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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
NetWorth, Inc.
(Name of Subject Company)
Compaq-Dallas, Inc.
(Bidder)
a direct wholly owned subsidiary of
Compaq Computer Corporation
Common Stock, $0.01 Par Value Per Share
(Title of Class of Securities)
64122110
(CUSIP Number of Class of Securities)
Wilson D. Fargo Copies to:
Senior Vice President, General Christopher Mayer
Counsel and Secretary Davis Polk & Wardwell
Compaq Computer Corporation 450 Lexington Avenue
20555 SH 249 New York, New York 10017
P.O. Box 692000 Telephone: (212) 450-4000
Houston, TX 77070
Telephone: (713) 514-1463
(Name, Address and Telephone Number
of Person Authorized to Receive Notices
and Communications on Behalf of Bidder)
________________
CALCULATION OF FILING FEE
Transaction valuation(1) Amount of filing fee(2)
------------------------ -----------------------
$371,789,250 $74,358
(1) Based upon $42 cash per share for 8,852,125 shares.
(2) The amount of the filing fee is 1/50th of one percent of the 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.
Amount Previously Paid: Not applicable. Filing Party: Not applicable.
Form or Registration No.: Not applicable. Date Filed: Not applicable.
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| CUSIP NO. 64122110 |
------------------------
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| | |
| 1 | NAMES OF REPORTING PERSONS |
| | S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSON |
| | Compaq Computer Corporation |
| | 76-0011617 |
- -----------------------------------------------------------------------------
| 2 | CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* |
| | (a) [ ] |
| | (b) [ ] |
- -----------------------------------------------------------------------------
| 3 | SEC USE ONLY |
- -----------------------------------------------------------------------------
| 4 | SOURCE OF FUNDS* |
| | BK, WC |
- -----------------------------------------------------------------------------
| 5 | CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS |
| | REQUIRED PURSUANT TO ITEMS 2(e) OR 2(f) [ ] |
- -----------------------------------------------------------------------------
| 6 | CITIZENSHIP OR PLACE OF ORGANIZATION |
| | Delaware |
- -----------------------------------------------------------------------------
| 7 | AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH |
| | REPORTING PERSON |
| | 0 |
- -----------------------------------------------------------------------------
| 8 | CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) |
| | EXCLUDES CERTAIN SHARES* [ ] |
- -----------------------------------------------------------------------------
| 9 | PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7) |
| | 0 |
- -----------------------------------------------------------------------------
| 10 | TYPE OF REPORTING PERSON* |
| | HC, CO |
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| CUSIP NO. 64122110 |
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| | |
| 1 | NAMES OF REPORTING PERSONS |
| | S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSON |
| | Compaq-Dalles, Inc. |
| | |
- -----------------------------------------------------------------------------
| 2 | CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* |
| | (a) [ ] |
| | (b) [ ] |
- -----------------------------------------------------------------------------
| 3 | SEC USE ONLY |
- -----------------------------------------------------------------------------
| 4 | SOURCE OF FUNDS* |
| | BK, WC |
- -----------------------------------------------------------------------------
| 5 | CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS |
| | REQUIRED PURSUANT TO ITEMS 2(e) OR 2(f) [ ] |
- -----------------------------------------------------------------------------
| 6 | CITIZENSHIP OR PLACE OF ORGANIZATION |
| | Delaware |
- -----------------------------------------------------------------------------
| 7 | AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH |
| | REPORTING PERSON |
| | 0 |
- -----------------------------------------------------------------------------
| 8 | CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) |
| | EXCLUDES CERTAIN SHARES* [ ] |
- -----------------------------------------------------------------------------
| 9 | PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7) |
| | 0 |
- -----------------------------------------------------------------------------
| 10 | TYPE OF REPORTING PERSON* |
| | CO |
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Item l. Security and Subject Company
----------------------------
(a) The name of the subject company is NetWorth, Inc., a Delaware
corporation (the "Company"), and the address of its principal executive
offices is set forth in Section 7 ("Certain Information Concerning the
Company") of the Offer to Purchase, which is incorporated herein by reference.
(b) This Statement relates to the offer by Compaq-Dallas, Inc., a Delaware
corporation ("Purchaser") and a wholly owned subsidiary of Compaq Computer
Corporation, a Delaware corporation ("Parent"), to purchase all outstanding
shares of Common Stock, $0.01 par value (the "Shares"), of the Company at $42
per Share, net to the seller in cash, upon 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, copies of which are attached hereto as
Exhibits (a)(l) and (a)(2) (which are herein collectively referred to as the
"Offer"). The information set forth in the introduction to the Offer to
Purchase (the "Introduction") 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), (g) The information set forth in the Introduction, Section 8
"Certain Information Concerning Purchaser and Parent" and Schedule I of the
Offer to Purchase is incorporated herein by reference.
(e)-(f) Neither Purchaser, nor, to the best knowledge of Purchaser, any
of the persons listed in Schedule I of the Offer to Purchase, has during the
last five years (i) been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors) or (ii) been 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 and Section l0
"Background of the Offer; Past Contacts, Transactions or Negotiations with the
Company; Merger Agreement" 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)-(e) The information set forth in the Introduction and Section 11
"Purpose of the Offer; Plans for the Company" of the Offer to Purchase is
incorporated herein by reference.
(f)-(g) The information set forth in Section 12 "Effect of the Offer on
the Market for Shares; NASDAQ Quotations; Registration Under the Exchange Act"
of the Offer to Purchase is incorporated herein by reference.
Item 6. Interest in Securities of the Subject Company.
---------------------------------------------
(a)-(b) The information set forth in the Introduction, Section 10
"Background of the Offer; Past Contacts, Transactions or Negotiations with the
Company; Merger Agreement", and Schedule I of 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 Purchaser and Parent", Section 9 "Source and Amount of
Funds", Section 10 "Background of the Offer; Past Contacts, Transactions or
Negotiations with the Company; Merger Agreement" and Schedule I of the Offer
to Purchase is incorporated herein by reference.
Item 8. Persons Retained, Employed or to be Compensated.
-----------------------------------------------
The information set forth in Section 17 "Fees and Expenses" 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
Purchaser and Parent" of the Offer to Purchase is incorporated herein by
reference.
Item 10. Additional Information.
----------------------
(a) The information set forth in Section 10 "Background of the Offer; Past
Contacts, Transactions or Negotiations with the Company; Merger Agreement" of
the Offer to Purchase is incorporated herein by reference.
(b)-(c) The information set forth in Section 16 "Certain Legal Matters;
Regulatory Approvals" of the Offer to Purchase is incorporated herein by
reference.
(d) The information set forth in Section 12 "Effect of the Offer on the
Market for Shares; NASDAQ Quotations; Registration under the Exchange Act" of
the Offer to Purchase is incorporated herein by reference.
(e) The information set forth in the Introduction and Section 16 "Certain
Legal Matters; Regulatory Approvals" of the Offer to Purchase is incorporated
herein by reference.
(f) The information set forth in the Offer to Purchase and the Letter of
Transmittal is incorporated herein by reference in its entirety.
Item 11. Material to be Filed as Exhibits.
--------------------------------
(a)(l) Offer to Purchase dated November 9, 1995.
(a)(2) Letter of Transmittal (including Guidelines for Certification
of Taxpayer Identification Number on Substitute Form W-9).
(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) Text of press release issued by Parent dated November 6, 1995.
(a)(7) Form of summary advertisement dated November 9, 1995.
(b)(1) $1,000,000,000 Credit Agreement dated October 31, 1995 among
Parent and the Banks named therein.
(b)(2) $250,000,000 Credit Agreement dated October 31, 1995 among
Parent and the Banks named therein.
(c)(1) Agreement and Plan of Merger dated as of November 5, 1995
among NetWorth, Inc., Compaq Computer Corporation and
Compaq-Dallas, Inc.
(c)(2) Confidentiality and Nondisclosure Agreement dated September
19, 1995 between Parent and the Company.
SIGNATURE
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.
Dated: November 9, 1995
Compaq-Dallas, Inc.
By /s/ Gary Stimac
Name: Gary Stimac
Title: President
Compaq Computer Corporation
By /s/ David J. Schempf
Name: David J. Schempf
Title: Vice President, Corporate
Finance, Corporate Controller
& Treasurer
Offer to Purchase for Cash
All of the Outstanding Shares of Common Stock
of
NetWorth, Inc.
at
$42.00 Net Per Share
by
Compaq - Dallas, Inc.
a wholly owned subsidiary of
Compaq Computer Corporation
-----------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT NEW YORK CITY
TIME, ON FRIDAY, DECEMBER 8, 1995, UNLESS THE OFFER IS EXTENDED.
-----------------
THE BOARD OF DIRECTORS OF THE COMPANY HAS DETERMINED THAT EACH OF THE OFFER
AND THE MERGER DESCRIBED HEREIN IS FAIR TO, AND IN THE BEST INTERESTS OF, THE
COMPANY AND ITS SHAREHOLDERS, AND RECOMMENDS THAT THE COMPANY-2p@'2p@S
SHAREHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES PURSUANT TO THE OFFER.
-----------------
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER A NUMBER OF
SHARES OF COMMON STOCK, PAR VALUE $.01 PER SHARE (THE "SHARES"), OF NETWORTH,
INC. (THE "COMPANY") WHICH, TOGETHER WITH THE SHARES THEN OWNED BY COMPAQ
- -DALLAS, INC. ("PURCHASER") WOULD REPRESENT AT LEAST A MAJORITY OF THE TOTAL
NUMBER OF OUTSTANDING SHARES ON A FULLY DILUTED BASIS.
-----------------
IMPORTANT
Any shareholder desiring to tender Shares should either (1) complete and
sign the Letter of Transmittal (or facsimile thereof) in accordance with the
instructions in the Letter of Transmittal and deliver it with the
certificate(s) representing tendered Shares and all other required documents
to the Depositary or tender such Shares pursuant to the procedures for
book-entry transfer set forth in Section 3 or (2) request his or her broker,
dealer, commercial bank, trust company or other nominee to effect the
transaction for him or her. A shareholder having Shares registered in the
name of a broker, dealer, commercial bank, trust company or other nominee must
contact such person if he or she desires to tender such Shares.
Any shareholder who desires to tender Shares and cannot deliver such
Shares and all other required documents to the Depositary by the expiration of
the Offer or who cannot comply with the procedures for book-entry transfer on
a timely basis must tender such Shares pursuant to the guaranteed delivery
procedure set forth in Section 3.
Questions and requests for assistance may be directed to the Information
Agent or the Dealer Manager 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, brokers,
dealers, commercial banks or trust companies.
-----------------
The Dealer Manager for the Offer is:
MORGAN STANLEY & CO.
Incorporated
November 9, 1995
TABLE OF CONTENTS
Section Page
- ------- ----
INTRODUCTION........................................................... 1
1. Terms of the Offer; Expiration Date............................... 2
2. Acceptance for Payment and Payment................................ 3
3. Procedure for Tendering Shares.................................... 3
4. Withdrawal Rights................................................. 6
5. Certain Tax Considerations........................................ 6
6. Price Range of Shares; Dividends.................................. 7
7. Certain Information Concerning the Company........................ 7
8. Certain Information Concerning Purchaser and Parent............... 9
9. Source and Amount of Funds........................................ 10
10. Background of the Offer; Past Contacts, Transactions or
Negotiations with the Company; Merger Agreement;
Other Arrangements.............................................. 11
11. Purpose of the Offer; Plans for the Company....................... 16
12. Effect of the Offer on the Market for Shares; NASDAQ
Quotations; Registration under the Exchange Act................. 16
13. Dividends and Distributions....................................... 17
14. Extension of Tender Period; Termination; Amendment................ 18
15. Certain Conditions of the Offer................................... 18
16. Certain Legal Matters; Regulatory Approvals....................... 20
17. Fees and Expenses................................................. 22
18. Miscellaneous..................................................... 22
Schedule I Directors and Executive Officers of Parent and Purchaser
To the Holders of Common Stock of
NetWorth, Inc.:
INTRODUCTION
Compaq-Dallas, Inc., a Delaware corporation ("Purchaser") and a wholly
owned subsidiary of Compaq Computer Corporation, a Delaware corporation
("Parent"), hereby offers to purchase all outstanding shares of Common Stock,
$.01 par value (the "Shares"), of NetWorth, Inc., a Delaware corporation (the
"Company"), at $42.00 per Share, net to the seller in cash, upon the terms and
subject to the conditions set forth in this Offer to Purchase and in the
related Letter of Transmittal (which together constitute the "Offer").
Tendering shareholders will not be obligated to pay brokerage fees or
commissions or, except as set forth in Instruction 6 of the Letter of
Transmittal, transfer taxes on the purchase of Shares pursuant to the Offer.
Purchaser will pay all charges and expenses of Morgan Stanley & Co.
Incorporated (the "Dealer Manager"), Citibank, N.A. (the "Depositary") and
Georgeson & Company Inc. (the "Information Agent") incurred in connection
with the Offer. See Section 17.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION DATE (AS HEREINAFTER
DEFINED) A NUMBER OF SHARES WHICH, TOGETHER WITH THE SHARES THEN OWNED BY
PURCHASER, WOULD REPRESENT AT LEAST A MAJORITY OF THE TOTAL NUMBER OF
OUTSTANDING SHARES ON A FULLY DILUTED BASIS (THE "MINIMUM CONDITION"). SEE
SECTION 15.
THE BOARD OF DIRECTORS OF THE COMPANY HAS DETERMINED THAT EACH OF THE
OFFER AND THE MERGER DESCRIBED HEREIN IS FAIR TO, AND IN THE BEST INTERESTS
OF, THE COMPANY AND ITS SHAREHOLDERS, AND RECOMMENDS THAT THE COMPANY'S
SHAREHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES PURSUANT TO THE OFFER.
COWEN & COMPANY, FINANCIAL ADVISOR TO THE COMPANY, HAS DELIVERED TO THE
BOARD OF DIRECTORS OF THE COMPANY ITS WRITTEN OPINION TO THE EFFECT THAT, AS
OF THE DATE OF THE MERGER AGREEMENT (AS HEREINAFTER DEFINED), THE $42.00 IN
CASH TO BE RECEIVED BY THE HOLDERS OF SHARES IN THE OFFER AND THE MERGER IS
FAIR TO SUCH HOLDERS FROM A FINANCIAL POINT OF VIEW. THE FULL TEXT OF THE
WRITTEN OPINION OF COWEN & COMPANY CONTAINING THE ASSUMPTIONS MADE, THE
MATTERS CONSIDERED AND THE SCOPE OF THE REVIEW UNDERTAKEN IN RENDERING SUCH
OPINION AS WELL AS THE LIMITATIONS OF SUCH OPINION IS INCLUDED WITH THE
COMPANY'S SOLICITATION/RECOMMENDATION STATEMENT ON SCHEDULE 14D-9, WHICH IS
BEING MAILED TO SHAREHOLDERS CONCURRENTLY HEREWITH. SHAREHOLDERS ARE URGED TO
READ THE FULL TEXT OF SUCH OPINION IN CONJUNCTION WITH THIS OFFER.
Based upon information provided by the Company, as of October 30, 1995,
there were outstanding 7,714,932 Shares, employee stock options to purchase
735,275 Shares, non-executive director stock options to purchase 36,000
Shares, options held by Ungermann-Bass Networks Inc., a Delaware corporation
("UB Networks"), to purchase 253,875 Shares, and warrants held by UB Networks
to purchase 112,043 Shares. Based upon the foregoing, as of October 30, 1995,
there were approximately 8,852,125 Shares outstanding on a fully diluted
basis. Neither Parent nor Purchaser beneficially owns any Shares.
Accordingly, Purchaser believes that the Minimum Condition would be satisfied
if approximately 4,426,063 Shares are validly tendered pursuant to the Offer
and not withdrawn.
The Offer is being made pursuant to an Agreement and Plan of Merger dated
as of November 5, 1995 (the "Merger Agreement") among the Company, Parent and
Purchaser. The Merger Agreement provides, among other things, that as soon as
practicable after the consummation of the Offer, Purchaser will be merged with
and into the Company (the "Merger"), with the Company continuing as the
surviving corporation (the "Surviving Corporation"). Pursuant to the Merger,
each outstanding Share (other than Shares held by Parent, or any subsidiary of
Parent (including Purchaser) or Shares held by shareholders exercising
appraisal rights) will be converted into a right to receive $42.00 in cash.
See Section 10.
The Merger Agreement provides that effective upon acceptance of payment
for any Shares pursuant to the Offer, Parent shall be entitled to designate
the number of directors, rounded up to the next whole number, on the Company's
Board of Directors that equals the product of (i) the total number of
directors on the Board of Directors (giving effect to the election of any
additional directors pursuant to this paragraph) and (ii) the percentage that
the number of Shares beneficially owned by Parent (including Shares accepted
for payment) bears to the total number of Shares outstanding.
The purpose of the Offer is to acquire control of, and the entire equity
interest in, the Company.
Under the General Corporation Law of the State of Delaware ("Delaware
Law"), if Purchaser acquires, pursuant to the Offer or otherwise, at least 90%
of the outstanding Shares, Purchaser believes it would be able to approve a
merger of the Company without a vote of the Company's other shareholders.
Otherwise, under Delaware Law and the Company's Certificate of Incorporation,
a merger of the Company would require the approval of the holders of a
majority of the outstanding Shares. If Purchaser acquires, pursuant to the
Offer or otherwise, at least a majority of the outstanding Shares, Purchaser
believes it would have sufficient voting power to approve a merger of the
Company without the affirmative vote of any other shareholder of the Company.
Purchaser further believes that such actions could, under Delaware Law and the
Company's Certificate of Incorporation, be taken by written consent without a
meeting and without a vote of the other shareholders of the Company. However,
there can be no assurance that Purchaser will acquire at least a majority of
the outstanding Shares.
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION AND SHOULD BE READ IN THEIR ENTIRETY BEFORE ANY DECISION
IS MADE WITH RESPECT TO THE OFFER.
1. Terms of the Offer; Expiration Date. Upon the terms and subject to
the conditions set forth in the Offer, Purchaser will accept for payment and
pay for all Shares that are validly tendered by the Expiration Date and not
withdrawn as provided in Section 4. The term "Expiration Date" shall mean
12:00 Midnight, New York City time, on Friday, December 8, 1995, unless
Purchaser shall have extended the period of time for 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 subject to certain conditions set forth in Section 15,
including satisfaction of the Minimum Condition and expiration or termination
of the waiting period applicable to Purchaser's acquisition of Shares pursuant
to the Offer under the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
as amended (the "HSR Act"). If any such condition is not satisfied, Purchaser
may (i) subject to the Merger Agreement, terminate the Offer and return all
tendered Shares to tendering shareholders, (ii) extend the Offer and, subject
to withdrawal rights as set forth in Section 4, retain all such Shares until
the expiration of the Offer as so extended, (iii) waive such condition and,
subject to any requirement to extend the period of time during which the Offer
is open, purchase all Shares validly tendered by the Expiration Date and not
withdrawn or (iv) delay acceptance for payment or payment for Shares, subject
to applicable law, until satisfaction or waiver of the conditions to the
Offer. Purchaser expressly reserves the right to waive the Minimum Condition
or any of the other conditions to the Offer and to make any change in the
terms or conditions of the Offer; provided that no change may be made which
changes the consideration to be paid or decreases the price per Share or the
number of Shares sought in the Offer or which imposes conditions to the Offer
in addition to the Minimum Condition and those conditions set forth in Section
15 or amends such conditions in a manner adverse to the Company. For a
description of Purchaser's right to extend the period of time during which the
Offer is open and to amend, delay or terminate the Offer, see Sections 14 and
15.
The Company has provided the Purchaser with the Company's shareholder
lists and security position listings for the purpose of disseminating the
Offer to holders of Shares. This Offer to Purchase and the related Letter of
Transmittal will be mailed to record holders of Shares and will be furnished
to brokers, banks and similar persons whose names, or the names of whose
nominees, appear on the shareholder 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. Upon the terms and subject to
the conditions of the Offer, Purchaser will accept for payment and pay for all
Shares validly tendered by the Expiration Date and not withdrawn as soon as
practicable after the later of (i) the Expiration Date and (ii) the
satisfaction or waiver of the conditions set forth in Section 15. In
addition, Purchaser reserves the right, in its sole discretion and subject to
applicable law, to delay the acceptance for payment or payment for Shares in
order to comply in whole or in part with any applicable law. For a
description of Purchaser's right to terminate the Offer and not accept for
payment or pay for Shares or to delay acceptance for payment or payment for
Shares, see Section 14.
For purposes of the Offer, Purchaser shall be deemed to have accepted for
payment tendered Shares when, as and if Purchaser gives oral or written notice
to the Depositary of its acceptance of the tenders of such Shares. Payment for
Shares accepted for payment pursuant to the Offer will be made by deposit of
the purchase price with the Depositary, which will act as agent for the
tendering shareholders for the purpose of receiving payments from Purchaser
and transmitting such payments to tendering shareholders. In all cases,
payment for Shares accepted for payment pursuant to the Offer will be made
only after timely receipt by the Depositary of certificates for such Shares
(or of 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 Section 3)), a properly completed and duly executed Letter of Transmittal
(or facsimile thereof) and any other required documents. For a description of
the procedure for tendering Shares pursuant to the Offer, see Section 3.
Accordingly, payment may be made to tendering shareholders at different times
if delivery of the Shares and other required documents occur at different
times. Under no circumstances will interest be paid by Purchaser on the
consideration paid for Shares pursuant to the Offer, regardless of any delay
in making such payment.
If Purchaser increases the consideration to be paid for Shares pursuant
to the Offer, Purchaser will pay such increased consideration for all Shares
purchased pursuant to the Offer.
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 Shares
tendered pursuant to the Offer, but any such transfer or assignment will not
relieve Purchaser of its obligations under the Offer or prejudice the rights
of tendering shareholders to receive payment for Shares validly tendered and
accepted for payment.
If any tendered Shares are not purchased pursuant to the Offer for any
reason, or if certificates are submitted for more Shares than are tendered,
certificates for such unpurchased or untendered Shares will be returned (or,
in the case of Shares tendered by book-entry transfer, such Shares will be
credited to an account maintained at one of the Book-Entry Transfer
Facilities), without expense to the tendering shareholder, as promptly as
practicable following the expiration or termination of the Offer.
3. Procedure for Tendering Shares. To tender Shares pursuant to the
Offer, either (a) a properly completed and duly executed Letter of Transmittal
(or facsimile thereof) 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 and either (i) certificates
for the Shares to be tendered must be received by the Depositary at one of
such addresses or (ii) such Shares must be delivered pursuant to the
procedures for book-entry transfer described below (and a confirmation of such
delivery received by the Depositary including an Agent's Message (as defined
below) if the tendering shareholder has not delivered a Letter of
Transmittal), in each case by the Expiration Date, or (b) the guaranteed
delivery procedure described below must be complied with. The term "Agent's
Message" means a message, transmitted by a Book-Entry Transfer Facility (as
hereinafter defined) 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 acknowledgement from the participant in such
Book-Entry Transfer Facility tendering the Shares which are the subject of
such book-entry confirmation that such participant has received and agrees to
be bound by the terms of the Letter of Transmittal and that the Company may
enforce such agreement against such participant.
Book Entry Delivery. The Depositary will establish an account with
respect to the Shares at The Depository Trust Company, Midwest Securities
Trust Company and Philadelphia Depository Trust Company (collectively referred
to as the "Book-Entry Transfer Facilities") for purposes of the Offer within
two business days after the date of this Offer to Purchase, and any financial
institution that is a participant in the system of any Book-Entry Transfer
Facility may make delivery of Shares by causing such Book-Entry Transfer
Facility to transfer such Shares into the Depositary's account in accordance
with the procedures of such Book-Entry Transfer Facility. However, although
delivery of Shares may be effected through book-entry transfer, the Letter of
Transmittal (or facsimile thereof) properly completed and duly executed
together with any required signature guarantees or an Agent's Message and any
other required documents must, in any case, be received by the Depositary at
one of its addresses set forth on the back cover of this Offer to Purchase by
the Expiration Date, or the guaranteed delivery procedure described below must
be complied with. Delivery of the Letter of Transmittal and any other
required documents to a Book-Entry Transfer Facility does not constitute
delivery to the Depositary.
Signature Guarantees. Except as otherwise provided below, all signatures
on a Letter of Transmittal must be guaranteed by a financial institution
(including most banks, savings and loan associations and brokerage houses)
which is a member of a recognized Medallion Program approved by The Securities
Transfer Association Inc., including the Securities Transfer Agents Medallion
Program (STAMP), the Stock Exchange Medallion Program (SEMP) and the New York
Stock Exchange, Inc. Medallion Signature Program (MSP) (an "Eligible
Institution"). Signatures on a Letter of Transmittal need not be guaranteed
(a) if the Letter of Transmittal is signed by the registered holder of the
Shares tendered therewith and such holder has not completed the box entitled
"Special Payment Instructions" on the Letter of Transmittal or (b) if such
Shares are tendered for the account of an Eligible Institution. See
Instructions 1 and 5 of the Letter of Transmittal.
Guaranteed Delivery. If a shareholder desires to tender Shares pursuant
to the Offer and cannot deliver such Shares and all other required documents
to the Depositary by the Expiration Date, or such shareholder cannot complete
the procedure for delivery by book-entry transfer on a timely basis, such
Shares may nevertheless be tendered if all of the following conditions are
met:
(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 is received by
the Depositary (as provided below) by the Expiration Date; and
(iii) the certificates for 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), together with a properly completed
and duly executed Letter of Transmittal (or facsimile thereof) with any
required signature guarantee or an Agent's Message and any other documents
required by the Letter of Transmittal, are received by the Depositary
within three National Association of Securities Dealers, Inc. Automated
Quotation ("NASDAQ") National Market System trading days after the date
of execution of the 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 in the form set forth in such
Notice.
THE METHOD OF DELIVERY OF SHARES AND ALL OTHER REQUIRED DOCUMENTS,
INCLUDING THROUGH BOOK-ENTRY TRANSFER FACILITIES, IS AT THE OPTION AND RISK OF
THE TENDERING SHAREHOLDER AND THE DELIVERY WILL BE DEEMED MADE ONLY WHEN
ACTUALLY RECEIVED BY THE DEPOSITARY. IF CERTIFICATES FOR SHARES ARE SENT BY
MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS
RECOMMENDED.
Under the federal income tax laws, the Depositary will be required to
withhold 31% of the amount of any payments made to certain shareholders
pursuant to the Offer. In order to avoid such backup withholding, each
tendering shareholder must provide the Depositary with such shareholder's
correct taxpayer identification number and certify that such shareholder is
not subject to such backup withholding by completing the Substitute Form W-9
included in the Letter of Transmittal. If a shareholder is a non-resident
alien or foreign entity not subject to back-up withholding, the shareholder
must give the Depositary a completed Form W-8 Certificate of Foreign Status
prior to receipt of any payment.
By executing a Letter of Transmittal, a tendering shareholder irrevocably
appoints designees of Purchaser as such shareholder's proxies in the manner
set forth in the Letter of Transmittal to the full extent of such
shareholder's rights with respect to the Shares tendered by such shareholder
and accepted for payment by Purchaser (and any and all other Shares) or other
securities issued or issuable in respect of such Shares on or after November
5, 1995. All such proxies shall be irrevocable and coupled with an interest
in the tendered Shares. Such appointment is effective only upon the
acceptance for payment of such Shares by Purchaser. Upon such acceptance for
payment, all prior proxies and consents granted by such shareholder with
respect to such Shares and other securities will, without further action, be
revoked, and no subsequent proxies may be given nor subsequent written
consents executed by such shareholder (and, if given or executed, will not be
deemed to be effective). Such designees of Purchaser will be empowered to
exercise all voting and other rights of such shareholder as they, in their
sole discretion, may deem proper at any annual, special or adjourned meeting
of the Company's shareholders, by written consent or otherwise. Purchaser
reserves the right to require that, in order for Shares to be validly
tendered, immediately upon Purchaser's acceptance for payment of such Shares,
Purchaser is able to exercise full voting rights with respect to such Shares
and other securities (including voting at any meeting of shareholders then
scheduled or acting by written consent without a meeting).
The tender of Shares pursuant to any one of the procedures described
above will constitute the tendering shareholder's acceptance of the Offer, as
well as the tendering shareholder's representation and warranty that (a) such
shareholder owns the Shares being tendered within the meaning of Rule 14e-4
promulgated under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), (b) the tender of such Shares complies with Rule 14e-4, and
(c) such shareholder has the full power and authority to tender and assign the
Shares tendered, as specified in the Letter of Transmittal. Purchaser's
acceptance for payment of Shares tendered pursuant to the Offer will
constitute a binding agreement between the tendering shareholder and Purchaser
upon the terms and subject to the conditions of the Offer.
All questions as to the form of documents and the validity, 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. Purchaser reserves the absolute right to reject
any or all tenders of Shares determined by it not to be in proper form or the
acceptance for payment of or payment for which may, in the opinion of
Purchaser's counsel, be unlawful. Purchaser also reserves the absolute right
to waive any defect or irregularity in any tender of Shares. None of
Purchaser, the Dealer Manager, the Depositary, the Information Agent or any
other person will be under any duty to give notification of any defect or
irregularity in tenders or incur any liability for failure to give any such
notification.
4. Withdrawal Rights. Tenders of Shares made pursuant to the Offer may
be withdrawn at any time prior to the Expiration Date. Thereafter, such
tenders are irrevocable, except that they may be withdrawn after January 7,
1996 unless theretofore accepted for payment as provided in this Offer to
Purchase. If Purchaser extends the period of time during which the Offer is
open, is delayed in accepting for payment or paying for Shares or is unable to
accept for payment or pay for Shares pursuant to the Offer for any reason,
then, without prejudice to Purchaser's rights under the Offer, the Depositary
may, on behalf of Purchaser, retain all Shares tendered, and such Shares may
not be withdrawn except as otherwise provided in this Section 4.
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 set forth on the back cover of this Offer to Purchase and must
specify the name of the person who tendered the Shares to be withdrawn and the
number of Shares to be withdrawn and the name of the registered holder of
Shares, if different from that of the person who tendered such Shares. If the
Shares to be withdrawn have been delivered to the Depositary, a signed notice
of withdrawal with (except in the case of Shares tendered by an Eligible
Institution) signatures guaranteed by an Eligible Institution must be
submitted prior to the release of such Shares. In addition, such notice must
specify, in the case of Shares tendered by delivery of certificates, the name
of the registered holder (if different from that of the tendering shareholder)
and the serial numbers shown on the particular certificates evidencing the
Shares to be withdrawn or, in the case of Shares tendered by book-entry
transfer, the name and number of the account at one of the Book-Entry Transfer
Facilities to be credited with the withdrawn Shares. Withdrawals may not be
rescinded, and Shares withdrawn will thereafter be deemed not validly tendered
for purposes of the Offer. However, withdrawn Shares may be retendered by
again following one of the procedures described in Section 3 at any time prior
to the Expiration Date.
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, which determination shall be final and binding. None of
Purchaser, the Dealer Manager, the Depositary, the Information Agent or any
other person will be under any duty to give notification of any defect or
irregularity in any notice of withdrawal or incur any liability for failure to
give any such notification.
5. Certain Tax Considerations. Sales of Shares by shareholders of the
Company pursuant to the Offer will be taxable transactions for federal income
tax purposes and may also be taxable transactions under applicable state and
local and other tax laws.
In general, a shareholder will recognize gain or loss equal to the
difference between the tax basis of his or her Shares and the amount of cash
received in exchange therefor. Such gain or loss will be capital gain or loss
if the Shares are capital assets in the hands of the shareholder and will be
long-term gain or loss if the holding period for the Shares is more than one
year as of the date of the sale of such Shares. Legislation that would reduce
the tax rate on long-term capital gain is now pending before the United States
Congress but its enactment is uncertain.
The foregoing discussion may not apply to shareholders who acquired their
Shares pursuant to the exercise of stock options or other compensation
arrangements with the Company or who are not citizens or residents of the
United States or who are otherwise subject to special tax treatment under the
Internal Revenue Code of 1986, as amended.
THE FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL
INFORMATION ONLY AND IS BASED UPON PRESENT LAW. DUE TO THE INDIVIDUAL NATURE
OF TAX CONSEQUENCES, SHAREHOLDERS ARE URGED TO CONSULT THEIR TAX ADVISORS AS
TO THE SPECIFIC TAX CONSEQUENCES TO THEM OF THE OFFER, INCLUDING THE EFFECTS
OF APPLICABLE STATE, LOCAL OR OTHER TAX LAWS.
6. Price Range of Shares; Dividends. The Shares are traded in the
over-the-counter market and are quoted on the NASDAQ National Market System.
The following table sets forth for the periods indicated the high and low sale
prices per Share as reported on the NASDAQ National Market System, as reported
in the Company's Annual Report on Form 10-K for the year ended June 30, 1995
(the "Company 10-K") with respect to the fiscal years ended June 30, 1994 and
June 30, 1995 and thereafter as reported in published financial sources.
According to the Company 10-K, the Company has not paid cash dividends to
date.
High Low
------- ------
Fiscal Year Ended June 30, 1994
First Quarter $17 $ 8 1/2
Second Quarter 11 7 1/4
Third Quarter 13 1/2 8 3/4
Fourth Quarter 12 1/4 9 1/2
Fiscal Year Ended June 30, 1995
First Quarter 14 10
Second Quarter 15 1/2 7 1/4
Third Quarter 10 1/2 7 3/8
Fourth Quarter 10 3/4 7 3/4
Fiscal Year Ending June 30, 1996
First Quarter 21 3/4 8 3/8
Second Quarter (through November 8, 1995) 41 7/8 18
On November 3, 1995, the last full day of trading before public
announcement of the execution of the Merger Agreement, the reported closing
sales price per Share on the NASDAQ National Market System was $34 1/2. On
November 8, 1995, the last full day of trading prior to commencement of the
Offer, the reported closing sales price per Share on the NASDAQ National
Market System was $41.
SHAREHOLDERS ARE URGED TO OBTAIN CURRENT MARKET QUOTATIONS FOR THE
SHARES.
7. Certain Information Concerning the Company. The Company is a
Delaware corporation with its principal executive offices located at 8404
Esters Boulevard, Irving, Texas 75063.
According to the Company 10-K, the Company is principally engaged in
designing, manufacturing, marketing, and supporting NetWare-optimized
intelligent hubs, switches and network management products used in
client/server local area network systems.
The Company was organized on January 14, 1985 as a Texas corporation.
During fiscal 1993, NetWorth, Inc., a Texas corporation, was reincorporated in
the state of Delaware. NetWorth, Inc., a Texas corporation, was merged with
NetWorth Operating, Inc., a Delaware corporation formed in fiscal 1993, which
became the Texas corporation's successor. NetWorth Operating, Inc. is a
wholly owned subsidiary of NetWorth Inc., also a Delaware corporation formed
in fiscal 1993.
The following selected consolidated financial data relating to the
Company and its subsidiaries has been taken or derived from the audited
financial statements contained in the Company 10-K and the unaudited financial
statements contained in the Company's quarterly report on Form 10-Q for its
fiscal quarter ended September 30, 1995 (the "Company 10-Q"), and from
information provided by the Company. More comprehensive financial information
is included in such 10-K and 10-Q and the other documents filed by the Company
with the Securities and Exchange Commission (the "Commission"), and the
financial data set forth below is qualified in its entirety by reference to
such reports and other documents including the financial statements contained
therein. Such reports and other documents may be examined and copies may be
obtained from the offices of the Commission in the manner set forth below.
NETWORTH, INC.
SELECTED CONSOLIDATED FINANCIAL DATA
(In thousands, except per share amounts)
Three Months Ended,
September 30
Fiscal Year ended June 30, (unaudited)
------------------------- ------------------
1995 1994 1993 1995 1994
------- ------- --------- ------- --------
Income Statement Data
Sales.......................... $55,500 $48,615 $29,754 $17,693 $15,701
Gross profit................... 22,056 20,136 14,345 7,601 6,297
Non-recurring items (1)........ 24,655 550 -- -- --
Operating income (loss)........ (23,654) 2,239 526 1,547 1,318
Operating income without
non-recurring items.......... 1,001 2,789 526 1,547 1,318
Income (loss) before taxes..... (23,506) 2,608 1,061 1,678 1,116
Net income (loss).............. (22,890) 1,857 678 1,044 715
Net income (loss) per share.... (3.97) .37 .14 .13 .18
Common and equivalent shares... 5,760 5,052 4,872 7,918 3,906
Balance Sheet Data
Working capital................ $29,116 $36,361 $34,546 $30,498 $32,949
Total assets................... 45,632 48,730 39,016 51,231 46,844
Long-term debt................. 138 22,088 -- 93 17,957
Stockholders' equity........... 37,176 18,299 36,479 38,652 19,570
- -----------
(1) In 1995, includes acquired in-process research and development expense
of $21,628 and merger related expenses of $3,027, in each case arising in
connection with the acquisition by the Company of Network Resources
Corporation in March 1995. In 1994, represents provision for shareholder
litigation of $550.
The information concerning the Company contained herein has been taken
from or is based upon reports and other documents on file with the Commission
or otherwise publicly available, and information provided by the Company.
Although Purchaser does not have any knowledge that would indicate that any
statements contained herein based upon such reports, documents and information
are untrue, Purchaser does not take any responsibility for the accuracy or
completeness of the information contained in such reports and other documents
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 that
are unknown to Purchaser.
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934 (the "Exchange Act") and in accordance
therewith files periodic reports, proxy statements and other information with
the Commission relating to its business, financial condition and other
matters. The Company is required to disclose in such proxy statements certain
information, as of particular dates, concerning the Company's directors and
officers, their remuneration, stock options granted to them, the principal
holders of the Company's securities and any material interest of such persons
in transactions with the Company. Such reports, proxy statements and other
information may be inspected at the public reference facilities maintained by
the Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C.
20549 and should also be available for inspection and copying at the regional
offices of the Commission in New York (Jacob K. Javits Federal Building, 26
Federal Plaza, New York, New York 10278) and Chicago (Everett McKinley Dirksen
Building, 219 South Dearborn Street, Chicago, Illinois 60604). Copies of such
material can also be obtained from the Public Reference Section of the
Commission in Washington, D.C. 20549, at prescribed rates.
In the course of the discussions between representatives of Parent and
the Company (see Section 10) certain projections of future operating
performance were furnished to Parent's representatives. Set forth below is a
summary of such projections. The projections should be read together with the
financial statements of the Company referred to herein.
NETWORTH, INC.
PROJECTED FINANCIAL INFORMATION
(In thousands, except per share amounts)
Fiscal Year
ending June 30,
-------------------
1996 1997
-------- ---------
Sales........................................ $ 85,193 $135,000
Costs and expenses........................... 75,415 120,000
Income from operations before income taxes... 9,778 15,000
Net income................................... 6,066 9,600
Net income per share......................... .73 1.07
THE FOREGOING PROJECTIONS WERE NOT PREPARED WITH A VIEW TO PUBLIC
DISCLOSURE OR COMPLIANCE WITH PUBLISHED GUIDELINES OF THE COMMISSION OR THE
GUIDELINES ESTABLISHED BY THE AMERICAN INSTITUTE OF CERTIFIED PUBLIC
ACCOUNTANTS REGARDING PROJECTIONS, AND ARE BASED UPON A VARIETY OF ASSUMPTIONS
RELATING TO THE BUSINESSES OF THE COMPANY WHICH MAY NOT BE REALIZED AND ARE
SUBJECT TO SIGNIFICANT UNCERTAINTIES AND CONTINGENCIES, MANY OF WHICH ARE
BEYOND THE CONTROL OF THE COMPANY. THERE CAN BE NO ASSURANCE THAT THE
PROJECTIONS WILL BE REALIZED, AND ACTUAL RESULTS MAY VARY MATERIALLY FROM
THOSE SHOWN.
According to the Company, the projections were based principally on the
Company's historical growth rate, industry projections of the growth in the
overall market for Fast Ethernet products, and assumptions concerning market
acceptance of new Fast Ethernet products and a switching product to be
introduced by the Company during the periods presented. The projections were
prepared by the Company on a stand-alone basis and do not reflect any effect
from the Offer and the Merger, including any potential adverse effect on the
Company's OEM relationships.
8. Certain Information Concerning Purchaser and Parent. Purchaser is a
Delaware corporation incorporated on November 2, 1995 and to date has engaged
in no activities other than those incident to its formation, the execution and
delivery of the Merger Agreement and the commencement of the Offer. Purchaser
is a wholly-owned subsidiary of Parent. The principal executive offices of
Purchaser are located at 20555 SH 249, Houston, Texas 77070.
Parent is a Delaware corporation. It is principally engaged in
designing, developing, manufacturing, and marketing personal computers, PC
systems, and related products for sale primarily to business, home, government
and education customers. The principal executive offices of Parent are
located at 20555 SH 249, Houston, Texas 77070. The name, business address,
principal occupation or employment, five year employment history and
citizenship of each director and executive officer of Parent and Purchaser are
set forth on Schedule I hereto.
The following selected consolidated financial data relating to Parent and
its subsidiaries has been taken or derived from the audited financial
statements contained in Parent's Annual Report on Form 10-K for the year ended
December 31, 1994. More comprehensive financial information is included in
such Annual Report and the other documents filed by Parent with the
Commission, and the financial data set forth below is qualified in its
entirety by reference to such reports and other documents including the
financial statements contained therein. Such reports and other documents may
be examined and copies may be obtained from the offices of the Commission in
the same manner as set forth with respect to the Company in Section 7.
COMPAQ COMPUTER CORPORATION
SELECTED CONSOLIDATED FINANCIAL DATA
(In millions, except per share amounts)
Year ended December 31,
------------------------
1994 1993 1992
------- ------- -------
Income Statement Data
Sales...................................... $10,866 $ 7,191 $ 4,100
Gross margin............................... 2,727 1,698 1,195
Research and development costs............. 226 169 173
Net income................................. 867 462 213
Earnings per share(1)...................... 3.21 1.78 .84
Shares used to compute earnings per share.. 270.1 258.9 254.1
Balance Sheet Data
Current assets............................. $ 5,158 $ 3,291 $ 2,318
Total assets............................... 6,166 4,084 3,142
Current liabilities........................ 2,013 1,244 960
Long-term debt............................. 300 -- --
Stockholders' equity....................... 3,674 2,654 2,006
- ---------
(1) Assuming full dilution.
Parent is subject to the informational requirements of the Exchange Act
and in accordance therewith files periodic reports, proxy statements and other
information with the Commission relating to its business, financial condition
and other matters. Parent is required to disclose in such proxy statements
certain information, as of particular dates, concerning its directors and
officers, their remuneration, stock options granted to them, the principal
holders of its securities and any material interests of such persons in
transactions with Parent. Such reports, proxy statements and other
information should be available for inspection and copying at the offices of
the Commission in the same manner as set forth with respect to the Company in
Section 7. Such material should also be available for inspection at the
library of the New York Stock Exchange, 20 Broad Street, New York, New York
10005.
9. Source and Amount of Funds. The total amount of funds required by
Purchaser to purchase Shares pursuant to the Offer and to pay related fees and
expenses is estimated to be approximately $380 million. Purchaser will obtain
such funds from its general corporate funds and through borrowings from
various commercial banks, if needed.
Purchaser has entered into two credit agreements dated October 31, 1995
with a consortium of banks, with Bank of America as agent and Citibank, N.A.
and NationsBank Texas, N.A. as co-agents, pursuant to which the banks have
committed to provide revolving loans in an aggregate amount of $1.25 billion
for general corporate purposes (the "Credit Agreements"). As of November 9,
1995, no indebtedness is outstanding under the Credit Agreements.
The Credit Agreements provide for borrowings at stated rates based on:
(i) the Base Rate (as defined in the Credit Agreements), (ii) the Adjusted CD
Rate (as defined in the Credit Agreements) plus a margin (ranging from .20%
to .325%) based on the aggregate outstanding principal amount of revolving
loans, or (iii) the Adjusted London Interbank Offered Rate (as defined in
the Credit Agreements) plus a margin (ranging from .20% to .325%) based on
the aggregate outstanding principal amount of revolving loans. The
existing Credit Agreements mature as follows: (i) $250 million on October
30, 1996 and (ii) $1 billion on October 31, 2000. Under the Credit
Agreements Parent pays a fee of .08 to .10% per annum on the average daily
amount by which each bank's commitment limit exceeds the aggregate
outstanding principal amount of such bank's revolving loans.
The Credit Agreements contain representations and warranties customary to
credit facilities of this nature, including valid corporate existence, the
absence of any required governmental or regulatory authorizations or
approvals, authorizations, accurate financial statements, use of proceeds,
employee matters, environmental conditions and material adverse change. The
Credit Agreements also contain certain covenants relating to, among other
things, compliance with laws and reporting requirements, use of proceeds and
maintenance of net worth.
In the event there are borrowings under the Credit Agreements described
above, Parent believes they will be repaid with funds generated internally by
Parent or from other sources.
A copy of each Credit Agreement is filed as an exhibit to Purchaser's
Tender Offer Statement on Schedule 14D-1 (the "Schedule 14D-1"). Reference is
made to such exhibit for a more complete description of the terms and
conditions of the Credit Agreements.
10. Background of the Offer; Past Contacts, Transactions or Negotiations
with the Company; Merger Agreement; Other Arrangements.
Background of the Offer
Throughout 1995, Parent evaluated possible business relationships with
companies with a strong presence in the ethernet hub market. During this time
period, McKinsey & Company, Inc. and Morgan Stanley & Co. Incorporated
("Morgan Stanley") assisted Parent in evaluating such companies.
In May 1995, Parent was contacted by representatives of the Company to
explore a possible OEM relationship. On May 9, 1995, John McHale, President
and Chief Executive Officer of the Company, and other senior management of the
Company met with representatives of Parent to discuss such business
opportunities. Parent and Company did not pursue any business relationship at
that time.
On September 19, 1995, representatives of Parent met with representatives
of the Company to evaluate the Company's current products and discuss its
plans for the future. Also on September 19, 1995, Parent and the Company
executed a confidentiality agreement, pursuant to which Parent agreed to
maintain the confidentiality of certain non-public information that was
received from the Company in connection with a possible OEM relationship.
Parent began considering whether the Company would be a possible acquisition
candidate and began to conduct a due diligence investigation of the Company.
On September 29, 1995, Doug Pushard, Vice President of Internetworking of
Parent, and Ed Olkkola, Director of Business Development of Parent, presented
an analysis of the Company at a regularly scheduled meeting of the Board of
Directors of Parent. The Board of Directors of Parent authorized management to
continue to explore this transaction.
On October 12, 1995, Gary Stimac, Senior Vice President and General
Manager of the Systems Division of Parent, and Mr. Pushard met with Mr.
McHale to discuss the possibility of a business combination. On October 23
and 24, 1995, representatives of Parent and Morgan Stanley met with
representatives of the Company and Cowen & Company ("Cowen"), the financial
advisors retained by the Company, to continue Parent's due diligence
investigation.
On October 26, 1995, the Board of Directors of Parent met to consider a
possible acquisition of the Company. Following a presentation by Mr. Pushard
and representatives of Morgan Stanley, the Board approved an acquisition of
the Company subject to certain conditions, including receipt of an opinion of
Morgan Stanley as to the fairness of the transaction to Parent from a
financial point of view. The Board authorized Eckhard Pfeiffer, the Chief
Executive Officer and President of Parent, to negotiate the final terms of the
transaction and definitive agreements, subject to certain limitations.
On November 2, 1995, representatives of the Parent and Morgan Stanley met
with representatives of the Company and Cowen to begin negotiating the terms
of Parent's proposed acquisition of the Company.
On Friday, November 3, 1995, the parties agreed on an offer price of
$42.00 per Share, subject to successful negotiation of the Merger Agreement.
During the following weekend the parties and their counsel continued to
negotiate the specific provisions of the Merger Agreement. On November 5,
1995, the Board of Directors of the Company approved the transaction, and the
parties executed the Merger Agreement.
The Merger Agreement
The following is a summary of the Merger Agreement, a copy of which is
filed as an Exhibit to Purchaser's Schedule 14D-1. Such summary is qualified
in its entirety by reference to the Merger Agreement.
The Offer. The Merger Agreement provides for the making of the Offer. The
obligation of Purchaser to accept for payment or pay for Shares tendered
pursuant to the Offer is subject to the satisfaction of the Minimum Condition
and certain other conditions that are described in Section 15. Purchaser has
agreed that no change in the Offer may be made which changes the form of
consideration to be paid or decreases the price per Share or the number of
Shares sought in the Offer or which imposes conditions to the Offer in
addition to the Minimum Condition and those conditions described in Section 15
or amends such conditions in a manner adverse to the Company.
Recommendation. The Board of Directors of the Company has (i) determined
that the Merger Agreement and the transactions contemplated thereby, including
the Offer and the Merger, are fair to and in the best interests of the
Company's stockholders, (ii) approved the Merger Agreement and the
transactions contemplated thereby, including the Offer and the Merger and
(iii) resolved, subject to their fiduciary duties as advised by counsel, to
recommend acceptance of the Offer and approval and adoption of the Merger
Agreement and the Merger by the Company's shareholders.
The Merger. The Merger Agreement provides that, upon the terms and
subject to the conditions thereof, at the time at which the Company and the
Purchaser file a certificate of merger with the Secretary of State of the
State of Delaware and make all other filings or recordings required by
Delaware Law in connection with the Merger, Purchaser shall be merged with and
into the Company in accordance with Delaware Law. The Merger shall become
effective at such time as the Certificate of Merger is duly filed with the
Secretary of State of the State of Delaware or at such later time as is
specified in the Certificate of Merger (the "Effective Time"). As a result of
the Merger, the separate corporate existence of the Purchaser will cease and
the Company will be the surviving corporation (the "Surviving Corporation").
At the Effective Time, (i) each Share held in the treasury of the Company
or owned by Parent or any subsidiary thereof (including Purchaser) shall be
cancelled, and no payment shall be made with respect thereto; (ii) each share
of common stock of Purchaser then outstanding shall be converted into and
become one share of common stock of the Surviving Corporation; and (iii) each
Share outstanding immediately prior to the Effective Time shall, except as
otherwise provided in (i) above and except Shares as to which appraisal rights
have been exercised (see Section 16), be converted into the right to receive
$42.00 per Share in cash without interest.
The Merger Agreement provides that, at the Effective Time, the
certificate of incorporation of Purchaser will be the certificate of
incorporation of the Surviving Corporation, except that the name of the
Surviving Corporation shall be changed to "NetWorth, Inc."
Agreements of Parent, Purchaser and the Company. The Merger Agreement
provides that effective upon acceptance of payment for any Shares pursuant to
the Offer, Parent shall be entitled to designate the number of directors,
rounded up to the next whole number, on the Company's Board of Directors that
equals the product of (i) the total number of directors on the Board of
Directors (giving effect to the election of any additional directors pursuant
to this paragraph) and (ii) the percentage that the number of Shares owned by
Parent (including Shares accepted for payment) bears to the total number of
Shares outstanding, and the Company shall take all action necessary to cause
the Parent's designees to be elected or appointed to the Board of Directors,
including, without limitation, increasing the number of directors, and seeking
and accepting resignations of its incumbent directors.
If Parent exercises its right to designate directors, Parent currently
intends to designate one or more of the following persons to serve as
directors of the Company: Hugh Barnes, Doug Pushard, John T. Rose, David J.
Schempf, Robert W. Stearns, Gary Stimac, and Daryl J. White. The foregoing
information and certain other information contained in this Offer to Purchase
and Schedule I hereto and in the Company's Solicitation/Recommendation
Statement on Schedule 14D-9 (the "Schedule 14D-9") being mailed to
stockholders herewith are being provided in accordance with the requirements
of Section 14(f) of the Exchange Act and Rule 14f-1 thereunder.
Pursuant to the Merger Agreement, the Company shall cause a meeting of
its shareholders (the "Company Stockholder Meeting") to be duly called and
held as soon as reasonably practicable for the purpose of voting on the
approval and adoption of the Merger Agreement and the Merger, unless a vote of
shareholders by the Company is not required by Delaware Law.
The Merger Agreement provides that the Company will promptly prepare and
file with the Commission under the Exchange Act a proxy statement relating to
the Company Stockholder Meeting (the "Proxy Statement"). The Company has
agreed to use its best efforts to obtain the necessary approvals by its
shareholders of the Merger Agreement and the transactions contemplated
thereby. Parent has agreed to vote all Shares then beneficially owned by it
in favor of adoption of the Merger Agreement.
The Company has agreed that, prior to the Effective Time, the Company
will not adopt or propose any change in its certificate of incorporation or
bylaws; in addition, the Company has agreed that, prior to the Effective Time,
the Company will not, and will not permit any of its subsidiaries (each, a
"Subsidiary") to (a) merge or consolidate with any other Person or acquire a
material amount of assets of any other Person (other than purchases of
materials or products in the ordinary course of business consistent with past
practice); (b) sell, lease, license or otherwise dispose of any material
assets or property to any Person except (i) pursuant to existing contracts or
commitments and (ii) in the ordinary course consistent with past practice;
(c) settle or compromise any suit or claims or threatened suit or claim
relating to the transactions contemplated under the Merger Agreement; (d)
without the prior written consent of Parent, enter into any agreement or
amendment to any agreement with International Business Machines Corporation
("IBM") or UB Networks; (e) agree or commit to do any of the foregoing; or
(f) take or agree or commit to take any action that would make any
representation and warranty of the Company under the Merger Agreement
inaccurate in any material respect at, or as of any time prior to, the
Effective Time.
Pursuant to the Merger Agreement, the Company has agreed that from the
date of the Merger Agreement until the termination thereof, the Company and
the Subsidiaries and the officers, directors, employees or other agents of the
Company and the Subsidiaries will not directly or indirectly, (i) solicit,
initiate or (except as permitted by (ii) below) encourage any Acquisition
Proposal (as defined below) or (ii) except as otherwise required by the
fiduciary duties of the Board of Directors as advised by counsel, engage in
negotiations with, or disclose any non-public information relating to the
Company or any Subsidiary or afford access to the properties, books or records
of the Company or any Subsidiary to, any Person. The Company has agreed to
notify Parent promptly after receipt of any Acquisition Proposal or any
request for non-public information relating to the Company or any Subsidiary
or for access to the properties, books or records of the Company or any
Subsidiary by any Person that may be considering making, or has made, an
Acquisition Proposal and to keep Parent fully informed of the status and
details of any such Acquisition Proposal or request. "Acquisition Proposal"
means any offer or proposal for a merger or other business combination
involving the Company or any Subsidiary or the acquisition of any equity
interest in, or a substantial portion of the assets of, the Company or any
Subsidiary, other than the transactions contemplated by the Merger Agreement.
Parent, Purchaser and the Company have agreed that for five years after
the Effective Time, Parent will cause the Surviving Corporation to indemnify
and hold harmless the present and former officers and directors of the Company
in respect of acts or omissions occurring up to and including the Effective
Time to the extent provided under the Company's certificate of incorporation
and bylaws in effect on the date of the Merger Agreement, subject to any
limitation imposed from time to time under applicable law. In addition, Parent
has agreed that for five years after the Effective Time, Parent will cause the
Surviving Corporation to use its best efforts to provide officers' and
directors' liability insurance in respect of acts or omissions occurring up to
and including the Effective Time covering each such person currently covered
by the Company's officers' and directors' liability insurance policy on terms
with respect to coverage and amount no less favorable than those of such
policy in effect on the date of the Merger Agreement. Parent will not be
obligated to pay premiums in excess of the amount per annum the Company paid
in its last full fiscal year, provided that Parent will guarantee the
obligations of the Surviving Company up to an aggregate amount not in excess
of the Company's net worth immediately prior to the consummation of the Merger
(less any payments made by the Surviving Corporation pursuant to this
paragraph).
Representations and Warranties. The Merger Agreement contains customary
representations and warranties of the parties thereto including
representations by the Company as to its corporate existence and power,
corporate authorizations, governmental authorizations, non-contravention,
capitalization, Subsidiaries, Commission filings, financial statements,
disclosure documents, absence of certain changes, absence of undisclosed
liabilities, litigation, taxes, employee matters, compliance with laws,
finders' fees, patents and other proprietary rights, and environmental
matters.
Conditions to the Merger. The obligations of the Company, Parent and
Purchaser to consummate the Merger are subject to the satisfaction of the
following conditions: (i) if required by Delaware Law, the adoption by the
shareholders of the Company of the Merger Agreement in accordance with such
law; (ii) any applicable waiting period under the HSR Act relating to the
Merger shall have expired or been terminated; (iii) no provision of any
applicable law or regulation and no judgment, injunction, order or decree
which is in effect at the Effective Time shall prohibit the consummation of
the Merger; and (iv) Purchaser shall have purchased Shares pursuant to the
Offer; provided that the foregoing clause (iv) will not be a condition to the
obligations of Parent and Purchaser if Purchaser's failure to purchase Shares
violates the terms of the Offer.
Termination. The Merger Agreement may be terminated and the Merger may
be abandoned at any time prior to the Effective Time, notwithstanding any
approval of the Merger Agreement by the shareholders of the Company, (a) by
mutual written consent of the Company and Parent; (b) by either the Company
or Parent, if the offer has not been consummated by February 29, 1996; (c) by
either the Company or Parent if there shall be any law or regulation that
makes consummation of the Merger illegal or otherwise prohibited or if any
judgment, injunction, order or decree enjoining Parent or the Company from
consummating the Merger is entered and such judgment, injunction, order or
decree shall become final and nonappealable; (d) by the Company if the Company
shall have entered into, or shall have publicly announced its intention to
enter into, an agreement or an agreement in principle with respect to any
Acquisition Proposal which the Board of Directors of the Company has
determined is more favorable to the Company's shareholders than the
transactions contemplated by the Merger Agreement, or the Board of Directors
of the Company shall have withdrawn or materially modified in any manner
adverse to Parent its approval or recommendation of the Offer or the Merger;
or (e) by the Parent if (i) the Company shall have entered into, or shall have
publicly announced its intention to enter into, an agreement or an agreement
in principle with respect to any Acquisition Proposal which the Board of
Directors of the Company has determined is more favorable to the Company's
shareholders than the transactions contemplated by the Merger Agreement, or
the Board of Directors of the Company shall have withdrawn or materially
modified in any manner adverse to Parent its approval or recommendation of the
Offer or the Merger; (ii) any person or group (as defined in Section 13(d)(3)
of the Exchange Act) (other than Parent, Purchaser or any affiliate thereof)
shall have become the beneficial owner (as defined in Rule 13d-3 promulgated
under the Exchange Act) of at least a majority of the outstanding Shares; or
(iii) the failure to consummate the Offer by February 29, 1996 as a result of
the Company's breach or failure to perform in any material respect any of its
covenants or agreements under the Merger Agreement. If the Merger Agreement
is terminated, the Merger Agreement will become void and of no effect with no
liability on the part of the Company, Parent or Purchaser other than
obligations of the Company under certain provisions of the Merger Agreement to
pay certain fees to Parent or certain expenses of Parent (as described below)
and other than obligations of Parent under certain provisions of the Merger
Agreement to pay certain fees to the Company (as described below).
Fees and Expenses. The Company has agreed in the Merger Agreement that
if the Merger Agreement is terminated as a result of the occurrence of any
event described in clause (e) under "Termination" above, the Company will pay
to Parent, within two business days following such event, a fee equal to $10
million in cash.
The Company has agreed to pay Parent an amount in immediately available
funds equal to Parent's direct out-of-pocket expenses in connection with the
transactions contemplated by the Merger Agreement but not in excess of $5
million promptly, but in no event later than two business days, after the
termination of the Merger Agreement pursuant to the provisions described in
clause (b) under "Termination" above, where the failure to consummate the
Offer resulted from any of the representations or warranties of the Company
set forth in the Merger Agreement not being true in any material respect as of
the date of the Merger Agreement.
Parent has agreed to pay Company a fee in immediately available funds
equal to $10 million promptly, but in no event later than two business days,
after the termination of the Merger Agreement pursuant to the provisions
described in clause (b) under "Termination" above, where the failure to
consummate the Offer resulted from Parent's breach or failure to perform in
any material respect any of its covenants or agreements under the Merger
Agreement.
Except as described in the preceding paragraphs, the Merger Agreement
provides that the Company, Parent and Purchaser shall each bear all expenses
incurred by it in connection with the Merger Agreement and the transactions
contemplated thereby.
Amendment and Waivers. Any provision of the Merger Agreement may be
amended or waived prior to the Effective Time if, and only if, such amendment
or waiver is in writing and signed, and (i) in the case of an amendment, by
the Company, Parent and Purchaser or (ii) in the case of a waiver, by the
party against whom the waiver is to be effective. After the adoption of the
Merger Agreement by the shareholders of the Company, no such amendment or
waiver shall alter or change (i) the amount or kind of consideration to be
received in exchange for any shares of capital stock of the Company, (ii) any
term of the Certificate of Incorporation of the Surviving Corporation, or
(iii) any of the terms and conditions of the Merger Agreement if such change
would adversely affect the holders of any shares of capital stock of the
Company.
Other Arrangements
Parent has expressed to representatives of the Company that, following
consummation of the Offer and the Merger, Parent intends to grant to certain
officers and employees of the Company options to purchase common stock of
Parent, in amounts and on terms determined in accordance with Parent's
customary practices as applicable to similarly situated employees of Parent.
Parent has reached an oral understanding with Paul Zito, Chief Financial
Officer and a Director of the Company, pursuant to which, in lieu of Mr.
Zito's existing severance arrangements with the Company, Mr. Zito would agree
to remain in his current position until at least the end of the calendar month
following consummation of the Merger and, upon Mr. Zito's departure, Parent
will pay Mr. Zito the sum of approximately $200,000.
11. Purpose of the Offer; Plans for the Company. The purpose of the
Offer is to acquire control of, and the entire equity interest in, the
Company. If the Purchaser acquires Shares pursuant to the Offer, Purchaser
currently intends to promptly exercise its rights under the Merger Agreement
to appoint a number of the members of the Board of Directors proportionate to
its share ownership. Purchaser currently intends, as soon as practicable after
consummation of the Offer, to consummate the Merger and the acquisition of the
entire equity interest in the Company.
In connection with its consideration of the Offer, Purchaser has made a
preliminary review, and will continue to review, on the basis of available
information, various possible business strategies that it might consider in
the event that it acquires control of the Company. Such strategies are
expected to include the integration of certain assets or lines of business of
the Company with those of Purchaser. If Purchaser acquires Shares pursuant to
the Offer then depending upon the number of Shares so acquired, Purchaser
intends to conduct a detailed review of the Company and its assets,
businesses, operations, properties, policies, corporate structure,
capitalization and the responsibilities and qualifications of the Company's
management and personnel and consider what, if any, changes Purchaser deems
desirable in light of the circumstances which then exist.
Except as described above or elsewhere in this Offer to Purchase,
Purchaser has no present plans or proposals that would relate to or result in
an extraordinary corporate transaction involving the Company or any
Subsidiaries (such as a merger, reorganization, liquidation, relocation of any
operations or sale or other transfer of a material amount of assets), any
change in the Company's Board of Directors or management, any material change
in the Company's capitalization or dividend policy or any other material
change in the Company's corporate structure or business.
12. Effect of the Offer on the Market for Shares; NASDAQ Quotations;
Registration under the Exchange Act. The purchase of Shares pursuant to the
Offer will reduce the number of Shares that might otherwise trade publicly and
may reduce the number of holders of Shares, which could adversely affect the
liquidity and market value of the remaining Shares held by shareholders other
than Purchaser. 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, the Shares or
whether such reduction would cause future market prices to be greater or less
than the Offer price.
Depending upon the number of Shares purchased pursuant to the Offer, the
Shares may no longer meet the standards for continued inclusion in the NASDAQ
National Market System. If, as a result of the purchase of Shares pursuant to
the Offer, the Shares no longer meet the criteria for continuing inclusion in
the NASDAQ National Market System, the market for the Shares could be
adversely affected. According to NASDAQ's published guidelines, the Shares
would not meet the criteria for continued inclusion in the NASDAQ's National
Market System if, among other things, the number of publicly-held Shares were
less than 200,000, the aggregate market value of the publicly-held Shares were
less than $2,000,000 or there were less than two market makers for the Shares.
If these standards were not met, quotations might continue to be published in
the over-the-counter "additional list" or one of the "local lists" unless, as
set forth in NASDAQ's published guidelines, the number of publicly-held Shares
(excluding Shares held by officers, directors and beneficial owners of more
than 10% of the Shares) were less than 100,000, there were fewer than 300
holders in total, or there were not at least one market maker for the Shares.
If the Shares are no longer eligible for NASDAQ quotation, quotations might
still be available from other sources.
The Shares are currently "margin securities" under the regulations 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. Depending upon factors
similar to those described above regarding listing and market quotations, the
Shares might no longer constitute "margin securities" for the purposes of the
Federal Reserve Board's margin regulations and, therefore, could no longer be
used as collateral for loans made by brokers.
The Shares are currently registered under the Exchange Act. Such
registration may be terminated upon application of the Company to the
Commission if the Shares are neither listed on a national securities exchange
nor held by 300 or more holders of record. 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 Shares and to the
Commission and would make certain of the provisions of the Exchange Act, such
as the short-swing profit recovery provisions of Section 16(b), the
requirement of furnishing a proxy statement pursuant to Section 14(a) in
connection with a shareholder's meeting and the related requirement of an
annual report to shareholders 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 such securities pursuant to Rule 144 promulgated under
the Securities Act of 1933 (the "Securities Act"). If registration of the
Shares under the Exchange Act were terminated, the Shares would no longer be
"margin securities" or eligible for listing or NASDAQ reporting. Purchaser
intends to seek to cause the Company to terminate registration of the Shares
under the Exchange Act as soon after consummation of the Offer as the
requirements for termination of registration of the Shares are met.
13. Dividends and Distributions. If on or after November 5, 1995, the
Company should (i) split, combine or otherwise change the Shares or its
capitalization, (ii) acquire or otherwise cause a reduction in the number of
outstanding Shares or (iii) issue or sell any additional Shares (other than
Shares issued pursuant to and in accordance with the terms in effect on
October 30, 1995 of employee stock options, non-executive stock options,
options and warrants held by UB Networks outstanding on such date), shares of
any other class or series of capital stock, other voting securities or any
securities convertible into, or options, rights, or warrants, conditional or
otherwise, to acquire, any of the foregoing, then, without prejudice to
Purchaser's rights under Section 15, Purchaser may, in its sole discretion,
make such adjustments in the purchase price and other terms of the Offer as it
deems appropriate including the number or type of securities to be purchased.
If, on or after November 5, 1995, the Company should declare or pay any
dividend on the Shares or any distribution with respect to the Shares
(including the issuance of additional Shares or other securities or rights to
purchase of any securities) that is payable or distributable to shareholders
of record on a date prior to the transfer to the name of Purchaser or its
nominee or transferee on the Company's stock transfer records of the Shares
purchased pursuant to the Offer, then, without prejudice to Purchaser's rights
under Section 15, (i) the purchase price per Share payable by Purchaser
pursuant to the Offer will be reduced to the extent of any such cash dividend
or distribution and (ii) the whole of any such non-cash dividend or
distribution to be received by the tendering shareholders will (a) be received
and held by the tendering shareholders for the account of Purchaser and will
be required to be promptly remitted and transferred by each tendering
shareholder to the Depositary for the account of Purchaser, accompanied by
appropriate documentation of transfer, or (b) at the direction of Purchaser,
be exercised for the benefit of Purchaser, in which case the proceeds of such
exercise will promptly be remitted to Purchaser. Pending such remittance and
subject to applicable law, Purchaser will be entitled to all rights and
privileges as owner of any such non-cash dividend or distribution or proceeds
thereof and may withhold the entire purchase price or deduct from the purchase
price the amount or value thereof, as determined by Purchaser in its sole
discretion.
14. Extension of Tender Period; Termination; Amendment. Purchaser
reserves the right, at any time or from time to time, in its sole discretion
and regardless of whether or not any of the conditions specified in Section 15
shall have been satisfied, (i) to extend the period of time during which the
Offer is open by giving oral or written notice of such extension to the
Depositary and by making a public announcement of such extension or (ii) to
amend the Offer in any respect by making a public announcement of such
amendment. There can be no assurance that Purchaser will exercise its right
to extend or amend the Offer.
If Purchaser decreases the percentage of Shares being sought or increases
or decreases the consideration to be paid for Shares pursuant to the Offer and
the Offer is scheduled to expire at any time before the expiration of a period
of 10 business days from, and including, the date that notice of such increase
or decrease is first published, sent or given in the manner specified below,
the Offer will be extended until the expiration of such period of 10 business
days. If Purchaser makes a material change in the terms of the Offer (other
than a change in price or percentage of securities sought) or in the
information concerning the Offer, or waives a material condition of the Offer,
Purchaser will extend the Offer, if required by applicable law, for a period
sufficient to allow shareholders to consider the amended terms of the Offer.
In a published release, the Commission has stated that in its view an offer
must remain open for a minimum period of time following a material change in
the terms of such offer and that the waiver of a condition such as the Minimum
Condition is a material change in the terms of an offer. The release states
that an offer should remain open for a minimum of five business days from the
date the material change is first published, sent or given to security
holders, and that if material changes are made with respect to information
that approaches the significance of price and share levels, a minimum of 10
business days may be required to allow adequate dissemination and investor
response. The term "business day" shall mean any day other than Saturday,
Sunday or a federal holiday and shall consist of the time period from 12:01
A.M. through 12:00 Midnight, New York City time.
Purchaser also reserves the right, in its sole discretion, in the event
any of the conditions specified in Section 15 shall not have been satisfied
and so long as Shares have not theretofore been accepted for payment, to delay
(except as otherwise required by applicable law) acceptance for payment of or
payment for Shares or to terminate the Offer and not accept for payment or pay
for Shares.
If Purchaser extends the period of time during which the Offer is open,
is delayed in accepting for payment or paying for Shares or is unable to
accept for payment or pay for Shares pursuant to the Offer for any reason,
then, without prejudice to Purchaser's rights under the Offer, the Depositary
may, on behalf of Purchaser, retain all Shares tendered, and such Shares may
not be withdrawn except as otherwise provided in Section 4. The reservation by
Purchaser of the right to delay acceptance for payment of or payment for
Shares is subject to applicable law, which requires that Purchaser pay the
consideration offered or return the Shares deposited by or on behalf of
shareholders promptly after the termination or withdrawal of the Offer.
Any extension, termination or amendment of the Offer will be followed as
promptly as practicable by a public announcement thereof. Without limiting
the manner in which Purchaser may choose to make any public announcement,
Purchaser will have no obligation (except as otherwise required by applicable
law) to publish, advertise or otherwise communicate any such public
announcement other than by making a release to the Dow Jones News Service. In
the case of an extension of the Offer, Purchaser will make a public
announcement of such extension no later than 9:00 A.M., New York City time, on
the next business day after the previously scheduled Expiration Date.
