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1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended September 30, 1996
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Transition Period From ____ to ____
Commission File Number 1-11237
AT&T CAPITAL CORPORATION
A DELAWARE I.R.S. EMPLOYER
CORPORATION NO. 22-3211453
44 Whippany Road, Morristown, New Jersey 07962-1983
Telephone Number 201-397-3000
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
_____ _____
At October 31, 1996, 90,000,000 shares of common stock, par value $.01 per
share, were outstanding.
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2 FORM 10-Q
AT&T CAPITAL CORPORATION AND SUBSIDIARIES
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in Thousands except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
For the Three Months For the Nine Months
Ended September 30, Ended September 30,
1996 1995 1996 1995
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Revenues:
Finance revenue $ 52,393 $ 46,793 $ 149,357 $ 127,825
Capital lease revenue 169,148 150,427 492,357 428,097
Rental revenue on
operating leases (A) 179,894 141,800 505,380 411,169
Equipment sales 24,012 10,375 72,608 27,356
Other revenue, net 45,162 46,486 150,792 146,204
-------- -------- --------- ---------
Total Revenues 470,609 395,881 1,370,494 1,140,651
-------- -------- --------- ---------
Expenses:
Interest 120,288 106,086 350,359 300,891
Operating and
administrative 126,762 116,456 375,172 351,443
Depreciation on
operating leases 117,394 88,328 329,336 259,487
Cost of equipment
sales 21,018 9,896 61,677 25,195
Provision for credit
losses 22,918 20,681 71,454 60,359
-------- -------- --------- ---------
Total Expenses 408,380 341,447 1,187,998 997,375
-------- -------- --------- ---------
Income before income
taxes 62,229 54,434 182,496 143,276
Provision for income
taxes 21,762 21,962 67,206 57,810
-------- -------- --------- ---------
Net Income $ 40,467 $ 32,472 $ 115,290 $ 85,466
======== ======== ========= =========
</TABLE>
(Continued)
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3 FORM 10-Q
AT&T CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Continued)
(Dollars in Thousands except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
For the Three Months For the Nine Months
Ended September 30, Ended September 30,
1996 1995 1996 1995
-------- -------- -------- -------
<S> <C> <C> <C> <C>
Earnings per common
share and common share
equivalent:
Earnings Per Share $ .85 $ .69 $ 2.43 $ 1.82
======== ======== ======== ========
Weighted average shares
outstanding (thousands): 47,565 47,195 47,497 47,063
======== ======== ======== ========
</TABLE>
(A) Includes $22,821 and $26,174 for the three months ended September 30,
1996 and 1995, respectively, and $67,224 and $66,398 for the nine
months ended September 30, 1996 and 1995, respectively, from AT&T
Corp.("AT&T") and its affiliates.
The accompanying notes are an integral part of these consolidated financial
statements.
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4 FORM 10-Q
AT&T CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands)
<TABLE>
<CAPTION>
September 30,
1996 December 31,
(Unaudited) 1995
----------- ------------
<S> <C> <C>
ASSETS:
Cash and cash equivalents $ 18,574 $ 3,961
Net investment in finance
receivables 2,017,835 1,800,636
Net investment in capital
leases 6,503,112 6,187,131
Investment in operating
leases, net of accumulated
depreciation of $716,763 in
1996 and $642,728 in 1995 1,284,868 1,117,636
Deferred charges and other assets 427,211 431,895
----------- ----------
Total Assets $10,251,600 $ 9,541,259
=========== ==========
LIABILITIES AND SHAREOWNERS' EQUITY:
Liabilities:
Short-term notes, less
unamortized discount of
$271 in 1996 and $9,698 in
1995 $ 3,021,459 $ 2,212,351
Deferred income taxes 498,927 555,296
Income taxes and other payables 545,467 581,000
Payables to AT&T and affiliates 71,478 360,429
Medium- and long-term debt 4,896,467 4,716,058
Commitments and contingencies
----------- -----------
Total Liabilities $ 9,033,798 $ 8,425,134
----------- -----------
</TABLE>
(Continued)
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5 FORM 10-Q
AT&T CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Continued)
(Dollars in Thousands)
<TABLE>
<CAPTION>
September 30,
1996 December 31,
(Unaudited) 1995
------------ ------------
<S> <C> <C>
Shareowners' Equity:
Common stock, one cent par value:
Authorized 100,000,000 shares,
issued and outstanding, 47,097,447
shares in 1996 and 46,968,810 shares
in 1995 $ 471 $ 470
Additional paid-in capital 786,163 783,244
Recourse loans to senior executives (20,923) (20,512)
Foreign currency translation
adjustments (2,804) (2,173)
Retained earnings 454,895 355,096
---------- ----------
Total Shareowners' Equity 1,217,802 1,116,125
---------- ----------
Total Liabilities and
Shareowners' Equity $10,251,600 $ 9,541,259
========== ==========
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
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6 FORM 10-Q
AT&T CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in Thousands)
(Unaudited)
<TABLE>
<CAPTION>
For The Nine Months
Ended September 30,
1996 1995*
---------- ----------
<S> <C> <C>
CASH FLOW FROM OPERATING ACTIVITIES:
Net income $ 115,290 $ 85,466
Noncash items included in income:
Depreciation and amortization 344,459 303,412
Deferred taxes (17,034) 30,983
Provision for credit losses 71,454 60,359
Gain on receivables securitizations (5,041) -
Gain on SBA and other loan sales (8,833) (7,467)
(Increase) decrease in deferred charges and
other assets (63,976) 74,293
Decrease in income taxes and
other payables (109,789) (32,583)
Increase (decrease) in payables to AT&T and
affiliates 1,782 (3,170)
----------- -----------
Net Cash Provided by Operating Activities 328,312 511,293
----------- -----------
CASH FLOW FROM INVESTING ACTIVITIES:
Purchase of businesses, net of cash acquired - (292,590)
Purchase of finance asset portfolios (148,109) (14,937)
Financings and lease equipment purchases (4,170,561) (3,819,016)
Principal collections from customers,
net of amounts included in income 3,041,912 2,871,692
Cash proceeds from receivables securitizations 128,830 81,475
Cash proceeds from SBA and other loan sales 119,890 92,047
----------- -----------
Net Cash Used for Investing Activities $(1,028,038) $(1,081,329)
----------- -----------
</TABLE>
(Continued)
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7 FORM 10-Q
AT&T CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Continued)
(Dollars in Thousands)
(Unaudited)
<TABLE>
<CAPTION>
For The Nine Months
Ended September 30,
1996 1995*
------------ -----------
<S> <C> <C>
CASH FLOW FROM FINANCING ACTIVITIES:
Increase (decrease)in short-term notes, net $ 790,842 $ (224,397)
Additions to medium and long-term debt 1,288,102 1,604,370
Repayments of medium and long-term debt (1,101,718) (906,495)
(Decrease) increase in payables to AT&T
and affiliates (247,397) 56,164
Dividends paid (15,490) (14,070)
--------- ---------
Net Cash Provided by Financing
Activities 714,339 515,572
--------- ---------
Net Increase (decrease) in Cash and Cash
Equivalents 14,613 (54,464)
Cash and Cash Equivalents at Beginning of Period 3,961 54,464
--------- ---------
Cash and Cash Equivalents at End of Period $ 18,574 $ 0
========= =========
</TABLE>
Non-Cash Investing and Financing Activities:
In the first nine months of 1996 and 1995, the Company entered into capital
lease obligations of $24,456 and $20,496, respectively, for equipment that was
subleased.
In the first nine months of 1996 and 1995, the Company assumed debt of $3,384
and $472,952, respectively, in conjunction with acquisitions.
* Certain 1995 amounts have been restated to conform to the 1996
presentation.
The accompanying notes are an integral part of these consolidated financial
statements.
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8 FORM 10-Q
AT&T CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Basis of Presentation
The accompanying unaudited consolidated financial statements have been
prepared by AT&T Capital Corporation and its subsidiaries ("AT&T Capital" or the
"Company") pursuant to the rules and regulations of the Securities and Exchange
Commission ("SEC") and, in the opinion of management, include all adjustments,
consisting of normal recurring adjustments, necessary for a fair presentation of
the results of operations, financial position and cash flows for each period
shown. The results for interim periods are not necessarily indicative of
financial results for the full year. See Notes 4 and 5 for discussion of Recent
and Subsequent Events. These unaudited consolidated financial statements should
be read in conjunction with the audited consolidated financial statements and
notes thereto included in the Company's Annual Report on Form 10-K for the year
ended December 31, 1995 and the current year's previously issued Form 10-Qs.
2. Shareowners' Equity
On April 19, 1996 and July 19, 1996, the Company's Board of Directors
declared dividends of $.11 per share. The dividends were paid on May 31, 1996
and August 30, 1996, respectively, to shareowners of record as of the close of
business on May 10, 1996 and August 9, 1996, respectively. As a result of the
Merger as defined in Note 5, Subsequent Events, the Company anticipates that it
will no longer pay dividends in the short-term, and may incur certain
obligations which may restrict the payment of future dividends.
3. Recent Pronouncements
Effective January 1, 1996, the Company adopted Statement of Financial
Accounting Standards ("SFAS") No. 123, "Accounting for Stock-Based
Compensation". This statement establishes financial accounting and reporting
standards for stock-based employee compensation plans. It allows companies to
choose either 1) a fair value method of valuing stock-based compensation plans
which will affect reported net income, or 2) to continue to follow the existing
accounting rules for stock option accounting but disclose what the impacts would
have been had the fair value method been adopted. The Company adopted the
disclosure alternative which requires annual disclosure of the pro forma net
income and earnings per share amounts assuming the fair value method was adopted
on January 1, 1995. As a result, the adoption of this standard did not have any
impact on the Company's consolidated financial statements.
In June 1996, the Financial Accounting Standards Board issued SFAS No. 125,
"Accounting for Transfers and Servicing of Financial Assets and Extinguishments
of Liabilities". This statement requires that liabilities and derivatives
incurred or obtained by transferors as part of a transfer of financial assets be
initially measured at fair value, if practical. It also requires that servicing
assets and other retained interests in the transferred assets be measured by
allocating the previous carrying amount between the assets sold, if any, and
retained interests, if any, based on their relative fair values at the date of
the transfer. This statement is effective for transfers and servicing of
financial assets and extinguishment of liabilities occurring after December 31,
1996 and application is prospective. Management does not expect the adoption of
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9 FORM 10-Q
this standard to have a material impact on the Company's consolidated financial
statements.
4. Recent Events
On September 20, 1995, AT&T announced a plan to pursue the public or
private sale of its remaining 86% interest in AT&T Capital. On such date, AT&T
also announced a plan to separate (the "Separation") into three publicly-held
stand-alone global businesses (AT&T, Lucent Technologies Inc. ("Lucent") and NCR
Corporation ("NCR"). In connection with the Separation, AT&T spun-off its entire
remaining equity interest in Lucent to AT&T shareowners on September 30, 1996.
The Separation is targeted by AT&T to be completed by the end of 1996, subject
to certain conditions. For a more detailed discussion of AT&T's restructuring
plans see Note 16 to the consolidated financial statements included in the
Company's Annual Report on Form 10-K for the year ended December 31, 1995.
In the second quarter of 1996, the Company executed an Operating Agreement
with each of Lucent and NCR, and entered into letter agreements with Lucent and
NCR regarding the applicability to Lucent and NCR of specified provisions of the
License Agreement and the Intercompany Agreement between the Company and AT&T.
The full texts of such Operating Agreements and letter agreements with Lucent
and NCR have been filed with the SEC.
The Company has paid a sales assistance fee ("SAF") to Lucent, which fee is
related to the volume of the Company's Lucent-related business. Under the terms
of its Operating Agreement with the Company, Lucent is prohibited from accepting
a SAF from any other provider of leasing services. In early 1996, following
Lucent's request, the Company agreed to pay a substantial increase in the SAF
for 1995, both as an absolute amount and as a percentage of volumes attributable
to Lucent. After giving effect to the increase, the SAF paid by the Company to
Lucent for 1995 was approximately double the 1994 fee. The Company and Lucent
recently agreed to a modified formula for calculating the SAF for the remaining
years of the term of Lucent's Operating Agreement (retroactive to January 1,
1996). The revised formula is expected to result in aggregate annual SAF which
are approximately double the amounts that would have been paid if the pre-1995
formula had been maintained.
On June 5, 1996, AT&T Capital entered into an Agreement and Plan of Merger
("the Merger Agreement") dated as of June 5, 1996, with AT&T, Hercules Limited
("Hercules") and Antigua Acquisition Corporation ("Antigua"). Hercules is owned
by Hercules Holdings (UK) Limited, which in turn is a wholly-owned subsidiary of
GRS Holding Company, Ltd., a U.K. rail leasing business.
On September 30, 1996 the Company, pursuant to a Gross Profit Tax Deferral
Interest Free Loan Agreement (the "GPTD Agreement") between the Company and
AT&T, made a payment of $247.4 million to AT&T for full repayment of such loans.
The GPTD Agreement required the Company to repay such loans immediately prior to
the Company no longer being a member of AT&T's consolidated group for federal
income tax purposes. Also on September 30, 1996, pursuant to the Merger
Agreement, the Company made a $35.0 million payment to AT&T in exchange for AT&T
assuming all tax liabilities associated with Federal and combined state taxes
for periods prior to the consummation of the Merger as defined in Note 5,
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10 FORM 10-Q
Subsequent Events.
5. Subsequent Events
On October 1, 1996, the Company completed its merger with a leasing
consortium including certain management team members (the "Merger"). As a result
of the Merger, AT&T Capital's shareowners received $45 in cash for each
outstanding share of the Company's Common Stock. The total Merger consideration
for the outstanding shares and stock options was approximately $2.2 billion.
Upon consummation of the Merger, Merger Sub, a wholly-owned subsidiary of
Hercules, was merged with and into the Company. For the pro forma impacts of the
Merger, refer to the Company's Form 8-K dated October 1, 1996.
In connection with the Merger, the Company incurred a $28.4 million
after-tax expense relating to the accelerated payout of the Company's Share
Performance Incentive Plan and other payments to certain officers of the
Company, and an $8.4 million after-tax expense relating to the Company's Merger
related and other transaction costs.
Also, in connection with the Merger, the Company's four rating agencies
took the following actions: Standard & Poor's ("S&P") lowered the Company's
senior medium and long-term debt and commercial paper, previously rated A and
A-1, to BBB and A-2, respectively; Duff & Phelps Credit Rating Co. ("Duff &
Phelps") lowered the Company's senior medium and long-term debt and commercial
paper, previously rated A and D-1, to BBB and D-2, respectively; Fitch Investor
Services ("Fitch"), which began rating the Company's commercial paper in May,
1996 lowered the Company's F-1 rating to F-2 and rated the Company's senior
medium and long-term debt BBB. Moody's Investors Service ("Moody's") has lowered
the Company's senior medium and long-term debt and commercial paper to Baa3 from
A-3 and P-3 from P-1, respectively.
On October 15, 1996 the Company securitized $3.0 billion of lease and loan
receivables (including $0.3 billion of receivables previously sold and recently
repurchased by the Company)(the "Securitization"). A portion of the
Securitization proceeds were used to finance the Merger transaction. In
connection with the Securitization the Company recorded an after-tax gain of
approximately $80 million.
On October 25, 1996 the Company issued to the public eight million
preferred securities for $25 per share. Holders of the securities will be
entitled to receive cash distributions at an annual rate of 9.06%, which is
guaranteed by the Company. The securities are rated BBB- by S&P, Fitch and Duff
& Phelps. Moody's has rated the securities ba2.
The consolidated financial statements reflect, and the future consolidated
financial statements of the Company will reflect, the historical cost of the
Company's assets and liabilities. Adjustments to the Company's consolidated
financial statements to reflect the fair value of the Company's assets and
liabilities as of the merger date ("push down" accounting) will not be reflected
due to the existence of substantial publicly traded debt of the Company.
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11 FORM 10-Q
AT&T CAPITAL CORPORATION AND SUBSIDIARIES
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
On October 1, 1996, the Company completed its merger with a leasing
consortium including certain management team members (the "Merger"). As a result
of the Merger, AT&T Capital's shareowners received $45 in cash for each
outstanding share of the Company's Common Stock. The total Merger consideration
for the outstanding shares and stock options was approximately $2.2 billion. On
October 15, 1996 the Company securitized $3.0 billion of lease and loan
receivables (including $0.3 billion of receivables previously sold and recently
repurchased by the Company) (the "Securitization"). On October 25, 1996 the
Company issued to the public eight billion Trust Originated Preferred Securities
("TOPrS")(the "Preferred Offering"). For a more detailed discussion of the
Merger, the Securitization, the Preferred Offering and their related impacts on
the Company, see Notes 4 and 5 to the unaudited consolidated financial
statements and the pro forma financial statements included in the Company's Form
8-K dated October 1, 1996.
RESULTS OF OPERATIONS
Three months ended September 30, 1996 versus September 30, 1995
Unless otherwise indicated, all period to period comparisons represent
balances or activity at or for the three months ended September 30, 1996 versus
September 30, 1995, respectively.
Net income of $40.5 million increased 24.6% from $32.5 million. Earnings
per share of $0.85 increased 23.4% from $0.69. These increases were generated
principally through increased portfolio revenues resulting from a higher level
of average net portfolio assets, increased computer trading activity and a lower
effective income tax rate. This activity was partially offset by increased
interest expense, operating and administrative ("O&A") expenses and provision
for credit losses, all of which were associated with a higher level of portfolio
assets.
Finance revenue of $52.4 million increased $5.6 million, or 12.0%. A 21.6%
increase in the average net finance receivables contributed $10.1 million of the
increase, while the decline in average yield from 11.28% to 10.39% offset this
increase by $4.5 million. The growth in the portfolio was primarily due to
increases in the large-ticket structured finance and certain small-ticket
portfolios. The decline in yield was experienced in certain large and
small-ticket portfolios. In connection with the Securitization, the Company's
net investment in finance receivables decreased by approximately $.1 billion. As
a result, the Company's average finance receivables will be lower and generate
less finance revenue in the future. However, the Company will earn portfolio
servicing fees for managing such securitized assets.
Capital lease revenue of $169.1 million increased $18.7 million, or 12.4%.
Of the total increase, $14.9 million was due to an 9.9% increase in the average
net capital lease portfolio. A strengthened yield of 10.56% up from 10.32%
contributed $3.8 million to the increase. The Company experienced higher yields
in certain small-ticket portfolios which were somewhat offset by lower yields in
certain international portfolios. In connection with the Securitization, the
Company's net investment in capital
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12 FORM 10-Q
leases decreased by approximately $2.8 billion. As a result, the Company's
average capital lease portfolio will be lower and generate less capital lease
revenue in the future. However, the Company will earn portfolio servicing fees
for managing such securitized assets.
Rental revenue on operating leases of $179.9 million increased 26.9% and
depreciation expense on operating leases of $117.4 million increased 32.9%.
Rental revenue less associated depreciation ("operating lease margin") was $62.5
million, or 34.7% of rental revenue, compared with $53.5 million, or 37.7% of
rental revenue. The decreased operating lease margin percent relates primarily
to increased depreciation on certain computer-related assets.
Net interest margin (finance revenue, capital lease revenue and rental
revenue, less depreciation on operating leases and interest expense) of $163.8
million or 6.76% of average net portfolio assets decreased slightly from 6.78%.
The decrease in the net interest margin percentage is consistent with the
decrease in the total portfolio yield from 11.75% to 11.72% and the increase in
average borrowings reflective of the increased debt to equity ratio (to 6.50
times from 6.07 times) partially offset by a decrease in the average cost of
debt (to 6.38% from 6.72%). The decrease in the third quarter cost of debt is
primarily due to a shift in the debt mix towards commercial paper, which carries
a lower cost.
Revenue from sales of equipment of $24.0 million increased from $10.4
million. Similarly, cost of equipment sales of $21.0 million increased from $9.9
million. Revenue from sales of equipment less associated cost of equipment sales
("equipment sales margin") was $3.0 million, or 12.5% of revenue from sales of
equipment compared to $0.5 million, or 4.6%. The increased equipment sales and
equipment sales margin was primarily due to a heightened demand for mainframes
and other emerging technology equipment.
Average borrowings outstanding of $7.5 billion increased 19.4%, or $1.2
billion. This increase was due to growth in portfolio assets and an increased
debt to equity ratio. The increased debt to equity ratio was impacted by the
Company's decision to defer its quarterly securitization in anticipation of the
merger-related Securitization. The Company anticipates that approximately 30% of
its annual financing volume originated each year will be securitized. Interest
expense of $120.3 million increased 13.4%, or $14.2 million. Higher average
borrowings contributed $20.6 million of the increase and was partially offset by
$6.4 million due to a decline in the average cost of debt.
In October, 1996, the Company repaid approximately $1.6 billion of
commercial paper with proceeds from the Securitization and Preferred Offering,
net of amounts used to purchase Company common stock. Consequently, the lower
borrowings outstanding will reduce the Company's interest expense. Conversely,
the Company's cost of debt in the future will be negatively impacted by the loss
of interest free loans from AT&T pursuant to a Gross Profit Tax Deferral
("GPTD") Interest Free Loan Agreement (the "GPTD Agreement"). As discussed below
in "Liquidity and Capital Resources", the Company's debt ratings were lowered in
connection with the Merger. As a result, the Company estimates its cost of
issuing debt will increase by approximately 20 to 25 basis points. See Notes 4
and 5 to the unaudited consolidated financial statements for further discussion
of the Merger, Securitization, Preferred Offering and other related
transactions.
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13 FORM 10-Q
O&A expenses of $126.8 million increased 8.9% from $116.5 million. This
increase was due to increased costs associated with managing a higher level of
assets. Third quarter annualized O&A expenses to quarter-end assets equaled
4.95% in 1996 and 5.16% in 1995. The ratio's improvement reflects strong asset
growth more than offsetting increased O&A costs. As a percentage of owned and
managed assets, three months annualized O&A expenses were 4.09% and 4.07% at
September 30, 1996 and 1995 respectively.
The provision for credit losses of $22.9 million increased 10.8% from $20.7
million. See "Credit Quality" below for a discussion of the provision for credit
losses.
The Company's effective income tax rate decreased to 35.0% from 40.3%. The
decrease in the overall effective income tax rate was due to several factors
including a lower impact of foreign taxes, a decrease in the effect of non-tax
deductible goodwill and other factors.
The Company's non-AT&T/Lucent businesses continue to make improved
contributions. Non-AT&T/Lucent businesses represented 67.7%, 63.1% and 40.7% of
total assets, revenues and net income, respectively, all increasing from 65.1%,
59.9% and 32.2%, respectively.
Nine months ended September 30, 1996 versus September 30, 1995
Unless otherwise indicated, all period to period comparisons represent
balances or activity at or for the nine months ended September 30, 1996 versus
September 30, 1995, respectively.
Net income of $115.3 million increased 34.9% from $85.5 million. Earnings
per share of $2.43 increased 33.7% from $1.82. These increases were generated
principally through increased portfolio revenues resulting from a higher level
of average net portfolio assets, increased computer trading activity, a gain on
a first quarter 1996 securitization of lease receivables and a lower effective
income tax rate. This activity was partially offset by increased interest
expense, O&A expenses and provision for credit losses all of which were
associated with a higher level of portfolio assets.
Finance revenue of $149.4 million increased 16.8% from $127.8 million. The
20.4% increase in average net finance receivables accounted for this increase.
The growth in the portfolio generated approximately $26.0 million of additional
revenue and was driven by increases in the large-ticket structured finance and
certain small-ticket portfolios. A decline in the overall average yield from
10.63% to 10.32% reduced revenue by $4.4 million. See the third quarter "Results
of Operations" discussion regarding the impact of the Securitization on future
finance revenue.
Capital lease revenue of $492.4 million increased 15.0% from $428.1
million. The 12.7% increase in the average net capital lease portfolio
contributed $54.5 million of the increase while an improved average yield of
10.45% from 10.24% contributed the remaining $9.8 million. The growth in the
portfolio primarily occurred in the small-ticket leasing portfolios and
international businesses. The improved yield was primarily due to increased
levels of higher yielding assets in certain small-ticket and automotive
portfolios. Also contributing to the increase were stronger yields in the
Company's mid-range and mainframe computer portfolios. See the third quarter
"Results of Operations" discussion regarding the impact
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14 FORM 10-Q
of the Securitization on future capital lease revenue.
Revenue on operating leases of $505.4 million increased 22.9% and
depreciation expense on operating leases of $329.3 million increased 26.9%.
Operating lease margin was $176.0 million, or 34.8% of rental revenue compared
with $151.7 million, or 36.9% of rental revenue. The increased revenue was
primarily generated in the Company's small-ticket telecommunication portfolios.
The decreased operating lease margin percent relates primarily to increased
depreciation on certain computer-related assets and certain small-ticket
portfolios.
Net interest margin of $467.4 million or 6.62% of average net portfolio
assets decreased slightly from 6.65%. While total portfolio yields were
relatively unchanged, the net interest margin percentage was impacted by the
increase in the debt to equity ratio partially offset by a decrease in the
average cost of debt (to 6.45% from 6.59%). The decrease in the cost of debt
resulted from the issuance of medium and long-term debt at a lower cost than the
maturing debt and a shift in the mix toward commercial paper.
Revenue from sales of equipment of $72.6 million increased from $27.4
million. Similarly, cost of equipment sales of $61.7 million increased from
$25.2 million. Equipment sales margin of $10.9 million, or 15.1% of revenue from
sales of equipment increased from $2.2 million, or 7.9%. The revenue and margin
improvements were primarily due to a heightened demand for mainframes and other
emerging technology equipment.
Other revenue increased 3.1% to $150.8 million from $146.2 million. This
increase resulted primarily from a $5.0 million pre-tax gain relating to a
securitization of $75.2 million of lease receivables in the first quarter of
1996. No lease receivables were securitized during the first three quarters of
1995. As a result of the Securitization, the Company will recognize a pre-tax
gain of approximately $133 million in the fourth quarter. In the future, the
Company will also recognize portfolio servicing fees for managing such
securitized assets. As previously discussed, the Company anticipates that
approximately 30% of its annual financing volume originated each year will be
securitized.
Average borrowings outstanding of $7.2 billion increased 18.9%, or $1.2
billion. This increase was primarily due to growth in portfolio assets and an
increased debt to equity ratio. Interest expense of $350.4 million increased
16.4%, or $49.5 million. Higher average borrowing contributed $57.1 million of
the increase and was partially offset by $7.6 million due to a decline in the
average cost of debt. See the third quarter "Results of Operations" discussion
regarding certain expected increases and decreases in the Company's cost of debt
as a result of the Merger, Securitization, Preferred Offering and other related
transactions.
O&A expenses of $375.2 million increased 6.8% from $351.4 million. This
increase was due to increased costs associated with managing a higher level of
assets. At September 30, 1996, nine months annualized O&A expenses to
quarter-end total assets decreased to 4.88% from 5.19%. A majority of the
Company's operations contributed to the improvement due to increased utilization
of infrastructure, increased operating efficiencies and increased total assets.
As a percentage of quarter-end total owned and managed assets, nine months
annualized O&A expenses were 4.03% and 4.09% at September 30, 1996 and 1995,
respectively.
<PAGE>
<PAGE>
15 FORM 10-Q
The provision for credit losses of $71.5 million increased 18.4% from $60.4
million. See "Credit Quality" below for a discussion of the provision for credit
losses.
The Company's effective income tax rate of 36.8% decreased from 40.3%. The
decrease in the overall effective tax rate was due to several factors, including
a lower impact of both state and foreign taxes, a decrease in the effect of
non-tax deductible goodwill and other factors.
Non-AT&T/Lucent businesses represented 67.7%, 62.2% and 32.7% of the total
assets, revenues and net income, respectively, all increasing from 65.1%, 57.8%
and 15.7%, respectively. The increases in the asset and revenue mix was
generated widely across the Company's businesses. The increase in the net income
percentage was due to growth in certain small-ticket, automobile and
large-ticket specialty and structured finance portfolios, as well as a
securitization of lease receivables in the first quarter of 1996. Without such
securitization, the non-AT&T/Lucent businesses would have contributed 30.9% of
the total net income.
CREDIT QUALITY
The active management of credit losses is an important element of the
Company's business. The Company seeks to minimize its credit risk through
diversification of its portfolio assets by customer, industry segment,
geographic location and maturity. The Company's financing activities have been
spread across a wide range of equipment types (e.g., telecommunications, general
equipment (such as general office, manufacturing and medical equipment),
information technology and transportation) and real estate and a large number of
customers located throughout the United States and, to a lesser extent, abroad.
The following chart reflects the Company's portfolio credit performance
indicators:
<TABLE>
<CAPTION>
At At
September 30, December 31,
(dollars in millions) 1996 1995 1995
- ---------------------------------------------------------------------------
<S> <C> <C> <C>
Allowance for credit losses $235.2 $214.7 $223.2
Nonaccrual assets $148.3 $101.9 $118.5
Net charge-offs*/Portfolio assets 0.76% 0.57% 0.50%
Allowance for credit losses/Portfolio assets 2.34% 2.41% 2.39%
Nonaccrual assets/Portfolio assets 1.48% 1.15% 1.27%
Delinquency (two months or greater) 2.13% 1.31% 1.46%
</TABLE>
(*) Net charge-offs are based upon the twelve months ended September 30, 1996
and 1995 and December 31, 1995.
At or for the nine months ended September 30, 1996, nonaccrual assets, net
charge-offs and delinquencies increased from the comparable prior year period.
An increased level of portfolio assets largely drove the increase in allowance,
nonaccruals and provision levels. Also contributing to the increases were a
large write-off in 1996, previously included in nonaccrual assets, and a large
delinquent financing in the Company's structured finance portfolio and certain
retail industry-related accounts.
The Company maintains an allowance for credit losses at a level management
believes is adequate to cover estimated losses in the portfolio
<PAGE>
<PAGE>
16 FORM 10-Q
based on a review of historical loss experience, a detailed analysis of
delinquencies and problem portfolio assets, and an assessment of probable losses
in the portfolio as a whole, given its diversification. Management also takes
into consideration the potential impact of existing and anticipated economic
conditions.
Certain credit statistics will be impacted as a result of the
Securitization. The Company's allowance for credit losses is expected to
decrease approximately pro rata with the decrease in the Company's portfolio
assets. In addition, certain credit ratios which include portfolio assets (e.g.
nonaccrual assets/portfolio assets) will increase. Management believes that the
Company's allowance for credit losses continues to be adequate to cover
estimated losses on portfolio assets.
FINANCIAL CONDITION
Net portfolio assets increased 7.6% or $0.7 billion to $9.8 billion at
September 30, 1996 compared to December 31, 1995. A significant portion of the
growth was generated from U.S. businesses, primarily in small-ticket portfolios.
In August, 1996, the Company acquired a $162 million Canadian office equipment
and automobile leasing portfolio. The growth was slightly offset by the sale of
$95.7 million of SBA and other loans, and a $75.2 million securitization of
lease receivables. As of September 30, 1996, both the composition of the
portfolio assets by financing product as well as by type of equipment remained
relatively consistent with December 31, 1995. As a result of the Securitization,
the Company's net portfolio assets decreased by $2.9 billion. The Securitization
decreased net investment in capital leases by $2.8 billion and net investment in
finance receivables by $.1 billion.
At September 30, 1996, the total portfolio assets managed by the Company on
behalf of others (including assets formerly owned by the Company which have been
previously securitized) was $2.2 billion, approximately the same as at December
31, 1995. Increases in managed assets were experienced in the AT&T and SBA
portfolios. Normal portfolio run-off offset such increases. Of the total assets
managed by the Company on behalf of others, 69.0% at September 30, 1996 and
68.0% at December 31, 1995 were assets managed on behalf of AT&T and its
affiliates.
On October 15, 1996, the Company securitized through a public placement,
$3.0 billion of lease and loan receivables (which includes $0.3 billion of
receivables previously sold and recently repurchased by the Company). A portion
of the Securitization proceeds were used to finance the Merger transaction. As a
result of the Securitization, the Company's managed asset base will
substantially increase to approximately $5.0 billion. Correspondingly, the AT&T
managed portfolio will drop to approximately one-third of total managed assets.
LIQUIDITY AND CAPITAL RESOURCES
The Company generates a substantial portion of its funds to support the
Company's operations from lease and rental receipts, but is also highly
dependent upon external financing, including the issuance of commercial paper
and medium and long-term debt in public markets, foreign bank lines of credit
and, historically to a lesser extent, privately placed asset-backed financings
(or securitizations). As a key part of the Company's on-going financing strategy
to manage leverage and credit risk, the Company
<PAGE>
<PAGE>
17 FORM 10-Q
currently anticipates that approximately 30% of its annual financing volume
originated each year will be securitized through public and/or private
securitizations. As a result, the Company may securitize additional assets in
the fourth quarter of 1996.
The Securitization and anticipated ongoing securitizations of approximately
30% of annual volumes will have significant impacts on the Company's financial
results depending upon their timing and magnitude. These impacts, some of which
are described in the Results of Operations, include, but are not limited to, the
following: net investment in finance receivables and capital leases (including
residual values, allowance for credit losses and initial direct costs) will
decrease; lower asset levels will result in lower finance revenue and capital
lease revenue; cash proceeds generated from the sale will generally be used to
reduce debt; lower debt levels will reduce interest expense and leverage;
securitization gains will typically be generated as the assets are sold; fees
will be earned for servicing the portfolios; residual values will be frozen at
the present value at the time of securitization and reclassified to other assets
and deferred charges; capital lease revenue will no longer be recognized on the
residuals; with lower carrying values of frozen residuals, income (losses)
generated from renewals and sales of assets at end of lease will be higher
(lower) than if the assets were not securitized; yields and margins on owned
assets are likely to be lower due to the fact the securitizations will typically
include small-ticket products which generally have higher yields and margins;
portfolio quality measures such as delinquency, non-accrual assets, and net
charge-offs/portfolio assets will likely increase due to the sale of generally
better performing assets (these same measures on an owned and managed asset
basis would not be affected by the Securitization); assets, revenues and income
derived from the AT&T/Lucent businesses will change; finally, productivity
measures such as O&A to period end total assets will increase due to the
reduction in the asset base (this measure on an owned and managed asset basis
would not be affected by the Securitization).
In connection with the Merger, the Company's four rating agencies took the
following actions: Standard & Poor's ("S&P") lowered the Company's senior medium
and long-term debt and commercial paper, previously rated A and A-1, to BBB and
A-2, respectively; Duff & Phelps Credit Rating Co. ("Duff & Phelps") lowered the
Company's senior medium and long-term debt and commercial paper, previously
rated A and D-1, to BBB and D-2, respectively; Fitch Investor Services
("Fitch"), which began rating the Company's commercial paper in May, 1996
lowered the Company's F-1 rating to F-2 and rated the Company's senior medium
and long-term debt BBB. Moody's Investors Service ("Moody's") has lowered the
Company's senior medium and long-term debt and commercial paper to Baa3 from A-3
and P-3 from P-1, respectively. See "Results of Operations" for discussion of
the impact on interest expense.
In the first nine months of 1996, the Company issued short-term notes
(principally commercial paper) of $29.9 billion and made repayments of $29.1
billion, and issued medium and long-term debt of $1.3 billion and repaid $1.1
billion. In the first nine months of 1995, the Company issued short-term notes
of $18.8 billion and made repayments of $19.0 billion and issued medium and
long-term debt of $1.6 billion and repaid $0.9 billion.
During the nine months ended September 30, 1996 and 1995, principal
collections from customers, proceeds from securitized receivables and
<PAGE>
<PAGE>
18 FORM 10-Q
proceeds from SBA and other loan sales of $3.3 billion and $3.0 billion,
respectively, were received. These receipts were primarily used for
finance receivables and lease equipment purchases (including purchases of
finance asset portfolios and businesses) of $4.3 billion and $4.1 billion,
respectively, in the first nine months of 1996 and 1995.
On May 31, and August 30, 1996, the Company paid dividends of eleven cents
per share to shareowners of record as of May 10, and August 9, 1996,
respectively. As a result of the Merger, the Company anticipates that it will no
longer pay dividends in the short-term, and may incur certain obligations which
may restrict the payment of future dividends.
In September 1995, the Company registered with the SEC $3.0 billion of debt
securities (including medium-term notes) and warrants to purchase debt
securities, currency warrants, index warrants and interest rate warrants. At
September 30, 1996, $0.7 billion of medium and long-term debt was available
under such debt registration.
In September 1996, the Company renegotiated its back-up credit facility of
$1.8 billion. This facility, negotiated with a consortium of 24 lending
institutions, supports the commercial paper issued by the Company. At September
30, 1996, this facility was unused. Under the most restrictive provision of the
Company's back-up facility, the Company is required to initially maintain a
minimum consolidated tangible net worth of $500.0 million. The Company is in
compliance with this and all other covenants of the agreement.
The Company also has available local lines of credit to meet local funding
requirements in Europe, Asia/Pacific and Canada of approximately $0.9 billion,
of which approximately $0.6 billion was available at September 30, 1996.
In October 1996, under the Preferred Offering, a wholly-owned subsidiary of
the Company issued to the public eight million preferred securities for $25 per
share. Holders of the securities will be entitled to receive cash distributions
at an annual rate of 9.06%, which is guaranteed by the Company. The securities
are rated BBB- by S&P, Fitch and Duff & Phelps. Moody's has rated the preferred
securities ba2.
Prior to the Merger, the Company has, from time to time, borrowed funds
directly from AT&T, including on an interest-free basis pursuant to the GPTD
Agreement. As a result of the Merger, the Company is no longer a member of
AT&T's consolidated group for federal income tax purposes and was required to
repay to AT&T $247.4 million of interest free loans.
Future financing is contemplated to be arranged as necessary to meet the
Company's capital and other requirements with the timing of issue, principal
amount and form depending on the Company's needs and prevailing market and
general economic conditions.
The Company considers its current financial resources, together with the
debt facilities referred to above and estimated future cash flows from its
portfolio assets, to be adequate to fund the Company's future growth and
operating requirements.
ASSET AND LIABILITY MANAGEMENT
<PAGE>
<PAGE>
19 FORM 10-Q
AT&T Capital's asset and liability management process takes a coordinated
approach to the management of interest rate and foreign currency risks. The
Company's overall strategy is to match the duration and average cash flows of
its borrowings with the duration and average cash flows of its portfolio assets,
as well as the currency denominations of its borrowings with those of its
portfolio assets, in a manner intended to reduce the Company's interest rate and
foreign currency exposure.
At September 30, 1996, the total notional amount of the Company's interest
rate and currency swaps was $1.4 billion and $0.6 billion, respectively, as
compared to $2.2 billion and $.3 billion, respectively, as of December 31, 1995.
The U.S. dollar equivalent of the Company's foreign currency forward exchange
contracts was $0.8 billion and $0.7 billion at September 30, 1996 and December
31, 1995, respectively.
There were no past due amounts or reserves for credit losses at September
30, 1996 related to derivative transactions. The Company has never experienced a
credit related charge-off associated with derivative transactions.
RECENT PRONOUNCEMENTS
See Note 3 to the unaudited consolidated financial statements.
RECENT EVENTS
See Note 4 to the unaudited consolidated financial statements.
SUBSEQUENT EVENTS
See Note 5 to the unaudited consolidated financial statements.
<PAGE>
<PAGE>
20 FORM 10-Q
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits:
Exhibit Number
10(a) Amendment to the AT&T Capital Corporation 1995 Senior
Executive Annual Incentive Plan dated October 1, 1996.
10(b) Amendment to the AT&T Capital Corporation Supplemental
Executive Retirement Plan dated October 1, 1996.
10(c) Amendment to Share Performance Award under the AT&T
Capital Corporation 1993 Long-Term Incentive Plan dated
October 1, 1996.
10(d) Amendment Number 2 to the AT&T Capital Corporation 1993 Share
Performance Incentive Plan dated October 1, 1996.
10(e) 1996 AT&T Capital Corporation Leadership Severance Plan
effective October 1, 1996.
10(f) Employment Agreement between Antigua Acquisition
Corporation and Thomas C. Wajnert dated September 30,
1996.
10(g) AT&T Capital Corporation Stock Option Agreement dated
October 1, 1996.
10(h) AT&T Capital Corporation 1996 Long term Incentive Plan dated
October 1, 1996.
10(i) Credit Agreement dated as of September 16, 1996, among AT&T
Capital Corporation, the Banks Listed Herein and Morgan
Guaranty Trust Company of New York, as Agent (5-year term).
10(j) Credit Agreement dated as of September 16, 1996, among AT&T
Capital Corporation, the Banks Listed Herein and Morgan
Guaranty Trust Company of New York, as Agent (364-day term).
11 Computation of Primary and Fully Diluted Earnings Per
Share.
12 Computation of Ratio of Earnings to Fixed Charges.
27 Financial Data Schedule.
(b) Current reports on Form 8-K:
Report on Form 8-K, dated October 1, 1996 was filed pursuant to
Item 1 (Changes in Control of the Registrant), Item 5 (Other
Events) and Item 7 (Financial Statements and Exhibits).
Report on Form 8-K, dated August 19, 1996, was filed pursuant to
Item 5.
<PAGE>
<PAGE>
21 FORM 10-Q
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
AT&T CAPITAL CORPORATION
November 13, 1996
Ramon Oliu, Jr.
Controller
Chief Accounting Officer
<PAGE>
<PAGE>
22 FORM 10-Q
EXHIBIT INDEX
EXHIBITS
<TABLE>
<CAPTION>
Exhibit Description
Number
- ------
<C> <S>
10(a) Amendment to the AT&T Capital Corporation 1995 Senior Executive
Annual Incentive Plan dated October 1, 1996.
10(b) Amendment to the AT&T Capital Corporation Supplemental
Executive Retirement Plan dated October 1, 1996.
10(c) Amendment to Share Performance Award under the AT&T Capital Corporation
1993 Long-Term Incentive Plan dated October 1, 1996.
10(d) Amendment Number 2 to the AT&T Capital Corporation 1993 Share
Performance Incentive Plan dated October 1, 1996.
10(e) 1996 AT&T Capital Corporation Leadership Severance Plan effective
October 1, 1996.
10(f) Employment Agreement between Antigua Acquisition Corporation and
Thomas C. Wajnert dated September 30, 1996.
10(g) AT&T Capital Corporation Stock Option Agreement dated October 1,
1996.
10(h) AT&T Capital Corporation 1996 Long Term Incentive Plan dated
October 1, 1996.
10(i) Credit Agreement dated as of September 16, 1996, among AT&T Capital
Corporation, the Banks Listed Herein and Morgan Guaranty Trust Company
of New York, as Agent (5-year term).
10(j) Credit Agreement dated as of September 16, 1996, among AT&T Capital
Corporation, the Banks Listed Herein and Morgan Guaranty Trust
Company of New York, as Agent (364-day term).
11 Computation of Primary and Fully Diluted Earnings Per Share.
12 Computation of Ratio of Earnings to Fixed Charges.
27 Financial Data Schedule.
</TABLE>
STATEMENT OF DIFFERENCES
------------------------
The section symbol shall be expressed as ...................... ss.
The "less than or equal to" symbol shall be expressed as ...... <=
The pound sterling symbol shall be expressed as ............... (pound)
<PAGE>
<PAGE>
1 Exhibit 10(a)
FORM 10-Q for the Quarter
Ended September 30, 1996
Amendment to the 1995 Senior Executive Annual Incentive Plan
Pursuant to resolutions adopted by the Board of Directors of AT&T Capital
Corporation (dated October 1, 1996), the 1995 Senior Executive Annual Incentive
Plan (the "Plan") is hereby amended effective as of the Effective Time of the
merger among AT&T Capital Corporation, AT&T Corp., Hercules Limited, and Antigua
Acquisition Corporation, contemplated by the Agreement and Plan of Merger, dated
as of June 5, 1996, among such entities:
RESOLVED: that the AT&T Capital Corporation 1995 Senior Executive Annual
Incentive Plan (the "Plan") is hereby amended, as set forth below, effective as
of the Effective Time of the merger among AT&T Capital Corporation, AT&T Corp.,
Hercules Limited, and Antigua Acquisition Corporation, contemplated by the
Agreement and Plan of Merger, dated as of June 5, 1996, among such entities.
Section 3(b) of the Plan is hereby amended by adding a new sentence at the
end thereof to read as follows:
"Notwithstanding anything to the contrary in this Section 3(b), each Executive
who is an Executive on the last day of the 1996 Plan Year shall be entitled to
an Award for the 1996 Plan Year that is not less than such Executive's Target
Award for the 1996 Plan Year."
<PAGE>
<PAGE>
1 Exhibit 10(b)
FORM 10-Q for the Quarter
Ended September 30, 1996
Amendment to the Supplemental Executive Retirement Plan
Pursuant to resolutions adopted by the Board of Directors of AT&T
Capital Corporation (dated October 1, 1996), the Supplemental Executive
Retirement Plan (the "Plan") is hereby amended effective as of the Effective
Time of the merger among AT&T Capital Corporation, AT&T Corp., Hercules Limited,
and Antigua Acquisition Corporation, contemplated by the Agreement and Plan of
Merger, dated as of June 5, 1996, among such entities:
RESOLVED: that the AT&T Capital Corporation Supplemental Executive
Retirement Plan (the "Plan") is hereby amended, as set forth below, effective as
of the Effective Time of the merger among AT&T Capital Corporation, AT&T Corp.,
Hercules Limited, and Antigua Acquisition Corporation, contemplated by the
Agreement and Plan of Merger, dated as of June 5, 1996, among such entities.
Section 9 of the Plan is hereby amended by adding the following at the
end of the first sentence and beginning of the second sentence thereof:
"; provided that in no event shall any amendment or termination of the Plan
reduce or eliminate any benefits accrued prior to the effective date of such
amendment or termination. Except as provided in the immediately preceding
sentence,"
<PAGE>
<PAGE>
1 Exhibit 10(c)
FORM 10-Q for the Quarter
Ended September 30, 1996
AMENDMENT TO SHARE PERFORMANCE AWARD UNDER THE 1993 LONG-TERM
INCENTIVE PLAN
RESOLVED: that the Board of Directors hereby approves the share performance
incentive award (the "Award") under the AT&T Capital Corporation 1993 Long-Term
Incentive Plan (the "Plan"), as set forth below, effective as of the Effective
Time of the merger among AT&T Capital Corporation, AT&T Corp., Hercules Limited,
and Antigua Acquisition Corporation, contemplated by the Agreement and Plan of
Merger, dated as of June 5, 1996, among such entities:
1. Section 2(b) of your Award is amended by adding at the end thereof the
following new clauses (iv), (v) and (vi):
"(iv) Notwithstanding anything to the contrary in this Section 2(b), upon
the consummation of the merger (the "Effective Time") among AT&T Capital
Corporation, AT&T Corp., Hercules Limited, and Antigua Acquisition Corporation
contemplated by the Agreement and Plan of Merger, dated as of June 5, 1996,
among such entities (the "Merger Agreement"), the Company shall pay to the
Employee (i) 100% of the Employee's Maximum Payout (without discount) for each
pending Performance Period and (ii) with respect to any Performance Period
completed within twelve (12) months prior to the Effective Time, the excess of
(A) 100% of the Maximum Payout for the Employee for such Performance Period over
(B) the payment actually made to the Employee for such Performance Period.
(v) Notwithstanding anything to the contrary in this Section 2(b), with
respect to each Performance Period which has not commenced as of the Effective
Time, the Award payout for the Employee will be equal to 100% of the Employee's
Maximum Payout (without discount) for such Performance period; provided,
however, that if the Employee is not a member of the Company's Leadership Forum,
such payment of 100% of the Employee's Maximum Payout will not be made unless
the Employee has entered into an agreement with Hercules Limited and the
"Surviving Corporation" (as defined in the Merger Agreement) to revise the terms
of the Company's Leadership Severance Plan or the Company's Member Severance
Plan, as applicable, to modify the definition of "Qualifying Termination" in
such plans, as it applies to the Employee. In the event an Award Payout is not
made to the Employee pursuant to this clause (v), Performance Periods beginning
after the Effective Time will continue pursuant to the terms of this Agreement
(without regard to this clause (v)) with respect to the Employee.
(vi) Notwithstanding anything in the contrary in this Section 2(b), all
payments to be made under clauses (iv) and (v) above shall be made promptly (but
not later than 30 days) following the Effective Time."
<PAGE>
<PAGE>
1 Exhibit 10(d)
FORM 10-Q for the Quarter
Ended September 30, 1996
Amendment Number 2 to 1993 Share Performance Incentive Plan
Pursuant to resolutions adopted by the Board of Directors of AT&T Capital
Corporation (dated October 1, 1996), the AT&T Capital Corporation 1993 Share
Performance Incentive Plan (the "Plan") is hereby amended and supplemented
effective June 5, 1996 as set forth below:
1. Section 2 of the Plan is amended and supplemented by adding the
following new paragraph (ap) at the end thereof:
(ap) "Private Sale" means any Change in Control that results in, or will
have the result of, the Common Stock no longer being publicly traded on a
national securities exchange or traded on the NASDAQ over-the-counter market.
2. Section 5 of the Plan is amended and supplemented by adding the
following Section 5.3 at the end thereof:
5.3 Private Sale. (a) Notwithstanding anything in Sections 5.1 or 5.2 to
the contrary, upon the occurrence of a Private Sale during the term of the Plan,
the Company shall promptly pay to each Participant (i) 100% of such
Participant's Maximum Payout (without discount) for each pending Performance
Period under the Plan and (ii) with respect to any Performance Period completed
within twelve (12) months prior to such Private Sale, the excess of (A) 100% of
the Maximum Payout for such Participant for such Performance Period over (B) the
payment actually made to the Participant for such Performance Period.
(b) Subject to Section 5.2 hereof, following any Award Payout for pending
and completed Performance Periods under this Section 5.3, Award Payouts with
respect to any Performance Periods beginning after the occurrence of a Private
Sale will be determined in accordance with the provisions of Section 4 hereof
without modification.
<PAGE>
<PAGE>
1 EXHIBIT 10(e)
FORM 10-Q for the Quarter
Ended September 30, 1996
AT&T CAPITAL CORPORATION LEADERSHIP SEVERANCE PLAN
The purpose of the 1996 AT&T Capital Corporation Leadership Severance Plan is to
provide severance benefits to certain of the management employees of AT&T
Capital Corporation (the "Company") and its Subsidiaries.
1. Definitions. As used in this Plan, the following terms shall have
respective meanings set forth below:
(a)"Board" means the Board of Directors of the Company.
(b)"Cause" means (i) a Participant's commission or conviction of a felony
(or guilty or nolo contendere plea in connection therewith); (ii) a
determination by the Board or the Committee that a Participant has
defrauded the Company; or (iii) a determination by the Board or the
Committee that a Participant has committed a material breach of the
duties and responsibilities of the Participant that has caused
significant adverse harm to the Company, which breach is (A)
demonstrably willful and deliberate, (B) committed in bad faith or
without reasonable belief that such breach is in the best interests of
the Company and (C) not remedied within a reasonable period of time
after receipt of written notice from the Company specifying such breach.
(c)"Closing Date" shall have the same meaning as in the Agreement and Plan
of Merger among AT&T Capital Corporation, AT&T Corp., Hercules Limited
and Antigua Acquisition Corporation, dated as of June 5, 1996, and
amended on August 20, 1996.
(d)"Committee" means the Compensation Committee of the
Board.
(e)"Company" means AT&T Capital Corporation, a Delaware
corporation.
(f)"Compensation" means a Participant's then current annual rate of base
salary as of his Date of Termination and his target annual incentive
award for the year in which his Date of Termination occurs (not taking
into account any reductions that would constitute a reason for a
Qualifying Termination) and commissions actually paid during the twelve
(12) months immediately preceding the Date of Termination.
(g)"Continuous Service" means the Participant's continuous
service with the Company (and any of its Subsidiaries),
plus any periods of continuous service with AT&T Corp. or
NCR Corporation (or AT&T Global Information Solutions,
Inc.) prior to January 1, 1994 and any periods of prior
<PAGE>
<PAGE>
2 EXHIBIT 10(e)
FORM 10-Q for the Quarter
Ended September 30, 1996
service that have been designated as "vesting service" under the AT&T
Capital Corporation Retirement and Savings Plan. For purposes of the Plan,
Continuous Service shall be measured as of a participant's Date of
Termination, including any notice period provided for in Section 8 of the
Plan.
(h)"Date of Termination" means the date on which a Participant's employment
with the Company terminates.
(i)"Disability" means, with respect to a Participant, a determination by the
Committee that such Participant has become "disabled" within the meaning of
the Company's long-term disability plan as in effect at the time.
(j)"Final Annual Pay" means the higher of (i) the sum of a Participant's then
current rate of annual base salary as of his Date of Termination and 110%
of target annual incentive under the Company's 1995 Member Annual Incentive
Plan and the Company's 1995 Senior Executive Annual Incentive Plan, or any
successor plan, for the year in which a Date of Termination occurs (not
taking into account any reduction that would constitute a basis for a
Qualifying Termination) and commissions actually paid during the twelve
(12) months immediately preceding the Date of Termination and (ii) for
Participants who have three or more years of service with the Company prior
to the Participant's Date of Termination, the quotient equal to (A) the sum
of a Participant's (1) annual rate of base salary (not taking into account
any reduction that would constitute a basis for a Qualifying Termination),
(2) actual annual incentive payment earned under the Company's 1995 Member
Annual Incentive Plan and the Company's 1995 Senior Executive Annual
Incentive Plan, or any successor plan, and (B) commissions actually paid
during the three (3) consecutive calendar years preceding the Participant's
Date of Termination in which he had the greatest aggregate earnings,
divided by (3) three (3) ("Average Earnings").
For purposes of calculating Final Annual Pay, sign-on fees, retention fees,
waiver fees and any other fees, bonuses or similar compensation shall be
disregarded.
(k)"Other Eligible Termination" means a termination of a Participant's
employment by the Company (other than for Cause, Disability or Retirement),
that is not an RIF Termination.
(l)"Participant" means each employee of the Company or any Subsidiary who is
classified as a "strategic system" member (other than a Corporate
Leadership Team member or a Leadership Forum member) or any equivalent
classification as determined by the Corporate Leadership Team (or any
successor organization) of the Company (a "Strategic Member"), a Leadership
Forum member or a Corporate Leadership Team member (or any successor
classifications to such classifications) who 1) has waived his right to
participate in the Company's Leadership Severance Plan, which became
effective on October 5, 1995, and 2) was employed by the Company on the
Closing Date. Payments and benefits under the Plan will be determined based
upon such classification as of the Participant's Date of Termination (not
taking into account any
<PAGE>
<PAGE>
3 EXHIBIT 10(e)
FORM 10-Q for the Quarter
Ended September 30, 1996
reduction of classification at any time following the Closing Date which,
if such reduction occurred prior to the second anniversary of the Closing
Date, would constitute a reason for a Qualifying Termination under the
Plan).
(m)"Plan" means the 1996 AT&T Capital Corporation Leadership Severance
Plan.
(n)"Qualifying Termination" of the employment of a Participant with the
Company and any relevant Subsidiaries means any of the following:
(i)A termination of a Participant's employment by the Company and its
Subsidiaries prior to the second anniversary of the Closing Date, other
than a termination for Cause or(ii) A termination of employment by a
Participant prior to the second anniversary of the Closing Date for one or
more of the following reasons: (a) a reduction in base salary; (b) a
significant reduction in annual cash target bonus; (c) an elimination or
reduction of the Participant's eligibility to participate in the Company's
benefit plans or programs that is inconsistent with the eligibility of
similarly situated employees of the Company and its Subsidiaries to
participate therein; (d) a significant reduction in the Participant's
duties as they exist immediately after the Closing Date; or (e) an
obligation to relocate more than 50 miles from the Participant's current
work location; Provided that, in the case of any termination of employment
by the Participant pursuant to this paragraph, such termination shall not
be deemed to be a Qualifying Termination unless notice of such termination
occurs within ninety (90) days after the Participant receives notice of the
occurrence of the events constituting the reason for such termination. For
purposes of this Plan, a termination of a Participant's employment by the
Company or the Participant on account of the Participant's death,
Disability or Retirement shall not constitute a Qualifying Termination.
(o)"Retirement" means the voluntary retirement of a Participant pursuant to a
retirement plan of the Company or any relevant Subsidiary.
(p)"RIF Termination" means the termination of a Participant's employment (i)
by the Company as a result of a reduction in force, change in operations,
facility relocation or closing, or other job elimination, or (ii) pursuant
to a Qualifying Termination.
(q)"Subsidiary" means (i) any person that is directly or indirectly controlled
by the Company or (ii) any other person in which the Company has a
significant equity interest, as determined by the Committee.
2. Payments-and Benefits Upon an RIF Termination. In the event a
Participant's employment is terminated as a result of an RIF Termination, the
Company will provide to such Participant the following payments and benefits:
(a) within five (5) days following the Participant's Date of
<PAGE>
<PAGE>
4 EXHIBIT 10(e)
FORM 10-Q for the Quarter
Ended September 30, 1996
Termination, the Company will pay to such Participant a lump sum cash payment
equal to the greater of (i) two (2) weeks' Compensation for each full year of
Continuous Service and (ii) the percentage of such Participant's Final Annual
Pay set forth below (the "Severance Payments"): (A)for Strategic Members (other
than Leadership Forum members), 100% of Final Annual Pay; (B) for Leadership
Forum members (other than Corporate Leadership Team members), 150% of Final
Annual Pay; and (C) for Corporate Leadership Team members, 200% of Final Annual
(b) (i) Within five (5) days following the Participant's Date of Termination,
the Company shall provide to the Participant a lump sum cash payment (the
"Benefits Payments") in an amount equal to 135% of the Participant's premium
(determined as of the Date of Termination) required to obtain "COBRA" continued
health and dental coverage (under Section 4980B of the Internal Revenue Code of
1986, as amended (the "Code")) for the "continuation periods" set forth below
(each continuation period shall begin on the first day of the calendar month
following the month in which such Participant's Date of Termination occurs);
provided, however, that if such continuation period exceeds the period of
continuation coverage provided pursuant to COBRA, the Participant shall receive
as part of such lump sum payment the cost of the remaining months' coverage as
it would be calculated had COBRA applied:
Strategic Members 12 months
Leadership Forum Members 18 months
Corporate Leadership Team Members 24 months
(ii) In addition, during the continuation periods indicated above, (A) the
Company shall provide life insurance coverage in the amount of one (1) times Pay
(as such term is defined in the Company's Life and Accidental Loss Insurance
Plan, or any comparable definition contained in a replacement or successor plan
(the "Life Insurance Plan")) to the Participant ("Basic Life Insurance"), and
(B) if a Participant was receiving prior to his Date of Termination supplemental
life insurance coverage under the Life Insurance Plan in addition to Basic Life
Insurance ("Supplemental Life Insurance"), such Participant may elect to
continue such Supplemental Life Insurance by paying the difference between the
cost of providing Supplemental Life Insurance and the cost of providing Basic
Life Insurance. If a Participant elects to continue Supplemental Life Insurance,
the cost will be deducted from such Participant's Benefits Payments hereunder.
All benefits granted, payable or otherwise available to Leadership Forum members
and Corporate Leadership Team members under the Company's Financial Counseling
Plan and Executive Car Plan shall continue for a period of one (1) year from the
Participant's Date of Termination. (c)Within five (5) days following the
Participant's Date of Termination, the Company will pay to such Participant a
lump sum cash payment equal to the sum of (i) the Participant's base salary to
the extent earned but not theretofore paid, (ii) any earned, but unpaid, bonus,
(iii) the value of such Participant's accrued, but unused, vacation, personal
days and floating holidays (including days permitted to be carried forward from
the prior year) and (iv) any other amounts due and owing to the Participant by
the Company.
<PAGE>
<PAGE>
5 EXHIBIT 10(e)
FORM 10-Q for the Quarter
Ended September 30, 1996
3. Payments and Benefits Upon an Other Eligible Termination. In the event a
Participant's employment is terminated as a result of an Other Eligible
Termination, the Company will provide to such Participant the following payments
and benefits: (a) Within five (5) days following the Participant's Date of
Termination, the Company will pay to such Participant a lump sum cash payment
equal to the greater of (i) one (1) week's Compensation for each full year of
Continuous Service and (ii) the percentage of such Participant's Final Annual
Pay set forth below (the "Severance Payments"): (A) for Strategic Members (other
than Leadership Forum members), 50% of Final Annual Pay; (B) for Leadership
Forum members (other than Corporate Leadership Team members), 100% of Final
Annual Pay; and (C) for Corporate Leadership Team members, 150% of Final Annual
Pay. (b) (i) Within five (5) days following the Participant's Date of
Termination, the Company shall provide to the Participant a lump sum cash
payment (the "Benefits Payments") in an amount equal to 135% of the
Participant's premium (determined as of the Date of Termination) required to
obtain "COBRA" continued health and dental coverage (under Section 4980B of the
Code) for the following "continuation periods" (each continuation period shall
begin on the first day of the calendar month following the month in which such
Participant's Date of Termination occurs):
Strategic Members 6 months
Leadership Forum Members 12 months
Corporate Leadership Team Members 18 months
(ii) In addition, during the continuation periods indicated above, (A) the
Company shall provide Basic Life Insurance to the Participant and (B) if a
Participant was receiving Supplemental Life Insurance coverage prior to his Date
of Termination, such Participant may elect to continue such Supplemental Life
Insurance by paying the difference between the cost of providing Basic Life
Insurance and the cost of providing Supplemental Life Insurance. If a
Participant elects to continue Supplemental Life Insurance, the cost will be
deducted from such Participant's Benefits Payments hereunder. (c) Within five
(5) days following the Participant's Date of Termination, the Company will pay
to such Participant a lump sum cash payment equal to the sum of (i) the
Participant's base salary to the extent earned but not theretofore paid, (ii)
any earned, but unpaid, bonus, (iii) the value of such Participant's accrued,
but unused, vacation, personal days and floating holidays (including days
permitted to be carried forward from the prior year) and (iv) any other amounts
due and owing to the Participant by the Company.
4. Sale of Division or Unit. Notwithstanding anything contained herein to
the contrary, in the event of a sale of a division or unit of the Company, such
sale shall not result in an RIF Termination or an Other Eligible Termination
with respect to any affected Participant, and no such Participant shall be
eligible to receive the Severance Payments or benefits provided under Section 2
or 3 of the Plan if, in the reasonable judgment of the Plan Administrator, such
Participant is offered a comparable position with comparable compensation with
the acquiring or resulting company in the
<PAGE>
<PAGE>
6 EXHIBIT 10(e)
FORM 10-Q for the Quarter
Ended September 30, 1996
same general geographic area as such Participant's then current position
("Comparable Employment").
5. Certain Additional Payments by the Company and Payment Limitations.
(a) Anything in this Plan to the contrary notwithstanding, in the event it
shall be determined that any payment or distribution by the Company or any of
its affiliates to or for the benefit of a Participant who is a Corporate
Leadership Team member or Leadership Forum member (whether paid or payable or
distributed or distributable pursuant to the terms of this Plan, any of the
Company's other compensation, severance, share ownership or benefit plans or
otherwise, but determined without regard to any additional payments required
under this Section 5) (a "Payment") would be subject to the excise tax imposed
by Section 4999 of the Code or imposed by any other taxing authority, or any
interest or penalties are incurred by the Participant with respect to such
excise tax (such excise tax, together with any such interest and penalties, are
hereinafter collectively referred to as the "Excise Tax"), then the Participant
shall be entitled to receive an additional payment (a "Gross-Up Payment"), no
later than twenty (20) days following such Payment in an amount such that after
payment by the Participant of all taxes (and any interest and penalties imposed
with respect thereto) including, without limitation, any income and employment
taxes and Excise Tax, imposed upon the Gross-Up Payment, the Participant retains
an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the
Payments. All federal, state and local income and employment tax calculations
shall be based upon the maximum marginal rates then in effect.
(b) All determinations required to be made under this Section 5 shall be
made by the Company's public accounting firm that is performing such services
immediately prior to the change in ownership or control giving rise to the
Excise Tax pursuant to Section 4999 of the Code. Such determination shall be
made no later than fifteen (15) days following any Payment. Such accounting firm
shall provide its determination to the Participant and the Company. If the
accounting firm determines that no Excise Tax is payable by the Participant, it
shall furnish the Participant with a written opinion to such effect.
(c) Notwithstanding the foregoing, in the event that the amount of the
Participant's Excise Tax liability is subsequently determined to be greater than
the Excise Tax liability with respect to which the Gross-Up Payment under
Section 5(a) was made, the Company shall pay to the Participant an additional
Gross-Up Payment with respect to such additional Excise Tax (and any interest
and penalties thereon) at the time that the amount of the actual Excise Tax
liability is finally determined.
(d) The Participant and the Company shall each reasonably cooperate with
the other in connection with any administrative or judicial proceedings
concerning the existence or amount of liability for Excise Tax and the expenses
of any such proceedings shall be borne solely by the Company.
(e) While the foregoing provisions of Section 5(a) - (d) do not apply to
Strategic Members, all payments made under this Plan to Strategic
<PAGE>
<PAGE>
7 EXHIBIT 10(e)
FORM 10-Q for the Quarter
Ended September 30, 1996
Members shall be subject to the provisions of the AT&T Capital Corporation
Employee Compensation Adjustment Plan, as in effect from time to time.
6. Enhanced Payments. Any Participant who signs a Separation Agreement and
General Release prepared by the Company (substantially in the form attached
hereto as Annex A) in connection with a termination of employment under this
Plan shall receive an additional lump sum payment, within thirty (30) days
following such Participant's execution of a Separation Agreement and General
Release, equal to 20% of the Severance Payment to which such Participant is
entitled.
7. Outplacement Services. The Company will provide Participants with
reasonable outplacement services commensurate with such Participant's position
in the event of an RIF Termination or an Other Eligible Termination.
8. Notice of Termination.
(a) RIF Termination. Each Participant who is entitled to a Severance
Payment in connection with an RIF Termination, other than a Qualifying
Termination pursuant to Section l(n)(ii), shall receive written notice of
termination from the Company at least ninety (90) days prior to the
Participant's Date of Termination.
(b) Other-Eligible Termination. Each Participant who is entitled to a
Severance Payment pursuant to an Other Eligible Termination shall receive
written notice of termination from the Company at least four (4) weeks prior to
the Date of Termination.
(c) Certain Terminations by Participants. A Participant who is terminating
employment pursuant to one of the reasons set forth in Section l(n)(ii) shall
provide the Company with written notice of termination of at least fifteen (15),
but no more than ninety (90), days. Such notice shall be provided at any time
during the 90-day period set forth in Section l(n)(ii).
(d) Payment in Lieu of Notice. Notwithstanding the foregoing, the Company
may, in its sole discretion, remove the Participant from the Company's payroll
(and such date of removal shall be the Participant's Date of Termination) and
provide the following payments in lieu of providing notice hereunder or
receiving the Participant's notice: (i) an amount equal to the sum of (A) the
Participant's base salary as of his Date of Termination (not taking into account
any reductions that would constitute a reason for a Qualifying Termination) for
the remaining applicable notice period and (B) (1) commissions actually earned
by the Participant for the twelve (12) months immediately preceding the
Participant's Date of Termination, divided by (2) 52.2, and (3) multiplied by
the applicable number of weeks of notice, and (ii) in addition to any Benefits
Payments owed hereunder, 100% of such Participant's COBRA premiums (determined
as of the Date of Termination) for the applicable period of notice.
(e) General. Each notice of termination under the Plan shall specify the
category of such termination (i.e., an RIF Termination or an Other Eligible
Termination) and shall be provided (by mail, hand delivery or
<PAGE>
<PAGE>
8 EXHIBIT 10(e)
FORM 10-Q for the Quarter
Ended September 30, 1996
facsimile) to the Participant at his last known address in the Company's records
or at his place of employment or to the Company at its corporate headquarters
(attention Head of Human Resources), as the case may be. Each Participant on a
leave of absence or on disability leave during the applicable notice period will
remain on the Company's payroll for a minimum of thirty (30) days following such
Participant's return from such leave. In the event that, following the delivery
of a notice of termination by a Participant or the Company, the Participant's
employment terminates for a reason other than that specified in the applicable
notice of termination, the Participant's right to receive any applicable
Severance Payment or Benefits Payment described in Section 2 or 3 of the Plan
shall be based upon that other reason rather than the reason specified in the
original notice of termination of employment, and the Company shall have no
obligation to continue the Participant on its payroll after such Participant's
Date of Termination.
9. Transfers. If a Participant accepts a transfer to a position within the
Company or any Subsidiary within the notification period of Section 8, such
Participant will not be treated as being terminated pursuant to an RIF
Termination or Other Eligible Termination.
10. Withholding Taxes. The Company may withhold from all payments due to a
Participant (or his beneficiary or estate) hereunder all taxes which, by
applicable federal, state, local or other law, the Company is required to
withhold therefrom.
11. Reimbursement of Expenses. If any contest or dispute shall arise under
this Plan involving termination of a Participant's employment with the Company,
and it is finally determined by a court of competent jurisdiction that the
Company failed or refused to perform fully in accordance with the terms hereof,
the Company shall reimburse the Participant for all reasonable legal fees and
expenses incurred by the Participant in connection with such contest or dispute,
together with interest in an amount equal to the prime rate of Citibank, N.A.
from time to time in effect, but in no event higher than the maximum legal rate
permissible under applicable law. Such interest shall accrue from the date the
Company receives the Participant's statement for such fees and expenses through
the date of payment therefor.
12. Termination or Amendment of Plan.
(a) This Plan shall be in effect as of the Closing Date and shall continue
until terminated on the fifth anniversary of the Closing Date.
(b) The Company shall have the right, in its sole discretion, pursuant to
action by the Board or the Committee, to approve any amendment of this Plan;
provided, however, that in no event shall this Plan be amended in any manner
which would adversely affect the rights or potential rights of Participants.
13. Scope of Plan. Nothing in this Plan shall be deemed to entitle any
Participant to continued employment with the Company or its Subsidiaries.
<PAGE>
<PAGE>
9 EXHIBIT 10(e)
FORM 10-Q for the Quarter
Ended September 30, 1996
14. Successors; Binding Obligation.
(a)This Plan shall not be terminated by any merger or consolidation of the
Company whereby the Company is or is not the surviving or resulting corporation
or as a result of any transfer of all or substantially all of the assets of the
Company or a purchase of the securities of the Company. In the event of any such
merger, consolidation, transfer of assets or purchase, the provisions of this
Plan shall be binding upon the surviving or resulting corporation or the person
or entity to which such assets are transferred.
(b) The Company agrees that concurrently with any merger, consolidation,
transfer of assets or purchase of the securities of the Company referred to in
paragraph (a) of this Section 14, it will cause any successor or transferee
unconditionally to assume all of the obligations of the Company hereunder.
(c) This Plan shall inure to the benefit of and be enforceable by each
Participant's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If a Participant shall
die while any amounts would be payable to the Participant hereunder had the
Participant continued to live, all such amounts, unless otherwise provided
herein, shall be paid in accordance with the terms of this Plan to such person
or persons appointed in writing by the Participant to receive such amounts or,
if no person is so appointed, to the Participant's estate.
15. Full Settlement. The Company's obligation to make any payments provided
for by this Plan to a Participant and otherwise to perform its obligations
hereunder shall not be affected by any set-off, counterclaim, recoupment,
defense or other claim, right or action which the Company may have against the
Participant or others. In no event shall a Participant be obligated to seek
other employment or take other action by way of mitigation of the amounts
payable to the Participant under any of the provisions of this Plan and such
amounts shall not be reduced whether or not the Participant obtains other
employment.
16. Employment with Subsidiaries. Employment with the Company for purposes
of this Plan shall include employment with any of its Subsidiaries.
17. Other Severance Payments. All Severance payments due under the Plan
(whether related to an RIF Termination or an Other Eligible Termination) shall
be in addition to any other amounts payable under any other plan of the Company,
but shall be reduced by the present value of any severance payments required to
be paid to a member whose work location is outside the United States pursuant to
any non-U.S. statute, regulation, law or plan.
18. Governing Law; Validity. The interpretation, construction and
performance of this Plan shall be governed by and construed and enforced in
accordance with the internal laws of the State of New Jersey without regard to
the principle of conflicts of laws. The invalidity or unenforceability of any
provision of this Plan shall not affect the validity or
<PAGE>
<PAGE>
10 EXHIBIT 10(e)
FORM 10-Q for the Quarter
Ended September 30, 1996
enforceability of any other provision of this Plan, which other provisions shall
remain in full force and effect.
19. Administration. The Company shall be the "Plan Administrator" of the
Plan, but the Plan shall be administered on the Company's behalf by the
Company's Head of Human Resources and General Counsel. The Plan Administrator
shall make the rules and regulations necessary to administer the Plan and shall
have the responsibility and discretionary authority to interpret the terms of
the Plan, determine eligibility for benefits and to determine the amounts of
such benefits. Appeals of decisions and interpretations by the Plan
Administrator may be made by Participants to the Company' s Corporate Leadership
Team (the "Committee") or any designated subcommittee thereof. In the event a
decision must be made with respect to a specific claim or benefit of either the
Head of Human Resources or the General Counsel, such person shall not be
involved in any such decision. No member of the Committee shall participate in
any appeal with respect to his benefits hereunder. To the extent permitted by
law, all agents and representatives of the Plan Administrator shall be
indemnified by the Company against any claims, and the expenses of defending
against such claims, resulting from any action or conduct (not taken in bad
faith) relating to the administration of the Plan.
<PAGE>
<PAGE>
1
EXHIBIT 10(f)
FORM 10-Q for the Quarter
Ended September 30, 1996
EMPLOYMENT AGREEMENT
AGREEMENT, made September 30, 1996, (the "Effective Date") by and between
ANTIGUA ACQUISITION CORPORATION, a Delaware corporation and THOMAS C. WAJNERT
("Executive").
RECITALS
In order to induce Executive to continue to serve as the Chairman and Chief
Executive Officer of AT&T Capital Corporation, a Delaware Corporation (the
"Company") after the transaction (the "Transaction") contemplated in the
Agreement and Plan of Merger among the Company, AT&T Corp., Hercules Limited and
Antigua Acquisition Corporation, dated as of June 5, 1996 (the "Merger
Agreement") Antigua Acquisition Corporation and its successors, the Company,
desire to provide Executive with compensation and other benefits on the terms
and conditions set forth in this Agreement, which are expressly conditional on
the consummation of the Transaction.
Executive is willing to accept such employment and perform services for the
Company, on the terms and conditions hereinafter set forth.
