LaSalle, 5th Floor
Chicago, Illinois 60604
Telephone: (312) 977-2211
Facsimile: (312) 977-1380
ELECTRONIC PAYMENT INSTRUCTIONS
Receiving Bank: Banque Nationale de Paris,
New York Branch
ABA Routing No.: 026007689
Account No.: 14119400189
Account Name: BNP, Chicago Branch
Reference No.: TRW Commitment Fee
-11-
<PAGE> 13
Amount of Percentage of
Commitment Commitments
- ---------- -----------
$45,000,000 6 % Dresdner Bank AG
-----
By: /s/ D. Slusavczyk
-----------------
Name: D. Slusavczyk
Title: Vice President
By: /s/ A. R. Morris
-----------------
Name: A. R. Morris
Title: Vice President
DOMESTIC OFFICE
Dresdner Bank AG New York Branch
75 Wall Street
New York, New York 10005
Telephone: (212) 429-2244
Facsimile: (212) 429-2524
EUROCURRENCY OFFICE
Dresdner Bank AG Grand Cayman Branch
c/o Dresdner Bank AG New York Branch
75 Wall Street
New York, New York 10005
Telephone: (212) 429-2244
Facsimile: (212) 429-2524
ELECTRONIC PAYMENT INSTRUCTIONS
Receiving Bank: Chase Manhattan (NY,NY)
ABA Routing No.: 021-000-021
Account No.: 920-1-059-079
Account Name: Dresdner Bank AG,
New York Branch
Reference No.: TRW Commitment Fee
-12-
<PAGE> 14
Amount of Percentage of
Commitment Commitments
- ---------- -----------
$45,000,000 6 % NBD Bank
-----
By: /s/ William J. McCaffrey
------------------------
Name: William J. McCaffrey
Title: Vice President
DOMESTIC OFFICE
NBD Bank
Attention: Mid-Corporate Banking
611 Woodward
Detroit, Michigan 48226
Telephone: (313) 225-3444
Facsimile: (313) 225-3269
EUROCURRENCY OFFICE
NBD Bank, N.A.
Attention: Mid-Corporate Banking
611 Woodward
Detroit, Michigan 48226
Telephone: (313) 225-3444
Facsimile: (313) 225-3269
ELECTRONIC PAYMENT INSTRUCTIONS
Receiving Bank: NBD Bank
ABA Routing No.:072000326
Account No.: 1424183
Account Name: Commercial Loans
Reference No.: TRW Commitment Fee
-13-
<PAGE> 15
Amount of Percentage of
Commitment Commitments
- ---------- -----------
$45,000,000 6 % Royal Bank of Canada
-----
By: /s/ Patrick Shields
------------------------
Name: Patrick Shields
Title: Senior Manager
DOMESTIC OFFICE
Royal Bank of Canada
Grand Cayman (North America No. 1) Branch
c/o New York Branch
32 Old Slip
New York, New York 10005-3531
Telephone: (212) 428-6323
Facsimile: (212) 428-2372
EUROCURRENCY OFFICE
Royal Bank of Canada
Grand Cayman (North America No. 1) Branch
c/o New York Branch
32 Old Slip
New York, New York 10005-3531
Telephone: (212) 428-6323
Facsimile: (212) 428-2372
ELECTRONIC PAYMENT INSTRUCTIONS
Receiving Bank: Chase Manhattan, NY
ABA Routing No.: 021000021
Account No.: 9201033363
Account Name: Royal Bank
Reference No.: TRW Commitment Fee
-14-
<PAGE> 16
Amount of Percentage of
Commitment Commitments
- ---------- -----------
$30,000,000 4 % KeyBank National Association
-----
By: /s/ Marianne Meil
-----------------
Name: Marianne Meil
Title: Vice President
DOMESTIC OFFICE
KeyBank National Association
127 Public Square
Cleveland, Ohio 44114
Telephone: _____________
Facsimile: _____________
EUROCURRENCY OFFICE
KeyBank National Association
127 Public Square
Cleveland, Ohio 44114
Telephone: _____________
Facsimile: _____________
ELECTRONIC PAYMENT INSTRUCTIONS
Receiving Bank: KeyBank National Association
ABA Routing No.:041001039
Account No.: 00100-39140
Account Name: Commercial Loan Opns
Reference No.: TRW Commitment Fee
-15-
<PAGE> 17
Amount of Percentage of
Commitment Commitments
- ---------- -----------
$30,000,000 4 % The Sakura Bank, Limited
-----
By: /s/ Shunji Sakurai
------------------
Name: Shunji Sakurai
Title: Joint General Manager
DOMESTIC OFFICE
The Sakura Bank, Limited
Chicago Branch
227 West Monroe Street
Suite 4700
Chicago, Illinois 60606
Telephone: (312) 580-3276
Facsimile: (312) 332-5345
EUROCURRENCY OFFICE
The Sakura Bank, Limited
Chicago Branch
227 West Monroe Street
Suite 4700
Chicago, Illinois 60606
Telephone: (312) 580-3276
Facsimile: (312) 332-5345
ELECTRONIC PAYMENT INSTRUCTIONS
Receiving Bank: FNB of Chicago
ABA Routing No.: 071000013
Account No.: 1512951
Account Name: Sakura Bank, Chicago
Reference No.: TRW Commitment Fee
-16-
<PAGE> 18
Amount of Percentage of
Commitment Commitments
- ---------- -----------
$30,000,000 4 % The Tokai Bank, Limited
-----
By: /s/ Hiroshi Tanaka
------------------
Name: Hiroshi Tanaka
Title: General Manager
DOMESTIC OFFICE
The Tokai Bank, Limited
Chicago Branch
Attention: Corporate Finance
181 West Madison Street, Suite 3600
Chicago, Illinois 60602
Telephone: _____________
Facsimile: _____________
EUROCURRENCY OFFICE
The Tokai Bank, Limited
Chicago Branch
Attention: Corporate Finance
181 West Madison Street, Suite 3600
Chicago, Illinois 60602
Telephone: _____________
Facsimile: _____________
ELECTRONIC PAYMENT INSTRUCTIONS
Receiving Bank: FNB of Chicago
ABA Routing No.: 071000013
Account No.: 15-08997
Account Name: Tokai Bank, Chicago Branch
Reference No.: TRW Commitment Fee
Loan Administration
-17-
<PAGE> 19
Amount of Percentage of
Commitment Commitments
- ---------- -----------
$30,000,000 4 % Union Bank of Switzerland
-----
By: /s/ Dieter Hoeppli
------------------
Name: Dieter Hoeppli
Title: Vice President
By: /s/ Samuel Azizo
------------------
Name: Samuel Azizo
Title: Vice President
DOMESTIC OFFICE
Union Bank of Switzerland
New York Branch
299 Park Avenue
New York, New York 10171
Telephone: (212) 821-3415
Facsimile: (212) 821-3383
EUROCURRENCY OFFICE
Union Bank of Switzerland
New York Branch
299 Park Avenue
New York, New York 10171
Telephone: (212) 821-3415
Facsimile: (212) 821-3383
ELECTRONIC PAYMENT INSTRUCTIONS
Receiving Bank: Union Bank of Switzerland
ABA Routing No.: 026008439
Account No.: 519243USICC1
Account Name: Credit Corporate Clearing
Reference No.: TRW Commitment Fee
-18-
<PAGE> 20
Amount of Percentage of
Commitment Commitments
- ---------- -----------
$15,000,000 2 % Bank of China, New York Branch
-----
By: /s/ Zhu, ZhiCheng
-----------------
Name: Zhu, ZhiCheng
Title: General Manager, USA
DOMESTIC OFFICE
Bank of China
New York Branch
410 Madison Avenue
New York, New York 10017
Telephone: (212) 935-3101 ext. 475
Facsimile: (212) 688-0919
EUROCURRENCY OFFICE
Bank of China
New York Branch
410 Madison Avenue
New York, New York 10017
Telephone: (212) 935-3101 ext. 475
Facsimile: (212) 688-0919
ELECTRONIC PAYMENT INSTRUCTIONS
Receiving Bank: Bank of China, New York Branch
ABA Routing No.: 026003269
Account No.: 160081555553-001-001
. Reference No.: TRW Commitment Fee
-19-
<PAGE> 21
Amount of Percentage of
Commitment Commitments
- ---------- -----------
$15,000,000 2 % Wells Fargo Bank, N.A.
-----
By: /s/ Edith R. Lim
-----------------
Name: Edith R. Lim
Title: Vice President
By: /s/ Frieda Youlios
-----------------
Name: Frieda Youlios
Title: Vice President
DOMESTIC OFFICE
Wells Fargo Bank, N.A.
707 Wilshire Blvd., 16th. Floor
Los Angeles, CA 90017
Telephone: (213) 614-5038
Facsimile: (213) 614-2305
EUROCURRENCY OFFICE
Wells Fargo Bank, N.A.
707 Wilshire Blvd., 16th. Floor
Los Angeles, CA 90017
Telephone: (213) 614-5038
Facsimile: (213) 614-2305
ELECTRONIC PAYMENT INSTRUCTIONS
Receiving Bank: Wells Fargo Bank, N.A.
ABA Routing No.: 121-000-248
Account No.: 451-8054341
Account Name: SYNDIC/WFB CORP/ACH
Reference No.: TRW Ref No 9118583038
- ------------ ----
$750,000,000 100% Total
-20-
<PAGE> 1
Exhibit (b)(3)
November 17, 1997
Bank of America
Bank of China
Banque Nationale de Paris
Barclays Bank
Chase Manhattan Bank
Citibank
Dresdner Bank
KeyBank
Morgan Guaranty Trust Company
National City Bank
NBD Bank
Royal Bank of Canada
Sakura Bank
Sumitomo Bank
Tokai Bank
Union Bank of Switzerland
Wells Fargo
Re: COMMITMENT LETTER FOR 364-DAY REVOLVING CREDIT FACILITY
Ladies and Gentlemen:
Each of you is a party to the Multi-Year Revolving Credit Agreement, as amended
and restated as of May 8, 1996, as amended by Amendment thereto dated as of
August 7, 1997 (as so amended and restated and as so amended, the "MULTI-YEAR
CREDIT AGREEMENT"), among TRW Inc., an Ohio corporation (the "COMPANY"), and
the financial institutions named therein.
The Company desires to establish a separate 364-day revolving credit facility
providing for up to $750 million of revolving loans (the "NEW 364-DAY REVOLVING
CREDIT FACILITY"), which would have all of the same terms, conditions and
provisions as the Multi-Year Credit Agreement except for the changes marked
on the proposed form of agreement attached hereto and the final allocation of
commitments among the lenders.
<PAGE> 2
Page 2
We invite you to indicate in the space provided below the principal amount
of the New 364-day Revolving Credit Facility you agree to provide (which amount
shall be subject to reduction by the Company upon allocation of commitments
among the lenders). Your commitment will be subject only to (i) the Company
obtaining commitments from some or all of the other financial institutions who
are parties to the Multi-Year Credit Facility for the remaining balance of the
New 364-day Revolving Credit Facility, and (ii) the execution of the
contemplated definitive documentation on or before December 10, 1997. If you do
wish to participate, please sign in the space provided below and return a signed
copy of this letter to the undersigned, whereupon this letter shall be a binding
agreement.
TRW INC.
By:
------------------------------------
J.R. Sydenstricker
Vice President and Treasurer
We agree to participate in accordance with this letter in the principal amount
indicated below:
Bank Name:_____________________________
Amount: $_____________________________
By:_____________________________
Name:
Title:
<PAGE> 1
Exhibit (b)(4)
================================================================================
REVOLVING CREDIT AGREEMENT
dated
as of December 10, 1997
among
TRW INC.
and
THE FINANCIAL INSTITUTIONS
LISTED ON THE SIGNATURE
PAGES HEREOF
================================================================================
<PAGE> 2
TABLE OF CONTENTS
Page
----
PREAMBLE..................................................................... 1
SECTION 1 COMMITMENT OF THE BANKS; TYPES
OF LOANS; PROCEDURES FOR BORROWING
OR CONVERTING................................................. 1
1.1 Commitment.................................................... 1
1.2 Extension of Revolving Period Termination Date................ 2
1.3 Various Types of Loans........................................ 2
1.4 Notice of Borrowing, Continuation, or
Conversion............................................... 2
1.5 Conversion and Continuation Procedures........................ 3
1.6 Negotiated Loans.............................................. 3
1.7 Local Currency Loans.......................................... 3
1.8 Loans to Designated Subsidiaries.............................. 4
SECTION 2 REPAYMENT OF LOANS; NOTES EVIDENCING LOANS.................... 4
2.1 Repayment of Loans............................................ 4
2.2 Notes......................................................... 4
2.3 Other Provisions of the Notes................................. 5
2.4 Recordkeeping................................................. 5
SECTION 3 INTEREST...................................................... 5
3.1 Interest Rates................................................ 5
3.2 Interest Payment Dates........................................ 6
3.3 Interest Periods for Fixed Rate Loans......................... 6
3.4 Setting and Notice of Rates................................... 6
3.5 Computation of Interest....................................... 6
SECTION 4 FEES.......................................................... 7
4.1 Commitment Fee................................................ 7
4.2 Computation of Fees........................................... 7
SECTION 5 REDUCTION OR TERMINATION OF THE
COMMITMENTS; PREPAYMENT....................................... 7
5.1 Reduction or Termination of the Commitments................... 7
5.2 Optional Prepayment........................................... 7
5.3 Mandatory Prepayment.......................................... 7
(i)
<PAGE> 3
Page
----
SECTION 6 MAKING AND APPLICATION OF PAYMENTS............................ 8
6.1 Making of Payments............................................ 8
6.2 Application of Certain Payments............................... 8
6.3 Due Date Extension............................................ 8
SECTION 7 INCREASED COSTS AND TAXES..................................... 8
7.1 Increased Capital............................................. 8
7.2 Increased Costs............................................... 9
7.3 Basis for Determining Interest Rate Inadequate................10
7.4 Changes in Law Rendering Certain Loans Unlawful...............10
7.5 Funding Losses................................................11
7.6 Currency Indemnity............................................11
7.7 Increased Tax Costs...........................................12
SECTION 8 WARRANTIES....................................................12
8.1 Corporate Organization........................................12
8.2 Authorization; No Conflict....................................13
8.3 Validity and Binding Nature...................................13
8.4 Financial Statements..........................................13
8.5 Litigation....................................................13
8.6 Compliance with ERISA.........................................13
8.7 Environmental Matters.........................................14
8.8 Taxes.........................................................14
8.9 Government Regulation.........................................14
SECTION 9 COVENANTS.....................................................14
9.1 Reports, Certificates and Other Information...................14
9.1.1 Audit Report...........................................14
9.1.2 Quarterly Reports......................................14
9.1.3 Compliance Certificates................................15
9.1.4 Current Reports........................................15
9.1.5 Other Information......................................15
9.2 Net Worth.....................................................15
9.3 Liens.........................................................15
9.4 Sale and Leaseback............................................17
9.5 Mergers, Consolidations, Sales................................18
SECTION 10 CONDITIONS OF LENDING.........................................18
10.1 Initial Loan to the Company...................................18
(ii)
<PAGE> 4
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10.1.1 Note...................................................18
10.1.2 Resolutions............................................18
10.1.3 Incumbency and Signatures..............................19
10.1.4 Opinion of Counsel.....................................19
10.2 Loans to Designated Subsidiaries..............................19
10.2.1 Resolutions............................................19
10.2.2 Acceptance of this Agreement...........................19
10.2.3 Incumbency and Signatures..............................19
10.3 All Loans.....................................................19
10.4 Conversions...................................................19
SECTION 11 EVENTS OF DEFAULT AND THEIR EFFECT............................19
11.1 Events of Default.............................................20
11.1.1 Nonpayment of Notes or Fees............................20
11.1.2 Nonpayment of Other Indebtedness for
Borrowed Money....................................20
11.1.3 Bankruptcy or Insolvency...............................20
11.1.4 Noncompliance with Other Provisions....................20
11.1.5 Warranties.............................................21
11.1.6 Judgments..............................................21
11.2 Effect of Event of Default....................................21
SECTION 12 GUARANTY......................................................21
SECTION 13 CERTAIN DEFINITIONS...........................................22
SECTION 14 GENERAL.......................................................32
14.1 Waiver; Amendments............................................32
14.2 Confirmations.................................................33
14.3 Notices.......................................................33
14.4 Computations..................................................34
14.5 Confidentiality...............................................34
14.6 Assignments and Participations................................35
14.6.1 Assignments............................................35
14.6.2 Participations.........................................35
14.6.3 Disclosure of Information..............................35
14.7 Securities Laws...............................................35
14.8 Costs and Expenses............................................35
14.9 Governing Law.................................................36
14.10 Counterparts..................................................36
14.11 Captions......................................................36
14.12 Successors and Assigns........................................36
14.13 Entire Agreement..............................................36
(iii)
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14.14 Appointment of Administrator..................................36
14.15 Non-U.S. Bank Tax Information.................................37
14.16 Regulation U..................................................37
EXHIBITS
EXHIBIT A Form of Note
EXHIBIT B Form of Compliance Certificate
EXHIBIT C Form of Opinion of Counsel to the Company
SCHEDULES
SCHEDULE 8.5 Undisclosed Material Legal Proceedings
(iv)
<PAGE> 6
REVOLVING CREDIT AGREEMENT
This Revolving Credit Agreement, dated as of December 10, 1997 (this
"AGREEMENT"), is among TRW Inc., an Ohio corporation (the "COMPANY") and the
financial institutions listed on the signature pages hereof together with their
successors or assigns (collectively, the "BANKS" and individually, a "BANK").
Certain terms being used in this Agreement are hereinafter defined in Section
13.
W I T N E S S E T H:
--------------------
WHEREAS, the Company has requested the Banks to make certain unsecured
loans to the Company and certain Subsidiaries of the Company designated by the
Company for general corporate purposes, including without limitation for working
capital, capital expenditures, acquisitions (directly or indirectly) of assets,
stock or other ownership interests, and repurchases or redemptions of
securities; and
WHEREAS, the Banks have agreed to make such loans on the terms and subject
to the conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the mutual agreements contained herein,
the parties hereto agree as follows:
SECTION 1 COMMITMENT OF THE BANKS; TYPES OF LOANS;
PROCEDURES FOR BORROWING OR CONVERTING.
1.1 COMMITMENT. Subject to the terms and conditions of this Agreement, each
of the Banks, severally and for itself alone, agrees to make loans
(collectively, the "LOANS" and individually, a "LOAN") to the Company and, as
provided in Section 1.8, to any Designated Subsidiary on a revolving basis from
time to time during the period (the "REVOLVING PERIOD") from the date hereof
through the Revolving Period Termination Date, as it may be extended from time
to time pursuant to Section 1.2, in such aggregate amounts as the Company or any
Designated Subsidiary may from time to time request from such Bank; provided,
however, that the aggregate principal amount of Loans that any Bank shall be
committed to have outstanding to the Company and the Designated Subsidiaries
shall not at any one time exceed the amount set forth opposite such Bank's
signature hereto, or any subsequent amendment hereto (except to the extent
provided in Section 1.9 hereof). The foregoing commitment of each Bank to make
Loans as reduced from time to time in accordance with the terms hereof is herein
called such Bank's "COMMITMENT" and the commitments of all Banks are herein
sometimes collectively called the "COMMITMENTS." Loans may not be made after the
Revolving Period Termination Date, as it may be extended from time to time
pursuant to Section 1.2, but if the Company shall have made the election
provided in clause (ii) of Section 2.1, Loans outstanding at the end of the
Revolving Period may thereafter be Continued or Converted as herein provided.
<PAGE> 7
1.2 EXTENSION OF REVOLVING PERIOD TERMINATION DATE. No later than 60 days
prior to the Revolving Period Termination Date then in effect, the Company may
request, by written notice, that any one or more of the Banks extend the
Revolving Period Termination Date as to that Bank's Commitment for a period of
one year commencing on the Revolving Period Termination Date then in effect.
Each Bank receiving such an extension request from the Company shall notify the
Company in writing no later than 20 days prior to the Revolving Period
Termination Date then in effect of such Bank's determination to extend or not to
extend the Revolving Period Termination Date. A notice given by a Bank to extend
the Revolving Period Termination Date pursuant to this Section 1.2 shall be
irrevocable (subject to Section 11.2). Any Bank that fails to respond to the
Company's request to extend the Revolving Period Termination Date within such
time period shall be deemed to have given notice to the Company that such Bank
does not desire to extend the Revolving Period Termination Date.
1.3 VARIOUS TYPES OF LOANS. Each Loan shall be either a Base Rate Loan, a
Domestic CD Loan, a Eurocurrency Loan, a Local Currency Loan, or a Negotiated
Loan (each herein called a "TYPE" of Loan), as the Company shall specify in the
related notice of borrowing, Continuation, or Conversion pursuant to Section 1.4
or 1.5. Domestic CD Loans, Eurocurrency Loans, Local Currency Loans, and
Negotiated Loans bearing interest at a fixed rate for a fixed period of time are
sometimes collectively called "FIXED RATE LOANS." Each Loan shall be made in
U.S. Dollars or such other currency as is requested by the Company and shall be
available at the time and for the period requested by the Company. Each Loan
shall bear interest at the rate specified in Section 3.1 and shall mature on and
be due and payable in full on the earliest of (i) the Termination Date, (ii) the
end of an Interest Period (unless the Loan is Continued or Converted) or (iii)
such other date as the Company and the Relevant Bank shall otherwise agree in
writing. The Eurocurrency specified in any notice of borrowing, Continuation, or
Conversion given by the Company pursuant to Section 1.4 or 1.5 shall be deemed
to be available for purposes of this Agreement, unless the Relevant Bank gives
the Company notice (which may be by telephone) no later than the earlier of (a)
12:00 noon, Cleveland time, on the second Business Day prior to the proposed
date making the Eurocurrency Loan, or (b) one hour after the Relevant Bank has
received the notice of borrowing, Continuation, or Conversion, as applicable.
The Relevant Bank's determination in good faith that a proposed Eurocurrency is
or is not available shall be final.
1.4 NOTICE OF BORROWING. CONTINUATION. OR CONVERSION. The Company, through
an Authorized Person, shall give written or telephonic notice to the Relevant
Bank of each proposed borrowing from such Bank, or Conversion or Continuation of
Loans made by such Bank, by 11:00 a.m., Cleveland time, (a) on the proposed date
of such borrowing, Conversion, or Continuation if such borrowing, Conversion, or
Continuation is comprised of Base Rate Loans, Domestic CD Loans, or Negotiated
Loans, (b) at least two Business Days prior to the proposed date of such
borrowing, Conversion, or Continuation if such borrowing, Conversion, or
Continuation is comprised of Eurocurrency Loans (provided that at least one
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Business Day prior to such written or telephonic notice of proposed nondollar
denominated Eurocurrency Loan borrowing, Continuation or Conversion, the
Company, through an Authorized Person, shall give written or telephonic notice
to the Relevant Bank of the Company's intention to request a Eurocurrency Loan),
and (c) with respect to Local Currency Loans, at least two Business Days prior
to the proposed date of such borrowing, Conversion, or Continuation or such
other period of time as is customary for the particular Local Currency. Each
such notice shall be effective upon receipt by the Relevant Bank and shall
specify the date, amount, currency, and type of borrowing and, in the case of a
borrowing comprising Fixed Rate Loans, the initial Interest Period for such
borrowing. Each notice of a Conversion or Continuation of Loans shall specify
the date and amount of such Conversion or Continuation, the Loans to be so
Converted or Continued, the type and currency of Loans to be Converted into or
Continued, and, in the case of a Conversion into or Continuation of Fixed Rate
Loans, the initial or succeeding Interest Period, as the case may be. Each
borrowing shall be on a Business Day and shall be in an aggregate amount of not
less than 1,000,000 U.S. Dollars for Base Rate Loans and not less than 5,000,000
U.S. Dollars (or the Eurocurrency Equivalent Amount) for any other type of Loan,
other than Local Currency Loans (which shall be as agreed between the Company
and the Relevant Bank).
1.5 CONVERSION AND CONTINUATION PROCEDURES. The Company may convert all or
part of any outstanding Loans to Loans of a different type, or may elect to
continue any Fixed Rate Loans for an additional Interest Period, by giving
notice to the Relevant Bank of such Conversion or Continuation within the time
periods specified in Section 1.4. If, with respect to any Fixed Rate Loan, the
Company shall not either repay the Loan in full by 2:00 p.m., Cleveland time, on
the last day of the Interest Period applicable thereto or give notice of its
intention to Convert or Continue such Fixed Rate Loan within the time periods
specified in Section 1.4, then the Company shall be deemed to have requested
that such Loan automatically be converted into a Base Rate Loan at the end of
such Interest Period (and such Loan shall automatically so Convert into a Base
Rate Loan at the end of such Interest Period). Except as provided in
Section 7.4, no Fixed Rate Loans shall be Converted on any day other than the
last day of the current Interest Period relating to such Loans.
1.6 NEGOTIATED LOANS. From time to time, the Company may request, through
an Authorized Person, and a Bank may, but shall not be obligated to, agree to
make, a Loan in U.S. Dollars bearing interest at a rate per annum, and for a
fixed period, agreed to by the Relevant Bank and the Company (each, a
"NEGOTIATED Loan" and collectively, the "NEGOTIATED LOANS").
1.7 LOCAL CURRENCY LOANS. From time to time, the Company may request,
through an Authorized Person, and a Bank may, but shall not be obligated to,
agree to make a Loan in a Local Currency specified by the Company bearing
interest at a rate per annum agreed to by the Bank and the Company (each, a
"LOCAL CURRENCY LOAN" and collectively, the "LOCAL CURRENCY LOANS"). Repayments
of principal of and interest on Local Currency Loans shall be made in the
currency borrowed and shall be paid to the local office of the Relevant Bank
which made the Loan. The local office
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<PAGE> 9
may request additional documentation of the indebtedness if customary at the
place of business of the branch; provided, however, that the terms and
conditions of that documentation shall be consistent with those set forth in
this Agreement unless unlawful or ineffective under local law.
1.8 LOANS TO DESIGNATED SUBSIDIARIES. Each Designated Subsidiary may
request, through an Authorized Person, Local Currency Loans or Eurocurrency
Loans and Convert or Continue such Loans, and shall repay the principal of and
accrued interest on such Loans, all as though the Designated Subsidiaries were
parties to this Agreement and references to the "Company" in Sections 1.3, 1.4,
1.5, 1.7, 2.1, 3.1, 3.4, 3.5, 5.2 and 6.1 shall mean and include the Designated
Subsidiaries. The Relevant Bank may request additional documentation of the
indebtedness if customary at the place of business of the Relevant Bank;
provided, however, that the terms and conditions of that documentation shall be
consistent with those set forth in this Agreement unless unlawful or ineffective
under local law.
SECTION 2 REPAYMENT OF LOANS; NOTES EVIDENCING LOANS.
2.1 REPAYMENT OF LOANS. The Company hereby promises to pay to each Bank the
aggregate unpaid principal amount of such Bank's Loans on the earliest of:
(i) the Revolving Period Termination Date, unless the Company shall
have made the election provided for in clause (ii) below;
(ii) the Term-Out Maturity Date, if the Company shall have elected in
a written notice delivered to all of the Banks no later than 15
days prior to the Revolving Period Termination Date to pay, on
the Term-Out Maturity Date, all Loans which are outstanding at
the end of the Revolving Period;
(iii) the last day of the applicable Interest Period for such Loan
(unless the Loan is Continued or Converted); or
(iv) such other date as the Company and the Relevant Bank may agree
in writing.
Repayment of any Eurocurrency Loan shall be in the same currency in which such
Loan was advanced.
2.2 NOTES. The Loans of each Bank shall be evidenced by a promissory note
(individually, a "NOTE", and collectively for all Banks, the "NOTES")
substantially in the form set forth in Exhibit A, with appropriate insertions,
dated the date of the initial Loan (or such earlier date as shall be
satisfactory to the Relevant Bank), payable to the order of such Bank in the
principal amount of such Bank's
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<PAGE> 10
Commitment (or, if less, in the aggregate unpaid principal amount of all of such
Bank's Loans hereunder).
2.3 OTHER PROVISIONS OF THE NOTES. Each Note shall provide for the payment
of interest as provided in Section 3.
2.4 RECORDKEEPING. Each Bank shall record in its records, or at its option
on the schedule attached to its Note, the date, amount, and type of each Loan
made by such Bank, each repayment, Continuation, or Conversion thereof, and the
dates on which each Interest Period for each Fixed Rate Loan shall begin and
end. The aggregate unpaid principal amount so recorded shall be rebuttable
presumptive evidence of the principal amount owing and unpaid on such Note. The
failure so to record any such amount or any error in so recording any such
amount, however, shall not limit or otherwise affect the obligations of the
Company hereunder or under any Note to repay the principal amount of the Loans,
together with all interest accruing thereon.
SECTION 3 INTEREST.
3.1 INTEREST RATES. With respect to each Loan, the Company hereby promises
to pay interest on the unpaid principal amount thereof for the period commencing
on the date of such Loan until such Loan is paid in full, as follows:
(a) At all times while such Loan is a Base Rate Loan, at a rate per
annum equal to the Base Rate from time to time in effect;
(b) At all times while such Loan is a Domestic CD Loan, during each
Interest Period, at a rate per annum equal to the Domestic CD Rate
(Adjusted) applicable to such Interest Period, plus the Applicable
Margin;
(c) At all times while such Loan is a Eurocurrency Loan, during each
Interest Period, at a rate per annum equal to the Eurocurrency
Rate (Reserve Adjusted) applicable to such Interest Period, plus
the Applicable Margin; and
(d) At all times while such Loan is a Negotiated Loan or a Local
Currency Loan, at the rate per annum agreed to by the Company and
the Relevant Bank pursuant to Section 1.6 or 1.7, as applicable.
Notwithstanding the provisions of the preceding clauses (a), (b), (c) or (d) and
subject to Section 1.5, in the event that any principal of any Loan is not paid
when due (whether by acceleration or otherwise), after the due date of such
principal until such principal is paid, the unpaid principal amount of, and
accrued but unpaid interest on, Revolving Loan shall bear interest at a rate per
annum equal to the higher of the rate
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<PAGE> 11
borne by such Loan or the Relevant Bank's Base Rate from time to time in effect,
plus 1% per annum, subject to the maximum applicable legal rate.
3.2 INTEREST PAYMENT DATES. Accrued interest on each Base Rate Loan
outstanding for 45 days or more shall be payable (i) quarterly in arrears on the
tenth day of each April, July, October, and January for the quarterly period
ended on the last day of the preceding month, and (ii) at maturity, commencing
with the earlier of such dates to occur after the date hereof. Accrued interest
on each Base Rate Loan outstanding for less than 45 days shall be payable in
full on the date such Base Rate Loan is paid in full. Except as otherwise agreed
by the Relevant Bank, accrued interest on each Fixed Rate Loan shall be payable
on the last day of the Interest Period of each such Loan (or, in the case of a
Domestic CD Loan or Negotiated Rate Loan with an Interest Period of 90 days or
longer or a Eurocurrency Loan with an Interest Period of three months or longer,
accrued interest shall be payable quarterly in arrears on the tenth day of each
April, July, October and January and on the last day of each such Interest
Period). After maturity, accrued interest on all Loans shall be payable on
demand. Interest on any Eurocurrency Loan shall be paid in the same currency in
which such Loan was advanced.
3.3 INTEREST PERIODS FOR FIXED RATE LOANS. Prior to each borrowing,
Continuation, or Conversion of Fixed Rate Loans, the Company shall specify, in
the related notice of borrowing, Continuation, or Conversion pursuant to
Sections 1.4 or 1.5, the duration of the Interest Period for such Fixed Rate
Loans. Each notice to the Relevant Bank of an Interest Period shall be in
writing or by telephone and shall be given by an Authorized Person.
3.4 SETTING AND NOTICE OF RATES. For each Loan made hereunder, the
applicable interest rate for each Interest Period or other period shall be the
rate quoted by the Relevant Bank to the Company for that particular type of
Loan. The Relevant Bank shall, upon written request of the Company, deliver to
the Company a statement showing the calculation of (i) any applicable Domestic
CD Rate (Adjusted), (ii) any applicable Eurocurrency Rate (Reserve Adjusted) or
(iii) the rate of interest per annum applicable to Negotiated Loans or Local
Currency Loans hereunder.
3.5 COMPUTATION OF INTEREST. Interest shall be computed for the actual
number of days elapsed (with interest accruing on the first day, but not the
last day, of such Loan) on the basis of (a) with respect to Domestic CD Loans
and Eurocurrency Loans, a 360 day year, (b) with respect to Base Rate Loans, a
365 or 366 day year, as the case may be, (c) with respect to Negotiated Loans, a
365 or 366 day year, as the case may be, or such other basis as is agreed to by
the Company and the Relevant Bank, and (d) with respect to Local Currency Loans,
on a basis consistent with local customs that is agreed to by the Relevant Bank
and the Company.
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SECTION 4 FEES.
4.1 COMMITMENT FEE. The Company agrees to pay to each Bank a commitment
fee, for the period from and including the date of this Agreement to the
Revolving Period Termination Date, on the daily average of the Unused Amount of
such Bank's Commitment hereunder equal to the Applicable Commitment Fee in
effect from time to time times the Unused Amount. Such commitment fee shall be
payable quarterly in arrears on the tenth day of each April, July, October, and
January (the first such payment to be made on January 10, 1998) for the
quarterly period ended on the last day of the preceding month and on the
Revolving Period Termination Date. The Company may make such payments according
to the Electronic Payment Instructions.
4.2 COMPUTATION OF FEES. Fees shall be computed for the actual number of
days elapsed on the basis of a 365 or 366 day year, as the case may be.
SECTION 5 REDUCTION OR TERMINATION OF THE COMMITMENTS; PREPAYMENT.
5.1 REDUCTION OR TERMINATION OF THE COMMITMENTS. The Company may from time
to time prior to the Termination Date on at least three Business Days' prior
written notice given by an Authorized Person to any Bank permanently reduce the
amount of such Bank's Commitment to an amount not less than the aggregate unpaid
principal amount of the Loans made by such Bank then outstanding. Any such
reduction shall be in an aggregate amount of not less than 1,000,000 U.S.
Dollars, or such lesser amount of such Bank's Unused Amount then remaining.
5.2 OPTIONAL PREPAYMENT. The Company may from time to time prepay the Loans
in whole or in part, provided that (a) an Authorized Person shall give the
Relevant Bank not less than three Business Days' prior notice thereof,
specifying the Loans to be prepaid, and the date and amount of prepayment and
(b) each partial prepayment shall be in the principal amount of 1,000,000 U.S.
Dollars (or the Eurocurrency or Local Equivalent Amount thereof) or such lesser
amount as is then outstanding on the Loan being prepaid.
5.3 MANDATORY PREPAYMENT. On each day on which the aggregate outstanding
principal amount of Loans owing to any Bank on such day exceeds (whether as a
result of currency fluctuations or otherwise) such Bank's Commitment hereunder,
the Company shall pay to such Bank on demand a mandatory prepayment in the
amount of such excess. Mandatory prepayments required by this Section 5.3 shall
be applied first to Base Rate Loans until paid in full and then, at the
Company's election and in the order specified by the Company, to Fixed Rate
Loans.
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SECTION 6 MAKING AND APPLICATION OF PAYMENTS.
6.1 MAKING OF PAYMENTS. Except as otherwise provided in Section 11.2
hereof, all payments (including those made pursuant to Section 5) of principal
of, or interest on, the Loans shall be made by the Company to the Relevant Bank
in immediately available funds in the Obligation Currency.
6.2 APPLICATION OF CERTAIN PAYMENTS. Each payment of principal on any Loan
shall be applied first to Base Rate Loans and then to such of the other Loans as
the Company shall direct by written or telephonic notice given by an Authorized
Person to the Relevant Bank on or before the date of such payment, or in the
absence of such notice, as the Relevant Bank shall determine in its discretion.
6.3 DUE DATE EXTENSION. If any payment of principal or interest with
respect to any of the Loans or Notes falls due on a Saturday, Sunday, or other
day which is not a Business Day, then such due date shall be extended to the
next following Business Day (except as provided in the last sentence of the
definition of Interest Period), and additional interest shall accrue and be
payable for the period of such extension.
SECTION 7 INCREASED COSTS AND TAXES.
7.1 INCREASED CAPITAL.
(a) If, after the date of this Agreement, the adoption of any
applicable law, rule, or regulation regarding capital adequacy, or
any change therein, or change in the interpretation or
administration thereof by any governmental authority, central
bank, or comparable agency charged with the interpretation or
administration thereof, or compliance by any Bank 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 the effect of reducing the rate of return on such
Bank's capital as a consequence of its obligations hereunder to a
level below that which such Bank would have achieved but for such
adoption, change, or compliance (taking into consideration such
Bank's policies with respect to capital adequacy) by an amount
deemed by such Bank to be material, then from time to time within
15 days after demand by such Bank, the Company shall pay to such
Bank such additional amount or amounts as will compensate such
Bank for such reduction; provided, that, no Bank shall request,
and the Company shall not be obligated to pay, any amounts in
excess of the amounts charged by such Bank to similarly situated
borrowers of such Bank under revolving credit facilities similar
to the one provided herein. Notwithstanding the foregoing, a Bank
shall not be entitled to compensation from the Company for any
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such additional amounts incurred more than 30 days before the date
on which the Bank notifies the Company of any event which would
entitle the Bank to compensation pursuant to this Section 7.1.