15. Certain Conditions of the Offer. Notwithstanding any other provision
of the Offer, Purchaser shall not be required to accept for payment or pay for
any Shares, and, subject to the Merger Agreement, may terminate the Offer as
provided in Section 14, if (i) the Minimum Condition shall not have been
satisfied, (ii) the applicable waiting period under the HSR Act shall not have
expired or been terminated or (iii) at any time on or after November 5, 1995,
prior to the acceptance for payment of Shares, any of the following conditions
exist which, in the sole judgment of Parent in any such case, and regardless
of the circumstances (including any action or omission by Parent other than
any breach or violation of its covenants or agreements under the Merger
Agreement) giving rise to any such condition, makes it inadvisable to proceed
with such acceptance for payment or payment:
(a) there shall be instituted or pending any action or proceeding by
any government or governmental authority or agency, domestic or foreign or
domestic or foreign, before any court or governmental authority or agency,
domestic or foreign, (i) challenging or seeking to make illegal, to delay
materially or otherwise directly or indirectly to restrain or prohibit the
making of the Offer, the acceptance for payment of or payment for some of
or all the Shares pursuant to the Offer or the consummation of the Merger,
seeking to obtain material damages or otherwise directly or indirectly
relating to the transactions contemplated by the Offer or the Merger, (ii)
seeking to restrain or prohibit Parent's ownership or operation (or that
of its respective subsidiaries or affiliates) of all or any material
portion of the business or assets of the Company and its subsidiaries,
taken as a whole, or of Parent and its subsidiaries, taken as a whole, or
to compel Parent or any of its subsidiaries or affiliates to dispose of or
hold separate all or any material portion of the business or assets of the
Company and its subsidiaries, taken as a whole, or of Parent and its
subsidiaries, taken as a whole, (iii) seeking to impose or confirm
material limitations on the ability of Parent or any of its subsidiaries
or affiliates effectively to exercise full rights of ownership of the
Shares, including, without limitation, the right to vote any Shares
acquired or owned by Parent or any of its subsidiaries or affiliates on
all matters properly presented to the Company's shareholders, or (iv)
seeking to require divestiture by Parent or any of its subsidiaries or
affiliates of any Shares, or (v) that otherwise is reasonably likely (A)
to have a material adverse effect (a "Material Adverse Effect") on the
condition (financial or otherwise), business, assets or results of
operations of the Company and its subsidiaries taken as a whole, provided
that any changes in the existing OEM or distributor relationships or other
existing ordinary course business relationships (which shall in no event
include litigation) between the Company, on the one hand, and IBM or UB
Networks, on the other hand, shall not be considered in determining
whether there has been a Material Adverse Effect, or (B) to materially
adversely affect Parent and its subsidiaries, taken as a whole; or
(b) there shall be any action taken, or any statute, rule,
regulation, injunction, order or decree enacted, enforced, promulgated,
issued or deemed applicable to the Offer or the Merger, by any court,
government or governmental authority or agency, domestic or foreign other
than the application of the waiting period provisions of the HSR Act to
the Offer or the Merger, that is reasonably likely, directly or
indirectly, to result in any of the consequences referred to in clauses
(i) through (v) of paragraph (a) above; or
(c) any change shall have occurred or been threatened in the
business, assets, liabilities, financial condition, capitalization,
operations or results of operations of the Company or any of its
subsidiaries that has had or is reasonably likely to have a Material
Adverse Effect; or
(d) the Company shall have breached or failed to perform in any
material respect any of its covenants or agreements under the Merger
Agreement, or any of the representations and warranties of the Company set
forth in the Merger Agreement shall not be true in any material respect
when made or at any time prior to consummation of the Offer as if made at
and as of such time (except as to any representation or warranty which
speaks as of a specific date, which must be the true as of such a date);
or
(e) the Merger Agreement shall have been terminated in accordance
with its terms; or
(f) the Company shall have entered into, or shall have publicly
announced its intention to enter into, an agreement or an agreement in
principle with respect to any Acquisition Proposal which the Board of
Directors of the Company has determined is more favorable to the Company's
shareholders than the transactions contemplated by the Merger Agreement or
the Board of Directors of the Company shall have withdrawn or materially
modified in any manner adverse to Parent the Board's approval or
recommendation of the Offer or the Merger; or
(g) any person or group (as defined in Section 13 (d)(3) of the
Exchange Act) (other than Parent, Purchaser or any affiliate thereof)
shall have become the beneficial owner (as defined in Rule 13d-3
promulgated under the Exchange Act) of a majority of the outstanding
Shares.
The foregoing conditions are for the sole benefit of Parent and may be
asserted by Parent in its sole discretion or may be waived by Parent in its
sole discretion in whole at any time or in part from time to time. The
failure by Parent at any time to exercise its rights under any of the
foregoing conditions shall not be deemed a waiver of any such right; the
waiver of any such right with respect to particular facts and 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 which may
be asserted at any time or from time to time. Any determination by Parent
concerning the events described in this Section will be final and binding upon
all parties.
16. Certain Legal Matters; Regulatory Approvals.
General. Based on its examination of publicly available information filed
by the Company with the Commission and other publicly available information
concerning the Company, Purchaser is not aware of any governmental license or
regulatory permit that appears to be material to the Company's business that
might be adversely affected by Purchaser's acquisition of Shares as
contemplated herein or, except as set forth below, of any approval or other
action by any government or governmental administrative or regulatory
authority or agency, domestic or foreign, that would be required for the
acquisition or ownership of Shares by Purchaser as contemplated herein.
Should any such approval or other action be required, Purchaser currently
contemplates that, except as described below under "State Takeover Statutes",
such approval or other action will be sought. There can be no assurance that
any such approval or other action, if needed, would be obtained or would be
obtained without substantial conditions or that if such approvals were not
obtained or such other actions were not taken adverse consequences might not
result to the Company's business or certain parts of the Company's business
might not have to be disposed of, any of which could cause Purchaser to elect
to terminate the Offer without the purchase of Shares thereunder. Purchaser's
obligation under the Offer to accept for payment and pay for Shares is subject
to certain conditions. See Section 15.
State Takeover Statutes. A number of states have adopted laws which
purport, to varying degrees, to apply to attempts to acquire corporations that
are incorporated in, or which have substantial assets, shareholders, principal
executive offices or principal places of business or whose business operations
otherwise have substantial economic effects in, such states. The Company,
directly or through subsidiaries, conducts business in a number of states
throughout the United States, some of which have enacted such laws. Except as
described herein, Purchaser does not know whether any of these laws will, by
their terms, apply to the Offer or the Merger and the Company and has not
complied with any such laws. To the extent that certain provisions of these
laws purport to apply to the Offer or the Merger, Purchaser believes that
there are reasonable bases for contesting such laws.
In 1982, in Edgar v. MITE Corp., the Supreme Court of the United States
invalidated on constitutional grounds the Illinois Business Takeover Statute
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 held that the State of Indiana
could, as a matter of corporate law, constitutionally disqualify a potential
acquiror from voting shares of a target corporation without the prior approval
of the remaining shareholders where, among other things, the corporation is
incorporated in, and has a substantial number of shareholders in, the state.
Subsequently, in TLX Acquisition Corp. v. Telex Corp., a Federal District
Court in Oklahoma ruled that the Oklahoma statutes were unconstitutional
insofar as they apply 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.
If any government official or third party should seek to apply any state
takeover law to the Offer or the Merger, Purchaser will take such action as
then appears desirable, which action may include challenging the applicability
or validity of such statute in appropriate court proceedings. In the event it
is asserted that one or more state takeover statutes 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 or the Merger, Purchaser might
be required to file certain information with, or to receive approvals from,
the relevant state authorities or holders of Shares, and Purchaser might be
unable to accept for payment or pay for Shares tendered pursuant to the Offer,
or be delayed in continuing or consummating the Offer or the Merger. In such
case, Purchaser may not be obligated to accept for payment or pay for any
tendered Shares. See Section 15.
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 purchase of Shares pursuant to the Offer is subject to
such requirements.
Pursuant to the requirements of the HSR Act, Purchaser filed a
Notification and Report Form with respect to the Offer with the Antitrust
Division and the FTC on November 9, 1995. As a result, the waiting period
applicable to the purchase of Shares pursuant to the Offer is scheduled to
expire at 11:59 P.M., New York City time, on Friday, November 24, 1995.
However, prior to such time, the Antitrust Division or the FTC may extend the
waiting period by requesting additional information or documentary material
relevant to the Offer from Purchaser. If such a request is made, the waiting
period will be extended until 11:59 P.M., New York City time, on the tenth day
after substantial compliance by Purchaser with such request. Thereafter, such
waiting period can be extended only by court order.
A request is being made pursuant to the HSR Act for early termination of
the waiting period applicable to the Offer. There can be no assurance,
however, that the 15-day HSR Act waiting period will be terminated early.
Shares will not be accepted for payment or paid for pursuant to the Offer
until the expiration or earlier termination of the applicable waiting period
under the HSR Act. See Section 15. Any extension of the waiting period will
not give rise to any withdrawal rights not otherwise provided for by
applicable law. See Section 4. Subject to Section 4, any extension of the
waiting period will not give rise to any withdrawal rights not otherwise
provided for by applicable law. If Purchaser's acquisition of Shares is
delayed pursuant to a request by the Antitrust Division or the FTC for
additional information or documentary material pursuant to the HSR Act, the
Offer may, but need not, be extended.
The Antitrust Division and the FTC frequently scrutinize the legality
under the antitrust laws of transactions such as the acquisition of Shares by
Purchaser pursuant to the Offer. At any time before or after the consummation
of any such transactions, the Antitrust Division or the FTC 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 divestiture of the Shares so acquired or divestiture
of substantial assets of Purchaser or the Company. Private parties (including
individual states) may also bring legal actions under the antitrust laws.
Purchaser does not believe that the consummation of the Offer will result in a
violation of any applicable antitrust laws. However, there can be no assurance
that a challenge to the Offer on antitrust grounds will not be made, or if
such a challenge is made, what the result will be. See Section 15 for certain
conditions to the Offer, including conditions with respect to litigation and
certain governmental actions and Section 10 for certain termination rights in
connection with antitrust suits.
Appraisal Rights. If the Merger is consummated, shareholders of the
Company would have the right to dissent and demand appraisal of their Shares
under Delaware Law. Under Delaware Law, dissenting shareholders who 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 such merger
or similar business combination) and to receive payment of such fair value in
cash. Any such judicial determination of the fair value of the Shares could
be based upon considerations other than or in addition to the price paid in
the Offer and the market value of the 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. Shareholders should recognize that the value so
determined could be higher or lower or the same as the price per Share paid
pursuant to the Offer or the consideration per Share paid in the Merger.
Other. Based upon Purchaser's examination of publicly available
information concerning the Company, it appears that the Company and its
subsidiaries own property and conduct business in a number of foreign
countries. In connection with the acquisition of Shares pursuant to the
Offer, the laws of certain of these foreign countries may require the filing
of information with, or the obtaining of the approval of, governmental
authorities therein. After commencement of the Offer, Purchaser will seek
further information regarding the applicability of any such laws and currently
intends to take such action as they may require, but no assurance can be given
that such approvals will be obtained. If any action is taken prior to
completion of the Offer by any such government or governmental authority,
Purchaser may not be obligated to accept for payment or pay for any tendered
Shares. See Section 15.
17. Fees and Expenses. Morgan Stanley is acting as financial advisor to
Purchaser and is acting as Dealer Manager in connection with the Offer.
Purchaser has agreed to pay Morgan Stanley as compensation for its services as
financial advisor and as Dealer Manager in connection with the Offer a fee of
$2.9 million. Purchaser has also agreed to reimburse Morgan Stanley for
certain out-of-pocket expenses incurred in connection with the Offer
(including the fees and disbursements of outside counsel) and to indemnify
Morgan Stanley against certain liabilities, including certain liabilities
under the federal securities laws.
Purchaser has retained Georgeson & Company Inc. to act as the Information
Agent and Citibank, N.A. 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 interviews and may request brokers,
dealers and other nominee shareholders to forward materials relating to the
Offer to beneficial owners. The Information Agent and the Depositary each
will receive reasonable and customary compensation for their respective
services, will be reimbursed for certain out-of-pocket expenses and will be
indemnified against certain liabilities in connection therewith, 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 (other than the Dealer Manager, the Information Agent and the
Depository) for soliciting tenders of Shares pursuant to the Offer. Brokers,
dealers, commercial banks and trust companies will, upon request, be
reimbursed by Purchaser for reasonable and necessary costs and expenses
incurred by them in forwarding materials to their customers.
18. Miscellaneous. 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 acceptance thereof would not be in compliance with
the laws of such jurisdiction. However, Purchaser may, in its discretion,
take such action as it may deem necessary to make the Offer in any such
jurisdiction and extend the Offer to holders of Shares in such jurisdiction.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATION ON BEHALF OF PURCHASER NOT CONTAINED IN THIS OFFER TO PURCHASE
OR IN THE LETTER OF TRANSMITTAL AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED.
Purchaser has filed with the Commission a Tender Offer Statement on
Schedule 14D-1, together with exhibits, pursuant to Rule 14d-3 of the General
Rules and Regulations under the Exchange Act, furnishing certain additional
information with respect to the Offer. The Schedule 14D-1 and any amendments
thereto, including exhibits, may be examined and copies may be obtained from
the offices of the Commission in the manner set forth in Section 7 of this
Offer to Purchase (except that such information will not be available at the
regional offices of the Commission).
COMPAQ-DALLAS, INC.
November 9, 1995
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS
1. Directors and Executive Officers of Parent. The name, business
address, present principal occupation or employment and five-year employment
history of each director and executive officer of Parent and certain other
information are set forth below. Unless otherwise indicated below, the
address of each director and officer is 20555 SH 249, Houston, Texas 77070.
Where no date is shown, the individual has occupied the position indicated for
the past five years. Unless otherwise indicated, each occupation set forth
opposite an individual's name refers to employment with Purchaser. All
directors and officers listed below are citizens of the United States except
Eckhard Pfeiffer, Andreas Barth and Hans W. Gutsch, who are citizens of
Germany. Directors are identified by an asterisk.
Present Principal Occupation or Employment
Name and Five-Year Employment History
---- ----------------------------------------------
Benjamin M. Rosen*.......... Chairman of the Board of Directors since 1983;
Chairman of Rosen Motors since 1993; Chairman
of the Board of Sevin Rosen Management Company,
a venture capital firm, since 1981. Age 62.
Eckhard Pfeiffer*............ President and Chief Executive Officer since
October 1991; President, Europe and
International Division May 1989 to January 1991;
Executive Vice President and Chief Operating
Officer from January 1991 to October 1991. Age
54.
Robert Ted Enloe, III*....... President and Chief Executive Officer of Liberte
Investors since 1975; President of L&N Housing
Corp. from 1981 to April 1992; President of
Lomas Financial Corporation from 1975 to
September 1991. Age 56.
George H. Heilmeier*......... President and Chief Executive Officer of Bell
Communications Research, Inc. since 1991; Senior
Vice President and Chief Technical Officer of
Texas Instruments, Inc. from 1983 to 1991. Age
58.
George E.R. Kinnear II*...... Chairman Emeritus of the Board of the Retired
Officers Association of the United States;
Executive Vice President of the University of
New Hampshire from November 1988 to January
1992. Age 67.
Peter N. Larson*............. Chief Executive of Brunswick Corporation since
April 1995 and Chairman of the Board of
Brunswick Corporation since October 1995;
Company Group Chairman of Johnson & Johnson from
1991 to October 1994; Worldwide Chairman of the
Consumer Personal Care Group of Johnson &
Johnson from October 1994 to April 1995. Age 55.
Kenneth L. Lay*.............. Chairman of the Board and Chief Executive
Officer of Enron Corp. since February 1986. Age
52.
Kenneth Roman*............... Executive Vice President of American Express in
charge of Corporate Affairs and Communications
from 1989 to 1991. Age 64.
Lawrence T. Babbio*.......... Vice Chairman of Bell Atlantic Corporation since
January 1995; President of Bell Atlantic Mobile
Systems from 1990 to 1991; Chairman, President
and Chief Executive Officer of Bell Atlantic
Enterprises International, Inc., from 1991 to
1994; Executive Vice President and Chief
Operating Officer of Bell Atlantic Corporation
from 1994 to January 1995. Age 50.
Andreas Barth................ Senior Vice President, Europe, Middle East and
Africa since December 1991; Managing Director
of Compaq Computer GmbH from February 1988 to
December 1990; Vice President, Central Europe
from December 1990 to January 1991; Vice
President, Europe from January 1991 to December
1991. Age 50.
Ross A. Cooley.............. Senior Vice President, North America since
December 1991; Vice President, Sales and
Service, from September 1989 to January 1991;
Vice President, North America, from January 1991
to December 1991. Age 54.
Wilson D. Fargo.............. Senior Vice President, General Counsel and
Secretary since May 1989. Age 51.
Hans W. Gutsch............... Senior Vice President, Human Resources, since
November 1994; Director of Human Resources for
Europe from 1988 to June 1992; Vice President,
Human Resources, Europe from June 1992 to
January 1993; Vice President, Human Resources
and Environment, Europe, Middle East and Africa
from January 1993 to November 1994. Age 52.
Michael D. Heil.............. Senior Vice President, Consumer Products
Division, since September 1995; President of
L.A. Cellular Telephone Co. from May 1989 to
March 1995. Age 48.
Gregory E. Petsch............ Senior Vice President, Corporate Operations
since July 1993; Vice President, CPU
Manufacturing, from May 1989 to November 1991;
Vice President, from November 1991 to July 1993;
Senior Vice President, Personal Computer
Division, Manufacturing, from April 1993 to July
1993. Age 45.
John T. Rose................. Senior Vice President, Desktop PC Division,
since July 1993; Vice President of Digital
Equipment Corporation's Personal Computing
Systems Business prior thereto. Age 50.
Gary Stimac.................. Senior Vice President, Systems Division since
October 1991; Senior Vice President, Systems
Engineering, from May 1989 to October 1991. Age
44.
Daryl J. White............... Senior Vice President, Finance and Chief
Financial Officer since May 1989; Vice
President, Finance and Chief Financial Officer,
from October 1988 to May 1989. Age 48.
Michael Winkler.............. Senior Vice President, Portable PC Division
since November 1995; Vice President and General
Manager, Xerox Corporation, to 1991; Vice
President of Toshiba America Information Systems
and General Manager of Computer Systems Division
from 1991 to August 1995. Age 50.
David J. Schempf............. Vice President, Corporate Finance, Corporate
Controller, and Treasurer since November 1992;
Vice President and Corporate Controller from May
1989 to November 1992. Age 40.
Robert W. Stearns............ Vice President, Corporate Development, since
July 1993; Vice President, Corporate Marketing,
with Motorola/Codex from September 1986 to
August 1992; consultant with McKinsey & Co. from
August 1992 to July 1993. Age 45.
John W. White................ Vice President and Chief Information Officer
since February 1994; Vice President of Texas
Instruments, Inc. and President of its
Information Technology Group prior thereto. Age
57.
2. Directors and Executive Officers of Purchaser. The name, business
address, present principal occupation or employment and five-year employment
history of each director and executive officer of Purchaser and certain other
information are set forth below. Unless otherwise indicated below, the
address of each director and officer is 20555 SH 249, Houston, Texas 77070.
Where no date is shown, the individual has occupied the position indicated for
the past five years. Unless otherwise indicated, each occupation set forth
opposite an individual's name refers to employment with Parent. All directors
and officers listed below are citizens of the United States. Directors are
identified by an asterisk.
Employment and Present Principal Occupation or
Name and Business Address Five-Year Employment History
------------------------- -------------------------------
Gary Stimac*................. President of Purchaser. Senior Vice President,
Systems Division, of Parent since October 1991;
Senior Vice President, Systems Engineering from
May 1989 to October 1991. Age 44.
David J. Schempf*............ Treasurer of Purchaser. Treasurer of Parent
since November 1992; Vice President and
Corporate Controller of Parent since May 1989.
Age 40.
Doug Pushard*................ Vice President, Internetworking Products Group,
a division of Parent, since June 1995; Manager
of Product Marketing, May 1989 to May 1992;
Director of Strategic Planning from May 1992 to
June 1995. Age 39.
Wilson D. Fargo.............. Secretary of Purchaser. Senior Vice President,
General Counsel and Secretary of Parent since
May 1989. Age 51.
Facsimile copies of the Letter of Transmittal will be accepted. The
Letter of Transmittal and certificates for Shares and any other required
documents should be sent to the Depositary at one of the addresses set forth
below:
The Depositary for the Offer is:
Citibank, N.A.
By Mail: By Facsimile Transmission: By Hand:
Citibank, N.A. (For Eligible Institutions Only) Citibank, N.A.
c/o Citicorp Data (201) 262-3240 Corporate Trust Window
Distribution Inc. 111 Wall Street, 5th Floor
P.O. Box 7072 New York, New York
Paramus, New Jersey 07653
By Overnight Courier: Confirm By Telephone: By Facsimile:
Citibank, N.A. (800) 422-2066 (201) 262-3240
c/o Citicorp Data
Distribution Inc.
404 Sette Drive
Paramus, New Jersey 07652
Questions or requests for assistance or additional copies of this Offer
to Purchase and the Letter of Transmittal may be directed to the Information
Agent or the Dealer Manager at their respective addresses and telephone
numbers set forth below. Shareholders may also contact their broker, dealer,
commercial bank or trust company for assistance concerning the Offer.
The Information Agent for the Offer is:
GEORGESON
& COMPANY, INC.
CALL TOLL FREE (800) 223-2064
Wall Street Plaza
New York, New York 10005
(212) 509-6240 (call collect)
Banks and Brokers call
(212) 440-9800
The Dealer Manager is:
MORGAN STANLEY & CO.
Incorporated
1585 Broadway
New York, New York 10036
(212) 761-6409
CALL TOLL FREE (800) 223-2440 ext. 6409
LETTER OF TRANSMITTAL
To Tender Shares of Common Stock
of
NetWorth, Inc.
Pursuant to the Offer to Purchase
dated November 9, 1995
by
Compaq-Dallas, Inc.
a wholly owned subsidiary of
Compaq Computer Corporation
THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON FRIDAY, DECEMBER 8, 1995, UNLESS THE OFFER IS EXTENDED.
To: CITIBANK, N.A., as Depositary
By Mail: By Overnight Courier: By Hand:
Citibank, N.A. Citibank, N.A. Citibank, N.A.
c/o Citicorp Data c/o Citicorp Data Corporate Trust Window
Distribution, Inc. Distribution, Inc. 111 Wall Street
P.O. Box 7072 404 Sette Drive 5th Floor
Paramus, NJ 07653 Paramus, NJ 07652 New York, NY
By Facsimile:
(For Eligible Institutions Only)
(201) 262-3240
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE
OR TRANSMISSION OF INSTRUCTIONS TO A FACSIMILE NUMBER OTHER THAN THE ONE
LISTED ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
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 used if certificates are to be
forwarded herewith or, unless an Agent's Message (as defined in the Offer to
Purchase) is utilized, if delivery of Shares (as defined below) is to be made
by book-entry transfer to the Depositary's account at The Depository Trust
Company, Midwest Securities Trust Company or Philadelphia Depository Trust
Company (hereinafter collectively referred to as the "Book-Entry Transfer
Facilities") pursuant to the procedures set forth in Section 3 of the Offer to
Purchase.
Shareholders who cannot deliver their Shares and all other documents
required hereby to the Depositary by the Expiration Date (as defined in the
Offer to Purchase) or who cannot complete the procedure for book-entry
transfer on a timely basis must tender their Shares pursuant to the guaranteed
delivery procedure set forth in Section 3 of the Offer to Purchase. See
Instruction 2.
<TABLE>
<CAPTION>
DESCRIPTION OF SHARES TENDERED
- -------------------------------------------------------------------------------------------------------------------------------
Name(s) and Address(es) of Registered Holder(s) | Shares Tendered
(Please fill in, if blank) | (Attach additional list if necessary)
- --------------------------------------------------------------------|----------------------------------------------------------
| | Total Number of Shares | Number of
| Certificate | Represented by | Shares
| Number(s)* | Certificate(s)* | Tendered**
<S> <C> <C> <C>
|---------------|--------------------------|---------------
| | |
|---------------|--------------------------|---------------
| | |
|---------------|--------------------------|---------------
| | |
|---------------|--------------------------|---------------
| | |
|---------------|--------------------------|---------------
|Total Shares | |
- -------------------------------------------------------------------------------------------------------------------------------
<FN>
* Need not be completed by stockholders tendering by book-entry transfer.
** Unless otherwise indicated, it will be assumed that all Shares represented
by any certificates delivered to the Depositary
are being tendered. See Instruction 4.
</TABLE>
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
[ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER
TO THE DEPOSITARY'S ACCOUNT AT ONE OF THE BOOK-ENTRY TRANSFER FACILITIES
AND COMPLETE THE FOLLOWING:
Name of Tendering Institution...............................................
Account No................................................................at
[ ] The Depository Trust Company
[ ] Midwest Securities Trust Company
[ ] Philadelphia Depository Trust Company
Transaction Code No.........................................................
[ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE
FOLLOWING:
Name(s) of Tendering Shareholder(s).........................................
Date of Execution of Notice of Guaranteed Delivery..........................
Name of Institution which Guaranteed Delivery...............................
If delivery is by book-entry transfer:......................................
Name of Tendering Institution...............................................
Account No................................................................at
[ ] The Depository Trust Company
[ ] Midwest Securities Trust Company
[ ] Philadelphia Depository Trust Company
Transaction Code No..........................................................
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
The undersigned hereby tenders to Compaq-Dallas, Inc., a Delaware
corporation (the "Purchaser") and a wholly owned subsidiary of Compaq Computer
Corporation, the above-described shares of Common Stock, $0.01 par value (the
"Shares"), of NetWorth, Inc., a Delaware corporation (the "Company"), pursuant
to the Purchaser's offer to purchase all outstanding Shares at a price of
$42.00 per Share, net to the seller in cash, upon the terms and subject to the
conditions set forth in the Offer to Purchase dated November 9, 1995, receipt
of which is hereby acknowledged, and in this Letter of Transmittal (which
together constitute the "Offer"). Tendering shareholders will not be obligated
to pay brokerage fees or commissions or, except as set forth in Instruction 6
of the Letter of Transmittal, transfer taxes on the purchase of Shares
pursuant to the Offer. Purchaser will pay all charges and expenses of MORGAN
STANLEY & CO. INCORPORATED (the "Dealer Manager"), CITIBANK, N.A. (the
"Depositary") and GEORGESON & COMPANY INC. (the "Information Agent") incurred
in connection with the Offer. The 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 Shares tendered pursuant to the Offer.
Upon the terms and subject to the terms and conditions of the Offer and
effective upon acceptance for payment of and payment for the Shares tendered
herewith, the undersigned hereby sells, assigns and transfers to or upon the
order of the Purchaser all right, title and interest in and to all the Shares
that are being tendered hereby (and any and all other Shares or other
securities issued or issuable in respect thereof on or after November 9, 1995)
and appoints the Depositary the true and lawful agent and attorney-in-fact of
the undersigned with respect to such Shares (and all such other Shares or
securities), with full power of substitution (such power of attorney being
deemed to be an irrevocable power coupled with an interest), to (a) deliver
certificates for such Shares (and all such other Shares or securities), or
transfer ownership of such Shares (and all such other Shares or securities) on
the account books maintained by any of the Book-Entry Transfer Facilities,
together, in any such case, with all accompanying evidences of transfer and
authenticity, to or upon the order of the Purchaser, (b) present such Shares
(and all such other Shares or securities) for transfer on the books of the
Company and (c) receive all benefits and otherwise exercise all rights of
beneficial ownership of such Shares (and all such other Shares or securities),
all in accordance with the terms of the Offer.
The undersigned hereby irrevocably appoints Daryl J. White, David J.
Schempf and Wilson D. Fargo and each of them, the attorneys and proxies of
the undersigned, each with full power of substitution, to exercise all voting
and other rights of the undersigned in such manner as each such attorney and
proxy or his substitute shall in his sole discretion deem proper, with respect
to all of the Shares tendered hereby which have been accepted for payment by
the Purchaser prior to the time of any vote or other action (and any and all
other Shares or other securities issued or issuable in respect thereof on or
after November 9, 1995), at any meeting of shareholders of the Company
(whether annual or special and whether or not an adjourned meeting), by
written consent or otherwise. This proxy is irrevocable and is granted in
consideration of, and is effective upon, the acceptance for payment of such
Shares by the Purchaser in accordance with the terms of the Offer. Such
acceptance for payment shall revoke any other proxy or written consent granted
by the undersigned at any time with respect to such Shares (and all such other
Shares or securities), and no subsequent proxies will be given or written
consents will be executed by the undersigned (and if given or executed, will
not be deemed to be effective).
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, sell, assign and transfer the Shares
tendered hereby (and any and all other Shares or other securities issued or
issuable in respect thereof on or after November 9, 1995) and that when the
same are accepted for payment by the Purchaser, the Purchaser will acquire
good and unencumbered title thereto, free and clear of all liens,
restrictions, charges and encumbrances and not subject to any adverse claims.
The undersigned will, upon request, execute and deliver any additional
documents deemed by the Depositary or the Purchaser to be necessary or
desirable to complete the sale, assignment and transfer of the Shares tendered
hereby (and all such other Shares or securities).
All authority herein conferred or agreed to be conferred shall survive
the death or incapacity of the undersigned, and any obligation of the
undersigned hereunder shall be binding upon the heirs, personal
representatives, successors and assigns of the undersigned. Except as stated
in the Offer, 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 an agreement between the undersigned and
the Purchaser upon the terms and subject to the conditions of the Offer.
Unless otherwise indicated under "Special Payment Instructions", please
issue the check for the purchase price of any Shares purchased, and return any
Shares not tendered or not purchased, in the name(s) of the undersigned (and,
in the case of Shares tendered by book-entry transfer, by credit to the
account at the Book-Entry Transfer Facility designated above). Similarly,
unless otherwise indicated under "Special Delivery Instructions", please mail
the check for the purchase price of any Shares purchased and any certificates
for Shares not tendered or not purchased (and accompanying documents, as
appropriate) to the undersigned at the address shown below the undersigned's
signature(s). In the event that both "Special Payment Instructions" and
"Special Delivery Instructions" are completed, please issue the check for the
purchase price of any Shares purchased and return any Shares not tendered or
not purchased in the name(s) of, and mail said check and any certificates to,
the person(s) so indicated. If indicated under "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 specified under "Special Payment
Instructions". The undersigned recognizes that the Purchaser has no
obligation, pursuant to the "Special Payment Instructions", to transfer any
Shares from the name of the registered holder(s) thereof if the Purchaser does
not accept for payment any of the Shares so tendered.
=====================================================================
SPECIAL PAYMENT INSTRUCTIONS
(See Instructions 5, 6 and 7)
To be completed ONLY if the check for the purchase price of
Shares purchased (less the amount of any federal income and backup
withholding tax required to be withheld) or certificates for Shares
not tendered or not purchased are to be issued in the name of
someone other than the undersigned, or if the Shares delivered by
book-entry transfer which are not purchased are to be returned by
credit to an account maintained at a Book-Entry Transfer Facility
other than that designated above.
Mail [ ] check
[ ] certificate(s) to:
Name...........................................................
(Please Print)
Address........................................................
...............................................................
(Zip Code)
...............................................................
(Taxpayer Identification No.)
[ ] Credit unpurchased Shares delivered by book-entry transfer to
the Book-Entry Transfer Facility account set forth below
Check appropriate box:
[ ] The Depository Trust Company
[ ] Midwest Securities Trust Company
[ ] Philadelphia Depository Trust Company
=====================================================================
=====================================================================
SPECIAL DELIVERY INSTRUCTIONS
(See Instructions 5 and 7)
To be completed ONLY if the check for the purchase price of
Shares purchased (less the amount of any federal income and backup
withholding tax required to be withheld) or certificates for Shares
not tendered or not purchased are to be mailed to someone other
than the undersigned or to the undersigned at an address other than
that shown below the undersigned's signature(s).
Mail [ ] check
[ ] certificate(s) to:
Name...........................................................
(Please Print)
Address........................................................
...............................................................
(Zip Code)
=====================================================================
=====================================================================
SIGN HERE
(Please complete Substitute Form W-9 below)
..........................................................
..........................................................
Signature(s) of Owner(s)
..........................................................
Dated...............................................199...
Name(s)..................................................
(Please Print)
..........................................................
Capacity (full title).....................................
Address..................................................
..........................................................
..........................................................
(Include Zip Code)
Area Code and Telephone Number............................
(Must be signed by registered holder(s) exactly as
name(s) appear(s) on stock certificate(s) or on a
security position listing or by person(s) authorized to
become registered holder(s) by certificates and documents
transmitted herewith. If signature is by a trustee,
executor, administrator, guardian, attorney-in-fact,
agent, officer of a corporation or other person acting in
a fiduciary or representative capacity, please set forth
full title and see Instruction 5.)
Guarantee of Signature(s)
(If required; see Instructions 1 and 5)
Name of Firm................................................
Authorized Signature........................................
Dated..................................................199..
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
<S> | <C> | <C>
SUBSTITUTE | Part I Taxpayer Identification No.--For All Accounts | Part II For Payees
FORM W-9 | | Exempt
| Enter your taxpayer identification | From Backup
Department of the Treasury | number in the appropriate box. For | Withholding
Internal Revenue Service | most individuals and sole proprietors, | (see enclosed
| this is your social security number. | Guidelines)
Payer's Request for | For other entities, it is your Employer -------------------------------- |
Taxpayer Identification No. | Identification Number. If you do not | | |
| have a number, see How to Obtain a |Social security number | |
| TIN in the enclosed Guidelines. -------------------------------- |
| |
| Note: If the account is in more than OR |
| one name, see the chart on page 2 of -------------------------------- |
| enclosed Guidelines to determine | | |
| what number to give. |Employer identification number| |
| -------------------------------- |
- ---------------------------------------------------------------------------------------------------------------------------------
Certification. -- Under penalties of perjury, I certify that:
(1) The number shown on this form is my correct taxpayer identification
number (or I am waiting for a number to be 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 or Social Security Administration Office or (b) I intend to mail
or deliver an application in the near future. I understand that if I
do not provide a taxpayer identification number within sixty (60) days,
31% of all reportable payments made to me thereafter will be withheld
until I provide a number;
(2) I am not subject to backup withholding either because (a) I am exempt
from backup withholding, or (b) I have not been notified by the
Internal Revenue Service ("IRS") that I am subject to backup
withholding as a result of a failure to report all interest or
dividends, or (c) the IRS has notified me that I am no longer subject
to backup withholding; and
(3) Any other information provided on this form is true, correct and
complete.
- ---------------------------------------------------------------------------------------------------------------------------------
SIGNATURE....................................................................... DATE...................................., 199..
You must cross out Item (2) above if you have been notified by the IRS that
you are currently subject to backup withholding because of underreporting
interest or dividends on your tax returns and you have not received a notice
from the IRS advising you that backup withholding has terminated.
- ---------------------------------------------------------------------------------------------------------------------------------
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 ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
</TABLE>
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 firm which is
a member of a recognized Medallion Program approved by The Securities Transfer
Associations, Inc. (an "Eligible Institution"). Signatures on this Letter of
Transmittal need not be guaranteed (a) if this Letter of Transmittal is signed
by the registered holder(s) of the Shares (which term, for purposes of this
document, shall include any participant in one of the Book-Entry Transfer
Facilities whose name appears on a security position listing as the owner of
Shares) tendered herewith and such holder(s) have not completed the
instruction entitled "Special Payment Instructions" on this Letter of
Transmittal or (b) if such Shares are tendered for the account of an Eligible
Institution. See Instruction 5.
2. Delivery of Letter of Transmittal and Shares. This Letter of
Transmittal is to be used either if certificates are to be forwarded herewith
or, unless an Agent's Message is utilized, if delivery of Shares is to be made
by book-entry transfer pursuant to the procedures set forth in Section 3 of
the Offer to Purchase. Certificates for all physically delivered Shares, or a
confirmation of a book-entry transfer into the Depositary's account at one of
the Book-Entry Transfer Facilities of all Shares delivered electronically, as
well as a properly completed and duly executed Letter of Transmittal (or
facsimile thereof 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 at one of its addresses set forth on the front
page of this Letter of Transmittal by the Expiration Date. Shareholders who
cannot deliver their Shares and all other required documents to the Depositary
by the Expiration Date must tender their Shares pursuant to the guaranteed
delivery procedure set forth in Section 3 of the Offer to Purchase. Pursuant
to such procedure: (a) such tender must be made by or through an Eligible
Institution, (b) a properly completed and duly executed Notice of Guaranteed
Delivery substantially in the form provided by the Purchaser must be received
by the Depositary by the Expiration Date and (c) the certificates for all
physically delivered Shares, or a confirmation of a book-entry transfer into
the Depositary's account at one of the Book-Entry Transfer Facilities of all
Shares delivered electronically, as well as a properly completed and duly
executed Letter of Transmittal (or facsimile thereof or, in the case of a
book-entry delivery, an Agent's Message) and any other documents required by
this Letter of Transmittal, must be received by the Depositary within three
National Association of Securities Dealers, Inc. Automated Quotation
("NASDAQ") System trading days after the date of execution of such Notice of
Guaranteed Delivery, all as provided in Section 3 of the Offer to Purchase.
The method of delivery of Shares and all other required documents is at
the option and risk of the tendering shareholder. If certificates for Shares
are sent by mail, registered mail with return receipt requested, properly
insured, is recommended.
No alternative, conditional or contingent tenders will be accepted, and
no fractional Shares will be purchased. By executing this Letter of
Transmittal (or facsimile thereof), the tendering shareholder waives any right
to receive any notice of the acceptance for payment of the Shares.
3. Inadequate Space. If the space provided herein is inadequate, the
certificate numbers and/or the number of Shares should be listed on a separate
schedule attached hereto.
4. Partial Tenders (not applicable to shareholders who tender by
book-entry transfer). If fewer than all the Shares represented by any
certificate delivered to the Depositary are to be tendered, fill in the number
of Shares which are to be tendered in the box entitled "Number of Shares
Tendered". In such case, a new certificate for the remainder of the Shares
represented by the old certificate will be sent to the person(s) signing this
Letter of Transmittal, unless otherwise provided in the appropriate box on
this Letter of Transmittal, as promptly as practicable following the
expiration or termination of the Offer. All Shares represented by
certificates delivered to the Depositary will be deemed to have been tendered
unless otherwise indicated.
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 certificates without alteration, enlargement or any
change whatsoever.
If any of the Shares tendered hereby is held 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 different names on
different certificates, it will be necessary to complete, sign and submit as
many separate Letters of Transmittal as there are different registrations of
certificates.
If this Letter of Transmittal is signed by the registered holder(s) of
the Shares tendered hereby, no endorsements of certificates or separate stock
powers are required unless payment of the purchase price is to be made, or
Shares not tendered or not purchased are to be returned, in the name of any
person other than the registered holder(s). Signatures on any such
certificates or 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, certificates 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 the
certificates for such Shares. Signature(s) on any such certificates or stock
powers must be guaranteed by an Eligible Institution.
If this Letter of Transmittal or any 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 the Purchaser of the authority of such person so to act must
be submitted.
6. Stock Transfer Taxes. The Purchaser will pay any 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 is to be
made to, or Shares not tendered or not purchased are to be returned in the
name of, any person other than the registered holder(s), or if a transfer tax
is imposed for any reason other than the sale or transfer of Shares to the
Purchaser pursuant to the Offer, then the amount of any stock transfer taxes
(whether imposed on the registered holder(s), such other person or otherwise)
will be deducted from the purchase price unless satisfactory evidence of the
payment of such taxes, or exemption therefrom, is submitted herewith.
7. Special Payment and Delivery Instructions. If the check for the
purchase price of any Shares purchased is to be issued, or any Shares not
tendered or not purchased are to be returned, in the name of a person other
than the person(s) signing this Letter of Transmittal or if the check or any
certificates for Shares not tendered or not purchased are to be mailed to
someone other than the person(s) signing this Letter of Transmittal or to the
person(s) signing this Letter of Transmittal at an address other than that
shown above, the appropriate boxes on this Letter of Transmittal should be
completed. Shareholders tendering Shares by book-entry transfer may request
that Shares not purchased be credited to such account at any of the Book-Entry
Transfer Facilities as such shareholder may designate under "Special Payment
Instructions". If no such instructions are given, any such Shares not
purchased will be returned by crediting the account at the Book-Entry Transfer
Facilities designated above.
8. Substitute Form W-9. Under the federal income tax laws, the Depositary
will be required to withhold 31% of the amount of any payments made to certain
shareholders pursuant to the Offer. In order to avoid such backup
withholding, each tendering shareholder, and, if applicable, each other payee,
must provide the Depositary with such shareholder's or payee's correct
taxpayer identification number and certify that such shareholder or payee is
not subject to such backup withholding by completing the Substitute Form W-9
set forth above. In general, if a shareholder or payee is an individual, the
taxpayer identification number is the Social Security number of such
individual. If the Depositary is not provided with the correct taxpayer
identification number, the shareholder or payee may be subject to a $50
penalty imposed by the Internal Revenue Service. Certain shareholders or
payees (including, among others, all corporations and certain foreign
individuals) are not subject to these backup withholding and reporting
requirements. In order to satisfy the Depositary that a foreign individual
qualifies as an exempt recipient, such shareholder or payee must submit a
statement, signed under penalties of perjury, attesting to that individual's
exempt status. Such statements can be obtained from the Depositary. For
further information concerning backup withholding and instructions for
completing the Substitute Form W-9 (including how to obtain a taxpayer
identification number if you do not have one and how to complete the
Substitute Form W-9 if Shares are held in more than one name), consult the
enclosed Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
Failure to complete the Substitute Form W-9 will not, by itself, cause
Shares to be deemed invalidly tendered, but may require the Depositary to
withhold 31% of the amount of any payments made pursuant to the Offer. Backup
withholding is not an additional federal income tax. Rather, the federal
income tax liability of a person 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 provided that the required information is
furnished to the Internal Revenue Service. NOTE: FAILURE TO COMPLETE AND
RETURN THE SUBSTITUTE FORM W-9 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.
9. Requests for Assistance or Additional Copies. Requests for assistance
or additional copies of the Offer to Purchase and this Letter of Transmittal
may be obtained from the Information Agent or the Dealer Manager at their
respective addresses or telephone numbers set forth below.
<TABLE>
<CAPITON>
- --------------------------------------------------------------------------------------
(DO NOT WRITE IN SPACES BELOW)
Date Received___________________ Accepted By________________ Checked By_______________
Shares Shares Shares Check Amount Shares Certificate Block
Surrendered Tendered Accepted No. of Check Returned No. No.
----------- -------- -------- ----- -------- -------- ----------- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Gr______
Net_____
- ------------------------------------------------------------------------------
Delivery Prepared By___________ Checked By________________ Date_______________
</TABLE>
- ------------------------------------------------------------------------------
The Information Agent is:
GEORGESON
& COMPANY, INC.
CALL TOLL FREE (800) 223-2064
Wall Street Plaza
New York, New York 10005
(212) 509-6240 (call collect)
Banks and Brokers call
(212) 440-9800
The Dealer Manager is:
MORGAN STANLEY & CO.
Incorporated
1585 Broadway
New York, New York 10036
(212) 761-6409
CALL TOLL FREE (800) 223-2440 ext. 6409
Guidelines for Determining the Proper Identification Number to Give 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>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
Give the Give the EMPLOYER
For this type of account: SOCIAL SECURITY number of: For this type of account: IDENTIFICATION number of--
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Individual The individual 6. Sole proprietorshp The owner(3)
2. Two or more individuals The actual owner of the 7. A valid trust, estate, or The legal entity (Do not furnish
(joint account) account or, if combined pension trust the identifying number of the
funds, the first individual personal representative or
on the account(1) trustee unless the legal entity
itself is not designated in the
account title).(4)
3. Custodian account of a The minor(2) 8. Corporate The corporation
minor (Uniform Gift to
Minors Act)
4. a. The usual revocable The grantor-trustee(1) 9. Association, club, The organization
savings trust religious, charitable,
(grantor is also educational or other tax-
trustee) exempt organization
b. So-called trust The actual owner(1) 10. Partnership The partnership
account that is not a
legal or valid trust
under state law
5. Sole proprietorship The owner(3) 11. A broker or registered The broker or nominee
nominee
12. Account with the The public entity
Department of
Agriculture in 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) Show the name of the owner.
(4) 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.
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
Page 2
Section references are to the Internal Revenue Code.
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 (the
"IRS") and apply for a number.
Payees Exempt from Backup Withholding
The following is a list of payees exempt from backup withholding and for which
no information reporting is required. For interest and dividends, all listed
payees are exempt except item (9). For broker transactions, payees listed in
(1) through (13) and a person registered under the Investment Advisors Act of
1940 who regularly acts as a broker are exempt. Payments subject to reporting
under sections 6041 and 6041A are generally exempt from backup withholding
only if made to payees described in items (1) through (7), except that a
corporation that provides medical and health care services or bills and
collects payments for such services is not exempt from backup withholding or
information reporting. Only payees described in items (2) through (6) are
exempt from backup withholding for barter exchange transactions, patronage
dividends, and payments by certain fishing boat operators.
(1) A corporation
(2) An organization exempt from tax under section 501(a), or an
individual retirement plan ("IRA"), or a custodial account under
403(b)(7)
(3) The United States or any of its agencies or instrumentalities.
(4) A State, the District of Columbia, a possession of the United States,
or any of their political subdivisions, agencies or instrumentalities.
(5) A foreign government or any of its political subdivisions, agencies
or instrumentalities.
(6) An international organization, or any of its agencies or
instrumentalities.
(7) A foreign central bank of issue.
(8) A dealer in securities or commodities required to register in the
United States or a possession of the United States.
(9) A futures commission merchant registered with the Commodity Futures
Trading Commission.
(10) A real estate investment trust.
(11) An entity registered at all times during the tax year under the
Investment Company Act of 1940.
(12) A common trust fund operated by a bank under section 584(a).
(13) A financial institution.
(14) A middleman known in the investment community as a nominee or listed
in the most recent publication of the American Society of Corporate
Secretaries, Inc., Nominee List.
(15) A trust exempt from tax under section 664 or described in section
4947.
Payments of dividends and patronage dividends generally not subject to backup
withholding also include the following:
o Payments to nonresident aliens subject to withholding under section
1441.
o Payments to partnerships not engaged in a trade or business in the
United States and that have at least one nonresident partner.
o Payments of patronage dividends not paid in money.
o Payments made by certain foreign organizations.
Payments of interest generally not subject to backup withholding include the
following:
o Payments of interest on obligations issued by: individuals.
Note: You may be subject to backup withholding if this interest is
$600 or more and is paid in the course of the payer's trade or
business and you have not provided your correct taxpayer
identification number to the payer.
o Payments of tax-exempt interest (including exempt interest dividends
under section 852).
o Payments described in section 6049(b)(5) to nonresident aliens.
o Payments on tax-free covenant bonds under section 1451.
o Payments made by certain foreign organizations.
o Mortgage interest paid by you.
Payments that are not subject to information reporting are also not subject to
backup withholding. For details see sections 6041, 6041(A)(a), 6042, 6044,
6045, 6049, 6050(A) and 6050(N), and the regulations under such sections.
Privacy Act Notice
Section 6109 requires you to give your correct taxpayer identification number
to persons who must file information returns with the IRS to report interest,
dividends, and certain other income paid to you, mortgage interest you paid,
the acquisition or abandonment of secured property, cancellation of debt, or
contributions you made to an IRA. The IRS uses the numbers for identification
purposes and to help verify the accuracy of your tax return. You must provide
your taxpayer identification number whether or not you are qualified to file a
tax return. 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 that results in no backup
withholding, you are subject to a $500 penalty.
(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
Notice of Guaranteed Delivery
for
Tender of Shares of Common Stock
of
NetWorth, Inc.
(Not to be Used for Signature Guarantees)
This form, or a form substantially equivalent to this form, must be used
to accept the Offer (as defined below) if the shares of Common Stock of
NetWorth, Inc. and all other documents required by the Letter of Transmittal
cannot be delivered to the Depositary by the expiration of the Offer or if the
procedure for delivery by book-entry transfer cannot be completed on a timely
basis. Such form may be delivered by hand or facsimile transmission, telex or
mail to the Depositary. See Section 3 of the Offer to Purchase.
To: Citibank, N.A., as Depositary
By Hand: By Overnight Courier: By Mail:
Citibank, N.A. Citibank, N.A. Citibank, N.A.
Corporate Trust Window c/o Citicorp Data c/o Citicorp Data
111 Wall Street, 5th Floor Distribution, Inc. Distribution, Inc.
New York, NY 404 Sette Drive P.O. Box 7072
Paramus, NJ 07652 Paramus, NJ 07653
By Facsimile:
(For Eligible Institutions Only)
(201) 262-3240
Ladies and Gentlemen:
The undersigned hereby tenders to Compaq-Dallas, Inc., a Delaware
corporation (the "Purchaser") and a wholly owned subsidiary of Compaq Computer
Corporation, upon the terms and subject to the conditions set forth in the
Offer to Purchase dated November 9, 1995 and the related Letter of Transmittal
(which together constitute the "Offer"), receipt of which is hereby
acknowledged, shares of Common Stock, $.01 par value per share (the
"Shares"), of NetWorth, Inc., a Delaware corporation, pursuant to the
guaranteed delivery procedure set forth in Section 3 of the Offer to Purchase.
SIGN HERE
Certificate Nos. (if available):
_____________________________________ _______________________________________
If Shares will be tendered _______________________________________
by book-entry transfer: (Signature(s))
Name of Tendering _______________________________________
Institution:_______________________ (Name(s)) (Please Print)
_____________________________________ _______________________________________
(Address)
Account No. _______________________at
_______________________________________
[ ] The Depository Trust Company (Zip Code)
[ ] Midwest Securities Trust Company
[ ] Philadelphia Depository Trust _______________________________________
Company (Area Code and Telephone No.)
_______________________________________
(Tax Identification or
Social Security Number(s))
GUARANTEE
(Not to be used for signature guarantee)
The undersigned, a firm which is a member of a registered national
securities exchange or the National Association of Securities Dealers, Inc.,
or a commercial bank or trust company having an office or correspondent in the
United States, guarantees (a) that the above named person(s) "own(s)" the
Shares tendered hereby within the meaning of Rule 14e-4 under the Securities
Exchange Act of 1934, (b) that such tender of Shares complies with Rule 14e-4
and (c) to deliver to the Depositary the Shares tendered hereby, together with
a properly completed and duly executed Letter(s) of Transmittal (or
facsimile(s) thereof) or an Agent's Message (as defined in the Offer to
Purchase) in the case of a book-entry delivery and any other required
documents, all within three National Association of Securities Dealers, Inc.
Automated Quotation ("NASDAQ") System trading days of the date hereof.
_______________________________________________
(Name of Firm)
_______________________________________________
(Authorized Signature)
_______________________________________________
(Name)
_______________________________________________
(Address)
_______________________________________________
(Zip Code)
_______________________________________________
(Area Code and Telephone No.)
Dated:__________________________ 199__
Morgan Stanley & Co.
Incorporated
1585 Broadway
New York, New York 10036
Offer to Purchase for Cash
All Outstanding Shares of Common Stock
of
NetWorth, Inc.
at
$42.00 Net Per Share
by
Compaq-Dallas, Inc.
a wholly owned subsidiary of
Compaq Computer Corporation
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT
12:00 MIDNIGHT, NEW YORK CITY TIME, ON FRIDAY,
DECEMBER 8, 1995, UNLESS THE OFFER IS EXTENDED.
November 9, 1995
To Brokers, Dealers, Commercial
Banks, Trust Companies and Other Nominees:
We have been appointed by Compaq-Dallas, Inc., a Delaware corporation
(the "Purchaser") and a wholly owned subsidiary of Compaq Computer
Corporation, to act as Dealer Manager in connection with its offer to purchase
all outstanding shares of Common Stock, $.01 par value (the "Shares"), of
NetWorth, Inc., a Delaware corporation (the "Company"), at $42.00 per Share,
net to the seller in cash, upon the terms and subject to the conditions set
forth in the Purchaser's Offer to Purchase dated November 9, 1995 and the
related Letter of Transmittal (which together constitute the "Offer").
For your information and for forwarding to your clients for whom you hold
Shares registered in your name or in the name of your nominee, we are
enclosing the following documents:
1. Offer to Purchase dated November 9, 1995;
2. Letter of Transmittal for your use and for the information of
your clients, together with Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9 providing information
relating to backup federal income tax withholding;
3. Notice of Guaranteed Delivery to be used to accept the Offer if
the Shares and all other required documents cannot be delivered to the
Depositary by the Expiration Date (as defined in the Offer to Purchase) or
if the procedure for book-entry transfer cannot be completed by the
Expiration Date;
4. A form of 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; and
5. Return envelope addressed to Citibank, N.A., the Depositary.
WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE.
The Purchaser will not pay any fees or commissions to any broker or
dealer or other person (other than the Dealer Manager, the Information Agent
or the Depositary as described in the Offer to Purchase) for soliciting
tenders of Shares pursuant to the Offer. The Purchaser will, however, upon
request, reimburse brokers, dealers, commercial banks and trust companies for
reasonable and necessary costs and expenses incurred by them in forwarding
materials to their customers. The Purchaser will pay all stock transfer taxes
applicable to its purchase of Shares pursuant to the Offer, subject to
Instruction 6 of the Letter of Transmittal.
In order to accept the Offer a duly executed and properly completed
Letter of Transmittal and any required signature guarantees, or an Agent's
Message (as defined in the Offer to Purchase) in connection with a book-entry
delivery of Shares, and any other required documents, should be sent to the
Depositary by 12:00 midnight, New York City time, on Friday, December 8, 1995.
Any inquiries you may have with respect to the Offer should be addressed
to, and additional copies of the enclosed materials may be obtained from, the
Information Agent or the undersigned at the addresses and telephone numbers
set forth on the back cover of the Offer to Purchase.
Very truly yours,
MORGAN STANLEY & CO.
Incorporated
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE
YOU THE AGENT OF COMPAQ-DALLAS, INC., COMPAQ COMPUTER CORPORATION, THE DEALER
MANAGER, THE INFORMATION AGENT OR THE DEPOSITARY, OR AUTHORIZE YOU OR ANY
OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY STATEMENT ON BEHALF OF ANY OF
THEM IN CONNECTION WITH THE OFFER OTHER THAN THE DOCUMENTS ENCLOSED HEREWITH
AND THE STATEMENTS CONTAINED THEREIN.
Offer to Purchase for Cash
All Outstanding Shares of Common Stock
of
NetWorth, Inc.
at
$42.00 Net Per Share
by
Compaq-Dallas, Inc.
a wholly owned subsidiary of
Compaq Computer Corporation
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT
12:00 MIDNIGHT, NEW YORK CITY TIME, ON FRIDAY,
DECEMBER 8, 1995, UNLESS THE OFFER IS EXTENDED.
To Our Clients:
Enclosed for your consideration are the Offer to Purchase dated November
9, 1995 and the related Letter of Transmittal (which together constitute the
"Offer") in connection with the offer by Compaq-Dallas, Inc., a Delaware
corporation (the "Purchaser") and a wholly owned subsidiary of Compaq Computer
Corporation, to purchase for cash all outstanding shares of Common Stock, $.01
par value (the "Shares"), of NetWorth, Inc., a Delaware corporation (the
"Company").
We are the holder of record of Shares held 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 us to tender any or all of
the Shares held by us for your account, upon the terms and subject to the
conditions set forth in the Offer to Purchase and the Letter of Transmittal.
Your attention is invited to the following:
1. The tender price is $42.00 per Share, net to you in cash.
2. The Offer and withdrawal rights expire at 12:00 Midnight, New York
City time, on Friday, December 8, 1995, unless the Offer is extended.
3. The Offer is conditioned upon, among other things, there being
validly tendered by the Expiration Date (as defined in the Offer) and not
withdrawn a number of Shares which, together with the Shares then owned by the
Purchaser, represents at least a majority of the total number of outstanding
shares on a fully diluted basis.
4. Any stock transfer taxes applicable to the sale of Shares to the
Purchaser pursuant to the Offer will be paid by the Purchaser, except as
otherwise provided in Instruction 6 of the Letter of Transmittal.
If you wish to have us tender any or all of your Shares, please so
instruct us by completing, executing, detaching and returning to us the
instruction form on the detachable part hereof. An envelope to return your
instructions to us is enclosed. If you authorize tender of your Shares, all
such Shares will be tendered unless otherwise specified on the detachable part
hereof. Your instructions should be forwarded to us in ample time to permit
us to submit a tender on your behalf by the expiration of the Offer.
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 acceptance thereof would not be in compliance with the laws of such
jurisdiction.
Payment for Shares purchased pursuant to the Offer will in all cases be
made only after timely receipt by Citibank, N.A. (the "Depositary") of (a)
Share Certificates or timely confirmation of the book-entry transfer of such
Shares into the account maintained by the Depositary at The Depository Trust
Company, the Midwest Securities Trust Company or the Philadelphia Depository
Trust Company (collectively, the "Book-Entry Transfer Facilities"), pursuant
to the procedures set forth in Section 3 of the Offer to Purchase, (b) 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 the Offer to Purchase), in connection with a book-entry delivery,
and (c) any other documents required by the Letter of Transmittal.
Accordingly, payment may not be made to all tendering shareholders at the same
time depending upon when certificates for or confirmations of book-entry
transfer of such Shares into the Depositary's account at a Book-Entry Transfer
Facility are actually received by the Depositary. 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 will be deemed to be made on behalf of
the Purchaser by Morgan Stanley & Co. Incorporated or one or more registered
brokers or dealers licensed under the laws of such jurisdiction.
Instructions with Respect to
Offer to Purchase for Cash
All Outstanding Shares of Common Stock
of
NetWorth, Inc.
at
$42.00 Per Share
by
Compaq-Dallas, Inc.
a wholly owned subsidiary of
Compaq Computer Corporation
The undersigned acknowledge(s) receipt of your letter and the enclosed
Offer to Purchase dated November 9, 1995, and the related Letter of
Transmittal, in connection with the offer by Compaq-Dallas, Inc. to purchase
all outstanding shares of Common Stock, $.01 par value per share (the
"Shares"), of NetWorth, Inc.
This will instruct you to tender the number of Shares indicated below
held by you for the account of the undersigned, upon the terms and subject to
the conditions set forth in the Offer to Purchase and the related Letter of
Transmittal.
- ------------------------------------
Number of Shares to be Tendered:* | SIGN HERE
|
Shares |
| -----------------------------------------
- ------------------------------------
-----------------------------------------
-----------------------------------------
Signature(s)
-----------------------------------------
-----------------------------------------
Please Print name(s) and address(es) here
-----------------------------------------
-----------------------------------------
Area Code & Telephone Number(s)
-----------------------------------------
Tax Identification or
Social Security Number(s)
Dated: ______________________199__
* Unless otherwise indicated, it will be assumed that all Shares held by us
for your account are to be tendered.
Compaq Computer Corporation P.O. Box 692000 NEWS RELEASE
Public Relations Department Houston, Texas 77269-2000
Tel 713-514-0484 Fax 713-514-4583
[COMPAQ LOGO]
Compaq Announces Agreement To Acquire NetWorth, Inc.
Compaq Plans to Extend Internetworking Product Line
to Include Stackable Hubs, High Speed Hubs
And Ethernet Switches
HOUSTON, November 6, 1995 -- Compaq Computer Corporation (NYSE: CPQ)
today announced it had reached a definitive agreement to acquire NetWorth,
Inc. (NASDAQ: NWTH). Compaq will commence a tender offer to acquire all the
outstanding shares of NetWorth, Inc. for $42.00 per share in cash for an
approximate purchase price of $372 million. The Board of Directors and
management team of NetWorth support this transaction and recommend shareholder
acceptance. Compaq anticipates distributing tender offer materials around
November 9, 1995. Upon the successful completion of the tender officer,
NetWorth will become a wholly owned subsidiary of Compaq. Founded in 1985,
and headquartered in Irving, Texas and San Jose, Calif., NetWorth is a leading
developer, manufacturer and supplier of Fast Ethernet hubs, switches and
related products.
The proposed acquisition of NetWorth will help Compaq accelerate the
adoption of client/server networked computing through increased ease of use,
performance, and network management. The acquisition of NetWorth, just three
weeks after the announced acquisition of Thomas-Conrad, represents the rapid
fulfillment of Compaq's promise to deliver a complete line of internetworking
products. "These acquisitions accelerate the evolution of Compaq from a PC
company to a full service computer company," said Eckhard Pfeiffer, president
and chief executive officer of Compaq Computer Corporation.
Pfeiffer added, "NetWorth enhances our ability to supply world-class
price:performance products through our vast distribution network, and clearly
underscores our commitment to provide our customers with a complete, end-to-end
Compaq network solution of the highest quality. Our offer of $42 per share
reflects the recent success of NetWorth's strategy and the potential of our
combined strengths."
NetWorth's product line includes a broad range of Ethernet and Fast
Ethernet hubs, Switching hubs, and Network Management products. NetWorth's
stackable 10BaseT repeaters hold a five percent market share,(1) while the
Fast Ethernet product line is number two in overall shipments and currently
holds approximately 20 percent market share.(2)
"Given the breadth of NetWorth's Fast Ethernet product line and rapid
market acceptance, we believe the combined organizations will quickly become a
market leader in the fast growing internetworking arena," said Gary Stimac,
senior vice president and general manager of Compaq's Systems Division.
Stimac added, "Between the NetWorth merger, the routing partnership with Cisco
and the recent acquisition of Thomas-Conrad, Compaq can now deliver a full
suite of products meeting the needs of departmental and workgroup customers."
In June, Compaq announced its strategy to create end-to-end,
easy-to-use computing solutions -- that is, to provide customers with clients,
servers, network interface cards (NICs), routers, hubs and network management,
all tightly integrated and tested. At the same time, Compaq formed a
partnership with Cisco Systems, Inc. to jointly develop a new router platform
based on industry standard hardware and Cisco IOS(TM). Compaq's goal is to
simplify the deployment of client/server computing systems while reducing the
overall cost of owning and maintaining those systems. With a 41 percent
market share worldwide(3), Compaq is the market share leader in x86-based
servers.
Compaq announced its acquisition of Thomas-Conrad Corporation, a
privately held Austin, Texas-based manufacturer of NICs and hubs, during the
company's Innovate Forum 95 conference last month. "Taken together, the
Thomas-Conrad and NetWorth acquisitions, along with the Cisco partnership,
will give us all of the components we need to provide our resellers end-to-end
client/server Compaq solutions," said Ross Cooley, senior vice president of
Compaq North America. "This is a tremendous opportunity for our channels to
offer integrated solutions to their customers, providing greater value and
better accountability through a single vendor."
Consolidation in the internetworking industry has significantly
altered the competitive landscape in the past few years, requiring economies
of scale and breadth of product to compete effectively. "The merger catapults
NetWorth into a position where we can continue to offer a competitive choice
to the market, and attain top-tier supplier status," said John McHale, founder
and chief executive officer of NetWorth. "It's a tremendous opportunity for
NetWorth to accelerate market share gains by leveraging Compaq's worldwide
distribution partners." McHale will become a corporate vice president of
Compaq Computer Corporation, and a senior member of the Compaq Systems
Division team reporting to Gary Stimac.
Completion of the transaction is subject to conditions including
clearance under the Hart-Scott-Rodino Antitrust Improvements Act.
Company Background
Compaq Computer Corporation is the world's largest supplier of
personal computers, offering desktop PCs, portable PCs, servers and options.
Founded in 1982, the Company reported 1994 worldwide sales of $10.9 billion.
Compaq products are sold and supported in more than 100 countries throughout
the world. Compaq also sells directly to customers through Compaq Direct Plus
at 1-800-888-5858. Compaq provides a 24-hour customer report and can be
reached through the Compaq forums on America Online, CompuServe, Internet
(http://www.compaq.com), and Prodigy, or by calling 1-800-345-1518. Further
information about NetWorth can be found on their homepage through the Internet
(http://www.networth.com).
# # #
Compaq, ProSignia, ProLiant, SmartStart, Insight Manager, Deskpro, DirectPlus,
and NetFlex are registered trademarks of Compaq Computer Corporation, U.S.
Patent and Trademark Office. Product names mentioned herein may be trademarks
and/or registered trademarks of their respective companies. For further
editorial information, contact:
Compaq Computer Corporation
Nora Hahn, Mike Berman, Yvonne Donaldson 713-514-0484
John Sweney, Jerele Neeld
Miller/Shandwick Technologies
Donna Ruane, Jessen Wehrwein 617-536-0470
Scott Collins ([email protected])
- -----------
(1) Source: IDC April, 1995
(2) Source: Dell'Oro Group for the quarter ending September 30, 1995
(3) Source: IDC figures for 2Q 1995
This announcement is not an offer to purchase or a solicitation of an offer
to sell Shares (as defined below). The Offer (as defined below) is made
solely by the Offer to Purchase dated November 9, 1995 and the related
Letter of Transmittal and 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 acceptance thereof would not be in
compliance with the laws of such jurisdiction. In those jurisdictions
where the applicable laws require that the Offer be made by a licensed
broker or dealer, the Offer shall be deemed to be made on behalf of
Purchaser by the Dealer Manager (as defined below) 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
NetWorth, Inc.
at
$ 42.00 Net per Share
by
Compaq-Dallas, Inc.
a wholly owned subsidiary of
Compaq Computer Corporation
Compaq-Dallas, Inc., a Delaware corporation (the "Purchaser")
and a wholly owned subsidiary of Compaq Computer Corporation, a Delaware
corporation ("Parent"), hereby offers to purchase all outstanding shares of
Common Stock, $0.01 par value (the "Shares"), of NetWorth, Inc., a Delaware
corporation (the "Company"), at $42.00 per Share, net to the seller in cash,
upon the terms and subject to the conditions set forth in the Offer to
Purchase dated November 9, 1995 (the "Offer to Purchase") and in the related
Letter of Transmittal (which together constitute the "Offer"). Tendering
stockholders will not be obligated to pay brokerage fees or commissions or,
except as set forth in Instruction 6 of the Letter of Transmittal, transfer
taxes on the purchase of Shares pursuant to the Offer. Purchaser will pay all
charges and expenses of Morgan Stanley & Co. Incorporated (the "Dealer
Manager"), Citibank, N.A. (the "Depositary") and Georgeson & Company Inc. (the
"Information Agent") incurred in connection with the Offer.
THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON FRIDAY, DECEMBER 8, 1995, UNLESS THE OFFER IS EXTENDED.
The Offer is conditioned upon, among other things, there being
validly tendered and not withdrawn prior to the Expiration Date (as defined in
the Offer to Purchase) a number of Shares which, together with the Shares then
owned by the Purchaser, represents at least a majority of the total number of
outstanding shares on a fully diluted basis (the "Minimum Condition").
The purpose of the Offer is to acquire control of, and the entire
equity interest in, the Company. The Offer is being made pursuant to an
Agreement and Plan of Merger dated as of November 5, 1995 (the "Merger
Agreement"), among the Company, Parent and Purchaser. The Merger Agreement
provides, among other things, that as soon as practicable after the
consummation of the Offer and satisfaction of, or to the extent permitted
under the Merger Agreement, waiver of all conditions to the Merger, Purchaser
will be merged with and into the Company (the "Merger"), with the Company as
the surviving corporation, whereupon the Company will become a wholly owned
subsidiary of Parent. Thereupon, each outstanding share (other than Shares
held by the Company as treasury stock or owned by Parent or any subsidiary of
Parent (including Purchaser) and Shares held by stockholders exercising
appraisal rights) will be converted into and represent the right to receive
$42.00 in cash, without interest.
The Board of Directors of the Company has determined that the Offer
and the Merger are fair to, and in the best interests of, the Company and its
stockholders, has approved the Offer and the Merger and recommends that the
Company's stockholders accept the Offer and tender their Shares pursuant to
the Offer.
The Offer is subject to certain conditions set forth in the Offer to
Purchase. If any such condition is not satisfied, the Purchaser may, subject
to certain limitations set forth in the Merger Agreement and described in the
Offer to Purchase, (i) terminate the Offer and return all tendered Shares to
tendering stockholders, (ii) extend the Offer and, subject to withdrawal
rights as set forth below, retain all such Shares until the expiration of the
Offer as so extended, (iii) waive such condition and, subject to any
requirement to extend the period of time during which the Offer is open,
purchase all Shares validly tendered prior to the Expiration Date and not
withdrawn or (iv) delay acceptance for payment or payment for Shares, subject
to applicable law, until satisfaction or waiver of the conditions to the
Offer; provided, however, that no change may be made which changes the
consideration to be paid or decreases the price per Share or the number of
Shares sought in the Offer or which imposes conditions to the Offer in
addition to the Minimum Condition and those conditions set forth in the Offer
to Purchase or amends such conditions in a manner adverse to the Company.
The Purchaser reserves the right, at any time or from time to time,
to extend the period of time during which the Offer is open 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. During
any such extension, all Shares previously tendered and not withdrawn will
remain subject to the Offer, subject to applicable withdrawal rights.
For purposes of the Offer, the Purchaser shall be deemed to have
accepted for payment tendered Shares when, as and if the Purchaser gives oral
or written notice to the Depositary of its acceptance of the tenders of such
Shares. Payment for Shares accepted for payment pursuant to the Offer will be
made only after timely receipt by the Depositary of certificates for 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 properly completed and duly executed Letter of
Transmittal (or facsimile thereof) and any other required documents.
Tenders of Shares made pursuant to the Offer may be withdrawn at any
time prior to the Expiration Date. Thereafter, such tenders are irrevocable,
except that they may be withdrawn after January 7, 1996 unless theretofore
accepted for payment as provided in the Offer to Purchase. 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 set forth in
the Offer to Purchase and must specify the name of the person who tendered the
Shares to be withdrawn and the number of Shares to be withdrawn. If the
Shares to be withdrawn have been delivered to the Depositary, a signed notice
of withdrawal with (except in the case of Shares tendered by an Eligible
Institution (as defined in the Offer to Purchase)) signatures guaranteed by an
Eligible Institution must be submitted prior to the release of such Shares.
In addition, such notice must specify, in the case of Shares tendered by
delivery of certificates, the name of the registered holder (if different from
that of the tendering stockholder) and the serial numbers shown on the
particular certificates evidencing the Shares to be withdrawn or, in the case
of Shares tendered by book-entry transfer, the name and number of the account
at one of the Book-Entry Transfer Facilities to be credited with the withdrawn
Shares.
The information required to be disclosed by paragraph (e)(1)(vii) of
Rule 14d-6 of the General Rules and Regulations under the Securities Exchange
Act of 1934 is contained in the Offer to Purchase and is incorporated herein
by reference.
The Company is providing its stockholder list and security position
listings for the purpose of disseminating the Offer to holders of Shares. The
Offer to Purchase and the related Letter of Transmittal will be mailed to
record holders of Shares and will be furnished to brokers, banks 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 Letter of Transmittal contain important
information which should be read before any decision is made with respect to
the Offer.
Requests for copies of the Offer to Purchase and the related Letter
of Transmittal and other tender offer materials may be directed to the
Information Agent or the Dealer Manager as set forth below, and copies will be
furnished promptly at the Purchaser's expense. No fees or commissions will be
paid to brokers, dealers or other persons (other than the Information Agent
and the Dealer Manager) for soliciting tenders of Shares pursuant to the Offer.
The Information Agent for the Offer is:
Georgeson & Company Inc.
Wall Street Plaza
New York, NY 10005
(800) 223-2064
The Dealer Manager for the Offer is:
Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
(212) 761-6409
Call Toll Free (800) 223-2440 ext. 6409
November 9, 1995
U.S. $1,000,000,000
REVOLVING CREDIT AGREEMENT
Dated as of October 31, 1995
among
COMPAQ COMPUTER CORPORATION,
THE BANKS PARTY HERETO
and
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION,
As Administrative Agent
NATIONSBANK OF TEXAS, NATIONAL ASSOCIATION
and
CITIBANK, N.A.,
As Co-Agents
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
1.01 Certain Defined Terms.......................................... 1
1.02 Other Interpretive Provisions.................................. 14
1.03 Accounting Principles.......................................... 15
ARTICLE II
THE CREDITS
2.01 Amounts and Terms of Commitments............................... 15
2.02 Notes.......................................................... 15
2.03 Procedure for Revolving Loan Borrowings........................ 16
2.04 Conversion and Continuation Elections for Revolving Loan
Borrowings..................................................... 17
2.05 Procedure for Swingline Borrowings............................. 18
2.06 Increase of Commitments........................................ 20
2.07 Ratable Reduction or Termination of Commitments................ 21
2.08 Non-Ratable Reduction or Termination of Commitments............ 21
2.09 Optional and Mandatory Prepayments............................. 22
2.10 Repayment...................................................... 23
2.11 Interest....................................................... 23
2.12 Fees........................................................... 23
2.13 Computation of Fees and Interest............................... 23
2.14 Interest Rate Determination and Protection..................... 24
2.15 Payments by the Company........................................ 25
2.16 Payments by the Banks to the Agent............................. 25
2.17 Sharing of Payments, Etc....................................... 26
ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY
3.01 Taxes.......................................................... 27
3.02 Breakage Costs................................................. 28
3.03 Increased Costs................................................ 28
3.04 Illegality..................................................... 29
3.05 Reserves on Offshore Loans..................................... 29
3.06 Replacement of Bank; Termination of Bank....................... 30
3.07 Reallocation of Commitments in Event of Merger, Etc............ 31
3.08 Certificates of Banks.......................................... 32
3.09 Survival....................................................... 32
ARTICLE IV
CONDITIONS PRECEDENT
4.01 Conditions of Initial Loans.................................... 32
4.02 Conditions to All Borrowings................................... 33
ARTICLE V
REPRESENTATIONS AND WARRANTIES
5.01 Corporate Existence............................................ 34
5.02 Corporate Power................................................ 34
5.03 Authorization and Approvals.................................... 34
5.04 Enforceable Obligations........................................ 34
5.05 Financial Statements........................................... 35
5.06 Litigation..................................................... 35
5.07 Regulation U; Use of Proceeds.................................. 35
5.08 Investment Company Act......................................... 36
5.09 ERISA.......................................................... 36
5.10 Holding Company................................................ 36
5.11 Environmental Condition........................................ 36
5.12 No Material Adverse Change..................................... 36
ARTICLE VI
AFFIRMATIVE COVENANTS
6.01 Compliance with Laws Etc....................................... 36
6.02 Reporting Requirements......................................... 37
6.03 Use of Proceeds................................................ 37
6.04 Maintenance of Insurance....................................... 37
6.05 Corporate Existence Etc........................................ 38
6.06 Visitation Rights.............................................. 38
ARTICLE VII
NEGATIVE COVENANTS
7.01 Consolidated Tangible Net Worth................................ 38
7.02 Leverage Ratio................................................. 38
7.03 Liens.......................................................... 38
ARTICLE VIII
EVENTS OF DEFAULT
8.01 Event of Default............................................... 39
8.02 Remedies....................................................... 40
8.03 Rights Not Exclusive........................................... 40
ARTICLE IX
THE AGENT
9.01 Appointment and Authorization.................................. 40
9.02 Delegation of Duties........................................... 41
9.03 Liability of Agent............................................. 41
9.04 Reliance by Agent.............................................. 41
9.05 Notice of Default.............................................. 42
9.06 Credit Decision................................................ 42
9.07 Indemnification................................................ 42
9.08 Agent in Individual Capacity................................... 43
9.09 Successor Agent................................................ 43
9.10 Withholding Tax................................................ 44
9.11 Co-Agent....................................................... 45
ARTICLE X
MISCELLANEOUS
10.01 Amendments and Waivers......................................... 45
10.02 Notices........................................................ 46
10.03 No Waiver: Cumulative Remedies................................. 46
10.04 Costs and Expenses............................................. 47
10.05 Indemnity...................................................... 47
10.06 Payments Set Aside............................................. 47
10.07 Binding Effect; Assignments; Participations.................... 48
10.08 Set-off........................................................ 49
10.09 Interest....................................................... 49
10.10 Confidentiality................................................ 50
10.11 Preservation of Certain Matters................................ 51
10.12 Notification of Addresses, Lending Offices Etc................. 52
10.13 Counterparts................................................... 52
10.14 Severability................................................... 52
10.15 Governing Law; Jurisdiction.................................... 52
10.16 WAIVER OF JURY TRIAL........................................... 52
10.17 ENTIRE AGREEMENT............................................... 53
SCHEDULES
Schedule 10.02 Notice Addresses, Payment and Lending Offices
EXHIBITS
Exhibit A Form of Notice of Borrowing
Exhibit B Form of Notice of Conversion/Continuation
Exhibit C Form of Compliance Certificate
Exhibit D-1 Form of Opinion of Senior Vice President and General Counsel
of the Company
Exhibit D-2 Form of Opinion of Corporate Counsel of the Company
Exhibit E Form of Note
REVOLVING CREDIT AGREEMENT
dated as of October 31, 1995
COMPAQ COMPUTER CORPORATION, a Delaware corporation (the "Company"), the
several financial institutions from time to time party to this Agreement
(collectively, the "Banks", and individually, a "Bank"), and Bank of America
National Trust and Savings Association, as administrative agent for the Banks,
agree as follows.