It is therefore hereby agreed by and between the parties as follows:
1. Employment.
1.1 Subject to the terms and conditions of this Agreement, the Company
shall employ Executive during the term hereof as its Chairman and Chief
Executive Officer. In his capacity as the Chairman and Chief Executive Officer
of the Company, Executive shall report to the Board of Directors of the Company
(the "Board") and shall have the customary powers, responsibilities and
authorities of chairmen and chief executive officers of corporations of the
size, type and nature of the Company, as it exists from time to time, as are
assigned by the Board.
1.2 Subject to the terms and conditions of this Agreement, Executive hereby
accepts employment as the Chairman and Chief Executive Officer of the Company
commencing on the date of the Transaction, and, except as set forth in Section
1.4, agrees to devote his full working time and efforts to the performance of
services, duties and responsibilities in connection therewith, and shall perform
his functions at the Company with at least the care that an ordinarily prudent
person of like ability, experience and talent would reasonably be expected to
exercise under similar circumstances. Executive shall perform such duties and
exercise such powers, commensurate with his position, as the Chairman and Chief
Executive Officer of the Company as the Board shall from time to time delegate
to him and as are consistent with Section 1.1 hereof, on such terms and
conditions and subject to such restrictions as such Board may reasonably from
time to time impose.
1.3 At all times during the term of employment hereunder, Executive shall
be a member of the Board. Nothing in this Agreement shall preclude Executive
from engaging in charitable and community affairs, from managing any passive
investment made by him in publicly traded equity securities or other property
(provided that no such investment may exceed 1% of the equity of any entity,
without the prior approval of such Board of
<PAGE>
<PAGE>
2 EXHIBIT 10(f)
FORM 10-Q for the Quarter
Ended September 30, 1996
Directors) so long as such activities do not materially interfere with his
duties and responsibilities hereunder, or from serving, subject to the prior
approval of such Board of Directors, as a member of boards of directors or as a
trustee of any other corporation, association or entity. The Board hereby
consents to Executive's current outside board and association activities as set
forth in Exhibit A to this Agreement.
2. Term of Employment. Executive's term of employment under this Agreement
shall commence on the date of the Transaction and, subject to the terms hereof,
shall terminate on the earlier of (i) December 31, 1999 (the "Termination Date")
or (ii) termination of Executive's employment pursuant to this Agreement.
3. Compensation.
3.1 Salary. The Company shall pay Executive a base salary ("Base Salary")
during Executive's term of employment hereunder equal to $625,000 per annum.
Base Salary shall be payable in accordance with the ordinary payroll practices
of the Company and may be increased by the Board in its sole discretion.
3.2 Annual Bonus. (a) Executive shall be paid an annual bonus in respect of
1996 equal to $677,808 at the time that 1996 annual cash bonus payments are made
to Company senior executives, but in no event later than March 31, 1997.(b)
Executive shall be paid an annual bonus (each, together with the bonus described
in clause (a) above, a "Bonus") during the term of his employment hereunder in
respect of 1997, 1998 and 1999 with a target amount equal to 60% of Base Salary
(the "Target Bonus") based on performance criteria determined by the Board in
its sole discretion. The Board in its sole discretion may determine whether
Executive has met the performance criteria. If performance exceeds target, the
Board may authorize the Company to pay a bonus greater than the Target Bonus and
if performance is below target, the Board may authorize the Company to pay a
bonus lower than the Target Bonus. (a) In addition, in 1997, Executive shall
receive a one-time payment equal to $1,000,000 (the "One-Time Payment"). The
One-Time Payment shall be paid at the time that 1996 annual cash bonus payments
are made to Company senior executives, but in no event later than March 31,
1997, of which $722,192 constitutes a signing bonus.
3.3 Stock Option Grants. Effective on the date of the Transaction,
Executive shall receive options to purchase 598,900 shares of Company stock,
which shall be subject to the terms and conditions of Exhibit C.
4. Employee Benefits.
4.1 Employee Benefit Programs, Plans and Practices. Except as otherwise
specifically provided in this Agreement, the Company shall provide Executive
during the term of his employment hereunder with coverage under all employee
pension and welfare benefit programs, plans and practices (commensurate with his
positions in the Company and to the extent permitted under any employee benefit
plan), other than severance plans, in accordance with the terms thereof, which
the Company makes available to its senior executives, other than those in which
he elects not to participate by written notice to the Company. No benefit
otherwise available to the
<PAGE>
<PAGE>
3 EXHIBIT 10(f)
FORM 10-Q for the Quarter
Ended September 30, 1996
Executive under any of the five Retirement Plans listed in Exhibit D, or under
any of the four Health and Welfare Benefit Plans and Programs listed as items 1,
2, 3 and 8 in Exhibit D, shall be materially reduced without the Executive's
advance written consent unless the Executive is provided with the after-tax
economic equivalent of such benefit reduction. The economic equivalent of any
benefit foregone shall be deemed to be the total cost to Executive of obtaining
the lost benefit directly, on an individual basis. The required after-tax
economic equivalent shall be payable quarterly in arrears. In addition, no
benefit otherwise available to the Executive under any pension or welfare
benefit plan, program or practice referred to in Exhibit D shall be materially
reduced except as part of an across-the-board reduction applying to all senior
executives of the Company. Executive shall be entitled to a pension benefit
determined in accordance with the Executive Benefit Plan in effect on the date
of this Agreement based on Credited Service equal to his actual years of service
with the Company (currently eleven (11) years) less the pension benefits he
actually receives under (i) the Executive Benefit Plan, (ii) any other defined
benefit pension plan maintained by the Company, and (iii) any other plan the
benefits of which offset or reduce the amounts otherwise payable under the
Executive Benefit Plan.
4.2 Vacation and Fringe Benefits. Executive shall be entitled to no less
than five weeks paid vacation in each calendar year, which shall be taken at
such times as are consistent with Executive's responsibilities hereunder. In
addition, Executive shall be entitled to the perquisites and other fringe
benefits made available to senior executives of the Company, commensurate with
his position with the Company. For purposes of illustration, the perquisites and
other fringe benefits in effect immediately prior to the Transaction are set
forth in Exhibit E.
5. Expenses. Executive is authorized to incur reasonable expenses in
carrying out his duties and responsibilities under this Agreement, including,
without limitation, expenses for travel and similar items related to such duties
and responsibilities. The Company will reimburse Executive for all such expenses
upon presentation by Executive from time to time of appropriately itemized and
approved (consistent with the Company's policy) accounts of such expenditures.
6. Termination of Employment. 6.1 Termination Not for Cause or for Good
Reason. (a) Either Executive or the Company may terminate Executive's employment
at any time for any reason. If Executive's employment is terminated by the
Company other than (i) for Cause (as defined in Section 6.4 hereof) or (ii) as a
result of Executive's death or Permanent Disability (as defined in Section 6.2
hereof) or if Executive terminates his employment for Good Reason (as defined in
Section 6.1 (c) hereof), in either case prior to December 31, 1999, Executive
shall promptly receive those payments (if any) (and be entitled to those
benefits (if any), under Company plans or programs generally applicable to its
senior executives, to which he is entitled pursuant to the terms of such plans
or programs, as well as the One-Time Payment, if it has not previously been
made. In addition, Executive shall be entitled to receive an amount (the
"Termination Amount") in lieu of any Bonus in respect of all or any portion of
the fiscal year in which such termination occurs and any other cash compensation
(other than the payments referred to in this Section 6.1(a)
<PAGE>
<PAGE>
4 EXHIBIT 10(f)
FORM 10-Q for the Quarter
Ended September 30, 1996
hereof), which Termination Amount shall be payable within 30 days following such
termination of employment. The Termination Amount shall consist of the sum of
(i) the Applicable Percentage (as defined below) of Executive's Final Annual Pay
(as defined below), (ii) 110% of the Target Bonus for the year of termination
(the Target Bonus being deemed to be $677,808 for 1996) and (iii) 135% of the
premium necessary to obtain COBRA continued health and dental coverage for 24
months. For purposes of this Section 6.1, the "Applicable Percentage" shall mean
300% multiplied by a fraction, the numerator of which is the number of days from
and including the date of termination through, but not including, the
Termination Date and the denominator of which is the number of days from and
including the date of this Agreement through, but not including, the Termination
Date. In addition, Executive shall be entitled to receive a cash lump sum
payment in respect of accrued but unused vacation days (the "Vacation Payment"),
to any accrued but unpaid base salary and to any compensation previously
deferred but not yet paid (including any deferred Bonus payments and any Bonus
amount awarded but not yet paid) (the "Compensation Payment"), and to continued
coverage for basic life insurance (one times annual salary) for 24 months under
any employee life insurance plan in accordance with the respective terms
thereof. If Executive has supplemental life insurance through the Company, the
Company shall permit Executive to continue such life insurance coverage, at
Executive's cost, for up to 24 months from the date of termination. As a
condition to Executive's receipt of the benefits set forth in this Section 6.1,
on or prior to the date of termination, Executive shall sign a separation
agreement and general release in the form annexed hereto as Exhibit F. In the
event that Executive is terminated by the Company without Cause and the Company
provides Executive with less than 90 days of notice prior to the termination,
the Company shall also pay Executive, within 30 days following the date of
termination, a sum equal to the product of (i) the quotient of (a) the excess of
(1) 90 over (2) the number of days of notice provided Executive prior to the
termination, divided by (b) 365, multiplied by (ii) the Base Salary; the Company
shall also provide Executive with 100% of Executive's COBRA premiums for the
period equal to the excess of (1) 90 over (2) the number of days of notice
provided Executive prior to termination.(b) The Vacation Payment and the
Compensation Payment shall be paid by the Company to Executive within 30 days
after the termination of Executive's employment by check payable to the order of
Executive or by wire transfer to an account specified by Executive. (c) For
purposes of this Agreement, "Good Reason" shall mean any of the following
(without Executive's express prior written consent):(i) The assignment to
Executive of any duties inconsistent, in a way significantly adverse to
Executive, with Executive's positions, duties and responsibilities with the
Company immediately following the Transaction, or a significant reduction in the
duties and responsibilities held by Executive immediately following the
Transaction, a change in Executive's reporting responsibilities, title or
offices as in effect immediately following the Transaction that is significantly
adverse to Executive; or any removal of Executive from or any failure to
re-elect Executive to any position with the Company or any such Subsidiary that
Executive held immediately following the Transaction except in connection with a
termination of employment for Cause (or in the case of Retirement, death or
permanent Disability, or in connection with a plan of succession to Executive's
responsibilities and authorities to which Executive has agreed);(ii)A reduction
by the Company in Executive's annual Base Salary as
<PAGE>
<PAGE>
5 EXHIBIT 10(f)
FORM 10-Q for the Quarter
Ended September 30, 1996
in effect immediately following the transaction, or as the same may be increased
from time to time thereafter or a reduction in the Target Bonus specified in
section 3.2(b); (iii) A material breach of the terms of Section 4.1 by the
Company; (iv) The Company requiring Executive to be based anywhere other than
Executive's present work location or a location within fifty (50) miles from
such present location; (v) A material breach of this Agreement by the Company;
(vi) Any material reduction in the thresholds contained in the Company's
schedule of authorizations from the levels to be negotiated in good faith, and
reasonably promptly, by the parties; or (vii) The failure of the Company to
obtain the assumption in writing (unless such successor or assign assumes the
obligations of the Company under this Agreement by operation of law) of its
obligation to perform all aspects of this Agreement by any successor or assign
within 90 days after any merger, consolidation, sale of substantially all of the
assets of or similar transaction involving the Company. Provided that; for
avoidance of doubt, Executive acknowledges that the shareholders of the Company
and Nomura International plc will (subject to approval by Executive, which
approval shall not be unreasonably withheld) second certain individuals to key
roles in the Company and that (i) members of the Board of Directors of the
Company and (ii) any other individual representatives of the shareholders of the
Company or Nomura International plc may (subject to approval by Executive, which
approval shall not be unreasonably withheld) attend and participate in meetings
of the Company's Corporate Leadership Team (or any successor group or committee
thereof). Any such approved secondment or participation shall not be considered
to result in Good Reason; and provided further that, in the case of any such
termination of employment by the Executive for Good Reason, such termination
shall not be deemed for Good Reason unless (A) such termination occurs within
ninety (90) days after the Executive receives notice of the occurrence of the
events constituting the reason for such termination and, (B) in the case of any
event described in (i), (iii), (v), (vi) or (vii) above, the Executive has
provided notice that he intends to resign for Good Reason, specifying the
particular circumstances that he believes constitute Good Reason and the Company
has not, within 30 days after the notice provided by the Executive, taken steps
to rectify the action which gave rise to the Good Reason. (d) For purposes of
this Agreement, "Final Annual Pay" shall mean the higher of (i) the sum of
Executive's Base Salary and 110% of the Target Bonus for the year in which the
date of termination occurs (not taking into account any reduction that would
constitute a basis for Good Reason) (the Target Bonus being deemed to be
$677,808 for 1996) and (ii) the quotient equal to (A) the sum of Executive's (1)
Base Salary (not taking into account any reduction that would constitute a basis
for Good Reason), and (2) actual annual incentive payments earned under
applicable Company annual incentive plans or programs, during the three
consecutive calendar years preceding Executive's date of termination in which he
had the greatest aggregate earnings, divided by (B) three. For purposes of
calculating Final Annual Pay, the One-Time Payment and any sign-on fees,
retention fees, waiver fees and any other fees, bonuses or similar compensation
(other than annual incentive payments earned under applicable Company annual
incentive plans or programs, and specifically including the $677,808 annual
incentive bonus referred to in Section 3.2(a)) shall be disregarded.
<PAGE>
<PAGE>
6 EXHIBIT 10(f)
FORM 10-Q for the Quarter
Ended September 30, 1996
6.2 Permanent Disability. If the Executive becomes totally and permanently
disabled (as defined in Sections 2(1)(a) and 2(1)(b) of the current AT&T Senior
Management Long Term Disability and Survivor Protection Plan ("Permanent
Disability"), the Company or Executive may terminate Executive's employment on
written notice thereof, and Executive shall receive or commence receiving, as
soon as practicable: (i) amounts payable pursuant to the terms of any disability
plan, insurance policy or similar arrangement which the Company maintains during
the term hereof; (ii) the Target Bonus in respect of the fiscal year in which
his termination occurs, prorated by a fraction, the numerator of which is the
number of days of the fiscal year until termination and the denominator of which
is 365; (iii) the Vacation Payment and the Compensation Payment; and (iv) such
payments and benefits under applicable plans or programs, including but not
limited to those referred to in Section 4.1 hereof, to which he is entitled
pursuant to the terms of such plans or programs.
6.3 Death. In the event of Executive's death during the term of his
employment hereunder, Executive's estate or designated beneficiaries shall
receive or commence receiving, as soon as practicable:(i) the Target Bonus in
respect of the fiscal year in which his death occurs, prorated by a fraction,
the numerator of which is the number of days of the fiscal year until his death
and the denominator of which is 365; (ii) any death benefits provided under the
employee benefit programs, plans and practices referred to in Section 4.1
hereof, in accordance with their terms; (iii) the Vacation Payment and the
Compensation Payment; and (iv) such payments under applicable plans or programs,
including but not limited to those referred to in Section 4.1 hereof, to which
Executive's estate or designated beneficiaries are entitled pursuant to the
terms of such plans or programs.
6.4 Voluntary Termination by Executive; Discharge for Cause. (a) In the
event that Executive's employment is terminated by the Company for Cause, as
hereinafter defined, or by Executive other than for Permanent Disability, death
or Good Reason, Executive shall only be entitled to receive the Compensation
Payment, the Vacation Payment and any Bonus amount awarded but not yet paid.
Executive shall not be entitled, among other things, to the payment of any Bonus
in respect of all or any portion of the fiscal year in which such termination
occurs or any form of severance payment. After the termination of Executive's
employment under this Section 6.4, the obligations of the Company to make any
further payments or provide any benefits specified herein, to Executive, other
than as otherwise provided in this Agreement or under the terms of the plans and
programs of the Company generally applicable to its senior executives, shall
thereupon cease and terminate. (b) As used herein, the term "Cause" shall be
limited to (i) Executive's conviction of a felony (or a guilty or nolo
contendere plea in connection therewith) or (ii) a material breach by the
Executive of his duties and responsibilities under the Agreement that causes
significant harm to the Company, which breach is (A) either willful and
deliberate or the product of gross neglect, (B) committed in bad faith or
without reasonable belief that such breach is in, or not contrary to, the best
interests of the Company and (C) not remedied within a reasonable period of time
after receipt of written notice from the Company specifying such breach.
Termination of Executive pursuant to this Section 6.4 shall be made by delivery
to Executive of a copy of a resolution duly adopted by
<PAGE>
<PAGE>
7 EXHIBIT 10(f)
FORM 10-Q for the Quarter
Ended September 30, 1996
the affirmative vote of not less than a majority of the continuing Directors at
a meeting of the Board of Directors of the Company called and held for the
purpose (after 30 days prior written notice to Executive and reasonable
opportunity for Executive to be heard before the Board prior to such vote),
finding that in the reasonable judgment of such Board, Executive was guilty of
conduct set forth in any of clauses (i) through (iii) above and specifying the
particulars thereof, which determination shall be subject to de novo review in
accordance with the procedures of Section 7.1.
6.5 Noncompetition Agreement. During the two year period after Executive's
termination of employment (other than due to death) the Executive shall receive,
in 24 equal installments, commencing on the date of his termination of
employment, an aggregate amount equal to his Final Annual Pay, conditioned on
Executive's compliance with the terms of Section 12.
7. Mitigation of Damages. Executive shall not be required to mitigate
damages or the amount of any payment provided for under this Agreement by
seeking other employment or otherwise after the termination of his employment
hereunder, and the amounts earned by Executive, whether from self-employment, as
a common-law employee or otherwise, shall not reduce the amount of any
Termination Amount otherwise payable to him.
7.1 Arbitration. Any controversy or claim arising out of or relating to
this Agreement, any amendment of this Agreement, or any breach of any of the
foregoing, shall, at the election of either Party, be resolved by confidential
arbitration, to be held in Morristown, New Jersey, in accordance with the
Commercial Arbitration Rules of the American Arbitration Association. Judgment
upon the award may be entered in any court having jurisdiction thereof.
7.2 Certain Additional Payments by the Company and Payment Limitations. (a)
In the event it shall be determined that any payment or distribution by the
Company or any of its affiliates to or for the benefit of Executive (whether or
not made hereunder) (a "Payment") would be subject to the excise tax imposed by
Section 4999 of the Code or imposed by any other taxing authority, or any
interest or penalties are incurred by Executive with respect to such excise tax
(such excise tax, together with any such interest and penalties, are hereinafter
collectively referred to as the "Excise Tax"), then Executive shall be entitled
to receive an additional payment (a "Gross-Up Payment"), no later than twenty
(20) days following such Payment in an amount such that after payment by
Executive of all taxes (and any interest and penalties imposed with respect
thereto) including, without limitation, any income and employment taxes and
Excise Tax, imposed upon the Gross-Up Payment, the Executive retains an amount
of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments. All
federal, state and local income and employment tax calculations shall be based
upon the maximum marginal rates then in effect.
7.3 All determinations required to be made under Section 7.2 shall be made
by the Company's public accounting firm that is performing such services
immediately prior to the change in ownership or control giving
<PAGE>
<PAGE>
8 EXHIBIT 10(f)
FORM 10-Q for the Quarter
Ended September 30, 1996
rise to the Excise Tax pursuant to Section 4999 of the Code. Such determination
shall be made no later than fifteen (15) days following any Payment. Such
accounting firm shall provide its determination to Executive and the Company. If
the accounting firm determines that no Excise Tax is payable by Executive, it
shall furnish Executive with a written opinion to such effect.
7.4 Notwithstanding the foregoing, in the event that the amount of
Executive's Excise Tax liability is subsequently determined to be greater than
the Excise Tax liability with respect to which the Gross-Up Payment under
Section 7.2 was made, the Company shall pay to Executive an additional Gross-Up
Payment with respect to such additional Excise Tax (and any interest and
penalties thereon) at the time that the amount of the actual Excise Tax
liability is finally determined.
7.5 Executive and the Company shall each reasonably cooperate with the
other in connection with any administrative or judicial proceedings concerning
the existence or amount of liability for Excise Tax and the expenses of any such
proceedings shall be borne solely by the Company.
8. Notices. All notices or communications hereunder shall be in writing,
addressed as follows:
To the Company:
AT&T Capital Corporation
44 Whippany Road
Morristown, NJ 07960
Attention: General Counsel
To Executive:
Mr. Thomas C. Wajnert
Young Road
Bernardsville, NJ 07924
Any such notice or communication shall be delivered by hand or by courier or
sent certified or registered mail, return receipt requested, postage prepaid,
addressed as above (or to such other address as such party may designate in a
notice duly delivered as described above), and the third business day after the
actual date of mailing shall constitute the time at which notice was given,
provided that reasonable steps are taken to assure that notice is actually
received.
9. Separability; Legal Fees. If any provision of this Agreement shall be
declared to be invalid or unenforceable, in whole or in part, such invalidity or
unenforceability shall not affect the remaining provisions hereof which shall
remain in full force and effect. Except to the extent expressly provided
otherwise in the next sentence, each party shall bear the costs of any legal
fees and other fees and expenses which may be incurred in respect of enforcing
its respective rights under this Agreement. The Company shall pay the reasonable
fees and disbursements (not in excess of $75,000) of Executive's legal counsel
in connection with
<PAGE>
<PAGE>
9 EXHIBIT 10(f)
FORM 10-Q for the Quarter
Ended September 30, 1996
the negotiation and execution of this Agreement and the other documents
contemplated hereby.
10. Assignment. This contract shall be binding upon and inure to the
benefit of the heirs and representatives of Executive and the assigns and
successors of the Company, but neither this Agreement nor any rights or
obligations hereunder shall be assignable or otherwise subject to hypothecation
by Executive (except by will or by operation of the laws of intestate
succession) or by the Company, except that the Company may assign this Agreement
to any successor (whether by merger, purchase or otherwise) to all or
substantially all of the stock, assets or businesses of the Company, if such
successor expressly agrees to assume the obligations of the Company hereunder.
11. Amendment. This Agreement may only be amended by written agreement of
the parties hereto.
12. Nondisclosure of Confidential Information; Non-Competition. (a)
Executive shall not, without the prior written consent of the Company, use,
divulge, disclose or make accessible to any other person, firm, partnership,
corporation or other entity any Confidential Information pertaining to the
business of the Company or any of its affiliates, except (i) while employed by
the Company, in the business of and for the benefit of the Company, or (ii) when
required to do so by a court of competent jurisdiction, by any governmental
agency having supervisory authority over the business of the Company, or by any
administrative body or legislative body (including a committee thereof) with
apparent jurisdiction to order Executive to divulge, disclose or make accessible
such information. For purposes of this Section 12(a), "Confidential Information"
shall mean non-public information concerning the financial data, strategic
business plans, product development (or other proprietary product data),
customer lists, marketing plans and other non-public, proprietary and
confidential information of the Company, or its subsidiaries (the "Restricted
Group") or customers, that, in any case, is not otherwise available to the
public (other than by Executive's breach of the terms hereof).(b) During the
period of his employment hereunder and for two years thereafter, Executive
agrees (subject to the provisions of Section 6.5) that, without the prior
written consent of the Company, (A) he will not, directly or indirectly, either
as principal, manager, agent, consultant, officer, advisor, stockholder,
partner, investor, lender or employee or in any other capacity, carry on, be
engaged in, advise or have any financial interest in, any business which is in
competition with the business of the Restricted Group and (B) he shall not, on
his own behalf or on behalf of any person, firm or company, directly or
indirectly, solicit or offer (except in the course of properly performing his
duties and responsibilities to the Company under this Agreement) employment to
any person who has been employed by the Restricted Group at any time during the
12 months immediately preceding such solicitation. (c) For purposes of this
Section 12, a business shall be deemed to be in competition with the Restricted
Group only if it is involved in the financing (including refinancing) of
purchases, sales, leases, rentals or other transactions in in competition with a
material part of the business of the Restricted Group. Nothing in this Section
12 shall be construed so as to preclude Executive from investing in any publicly
held company, provided Executive's
<PAGE>
<PAGE>
10 EXHIBIT 10(f)
FORM 10-Q for the Quarter
Ended September 30, 1996
beneficial ownership of any class of such company's securities does not exceed
1% of the outstanding securities of such class or from being employed by, or
rendering services to, any entity that is not in competition with the Restricted
Group with respect to a substantial portion of the business of the entity and
its affiliates so long as Executive's employment and services relate solely to
activities that are not material to the overall business of his employer and
that are not in competition with the business of the Restricted Group. (d)
Executive and the Company agree that this covenant not to compete is a
reasonable covenant under the circumstances, and further agree that if in the
opinion of any court of competent jurisdiction such restraint is not reasonable
in any respect, such court shall have the right, power and authority to excise
or modify such provision or provisions of this covenant as to the court shall
appear not reasonable and to enforce the remainder of the covenant as so
amended. Executive agrees that any breach of the covenants contained in this
Section 12 would irreparably injure the Company. Accordingly, Executive agrees
that the Company may, in addition to pursuing any other remedies it may have in
law or in equity, cease making any payments otherwise required by this Agreement
and obtain an injunction against Executive from any court having jurisdiction
over the matter restraining any further violation of this Agreement by
Executive.
13. Beneficiaries; References. Executive shall be entitled to select (and
change, to the extent permitted under any applicable law) a beneficiary or
beneficiaries to receive any compensation or benefit payable hereunder following
Executive's death, and may change such election, in either case by giving the
Company written notice thereof. In the event of Executive's death or a judicial
determination of his incompetence, reference in this Agreement to Executive
shall be deemed, where appropriate, to refer to his beneficiary, estate or other
legal representative. Any reference to the masculine gender in this Agreement
shall include, where appropriate, the feminine.
14. Survivorship. The respective rights and obligations of the parties
hereunder shall survive any termination of this Agreement to the extent
necessary to the intended preservation of such rights and obligations. The
provisions of this Section 14 are in addition to the survivorship provisions of
any other section of this Agreement.
15. Governing Law. This Agreement shall be construed, interpreted and
governed in accordance with the laws of the State of New Jersey, without
reference to rules relating to conflicts of law.
16. Effect on Prior Agreements/Waiver of Severance. This Agreement contains
the entire understanding between the parties hereto and supersedes in all
respects any prior or other agreement or understanding between the Company or
any affiliate of the Company and Executive. In addition, as this Agreement
provides for the payment of annual bonus and severance, Executive waives any and
all rights he may have to any annual bonus or any severance payments under any
Company annual bonus or severance plan or program.
17. Withholding. The Company shall be entitled to withhold from payment any
amount of withholding required by law.
<PAGE>
<PAGE>
11 EXHIBIT 10(f)
FORM 10-Q for the Quarter
Ended September 30, 1996
18. Survival. Notwithstanding the expiration of the term of this Agreement,
the provisions of Section 12 hereunder shall remain in effect as long as is
necessary to give effect thereto.
19. Counterparts. This Agreement may be executed in two or more
counterparts, each of which will be deemed an original.
ANTIGUA ACQUISITION CORPORATION
By ____________________________
Name:
Title:
Thomas C. Wajnert
<PAGE>
<PAGE>
12 EXHIBIT 10(f)
FORM 10-Q for the Quarter
Ended September 30, 1996
Exhibit A
APPROVED CURRENT OUTSIDE BOARD/ASSOCIATION ACTIVITY
<TABLE>
<S> <C> <C>
JLG Industries Inc. Corporate Director
NASDAQ listed
Equipment Leasing Trade Association Chairman
Association of America
Wharton Center for Financial Industry Research Center Trustee
Institutions
South Street Theatre Company Community Chairman
National Corporate Theatre Charitable President/Fund Director
ASP Educational Foundation Charitable Chairman
Morristown Memorial Hospital Community Director
</TABLE>
---------------------------------------------
AT&T Foundation (trustee) to be resigned as of 9/1/96
AT&T Universal Card Services Corp. (director) to be resigned as of 9/1/96.
<PAGE>
<PAGE>
13 EXHIBIT 10(f)
FORM 10-Q for the Quarter
Ended September 30, 1996
Exhibit B
SUBSCRIPTION AGREEMENT
SUBSCRIPTION AGREEMENT (hereinafter called this "Agreement"),
dated as of September 30, 1996, between Antigua Acquisition Corporation, a
Delaware corporation ("Merger Sub"), and Thomas C. Wajnert (the "Purchaser").
RECITALS
WHEREAS, Merger Sub has entered into an Agreement and Plan of
Merger, dated as of June 5, 1996, as amended (the "Merger Agreement"), among
AT&T Capital Corporation, a Delaware corporation (the "Company"), AT&T Corp., a
New York corporation, Hercules Limited, a Cayman Islands company ("Holdings"),
and Merger Sub, which is a wholly owned subsidiary of Holdings, providing for
the merger (the "Merger") of Merger Sub with and into the Company, after which
the Company will continue its corporate existence as the surviving corporation
(the "Surviving Corporation");
WHEREAS, Merger Sub was recently incorporated for the purpose of
merging with and into the Company;
WHEREAS, in connection with the Merger, Merger Sub proposes to
agree to sell to a limited number of management investors in accordance with the
terms hereof immediately prior to the Merger, in exchange for certain shares of
the Company presently held by such management investors, shares of its Common
Stock, par value $.01 per share ("Merger Sub Common Stock"), each of which will
be converted at the effective time of the Merger (the "Effective Time") pursuant
to the Merger Agreement into one share of Common Stock, par value $.01 per
share, of the Surviving Corporation ("Surviving Corporation Common Stock");
WHEREAS, Merger Sub also intends to grant following the Merger
certain options to purchase shares of Surviving Corporation Common Stock, upon
certain terms and subject to certain conditions, to such management investors;
and
WHEREAS, this Agreement is one of several agreements (such
agreements other than this Agreement being herein referred to collectively as
"Other Purchasers' Agreements") which have been, or which in the future will be,
entered into between the Company and other individuals who are or will be key
employees of the Company or one of its subsidiaries (collectively, the "Other
Purchasers").
NOW, THEREFORE, to implement the foregoing and in consideration
of the premises and of the mutual agreements contained herein, the parties
hereto agree as follows:
1. Pre-Merger Exchange of Stock.
(a) Subject to the terms and conditions of this Agreement, the
Purchaser agrees to purchase from Merger Sub, and Merger Sub agrees to sell
<PAGE>
<PAGE>
14 EXHIBIT 10(f)
FORM 10-Q for the Quarter
Ended September 30, 1996
to the Purchaser at the First Closing described in Section 1(b) hereof, 560,511
shares (the "Merger Sub Shares") (which number of shares equals the product of
4.5 and the number of Pre-Merger Shares set forth below) of Merger Sub Common
Stock, for a purchase price of $10.00 per share, payable by the delivery to
Merger Sub of 124,558 shares (the "Pre-Merger Shares") of Common Stock, par
value $.01 per share, of the Company purchased by the Purchaser pursuant to the
AT&T Capital Corporation 1993 Leveraged Stock Purchase Plan (the "Stock Purchase
Plan").
(b) The closing of the purchase and sale of the Merger Sub Shares
(the "Closing") shall take place on the Closing Date (as defined in the Merger
Agreement) immediately prior to the Effective Time and in the same location as
the Closing (as defined under the Merger Agreement). At the Closing, (i) the
Purchaser will deliver to Merger Sub the certificate or certificates
representing the Pre-Merger Shares, duly endorsed in blank or accompanied by
stock powers executed in blank with the Purchaser's signature guaranteed by a
member of the Medallion Signature Guarantee Program, and with all necessary
stock transfer stamps affixed, representing payment in full for the Merger Sub
Shares and (ii) Merger Sub will deliver to the Purchaser a duly executed and
issued stock certificate, registered in the Purchaser's name and representing
the Merger Sub Shares.
(c) Upon the Closing, the Pre-Merger Shares exchanged pursuant
hereto shall be deemed to be owned by the Parent Companies (as defined in the
Merger Agreement) and, as contemplated by Section 4.1(c) of the Merger
Agreement, at the Effective Time shall cease to be outstanding, be cancelled and
retired without payment of any consideration therefor and shall cease to exist.
(d) The shares of Surviving Corporation Common Stock into which
the Merger Sub Shares will be converted at the Effective Time pursuant to the
Merger Agreement are sometimes hereinafter referred to as the "Investment
Shares."
2. Conditions to the Obligations of the Parties at the
Closing.
The obligations of the parties hereto to consummate the purchase
and sale contemplated by Section 1 hereof shall be subject to the condition
that, at or prior to the Closing:
(i) The Company and the Purchaser shall have, to the extent
necessary, amended the terms of the stock purchase agreement under the Stock
Purchase Plan pursuant to which the Purchaser purchased the Pre-Merger Shares
from the Company to permit the transfer of the Pre-Merger Shares contemplated by
Section 1 hereof;
(ii) The Company and the Purchaser shall have amended the terms
of the pledge agreement providing for the pledge of the Pre-Merger Shares
substantially in the form of the amendment attached hereto as Exhibit E, and
have made mutually satisfactory arrangements, to permit the release of the
Pre-Merger Shares for the purpose of the exchange contemplated by Section 1
hereof and to permit the substitution of the
<PAGE>
<PAGE>
15 EXHIBIT 10(f)
FORM 10-Q for the Quarter
Ended September 30, 1996
Merger Sub Shares as "Pledged Property" under the terms of such pledge
agreement; and
(iii) To the extent necessary, the Company shall have agreed that
the release of the Pre-Merger Shares and the substitution of the Merger Sub
Shares as pledged property therefor shall not require any prepayment under the
Purchaser's promissory note issued pursuant to the Stock Purchase Plan (the
"Promissory Note").
3. Issuance of Options.
(a) Subject to the terms and conditions of this Agreement, as
promptly as practical following the Effective Time the Surviving Corporation
shall grant to the Purchaser an option or options to purchase Surviving
Corporation Common Stock (the "Options") at an exercise price of $10.00 per
share pursuant to, in accordance with, and subject to the terms and conditions
contained in, the AT&T Capital Corporation 1996 Long Term Incentive Plan (the
"LTIP") and the Stock Option Agreement attached hereto as Exhibit A (the "Stock
Option Agreement").
(b) The Surviving Corporation and the Purchaser shall execute and
deliver to each other copies of the Stock Option Agreement concurrently with the
issuance of the Options.
4. Restriction on Transfer.
(a) Except for transfers permitted by clauses (y) and (z) of
Section 5(a) hereof or a sale of shares of Stock (as hereinafter defined)
pursuant to an effective registration statement under the Act filed by the
Surviving Corporation or pursuant to the Stock Purchase Agreement or the Sale
Participation Agreement (each as hereinafter defined), the Purchaser agrees that
he or she will not transfer, sell, assign, pledge, hypothecate or otherwise
dispose of any shares of Stock at any time prior to the tenth anniversary of the
date of the Effective Time, other than in connection with a sale in the public
market (subject to the provisions of Rule 144 where applicable) from and after a
sale of shares of Surviving Corporation Common Stock to the public pursuant to a
registration statement under the Act that has been declared effective by the SEC
(other than a registration statement on Form S-4 or Form S-8, or any successor
or other forms promulgated for similar purposes, or a registration statement in
connection with an offering to employees of the Surviving Corporation and its
subsidiaries) that results in an active trading market in the Surviving
Corporation Common Stock (the "QPO"), provided that such sale in the public
market shall be subject to such blackAout period and/or other restrictions on
such sale as shall be reasonably requested by any underwriters in offerings of
the securities of the Surviving Corporation in order to insure the success of
such offerings and provided further that the number of shares that may be sold
in each one-year period following the QPO will be limited to the greater of (i)
25% of the total number of shares of Stock, on a fully diluted basis, held by
the Purchaser immediately following the initial QPO and (ii) that number of
shares of Surviving Corporation Common Stock underlying the Options or any other
stock options issued by the Surviving Corporation held by the Purchaser as to
which (A) pursuant to the terms of such options, the Purchaser's right to
purchase such stock would
<PAGE>
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16 EXHIBIT 10(f)
FORM 10-Q for the Quarter
Ended September 30, 1996
expire during such one-year period and (B) such options are actually exercised
by the Purchaser.
(b) In addition to the foregoing Section 4(a) and notwithstanding
the exceptions thereto, the Purchaser further agrees that he or she will not at
any time transfer, sell, assign, pledge, hypothecate or otherwise dispose of any
shares of Stock at any time, directly or indirectly, to any competitor or
prospective competitor of the Company or to any affiliate of such a person,
other than:
(i) in connection with a sale to a third party pursuant to the
Stock Purchase Agreement or the Sale Participation Agreement;
(ii) in an underwritten public offering upon the exercise of the
rights provided for under the Registration Rights Agreement (as hereinafter
defined); or
(iii) pursuant to a sale effected (when otherwise permitted under
this Agreement) through an open market, nondirected broker's transaction in
which the Purchaser as seller does not know the buyer is a competitor or
prospective competitor.
(c) No transfer of any such shares in violation hereof shall be
made or recorded on the books of the Company and any such attempted transfer
shall be void and of no effect.
(d) Notwithstanding the foregoing or the terms of the Stock
Purchase Agreement or the Sale Participation Agreement, if (i) at any time, the
Purchaser experiences an unexpected personal hardship or (ii) following the
fifth anniversary of the Effective Time, the Purchaser desires liquidity for his
or her Investment Shares for any personal reason, the Purchaser may deliver a
written request to the Compensation Committee of the Board of Directors of the
Surviving Corporation (directed to the attention of the Secretary of the
Corporation) that the Purchaser be permitted to sell some or all of his or her
Investment Shares. Although it is Merger Sub's present intention to make
reasonable efforts to provide liquidity to the Purchaser in such circumstances,
nothing contained in this Agreement should be construed as establishing any
obligation on the Surviving Corporation or any of its Affiliates to purchase any
Investment Shares from the Purchaser, other than the Purchaser's rights pursuant
to the Stock Purchase Agreement entered into with Nomura International plc, a
public limited company incorporated under the laws of England and Wales
("NIplc"). Any decision to purchase, or to arrange a purchase of, Surviving
Corporation Common Stock from the Purchaser under such circumstances will be
made in the sole discretion of the Surviving Corporation and its Affiliates on a
case-by-case basis, based upon the facts and circumstances that exist at the
time of the Purchaser's request.
(e) If on or before the tenth anniversary of the Effective Time
there has been neither a Change of Control (as defined in the Stock Option
Agreement) nor sales to the public constituting a QPO (as defined in the Stock
Option Agreement) representing aggregate Offering Percentages (as defined in the
Stock Option Agreement) of at least 50%, the Surviving Corporation will use its
best efforts to arrange, at its election, either a
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17 EXHIBIT 10(f)
FORM 10-Q for the Quarter
Ended September 30, 1996
Proposed Sale (as defined in the Sale Participation Agreement) that will
constitute a Change of Control (in connection with which, under the Sale
Participation Agreement, the Purchaser and certain other persons will be
entitled to certain sale participation rights with respect to all Investment
Shares then held) or an offering or offerings of shares of Surviving Corporation
Common Stock such that a QPO has occurred and the aggregate Offering Percentages
represented by sales to the public of Surviving Corporation Common Stock is at
least 50%, in either case within six months of the tenth anniversary of the
Effective Time. The six-month period set forth in the preceding sentence may be
extended by the Surviving Corporation, with the consent of the holders of at
least 60% of the aggregate of the Investment Shares and the Investment Shares
(as defined in the Other Purchasers' Agreements) then outstanding (without
regard to the ability of stockholders to direct the vote of the trustee under
the Voting Trust Agreement (as hereinafter defined)); provided that any such
extension or series of extensions shall not exceed a period of two years in the
aggregate.
5. Purchaser's Representations, Warranties and
Agreements.
(a) The Purchaser hereby represents and warrants that he is
acquiring the Merger Sub Shares and, at the time of exercise, the Surviving
Corporation Common Stock issuable upon exercise of the Options (collectively,
the "Stock") for investment for his or her own account and not with a view to,
or for resale in connection with, the distribution or other disposition thereof.
The Purchaser agrees and acknowledges that he or she will not, directly or
indirectly, offer, transfer, sell, assign, pledge, hypothecate or otherwise
dispose of ("Transfer") any shares of the Stock unless such Transfer complies
with Section 4 of this Agreement and (i) such Transfer is pursuant to an
effective registration statement under the Securities Act of 1933, as amended,
or the rules and regulations in effect thereunder (the "Act") or (ii) counsel
for the Purchaser (which shall be reasonably satisfactory to the Company) shall
have furnished the Company with an opinion, satisfactory in form and substance
to the Company, that no such registration is required because of the
availability of an exemption from registration under the Act. Notwithstanding
the foregoing, Merger Sub acknowledges and agrees that any of the following
transfers are deemed to be in compliance with the Act and this Agreement and no
opinion of counsel is required in connection therewith: (x) a transfer made
pursuant to Section 4 hereof, (y) a transfer upon the death of the Purchaser to
his or her executors, administrators, testamentary trustees, legatees or
beneficiaries (the "Purchaser's Estate") or a transfer to the executors,
administrators, testamentary trustees, legatees or beneficiaries of a person who
has become a holder of Stock in accordance with the terms of this Agreement,
provided that it is expressly understood that any such transferee shall be bound
by the provisions of this Agreement and (z) a transfer made after the date of
the purchase of the Stock in compliance with the federal securities laws to a
trust or custodianship the beneficiaries of which may include only the
Purchaser, his or her spouse or the Purchaser's lineal descendants (a
"Purchaser's Trust") or a transfer made to such a trust by a person who has
become a holder of Stock in accordance with the terms of this Agreement,
provided, in each such case under clause (z), that such transfer is made
expressly subject to this
<PAGE>
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18 EXHIBIT 10(f)
FORM 10-Q for the Quarter
Ended September 30, 1996
Agreement and that the transferee agrees in writing to be bound by the terms and
conditions hereof.
(b) The certificate (or certificates) representing the Stock
shall bear the following legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE TRANSFERRED, SOLD,
ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF UNLESS SUCH TRANSFER,
SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION COMPLIES WITH THE
PROVISIONS OF THE SUBSCRIPTION AGREEMENT DATED AS OF SEPTEMBER 30, 1996 BETWEEN
AT&T CAPITAL CORPORATION, AS SUCCESSOR BY MERGER TO ANTIGUA ACQUISITION
CORPORATION (THE "CORPORATION"), AND THE PURCHASER NAMED ON THE FACE HEREOF (A
COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE CORPORATION). EXCEPT AS
OTHERWISE PROVIDED IN SUCH AGREEMENT, NO TRANSFER, SALE, ASSIGNMENT, PLEDGE,
HYPOTHECATION OR OTHER DISPOSITION OF THE SHARES REPRESENTED BY THIS CERTIFICATE
MAY BE MADE EXCEPT (A) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR (B) IF (I) THE CORPORATION
HAS BEEN FURNISHED WITH A SATISFACTORY OPINION OF COUNSEL FOR THE HOLDER THAT
SUCH TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION IS
EXEMPT FROM THE PROVISIONS OF SECTION 5 OF THE ACT OR THE RULES AND REGULATIONS
IN EFFECT THEREUNDER, AND IN COMPLIANCE WITH APPLICABLE PROVISIONS OF STATE
SECURITIES LAWS, AND (II) IF THE HOLDER IS A CITIZEN OR RESIDENT OF ANY COUNTRY
OTHER THAN THE UNITED STATES, OR THE HOLDER DESIRES TO EFFECT ANY SUCH
TRANSACTION IN ANY SUCH COUNTRY, THE CORPORATION HAS BEEN FURNISHED WITH A
SATISFACTORY OPINION OR OTHER ADVICE OF COUNSEL FOR THE HOLDER THAT SUCH
TRANSACTION WILL NOT VIOLATE THE LAWS OF SUCH COUNTRY."
(c) The Purchaser acknowledges that he or she has been advised
that (i) the Stock has not been registered under the Act, (ii) except as set
forth herein and in the Stock Purchase Agreement and the Sale Participation
Agreement, the Stock must be held indefinitely and the Purchaser must continue
to bear the economic risk of the investment in the Stock unless it is
subsequently registered under the Act or an exemption from such registration is
available, (iii) it is not anticipated that there will be any public market for
the Stock, (iv) Rule 144 promulgated under the Act is not currently available
with respect to the sales of any securities of the Company, and the Company has
made no covenant to make such Rule available (except as provided in Section 7(b)
hereof), (v) when and if shares of the Stock may be disposed of without
registration in reliance on Rule 144, such disposition can be made only in
limited amounts in accordance with the terms and conditions of such Rule, (vi)
if the Rule 144 exemption is not available, public sale without registration
will require compliance with Regulation A or some other exemption under the Act,
(vii) a restrictive legend in the form heretofore set forth shall be placed on
the certificates representing the Stock and (viii) a notation shall be made in
the appropriate records of the Company indicating that the Stock is subject to
restriction on Transfer and, if the Company should at some time in the future
engage the services of a stock transfer agent, appropriate stop transfer
restrictions will be issued to such transfer agent with respect to the Stock.
(d) If any shares of the Stock are to be disposed of in
accordance with Rule 144 under the Act or otherwise, the Purchaser shall
<PAGE>
<PAGE>
19 EXHIBIT 10(f)
FORM 10-Q for the Quarter
Ended September 30, 1996
promptly notify the Company of such intended disposition and shall deliver to
the Company at or prior to the time of such disposition such documentation as
the Company may reasonably request in connection with such sale and, in the case
of a disposition pursuant to Rule 144, shall deliver to the Company an executed
copy of any notice on Form 144 required to be filed with the Securities and
Exchange Commission (the "SEC").
(e) The Purchaser agrees that, if any shares of the capital stock
of the Company are offered to the public pursuant to an effective registration
statement under the Act, the Purchaser will not effect any public sale or
distribution of any shares of the Stock not covered by such registration
statement within 7 days prior to, or within 180 days after, the effective date
of such registration statement (or such lesser period as the managing
underwriter of any such offering may permit), unless otherwise agreed to in
writing by the Company.
(f) The Purchaser represents and warrants that (i) he or she has
received and reviewed a Private Placement Memorandum (the "Private Placement
Memorandum") relating to the Stock and the documents referred to therein,
certain of which documents set forth the rights, preferences and restrictions
relating to the Stock, (ii) he or she has been given the opportunity to obtain
any additional information or documents, to consult with his or her legal,
financial and other advisors and to ask questions and receive answers about such
documents, Merger Sub, the Company and the business and prospects of the Company
and the Surviving Corporation that he or she deems necessary to evaluate the
merits and risks related to his or her investment in the Stock and to verify the
information contained in the Private Placement Memorandum, and he or she has
relied solely on the information contained in the Private Placement Memorandum
and (iii) he or she acknowledges and agrees that neither Merger Sub nor the
Company, nor any other person, makes any representation or warranty with respect
to any such information other than as, and solely to the extent, expressly set
forth in this Agreement.
(g) The Purchaser further represents and warrants that (i) his or
her financial condition is such that he or she can afford to bear the economic
risk of holding the Stock for an indefinite period of time and has adequate
means for providing for his or her current needs and personal contingencies,
(ii) he or she can afford to suffer a complete loss of his or her investment in
the Stock, (iii) all information which he or she has provided to Merger Sub or
the Company concerning himself or herself and his or her financial position is
correct and complete as of the date of this Agreement, (iv) he or she
understands and has taken cognizance of all risk factors related to the purchase
of the Stock, including those set forth in the Private Placement Memorandum
referred to above, and (v) his or her knowledge and experience in financial and
business matters are such that he or she is capable of evaluating the merits and
risks of his or her purchase of the Stock as contemplated by this Agreement.
6. Stock Issued to the Purchaser Upon Exercise of
Stock Options.
The Surviving Corporation may from time to time grant to the
Purchaser, in addition to the Options, options to purchase additional
<PAGE>
<PAGE>
20 EXHIBIT 10(f)
FORM 10-Q for the Quarter
Ended September 30, 1996
shares of Surviving Corporation Common Stock at $10.00 per share or at a
different option exercise price under the LTIP or another stock option or
incentive plan, or shares of stock under the LTIP or another incentive plan or
otherwise. The term "Stock" as used in this Agreement shall include all shares
of Surviving Corporation Common Stock purchased by the Purchaser pursuant to
this Agreement or issued to the Purchaser by the Surviving Corporation upon
exercise of the Options and of any other stock options held by the Purchaser and
any other Surviving Corporation Common Stock otherwise acquired by the Purchaser
at any time when this Agreement is in effect.
7. Merger Sub's Representations, Warranties and
Agreements.
(a) Merger Sub represents and warrants to the Purchaser that (i)
this Agreement has been duly authorized, executed and delivered by Merger Sub
and (ii) the Stock, when issued and delivered in accordance with the terms
hereof, will be duly and validly issued, fully paid and nonassessable.
(b) If the Surviving Corporation shall have engaged in a QPO, (i)
the Surviving Corporation will file the reports required to be filed by it under
the Act and the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and the rules and regulations adopted by the SEC thereunder, to the
extent required from time to time to enable the Purchaser to sell shares of
Stock, to the extent otherwise permitted under this Agreement, within the
limitations of the exemptions provided by (A) Rule 144 under the Act, as such
Rule may be amended from time to time, or (B) any similar rule or regulation
hereafter adopted by the SEC and (ii) the Surviving Corporation shall use
reasonable efforts to register such shares of Stock, to the extent not
previously registered under the Act and to the extent required from time to time
to enable the Purchaser to sell shares of Stock, to the extent otherwise
permitted under this Agreement, without being subject to any minimum holding
period for such Stock under (x) Rule 144 under the Act, as such Rule may be
amended from time to time, or (y) any similar rule or regulation hereafter
adopted by the SEC. Notwithstanding anything contained in this Section 7(b), the
Company may deregister Stock under Section 12 of the Exchange Act if it is then
permitted to do so pursuant to the Exchange Act and the rules and regulations
thereunder. Nothing in this Section 7(b) shall be deemed to limit in any manner
the restrictions on sales of Stock contained in this Agreement.
8. "Piggyback" Registration Rights.
(a) For so long as any of the shares of Stock held by the
Purchaser, the Purchaser's Trust or the Purchaser's Estate remain unregistered,
the Purchaser hereby agrees to be bound by all of the terms, conditions and
obligations of the Registration Rights Agreement of even date herewith (the
"Registration Rights Agreement") among the Company, Holdings and the other
persons who become parties thereto and, subject to the limitations set forth in
this Section 8, shall have all of the rights and privileges of the Registration
Rights Agreement, in each case as if the Purchaser were an original party (other
than Merger Sub); provided,
<PAGE>
<PAGE>
21 EXHIBIT 10(f)
FORM 10-Q for the Quarter
Ended September 30, 1996
however, that the Purchaser shall not have any rights to request registration
under Sections 3 ory4 of the Registration Rights Agreement; provided further,
that the Purchaser shall have no rights to request registration under the
Registration Rights Agreement to the extent that the Purchaser would be able to
sell, to the extent otherwise permitted under this Agreement, shares of Stock
pursuant to Rule 144 under the Act or another available exception to
registration; and provided further, that the Purchaser shall not be bound by any
amendments to the Registration Rights Agreement unless the Purchaser consents
thereto. Notwithstanding anything to the contrary contained in the Registration
Rights Agreement, the Purchaser's rights and obligations under the Registration
Rights Agreement shall be subject to the limitations and additional obligations
set forth in this Section 8, including, without limitation, the limitations on
registration set forth in Section 8(c) hereof. All shares of Stock held by the
Purchaser, the Purchaser's Trust or the Purchaser's Estate shall be deemed to be
"Registrable Securities" as defined in the Registration Rights Agreement.
(b) The Surviving Corporation will promptly notify the Purchaser
in writing (a "Notice") upon the Surviving Corporation's receipt of a written
request ("Holdings' Request") from Holdings requesting that the Surviving
Corporation effect the registration under the Act of all or part of Holdings'
Registrable Securities (as defined in the Registration Rights Agreement)
("Holdings' Requested Registration") pursuant to Section 4(a) of the
Registration Rights Agreement. If within 15 days of the receipt by the Purchaser
of such Notice, the Surviving Corporation receives from the Purchaser, the
Purchaser's Trust or the Purchaser's Estate a written request (a "Purchaser's
Request") (which request will be irrevocable unless otherwise mutually agreed to
in writing by the Purchaser and the Surviving Corporation) that the Surviving
Corporation effect the registration under the Act of all or part of the
Registrable Securities (as defined in the Registration Rights Agreement) held by
the Purchaser, the Purchaser's Trust or the Purchaser's Estate, as the case may
be, and specifying the amount and intended method of disposition thereof (the
"Purchaser's Requested Registration"), the Surviving Corporation will, as
expeditiously as possible, use reasonable efforts to effect the registration
under the Act of the Purchaser's Requested Registration so as to permit the
disposition (in accordance with the intended method thereof as aforesaid) of the
Purchaser's Registrable Securities so to be registered; provided, however, that
the Company shall have no obligation to register the Purchaser's Registrable
Securities pursuant to this Section 8(b) unless the Surviving Corporation has
effected Holdings' Requested Registration in response to the Holdings' Request
in accordance with Section 4(d) of the Registration Rights Agreement; and
provided further that for each such registration, only one Purchaser's Request,
which shall be executed by the Purchaser, the Purchaser's Trust or the
Purchaser's Estate, as the case may be, may be submitted for all of the
Purchaser's Registrable Securities.
(c) The maximum number of the Purchaser's shares of Stock that
the Surviving Corporation will be required to register under the Act pursuant to
a Purchaser's Request will be the lowest of (i) that number of shares of Stock
equal to the product of the total number of all Investment Shares purchased by
the Purchaser under this Agreement multiplied by a fraction, the numerator of
which is the number of shares of Surviving
<PAGE>
<PAGE>
22 EXHIBIT 10(f)
FORM 10-Q for the Quarter
Ended September 30, 1996
Corporation Common Stock to be registered in such registration on behalf of
Holdings and the denominator of which is the total number of shares of Surviving
Corporation Common Stock held by Holdings immediately following the Effective
Time, (ii) 25% of the total number of Investment Shares purchased by the
Purchaser under this Agreement and (iii) the Purchaser's share (pro rata based
upon the aggregate number of Registrable Securities which the Purchaser and all
other persons having registration rights under the Registration Rights Agreement
(other than Holdings) have requested to be registered) of the maximum number of
Registrable Securities which the Surviving Corporation can register pursuant to
this Section 8 and Section 4 of the Registration Rights Agreement without, in
the good faith view of the underwriters, adverse effect on the offering. The
maximum number of shares of Stock that the Surviving Corporation will be
required to register under the Act pursuant to all Purchaser's Requests in the
aggregate will be that number that equals 25% of the total number of Investment
Shares purchased by the Purchaser under this Agreement.
(e) Upon delivering a Purchaser's Request the Purchaser will, if
requested by the Surviving Corporation, execute and deliver a custody agreement
and power of attorney in form and substance satisfactory to the Surviving
Corporation with respect to the shares of Stock to be registered pursuant to
this Section 8 (a "Custody Agreement and Power of Attorney"). The Custody
Agreement and Power of Attorney will provide, among other things, that the
Purchaser will deliver to and deposit in custody with the custodian and
attorney-in-fact named therein a certificate or certificates representing such
shares of Stock (duly endorsed in blank by the registered owner or owners
thereof or accompanied by duly executed stock powers in blank) and irrevocably
appoint said custodian and attorney-in-fact as the Purchaser's agent and
attorney-in-fact with full power and authority to act under the Custody
Agreement and Power of Attorney on the Purchaser's behalf with respect to the
matters specified therein.
(f) The Purchaser agrees that he will execute such other
agreements as the Surviving Corporation may reasonably request to further
evidence the provisions of this Section 8.
9. Rights to Negotiate Repurchase Price.
Nothing in this Agreement, the Stock Purchase Agreement or the
Sale Participation Agreement shall be deemed to restrict or prohibit the
Surviving Corporation from purchasing shares of Stock or options from the
Purchaser, at any time, upon such terms and conditions, and for such price, as
may be mutually agreed upon between the parties hereto, (i) whether or not at
the time of such purchase circumstances exist which specifically grant any
persons the right to purchase, or the Purchaser the right to sell, such shares
and (ii) notwithstanding the fact that none of this Agreement, the Stock
Purchase Agreement or the Sale Participation Agreement provide the Surviving
Corporation or the Purchaser with any rights with respect to the repurchase by
the Surviving Corporation of options.
10. Covenant Regarding 83(b) Election.
Except as the Surviving Corporation may otherwise agree in
writing, the Purchaser hereby covenants and agrees that he or she will make
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23 EXHIBIT 10(f)
FORM 10-Q for the Quarter
Ended September 30, 1996
an election provided pursuant to Treasury Regulation 1.83A2 with respect to the
Investment Shares; and the Purchaser further covenants and agrees that he or she
will furnish the Surviving Corporation with copies of the forms of election the
Purchaser files within 30 days after the date hereof.
11. Notice of Change of Beneficiary.
Immediately prior to any Transfer of Stock to a Purchaser's
Trust, the Purchaser shall provide the Surviving Corporation with a copy of the
instruments creating the Purchaser's Trust and with the identity of the
beneficiaries of the Purchaser's Trust. The Purchaser shall notify the Surviving
Corporation immediately prior to any change in the identity of any beneficiary
of the Purchaser's Trust.
12. Recapitalizations, etc.
The provisions of this Agreement shall apply, to the full extent
set forth herein with respect to the Stock or the Options, to any and all shares
of capital stock of the Surviving Corporation or any capital stock, partnership
units or any other security evidencing ownership interests in any successor or
assign of the Surviving Corporation (whether by merger, consolidation, sale of
assets or otherwise) which may be issued in respect of, in exchange for, or
substitution of the Stock or the Options, by reason of any stock dividend,
split, reverse split, combination, recapitalization, liquidation,
reclassification, merger, consolidation or otherwise.
13. Purchaser's Employment by the Surviving
Corporation.
Nothing contained in this Agreement or in any other agreement
entered into by Merger Sub or any other person and the Purchaser
contemporaneously with the execution of this Agreement (i) obligates the
Surviving Corporation or any subsidiary of the Surviving Corporation to employ
the Purchaser in any capacity whatsoever or (ii) prohibits or restricts the
Surviving Corporation (or any such subsidiary) from terminating the employment,
if any, of the Purchaser at any time or for any reason whatsoever, with or
without cause, and the Purchaser hereby acknowledges and agrees that, except to
the extent that certain information, if any, with respect to his or her
employment has been delivered to the Purchaser in writing, neither Merger Sub
nor the Company, nor any other person, has made any representations or promises
whatsoever to the Purchaser concerning the Purchaser's employment or continued
employment by the Surviving Corporation or any of the terms and conditions of
such employment.
14. State and Foreign Securities Laws.
Merger Sub hereby agrees to use its best efforts to comply with
all state securities or "blue sky" laws and all foreign securities laws which
might be applicable to the sale of the Stock and the issuance of the Options to
the Purchaser.
15. Agreement to Extend Promissory Notes of
the Purchaser.
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24 EXHIBIT 10(f)
FORM 10-Q for the Quarter
Ended September 30, 1996
Merger Sub and the Purchaser hereby agree that, as promptly as
practicable following, and effective as of, the Effective Time, the Surviving
Corporation and the Purchaser shall amend the Promissory Note substantially in
the form of the amendment attached hereto as Exhibit F. Merger Sub also agrees
to extend further the Maturity Date (as defined in the Promissory Note) to the
extent that, at the time that such Maturity Date would otherwise occur, the then
existing restrictions on transferability under this Agreement would not permit
the sale of that number of shares of Stock such that the proceeds from such sale
are an amount at least equal to the remaining principal balance and accrued
interest on the Promissory Note; provided that the Surviving Corporation shall
not be obligated to extend such Maturity Date at any time that there are no
restrictions on the number of shares of Stock that may be sold.
16. Other Agreements.
Contemporaneously with the execution of this Agreement, the
Purchaser is entering into (i) the Stock Purchase Agreement in the form attached
hereto as Exhibit B (the "Stock Purchase Agreement") with Merger Sub and NIplc,
(ii) the Sale Participation Agreement in the form attached hereto as Exhibit C
(the "Sale Participation Agreement") with NIplc and (iii) the Voting Trust
Agreement in the form attached hereto as Exhibit D (the "Voting Trust
Agreement") with Thomas C. Wajnert, not individually but solely in his capacity
as trustee under the Voting Trust Agreement, Merger Sub and the Other
Purchasers.
17. Binding Effect.
The provisions of this Agreement shall be binding upon and accrue
to the benefit of the parties hereto and their respective heirs, legal
representatives, successors and assigns. In the case of a transferee permitted
under Section 5(a) hereof, such transferee shall be deemed the Purchaser
hereunder; provided, however, that no transferee (including without limitation,
transferees referred to in Section 5(a) hereof) shall derive any rights under
this Agreement unless and until such transferee has delivered to the Surviving
Corporation a valid undertaking and becomes bound by the terms of this
Agreement.
18. Amendment.
This Agreement may be amended only by a written instrument signed
by the parties hereto.
19. Applicable Law.
The laws of the State of Delaware shall govern the
interpretation, validity and performance of the terms of this Agreement,
regardless of the law that might be applied under principles of conflicts of
law. Any suit, action or proceeding against the Purchaser, with respect to this
Agreement, or any judgment entered by any court in respect of any thereof, may
be brought in any court of competent jurisdiction in the State of New Jersey, as
the Surviving Corporation may elect in its sole discretion, and the Purchaser
hereby submits to the non-exclusive jurisdiction of such courts for the purpose
of any such suit, action,
<PAGE>
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25 EXHIBIT 10(f)
FORM 10-Q for the Quarter
Ended September 30, 1996
proceeding or judgment. By the execution and delivery of this Agreement, the
Purchaser appoints the Secretary of the Surviving Corporation, at the executive
offices of the Surviving Corporation in Morristown, New Jersey (or such other
place within the State of New Jersey as may be designated for such purpose), as
his or her agent upon which process may be served in any such suit, action or
proceeding. Service of process upon such agent, together with notice of such
service given to the Purchaser in the manner provided in Section 21 hereof,
shall be deemed in every respect effective service of process upon the Purchaser
in any suit, action or proceeding. Nothing herein shall in any way be deemed to
limit the ability of the Surviving Corporation to serve any such writs, process
or summonses in any other manner permitted by applicable law or to obtain
jurisdiction over the Purchaser, in such other jurisdictions and in such manner,
as may be permitted by applicable law. The Purchaser hereby irrevocably waives
any objections which he or she may now or hereafter have to the laying of the
venue of any suit, action or proceeding arising out of or relating to this
Agreement brought in any court of competent jurisdiction in the State of New
Jersey, and hereby further irrevocably waives any claim that any such suit,
action or proceeding brought in any such court has been brought in any
inconvenient forum. No suit, action or proceeding against the Surviving
Corporation with respect to this Agreement may be brought in any court, domestic
or foreign, or before any similar domestic or foreign authority other than in a
court of competent jurisdiction in the State of New Jersey, and the Purchaser
hereby irrevocably waives any right which he or she may otherwise have had to
bring such an action in any other court, domestic or foreign, or before any
similar domestic or foreign authority. Merger Sub, on behalf of itself and the
Surviving Corporation, hereby submits to the jurisdiction of such courts for the
purpose of any such suit, action or proceeding.
20. Miscellaneous.
In this Agreement (i) all references to "dollars" or "$" are to
United States dollars and (ii) the word "or" is not exclusive. If any provision
of this Agreement shall be declared illegal, void or unenforceable by any court
of competent jurisdiction, the other provisions shall not be affected, but shall
remain in full force and effect.
21. Notices.
All notices and other communications provided for herein shall be
in writing and shall be deemed to have been duly given if delivered by hand
(whether by overnight courier or otherwise) or sent by registered or certified
mail, return receipt requested, postage prepaid, to the party to whom it is
directed:
(i) If to Merger Sub or the Surviving Corporation, to it at the
following address:
Antigua Acquisition Corporation
c/o AT&T Capital Corporation
<PAGE>
<PAGE>
26 EXHIBIT 10(f)
FORM 10-Q for the Quarter
Ended September 30, 1996
or
AT&T Capital Corporation
44 Whippany Road
Morristown, New Jersey 07960
Attention: Vice President - Human Resources
with a copy to:
AT&T Capital Corporation
44 Whippany Road
Morristown, New Jersey 07960
Attention: General Counsel
(ii) If to the Purchaser, to him at the address set forth below
under his signature;
or at such other address as either party shall have specified by notice in
writing to the other.
Any notice which is required to be given to the Purchaser shall, if the
Purchaser is then deceased, be given to the Purchaser's personal representative
if such representative has previously informed the Surviving Corporation of his
or her status and address by written notice under this Section 21.
22. Confidential Information.
(a) The Purchaser will not disclose or use at any time, any
Confidential Information (as hereinafter defined) of which the Purchaser is or
becomes aware, whether or not such information is developed by the Purchaser,
except to the extent that such disclosure or use is directly related to and
required by the Purchaser's performance of duties, if any, assigned to the
Purchaser by the Surviving Corporation. As used in this Agreement, the term
"Confidential Information" means information that is not generally known to the
public and that is used, developed or obtained by the Surviving Corporation or
its subsidiaries in connection with its business, including but not limited to
(i) products or services, (ii) fees, costs and pricing structures, (iii)
information regarding business and strategic plans, including, without
limitation, any potential corporate or business transactions or other corporate
developments, (iv) computer software, including operating systems, applications
and program listings, (v) flow charts, manuals and documentation, (vi) data
bases, (vii) accounting and business methods, (viii) inventions, devices, new
developments, methods and processes, whether patentable or unpatentable and
whether or not reduced to practice, (ix) customers and clients and customer or
client lists, (x) other copyrightable works, (xi) all technology and trade
secrets, and (xii) all similar and related information in whatever form.
Confidential Information will not include any information that has been
generally available to the public prior to the date the Purchaser discloses or
uses such information. The Purchaser acknowledges and agrees that all
copyrights, works, inventions, innovations, improvements, developments, patents,
trademarks and all similar or related rights and information which relate to the
actual or anticipated business of the Surviving Corporation and its subsidiaries
(including its predecessors) and
<PAGE>
<PAGE>
27 EXHIBIT 10(f)
FORM 10-Q for the Quarter
Ended September 30, 1996
conceived, developed or made by the Purchaser while employed by the Company, the
Surviving Corporation or their subsidiaries belong to the Surviving Corporation.
The Purchaser will perform all actions reasonably requested by the Surviving
Corporation (whether during or after the Purchaser's employment by the Surviving
Corporation or any of its subsidiaries) to establish and confirm such ownership
at the Surviving Corporation's expense (including without limitation
assignments, consents, powers of attorney and other instruments).
(b) In the event that the Purchaser is requested or legally
required (by oral questions, interrogatories, requests for information or
documents in legal proceedings, subpoena, civil investigative demand or other
similar process) to disclose any of the Confidential Information, the Purchaser
shall provide the Surviving Corporation with prompt notice of any such request
or requirement so that the Surviving Corporation may seek a protective order or
other appropriate remedy and/or waive compliance with the provisions of Section
22(a) hereof. If, in the absence of a protective order or other remedy or the
receipt of a waiver by the Surviving Corporation, the Purchaser is nonetheless,
in the opinion of counsel, required to disclose Confidential Information, the
Purchaser may, without liability hereunder, disclose only that portion of the
Confidential Information that in the opinion of his or her counsel is legally
required to be disclosed; provided that the Purchaser attempts to preserve the
confidentiality of the Confidential Information, including, without limitation,
by cooperating with the Surviving Corporation to obtain an appropriate
protective order or other reliable assurance that confidential treatment will be
accorded the Confidential Information.
(c) Notwithstanding Section 22(a) hereof, if at any time a court
holds that the restrictions stated in such Section 22(a) are unreasonable or
otherwise unenforceable under circumstances then existing, the parties hereto
agree that the maximum period or scope determined to be reasonable under such
circumstances by such court will be substituted for the stated period or scope.
Because the Purchaser's services are unique and because the Purchaser has had
access to Confidential Information, the parties hereto agree that money damages
will be an inadequate remedy for any breach of this Agreement. In the event of a
breach or threatened breach of this Agreement, the Surviving Corporation or its
successors or assigns may, in addition to other rights and remedies existing in
their favor, apply to any
<PAGE>
<PAGE>
28 EXHIBIT 10(f)
FORM 10-Q for the Quarter
Ended September 30, 1996
court of competent jurisdiction for specific performance and/or injunctive
relief in order to enforce, or prevent any violations of, the provisions hereof
(without the posting of a bond or other security).
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
ANTIGUA ACQUISITION CORPORATION
By: ___________________________
Name:
Title:
________________________________
Purchaser
________________________________
________________________________
Address of Purchaser
<PAGE>
<PAGE>
29 EXHIBIT 10(f)
FORM 10-Q for the Quarter
Ended September 30, 1996
EXHIBIT C
STOCK OPTION AGREEMENT
THIS AGREEMENT, dated as of October 1, 1996 is made by and
between AT&T Capital Corporation, a Delaware corporation hereinafter referred to
as the "Company", and Thomas C. Wajnert, an employee of the Company or a
Subsidiary (as defined below) of the Company, hereinafter referred to as
"Optionee".
WHEREAS, the Company wishes to afford the Optionee the
opportunity to purchase shares of its $.01 par value Common Stock ("Common
Stock");
WHEREAS, the Company wishes to carry out the Plan (as hereinafter
defined), the terms of which are hereby incorporated by reference and made a
part of this Agreement; and
WHEREAS, the Board of Directors of the Company or the Committee
(as hereinafter defined), appointed to administer the Plan, has determined that
it would be to the advantage and best interest of the Company and its
stockholders to grant the options provided for herein to the Optionee as an
incentive for increased efforts during his term of office with the Company or
its Subsidiaries, and has advised the Company thereof and instructed the
undersigned officer to issue said Options;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained and other good and valuable consideration, receipt of which is hereby
acknowledged, the parties hereto do hereby agree as follows:
ARTICLE I
DEFINITIONS
Whenever the following terms are used in this Agreement, they
shall have the meaning specified in the Plan or below unless the context clearly
indicates to the contrary.
Section 1.1 - Act
"Act" shall mean the Securities Act of 1933, as amended, or any
successor law.
Section 1.2 - Affiliate
"Affiliate" shall mean, with respect to any specified Person, any
other Person that directly, or indirectly through one or more intermediaries,
controls, is controlled by, or is under common control with, such specified
Person. Solely for purposes of this Agreement, GRS Holding Company Limited and
Babcock & Brown, Inc. and their respective Affiliates shall be deemed to be
Affiliates of Nomura (as defined below).
<PAGE>
<PAGE>
30 EXHIBIT 10(f)
FORM 10-Q for the Quarter
Ended September 30, 1996
Section 1.3 - Board of Directors
"Board of Directors" means the Board of Directors of the Company.
Section 1.4 - Cause
"Cause" shall have the meaning set forth in the Employment
Agreement.
Section 1.5 - Change of Control
"Change of Control" shall mean (i) any transaction (including,
without limitation, a merger, consolidation or reorganization, or a sale of
derivative securities that effectively transfers a beneficial ownership
interest) as a result of which either (a) (1) the combined beneficial ownership
interest of the Company by Nomura International plc ("Nomura") and its
Affiliates falls below 40% on a fully diluted basis and (2) the combined
beneficial ownership interest of the Company by another Person and its
Affiliates exceeds the combined beneficial ownership interest of Nomura and its
Affiliates or (b) the combined beneficial ownership interest of the Company by
Nomura and its Affiliates falls below 20% on a fully diluted basis or (ii) a
sale, or series of sales, of all or substantially all of the assets of the
Company as a result of which either (A) (I) the combined beneficial ownership
interest by Nomura and its Affiliates of the assets of the business conducted by
the Company falls below 40% of the assets of the business conducted by the
Company immediately prior to such sale or series of sales (measured on the basis
of the net book value, on a consolidated basis, thereof) and (II) the combined
beneficial ownership interest of another Person of former assets of the business
as conducted by the Company immediately prior to such sale or series of sales
exceeds the combined beneficial ownership interest by Nomura and its Affiliates
of the assets of the business conducted by the Company immediately prior to such
sale or series of sales (measured on the basis of the net book value, on a
consolidated basis, thereof) or (B) the combined beneficial ownership interest
by Nomura and its Affiliates of the assets of the business conducted by the
Company falls below 20% of the assets of the business conducted by the Company
immediately prior to such sale or series of sales (measured on the basis of the
net book value, on a consolidated basis, thereof); provided that the provisions
set forth in clause (ii) shall be deemed not to apply in the case of any
transfer, sale, assignment, pledge, hypothecation or other disposition of assets
in connection with, or incident to, any borrowings, securitizations or other
financing transactions or in the case of the recapitalization, reclassification,
liquidation or dissolution of the Company.
Section 1.6 - Code
"Code" shall mean the Internal Revenue Code of 1986, as amended.
Section 1.7 - Committee
"Committee" shall mean the Compensation Committee of the Board of
Directors.
Section 1.8 - Common Stock and Share
<PAGE>
<PAGE>
31 EXHIBIT 10(f)
FORM 10-Q for the Quarter
Ended September 30, 1996
"Common Stock" or "Share" means common stock of the Company which
may be authorized but unissued, or issued and reacquired.
Section 1.9 - Disability
"Disability" shall have the meaning set forth for the term
"totally and permanently disabled" in the Employment Agreement.
Section 1.10 - Effective Time
"Effective Time" shall mean the date of the effective time of the
merger of Antigua Acquisition Corporation, a Delaware corporation ("Merger
Sub"), with and into the Company pursuant to the Agreement and Plan of Merger,
dated as of June 5, 1996, as amended, among the Company, AT&T Corp., a New York
corporation, Hercules Limited, a Cayman Islands company, and Merger Sub.
Section 1.11 - Employment Agreement
"Employment Agreement" shall mean the Employment Agreement, dated
as of September 30, 1996, between Merger Sub and the Optionee, as amended or
supplemented from time to time.
Section 1.12 - Fair Market Value
"Fair Market Value" shall mean, with respect to a share of Common
Stock, (i) prior to an IPO, the amount established at the immediately preceding
determination, which determination will have been made not less than annually,
by an independent U.S.-based investment banker (or, in the sole discretion of
the Board of Directors, an independent U.S.-based appraisal firm) selected by
the Board of Directors as the fair market value of a Share without giving effect
to any discount attributable to the illiquidity of the Shares or the fact that
any such Shares may constitute a minority interest in the Company or any premium
attributable to any special rights of any holder with respect to its Shares;
provided that prior to the first such determination (which shall occur not later
than January 31, 1997), the Fair Market Value of a share of Common Stock shall
be the Exercise Price provided in Section 2.2(a) hereof and (ii) after an IPO,
the Market Price Per Share of the Shares.