(b) Each Bank will promptly notify the Company of any event of which
it has knowledge that will entitle such Bank to compensation
pursuant to this Section 7.1, together with a certificate signed
by an authorized officer of the Bank setting forth the basis of
such demand and certifying that the amounts demanded hereunder are
not in excess of the amounts charged by such Bank to similarly
situated borrowers of such Bank under revolving credit facilities
similar to the one provided herein. The Bank will designate a
different lending office if such designation will avoid the need
for, or reduce the amount of, such compensation and will not, in
the reasonable judgment of such Bank, be otherwise disadvantageous
to such Bank or contrary to its stated policies. The Bank's
certification of the additional amount or amounts to be paid to it
hereunder shall be conclusive in the absence of demonstrable
error. In determining such amount, such Bank may use reasonable
averaging and attribution methods.
7.2 INCREASED COSTS. If, after the date hereof, the adoption of any
applicable law, rule, or regulation or any change therein, or any change in the
interpretation or administration thereof, or compliance by any Bank with any
request, or directive (whether or not having the force of law) of any such
authority, central bank, or comparable agency,
(a) shall subject any Bank to any tax, duty, or other charge with
respect to its Fixed Rate Loans, its Notes or its obligation to
make Fixed Rate Loans, or shall change the basis of taxation of
payments to any Bank of the principal of or interest on its Fixed
Rate Loans or any other amounts due under this Agreement in
respect of its Fixed Rate Loans or its obligation to make Fixed
Rate Loans (except for the imposition of any tax or changes in the
rate of tax imposed on the overall income of such Bank); or
(b) shall impose, modify, or deem applicable any reserve (including,
without limitation, any reserve imposed by the Board of Governors
of the Federal Reserve System, but excluding any reserve included
in the determination of interest rates pursuant to Section 3),
special deposit, or similar requirement against assets of,
deposits with or for the account of, or credit extended by, any
Bank;
and as a result of any of the foregoing the cost to such Bank of making or
maintaining any Fixed Rate Loan is increased (or a cost is imposed on such
Bank), or the amount of any sum received or receivable by such Bank under this
Agreement or under its
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<PAGE> 15
Notes with respect thereto is reduced, then within 15 days after demand by such
Bank (which demand shall be accompanied by a statement setting forth the basis
of such demand), the Company shall pay directly to such Bank such additional
amount or amounts as will compensate such Bank for such increased cost or such
reduction. Notwithstanding the foregoing, a Bank shall not be entitled to any
compensation from the Company for any such increased cost or such reduction
attributable to any period that is more than 30 days before the date on which
the Bank notifies the Company of any event which would entitle the Bank to
compensation pursuant to this Section 7.2. No Bank is entitled to reimbursement
for any amounts paid as a result of taxes currently imposed on such Bank.
7.3 BASIS FOR DETERMINING INTEREST RATE INADEQUATE. If with respect to any
Interest Period:
(a) a Bank reasonably determines that deposits in a requested
Eurocurrency (in the applicable amounts) are not being offered to
the Bank in the relevant market for such Interest Period requested
by the Company, or a Bank otherwise reasonably determines (which
determination shall be binding and conclusive on all parties) that
by reason of circumstances affecting the interbank eurocurrency
market adequate and reasonable means do not exist for ascertaining
the applicable Eurocurrency Rate (Reserve Adjusted); or
(b) a Bank advises the Company that the making or funding of
Eurocurrency Loans has become impracticable as a result of an
event occurring after the date of this Agreement which in the
opinion of such Bank materially affects Eurocurrency Loans,
then: (i) the affected Bank shall promptly notify the Company of such
circumstance, (ii) so long as such circumstances shall continue the affected
Bank shall not be under any obligation to make, Continue, or Convert Loans into
Eurocurrency Loans, and (iii) on the last day of the then current Interest
Period for Eurocurrency Loans, such Eurocurrency Loans shall, unless then repaid
in full or Converted into a Loan of a different type pursuant to Section 1.5,
automatically Convert to Base Rate Loans.
7.4 CHANGES IN LAW RENDERING CERTAIN LOANS UNLAWFUL. In the event that
there occurs after the date hereof any change in applicable laws or regulations
(including the adoption of any new laws), or any change in the interpretation of
applicable laws or regulations by any governmental or other regulatory body
charged with the administration thereof, that makes it unlawful for a Bank to
make, maintain, or fund a type of Fixed Rate Loans, then (a) such Bank shall
promptly notify the Company of such circumstance, (b) the obligation of such
Bank to make, Continue, or Convert Loans into the type of Fixed Rate Loans made
unlawful for that Bank shall, upon the effectiveness of such event, be suspended
for the duration of such unlawfulness, and (c) on the last day of the current
Interest Period for Fixed Rate Loans of such type (or, in any event, if the Bank
affected by such change so requests, on such earlier date as
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<PAGE> 16
may be required by the relevant law, regulation, or interpretation), the Fixed
Rate Loans of such type made by such Bank shall, unless then repaid in full or
Converted into a Loan of a different type pursuant to Section 1.5, automatically
Convert to Base Rate Loans.
7.5 FUNDING LOSSES. The Company hereby agrees that upon demand by any Bank
(which demand shall be accompanied by a statement setting forth the basis for
the calculations of the amount being claimed), the Company will indemnify such
Bank against any net loss or expense which such Bank sustains or incurs
(including, without limitation, any net loss or expense incurred by reason of
the liquidation or reemployment of deposits or other funds acquired by such Bank
to fund or maintain Fixed Rate Loans), as reasonably determined by such Bank, as
a result of (a) any payment or prepayment or Conversion of any Fixed Rate Loan
of such Bank on a date other than the last day of an Interest Period for such
Loan, or (b) any failure of the Company to borrow, Continue, or Convert any
Loans on a date specified therefor in a notice of borrowing (which shall not
include the Company's notice of intention to request a Eurocurrency Loan),
Continuation, or Conversion pursuant to this Agreement.
7.6 CURRENCY INDEMNITY.
(a) The obligation of the Company under this Agreement and the Notes
to make payments in Dollars or in any Eurocurrency or Local
Currency in which the Loans or any portion thereof are outstanding
(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 to which such tender or recovery shall result
in the effective receipt by the Banks of the full amount of the
Obligation Currency expressed to be payable under this Agreement
or the Notes. If, for the purpose of obtaining or enforcing
judgment against the Company in any court or in any jurisdiction,
it becomes necessary to convert into 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 under the Notes, the conversion shall be made,
at the option of the Relevant Bank, at the rate of exchange
prevailing on the Business Day immediately preceding the day on
which the judgment is given (such Business Day as the case may be,
being hereinafter in this Section 7.6 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 Company agrees to pay such
additional amounts as may be necessary to ensure that the amount
paid in the Judgment Currency, when converted at the
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<PAGE> 17
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) Any amount due from the Company under the foregoing subparagraph
will be due as a separate debt and shall not be affected by
judgment being obtained for any other sums due otherwise
hereunder.
7.7 INCREASED TAX COSTS. The Company agrees to make all payments or
reimbursements under this Agreement free and clear of, and without deduction
for, any future taxes (including withholding taxes) imposed (except for any tax
or changes in the rate of tax imposed on overall income of any Bank) on payments
of principal, interest and fees or charges under the Agreement which are
attributable to, or represent, the application of any such tax for any time
period after the Company has received notice of such tax from such Bank. Such
Bank will use its reasonable efforts to minimize any taxes and will designate a
different lending office if such designation will avoid the need for, or reduce
the amount of, such tax(es) and will not, in the reasonable judgment of such
Bank, be otherwise disadvantageous to such Bank or contrary to its stated
policies. In the event that the Company is required to directly pay any such
taxes, the Company agrees to furnish such Bank with official tax receipts
evidencing payment of such taxes within forty-five (45) days after the due date
for each such payment. Each Bank agrees that in the event that any such
additional amount paid or reimbursed by the Company to or for such Bank in
respect of any taxes be recovered, in whole or in part, by such Bank (by credit,
offset, deduction or otherwise), against or in computing any income, franchise
or other taxes, such Bank will promptly reimburse the Company the amount of such
recovery. A transferee of any interest in the Agreement or the Notes shall not
be entitled to the benefits of this Section 7.7 with respect to any taxes which
would not have been incurred if there had been no transfer.
SECTION 8 WARRANTIES.
The Company warrants to the Banks as of the date of this Agreement that:
8.1 CORPORATE ORGANIZATION. The Company is a corporation duly incorporated
and in good standing under the laws of the State of Ohio and the Company is duly
qualified and in good standing as a foreign corporation authorized to do
business in each jurisdiction of the United States where, because of the nature
of its activities or properties, such qualification is required and where the
failure to be so qualified would materially and adversely affect the
consolidated financial condition of the Company and its Consolidated
Subsidiaries taken as a whole.
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<PAGE> 18
8.2 AUTHORIZATION; NO CONFLICT. The execution, delivery, and performance by
the Company of this Agreement and the Notes are within the Company's corporate
powers, have been duly authorized by all necessary corporate action, and do not
and will not contravene or conflict with any provision of applicable law in
effect on the date hereof or of the Amended Articles of Incorporation or
Regulations of the Company or of any agreement for borrowed money or other
material agreement binding upon the Company. The Company has duly executed and
delivered this Agreement.
8.3 VALIDITY AND BINDING NATURE. This Agreement is, and the Notes when duly
executed and delivered will be, legal, valid and binding obligations of the
Company enforceable against the Company in accordance with their respective
terms.
8.4 FINANCIAL STATEMENTS. The Company's audited consolidated financial
statements as at December 31, 1996 and its unaudited consolidated financial
statements as at September 30, 1997, copies of which have been furnished to each
Bank, have been prepared in accordance with GAAP, applied on a basis consistent
with that of the preceding fiscal year, and fairly present in all material
respects the consolidated financial condition and results of operations of the
Company and its Consolidated Subsidiaries as of the dates and for the periods
indicated, as applicable, and since the dates thereof until the date of this
Agreement there has been no material adverse change in the consolidated
financial condition of the Company and its Consolidated Subsidiaries taken as a
whole.
8.5 LITIGATION. Except as set forth in Schedule 8.5, there are no material
legal proceedings, other than ordinary routine litigation incidental to the
business, to which the Company or any of its Consolidated Subsidiaries is a
party or to which any of their respective properties is subject that are
required to be disclosed in the Company's periodic reports under the Securities
Exchange Act of 1934 and that have not been so disclosed.
8.6 COMPLIANCE WITH ERISA. Each member of the controlled group of
corporations (as defined in Section 414(b) of the Internal Revenue Code of
1986), which includes the Company (the "TRW GROUP"), has (i) fulfilled its
obligations under the minimum funding standards of Part 3 of Title I of the
Employee Retirement Income Security Act of 1974 ("ERISA") and Section 412 of the
Internal Revenue Code of 1986 ("CODE") with respect to each defined benefit plan
(as defined in Section 3 (35) of ERISA) maintained by a member of the TRW Group
("PLAN") and (ii) is in compliance in all material respects with the presently
applicable provisions of ERISA and the Code with respect to each such Plan. No
member of the TRW Group has (x) sought a waiver of the minimum funding standard
under Section 412 of the Code in respect of any Plan, (y) failed to make any
contribution or payment required to be made to a Plan or to any multi-employer
plan (as defined in Section 3 (37)(A) of ERISA) or made any amendment to any
Plan which has resulted or could result in the imposition of a lien or the
posting of a bond or other security under ERISA or the Code or (z) incurred any
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<PAGE> 19
liability under Title IV of ERISA other than the liability to the Pension
Benefit Guaranty Corporation for premiums under Section 4007 of ERISA.
8.7 ENVIRONMENTAL MATTERS. The Company has conducted periodic reviews of
the effect of compliance with federal, state and local requirements relating to
the discharge of materials into the environment, in the course of which it has
identified and evaluated potential liabilities and costs. The Company has
established accruals for matters that are probable and reasonably estimable as
required by FASB Statement No. 5, "Accounting for Contingencies." To the
Company's knowledge, any liability that may result from the resolution of known
environmental matters in excess of amounts accrued therefor will not have a
material adverse effect on the financial position of the Company.
8.8 TAXES. The Company and its Consolidated Subsidiaries have filed all
United Stated federal income tax returns and all other material tax returns
which are required to have been filed by them (subject to any available
extensions) and have paid all taxes indicated as due on such returns. The
Company has made adequate and reasonable provision for all material taxes not
yet due and payable, if any, and all material assessments, if any.
8.9 GOVERNMENT REGULATION. Neither the Company nor any of its Consolidated
Subsidiaries is registered as a public utility under the Public Utility Holding
Company Act of 1935 or as an investment company under the Investment Company Act
of 1940.
SECTION 9 COVENANTS.
Until the later of (i) the expiration or termination of the Commitments and
(ii) all obligations of the Company hereunder and under the Notes are paid in
full, the Company agrees that, unless at any time the Majority Banks shall
otherwise expressly consent in writing:
9.1 REPORTS. CERTIFICATES AND OTHER INFORMATION.
9.1.1 AUDIT REPORT. Within 120 days after each fiscal year of the
Company, the Company will provide to each Bank a copy of the Company's Annual
Report to Shareholders and its Annual Report on Form 10-K for the year then
ended, as filed with the Securities and Exchange Commission and which will
include an annual audit report of the Company, prepared on a consolidated basis
and in accordance with the Company's then current method of accounting, which
methods must be in accordance with GAAP, duly certified by independent certified
public accountants of nationally recognized standing selected by the Company.
9.1.2 QUARTERLY REPORTS. Within 60 days after each quarter (except the
last quarter) of each fiscal year of the Company, the Company will provide to
each
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<PAGE> 20
Bank a copy of the Company's Quarterly Report on Form 10-Q for the quarter then
ended, as filed with the Securities and Exchange Commission.
9.1.3 COMPLIANCE CERTIFICATES. Contemporaneously with the furnishing
of a copy of each Annual Report on Form 10-K provided for in Section 9.1.1 and
of each Quarterly Report on Form 10-Q provided for in Section 9.1.2, the Company
will provide to each Bank a duly completed certificate in the form of Exhibit B
with appropriate insertions (each such certificate called a "COMPLIANCE
CERTIFICATE"), dated not more than 10 days prior to the date furnished, signed
by an officer of the Company, showing compliance with the Consolidated Net Worth
covenant set forth in Section 9.2, and to the effect that no Event of Default or
Unmatured Event of Default has occurred and is continuing or, if there is any
such an event, describing it and the steps, if any, being taken to cure it.
9.1.4 CURRENT REPORTS. The Company will provide to each Bank copies of
each Current Report on Form 8-K filed by the Company with the Securities and
Exchange Commission, promptly upon the filing thereof.
9.1.5 OTHER INFORMATION. The Company will provide to a Bank such other
information concerning the Company as such Bank may reasonably request from time
to time.
9.2 NET WORTH. The Company will not permit Consolidated Net Worth to be
less than 1,600,000,000 U.S. Dollars less an amount equal to the lesser of (i)
the aggregate amount expended by the Company subsequent to December 31, 1995 for
the repurchase of its common stock and (ii) 600,000,000 U.S. Dollars.
9.3 LIENS.
(a) The Company will not, and will not permit any Domestic Subsidiary
to, directly or indirectly, create or assume any mortgage,
encumbrance, lien, pledge, charge, or security interest of any
kind (collectively and individually, a "MORTGAGE" or "LIEN") upon
or in any of its interests in any Principal Property or upon or in
any shares of capital stock or indebtedness of any Domestic
Subsidiary, whether such interest, capital stock or indebtedness
is now owned or hereafter acquired, if such mortgage secures or is
intended to secure, directly or indirectly, the payment of any
indebtedness for money borrowed evidenced by notes, bonds,
debentures, or other written evidences of indebtedness (such
indebtedness for money borrowed being hereafter in Sections 9.3
and 9.4 collectively called "DEBT") without making effective
provision, and the Company in such case will make or cause to be
made effective provision, whereby all of the Loans shall be
secured by such mortgage equally and ratably with any other Debt
thereby secured; excluding, however, from the operation of this
Section 9.3:
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<PAGE> 21
(i) mortgages on any Principal Property acquired, constructed,
or improved by the Company or any Domestic Subsidiary after
July 1, 1992 which are created or assumed contemporaneously
with, or within 120 days after, such acquisition or
completion of such construction or improvement to secure or
provide for the payment of any part of the purchase price
of such Principal Property or the cost of such construction
or improvement incurred after July 1, 1992, or, in addition
to mortgages contemplated by clauses (ii) and (iii) below,
mortgages on any such Principal Property existing at the
time or placed thereon at the time of acquisition or
leasing thereof by the Company or any Domestic Subsidiary,
or conditional sales agreements or other title retention
agreements with respect to any Principal Property now owned
or leased or hereafter acquired or leased by the Company or
a Domestic Subsidiary;
(ii) mortgages on property (including shares of capital stock or
indebtedness of a corporation) of a corporation existing at
the time such corporation becomes a Domestic Subsidiary or
is merged or consolidated with the Company or a Domestic
Subsidiary or existing at the time of a sale, lease, or
other disposition of the properties of such corporation (or
a division thereof) or other Person as an entirety or
substantially as an entirety (which includes the sale,
lease, or other disposition of all or substantially all the
assets thereof) to the Company or a Domestic Subsidiary,
provided that no such mortgage shall extend to any other
Principal Property of the Company or any Domestic
Subsidiary or to any shares of capital stock or any
indebtedness of any Domestic Subsidiary;
(iii) mortgages created by the Company or a Domestic Subsidiary
to secure indebtedness of the Company or a Domestic
Subsidiary to the Company or to a Wholly Owned Domestic
Subsidiary;
(iv) mortgages in favor of the United States of America or any
State, territory or possession thereof, or any foreign
country or any department, agency, instrumentality, or
political subdivision of any of such domestic or foreign
jurisdictions to secure partial, progress, advance, or
other payments pursuant to any contract or statute or to
secure any debt incurred for the purpose of financing all
or any part of
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<PAGE> 22
the purchase price of, or the cost of constructing, the
property subject to such mortgages; and
(v) mortgages for the sole purpose of extending, renewing, or
replacing (or successively extending, renewing, or
replacing) in whole or in part any mortgage existing on
July 1, 1992 or referred to in the foregoing clauses (i) to
(iv) inclusive or of any debt secured thereby; provided,
however, that the principal amount of indebtedness secured
thereby shall not exceed the principal amount of
indebtedness so secured at the time of such extension,
renewal, or replacement, and that such extension, renewal,
or replacement mortgage shall be limited to all or a part
of the property which secured the mortgage so extended,
renewed, or replaced (plus improvements on such property).
(b) Notwithstanding the provisions of paragraph (a) of this Section
9.3, the Company or any Domestic Subsidiary may, without equally
and ratably securing all the Loans, create or assume mortgages
which would otherwise be subject to the foregoing restrictions if
at the time of such creation or assumption, and after giving
effect thereto, Exempted Indebtedness does not exceed 15% of
Consolidated Net Tangible Assets determined as of a date not more
than 90 days prior thereto.
9.4 SALE AND LEASEBACK.
(a) The Company will not, and will not permit any Domestic Subsidiary
to, sell, lease or transfer any Principal Property owned by the
Company or a Domestic Subsidiary as an entirety, or any
substantial portion thereof, to anyone other than a Wholly Owned
Domestic Subsidiary (or the Company or a Wholly Owned Domestic
Subsidiary in the case of a Domestic Subsidiary) with the
intention of taking back a lease of such property (herein referred
to as a "SALE AND LEASEBACK TRANSACTION") except a lease for a
period of not more than 36 months by the end of which it is
intended that the use of such property by the lessee will be
discontinued; provided, that, notwithstanding the foregoing, the
Company or any Domestic Subsidiary may sell any such property and
lease it back if the net proceeds of such sale are at least equal
to the fair value (as determined by resolution adopted by the
Board of Directors of the Company) of such property, and (i) the
Company or such Domestic Subsidiary would be entitled pursuant to
paragraph (a) of Section 9.3 to create Debt secured by a mortgage
on the property to be leased in an amount equal to the
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<PAGE> 23
Attributable Debt with respect to such Sale and Leaseback
Transaction without equally and ratably securing all the Loans, or
(ii) if such sale or transfer does not come within the exception
provided by the preceding clause (i), the net proceeds of such
sale shall, and in any such case the Company covenants that they
will, within 120 days after such sale, be applied (to the greatest
extent possible) either to the repayment of the Loans then
outstanding when due (whereupon the Commitments hereunder shall be
reduced, on a pro rata basis, to the extent that such net proceeds
are so applied) or to the retirement of other Consolidated Funded
Debt of the Company ranking at least on a parity with the Loans,
or in part to one or more of such alternatives and in part to
another.
(b) Notwithstanding the provisions of paragraph (a) of this Section
9.4, the Company or any Domestic Subsidiary may enter into Sale
and Leaseback Transactions if, at the time of such entering into,
and after giving effect thereto, Exempted Indebtedness does not
exceed 15% of Consolidated Net Tangible Assets determined as of a
date not more than 90 days prior thereto.
9.5 MERGERS, CONSOLIDATIONS, SALES. The Company shall not consolidate with,
or sell or convey all or substantially all its assets to, or merge into, any
other Person, unless (a) the Company is the surviving corporation of such
transaction; or (b) the Company is the nonsurviving party to a merger or
consolidation, the primary purpose of which is to effect a reincorporation of
the Company under the laws of another state.
SECTION 10 CONDITIONS OF LENDING.
The obligation of each Bank to make its Loans is subject to the following
conditions precedent:
10.1 INITIAL LOAN TO THE COMPANY. The obligation of each Bank to make its
initial Loan to the Company is, in addition to the conditions precedent
specified in Section 10.3, subject to the condition precedent that such Bank
shall have received all of the following, each duly executed and dated the date
of such Loan (or such earlier date as shall be satisfactory to such Bank), in
form and substance satisfactory to such Bank:
10.1.1 NOTE. The Note of the Company payable to the order of such
Bank, substantially in the form of Exhibit A.
10.1.2 RESOLUTIONS. Certified copies of resolutions of the Board of
Directors of the Company authorizing the Company to obtain Loans hereunder.
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<PAGE> 24
10.1.3 INCUMBENCY AND SIGNATURES. A certificate of the Secretary or an
Assistant Secretary of the Company certifying the names of the officer or
officers of the Company who have signed or will sign this Agreement, the Notes,
and other documents provided for in this Agreement to be executed by the
Company, together with a sample of the true signature of each such officer, and
a certificate of authorization setting forth each Person who is authorized to
effect Loans and other transactions hereunder, together with a sample of the
true signature of each such Authorized Person. Each Bank may conclusively rely
on such certificates until it shall have received notice to the contrary.
10.1.4 OPINION OF COUNSEL. The opinion of counsel to the Company,
substantially in the form of Exhibit C.
10.2 LOANS TO DESIGNATED SUBSIDIARIES. The obligation of each Bank to make
any Loans to any Designated Subsidiary is subject to the condition precedent
that such Bank shall have received the following:
10.2.1 RESOLUTIONS. A certified copy of the resolutions of the
appropriate governing body of the Designated Subsidiary that requested the Loan
authorizing it to obtain Loans hereunder or such other evidence of corporate
authority as is customary in the country of domicile of the Designated
Subsidiary.
10.2.2 ACCEPTANCE OF THIS AGREEMENT. A letter signed by an authorized
officer of such Designated Subsidiary evidencing its agreement to be bound by
the terms of this Agreement with respect to each Loan made to it hereunder.
10.2.3 INCUMBENCY AND SIGNATURES. A certificate of the Secretary or an
Assistant Secretary of the Designated Subsidiary certifying the name and
signature of the officer or officers of the Designated Subsidiary who have
signed or will sign the letter referenced in Section 10.2.2, together with a
sample of the true signature of each such officer, and a certificate of
authorization setting forth each Person who is authorized to effect Loans and
other transactions hereunder, together with a sample of the true signature of
each such Authorized Person. Each Bank may conclusively rely on such
certificates until it shall have received notice to the contrary.
10.3 ALL LOANS. The obligation of each Bank to make any Loan hereunder is
subject to the further conditions precedent that: (a) No Event of Default or
Unmatured Event of Default has occurred and is continuing or will result from
the making of such Loan, and (b) the warranties of the Company contained in
Sections 8.1, 8.2, and 8.3, are true and correct as of the date of such
requested Loan, with the same effect as though made on the date of such Loan.
10.4 CONVERSIONS. Except for Section 10.3(a), the conditions set forth in
Sections 10.1, 10.2, and 10.3 shall not apply to the Conversion of Loans from
one type to another type or Continuation of Loans.
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<PAGE> 25
SECTION 11 EVENTS OF DEFAULT AND THEIR EFFECT.
11.1 EVENTS OF DEFAULT. Each of the following shall constitute an Event of
Default under this Agreement:
11.1.1 NONPAYMENT OF NOTES OR FEES. Default in the payment when due of
any principal of any Note or default in the payment when due of interest on any
Note or fees payable by the Company hereunder and continuance of such failure to
pay interest or fees for five Business Days after written notice thereof to the
Company from the Bank to which such amounts are owed.
11.1.2 NONPAYMENT OF OTHER INDEBTEDNESS FOR BORROWED MONEY. Default in
the payment when due at maturity (subject to any applicable grace period) or by
acceleration of any other indebtedness for borrowed money having a principal
amount in excess of 50,000,000 U.S. Dollars of, or guaranteed by, the Company
("OTHER INDEBTEDNESS"), or default in the performance or observance of any
obligation or condition with respect to any such Other Indebtedness if such
default results in the acceleration of the maturity of any such Other
Indebtedness; provided, that, if such default shall subsequently be remedied,
cured, or waived prior to either the termination of Commitments or the
declaration that all Loans are immediately due and payable, in each case
pursuant to Section 11.2 hereof, and as a result the payment of such Other
Indebtedness is no longer due, the Event of Default existing hereunder by reason
thereof shall likewise be deemed thereupon to be remedied, cured, or waived and
no longer in existence, all without any further action by the parties hereto.
11.1.3 BANKRUPTCY OR INSOLVENCY. The Company generally fails to pay,
or admits in writing its inability to pay, debts as they become due; or the
Company applies for, consents to, or acquiesces in the appointment of, a
trustee, receiver, or other custodian for the Company or for a substantial part
of the property thereof, or makes a general assignment for the benefit of
creditors; or, in the absence of such application, consent or acquiescence, a
trustee, receiver, or other custodian is appointed for the Company or for a
substantial part of the property of the Company; or any bankruptcy,
reorganization, debt arrangement, or other case or proceeding under any
bankruptcy or insolvency law, or any dissolution or liquidation proceeding is
commenced in respect of the Company and if such case or proceeding is not
commenced by the Company, it is consented to or acquiesced in by the Company or
remains for 90 consecutive days undismissed or unstayed; or the Company takes
any corporate action to authorize any of the foregoing.
11.1.4 NONCOMPLIANCE WITH OTHER PROVISIONS. Failure by the Company to
comply with or to perform in any material respect any other provision of this
Agreement (and not constituting an Event of Default under any of the preceding
provisions of this Section 11.1) and continuance of such failure for 30 days
after written notice thereof to the Company from the Majority Banks.
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<PAGE> 26
11.1.5 WARRANTIES. Any warranty made by the Company in Sections 8 or
14.16 of this Agreement is breached or is incorrect when made in any material
respect and the Company shall fail to take corrective actions reasonably
satisfactory to the Majority Banks within 30 days after written notice thereof
to the Company from the Majority Banks, except only in the case of a breach of
the warranties contained in Section 8 or 14.16 made on the date of this
Agreement, in which case there shall be no opportunity to take corrective
actions.
11.1.6 JUDGMENTS. Any final and unappealable judgment or order from a
judicial or administrative body (which order or judgment is fully enforceable
against the Company or any of its Consolidated Subsidiaries in courts of the
United States of America or any state thereof) for the payment of money in
excess of 50,000,000 U.S. Dollars (after adjustments to reflect reductions for
credits and set-offs asserted in good faith by the Company) shall be rendered
against the Company, shall not have been discharged or vacated and shall have
been in effect, in its final and unappealable form, for a period of 30
consecutive days.
11.2 EFFECT OF EVENT OF DEFAULT. If any Event of Default described in
Section 11.1.3 shall occur, the Commitments (if they have not theretofore
terminated) shall immediately terminate and all Loans and Notes shall
automatically become immediately due and payable, all without notice of any
kind; and, in the case of any other Event of Default, the Majority Banks may
declare the Commitments (if they have not theretofore terminated) to be
terminated and the Outstanding Majority Banks may declare that all Loans and
Notes shall become immediately due and payable. The Majority Banks and the
Outstanding Majority Banks shall promptly advise the Company in writing of any
such declaration. Following the declaration that all Loans and Notes are
immediately due and payable, all payments made by the Company on account of the
Loans and Notes shall be made to the Administrator, which shall distribute such
payments on a pro rata basis (in relation to the amounts of outstanding Loans)
to Banks with outstanding Loans. Following such declaration, if any Bank
receives a payment that is not on a pro rata basis, such Bank will remit to the
Administrator any amount in excess of its pro rata portion. Upon receipt of any
such remittance, the Administrator will distribute such amount to the Banks with
outstanding Loans in order that all distributions will be pro rata. The effect
as an Event of Default of any event described in Section 11.1.1 or Section
11.1.3 may be waived only by the written concurrence of the holders of 100% of
the aggregate unpaid principal amount of the Notes and the Majority Banks, and
the effect as an Event of Default of any other event described in this Section
11 may be waived by the written concurrence of the Majority Banks and the
Outstanding Majority Banks.
SECTION 12 GUARANTY.
The Company hereby unconditionally, absolutely and irrevocably guarantees,
as primary obligor and not merely as surety, the repayment to each Relevant
Bank, when due pursuant to the terms and conditions of this Agreement, of the
amount of
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any Loan made pursuant to this Agreement to a Designated Subsidiary, together
with accrued interest on such Loan; provided, however, that before any amount
shall be deemed due and payable pursuant to this Section 12, the Relevant Bank
must first give notice to the Company of the nonpayment by the Designated
Subsidiary, and the Company shall have five Business Days from the receipt of
such notice to cure or cause to be cured any and all such nonpayments. The
Company's obligations hereunder constitute a guaranty of payment and not of
collection merely. The Company hereby waives notice of, and consents to, any
extensions of time of payment, renewals, compromises, settlements, releases or
other indulgences from time to time granted by the Relevant Bank in respect of
Loans made to Designated Subsidiaries. Except as otherwise provided in this
Section 12, the Company hereby waives presentment, protest, demand of payment,
notice of dishonor and all notices and demands whatsoever. The obligations of
the Company hereunder shall not be released, discharged or otherwise affected by
(i) any change in the corporate existence or constitution, structure or
ownership of any Designated Subsidiary or the Company, (ii) any insolvency,
bankruptcy, reorganization or similar proceeding affecting the Designated
Subsidiary or its assets or the Company or (iii) the existence of any claim,
set-off or other rights which the Company may have at any time against the
Relevant Bank or any other person. If at any time any payment of any obligation
guaranteed hereunder is rescinded or must otherwise be restored or returned upon
the insolvency, bankruptcy or reorganization of a Designated Subsidiary or
otherwise, the Company's obligations under this Section 12 with respect to such
payment shall be reinstated at such time as though such payment had not been
made. The Company shall not exercise any of its subrogation rights with respect
to amounts paid to a Relevant Bank pursuant to this Section 12 until all amounts
guaranteed hereunder payable to such Relevant Bank have been paid in full.
Following such payment in full with regard to a Relevant Bank, the Company shall
be entitled to subrogation in the Relevant Bank's rights and, upon the
reasonable request of the Company, the Relevant Bank agrees to cooperate with
the Company in enforcement of the Company's subrogation rights, including the
transfer and delivery by the Relevant Bank to the Company of any and all
evidence of indebtedness relating to such Loan within the possession or control
of the Relevant Bank.
SECTION 13 CERTAIN DEFINITIONS.
When used herein the following terms shall have the following meaning:
"AFFILIATE" means, with respect to a particular Person, any Person which,
directly or indirectly, controls, is controlled by, or is under common control
with, such Person. For purposes of this definition, control of a Person shall
mean the power to direct or cause the direction of the management and policies
of such Person whether by contract or otherwise.
"AGREEMENT" means this Agreement, as it may be amended, modified, or
supplemented and in effect from time to time.
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"APPLICABLE COMMITMENT FEE" means the percentage in effect from time to
time as set forth in the following table opposite the highest of the
then-current rating assigned to the Company's senior unsecured long-term debt by
Moody's Investors Service, Inc. ("MOODY'S") or Standard & Poor's Ratings Group
("S&P"):
Rating Applicable
(Moody's/S&P) Commitment Fee
--------------------- --------------
higher than A1/A+ 0.040%
A1/A+ 0.050%
A2/A 0.060%
A3/A- 0.070%
Baa1/BBB+ 0.080%
Baa2/BBB 0.105%
Baa3/BBB- 0.130%
lower than Baa3/BBB- 0.155%
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<PAGE> 29
"APPLICABLE MARGIN" means, at any time, the percentage set forth in the
following table opposite the highest of the then-current rating assigned to the
Company's senior unsecured long-term debt by Moody's or S&P:
Applicable Applicable
Margin for Margin for
Rating Domestic CD Eurocurrency
(Moody's/S&P) Loans Loans
----------------------------------------------------------------------
higher than A1/A+ 0.275% 0.175%
A1/A+ 0.300% 0.200%
A2/A 0.325% 0.225%
A3/A- 0.350% 0.250%
Baa1/BBB+ 0.400% 0.300%
Baa2/BBB 0.475% 0.375%
Baa3/BBB- 0.550% 0.450%
lower than Baa3/BBB- 0.600% 0.500%
"ASSESSMENT RATE" means, for any Domestic CD Loan (and for the purpose of
computing the Domestic CD Rate (Adjusted)), the annual assessment rate (rounded
upwards, if necessary, to the nearest 1/100 of 1%) applicable to the Relevant
Bank on its insured deposits under the Federal Deposit Insurance Act, determined
by annualizing the most recent assessment levied on the Relevant Bank by the
Federal Deposit Insurance Corporation (the "FDIC") with respect to such
deposits, after giving effect to the most recent rebate granted to the Relevant
Bank by the FDIC with respect to deposit insurance as well as the loss to the
Relevant Bank (determined in the good faith judgment of the Relevant Bank) of
the use of such rebate prior to the date credit is taken by the Relevant Bank
with respect to such rebate.
"ATTRIBUTABLE DEBT" means, as to any particular lease under which any
Person is liable at the time and at any date as of which the amount thereof is
to be determined, the lesser of (a) the fair value of the property subject to
such lease (as determined by the Directors of the Company) or (b) the total net
amount of rent required to be paid by such Person under such lease during the
remaining term thereof, discounted from the respective due dates thereof to such
date at the actual interest factor included in such rent. The net amount of rent
required to be paid under any such lease for any such period shall be the
aggregate amount of the rent payable by the lessee with respect to such period
after excluding amounts required to be paid on account of maintenance and
repairs, insurance, taxes, assessments, water rates and similar charges. In the
case of any lease which is terminable by the lessee upon the payment of a
penalty, such net amount shall also include the amount of such penalty, but no
rent shall be considered as required to be paid under such lease subsequent to
the first date upon which it may be so terminated.
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"AUTHORIZED PERSON" means, as to the Company, any person designated as such
in a certificate signed by the Chief Financial Officer, Treasurer, or Assistant
Treasurer of the Company, and, as to any Designated Subsidiary, means any person
designated as such in a certificate signed by one or more officers of the
Designated Subsidiary, as authorized by resolution of the Designated Subsidiary
or otherwise by law.
"BANKS" or "BANK" -- see Preamble.
"BASE RATE" means the higher of (i) the rate of interest per annum publicly
announced and in effect from time to time by the Relevant Bank at its Domestic
Office identified on the signature pages hereto as its prime, base or reference
rate for U.S. Dollar Loans or (ii) the Federal Funds Rate plus the Applicable
Margin for Eurocurrency Loans. The Base Rate shall change simultaneously with
each change in such announced prime, base or reference rate and Federal Funds
Rate, as applicable. The Base Rate may not be the lowest rate charged by the
Relevant Bank for commercial or other extensions of credit.
"BASE RATE LOAN" means any Loan of U.S. Dollars that bears interest at or
by reference to the Relevant Bank's Base Rate.
"BUSINESS DAY" means (i) in the case of a Business Day that relates to a
Eurocurrency Loan, any day of the year on which banks are open for business in
both New York and, with regard to any such Bank only, the city in which the
applicable Eurocurrency Office of such Bank is located and on which dealings are
carried on in the interbank eurocurrency market; (ii) in the case of a Business
Day that relates to a Base Rate Loan, a Domestic CD Loan, or a Negotiated Loan,
any day of the year on which banks are open for business in both New York and,
with regard to any such Bank only, the city in which the applicable Domestic
Office of such Bank is located; and (iii) in the case of a Business Day that
relates to a Local Currency Loan, any day of the year on which the local office
of the Relevant Bank in that locality is open for business.
"COMMITMENT(S)" means the commitments of the Banks to make Loans hereunder;
and Commitment as to any Bank shall mean the commitment of such Bank to make
Loans hereunder in an aggregate amount not to exceed the U.S. Dollar amount set
forth opposite its signature hereto or any subsequent amendment hereto.