ARTICLE I
DEFINITIONS
1.01 Certain Defined Terms. The following terms have the following
meanings:
"Acquiring Entity" has the meaning specified in Section 3.07.
"Adjusted CD Rate" means, for any Interest Period for each Adjusted CD
Rate Revolving Loan comprising part of the same Borrowing or an Adjusted CD
Rate Swingline Loan, as the case may be, an interest rate per annum equal to
the sum of:
(a) the rate per annum obtained by dividing (i) the rate of
interest determined by the Agent to be the average (rounded upward to
the nearest whole multiple of 1/100 of 1% per annum, if such average is
not such a multiple) of the consensus bid rate determined by each of the
Reference Banks, in the case of Adjusted CD Rate Revolving Loans, or the
Swingline Bank, in the case of an Adjusted CD Rate Swingline Loan, for
the bid rates per annum, at 9:00 a.m. (Houston time) (or as soon
thereafter as practicable) on the first day of such Interest Period, of
New York certificate of deposit dealers of recognized standing selected
by such Reference Bank or the Swingline Bank, as applicable, for the
purchase at face value of certificates of deposit of such Reference Bank
or the Swingline Bank, as applicable, in an amount substantially equal
to such Reference Bank's Adjusted CD Rate Revolving Loan comprising part
of such Borrowing, in the case of Adjusted CD Rate Revolving Loans, or
the Adjusted CD Rate Swingline Loan, in the case of an Adjusted CD Rate
Swingline Loan, and with a maturity equal to such Interest Period
(provided that, if bid rate quotes from such dealers are not available
to any Reference Bank or the Swingline Bank, as applicable, such
Reference Bank or the Swingline Bank shall notify the Agent of a
reasonably equivalent rate determined by it on the basis of another
source or sources selected by it), by (ii) a percentage equal to 100%
minus the Adjusted CD Rate Reserve Percentage for such Interest Period
(the "Certificate of Deposit Rate"), plus
(b) the Assessment Rate for such Interest Period.
The Adjusted CD Rate for the Interest Period for each Adjusted CD Rate
Revolving Loan comprising part of the same Borrowing or an Adjusted CD
Rate Swingline Loan, as the case may be, shall be determined by the
Agent on the basis of applicable rates furnished to and received by the
Agent as set forth above on the first day of such Interest Period,
subject however, to the provisions of Section 2.14.
"Adjusted CD Rate Revolving Loan" means a Revolving Loan which bears
interest at the Adjusted CD Rate plus the Applicable Margin.
"Adjusted CD Rate Reserve Percentage" for any Interest Period for each
Adjusted CD Rate Revolving Loan comprising part of the same Borrowing or an
Adjusted CD Rate Swingline Loan, as the case may be, means the reserve
percentage applicable on the first day of such Interest Period under
regulations issued from time to time by the FRB for determining the maximum
reserve requirement (including, but not limited to, any emergency,
supplemental or other marginal reserve requirement) for a member bank of the
Federal Reserve System in New York City with deposits exceeding one billion
dollars with respect to liabilities consisting of or including U.S. dollar
nonpersonal time deposits in the United States with a maturity equal to such
Interest Period.
"Adjusted CD Rate Swingline Loan" means a Swingline Loan which bears
interest at the Adjusted CD Rate plus the Applicable Margin.
"Affiliate" means, as to any Person, any other Person which, directly or
indirectly, is in control of, is controlled by, or is under common control
with, such Person. A Person shall be deemed to control another Person if the
controlling Person possesses, directly or indirectly, the power to direct or
cause the direction of the management and policies of the other Person,
whether through the ownership of voting securities, by contract or otherwise.
"Agent" means BofA in its capacity as administrative agent for the Banks
hereunder, and any successor administrative agent.
"Agent-Related Persons" means BofA and any successor administrative
agent arising under Section 9.09, together with their respective Affiliates
(including, in the case of BofA, the Arranger), and the officers, directors,
employees, agents and attorneys-in-fact of such Persons and Affiliates.
"Agent's Payment Office" means the address for payments set forth on
Schedule 10.02 or such other address as the Agent may from time to time
specify.
"Agreement" means this Revolving Credit Agreement.
"Applicable Fee Amount" means, for any date, the per annum percentage
amount set forth below based on the Applicable Rating on such date:
Applicable
Rating Fee Percentage
---------- -------------
A+/A1 (or higher) 0.0700%
A/A2 0.0800%
A-/A3 0.0900%
BBB+/Baa1 0.1000%
BBB/Baa2 0.1375%
BBB-/Baa3 0.1875%
BB+/Ba1 0.2500%
(or lower, or no
Applicable Rating)
"Applicable Margin" means, on any date and with respect to each CD Loan
or Offshore Loan outstanding on such date, the applicable margin (on a per
annum basis) set forth below based on the Applicable Rating on such date:
Applicable CD Offshore
Rating Loans Loans
---------- ----- --------
A+/A1 (or higher) 0.2250% 0.2250%
A/A2 0.2500% 0.2500%
A-/A3 0.2750% 0.2750%
BBB+/Baa1 0.3000% 0.3000%
BBB/Baa2 0.4000% 0.4000%
BBB-/Baa3 0.4375% 0.4375%
BB+/Ba1 0.7500% 0.7500%
(or lower, or no
Applicable Rating)
Provided, that at any time as the aggregate outstanding principal amount
of Revolving Loans, together with the aggregate outstanding principal
amount of "Revolving Loans" under, and as that term is defined in, the
364-Day Credit Agreement, exceeds 50% of the combined Commitments of all
the Banks, together with the combined "Commitments" of all the lenders
under, and as that term is defined in, the 364-Day Credit Agreement (and
any time after the termination of commitments to lend under clause (a)
of Section 8.02 or under paragraph (b) or (c) of Section 2.09 hereof, or
of the 364-Day Credit Agreement, as applicable), the Applicable Margin
in respect of CD Loans and Offshore Loans hereunder shall be increased
by an additional 0.125 percentage points.
"Applicable Rating" means the most favorable ratings issued from time to
time by S&P or Moody's as applicable to the Company's senior unsecured
long-term debt; provided that (a) if the most favorable ratings established by
such rating agencies indicate two different pricing levels, the level
corresponding to the more favorable of such ratings shall apply, (b) if only
one such rating agency shall provide a rating as to the Company's senior
unsecured long-term debt, the pricing level shall be determined based upon
such rating, and (c) if the ratings system of either of S&P or Moody's shall
change prior to the date all Obligations have been paid and the Commitments
cancelled, the Company, Agent and Banks shall negotiate in good faith to amend
this Agreement promptly to reflect such changed system.
"Arranger" means BA Securities, Inc., a Delaware corporation.
"Assessment Rate" for any Interest Period for each Adjusted CD Rate
Revolving Loan comprising part of the same Borrowing or an Adjusted CD Rate
Swingline Loan, as the case may be, means the rate determined by the Agent as
equal to the annual assessment rate in effect on the first day of such
Interest Period payable to the FDIC by a member of the Bank Insurance Fund
that is classified as adequately capitalized and within supervisory subgroup
"A" (or a comparable successor assessment risk classification within the
meaning of 12 C.F.R. Section 327.3) for insuring time deposits at offices of
such member in the United States; or, in the event that the FDIC shall at any
time hereafter cease to assess time deposits based upon such classifications
or successor classifications, equal to the maximum annual assessment rate in
effect on such day that is payable to the FDIC by commercial banks (whether or
not applicable to any particular Bank) for insuring time deposits at offices
of such banks in the United States.
"Attorney Costs" means and includes the reasonable fees and
disbursements of any law firm or other external counsel and the allocated cost
of internal counsel.
"Bank" has the meaning specified in the introductory clause hereto.
References to the "Banks" shall include references to BofA in its capacity as
the Swingline Bank. For purposes of clarification only, to the extent that
BofA may have any rights or obligations in addition to those of the Banks due
to its status as the Swingline Bank, its status as such will be specifically
referenced.
"Bankruptcy Code" means the Federal Bankruptcy Reform Act of 1978 (11
U.S.C. Section 101, et seq.).
"Base Loan" means any Base Rate Revolving Loan or any Base Rate
Swingline Loan.
"Base Rate" means, for any day, the higher of: (a) 1/2% above the latest
Federal Funds Rate, and (b) the rate of interest in effect for such day as
publicly announced from time to time by the Bank which is the Agent at its
principal office, as its "prime" or "reference" rate (or comparable rate, if
such Bank does not so designate a "prime" or "reference" rate). The prime or
reference rate is a rate set by such Bank based upon various factors including
such Bank's costs and desired return, general economic conditions and other
factors, and is used as a reference point for pricing some loans, which may be
priced at, above, or below such announced rate. Any change in the prime or
reference rate announced by such Bank shall take effect at the opening of
business on the day specified in the public announcement of such change.
"Base Rate Revolving Loan" means a Revolving Loan that bears interest
based on the Base Rate.
"Base Rate Swingline Loan" means a Swingline Loan which bears interest
based on the Base Rate.
"BofA" means Bank of America National Trust and Savings Association, a
national banking association.
"Borrowing" means a borrowing hereunder consisting of (a) Revolving
Loans of the same Type made to the Company on the same day by the Banks, or
(b) a Swingline Loan made to the Company by the Swingline Bank, in each case
pursuant to Article II.
"Borrowing Date" means any date on which a Borrowing occurs under
Section 2.03 or 2.05.
"Business Day" means (i) any day of the year except Saturday, Sunday and
any day on which banks are required or authorized to close in New York City or
San Francisco and (ii) if the applicable Business Day relates to any Offshore
Loan, any day which is a "Business Day" described in clause (i) and which is
also a day for trading by and between banks in the London interbank Eurodollar
market.
"Certificate of Deposit Rate" has the meaning specified in the
definition of "Adjusted CD Rate."
"CD Lending Office" means, with respect to any Bank, the office of such
Bank specified as its "CD Lending Office" opposite its name on Schedule 10.02
or in the document pursuant to which it became a party hereto as contemplated
by Section 2.06, 3.06(a), 3.07 or 10.07(c) (or, if no such office is
specified, its Domestic Lending Office) or such other office of such Bank as
such Bank may from time to time specify to the Company and the Agent.
"CD Loan" means any Adjusted CD Rate Revolving Loan or any Adjusted CD
Rate Swingline Loan.
"Change in Control" means the direct or indirect acquisition by any
person (as such term is used in Section 13(d) and Section 14(d)(2) of the
Exchange Act), or related persons constituting a group (as such term is used
in Rule 13d-5 under the Exchange Act), of (a) beneficial ownership of issued
and outstanding shares of voting stock of a corporation or other entity, the
result of which acquisition is that such person or such group possesses in
excess of 50% of the combined voting power of all then-issued and outstanding
voting stock of such corporation or other entity, or (b) the power to elect,
appoint, or cause the election or appointment of at least a majority of the
members of the board of directors of such corporation or other entity.
"Closing Date" means the date on which all conditions precedent set
forth in Section 4.01 are satisfied or waived by all Banks.
"Code" means the Internal Revenue Code of 1986, and regulations
promulgated thereunder.
"Commitment", as to each Bank, has the meaning specified in Section
2.01(a).
"Commitment Percentage" means, as to any Bank at any time, the
percentage equivalent (expressed as a decimal, rounded to the ninth decimal
place) at such time of such Bank's Commitment divided by the combined
Commitments of all Banks.
"Company" means Compaq Computer Corporation, a Delaware corporation and
successors thereto.
"Compliance Certificate" means a certificate substantially in the form
of Exhibit C.
"Consolidated Net Worth" means at any date the consolidated
stockholders' equity of the Company and its consolidated Subsidiaries
(excluding any Redeemable Preferred Stock of the Company).
"Consolidated Tangible Net Worth" means at any date Consolidated Net
Worth less the amount, if any, in excess of $25,000,000 of consolidated
"intangible assets" (as defined below) included in determining Consolidated
Net Worth. For the purposes of this definition, "intangible assets" means the
sum of (i) all write-ups (other than write-ups resulting from foreign currency
translations and write-ups of assets of a going concern business made within
twelve months after the acquisition of such business) subsequent to December
31, 1994 in the book value of any asset owned by the Company or a Subsidiary
of the Company and (ii) all unamortized goodwill, patents, trademarks, service
marks, trade names, copyrights, organization or developmental expenses and
other intangible items.
"Conversion/Continuation Date" means any date on which, under Section
2.04, the Company (a) converts Revolving Loans of one Type to another Type, or
(b) continues as Revolving Loans of the same Type, but with a new Interest
Period, Revolving Loans having Interest Periods expiring on such date.
"Debt" of any Person means, at any date, without duplication, (i)
obligations for the repayment of money borrowed which are or should be shown
on a balance sheet as debt in accordance with GAAP, (ii) obligations as lessee
under leases which, in accordance with GAAP, are capital leases, (iii)
non-contingent reimbursement and payment obligations with respect to letters
of credit, bank guaranties or banker's acceptances, and (iv) guaranties of
payment or collection of any obligations described in clauses (i), (ii) and
(iii) of other Persons; provided, that clauses (i), (ii) and (iii) include, in
the case of obligations of the Company or any Subsidiary, only such
obligations as are or should be shown as debt or capital lease liabilities on
a consolidated balance sheet in accordance with GAAP; and provided, further,
that the liability of any Person as a general partner of a partnership for
Debt of such partnership, if the partnership is not a Subsidiary of such
Person, shall not constitute "Debt."
"Default" means any event or circumstance which, with the giving of
notice, the lapse of time, or both, would (if not cured or otherwise remedied
during such time) constitute an Event of Default.
"Dollars", "dollars" and "$" each mean lawful money of the United States.
"Domestic Lending Office" means, with respect to any Bank, the office of
such Bank specified as its "Domestic Lending Office" opposite its name on
Schedule 10.02 hereto or in the document pursuant to which it became a party
hereto as contemplated by Section 2.06, 3.06(a), 3.07 or 10.07(c) or such
other office of such Bank as such Bank may from time to time specify to the
Company and the Agent.
"Eligible Assignee" means (i) a commercial bank organized under the laws
of the United States, or any state thereof, and having a combined capital and
surplus of at least $200,000,000; (ii) a commercial bank organized under the
laws of any other country which is a member of the Organization for Economic
Cooperation and Development or a political subdivision of any such country,
and having a combined capital and surplus of at least $200,000,000, provided
that such bank is acting through a branch or agency located in the United
States; and (iii) a Person that is primarily engaged in the business of
commercial banking and that is (A) a Subsidiary of a Bank, (B) a Subsidiary of
a Person of which a Bank is a Subsidiary, or (C) a Person of which a Bank is a
Subsidiary.
"Environment" or "Environmental" has the meanings set forth in the
Comprehensive Environmental Response, Compensation and Liability Act at 42
U.S.C. Section 9601(8) (1982).
"Environmental Protection Statute" means any United States local, state
or federal, or any foreign, law, statute, regulation, order, consent decree or
other agreement or Requirement of Law pertaining to the protection or
regulation of the Environment, including, without limitation, those laws,
statutes, regulations, orders, decrees, agreements and other Requirements of
Law relating to the disposal, cleanup, production, storing, refining,
handling, transferring, processing or transporting of Hazardous Waste,
Hazardous Substances or any pollutant or contaminant, wherever located.
"ERISA" means the Employee Retirement Income Security Act of 1974, and
regulations promulgated thereunder.
"Eurocurrency Liabilities" has the meaning assigned to that term in
Regulation D of the FRB.
"Event of Default" means any of the events or circumstances specified in
Section 8.01.
"Exchange Act" means the Securities Exchange Act of 1934, and
regulations promulgated thereunder.
"FDIC" means the Federal Deposit Insurance Corporation, and any
Governmental Authority succeeding to any of its principal functions.
"Federal Funds Rate" means, for any day, the rate set forth in the
weekly statistical release designated as H.15(519), published by the FRB on
the preceding Business Day opposite the caption "Federal Funds (Effective)";
or, if any relevant day such rate is not so published on any such preceding
Business Day, the rate for such day will be the arithmetic mean as determined
by the Agent of the rates for the last transaction in overnight Federal funds
arranged prior to 9:00 a.m. (New York City time) on that day by each of three
leading brokers of Federal funds transactions in New York City selected by the
Agent.
"FRB" means the Board of Governors of the Federal Reserve System, and any
Governmental Authority succeeding to any of its principal functions.
"GAAP" means generally accepted accounting principles set forth from
time to time in the opinions and pronouncements of the Accounting Principles
Board and the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards Board (or
agencies with similar functions of comparable stature and authority within the
U.S. accounting profession), which are applicable to the circumstances as of
the date of determination.
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof, any central bank (or similar monetary or
regulatory authority) thereof, any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to
government, and any corporation or other entity owned or controlled, through
stock or capital ownership or otherwise, by any of the foregoing.
"Hazardous Substance" has the meaning set forth in the Comprehensive
Environmental Response, Compensation and Liability Act at 42 U.S.C. Section
9601(14) and also includes each other substance considered to be a hazardous
substance under any analogous statute or regulation.
"Hazardous Waste" has the meaning set forth in the Resource Conservation
and Recovery Act at 42 U.S.C. Section 6903(5) and also includes each other
substance considered to be a hazardous waste under any analogous statute or
regulation (including 40 C.F.R. Section 261.3).
"Highest Lawful Rate" means, with respect to each Bank, the maximum
nonusurious interest rate, if any, that at any time or from time to time may
be contracted for, taken, reserved, charged or received on the Loans or on
other indebtedness outstanding under this Agreement or the Notes applicable to
such Bank which is presently in effect or, to the extent allowed by law, under
such applicable laws which may hereafter be in effect and which allow a higher
maximum nonusurious interest rate than applicable laws now allow.
"Information" has the meaning specified in Section 10.10.
"Insolvency Proceeding" means (a) any case, action or proceeding before
any court or other Governmental Authority relating to bankruptcy,
reorganization, insolvency, liquidation, receivership, dissolution, winding-up
or relief of debtors, or (b) any general assignment for the benefit of
creditors, composition, marshalling of assets for creditors, or other, similar
arrangement in respect of its creditors generally or any substantial portion
of its creditors; undertaken under Federal, state or foreign law, including
the Bankruptcy Code.
"Interest Payment Date" means (a) as to any Revolving Loan other than a
Base Rate Revolving Loan, the last day of each Interest Period applicable to
such Loan, provided, however, that if any Interest Period for (i) an Adjusted
CD Rate Revolving Loan exceeds 90 days, the date that falls 90 days after the
beginning of such Interest Period is also an Interest Payment Date, or (ii) a
LIBOR Revolving Loan exceeds three months, the date that falls three months
after the beginning of such Interest Period is also an Interest Payment Date,
(b) as to any Base Rate Revolving Loan, the last Business Day of each calendar
quarter and each date such Loan is converted into another Type of Revolving
Loan, and (c) as to any Swingline Loan, the last day of the Interest Period
applicable to such Loan.
"Interest Period" means (a) as to any Adjusted CD Rate Revolving Loan,
the period commencing on the Borrowing Date or on the Conversion/Continuation
Date on which a Revolving Loan is converted into or continued as an Adjusted
CD Rate Revolving Loan, and ending on the date 30, 60, 90 or 180 days
thereafter, as selected by the Company in its Notice of Borrowing or Notice of
Conversion/Continuation, as the case may be, (b) as to any LIBOR Revolving
Loan, the period commencing on the Borrowing Date or on the Conversion/
Continuation Date on which a Revolving Loan is converted into or continued as
a LIBOR Revolving Loan, and ending on the day which numerically corresponds to
such date one, two, three or six months thereafter (or if such month has no
numerically corresponding day, on the last Business Day of such month), as
selected by the Company in its Notice of Borrowing or Notice of
Conversion/Continuation, as the case may be, and (c) as to any Swingline Loan,
the period commencing on the Borrowing Date of such Loan and ending on such
date, not more than 10 days later, as agreed upon by the Company and the
Swingline Bank at the time of the Borrowing of such Loan; provided that:
(i) if any Interest Period pertaining to a CD Loan would
otherwise end on a day that is not a Business Day, that Interest Period
shall be extended to the following Business Day;
(ii) if any Interest Period pertaining to an Offshore Loan
would otherwise end on a day that is not a Business Day, that Interest
Period shall be extended to the following Business Day unless the result
of such extension would be to carry such Interest Period into another
calendar month, in which event such Interest Period shall end on the
preceding Business Day; and
(iii) no Interest Period for any Loan shall extend beyond
October 31, 2000.
"IRS" means the United States Internal Revenue Service.
"Lending Office" means, as to any Bank, the office or offices of the
Bank specified as its "CD Lending Office" or "Domestic Lending Office" or
"LIBOR Lending Office", as the case may be, on Schedule 10.02, or such other
office or offices as the Bank may from time to time notify the Company and the
Agent.
"LIBO Rate" means, for any Interest Period for each LIBOR Revolving Loan
comprising part of the same Borrowing or a LIBOR Swingline Loan, as the case
may be, an interest rate per annum equal to the average (rounded upward to the
nearest whole multiple of 1/16 of 1% per annum, if such average is not such a
multiple) of the rate per annum at which dollar deposits in immediately
available funds are offered by each of the Reference Banks, in the case of
LIBOR Revolving Loans, or the Swingline Bank, in the case of a LIBOR Swingline
Loan, to leading banks in the London interbank Eurodollar market at 11:00 a.m.
(London time) two Business Days before the first day of such Interest Period
in an amount substantially equal to the amount of the LIBOR Revolving Loan of
such Reference Bank comprising part of such Borrowing, in the case of LIBOR
Revolving Loans, or the LIBOR Swingline Loan, in the case of a LIBOR Swingline
Loan, to be outstanding during such Interest Period and for a period equal to
such Interest Period. The LIBO Rate for each Interest Period for each LIBOR
Revolving Loan comprising part of the same Borrowing or a LIBOR Swingline
Loan, as the case may be, shall be determined by the Agent on the basis of
applicable rates furnished to and received by the Agent as set forth above two
Business Days before the first day of such Interest Period, subject, however,
to the provisions of Section 2.14.
"LIBOR Lending Office" means, with respect to any Bank, the office of
such Bank specified as its "LIBOR Lending Office" opposite its name on
Schedule 10.02 or in the document pursuant to which it became a party hereto
as contemplated by Section 2.06, 3.06(a), 3.07 or 10.07(c) (or, if no such
office is specified, its Domestic Lending Office) or such other office of such
Bank as such Bank may from time to time specify to the Company and the Agent.
"LIBOR Revolving Loan" means a Revolving Loan which bears interest at
the LIBO Rate plus the Applicable Margin.
"LIBOR Swingline Loan" means a Swingline Loan which bears interest at
the LIBO Rate plus the Applicable Margin.
"Loan" means an extension of credit, in the form of (a) a Revolving Loan
by a Bank to the Company, which may be a Base Rate Revolving Loan, Adjusted CD
Rate Revolving Loan or LIBOR Revolving Loan (each, a "Type" of Revolving
Loan), or (b) a Swingline Loan by the Swingline Bank to the Company, which may
be a Base Rate Swingline Loan, Adjusted CD Rate Swingline Loan or LIBOR
Swingline Loan (each, a "Type" of Swingline Loan); in each case pursuant to
Article II.
"Loan Documents" means this Agreement, the Notes and all other documents
delivered to the Agent or any Bank in connection herewith.
"Majority Banks" means at any time Banks holding at least 60% of the
combined Commitments of all the Banks, or, if at such time there are no
Commitments hereunder, Banks holding at least 60% of the then aggregate unpaid
principal amount of the Loans, including the Swingline Loans.
"Margin Stock" means "margin stock" as such term is defined in
Regulation G, U or X of the FRB.
"Minimum Tranche" means: (a) in respect of Revolving Loans comprising
part of the same Borrowing, or to be converted or continued under Section
2.04, (i) in the case of Base Rate Revolving Loans, $5,000,000 or any multiple
of $1,000,000 in excess thereof; and (ii) in the case of Adjusted CD Rate
Revolving Loans and LIBOR Revolving Loans, $10,000,000 or any multiple of
$1,000,000 in excess thereof; and (b) in respect of any Swingline Loan,
$1,000,000 or any multiple of $500,000 in excess thereof, unless otherwise
agreed by the Swingline Bank.
"Moody's" means Moody's Investors Service, Inc. and any successor
thereto that is a nationally recognized rating agency.
"New Affiliate Bank" has the meaning specified in Section 3.06.
"No Loan Date" means any Business Day on which (a) no principal amount
of any Revolving Loan is outstanding, and (b) no Notice of Borrowing with
respect to Revolving Loans is pending or deemed pending pursuant to Article II.
"Note" has the meaning specified in Section 2.02.
"Notice of Borrowing" means a notice in substantially the form of
Exhibit A.
"Notice of Conversion/Continuation" means a notice in substantially the
form of Exhibit B.
"Obligations" means all advances, debts, liabilities, obligations,
covenants and duties arising under any Loan Document, owing by the Company to
any Bank, including the Swingline Bank, the Agent, or any Person required to
be indemnified, whether direct or indirect (including those acquired by
assignment), absolute or contingent, due or to become due, now existing or
hereafter arising.
"Offshore Loan" means any LIBOR Revolving Loan or any LIBOR Swingline
Loan.
"Other Taxes" means any present or future stamp or documentary taxes or
any other excise or property taxes, charges or similar levies which arise from
any payment made hereunder or from the execution, delivery or registration of,
or otherwise with respect to, this Agreement or any other Loan Document.
"Person" means an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust, unincorporated
association, joint venture or Governmental Authority.
"Preferred Stock" means, as applied to any corporation, shares of such
corporation which shall be entitled to preference or priority over any other
shares of such corporation in respect of either the payment of dividends or
the distribution of assets upon liquidation.
"Prescribed Forms" shall mean such duly executed and filed form(s) or
statement(s), and in such number of copies, which may, from time to time, be
prescribed by law and which, pursuant to applicable provisions of (a) an
income tax treaty between the United States and the country of residence of
the Bank providing the form(s) or statement(s), (b) the Code, or (c) any
applicable rule or regulation under the Code, permit the Company and the Agent
to make payments hereunder for the account of such Bank free of deduction or
withholding of United States income or other similar taxes.
"Redeemable" means, as applied to any Preferred Stock, any Preferred
Stock which (i) the issuer undertakes to redeem at a fixed or determinable
date or dates (other than pursuant to the exercise of an option to redeem by
the issuer, if the failure to exercise such option would not materially
adversely affect the business, consolidated financial position or consolidated
results of operations of the issuer and its subsidiaries taken as a whole),
whether by operation of a sinking fund or otherwise, or upon the occurrence of
a condition not solely within the control of the issuer, or (ii) is redeemable
at the option of the holder.
"Reference Banks" means BofA, NationsBank of Texas, N.A. and Citibank,
N.A.
"Replacement Bank" has the meaning specified in Section 3.06(a).
"Required Banks" means at any time Banks holding at least 50% of the
combined Commitments of all the Banks, or, if at such time there are no
Commitments hereunder, Banks holding at least 50% of the then aggregate unpaid
principal amount of the Loans, including the Swingline Loans.
"Requirement of Law" means, as to any Person, any law (statutory or
common), treaty, rule or regulation or determination of an arbitrator or of a
Governmental Authority, in each case applicable to or binding upon the Person
or any of its property or to which the Person or any of its property is
subject.
"Responsible Officer" means the chief executive officer, the president,
the chief financial officer or the treasurer of the Company.
"Restricted Subsidiary" means any Subsidiary of the Company which has
non-intercompany assets with an aggregate book value exceeding 10% of the
Consolidated Tangible Net Worth of the Company based upon, at the time of
determination, the most recent year-end audited consolidated financial
statements of the Company.
"Resulting Increased Commitment" has the meaning specified in Section
3.07.
"Revolving Loan" has the meaning specified in Section 2.01(a).
"Revolving Termination Date" means the earlier to occur of:
(a) October 31, 2000; and
(b) the date on which the commitments of the Banks to make Loans
terminate in whole in accordance with Section 2.07, Section 2.09(b) or
2.09(c) or Section 8.02.
"S&P" means Standard & Poor's Rating Group and any successor thereto
that is a nationally recognized rating agency.
"SEC" means the Securities and Exchange Commission, or any Governmental
Authority succeeding to any of its principal functions.
"Senior Debt Indenture" means that certain indenture dated as of March
1, 1994 between the Company and NationsBank of Texas, N.A., as Trustee,
without giving effect to any amendment, modification, termination or
cancellation thereof.
"Specified Transaction," in respect of the Company, means any
transaction or related set of transactions, that results, directly or
indirectly, in (i) any sale, lease or exchange of all or substantially all of
its property, (ii) the consolidation of the Company with any other Person, or
(iii) a merger of the Company with or into any other Person, if in connection
with such sale, lease, exchange, consolidation or merger any consent, approval
or authorization of the shareholders of the Company is required under any of
the Company's organizational documents, or any rule, regulation or Requirement
of Law.
"Subordinated Debt" means any Debt of the Company (i) that expressly
provides that it is subordinate in right of payment to the Loans made by the
Banks hereunder, and (ii) under the terms of which no payments of principal
shall be payable (whether by scheduled maturity, required prepayment, or
otherwise, unless as a result of the acceleration of such Debt, in accordance
with the terms thereof) prior to October 31, 2000.
"Subsidiary" of a Person means any corporation, association,
partnership, limited liability company, business trust, joint stock company,
joint venture or other business entity of which more than 50% of the voting
stock or other equity interests (in the case of Persons other than
corporations), is owned or controlled directly or indirectly by the Person, or
one or more of the Subsidiaries of the Person, or a combination thereof.
Unless the context otherwise clearly requires, references herein to a
"Subsidiary" refer to a Subsidiary of the Company.
"Surviving Bank" has the meaning specified in Section 3.07.
"Swingline Bank" means BofA.
"Swingline Commitment", as to the Swingline Bank, has the meaning
specified in Section 2.01(b).
"Swingline Loan" has the meaning specified in Section 2.01(b).
"Taxes" means any and all present or future taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect thereto,
excluding, in the case of each Bank and the Agent, taxes imposed on its net
income, and franchise taxes imposed on its net income, by the jurisdiction (or
any political subdivision thereof) under the laws of which such Bank or the
Agent, as the case may be, is organized or maintains a lending office.
"364-Day Credit Agreement" means that U.S. $250,000,000 Revolving Credit
Agreement dated as of this date among the Company, BofA as Administrative
Agent and the lenders party thereto, under which such lenders have agreed to
extend credit to the Company on a 364-day basis.
"364-Day Credit Agreement Termination Date" means the date upon which
the Agent has received evidence, in form and substance satisfactory to the
Agent, that the commitments of the lenders under the 364-Day Credit Agreement
have been duly cancelled or terminated and that all principal, interest, fees,
expenses and other amounts outstanding thereunder have been paid in full.
"Total Capitalization" means, at any time, the sum (without duplication)
of (a) Total Senior Debt, (b) the total outstanding principal amount (or the
book carrying amount of such Debt if issued at a discount) of Subordinated
Debt of the Company and its consolidated Subsidiaries, (c) Consolidated Net
Worth less any amount thereof attributable to "minority interests" (as defined
below), and (d) Redeemable Preferred Stock of the Company and its consolidated
Subsidiaries. For the purpose of this definition, "minority interests" means
any investment or interest of the Company in any corporation, partnership or
other entity to the extent that the total amount thereof owned by the Company
(directly or indirectly) constitutes 50% or less of all outstanding interests
or investments in such corporation, partnership or entity.
"Total Senior Debt" means, at any time, all consolidated Debt of the
Company and its consolidated Subsidiaries other than Subordinated Debt.
"Type" has the meaning specified in the definition of "Loan."
"United States" and "U.S." each mean the United States of America.
1.02 Other Interpretive Provisions. (a) The meanings of defined terms
are equally applicable to the singular and plural forms of the defined terms.
(b) The words "hereof", "herein", "hereunder" and similar words
refer to this Agreement as a whole and not to any particular provision of this
Agreement. Subsection, Section, Schedule and Exhibit references are to this
Agreement unless otherwise specified. The term "documents" includes any and
all instruments, documents, agreements, certificates, indentures, notices and
other writings, however evidenced. The term "including" is not limiting and
means "including without limitation."
(c) In the computation of periods of time from a specified date
to a later specified date, the word "from" means "from and including"; the
words "to" and "until" each mean "to but excluding", and the word "through"
means "to and including."
(d) Unless otherwise expressly provided herein, (i) references to
agreements (including this Agreement) and other contractual instruments shall
be deemed to include all subsequent amendments and other modifications
thereto, but only to the extent such amendments and other modifications are
not prohibited by the terms of any Loan Document, (ii) references to any
statute or regulation are to be construed as including all statutory and
regulatory provisions consolidating, amending, replacing, supplementing or
interpreting the statute or regulation and (iii) references to IRS forms, SEC
forms, FRB statistical releases or other forms, reports or documents of any
Governmental Authority are to be construed as including all forms, reports or
other documents that consolidate, amend or replace the forms, reports or
documents.
(e) The captions and headings of this Agreement are for
convenience of reference only and shall not affect the interpretation of this
Agreement.
1.03 Accounting Principles. (a) Unless the context otherwise clearly
requires, all accounting terms not expressly defined herein shall be
construed, and all financial computations required under this Agreement shall
be made, in accordance with GAAP, consistently applied.
(b) References herein to "fiscal year" and "fiscal quarter" refer
to such fiscal periods of the Company.
ARTICLE II
THE CREDITS
2.01 Amounts and Terms of Commitments. (a) Each Bank severally agrees,
on the terms and conditions set forth herein, to make loans (each such loan a
"Revolving Loan") to the Company from time to time on any Business Day during
the period from the Closing Date to the Revolving Termination Date, in an
aggregate principal amount not to exceed at any time outstanding, together
with such Bank's Commitment Percentage of all Swingline Loans then
outstanding, the amount set forth opposite the Bank's name on the signature
pages hereto (as such signature pages are deemed modified pursuant to this
Article II or Article III or Section 10.07) (as such amount may be reduced or
increased pursuant to Sections 2.06, 2.07, 2.08, 2.09, 3.06, 3.07 or 8.02,
such Bank's "Commitment"); provided, however, that, after giving effect to any
Borrowing of Revolving Loans, the aggregate principal amount of all
outstanding Revolving Loans and Swingline Loans shall not at any time exceed
the combined Commitments of all the Banks. Within the limits of each Bank's
Commitment, and subject to the other terms and conditions hereof, the Company
may borrow under this Section 2.01(a), prepay under Section 2.09(a) and
reborrow under this Section 2.01(a).
(b) The Swingline Bank agrees, on the terms and conditions set
forth herein, to make a portion of the combined Commitments of all the Banks
available to the Company by making swingline loans (each such loan a
"Swingline Loan") to the Company from time to time on any Business Day during
the period from the 364-Day Credit Agreement Termination Date to the Revolving
Termination Date, in an aggregate principal amount not to exceed at any time
outstanding $50,000,000 (as such amount may be reduced pursuant to Sections
2.07, 2.08, 2.09, 3.06 or 8.02, the Swingline Bank's "Swingline Commitment"),
notwithstanding the fact that such Swingline Loans, when aggregated with the
Swingline Bank's outstanding Revolving Loans, may exceed the Swingline Bank's
Commitment; provided, however, that, after giving effect to any Borrowing of a
Swingline Loan, the aggregate principal amount of all outstanding Revolving
Loans and Swingline Loans shall not at any time exceed the combined
Commitments of all the Banks. Within the foregoing limits, and subject to the
other terms and conditions hereof, the Company may borrow under this Section
2.01(b), prepay under Section 2.09(a) and reborrow pursuant to this Section
2.01(b).
2.02 Notes. The Loans made by each Bank are evidenced by a note in
substantially the form of Exhibit E ("Note") payable to the order of that
Bank, evidencing the aggregate indebtedness of the Company to such Bank
resulting from the Loans owed to such Bank. Each Bank may endorse on the
schedules annexed to its Notes, the date, amount and maturity of each Loan
made by it and the amount of each payment of principal made by the Company with
respect thereto. Each Bank is irrevocably authorized by the Company to
endorse its Notes, and each Bank's record shall be prima facie evidence of the
matters reflected therein; provided, however, that the failure of a Bank to
make, or an error in making, a notation thereon with respect to any Loan shall
not limit or otherwise affect the obligations of the Company hereunder or
under any such Note to such Bank.
2.03 Procedure for Revolving Loan Borrowings. (a) Each Borrowing of
Revolving Loans shall be made upon the Company's irrevocable written notice
delivered to the Agent as described in Section 10.02 in the form of a Notice
of Borrowing prior to 11:00 a.m. (Houston time) (i) one Business Day prior to
the requested Borrowing Date, in the case of Adjusted CD Rate Revolving Loans,
(ii) three Business Days prior to the requested Borrowing Date, in the case of
LIBOR Revolving Loans, and (iii) on the requested Borrowing Date, in the case
of Base Rate Revolving Loans, specifying:
(A) the amount of the Borrowing, which shall be in an
aggregate amount not less than the Minimum Tranche;
(B) the requested Borrowing Date, which shall be a
Business Day;
(C) the Type of Revolving Loans comprising the
Borrowing;
(D) in the case of Adjusted CD Rate Revolving Loans
and LIBOR Revolving Loans, the duration of the Interest Period
applicable to such Loans included in such notice. If the Notice
of Borrowing fails to specify the duration of the Interest Period
for any Borrowing comprised of Adjusted CD Rate Revolving Loans or
LIBOR Revolving Loans, such Interest Period shall be 90 days (in
the case of an Adjusted CD Rate Revolving Loan) and three months
(in the case of a LIBOR Revolving Loan);
provided, however, that with respect to a Borrowing, if any, to be made on the
Closing Date, the Notice of Borrowing shall be delivered to the Agent not
later than 11:00 a.m. (Houston time) on the Closing Date and such Borrowing
will consist of Base Rate Revolving Loans only.
(b) Upon receipt of the Notice of Borrowing, the Agent will
promptly notify each Bank thereof and of the amount of such Bank's Commitment
Percentage of such Borrowing.
(c) Each Bank will make the amount of its Commitment Percentage
of such Borrowing available to the Agent for the account of the Company at the
Agent's Payment Office on the Borrowing Date requested by the Company in
immediately available funds by 11:00 a.m. (Houston time) in the case of a
Borrowing comprised of Adjusted CD Rate Revolving Loans or LIBOR Revolving
Loans, and by 1:00 p.m. (Houston time) in the case of a Borrowing comprised of
Base Rate Revolving Loans. The proceeds of all such Loans will then be made
available to the Company by the Agent by wire transfer of immediately
available funds in accordance with written instructions provided to the Agent
by the Company, unless on the date of the Borrowing all or any portion of the
proceeds thereof shall then be required to be applied to the repayment of any
outstanding Swingline Loans pursuant to Section 2.05(f), in which case such
proceeds or portion thereof shall be applied to the repayment of such
Swingline Loans.
(d) After giving effect to any Borrowing of Revolving Loans,
there may not be more than (i) four different Interest Periods in effect in
respect of all Adjusted CD Rate Revolving Loans together then outstanding and
(ii) four different Interest Periods in effect in respect of all LIBOR
Revolving Loans together then outstanding.
2.04 Conversion and Continuation Elections for Revolving Loan
Borrowings. (a) The Company may, upon irrevocable written notice to the Agent
under subsection (b) of this Section:
(i) elect, on any Business Day, in the case of Base Rate
Revolving Loans, or on the last day of the applicable Interest Period,
in the case of Adjusted CD Rate Revolving Loans or LIBOR Revolving
Loans, to convert any such Loans (or any part thereof in an amount not
less than the Minimum Tranche) into Revolving Loans of another Type; or
(ii) elect to renew on the last day of the applicable
Interest Period any Revolving Loans having Interest Periods maturing on
such day (or any part thereof in an amount not less than the Minimum
Tranche);
provided, that if at any time the aggregate amount of Adjusted CD Rate
Revolving Loans or LIBOR Loans in respect of any Borrowing is reduced, by
payment, prepayment, or conversion of part thereof to be less than the Minimum
Tranche, such Loans shall automatically convert into Base Rate Revolving
Loans, and on and after such date the right of the Company to continue such
Loans as, and convert such Loans into, Adjusted CD Rate Revolving Loans or
LIBOR Revolving Loans shall terminate, except that if and so long as each such
Revolving Loan shall be of the same Type and have the same Interest Period as
Revolving Loans comprising another Borrowing or other Borrowings, and the
aggregate unpaid principal amount of all such Loans of all such Borrowings
shall equal or exceed $10,000,000, the Company shall have the right to
continue all such Loans as, or to convert all such Loans into, Revolving Loans
of such Type having such Interest Period.
(b) The Company shall deliver a Notice of Conversion/Continuation
to be received by the Agent not later than 11:00 a.m. (Houston time) at least
(i) one Business Day in advance of the Conversion/Continuation Date, if the
Revolving Loans are to be converted into or continued as Adjusted CD Rate
Revolving Loans; (ii) three Business Days in advance of the
Conversion/Continuation Date, if the Revolving Loans are to be converted into
or continued as LIBOR Revolving Loans; and (iii) on the
Conversion/Continuation Date, if the Revolving Loans are to be converted into
Base Rate Revolving Loans, specifying:
(A) the proposed Conversion/Continuation Date;
(B) the aggregate amount of Revolving Loans to be
converted or renewed;
(C) the Type of Revolving Loans resulting from the
proposed conversion or continuation; and
(D) other than in the case of conversions into Base
Rate Revolving Loans, the duration of the requested Interest
Period.
(c) If upon the expiration of any Interest Period applicable to
any Adjusted CD Rate Revolving Loans or LIBOR Revolving Loans, the Company has
failed to select timely a new Interest Period to be applicable to such Loans,
the Company shall be deemed to have elected to convert such Loans into Base
Rate Revolving Loans.
(d) The Agent will promptly notify each Bank of its receipt of a
Notice of Conversion/Continuation, or, if no timely notice is provided by the
Company under this Section, the Agent will promptly notify each Bank of the
details of any automatic conversion. All conversions and continuations shall
be made ratably according to the respective outstanding principal amounts of
the Revolving Loans held by each Bank with respect to which the notice was
given.
(e) Unless the Majority Banks otherwise agree, during the
existence of a Default or Event of Default, the Company may not elect to have
a Revolving Loan converted into or continued as an Adjusted CD Rate Revolving
Loan or a LIBOR Revolving Loan with an Interest Period exceeding one month (in
the case of a LIBOR Revolving Loan) or 30 days (in the case of an Adjusted CD
Rate Revolving Loan).
(f) After giving effect to any conversion or continuation of
Revolving Loans, there may not be more than (i) four different Interest
Periods in effect in respect of all Adjusted CD Rate Revolving Loans together
then outstanding and (ii) four different Interest Periods in effect in respect
of all LIBOR Revolving Loans together then outstanding.
2.05 Procedure for Swingline Borrowings. (a) Each Borrowing of a
Swingline Loan shall be made upon the Company's irrevocable written notice to
the Agent as described in Section 10.02 in the form of a Notice of Borrowing
prior to 11:00 a.m. (Houston time) (i) one Business Day prior to the requested
Borrowing Date, in the case of an Adjusted CD Rate Swingline Loan, (ii) three
Business Days prior to the requested Borrowing Date, in the case of a LIBOR
Swingline Loan, and (iii) on the requested Borrowing Date, in the case of a
Base Rate Swingline Loan, specifying: (i) the amount of such Loan, which
shall be an amount not less than the Minimum Tranche; (ii) the requested
Borrowing Date, which shall be a Business Day, (iii) the duration of the
Interest Period applicable to such Loan, which shall not be more than 10 days,
and (iv) if the product of the amount of such Loan and the number of days in
the applicable Interest Period equals or exceeds $15,000,000, the Type of
Swingline Loan. Upon receipt of the Notice of Borrowing, the Agent will
promptly provide the Swingline Bank with a copy thereof.
(b) If the product of the amount of a requested Swingline Loan
and the number of days in the applicable Interest Period equals or exceeds
$15,000,000, such Loan shall bear interest at the LIBO Rate plus the
Applicable Margin, the Adjusted CD Rate plus the Applicable Margin or the Base
Rate, as selected by the Company pursuant to Section 2.05(a). If the product
of the amount of a requested Swingline Loan and the number of days in the
applicable Interest Period is less than $15,000,000, such Loan shall bear
interest at the Base Rate.
(c) Unless the Swingline Bank has received notice prior to 11:00
a.m. (Houston time) on the relevant Borrowing Date from the Agent (including
at the request of any Bank) (i) directing the Swingline Bank not to make the
requested Swingline Loan as a result of the limitation set forth in the
proviso set forth in Section 2.01(b), or (ii) that one or more conditions
specified in Article IV are not then satisfied; then, subject to the terms and
conditions hereof, the Swingline Bank will, not later than 2:00 p.m. (Houston
time) on the Borrowing Date specified in such Notice of Borrowing, make the
amount of the requested Swingline Loan available to the Company by wire
transfer of immediately available funds in accordance with written
instructions provided to the Agent by the Company.
(d) After giving effect to any Borrowing of a Swingline Loan,
there may not be more than three different Swingline Loans outstanding at any
one time.
(e) The Agent will notify the Banks of any Swingline Loan
Borrowing or repayment thereof promptly after any such Borrowing or repayment.
(f) If (i) any Swingline Loan shall remain outstanding at 11:00
a.m. (Houston time) on the last day of the Interest Period applicable to such
Loan and by such time on such day the Agent shall have received neither (A) a
Notice of Borrowing delivered pursuant to Section 2.03 requesting that
Revolving Loans be made pursuant to Section 2.01(a) on such day in an amount
at least equal to the principal amount of such Swingline Loan, nor (B) any
other notice indicating the Company's intent to repay such Swingline Loan with
funds obtained from other sources, or (ii) any Swingline Loans shall remain
outstanding during the existence of a Default or Event of Default and the
Swingline Bank shall in its sole discretion notify the Agent that the
Swingline Bank desires that such Swingline Loans be converted into Revolving
Loans; then, the Agent shall be deemed to have received a Notice of Borrowing
from the Company pursuant to Section 2.03 requesting that Base Rate Revolving
Loans be made pursuant to Section 2.01(a) on such day (in the case of the
circumstances described in clause (i) above) or on the first Business Day
subsequent to the date of such notice from the Swingline Bank (in the case of
the circumstances described in clause (ii) above) in an amount equal to the
aggregate amount of such Swingline Loans, and the procedures set forth in
Sections 2.03(b) and 2.03(c) shall be followed in making such Base Rate
Revolving Loans; provided, that such Base Rate Revolving Loans shall be made
notwithstanding the Company's failure to comply with the conditions specified
in Section 4.02; and provided, further, that if a Borrowing of Revolving Loans
becomes legally impracticable and if so required by the Swingline Bank at the
time such Revolving Loans are required to be made by the Banks in accordance
with this Section 2.05(f), each Bank agrees that in lieu of making Revolving
Loans as described above, such Bank shall purchase a participation from the
Swingline Bank in the applicable Swingline Loans in an amount equal to such
Bank's Commitment Percentage of the aggregate principal amount of such
Swingline Loans, and the procedures set forth in Sections 2.03(b) and 2.03(c)
shall be followed in connection with the purchases of such participations.
The proceeds of such Base Rate Revolving Loans or purchases of participations,
as the case may be, shall be applied to repay such Swingline Loans. A copy of
each notice given by the Agent to the Banks pursuant to this Section 2.05(f)
with respect to the making of Revolving Loans or the purchases of
participations, as the case may be, shall be promptly delivered by the Agent
to the Company. Each Bank's obligation in accordance with this Agreement to
make the Revolving Loans or purchase the participations, as contemplated by
this Section 2.05(f), shall be absolute and unconditional and shall not be
affected by any circumstance, including (1) any set-off, counterclaim,
recoupment, defense or other right which such Bank may have against the
Swingline Bank, the Company or any other Person for any reason whatsoever; (2)
the occurrence or continuance of a Default or an Event of Default; or (3) any
other circumstance, happening or event whatsoever, whether or not similar to
any of the foregoing.
2.06 Increase of Commitments. The Company shall have the right,
without the consent of the Banks but subject to the approval of the Agent
(which approval shall not be unreasonably withheld), to effectuate from time
to time an increase in the total Commitments under this Agreement by adding to
this Agreement one or more Persons that are Eligible Assignees (who shall,
upon completion of the requirements stated in this Section, constitute "Banks"
hereunder), or by allowing one or more Banks to increase their Commitments
hereunder, so that such added and increased Commitments shall equal the
increase in Commitments effectuated pursuant to this Section; provided that
(a) no increase in Commitments pursuant to this Section shall result in the
total Commitments exceeding $1,200,000,000 or shall result in the aggregate
amount of the increases in the Commitments effectuated pursuant to this
Section since the date of this Agreement being in excess of the sum of
$200,000,000 plus the aggregate amount (but not greater than $100,000,000) of
all non-ratable reductions and terminations of Commitments effectuated
pursuant to Section 2.08; (b) no Bank's Commitment shall be increased without
the consent of such Bank; (c) there has occurred and is continuing no Default
or Event of Default, and (d) there has been no ratable reduction of
Commitments pursuant to Section 2.07. The Company shall deliver or pay, as
applicable, to the Agent each of the following items prior to 11:00 a.m.
(Houston time) (i) three Business Days prior to the requested effective date
of such increase in the Commitments, if such date is a No Loan Date, or (ii)
five Business Days prior to the requested effective date of such increase in
the Commitments, if such date is not a No Loan Date:
(A) a written notice of the Company's intention to
increase the total Commitments pursuant to this Section, which
shall specify each new Eligible Assignee, if any, the changes in
amounts of Commitments that will result, and such other
information as is reasonably requested by the Agent;
(B) a document in form and substance as may be reasonably
required by the Agent, executed and delivered by each new Eligible
Assignee and each Bank agreeing to increase its Commitment,
pursuant to which it becomes a party hereto or increases its
Commitment, as the case may be, which document, in the case of a
new Eligible Assignee, shall (among other matters) specify the CD
Lending Office, Domestic Lending Office and LIBOR Lending Office
of such new Eligible Assignee;
(C) a Note in the principal amount of the Commitment of
each new Eligible Assignee, or a replacement Note in the principal
amount of the increased Commitment of each Bank agreeing to
increase its Commitment, as the case may be, executed and
delivered by the Company, which Note shall be in form and
substance as may be reasonably required by Agent; and
(D) a non-refundable processing fee of $3,500, for the
sole account of the Agent.
Upon receipt of any notice referred to in clause (A) above, the Agent will
promptly notify each Bank thereof. Upon execution and delivery of such
documents and the payment of such fee, such new Eligible Assignee shall
constitute a "Bank" hereunder with a Commitment as specified therein, or such
Bank's Commitment shall increase as specified therein, as the case may be. The
Company agrees to pay to the Banks any and all amounts to the extent payable
pursuant to Section 3.02 as a result of any such increase in the Commitments.
2.07 Ratable Reduction or Termination of Commitments. The Company may,
upon not less than three Business Days' prior notice to the Agent, terminate
all the Commitments, or permanently reduce all the Commitments by an aggregate
minimum amount of $10,000,000 or any multiple of $1,000,000 in excess thereof;
unless, after giving effect thereto and to any prepayments of Loans made on
the effective date thereof, (i) the then-outstanding principal amount of all
Revolving Loans and Swingline Loans would exceed the amount of the combined
Commitments of all the Banks then in effect, or (ii) the then-outstanding
principal amount of all Swingline Loans would exceed the amount of the
Swingline Commitment then in effect, as adjusted pursuant to the last sentence
of this Section 2.07. Once reduced in accordance with this Section, the
Commitments may not be increased. Any such reduction of the Commitments shall
be applied ratably to each Bank's Commitment according to its Commitment
Percentage. At no time shall the Swingline Commitment exceed the combined
Commitments of all the Banks, and any reduction of the Commitments which
reduces the combined Commitments of all the Banks below the then-current
amount of the Swingline Commitment shall result in an automatic corresponding
reduction of the Swingline Commitment to the amount of the combined
Commitments of all the Banks, as so reduced, without any action on the part of
the Swingline Bank.
2.08 Non-Ratable Reduction or Termination of Commitments. The Company
shall have the right, without the consent of any Bank, but subject to the
approval of the Agent (which consent shall not be unreasonably withheld), to
reduce in part or to terminate in whole the Commitment of one or more Banks
non-ratably, provided that (i) the effective date of any such reduction or
termination of Commitments shall be a No Loan Date, (ii) after giving effect
thereto and to any prepayments of Swingline Loans made on the effective date
thereof, the then-outstanding principal amount of all Swingline Loans shall
not exceed the amount of the Swingline Commitment then in effect, as adjusted
pursuant to the penultimate sentence of this Section 2.08; (iii) on the
effective date of any such reduction or termination (x) no Default or Event of
Default shall have occurred and be continuing, (y) the senior unsecured
long-term debt of the Company is rated BBB- or better by S&P or Baa3 or better
by Moody's, and (z) the Company shall pay to any Bank whose Commitment is
terminated all amounts owed by the Company to such Bank under this Agreement
(including accrued commitment fees), (iv) the aggregate amount of each
non-ratable reduction shall be at least $5,000,000, and (v) the aggregate
amount of all such non-ratable reductions and terminations of Commitments
since the date of this Agreement shall not exceed the sum of $100,000,000 plus
the aggregate amount (but not greater than $100,000,000) of all increases in
Commitments effectuated pursuant to Section 2.06. At no time shall the
Swingline Commitment exceed the combined Commitments of the Banks, and any
reduction of the Commitment of one or more Banks non-ratably which reduces the
combined Commitments of the Banks below the then-current amount of the
Swingline Commitment shall result in an automatic corresponding reduction of
the Swingline Commitment to the amount of the combined Commitments of the
Banks, as so reduced, without any action on the part of the Swingline Bank.
The Company shall give the Agent three Business Days' notice of the Company's
intention to reduce or terminate any Commitment pursuant to this Section.
2.09 Optional and Mandatory Prepayments. (a) Subject to Section 3.02,
the Company may, at any time or from time to time by irrevocable notice to the
Agent, not less than (i) one Business Day prior to a prepayment of any CD
Loan, (ii) three Business Days prior to a prepayment of any Offshore Loan, or
(iii) by 11:00 a.m. (Houston time) on the Business Day of a prepayment of any
Base Loan, ratably prepay Loans in whole or in part, in minimum amounts of
$5,000,000 or any multiple of $1,000,000 in excess thereof. Such notice of
prepayment shall specify the date and amount of such prepayment, whether the
Loans to be prepaid are Revolving Loans or Swingline Loans, the Type(s) of any
Loans to be prepaid and the specific Borrowing or Borrowings pursuant to which
such Loans were made. The Agent will promptly notify each Bank, in the case
of the prepayment of Revolving Loans, or the Swingline Bank, in the case of
the prepayment of Swingline Loans, of its receipt of any such notice, and of
such Bank's Commitment Percentage of such prepayment, as applicable. If such
notice is given by the Company, the Company shall make such prepayment and the
payment amount specified in such notice shall be due and payable on the date
specified therein, together with accrued interest to each such date on the
amount prepaid.
(b) No later than the date that is 30 days after the occurrence
of any Change in Control as to the Company, the Company shall prepay all
outstanding Loans, together with accrued interest, fees, amounts payable
pursuant to Section 3.02 and all other amounts outstanding hereunder, and
immediately upon the occurrence of such Change in Control, the obligations of
the Banks to make additional Loans, including the obligation of the Swingline
Bank to make Swingline Loans, shall be terminated automatically.
(c) Immediately upon the occurrence of any Specified Transaction
or at any time prior to the date that is 180 days after the date of
consummation of such Specified Transaction, the Agent shall at the request of,
and may with the consent of, the Required Banks, in their sole and absolute
discretion, (i) by notice to the Company pursuant to Section 10.02 hereof,
declare the outstanding principal amount of all Loans, together with accrued
interest, amounts payable pursuant to Section 3.02 and all other amounts
outstanding hereunder, to be immediately due and payable, whereupon such
amounts shall immediately be paid by the Company, and (ii) by notice to the
Company pursuant to Section 10.02 hereof, declare the obligation of each Bank
to make Loans, including the obligation of the Swingline Bank to make
Swingline Loans, be terminated, whereupon such obligations shall be
terminated immediately.
(d) On the date of any increase in the total Commitments pursuant
to Section 2.06, the Company shall prepay all Revolving Loans outstanding on
such date, together with accrued interest thereon and amounts payable pursuant
to Section 3.02; provided, however, that, notwithstanding the foregoing
sentence, if after giving effect to such an increase in the total Commitments
there are no new Banks hereunder and the Commitment Percentage of each Bank
is unchanged from its Commitment Percentage immediately prior to such
increase, then the Company shall not be required to prepay any Revolving Loans
and related amounts outstanding on such date.
(e) Any mandatory prepayment under subsection (b), (c) or (d) of
this Section shall be made by the Company without presentment, demand, protest
or other notice of any kind, except as provided in subsection (c), all of
which are expressly waived by the Company.
2.10 Repayment. The Company shall repay to the Agent for the account
of each Bank on the Revolving Termination Date the aggregate principal amount
of all Revolving Loans outstanding on such date. The Company shall repay to
the Agent for the account of the Swingline Bank the outstanding principal
amount of each Swingline Loan on the last day of the Interest Period
applicable thereto.
2.11 Interest. (a) Each Loan shall bear interest on the outstanding
principal amount thereof from the applicable Borrowing Date until paid at a
rate per annum equal to the Adjusted CD Rate, the LIBO Rate or the Base Rate,
as the case may be (and subject, in the case of Revolving Loans, to the
Company's right to convert to other Types of Revolving Loans under Section
2.04), plus, in the case of CD Loans and Offshore Loans, the Applicable Margin;
provided, however, that in no event shall the applicable rate payable to any
Bank exceed the Highest Lawful Rate applicable to such Bank.
(b) Interest on each Loan shall be paid to the Agent for the
account of each Bank, in the case of Revolving Loans, or the Swingline Bank,
in the case of Swingline Loans, in arrears on each Interest Payment Date.
Interest shall also be paid on the date of any prepayment of Loans under
Section 2.09 for the portion of the Loans so prepaid and upon payment in full
thereof.
(c) Any principal amount of any Loan which is not paid when due
(whether at stated maturity, by acceleration or otherwise) shall bear
interest, to the extent permitted by law, from the date on which such amount
became due until such amount is paid in full, payable on demand, at a rate per
annum equal at all times to the sum of the Base Rate in effect from time to
time plus 1.50% per annum, provided, however, that in no event shall such rate
as to any Bank exceed the Highest Lawful Rate applicable to such Bank.
2.12 Fees. The Company agrees to pay to the Agent for the account of
each Bank a commitment fee on the average daily amount by which such Bank's
Commitment exceeds the aggregate outstanding principal amount of such Bank's
Revolving Loans, from the date hereof until the Revolving Termination Date at
a rate per annum equal to the Applicable Fee Amount, payable in arrears on the
last Business Day of each calendar quarter during the term of such Bank's
Commitment, and on the Revolving Termination Date. The Company shall pay to
the Agent for its own account and the account of the Arranger such additional
fees as are set forth in the fee letter dated September 8, 1995 among such
Persons.
2.13 Computation of Fees and Interest. All computations of interest
for Base Rate Revolving Loans and Base Rate Swingline Loans, when the Base
Rate is determined according to clause (b) of the definition of "Base Rate"
shall be made on the basis of a year of 365 or 366 days, as the case may be,
and actual days elapsed. All other computations of fees and interest shall be
made on the basis of a 360-day year and actual days elapsed (but not to exceed
as to any Bank the Highest Lawful Rate applicable to such Bank). Interest and
fees shall accrue during each period during which interest or such fees are
computed from the first day thereof to the last day thereof.
2.14 Interest Rate Determination and Protection. (a) Each Reference
Bank and the Swingline Bank, as applicable, agrees to furnish to the Agent
timely information for the purpose of determining each Adjusted CD Rate or
LIBO Rate, as applicable. If any one or more of the Reference Banks shall not
furnish such timely information to the Agent for the purpose of determining
any such interest rate, the Agent shall determine such interest rate on the
basis of timely information furnished by the remaining Reference Banks.
(b) The Agent shall give prompt notice to the Company and the
Banks of the applicable interest rate determined by the Agent for purposes of
Section 2.11(a).
(c) If fewer than two Reference Banks furnish timely information
to the Agent for determining the LIBO Rate for any LIBOR Revolving Loans or
the Adjusted CD Rate for any Adjusted CD Rate Revolving Loans,
(i) the Agent shall forthwith notify the Company and the
Banks that the interest rate cannot be determined for such LIBOR
Revolving Loans or Adjusted CD Rate Revolving Loans, as the case may be,
(ii) each such Loan will automatically, on the last day of
the then existing Interest Period therefor, convert into a Base Rate
Revolving Loan (or if such Loan is then a Base Rate Revolving Loan, will
continue as a Base Rate Revolving Loan), and
(iii) the obligation of the Banks to make, or to convert
Revolving Loans into or continue Revolving Loans as, Adjusted CD Rate
Revolving Loans or LIBOR Revolving Loans, as the case may be, shall be
suspended until the Agent shall notify the Company and the Banks that
the circumstances causing such suspension no longer exist.
(d) With respect to any Offshore Loan or CD Loan, upon request by
the Company the Agent shall provide to the Company the information furnished
by each Reference Bank or the Swingline Bank, as applicable, to enable the
Agent to determine the LIBOR Rate or the Adjusted CD Rate, as the case may be,
for such Loan.
(e) If, with respect to any Adjusted CD Rate Revolving Loans or
LIBOR Revolving Loans, the Majority Banks notify the Agent that the applicable
interest rate for any Interest Period for such Loans cannot be reasonably
determined or will not adequately reflect the cost to such Majority Banks of
making, funding or maintaining their respective Adjusted CD Rate Revolving
Loans or LIBOR Revolving Loans, as the case may be, for such Interest Period,
the Agent shall forthwith so notify the Company and the Banks, whereupon
(i) each such Revolving Loan will automatically, on the
last day of the then existing Interest Period therefor, convert into a
Base Rate Revolving Loan (or, if such Revolving Loan is then a Base Rate
Revolving Loan, will continue as a Base Rate Revolving Loan), and
(ii) the obligation of the Banks to make, or to convert
Revolving Loans into or continue Revolving Loans as, Adjusted CD Rate
Revolving Loans or LIBOR Revolving Loans, as the case may be, shall be
suspended until the Agent shall notify the Company and the Banks that
the circumstances causing such suspension no longer exist.
(f) If the Swingline Bank notifies the Agent that the applicable
interest rate for any Interest Period for any Adjusted CD Rate Swingline Loan
or LIBOR Swingline Loan cannot be reasonably determined or will not adequately
reflect the cost to the Swingline Bank of making, funding or maintaining such
Loan, the Agent shall forthwith so notify the Company, whereupon the
obligation of the Swingline Bank to make Adjusted CD Rate Swingline Loans or
LIBOR Swingline Loans, as the case may be, shall be suspended until the Agent
shall notify the Company that the circumstances causing such suspension no
longer exist.
2.15 Payments by the Company. Except as otherwise expressly provided
herein, all payments by the Company shall be made in Dollars to the Agent for
the account of the Banks, in the case of Revolving Loans, or the Swingline
Bank, in the case of Swingline Loans, at the Agent's Payment Office and shall
be made without setoff, recoupment or counterclaim. Such payments shall be
made in immediately available funds no later than 12:00 noon (Houston time)
on the date specified herein. The Agent will promptly distribute to each Bank
its Commitment Percentage share (or other applicable share as expressly
provided herein), in the case of Revolving Loans, or to the Swingline Bank, in
the case of Swingline Loans, of such payment in like funds as received. Any
payment received by the Agent later than the time specified above shall be
deemed to have been received on the following Business Day, and any applicable
interest or fee shall continue to accrue.
(b) Subject to the provisions set forth in the definition of
"Interest Period" herein, whenever any payment is due on a day other than a
Business Day, such payment shall be made on the following Business Day, and
such extension of time shall in such case be included in the computation of
interest or fees, as the case may be.
(c) Unless the Agent receives notice from the Company prior to
the date on which any payment is due to the Banks or the Swingline Bank, as
the case may be, that the Company will not make such payment in full as and
when required, the Agent may assume that the Company has made such payment in
full to the Agent on such date in immediately available funds, and the Agent
may (but shall not be so required), in reliance upon such assumption,
distribute to each Bank or the Swingline Bank, as the case may be, on such due
date an amount equal to the amount then due such Bank. If and to the extent
the Company has not made such payment in full to the Agent, each Bank or the
Swingline Bank, as applicable, shall repay to the Agent on demand such amount
distributed to such Bank, together with interest thereon at the Federal Funds
Rate for each day from the date such amount is distributed to such Bank until
the date repaid.
2.16 Payments by the Banks to the Agent. (a) Unless the Agent receives
notice from a Bank on or prior to the Closing Date or, with respect to any
Borrowing after the Closing Date, at least one Business Day prior to the
proposed Borrowing Date, that such Bank will not make available as and when
required hereunder to the Agent for the account of the Company the amount of
that Bank's Commitment Percentage, in the case of a Revolving Loan Borrowing,
or the Swingline Loan, in the case of a Swingline Loan Borrowing, the Agent
may assume that each Bank, in the case of a Revolving Loan Borrowing, or the
Swingline Bank, in the case of a Swingline Borrowing, has made such amount
available to the Agent in immediately available funds on the Borrowing Date
and the Agent may (but shall not be so required), in reliance upon such
assumption, make available to the Company on such date a corresponding amount.
If and to the extent any Bank shall not have made its full amount available to
the Agent in immediately available funds and the Agent in such circumstances
has made available to the Company such amount, that Bank shall on the Business
Day following such Borrowing Date make such amount available to the Agent,
together with interest at the Federal Funds Rate for each day during such
period. A notice of the Agent submitted to any Bank with respect to amounts
owing under this subsection (a) shall be conclusive, absent manifest error.
If such amount is so made available, such payment to the Agent shall
constitute such Bank's Loan on the date of Borrowing for all purposes of this
Agreement. If such amount is not made available to the Agent on the Business
Day following the Borrowing Date, the Agent will notify the Company of such
failure to fund and, upon demand by the Agent, the Company shall pay such
amount to the Agent for the Agent's account, together with interest thereon
for each day elapsed since the date of such Borrowing, at a rate per annum
equal to the interest rate applicable at the time to the Loans comprising such
Borrowing, in the case of a Revolving Loan Borrowing, or at the applicable
Swingline Rate, in the case of a Swingline Loan Borrowing.
(b) The failure of any Bank to make any Revolving Loan on any
Borrowing Date shall not relieve any other Bank of any obligation hereunder to
make a Revolving Loan on such Borrowing Date, but no Bank shall be responsible
for the failure of any other Bank to make the Revolving Loan to be made by
such other Bank on any Borrowing Date.
2.17 Sharing of Payments, Etc. If, other than as expressly provided
elsewhere herein, any Bank shall obtain on account of the Loans made by it any
non-pro rata payment (whether voluntary, involuntary, through the exercise of
any right of set-off, or otherwise), such Bank shall immediately (a) notify
the Agent of such fact, and (b) purchase from the other Banks such
participations in the Loans made by them as shall be necessary to cause such
purchasing Bank to share the excess payment with each of them in accordance
with their Commitment Percentages; provided, however, that if all or any
portion of such excess payment is thereafter recovered from the purchasing
Bank, such purchase shall to that extent be rescinded and each other Bank
shall repay to the purchasing Bank the purchase price paid therefor, together
with an amount equal to such paying Bank's Commitment Percentage (according to
the proportion of (i) the amount of such paying Bank's required repayment to
(ii) the total amount so recovered from the purchasing Bank) of any interest
or other amount paid or payable by the purchasing Bank in respect of the total
amount so recovered. The Company agrees that any Bank so purchasing a
participation from another Bank may, to the fullest extent permitted by law,
exercise all its rights of payment (including the right of set-off) with
respect to such participation as fully as if such Bank were the direct
creditor of the Company in the amount of such participation.
ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY
3.01 Taxes. (a) Any and all payments by the Company to each Bank or
the Agent under this Agreement and any Note shall be made free and clear of,
and without deduction or withholding for, any Taxes. In addition, the Company
shall pay all Other Taxes.
(b) To the fullest extent permitted by applicable law, the
Company agrees to indemnify and hold harmless each Bank and the Agent for the
full amount of Taxes or Other Taxes (including any Taxes or Other Taxes
imposed by any jurisdiction on amounts payable under this Section 3.01) paid
by such Bank or the Agent and any liability (including penalties, interest,
additions to tax and expenses) arising therefrom or with respect thereto,
whether or not such Taxes or Other Taxes were correctly or legally asserted.
Payment under this indemnification shall be made within 30 days after the date
the Bank or the Agent makes written demand therefor in accordance with this
Section 3.01(b).
(c) If the Company shall be required by law to deduct or withhold
any Taxes or Other Taxes from or in respect of any sum payable under this
Agreement or any Note to any Bank or the Agent, then: (i) the sum payable
shall be increased as necessary so that after making all required deductions
and withholdings (including deductions and withholdings applicable to
additional sums payable under this Section 3.01) such Bank or the Agent, as
the case may be, receives an amount equal to the sum it would have received
had no such deductions or withholdings been made; (ii) the Company shall make
such deductions and withholdings; and (iii) the Company shall pay the full
amount deducted or withheld to the relevant taxing or other authority in
accordance with applicable law.
(d) Notwithstanding anything to the contrary contained in this
Agreement, each of the Company and the Agent shall be entitled, to the extent
it is required to do so by law, to deduct or withhold income or other similar
taxes imposed by the United States of America from interest, fees or other
amounts payable under this Agreement or any Note for the account of any Bank
(without indemnification or the payment by the Company of increased amounts
pursuant to clause (a), (b) or (c) above) other than a Bank (i) which is a
domestic corporation (as defined in Section 7701 of the Code) for federal
income tax purposes or (ii) which has the Prescribed Forms on file with the
Company and the Agent for the applicable year, provided that if the Company
shall so deduct or withhold any such taxes, it shall provide a statement to
the Agent and such Bank, setting forth the amount of such taxes so deducted or
withheld, the applicable rate and any other information or documentation which
such Bank or the Agent may reasonably request to assist such Bank or the Agent
in obtaining any allowable credits or deductions for the taxes so deducted or
withheld in the jurisdiction or jurisdictions in which such Bank is subject
to tax.
(e) Within 30 days after the date of any payment by the Company
of Taxes or Other Taxes, the Company shall furnish the Agent the original or a
certified copy of a receipt (if available) evidencing payment thereof, or
other evidence of payment satisfactory to the Agent.
(f) Each Bank shall use reasonable efforts (consistent with its
internal policies and legal and regulatory restrictions) to select a
jurisdiction for its Lending Office or change the jurisdiction of its Lending
Office, as the case may be, so as to avoid the imposition of any Taxes or
Other Taxes or to eliminate any such additional payment by the Company which
may thereafter accrue; provided that no such selection or change shall be made
if, in the sole judgment of such Bank, such selection or change would be
disadvantageous to such Bank.