Section 1.13 - Good Reason
"Good Reason" shall have the meaning set forth in the Employment
Agreement.
Section 1.14 - Grant Date
"Grant Date" shall mean the date on which the Options provided
for in this Agreement were granted.
Section 1.15 - Group
"Group" shall mean, with respect to a particular time, any of the
Company and its Subsidiaries as of such time. Any event that results in an
entity ceasing to be a Subsidiary of the Company shall be deemed to
<PAGE>
<PAGE>
32 EXHIBIT 10(f)
FORM 10-Q for the Quarter
Ended September 30, 1996
constitute the cessation of employment with the Group of all employees of such
former Subsidiary, except for such employees of such former Subsidiary who
become employees of the Company or one of its then Subsidiaries within 10 days
of such event.
Section 1.16 - IPO
"IPO" shall mean a sale of Shares to the public that results in
an active trading market in the Shares.
Section 1.17 - Market Price Per Share
"Market Price Per Share" at any date shall be deemed to be the
average of the daily closing prices for the 20 consecutive trading days
commencing on the 30th trading day prior to the date in question. The closing
price for each day shall be (x) if the Common Stock is listed or admitted to
trading on a national securities exchange, the closing price on the New York
Stock Exchange Consolidated Tape (or any successor composite tape reporting
transactions on national securities exchanges) or, if such a composite tape
shall not be in use or shall not report transactions in the Common Stock, the
last reported sales price regular way on the principal national securities
exchange on which the Common Stock is listed or admitted to trading (which shall
be the national securities exchange on which the greatest number of shares of
Common Stock has been traded during such 20 consecutive trading days), or, if
there is no transaction on any such day in any situation, the mean of the bid
and asked prices on such day or (y) if the Common Stock is not listed or
admitted to trading on any such exchange, the closing price, if reported, or, if
the closing price is not reported, the average of the closing bid and asked
prices as reported by the National Association of Securities Dealers Automated
Quotation System (NASDAQ) or a similar source selected from time to time by the
Company for the purpose. In the event such closing prices are unavailable, the
Market Price Per Share shall be deemed to be the fair market value as determined
in good faith by the Board of Directors, on the basis of such relevant factors
as it in good faith considers, in the reasonable judgment of the Board of
Directors, appropriate.
Section 1.18 - Normal Retirement
"Normal Retirement" shall mean the voluntary retirement of the
Optionee on a date on or after December 31, 1999.
Section 1.19 - Offering Percentage
"Offering Percentage" shall mean, with respect to any public
offering of Shares, that percentage of all outstanding stock of the Company
(determined as of the time after the relevant public offering) represented by
the Shares sold in such public offering.
Section 1.20 - Options
"Options" shall mean the options to purchase Common Stock granted
under this Agreement, which options have not been designated as "incentive stock
options" within the meaning of Section 422 of the Code.
<PAGE>
<PAGE>
33 EXHIBIT 10(f)
FORM 10-Q for the Quarter
Ended September 30, 1996
Section 1.21 - Person
"Person" shall mean any individual, partnership, firm,
corporation, limited liability company, association, trust, unincorporated
organization or other entity.
Section 1.22 - Plan
"Plan" shall mean the AT&T Capital Corporation 1996 Long Term
Incentive Plan.
Section 1.23 - Pronouns
The masculine pronoun shall include the feminine and neuter, and
the singular the plural, where the context so indicates.
Section 1.24 - QPO
"QPO" shall mean a sale of shares of Common Stock to the public
pursuant to a registration statement under the Act that has been declared
effective by the Securities and Exchange Commission (the "Commission") (other
than a registration statement on Form S-4 or Form S-8, or any successor or other
forms promulgated for similar purposes, or a registration statement in
connection with an offering to employees of the Company and its Subsidiaries)
that results in an active trading market in the Common Stock.
Section 1.25 - RIF Termination
"RIF Termination" shall mean (i) termination of an Optionee's
employment by the Group as a result of a reduction in force, facility relocation
or closing, or other Company program for job elimination, in each case that
results in the termination of a significantly large number of employees, or (ii)
termination within 135 days prior to a Change of Control if the Optionee can
demonstrate that such termination (a) was at the request of a third party with
which the Company had entered into negotiations or provided for in an agreement
with regard to such Change of Control or (c) otherwise occurred in connection
with, or in anticipation of, such Change of Control; and provided further that,
in the case of either (i) or (ii) above, such Change of Control actually occurs.
Section 1.26 - Secretary
"Secretary" shall mean the Secretary of the Company.
Section 1.27 - Subsidiary
"Subsidiary" shall mean any corporation other than the Company in
an unbroken chain of corporations beginning with the Company if each of the
corporations, or group of commonly controlled corporations, other than the last
corporation in the unbroken chain then owns stock possessing 50% or more of the
voting stock in one of the other corporations in such chain.
<PAGE>
<PAGE>
34 EXHIBIT 10(f)
FORM 10-Q for the Quarter
Ended September 30, 1996
ARTICLE II
GRANT OF OPTIONS
Section 2.1 - Grant of Options
For good and valuable consideration, on and as of the date hereof
the Company irrevocably grants to the Optionee an Option to purchase any part or
all of an aggregate of the number of shares set forth with respect to each such
Option on the signature page hereof of its Common Stock, par value $.01 per
share, upon the terms and conditions set forth in this Agreement.
Section 2.2 - Exercise Price
(a) The exercise price of the Shares covered by the Options (the
"Exercise Price") shall be $10.00 per Share, without commission or other charge.
(b) Notwithstanding the foregoing, in the case of termination
without Cause (other than a RIF Termination) or resignation for Good Reason
prior to the time the Options become exercisable in full in accordance with
Section 3.2(a), the Exercise Price shall be increased by the amount, if any, of
the excess of the Fair Market Value of the Common Stock as of the date of
exercise of the Option over its Fair Market Value (x) as of the date of such
termination or resignation, if an IPO has previously occurred or (y) prior to an
IPO, at the next period determination of Fair Market Value following such
termination or resignation or as of the day following an IPO, whichever is
earlier.
Section 2.3 - Options Confer No Rights to Continued Employment
Nothing in this Agreement or in the Plan shall confer upon the
Optionee any right to continue in the employ of the Company or any Subsidiary or
shall interfere with or restrict in any way the rights of the Company and its
Subsidiaries, which are hereby expressly reserved, to terminate the employment
of the Optionee at any time for any reason whatsoever, with or without Cause.
Section 2.4 - Adjustments in Options
Subject to Paragraph 9 of the Plan, in the event that the
outstanding shares of the stock subject to an Option are, from time to time,
changed into or exchanged for a different number or kind of shares of the
Company or other securities of the Company by reason of a merger, consolidation,
recapitalization, reclassification, stock split, stock dividend, combination of
shares, or otherwise, the Committee shall make an appropriate and equitable
adjustment in the number and kind of shares or other consideration as to which
such Option, or portions thereof then unexercised, shall be exercisable and the
exercise price therefor. Any such adjustments made by the Committee shall be
final and binding upon the Optionee, the Company and all other interested
Persons.
<PAGE>
<PAGE>
35 EXHIBIT 10(f)
FORM 10-Q for the Quarter
Ended September 30, 1996
ARTICLE III
PERIOD OF EXERCISABILITY
Section 3.1 - Vesting
(a) (i) With respect to the number of Shares covered by the
Options identified as Cycle I on the signature page hereof, Options shall become
vested, thereby becoming eligible for exercise in accordance with Section 3.2,
with respect to 20% of the underlying Shares in Cycle I (or such lesser
percentage of the underlying Shares in Cycle I as then represents Options that
have not yet become vested) on each anniversary of the Grant Date beginning with
the first anniversary of the Grant Date; provided that if on any anniversary of
the Grant Date beginning with the first anniversary thereof the Optionee has met
in each year or portion thereof following the Effective Time the performance
criteria relating hereto which are to be established by good faith agreement
between the Board of Directors of the Company and the Optionee taking into
account the historical performance of the Company reasonably promptly following
the Effective Time (and, if not so established, to be established by arbitration
under the procedures set forth in the Employment Agreement), Options shall
become vested, thereby becoming eligible for exercise in accordance with Section
3.2, with respect to 33-1/3% of the underlying Shares in Cycle I (or such lesser
percentage of the underlying Shares in Cycle I as then represents Options that
have not yet become vested) on such anniversary of the Grant Date.
(ii) With respect to the number of Shares covered by the Options
identified as Cycle II on the signature page hereof, Options shall become
vested, thereby becoming eligible for exercise in accordance with Section 3.2,
with respect to 50% of the underlying Shares in Cycle II on each anniversary of
the Grant Date beginning with the fourth anniversary of the Grant Date; provided
that the Optionee is serving as either Chairman or Chief Executive Officer or
both on the date that Options with respect to such Shares are scheduled to
become vested under this clause (ii).
(iii) Options which have become vested in accordance with this
Section 3.1(a) are hereinafter referred to as "Vested Options".
(b) Notwithstanding the foregoing, upon any cessation of
employment by the Group of the Optionee for any reason or reasons, any Option or
portion of an Option that shall not have become vested in accordance with
provisions of Section 3.1(a) shall be immediately cancelled.
(c) Subject to Paragraph 10 of the Plan, in the event of a Change
of Control, the Options that have not yet become Vested Options at the time of
such Change of Control will not become immediately vested but will continue to
vest as provided in Section 3.1(a).
Section 3.2 - Exercisability
Options are not exercisable by the Optionee into Common Stock in
any circumstances except that Vested Options may be exercised into Common Stock
by the Optionee only following the event of (i) a Change of Control
<PAGE>
<PAGE>
36 EXHIBIT 10(f)
FORM 10-Q for the Quarter
Ended September 30, 1996
or (ii) a QPO, provided that, prior to a Change of Control, the maximum number
of Shares for which Options may be so exercised by the Optionee shall be limited
to a number of Shares equal to the product of (x) 2 times (y) the Offering
Percentage times (z) the total number of Shares underlying all Options granted
to Optionee under the Plan or any other plans of the Corporation or any
Subsidiary; provided further that, in the case of either clause (i) or clause
(ii), no Options may be exercised unless on the date on which the Optionee
proposes to exercise any Options the Company has ratings on both its long term
debt and short term debt by both Moody's Investors Services, Inc. and Standard &
Poor's Ratings Group (or, if either or both of such organizations no longer rate
such securities, such other nationally recognized statistical rating
organization or organizations that have been selected by the Board of Directors
in good faith) in one of its generic rating categories that signifies investment
grade and no such organization has announced, either publicly or to the Company,
that it contemplates downgrading either or both of such ratings to one of its
generic rating categories that signifies less than investment grade, except to
the extent that the Board of Directors, having considered all of the
alternatives available to the Company (other than any capital contributions by,
or sales of equity securities to, any person, including, without limitation, the
then existing stockholders, or any of them), determines that it is not in the
best interests of the Company to continue to maintain any of such investment
grade ratings; provided further that if, on the tenth anniversary of the
Effective Time, any Vested Options held by the Optionee have not then previously
been exercisable for a period of at least 60 days, the restriction on
exercisability set forth in the immediately preceding proviso shall be of no
further effect with respect to such Vested Options.
Section 3.3 - Expiration of Options
The Options may not be exercised into Common Stock to any extent
by the Optionee after, and shall terminate upon, the first to occur of the
following events:
(i) the eleventh anniversary of the Grant Date (or, if any Options are not
then exercisable in accordance with Section 3.2, then, with respect to such
Options only, such later date that is 60 days following the date on which such
Options shall become so exercisable);
(ii) the date of cessation of employment by the Group for any reason other
than Normal Retirement, death or Disability, termination without Cause or
resignation for Good Reason of the Optionee; or
(iii) 60 days after termination by the Group without Cause or resignation
for Good Reason of the Optionee (or if any Options are not then exercisable in
accordance with Section 3.2, then, with respect to such Options only, 60 days
after the first date that both (A) such Options are exercisable and (B) there
are no applicable restrictions on the transferability of the Shares into which
such Options are exercisable pursuant to any agreement between the Optionee and
the Company).
<PAGE>
<PAGE>
37 EXHIBIT 10(f)
FORM 10-Q for the Quarter
Ended September 30, 1996
ARTICLE IV
EXERCISE OF OPTION
Section 4.1 - Person Eligible to Exercise
During the lifetime of the Optionee, only the Optionee, his duly
appointed attorney-in-fact or, to the extent permitted under Section 5.2, a
trust or custodianship to which a transfer has been made in accordance with
Section 5.2 may exercise an Option or any portion thereof. After the death of
the Optionee, any exercisable portion of an Option may, prior to the time when
an Option becomes unexercisable under Section 3.3, be exercised by his personal
representative, by any Person empowered to do so under the Optionee's will or
under the then applicable laws of descent and distribution or, to the extent
permitted under Section 5.2, by a trust or custodianship to whom a transfer has
been made in accordance with Section 5.2.
Section 4.2 - Partial Exercise
Any exercisable portion of an Option or the entire Option, if then
wholly exercisable, may be exercised in whole or in part at any time prior to
the time when the Option or portion thereof becomes unexercisable under Section
3.3; provided, however, that any partial exercise shall be for whole shares of
Common Stock only.
Section 4.3 - Manner of Exercise
An Option, or any exercisable portion thereof, may be exercised solely
by delivering to the Secretary or his office all of the following prior to the
time when the Option or such portion becomes unexercisable under Section 3.3:
(a) Notice in writing signed by the Optionee or the other Person then
entitled to exercise the Option or portion thereof, stating that the Option or
portion thereof is thereby exercised, such notice complying with all applicable
rules established by the Committee;
(b) Full payment (in cash, by check or by a combination thereof) for the
shares with respect to which such Option or portion thereof is exercised;
(c) A bona fide written representation and agreement, in a form
satisfactory to the Committee, signed by the Optionee or other Person then
entitled to exercise such Option or portion thereof, stating that (i) the shares
of stock are being acquired for the Optionee's or such other Person's own
account, for investment and without any present intention of distributing or
reselling said shares or any of them except as may be permitted under the Act
and then applicable rules and regulations thereunder, (ii) except as provided
below, the Optionee or other Person then entitled to exercise such Option or
portion thereof will not transfer, sell, assign, pledge, hypothecate or
otherwise dispose of any of the shares (each, a "Transfer") at any time prior to
the tenth anniversary of the date of the Effective Time and (iii) the Optionee
or other Person then entitled
<PAGE>
<PAGE>
38 EXHIBIT 10(f)
FORM 10-Q for the Quarter
Ended September 30, 1996
to exercise such Option or portion thereof will indemnify the Company against
and hold it free and harmless from any loss, damage, expense or liability
resulting to the Company if any sale or distribution of the shares by such
Person is contrary to the representation and agreement referred to above;
provided, however, that the Committee may, in its absolute discretion, take
whatever additional actions it deems appropriate to ensure the observance and
performance of such representation and agreement and to effect compliance with
the Act and any other federal or state securities laws or regulations;
(d) Full payment to the Company of all amounts which, under federal, state
or local law, it is required to withhold upon exercise of the Option; and
(e) In the event the Option or portion thereof shall be exercised pursuant
to Section 4.1 by any Person or Persons other than the Optionee, appropriate
proof of the right of such Person or Persons to exercise the Option.
Without limiting the generality of the foregoing, the Committee may require an
opinion of counsel acceptable to it to the effect that any subsequent transfer
of shares acquired on exercise of an Option does not violate the Act, and may
issue stopAtransfer orders covering such shares. Share certificates evidencing
stock issued on exercise of this Option shall bear an appropriate legend
referring to the provisions of subsection (c) above and the agreements herein.
The written representation and agreement referred to in clause (i) of subsection
(c) above shall, however, not be required if the shares to be issued pursuant to
such exercise have been registered under the Act, and such registration is then
effective in respect of such shares.
The written agreement referred to in clause (ii) of subsection (c)
above will permit only the following Transfers prior to the tenth anniversary of
the Effective Time:
(w) A transfer upon the death of the Optionee or other Person then entitled
to exercise such Option or portion thereof to his or her executors,
administrators, testamentary trustees, legatees or beneficiaries; provided that
it is expressly understood that any such transferee shall be bound by the
provisions of the written agreement referred to in clause (ii) of subsection (c)
above;
(x) A transfer made after the date of exercise of the Option or portion
thereof in compliance with the federal securities laws to a trust or
custodianship the beneficiaries of which may include only the Optionee or other
Person then entitled to exercise such Option or portion thereof, his or her
spouse or the Optionee's or such other Person's lineal descendants; provided, in
each such case, that such transfer is made expressly subject to the Agreement
and that the transferee agrees in writing to be bound by the provisions of the
written agreement referred to in clause (ii) of subsection (c) above;
(y) A sale of shares pursuant to an effective registration statement under
the Act filed by the Company or pursuant to a sale participation
<PAGE>
<PAGE>
39 EXHIBIT 10(f)
FORM 10-Q for the Quarter
Ended September 30, 1996
agreement that has been entered into by the Optionee and Nomura or an Affiliate
or Affiliates of Nomura; and
(z) in connection with a sale in the public market (subject to the
provisions of Rule 144 under the Act where applicable) from and after a QPO;
provided that such sale shall be subject to such blackAout period and/or other
restrictions on such sale as shall be reasonably requested by any underwriters
in offerings of the securities of the Company in order to insure the success of
such offerings; and provided further that the number of shares that may be sold
in each one-year period following the QPO will be limited to the greater of (i)
25% of the total number of shares of Common Stock, on a fully diluted basis,
held by the Optionee or such other Person immediately following the QPO and (ii)
that number of shares of Common Stock underlying the Options or any other stock
options issued by the Company held by the Optionee or such other Person as to
which (A) pursuant to the terms of such options, the Optionee's right to
purchase such stock would expire during such one-year period and (B) such
options are actually exercised by the Optionee or other Person then entitled to
exercise such options or portions thereof. Notwithstanding the foregoing
permitted Transfers, the Optionee or other Person then entitled to exercise such
Option or portion thereof will further represent and agree in the written
agreement referred to in subsection (c) above that he or she will not at any
time transfer, sell, assign, pledge, hypothecate or otherwise dispose of any
shares at any time, directly or indirectly, to any competitor or prospective
competitor of the Company or to any affiliate of a such a person, other than:
(A) in connection with a sale to a third party pursuant to a stock purchase
agreement or sale participation agreement that has been entered into by the
Optionee and Nomura or an Affiliate or Affiliates of Nomura;
(B) in a widely distributed, underwritten public offering upon the exercise
of the rights provided for under a registration rights agreement covering such
shares; or
(C) pursuant to a sale effected (when otherwise permitted as provided
above) through an open market, nondirected broker's transaction in which the
Optionee or other Person then entitled to exercise such Option as seller does
not know the buyer is a competitor or prospective competitor.
Section 4.4 - Conditions to Issuance of Stock Certificates
The shares of stock deliverable upon the exercise of an Option, or any
portion thereof, may be either previously authorized but unissued shares or
issued shares which have then been reacquired by the Company. Such shares shall
be fully paid and nonassessable. The Company shall not be required to issue or
deliver any certificate or certificates for shares of stock purchased upon the
exercise of an Option or portion thereof prior to fulfillment of all of the
following conditions:
(a) The obtaining of approval or other clearance from any state or federal
governmental agency which the Committee shall, in its absolute discretion,
determine to be necessary or advisable; and
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<PAGE>
40 EXHIBIT 10(f)
FORM 10-Q for the Quarter
Ended September 30, 1996
(b) The lapse of such reasonable period of time (not to exceed 60 days)
following the exercise of the Option as the Committee may from time to time
establish for reasons of administrative convenience.
Section 4.5 - Rights as Stockholder
The holder of an Option shall not be, nor have any of the rights or
privileges of, a stockholder of the Company in respect of any shares purchasable
upon the exercise of the Option or any portion thereof unless and until
certificates representing such shares shall have been issued by the Company to
such holder.
ARTICLE V
MISCELLANEOUS
Section 5.1 - Administration
The Committee shall have the power to interpret the Plan and this
Agreement and to adopt such rules for the administration, interpretation and
application of the Plan as are consistent therewith and to interpret or revoke
any such rules. All actions taken and all interpretations and determinations
made by the Committee shall be final and binding upon the Optionee, the Company
and all other interested Persons. No member of the Committee shall be personally
liable for any action, determination or interpretation made in good faith with
respect to the Plan or the Options. In its absolute discretion, the Board of
Directors may at any time and from time to time exercise any and all rights and
duties of the Committee under the Plan and this Agreement.
Section 5.2 - Options Not Transferable
Except as may be provided in any other agreement between the Optionee
and the Company, neither the Options nor any interest or right therein or part
thereof shall be liable for the debts, contracts or engagements of the Optionee
or his successors in interest or shall be subject to disposition by transfer,
alienation, anticipation, pledge, encumbrance, assignment or any other means
whether such disposition be voluntary or involuntary or by operation of law by
judgment, levy, attachment, garnishment or any other legal or equitable
proceedings (including bankruptcy), and any attempted disposition thereof shall
be null and void and of no effect; provided, however, that this Section 5.2
shall not prevent transfers by will or by the applicable laws of descent and
distribution. Notwithstanding the foregoing, if (i) the Company shall have
received a no action letter from the Commission to the effect that the
Commission will not raise any objection, based on the fact that such transfers
by the Optionee would be permitted, if the Company does not comply with the
registration requirements of Section 12(g) of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), with respect to the class of equity
securities that include the Options at such time that the Company has more than
500 holders of equity securities of the class that includes the Options and
otherwise meets the requirement for such registration even were such transfers
by the Optionee were to be
<PAGE>
<PAGE>
41 EXHIBIT 10(f)
FORM 10-Q for the Quarter
Ended September 30, 1996
permitted hereunder at least until such time as the Company otherwise becomes a
reporting company under the Exchange Act with respect to any class of its equity
securities and (ii) the Plan shall have been amended to permit such transfers
and to permit such a transferee to exercise the Options, then Options may be
transferred during the Optionee's lifetime for estate planning purposes to a
trust or custodianship for the exclusive benefit of the Optionee, his spouse or
the Optionee's lineal descendants; provided that (1) such transfers obligate the
trust or custodianship to be subject to the terms and conditions of this
Agreement and (2) such trust or custodianship may transfer any Options so
transferred only to the Optionee's permitted beneficiaries, only after the
Optionee's death and then only in accordance with the trust's or custodianship's
governing instrument. The Company agrees to use its best reasonable efforts (A)
to apply for and have issued by the Commission such no action letter and (B) if
such no action letter is so issued, to amend the Plan to permit such transfers
by the Optionee and to permit such a transferee to exercise such Options.
Section 5.3 - Shares to Be Reserved
The Company shall at all times during the term of the Options reserve
and keep available, either in its treasury or out of its authorized but unissued
shares of stock, such number of shares of stock as will be sufficient to satisfy
the requirements of this Agreement.
Section 5.4 - Notices
Any notice to be given under the terms of this Agreement to the
Company shall be addressed to the Company in care of its Secretary, and any
notice to be given to the Optionee shall be addressed to him at the address
given beneath his signature hereto. By a notice given pursuant to this Section
5.4, either party may hereafter designate a different address for notices to be
given to him. Any notice which is required to be given to the Optionee shall, if
the Optionee is then deceased, be given to the Optionee's personal
representative if such representative has previously informed the Company of his
or her status and address by written notice under this Section 5.4. Any notice
shall have been deemed duly given when enclosed in a properly sealed envelope or
wrapper addressed as aforesaid, deposited (with postage prepaid) in a post
office or branch post office regularly maintained by the United States Postal
Service; provided that reasonable steps are taken to assure actual receipt by
the person to be notified.
Section 5.5 - Titles
Titles are provided herein for convenience only and are not to serve
as a basis for interpretation or construction of this Agreement.
Section 5.6 - Applicability of Plan and Other Agreements
The Options and the shares of Common Stock issued to the Optionee upon
exercise of the Options shall be subject to all of the terms and provisions of
the Plan and any other agreements between the Optionee and the Company, to the
extent applicable to the Options and such Shares. In
<PAGE>
<PAGE>
42 EXHIBIT 10(f)
FORM 10-Q for the Quarter
Ended September 30, 1996
the event of any conflict between this Agreement and the Plan, the terms of the
Plan shall control. In the event of any conflict between this Agreement or the
Plan and any other agreements between the Optionee and the Company, the terms of
the other agreements between the Optionee and the Company shall control.
Section 5.7 - Amendment
This Agreement may be amended or supplemented by the Company, when
authorized by a resolution of the Committee or of the Board of Directors, to
cure any ambiguity, defect or inconsistency, to comply with Section 2.4 hereof
or to make any change that does not adversely affect the rights of the Optionee.
Any other amendment or supplement of this Agreement may be made only by a
writing executed by the parties hereto which specifically states that it is
amending this Agreement.
Section 5.8 - Governing Law
The laws of the State of Delaware shall govern the interpretation,
validity and performance of the terms of this Agreement regardless of the law
that might be applied under principles of conflicts of laws.
Section 5.9 - Jurisdiction
Any suit, action or proceeding against the Optionee with respect to
this Agreement, or any judgment entered by any court in respect of any thereof,
may be brought in any court of competent jurisdiction in the State of New
Jersey, as the Company may elect in its sole discretion, and the Optionee hereby
submits to the nonAexclusive jurisdiction of such courts for the purpose of any
such suit, action, proceeding or judgment. The Optionee hereby irrevocably
waives any objections which he may now or hereafter have to the laying of the
venue of any suit, action or proceeding arising out of or relating to this
Agreement brought in any court of competent jurisdiction in the State of New
Jersey, and hereby further irrevocably waives any claim that any such suit,
action or proceeding brought in any such court has been brought in any
inconvenient forum. No suit, action or proceeding against the Company with
respect to this Agreement may be brought in any court, domestic or foreign, or
before any similar domestic or foreign authority other than in a court of
competent jurisdiction in the State of New Jersey, and the Optionee hereby
irrevocably waives any right which he may otherwise have had to bring such
<PAGE>
<PAGE>
43 EXHIBIT 10(f)
FORM 10-Q for the Quarter
Ended September 30, 1996
an action in any other court, domestic or foreign, or before any similar
domestic or foreign authority. The Company hereby submits to the jurisdiction of
such courts for the purpose of any such suit, action or proceeding.
IN WITNESS WHEREOF, this Agreement has been executed and delivered by
the parties hereto.
AT&T CAPITAL CORPORATION
By: _________________________
Name:
Title:
___________________________ Aggregate number of shares
Optionee of Common Stock for which
the Option hereunder is
___________________________ granted: 598,900
___________________________ Cycle I: 498,900
Address Cycle II: 100,000
Optionee's Taxpayer
Identification Number:
___________________________
<PAGE>
<PAGE>
44 EXHIBIT 10(f)
FORM 10-Q for the Quarter
Ended September 30, 1996
EXHIBIT B
STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT (hereinafter called this "Agreement"), dated
as of September 30, 1996, among Nomura International plc, a public limited
company incorporated under the laws of England and Wales ("NIplc"), Antigua
Acquisition Corporation, a Delaware corporation ("Merger Sub"), and Thomas C.
Wajnert (the "Seller").
RECITALS
WHEREAS, Merger Sub has entered into an Agreement and Plan of Merger,
dated as of June 5, 1996, as amended (the "Merger Agreement"), among AT&T
Capital Corporation, a Delaware corporation (the "Company"), AT&T Corp., a New
York corporation, Hercules Limited, a Cayman Islands company ("Holdings") and
Merger Sub, which is a wholly-owned subsidiary of Holdings, providing for the
merger (the "Merger") of Merger Sub with and into the Company, after which the
Company will continue its corporate existence as the surviving corporation (the
"Surviving Corporation");
WHEREAS, in connection with the Merger, Merger Sub and the Seller are
contemporaneously herewith entering into a Subscription Agreement of even date
herewith (the "Subscription Agreement"), pursuant to which the Seller, as one of
a limited number of management investors, will purchase immediately prior to the
Merger, shares of Common Stock, par value $.01 per share, of Merger Sub (the
"Merger Sub Common Stock"), each of which will be converted at the effective
time of the Merger (the "Effective Time") pursuant to the Merger Agreement into
one share of Common Stock, par value $.01 per share, of the Surviving
Corporation ("Surviving Corporation Common Stock");
WHEREAS, in connection with the Seller's prospective ownership of
shares of Surviving Corporation Common Stock, NIplc, Merger Sub and the Seller
propose to agree to certain provisions with respect to the future purchase and
sale, upon certain terms and subject to certain conditions, of such shares; and
WHEREAS, this Agreement is one of several agreements (such agreements
other than this Agreement being herein referred to collectively as "Other
Sellers' Agreements") which have been, or which in the future will be, entered
into between the Surviving Corporation and other individuals who are or will be
certain officers or key employees of the Surviving Corporation or one of its
Subsidiaries (collectively, the "Other Sellers").
NOW, THEREFORE, to implement the foregoing and in consideration of the
premises and of the mutual agreements contained herein, the parties hereto agree
as follows:
1. Certain Definitions.
<PAGE>
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45 EXHIBIT 10(f)
FORM 10-Q for the Quarter
Ended September 30, 1996
Whenever the following terms are used in this Agreement, they shall have
the meaning specified below unless the context clearly indicates to the
contrary.
"Affiliate" shall mean, with respect to any specified Person, any
other Person that directly, or indirectly through one or more intermediaries,
controls, is controlled by, or is under common control with, such specified
Person. Solely for purposes of this Agreement, GRS Holding Company Limited and
Babcock & Brown, Inc. and their respective Affiliates shall be deemed to be
Affiliates of NIplc.
"Board of Directors" shall mean the Board of Directors of the
Surviving Corporation.
"Cause" shall have the meaning set forth in the Employment Agreement.
"Change of Control" shall mean (i) any transaction (including, without
limitation, a merger, consolidation or reorganization, or a sale of derivative
securities that effectively transfers a beneficial ownership interest) as a
result of which either (a) (1) the combined beneficial ownership interest of the
Surviving Corporation by NIplc and its Affiliates falls below 40% on a fully
diluted basis and (2) the combined beneficial ownership interest of the
Surviving Corporation by another Person and its Affiliates exceeds the combined
beneficial ownership interest of NIplc and its Affiliates or (b) the combined
beneficial ownership interest of the Surviving Corporation by NIplc and its
Affiliates falls below 20% on a fully diluted basis or (ii) a sale, or series of
sales, of all or substantially all of the assets of the Surviving Corporation as
a result of which either (A) (I) the combined beneficial ownership interest by
NIplc and its Affiliates of the assets of the business conducted by the
Surviving Corporation falls below 40% of the assets of the business conducted by
the Surviving Corporation immediately prior to such sale or series of sales
(measured on the basis of the net book value, on a consolidated basis, thereof)
and (II) the combined beneficial ownership interest of another Person of former
assets of the business as conducted by the Surviving Corporation immediately
prior to such sale or series of sales exceeds the combined beneficial ownership
interest by NIplc and its Affiliates of the assets of the business conducted by
the Surviving Corporation immediately prior to such sale or series of related
sales (measured on the basis of the net book value, on a consolidated basis,
thereof) or (B) the combined beneficial ownership interest by NIplc and its
Affiliates of the assets of the business conducted by the Surviving Corporation
falls below 20% of the assets of the business conducted by the Surviving
Corporation immediately prior to such sale or series of sales (measured on the
basis of the net book value, on a consolidated basis, thereof); provided that
the provisions set forth in clause (ii) shall be deemed not to apply in the case
of any transfer, sale, assignment, pledge, hypothecation or other disposition of
assets in connection with, or incident to, any borrowings, securitizations or
other financing transactions or in the case of the recapitalization,
reclassification, liquidation or dissolution of the Surviving Corporation.
"Compensation Committee" shall mean the Compensation Committee of the
Board of Directors.
<PAGE>
<PAGE>
46 EXHIBIT 10(f)
FORM 10-Q for the Quarter
Ended September 30, 1996
"Disability" shall have the meaning set forth for the term "totally
and permanently disabled" in the Employment Agreement.
"Employment Agreement" shall mean the Employment Agreement, dated as
of September 30, 1996, between Merger Sub and the Seller, as amended or
supplemented from time to time.
"Fair Market Value" shall mean, with respect to a share of Surviving
Corporation Common Stock, the amount established at the immediately preceding
determination, which determination will have been made no less than annually, by
an independent U.S.-based investment banker (or, in the sole discretion of the
Board of Directors, an independent U.S.-based appraisal firm) selected by the
Board of Directors as the fair market value of a share of Surviving Corporation
Common Stock without giving effect to any discount attributable to the
illiquidity of such shares or the fact that any such shares may constitute a
minority interest in the Surviving Corporation or any premium attributable to
any special rights of any holder with respect to shares of Surviving Corporation
Common Stock; provided that prior to the first such determination (which shall
occur not later than January 31, 1997), the Fair Market Value of a share of
Surviving Corporation Common Stock shall be the purchase price per share paid by
the Seller for his Investment Shares.
"Good Reason" shall have the meaning set forth in the Employment
Agreement.
"Group" shall mean, with respect to a particular time, any of the
Surviving Corporation and its Subsidiaries as of such time. Any event that
results in an entity ceasing to be a Subsidiary of the Surviving Corporation
shall be deemed to constitute the cessation of employment with the Group of all
employees of such former Subsidiary, except for such employees of such former
Subsidiary who become employees of the Surviving Corporation or one of its then
Subsidiaries within 10 days of such event.
"Investment Price" shall mean the price per share paid by the Seller
for each of the Investment Shares pursuant to the Subscription Agreement.
"Investment Shares" shall have the meaning set forth in the
Subscription Agreement.
"Normal Retirement" shall mean the voluntary retirement of the Seller
on a date on or after December 31, 1999.
"Per Share Interest Amount" shall mean, with respect to a relevant
number of Rollover Shares being purchased pursuant to the provisions of this
Agreement, an amount per share equal to the cumulative amount of interest at the
Compensatory Interest Rate on the Investment Price of such Rollover Shares from
the Effective Time through, but not including, the date of the Repurchase (as
hereinafter defined), compounded annually. The "Compensatory Interest Rate"
equals the product of (i) the rate of interest set forth in the Promissory Note
multiplied by (ii) a fraction the numerator of which is the principal amount of
the Promissory Note on the date of Repurchase and the denominator of which is
the product
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47 EXHIBIT 10(f)
FORM 10-Q for the Quarter
Ended September 30, 1996
of the total number of Rollover Shares multiplied by the Investment Price of
such Rollover Shares.
"Promissory Note" shall mean the Purchaser's promissory note issued
pursuant to the AT&T Capital Corporation 1993 Leveraged Stock Purchase Plan or
the AT&T Capital Corporation 1993 Long Term Incentive Plan, as the case may be,
as such note has been amended in accordance with the terms of the Subscription
Agreement.
"QPO" shall mean a sale of shares of Surviving Corporation Common
Stock to the public pursuant to a registration statement under the Securities
Act of 1933, as amended (the "Securities Act"), that has been declared effective
by the Securities and Exchange Commission (other than a registration statement
on Form S-4 or Form S-8, or any successor or other forms promulgated for similar
purposes, or a registration statement in connection with an offering to
employees of the Surviving Corporation and its Subsidiaries) that results in an
active trading market in the Surviving Corporation Common Stock.
"RIF Termination" shall mean (i) termination of the Seller's
employment by the Group as a result of a reduction in force, facility relocation
or closing, or other Surviving Corporation program for job elimination, in each
case that results in the termination of a significantly large number of
employees, or (ii) termination within 135 days prior to a Change of Control if
the Seller can demonstrate that such termination (a) was at the request of a
third party with which the Surviving Corporation had entered into negotiations
or was provided for in an agreement with regard to such Change of Control or (b)
otherwise occurred in connection with, or in anticipation of, such Change of
Control; provided further that, in the case of either clause (a) or (b), such
Change of Control actually occurs.
"Rollover Shares" shall mean those Investment Shares resulting from
the conversion at the Effective Time in the Merger pursuant to the Merger
Agreement of the Purchaser's Pre-Merger Shares (as defined in the Subscription
Agreement).
"Seller's Estate" and "Seller's Trust" shall have the respective
meanings set forth in the Subscription Agreement for the terms "Purchaser's
Estate" and "Purchaser's Trust," respectively.
"Subsidiary" shall mean any corporation other than the Surviving
Corporation in an unbroken chain of corporations beginning with the Surviving
Corporation if each of the corporations other than the last corporation in the
unbroken chain owns 50% or more of the voting stock in one of the other
corporations in such chain.
2. Seller's Option to Sell Stock to NIplc Upon
Certain Events.
(a) Except as otherwise provided herein, if, prior to the occurrence
of a QPO:
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48 EXHIBIT 10(f)
FORM 10-Q for the Quarter
Ended September 30, 1996
(i) The Seller is terminated by the Group without Cause (other than a
RIF Termination) or resigns for Good Reason, then the Seller, the Seller's
Estate or the Seller's Trust, as the case may be, shall have the right, for 15
days following the date of such termination or resignation, to give notice to
the Surviving Corporation of his or its election to sell to the Purchasing
Entity (as defined in Section 2(b) hereof), and the Purchasing Entity shall be
required to purchase, on one occasion, except as otherwise provided herein,
within 60 days of the receipt of such notice, all or any portion (as determined
by the Seller, the Seller's Estate or the Seller's Trust, as the case may be,
and set forth in such notice) of the Investment Shares then held by the Seller,
the Seller's Estate or the Seller's Trust, as the case may be, at the Repurchase
Price determined in accordance with Sections 4(a) and 5 hereof;
(ii) The Seller is terminated by the Group for Cause or resigns
without Good Reason, then the Seller, the Seller's Estate or the Seller's Trust,
as the case may be, shall have the right, for 15 days following the date of such
termination or resignation, to give notice to the Surviving Corporation of his
or its election to sell to the Purchasing Entity, and the Purchasing Entity
shall be required to purchase, on one occasion, except as otherwise provided
herein, within 60 days of the receipt of such notice, all or any portion (as
determined by the Seller, the Seller's Estate or the Seller's Trust, as the case
may be, and set forth in such notice) of the Investment Shares then held by the
Seller, the Seller's Estate or the Seller's Trust, as the case may be, at the
Repurchase Price determined in accordance with Sections 4(b) and 5 hereof;
(iii) The Seller is terminated by the Group in a RIF Termination, then
the Seller, the Seller's Estate or the Seller's Trust, as the case may be, shall
have the right, for 15 days following the date of such termination, to give
notice to the Surviving Corporation of his or its election to sell to the
Purchasing Entity, and the Purchasing Entity shall be required to purchase, on
one occasion, except as otherwise provided herein, within 60 days of the receipt
of such notice, all or any portion (as determined by the Seller, the Seller's
Estate or the Seller's Trust, as the case may be, and set forth in such notice)
of the Investment Shares then held by the Seller, the Seller's Estate or the
Seller's Trust, as the case may be, at the Repurchase Price determined in
accordance with Sections 4(c) and 5 hereof;
(iv) The Seller ceases employment with the Group due to death or
Disability, then the Seller, the Seller's Estate or the Seller's Trust, as the
case may be, shall have the right, for 60 days following the date of such
cessation of employment, to give notice to the Surviving Corporation of his or
its election to sell to the Purchasing Entity, and the Purchasing Entity shall
be required to purchase, on one occasion, except as otherwise provided herein,
within 60 days of the receipt of such notice, all or any portion (as determined
by the Seller, the Seller's Estate or the Seller's Trust, as the case may be,
and set forth in such notice) of the Investment Shares then held by the Seller,
the Seller's Estate or the Seller's Trust, as the case may be, at the Repurchase
Price determined in accordance with Sections 4(d) and 5 hereof; and
<PAGE>
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49 EXHIBIT 10(f)
FORM 10-Q for the Quarter
Ended September 30, 1996
(v) The Seller ceases employment with the Group upon Normal
Retirement, then the Seller, the Seller's Estate or the Seller's Trust, as the
case may be, shall have the right, following the date of such cessation of
employment, to give notice to the Surviving Corporation of his or its election
to sell to the Purchasing Entity, and the Purchasing Entity shall be required to
purchase, on one occasion in each one-year period following such cessation of
employment, subject to the limits set forth below, all or any portion (as
determined by the Seller, the Seller's Estate or the Seller's Trust, as the case
may be, and set forth in such notice) of the Investment Shares then held by the
Seller, the Seller's Estate or the Seller's Trust, as the case may be, at the
Repurchase Price determined in accordance with Sections 4(e) and 5 hereof.
Notwithstanding anything to the contrary contained herein, the number of shares
that the Purchasing Entity shall be required to purchase from the Seller, the
Seller's Estate or the Seller's Trust, as the case may be, in the event of
Normal Retirement shall be limited to the indicated percentage of the aggregate
of the Investment Shares held by the Seller, the Seller's Estate and the
Seller's Trust on the date of such cessation of employment (less in each case
after the first anniversary of such date the percentage of the shares so held on
such date that were previously purchased by a Purchasing Entity) in each of the
periods indicated in the following table:
<TABLE>
<CAPTION>
Period Percentage
- ------------------------------------------ ----------
<S> <C>
From the date of cessation of employment
through the first anniversary of such date 100%
From the day after the first anniversary of
the cessation of employment through the second
anniversary of such date 80%
From the day after the second anniversary of
the cessation of employment through the third
anniversary of such date 60%
From the day after the third anniversary of
the cessation of employment through the fourth
anniversary of such date 40%
From the day after the fourth anniversary of
the cessation of employment through the fifth
anniversary of such date 20%
Following the fifth anniversary of the cessation
of employment 0%
</TABLE>
(b) If the Seller, the Seller's Estate and/or the Seller's Trust, as
the case may be, desire to sell any Investment Shares pursuant hereto, it or
they shall send notice (the "Redemption Notice") to the Surviving Corporation of
its or their intention to sell Investment Shares in exchange for the payment
(the "Repurchase Price") referred to in Section 2(a)(i) through (iv), as
applicable (which Redemption Notice shall be delivered by the Surviving
Corporation promptly to NIplc). Except as
<PAGE>
<PAGE>
50 EXHIBIT 10(f)
FORM 10-Q for the Quarter
Ended September 30, 1996
otherwise provided herein, the closing of the purchase and sale of Investment
Shares pursuant to this Section 2 shall take place at the principal office of
the Surviving Corporation on or before the 60th day following delivery of the
Redemption Notice. On or prior to such closing, NIplc shall notify the Seller,
the Seller's Estate and/or the Seller's Trust, as the case may be, of the date
and time of such closing and whether, in the absolute discretion of NIplc, NIplc
or another person selected by NIplc pursuant to Section 15 hereof shall be the
purchaser of such Investment Shares (the "Purchasing Entity"). The applicable
Repurchase Price shall be paid by delivery to the Seller, the Seller's Estate or
the Seller's Trust, as the case may be, of a certified or bank cashier's check
or checks, or by wire transfer of funds, in the appropriate amount payable to
the order of the Seller, the Seller's Estate or the Seller's Trust, as the case
may be, against delivery of certificates or other instruments representing the
Investment Shares so purchased, duly endorsed in blank or accompanied by stock
powers executed in blank with the signature of the Seller or his duly authorized
representative, or the appropriately authorized representative of the Seller's
Estate or the Seller's Trust, as the case may be, guaranteed by a member of the
Medallion Signature Guarantee Program, and with all necessary stock transfer
stamps affixed.
(c) This Agreement does not confer upon, and nothing contained herein
shall be interpreted as providing, the Seller any rights to require NIplc or any
of its Affiliates to purchase, in any circumstances, any stock options or any
shares of stock acquired or acquirable upon the exercise of any stock options.
3. NIplc's Option to Purchase Stock Upon Certain
Events.
(a) Except as otherwise provided herein, if, prior to the later of (i)
the occurrence of a QPO and (ii) the tenth anniversary of the Effective Time:
(i) The Seller is terminated by the Group without Cause (other than a
RIF Termination) or resigns for Good Reason, then the Purchasing Entity shall
have the right, for 15 days following the date of such termination or
resignation, to give notice to the Seller, the Seller's Estate or the Seller's
Trust, as the case may be, of its election to purchase from the Seller, the
Seller's Estate or the Seller's Trust, as the case may be, and the Seller, the
Seller's Estate or the Seller's Trust, as the case may be, shall be required to
sell, on one occasion, except as otherwise provided herein, within 60 days of
the receipt of such notice, all or any portion (as determined by the Purchasing
Entity and set forth in such notice) of the Investment Shares then held by the
Seller, the Seller's Estate or the Seller's Trust, as the case may be, at the
Repurchase Price determined in accordance with Sections 4(a) and 5 hereof;
(ii) The Seller is terminated by the Group for Cause or resigns
without Good Reason, then the Purchasing Entity shall have the right, for 15
days following the date of such termination or resignation, to give notice to
the Seller, the Seller's Estate or the Seller's Trust, as the case may be, of
its election to purchase from the Seller, the Seller's Estate or the Seller's
Trust, as the case may be, and the Seller, the
<PAGE>
<PAGE>
51 EXHIBIT 10(f)
FORM 10-Q for the Quarter
Ended September 30, 1996
Seller's Estate or the Seller's Trust, as the case may be, shall be required to
sell, on one occasion, except as otherwise provided herein, within 60 days of
the receipt of such notice, all or any portion (as determined by the Purchasing
Entity and set forth in such notice) of the Investment Shares then held by the
Seller, the Seller's Estate or the Seller's Trust, as the case may be, at the
Repurchase Price determined in accordance with Sections 4(b) and 5 hereof;
(iii) The Seller is terminated by the Group in a RIF Termination, then
the Purchasing Entity shall have the right, for 15 days following the date of
such termination, to give notice to the Seller, the Seller's Estate or the
Seller's Trust, as the case may be, of its election to purchase from the Seller,
the Seller's Estate or the Seller's Trust, as the case may be, and the Seller,
the Seller's Estate or the Seller's Trust, as the case may be, shall be required
to sell, on one occasion, except as otherwise provided herein, within 60 days of
the receipt of such notice, all or any portion (as determined by the Purchasing
Entity and set forth in such notice) of the Investment Shares then held by the
Seller, the Seller's Estate or the Seller's Trust, as the case may be, at the
Repurchase Price determined in accordance with Sections 4(c) and 5 hereof; and
(iv) The Seller ceases employment with the Group due to death or
Disability, then the Purchasing Entity shall have the right, for 60 days
following the date of such cessation of employment, to give notice to the
Seller, the Seller's Estate or the Seller's Trust, as the case may be, of its
election to purchase from the Seller, the Seller's Estate or the Seller's Trust,
as the case may be, and the Seller, the Seller's Estate or the Seller's Trust,
as the case may be, shall be required to sell, on one occasion, except as
otherwise provided herein, within 60 days of the receipt of such notice, all or
any portion (as determined by the Purchasing Entity and set forth in such
notice) of the Investment Shares then held by the Seller, the Seller's Estate or
the Seller's Trust, as the case may be, at the Repurchase Price determined in
accordance with Sections 4(d) and 5 hereof.
(b) The Purchasing Entity shall send the Redemption Notice to the
Seller, the Seller's Estate and/or the Seller's Trust, as the case may be,
setting forth the intention to purchase Investment Shares in exchange for the
Repurchase Price referred to in Section 2(a)(i) through (iv), as applicable.
Except as otherwise provided herein, the closing of the purchase and sale of
Investment Shares pursuant to this Section 3 shall take place at the principal
office of the Surviving Corporation on or before the 60th day following delivery
of the Redemption Notice. On or prior to such closing, the Purchasing Entity
shall notify the Seller, the Seller's Estate and/or the Seller's Trust, as the
case may be, of the date and time of such closing and whether, in the absolute
discretion of NIplc, NIplc or another person selected pursuant to Section 15
hereof shall be the Purchasing Entity. The applicable Repurchase Price shall be
paid by delivery to the Seller, the Seller's Estate or the Seller's Trust, as
the case may be, of a certified or bank cashier's check or checks, or by wire
transfer of funds, in the appropriate amount payable to the order of the Seller,
the Seller's Estate or the Seller's Trust, as the case may be, against delivery
of certificates or other instruments representing the Investment Shares so
purchased, duly endorsed in blank or accompanied by
<PAGE>
<PAGE>
52 EXHIBIT 10(f)
FORM 10-Q for the Quarter
Ended September 30, 1996
stock powers executed in blank with the signature of the Seller or his duly
authorized representative, or the appropriately authorized representative of the
Seller's Estate or the Seller's Trust, as the case may be, guaranteed by a
member of the Medallion Signature Guarantee Program, and with all necessary
stock transfer stamps affixed.
4. Determination of Repurchase Price.
(a) If the Seller is terminated by the Group without Cause (other than
a RIF Termination) or resigns for Good Reason, the Repurchase Price applicable
to repurchases (each a "Repurchase") pursuant to either Section 2 or Section 3
shall be (i) if such termination or resignation occurs after the fifth
anniversary of the Effective Time, the Fair Market Value as of the date of such
termination or resignation or (ii) if such termination or resignation occurs on
or before the fifth anniversary of the Effective Time, the higher of (x) the
Investment Price plus, with respect to Rollover Shares only, the Per Share
Interest Amount or (y) the price per share set forth in the table below under
the heading "Alternate Price" for the periods indicated:
<TABLE>
<CAPTION>
Alternate
Period Price
- -------------------------------- -----------------------------------
<S> <C>
From the Effective Time through
the first anniversary thereof [No alternative price]
From the day after the first Investment Price plus 20% of
anniversary of the Effective the excess, if any, of Fair
Time through the second Market Value over Investment
anniversary thereof Price
From the day after the second Investment Price plus 40% of
anniversary of the Effective the excess, if any, of Fair
Time through the third anniversary Market Value over Investment
thereof Price
From the day after the third Investment Price plus 60% of
anniversary of the Effective Time the excess, if any, of Fair
through the fourth anniversary Market Value over Investment
thereof Price
From the day after the fourth Investment Price plus 80% of
anniversary of the Effective Time the excess, if any, of Fair
through the fifth anniversary thereof Market Value over Investment
Price
</TABLE>
Notwithstanding the foregoing, if (i) the Seller is terminated by the Group
without Cause (other than a RIF Termination) or resigns for Good Reason on or
before the fifth anniversary of the Effective Time and (ii) as of the date of
such termination or resignation the Seller has met in each year or portion
thereof following the Effective Time the performance criteria relating hereto
which are to be established by good faith agreement between
<PAGE>
<PAGE>
53 EXHIBIT 10(f)
FORM 10-Q for the Quarter
Ended September 30, 1996
the Board of Directors of the Surviving Corporation and the Seller taking into
account the historical performance of the Company reasonably promptly following
the Effective Time (and, if not so established, to be established by arbitration
under the procedures set forth in the Employment Agreement), the Repurchase
Price applicable to Repurchases pursuant to either Section 2 or Section 3 shall
be the higher of (x) the Investment Price plus, with respect to Rollover Shares
only, the Per Share Interest Amount or (y) the price per share set forth in the
table below under the heading "Alternate Price" for the periods indicated:
<TABLE>
<CAPTION>
Alternate
Period Price
- ---------------------------------- -------------------------------
<S> <C>
From the Effective Time through
the first anniversary thereof [No alternative price]
From the day after the first Investment Price plus 33-1/3%
anniversary of the Effective Time of the excess, if any, of Fair
through the second anniversary Market Value over Investment
thereof Price
From the day after the second Investment Price plus 66-2/3%
anniversary of the Effective Time of the excess, if any, of the
through the third anniversary thereof Fair Market Value over
Investment Price
From the day after the third
anniversary of the Effective Time
through the fifth anniversary thereof Fair Market Value
</TABLE>
(b) If the Seller is terminated by the Group for Cause or resigns
without Good Reason, the Repurchase Price applicable to Repurchases pursuant to
either Section 2 or Section 3 shall be equal to the Investment Price plus, with
respect to Rollover Shares only, the Per Share Interest Amount.
(c) If the Seller is terminated by the Group in a RIF Termination, the
Repurchase Price applicable to Repurchases pursuant to either Section 2 or
Section 3 shall be equal to the higher of (x) the Fair Market Value as of the
date of such termination or (y) the Investment Price plus, with respect to
Rollover Shares only, the Per Share Interest Amount.
(d) If the Seller ceases employment with the Group due to death or
Disability, the Repurchase Price applicable to Repurchases pursuant to either
Section 2 or Section 3 shall be equal to the Fair Market Value as of the date of
cessation of employment; provided, however, that if such cessation of employment
occurs on or before December 31, 1997, such Repurchase Price shall not be less
than the Investment Price plus, with respect to Rollover Shares only, the Per
Share Interest Amount.
(e) If the Seller ceases employment upon Normal Retirement, the
Repurchase Price applicable to Repurchases pursuant to Section 2 shall be equal
to the Investment Price plus, with respect to Rollover Shares only, the Per
Share Interest Amount.
<PAGE>
<PAGE>
54 EXHIBIT 10(f)
FORM 10-Q for the Quarter
Ended September 30, 1996
5. Repurchase Price Adjustments.
In determining the Repurchase Price, appropriate adjustments shall be
made for any future issuances to holders of Surviving Corporation Common Stock
of rights to acquire any securities convertible into Surviving Corporation
Common Stock and any stock dividends, splits, combinations, recapitalizations or
any other adjustment in the number of shares of outstanding shares of Surviving
Corporation Common Stock.
6. Rights to Negotiate Repurchase Price.
Nothing in this Agreement shall be deemed to restrict or prohibit
NIplc, the Surviving Corporation or any of their Affiliates from purchasing
shares of Surviving Corporation Common Stock or options to purchase shares of
Surviving Corporation Common Stock from the Seller, at any time, upon such terms
and conditions, and for such price, as may be mutually agreed upon between the
parties, (i) whether or not at the time of such purchase circumstances exist
which specifically grant NIplc the right to purchase, or the Seller the right to
sell, such shares and (ii) notwithstanding the fact that this Agreement does not
provide NIplc, the Surviving Corporation or the Seller with any rights with
respect to the repurchase by any person of stock options.
7. NIplc's Representations and Warranties.
NIplc represents and warrants to the Seller that (i) this Agreement
has been duly authorized, executed and delivered by NIplc and (ii) the
Purchasing Entity will be acquiring any Investment Shares pursuant to this
Agreement for investment for the account of itself and its Affiliates and not
with a view to, or for resale in connection with, the distribution or other
disposition thereof, without prejudice, however, to the Purchasing Entity's
right to sell or otherwise dispose of all or any part of said shares in
compliance with the Securities Act and all applicable state or foreign
securities laws..
8. Merger Sub's Representations, Warranties and Agreements.
(a) Merger Sub represents and warrants to NIplc and the Seller that
this Agreement has been duly authorized, executed and delivered by Merger Sub.
(b) For so long as the provisions of Sections 2, 3 and 4 of this
Agreement remain in effect, Merger Sub agrees that the Surviving Corporation
shall (i) notify NIplc in the manner provided in Section 17 hereof of any
election by the Seller, the Seller's Estate or the Seller's Trust, as the case
may be, pursuant to Section 2(a) hereof to sell to the Purchasing Entity all or
any portion of the Investment Shares held by the Seller, the Seller's Estate or
the Seller's Trust, as the case may be, by delivering promptly to NIplc a copy
of the Redemption Notice sent to the Surviving Corporation by the Seller, the
Seller's Estate or the Seller's Trust, as the case may be, pursuant to Section
2(b) hereof and (ii) notify NIplc in the manner provided by Section 17 hereof
promptly (but in no event more than 5 days thereafter) in writing of any event
involving the Seller that would give rise to a right of the Purchasing Entity
pursuant to
<PAGE>
<PAGE>
55 EXHIBIT 10(f)
FORM 10-Q for the Quarter
Ended September 30, 1996
Section 3(a) hereof to purchase from the Seller, the Seller's Estate or the
Seller's Trust, as the case may be, all or any portion of the Investment Shares
held by the Seller, the Seller's Estate or the Seller's Trust, as the case may
be, provided; however, that any failure by the Surviving Corporation to so
notify NIplc shall not relieve the Purchasing Entity of its obligations
hereunder.
9. Expiration of Certain Provisions.
The provisions contained in Sections 2, 3 and 4 of this Agreement and
the portion of any other provision of this Agreement which incorporates the
provisions of Sections 2, 3 and 4, shall terminate and be of no further force or
effect with respect to any Investment Shares sold by the Seller (i) pursuant to
an effective registration statement filed by the Surviving Corporation pursuant
to the Registration Rights Agreement (as defined in the Subscription Agreement),
the Subscription Agreement or otherwise or (ii) pursuant to the terms of the
Sale Participation Agreement of even date herewith, among the Seller and NIplc.
10. Recapitalizations, Etc.
The provisions of this Agreement shall apply, to the full extent set
forth herein with respect to the Investment Shares, to any and all shares of
capital stock of the Surviving Corporation or any capital stock, partnership
units or any other security evidencing ownership interests in any successor or
assign of the Surviving Corporation (whether by merger, consolidation, sale of
assets or otherwise) which may be issued in respect of, in exchange for, or
substitution of the Investment Shares, by reason of any stock dividend, split,
reverse split, combination, recapitalization, liquidation, reclassification,
merger, consolidation or otherwise.
11. Seller's Employment by the Group.
Nothing contained in this Agreement (i) obligates the Surviving
Corporation or any Subsidiary to employ the Seller in any capacity whatsoever or
(ii) prohibits or restricts the Surviving Corporation (or any such Subsidiary)
from terminating the employment, if any, of the Seller at any time or for any
reason whatsoever, with or without cause, and the Seller hereby acknowledges and
agrees that, except to the extent that certain information, if any, with respect
to his employment has been delivered to the Seller in writing, neither Merger
Sub nor any other person has made any representations or promises whatsoever to
the Seller concerning the Seller's employment or continued employment by the
Group.
12. Binding Effect.
The provisions of this Agreement shall be binding upon and accrue to
the benefit of the parties hereto and their respective heirs, legal
representatives, successors and assigns. In the case of a transferee permitted
under Section 4(a) of the Subscription Agreement, such transferee shall be
deemed the Seller hereunder; provided, however, that no transferee (including
without limitation, transferees referred to in Section 4(a) of the Subscription
Agreement) shall derive any rights under this Agreement
<PAGE>
<PAGE>
56 EXHIBIT 10(f)
FORM 10-Q for the Quarter
Ended September 30, 1996
unless and until such transferee has delivered to NIplc a valid undertaking and
becomes bound by the terms of this Agreement.
13. Amendment.
This Agreement may be amended only by a written instrument signed by
the parties hereto.
14. Applicable Law.
The laws of the State of Delaware shall govern the interpretation,
validity and performance of the terms of this Agreement, regardless of the law
that might be applied under principles of conflicts of law. Any suit, action or
proceeding against the Seller, with respect to this Agreement, or any judgment
entered by any court in respect of any thereof, may be brought in any court of
competent jurisdiction in the State of New Jersey, as NIplc may elect in its
sole discretion, and the Seller hereby submits to the non-exclusive jurisdiction
of such courts for the purpose of any such suit, action, proceeding or judgment.
By the execution and delivery of this Agreement, the Seller appoints the
Secretary of the Surviving Corporation, at the executive offices of the
Surviving Corporation in Morristown, New Jersey (or such other place within the
State of New Jersey as may be designated for such purpose), as his agent upon
which process may be served in any such suit, action or proceeding. Service of
process upon such agent, together with notice of such service given to the
Seller in the manner provided in Section 17 hereof, shall be deemed in every
respect effective service of process upon him in any suit, action or proceeding.
Nothing herein shall in any way be deemed to limit the ability of NIplc to serve
any such writs, process or summonses in any other manner permitted by applicable
law or to obtain jurisdiction over the Seller, in such other jurisdictions and
in such manner, as may be permitted by applicable law. The Seller hereby
irrevocably waives any objections which he may now or hereafter have to the
laying of the venue of any suit, action or proceeding arising out of or relating
to this Agreement brought in any court of competent jurisdiction in the State of
New Jersey, and hereby further irrevocably waives any claim that any such suit,
action or proceeding brought in any such court has been brought in any
inconvenient forum. No suit, action or proceeding against NIplc with respect to
this Agreement may be brought in any court, domestic or foreign, or before any
similar domestic or foreign authority other than in a court of competent
jurisdiction in the State of New Jersey, and the Seller hereby irrevocably
waives any right which he may otherwise have had to bring such an action in any
other court, domestic or foreign, or before any similar domestic or foreign
authority. NIplc hereby submits to the jurisdiction of such courts for the
purpose of any such suit, action or proceeding, and by the execution and
delivery of this Agreement, NIplc appoints the Secretary of the Surviving
Corporation, at the executive offices of the Surviving Corporation in
Morristown, New Jersey (or such other place within the State of New Jersey as
may be designated for such purpose), as its agent upon which process may be
served in any such suit, action or proceeding. Service of process upon such
agent, together with notice of such service given to NIplc in the manner
provided in Section 17 hereof, shall be deemed in every respect effective
service of process upon NIplc in any suit, action or proceeding. NIplc hereby
irrevocably waives any objections which
<PAGE>
<PAGE>
57 EXHIBIT 10(f)
FORM 10-Q for the Quarter
Ended September 30, 1996
it may now or hereafter have to the laying of the venue of any suit, action or
proceeding arising out of or relating to this Agreement brought in any court of
competent jurisdiction in the State of New Jersey, and hereby further
irrevocably waives any claim that any such suit, action or proceeding brought in
any such court has been brought in any inconvenient forum.
15. Assignability of Certain Rights by NIplc.
NIplc shall have the right to assign any or all of its rights or
obligations to purchase Investment Shares pursuant to Sections 2 or 3 hereof,
but any such assignment shall not, without the written consent of the Seller or
the Seller's Estate or Seller's Trust, as the case may be, relieve NIplc of its
obligations hereunder.
16. Miscellaneous.
In this Agreement (i) all references to "dollars" or "$" are to United
States dollars and (ii) the word "or" is not exclusive. If any provision of this
Agreement shall be declared illegal, void or unenforceable by any court of
competent jurisdiction, the other provisions shall not be affected, but shall
remain in full force and effect.
17. Notices.
All notices and other communications provided for herein shall be in
writing and shall be deemed to have been duly given if delivered by hand
(whether by overnight courier or otherwise) or sent by registered or certified
mail, return receipt requested, postage prepaid, to the party to whom it is
directed:
(i) If to NIplc, to it at the following address:
Nomura International plc
Nomura House
1 St. Martin's-le-Grand
London EC1A 4NP
Attention: Mr. Guy Hands
(ii) If to Merger Sub or the Surviving Corporation, to it at the
following address:
Antigua Acquisition Corporation
c/o AT&T Capital Corporation
or
AT&T Capital Corporation
44 Whippany Road
Morristown, New Jersey 07960
Attention: Vice President - Human Resources
<PAGE>
<PAGE>
58 EXHIBIT 10(f)
FORM 10-Q for the Quarter
Ended September 30, 1996
with a copy to:
AT&T Capital Corporation
44 Whippany Road
Morristown, New Jersey 07960
Attention: General Counsel
(iii) If to the Seller, to him at the address set forth below under
his signature; or at such other address as either party shall have specified by
notice in writing to the other; provided that reasonable steps are taken to
assure actual receipt by the person to be notified.
Any notice which is required to be given to the Seller shall, if the Seller
is then deceased, be given to the Seller's personal representative if such
representative has previously informed NIplc and the Surviving Corporation of
his or her status and address by written notice under this Section 17.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
NOMURA INTERNATIONAL plc
By: ___________________________
Name:
Title:
ANTIGUA ACQUISITION CORPORATION
By: ___________________________
Name:
Title:
________________________________
Seller
________________________________
________________________________
Address of Seller
<PAGE>
<PAGE>
59 EXHIBIT 10(f)
FORM 10-Q for the Quarter
Ended September 30, 1996
EXHIBIT C
SALE PARTICIPATION AGREEMENT
SALE PARTICIPATION AGREEMENT (hereinafter called this "Agreement"),
dated as of September 30, 1996, between Nomura International plc, a public
limited company incorporated under the laws of England and Wales ("NIplc"), and
Thomas C. Wajnert (the "Purchaser").
RECITALS
WHEREAS, Antigua Acquisition Corporation, a Delaware corporation
("Merger Sub"), has entered into an Agreement and Plan of Merger, dated as of
June 5, 1996, as amended (the "Merger Agreement"), among AT&T Capital
Corporation, a Delaware corporation (the "Company"), AT&T Corp., a New York
corporation, Hercules Limited, a Cayman Islands company ("Holdings"), and Merger
Sub, which is a wholly-owned subsidiary of Holdings, providing for the merger
(the "Merger") of Merger Sub with and into the Company, after which the Company
will continue its corporate existence as the surviving corporation (the
"Surviving Corporation");
WHEREAS, in connection with the Merger, Merger Sub and the Purchaser
are contemporaneously entering into a Subscription Agreement of even date
herewith (the "Subscription Agreement"), pursuant to which the Purchaser, as one
of a limited number of management investors, will purchase immediately prior to
the Merger, shares of Common Stock, par value $.01 per share, of Merger Sub (the
"Merger Sub Common Stock"), each of which will be converted at the effective
time of the Merger (the "Effective Time") pursuant to the Merger Agreement into
one share of Common Stock, par value $.01 per share, of the Surviving
Corporation ("Surviving Corporation Common Stock");
WHEREAS, following the Merger, NIplc will also beneficially own shares
of Surviving Corporation Common Stock; and
WHEREAS, incident to the Purchaser's ownership of shares of Surviving
Corporation Common Stock, NIplc and the Purchaser propose to agree to certain
provisions with respect to the future sale, upon certain terms and subject to
certain conditions, of such shares.
NOW, THEREFORE, to implement the foregoing and in consideration of the
premises and of the mutual agreements contained herein, the parties hereto agree
as follows:
(iv) Take-Along Rights.
(a) In the event that at any time (i) NIplc or any of its affiliates
(including, without limitation, GRS Holding Company Limited ("GRSH") and
Hercules Limited, which also beneficially own, directly or indirectly, the
shares of Merger Sub Common Stock beneficially owned by NIplc, but, for the
avoidance of any doubt, excluding Babcock & Brown, Inc. or any of its
affiliates), as the case may be (each, a "Selling Entity"), proposes to sell for
cash or any other consideration, either directly or indirectly (by way of the
sale of beneficial ownership interest in any such affiliate or otherwise), any
shares of Surviving Corporation Common Stock
<PAGE>
<PAGE>
60 EXHIBIT 10(f)
FORM 10-Q for the Quarter
Ended September 30, 1996
owned by it, in any transaction other than (x) a public offering of securities,
(y) a sale or other transfer to one of their affiliates or (z) a sale or other
transfer of beneficial ownership in (A) up to 9,000,000 shares of Surviving
Corporation Common Stock to Babcock & Brown, Inc. or any of its affiliates or
(B) up to 12,000,000 shares of Surviving Corporation Common Stock to GRSH (a
"Proposed Sale") and (ii) such Proposed Sale, when considered together with
previous direct or indirect sales of Surviving Corporation Common Stock by the
Selling Entity and any of its affiliates (other than (1) sales or other
transfers to one of their affiliates or (2) sales or other transfers of
beneficial ownership in the shares of Surviving Corporation Common Stock
referred to in clause (z) above), would constitute the sale of the direct or
indirect beneficial ownership of more than 25% of the outstanding shares of
Surviving Corporation Common Stock, then the Selling Entity will notify the
Purchaser or the Purchaser's Estate or Purchaser's Trust (as such terms are
defined in Section 4(a) of the Subscription Agreement), as the case may be, in
writing (a "Notice") of such proposed sale and the material terms of the
Proposed Sale as of the date of the Notice (the "Material Terms") promptly, and
in any event not less than 15 days prior to the consummation of the Proposed
Sale and not more than 5 days after the execution of the definitive agreement
relating to the Proposed Sale, if any (the "Sale Agreement").
(b) If (i) within 10 days of the Purchaser's or the Purchaser's
Estate's or Purchaser's Trust's, as the case may be, receipt of such Notice the
Selling Entity receives from the Purchaser or the Purchaser's Estate or
Purchaser's Trust, as the case may be, a written request (a "Request") to
include shares of Surviving Corporation Common Stock held by the Purchaser or
the Purchaser's Estate or Purchaser's Trust, as the case may be, in the Proposed
Sale (which Request shall be irrevocable unless (x) there shall be a material
adverse change in the Material Terms (including, without limitation, a change in
the Material Terms that would result in the sale price being decreased by more
than 10% from that set forth in the Notice) or (y) if otherwise mutually agreed
to in writing by the Purchaser or the Purchaser's Estate or Purchaser's Trust,
as the case may be, and the Selling Entity) or (ii) notwithstanding that the
Purchaser, the Purchaser's Estate or the Purchaser's Trust, as the case may be,
may have declined to make a Request, the Selling Entity so decides in its sole
discretion, shares of Surviving Corporation Common Stock held by the Purchaser,
the Purchaser's Estate or the Purchaser's Trust, as the case may be, will be
included in the Proposed Sale as provided herein; provided that, in the case of
(i) above, only one Request, which shall be executed by the Purchaser or the
Purchaser's Estate or Purchaser's Trust, as the case may be, may be delivered
with respect to any Proposed Sale for all shares of Surviving Corporation Common
Stock held by the Purchaser or the Purchaser's Estate or Purchaser's Trust.
Promptly after the consummation of the transactions contemplated thereby, the
Selling Entity will furnish the Purchaser, the Purchaser's Trust or the
Purchaser's Estate with a copy of the Sale Agreement, if any.
(c) The number of shares of Surviving Corporation Common Stock that
the Purchaser or the Purchaser's Estate or Purchaser's Trust, as the case may
be, will be permitted to include in a Proposed Sale pursuant to a Request, or
that the Selling Entity will be permitted to decide to include
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61 EXHIBIT 10(f)
FORM 10-Q for the Quarter
Ended September 30, 1996
in a Proposed Sale, will be in the aggregate that number of shares of Surviving
Corporation Common Stock owned collectively by the Purchaser, the Purchaser's
Estate and the Purchaser's Trust, as the case may be, that is equal to the pro
rata portion of the total number of shares proposed to be sold in the Proposed
Sale, based upon the product of (i) the sum of the number of shares of Surviving
Corporation Common Stock then owned by the Purchaser or the Purchaser's Estate
or Purchaser's Trust, as the case may be, plus all shares of Surviving
Corporation Common Stock that the Purchaser or the Purchaser's Estate or
Purchaser's Trust, as the case may be, are then entitled to acquire under an
unexercised option to purchase shares of Surviving Corporation Common Stock, to
the extent such option is then vested and exercisable or would become vested and
exercisable as a result of the consummation of the Proposed Sale (ii) multiplied
by a percentage calculated by dividing the aggregate number of shares of
Surviving Corporation Common Stock that the Selling Entity proposes to sell in
the Proposed Sale by the total number of shares of Surviving Corporation Common
Stock owned by the Selling Entity.
Notwithstanding the foregoing, in the case of any Proposed Sale (i)
the consummation of which is reasonably expected to occur on a date after the
tenth anniversary of the Effective Time and (ii) that would constitute a "Change
of Control" (as defined in the Stock Purchase Agreement of even date herewith
between NIplc and the Purchaser), the Purchaser or the Purchaser's Estate or
Purchaser's Trust, as the case may be, will be permitted to include in such
Proposed Sale pursuant to a Request all shares of Surviving Corporation Common
Stock then owned by the Purchaser or the Purchaser's Estate or Purchaser's
Trust, as the case may be, plus all shares of Surviving Corporation Common Stock
that the Purchaser or the Purchaser's Estate or Purchaser's Trust, as the case
may be, are then entitled to acquire under an unexercised option to purchase
shares of Surviving Corporation Common Stock, to the extent such option is then
vested and exercisable or would become vested and exercisable as a result of the
consummation of the Proposed Sale.
(d) Except as may otherwise be provided herein, shares of Surviving
Corporation Common Stock subject to a Request, or that the Selling Entity may
decide will be so included, will be included in a Proposed Sale pursuant hereto
and in any agreements with purchasers relating thereto on the same terms and
subject to the same conditions applicable to the shares of Surviving Corporation
Common Stock which the Selling Entity proposes to sell in the Proposed Sale.
Such terms and conditions shall include, without limitation: the sales price;
the payment of fees, commissions and expenses; the provision of, and
representation and warranty as to, information requested by the Selling Entity;
and the provision of requisite indemnifications; provided that any
indemnification provided by the Purchaser, the Purchaser's Estate or the
Purchaser's Trust shall be pro rata in proportion with the number of shares of
Surviving Corporation Common Stock to be sold. In the case of indirect sales by
the Selling Entity of beneficial ownership of the Surviving Corporation Common
Stock, the sale price for the shares of the Purchaser or the Purchaser's Estate
or Purchaser's Trust, as the case may be, shall be determined by an independent
investment bank or appraisal firm on the basis of the proportion of any sale
price applicable to the Selling Entity that is deemed to be attributable to the
Surviving Corporation alone, and the other
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62 EXHIBIT 10(f)
FORM 10-Q for the Quarter
Ended September 30, 1996
terms and conditions of the Proposed Sale shall be appropriately adjusted to
reflect, for purposes of the inclusion of the Purchaser's, the Purchaser's
Estate's or the Purchaser's Trust's shares in such Proposed Sale, a sale of the
Surviving Corporation Common Stock. In connection with any such indirect sale
for consideration other than cash, the Purchaser, the Purchaser's Estate or the
Purchaser's Trust, as the case may be, will be entitled to receive a
proportionate amount (determined as described in the preceding sentence) of a
like kind of non-cash compensation, or a proportionate interest therein.
Notwithstanding anything to the contrary contained herein, in connection with
any sale, whether direct or indirect, for consideration other than cash, in the
absolute discretion of the Selling Entity, the shares of the Purchaser or the
Purchaser's Estate or Purchaser's Trust, as the case may be, subject to a
Request may be purchased instead for an amount in cash equal to the fair market
value (determined by an independent investment bank or appraisal firm) of any
non-cash consideration that would otherwise be receivable hereunder.
(v) Custody Agreement and Power of Attorney.