"COMPANY" -- see Preamble.
"COMPLIANCE CERTIFICATE" -- see Section 9.1.3 and Exhibit B.
"CONSOLIDATED FUNDED DEBT" means the Funded Debt of the Company and its
Consolidated Subsidiaries consolidated in accordance with GAAP.
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<PAGE> 31
"CONSOLIDATED NET TANGIBLE ASSETS" means the total of all assets of the
Company and its Consolidated Subsidiaries appearing on a consolidated balance
sheet prepared in accordance with GAAP, including the equity in and the net
amount of advances to other Subsidiaries, after deducting therefrom (without
duplication of deductions) as shown on such balance sheet, the sum of:
(i) intangible assets, including goodwill, cost of acquired businesses
in excess of recorded net assets at acquisition dates, patents,
licenses, trademarks, trade names, copyrights, unamortized debt
discount and expense less unamortized debt premium, and corporate
organization expense (but excluding deferred charges and prepaid
expense);
(ii) any write-up of the book value of any assets (other than equity in
Subsidiaries which are not Consolidated Subsidiaries and other than
as a result of currency revaluations) resulting from the revaluation
thereof subsequent to March 31, 1992;
(iii) all liabilities of the Company and its Consolidated Subsidiaries
other than: Funded Debt; capital stock; surplus; surplus reserves;
reserves for deferred Federal income taxes arising from accelerated
depreciation, investment and other tax credits, and similar
provisions; and contingency reserves not allocated for any
particular purpose;
(iv) reserves for depreciation and amortization and other reserves (other
than the reserves referred to in the preceding clause(iii)); and
(v) any minority interest in the shares of stock and surplus of any
Consolidated Subsidiary.
"CONSOLIDATED NET WORTH" means at any date the sum of the consolidated
shareholders' investment and minority interests of the Company and its
Consolidated Subsidiaries determined as of such date. Consolidated shareholders'
investment and minority interests of the Company shall be as included in the
annual and quarterly financial statements of the Company, as applicable.
"CONSOLIDATED SUBSIDIARY" means each Subsidiary other than (a) any
Subsidiary the accounts of which (i) are not required by GAAP to be consolidated
with those of the Company for financial reporting purposes and (ii) were not
consolidated with those of the Company in the Company's then most recent Annual
Report to Shareholders and are not intended by the Company to be consolidated
with those of the Company in its next Annual Report to Shareholders, or (b) any
Subsidiary the primary business of which consists of financing the sale or lease
of merchandise, equipment or services by the Company or any Subsidiary or
owning, leasing, dealing
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<PAGE> 32
in or developing real property, or providing services directly related thereto,
or which is otherwise primarily engaged in the business of a finance or real
estate company.
"CONTINUE," "CONTINUATION" and "CONTINUED" shall refer to a continuation of
Loans pursuant to Section 1.5.
"CONVERT," "CONVERSION" and "CONVERTED" shall refer to a conversion of
Loans pursuant to Sections 1.5, 3.3, 7.3, or 7.4.
"DEBT" -- see Section 9.3.
"DESIGNATED SUBSIDIARY" means any Subsidiary of the Company which (i) the
Company from time to time designates in writing signed by the Chief Financial
Officer, Treasurer, or Assistant Treasurer of the Company as a Designated
Subsidiary entitled to receive Eurocurrency and Local Currency Loans hereunder
and (ii) the Relevant Bank has not objected in writing to such designation of a
Designated Subsidiary within thirty (30) days of the Relevant Bank's receipt of
the Company's designation. Such designation shall contain the address of the
Subsidiary which shall be used to give notice to the Subsidiary pursuant to
Section 14.3.
"DOMESTIC CD LOAN" shall mean any Loan of U. S. Dollars that bears
interest at a rate determined by reference to the Relevant Bank's Domestic CD
Rate (Adjusted).
"DOMESTIC CD RATE" means, with respect to any Interest Period for any
Domestic CD Loan, the rate of interest determined by the Relevant Bank to be the
average (rounded upward, if necessary, to the nearest 1/100 of 1%) of the rates
quoted to the Relevant Bank on the first day of such Interest Period by two
certificate of deposit dealers in New York of recognized standing selected by
the Relevant Bank for the purchase from the Relevant Bank or major commercial
banks at face value of certificates of deposit issued by the Relevant Bank in an
amount equal or comparable to the amount of the Domestic CD Loan and having a
maturity equal to such Interest Period; provided, that, if such quotations from
such dealers are not available to the Relevant Bank, it shall determine a
reasonably equivalent rate on the basis of another source or sources selected by
it.
"DOMESTIC CD RATE (ADJUSTED)" means, with respect to any Interest Period
for any Domestic CD Loan, a rate per annum (rounded upwards, if necessary, to
the nearest 1/100 of 1%) determined pursuant to the following formula:
Domestic CD
Domestic CD = Rate + Assessment
Rate (Adjusted) ------------ Rate
(1 - Reserve
Requirement)
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<PAGE> 33
"DOMESTIC OFFICE" means, with respect to any Bank, the office of such Bank
or Affiliate of such Bank, designated as such under such Bank's signature
hereto, or such other office of such Bank or Affiliate of such Bank, as such
Bank may hereafter from time to time designate as its Domestic Office.
"DOMESTIC SUBSIDIARY" means each Consolidated Subsidiary other than: (a)
any Consolidated Subsidiary which the Directors of the Company reasonably
determine not to be material to the business or financial condition of the
Company; (b) any Consolidated Subsidiary the major portion of the assets of
which are located, or the major portion of the business of which is carried on,
outside the United States of America, its territories and possessions; (c) any
Consolidated Subsidiary which, during the 12 most recent calendar months (or
such shorter period as shall have elapsed since its organization) derived the
major portion of its gross revenues from sources outside the United States of
America; (d) any Consolidated Subsidiary the major portion of the assets of
which consists of securities or obligations, or both, of one or more
corporations (whether or not Consolidated Subsidiaries) of the types described
in the preceding clauses (b) and (c); and (e) any Consolidated Subsidiary
organized after March 31, 1992 which the Company intends shall be operated in
such manner as to come within one or more of the preceding clauses (b), (c) and
(d).
"ELECTRONIC PAYMENT INSTRUCTIONS" means the Bank Routing and account number
information identifying the account of each Bank to receive the payment of
Commitment Fees. Such Electronic Payment Instructions for each Bank are set
forth below the signature block of such Bank to this Agreement and may be
changed at any time by written notice by such Bank to the Company.
"EUROCURRENCY" means any freely transferable and convertible currency on
deposit outside the country of issuance.
"EUROCURRENCY LOAN" means any Loan of a Eurocurrency that bears interest at
a rate determined by reference to the Relevant Bank's Eurocurrency Rate (Reserve
Adjusted).
"EUROCURRENCY OFFICE" means, with respect to any Bank, the office of such
Bank or Affiliate of such Bank, designated as such under such Bank's signature
hereto, or such other office of such Bank or Affiliate of such Bank, as such
Bank may hereafter from time to time designate as its Eurocurrency Office. A
Eurocurrency Office may be, at the option of such Bank, either a domestic or
foreign office of such Bank or a domestic or foreign office of an affiliate of
such Bank.
"EUROCURRENCY OR LOCAL CURRENCY EQUIVALENT AMOUNT" means, in the case of a
Eurocurrency or Local Currency, on any Business Day, the amount of such currency
which would be freely converted into a specified amount of U.S. Dollars,
computed at the spot buying rate for dollars of the Relevant Bank at the close
of business on such day.
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<PAGE> 34
"EUROCURRENCY RATE" means, with respect to any Eurocurrency Loan for any
Interest Period, the rate per annum equal to the rate per annum at which
deposits of the currency of the Loan in immediately available funds are offered
by the Eurocurrency Office of the Relevant Bank two Business Days prior to the
beginning of such Interest Period to major banks in the interbank eurocurrency
market of such Eurocurrency Office for delivery on the first day of such
Interest Period and for the number of days comprised therein and in an amount
equal or comparable to the amount of the Eurocurrency Loan of the Relevant Bank
for such Interest Period.
"EUROCURRENCY RATE (RESERVE ADJUSTED)" means, with respect to any
Eurocurrency Loan for any Interest Period, a rate per annum (rounded upwards, if
necessary, to the nearest 1/100 of 1%) determined pursuant to the following
formula:
Eurocurrency Rate
Eurocurrency Rate = -----------------------
(Reserve Adjusted) 1-Eurocurrency Reserve
Percentage
"EUROCURRENCY RESERVE PERCENTAGE" means, with respect to each Interest
Period, that percentage (expressed as a decimal) prescribed by the Board of
Governors of the Federal Reserve System (or any successor) for determining
reserve requirements applicable to "Eurocurrency Liabilities" pursuant to
Regulation D or any other then applicable regulation of the Board of Governors
that prescribes reserve requirements applicable to "Eurocurrency Liabilities" as
presently defined in Regulation D.
"EVENT OF DEFAULT" means any of the events described in Section 11.1.
"EXEMPTED INDEBTEDNESS" means, as of any particular time, the sum of (i)
the aggregate principal amount of all then outstanding indebtedness for borrowed
money of the Company and Domestic Subsidiaries incurred after July 1, 1992 and
secured by any mortgage, security interest, pledge or lien other than those
permitted by paragraph (a) of Section 9.3 and (ii) all Attributable Debt
pursuant to Sale and Leaseback Transactions (as defined in Section 9.4) incurred
by the Company and Domestic Subsidiaries after July 1, 1992 at such time
outstanding other than that which is not prohibited by or is permitted pursuant
to paragraph (a) of Section 9.4.
"FEDERAL FUNDS RATE" means, for any Interest Period selected by the
Company, the average of rates for Federal funds for the Interest Period quoted
to the Relevant Bank by two leading brokers of Federal funds transactions in New
York City.
"FIXED RATE LOAN(S)" -- see Section 1.3.
"FUNDED DEBT" means all indebtedness for money borrowed having a maturity
of more than 12 months from the date such indebtedness was incurred or having a
maturity of 12 months or less but by its terms being renewable or extendable
beyond 12 months from the date such indebtedness was incurred at the option of
the borrower.
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<PAGE> 35
"GAAP" means generally accepted accounting principles in the United States
of America as in effect from time to time.
"INTEREST PERIOD" means, with respect to any Fixed Rate Loan, the period
commencing on the date such Loan was made, or on the date such Loan was
Converted from a Loan of a different type, or on the date of expiration of the
immediately preceding Interest Period for such Loan, and (i) ending 30, 60, 90,
120, 150, 180 days, or, if available, more than 180 days up to and including 360
days, thereafter in the case of a Domestic CD Loan, or (ii) ending one, two,
three, or six months, or, if available, more than six months up to and including
twelve months, thereafter in the case of a Eurocurrency Loan, all as the Company
or any Designated Subsidiary may specify pursuant to Section 1.4, 1.5, or 3.3;
the Interest Period for any Negotiated Loan or any Local Currency Loan shall be
as agreed by the Company or any Designated Subsidiary and the Relevant Bank
pursuant to Section 1.6 or 1.7. Each Interest Period for a Fixed Rate Loan that
would otherwise end on a day that is not a Business Day shall end on the next
succeeding Business Day (unless such next succeeding Business Day is the first
Business Day of a calendar month, in which case with respect to a Eurocurrency
Loan such Interest Period shall end on the next preceding Business Day).
"JUDGMENT CURRENCY" -- see Section 7.6.
"JUDGMENT CURRENCY CONVERSION DATE" -- see Section 7.6.
"LIEN" or "MORTGAGE" -- see Section 9.3.
"LOCAL CURRENCY" means, with respect to any Local Currency Loan, any legal
currency of the nation where the Local Currency Loan is being funded.
"LOCAL CURRENCY LOAN(S)" -- see Section 1.7.
"LOANS" or "LOAN" -- see Section 1.1.
"MAJORITY BANKS" means Banks having an aggregate Percentage of 66-2/3% or
more.
"NEGOTIATED LOAN(S)" -- see Section 1.6.
"NOTE(S)" -- see Section 2.2 and Exhibit A.
"OBLIGATION CURRENCY" -- see Section 7.6.
"OUTSTANDING MAJORITY BANKS" means Banks having 66-2/3% or more of the
aggregate principal amount of Loans outstanding.
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<PAGE> 36
"PERCENTAGE" means as to any Bank the percentage of such Bank's share of
the total Commitments of all Banks.
"PERSON" shall mean an individual or a corporation, partnership, trust,
incorporated or unincorporated association, joint venture, joint stock company,
government (or any agency or political subdivision thereof), or other entity of
any kind.
"PRINCIPAL PROPERTY" means any single manufacturing plant, engineering
facility or research facility owned or leased by the Company or a Domestic
Subsidiary other than any such plant or facility or portion thereof which the
Board of Directors reasonably determines not to be of material importance to the
Company and its Subsidiaries taken as a whole.
"PROPRIETARY INFORMATION" -- see Section 14.5.
"RELEVANT BANK" means, with respect to any Loan, the Bank that made the
Loan, and, prior to the making of such Loan or requested Loan, any Bank that has
been requested to make such Loan.
"RESERVE REQUIREMENT" means, with respect to each Interest Period, a
percentage (expressed as a decimal) equal to the daily average during such
Interest Period of the aggregate reserve requirement (including all basic,
supplemental, marginal, and other reserves and taking into account any
transitional adjustments or other scheduled changes in reserve requirements
during such Interest Period) specified under Regulation D of the Board of
Governors of the Federal Reserve System, or any other regulation of the Board of
Governors which prescribes reserve requirements applicable to nonpersonal time
deposits as presently defined in Regulation D, as then in effect, as applicable
to the class of banks of which the Relevant Bank is a member, on deposits of the
type used as a reference in determining the Domestic CD Rate and having a
maturity approximately equal to such Interest Period.
"REVOLVING PERIOD" -- see Section 1.1.
"REVOLVING PERIOD TERMINATION DATE" means the earlier to occur of (a)
December 8, 1998, subject to extension for one or more successive one-year
periods as to any Bank or Banks pursuant to Section 1.2, or (b) such other date
on which the Commitments shall terminate pursuant to Section 11.2.
"SALE AND LEASEBACK TRANSACTION" -- see Section 9.4.
"SUBSIDIARY" means a corporation of which the Company and/or its other
Subsidiaries own, directly or indirectly, such number of outstanding shares as
have more than 50% of the ordinary voting power for the election of directors.
"TERM-OUT MATURITY DATE" means December 8, 1999, unless the Revolving
Period Termination Date is extended as provided in Section 1.2, in which case
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<PAGE> 37
the Term-Out Maturity Date shall be the first anniversary of the Revolving
Period Termination Date as so extended.
"TYPE OF LOAN OR BORROWING" -- see Section 1.3. The various types of Loans
or borrowings available under this Agreement are as follows: Base Rate Loans or
borrowings and Fixed Rate Loans or borrowings. Fixed Rate Loans or borrowings
consist of Domestic CD Loans or borrowings, Eurocurrency Loans or borrowings,
Negotiated Loans or borrowings, and Local Currency Loans or borrowings.
"U.S. DOLLAR(S)" and the sign "$" shall mean lawful money of the United
States of America.
"UNMATURED EVENT OF DEFAULT" means any event that if it continues uncured
will, with lapse of time or notice or lapse of time and notice, constitute an
Event of Default.
"UNUSED AMOUNT" means the amount of the Commitment of the Relevant Bank
less any outstanding Loans made by such Bank. Loans in an Obligation Currency
other than U.S. Dollars will be translated into U.S. Dollars for purposes of
this calculation at the spot rate for dollars published in THE WALL STREET
JOURNAL on each day in which such Loan is outstanding (provided, that if such
day is not a Business Day, the applicable spot rate for such day should be the
spot rate on the Business Day immediately prior to such day).
"WHOLLY OWNED DOMESTIC SUBSIDIARY" means each Domestic Subsidiary all the
outstanding shares of which, other than directors' qualifying shares, shall at
the time be owned by the Company, or by the Company and one or more Wholly Owned
Domestic Subsidiaries, or by one or more Wholly Owned Domestic Subsidiaries.
SECTION 14 GENERAL.
14.1 WAIVER; AMENDMENTS. No delay on the part of any Bank or the holder of
any Note in the exercise of any right, power, or remedy shall operate as a
waiver thereof, nor shall any single or partial exercise by any of them of any
right, power, or remedy preclude other or further exercise thereof, or the
exercise of any other right, power, or remedy. No amendment, modification, or
waiver of, or consent with respect to, any provision of this Agreement or the
Notes shall in any event be effective unless the same shall be in writing and
signed and delivered by Banks having an aggregate Percentage of not less than
the aggregate Percentage expressly designated herein with respect thereto (or in
the case of the Outstanding Majority Banks, the aggregate principal amount
outstanding) or, in the absence of such designation as to any provision of this
Agreement or the Notes, by the Majority Banks, and then any such amendment,
modification, waiver, or consent shall be effective only in the specific
instance and for the specific purpose for which given. No amendment,
modification, waiver, or consent (i) shall extend or increase the amount of the
Commitments, the maturity of the Notes or reduce the fees hereunder or the rate
of interest payable with respect to the Notes or reduce the aggregate Percentage
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<PAGE> 38
required to effect an amendment, modification, waiver, or consent or eliminate
the guaranty set forth in Section 12 hereof without the written consent of all
of the Banks or (ii) shall extend the maturity or reduce the principal amount
of, or rate of interest on, any Note without the written consent of the holder
of such Note. Notwithstanding the foregoing, the Company may add one or more
financial institutions as Bank parties to this Agreement, from time to time and
without the consent of the then-current Bank parties to this Agreement;
provided, that in no event will the aggregate amount of the Commitments of the
new financial institutions exceed 125 million U.S. Dollars in excess of the
Commitments as of the date hereof. Each such addition of a Bank shall be
effective upon such Bank's written agreement to become a Bank party hereto and
to be bound by the terms of this Agreement applicable to "Banks." The Company
shall give the then-current Bank parties to this Agreement prompt notice of any
change to the Bank's respective Percentages and Commitments resulting from the
addition of any Bank as a party to, or the reduction of any Bank's Commitment
under, this Agreement.
14.2 CONFIRMATIONS. The Company and each holder of a Loan agree from time
to time, upon written request received by it from the other, to confirm to the
other in writing the aggregate unpaid principal amount of Loans then outstanding
to such holder.
14.3 NOTICES. Except as otherwise provided in Sections 1.3, 1.4, 1.5, 3.3,
and 6.2, all notices hereunder shall be in writing. Notices given by mail shall
be deemed to have been given three days after the date sent if sent by
registered or certified mail, postage prepaid, and:
(i) if to the Company, addressed to the Company at its address
shown below its signature hereto;
(ii) if to any Designated Subsidiary, addressed to it at the address
given by the Company pursuant to its designation of such
Subsidiary as a Designated Subsidiary entitled to receive Loans
hereunder; or
(iii) if to any Bank, addressed to such Bank at the address shown
below its signature as its Domestic Office address; or
in the case of each party, such other address as such party may, by written
notice to the other parties to this Agreement, have designated as its address
for notices. Notices given by facsimile, telegram, or telex shall be deemed to
have been given when sent, if properly addressed to the party to whom sent, at
its address, as aforesaid.
Each Bank shall be entitled to rely upon all telephonic notices given by an
Authorized Person pursuant to Sections 1.3, 1.4, 1.5, 3.3, or 6.2, and the
Company shall hold each Bank harmless from any loss, cost, or expense ensuing
from any such reliance, except for such loss, cost or expenses as a result of
the Bank's gross
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<PAGE> 39
negligence or willful misconduct. All notices, waivers, or consents given to, or
any requests made upon, the Company by any Bank or holder of any Note shall be
promptly notified to all other parties to this Agreement. Whenever a notice,
declaration, or other action is required to be taken, given, or made by the
Majority Banks or the Outstanding Majority Banks, such notice, declaration, or
action shall be in writing and shall be signed by, as the case may be, Banks
having an aggregate Percentage of 66-2/3% or more or Banks having 66-2/3% or
more of the aggregate principal amount of Loans outstanding.
14.4 COMPUTATIONS. Where the character or amount of any asset or liability
or item of income or expense is required to be determined, or any consolidation
or other accounting computation is required to be made, for the purpose of this
Agreement, such determination or calculation shall, to the extent applicable and
except as otherwise specified in this Agreement, be made in accordance with the
Company's then current method of accounting, which method must be in accordance
with GAAP; provided, however, if any changes in accounting principles from those
used in the preparation of the financial statements referred to in Section 8.4
hereafter occasioned by the promulgation of rules, regulations, pronouncements,
and opinions by or required by the Financial Accounting Standards Board or the
American Institute of Certified Public Accountants (or successors thereto or
agencies with similar functions) result in a change in the method of calculation
of the financial covenants, standards, or terms found in Section 9.2 hereof, the
parties hereto agree to enter into negotiations to amend such provisions so as
equitably to reflect such changes with the desired result that the criteria for
evaluating the Company's financial condition shall be the same after such
changes as if such changes had not been made.
14.5 CONFIDENTIALITY. Unless the Company otherwise agrees in writing, each
Bank hereby agrees to keep all Proprietary Information (as defined below)
confidential and not to disclose or reveal any Proprietary Information to any
Person other than the Bank's directors, officers, employees, Affiliates, and
agents, and then only on a confidential basis; provided, however, that a Bank
may disclose Proprietary Information (a) as required by law, rule, regulation,
or judicial process, (b) to its attorneys and accountants, (c) as requested or
required by any state, federal, or foreign authority or examiner regulating
banks or banking, or (d) to actual or potential assignees or participants as
permitted by Section 14.6.3. For purposes of this Agreement, the term
"PROPRIETARY INFORMATION" shall include all information about the Company, any
Subsidiary, or any of their respective Affiliates which has been furnished by
the Company, any Subsidiary, or any of their respective Affiliates, whether
furnished before or after the date hereof, and regardless of the manner
furnished; provided, however, that Proprietary Information shall not include
information which (x) is or becomes generally available to the public other than
as a result of a disclosure by a Bank not permitted by this Agreement, (y) was
available to a Bank on a nonconfidential basis prior to its disclosure to such
Bank by the Company, any Subsidiary, or any of their respective Affiliates, or
(z) becomes available to a Bank on a nonconfidential basis from a Person other
than the Company, any Subsidiary, or any of their respective Affiliates who, to
the best knowledge of such Bank, is not otherwise
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<PAGE> 40
bound by a confidentiality agreement with the Company, any Subsidiary, or any of
their respective Affiliates, or, to the best knowledge of such Bank, is not
otherwise prohibited from transmitting the information to such Bank.
14.6 ASSIGNMENTS AND PARTICIPATIONS.
14.6.1 ASSIGNMENTS. Unless the Company otherwise consents in writing,
which consent shall not be unreasonably withheld, no holder of any Note
(including any Bank) shall assign or transfer such Note or any interest therein
to any other Person, except as otherwise permitted under Section 14.6. Except as
otherwise expressly agreed in writing by the Company, no Bank shall, by reason
of the assignment or transfer of any Note or otherwise, be relieved of any of
its obligations hereunder. Each transferee of any Note shall take such Note
subject to the provisions of this Agreement and to any request made, waiver or
consent given, or other action taken hereunder, prior to such transfer, by each
previous holder of such Note; and the Company shall be entitled to conclusively
assume that the transferee shall thereafter be vested with all rights and powers
under this Agreement of the Bank named as the payee of the Note which is the
subject of such transfer. Nothing herein shall prohibit any Bank from pledging
or assigning any Note to any Federal Reserve Bank pursuant to applicable law.
14.6.2 PARTICIPATIONS. Any Bank may grant participations in or to all
or any part of any Loan or Loans then owing to such Bank and the Notes held by
such Bank without the consent of the Company. Except as otherwise expressly
agreed in writing by the Company, no grant of a participation shall relieve any
Bank of its obligations hereunder, the Company shall be entitled to deal solely
with the Banks (and their respective assignees) for all purposes of this
Agreement and the Notes, and no holder of a participation in all or any part of
the Loans or the Notes shall have any rights under this Agreement, except that
the holder of a participation shall be entitled to the benefits of Section 7
hereunder (but the dollar amount of such Section 7 benefits shall not exceed
those benefits that the assigning Bank would have otherwise received).
14.6.3 DISCLOSURE OF INFORMATION. The Company hereby consents to the
disclosure of any information obtained in connection herewith by any Bank to any
Person which is an assignee or potential assignee or a participant or potential
participant pursuant to Section 14.6.1 or 14.6.2, it being understood that such
Bank shall advise any such actual or potential assignee or participant of its
obligation to keep confidential any nonpublic information disclosed to it
pursuant to this Section 14.6.3 and, prior to the disclosure of such
information, shall cause each such actual or potential assignee or participant
to execute a confidentiality agreement containing the confidentiality provisions
set forth in Section 14.5.
14.7 SECURITIES LAWS. Each Bank represents that it is the present intention
of such Bank to acquire each Note drawn to its order for its own account and not
with a view to the distribution or sale thereof, subject, nevertheless, to the
necessity that such Bank remain in control at all times of the disposition of
the
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<PAGE> 41
property held by it for its own account, it being understood that the foregoing
representation shall not affect the character of the Loans as commercial lending
transactions.
14.8 COSTS AND EXPENSES. The Company agrees to pay on demand all reasonable
out-of-pocket costs and expenses of the Banks (including the reasonable fees and
out-of-pocket expenses of counsel for the Banks and reasonable allocated costs
of in-house counsel for the Banks) in connection with the enforcement of this
Agreement, the Notes, and any other instruments or documents executed in
connection herewith.
14.9 GOVERNING LAW. This Agreement and each Note shall be a contract made
under and governed by the internal laws of the State of Ohio. Wherever possible
each provision of this Agreement shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of this Agreement
shall be prohibited by or invalid under such law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Agreement. All obligations of the Company and rights of the Banks and any other
holders of the Notes expressed herein or in the Notes shall be in addition to
and not in limitation of those provided by applicable law.
14.10 COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the different parties on separate counterparts and each such
counterpart shall be deemed to be an original, but all such counterparts shall
together constitute but one and the same Agreement. When counterparts executed
by all the parties shall have been lodged with the Company (or, in the case of
any Bank as to which an executed counterpart shall not have been so lodged, the
Company shall have received telegraphic, telex, or other written confirmation
from such Bank of execution of a counterpart hereof by such Bank), this
Agreement shall become effective as of the date hereof.
14.11 CAPTIONS. Section captions used in this Agreement are for convenience
only, and shall not affect the construction of this Agreement.
14.12 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon the
Company, each Bank, and their respective successors and assigns, and shall inure
to the sole benefit of the Company, each Bank, and their respective successors
and assigns.
14.13 ENTIRE AGREEMENT. This Agreement supersedes any prior agreement or
understanding of the parties hereto, and contains the entire agreement of the
parties hereto, with respect to the matters covered hereby.
14.14 APPOINTMENT OF ADMINISTRATOR. TRW hereby appoints National City Bank
to serve as administrator (the "ADMINISTRATOR") to coordinate any votes that may
be taken under this Agreement and to distribute payments, if any, required to be
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<PAGE> 42
made to the Banks on a pro rata basis as provided in Section 11.2. In the event
that National City Bank is unable or unwilling to act as Administrator, TRW
shall appoint a successor, subject to the approval of the Majority Banks, which
shall not be unreasonably withheld. Except as otherwise specifically provided
herein, borrowing, repayment and fee procedures set forth in this Agreement
shall not be affected by the appointment of the Administrator.
14.15 NON-U.S. BANK TAX INFORMATION. Upon the request of the Company, any
Bank that is not organized under the laws of the United States of America or any
state thereof will (i) deliver to the Company accurate and complete signed
copies of Forms 1001 and 4224 (or such additional or successor forms) and any
amendments or modifications thereto and (ii) inform the Company if the Company
can no longer rely upon such forms.
14.16 REGULATION U. The Company hereby represents and warrants that neither
the Company nor any of its Consolidated Subsidiaries is principally engaged in
the business of extending credit for the purpose of purchasing or carrying
margin stock (within the meaning of Regulation U issued by the Board of
Governors of the Federal Reserve System) and covenants that the Company's use of
proceeds of any borrowings under this Agreement will not cause a violation of
Regulation U. Each of the Banks hereby represents and warrants to the Company
that it is not relying and will not rely on any margin stock (as described
above) in determining whether to extend or maintain credit under this Agreement.
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<PAGE> 43
SIGNATURE PAGES TO REVOLVING CREDIT AGREEMENT, DATED AS OF DECEMBER 10, 1997
- ----------------------------------------------------------------------------
Delivered at Cleveland, Ohio, as of the day and year first above written.
TRW INC.
By:_____________________________________
Name: Jeanne R. Sydenstricker
Title: Vice President and Treasurer
1900 Richmond Road
Cleveland, Ohio 44124
Telephone: 216/291-7566
Facsimile: 216/291-7831
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<PAGE> 44
BANKS:
Amount of Percentage of
Commitment Commitments
- ----------- -------------
$__,000,000 __% Bank of America National Trust
and Savings Association
By:___________________________________________
Name: Deborah J. Graziano
Title: Vice President
DOMESTIC OFFICE
Bank of America NT & SA
1850 Gateway Boulevard
Concord, California 94520
Telephone: (510) 675-7178
Facsimile: (510) 675-7531
Attention: Mandy Sneary
EUROCURRENCY OFFICE
Bank of America NT & SA
1850 Gateway Boulevard
Concord, California 94520
Telephone: (510) 675-7178
Facsimile: (510) 675-7531
Attention: Mandy Sneary
ELECTRONIC PAYMENT INSTRUCTIONS
Receiving Bank: Bank of America
ABA Routing No.: 121000358
Account No.: 12331-83980
Account Name: Incoming Money Transfer
Reference No.: TRW Commitment Fee
- -39-
<PAGE> 45
Amount of Percentage of
Commitment Commitments
- ----------- -------------
$__,000,000 __% Barclays Bank PLC
By:___________________________________________
Name: Gary F. Albanese
Title: Associate Director
DOMESTIC OFFICE
Barclays Bank PLC
222 Broadway
New York, New York 10038
Telephone: (212) 412-3728
Facsimile: (212) 412-5306
EUROCURRENCY OFFICE
Barclays Nassau, Bahamas Branch
c/o Barclays Bank PLC
222 Broadway
New York, New York 10038
Telephone: (212) 412-3728
Facsimile: (212) 412-5306
ELECTRONIC PAYMENT INSTRUCTIONS
Receiving Bank: Barclays Bank PLC-New York
ABA Routing No.: 026-002-574
Account No.: 050-019-104
Account Name: TRW
Reference No.: TRW Commitment Fee;
C. Tenn Sing Que
<PAGE> 46
Amount of Percentage of
Commitment Commitments
- ----------- -------------
$__,000,000 __% The Chase Manhattan Bank
By:___________________________________________
Name: Joan F. Garvin
Title: Managing Director
DOMESTIC OFFICE
The Chase Manhattan Bank
270 Park Avenue
10th Floor
New York, New York 10017-2070
Telephone: (212) 270-5730
Facsimile: (212) 270-5127
EUROCURRENCY OFFICE
The Chase Manhattan Bank
One Chase Manhattan Plaza
Eighth Floor
New York, New York 10081
Telephone: (212) 552-7472
Facsimile: (212) 552-5662
ELECTRONIC PAYMENT INSTRUCTIONS
Receiving Bank: Chase Manhattan Bank
ABA Routing No.: 021-000021
Account No.:
Account Name: Commercial Loan Opns.
Reference No.: TRW Commitment Fee
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<PAGE> 47
Amount of Percentage of
Commitment Commitments
- ----------- -------------
$__,000,000 __% Citibank, N.A.
By:___________________________________________
Name: Mark Stanfield Packard
Title: Vice President
DOMESTIC OFFICE
Citibank, N.A.
c/o Citicorp Securities, Inc.
200 S. Wacker Dr.
Chicago, IL 60606
Telephone: 312-993-3871
Facsimile: 312-993-6840
EUROCURRENCY OFFICE
Citibank, N.A.
c/o Citicorp Securities, Inc.
200 S. Wacker Dr.
Chicago, IL 60606
Telephone: 312-993-3871
Facsimile: 312-993-6840
ELECTRONIC PAYMENT INSTRUCTIONS
Receiving Bank: Citibank, N.A., New York
ABA Routing No.: 021000089
Account No.: 38483095
Account Name: Chicago NEO Loan Acct.
Reference No.: TRW Commitment Fee
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<PAGE> 48
Amount of Percentage of
Commitment Commitments
- ----------- -------------
$__,000,000 __% Morgan Guaranty Trust Company
of New York
By:___________________________________________
Name: Patricia P. Lunka
Title: Vice President
DOMESTIC OFFICE
Morgan Guaranty Trust Company
of New York
60 Wall Street
New York, New York 10260-0060
Telephone: _____________
Facsimile: _____________
EUROCURRENCY OFFICE
Morgan Guaranty Trust Company
of New York
Nassau, Bahamas Office
c/o J.P. Morgan Services Inc.
Euro-Loan Servicing Unit
902 Market Street
Wilmington, Delaware 19801
Telephone: _____________
Facsimile: _____________
ELECTRONIC PAYMENT INSTRUCTIONS
Receiving Bank: Morgan Guaranty Trust
ABA Routing No.: 021000238
Account No.: 999-99-090
Account Name: _____________
Reference No.: TRW Com. Fee
Corp. Proc. Module 30
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<PAGE> 49
Amount of Percentage of
Commitment Commitments
- ----------- -------------
$__,000,000 __% National City Bank
By:___________________________________________
Name: David R. Bonner
Title: Vice President
DOMESTIC OFFICE
National City Bank
National City Center
P. O. Box 5756
Cleveland, Ohio 44101-0756
Telephone: _____________
Facsimile: _____________
EUROCURRENCY OFFICE
National City Bank
National City Center
P. O. Box 5756
Cleveland, Ohio 44101-0756
Telephone: _____________
Facsimile: _____________
ELECTRONIC PAYMENT INSTRUCTIONS
Receiving Bank: National City Bank
ABA Routing No.: 041000124
Account No.: 2537557
Account Name: _____________
Reference No.: TRW Commitment Fee
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<PAGE> 50
Amount of Percentage of
Commitment Commitments
- ----------- -------------
$__,000,000 __% The Sumitomo Bank, Limited
By:___________________________________________
Name: John H. Kemper
Title: Senior Vice President
DOMESTIC OFFICE
The Sumitomo Bank, Limited
Chicago Branch
Sears Tower
233 South Wacker Drive, Suite 4800
Chicago, Illinois 60606-6448
Telephone: (312) 876-6444
Facsimile: (312) 876-6436
EUROCURRENCY OFFICE
The Sumitomo Bank, Limited
Chicago Branch
Sears Tower
233 South Wacker Drive, Suite 4800
Chicago, Illinois 60606-6448
Telephone: (312) 879-7668
Facsimile: (312) 876-0523
ELECTRONIC PAYMENT INSTRUCTIONS
Receiving Bank: FNB of Chicago
ABA Routing No.: 071000013
Account No.: 15-01208
Account Name: Sumitomo Bank Ltd,
Chicago Branch.
Reference No.: TRW Commitment Fee
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<PAGE> 51
Amount of Percentage of
Commitment Commitments
- ----------- -------------
$__,000,000 __% Banque Nationale de Paris
By:___________________________________________
Name: Arnaud Collin du Bocage
Title: Executive Vice President and
General Manager
DOMESTIC OFFICE
Banque Nationale de Paris
Chicago Branch
Rookery Building
209 South LaSalle, 5th Floor
Chicago, Illinois 60604
Telephone: (312) 977-2211
Facsimile: (312) 977-1380
EUROCURRENCY OFFICE
Banque Nationale de Paris
Chicago Branch
Rookery Building
209 South LaSalle, 5th Floor
Chicago, Illinois 60604
Telephone: (312) 977-2211
Facsimile: (312) 977-1380
ELECTRONIC PAYMENT INSTRUCTIONS
Receiving Bank: Banque Nationale de Paris,
New York Branch
ABA Routing No.: 026007689
Account No.: 14119400189
Account Name: BNP, Chicago Branch
Reference No.: TRW Commitment Fee
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<PAGE> 52
Amount of Percentage of
Commitment Commitments
- ----------- -------------
$__,000,000 __% Dresdner Bank AG
By:___________________________________________
Name: D. Slusavczyk
Title: Vice President
By:___________________________________________
Name: A. R. Morris
Title: Vice President
DOMESTIC OFFICE
Dresdner Bank AG New York Branch
75 Wall Street
New York, New York 10005
Telephone: (212) 429-2244
Facsimile: (212) 429-2524
EUROCURRENCY OFFICE
Dresdner Bank AG Grand Cayman Branch
c/o Dresdner Bank AG New York Branch
75 Wall Street
New York, New York 10005
Telephone: (212) 429-2244
Facsimile: (212) 429-2524
ELECTRONIC PAYMENT INSTRUCTIONS
Receiving Bank: Chase Manhattan (NY,NY)
ABA Routing No.: 021-000-021
Account No.: 920-1-059-079
Account Name: Dresdner Bank AG,
New York Branch
Reference No.: TRW Commitment Fee
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<PAGE> 53
Amount of Percentage of
Commitment Commitments
- ----------- -------------
$__,000,000 __% NBD Bank
By:___________________________________________
Name: William J. McCaffrey
Title: Vice President
DOMESTIC OFFICE
NBD Bank
Attention: Mid-Corporate Banking
611 Woodward
Detroit, Michigan 48226
Telephone: (313) 225-3444
Facsimile: (313) 225-3269
EUROCURRENCY OFFICE
NBD Bank, N.A.