3.02 Breakage Costs. If (a) any payment of principal of any CD Loan or
Offshore Loan is made by the Company prior to the last day of an Interest
Period relating to such Loan, or (b) the Company fails to borrow a Borrowing
consisting of a CD Loan or an Offshore Loan on the date for such Borrowing
specified in the Notice of Borrowing (except as permitted by and subject to
the provisions of Sections 2.14(c), (e) and (f) and 3.04), then upon demand by
any Bank, the Company shall pay to the Agent for the account of such Bank any
amounts required to compensate such Bank for any losses, costs or expenses
which it may reasonably incur as a result of such payment, including, without
limitation, any loss (excluding loss of anticipated profits), cost or expense
incurred by reasons of the liquidation or reemployment of deposits or other
funds acquired by such Bank to fund or maintain such Borrowing, but not
including any cost of termination or liquidation of any hedge or related
trading position (such as a rate swap, basis swap, forward rate transaction,
interest rate option, cap, collar or floor transaction, swaption, or any
other, similar transaction). For purposes of calculating amounts payable by
the Company to the Banks under this Section, (i) each Offshore Loan made by a
Bank (and each related reserve, special deposit or similar requirement) shall
be conclusively deemed to have been funded at the LIBO Rate used in
determining such Offshore Loan by a matching deposit or other borrowing in the
interbank eurodollar market for a comparable amount and for a comparable
period, whether or not such Offshore Loan is in fact so funded, and (ii) each
CD Loan made by a Bank (and each related reserve, special deposit or similar
requirement) shall be conclusively deemed to have been funded at the
Certificate of Deposit Rate used in determining the Adjusted CD Rate for such
CD Loan by the issuance of its certificate of deposit in a comparable amount
and for a comparable period, whether or not such CD Loan is in fact so funded.
3.03 Increased Costs. (a) If, due to either: (i) after the date
hereof, the introduction of or any change (other than any change by way of
imposition or increase of reserve requirements pursuant to Section 3.05) in or
in the interpretation of any law or regulation by a Governmental Authority
charged with the interpretation or administration thereof, or (ii) the
compliance with any guideline enacted after the date hereof or request
received after the date hereof from any Governmental Authority (whether or not
having the force of law) the effect of which is to impose or modify any
reserve, special deposit, insurance assessment, or similar requirement
relating to any extensions of credit or other assets of, or any deposits with
or other liabilities of, any Bank (other than reserves maintained as provided
for in Section 3.05), there shall be any actual increase in the cost to such
Bank of agreeing to make or making, funding or maintaining any CD Loan or
Offshore Loan, then the Company shall from time to time, upon demand by such
Bank (with a copy of such demand to the Agent), pay to the Agent for the
account of such Bank additional amounts sufficient to compensate such Bank for
such actual increased cost. Promptly after any Bank becomes aware of any such
introduction, change or proposed compliance, such Bank shall notify the
Company thereof. No Bank shall be permitted to recover increased costs
incurred or accrued more than 90 days prior to the date such notice is given
to the Company.
(b) If the Company so notifies the Agent within five Business
Days after any Bank notifies the Company of any increased cost pursuant to the
provisions of Section 3.03(a), the Company shall convert all Revolving Loans
of the Type affected by such increased cost of all Banks then outstanding into
Revolving Loans of another Type in accordance with Section 2.04 and,
additionally, reimburse such Bank for such increased cost in accordance with
Section 3.03(a).
(c) If any Bank shall have determined that, after the date
hereof, the adoption of any applicable law, rule or regulation regarding
capital adequacy, or any change therein, or any change in the interpretation
or administration thereof by any Governmental Authority, charged with the
interpretation or administration thereof, or compliance by any Bank (or its
Lending Office) 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 increasing the amount of capital
required or expected to be maintained as a result of its Commitment hereunder,
such Bank shall have the right to give prompt written notice to the Company
with a copy to the Agent, which notice shall notify the Company of the
additional amounts as shall be required to compensate such Bank for the
increased cost to such Bank as a result of such increase in capital and shall
certify that such costs are generally being charged by such Bank to other
similarly situated borrowers under similar credit facilities and such amounts
shall be paid promptly by the Company.
(d) Each Bank shall use its best efforts (consistent with its
internal policies and legal and regulatory restrictions) to select a
jurisdiction for its Lending Office or change the jurisdiction of its Lending
Office, as the case may be, so as to avoid the imposition of any increased
costs under this Section 3.03 or to eliminate the amount of any such increased
cost which may thereafter accrue; provided that no such selection or change of
the jurisdiction for its Lending Office shall be made if, in the reasonable
judgment of such Bank, such selection or change would be disadvantageous to
such Bank.
3.04 Illegality. Notwithstanding any other provision of this
Agreement, if any Bank shall notify the Agent that, after the date hereof, the
introduction of or any change in or in the interpretation of any law or
regulation shall make it unlawful, or any Governmental Authority shall assert
that it is unlawful, for any Bank or its LIBOR Lending Office to make any
Offshore Loans or to continue to fund or maintain any Offshore Loan hereunder,
then, on notice thereof and demand therefor by such Bank to the Company, (i)
the obligation of such Bank to make Offshore Loans and to convert Revolving
Loans into LIBOR Revolving Loans shall be suspended until the Agent shall
notify the Company that the circumstances causing such suspension no longer
exist, and (ii) the Company shall, forthwith convert all LIBOR Revolving Loans
of all Banks then outstanding into Revolving Loans of another Type in
accordance with Section 2.04.
3.05 Reserves on Offshore Loans. If any Bank shall be required under
regulations of the FRB to maintain reserves with respect to liabilities or
assets consisting of or including Eurocurrency funds or deposits (currently
known as "Eurocurrency liabilities"), and if as a result thereof there is an
increase in the cost to such Bank of agreeing to make or making, funding or
maintaining Offshore Loans, the Company shall from time to time, upon demand
by such Bank (with a copy of such demand to the Agent), pay to the Agent for
the account of such Bank additional amounts, as additional interest hereunder,
sufficient to compensate Bank for such increased cost. Increased costs under
this Section 3.05 shall be payable by the Company on each Interest Payment
Date on such Offshore Loans, provided the Company shall have received at least
15 days' prior written notice (with a copy to the Agent) of such additional
interest from the Bank. If a Bank fails to give notice 15 days prior to the
relevant Interest Payment Date, such additional interest shall be payable 15
days from receipt of such notice.
3.06 Replacement of Bank; Termination of Bank. In the event that any
Bank makes a demand for payment pursuant to Sections 3.01 or 3.03, or any Bank
has suspended its funding of Offshore Loans pursuant to Section 3.04, the
Company shall have the right, if no Default or Event of Default then exists,
to either replace such Bank in accordance with subsection (a) of this Section
3.06 or terminate such Bank's Commitment in accordance with subsection (b) of
this Section 3.06. If any Banks that are not Affiliates as of the Closing
Date become Affiliates after the Closing Date (each such Bank, a "New
Affiliate Bank"), the Company shall have the right, if no Default or Event of
Default then exists, to either replace each such New Affiliate Bank (other
than the New Affiliate Bank having the largest Commitment) in accordance with
subsection (a) of this Section 3.06 or terminate each such New Affiliate Bank
(other than the New Affiliate Bank having the largest Commitment) in
accordance with subsection (b) of this Section 3.06.
(a) If the Company determines to replace a Bank pursuant to this
Section 3.06, the Company shall have the right to replace such Bank with an
entity that is an Eligible Assignee (a "Replacement Bank"); provided that such
Replacement Bank, (i) if it is not already a Bank, shall be reasonably
acceptable to the Agent, (ii) shall unconditionally offer in writing (with a
copy to the Agent) to purchase all of such Bank's rights hereunder and
interest in the Loans owing to such Bank and the Note held by such Bank
without recourse at the principal amount of such Note plus interest and fees
accrued thereon to the date of such purchase on a date therein specified, and
(iii) shall, if such Replacement Bank is not already a Bank, execute and
deliver to the Agent a document in form and substance satisfactory to the
Agent pursuant to which such Replacement Bank becomes a party hereto with a
Commitment equal to that of the Bank being replaced, including, in the case of
the replacement of the Swingline Bank, the Swingline Commitment, which
document shall (among other matters) specify the CD Lending Office, Domestic
Lending Office and LIBOR Lending Office of such Replacement Bank. Upon
satisfaction of the requirements set forth in the first sentence of this
Section 3.06(a), acceptance of such offer to purchase by the Bank to be
replaced, payment to such Bank of the purchase price in immediately available
funds, and the payment by the Company of all requested costs accruing to the
date of purchase which the Company is obligated to pay under Section 3.02 and
all other amounts owed by the Company to such Bank (other than the principal
of and interest on the Loans of such Bank purchased by the Replacement Bank
and interest and fees accrued thereon to the date of purchase), and payment to
the Agent of a non-refundable processing fee of $2,500, the Replacement Bank
shall constitute a "Bank" hereunder with a Commitment as so specified and the
Bank being so replaced shall no longer constitute a "Bank" hereunder (with the
signature pages being amended to reflect same) and such Bank shall be relieved
of its obligations hereunder. If, however, (x) a Bank accepts such an offer
and such proposed Replacement Bank fails to purchase such rights and interest
on such specified date in accordance with the terms of such offer, the Company
shall continue to be obligated to pay the increased costs or additional
amounts due to such Bank pursuant to Section 3.01, 3.03 or 3.05 (if a demand
for repayment of increased costs or additional amounts pursuant to any of such
Sections is the basis for the proposed replacement), as the case may be, or
(y) the Bank proposed to be replaced fails to accept such purchase offer, the
Company (if the basis for the proposed replacement is a demand for payment of
increased costs or additional amounts pursuant to Sections 3.01, 3.03 or 3.05)
shall not be obligated to pay to such Bank such increased costs or additional
amounts to the extent incurred or accrued from and after the date of such
purchase offer, but in each of the cases set forth in clauses (x) and (y), the
Company shall continue to have the right to terminate such Bank's Commitment
in accordance with Section 3.06(b) hereof.
(b) In the event that the Company determines to terminate a
Bank's Commitment pursuant to this Section 3.06 which, in the case of the
Swingline Bank, includes the Swingline Commitment, the Company shall give
notice to such Bank of the Company's election to terminate (a copy shall be
sent to the Agent), and such termination shall become effective 15 days
thereafter unless such Bank withdraws its request for additional compensation
(with respect to a proposed termination based on a request for additional
compensation) or reinstates its funding of Offshore Loans (with respect to a
proposed termination based on a suspension of funding of Offshore Loans). On
the date of the termination of the Commitment of any Bank pursuant to this
Section 3.06(b), (x) the Company shall deliver notice of the effectiveness of
such termination to such Bank and to the Agent, (y) the Company shall pay all
amounts owed by the Company to such Bank under this Agreement or under the
Note payable to such Bank (including principal of and interest on the Loans
owed to such Bank, accrued commitment fees and amounts specified in such
Bank's notice (if any) delivered pursuant to Sections 3.01, 3.03 or 3.05 as the
case maybe, with respect to the period prior to such termination) and (z) upon
the occurrence of the events set forth in clauses (x) and (y), such Bank shall
cease to be a "Bank" hereunder for all purposes and such Bank shall be
relieved of its obligations hereunder.
3.07 Reallocation of Commitments in Event of Merger, Etc. If after the
Closing Date any Bank merges or consolidates with or into one or more other
Banks, the surviving entity of such merger or consolidation (the "Surviving
Bank") shall at the request of the Company, if no Default or Event of Default
then exists, assign all or a portion of its Resulting Increased Commitment (as
defined below) to one or more entities selected by the Company that are
Eligible Assignees (each an "Acquiring Entity"); provided that (i) each
Acquiring Entity shall unconditionally offer in writing (with a copy to the
Agent) to purchase a portion of such Surviving Bank's Resulting Increased
Commitment and the portion of the Revolving Loans owing to such Surviving Bank
and the Note or Notes held by such Surviving Bank allocable to the amount of
the Resulting Increased Commitment to be acquired; (ii) the portion of the
Resulting Increased Commitment of the Surviving Bank acquired by each
Acquiring Entity shall be in integral multiples of $1,000,000; (iii) the
purchase price to be paid by the Acquiring Entity shall be the outstanding
principal amount of the Revolving Loans owed to such Surviving Bank on the
date of purchase (plus interest and fees accrued thereon) that are allocable
to the amount of the Resulting Increased Commitment being acquired; and (iv)
each Acquiring Entity, if it is not already a Bank, shall be reasonably
acceptable to the Agent. Each Assignment hereunder shall be accomplished in
accordance with the third sentence of Section 10.07(c), and to the extent of
any such assignment, the Surviving Bank shall be relieved of its obligations
hereunder with respect to its assigned Commitment. To the extent that the
Surviving Bank's Resulting Increased Commitment is not acquired by an
Acquiring Entity, the Company shall have the right to terminate the Surviving
Bank's Resulting Increased Commitment by notice given to the Agent and such
Bank within 180 days after the effective date of such merger or consolidation.
The termination shall be effective 15 days thereafter, provided that on the
date of termination the Company shall have paid to the Surviving Bank all
amounts owed by the Company to the Surviving Bank allocable to the amount of
the Surviving Bank's Resulting Increased Commitment being terminated
(including principal of the Revolving Loans owed to such Surviving Bank
allocable to the portion of the Resulting Increased Commitment being terminated
plus interest and fees accrued on such portion). The amounts owed by the
Company to the Surviving Bank under the Agreement that are allocable to the
amount of the Resulting Increased Commitment being acquired or terminated
pursuant to this Section 3.07, shall be the product of (a) all amounts owed by
the Company to the Surviving Bank hereunder on the date of acquisition or
termination (including the outstanding principal amount of the Revolving Loans
owed to the Surviving Bank and interest and fees accrued thereon), and (b) a
fraction having as it numerator the amount of the Resulting Increased
Commitment being acquired or terminated and having as its denominator the
total amount of the Surviving Bank's Commitment without giving effect to such
acquisition or termination. For the purposes of this Section 3.07, "Resulting
Increased Commitment" shall mean (a) the total combined Commitment of the
Surviving Bank immediately following a merger or consolidation contemplated by
this Section 3.07, minus (b) the amount of the largest Commitment (immediately
prior to such merger or consolidation) of any Bank that was a party to such
merger or consolidation, excluding the Swingline Commitment in the event the
Swingline Bank is a Surviving Bank.
3.08 Certificates of Banks. Any Bank claiming reimbursement or
compensation under this Article III shall, as part of each notice and demand
for payment required under this Article III, deliver to the Company (with a
copy to the Agent) a certificate setting forth in reasonable detail the amount
and basis of the reimbursement or compensation payable to the Bank hereunder
and such certificate shall be conclusive and binding on the Company in the
absence of manifest error.
3.09 Survival. The agreements and obligations of the Company in this
Article III shall survive the payment of all other Obligations.
ARTICLE IV
CONDITIONS PRECEDENT
4.01 Conditions of Initial Loans. The obligation of each Bank to make
its initial Loan hereunder, including the obligation of the Swingline Bank to
make its initial Swingline Loan, is subject to the condition that the Agent
have received on or before the Closing Date all of the following, in form and
substance satisfactory to the Agent and each Bank:
(a) Credit Agreement and Notes. This Agreement and the Notes
executed by each party thereto;
(b) Resolutions; Incumbency. (i) Copies of the resolutions of
the board of directors of the Company authorizing the transactions
contemplated hereby, certified as of the Closing Date by the Secretary or an
Assistant Secretary of the Company; and (ii) a certificate of the Secretary or
Assistant Secretary of the Company certifying the names and true signatures
of the officers of the Company authorized to execute and deliver each Loan
Document to be executed by the Company;
(c) Organization Documents: Good Standing. Each of the following
documents: (i) the articles or certificate of incorporation and the bylaws of
the Company as in effect on the Closing Date, certified by the Secretary or
Assistant Secretary of the Company as of the Closing Date; and (ii) a good
standing certificate for the Company from the Secretary of State (or similar,
applicable Governmental Authority) of its state of incorporation and of the
State of Texas dated as of a recent date;
(d) Legal Opinions. An opinion of Wilson B. Fargo, Senior Vice
President and General Counsel of the Company, addressed to the Agent and the
Banks, substantially in the form of Exhibit D-1, and an opinion of Stephanie
A. Lucie, Corporate Counsel of the Company, addressed to the Agent and the
Banks, substantially in the form of Exhibit D-2;
(e) Prior Agreement. Evidence that the commitments of the
lenders under that US$300,000,000 Revolving Credit Agreement dated as of
August 1, 1994 among the Company, BofA as Administrative Agent and the Banks
party thereto have been duly cancelled or terminated and that all principal,
interest, fees, expenses and other amounts outstanding thereunder have been
paid in full;
(f) 364-Day Credit Agreement. Evidence that all conditions to
closing of the 364-Day Credit Agreement have occurred;
(g) Officer's Certificate. A certificate signed by a Responsible
Officer of the Company, dated as of the Closing Date, stating that
(i) the representations and warranties contained in Article
V are true and correct on and as of such date, and
(ii) no Default or Event of Default exists or would result
from the initial Borrowing; and
(h) Other Documents. Such other approvals, opinions, documents
or materials as the Agent or any Bank may reasonably request.
4.02 Conditions to All Borrowings. The obligation of each Bank to make
any Loan, including the obligation of the Swingline Bank to make any Swingline
Loan, is subject to the satisfaction of the following conditions precedent on
the relevant Borrowing Date:
(a) Notice of Borrowing. The Agent shall have received a Notice
of Borrowing;
(b) Continuation of Representations and Warranties. The
representations and warranties in Article V shall be true and correct on and
as of such Borrowing Date with the same effect as if made on and as of such
Borrowing Date (except to the extent such representations and warranties
expressly refer to an earlier date, in which case they shall be true and
correct as of such earlier date); and
(c) No Existing Default. No Default or Event of Default shall
exist or shall result from such Borrowing.
Each Notice of Borrowing submitted by the Company hereunder, and each making
of a Borrowing by the Company, shall constitute a representation and warranty
by the Company hereunder, as of the date of each such notice or request and as
of each Borrowing Date, that the conditions in Section 4.02 are satisfied.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
The Company represents and warrants to the Agent and each Bank that:
5.01 Corporate Existence. The Company and each of its Restricted
Subsidiaries are duly incorporated or otherwise formed, validly existing and
(if applicable) in good standing in each case under the laws of its
jurisdiction of incorporation or formation and have all requisite power and
all authority as a corporation, partnership or other form of business
organization, governmental licenses, authorizations, certificates, consents
and approvals required to carry on their respective businesses as now
conducted in all material respects.
5.02 Corporate Power. The execution, delivery and performance by the
Company of the Loan Documents and the consummation of the transactions
contemplated by such Loan Documents are within the Company's corporate powers,
have been duly authorized by all necessary corporate action, and do not
contravene (a) the Company's charter or bylaws or (b) any law or regulation
applicable to the Company, or (c) any material ("material" for the purposes of
this representation meaning creating a liability of $50,000,000 or more)
agreement binding on the Company, or, to its knowledge, any other agreement
binding on the Company.
5.03 Authorization and Approvals. No authorization or approval or
other action by, and no notice to or filing with, any Governmental Authority
is required for the due execution, delivery and performance by the Company of
the Loan Documents or the consummation of the transactions contemplated by
such Loan Documents.
5.04 Enforceable Obligations. This Agreement has been duly executed
and delivered by the Company. This Agreement is, and, when executed and
delivered in accordance with this Agreement, each Note will be, the legal,
valid and binding obligations of the Company enforceable against the Company
in accordance with their respective terms, except as such enforceability may
be limited by any applicable bankruptcy, insolvency, reorganization,
moratorium or similar law affecting creditors' rights generally, and by
general principles of equity.
5.05 Financial Statements. The audited consolidated balance sheet of
the Company and its Subsidiaries as of December 31, 1994, and the related
audited consolidated statements of income and cash flows for the fiscal year
then ended (as shown on the Company's Form 10-K for the year ended December
31, 1994) and the unaudited consolidated balance sheet of the Company and its
Subsidiaries as of June 30, 1995 and the related unaudited statements of income
and cash flows for the fiscal quarter then ended (as shown on the Company's
Form 10-Q for the quarter ended June 30, 1995), fairly present the
consolidated financial condition of the Company and its Subsidiaries as of
such dates and the consolidated results of operations of the Company and its
Subsidiaries for such fiscal periods, all in accordance with GAAP except as
otherwise expressly noted therein, subject (in the case of the unaudited
balance sheet and income statement) to changes resulting from normal year-end
audit adjustments.
5.06 Litigation. Except as disclosed in the Company's Form 10-K for
the year ended December 31, 1994, or the Company's Form 10-Q for the quarter
ended June 30, 1995, which were delivered to the Banks prior to the date
hereof, or as further disclosed by the Company to the Banks and the Agent in
writing prior to the date hereof, there is no pending or, to the knowledge of
the Company, threatened action or proceeding affecting the Company or any of
its Subsidiaries before any court, governmental agency or arbitrator, in which
there is a reasonable likelihood of an adverse decision which could materially
adversely affect the consolidated financial condition or operations of the
Company and its Subsidiaries, taken as a whole. There is no pending or, to
the knowledge of the Company, threatened action or proceeding affecting the
Company which purports to affect the legality, validity, binding effect or
enforceability of any of the Loan Documents.
5.07 Regulation U; Use of Proceeds. Following the application of the
proceeds of each Loan, not more than 25% of the value of the assets of the
Company which are subject to any arrangement with the Agent or any Bank
(herein or otherwise) whereby the Company's or any Subsidiary's right or
ability to sell, pledge or otherwise dispose of assets is in any way restricted
will be Margin Stock. The Company shall not, and shall not suffer or permit
any of its Subsidiaries to, use any portion of the Loan proceeds, directly or
indirectly, to acquire any securities in connection with any transaction
subject to Section 13 (other than an Investment Transaction) or Section 14 of
the Exchange Act, unless, prior to the time such transaction becomes subject
to such Section 13 or 14, the board of directors or other applicable governing
body of the Person that is the issuer of such securities has adopted a
resolution approving such transaction and approving a Change in Control with
respect to such Person whereby the Company may acquire control of such Person.
For purposes of this Section 5.07, an "Investment Transaction" means a
transaction subject to Section 13(d), but not Section 16, of the Exchange Act,
provided that in connection with such transaction the Company or its
Subsidiary (as the case may be) has reported and at all times continues to
report to the SEC that such transaction is undertaken for investment purposes
only and not for any of the purposes specified in clauses 4(a) through (j),
inclusive, of Schedule 13D.
5.08 Investment Company Act. Neither the Company nor any of its
Subsidiaries is an "investment company" or a company "controlled" by an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended.
5.09 ERISA. The Company is in compliance with all applicable
provisions of ERISA.
5.10 Holding Company. Neither the Company nor any of its Subsidiaries
is a "holding company", or a "subsidiary company" of a "holding company", or
an "affiliate" of a "holding company" or of a "subsidiary company" of a
"holding company", or a "public utility" within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
5.11 Environmental Condition. Except as disclosed in the Company's
Form 10-K Report for the year ended December 31, 1994 or in the Company's Form
10-Q Report for the quarter ended June 30, 1995, or as further disclosed by
the Company to the Banks and the Agent in writing, the aggregate contingent
and non-contingent liabilities of the Company and its Subsidiaries which are
presently known to any Responsible Officer and reasonably expected to arise in
connection with (a) the requirements of Environmental Protection Statutes or
(b) any obligation or liability to any Person in connection with any
Environmental matters, including any release or threatened release of any
Hazardous Substance or Hazardous Waste, do not exceed 10% of the Consolidated
Tangible Net Worth of the Company (excluding such liabilities to the extent
covered by insurance if the insurer has confirmed that such insurance covers
such liabilities).
5.12 No Material Adverse Change. Since December 31, 1994, there has
been no material adverse change in the business, consolidated financial
position or consolidated results of operation of the Company and its
Subsidiaries.
ARTICLE VI
AFFIRMATIVE COVENANTS
So long as any Bank shall have any Commitment hereunder, the Swingline
Bank shall have any Swingline Commitment, or any Note shall remain unpaid, the
Company will unless the Majority Banks waive compliance in writing:
6.01 Compliance with Laws Etc. Comply and cause each of its
Subsidiaries to comply in all material respects with all applicable laws,
rules, regulations and orders, including compliance with the requirements of
ERISA and Environmental Protection Statutes and the payment and discharge
before delinquency of all taxes, assessments and governmental charges or
levies imposed upon the Company or any of its Subsidiaries or any property of
the Company or any of its Subsidiaries, in each case to the extent that the
failure to comply, pay or discharge would have a material adverse effect on
the Company and its Subsidiaries taken as a whole; provided that neither the
Company nor any Subsidiary of the Company shall be required to pay any such
tax, assessment, charge or levy or comply with any requirement which is being
contested in good faith and adequately reserved against to the extent required
by GAAP.
6.02 Reporting Requirements. Furnish to the Agent and each of the
Banks:
(a) promptly after the filing or sending thereof and in any event
not later than 115 days after the end of each fiscal year, a copy of the
Company's annual report which it sends to its public security holders and a
copy of the Company's report on Form 10-K which the Company files with the SEC
for such year together with a duly-completed Compliance Certificate;
(b) promptly after the filing thereof, and in any event within 60
days after the end of each of the first three fiscal quarters during each
fiscal year, the Company's report on Form 10-Q which the Company files with
the SEC for such quarter together with a duly completed Compliance Certificate;
(c) promptly, but in any event within five days after a
Responsible Officer of the Company has obtained knowledge thereof, a notice of
each Default or Event of Default, together with a statement of a Responsible
Officer setting forth the details of such Default or Event of Default and the
actions which the Company has taken and proposes to take with respect thereto;
(d) promptly after the filing thereof, copies of each of the
reports on Form 8-K and each Schedule 13D (and any amendment thereto), if any,
which the Company files with the SEC;
(e) no later than five Business Days after the date of
promulgation thereof by such rating agency, notice of any change in the
Applicable Rating by S&P or Moody's that would change the Applicable Margin or
Applicable Fee Amount;
(f) promptly upon any Responsible Officer becoming aware thereof,
notice of any transaction or event that is, or is reasonably anticipated to
result in, a Specified Transaction or a Change in Control as to the Company;
(g) promptly upon such date becoming reasonably determinable by
any Responsible Officer (but no later than two Business Days after the
effective date of any Specified Transaction or Change in Control), notice of
the effective date of any Specified Transaction or Change in Control as to the
Company; and
(h) such other information respecting the condition or
operations, financial or otherwise, of the Company and its Subsidiaries as any
Bank through the Agent may from time to time reasonably request.
6.03 Use of Proceeds. Use the proceeds of the Loans for general
corporate purposes, including to backstop the Company's commercial paper
program.
6.04 Maintenance of Insurance. Maintain, and cause each of its
Restricted Subsidiaries to maintain, insurance with responsible and reputable
insurance companies or associations in such amounts and covering such risks as
are usually carried by companies engaged in similar businesses and owning
similar properties in the same general areas in which the Company and its
Restricted Subsidiaries operate, provided that the Company and its Restricted
Subsidiaries may self-insure to the extent and in the manner normal for
companies of like size, type and financial condition. The Company may
maintain its Restricted Subsidiaries' insurance on behalf of them.
6.05 Corporate Existence Etc. Preserve and maintain, and cause each of
its Restricted Subsidiaries to preserve and maintain, its corporate existence,
rights and franchises; provided, however, that no Event of Default shall arise
under this Section 6.05 as a result of any Specified Transaction if any
prepayment required under Section 2.09(c) is timely made, or as a result of
the termination of existence, rights and franchises of any Restricted
Subsidiary pursuant to any merger or consolidation to which such Restricted
Subsidiary is a party, and provided, further, that the Company or any
Restricted Subsidiary shall not be required to preserve any right or franchise
if the Company or such Restricted Subsidiary shall determine that the
preservation thereof is no longer desirable in the conduct of the business of
the Company or such Restricted Subsidiary, as the case may be, and that the
loss thereof is not disadvantageous in any material respect to the Banks.
6.06 Visitation Rights. From time to time and so long as any visit or
inspection will not unreasonably interfere with the operations of the Company
and its Restricted Subsidiaries, upon reasonable notice, permit the Agent and
any Bank or any agents or representatives thereof to examine the financial
records and books of account of, and visit and inspect the properties of, the
Company and any such Restricted Subsidiary, and to discuss the affairs,
finances and accounts of the Company and any such Restricted Subsidiary with
any of their respective officers or directors.
ARTICLE VII
NEGATIVE COVENANTS
So long as any Bank shall have any Commitment hereunder, the Swingline
Bank shall have any Swingline Commitment, or any Note shall remain unpaid, the
Company will not, unless the Majority Banks waive compliance in writing:
7.01 Consolidated Tangible Net Worth. Have Consolidated Tangible Net
Worth of less than $3,100,000,000.
7.02 Leverage Ratio. Permit, as of the last day of any fiscal quarter,
its ratio of (a) the aggregate outstanding principal amount of Total Senior
Debt to (b) Total Capitalization to be greater than 50%.
7.03 Liens. Fail to perform and observe any term, covenant or
agreement contained in Section 3.7 of the Senior Debt Indenture (as modified
for purposes hereof as set forth in the proviso to the next sentence hereof).
For the purposes of this Section 7.03, Section 3.7 and the definitions of all
terms defined in the Senior Debt Indenture and used in or otherwise applicable
to such Section 3.7 are hereby incorporated in this Agreement by reference as
if such provisions and definitions were set forth in full herein; provided,
however, that solely for the purposes of this Section 7.03 the word
"Securities" as used in the Senior Debt Indenture shall mean the Notes, the
phrase "this Section 3.7" used therein shall mean this Section 7.03, and the
word "Issuer" used therein shall mean the Company.
ARTICLE VIII
EVENTS OF DEFAULT
8.01 Event of Default. Any of the following shall constitute an "Event
of Default":
(a) Non-Payment. The Company fails to pay, (i) any principal on
any Note when such principal is due and payable, (ii) any interest on any Note
within five days after such interest becomes due and payable, or (iii) the
commitment fee set forth in Section 2.12 within 15 days after such commitment
fee becomes due and payable; or
(b) Representation or Warranty. Any representation or warranty
made by the Company or any Responsible Officer (including representations and
warranties deemed made pursuant to Section 4.02 hereof) under or in connection
with any Loan Document is incorrect in any material respect on or as of the
date made or deemed made; or
(c) Specific Defaults. The Company fails to perform or observe
any term, covenant or agreement contained in any of Sections 6.02(c), 6.02(e),
6.02(f), 7.01, 7.02 or 7.03; or
(d) Other Defaults. The Company fails to perform or observe any
other term or covenant contained in this Agreement, and such default shall
continue unremedied for a period of 30 days after written notice thereof is
given to the Company by the Agent at the request of any Bank; or
(e) Cross-Default. The Company or any Restricted Subsidiary (i)
fails to make any payment of principal of or premium or interest on (A) any
Debt outstanding under the 364-Day Credit Agreement, or (B) any Debt (other
than Debt described in clause (iv) of the definition of Debt) which is
outstanding in the principal amount of at least $100,000,000 in the aggregate
of the Company or such Restricted Subsidiary (as the case may be), when such
payment in respect of Debt described in clause (A) or (B) becomes due and
payable (whether by scheduled maturity, required prepayment, acceleration,
demand, or otherwise), and such failure continues after the applicable grace
or notice period, if any, in effect on the date of such failure, event or
condition in the agreement or instrument relating to any such Debt; or (ii)
fails to perform or observe any other condition or covenant, or any other
event shall occur or condition exist, under any agreement or instrument
relating to any such Debt (other than Debt described in clause (iv) of the
definition of Debt) and such failure continues after the applicable grace or
notice period in effect on the date of such failure, event or condition, if
any, if the effect of such failure, event or condition is to cause any such
Debt to be declared to be due and payable prior to its stated maturity; or
(f) Insolvency; Voluntary Proceedings. The Company or any
Restricted Subsidiary (i) generally fails to pay, or admits in writing its
inability to pay, its debts as they become due, subject to applicable grace
periods, if any, whether at stated maturity or otherwise; (ii) commences any
Insolvency Proceeding with respect to itself; or (iii) takes any corporate
action to effectuate or authorize any of the foregoing; or
(g) Involuntary Proceedings. Any involuntary Insolvency
Proceeding is commenced or filed against the Company or any Restricted
Subsidiary, and such Involuntary Proceeding is not released, vacated or stayed
within 60 days after the commencement or filing thereof; or
(h) Judgments. Any judgment or order for the payment of money in
excess of $50,000,000 shall be rendered against the Company and remain
unsatisfied and either (i) enforcement proceedings shall have been commenced
by any creditor upon such judgment or order or (ii) there shall be any period
of 60 consecutive days during which a stay of enforcement of such judgment or
order, by reason of a pending appeal or otherwise, shall not be in effect.
8.02 Remedies. If any Event of Default shall occur and be continuing,
the Agent shall, at the request of, or may, with the consent of, the Majority
Banks, (a) by notice to the Company, declare the obligation of each Bank to
make Loans, including the obligation of the Swingline Bank to make Swingline
Loans, be terminated, whereupon such obligations shall be terminated; (b) by
notice to the Company, declare the unpaid principal amount of all outstanding
Loans, all interest accrued and unpaid thereon, and all other amounts owing or
payable hereunder or under any other Loan Document, to be immediately due and
payable, without presentment, demand, protest or other notice of any kind, all
of which are hereby expressly waived by the Company; and (c) exercise on
behalf of itself and the Banks all other rights and remedies available to it
and the Banks under the Loan Documents or applicable law; provided, however,
that upon the occurrence of any event specified in subsection (f) or (g) of
Section 8.01 (in the case of subsection (g) upon the expiration of the 60-day
period mentioned therein), the obligation of each Bank to make Loans,
including the obligation of the Swingline Bank to make Swingline Loans, shall
automatically terminate and the unpaid principal amount of all outstanding
Loans and all interest and other amounts as aforesaid shall automatically
become due and payable without further act of the Agent or any Bank.
8.03 Rights Not Exclusive. The rights provided for in this Agreement
and the other Loan Documents are cumulative and are not exclusive of any other
rights, powers, privileges or remedies provided by law or in equity.
ARTICLE IX
THE AGENT
9.01 Appointment and Authorization. Each Bank hereby irrevocably
appoints, designates and authorizes the Agent to take such action on its
behalf under the provisions of this Agreement and each other Loan Document and
to exercise such powers and perform such duties as are expressly delegated to
it by the terms of this Agreement or any other Loan Document, together with
such powers as are reasonably incidental thereto. Notwithstanding any
provision to the contrary contained elsewhere in this Agreement or in any
other Loan Document, the Agent shall not have any duties or responsibilities,
except those expressly set forth herein, nor shall the Agent have or be deemed
to have any fiduciary relationship with any Bank, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into this Agreement or any other Loan Document or otherwise exist against the
Agent.
9.02 Delegation of Duties. The Agent may execute any of its duties
under this Agreement or any other Loan Document by or through agents,
employees or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Agent shall not be
responsible for the negligence or misconduct of any agent or attorney-in-fact
that it selects with reasonable care.
9.03 Liability of Agent. None of the Agent-Related Persons shall (i)
be liable for any action taken or omitted to be taken by any of them under or
in connection with this Agreement or any other Loan Document or the
transactions contemplated hereby (except for its own gross negligence or
willful misconduct), or (ii) be responsible in any manner to any of the Banks
for any recital, statement, representation or warranty made by the Company or
any Subsidiary or Affiliate of the Company, or any officer thereof, contained
in this Agreement or in any other Loan Document, or in any certificate,
report, statement or other document referred to or provided for in, or
received by the Agent under or in connection with, this Agreement or any other
Loan Document, or the validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any other Loan Document, or for any failure
of the Company or any other party to any Loan Document to perform its
obligations hereunder or thereunder. No Agent-Related Person shall be under
any obligation to any Bank to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or any other Loan Document, or to inspect the properties, books or
records of the Company or any of the Company's Subsidiaries or Affiliates.
9.04 Reliance by Agent. (a) The Agent shall be entitled to rely, and
shall be fully protected in relying, upon any writing, resolution, notice,
consent, certificate, affidavit, letter, telegram, facsimile, telex or
telephone message, statement or other document or conversation believed by it
to be genuine and correct and to have been signed, sent or made by the proper
Person or Persons, and upon advice and statements of legal counsel (including
counsel to the Company), independent accountants and other experts selected by
the Agent. The Agent shall be fully justified in failing or refusing to take
any action under this Agreement or any other Loan Document unless it shall
first receive such advice or concurrence of the Majority Banks as it deems
appropriate and, if it so requests, it shall first be indemnified to its
satisfaction by the Banks against any and all liability and expense which may
be incurred by it by reason of taking or continuing to take any such action.
The Agent shall in all cases be fully protected in acting, or in refraining
from acting, under this Agreement or any other Loan Document in accordance
with a request or consent of the Majority Banks or all of the Banks if
required by Section 10.01 and such request and any action taken or failure to
act pursuant thereto shall be binding upon all of the Banks.
(b) For purposes of determining compliance with the conditions
specified in Section 4.01, each Bank that has executed this Agreement shall be
deemed to have consented to, approved or accepted or to be satisfied with,
each document or other matter either sent by the Agent to such Bank for
consent, approval, acceptance or satisfaction, or required thereunder to be
consented to or approved by or acceptable or satisfactory to the Bank.
9.05 Notice of Default. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default,
except with respect to defaults in the payment of principal, interest and fees
required to be paid to the Agent for the account of the Banks, unless the
Agent shall have received written notice from a Bank or the Company referring
to this Agreement, describing such Default or Event of Default and stating
that such notice is a "notice of default". The Agent will notify the Banks of
its receipt of any such notice. The Agent shall take such action with respect
to such Default or Event of Default as may be requested by the Majority Banks
in accordance with Article VIII; provided, however, that unless and until the
Agent has received any such request, the Agent may (but shall not be obligated
to) take such action, or refrain from taking such action, with respect to such
Default or Event of Default as it shall deem advisable or in the best interest
of the Banks.
9.06 Credit Decision. Each Bank acknowledges that none of the
Agent-Related Persons has made any representation or warranty to it, and that
no act by the Agent hereinafter taken, including any review of the affairs of
the Company and its Subsidiaries, shall be deemed to constitute any
representation or warranty by any Agent-Related Person to any Bank. Each Bank
represents to the Agent that it has, independently and without reliance upon
any Agent-Related Person and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, prospects, operations, property, financial and other condition and
creditworthiness of the Company and its Subsidiaries, and all applicable bank
regulatory laws relating to the transactions contemplated hereby, and made its
own decision to enter into this Agreement and to extend credit to the Company
hereunder. Each Bank also represents that it will, independently and without
reliance upon any Agent-Related Person and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Agreement and the other Loan Documents, and to make such investigations
as it deems necessary to inform itself as to the business, prospects,
operations, property, financial and other condition and creditworthiness of
the Company. Except for notices, reports and other documents expressly herein
required to be furnished to the Banks by the Agent, the Agent shall not have
any duty or responsibility to provide any Bank with any credit or other
information concerning the business, prospects, operations, property,
financial and other condition or creditworthiness of the Company which may
come into the possession of any of the Agent-Related Persons.
9.07 Indemnification. Whether or not the transactions contemplated
hereby are consummated, the Banks shall indemnify upon demand the
Agent-Related Persons (to the extent not reimbursed by or on behalf of the
Company and without limiting the obligation of the Company to do so), pro
rata, from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever which may be imposed on, incurred by, or asserted
against the Agent-Related Persons in any way relating to or arising out of the
Loan Documents or any action taken or omitted by an Agent-Related Person,
provided, however, that no Bank shall be liable for the payment to the
Agent-Related Persons of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from such Person's gross negligence or willful
misconduct. IT IS THE INTENTION OF THE BANKS THAT EACH AGENT-RELATED PERSON
SHALL, TO THE EXTENT PROVIDED IN THIS SECTION 9.07, BE INDEMNIFIED FOR ITS
ORDINARY, SOLE OR CONTRIBUTORY NEGLIGENCE. Without limitation of the
foregoing, each Bank shall reimburse the Agent upon demand for its ratable
share of any costs or out-of-pocket expenses (including Attorney Costs)
incurred by the Agent in connection with the preparation, execution, delivery,
administration, modification, amendment or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in respect
of rights or responsibilities under, this Agreement, any other Loan Document,
or any document contemplated by or referred to herein, to the extent that the
Agent is not reimbursed for such expenses by or on behalf of the Company. The
undertaking in this Section shall survive the payment of all Obligations
hereunder and the resignation or replacement of the Agent.
9.08 Agent in Individual Capacity. The Bank serving as Agent and its
Affiliates may make loans to, issue letters of credit for the account of,
accept deposits from, acquire equity interests in and generally engage in any
kind of banking, trust, financial advisory, underwriting or other business
with the Company and its Subsidiaries and Affiliates as though the Bank
serving as Agent were not the Agent hereunder and without notice to or consent
of the Banks. The Banks acknowledge that, pursuant to such activities, the
Bank serving as Agent or its Affiliates may receive information regarding the
Company or its Affiliates (including information that may be subject to
confidentiality obligations in favor of the Company or such Subsidiary) and
acknowledge that the Agent shall be under no obligation to provide such
information to them. With respect to its Loans, the Bank serving as Agent
shall have the same rights and powers under this Agreement as any other Bank
and may exercise the same as though it were not the Agent, and the terms
"Bank" and "Banks" include the Bank serving as Agent in its individual
capacity.
9.09 Successor Agent. The Agent may, and at the request of the
Majority Banks shall, resign as Agent upon 30 days' prior written notice to
the Banks and the Company. If the Agent resigns under this Agreement, the
Majority Banks shall appoint from among the Banks a successor agent for the
Banks which successor agent shall be subject to approval by the Company. If
no successor agent is appointed prior to the effective date of the resignation
of the Agent, the Agent may appoint, after consulting with the Banks and the
Company, a successor agent from among the Banks. Upon the acceptance of its
appointment as successor agent hereunder, such successor agent shall succeed
to all the rights, powers and duties of the retiring Agent and the term
"Agent" shall mean such successor agent and the retiring Agent's appointment,
powers and duties as Agent shall be terminated. After any retiring Agent's
resignation hereunder as Agent, the provisions of this Article IX and Sections
3.01, 10.04 and 10.05 shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Agent under this Agreement. If no
successor agent has accepted appointment as Agent by the date which is 30 days
following a retiring Agent's notice of resignation, the retiring Agent's
resignation shall nevertheless thereupon become effective and the Banks shall
perform all of the duties of the Agent hereunder and under any other Loan
Document until such time, if any, as the Majority Banks appoint a successor
agent as provided for above. Notwithstanding the foregoing, however, BofA may
not be removed as the Agent at the request of the Majority Banks unless BofA
shall also simultaneously be replaced as Swingline Bank hereunder pursuant to
documentation in form and substance reasonably satisfactory to BofA.
9.10 Withholding Tax. (a) If any Bank is a foreign corporation,
foreign partnership or foreign trust within the meaning of the Code and such
Bank claims exemption from, or a reduction of, United States withholding tax
under Sections 1441 or 1442 of the Code, such Bank agrees with and in favor of
the Agent, to deliver to the Agent:
(i) if such Bank claims an exemption from, or a reduction
of, withholding tax under a United States tax treaty, two properly
completed and executed IRS Forms 1001 and W-8 at least 30 days before
the payment of any interest is due in the first calendar year and at
least 30 days before the payment of any interest in each third
succeeding calendar year during which interest may be paid under this
Agreement;
(ii) if such Bank claims that interest paid under this
Agreement is exempt from United States withholding tax because it is
effectively connected with a United States trade or business of such
Bank, two properly completed and executed copies of IRS Form 4224 at
least 30 days before the payment of any interest is due in the first
taxable year of such Bank and in each succeeding taxable year of such
Bank during which interest may be paid under this Agreement; and
(iii) such other form or forms as may be required under the
Code or other laws of the United States as a condition to exemption
from, or reduction of, United States withholding tax.
The Agent shall deliver one copy of each such form to the Company.
Such Bank agrees to promptly notify the Agent of any change in circumstances
which would modify or render invalid any claimed exemption or reduction.
(b) If any Bank claims exemption from, or reduction of,
withholding tax under a United States tax treaty by providing IRS Form 1001
and such Bank sells, assigns, grants a participation in, or otherwise
transfers all or part of the Obligations of the Company to such Bank, such
Bank agrees to notify the Agent (which in turn shall notify the Company) of the
percentage amount in which it is no longer the beneficial owner of Obligations
of the Company to such Bank. To the extent of such percentage amount, the
Agent (and the Company) will treat such Bank's IRS Form 1001 as no longer
valid.
(c) If any Bank claiming exemption from United States withholding
tax by filing IRS Form 4224 with the Agent sells, assigns, grants a
participation in, or otherwise transfers all or part of the Obligations of the
Company to such Bank, such Bank agrees to notify the Agent (which in turn
shall notify the Company) of the percentage amount in which it is no longer
the beneficial owner of Obligations of the Company to such Bank. To the
extent of such percentage amount, the Agent (and the Company) will treat such
Bank's Form 4224 as no longer valid.
(d) If any Bank is entitled to a reduction in the applicable
withholding tax, the Agent may withhold from any interest payment to such Bank
an amount equivalent to the applicable withholding tax after taking into
account such reduction. If the forms or other documentation required by
subsection (a) of this Section are not delivered to the Agent, then the Agent
may withhold from any interest payment to such Bank not providing such forms
or other documentation an amount equivalent to the applicable withholding tax
(without taking into account such reduction).
(e) If the IRS or any other Governmental Authority of the United
States or other jurisdiction asserts a claim that the Agent did not properly
withhold tax from amounts paid to or for the account of any Bank (because the
appropriate form was not delivered, was not properly executed, or because such
Bank failed to notify the Agent of a change in circumstances which rendered
the exemption from, or reduction of, withholding tax ineffective, or for any
other reason) such Bank shall indemnify the Agent fully for all amounts paid,
directly or indirectly, by the Agent as tax or otherwise, including penalties
and interest, and including any taxes imposed by any jurisdiction on the
amounts payable to the Agent under this Section, together with all costs and
expenses (including Attorney Costs). The obligation of the Banks under this
subsection shall survive the payment of all Obligations and the resignation or
replacement of the Agent.
9.11 Co-Agent. Any Bank identified on the facing page and signature
page of this Agreement as "co-agent" shall have no right, power, obligation,
liability, responsibility or duty under this Agreement other than those
applicable to all Banks as such. Each Bank acknowledges that it has not
relied, and will not rely, on any Bank so identified in deciding to enter into
this Agreement or in taking or not taking action hereunder.
ARTICLE X
MISCELLANEOUS
10.01 Amendments and Waivers. No amendment or waiver of any provision
of this Agreement or any other Loan Document, and no consent with respect to
any departure by the Company therefrom, shall be effective unless the same
shall be in writing and signed by the Majority Banks and acknowledged by the
Agent, and then such waiver shall be effective only in the specific instance
and for the specific purpose for which given; provided, however, that no such
waiver, amendment, or consent shall, unless in writing and signed by all the
Banks and acknowledged by the Agent, do any of the following:
(a) increase or extend the Commitment of any Bank (except as
provided in Section 2.06) or reinstate any Commitment terminated pursuant to
Section 8.02 or subsections (b) or (c) of Section 2.09;
(b) postpone or delay any date fixed for any payment of
principal, interest or fees due to the Banks (or any of them) hereunder or
under any Loan Document;
(c) reduce the principal of, or the rate of interest specified
herein on any Revolving Loan, or any fees payable hereunder or under any other
Loan Document;
(d) change the percentage of the Commitments or of the aggregate
unpaid principal amount of the Notes which is required for the Banks or any of
them to take any action hereunder; or
(e) amend this Section or any provision herein providing for
consent or other action by all Banks;
and, provided further, that (i) no amendment, waiver or consent shall, unless
in writing and signed by the Agent in addition to the Majority Banks or all
the Banks, as the case may be, affect the rights or duties of the Agent under
this Agreement or any other Loan Document, and (ii) no amendment, waiver or
consent shall, unless in writing and signed by the Swingline Bank in addition
to the Majority Banks or all the Banks, as the case may be, affect the rights
or duties of the Swingline Bank under this Agreement or any other Loan
Document.
10.02 Notices. (a) All notices, requests and other communications
shall be in writing (including, unless the context expressly otherwise
provides, by telecopier transmission, provided that any matter transmitted by
telecopier shall be immediately preceded or confirmed by a telephone call to
the recipient at the number specified on the applicable signature page hereof),
and mailed, telecopied or delivered, to the address or telecopier number
specified for notices on Schedule 10.02; or, as directed to the Company or the
Agent, to such other address as shall be designated by such party in a written
notice to the other parties, and as directed to any other party, at such other
address as shall be designated by such party in a written notice to the
Company and the Agent.
(b) All such notices, requests and communications shall be
effective, if sent by overnight courier, one Business Day after delivery to
the courier company; if sent by telecopier, when received in legible form by
the receiving telecopier equipment; if mailed, upon the second Business Day
after the date deposited into the U.S. mail; or if delivered, upon delivery;
provided that (i) notices pursuant to Article II or IX shall not be effective
until actually received by the Agent, and (ii) telecopied notices received by
any party after its normal business hours (or on a day other than a Business
Day) shall be effective on the next Business Day.
(c) Any agreement of the Agent and the Banks herein to receive
certain notices by telephone or facsimile is solely for the convenience and at
the request of the Company. The Agent and the Banks shall be entitled to rely
on the authority of any Person purporting to be a Person authorized by the
Company to give such notice and the Agent and the Banks shall not have any
liability to the Company or other Person on account of any action taken or not
taken by the Agent or the Banks in reliance upon such telephonic or facsimile
notice. The obligation of the Company to repay the Loans shall not be
affected in any way or to any extent by any failure by the Agent and the Banks
to receive written confirmation of any telephonic or facsimile notice or the
receipt by the Agent and the Banks of a confirmation which is at variance with
the terms understood by the Agent and the Banks to be contained in the
telephonic or facsimile notice.
10.03 No Waiver: Cumulative Remedies. No failure to exercise and no
delay in exercising, on the part of the Agent or any Bank, any right, remedy,
power or privilege hereunder, shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, remedy, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege.
10.04 Costs and Expenses. The Company shall:
(a) whether or not the transactions contemplated hereby are
consummated, pay for all reasonable costs and expenses incurred by the Agent
in connection with the preparation, delivery, administration and execution of,
and any amendment, supplement, waiver or modification to (in each case,
whether or not consummated), this Agreement, any Loan Document and any other
documents prepared in connection herewith or therewith, and the consummation
of the transactions contemplated hereby and thereby; limited, however, in the
case of the preparation, execution and delivery of the Loan Documents, to the
reasonable Attorney Costs of one law firm and, to the extent not duplicative,
internal counsel, for the Agent as more fully provided in a letter agreement
between the Company and the Agent; and
(b) pay or reimburse the Agent and each Bank within five
Business Days after demand for all costs and expenses (including reasonable
Attorney Costs) incurred by them in connection with the enforcement, attempted
enforcement, or preservation of any rights or remedies under this Agreement or
any other Loan Document during the existence of an Event of Default or after
acceleration of the Loans (including in connection with any "workout" or
restructuring regarding the Loans, and including in any Insolvency Proceeding
or appellate proceeding).
10.05 Indemnity. The Company agrees, to the fullest extent permitted
by law, to indemnify and hold harmless the Agent-Related Persons, and each
Bank and its respective directors, officers, employees and agents, from and
against any and all claims, damages, liabilities and expenses (including,
without limitation, reasonable Attorney Costs) for which any of them may
become liable or which may be incurred by or asserted against the Agent-Related
Persons, or such Bank or any such director, officer, employee or agent (other
than by another Bank or any successor or assign of another Bank), in each case
in connection with or arising out of or by reason of any investigation,
litigation, or proceeding, whether or not the Agent or such Bank or any such
director, officer, employee or agent is a party thereto, arising out of,
related to or in connection with any Loan Document or any transaction in which
any proceeds of all or any part of the Loans are applied, EXPRESSLY INCLUDING
ANY SUCH CLAIM, DAMAGE, LIABILITY OR EXPENSE ARISING OUT OF THE ORDINARY, SOLE
OR CONTRIBUTORY NEGLIGENCE OF SUCH INDEMNIFIED PERSON (but excluding any such
claim, damage, liability or expense to the extent attributable to the gross
negligence or willful misconduct of, or violation of any law or regulation by,
any such indemnified Person). The undertaking in this Section shall survive
the payment of all Obligations hereunder.
10.06 Payments Set Aside. To the extent that the Company makes a
payment to the Agent or the Banks, or the Agent or the Banks exercise their
right of set-off, and such payment or the proceeds of such set-off or any part
thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside or required (including pursuant to any settlement
entered into by the Agent or such Bank in its discretion) to be repaid to a
trustee, receiver or any other party, in connection with any Insolvency
Proceeding or otherwise, then (a) to the extent of such recovery the
obligation or part thereof originally intended to be satisfied shall be
revived and continued in full force and effect as if such payment had not been
made or such set-off had not occurred, and (b) each Bank severally agrees to
pay to the Agent upon demand its pro rata or other applicable share of any
amount so recovered from or repaid by the Agent.
10.07 Binding Effect; Assignments; Participations. (a) This Agreement
shall become effective when it shall have been executed by the Company and the
Agent and when the Agent shall have, as to each Bank, received a copy
(including one transmitted by telecopier) of a signature page hereof executed
by such Bank and thereafter shall be binding upon and inure to the benefit of
and be enforceable by the Company, the Agent and each Bank and their respective
successors and assignees, subject to Section 10.07(e) and except that the
Company shall not have the right to assign its rights or obligations hereunder
or any interest herein without the prior written consent of the Banks (other
than an assignment effectuated by operation of law pursuant to a Specified
Transaction).
(b) Each Bank may grant participations to one or more commercial
banks or other Persons, in each case in accordance with applicable law, in or
to all or any part of, the Loans owing to, or the Commitment of, such Bank and
the Note held by such Bank subject to Section 10.07(e), and to the extent of
any such participation (unless otherwise stated therein) the purchaser of such
participation shall, to the fullest extent permitted by law, have the same
rights to payment hereunder and under such Loan and Note as it would have if
it were such Bank hereunder, provided that (x) the originating Bank's
obligations under this Agreement, including, without limitation, its
commitment to make loans to the Company hereunder, shall remain unchanged,
such Bank shall remain solely responsible for the performance thereof, such
Bank shall remain the holder of any such Note for all purposes under this
Agreement, and the Company, the other Banks and the Agent shall continue to
deal solely and directly with such Bank in connection with such Bank's rights
and obligations under this Agreement; (y) no such participant shall be
entitled to receive any greater payment pursuant to Sections 3.01, 3.03 and
3.05 hereof than such Bank would have been entitled to receive with respect to
the rights assigned except as a result of circumstances arising after the date
of such participation to the extent that such circumstances affect other Banks
and participants generally; and (z) no Bank shall grant a participation that
conveys to the participant the right to vote or consent under this Agreement,
other than the right to vote upon or consent to (i) any increase in the amount
of such Bank's Commitment; (ii) any reduction of the principal amount of, or
interest to be paid on, such Bank's Loan or Note; (iii) any reduction of the
commitment fee; or (iv) any postponement of the due date in respect of any
amounts owed to such Bank under any Loan Document.
(c) In accordance with applicable law, any Bank may assign a
portion, in an amount of at least $10,000,000 of its Commitment, together with
a ratable portion of its Loans and other rights and obligations hereunder to
an Eligible Assignee, with the prior written consents of the Agent and (unless
there has occurred and is continuing an Event of Default) the Company, which
consents shall not be unreasonably withheld, subject to Section 10.07(e);
provided, however, that neither the Company's nor the Agent's consent shall be
required for, and the minimum amount for assignment shall not apply to, any
assignment to an Eligible Assignee which already is a Bank party to this
Agreement. In connection with the assignment by the Swingline Bank of all of
its Commitment and Loans hereunder, the Swingline Commitment and Swingline
Loans shall be included as part of the assignment transaction. Each such
Eligible Assignee to which an assignment has been made pursuant to this
Section 10.07(c) which is not already a Bank shall become a party to this
Agreement as a Bank by executing and delivering to the Agent an amendment to
this Agreement or a supplemental agreement with the assigning Bank, which
amendment or supplemental agreement shall be in form and substance reasonably
satisfactory to the Agent and shall (among other matters) specify the CD
Lending Office, Domestic Lending Office and Eurodollar Lending Office of such
Eligible Assignee, provided that, in the case of each such assignment, (i) at
such time the signature pages to this Agreement shall be deemed to be modified
to reflect the Commitments of such assignee Bank and of the existing Banks,
(ii) the Company shall issue new Notes to such assignee Bank and to the
assigning Bank to reflect the revised Commitments and (iii) the Agent shall
receive at the time of such assignment, from the assigning or assignee Bank, a
non-refundable assignment fee of $2,500. To the extent of any assignment
pursuant to this Section 10.07(c), the assigning Bank shall be relieved of its
obligations hereunder with respect to its assigned Commitment.
(d) In addition to the assignments and participations permitted
under Section 10.07(b) and (c), any Bank may at any time create a security
interest in, or pledge, all or any portion of its rights under this Agreement
and the Notes held by it in favor of any Federal Reserve Bank in accordance
with Regulation A of the FRB, and such Federal Reserve Bank may enforce such
pledge or security interest in any manner permitted under applicable law.
(e) Unless an Event of Default has occurred and is continuing,
no assignments or participations shall result in a Bank (together with its
Affiliates) holding Commitments, or participations therein, in excess of
$100,000,000 without the prior written consent of the Company.
10.08 Set-off. In addition to any rights and remedies of the Banks
provided by law, if an Event of Default exists or the Loans have been
accelerated, to the fullest extent permitted by applicable law each Bank is
authorized at any time and from time to time, without prior notice to the
Company, any such notice being waived by the Company to the fullest extent
permitted by law, to set off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held by, and other
indebtedness at any time owing by, such Bank to or for the credit or the
account of the Company against any and all Obligations owing to such Bank, now
or hereafter existing, irrespective of whether or not the Agent or such Bank
shall have made demand under this Agreement or any Loan Document and although
such Obligations may be contingent or unmatured. Each Bank agrees promptly to
notify the Company and the Agent after any such set-off and application made
by such Bank; provided, however, that the failure to give such notice shall
not affect the validity of such set-off and application.
10.09 Interest. (a) It is the intention of the parties hereto that the
Agent and each Bank shall conform strictly to usury laws applicable to it, if
any. Accordingly, if the transactions with the Agent or any Bank contemplated
hereby would be usurious under applicable law, if any, then, in that event,
notwithstanding anything to the contrary in this Agreement, the Notes or any
other agreement entered into in connection with this Agreement or the Notes, it
is agreed as follows: (i) the aggregate of all consideration which constitutes
interest under applicable law that is contracted for, taken, reserved, charged
or received by the Agent or such Bank, as the case may be, under this
Agreement, the Notes or under any other agreement entered into in connection
with this Agreement or the Notes shall under no circumstances exceed the
maximum amount allowed by such applicable law and any excess shall be cancelled
automatically and, if theretofore paid, shall be refunded by the Agent or such
Bank, as the case may be, to the Company, and (ii) in the event that the
maturity of any Loan or other obligation payable to the Agent or such Bank, as
the case may be, is accelerated or in the event of any required or permitted
prepayment, then such consideration that constitutes interest under law
applicable to the Agent or such Bank, as the case may be, may never include
more than the maximum amount allowed by such applicable law and excess
interest, if any, to the Agent or such Bank, as the case may be, provided for
in this Agreement or otherwise shall be cancelled automatically as of the date
of such acceleration or prepayment and, if theretofore paid, shall, at the
option of the Agent or such Bank, as the case may be, be credited by the Agent
or such Bank, as the case may be, on the principal amount of the obligations
owed to the Agent or such Bank, as the case may be, by the Company or refunded
by the Agent or such Bank, as the case may be, to the Company. To the extent
that Article 5069-1.04 of the Texas Revised Civil Statutes is relevant to any
Bank for the purposes of determining the Highest Lawful Rate, such Bank hereby
elects to determine the applicable rate ceiling under such Article by the
indicated (weekly) rate ceiling from time to time in effect, subject to such
Bank's right to subsequently change such rate ceiling in accordance with
applicable law. Tex. Rev. Civ. Stat. Ann. art. 5069, ch. 15 (which regulates
certain revolving credit loan accounts and revolving triparty accounts) shall
not apply to this Agreement or the Notes.
(b) In the event that at any time the interest rate applicable
to any Loan made by any Bank would exceed the Highest Lawful Rate, the rate of
interest to accrue on the Loans by such Bank shall be limited to the Highest
Lawful Rate, but shall accrue, to the extent permitted by law, on the
principal amount of the Loans made by such Bank from time to time outstanding,
if any, at the Highest Lawful Rate allowed by applicable law until the total
amount of interest accrued on the Loans made by such Bank equals the amount of
interest which would have accrued if the interest rates applicable to the
Loans pursuant to Article II had at all times been in effect. In the event
that upon the final payment of the Loans made by any Bank and termination of
the Commitment of such Bank, the total amount of interest paid to such Bank
hereunder is less than the total amount of interest which would have accrued
if the interest rates applicable to such Loans pursuant to Article II had at
all times been in effect, then the Company agrees to pay to such Bank, to the
extent permitted by law, an amount equal to the excess of (a) the lesser of
(i) the amount of interest which would have accrued on such Loans if the
Highest Lawful Rate had at all times been in-effect or (ii) the amount of
interest which would have accrued if the interest rates applicable to such
Loans pursuant to Article II had at all times been in effect over (b) the
amount of interest otherwise accrued on such Loans in accordance with this
Agreement.
10.10 Confidentiality. (a) Each Bank and the Agent acknowledge that
certain confidential and proprietary information of the Company (the
"Information") is a valuable, special, and a unique asset of the Company.
Each Bank and the Agent agree that they will use the care specified below to
keep all Information in confidence, and will not use any Information except as
provided in this Section, or disclose any portion of the Information to any
third party without the prior written consent of the Company except as
provided in this Section. Each Bank and the Agent covenant to use the care
specified below to not disclose such Information on behalf of itself, its
officers, directors, agents, employees, and affiliates. Each Bank and the
Agent shall use the same degree of care to protect the confidentiality of all
Information as such Bank or the Agent, as the case may be, uses to protect its
own confidential and proprietary information (which it does not wish to have
published or disseminated).
(b) Information provided by the Company to any Bank or the
Agent, which the Company in good faith regards as Information hereunder shall
be clearly marked by the Company as "Confidential," "Proprietary," or bear any
other appropriate notice indicating the sensitive nature of the Information.
Any tangible Information not easily markable shall be transmitted by the
Company to such Bank or the Agent under cover of written letter which clearly
identifies the Information and designates it as confidential "Information".
All information conveyed to such Bank or the Agent orally relating to plans,
forecasts, products or other non-public information shall be deemed
confidential "Information".
(c) If any Bank or the Agent is confronted with legal action to
disclose Information received under this Agreement or otherwise makes
disclosures of confidential information under clauses (ii), (iii) or (iv) of
Section 10.10(e) (other than any disclosure to a regulatory authority pursuant
to an examination of the books, records or affairs of such Bank or Agent),
such Bank or the Agent, as the case may be, shall (to the extent permitted by
applicable law) promptly notify the Company.
(d) All Information disclosed or furnished under this Agreement
shall remain the property of the Company. At the Company's request, the
Information in tangible form shall be promptly returned or destroyed, together
with all copies thereof unless such return or destruction is contrary to law,
regulation, legal process, administrative order, or administrative request
having, or deemed to have, the force of law. Upon request, the appropriate
Bank or the Agent, as the case may be, shall provide written certification of
the destruction.
(e) Notwithstanding the foregoing, each Bank and the Agent may
disclose Information (i) as has become generally available to the public, (ii)
as may be required or appropriate in any report, statement or testimony
submitted to any municipal, state or Federal regulatory body having or
claiming to have jurisdiction over such Bank or to the FRB, or the FDIC or
similar organizations (whether in the United States or elsewhere), (iii) as
may be required or appropriate in response to any summons or subpoena or in
connection with any litigation, (iv) in order to comply with any law, order,
regulation or ruling applicable to such Bank, (v) to any regulatory authority
pursuant to an examination of the books, records or affairs of any Bank or the
Agent, (vi) to the prospective transferee in connection with any contemplated
transfer of any of the Notes or any interest therein by such Bank, provided,
that such prospective transferee executes an agreement with the Company or the
transferor containing provisions substantially identical to those contained in
this Section, (vii) to the extent reasonably required in connection with any
litigation or proceeding to which the Agent, any Bank or their respective
Affiliates may be party, (viii) to such Bank's independent auditors and other
professional advisors, (ix) to the extent reasonably necessary to disclose in
connection with the exercise of any remedy hereunder and under the Notes, or
(x) as to any Bank, as expressly permitted under the terms of any other
document or agreement regarding confidentiality to which the Company is party
or is deemed party with such Bank.
10.11 Preservation of Certain Matters. Notwithstanding any other term
or provision hereof to the contrary, any entity ceasing to be a "Bank" for
purposes of this Agreement, by virtue of any matter or event contemplated by
Section 2.07, 2.08, 3.06 or 10.07 shall retain any and all rights arising
under Section 10.05, and shall continue to remain responsible to the Agent for
all liabilities under Section 9.07 and Section 9.10 relating to matters
occurring prior to the termination of such entity as a "Bank."
10.12 Notification of Addresses, Lending Offices Etc. Each Bank shall
notify the Agent in writing of any changes in the address to which notices to
the Bank should be directed, of addresses of any Lending Office, of payment
instructions in respect of all payments to be made to it hereunder and of such
other administrative information as the Agent shall reasonably request.
10.13 Counterparts. This Agreement may be executed in any number of
separate counterparts, each of which, when so executed, shall be deemed an
original, and all of said counterparts taken together shall be deemed to
constitute but one and the same agreement.
10.14 Severability. The illegality or unenforceability of any
provision of this Agreement or any instrument or agreement required hereunder
shall not in any way affect or impair the legality or enforceability of the
remaining provisions of this Agreement or any instrument or agreement required
hereunder.
10.15 Governing Law; Jurisdiction. (a) THIS AGREEMENT AND THE NOTES
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAW OF
THE STATE OF NEW YORK; PROVIDED THAT THE AGENT AND THE BANKS SHALL RETAIN ALL
RIGHTS ARISING UNDER FEDERAL LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE
OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND
BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE COMPANY, THE AGENT
AND THE BANKS CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE
NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF THE COMPANY, THE AGENT
AND THE BANKS IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE
LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY
NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH
JURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY DOCUMENT RELATED HERETO. THE
COMPANY, THE AGENT AND THE BANKS EACH WAIVES PERSONAL SERVICE OF ANY SUMMONS,
COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY
NEW YORK LAW.
10.16 WAIVER OF JURY TRIAL. THE COMPANY, THE BANKS AND THE AGENT EACH
WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE OTHER
LOAN DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN ANY
ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE
PARTIES AGAINST ANY OTHER PARTY OR ANY AGENT-RELATED PERSON, PARTICIPANT OR
ASSIGNEE, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE.
THE COMPANY, THE BANKS AND THE AGENT EACH AGREE THAT ANY SUCH CLAIM OR CAUSE
OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING
THE FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A
TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION,
COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO
CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR THE OTHER LOAN
DOCUMENTS OR ANY PROVISION HEREOF OR THEREOF. THIS WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS.
10.17 ENTIRE AGREEMENT. THIS WRITTEN AGREEMENT AND THE LOAN DOCUMENTS,
AS DEFINED IN THIS AGREEMENT, REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES
AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.
[REMAINDER OF THIS PAGE LEFT INTENTIONALLY BLANK]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their proper and duly authorized officers as of
the day and year first above written.
COMPAQ COMPUTER CORPORATION
By:__________________________________
Title:_______________________________
BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, as Administrative Agent
By:__________________________________
Title:_______________________________
Commitment: $71,619,047.65 BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, as Swingline Bank and as a
Bank
By:__________________________________
Title:_______________________________
Commitment: $53,333,333.33 NATIONSBANK TEXAS, N.A., as Co-Agent and
as a Bank
By:__________________________________
Title:_______________________________
Commitment: $53,333,333.33 CITIBANK, N.A., as Co-Agent and as a Bank
By:__________________________________
Title:_______________________________
Commitment: $36,571,428.57 ABN AMRO BANK N.V.
By:__________________________________
Title:_______________________________
By:__________________________________
Title:_______________________________
Commitment: $36,571,428.57 BANQUE NATIONALE DE PARIS,
HOUSTON AGENCY
By:__________________________________
Title:_______________________________
Commitment: $20,000,000.00 THE BANK OF TOKYO TRUST COMPANY
By:__________________________________
Title:_______________________________
Commitment: $36,571,428.57 BANKERS TRUST COMPANY
By:__________________________________
Title:_______________________________
Commitment: $20,000,000.00 BARCLAYS BANK PLC
By:__________________________________
Title:_______________________________
Commitment: $20,000,000.00 THE CHASE MANHATTAN BANK, N.A.
By:__________________________________
Title:_______________________________
Commitment: $36,571,428.57 CHEMICAL BANK
By:__________________________________
Title:_______________________________
Commitment: $36,571,428.57 COMMERZBANK AG, ATLANTA AGENCY
By:__________________________________
Title:_______________________________
Commitment: $36,571,428.57 DEUTSCHE BANK AG
NEW YORK AND/OR CAYMAN ISLANDS BRANCHES
By:__________________________________
Title:_______________________________
By:__________________________________
Title:_______________________________
Commitment: $36,571,428.57 DRESDNER BANK AG
By:__________________________________
Title:_______________________________
By:__________________________________
Title:_______________________________
Commitment: $36,571,428.57 FIRST INTERSTATE BANK OF TEXAS, N.A.
By:__________________________________
Title:_______________________________
Commitment: $20,000,000.00 FIRST NATIONAL BANK OF BOSTON
By:__________________________________
Title:_______________________________
Commitment: $36,571,428.57 THE FIRST NATIONAL BANK OF CHICAGO
By:__________________________________
Title:_______________________________
Commitment: $36,571,428.57 THE FUJI BANK, LIMITED, HOUSTON AGENCY
By:__________________________________
Title:_______________________________
Commitment: $20,000,000.00 THE LONG-TERM CREDIT BANK OF JAPAN, LTD.,
NEW YORK BRANCH
By:__________________________________
Title:_______________________________
Commitment: $20,000,000.00 THE MITSUBISHI TRUST AND BANKING
CORPORATION
By:__________________________________
Title:_______________________________
Commitment: $20,000,000.00 MORGAN GUARANTY TRUST COMPANY OF NEW YORK
By:__________________________________
Title:_______________________________
Commitment: $20,000,000.00 NATIONAL AUSTRALIA BANK LIMITED
By:__________________________________
Title:_______________________________
Commitment: $20,000,000.00 NATIONAL WESTMINSTER BANK PLC,
NEW YORK BRANCH
By:__________________________________
Title:_______________________________
NATIONAL WESTMINSTER BANK PLC,
NASSAU BRANCH
By:__________________________________
Title:_______________________________
By:__________________________________
Title:_______________________________
Commitment: $20,000,000.00 THE NORTHERN TRUST COMPANY
By:__________________________________
Title:_______________________________
Commitment: $36,571,428.57 PNC BANK, N.A.
By:__________________________________
Title:_______________________________
Commitment: $36,571,428.57 ROYAL BANK OF CANADA
By:__________________________________
Title:_______________________________
Commitment: $36,571,428.57 THE SANWA BANK LIMITED,
DALLAS AGENCY
By:__________________________________
Title:_______________________________
Commitment: $36,571,428.57 SHAWMUT BANK, N.A.
By:__________________________________
Title:_______________________________
Commitment: $36,571,428.57 SOCIETE GENERALE, SOUTHWEST AGENCY
By:__________________________________
Title:_______________________________
Commitment: $36,571,428.57 THE SUMITOMO BANK, LIMITED, HOUSTON AGENCY
By:__________________________________
Title:_______________________________
Commitment: $36,571,428.57 TORONTO DOMINION (TEXAS), INC.
By:__________________________________
Title:_______________________________
EXHIBIT A
NOTICE OF BORROWING
Bank of America National Trust and
Savings Association, as Administrative Agent
Agency Management Services #5596
1455 Market Street, 12th Floor
San Francisco, CA 94103
Attn: Compaq SAO
[Date]
Ladies and Gentlemen:
This Notice of Borrowing is delivered pursuant to Section [2.03] [2.05]
of the $1,000,000,000 Revolving Credit Agreement, dated as of October 31, 1995
(together with all amendments, if any, from time to time made thereto, the
"Credit Agreement"), among Compaq Computer Corporation, a Delaware corporation
(the "Company"), certain Banks parties thereto and Bank of America National
Trust and Savings Association, as administrative agent for such Banks. Unless
otherwise defined herein or the context otherwise requires, terms used herein
have the meanings provided in the Credit Agreement.