Upon delivering a Request or upon notice that the Selling Entity has
decided to include shares held by the Purchaser, the Purchaser's Estate or the
Purchaser's Trust, as the case may be, in the Proposed Sale, the Purchaser or
the Purchaser's Estate or Purchaser's Trust, as the case may be, will, if
requested by the Selling Entity, execute and deliver a custody agreement and
power of attorney in form and substance satisfactory to the Selling Entity with
respect to the shares of Surviving Corporation Common Stock which are to be sold
by the Purchaser or the Purchaser's Estate or Purchaser's Trust, as the case may
be, pursuant hereto (a "Custody Agreement and Power of Attorney"). The Custody
Agreement and Power of Attorney will provide, among other things, that the
Purchaser or the Purchaser's Estate or Purchaser's Trust, as the case may be,
will deliver to and deposit in custody with the custodian and attorney-in-fact
named therein a certificate or certificates representing such shares of
Surviving Corporation Common Stock (duly endorsed in blank by the registered
owner or owners thereof) and irrevocably appoint said custodian and
attorney-in-fact as the Purchaser or the Purchaser's Estate's or Purchaser's
Trust's, as the case may be, agent and attorney-in-fact with full power and
authority to act under the Custody Agreement and Power of Attorney on the
Purchaser's or the Purchaser's Estate's or Purchaser's Trust's, as the case may
be, behalf with respect to the matters specified therein.
(vi) Obligations to Purchaser.
(a) The Purchaser or the Purchaser's Estate's or Purchaser's Trust's,
as the case may be, right pursuant hereto to participate in a Proposed Sale
shall be contingent on the Purchaser's or the Purchaser's Estate's or
Purchaser's Trust's, as the case may be, strict compliance with each of the
provisions hereof and the Purchaser's or the Purchaser's Estate's or Purchaser's
Trust's, as the case may be, willingness to execute such documents in connection
therewith as may be reasonably requested by the Selling Entity.
(b) The obligations of the Selling Entity hereunder shall extend only
to the Purchaser or the Purchaser's Estate or Purchaser's Trust, as
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63 EXHIBIT 10(f)
FORM 10-Q for the Quarter
Ended September 30, 1996
the case may be, and no other of the Purchaser's or the Purchaser's Estate's or
Purchaser's Trust's, as the case may be, successors or assigns shall have any
rights pursuant hereto.
(vii) Notices.
All notices and other communications provided for herein shall be in
writing and shall be deemed to have been duly given when delivered to the party
to whom it is directed:
(a) If to NIplc, to it at the following address:
Nomura International plc
Nomura House
1 St. Martin's-le-Grand
London EC1A 4NP
Attention: Mr. Guy Hands
(b) If to the Purchaser, to him or her at the address set forth below
under his or her signature;
(c) If to the Purchaser's Estate or Purchaser's Trust, at the address
provided to NIplc by such entity.
or at such other address as any of the above shall have specified by notice in
writing delivered to the others by certified mail.
Any notice which is required to be given to the Purchaser shall, if the
Purchaser is then deceased, be given to the Purchaser's personal representative
if such representative has previously informed NIplc of his or her status and
address by written notice under this Section 4.
(viii) Applicable Law.
The laws of the State of Delaware shall govern the interpretation,
validity and performance of the terms of this Agreement, regardless of the law
that might be applied under principles of conflicts of law. Any suit, action or
proceeding against the Seller, with respect to this Agreement, or any judgment
entered by any court in respect of any thereof, may be brought in any court of
competent jurisdiction in the State of New Jersey, as NIplc may elect in its
sole discretion, and the Seller hereby submits to the non-exclusive jurisdiction
of such courts for the purpose of any such suit, action, proceeding or judgment.
By the execution and delivery of this Agreement, the Seller appoints the
Secretary of the Surviving Corporation, at the executive offices of the
Surviving Corporation in Morristown, New Jersey (or such other place within the
State of New Jersey as may be designated for such purpose), as his or her agent
upon which process may be served in any such suit, action or proceeding. Service
of process upon such agent, together with notice of such service given to the
Seller in the manner provided in Section 4 hereof, shall be deemed in every
respect effective service of process upon him or her in any suit, action or
proceeding. Nothing herein shall in any way be deemed to limit the ability of
NIplc to serve any such writs, process or summonses in any other manner
permitted by applicable law or to obtain jurisdiction over
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64 EXHIBIT 10(f)
FORM 10-Q for the Quarter
Ended September 30, 1996
the Seller, in such other jurisdictions and in such manner, as may be permitted
by applicable law. The Seller hereby irrevocably waives any objections which he
or she may now or hereafter have to the laying of the venue of any suit, action
or proceeding arising out of or relating to this Agreement brought in any court
of competent jurisdiction in the State of New Jersey, and hereby further
irrevocably waives any claim that any such suit, action or proceeding brought in
any such court has been brought in any inconvenient forum. No suit, action or
proceeding against NIplc with respect to this Agreement may be brought in any
court, domestic or foreign, or before any similar domestic or foreign authority
other than in a court of competent jurisdiction in the State of New Jersey, and
the Seller hereby irrevocably waives any right which he or she may otherwise
have had to bring such an action in any other court, domestic or foreign, or
before any similar domestic or foreign authority. NIplc hereby submits to the
jurisdiction of such courts for the purpose of any such suit, action or
proceeding, and by the execution and delivery of this Agreement, the Seller
appoints the Secretary of the Surviving Corporation, at the executive offices of
the Surviving Corporation in Morristown, New Jersey (or such other place within
the State of New Jersey as may be designated for such purpose), as his or her
agent upon which process may be served in any such suit, action or proceeding.
Service of process upon such agent, together with notice of such service given
to NIplc in the manner provided in Section 4 hereof, shall be deemed in every
respect effective service of process upon NIplc in any suit, action or
proceeding. NIplc hereby irrevocably waives any objections which it may now or
hereafter have to the laying of the venue of any suit, action or proceeding
arising out of or relating to this Agreement brought in any court of competent
jurisdiction in the State of New Jersey, and hereby further irrevocably waives
any claim that any such suit, action or proceeding brought in any such court has
been brought in any inconvenient forum.
(ix) Assignability of Certain Rights by NIplc.
If the Selling Entity transfers its interest in the Surviving
Corporation to an affiliate, such affiliate shall assume the obligations
hereunder of the Selling Entity, but such assignment shall not, without the
written consent of the Purchaser or the Purchaser's Estate or Purchaser's Trust,
as the case may be, relieve NIplc of its obligations hereunder.
(x) Binding Effect.
The provisions of this Agreement shall be binding on and inure to the
benefit of the parties hereto and their respective heirs, legal representatives,
successors and assigns, and shall also inure to the benefit of each affiliate of
NIplc that may become a Selling Entity.
(xi) Purchaser's Acknowledgement.
It is the understanding of the Purchaser that, and he or she hereby
acknowledges, that the Purchaser is aware that no Proposed Sale presently is
contemplated and that such a sale may never occur.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
<PAGE>
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65 EXHIBIT 10(f)
FORM 10-Q for the Quarter
Ended September 30, 1996
NOMURA INTERNATIONAL plc
By:
Name:
Title:
________________________________
Purchaser
________________________________
________________________________
Address of Purchaser
<PAGE>
<PAGE>
66 EXHIBIT 10(f)
FORM 10-Q for the Quarter
Ended September 30, 1996
EXHIBIT D
VOTING TRUST AGREEMENT
VOTING TRUST AGREEMENT (hereinafter called this "Agreement"), dated as
of October 1, 1996, between the several stockholders of AT&T Capital
Corporation, a corporation organized and existing under the laws of the State of
Delaware (the "Corporation"), whose names are listed below and all other
stockholders of the Corporation who shall join in and become parties to this
agreement as hereinafter provided (each, a "Subscriber") and Thomas C. Wajnert
(the "Trustee").
RECITALS
WHEREAS, the Subscribers are respectively owners of shares of the
common stock (the "Stock") of the Corporation in the amount set forth opposite
their respective signature hereto;
WHEREAS, the combined holdings of Stock of the Subscribers constitute
a minority of the issued and outstanding Stock of the Corporation;
WHEREAS, the Subscribers desire to pool their Stock for a limited
period of time so as to make more effective their participation in the
management of the Corporation and to facilitate certain transactions involving
the Corporation;
WHEREAS, with a view to the safe and competent management of the
Corporation and the expeditious and efficient involvement of the Corporation in
certain transactions, in each case in the interests of all the stockholders
thereof, the Subscribers are desirous of creating a trust (the "Trust") in the
manner following; and
WHEREAS, the Trustee has agreed to act as trustee of the shares of
Stock to be assigned and delivered hereunder.
It is hereby agreed as follows:
(xii) TRANSFER OF STOCK TO TRUSTEES.
Each of the Subscribers agrees that he or she will assign and deliver
to the Trustee any certificate held by the Subscriber representing shares of
Stock owned by him or her at any time or from time to time by depositing with
the Trustee such certificate or certificates immediately after the issuance
thereof, together with proper and sufficient instruments duly endorsed for the
transfer thereof to the Trustee and with all necessary stock transfer stamps
affixed, and shall do all things necessary for the transfer of the Subscriber's
respective shares of Stock to the Trustees on the books of the Corporation.
(xiii) OTHER STOCKHOLDERS MAY JOIN.
Every stockholder in the Corporation may become a party to this
Agreement by assigning and delivering to the Trustee the certificate or
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67 EXHIBIT 10(f)
FORM 10-Q for the Quarter
Ended September 30, 1996
certificates representing all shares of Stock owned by such stockholder in the
manner provided in the preceding paragraph and expressly agreeing in writing to
be bound by all of the terms, conditions and obligations of this Agreement as if
such stockholder were an original party (other than the Trustee) hereto.
(xiv) TRUSTEE TO HOLD SUBJECT TO AGREEMENT.
The Trustee shall hold the shares of Stock so transferred to him for
the common benefit of the Subscribers, under the terms and conditions
hereinafter set forth.
(xv) ISSUANCE OF STOCK CERTIFICATES TO TRUSTEE.
(a) The Trustee shall surrender to the proper officers of the
Corporation for cancellation all certificates of Stock which shall be assigned
and delivered to him as herein provided, and in their stead shall procure new
certificates to be issued to him as Trustee under this Agreement. Such
certificates shall state that they are subject to this Agreement, and such fact
shall be noted also in the stock ledger of the Corporation.
(b) If any of the Stock transferred to the Trustee hereunder
represents property pledged by a Subscriber to secure any obligations of such
Subscriber and if, as a condition to permitting the transfer of such Stock to
the Trustee hereunder the pledgee requires the Trustee to pledge and deposit
such Stock with such pledgee, then the Trustee shall so pledge and deposit with
such pledgee such Stock, and assign and transfer to such pledgee all of the
Trustee's right, title and interest in and to such Stock, to be held by such
pledgee in accordance with the original pledge by such Subscriber to the same
extent as if the Trustee were such Subscriber.
(xvi) VOTING TRUST CERTIFICATES.
(a) Upon the deposit with the Trustee by a Subscriber of a certificate
or certificate representing shares of Stock in the manner hereinbefore set
forth, the Trustee shall issue to such Subscriber a voting trust certificate for
the same number of shares as is represented by the certificate or certificates
representing shares of Stock transferred by the Subscriber to the Trustee (each
a "Voting Trust Certificate"). Each such Voting Trust Certificate shall state
that it is issued under this Agreement, and shall set forth the nature and
amount of the beneficial interest thereunder of the person to whom it is issued.
(b) The Voting Trust Certificate shall be substantially in the
following form:
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68 EXHIBIT 10(f)
FORM 10-Q for the Quarter
Ended September 30, 1996
"Number VTC ... .... Shares
AT&T CAPITAL CORPORATION
(a Delaware corporation)
VOTING TRUST CERTIFICATE
This is to certify that ___________________ (the "Holder") has
deposited with the undersigned as Trustee under the Voting Trust Agreement,
dated as of October 1, 1996 (the "Voting Trust Agreement"), between certain
holders of common stock (the "Stock") of AT&T Capital Corporation, a Delaware
corporation (the "Corporation") and Thomas C. Wajnert (the "Trustee"), a
certificate or certificates representing the number of shares of Stock set forth
above and that, until the termination of the Voting Trust Agreement, the Holder
or his or her assign is entitled to all the benefits and interests specified in
the Voting Trust Agreement arising from the deposit of such shares of Stock, all
as provided in, and subject to the terms of, the Voting Trust Agreement. Until
the termination of the Voting Trust Agreement, the Holder or his or her assign
is entitled (i) to receive payments equal to the amount of dividends, if any,
received by the Trustee upon the shares of Stock represented by this
certificate, less any taxes imposed thereon that the Trustee may be required to
pay thereon or to withhold therefrom under any present or future law and also
less a proportionate share of the expenses of the Trustee and (ii) to vote with
respect to action to be taken by the Trustee pursuant to the procedures set
forth in the Voting Trust Agreement. Until the Trustee shall have actually
delivered a certificate or certificates representing the shares of Stock held by
him to the Holder as specified in the Voting Trust Agreement, and subject to the
terms thereof, the Trustee or his successor in the trust shall, as provided in
the Voting Trust Agreement, possess and be entitled to exercise all rights and
powers of every nature of absolute owner and holder of record of the Stock,
including, without limitation, the right to vote for every purpose and to
consent to or waive any corporate act of the Corporation of any kind, it being
understood that no voting right shall pass to the Holder by virtue of the
ownership of this certificate or by or under any agreement express or implied,
but it being further understood that the Trustee shall be required to vote, or
otherwise take action with respect to, the shares of Stock deposited hereunder
in the manner set forth in the Voting Trust Agreement.
Upon the termination of the Voting Trust Agreement, this certificate
shall be surrendered to the Trustee by the Holder against delivery to the Holder
of a certificate or certificates representing a like number of shares of Stock.
In the event of the dissolution or total or partial liquidation of the
Corporation the money and other property received by the Trustee in respect of
the Stock represented by this certificate shall be paid or delivered to the
Holder of record hereof, but only upon surrender of this certificate in the case
of dissolution or the presentation of this certificate for the notation thereon
of the distribution in case of a partial liquidation.
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69 EXHIBIT 10(f)
FORM 10-Q for the Quarter
Ended September 30, 1996
To the extent set forth in the Voting Trust Agreement, and subject to
the same restrictions and limitations upon transfer by the Holder of the shares
of Stock deposited hereunder whether pursuant to the terms of any agreement to
which the Holder is subject or otherwise, this certificate and the right, title
and interest in and to the shares of Stock in respect of which this certificate
is issued, are transferable on the books of the Trustee by the registered Holder
hereof in person or by attorney duly authorized, according to the rules
established for that purpose by the Trustee and on surrender hereof properly
assigned; and until so transferred the Trustee may treat the registered Holder
hereof as the owner for all purposes whatsoever except that no delivery of stock
certificates hereunder shall be made without the surrender hereof.
As a condition of making or permitting any transfer or delivery of
stock certificates or Voting Trust Certificates, the Trustee may require the
payment of a sum sufficient to pay or reimburse him for any stamp tax or other
governmental charge in connection therewith and for a proportionate part of his
expenses as Trustee.
The Holder takes this certificate subject to all the terms and
conditions of the Voting Trust Agreement and by acceptance of this certificate
acknowledges and warrants that receipt of the same is for investment purposes
only and not with a view to distribution.
A duplicate original of the Voting Trust Agreement is filed with the
Trustee and with the Corporation.
IN WITNESS WHEREOF, the undersigned Trustee has executed this
certificate as of the ____ day of ___________, ____.
Trustee
(c) The Voting Trust Certificates shall be assignable, to the extent
set forth herein and subject to the restrictions and limitations on transfer
referred to below, and until so transferred the Trustee may treat the registered
holder of the Voting Trust Certificate as the owner thereof for all purposes
whatsoever. Upon any such permitted transfer, and surrender of the transferred
Voting Trust Certificate to the Trustee, together with proper and sufficient
instruments duly endorsed for the transfer thereof to the transferee and with
all necessary stock transfer stamps affixed, the Trustee shall deliver or cause
to be delivered to the transferee a Voting Trust Certificate or Certificate
representing the same number of shares of Stock as set forth in the Voting Trust
Certificate so transferred and surrendered. The Trustee shall keep a list of the
shares of Stock transferred to him, and shall also keep a record of all Voting
Trust Certificates issued or transferred on his books, which records shall
contain the names and addresses of the holders of the Voting Trust Certificates
and the number of shares of Stock represented by each such certificate. Such
list and record shall be open at all reasonable times to inspection by any
Subscriber or by the Corporation. Every assignee or transferee of a Voting Trust
Certificate issued hereunder shall succeed to all the rights hereunder of the
transferor and, by acceptance of such Voting Trust Certificate, become a party
hereto with like effect as though an original Subscriber hereof.
<PAGE>
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70 EXHIBIT 10(f)
FORM 10-Q for the Quarter
Ended September 30, 1996
(xvii) RESTRICTIONS ON TRANSFER OF VOTING TRUST CERTIFICATE.
Each of the Subscribers hereby agrees that during the term of this
Agreement, his or her Voting Trust Certificates will not be sold or transferred
except in accordance with the terms and conditions of this Agreement and subject
to the same restrictions and limitations upon transfer by any Subscriber of the
shares of Stock so deposited with the Trustee whether pursuant to the terms of
any agreement to which a Subscriber is subject, so long as such agreement
remains in effect, or otherwise. The Voting Trust Certificates shall be regarded
as stock of the Corporation, within the meaning of any provision of the Bylaws
of the Corporation imposing conditions and restrictions upon the sale of stock
of the Corporation.
(xviii) RIGHTS OF THE TRUSTEE.
Until the Trustee shall have actually delivered a certificate or
certificates representing the shares of Stock held by him to the Subscriber as
specified herein, and subject to the terms hereof, the Trustee or his successor
in the trust shall possess and be entitled to exercise all rights and powers of
every nature of absolute owner and holder of record of the Stock, including,
without limitation, the right to vote as described below, and the right, upon
the instructions of Subscribers representing a majority of the shares of Stock
subject to this Trust to sell or transfer all, but not less than all, of such
shares, subject to the same restrictions and limitations upon transfer to which
any Subscriber of the shares deposited with the Trustee hereunder is subject,
whether pursuant to the terms of any agreement to which a Subscriber is subject,
so long as such agreement remains in effect, or otherwise. It is expressly
acknowledged and agreed that the Trustee's rights hereunder expressly include,
without limitation, the right to sell or transfer such shares of Stock in
connection with a sale of the Corporation.
(xix) TRUSTEE TO VOTE STOCK.
It shall be the duty of the Trustee, and he shall have full power and
authority, and he is hereby fully empowered and authorized, to represent the
holders of the Voting Trust Certificates and the Stock transferred to the
Trustee as aforesaid, and to vote upon the Stock, as directed by the vote of the
holders of Voting Trust Certificates representing a majority of the Stock
subject to this Trust voting with respect thereto in accordance with reasonable
procedures as may be established from time to time by the Trustee, at all
meetings of the stockholders of the Corporation, in the election of Directors
and upon any and all matters in question, which may be brought before such
meetings, as fully as any stockholder might do if personally present. It is
expressly acknowledged and agreed that the Trustee's right to vote shall
expressly include, without limitation, the right to vote on such fundamental
matters as a proposal of merger or consolidation, or a sale of all or
substantially all of the assets of the Corporation. The Trustee may vote stock
of the Corporation in person or by such person as he may select as his proxy.
<PAGE>
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71 EXHIBIT 10(f)
FORM 10-Q for the Quarter
Ended September 30, 1996
(xx) TRUSTEE'S LIABILITY.
The Trustee shall use his best judgment in voting upon the Stock
transferred to him, but shall not be liable for any vote cast, or consent or
waiver given by him, in good faith, and in the absence of gross negligence or
wilful misconduct.
(xxi) DIVIDENDS AND OTHER DISTRIBUTIONS.
(a) Except as provided in the next succeeding sentence, the Trustee
shall collect and receive all dividends that may accrue upon the shares of Stock
subject to this Trust, and, subject to deduction as provided below, shall divide
the same among the holders of the Voting Trust Certificates in proportion to the
number of shares respectively represented by their Voting Trust Certificates.
Notwithstanding the foregoing, the Trustee and the Corporation may provide that
the Corporation shall pay directly to the holders of the Voting Trust
Certificates any or all dividends that may accrue upon shares of Stock subject
to the Trust in proportion to the number of shares respectively represented by
their Voting Trust Certificates and subject to deduction as provided below for
the benefit of the Trustee.
(b) In the event of the dissolution or total or partial liquidation of
the Corporation, the Trustee shall collect and receive all money and other
property in respect of the shares of Stock subject to this Trust, and, subject
to deduction as provided below, shall divide the same among the holders of the
Voting Trust Certificates in proportion to the number of shares respectively
represented by their Voting Trust Certificates, but only upon surrender of such
holders' Voting Trust Certificates in the case of dissolution or the
presentation of their Voting Trust Certificates for the notation thereon of the
distribution in case of a partial liquidation.
(c) In the event of the merger or consolidation of the Corporation, or
a sale of the Corporation or of all or substantially all of its assets, the
Trustee may, in his sole discretion, elect to receive the moneys, securities,
rights or properties to which the holder of the shares of Stock subject to this
Trust is entitled, and, subject to deduction as provided below, to divide the
same among the holders of the Voting Trust Certificates in proportion to the
number of shares respectively represented by their Voting Trust Certificates,
but only upon surrender of such holders' Voting Trust Certificates in the case
of the merger or consolidation of the Corporation or the sale of the
Corporation, or the presentation of their Voting Trust Certificates for the
notation thereon of the distribution in case of a sale of all or substantially
all of the assets of the Corporation.
(d) Notwithstanding anything to the contrary contained herein, the
Trustee may deduct from any payment or distribution to any Subscribers
hereunder, or all of them, the amount of (i) any taxes imposed thereon that the
Trustee may be required to pay thereon or to withhold therefrom under any
present or future law, (ii) a sum sufficient to pay or reimburse him for any
stamp tax or other governmental charge in connection therewith any
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72 EXHIBIT 10(f)
FORM 10-Q for the Quarter
Ended September 30, 1996
transfer or delivery of any stock certificate or Voting Trust Certificate and
(iii) a proportionate share of the expenses of the Trustee.
(xxii) TRUSTEE'S INDEMNITY.
The Trustee shall be entitled to be indemnified fully out of the
dividends coming to his hands against all costs, charges, expenses and other
liabilities properly incurred by him in the exercise of any power conferred upon
him by these presents; and the Subscribers, and each of them, hereby covenant
with the Trustee that in the event of the monies and securities in his hands
being insufficient for that purpose, the Subscribers, and each of them, will in
proportion to the amount of their respective shares and interests hold harmless
and keep indemnified the Trustee of and from all loss or damage which he may
sustain or be put to by reason of anything he may lawfully do in the execution
of this Trust.
(xxiii) APPOINTMENT OF SUBSTITUTE OR SUCCESSOR TRUSTEE.
In the event of the Trustee's dying or resigning or refusing or
becoming unable to act, the Trustee may designate, by written instrument duly
acknowledged, a substitute or successor Trustee, or if the Trustee cannot, or
does not within 10 days of an event described above, so designate a substitute
or successor Trustee, then the holders of the Voting Trust Certificates by the
vote of the holders of Voting Trust Certificates representing a majority of the
Stock deposited hereunder voting with respect thereto, shall appoint a
substitute or successor Trustee, and any person so designate or appointed shall
thereupon be vested with all the duties, powers and authority of a Trustee
hereunder as if originally named herein. Prior to the commencement of his
duties, the Trustee and, so long as such subscription agreement remain in
effect, each Trustee subsequently designated or appointed shall sign an
agreement with the Corporation substantially similar to the subscription
agreements pursuant to which the original Subscribers purchased their original
shares of Stock and shall thus signify his or her consent to be bound thereby
and his or her agreement to perform the terms thereof. All of the terms,
provisions and conditions of such subscription agreements shall apply to all
Trustees hereof and hereunder with the same force and effect as if such Trustees
had originally signed such agreements.
(xxiv) COMPENSATION.
The Trustee shall serve without compensation. The Trustee shall have
the right to incur and pay such reasonable expenses and charges and to employ
such counsel as he may deem necessary or desirable in the performance of his
duties hereunder. Any such expenses or charges incurred or paid may be charged
pro rata to the holders of the Voting Trust Certificates.
(xxv) CONTINUANCE AND TERMINATION OF TRUST.
Unless the Trustee exercises his right, which is hereby expressly
granted to him, to terminate the Trust beforehand, the Trust hereby created
shall be continued until the date that this 21 years from the date of this
Agreement, and shall then terminate. Upon termination of the Trust, the
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73 EXHIBIT 10(f)
FORM 10-Q for the Quarter
Ended September 30, 1996
Trustee shall, upon the surrender of the Voting Trust Certificates by the
respective holders thereof assign and transfer to them the number of shares of
Stock thereby represented or may deposit with the Corporation the certificate or
certificates representing the Stock held by the Trustee, together with proper
and sufficient instruments duly endorsed for the transfer thereof and with all
necessary stock transfer stamps affixed, with instructions to distribute the
same to the registered holders of the Voting Trust Certificates in the manner
above provided, and the Trustee shall thereupon be relieved and discharged from
all further obligation and liability hereunder.
(xxvi) NOTICE.
Any notice to be given to the holders of Voting Trust Certificates
hereunder shall be sufficiently given if mailed to the registered holders of
Voting Trust Certificates at the addresses furnished respectively by such
holders to the Trustee.
(xxvii) LOST TRUST CERTIFICATES.
In case any Voting Trust Certificate issued under this Agreement shall
become mutilated, destroyed, stolen or lost, the Trustee, in his sole
discretion, may authorize the issuance of a new Voting Trust Certificate and
thereupon issue a new Voting Trust Certificate in substitution therefor for a
like number of shares. The applicant for such substituted Voting Trust
Certificate shall furnish to the Trustee evidence to his satisfaction of the
mutilation, destruction, theft or loss of such Voting Trust Certificate,
together with such indemnity to the Trustee as he may require in his sole
discretion.
(xxviii) TRUSTEE AND THE CORPORATION.
Nothing herein contained shall disqualify the Trustee hereunder from
voting for himself to serve or from serving the Corporation or any of its
affiliates as an officer or director or in any other capacity or from voting for
himself to receive or receiving compensation for such services. The Trustee
shall not be disqualified from his office by dealing or contracting with the
Corporation nor shall any transaction or contract of the Corporation be void or
voidable by reason of the fact that the Trustee or any corporation, partnership,
association or other organization of which the Trustee is a director or officer,
or has a financial interest, is in any way interested in such transaction or
contract, nor shall the Trustee be liable to account to the Corporation or to
any stockholder thereof for any profits realized by, from or through any such
transaction or contract by reason of the fact that the Trustee or any
corporation, partnership, association or other organization of which the Trustee
is a director or officer, or has a financial interest, was in any way interested
in such transaction or contract.
(xxix) MISCELLANEOUS.
(a) Successors and Assigns. This Agreement shall be binding on and
accrue to the benefit of the parties hereto and their respective
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74 EXHIBIT 10(f)
FORM 10-Q for the Quarter
Ended September 30, 1996
executors, administrators, legal representatives, heirs, assigns and successors.
(b) Counterparts. This Agreement may be executed in one or more
counterparts, and by different parties on separate counterparts, each of which
shall be deemed an original, but all such counterparts together constitute one
and the same Agreement, and it shall not be necessary in making proof of this
Agreement to produce or account for more than one such counterpart.
(c) Severability. In the event that any one or more of the provisions,
paragraphs, words, clauses, phrases or sentences contained herein, or the
application thereof in any circumstances, is held invalid, illegal or
unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision, paragraph, word, clause, phrase or
sentence in every other respect and of the remaining provisions, paragraphs,
words, clauses, phrases or sentences hereof shall not be in any way impaired, it
being intended that all rights, powers and privileges of the parties hereto
shall be enforceable to the fullest extent permitted by law.
(d) Descriptive Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning of terms contained herein.
(e) Deposit of Agreement. One fully conformed copy of this Agreement
shall be deposited by the Trustee at the Corporation's registered office in the
Sate of Delaware, and shall be subject to the same examination by a stockholder
of the Corporation as are the books and records of the Corporation, and shall be
subject to examination by any holder of a Voting Trust Certificate, in person or
by attorney or other agent, during normal business hours. A fully conformed copy
of this Agreement shall also retained by the Trustee at his office, and shall be
subject to examination by any holder of a Voting Trust Certificate, in person or
by attorney or other agent, during normal business hours.
(xxx) GOVERNING LAW.
This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Delaware applicable to contracts made
and to be performed therein.
(xxxi) ACCEPTANCE OF TRUST BY TRUSTEE.
The Trustee hereby accepts the above Trust subject to all of the
terms, conditions and reservations herein contained, and agrees that he will
exercise his powers and perform his duties as Trustee as herein set forth;
provided, that nothing herein contained shall be construed to prevent the
Trustee from resigning and discharging himself from the Trust.
IN WITNESS WHEREOF, the Subscribers have hereunto set their hands and
seals and set opposite their respective signatures the number of shares
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75 EXHIBIT 10(f)
FORM 10-Q for the Quarter
Ended September 30, 1996
held by them respectively, and the Trustee, in token of his acceptance hereby
created, have hereunto set his hand and seal.
[SEAL]
Trustee
[SEAL]
[Subscriber]
<PAGE>
<PAGE>
76 EXHIBIT 10(f)
FORM 10-Q for the Quarter
Ended September 30, 1996
EXHIBIT E
FIRST AMENDMENT TO THE PLEDGE AGREEMENT
FIRST AMENDMENT TO THE PLEDGE AGREEMENT (hereinafter called this
"Amendment"), dated as of September 30, 1996, by and between Thomas C. Wajnert,
an individual residing at the address set forth at the end of this Agreement
(the "Pledgor"), and AT&T CAPITAL CORPORATION, a Delaware corporation (the
"Pledgee").
RECITALS
WHEREAS, the Pledgor and the Pledgee entered into the Pledge Agreement
(the "Original Agreement"), dated as of August 4, 1993, pursuant to which the
Pledgor pledged certain shares of the Common Stock of the Pledgor (the "Pledged
Shares") to the Pledgee in exchange for a loan from the Pledgee;
WHEREAS, pursuant to the Agreement and Plan of Merger among the
Pledgee, AT&T Corp., a New York corporation, Hercules Limited, a Cayman Islands
company ("Parent"), and Antigua Acquisition Corporation, a Delaware corporation
and a wholly owned subsidiary of Parent ("Merger Sub"), dated as of June 5, 1996
(as amended, the "Merger Agreement"), Merger Sub will be merged (the "Merger")
with and into the Pledgee, after which the Pledgee will continue its corporate
existence as the surviving corporation (the "Surviving Corporation");
WHEREAS, pursuant to a Subscription Agreement (the "Subscription
Agreement") between the Pledgor and Merger Sub, dated as of September 30, 1996,
the Pledgor intends, immediately prior to the effective time of the Merger (the
"Effective Time"), to exchange (the "Management Share Exchange") the Pledged
Shares for certain shares (the "Merger Sub Shares") of Common Stock, par value
$.01 per share, of Merger Sub;
WHEREAS, the Merger Sub Shares will be converted at the Effective Time
pursuant to the Merger Agreement into shares (the "Surviving Corporation
Shares") of Common Stock, par value $.01 per share, of the Surviving
Corporation;
WHEREAS, pursuant to a Voting Trust Agreement (the "Voting Trust
Agreement") to be entered into between, among others, the Pledgor and Thomas C.
Wajnert, as trustee under the Voting Trust Agreement (the "Voting Trustee"),
record title to the Surviving Corporation Shares will be transferred to the
Voting Trustee, such shares to be held by the Voting Trustee for the common
benefit of the Pledgor and certain other stockholders under the Voting Trust
Agreement; and
WHEREAS, the Pledgor and the Pledgee wish to (i) amend the terms of
the Original Agreement to provide that the Merger Sub Shares and the Surviving
Corporation Common Stock will be considered to be "Purchased Shares" under the
terms of the Original Agreement, and (ii) permit the release of the Pledged
Shares for the purpose of (a) consummating the Management Share Exchange
pursuant to the Subscription Agreement and the subsequent conversion of the
Merger Sub Shares into the Surviving Corporation Shares pursuant to the Merger
Agreement and (b) permitting the
<PAGE>
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77 EXHIBIT 10(f)
FORM 10-Q for the Quarter
Ended September 30, 1996
transfer of record title to the Surviving Corporation Shares to the Voting
Trustee pursuant to the Voting Trust Agreement.
NOW, THEREFORE, to implement the foregoing and in consideration of the
premises and of the mutual agreements contained herein, the parties hereto agree
as follows:
1. Defined Terms. Unless otherwise defined herein, capitalized terms
which are defined in the Original Agreement are used herein as therein defined.
2. Recitals. (a) The first recital of the Original Agreement is hereby
amended by deleting the parenthetical phrase "(the 'Purchased Shares')" at the
end of such recital.
(b) The second recital of the Original Agreement is hereby amended by
inserting the parenthetical phrase "(as defined below)" immediately after the
words "Purchased Shares".
3. Section 1. (a) Section 1 of the Original Agreement is hereby
amended by deleting the parenthetical phrase "(as defined in Section 3(d)
hereof)" in the second sentence thereof.
(b) Section 1 of the Original Agreement is also hereby amended by
adding the following paragraph to the end of such Section:
The term "Purchased Shares" as used herein means (i) the shares of
Common Stock (the "Original Shares") of the Pledgee purchased by the Pledgor
pursuant to the Plan and the Stock Purchase Agreement referred to in the first
recital above, as long as such Original Shares are outstanding; (ii) the shares
(the "Merger Sub Shares") of Common Stock, par value $.01 per share, of Antigua
Acquisition Corporation, a Delaware corporation ("Merger Sub"), for which the
Original Shares will be exchanged (together with the payment of $5.00 in cash,
if necessary, to permit the issuance of a whole number of Merger Sub Shares)
pursuant to a Subscription Agreement, dated as of September 30, 1996 between the
Pledgee and Merger Sub, as long as such Merger Sub Shares are outstanding; and
(iii) thereafter, the shares of Common Stock, par value $.01, of the Pledgee
into which the Merger Sub Shares will be converted pursuant to the Agreement and
Plan of Merger among the Pledgee, AT&T Corp., a New York corporation, Hercules
Limited, a Cayman Islands company, and Merger Sub, dated as of June 5, 1996, as
amended, pursuant to which Merger Sub will be merged with and into the Pledgee,
and after which the Pledgee will continue its corporate existence as the
surviving corporation.
4. New Section 14. The Original Agreement is hereby amended by adding
the following new Section 14 immediately after Section 13 thereof:
14. Voting Trust. In the event that the Pledgee permits the Pledgor to
enter into a voting trust agreement and to transfer the Purchased Shares to a
Person in trust under such voting trust agreement (a "Voting Trustee"), then,
such Voting Trustee shall be required as a condition to such transfer to pledge
and deposit with the Pledgee the Purchased Shares in accordance with Section 1
hereof to the same extent as if such Voting
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78 EXHIBIT 10(f)
FORM 10-Q for the Quarter
Ended September 30, 1996
Trustee were the Pledgor and the other provisions of this Agreement that refer
to the Pledgor shall be deemed also to refer to such Voting Trustee, provided
that Section 3 hereof shall be deemed, with respect to the Purchased Shares, to
refer to such Voting Trustee only and not to the Pledgor.
5. The Pledgee shall release the Pledged Shares into the possession of
the Pledgor for the sole purpose of allowing the Pledgor to participate in (a)
the Management Share Exchange, and (b) the subsequent conversion of Merger Sub
Shares into the Surviving Corporation Shares pursuant to the Merger Agreement;
provided that the Pledgor shall (i) not dispose of the original Pledged Shares,
the Merger Sub Shares or the Surviving Corporation Shares (together, the
"Shares") except (x) to place such Shares in the custody of the Pledgee, (y) in
the case of the original Pledged Shares, to deliver such shares to Merger Sub
pursuant to the Management Share Exchange or (z) in the case of the Merger Sub
Shares, to transfer such shares to the Voting Trustee pursuant to the Voting
Trust Agreement; (ii) not permit any of the Shares to become subject to any lien
or encumbrance; and (iii) exercise such care in storing and preserving any of
the Shares in the Pledgor's possession as a person who has an obligation to
deliver property to another person is required to exercise by law.
While any of the Shares are in the possession of the Pledgor pursuant
to this Section, the rights of the Pledgee (except the right to possess any of
the Shares) and the obligations of the Pledgor under the Pledge Agreement shall
remain in full force and effect to the extent permitted by law.
The Pledgor shall immediately return any of the Shares which are in
the Pledgor's possession to the Pledgee if either (i) the Merger is consummated
pursuant to the Merger Agreement, or (ii) it becomes likely, in the reasonable
judgment of the Pledgee, that either the Management Share Exchange or the Merger
shall not be consummated on a timely basis.
6. Continuing Effect of Agreement. Except as expressly amended herein,
all of the terms and conditions of the Original Agreement shall remain in full
force and effect without amendment.
7. Effectiveness. This Amendment shall become effective on and as of
the time immediately preceding the Effective Time.
8. Counterparts. This Amendment may be executed in any number of
counterparts, each such counterpart being deemed to be an original instrument,
and all such counterparts shall together constitute the same agreement.
9. GOVERNING LAW. THIS AMENDMENT SHALL BE DEEMED TO BE MADE IN AND IN
ALL RESPECTS SHALL BE INTERPRETED, CONSTRUED AND GOVERNED BY AND IN ACCORDANCE
WITH THE LAW OF THE STATE OF NEW JERSEY WITHOUT REGARD TO THE CONFLICT OF LAW
PRINCIPLES THEREOF.
<PAGE>
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79 EXHIBIT 10(f)
FORM 10-Q for the Quarter
Ended September 30, 1996
IN WITNESS WHEREOF, this Amendment has been duly executed and
delivered by the parties hereto as of the date first written above.
AT&T CAPITAL CORPORATION
By: ______________________
Name:
Title:
______________________
(Name of Pledgor)
Address:
______________________
______________________
______________________
<PAGE>
<PAGE>
80 EXHIBIT 10(f)
FORM 10-Q for the Quarter
Ended September 30, 1996
EXHIBIT F
FIRST AMENDMENT TO THE PROMISSORY NOTE
FIRST AMENDMENT TO THE PROMISSORY NOTE (hereinafter called this
"Amendment"), dated as of October 1, 1996, by and betweem Thomas C. Wajnert, an
individual residing at the address set forth at the end of this Agreement (the
"Borrower"), and AT&T CAPITAL CORPORATION, a Delaware corporation (the
"Company").
RECITALS
WHEREAS, the Borrower issued to the Company a promissory note (the
"Promissory Note"), dated as of August 4, 1993 pursuant to the AT&T Capital
Corporation 1993 Leveraged Stock Purchase Plan (the "Plan") and the Stock
Purchase Agreement entered into between the Borrower and the Company pursuant to
the Plan;
WHEREAS, pursuant to the Agreement and Plan of Merger among the
Company, AT&T Corp., a New York corporation, Hercules Limited, a Cayman Islands
company ("Parent"), and Antigua Acquisition Corporation, a Delaware corporation
and a wholly owned subsidiary of Parent ("Merger Sub"), dated as of June 5, 1996
(as amended), Merger Sub was merged (the "Merger") with and into the Company,
following which the Company is continuing its corporate existence as the
surviving corporation;
WHEREAS, pursuant to a Subscription Agreement (the "Subscription
Agreement") between Merger Sub and the Borrower, dated as of September 30, 1996,
the Company (as successor to Merger Sub) and the Borrower are obligated to amend
the Promissory Note as promptly as practicable following consummation of the
Merger;
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements contained herein, the parties hereto agree as follows:
1. Defined Terms. Unless otherwise defined herein, capitalized terms
which are defined in the Promissory Note are used herein as therein defined.
2. Maturity Date. The first paragraph of the Promissory Note is hereby
amended by deleting the phrase "August 31, 2000 (the 'Maturity Date'), provided
that such Maturity Date may be extended by up to one (1) year pursuant to
Section 3.2.2. of the Plan (as defined below)" in the first sentence thereof and
substituting in lieu thereof the phrase "October 1, 2006 (the 'Maturity Date'),
provided that such Maturity Date may be extended by the Company pursuant to
Section 15 of the Subscription Agreement".
3. Section 1. The first sentence of Section 1 of the Promissory Note
is hereby amended by deleting the words "a rate of 6.00 percent (%) per annum"
therefrom and replacing them with the words "a rate of 7.13 percent (%) per
annum".
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81 EXHIBIT 10(f)
FORM 10-Q for the Quarter
Ended September 30, 1996
4. Section 5. (a) Section 5(b) of the Promissory Note is hereby
amended by deleting such section in its entirety and substituting in lieu
therefor the following:
(b) In the event that the Borrower at any time desires to obtain a release
of all or any part of any Pledged Property securing the Loan, whether for the
purpose of selling such Pledged Property or otherwise, as a condition to such
release the Borrower shall make arrangements satisfactory to the Company for the
repayment under this Note of an amount equal to the entire Adjusted Loan
Balance.
(b) Section 5(c) of the Promissory Note is hereby amended by deleting
such section in its entirety.
(c) Section 5(d) of the Promissory Note is hereby amended by deleting
such section in its entirety and substituting in lieu thereof the following:
(c) Any prepayment made pursuant to this Section 5 shall be applied to
principal and interest in the same proportion as the amounts of principal and
interest owed pursuant to the Promissory Note, at the time of such prepayment,
bear to the sum of such interest and principal amounts owed.
5. Continuing Effect of Agreement. Except as expressly amended herein,
all of the terms and conditions of the Promissory Note shall remain in full
force and effect without amendment. Without limiting the generality of the
foregoing, the Adjusted Loan Balance of the Promissory Note as of the date
hereof shall not affected hereby and, except as expressly amended herein,
neither the release of Pledged Property for the purpose of effecting the
transactions contemplated by the Subscription Agreement nor any other matter in
connection herewith or therewith shall be deemed to release or discharge any
obligation for payment under the Promissory Note.
6. Counterparts. This Amendment may be executed in any number of
counterparts, each such counterpart being deemed to be an original instrument,
and all such counterparts shall together constitute the same agreement.
7. GOVERNING LAW. THIS AMENDMENT SHALL BE DEEMED TO BE MADE IN AND IN
ALL RESPECTS SHALL BE INTERPRETED, CONSTRUED AND GOVERNED BY AND IN ACCORDANCE
WITH THE LAW OF THE STATE OF NEW JERSEY WITHOUT REGARD TO THE CONFLICT OF LAW
PRINCIPLES THEREOF.
IN WITNESS WHEREOF, this Amendment has been duly executed and
delivered by the parties hereto as of the date first written above.
<PAGE>
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82 EXHIBIT 10(f)
FORM 10-Q for the Quarter
Ended September 30, 1996
AT&T CAPITAL CORPORATION
By: ______________________
Name:
Title:
______________________
(Name of Borrower)
Address:
______________________
______________________
______________________
<PAGE>
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83 EXHIBIT 10(f)
FORM 10-Q for the Quarter
Ended September 30, 1996
Exhibit D
Benefit Plans
Retirement Plans
1. Compensation Limit Excess Plan
2. Excess Benefit Plan
3. Executive Benefit Plan
4. Retirement and Savings Plan
5. Supplemental Executive Retirement Plan
Health and Welfare Benefit Plans and Programs
1. Senior Management Basic Life Insurance Program
2. Senior Management Individual Life Insurance Program
3. Senior Management Long-Term Disability Program 1
4. Child/Elder Care Reimbursement Account Plan
5. Dental Expense Plan
6. Health Care Reimbursement Account Plan
7. Life and Accidental Loss Insurance Plan
8. Long-Term Disability Plan
9. Medical Expense Plan
10. Vision Care Plan
11. Group Legal Services Plan
12. Long-Term Care Plan
13. Short-Term Disability Plan
<PAGE>
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84 EXHIBIT 10(f)
FORM 10-Q for the Quarter
Ended September 30, 1996
Exhibit E
Perquisites
1. Health-related
Health Club Program
Annual Physical
2. Travel
First-class business travel
Use of company plane (or charter aircraft as appropriate) for business
purposes and for personal purposes (in accordance with prior practices which
include reimbursement of the Company for such personal use)
Spousal travel at Company expense for trade association and other
business meetings (in accordance with prior practices)
3. Clubs
Luncheon Clubs
- Metropolitan Club
- Morristown Club
- Park Avenue Club
Eligible (along with other executives) for
Company's corporate membership in country club
- Fiddlers Elbow Golf Club
4. Other
Executive Car Plan
Car and driver (in accordance with prior
practices)
Financial Counseling Plan
Priority use of Company office and apartment in
New York City
<PAGE>
<PAGE>
85 EXHIBIT 10(f)
FORM 10-Q for the Quarter
Ended September 30, 1996
Exhibit F
SEPARATION AGREEMENT AND GENERAL RELEASE
For purposes of this Separation Agreement and General Release (the "General
Release"), the "Company" shall mean _______________ Corporation and its
respective divisions, subsidiaries and affiliated companies.
In consideration of the fact that I, Thomas C. Wajnert (the "Executive") have
voluntarily and of my own free will, elected to accept a lump sum payment in the
amount of $____________ (the "Termination Amount") and the Company has agreed to
pay me the Termination Amount, I acknowledge and agree to the following:
1. I understand that as of ______________ (the "Date of Termination") my
employment with the Company will terminate.
2. I also understand that, pursuant to the Older Workers Benefit Protection Act
of 1990, I have the right and am encouraged to consult with an attorney before
signing this Separation Agreement and General Release, I have twenty-one (21)
days to consider the General Release before signing it, and I may revoke the
General Release within seven calendar days after signing it. I acknowledge that
the Company has informed me of my rights set forth in the immediately preceding
sentence. For revocation to be effective, written notice must be received by the
Company no later than the close of business on the seventh day after I sign this
Separation Agreement and General Release. I understand that this revocation can
be made by delivering the written notice of revocation to the [________________
Corporation, Director of Human Resources, 44 Whippany Road, Morristown, New
Jersey 07960].
3. I realize that there are various state and federal laws that govern my
employment relationship with the Company and/or prohibit employment
discrimination on the basis of age, color, race, gender, sexual
preference/orientation, marital status, national origin, mental or physical
disability, religious affiliation or veteran status and that these laws are
enforced through the courts and agencies such as the Equal Employment
Opportunity Commission, Department of Labor and State Human Rights Agencies.
Such laws include, but are not limited to, Title VII of the Civil Rights Act of
1964, the Age Discrimination in Employment Act, as amended, 42 U.S.C. Section
1981, etc. In consideration of the Termination Amount, I hereby agree to give up
any and all rights I may have under these or any other laws with respect to my
employment and termination of employment with the Company.
4. Subject to paragraph 5 below, on behalf of myself, my representatives, heirs,
executors, administrators, successors and assigns, I release and forever
discharge the Company, its divisions, affiliates, subsidiaries, branches,
parents, predecessors, successors, assigns, directors, officers, trustees,
representatives, agents and employees stockholders, administrators, attorneys,
insurers, fiduciaries or employee benefit plans and programs and the
administrators and fiduciaries thereof past, present or future ("Releasees")
from any and all debts, obligations, claims,
<PAGE>
<PAGE>
86 EXHIBIT 10(f)
FORM 10-Q for the Quarter
Ended September 30, 1996
including claims for attorney's fees and costs, charges, demands, judgments,
promises, covenants, agreements, contracts, actions or causes of action known or
unknown, suspected or unsuspected, of every kind and nature whatsoever, from the
beginning of the world, which were or could have been raised, which may
heretofore have existed and which may now exist against any of the Releasees
with respect to, or arising out of, my employment or termination of employment
with the Company (collectively "Claims").
This includes, but is not limited to, Claims arising under arising under
the Age Discrimination in Employment Act of 1967, as amended, 9 U.S.C. ss. 626,
et seq., Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. ss.
2000e, et seq., the Civil Rights Act of 1871, as amended, 42 U.S.C. ss. 1981, et
seq., the Americans With Disabilities Act, 42 U.S.C. ss. 12101, et seq., the
Rehabilitation Act of 1973, as amended, 29 U.S.C. ss. 701, et seq., the Family
and Medical Leave Act of 1993, 29 U.S.C. ss. 2601 et seq., the Fair Labor
Standards Act, 29 U.S.C. ss. 201, et seq., the Employee Retirement Income
Security Act of 1974, as amended, 29 U.S.C. ss. 1001, et seq., the Worker
Adjustment and Retraining Act, 29 U.S.C. ss. 2101, et seq., federal, state or
local laws regarding employment discrimination and/or federal, state or local
laws of any type or description regarding the employment of labor.
The Claims released also include all claims arising under the United States
or any state constitutions; all claims arising under any Executive Order or
derived from or based upon any federal regulations; all common law claims
including claims for wrongful discharge, public policy claims, claims for breach
of an express or implied contract, claims for breach of an implied covenant of
good faith and fair dealing, whistleblower claims, claims for intentional
infliction of emotional distress, negligent and/or intentional
misrepresentation, defamation, and tortuous interference with contract or
prospective economic advantage; all claims for any compensation including back
wages, front pay, fringe benefits, liquidated damages, or any other form of
economic loss; and all claims for damages due to personal injury, including
damages for mental anguish, emotional distress, pain and suffering, humiliation,
and punitive damages with respect to, or arising out of, my employment or
termination of employment with the Company.
In addition, I hereby represent and acknowledge that I have not brought any
suit, brought charges, filed any grievance or arbitration or commenced any other
proceeding, administrative or judicial, against any of the Releasees in any
court of law or equity, or before any administrative agency, or any other forum
with respect to any matter arising or derivative from my employment with the
Company or the termination of my employment with the Company that are currently
pending, and on my own behalf and on behalf of my representatives, heirs,
executors, administrators, agents, successors and assigns, I hereby covenant and
agree not to sue, bring charges, file any grievance or arbitration or commence
any other proceeding, administrative or judicial, against any of the Releasees
in any court of law or equity, on any debts, obligations, promises, covenants,
collective bargaining obligations, agreements, contracts, endorsements, bonds,
controversies, suits or causes known or unknown, suspected or unsuspected, of
every kind and nature whatsoever, from the beginning of the world, which were or
could have been raised, which may heretofore have existed and which may now
exist against any of the Releasees, including,
<PAGE>
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87 EXHIBIT 10(f)
FORM 10-Q for the Quarter
Ended September 30,1996
but not limited to, those: arising under the Age Discrimination in Employment
Act of 1967, as amended, 9 U.S.C. ss. 626, et seq., Title VII of the Civil
Rights Act of 1964, as amended, 42 U.S.C. ss. 2000e, et seq., the Civil Rights
Act of 1871, as amended, 42 U.S.C. ss. 1981, et seq., the Americans With
Disabilities Act, 42 U.S.C. ss. 12101, et seq., the Rehabilitation Act of 1973,
as amended, 29 U.S.C. ss. 701, et seq., the Family and Medical Leave Act of
1993, 29 U.S.C. ss. '2601 et seq., the Fair Labor Standards Act, 29 U.S.C. ss.
201, et seq., the Employee Retirement Income Security Act of 1974, as amended,
29 U.S.C. ss. 1001, et seq., the Worker Adjustment and Retraining Act, 29 U.S.C.
ss. 2101, et seq., federal, state or local laws regarding employment
discrimination and/or federal, state or local laws of any type or description
regarding the employment of labor; arising from my employment with the Company,
my separation from employment with the Releasees, or the actions or conduct of
any of the Releasees towards me in connection with my employment or termination
of employment with the Company up to and including the date of this General
Release, except for a claim that Defendants have failed to comply with the terms
of this General Release.
With respect to any charges that have been or may be filed by others on my
behalf, either individually or as part of a class, concerning events or actions
relating to my employment or the termination of my employment and which occurred
on or before the date of this General Release, I additionally waive and release
any right I may have to recover in any such lawsuit or proceeding, and will use
my reasonable best efforts, as requested in writing by any Releasee, to
discontinue such actions or proceedings on my behalf. I intend that this General
Release shall, to the maximum extent permitted by law, discharge each of the
Releasees from any Claim released herein. In addition, I shall as soon as
practicable after receipt thereof remit to the Company any amounts paid to me as
a result of any actions or proceedings referred to in this paragraph.
If I breach this paragraph, I understand that I will be liable for all
expenses, including costs and reasonable attorney's fees, incurred by any
Releasee in defending the lawsuit or charge of discrimination, regardless of the
outcome. I agree to pay such expenses within thirty (30) calendar days of
written demand [to whom at what address?]. This paragraph is not intended to
limit me from instituting legal action for the sole purpose of enforcing this
General Release.
5. Notwithstanding anything else herein to the contrary, this General Release
does not waive or release claims that may arise after the date this General
Release is executed and which are based on acts or omissions occurring after the
date I sign this Release. In addition, this Release shall not affect (a) the
obligations of the Company set forth this Release or in the employment agreement
dated [September __, 1996] between the Company and me or other obligations that,
by their terms, are to be performed after the date hereof (including, without
limitation, obligations to me under any stock option, stock award or incentive
plans or agreements or obligations under any pension plan or other benefit plan,
all of which shall remain in effect in accordance with their terms), (b)
obligations to indemnify me respecting acts or omissions in connection with my
service as an officer or employee of the Company or (c) any right I may have to
obtain contribution in the event of the entry of judgment against me as a result
<PAGE>
<PAGE>
88 EXHIBIT 10(f)
FORM 10-Q for the Quarter
Ended September 30, 1996
of any act or failure to act for which both I and the Company are jointly
responsible.
6. In accordance with my existing and continuing obligations to the Company, I
have returned or will promptly return to the Company, all Company property then
in my possession, custody or control, (and make all reasonable efforts to
retrieve all Company property formerly in my possession) at any time, including,
but not limited to, notes, keys, card keys or security passes, Company
identification cards, credit or phone cards, files, records, computer access
codes, computer programs, instruction manuals, business plans, and other
property relating to the business of the Company, but excluding personal
correspondence, rolodexes and other items of a personal nature. I understand and
agree that after the Date of Termination, I will no longer be authorized to
incur any expenses, obligations or liabilities on behalf of the Company. I will
submit any claims or vouchers for reimbursement of business expenses.
7. I affirm my obligation to comply fully with the terms of Section 12 of my
employment agreement dated September 30, 1996.
In addition, for a period of three years from the Date of Termination, I
shall not publish, cause to be published or write for publication any books,
articles or other materials concerning the Company, its divisions or affiliates
or my employment with the Company.
I shall not disclose to anyone the terms of the General Release, other than
to my family members and my legal and financial advisors, unless required to do
so by subpoena issued by a court or other body with apparent jurisdiction
(provided I give the Company notice that I have received any such subpoena
within 3 days after I receive any such subpoena in order that the Company may
take action to quash any such subpoena as it deems appropriate), without the
prior written consent of the Company.
I will not utter or issue any disparaging or derogatory remark, or make any
untruthful statement, about any of the Releasees. The Company's Board of
Directors will not utter or issue any disparaging or derogatory remark, or make
any untruthful statement, about me. I also agree that I will not in any way
assist, and or participate in the pursuit of any claims or actions brought
against any of the Releasees that relate to Claims released by this General
Release, unless required to do so by subpoena issued by a court or other body
with apparent jurisdiction (provided I give the Company notice that I have
received any such subpoena within 3 days after I receive any such subpoena in
order that the Company may take action to quash any such subpoena as it deems
appropriate).
8. I understand that the Company will pay to an outplacement services provider
reasonable and documented fees for outplacement services rendered to me.
9. The construction, interpretation and performance of this Separation Agreement
and General Release shall be governed by the laws of the State of New Jersey
applicable to contracts made and to be performed therein, without giving effect
to the principles thereof relating to the conflict of laws. I hereby agree to
submit to the exclusive jurisdiction of the United States District Court for the
District of New Jersey, or any court of the
<PAGE>
<PAGE>
89 EXHIBIT 10(f)
FORM 10-Q for the Quarter
Ended September 30, 1996
state of New Jersey located in _________ county, with respect to all aspects of
the enforcement of this General Release.
10. I understand and agree that money damages are not a sufficient remedy for
any actual or threatened breach of this Separation Agreement and General Release
by me, and that, in addition to all other remedies, the Company will be entitled
to specific performance and injunctive or other equitable relief as a remedy for
any such breach.
11. In the event that any one or more of the provisions contained in this
Separation Agreement and General Release shall for any reason be held to be
unenforceable in any respect under the law of any state or of the United States
of America, such unenforceability shall not affect any other provision but, with
respect only to that jurisdiction holding the provision to be unenforceable,
this Separation Agreement and General Release shall then be construed as if such
unenforceable provision or provisions had never been contained herein.
12. This Separation Agreement and General Release contains the entire agreement
between the Company and me and fully supersedes any and all prior agreements or
understandings pertaining to the subject matter hereof. I represent and
acknowledge that in executing this Separation Agreement and General Release I
have not relied upon any representation or statement not set forth herein made
by any of the Releasees or by any of the Releasee's agents, representatives or
attorneys with regard to the subject matter hereof.
BY SIGNING THIS SEPARATION AGREEMENT AND GENERAL RELEASE, I STATE THAT; I HAVE
READ IT; I UNDERSTAND IT AND KNOW THAT I AM GIVING UP IMPORTANT RIGHTS; I AGREE
WITH EVERYTHING IN IT; I AM AWARE OF MY RIGHT TO CONSULT AN ATTORNEY BEFORE
SIGNING IT; AND I HAVE SIGNED IT KNOWINGLY AND VOLUNTARILY.
__________________________ ____________________________________
Company Representative Executive's Signature
____________________________________
Executive's Name Printed
<PAGE>
<PAGE>
1 EXHIBIT 10(g)
FORM 10-Q for the Quarter
Ended September 30, 1996
STOCK OPTION AGREEMENT
THIS AGREEMENT, dated as of October 1, 1996 is made by and between AT&T
Capital Corporation, a Delaware corporation hereinafter referred to as the
"Company", and an employee of the Company or a Subsidiary (as defined below) of
the Company, hereinafter referred to as "Optionee".
WHEREAS, the Company wishes to afford the Optionee the opportunity to purchase
shares of its $.0l par value Common Stock ("Common Stock");
WHEREAS, the Company wishes to carry out the Plan (as hereinafter defined), the
terms of which are hereby incorporated by reference and made a part of this
Agreement; and
WHEREAS, the Board of Directors of the Company or the Committee (as hereinafter
defined), appointed to administer the Plan, has determined that it would be to
the advantage and best interest of the Company and its stockholders to grant the
options provided for herein to the Optionee as an incentive for increased
efforts during his term of office with the Company or its Subsidiaries, and has
advised the Company thereof and instructed the undersigned officer to issue said
Options;
NOW, THEREFORE, in consideration of the mutual covenants herein contained and
other good and valuable consideration, receipt of which is hereby acknowledged,
the parties hereto do hereby agree as follows:
ARTICLE I
DEFINITIONS
Whenever the following terms are used in this Agreement, they shall have the
meaning specified in the Plan or below unless the context clearly indicates to
the contrary.
Section 1.1 - Act
"Act" shall mean the Securities Act of 1933, as amended, or any successor law.
Section 1.2 - Affiliate
"Affiliate", shall mean, with respect to any specified Person, any other Person
that directly, or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with, such specified Person. Solely
for purposes of this Agreement, GRS Holding Company Limited and Babcock & Brown,
Inc. and their respective Affiliates shall be deemed to be Affiliates of Nomura
(as defined below).
Section 1.3 - Board of Directors
"Board of Directors" means the Board of Directors of the Company.
Section 1.4 - Cause
"Cause" shall mean (i) the Optionee's willful and continued failure to perform
his or her duties with respect to the Company or any of its
<PAGE>
<PAGE>
2 EXHIBIT 10(g)
FORM 10-Q for the Quarter
Ended September 30, 1996
Subsidiaries which continues beyond ten days after a written demand for
substantial performance is delivered to the Optionee by the Company or such
Subsidiary or (ii) misconduct by the Optionee involving (x) dishonesty or breach
of trust in connection with the Optionee's employment or (y) conduct which would
be a reasonable basis for an indictment of the Optionee for a felony or for a
misdemeanor involving moral turpitude.
Section 1.5 - Change of Control
"Change of Control" shall mean (i) any transaction (including, without
limitation, a merger, consolidation or reorganization, or a sale of derivative
securities that effectively transfers a beneficial ownership interest) as a
result of which either (a) (1) the combined beneficial ownership interest of the
Company by Nomura International plc ("Nomura") and its Affiliates falls below
40% on a fully diluted basis and (2) the combined beneficial ownership interest
of the Company by another Person and its Affiliates exceeds the combined
beneficial ownership interest of Nomura and its Affiliates or (b) the combined
beneficial ownership interest of the Company by Nomura and its Affiliates falls
below 20% on a fully diluted basis or (ii) a sale, or series of sales, of all or
substantially all of the assets of the Company as a result of which either (A)
(I) the combined beneficial ownership interest by Nomura and its Affiliates of
the assets of the business conducted by the Company falls below 40% of the
assets of the business conducted by the Company immediately prior to such sale
or series of sales (measured on the basis of the net book value, on a
consolidated basis, thereof) and (II) the combined beneficial ownership interest
of another Person of former assets of the business as conducted by the Company
immediately prior to such sale or series of sales exceeds the combined
beneficial ownership interest by Nomura and its Affiliates of the assets of the
business conducted by the Company immediately prior to such sale or series of
sales (measured on the basis of the net book value, on a consolidated basis,
thereof) or (B) the combined beneficial ownership interest by Nomura and its
Affiliates of the assets of the business conducted by the Company falls below
20% of the assets of the business conducted by the Company immediately prior to
such sale or series of sales (measured on the basis of the net book value, on a
consolidated basis, thereof); provided that the provisions set forth in clause
(ii) shall be deemed not to apply in the case of any transfer, sale, assignment,
pledge, hypothecation or other disposition of assets in connection with, or
incident to, any borrowings, securitizations or other financing transactions or
in the case of the recapitalization, reclassification, liquidation or
dissolution of the Company.
Section 1.6 - Code
"Code" shall mean the Internal Revenue Code of 1986, as amended.
Section 1.7 - Committee
"Committee" shall mean the Compensation Committee of the Board of
Directors.
Section 1.8 - Common Stock and Share
<PAGE>
<PAGE>
3 EXHIBIT 10(g)
FORM 10-Q for the Quarter
Ended September 30, 1996
"Common Stock" or "Share" means common stock of the Company which may be
authorized but unissued, or issued and reacquired.
Section 1.9 - Disability
"Disability" shall mean a determination by the Board of Directors or a duly
authorized committee thereof that an Optionee has become (i) permanently
physically unable to do any job for which the Optionee is qualified, or may
reasonably become qualified by training, education or experience or (ii)
permanently mentally incompetent to perform the normal daily functions of
living, and in each case at all times during such disability the Optionee is
under a physician's care and following the recommended course of treatment.
Section 1.10 - Effective Time
"Effective Time" shall mean the date of the effective time of the merger of
Antigua Acquisition Corporation, a Delaware corporation ("Merger Sub"), with and
into the Company pursuant to the Agreement and Plan of Merger, dated as of June
5, 1996, as amended, among the Company, AT&T Corp., a New York corporation,
Hercules Limited, a Cayman Islands company, and Merger Sub.
Section 1.11 - Fair Market Value
"Fair Market Value" shall mean with respect to a share of Common Stock, (i)
prior to an IPO, the amount established at the immediately preceding
determination, which determination will have been made not less than annually,
by an independent U.S. based investment banker (or, in the sole discretion of
the Board of Directors, an independent U.S.-based appraisal firm) selected by
the Board of Directors as the fair market value of a Share without giving effect
to any discount attributable to the illiquidity of the Shares or the fact that
any such Shares may constitute a minority interest in the Company or any premium
attributable to any special rights of any holder with respect to its Shares;
provided that prior to the first such determination (which shall occur not later
than January 31, 1997), the Fair Market Value of a share of Common Stock shall
be the Exercise Price provided in Section 2.2(a) hereof and (ii) after an IPO,
the Market Price Per Share of the Shares.
Section 1.12 - Good Reason
"Good Reason" shall mean (i) a reduction in the Optionee's base salary, (ii) a
substantial reduction in the Optionee's duties as an employee, officer or
director as they exist on the Grant Date (or, if the Grant Date is on or before
the date of the Effective Time, as they exist immediately after the Effective
Time), (iii) the elimination or reduction of the Optionee's eligibility to
participate in the Company's benefit programs that is inconsistent with the
eligibility of similarly situated employees of the Company and its Subsidiaries
to participate therein or (iv) an obligation to relocate more than 50 miles from
the Optionee's then current work location.
Section 1.13 - Grant Date
<PAGE>
<PAGE>
4 EXHIBIT 10(g)
FORM 10-Q for the Quarter
Ended September 30, 1996
"Grant Date" shall mean the date on which the Options provided for in this
Agreement were granted.
Section 1.14 - Group
"Group" shall mean, with respect to a particular time, any of the Company and
its Subsidiaries as of such time. Any event that results in an entity ceasing to
be a Subsidiary of the Company shall be deemed to constitute the cessation of
employment with the Group of all employees of such former Subsidiary, except for
such employees of such former Subsidiary who become employees of the Company or
one of its then Subsidiaries within 10 days of such event.
Section 1.15 - IPO
"IPO" shall mean a sale of Shares to the public that results in an active
trading market in the Shares.
Section 1.16 - Market Price Per Share
"Market Price Per Share" at any date shall be deemed to be the average of the
daily closing prices for the 20 consecutive trading days commencing on the 30th
trading day prior to the date in question. The closing price for each day shall
be (x) if the Common Stock is listed or admitted to trading on a national
securities exchange, the closing price on the New York Stock Exchange
Consolidated Tape (or any successor composite tape reporting transactions on
national securities exchanges) or, if such a composite tape shall not be in use
or shall not report transactions in the Common Stock, the last reported sales
price regular way on the principal national securities exchange on which the
Common Stock is listed or admitted to trading (which shall be the national
securities exchange on which the greatest number of shares of Common Stock has
been traded during such 20 consecutive trading days), or, if there is no
transaction on any such day in any situation, the mean of the bid and asked
prices on such day or (y) if the Common Stock is not listed or admitted to
trading on any such exchange, the closing price, if reported, or, if the closing
price is not reported, the average of the closing bid and asked prices as
reported by the National Association of Securities Dealers Automated Quotation
System (NASDAQ) or a similar source selected from time to time by the Company
for the purpose. In the event such closing prices are unavailable, the Market
Price Per Share shall be deemed to be the fair market value as determined in
good faith by the Board of Directors, on the basis of such relevant factors as
it in good faith considers, in the reasonable judgment of the Board of
Directors, appropriate.
Section 1.17 - Normal Retirement
"Normal Retirement" shall mean the voluntary retirement of the Optionee on a
date after the later of attaining age 60 or 5 years after the Effective Time.
Section 1.18 - Offering Percentage
<PAGE>
<PAGE>
5 EXHIBIT 10(g)
FORM 10-Q for the Quarter
Ended September 30, 1996
"Offering Percentage" shall mean, with respect to any public offering of Shares,
that percentage of all outstanding stock of the Company (determined as of the
time after the relevant public offering) represented by the Shares sold in such
public offering.
Section 1.19 - Options
"Options" shall mean the options to purchase Common Stock granted under this
Agreement, which options have not been designated as "incentive stock options"
within the meaning of Section 422 of the Code.
Section 1.20 - Person
"Person" shall mean any individual, partnership, firm, corporation, limited
liability company, association, trust, unincorporated organization or other
entity.
Section 1.21 - Plan
"Plan" shall mean the AT&T Capital Corporation 1996 Long Term Incentive Plan.
Section 1.22 - Pronouns
The masculine pronoun shall include the feminine and neuter, and the singular
the plural, where the context so indicates.
Section 1.23 - QPO
"QPO" shall mean a sale of shares of Common Stock to the public pursuant to a
registration statement under the Act that has been declared effective by the
Securities and Exchange Commission (other than a registration statement on Form
S-4 or Form S-8, or any successor or other forms promulgated for similar
purposes, or a registration statement in connection with an offering to
employees of the Company and its Subsidiaries) that results in an active trading
market in the Common Stock.
Section 1.24 - RIF Termination
"RIF Termination" shall mean (i) termination of an Optionee's employment by the
Group as a result of a reduction in force, facility relocation or closing, or
other Company program for job elimination, in each case that results in the
termination of a significantly large number of employees, or (ii) termination
within 135 days prior to a Change of Control if the Optionee can demonstrate
that such termination (a) was at the request of a third party with which the
Company had entered into negotiations or provided for in an agreement with
regard to such Change of Control or (c) otherwise occurred in connection with,
or in anticipation of, such Change of Control; and provided further that, in the
case of either (i) or (ii) above, such Change of Control actually occurs.
Section 1.25 - Secretary
"Secretary" shall mean the Secretary of the Company.
<PAGE>
<PAGE>
6 EXHIBIT 10(g)
FORM 10-Q for the Quarter
Ended September 30, 1996
Section 1.26 - Subsidiary
"Subsidiary" shall mean any corporation other than the Company in an unbroken
chain of corporations beginning with the Company if each of the corporations, or
group of commonly controlled corporations, other than the last corporation in
the unbroken chain then owns stock possessing 50% or more of the voting stock in
one of the other corporations in such chain.
ARTICLE II
GRANT OF OPTIONS
Section 2.1 - Grant of Options
For good and valuable consideration, on and as of the date hereof the Company
irrevocably grants to the Optionee an Option to purchase any part or all of an
aggregate of the number of shares set forth with respect to each such Option on
the signature page hereof of its Common Stock, par value $.0l per share, upon
the terms and conditions set forth in this Agreement.
Section 2.2 - Exercise Price
(a) The exercise price of the Shares covered by the Options (the "Exercise
Price") shall be $______________ without commission or other charge.
(b) Notwithstanding the foregoing, in the case of termination without Cause
(other than a RIF Termination) or resignation for Good Reason prior to the time
the Options become exercisable in full in accordance with Section 3.2(a), the
Exercise Price shall be increased by the amount, if any, of the excess of the
Fair Market Value of the Common Stock as of the date of exercise of the option
over its Fair Market Value (x) as of the date of such termination or
resignation, if an IPO has previously occurred or (y) prior to an IPO, at the
next period determination of Fair Market Value following such termination or
resignation or as of the day following an IPO, whichever is earlier. Section 2.3
- - Options Confer No Rights to Continued Employment
Nothing in this Agreement or in the Plan shall confer upon the Optionee any
right to continue in the employ of the Company or any Subsidiary or shall
interfere with or restrict in any way the rights of the Company and its
Subsidiaries, which are hereby expressly reserved, to terminate the employment
of the Optionee at any time for any reason whatsoever, with or without Cause.
Section 2.4 - Adjustments in Options
Subject to Paragraph 9 of the Plan, in the event that the outstanding
shares of the stock subject to an Option are, from time to time, changed into or
exchanged for a different number or kind of shares of the Company or other
securities of the Company by reason of a merger, consolidation,
recapitalization, reclassification, stock split, stock dividend, combination of
shares, or otherwise, the Committee shall make an
<PAGE>
<PAGE>
7 EXHIBIT 10(g)
FORM 10-Q for the Quarter
Ended September 30, 1996
appropriate and equitable adjustment in the number and kind of shares or other
consideration as to which such Option, or portions thereof then unexercised,
shall be exercisable and the exercise price therefor. Any such adjustments made
by the Committee shall be final and binding upon the Optionee, the Company and
all other interested Persons.
ARTICLE III
PERIOD OF EXERCISABILITY
Section 3.1 - Vesting
(a) Options shall become vested, thereby becoming eligible for exercise in
accordance with Section 3.2, in accordance with the schedule below:
<TABLE>
<CAPTION>
Vesting Date Vested Percentage of Underlying
Shares
<S> <C>
Grant Date 0%
The first anniversary of
the Grant Date 20%
The second anniversary of
the Grant Date 40%
The third anniversary of
the Grant Date 60%
The fourth anniversary of
the Grant Date 80%
The fifth anniversary of
the Grant Date 100%
</TABLE>
Options which have become vested in accordance with this Section 3.1(a) are
hereinafter referred to as "Vested Options".
(b) Notwithstanding the foregoing, upon any cessation of employment by the Group
of the Optionee for any reason or reasons, any Option or portion of an Option
that shall not have become vested in accordance with provisions of Section
3.1(a) shall be immediately canceled.
(c) Subject to Paragraph 10 of the Plan, in the event of a Change of Control,
the Options that have not yet become Vested Options at the time of such Change
of Control will not become immediately vested but will continue to vest as
provided in Section 3.1(a).
Section 3.2 - Exercisability
Options are not exercisable by the Optionee into Common Stock in any
circumstances except that Vested Options may be exercised into Common Stock by
the Optionee only following the event of (i) a Change of Control or (ii) a QPO,
provided that, prior to a Change of Control, the maximum number of Shares for
which Options may be so exercised by the Optionee shall be
<PAGE>
<PAGE>
8 EXHIBIT 10(g)
FORM 10-Q for the Quarter
Ended September 30, 1996
limited to a number of Shares equal to the product of (x) 2 times (y) the
Offering Percentage times (z) the total number of Shares underlying all Options
granted to Optionee under the Plan or any other plans of the Company or any
Subsidiary; provided further that, in the case of either clause (i) or clause
(ii), if the Optionee is, or formerly was, a member of the Corporate Leadership
Team of the Company (or a member of any successor organization to the Corporate
Leadership Team or, there is no such successor organization, an executive
officer of the Group in a position substantially similar to a position of a
member of the Corporate Leadership Team as comprised currently or in the future)
no Options may be exercised unless on the date on which the Optionee proposes to
exercise any options the Company has ratings on both its long term debt and
short term debt by both Moody's Investors Services, Inc. and Standard & Poor's
Ratings Group (or, if either or both of such organizations no longer rate such
securities, such other nationally recognized statistical rating organization or
organizations that have been selected by the Board of Directors in good faith)
in one of its generic rating categories that signifies investment grade and no
such organization has announced, either publicly or to the Company, that it
contemplates downgrading either or both of such ratings to one of its generic
rating categories that signifies less than investment grade, except to the
extent that the Board of Directors, having considered all of the alternatives
available to the Company (other than any capital contributions by, or sales of
equity securities to, any person, including, without limitation, the then
existing stockholders, or any of them), determines that it is not in the best
interests of the Company to continue to maintain any of such investment grade
ratings; provided further that if, on the tenth anniversary of the Effective
Time, any Vested Options held by the Optionee have not then previously been
exercisable for a period of at least 60 days, the restriction on exercisability
set forth in the immediately preceding proviso shall be of no further effect
with respect to such Vested options.