Attention: Mid-Corporate Banking
611 Woodward
Detroit, Michigan 48226
Telephone: (313) 225-3444
Facsimile: (313) 225-3269
ELECTRONIC PAYMENT INSTRUCTIONS
Receiving Bank: NBD Bank
ABA Routing No.: 072000326
Account No.: 1424183
Account Name: Commercial Loans
Reference No.: TRW Commitment Fee
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<PAGE> 54
Amount of Percentage of
Commitment Commitments
- ----------- -------------
$__,000,000 __% Royal Bank of Canada
By:___________________________________________
Name: Patrick Shields
Title: Senior Manager
DOMESTIC OFFICE
Royal Bank of Canada
Grand Cayman (North America No. 1) Branch
c/o New York Branch
32 Old Slip
New York, New York 10005-3531
Telephone: (212) 428-6323
Facsimile: (212) 428-2372
EUROCURRENCY OFFICE
Royal Bank of Canada
Grand Cayman (North America No. 1) Branch
c/o New York Branch
32 Old Slip
New York, New York 10005-3531
Telephone: (212) 428-6323
Facsimile: (212) 428-2372
ELECTRONIC PAYMENT INSTRUCTIONS
Receiving Bank: Chase Manhattan, NY
ABA Routing No.: 021000021
Account No.: 9201033363
Account Name: Royal Bank
Reference No.: TRW Commitment Fee
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<PAGE> 55
Amount of Percentage of
Commitment Commitments
- ----------- -------------
$__,000,000 __% KeyBank National Association
By:___________________________________________
Name: Marianne Meil
Title: Vice President
DOMESTIC OFFICE
KeyBank National Association
127 Public Square
Cleveland, Ohio 44114
Telephone: _____________
Facsimile: _____________
EUROCURRENCY OFFICE
KeyBank National Association
127 Public Square
Cleveland, Ohio 44114
Telephone: _____________
Facsimile: _____________
ELECTRONIC PAYMENT INSTRUCTIONS
Receiving Bank: KeyBank National Association
ABA Routing No.: 041001039
Account No.: 00100-39140
Account Name: Commercial Loan Opns
Reference No.: TRW Commitment Fee
-50-
<PAGE> 56
Amount of Percentage of
Commitment Commitments
- ----------- -------------
$__,000,000 __% The Sakura Bank, Limited
By:___________________________________________
Name: Shunji Sakurai
Title: Joint General Manager
DOMESTIC OFFICE
The Sakura Bank, Limited
Chicago Branch
227 West Monroe Street
Suite 4700
Chicago, Illinois 60606
Telephone: (312) 580-3276
Facsimile: (312) 332-5345
EUROCURRENCY OFFICE
The Sakura Bank, Limited
Chicago Branch
227 West Monroe Street
Suite 4700
Chicago, Illinois 60606
Telephone: (312) 580-3276
Facsimile: (312) 332-5345
ELECTRONIC PAYMENT INSTRUCTIONS
Receiving Bank: FNB of Chicago
ABA Routing No.: 071000013
Account No.: 1512951
Account Name: Sakura Bank, Chicago
Reference No.: TRW Commitment Fee
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<PAGE> 57
Amount of Percentage of
Commitment Commitments
- ----------- -------------
$__,000,000 __% The Tokai Bank, Limited
By:___________________________________________
Name: Hiroshi Tanaka
Title: General Manager
DOMESTIC OFFICE
The Tokai Bank, Limited
Chicago Branch
Attention: Corporate Finance
181 West Madison Street, Suite 3600
Chicago, Illinois 60602
Telephone: _____________
Facsimile: _____________
EUROCURRENCY OFFICE
The Tokai Bank, Limited
Chicago Branch
Attention: Corporate Finance
181 West Madison Street, Suite 3600
Chicago, Illinois 60602
Telephone: _____________
Facsimile: _____________
ELECTRONIC PAYMENT INSTRUCTIONS
Receiving Bank: FNB of Chicago
ABA Routing No.: 071000013
Account No.: 15-08997
Account Name: Tokai Bank, Chicago Branch
Reference No.: TRW Commitment Fee
Loan Administration
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<PAGE> 58
Amount of Percentage of
Commitment Commitments
- ----------- -------------
$__,000,000 __% Union Bank of Switzerland
By:___________________________________________
Name: Dieter Hoeppli
Title: Vice President
By:___________________________________________
Name: Samuel Azizo
Title: Vice President
DOMESTIC OFFICE
Union Bank of Switzerland
New York Branch
299 Park Avenue
New York, New York 10171
Telephone: (212) 821-3415
Facsimile: (212) 821-3383
EUROCURRENCY OFFICE
Union Bank of Switzerland
New York Branch
299 Park Avenue
New York, New York 10171
Telephone: (212) 821-3415
Facsimile: (212) 821-3383
ELECTRONIC PAYMENT INSTRUCTIONS
Receiving Bank: Union Bank of Switzerland
ABA Routing No.: 026008439
Account No.: 519243USICC1
Account Name: Credit Corporate Clearing
Reference No.: TRW Commitment Fee
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<PAGE> 59
Amount of Percentage of
Commitment Commitments
- ----------- -------------
$__,000,000 __% Bank of China, New York Branch
By:___________________________________________
Name: Zhu, ZhiCheng
Title: General Manager, USA
DOMESTIC OFFICE
Bank of China
New York Branch
410 Madison Avenue
New York, New York 10017
Telephone: (212) 935-3101 ext. 475
Facsimile: (212) 688-0919
EUROCURRENCY OFFICE
Bank of China
New York Branch
410 Madison Avenue
New York, New York 10017
Telephone: (212) 935-3101 ext. 475
Facsimile: (212) 688-0919
ELECTRONIC PAYMENT INSTRUCTIONS
Receiving Bank: Bank of China,
New York Branch
ABA Routing No.: 026003269
Account No.: 160081555553-001-001
Reference No.: TRW Commitment Fee
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<PAGE> 60
Amount of Percentage of
Commitment Commitments
- ----------- -------------
$__,000,000 __% Wells Fargo Bank, N.A.
By:___________________________________________
Name: Edith R. Lim
Title: Vice President
By:___________________________________________
Name: Frieda Youlios
Title: Vice President
DOMESTIC OFFICE
Wells Fargo Bank, N.A.
707 Wilshire Blvd., 16th. Floor
Los Angeles, CA 90017
Telephone: (213) 614-5038
Facsimile: (213) 614-2305
EUROCURRENCY OFFICE
Wells Fargo Bank, N.A.
707 Wilshire Blvd., 16th. Floor
Los Angeles, CA 90017
Telephone: (213) 614-5038
Facsimile: (213) 614-2305
ELECTRONIC PAYMENT INSTRUCTIONS
Receiving Bank: Wells Fargo Bank, N.A.
ABA Routing No.: 121-000-248
Account No.: 451-8054341
Account Name: SYNDIC/WFB CORP/ACH
Reference No.: TRW Ref No 9118583038
$750,000,000 100% Total
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<PAGE> 61
EXHIBIT A
to
Revolving Credit Agreement
REVOLVING NOTE
Up to a maximum of
$_________________
(or the Eurocurrency or Date:__________________, 1997
Local Currency equivalent Cleveland, Ohio
hereof)
FOR VALUE RECEIVED, the undersigned hereby promises to pay to the order of
_____________________ (the "BANK") for the account of its Domestic or
Eurocurrency Office, as applicable (capitalized terms used herein but not
otherwise defined herein shall have the meanings assigned to such terms in the
Credit Agreement referred to below), the outstanding principal amount of the
Loans made by the Bank to the undersigned pursuant to the Credit Agreement. The
principal amount of each Loan evidenced hereby shall be payable on the earliest
of: (i) the Revolving Period Termination Date, unless the Company shall have
made the election provided for in clause (ii) of Section 2.1 of the Credit
Agreement; (ii) the Term-Out Maturity Date, if the Company shall have made such
election; (iii) the last day of the applicable Interest Period for such Loan
(unless the Loan is Continued or Converted); or (iv) such other date as the
Company and the Relevant Bank may agree in writing.
The undersigned promises to pay interest on the unpaid principal amount of
each Loan evidenced hereby from the date such Loan is made until the principal
amount of such Loan is paid in full, at such interest rates, and payable at such
times, as are specified in the Credit Agreement.
Both principal of, and interest on, any Loan are payable in immediately
available funds in the currency of such Loan to the Bank as its Domestic or
Eurodollar Office that made the Loan. The Loans made by the Bank to the
undersigned, and all payments made on account of principal thereof, shall be
recorded by the Bank and, prior to any transfer hereof, endorsed on the grid
attached hereto which is part of this Note.
This Note is one of the Notes referred to in, and is entitled to the
benefits of, the Revolving Credit Agreement, dated as of December 10, 1997,
among the undersigned, the Bank, and the other bank parties named therein, as
Banks (as the same may be amended, modified, or supplemented and in effect from
time to time, the "CREDIT AGREEMENT"). The Credit Agreement, among other things,
(i) provides for the making of Loans by the Bank to the undersigned from time to
time in an aggregate principal amount not to exceed at any time the dollar
amount first mentioned above and the indebtedness of the undersigned resulting
from each such Loan being evidenced by this Note, and (ii) contains provisions
for acceleration of the maturity hereof upon the happening of certain stated
events and also for payments on account of the principal hereof prior to the
maturity
<PAGE> 62
hereof upon the terms and conditions and in accordance with the provisions
therein specified. Reference is hereby made to the Credit Agreement for a
statement of said terms and provisions.
In addition to, and not in limitation of, the foregoing and the provisions
of the Credit Agreement hereinabove referred to, the undersigned further agrees,
subject only to any limitation imposed by applicable law, to pay all expenses,
including reasonable attorneys' fees and expenses, incurred by the holder of
this Note in seeking to collect any amounts payable hereunder which are not paid
when due, whether by acceleration or otherwise.
DEMAND, PRESENTMENT, PROTEST, AND NOTICE OF NON-PAYMENT ARE HEREBY WAIVED
BY THE UNDERSIGNED.
THIS PROMISSORY NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE INTERNAL LAWS (AS OPPOSED TO CONFLICT OF LAWS PROVISIONS)
OF THE STATE OF OHIO.
TRW INC.
By:_____________________________________
Jeanne R. Sydenstricker
Vice President and
Treasurer
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<PAGE> 63
Schedule Attached to Revolving Note dated _________________, 1997 of TRW Inc.
payable to the order of ______________________________________
BASE RATE BORROWINGS
Unpaid
Date and Date and Amount Principal
Amount of of Repayment Balance of
Base Rate of Base Rate Base Rate Notation
Borrowing Borrowing Borrowings Made By
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<PAGE> 64
Schedule Attached to Revolving Note dated _________________, 1997 of TRW Inc.
payable to the order of ______________________________________
FIXED RATE BORROWINGS
Date, Amount, Date and Unpaid
and Type of Interest Amount of Principal Notation
Borrowing Period Repayment Balance Made By
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<PAGE> 65
EXHIBIT B
to
Revolving Credit Agreement
COMPLIANCE CERTIFICATE
To: Each of the Bank Parties to the Credit Agreement referred to below
Reference is made to our Revolving Credit Agreement, dated as of December
10, 1997 (herein as amended, modified or supplemented and in effect from time to
time called the "CREDIT AGREEMENT") with you. Terms used but not otherwise
defined herein are used herein as defined in the Credit Agreement.
The Company hereby certifies and warrants to you that the following is a
true and correct computation as at _________________ 19 __ (the "COMPUTATION
DATE") of Consolidated Net Worth contained in Section 9.2 of the Credit
Agreement:
MINIMUM CONSOLIDATED NET WORTH
REQUIRED UNDER SECTION 3.2
$1,600,000,000
LESS: The lessor of (i) the aggregate amount
expended by the Company subsequent
to December 31, 1995 for repurchase of
its Common Stock and (ii) $600,000,000 $_____________
$_____________
CONSOLIDATED NET WORTH
OF THE COMPANY
Consolidated shareholders'
investment $_____________
PLUS: Minority interests $_____________
$_____________
The Company hereby further certifies and warrants to you that no Event of
Default or Unmatured Event of Default has occurred and is continuing.
<PAGE> 66
IN WITNESS WHEREOF, the Company has caused this Certificate to be executed
and delivered by its duly authorized officer this ___ day of ________________,
19__.
TRW INC.
By _____________________________________
Its_____________________________________
<PAGE> 67
EXHIBIT C
to
Revolving Credit Agreement
December 10, 1997
To: Each of the Banks party to the
Credit Agreements referred to below
Ladies and Gentlemen:
I am General Counsel of TRW Inc., an Ohio corporation (the "Company"), and
have acted in such capacity in connection with the Revolving Credit Agreement,
dated as of December 10, 1997 (the "Credit Agreement"), among the Company and
each of the financial institutions listed on the signature pages thereof.
Capitalized terms used but not otherwise defined are used herein as defined in
the Credit Agreement.
In connection with the opinions expressed below, I have examined or caused
to be examined by members of the TRW Law Department a copy of the Credit
Agreement and the Notes thereunder; and I have also made or caused to be made
such other examinations and inquiries as I have deemed necessary to enable me to
give the opinions hereinafter expressed. However, as to each of the opinions set
forth below which is limited to my knowledge, you should be aware that I have
neither made nor caused to be made any independent review for purposes of
rendering this opinion, although in the regular course of advising the Company I
have reviewed or caused to be reviewed various documents, records and matters of
law.
Based upon the foregoing, I am of the opinion that:
<PAGE> 68
December 10, 1997
Page 2
1. The Company is a corporation duly incorporated and in good standing
under the laws of the State of Ohio.
2. The Company has full power to execute, deliver, and perform the Credit
Agreement and to borrow moneys thereunder and to execute, deliver, and
perform its obligations under the Notes.
3. The execution and delivery of the Credit Agreement and the Notes, the
borrowings under the Credit Agreement, and the performance by the
Company of its obligations under the Credit Agreement and the Notes,
have been duly authorized by all necessary corporate action, and do not
and will not contravene or conflict with any material provision of
applicable law now in effect or of the Amended Articles of Incorporation
or Regulations of the Company or, to my knowledge, of any agreement for
borrowed money or other material agreement binding upon the Company.
4. The Credit Agreement and the Notes have been duly executed and delivered
by the Company and are the legal, valid, and binding obligations of the
Company, enforceable in accordance with their terms, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium laws or debtor relief proceedings or any similar laws or
proceedings affecting creditors' rights generally or by general
principles of equity.
I am a member of the bar of the State of Ohio and do not purport to be an
expert on, generally familiar with or qualified to express legal conclusions
based on laws other than the laws of the State of Ohio and the United States of
America.
This opinion is being delivered to you solely for your benefit as creditor
under the Credit Agreement and may be relied upon only by you for such purpose.
Very truly yours,
General Counsel
<PAGE> 1
Exhibit (c)(1)
CONFORMED VERSION
================================================================================
==============================================
BDM INTERNATIONAL, INC.,
TRW INC.
and
SYSTEMS ACQUISITION INC.
==============================================
==============================================
AGREEMENT AND PLAN OF MERGER
==============================================
==============================================
Dated as of November 20, 1997
==============================================
================================================================================
<PAGE> 2
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page
----
ARTICLE I.
TENDER OFFER AND MERGER
<S> <C>
1.1. The Offer..............................................................................................2
1.2. Company Action.........................................................................................4
1.3. Directors..............................................................................................5
1.4. The Merger.............................................................................................6
1.5. Effective Time.........................................................................................7
1.6. Conversion of Shares...................................................................................7
1.7. Dissenting Shares......................................................................................8
1.8. Surrender of Shares....................................................................................8
1.9. Options................................................................................................10
1.10. Certificate of Incorporation and Bylaws................................................................11
1.11. Directors and Officers.................................................................................11
1.12. Other Effects of Merger................................................................................11
1.13. Proxy Statement........................................................................................11
1.14. Additional Actions.....................................................................................12
</TABLE>
ARTICLE II.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
<TABLE>
<CAPTION>
<S> <C>
2.1. Organization and Good Standing.........................................................................12
2.2. Capitalization.........................................................................................13
2.3. Subsidiaries...........................................................................................14
2.4. Authorization; Binding Agreement.......................................................................14
2.5. Governmental Approvals.................................................................................15
2.6. No Violations..........................................................................................16
2.7. Securities Filings.....................................................................................16
2.8. Company Financial Statements...........................................................................17
2.9. Absence of Certain Changes or Events...................................................................17
2.10. Compliance with Laws...................................................................................18
2.11. Permits................................................................................................18
2.12. Litigation.............................................................................................18
2.13. Contracts..............................................................................................19
2.14. Employee Benefit Plans.................................................................................19
2.15. Taxes and Returns......................................................................................21
2.16 Intellectual Property..................................................................................22
2.17. Environmental Matters..................................................................................22
2.18. Offer Documents; Proxy Statement.......................................................................24
2.19. Finders and Investment Bankers.........................................................................25
2.20. Fairness Opinion.......................................................................................25
2.21. Related Party Transactions.............................................................................25
</TABLE>
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF PARENT
<TABLE>
<CAPTION>
<S> <C>
3.1. Organization and Good Standing.........................................................................25
</TABLE>
i
<PAGE> 3
<TABLE>
<CAPTION>
<S> <C>
3.2. Authorization; Binding Agreement.......................................................................25
3.3. Governmental Approvals.................................................................................26
3.4. No Violations..........................................................................................26
3.5. Offer Documents; Proxy Statement.......................................................................27
3.6. Finders and Investment Bankers.........................................................................27
3.7. Financing Arrangements.................................................................................27
3.8. No Prior Activities....................................................................................27
</TABLE>
ARTICLE IV.
ADDITIONAL COVENANTS OF THE COMPANY
<TABLE>
<CAPTION>
<S> <C>
4.1. Conduct of Business of the Company and the Company
Subsidiaries ..........................................................................................28
4.2. Notification of Certain Matters........................................................................31
4.3. Access and Information.................................................................................31
4.4. Proxy Statement........................................................................................32
4.5. Reasonable Best Efforts................................................................................32
4.6. Public Announcements...................................................................................32
4.7. Compliance.............................................................................................33
4.8. No Solicitation........................................................................................33
4.9. SEC and Stockholder Filings............................................................................35
4.10. Takeover Statutes......................................................................................35
4.11. Related Party Agreements...............................................................................35
</TABLE>
ARTICLE V.
ADDITIONAL COVENANTS OF PARENT
<TABLE>
<CAPTION>
<S> <C>
5.1. Reasonable Best Efforts................................................................................36
5.2. Public Announcements...................................................................................36
5.3. Compliance.............................................................................................37
5.4. Employee Benefit Plans.................................................................................37
5.5. Indemnification, Exculpation and Insurance.............................................................37
</TABLE>
ARTICLE VI.
MERGER CONDITIONS
<TABLE>
<CAPTION>
<S> <C>
6.1. Offer .................................................................................................38
6.2. Stockholder Approval...................................................................................38
6.3. No Injunction or Action................................................................................38
6.4. Other Approvals........................................................................................38
6.5. Conditions of Obligations of Parent and Merger Sub.....................................................39
</TABLE>
ARTICLE VII.
TERMINATION AND ABANDONMENT
<TABLE>
<CAPTION>
<S> <C>
7.1. Termination............................................................................................39
7.2. Effect of Termination and Abandonment..................................................................40
</TABLE>
ii
<PAGE> 4
ARTICLE VIII.
MISCELLANEOUS
<TABLE>
<CAPTION>
<S> <C>
8.1. Confidentiality........................................................................................42
8.2. Amendment and Modification.............................................................................42
8.3. Waiver of Compliance; Consents.........................................................................42
8.4. Survival...............................................................................................42
8.5. Notices................................................................................................42
8.6. Binding Effect; Assignment.............................................................................43
8.7. Expenses...............................................................................................44
8.8. Governing Law..........................................................................................44
8.9. Counterparts...........................................................................................44
8.10. Interpretation.........................................................................................44
8.11. Entire Agreement.......................................................................................44
8.12. Severability...........................................................................................45
8.13. Specific Performance...................................................................................45
8.14. Third Parties..........................................................................................45
8.15. Disclosure Letters.....................................................................................45
</TABLE>
ANNEX I
<TABLE>
<CAPTION>
<S> <C>
Conditions to the Offer.......................................................................................1
</TABLE>
iii
<PAGE> 5
This Agreement and Plan of Merger (this "AGREEMENT") is made and
entered into as of November 20, 1997, by and among, BDM International, Inc., a
Delaware corporation (the "COMPANY"), TRW Inc., an Ohio corporation ("PARENT"),
and Systems Acquisition Inc., a Delaware corporation and wholly owned subsidiary
of Parent ("MERGER SUB").
W I T N E S S E T H:
WHEREAS, the respective Boards of Directors of the Company, Merger Sub
and Parent have approved the acquisition by Parent of the Company in accordance
with the provisions of this Agreement;
WHEREAS, in furtherance thereof, it is proposed that, upon the terms
and subject to the conditions set forth herein, Parent will make a cash tender
offer (as it may be amended from time to time in accordance herewith, the
"OFFER") to purchase all of the outstanding shares ("SHARES") of common stock,
$.01 par value, of the Company ("COMPANY STOCK"), for $29.50 per Share or such
higher price as may be paid in the Offer (the "PER SHARE AMOUNT"), in each case
net to the seller in cash, without interest;
WHEREAS, also in furtherance of such acquisition, the respective Boards
of Directors of the Company, Merger Sub and Parent have each approved the merger
(the "MERGER") of Merger Sub with and into the Company following the expiration
of the Offer in accordance with the laws of the State of Delaware and the
provisions of this Agreement;
WHEREAS, Parent and Merger Sub are unwilling to enter into this
Agreement (and effect the transactions contemplated hereby) unless, immediately
after the execution and delivery hereof, certain holders of Shares (the
"STOCKHOLDERS") enter into an agreement (the "STOCKHOLDERS AGREEMENT") providing
for certain matters with respect to their Shares, the tender of their Shares and
certain other actions relating to the Offer and the other transactions
contemplated by this Agreement and, in order to induce Parent and Merger Sub to
enter into this Agreement, the Company has approved the execution and delivery
by Parent and Merger Sub and such Stockholders of the Stockholders Agreement,
and such Stockholders have agreed to execute and deliver the Stockholders
Agreement;
WHEREAS, the Board of Directors of the Company has approved this
Agreement and the Stockholders Agreement, has resolved to recommend acceptance
of the Offer and the Merger to the holders of Shares and has determined that the
consideration to be paid for each Share in the Offer and the Merger is fair to
the holders of such Shares and to recommend that the holders of such Shares
accept the Offer and adopt this Agreement and the transactions contemplated
hereby; and
<PAGE> 6
WHEREAS, the Company, Merger Sub and Parent desire to make certain
representations, warranties and agreements in connection with, and establish
various conditions precedent to, the transactions contemplated hereby.
NOW, THEREFORE, in consideration of the premises and the
representations, warranties, covenants and agreements hereinafter set forth, the
parties hereto agree as follows:
ARTICLE I.
TENDER OFFER AND MERGER
1.1. THE OFFER. (a) Provided that this Agreement shall not have been
terminated in accordance with SECTION 7.1 hereof and no event set forth in Annex
I hereto shall have occurred and be existing, Parent shall cause Merger Sub to
commence (within the meaning of Rule 14d-2 under the Securities Exchange Act of
1934, as amended, and the rules and regulations thereunder (the "SECURITIES
EXCHANGE ACT")) the Offer as promptly as practicable, but in no event later than
five business days following the public announcement of this Agreement;
PROVIDED, HOWEVER, that Parent may designate another direct subsidiary of Parent
as the bidder (within the meaning of Rule 14d-1(c) under the Securities Exchange
Act) in the Offer, in which case references herein to Merger Sub shall be deemed
to apply to such subsidiary, as appropriate. The obligation of Parent to cause
Merger Sub to accept for payment any Shares tendered shall be subject to the
satisfaction of only those conditions set forth in ANNEX I hereto (the "OFFER
CONDITIONS"). The Per Share Amount shall be net to each seller in cash, subject
to reduction only for any applicable federal back-up withholding or stock
transfer taxes payable by such seller. The Company agrees that no Shares held by
the Company will be tendered pursuant to the Offer.
(b) Without the prior written consent of the Company, Parent shall not
permit Merger Sub to (i) decrease the Per Share Amount or change the form of
consideration payable in the Offer, (ii) decrease the number of Shares sought in
the Offer, (iii) amend or waive satisfaction of the Minimum Condition (as
defined in ANNEX I hereto) or (iv) impose additional conditions to the Offer or
amend any other term of the Offer in any manner adverse to the holders of
Shares, provided that nothing herein will prohibit any waiver of any condition
or term of the Offer (other than the Minimum Condition) or any other action
permitted hereby. Upon the terms and subject to the conditions of the Offer,
Parent will cause Merger Sub to accept for payment and purchase, as soon as
practicable after the expiration of the Offer, all Shares validly tendered and
not withdrawn prior to the expiration of the Offer. It is agreed that the Offer
Conditions are for the benefit of Merger Sub and may be asserted by Merger Sub
regardless of the circumstances giving rise to any such condition (except for
any action or inaction by Parent or Merger Sub
2
<PAGE> 7
constituting a breach of this Agreement) or, except with respect to the Minimum
Condition, may be waived by Merger Sub, in whole or in part at any time and from
time to time, in its sole discretion.
(c) The Offer shall be made by means of an offer to purchase (the
"OFFER TO PURCHASE") having only the conditions set forth in ANNEX I hereto. On
the date the Offer is commenced, Parent and Merger Sub shall file with the
Securities and Exchange Commission (the "SEC") a Tender Offer Statement on
Schedule 14D-1 (together with all amendments and supplements thereto, the
"SCHEDULE 14D-1") with respect to the Offer that will contain (including as an
exhibit) or incorporate by reference the Offer to Purchase and forms of the
related letter of transmittal and summary advertisement (which documents,
together with any supplements or amendments thereto, and any other SEC schedule
or form which is filed in connection with the Offer and related transactions,
are referred to collectively herein as the "OFFER DOCUMENTS"). Each of Parent,
Merger Sub and the Company agrees promptly to correct any information provided
by it for use in the Schedule 14D-1 or the Offer Documents if and to the extent
that it shall have become false or misleading in any material respect and to
supplement the information provided by it specifically for use in the Schedule
14D-1 or the Offer Documents to include any information that shall become
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading, and Parent and Merger Sub further
agree to take all steps necessary to cause the Schedule 14D-1, as so corrected
or supplemented, to be filed with the SEC and the Offer Documents, as so
corrected or supplemented, to be disseminated to holders of Shares, in each case
as and to the extent required by applicable federal securities laws. The Company
and its counsel shall be given a reasonable opportunity to review and comment on
any Offer Documents before they are filed with the SEC.
(d) The Offer to Purchase shall provide for an initial expiration date
(the "EXPIRATION DATE") of 20 business days (as defined in Rule 14d-1 under the
Securities Exchange Act) from the date of commencement. Parent and Merger Sub
agree that they shall not terminate or withdraw the Offer or extend the
Expiration Date unless at the Expiration Date any of the Offer Conditions shall
not have been satisfied or earlier waived. Notwithstanding but without limiting
the foregoing, Merger Sub may (i) extend the Expiration Date (including as it
may be extended) for up to ten business days in connection with an increase in
the consideration to be paid pursuant to the Offer so as to comply with
applicable rules and regulations of the SEC, (ii) in its sole discretion, extend
the initial Expiration Date for up to ten business days after the initial
Expiration Date, and (iii) extend the initial Expiration Date (including as it
may be extended) for up to ten business days, notwithstanding that on such
Expiration Date the Offer Conditions shall have been
3
<PAGE> 8
satisfied or waived, if the number of Shares that have been validly tendered and
not withdrawn represent more than 50% but less than 90% of the voting power of
the then issued and outstanding Shares, PROVIDED that, in the case of clause
(iii) of this SECTION 1.1(d), Parent and Merger Sub expressly and irrevocably
waive any Offer Condition that subsequently may not be satisfied during such
extension of the Offer.
1.2. COMPANY ACTION. (a) The Company hereby approves of and consents to
the Offer and represents and warrants that (A) the Board of Directors of the
Company, at a meeting duly called and held on November 20, 1997, at which all of
the Directors were present, duly approved by unanimous vote this Agreement and
the transactions contemplated hereby, including the Offer, the Merger and the
Stockholders Agreement, resolved to recommend that the stockholders of the
Company accept the Offer, tender their Shares pursuant to the Offer and adopt
this Agreement and the transactions contemplated hereby, including the Merger,
and determined that this Agreement and the transactions contemplated hereby,
including the Offer and the Merger, are fair to and in the best interests of the
stockholders of the Company and (B) Wasserstein Perella & Co., Inc. (the
"FINANCIAL ADVISOR") has delivered to the Board of Directors of the Company its
written opinion that as of the date hereof the consideration to be received by
the stockholders of the Company pursuant to each of the Offer and the Merger is
fair to the stockholders of the Company from a financial point of view. The
Company has been authorized by the Financial Advisor to permit the inclusion of
such fairness opinion (or a reference thereto) in the Offer Documents and in the
Schedule 14D-9 referred to below. The Company hereby consents to the inclusion
in the Offer Documents of the recommendations of the Company's Board of
Directors described in this Section 1.2(a).
(b) The Company shall file with the SEC, no later than the fifth
business day following the public announcement of this Agreement, a Tender Offer
Solicitation/Recommendation Statement on Schedule 14D-9 (together with any
amendments or supplements thereto, the "SCHEDULE 14D-9") that will comply in all
material respects with the provisions of all applicable Law (as hereinafter
defined), including federal securities Laws. The Company shall mail such
Schedule 14D-9 to the stockholders of the Company promptly after the
commencement of the Offer together with the initial mailing of the Offer
Documents. The Schedule 14D-9 and the Offer Documents shall contain the
recommendations of the Board of Directors of the Company described in SECTION
1.2(a) hereof. The Company agrees promptly to correct the Schedule 14D-9 if and
to the extent that it shall become false or misleading in any material respect
(and each of Parent and Merger Sub, with respect to written information supplied
by it specifically for use in the Schedule 14D-9, shall promptly notify the
Company of any required corrections of such information and cooperate with the
Company with respect to correcting such
4
<PAGE> 9
information) and to supplement the information contained in the Schedule 14D-9
to include any information that shall become necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading, and the Company shall take all steps necessary to cause the
Schedule 14D-9 as so corrected to be filed with the SEC and disseminated to the
Company's stockholders to the extent required by applicable Laws, including
federal securities laws. Parent and its counsel shall be given a reasonable
opportunity to review and comment on the Schedule 14D-9 before it is filed with
the SEC.
(c) In connection with the Offer, the Company shall promptly upon
execution of this Agreement furnish Parent with mailing labels containing the
names and addresses of all record holders of Shares, non-objecting beneficial
owner lists (to the extent reasonably available), security position listings of
Shares held in stock depositories, each as of a recent date, and shall promptly
furnish Parent with such additional information, including updated lists of
stockholders, mailing labels and security position listings, and such other
information and assistance as Parent or its agents may reasonably request for
the purpose of communicating the Offer to the record and beneficial holders of
Shares.
1.3. DIRECTORS. Promptly upon the purchase by Merger Sub of any Shares
pursuant to the Offer (and assuming that the Minimum Condition has been
satisfied), and from time to time thereafter as Shares are acquired by Merger
Sub, Merger Sub shall be entitled to designate such number of directors, rounded
up to the next whole number, on the Board of Directors of the Company as will
give Merger Sub, subject to compliance with Section 14(f) of the Securities
Exchange Act, representation on the Board of Directors of the Company equal to
at least that number of directors which equals the product of the total number
of directors on the Board of Directors of the Company (giving effect to the
directors appointed or elected pursuant to this sentence and including current
directors serving as officers of the Company) multiplied by the percentage that
the aggregate number of Shares beneficially owned by Parent or any affiliate of
Parent (including for purposes of this SECTION 1.3 such Shares as are accepted
for payment pursuant to the Offer, but excluding Shares held by the Company)
bears to the number of Shares outstanding. At such times, if requested by
Parent, the Company will also cause each committee of the Board of Directors of
the Company and the Board of Directors of each Company Subsidiary (as
hereinafter defined) to include persons designated by Parent constituting the
same percentage of each such committee and the Board of Directors of each
Company Subsidiary as Parent's designees are of the Board of Directors of the
Company. The Company shall, upon request by Parent, promptly increase the size
of the Board of Directors of the Company as is necessary to enable Parent
designees to be elected to the Board of Directors of the Company in accordance
with the terms of this SECTION 1.3 and shall cause Parent's
5
<PAGE> 10
designees to be so elected; PROVIDED, HOWEVER, that, subject to the following
proviso, in the event that Parent's designees are appointed or elected to the
Board of Directors of the Company, until the Effective Time (as hereinafter
defined) the Board of Directors of the Company shall have at least one director
who is a director on the date hereof and who is neither an officer of the
Company nor a designee, stockholder, affiliate or associate (within the meaning
of the federal securities laws) of Parent (one or more of such directors, the
"INDEPENDENT DIRECTORS"); PROVIDED FURTHER, that if no Independent Directors
remain, the other directors shall designate one person to fill one of the
vacancies who shall not be either an officer of the Company or a designee,
shareholder, affiliate or associate of Parent, and such person shall be deemed
to be an Independent Director for purposes of this Agreement. Subject to
applicable Law, the Company shall promptly take all action necessary pursuant to
Section 14(f) of the Securities Exchange Act and Rule 14f-1 promulgated
thereunder in order to fulfill its obligations under this SECTION 1.3 and shall
include in the Schedule 14D-9 mailed to stockholders promptly after the
commencement of the Offer (or an amendment thereof or an information statement
pursuant to Rule 14f-1 if Parent has not theretofore designated directors) such
information with respect to the Company and its officers and directors as is
required under Section 14(f) and Rule 14f-1 in order to fulfill its obligations
under this SECTION 1.3. Parent will supply the Company and be solely responsible
for any information with respect to itself and its nominees, officers, directors
and affiliates required by Section 14(f) and Rule 14f-1. Notwithstanding
anything in this Agreement to the contrary, prior to the Effective Time, the
affirmative vote of a majority of the Independent Directors shall be required to
(i) amend or terminate this Agreement on behalf of the Company, (ii) exercise or
waive any of the Company's rights or remedies hereunder, (iii) extend the time
for performance of Parent's obligations hereunder or (iv) take any other action
by the Company in connection with this Agreement required to be taken by the
Board of Directors of the Company.
1.4. THE MERGER. Upon the terms and subject to the conditions of this
Agreement, the Merger shall be consummated in accordance with the Delaware
General Corporation Law (the "DELAWARE CODE"). At the Effective Time (as defined
in SECTION 1.5 hereof), upon the terms and subject to the conditions of this
Agreement, Merger Sub shall be merged with and into the Company in accordance
with the Delaware Code and the separate existence of Merger Sub shall thereupon
cease, and the Company, as the surviving corporation in the Merger (the
"SURVIVING CORPORATION"), shall continue its corporate existence under the laws
of the State of Delaware as a subsidiary of Parent. At Parent's election, any
direct or indirect subsidiary of Parent other than Merger Sub may be merged with
and into the Company instead of Merger Sub. In the event of such an election,
the parties agree to execute an appropriate amendment to this
6
<PAGE> 11
Agreement to reflect such election. The parties shall prepare and execute a
certificate of merger in order to comply in all respects with the requirements
of the Delaware Code and with the provisions of this Agreement or, if
applicable, a certificate of ownership and merger (each, a "Certificate of
Merger").
1.5. EFFECTIVE TIME. The Merger shall become effective at the time of
the filing of the Certificate of Merger with the Secretary of State of Delaware
in accordance with the applicable provisions of the Delaware Code or at such
later time as may be specified in the Certificate of Merger. As soon as
practicable after all of the conditions set forth in ARTICLE VI of this
Agreement have been satisfied or waived by the party or parties entitled to the
benefit of the same, the parties hereto shall cause the Merger to become
effective. Parent and the Company shall mutually determine the time of such
filing and the place where the closing of the Merger (the "CLOSING") shall
occur. The time when the Merger shall become effective is herein referred to as
the "EFFECTIVE TIME" and the date on which the Effective Time occurs is herein
referred to as the "CLOSING DATE."
1.6. CONVERSION OF SHARES. At the Effective Time, by virtue of the
Merger and without any action on the part of Merger Sub, the Company or the
holder of any of the following securities:
(a) Each Share issued and outstanding immediately before the Effective
Time (other than any Shares to be cancelled pursuant to SECTION 1.6(b) hereof
and any Dissenting Shares (as hereinafter defined)) shall be cancelled and
extinguished and be converted into the right to receive the Per Share Amount
(the "MERGER CONSIDERATION") in cash payable to the holder thereof, without
interest, promptly upon surrender of the certificate representing such Share or
appropriate proof of lost certificates, in accordance with Section 1.8 hereof.
From and after the Effective Time, the holders of certificates evidencing
ownership of any such Shares outstanding immediately prior to the Effective Time
shall cease to have any rights with respect to such Shares except as otherwise
provided for herein or by applicable Law.