The Company hereby irrevocably requests a Borrowing under the Credit
Agreement, and in that connection sets forth below the information relating to
such Borrowing (the "Proposed Borrowing") as required by Section [2.03(a)]
[2.05(a)] of the Credit Agreement:
(i) The Borrowing Date of the Proposed Borrowing is
________________, 199___.
(*)[(ii)The type of Revolving Loans comprising the Proposed
Borrowing is [Base Rate Revolving Loans] [Adjusted CD Rate Revolving
Loans] [LIBOR Revolving Loans].]
(**)[(ii)The type of Swingline Loan comprising the Proposed
Borrowing is a [Base Rate Swingline Loan] [Adjusted CD Rate Swingline
Loan] [LIBO Rate Swingline Loan].]
(iii) The [aggregate] amount of the Proposed Borrowing is
$___________.
(iv) The duration of the Interest Period for each CD Loan or
Offshore Loan made as part of the Proposed Borrowing is _______ (days)
(months).
The undersigned hereby certifies that the following statements are true
on the date hereof, and will be true on the date of the Proposed Borrowing:
(A) the representations and warranties contained in Article V of
the Credit Agreement are true and correct on and as of such Borrowing
Date with the same effect as if made on and as of such Borrowing Date
(except to the extent such representations and warranties expressly
refer to an earlier date, in which case they are true and correct as of
such earlier date); and
(B) no Default or Event of Default exists or shall result from
such Proposed Borrowing.
Very truly yours,
COMPAQ COMPUTER CORPORATION
By:__________________________________
Name:________________________________
Title:_______________________________
EXHIBIT B
CONVERSION/CONTINUATION NOTICE
(*)To be included for a Proposed Borrowing comprised of Revolving Loans.
(**)To be included for a Proposed Borrowing comprised of a Swingline Loan.
Bank of America National Trust and
Savings Association, as Administrative Agent
Agency Management Services #5596
1455 Market Street, 12th Floor
San Francisco, CA 94103
Attn: Compaq SAO
[Date]
Ladies and Gentlemen:
This Conversion/Continuation Notice is delivered pursuant to Section
2.04 of the $1,000,000,000 Revolving Credit Agreement, dated as of October 31,
1995 (together with all amendments, if any, from time to time made thereto,
the "Credit Agreement"), among Compaq Computer Corporation, a Delaware
corporation (the "Company"), certain Banks parties thereto and Bank of America
National Trust and Savings Association, as administrative agent for such
Banks. Unless otherwise defined herein or the context otherwise requires,
terms used herein have the meanings provided in the Credit Agreement.
The Company hereby requests that on _________ ____, 199__,
(1) $__________ of the presently outstanding principal amount of
the Revolving Loans originally made on ___________, 199__ [and
$______________ of the presently outstanding principal amount of the
Revolving Loans originally made on __________________, 199__],
(2) all presently being maintained as (*)[Adjusted CD Rate
Revolving Loans] [Base Rate Revolving Loans] [LIBOR Revolving Loans],
(3) be [converted into] [continued as],
(4) (*)[Adjusted CD Rate Revolving Loans having as Interest
Period of ___ days] [LIBOR Revolving Loans having an Interest Period of
___ months] [Base Rate Revolving Loans].
The Company has caused this Conversion/Continuation Notice to be
executed and delivered this _____ day of _____________, 199__.
COMPAQ COMPUTER CORPORATION
By:__________________________________
Name:________________________________
Title:_______________________________
EXHIBIT C
COMPLIANCE CERTIFICATE
This Compliance Certificate is delivered pursuant to Section 6.02 of the
$1,000,000,000 Revolving Credit Agreement dated as of October 31, 1995
(*)Select appropriate interest rate option.
(*)Unless otherwise agreed, a Revolving Loan cannot be converted into or
continued as an Adjusted CD Rate Revolving Loan or a LIBOR Revolving
Loan with an Interest Period exceeding one month (in the case of a LIBOR
Revolving Loan) or 30 days (in the case of an Adjusted CD Rate Revolving
Loan) during the existence of a Default or Event of Default.
(together with all amendments, if any, from time to time made thereto, the
"Credit Agreement") among Compaq Computer Corporation, a Delaware corporation
(the "Company"), certain Banks parties thereto and Bank of America National
Trust and Savings Association, as administrative agent for such Banks. Unless
otherwise defined herein or the context otherwise requires, terms used herein
have the meanings provided in the Credit Agreement.
The undersigned certifies, represents and warrants as follows:
(a) The Consolidated Tangible Net Worth of the Company as of
___________, 19__ was $________________.
[Insert calculation in reasonable detail]
(b) The Leverage Ratio of the Company is ______________________.
[Insert calculation in reasonable detail]
(c) There exists on the date of this Compliance Certificate no
Default or Event of Default under the Credit Agreement.
EXECUTED AND DELIVERED this ____ day of ______________, 199__.
COMPAQ COMPUTER CORPORATION
By:__________________________________
Name:________________________________
Title:_______________________________
EXHIBIT D-1
October 31, 1995
To each of the Banks parties to the
$1,000,000,000 Revolving Credit Agreement
dated as of October 31, 1995 among
Compaq Computer Corporation, said Banks
and Bank of America National Trust and Savings
Association, as Administrative Agent for such Banks,
and to such Administrative Agent
Re: Compaq Computer Corporation Revolving Credit Agreement
Ladies and Gentlemen:
As Senior Vice President, General Counsel and Secretary of Compaq Computer
Corporation, a Delaware corporation (the "Company"), I am familiar with the
$1,000,000,000 Revolving Credit Agreement dated as of October 31, 1995 (the
"Credit Agreement") among the Company, the Banks listed on the signature pages
thereof and Bank of America National Trust and Savings Association, as
administrative agent for such Banks (the "Agent"). In such capacity, I am
also familiar with the Certificate of Incorporation and Bylaws of the Company
and the corporate records of the Company. This opinion is being furnished to
you pursuant to Section 4.01(d) of the Credit Agreement. Terms used herein
but not defined herein shall have the same meaning ascribed to such terms in
the Credit Agreement.
Before rendering this opinion, I (or other attorneys with the Company's
legal department acting under my direction) have examined the Credit Agreement
and the Loan Documents, and have examined and relied upon originals or
photostatic or certified copies of such corporate records, certificates of
officers of the Company and of public officials, and such agreements,
documents and instruments, and have made such investigations of law, as I or
such other attorneys have deemed relevant and necessary as the basis for the
opinion hereinafter expressed. In such examination, I or such other attorneys
assumed the genuineness of all signatures (other than signatures of officers
of the Company on the Loan Documents), the authenticity of all documents
submitted to us as originals, and the conformity to original documents of all
documents submitted to us as photostatic or certified copies.
On the basis of the foregoing, I am of the opinion that:
1. The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware,
and has all corporate powers and all governmental licenses,
authorizations, consents and approvals required to carry on its business
as now conducted, except to the extent failure to obtain such licenses,
authorizations, consents or approvals would not materially adversely
affect the business, consolidated financial position or consolidated
results of operations of the Company and its Subsidiaries taken as a
whole.
2. The execution, delivery and performance by the Company of
the Loan Documents are within the Company's corporate powers, have been
duly authorized by all necessary corporate action on the part of the
Company, and do not contravene, or constitute a default under, (a) the
Certificate of Incorporation or Bylaws of the Company, (b) any
contractual restriction contained in any material (meaning for the
purposes of this opinion those creating a monetary liability of
$50,000,000 or more) indenture, loan or credit agreement, receivables
sale or financing agreement, lease financing agreement, capital lease,
mortgage, security agreement, bond or note, or any guaranty of any of such
obligations to which the Company is a party, or, to my knowledge, any
other agreement or instrument to which the Company is a party, or (c) any
judgment, injunction, order or decree known to me to be binding upon the
Company. The execution, delivery and performance by the Company of the
Loan Documents will not result in the creation or imposition of any lien,
security interest or other charge or encumbrance on any asset of the
Company. The Credit Agreement and the Notes have been duly executed and
delivered by the Company.
3. No authorization, approval or other action by, and no notice
to or filing with, any governmental authority or regulatory body is
required to be made or obtained by the Company for the execution,
delivery and performance by the Company of the Loan Documents.
4. None of the execution, delivery or performance by the
Company of the Loan Documents contravenes any provision of law or
regulation (including, without limitation, Regulation X issued by the
FRB) applicable to the Company or of Regulation U issued by the FRB.
5. The Loan Documents constitute the legal, valid and binding
obligations of the Company enforceable against the Company in accordance
with their terms.
6. Except as disclosed in the Company's Form 10-K for the year
ended December 31, 1994, or the Company's Form 10-Q for the quarter ended
June 30, 1995, there is no action, suit or proceeding pending or, to my
knowledge, threatened against the Company or any of its Subsidiaries
before any court or arbitrator or any governmental agency, in which there
is a reasonable possibility of an adverse decision which could materially
adversely affect the consolidated financial condition or operations of the
Company and its Subsidiaries taken as a whole or which in any manner
draws into question the validity of the Credit Agreement or any other
Loan Document.
7. Neither the Company nor any Subsidiary is an "investment
company" or a company "controlled" by an "investment company" within the
meaning of the Investment Company Act of 1940, as amended.
8. Neither the Company nor any Subsidiary is a "holding
company", a "subsidiary company" of a "holding company", an "affiliate"
of a "holding company" or an "affiliate" of a "subsidiary company" of a
"holding company", in each case as such terms are defined in the Public
Utility Holding Company Act of 1935, as amended.
The opinions set forth above are subject to the following
qualifications:
(a) In rendering the opinions expressed in paragraph 2 above,
neither I nor any other attorney acting under my direction have made any
examination of any accounting or financial matters related to financial
covenants contained in certain documents to which the Company may be
subject, and I express no opinion with respect thereto.
(b) The opinion in paragraph 5 above is subject, as to
enforceability, to the effect of general principles of equity (regardless
of whether considered in a proceeding in equity or at law), including
without limitation, concepts of materiality, reasonableness, good faith
and fair dealing, and also to the possible unavailability of specific
performance or injunctive relief. Such principles of equity are of
general application, and in applying such principles a court, among other
things, might not allow a creditor to accelerate maturity of a debt upon
the occurrence of a default deemed immaterial or might decline to order
the Company to perform covenants.
(c) I express no opinion with respect to the following
provisions to the extent that the same are contained in the Loan
Documents: (i) provisions releasing, exculpating or exempting a party
from, or requiring the indemnification of a party for, liability for its
own action or inaction, to the extent that the same are inconsistent with
public policy, and (ii) provisions purporting to waive rights to notice,
legal defenses, or other benefits that cannot be waived under applicable
law.
(d) This opinion is limited in all respects to the laws of the
State of Texas and the General Corporation Law of the State of Delaware
and Federal law.
(e) In rendering the opinion expressed in paragraph 6 above, I
(or the other attorneys acting under my direction) have only reviewed the
files and records of the Company and its Subsidiaries, and we have
consulted with such senior officers of the Company and its Subsidiaries
as we have deemed necessary.
This opinion is solely for the benefit of the Banks, the Agent, their
respective successors, assigns and participants and may not be relied upon in
connection with any other transaction or by any other person.
Very truly yours,
Wilson B. Fargo
Senior Vice President,
General Counsel and Secretary
EXHIBIT D-2
October 31, 1995
To each of the Banks parties to the
$1,000,000,000 Revolving Credit Agreement
dated as of October 31, 1995 among
Compaq Computer Corporation, said Banks
and Bank of America National Trust and Savings
Association, as Administrative Agent
for such Banks, and Nationsbank of Texas,
National Association and Citibank, N.A., as Co-Agents
for such Banks, and to such Agents
Re: Compaq Computer Corporation Revolving Credit Agreement
Ladies and Gentlemen:
This opinion is furnished to you pursuant to Section 4.01(d) of
the $1,000,000,000 Revolving Credit Agreement, dated as of October 31, 1995
(the "Credit Agreement"), among Compaq Computer Corporation (the "Company"),
the Banks parties thereto, Bank of America National Trust and Savings
Association, as Administrative Agent for such Banks, and Nationsbank of Texas,
National Association and Citibank, N.A., as Co-Agents for such Banks. Except
as otherwise defined herein, terms defined in the Credit Agreement are used
herein as therein defined.
I have acted as counsel for the Company in connection with the
preparation, execution, delivery and effectiveness of the Credit Agreement and
the other Loan Documents.
In that connection, I have examined:
(1) The Credit Agreement;
(2) The Notes and other documents furnished by the Company
pursuant to the conditions precedent set forth in Section
4.01 of the Credit Agreement; and
(3) Such other materials as I have deemed necessary to render
the opinions provided herein.
In rendering the opinion herein set forth, I have assumed (i) the
due authorization, execution and delivery of each document referred to in
clauses (1) and (2) of the third paragraph of this opinion by all parties to
such documents other than the Company and that each such document is valid,
binding and enforceable (subject to limitations on enforceability of the types
referred to in paragraphs (a) and (b) below) against the parties thereto other
than the Company, (ii) the legal capacity of natural persons, (iii) the
genuineness of all signatures, (iv) the authenticity of all documents
submitted to me as originals and (v) the conformity to original documents of
all documents submitted to me as copies. In addition, I have (i) investigated
such questions of law and (ii) relied as to factual matters on such
certificates from officers and representatives of the Company and from public
officials, as I have deemed necessary or appropriate for the purposes of this
opinion.
Based upon the foregoing and upon such investigation as I have
deemed necessary, I am of the opinion that the Credit Agreement and the Notes
constitute the legal, valid and binding obligations of the Company enforceable
against the Company in accordance with their terms.
The opinion set forth above is subject to the following qualifications:
(a) My opinion is subject, as to enforceability, to the effect
of any applicable bankruptcy, insolvency, reorganization, moratorium or
similar law affecting creditors' rights generally.
(b) My opinion is subject, as to enforceability, to the effect
of general principles of equity (regardless of whether considered in a
proceeding in equity or at law), including without limitation, concepts
of materiality, reasonableness, good faith and fair dealing, and also to
the possible unavailability of specific performance or injunctive relief.
Such principles of equity are of general application, and in applying
such principles a court, among other things, might not allow a creditor
to accelerate maturity of a debt upon the occurrence of a default deemed
immaterial or might decline to order the Company to perform covenants.
(c) I express no opinion with respect to the enforceability
under Texas law of the provisions of the Credit Agreement and the Notes
stating that such documents shall be governed by, and construed in
accordance with, the laws of the state of New York.
(d) I express no opinion with respect to the following
provisions to the extent that the same are contained in the Credit
Agreement or the Notes: (i) provisions releasing, exculpating or
exempting a party from, or requiring the indemnification of a party for,
liability for its own action or inaction, to the extent that the same are
inconsistent with public policy, and (ii) provisions purporting to waive
rights to notice, legal defenses, or other benefits that cannot be waived
under applicable law.
In rendering the opinions expressed herein, I have relied upon the
opinions stated in paragraphs 1, 2 (so far as such paragraph 2 relates to the
corporate powers of, and due authorization of the Loan Documents by, the
Company), 4 and 5 of the opinion, dated today, of the General Counsel of the
Company which is being delivered to you pursuant to Section 4.01(d) of the
Credit Agreement.
I express no opinion as to the effect of the law of any
jurisdiction other than the State of New York wherein any Bank may be located
or where any enforcement of the Loan Documents may be sought which limits the
rates of interest legally chargeable or collectible.
This opinion is limited to the laws of the State of New York.
The opinion herein has been furnished at your request and is
solely for your benefit and the benefit of your respective successors, assigns
and participants in connection with the subject transaction and may not be
relied upon by any other person or by you or any other person in any other
context without the prior written consent of the undersigned.
Very truly yours,
Stephanie A. Lucie
Corporate Counsel
Securities Compliance
EXHIBIT E
PROMISSORY NOTE
U.S. $ Dated: October 31, 1995
FOR VALUE RECEIVED, the undersigned, Compaq Computer Corporation, a
Delaware corporation (the "Company"), HEREBY PROMISES TO PAY to the order of
(the
"Bank") for the account of its applicable Lending Office (as defined in the
Credit Agreement referred to below) on the Revolving Termination Date (as
defined in the Credit Agreement) the principal sum of
U.S. dollars (U.S. $__________) or, if less, the aggregate unpaid
principal amount of the [Revolving] Loans (as defined in the $1,000,000,000
Revolving Credit Agreement dated as of October 31, 1995 among the Company, the
Bank, certain other lenders parties thereto and Bank of America National Trust
and Savings Association, as Administrative Agent for the Bank and such other
lenders; such Revolving Credit Agreement, as amended from time to time being
herein referred to as the "Credit Agreement") owing to the Bank outstanding on
the Revolving Termination Date (as defined in the Credit Agreement) [,
together with the principal amount of any outstanding Swingline Loans (as
defined in the Credit Agreement) made by the Bank as Swingline Bank (as
defined in the Credit Agreement)].
The Company promises to pay interest on the unpaid principal amount of
each Loan owing to the Bank from the date of such Loan until such principal
amount is paid in full, at such interest rates, and payable at such times, as
are specified in the Credit Agreement.
Both principal and interest are payable in lawful money of the United
States of America to Bank of America National Trust and Savings Association,
as Administrative Agent, at the Agent's Payment Office (as defined in the
Credit Agreement), in immediately available funds. Each Loan owed to the Bank
by the Company pursuant to the Credit Agreement, 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
Promissory Note; provided that the failure of the Bank to make any such
recordation or endorsement shall not affect the obligations of the Company
hereunder or under the Credit Agreement.
This Promissory Note is one of the Notes referred to in, and is subject
to and is entitled to the benefits of, the Credit Agreement. The Credit
Agreement, among other things, (i) provides for the making of [Revolving]
Loans by the Bank to the Company from time to time in an aggregate amount not
to exceed the U.S. dollar amount first above mentioned [and the making of
Swingline Loans by the Bank as Swingline Bank to the Company from time to time
in an aggregate amount not to exceed the Swingline Commitment (as such terms
are defined in the Credit Agreement)], the indebtedness of the Company
resulting from each Loan owing to the Bank being evidenced by this Promissory
Note, and (ii) contains provisions for acceleration of the maturity hereof
upon the happening of certain stated events and also for prepayments on
account of principal hereof prior to the maturity hereof upon the terms and
conditions therein specified.
This Promissory Note shall be governed by, and construed in accordance
with, the internal laws of the State of New York.
COMPAQ COMPUTER CORPORATION
By:__________________________________
Name:________________________________
Title:_______________________________
LOANS AND PAYMENTS OF PRINCIPAL
Amount of
Amount Principal Unpaid
of Type of Paid or Principal Notation
Date Loan Loan Prepaid Balance Made By
- ---- ------ ------- --------- --------- ---------
SCHEDULE 10.02
NOTICE ADDRESSES, PAYMENT AND LENDING OFFICES
<TABLE>
<S> <C> <C>
Addresses for Notices Address for Payments
___________________________________________________________________________________________________________
BANK OF AMERICA NATIONAL TRUST Bank of America N.T. & S.A. Bank of America N.T. & S.A.
AND SAVINGS ASSOCIATION, 1455 Market Street, 12th Floor (ABA 121-000-358)
as Administrative Agent San Francisco, CA 94103 Attn: Agency Management
Attn: Agency Management Services Services #5596
#5596 1850 Gateway Boulevard
Wendy Young Concord, CA 94520
Telephone: (415) 436-3420 For credit to account:
Facsimile: (415) 436-2700 No. 12335 14314
Ref: Compaq Computer Corporation
With a copy to:
Bank of America N.T. & S.A.
555 California Street
41st Floor
San Francisco, CA 94104
Attn: Corporate Banking
High Technology
Kevin McMahon
Telephone: (415) 622-8088
Facsimile: (415) 622-2514
</TABLE>
<TABLE>
<CAPTION> Domestic/CD/LIBOR Lending
Bank Commitment Offices Addresses for Notices
- ---- ----------- --------------------------- ----------------------------
<S> <C> <C> <C>
BANK OF AMERICA $71,619,047.65 Bank of America N.T. & S.A. Bank of America N.T. & S.A.
NATIONAL TRUST AND 1850 Gateway Boulevard 555 California Street
SAVINGS ASSOCIATION, Concord, CA 94520 41st Floor
as Swingline Bank and San Francisco, CA 94104
as a Bank Attn: Corporate Banking
High Technology
Kevin McMahon
Telephone: (415) 622-8088
Facsimile: (415) 622-4585/2514
ABN AMRO BANK N.V. $36,571,428.57 ABN AMRO Bank N.V. Credit Matters:
Houston Agency Houston Agency
Three Riverway, Suite 1600 ABN AMRO Bank N.V.
Houston, TX 77056 Houston Agency
Attn: Michael N. Oaks Three Riverway, Suite 1600
Telephone: (713) 964-3356 Houston, TX 77056
Facsimile: (713) 629-7533 Attn: Michael N. Oaks
Telephone: (713) 964-3356
Facsimile: (713) 629-7533
Operations/Administration:
----------------------------------
ABN AMRO BANK N.V.
Houston Agency
Three Riverway, Suite 1600
Houston, TX 77056
Attn: Patricia Baker
Telephone: (713) 964-3331
Facsimile: (713) 629-7533
THE BANK OF TOKYO $20,000,000.00 The Bank of Tokyo Trust Credit Matters:
TRUST COMPANY Company ----------------------------------
1251 Avenue of the Americas The Bank of Tokyo Trust Company
12th Floor 1251 Avenue of the Americas
New York, NY 10116-3138 12th Floor
Attn: Rolando Uy New York, NY 10116-3138
Telephone: (212) 766-5461 Attn: Elizabeth Tocchini
Facsimile: (212) 732-1678 Assistant Vice President
Telephone: (212) 782-4319
Facsimile: (212) 782-6445
THE BANK OF TOKYO Operations/Administration:
TRUST COMPANY ----------------------------------
(Continued) The Bank of Tokyo Trust Company
1251 Avenue of the Americas
New York, NY 10116-3138
Attn: Rolando Uy
Telephone: (212) 766-5461
Facsimile: (212) 732-1678
BANKERS TRUST COMPANY $36,571,428.57 Bankers Trust Company Credit Matters:
130 Liberty Street ----------------------------------
New York, NY 10006 Bankers Trust Company
Attn: Katherine A. Judge 130 Liberty Street
Vice President New York, NY 10006
Telephone: (212) 250-4969 Attn: Katherine A. Judge
Facsimile: (212) 250-7478 Vice President
Telephone: (212) 250-4969
Facsimile: (212) 250-7478
Operations/Administration:
----------------------------------
Bankers Trust Company
130 Liberty Street
New York, NY 10006
Attn: Robert Telesca
Assistant Vice President
Telephone: (212) 250-7342
Facsimile: (212) 250-7351
BANQUE NATIONALE $36,571,428.57 Banque Nationale de Paris Credit Matters:
DE PARIS Houston Agency ----------------------------------
Houston Agency 333 Clay Street Banque Nationale de Paris
Suite 3400 Houston Agency
Houston, TX 77002 333 Clay Street
Attn: John L. Stacy Suite 3400
Telephone: (713) 951-1222 Houston, TX 77002
Facsimile: (713) 659-1414 Attn: John L. Stacy
Telephone: (713) 951-1222
Facsimile: (713) 659-1414
Operations/Administration:
----------------------------------
Banque Nationale de Paris
Houston Agency
333 Clay Street
Suite 3400
Houston, TX 77002
Attn: Donna Rose
Telephone: (713) 951-1240
Facsimile: (713) 659-1414
BARCLAYS BANK PLC $20,000,000.00 Barclays Bank Plc Barclays Bank Plc
222 Broadway, 11th Floor 222 Broadway, 11th Floor
New York, NY 10038 New York, NY 10038
Attn: Clarke Moody Attn: Clarke Moody
Telephone: (212) 412-2584 Telephone: (212) 412-2584
Facsimile: (212) 412-7580 Facsimile: (212) 412-7580
THE CHASE MANHATTAN $20,000,000.00 The Chase Manhattan Bank N.A. The Chase Manhattan Bank N.A.
BANK N.A. One Chase Manhattan Plaza One Chase Manhattan Plaza
5th Floor 5th Floor
New York, NY 10081 New York, NY 10081
Attn: Nina Smith Attn: Nina Smith
Vice President Vice President
Telephone: (212) 552-1043 Telephone: (212) 552-1043
Facsimile: (212) 552-5189 Facsimile: (212) 552-5189
Operations/Administration:
----------------------------------
The Chase Manhattan Bank N.A.
Two Chase Plaza
5th Floor
New York, NY 10081
Attn: Elaine Augustine
Asst. Treasurer
Telephone: (212) 552-6549
Facsimile: (212) 552-1368
CHEMICAL BANK $36,571,428.57 Chemical Bank Chemical Bank
270 Park Avenue Media & Telecommunications Group
New York, NY 10017 Ninth Floor
Attn: John J. Huber 270 Park Avenue
Telephone: (212) 270-1402 New York, NY 10017
Facsimile: (212) 270-2625 Attn: John J. Huber
Managing Director
Telephone: (212) 270-1402
Facsimile: (212) 270-2625
Operations/Administration:
----------------------------------
Chemical Bank
140 East 45th Street
29th Floor
New York, NY 10017
Attn: Gloria Cupid
Account Manager
Telephone: (212) 622-1439
Facsimile: (212) 622-0136
CITIBANK, N.A., as $53,333,333.33 Citibank, N.A. Credit Matters:
Co-Agent and as a Bank 399 Park Avenue ----------------------------------
4th Floor, Zone 17 Citibank, N.A.
New York, NY 10043 399 Park Avenue
Attn: James M. Walsh 4th Floor, Zone 17
Telephone: (212) 559-7538 New York, NY 10043
Facsimile: (212) 593-0054 Attn: James M. Walsh
Vice President
Telephone: (212) 559-7538
Facsimile: (212) 593-0054
Operations/Administration:
----------------------------------
Citibank, N.A.
One Court Square
Long Island City, NY 11120
Attn: Sophie Tetenes
Telephone: (718) 248-7179
Facsimile: (718) 248-4844
COMMERZBANK AG $36,571,428.57 Commerzbank AG Credit Matters:
Atlanta Agency Atlanta Agency ----------------------------------
2 World Financial Center Commerzbank AG
New York, NY 10281 Atlanta Agency
Attn: Chris Scaffidi 1230 Peachtree Street N.E.
Assistant Vice President Suite 3500
Telephone: (212) 266-7596 Atlanta, GA 30309
Facsimile: (212) 266-7593 Attn: Harry Yergey
Vice President
Telephone: (404) 888-6500
Facsimile: (404) 888-6539
Operations/Administration:
----------------------------------
Commerzbank AG
Atlanta Agency
2 World Financial Center
New York, NY 10281
Attn: Chris Scaffidi
Assistant Vice President
Telephone: (212) 266-7596
Facsimile: (212) 266-7593
DEUTSCHE BANK AG $36,571,428.57 Deutsche Bank AG Credit Matters:
----------------------------------
New York and/or New York Branch Deutsche Bank AG
Cayman Island 31 West 52nd Street New York Branch
Branches 24th Floor 31 West 52nd Street
New York, NY 10019 24th Floor
Attn: John Quinn New York, NY 10019
Telephone: (212) 474-8229 Attn: Jeffrey N. Weiser
Facsimile: (212) 474-7880 Director
Telephone: (212) 474-8233
Facsimile: (212) 474-8212
Operations/Administration:
----------------------------------
Deutsche Bank AG
New York Branch
31 West 52nd Street
24th Floor
New York, NY 10019
Attn: John Quinn
Telephone: (212) 474-8229
Facsimile: (212) 474-7880
DRESDNER BANK AG $36,571,428.57 Dresdner Bank AG Credit Matters:
----------------------------------
New York Branch and 75 Wall Street, 33rd Floor Dresdner Bank AG
Grand Cayman Branch New York, NY 10005-2889 75 Wall Street, 30th Floor
Attn: Mona Karout New York, NY 10005-2889
Telephone: (212) 429-2287 Attn: Craig Erickson
Facsimile: (212) 429-2130 Telephone: (212) 429-2183
Facsimile: (212) 429-2524
Operations/Administration:
----------------------------------
Dresdner Bank AG
75 Wall Street, 33rd Floor
New York, NY 10005-2889
Attn: Mona Karout
Telephone: (212) 429-2287
Facsimile: (212) 429-2130
FIRST INTERSTATE BANK $36,571,428.57 First Interstate Bank of Credit Matters:
----------------------------------
OF TEXAS, N.A. Texas, N.A.
Beaverton Loan Center First Interstate Bank of Texas, N.A.
P.O. Box 4195 1000 Louisiana
Portland, OR 97208-4195 Houston, TX 77099
Attn: Sunil Singh Attn: Valerie Carlson
Syndications Manager Vice President
Telephone: (503) 614-6436 Telephone: (713) 250-4307
Facsimile: (503) 614-5878 Facsimile: (713) 250-7029
Operations/Administration:
----------------------------------
First Interstate Bank of Texas, N.A.
1000 Louisiana
Houston, TX 77099
Attn: Valerie Carlson
Vice President
Telephone: (713) 250-4307
Facsimile: (713) 250-7029
THE FIRST NATIONAL $20,000,000.00 The First National Bank Credit Matters:
----------------------------------
BANK OF BOSTON of Boston
100 Federal Street The First National Bank
Boston, MA 02062 of Boston
Telephone: (617) 434-7814 100 Federal Street
Facsimile: (617) 434-0819 Boston, MA 02062
Attn: Elizabeth M. Passela
Telephone: (617) 434-5542
Facsimile: (617) 434-0819
Operations/Administration:
----------------------------------
The First National Bank
of Boston
100 Federal Street
Boston, MA 02062
Attn: Mary Noonan
Telephone: (617) 434-7814
Facsimile: (617) 434-0819
THE FIRST NATIONAL $36,571,428.57 The First National Bank Credit Matters:
----------------------------------
BANK OF CHICAGO of Chicago
One First National Plaza The First National Bank
Suite 0088 of Chicago
Chicago, IL 60670-0088 One First National Plaza
Suite 0088
Chicago, IL 60670-0088
Attn: Cory Olson
Telephone: (312) 732-1706
Facsimile: (312) 732-1117
Operations/Administration:
----------------------------------
The First National Bank
of Chicago
One First National Plaza
Suite 0088
Chicago, IL 60670-0088
Attn: Dennis Degen/Colleen Muff
Telephone: (312) 732-9757
Facsimile: (312) 732-5161
THE FUJI BANK, LIMITED $36,571,428.57 The Fuji Bank, Limited Credit Matters:
----------------------------------
Houston Agency Houston Agency
One Houston Center The Fuji Bank, Limited
1221 McKinney Street Houston Agency
Suite 4100 One Houston Center
Houston, TX 77010 1221 McKinney Street, Suite 4100
Attn: Jenny Lin Houston, TX 77010
Telephone: (713) 650-7863 Attn: Mark F. Polasek
Facsimile: (713) 759-0048 Telephone: (713) 650-7863
Facsimile: (713) 759-0048
Operations/Administration:
----------------------------------
The Fuji Bank, Limited
Houston Agency
One Houston Center
1221 McKinney Street, Suite 4100
Houston, TX 77010
Attn: Jenny Lin
Telephone: (713) 650-7821
Facsimile: (713) 759-0048
THE LONG-TERM CREDIT $20,000,000.00 The Long-Term Credit Bank of Credit Matters:
----------------------------------
BANK OF JAPAN, LTD., Japan, Ltd.,
New York Branch New York Branch The Long-Term Credit Bank of
Finance Op. Div. Japan, Ltd.
165 Broadway Dallas Representative Office
New York, NY 10006 2200 Ross Ave., Suite 4700 West
Attn: Mr. R. Pacifici Dallas, TX 75201
Telephone: (212) 335-4801 Attn: R. Bruce Frey
Facsimile: (212) 608-3452 Vice President
Telephone: (214) 969-5352
Facsimile: (214) 969-5357
Operations/Administration:
----------------------------------
The Long-Term Credit Bank of
Japan, Ltd.,
N.Y. Branch - BP II
165 Broadway, 49th Floor
New York, NY 10006
Attn: Ms. Maria Araujo
Telephone: (212) 335-4553
Facsimile: (212) 608-2371
THE MITSUBISHI TRUST $20,000,000.00 Credit Matters:
----------------------------------
AND BANKING
CORPORATION The Mitsubishi Trust and Banking
Corporation
520 Madison Avenue
26th Floor
New York, NY 10022
Attn: Clifford A. Teller
Finance Officer
Telephone: (212) 891-8269
Facsimile: (212) 644-6825
THE MITSUBISHI TRUST Operations/Administration:
----------------------------------
AND BANKING
CORPORATION The Mitsubishi Trust and Banking
(continued) Corporation
520 Madison Avenue
26th Floor
New York, NY 10022
Attn: Kathy Han
Senior Supervisor
Telephone: (212) 891-8262
Facsimile: (212) 755-2349
MORGAN GUARANTY TRUST $20,000,000.00 Morgan Guaranty Trust Company Credit Matters:
----------------------------------
COMPANY OF NEW YORK of New York
60 Wall Street Morgan Guaranty Trust Company of
New York, NY 10260-0060 New York
60 Wall Street
New York, NY 10260-0060
Attn: Stephen B. King
Vice President
Telephone: (212) 648-7415
Facsimile: (212) 648-5336
Operations/Administration:
----------------------------------
Morgan Guaranty Trust Company of
New York
c/o J.P. Morgan Services, Inc.
500 Stanton Christiana Road
Newark, DE 19713
Attn: Andrew Lipsett
Telephone: (302) 634-8177
Facsimile: (302) 634-1091
NATIONAL AUSTRALIA $20,000,000.00 National Australia Bank Limited Credit Matters:
----------------------------------
BANK LIMITED 200 Park Avenue
Floor 34 National Australia Bank Limited
New York, NY 10166 200 Park Avenue
Floor 34
New York, NY 10166
Attn: Harvey R. Horowitz
Vice President
Telephone: (212) 916-9602
Facsimile: (212) 983-1969
Operations/Administration:
----------------------------------
National Australia Bank Limited
200 Park Avenue
Floor 34
New York, NY 10166
Attn: Joseph T. Hengerle
Manager, Loan Services
Telephone: (212) 916-9536
Facsimile: (212) 983-1969
NATIONAL WESTMINSTER $20,000,000.00 Domestic/CD Lending Offices: Credit Matters:
--------------------------------- ----------------------------------
BANK PLC, New York
Branch and Nassau National Westminster Bank Plc National Westminster Bank Plc
Branch Chicago Branch 33 North Dearborn, 12th Floor
175 Water Street, 19th Floor Chicago, IL 60602
New York, NY 10038 Attn: Ami Mehta, Associate
Telephone: (312) 621-1525
Facsimile: (312) 621-1564
Operations/Administration:
----------------------------------
National Westminster Bank Plc
175 Water Street, 19th Floor
New York, NY 10038
Attn: Steve Parker
Vice President
Telephone: (212) 602-4249
Facsimile: (212) 602-4118
NATIONSBANK TEXAS, $53,333,333.33 NationsBank Texas, N.A. Credit Matters:
----------------------------------
N.A., as Co-Agent 901 Main Street, 67th Floor
and as a Bank Dallas, TX 75202 NationsBank Texas, N.A.
Attn: Geri Lewis 700 Louisiana Street
Telephone: (214) 508-0592 8th Floor
Facsimile: (214) 508-0944 Houston, TX 77002
Attn: Forest Scott Singhoff
Senior Vice President
Telephone: (713) 247-6961
Facsimile: (713) 247-6719
Operations/Administration:
----------------------------------
NationsBank Texas, N.A.
901 Main Street, 67th Floor
Dallas, TX 75202
Attn: Geri Lewis
Telephone: (214) 508-0592
Facsimile: (214) 508-0944
THE NORTHERN TRUST $20,000,000.00 The Northern Trust Company Credit Matters:
----------------------------------
COMPANY 50 S. LaSalle B.12
Chicago, IL 60675 The Northern Trust Company
Attn: Linda Honda 50 S. LaSalle B.11
Loan Processor Chicago, IL 60675
Telephone: (312) 444-3532 Attn: Marty Alston
Facsimile: (312) 630-1566 Vice President
Telephone: (312) 444-5058
Facsimile: (312) 444-5055
Operations/Administration:
----------------------------------
The Northern Trust Company
50 S. LaSalle B.11
Chicago, IL 60675
Attn: Stephanie Brown
Relationship Assoc.
Telephone: (312) 444-4570
Facsimile: (312) 444-5055
PNC BANK, N.A. $36,571,428.57 PNC Bank, N.A. Credit Matters:
----------------------------------
5th Avenue & Wood St.
Pittsburgh, PA 15222 PNC Bank, N.A.
2525 Lincoln Plaza
Dallas, TX 75201
Attn: Gregory T. Gaschler
Vice President
Telephone: (214) 740-2585
Facsimile: (214) 740-2588
Operations/Administration:
----------------------------------
PNC Bank, N.A.
2525 Lincoln Plaza
Dallas, TX 75201
Attn: Helen Malone
Administrative Assistant
Telephone: (214) 740-2525
Facsimile: (214) 740-2588
ROYAL BANK OF CANADA $36,571,428.57 Royal Bank of Canada Credit Matters:
----------------------------------
One Financial Square
23rd Floor Royal Bank of Canada
New York, NY 10005-3531 600 Wilshire Blvd., Suite 800
Los Angeles, CA 90017
Attn: Michael A. Cole
Robert K. Mimaki
Telephone: (213) 955-5328/5348
Facsimile: (213) 955-5350
Operations/Administration:
----------------------------------
Royal Bank of Canada
One Financial Square
23rd Floor
New York, NY 10005-3531
Attn: Helen John
Reconciliation Clerk
Telephone: (212) 428-6322
Facsimile: (212) 428-2372
THE SANWA BANK $36,571,428.57 The Sanwa Bank Limited, Credit Matters:
----------------------------------
LIMITED, Dallas Agency Dallas Agency
4100 West Texas Commerce Tower The Sanwa Bank Limited,
2200 Ross Avenue Dallas Agency
Dallas, TX 75201 4100 West Texas Commerce Tower
Attn: Greg Crowe 2200 Ross Avenue
Vice President Dallas, TX 75201
Telephone: (214) 744-5555 Attn: Matthew G. Patrick
Facsimile: (214) 741-6535 Vice President
Telephone: (214) 665-0217
Facsimile: (214) 741-6535
Operations/Administration:
----------------------------------
The Sanwa Bank Limited,
Dallas Agency
4100 West Texas Commerce Tower
2200 Ross Avenue
Dallas, TX 75201
Attn: Greg Crowe
Vice President
Telephone: (214) 665-0229
Facsimile: (214) 741-6535
SHAWMUT BANK, N.A. $36,571,428.57 Shawmut Bank, N.A. Shawmut Bank, N.A.
One Federal Street One Federal Street
Mail Stop OF-0323 Mail Stop OF-0323
Boston, MA 02211 Boston, MA 02211
Attn: Judy Whalen Attn: Frank Benesh
Telephone: (617) 292-3907 Director
Facsimile: (617) 292-3241 Telephone: (617) 292-3514
Facsimile: (617) 423-5214
Operations/Administration:
----------------------------------
Shawmut Bank, N.A.
One Federal Street
Mail Stop OF-0305
Boston, MA 02211
Attn: Michael Araujo,
Olive Fagan
Telephone: (617) 292-2170
Facsimile: (617) 292-3241
SOCIETE GENERALE $36,571,428.57 Societe Generale, Credit Matters:
----------------------------------
Southwest Agency Southwest Agency
2001 Ross Avenue, Suite 4800 Societe Generale,
Dallas, TX 75201 1111 Bagby Street
Attn: Angela Aldridge Houston, TX 77002
Vice President Attn: Thierry Namuroy
Telephone: (214) 979-2777 Vice President
Facsimile: (214) 754-0171 Telephone: (713) 650-1777
Facsimile: (713) 650-0824
Operations/Administration:
----------------------------------
Societe Generale
2001 Ross Avenue, Suite 4800
Dallas, TX 75201
Attn: Tequlla English
Loan Specialist
Telephone: (214) 979-2767
Facsimile: (214) 754-0171
THE SUMITOMO BANK, $36,571,428.57 Credit Matters:
----------------------------------
LIMITED, HOUSTON
AGENCY Societe Generale
700 Louisiana - Suite 1750
Houston, TX 77002
Attn: William S. Rogers
Vice President
Telephone: (713) 238-8214
Facsimile: (713) 759-0020
Operations/Administration:
----------------------------------
Societe Generale
700 Louisiana - Suite 1750
Houston, TX 77002
Attn: Robert Quezada
Loan Administrator
Telephone: (713) 238-8221
Facsimile: (713) 759-0020
TORONTO DOMINION $36,571,428.57 Toronto Dominion Bank Toronto Dominion Bank
(TEXAS), INC. Houston Agency 70 West Madison
909 Fannin Street, Suite 1700 Suite 5430
Houston, TX 77010 Chicago, IL 60602
Attn: Dianne Bailey Attn: Mark G. Fields
Vice President Director
Telephone: (713) 653-8250 Telephone: (312) 977-2116
Facsimile: (713) 951-9921 Facsimile: (312) 782-6337
With a copy to:
Toronto Dominion Bank
31 West 52nd Street
20th Floor
New York, NY 10019
Attn: Doug Weir
Telephone: (212) 468-0575
Facsimile: (212) 262-1926
</TABLE>
U.S. $250,000,000
REVOLVING CREDIT AGREEMENT
Dated as of October 31, 1995
among
COMPAQ COMPUTER CORPORATION,
THE BANKS PARTY HERETO
and
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION,
As Administrative Agent
NATIONSBANK OF TEXAS, NATIONAL ASSOCIATION
and
CITIBANK, N.A.,
As Co-Agents
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
1.01 Certain Defined Terms.......................................... 1
1.02 Other Interpretive Provisions.................................. 12
1.03 Accounting Principles.......................................... 13
ARTICLE II
THE CREDITS
2.01 Amounts and Terms of Commitments............................... 13
2.02 Notes.......................................................... 14
2.03 Procedure for Revolving Loan Borrowings........................ 14
2.04 Conversion and Continuation Elections for Revolving Loan
Borrowings. 15
2.05 Procedure for Swingline Borrowings............................. 17
2.06 Increase of Commitments........................................ 18
2.07 Ratable Reduction or Termination of Commitments................ 19
2.08 Non-Ratable Reduction or Termination of Commitments............ 20
2.09 Optional and Mandatory Prepayments............................. 20
2.10 Repayment...................................................... 21
2.11 Interest....................................................... 21
2.12 Fees........................................................... 22
2.13 Computation of Fees and Interest............................... 22
2.14 Interest Rate Determination and Protection..................... 22
2.15 Payments by the Company........................................ 23
2.16 Payments by the Banks to the Agent............................. 24
2.17 Sharing of Payments, Etc....................................... 25
ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY
3.01 Taxes.......................................................... 25
3.02 Breakage Costs................................................. 26
3.03 Increased Costs................................................ 27
3.04 Illegality..................................................... 28
3.05 Reserves on Offshore Loans..................................... 28
3.06 Replacement of Bank; Termination of Bank....................... 28
3.07 Reallocation of Commitments in Event of Merger, Etc............ 30
3.08 Certificates of Banks.......................................... 30
3.09 Survival....................................................... 31
ARTICLE IV
CONDITIONS PRECEDENT
4.01 Conditions of Initial Loans.................................... 31
4.02 Conditions to All Borrowings................................... 32
ARTICLE V
REPRESENTATIONS AND WARRANTIES
5.01 Corporate Existence............................................ 32
5.02 Corporate Power................................................ 32
5.03 Authorization and Approvals.................................... 33
5.04 Enforceable Obligations........................................ 33
5.05 Financial Statements........................................... 33
5.06 Litigation..................................................... 33
5.07 Regulation U; Use of Proceeds.................................. 33
5.08 Investment Company Act......................................... 34
5.09 ERISA.......................................................... 34
5.10 Holding Company................................................ 34
5.11 Environmental Condition........................................ 34
5.12 No Material Adverse Change..................................... 34
ARTICLE VI
AFFIRMATIVE COVENANTS
6.01 Compliance with Laws Etc....................................... 35
6.02 Reporting Requirements......................................... 35
6.03 Use of Proceeds................................................ 36
6.04 Maintenance of Insurance....................................... 36
6.05 Corporate Existence Etc........................................ 36
6.06 Visitation Rights.............................................. 36
ARTICLE VII
NEGATIVE COVENANTS
7.01 Consolidated Tangible Net Worth................................ 36
7.02 Liens.......................................................... 36
ARTICLE VIII
EVENTS OF DEFAULT
8.01 Event of Default............................................... 37
8.02 Remedies....................................................... 38
8.03 Rights Not Exclusive........................................... 38
ARTICLE IX
THE AGENT
9.01 Appointment and Authorization.................................. 38
9.02 Delegation of Duties........................................... 39
9.03 Liability of Agent............................................. 39
9.04 Reliance by Agent.............................................. 39
9.05 Notice of Default.............................................. 40
9.06 Credit Decision................................................ 40
9.07 Indemnification................................................ 40
9.08 Agent in Individual Capacity................................... 41
9.09 Successor Agent................................................ 41
9.10 Withholding Tax................................................ 42
9.11 Co-Agent....................................................... 43
ARTICLE X
MISCELLANEOUS
10.01 Amendments and Waivers......................................... 43
10.02 Notices........................................................ 44
10.03 No Waiver: Cumulative Remedies................................. 44
10.04 Costs and Expenses............................................. 45
10.05 Indemnity...................................................... 45
10.06 Payments Set Aside............................................. 45
10.07 Binding Effect; Assignments; Participations.................... 46
10.08 Set-off........................................................ 47
10.09 Interest....................................................... 47
10.10 Confidentiality................................................ 48
10.11 Preservation of Certain Matters................................ 49
10.12 Notification of Addresses, Lending Offices Etc................. 50
10.13 Counterparts................................................... 50
10.14 Severability................................................... 50
10.15 Governing Law; Jurisdiction.................................... 50
10.16 WAIVER OF JURY TRIAL........................................... 50
10.17 ENTIRE AGREEMENT............................................... 50
SCHEDULES
Schedule 10.02 Notice Addresses, Payment and Lending Offices
EXHIBITS
Exhibit A Form of Notice of Borrowing
Exhibit B Form of Notice of Conversion/Continuation
Exhibit C Form of Compliance Certificate
Exhibit D-1 Form of Opinion of Senior Vice President and General
Counsel of the Company
Exhibit D-2 Form of Opinion of Corporate Counsel of the Company
Exhibit E Form of Note
REVOLVING CREDIT AGREEMENT
dated as of October 31, 1995
COMPAQ COMPUTER CORPORATION, a Delaware corporation (the "Company"), the
several financial institutions from time to time party to this Agreement
(collectively, the "Banks", and individually, a "Bank"), and Bank of America
National Trust and Savings Association, as administrative agent for the Banks,
agree as follows.
ARTICLE I
DEFINITIONS
1.01 Certain Defined Terms. The following terms have the following
meanings:
"Acquiring Entity" has the meaning specified in Section 3.07.
"Adjusted CD Rate" means, for any Interest Period for each Adjusted CD
Rate Revolving Loan comprising part of the same Borrowing or an Adjusted CD
Rate Swingline Loan, as the case may be, an interest rate per annum equal to
the sum of:
(a) the rate per annum obtained by dividing (i) the rate of
interest determined by the Agent to be the average (rounded upward to
the nearest whole multiple of 1/100 of 1% per annum, if such average is
not such a multiple) of the consensus bid rate determined by each of the
Reference Banks, in the case of Adjusted CD Rate Revolving Loans, or the
Swingline Bank, in the case of an Adjusted CD Rate Swingline Loan, for
the bid rates per annum, at 9:00 a.m. (Houston time) (or as soon
thereafter as practicable) on the first day of such Interest Period, of
New York certificate of deposit dealers of recognized standing selected
by such Reference Bank or the Swingline Bank, as applicable, for the
purchase at face value of certificates of deposit of such Reference Bank
or the Swingline Bank, as applicable, in an amount substantially equal
to such Reference Bank's Adjusted CD Rate Revolving Loan comprising part
of such Borrowing, in the case of Adjusted CD Rate Revolving Loans, or
the Adjusted CD Rate Swingline Loan, in the case of an Adjusted CD Rate
Swingline Loan, and with a maturity equal to such Interest Period
(provided that, if bid rate quotes from such dealers are not available
to any Reference Bank or the Swingline Bank, as applicable, such
Reference Bank or the Swingline Bank shall notify the Agent of a
reasonably equivalent rate determined by it on the basis of another
source or sources selected by it), by (ii) a percentage equal to 100%
minus the Adjusted CD Rate Reserve Percentage for such Interest Period
(the "Certificate of Deposit Rate"), plus
(b) the Assessment Rate for such Interest Period.
The Adjusted CD Rate for the Interest Period for each Adjusted CD Rate
Revolving Loan comprising part of the same Borrowing or an Adjusted CD
Rate Swingline Loan, as the case may be, shall be determined by the
Agent on the basis of applicable rates furnished to and received by the
Agent as set forth above on the first day of such Interest Period,
subject however, to the provisions of Section 2.14.
"Adjusted CD Rate Revolving Loan" means a Revolving Loan which bears
interest at the Adjusted CD Rate plus the Applicable Margin.
"Adjusted CD Rate Reserve Percentage" for any Interest Period for each
Adjusted CD Rate Revolving Loan comprising part of the same Borrowing or an
Adjusted CD Rate Swingline Loan, as the case may be, means the reserve
percentage applicable on the first day of such Interest Period under
regulations issued from time to time by the FRB for determining the maximum
reserve requirement (including, but not limited to, any emergency,
supplemental or other marginal reserve requirement) for a member bank of the
Federal Reserve System in New York City with deposits exceeding one billion
dollars with respect to liabilities consisting of or including U.S. dollar
nonpersonal time deposits in the United States with a maturity equal to such
Interest Period.
"Adjusted CD Rate Swingline Loan" means a Swingline Loan which bears
interest at the Adjusted CD Rate plus the Applicable Margin.
"Affiliate" means, as to any Person, any other Person which, directly or
indirectly, is in control of, is controlled by, or is under common control
with, such Person. A Person shall be deemed to control another Person if the
controlling Person possesses, directly or indirectly, the power to direct or
cause the direction of the management and policies of the other Person,
whether through the ownership of voting securities, by contract or otherwise.
"Agent" means BofA in its capacity as administrative agent for the Banks
hereunder, and any successor administrative agent.
"Agent-Related Persons" means BofA and any successor administrative
agent arising under Section 9.09, together with their respective Affiliates
(including, in the case of BofA, the Arranger), and the officers, directors,
employees, agents and attorneys-in-fact of such Persons and Affiliates.
"Agent's Payment Office" means the address for payments set forth on
Schedule 10.02 or such other address as the Agent may from time to time
specify.
"Agreement" means this Revolving Credit Agreement.
"Applicable Fee Amount" means, for any date, 0.080 percent per annum.
"Applicable Margin" means, on any date and with respect to each CD Loan
or Offshore Loan outstanding on such date, 0.20 percent per annum; provided,
that at any time as the aggregate outstanding principal amount of Revolving
Loans, together with the aggregate outstanding principal amount of "Revolving
Loans" under, and as that term is defined in, the 5-Year Credit Agreement,
exceeds 50% of the combined Commitments of all the Banks, together with the
combined "Commitments" of all the lenders under, and as that term is defined
in, the 5-Year Credit Agreement (and any time after the termination of
commitments to lend under clause (a) of Section 8.02 or under paragraph (b) or
(c) of Section 2.09 hereof, or of the 5-Year Credit Agreement, as applicable),
the Applicable Margin in respect of CD Loans and Offshore Loans hereunder
shall be increased by an additional 0.125 percentage points.
"Arranger" means BA Securities, Inc., a Delaware corporation.
"Assessment Rate" for any Interest Period for each Adjusted CD Rate
Revolving Loan comprising part of the same Borrowing or an Adjusted CD Rate
Swingline Loan, as the case may be, means the rate determined by the Agent as
equal to the annual assessment rate in effect on the first day of such
Interest Period payable to the FDIC by a member of the Bank Insurance Fund
that is classified as adequately capitalized and within supervisory subgroup
"A" (or a comparable successor assessment risk classification within the
meaning of 12 C.F.R. Section 327.3) for insuring time deposits at offices of
such member in the United States; or, in the event that the FDIC shall at any
time hereafter cease to assess time deposits based upon such classifications
or successor classifications, equal to the maximum annual assessment rate in
effect on such day that is payable to the FDIC by commercial banks (whether or
not applicable to any particular Bank) for insuring time deposits at offices
of such banks in the United States.
"Attorney Costs" means and includes the reasonable fees and
disbursements of any law firm or other external counsel and the allocated cost
of internal counsel.
"Bank" has the meaning specified in the introductory clause hereto.
References to the "Banks" shall include references to BofA in its capacity as
the Swingline Bank. For purposes of clarification only, to the extent that
BofA may have any rights or obligations in addition to those of the Banks due
to its status as the Swingline Bank, its status as such will be specifically
referenced.
"Bankruptcy Code" means the Federal Bankruptcy Reform Act of 1978 (11
U.S.C. Section 101, et seq.).
"Base Loan" means any Base Rate Revolving Loan or any Base Rate
Swingline Loan.
"Base Rate" means, for any day, the higher of: (a) 1/2% above the latest
Federal Funds Rate, and (b) the rate of interest in effect for such day as
publicly announced from time to time by the Bank which is the Agent at its
principal office, as its "prime" or "reference" rate (or comparable rate, if
such Bank does not so designate a "prime" or "reference" rate). The prime or
reference rate is a rate set by such Bank based upon various factors including
such Bank's costs and desired return, general economic conditions and other
factors, and is used as a reference point for pricing some loans, which may be
priced at, above, or below such announced rate. Any change in the prime or
reference rate announced by such Bank shall take effect at the opening of
business on the day specified in the public announcement of such change.
"Base Rate Revolving Loan" means a Revolving Loan that bears interest
based on the Base Rate.
"Base Rate Swingline Loan" means a Swingline Loan which bears interest
based on the Base Rate.
"BofA" means Bank of America National Trust and Savings Association, a
national banking association.
"Borrowing" means a borrowing hereunder consisting of (a) Revolving
Loans of the same Type made to the Company on the same day by the Banks, or
(b) a Swingline Loan made to the Company by the Swingline Bank, in each case
pursuant to Article II.
"Borrowing Date" means any date on which a Borrowing occurs under
Section 2.03 or 2.05.
"Business Day" means (i) any day of the year except Saturday, Sunday and
any day on which banks are required or authorized to close in New York City or
San Francisco and (ii) if the applicable Business Day relates to any Offshore
Loan, any day which is a "Business Day" described in clause (i) and which is
also a day for trading by and between banks in the London interbank Eurodollar
market.
"Certificate of Deposit Rate" has the meaning specified in the
definition of "Adjusted CD Rate."
"CD Lending Office" means, with respect to any Bank, the office of such
Bank specified as its "CD Lending Office" opposite its name on Schedule 10.02
or in the document pursuant to which it became a party hereto as contemplated
by Section 2.06, 3.06(a), 3.07 or 10.07(c) (or, if no such office is
specified, its Domestic Lending Office) or such other office of such Bank as
such Bank may from time to time specify to the Company and the Agent.
"CD Loan" means any Adjusted CD Rate Revolving Loan or any Adjusted CD
Rate Swingline Loan.
"Change in Control" means the direct or indirect acquisition by any
person (as such term is used in Section 13(d) and Section 14(d)(2) of the
Exchange Act), or related persons constituting a group (as such term is used
in Rule 13d-5 under the Exchange Act), of (a) beneficial ownership of issued
and outstanding shares of voting stock of a corporation or other entity, the
result of which acquisition is that such person or such group possesses in
excess of 50% of the combined voting power of all then-issued and outstanding
voting stock of such corporation or other entity, or (b) the power to elect,
appoint, or cause the election or appointment of at least a majority of the
members of the board of directors of such corporation or other entity.
"Closing Date" means the date on which all conditions precedent set
forth in Section 4.01 are satisfied or waived by all Banks.
"Code" means the Internal Revenue Code of 1986, and regulations
promulgated thereunder.
"Commitment", as to each Bank, has the meaning specified in Section
2.01(a).
"Commitment Percentage" means, as to any Bank at any time, the
percentage equivalent (expressed as a decimal, rounded to the ninth decimal
place) at such time of such Bank's Commitment divided by the combined
Commitments of all Banks.
"Company" means Compaq Computer Corporation, a Delaware corporation and
successors thereto.
"Compliance Certificate" means a certificate substantially in the form
of Exhibit C.
"Consolidated Net Worth" means at any date the consolidated
stockholders' equity of the Company and its consolidated Subsidiaries
(excluding any Redeemable Preferred Stock of the Company).
"Consolidated Tangible Net Worth" means at any date Consolidated Net
Worth less the amount, if any, in excess of $25,000,000 of consolidated
"intangible assets" (as defined below) included in determining Consolidated
Net Worth. For the purposes of this definition, "intangible assets" means the
sum of (i) all write-ups (other than write-ups resulting from foreign currency
translations and write-ups of assets of a going concern business made within
twelve months after the acquisition of such business) subsequent to December
31, 1994 in the book value of any asset owned by the Company or a Subsidiary
of the Company and (ii) all unamortized goodwill, patents, trademarks, service
marks, trade names, copyrights, organization or developmental expenses and
other intangible items.
"Conversion/Continuation Date" means any date on which, under Section
2.04, the Company (a) converts Revolving Loans of one Type to another Type, or
(b) continues as Revolving Loans of the same Type, but with a new Interest
Period, Revolving Loans having Interest Periods expiring on such date.
"Debt" of any Person means, at any date, without duplication, (i)
obligations for the repayment of money borrowed which are or should be shown
on a balance sheet as debt in accordance with GAAP, (ii) obligations as lessee
under leases which, in accordance with GAAP, are capital leases, (iii)
non-contingent reimbursement and payment obligations with respect to letters
of credit, bank guaranties or banker's acceptances, and (iv) guaranties of
payment or collection of any obligations described in clauses (i), (ii) and
(iii) of other Persons; provided, that clauses (i), (ii) and (iii) include, in
the case of obligations of the Company or any Subsidiary, only such
obligations as are or should be shown as debt or capital lease liabilities on
a consolidated balance sheet in accordance with GAAP; and provided, further,
that the liability of any Person as a general partner of a partnership for
Debt of such partnership, if the partnership is not a Subsidiary of such
Person, shall not constitute "Debt."
"Default" means any event or circumstance which, with the giving of
notice, the lapse of time, or both, would (if not cured or otherwise remedied
during such time) constitute an Event of Default.
"Dollars", "dollars" and "$" each mean lawful money of the United States.
"Domestic Lending Office" means, with respect to any Bank, the office of
such Bank specified as its "Domestic Lending Office" opposite its name on
Schedule 10.02 hereto or in the document pursuant to which it became a party
hereto as contemplated by Section 2.06, 3.06(a), 3.07 or 10.07(c) or such
other office of such Bank as such Bank may from time to time specify to the
Company and the Agent.
"Eligible Assignee" means (i) a commercial bank organized under the laws
of the United States, or any state thereof, and having a combined capital and
surplus of at least $200,000,000; (ii) a commercial bank organized under the
laws of any other country which is a member of the Organization for Economic
Cooperation and Development or a political subdivision of any such country,
and having a combined capital and surplus of at least $200,000,000, provided
that such bank is acting through a branch or agency located in the United
States; and (iii) a Person that is primarily engaged in the business of
commercial banking and that is (A) a Subsidiary of a Bank, (B) a Subsidiary of
a Person of which a Bank is a Subsidiary, or (C) a Person of which a Bank is a
Subsidiary.
"Environment" or "Environmental" has the meanings set forth in the
Comprehensive Environmental Response, Compensation and Liability Act at 42
U.S.C. Section 9601(8) (1982).
"Environmental Protection Statute" means any United States local, state
or federal, or any foreign, law, statute, regulation, order, consent decree or
other agreement or Requirement of Law pertaining to the protection or
regulation of the Environment, including, without limitation, those laws,
statutes, regulations, orders, decrees, agreements and other Requirements of
Law relating to the disposal, cleanup, production, storing, refining,
handling, transferring, processing or transporting of Hazardous Waste,
Hazardous Substances or any pollutant or contaminant, wherever located.
"ERISA" means the Employee Retirement Income Security Act of 1974, and
regulations promulgated thereunder.
"Eurocurrency Liabilities" has the meaning assigned to that term in
Regulation D of the FRB.
"Event of Default" means any of the events or circumstances specified in
Section 8.01.
"Exchange Act" means the Securities Exchange Act of 1934, and
regulations promulgated thereunder.
"FDIC" means the Federal Deposit Insurance Corporation, and any
Governmental Authority succeeding to any of its principal functions.
"Federal Funds Rate" means, for any day, the rate set forth in the
weekly statistical release designated as H.15(519), published by the FRB on
the preceding Business Day opposite the caption "Federal Funds (Effective)";
or, if any relevant day such rate is not so published on any such preceding
Business Day, the rate for such day will be the arithmetic mean as determined
by the Agent of the rates for the last transaction in overnight Federal funds
arranged prior to 9:00 a.m. (New York City time) on that day by each of three
leading brokers of Federal funds transactions in New York City selected by the
Agent.
"5-Year Credit Agreement" means that U.S. $1,000,000,000 Revolving Credit
Agreement dated as of this date among the Company, BofA as Administrative
Agent and the lenders party thereto, under which such lenders have agreed to
extend credit to the Company on a five-year basis.
"FRB" means the Board of Governors of the Federal Reserve System, and any
Governmental Authority succeeding to any of its principal functions.
"GAAP" means generally accepted accounting principles set forth from
time to time in the opinions and pronouncements of the Accounting Principles
Board and the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards Board (or
agencies with similar functions of comparable stature and authority within the
U.S. accounting profession), which are applicable to the circumstances as of
the date of determination.
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof, any central bank (or similar monetary or
regulatory authority) thereof, any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to
government, and any corporation or other entity owned or controlled, through
stock or capital ownership or otherwise, by any of the foregoing.
"Hazardous Substance" has the meaning set forth in the Comprehensive
Environmental Response, Compensation and Liability Act at 42 U.S.C. Section
9601(14) and also includes each other substance considered to be a hazardous
substance under any analogous statute or regulation.
"Hazardous Waste" has the meaning set forth in the Resource Conservation
and Recovery Act at 42 U.S.C. Section 6903(5) and also includes each other
substance considered to be a hazardous waste under any analogous statute or
regulation (including 40 C.F.R. Section 261.3).
"Highest Lawful Rate" means, with respect to each Bank, the maximum
nonusurious interest rate, if any, that at any time or from time to time may
be contracted for, taken, reserved, charged or received on the Loans or on
other indebtedness outstanding under this Agreement or the Notes applicable to
such Bank which is presently in effect or, to the extent allowed by law, under
such applicable laws which may hereafter be in effect and which allow a higher
maximum nonusurious interest rate than applicable laws now allow.
"Information" has the meaning specified in Section 10.10.
"Insolvency Proceeding" means (a) any case, action or proceeding before
any court or other Governmental Authority relating to bankruptcy,
reorganization, insolvency, liquidation, receivership, dissolution, winding-up
or relief of debtors, or (b) any general assignment for the benefit of
creditors, composition, marshalling of assets for creditors, or other, similar
arrangement in respect of its creditors generally or any substantial portion
of its creditors; undertaken under Federal, state or foreign law, including
the Bankruptcy Code.
"Interest Payment Date" means (a) as to any Revolving Loan other than a
Base Rate Revolving Loan, the last day of each Interest Period applicable to
such Loan, provided, however, that if any Interest Period for (i) an Adjusted
CD Rate Revolving Loan exceeds 90 days, the date that falls 90 days after the
beginning of such Interest Period is also an Interest Payment Date, or (ii) a
LIBOR Revolving Loan exceeds three months, the date that falls three months
after the beginning of such Interest Period is also an Interest Payment Date,
(b) as to any Base Rate Revolving Loan, the last Business Day of each calendar
quarter and each date such Loan is converted into another Type of Revolving
Loan, and (c) as to any Swingline Loan, the last day of the Interest Period
applicable to such Loan.
"Interest Period" means (a) as to any Adjusted CD Rate Revolving Loan,
the period commencing on the Borrowing Date or on the Conversion/Continuation
Date on which a Revolving Loan is converted into or continued as an Adjusted
CD Rate Revolving Loan, and ending on the date 30, 60, 90 or 180 days
thereafter, as selected by the Company in its Notice of Borrowing or Notice of
Conversion/Continuation, as the case may be, (b) as to any LIBOR Revolving
Loan, the period commencing on the Borrowing Date or on the
Conversion/Continuation Date on which a Revolving Loan is converted into or
continued as a LIBOR Revolving Loan, and ending on the day which numerically
corresponds to such date one, two, three or six months thereafter (or if such
month has no numerically corresponding day, on the last Business Day of such
month), as selected by the Company in its Notice of Borrowing or Notice of
Conversion/Continuation, as the case may be, and (c) as to any Swingline Loan,
the period commencing on the Borrowing Date of such Loan and ending on such
date, not more than 10 days later, as agreed upon by the Company and the
Swingline Bank at the time of the Borrowing of such Loan; provided that:
(i) if any Interest Period pertaining to a CD Loan would
otherwise end on a day that is not a Business Day, that Interest Period
shall be extended to the following Business Day;
(ii) if any Interest Period pertaining to an Offshore Loan
would otherwise end on a day that is not a Business Day, that Interest
Period shall be extended to the following Business Day unless the result
of such extension would be to carry such Interest Period into another
calendar month, in which event such Interest Period shall end on the
preceding Business Day; and
(iii) no Interest Period for any Loan shall extend beyond
October 30, 1996.
"IRS" means the United States Internal Revenue Service.
"Lending Office" means, as to any Bank, the office or offices of the
Bank specified as its "CD Lending Office" or "Domestic Lending Office" or
"LIBOR Lending Office", as the case may be, on Schedule 10.02, or such other
office or offices as the Bank may from time to time notify the Company and the
Agent.
"LIBO Rate" means, for any Interest Period for each LIBOR Revolving Loan
comprising part of the same Borrowing or a LIBOR Swingline Loan, as the case
may be, an interest rate per annum equal to the average (rounded upward to the
nearest whole multiple of 1/16 of 1% per annum, if such average is not such a
multiple) of the rate per annum at which dollar deposits in immediately
available funds are offered by each of the Reference Banks, in the case of
LIBOR Revolving Loans, or the Swingline Bank, in the case of a LIBOR Swingline
Loan, to leading banks in the London interbank Eurodollar market at 11:00 a.m.
(London time) two Business Days before the first day of such Interest Period
in an amount substantially equal to the amount of the LIBOR Revolving Loan of
such Reference Bank comprising part of such Borrowing, in the case of LIBOR
Revolving Loans, or the LIBOR Swingline Loan, in the case of a LIBOR Swingline
Loan, to be outstanding during such Interest Period and for a period equal to
such Interest Period. The LIBO Rate for each Interest Period for each LIBOR
Revolving Loan comprising part of the same Borrowing or a LIBOR Swingline
Loan, as the case may be, shall be determined by the Agent on the basis of
applicable rates furnished to and received by the Agent as set forth above two
Business Days before the first day of such Interest Period, subject, however,
to the provisions of Section 2.14.
"LIBOR Lending Office" means, with respect to any Bank, the office of
such Bank specified as its "LIBOR Lending Office" opposite its name on
Schedule 10.02 or in the document pursuant to which it became a party hereto
as contemplated by Section 2.06, 3.06(a), 3.07 or 10.07(c) (or, if no such
office is specified, its Domestic Lending Office) or such other office of such
Bank as such Bank may from time to time specify to the Company and the Agent.
"LIBOR Revolving Loan" means a Revolving Loan which bears interest at
the LIBO Rate plus the Applicable Margin.
"LIBOR Swingline Loan" means a Swingline Loan which bears interest at
the LIBO Rate plus the Applicable Margin.
"Loan" means an extension of credit, in the form of (a) a Revolving Loan
by a Bank to the Company, which may be a Base Rate Revolving Loan, Adjusted CD
Rate Revolving Loan or LIBOR Revolving Loan (each, a "Type" of Revolving
Loan), or (b) a Swingline Loan by the Swingline Bank to the Company, which may
be a Base Rate Swingline Loan, Adjusted CD Rate Swingline Loan or LIBOR
Swingline Loan (each, a "Type" of Swingline Loan); in each case pursuant to
Article II.
"Loan Documents" means this Agreement, the Notes and all other documents
delivered to the Agent or any Bank in connection herewith.
"Majority Banks" means at any time Banks holding at least 60% of the
combined Commitments of all the Banks, or, if at such time there are no
Commitments hereunder, Banks holding at least 60% of the then aggregate unpaid
principal amount of the Loans, including the Swingline Loans.
"Margin Stock" means "margin stock" as such term is defined in
Regulation G, U or X of the FRB.
"Minimum Tranche" means: (a) in respect of Revolving Loans comprising
part of the same Borrowing, or to be converted or continued under Section
2.04, (i) in the case of Base Rate Revolving Loans, $5,000,000 or any multiple
of $1,000,000 in excess thereof; and (ii) in the case of Adjusted CD Rate
Revolving Loans and LIBOR Revolving Loans, $10,000,000 or any multiple of
$1,000,000 in excess thereof; and (b) in respect of any Swingline Loan,
$1,000,000 or any multiple of $500,000 in excess thereof, unless otherwise
agreed by the Swingline Bank.
"Moody's" means Moody's Investors Service, Inc. and any successor
thereto that is a nationally recognized rating agency.
"New Affiliate Bank" has the meaning specified in Section 3.06.
"No Loan Date" means any Business Day on which (a) no principal amount
of any Revolving Loan is outstanding, and (b) no Notice of Borrowing with
respect to Revolving Loans is pending or deemed pending pursuant to Article II.
"Note" has the meaning specified in Section 2.02.
"Notice of Borrowing" means a notice in substantially the form of
Exhibit A.
"Notice of Conversion/Continuation" means a notice in substantially the
form of Exhibit B.
"Obligations" means all advances, debts, liabilities, obligations,
covenants and duties arising under any Loan Document, owing by the Company to
any Bank, including the Swingline Bank, the Agent, or any Person required to
be indemnified, whether direct or indirect (including those acquired by
assignment), absolute or contingent, due or to become due, now existing or
hereafter arising.
"Offshore Loan" means any LIBOR Revolving Loan or any LIBOR Swingline
Loan.
"Other Taxes" means any present or future stamp or documentary taxes or
any other excise or property taxes, charges or similar levies which arise from
any payment made hereunder or from the execution, delivery or registration of,
or otherwise with respect to, this Agreement or any other Loan Document.
"Person" means an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust, unincorporated
association, joint venture or Governmental Authority.
"Preferred Stock" means, as applied to any corporation, shares of such
corporation which shall be entitled to preference or priority over any other
shares of such corporation in respect of either the payment of dividends or
the distribution of assets upon liquidation.
"Prescribed Forms" shall mean such duly executed and filed form(s) or
statement(s), and in such number of copies, which may, from time to time, be
prescribed by law and which, pursuant to applicable provisions of (a) an
income tax treaty between the United States and the country of residence of
the Bank providing the form(s) or statement(s), (b) the Code, or (c) any
applicable rule or regulation under the Code, permit the Company and the Agent
to make payments hereunder for the account of such Bank free of deduction or
withholding of United States income or other similar taxes.
"Redeemable" means, as applied to any Preferred Stock, any Preferred
Stock which (i) the issuer undertakes to redeem at a fixed or determinable
date or dates (other than pursuant to the exercise of an option to redeem by
the issuer, if the failure to exercise such option would not materially
adversely affect the business, consolidated financial position or consolidated
results of operations of the issuer and its subsidiaries taken as a whole),
whether by operation of a sinking fund or otherwise, or upon the occurrence of
a condition not solely within the control of the issuer, or (ii) is redeemable
at the option of the holder.
"Reference Banks" means BofA, NationsBank of Texas, N.A. and Citibank,
N.A.
"Replacement Bank" has the meaning specified in Section 3.06(a).
"Required Banks" means at any time Banks holding at least 50% of the
combined Commitments of all the Banks, or, if at such time there are no
Commitments hereunder, Banks holding at least 50% of the then aggregate unpaid
principal amount of the Loans, including the Swingline Loans.
"Requirement of Law" means, as to any Person, any law (statutory or
common), treaty, rule or regulation or determination of an arbitrator or of a
Governmental Authority, in each case applicable to or binding upon the Person
or any of its property or to which the Person or any of its property is
subject.
"Responsible Officer" means the chief executive officer, the president,
the chief financial officer or the treasurer of the Company.
"Restricted Subsidiary" means any Subsidiary of the Company which has
non-intercompany assets with an aggregate book value exceeding 10% of the
Consolidated Tangible Net Worth of the Company based upon, at the time of
determination, the most recent year-end audited consolidated financial
statements of the Company.
"Resulting Increased Commitment" has the meaning specified in Section
3.07.