Section 3.3 - Expiration of Options
The Options may not be exercised into Common Stock to any extent by the
Optionee after, and shall terminate upon, the first to occur of the following
events:
(i) the eleventh anniversary of the Grant Date (or, if any Options are not then
exercisable in accordance with Section 3.2, then, with respect to such Options
only, such later date that is 60 days following the date on which such options
shall become so exercisable);
(ii) the date of cessation of employment by the Group for any reason other than
Normal Retirement, death or Disability, termination without Cause or resignation
for Good Reason of the Optionee; or
(iii) 60 days after termination by the Group without Cause or resignation for
Good Reason of the Optionee (or if any options are not then exercisable in
accordance with Section 3.2, then, with respect to such Options only, 60 days
after the first date that both (A) such options are exercisable and (B) there
are no applicable restrictions on the transferability of the Shares into which
such Options are exercisable pursuant to any agreement between the Optionee and
the Company).
<PAGE>
<PAGE>
9 EXHIBIT 10(g)
FORM 10-Q for the Quarter
Ended September 30, 1996
ARTICLE IV
EXERCISE OF OPTION
Section 4.1 - Person Eligible to Exercise
During the lifetime of the Optionee, only the Optionee or his or her duly
appointed attorney-in-fact may exercise an Option or any portion thereof. After
the death of the Optionee, any exercisable portion of an Option may, prior to
the time when an Option becomes unexercisable under Section 3.3. be exercised by
his or her personal representative or by any Person empowered to do so under the
Optionee's will or under the then applicable laws of descent and distribution.
Section 4.2 - Partial Exercise
Any exercisable portion of an option or the entire option, if then wholly
exercisable, may be exercised in whole or in part at any time prior to the time
when the Option or portion thereof becomes unexercisable under Section 3.3;
provided, however, that any partial exercise shall be for whole shares of Common
Stock only.
Section 4.3 - Manner of Exercise
An Option, or any exercisable portion thereof, may be exercised solely by
delivering to the Secretary or his office all of the following prior to the time
when the Option or such portion becomes unexercisable under Section 3.3:
(a) Notice in writing signed by the Optionee or the other Person then entitled
to exercise the Option or portion thereof, stating that the Option or portion
thereof is
thereby exercised, such notice complying with all applicable rules
established by the Committee;
(b) Full payment (in cash, by check or by a combination thereof) for the shares
with respect to which such Option or portion thereof is exercised;
(c) A bona fide written representation and agreement, in a form satisfactory to
the Committee, signed by the Optionee or other Person then entitled to exercise
such Option or portion thereof, stating that (i) the shares of stock are being
acquired for the Optionee's or such other Person's own account, for investment
and without any present intention of distributing or reselling said shares or
any of them except as may be permitted under the Act and then applicable rules
and regulations thereunder, (ii) except as provided below, the Optionee or other
Person then entitled to exercise such option or portion thereof will not
transfer, sell, assign, pledge, hypothecate or otherwise dispose of any of the
shares (each, a "Transfer") at any time prior to the tenth anniversary of the
date of the Effective Time and (iii) the Optionee or other Person then entitled
to exercise such Option or portion thereof will indemnify the Company against
and hold it free and harmless from any loss, damage, expense or liability
resulting to the Company if any sale or distribution of the shares by such
Person is contrary to the representation and agreement referred to above;
provided, however, that the Committee may, in its absolute discretion, take
whatever additional actions it deems appropriate to ensure the observance and
performance of such representation and
<PAGE>
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10 EXHIBIT 10(g)
FORM 10-Q for the Quarter
Ended September 30, 1996
agreement and to effect compliance with the Act and any other federal or state
securities laws or regulations;
(d) Full payment to the Company of all amounts which, under federal, state or
local law, it is required to withhold upon exercise of the Option; and
(e) In the event the Option or portion thereof shall be exercised pursuant to
Section 4.1 by any Person or Persons other than the Optionee, appropriate proof
of the right of such Person or Persons to exercise the Option.
Without limiting the generality of the foregoing, the Committee may require
an opinion of counsel acceptable to it to the effect that any subsequent
transfer of shares acquired on exercise of an option does not violate the Act,
and may issue stop-transfer orders covering such shares. Share certificates
evidencing stock issued on exercise of this Option shall bear an appropriate
legend referring to the provisions of subsection (c) above and the agreements
herein. The written representation and agreement referred to in clause (i) of
subsection (c) above shall, however, not be required if the shares to be issued
pursuant to such exercise have been registered under the Act, and such
registration is then effective in respect of such shares. The written agreement
referred to in clause (ii) of subsection (c) above will permit only the
following Transfers prior to the tenth anniversary of the Effective Time:
(w) A transfer upon the death of the Optionee or other Person then entitled to
exercise such Option or portion thereof to his or her executors, administrators,
testamentary trustees, legatees or beneficiaries; provided that it is expressly
understood that any such transferee shall be bound by the provisions of the
written agreement referred to in clause (ii) of subsection (c) above;
(x) A transfer made after the date of exercise of the Option or portion thereof
in compliance with the federal securities laws to a trust or custodianship the
beneficiaries of which may include only the Optionee or other Person then
entitled to exercise such Option or portion thereof, his or her spouse or the
Optionee's or such other Person's lineal descendants; provided, in each such
case, that such transfer is made expressly subject to the Agreement and that the
transferee agrees in writing to be bound by the provisions of the written
agreement referred to in clause (ii) of subsection (c) above;
(y) A sale of shares pursuant to an effective registration statement under the
Act filed by the Company or pursuant to a sale participation agreement that has
been entered into by the Optionee and Nomura or an Affiliate or Affiliates of
Nomura; and
(z) in connection with a sale in the public market (subject to the provisions of
Rule 144 under the Act where applicable) from and after a QPO; provided that
such sale shall be subject to such black-out period and/or other restrictions on
such sale as shall be reasonably requested by any underwriters in offerings of
the securities of the Company in order to insure the success of such offerings;
and provided further that the number of shares that may be sold in each one-year
period following the QPO will
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11 EXHIBIT 10(g)
FORM 10-Q for the Quarter
Ended September 30, 1996
be limited to the greater of (i) 25% of the total number of shares of Common
Stock, on a fully diluted basis, held by the Optionee or such other Person
immediately following the QPO and (ii) that number of shares of Common Stock
underlying the Options or any other stock options issued by the Company held by
the Optionee or such other Person as to which (A) pursuant to the terms of such
options, the Optionee's right to purchase such stock would expire during such
one-year period and (B) such options are actually exercised by the Optionee or
other Person then entitled to exercise such options or portions thereof.
Notwithstanding the foregoing permitted Transfers, the Optionee or other
Person then entitled to exercise such option or portion thereof will further
represent and agree in the written agreement referred to in subsection (c) above
that he or she will not at any time transfer, sell, assign, pledge, hypothecate
or otherwise dispose of any shares at any time, directly or indirectly, to any
competitor or prospective competitor of the Company or to any affiliate of a
such a person, other than:
(A) in connection with a sale to a third party pursuant to a stock purchase
agreement or sale participation agreement that has been entered into by the
Optionee and Nomura or an Affiliate or Affiliates of Nomura;
(B) in a widely distributed, underwritten public offering upon the exercise of
the rights provided for under a registration rights agreement covering such
shares; or
(C) pursuant to a sale effected (when otherwise permitted as provided above)
through an open market, nondirected broker's transaction in which the Optionee
or other Person then entitled to exercise such Option as seller does not know
the buyer is a competitor or prospective competitor.
Section 4.4 - Conditions to Issuance of Stock Certificates
The shares of stock deliverable upon the exercise of an Option, or any
portion thereof, may be either previously authorized but unissued shares or
issued shares which have then been reacquired by the Company. Such shares shall
be fully paid and nonassessable. The Company shall not be required to issue or
deliver any certificate or certificates for shares of stock purchased upon the
exercise of an Option or portion thereof prior to fulfillment of all of the
following conditions:
(a) The obtaining of approval or other clearance from any state or federal
governmental agency which the Committee shall, in its absolute discretion,
determine to be necessary or advisable; and
(b) The lapse of such reasonable period of time (not to exceed 60 days)
following the exercise of the Option as the Committee may from time to time
establish for reasons of administrative convenience.
Section 4.5 - Rights as Stockholder
The holder of an Option shall not be, nor have any of the rights or
privileges of, a stockholder of the Company in respect of any shares purchasable
upon the exercise of the Option or any portion thereof unless
<PAGE>
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12 EXHIBIT 10(g)
FORM 10-Q for the Quarter
Ended September 30, 1996
and until certificates representing such shares shall have been issued by the
Company to such holder.
ARTICLE V
MISCELLANEOUS
Section 5.1 Administration
The Committee shall have the power to interpret the Plan and this Agreement
and to adopt such rules for the administration, interpretation and application
of the Plan as are consistent therewith and to interpret or revoke any such
rules. All actions taken and all interpretations and determinations made by the
Committee shall be final and binding upon the Optionee, the Company and all
other interested Persons. No member of the Committee shall be personally liable
for any action, determination or interpretation made in good faith with respect
to the Plan or the Options. In its absolute discretion, the Board of Directors
may at any time and from time to time exercise any and all rights and duties of
the Committee under the Plan and this Agreement.
Section 5.2 - Options Not Transferable
Except as may be provided in any other agreement between the Optionee and
the Company, neither the Options nor any interest or right therein or part
thereof shall be liable for the debts, contracts or engagements of the Optionee
or his successors in interest or shall be subject to disposition by transfer,
alienation, anticipation, pledge, encumbrance, assignment or any other means
whether such disposition be voluntary or involuntary or by operation of law by
judgment, levy, attachment, garnishment or any other legal or equitable
proceedings (including bankruptcy), and any attempted disposition thereof shall
be null and void and of no effect; provided, however, that this Section 5.2
shall not prevent transfers by will or by the applicable laws of descent and
distribution.
Section 5.3 - Shares to Be Reserved
The Company shall at all times during the term of the Options reserve and
keep available, either in its treasury or out of its authorized but unissued
shares of stock, such number of shares of stock as will be sufficient to satisfy
the requirements of this Agreement.
Section 5.4 - Notices
Any notice to be given under the terms of this Agreement to the Company
shall be addressed to the Company in care of its Secretary, and any notice to be
given to the Optionee shall be addressed to him at the address given beneath his
signature hereto. By a notice given pursuant to this Section 5.4, either party
may hereafter designate a different address for notices to be given to him. Any
notice which is required to be given to the Optionee shall, if the Optionee is
then deceased, be given to the Optionee's personal representative if such
representative has previously informed the Company of his or her status and
address by written notice under this Section 5.4. Any notice shall have been
deemed duly given when enclosed in a properly sealed envelope or wrapper
addressed as aforesaid, deposited (with postage prepaid) in a post office or
branch post
<PAGE>
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13 EXHIBIT 10(g)
FORM 10-Q for the Quarter
Ended September 30, 1996
office regularly maintained by the United States Postal Service.
Section 5.5 - Titles
Titles are provided herein for convenience only and are not to serve as a
basis for interpretation or construction of this Agreement.
Section 5.6 - Applicability of Plan and Other Agreements
The Options and the shares of Common Stock issued to the Optionee upon
exercise of the options shall be subject to all of the terms and provisions of
the Plan and any other agreements between the Optionee and the Company, to the
extent applicable to the Options and such Shares. In the event of any conflict
between this Agreement and the Plan, the terms of the Plan shall control. In the
event of any conflict between this Agreement or the Plan and any other
agreements between the Optionee and the Company, the terms of the other
agreements between the Optionee and the Company shall control.
Section 5.7 - Amendment
This Agreement may be amended or supplemented by the Company, when
authorized by a resolution of the Committee or of the Board of Directors, to
cure any ambiguity, defect or inconsistency, to comply with Section 2.4 hereof
or to make any change that does not adversely affect the rights of the Optionee.
Any other amendment or supplement of this Agreement may be made only by a
writing executed by the parties hereto which specifically states that it is
amending this Agreement.
Section 5.8 - Governing Law
The laws of the State of Delaware shall govern the interpretation, validity
and performance of the terms of this Agreement regardless of the law that might
be applied under principles of conflicts of laws.
Section 5.9 - Jurisdiction
Any suit, action or proceeding against the Optionee with respect to this
Agreement, or any judgment entered by any court in respect of any thereof, may
be brought in any court of competent jurisdiction in the State of New Jersey, as
the Company may elect in its sole discretion, and the Optionee hereby submits to
the non-exclusive jurisdiction of such courts for the purpose of any such suit,
action, proceeding or judgment. The Optionee hereby irrevocably waives any
objections which he may now or hereafter have to the laying of the venue of any
suit, action or proceeding arising out of or relating to this Agreement brought
in any court of competent jurisdiction in the State of New Jersey, and hereby
further irrevocably waives any claim that any such suit, action or proceeding
brought in any such court has been brought in any inconvenient forum. No suit,
action or proceeding against the Company with respect to this Agreement may be
brought in any court, domestic or foreign, or before any similar domestic or
foreign authority other than in a court of competent jurisdiction in the State
of New Jersey, and the Optionee hereby irrevocably waives any right which he may
otherwise have had to bring such an action in any other court, domestic or
foreign,
<PAGE>
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14 EXHIBIT 10(g)
FORM 10-Q for the Quarter
Ended September 30, 1996
or before any similar domestic or foreign authority. The Company hereby submits
to the jurisdiction of such courts for the purpose of any such suit, action or
proceeding.
IN WITNESS WHEREOF, this Agreement has been executed and delivered by the
parties hereto.
AT&T CAPITAL CORPORATION
By: __________________________
Name:
Title:
Aggregate number of shares
of Common Stock for which
the option hereunder is granted:
- -------------------------------
Optionee
- -------------------------------
- -------------------------------
Address
Optionee's Taxpayer
Identification Number:
<PAGE>
<PAGE>
1 EXHIBIT 10(h)
FORM 10-Q for the Quarter
Ended September 30, 1996
1996 LONG TERM INCENTIVE PLAN
1. Purpose of Plan
The AT&T Capital Corporation 1996 Long Term Incentive Plan (the "Plan") is
designed:
(a) to promote the long term financial interests and growth of AT&T Capital
Corporation (the "Corporation") and its subsidiaries (the "Subsidiaries") by
attracting and retaining employees with the training, experience and ability to
enable them to make a substantial contribution to the success of the
Corporation's business;
(b) to motivate selected employees by means of growth-related incentives to
achieve long range goals; and
(c) to further the identity of interests of participants with those of the
stockholders of the Corporation through opportunities for increased stock, or
stock-based, ownership in the Corporation.
2. Definitions
As used in the Plan, the following words shall have the following meanings:
(a) "Board of Directors" means the Board of Directors of the Corporation.
(b) "Committee" means the Compensation Committee of the Board of Directors
(c) "Common Stock" or "Share" means common stock of the Corporation which may be
authorized but unissued or issued and reacquired.
(d) "Exchange Act" means the Securities Exchange Act of 1934, as amended.
(e) "Fair Market Value" means, with respect to a share of Common Stock, (i)
prior to an IPO, the amount established at the immediately preceding
determination, which determination will have been made not less than annually,
by an independent U.S.-based investment banker (or, in the sole discretion of
the Board of Directors, an independent U.S.-based appraisal firm) selected by
the Board of Directors, as the fair market value of a Share without giving
effect to any discount attributable to the illiquidity of the Shares or the fact
that any such Shares may constitute a minority interest in the Corporation or
any premium attributable to any special rights of any holder with respect to its
Shares; provided that prior to the first such determination, Fair Market Value
shall the amount determined in good faith by the Committee and (ii) after an
IPO, the value of a Share as reported for stock exchange transactions and/or
determined in accordance with any applicable resolutions or regulations of the
Committee or the Board of Directors in effect at the relevant time.
Notwithstanding the foregoing, a Grant Agreement may set forth a more specific
or a different definition of "Fair Market Value" for the purpose or purposes set
forth in such Grant Agreement.
(f) "Grant" means an award made to a Participant pursuant to the Plan and
<PAGE>
<PAGE>
2 EXHIBIT 10(h)
FORM 10-Q for the Quarter
Ended September 30, 1996
described in Paragraph 5, including, without limitation, an award of an
Incentive Stock Option, Stock Option, Stock Appreciation Right, Dividend
Equivalent Right, Restricted Stock, Purchase Stock, Performance Units,
Performance Shares or other Stock-Based Grant or any combination of the
foregoing.
(g) "Grant Agreement" means an agreement between the Corporation and a
Participant that sets forth the terms, conditions and limitations applicable to
a Grant.
(h) "IPO" means a sale of Shares to the public that results in an active trading
market in the Shares.
(i) "Member" means a person, including an officer, in the regular full-time
employment of the Corporation or one of its Subsidiaries.
(i) "Participant" means a Member, a non-employee director of the Corporation or
one of its Subsidiaries, or other person having a unique relationship with the
Corporation or one of its Subsidiaries, to whom one or more Grants have been
made and such Grants have not all been forfeited or terminated under the Plan.
(k) "Stock-Based Grants" means the collective reference to the grant of Stock
Appreciation Rights, Dividend Equivalent Rights, Restricted Stock, Performance
Units, Performance Shares and Other Stock Based Grants.
(1) "Stock Options" means the collective reference to "Incentive Stock Options"
and "Other Stock Options".
(m) "Subsidiary" means any corporation other than the Corporation in an unbroken
chain of corporations beginning with the Corporation if each of the corporations
other than the last corporation in the unbroken chain owns 50% or more of the
voting stock in one of the other corporations in such chain.
3. Administration of Plan
(a) The Plan shall be administered by the Committee. The Committee may adopt its
own rules of procedure, and the action of a majority of the Committee, taken at
a meeting or taken without a meeting by a writing signed by such majority, shall
constitute action by the Committee. The Committee shall have the power and
authority to administer, construe and interpret the Plan, to make rules for
carrying it out and to make changes in such rules. Any such interpretations,
rules, and administration shall be consistent with the basic purposes of the
Plan.
(b) The Committee may employ attorneys, consultants, accountants, appraisers,
brokers or other persons. The Committee, the Corporation, and the officers and
directors of the Corporation shall be entitled to rely upon the advice, opinions
or valuations of any such persons. All actions taken and all interpretations and
determinations made by the Committee in good faith shall be final and binding
upon all Participants, the Corporation and all other interested persons. No
member of the Committee shall be personally liable for any action, determination
or interpretation made in good faith with respect to the Plan or the Grants, and
all members
<PAGE>
<PAGE>
3 EXHIBIT 10(h)
FORM 10-Q for the Quarter
Ended September 30, 1996
the Committee shall be fully protected by the Corporation with respect to any
such action, determination or interpretation.
(c) In its absolute discretion, the Board may at any time and from time to time
exercise any and all rights and duties of the Committee under the Plan.
4. Eligibility
The Committee may from time to time make Grants under the Plan to such
Members, or other persons having a unique relationship with the Corporation or
any of its Subsidiaries, and in such form and having such terms, conditions and
limitations as the Committee may determine. Grants may be granted singly, in
combination or in tandem. The terms, conditions and limitations of each Grant
under the Plan shall be set forth in a Grant Agreement, in a form approved by
the Committee, consistent, however, with the terms of the Plan; provided,
however, such Grant Agreement shall contain provisions dealing with the
treatment of Grants in the event of the termination, death or disability of a
Participant, and may also include provisions concerning the treatment of Grants
in the event of a change of control of the Corporation.
5. Grants
From time to time, the Committee will determine the forms and amounts of
Grants for Participants. Such Grants may take the following forms in the
Committee's sole discretion:
(a) Incentive Stock Options - These are stock options within the meaning of
Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"), to
purchase Common Stock. In addition to other restrictions contained in the Plan,
an option granted under this Paragraph 5(a), (i) may not be exercised less than
6 months or more than 10 years after the date it is granted, (ii) may not have
an option price less than the fair market value (as defined under the Code) of
Common Stock on the date the option is granted, (iii) must otherwise comply with
Section 422 of the Code and (iv) must be designated as an "Incentive Stock
Option" by the Committee. The maximum aggregate fair market value of Common
Stock (determined at the time of each Grant) with respect to which any
Participant may first exercise Incentive Stock Options under this Plan and any
Incentive Stock Options granted to the Participant for such year under any other
plans of the Corporation or any Subsidiary in any calendar year is $100,000.
Payment of the option price shall be made in cash or in shares of Common Stock,
or a combination thereof, in accordance with the terms of the Plan, the Grant
Agreement, and of any applicable guidelines of the Committee in effect at the
time.
(b) Other Stock Options - These are options to purchase Common Stock which are
not designated by the Committee as "Incentive Stock Options." At the time of the
Grant the Committee shall determine, and shall have contained in the Grant
Agreement or other Plan rules, the option exercise period, the option price, and
such other conditions or restrictions on the Grant or exercise of the Other
Stock Option as the Committee deems appropriate, which may include the
requirement that the Grant of Other Stock Options is predicated on the
acquisition of Purchase Stock under Paragraph 5(e) by the
<PAGE>
<PAGE>
4 EXHIBIT 10(h)
FORM 10-Q for the Quarter
Ended September 30, 1996
Participant. In addition to other restrictions contained in the Plan, an option
granted under this Paragraph 5(b) may not be exercised less than 6 months or
more than 11 years after the date it is granted (or, if such Option is not then
exercisable in accordance with the applicable Grant Agreement or other Plan
rules, such later date that is 60 days following the date on which such option
shall have become exercisable). Payment of the option price shall be made in
cash or in shares of Common Stock, or a combination thereof in accordance with
the terms of the Plan and of any applicable guidelines of the Committee in
effect at the time.
(c) Stock Appreciation Rights - These are rights that on exercise entitle the
holder to receive the excess of (i) the Fair Market Value of a Share on the date
of exercise over (ii) the Fair Market Value of a Share on the date of Grant (the
"base value") multiplied by (iii) the number of rights exercised as determined
by the Committee. Stock Appreciation Rights granted under the Plan may, but need
not be, granted in conjunction with an Option under Paragraph 5 (a) or 5 (b) .
The Committee, in the Grant Agreement or by other Plan rules, may impose such
conditions or restrictions on the exercise of Stock Appreciation Rights as it
deems appropriate, and may terminate, amend, or suspend such Stock Appreciation
Rights at any time. No Stock Appreciation Right granted under this Plan may be
exercised less than 6 months or more than 11 years after the date it is granted
(or, if such Stock Appreciation Right is not then exercisable in accordance with
the applicable Grant Agreement or other Plan rules, such later date that is 60
days following the date on such Stock Appreciation Right shall have become
exercisable). To the extent that any Stock Appreciation Right that shall have
become exercisable, but shall not have been exercised or canceled or, by reason
of any termination of employment, become nonexercisable, such right shall be
deemed to have been exercised automatically, without any notice of exercise, on
the last day on which it is exercisable, provided that any conditions or
limitations on its exercise are satisfied (other than (i) notice of exercise and
(ii) exercise or election to exercise during the period prescribed) and the
Stock Appreciation Right shall then have value. Such exercise shall be deemed to
specify that the holder elects to receive cash and that such exercise of a Stock
Appreciation Right shall be effective as of the time of automatic exercise.
(d) Restricted Stock - Restricted Stock is Common Stock delivered to a
Participant with or without payment of consideration with restrictions or
conditions on the Participant's right to transfer or sell such stock; provided
that the price of any Restricted Stock delivered for consideration and not as
bonus stock may not be less than the par value. If a Participant irrevocably
elects in writing in the calendar year preceding a Grant of Restricted Stock,
dividends paid on the Restricted Stock granted may be paid in shares of
Restricted. Stock equal to the cash dividend paid on Common Stock. The number of
shares of Restricted Stock and the restrictions or conditions on such shares
shall be as the Committee determines, in the Grant Agreement or by other Plan
rules, and the certificate for the Restricted Stock shall bear evidence of the
restrictions or conditions. No Restricted Stock may have a restriction period of
less than 6 months, other than in the case of death or disability.
(e) Purchase Stock.- Purchase Stock are shares of Common Stock offered to a
<PAGE>
<PAGE>
5 EXHIBIT 10(h)
FORM 10-Q for the Quarter
Ended September 30, 1996
Participant at such price as determined by the Committee, the acquisition
of which will make the Participant eligible to receive Grants under the Plan of
(including, but not limited to) Other Stock Options; provided, however, that the
price of such Purchase Shares may not be less than the par value.
(f) Dividend Equivalent Rights - These are rights to receive cash payments from
the Corporation at the same time and in the same amount as any cash dividends
paid on an equal number of shares of Common Stock to shareholders of record
during the period such rights are effective. The Committee, in the Grant
Agreement or by other Plan rules, may impose such restrictions and conditions on
the Dividend Equivalent Rights, including the date such rights will terminate,
as it deems appropriate, and may terminate, amend, or suspend such Dividend
Equivalent Rights at any time.
(g) Performance Units - These are rights to receive at a specified future date,
payment in cash of an amount equal to all or a portion of the value of a unit
granted by the Committee. At the time of the Grant, in the Grant Agreement or by
other Plan rules, the Committee must determine the base value of the unit, the
performance factors applicable to the determination of the ultimate payment
value of the unit and the period over which the performance of the Corporation
will be measured. These factors must include a minimum performance standard for
the Corporation below which no payment will be made and a maximum performance
level above which no increased payment will be made. The term over which the
performance of the Corporation will be measured shall be not less than 6 months.
(h) Performance Shares - These are rights to receive at a specified future date,
payment in cash or Common Stock, as determined by the Committee, of an amount
equal to all or a portion of the Fair Market Value of a specified number of
shares of Common Stock for all days that such Common Stock is traded during the
last 45 days of a specified period of performance, at the end of, and based upon
the performance of the Corporation during, such period. At the time of the
Grant, the Committee, in the Grant Agreement or by Plan rules, will determine
the factors which will govern the portion of the rights so payable and the
period over which the performance of the Corporation will be measured. The
factors will be based on the performance of the Corporation and must include a
minimum performance standard for the Corporation below which no payment will be
made and a maximum performance level above which no increased payment will be
made. The term over which the performance of the Corporation will be measured
shall be not less than six months. Performance Shares will be granted for no
consideration.
(i) Other Stock-Based Grants - The Committee may make other Grants under the
Plan pursuant to which shares of Common Stock (which may, but need not, be
shares of Restricted Stock pursuant to Paragraph 5 (d) ) are or may in the
future be acquired, or Grants denominated in stock units, including ones valued
using measures other than market value. Other Stock-Based Grants may be granted
with or without consideration; provided, however, that the price of any such
Grant made for consideration that provides for the acquisition of shares of
Common Stock or other equity securities of the Corporation may not be less than
the par value, if any, of the Common Stock or such other equity securities. Such
Other Stock-Based Grants may be made alone, in addition to or in tandem with any
Grant of any type made under the Plan and must be consistent with the purposes
of the Plan.
<PAGE>
<PAGE>
6 EXHIBIT 10(h)
FORM 10-Q for the Quarter
Ended September 30, 1996
6. Limitations and Conditions
(a) The number of Shares available for Grants under this Plan shall be
[15,000,0001 shares of the authorized Common Stock as of the effective date of
the Plan. The number of Shares subject to Grants under this Plan to any one
Participant shall not be more than [1,000,000] shares. Unless restricted by
applicable law, Shares related to Grants that are forfeited, terminated,
canceled or expire unexercised, shall immediately become available for Grants.
(b) No Grants shall be made under the Plan beyond ten years after the effective
date of the Plan (the "Plan Expiration Date"), but the terms of Grants made on
or before the Plan Expiration Date may extend beyond such Plan Expiration Date
as specified in the applicable Grant Agreement. At the time a Grant is made or
amended or the terms or conditions of a Grant are changed, the Committee may
provide for limitations or conditions on such Grant.
(c) Nothing contained herein shall affect the right of the Corporation to
terminate any Participant's employment at any time or for any reason.
(d) Deferrals of Grant payouts may be provided for, at the sole discretion of
the Committee, in the Grant Agreements.
(e) Except as otherwise prescribed by the Committee, to the extent that any cost
or expense is or should be recognized for either financial accounting or income
tax purposes, the amounts of the Grants for any employee of a Subsidiary, along
with interest, dividend, and other expenses accrued on deferred Grants shall be
charged to the Participant's employer during the period for which the Grant is
made. If the Participant is employed by more than one Subsidiary or by both the
Corporation and a Subsidiary during the period for which the Grant is made, the
Participant's Grant and related expenses, if any, will be allocated between the
companies employing the Participant in a manner prescribed by the Committee.
(f) Other than as specifically provided with regard to the death of a
Participant, no benefit under the Plan shall be subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, or
charge, and any attempt to do so shall be void. No such benefit shall, prior to
receipt thereof by the Participant, be in any manner liable for or subject to
the debts, contracts, liabilities, engagements, or torts of the Participant.
(g) Participants shall not be, and shall not have any of the rights or
privileges of, stockholders of the Corporation in respect of any Shares
purchasable in connection with any Grant unless and until certificates
representing any such Shares have been. or are required to be, issued by the
Corporation to such Participants.
(h) No election as to benefits or exercise of Stock Options or Stock-Based
Grants may be made during a Participant's lifetime by anyone other than the
Participant except by a legal representative appointed for or by the
Participant.
<PAGE>
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7 EXHIBIT 10(h)
FORM 10-Q for the Quarter
Ended September 30, 1996
(i) Absent express provisions to the contrary, any Grant under this Plan shall
not be deemed compensation to the Participant for purposes of computing benefits
or contributions under any retirement plan of the Corporation or its
Subsidiaries and shall not affect any benefits under any other benefit plan of
any kind or subsequently in effect under which the availability or amount of
benefits is related to the Participant's level of compensation. This Plan is not
a "retirement plan" or "welfare plan" under the Employee Retirement Income
Security Act of 1974, as amended.
(j) Unless the Committee determines otherwise, no benefit or promise under the
Plan shall be secured by any specific assets of the Corporation or any of its
Subsidiaries, nor shall any assets of the Corporation or any of its Subsidiaries
be designated as attributable or allocated to the satisfaction of the
Corporation's obligations under the Plan.
7. Financial Assistance
If the Committee determines that such action is advisable, the Corporation
may assist any Participant to whom a Grant has been made under the Plan in
obtaining financing from the Corporation or a Subsidiary or from a bank or other
third party, on such terms as are determined by the Committee, and in such
amount as is required to accomplish the purposes of the Plan, including, but not
limited to, to purchase Restricted Stock or Purchase Stock, to permit the
exercise of a Stock Option, the participation therein, and/or the payment of any
taxes in respect thereof. Such assistance may take any form that the Committee
deems appropriate, including, but not limited to, a direct loan from the
Corporation or a Subsidiary, a guarantee of the obligation by the Corporation or
a Subsidiary, or the maintenance by the Corporation or a Subsidiary of deposits
with such bank or third party.
8. Transfers and Leaves of Absence
For purposes of the Plan, unless the Committee determines otherwise: (a)
a transfer of a Participant's employment to a Subsidiary without an intervening
period of separation among the Corporation and any Subsidiary shall not be
deemed a termination of employment, and (b) a Participant who is granted in
writing a leave of absence shall be deemed to have remained in the employ of the
Corporation during such leave of absence.
9. Adjustments
In the event of any change in the outstanding Common Stock by reason of
a stock split, spin-off, stock dividend, stock combination or reclassification,
recapitalization or merger, change of control, or similar event, the Committee
may adjust appropriately the number of Shares subject to the Plan and available
for or covered by Grants and Share prices related to outstanding Grants and make
such other revisions to outstanding Grants as it deems are equitably required.
10. Merger, Consolidation, Exchange, Acquisition, Liquidation Dissolution
In its absolute discretion, and on such terms and conditions as it deems
appropriate, coincident with or after the grant of any Stock Option or any
Stock-Based Grant (but after a Grant, subject to the terms of any
<PAGE>
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8 EXHIBIT 10(h)
FORM 10-Q for the Quarter
Ended September 30, 1996
relevant Grant Agreement), the Committee may provide that such Stock Option or
Stock-Based Grant cannot be exercised after the merger or consolidation of the
Corporation into another corporation, the exchange of all or substantially all
of the assets of the Corporation for the securities of another corporation, the
acquisition by another corporation of a specified percentage or more of the
Corporation's then outstanding shares of voting stock or the recapitalization,
reclassification, liquidation or dissolution of the Corporation, and if the
Committee so provides, it shall, on such terms and conditions as it deems
appropriate in its absolute discretion (but after a Grant, subject to the terms
of any relevant Grant Agreement) , also provide, either by the terms of such
Stock Option or Stock-Based Grant or by a resolution adopted prior to the
occurrence of such merger, consolidation, exchange, acquisition,
recapitalization, reclassification, liquidation or dissolution, that, for some
period of time prior to such event, such Stock Option or Stock-Based Grant shall
be exercisable as to all shares subject thereto, notwithstanding anything to the
contrary herein (but subject to the provisions of Paragraph 6(b)) and that, upon
the occurrence of such event, such Stock Option or Stock-Based Grant shall
terminate and be of no further force or effect; provided, however, that the
Committee may also provide, in its absolute discretion, that even if the Stock
Option or Stock-Based Grant shall remain exercisable after any such event, from
and after such event, any such Stock Option or Stock-Based Grant shall be
exercisable only for the kind and amount of securities and/or other property, or
the cash equivalent thereof, receivable as a result of such event by the holder
of a number of shares of stock for which such Stock Option or Stock-Based Grant
could have been exercised immediately prior to such event.
11. Amendment and Termination
The Committee shall have the authority to make such amendments to any terms
and conditions applicable to outstanding Grants as are consistent with this Plan
provided that, except for adjustments under Paragraph 9 or 10 hereof, no such
action shall modify such Grant in a manner adverse to the Participant without
the Participant's consent unless such modification is provided for or
contemplated in the terms of the Grant Agreement.
The Board of Directors may amend, suspend or terminate the Plan except that
no such action, other than an action under Paragraph 9 or 10 hereof, may be
taken which would, without shareholder approval, increase the aggregate number
of Shares available for Grants under the Plan, decrease the price of outstanding
Stock Options or Stock Appreciation Rights, change the requirements relating to
the Committee or extend the term of the Plan.
12. Foreign Options and Rights
The Committee may make Grants to Members who are subject to the laws of
nations other than the United States, which Grants may have terms and conditions
that differ from the terms thereof as provided elsewhere in the Plan for the
purpose of complying with foreign laws and practices.
13. Withholding Taxes
The Corporation shall have the right to deduct from any cash payment
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9 EXHIBIT 10(h)
FORM 10-Q for the Quarter
Ended September 30, 1996
made under the Plan any federal, state or local income or other taxes required
by law to be withheld with respect to such payment, the amount of any such taxes
to be determined by the Corporation in its absolute discretion. It shall be a
condition to the obligation of the Corporation to deliver Shares upon the
exercise of a Stock Option or Stock Appreciation Right, upon payment of
Performance Units or Performance Shares, upon delivery of Restricted Stock or
upon exercise, settlement or payment of any Other Stock-Based Grant, that the
Participant pay to the Corporation such amount as may be requested by the
Corporation for the purpose of satisfying any liability for such withholding
taxes. Any Grant Agreement may provide that the Participant may elect, in
accordance with any conditions set forth in such Grant Agreement, to pay a
portion or all of such withholding taxes in shares of Common Stock.
14. Effective Date and Termination Dates
The Plan shall be effective on and as of the date of its approval by the
stockholders of the Corporation and shall terminate ten years later, subject to
earlier termination by the Board of Directors pursuant to Paragraph 11.
<PAGE>
<PAGE>
$800,000,000
CREDIT AGREEMENT
dated as of
September 16, 1996
among
AT&T Capital Corporation
The Banks Listed Herein
and
Morgan Guaranty Trust Company of New York,
as Agent
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TABLE OF CONTENTS
<TABLE>
<S> <C>
ARTICLE I
SECTION 1.01. Definitions.........................................................1
SECTION 1.02. Accounting Terms and Determinations................................16
SECTION 1.03. Types of Borrowings................................................16
SECTION 1.04. Basis for Ratings..................................................17
ARTICLE II
SECTION 2.01. Commitments to Lend................................................17
SECTION 2.02. Notice of Committed Borrowing......................................17
SECTION 2.03. Money Market Borrowings............................................18
SECTION 2.04. Notice to Banks; Funding of Loans..................................22
SECTION 2.05. Notes..............................................................23
SECTION 2.06. Maturity of Loans; Termination of Commitments......................24
SECTION 2.07. Interest Rates.....................................................24
SECTION 2.08. Facility Fees......................................................28
SECTION 2.09. Optional Termination or Reduction of Commitments...................28
SECTION 2.10. Method of Electing Interest Rates..................................29
SECTION 2.11. Optional Prepayments...............................................30
SECTION 2.12. General Provisions as to Payments..................................31
SECTION 2.13. Funding Losses.....................................................32
SECTION 2.14. Computation of Interest and Fees...................................33
SECTION 2.15. Regulation D Compensation..........................................33
ARTICLE III
SECTION 3.01. Effectiveness......................................................34
SECTION 3.02. Borrowings.........................................................35
ARTICLE IV
SECTION 4.01. Corporate Existence and Power......................................36
SECTION 4.02. Corporate and Governmental Authorization; No Contravention.........36
SECTION 4.03. Binding Effect.....................................................36
SECTION 4.04. Financial Information..............................................37
SECTION 4.05. Litigation.........................................................37
SECTION 4.06. Subsidiaries.......................................................37
SECTION 4.07. Not an Investment Company..........................................38
SECTION 4.08. Full Disclosure....................................................38
ARTICLE V
SECTION 5.01. Information........................................................38
SECTION 5.02. Maintenance of Existence...........................................39
SECTION 5.03. Interest Coverage..................................................40
</TABLE>
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<TABLE>
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SECTION 5.04. Debt...............................................................40
SECTION 5.05. Minimum Consolidated Tangible Net Worth............................40
SECTION 5.06 Restricted Payments.................................................40
SECTION 5.07 Negative Pledge.....................................................40
SECTION 5.08. Consolidations, Mergers and Sales of Assets........................43
SECTION 5.09. Use of Proceeds....................................................44
ARTICLE VI
SECTION 6.01. Events of Default..................................................44
SECTION 6.02. Notice of Default..................................................47
SECTION 6.03. Rescission.........................................................47
ARTICLE VII
SECTION 7.01. Appointment and Authorization......................................48
SECTION 7.02. Agent and Affiliates...............................................48
SECTION 7.03. Action by Agent....................................................48
SECTION 7.04. Consultation with Experts..........................................48
SECTION 7.05. Liability of Agent.................................................48
SECTION 7.06. Indemnification....................................................49
SECTION 7.07. Credit Decision....................................................49
SECTION 7.08. Successor Agent....................................................49
SECTION 7.09. Agent's Fee........................................................50
ARTICLE VIII
SECTION 8.01. Basis for Determining Interest Rate Inadequate or Unfair...........50
SECTION 8.02. Illegality.........................................................51
SECTION 8.03. Increased Cost and Reduced Return..................................51
SECTION 8.04. Taxes..............................................................53
SECTION 8.05. Base Rate Loans Substituted for Affected Fixed Rate Loans..........56
SECTION 8.06. Substitution of Bank...............................................57
SECTION 8.07. Compensation.......................................................57
ARTICLE IX
SECTION 9.01. Notices............................................................58
SECTION 9.02. No Waivers.........................................................58
SECTION 9.03. Expenses; Indemnification..........................................58
SECTION 9.04. Sharing of Set-Offs................................................59
SECTION 9.05. Amendments and Waivers.............................................59
SECTION 9.06. Successors and Assigns.............................................60
SECTION 9.07. Collateral.........................................................62
SECTION 9.08. Governing Law; Submission to Jurisdiction..........................62
SECTION 9.09. Counterparts; Integration..........................................62
SECTION 9.10. WAIVER OF JURY TRIAL...............................................62
</TABLE>
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SECTION 9.11. Confidentiality....................................................62
Exhibit A - Note
Exhibit B - Money Market Quote Request
Exhibit C - Invitation for Money Market Quotes
Exhibit D - Money Market Quote
Exhibit E - Opinion of Counsel for the Borrower
Exhibit F - Opinion of Special Counsel for the Agent
Exhibit G - Assignment and Assumption Agreement
</TABLE>
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<PAGE>
CREDIT AGREEMENT
AGREEMENT dated as of September 16, 1996 among AT&T CAPITAL
CORPORATION, the BANKS party hereto and MORGAN GUARANTY TRUST COMPANY OF NEW
YORK, as Agent.
W I T N E S S E T H :
WHEREAS, the Borrower (as defined below) has heretofore entered
into a $500,000,000 Credit Agreement dated as of June 30, 1995 with the banks
parties thereto and Morgan Guaranty Trust Company of New York, as agent for such
banks (as in effect on the date hereof, the "Existing Credit Agreement"); and
WHEREAS, the Borrower wishes to enter into this Agreement to
replace the Existing Credit Agreement; and
WHEREAS, upon the effectiveness of this Agreement in accordance
with Section 3.01, the Existing Credit Agreement shall terminate;
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. The following terms, as used herein,
have the following meanings:
"Absolute Rate Auction" means a solicitation of Money Market
Quotes setting forth Money Market Absolute Rates pursuant to Section 2.03.
"Accounts Receivable" means (i) any accounts receivable (whether
or not earned by performance), chattel paper, instruments, documents, general
intangibles, trade acceptances, any other rights to receive installment, rental
or other payments for, or relating to amounts due or to become due on account
of, equipment or goods sold or leased or to be sold or leased or services
rendered or to be rendered or funds advanced or loaned or to be advanced or
loaned and other rights to payment of any kind, (ii) any proceeds of any of the
foregoing and (iii) any interest in any property or asset of any kind (whether
of the obligor
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under such Accounts Receivable or any other Person) securing the payment of any
item listed in clause (i) hereof.
"Acquisition" means the consummation of the acquisition and the
related transactions contemplated by the Agreement and Plan of Merger dated as
of June 5, 1996 among AT&T, the Borrower, Hercules Limited and Antigua
Acquisition Corporation (a true and correct copy of which, as in effect on the
date hereof, has heretofore been delivered to the Agent) substantially on the
terms described therein.
"Adjusted CD Rate" has the meaning set forth in Section 2.07(b).
"Administrative Questionnaire" means, with respect to each Bank,
an administrative questionnaire in the form prepared by the Agent and submitted
to the Agent (with a copy to the Borrower) duly completed by such Bank.
"Agent" means Morgan Guaranty Trust Company of New York in its
capacity as agent for the Banks hereunder, and its successors in such capacity.
"Applicable Lending Office" means, with respect to any Bank, (i)
in the case of its Domestic Loans, its Domestic Lending Office, (ii) in the case
of its Euro-Dollar Loans, its Euro-Dollar Lending Office and (iii) in the case
of its Money Market Loans, its Money Market Lending Office.
"Applicable Margin" has the meaning set forth in Section 2.07(h).
"Assessment Rate" has the meaning set forth in Section 2.07(b).
"Asset Drop-Down" has the meaning set forth in Section 5.08.
"Assignee" has the meaning set forth in Section 9.06(c).
"AT&T" means American Telephone and Telegraph Company, a New York
corporation, and its successors.
"Bank" means each bank listed on the signature pages hereof, each
Assignee which becomes a Bank pursuant to Section 8.06 or 9.06(c), and their
respective successors.
"Base Rate" means, for any day, a rate per annum equal to the
higher of (i) the Prime Rate for such day and
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(ii) the sum of 1/2 of 1% plus the Federal Funds Rate for such day.
"Base Rate Loan" means (i) a Committed Loan which bears interest
at the Base Rate pursuant to the applicable Notice of Committed Borrowing or
Notice of Interest Rate Election or the provisions of Article VIII or (ii) an
overdue amount which was a Base Rate Loan immediately before it became overdue.
"Borrower" means AT&T Capital Corporation, a Delaware
corporation, and its successors.
"Borrower's 1995 Form 10-K" means the Borrower's annual report on
Form 10-K for 1995, as filed with the Securities and Exchange Commission
pursuant to the Securities Exchange Act of 1934, as amended.
"Borrower's Latest Form 10-Q" means the Borrower's quarterly
report on Form 10-Q for the quarter ended June 30, 1996, as filed with the
Securities and Exchange Commission pursuant to the Securities Exchange Act of
1934, as amended.
"Borrowing" has the meaning set forth in Section 1.03.
"CD Base Rate" has the meaning set forth in Section 2.07(b).
"CD Loan" means (i) a Committed Loan which bears interest at a CD
Rate pursuant to the applicable Notice of Committed Borrowing or Notice of
Interest Rate Election or (ii) an overdue amount which was a CD Loan immediately
before it became overdue.
"CD Rate" means a rate of interest determined pursuant to Section
2.07(b) on the basis of an Adjusted CD Rate.
"CD Reference Banks" means The Chase Manhattan Bank and Morgan
Guaranty Trust Company of New York.
"Commitment" means, with respect to each Bank, the amount set
forth opposite the name of such Bank on the signature pages hereof, as such
amount may be reduced from time to time pursuant to Section 2.09 or changed
pursuant to Section 9.06(c).
"Committed Loan" means a loan made by a Bank pursuant to Section
2.01; provided that, if any such loan or
3
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<PAGE>
loans (or portions thereof) are combined or subdivided pursuant to a Notice
of Interest Rate Election, the term "Committed Loan" shall refer to the combined
principal amount resulting from such combination or to each of the separate
principal amounts resulting from such subdivision, as the case may be.
"Consolidated Debt" means at any date the Debt of the Borrower
and its Consolidated Subsidiaries of the type referred to in clauses (i), (ii),
(iv) and (vii) of the definition of "Debt", determined on a consolidated basis
as of such date; provided, however, that any recourse provided by any Person in
connection with any sale, transfer or other disposition by such Person of
Accounts Receivable or of any subsidiary of such Person substantially all the
assets of which are Accounts Receivable which constitutes a "sale" under
generally accepted accounting principles (as in effect at the time of such sale,
transfer or other disposition) shall not, in any event, constitute Consolidated
Debt.
"Consolidated EBIT" means, for any period, the sum of (i)
Consolidated Net Income for such period plus (ii) to the extent deducted in
determining such Consolidated Net Income, the sum of Consolidated Interest
Expense and the provision for income tax for such period.
"Consolidated Interest Expense" means, for any period, the
interest expense of the Borrower and its Consolidated Subsidiaries determined on
a consolidated basis for such period.
"Consolidated Net Income" means, for any period, the net income
(loss) (calculated (a) before preferred and common stock dividends and (b)
exclusive of the effect of any extraordinary or other material non-recurring
gain or loss outside the ordinary course of business) of the Borrower and its
Consolidated Subsidiaries, determined on a consolidated basis for such period.
"Consolidated Subsidiary" means at any date any Subsidiary or
other entity (including a business trust) the accounts of which would be
consolidated with those of the Borrower in its consolidated financial statements
if such statements were prepared as of such date.
"Consolidated Tangible Net Worth" means at any date the sum of
(i) consolidated stockholders' equity of the Borrower and its Consolidated
Subsidiaries, less their consolidated Intangible Assets plus (ii) the Permitted
Minority Interest Amount, all determined as of such date. For purposes of
4
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this definition "Intangible Assets" means the amount (to the extent reflected in
determining such consolidated stockholders' equity) 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 June 30, 1996 in the book value of
any asset owned by the Borrower or a Consolidated Subsidiary, (ii) all
Investments in unconsolidated Subsidiaries and all equity investments in Persons
which are not Subsidiaries and (iii) all unamortized debt discount and expense,
unamortized deferred charges, goodwill, patents, trademarks, service marks,
trade names, anticipated future benefit of tax loss carry-forwards, copyrights,
organization or developmental expenses and other intangible assets.
"D&P" means Duff & Phelps Credit Rating Co. or any successor
rating agency acceptable to the Required Banks and the Borrower.
"Debt" of any Person means at any date, without duplication, (i)
all obligations of such Person for borrowed money, (ii) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments, (iii)
all obligations of such Person to pay the deferred purchase price of property or
services, except trade accounts payable arising in the ordinary course of
business, (iv) all obligations of such Person as lessee which are capitalized in
accordance with generally accepted accounting principles, (v) all non-contingent
obligations (and, for purposes of Section 5.07 and the definitions of Material
Debt and Material Financial Obligations, all contingent obligations) of such
Person to reimburse any bank or other Person in respect of amounts paid under a
letter of credit or similar instrument, (vi) all Debt secured by a Lien on any
asset of such Person, whether or not such Debt is otherwise an obligation of
such Person, and (vii) all Debt of others guaranteed by such Person.
"Default" means any condition or event which constitutes an Event
of Default or which with the giving of notice or lapse of time or both would,
unless cured or waived, become an Event of Default.
5
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<PAGE>
"Derivatives Obligations" of any Person means all obligations of
such Person in respect of any rate swap transaction, basis swap, forward rate
transaction, commodity swap, commodity option, equity or equity index swap,
equity or equity index option, bond option, interest rate option, foreign
exchange transaction, cap transaction, floor transaction, collar transaction,
currency swap transaction, cross-currency rate swap transaction, currency option
or any other similar transaction (including any option with respect to any of
the foregoing transactions) or any combination of the foregoing transactions.
"Domestic Business Day" means any day except a Saturday, Sunday
or other day on which commercial banks in New York City are authorized or
required by law to close.
"Domestic Lending Office" means, as to each Bank, its office
located at its address set forth in its Administrative Questionnaire (or
identified in its Administrative Questionnaire as its Domestic Lending Office)
or such other office as such Bank may hereafter designate as its Domestic
Lending Office by notice to the Borrower and the Agent; provided that any Bank
may so designate separate Domestic Lending Offices for its Base Rate Loans, on
the one hand, and its CD Loans, on the other hand, in which case all references
herein to the Domestic Lending Office of such Bank shall be deemed to refer to
either or both of such offices, as the context may require.
"Domestic Loans" means CD Loans or Base Rate Loans or both.
"Domestic Reserve Percentage" has the meaning set forth in
Section 2.07(b).
"Drop-Down Subsidiary" has the meaning set forth in Section 5.08.
"Effective Date" means the date this Agreement becomes effective
in accordance with Section 3.01.
"Euro-Dollar Business Day" means any Domestic Business Day on
which commercial banks are open for international business (including dealings
in dollar deposits) in London.
"Euro-Dollar Lending Office" means, as to each Bank, its office,
branch or affiliate located at its address set forth in its Administrative
Questionnaire (or identified in its Administrative Questionnaire as its
Euro-Dollar
6
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<PAGE>
Lending Office) or such other office, branch or affiliate of such Bank as it
may hereafter designate as its Euro-Dollar Lending Office by notice to the
Borrower and the Agent.
"Euro-Dollar Loan" means (i) a Committed Loan which bears
interest at a Euro-Dollar Rate pursuant to the applicable Notice of Committed
Borrowing or Notice of Interest Rate Election or (ii) an overdue amount which
was a Euro-Dollar Loan immediately before it became overdue.
"Euro-Dollar Rate" means a rate of interest determined pursuant
to Section 2.07(c) on the basis of a London Interbank Offered Rate.
"Euro-Dollar Reference Banks" means the principal London offices
of The Fuji Bank, Limited, Royal Bank of Canada and Morgan Guaranty Trust
Company of New York.
"Euro-Dollar Reserve Percentage" means for any day that
percentage (expressed as a decimal) which is in effect on such day, as
prescribed by the Board of Governors of the Federal Reserve System (or any
successor) for determining the maximum reserve requirement for a member bank of
the Federal Reserve System in New York City with deposits exceeding five billion
dollars in respect of "Eurocurrency liabilities" (or in respect of any other
category of liabilities which includes deposits by reference to which the
interest rate on Euro-Dollar Loans is determined or any category of extensions
of credit or other assets which includes loans by a non-United States office of
any Bank to United States residents).
"Event of Default" has the meaning set forth in Section 6.01.
"Existing Credit Agreement" has the meaning set forth in the
recitals hereto.
"Federal Funds Rate" means, for any day, the rate per annum
(rounded upward, if necessary, to the nearest 1/100th of 1%) equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Domestic
Business Day next succeeding such day, provided that (i) if such day is not a
Domestic Business Day, the Federal Funds Rate for such day shall be such rate on
such transactions on the next preceding Domestic Business Day as so published on
the next succeeding Domestic Business Day, and (ii) if no such rate is so
published on such next
7
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succeeding Domestic Business Day, the Federal Funds Rate for such day shall be
the average rate quoted to Morgan Guaranty Trust Company of New York on such
day on such transactions as determined by the Agent.
"Fixed Rate Loans" means CD Loans or Euro-Dollar Loans or Money
Market Loans (excluding Money Market LIBOR Loans bearing interest at the Base
Rate pursuant to Section 8.01(a)) or any combination of the foregoing.
"Group" or "Group of Loans" means at any time a group of Loans
consisting of (i) all Committed Loans which are Base Rate Loans at such time or
(ii) all Committed Loans which are Fixed Rate Loans of the same type having the
same Interest Period at such time; provided that, if a Committed Loan of any
particular Bank is converted to or made as a Base Rate Loan pursuant to Section
8.02 or 8.05, such Loan shall be included in the same Group or Groups of Loans
from time to time as it would have been in if it had not been so converted or
made.
"Indemnitee" has the meaning set forth in Section 9.03(b).
"Initial Qualifying Preferred Securities" means the trust
preferred securities issued by Capita Preferred Trust in the form substantially
as described in the Prospectus dated as of August 30, 1996 contained in a
Registration Statement filed prior to the date hereof with the Securities and
Exchange Commission (which Registration Statement has not become effective as of
the date hereof).
"Interest Period" means: (1) with respect to each Euro-Dollar
Loan, a period commencing on the date of borrowing specified in the applicable
Notice of Borrowing or on the date specified in the applicable Notice of
Interest Rate Election and ending one, two, three or six months thereafter, as
the Borrower may elect in the applicable notice; provided that:
(a) any Interest Period which would otherwise end on a day which
is not a Euro-Dollar Business Day shall, subject to clause (c) below, be
extended to the next succeeding Euro-Dollar Business Day unless such
Euro-Dollar Business Day falls in another calendar month, in which case
such Interest Period shall end on the next preceding Euro-Dollar
Business Day;
(b) any Interest Period which begins on the last Euro-Dollar
Business Day of a calendar month (or on a
8
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day for which there is no numerically corresponding day in the calendar
month at the end of such Interest Period) shall, subject to clause (c)
below, end on the last Euro-Dollar Business Day of a calendar month; and
(c) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date.
(2) with respect to each CD Loan, a period commencing on the date of borrowing
specified in the applicable Notice of Borrowing or on the date specified in the
applicable Notice of Interest Rate Election and ending 30, 60, 90 or 180 days
thereafter, as the Borrower may elect in the applicable notice; provided that:
(a) any Interest Period which would otherwise end on a day which
is not a Euro-Dollar Business Day shall, subject to clause (b) below, be
extended to the next succeeding Euro-Dollar Business Day; and
(b) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date.
(3) with respect to each Money Market LIBOR Loan, the period commencing on the
date of borrowing specified in the applicable Notice of Borrowing and ending
such whole number of months thereafter as the Borrower may elect in accordance
with Section 2.03; provided that:
(a) any Interest Period which would otherwise end on a day which
is not a Euro-Dollar Business Day shall, subject to clause (c) below, be
extended to the next succeeding Euro-Dollar Business Day unless such
Euro-Dollar Business Day falls in another calendar month, in which case
such Interest Period shall end on the next preceding Euro-Dollar
Business Day;
(b) any Interest Period which begins on the last Euro-Dollar
Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such
Interest Period) shall, subject to clause (c) below, end on the last
Euro-Dollar Business Day of a calendar month; and
(c) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date.
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(4) with respect to each Money Market Absolute Rate Loan, the period commencing
on the date of borrowing specified in the applicable Notice of Borrowing and
ending such number of days thereafter (but not less than 7 days) as the Borrower
may elect in accordance with Section 2.03; provided that:
(a) any Interest Period which would otherwise end on a day which
is not a Euro-Dollar Business Day shall, subject to clause (b) below, be
extended to the next succeeding Euro-Dollar Business Day; and
(b) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date.
"Internal Revenue Code" means the Internal Revenue Code of 1986,
as amended, or any successor statute.
"Level I Status" exists at any date if, at such date, the
Borrower's senior unsecured long-term debt is rated A+/A1 or higher by at least
two Rating Agencies.
"Level II Status" exists at any date if, at such date, (a) the
Borrower's senior unsecured long-term debt is rated A/A2 or higher by at least
two Rating Agencies and (b) Level I Status does not exist.
"Level III Status" exists at any date if, at such date, (a) the
Borrower's senior unsecured long-term debt is rated A-/A3 or higher by at least
two Rating Agencies and (b) neither Level I Status nor Level II Status exists.
"Level IV Status" exists at any date if, at such date, (a) the
Borrower's senior unsecured long-term debt is rated BBB+/Baa1 or higher by at
least two Rating Agencies and (b) none of Level I Status through Level III
Status exists.
"Level V Status" exists at any date if, at such date, (a) the
Borrower's senior unsecured long-term debt is rated BBB/Baa2 or higher by at
least two Rating Agencies and (b) none of Level I Status through Level IV Status
exists.
"Level VI Status" exists at any date if, at such date, (a) the
Borrower's senior unsecured long-term debt is rated BBB-/Baa3 or higher by at
least two Rating Agencies and (b) none of Level I Status through Level V Status
exists.
"Level VII Status" exists at any date if, at such
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date, (a) the Borrower's senior unsecured long-term debt is rated BB+/Ba1 or
higher by at least two Rating Agencies and (b) none of Level I Status through
Level VI Status exists.
"Level VIII Status" exists at any date if, at such date, none of
Level I Status through Level VII Status exists.
"LIBOR Auction" means a solicitation of Money Market Quotes
setting forth Money Market Margins based on the London Interbank Offered Rate
pursuant to Section 2.03.
"Lien" means any mortgage, pledge, security interest or lien.
"Loan" means a Domestic Loan or a Euro-Dollar Loan or a Money
Market Loan and "Loans" means Domestic Loans or Euro-Dollar Loans or Money
Market Loans or any combination of the foregoing.
"London Interbank Offered Rate" has the meaning set forth in
Section 2.07(c).
"Material Adverse Effect" means a material adverse effect on the
consolidated financial position of the Borrower and its subsidiaries.
"Material Debt" means Debt (other than the Loans) of the Borrower
and/or one or more of its Subsidiaries, arising in one or more related or
unrelated transactions, in an aggregate principal or face amount exceeding
$100,000,000.
"Material Financial Obligations" means a principal or face amount
of Debt and/or payment obligations in respect of Derivatives Obligations of the
Borrower and/or one or more of its Subsidiaries, arising in one or more related
or unrelated transactions, exceeding in the aggregate $100,000,000.
"Money Market Absolute Rate" has the meaning set forth in Section
2.03(d).
"Money Market Absolute Rate Loan" means a loan made or to be made
by a Bank pursuant to an Absolute Rate Auction.
"Money Market Lending Office" means, as to each Bank, its
Domestic Lending Office or such other office, branch or affiliate of such Bank
as it may hereafter
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designate as its Money Market Lending Office by notice to the Borrower and the
Agent; provided that any Bank may from time to time by notice to the Borrower
and the Agent designate separate Money Market Lending Offices for its Money
Market LIBOR Loans, on the one hand, and its Money Market Absolute Rate Loans,
on the other hand, in which case all references herein to the Money Market
Lending Office of such Bank shall be deemed to refer to either or both of such
offices, as the context may require.
"Money Market LIBOR Loan" means a loan made or to be made by a
Bank pursuant to a LIBOR Auction (including such a loan bearing interest at the
Base Rate pursuant to Section 8.01(a)).
"Money Market Loan" means a Money Market LIBOR Loan or a Money
Market Absolute Rate Loan.
"Money Market Margin" has the meaning set forth in
Section 2.03(d).
"Money Market Quote" means an offer by a Bank to make a Money
Market Loan in accordance with Section 2.03.
"Moody's" means Moody's Investors Service, Inc. or any successor
rating agency acceptable to the Required Banks and the Borrower.
"Nomura Group" means Nomura Securities Co., Ltd., a Japanese
company (with its successors), and its Subsidiaries.
"Non-Recourse Debt" of the Borrower or any Restricted Subsidiary
means any indebtedness for borrowed money of the Borrower or any Restricted
Subsidiary, as the case may be, which is secured by any Lien on or payable
solely from the income and proceeds of any property (including, without limiting
the generality of such term, any intangible assets), shares of stock, other
equity interests or debt of the Borrower or such Restricted Subsidiary, as the
case may be, and which is not a general obligation of the Borrower or such
Restricted Subsidiary, as the case may be.
"Notes" means promissory notes of the Borrower, substantially in
the form of Exhibit A hereto, evidencing the obligation of the Borrower to repay
the Loans, and "Note" means any one of such promissory notes issued hereunder.
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"Notice of Borrowing" means a Notice of Committed Borrowing (as
defined in Section 2.02) or a Notice of Money Market Borrowing (as defined in
Section 2.03(f)).
"Notice of Interest Rate Election" has the meaning set forth in
Section 2.10.
"Parent" means, with respect to any Bank, any Person controlling
such Bank.
"Participant" has the meaning set forth in Section 9.06(b).
"Permitted Minority Interest Amount" means, at any date, the
lesser of (i) the sum, for each issue of Qualifying Preferred Securities, of the
excess of (x) the amount of minority interests of Consolidated Subsidiaries not
included in consolidated stockholders' equity of the Borrower, determined in
accordance with generally accepted accounting principles, attributable to such
Qualifying Preferred Securities minus (y) the aggregate principal or face amount
of securities and other obligations (including guarantees) held by the issuer of
such Qualifying Preferred Securities (or any intermediary issuer) other than (1)
securities or other obligations (including guarantees) of any intermediary
issuer (including those issued by Capita Preferred Funding L.P. to Capita
Preferred Trust in the Initial Qualifying Preferred Securities) or (2)
securities or other obligations (including guarantees) of the Borrower all
payments in respect of which are fully subordinated (including in a bankruptcy,
insolvency or similar proceeding) to the prior payment in full of all principal,
interest, fees and any other amount payable under this Agreement and (ii) 30% of
Consolidated Tangible Net Worth (determined after inclusion of the Permitted
Minority Interest Amount), each determined on such date.
"Person" means an individual, a corporation, a partnership, an
association, a limited liability company, a trust or any other entity or
organization, including a government or political subdivision or an agency or
instrumentality thereof.
"Prime Rate" means the rate of interest publicly announced by
Morgan Guaranty Trust Company of New York in New York City from time to time as
its Prime Rate.
"Qualifying Preferred Securities" means (A) the Initial
Qualifying Preferred Securities and (B) any preferred stock, limited partnership
interests, preferred
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trust certificates or other preferred equity securities, issued for financing
purposes by the Borrower or its Consolidated Subsidiaries and held by Persons
other than the Borrower and its Consolidated Subsidiaries, and reasonably
similar to the Initial Qualifying Preferred Securities, which securities
(whether described in clause (A) or clause (B)) neither have nor provide the
holders thereof (nor any Person acting on their behalf) with (i) any
required payments of the liquidation preference or other capital amount thereof
or any mandatory redemption or rights of redemption, other than solely at the
option of the issuer (other than an insolvency of the issuer), (ii) any right to
enforce against assets held by the issuer thereof, whether upon a stated date or
upon the happening of a default in payment or other contingency (other than an
insolvency of the issuer), whether or not with the passage of time, or (iii) any
conversion or rights to convert into any securities of the issuer or any other
Person other than into common stock or other Qualifying Preferred Securities of
such issuer, in any case prior to December 31, 2001.
"Quarterly Date" means the last Euro-Dollar Business Day of each
March, June, September and December.
"Rating Agencies" means D&P, Moody's and S&P.
"Reference Banks" means the CD Reference Banks or the Euro-Dollar
Reference Banks, as the context may require, and "Reference Bank" means any one
of such Reference Banks.
"Regulation U" means Regulation U of the Board of Governors of
the Federal Reserve System, as in effect from time to time.
"Required Banks" means at any time Banks having at least 51% of
the aggregate amount of the Commitments or, if the Commitments shall have been
terminated, holding Notes evidencing at least 51% of the aggregate unpaid
principal amount of the Loans.
"Restricted Payment" means (i) any dividend or other distribution
on any shares of the Borrower's capital stock, including, without limitation,
preferred stock (except dividends payable solely in shares of such capital
stock) or (ii) any payment on account of the purchase, redemption, retirement or
acquisition of (a) any shares of the Borrower's capital stock, including,
without limitation, preferred stock, or (b) any option, warrant or other right
to acquire shares of the Borrower's capital stock, including, without
limitation, preferred stock.
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"Restricted Subsidiary" means each Subsidiary organized under the
laws of any State of the United States or the District of Columbia no
substantial portion of the business of which is carried on outside of the United
States; provided that each Drop-Down Subsidiary shall be a Restricted
Subsidiary.
"S&P" means Standard & Poor's Ratings Services or any successor
rating agency acceptable to the Required Banks and the Borrower.
"Status" means, at any date, whichever of Level I Status, Level
II Status, Level III Status, Level IV Status, Level V Status, Level VI Status,
Level VII Status or Level VIII Status exists at such date.
"Subsidiary" means any corporation or other entity of which
securities or other ownership interests (whether directly or indirectly in
connection with contract rights) having ordinary voting power to elect a
majority of the board of directors or other persons performing similar functions
are at the time directly or indirectly owned by the Borrower (or, if such term
is used with reference to any other Person, by such other Person).
"Termination Date" means September 15, 2001, or, if such day is
not a Euro-Dollar Business Day, the next preceding Euro-Dollar Business Day.
"United States" means the United States of America, including the
States thereof and the District of Columbia, but excluding its territories and
possessions.
"Usage" means at any date the percentage equivalent of a fraction
(i) the numerator of which is the aggregate outstanding principal amount of the
Loans at such date, after giving effect to any borrowing or payment on such
date, and (ii) the denominator of which is the aggregate amount of the
Commitments at such date. If for any reason any Loans remain outstanding after
termination of the Commitments, the Usage for each date on or after the date of
such termination shall be deemed to be greater than 50%.
"Voting Power" means, with respect to any outstanding capital
stock of the Borrower, the power (expressed as a percentage) represented by such
capital stock of the aggregate voting power of all outstanding shares of any
class of capital stock of the Borrower having
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ordinary voting power, including the power to vote for election of the members
of the Board of Directors (and, if any class thereof has power to designate
members of the Board of Directors or any special committee thereof, the power so
to designate).
"Wholly-Owned Restricted Subsidiary" means any Restricted
Subsidiary all of the shares of capital stock or other ownership interests of
which (except directors' qualifying shares) are at the time directly or
indirectly owned by the Borrower.
SECTION 1.02. Accounting Terms and Determinations. Unless
otherwise specified herein, all accounting terms used herein shall be
interpreted, all accounting determinations hereunder shall be made, and all
financial statements required to be delivered hereunder shall be prepared in
accordance with United States generally accepted accounting principles as in
effect from time to time, applied on a basis consistent (except for changes made
in consultation with the Borrower's independent public accountants) with the
most recent audited consolidated financial statements of the Borrower and its
Consolidated Subsidiaries delivered to the Banks; provided that, if the Borrower
notifies the Agent that the Borrower wishes to amend any covenant in Article V
to eliminate the effect of any change in generally accepted accounting
principles on the operation of such covenant (or if the Agent notifies the
Borrower that the Required Banks wish to amend Article V for such purpose), then
the Borrower's compliance with such covenant shall be determined on the basis of
generally accepted accounting principles in effect immediately before the
relevant change in generally accepted accounting principles became effective,
until either such notice is withdrawn or such covenant is amended in a manner
satisfactory to the Borrower and the Required Banks.
SECTION 1.03. Types of Borrowings. The term "Borrowing" denotes
the aggregation of Loans of one or more Banks to be made to the Borrower
pursuant to Article II on the same date, all of which Loans are of the same type
(subject to Article VIII) and, except in the case of Base Rate Loans, have the
same Interest Period or initial Interest Period. Borrowings are classified for
purposes of this Agreement either by reference to the pricing of Loans
comprising such Borrowing (e.g., a "Euro-Dollar Borrowing" is a Borrowing
comprised of Euro-Dollar Loans) or by reference to the provisions of Article II
under which participation therein is determined (i.e., a "Committed Borrowing"
is a Borrowing under Section 2.01 in which all
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Banks participate in proportion to their Commitments, while a "Money Market
Borrowing" is a Borrowing under Section 2.03 in which the Bank participants are
determined on the basis of their bids in accordance therewith).
SECTION 1.04. Basis for Ratings. The credit ratings to be
utilized in the determination of a Status are the ratings assigned to unsecured
obligations of the Borrower without third party credit support. Ratings assigned
to any obligation which is secured or which has the benefit of third party
credit support shall be disregarded.
ARTICLE II
THE CREDITS
SECTION 2.01. Commitments to Lend. Each Bank severally agrees, on
the terms and conditions set forth in this Agreement, to make loans to the
Borrower pursuant to this Section from time to time on and after the Effective
Date and prior to the Termination Date in amounts such that the aggregate
principal amount of Committed Loans by such Bank at any one time outstanding
shall not exceed the amount of its Commitment. Each Borrowing under this Section
shall be in an aggregate principal amount of $50,000,000 or any larger multiple
of $5,000,000 (except that any such Borrowing may be in the aggregate amount
available in accordance with Section 3.02(b)) and shall be made from the several
Banks ratably in proportion to their respective Commitments. Within the
foregoing limits, the Borrower may borrow under this Section, prepay Loans to
the extent permitted by Section 2.11, and reborrow at any time prior to the
Termination Date.
SECTION 2.02. Notice of Committed Borrowing. The Borrower shall
give the Agent notice (a "Notice of Committed Borrowing") not later than 10:30
A.M. (New York City time) on (x) the date of each Base Rate Borrowing, (y) the
second Domestic Business Day before each CD Borrowing and (z) the third
Euro-Dollar Business Day before each Euro-Dollar Borrowing, specifying:
(a) the date of such Borrowing, which shall be a Domestic
Business Day in the case of a Domestic Borrowing or a Euro-Dollar
Business Day in the case of a Euro-Dollar Borrowing,
(b) the aggregate amount of such Borrowing,
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(c) whether the Loans comprising such Borrowing are to bear
interest initially at the Base Rate or at a CD Rate or a Euro-Dollar
Rate, and
(d) in the case of a Fixed Rate Borrowing, the duration of the
initial Interest Period applicable thereto, subject to the provisions of
the definition of Interest Period.
SECTION 2.03. Money Market Borrowings.
(a) The Money Market Option. In addition to Committed Borrowings
pursuant to Section 2.01, the Borrower may, as set forth in this Section,
request the Banks to make offers to make Money Market Loans to the Borrower
prior to the Termination Date. The Banks may, but shall have no obligation to,
make such offers and the Borrower may, but shall have no obligation to, accept
any such offers in the manner set forth in this Section.
(b) Money Market Quote Request. When the Borrower wishes to
request offers to make Money Market Loans under this Section, it shall transmit
to the Agent by telex or facsimile transmission a Money Market Quote Request
substantially in the form of Exhibit B hereto so as to be received no later than
10:30 A.M. (New York City time) on (x) the fourth Euro-Dollar Business Day prior
to the date of Borrowing proposed therein, in the case of a LIBOR Auction or (y)
the Domestic Business Day next preceding the date of Borrowing proposed therein,
in the case of an Absolute Rate Auction (or, in either case, such other time or
date as the Borrower and the Agent shall have mutually agreed and shall have
notified to the Banks not later than the date of the Money Market Quote Request
for the first LIBOR Auction or Absolute Rate Auction for which such change is to
be effective) specifying:
(i) the proposed date of Borrowing, which shall be a
Euro-Dollar Business Day in the case of a LIBOR Auction or a
Domestic Business Day in the case of an Absolute Rate Auction,
(ii) the aggregate amount of such Borrowing, which shall
be $5,000,000 or a larger multiple of $1,000,000,
(iii) the duration of the Interest Period applicable
thereto, subject to the provisions of the definition of Interest
Period, and
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(iv) whether the Money Market Quotes requested are to set
forth a Money Market Margin or a Money Market Absolute Rate.
The Borrower may request offers to make Money Market Loans for more than one
Interest Period in a single Money Market Quote Request. No Money Market Quote
Request shall be given within five Euro-Dollar Business Days (or such other
number of days as the Borrower and the Agent may agree) of any other Money
Market Quote Request.
(c) Invitation for Money Market Quotes. Promptly upon receipt of
a Money Market Quote Request, the Agent shall send to the Banks by telex or
facsimile transmission an Invitation for Money Market Quotes substantially in
the form of Exhibit C hereto, which shall constitute an invitation by the
Borrower to each Bank to submit Money Market Quotes offering to make the Money
Market Loans to which such Money Market Quote Request relates in accordance with
this Section.
(d) Submission and Contents of Money Market Quotes. (i) Each Bank
may submit a Money Market Quote containing an offer or offers to make Money
Market Loans in response to any Invitation for Money Market Quotes. Each Money
Market Quote must comply with the requirements of this subsection (d) and must
be submitted to the Agent by telex or facsimile transmission at its offices
specified in or pursuant to Section 9.01 not later than (x) 4:00 P.M. (New York
City time) on the fourth Euro-Dollar Business Day prior to the proposed date of
Borrowing, in the case of a LIBOR Auction or (y) 9:30 A.M. (New York City time)
on the proposed date of Borrowing, in the case of an Absolute Rate Auction (or,
in either case, such other time or date as the Borrower and the Agent shall have
mutually agreed and shall have notified to the Banks not later than the date of
the Money Market Quote Request for the first LIBOR Auction or Absolute Rate
Auction for which such change is to be effective); provided that Money Market
Quotes submitted by the Agent (or any affiliate of the Agent) in the capacity of
a Bank may be submitted, and may only be submitted, if the Agent or such
affiliate notifies the Borrower of the terms of the offer or offers contained
therein not later than (x) one hour prior to the deadline for the other Banks,
in the case of a LIBOR Auction or (y) 15 minutes prior to the deadline for the
other Banks, in the case of an Absolute Rate Auction. Subject to Articles III
and VI, any Money Market Quote so made shall be irrevocable except with the
written consent of the Agent given on the instructions of
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the Borrower.
(ii) Each Money Market Quote shall be in substantially the
form of Exhibit D hereto and shall in any case specify:
(A) the proposed date of Borrowing,
(B) the principal amount of the Money Market Loan for which each
such offer is being made, which principal amount (w) may be greater than
or less than the Commitment of the quoting Bank, (x) must be $5,000,000
or a larger multiple of $1,000,000, (y) may not exceed the principal
amount of Money Market Loans for which offers were requested and (z) may
be subject to an aggregate limitation as to the principal amount of
Money Market Loans for which offers being made by such quoting Bank may
be accepted,
(C) in the case of a LIBOR Auction, the margin above or below the
applicable London Interbank Offered Rate (the "Money Market Margin")
offered for each such Money Market Loan, expressed as a percentage
(specified to the nearest 1/10,000th of 1%) to be added to or subtracted
from such base rate,
(D) in the case of an Absolute Rate Auction, the rate of interest
per annum (specified to the nearest 1/10,000th of 1%) (the "Money Market
Absolute Rate") offered for each such Money Market Loan, and
(E) the identity of the quoting Bank.