(b) Each Share held in the treasury of the Company and each Share owned
by Parent or any direct or indirect wholly owned subsidiary of Parent (other
than Shares held by TRW Investment Management Co., its advisors or Parent's
employee benefit plans) immediately before the Effective Time, including without
limitation Merger Sub, shall be cancelled and extinguished and no payment or
other consideration shall be made with respect thereto.
(c) The shares of Merger Sub common stock outstanding immediately prior
to the Merger shall be converted into one
7
<PAGE> 12
validly issued, fully paid and non-assessable share of the common stock of the
Surviving Corporation (the "SURVIVING CORPORATION COMMON STOCK"), which one
share of the Surviving Corporation Common Stock shall constitute all of the
issued and outstanding capital stock of the Surviving Corporation and shall be
owned by Parent.
1.7. DISSENTING SHARES.(a) Notwithstanding any provision of this
Agreement to the contrary, any Shares issued and outstanding immediately prior
to the Effective Time and held by a holder who has demanded and perfected his
demand for appraisal of his Shares in accordance with the Delaware Code
(including but not limited to Section 262 thereof) and as of the Effective Time
has neither effectively withdrawn nor lost his right to such appraisal
("DISSENTING SHARES") shall not be converted into or represent a right to
receive the Merger Consideration, but the holder thereof shall be entitled to
only such rights as are granted by the Delaware Code.
(b) Notwithstanding the provisions of SECTION 1.7(a) hereof, if any
holder of Shares who demands appraisal of his Shares under the Delaware Code
shall effectively withdraw or lose (through failure to perfect or otherwise) his
right to appraisal, then as of the Effective Time or the occurrence of such
event, whichever occurs later, such holder's Shares shall automatically be
converted into and represent only the right to receive the Merger Consideration,
without interest thereon, upon surrender of the certificate or certificates
representing such Shares.
(c) The Company shall give Parent (i) prompt notice of any written
demands for appraisal or payment of the fair value of any Shares, withdrawals of
such demands, and any other instruments served pursuant to the Delaware Code
received by the Company and (ii) the opportunity to direct all negotiations and
proceedings with respect to demands for appraisal under the Delaware Code. The
Company shall not voluntarily make any payment with respect to any demands for
appraisal and shall not, except with the prior written consent of Parent, settle
or offer to settle any such demands.
1.8. SURRENDER OF SHARES. (a) Prior to the Closing Date, Parent shall
appoint First Chicago Trust Company of New York or another agent reasonably
acceptable to the Company to act as exchange agent (the "EXCHANGE AGENT") for
the Merger. When and as needed, Parent shall make available to the Exchange
Agent for the benefit of holders of Shares, the aggregate consideration to which
such holders shall be entitled at the Effective Time pursuant to SECTION 1.6
hereof. Such funds shall be invested by the Exchange Agent as directed by Parent
or, after the Effective Time, the Surviving Corporation, provided that such
investments shall be in obligations of or guaranteed by the United States of
America, in commercial paper obligations rated A-1 or P-1 or better by Moody's
Investors Service, Inc. or Standard & Poor's
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Corporation, respectively, or in certificates of deposit, bank repurchase
agreements or banker's acceptances of commercial banks with capital exceeding
$500 million. Any net profit resulting from, or interest or income produced by,
such investments will be payable to the Merger Sub or Parent, as Parent directs.
In the event that such funds as invested are inadequate to pay the full Merger
Consideration for all Shares converted into the Merger Consideration pursuant to
the Merger, the Parent shall provide additional funds to do so.
(b) On the Closing Date, Parent shall instruct the Exchange Agent to
mail to each holder of record of a certificate representing any Shares cancelled
upon the Merger pursuant to SECTION 1.6(a) hereof, within five business days of
receiving from the Company a list of such holders of record, (i) a letter of
transmittal (which shall specify that delivery shall be effected, and risk of
loss and title to the certificates shall pass, only upon delivery of the
certificates to the Exchange Agent and shall be in such form and have such other
provisions as Parent may reasonably specify) and (ii) instructions for use in
effecting the surrender of the certificates. Each holder of a certificate or
certificates representing any Shares cancelled upon the Merger pursuant to
SECTION 1.6(a) hereof may thereafter surrender such certificate or certificates
to the Exchange Agent, as agent for such holder, to effect the surrender of such
certificate or certificates on such holder's behalf for a period ending one year
after the Effective Time. Upon the surrender of certificates representing the
Shares, Parent shall cause the Exchange Agent to pay the holder of such
certificates in exchange therefor cash in an amount equal to the Per Share
Amount multiplied by the number of Shares represented by such certificate. Until
so surrendered, each such certificate (other than certificates representing
Dissenting Shares or Shares held by Parent or in the treasury of the Company)
shall represent solely the right to receive the aggregate Merger Consideration
relating thereto.
(c) If payment of cash in respect of cancelled Shares is to be made to
a person other than the person in whose name a surrendered certificate or
instrument is registered, it shall be a condition to such payment that the
certificate or instrument so surrendered shall be properly endorsed or shall be
otherwise in proper form for transfer and that the person requesting such
payment shall have paid any transfer and other Taxes (as hereinafter defined)
required by reason of such payment in a name other than that of the registered
holder of the certificate or instrument surrendered or shall have established to
the satisfaction of Parent or the Exchange Agent that such Tax either has been
paid or is not payable.
(d) At the Effective Time, the stock transfer books of the Company
shall be closed and no transfer of Shares shall be made thereafter, other than
transfers of Shares that have occurred prior to the Effective Time. In the event
that, after
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the Effective Time, certificates for Shares are presented to the Surviving
Corporation, its transfer agent or the Exchange Agent, they shall be cancelled
and exchanged for cash as provided in SECTION 1.6(a) hereof. No interest shall
accrue or be paid on any cash payable upon the surrender of a certificate or
certificates which immediately before the Effective Time represented outstanding
Shares.
(e) The Merger Consideration paid in the Merger shall be net to the
holder of Shares in cash, subject to reduction only for any applicable federal
back-up withholding or, as set forth in SECTION 1.8(c) hereof, stock transfer
Taxes payable by such holder.
(f) Promptly following the date which is 180 calendar days after the
Effective Time, the Exchange Agent shall deliver to Parent all cash (including
interest received with respect thereto), certificates and other documents in its
possession relating to the transactions contemplated hereby, and the Exchange
Agent's duties shall terminate. Thereafter, each holder of a certificate
representing Shares (other than certificates representing Dissenting Shares and
certificates representing Shares to be cancelled pursuant to SECTION 1.6(b)
hereof) may surrender such certificate to Parent and (subject to applicable
abandoned property, escheat and similar Laws) receive in consideration thereof
the aggregate Merger Consideration relating thereto payable upon surrender of
such certificate, without any interest or dividends thereon.
(g) None of the Company, Merger Sub, Parent or the Exchange Agent shall
be liable to any holder of Shares for cash delivered to a public official
pursuant to any abandoned property, escheat or similar law, rule, regulation,
statute, order, judgment or decree.
1.9. OPTIONS. (a) The Company hereby represents and warrants, and based
thereon Parent and Merger Sub hereby acknowledge, that (i) all outstanding
options to purchase Shares (the "COMPANY OPTIONS") granted under the Company's
stock option plans referred to in SECTION 2.14 of the Company Disclosure Letter
(as hereinafter defined), each as amended (collectively, the "COMPANY OPTION
PLANS"), whether or not then exercisable or vested, shall, pursuant to the terms
of the Company Option Plans, be fully exercisable and vested during the ten-day
period immediately prior to the initial Expiration Date and (ii) pursuant to the
terms thereof, all Company Options which are outstanding immediately prior to
the consummation of the Offer shall be cancelled as of the consummation of the
Offer and the holders thereof shall be entitled to receive from the Company (or,
at Parent's option, Parent) upon consummation of the Offer, in respect of each
Share subject to such Company Option, an amount in cash equal to the excess, if
any, of the Per Share Amount over the exercise price per share thereof (such
payment to
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be net of applicable withholding taxes), PROVIDED, HOWEVER, that with respect to
any person subject to Section 16(a) of the Securities Exchange Act, any such
amount shall be paid as soon as practicable after the first date payment can be
made without liability to such person under Section 16(b) of the Securities
Exchange Act. Upon the consummation of the Offer, Parent shall provide the
Company with the funds necessary to satisfy any of its obligations under this
SECTION 1.9(a).
(b) The Company hereby represents and warrants that all Company Option
Plans provide, or have been or will be amended to provide, for the actions
described in SECTION 1.9(a) hereof. The Company shall cause the Company Option
Plans to terminate as of the Effective Time.
1.10. CERTIFICATE OF INCORPORATION AND BYLAWS. Subject to
SECTION 5.5 hereof, at the Effective Time, the Certificate of Incorporation and
the Bylaws of the Surviving Corporation shall be the Certificate of
Incorporation and the Bylaws of Merger Sub in effect at the Effective Time
(subject to any subsequent amendments).
1.11. DIRECTORS AND OFFICERS. At the Effective Time, the directors of
Merger Sub immediately prior to the Effective Time shall be the directors of the
Surviving Corporation, and the officers of the Company immediately prior to the
Effective Time shall be the officers of the Surviving Corporation, in each case
until their successors are duly elected or appointed and qualified.
1.12. OTHER EFFECTS OF MERGER. The Merger shall have all further
effects as specified in the applicable provisions of the Delaware Code.
1.13. PROXY STATEMENT. (a) As promptly as practicable after the
consummation of the Offer and if required by applicable Law, the Company shall
prepare and file with the SEC, and shall use all reasonable best efforts to have
cleared by the SEC, and promptly thereafter shall mail to stockholders, a proxy
statement in connection with a meeting of the Company's stockholders to consider
the Merger or an information statement, as appropriate (such proxy statement or
information statement, as amended or supplemented, is herein referred to as the
"PROXY STATEMENT"). The Proxy Statement shall contain the recommendation of the
Board of Directors of the Company in favor of the Merger and the fairness
opinion of the Financial Advisor and such other disclosures as are required by
Law.
(b) Parent will furnish the Company with such information concerning
Parent and its subsidiaries as is necessary in order to cause the Proxy
Statement, insofar as it relates to Parent and its subsidiaries, to comply with
applicable Law. Parent agrees promptly to advise the Company if, at any
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time prior to the meeting of stockholders of the Company referenced herein, any
information provided by it specifically for inclusion in the Proxy Statement is
or becomes incorrect or incomplete in any material respect and to provide the
Company with the information needed to correct such inaccuracy or omission.
Parent will furnish the Company with such supplemental information as may be
necessary in order to cause the Proxy Statement, insofar as it relates to Parent
and its subsidiaries, to comply with applicable Law after the mailing thereof to
the stockholders of the Company.
(c) The Company and Parent agree to cooperate in making any preliminary
filings of the Proxy Statement with the SEC, as promptly as practicable,
pursuant to Rule 14a-6 under the Securities Exchange Act.
(d) The Company shall provide Parent for its review a copy of the Proxy
Statement at least such amount of time prior to each filing thereof as is
customary in transactions of the type contemplated hereby. Parent authorizes the
Company to utilize in the Proxy Statement the information concerning Parent and
its subsidiaries provided to the Company in connection with, or contained in,
the Proxy Statement.
1.14. ADDITIONAL ACTIONS. If, at any time after the Effective Time, the
Surviving Corporation shall consider or be advised that any deeds, bills of
sale, assignments, assurances or any other actions or things are necessary or
desirable to vest, perfect or confirm of record or otherwise in the Surviving
Corporation its right, title or interest in, to or under any of the rights,
properties or assets of Merger Sub or the Company or otherwise to carry out this
Agreement, the officers and directors of the Surviving Corporation shall be
authorized to execute and deliver, in the name and on behalf of Merger Sub or
the Company, all such deeds, bills of sale, assignments and assurances and to
take and do, in the name and on behalf of Merger Sub or the Company, all such
other actions and things as may be necessary or desirable to vest, perfect or
confirm any and all right, title and interest in, to and under such rights,
properties or assets in the Surviving Corporation or otherwise to carry out this
Agreement.
ARTICLE II.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent and Merger Sub that,
except as set forth in the correspondingly numbered Sections of the letter,
dated the date hereof, from the Company to Parent (the "COMPANY DISCLOSURE
LETTER"):
2.1. ORGANIZATION AND GOOD STANDING. The Company and each of the
Company Subsidiaries is a corporation or partnership
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duly organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization and has all requisite
corporate or partnership power and authority and any necessary governmental
approval to own, lease and operate its properties and to carry on its business
as now being conducted. The Company and each of the Company Subsidiaries is duly
qualified or licensed and in good standing to do business in each jurisdiction
in which the character of the property owned, leased or operated by it or the
nature of the business conducted by it makes such qualification or licensing
necessary, except where the failure to be so duly qualified or licensed and in
good standing would not, individually or in the aggregate, have or be reasonably
likely in the future to have a material adverse effect on the business, assets,
condition (financial or otherwise), liabilities or results of operations of the
Company and the Company Subsidiaries taken as a whole ("COMPANY MATERIAL ADVERSE
EFFECT") or prevent or delay the consummation of the Offer or Merger. The
Company has heretofore made available to Parent accurate and complete copies of
the Certificate of Incorporation and Bylaws, as currently in effect, of the
Company. For purposes of this Agreement, the term "COMPANY SUBSIDIARY" shall
mean any corporation, partnership or other legal entity of which the Company
(either alone or through or together with any other subsidiary) owns a majority
of the capital stock or other equity interests, and the Company is entitled to
vote for the election of the board of directors or other governing body of such
corporation, partnership or other legal entity.
2.2. CAPITALIZATION. As of the date hereof, the authorized capital
stock of the Company consists of (a) 50,000,000 shares of Company Stock, (b)
2,000,000 of Class B Common Stock, par value $0.01 per share (the "COMPANY CLASS
B STOCK"), and (c) 500,000 shares of preferred stock, par value $0.01 per share.
As of the close of business on the day immediately preceding the date hereof,
(a) 29,723,431 shares of Company Stock were issued and outstanding, (b) no
shares of Company Class B Stock were issued and outstanding, (c) no shares of
preferred stock were issued and outstanding and (d) 22,891 shares of Company
Stock were issued and held in the treasury of the Company. No other capital
stock of the Company is authorized or issued. All issued and outstanding shares
of the Company Stock are duly authorized, validly issued, fully paid and
non-assessable and free of preemptive or similar rights. Except as set forth in
the Company Filed Documents (as hereinafter defined) or SECTION 2.2 of the
Company Disclosure Letter, as of the date hereof there were no, and as of the
Expiration Date there will be no, outstanding rights, subscriptions, warrants,
puts, calls, unsatisfied preemptive rights, options or other agreements of any
kind relating to any of the outstanding, authorized but unissued, unauthorized
or treasury shares of the capital stock or any other interest in the ownership
or earnings of the Company or other security of the Company, and there is no
authorized or outstanding security of any kind convertible into
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or exchangeable for any such capital stock or other security. Except as set
forth in SECTION 2.2 of the Company Disclosure Letter, there are no outstanding
contractual obligations of the Company or any Company Subsidiaries to
repurchase, redeem or otherwise acquire any shares of Company Common Stock or
the capital stock of any Company Subsidiary or to provide funds to or make any
investment (in the form of a loan, capital contribution or otherwise) in any
such subsidiary or any other entity.
2.3. SUBSIDIARIES. SECTION 2.3 of the Company Disclosure Letter sets
forth the name and jurisdiction of incorporation or organization of each Company
Subsidiary, each of which is wholly owned by the Company except as otherwise
indicated in said SECTION 2.3 of the Company Disclosure Letter. All of the
capital stock and other interests of the Company Subsidiaries so held by the
Company are owned by it or a Company Subsidiary as indicated in said SECTION 2.3
of the Company Disclosure Letter, free and clear of any claim, lien,
encumbrance, security interest or agreement with respect thereto. All of the
outstanding shares of capital stock in each of the Company Subsidiaries directly
or indirectly held by the Company are duly authorized, validly issued, fully
paid and non-assessable and were issued free of preemptive or similar rights and
in compliance with applicable Laws. No equity securities or other interests of
any of the Company Subsidiaries are or may become required to be issued or
purchased by reason of any options, warrants, rights to subscribe to, puts,
calls or commitments of any character whatsoever relating to, or securities or
rights convertible into or exchangeable for, shares of any capital stock of any
Company Subsidiary, and there are no contracts, commitments, understandings or
arrangements by which any Company Subsidiary is bound to issue additional shares
of its capital stock, or options, warrants or rights to purchase or acquire any
additional shares of its capital stock or securities convertible into or
exchangeable for such shares.
2.4. AUTHORIZATION; BINDING AGREEMENT. The Company has all requisite
corporate power and authority to execute and deliver this Agreement, to perform
its obligations hereunder and to consummate the transactions contemplated
hereby. The execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby, including, but not limited
to, the Merger, have been duly and validly authorized by the Company's Board of
Directors and no other corporate proceedings on the part of the Company or any
Company Subsidiary are necessary to authorize the execution and delivery of this
Agreement or to consummate the transactions contemplated hereby (other than the
adoption of this Agreement by the stockholders of the Company to the extent
required by the Delaware Code). This Agreement has been duly and validly
executed and delivered by the Company and constitutes the legal, valid and
binding agreements of the Company, enforceable against the Company in accordance
with its terms. The Board of Directors
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of the Company has approved this Agreement, the Stockholders Agreement and the
transactions contemplated hereby and thereby (including but not limited to the
Offer, the Merger and the matters provided for in the Stockholders Agreement) so
as to render inapplicable hereto and thereto the limitation on business
combinations contained in Section 203 of the Delaware Code (or any similar
provision), assuming Parent and its "associates" and "affiliates" (as defined in
Section 203 of the Delaware Code) collectively beneficially own and have
beneficially owned at all times during the three-year period prior to the
execution of this Agreement and the Stockholders Agreement less than 15% of the
Shares outstanding. As a result, the only vote of holders of any class or series
of the Company's capital stock required to adopt this Agreement and the
transactions contemplated hereby, including the Merger, is the affirmative vote
of a majority of the outstanding Shares, and if Section 253 of the Delaware Code
is applicable to the Merger, no such vote will be required. No other state
takeover or control share statute or similar statute or regulation applies or
purports to apply to the Offer, the Merger, the Stockholder Agreement or any of
the transactions contemplated hereby or thereby.
2.5. GOVERNMENTAL APPROVALS. No consent, approval, waiver or
authorization of, notice to or declaration or filing with ("CONSENT"), any
nation or government, any state or other political subdivision thereof, any
entity, authority or body exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government,
including, without limitation, any governmental or regulatory authority, agency,
department, board, commission, administration or instrumentality, any court,
tribunal or arbitrator and any self-regulatory organization, domestic or foreign
("GOVERNMENTAL AUTHORITY"), on the part of the Company or any of the Company
Subsidiaries is required in connection with the execution, delivery or
performance by the Company of this Agreement or the consummation by the Company
of the transactions contemplated hereby other than (i) the filing of the
Certificate of Merger with the Secretary of State of Delaware in accordance with
the Delaware Code, (ii) filings with the SEC and the National Association of
Securities Dealers, Inc. ("NASD"), (iii) filings under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended, and the rules and regulations
promulgated thereunder (the "HSR ACT") and similar foreign requirements, (iv)
such filings as may be required in any jurisdiction where the Company is
qualified or authorized to do business as a foreign corporation in order to
maintain such qualification or authorization and (v) those Consents that, if
they were not obtained or made, individually or in the aggregate, would not have
or be reasonably likely in the future to have a Company Material Adverse Effect,
or prevent or materially delay consummation of the Offer or the Merger or the
Company from performing its obligations under this Agreement.
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2.6. NO VIOLATIONS. The execution, delivery and performance of this
Agreement, the consummation of the transactions contemplated hereby and
compliance by the Company with any of the provisions hereof will not (i)
conflict with or result in any breach of any provision of the Certificate of
Incorporation or Bylaws or other governing instruments of the Company or any of
the Company Subsidiaries, (ii) require any Consent under or result in a
violation or breach of, or constitute (with or without due notice or lapse of
time or both) a default (or give rise to any right of termination, cancellation
or acceleration) under any of the terms, conditions or provisions of any Company
Material Contract (as hereinafter defined), (iii) result in the creation or
imposition of any lien or encumbrance of any kind upon any of the assets of the
Company or any Company Subsidiary or (iv) subject to obtaining the Consents from
Governmental Authorities referred to in SECTION 2.5 hereof, contravene any
applicable provision of any statute, law, rule or regulation or any order,
decision, injunction, judgment, award or decree ("LAW") to which the Company or
any Company Subsidiary or its or any of their respective assets or properties
are subject, except, in the case of clauses (ii), (iii) and (iv) above, for any
deviations from the foregoing which would not, individually or in the aggregate,
have or be reasonably likely in the future to have a Company Material Adverse
Effect or prevent or materially delay consummation of the Offer or the Merger or
the Company from performing its obligations under this Agreement.
2.7. SECURITIES FILINGS. The Company and, to the extent applicable,
each of its then or current Company Subsidiaries, has filed all forms, reports,
statements and documents required to be filed with the SEC since December 31,
1994, each of which has complied in all material respects with the applicable
requirements of the Securities Act (as hereinafter defined) or the Securities
Exchange Act, each as in effect on the date so filed. The Company has made
available to Parent true and complete copies of (i) its Annual Reports on Form
10-K, as amended, for the years ended December 31, 1994, 1995 and 1996, as filed
with the SEC, (ii) its proxy statements relating to all of the meetings of
stockholders (whether annual or special) of the Company since January 1, 1995,
as filed with the SEC, and (iii) all other reports, statements and registration
statements and amendments thereto (including, without limitation, Quarterly
Reports on Form 10-Q and Current Reports on Form 8-K, as amended) filed by the
Company with the SEC since January 1, 1994, or, in the case of Quarterly Reports
on Form 10-Q, since October 1, 1996, and prior to the date hereof (collectively,
the "COMPANY FILED DOCUMENTS"). The reports and statements required to be filed
or furnished to stockholders pursuant to the Securities Exchange Act subsequent
to the date hereof, collectively with the Company Filed Documents, are referred
to collectively herein as the "COMPANY SECURITIES FILINGS." As of their
respective dates, or as of the date of the last amendment thereof, if amended
after filing, none of the Company Securities Filings contained or, as
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to the Company Securities Filings subsequent to the date hereof, will contain,
any untrue statement of a material fact or omitted or, as to the Company
Securities Filings subsequent to the date hereof, will omit, to state a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading. The
Company has heretofore furnished or made available to Parent a complete and
correct copy of any amendments or modifications which have not yet been filed
with the SEC to executed agreements, documents or other instruments which
previously had been filed by the Company with the SEC pursuant to the Securities
Act or the Securities Exchange Act.
2.8. COMPANY FINANCIAL STATEMENTS. The audited consolidated financial
statements and unaudited interim financial statements of the Company included in
the Company Securities Filings (the "COMPANY FINANCIAL STATEMENTS") have been or
will be, as the case may be, prepared in accordance with generally accepted
accounting principles applied on a consistent basis (except, with respect to any
Company Filed Documents, as may be indicated therein or in the notes thereto)
and present fairly, in all material respects, the consolidated financial
position of the Company and the Company Subsidiaries as at the dates thereof and
the consolidated results of their operations and cash flows for the periods then
ended subject, in the case of the unaudited interim financial statements, to
normal year-end audit adjustments (which in the aggregate are not material in
nature or amount), any other adjustments described in the Company Filed
Documents and the fact that certain information and notes have been condensed or
omitted in accordance with the Securities Exchange Act.
2.9. ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as set forth in the
Company Filed Documents, since December 31, 1996, the Company and the Company
Subsidiaries have conducted their businesses only in the ordinary course and in
a manner consistent with past practice and, since such date, there has not been:
(i) any event that, individually or in the aggregate, has had or is reasonably
likely in the future to have a Company Material Adverse Effect, (ii) any
declaration, payment or setting aside for payment of any dividend or other
distribution or any redemption or other acquisition of any shares of capital
stock or securities of the Company by the Company, (iii) any material damage or
loss to any material asset or property, whether or not covered by insurance,
(iv) any change by the Company in accounting principles or practices, (v) any
revaluation by the Company of any of its material assets, including but not
limited to, writing down the value of inventory or writing off notes or accounts
receivable other than in the ordinary course of business, (vi) any entry by the
Company or any Company Subsidiaries into any commitment or transactions material
to the Company and the Company Subsidiaries taken as a whole (other than
commitments or transactions entered into in the ordinary course
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of business), or (vii) any increase in or establishment of any bonus, insurance,
severance, deferred compensation, pension, retirement, profit sharing, stock
option (including without limitation the granting of stock options, stock
appreciation rights, performance awards, or restricted stock awards), stock
purchase or other employee benefit plan or agreement or arrangement, or, since
July 1, 1997, any other increase in the compensation payable or to become
payable to any present or former directors or officers, or any employment,
consulting or severance agreement or arrangement entered into with any such
present or former directors, officers or employees of the Company or any of the
Company Subsidiaries covered by SECTION 5.4 of the Company Disclosure Letter
("KEY Employees"). Since January 1, 1997, neither the Company nor any Company
Subsidiary has taken, or failed to take, any action that would have constituted
a breach of SECTION 4.1 hereof had the covenants therein applied since that
date, except as described in SECTION 2.9 of the Company Disclosure Schedule or
ordinary course increases in compensation as relates to Key Employees (other
than those entitled under SECTION 5.4 of the Company Disclosure Letter to
"Senior Management Severance").
2.10. COMPLIANCE WITH LAWS. The business and operations of the Company
and each of the Company Subsidiaries have been operated in compliance with all
Laws applicable thereto, except for any instances of non-compliance which,
individually or in the aggregate, have had or would be reasonably likely in the
future to have a Company Material Adverse Effect.
2.11. PERMITS. (i) The Company and the Company Subsidiaries have all
permits, certificates, licenses, approvals and other authorizations required in
connection with the operation of their respective businesses (collectively,
"COMPANY PERMITS"), (ii) neither the Company nor any of the Company Subsidiaries
is in violation of any Company Permit and (iii) no proceedings are pending or,
to the knowledge of the Company, threatened, to revoke or limit any Company
Permit, except, in each case, those the absence or violation of which,
individually or in the aggregate, have had or would be reasonably likely in the
future to have a Company Material Adverse Effect or prevent or result in a
material delay of the consummation of the Offer or the Merger.
2.12. LITIGATION. Except as disclosed in the Company Filed Documents,
there is no suit, action, investigation, claim or proceeding ("LITIGATION")
pending or, to the best knowledge of the Company, threatened against the Company
or any of the Company Subsidiaries which, individually or in the aggregate, has
had or would be reasonably likely in the future to have a Company Material
Adverse Effect, nor is there any judgment, decree, writ, award, injunction, rule
or order of any Governmental Authority outstanding against the Company or any of
the Company Subsidiaries which, individually or in the aggregate, has had or
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would be reasonably likely in the future to have a Company Material Adverse
Effect or prevent or result in a material delay of the consummation of the Offer
or the Merger.
2.13. CONTRACTS. Neither the Company nor any of the Company
Subsidiaries is a party or is subject to any note, bond, mortgage, indenture,
contract, lease, license, agreement or instrument that is required to be
described in or filed as an exhibit to any Company Securities Filing ("COMPANY
MATERIAL CONTRACT") that is not so described in or filed as required by the
Securities Act of 1933, as amended, and the rules and regulations thereunder
(the "SECURITIES ACT"), or the Securities Exchange Act in respect of the Company
Filed Documents, as the case may be. All such Company Material Contracts are
valid and binding and are in full force and effect and enforceable against the
Company or such subsidiary and, to the knowledge of the Company, against the
other parties thereto in accordance with their respective terms, except to the
extent that enforceability thereof may be limited by applicable bankruptcy,
insolvency, reorganization or other similar laws affecting the enforcement of
creditors' rights generally and by principles of equity regarding the
availability of remedies. Neither the Company nor any of the Company
Subsidiaries is in violation or breach of or default under any such Company
Material Contract where such violation or breach, individually or in the
aggregate, has had or would be reasonably likely in the future to have a Company
Material Adverse Effect.
2.14. EMPLOYEE BENEFIT PLANS. (a) SECTION 2.14 of the Company
Disclosure Letter contains a complete and accurate list of all material Benefit
Plans (as hereinafter defined) maintained or contributed to by the Company or
any of the Company Subsidiaries ("COMPANY BENEFIT PLAN"). A "BENEFIT PLAN" shall
include (i) an employee benefit plan as defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended, together with all
regulations thereunder ("ERISA"), even if, because of some other provision of
ERISA, such plan is not subject to any or all of ERISA's provisions, and (ii)
whether or not described in the preceding clause, any pension, profit sharing,
severance, employment, change-in-control, bonus, stock bonus, deferred or
supplemental compensation, retirement, thrift, stock purchase or stock option
plan or any other compensation, welfare, fringe benefit or retirement plan,
program, policy or arrangement providing for benefits for or the welfare of any
or all of the current or former employees or agents of the Company or any of the
Company Subsidiaries or their beneficiaries or dependents; provided that Benefit
Plans shall not include any multiemployer plan, as defined in Section 3(37) of
ERISA (a "MULTIEMPLOYER PLAN"). Each of the Company Benefit Plans has been
maintained in compliance with its terms and all applicable Law, except where the
failure to do so would not be reasonably likely in the future to result in a
Company Material Adverse Effect. Neither the Company nor any of the Company
Subsidiaries
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contributes to, or has any outstanding liability with respect to, any
Multiemployer Plan.
(b) Except to the extent that any of the following would not have or be
reasonably likely in the future to have a Company Material Adverse Effect: (i)
each Benefit Plan has been established and administered in accordance with its
terms and in compliance with applicable provisions of ERISA, the Code and other
applicable laws, rules and regulations; (ii) each Benefit Plan which is intended
to be qualified (within the meaning of Code Section 401(a)) is so qualified in
form and operation and has received a favorable determination letter as to its
qualification, and nothing has occurred, whether by action or failure to act,
that would cause the loss of such qualification; (iii) no event has occurred and
no condition exists that would subject the Company or any of the Company
Subsidiaries, either directly or by reason of their affiliation with an ERISA
Affiliate (as hereinafter defined) to any tax, fine, lien or penalty imposed by
ERISA, the Code or other applicable laws, rules and regulations; (iv) for each
Benefit Plan with respect to which a Form 5500 has been filed, no material
change has occurred with respect to the matters covered by the most recent Form
5500 since the date thereof; and (v) no "reportable event" (as such term is
defined in ERISA Section 4043), "prohibited transactions" (as such term is
defined in ERISA Section 406 and Code Section 4975), "accumulated funding
deficiency" (as such term is defined in ERISA Section 302 and Code Section 412
(whether or not waived)) or failure to make by its due date a required
installment under Code Section 412(m) has occurred with respect to any Benefit
Plan or any other plan maintained for employees of any ERISA Affiliate of the
Company or any of the Company Subsidiaries. "ERISA Affiliate," as applied to any
person, means (i) any corporation which is a member of a controlled group of
corporations (within the meaning of Code Section 414(b)) of which that person is
a member, (ii) any trade or business (whether or not incorporated) which is a
member of a group of trades or businesses under common control (within the
meaning of Code Section 414(c)) of which that person is a member and (iii) any
member of an affiliated service group (within the meaning of Code Section 414(m)
and (o)) of which that person, any corporation described in clause (i) above or
any trade or business described in clause (ii) above is a member.
(c) With respect to any Benefit Plan, (i) no actions, suits or claims
(other than routine claims for benefits in the ordinary course) are pending or,
to the knowledge of the Company, threatened which has had or would be reasonably
likely in the future to have a Company Material Adverse Effect and (ii) no facts
or circumstances exist, to the knowledge of the Company, that could give rise to
any such actions, suits or claims which would be reasonably likely in the future
to result in a Company Material Adverse Effect.
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(d) Except for (i) payments required to be made under the Company
Supplemental Severance Program and (ii) the accelerated vesting and cash-out of
Company Options as described in SECTION 1.9 hereof, no Benefit Plan exists that
could result in the payment to any present or former employee of the Company or
any Company Subsidiary of any money or other property, or accelerate or provide
any other rights or benefits, to any present or former employee of the Company
or any Company Subsidiary as a result of the transactions contemplated by this
Agreement, whether or not such payment would constitute a parachute payment
within the meaning of Code Section 280G, which payments, acceleration or
provision of benefits would be reasonably likely in the future to result in a
Company Material Adverse Effect.
2.15. TAXES AND RETURNS. (a) The Company and each of the Company
Subsidiaries and any consolidated, combined, unitary or aggregate group for tax
purposes of which the Company or any of the Company Subsidiaries is or has been
a member has timely filed, or caused to be timely filed all Tax Returns (as
hereinafter defined) required to be filed by it, and has paid, collected or
withheld, or caused to be paid, collected or withheld, all Taxes required to be
paid, collected or withheld, other than such Taxes for which adequate reserves
in the Company Financial Statements have been established in accordance with
generally accepted accounting principles, consistently applied, or which are
being contested in good faith. All such Tax Returns were true, correct and
complete in all material respects. There are no claims or assessments pending
against the Company or any of the Company Subsidiaries for any alleged
deficiency in any Tax, and the Company has not been notified in writing of any
proposed Tax claims or assessments against the Company or any of the Company
Subsidiaries (other than in each case, claims or assessments for which adequate
reserves in the Company Financial Statements have been established or which are
being contested in good faith and are immaterial in amount). Neither the Company
nor any of the Company Subsidiaries has any waivers or extensions of any
applicable statute of limitations to assess any Taxes. There are no outstanding
requests by the Company or any of the Company Subsidiaries for any extension of
time within which to file any Tax Return or within which to pay any material
amounts of Taxes shown to be due on any return. To the best knowledge of the
Company, there are no liens for Taxes on the assets of the Company or any of the
Company Subsidiaries except for statutory liens for current Taxes not yet due
and payable.
(b) For purposes of this Agreement, the term "TAX" shall mean any
federal, state, local, foreign or provincial income, gross receipts, property,
sales, use, license, excise, franchise, employment, payroll, alternative or
added minimum, ad valorem, transfer or excise tax, or any other tax, custom,
duty, governmental fee or other like assessment or charge of any kind
whatsoever, together with any interest or penalty imposed by any
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Governmental Authority. The term "TAX RETURN" shall mean a report, return or
other information (including any attached schedules or any amendments to such
report, return or other information) required to be supplied to or filed with a
governmental entity with respect to any Tax, including an information return,
claim for refund, amended return or declaration or estimated Tax.
2.16. INTELLECTUAL PROPERTY. The Company or its Subsidiaries own, or
are licensed or otherwise possess legal enforceable rights to use all patents,
trademarks, trade names, service marks, copyrights and any applications
therefor, technology, know-how, trade secrets, computer software programs or
applications, domain names and tangible or intangible proprietary information or
materials that are used in the respective businesses of the Company and the
Company Subsidiaries as currently conducted, except for any such failures to
own, be licensed or possess that, individually or in the aggregate, has not had
and is not reasonably likely in the future to have a Company Material Adverse
Effect. To the best knowledge of the Company, all patents, trademarks, trade
names, service marks and copyrights held by the Company or its Subsidiaries are
valid and subsisting.
2.17. ENVIRONMENTAL MATTERS. (a) Except as set forth in SECTION 2.17 of
the Company Disclosure Letter and except as, individually or in the aggregate,
have not had and are not reasonably likely in the future to have a Company
Material Adverse Effect or prevent or materially delay the consummation of the
Offer or the Merger, to the Company's knowledge;
(i) the Company and the Company Subsidiaries are, and
within the period of all applicable statutes of limitation
have been, in compliance with all Environmental Laws (as
hereinafter defined);
(ii) the Company and the Company Subsidiaries hold
all Environmental Permits (as hereinafter defined) (each of
which is in full force and effect) required for any of their
current operations and for any property owned, leased, or
otherwise operated by any of them, and are, and within the
period of all applicable statutes of limitation have been, in
compliance with the terms of all such Environmental Permits;
(iii) no review by, or approval of, any Governmental
Authority or other person is required under any Environmental
Law in connection with the execution or delivery of this
Agreement;
(iv) neither the Company nor any of the Company
Subsidiaries has received any written notice of Environmental
Claim (as hereinafter defined) and no
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such Environmental Claims are currently pending or threatened;
(v) Hazardous Materials are not present on any
property owned, leased or operated by the Company or any
Company Subsidiaries that is reasonably likely to form the
basis of any Environmental Claim against any of them, and
neither the Company nor any of the Company Subsidiaries has
reason to believe that Hazardous Materials are present on any
other property that is reasonably likely to form the basis of
any Environmental Claim against any of them; and
(vi) the Company has informed the Parent and Merger
Sub of: (A) all material facts which the Company reasonably
believes could form the basis of a material Environmental
Claim against any person (including, without limitation, any
predecessor of the Company or any of the Company Subsidiaries
whose liability the Company or any of the Company Subsidiaries
has or may have retained or assumed, either contractually or
by operation of law, arising out of non-compliance with any
Environmental Law or the presence of Hazardous Materials (as
hereinafter defined) at any location owned, operated or leased
by the Company or the Company Subsidiaries or on any other
property; (B) all currently estimated material costs the
Company reasonably expects it and any of the Company
Subsidiaries to incur to comply with Environmental Laws during
the next three years; and (C) all currently estimated material
costs the Company and any of the Company Subsidiaries
reasonably expect to incur for ongoing, and reasonably
anticipated, investigation and remediation of Hazardous
Materials (including, without limitation, any payments to
resolve any threatened or asserted Environmental Claim for
investigation and remediation costs).