"Revolving Loan" has the meaning specified in Section 2.01(a).
"Revolving Termination Date" means the earlier to occur of:
(a) October 30, 1996; and
(b) the date on which the commitments of the Banks to make Loans
terminate in whole in accordance with Section 2.07, Section 2.09(b) or
2.09(c) or Section 8.02.
"S&P" means Standard & Poor's Rating Group and any successor thereto
that is a nationally recognized rating agency.
"SEC" means the Securities and Exchange Commission, or any Governmental
Authority succeeding to any of its principal functions.
"Senior Debt Indenture" means that certain indenture dated as of March
1, 1994 between the Company and NationsBank of Texas, N.A., as Trustee,
without giving effect to any amendment, modification, termination or
cancellation thereof.
"Specified Transaction," in respect of the Company, means any
transaction or related set of transactions, that results, directly or
indirectly, in (i) any sale, lease or exchange of all or substantially all of
its property, (ii) the consolidation of the Company with any other Person, or
(iii) a merger of the Company with or into any other Person, if in connection
with such sale, lease, exchange, consolidation or merger any consent, approval
or authorization of the shareholders of the Company is required under any of
the Company's organizational documents, or any rule, regulation or Requirement
of Law.
"Subsidiary" of a Person means any corporation, association,
partnership, limited liability company, business trust, joint stock company,
joint venture or other business entity of which more than 50% of the voting
stock or other equity interests (in the case of Persons other than
corporations), is owned or controlled directly or indirectly by the Person, or
one or more of the Subsidiaries of the Person, or a combination thereof.
Unless the context otherwise clearly requires, references herein to a
"Subsidiary" refer to a Subsidiary of the Company.
"Surviving Bank" has the meaning specified in Section 3.07.
"Swingline Bank" means BofA.
"Swingline Commitment", as to the Swingline Bank, has the meaning
specified in Section 2.01(b).
"Swingline Loan" has the meaning specified in Section 2.01(b).
"Taxes" means any and all present or future taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect thereto,
excluding, in the case of each Bank and the Agent, taxes imposed on its net
income, and franchise taxes imposed on its net income, by the jurisdiction (or
any political subdivision thereof) under the laws of which such Bank or the
Agent, as the case may be, is organized or maintains a lending office.
"Type" has the meaning specified in the definition of "Loan."
"United States" and "U.S." each mean the United States of America.
1.02 Other Interpretive Provisions. (a) The meanings of defined terms
are equally applicable to the singular and plural forms of the defined terms.
(b) The words "hereof", "herein", "hereunder" and similar words
refer to this Agreement as a whole and not to any particular provision of this
Agreement. Subsection, Section, Schedule and Exhibit references are to this
Agreement unless otherwise specified. The term "documents" includes any and
all instruments, documents, agreements, certificates, indentures, notices and
other writings, however evidenced. The term "including" is not limiting and
means "including without limitation."
(c) In the computation of periods of time from a specified date
to a later specified date, the word "from" means "from and including"; the
words "to" and "until" each mean "to but excluding", and the word "through"
means "to and including."
(d) Unless otherwise expressly provided herein, (i) references
to agreements (including this Agreement) and other contractual instruments
shall be deemed to include all subsequent amendments and other modifications
thereto, but only to the extent such amendments and other modifications are
not prohibited by the terms of any Loan Document, (ii) references to any
statute or regulation are to be construed as including all statutory and
regulatory provisions consolidating, amending, replacing, supplementing or
interpreting the statute or regulation and (iii) references to IRS forms, SEC
forms, FRB statistical releases or other forms, reports or documents of any
Governmental Authority are to be construed as including all forms, reports or
other documents that consolidate, amend or replace the forms, reports or
documents.
(e) The captions and headings of this Agreement are for
convenience of reference only and shall not affect the interpretation of this
Agreement.
1.03 Accounting Principles. (a) Unless the context otherwise clearly
requires, all accounting terms not expressly defined herein shall be
construed, and all financial computations required under this Agreement shall
be made, in accordance with GAAP, consistently applied.
(b) References herein to "fiscal year" and "fiscal quarter"
refer to such fiscal periods of the Company.
ARTICLE II
THE CREDITS
2.01 Amounts and Terms of Commitments. (a) Each Bank severally agrees,
on the terms and conditions set forth herein, to make loans (each such loan a
"Revolving Loan") to the Company from time to time on any Business Day during
the period from the Closing Date to the Revolving Termination Date, in an
aggregate principal amount not to exceed at any time outstanding, together
with such Bank's Commitment Percentage of all Swingline Loans then
outstanding, the amount set forth opposite the Bank's name on the signature
pages hereto (as such signature pages are deemed modified pursuant to this
Article II or Article III or Section 10.07) (as such amount may be reduced or
increased pursuant to Sections 2.06, 2.07, 2.08, 2.09, 3.06, 3.07 or 8.02,
such Bank's "Commitment"); provided, however, that, after giving effect to any
Borrowing of Revolving Loans, the aggregate principal amount of all
outstanding Revolving Loans and Swingline Loans shall not at any time exceed
the combined Commitments of all the Banks. Within the limits of each Bank's
Commitment, and subject to the other terms and conditions hereof, the Company
may borrow under this Section 2.01(a), prepay under Section 2.09(a) and
reborrow under this Section 2.01(a).
(b) The Swingline Bank agrees, on the terms and conditions set
forth herein, to make a portion of the combined Commitments of all the Banks
available to the Company by making swingline loans (each such loan a
"Swingline Loan") to the Company from time to time on any Business Day during
the period from the Closing Date to the Revolving Termination Date, in an
aggregate principal amount not to exceed at any time outstanding $50,000,000
(as such amount may be reduced pursuant to Sections 2.07, 2.08, 2.09, 3.06 or
8.02, the Swingline Bank's "Swingline Commitment"), notwithstanding the fact
that such Swingline Loans, when aggregated with the Swingline Bank's
outstanding Revolving Loans, may exceed the Swingline Bank's Commitment;
provided, however, that, after giving effect to any Borrowing of a Swingline
Loan, the aggregate principal amount of all outstanding Revolving Loans and
Swingline Loans shall not at any time exceed the combined Commitments of all
the Banks. Within the foregoing limits, and subject to the other terms and
conditions hereof, the Company may borrow under this Section 2.01(b), prepay
under Section 2.09(a) and reborrow pursuant to this Section 2.01(b).
2.02 Notes. The Loans made by each Bank are evidenced by a note in
substantially the form of Exhibit E ("Note") payable to the order of that
Bank, evidencing the aggregate indebtedness of the Company to such Bank
resulting from the Loans owed to such Bank. Each Bank may endorse on the
schedules annexed to its Notes, the date, amount and maturity of each Loan
made by it and the amount of each payment of principal made by the Company with
respect thereto. Each Bank is irrevocably authorized by the Company to
endorse its Notes, and each Bank's record shall be prima facie evidence of the
matters reflected therein; provided, however, that the failure of a Bank to
make, or an error in making, a notation thereon with respect to any Loan shall
not limit or otherwise affect the obligations of the Company hereunder or
under any such Note to such Bank.
2.03 Procedure for Revolving Loan Borrowings. (a) Each Borrowing of
Revolving Loans shall be made upon the Company's irrevocable written notice
delivered to the Agent as described in Section 10.02 in the form of a Notice
of Borrowing prior to 11:00 a.m. (Houston time) (i) one Business Day prior to
the requested Borrowing Date, in the case of Adjusted CD Rate Revolving Loans,
(ii) three Business Days prior to the requested Borrowing Date, in the case of
LIBOR Revolving Loans, and (iii) on the requested Borrowing Date, in the case
of Base Rate Revolving Loans, specifying:
(A) the amount of the Borrowing, which shall be in an
aggregate amount not less than the Minimum Tranche;
(B) the requested Borrowing Date, which shall be a
Business Day;
(C) the Type of Revolving Loans comprising the
Borrowing;
(D) in the case of Adjusted CD Rate Revolving Loans
and LIBOR Revolving Loans, the duration of the Interest Period
applicable to such Loans included in such notice. If the Notice
of Borrowing fails to specify the duration of the Interest Period
for any Borrowing comprised of Adjusted CD Rate Revolving Loans or
LIBOR Revolving Loans, such Interest Period shall be 90 days (in
the case of an Adjusted CD Rate Revolving Loan) and three months
(in the case of a LIBOR Revolving Loan);
provided, however, that with respect to a Borrowing, if any, to be made on the
Closing Date, the Notice of Borrowing shall be delivered to the Agent not
later than 11:00 a.m. (Houston time) on the Closing Date and such Borrowing
will consist of Base Rate Revolving Loans only.
(b) Upon receipt of the Notice of Borrowing, the Agent will
promptly notify each Bank thereof and of the amount of such Bank's Commitment
Percentage of such Borrowing.
(c) Each Bank will make the amount of its Commitment Percentage
of such Borrowing available to the Agent for the account of the Company at the
Agent's Payment Office on the Borrowing Date requested by the Company in
immediately available funds by 11:00 a.m. (Houston time) in the case of a
Borrowing comprised of Adjusted CD Rate Revolving Loans or LIBOR Revolving
Loans, and by 1:00 p.m. (Houston time) in the case of a Borrowing comprised of
Base Rate Revolving Loans. The proceeds of all such Loans will then be made
available to the Company by the Agent by wire transfer of immediately
available funds in accordance with written instructions provided to the Agent
by the Company, unless on the date of the Borrowing all or any portion of the
proceeds thereof shall then be required to be applied to the repayment of any
outstanding Swingline Loans pursuant to Section 2.05(f), in which case such
proceeds or portion thereof shall be applied to the repayment of such
Swingline Loans.
(d) After giving effect to any Borrowing of Revolving Loans,
there may not be more than (i) four different Interest Periods in effect in
respect of all Adjusted CD Rate Revolving Loans together then outstanding and
(ii) four different Interest Periods in effect in respect of all LIBOR
Revolving Loans together then outstanding.
2.04 Conversion and Continuation Elections for Revolving Loan
Borrowings. (a) The Company may, upon irrevocable written notice to the Agent
under subsection (b) of this Section:
(i) elect, on any Business Day, in the case of Base Rate
Revolving Loans, or on the last day of the applicable Interest Period,
in the case of Adjusted CD Rate Revolving Loans or LIBOR Revolving
Loans, to convert any such Loans (or any part thereof in an amount not
less than the Minimum Tranche) into Revolving Loans of another Type; or
(ii) elect to renew on the last day of the applicable
Interest Period any Revolving Loans having Interest Periods maturing on
such day (or any part thereof in an amount not less than the Minimum
Tranche);
provided, that if at any time the aggregate amount of Adjusted CD Rate
Revolving Loans or LIBOR Loans in respect of any Borrowing is reduced, by
payment, prepayment, or conversion of part thereof to be less than the Minimum
Tranche, such Loans shall automatically convert into Base Rate Revolving
Loans, and on and after such date the right of the Company to continue such
Loans as, and convert such Loans into, Adjusted CD Rate Revolving Loans or
LIBOR Revolving Loans shall terminate, except that if and so long as each such
Revolving Loan shall be of the same Type and have the same Interest Period as
Revolving Loans comprising another Borrowing or other Borrowings, and the
aggregate unpaid principal amount of all such Loans of all such Borrowings
shall equal or exceed $10,000,000, the Company shall have the right to
continue all such Loans as, or to convert all such Loans into, Revolving Loans
of such Type having such Interest Period.
(b) The Company shall deliver a Notice of Conversion/Continuation
to be received by the Agent not later than 11:00 a.m. (Houston time) at least
(i) one Business Day in advance of the Conversion/Continuation Date, if the
Revolving Loans are to be converted into or continued as Adjusted CD Rate
Revolving Loans; (ii) three Business Days in advance of the
Conversion/Continuation Date, if the Revolving Loans are to be converted into
or continued as LIBOR Revolving Loans; and (iii) on the
Conversion/Continuation Date, if the Revolving Loans are to be converted into
Base Rate Revolving Loans, specifying:
(A) the proposed Conversion/Continuation Date;
(B) the aggregate amount of Revolving Loans to be
converted or renewed;
(C) the Type of Revolving Loans resulting from the
proposed conversion or continuation; and
(D) other than in the case of conversions into Base
Rate Revolving Loans, the duration of the requested Interest
Period.
(c) If upon the expiration of any Interest Period applicable to
any Adjusted CD Rate Revolving Loans or LIBOR Revolving Loans, the Company has
failed to select timely a new Interest Period to be applicable to such Loans,
the Company shall be deemed to have elected to convert such Loans into Base
Rate Revolving Loans.
(d) The Agent will promptly notify each Bank of its receipt of a
Notice of Conversion/Continuation, or, if no timely notice is provided by the
Company under this Section, the Agent will promptly notify each Bank of the
details of any automatic conversion. All conversions and continuations shall
be made ratably according to the respective outstanding principal amounts of
the Revolving Loans held by each Bank with respect to which the notice was
given.
(e) Unless the Majority Banks otherwise agree, during the
existence of a Default or Event of Default, the Company may not elect to have
a Revolving Loan converted into or continued as an Adjusted CD Rate Revolving
Loan or a LIBOR Revolving Loan with an Interest Period exceeding one month (in
the case of a LIBOR Revolving Loan) or 30 days (in the case of an Adjusted CD
Rate Revolving Loan).
(f) After giving effect to any conversion or continuation of
Revolving Loans, there may not be more than (i) four different Interest
Periods in effect in respect of all Adjusted CD Rate Revolving Loans together
then outstanding and (ii) four different Interest Periods in effect in respect
of all LIBOR Revolving Loans together then outstanding.
2.05 Procedure for Swingline Borrowings. (a) Each Borrowing of a
Swingline Loan shall be made upon the Company's irrevocable written notice to
the Agent as described in Section 10.02 in the form of a Notice of Borrowing
prior to 11:00 a.m. (Houston time) (i) one Business Day prior to the requested
Borrowing Date, in the case of an Adjusted CD Rate Swingline Loan, (ii) three
Business Days prior to the requested Borrowing Date, in the case of a LIBOR
Swingline Loan, and (iii) on the requested Borrowing Date, in the case of a
Base Rate Swingline Loan, specifying: (i) the amount of such Loan, which
shall be an amount not less than the Minimum Tranche; (ii) the requested
Borrowing Date, which shall be a Business Day, (iii) the duration of the
Interest Period applicable to such Loan, which shall not be more than 10 days,
and (iv) if the product of the amount of such Loan and the number of days in
the applicable Interest Period equals or exceeds $15,000,000, the Type of
Swingline Loan. Upon receipt of the Notice of Borrowing, the Agent will
promptly provide the Swingline Bank with a copy thereof.
(b) If the product of the amount of a requested Swingline Loan
and the number of days in the applicable Interest Period equals or exceeds
$15,000,000, such Loan shall bear interest at the LIBO Rate plus the
Applicable Margin, the Adjusted CD Rate plus the Applicable Margin or the Base
Rate, as selected by the Company pursuant to Section 2.05(a). If the product
of the amount of a requested Swingline Loan and the number of days in the
applicable Interest Period is less than $15,000,000, such Loan shall bear
interest at the Base Rate.
(c) Unless the Swingline Bank has received notice prior to 11:00
a.m. (Houston time) on the relevant Borrowing Date from the Agent (including
at the request of any Bank) (i) directing the Swingline Bank not to make the
requested Swingline Loan as a result of the limitation set forth in the
proviso set forth in Section 2.01(b), or (ii) that one or more conditions
specified in Article IV are not then satisfied; then, subject to the terms and
conditions hereof, the Swingline Bank will, not later than 2:00 p.m. (Houston
time) on the Borrowing Date specified in such Notice of Borrowing, make the
amount of the requested Swingline Loan available to the Company by wire
transfer of immediately available funds in accordance with written
instructions provided to the Agent by the Company.
(d) After giving effect to any Borrowing of a Swingline Loan,
there may not be more than three different Swingline Loans outstanding at any
one time.
(e) The Agent will notify the Banks of any Swingline Loan
Borrowing or repayment thereof promptly after any such Borrowing or repayment.
(f) If (i) any Swingline Loan shall remain outstanding at 11:00
a.m. (Houston time) on the last day of the Interest Period applicable to such
Loan and by such time on such day the Agent shall have received neither (A) a
Notice of Borrowing delivered pursuant to Section 2.03 requesting that
Revolving Loans be made pursuant to Section 2.01(a) on such day in an amount
at least equal to the principal amount of such Swingline Loan, nor (B) any
other notice indicating the Company's intent to repay such Swingline Loan with
funds obtained from other sources, or (ii) any Swingline Loans shall remain
outstanding during the existence of a Default or Event of Default and the
Swingline Bank shall in its sole discretion notify the Agent that the
Swingline Bank desires that such Swingline Loans be converted into Revolving
Loans; then, the Agent shall be deemed to have received a Notice of Borrowing
from the Company pursuant to Section 2.03 requesting that Base Rate Revolving
Loans be made pursuant to Section 2.01(a) on such day (in the case of the
circumstances described in clause (i) above) or on the first Business Day
subsequent to the date of such notice from the Swingline Bank (in the case of
the circumstances described in clause (ii) above) in an amount equal to the
aggregate amount of such Swingline Loans, and the procedures set forth in
Sections 2.03(b) and 2.03(c) shall be followed in making such Base Rate
Revolving Loans; provided, that such Base Rate Revolving Loans shall be made
notwithstanding the Company's failure to comply with the conditions specified
in Section 4.02; and provided, further, that if a Borrowing of Revolving Loans
becomes legally impracticable and if so required by the Swingline Bank at the
time such Revolving Loans are required to be made by the Banks in accordance
with this Section 2.05(f), each Bank agrees that in lieu of making Revolving
Loans as described above, such Bank shall purchase a participation from the
Swingline Bank in the applicable Swingline Loans in an amount equal to such
Bank's Commitment Percentage of the aggregate principal amount of such
Swingline Loans, and the procedures set forth in Sections 2.03(b) and 2.03(c)
shall be followed in connection with the purchases of such participations.
The proceeds of such Base Rate Revolving Loans or purchases of participations,
as the case may be, shall be applied to repay such Swingline Loans. A copy of
each notice given by the Agent to the Banks pursuant to this Section 2.05(f)
with respect to the making of Revolving Loans or the purchases of
participations, as the case may be, shall be promptly delivered by the Agent
to the Company. Each Bank's obligation in accordance with this Agreement to
make the Revolving Loans or purchase the participations, as contemplated by
this Section 2.05(f), shall be absolute and unconditional and shall not be
affected by any circumstance, including (1) any set-off, counterclaim,
recoupment, defense or other right which such Bank may have against the
Swingline Bank, the Company or any other Person for any reason whatsoever; (2)
the occurrence or continuance of a Default or an Event of Default; or (3) any
other circumstance, happening or event whatsoever, whether or not similar to
any of the foregoing.
2.06 Increase of Commitments. The Company shall have the right,
without the consent of the Banks but subject to the approval of the Agent
(which approval shall not be unreasonably withheld), to effectuate from time
to time an increase in the total Commitments under this Agreement by adding to
this Agreement one or more Persons that are Eligible Assignees (who shall,
upon completion of the requirements stated in this Section, constitute "Banks"
hereunder), or by allowing one or more Banks to increase their Commitments
hereunder, so that such added and increased Commitments shall equal the
increase in Commitments effectuated pursuant to this Section; provided that
(a) no increase in Commitments pursuant to this Section shall result in the
total Commitments exceeding $300,000,000 or shall result in the aggregate
amount of the increases in the Commitments effectuated pursuant to this
Section since the date of this Agreement being in excess of the sum of
$50,000,000 plus the aggregate amount (but not greater than $50,000,000) of
all non-ratable reductions and terminations of Commitments effectuated
pursuant to Section 2.08; (b) no Bank's Commitment shall be increased without
the consent of such Bank; (c) there has occurred and is continuing no Default
or Event of Default, and (d) there has been no ratable reduction of
Commitments pursuant to Section 2.07. The Company shall deliver or pay, as
applicable, to the Agent each of the following items prior to 11:00 a.m.
(Houston time) (i) three Business Days prior to the requested effective date
of such increase in the Commitments, if such date is a No Loan Date, or (ii)
five Business Days prior to the requested effective date of such increase in
the Commitments, if such date is not a No Loan Date:
(A) a written notice of the Company's intention to
increase the total Commitments pursuant to this Section, which
shall specify each new Eligible Assignee, if any, the changes in
amounts of Commitments that will result, and such other
information as is reasonably requested by the Agent;
(B) a document in form and substance as may be reasonably
required by the Agent, executed and delivered by each new Eligible
Assignee and each Bank agreeing to increase its Commitment,
pursuant to which it becomes a party hereto or increases its
Commitment, as the case may be, which document, in the case of a
new Eligible Assignee, shall (among other matters) specify the CD
Lending Office, Domestic Lending Office and LIBOR Lending Office
of such new Eligible Assignee;
(C) a Note in the principal amount of the Commitment of
each new Eligible Assignee, or a replacement Note in the principal
amount of the increased Commitment of each Bank agreeing to
increase its Commitment, as the case may be, executed and
delivered by the Company, which Note shall be in form and
substance as may be reasonably required by Agent; and
(D) a non-refundable processing fee of $3,500, for the
sole account of the Agent.
Upon receipt of any notice referred to in clause (A) above, the Agent will
promptly notify each Bank thereof. Upon execution and delivery of such
documents and the payment of such fee, such new Eligible Assignee shall
constitute a "Bank" hereunder with a Commitment as specified therein, or such
Bank's Commitment shall increase as specified therein, as the case may be. The
Company agrees to pay to the Banks any and all amounts to the extent payable
pursuant to Section 3.02 as a result of any such increase in the Commitments.
2.07 Ratable Reduction or Termination of Commitments. The Company may,
upon not less than three Business Days' prior notice to the Agent, terminate
all the Commitments, or permanently reduce all the Commitments by an aggregate
minimum amount of $10,000,000 or any multiple of $1,000,000 in excess thereof;
unless, after giving effect thereto and to any prepayments of Loans made on
the effective date thereof, (i) the then-outstanding principal amount of all
Revolving Loans and Swingline Loans would exceed the amount of the combined
Commitments of all the Banks then in effect, or (ii) the then-outstanding
principal amount of all Swingline Loans would exceed the amount of the
Swingline Commitment then in effect, as adjusted pursuant to the last sentence
of this Section 2.07. Once reduced in accordance with this Section, the
Commitments may not be increased. Any such reduction of the Commitments shall
be applied ratably to each Bank's Commitment according to its Commitment
Percentage. At no time shall the Swingline Commitment exceed the combined
Commitments of all the Banks, and any reduction of the Commitments which
reduces the combined Commitments of all the Banks below the then-current
amount of the Swingline Commitment shall result in an automatic corresponding
reduction of the Swingline Commitment to the amount of the combined
Commitments of all the Banks, as so reduced, without any action on the part of
the Swingline Bank.
2.08 Non-Ratable Reduction or Termination of Commitments. The Company
shall have the right, without the consent of any Bank, but subject to the
approval of the Agent (which consent shall not be unreasonably withheld), to
reduce in part or to terminate in whole the Commitment of one or more Banks
non-ratably, provided that (i) the effective date of any such reduction or
termination of Commitments shall be a No Loan Date, (ii) after giving effect
thereto and to any prepayments of Swingline Loans made on the effective date
thereof, the then-outstanding principal amount of all Swingline Loans shall
not exceed the amount of the Swingline Commitment then in effect, as adjusted
pursuant to the penultimate sentence of this Section 2.08; (iii) on the
effective date of any such reduction or termination (x) no Default or Event of
Default shall have occurred and be continuing, (y) the senior unsecured
long-term debt of the Company is rated BBB- or better by S&P or Baa3 or better
by Moody's, and (z) the Company shall pay to any Bank whose Commitment is
terminated all amounts owed by the Company to such Bank under this Agreement
(including accrued commitment fees), (iv) the aggregate amount of each
non-ratable reduction shall be at least $5,000,000, and (v) the aggregate
amount of all such non-ratable reductions and terminations of Commitments
since the date of this Agreement shall not exceed the sum of $50,000,000 plus
the aggregate amount (but not greater than $50,000,000) of all increases in
Commitments effectuated pursuant to Section 2.06. At no time shall the
Swingline Commitment exceed the combined Commitments of the Banks, and any
reduction of the Commitment of one or more Banks non-ratably which reduces the
combined Commitments of the Banks below the then-current amount of the
Swingline Commitment shall result in an automatic corresponding reduction of
the Swingline Commitment to the amount of the combined Commitments of the
Banks, as so reduced, without any action on the part of the Swingline Bank.
The Company shall give the Agent three Business Days' notice of the Company's
intention to reduce or terminate any Commitment pursuant to this Section.
2.09 Optional and Mandatory Prepayments. (a) Subject to Section 3.02,
the Company may, at any time or from time to time by irrevocable notice to the
Agent, not less than (i) one Business Day prior to a prepayment of any CD
Loan, (ii) three Business Days prior to a prepayment of any Offshore Loan, or
(iii) by 11:00 a.m. (Houston time) on the Business Day of a prepayment of any
Base Loan, ratably prepay Loans in whole or in part, in minimum amounts of
$5,000,000 or any multiple of $1,000,000 in excess thereof. Such notice of
prepayment shall specify the date and amount of such prepayment, whether the
Loans to be prepaid are Revolving Loans or Swingline Loans, the Type(s) of any
Loans to be prepaid and the specific Borrowing or Borrowings pursuant to which
such Loans were made. The Agent will promptly notify each Bank, in the case
of the prepayment of Revolving Loans, or the Swingline Bank, in the case of
the prepayment of Swingline Loans, of its receipt of any such notice, and of
such Bank's Commitment Percentage of such prepayment, as applicable. If such
notice is given by the Company, the Company shall make such prepayment and the
payment amount specified in such notice shall be due and payable on the date
specified therein, together with accrued interest to each such date on the
amount prepaid.
(b) No later than the date that is 30 days after the occurrence
of any Change in Control as to the Company, the Company shall prepay all
outstanding Loans, together with accrued interest, fees, amounts payable
pursuant to Section 3.02 and all other amounts outstanding hereunder, and
immediately upon the occurrence of such Change in Control, the obligations of
the Banks to make additional Loans, including the obligation of the Swingline
Bank to make Swingline Loans, shall be terminated automatically.
(c) Immediately upon the occurrence of any Specified Transaction
or at any time prior to the date that is 180 days after the date of
consummation of such Specified Transaction, the Agent shall at the request of,
and may with the consent of, the Required Banks, in their sole and absolute
discretion, (i) by notice to the Company pursuant to Section 10.02 hereof,
declare the outstanding principal amount of all Loans, together with accrued
interest, amounts payable pursuant to Section 3.02 and all other amounts
outstanding hereunder, to be immediately due and payable, whereupon such
amounts shall immediately be paid by the Company, and (ii) by notice to the
Company pursuant to Section 10.02 hereof, declare the obligation of each Bank
to make Loans, including the obligation of the Swingline Bank to make
Swingline Loans, be terminated, whereupon such obligations shall be
terminated immediately.
(d) On the date of any increase in the total Commitments pursuant
to Section 2.06, the Company shall prepay all Revolving Loans outstanding on
such date, together with accrued interest thereon and amounts payable pursuant
to Section 3.02; provided, however, that, notwithstanding the foregoing
sentence, if after giving effect to such an increase in the total Commitments
there are no new Banks hereunder and the Commitment Percentage of each Bank
is unchanged from its Commitment Percentage immediately prior to such
increase, then the Company shall not be required to prepay any Revolving Loans
and related amounts outstanding on such date.
(e) Any mandatory prepayment under subsection (b), (c) or (d) of
this Section shall be made by the Company without presentment, demand, protest
or other notice of any kind, except as provided in subsection (c), all of
which are expressly waived by the Company.
2.10 Repayment. The Company shall repay to the Agent for the account
of each Bank on the Revolving Termination Date the aggregate principal amount
of all Revolving Loans outstanding on such date. The Company shall repay to
the Agent for the account of the Swingline Bank the outstanding principal
amount of each Swingline Loan on the last day of the Interest Period
applicable thereto.
2.11 Interest. (a) Each Loan shall bear interest on the outstanding
principal amount thereof from the applicable Borrowing Date until paid at a
rate per annum equal to the Adjusted CD Rate, the LIBO Rate or the Base Rate,
as the case may be (and subject, in the case of Revolving Loans, to the
Company's right to convert to other Types of Revolving Loans under Section
2.04), plus, in the case of CD Loans and Offshore Loans, the Applicable Margin;
provided, however, that in no event shall the applicable rate payable to any
Bank exceed the Highest Lawful Rate applicable to such Bank.
(b) Interest on each Loan shall be paid to the Agent for the
account of each Bank, in the case of Revolving Loans, or the Swingline Bank,
in the case of Swingline Loans, in arrears on each Interest Payment Date.
Interest shall also be paid on the date of any prepayment of Loans under
Section 2.09 for the portion of the Loans so prepaid and upon payment in full
thereof.
(c) Any principal amount of any Loan which is not paid when due
(whether at stated maturity, by acceleration or otherwise) shall bear
interest, to the extent permitted by law, from the date on which such amount
became due until such amount is paid in full, payable on demand, at a rate per
annum equal at all times to the sum of the Base Rate in effect from time to
time plus 1.50% per annum, provided, however, that in no event shall such rate
as to any Bank exceed the Highest Lawful Rate applicable to such Bank.
2.12 Fees. The Company agrees to pay to the Agent for the account of
each Bank a commitment fee on the average daily amount by which such Bank's
Commitment exceeds the aggregate outstanding principal amount of such Bank's
Revolving Loans, from the date hereof until the Revolving Termination Date at
a rate per annum equal to the Applicable Fee Amount, payable in arrears on the
last Business Day of each calendar quarter during the term of such Bank's
Commitment, and on the Revolving Termination Date. The Company shall pay to
the Agent for its own account and the account of the Arranger such additional
fees as are set forth in the fee letter dated September 8, 1995 among such
Persons.
2.13 Computation of Fees and Interest. All computations of interest
for Base Rate Revolving Loans and Base Rate Swingline Loans, when the Base
Rate is determined according to clause (b) of the definition of "Base Rate"
shall be made on the basis of a year of 365 or 366 days, as the case may be,
and actual days elapsed. All other computations of fees and interest shall be
made on the basis of a 360-day year and actual days elapsed (but not to exceed
as to any Bank the Highest Lawful Rate applicable to such Bank). Interest and
fees shall accrue during each period during which interest or such fees are
computed from the first day thereof to the last day thereof.
2.14 Interest Rate Determination and Protection. (a) Each Reference
Bank and the Swingline Bank, as applicable, agrees to furnish to the Agent
timely information for the purpose of determining each Adjusted CD Rate or
LIBO Rate, as applicable. If any one or more of the Reference Banks shall not
furnish such timely information to the Agent for the purpose of determining
any such interest rate, the Agent shall determine such interest rate on the
basis of timely information furnished by the remaining Reference Banks.
(b) The Agent shall give prompt notice to the Company and the
Banks of the applicable interest rate determined by the Agent for purposes of
Section 2.11(a).
(c) If fewer than two Reference Banks furnish timely information
to the Agent for determining the LIBO Rate for any LIBOR Revolving Loans or
the Adjusted CD Rate for any Adjusted CD Rate Revolving Loans,
(i) the Agent shall forthwith notify the Company and the
Banks that the interest rate cannot be determined for such LIBOR
Revolving Loans or Adjusted CD Rate Revolving Loans, as the case may be,
(ii) each such Loan will automatically, on the last day of
the then existing Interest Period therefor, convert into a Base Rate
Revolving Loan (or if such Loan is then a Base Rate Revolving Loan, will
continue as a Base Rate Revolving Loan), and
(iii) the obligation of the Banks to make, or to convert
Revolving Loans into or continue Revolving Loans as, Adjusted CD Rate
Revolving Loans or LIBOR Revolving Loans, as the case may be, shall be
suspended until the Agent shall notify the Company and the Banks that
the circumstances causing such suspension no longer exist.
(d) With respect to any Offshore Loan or CD Loan, upon request by
the Company the Agent shall provide to the Company the information furnished
by each Reference Bank or the Swingline Bank, as applicable, to enable the
Agent to determine the LIBOR Rate or the Adjusted CD Rate, as the case may be,
for such Loan.
(e) If, with respect to any Adjusted CD Rate Revolving Loans or
LIBOR Revolving Loans, the Majority Banks notify the Agent that the applicable
interest rate for any Interest Period for such Loans cannot be reasonably
determined or will not adequately reflect the cost to such Majority Banks of
making, funding or maintaining their respective Adjusted CD Rate Revolving
Loans or LIBOR Revolving Loans, as the case may be, for such Interest Period,
the Agent shall forthwith so notify the Company and the Banks, whereupon
(i) each such Revolving Loan will automatically, on the
last day of the then existing Interest Period therefor, convert into a
Base Rate Revolving Loan (or, if such Revolving Loan is then a Base Rate
Revolving Loan, will continue as a Base Rate Revolving Loan), and
(ii) the obligation of the Banks to make, or to convert
Revolving Loans into or continue Revolving Loans as, Adjusted CD Rate
Revolving Loans or LIBOR Revolving Loans, as the case may be, shall be
suspended until the Agent shall notify the Company and the Banks that
the circumstances causing such suspension no longer exist.
(f) If the Swingline Bank notifies the Agent that the applicable
interest rate for any Interest Period for any Adjusted CD Rate Swingline Loan
or LIBOR Swingline Loan cannot be reasonably determined or will not adequately
reflect the cost to the Swingline Bank of making, funding or maintaining such
Loan, the Agent shall forthwith so notify the Company, whereupon the
obligation of the Swingline Bank to make Adjusted CD Rate Swingline Loans or
LIBOR Swingline Loans, as the case may be, shall be suspended until the Agent
shall notify the Company that the circumstances causing such suspension no
longer exist.
2.15 Payments by the Company. Except as otherwise expressly provided
herein, all payments by the Company shall be made in Dollars to the Agent for
the account of the Banks, in the case of Revolving Loans, or the Swingline
Bank, in the case of Swingline Loans, at the Agent's Payment Office and shall
be made without setoff, recoupment or counterclaim. Such payments shall be
made in immediately available funds no later than 12:00 noon (Houston time)
on the date specified herein. The Agent will promptly distribute to each Bank
its Commitment Percentage share (or other applicable share as expressly
provided herein), in the case of Revolving Loans, or to the Swingline Bank, in
the case of Swingline Loans, of such payment in like funds as received. Any
payment received by the Agent later than the time specified above shall be
deemed to have been received on the following Business Day, and any applicable
interest or fee shall continue to accrue.
(b) Subject to the provisions set forth in the definition of
"Interest Period" herein, whenever any payment is due on a day other than a
Business Day, such payment shall be made on the following Business Day, and
such extension of time shall in such case be included in the computation of
interest or fees, as the case may be.
(c) Unless the Agent receives notice from the Company prior to
the date on which any payment is due to the Banks or the Swingline Bank, as
the case may be, that the Company will not make such payment in full as and
when required, the Agent may assume that the Company has made such payment in
full to the Agent on such date in immediately available funds, and the Agent
may (but shall not be so required), in reliance upon such assumption,
distribute to each Bank or the Swingline Bank, as the case may be, on such due
date an amount equal to the amount then due such Bank. If and to the extent
the Company has not made such payment in full to the Agent, each Bank or the
Swingline Bank, as applicable, shall repay to the Agent on demand such amount
distributed to such Bank, together with interest thereon at the Federal Funds
Rate for each day from the date such amount is distributed to such Bank until
the date repaid.
2.16 Payments by the Banks to the Agent. (a) Unless the Agent receives
notice from a Bank on or prior to the Closing Date or, with respect to any
Borrowing after the Closing Date, at least one Business Day prior to the
proposed Borrowing Date, that such Bank will not make available as and when
required hereunder to the Agent for the account of the Company the amount of
that Bank's Commitment Percentage, in the case of a Revolving Loan Borrowing,
or the Swingline Loan, in the case of a Swingline Loan Borrowing, the Agent
may assume that each Bank, in the case of a Revolving Loan Borrowing, or the
Swingline Bank, in the case of a Swingline Borrowing, has made such amount
available to the Agent in immediately available funds on the Borrowing Date
and the Agent may (but shall not be so required), in reliance upon such
assumption, make available to the Company on such date a corresponding amount.
If and to the extent any Bank shall not have made its full amount available to
the Agent in immediately available funds and the Agent in such circumstances
has made available to the Company such amount, that Bank shall on the Business
Day following such Borrowing Date make such amount available to the Agent,
together with interest at the Federal Funds Rate for each day during such
period. A notice of the Agent submitted to any Bank with respect to amounts
owing under this subsection (a) shall be conclusive, absent manifest error.
If such amount is so made available, such payment to the Agent shall
constitute such Bank's Loan on the date of Borrowing for all purposes of this
Agreement. If such amount is not made available to the Agent on the Business
Day following the Borrowing Date, the Agent will notify the Company of such
failure to fund and, upon demand by the Agent, the Company shall pay such
amount to the Agent for the Agent's account, together with interest thereon
for each day elapsed since the date of such Borrowing, at a rate per annum
equal to the interest rate applicable at the time to the Loans comprising such
Borrowing, in the case of a Revolving Loan Borrowing, or at the applicable
Swingline Rate, in the case of a Swingline Loan Borrowing.
(b) The failure of any Bank to make any Revolving Loan on any
Borrowing Date shall not relieve any other Bank of any obligation hereunder to
make a Revolving Loan on such Borrowing Date, but no Bank shall be responsible
for the failure of any other Bank to make the Revolving Loan to be made by
such other Bank on any Borrowing Date.
2.17 Sharing of Payments, Etc. If, other than as expressly provided
elsewhere herein, any Bank shall obtain on account of the Loans made by it any
non-pro rata payment (whether voluntary, involuntary, through the exercise of
any right of set-off, or otherwise), such Bank shall immediately (a) notify
the Agent of such fact, and (b) purchase from the other Banks such
participations in the Loans made by them as shall be necessary to cause such
purchasing Bank to share the excess payment with each of them in accordance
with their Commitment Percentages; provided, however, that if all or any
portion of such excess payment is thereafter recovered from the purchasing
Bank, such purchase shall to that extent be rescinded and each other Bank
shall repay to the purchasing Bank the purchase price paid therefor, together
with an amount equal to such paying Bank's Commitment Percentage (according to
the proportion of (i) the amount of such paying Bank's required repayment to
(ii) the total amount so recovered from the purchasing Bank) of any interest
or other amount paid or payable by the purchasing Bank in respect of the total
amount so recovered. The Company agrees that any Bank so purchasing a
participation from another Bank may, to the fullest extent permitted by law,
exercise all its rights of payment (including the right of set-off) with
respect to such participation as fully as if such Bank were the direct
creditor of the Company in the amount of such participation.
ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY
3.01 Taxes. (a) Any and all payments by the Company to each Bank or
the Agent under this Agreement and any Note shall be made free and clear of,
and without deduction or withholding for, any Taxes. In addition, the Company
shall pay all Other Taxes.
(b) To the fullest extent permitted by applicable law, the
Company agrees to indemnify and hold harmless each Bank and the Agent for the
full amount of Taxes or Other Taxes (including any Taxes or Other Taxes
imposed by any jurisdiction on amounts payable under this Section 3.01) paid
by such Bank or the Agent and any liability (including penalties, interest,
additions to tax and expenses) arising therefrom or with respect thereto,
whether or not such Taxes or Other Taxes were correctly or legally asserted.
Payment under this indemnification shall be made within 30 days after the date
the Bank or the Agent makes written demand therefor in accordance with this
Section 3.01(b).
(c) If the Company shall be required by law to deduct or
withhold any Taxes or Other Taxes from or in respect of any sum payable under
this Agreement or any Note to any Bank or the Agent, then: (i) the sum payable
shall be increased as necessary so that after making all required deductions
and withholdings (including deductions and withholdings applicable to
additional sums payable under this Section 3.01) such Bank or the Agent, as
the case may be, receives an amount equal to the sum it would have received
had no such deductions or withholdings been made; (ii) the Company shall make
such deductions and withholdings; and (iii) the Company shall pay the full
amount deducted or withheld to the relevant taxing or other authority in
accordance with applicable law.
(d) Notwithstanding anything to the contrary contained in this
Agreement, each of the Company and the Agent shall be entitled, to the extent
it is required to do so by law, to deduct or withhold income or other similar
taxes imposed by the United States of America from interest, fees or other
amounts payable under this Agreement or any Note for the account of any Bank
(without indemnification or the payment by the Company of increased amounts
pursuant to clause (a), (b) or (c) above) other than a Bank (i) which is a
domestic corporation (as defined in Section 7701 of the Code) for federal
income tax purposes or (ii) which has the Prescribed Forms on file with the
Company and the Agent for the applicable year, provided that if the Company
shall so deduct or withhold any such taxes, it shall provide a statement to
the Agent and such Bank, setting forth the amount of such taxes so deducted or
withheld, the applicable rate and any other information or documentation which
such Bank or the Agent may reasonably request to assist such Bank or the Agent
in obtaining any allowable credits or deductions for the taxes so deducted or
withheld in the jurisdiction or jurisdictions in which such Bank is subject
to tax.
(e) Within 30 days after the date of any payment by the Company
of Taxes or Other Taxes, the Company shall furnish the Agent the original or a
certified copy of a receipt (if available) evidencing payment thereof, or
other evidence of payment satisfactory to the Agent.
(f) Each Bank shall use reasonable efforts (consistent with its
internal policies and legal and regulatory restrictions) to select a
jurisdiction for its Lending Office or change the jurisdiction of its Lending
Office, as the case may be, so as to avoid the imposition of any Taxes or
Other Taxes or to eliminate any such additional payment by the Company which
may thereafter accrue; provided that no such selection or change shall be made
if, in the sole judgment of such Bank, such selection or change would be
disadvantageous to such Bank.
3.02 Breakage Costs. If (a) any payment of principal of any CD Loan or
Offshore Loan is made by the Company prior to the last day of an Interest
Period relating to such Loan, or (b) the Company fails to borrow a Borrowing
consisting of a CD Loan or an Offshore Loan on the date for such Borrowing
specified in the Notice of Borrowing (except as permitted by and subject to
the provisions of Sections 2.14(c), (e) and (f) and 3.04), then upon demand by
any Bank, the Company shall pay to the Agent for the account of such Bank any
amounts required to compensate such Bank for any losses, costs or expenses
which it may reasonably incur as a result of such payment, including, without
limitation, any loss (excluding loss of anticipated profits), cost or expense
incurred by reasons of the liquidation or reemployment of deposits or other
funds acquired by such Bank to fund or maintain such Borrowing, but not
including any cost of termination or liquidation of any hedge or related
trading position (such as a rate swap, basis swap, forward rate transaction,
interest rate option, cap, collar or floor transaction, swaption, or any
other, similar transaction). For purposes of calculating amounts payable by
the Company to the Banks under this Section, (i) each Offshore Loan made by a
Bank (and each related reserve, special deposit or similar requirement) shall
be conclusively deemed to have been funded at the LIBO Rate used in
determining such Offshore Loan by a matching deposit or other borrowing in the
interbank eurodollar market for a comparable amount and for a comparable
period, whether or not such Offshore Loan is in fact so funded, and (ii) each
CD Loan made by a Bank (and each related reserve, special deposit or similar
requirement) shall be conclusively deemed to have been funded at the
Certificate of Deposit Rate used in determining the Adjusted CD Rate for such
CD Loan by the issuance of its certificate of deposit in a comparable amount
and for a comparable period, whether or not such CD Loan is in fact so funded.
3.03 Increased Costs. (a) If, due to either: (i) after the date
hereof, the introduction of or any change (other than any change by way of
imposition or increase of reserve requirements pursuant to Section 3.05) in or
in the interpretation of any law or regulation by a Governmental Authority
charged with the interpretation or administration thereof, or (ii) the
compliance with any guideline enacted after the date hereof or request
received after the date hereof from any Governmental Authority (whether or not
having the force of law) the effect of which is to impose or modify any
reserve, special deposit, insurance assessment, or similar requirement
relating to any extensions of credit or other assets of, or any deposits with
or other liabilities of, any Bank (other than reserves maintained as provided
for in Section 3.05), there shall be any actual increase in the cost to such
Bank of agreeing to make or making, funding or maintaining any CD Loan or
Offshore Loan, then the Company shall from time to time, upon demand by such
Bank (with a copy of such demand to the Agent), pay to the Agent for the
account of such Bank additional amounts sufficient to compensate such Bank for
such actual increased cost. Promptly after any Bank becomes aware of any such
introduction, change or proposed compliance, such Bank shall notify the
Company thereof. No Bank shall be permitted to recover increased costs
incurred or accrued more than 90 days prior to the date such notice is given
to the Company.
(b) If the Company so notifies the Agent within five Business
Days after any Bank notifies the Company of any increased cost pursuant to the
provisions of Section 3.03(a), the Company shall convert all Revolving Loans
of the Type affected by such increased cost of all Banks then outstanding into
Revolving Loans of another Type in accordance with Section 2.04 and,
additionally, reimburse such Bank for such increased cost in accordance with
Section 3.03(a).
(c) If any Bank shall have determined that, after the date
hereof, the adoption of any applicable law, rule or regulation regarding
capital adequacy, or any change therein, or any change in the interpretation
or administration thereof by any Governmental Authority, charged with the
interpretation or administration thereof, or compliance by any Bank (or its
Lending Office) 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 increasing the amount of capital
required or expected to be maintained as a result of its Commitment hereunder,
such Bank shall have the right to give prompt written notice to the Company
with a copy to the Agent, which notice shall notify the Company of the
additional amounts as shall be required to compensate such Bank for the
increased cost to such Bank as a result of such increase in capital and shall
certify that such costs are generally being charged by such Bank to other
similarly situated borrowers under similar credit facilities and such amounts
shall be paid promptly by the Company.
(d) Each Bank shall use its best efforts (consistent with its
internal policies and legal and regulatory restrictions) to select a
jurisdiction for its Lending Office or change the jurisdiction of its Lending
Office, as the case may be, so as to avoid the imposition of any increased
costs under this Section 3.03 or to eliminate the amount of any such increased
cost which may thereafter accrue; provided that no such selection or change of
the jurisdiction for its Lending Office shall be made if, in the reasonable
judgment of such Bank, such selection or change would be disadvantageous to
such Bank.
3.04 Illegality. Notwithstanding any other provision of this
Agreement, if any Bank shall notify the Agent that, after the date hereof, the
introduction of or any change in or in the interpretation of any law or
regulation shall make it unlawful, or any Governmental Authority shall assert
that it is unlawful, for any Bank or its LIBOR Lending Office to make any
Offshore Loans or to continue to fund or maintain any Offshore Loan hereunder,
then, on notice thereof and demand therefor by such Bank to the Company, (i)
the obligation of such Bank to make Offshore Loans and to convert Revolving
Loans into LIBOR Revolving Loans shall be suspended until the Agent shall
notify the Company that the circumstances causing such suspension no longer
exist, and (ii) the Company shall, forthwith convert all LIBOR Revolving Loans
of all Banks then outstanding into Revolving Loans of another Type in
accordance with Section 2.04.
3.05 Reserves on Offshore Loans. If any Bank shall be required under
regulations of the FRB to maintain reserves with respect to liabilities or
assets consisting of or including Eurocurrency funds or deposits (currently
known as "Eurocurrency liabilities"), and if as a result thereof there is an
increase in the cost to such Bank of agreeing to make or making, funding or
maintaining Offshore Loans, the Company shall from time to time, upon demand
by such Bank (with a copy of such demand to the Agent), pay to the Agent for
the account of such Bank additional amounts, as additional interest hereunder,
sufficient to compensate Bank for such increased cost. Increased costs under
this Section 3.05 shall be payable by the Company on each Interest Payment
Date on such Offshore Loans, provided the Company shall have received at least
15 days' prior written notice (with a copy to the Agent) of such additional
interest from the Bank. If a Bank fails to give notice 15 days prior to the
relevant Interest Payment Date, such additional interest shall be payable 15
days from receipt of such notice.
3.06 Replacement of Bank; Termination of Bank. In the event that any
Bank makes a demand for payment pursuant to Sections 3.01 or 3.03, or any Bank
has suspended its funding of Offshore Loans pursuant to Section 3.04, the
Company shall have the right, if no Default or Event of Default then exists,
to either replace such Bank in accordance with subsection (a) of this Section
3.06 or terminate such Bank's Commitment in accordance with subsection (b) of
this Section 3.06. If any Banks that are not Affiliates as of the Closing
Date become Affiliates after the Closing Date (each such Bank, a "New
Affiliate Bank"), the Company shall have the right, if no Default or Event of
Default then exists, to either replace each such New Affiliate Bank (other
than the New Affiliate Bank having the largest Commitment) in accordance with
subsection (a) of this Section 3.06 or terminate each such New Affiliate Bank
(other than the New Affiliate Bank having the largest Commitment) in
accordance with subsection (b) of this Section 3.06.
(a) If the Company determines to replace a Bank pursuant to this
Section 3.06, the Company shall have the right to replace such Bank with an
entity that is an Eligible Assignee (a "Replacement Bank"); provided that such
Replacement Bank, (i) if it is not already a Bank, shall be reasonably
acceptable to the Agent, (ii) shall unconditionally offer in writing (with a
copy to the Agent) to purchase all of such Bank's rights hereunder and
interest in the Loans owing to such Bank and the Note held by such Bank
without recourse at the principal amount of such Note plus interest and fees
accrued thereon to the date of such purchase on a date therein specified, and
(iii) shall, if such Replacement Bank is not already a Bank, execute and
deliver to the Agent a document in form and substance satisfactory to the
Agent pursuant to which such Replacement Bank becomes a party hereto with a
Commitment equal to that of the Bank being replaced, including, in the case of
the replacement of the Swingline Bank, the Swingline Commitment, which
document shall (among other matters) specify the CD Lending Office, Domestic
Lending Office and LIBOR Lending Office of such Replacement Bank. Upon
satisfaction of the requirements set forth in the first sentence of this
Section 3.06(a), acceptance of such offer to purchase by the Bank to be
replaced, payment to such Bank of the purchase price in immediately available
funds, and the payment by the Company of all requested costs accruing to the
date of purchase which the Company is obligated to pay under Section 3.02 and
all other amounts owed by the Company to such Bank (other than the principal
of and interest on the Loans of such Bank purchased by the Replacement Bank
and interest and fees accrued thereon to the date of purchase), and payment to
the Agent of a non-refundable processing fee of $2,500, the Replacement Bank
shall constitute a "Bank" hereunder with a Commitment as so specified and the
Bank being so replaced shall no longer constitute a "Bank" hereunder (with the
signature pages being amended to reflect same) and such Bank shall be relieved
of its obligations hereunder. If, however, (x) a Bank accepts such an offer
and such proposed Replacement Bank fails to purchase such rights and interest
on such specified date in accordance with the terms of such offer, the Company
shall continue to be obligated to pay the increased costs or additional
amounts due to such Bank pursuant to Section 3.01, 3.03 or 3.05 (if a demand
for repayment of increased costs or additional amounts pursuant to any of such
Sections is the basis for the proposed replacement), as the case may be, or
(y) the Bank proposed to be replaced fails to accept such purchase offer, the
Company (if the basis for the proposed replacement is a demand for payment of
increased costs or additional amounts pursuant to Sections 3.01, 3.03 or 3.05)
shall not be obligated to pay to such Bank such increased costs or additional
amounts to the extent incurred or accrued from and after the date of such
purchase offer, but in each of the cases set forth in clauses (x) and (y), the
Company shall continue to have the right to terminate such Bank's Commitment
in accordance with Section 3.06(b) hereof.
(b) In the event that the Company determines to terminate a
Bank's Commitment pursuant to this Section 3.06 which, in the case of the
Swingline Bank, includes the Swingline Commitment, the Company shall give
notice to such Bank of the Company's election to terminate (a copy shall be
sent to the Agent), and such termination shall become effective 15 days
thereafter unless such Bank withdraws its request for additional compensation
(with respect to a proposed termination based on a request for additional
compensation) or reinstates its funding of Offshore Loans (with respect to a
proposed termination based on a suspension of funding of Offshore Loans). On
the date of the termination of the Commitment of any Bank pursuant to this
Section 3.06(b), (x) the Company shall deliver notice of the effectiveness of
such termination to such Bank and to the Agent, (y) the Company shall pay all
amounts owed by the Company to such Bank under this Agreement or under the
Note payable to such Bank (including principal of and interest on the Loans
owed to such Bank, accrued commitment fees and amounts specified in such
Bank's notice (if any) delivered pursuant to Sections 3.01, 3.03 or 3.05 as
the case maybe, with respect to the period prior to such termination) and (z)
upon the occurrence of the events set forth in clauses (x) and (y), such Bank
shall cease to be a "Bank" hereunder for all purposes and such Bank shall be
relieved of its obligations hereunder.
3.07 Reallocation of Commitments in Event of Merger, Etc. If after the
Closing Date any Bank merges or consolidates with or into one or more other
Banks, the surviving entity of such merger or consolidation (the "Surviving
Bank") shall at the request of the Company, if no Default or Event of Default
then exists, assign all or a portion of its Resulting Increased Commitment (as
defined below) to one or more entities selected by the Company that are
Eligible Assignees (each an "Acquiring Entity"); provided that (i) each
Acquiring Entity shall unconditionally offer in writing (with a copy to the
Agent) to purchase a portion of such Surviving Bank's Resulting Increased
Commitment and the portion of the Revolving Loans owing to such Surviving Bank
and the Note or Notes held by such Surviving Bank allocable to the amount of
the Resulting Increased Commitment to be acquired; (ii) the portion of the
Resulting Increased Commitment of the Surviving Bank acquired by each
Acquiring Entity shall be in integral multiples of $1,000,000; (iii) the
purchase price to be paid by the Acquiring Entity shall be the outstanding
principal amount of the Revolving Loans owed to such Surviving Bank on the
date of purchase (plus interest and fees accrued thereon) that are allocable
to the amount of the Resulting Increased Commitment being acquired; and (iv)
each Acquiring Entity, if it is not already a Bank, shall be reasonably
acceptable to the Agent. Each Assignment hereunder shall be accomplished in
accordance with the third sentence of Section 10.07(c), and to the extent of
any such assignment, the Surviving Bank shall be relieved of its obligations
hereunder with respect to its assigned Commitment. To the extent that the
Surviving Bank's Resulting Increased Commitment is not acquired by an
Acquiring Entity, the Company shall have the right to terminate the Surviving
Bank's Resulting Increased Commitment by notice given to the Agent and such
Bank within 180 days after the effective date of such merger or consolidation.
The termination shall be effective 15 days thereafter, provided that on the
date of termination the Company shall have paid to the Surviving Bank all
amounts owed by the Company to the Surviving Bank allocable to the amount of
the Surviving Bank's Resulting Increased Commitment being terminated
(including principal of the Revolving Loans owed to such Surviving Bank
allocable to the portion of the Resulting Increased Commitment being terminated
plus interest and fees accrued on such portion). The amounts owed by the
Company to the Surviving Bank under the Agreement that are allocable to the
amount of the Resulting Increased Commitment being acquired or terminated
pursuant to this Section 3.07, shall be the product of (a) all amounts owed by
the Company to the Surviving Bank hereunder on the date of acquisition or
termination (including the outstanding principal amount of the Revolving Loans
owed to the Surviving Bank and interest and fees accrued thereon), and (b) a
fraction having as it numerator the amount of the Resulting Increased
Commitment being acquired or terminated and having as its denominator the
total amount of the Surviving Bank's Commitment without giving effect to such
acquisition or termination. For the purposes of this Section 3.07, "Resulting
Increased Commitment" shall mean (a) the total combined Commitment of the
Surviving Bank immediately following a merger or consolidation contemplated by
this Section 3.07, minus (b) the amount of the largest Commitment (immediately
prior to such merger or consolidation) of any Bank that was a party to such
merger or consolidation, excluding the Swingline Commitment in the event the
Swingline Bank is a Surviving Bank.
3.08 Certificates of Banks. Any Bank claiming reimbursement or
compensation under this Article III shall, as part of each notice and demand
for payment required under this Article III, deliver to the Company (with a
copy to the Agent) a certificate setting forth in reasonable detail the amount
and basis of the reimbursement or compensation payable to the Bank hereunder
and such certificate shall be conclusive and binding on the Company in the
absence of manifest error.
3.09 Survival. The agreements and obligations of the Company in this
Article III shall survive the payment of all other Obligations.
ARTICLE IV
CONDITIONS PRECEDENT
4.01 Conditions of Initial Loans. The obligation of each Bank to make
its initial Loan hereunder, including the obligation of the Swingline Bank to
make its initial Swingline Loan, is subject to the condition that the Agent
have received on or before the Closing Date all of the following, in form and
substance satisfactory to the Agent and each Bank:
(a) Credit Agreement and Notes. This Agreement and the Notes
executed by each party thereto;
(b) Resolutions; Incumbency. (i) Copies of the resolutions of
the board of directors of the Company authorizing the transactions
contemplated hereby, certified as of the Closing Date by the Secretary or an
Assistant Secretary of the Company; and (ii) a certificate of the Secretary or
Assistant Secretary of the Company certifying the names and true signatures
of the officers of the Company authorized to execute and deliver each Loan
Document to be executed by the Company;
(c) Organization Documents: Good Standing. Each of the following
documents: (i) the articles or certificate of incorporation and the bylaws of
the Company as in effect on the Closing Date, certified by the Secretary or
Assistant Secretary of the Company as of the Closing Date; and (ii) a good
standing certificate for the Company from the Secretary of State (or similar,
applicable Governmental Authority) of its state of incorporation and of the
State of Texas dated as of a recent date;
(d) Legal Opinions. An opinion of Wilson B. Fargo, Senior Vice
President and General Counsel of the Company, addressed to the Agent and the
Banks, substantially in the form of Exhibit D-1, and an opinion of Stephanie
A. Lucie, Corporate Counsel of the Company, addressed to the Agent and the
Banks, substantially in the form of Exhibit D-2;
(e) 5-Year Credit Agreement. Evidence that all conditions to
closing of the 5-Year Credit Agreement have occurred;
(f) Officer's Certificate. A certificate signed by a
Responsible Officer of the Company, dated as of the Closing Date, stating that
(i) the representations and warranties contained in Article
V are true and correct on and as of such date, and
(ii) no Default or Event of Default exists or would result
from the initial Borrowing; and
(g) Other Documents. Such other approvals, opinions, documents
or materials as the Agent or any Bank may reasonably request.
4.02 Conditions to All Borrowings. The obligation of each Bank to make
any Loan, including the obligation of the Swingline Bank to make any Swingline
Loan, is subject to the satisfaction of the following conditions precedent on
the relevant Borrowing Date:
(a) Notice of Borrowing. The Agent shall have received a Notice
of Borrowing;
(b) Continuation of Representations and Warranties. The
representations and warranties in Article V shall be true and correct on and
as of such Borrowing Date with the same effect as if made on and as of such
Borrowing Date (except to the extent such representations and warranties
expressly refer to an earlier date, in which case they shall be true and
correct as of such earlier date); and
(c) No Existing Default. No Default or Event of Default shall
exist or shall result from such Borrowing.
Each Notice of Borrowing submitted by the Company hereunder, and each making
of a Borrowing by the Company, shall constitute a representation and warranty
by the Company hereunder, as of the date of each such notice or request and as
of each Borrowing Date, that the conditions in Section 4.02 are satisfied.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
The Company represents and warrants to the Agent and each Bank that:
5.01 Corporate Existence. The Company and each of its Restricted
Subsidiaries are duly incorporated or otherwise formed, validly existing and
(if applicable) in good standing in each case under the laws of its
jurisdiction of incorporation or formation and have all requisite power and
all authority as a corporation, partnership or other form of business
organization, governmental licenses, authorizations, certificates, consents
and approvals required to carry on their respective businesses as now
conducted in all material respects.
5.02 Corporate Power. The execution, delivery and performance by the
Company of the Loan Documents and the consummation of the transactions
contemplated by such Loan Documents are within the Company's corporate powers,
have been duly authorized by all necessary corporate action, and do not
contravene (a) the Company's charter or bylaws or (b) any law or regulation
applicable to the Company, or (c) any material ("material" for the purposes of
this representation meaning creating a liability of $50,000,000 or more)
agreement binding on the Company, or, to its knowledge, any other agreement
binding on the Company.
5.03 Authorization and Approvals. No authorization or approval or
other action by, and no notice to or filing with, any Governmental Authority
is required for the due execution, delivery and performance by the Company of
the Loan Documents or the consummation of the transactions contemplated by
such Loan Documents.
5.04 Enforceable Obligations. This Agreement has been duly executed
and delivered by the Company. This Agreement is, and, when executed and
delivered in accordance with this Agreement, each Note will be, the legal,
valid and binding obligations of the Company enforceable against the Company
in accordance with their respective terms, except as such enforceability may
be limited by any applicable bankruptcy, insolvency, reorganization,
moratorium or similar law affecting creditors' rights generally, and by
general principles of equity.
5.05 Financial Statements. The audited consolidated balance sheet of
the Company and its Subsidiaries as of December 31, 1994, and the related
audited consolidated statements of income and cash flows for the fiscal year
then ended (as shown on the Company's Form 10-K for the year ended December
31, 1994) and the unaudited consolidated balance sheet of the Company and its
Subsidiaries as of June 30, 1995 and the related unaudited statements of income
and cash flows for the fiscal quarter then ended (as shown on the Company's
Form 10-Q for the quarter ended June 30, 1995), fairly present the
consolidated financial condition of the Company and its Subsidiaries as of
such dates and the consolidated results of operations of the Company and its
Subsidiaries for such fiscal periods, all in accordance with GAAP except as
otherwise expressly noted therein, subject (in the case of the unaudited
balance sheet and income statement) to changes resulting from normal year-end
audit adjustments.
5.06 Litigation. Except as disclosed in the Company's Form 10-K for
the year ended December 31, 1994, or the Company's Form 10-Q for the quarter
ended June 30, 1995, which were delivered to the Banks prior to the date
hereof, or as further disclosed by the Company to the Banks and the Agent in
writing prior to the date hereof, there is no pending or, to the knowledge of
the Company, threatened action or proceeding affecting the Company or any of
its Subsidiaries before any court, governmental agency or arbitrator, in which
there is a reasonable likelihood of an adverse decision which could materially
adversely affect the consolidated financial condition or operations of the
Company and its Subsidiaries, taken as a whole. There is no pending or, to
the knowledge of the Company, threatened action or proceeding affecting the
Company which purports to affect the legality, validity, binding effect or
enforceability of any of the Loan Documents.
5.07 Regulation U; Use of Proceeds. Following the application of the
proceeds of each Loan, not more than 25% of the value of the assets of the
Company which are subject to any arrangement with the Agent or any Bank
(herein or otherwise) whereby the Company's or any Subsidiary's right or
ability to sell, pledge or otherwise dispose of assets is in any way restricted
will be Margin Stock. The Company shall not, and shall not suffer or permit
any of its Subsidiaries to, use any portion of the Loan proceeds, directly or
indirectly, to acquire any securities in connection with any transaction
subject to Section 13 (other than an Investment Transaction) or Section 14 of
the Exchange Act, unless, prior to the time such transaction becomes subject
to such Section 13 or 14, the board of directors or other applicable governing
body of the Person that is the issuer of such securities has adopted a
resolution approving such transaction and approving a Change in Control with
respect to such Person whereby the Company may acquire control of such Person.
For purposes of this Section 5.07, an "Investment Transaction" means a
transaction subject to Section 13(d), but not Section 16, of the Exchange Act,
provided that in connection with such transaction the Company or its
Subsidiary (as the case may be) has reported and at all times continues to
report to the SEC that such transaction is undertaken for investment purposes
only and not for any of the purposes specified in clauses 4(a) through (j),
inclusive, of Schedule 13D.
5.08 Investment Company Act. Neither the Company nor any of its
Subsidiaries is an "investment company" or a company "controlled" by an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended.
5.09 ERISA. The Company is in compliance with all applicable
provisions of ERISA.
5.10 Holding Company. Neither the Company nor any of its Subsidiaries
is a "holding company", or a "subsidiary company" of a "holding company", or
an "affiliate" of a "holding company" or of a "subsidiary company" of a
"holding company", or a "public utility" within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
5.11 Environmental Condition. Except as disclosed in the Company's
Form 10-K Report for the year ended December 31, 1994 or in the Company's Form
10-Q Report for the quarter ended June 30, 1995, or as further disclosed by
the Company to the Banks and the Agent in writing, the aggregate contingent
and non-contingent liabilities of the Company and its Subsidiaries which are
presently known to any Responsible Officer and reasonably expected to arise in
connection with (a) the requirements of Environmental Protection Statutes or
(b) any obligation or liability to any Person in connection with any
Environmental matters, including any release or threatened release of any
Hazardous Substance or Hazardous Waste, do not exceed 10% of the Consolidated
Tangible Net Worth of the Company (excluding such liabilities to the extent
covered by insurance if the insurer has confirmed that such insurance covers
such liabilities).
5.12 No Material Adverse Change. Since December 31, 1994, there has
been no material adverse change in the business, consolidated financial
position or consolidated results of operation of the Company and its
Subsidiaries.
ARTICLE VI
AFFIRMATIVE COVENANTS
So long as any Bank shall have any Commitment hereunder, the Swingline
Bank shall have any Swingline Commitment, or any Note shall remain unpaid, the
Company will unless the Majority Banks waive compliance in writing:
6.01 Compliance with Laws Etc. Comply and cause each of its
Subsidiaries to comply in all material respects with all applicable laws,
rules, regulations and orders, including compliance with the requirements of
ERISA and Environmental Protection Statutes and the payment and discharge
before delinquency of all taxes, assessments and governmental charges or
levies imposed upon the Company or any of its Subsidiaries or any property of
the Company or any of its Subsidiaries, in each case to the extent that the
failure to comply, pay or discharge would have a material adverse effect on
the Company and its Subsidiaries taken as a whole; provided that neither the
Company nor any Subsidiary of the Company shall be required to pay any such
tax, assessment, charge or levy or comply with any requirement which is being
contested in good faith and adequately reserved against to the extent required
by GAAP.
6.02 Reporting Requirements. Furnish to the Agent and each of the
Banks:
(a) promptly after the filing or sending thereof and in any
event not later than 115 days after the end of each fiscal year, a copy of the
Company's annual report which it sends to its public security holders and a
copy of the Company's report on Form 10-K which the Company files with the SEC
for such year together with a duly-completed Compliance Certificate;
(b) promptly after the filing thereof, and in any event within
60 days after the end of each of the first three fiscal quarters during each
fiscal year, the Company's report on Form 10-Q which the Company files with
the SEC for such quarter together with a duly completed Compliance Certificate;
(c) promptly, but in any event within five days after a
Responsible Officer of the Company has obtained knowledge thereof, a notice of
each Default or Event of Default, together with a statement of a Responsible
Officer setting forth the details of such Default or Event of Default and the
actions which the Company has taken and proposes to take with respect thereto;
(d) promptly after the filing thereof, copies of each of the
reports on Form 8-K and each Schedule 13D (and any amendment thereto), if any,
which the Company files with the SEC;
(e) promptly upon any Responsible Officer becoming aware thereof,
notice of any transaction or event that is, or is reasonably anticipated to
result in, a Specified Transaction or a Change in Control as to the Company;
(f) promptly upon such date becoming reasonably determinable by
any Responsible Officer (but no later than two Business Days after the
effective date of any Specified Transaction or Change in Control), notice of
the effective date of any Specified Transaction or Change in Control as to the
Company; and
(g) such other information respecting the condition or
operations, financial or otherwise, of the Company and its Subsidiaries as any
Bank through the Agent may from time to time reasonably request.
6.03 Use of Proceeds. Use the proceeds of the Loans for general
corporate purposes, including to backstop the Company's commercial paper
program.
6.04 Maintenance of Insurance. Maintain, and cause each of its
Restricted Subsidiaries to maintain, insurance with responsible and reputable
insurance companies or associations in such amounts and covering such risks as
are usually carried by companies engaged in similar businesses and owning
similar properties in the same general areas in which the Company and its
Restricted Subsidiaries operate, provided that the Company and its Restricted
Subsidiaries may self-insure to the extent and in the manner normal for
companies of like size, type and financial condition. The Company may
maintain its Restricted Subsidiaries' insurance on behalf of them.
6.05 Corporate Existence Etc. Preserve and maintain, and cause each of
its Restricted Subsidiaries to preserve and maintain, its corporate existence,
rights and franchises; provided, however, that no Event of Default shall arise
under this Section 6.05 as a result of any Specified Transaction if any
prepayment required under Section 2.09(c) is timely made, or as a result of
the termination of existence, rights and franchises of any Restricted
Subsidiary pursuant to any merger or consolidation to which such Restricted
Subsidiary is a party, and provided, further, that the Company or any
Restricted Subsidiary shall not be required to preserve any right or franchise
if the Company or such Restricted Subsidiary shall determine that the
preservation thereof is no longer desirable in the conduct of the business of
the Company or such Restricted Subsidiary, as the case may be, and that the
loss thereof is not disadvantageous in any material respect to the Banks.
6.06 Visitation Rights. From time to time and so long as any visit or
inspection will not unreasonably interfere with the operations of the Company
and its Restricted Subsidiaries, upon reasonable notice, permit the Agent and
any Bank or any agents or representatives thereof to examine the financial
records and books of account of, and visit and inspect the properties of, the
Company and any such Restricted Subsidiary, and to discuss the affairs,
finances and accounts of the Company and any such Restricted Subsidiary with
any of their respective officers or directors.
ARTICLE VII
NEGATIVE COVENANTS
So long as any Bank shall have any Commitment hereunder, the Swingline
Bank shall have any Swingline Commitment, or any Note shall remain unpaid, the
Company will not, unless the Majority Banks waive compliance in writing:
7.01 Consolidated Tangible Net Worth. Have Consolidated Tangible Net
Worth of less than $3,100,000,000.
7.02 Liens. Fail to perform and observe any term, covenant or
agreement contained in Section 3.7 of the Senior Debt Indenture (as modified
for purposes hereof as set forth in the proviso to the next sentence hereof).
For the purposes of this Section 7.02, Section 3.7 and the definitions of all
terms defined in the Senior Debt Indenture and used in or otherwise applicable
to such Section 3.7 are hereby incorporated in this Agreement by reference as
if such provisions and definitions were set forth in full herein; provided,
however, that solely for the purposes of this Section 7.02 the word
"Securities" as used in the Senior Debt Indenture shall mean the Notes, the
phrase "this Section 3.7" used therein shall mean this Section 7.02, and the
word "Issuer" used therein shall mean the Company.
ARTICLE VIII
EVENTS OF DEFAULT
8.01 Event of Default. Any of the following shall constitute an "Event
of Default":
(a) Non-Payment. The Company fails to pay, (i) any principal on
any Note when such principal is due and payable, (ii) any interest on any Note
within five days after such interest becomes due and payable, or (iii) the
commitment fee set forth in Section 2.12 within 15 days after such commitment
fee becomes due and payable; or
(b) Representation or Warranty. Any representation or warranty
made by the Company or any Responsible Officer (including representations and
warranties deemed made pursuant to Section 4.02 hereof) under or in connection
with any Loan Document is incorrect in any material respect on or as of the
date made or deemed made; or
(c) Specific Defaults. The Company fails to perform or observe
any term, covenant or agreement contained in any of Sections 6.02(c), 6.02(e),
6.02(f), 7.01 or 7.02; or
(d) Other Defaults. The Company fails to perform or observe any
other term or covenant contained in this Agreement, and such default shall
continue unremedied for a period of 30 days after written notice thereof is
given to the Company by the Agent at the request of any Bank; or
(e) Cross-Default. The Company or any Restricted Subsidiary (i)
fails to make any payment of principal of or premium or interest on (A) any
Debt outstanding under the 5-Year Credit Agreement, or (B) any Debt (other
than Debt described in clause (iv) of the definition of Debt) which is
outstanding in the principal amount of at least $100,000,000 in the aggregate
of the Company or such Restricted Subsidiary (as the case may be), when such
payment in respect of Debt described in clause (A) or (B) becomes due and
payable (whether by scheduled maturity, required prepayment, acceleration,
demand, or otherwise), and such failure continues after the applicable grace
or notice period, if any, in effect on the date of such failure, event or
condition in the agreement or instrument relating to any such Debt; or (ii)
fails to perform or observe any other condition or covenant, or any other
event shall occur or condition exist, under any agreement or instrument
relating to any such Debt (other than Debt described in clause (iv) of the
definition of Debt) and such failure continues after the applicable grace or
notice period in effect on the date of such failure, event or condition, if
any, if the effect of such failure, event or condition is to cause any such
Debt to be declared to be due and payable prior to its stated maturity; or
(f) Insolvency; Voluntary Proceedings. The Company or any
Restricted Subsidiary (i) generally fails to pay, or admits in writing its
inability to pay, its debts as they become due, subject to applicable grace
periods, if any, whether at stated maturity or otherwise; (ii) commences any
Insolvency Proceeding with respect to itself; or (iii) takes any corporate
action to effectuate or authorize any of the foregoing; or
(g) Involuntary Proceedings. Any involuntary Insolvency
Proceeding is commenced or filed against the Company or any Restricted
Subsidiary, and such Involuntary Proceeding is not released, vacated or stayed
within 60 days after the commencement or filing thereof; or
(h) Judgments. Any judgment or order for the payment of money
in excess of $50,000,000 shall be rendered against the Company and remain
unsatisfied and either (i) enforcement proceedings shall have been commenced
by any creditor upon such judgment or order or (ii) there shall be any period
of 60 consecutive days during which a stay of enforcement of such judgment or
order, by reason of a pending appeal or otherwise, shall not be in effect.