A Money Market Quote may set forth up to five separate offers by the quoting
Bank with respect to each Interest Period specified in the related Invitation
for Money Market Quotes.
(iii) Any Money Market Quote shall be disregarded if it:
(A) is not substantially in conformity with Exhibit D hereto or
does not specify all of the information required by subsection (d)(ii);
(B) except as provided in subsection (d)(ii)(B)(z) contains
qualifying, conditional or similar language;
(C) except as provided in subsection
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(d)(ii)(B)(z) proposes terms other than or in addition to those set
forth in the applicable Invitation for Money Market Quotes; or
(D) arrives after the time set forth in subsection (d)(i).
(e) Notice to Borrower. The Agent shall promptly notify the
Borrower of the terms (x) of any Money Market Quote submitted by a Bank that is
in accordance with subsection (d) and (y) of any Money Market Quote that amends,
modifies or is otherwise inconsistent with a previous Money Market Quote
submitted by such Bank with respect to the same Money Market Quote Request. Any
such subsequent Money Market Quote shall be disregarded by the Agent unless such
subsequent Money Market Quote is submitted solely to correct a manifest error in
such former Money Market Quote. The Agent's notice to the Borrower shall specify
(A) the aggregate principal amount of Money Market Loans for which offers have
been received for each Interest Period specified in the related Money Market
Quote Request, (B) the respective principal amounts and Money Market Margins or
Money Market Absolute Rates, as the case may be, so offered and (C) if
applicable, limitations on the aggregate principal amount of Money Market Loans
for which offers in any single Money Market Quote may be accepted.
(f) Acceptance and Notice by Borrower. Not later than 10:30 A.M.
(New York City time) on (x) the third Euro-Dollar Business Day prior to the
proposed date of Borrowing, in the case of a LIBOR Auction or (y) the proposed
date of Borrowing, in the case of an Absolute Rate Auction (or, in either case,
such other time or date as the Borrower and the Agent shall have mutually agreed
and shall have notified to the Banks not later than the date of the Money Market
Quote Request for the first LIBOR Auction or Absolute Rate Auction for which
such change is to be effective), the Borrower shall notify the Agent of its
acceptance or non-acceptance of the offers so notified to it pursuant to
subsection (e). In the case of acceptance, such notice (a "Notice of Money
Market Borrowing") shall specify the aggregate principal amount of offers for
each Interest Period that are accepted. The Borrower may accept any Money Market
Quote in whole or in part; provided that:
(i) the aggregate principal amount of each Money Market Borrowing
may not exceed the applicable amount set forth in the related Money
Market Quote Request,
(ii) the principal amount of each Money Market
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Borrowing must be $5,000,000 or a larger multiple of $1,000,000,
(iii) acceptance of offers may only be made on the basis of
ascending Money Market Margins or Money Market Absolute Rates, as the
case may be, and
(iv) the Borrower may not accept any offer that is described in
subsection (d)(iii) or that otherwise fails to comply with the
requirements of this Agreement.
(g) Allocation by Agent. If offers are made by two or more Banks
with the same Money Market Margins or Money Market Absolute Rates, as the case
may be, for a greater aggregate principal amount than the amount in respect of
which such offers are accepted for the related Interest Period, the principal
amount of Money Market Loans in respect of which such offers are accepted shall
be allocated by the Agent among such Banks as nearly as possible (in multiples
of $1,000,000, as the Agent may deem appropriate) in proportion to the aggregate
principal amounts of such offers. Determinations by the Agent of the amounts of
Money Market Loans shall be conclusive in the absence of manifest error.
SECTION 2.04. Notice to Banks; Funding of Loans.
(a) Upon receipt of a Notice of Borrowing, the Agent shall
promptly notify each Bank of the contents thereof and of such Bank's share (if
any) of such Borrowing and such Notice of Borrowing shall not thereafter be
revocable by the Borrower.
(b) Not later than 12:00 Noon (New York City time) on the date of
each Borrowing, each Bank participating therein shall make available its share
of such Borrowing, in Federal or other funds immediately available in New York
City, to the Agent at its address referred to in Section 9.01. Unless the Agent
determines that any applicable condition specified in Article III has not been
satisfied, the Agent will make the funds so received from the Banks available to
the Borrower by 3:00 P.M. (New York City time) on the date of such Borrowing at
the Agent's aforesaid address.
(c) Unless the Agent shall have received notice from a Bank prior
to the date of any Borrowing that such Bank will not make available to the Agent
such Bank's share of such Borrowing, the Agent may assume that such Bank has
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made such share available to the Agent on the date of such Borrowing in
accordance with subsection (b) of this Section 2.04 and the Agent may, in
reliance upon such assumption, make available to the Borrower on such date a
corresponding amount. If and to the extent that such Bank shall not have so made
such share available to the Agent, such Bank and the Borrower severally agree to
repay to the Agent forthwith on demand such corresponding amount together with
interest thereon, for each day from the date such amount is made available to
the Borrower until the date such amount is repaid to the Agent, at (i) in the
case of the Borrower, a rate per annum equal to the higher of the Federal Funds
Rate and the interest rate applicable thereto pursuant to Section 2.07 and (ii)
in the case of such Bank, the Federal Funds Rate. If such Bank shall repay to
the Agent such corresponding amount, such amount so repaid shall constitute such
Bank's Loan included in such Borrowing for purposes of this Agreement.
SECTION 2.05. Notes. (a) The Loans of each Bank shall be
evidenced by a single Note payable to the order of such Bank for the account of
its Applicable Lending Office in an amount equal to the aggregate unpaid
principal amount of such Bank's Loans.
(b) Each Bank may, by notice to the Borrower and the Agent,
request that its Loans of a particular type be evidenced by a separate Note in
an amount equal to the aggregate unpaid principal amount of such Loans. Each
such Note shall be in substantially the form of Exhibit A hereto with
appropriate modifications to reflect the fact that it evidences solely Loans of
the relevant type. Each reference in this Agreement to the "Note" of such Bank
shall be deemed to refer to and include any or all of such Notes, as the context
may require.
(c) Upon receipt of each Bank's Note pursuant to Section 3.01(a),
the Agent shall forward such Note to such Bank. Each Bank shall record the date,
amount and type of each Loan made by it and the date and amount of each payment
of principal made by the Borrower with respect thereto, and may, if such Bank so
elects in connection with any transfer or enforcement of its Note, endorse on
the schedule forming a part thereof appropriate notations to evidence the
foregoing information with respect to each such Loan then outstanding; provided
that the failure of any Bank to make any such recordation or endorsement or any
error in making the same shall not affect the obligations of the Borrower
hereunder or under the Notes. Each Bank is hereby irrevocably authorized by the
Borrower so to endorse its
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Note and to attach to and make a part of its Note a continuation of any such
schedule as and when required.
SECTION 2.06. Maturity of Loans; Termination of Commitments.
(a) The Commitments shall terminate on the Termination Date, and all Committed
Loans shall mature, and the principal amount thereof shall be due and payable,
on such date.
(b) Each Money Market Loan included in any Money Market Borrowing
shall mature, and the principal amount thereof shall be due and payable, on the
last day of the Interest Period applicable to such Borrowing.
SECTION 2.07. Interest Rates. (a) Each Base Rate Loan shall
bear interest on the outstanding principal amount thereof, for each day
from the date such Loan is made until it becomes due, at a rate per annum equal
to the Base Rate for such day. Such interest shall be payable quarterly in
arrears on each Quarterly Date and on the Termination Date, and, with respect to
the principal amount of any Base Rate Loan converted to a CD Loan or a
Euro-Dollar Loan, on each date a Base Rate Loan is so converted. Any overdue
principal of or interest on any Base Rate Loan shall bear interest, payable on
demand, for each day until paid at a rate per annum equal to the sum of 1% plus
the rate otherwise applicable to Base Rate Loans for such day.
(b) Each CD Loan shall bear interest on the outstanding principal
amount thereof, for each day during each Interest Period applicable thereto, at
a rate per annum equal to the sum of the Applicable Margin for such day plus the
Adjusted CD Rate applicable to such Interest Period; provided that if any CD
Loan or any portion thereof shall, as a result of clause (2)(b) of the
definition of Interest Period, have an Interest Period of less than 30 days,
such portion shall bear interest during such Interest Period at the rate
applicable to Base Rate Loans during such period. Such interest shall be payable
for each Interest Period on the last day thereof and, if such Interest Period is
longer than 90 days, at intervals of 90 days after the first day thereof. Any
overdue principal of or interest on any CD Loan shall bear interest, payable on
demand, for each day until paid at a rate per annum equal to the sum of 1% plus
the rate applicable to Base Rate Loans for such day.
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<PAGE>
The "Adjusted CD Rate" applicable to any Interest Period means a
rate per annum determined pursuant to the following formula:
[ CDBR ]*
ACDR = [ ---------] + AR
[ 1.00-DRP ]
ACDR = Adjusted CD Rate
CDBR = CD Base Rate
DRP = Domestic Reserve Percentage
AR = Assessment Rate
----------
* The amount in brackets being rounded upward, if
necessary, to the next higher 1/100 of 1%
The "CD Base Rate" applicable to any Interest Period is the rate
of interest determined by the Agent to be the average (rounded upward, if
necessary, to the next higher 1/100 of 1%) of the prevailing rates per annum bid
at 10:00 A.M. (New York City time) (or as soon thereafter as practicable) on the
first day of such Interest Period by two or more New York certificate of deposit
dealers of recognized standing for the purchase at face value from each CD
Reference Bank of its certificates of deposit in an amount comparable to the
principal amount of the CD Loan of such CD Reference Bank to which such Interest
Period applies and having a maturity comparable to such Interest Period.
"Domestic Reserve Percentage" means for any day that percentage
(expressed as a decimal) which is in effect on such day, as prescribed by the
Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement (including without limitation any
basic, supplemental or emergency reserves) for a member bank of the Federal
Reserve System in New York City with deposits exceeding five billion dollars in
respect of new non-personal time deposits in dollars in New York City having a
maturity comparable to the related Interest Period and in an amount of $100,000
or more. The Adjusted CD Rate shall be adjusted automatically on and as of the
effective date of any change in the Domestic Reserve Percentage.
"Assessment Rate" means for any day the annual assessment rate in
effect on such day which is payable by a member of the Bank Insurance Fund
classified as adequately
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<PAGE>
capitalized and within supervisory subgroup "A" (or a comparable successor
assessment risk classification) within the meaning of 12 C.F.R. ss. 327.4(a)
(or any successor provision) to the Federal Deposit Insurance Corporation (or
any successor) for such Corporation's (or such successor's) insuring time
deposits at offices of such institution in the United States. The Adjusted CD
Rate shall be adjusted automatically on and as of the effective date of any
change in the Assessment Rate.
(c) Each Euro-Dollar Loan shall bear interest on the outstanding
principal amount thereof, for each day during each Interest Period applicable
thereto, at a rate per annum equal to the sum of the Applicable Margin for such
day plus the London Interbank Offered Rate applicable to such Interest Period.
Such interest shall be payable for each Interest Period on the last day thereof
and, if such Interest Period is longer than three months, at intervals of three
months after the first day thereof.
The "London Interbank Offered Rate" applicable to any Interest
Period means a rate of interest determined by the Agent on the basis of at least
two offered rates for deposits in United States dollars for a period equal to
such Interest Period commencing on the first day of such Interest Period
appearing on the Reuters Screen LIBO Page as of 11:00 A.M. (London time) on the
day that is two Euro-Dollar Business Days prior to the first day of such
Interest Period. If at least two such offered rates appear on the Reuters Screen
LIBO Page, the rate with respect to each Interest Period will be the arithmetic
average (rounded upwards to the next 1/16th of 1%) of such offered rates. If
fewer than two offered rates appear, the "London Interbank Offered Rate" in
respect of any Interest Period will be the average (rounded upward, if
necessary, to the next higher 1/16 of 1%) of the respective rates per annum at
which deposits in United States dollars are offered to each of the Euro-Dollar
Reference Banks in the London interbank market at approximately 11:00 A.M.
(London time) two Euro-Dollar Business Days before the first day of such
Interest Period in an amount approximately equal to the principal amount of the
Euro-Dollar Loan of such Euro-Dollar Reference Bank to which such Interest
Period is to apply and for a period of time comparable to such Interest Period.
(d) Any overdue principal of or interest on any Euro-Dollar Loan
shall bear interest, payable on demand, for each day from and including the date
payment thereof was due to but excluding the date of actual payment, at a rate
per annum equal to the sum of 1% plus the rate applicable to
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Base Rate Loans for such day.
(e) Subject to Section 8.01(a), each Money Market LIBOR Loan
shall bear interest on the outstanding principal amount thereof, for the
Interest Period applicable thereto, at a rate per annum equal to the sum of the
London Interbank Offered Rate for such Interest Period (determined in accordance
with Section 2.07(c) as if the related Money Market LIBOR Borrowing were a
Committed Euro-Dollar Borrowing) plus (or minus) the Money Market Margin quoted
by the Bank making such Loan in accordance with Section 2.03. Each Money Market
Absolute Rate Loan shall bear interest on the outstanding principal amount
thereof, for the Interest Period applicable thereto, at a rate per annum equal
to the Money Market Absolute Rate quoted by the Bank making such Loan in
accordance with Section 2.03. Such interest shall be payable for each Interest
Period on the last day thereof and, if such Interest Period is longer than three
months, at intervals of three months after the first day thereof. Any overdue
principal of or interest on any Money Market Loan shall bear interest, payable
on demand, for each day until paid at a rate per annum equal to the sum of 1%
plus the Base Rate for such day.
(f) The Agent shall determine each interest rate applicable to
the Loans hereunder. The Agent shall give prompt notice to the Borrower and the
participating Banks of each rate of interest so determined, and its
determination thereof shall be conclusive in the absence of manifest error.
(g) Each Reference Bank agrees to use its best efforts to furnish
quotations to the Agent as contemplated by this Section. If any Reference Bank
does not furnish a timely quotation necessary to determine an interest rate in
accordance with this Section, the Agent shall determine the relevant interest
rate on the basis of the quotation or quotations furnished by the remaining
Reference Bank or Banks or, if none of such quotations is available on a timely
basis, the provisions of Section 8.01 shall apply.
(h) The "Applicable Margin" with respect to any Euro-Dollar Loan
or CD Loan at any date is the applicable percentage amount set forth in the
table below based on the Status and Usage on such date:
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<PAGE>
<TABLE>
<CAPTION>
====================================================================================
Level Level Level Level Level Level Level Level
I II III IV V VI VII VIII
Status Status Status Status Status Status Status Status
- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
CD Loans
Usage
(pound)50% 0.255% 0.270% 0.290% 0.335% 0.360% 0.425% 0.450% 0.625%
Usage
> 50% 0.305% 0.320% 0.340% 0.385% 0.410% 0.475% 0.500% 0.725%
- ------------------------------------------------------------------------------------
Euro-
Dollar
Loans
Usage
(pound)50% 0.130% 0.145% 0.165% 0.210% 0.235% 0.300% 0.325% 0.500%
Usage
> 50% 0.180% 0.195% 0.215% 0.260% 0.285% 0.350% 0.375% 0.600%
====================================================================================
</TABLE>
SECTION 2.08. Facility Fees. The Borrower shall pay to the Agent
for the account of the Banks ratably a facility fee at the Facility Fee Rate.
Such facility fee shall accrue from and including the Effective Date to but
excluding the Termination Date (or earlier date of termination of the
Commitments in their entirety), on the daily aggregate amount of the Commitments
(whether used or unused). Accrued facility fees shall be payable quarterly on
each Quarterly Date and upon the date of termination of the Commitments in their
entirety.
The "Facility Fee Rate" at any date is: (i) 0.070% if Level I
Status exists at such date, (ii) 0.080% if Level II Status exists at such date,
(iii) 0.085% if Level III Status exists at such date, (iv) 0.090% if Level IV
Status exists at such date, (v) 0.115% if Level V Status exists at such date,
(vi) 0.150% if Level VI Status exists at such date, (vii) 0.175% if Level VII
Status exists at such date and (viii) 0.250% if Level VIII Status exists at such
date.
SECTION 2.09. Optional Termination or Reduction of Commitments.
The Borrower may, upon at least three Domestic
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Business Days' notice to the Agent, (i) terminate the Commitments at any time,
if no Loans are outstanding at such time, or (ii) ratably reduce from time to
time by an aggregate amount of $25,000,000 or any larger multiple of $5,000,000,
the aggregate amount of the Commitments in excess of the aggregate outstanding
principal amount of the Loans. The Agent shall promptly notify each Bank of any
such notice received by the Agent.
SECTION 2.10. Method of Electing Interest Rates. (a) The
Loans included in each Committed Borrowing shall bear interest initially at the
type of rate specified by the Borrower in the applicable Notice of Committed
Borrowing. Thereafter, the Borrower may from time to time elect to change or
continue the type of interest rate borne by each Group of Loans (subject in each
case to the provisions of Article VIII), as follows:
(i) if such Loans are Base Rate Loans, the Borrower may
elect to convert such Loans to CD Loans as of any Domestic
Business Day or to Euro-Dollar Loans as of any Euro-Dollar
Business Day;
(ii) if such Loans are CD Loans, the Borrower may elect to
convert such Loans to Base Rate Loans or Euro-Dollar Loans or
elect to continue such Loans as CD Loans for an additional
Interest Period, in each case effective on the last day of the
then current Interest Period applicable to such Loans; and
(iii) if such Loans are Euro-Dollar Loans, the Borrower
may elect to convert such Loans to Base Rate Loans or CD Loans or
elect to continue such Loans as Euro-Dollar Loans for an
additional Interest Period, in each case effective on the last
day of the then current Interest Period applicable to such Loans.
Each such election shall be made by delivering a notice (a "Notice of Interest
Rate Election") to the Agent at least three Euro-Dollar Business Days before the
conversion or continuation selected in such notice is to be effective (unless
the relevant Loans are to be converted from Domestic Loans to Domestic Loans of
the other type or continued as Domestic Loans of the same type for an additional
Interest Period, in which case such notice shall be delivered to the Agent at
least two Domestic Business Days before such conversion or continuation is to be
effective). A Notice of
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Interest Rate Election may, if it so specifies, apply to only a portion of the
aggregate principal amount of the relevant Group of Loans; provided that (i)
such portion is allocated ratably among the Loans comprising such Group and (ii)
the portion to which such notice applies, and the remaining portion to which it
does not apply, are each $50,000,000 or any larger multiple of $5,000,000.
(b) Each Notice of Interest Rate Election shall specify:
(i) the Group of Loans (or portion thereof) to which such
notice applies;
(ii) the date on which the conversion or continuation selected in
such notice is to be effective, which shall comply with the
applicable clause of subsection (a) above;
(iii) if the Loans comprising such Group are to be converted, the
new type of Loans and, if such new Loans are Fixed Rate Loans,
the duration of the initial Interest Period applicable thereto;
and
(iv) if such Loans are to be continued as CD Loans or Euro-Dollar
Loans for an additional Interest Period, the duration of such
additional Interest Period.
Each Interest Period specified in a Notice of Interest Rate Election shall
comply with the provisions of the definition of Interest Period.
(c) Upon receipt of a Notice of Interest Rate Election from the
Borrower pursuant to subsection (a) above, the Agent shall promptly notify each
Bank of the contents thereof and such notice shall not thereafter be revocable
by the Borrower. If the Borrower fails to deliver a timely Notice of Interest
Rate Election to the Agent for any Group of Fixed Rate Loans, such Loans shall
be converted into Base Rate Loans on the last day of the then current Interest
Period applicable thereto.
SECTION 2.11. Optional Prepayments. (a) The Borrower may, upon
at least one Domestic Business Day's notice to the Agent, prepay the Group of
Base Rate Loans (or any Money Market Borrowing bearing interest at the Base Rate
pursuant to Section 8.01(a)) in whole at any time, or from time to time in part
in amounts aggregating $50,000,000 or
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any larger multiple of $5,000,000, by paying the principal amount to be prepaid
together with accrued interest thereon to the date of prepayment. Each such
optional prepayment shall be applied to prepay ratably the Loans of the several
Banks included in such Group or Borrowing.
(b) The Borrower may, upon at least three Domestic Business Days'
notice to the Agent, in the case of a Group of CD Loans or upon at least three
Euro-Dollar Business Days' notice to the Agent, in the case of a Group of
Euro-Dollar Loans, prepay the Loans comprising such a Group on the last day of
any Interest Period applicable to such Group, in whole at any time, or from time
to time in part in amounts aggregating $50,000,000 or any larger multiple of
$5,000,000, by paying the principal amount to be prepaid together with accrued
interest thereon to the date of prepayment. Each such optional prepayment shall
be applied to prepay ratably the Loans of the several Banks included in such
Group.
(c) Except as provided in subsection (a) above, the Borrower may
not prepay all or any portion of the principal amount of any Money Market Loan
prior to the maturity thereof except with the prior consent of the Bank making
such Loan and subject to Section 2.13.
(d) Upon receipt of a notice of prepayment pursuant to this
Section, the Agent shall promptly notify each Bank of the contents thereof and
of such Bank's ratable share (if any) of such prepayment and such notice shall
not thereafter be revocable by the Borrower.
SECTION 2.12. General Provisions as to Payments. (a) The
Borrower shall make each payment of principal of, and interest on, the Loans and
of fees hereunder, not later than 12:00 Noon (New York City time) on the date
when due, in Federal or other funds immediately available in New York City, to
the Agent at its address referred to in Section 9.01. The Agent will promptly
distribute to each Bank its ratable share of each such payment received by the
Agent for the account of the Banks. Whenever any payment of principal of, or
interest on, the Domestic Loans or of fees shall be due on a day which is not a
Domestic Business Day, the date for payment thereof shall be extended to the
next succeeding Domestic Business Day. Whenever any payment of principal of, or
interest on, the Euro-Dollar Loans or the Money Market LIBOR Loans shall be due
on a day which is not a Euro-Dollar Business Day, the date for payment thereof
shall be extended to the next succeeding Euro-Dollar Business Day unless such
Euro-Dollar Business Day falls in
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another calendar month, in which case the date for payment thereof shall be the
next preceding Euro-Dollar Business Day. Whenever any payment of principal of,
or interest on, the Money Market Absolute Rate Loans shall be due on a day which
is not a Euro-Dollar Business Day, the date for payment thereof shall be
extended to the next succeeding Euro-Dollar Business Day. If the date for any
payment of principal is extended pursuant to this Agreement or by operation of
law or otherwise, interest thereon shall be payable for such extended time.
(b) Unless the Agent shall have received notice from the Borrower
prior to the date on which any payment is due to the Banks hereunder that the
Borrower will not make such payment in full, the Agent may assume that the
Borrower has made such payment in full to the Agent on such date and the Agent
may, in reliance upon such assumption, cause to be distributed to each Bank on
such due date an amount equal to the amount then due such Bank. If and to the
extent that the Borrower shall not have so made such payment, each Bank shall
repay to the Agent forthwith on demand such amount distributed to such Bank
together with interest thereon, for each day from the date such amount is
distributed to such Bank until the date such Bank repays such amount to the
Agent, at the Federal Funds Rate.
SECTION 2.13. Funding Losses. If the Borrower makes any payment
of principal with respect to any Fixed Rate Loan or any Fixed Rate Loan is
converted to a Base Rate Loan (pursuant to Article VI or VIII or otherwise) on
any day prior to the last day of an Interest Period applicable thereto, or if
the Borrower fails to borrow, continue, convert or prepay any Fixed Rate Loans
after notice has been given to any Bank in accordance with Section 2.04(a),
2.10(c) or 2.11(d), the Borrower shall reimburse each Bank as provided in the
following paragraph for any resulting loss or expense incurred by it (or by a
Participant in the related Loan), including (without limitation) any loss
incurred in obtaining, liquidating or employing deposits from third parties, but
excluding loss of the Applicable Margin or any other margin for the period after
any such payment or conversion or failure to borrow or prepay.
A certificate of each Bank setting forth such amount or amounts
(including the computation of such amount or amounts) as shall be necessary to
compensate such Bank or a Participant for the out-of-pocket expenses incurred by
such Bank or such Participant shall be delivered to the Borrower and such amount
or amounts may be reviewed by the Borrower. If the Borrower, after receipt of
any such
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<PAGE>
certificate from such Bank, disagrees in good faith with such Bank on
the computation of the amount or amounts owed to such Bank pursuant to this
Section 2.13, such Bank and the Borrower shall negotiate in good faith to
promptly resolve such disagreement. Any payment required to be paid to such Bank
pursuant to this Section 2.13 shall be paid within 30 days after demand is made
therefor (or if there is a disagreement, after such disagreement is resolved).
Each Bank shall have a duty to mitigate the damages to such Bank that may arise
as a consequence of such funding losses described above to the extent that such
mitigation will not, in the judgment of such Bank, entail any cost or
disadvantage to such Bank that such Bank is not reimbursed or compensated for by
the Borrower.
SECTION 2.14. Computation of Interest and Fees. Interest based on
the Prime Rate hereunder shall be computed on the basis of a year of 365 days
(or 366 days in a leap year) and paid for the actual number of days elapsed
(including the first day but excluding the last day). All other interest and
fees shall be computed on the basis of a year of 360 days and paid for the
actual number of days elapsed (including the first day but excluding the last
day).
SECTION 2.15. Regulation D Compensation. For so long as any Bank
maintains reserves against "Eurocurrency liabilities" (or any other category of
liabilities which includes deposits by reference to which the interest rate on
Euro-Dollar Loans is determined or any category of extensions of credit or other
assets which includes loans by a non-United States office of such Bank to United
States residents), and as a result the cost to such Bank (or its Applicable
Lending Office) of making or maintaining its Euro-Dollar Loans is increased,
then such Bank may require the Borrower to pay, contemporaneously with each
payment of interest on the Euro-Dollar Loans, additional interest on the related
Euro-Dollar Loan of such Bank at a rate per annum up to but not exceeding the
excess of (i)(A) the applicable London Interbank Offered Rate divided by (B) one
minus the Euro-Dollar Reserve Percentage over (ii) the rate specified in clause
(i)(A). Any Bank wishing to require payment of such additional interest (x)
shall so notify the Borrower, in which case such additional interest on the
Euro-Dollar Loans of such Bank shall be payable to such Bank at the rate and
place indicated in such notice with respect to each Interest Period commencing
at least three Euro-Dollar Business Days after the giving of such notice and (y)
shall furnish to the Borrower at least five Euro-Dollar Business Days prior to
each date on which interest is
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<PAGE>
payable on the Euro-Dollar Loans an officers' certificate setting forth the
amount to which such Bank is then entitled under this Section 2.15 (which shall
be consistent with such Bank's good faith estimate of the level at which the
related reserves are maintained by it).
ARTICLE III
CONDITIONS
SECTION 3.01. Effectiveness. This Agreement shall become
effective on the date that each of the following conditions shall have been
satisfied (or waived in accordance with Section 9.05):
(a) receipt by the Agent of counterparts hereof signed by each of
the parties hereto (or, in the case of any party as to which an executed
counterpart shall not have been received, receipt by the Agent in form
satisfactory to it of telegraphic, telex, facsimile transmission or
other written confirmation from such party of execution of a counterpart
hereof by such party);
(b) receipt by the Agent of a duly executed Note for the account
of each Bank dated on or before the Effective Date complying with the
provisions of Section 2.05;
(c) receipt by the Agent of evidence satisfactory to it that
no loans are outstanding under the Existing Credit Agreement;
(d) receipt by the Agent of an opinion of the General Counsel or
any Assistant General Counsel of the Borrower, substantially in the form
of Exhibit E hereto;
(e) receipt by the Agent of an opinion of Davis Polk & Wardwell,
special counsel for the Agent, substantially in the form of Exhibit F
hereto; and
(f) receipt by the Agent of all documents the Agent may
reasonably request relating to the existence of the Borrower, the
corporate authority for and the validity of this Agreement and the
Notes, and any other matters relevant hereto, all in form and substance
satisfactory to the Agent;
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<PAGE>
provided that this Agreement shall not become effective or be binding on any
party hereto unless all of the foregoing conditions are satisfied not later than
September 20, 1996. The Agent shall promptly notify the Borrower and the Banks
of the Effective Date, and such notice shall be conclusive and binding on all
parties hereto. The Banks that are parties to the Existing Credit Agreement,
comprising the "Required Banks" as defined therein, and the Borrower agree that
the commitments under the Existing Credit Agreement shall terminate in their
entirety simultaneously with and subject to the effectiveness of this Agreement
and that the Borrower shall be obligated to pay on the Effective Date the
accrued facility fees thereunder to but excluding the date of such
effectiveness.
SECTION 3.02. Borrowings. The obligation of any Bank to make a
Loan on the occasion of any Borrowing is subject to the satisfaction of the
following conditions:
(a) receipt by the Agent of a Notice of Borrowing as required
by Section 2.02 or 2.03, as the case may be;
(b) immediately after such Borrowing, the aggregate outstanding
principal amount of the Loans will not exceed the aggregate amount of
the Commitments;
(c) immediately before and after such Borrowing, no Default
shall have occurred and be continuing; and
(d) the representations and warranties of the Borrower contained
in this Agreement (except the representation and warranty set forth in
Section 4.04(c)) shall be true in all material respects on and as of the
date of such Borrowing.
Each Borrowing hereunder shall be deemed to be a representation and warranty by
the Borrower on the date of such Borrowing as to the facts specified in clauses
(b), (c) and (d) of this Section.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants that:
SECTION 4.01. Corporate Existence and Power. The Borrower is a
corporation duly incorporated, validly existing and in good standing under the
laws of Delaware, and has all corporate power and all governmental licenses,
authorizations, consents and approvals required to carry on its business as now
conducted except those which the failure to have would not have a Material
Adverse Effect.
SECTION 4.02. Corporate and Governmental Authorization; No
Contravention. The execution, delivery and performance by the Borrower of this
Agreement and the Notes are within the Borrower's corporate power, have been
duly authorized by all necessary corporate action, require no action by or in
respect of, or filing with, any governmental body, agency or official and do not
contravene, or constitute a default under, any provision of applicable law or
regulation or of the certificate of incorporation or by-laws of the Borrower or
of any material agreement, judgment, injunction, order, decree or other material
instrument binding upon the Borrower or result in the creation or imposition of
any Lien on any asset of the Borrower.
SECTION 4.03. Binding Effect. This Agreement constitutes a valid
and binding agreement of the Borrower and the Notes, when executed and delivered
in accordance with this Agreement, will constitute valid and binding obligations
of the Borrower, in each case enforceable against the Borrower in accordance
with their respective terms, except as the same may be limited by bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium and similar laws
affecting creditors' rights generally and by general principles of equity
(regardless of whether considered in a proceeding in equity or at law).
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SECTION 4.04. Financial Information.
(a) The consolidated balance sheet of the Borrower and its
subsidiaries as of December 31, 1995 and the related consolidated statements of
income, changes in stockholders' equity and cash flows for the fiscal year then
ended, reported on by Cooper's & Lybrand and set forth in the Borrower's 1995
Form 10-K, a copy of which has been delivered to each of the Banks, present
fairly, in all material respects, the consolidated financial position of the
Borrower and its Consolidated Subsidiaries as of such date and the consolidated
results of their operations and cash flows for such fiscal year, in conformity
with generally accepted accounting principles.
(b) The unaudited consolidated balance sheet of the Borrower and
its Consolidated Subsidiaries as of June 30, 1996 and the related unaudited
consolidated statements of income and cash flows for the six months then ended,
set forth in the Borrower's Latest Form 10-Q, a copy of which has been delivered
to each of the Banks, present fairly, in all material respects, the consolidated
financial position of the Borrower and its Consolidated Subsidiaries as of such
date and the consolidated results of their operations and cash flows for such
six-month period, in conformity with generally accepted accounting principles
for interim financial information applied on a basis consistent with the
financial statements referred to in subsection (a) of this Section.
(c) From June 30, 1996 through the Effective Date there has been
no material adverse change in the consolidated financial condition of the
Borrower and its Consolidated Subsidiaries.
SECTION 4.05. Litigation. There is no action, suit or proceeding
pending against, or to the knowledge of the Borrower threatened against, the
Borrower or any of its Subsidiaries before any court or arbitrator or any
governmental body, agency or official in which there is a reasonable probability
of an adverse decision which would have a Material Adverse Effect, or which in
any manner draws into question the validity or enforceability of this Agreement
or the Notes.
SECTION 4.06. Subsidiaries. Each of the Borrower's Consolidated
Subsidiaries which is a corporation is a corporation duly incorporated, validly
existing and in good standing under the laws of its jurisdiction of
incorporation, and has all corporate power and all
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governmental licenses, authorizations, consents and approvals required to carry
on its business as now conducted, except those which the failure to have would
not have a Material Adverse Effect.
SECTION 4.07. Not an Investment Company. The Borrower is not an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended.
SECTION 4.08. Full Disclosure. No written information heretofore
furnished by the Borrower to the Agent or any Bank pursuant to Section 4.04 is,
and no written information hereafter furnished by the Borrower to the Agent or
any Bank pursuant to Section 5.01 contains or will contain any material
misstatement of any material facts.
ARTICLE V
COVENANTS
The Borrower agrees that, so long as any Bank has any Commitment
hereunder or any amount payable under any Note remains unpaid:
SECTION 5.01. Information. The Borrower will deliver to each of
the Banks:
(a) within 105 days after the end of each fiscal year of the
Borrower, a consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries as of the end of such fiscal year and the
related consolidated statements of income, changes in stockholders'
equity and cash flows for such fiscal year, setting forth in each case
in comparative form the figures as of the end of and for the previous
fiscal year, all reported on in a manner acceptable to the Securities
and Exchange Commission by Coopers & Lybrand or other independent public
accountants of nationally recognized standing;
(b) within 60 days after the end of each of the first three
quarters of each fiscal year of the Borrower, a consolidated balance
sheet of the Borrower and its Consolidated Subsidiaries as of the end of
such quarter and the related consolidated statements of income for such
quarter and the related consolidated statements of income and cash flows
for the portion of
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<PAGE>
the Borrower's fiscal year ended at the end of such
quarter, setting forth in the case of such statements of income in
comparative form the figures for the corresponding quarter and in the
case of such statements of income and cash flows the corresponding
portion of the Borrower's previous fiscal year, all certified as to
fairness of presentation, generally accepted accounting principles and
consistency by the chief financial officer or the chief accounting
officer of the Borrower, subject to normal year end adjustments;
(c) simultaneously with the delivery of each set of financial
statements referred to in clauses (a) and (b) above, a certificate of
the chief financial officer or the chief accounting officer of the
Borrower (i) setting forth in reasonable detail the calculations
required to establish whether the Borrower was in compliance with the
requirements of Sections 5.03, 5.04 and 5.05, inclusive, on the date of
the consolidated balance sheet included in such financial statements and
(ii) stating whether any Default exists on the date of such certificate
and, if any Default then exists, setting forth the details thereof and
the action which the Borrower is taking or proposes to take with respect
thereto;
(d) promptly after the mailing thereof to the shareholders of the
Borrower generally, copies of all financial statements, reports and
proxy statements so mailed; and
(e) promptly after the filing thereof, copies of all reports on
Forms 10-K, 10-Q and 8-K (or their equivalents) which the Borrower shall
have filed with the Securities and Exchange Commission.
SECTION 5.02. Maintenance of Existence. The Borrower will
preserve, renew and keep in full force and effect its corporate existence except
as otherwise permitted under Section 5.08.
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SECTION 5.03. Interest Coverage. The ratio of Consolidated EBIT
to Consolidated Interest Expense will not, for any period of four consecutive
fiscal quarters, be less than 1.25 to 1.
SECTION 5.04. Debt. Consolidated Debt determined at the end of
any fiscal quarter will not exceed 1,000% of Consolidated Tangible Net Worth
determined at the end of such fiscal quarter, and Consolidated Debt determined
at the end of any fiscal month which is not the last month of a fiscal quarter
will not exceed 1,000% of the greater of (i) Consolidated Tangible Net Worth
determined at the end of the most recently ended fiscal quarter or (ii)
Consolidated Tangible Net Worth determined at the end of such fiscal month.
SECTION 5.05. Minimum Consolidated Tangible Net Worth.
Consolidated Tangible Net Worth shall be at least $500,000,000 plus an amount
equal to 50% of Consolidated Net Income for each fiscal quarter of the Borrower
and its Consolidated Subsidiaries ending after June 30, 1996 (but on or prior to
the date of determination) for which Consolidated Net Income is positive (but
with no deduction on account of negative Consolidated Net Income for any fiscal
quarter of the Borrower and its Consolidated Subsidiaries).
SECTION 5.06 Restricted Payments. Neither the Borrower nor any
Subsidiary will declare or make any Restricted Payment unless, both before and
after giving effect thereto, no Event of Default under any of paragraphs (a),
(b), (d), (e), (f), (g), (h) or (i) of Section 6.01 shall have occurred and be
continuing.
SECTION 5.07 Negative Pledge. Neither the Borrower nor any
Restricted Subsidiary will create, assume or suffer to exist any Lien on any
asset now owned or hereafter acquired by it, except:
(a) Liens existing on the date of this Agreement securing Debt
outstanding on the date of this Agreement (or Debt issued or incurred
pursuant to commitments outstanding on the date of this Agreement) in an
aggregate principal or face amount not exceeding $230,000,000;
(b) Liens on property of, or on any shares of stock or Debt of,
any corporation existing at the time such corporation becomes a
Restricted Subsidiary and
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not created at the request or with the consent of the Borrower and in
contemplation of such event;
(c) Liens on property, shares of stock, other equity interests,
or Debt existing at the time of acquisition or repossession thereof by
the Borrower or any Restricted Subsidiary and not created at the request
or with the consent of the Borrower and in contemplation of such event;
(d) Liens on physical property (or any Accounts Receivable
arising in connection with the lease thereof), shares of stock, other
equity interests, or Debt acquired (or, in the case of physical
property, constructed) after the date hereof by the Borrower or any
Restricted Subsidiary, which Liens are created prior to, at the time of,
or within 180 days after such acquisition (or, in the case of physical
property, the completion of such construction or commencement of
commercial operation of such property, whichever is later) to secure any
Debt incurred or assumed for the purpose of financing all or any part of
the cost of such acquisition (or such construction);
(e) any Lien on any asset of any corporation existing at the time
such corporation is merged or consolidated with or into the Borrower or
a Restricted Subsidiary and not created in contemplation of such event;
(f) Liens arising in the ordinary course of the Borrower's or
such Restricted Subsidiary's business which (i) do not secure Debt or
Derivatives Obligations, (ii) do not secure any obligation in an amount
exceeding $25,000,000 and (iii) do not in the aggregate materially
detract from the value of its assets or materially impair the use
thereof in the operation of its business;
(g) Liens on Accounts Receivable of the Borrower or any
Restricted Subsidiary arising from or in connection with transactions
entered into by the Borrower or such Restricted Subsidiary after the
date hereof or on Accounts Receivable acquired by the Borrower or such
Restricted Subsidiary after such date from others, which Liens are
created prior to, at the time of, or within one year after such Accounts
Receivable arise or are acquired or, if later, the completion of the
delivery or installation of the equipment or goods or the rendering of
the services or
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the advancement or loaning of funds relating thereto (i)
as a result of any guarantee, repurchase or other contingent (direct or
indirect) or recourse obligation of the Borrower or such Restricted
Subsidiary in connection with the discounting, sale, assignment,
transfer or other disposition of such Accounts Receivable or any
interest therein, or (ii) to secure or provide for the payment of all or
any part of the investment of the Borrower or such Restricted Subsidiary
in any such Accounts Receivable (whether or not such Accounts Receivable
are the Accounts Receivable on which such Liens are created) or the
purchase price thereof or to secure any debt (including, without
limitation, Non-Recourse Debt) issued, incurred, assumed or guaranteed
for the purpose of financing or refinancing all or any part of such
investment or purchase price;
(h) Liens on cash and cash equivalents securing Derivatives
Obligations, provided that the aggregate amount of cash and cash
equivalents subject to such Liens at no time exceed $25,000,000;
(i) Liens in favor of the Borrower or any Restricted
Subsidiary;
(j) Liens in favor of the United States of America or any State
thereof or the District of Columbia, or any agency, department or other
instrumentality thereof, to secure progress, advance or other payments
pursuant to any contract or provision of any statute;
(k) Liens to secure Non-Recourse Debt in connection with the
Borrower or any Restricted Subsidiary engaging in any leveraged or
single-investor or other lease transactions, whether (in the case of
Liens on or relating to leases or groups of leases or the particular
properties subject thereto) such Liens be on the particular properties
subject to any leases involved in any of such transactions and/or the
rental or other payments or rights under such leases or, in the case of
any group of related or unrelated leases, on the properties subject to
the leases comprising such group and/or the rental or other payments or
rights under such leases, or on any direct or indirect interest therein,
and whether (in any case) (i) such Liens be created prior to, at the
time of, or at any time after the entering into of such lease
transactions and/or (ii) such leases be in existence prior to, or be
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entered into by the Borrower or such Restricted Subsidiary at the time
of or at any time after, the purchase or other acquisition by the
Borrower or such Restricted Subsidiary of the properties subject to such
leases;
(l) Liens securing any extension, renewal or replacement (or
successive extensions, renewals or replacements), in whole or in part,
of any Debt or other obligation secured by any Lien permitted by any of
the foregoing clauses of this Section; provided, however, that any such
extension, renewal or replacement shall be limited to all or a part of
the property or assets which secured the Debt or other obligation so
extended, renewed or replaced (plus any improvements on such property)
and that the amount of such Debt or other obligation secured thereby is
not increased; and
(m) Liens not otherwise permitted by the foregoing clauses of
this Section securing Debt in an aggregate principal or face amount at
any date not to exceed 10% of Consolidated Tangible Net Worth.
Notwithstanding the foregoing, for purposes of this Section, a Lien shall not be
deemed to be created (i) solely by virtue of an Asset Drop-Down or (ii) on any
Accounts Receivable that are treated as having been sold by the Borrower or any
of its Subsidiaries under applicable generally accepted accounting principles
applied in accordance with Section 1.02.
SECTION 5.08. Consolidations, Mergers and Sales of Assets. The
Borrower covenants that it will not merge or consolidate with any other
corporation or sell or convey all or substantially all of its assets to any
person (other than such a sale or conveyance to a Subsidiary or any successor
thereto (such a sale or conveyance being called an "Asset Drop-Down")), unless
(i) either the Borrower shall be the continuing corporation or the successor
corporation or the person which acquires by sale or conveyance substantially all
the assets of the Borrower (if other than the Borrower) shall be a corporation
organized under the laws of the United States of America or any State thereof
and shall expressly assume the due and punctual payment of the principal of and
interest on all the Notes according to their tenor, and the due and punctual
performance and observance of all of the covenants and conditions of this
Agreement to be performed or observed by the Borrower, by one or more
agreements, reasonably satisfactory in form to
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the Required Banks, executed and delivered to the Agent by such corporation, and
(ii) the Borrower or such successor corporation, as the case may be, shall not,
immediately after such merger or consolidation, or such sale or conveyance, be
in default in the performance of any such covenant or condition. In the event of
any Asset Drop-Down after the date of this Agreement, any subsequent sale or
conveyance of assets by a Subsidiary to which assets were transferred in such
Asset Drop-Down (a "Drop-Down Subsidiary") will be deemed to be a sale or
conveyance of assets by the Borrower for purposes of this Section 5.08.
SECTION 5.09. Use of Proceeds. The proceeds of the Loans made
under this Agreement will be used by the Borrower for general corporate
purposes, including, without limitation, the repayment of maturing commercial
paper and other Debt of the Borrower and the consummation of the Acquisition.
None of such proceeds will be used for the purpose of buying or carrying any
"margin stock" within the meaning of Regulation U.
ARTICLE VI
DEFAULTS
SECTION 6.01. Events of Default. If one or more of the following
events ("Events of Default") shall have occurred and be continuing:
(a) the Borrower shall fail to pay when due any principal of any
Loan, or shall fail to pay within five Domestic Business Days of the due
date thereof any interest on any Loan, any fees or any other amount
payable hereunder;
(b) the Borrower shall fail to observe or perform any covenant
contained in Section 5.02, 5.03, 5.04, 5.05, 5.06, 5.07 or 5.08;
(c) the Borrower shall fail to observe or perform any covenant or
agreement contained in this Agreement (other than those covered by
clause (a) or (b) above) for 30 days after notice thereof has been given
to the Borrower by the Agent at the request of the Required Banks;
(d) any representation or warranty made or deemed made by the
Borrower in this Agreement or in any certificate delivered pursuant to
this Agreement shall
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prove to have been materially incorrect when made (or deemed made
pursuant to Section 3.02);
(e) the Borrower or any Subsidiary shall fail to make any payment
of principal or interest in respect of any Material Financial
Obligations when due or within any applicable grace period;
(f) any event or condition shall occur which results in the
acceleration of the maturity of any Material Debt or enables the holder
of such Debt or any Person acting on such holder's behalf to accelerate
the maturity thereof (unless such acceleration or right to accelerate in
respect of such event or condition has been validly waived by or on
behalf of such holder by waiver then in effect);
(g) the Borrower shall commence a voluntary case seeking
liquidation, reorganization or other relief with respect to itself or
its debts under any bankruptcy, insolvency or other similar law now or
hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any substantial
part of its property, or shall consent to any such relief or to the
appointment of or taking possession by any such official in an
involuntary case seeking such relief commenced against it under any such
law, or shall make a general assignment for the benefit of creditors, or
shall admit in writing its inability generally to pay its debts as they
become due;
(h) an order for relief shall be entered against the Borrower
under the federal bankruptcy laws as now or hereafter in effect in an
involuntary case or other proceeding seeking liquidation, reorganization
or other relief with respect to it or its debts or seeking the
appointment of a trustee, receiver, liquidator, custodian or other
similar official of it or any substantial part of its property, and such
decree or order shall remain undismissed and unstayed for a period of 90
days;
(i) at any time prior to the consummation of the Acquisition,
AT&T shall cease to be the direct or indirect beneficial owner of at
least 75% of the Voting Power;
(j) at any time from and after the consummation of the
Acquisition, both (A) and (B) below shall occur:
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(A) (x) the Nomura Group shall cease to be the direct or
indirect beneficial owner of at least 40% of the Voting Power, or
(y) any person or group of persons (within the meaning of Section
13 or 14 of the Securities Exchange Act of 1934, as amended)
(other than the Nomura Group) shall have acquired on any date
beneficial ownership (within the meaning of Rule 13d-3
promulgated by the Securities and Exchange Commission under said
Act) of shares of capital stock of the Borrower with a greater
Voting Power than the Voting Power of shares of which the Nomura
Group is the direct or indirect beneficial owner;
and
(B) any person or group of persons (as defined in clause
(A) above) (other than the Nomura Group) shall have acquired
beneficial ownership (as defined in clause (A) above) of shares
of capital stock of the Borrower with 30% or more of the Voting
Power, or during any period of 12 consecutive calendar months,
individuals who were directors of the Borrower on the first day
of such period and any new director (x) whose election by the
board of directors of the Borrower or nomination for election by
the Borrower's stockholders was approved by a vote of at least a
majority of the directors then still in office who either were
directors at the beginning of such period or whose election or
nomination for election was previously so approved or (y) who was
elected to fill a vacancy on such board of directors created in
connection with a spin-off or public offering of common stock of
the Borrower, prior to the date of consummation of such spin-off
or public offering, shall cease to constitute a majority of the
board of directors of the Borrower;
then, and in every such event, the Agent shall (i) if requested by Banks having
more than 50% in aggregate amount of the Commitments, by notice to the Borrower
terminate the Commitments and they shall thereupon terminate, and (ii) if
requested by Banks holding Notes evidencing more than 50% in aggregate principal
amount of the Loans, by notice to the Borrower declare the Loans (together with
accrued interest thereon) to be, and the Loans (together with accrued interest
thereon) shall thereupon become, immediately due
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and payable without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by the Borrower; provided that in the case of any
of the Events of Default specified in paragraph (g) or (h) above, without any
notice to the Borrower or any other act by the Agent or the Banks, the
Commitments shall thereupon terminate and the Loans (together with accrued
interest thereon) shall become immediately due and payable without presentment,
demand, protest or other notice of any kind, all of which are hereby waived by
the Borrower.
SECTION 6.02. Notice of Default. The Agent shall give notice to
the Borrower under Section 6.01(c) promptly upon being requested to do so by the
Required Banks and shall thereupon notify all the Banks thereof.
SECTION 6.03. Rescission. If at any time after termination of the
Commitments and/or acceleration of the maturity of the Loans pursuant to Section
6.01, the Borrower shall pay all arrears of interest and all payments on account
of principal of the Loans which shall have become due otherwise than by
acceleration (with interest on principal at the rates specified in this
Agreement) and all Defaults (other than nonpayment of principal of and accrued
interest on the Loans due and payable solely by virtue of acceleration) shall be
remedied or waived pursuant to Section 9.05, then upon the written consent of
the Required Banks and notice to the Borrower, such termination of the
Commitments and/or such acceleration and their consequences may be rescinded and
annulled; but such action shall not affect any subsequent Default or impair any
right or remedy consequent thereon. The provisions of the preceding sentence are
intended merely to bind the Banks to a decision which may be made at the
election of the Required Banks; they are not intended to benefit the Borrower
and do not give the Borrower the right to require the Banks to rescind or annul
any acceleration hereunder, even if the conditions set forth herein are met.
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ARTICLE VII
THE AGENT
SECTION 7.01. Appointment and Authorization. Each Bank
irrevocably appoints and authorizes the Agent to take such action as agent on
its behalf and to exercise such powers under this Agreement and the Notes as are
delegated to the Agent by the terms hereof or thereof, together with all such
powers as are reasonably incidental thereto.
SECTION 7.02. Agent and Affiliates. Morgan Guaranty Trust Company
of New York shall have the same rights and powers under this Agreement as any
other Bank and may exercise or refrain from exercising the same as though it
were not the Agent, and Morgan Guaranty Trust Company of New York and its
affiliates may accept deposits from, lend money to, and generally engage in any
kind of business with the Borrower or any Subsidiary or affiliate of the
Borrower as if it were not the Agent hereunder.
SECTION 7.03. Action by Agent. The obligations of the Agent
hereunder are only those expressly set forth herein. Without limiting the
generality of the foregoing, the Agent shall not be required to take any action
with respect to any Default, except as expressly provided in Article VI.
SECTION 7.04. Consultation with Experts. The Agent may consult
with legal counsel (who may be counsel for the Borrower), independent public
accountants and other experts selected by it and shall not be liable for any
action taken or omitted to be taken by it in good faith in accordance with the
advice of such counsel, accountants or experts.
SECTION 7.05. Liability of Agent. Neither the Agent nor any of
its affiliates nor any of their respective directors, officers, agents or
employees shall be liable for any action taken or not taken by it in connection
herewith (i) with the consent or at the request of the Required Banks or (ii) in
the absence of its own gross negligence or willful misconduct. Neither the Agent
nor any of its affiliates nor any of their respective directors, officers,
agents or employees shall be responsible for or have any duty to ascertain,
inquire into or verify (i) any statement, warranty or representation made in
connection with this Agreement or any borrowing hereunder; (ii) the performance
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or observance of any of the covenants or agreements of the Borrower; (iii) the
satisfaction of any condition specified in Article III, except receipt of items
required to be delivered to the Agent; or (iv) the validity, effectiveness or
genuineness of this Agreement, the Notes or any other instrument or writing
furnished in connection herewith. The Agent shall not incur any liability by
acting in reliance upon any notice, consent, certificate, statement, or other
writing (which may be a bank wire, telex, facsimile transmission or similar
writing) believed by it to be genuine or to be signed by the proper party or
parties.
SECTION 7.06. Indemnification. Each Bank shall, ratably in
accordance with its Commitment, indemnify the Agent, its affiliates and their
respective directors, officers, agents and employees (to the extent not
reimbursed by the Borrower) against any cost, expense (including counsel fees
and disbursements), claim, demand, action, loss or liability (except such as
result from such indemnitees' gross negligence or willful misconduct) that such
indemnitees may suffer or incur in connection with this Agreement or any action
taken or omitted by such indemnitees hereunder.
SECTION 7.07. Credit Decision. Each Bank acknowledges that it
has, independently and without reliance upon the Agent or any other Bank, and
based on such documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Agreement. Each Bank also
acknowledges that it will, independently and without reliance upon the Agent or
any other Bank, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking any action under this Agreement.
SECTION 7.08. Successor Agent. The Agent may resign at any time
by giving notice thereof to the Banks and the Borrower. Upon any such
resignation, the Borrower shall have the right to appoint a successor Agent from
among the Banks. If no successor Agent shall have been so appointed, and shall
have accepted such appointment, within 30 days after the retiring Agent gives
notice of resignation, then the retiring Agent may, on behalf of the Banks,
appoint a successor Agent, which shall be a commercial bank organized or
licensed under the laws of the United States of America or of any State thereof
and having a combined capital and surplus of at least $300,000,000. Upon the
acceptance of its appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become
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vested with all the rights and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations hereunder. After any
retiring Agent's resignation hereunder as Agent, the provisions of this Article
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was Agent.
SECTION 7.09. Agent's Fee. The Borrower shall pay to the Agent
for its own account fees in the amounts and at the times previously agreed upon
between the Borrower and the Agent.
ARTICLE VIII
CHANGE IN CIRCUMSTANCES
SECTION 8.01. Basis for Determining Interest Rate Inadequate or
Unfair. If on or prior to the first day of any Interest Period for any CD
Loan, Euro-Dollar Loan or Money Market LIBOR Loan:
(a) the Agent is advised by the CD Reference Banks or, under the
circumstances contemplated by the final sentence of the definition of
London Interbank Offered Rate, the Euro-Dollar Reference Banks that
deposits in dollars (in the applicable amounts) are not being offered to
such Reference Banks in the relevant market for such Interest Period, or
(b) in the case of CD Loans or Euro-Dollar Loans, Banks having
50% or more of the aggregate principal amount of the affected Loans
advise the Agent that the Adjusted CD Rate or the London Interbank
Offered Rate, as the case may be, as determined by the Agent will not
adequately and fairly reflect the cost to such Banks of funding their CD
Loans or Euro-Dollar Loans, as the case may be, for such Interest
Period,
the Agent shall forthwith give notice thereof to the Borrower and the Banks,
whereupon until the Agent notifies the Borrower that the circumstances giving
rise to such suspension no longer exist, (i) the obligations of the Banks to
make CD Loans or Euro-Dollar Loans, as the case may be, or to convert
outstanding Loans into CD Loans or Euro-Dollar Loans, as the case may be, shall
be suspended and (ii) each outstanding CD Loan or Euro-Dollar Loan, as the case
may be, shall be converted into a Base Rate Loan on the last day of the then
current Interest Period applicable thereto. Unless
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the Borrower notifies the Agent at least one Domestic Business Day before the
date of any Fixed Rate Borrowing for which a Notice of Borrowing has previously
been given that it elects not to borrow on such date, (i) if such Fixed Rate
Borrowing is a Committed Borrowing, such Borrowing shall instead be made as a
Base Rate Borrowing and (ii) if such Fixed Rate Borrowing is a Money Market
LIBOR Borrowing, the Money Market LIBOR Loans comprising such Borrowing shall
bear interest for each day from and including the first day to but excluding the
last day of the Interest Period applicable thereto at the Base Rate for such
day.
SECTION 8.02. Illegality. If, on or after the date of this
Agreement, the adoption of any applicable law, rule or regulation, or any change
in any applicable law, rule or regulation, or any change in the interpretation
or administration thereof by any governmental authority, central bank or
comparable agency charged with the interpretation or administration thereof, or
compliance by any Bank (or its Euro-Dollar Lending Office) with any request or
directive (whether or not having the force of law) of any such authority,
central bank or comparable agency shall make it unlawful or impossible for any
Bank (or its Euro-Dollar Lending Office) to make, maintain or fund its
Euro-Dollar Loans and such Bank shall so notify the Agent, the Agent shall
forthwith give notice thereof to the other Banks and the Borrower, whereupon
until such Bank notifies the Borrower and the Agent that the circumstances
giving rise to such suspension no longer exist, the obligation of such Bank to
make Euro-Dollar Loans, or to convert outstanding Loans into Euro-Dollar Loans,
shall be suspended. Before giving any notice to the Agent pursuant to this
Section, such Bank shall designate a different Euro-Dollar Lending Office if
such designation will avoid the need for giving such notice and will not, in the
judgment of such Bank, be otherwise disadvantageous to such Bank. If such notice
is given, each Euro-Dollar Loan of such Bank then outstanding shall be converted
to a Base Rate Loan either (a) on the last day of the then current Interest
Period applicable to such Euro-Dollar Loan if such Bank may lawfully continue to
maintain and fund such Loan to such day or (b) immediately if such Bank shall
determine that it may not lawfully continue to maintain and fund such Loan to
such day.
SECTION 8.03. Increased Cost and Reduced Return. (a)d ReIf on or
after (x) the date hereof, in the case of any Committed Loan or any obligation
to make Committed Loans or (y) the date of the related Money Market Quote, in
the case of any Money Market Loan, the adoption of any applicable
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law, rule or regulation, or any change in any applicable law, rule
or regulation, or any change in the interpretation or administration
thereof by any governmental authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance by any Bank (or
its Applicable Lending Office) with any request or directive (whether or not
having the force of law) of any such authority, central bank or comparable
agency shall impose, modify or deem applicable any reserve (including, without
limitation, any such requirement imposed by the Board of Governors of the
Federal Reserve System, but excluding (i) with respect to any CD Loan any such
requirement included in an applicable Domestic Reserve Percentage and (ii) with
respect to any Euro-Dollar Loan any such requirement with respect to which such
Bank is entitled to compensation during the relevant Interest Period under
Section 2.15), special deposit, insurance assessment (excluding, with respect to
any CD Loan, any such requirement reflected in an applicable Assessment Rate) or
similar requirement against assets of, deposits with or for the account of, or
credit extended by, any Bank (or its Applicable Lending Office) or shall impose
on any Bank (or its Applicable Lending Office) or on the United States market
for certificates of deposit or the London interbank market any other condition
affecting its Fixed Rate Loans, its Note or its obligation to make Fixed Rate
Loans and the result of any of the foregoing is to increase the cost to such
Bank (or its Applicable Lending Office) of making or maintaining any Fixed Rate
Loan, or to reduce the amount of any sum received or receivable by such Bank (or
its Applicable Lending Office) under this Agreement or under its Note with
respect thereto, by an amount deemed by such Bank to be material, then, within
15 days after demand by such Bank (with a copy to the Agent), the Borrower shall
pay to such Bank such additional amount or amounts as will compensate such Bank
for such increased cost or reduction.
(b) 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 in any such law, rule or regulation, or any change in
the interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or any request or directive regarding capital adequacy
(whether or not having the force of law) of any such authority, central bank or
comparable agency has or would have the effect of reducing the rate of return on
capital of such Bank (or its Parent) as a consequence of such Bank's obligations
hereunder to a level below that which such Bank (or its
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Parent) could have achieved but for such adoption, change, request or directive
(taking into consideration its policies with respect to capital adequacy) by an
amount deemed by such Bank to be material, then pursuant to paragraph (c) below,
the Borrower shall pay to such Bank such additional amount or amounts as will
compensate such Bank (or its Parent) for such reduction.
(c) Each Bank will promptly notify the Borrower and the Agent of
any event of which it has knowledge, occurring after the date hereof, which will
entitle such Bank to compensation pursuant to this Section. A certificate of a
Bank setting forth such amount or amounts (including computation of such amount
or amounts) as shall be necessary to compensate such Bank or its Parent as
specified in paragraph (a) or (b) above, as the case may be, shall be delivered
to the Borrower and such amount or amounts may be reviewed by the Borrower.
Unless the Borrower disagrees in good faith with the computation of the amount
or amounts in such certificate, the Borrower shall pay to such Bank, within 30
days after receipt by the Borrower of such certificate delivered by such Bank,
the amount shown as due on any such certificate. If the Borrower, after receipt
of any such certificate from a Bank, disagrees with such Bank on the computation
of the amount or amounts owed to such Bank pursuant to paragraph (a) or (b)
above, such Bank and the Borrower shall negotiate in good faith to promptly
resolve such disagreement. In either case, however, such Bank shall have a duty
to mitigate the damages that may arise as a consequence of paragraph (a) or (b)
above (including, without limitation, changing its Applicable Lending Office) to
the extent that such mitigation will not, in the judgment of such Bank, entail
any cost or disadvantage to such Bank that such Bank is not reimbursed or
compensated for by the Borrower.
SECTION 8.04. Taxes. (a) Any and all payments by the Borrower
to or for the account of any Bank or the Agent hereunder or under any Note shall
be made free and clear of and without deduction for any and all present or
future taxes, duties, levies, imposts, deductions, charges or withholdings
imposed by the United States or any political subdivision or taxing authority
thereof, 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 it, by the United States or any political subdivision or taxing
authority thereof (all such non-excluded taxes, duties, levies, imposts,
deductions, charges, withholdings and liabilities being hereinafter referred to
as "Taxes"). If the Borrower shall be required
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by law to deduct any Taxes from or in respect of any sum payable hereunder or
under any Note to any Bank or the Agent, (i) the sum payable shall be increased
as necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section 8.04) 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 been made, (ii) the Borrower shall make such
deductions, (iii) the Borrower shall pay the full amount deducted to the
relevant taxation authority or other authority in accordance with applicable law
and (iv) the Borrower shall furnish to the Agent, at its address referred to in
Section 9.01, the original or a certified copy of a receipt evidencing payment
thereof.
(b) In addition, the Borrower agrees to pay any present or future
stamp or documentary taxes and any other excise or property taxes, or charges or
similar levies which arise from any payment made hereunder or under any Note or
from the execution or delivery of, or otherwise with respect to, this Agreement
or any Note (hereinafter referred to as "Other Taxes").
(c) The Borrower agrees to indemnify each Bank and the Agent for
the full amount of Taxes or Other Taxes (including, without limitation, any
Taxes or Other Taxes imposed or asserted by any jurisdiction on amounts payable
under this Section 8.04) paid by such Bank or the Agent (as the case may be) and
any liability (including penalties, interest and reasonable out-of-pocket
expenses) arising therefrom or with respect thereto (other than any such
liability that results from the gross negligence or willful misconduct of such
Bank and the Agent, and whether or not such Taxes or Other Taxes were correctly
or legally asserted by the relevant taxing authority or other governmental
authority). This indemnification shall be made within 30 days from the date such
Bank or the Agent (as the case may be) makes written demand therefor. If any
Bank or the Agent receives a refund in respect of any Taxes or Other Taxes for
which such Bank or the Agent has received payment from the Borrower hereunder it
shall promptly repay such refund (including any interest received by such Bank
or the Agent from the taxing authority with respect to the refund with respect
to such Taxes or Other Taxes) to the Borrower, net of all reasonable
out-of-pocket expenses of such Bank; provided that the Borrower, upon the
request of such Bank or the Agent, agrees to return such refund (plus penalties,
interest or other charges) to such Bank or the Agent in the event such Bank or
the Agent is required to repay such refund.
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(d) Each Bank organized under the laws of a jurisdiction outside
the United States, on or prior to the date of its execution and delivery of this
Agreement in the case of each Bank listed on the signature pages hereof and on
or prior to the date on which it becomes a Bank in the case of each other Bank,
and from time to time thereafter if requested in writing by the Borrower (but
only so long as such Bank remains lawfully able to do so), shall provide the
Borrower with Internal Revenue Service Form 1001 or 4224, as appropriate, or any
successor form prescribed by the Internal Revenue Service, duly executed by such
Bank, certifying that such Bank is entitled to benefits under an income tax
treaty to which the United States is a party which reduces the rate of
withholding tax on payments of interest or certifying that the income receivable
pursuant to this Agreement is effectively connected with the conduct of a trade
or business in the United States. If the form provided by a Bank at the time
such Bank first becomes a party to this Agreement indicates a United States
interest withholding tax rate in excess of zero, withholding tax at such rate
shall be considered excluded from "Taxes" as defined in Section 8.04(a).
(e) Each Bank further agrees to promptly notify the Borrower if
such Bank changes its Applicable Lending Office and, upon written request from
the Borrower, deliver Forms 1001 or 4224 required pursuant to Section 8.04(d)
prior to the immediately following due date of any payment by the Borrower
hereunder.
(f) The Borrower shall not be required to pay any additional
amounts to any Bank or the Agent in respect of Taxes and Other Taxes pursuant to
paragraphs (a), (b) and (c) above if the obligation to pay such additional
amounts would not have arisen but for a failure by such Bank or Agent to comply,
if required, with the provisions of paragraphs (d) and (e) above unless such
failure results from (i) a change in applicable law, regulation or official
interpretation thereof or (ii) an amendment, modification or revocation of any
applicable tax treaty or a change in official position regarding the application
or interpretation thereof, in each case after the date hereof or after such Bank
became a party hereto; provided, however, that should a Bank, which is otherwise
exempt from or subject to a reduced rate of withholding tax, become subject to
Taxes because of its failure to deliver a form required hereunder, the Borrower
shall take such steps as such Bank shall reasonably request to assist such Bank
to recover such Taxes.
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(g) Any Bank claiming any additional amounts payable under this
Section 8.04 shall (i) to the extent legally able to do so, upon reasonable
written request from the Borrower, file any certificate or document if such
filing would avoid the need for or reduce the amount of any such additional
amounts which may thereafter accrue, and the Borrower shall not be obligated to
pay such additional amounts if, after the Borrower's request, any Bank could
have filed such certificate or document and failed to do so; or (ii) consistent
with legal and regulatory restrictions, use reasonable efforts to change the
jurisdiction of its Applicable Lending Office if the making of such change would
avoid the need for or reduce the amount of any additional amounts which may
thereafter accrue and would not, in the judgment of such Bank, be otherwise
disadvantageous to such Bank.
SECTION 8.05. Base Rate Loans Substituted for Affected Fixed Rate
Loans. If (i) the obligation of any Bank to make or maintain Euro-Dollar Loans
has been suspended pursuant to Section 8.02 or (ii) any Bank has demanded
compensation under Section 8.03 or 8.04 with respect to its CD Loans or
Euro-Dollar Loans and the Borrower shall, by at least five Euro-Dollar Business
Days' prior notice to such Bank through the Agent, have elected that the
provisions of this Section shall apply to such Bank, then, unless and until such
Bank notifies the Borrower that the circumstances giving rise to such suspension
or demand for compensation no longer exist:
(a) all Loans which would otherwise be made by such Bank as (or
continued as or converted into) CD Loans or Euro-Dollar Loans, as the
case may be, shall instead be Base Rate Loans (on which interest and
principal shall be payable contemporaneously with the related Fixed Rate
Loans of the other Banks), and
(b) after each of its CD Loans or Euro-Dollar Loans, as the case
may be, has been repaid (or converted to a Base Rate Loan), all payments
of principal which would otherwise be applied to repay such Fixed Rate
Loans shall be applied to repay its Base Rate Loans instead.
If such Bank notifies the Borrower that the circumstances giving rise to such
notice no longer apply, the principal amount of each such Base Rate Loan shall
be converted into a CD Loan or Euro-Dollar Loan, as the case may be, on the
first day of the next succeeding Interest Period applicable
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to the related CD Loans or Euro-Dollar Loans of the other Banks.
SECTION 8.06. Substitution of Bank. If any Bank (i) has demanded
compensation for increased costs pursuant to Section 8.03 or 8.04 or (ii) has
determined that the making or continuation of any Euro-Dollar Loan has become
unlawful or impermissible pursuant to Section 8.02 and similar additional
interest or compensation has not been demanded by, or a similar determination
has not been made by, all of the Banks, the Borrower shall have the right to
designate an Assignee which is not an affiliate of the Borrower to purchase for
cash, pursuant to an Assignment and Assumption Agreement substantially in the
form of Exhibit G hereto, the outstanding Loans and Commitment of such Bank and
to assume all of such Bank's other rights and obligations hereunder without
recourse to or warranty by, or expense to, such Bank, for a purchase price equal
to the principal amount of all of such Bank's outstanding Loans plus any accrued
but unpaid interest thereon and the accrued but unpaid facility fees in respect
of that Bank's Commitment hereunder plus such amount, if any, as would be
payable pursuant to Section 2.13 if the outstanding Loans of such Bank were
prepaid in their entirety on the date of consummation of such assignment.
SECTION 8.07. Compensation. The Borrower shall not be liable for
compensating any Bank under Sections 2.13, 8.03 and 8.04 for any funding losses,
increased costs or taxes incurred by such Bank more than 30 days prior to such
Bank's written notice of its intention to demand payment therefor.
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ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Notices. All notices, requests and other
communications to any party hereunder shall be in writing (including bank wire,
telex, facsimile transmission or similar writing) and shall be given to such
party: (x) in the case of the Borrower or the Agent, at its address or telex or
facsimile number set forth on the signature pages hereof, (y) in the case of any
Bank, at its address or telex or facsimile number set forth in its
Administrative Questionnaire or (z) in the case of any party, such other address
or telex or facsimile number as such party may hereafter specify for the purpose
by notice to the Agent and the Borrower. Each such notice, request or other
communication shall be effective (i) if given by telex, when such telex is
transmitted to the telex number specified in this Section and the appropriate
answerback is received, (ii) if given by mail, 72 hours after such communication
is deposited in the mails with first class postage prepaid, addressed as
aforesaid or (iii) if given by any other means, when received at the address
specified in this Section; provided that notices to the Agent under Article II
or Article VIII shall not be effective until received.
SECTION 9.02. No Waivers. No failure or delay by the Agent or any
Bank in exercising any right, power or privilege hereunder or under any Note
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 9.03. Expenses; Indemnification. (a) The Borrower
shall pay (i) all reasonable out-of-pocket expenses of the Agent, including
reasonable fees and disbursements of special counsel for the Agent, in
connection with the preparation and administration of this Agreement, any waiver
or consent hereunder or any amendment hereof or any Default or alleged Default
hereunder and (ii) if an Event of Default occurs, all reasonable out-of-pocket
expenses incurred by the Agent and each Bank, including reasonable fees and
disbursements of counsel, in connection with such Event of Default and
collection, bankruptcy, insolvency and other enforcement proceedings resulting
therefrom.
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(b) The Borrower agrees to indemnify the Agent and each Bank,
their respective affiliates and the respective directors, officers, agents and
employees of the foregoing (each an "Indemnitee") and hold each Indemnitee
harmless from and against any and all liabilities, losses, damages, costs and
reasonable out-of-pocket expenses of any kind (including, without limitation,
the reasonable fees and disbursements of counsel) which were actually incurred
by such Indemnitee in connection with any investigative, administrative or
judicial proceeding (whether or not such Indemnitee shall be designated a party
thereto) brought or threatened relating to or arising out of this Agreement or
any actual or proposed use of proceeds of Loans hereunder; provided that no
Indemnitee shall have the right to be indemnified hereunder for such
Indemnitee's own gross negligence or willful misconduct.
SECTION 9.04. Sharing of Set-Offs. Each Bank agrees that if it
shall, by exercising any right of set-off or counterclaim or otherwise, receive
payment of a proportion of the aggregate amount of principal and interest due
with respect to any Note held by it which is greater than the proportion
received by any other Bank in respect of the aggregate amount of principal and
interest due with respect to any Note held by such other Bank, the Bank
receiving such proportionately greater payment shall purchase such
participations in the Notes held by the other Banks, and such other adjustments
shall be made, as may be required so that all such payments of principal and
interest with respect to the Notes held by the Banks shall be shared by the
Banks pro rata; provided that nothing in this Section shall impair the right of
any Bank to exercise any right of set-off or counterclaim it may have and to
apply the amount subject to such exercise to the payment of indebtedness of the
Borrower other than its indebtedness under the Notes.
SECTION 9.05. Amendments and Waivers. Any provision of this
Agreement or the Notes may be amended or waived if, but only if, such amendment
or waiver is in writing and is signed by the Borrower and the Required Banks
(and, if the rights or duties of the Agent are affected thereby, by the Agent);
provided that no such amendment or waiver shall, unless signed by all the Banks,
(i) increase or decrease the Commitment of any Bank (except for a ratable
decrease in the Commitments of all Banks) or subject any Bank to any additional
obligation, (ii) reduce the principal of or rate of interest on any Loan or any
fees hereunder, (iii) postpone the scheduled maturity of any payment of
principal of or interest on any Loan or any fees hereunder or for termination of
any Commitment or (iv) change the
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percentage of the Commitments or of the aggregate unpaid principal amount of the
Notes, or the number of Banks, which shall be required for the Banks or any of
them to take any action under this Section or any other provision of this
Agreement.
SECTION 9.06. Successors and Assigns. (a) The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns, except that the Borrower may not
assign or otherwise transfer any of its rights under this Agreement without the
prior written consent of all Banks.
(b) Any Bank may at any time grant to one or more banks or other
institutions (each a "Participant") participating interests in its Commitment or
any or all of its Loans. In the event of any such grant by a Bank of a
participating interest to a Participant, whether or not upon notice to the
Borrower and the Agent, such Bank shall remain responsible for the performance
of its obligations hereunder, and the Borrower 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. Any agreement pursuant to which any Bank
may grant such a participating interest shall provide that such Bank shall
retain the sole right and responsibility to enforce the obligations of the
Borrower hereunder including, without limitation, the right to approve any
amendment, modification or waiver of any provision of this Agreement; provided
that such participation agreement may provide that such Bank will not agree to
any modification, amendment or waiver of this Agreement described in clause (i),
(ii) or (iii) of Section 9.05 without the consent of the Participant. The
Borrower agrees that each Participant shall, to the extent provided in its
participation agreement, be entitled to the benefits of Sections 2.13 and 2.15
and Article VIII with respect to its participating interest. An assignment or
other transfer which is not permitted by subsection (c) or (d) below shall be
given effect for purposes of this Agreement only to the extent of a
participating interest granted in accordance with this subsection (b).