(b) For purposes of this Agreement, the terms below shall have the
following meanings:
"Environmental Claim" means any claim, demand, action, suit, complaint,
proceeding, directive, investigation, lien, demand letter, or notice of alleged
noncompliance, violation or liability, by any person or entity asserting
liability or potential liability (including without limitation, liability or
potential liability for enforcement, investigatory costs, remediation costs,
operation and maintenance costs, governmental response costs, natural resource
damages, property damage, personal injury, fines or penalties), regardless of
legal theory, arising out of, based on or resulting from (i) the presence,
discharge, emission, release or threatened release of any
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Hazardous Materials at any location or (ii) otherwise relating to obligations or
liabilities under any Environmental Law.
"Environmental Laws" means any and all laws, rules, orders,
regulations, statutes, ordinances, guidelines, codes, decrees or other legally
enforceable requirement (including, without limitation, common law) of any
foreign government, the United States or any state, local, municipal or other
governmental authority regulating, relating to or imposing liability or
standards of conduct concerning protection of human health or the environment.
"Environmental Permit" means all permits, licenses, registrations,
approvals, exemptions and other filings with or authorizations by any
Governmental Authority under any Environmental Law.
"Hazardous Materials" means all hazardous or toxic substances, wastes,
materials or chemicals, petroleum (including crude oil or any fraction thereof),
petroleum products, asbestos, asbestos-containing materials, pollutants,
contaminants and all other materials, whether or not defined as such, that are
regulated pursuant to any Environmental Laws.
2.18. OFFER DOCUMENTS; PROXY STATEMENT. The Proxy Statement will comply
in all material respects with the applicable requirements of the Securities
Exchange Act except that no representation or warranty is being made by the
Company with respect to any information supplied to the Company by Parent or
Merger Sub specifically for inclusion in the Proxy Statement. The Proxy
Statement will not, at the time the Proxy Statement is filed with the SEC or
first sent to stockholders, at the time of the Company's stockholders' meeting
or at the Effective Time, contain any untrue statement of a material fact or
omit to state any 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 or necessary to correct any statement in any
earlier communication with respect to the solicitation of proxies for the
meeting of the Company's stockholders held for approval of the Merger which has
become false or misleading. The Schedule 14D-9 will comply in all material
respects with the Securities Exchange Act. Neither the Schedule 14D-9 nor any of
the information relating to the Company or its affiliates provided by or on
behalf of the Company specifically for inclusion in the Schedule 14D-1 or the
Offer Documents will, at the respective times the Schedule 14D-9, the Schedule
14D-1 and the Offer Documents are filed with the SEC or are first published,
sent or given to stockholders of the Company, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading. No representation is
made by the Company with respect to written
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information supplied by Parent or Merger Sub specifically for inclusion in the
Schedule 14D-9.
2.19. FINDERS AND INVESTMENT BANKERS. Neither the Company nor any of
its officers or directors has employed any broker, finder or financial advisor
or otherwise incurred any liability for any brokerage fees, commissions or
financial advisors' or finders' fees in connection with the transactions
contemplated hereby, other than pursuant to an agreement with the Financial
Advisor, a copy of which has been provided to Parent.
2.20. FAIRNESS OPINION. The Company's Board of Directors has received
from the Financial Advisor a written opinion addressed to it to the effect that,
as of the date hereof, the consideration to be paid to stockholders pursuant to
each of the Offer and the Merger is fair to such stockholders from a financial
point of view.
2.21. RELATED PARTY TRANSACTIONS. Except as set forth in the Company
Filed Documents, no director, officer or affiliate of the Company, including for
these purposes, the Stockholders, or director, officer or partner of such
affiliate (each a "RELATED PARTY")(i) has outstanding any indebtedness or other
similar obligation to the Company or any of the Company Subsidiaries or (ii)
other than employment-related benefits contemplated by or disclosed in this
Agreement, is a party to any legally binding material contract, commitment or
obligation to, from or with the Company or any Company Subsidiary.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF PARENT
Parent represents and warrants to the Company that, except as set forth
in the correspondingly numbered Sections of the letter, dated the date hereof,
from Parent to the Company (the "PARENT DISCLOSURE LETTER"):
3.1. ORGANIZATION AND GOOD STANDING. Parent and Merger Sub are each a
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation and has all requisite corporate power
and authority and any necessary governmental authority to own, lease and operate
its properties and to carry on its business as now being conducted.
3.2. AUTHORIZATION; BINDING AGREEMENT. Parent and Merger Sub have all
requisite corporate power and authority to execute and deliver this Agreement,
to perform its obligations hereunder and to consummate the transactions
contemplated hereby. The execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated hereby, including,
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but not limited to, the Merger, have been duly and validly authorized by the
respective Boards of Directors of Parent and Merger Sub, as appropriate, and no
other corporate proceedings on the part of Parent, Merger Sub or any other
subsidiary of Parent are necessary to authorize the execution and delivery of
this Agreement or to consummate the transactions contemplated hereby (other than
the requisite approval by the sole stockholder of Merger Sub of this Agreement
and the Merger). This Agreement has been duly and validly executed and delivered
by each of Parent and Merger Sub and constitutes the legal, valid and binding
agreements of Parent and Merger Sub, enforceable against each of Parent and
Merger Sub in accordance with its terms.
3.3. GOVERNMENTAL APPROVALS. No Consent from or with any Governmental
Authority on the part of Parent or Merger Sub is required in connection with the
execution or delivery by Parent and Merger Sub of this Agreement or the
consummation by Parent and Merger Sub of the transactions contemplated hereby
other than (i) filings under the HSR Act and similar foreign requirements, (ii)
filings with the SEC and the NASD, (iii) those Consents that, if they were not
obtained or made, would not prevent or materially delay consummation of the
Offer or the Merger, Parent or Merger Sub from performing its obligations under
this Agreement and (iv) such filings as may be required in any jurisdiction
where Parent is qualified or authorized to do business as a foreign corporation
in order to maintain such qualification or authorization.
3.4. NO VIOLATIONS. The execution, delivery and performance of this
Agreement, the consummation of the transactions contemplated hereby and
compliance by Parent with any of the provisions hereof will not (i) conflict
with or result in any breach of any provision of the Certificate of
Incorporation or Bylaws or other governing instruments of Parent or any of the
Parent Subsidiaries, (ii) require any Consent under or result in a violation or
breach of, or constitute (with or without due notice or lapse of time or both) a
default (or give rise to any right of termination, cancellation or acceleration)
under any of the terms, conditions or provisions of any material contract,
instrument, permit, license or franchise to which the Parent is a party or by
which Parent or any of its assets or property is subject, (iii) result in the
creation or imposition of any material lien or encumbrance of any kind upon any
of the assets of Parent or any subsidiary of Parent or (iv) subject to obtaining
the Consents from Governmental Authorities referred to in SECTION 3.4 hereof,
contravene any Law to which Parent or any subsidiary of Parent or its or any of
their respective assets or properties are subject, except, in the case of
clauses (ii), (iii) and (iv) above, for any deviations from the foregoing which
would not, individually or in the aggregate, have or be reasonably likely in the
future to have a material adverse effect on the business, assets, condition
(financial or otherwise),
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liabilities or results of operations of Parent and its subsidiaries taken as a
whole.
3.5. OFFER DOCUMENTS; PROXY STATEMENT. None of the information supplied
by Parent, its officers, directors, representatives, agents or employees (the
"PARENT INFORMATION"), specifically for inclusion in the Proxy Statement will,
on the date the Proxy Statement is first mailed to stockholders, at the time of
the Company's stockholders' meeting or at the Effective Time, contain any
statement which, at such time and in light of the circumstances under which it
will be made, will be false or misleading with respect to any material fact, or
will omit to state any material fact necessary in order to make the statements
therein not false or misleading or necessary to correct any statement in any
earlier communication with respect to the solicitation of proxies for such
stockholders' meeting which has become false or misleading. Neither the Offer
Documents nor any amendments thereof or supplements thereto will, at any time
the Offer Documents are filed with the SEC or first published, sent or given to
the Company's stockholders, contain any untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. Notwithstanding the foregoing, neither Parent nor Merger Sub makes
any representation or warranty with respect to any information that has been
supplied by the Company or its accountants, counsel or other authorized
representatives for use in any of the foregoing documents. The Offer Documents
will comply as to form in all material respects with the provisions of the
Securities Exchange Act.
3.6. FINDERS AND INVESTMENT BANKERS. Neither Parent nor any of its
officers or directors has employed any broker, finder or financial advisor or
otherwise incurred any liability for any brokerage fees, commissions or
financial advisors' or finders' fees in connection with the transactions
contemplated hereby, other than pursuant to an agreement with Bear Stearns &
Co., Inc.
3.7. FINANCING ARRANGEMENTS. At the Effective Time, Parent will have
funds available to it sufficient to purchase the Shares in accordance with the
terms of this Agreement and to pay all amounts due (or which will, as a result
of the transactions contemplated hereby, become due) in respect of any
indebtedness of the Company for money borrowed.
3.8. NO PRIOR ACTIVITIES. Except for obligations or liabilities
incurred in connection with its incorporation or organization or the negotiation
and consummation of this Agreement and the transactions contemplated hereby
(including any financing in connection therewith), Merger Sub has not incurred
any obligations or liabilities, and has not engaged in any
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business or activities of any type or kind whatsoever or entered into any
agreements or arrangements with any person or entity.
ARTICLE IV.
ADDITIONAL COVENANTS OF THE COMPANY
The Company covenants and agrees as follows:
4.1. CONDUCT OF BUSINESS OF THE COMPANY AND THE COMPANY SUBSIDIARIES.
(a) Except as expressly contemplated by SECTION 4.1 of the Company Disclosure
Letter, during the period from the date of this Agreement to the Effective Time,
(i) the Company shall conduct, and it shall cause the Company Subsidiaries to
conduct, its or their businesses in the ordinary course and consistent with past
practice, and the Company shall, and it shall cause the Company Subsidiaries to,
use its or their reasonable commercial efforts to preserve intact its business
organization, to keep available the services of its officers and employees and
preserve intact the present commercial relationships of the Company and the
Company Subsidiaries with all persons with whom it does business and (ii)
without limiting the generality or effect of the foregoing, neither the Company
nor any of the Company Subsidiaries will:
(A) amend or propose to amend its Certificate of Incorporation or
Bylaws (or comparable governing instruments);
(B) authorize for issuance, issue, deliver, grant, sell, pledge,
dispose of or propose to issue, deliver, grant, sell, pledge or dispose of
any shares of, or any options, warrants, commitments, subscriptions or
rights of any kind to acquire or sell any shares of, the capital stock or
other securities of the Company or any of the Company Subsidiaries
including, but not limited to, stock appreciation rights, phantom stock,
any securities convertible into or exchangeable for shares of stock of any
class of the Company or any of the Company Subsidiaries, except for (a) the
issuance of up to 3,327,445 Shares pursuant to the exercise of either
incentive or non-qualified stock options, including management stock
options, outstanding on the close of business on the day immediately
preceding the date of this Agreement and listed in SECTION 2.2 of the
Company Disclosure Schedule in accordance with their present terms and (b)
shares issued in accordance with the Company's Employee Stock Purchase Plan
that are issuable on or prior to the date hereof (the specific number of
which the Company will inform Parent within three business days of the date
hereof);
(C) split, combine or reclassify any shares of its capital stock
or declare, pay or set aside any
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dividend or other distribution (whether in cash, stock or property or any
combination thereof) in respect of its capital stock, other than dividends
or distributions to the Company or a Company Subsidiary in the ordinary
course of business, or directly or indirectly redeem, purchase or otherwise
acquire or offer to acquire, directly or indirectly, any shares of its
capital stock or other securities;
(D) (a) other than in the ordinary course of business consistent
with past practice, (i) assume, guarantee, endorse or otherwise become
liable or responsible (whether directly, indirectly, contingently or
otherwise) for the obligations of any person or (ii) make any loans,
advances or capital contributions to, or investments in, any other person
(other than to a Company Subsidiary (or other entity in which the Company
directly or indirectly owns at least 100% of the outstanding voting
securities) and customary travel, relocation or business advances to
employees); (b) acquire the stock or the assets of, or merge or consolidate
with, any other person; (c) voluntarily incur any material liability or
obligation (absolute, accrued, contingent or otherwise) other than in the
ordinary course of business and in a manner consistent with past practice;
or (d) sell, transfer, mortgage, pledge or otherwise dispose of, or
encumber, or agree to sell, transfer, mortgage, pledge or otherwise dispose
of or encumber, any assets or properties, real, personal or mixed material
to the Company and the Company Subsidiaries other than sales of products in
the ordinary course of business and in a manner consistent with past
practice; (e) incur any indebtedness for borrowed money or issue any debt
securities or assume, guarantee or endorse, or otherwise as an
accommodation become responsible for, the obligations of any person, or
make any loans, advances or capital contributions to, or investments in,
any other person (other than in the ordinary course of business consistent
with past practice); (f) enter into any contract or agreement other than in
the ordinary course of business consistent with past practice; or (g)
authorize any single capital expenditure which is in excess of $1,400,000
or capital expenditures (during any two-month period) which are, in the
aggregate, in excess of $4,000,000 for the Company and the Company
Subsidiaries taken as a whole;
(E) increase in any manner the compensation of any of its
directors, officers or employees or enter into, establish, amend or
terminate any employment, consulting, retention, change in control,
collective bargaining, bonus or other incentive compensation, profit
sharing, health or other welfare, stock option or other equity, pension,
retirement, vacation, severance, deferred compensation or other
compensation or benefit plan, policy, agreement, trust, fund or arrangement
with, for or in respect of, any stockholder, officer, director, other
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employee, agent, consultant or affiliate other than (i) as required
pursuant to the terms of agreements in effect on the date of this Agreement
and set forth in SECTION 4.1 of the Company Disclosure Schedule, (ii)
increases in salaries of employees who are not directors or officers of the
Company or Key Employees made in the ordinary course of business consistent
with past practice or (iii) increases in salaries of Key Employees who are
not officers or entitled to "Senior Management Severance" pursuant to
SECTION 5.4 of the Company Disclosure Letter, with Parent's prior written
consent (which will not be unreasonably withheld);
(F) except as may be required as a result of a change in Law or
in generally accepted accounting principles, change any of the accounting
practices or principles used by it;
(G) make any material Tax election, settle or compromise any
material federal, state, local or foreign Tax liability, or waive any
statute of limitations for any Tax claim or assessment;
(H) settle or compromise any pending or threatened suit, action
or claim which is material or which relates to the transactions
contemplated hereby;
(I) adopt a plan of complete or partial liquidation, dissolution,
merger, consolidation, restructuring, recapitalization or other
reorganization of the Company or any Company Subsidiary not constituting an
inactive subsidiary (other than the Merger);
(J) pay, discharge or satisfy any claims, liabilities or
obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than the payment, discharge or satisfaction (a) in the
ordinary course of business and consistent with past practice of
liabilities reflected or reserved against in the financial statements of
the Company or incurred in the ordinary course of business and consistent
with past practice and (b) of liabilities required to be paid, discharged
or satisfied pursuant to the terms of any contract in existence on the date
hereof (including, without limitation, benefit plans relating to directors)
or entered into in accordance with this SECTION 4.1;
(K) permit any material insurance policy naming the Company or
any Company Subsidiary as a beneficiary or a loss payable payee to be
cancelled or terminated without notice to Parent, except in the ordinary
course of business and consistent with past practice; or
(L) take, or offer or propose to take, or agree to take in
writing or otherwise, any of the actions
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described in SECTION 4.1(a) or any action which would make any of the
representations or warranties of the Company contained in this Agreement
untrue and incorrect in any material respect as of the date when made if
such action had then been taken, or would result in any of the Offer
Conditions not being satisfied.
(b) The Company shall, and the Company shall cause each of the Company
Subsidiaries to, use its or their best efforts to comply in all material
respects with all Laws applicable to it or any of its properties, assets or
business and maintain in full force and effect all the Company Permits necessary
for, or otherwise material to, such business.
4.2. NOTIFICATION OF CERTAIN MATTERS. The Company shall give prompt
notice to Parent if any of the following occur after the date of this Agreement:
(i) receipt of any notice or other communication in writing from any third party
alleging that the Consent of such third party is or may be required in
connection with the transactions contemplated by this Agreement; (ii) receipt of
any notice or other communication from any Governmental Authority (including,
but not limited to, the NASD or any securities exchange) in connection with the
transactions contemplated by this Agreement; (iii) the occurrence of an event
which would or would be reasonably likely in the future to (A) have a Company
Material Adverse Effect or prevent or delay the consummation of the Offer or the
Merger or (B) cause any Offer Condition to be unsatisfied at any time prior to
the consummation of the Offer; (iv) any breach by the Company of any provision
hereof; or (v) the commencement or threat of any Litigation involving or
affecting the Company or any of the Company Subsidiaries, or any of their
respective properties or assets, or, to its knowledge, any employee, agent,
director or officer, in his or her capacity as such, of the Company or any of
the Company Subsidiaries which, if pending on the date hereof, would have been
required to have been disclosed in this Agreement or which relates to the
consummation of the Merger.
4.3. ACCESS AND INFORMATION. Between the date of this Agreement and the
Effective Time, the Company will give, and shall cause its accountants and legal
counsel to give, Parent and its respective authorized representatives
(including, without limitation, its financial advisors, accountants and legal
counsel), at all reasonable times, access as reasonably requested to all
personnel, offices and other facilities and to all contracts, agreements,
commitments, books and records of or pertaining to the Company and the Company
Subsidiaries, will permit the foregoing to make such reasonable inspections as
they may require and will cause its officers promptly to furnish Parent with (a)
such financial and operating data and other information with respect to the
business and properties of the Company and the Company Subsidiaries as Parent
may from time to time reasonably request, and (b) a copy of each report,
schedule
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and other document filed or received by the Company or any of the Company
Subsidiaries pursuant to the requirements of applicable securities laws or the
NASD.
4.4. STOCKHOLDER APPROVAL. As soon as practicable following the
consummation of the Offer, the Company will take all steps necessary to duly
call, give notice of, convene and hold a meeting of its stockholders for the
purpose of voting upon the approval and adoption of this Agreement and the
transactions contemplated hereby and thereby (the "COMPANY PROPOSALS"), if such
meeting is required. Except as otherwise contemplated by this Agreement, (i) the
Board of Directors of the Company will recommend to the stockholders of the
Company that they approve the Company Proposals, (ii) the Company will include
in the Proxy Statement the unanimous recommendation of the Company's Board of
Directors that the stockholders of the Company vote in favor of the adoption of
this Agreement and the transactions contemplated hereby and the written opinion
of the Financial Advisor that the consideration to be received by the
stockholders of the Company pursuant to the Offer and the Merger is fair from a
financial point of view and (iii) the Company will use its reasonable best
efforts to obtain any necessary approval by the Company's stockholders of the
Company Proposals. Notwithstanding the foregoing, in the event that Merger Sub
shall acquire at least 90% of the outstanding Shares, the Company agrees, at the
request of Merger Sub, subject to Article VI, to take all necessary and
appropriate action to cause the Merger to become effective as soon as reasonably
practicable after such acquisition, without a meeting of the Company's
stockholders, in accordance with Section 253 of the Delaware Code.
4.5. REASONABLE BEST EFFORTS. Subject to the terms and conditions
herein provided, the Company agrees to use its reasonable best efforts to take,
or cause to be taken, all actions and to do, or cause to be done, all things
necessary, proper or advisable to consummate and make effective as promptly as
practicable the transactions contemplated by this Agreement, including, but not
limited to, (i) obtaining all Consents from Governmental Authorities and other
third parties required for the consummation of the Offer and the Merger and the
transactions contemplated thereby, (ii) timely making all necessary filings
under the HSR Act and German anticompetition laws and (iii) having vacated,
dismissed or withdrawn any order, stay, decree, judgment or injunction of any
Governmental Authority which temporarily, preliminarily or permanently prohibits
or prevents the transactions contemplated by this Agreement. Upon the terms and
subject to the conditions hereof, the Company agrees to use its reasonable best
efforts to take, or cause to be taken, all actions and to do, or cause to be
done, all things necessary to satisfy the other conditions of the closing set
forth herein.
4.6. PUBLIC ANNOUNCEMENTS. So long as this Agreement is in effect, the
Company shall not, and shall cause its
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affiliates not to, issue or cause the publication of any press release or any
other announcement with respect to the Offer or the Merger or the transactions
contemplated hereby without the consent of Parent, except for such as the
foregoing as the Company determines that such release or announcement is
required by applicable Law or pursuant to any applicable listing agreement with,
or rules or regulations of, the NASD, in which case the Company, prior to making
such announcement, will, if practicable in the circumstances, consult with
Parent regarding the same.
4.7. COMPLIANCE. In consummating the transactions contemplated hereby,
the Company shall comply, and/or cause the Company Subsidiaries to comply or to
be in compliance, in all material respects, with all applicable Laws.
4.8 NO SOLICITATION. (a) The Company shall, and shall cause its
officers, directors, employees, representatives and agents to, immediately cease
any discussions or negotiations with any parties that may be ongoing with
respect to a Takeover Proposal (as hereinafter defined). The Company shall not,
nor shall it permit any of the Company Subsidiaries to, nor shall it authorize
or permit any of its officers, directors or employees or any investment banker,
financial advisor, attorney, accountant or other representative retained by it
or any of the Company Subsidiaries to, directly or indirectly, (i) solicit,
initiate or encourage (including by way of furnishing information), or take any
other action designed or reasonably likely to facilitate, any inquiries or the
making of any proposal which constitutes, or may reasonably be expected to lead
to, any Takeover Proposal or (ii) participate in any discussions or negotiations
regarding any Takeover Proposal; PROVIDED, HOWEVER, that if, at any time prior
to the Expiration Date and following the receipt of a Superior Proposal, the
Board of Directors of the Company determines in good faith, based upon the
advice of outside counsel, that such action is necessary for the Board of
Directors to comply with its fiduciary duties to the Company's stockholders
under applicable Law, the Company may, in response to a Superior Proposal that
was made in circumstances not otherwise involving a breach of this Agreement,
and subject to compliance with SECTION 4.8(c), (x) furnish information with
respect to the Company to any person pursuant to a confidentiality agreement
having terms substantially the same as the Confidentiality Agreement (as
hereinafter defined), provided that (i) such confidentiality agreement may not
include any provision calling for an exclusive right to negotiate with the
Company and (ii) the Company advises Parent of all such nonpublic information
delivered to such person concurrently with its delivery to the requesting party,
and (y) participate in negotiations regarding such Superior Proposal. "TAKEOVER
PROPOSAL" means any inquiry, proposal or offer from any person relating to any
direct or indirect acquisition or purchase of 15% or more of the assets of the
Company and the Company Subsidiaries or 15% or more of any class of equity
securities of the Company or any Company Subsidiary, any tender offer or
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exchange offer that if consummated would result in any person beneficially
owning 15% or more of any class of equity securities of the Company or any
Company Subsidiary, any merger, consolidation, share exchange, business
combination, recapitalization, liquidation, dissolution or similar transaction
involving the Company or any Company Subsidiary, other than the transactions
contemplated by this Agreement.
(b) Except as set forth in this SECTION 4.8, neither the Board of
Directors of the Company nor any committee thereof shall (i) withdraw or modify,
or propose publicly to withdraw or modify, in a manner adverse to Parent, the
approval or recommendation by such Board of Directors or such committee of the
Offer, the Stockholders Agreement or the Company Proposals, (ii) approve or
recommend, or propose publicly to approve or recommend, any Takeover Proposal or
(iii) cause the Company to enter into any letter of intent, agreement in
principle, acquisition agreement or other similar agreement (each, an
"ACQUISITION AGREEMENT") related to any Takeover Proposal. Notwithstanding the
foregoing, in the event that prior to the Expiration Date the Board of Directors
of the Company determines in good faith, in response to a Superior Proposal that
was made in circumstances not otherwise involving a breach of this Agreement,
after consultation with outside counsel, that such action is necessary for the
Board of Directors to comply with its fiduciary duties to the Company's
stockholders under applicable law, the Board of Directors of the Company may
(subject to this and the following sentences) (x) withdraw or modify its
approval or recommendation of the Offer or the Company Proposals or (y) approve
or recommend a Superior Proposal, PROVIDED, HOWEVER, that any actions described
in clauses (x) and (y) may be taken only at a time that is after the fifth
business day following Parent's receipt of written notice advising Parent that
the Board of Directors of the Company has received a Superior Proposal,
specifying the material terms and conditions of such Superior Proposal,
identifying the person making such Superior Proposal and providing notice of the
determination of the Board of Directors of the Company of what action referred
to herein the Board of Directors of the Company has determined to take,
PROVIDED, FURTHER, that the foregoing proviso shall not prevent the Board of
Directors of the Company from taking any actions described in clause (x) within
five business days of the Expiration Date so long as the notice described in the
foregoing proviso is received by Parent prior to Noon, New York City time, on
the then scheduled Expiration Date. For purposes of this Agreement, a "Superior
Proposal" means a bona fide written Takeover Proposal which (i) a majority of
the disinterested members of the Board of Directors of the Company determines,
in their good faith judgment (based on the opinion of independent financial
advisors) that the value of the consideration provided for in such proposal
exceeds 110% of the Per Share Amount then provided in the Offer, and,
considering all relevant factors, is as or more favorable to the Company and its
stockholders than the
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Offer and the Merger and (ii) for which financing, to the extent required, is
then fully committed or which, in the good faith judgment of a majority of the
disinterested members of the Board of Directors (based on the advice of
independent financial advisors), is reasonably capable of being financed by such
third party.
(c) In addition to the obligations of the Company set forth in
paragraphs (a) and (b) of this SECTION 4.8, the Company shall promptly advise
Parent orally and in writing of any request for information or of any Takeover
Proposal, the material terms and conditions of such request or the Takeover
Proposal and the identity of the person making such request or Takeover Proposal
and shall keep Parent promptly advised of all significant developments which
could reasonably be expected to culminate in the Board of Directors of the
Company withdrawing, modifying or amending its recommendation of the Offer, the
Merger and the Transaction contemplated by this Agreement.
(d) Nothing contained in this SECTION 4.8 shall prohibit the Company
from taking and disclosing to its stockholders a position contemplated by Rule
14e-2(a) promulgated under the Securities Exchange Act or from making any
disclosure to the Company's stockholders; PROVIDED, HOWEVER, neither the Company
nor its Board of Directors nor any committee thereof shall, except as in
accordance with SECTION 4.8(b), withdraw or modify, or propose publicly to
withdraw or modify, its position with respect to the Offer or the Company
Proposals or approve or recommend, or propose publicly to approve or recommend,
a Takeover Proposal.
4.9. SEC AND STOCKHOLDER FILINGS. The Company shall send to Parent a
copy of all public reports and materials as and when it sends the same to its
stockholders, the SEC or any state or foreign securities commission.
4.10. TAKEOVER STATUTES. If any "fair price," "moratorium," "control
share acquisition" or other similar antitakeover statute or regulation enacted
under state or federal laws in the United States (each a "TAKEOVER STATUTE") is
or may become applicable to the Offer or the Merger, the Company and the members
of its Board of Directors will grant such approvals, and take such actions as
are necessary so that the transactions contemplated by this Agreement and the
Company Proposals may be consummated as promptly as practicable on the terms
contemplated hereby and otherwise act to eliminate or minimize the effects of
any Takeover Statute on any of the transactions contemplated hereby.
4.11. RELATED PARTY AGREEMENTS. Except as set forth in SECTION 4.11 of
the Company Disclosure Letter and except for employment-related agreements or
obligations contemplated by or disclosed in this Agreement, the Company shall
take all actions
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necessary to terminate, effective as of the Effective Time, all contracts,
commitments or obligations to, from or with the Company or Company Subsidiary,
on the one hand, and any Related Party, on the other hand.
ARTICLE V.
ADDITIONAL COVENANTS OF PARENT
Parent covenants and agrees as follows:
5.1. REASONABLE BEST EFFORTS. Subject to the terms and conditions
herein provided, Parent agrees to use its reasonable best efforts to take, or
cause to be taken, all actions and to do, or cause to be done, all things
necessary, proper or advisable to consummate and make effective as promptly as
practicable the transactions contemplated by this Agreement, including, but not
limited to, (i) obtaining all Consents from Governmental Authorities and other
third parties required for the consummation of the Offer and the Merger and the
transactions contemplated thereby, (ii) timely making all necessary filings
under the HSR Act and (iii) having vacated, dismissed or withdrawn any order,
stay, decree, judgment or injunction of any Governmental Authority which
temporarily, preliminarily or permanently prohibits or prevents the transactions
contemplated by this Agreement. Upon the terms and subject to the conditions
hereof, Parent agrees to use its reasonable best efforts to take, or cause to be
taken, all actions and to do, or cause to be done, all things necessary to
satisfy the other conditions of the closing set forth herein. Notwithstanding
any other provision hereof, in no event will Parent, Merger Sub or any of their
affiliates (collectively, the "PARENT GROUP") be required to take or fail to
take any action in order to obtain or make a Consent arising out of any
contractual or legal obligation of or applicable to the Company or the Company
Subsidiaries, other than obligations such as those under the HSR Act which apply
to both the Company and the Parent Group and then only to the extent applicable
to the Parent Group, and in no event will any member of the Parent Group be
required to enter into or offer to enter into any divestiture, hold-separate,
business limitation or similar agreement or undertaking in connection with this
Agreement or the transactions contemplated hereby.
5.2. PUBLIC ANNOUNCEMENTS. So long as this Agreement is in effect,
Parent shall not, and shall cause its affiliates not to, issue or cause the
publication of any press release or any other announcement with respect to the
Offer or the Merger or the transactions contemplated hereby without the consent
of the Company, except for such of the foregoing as to which Parent determines
that such release or announcement is required by applicable Law or pursuant to
any applicable listing agreement with, or rules or regulations of, any stock
exchange on which shares the Parent's capital stock are listed or the NASD, in
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which case Parent, prior to making such announcement, will, if practicable in
the circumstances, consult with the Company regarding the same.
5.3. COMPLIANCE. In consummating the transactions contemplated hereby,
Parent shall comply in all material respects with the provisions of the
Securities Exchange Act and the Securities Act and shall comply, and/or cause
its subsidiaries to comply or to be in compliance, in all material respects,
with all other applicable Laws.
5.4. EMPLOYEE BENEFIT PLANS. As of the Effective Time or the
consummation of the Offer, as applicable, Parent shall cause the Surviving
Corporation to take such actions with respect to the Company Benefit Plans and
the Key Employees as are set forth in SECTION 5.4 of the Company Disclosure
Letter.
5.5. INDEMNIFICATION, EXCULPATION AND INSURANCE (a) All rights to
indemnification and exculpation from liabilities for acts or omissions occurring
at or prior to the Effective Time existing in favor of the current or former
directors, officers or employees of the Company as provided in the Company's
certificate of incorporation or bylaws will be assumed by the Surviving
Corporation and Parent will cause the Surviving Corporation to honor such
obligations in accordance with the terms thereof, without further action, as of
the Effective Time, and such rights will continue in full force and effort in
accordance with their respective terms. Such rights, and the Surviving
Corporation's and Parent's concomitant obligations, shall apply in all respects
to the current or former directors, officers and employees of each of the
Company Subsidiaries as though such directors, officers and employees were
entitled to indemnification rights pursuant to the Company's certificate of
incorporation or bylaws as in effect on the date hereof. In addition, from and
after the Effective Time, directors and officers of the Company who become or
remain directors or officers of Parent will be entitled to the same indemnity
rights and protections (including those provided by directors' and officers'
liability insurance) as are afforded to other directors and officers of Parent.
Notwithstanding any other provision hereof, the provisions of this Section 5.5
(i) are intended to be for the benefit of, and will be enforceable by, each
indemnified party, his or her heirs and his or her representatives and (ii) are
in addition to, and not in substitution for, any other rights to indemnification
or contribution that any such person may have by contract or otherwise.
(b) Parent will, and will cause the Surviving Corporation to, maintain
in effect for not less than six years after the Effective Time policies of
directors' and officers' liability insurance equivalent in all material respects
to those maintained by or on behalf of the Company and the Company Subsidiaries
on the date hereof (and having coverage and containing terms and
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conditions which in the aggregate are not less advantageous to the persons
currently covered by such policies as insured) with respect to claims arising
from any actual or alleged wrongful act or omission occurring prior to the
Effective Time for which a claim has not been made against any director or
officer of the Company and/or any director or officer of the Company
Subsidiaries prior to the Effective Time; PROVIDED, HOWEVER, that if the
aggregate annual premiums for such insurance at any time during such period
exceed 150% of the per annum rate of premium currently paid by the Company and
the Company Subsidiaries for such insurance on the date of this Agreement, then
Parent will cause the Surviving Corporation to, and the Surviving Corporation
will, provide the maximum coverage that will then be available at an annual
premium equal to 150% of such rate.
ARTICLE VI.
MERGER CONDITIONS
The respective obligations of each party to effect the Merger shall be
subject to the fulfillment or waiver at or prior to the Effective Time of the
following conditions, PROVIDED that the obligation of each party to effect the
Merger shall not be relieved by the failure of any such conditions if such
failure is the proximate result of any breach by such party of any of its
material obligations under this Agreement:
6.1. OFFER. Merger Sub shall have accepted for payment all Shares
validly tendered in the Offer and not withdrawn; PROVIDED, HOWEVER, that neither
Parent nor Merger Sub may invoke this condition if Parent shall have failed to
purchase Shares so tendered and not withdrawn in violation of the terms of this
Agreement or the Offer.
6.2. STOCKHOLDER APPROVAL. If required, the Company Proposals shall
have been approved at or prior to the Effective Time by the requisite vote of
the stockholders of the Company in accordance with the Delaware Code and the
Company Certificate of Incorporation, which the Company has represented shall be
solely the affirmative vote of a majority of the outstanding Shares.
6.3. NO INJUNCTION OR ACTION. No order, statute, rule, regulation,
executive order, stay, decree, judgment or injunction shall have been enacted,
entered, promulgated or enforced by any court or other Governmental Authority
which temporarily, preliminarily or permanently prohibits or prevents the
consummation of the Merger which has not been vacated, dismissed or withdrawn
prior to the Effective Time.
6.4. OTHER APPROVALS. On or prior to the Closing Date, the waiting
period (and any extension thereof) applicable to the Merger under the HSR Act
shall have been terminated or
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shall have expired and the Consents specified in SECTION 6.4 of the Company
Disclosure Letter, if any, shall have been obtained.
6.5. CONDITIONS OF OBLIGATIONS OF PARENT AND MERGER SUB. The
obligations of Parent and Merger Sub to effect the Merger are subject to the
satisfaction of the condition (which may be waived in whole or in part by
Parent) that the Company shall have performed in all material respects all
material obligations required to be performed by it under this Agreement on or
before the earlier of (i) such time as Parent's or Merger Sub's designees shall
constitute at least a majority of the Company's Board of Directors pursuant to
SECTION 1.3 of this Agreement and (ii) the Closing Date; PROVIDED, HOWEVER, that
no failure by the Company to have so performed any such material obligation
shall constitute a failure of satisfaction of the foregoing condition where the
Company's failure of performance was caused by Parent or occurred, and was
actually known to Parent, at or prior to the time Parent, Merger Sub or any of
their affiliates accepted for payment any Shares pursuant to the Offer.
ARTICLE VII.
TERMINATION AND ABANDONMENT
7.1. TERMINATION. This Agreement may be terminated and the Merger may
be abandoned at any time prior to the Effective Time, whether before or after
approval of the stockholders of the Company and the stockholders of Parent
described herein:
(a) by mutual written consent of Parent and the Company or by the
mutual action of their respective Boards of Directors;
(b) by either Parent or the Company if any Governmental Authority shall
have issued an order, decree or ruling or taken any other action permanently
enjoining, restraining or otherwise prohibiting the consummation of the
transactions contemplated by this Agreement or, for the benefit of Parent only,
the Stockholders Agreement, and such order, decree or ruling or other action
shall have become final and nonappealable;
(c) by Parent if the Company shall have breached in any material
respect any of its representations, warranties, covenants or other agreements
contained in this Agreement which breach or failure to perform is incapable of
being cured or has not been cured within one business day prior to the then
scheduled Expiration Date;
(d) by Parent if (i) the Board of Directors of the Company or any
committee thereof shall have withdrawn or modified
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in a manner adverse to Parent its approval or recommendation of the Offer or any
of the Company Proposals, or failed to reconfirm its recommendation within five
business days after a written request to do so, or approved or recommended any
Takeover Proposal or (ii) the Board of Directors of the Company or any committee
thereof shall have resolved to take any of the foregoing actions;
(e) by the Parent if the Offer shall have expired or been terminated or
withdrawn in accordance with this Agreement without any Shares being purchased
thereunder by Parent or any of the events set forth in ANNEX I hereto shall have
occurred and be continuing at the time of termination;
(f) by the Company or the Parent if the Offer shall not have been
consummated on or before the 120th calendar day after the date hereof, PROVIDED
that the Company's failure to perform any of its obligations under this
Agreement does not result in the failure of the Offer to be so consummated by
such time;
(g) by the Company if Parent shall have breached in any material
respect any of its representations, warranties, covenants or other agreements
contained in this Agreement, which breach or failure to perform is incapable of
being cured or has not been cured within one business day prior to the
Expiration Date;
(h) by the Company in order to enter into a definitive agreement
providing for a Superior Proposal entered into in accordance with SECTION 4.8,
provided that prior thereto the Company has paid the Termination Fee in
accordance with Section 7.2; or
(i) by Parent, if the Company, any of its officers or directors or
financial or legal advisors shall take any of the actions that would be
proscribed by SECTION 4.8 hereof but for the exceptions therein allowing certain
actions to be taken pursuant to the proviso in the second sentence of SECTION
4.8(a) hereof or pursuant to the second sentence of SECTION 4.8(b) hereof.