8.02 Remedies. If any Event of Default shall occur and be continuing,
the Agent shall, at the request of, or may, with the consent of, the Majority
Banks, (a) by notice to the Company, declare the obligation of each Bank to
make Loans, including the obligation of the Swingline Bank to make Swingline
Loans, be terminated, whereupon such obligations shall be terminated; (b) by
notice to the Company, declare the unpaid principal amount of all outstanding
Loans, all interest accrued and unpaid thereon, and all other amounts owing or
payable hereunder or under any other Loan Document, to be immediately due and
payable, without presentment, demand, protest or other notice of any kind, all
of which are hereby expressly waived by the Company; and (c) exercise on
behalf of itself and the Banks all other rights and remedies available to it
and the Banks under the Loan Documents or applicable law; provided, however,
that upon the occurrence of any event specified in subsection (f) or (g) of
Section 8.01 (in the case of subsection (g) upon the expiration of the 60-day
period mentioned therein), the obligation of each Bank to make Loans,
including the obligation of the Swingline Bank to make Swingline Loans, shall
automatically terminate and the unpaid principal amount of all outstanding
Loans and all interest and other amounts as aforesaid shall automatically
become due and payable without further act of the Agent or any Bank.
8.03 Rights Not Exclusive. The rights provided for in this Agreement
and the other Loan Documents are cumulative and are not exclusive of any other
rights, powers, privileges or remedies provided by law or in equity.
ARTICLE IX
THE AGENT
9.01 Appointment and Authorization. Each Bank hereby irrevocably
appoints, designates and authorizes the Agent to take such action on its
behalf under the provisions of this Agreement and each other Loan Document and
to exercise such powers and perform such duties as are expressly delegated to
it by the terms of this Agreement or any other Loan Document, together with
such powers as are reasonably incidental thereto. Notwithstanding any
provision to the contrary contained elsewhere in this Agreement or in any
other Loan Document, the Agent shall not have any duties or responsibilities,
except those expressly set forth herein, nor shall the Agent have or be deemed
to have any fiduciary relationship with any Bank, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into this Agreement or any other Loan Document or otherwise exist against the
Agent.
9.02 Delegation of Duties. The Agent may execute any of its duties
under this Agreement or any other Loan Document by or through agents,
employees or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Agent shall not be
responsible for the negligence or misconduct of any agent or attorney-in-fact
that it selects with reasonable care.
9.03 Liability of Agent. None of the Agent-Related Persons shall (i)
be liable for any action taken or omitted to be taken by any of them under or
in connection with this Agreement or any other Loan Document or the
transactions contemplated hereby (except for its own gross negligence or
willful misconduct), or (ii) be responsible in any manner to any of the Banks
for any recital, statement, representation or warranty made by the Company or
any Subsidiary or Affiliate of the Company, or any officer thereof, contained
in this Agreement or in any other Loan Document, or in any certificate,
report, statement or other document referred to or provided for in, or
received by the Agent under or in connection with, this Agreement or any other
Loan Document, or the validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any other Loan Document, or for any failure
of the Company or any other party to any Loan Document to perform its
obligations hereunder or thereunder. No Agent-Related Person shall be under
any obligation to any Bank to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or any other Loan Document, or to inspect the properties, books or
records of the Company or any of the Company's Subsidiaries or Affiliates.
9.04 Reliance by Agent. (a) The Agent shall be entitled to rely, and
shall be fully protected in relying, upon any writing, resolution, notice,
consent, certificate, affidavit, letter, telegram, facsimile, telex or
telephone message, statement or other document or conversation believed by it
to be genuine and correct and to have been signed, sent or made by the proper
Person or Persons, and upon advice and statements of legal counsel (including
counsel to the Company), independent accountants and other experts selected by
the Agent. The Agent shall be fully justified in failing or refusing to take
any action under this Agreement or any other Loan Document unless it shall
first receive such advice or concurrence of the Majority Banks as it deems
appropriate and, if it so requests, it shall first be indemnified to its
satisfaction by the Banks against any and all liability and expense which may
be incurred by it by reason of taking or continuing to take any such action.
The Agent shall in all cases be fully protected in acting, or in refraining
from acting, under this Agreement or any other Loan Document in accordance
with a request or consent of the Majority Banks or all of the Banks if
required by Section 10.01 and such request and any action taken or failure to
act pursuant thereto shall be binding upon all of the Banks.
(b) For purposes of determining compliance with the conditions
specified in Section 4.01, each Bank that has executed this Agreement shall be
deemed to have consented to, approved or accepted or to be satisfied with,
each document or other matter either sent by the Agent to such Bank for
consent, approval, acceptance or satisfaction, or required thereunder to be
consented to or approved by or acceptable or satisfactory to the Bank.
9.05 Notice of Default. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default,
except with respect to defaults in the payment of principal, interest and fees
required to be paid to the Agent for the account of the Banks, unless the
Agent shall have received written notice from a Bank or the Company referring
to this Agreement, describing such Default or Event of Default and stating
that such notice is a "notice of default". The Agent will notify the Banks of
its receipt of any such notice. The Agent shall take such action with respect
to such Default or Event of Default as may be requested by the Majority Banks
in accordance with Article VIII; provided, however, that unless and until the
Agent has received any such request, the Agent may (but shall not be obligated
to) take such action, or refrain from taking such action, with respect to such
Default or Event of Default as it shall deem advisable or in the best interest
of the Banks.
9.06 Credit Decision. Each Bank acknowledges that none of the
Agent-Related Persons has made any representation or warranty to it, and that
no act by the Agent hereinafter taken, including any review of the affairs of
the Company and its Subsidiaries, shall be deemed to constitute any
representation or warranty by any Agent-Related Person to any Bank. Each Bank
represents to the Agent that it has, independently and without reliance upon
any Agent-Related Person and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, prospects, operations, property, financial and other condition and
creditworthiness of the Company and its Subsidiaries, and all applicable bank
regulatory laws relating to the transactions contemplated hereby, and made its
own decision to enter into this Agreement and to extend credit to the Company
hereunder. Each Bank also represents that it will, independently and without
reliance upon any Agent-Related Person and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Agreement and the other Loan Documents, and to make such investigations
as it deems necessary to inform itself as to the business, prospects,
operations, property, financial and other condition and creditworthiness of
the Company. Except for notices, reports and other documents expressly herein
required to be furnished to the Banks by the Agent, the Agent shall not have
any duty or responsibility to provide any Bank with any credit or other
information concerning the business, prospects, operations, property,
financial and other condition or creditworthiness of the Company which may
come into the possession of any of the Agent-Related Persons.
9.07 Indemnification. Whether or not the transactions contemplated
hereby are consummated, the Banks shall indemnify upon demand the
Agent-Related Persons (to the extent not reimbursed by or on behalf of the
Company and without limiting the obligation of the Company to do so), pro
rata, from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever which may be imposed on, incurred by, or asserted
against the Agent-Related Persons in any way relating to or arising out of the
Loan Documents or any action taken or omitted by an Agent-Related Person,
provided, however, that no Bank shall be liable for the payment to the
Agent-Related Persons of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from such Person's gross negligence or willful
misconduct. IT IS THE INTENTION OF THE BANKS THAT EACH AGENT-RELATED PERSON
SHALL, TO THE EXTENT PROVIDED IN THIS SECTION 9.07, BE INDEMNIFIED FOR ITS
ORDINARY, SOLE OR CONTRIBUTORY NEGLIGENCE. Without limitation of the
foregoing, each Bank shall reimburse the Agent upon demand for its ratable
share of any costs or out-of-pocket expenses (including Attorney Costs)
incurred by the Agent in connection with the preparation, execution, delivery,
administration, modification, amendment or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in respect
of rights or responsibilities under, this Agreement, any other Loan Document,
or any document contemplated by or referred to herein, to the extent that the
Agent is not reimbursed for such expenses by or on behalf of the Company. The
undertaking in this Section shall survive the payment of all Obligations
hereunder and the resignation or replacement of the Agent.
9.08 Agent in Individual Capacity. The Bank serving as Agent and its
Affiliates may make loans to, issue letters of credit for the account of,
accept deposits from, acquire equity interests in and generally engage in any
kind of banking, trust, financial advisory, underwriting or other business
with the Company and its Subsidiaries and Affiliates as though the Bank
serving as Agent were not the Agent hereunder and without notice to or consent
of the Banks. The Banks acknowledge that, pursuant to such activities, the
Bank serving as Agent or its Affiliates may receive information regarding the
Company or its Affiliates (including information that may be subject to
confidentiality obligations in favor of the Company or such Subsidiary) and
acknowledge that the Agent shall be under no obligation to provide such
information to them. With respect to its Loans, the Bank serving as Agent
shall have the same rights and powers under this Agreement as any other Bank
and may exercise the same as though it were not the Agent, and the terms
"Bank" and "Banks" include the Bank serving as Agent in its individual
capacity.
9.09 Successor Agent. The Agent may, and at the request of the
Majority Banks shall, resign as Agent upon 30 days' prior written notice to
the Banks and the Company. If the Agent resigns under this Agreement, the
Majority Banks shall appoint from among the Banks a successor agent for the
Banks which successor agent shall be subject to approval by the Company. If
no successor agent is appointed prior to the effective date of the resignation
of the Agent, the Agent may appoint, after consulting with the Banks and the
Company, a successor agent from among the Banks. Upon the acceptance of its
appointment as successor agent hereunder, such successor agent shall succeed
to all the rights, powers and duties of the retiring Agent and the term
"Agent" shall mean such successor agent and the retiring Agent's appointment,
powers and duties as Agent shall be terminated. After any retiring Agent's
resignation hereunder as Agent, the provisions of this Article IX and Sections
3.01, 10.04 and 10.05 shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Agent under this Agreement. If no
successor agent has accepted appointment as Agent by the date which is 30 days
following a retiring Agent's notice of resignation, the retiring Agent's
resignation shall nevertheless thereupon become effective and the Banks shall
perform all of the duties of the Agent hereunder and under any other Loan
Document until such time, if any, as the Majority Banks appoint a successor
agent as provided for above. Notwithstanding the foregoing, however, BofA may
not be removed as the Agent at the request of the Majority Banks unless BofA
shall also simultaneously be replaced as Swingline Bank hereunder pursuant to
documentation in form and substance reasonably satisfactory to BofA.
9.10 Withholding Tax. (a) If any Bank is a foreign corporation,
foreign partnership or foreign trust within the meaning of the Code and such
Bank claims exemption from, or a reduction of, United States withholding tax
under Sections 1441 or 1442 of the Code, such Bank agrees with and in favor of
the Agent, to deliver to the Agent:
(i) if such Bank claims an exemption from, or a reduction
of, withholding tax under a United States tax treaty, two properly
completed and executed IRS Forms 1001 and W-8 at least 30 days before
the payment of any interest is due in the first calendar year and at
least 30 days before the payment of any interest in each third
succeeding calendar year during which interest may be paid under this
Agreement;
(ii) if such Bank claims that interest paid under this
Agreement is exempt from United States withholding tax because it is
effectively connected with a United States trade or business of such
Bank, two properly completed and executed copies of IRS Form 4224 at
least 30 days before the payment of any interest is due in the first
taxable year of such Bank and in each succeeding taxable year of such
Bank during which interest may be paid under this Agreement; and
(iii) such other form or forms as may be required under the
Code or other laws of the United States as a condition to exemption
from, or reduction of, United States withholding tax.
The Agent shall deliver one copy of each such form to the Company.
Such Bank agrees to promptly notify the Agent of any change in circumstances
which would modify or render invalid any claimed exemption or reduction.
(b) If any Bank claims exemption from, or reduction of,
withholding tax under a United States tax treaty by providing IRS Form 1001
and such Bank sells, assigns, grants a participation in, or otherwise
transfers all or part of the Obligations of the Company to such Bank, such
Bank agrees to notify the Agent (which in turn shall notify the Company) of the
percentage amount in which it is no longer the beneficial owner of Obligations
of the Company to such Bank. To the extent of such percentage amount, the
Agent (and the Company) will treat such Bank's IRS Form 1001 as no longer
valid.
(c) If any Bank claiming exemption from United States
withholding tax by filing IRS Form 4224 with the Agent sells, assigns, grants
a participation in, or otherwise transfers all or part of the Obligations of
the Company to such Bank, such Bank agrees to notify the Agent (which in turn
shall notify the Company) of the percentage amount in which it is no longer
the beneficial owner of Obligations of the Company to such Bank. To the
extent of such percentage amount, the Agent (and the Company) will treat such
Bank's Form 4224 as no longer valid.
(d) If any Bank is entitled to a reduction in the applicable
withholding tax, the Agent may withhold from any interest payment to such Bank
an amount equivalent to the applicable withholding tax after taking into
account such reduction. If the forms or other documentation required by
subsection (a) of this Section are not delivered to the Agent, then the Agent
may withhold from any interest payment to such Bank not providing such forms
or other documentation an amount equivalent to the applicable withholding tax
(without taking into account such reduction).
(e) If the IRS or any other Governmental Authority of the United
States or other jurisdiction asserts a claim that the Agent did not properly
withhold tax from amounts paid to or for the account of any Bank (because the
appropriate form was not delivered, was not properly executed, or because such
Bank failed to notify the Agent of a change in circumstances which rendered
the exemption from, or reduction of, withholding tax ineffective, or for any
other reason) such Bank shall indemnify the Agent fully for all amounts paid,
directly or indirectly, by the Agent as tax or otherwise, including penalties
and interest, and including any taxes imposed by any jurisdiction on the
amounts payable to the Agent under this Section, together with all costs and
expenses (including Attorney Costs). The obligation of the Banks under this
subsection shall survive the payment of all Obligations and the resignation or
replacement of the Agent.
9.11 Co-Agent. Any Bank identified on the facing page and signature
page of this Agreement as "co-agent" shall have no right, power, obligation,
liability, responsibility or duty under this Agreement other than those
applicable to all Banks as such. Each Bank acknowledges that it has not
relied, and will not rely, on any Bank so identified in deciding to enter into
this Agreement or in taking or not taking action hereunder.
ARTICLE X
MISCELLANEOUS
10.01 Amendments and Waivers. No amendment or waiver of any provision
of this Agreement or any other Loan Document, and no consent with respect to
any departure by the Company therefrom, shall be effective unless the same
shall be in writing and signed by the Majority Banks and acknowledged by the
Agent, and then such waiver shall be effective only in the specific instance
and for the specific purpose for which given; provided, however, that no such
waiver, amendment, or consent shall, unless in writing and signed by all the
Banks and acknowledged by the Agent, do any of the following:
(a) increase or extend the Commitment of any Bank (except as
provided in Section 2.06) or reinstate any Commitment terminated pursuant to
Section 8.02 or subsections (b) or (c) of Section 2.09;
(b) postpone or delay any date fixed for any payment of
principal, interest or fees due to the Banks (or any of them) hereunder or
under any Loan Document;
(c) reduce the principal of, or the rate of interest specified
herein on any Revolving Loan, or any fees payable hereunder or under any other
Loan Document;
(d) change the percentage of the Commitments or of the aggregate
unpaid principal amount of the Notes which is required for the Banks or any of
them to take any action hereunder; or
(e) amend this Section or any provision herein providing for
consent or other action by all Banks;
and, provided further, that (i) no amendment, waiver or consent shall, unless
in writing and signed by the Agent in addition to the Majority Banks or all
the Banks, as the case may be, affect the rights or duties of the Agent under
this Agreement or any other Loan Document, and (ii) no amendment, waiver or
consent shall, unless in writing and signed by the Swingline Bank in addition
to the Majority Banks or all the Banks, as the case may be, affect the rights
or duties of the Swingline Bank under this Agreement or any other Loan
Document.
10.02 Notices. (a) All notices, requests and other communications shall
be in writing (including, unless the context expressly otherwise provides, by
telecopier transmission, provided that any matter transmitted by telecopier
shall be immediately preceded or confirmed by a telephone call to the
recipient at the number specified on the applicable signature page hereof),
and mailed, telecopied or delivered, to the address or telecopier number
specified for notices on Schedule 10.02; or, as directed to the Company or the
Agent, to such other address as shall be designated by such party in a written
notice to the other parties, and as directed to any other party, at such other
address as shall be designated by such party in a written notice to the
Company and the Agent.
(b) All such notices, requests and communications shall be
effective, if sent by overnight courier, one Business Day after delivery to
the courier company; if sent by telecopier, when received in legible form by
the receiving telecopier equipment; if mailed, upon the second Business Day
after the date deposited into the U.S. mail; or if delivered, upon delivery;
provided that (i) notices pursuant to Article II or IX shall not be effective
until actually received by the Agent, and (ii) telecopied notices received by
any party after its normal business hours (or on a day other than a Business
Day) shall be effective on the next Business Day.
(c) Any agreement of the Agent and the Banks herein to receive
certain notices by telephone or facsimile is solely for the convenience and at
the request of the Company. The Agent and the Banks shall be entitled to rely
on the authority of any Person purporting to be a Person authorized by the
Company to give such notice and the Agent and the Banks shall not have any
liability to the Company or other Person on account of any action taken or not
taken by the Agent or the Banks in reliance upon such telephonic or facsimile
notice. The obligation of the Company to repay the Loans shall not be
affected in any way or to any extent by any failure by the Agent and the Banks
to receive written confirmation of any telephonic or facsimile notice or the
receipt by the Agent and the Banks of a confirmation which is at variance with
the terms understood by the Agent and the Banks to be contained in the
telephonic or facsimile notice.
10.03 No Waiver: Cumulative Remedies. No failure to exercise and no
delay in exercising, on the part of the Agent or any Bank, any right, remedy,
power or privilege hereunder, shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, remedy, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege.
10.04 Costs and Expenses. The Company shall:
(a) whether or not the transactions contemplated hereby are
consummated, pay for all reasonable costs and expenses incurred by the Agent
in connection with the preparation, delivery, administration and execution of,
and any amendment, supplement, waiver or modification to (in each case,
whether or not consummated), this Agreement, any Loan Document and any other
documents prepared in connection herewith or therewith, and the consummation
of the transactions contemplated hereby and thereby; limited, however, in the
case of the preparation, execution and delivery of the Loan Documents, to the
reasonable Attorney Costs of one law firm and, to the extent not duplicative,
internal counsel, for the Agent as more fully provided in a letter agreement
between the Company and the Agent; and
(b) pay or reimburse the Agent and each Bank within five
Business Days after demand for all costs and expenses (including reasonable
Attorney Costs) incurred by them in connection with the enforcement, attempted
enforcement, or preservation of any rights or remedies under this Agreement or
any other Loan Document during the existence of an Event of Default or after
acceleration of the Loans (including in connection with any "workout" or
restructuring regarding the Loans, and including in any Insolvency Proceeding
or appellate proceeding).
10.05 Indemnity. The Company agrees, to the fullest extent permitted by
law, to indemnify and hold harmless the Agent-Related Persons, and each Bank
and its respective directors, officers, employees and agents, from and against
any and all claims, damages, liabilities and expenses (including, without
limitation, reasonable Attorney Costs) for which any of them may become liable
or which may be incurred by or asserted against the Agent-Related Persons, or
such Bank or any such director, officer, employee or agent (other than by
another Bank or any successor or assign of another Bank), in each case in
connection with or arising out of or by reason of any investigation,
litigation, or proceeding, whether or not the Agent or such Bank or any such
director, officer, employee or agent is a party thereto, arising out of,
related to or in connection with any Loan Document or any transaction in which
any proceeds of all or any part of the Loans are applied, EXPRESSLY INCLUDING
ANY SUCH CLAIM, DAMAGE, LIABILITY OR EXPENSE ARISING OUT OF THE ORDINARY, SOLE
OR CONTRIBUTORY NEGLIGENCE OF SUCH INDEMNIFIED PERSON (but excluding any such
claim, damage, liability or expense to the extent attributable to the gross
negligence or willful misconduct of, or violation of any law or regulation by,
any such indemnified Person). The undertaking in this Section shall survive
the payment of all Obligations hereunder.
10.06 Payments Set Aside. To the extent that the Company makes a
payment to the Agent or the Banks, or the Agent or the Banks exercise their
right of set-off, and such payment or the proceeds of such set-off or any part
thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside or required (including pursuant to any settlement
entered into by the Agent or such Bank in its discretion) to be repaid to a
trustee, receiver or any other party, in connection with any Insolvency
Proceeding or otherwise, then (a) to the extent of such recovery the
obligation or part thereof originally intended to be satisfied shall be
revived and continued in full force and effect as if such payment had not been
made or such set-off had not occurred, and (b) each Bank severally agrees to
pay to the Agent upon demand its pro rata or other applicable share of any
amount so recovered from or repaid by the Agent.
10.07 Binding Effect; Assignments; Participations. (a) This Agreement
shall become effective when it shall have been executed by the Company and the
Agent and when the Agent shall have, as to each Bank, received a copy
(including one transmitted by telecopier) of a signature page hereof executed
by such Bank and thereafter shall be binding upon and inure to the benefit of
and be enforceable by the Company, the Agent and each Bank and their respective
successors and assignees, subject to Section 10.07(e) and except that the
Company shall not have the right to assign its rights or obligations hereunder
or any interest herein without the prior written consent of the Banks (other
than an assignment effectuated by operation of law pursuant to a Specified
Transaction).
(b) Each Bank may grant participations to one or more commercial
banks or other Persons, in each case in accordance with applicable law, in or
to all or any part of, the Loans owing to, or the Commitment of, such Bank and
the Note held by such Bank subject to Section 10.07(e), and to the extent of
any such participation (unless otherwise stated therein) the purchaser of such
participation shall, to the fullest extent permitted by law, have the same
rights to payment hereunder and under such Loan and Note as it would have if
it were such Bank hereunder, provided that (x) the originating Bank's
obligations under this Agreement, including, without limitation, its
commitment to make loans to the Company hereunder, shall remain unchanged,
such Bank shall remain solely responsible for the performance thereof, such
Bank shall remain the holder of any such Note for all purposes under this
Agreement, and the Company, the other Banks and the Agent shall continue to
deal solely and directly with such Bank in connection with such Bank's rights
and obligations under this Agreement; (y) no such participant shall be
entitled to receive any greater payment pursuant to Sections 3.01, 3.03 and
3.05 hereof than such Bank would have been entitled to receive with respect to
the rights assigned except as a result of circumstances arising after the date
of such participation to the extent that such circumstances affect other Banks
and participants generally; and (z) no Bank shall grant a participation that
conveys to the participant the right to vote or consent under this Agreement,
other than the right to vote upon or consent to (i) any increase in the amount
of such Bank's Commitment; (ii) any reduction of the principal amount of, or
interest to be paid on, such Bank's Loan or Note; (iii) any reduction of the
commitment fee; or (iv) any postponement of the due date in respect of any
amounts owed to such Bank under any Loan Document.
(c) In accordance with applicable law, any Bank may assign a
portion, in an amount of at least $10,000,000 of its Commitment, together with
a ratable portion of its Loans and other rights and obligations hereunder to
an Eligible Assignee, with the prior written consents of the Agent and (unless
there has occurred and is continuing an Event of Default) the Company, which
consents shall not be unreasonably withheld, subject to Section 10.07(e);
provided, however, that neither the Company's nor the Agent's consent shall be
required for, and the minimum amount for assignment shall not apply to, any
assignment to an Eligible Assignee which already is a Bank party to this
Agreement. In connection with the assignment by the Swingline Bank of all of
its Commitment and Loans hereunder, the Swingline Commitment and Swingline
Loans shall be included as part of the assignment transaction. Each such
Eligible Assignee to which an assignment has been made pursuant to this
Section 10.07(c) which is not already a Bank shall become a party to this
Agreement as a Bank by executing and delivering to the Agent an amendment to
this Agreement or a supplemental agreement with the assigning Bank, which
amendment or supplemental agreement shall be in form and substance reasonably
satisfactory to the Agent and shall (among other matters) specify the CD
Lending Office, Domestic Lending Office and Eurodollar Lending Office of such
Eligible Assignee, provided that, in the case of each such assignment, (i) at
such time the signature pages to this Agreement shall be deemed to be modified
to reflect the Commitments of such assignee Bank and of the existing Banks,
(ii) the Company shall issue new Notes to such assignee Bank and to the
assigning Bank to reflect the revised Commitments and (iii) the Agent shall
receive at the time of such assignment, from the assigning or assignee Bank, a
non-refundable assignment fee of $2,500. To the extent of any assignment
pursuant to this Section 10.07(c), the assigning Bank shall be relieved of its
obligations hereunder with respect to its assigned Commitment.
(d) In addition to the assignments and participations permitted
under Section 10.07(b) and (c), any Bank may at any time create a security
interest in, or pledge, all or any portion of its rights under this Agreement
and the Notes held by it in favor of any Federal Reserve Bank in accordance
with Regulation A of the FRB, and such Federal Reserve Bank may enforce such
pledge or security interest in any manner permitted under applicable law.
(e) Unless an Event of Default has occurred and is continuing,
no assignments or participations shall result in a Bank (together with its
Affiliates) holding Commitments, or participations therein, in excess of
$100,000,000 without the prior written consent of the Company.
10.08 Set-off. In addition to any rights and remedies of the Banks
provided by law, if an Event of Default exists or the Loans have been
accelerated, to the fullest extent permitted by applicable law each Bank is
authorized at any time and from time to time, without prior notice to the
Company, any such notice being waived by the Company to the fullest extent
permitted by law, to set off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held by, and other
indebtedness at any time owing by, such Bank to or for the credit or the
account of the Company against any and all Obligations owing to such Bank, now
or hereafter existing, irrespective of whether or not the Agent or such Bank
shall have made demand under this Agreement or any Loan Document and although
such Obligations may be contingent or unmatured. Each Bank agrees promptly to
notify the Company and the Agent after any such set-off and application made
by such Bank; provided, however, that the failure to give such notice shall
not affect the validity of such set-off and application.
10.09 Interest. (a) It is the intention of the parties hereto that the
Agent and each Bank shall conform strictly to usury laws applicable to it, if
any. Accordingly, if the transactions with the Agent or any Bank contemplated
hereby would be usurious under applicable law, if any, then, in that event,
notwithstanding anything to the contrary in this Agreement, the Notes or any
other agreement entered into in connection with this Agreement or the Notes,
it is agreed as follows: (i) the aggregate of all consideration which
constitutes interest under applicable law that is contracted for, taken,
reserved, charged or received by the Agent or such Bank, as the case may be,
under this Agreement, the Notes or under any other agreement entered into in
connection with this Agreement or the Notes shall under no circumstances
exceed the maximum amount allowed by such applicable law and any excess shall
be cancelled automatically and, if theretofore paid, shall be refunded by the
Agent or such Bank, as the case may be, to the Company, and (ii) in the event
that the maturity of any Loan or other obligation payable to the Agent or such
Bank, as the case may be, is accelerated or in the event of any required or
permitted prepayment, then such consideration that constitutes interest under
law applicable to the Agent or such Bank, as the case may be, may never
include more than the maximum amount allowed by such applicable law and excess
interest, if any, to the Agent or such Bank, as the case may be, provided for
in this Agreement or otherwise shall be cancelled automatically as of the date
of such acceleration or prepayment and, if theretofore paid, shall, at the
option of the Agent or such Bank, as the case may be, be credited by the Agent
or such Bank, as the case may be, on the principal amount of the obligations
owed to the Agent or such Bank, as the case may be, by the Company or refunded
by the Agent or such Bank, as the case may be, to the Company. To the extent
that Article 5069-1.04 of the Texas Revised Civil Statutes is relevant to any
Bank for the purposes of determining the Highest Lawful Rate, such Bank hereby
elects to determine the applicable rate ceiling under such Article by the
indicated (weekly) rate ceiling from time to time in effect, subject to such
Bank's right to subsequently change such rate ceiling in accordance with
applicable law. Tex. Rev. Civ. Stat. Ann. art. 5069, ch. 15 (which regulates
certain revolving credit loan accounts and revolving triparty accounts) shall
not apply to this Agreement or the Notes.
(b) In the event that at any time the interest rate applicable
to any Loan made by any Bank would exceed the Highest Lawful Rate, the rate of
interest to accrue on the Loans by such Bank shall be limited to the Highest
Lawful Rate, but shall accrue, to the extent permitted by law, on the
principal amount of the Loans made by such Bank from time to time outstanding,
if any, at the Highest Lawful Rate allowed by applicable law until the total
amount of interest accrued on the Loans made by such Bank equals the amount of
interest which would have accrued if the interest rates applicable to the
Loans pursuant to Article II had at all times been in effect. In the event
that upon the final payment of the Loans made by any Bank and termination of
the Commitment of such Bank, the total amount of interest paid to such Bank
hereunder is less than the total amount of interest which would have accrued
if the interest rates applicable to such Loans pursuant to Article II had at
all times been in effect, then the Company agrees to pay to such Bank, to the
extent permitted by law, an amount equal to the excess of (a) the lesser of
(i) the amount of interest which would have accrued on such Loans if the
Highest Lawful Rate had at all times been in-effect or (ii) the amount of
interest which would have accrued if the interest rates applicable to such
Loans pursuant to Article II had at all times been in effect over (b) the
amount of interest otherwise accrued on such Loans in accordance with this
Agreement.
10.10 Confidentiality. (a) Each Bank and the Agent acknowledge that
certain confidential and proprietary information of the Company (the
"Information") is a valuable, special, and a unique asset of the Company.
Each Bank and the Agent agree that they will use the care specified below to
keep all Information in confidence, and will not use any Information except as
provided in this Section, or disclose any portion of the Information to any
third party without the prior written consent of the Company except as
provided in this Section. Each Bank and the Agent covenant to use the care
specified below to not disclose such Information on behalf of itself, its
officers, directors, agents, employees, and affiliates. Each Bank and the
Agent shall use the same degree of care to protect the confidentiality of all
Information as such Bank or the Agent, as the case may be, uses to protect its
own confidential and proprietary information (which it does not wish to have
published or disseminated).
(b) Information provided by the Company to any Bank or the
Agent, which the Company in good faith regards as Information hereunder shall
be clearly marked by the Company as "Confidential," "Proprietary," or bear any
other appropriate notice indicating the sensitive nature of the Information.
Any tangible Information not easily markable shall be transmitted by the
Company to such Bank or the Agent under cover of written letter which clearly
identifies the Information and designates it as confidential "Information".
All information conveyed to such Bank or the Agent orally relating to plans,
forecasts, products or other non-public information shall be deemed
confidential "Information".
(c) If any Bank or the Agent is confronted with legal action to
disclose Information received under this Agreement or otherwise makes
disclosures of confidential information under clauses (ii), (iii) or (iv) of
Section 10.10(e) (other than any disclosure to a regulatory authority pursuant
to an examination of the books, records or affairs of such Bank or Agent),
such Bank or the Agent, as the case may be, shall (to the extent permitted by
applicable law) promptly notify the Company.
(d) All Information disclosed or furnished under this Agreement
shall remain the property of the Company. At the Company's request, the
Information in tangible form shall be promptly returned or destroyed, together
with all copies thereof unless such return or destruction is contrary to law,
regulation, legal process, administrative order, or administrative request
having, or deemed to have, the force of law. Upon request, the appropriate
Bank or the Agent, as the case may be, shall provide written certification of
the destruction.
(e) Notwithstanding the foregoing, each Bank and the Agent may
disclose Information (i) as has become generally available to the public, (ii)
as may be required or appropriate in any report, statement or testimony
submitted to any municipal, state or Federal regulatory body having or
claiming to have jurisdiction over such Bank or to the FRB, or the FDIC or
similar organizations (whether in the United States or elsewhere), (iii) as
may be required or appropriate in response to any summons or subpoena or in
connection with any litigation, (iv) in order to comply with any law, order,
regulation or ruling applicable to such Bank, (v) to any regulatory authority
pursuant to an examination of the books, records or affairs of any Bank or the
Agent, (vi) to the prospective transferee in connection with any contemplated
transfer of any of the Notes or any interest therein by such Bank, provided,
that such prospective transferee executes an agreement with the Company or the
transferor containing provisions substantially identical to those contained in
this Section, (vii) to the extent reasonably required in connection with any
litigation or proceeding to which the Agent, any Bank or their respective
Affiliates may be party, (viii) to such Bank's independent auditors and other
professional advisors, (ix) to the extent reasonably necessary to disclose in
connection with the exercise of any remedy hereunder and under the Notes, or
(x) as to any Bank, as expressly permitted under the terms of any other
document or agreement regarding confidentiality to which the Company is party
or is deemed party with such Bank.
10.11 Preservation of Certain Matters. Notwithstanding any other term
or provision hereof to the contrary, any entity ceasing to be a "Bank" for
purposes of this Agreement, by virtue of any matter or event contemplated by
Section 2.07, 2.08, 3.06 or 10.07 shall retain any and all rights arising
under Section 10.05, and shall continue to remain responsible to the Agent for
all liabilities under Section 9.07 and Section 9.10 relating to matters
occurring prior to the termination of such entity as a "Bank."
10.12 Notification of Addresses, Lending Offices Etc. Each Bank shall
notify the Agent in writing of any changes in the address to which notices to
the Bank should be directed, of addresses of any Lending Office, of payment
instructions in respect of all payments to be made to it hereunder and of such
other administrative information as the Agent shall reasonably request.
10.13 Counterparts. This Agreement may be executed in any number of
separate counterparts, each of which, when so executed, shall be deemed an
original, and all of said counterparts taken together shall be deemed to
constitute but one and the same agreement.
10.14 Severability. The illegality or unenforceability of any provision
of this Agreement or any instrument or agreement required hereunder shall not
in any way affect or impair the legality or enforceability of the remaining
provisions of this Agreement or any instrument or agreement required hereunder.
10.15 Governing Law; Jurisdiction. (a) THIS AGREEMENT AND THE NOTES
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAW OF
THE STATE OF NEW YORK; PROVIDED THAT THE AGENT AND THE BANKS SHALL RETAIN ALL
RIGHTS ARISING UNDER FEDERAL LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE
OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND
BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE COMPANY, THE AGENT
AND THE BANKS CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-
EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF THE COMPANY, THE AGENT AND
THE BANKS IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE
LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY
NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH
JURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY DOCUMENT RELATED HERETO. THE
COMPANY, THE AGENT AND THE BANKS EACH WAIVES PERSONAL SERVICE OF ANY SUMMONS,
COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY
NEW YORK LAW.
10.16 WAIVER OF JURY TRIAL. THE COMPANY, THE BANKS AND THE AGENT EACH
WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE OTHER
LOAN DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN ANY
ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE
PARTIES AGAINST ANY OTHER PARTY OR ANY AGENT-RELATED PERSON, PARTICIPANT OR
ASSIGNEE, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE.
THE COMPANY, THE BANKS AND THE AGENT EACH AGREE THAT ANY SUCH CLAIM OR CAUSE
OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING
THE FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A
TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION,
COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO
CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR THE OTHER LOAN
DOCUMENTS OR ANY PROVISION HEREOF OR THEREOF. THIS WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS.
10.17 ENTIRE AGREEMENT. THIS WRITTEN AGREEMENT AND THE LOAN DOCUMENTS,
AS DEFINED IN THIS AGREEMENT, REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES
AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.
[REMAINDER OF THIS PAGE LEFT INTENTIONALLY BLANK]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their proper and duly authorized officers as of
the day and year first above written.
COMPAQ COMPUTER CORPORATION
By:__________________________________
Title:_______________________________
BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, as Administrative Agent
By:__________________________________
Commitment: $22,380,952.35 Title:_______________________________
BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, as Swingline Bank and as a
Bank
By:__________________________________
Title:_______________________________
Commitment: $16,666,666.67 NATIONSBANK TEXAS, N.A., as Co-Agent and
as a Bank
By:__________________________________
Title:_______________________________
Commitment: $16,666,666.67 CITIBANK, N.A., as Co-Agent and as a Bank
By:__________________________________
Title:_______________________________
Commitment: $11,428,571.43 ABN AMRO BANK N.V.
By:__________________________________
Title:_______________________________
By:__________________________________
Title:_______________________________
Commitment: $11,428,571.43 BANQUE NATIONALE DE PARIS,
HOUSTON AGENCY
By:__________________________________
Title:_______________________________
Commitment: $11,428,571.43 BANKERS TRUST COMPANY
By:__________________________________
Title:_______________________________
Commitment: $11,428,571.43 CHEMICAL BANK
By:__________________________________
Title:_______________________________
Commitment: $11,428,571.43 COMMERZBANK AG, ATLANTA AGENCY
By:__________________________________
Title:_______________________________
Commitment: $11,428,571.43 DEUTSCHE BANK AG
NEW YORK AND/OR CAYMAN ISLANDS BRANCHES
By:__________________________________
Title:_______________________________
By:__________________________________
Title:_______________________________
Commitment: $11,428,571.43 DRESDNER BANK AG
By:__________________________________
Title:_______________________________
By:__________________________________
Title:_______________________________
Commitment: $11,428,571.43 FIRST INTERSTATE BANK OF TEXAS, N.A.
By:__________________________________
Title:_______________________________
Commitment: $11,428,571.43 THE FIRST NATIONAL BANK OF CHICAGO
By:__________________________________
Title:_______________________________
Commitment: $11,428,571.43 THE FUJI BANK, LIMITED, HOUSTON AGENCY
By:__________________________________
Title:_______________________________
Commitment: $11,428,571.43 PNC BANK, N.A.
By:__________________________________
Title:_______________________________
Commitment: $11,428,571.43 ROYAL BANK OF CANADA
By:__________________________________
Title:_______________________________
Commitment: $11,428,571.43 THE SANWA BANK LIMITED,
DALLAS AGENCY
By:__________________________________
Title:_______________________________
Commitment: $11,428,571.43 SHAWMUT BANK, N.A.
By:__________________________________
Title:_______________________________
Commitment: $11,428,571.43 SOCIETE GENERALE, SOUTHWEST AGENCY
By:__________________________________
Title:_______________________________
Commitment: $11,428,571.43 THE SUMITOMO BANK, LIMITED, HOUSTON AGENCY
By:__________________________________
Title:_______________________________
Commitment: $11,428,571.43 TORONTO DOMINION (TEXAS), INC.
By:__________________________________
Title:_______________________________
EXHIBIT A
NOTICE OF BORROWING
Bank of America National Trust and
Savings Association, as Administrative Agent
Agency Management Services #5596
1455 Market Street, 12th Floor
San Francisco, CA 94103
Attn: Compaq SAO [Date]
Ladies and Gentlemen:
This Notice of Borrowing is delivered pursuant to Section [2.03] [2.05]
of the $250,000,000 Revolving Credit Agreement, dated as of October 31, 1995
(together with all amendments, if any, from time to time made thereto, the
"Credit Agreement"), among Compaq Computer Corporation, a Delaware corporation
(the "Company"), certain Banks parties thereto and Bank of America National
Trust and Savings Association, as administrative agent for such Banks. Unless
otherwise defined herein or the context otherwise requires, terms used herein
have the meanings provided in the Credit Agreement.
The Company hereby irrevocably requests a Borrowing under the Credit
Agreement, and in that connection sets forth below the information relating to
such Borrowing (the "Proposed Borrowing") as required by Section [2.03(a)]
[2.05(a)] of the Credit Agreement:
(i) The Borrowing Date of the Proposed Borrowing is
________________, 199___.
(*)[(ii)The type of Revolving Loans comprising the Proposed
Borrowing is [Base Rate Revolving Loans] [Adjusted CD Rate Revolving
Loans] [LIBOR Revolving Loans].]
(**)[(ii)The type of Swingline Loan comprising the Proposed
Borrowing is a [Base Rate Swingline Loan] [Adjusted CD Rate Swingline
Loan] [LIBO Rate Swingline Loan].]
(iii) The [aggregate] amount of the Proposed Borrowing is
$___________.
(iv) The duration of the Interest Period for each CD Loan or
Offshore Loan made as part of the Proposed Borrowing is _______ (days)
(months).
The undersigned hereby certifies that the following statements are true
on the date hereof, and will be true on the date of the Proposed Borrowing:
(A) the representations and warranties contained in Article V of
the Credit Agreement are true and correct on and as of such Borrowing
Date with the same effect as if made on and as of such Borrowing Date
(except to the extent such representations and warranties expressly
refer to an earlier date, in which case they are true and correct as of
such earlier date); and
(B) no Default or Event of Default exists or shall result from
such Proposed Borrowing.
Very truly yours,
COMPAQ COMPUTER CORPORATION
By:__________________________________
Name:_______________________________
Title:_______________________________
EXHIBIT B
CONVERSION/CONTINUATION NOTICE
Bank of America National Trust and
Savings Association, as Administrative Agent
Agency Management Services #5596
1455 Market Street, 12th Floor
San Francisco, CA 94103
Attn: Compaq SAO [Date]
(*)To be included for a Proposed Borrowing comprised of Revolving Loans.
(**)To be included for a Proposed Borrowing comprised of a Swingline Loan.
Ladies and Gentlemen:
This Conversion/Continuation Notice is delivered pursuant to Section
2.04 of the $250,000,000 Revolving Credit Agreement, dated as of October 31,
1995 (together with all amendments, if any, from time to time made thereto,
the "Credit Agreement"), among Compaq Computer Corporation, a Delaware
corporation (the "Company"), certain Banks parties thereto and Bank of America
National Trust and Savings Association, as administrative agent for such
Banks. Unless otherwise defined herein or the context otherwise requires,
terms used herein have the meanings provided in the Credit Agreement.
The Company hereby requests that on _________ ____, 199__,
(1) $__________ of the presently outstanding principal amount of
the Revolving Loans originally made on ___________, 199__ [and
$______________ of the presently outstanding principal amount of the
Revolving Loans originally made on __________________, 199__],
(2) all presently being maintained as (*)[Adjusted CD Rate
Revolving Loans] [Base Rate Revolving Loans] [LIBOR Revolving Loans],
(3) be [converted into] [continued as],
(4) (**)[Adjusted CD Rate Revolving Loans having as
Interest Period of ___ days] [LIBOR Revolving Loans having an Interest
Period of ___ months] [Base Rate Revolving Loans].
The Company has caused this Conversion/Continuation Notice to be
executed and delivered this _____ day of _____________, 199__.
COMPAQ COMPUTER CORPORATION
By:__________________________________
Name:________________________________
Title:_______________________________
EXHIBIT C
COMPLIANCE CERTIFICATE
This Compliance Certificate is delivered pursuant to Section 6.02 of the
$250,000,000 Revolving Credit Agreement dated as of October 31, 1995 (together
with all amendments, if any, from time to time made thereto, the "Credit
Agreement") among Compaq Computer Corporation, a Delaware corporation (the
"Company"), certain Banks parties thereto and Bank of America National Trust
and Savings Association, as administrative agent for such Banks. Unless
otherwise defined herein or the context otherwise requires, terms used herein
have the meanings provided in the Credit Agreement.
The undersigned certifies, represents and warrants as follows:
(a) The Consolidated Tangible Net Worth of the Company as of
(*)Select appropriate interest rate option.
(**)Unless otherwise agreed, a Revolving Loan cannot be converted into or
continued as an Adjusted CD Rate Revolving Loan or a LIBOR Revolving
Loan with an Interest Period exceeding one month (in the case of a LIBOR
Revolving Loan) or 30 days (in the case of an Adjusted CD Rate Revolving
Loan) during the existence of a Default or Event of Default.
______________, 19__ was $_________________.
[Insert calculation in reasonable detail]
(b) There exists on the date of this Compliance Certificate no
Default or Event of Default under the Credit Agreement.
EXECUTED AND DELIVERED this ____ day of ______________, 199__.
COMPAQ COMPUTER CORPORATION
By:__________________________________
Name:________________________________
Title:_______________________________
EXHIBIT D-1
October 31, 1995
To each of the Banks parties to the
$250,000,000 Revolving Credit Agreement
dated as of October 31, 1995 among
Compaq Computer Corporation, said Banks
and Bank of America National Trust and Savings
Association, as Administrative Agent for such Banks,
and to such Administrative Agent
Re: Compaq Computer Corporation Revolving Credit Agreement
Ladies and Gentlemen:
As Senior Vice President, General Counsel and Secretary of Compaq Computer
Corporation, a Delaware corporation (the "Company"), I am familiar with the
$250,000,000 Revolving Credit Agreement dated as of October 31, 1995 (the
"Credit Agreement") among the Company, the Banks listed on the signature pages
thereof and Bank of America National Trust and Savings Association, as
administrative agent for such Banks (the "Agent"). In such capacity, I am
also familiar with the Certificate of Incorporation and Bylaws of the Company
and the corporate records of the Company. This opinion is being furnished to
you pursuant to Section 4.01(d) of the Credit Agreement. Terms used herein
but not defined herein shall have the same meaning ascribed to such terms in
the Credit Agreement.
Before rendering this opinion, I (or other attorneys with the Company's
legal department acting under my direction) have examined the Credit Agreement
and the Loan Documents, and have examined and relied upon originals or
photostatic or certified copies of such corporate records, certificates of
officers of the Company and of public officials, and such agreements,
documents and instruments, and have made such investigations of law, as I or
such other attorneys have deemed relevant and necessary as the basis for the
opinion hereinafter expressed. In such examination, I or such other attorneys
assumed the genuineness of all signatures (other than signatures of officers
of the Company on the Loan Documents), the authenticity of all documents
submitted to us as originals, and the conformity to original documents of all
documents submitted to us as photostatic or certified copies.
On the basis of the foregoing, I am of the opinion that:
1. The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware,
and has all corporate powers and all governmental licenses,
authorizations, consents and approvals required to carry on its business
as now conducted, except to the extent failure to obtain such licenses,
authorizations, consents or approvals would not materially adversely
affect the business, consolidated financial position or consolidated
results of operations of the Company and its Subsidiaries taken as a
whole.
2. The execution, delivery and performance by the Company of
the Loan Documents are within the Company's corporate powers, have been
duly authorized by all necessary corporate action on the part of the
Company, and do not contravene, or constitute a default under, (a) the
Certificate of Incorporation or Bylaws of the Company, (b) any
contractual restriction contained in any material (meaning for the
purposes of this opinion those creating a monetary liability of
$50,000,000 or more) indenture, loan or credit agreement, receivables
sale or financing agreement, lease financing agreement, capital lease,
mortgage, security agreement, bond or note, or any guaranty of any of such
obligations to which the Company is a party, or, to my knowledge, any
other agreement or instrument to which the Company is a party, or (c) any
judgment, injunction, order or decree known to me to be binding upon the
Company. The execution, delivery and performance by the Company of the
Loan Documents will not result in the creation or imposition of any lien,
security interest or other charge or encumbrance on any asset of the
Company. The Credit Agreement and the Notes have been duly executed and
delivered by the Company.
3. No authorization, approval or other action by, and no notice
to or filing with, any governmental authority or regulatory body is
required to be made or obtained by the Company for the execution,
delivery and performance by the Company of the Loan Documents.
4. None of the execution, delivery or performance by the
Company of the Loan Documents contravenes any provision of law or
regulation (including, without limitation, Regulation X issued by the
FRB) applicable to the Company or of Regulation U issued by the FRB.
5. The Loan Documents constitute the legal, valid and binding
obligations of the Company enforceable against the Company in accordance
with their terms.
6. Except as disclosed in the Company's Form 10-K for the year
ended December 31, 1994, or the Company's Form 10-Q for the quarter ended
June 30, 1995, there is no action, suit or proceeding pending or, to my
knowledge, threatened against the Company or any of its Subsidiaries
before any court or arbitrator or any governmental agency, in which there
is a reasonable possibility of an adverse decision which could materially
adversely affect the consolidated financial condition or operations of the
Company and its Subsidiaries taken as a whole or which in any manner
draws into question the validity of the Credit Agreement or any other
Loan Document.
7. Neither the Company nor any Subsidiary is an "investment
company" or a company "controlled" by an "investment company" within the
meaning of the Investment Company Act of 1940, as amended.
8. Neither the Company nor any Subsidiary is a "holding
company", a "subsidiary company" of a "holding company", an "affiliate"
of a "holding company" or an "affiliate" of a "subsidiary company" of a
"holding company", in each case as such terms are defined in the Public
Utility Holding Company Act of 1935, as amended.
The opinions set forth above are subject to the following
qualifications:
(a) In rendering the opinions expressed in paragraph 2 above,
neither I nor any other attorney acting under my direction have made any
examination of any accounting or financial matters related to financial
covenants contained in certain documents to which the Company may be
subject, and I express no opinion with respect thereto.
(b) The opinion in paragraph 5 above is subject, as to
enforceability, to the effect of general principles of equity (regardless
of whether considered in a proceeding in equity or at law), including
without limitation, concepts of materiality, reasonableness, good faith
and fair dealing, and also to the possible unavailability of specific
performance or injunctive relief. Such principles of equity are of
general application, and in applying such principles a court, among other
things, might not allow a creditor to accelerate maturity of a debt upon
the occurrence of a default deemed immaterial or might decline to order
the Company to perform covenants.
(c) I express no opinion with respect to the following
provisions to the extent that the same are contained in the Loan
Documents: (i) provisions releasing, exculpating or exempting a party
from, or requiring the indemnification of a party for, liability for its
own action or inaction, to the extent that the same are inconsistent with
public policy, and (ii) provisions purporting to waive rights to notice,
legal defenses, or other benefits that cannot be waived under applicable
law.
(d) This opinion is limited in all respects to the laws of the
State of Texas and the General Corporation Law of the State of Delaware
and Federal law.
(e) In rendering the opinion expressed in paragraph 6 above, I
(or the other attorneys acting under my direction) have only reviewed the
files and records of the Company and its Subsidiaries, and we have
consulted with such senior officers of the Company and its Subsidiaries
as we have deemed necessary.
This opinion is solely for the benefit of the Banks, the Agent, their
respective successors, assigns and participants and may not be relied upon in
connection with any other transaction or by any other person.
Very truly yours,
Wilson B. Fargo
Senior Vice President,
General Counsel and Secretary
EXHIBIT D-2
October 31, 1995
To each of the Banks parties to the
$250,000,000 Revolving Credit Agreement
dated as of October 31, 1995 among
Compaq Computer Corporation, said Banks
and Bank of America National Trust and Savings
Association, as Administrative Agent
for such Banks, and Nationsbank of Texas,
National Association and Citibank, N.A., as Co-Agents
for such Banks, and to such Agents
Re: Compaq Computer Corporation Revolving Credit Agreement
Ladies and Gentlemen:
This opinion is furnished to you pursuant to Section 4.01(d) of
the $250,000,000 Revolving Credit Agreement, dated as of October 31, 1995 (the
"Credit Agreement"), among Compaq Computer Corporation (the "Company"), the
Banks parties thereto, Bank of America National Trust and Savings Association,
as Administrative Agent for such Banks, and Nationsbank of Texas, National
Association and Citibank, N.A., as Co-Agents for such Banks. Except as
otherwise defined herein, terms defined in the Credit Agreement are used
herein as therein defined.
I have acted as counsel for the Company in connection with the
preparation, execution, delivery and effectiveness of the Credit Agreement and
the other Loan Documents.
In that connection, I have examined:
(1) The Credit Agreement;
(2) The Notes and other documents furnished by the Company
pursuant to the conditions precedent set forth in Section
4.01 of the Credit Agreement; and
(3) Such other materials as I have deemed necessary to render
the opinions provided herein.
In rendering the opinion herein set forth, I have assumed (i) the
due authorization, execution and delivery of each document referred to in
clauses (1) and (2) of the third paragraph of this opinion by all parties to
such documents other than the Company and that each such document is valid,
binding and enforceable (subject to limitations on enforceability of the types
referred to in paragraphs (a) and (b) below) against the parties thereto other
than the Company, (ii) the legal capacity of natural persons, (iii) the
genuineness of all signatures, (iv) the authenticity of all documents
submitted to me as originals and (v) the conformity to original documents of
all documents submitted to me as copies. In addition, I have (i) investigated
such questions of law and (ii) relied as to factual matters on such
certificates from officers and representatives of the Company and from public
officials, as I have deemed necessary or appropriate for the purposes of this
opinion.
Based upon the foregoing and upon such investigation as I have
deemed necessary, I am of the opinion that the Credit Agreement and the Notes
constitute the legal, valid and binding obligations of the Company enforceable
against the Company in accordance with their terms.
The opinion set forth above is subject to the following qualifications:
(a) My opinion is subject, as to enforceability, to the effect
of any applicable bankruptcy, insolvency, reorganization, moratorium or
similar law affecting creditors' rights generally.
(b) My opinion is subject, as to enforceability, to the effect
of general principles of equity (regardless of whether considered in a
proceeding in equity or at law), including without limitation, concepts
of materiality, reasonableness, good faith and fair dealing, and also to
the possible unavailability of specific performance or injunctive relief.
Such principles of equity are of general application, and in applying
such principles a court, among other things, might not allow a creditor
to accelerate maturity of a debt upon the occurrence of a default deemed
immaterial or might decline to order the Company to perform covenants.
(c) I express no opinion with respect to the enforceability
under Texas law of the provisions of the Credit Agreement and the Notes
stating that such documents shall be governed by, and construed in
accordance with, the laws of the state of New York.
(d) I express no opinion with respect to the following
provisions to the extent that the same are contained in the Credit
Agreement or the Notes: (i) provisions releasing, exculpating or
exempting a party from, or requiring the indemnification of a party for,
liability for its own action or inaction, to the extent that the same are
inconsistent with public policy, and (ii) provisions purporting to waive
rights to notice, legal defenses, or other benefits that cannot be waived
under applicable law.
In rendering the opinions expressed herein, I have relied upon the
opinions stated in paragraphs 1, 2 (so far as such paragraph 2 relates to the
corporate powers of, and due authorization of the Loan Documents by, the
Company), 4 and 5 of the opinion, dated today, of the General Counsel of the
Company which is being delivered to you pursuant to Section 4.01(d) of the
Credit Agreement.
I express no opinion as to the effect of the law of any
jurisdiction other than the State of New York wherein any Bank may be located
or where any enforcement of the Loan Documents may be sought which limits the
rates of interest legally chargeable or collectible.
This opinion is limited to the laws of the State of New York.
The opinion herein has been furnished at your request and is
solely for your benefit and the benefit of your respective successors, assigns
and participants in connection with the subject transaction and may not be
relied upon by any other person or by you or any other person in any other
context without the prior written consent of the undersigned.
Very truly yours,
Stephanie A. Lucie
Corporate Counsel
Securities Compliance
EXHIBIT E
PROMISSORY NOTE
U.S. $ Dated: October 31, 1995
FOR VALUE RECEIVED, the undersigned, Compaq Computer Corporation, a
Delaware corporation (the "Company"), HEREBY PROMISES TO PAY to the order
of (the "Bank") for the account of its applicable Lending Office (as defined
in the Credit Agreement referred to below) on the Revolving Termination
Date (as defined in the Credit Agreement) the principal sum of
U.S. dollars (U.S. $__________) or, if less, the aggregate unpaid
principal amount of the [Revolving] Loans (as defined in the $250,000,000
Revolving Credit Agreement dated as of October 31, 1995 among the Company, the
Bank, certain other lenders parties thereto and Bank of America National Trust
and Savings Association, as Administrative Agent for the Bank and such other
lenders; such Revolving Credit Agreement, as amended from time to time being
herein referred to as the "Credit Agreement") owing to the Bank outstanding on
the Revolving Termination Date (as defined in the Credit Agreement) [,
together with the principal amount of any outstanding Swingline Loans (as
defined in the Credit Agreement) made by the Bank as Swingline Bank (as
defined in the Credit Agreement)].
The Company promises to pay interest on the unpaid principal amount of
each Loan owing to the Bank from the date of such Loan until such principal
amount is paid in full, at such interest rates, and payable at such times, as
are specified in the Credit Agreement.
Both principal and interest are payable in lawful money of the United
States of America to Bank of America National Trust and Savings Association,
as Administrative Agent, at the Agent's Payment Office (as defined in the
Credit Agreement), in immediately available funds. Each Loan owed to the Bank
by the Company pursuant to the Credit Agreement, 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
Promissory Note; provided that the failure of the Bank to make any such
recordation or endorsement shall not affect the obligations of the Company
hereunder or under the Credit Agreement.
This Promissory Note is one of the Notes referred to in, and is subject
to and is entitled to the benefits of, the Credit Agreement. The Credit
Agreement, among other things, (i) provides for the making of [Revolving]
Loans by the Bank to the Company from time to time in an aggregate amount not
to exceed the U.S. dollar amount first above mentioned [and the making of
Swingline Loans by the Bank as Swingline Bank to the Company from time to time
in an aggregate amount not to exceed the Swingline Commitment (as such terms
are defined in the Credit Agreement)], the indebtedness of the Company
resulting from each Loan owing to the Bank being evidenced by this Promissory
Note, and (ii) contains provisions for acceleration of the maturity hereof
upon the happening of certain stated events and also for prepayments on
account of principal hereof prior to the maturity hereof upon the terms and
conditions therein specified.
This Promissory Note shall be governed by, and construed in accordance
with, the internal laws of the State of New York.
COMPAQ COMPUTER CORPORATION
By:__________________________________
Name:________________________________
Title:_______________________________
LOANS AND PAYMENTS OF PRINCIPAL
Amount of
Amount Principal Unpaid
of Type of Paid or Principal Notation
Date Loan Loan Prepaid Balance Made By
- ---- ------ ------- --------- --------- ---------
SCHEDULE 10.02
NOTICE ADDRESSES, PAYMENT AND LENDING OFFICES
<TABLE>
<S> <C> <C>
Addresses for Notices Address for Payments
___________________________________________________________________________________________________________
BANK OF AMERICA NATIONAL TRUST Bank of America N.T. & S.A. Bank of America N.T. & S.A.
AND SAVINGS ASSOCIATION, 1455 Market Street, 12th Floor (ABA 121-000-358)
as Administrative Agent San Francisco, CA 94103 Attn: Agency Management
Attn: Agency Management Services Services #5596
#5596 1850 Gateway Boulevard
Wendy Young Concord, CA 94520
Telephone: (415) 436-3420 For credit to account:
Facsimile: (415) 436-2700 No. 12335 14314
Ref: Compaq Computer Corporation
With a copy to:
Bank of America N.T. & S.A.
555 California Street
41st Floor
San Francisco, CA 94104
Attn: Corporate Banking
High Technology
Kevin McMahon
Telephone: (415) 622-8088
Facsimile: (415) 622-2514
</TABLE>
<TABLE>
<CAPTION>
Bank Commitment Domestic/CD/LIBOR Lending Addresses for Notices
Offices
<S> <C> <C> <C>
___________________________________________________________________________________________________________
BANK OF AMERICA $22,380,952.35 Bank of America N.T. & S.A. Bank of America N.T. & S.A.
NATIONAL TRUST AND 1850 Gateway Boulevard 555 California Street
SAVINGS ASSOCIATION, Concord, CA 94520 41st Floor
as Swingline Bank and San Francisco, CA 94104
as a Bank Attn: Corporate Banking
High Technology
Kevin McMahon
Telephone: (415) 622-8088
Facsimile: (415) 622-4585/2514
ABN AMRO BANK N.V. $11,428,571.43 ABN AMRO Bank N.V. Credit Matters:
Houston Agency Houston Agency ----------------------------------
Three Riverway, Suite 1600 ABN AMRO Bank N.V.
Houston, TX 77056 Houston Agency
Attn: Michael N. Oaks Three Riverway, Suite 1600
Telephone: (713) 964-3356 Houston, TX 77056
Facsimile: (713) 629-7533 Attn: Michael N. Oaks
Telephone: (713) 964-3356
Facsimile: (713) 629-7533
Operations/Administration:
----------------------------------
ABN AMRO BANK N.V.
Houston Agency
Three Riverway, Suite 1600
Houston, TX 77056
Attn: Patricia Baker
Telephone: (713) 964-3331
Facsimile: (713) 629-7533
BANKERS TRUST COMPANY $11,428,571.43 Bankers Trust Company Credit Matters:
130 Liberty Street ----------------------------------
New York, NY 10006 Bankers Trust Company
Attn: Katherine A. Judge 130 Liberty Street
Vice President New York, NY 10006
Telephone: (212) 250-4969 Attn: Katherine A. Judge
Facsimile: (212) 250-7478 Vice President
Telephone: (212) 250-4969
Facsimile: (212) 250-7478
BANKERS TRUST COMPANY
(Continued) Operations/Administration:
----------------------------------
Bankers Trust Company
130 Liberty Street
New York, NY 10006
Attn: Robert Telesca
Assistant Vice President
Telephone: (212) 250-7342
Facsimile: (212) 250-7351
BANQUE NATIONALE $11,428,571.43 Banque Nationale de Paris Credit Matters:
DE PARIS Houston Agency ----------------------------------
Houston Agency 333 Clay Street Banque Nationale de Paris
Suite 3400 Houston Agency
Houston, TX 77002 333 Clay Street
Attn: John L. Stacy Suite 3400
Telephone: (713) 951-1222 Houston, TX 77002
Facsimile: (713) 659-1414 Attn: John L. Stacy
Telephone: (713) 951-1222
Facsimile: (713) 659-1414
Operations/Administration:
----------------------------------
Banque Nationale de Paris
Houston Agency
333 Clay Street
Suite 3400
Houston, TX 77002
Attn: Donna Rose
Telephone: (713) 951-1240
Facsimile: (713) 659-1414
CHEMICAL BANK $11,428,571.43 Chemical Bank Chemical Bank
270 Park Avenue Media & Telecommunications Group
New York, NY 10017 Ninth Floor
Attn: John J. Huber 270 Park Avenue
Telephone: (212) 270-1402 New York, NY 10017
Facsimile: (212) 270-2625 Attn: John J. Huber
Managing Director
Telephone: (212) 270-1402
Facsimile: (212) 270-2625
Operations/Administration:
----------------------------------
Chemical Bank
140 East 45th Street
29th Floor
New York, NY 10017
Attn: Gloria Cupid
Account Manager
Telephone: (212) 622-1439
Facsimile: (212) 622-0136
CITIBANK, N.A., as $16,666,666.67 Citibank, N.A. Credit Matters:
Co-Agent and as a Bank 399 Park Avenue ----------------------------------
4th Floor, Zone 17 Citibank, N.A.
New York, NY 10043 399 Park Avenue
Attn: James M. Walsh 4th Floor, Zone 17
Telephone: (212) 559-7538 New York, NY 10043
Facsimile: (212) 593-0054 Attn: James M. Walsh
Vice President
Telephone: (212) 559-7538
Facsimile: (212) 593-0054
Operations/Administration:
----------------------------------
Citibank, N.A.
One Court Square
Long Island City, NY 11120
Attn: Sophie Tetenes
Telephone: (718) 248-7179
Facsimile: (718) 248-4844
COMMERZBANK AG $11,428,571.43 Commerzbank AG Credit Matters:
Atlanta Agency Atlanta Agency ----------------------------------
2 World Financial Center Commerzbank AG
New York, NY 10281 Atlanta Agency
Attn: Chris Scaffidi 1230 Peachtree Street, N.E.
Assistant Vice President Suite 3500
Telephone: (212) 266-7596 Atlanta, GA 30309
Facsimile: (212) 266-7593 Attn: Harry Yergey
Vice President
Telephone: (404) 888-6500
Facsimile: (404) 888-6539
Operations/Administration:
----------------------------------
Commerzbank AG
Atlanta Agency
2 World Financial Center
New York, NY 10281
Attn: Chris Scaffidi
Assistant Vice President
Telephone: (212) 266-7596
Facsimile: (212) 266-7593
DEUTSCHE BANK AG $11,428,571.43 Deutsche Bank AG Credit Matters:
New York and/or New York Branch ----------------------------------
Cayman Island 31 West 52nd Street Deutsche Bank AG
Branches 24th Floor New York Branch
New York, NY 10019 31 West 52nd Street
Attn: John Quinn 24th Floor
Telephone: (212) 474-8229 New York, NY 10019
Facsimile: (212) 474-7880 Attn: Jeffrey N. Weiser
Director
Telephone: (212) 474-8233
Facsimile: (212) 474-8212
Operations/Administration:
----------------------------------
Deutsche Bank AG
New York Branch
31 West 52nd Street
24th Floor
New York, NY 10019
Attn: John Quinn
Telephone: (212) 474-8229
Facsimile: (212) 474-7880
DRESDNER BANK AG $11,428,571.43 Dresdner Bank AG Credit Matters:
New York Branch and 75 Wall Street, 33rd Floor ----------------------------------
Grand Cayman Branch New York, NY 10005-2889 Dresdner Bank AG
Attn: Mona Karout 75 Wall Street, 30th Floor
Telephone: (212) 429-2287 New York, NY 10005-2889
Facsimile: (212) 429-2130 Attn: Craig Erickson
Telephone: (212) 429-2183
Facsimile: (212) 429-2524
Operations/Administration:
----------------------------------
Dresdner Bank AG
75 Wall Street, 33rd Floor
New York, NY 10005-2889
Attn: Mona Karout
Telephone: (212) 429-2287
Facsimile: (212) 429-2130
FIRST INTERSTATE BANK $11,428,571.43 First Interstate Bank of Credit Matters:
OF TEXAS, N.A. Texas, N.A. ----------------------------------
Beaverton Loan Center First Interstate Bank of Texas,
P.O. Box 4195 N.A.
Portland, OR 97208-4195 1000 Louisiana
Attn: Sunil Singh Houston, TX 77099
Syndications Manager Attn: Valerie Carlson
Telephone: (503) 614-6436 Vice President
Facsimile: (503) 614-5878 Telephone: (713) 250-4307
Facsimile: (713) 250-7029
Operations/Administration:
----------------------------------
First Interstate Bank of Texas,
N.A.
1000 Louisiana
Houston, TX 77099
Attn: Valerie Carlson
Vice President
Telephone: (713) 250-4307
Facsimile: (713) 250-7029
THE FIRST NATIONAL $11,428,571.43 The First National Bank Credit Matters:
BANK OF CHICAGO of Chicago ----------------------------------
One First National Plaza The First National Bank
Suite 0088 of Chicago
Chicago, IL 60670-0088 One First National Plaza
Suite 0088
Chicago, IL 60670-0088
Attn: Cory Olson
Telephone: (312) 732-1706
Facsimile: (312) 732-1117
Operations/Administration:
----------------------------------
The First National Bank
of Chicago
One First National Plaza
Suite 0088
Chicago, IL 60670-0088
Attn: Dennis Degen/Colleen Muff
Telephone: (312) 732-9757
Facsimile: (312) 732-5161
THE FUJI BANK, LIMITED $11,428,571.43 The Fuji Bank, Limited Credit Matters:
Houston Agency Houston Agency ----------------------------------
One Houston Center The Fuji Bank, Limited
1221 McKinney Street Houston Agency
Suite 4100 One Houston Center
Houston, TX 77010 1221 McKinney Street, Suite 4100
Attn: Jenny Lin Houston, TX 77010
Telephone: (713) 650-7863 Attn: Mark F. Polasek
Facsimile: (713) 759-0048 Telephone: (713) 650-7863
Facsimile: (713) 759-0048
Operations/Administration:
----------------------------------
The Fuji Bank, Limited
Houston Agency
One Houston Center
1221 McKinney Street, Suite 4100
Houston, TX 77010
Attn: Jenny Lin
Telephone: (713) 650-7821
Facsimile: (713) 759-0048
NATIONSBANK TEXAS, $16,666,666.67 NationsBank Texas, N.A. Credit Matters:
N.A., as Co-Agent 901 Main Street, 67th Floor ----------------------------------
and as a Bank Dallas, TX 75202 NationsBank Texas, N.A.
Attn: Geri Lewis 700 Louisiana Street
Telephone: (214) 508-0592 8th Floor
Facsimile: (214) 508-0944 Houston, TX 77002
Attn: Forest Scott Singhoff
Senior Vice President
Telephone: (713) 247-6961
Facsimile: (713) 247-6719
Operations/Administration:
----------------------------------
NationsBank Texas, N.A.
901 Main Street, 67th Floor
Dallas, TX 75202
Attn: Geri Lewis
Telephone: (214) 508-0592
Facsimile: (214) 508-0944
PNC BANK, N.A. $11,428,571.43 PNC Bank, N.A. Credit Matters:
5th Avenue & Wood St. ----------------------------------
Pittsburgh, PA 15222 PNC Bank, N.A.
2525 Lincoln Plaza
Dallas, TX 75201
Attn: Gregory T. Gaschler
Vice President
Telephone: (214) 740-2585
Facsimile: (214) 740-2588
Operations/Administration:
----------------------------------
PNC Bank, N.A.
2525 Lincoln Plaza
Dallas, TX 75201
Attn: Helen Malone
Administrative Assistant
Telephone: (214) 740-2525
Facsimile: (214) 740-2588
ROYAL BANK OF CANADA $11,428,571.43 Royal Bank of Canada Credit Matters:
One Financial Square ----------------------------------
23rd Floor Royal Bank of Canada
New York, NY 10005-3531 600 Wilshire Blvd., Suite 800
Los Angeles, CA 90017
Attn: Michael A. Cole
Robert K. Mimaki
Telephone: (213) 955-5328/5348
Facsimile: (213) 955-5350
Operations/Administration:
----------------------------------
Royal Bank of Canada
One Financial Square
23rd Floor
New York, NY 10005-3531
Attn: Helen John
Reconciliation Clerk
Telephone: (212) 428-6322
Facsimile: (212) 428-2372
THE SANWA BANK $11,428,571.43 The Sanwa Bank Limited, Credit Matters:
LIMITED, Dallas Agency Dallas Agency ----------------------------------
4100 West Texas Commerce Tower The Sanwa Bank Limited,
2200 Ross Avenue Dallas Agency
Dallas, TX 75201 4100 West Texas Commerce Tower
Attn: Greg Crowe 2200 Ross Avenue
Vice President Dallas, TX 75201
Telephone: (214) 744-5555 Attn: Matthew G. Patrick
Facsimile: (214) 741-6535 Vice President
Telephone: (214) 665-0217
Facsimile: (214) 741-6535
Operations/Administration:
----------------------------------
The Sanwa Bank Limited,
Dallas Agency
4100 West Texas Commerce Tower
2200 Ross Avenue
Dallas, TX 75201
Attn: Greg Crowe
Vice President
Telephone: (214) 665-0229
Facsimile: (214) 741-6535
SHAWMUT BANK, N.A. $11,428,571.43 Shawmut Bank, N.A. Shawmut Bank, N.A.
One Federal Street One Federal Street
Mail Stop OF-0323 Mail Stop OF-0323
Boston, MA 02211 Boston, MA 02211
Attn: Judy Whalen Attn: Frank Benesh
Telephone: (617) 292-3907 Director
Facsimile: (617) 292-3241 Telephone: (617) 292-3514
Facsimile: (617) 423-5214
Operations/Administration:
----------------------------------
Shawmut Bank, N.A.
One Federal Street
Mail Stop OF-0305
Boston, MA 02211
Attn: Michael Araujo,
Olive Fagan
Telephone: (617) 292-2170
Facsimile: (617) 292-3241
SOCIETE GENERALE $11,428,571.43 Societe Generale, Credit Matters:
Southwest Agency Southwest Agency ----------------------------------
2001 Ross Avenue, Suite 4800 Societe Generale,
Dallas, TX 75201 1111 Bagby Street
Attn: Angela Aldridge Houston, TX 77002
Vice President Attn: Thierry Namuroy
Telephone: (214) 979-2777 Vice President
Facsimile: (214) 754-0171 Telephone: (713) 650-1777
Facsimile: (713) 650-0824
Operations/Administration:
----------------------------------
Societe Generale
2001 Ross Avenue, Suite 4800
Dallas, TX 75201
Attn: Tequlla English
Loan Specialist
Telephone: (214) 979-2767
Facsimile: (214) 754-0171
THE SUMITOMO BANK, $11,428,571.43 Credit Matters:
LIMITED, HOUSTON ----------------------------------
AGENCY Societe Generale
700 Louisiana - Suite 1750
Houston, TX 77002
Attn: William S. Rogers
Vice President
Telephone: (713) 238-8214
Facsimile: (713) 759-0020
Operations/Administration:
----------------------------------
Societe Generale
700 Louisiana - Suite 1750
Houston, TX 77002
Attn: Robert Quezada
Loan Administrator
Telephone: (713) 238-8221
Facsimile: (713) 759-0020
TORONTO DOMINION $11,428,571.43 Toronto Dominion Bank Toronto Dominion Bank
(TEXAS), INC. Houston Agency 70 West Madison
909 Fannin Street, Suite 1700 Suite 5430
Houston, TX 77010 Chicago, IL 60602
Attn: Dianne Bailey Attn: Mark G. Fields
Vice President Director
Telephone: (713) 653-8250 Telephone: (312) 977-2116
Facsimile: (713) 951-9921 Facsimile: (312) 782-6337
With a copy to:
Toronto Dominion Bank
31 West 52nd Street
20th Floor
New York, NY 10019
Attn: Doug Weir
Telephone: (212) 468-0575
Facsimile: (212) 262-1926
</TABLE>
AGREEMENT AND PLAN OF MERGER
dated as of
November 5, 1995
among
NetWorth, Inc.