(c) Any Bank may at any time assign to one or more banks or other
institutions (each an "Assignee") all, or a proportionate part of all, of its
rights and obligations under this Agreement and the Notes, and such Assignee
shall assume such rights and obligations, pursuant to an Assignment and
Assumption Agreement in substantially the form of Exhibit G hereto executed by
such Assignee and such transferor Bank, with (and subject to) the subscribed
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consent of the Borrower and the Agent; provided that such assignment may, but
need not, include rights of the transferor Bank in respect of outstanding Money
Market Loans; and provided further that the interest of the Assignee shall be in
a minimum amount equivalent to an original Commitment of $10,000,000 and the
collective interest of the transferor Bank and its affiliates shall be in a
minimum amount equivalent to an original Commitment of $10,000,000 unless, in
the case of the transferor Bank and its affiliates, they have no Commitment
after giving effect to such assignment. Upon execution and delivery of such
instrument and payment by such Assignee to such transferor Bank of an amount
equal to the purchase price agreed between such transferor Bank and such
Assignee, such Assignee shall be a Bank party to this Agreement and shall have
all the rights and obligations of a Bank with a Commitment as set forth in such
instrument of assumption, and the transferor Bank shall be released from its
obligations hereunder to a corresponding extent, and no further consent or
action by any party shall be required. Upon the consummation of any assignment
pursuant to this subsection (c), the transferor Bank, the Agent and the Borrower
shall make appropriate arrangements so that, if required, a new Note is issued
to the Assignee. In connection with any such assignment, the transferor Bank
shall pay to the Agent an administrative fee for processing such assignment in
the amount of $2,500. If the Assignee is not incorporated under the laws of the
United States of America or a state thereof, it shall deliver to the Borrower
and the Agent certification as to exemption from deduction or withholding of any
United States federal income taxes in accordance with Section 8.04.
(d) Any Bank may at any time assign all or any portion of its
rights under this Agreement and its Note to a Federal Reserve Bank. No such
assignment shall release the transferor Bank from its obligations hereunder.
(e) No Assignee, Participant or other transferee of any Bank's
rights shall be entitled to receive any greater payment under Section 8.03 or
8.04 than such Bank would have been entitled to receive with respect to the
rights transferred, unless such transfer is made with the Borrower's prior
written consent or by reason of the provisions of Section 8.02, 8.03 or 8.04
requiring such Bank to designate a different Applicable Lending Office under
certain circumstances or at a time when the circumstances giving rise to such
greater payment did not exist.
(f) Any Bank may, in connection with any assignment or
participation or proposed assignment or
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participation pursuant to this Section 9.06, disclose to the Assignee or
Participant or proposed Assignee or Participant any information relating to the
Borrower or its Subsidiaries furnished to such Bank by the Agent or by or on
behalf of the Borrower; provided that, prior to any such disclosure, such
Assignee or Participant or proposed Assignee or Participant shall agree to
preserve in accordance with Section 9.11 the confidentiality of any confidential
information described therein.
SECTION 9.07. Collateral. Each of the Banks represents to the
Agent and each of the other Banks that it in good faith is not relying upon any
"margin stock" (as defined in Regulation U) as collateral in the extension or
maintenance of the credit provided for in this Agreement.
SECTION 9.08. Governing Law; Submission to Jurisdiction. This
Agreement and each Note shall be governed by and construed in accordance with
the laws of the State of New York. The Borrower hereby submits to the
nonexclusive jurisdiction of the United States District Court for the Southern
District of New York and of any New York State court sitting in New York City
for purposes of all legal proceedings arising out of or relating to this
Agreement or the Notes or the transactions contemplated hereby. The Borrower
irrevocably waives, to the fullest extent permitted by law, any objection which
it may now or hereafter have to the laying of the venue of any such proceeding
brought in such a court and any claim that any such proceeding brought in such a
court has been brought in an inconvenient forum.
SECTION 9.09. Counterparts; Integration. 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 constitutes the entire agreement and understanding
among the parties hereto and supersedes any and all prior agreements and
understandings, oral or written, relating to the subject matter hereof.
SECTION 9.10. WAIVER OF JURY TRIAL. EACH OF THE BORROWER, THE
AGENT AND THE BANKS HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY
IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
NOTES OR THE TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 9.11. Confidentiality. Subject to Section 9.06(f), the
Banks shall hold all nonpublic information obtained pursuant to the requirements
of this Agreement and
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identified as such by the Borrower in accordance with such Bank's customary
procedures for handling confidential information of this nature and in
accordance with safe and sound banking practices and in any event may make
disclosure reasonably required by a bona fide offeree or transferee in
connection with the contemplated transfer, or as required or requested by any
governmental authority or representative thereof, or pursuant to legal process,
or to its accountants, lawyers and other advisors, and shall require any such
offeree or transferee to agree (and require any of its offerees, transferees or
participants to agree) to comply with this Section 9.11.
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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.
AT&T CAPITAL CORPORATION
By __________________________________
Title:
Commitments
$ MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By __________________________________
Title:
$ [OTHER BANKS]
By __________________________________
Title:
_________________________
Total Commitments
$800,000,000
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Agent
By __________________________________
Title:
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EXHIBIT A
NOTE
New York, New York
, 19
For value received, AT&T Capital Corporation, a Delaware corporation
(the "Borrower"), promises to pay to the order of
(the "Bank"), for the account of its Applicable
Lending Office, the unpaid principal amount of each Loan made by the Bank to the
Borrower pursuant to the Credit Agreement referred to below on the maturity date
provided for in the Credit Agreement. The Borrower promises to pay interest on
the unpaid principal amount of each such Loan on the dates and at the rate or
rates provided for in the Credit Agreement. All such payments of principal and
interest shall be made in lawful money of the United States in Federal or other
immediately available funds at the office of Morgan Guaranty Trust Company of
New York, 60 Wall Street, New York, New York.
All Loans made by the Bank, the respective types thereof and all
repayments of the principal thereof shall be recorded by the Bank and, if the
Bank so elects in connection with any transfer or enforcement hereof,
appropriate notations to evidence the foregoing information with respect to each
such Loan then outstanding may be endorsed by the Bank on the schedule attached
hereto, or on a continuation of such schedule attached to and made a part
hereof; provided that the failure of the Bank to make any such recordation or
endorsement shall not affect the obligations of the Borrower hereunder or under
the Credit Agreement.
<PAGE>
<PAGE>
This note is one of the Notes referred to in and subject to the terms of
the $800,000,000 Credit Agreement dated as of September 16, 1996 among the
Borrower, the banks party thereto and Morgan Guaranty Trust Company of New York,
as Agent (as the same may be amended from time to time, the "Credit Agreement").
Terms defined in the Credit Agreement are used herein with the same meanings.
Reference is made to the Credit Agreement for provisions for the mandatory and
optional prepayment hereof and the acceleration of the maturity hereof.
AT&T CAPITAL CORPORATION
By________________________
Title:
2
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Note (cont'd)
LOANS AND PAYMENTS OF PRINCIPAL
================================================================================
Amount of
Amount of Type of Principal Notation
Date Loan Loan Repaid Made By
================================================================================
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
3
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<PAGE>
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
4
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EXHIBIT B
Form of Money Market Quote Request
[Date]
To: Morgan Guaranty Trust Company of New York
(the "Agent")
From: AT&T Capital Corporation
Re: $800,000,000 Credit Agreement (as amended, the "Credit
Agreement") dated as of September 16, 1996 among the Borrower,
the Banks party thereto and the Agent
We hereby give notice pursuant to Section 2.03 of the Credit
Agreement that we request Money Market Quotes for the following proposed Money
Market Borrowing(s):
Date of Borrowing: __________________
Principal Amount(1) Interest Period(2)
$
Such Money Market Quotes should offer a Money Market [Margin]
[Absolute Rate]. [The applicable base rate is the London Interbank Offered
Rate.]
Terms used herein have the meanings assigned to them in the
Credit Agreement.
AT&T CAPITAL CORPORATION
By________________________
Title:
- -------------------
(1) Amount must be $5,000,000 or a larger multiple of $1,000,000.
(2) Not less than one month (LIBOR Auction) or not less than 7 days (Absolute
Rate Auction), subject to the provisions of the definition of Interest
Period.
5
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EXHIBIT C
Form of Invitation for Money Market Quotes
[Date]
To: [Name of Bank]
Re: Invitation for Money Market Quotes to AT&T Capital Corporation
(the "Borrower")
Pursuant to Section 2.03 of the $800,000,000 Credit Agreement (as
amended, the "Credit Agreement") dated as of September 16, 1996 among the
Borrower, the Banks parties thereto and the undersigned, as Agent, we are
pleased on behalf of the Borrower to invite you to submit Money Market Quotes to
the Borrower for the following proposed Money Market Borrowing(s):
Date of Borrowing: __________________
Principal Amount Interest Period
$
Such Money Market Quotes should offer a Money Market [Margin]
[Absolute Rate]. [The applicable base rate is the London Interbank Offered
Rate.]
Please respond to this invitation by no later than [4:00 P.M.]
[9:30 A.M.] (New York City time) on [date].
Terms used herein have the meanings assigned to them in the
Credit Agreement.
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Agent
By______________________
Authorized Officer
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EXHIBIT D
Form of Money Market Quote
To: Morgan Guaranty Trust Company of New York,
as Agent
Re: Money Market Quote to AT&T Capital Corporation (the
"Borrower")
In response to your invitation on behalf of the Borrower dated
_____________, 19__, we hereby make the following Money Market Quote on the
following terms:
1. Quoting Bank: ________________________________
2. Person to contact at Quoting Bank:
_______________________________________________
3. Date of Borrowing: ____________________*
4. We hereby offer to make Money Market Loan(s) in the following principal
amounts, for the following Interest Periods and at the following rates:
Principal Interest Money Market
Amount** Period*** [Margin****] [Absolute Rate*****]
$
$
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<PAGE>
[Provided, that the aggregate principal amount of Money Market Loans for
which the above offers may be accepted shall not exceed
$____________.]**
We understand and agree that the offer(s) set forth above,
subject to the satisfaction of the applicable conditions set forth in the
$800,000,000 Credit Agreement (as amended, the "Credit Agreement") dated as of
September 16, 1996 among the Borrower, the Banks party thereto and yourselves,
as Agent, irrevocably obligates us to make the Money Market Loan(s) for which
any offer(s) are accepted, in whole or in part.
Terms used herein have the meanings assigned to them in the
Credit Agreement.
Very truly yours,
[NAME OF BANK]
Dated:_______________ By:__________________________
Authorized Officer
2
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* As specified in the related Invitation.
** Principal amount bid for each Interest Period may not exceed principal
amount requested. Specify aggregate limitation if the sum of the
individual offers exceeds the amount the Bank is willing to lend. Bids
must be made for $5,000,000 or a larger multiple of $1,000,000.
*** Not less than one month or not less than 7 days, as specified in the
related Invitation. No more than five bids are permitted for each
Interest Period.
**** Margin over or under the London Interbank Offered Rate determined for
the applicable Interest Period. Specify percentage (to the nearest
1/10,000 of 1%) and specify whether "PLUS" or "MINUS".
***** Specify rate of interest per annum (to the nearest 1/10,000th of 1%).
3<PAGE>
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EXHIBIT E
OPINION OF
COUNSEL FOR THE BORROWER
To the Banks and the Agent
Referred to Below
c/o Morgan Guaranty Trust Company
of New York, as Agent
60 Wall Street
New York, New York 10260
Dear Sirs:
I am [General Counsel] [Assistant General Counsel] of AT&T
Capital Corporation (the "Borrower"), and as such, have acted as counsel for the
Borrower in connection with the $800,000,000 Credit Agreement (the "Credit
Agreement") dated as of September 16, 1996 among the Borrower, the banks listed
on the signature pages thereof and Morgan Guaranty Trust Company of New York, as
Agent. Terms defined in the Credit Agreement are used herein as therein defined.
This opinion is being rendered to you at the request of the Borrower pursuant to
Section 3.01(d) of the Credit Agreement.
I have examined originals or copies, certified or otherwise
identified to my satisfaction, of such documents, corporate records,
certificates of public officials and other instruments and have conducted such
other investigations of fact and law as I have deemed necessary or advisable for
purposes of this opinion.
Upon the basis of the foregoing, I am of the opinion that:
1. The Borrower is a corporation duly incorporated, validly
existing and in good standing under the laws of Delaware, and has all corporate
power and all governmental licenses, authorizations, consents and approvals
required to carry on its business as now conducted, except those which the
failure to have would not have a Material Adverse Effect.
2. The execution, delivery and performance by the Borrower of the
Credit Agreement and the Notes are within the Borrower's corporate power, have
been duly authorized by all necessary corporate action, require no action by or
in respect of, or filing with, any governmental body, agency or official and do
not contravene, or constitute a default
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under, any provision of applicable law or regulation or of the certificate of
incorporation or by-laws of the Borrower or of any material agreement, judgment,
injunction, order, decree or other material instrument binding upon the Borrower
or result in the creation or imposition of any Lien on any asset of the
Borrower.
3. The Credit Agreement constitutes a valid and binding agreement
of the Borrower and the Notes constitute valid and binding obligations of the
Borrower, in each case enforceable against the Borrower in accordance with their
respective terms, except as the same may be limited by bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium and similar laws affecting
creditors' rights generally and by general principles of equity (regardless of
whether considered in a proceeding in equity or at law).
4. There is no action, suit or proceeding pending against, or to
the best of my knowledge threatened against, the Borrower or any of its
Consolidated Subsidiaries before any court or arbitrator or any governmental
body, agency or official, in which there is a reasonable probability of an
adverse decision which would have a Material Adverse Effect or which in any
manner draws into question the validity or enforceability of the Credit
Agreement or the Notes.
5. Each of the Borrower's Consolidated Subsidiaries which is a
corporation is a corporation validly existing and in good standing under the
laws of its jurisdiction of incorporation, and has all corporate power and all
governmental licenses, authorizations, consents and approvals required to carry
on its business as now conducted, except those which the failure to have would
not have a Material Adverse Effect.
I am a member of the Bar of the State of New York and the
foregoing opinion is limited to the laws of the State of New York, the federal
laws of the United States of America and the General Corporation Law of the
State of Delaware. In giving the foregoing opinion, I express no opinion as to
the effect (if any) of any law of any jurisdiction (except the State of New
York) in which any Bank is located which limits the rate of interest that such
Bank may charge or collect.
This opinion is rendered solely to you in connection with the
above matter. This opinion may not be relied upon by you for any other purpose
or relied upon by any other person without my prior written consent.
Very truly yours,
2
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EXHIBIT F
OPINION OF
DAVIS POLK & WARDWELL, SPECIAL COUNSEL
FOR THE AGENT
To the Banks and the Agent
Referred to Below
c/o Morgan Guaranty Trust Company
of New York, as Agent
60 Wall Street
New York, New York 10260
Dear Sirs:
We have participated in the preparation of the $800,000,000
Credit Agreement (the "Credit Agreement") dated as of September 16, 1996 among
AT&T Capital Corporation, a Delaware corporation (the "Borrower"), the banks
listed on the signature pages thereof (the "Banks") and Morgan Guaranty Trust
Company of New York, as Agent (the "Agent"), and have acted as special counsel
for the Agent for the purpose of rendering this opinion pursuant to Section
3.01(c) of the Credit Agreement. Terms defined in the Credit Agreement are used
herein as therein defined.
We have examined originals or copies, certified or otherwise
identified to our satisfaction, of such documents, corporate records,
certificates of public officials and other instruments and have conducted such
other investigations of fact and law as we have deemed necessary or advisable
for purposes of this opinion.
Upon the basis of the foregoing, we are of the opinion that:
1. The execution, delivery and performance by the Borrower of the
Credit Agreement and the Notes are within the Borrower's corporate power and
have been duly authorized by all necessary corporate action.
2. The Credit Agreement constitutes a valid and binding agreement
of the Borrower and the Notes constitute valid and binding obligations of the
Borrower, in each case enforceable against the Borrower in accordance with their
respective terms, except as the same may be limited by
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bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium and
similar laws affecting creditors' rights generally and by general principles of
equity (regardless of whether considered in a proceeding in equity or at law).
We are members of the Bar of the State of New York and the
foregoing opinion is limited to the laws of the State of New York, the federal
laws of the United States of America and the General Corporation Law of the
State of Delaware. In giving the foregoing opinion, we express no opinion as to
the effect (if any) of any law of any jurisdiction (except the State of New
York) in which any Bank is located which limits the rate of interest that such
Bank may charge or collect.
This opinion is rendered solely to you in connection with the
above matter. This opinion may not be relied upon by you for any other purpose
or relied upon by any other person without our prior written consent.
Very truly yours,
2
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EXHIBIT G
ASSIGNMENT AND ASSUMPTION AGREEMENT
AGREEMENT dated as of _________, ____ among [ASSIGNOR] (the
"Assignor"), [ASSIGNEE] (the "Assignee"), AT&T CAPITAL CORPORATION (the
"Borrower") and MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Agent (the
"Agent").
W I T N E S S E T H
WHEREAS, this Assignment and Assumption Agreement (the
"Agreement") relates to the $800,000,000 Credit Agreement dated as of September
16, 1996 among the Borrower, the Assignor and the other Banks party thereto, as
Banks, and the Agent (as amended, the "Credit Agreement");
WHEREAS, as provided under the Credit Agreement, the Assignor has
a Commitment to make Committed Loans to the Borrower in an aggregate principal
amount at any time outstanding not to exceed $__________;
WHEREAS, [Committed] Loans made to the Borrower by the Assignor
under the Credit Agreement in the aggregate principal amount of $__________ are
outstanding at the date hereof; and
WHEREAS, the Assignor proposes to assign to the Assignee all of
the rights of the Assignor under the Credit Agreement in respect of a portion of
its Commitment thereunder in an amount equal to $__________ (the "Assigned
Amount"), together with a corresponding portion of its outstanding [Committed]
Loans, and the Assignee proposes to accept assignment of such rights and assume
the corresponding obligations from the Assignor on such terms;
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements contained herein, the parties hereto agree as follows:
SECTION 1. Definitions. All capitalized terms not otherwise
defined herein shall have the respective meanings set forth in the Credit
Agreement.
SECTION 2. Assignment. The Assignor hereby assigns and sells to
the Assignee all of the rights of the
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Assignor under the Credit Agreement to the extent of the Assigned Amount, and
the Assignee hereby accepts such assignment from the Assignor and assumes all of
the obligations of the Assignor under the Credit Agreement to the extent of the
Assigned Amount, including the purchase from the Assignor of the corresponding
portion of the principal amount of the [Committed] Loans made by the Assignor
outstanding at the date hereof. Upon the execution and delivery hereof by the
Assignor, the Assignee, the Borrower and the Agent and the payment of the
amounts specified in Section 3 hereof required to be paid on the date hereof (i)
the Assignee shall, as of the date hereof, succeed to the rights and be
obligated to perform the obligations of a Bank under the Credit Agreement with a
Commitment in an amount equal to the Assigned Amount, and (ii) the Commitment of
the Assignor shall, as of the date hereof, be reduced by a like amount and the
Assignor released from its obligations under the Credit Agreement to the extent
such obligations have been assumed by the Assignee. The assignment provided for
herein shall be without recourse to the Assignor.
SECTION 3. Payments. As consideration for the assignment and sale
contemplated in Section 2 hereof, the Assignee shall pay to the Assignor on the
date hereof in Federal funds the amount heretofore agreed between them. It is
understood that commitment and/or facility fees accrued to the date hereof in
respect of the Assigned Amount are for the account of the Assignor and such fees
accruing from and including the date hereof are for the account of the Assignee.
Each of the Assignor and the Assignee hereby agrees that if it receives any
amount under the Credit Agreement which is for the account of the other party
hereto, it shall receive the same for the account of such other party to the
extent of such other party's interest therein and shall promptly pay the same to
such other party.
SECTION 4. Consent of the Borrower and the Agent. This Agreement
is conditioned upon the consent of the Borrower and the Agent pursuant to
Section 9.06(c) of the Credit Agreement. The execution of this Agreement by the
Borrower and the Agent is evidence of this consent. Pursuant to Section 9.06(c)
the Borrower agrees to execute and deliver a Note payable to the order of the
Assignee to evidence the assignment and assumption provided for herein.
SECTION 5. Non-Reliance on Assignor. The Assignor makes no
representation or warranty in connection with, and shall have no responsibility
with respect to, the solvency, financial condition, or statements of the
Borrower, or the validity and enforceability of the obligations of the Borrower
in respect of the Credit
2
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Agreement or any Note. The Assignee acknowledges that it has, independently and
without reliance on the Assignor, and based on such documents and information as
it has deemed appropriate, made its own credit analysis and decision to enter
into this Agreement and will continue to be responsible for making its own
independent appraisal of the business, affairs and financial condition of the
Borrower.
SECTION 6. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
SECTION 7. Counterparts. 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.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered by their duly authorized officers as of the date first
above written.
[ASSIGNOR]
By_________________________
Title:
[ASSIGNEE]
By__________________________
Title:
AT&T CAPITAL CORPORATION
By__________________________
Title:
MORGAN GUARANTY TRUST
COMPANY OF NEW YORK, as Agent
By__________________________
Title:
3
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$1,000,000,000
CREDIT AGREEMENT
dated as of
September 16, 1996
among
AT&T Capital Corporation
The Banks Listed Herein
and
Morgan Guaranty Trust Company of New York,
as Agent
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TABLE OF CONTENTS
<TABLE>
<S> <C> <C>
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions............................................ 1
SECTION 1.02. Accounting Terms and Determinations.................... 14
SECTION 1.03. Types of Borrowings.................................... 14
SECTION 1.04. Basis for Ratings...................................... 15
ARTICLE II
THE CREDITS
SECTION 2.01. Commitments to Lend.................................... 15
SECTION 2.02. Notice of Committed Borrowing.......................... 15
SECTION 2.03. Money Market Borrowings................................ 16
SECTION 2.04. Notice to Banks; Funding of Loans...................... 19
SECTION 2.05. Notes.................................................. 20
SECTION 2.06. Maturity of Loans; Termination of Commitments.......... 21
SECTION 2.07. Interest Rates......................................... 21
SECTION 2.08. Facility Fees.......................................... 24
SECTION 2.09. Optional Termination or Reduction of Commitments....... 25
SECTION 2.10. Method of Electing Interest Rates...................... 25
SECTION 2.11. Optional Prepayments................................... 26
SECTION 2.12. General Provisions as to Payments...................... 27
SECTION 2.13. Funding Losses......................................... 28
SECTION 2.14. Computation of Interest and Fees....................... 28
SECTION 2.15. Regulation D Compensation.............................. 29
ARTICLE III
CONDITIONS
SECTION 3.01. Effectiveness.......................................... 29
SECTION 3.02. Borrowings............................................. 30
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Corporate Existence and Power.......................... 31
SECTION 4.02. Corporate and Governmental Authorization; No
Contravention ........................................ 31
SECTION 4.03. Binding Effect......................................... 31
</TABLE>
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<TABLE>
<S> <C> <C>
SECTION 4.04. Financial Information.................................. 31
SECTION 4.05. Litigation............................................. 32
SECTION 4.06. Subsidiaries........................................... 32
SECTION 4.07. Not an Investment Company.............................. 32
SECTION 4.08. Full Disclosure........................................ 33
ARTICLE V
COVENANTS
SECTION 5.01. Information............................................ 33
SECTION 5.02. Maintenance of Existence............................... 34
SECTION 5.03. Interest Coverage...................................... 34
SECTION 5.04. Debt................................................... 34
SECTION 5.05. Minimum Consolidated Tangible Net Worth................ 34
SECTION 5.06. Restricted Payments.................................... 34
SECTION 5.07. Negative Pledge........................................ 35
SECTION 5.08. Consolidations, Mergers and Sales of Assets............ 37
SECTION 5.09. Use of Proceeds........................................ 37
ARTICLE VI
DEFAULTS
SECTION 6.01. Events of Default...................................... 38
SECTION 6.02. Notice of Default...................................... 40
SECTION 6.03. Rescission............................................. 40
ARTICLE VII
THE AGENT
SECTION 7.01. Appointment and Authorization.......................... 41
SECTION 7.02. Agent and Affiliates................................... 41
SECTION 7.03. Action by Agent........................................ 41
SECTION 7.04. Consultation with Experts.............................. 41
SECTION 7.05. Liability of Agent..................................... 41
SECTION 7.06. Indemnification........................................ 42
SECTION 7.07. Credit Decision........................................ 42
SECTION 7.08. Successor Agent........................................ 42
SECTION 7.09. Agent's Fee............................................ 43
ARTICLE VIII
CHANGE IN CIRCUMSTANCES
</TABLE>
ii
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<TABLE>
<S> <C> <C>
SECTION 8.01. Basis for Determining Interest Rate Inadequate or
Unfair ............................................... 43
SECTION 8.02. Illegality............................................. 44
SECTION 8.03. Increased Cost and Reduced Return...................... 44
SECTION 8.04. Taxes.................................................. 46
SECTION 8.05. Base Rate Loans Substituted for Affected Fixed
Rate Loans ........................................... 48
SECTION 8.06. Substitution of Bank................................... 48
SECTION 8.07. Compensation........................................... 49
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Notices................................................ 49
SECTION 9.02. No Waivers............................................. 49
SECTION 9.03. Expenses; Indemnification.............................. 49
SECTION 9.04. Sharing of Set-Offs.................................... 50
SECTION 9.05. Amendments and Waivers................................. 50
SECTION 9.06. Successors and Assigns................................. 51
SECTION 9.07. Collateral............................................. 52
SECTION 9.08. Governing Law; Submission to Jurisdiction.............. 52
SECTION 9.09. Counterparts; Integration.............................. 53
SECTION 9.10. WAIVER OF JURY TRIAL................................... 53
SECTION 9.11. Confidentiality........................................ 53
</TABLE>
Exhibit A - Note
Exhibit B - Money Market Quote Request
Exhibit C - Invitation for Money Market Quotes
Exhibit D - Money Market Quote
Exhibit E - Opinion of Counsel for the Borrower
Exhibit F - Opinion of Special Counsel for the Agent
Exhibit G - Assignment and Assumption Agreement
iii
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CREDIT AGREEMENT
AGREEMENT dated as of September 16, 1996 among AT&T CAPITAL
CORPORATION, the BANKS party hereto and MORGAN GUARANTY TRUST COMPANY OF NEW
YORK, as Agent.
W I T N E S S E T H :
WHEREAS, the Borrower (as defined below) has heretofore entered
into a $1,500,000,000 Credit Agreement dated as of June 30, 1995 with the banks
parties thereto and Morgan Guaranty Trust Company of New York, as agent for such
banks (as in effect on the date hereof, the "Existing Credit Agreement"); and
WHEREAS, the Borrower wishes to enter into this Agreement to
replace the Existing Credit Agreement; and
WHEREAS, upon the effectiveness of this Agreement in accordance
with Section 3.01, the Existing Credit Agreement shall terminate;
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. The following terms, as used herein,
have the following meanings:
"Absolute Rate Auction" means a solicitation of Money Market
Quotes setting forth Money Market Absolute Rates pursuant to Section 2.03.
"Accounts Receivable" means (i) any accounts receivable (whether
or not earned by performance), chattel paper, instruments, documents, general
intangibles, trade acceptances, any other rights to receive installment, rental
or other payments for, or relating to amounts due or to become due on account
of, equipment or goods sold or leased or to be sold or leased or services
rendered or to be rendered or funds advanced or loaned or to be advanced or
loaned and other rights to payment of any kind, (ii) any proceeds of any of the
foregoing and (iii) any interest in any property or asset of any kind (whether
of the obligor under such Accounts Receivable or any other Person) securing the
payment of any item listed in clause (i) hereof.
"Acquisition" means the consummation of the acquisition and the
related transactions contemplated by the Agreement and Plan of Merger dated as
of June 5, 1996 among AT&T, the Borrower, Hercules Limited and Antigua
Acquisition Corporation (a true and correct copy of which, as in effect on the
date hereof, has
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heretofore been delivered to the Agent) substantially on the terms described
therein.
"Adjusted CD Rate" has the meaning set forth in Section 2.07(b).
"Administrative Questionnaire" means, with respect to each Bank,
an administrative questionnaire in the form prepared by the Agent and submitted
to the Agent (with a copy to the Borrower) duly completed by such Bank.
"Agent" means Morgan Guaranty Trust Company of New York in its
capacity as agent for the Banks hereunder, and its successors in such capacity.
"Applicable Lending Office" means, with respect to any Bank, (i)
in the case of its Domestic Loans, its Domestic Lending Office, (ii) in the case
of its Euro-Dollar Loans, its Euro-Dollar Lending Office and (iii) in the case
of its Money Market Loans, its Money Market Lending Office.
"Applicable Margin" has the meaning set forth in Section 2.07(h).
"Assessment Rate" has the meaning set forth in Section 2.07(b).
"Asset Drop-Down" has the meaning set forth in Section 5.08.
"Assignee" has the meaning set forth in Section 9.06(c).
"AT&T" means American Telephone and Telegraph Company, a New York
corporation, and its successors.
"Bank" means each bank listed on the signature pages hereof, each
Assignee which becomes a Bank pursuant to Section 8.06 or 9.06(c), and their
respective successors.
"Base Rate" means, for any day, a rate per annum equal to the
higher of (i) the Prime Rate for such day and (ii) the sum of 1/2 of 1% plus the
Federal Funds Rate for such day.
"Base Rate Loan" means (i) a Committed Loan which bears interest
at the Base Rate pursuant to the applicable Notice of Committed Borrowing or
Notice of Interest Rate Election or the provisions of Article VIII or (ii) an
overdue amount which was a Base Rate Loan immediately before it became overdue.
"Borrower" means AT&T Capital Corporation, a Delaware
corporation, and its successors.
"Borrower's 1995 Form 10-K" means the Borrower's annual report on
Form 10-K for 1995, as filed with the Securities and Exchange Commission
pursuant to the Securities Exchange Act of 1934, as amended.
"Borrower's Latest Form 10-Q" means the Borrower's quarterly
report on Form 10-Q for the quarter ended June 30, 1996, as filed with the
Securities and
2
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Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended.
"Borrowing" has the meaning set forth in Section 1.03.
"CD Base Rate" has the meaning set forth in Section 2.07(b).
"CD Loan" means (i) a Committed Loan which bears interest at a CD
Rate pursuant to the applicable Notice of Committed Borrowing or Notice of
Interest Rate Election or (ii) an overdue amount which was a CD Loan immediately
before it became overdue.
"CD Rate" means a rate of interest determined pursuant to Section
2.07(b) on the basis of an Adjusted CD Rate.
"CD Reference Banks" means The Chase Manhattan Bank and Morgan
Guaranty Trust Company of New York.
"Commitment" means, with respect to each Bank, the amount set
forth opposite the name of such Bank on the signature pages hereof, as such
amount may be reduced from time to time pursuant to Section 2.09 or changed
pursuant to Section 9.06(c).
"Committed Loan" means a loan made by a Bank pursuant to Section
2.01; provided that, if any such loan or loans (or portions thereof) are
combined or subdivided pursuant to a Notice of Interest Rate Election, the term
"Committed Loan" shall refer to the combined principal amount resulting from
such combination or to each of the separate principal amounts resulting from
such subdivision, as the case may be.
"Consolidated Debt" means at any date the Debt of the Borrower
and its Consolidated Subsidiaries of the type referred to in clauses (i), (ii),
(iv) and (vii) of the definition of "Debt", determined on a consolidated basis
as of such date; provided, however, that any recourse provided by any Person in
connection with any sale, transfer or other disposition by such Person of
Accounts Receivable or of any subsidiary of such Person substantially all the
assets of which are Accounts Receivable which constitutes a "sale" under
generally accepted accounting principles (as in effect at the time of such sale,
transfer or other disposition) shall not, in any event, constitute Consolidated
Debt.
"Consolidated EBIT" means, for any period, the sum of (i)
Consolidated Net Income for such period plus (ii) to the extent deducted in
determining such Consolidated Net Income, the sum of Consolidated Interest
Expense and the provision for income tax for such period.
"Consolidated Interest Expense" means, for any period, the
interest expense of the Borrower and its Consolidated Subsidiaries determined on
a consolidated basis for such period.
3
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"Consolidated Net Income" means, for any period, the net income
(loss) (calculated (a) before preferred and common stock dividends and (b)
exclusive of the effect of any extraordinary or other material non-recurring
gain or loss outside the ordinary course of business) of the Borrower and its
Consolidated Subsidiaries, determined on a consolidated basis for such period.
"Consolidated Subsidiary" means at any date any Subsidiary or
other entity (including a business trust) the accounts of which would be
consolidated with those of the Borrower in its consolidated financial statements
if such statements were prepared as of such date.
"Consolidated Tangible Net Worth" means at any date the sum of
(i) consolidated stockholders' equity of the Borrower and its Consolidated
Subsidiaries, less their consolidated Intangible Assets plus (ii) the Permitted
Minority Interest Amount, all determined as of such date. For purposes of this
definition "Intangible Assets" means the amount (to the extent reflected in
determining such consolidated stockholders' equity) 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 June 30, 1996 in the book value of
any asset owned by the Borrower or a Consolidated Subsidiary, (ii) all
Investments in unconsolidated Subsidiaries and all equity investments in Persons
which are not Subsidiaries and (iii) all unamortized debt discount and expense,
unamortized deferred charges, goodwill, patents, trademarks, service marks,
trade names, anticipated future benefit of tax loss carry-forwards, copyrights,
organization or developmental expenses and other intangible assets.
"D&P" means Duff & Phelps Credit Rating Co. or any successor
rating agency acceptable to the Required Banks and the Borrower.
"Debt" of any Person means at any date, without duplication, (i)
all obligations of such Person for borrowed money, (ii) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments, (iii)
all obligations of such Person to pay the deferred purchase price of property or
services, except trade accounts payable arising in the ordinary course of
business, (iv) all obligations of such Person as lessee which are capitalized in
accordance with generally accepted accounting principles, (v) all non-contingent
obligations (and, for purposes of Section 5.07 and the definitions of Material
Debt and Material Financial Obligations, all contingent obligations) of such
Person to reimburse any bank or other Person in respect of amounts paid under a
letter of credit or similar instrument, (vi) all Debt secured by a Lien on any
asset of such Person, whether or not such Debt is otherwise an obligation of
such Person, and (vii) all Debt of others guaranteed by such Person.
"Default" means any condition or event which constitutes an Event
of Default or which with the giving of notice or lapse of time or both would,
unless cured or waived, become an Event of Default.
4
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"Derivatives Obligations" of any Person means all obligations of
such Person in respect of any rate swap transaction, basis swap, forward rate
transaction, commodity swap, commodity option, equity or equity index swap,
equity or equity index option, bond option, interest rate option, foreign
exchange transaction, cap transaction, floor transaction, collar transaction,
currency swap transaction, cross-currency rate swap transaction, currency option
or any other similar transaction (including any option with respect to any of
the foregoing transactions) or any combination of the foregoing transactions.
"Domestic Business Day" means any day except a Saturday, Sunday
or other day on which commercial banks in New York City are authorized or
required by law to close.
"Domestic Lending Office" means, as to each Bank, its office
located at its address set forth in its Administrative Questionnaire (or
identified in its Administrative Questionnaire as its Domestic Lending Office)
or such other office as such Bank may hereafter designate as its Domestic
Lending Office by notice to the Borrower and the Agent; provided that any Bank
may so designate separate Domestic Lending Offices for its Base Rate Loans, on
the one hand, and its CD Loans, on the other hand, in which case all references
herein to the Domestic Lending Office of such Bank shall be deemed to refer to
either or both of such offices, as the context may require.
"Domestic Loans" means CD Loans or Base Rate Loans or both.
"Domestic Reserve Percentage" has the meaning set forth in
Section 2.07(b).
"Drop-Down Subsidiary" has the meaning set forth in Section 5.08.
"Effective Date" means the date this Agreement becomes effective
in accordance with Section 3.01.
"Euro-Dollar Business Day" means any Domestic Business Day on
which commercial banks are open for international business (including dealings
in dollar deposits) in London.
"Euro-Dollar Lending Office" means, as to each Bank, its office,
branch or affiliate located at its address set forth in its Administrative
Questionnaire (or identified in its Administrative Questionnaire as its
Euro-Dollar Lending Office) or such other office, branch or affiliate of such
Bank as it may hereafter designate as its Euro-Dollar Lending Office by notice
to the Borrower and the Agent.
"Euro-Dollar Loan" means (i) a Committed Loan which bears
interest at a Euro-Dollar Rate pursuant to the applicable Notice of Committed
Borrowing or Notice of Interest Rate Election or (ii) an overdue amount which
was a Euro-Dollar Loan immediately before it became overdue.
5
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"Euro-Dollar Rate" means a rate of interest determined pursuant
to Section 2.07(c) on the basis of a London Interbank Offered Rate.
"Euro-Dollar Reference Banks" means the principal London offices
of The Fuji Bank, Limited, Royal Bank of Canada and Morgan Guaranty Trust
Company of New York.
"Euro-Dollar Reserve Percentage" means for any day that
percentage (expressed as a decimal) which is in effect on such day, as
prescribed by the Board of Governors of the Federal Reserve System (or any
successor) for determining the maximum reserve requirement for a member bank of
the Federal Reserve System in New York City with deposits exceeding five billion
dollars in respect of "Eurocurrency liabilities" (or in respect of any other
category of liabilities which includes deposits by reference to which the
interest rate on Euro-Dollar Loans is determined or any category of extensions
of credit or other assets which includes loans by a non-United States office of
any Bank to United States residents).
"Event of Default" has the meaning set forth in Section 6.01.
"Existing Credit Agreement" has the meaning set forth in the
recitals hereto.
"Federal Funds Rate" means, for any day, the rate per annum
(rounded upward, if necessary, to the nearest 1/100th of 1%) equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Domestic
Business Day next succeeding such day, provided that (i) if such day is not a
Domestic Business Day, the Federal Funds Rate for such day shall be such rate on
such transactions on the next preceding Domestic Business Day as so published on
the next succeeding Domestic Business Day, and (ii) if no such rate is so
published on such next succeeding Domestic Business Day, the Federal Funds Rate
for such day shall be the average rate quoted to Morgan Guaranty Trust Company
of New York on such day on such transactions as determined by the Agent.
"Fixed Rate Loans" means CD Loans or Euro-Dollar Loans or Money
Market Loans (excluding Money Market LIBOR Loans bearing interest at the Base
Rate pursuant to Section 8.01(a)) or any combination of the foregoing.
"Group" or "Group of Loans" means at any time a group of Loans
consisting of (i) all Committed Loans which are Base Rate Loans at such time or
(ii) all Committed Loans which are Fixed Rate Loans of the same type having the
same Interest Period at such time; provided that, if a Committed Loan of any
particular Bank is converted to or made as a Base Rate Loan pursuant to Section
8.02 or 8.05, such Loan shall be included in the same Group or Groups of Loans
from time to time as it would have been in if it had not been so converted or
made.
"Indemnitee" has the meaning set forth in Section 9.03(b).
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"Initial Qualifying Preferred Securities" means the trust
preferred securities issued by Capita Preferred Trust in the form substantially
as described in the Prospectus dated as of August 30, 1996 contained in a
Registration Statement filed prior to the date hereof with the Securities and
Exchange Commission (which Registration Statement has not become effective as of
the date hereof).
"Interest Period" means: (1) with respect to each Euro-Dollar
Loan, a period commencing on the date of borrowing specified in the applicable
Notice of Borrowing or on the date specified in the applicable Notice of
Interest Rate Election and ending one, two, three or six months thereafter, as
the Borrower may elect in the applicable notice; provided that:
(a) any Interest Period which would otherwise end on a day which
is not a Euro-Dollar Business Day shall, subject to clause (c) below, be
extended to the next succeeding Euro-Dollar Business Day unless such
Euro-Dollar Business Day falls in another calendar month, in which case
such Interest Period shall end on the next preceding Euro-Dollar
Business Day;
(b) any Interest Period which begins on the last Euro-Dollar
Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such
Interest Period) shall, subject to clause (c) below, end on the last
Euro-Dollar Business Day of a calendar month; and
(c) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date.
(2) with respect to each CD Loan, a period commencing on the date of borrowing
specified in the applicable Notice of Borrowing or on the date specified in the
applicable Notice of Interest Rate Election and ending 30, 60, 90 or 180 days
thereafter, as the Borrower may elect in the applicable notice; provided that:
(a) any Interest Period which would otherwise end on a day which
is not a Euro-Dollar Business Day shall, subject to clause (b) below, be
extended to the next succeeding Euro-Dollar Business Day; and
(b) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date.
(3) with respect to each Money Market LIBOR Loan, the period commencing on the
date of borrowing specified in the applicable Notice of Borrowing and ending
such whole number of months thereafter as the Borrower may elect in accordance
with Section 2.03; provided that:
(a) any Interest Period which would otherwise end on a day which
is not a Euro-Dollar Business Day shall, subject to clause (c) below, be
extended to the next succeeding Euro-Dollar Business Day unless such
Euro-Dollar Business
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Day falls in another calendar month, in which case such Interest
Period shall end on the next preceding Euro-Dollar Business Day;
(b) any Interest Period which begins on the last Euro-Dollar
Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such
Interest Period) shall, subject to clause (c) below, end on the last
Euro-Dollar Business Day of a calendar month; and
(c) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date.
(4) with respect to each Money Market Absolute Rate Loan, the period commencing
on the date of borrowing specified in the applicable Notice of Borrowing and
ending such number of days thereafter (but not less than 7 days) as the Borrower
may elect in accordance with Section 2.03; provided that:
(a) any Interest Period which would otherwise end on a day which
is not a Euro-Dollar Business Day shall, subject to clause (b) below, be
extended to the next succeeding Euro-Dollar Business Day; and
(b) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date.
"Internal Revenue Code" means the Internal Revenue Code of 1986,
as amended, or any successor statute.
"Level I Status" exists at any date if, at such date, the
Borrower's senior unsecured long-term debt is rated A+/A1 or higher by at least
two Rating Agencies.
"Level II Status" exists at any date if, at such date, (a) the
Borrower's senior unsecured long-term debt is rated A/A2 or higher by at least
two Rating Agencies and (b) Level I Status does not exist.
"Level III Status" exists at any date if, at such date, (a) the
Borrower's senior unsecured long-term debt is rated A-/A3 or higher by at least
two Rating Agencies and (b) neither Level I Status nor Level II Status exists.
"Level IV Status" exists at any date if, at such date, (a) the
Borrower's senior unsecured long-term debt is rated BBB+/Baa1 or higher by at
least two Rating Agencies and (b) none of Level I Status through Level III
Status exists.
"Level V Status" exists at any date if, at such date, (a) the
Borrower's senior unsecured long-term debt is rated BBB/Baa2 or higher by at
least two Rating Agencies and (b) none of Level I Status through Level IV Status
exists.
"Level VI Status" exists at any date if, at such date, (a) the
Borrower's senior unsecured long-term debt is rated BBB-/Baa3 or higher by at
least two Rating
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Agencies and (b) none of Level I Status through Level V Status exists.
"Level VII Status" exists at any date if, at such date, (a) the
Borrower's senior unsecured long-term debt is rated BB+/Ba1 or higher by at
least two Rating Agencies and (b) none of Level I Status through Level VI Status
exists.
"Level VIII Status" exists at any date if, at such date, none of
Level I Status through Level VII Status exists.
"LIBOR Auction" means a solicitation of Money Market Quotes
setting forth Money Market Margins based on the London Interbank Offered Rate
pursuant to Section 2.03.
"Lien" means any mortgage, pledge, security interest or lien.
"Loan" means a Domestic Loan or a Euro-Dollar Loan or a Money
Market Loan and "Loans" means Domestic Loans or Euro-Dollar Loans or Money
Market Loans or any combination of the foregoing.
"London Interbank Offered Rate" has the meaning set forth in
Section 2.07(c).
"Material Adverse Effect" means a material adverse effect on the
consolidated financial position of the Borrower and its subsidiaries.
"Material Debt" means Debt (other than the Loans) of the Borrower
and/or one or more of its Subsidiaries, arising in one or more related or
unrelated transactions, in an aggregate principal or face amount exceeding
$100,000,000.
"Material Financial Obligations" means a principal or face amount
of Debt and/or payment obligations in respect of Derivatives Obligations of the
Borrower and/or one or more of its Subsidiaries, arising in one or more related
or unrelated transactions, exceeding in the aggregate $100,000,000.
"Money Market Absolute Rate" has the meaning set forth in Section
2.03(d).
"Money Market Absolute Rate Loan" means a loan made or to be made
by a Bank pursuant to an Absolute Rate Auction.
"Money Market Lending Office" means, as to each Bank, its
Domestic Lending Office or such other office, branch or affiliate of such Bank
as it may hereafter designate as its Money Market Lending Office by notice to
the Borrower and the Agent; provided that any Bank may from time to time by
notice to the Borrower and the Agent designate separate Money Market Lending
Offices for its Money Market LIBOR Loans, on the one hand, and its Money Market
Absolute Rate Loans, on the other hand, in which case all references herein to
the Money Market Lending Office of such Bank shall be deemed to refer to either
or both of such offices, as the context may
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require.
"Money Market LIBOR Loan" means a loan made or to be made by a
Bank pursuant to a LIBOR Auction (including such a loan bearing interest at the
Base Rate pursuant to Section 8.01(a)).
"Money Market Loan" means a Money Market LIBOR Loan or a Money
Market Absolute Rate Loan.
"Money Market Margin" has the meaning set forth in Section
2.03(d).
"Money Market Quote" means an offer by a Bank to make a Money
Market Loan in accordance with Section 2.03.
"Moody's" means Moody's Investors Service, Inc. or any successor
rating agency acceptable to the Required Banks and the Borrower.
"Nomura Group" means Nomura Securities Co., Ltd., a Japanese
company (with its successors), and its Subsidiaries.
"Non-Recourse Debt" of the Borrower or any Restricted Subsidiary
means any indebtedness for borrowed money of the Borrower or any Restricted
Subsidiary, as the case may be, which is secured by any Lien on or payable
solely from the income and proceeds of any property (including, without limiting
the generality of such term, any intangible assets), shares of stock, other
equity interests or debt of the Borrower or such Restricted Subsidiary, as the
case may be, and which is not a general obligation of the Borrower or such
Restricted Subsidiary, as the case may be.
"Notes" means promissory notes of the Borrower, substantially in
the form of Exhibit A hereto, evidencing the obligation of the Borrower to repay
the Loans, and "Note" means any one of such promissory notes issued hereunder.
"Notice of Borrowing" means a Notice of Committed Borrowing (as
defined in Section 2.02) or a Notice of Money Market Borrowing (as defined in
Section 2.03(f)).
"Notice of Interest Rate Election" has the meaning set forth in
Section 2.10.
"Parent" means, with respect to any Bank, any Person controlling
such Bank.
"Participant" has the meaning set forth in Section 9.06(b).
"Permitted Minority Interest Amount" means, at any date, the
lesser of (i) the sum, for each issue of Qualifying Preferred Securities, of the
excess of (x) the amount of minority interests of Consolidated Subsidiaries not
included in consolidated stockholders' equity of the Borrower, determined in
accordance with generally accepted
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accounting principles, attributable to such Qualifying Preferred Securities
minus (y) the aggregate principal or face amount of securities and other
obligations (including guarantees) held by the issuer of such Qualifying
Preferred Securities (or any intermediary issuer) other than (1) securities or
other obligations (including guarantees) of any intermediary issuer (including
those issued by Capita Preferred Funding L.P. to Capita Preferred Trust in the
Initial Qualifying Preferred Securities) or (2) securities or other obligations
(including guarantees) of the Borrower all payments in respect of which are
fully subordinated (including in a bankruptcy, insolvency or similar proceeding)
to the prior payment in full of all principal, interest, fees and any other
amount payable under this Agreement and (ii) 30% of Consolidated Tangible Net
Worth (determined after inclusion of the Permitted Minority Interest Amount),
each determined on such date.
"Person" means an individual, a corporation, a partnership, an
association, a limited liability company, a trust or any other entity or
organization, including a government or political subdivision or an agency or
instrumentality thereof.
"Prime Rate" means the rate of interest publicly announced by
Morgan Guaranty Trust Company of New York in New York City from time to time as
its Prime Rate.
"Qualifying Preferred Securities" means (A) the Initial
Qualifying Preferred Securities and (B) any preferred stock, limited partnership
interests, preferred trust certificates or other preferred equity securities,
issued for financing purposes by the Borrower or its Consolidated Subsidiaries
and held by Persons other than the Borrower and its Consolidated Subsidiaries,
and reasonably similar to the Initial Qualifying Preferred Securities, which
securities (whether described in clause (A) or clause (B)) neither have nor
provide the holders thereof (nor any Person acting on their behalf) with (i) any
required payments of the liquidation preference or other capital amount thereof
or any mandatory redemption or rights of redemption, other than solely at the
option of the issuer (other than an insolvency of the issuer), (ii) any right to
enforce against assets held by the issuer thereof, whether upon a stated date or
upon the happening of a default in payment or other contingency (other than an
insolvency of the issuer), whether or not with the passage of time, or (iii) any
conversion or rights to convert into any securities of the issuer or any other
Person other than into common stock or other Qualifying Preferred Securities of
such issuer, in any case prior to December 31, 2001.
"Quarterly Date" means the last Euro-Dollar Business Day of each
March, June, September and December.
"Rating Agencies" means D&P, Moody's and S&P.
"Reference Banks" means the CD Reference Banks or the Euro-Dollar
Reference Banks, as the context may require, and "Reference Bank" means any one
of such Reference Banks.
"Regulation U" means Regulation U of the Board of Governors of
the
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Federal Reserve System, as in effect from time to time.
"Required Banks" means at any time Banks having at least 51% of
the aggregate amount of the Commitments or, if the Commitments shall have been
terminated, holding Notes evidencing at least 51% of the aggregate unpaid
principal amount of the Loans.
"Restricted Payment" means (i) any dividend or other distribution
on any shares of the Borrower's capital stock, including, without limitation,
preferred stock (except dividends payable solely in shares of such stock) or
(ii) any payment on account of the purchase, redemption, retirement or
acquisition of (a) any shares of the Borrower's capital stock, including,
without limitation, preferred stock, or (b) any option, warrant or other right
to acquire shares of the Borrower's capital stock, including, without
limitation, preferred stock.
"Restricted Subsidiary" means each Subsidiary organized under the
laws of any State of the United States or the District of Columbia no
substantial portion of the business of which is carried on outside of the United
States; provided that each Drop-Down Subsidiary shall be a Restricted
Subsidiary.
"S&P" means Standard & Poor's Ratings Services or any successor
rating agency acceptable to the Required Banks and the Borrower.
"Status" means, at any date, whichever of Level I Status, Level
II Status, Level III Status, Level IV Status, Level V Status, Level VI Status,
Level VII Status or Level VIII Status exists at such date.
"Subsidiary" means any corporation or other entity of which
securities or other ownership interests (whether directly or indirectly in
connection with contract rights) having ordinary voting power to elect a
majority of the board of directors or other persons performing similar functions
are at the time directly or indirectly owned by the Borrower (or, if such term
is used with reference to any other Person, by such other Person).
"Termination Date" means September 15, 1997, or, if such day is
not a Euro-Dollar Business Day, the next preceding Euro-Dollar Business Day.
"United States" means the United States of America, including the
States thereof and the District of Columbia, but excluding its territories and
possessions.
"Usage" means at any date the percentage equivalent of a fraction
(i) the numerator of which is the aggregate outstanding principal amount of the
Loans at such date, after giving effect to any borrowing or payment on such
date, and (ii) the denominator of which is the aggregate amount of the
Commitments at such date. If for any reason any Loans remain outstanding after
termination of the Commitments, the Usage for each date on or after the date of
such termination shall be deemed to be greater than 50%.
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"Voting Power" means, with respect to any outstanding capital
stock of the Borrower, the power (expressed as a percentage) represented by such
capital stock of the aggregate voting power of all outstanding shares of any
class of capital stock of the Borrower having ordinary voting power, including
the power to vote for election of the members of the Board of Directors (and, if
any class thereof has power to designate members of the Board of Directors or
any special committee thereof, the power so to designate).
"Wholly-Owned Restricted Subsidiary" means any Restricted
Subsidiary all of the shares of capital stock or other ownership interests of
which (except directors' qualifying shares) are at the time directly or
indirectly owned by the Borrower.
SECTION 1.02. Accounting Terms and Determinations. Unless
otherwise specified herein, all accounting terms used herein shall be
interpreted, all accounting determinations hereunder shall be made, and all
financial statements required to be delivered hereunder shall be prepared in
accordance with United States generally accepted accounting principles as in
effect from time to time, applied on a basis consistent (except for changes made
in consultation with the Borrower's independent public accountants) with the
most recent audited consolidated financial statements of the Borrower and its
Consolidated Subsidiaries delivered to the Banks; provided that, if the Borrower
notifies the Agent that the Borrower wishes to amend any covenant in Article V
to eliminate the effect of any change in generally accepted accounting
principles on the operation of such covenant (or if the Agent notifies the
Borrower that the Required Banks wish to amend Article V for such purpose), then
the Borrower's compliance with such covenant shall be determined on the basis of
generally accepted accounting principles in effect immediately before the
relevant change in generally accepted accounting principles became effective,
until either such notice is withdrawn or such covenant is amended in a manner
satisfactory to the Borrower and the Required Banks.
SECTION 1.03. Types of Borrowings. The term "Borrowing" denotes
the aggregation of Loans of one or more Banks to be made to the Borrower
pursuant to Article II on the same date, all of which Loans are of the same type
(subject to Article VIII) and, except in the case of Base Rate Loans, have the
same Interest Period or initial Interest Period. Borrowings are classified for
purposes of this Agreement either by reference to the pricing of Loans
comprising such Borrowing (e.g., a "Euro-Dollar Borrowing" is a Borrowing
comprised of Euro-Dollar Loans) or by reference to the provisions of Article II
under which participation therein is determined (i.e., a "Committed Borrowing"
is a Borrowing under Section 2.01 in which all Banks participate in proportion
to their Commitments, while a "Money Market Borrowing" is a Borrowing under
Section 2.03 in which the Bank participants are determined on the basis of their
bids in accordance therewith).
SECTION 1.04. Basis for Ratings. The credit ratings to be
utilized in the determination of a Status are the ratings assigned to unsecured
obligations of the Borrower without third party credit support. Ratings assigned
to any obligation which is secured or which has the benefit of third party
credit support shall be disregarded.
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ARTICLE II
THE CREDITS
SECTION 2.01. Commitments to Lend. Each Bank severally agrees, on
the terms and conditions set forth in this Agreement, to make loans to the
Borrower pursuant to this Section from time to time on and after the Effective
Date and prior to the Termination Date in amounts such that the aggregate
principal amount of Committed Loans by such Bank at any one time outstanding
shall not exceed the amount of its Commitment. Each Borrowing under this Section
shall be in an aggregate principal amount of $50,000,000 or any larger multiple
of $5,000,000 (except that any such Borrowing may be in the aggregate amount
available in accordance with Section 3.02(b)) and shall be made from the several
Banks ratably in proportion to their respective Commitments. Within the
foregoing limits, the Borrower may borrow under this Section, prepay Loans to
the extent permitted by Section 2.11, and reborrow at any time prior to the
Termination Date.
SECTION 2.02. Notice of Committed Borrowing. The Borrower shall
give the Agent notice (a "Notice of Committed Borrowing") not later than 10:30
A.M. (New York City time) on (x) the date of each Base Rate Borrowing, (y) the
second Domestic Business Day before each CD Borrowing and (z) the third
Euro-Dollar Business Day before each Euro-Dollar Borrowing, specifying:
(a) the date of such Borrowing, which shall be a Domestic
Business Day in the case of a Domestic Borrowing or a Euro-Dollar
Business Day in the case of a Euro-Dollar Borrowing,
(b) the aggregate amount of such Borrowing,
(c) whether the Loans comprising such Borrowing are to bear
interest initially at the Base Rate or at a CD Rate or a Euro-Dollar
Rate, and
(d) in the case of a Fixed Rate Borrowing, the duration of the
initial Interest Period applicable thereto, subject to the provisions of
the definition of Interest Period.
SECTION 2.03. Money Market Borrowings.
(a) The Money Market Option. In addition to Committed Borrowings
pursuant to Section 2.01, the Borrower may, as set forth in this Section,
request the Banks to make offers to make Money Market Loans to the Borrower
prior to the Termination Date. The Banks may, but shall have no obligation to,
make such offers and the Borrower may, but shall have no obligation to, accept
any such offers in the manner set forth in this Section.
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(b) Money Market Quote Request. When the Borrower wishes to
request offers to make Money Market Loans under this Section, it shall transmit
to the Agent by telex or facsimile transmission a Money Market Quote Request
substantially in the form of Exhibit B hereto so as to be received no later than
10:30 A.M. (New York City time) on (x) the fourth Euro-Dollar Business Day prior
to the date of Borrowing proposed therein, in the case of a LIBOR Auction or (y)
the Domestic Business Day next preceding the date of Borrowing proposed therein,
in the case of an Absolute Rate Auction (or, in either case, such other time or
date as the Borrower and the Agent shall have mutually agreed and shall have
notified to the Banks not later than the date of the Money Market Quote Request
for the first LIBOR Auction or Absolute Rate Auction for which such change is to
be effective) specifying:
(i) the proposed date of Borrowing, which shall be a
Euro-Dollar Business Day in the case of a LIBOR Auction or a
Domestic Business Day in the case of an Absolute Rate Auction,
(ii) the aggregate amount of such Borrowing, which shall
be $5,000,000 or a larger multiple of $1,000,000,
(iii) the duration of the Interest Period applicable
thereto, subject to the provisions of the definition of Interest
Period, and
(iv) whether the Money Market Quotes requested are to set
forth a Money Market Margin or a Money Market Absolute Rate.
The Borrower may request offers to make Money Market Loans for more than one
Interest Period in a single Money Market Quote Request. No Money Market Quote
Request shall be given within five Euro-Dollar Business Days (or such other
number of days as the Borrower and the Agent may agree) of any other Money
Market Quote Request.
(c) Invitation for Money Market Quotes. Promptly upon receipt of
a Money Market Quote Request, the Agent shall send to the Banks by telex or
facsimile transmission an Invitation for Money Market Quotes substantially in
the form of Exhibit C hereto, which shall constitute an invitation by the
Borrower to each Bank to submit Money Market Quotes offering to make the Money
Market Loans to which such Money Market Quote Request relates in accordance with
this Section.
(d) Submission and Contents of Money Market Quotes. (i) Each Bank
may submit a Money Market Quote containing an offer or offers to make Money
Market Loans in response to any Invitation for Money Market Quotes. Each Money
Market Quote must comply with the requirements of this subsection (d) and must
be submitted to the Agent by telex or facsimile transmission at its offices
specified in or pursuant to Section 9.01 not later than (x) 4:00 P.M. (New York
City time) on the fourth Euro-Dollar Business Day prior to the proposed date of
Borrowing, in the case of a LIBOR Auction or (y) 9:30 A.M. (New York City time)
on the proposed date of Borrowing, in the case of an Absolute Rate Auction (or,
in either case, such other time or date as the Borrower and the Agent shall have
mutually agreed and shall have
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notified to the Banks not later than the date of the Money Market Quote Request
for the first LIBOR Auction or Absolute Rate Auction for which such change is to
be effective); provided that Money Market Quotes submitted by the Agent (or any
affiliate of the Agent) in the capacity of a Bank may be submitted, and may only
be submitted, if the Agent or such affiliate notifies the Borrower of the terms
of the offer or offers contained therein not later than (x) one hour prior to
the deadline for the other Banks, in the case of a LIBOR Auction or (y) 15
minutes prior to the deadline for the other Banks, in the case of an Absolute
Rate Auction. Subject to Articles III and VI, any Money Market Quote so made
shall be irrevocable except with the written consent of the Agent given on the
instructions of the Borrower.
(ii) Each Money Market Quote shall be in substantially the
form of Exhibit D hereto and shall in any case specify:
(A) the proposed date of Borrowing,
(B) the principal amount of the Money Market Loan for which each
such offer is being made, which principal amount (w) may be greater than
or less than the Commitment of the quoting Bank, (x) must be $5,000,000
or a larger multiple of $1,000,000, (y) may not exceed the principal
amount of Money Market Loans for which offers were requested and (z) may
be subject to an aggregate limitation as to the principal amount of
Money Market Loans for which offers being made by such quoting Bank may
be accepted,
(C) in the case of a LIBOR Auction, the margin above or below the
applicable London Interbank Offered Rate (the "Money Market Margin")
offered for each such Money Market Loan, expressed as a percentage
(specified to the nearest 1/10,000th of 1%) to be added to or subtracted
from such base rate,
(D) in the case of an Absolute Rate Auction, the rate of interest
per annum (specified to the nearest 1/10,000th of 1%) (the "Money Market
Absolute Rate") offered for each such Money Market Loan, and
(E) the identity of the quoting Bank.
A Money Market Quote may set forth up to five separate offers by the quoting
Bank with respect to each Interest Period specified in the related Invitation
for Money Market Quotes.
(iii) Any Money Market Quote shall be disregarded if it:
(A) is not substantially in conformity with Exhibit D hereto or
does not specify all of the information required by subsection (d)(ii);
(B) except as provided in subsection (d)(ii)(B)(z) contains
qualifying, conditional or similar language;
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(C) except as provided in subsection (d)(ii)(B)(z) proposes terms
other than or in addition to those set forth in the applicable
Invitation for Money Market Quotes; or
(D) arrives after the time set forth in subsection (d)(i).
(e) Notice to Borrower. The Agent shall promptly notify the
Borrower of the terms (x) of any Money Market Quote submitted by a Bank that is
in accordance with subsection (d) and (y) of any Money Market Quote that amends,
modifies or is otherwise inconsistent with a previous Money Market Quote
submitted by such Bank with respect to the same Money Market Quote Request. Any
such subsequent Money Market Quote shall be disregarded by the Agent unless such
subsequent Money Market Quote is submitted solely to correct a manifest error in
such former Money Market Quote. The Agent's notice to the Borrower shall specify
(A) the aggregate principal amount of Money Market Loans for which offers have
been received for each Interest Period specified in the related Money Market
Quote Request, (B) the respective principal amounts and Money Market Margins or
Money Market Absolute Rates, as the case may be, so offered and (C) if
applicable, limitations on the aggregate principal amount of Money Market Loans
for which offers in any single Money Market Quote may be accepted.
(f) Acceptance and Notice by Borrower. Not later than 10:30 A.M.
(New York City time) on (x) the third Euro-Dollar Business Day prior to the
proposed date of Borrowing, in the case of a LIBOR Auction or (y) the proposed
date of Borrowing, in the case of an Absolute Rate Auction (or, in either case,
such other time or date as the Borrower and the Agent shall have mutually agreed
and shall have notified to the Banks not later than the date of the Money Market
Quote Request for the first LIBOR Auction or Absolute Rate Auction for which
such change is to be effective), the Borrower shall notify the Agent of its
acceptance or non-acceptance of the offers so notified to it pursuant to
subsection (e). In the case of acceptance, such notice (a "Notice of Money
Market Borrowing") shall specify the aggregate principal amount of offers for
each Interest Period that are accepted. The Borrower may accept any Money Market
Quote in whole or in part; provided that:
(i) the aggregate principal amount of each Money Market Borrowing
may not exceed the applicable amount set forth in the related Money
Market Quote Request,
(ii) the principal amount of each Money Market Borrowing must be
$5,000,000 or a larger multiple of $1,000,000,
(iii) acceptance of offers may only be made on the basis of
ascending Money Market Margins or Money Market Absolute Rates, as the
case may be, and
(iv) the Borrower may not accept any offer that is described in
subsection (d)(iii) or that otherwise fails to comply with the
requirements of this Agreement.
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(g) Allocation by Agent. If offers are made by two or more Banks
with the same Money Market Margins or Money Market Absolute Rates, as the case
may be, for a greater aggregate principal amount than the amount in respect of
which such offers are accepted for the related Interest Period, the principal
amount of Money Market Loans in respect of which such offers are accepted shall
be allocated by the Agent among such Banks as nearly as possible (in multiples
of $1,000,000, as the Agent may deem appropriate) in proportion to the aggregate
principal amounts of such offers. Determinations by the Agent of the amounts of
Money Market Loans shall be conclusive in the absence of manifest error.
SECTION 2.04. Notice to Banks; Funding of Loans.
(a) Upon receipt of a Notice of Borrowing, the Agent shall
promptly notify each Bank of the contents thereof and of such Bank's share (if
any) of such Borrowing and such Notice of Borrowing shall not thereafter be
revocable by the Borrower.
(b) Not later than 12:00 Noon (New York City time) on the date of
each Borrowing, each Bank participating therein shall make available its share
of such Borrowing, in Federal or other funds immediately available in New York
City, to the Agent at its address referred to in Section 9.01. Unless the Agent
determines that any applicable condition specified in Article III has not been
satisfied, the Agent will make the funds so received from the Banks available to
the Borrower by 3:00 P.M. (New York City time) on the date of such Borrowing at
the Agent's aforesaid address.
(c) Unless the Agent shall have received notice from a Bank prior
to the date of any Borrowing that such Bank will not make available to the Agent
such Bank's share of such Borrowing, the Agent may assume that such Bank has
made such share available to the Agent on the date of such Borrowing in
accordance with subsection (b) of this Section 2.04 and the Agent may, in
reliance upon such assumption, make available to the Borrower on such date a
corresponding amount. If and to the extent that such Bank shall not have so made
such share available to the Agent, such Bank and the Borrower severally agree to
repay to the Agent forthwith on demand such corresponding amount together with
interest thereon, for each day from the date such amount is made available to
the Borrower until the date such amount is repaid to the Agent, at (i) in the
case of the Borrower, a rate per annum equal to the higher of the Federal Funds
Rate and the interest rate applicable thereto pursuant to Section 2.07 and (ii)
in the case of such Bank, the Federal Funds Rate. If such Bank shall repay to
the Agent such corresponding amount, such amount so repaid shall constitute such
Bank's Loan included in such Borrowing for purposes of this Agreement.
SECTION 2.05. Notes. (a) The Loans of each Bank shall be
evidenced by a single Note payable to the order of such Bank for the account of
its Applicable Lending Office in an amount equal to the aggregate unpaid
principal amount of such Bank's Loans.
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(b) Each Bank may, by notice to the Borrower and the Agent,
request that its Loans of a particular type be evidenced by a separate Note in
an amount equal to the aggregate unpaid principal amount of such Loans. Each
such Note shall be in substantially the form of Exhibit A hereto with
appropriate modifications to reflect the fact that it evidences solely Loans of
the relevant type. Each reference in this Agreement to the "Note" of such Bank
shall be deemed to refer to and include any or all of such Notes, as the context
may require.
(c) Upon receipt of each Bank's Note pursuant to Section 3.01(a),
the Agent shall forward such Note to such Bank. Each Bank shall record the date,
amount and type of each Loan made by it and the date and amount of each payment
of principal made by the Borrower with respect thereto, and may, if such Bank so
elects in connection with any transfer or enforcement of its Note, endorse on
the schedule forming a part thereof appropriate notations to evidence the
foregoing information with respect to each such Loan then outstanding; provided
that the failure of any Bank to make any such recordation or endorsement or any
error in making the same shall not affect the obligations of the Borrower
hereunder or under the Notes. Each Bank is hereby irrevocably authorized by the
Borrower so to endorse its Note and to attach to and make a part of its Note a
continuation of any such schedule as and when required.
SECTION 2.06. Maturity of Loans; Termination of Commitments.
(a) The Commitments shall terminate on the Termination Date, and
all Committed Loans shall mature, and the principal amount thereof shall be due
and payable, on such date.
(b) Each Money Market Loan included in any Money Market Borrowing
shall mature, and the principal amount thereof shall be due and payable, on the
last day of the Interest Period applicable to such Borrowing.
SECTION 2.07. Interest Rates. (a) Each Base Rate Loan shall bear
interest on the outstanding principal amount thereof, for each day from the date
such Loan is made until it becomes due, at a rate per annum equal to the Base
Rate for such day. Such interest shall be payable quarterly in arrears on each
Quarterly Date and on the Termination Date, and, with respect to the principal
amount of any Base Rate Loan converted to a CD Loan or a Euro-Dollar Loan, on
each date a Base Rate Loan is so converted. Any overdue principal of or interest
on any Base Rate Loan shall bear interest, payable on demand, for each day until
paid at a rate per annum equal to the sum of 1% plus the rate otherwise
applicable to Base Rate Loans for such day.
(b) Each CD Loan shall bear interest on the outstanding principal
amount thereof, for each day during each Interest Period applicable thereto, at
a rate per annum equal to the sum of the Applicable Margin for such day plus the
Adjusted CD Rate applicable to such Interest Period; provided that if any CD
Loan or any portion thereof shall, as a result of clause (2)(b) of the
definition of Interest Period, have an Interest Period of less than 30 days,
such portion shall bear interest during such Interest Period at the rate
applicable to Base Rate Loans during such period. Such interest shall be payable
for each Interest Period on the last day thereof and, if such Interest Period is
longer than 90 days, at intervals of 90 days after the first day thereof. Any
overdue principal of or interest on any CD Loan shall bear interest, payable on
demand, for each day until paid at a rate per annum equal to the sum of 1% plus
the rate applicable to Base Rate Loans for such day.
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<PAGE>
The "Adjusted CD Rate" applicable to any Interest Period means a
rate per annum determined pursuant to the following formula:
[ CDBR ]*
ACDR = [ ---------- ] + AR
[ 1.00 - DRP ]
ACDR = Adjusted CD Rate
CDBR = CD Base Rate
DRP = Domestic Reserve Percentage
AR = Assessment Rate
----------
* The amount in brackets being rounded upward, if
necessary, to the next higher 1/100 of 1%
The "CD Base Rate" applicable to any Interest Period is the rate
of interest determined by the Agent to be the average (rounded upward, if
necessary, to the next higher 1/100 of 1%) of the prevailing rates per annum bid
at 10:00 A.M. (New York City time) (or as soon thereafter as practicable) on the
first day of such Interest Period by two or more New York certificate of deposit
dealers of recognized standing for the purchase at face value from each CD
Reference Bank of its certificates of deposit in an amount comparable to the
principal amount of the CD Loan of such CD Reference Bank to which such Interest
Period applies and having a maturity comparable to such Interest Period.
"Domestic Reserve Percentage" means for any day that percentage
(expressed as a decimal) which is in effect on such day, as prescribed by the
Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement (including without limitation any
basic, supplemental or emergency reserves) for a member bank of the Federal
Reserve System in New York City with deposits exceeding five billion dollars in
respect of new non-personal time deposits in dollars in New York City having a
maturity comparable to the related Interest Period and in an amount of $100,000
or more. The Adjusted CD Rate shall be adjusted automatically on and as of the
effective date of any change in the Domestic Reserve Percentage.
"Assessment Rate" means for any day the annual assessment rate in
effect on such day which is payable by a member of the Bank Insurance Fund
classified as adequately capitalized and within supervisory subgroup "A" (or a
comparable successor assessment risk classification) within the meaning of 12
C.F.R. ss. 327.4(a) (or any successor provision) to the Federal Deposit
Insurance Corporation (or any successor) for such Corporation's (or such
successor's) insuring time deposits at offices of such institution in the United
States. The Adjusted CD Rate shall be adjusted automatically on and as of the
effective date of any change in the Assessment Rate.
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(c) Each Euro-Dollar Loan shall bear interest on the outstanding
principal amount thereof, for each day during each Interest Period applicable
thereto, at a rate per annum equal to the sum of the Applicable Margin for such
day plus the London Interbank Offered Rate applicable to such Interest Period.
Such interest shall be payable for each Interest Period on the last day thereof
and, if such Interest Period is longer than three months, at intervals of three
months after the first day thereof.
The "London Interbank Offered Rate" applicable to any Interest
Period means a rate of interest determined by the Agent on the basis of at least
two offered rates for deposits in United States dollars for a period equal to
such Interest Period commencing on the first day of such Interest Period
appearing on the Reuters Screen LIBO Page as of 11:00 A.M. (London time) on the
day that is two Euro-Dollar Business Days prior to the first day of such
Interest Period. If at least two such offered rates appear on the Reuters Screen
LIBO Page, the rate with respect to each Interest Period will be the arithmetic
average (rounded upwards to the next 1/16th of 1%) of such offered rates. If
fewer than two offered rates appear, the "London Interbank Offered Rate" in
respect of any Interest Period will be the average (rounded upward, if
necessary, to the next higher 1/16 of 1%) of the respective rates per annum at
which deposits in United States dollars are offered to each of the Euro-Dollar
Reference Banks in the London interbank market at approximately 11:00 A.M.
(London time) two Euro-Dollar Business Days before the first day of such
Interest Period in an amount approximately equal to the principal amount of the
Euro-Dollar Loan of such Euro-Dollar Reference Bank to which such Interest
Period is to apply and for a period of time comparable to such Interest Period.
(d) Any overdue principal of or interest on any Euro-Dollar Loan
shall bear interest, payable on demand, for each day from and including the date
payment thereof was due to but excluding the date of actual payment, at a rate
per annum equal to the sum of 1% plus the rate applicable to Base Rate Loans for
such day.
(e) Subject to Section 8.01(a), each Money Market LIBOR Loan
shall bear interest on the outstanding principal amount thereof, for the
Interest Period applicable thereto, at a rate per annum equal to the sum of the
London Interbank Offered Rate for such Interest Period (determined in accordance
with Section 2.07(c) as if the related Money Market LIBOR Borrowing were a
Committed Euro-Dollar Borrowing) plus (or minus) the Money Market Margin quoted
by the Bank making such Loan in accordance with Section 2.03. Each Money Market
Absolute Rate Loan shall bear interest on the outstanding principal amount
thereof, for the Interest Period applicable thereto, at a rate per annum equal
to the Money Market Absolute Rate quoted by the Bank making such Loan in
accordance with Section 2.03. Such interest shall be payable for each Interest
Period on the last day thereof and, if such Interest Period is longer than three
months, at intervals of three months after the first day thereof. Any overdue
principal of or interest on any Money Market Loan shall bear interest, payable
on demand, for each day until paid at a rate per annum equal to the sum of 1%
plus the Base Rate for such day.
(f) The Agent shall determine each interest rate applicable to
the Loans hereunder. The Agent shall give prompt notice to the Borrower and the
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participating Banks of each rate of interest so determined, and its
determination thereof shall be conclusive in the absence of manifest error.
(g) Each Reference Bank agrees to use its best efforts to furnish
quotations to the Agent as contemplated by this Section. If any Reference Bank
does not furnish a timely quotation necessary to determine an interest rate in
accordance with this Section, the Agent shall determine the relevant interest
rate on the basis of the quotation or quotations furnished by the remaining
Reference Bank or Banks or, if none of such quotations is available on a timely
basis, the provisions of Section 8.01 shall apply.