The party desiring to terminate this Agreement pursuant to the
preceding paragraphs shall give written notice of such termination to the other
party in accordance with SECTION 8.5 hereof.
7.2. EFFECT OF TERMINATION AND ABANDONMENT. (a) In the event of
termination of this Agreement and the abandonment of the Offer or the Merger
pursuant to this ARTICLE VII, this Agreement (other than SECTIONS 7.2, 8.1, 8.3,
8.5, 8.6, 8.7, 8.8, 8.11, 8.12, 8.13, 8.14 and 8.15 hereof) shall become void
and of no effect with no liability on the part of any party hereto (or
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of any of its directors, officers, employees, agents, legal or financial
advisors or other representatives); PROVIDED, HOWEVER, that no such termination
shall relieve any party hereto from any liability for any breach of this
Agreement prior to termination. If this Agreement is terminated as provided
herein, each party shall hold in confidence in accordance with the terms and
conditions of the Confidentiality Agreement all materials obtained from, or
based on or otherwise reflecting or generated in whole or in part from
information obtained from, any other party hereto in connection with the
transactions contemplated by this Agreement, and shall not use any such
materials for the purpose of competing with the businesses of the other parties
hereto, whether obtained before or after the execution hereof.
(b) In the event that (A) a Takeover Proposal shall have been made
known to the Company or has been made directly to its stockholders generally or
any person shall have publicly announced an intention (whether or not
conditional) to make a Takeover Proposal and thereafter this Agreement is
terminated by the Company pursuant to SECTION 7.1(f) hereof or (B) this
Agreement is terminated (x) by the Company pursuant to SECTION 7.1(h) hereof,
(y) by Parent pursuant to SECTION 7.1(d) OR 7.1(i) hereof or (z) Parent pursuant
to SECTION 7.1(c) hereof as a result of an intentional breach by the Company
after a Takeover Proposal has been made, then the Company shall promptly, but in
no event later than two business days after the date of such termination, pay
Parent a fee equal to $35,000,000 (the "TERMINATION FEE"), payable by wire
transfer of same day funds; PROVIDED, HOWEVER, that no Termination Fee shall be
payable to Parent pursuant to a termination by the Company pursuant to SECTION
7.1(f) hereof or by Parent pursuant to SECTION 7.1(i) hereof unless and until
within 18 months of such termination, the Company or any of the Company
Subsidiaries enters into a definitive agreement providing for any Takeover
Proposal. The Company acknowledges that the agreements contained in this SECTION
7.2(b) are an integral part of the transactions contemplated by this Agreement
and that, without these agreements, Parent would not enter into this Agreement.
In the event the Termination Fee becomes payable pursuant to this SECTION
7.2(b), the Company shall promptly pay upon Parent's request, all reasonable
out-of-pocket charges and expenses incurred by Parent in connection with this
Agreement and the transactions contemplated hereby in an amount not to exceed
$5,000,000, which payments shall be in addition to the Termination Fee.
Notwithstanding the foregoing, the fee or expense reimbursement contemplated
hereby shall be paid pursuant to this SECTION 7.2(b) regardless of any alleged
breach by Parent of its obligations hereunder, PROVIDED that no payment by the
Company made pursuant to this SECTION 7.2(b) shall operate or be construed as a
waiver by the Company of any breach of this Agreement by Parent or Merger Sub or
of any rights of the Company in respect thereof.
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ARTICLE VIII.
MISCELLANEOUS
8.1. CONFIDENTIALITY. Each of Parent, Merger Sub and the Company will
hold, and will cause its respective officers, employees, accountants, counsel,
financial advisors and other representatives to hold, any nonpublic information
in accordance with the terms of the Confidentiality Agreement dated September
12, 1997, between Parent and the Company (the "CONFIDENTIALITY AGREEMENT").
Notwithstanding the foregoing, paragraphs 2, 4, 5, 6 and 11 of the
Confidentiality Agreement are hereby terminated as of the date hereof, PROVIDED,
HOWEVER, that if this Agreement shall be terminated prior to the Effective Time,
paragraphs 5 and 6 shall be reinstated as of the date of such termination. As of
the Effective Time, all of Parent's restrictions and obligations under the
Confidentiality Agreement shall terminate.
8.2. AMENDMENT AND MODIFICATION. This Agreement may be amended,
modified or supplemented only by a written agreement among the Company, Parent
and Merger Sub.
8.3. WAIVER OF COMPLIANCE; CONSENTS. Any failure of the Company on the
one hand, or Parent and Merger Sub on the other hand, to comply with any
obligation, covenant, agreement or condition herein may be waived by Parent on
the one hand, or the Company on the other hand, 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 requirements for a waiver of compliance as set forth in this
SECTION 8.3.
8.4. SURVIVAL. The respective representations, warranties, covenants
and agreements of the Company and Parent contained herein or in any certificates
or other documents delivered prior to or at the Closing shall survive the
execution and delivery of this Agreement, notwithstanding any investigation made
or information obtained by the other party, but shall terminate at the Effective
Time, except for those contained in SECTIONS 1.7, 1.8, 1.9, 1.14, 5.4, 5.5 and
8.1 hereof, which shall survive beyond the Effective Time.
8.5. NOTICES. All notices and other communications hereunder shall be
in writing and shall be deemed to have been duly given when delivered in person,
by facsimile, receipt confirmed, or on the next business day when sent by
overnight courier or on the second succeeding business day when sent by
registered or certified mail (postage prepaid, return receipt
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requested) to the respective parties at the following addresses (or at such
other address for a party as shall be specified by like notice):
(i) if to the Company, to:
BDM International, Inc.
1501 BDM Way
McLean, Virginia 22102
Attention: John F. McCabe
Telecopy: 703-848-6457
with a copy to:
Willkie Farr & Gallagher
One Citicorp Center
153 East 53rd Street
New York, NY 10022
Attention: William J. Grant, Jr., Esq.
Telecopy: 212-821-8111
and
(ii) if to Parent or Merger Sub, to:
TRW Inc.
1900 Richmond Road
Cleveland, Ohio 44124
Attention: Secretary
Telecopy: (216) 291-7563
with copies to:
TRW Inc.
1900 Richmond Road
Cleveland, Ohio 44124
Attention: Treasurer
Telecopy: (216) 291-7831
and
Jones, Day, Reavis & Pogue
599 Lexington Avenue
New York, New York 10022
Attention: Robert A. Profusek, Esq.
Telecopy: (212) 755-7306
8.6. BINDING EFFECT; 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. Neither this
Agreement nor any of the rights, interests or obligations hereunder shall be
assigned or delegated by any of the parties hereto prior to the Effective
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Time without the prior written consent of the other party hereto except that
Parent and Merger Sub may assign or delegate all or any of their respective
rights and obligations hereunder to a direct or indirect wholly-owned subsidiary
or subsidiaries of Parent, PROVIDED, HOWEVER, that no such assignment or
delegation shall relieve the assigning or delegating party of its duties
hereunder.
8.7. EXPENSES. All costs and expenses incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid by the party
incurring such costs or expenses, subject to the rights of Parent under SECTION
7.2(b) hereof.
8.8. GOVERNING LAW. This Agreement shall be deemed to be made in, and
in all respects shall be interpreted, construed and governed by and in
accordance with the internal laws of, the State of Delaware.
8.9. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
8.10. INTERPRETATION. The article and section headings contained in
this Agreement are solely for the purpose of reference, are not part of the
agreement of the parties and shall not in any way affect the meaning or
interpretation of this Agreement. As used in this Agreement, (i) the term
"PERSON" shall mean and include an individual, a partnership, a joint venture, a
corporation, a limited liability company, a trust, an association, an
unincorporated organization, a Governmental Authority and any other entity, (ii)
unless otherwise specified herein, the term "AFFILIATE," with respect to any
person, shall mean and include any person controlling, controlled by or under
common control with such person and (iii) the term "SUBSIDIARY" of any specified
person shall mean any corporation 50 percent or more of the outstanding voting
power of which, or any partnership, joint venture, limited liability company or
other entity 50 percent or more of the total equity interest of which, is
directly or indirectly owned by such specified person.
8.11. ENTIRE AGREEMENT. This Agreement and the documents or instruments
referred to herein including, but not limited to, the Annex(es) attached hereto
and the Disclosure Letters referred to herein, which Annex(es) and Disclosure
Letters are incorporated herein by reference, the Confidentiality Agreement and
the Stockholders Agreement embody the entire agreement and understanding of the
parties hereto in respect of the subject matter contained herein. There are no
restrictions, promises, representations, warranties, covenants, or undertakings,
other than those expressly set forth or referred to
44
<PAGE> 49
herein. This Agreement supersedes all prior agreements and the understandings
between the parties with respect to such subject matter.
8.12. SEVERABILITY. In case any provision in this Agreement shall be
held invalid, illegal or unenforceable in a jurisdiction, such provision shall
be modified or deleted, as to the jurisdiction involved, only to the extent
necessary to render the same valid, legal and enforceable, and the validity,
legality and enforceability of the remaining provisions hereof shall not in any
way be affected or impaired thereby nor shall the validity, legality or
enforceability of such provision be affected thereby in any other jurisdiction.
8.13. SPECIFIC PERFORMANCE. The parties hereto agree that irreparable
damage would occur in the event that any of the provisions of this Agreement
were not performed in accordance with their specific terms or were otherwise
breached. Accordingly, the parties further agree that each party shall be
entitled to an injunction or restraining order to prevent breaches of this
Agreement and to enforce specifically the terms and provisions hereof in any
court of the United States or any state having jurisdiction, this being in
addition to any other right or remedy to which such party may be entitled under
this Agreement, at law or in equity.
8.14. THIRD PARTIES. Nothing contained in this Agreement or in any
instrument or document executed by any party in connection with the transactions
contemplated hereby shall create any rights in, or be deemed to have been
executed for the benefit of, any person that is not a party hereto or thereto or
a successor or permitted assign of such a party; PROVIDED HOWEVER, that the
parties hereto specifically acknowledge that the provisions of SECTIONS 1.9, 5.4
and 5.5 hereof are intended to be for the benefit of, and shall be enforceable
by, the current or former employees, officers and directors of the Company
and/or the Company Subsidiaries affected thereby and their heirs and
representatives and the provisions of SECTION 1.8(b) are intended to be for the
benefit of, and shall be enforceable by, stockholders of the Company affected
thereby and their heirs and representatives.
8.15. DISCLOSURE LETTERS. The Company and Parent acknowledge that the
Company Disclosure Letter and the Parent Disclosure Letter (i) relate to certain
matters concerning the disclosures required and transactions contemplated by
this Agreement, (ii) are qualified in their entirety by reference to specific
provisions of this Agreement, (iii) are not intended to constitute and shall not
be construed as indicating that such matter is required to be disclosed, nor
shall such disclosure be construed as an admission that such information is
material with respect to the Company or Parent, as the case may be, except to
the extent required by this Agreement, and (iv) disclosure of the
45
<PAGE> 50
information contained in one Section of the Company Disclosure Letter or Parent
Disclosure Letter shall be deemed proper disclosure for the Section to which
specific reference is made.
46
<PAGE> 51
IN WITNESS WHEREOF, Parent, Merger Sub and the Company have caused this
Agreement to be signed and delivered by their respective duly authorized
officers as of the date first above written.
TRW INC.
By: /s/ William B. Lawrence
----------------------------------------
Name: William B. Lawrence
Title:
SYSTEMS ACQUISITION INC.
By: /s/ Kathleen A. Weigand
-----------------------------------------
Name: Kathleen A. Weigand
Title:
BDM INTERNATIONAL, INC.
By: /s/ Phillip A. Odeen
-----------------------------------------
Name: Phillip A. Odeen
Title: President and Chief
Executive Officer
47
<PAGE> 52
ANNEX I
CONDITIONS TO THE OFFER. Notwithstanding any other provision of the
Offer, Merger Sub shall not be required to accept .for payment or, subject to
any applicable rules and regulations of the SEC, including Rule 14e-1(c)
promulgated under the Securities Exchange Act (relating to Merger Sub's
obligation to pay for or return tendered Shares promptly after termination or
withdrawal of the Offer), pay for, and (subject to any such rules or
regulations) may delay the acceptance for payment of any tendered Shares and
(except as provided in this Agreement) amend or terminate the Offer (whether or
not any Shares have been theretofore purchased or paid for pursuant to the
Offer) (A) unless the following conditions shall have been satisfied: (i) there
shall be validly tendered and not withdrawn prior to the expiration of the Offer
a number of Shares which represents a majority of the total voting power of the
outstanding securities of the Company entitled to vote in the election of
directors or in a merger ("VOTING SECURITIES") on a fully-diluted basis (the
"MINIMUM CONDITION") ("on a fully-diluted basis" having the following meaning as
of any date: the number of Voting Securities outstanding, together with Voting
Securities issuable pursuant to obligations outstanding at that date under
employee stock option or other benefit plans or otherwise) and (ii) any
applicable waiting period under the HSR Act shall have expired or been
terminated prior to the expiration of the Offer and the required approval of the
German anticompetition authorities shall have been obtained or (B) if at any
time after the date of this Agreement and before the time of payment for any
such Shares (whether or not any Shares have theretofore been accepted for
payment or paid for pursuant to the Offer,) any of the following events shall
occur and be continuing:
(a) there shall be in effect an injunction or other order, decree,
judgment or ruling by a Governmental Authority of competent jurisdiction or a
Law shall have been promulgated, enacted, taken or threatened by a Governmental
Authority of competent jurisdiction which in any such case (i) restrains or
prohibits the making or consummation of the Offer, the consummation of the
Merger or the transactions contemplated by the Stockholders Agreement, (ii)
prohibits or restricts the ownership or operation by Parent (or any of its
affiliates or subsidiaries) of any portion of its or the Company's business or
assets which is material to the business of all such entities taken as a whole,
or compels Parent (or any of its affiliates or subsidiaries) to dispose of or
hold separate any portion of its or the Company's business or assets which is
material to the business of all such entities taken as a whole, (iii) imposes
material limitations on the ability of Merger Sub effectively to acquire or to
hold or to exercise full rights of ownership of the Shares, including, without
limitation, the right to vote the Shares purchased by Merger Sub on all matters
properly presented to the stockholders of the Company, or (iv) imposes any
material
A-1
<PAGE> 53
limitations on the ability of Parent or any of its affiliates or subsidiaries
effectively to control in any material respect the business and operations of
the Company;
(b) any Governmental Authority shall have instituted any action, suit
or proceeding seeking any relief or remedy referred to in paragraph (a) or
material damages as a result of any of this Agreement, the Stockholders
Agreement or any transactions contemplated thereby;
(c) this Agreement shall have been terminated by the Company or Parent
in accordance with its terms or any event shall have occurred which gives Parent
or Merger Sub the right to terminate the Agreement or not to consummate the
Merger;
(d) there shall have occurred any event that, individually or when
considered together with any other matter, has had or is reasonably likely in
the future to have a Company Material Adverse Effect;
(e) there shall have occurred (i) any general suspension of, or
limitation on prices (other than suspensions or limitations triggered on the New
York Stock Exchange by price fluctuations on a trading day) for, trading in
securities on any national securities exchange or the over-the-counter market,
(ii) a declaration of a banking moratorium or any suspension of payments in
respect of banks in the United States, (iii) any material limitation (whether or
not mandatory) by any government or governmental, administrative or regulatory
authority or agency, domestic or foreign, on, the extension of credit by banks
or other lending institutions, (iv) a commencement of a war or armed hostilities
or other national calamity directly involving the United States and Parent shall
have determined that there is a reasonable likelihood that such event may be of
material adverse significance to it or the Company, (v) any decline of at least
20% in the Dow Jones Average of Industrial Stocks or 20% in the Standard &
Poor's 500 Index from the levels thereof as of the last trading day immediately
preceding the dated of this Agreement or (vi) in the case of any of the
foregoing existing at the time of the execution of this Agreement, a material
acceleration or worsening thereof;
(f) it shall have been publicly disclosed or Purchaser shall have
otherwise learned that beneficial ownership (determined for the purposes of this
paragraph as set forth in Rule 13d-3 promulgated under the Securities Exchange
Act) of more than 25% of the outstanding Shares has been acquired by any person
(including the Company, any of the Company Subsidiaries or affiliates thereof)
or group (as defined in Section 13(d)(3) of the Securities Exchange Act), other
than Purchaser or any of its affiliates;
(g) the Company or any of its officers, directors or financial or legal
advisors shall have, directly or indirectly,
A-2
<PAGE> 54
(i) solicited, initiated, encouraged (including by way of furnishing
information) or taken any other action designed or reasonably likely to
facilitate, any inquiries or the making of any proposal which constituted, or
may reasonably be expected to lead to, any Takeover Proposal or (ii)
participated in any discussions or negotiations regarding any Takeover Proposal
regardless of whether or not any of the foregoing actions is permitted by this
Agreement;
(h) any of the representations and warranties of the Company set forth
in this Agreement that are qualified by reference to materiality or a Company
Material Adverse Effect shall not be true and correct, or any such
representations and warranties that are not so qualified shall not be true and
correct in any respect that is reasonably likely to have a Company Material
Adverse Effect, in each case as if such representations and warranties were made
at the time of such determination;
(i) the Company shall have failed to perform in any material respect
any material obligation or to comply in any material respect with any material
agreement or covenant of the Company to be performed or complied with by it
under this Agreement; or
(j) Parent and the Company shall have agreed that Parent shall amend
the Offer to terminate the Offer or postpone the payment for Shares pursuant
thereto;
which, in the judgment of Parent with respect to each and every matter referred
to above and regardless of the circumstances giving rise to any such condition,
makes it inadvisable to proceed with the Offer or with such acceptance for
payment of or payment for Shares or to proceed with the Merger.
The foregoing conditions are for the sole benefit of Parent and may be
asserted by Parent regardless of the circumstances giving rise to any such
condition (except for any action or inaction by Parent or any of its affiliates
constituting a breach of this Agreement) or (other than the Minimum Condition)
may be waived by Parent in whole or in part at any time and from time to time in
its sole discretion (subject to the terms of this Agreement). The failure by
Parent at any time to exercise any of the foregoing rights shall not be deemed a
waiver of any such right, the waiver of any such right with respect to
particular facts and other circumstances shall not be deemed a waiver with
respect to any other facts and circumstances, and each such right shall be
deemed an ongoing right that may be asserted at any time and from time to time.
A-3
<PAGE> 55
GLOSSARY OF DEFINED TERMS
-------------------------
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Acquisition Agreement..............34 Key Employees......................18
Affiliate..........................44 Law ...............................16
Agreement...........................1 Litigation.........................18
Benefit Plan.......................19 Merger..............................1
Certificate of Merger...............7 Merger Consideration................7
Closing.............................7 Merger Sub..........................1
Closing Date........................7 Minimum Condition...................1
Company.............................1 Multiemployer Plan.................19
Company Benefit Plan...............19 NASD...............................15
Company Class B Stock..............13 Offer...............................1
Company Disclosure Letter..........12 Offer Conditions....................2
Company Filed Documents............16 Offer Documents.....................3
Company Financial Offer to Purchase...................3
Statements .....................17 Parent..............................1
Company Material Adverse Parent Disclosure Letter...........25
Effect .........................13 Parent Group.......................36
Company Material Contract..........19 Parent Information.................27
Company Option Plans...............10 Per Share Amount....................1
Company Options....................10 Person.............................44
Company Permits....................18 Proxy Statement....................11
Company Proposals..................32 Related Party......................25
Company Securities Schedule 14D-1......................3
Filings .........................16 Schedule 14D-9......................4
Company Stock.......................1 SEC ................................3
Company Subsidiary.................13 Securities Act.....................19
Confidentiality Agreement..........41 Securities Exchange Act.............2
Consent............................15 Shares..............................1
Delaware Code.......................6 Stockholders........................1
Dissenting Shares...................8 Stockholders Agreement..............1
Effective Time......................7 Subsidiary.........................44
Environmental Claim................23 Superior Proposal..................34
Environmental Laws.................24 Surviving Corporation...............6
Environmental Permit...............24 Surviving Corporation
ERISA..............................19 Common Stock .....................8
Exchange Agent......................8 Takeover Proposal..................33
Expiration Date.....................3 Takeover Statute...................35
Financial Advisor...................4 Tax ...............................21
Governmental Authority.............15 Tax Return.........................22
Hazardous Materials................24 Termination Fee....................41
HSR Act............................15 Voting Securities...................1
Independent Directors...............6
</TABLE>
iv
<PAGE> 1
Exhibit (c)(2)
CONFORMED VERSION
STOCKHOLDERS AGREEMENT
This Stockholders Agreement, dated as of November 20, 1997 (this
"AGREEMENT"), is made and entered into among TRW Inc., an Ohio corporation
("PARENT"), Systems Acquisition Inc., a Delaware corporation and a wholly owned
subsidiary of Parent ("MERGER SUB"), and each other party listed on the
signature pages hereof (each, a "STOCKHOLDER").
WHEREAS, as of the date hereof, each Stockholder owns (beneficially and
of record) the number of shares of common stock, par value $.01 per share, of
BDM International, Inc., a Delaware corporation (the "COMPANY"), set forth
opposite such Stockholder's name on EXHIBIT A hereto (all such shares so owned
and which may hereafter be acquired by the Stockholders prior to the termination
of this Agreement, whether upon the exercise of Company Options or by means of
purchase, dividend, distribution or otherwise, being referred to herein as the
"SHARES");
WHEREAS, immediately prior to the execution and delivery of this
Agreement, Parent, Merger Sub and the Company have entered into an Agreement and
Plan of Merger, dated as of the date hereof (the "MERGER AGREEMENT"), which
provides, upon the terms and subject to the conditions set forth therein, for
the merger of Merger Sub with and into the Company (the "MERGER"); and
WHEREAS, as a condition to the willingness of Parent and Merger Sub to
enter into the Merger Agreement, Parent and Merger Sub have required that the
Stockholders agree, and in order to induce Parent and Merger Sub to enter into
the Merger Agreement, each Stockholder has agreed, severally and not jointly, to
enter into this Agreement.
NOW, THEREFORE, in consideration of the premises and the
representations, warranties, covenants and agreements hereinafter set forth, the
parties hereto hereby agree as follows:
ARTICLE I.
TRANSFER AND VOTING OF SHARES
1.1. VOTING OF SHARES. Each Stockholder hereby agrees that from the
date hereof until the termination of this Agreement pursuant to Section 6.2
hereof ("the Term"), at any meeting of the stockholders of the Company, however
called, and in any action by consent of the stockholders of the Company, such
Stockholder shall vote its Shares (i) in favor of the Merger and the Merger
Agreement (as amended from time to time), (ii) against any Takeover Proposal and
against any proposal for action or
<PAGE> 2
agreement that would result in a breach of any covenant, representation or
warranty or any other obligation or agreement of the Company under the Merger
Agreement or which is reasonably likely to result in any of the conditions of
the Company's obligations under the Merger Agreement not being fulfilled, any
change in the directors of the Company, any change in the present capitalization
of the Company or any amendment to the Company's certificate of incorporation or
bylaws, any other material change in the Company's corporate structure or
business, or any other action which in the case of each of the matters referred
to in this clause (ii) could reasonably be expected to impede, interfere with,
delay, postpone or materially adversely affect the transactions contemplated by
the Merger Agreement or the likelihood of such transactions being consummated
and (iii) in favor of any other matter necessary for consummation of the
transactions contemplated by the Merger Agreement which is considered at any
such meeting of shareholders or in such consent, and in connection therewith to
execute any documents which are necessary or appropriate in order to effectuate
the foregoing, including the ability for Merger Sub or its nominees to vote the
Shares directly.
1.2. DISPOSITION OR ENCUMBRANCE OF SHARES. Each Stockholder hereby
agrees that, during the Term, it shall not, and shall not offer or agree to,
sell, transfer, tender, assign, pledge, hypothecate or otherwise dispose of, or
create or permit to exist any Encumbrance (as hereinafter defined) on any of
such Stockholder's Shares.
1.3. PROXY. Each Stockholder hereby revokes any and all prior proxies
or powers of attorney in respect of any Shares and constitutes and appoints
Merger Sub and Parent, or any nominee of Merger Sub and Parent, with full power
of substitution and resubstitution, at any time during the Term, as its true and
lawful attorney and proxy (its "PROXY"), for and in its name, place and stead,
to demand that the Secretary of the Company call a special meeting of the
stockholders of the Company for the purpose of considering any matter referred
to in Section 1.1 and to vote each of such Shares as its Proxy, at every annual,
special, adjourned or postponed meeting of the stockholders of the Company,
including the right to sign its name (as stockholder) to any consent,
certificate or other document relating to the Company that the law of the State
of Delaware may permit or require as provided in Section 1.1.
THE FOREGOING PROXY AND POWER OF ATTORNEY ARE IRREVOCABLE AND COUPLED WITH AN
INTEREST THROUGHOUT THE TERM.
1.4. NO SOLICITATION. Each Stockholder covenants and agrees that,
during the Term, it shall not, directly or indirectly through any officer,
director, agent or other representative, solicit, initiate or encourage, or take
any other action designed or reasonably likely to facilitate, any inquiries
2
<PAGE> 3
or the making of any proposal from any person (other than Parent, Merger Sub and
any of their affiliates) relating to (i) any acquisition of all or any of the
such Stockholder's Shares or (ii) any transaction that constitutes a Takeover
Proposal, or participate in any negotiations regarding, or furnish to any person
any information with respect to, or otherwise cooperate in any way with, or
assist or participate in or facilitate or encourage, any effort or attempt by
any person to do or seek any of the foregoing. Each Stockholder immediately
shall cease and cause to be terminated all existing discussions or negotiations
of such Stockholder and its officers, directors, agents or other representatives
with any person conducted heretofore with respect to any of the foregoing. Each
Stockholder shall notify Parent and Merger Sub promptly if any such proposal or
offer, or any inquiry or contact with any person with respect thereto, is made
and shall, in any such notice to Parent and Merger Sub, indicate in reasonable
detail the identity of the person making such proposal, offer, inquiry or
contact and the terms and conditions of such proposal, offer, inquiry or
contact. Notwithstanding any provision of this Section 1.4 to the contrary, if
any Stockholder or any officer, director, agent or representative of such
Stockholder is a member of the Board of Directors of the Company, such member of
the Board of Directors of the Company may take actions in such capacity to the
extent permitted by Section 4.8 of the Merger Agreement.
ARTICLE II.
TENDER OF SHARES
2.1. TENDER. Each Stockholder hereby agrees to validly tender (or cause
the record owner of such shares to validly tender), and not to withdraw,
pursuant to and in accordance with the terms of the Offer, not later than the
fifth business day after commencement of the Offer pursuant to Section 1.1 of
the Merger Agreement and Rule 14d-2 under the Securities Exchange Act, its
Shares. Each Stockholder hereby acknowledges and agrees that Parent's and Merger
Sub's obligation to accept for payment and pay for the Shares in the Offer,
including the Shares owned by such Stockholder, is subject to the terms and
conditions of the Offer. For all its Shares validly tendered in the Offer and
not withdrawn, each Stockholder will be entitled to receive the highest price
paid by Parent pursuant to the Offer.
2.2. CERTAIN WARRANTIES. Without limiting the generality or effect of
any other term or condition of the Offer, the transfer by each Stockholder of
the Shares to Merger Sub in the Offer shall pass to and unconditionally vest in
Merger Sub good and valid title to the Shares, free and clear of all liens,
claims, restrictions, security interests, pledges, limitations and encumbrances
whatsoever.
3
<PAGE> 4
2.3. DISCLOSURE. Each Stockholder hereby authorizes Parent and Merger
Sub to publish and disclose in the Offer Documents and, if approval of the
Company's stockholders is required under applicable law, the Proxy Statement
(including all documents and schedules filed with the SEC), its identity and
ownership of the Company Common Stock and the nature of its commitments,
arrangements and understandings under this Agreement.
ARTICLE III.
OPTION
3.1. OPTION SHARES. In order to induce Parent and Merger Sub to enter
into the Merger Agreement, each Stockholder hereby grants to Merger Sub an
irrevocable option (the "Stock Option") to purchase the number of Shares set
forth opposite each Stockholder's name on Exhibit A hereto (the "Option Shares")
at a purchase price per share equal to $29.50. If (a) the Company shall become
obligated, pursuant to Section 7.2(b) of the Merger Agreement by reason of
termination of the Merger Agreement pursuant to any of Section 7.1(c), 7.1(d) or
7.1(h), to pay the Termination Fee, (b) the Offer is consummated but (due to
failure by any Stockholder to validly tender and not withdraw) Merger Sub has
not accepted for payment or paid for the aggregate number of Shares set forth
opposite such Stockholder's name on EXHIBIT A hereto (in which case the price
per share for the Option Shares will be equal to the highest price paid in the
Offer) or (c) the Merger Agreement is terminated in accordance with its terms
for reasons other than the failure of Parent or Merger Sub to fulfill any
obligation under the Merger Agreement, the Stock Option (i) shall become
exercisable, in whole but not in part, on the date on which the first event
referred to in this sentence shall occur or, if later, the date on which (x) all
waiting periods under the HSR Act or similar German Law required for the
purchase of the Option Shares upon such exercise shall have expired or been
waived and (y) there shall not be in effect any preliminary or final injunction
or other order issued by any court or governmental, administrative or regulatory
agency or authority prohibiting the exercise of the Stock Option pursuant to
this Agreement, and (ii) shall remain exercisable until the date which is 30
days following the first such date on which the Stock Option becomes exercisable
pursuant to clause (i) of this sentence. In the event that Parent wishes to
exercise the Stock Option, Parent, prior to the expiration thereof, shall send a
written notice (the "Notice") to each Stockholder identifying the place for the
closing of such purchase at least three business days prior to such closing.
ARTICLE IV.
4
<PAGE> 5
REPRESENTATIONS, WARRANTIES AND COVENANTS OF
THE STOCKHOLDERS
Each Stockholder, severally and not jointly, hereby represents and
warrants to Parent and Merger Sub as follows:
4.1. DUE ORGANIZATION, AUTHORIZATION, ETC. Such Stockholder (if it is a
corporation, partnership or other legal entity) is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization. Such Stockholder has all requisite power and authority to execute,
deliver and perform this Agreement, to appoint Merger Sub and Parent as its
Proxy and to consummate the transactions contemplated hereby. The execution,
delivery and performance of this Agreement, the appointment of Merger Sub as
such Stockholders' Proxy and the consummation of the transactions contemplated
hereby have been duly authorized by all necessary action on the part of such
Stockholder. This Agreement has been duly executed and delivered by or on behalf
of such Stockholder and, assuming its due authorization, execution and delivery
by Parent and Merger Sub, constitutes a legal, valid and binding obligation of
such Stockholder, enforceable against such Stockholder in accordance with its
terms. There is no beneficiary or holder of a voting trust certificate or other
interest of any trust of which a Stockholder is trustee whose consent is
required for the execution and delivery of this Agreement of the consummation by
such Stockholder of the transactions contemplated hereby.
4.2. NO CONFLICTS; REQUIRED FILINGS AND CONSENTS. (a) The execution and
delivery of this Agreement by such Stockholder do not, and the performance of
this Agreement by such Stockholder will not, (i) conflict with or violate the
trust agreement, Certificate of Incorporation or Bylaws or other similar
organizational documents of such Stockholder (in the case of a Stockholder that
is a trust, corporation, partnership or other legal entity), (ii) conflict with
or violate any Law applicable to such Stockholder or by which such Stockholder
or any of such Stockholder's properties is bound or affected or (iii) result in
any breach of or constitute a default (or an event that with notice or lapse of
time or both would become a default) under, or give to others any rights of
termination, acceleration or cancellation of, or result in the creation of a
lien or encumbrance on any assets of such Stockholder or (if such Stockholder is
a corporation, partnership or other legal entity) any of its subsidiaries,
including, without limitation, the Shares, pursuant to, any note, bond,
mortgage, indenture, contract, agreement, lease, license, permit, franchise or
other instrument or obligation to which such Stockholder is a party or by which
such Stockholder or any of such Stockholder's assets is bound or affected,
except, in the case of clauses (ii) and (iii), for any such breaches, defaults
or other occurrences that would
5
<PAGE> 6
not prevent or delay the performance by such Stockholder of such Stockholder's
obligations under this Agreement.
(b) The execution and delivery of this Agreement by such Stockholder do
not, and the performance of this Agreement by such Stockholder will not, require
any consent, approval, authorization or permit of, or filing with or
notification to, any governmental or regulatory authority (other than the
necessary filing under the HSR Act or the Securities Exchange Act), domestic or
foreign, except where the failure to obtain such consents, approvals,
authorizations or permits, or to make such filings or notifications, would not
prevent or delay the performance by the Stockholder of such Stockholder's
obligations under this Agreement.
4.3. TITLE TO SHARES. Such Stockholder is the sole record and
beneficial owner of the Shares set forth opposite such Stockholder's name on
EXHIBIT A hereto, free and clear of any pledge, lien, security interest,
mortgage, charge, claim, equity, option, proxy, voting restriction, voting trust
or agreement, understanding, arrangement, right of first refusal, limitation on
disposition, adverse claim of ownership or use or encumbrance of any kind
("ENCUMBRANCES"), other than restrictions imposed by the securities laws or
pursuant to this Agreement and the Merger Agreement.
4.4. NO INCONSISTENT ARRANGEMENTS. Each Stockholder hereby covenants
and agrees that, except as contemplated by this Agreement and the Merger
Agreement, it shall not (i) transfer (which term shall include, without
limitation, any sale, gift, pledge or other disposition), or consent to any
transfer of, any or all of such Stockholder's Shares, Company Options or any
interest therein, (ii) enter into any contract, option or other agreement or
understanding with respect to any transfer of any or all of such shares, Company
Options or any interest therein, (iii) grant any proxy, power-of-attorney or
other authorization in or with respect to such Shares or Company Options, (iv)
deposit such Shares or Company Options into a voting trust or enter into a
voting agreement or arrangement with respect to such Shares or Company Options,
or (v) take any other action that would in any way restrict, limit or interfere
with the performance of its obligations hereunder or the transactions
contemplated hereby or by the Merger Agreement.
4.5. NO FINDER'S FEES. Other than may be payable pursuant to the
engagement letter between the Company and Wasserstein Perella & Co., Inc.
referenced in Section 2.19 of the Merger Agreement, no broker, investment
banker, financial adviser or other person is entitled to any broker's, finder's,
financial advisor's or other similar fee or commission in connection with the
transactions contemplated hereby based upon arrangements made by or on behalf of
a Stockholder.
6
<PAGE> 7
4.6. AFFILIATE AGREEMENTS. As of the Effective Time, each Stockholder,
on behalf of itself and its affiliates, hereby terminates any and all
contractual rights in favor of such Stockholder and its affiliates then in
effect between such Stockholder or affiliates, on the one hand, and the Company,
on the other hand, including without limitation, any monitoring and advisory
fees to The Carlyle Group, L.P., and each Stockholder, on behalf of itself and
its affiliates, hereby acknowledges that it is not entitled to receive any
broker's, finder's, financial advisor's or other similar fee or commission in
connection with the transactions contemplated hereby or by the Merger Agreement.
ARTICLE V.
REPRESENTATIONS AND WARRANTIES OF
MERGER SUB AND PURCHASER
Parent and Merger Sub hereby, jointly and severally, represent and
warrant to each Stockholder as follows:
5.1. DUE ORGANIZATION, AUTHORIZATION, ETC. Merger Sub and Parent are
corporations duly organized, validly existing and in good standing under the
laws of the States of Delaware and Ohio, respectively. Merger Sub and Parent
have all requisite corporate power and authority to execute and deliver this
Agreement and to consummate the transactions contemplated hereby. The execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby by each of Merger Sub and Parent have been duly authorized
by all necessary corporate action on the part of Merger Sub and Parent,
respectively. This Agreement has been duly executed and delivered by each of
Merger Sub and Parent and, assuming its due authorization, execution and
delivery by each Stockholder, constitutes a legal, valid and binding obligation
of each of Merger Sub and Parent, enforceable against Merger Sub and Parent in
accordance with its terms, subject to the Enforceability Exceptions.
5.2. INVESTMENT REPRESENTATIONS. (a) Merger Sub is acquiring the Stock
Option and the Option Shares (collectively, the "SECURITIES") for its own
account for investment only, and not with a view to, or for sale in connection
with, any distribution of the Securities in violation of the Securities Act.
(b) Merger Sub has had such opportunity as it deems adequate to obtain
from representatives of the Company such information as is necessary to permit
Merger Sub to evaluate the merits and risks of its investment in the Company.
(c) Merger Sub, directly or through its affiliates, has sufficient
experience in business, financial and investment matters to be able to evaluate
the risks involved in the purchase
7
<PAGE> 8
of the Securities and to make an informed investment decision with respect to
such purchase.