Compaq Computer Corporation
and
Compaq-Dallas, Inc.
TABLE OF CONTENTS(1)
Page
ARTICLE 1
THE OFFER
SECTION 1.1. The Offer................................................. 1
SECTION 1.2. Company Action............................................ 2
SECTION 1.3. Directors................................................. 3
ARTICLE 2
THE MERGER
SECTION 2.1. The Merger................................................ 4
SECTION 2.2. Conversion of Shares...................................... 4
SECTION 2.3. Surrender and Payment..................................... 5
SECTION 2.4. Dissenting Shares......................................... 6
SECTION 2.5. Stock Options............................................. 7
SECTION 2.6 Employee Stock Purchase Plan.............................. 8
- -------------
(1) The Table of Contents is not a part of this Agreement.
ARTICLE 3
THE SURVIVING CORPORATION
SECTION 3.1. Certificate of Incorporation.............................. 8
SECTION 3.2. Bylaws.................................................... 8
SECTION 3.3. Directors and Officers.................................... 8
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
OF THE COMPANY
SECTION 4.1. Corporate Existence and Power............................ 9
SECTION 4.2. Corporate Authorization.................................. 9
SECTION 4.3. Governmental Authorization............................... 10
SECTION 4.4. Non-Contravention........................................ 10
SECTION 4.5. Capitalization........................................... 10
SECTION 4.6. Subsidiaries............................................. 11
SECTION 4.7. SEC Filings.............................................. 12
SECTION 4.8. Financial Statements..................................... 13
SECTION 4.9. Disclosure Documents..................................... 13
SECTION 4.10. Absence of Certain Changes............................... 14
SECTION 4.11. No Undisclosed Material Liabilities...................... 16
SECTION 4.12. Litigation............................................... 16
SECTION 4.13. Taxes.................................................... 16
SECTION 4.14. ERISA.................................................... 16
SECTION 4.15. Compliance with Laws..................................... 18
SECTION 4.16. Finders' Fees............................................ 18
SECTION 4.17. Patents and Other Property Rights........................ 18
SECTION 4.18. Environmental Matters.................................... 19
ARTICLE 5
REPRESENTATIONS AND WARRANTIES
OF BUYER
SECTION 5.1. Corporate Existence and Power............................. 21
SECTION 5.2. Corporate Authorization................................... 21
SECTION 5.3. Governmental Authorization................................ 21
SECTION 5.4. Non-Contravention......................................... 21
SECTION 5.5. Disclosure Documents...................................... 22
SECTION 5.6. Finders' Fees............................................. 22
ARTICLE 6
COVENANTS OF THE COMPANY
SECTION 6.1. Conduct of the Company.................................... 22
SECTION 6.2. Stockholder Meeting; Proxy Material....................... 23
SECTION 6.3. Access to Information..................................... 24
SECTION 6.4. Other Offers.............................................. 24
SECTION 6.5. Certain Events............................................ 25
ARTICLE 7
COVENANTS OF BUYER
SECTION 7.1. Obligations of Merger Subsidiary.......................... 25
SECTION 7.2. Voting of Shares.......................................... 25
SECTION 7.3. Director and Officer Liability............................ 25
ARTICLE 8
COVENANTS OF BUYER
AND THE COMPANY
SECTION 8.1. Best Efforts.............................................. 26
SECTION 8.2. Certain Filings........................................... 26
SECTION 8.3. Public Announcements...................................... 26
SECTION 8.4. Further Assurances........................................ 27
ARTICLE 9
CONDITIONS TO THE MERGER
SECTION 9.1. Conditions to the Obligations of Each Party............... 27
ARTICLE 10
TERMINATION
SECTION 10.1. Termination.............................................. 27
SECTION 10.2. Effect of Termination.................................... 28
ARTICLE 11
MISCELLANEOUS
SECTION 11.1. Notices.................................................. 28
SECTION 11.2. Survival of Representations and Warranties............... 29
SECTION 11.3. Amendments; No Waivers................................... 30
SECTION 11.4. Fees and Expenses........................................ 30
SECTION 11.5. Successors and Assigns................................... 31
SECTION 11.6. Governing Law............................................ 32
SECTION 11.7. Counterparts; Effectiveness.............................. 32
SECTION 11.8. Entire Agreement......................................... 32
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER dated as of November 5, 1995 among
NetWorth, Inc., a Delaware corporation (the "Company"), Compaq Computer
Corporation, a Delaware corporation ("Buyer"), and Compaq-Dallas, Inc., a
Delaware corporation and a wholly owned subsidiary of Buyer ("Merger
Subsidiary").
The parties hereto agree as follows:
ARTICLE 1
THE OFFER
SECTION 1.1. The Offer. (a) Provided that nothing shall have
occurred that would result in a failure to satisfy any of the conditions set
forth in Annex I hereto, Merger Subsidiary shall, as promptly as practicable
after the date hereof, but in no event later than five business days following
the public announcement of the terms of this Agreement, commence an offer (the
"Offer") to purchase all of the outstanding shares (the "Shares") of common
stock, $0.01 par value, of the Company (the "Common Stock")at a price of $42
per Share, net to the seller in cash. The Offer shall be subject to the
condition that there shall be validly tendered in accordance with the terms of
the Offer prior to the expiration date of the Offer and not withdrawn a number
of Shares which, together with the Shares then owned by Buyer, represents at
least a majority of the Shares outstanding on a fully diluted basis (the
"Minimum Condition") and to the other conditions set forth in Annex I hereto.
Merger Subsidiary expressly reserves the right to waive the Minimum Condition
or any of the other conditions to the Offer and to make any change in the
terms or conditions of the Offer; provided that no change may be made which
changes the form of consideration to be paid or decreases the price per Share
or the number of Shares sought in the Offer or which imposes conditions to the
Offer in addition to those set forth in Annex I or amends such conditions in a
manner adverse to the Company.
(b) As soon as practicable on the date of commencement of the
Offer, Merger Subsidiary shall file with the SEC (as defined in Section 4.7) a
Tender Offer Statement on Schedule 14D-1 with respect to the Offer which will
contain the offer to purchase and form of the related letter of transmittal
(together with any supplements or amendments thereto, collectively the "Offer
Documents"). Buyer and the Company each agrees promptly to correct any
information provided by it for use in the Offer Documents if and to the extent
that it shall have become false or misleading in any material respect. Buyer
and Merger Subsidiary agree to take all steps necessary to cause the Offer
Documents as so corrected to be filed with the SEC and 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 an
opportunity to review and comment on the Schedule 14D-1 prior to its being
filed with the SEC.
SECTION 1.2. Company Action. (a) The Company hereby consents to
the Offer and represents that its Board of Directors, at a meeting duly called
and held, has (i) determined that this Agreement and the transactions
contemplated hereby, including the Offer and the Merger (as defined in Section
2.1), are fair to and in the best interest of the Company's stockholders, (ii)
approved this Agreement and the transactions contemplated hereby, including
the Offer and the Merger, which approval satisfies the requirements of the
General Corporation Law of the State of Delaware (the "Delaware Law"), and
(iii) resolved, subject to the fiduciary duties of the Board of Directors
under applicable laws as advised by Hughes & Luce, L.L.P. ("Company Counsel"),
to recommend acceptance of the Offer and approval and adoption of this
Agreement and the Merger by its stockholders. The Company further represents
that Cowen & Company has delivered to the Company's Board of Directors its
written opinion that the consideration to be paid in the Offer and the Merger
is fair to the holders of Shares from a financial point of view. The Company
has been advised that all of its directors (other than Mr. Pieper who has not
advised the Company as to what he intends to do) and executive officers intend
either to tender their Shares pursuant to the Offer or to vote in favor of the
Merger. The Company will promptly furnish Buyer with a list of its
stockholders, mailing labels and any available listing or computer file
containing the names and addresses of all record holders of Shares and lists
of securities positions of Shares held in stock depositories, in each case
true and correct to the best knowledge of the Company as of the most recent
practicable date, and will provide to Buyer such additional information
(including, without limitation, updated lists of stockholders, mailing labels
and lists of securities positions) and such other assistance as Buyer may
reasonably request in connection with the Offer. Buyer will return such
materials promptly if the Offer is not consummated or this Agreement is
terminated.
(b) As soon as practicable on the day that the Offer is commenced,
the Company will file with the SEC a Solicitation/Recommendation Statement on
Schedule 14D-9 (the "Schedule 14D-9") which shall reflect the recommendations
of the Company's Board of Directors referred to above. The Company and Buyer
each agree promptly to correct any information provided by it for use in the
Schedule 14D-9 if and to the extent that it shall have become false or
misleading in any material respect. The Company agrees to take all steps
necessary to cause the Schedule 14D-9 as so corrected to be filed with the SEC
and to be disseminated to holders of Shares, in each case as and to the extent
required by applicable federal securities laws. Buyer and its counsel shall
be given an opportunity to review and comment on the Schedule 14D-9 prior to
its being filed with the SEC.
SECTION 1.3. Directors. (a) Effective upon the acceptance for
payment of any Shares pursuant to the Offer, Buyer shall be entitled to
designate the number of directors, rounded up to the next whole number, on the
Company's Board of Directors that equals the product of (i) the total number
of directors on the Company's Board of Directors (giving effect to the
election of any additional directors pursuant to this Section) and (ii) the
percentage that the number of Shares beneficially owned by Buyer (including
Shares accepted for payment) bears to the total number of Shares outstanding,
and the Company shall take all action necessary to cause Buyer's designees to
be elected or appointed to the Company's Board of Directors, including,
without limitation, increasing the number of directors and seeking and
accepting resignations of incumbent directors. At such times, the Company
will use its best efforts to cause individuals designated by Buyer to
constitute the same percentage as such individuals represent on the Company's
Board of Directors of (A) each committee of the Board and (B) each board of
directors (and committee thereof) of each Subsidiary (as defined in Section
4.6).
(b) The Company's obligations to appoint designees to the Board
of Directors shall be subject to Section 14(f) of the Exchange Act (as defined
in Section 4.3) and Rule 14f-1 promulgated thereunder. The Company shall
promptly take all actions required pursuant to Section 14(f) and Rule 14f-1 in
order to fulfill its obligations under this Section and shall include in the
Schedule 14D-9 such information with respect to the Company and its officers
and directors as is required under Section 14(f) and Rule 14f-1 to fulfill its
obligations under this Section. Buyer will supply to the Company in writing
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.
ARTICLE 2
THE MERGER
SECTION 2.1. The Merger. (a) At the Effective Time, Merger
Subsidiary shall be merged (the "Merger") with and into the Company in
accordance with the Delaware Law, whereupon the separate existence of Merger
Subsidiary shall cease, and the Company shall be the surviving corporation
(the "Surviving Corporation").
(b) As soon as practicable after satisfaction or, to the extent
permitted hereunder, waiver of all conditions to the Merger, the Company and
Merger Subsidiary will file a certificate of merger with the Secretary of
State of the State of Delaware and make all other filings or recordings
required by Delaware Law in connection with the Merger. The Merger shall
become effective at such time as the certificate of merger is duly filed with
the Secretary of State of the State of Delaware or at such later time as is
specified in the certificate of merger (the "Effective Time").
(c) From and after the Effective Time, the Surviving Corporation
shall possess all the rights, privileges, powers and franchises and be subject
to all of the restrictions, disabilities and duties of the Company and Merger
Subsidiary, all as provided under Delaware Law.
SECTION 2.2. Conversion of Shares. At the Effective Time:
(a) each share of Common Stock held by the Company as treasury
stock or owned by Buyer or any subsidiary of Buyer immediately prior to
the Effective Time shall be cancelled, and no payment shall be made with
respect thereto;
(b) each share of common stock of Merger Subsidiary outstanding
immediately prior to the Effective Time shall be converted into and
become one share of common stock of the Surviving Corporation with the
same rights, powers and privileges as the shares so converted and shall
constitute the only outstanding shares of capital stock of the Surviving
Corporation; and
(c) each Share outstanding immediately prior to the Effective
Time shall, except as otherwise provided in Section 2.2(a) or as
provided in Section 2.4 with respect to Shares as to which appraisal
rights have been exercised, be converted into the right to receive $42 in
cash, without interest (the "Merger Consideration").
SECTION 2.3. Surrender and Payment. (a) Prior to the Effective
Time, Buyer shall appoint an agent (the "Exchange Agent") for the purpose of
exchanging certificates representing Shares for the Merger Consideration.
Buyer will make available to the Exchange Agent, as needed, the Merger
Consideration to be paid in respect of the Shares. For purposes of
determining the Merger Consideration to be made available, Buyer shall assume
that no holder of Shares will perfect rights to appraisal of Shares. Promptly
after the Effective Time, Buyer will send, or will cause the Exchange Agent to
send, to each holder of Shares at the Effective Time a letter of transmittal
for use in such exchange (which shall specify that the delivery shall be
effected, and risk of loss and title shall pass, only upon proper delivery of
the certificates representing Shares to the Exchange Agent).
(b) Each holder of Shares that have been converted into a right
to receive the Merger Consideration, upon surrender to the Exchange Agent of a
certificate or certificates representing such Shares, together with a properly
completed letter of transmittal covering such Shares, will be entitled to
receive the Merger Consideration payable in respect of such Shares. Until so
surrendered, each such certificate shall, after the Effective Time, represent
for all purposes, only the right to receive such Merger Consideration.
(c) If any portion of the Merger Consideration is to be paid to a
Person other than the registered holder of the Shares represented by the
certificate or certificates surrendered in exchange therefor, it shall be a
condition to such payment that the certificate or certificates so surrendered
shall be properly endorsed or otherwise be in proper form for transfer and
that the Person requesting such payment shall pay to the Exchange Agent any
transfer or other taxes required as a result of such payment to a Person other
than the registered holder of such Shares or establish to the satisfaction of
the Exchange Agent that such tax has been paid or is not payable. For
purposes of this Agreement, "Person" means an individual, a corporation, a
limited liability company, a partnership, an association, a trust or any other
entity or organization, including a government or political subdivision or any
agency or instrumentality thereof.
(d) After the Effective Time, there shall be no further
registration of transfers of Shares. If, after the Effective Time,
certificates representing Shares are presented to the Surviving Corporation,
they shall be cancelled and exchanged for the consideration provided for, and
in accordance with the procedures set forth, in this Article 2.
(e) Any portion of the Merger Consideration made available to the
Exchange Agent pursuant to Section 2.3(a) that remains unclaimed by the
holders of Shares six months after the Effective Time shall be returned to
Buyer, upon demand, and any such holder who has not exchanged Shares for the
Merger Consideration in accordance with this Section prior to that time shall
thereafter look only to Buyer for payment of the Merger Consideration in
respect of Shares. Notwithstanding the foregoing, Buyer shall not be liable to
any holder of Shares for any amount paid to a public official pursuant to
applicable abandoned property laws. Any amounts remaining unclaimed by
holders of Shares two years after the Effective Time (or such earlier date
immediately prior to such time as such amounts would otherwise escheat to or
become property of any governmental entity) shall, to the extent permitted by
applicable law, become the property of Buyer free and clear of any claims or
interest of any Person previously entitled thereto.
(f) Any portion of the Merger Consideration made available to the
Exchange Agent pursuant to Section 2.3(a) to pay for Shares for which
appraisal rights have been perfected shall be returned to Buyer, upon demand.
SECTION 2.4. Dissenting Shares. Notwithstanding Section 2.2,
Shares outstanding immediately prior to the Effective Time and held by a
holder who has not voted in favor of the Merger or consented thereto in
writing and who has demanded appraisal for such Shares in accordance with
Delaware Law shall not be converted into a right to receive the Merger
Consideration, unless such holder fails to perfect or withdraws or otherwise
loses the right to appraisal. If after the Effective Time such holder fails
to perfect or withdraws or loses the right to appraisal, such Shares shall be
treated as if they had been converted as of the Effective Time into a right to
receive the Merger Consideration. The Company shall give Buyer prompt notice
of any demands received by the Company for appraisal of Shares, and Buyer
shall have the right to participate in all negotiations and proceedings with
respect to such demands. The Company shall not, except with the prior written
consent of Buyer, make any payment with respect to, or settle or offer to
settle, any such demands.
SECTION 2.5. Stock Options.
(a)(i) Buyer has been advised by the Company that in
accordance with the terms of the outstanding options to purchase
shares of Common Stock under the Company's employee and director
stock option plans, all such options will be fully vested and
exercisable prior to the consummation of the Offer. At the
Effective Time (except as provided in clauses (ii) and (iii)
below), each such option which remains outstanding and which is
held by any then current employee of the Company shall be cancelled
and Buyer shall issue in exchange therefor an option to purchase
shares of common stock of Buyer (a "Substitute Option"). The
number of shares of Buyer's common stock subject to such Substitute
Option and the exercise price thereunder shall be computed in
compliance with the requirements of Section 424(a) of the Internal
Revenue Code of 1986 and the rules and regulations promulgated
thereunder (the "Code"). Such Substitute Option shall be fully
vested, shall have the same term as the original option in respect
of which it is granted, and shall otherwise be subject to all of
the other terms and conditions of options granted under the
employee stock option or compensation plan or arrangement of
Buyer. The Substitute Option will not qualify as an incentive
stock option under Section 422 of the Code.
(ii) At the Effective Time, each then outstanding option to
purchase shares of Common Stock held by a non-employee director or
a former employee of the Company, or Ungermann-Bass Networks, Inc.
("UB Networks") shall be cancelled and Buyer shall pay each such
holder in cash at or promptly after the Effective Time for each
such option an amount determined by multiplying (A) the excess, if
any, of the Merger Consideration per share over the applicable
exercise price per share of such option by (B) the number of
shares such holder could have purchased (assuming full vesting of
all options) had such holder exercised such option in full
immediately prior to the Effective Time.
(iii) At the Effective Time, the warrants (the "Warrants")
issued by Network Resources Corporation that were originally
exercisable to purchase preferred stock of Network Resources
Corporation and are now exercisable to purchase an aggregate of
112,043 shares of Common Stock (the "Common Stock Amount") and
$224,086 in cash (the "Cash Amount") shall be converted, by their
terms, into warrants to purchase the Merger Consideration which
would be payable with respect to the Common Stock Amount and the
Cash Amount; provided that to the extent required under the NRC
Merger Agreement a portion of the amount receivable upon exercise
of the Warrants shall be delivered to the Escrow Agent in
accordance with the Escrow Agreement (as such terms are defined
in such Merger Agreement).
(b) Prior to the Effective Time, the Company shall use its best
efforts (i) to obtain any consents from holders of options to purchase shares
of Common Stock and (ii) to make any amendments to the terms of the Company's
stock option or compensation plans or arrangements or warrant agreements that
in the case of either (i) or (ii) are necessary to give effect to the
transactions contemplated by Section 2.5(a). Notwithstanding any other
provision of this Section, payment may be withheld in respect of any employee
stock option until necessary consents are obtained.
SECTION 2.6 Employee Stock Purchase Plan. Prior to the Effective
Time, the Company shall take all action necessary to terminate the Company's
1995 Employee Stock Purchase Plan in accordance with its terms, subject to
consummation of the Merger.
ARTICLE 3
THE SURVIVING CORPORATION
SECTION 3.1. Certificate of Incorporation. The certificate of
incorporation of Merger Subsidiary in effect at the Effective Time shall be
the certificate of incorporation of the Surviving Corporation until amended in
accordance with applicable law, except that the name of the Surviving
Corporation shall be changed to "NetWorth, Inc.".
SECTION 3.2. Bylaws. The bylaws of Merger Subsidiary in effect
at the Effective Time shall be the bylaws of the Surviving Corporation until
amended in accordance with applicable law.
SECTION 3.3. Directors and Officers. From and after the
Effective Time, until successors are duly elected or appointed and qualified
in accordance with applicable law, (a) the directors of Merger Subsidiary at
the Effective Time shall be the directors of the Surviving Corporation, and
(b) the officers of the Company at the Effective Time shall be the officers of
the Surviving Corporation.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
OF THE COMPANY
The Company represents and warrants to Buyer that:
SECTION 4.1. Corporate Existence and Power. The Company is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Delaware, and has all corporate powers and all material
governmental licenses, authorizations, consents and approvals required to
carry on its business as now conducted. The Company is duly qualified to do
business as a foreign corporation and is in good standing in each jurisdiction
where the character of the property owned or leased by it or the nature of its
activities makes such qualification necessary, except where the failure to be
so qualified would not, individually or in the aggregate, have a Material
Adverse Effect. For purposes of this Agreement, "Material Adverse Effect"
means a material adverse effect on the condition (financial or otherwise),
business, assets or results of operations of the Company and the Subsidiaries
taken as a whole, provided that any changes in the existing OEM or distributor
relationships or other existing ordinary course business relationships (which
shall in no event include litigation) between the Company, on the one hand,
and International Business Machines Corporation ("IBM") or UB Networks, on the
other hand, shall not be considered in determining whether there has been a
Material Adverse Effect. The Company has heretofore delivered to Buyer true
and complete copies of the Company's amended and restated certificate of
incorporation and bylaws as currently in effect.
SECTION 4.2. Corporate Authorization. The execution, delivery
and performance by the Company of this Agreement and the consummation by the
Company of the transactions contemplated hereby are within the Company's
corporate powers and, except for any required approval by the Company's
stockholders in connection with the consummation of the Merger, have been duly
authorized by all necessary corporate action. This Agreement constitutes a
valid and binding agreement of the Company.
SECTION 4.3. Governmental Authorization. The execution, delivery
and performance by the Company of this Agreement and the consummation of the
Merger by the Company require no action by or in respect of, or filing with,
any governmental body, agency, official or authority other than (a) the filing
of a certificate of merger in accordance with Delaware Law; (b) compliance
with any applicable requirements of the Hart-Scott-Rodino Antitrust
Improvements Act of 1976 (the "HSR Act"); and (c) compliance with any
applicable requirements of the Securities Exchange Act of 1934 and the rules
and regulations promulgated thereunder (the "Exchange Act").
SECTION 4.4. Non-Contravention. The execution, delivery and
performance by the Company of this Agreement and the consummation by the
Company of the transactions contemplated hereby do not and will not (a)
contravene or conflict with the certificate of incorporation or bylaws of the
Company, (b) assuming compliance with the matters referred to in Section 4.3,
contravene or conflict with or constitute a violation of any provision of any
law, regulation, judgment, injunction, order or decree binding upon or
applicable to the Company or any Subsidiary, (c) constitute a default under or
give rise to a right of termination, cancellation or acceleration of any right
or obligation of the Company or any Subsidiary or to a loss of any benefit to
which the Company or any Subsidiary is entitled under any provision of any
material agreement, contract or other instrument binding upon the Company
(other than the Bank Agreement (as defined in Section 4.6)) or any Subsidiary
or any license, franchise, permit or other similar authorization held by the
Company or any Subsidiary, or (d) result in the creation or imposition of any
Lien on any material asset of the Company or any Subsidiary except, in the
case of (b), (c) and (d), for such matters as would not, individually or in
the aggregate, have a Material Adverse Effect. For purposes of this
Agreement, "Lien" means, with respect to any asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in respect of
such asset.
SECTION 4.5. Capitalization. The authorized capital stock of the
Company consists of (a) 20,000,000 shares of Common Stock, $0.01 par value;
and (b) 100,000 shares of Preferred Stock, $0.01 par value. As of October 30,
1995, there were outstanding no shares of Preferred Stock, 7,714,932 Shares,
employee stock options to purchase an aggregate of 735,275 shares of Common
Stock at an average exercise price of $12.46 per share, non-executive director
stock options to purchase an aggregate of 36,000 shares of Common Stock at an
average exercise price of $19.26 per share, options held by UB Networks to
purchase an aggregate of 253,875 shares of Common Stock at an average exercise
price of $11.19 per share and Warrants held by UB Networks to purchase an
aggregate of 112,043 shares of Common Stock and $224,086 in cash at an
aggregate exercise price of $585,386.55. Upon consummation of the Merger, the
Company shall have no obligation to issue shares of Common Stock or pay or
deliver any other consideration other than to Buyer under the Merger Agreement
and Plan of Reorganization (the "NRC Merger Agreement") among the Company, NRC
Acquisition Corp. and Network Resources Corporation dated March 10, 1995. All
outstanding shares of capital stock of the Company have been duly authorized
and validly issued and are fully paid and nonassessable. All shares of Common
Stock issuable upon exercise of outstanding options and Warrants, upon
issuance thereof in accordance with their terms, will have been duly
authorized and validly issued and will be fully paid and nonassessable.
Except as set forth in this Section and except for changes since October 30,
1995 resulting from the exercise of stock options and warrants outstanding on
such date, there are outstanding (a) no shares of capital stock or other
voting securities of the Company, (b) no securities of the Company convertible
into or exchangeable for shares of capital stock or voting securities of the
Company, and (c) no options or other rights to acquire from the Company, and
no obligation of the Company to issue, any capital stock, voting securities or
securities convertible into or exchangeable for capital stock or voting
securities of the Company (the items in clauses (a), (b) and (c) being
referred to collectively as the "Company Securities"). There are no
outstanding obligations of the Company or any Subsidiary to repurchase, redeem
or otherwise acquire any Company Securities.
SECTION 4.6. Subsidiaries. (a) Each Subsidiary is a corporation
duly incorporated, validly existing and in good standing under the laws of its
jurisdiction of incorporation, has all corporate powers and all material
governmental licenses, authorizations, consents and approvals required to
carry on its business as now conducted and is duly qualified to do business as
a foreign corporation and is in good standing in each jurisdiction where the
character of the property owned or leased by it or the nature of its
activities makes such qualification necessary, except where the failure to be
so qualified would not, individually or in the aggregate, have a Material
Adverse Effect. For purposes of this Agreement, "Subsidiary" means any
corporation or other entity of which securities or other ownership interests
having ordinary voting power to elect a majority of the board of directors or
other persons performing similar functions are directly or indirectly owned by
the Company. All Subsidiaries and their respective jurisdictions of
incorporation are identified in the Company's annual report on Form 10-K for
the fiscal year ended June 30, 1995 (the "Company 10-K").
(b) All of the outstanding capital stock of, or other voting
securities or ownership interests in, each Subsidiary, is owned by the
Company, directly or indirectly, free and clear of any Lien and free of any
other limitation or restriction (including any restriction on the right to
vote, sell or otherwise dispose of such capital stock or other ownership
interests) (other than the security interest in the capital stock of
Subsidiaries granted pursuant to Company's Loan and Security Agreement (the
"Bank Agreement") with Bank One Texas, N.A.). There are no outstanding (i)
securities of the Company or any Subsidiary convertible into or exchangeable
for shares of capital stock or other voting securities or ownership interests
in any Subsidiary, and (ii) options or other rights to acquire from the
Company or any Subsidiary, and no other obligation of the Company or any
Subsidiary to issue, any capital stock, voting securities or other ownership
interests in, or any securities convertible into or exchangeable for any
capital stock, voting securities or ownership interests in, any Subsidiary
(the items in clauses (i) and (ii) being referred to collectively as the
"Subsidiary Securities"). There are no outstanding obligations of the Company
or any Subsidiary to repurchase, redeem or otherwise acquire any outstanding
Subsidiary Securities.
SECTION 4.7. SEC Filings. (a) The Company has delivered to
Buyer (i) the Company's annual report on Form 10-K for its fiscal year ended
June 30, 1995, (ii) its quarterly report on Form 10-Q for its fiscal quarter
ended September 30, 1995 (the "Company 10-Q"), (iii) its proxy or information
statements relating to meetings of, or actions taken without a meeting by, the
stockholders of the Company held since June 30, 1995, and (iv) all of its
other reports, statements, schedules and registration statements filed with
the Securities and Exchange Commission (the "SEC") since June 30, 1995.
(b) As of its filing date, each such report or statement filed
pursuant to the Exchange Act did not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make
the statements made therein, in the light of the circumstances under which they
were made, not misleading.
(c) Each such registration statement, as amended or supplemented,
if applicable, filed pursuant to the Securities Act of 1933 as of the date
such statement or amendment became effective did not contain any untrue
statement of a material fact or omit to state any material fact required to
be stated therein or necessary to make the statements therein not misleading.
SECTION 4.8. Financial Statements. The audited consolidated
financial statements and unaudited consolidated interim financial statements
of the Company included in the Company 10-K and the Company 10-Q fairly
present, in conformity with generally accepted accounting principles applied
on a consistent basis (except as may be indicated in the notes thereto), the
consolidated financial position of the Company and its consolidated
subsidiaries as of the dates thereof and their consolidated results of
operations and cash flows for the periods then ended (subject to normal
year-end adjustments in the case of any unaudited interim financial
statements). For purposes of this Agreement, "Balance Sheet" means the
consolidated balance sheet of the Company as of September 30, 1995 set forth
in the Company 10-Q and "Balance Sheet Date" means September 30, 1995.
SECTION 4.9. Disclosure Documents. (a) Each document required to
be filed by the Company with the SEC in connection with the transactions
contemplated by this Agreement (the "Company Disclosure Documents"), including,
without limitation, the Schedule 14D-9, the proxy or information statement of
the Company (the "Company Proxy Statement"), if any, to be filed with the SEC
in connection with the Merger, and any amendments or supplements thereto will,
when filed, comply as to form in all material respects with the applicable
requirements of the Exchange Act.
(b) At the time the Company Proxy Statement or any amendment or
supplement thereto is first mailed to stockholders of the Company, at the time
such stockholders vote on adoption of this Agreement and at the Effective
Time, the Company Proxy Statement, as supplemented or amended, if applicable,
will not contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements made therein, in the
light of the circumstances under which they were made, not misleading. At the
time of the filing of any Company Disclosure Document other than the Company
Proxy Statement and at the time of any distribution thereof, such Company
Disclosure Document will not contain any untrue statement of a material fact
or omit to state a material fact necessary in order to make the statements
made therein, in the light of the circumstances under which they were made,
not misleading. The representations and warranties contained in this Section
4.9(b) will not apply to statements or omissions included in the Company
Disclosure Documents based upon information furnished to the Company by Buyer
specifically for use therein.
(c) The information with respect to the Company or any Subsidiary
that the Company furnishes to Buyer specifically for use in the Offer
Documents will not, at the time of the filing thereof, at the time of any
distribution thereof and at the time of the consummation of the Offer, 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 the light of the circumstances under which they were made,
not misleading.
SECTION 4.10. Absence of Certain Changes. Since the Balance
Sheet Date, the Company and Subsidiaries have conducted their business in the
ordinary course consistent with past practice and there has not been:
(a) any event, occurrence or development or state of
circumstances or facts which has had or could reasonably be expected to
have a Material Adverse Effect;
(b) any declaration, setting aside or payment of any dividend or
other distribution with respect to any shares of capital stock of the
Company, or any repurchase, redemption or other acquisition by the
Company or any Subsidiary of any outstanding shares of capital stock or
other securities of, or other ownership interests in, the Company or any
Subsidiary;
(c) except as disclosed in writing to Buyer prior to the
execution hereof, any amendment of any material term of any outstanding
security of the Company or any Subsidiary;
(d) any incurrence, assumption or guarantee by the Company or any
Subsidiary of any indebtedness for borrowed money other than in the
ordinary course of business and in amounts and on terms consistent with
past practices;
(e) any creation or assumption by the Company or any Subsidiary
of any Lien on any material asset other than in the ordinary course of
business consistent with past practices;
(f) any making of any loan, advance or capital contributions to
or investment in any Person other than loans, advances or capital
contributions to or investments in wholly-owned Subsidiaries made in the
ordinary course of business consistent with past practices;
(g) any damage, destruction or other casualty loss (whether or
not covered by insurance) affecting the business or assets of the
Company or any Subsidiary which, individually or in the aggregate, has
had or could reasonably be expected to have a Material Adverse Effect;
(h) any transaction or commitment made, or any contract or
agreement entered into, by the Company or any Subsidiary relating to its
assets or business (including the acquisition or disposition of any
assets) or any relinquishment by the Company or any Subsidiary of any
contract or other right, in either case, material to the Company and the
Subsidiaries taken as a whole, other than transactions and commitments
in the ordinary course of business consistent with past practice and
those contemplated by this Agreement;
(i) any change in any method of accounting or accounting practice
by the Company or any Subsidiary, except for any such change required by
reason of a concurrent change in generally accepted accounting
principles;
(j) any tax election not required by law or settlement or
compromise of any tax liability in either case that is material to the
Company and the Subsidiaries;
(k) any (i) grant of any severance or termination pay to any
director, officer or employee of the Company or any Subsidiary, (ii)
entering into of any employment, deferred compensation or other similar
agreement (or any amendment to any such existing agreement) with any
director, officer or employee of the Company or any Subsidiary, (iii)
increase in benefits payable under any existing severance or termination
pay policies or employment agreements or (iv), except as disclosed in
writing to Buyer prior to the execution hereof, increase in
compensation, bonus or other benefits payable to directors, officers or
employees of the Company or any Subsidiary, other than in the ordinary
course of business consistent with past practice; or
(l) any labor dispute, other than routine individual grievances,
or any activity or proceeding by a labor union or representative thereof
to organize any employees of the Company or any Subsidiary, which
employees were not subject to a collective bargaining agreement at the
Balance Sheet Date, or any lockouts, strikes, slowdowns, work stoppages
or threats thereof by or with respect to such employees.
SECTION 4.11. No Undisclosed Material Liabilities. There are no
material liabilities of the Company or any Subsidiary of any kind whatsoever,
whether accrued, contingent, absolute, determined, determinable or otherwise,
and there is no existing condition, situation or set of circumstances which
could reasonably be expected to result in such a liability, other than:
(a) liabilities disclosed or provided for in the Balance Sheet;
(b) liabilities incurred in the ordinary course of business
consistent with past practice since the Balance Sheet Date, which in the
aggregate are not material to the Company and the Subsidiaries, taken as
a whole; and
(c) liabilities under or related to this Agreement and the
transactions contemplated hereby.
SECTION 4.12. Litigation. Except as set forth in the Company
10-K, there is no action, suit, investigation or proceeding pending against,
or to the knowledge of the Company threatened against or affecting, the
Company or any Subsidiary or any of their respective properties before any
court or arbitrator or any governmental body, agency or official which could
reasonably be expected, individually or in the aggregate, to have a Material
Adverse Effect.
SECTION 4.13. Taxes. The Company has filed all tax returns,
statements, reports and forms required to be filed with any tax authority when
due and materially in accordance with all applicable laws, and all taxes shown
as due and payable thereon have been timely paid, or withheld and remitted, to
the appropriate taxing authority. No deficiency in payment of any taxes for
any period has been asserted by any taxing authority which remains unsettled at
the date hereof except for deficiencies which would not have a Material
Adverse Effect. The Company and Subsidiaries do not own any interest in real
property in the State of New York or in any other jurisdiction in which a
material tax is imposed on the transfer of a controlling interest in an entity
that owns any interest in real property.
SECTION 4.14. ERISA. (a) The Company has provided Buyer with a
list identifying each "employee benefit plan", as defined in Section 3(3) of
the Employee Retirement Income Security Act of 1974 ("ERISA"), each
employment, severance or similar contract, plan, arrangement or policy and each
plan or arrangement (written or oral) providing for insurance coverage
(including any self-insured arrangements), workers' compensation, disability
benefits, supplemental unemployment benefits, vacation benefits, retirement
benefits or for deferred compensation, profit-sharing, bonuses, stock options,
stock appreciation or other forms of incentive compensation or post-retirement
insurance, compensation or benefits which (i) is maintained, administered or
contributed to by the Company or any affiliate (as defined below) and covers
any employee or former employee of the Company or any affiliate or under which
the Company or any affiliate has any liability. Copies of such plans (and,
if applicable, related trust agreements) and all amendments thereto have been
furnished to Buyer together with the three most recent annual reports (Form
5500 including, if applicable, Schedule B thereto) prepared in connection with
any such plan. Such plans are referred to collectively herein as the
"Employee Plans". For purposes of this Section, "affiliate" of any Person
means any other Person which, together with such Person, would be treated as a
single employer under Section 414 of the Code. At no time has the Company or
any Person who from time to time is or was an affiliate of the Company (other
than UB Networks or Tandem Computers Incorporated) ever maintained an employee
benefit plan that is subject to Title IV of ERISA.
(b) Nothing done or omitted to be done and no transaction or
holding of any asset under or in connection with any Employee Plan has or will
make the Company or any Subsidiary, any officer or director of the Company or
any Subsidiary subject to any liability under Title I of ERISA or liable for
any tax pursuant to Section 4975 of the Code that could have a Material
Adverse Effect.
(c) Each Employee Plan which is intended to be qualified under
Section 401(a) of the Code is so qualified and has been so qualified during
the period from its adoption to date, and each trust forming a part thereof is
exempt from tax pursuant to Section 501(a) of the Code. The Company has
furnished to the Buyer copies of the most recent Internal Revenue Service
determination letters with respect to each such Plan. Each Employee Plan has
been maintained in material compliance with its terms and with the
requirements prescribed by any and all statutes, orders, rules and
regulations, including but not limited to ERISA and the Code, which are
applicable to such Plan.
(d) There is no contract, agreement, plan or arrangement covering
any employee or former employee of the Company or any affiliate that,
individually or collectively, could give rise to the payment of any amount
that would not be deductible pursuant to the terms of Section 280G of the Code.
(e) Except as disclosed in writing to Buyer prior to the date
hereof and except as provided in Section 4980B of the Code, no Employee Plan
provides post-retirement health and medical, life or other insurance benefits
for retired employees of the Company and its affiliates.
(f) Except as disclosed in writing to Buyer prior to the date
hereof, there has been no amendment to, written interpretation or announcement
(whether or not written) by the Company or any of its affiliates relating to,
or change in employee participation or coverage under, any Employee Plan which
would increase materially the expense of maintaining such Employee Plan above
the level of the expense incurred in respect thereof for the fiscal year ended
on the Balance Sheet Date.
(g) Except as disclosed in writing to Buyer prior to the date
hereof, neither the Company nor any Subsidiary is a party to or subject to any
union contract or any employment contract or arrangement providing for annual
future compensation of $100,000 or more with any officer, consultant, director
or employee.
SECTION 4.15. Compliance with Laws. Neither the Company nor any
Subsidiary is in violation of, or has violated, any applicable provisions of
any laws, statutes, ordinances or regulations, except for any such violation
that has not had and could not reasonably be expected to have a Material
Adverse Effect.
SECTION 4.16. Finders' Fees. Except for Cowen & Company, a copy
of whose engagement agreement has been provided to Buyer, there is no
investment banker, broker, finder or other intermediary which has been
retained by or is authorized to act on behalf, of the Company or any
Subsidiary who might be entitled to any fee or commission from Buyer or any of
its affiliates upon consummation of the transactions contemplated by this
Agreement.
SECTION 4.17. Patents and Other Proprietary Rights. The Company
and Subsidiaries own or have rights to use all material patents, trademarks,
service marks, trade names, copyrights, trade secrets, licenses, information,
proprietary rights and processes necessary for its business as now conducted
(collectively the "Intellectual Property Rights"). Other than pursuant to the
Bank Agreement, the Company and Subsidiaries have not assigned, hypothecated
or otherwise encumbered any of the Intellectual Property Rights and none of
the licenses included in the Intellectual Property Rights purport to grant
sole or exclusive licenses to another entity or person, including, without
limitation sole or exclusive licenses limited to specific fields of use. To
the best of the Company's knowledge, the patents owned by the Company and
Subsidiaries are valid and enforceable and any patent issuing from patent
applications of the Company and Subsidiaries will be valid and enforceable,
except as such invalidity or unenforceability would not have a Material
Adverse Effect. The Company has no knowledge of any infringement by any other
party of any of the Intellectual Property Rights except for such matters as
would not, individually or in the aggregate, have a Material Adverse Effect.
To the best of the Company's knowledge, the Company and Subsidiaries have not
and do not violate or infringe any intellectual property right of any other
person or entity, and the Company and Subsidiaries have not received any
communication alleging that it violates or infringes the intellectual property
right of any other person or entity, except any such violations or
infringements as would not, individually or in the aggregate, have a Material
Adverse Effect. The Company and Subsidiaries have not been sued for
infringing any intellectual property right of another entity or person. None
of the processes, techniques and formulae, research and development results
and other know-how relating to the business of the Company and Subsidiaries,
the value of which to the Company is contingent upon maintenance of the
confidentiality thereof, has been disclosed by the Company or any affiliate
thereof to any person or entity other than those persons or entities who are
bound by obligations of confidentiality or by operation of law.
SECTION 4.18. Environmental Matters. (a) Except as set forth in
the Company 10-K:
(i) no notice, notification, demand, request for information,
citation, summons, complaint or order has been received by, or, to the
knowledge of the Company or any Subsidiary, is pending or threatened by
any Person against, the Company or any Subsidiary nor has any material
penalty been assessed against the Company or any Subsidiary with respect
to any (A) alleged violation of any Environmental Law or liability
thereunder, (B) alleged failure to have any permit, certificate, license,
approval, registration or authorization required under any Environmental
Law, (C) generation, treatment, storage, recycling, transportation or
disposal of any Hazardous Substance or (D) discharge, emission or release
of any Hazardous Substance; and
(ii) there are no Environmental Liabilities that have had or
could reasonably be expected to have a Material Adverse Effect.
(b) There has been no environmental investigation, study, audit,
test, review or other analysis conducted of which the Company has knowledge in
relation to the current or prior business of the Company or any property or
facility now or previously owned or leased by the Company or any Subsidiary
which has not been delivered to Buyer prior to the date hereof.
(c) For purposes of this Section, the following terms shall have
the meanings set forth below:
"Company" and "Subsidiary" shall include any entity which is, in
whole or in part, a predecessor of the Company or any Subsidiary;
"Environmental Laws" means any federal, state, local or foreign
law, treaty, judicial decision, regulation, rule, judgment, order,
decree, injunction, permit, agreement or governmental restriction
or requirement relating to human health, the environment or
pollutants, contaminants, chemicals, toxins, hazardous substances
or wastes.
"Environmental Liabilities" means any and all liabilities of or
relating to the Company and any Subsidiary, whether contingent or
fixed, actual or potential, known or unknown, which (i) arise under
or relate to matters covered by Environmental Laws and (ii) relate
to actions occurring or conditions existing on or prior to the
Effective Time; and
"Hazardous Substances" means any toxic, radioactive, corrosive or
otherwise hazardous substance, including petroleum, its
derivatives, by-products and other hydrocarbons, or any substance
having any constituent elements displaying any of the foregoing
characteristics, which in any event is regulated under
Environmental Laws.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES
OF BUYER
Buyer represents and warrants to the Company that:
SECTION 5.1. Corporate Existence and Power. Each of Buyer and
Merger Subsidiary is a corporation duly incorporated, validly existing and in
good standing under the laws of its jurisdiction of incorporation and has all
corporate powers and all material governmental licenses, authorizations,
consents and approvals required to carry on its business as now conducted.
Since the date of its incorporation, Merger Subsidiary has not engaged in any
activities other than in connection with or as contemplated by this Agreement
or in connection with arranging any financing required to consummate the
transactions contemplated hereby.
SECTION 5.2. Corporate Authorization. The execution, delivery
and performance by Buyer and Merger Subsidiary of this Agreement and the
consummation by Buyer and Merger Subsidiary of the transactions contemplated
hereby are within the corporate powers of Buyer and Merger Subsidiary and have
been duly authorized by all necessary corporate action. This Agreement
constitutes a valid and binding agreement of each of Buyer and Merger
Subsidiary.
SECTION 5.3. Governmental Authorization. The execution, delivery
and performance by Buyer and Merger Subsidiary of this Agreement and the
consummation by Buyer and Merger Subsidiary of the transactions contemplated by
this Agreement require no action by or in respect of, or filing with, any
governmental body, agency, official or authority other than (a) the filing of
a certificate of merger in accordance with Delaware Law, (b) compliance with
any applicable requirements of the HSR Act; and (c) compliance with any
applicable requirements of the Exchange Act.
SECTION 5.4. Non-Contravention. The execution, delivery and
performance by Buyer and Merger Subsidiary of this Agreement and the
consummation by Buyer and Merger Subsidiary of the transactions contemplated
hereby do not and will not (a) contravene or conflict with the certificate of
incorporation or bylaws of Buyer or Merger Subsidiary, (b) assuming compliance
with the matters referred to in Section 5.3, contravene or conflict with any
provision of law, regulation, judgment, order or decree binding upon Buyer or
Merger Subsidiary, or (c) constitute a default under or give rise to any right
of termination, cancellation or acceleration of any right or obligation of
Buyer or Merger Subsidiary or to a loss of any benefit to which Buyer or
Merger Subsidiary is entitled under any agreement, contract or other
instrument binding upon Buyer or Merger Subsidiary.
SECTION 5.5. Disclosure Documents. (a) The information with
respect to Buyer and its subsidiaries that Buyer furnishes to the Company
specifically for use in any Company Disclosure Document will not contain, any
untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading (i) in the case of
the Company Proxy Statement at the time the Company Proxy Statement or any
amendment or supplement thereto is first mailed to stockholders of the
Company, at the time the stockholders vote on adoption of this Agreement and
at the Effective Time, and (ii) in the case of any Company Disclosure Document
other than the Company Proxy Statement, at the time of the filing thereof and
at the time of any distribution thereof.
(b) The Offer Documents, when filed, will comply as to form in
all material respects with the applicable requirements of the Exchange Act and
will not at the time of the filing thereof, at the time of any distribution
thereof or at the time of consummation of the Offer, contain any untrue
statement of a material fact or omit to state any material fact necessary to
make the statements made therein, in the light of the circumstances under
which they were made, not misleading, provided, that this representation and
warranty will not apply to statements or omissions in the Offer Documents
based upon information furnished to Buyer or Merger Subsidiary by the Company
specifically for use therein.
SECTION 5.6. Finders' Fees. Except for Morgan Stanley & Co.
Incorporated, whose fees will be paid by Buyer, there is no investment banker,
broker, finder or other intermediary who might be entitled to any fee or
commission from the Company or any of its affiliates upon consummation of the
transactions contemplated by this Agreement.
ARTICLE 6
COVENANTS OF THE COMPANY
SECTION 6.1. Conduct of the Company. Except as otherwise
contemplated by this Agreement, from the date hereof until the Effective Time,
the Company and the Subsidiaries shall conduct their business in the ordinary
course consistent with past practice and shall use their best efforts to
preserve intact their business organizations and relationships with third
parties and to keep available the services of their present officers and
employees. Without limiting the generality of the foregoing, from the date
hereof until the Effective Time:
(a) the Company will not adopt or propose any change in its
certificate of incorporation or bylaws;
(b) the Company will not, and will not permit any Subsidiary to,
merge or consolidate with any other Person or, other than purchases of
materials or products in the ordinary course of business consistent with
past practice, acquire a material amount of assets of any other Person;
(c) the Company will not, and will not permit any Subsidiary to,
sell, lease, license or otherwise dispose of any material assets or
property except (i) pursuant to existing contracts or commitments and
(ii) in the ordinary course consistent with past practice;
(d) the Company will not, and will not permit any Subsidiary to,
settle or compromise any suit or claims or threatened suit or claim
relating to the transactions contemplated hereby;
(e) without the prior written consent of Buyer, the Company will
not, and will not permit any Subsidiary to, enter into any agreement or
amendment to any agreement with IBM or UB Networks;
(f) the Company will not, and will not permit any Subsidiary to,
agree or commit to do any of the foregoing; and
(g) the Company will not, and will not permit any Subsidiary to,
take or agree or commit to take any action that would make any
representation and warranty of the Company hereunder inaccurate in any
material respect at, or as of any time prior to, the Effective Time.
SECTION 6.2. Stockholder Meeting; Proxy Material. The Company
shall cause a meeting of its stockholders (the "Company Stockholder Meeting")
to be duly called and held as soon as reasonably practicable following the
consummation of the Offer for the purpose of voting on the approval and
adoption of this Agreement and the Merger unless a vote of stockholders of the
Company is not required by Delaware Law. The Directors of the Company shall,
except as otherwise required by their fiduciary duties as advised by Company
Counsel, recommend approval and adoption of this Agreement and the Merger by
the Company's stockholders. In connection with such meeting, the Company (a)
will promptly prepare and file with the SEC, will use its best efforts to have
cleared by the SEC and will thereafter mail to its stockholders as promptly as
practicable the Company Proxy Statement and all other proxy materials for such
meeting, (b) will use its best efforts to obtain the necessary approvals by its
stockholders of this Agreement and the transactions contemplated hereby and
(c) will otherwise comply with all legal requirements applicable to such
meeting.
SECTION 6.3. Access to Information. From the date hereof until
the Effective Time, the Company will give Buyer, its counsel, financial
advisors, auditors and other authorized representatives reasonable access to
the offices, properties, books and records of the Company and the
Subsidiaries, will furnish to Buyer, its counsel, financial advisors, auditors
and other authorized representatives such financial and operating data and
other information as such Persons may reasonably request and will instruct the
Company's employees, counsel and financial advisors to cooperate with Buyer in
its investigation of the business of the Company and the Subsidiaries;
provided that no investigation pursuant to this Section shall affect any
representation or warranty given by the Company to Buyer hereunder.
SECTION 6.4. Other Offers. (a) From the date hereof until the
termination hereof, the Company and the Subsidiaries and the officers,
directors, employees or other agents of the Company and the Subsidiaries will
not, directly or indirectly, (i) solicit, initiate or (except as permitted by
(ii)) encourage any Acquisition Proposal or (ii) except as otherwise required
by the fiduciary duties of the Board of Directors under applicable law as
advised by Company Counsel, engage in negotiations with, or disclose any
nonpublic information relating to the Company or any Subsidiary or afford
access to the properties, books or records of the Company or any Subsidiary
to, any Person. The Company will promptly inform Buyer after receipt of any
Acquisition Proposal or any request for nonpublic information relating to the
Company or any Subsidiary or for access to the properties, books or records of
the Company or any Subsidiary by any Person that may be considering making,
or has made, an Acquisition Proposal and will keep Buyer fully informed of the
status and details of any such Acquisition Proposal or request. For purposes
of this Agreement, "Acquisition Proposal" means any offer or proposal for a
merger or other business combination involving the Company or any Subsidiary
or the acquisition of any equity interest in, or a substantial portion of the
assets of, the Company or any Subsidiary, other than the transactions
contemplated by this Agreement.
SECTION 6.5. Certain Events. The Company shall promptly inform
Buyer of:
(a) any notice or other communication from any Person alleging
that the consent of such Person is or may be required in connection with
the transactions contemplated by this Agreement;
(b) any notice or other communication from any governmental or
regulatory agency or authority in connection with the transactions
contemplated by this Agreement; and
(c) any actions, suits, claims, investigations or proceedings
commenced or, to the best of its knowledge threatened against, relating
to or involving or otherwise affecting the Company or any Subsidiary
which, if pending on the date of this Agreement, would have been required
to have been disclosed pursuant to Section 4.12 or which relate to the
consummation of the transactions contemplated by this Agreement.
ARTICLE 7
COVENANTS OF BUYER
SECTION 7.1. Obligations of Merger Subsidiary. Buyer will take
all action necessary to cause Merger Subsidiary to perform its obligations
under this Agreement and to consummate the Merger on the terms and conditions
set forth in this Agreement.
SECTION 7.2. Voting of Shares. Buyer agrees to vote all Shares
beneficially owned by it in favor of adoption of this Agreement at the Company
Stockholder Meeting.
SECTION 7.3. Director and Officer Liability. For five years
after the Effective Time, Buyer will cause the Surviving Corporation to
indemnify and hold harmless the present and former officers and directors of
the Company in respect of acts or omissions occurring up to and including the
Effective Time to the extent provided under the Company's certificate of
incorporation and bylaws in effect on the date hereof; provided that such
indemnification shall be subject to any limitation imposed from time to time
under applicable law. For five years after the Effective Time, Buyer will
cause the Surviving Corporation to use its best efforts to provide officers'
and directors' liability insurance in respect of acts or omissions occurring
up to and including the Effective Time covering each such Person currently
covered by the Company's officers' and directors' liability insurance policy
on terms with respect to coverage and amount no less favorable than those of
such policy in effect on the date hereof, provided that in no event shall
Buyer be obligated to pay in any year premiums in excess of the amount per
annum the Company paid in its last full fiscal year, which amount has been
disclosed to Buyer. Buyer shall guaranty the Surviving Corporation's
obligations under this Section; provided that Buyer shall not be obligated to
pay an aggregate amount in excess of the Company's net worth immediately prior
to the consummation of the Offer less any payments made by the Surviving
Corporation pursuant to this Section.
ARTICLE 8
COVENANTS OF BUYER
AND THE COMPANY
SECTION 8.1. Best Efforts. Subject to the terms and conditions
of this Agreement, each party will use its 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 under applicable laws and regulations to consummate the
transactions contemplated by this Agreement.
SECTION 8.2. Certain Filings. The Company and Buyer shall
cooperate with one another (a) in connection with the preparation of the
Company Disclosure Documents and the Offer Documents, and (b) in determining
whether any action by or in respect of, or filing with, any governmental body,
agency or official, or authority is required, or any actions, consents,
approvals or waivers are required to be obtained from parties to any material
contracts, in connection with the consummation of the transactions
contemplated by this Agreement and (c) in seeking any such actions, consents,
approvals or waivers or making any such filings, furnishing information
required in connection therewith or with the Company Disclosure Documents or
the Offer Documents and seeking timely to obtain any such actions, consents,
approvals or waivers.
SECTION 8.3. Public Announcements. Buyer and the Company will
consult with each other before issuing any press release or making any public
statement with respect to this Agreement and the transactions contemplated
hereby and, except as may be required by applicable law or any listing
agreement with any national securities exchange or automated quotation system,
will not issue any such press release or make any such public statement prior
to such consultation.
SECTION 8.4. Further Assurances. At and after the Effective
Time, the officers and directors of the Surviving Corporation will be
authorized to execute and deliver, in the name and on behalf of the Company or
Merger Subsidiary, any deeds, bills of sale, assignments or assurances and to
take and do, in the name and on behalf of the Company or Merger Subsidiary,
any other actions and things to vest, perfect or confirm of record or
otherwise in the Surviving Corporation any and all right, title and interest
in, to and under any of the rights, properties or assets of the Company
acquired or to be acquired by the Surviving Corporation as a result of, or in
connection with, the Merger.
ARTICLE 9
CONDITIONS TO THE MERGER
SECTION 9.1. Conditions to the Obligations of Each Party. The
obligations of the Company, Buyer and Merger Subsidiary to consummate the
Merger are subject to the satisfaction of the following conditions:
(a) if required by Delaware Law, this Agreement shall have been
adopted by the stockholders of the Company in accordance with such Law;
(b) any applicable waiting period under the HSR Act relating to
the Merger shall have expired or has been terminated;
(c) no provision of any applicable law or regulation and no
judgment, injunction, order or decree which is in effect at the
Effective Time shall prohibit the consummation of the Merger; and
(d) Buyer shall have purchased Shares pursuant to the Offer;
provided that the foregoing will not be a condition to the obligations
of Buyer and Merger Subsidiary if Buyer's failure to purchase Shares
violates the terms of the Offer.
ARTICLE 10
TERMINATION
SECTION 10.1. Termination. This Agreement may be terminated and
the Merger may be abandoned at any time prior to the Effective Time
(notwithstanding any approval of this Agreement by the stockholders of the
Company):
(a) by mutual written consent of the Company and Buyer;
(b) by either the Company or Buyer, if the Offer has not been
consummated by February 29, 1996;
(c) by either the Company or Buyer, if there shall be any law or
regulation that makes consummation of the Merger illegal or otherwise
prohibited or if any judgment, injunction, order or decree enjoining
Buyer or the Company from consummating the Merger is entered and such
judgment, injunction, order or decree shall become final and
nonappealable;
(d) by the Company, upon the occurrence of any Trigger Event
described in clause (i) of Section 11.4(b); or
(e) by Buyer, upon the occurrence of any Trigger Event described
in clauses (i) through (iii) of Section 11.4(b).
The party desiring to terminate this Agreement pursuant to clauses (b), (c),
(d) or (e) shall give written notice of such termination to the other party in
accordance with Section 11.1.
SECTION 10.2. Effect of Termination. If this Agreement is
terminated pursuant to Section 10.1, this Agreement shall become void and of
no effect with no liability on the part of any party hereto, except that the
agreements contained in Section 11.4 shall survive the termination hereof.
ARTICLE 11
MISCELLANEOUS
SECTION 11.1. Notices. All notices, requests and other
communications to any party hereunder shall be in writing (including telecopy
or similar writing) and shall be given,
if to Buyer or Merger Subsidiary, to:
Compaq Computer Corporation
20555 SH 249
Houston, TX 77070
FAX: (713) 518-8209
Attention: General Counsel
with a copy to:
Davis Polk & Wardwell
450 Lexington Avenue
New York, NY 10017
FAX: (212) 450-4800
Attention: Chris Mayer
if to the Company, to:
NetWorth, Inc.,
8404 Esters Boulevard
Irving, TX 75063
FAX: (214) 929-4804
Attention: John McHale
with a copy to:
Hughes & Luce, L.L.P.,
1717 Main Street, Suite 2800
Dallas, TX 75201
FAX: (214) 939-6100
Attention: R. Clayton Mulford
David Wood
or such other address or telecopy number as such party may hereafter specify
for the purpose by notice to the other parties hereto. Each such notice,
request or other communication shall be effective (a) if given by telecopy,
when such telecopy is transmitted to the telecopy number specified in this
Section and the appropriate telecopy confirmation is received or (b) if given
by any other means, when delivered at the address specified in this Section.
SECTION 11.2. Survival of Representations and Warranties. The
representations and warranties and agreements contained herein and in any
certificate or other writing delivered pursuant hereto shall not survive the
Effective Time or the termination of this Agreement except for the
representations, warranties and agreements set forth in Section 11.4.
SECTION 11.3. Amendments; No Waivers. (a) Any provision of this
Agreement may be amended or waived prior to the Effective Time if, and only
if, such amendment or waiver is in writing and signed, in the case of an
amendment, by the Company, Buyer and Merger Subsidiary or in the case of a
waiver, by the party against whom the waiver is to be effective; provided that
after the adoption of this Agreement by the stockholders of the Company, no
such amendment or waiver shall, without the further approval of such
stockholders, alter or change (i) the amount or kind of consideration to be
received in exchange for any shares of capital stock of the Company, (ii) any
term of the certificate of incorporation of the Surviving Corporation or (iii)
any of the terms or conditions of this Agreement if such alteration or change
would adversely affect the holders of any shares of capital stock of the
Company.
(b) No failure or delay by any party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights
and remedies herein provided shall be cumulative and not exclusive of any
rights or remedies provided by law.
SECTION 11.4. Fees and Expenses. (a) Except as otherwise
provided in this Section, all costs and expenses incurred in connection with
this Agreement shall be paid by the party incurring such cost or expense.
(b) The Company agrees to pay Buyer a fee in immediately
available funds equal to $10 million promptly, but in no event later than two
business days, after the termination of this Agreement as a result of the
occurrence of any of the events set forth below (a "Trigger Event"):
(i) the Company shall have entered into, or shall have
publicly announced its intention to enter into, an agreement or an
agreement in principle with respect to any Acquisition Proposal
which the Board of Directors has determined is more favorable to
the Company's shareholders than the transactions contemplated by
this Agreement, or the Board of Directors of the Company shall
have withdrawn or materially modified in any manner adverse to
Buyer the Board's approval or recommendation of the Offer or the
Merger;
(ii) any person or group (as defined in Section 13(d)(3) of
the Exchange Act) (other than Buyer, the Merger Subsidiary or any
affiliate thereof) shall have become the beneficial owner (as
defined in Rule 13d-3 promulgated under the Exchange Act) of a
majority of the outstanding Shares; or
(iii) the failure to consummate the Offer by February 29,
1996 as a result of the Company's breach or failure to perform in
any material respect any of its covenants or agreements under this
Agreement.
(c) The Company agrees to pay Buyer an amount in immediately
available funds equal to Buyer's direct out-of-pocket expenses in connection
with the transactions contemplated hereby but not in excess of $5 million
promptly, but in no event later than two business days, after the termination
of this Agreement pursuant to Section 10.1(b) where the failure to consummate
the Offer resulted from the representations and warranties of the Company set
forth in this Agreement being untrue in any material respect as of the date
hereof;
(d) The Buyer agrees to pay Company a fee in immediately
available funds equal to $10 million promptly, but in no event later than two
business days, after the termination of this Agreement pursuant to Section
10.1(b) where the failure to consummate the Offer resulted from the Buyer's
breach or failure to perform in any material respect any of its covenants or
agreements under this Agreement.
SECTION 11.5. Successors and Assigns. The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns, provided that no party may assign,
delegate or otherwise transfer any of its rights or obligations under this
Agreement without the consent of the other parties hereto except that Buyer
may transfer or assign, in whole or from time to time in part, to one or more
of its affiliates, the right to purchase shares pursuant to the Offer, but any
such transfer or assignment will not relieve Buyer of its obligations under
the Offer or prejudice the rights of tendering stockholders to receive payment
for Shares validly tendered and accepted for payment pursuant to the Offer.
SECTION 11.6. Governing Law. This Agreement shall be construed
in accordance with and governed by the law of the State of Delaware, without
regard to the conflict of laws principles thereof.
SECTION 11.7. Counterparts; Effectiveness. This Agreement may be
signed in any number of counterparts, each of which shall be an original, with
the same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement shall become effective when each party hereto
shall have received counterparts hereof signed by all of the other parties
hereto.
SECTION 11.8. Entire Agreement. This Agreement and the
Confidentiality and Nondisclosure Agreement dated September 18, 1995 between
Buyer and the Company constitute the entire agreement among Buyer, Merger
Subsidiary and the Company with respect to the subject matter hereof and
supersede all prior agreements and understandings, both written and oral,
among Buyer, Merger Subsidiary and the Company with respect to the subject
matter hereof.
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be duly executed by their respective authorized officers as
of the day and year first above written.
NETWORTH, INC.
By /s/ John F. McHale
John F. McHale
Chief Executive Officer
COMPAQ COMPUTER CORPORATION
By /s/ Eckhard Pfeiffer
Eckhard Pfeiffer
President and
Chief Executive Officer
COMPAQ-DALLAS, INC.
By /s/ Doug Pushard
Doug Pushard
Vice President
ANNEX I
Notwithstanding any other provision of the Offer, Buyer shall not
be required to accept for payment or pay for any Shares, and, subject to this
Agreement, may terminate the Offer, if (i) the Minimum Condition has not been
satisfied, (ii) the applicable waiting period under the HSR Act shall not have
expired or been terminated or (iii) at any time on or after November 5, 1995
and prior to the acceptance for payment of Shares, any of the following
conditions exist:
(a) there shall be instituted or pending any action or proceeding
by any government or governmental authority or agency, domestic or
foreign, before any court or governmental authority or agency, domestic
or foreign, (i) challenging or seeking to make illegal, to delay
materially or otherwise directly or indirectly to restrain or prohibit
the making of the Offer, the acceptance for payment of or payment for
some of or all the Shares pursuant to the Offer or the consummation of
the Merger, seeking to obtain material damages or otherwise directly or
indirectly relating to the transactions contemplated by the Offer or the
Merger, (ii) seeking to restrain or prohibit Buyer's ownership or
operation (or that of its respective subsidiaries or affiliates) of all
or any material portion of the business or assets of the Company and its
subsidiaries, taken as a whole, or of Buyer and its subsidiaries, taken
as a whole, or to compel Buyer or any of its subsidiaries or affiliates
to dispose of or hold separate all or any material portion of the
business or assets of the Company and its subsidiaries, taken as a
whole, or of Buyer and its subsidiaries, taken as a whole, (iii) seeking
to impose or confirm material limitations on the ability of Buyer or any
of its subsidiaries or affiliates effectively to exercise full rights of
ownership of the Shares, including, without limitation, the right to vote
any Shares acquired or owned by Buyer or any of its subsidiaries or
affiliates on all matters properly presented to the Company's
stockholders, or (iv) seeking to require divestiture by Buyer or any of
its subsidiaries or affiliates of any Shares, or (v) that otherwise is
reasonably likely to have a Material Adverse Effect or to materially
adversely affect Buyer and its subsidiaries, taken as a whole; or
(b) there shall be any action taken, or any statute, rule,
regulation, injunction, order or decree enacted, enforced, promulgated,
issued or deemed applicable to the Offer or the Merger, by any court,
government or governmental authority or agency, domestic or foreign
other than the application of the waiting period provisions of the HSR
Act to the Offer or the Merger, that is reasonably likely, directly or
indirectly, to result in any of the consequences referred to in clauses
(i) through (v) of paragraph (a) above; or
(c) any change shall have occurred or been threatened in the
business, assets, liabilities, financial condition, capitalization,
operations or results of operations of the Company or any of its
subsidiaries that has had or is reasonably likely to have a Material
Adverse Effect; or
(d) the Company shall have breached or failed to perform in any
material respect any of its covenants or agreements under the Merger
Agreement, or any of the representations and warranties of the Company
set forth in the Merger Agreement shall not be true in any material
respect when made or at any time prior to consummation of the Offer as
if made at and as of such time (except as to any representation or
warranty which speaks as of a specific date, which must be untrue as of
such a date); or
(e) the Merger Agreement shall have been terminated in accordance
with its terms; or
(f) the Company shall have entered into, or shall have publicly
announced its intention to enter into, an agreement or an agreement in
principle with respect to any Acquisition Proposal which the Board of
Directors has determined is more favorable to the Company's shareholders
than the transactions contemplated by this Agreement or the Board of
Directors of the Company shall have withdrawn or materially modified in
any manner adverse to Buyer the Board's approval or recommendation of
the Offer or the Merger; or
(g) any person or group (as defined in Section 13 (d)(3) of the
Exchange Act) (other than Buyer, the Merger Subsidiary or any affiliate
thereof) shall have become the beneficial owner (as defined in Rule 13d-3
promulgated under the Exchange Act) of a majority of the outstanding
Shares;
which, in the sole judgment of Buyer in any such case, and regardless of the
circumstances (including any action or omission by Buyer other than any breach
or violation of its covenants or agreements under this Agreement) giving rise
to any such condition, makes it inadvisable to proceed with such acceptance
for payment or payment.
CONFIDENTIALITY AND NONDISCLOSURE AGREEMENT
1. THIS AGREEMENT is effective 09/18/95 ("Effective Date"), and is made
by and between Compaq Computer Corporation ("COMPAQ"), a Delaware,
U.S.A. corporation and NetWorth, Inc. ("NETWORTH"), a Delaware,
U.S.A. corporation.
2. It is contemplated that NETWORTH may be disclosing certain
confidential and/or proprietary information to COMPAQ regarding a
Product Roadmap of NETWORTH's Hub and Switch Product Line
(hereinafter referred to as "Information"). COMPAQ and NETWORTH
agree that the terms of this Agreement shall apply to any Information
that may be disclosed between the Effective Date and 9/18/96, and
that such Information shall be treated in the manner described in
this Agreement.
3. COMPAQ acknowledges that the above-described Information is
confidential and/or proprietary to NETWORTH and is claimed to be a
valuable, special, and unique asset of NETWORTH. Accordingly,
NETWORTH and COMPAQ agree that, for a period of three (3) years from
the date any such Information is disclosed, COMPAQ will:
(a) maintain the Information in confidence;
(b) disclose such Information received from NETWORTH only to
its employees and subcontractors that have a need to know
such Information; and
(c) not disclose any portion of the Information received from
NETWORTH to any other third party without the prior
written consent of NETWORTH, even if such third party is
under similar restriction on disclosure with NETWORTH.
4. COMPAQ agrees to use the same degree of care to protect the
confidentiality of all Information it receives as it uses to protect
its own confidential and proprietary Information that it does not
wish to have published or disseminated. However, in no event shall
COMPAQ use less than a reasonable degree of care to protect the
Information received from NETWORTH.
5. Information disclosed by NETWORTH that NETWORTH, in good faith,
regards as confidential and/or proprietary shall be clearly marked as
"Confidential," "Proprietary," or bear any other appropriate notice
indicating the sensitive nature of such Information. Any Information
not easily marked, including Information that may be orally
disclosed, shall, at the time of disclosure, be identified as
confidential and, within thirty (30) days of its disclosure, be
summarized in writing and designated confidential by NETWORTH.
6. Information shall not be afforded the protection of this Agreement if
such Information:
(a) has been, is now, or later becomes publicly available through
no fault of COMPAQ;
(b) has been, is now, or later becomes rightfully learned by COMPAQ
from a third party who is not under restriction or duty imposed
by NETWORTH;
(c) has been, is now, or later is furnished to third parties by
NETWORTH if such disclosure is, or has been, made to third
parties without similar restriction;
(d) was known to COMPAQ prior to the date it received such
Information from NETWORTH; or,
(e) has been, is now, or later is independently developed by COMPAQ
without use of or resort to such Information.
7. If only a portion of the Information falls under one of the above
Subsections 6(a) - 6(e), then only that portion shall be excluded
from the terms and conditions of this Agreement.
8. If COMPAQ is confronted with legal action to disclose Information
received under this Agreement, COMPAQ shall promptly notify NETWORTH,
and reasonably assist NETWORTH in obtaining a protective order
requiring that any portion of the Information required to be
disclosed be used only for the purpose for which a court issues an
order, or for such other purposes as required by law.
9. All Information disclosed under this Agreement shall remain the
property of NETWORTH. At NETWORTH's request, all information
received by COMPAQ in tangible form shall be promptly returned or
destroyed.
10. The terms of confidentiality under this Agreement shall not be
construed to limit COMPAQ's right to independently develop or acquire
products, as long as such development or acquisition is not in
violation of the obligations of confidence of this Agreement.
Further, COMPAQ shall be free to use for any purpose (including but
not limited to, use in the development, manufacture, marketing, and
maintenance of its own products and services) the Residuals resulting
from access to or work with such Information, provided that COMPAQ
maintains the confidentiality of the Information as provided herein.
The term "Residuals" shall mean information in non-tangible form that
may be retained by persons who have had rightful access to the
Information, including ideas, concepts, know-how, or techniques
contained therein. Notwithstanding the provisions of this Section,
during the term of this Agreement, COMPAQ may not avoid its
obligations toward a particular item of Information merely by having
a person commit such item to memory so as to reduce it to a
non-tangible form. COMPAQ shall not have any obligation to limit or
restrict the assignment of any person, who has had access to the
Information, or to pay royalties for anything resulting from the use
of Residuals. However, the foregoing shall not be deemed to grant
COMPAQ a license under the NETWORTH's copyrights or patents.
11. Nothing in this Agreement shall be construed as granting a license to
any patent or copyright. The disclosure of Information shall
likewise not be construed as any representation, warranty, assurance,
guaranty, or inducement by NETWORTH with respect to infringement of
any patent or other proprietary right.
12. All notices required to be given shall be considered as given upon
certified or registered mailing, if postpaid and addressed as follows
(unless the addresses have been changed by written notice):
COMPAQ Computer Corporation
Attention: Legal Department
Mail Code 110701
P.O. Box 692000
Houston, TX 77269-2000
NetWorth, Inc.
Attention: John McHale
8404 Esters Boulevard
Irving, TX 75063
13. This Agreement shall be interpreted in accordance with the laws of
the State of Texas.
14. COMPAQ covenants that, absent any required prior authorization from
the Office of Export Licensing, U.S. Department of Commerce, it will
not knowingly export or re-export (as defined in Part 779 of the
Export Administration Regulations ("Regulations")), directly or
indirectly, through its affiliates, licensees, or subsidiaries, any
of the Information (or any product, process, or service resulting
directly therefrom) it receives hereunder, or under any ancillary
agreements, in violation of any applicable portion of the export rules
or Regulations.
15. This Agreement embodies the entire understanding between the parties
pertaining to the subject matter hereof. The parties acknowledge
that they are not relying on any representation, promise, or other
statement, whether written or oral, that is not expressly contained
in this Agreement. Neither party shall be obliged by this Agreement
to purchase the goods and/or services of the other party. This
Agreement shall not be modified except by a writing duly executed by,
or on behalf of, the party against whom such modification is sought
to be enforced.
16. IN WITNESS WHEREOF, the persons signing below warrant that they are
duly authorized to sign for, and on behalf of, the respective
parties. This Agreement has been executed in duplicate originals.
COMPAQ COMPUTER CORPORATION NETWORTH, INC.
By: /s/ Doug Pushard By: /s/ Paul Zito
___________________________ _______________________________
Name: Doug Pushard Print Name:
___________________________ _______________________________
Title: Vice President Print Title:
___________________________ _______________________________
Internetworking Products
___________________________ _______________________________
Date:_________________________ Date:__________________________