(d) Merger Sub acknowledges that (A) the Securities have not been
registered under the Securities Act and are "restricted securities" within the
meaning of Rule 144 under the Securities Act and (B) the Securities cannot be
sold, transferred or otherwise disposed of unless they are subsequently
registered under the Securities Act or an exemption from registration is then
available.
ARTICLE VI.
MISCELLANEOUS
6.1. DEFINITIONS. Terms used but not otherwise defined in this
Agreement, including those defined in Section 8.10 of the Merger Agreement, have
the meanings assigned to such terms in the Merger Agreement.
6.2. TERMINATION. This Agreement shall terminate and be of no further
force and effect (i) by the written mutual consent of the parties hereto, (ii)
by Parent or any Stockholder (with respect to such Stockholder) if the Offer or
the Merger shall not have been consummated on or before 120 calendar days after
the date hereof, or (iii) automatically and without any required action of the
parties hereto upon the earlier to occur of (A) the Effective Time and (B)
immediately after the termination of the Merger Agreement in accordance with its
terms; PROVIDED, HOWEVER, that in the event that the Stock Option shall become
exercisable pursuant to Section 3.1 hereof, Articles III, IV, V and VI of this
Agreement shall survive the termination of this Agreement until the earlier to
occur of the closing of the exercise of the Stock Option and the expiration of
the Stock Option. No such termination of this Agreement shall relieve any party
hereto from any liability for any breach of this Agreement prior to termination.
6.3. EXPENSES. All costs and expenses incurred in connection with the
transactions contemplated by this Agreement shall be paid by the party incurring
such costs and expenses.
6.4. NOTICES. All notices and other communications hereunder shall be
in writing and shall be deemed to have been duly given when delivered in person,
by facsimile, receipt confirmed, or on the next business day when sent by
overnight courier or on the second succeeding business day when sent by
registered or certified mail (postage prepaid, return receipt requested) to the
respective parties at the following addresses (or at such other address for a
party as shall be specified by like notice):
8
<PAGE> 9
(a) if to Parent or Merger Sub, to:
TRW Inc.
1900 Richmond Road
Cleveland, Ohio 44124
Attention: Secretary
Telecopy:
with copies to:
TRW Inc.
1900 Richmond Road
Cleveland, Ohio 44124
Attention: Treasurer
Telecopy:
and
Jones, Day, Reavis & Pogue
599 Lexington Avenue
New York, New York 10022
Attention: Robert A. Profusek, Esq.
Telecopy: (212) 755-7306
(b) If to a Stockholder, to:
The Carlyle Group, L.P.
1001 Pennsylvania Avenue, N.W.
Suite 220 South
Washington, D.C. 20004
Attention: William E. Conway, Jr.
Telecopy: 202-347-9250
6.5. SEVERABILITY. In case any provision in this Agreement shall be
held invalid, illegal or unenforceable in a jurisdiction, such provision shall
be modified or deleted, as to the jurisdiction involved, only to the extent
necessary to render the same valid, legal and enforceable, and the validity,
legality and enforceability of the remaining provisions hereof shall not in any
way be affected or impaired thereby nor shall the validity, legality or
enforceability of such provision be affected thereby in any other jurisdiction.
6.6. ENTIRE AGREEMENT; ASSIGNMENT. This Agreement and the Merger
Agreement, as amended from time to time, constitutes the entire agreement among
the parties with respect to the subject matter hereof and supersedes all prior
agreements and understandings, both written and oral, among the parties, or any
of them, with respect thereto. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned or delegated by any of the
parties hereto (whether by operation of law or otherwise), provided, however,
that Parent or Merger Sub may, in its sole discretion, assign or delegate its
9
<PAGE> 10
rights and obligations hereunder to any direct or indirect wholly-owned
subsidiary of Parent.
6.7. PARTIES IN INTEREST. This Agreement shall be binding upon and
shall inure solely to the benefit of, and be enforceable by, the parties hereto
and their respective successors and permitted assigns, and nothing in this
Agreement, express or implied, is intended to or shall confer upon any person,
other than the parties hereto or their respective successors and permitted
assigns, any rights, remedies, obligations or liabilities of any nature
whatsoever under or by reason of this Agreement, PROVIDED, HOWEVER, that the
parties hereto specifically acknowledge that the provisions of Section 4.6
hereof are intended to be for the benefit of, and shall be enforceable by, the
Company.
6.8. WAIVER OF APPRAISAL RIGHTS. Each Stockholder hereby waives any
rights of appraisal or rights to dissent from the Merger.
6.9. FURTHER ASSURANCE. From time to time, at the other party's request
and without consideration, each party hereto shall execute and deliver such
additional documents and take all such further action as may be necessary or
desirable to consummate and make effective, in the most expeditious manner
practicable, the transaction contemplated by this Agreement.
6.10. STOP TRANSFER. Each Stockholder agrees with, and covenants to,
Parent and Merger Sub that such Stockholder shall not request that the Company
register the transfer (book-entry or otherwise) of any certificate or
uncertificated interest representing any of such Stockholder's Shares, unless
such transfer is made in compliance with this Agreement (including the
provisions of Article III hereof).
6.11. CERTAIN EVENTS. Each Stockholder agrees that this Agreement and
the obligations hereunder shall attach to such Stockholder's Shares and shall be
binding upon any person or entity to which legal or beneficial ownership of such
Shares shall pass, whether by operation of law or otherwise, including, without
limitation, such Stockholder's heirs, guardians, administrators, or successors.
Notwithstanding any transfer of Shares, the transferor shall remain liable for
the performance of all obligations under this Agreement.
6.12. NO WAIVER. The failure of any party hereto to exercise any right,
power, or remedy provided under this agreement or otherwise available in respect
hereof at law or in equity, or to insist upon compliance by any other party
hereto with its obligations hereunder, any custom or practice of the parties at
variance with the terms hereof shall not constitute a
10
<PAGE> 11
waiver by such party of its right to exercise any such or other right, power or
remedy or to demand such compliance.
6.13. SPECIFIC PERFORMANCE. The parties hereto agree that irreparable
damage would occur in the event that any of the provisions of this Agreement
were not performed in accordance with their specific terms or were otherwise
breached. Accordingly, the parties further agree that each party shall be
entitled to an injunction or restraining order to prevent breaches of this
Agreement and to enforce specifically the terms and provisions hereof in any
court of the United States or any state having jurisdiction, this being in
addition to any other right or remedy to which such party may be entitled under
this Agreement, at law or in equity.
6.14. GOVERNING LAW. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of Delaware applicable to contracts
executed in and to be performed in that state.
6.15. HEADINGS. The descriptive headings contained in this Agreement
are included for convenience of reference only and shall not affect in any way
the meaning or interpretation of this Agreement.
6.16. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
11
<PAGE> 12
IN WITNESS WHEREOF, each of Parent and Merger Sub has caused this
Agreement to be executed by its officer thereunto duly authorized and each
Stockholder has caused this Agreement to be executed, or duly executed by an
authorized signatory, as of the date first written above.
TRW INC.
By: /s/ William B. Lawrence
-----------------------------
Name: William B. Lawrence
Title: Executive Vice President,
General Counsel and
Secretary
SYSTEMS ACQUISITION INC.
By: /s/ Kathleen A. Weigand
-----------------------------
Name: Kathleen A. Weigand
Title: Vice President and Secretary
STOCKHOLDERS
THE CARLYLE PARTNERS LEVERAGED CAPITAL
FUND I, L.P.
BDM ACQUISITION PARTNERS, L.P.
BDM ACQUISITION PARTNERS II, L.P.
By THE CARLYLE GROUP, L.P.
General Partner of Each
By TWC VIRGINIA, INC.
Its General Partner
By: /s/ William E. Conway, Jr.
-----------------------------
Name: William E. Conway, Jr.
Title: Executive Vice President
12
<PAGE> 13
EXHIBIT A
List of Stockholders
--------------------
<TABLE>
<CAPTION>
Name of Stockholder Number of Shares
- ------------------- ----------------
<S> <C>
The Carlyle Partners Leveraged 6,470,000
Capital Fund I, L.P.
BDM Acquisition Partners, L.P. 190,000
BDM Acquisition Partners II, L.P. 1,000,000
</TABLE>
<PAGE> 1
Exhibit (c)(3)
[WASSERSTEIN PERELLA & CO., INC. LETTERHEAD]
September 12, 1997
TRW Inc.
1900 Richmond Way
Cleveland, OH 44124
Dear Gentlemen:
Wasserstein Perella & Co., Inc. ("WP&Co.") is acting on behalf of BDM
International, Inc. (the "Company") to explore the possible sale of the Company
(the "Transaction"). In that connection, you have requested certain information
concerning the Company from officers, directors, employees and/or agents of the
Company, including WP&Co. All such information (whether written or oral)
furnished to you and your Representatives (as defined below), by the Company,
its officers, directors, employees or agents, on or following the date hereof,
which is marked as "confidential" or, if furnished orally, is contemporaneously
identified in writing as being confidential, together with analyses,
compilations, forecasts, studies or other documents or records prepared by you
or your Representatives which contain, are based on or otherwise reflect or are
generated in whole or in part from such information, including that stored on
any computer, word processor or other similar device, are collectively referred
to herein as the "Evaluation Material."
You hereby agree as follows:
(1) You shall use the Evaluation Material solely for the purpose of
evaluating the Transaction and you shall keep the Evaluation Material
confidential, except that you may disclose the Evaluation Material or
portions thereof to those of your directors, officers, employees,
affiliates, representatives (including, without limitation, financial
advisors, attorneys and accountants) and your potential sources of
financing (if any) for the Transaction (collectively, the
"Representatives") (a) who need to know such information for the
purpose of evaluating the Transaction, (b) who are informed by you of
the confidential nature of the Evaluation Material and (c) who agree
to be bound by the terms of this agreement as if they were parties
hereto. You shall be responsible for any breach of this agreement by
your Representatives. In the event that you or any of your
Representatives are requested or required (by deposition,
interrogatory,
<PAGE> 2
request for documents, subpoena, civil investigative demand or similar
process) to disclose any of the Evaluation Material, you shall provide
the Company with prompt prior written notice of such requirement, you
shall furnish only that portion of the Evaluation Material which you
are advised by written opinion of counsel is legally required, and you
shall exercise your best efforts to obtain reliable assurance that
confidential treatment will be accorded such Evaluation Material.
(2) If you determine not to proceed with the Transaction, you will
promptly inform WP&Co. of that decision and, in that case or at any
time upon the request of the Company or WP&Co., you and your
representatives shall promptly either (i) destroy all copies of the
written Evaluation Material in your or their possession or under your
or their custody or control (including that stored in any computer,
word processor or similar device) and confirm such destruction to the
Company in writing or (ii) return to WP&Co. all copies of the
Evaluation Material furnished to you by or on behalf of the Company in
your possession or in the possession of your Representatives. Any oral
Evaluation Material will continue to be held subject to the terms of
this agreement. If requested, you shall provide a certification by an
appropriate officer that all such Evaluation Material has been
returned or destroyed.
(3) The term "Evaluation Material" does not include any information which
(i) is generally available to and known by the public (other than as a
result of a disclosure by you or by any of the Representatives); (ii)
was available to you on a non-confidential basis from a source (other
than the Company or its representatives) that is not and was not
prohibited from disclosing such information to you by a contractual,
legal or fiduciary obligation; or was known to you prior to your
receipt thereof.
(4) The parties hereto both agree that, without the prior written consent
of the other party, neither party nor their representatives shall
disclose to any person (unless required by law) (a) that any
investigations, discussions or negotiations are taking place
concerning the Transaction or any other possible Transaction involving
the Company and you, (b) that you have requested or received any
Evaluation Material or (c) any of the terms, conditions or other facts
with respect to the Transaction involving you or such investigations,
discussions or negotiations, including the status thereof. The term
"person" as used in this agreement shall be broadly interpreted to
include the media and any corporation, partnership, group, individual
or entity.
(5) You agree that (i) all communication regarding the Transaction, (ii)
requests for additional information, facility tours or management
meetings, and (iii) discussions or questions regarding procedures with
respect to the Transaction, will be first submitted or directed to
WP&Co.
<PAGE> 3
and not to the Company. Accordingly, you agree that until the
consummation of the Transaction by you or a third party, you will not,
directly or indirectly, contact or communicate with any officer,
director, employee or agent of the Company without the express prior
consent of the Company or WP&Co. Both parties agree that, for a period
of one year from the date of this agreement, neither party will,
directly or indirectly, solicit for employment or hire any employee of
either party with whom the parties have had contact or who became
known to the parties in connection with the parties' consideration of
the Transaction. For purposes of this paragraph, the term "solicit"
shall not include general solicitations of employment by means of
newspaper, periodical or trade publication used in the ordinary course
of business. You acknowledge and agree that (a) WP&Co. and the Company
are free to conduct the process leading up to a possible Transaction
as WP&Co. and the Company, in their sole discretion, may determine
(including, without limitation, by negotiating with any prospective
buyer and entering into a preliminary or definitive agreement without
prior notice to you or any other person), (b) WP&Co. and the Company
reserve the right, in their sole discretion, to change the procedures
relating to your consideration of the Transaction at any time without
prior notice to you or any other person, to reject any and all
proposals made by you or any of your Representatives with regard to
the Transaction, and to terminate discussions and negotiations with
you at any time and for any reason, and (c) unless and until a written
definitive agreement concerning the Transaction has been executed,
neither WP&Co. nor the Company, nor their respective officers,
directors, employees, affiliates, stockholders, agents or controlling
persons will have any legal obligation to you of any kind whatsoever
with respect to the Transaction, whether by virtue of this agreement,
any other written or oral expression with respect to the Transaction
or otherwise. For purposes hereof, the term "definitive agreement"
does not include an executed letter or intent or any other preliminary
written agreement.
(6) You agree that, for a period of two years from the date of this
agreement, unless such shall have been specifically invited in writing
by the Company, neither you nor any of your affiliates (as such term
is defined under the Securities Exchange Act of 1934, as amended (the
"1934 Act")) or Representatives will in any manner, directly or
indirectly, (a) effect or seek, offer or propose (whether publicly or
otherwise) to effect, or cause or participate in or in any way assist
any other person to effect or seek, offer or propose (whether publicly
or otherwise) to effect or participate in, (i) any acquisition of any
securities (or of beneficial ownership thereof) in excess of 5% of the
Company, or assets of the Company or any of its subsidiaries; (ii) any
tender or exchange offer, merger or other business combination
involving the Company or any of its subsidiaries; (iii) any
recapitalization, restructuring, liquidation,
<PAGE> 4
dissolution or other extraordinary Transaction with respect to the
Company or any of its subsidiaries; or (iv) any solicitation of
proxies or consents to vote any voting securities of the Company; (b)
form, join or in any way participate in a "group" (as defined under
the 1934 Act); (c) take any action which might force the Company to
make a public announcement regarding any of the types of matters set
forth in (a) above; or (d) enter into any discussions or arrangements
with any third party with respect to any of the foregoing. This
paragraph shall not apply to TRW Investment Management Co., it's
advisors, or TRW's employee benefit plans.
(7) You acknowledge that you and your Representatives may receive material
non-public information in connection with your evaluation of the
Transaction and you are aware (and you will so advise your
Representatives) that the United States securities laws impose
restrictions on trading in securities when in possession of such
information.
(8) You understand and acknowledge that none of the Company, WP&Co. or any
of their respective officers, directors, employees, affiliates,
stockholders, agents or controlling persons is making any
representation or warranty, express or implied, as to the accuracy or
completeness of the Evaluation Material, and each of the Company,
WP&Co. and such other persons expressly disclaims any and all
liability to you or any other person that may be based upon or relate
to (a) the use of the Evaluation Material by you or any of the
Representatives or (b) any errors therein or omissions therefrom. You
further agree that you are not entitled to rely on the accuracy and
completeness of the Evaluation Material and that you will be entitled
to rely solely on those particular representations and warranties, if
any, that are made to a purchaser in a definitive agreement relating
to the Transaction when, as, and if it is executed, and subject to
such limitations and restrictions as may be specified in such
definitive agreement.
(9) Both parties acknowledge that remedies at law may be inadequate to
protect either party against any actual or threatened breach of this
agreement. Without prejudice to any other rights and remedies
otherwise available to either party, both parties agree that the other
party is entitled to equitable relief in the event of any such breach.
(10) You agree that no failure to delay by the Company in exercising any
right, power or privilege hereunder will operate as a waiver thereof,
nor will any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right, power or
privilege hereunder.
<PAGE> 5
(11) This agreement is for the benefit of the parties and their respective
successors and assigns. The rights of the Company under this agreement
may be assigned in whole or in part to any purchaser of the Company
which purchaser shall be entitled to enforce this agreement to the
same extent and in the same manner as the Company is entitled to
enforce this agreement.
(12) This agreement and all controversies arising from or relating to
performance under this agreement shall be governed by and construed in
accordance with the laws of the State of New York, without giving
effect to its conflicts of laws principles.
(13) This agreement contains the entire agreement between you and the
Company concerning the subject matter hereof, and no modification of
this agreement or wavier of the terms and conditions hereof will be
binding unless approved in writing by the Company and you.
(14) The obligations of the parties will continue in effect from the date
of this agreement through September 12, 1999.
Please confirm your agreement to the foregoing by signing both copies of
this agreement and returning one to WP&Co., Attn: Paul J. S. Haigney.
Very truly yours,
WASSERSTEIN PERELLA & CO., INC.
As Financial Advisor to, and as
Representative of
BDM International, Inc.
By: /s/ Paul J. S. Haigney
------------------------------------
Paul J. S. Haigney
Managing Director
CONFIRMED AND AGREED AS
OF THE DATE WRITTEN ABOVE:
TRW Inc.
By: /s/ Donald G. Kovar
-----------------------------------
Name: Donald G. Kovar
Title: Vice President
<PAGE> 1
Exhibit (c)(4)
EXCLUSIVITY AGREEMENT
BDM International, Inc. ("BDM"), The Carlyle Partners Leveraged Capital
Fund I, L.P., BDM Acquisition Partners, L.P., BDM Acquisition Partners II, L.P.,
The Carlyle Group, L.P., and TWC Virginia, Inc. (collectively, hereinafter the
"Carlyle Group") hereby severally agree that they will immediately cease all
discussions and negotiations with any party other than TRW Inc. that related to,
or may reasonably be expected to lead to, any merger or consolidation involving
BDM or any sale, lease, or other disposition of assets of BDM or its direct or
indirect subsidiaries representing fifteen percent (15%) or more of the
consolidated assets of BDM and such subsidiaries, or the issuance, sale, or
other disposition (to one or more persons or to any group of persons) of any
such equity interests or of securities representing fifteen percent (15%) or
more of any class of stock of BDM or any such equity interests, or any
recapitalization, restructuring, liquidation, dissolution, or other
extraordinary transaction with respect to BDM or any of its subsidiaries, or any
such equity interests. In addition, BDM and the Carlyle Group severally agree
that until the earlier of (i) the date which is seventeen (17) days following
the execution of this letter by BDM and the Carlyle Group, or (ii) the date on
which definitive agreements which supersede this letter are executed by the
parties hereto, BDM and the Carlyle Group will neither directly or indirectly,
take (nor shall it authorize or permit any of its subsidiaries, officers,
directors, employees, representatives, investment bankers, attorneys,
accountants, or other agents or affiliates, to take) any action to solicit,
encourage, or initiate the submission of any transaction proposal, enter into
any agreement providing for any transaction proposal, or participate in any way
in discussions or negotiations with or furnish any information to any person,
which may reasonably be expected to lead to any transaction proposal or assist
any person in the making of any transaction proposal.
Accepted and Agreed to, as of
November 14, 1997
BDM INTERNATIONAL, INC. THE CARLYLE PARTNERS
LEVERAGED CAPITAL FUND I, L.P.
BDM ACQUISITION PARTNERS, L.P.
BDM ACQUISITION PARTNERS II, L.P.
By: THE CARLYLE GROUP, L.P.
General Partner of Each
By: /s/ Philip A. Odeen By: TWC VIRGINIA, INC.
---------------------------------- Its General Partner
Name: Philip A. Odeen
Title: President
By: /s/ William E. Conway, Jr.
------------------------------------
Name: William E. Conway, Jr.
Title: Executive Vice President
<PAGE> 1
Exhibit (c)(5)
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (the "Agreement"), dated as of November 20,
1997, but effective as provided herein, is made and entered into by and between
TRW Inc., an Ohio corporation (the "Company" or "TRW", as the context
requires), and _____________________ (the "Executive").
WHEREAS, the Executive has been serving as the ____________ of BDM
International, Inc. ("BDM"), a Delaware corporation;
WHEREAS, pursuant to the Agreement and Plan of Merger (the "Merger
Agreement") among the Company, Systems Acquisition Inc., a wholly owned
subsidiary of the Company ("Merger Sub"), and BDM (the "Merger Agreement"),
as of the effective time of the Merger (the "Effective Time"), Merger Sub will
be merged with and into BDM, with BDM as the surviving entity (the "Merger");
WHEREAS, pursuant to the Merger Agreement it is contemplated that
Executive will execute this Agreement upon the signing of the Merger Agreement
and, upon the date of the consummation of the Offer, as defined in the Merger
Agreement (the "Closing Date"), Executive will serve in the employ of the
Company or a subsidiary of the Company ("Company" as used herein will mean the
Company or a subsidiary of the Company);
WHEREAS, the Company considers it in the best interests of its
stockholders to foster the continuous employment of certain key management
personnel of BDM;
WHEREAS, the Company wishes to assure itself of both present and
future continuation of management in light of the Merger;
WHEREAS, the Company wishes to employ the Executive and the Executive
is willing to render services, both on the terms and subject to the conditions
set forth in this Agreement;
NOW, THEREFORE, in consideration of the promises and of the mutual
covenants herein contained, it is agreed as follows:
1. EMPLOYMENT.
1.1 The Company hereby agrees to continue to employ the Executive, and
the Executive hereby agrees to continue employment with the Company, upon the
terms and conditions herein set forth.
<PAGE> 2
1.2 Employment will continue for a term commencing on the Closing Date
and, subject to earlier expiration upon the Executive's termination under
Section 3, expiring on the third anniversary of the Closing Date (the
"Employment Term").
1.3 DUTIES. During the Employment Term, the Executive will be the
Company's full-time employee in a position requiring the Executive to provide
services of a similar character to those provided by the Executive to BDM
immediately prior to the date hereof. The Executive will devote all of his
business time and attention to the performance of his duties to the Company.
Notwithstanding the foregoing, the Executive may, (i) subject to the approval of
the Company, serve as a director of a company which is not engaged in
"Competition" (as defined in Section 5.1) with the Company, (ii) serve as an
officer, director or otherwise participate in purely educational, welfare,
social, religious and civic organizations, and (iii) manage personal and family
investments.
2. COMPENSATION AND RELATED MATTERS.
2.1 COMPENSATION AND BENEFITS.
(i) ANNUAL BASE SALARY. Executive will receive an annual base
salary of not less than his annual base salary in effect immediately prior to
the Effective Time. In the event that the Executive relocates his location of
principal employment at the request of the Company, the Company will in good
faith consider a cost of living adjustment to annual base salary. Annual base
salary and merit increases to such salary will be payable at the times and in
the manner consistent with Banneker's general policies regarding compensation of
executive employees.
(ii) ANNUAL INCENTIVE COMPENSATION. Executive will be eligible to
receive annual incentive compensation based on incentive target percentages of
base salary comparable to such percentages in effect immediately prior to the
Effective Time. Nothing in this Section 2.1(ii) will guarantee to the Executive
any specific amount of incentive compensation, or prevent the Board from
establishing performance goals and compensation targets applicable to the
Executive.
2.2 EXECUTIVE BENEFITS. In addition to the compensation described in
Section 2.1, the Executive and his eligible dependents during the Employment
Term will be entitled to participate in employee benefit plans currently offered
by BDM, including without limitation supplemental retirement plans,
executive life insurance and executive deferred compensation plans, provided
however that the Company reserves the right to provide comparable benefits under
new or substituted benefit plans.
2.3 EXPENSES. The Company will promptly reimburse the Executive for
all travel and other business expenses the Executive incurs in order to perform
his duties to the Company under this Agreement in a manner commensurate with the
Executive's position and level of responsibility with the Company, and in
accordance with the Company's policy regarding expenses.
-2-
<PAGE> 3
3. TERMINATION. Notwithstanding the Employment Term specified in Section
1.2, the termination of the Executive's employment hereunder will be governed by
the following provisions:
3.1 CAUSE.
(i) The Company may terminate the Executive's employment
hereunder for Cause (as defined below). In the event of the Executive's
termination for Cause, the Company will promptly pay to the Executive (or his
representative) the unpaid annual base salary to which he is entitled, pursuant
to Section 2.1, through the date the Executive is terminated and the Executive
will be entitled to no other compensation, except as otherwise due to him under
applicable law.
(ii) For purposes of this Agreement, the term "Cause" means
either (a) that the Executive shall have committed: (1) an intentional act of
fraud, embezzlement or theft in connection with his duties or in the course of
his employment with the Company; (2) intentional wrongful damage to property of
the Company; (3) intentional misconduct that is materially injurious to the
Company, monetarily or otherwise; (4) an intentional breach of the Executive's
obligations set forth in Section 5, and any such act shall have been materially
harmful to the Company; or (b) the failure by the Executive to comply with the
policies and procedures then applicable to employees of the Company who have
positions comparable to the Executive; provided, however, that the Executive
shall not be terminated for Cause pursuant to this Section 3.1(ii)(b) unless he
shall have received a written report setting forth in reasonable detail the
manner in which he has failed to meet such policies and procedures and within 30
calendar days after receiving such report, the Board (or Chief Executive Officer
and/or President of the Company) shall have determined in good faith that the
Executive shall have failed to make substantial progress in meeting the
Company's policies and procedures. For purposes of this Agreement, an act or
failure to act on the part of the Executive shall be deemed "intentional" only
if done or omitted to be done by the Executive not in good faith and without
reasonable belief that his action or omission was in the best interest of the
Company.
3.2 TERMINATION.
(i) INVOLUNTARY TERMINATION. The Executive's employment hereunder
may be terminated by the Company for any reason by written notice as provided in
Section 8.4. The Executive will be treated for purposes of this Agreement as
having been involuntarily terminated by the Company other than for Cause if the
Executive terminates his employment with the Company for any of the following
reasons: (a) the Company requests that the Executive provide services that are
not of a similar character to those provided by the Executive to BDM
immediately prior to the date hereof; (b) the Company has breached any material
provision of this Agreement and within 30 days after notice thereof from the
Executive, the Company fails to cure such breach; or (c) the Company requires
the Executive to relocate his principal place of employment to any location
outside a fifty mile radius from the location of the Executive's principal place
of employment immediately prior to the date hereof.
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(ii) VOLUNTARY TERMINATION. The Executive may voluntarily
terminate the Agreement at any time by notice to the Company as provided in
Section 8.4.
3.3 TERMINATION PAYMENTS AND BENEFITS.
(i) FORM AND AMOUNT. Upon the Executive's involuntary termination
other than for Cause during the Employment Term, the Company will pay an amount
to the Executive as follows: (a) if the termination occurs on or prior to the
second anniversary of the Closing Date, an amount equal to three times the sum
of the Executive's annual salary and target annual incentive compensation in
effect immediately prior to the termination, multiplied by a fraction the
numerator of which is the number of full months remaining in the Employment Term
and the denominator of which is 36; and (b) if the termination occurs after the
second anniversary of the Closing Date, an amount equal to the sum of the
Executive's annual salary and target annual incentive compensation in effect
immediately prior to the termination. Any amount due pursuant to this Section
3.3 will be payable in a lump sum less applicable taxes within 30 days following
termination.
(ii) MAINTENANCE OF BENEFITS. During the period set forth below,
the Company will use its best efforts to maintain in full force and effect for
the continued benefit of the Executive, and his or her eligible dependents, all
health and welfare benefits which the Executive was entitled to receive
immediately prior to his termination or will arrange to make available to the
Executive benefits substantially similar to those that the Executive would
otherwise have been entitled to receive if his employment had not been
terminated. Such benefits will be provided to the Executive on the same terms
and conditions (including employee contributions toward the premium payments)
under which the Executive was entitled to participate immediately prior to his
termination. The term of continued benefits will be as follows: (a) if the
termination occurs on or prior to the second anniversary of the Closing Date,
the term will be the remainder of the Employment Term if there had been no
termination and (b) if the termination occurs after the second anniversary of
the Closing Date, the term will be 12 months.
(iii) RELEASE. No amount or benefit will be paid or made
available under this Section 3 unless (a) the Executive executes a release in a
form satisfactory to the Company, and (b) to the extent such payment or benefit
is subject to the seven-day revocation period prescribed by the Age
Discrimination in Employment Act of 1967, as amended, or to any similar
revocation period in effect on the date of termination of Executive's
employment, such revocation period has expired.
4. MITIGATION AND OFFSET. The Executive is under no obligation to mitigate
damages or the amount of any payment provided for hereunder by seeking other
employment or otherwise; provided, however, that the Executive's coverage under
the Company's health and welfare plans will be reduced to the extent that the
Executive becomes covered under any comparable employee
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benefit plan made available by another employer and covering the same type of
benefits. The Executive will report to the Company any such benefits actually
received by him.
5. COMPETITION; CONFIDENTIALITY; NONSOLICITATION
5.1 The Executive hereby covenants and agrees that during the
Employment Term and for the applicable period following the Employment Term
specified in Section 3.3(ii)(a) or (b), whichever would be applicable if Section
3.3(ii) applied (regardless of whether the Executive's termination of employment
was for cause or otherwise), he will not, without the prior written consent of
the Company, engage in Competition (as defined below) with the Company.
Notwithstanding the foregoing, in the event that the Executive voluntarily
terminates his employment with the Company, the Non-Competition period provided
for herein will end on the later of (a) the second anniversary of the Closing
Date and (b) the six month anniversary of the termination date. For purposes of
this Agreement, "Competition" means participating in the management of any
business enterprise if such enterprise engages in substantial and direct
competition with the Company and such enterprise's sales of any product or
service competitive with any product or service of the Company amounted to 25%
of such enterprise's net sales for its most recently completed fiscal year and
if the Company's net sales of said product or service amounted to 25% of the
Company's net sales for its most recently completed fiscal year. "Competition"
will not include (i) the mere ownership of securities in any enterprise and
exercise of rights appurtenant thereto or (ii) participation in management of
any enterprise or business operation thereof other than in connection with the
competitive operation of such enterprise.
5.2 During the Employment Term, the Company agrees that it will
disclose to Executive its confidential or proprietary information (as defined in
this Section 5.2) to the extent necessary for Executive to carry out his
obligations under this Agreement. The Executive hereby covenants and agrees that
he will not, without the prior written consent of the Company, during the
Employment Term or thereafter disclose to any person not employed by the
Company, or use in connection with engaging in Competition with the Company, any
confidential or proprietary information of the Company. For purposes of this
Agreement, the term "confidential or proprietary information" will include all
information of any nature and in any form that is owned by the Company and that
is not publicly available or generally known to persons engaged in businesses
similar or related to those of the Company. Confidential information will
include, without limitation, the Company's financial matters, customers,
employees, industry contracts, and all other secrets and all other information
of a confidential or proprietary nature. Confidential information shall not
include information that comes into the possession of the Executive following
termination from a source not under a duty to the Company to refrain from
disclosing such information. The foregoing obligations imposed by this Section
5.2 will cease if such confidential or proprietary information will have become,
through no fault of the Executive, generally known to the public or the
Executive is required by law to make disclosure (after giving the Company notice
and an opportunity to contest such requirement).
5.3 The Executive hereby covenants and agrees that during the
Employment Term and for one year following the Employment Term he will not
attempt to influence, persuade or induce, or assist any other person in so
persuading or inducing, any employee of the Company to give up, or to not
commence, employment or a business relationship with the Company.
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5.4 For purposes of this Section 5, the term the "Company" means the
Company and its subsidiaries, collectively.
6. POST-TERMINATION ASSISTANCE. The Executive agrees that after his
employment with the Company has terminated he will provide, upon reasonable
notice, such information and assistance to the Company as may reasonably be
requested by the Company in connection with any litigation, investigation, audit
or similar matter in which it or any of its affiliates is or may become a party;
provided, however, that the Company agrees to reimburse the Executive for any
related out-of-pocket expenses, including travel expenses.
7. SURVIVAL. The expiration or termination of the Employment Term will not
impair the rights or obligations of any party hereto that accrue hereunder prior
to such expiration or termination, except to the extent specifically stated
herein. In addition to the foregoing, the Executive's covenants contained in
Sections 5.1, 5.2, 5.3 and 6 and the Company's obligations under Section 3 will
survive the expiration or termination of Executive's employment.
8. MISCELLANEOUS PROVISIONS.
8.1 BINDING ON SUCCESSORS. This Agreement will be binding upon and
inure to the benefit of the Company, the Executive and each of their respective
successors, assigns, personal and legal representatives, executors,
administrators, heirs, distributees, devisees and legatees, as applicable.
8.2 GOVERNING LAW. This Agreement will be governed, construed,
interpreted and enforced in accordance with the substantive laws of the State of
Ohio, without regard to conflict of law principles.
8.3 SEVERABILITY. Any provision of this Agreement that is deemed
invalid, illegal or unenforceable in any jurisdiction will, as to that
jurisdiction be ineffective to the extent of such invalidity, illegality or
unenforceability, without affecting in any way the remaining provisions hereof
in such jurisdiction or rendering that or any other provisions of this Agreement
invalid, illegal, or unenforceable in any other jurisdiction. If any covenant
should be deemed invalid, illegal or unenforceable because its scope is
considered excessive, such covenant will be modified so that the scope of the
covenant is reduced only to the minimum extent necessary to render the modified
covenant valid, legal and enforceable.
8.4 NOTICES. For all purposes of this Agreement, all communications,
including without limitation notices, consents, requests or approvals, required
or permitted to be given hereunder must be in writing and will be deemed to have
been duly given when hand delivered or dispatched by electronic facsimile
transmission (with receipt thereof confirmed), or five business days after
having been mailed by United States registered or certified mail, return receipt
requested, postage prepaid, or three business days after having been sent by a
nationally recognized overnight courier service such as Federal Express, UPS or
Purolator, addressed as follows, or to such other address as any party may have
furnished to the other in writing and in accordance herewith, except that
notices of changes of address will be effective only upon receipt.
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(i) TO THE COMPANY. If to the Company, addressed to:
TRW Inc.
1900 Richmond Road
Cleveland, Ohio 44124
Attn: Secretary
Telecopy: 216.291.7563
(ii) TO THE EXECUTIVE. If to the Executive, to him at ___________
____________________________________________________________
____________________________________.
8.5 COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which will be deemed to be an original, but all of which
together will constitute one and the same Agreement.
8.6 ENTIRE AGREEMENT. The terms of this Agreement are intended by the
parties to be the final expression of their agreement with respect to the
Executive's employment by the Company and may not be contradicted by evidence of
any prior or contemporaneous agreement. The parties further intend that this
Agreement will constitute the complete and exclusive statement of its terms and
that no extrinsic evidence whatsoever may be introduced in any judicial,
administrative or other legal proceeding to vary the terms of this Agreement.
This agreement supersedes any and all prior agreements applicable to the terms
and conditions of Executive's employment with any entity referred to herein.
8.7 AMENDMENTS; WAIVERS. This Agreement may not be modified, amended,
or terminated except by an instrument in writing, approved by the Company and
signed by the Executive and the Company. Failure on the part of either party to
complain of any action or omission, breach or default on the part of the other
party, no matter how long the same may continue, will never be deemed to be a
waiver of any rights or remedies hereunder, at law or in equity. The Executive
or the Company may waive compliance by the other party with any provision of
this Agreement that such other party was or is obligated to comply with or
perform only through an executed writing; provided, however, that such waiver
will not operate as a waiver of, or estoppel with respect to, any other or
subsequent failure.
8.8 NO INCONSISTENT ACTIONS. The parties will not voluntarily
undertake or fail to undertake any action or course of action that is
inconsistent with the provisions or essential intent of this Agreement.
Furthermore, it is the intent of the parties hereto to act in a fair and
reasonable manner with respect to the interpretation and application of the
provisions of this Agreement.
8.9 HEADINGS AND SECTION REFERENCES. The headings used in this
Agreement are intended for convenience or reference only and will not in any
manner amplify, limit, modify or otherwise be used in the construction or
interpretation of any provision of this Agreement. All section references are to
sections of this Agreement, unless otherwise noted.
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9. TREATMENT OF OPTIONS. Executive agrees that he will not exercise any
options which he currently holds to purchase common stock of BDM (the
"Options") prior to the Closing Date, and that upon the Closing Date, Executive
will receive cash in exchange for the cancellation of his Options as set forth
in Section 1.9(a) of the Merger Agreement.
10. EFFECTIVENESS. This Agreement will become effective upon the Closing
Date, except for the provisions of Section 9, which shall become effective as of
the date hereof. Notwithstanding any other provision of this Agreement, if the
Merger Agreement is terminated prior to the Effective Time, this Agreement will
have no further force or effect.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date and year first above written, but effective as provided in Section 9.
Name:___________________________________
TRW INC.,
an Ohio corporation
By:_____________________________________
DULY AUTHORIZED
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