(h) The "Applicable Margin" with respect to any Euro-Dollar Loan
or CD Loan at any date is the applicable percentage amount set forth in the
table below based on the Status and Usage on such date:
<TABLE>
<CAPTION>
===============================================================================================
Level Level Level Level Level Level Level Level
I II III IV V VI VII VIII
Status Status Status Status Status Status Status Status
===============================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CD Loans
Usage <= 50% 0.275% 0.290% 0.310% 0.355% 0.395% 0.475% 0.500% 0.675%
Usage > 50% 0.325% 0.340% 0.360% 0.405% 0.445% 0.525% 0.550% 0.775%
===============================================================================================
Euro-Dollar
Loans
Usage <= 50% 0.150% 0.165% 0.185% 0.230% 0.270% 0.350% 0.375% 0.550%
Usage > 50% 0.200% 0.215% 0.235% 0.280% 0.320% 0.400% 0.425% 0.650%
===============================================================================================
</TABLE>
SECTION 2.08. Facility Fees. The Borrower shall pay to the Agent
for the account of the Banks ratably a facility fee at the Facility Fee Rate.
Such facility fee shall accrue from and including the Effective Date to but
excluding the Termination Date (or earlier date of termination of the
Commitments in their entirety), on the daily aggregate amount of the Commitments
(whether used or unused). Accrued facility fees shall be payable quarterly on
each Quarterly Date and upon the date of termination of the Commitments in their
entirety.
The "Facility Fee Rate" at any date is: (i) 0.050% if Level I
Status exists at such date, (ii) 0.060% if Level II Status exists at such date,
(iii) 0.065% if Level III Status exists at such date, (iv) 0.070% if Level IV
Status exists at such date, (v) 0.080% if Level V Status exists at such date,
(vi) 0.100% if Level VI Status exists at such date, (vii) 0.125% if Level VII
Status exists at such date and (viii) 0.200% if Level VIII Status exists at such
date.
SECTION 2.09. Optional Termination or Reduction of Commitments.
The Borrower may, upon at least three Domestic Business Days' notice to the
Agent, (i) terminate the Commitments at any time, if no Loans are outstanding at
such time, or (ii) ratably reduce from time to time by an aggregate amount of
$25,000,000 or any larger multiple of $5,000,000, the aggregate amount of the
Commitments in excess of the aggregate outstanding principal amount of the
Loans. The Agent shall promptly
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notify each Bank of any such notice received by the Agent.
SECTION 2.10. Method of Electing Interest Rates. (a) The Loans
included in each Committed Borrowing shall bear interest initially at the type
of rate specified by the Borrower in the applicable Notice of Committed
Borrowing. Thereafter, the Borrower may from time to time elect to change or
continue the type of interest rate borne by each Group of Loans (subject in each
case to the provisions of Article VIII), as follows:
(i) if such Loans are Base Rate Loans, the Borrower may
elect to convert such Loans to CD Loans as of any Domestic
Business Day or to Euro-Dollar Loans as of any Euro-Dollar
Business Day;
(ii) if such Loans are CD Loans, the Borrower may elect to
convert such Loans to Base Rate Loans or Euro-Dollar Loans or
elect to continue such Loans as CD Loans for an additional
Interest Period, in each case effective on the last day of the
then current Interest Period applicable to such Loans; and
(iii) if such Loans are Euro-Dollar Loans, the Borrower
may elect to convert such Loans to Base Rate Loans or CD Loans or
elect to continue such Loans as Euro-Dollar Loans for an
additional Interest Period, in each case effective on the last
day of the then current Interest Period applicable to such Loans.
Each such election shall be made by delivering a notice (a "Notice of Interest
Rate Election") to the Agent at least three Euro-Dollar Business Days before the
conversion or continuation selected in such notice is to be effective (unless
the relevant Loans are to be converted from Domestic Loans to Domestic Loans of
the other type or continued as Domestic Loans of the same type for an additional
Interest Period, in which case such notice shall be delivered to the Agent at
least two Domestic Business Days before such conversion or continuation is to be
effective). A Notice of Interest Rate Election may, if it so specifies, apply to
only a portion of the aggregate principal amount of the relevant Group of Loans;
provided that (i) such portion is allocated ratably among the Loans comprising
such Group and (ii) the portion to which such notice applies, and the remaining
portion to which it does not apply, are each $50,000,000 or any larger multiple
of $5,000,000.
(b) Each Notice of Interest Rate Election shall specify:
(i) the Group of Loans (or portion thereof) to which such notice
applies;
(ii) the date on which the conversion or continuation selected in
such notice is to be effective, which shall comply with the
applicable clause of subsection (a) above;
(iii) if the Loans comprising such Group are to be converted, the
new
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type of Loans and, if such new Loans are Fixed Rate Loans, the
duration of the initial Interest Period applicable thereto; and
(iv) if such Loans are to be continued as CD Loans or Euro-Dollar
Loans for an additional Interest Period, the duration of such
additional Interest Period.
Each Interest Period specified in a Notice of Interest Rate Election shall
comply with the provisions of the definition of Interest Period.
(c) Upon receipt of a Notice of Interest Rate Election from the
Borrower pursuant to subsection (a) above, the Agent shall promptly notify each
Bank of the contents thereof and such notice shall not thereafter be revocable
by the Borrower. If the Borrower fails to deliver a timely Notice of Interest
Rate Election to the Agent for any Group of Fixed Rate Loans, such Loans shall
be converted into Base Rate Loans on the last day of the then current Interest
Period applicable thereto.
SECTION 2.11. Optional Prepayments. (a) The Borrower may, upon
at least one Domestic Business Day's notice to the Agent, prepay the Group of
Base Rate Loans (or any Money Market Borrowing bearing interest at the Base Rate
pursuant to Section 8.01(a)) in whole at any time, or from time to time in part
in amounts aggregating $50,000,000 or any larger multiple of $5,000,000, by
paying the principal amount to be prepaid together with accrued interest thereon
to the date of prepayment. Each such optional prepayment shall be applied to
prepay ratably the Loans of the several Banks included in such Group or
Borrowing.
(b) The Borrower may, upon at least three Domestic Business Days'
notice to the Agent, in the case of a Group of CD Loans or upon at least three
Euro-Dollar Business Days' notice to the Agent, in the case of a Group of
Euro-Dollar Loans, prepay the Loans comprising such a Group on the last day of
any Interest Period applicable to such Group, in whole at any time, or from time
to time in part in amounts aggregating $50,000,000 or any larger multiple of
$5,000,000, by paying the principal amount to be prepaid together with accrued
interest thereon to the date of prepayment. Each such optional prepayment shall
be applied to prepay ratably the Loans of the several Banks included in such
Group.
(c) Except as provided in subsection (a) above, the Borrower may
not prepay all or any portion of the principal amount of any Money Market Loan
prior to the maturity thereof except with the prior consent of the Bank making
such Loan and subject to Section 2.13.
(d) Upon receipt of a notice of prepayment pursuant to this
Section, the Agent shall promptly notify each Bank of the contents thereof and
of such Bank's ratable share (if any) of such prepayment and such notice shall
not thereafter be revocable by the Borrower.
SECTION 2.12. General Provisions as to Payments. (a) The Borrower
shall make each payment of principal of, and interest on, the Loans and of
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fees hereunder, not later than 12:00 Noon (New York City time) on the date when
due, in Federal or other funds immediately available in New York City, to the
Agent at its address referred to in Section 9.01. The Agent will promptly
distribute to each Bank its ratable share of each such payment received by the
Agent for the account of the Banks. Whenever any payment of principal of, or
interest on, the Domestic Loans or of fees shall be due on a day which is not a
Domestic Business Day, the date for payment thereof shall be extended to the
next succeeding Domestic Business Day. Whenever any payment of principal of, or
interest on, the Euro-Dollar Loans or the Money Market LIBOR Loans shall be due
on a day which is not a Euro-Dollar Business Day, the date for payment thereof
shall be extended to the next succeeding Euro-Dollar Business Day unless such
Euro-Dollar Business Day falls in another calendar month, in which case the date
for payment thereof shall be the next preceding Euro-Dollar Business Day.
Whenever any payment of principal of, or interest on, the Money Market Absolute
Rate Loans shall be due on a day which is not a Euro-Dollar Business Day, the
date for payment thereof shall be extended to the next succeeding Euro-Dollar
Business Day. If the date for any payment of principal is extended pursuant to
this Agreement or by operation of law or otherwise, interest thereon shall be
payable for such extended time.
(b) Unless the Agent shall have received notice from the Borrower
prior to the date on which any payment is due to the Banks hereunder that the
Borrower will not make such payment in full, the Agent may assume that the
Borrower has made such payment in full to the Agent on such date and the Agent
may, in reliance upon such assumption, cause to be distributed to each Bank on
such due date an amount equal to the amount then due such Bank. If and to the
extent that the Borrower shall not have so made such payment, each Bank shall
repay to the Agent forthwith on demand such amount distributed to such Bank
together with interest thereon, for each day from the date such amount is
distributed to such Bank until the date such Bank repays such amount to the
Agent, at the Federal Funds Rate.
SECTION 2.13. Funding Losses. If the Borrower makes any payment
of principal with respect to any Fixed Rate Loan or any Fixed Rate Loan is
converted to a Base Rate Loan (pursuant to Article VI or VIII or otherwise) on
any day prior to the last day of an Interest Period applicable thereto, or if
the Borrower fails to borrow, continue, convert or prepay any Fixed Rate Loans
after notice has been given to any Bank in accordance with Section 2.04(a),
2.10(c) or 2.11(d), the Borrower shall reimburse each Bank as provided in the
following paragraph for any resulting loss or expense incurred by it (or by a
Participant in the related Loan), including (without limitation) any loss
incurred in obtaining, liquidating or employing deposits from third parties, but
excluding loss of the Applicable Margin or any other margin for the period after
any such payment or conversion or failure to borrow or prepay.
A certificate of each Bank setting forth such amount or amounts
(including the computation of such amount or amounts) as shall be necessary to
compensate such Bank or a Participant for the out-of-pocket expenses incurred by
such Bank or such Participant shall be delivered to the Borrower and such amount
or amounts may be reviewed by the Borrower. If the Borrower, after receipt of
any such certificate from such Bank, disagrees in good faith with such Bank on
the computation
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of the amount or amounts owed to such Bank pursuant to this Section 2.13, such
Bank and the Borrower shall negotiate in good faith to promptly resolve such
disagreement. Any payment required to be paid to such Bank pursuant to this
Section 2.13 shall be paid within 30 days after demand is made therefor (or if
there is a disagreement, after such disagreement is resolved). Each Bank shall
have a duty to mitigate the damages to such Bank that may arise as a consequence
of such funding losses described above to the extent that such mitigation will
not, in the judgment of such Bank, entail any cost or disadvantage to such Bank
that such Bank is not reimbursed or compensated for by the Borrower.
SECTION 2.14. Computation of Interest and Fees. Interest based on
the Prime Rate hereunder shall be computed on the basis of a year of 365 days
(or 366 days in a leap year) and paid for the actual number of days elapsed
(including the first day but excluding the last day). All other interest and
fees shall be computed on the basis of a year of 360 days and paid for the
actual number of days elapsed (including the first day but excluding the last
day).
SECTION 2.15. Regulation D Compensation. For so long as any Bank
maintains reserves against "Eurocurrency liabilities" (or any other category of
liabilities which includes deposits by reference to which the interest rate on
Euro-Dollar Loans is determined or any category of extensions of credit or other
assets which includes loans by a non-United States office of such Bank to United
States residents), and as a result the cost to such Bank (or its Applicable
Lending Office) of making or maintaining its Euro-Dollar Loans is increased,
then such Bank may require the Borrower to pay, contemporaneously with each
payment of interest on the Euro-Dollar Loans, additional interest on the related
Euro-Dollar Loan of such Bank at a rate per annum up to but not exceeding the
excess of (i)(A) the applicable London Interbank Offered Rate divided by (B) one
minus the Euro-Dollar Reserve Percentage over (ii) the rate specified in clause
(i)(A). Any Bank wishing to require payment of such additional interest (x)
shall so notify the Borrower, in which case such additional interest on the
Euro-Dollar Loans of such Bank shall be payable to such Bank at the rate and
place indicated in such notice with respect to each Interest Period commencing
at least three Euro-Dollar Business Days after the giving of such notice and (y)
shall furnish to the Borrower at least five Euro-Dollar Business Days prior to
each date on which interest is payable on the Euro-Dollar Loans an officers'
certificate setting forth the amount to which such Bank is then entitled under
this Section 2.15 (which shall be consistent with such Bank's good faith
estimate of the level at which the related reserves are maintained by it).
ARTICLE III
CONDITIONS
SECTION 3.01. Effectiveness. This Agreement shall become
effective on the date that each of the following conditions shall have been
satisfied (or waived in accordance with Section 9.05):
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(a) receipt by the Agent of counterparts hereof signed by each of
the parties hereto (or, in the case of any party as to which an executed
counterpart shall not have been received, receipt by the Agent in form
satisfactory to it of telegraphic, telex, facsimile transmission or
other written confirmation from such party of execution of a counterpart
hereof by such party);
(b) receipt by the Agent of a duly executed Note for the account
of each Bank dated on or before the Effective Date complying with the
provisions of Section 2.05;
(c) receipt by the Agent of evidence satisfactory to it that
no loans are outstanding under the Existing Credit Agreement;
(d) receipt by the Agent of an opinion of the General Counsel or
any Assistant General Counsel of the Borrower, substantially in the form
of Exhibit E hereto;
(e) receipt by the Agent of an opinion of Davis Polk & Wardwell,
special counsel for the Agent, substantially in the form of Exhibit F
hereto; and
(f) receipt by the Agent of all documents the Agent may
reasonably request relating to the existence of the Borrower, the
corporate authority for and the validity of this Agreement and the
Notes, and any other matters relevant hereto, all in form and substance
satisfactory to the Agent;
provided that this Agreement shall not become effective or be binding on any
party hereto unless all of the foregoing conditions are satisfied not later than
September 20, 1996. The Agent shall promptly notify the Borrower and the Banks
of the Effective Date, and such notice shall be conclusive and binding on all
parties hereto. The Banks that are parties to the Existing Credit Agreement,
comprising the "Required Banks" as defined therein, and the Borrower agree that
the commitments under the Existing Credit Agreement shall terminate in their
entirety simultaneously with and subject to the effectiveness of this Agreement
and that the Borrower shall be obligated to pay on the Effective Date the
accrued facility fees thereunder to but excluding the date of such
effectiveness.
SECTION 3.02. Borrowings. The obligation of any Bank to make a
Loan on the occasion of any Borrowing is subject to the satisfaction of the
following conditions:
(a) receipt by the Agent of a Notice of Borrowing as required by
Section 2.02 or 2.03, as the case may be;
(b) immediately after such Borrowing, the aggregate outstanding
principal amount of the Loans will not exceed the aggregate amount of
the Commitments;
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(c) immediately before and after such Borrowing, no Default
shall have occurred and be continuing; and
(d) the representations and warranties of the Borrower contained
in this Agreement (except the representation and warranty set forth in
Section 4.04(c)) shall be true in all material respects on and as of the
date of such Borrowing.
Each Borrowing hereunder shall be deemed to be a representation and warranty by
the Borrower on the date of such Borrowing as to the facts specified in clauses
(b), (c) and (d) of this Section.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants that:
SECTION 4.01. Corporate Existence and Power. The Borrower is a
corporation duly incorporated, validly existing and in good standing under the
laws of Delaware, and has all corporate power and all governmental licenses,
authorizations, consents and approvals required to carry on its business as now
conducted except those which the failure to have would not have a Material
Adverse Effect.
SECTION 4.02. Corporate and Governmental Authorization; No
Corporate and Governmental Authorization; No Contravention. The execution,
delivery and performance by the Borrower of this Agreement and the Notes are
within the Borrower's corporate power, have been duly authorized by all
necessary corporate action, require no action by or in respect of, or filing
with, any governmental body, agency or official and do not contravene, or
constitute a default under, any provision of applicable law or regulation or of
the certificate of incorporation or by-laws of the Borrower or of any material
agreement, judgment, injunction, order, decree or other material instrument
binding upon the Borrower or result in the creation or imposition of any Lien on
any asset of the Borrower.
SECTION 4.03. Binding Effect. This Agreement constitutes a valid
and binding agreement of the Borrower and the Notes, when executed and delivered
in accordance with this Agreement, will constitute valid and binding obligations
of the Borrower, in each case enforceable against the Borrower in accordance
with their respective terms, except as the same may be limited by bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium and similar laws
affecting creditors' rights generally and by general principles of equity
(regardless of whether considered in a proceeding in equity or at law).
SECTION 4.04. Financial Information
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(a) The consolidated balance sheet of the Borrower and its
subsidiaries as of December 31, 1995 and the related consolidated statements of
income, changes in stockholders' equity and cash flows for the fiscal year then
ended, reported on by Cooper's & Lybrand and set forth in the Borrower's 1995
Form 10-K, a copy of which has been delivered to each of the Banks, present
fairly, in all material respects, the consolidated financial position of the
Borrower and its Consolidated Subsidiaries as of such date and the consolidated
results of their operations and cash flows for such fiscal year, in conformity
with generally accepted accounting principles.
(b) The unaudited consolidated balance sheet of the Borrower and
its Consolidated Subsidiaries as of June 30, 1996 and the related unaudited
consolidated statements of income and cash flows for the six months then ended,
set forth in the Borrower's Latest Form 10-Q, a copy of which has been delivered
to each of the Banks, present fairly, in all material respects, the consolidated
financial position of the Borrower and its Consolidated Subsidiaries as of such
date and the consolidated results of their operations and cash flows for such
six-month period, in conformity with generally accepted accounting principles
for interim financial information applied on a basis consistent with the
financial statements referred to in subsection (a) of this Section.
(c) From June 30, 1996 through the Effective Date there has been
no material adverse change in the consolidated financial condition of the
Borrower and its Consolidated Subsidiaries.
SECTION 4.05. Litigation. There is no action, suit or proceeding
pending against, or to the knowledge of the Borrower threatened against, the
Borrower or any of its Subsidiaries before any court or arbitrator or any
governmental body, agency or official in which there is a reasonable probability
of an adverse decision which would have a Material Adverse Effect, or which in
any manner draws into question the validity or enforceability of this Agreement
or the Notes.
SECTION 4.06. Subsidiaries. Each of the Borrower's Consolidated
Subsidiaries which is a corporation is a corporation duly incorporated, validly
existing and in good standing under the laws of its jurisdiction of
incorporation, and has all corporate power and all governmental licenses,
authorizations, consents and approvals required to carry on its business as now
conducted, except those which the failure to have would not have a Material
Adverse Effect.
SECTION 4.07. Not an Investment Company. The Borrower is not an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended.
SECTION 4.08. Full Disclosure. No written information heretofore
furnished by the Borrower to the Agent or any Bank pursuant to Section 4.04 is,
and no written information hereafter furnished by the Borrower to the Agent or
any Bank pursuant to Section 5.01 contains or will contain any material
misstatement of any material facts.
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ARTICLE V
COVENANTS
The Borrower agrees that, so long as any Bank has any Commitment
hereunder or any amount payable under any Note remains unpaid:
SECTION 5.01. Information. The Borrower will deliver to each of
the Banks:
(a) within 105 days after the end of each fiscal year of the
Borrower, a consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries as of the end of such fiscal year and the
related consolidated statements of income, changes in stockholders'
equity and cash flows for such fiscal year, setting forth in each case
in comparative form the figures as of the end of and for the previous
fiscal year, all reported on in a manner acceptable to the Securities
and Exchange Commission by Coopers & Lybrand or other independent public
accountants of nationally recognized standing;
(b) within 60 days after the end of each of the first three
quarters of each fiscal year of the Borrower, a consolidated balance
sheet of the Borrower and its Consolidated Subsidiaries as of the end of
such quarter and the related consolidated statements of income for such
quarter and the related consolidated statements of income and cash flows
for the portion of the Borrower's fiscal year ended at the end of such
quarter, setting forth in the case of such statements of income in
comparative form the figures for the corresponding quarter and in the
case of such statements of income and cash flows the corresponding
portion of the Borrower's previous fiscal year, all certified as to
fairness of presentation, generally accepted accounting principles and
consistency by the chief financial officer or the chief accounting
officer of the Borrower, subject to normal year end adjustments;
(c) simultaneously with the delivery of each set of financial
statements referred to in clauses (a) and (b) above, a certificate of
the chief financial officer or the chief accounting officer of the
Borrower (i) setting forth in reasonable detail the calculations
required to establish whether the Borrower was in compliance with the
requirements of Sections 5.03, 5.04 and 5.05, inclusive, on the date of
the consolidated balance sheet included in such financial statements and
(ii) stating whether any Default exists on the date of such certificate
and, if any Default then exists, setting forth the details thereof and
the action which the Borrower is taking or proposes to take with respect
thereto;
(d) promptly after the mailing thereof to the shareholders of the
Borrower generally, copies of all financial statements, reports and
proxy statements so mailed; and
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(e) promptly after the filing thereof, copies of all reports on
Forms 10-K, 10-Q and 8-K (or their equivalents) which the Borrower shall
have filed with the Securities and Exchange Commission.
SECTION 5.02. Maintenance of Existence. The Borrower will
preserve, renew and keep in full force and effect its corporate existence except
as otherwise permitted under Section 5.08.
SECTION 5.03. Interest Coverage. The ratio of Consolidated EBIT
to Consolidated Interest Expense will not, for any period of four consecutive
fiscal quarters, be less than 1.25 to 1.
SECTION 5.04. Debt. Consolidated Debt determined at the end of
any fiscal quarter will not exceed 1,000% of Consolidated Tangible Net Worth
determined at the end of such fiscal quarter, and Consolidated Debt determined
at the end of any fiscal month which is not the last month of a fiscal quarter
will not exceed 1,000% of the greater of (i) Consolidated Tangible Net Worth
determined at the end of the most recently ended fiscal quarter or (ii)
Consolidated Tangible Net Worth determined at the end of such fiscal month.
SECTION 5.05. Minimum Consolidated Tangible Net Worth.
Consolidated Tangible Net Worth shall be at least $500,000,000 plus an amount
equal to 50% of Consolidated Net Income for each fiscal quarter of the Borrower
and its Consolidated Subsidiaries ending after June 30, 1996 (but on or prior to
the date of determination) for which Consolidated Net Income is positive (but
with no deduction on account of negative Consolidated Net Income for any fiscal
quarter of the Borrower and its Consolidated Subsidiaries).
SECTION 5.06. Restricted Payments. Neither the Borrower nor any
Subsidiary will declare or make any Restricted Payment unless, both before and
after giving effect thereto, no Event of Default under any of paragraphs (a),
(b), (d), (e), (f), (g), (h) or (i) of Section 6.01 shall have occurred and be
continuing.
SECTION 5.07. Negative Pledge. Neither the Borrower nor any
Restricted Subsidiary will create, assume or suffer to exist any Lien on any
asset now owned or hereafter acquired by it, except:
(a) Liens existing on the date of this Agreement securing Debt
outstanding on the date of this Agreement (or Debt issued or incurred
pursuant to commitments outstanding on the date of this Agreement) in an
aggregate principal or face amount not exceeding $230,000,000;
(b) Liens on property of, or on any shares of stock or Debt of,
any corporation existing at the time such corporation becomes a
Restricted Subsidiary and not created at the request or with the consent
of the Borrower and in contemplation of such event;
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(c) Liens on property, shares of stock, other equity interests,
or Debt existing at the time of acquisition or repossession thereof by
the Borrower or any Restricted Subsidiary and not created at the request
or with the consent of the Borrower and in contemplation of such event;
(d) Liens on physical property (or any Accounts Receivable
arising in connection with the lease thereof), shares of stock, other
equity interests, or Debt acquired (or, in the case of physical
property, constructed) after the date hereof by the Borrower or any
Restricted Subsidiary, which Liens are created prior to, at the time of,
or within 180 days after such acquisition (or, in the case of physical
property, the completion of such construction or commencement of
commercial operation of such property, whichever is later) to secure any
Debt incurred or assumed for the purpose of financing all or any part of
the cost of such acquisition (or such construction);
(e) any Lien on any asset of any corporation existing at the time
such corporation is merged or consolidated with or into the Borrower or
a Restricted Subsidiary and not created in contemplation of such event;
(f) Liens arising in the ordinary course of the Borrower's or
such Restricted Subsidiary's business which (i) do not secure Debt or
Derivatives Obligations, (ii) do not secure any obligation in an amount
exceeding $25,000,000 and (iii) do not in the aggregate materially
detract from the value of its assets or materially impair the use
thereof in the operation of its business;
(g) Liens on Accounts Receivable of the Borrower or any
Restricted Subsidiary arising from or in connection with transactions
entered into by the Borrower or such Restricted Subsidiary after the
date hereof or on Accounts Receivable acquired by the Borrower or such
Restricted Subsidiary after such date from others, which Liens are
created prior to, at the time of, or within one year after such Accounts
Receivable arise or are acquired or, if later, the completion of the
delivery or installation of the equipment or goods or the rendering of
the services or the advancement or loaning of funds relating thereto (i)
as a result of any guarantee, repurchase or other contingent (direct or
indirect) or recourse obligation of the Borrower or such Restricted
Subsidiary in connection with the discounting, sale, assignment,
transfer or other disposition of such Accounts Receivable or any
interest therein, or (ii) to secure or provide for the payment of all or
any part of the investment of the Borrower or such Restricted Subsidiary
in any such Accounts Receivable (whether or not such Accounts Receivable
are the Accounts Receivable on which such Liens are created) or the
purchase price thereof or to secure any debt (including, without
limitation, Non-Recourse Debt) issued, incurred, assumed or guaranteed
for the purpose of financing or refinancing all or any part of such
investment or purchase price;
(h) Liens on cash and cash equivalents securing Derivatives
Obligations, provided that the aggregate amount of cash and cash
equivalents subject to such Liens at no time exceed $25,000,000;
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(i) Liens in favor of the Borrower or any Restricted Subsidiary;
(j) Liens in favor of the United States of America or any State
thereof or the District of Columbia, or any agency, department or other
instrumentality thereof, to secure progress, advance or other payments
pursuant to any contract or provision of any statute;
(k) Liens to secure Non-Recourse Debt in connection with the
Borrower or any Restricted Subsidiary engaging in any leveraged or
single-investor or other lease transactions, whether (in the case of
Liens on or relating to leases or groups of leases or the particular
properties subject thereto) such Liens be on the particular properties
subject to any leases involved in any of such transactions and/or the
rental or other payments or rights under such leases or, in the case of
any group of related or unrelated leases, on the properties subject to
the leases comprising such group and/or the rental or other payments or
rights under such leases, or on any direct or indirect interest therein,
and whether (in any case) (i) such Liens be created prior to, at the
time of, or at any time after the entering into of such lease
transactions and/or (ii) such leases be in existence prior to, or be
entered into by the Borrower or such Restricted Subsidiary at the time
of or at any time after, the purchase or other acquisition by the
Borrower or such Restricted Subsidiary of the properties subject to such
leases;
(l) Liens securing any extension, renewal or replacement (or
successive extensions, renewals or replacements), in whole or in part,
of any Debt or other obligation secured by any Lien permitted by any of
the foregoing clauses of this Section; provided, however, that any such
extension, renewal or replacement shall be limited to all or a part of
the property or assets which secured the Debt or other obligation so
extended, renewed or replaced (plus any improvements on such property)
and that the amount of such Debt or other obligation secured thereby is
not increased; and
(m) Liens not otherwise permitted by the foregoing clauses of
this Section securing Debt in an aggregate principal or face amount at
any date not to exceed 10% of Consolidated Tangible Net Worth.
Notwithstanding the foregoing, for purposes of this Section, a Lien shall not be
deemed to be created (i) solely by virtue of an Asset Drop-Down or (ii) on any
Accounts Receivable that are treated as having been sold by the Borrower or any
of its Subsidiaries under applicable generally accepted accounting principles
applied in accordance with Section 1.02.
SECTION 5.08. Consolidations, Mergers and Sales of Assets. The
Borrower covenants that it will not merge or consolidate with any other
corporation or sell or convey all or substantially all of its assets to any
person (other than such a sale or conveyance to a Subsidiary or any successor
thereto (such a sale or conveyance
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being called an "Asset Drop-Down")), unless (i) either the Borrower shall be the
continuing corporation or the successor corporation or the person which acquires
by sale or conveyance substantially all the assets of the Borrower (if other
than the Borrower) shall be a corporation organized under the laws of the United
States of America or any State thereof and shall expressly assume the due and
punctual payment of the principal of and interest on all the Notes according to
their tenor, and the due and punctual performance and observance of all of the
covenants and conditions of this Agreement to be performed or observed by the
Borrower, by one or more agreements, reasonably satisfactory in form to the
Required Banks, executed and delivered to the Agent by such corporation, and
(ii) the Borrower or such successor corporation, as the case may be, shall not,
immediately after such merger or consolidation, or such sale or conveyance, be
in default in the performance of any such covenant or condition. In the event of
any Asset Drop-Down after the date of this Agreement, any subsequent sale or
conveyance of assets by a Subsidiary to which assets were transferred in such
Asset Drop-Down (a "Drop-Down Subsidiary") will be deemed to be a sale or
conveyance of assets by the Borrower for purposes of this Section 5.08.
SECTION 5.09. Use of Proceeds. The proceeds of the Loans made
under this Agreement will be used by the Borrower for general corporate
purposes, including, without limitation, the repayment of maturing commercial
paper and other Debt of the Borrower and the consummation of the Acquisition.
None of such proceeds will be used for the purpose of buying or carrying any
"margin stock" within the meaning of Regulation U.
ARTICLE VI
DEFAULTS
SECTION 6.01. Events of Default. If one or more of the following
events ("Events of Default") shall have occurred and be continuing:
(a) the Borrower shall fail to pay when due any principal of any
Loan, or shall fail to pay within five Domestic Business Days of the due
date thereof any interest on any Loan, any fees or any other amount
payable hereunder;
(b) the Borrower shall fail to observe or perform any covenant
contained in Section 5.02, 5.03, 5.04, 5.05, 5.06, 5.07 or 5.08;
(c) the Borrower shall fail to observe or perform any covenant or
agreement contained in this Agreement (other than those covered by
clause (a) or (b) above) for 30 days after notice thereof has been given
to the Borrower by the Agent at the request of the Required Banks;
(d) any representation or warranty made or deemed made by the
Borrower in this Agreement or in any certificate delivered pursuant to
this Agreement shall prove to have been materially incorrect when made
(or deemed
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made pursuant to Section 3.02);
(e) the Borrower or any Subsidiary shall fail to make any payment
of principal or interest in respect of any Material Financial
Obligations when due or within any applicable grace period;
(f) any event or condition shall occur which results in the
acceleration of the maturity of any Material Debt or enables the holder
of such Debt or any Person acting on such holder's behalf to accelerate
the maturity thereof (unless such acceleration or right to accelerate in
respect of such event or condition has been validly waived by or on
behalf of such holder by waiver then in effect);
(g) the Borrower shall commence a voluntary case seeking
liquidation, reorganization or other relief with respect to itself or
its debts under any bankruptcy, insolvency or other similar law now or
hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any substantial
part of its property, or shall consent to any such relief or to the
appointment of or taking possession by any such official in an
involuntary case seeking such relief commenced against it under any such
law, or shall make a general assignment for the benefit of creditors, or
shall admit in writing its inability generally to pay its debts as they
become due;
(h) an order for relief shall be entered against the Borrower
under the federal bankruptcy laws as now or hereafter in effect in an
involuntary case or other proceeding seeking liquidation, reorganization
or other relief with respect to it or its debts or seeking the
appointment of a trustee, receiver, liquidator, custodian or other
similar official of it or any substantial part of its property, and such
decree or order shall remain undismissed and unstayed for a period of 90
days;
(i) at any time prior to the consummation of the Acquisition,
AT&T shall cease to be the direct or indirect beneficial owner of at
least 75% of the Voting Power;
(j) at any time from and after the consummation of the
Acquisition, both (A) and (B) below shall occur:
(A) (x) the Nomura Group shall cease to be the direct or
indirect beneficial owner of shares of capital stock of the
Borrower with at least 40% of the Voting Power, or (y) any person
or group of persons (within the meaning of Section 13 or 14 of
the Securities Exchange Act of 1934, as amended) (other than the
Nomura Group) shall have acquired on any date beneficial
ownership (within the meaning of Rule 13d-3 promulgated by the
Securities and Exchange Commission under said Act) of shares of
capital stock of the Borrower with a greater Voting Power than
the Voting Power of shares of which the Nomura Group is the
direct or indirect beneficial owner;
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and
(B) any person or group of persons (as defined in clause
(A) above) (other than the Nomura Group) shall have acquired
beneficial ownership (as defined in clause (A) above) of shares
of capital stock of the Borrower with 30% or more of the Voting
Power, or during any period of 12 consecutive calendar months,
individuals who were directors of the Borrower on the first day
of such period and any new director (x) whose election by the
board of directors of the Borrower or nomination for election by
the Borrower's stockholders was approved by a vote of at least a
majority of the directors then still in office who either were
directors at the beginning of such period or whose election or
nomination for election was previously so approved or (y) who was
elected to fill a vacancy on such board of directors created in
connection with a spin-off or public offering of common stock of
the Borrower, prior to the date of consummation of such spin-off
or public offering, shall cease to constitute a majority of the
board of directors of the Borrower;
then, and in every such event, the Agent shall (i) if requested by Banks having
more than 50% in aggregate amount of the Commitments, by notice to the Borrower
terminate the Commitments and they shall thereupon terminate, and (ii) if
requested by Banks holding Notes evidencing more than 50% in aggregate principal
amount of the Loans, by notice to the Borrower declare the Loans (together with
accrued interest thereon) to be, and the Loans (together with accrued interest
thereon) shall thereupon become, immediately due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrower; provided that in the case of any of the Events of
Default specified in paragraph (g) or (h) above, without any notice to the
Borrower or any other act by the Agent or the Banks, the Commitments shall
thereupon terminate and the Loans (together with accrued interest thereon) shall
become immediately due and payable without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by the Borrower.
SECTION 6.02. Notice of Default. The Agent shall give notice to
the Borrower under Section 6.01(c) promptly upon being requested to do so by the
Required Banks and shall thereupon notify all the Banks thereof.
SECTION 6.03. Rescission. If at any time after termination of the
Commitments and/or acceleration of the maturity of the Loans pursuant to Section
6.01, the Borrower shall pay all arrears of interest and all payments on account
of principal of the Loans which shall have become due otherwise than by
acceleration (with interest on principal at the rates specified in this
Agreement) and all Defaults (other than nonpayment of principal of and accrued
interest on the Loans due and payable solely by virtue of acceleration) shall be
remedied or waived pursuant to Section 9.05, then upon the written consent of
the Required Banks and notice to the Borrower, such termination of the
Commitments and/or such acceleration and their consequences may be rescinded and
annulled; but such action shall not affect any
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subsequent Default or impair any right or remedy consequent thereon. The
provisions of the preceding sentence are intended merely to bind the Banks to a
decision which may be made at the election of the Required Banks; they are not
intended to benefit the Borrower and do not give the Borrower the right to
require the Banks to rescind or annul any acceleration hereunder, even if the
conditions set forth herein are met.
ARTICLE VII
THE AGENT
SECTION 7.01. Appointment and Authorization. Each Bank
irrevocably appoints and authorizes the Agent to take such action as agent on
its behalf and to exercise such powers under this Agreement and the Notes as are
delegated to the Agent by the terms hereof or thereof, together with all such
powers as are reasonably incidental thereto.
SECTION 7.02. Agent and Affiliates. Morgan Guaranty Trust Company
of New York shall have the same rights and powers under this Agreement as any
other Bank and may exercise or refrain from exercising the same as though it
were not the Agent, and Morgan Guaranty Trust Company of New York and its
affiliates may accept deposits from, lend money to, and generally engage in any
kind of business with the Borrower or any Subsidiary or affiliate of the
Borrower as if it were not the Agent hereunder.
SECTION 7.03. Action by Agent. The obligations of the Agent
hereunder are only those expressly set forth herein. Without limiting the
generality of the foregoing, the Agent shall not be required to take any action
with respect to any Default, except as expressly provided in Article VI.
SECTION 7.04. Consultation with Experts. The Agent may consult
with legal counsel (who may be counsel for the Borrower), independent public
accountants and other experts selected by it and shall not be liable for any
action taken or omitted to be taken by it in good faith in accordance with the
advice of such counsel, accountants or experts.
SECTION 7.05. Liability of Agent. Neither the Agent nor any of
its affiliates nor any of their respective directors, officers, agents or
employees shall be liable for any action taken or not taken by it in connection
herewith (i) with the consent or at the request of the Required Banks or (ii) in
the absence of its own gross negligence or willful misconduct. Neither the Agent
nor any of its affiliates nor any of their respective directors, officers,
agents or employees shall be responsible for or have any duty to ascertain,
inquire into or verify (i) any statement, warranty or representation made in
connection with this Agreement or any borrowing hereunder; (ii) the performance
or observance of any of the covenants or agreements of the Borrower; (iii) the
satisfaction of any condition specified in Article III, except receipt of items
required to be delivered to the Agent; or (iv) the validity, effectiveness or
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genuineness of this Agreement, the Notes or any other instrument or writing
furnished in connection herewith. The Agent shall not incur any liability by
acting in reliance upon any notice, consent, certificate, statement, or other
writing (which may be a bank wire, telex, facsimile transmission or similar
writing) believed by it to be genuine or to be signed by the proper party or
parties.
SECTION 7.06. Indemnification. Each Bank shall, ratably in
accordance with its Commitment, indemnify the Agent, its affiliates and their
respective directors, officers, agents and employees (to the extent not
reimbursed by the Borrower) against any cost, expense (including counsel fees
and disbursements), claim, demand, action, loss or liability (except such as
result from such indemnitees' gross negligence or willful misconduct) that such
indemnitees may suffer or incur in connection with this Agreement or any action
taken or omitted by such indemnitees hereunder.
SECTION 7.07. Credit Decision. Each Bank acknowledges that it
has, independently and without reliance upon the Agent or any other Bank, and
based on such documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Agreement. Each Bank also
acknowledges that it will, independently and without reliance upon the Agent or
any other Bank, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking any action under this Agreement.
SECTION 7.08. Successor Agent. The Agent may resign at any time
by giving notice thereof to the Banks and the Borrower. Upon any such
resignation, the Borrower shall have the right to appoint a successor Agent from
among the Banks. If no successor Agent shall have been so appointed, and shall
have accepted such appointment, within 30 days after the retiring Agent gives
notice of resignation, then the retiring Agent may, on behalf of the Banks,
appoint a successor Agent, which shall be a commercial bank organized or
licensed under the laws of the United States of America or of any State thereof
and having a combined capital and surplus of at least $300,000,000. Upon the
acceptance of its appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the rights
and duties of the retiring Agent, and the retiring Agent shall be discharged
from its duties and obligations hereunder. After any retiring Agent's
resignation hereunder as Agent, the provisions of this Article shall inure to
its benefit as to any actions taken or omitted to be taken by it while it was
Agent.
SECTION 7.09. Agent's Fee. The Borrower shall pay to the Agent
for its own account fees in the amounts and at the times previously agreed upon
between the Borrower and the Agent.
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ARTICLE VIII
CHANGE IN CIRCUMSTANCES
SECTION 8.01. Basis for Determining Interest Rate Inadequate or
Unfair. If on or prior to the fair first day of any Interest Period for any CD
Loan, Euro-Dollar Loan or Money Market LIBOR Loan:
(a) the Agent is advised by the CD Reference Banks or, under the
circumstances contemplated by the final sentence of the definition of
London Interbank Offered Rate, the Euro-Dollar Reference Banks that
deposits in dollars (in the applicable amounts) are not being offered to
such Reference Banks in the relevant market for such Interest Period, or
(b) in the case of CD Loans or Euro-Dollar Loans, Banks having
50% or more of the aggregate principal amount of the affected Loans
advise the Agent that the Adjusted CD Rate or the London Interbank
Offered Rate, as the case may be, as determined by the Agent will not
adequately and fairly reflect the cost to such Banks of funding their CD
Loans or Euro-Dollar Loans, as the case may be, for such Interest
Period,
the Agent shall forthwith give notice thereof to the Borrower and the Banks,
whereupon until the Agent notifies the Borrower that the circumstances giving
rise to such suspension no longer exist, (i) the obligations of the Banks to
make CD Loans or Euro-Dollar Loans, as the case may be, or to convert
outstanding Loans into CD Loans or Euro-Dollar Loans, as the case may be, shall
be suspended and (ii) each outstanding CD Loan or Euro-Dollar Loan, as the case
may be, shall be converted into a Base Rate Loan on the last day of the then
current Interest Period applicable thereto. Unless the Borrower notifies the
Agent at least one Domestic Business Day before the date of any Fixed Rate
Borrowing for which a Notice of Borrowing has previously been given that it
elects not to borrow on such date, (i) if such Fixed Rate Borrowing is a
Committed Borrowing, such Borrowing shall instead be made as a Base Rate
Borrowing and (ii) if such Fixed Rate Borrowing is a Money Market LIBOR
Borrowing, the Money Market LIBOR Loans comprising such Borrowing shall bear
interest for each day from and including the first day to but excluding the last
day of the Interest Period applicable thereto at the Base Rate for such day.
SECTION 8.02. Illegality. If, on or after the date of this
Agreement, the adoption of any applicable law, rule or regulation, or any change
in any applicable law, rule or regulation, or any change in the interpretation
or administration thereof by any governmental authority, central bank or
comparable agency charged with the interpretation or administration thereof, or
compliance by any Bank (or its Euro-Dollar Lending Office) with any request or
directive (whether or not having the force of law) of any such authority,
central bank or comparable agency shall make it unlawful or impossible for any
Bank (or its Euro-Dollar Lending Office) to make, maintain or fund its
Euro-Dollar Loans and such Bank shall so notify the Agent, the Agent shall
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forthwith give notice thereof to the other Banks and the Borrower, whereupon
until such Bank notifies the Borrower and the Agent that the circumstances
giving rise to such suspension no longer exist, the obligation of such Bank to
make Euro-Dollar Loans, or to convert outstanding Loans into Euro-Dollar Loans,
shall be suspended. Before giving any notice to the Agent pursuant to this
Section, such Bank shall designate a different Euro-Dollar Lending Office if
such designation will avoid the need for giving such notice and will not, in the
judgment of such Bank, be otherwise disadvantageous to such Bank. If such notice
is given, each Euro-Dollar Loan of such Bank then outstanding shall be converted
to a Base Rate Loan either (a) on the last day of the then current Interest
Period applicable to such Euro-Dollar Loan if such Bank may lawfully continue to
maintain and fund such Loan to such day or (b) immediately if such Bank shall
determine that it may not lawfully continue to maintain and fund such Loan to
such day.
SECTION 8.03. Increased Cost and Reduced Return. (a) If on or
after (x) the date hereof, in the case of any Committed Loan or any obligation
to make Committed Loans or (y) the date of the related Money Market Quote, in
the case of any Money Market Loan, the adoption of any applicable law, rule or
regulation, or any change in any applicable law, rule or regulation, or any
change in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Bank (or its Applicable Lending
Office) with any request or directive (whether or not having the force of law)
of any such authority, central bank or comparable agency shall impose, modify or
deem applicable any reserve (including, without limitation, any such requirement
imposed by the Board of Governors of the Federal Reserve System, but excluding
(i) with respect to any CD Loan any such requirement included in an applicable
Domestic Reserve Percentage and (ii) with respect to any Euro-Dollar Loan any
such requirement with respect to which such Bank is entitled to compensation
during the relevant Interest Period under Section 2.15), special deposit,
insurance assessment (excluding, with respect to any CD Loan, any such
requirement reflected in an applicable Assessment Rate) or similar requirement
against assets of, deposits with or for the account of, or credit extended by,
any Bank (or its Applicable Lending Office) or shall impose on any Bank (or its
Applicable Lending Office) or on the United States market for certificates of
deposit or the London interbank market any other condition affecting its Fixed
Rate Loans, its Note or its obligation to make Fixed Rate Loans and the result
of any of the foregoing is to increase the cost to such Bank (or its Applicable
Lending Office) of making or maintaining any Fixed Rate Loan, or to reduce the
amount of any sum received or receivable by such Bank (or its Applicable Lending
Office) under this Agreement or under its Note with respect thereto, by an
amount deemed by such Bank to be material, then, within 15 days after demand by
such Bank (with a copy to the Agent), the Borrower shall pay to such Bank such
additional amount or amounts as will compensate such Bank for such increased
cost or reduction.
(b) 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 in any such law, rule or regulation, or any change in
the interpretation or administration thereof by any governmental authority,
central bank or comparable
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<PAGE>
agency charged with the interpretation or administration thereof, or any request
or directive regarding capital adequacy (whether or not having the force of law)
of any such authority, central bank or comparable agency has or would have the
effect of reducing the rate of return on capital of such Bank (or its Parent) as
a consequence of such Bank's obligations hereunder to a level below that which
such Bank (or its Parent) could have achieved but for such adoption, change,
request or directive (taking into consideration its policies with respect to
capital adequacy) by an amount deemed by such Bank to be material, then pursuant
to paragraph (c) below, the Borrower shall pay to such Bank such additional
amount or amounts as will compensate such Bank (or its Parent) for such
reduction.
(c) Each Bank will promptly notify the Borrower and the Agent of
any event of which it has knowledge, occurring after the date hereof, which will
entitle such Bank to compensation pursuant to this Section. A certificate of a
Bank setting forth such amount or amounts (including computation of such amount
or amounts) as shall be necessary to compensate such Bank or its Parent as
specified in paragraph (a) or (b) above, as the case may be, shall be delivered
to the Borrower and such amount or amounts may be reviewed by the Borrower.
Unless the Borrower disagrees in good faith with the computation of the amount
or amounts in such certificate, the Borrower shall pay to such Bank, within 30
days after receipt by the Borrower of such certificate delivered by such Bank,
the amount shown as due on any such certificate. If the Borrower, after receipt
of any such certificate from a Bank, disagrees with such Bank on the computation
of the amount or amounts owed to such Bank pursuant to paragraph (a) or (b)
above, such Bank and the Borrower shall negotiate in good faith to promptly
resolve such disagreement. In either case, however, such Bank shall have a duty
to mitigate the damages that may arise as a consequence of paragraph (a) or (b)
above (including, without limitation, changing its Applicable Lending Office) to
the extent that such mitigation will not, in the judgment of such Bank, entail
any cost or disadvantage to such Bank that such Bank is not reimbursed or
compensated for by the Borrower.
SECTION 8.04. Taxes. (a) Any and all payments by the Borrower to
or for the account of any Bank or the Agent hereunder or under any Note shall be
made free and clear of and without deduction for any and all present or future
taxes, duties, levies, imposts, deductions, charges or withholdings imposed by
the United States or any political subdivision or taxing authority thereof, 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 it,
by the United States or any political subdivision or taxing authority thereof
(all such non-excluded taxes, duties, levies, imposts, deductions, charges,
withholdings and liabilities being hereinafter referred to as "Taxes"). If the
Borrower shall be required by law to deduct any Taxes from or in respect of any
sum payable hereunder or under any Note to any Bank or the Agent, (i) the sum
payable shall be increased as necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section 8.04) 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 been made,
(ii) the Borrower shall make such deductions, (iii) the Borrower shall pay the
full amount deducted to the relevant taxation authority or other authority in
accordance with
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applicable law and (iv) the Borrower shall furnish to the Agent, at its address
referred to in Section 9.01, the original or a certified copy of a receipt
evidencing payment thereof.
(b) In addition, the Borrower agrees to pay any present or future
stamp or documentary taxes and any other excise or property taxes, or charges or
similar levies which arise from any payment made hereunder or under any Note or
from the execution or delivery of, or otherwise with respect to, this Agreement
or any Note (hereinafter referred to as "Other Taxes").
(c) The Borrower agrees to indemnify each Bank and the Agent for
the full amount of Taxes or Other Taxes (including, without limitation, any
Taxes or Other Taxes imposed or asserted by any jurisdiction on amounts payable
under this Section 8.04) paid by such Bank or the Agent (as the case may be) and
any liability (including penalties, interest and reasonable out-of-pocket
expenses) arising therefrom or with respect thereto (other than any such
liability that results from the gross negligence or willful misconduct of such
Bank and the Agent, and whether or not such Taxes or Other Taxes were correctly
or legally asserted by the relevant taxing authority or other governmental
authority). This indemnification shall be made within 30 days from the date such
Bank or the Agent (as the case may be) makes written demand therefor. If any
Bank or the Agent receives a refund in respect of any Taxes or Other Taxes for
which such Bank or the Agent has received payment from the Borrower hereunder it
shall promptly repay such refund (including any interest received by such Bank
or the Agent from the taxing authority with respect to the refund with respect
to such Taxes or Other Taxes) to the Borrower, net of all reasonable
out-of-pocket expenses of such Bank; provided that the Borrower, upon the
request of such Bank or the Agent, agrees to return such refund (plus penalties,
interest or other charges) to such Bank or the Agent in the event such Bank or
the Agent is required to repay such refund.
(d) Each Bank organized under the laws of a jurisdiction outside
the United States, on or prior to the date of its execution and delivery of this
Agreement in the case of each Bank listed on the signature pages hereof and on
or prior to the date on which it becomes a Bank in the case of each other Bank,
and from time to time thereafter if requested in writing by the Borrower (but
only so long as such Bank remains lawfully able to do so), shall provide the
Borrower with Internal Revenue Service Form 1001 or 4224, as appropriate, or any
successor form prescribed by the Internal Revenue Service, duly executed by such
Bank, certifying that such Bank is entitled to benefits under an income tax
treaty to which the United States is a party which reduces the rate of
withholding tax on payments of interest or certifying that the income receivable
pursuant to this Agreement is effectively connected with the conduct of a trade
or business in the United States. If the form provided by a Bank at the time
such Bank first becomes a party to this Agreement indicates a United States
interest withholding tax rate in excess of zero, withholding tax at such rate
shall be considered excluded from "Taxes" as defined in Section 8.04(a).
(e) Each Bank further agrees to promptly notify the Borrower if
such Bank changes its Applicable Lending Office and, upon written request from
the
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Borrower, deliver Forms 1001 or 4224 required pursuant to Section 8.04(d) prior
to the immediately following due date of any payment by the Borrower hereunder.
(f) The Borrower shall not be required to pay any additional
amounts to any Bank or the Agent in respect of Taxes and Other Taxes pursuant to
paragraphs (a), (b) and (c) above if the obligation to pay such additional
amounts would not have arisen but for a failure by such Bank or Agent to comply,
if required, with the provisions of paragraphs (d) and (e) above unless such
failure results from (i) a change in applicable law, regulation or official
interpretation thereof or (ii) an amendment, modification or revocation of any
applicable tax treaty or a change in official position regarding the application
or interpretation thereof, in each case after the date hereof or after such Bank
became a party hereto; provided, however, that should a Bank, which is otherwise
exempt from or subject to a reduced rate of withholding tax, become subject to
Taxes because of its failure to deliver a form required hereunder, the Borrower
shall take such steps as such Bank shall reasonably request to assist such Bank
to recover such Taxes.
(g) Any Bank claiming any additional amounts payable under this
Section 8.04 shall (i) to the extent legally able to do so, upon reasonable
written request from the Borrower, file any certificate or document if such
filing would avoid the need for or reduce the amount of any such additional
amounts which may thereafter accrue, and the Borrower shall not be obligated to
pay such additional amounts if, after the Borrower's request, any Bank could
have filed such certificate or document and failed to do so; or (ii) consistent
with legal and regulatory restrictions, use reasonable efforts to change the
jurisdiction of its Applicable Lending Office if the making of such change would
avoid the need for or reduce the amount of any additional amounts which may
thereafter accrue and would not, in the judgment of such Bank, be otherwise
disadvantageous to such Bank.
SECTION 8.05. Base Rate Loans Substituted for Affected Fixed Rate
Loans. If (i) the obligation of s any Bank to make or maintain Euro-Dollar Loans
has been suspended pursuant to Section 8.02 or (ii) any Bank has demanded
compensation under Section 8.03 or 8.04 with respect to its CD Loans or
Euro-Dollar Loans and the Borrower shall, by at least five Euro-Dollar Business
Days' prior notice to such Bank through the Agent, have elected that the
provisions of this Section shall apply to such Bank, then, unless and until such
Bank notifies the Borrower that the circumstances giving rise to such suspension
or demand for compensation no longer exist:
(a) all Loans which would otherwise be made by such Bank as (or
continued as or converted into) CD Loans or Euro-Dollar Loans, as the
case may be, shall instead be Base Rate Loans (on which interest and
principal shall be payable contemporaneously with the related Fixed Rate
Loans of the other Banks), and
(b) after each of its CD Loans or Euro-Dollar Loans, as the case
may be, has been repaid (or converted to a Base Rate Loan), all payments
of principal which would otherwise be applied to repay such Fixed Rate
Loans shall be applied to repay its Base Rate Loans instead.
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If such Bank notifies the Borrower that the circumstances giving rise to such
notice no longer apply, the principal amount of each such Base Rate Loan shall
be converted into a CD Loan or Euro-Dollar Loan, as the case may be, on the
first day of the next succeeding Interest Period applicable to the related CD
Loans or Euro-Dollar Loans of the other Banks.
SECTION 8.06. Substitution of Bank. If any Bank (i) has demanded
compensation for increased costs pursuant to Section 8.03 or 8.04 or (ii) has
determined that the making or continuation of any Euro-Dollar Loan has become
unlawful or impermissible pursuant to Section 8.02 and similar additional
interest or compensation has not been demanded by, or a similar determination
has not been made by, all of the Banks, the Borrower shall have the right to
designate an Assignee which is not an affiliate of the Borrower to purchase for
cash, pursuant to an Assignment and Assumption Agreement substantially in the
form of Exhibit G hereto, the outstanding Loans and Commitment of such Bank and
to assume all of such Bank's other rights and obligations hereunder without
recourse to or warranty by, or expense to, such Bank, for a purchase price equal
to the principal amount of all of such Bank's outstanding Loans plus any accrued
but unpaid interest thereon and the accrued but unpaid facility fees in respect
of that Bank's Commitment hereunder plus such amount, if any, as would be
payable pursuant to Section 2.13 if the outstanding Loans of such Bank were
prepaid in their entirety on the date of consummation of such assignment.
SECTION 8.07. Compensation. The Borrower shall not be liable for
compensating any Bank under Sections 2.13, 8.03 and 8.04 for any funding losses,
increased costs or taxes incurred by such Bank more than 30 days prior to such
Bank's written notice of its intention to demand payment therefor.
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ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Notices. All notices, requests and other
communications to any party hereunder shall be in writing (including bank wire,
telex, facsimile transmission or similar writing) and shall be given to such
party: (x) in the case of the Borrower or the Agent, at its address or telex or
facsimile number set forth on the signature pages hereof, (y) in the case of any
Bank, at its address or telex or facsimile number set forth in its
Administrative Questionnaire or (z) in the case of any party, such other address
or telex or facsimile number as such party may hereafter specify for the purpose
by notice to the Agent and the Borrower. Each such notice, request or other
communication shall be effective (i) if given by telex, when such telex is
transmitted to the telex number specified in this Section and the appropriate
answerback is received, (ii) if given by mail, 72 hours after such communication
is deposited in the mails with first class postage prepaid, addressed as
aforesaid or (iii) if given by any other means, when received at the address
specified in this Section; provided that notices to the Agent under Article II
or Article VIII shall not be effective until received.
SECTION 9.02. No Waivers. No failure or delay by the Agent or any
Bank in exercising any right, power or privilege hereunder or under any Note
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 9.03. Expenses; Indemnification. (a)penThe Borrower shall
pay (i) all reasonable out-of-pocket expenses of the Agent, including reasonable
fees and disbursements of special counsel for the Agent, in connection with the
preparation and administration of this Agreement, any waiver or consent
hereunder or any amendment hereof or any Default or alleged Default hereunder
and (ii) if an Event of Default occurs, all reasonable out-of-pocket expenses
incurred by the Agent and each Bank, including reasonable fees and disbursements
of counsel, in connection with such Event of Default and collection, bankruptcy,
insolvency and other enforcement proceedings resulting therefrom.
(b) The Borrower agrees to indemnify the Agent and each Bank,
their respective affiliates and the respective directors, officers, agents and
employees of the foregoing (each an "Indemnitee") and hold each Indemnitee
harmless from and against any and all liabilities, losses, damages, costs and
reasonable out-of-pocket expenses of any kind (including, without limitation,
the reasonable fees and disbursements of counsel) which were actually incurred
by such Indemnitee in connection with any investigative, administrative or
judicial proceeding (whether or not such Indemnitee shall be designated a party
thereto) brought or threatened relating to or arising out of this Agreement or
any actual or proposed use of proceeds of Loans
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hereunder; provided that no Indemnitee shall have the right to be indemnified
hereunder for such Indemnitee's own gross negligence or willful misconduct.
SECTION 9.04. Sharing of Set-Offs. Each Bank agrees that if it
shall, by exercising any right of set-off or counterclaim or otherwise, receive
payment of a proportion of the aggregate amount of principal and interest due
with respect to any Note held by it which is greater than the proportion
received by any other Bank in respect of the aggregate amount of principal and
interest due with respect to any Note held by such other Bank, the Bank
receiving such proportionately greater payment shall purchase such
participations in the Notes held by the other Banks, and such other adjustments
shall be made, as may be required so that all such payments of principal and
interest with respect to the Notes held by the Banks shall be shared by the
Banks pro rata; provided that nothing in this Section shall impair the right of
any Bank to exercise any right of set-off or counterclaim it may have and to
apply the amount subject to such exercise to the payment of indebtedness of the
Borrower other than its indebtedness under the Notes.
SECITON 9.05. Amendments and Waivers. Any provision of this
Agreement or the Notes may be amended or waived if, but only if, such amendment
or waiver is in writing and is signed by the Borrower and the Required Banks
(and, if the rights or duties of the Agent are affected thereby, by the Agent);
provided that no such amendment or waiver shall, unless signed by all the Banks,
(i) increase or decrease the Commitment of any Bank (except for a ratable
decrease in the Commitments of all Banks) or subject any Bank to any additional
obligation, (ii) reduce the principal of or rate of interest on any Loan or any
fees hereunder, (iii) postpone the scheduled maturity of any payment of
principal of or interest on any Loan or any fees hereunder or for termination of
any Commitment or (iv) change the percentage of the Commitments or of the
aggregate unpaid principal amount of the Notes, or the number of Banks, which
shall be required for the Banks or any of them to take any action under this
Section or any other provision of this Agreement.
SECTION 9.06. Successors and Assigns. (a) The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns, except that the Borrower may not
assign or otherwise transfer any of its rights under this Agreement without the
prior written consent of all Banks.
(b) Any Bank may at any time grant to one or more banks or other
institutions (each a "Participant") participating interests in its Commitment or
any or all of its Loans. In the event of any such grant by a Bank of a
participating interest to a Participant, whether or not upon notice to the
Borrower and the Agent, such Bank shall remain responsible for the performance
of its obligations hereunder, and the Borrower 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. Any agreement pursuant to which any Bank
may grant such a participating interest shall provide that such Bank shall
retain the sole right and responsibility to enforce the obligations of the
Borrower hereunder including, without limitation, the right to approve any
amendment, modification or waiver of any provision of this Agreement; provided
that such
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participation agreement may provide that such Bank will not agree to any
modification, amendment or waiver of this Agreement described in clause (i),
(ii) or (iii) of Section 9.05 without the consent of the Participant. The
Borrower agrees that each Participant shall, to the extent provided in its
participation agreement, be entitled to the benefits of Sections 2.13 and 2.15
and Article VIII with respect to its participating interest. An assignment or
other transfer which is not permitted by subsection (c) or (d) below shall be
given effect for purposes of this Agreement only to the extent of a
participating interest granted in accordance with this subsection (b).
(c) Any Bank may at any time assign to one or more banks or other
institutions (each an "Assignee") all, or a proportionate part of all, of its
rights and obligations under this Agreement and the Notes, and such Assignee
shall assume such rights and obligations, pursuant to an Assignment and
Assumption Agreement in substantially the form of Exhibit G hereto executed by
such Assignee and such transferor Bank, with (and subject to) the subscribed
consent of the Borrower and the Agent; provided that such assignment may, but
need not, include rights of the transferor Bank in respect of outstanding Money
Market Loans; and provided further that the interest of the Assignee shall be in
a minimum amount equivalent to an original Commitment of $10,000,000 and the
collective interest of the transferor Bank and its affiliates shall be in a
minimum amount equivalent to an original Commitment of $10,000,000 unless, in
the case of the transferor Bank and its affiliates, they have no Commitment
after giving effect to such assignment. Upon execution and delivery of such
instrument and payment by such Assignee to such transferor Bank of an amount
equal to the purchase price agreed between such transferor Bank and such
Assignee, such Assignee shall be a Bank party to this Agreement and shall have
all the rights and obligations of a Bank with a Commitment as set forth in such
instrument of assumption, and the transferor Bank shall be released from its
obligations hereunder to a corresponding extent, and no further consent or
action by any party shall be required. Upon the consummation of any assignment
pursuant to this subsection (c), the transferor Bank, the Agent and the Borrower
shall make appropriate arrangements so that, if required, a new Note is issued
to the Assignee. In connection with any such assignment, the transferor Bank
shall pay to the Agent an administrative fee for processing such assignment in
the amount of $2,500. If the Assignee is not incorporated under the laws of the
United States of America or a state thereof, it shall deliver to the Borrower
and the Agent certification as to exemption from deduction or withholding of any
United States federal income taxes in accordance with Section 8.04.
(d) Any Bank may at any time assign all or any portion of its
rights under this Agreement and its Note to a Federal Reserve Bank. No such
assignment shall release the transferor Bank from its obligations hereunder.
(e) No Assignee, Participant or other transferee of any Bank's
rights shall be entitled to receive any greater payment under Section 8.03 or
8.04 than such Bank would have been entitled to receive with respect to the
rights transferred, unless such transfer is made with the Borrower's prior
written consent or by reason of the provisions of Section 8.02, 8.03 or 8.04
requiring such Bank to designate a different Applicable Lending Office under
certain circumstances or at a time when the circumstances giving rise to such
greater payment did not exist.
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(f) Any Bank may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
9.06, disclose to the Assignee or Participant or proposed Assignee or
Participant any information relating to the Borrower or its Subsidiaries
furnished to such Bank by the Agent or by or on behalf of the Borrower; provided
that, prior to any such disclosure, such Assignee or Participant or proposed
Assignee or Participant shall agree to preserve in accordance with Section 9.11
the confidentiality of any confidential information described therein.
SECTION 9.07. Collateral. Each of the Banks represents to the
Agent and each of the other Banks that it in good faith is not relying upon any
"margin stock" (as defined in Regulation U) as collateral in the extension or
maintenance of the credit provided for in this Agreement.
SECTION 9.08. Governing Law; Submission to Jurisdiction. This
Agreement and each Note shall be governed by and construed in accordance with
the laws of the State of New York. The Borrower hereby submits to the
nonexclusive jurisdiction of the United States District Court for the Southern
District of New York and of any New York State court sitting in New York City
for purposes of all legal proceedings arising out of or relating to this
Agreement or the Notes or the transactions contemplated hereby. The Borrower
irrevocably waives, to the fullest extent permitted by law, any objection which
it may now or hereafter have to the laying of the venue of any such proceeding
brought in such a court and any claim that any such proceeding brought in such a
court has been brought in an inconvenient forum.
SECTION 9.09. Counterparts; Integration. 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 constitutes the entire agreement and understanding
among the parties hereto and supersedes any and all prior agreements and
understandings, oral or written, relating to the subject matter hereof.
SECTION 9.10. WAIVER OF JURY TRIAL. EACH OF THE BORROWER, THE
AGENT AND THE BANKS HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY
IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
NOTES OR THE TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 9.11. Confidentiality. Subject to Section 9.06(f), the
Banks shall hold all nonpublic information obtained pursuant to the requirements
of this Agreement and identified as such by the Borrower in accordance with such
Bank's customary procedures for handling confidential information of this nature
and in accordance with safe and sound banking practices and in any event may
make disclosure reasonably required by a bona fide offeree or transferee in
connection with the contemplated transfer, or as required or requested by any
governmental authority or representative thereof, or pursuant to legal process,
or to its accountants, lawyers and other advisors, and shall require any such
offeree or transferee to agree (and require
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any of its offerees, transferees or participants to agree) to comply with this
Section 9.11.
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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.
AT&T CAPITAL CORPORATION
By
____________________________________
Title:
Commitments
- -----------
$ MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By
____________________________________
Title:
$ [OTHER BANKS]
By
____________________________________
Title:
_________________
Total Commitments
$1,000,000,000
==============
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Agent
By
____________________________________
Title:
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EXHIBIT A
NOTE
New York, New York
, 19
For value received, AT&T Capital Corporation, a Delaware corporation
(the "Borrower"), promises to pay to the order of
(the "Bank"), for the account of its Applicable
Lending Office, the unpaid principal amount of each Loan made by the Bank to the
Borrower pursuant to the Credit Agreement referred to below on the maturity date
provided for in the Credit Agreement. The Borrower promises to pay interest on
the unpaid principal amount of each such Loan on the dates and at the rate or
rates provided for in the Credit Agreement. All such payments of principal and
interest shall be made in lawful money of the United States in Federal or other
immediately available funds at the office of Morgan Guaranty Trust Company of
New York, 60 Wall Street, New York, New York.
All Loans made by the Bank, the respective types thereof and all
repayments of the principal thereof shall be recorded by the Bank and, if the
Bank so elects in connection with any transfer or enforcement hereof,
appropriate notations to evidence the foregoing information with respect to each
such Loan then outstanding may be endorsed by the Bank on the schedule attached
hereto, or on a continuation of such schedule attached to and made a part
hereof; provided that the failure of the Bank to make any such recordation or
endorsement shall not affect the obligations of the Borrower hereunder or under
the Credit Agreement.
This note is one of the Notes referred to in and subject to the terms of
the $1,000,000,000 Credit Agreement dated as of September 16, 1996 among the
Borrower, the banks party thereto and Morgan Guaranty Trust Company of New York,
as Agent (as the same may be amended from time to time, the "Credit Agreement").
Terms defined in the Credit Agreement are used herein with the same meanings.
Reference is made to the Credit Agreement for provisions for the mandatory and
optional prepayment hereof and the acceleration of the maturity hereof.
AT&T CAPITAL CORPORATION
By________________________
Title:
<PAGE>
<PAGE>
Note (cont'd)
LOANS AND PAYMENTS OF PRINCIPAL
<TABLE>
<CAPTION>
=================== ================ ================ ================= ================
<S> <C> <C> <C> <C>
Amount of Notation Made
Date Amount of Loan Type of Loan Principal Repaid By
=================== ================ ================ ================= ================
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- ---------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------
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- ---------------------------------------------------------------------------------------
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</TABLE>
2
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EXHIBIT B
Form of Money Market Quote Request
[Date]
To: Morgan Guaranty Trust Company of New York
(the "Agent")
From: AT&T Capital Corporation
Re: $1,000,000,000 Credit Agreement (as amended, the "Credit
Agreement") dated as of September 16, 1996 among the Borrower,
the Banks party thereto and the Agent
We hereby give notice pursuant to Section 2.03 of the Credit Agreement
that we request Money Market Quotes for the following proposed Money Market
Borrowing(s):
Date of Borrowing: __________________
Principal Amount(1) Interest Period(2)
$
Such Money Market Quotes should offer a Money Market [Margin] [Absolute
Rate]. [The applicable base rate is the London Interbank Offered Rate.]
Terms used herein have the meanings assigned to them in the Credit
Agreement.
AT&T CAPITAL CORPORATION
By________________________
Title:
- --------------
(1) Amount must be $5,000,000 or a larger multiple of $1,000,000.
(2) Not less than one month (LIBOR Auction) or not less than 7 days (Absoulte
Rate Auction), subject to the provisions of the definition of Interest
Period.
3
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EXHIBIT C
Form of Invitation for Money Market Quotes
[Date]
To: [Name of Bank]
Re: Invitation for Money Market Quotes to AT&T Capital Corporation
(the "Borrower")
Pursuant to Section 2.03 of the $1,000,000,000 Credit Agreement
(as amended, the "Credit Agreement") dated as of September 16, 1996 among the
Borrower, the Banks parties thereto and the undersigned, as Agent, we are
pleased on behalf of the Borrower to invite you to submit Money Market Quotes to
the Borrower for the following proposed Money Market Borrowing(s):
Date of Borrowing: __________________
Principal Amount Interest Period
$
Such Money Market Quotes should offer a Money Market [Margin]
[Absolute Rate]. [The applicable base rate is the London Interbank Offered
Rate.]
Please respond to this invitation by no later than [4:00 P.M.]
[9:30 A.M.] (New York City time) on [date].
Terms used herein have the meanings assigned to them in the
Credit Agreement.
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Agent
By______________________
Authorized Officer
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EXHIBIT D
Form of Money Market Quote
To: Morgan Guaranty Trust Company of New York,
as Agent
Re: Money Market Quote to AT&T Capital Corporation (the
"Borrower")
In response to your invitation on behalf of the Borrower dated
_____________, 19__, we hereby make the following Money Market Quote on the
following terms:
1. Quoting Bank: ________________________________
2. Person to contact at Quoting Bank:
_____________________________
3. Date of Borrowing: ____________________*
4. We hereby offer to make Money Market Loan(s) in the following principal
amounts, for the following Interest Periods and at the following rates:
<TABLE>
<CAPTION>
<S> <C> <C>
Principal Interest Money Market
Amount** Period*** [Margin****] [Absolute Rate*****]
$
$
</TABLE>
<PAGE>
<PAGE>
[Provided, that the aggregate principal amount of Money Market Loans for
which the above offers may be accepted shall not exceed
$____________.]**
We understand and agree that the offer(s) set forth above,
subject to the satisfaction of the applicable conditions set forth in the
$1,000,000,000 Credit Agreement (as amended, the "Credit Agreement") dated as of
September 16, 1996 among the Borrower, the Banks party thereto and yourselves,
as Agent, irrevocably obligates us to make the Money Market Loan(s) for which
any offer(s) are accepted, in whole or in part.
Terms used herein have the meanings assigned to them in the
Credit Agreement.
Very truly yours,
[NAME OF BANK]
Dated:_______________ By:__________________________
Authorized Officer
- --------------------
* As specified in the related Invitation.
** Principal amount bid for each Interest Period may not exceed principal
amount requested. Specify aggregate limitation if the sum of the
individual offers exceeds the amount the Bank is willing to lend. Bids
must be made for $5,000,000 or a larger multiple of $1,000,000.
*** Not less than one month or not less than 7 days, as specified in the
related Invitation. No more than five bids are permitted for each
Interest Period.
**** Margin over or under the London Interbank Offered Rate determined for
the applicable Interest Period. Specify percentage (to the nearest
1/10,000 of 1%) and specify whether "PLUS" or "MINUS".
***** Specify rate of interest per annum (to the nearest 1/10,000th of 1%).
2
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EXHIBIT E
OPINION OF
COUNSEL FOR THE BORROWER
To the Banks and the Agent
Referred to Below
c/o Morgan Guaranty Trust Company
of New York, as Agent
60 Wall Street
New York, New York 10260
Dear Sirs:
I am [General Counsel] [Assistant General Counsel] of AT&T
Capital Corporation (the "Borrower"), and as such, have acted as counsel for the
Borrower in connection with the $1,000,000,000 Credit Agreement (the "Credit
Agreement") dated as of September 16, 1996 among the Borrower, the banks listed
on the signature pages thereof and Morgan Guaranty Trust Company of New York, as
Agent. Terms defined in the Credit Agreement are used herein as therein defined.
This opinion is being rendered to you at the request of the Borrower pursuant to
Section 3.01(d) of the Credit Agreement.
I have examined originals or copies, certified or otherwise
identified to my satisfaction, of such documents, corporate records,
certificates of public officials and other instruments and have conducted such
other investigations of fact and law as I have deemed necessary or advisable for
purposes of this opinion.
Upon the basis of the foregoing, I am of the opinion that:
1. The Borrower is a corporation duly incorporated, validly
existing and in good standing under the laws of Delaware, and has all corporate
power and all governmental licenses, authorizations, consents and approvals
required to carry on its business as now conducted, except those which the
failure to have would not have a Material Adverse Effect.
2. The execution, delivery and performance by the Borrower of the
Credit Agreement and the Notes are within the Borrower's corporate power, have
been duly authorized by all necessary corporate action, require no action by or
in respect of, or filing with, any governmental body, agency or official and do
not contravene, or constitute a default under, any provision of applicable law
or regulation or of the certificate of incorporation or by-laws of the Borrower
or of any material agreement, judgment, injunction, order, decree or other
material instrument binding upon the Borrower or result in the creation or
imposition of any Lien on any asset of the Borrower.
3. The Credit Agreement constitutes a valid and binding agreement
of the Borrower and the Notes constitute valid and binding obligations of the
Borrower, in
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each case enforceable against the Borrower in accordance with their respective
terms, except as the same may be limited by bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium and similar laws affecting
creditors' rights generally and by general principles of equity (regardless of
whether considered in a proceeding in equity or at law).
4. There is no action, suit or proceeding pending against, or to
the best of my knowledge threatened against, the Borrower or any of its
Consolidated Subsidiaries before any court or arbitrator or any governmental
body, agency or official, in which there is a reasonable probability of an
adverse decision which would have a Material Adverse Effect or which in any
manner draws into question the validity or enforceability of the Credit
Agreement or the Notes.
5. Each of the Borrower's Consolidated Subsidiaries which is a
corporation is a corporation validly existing and in good standing under the
laws of its jurisdiction of incorporation, and has all corporate power and all
governmental licenses, authorizations, consents and approvals required to carry
on its business as now conducted, except those which the failure to have would
not have a Material Adverse Effect.
I am a member of the Bar of the State of New York and the
foregoing opinion is limited to the laws of the State of New York, the federal
laws of the United States of America and the General Corporation Law of the
State of Delaware. In giving the foregoing opinion, I express no opinion as to
the effect (if any) of any law of any jurisdiction (except the State of New
York) in which any Bank is located which limits the rate of interest that such
Bank may charge or collect.
This opinion is rendered solely to you in connection with the
above matter. This opinion may not be relied upon by you for any other purpose
or relied upon by any other person without my prior written consent.
Very truly yours,
2
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EXHIBIT F
OPINION OF
DAVIS POLK & WARDWELL, SPECIAL COUNSEL
FOR THE AGENT
To the Banks and the Agent
Referred to Below
c/o Morgan Guaranty Trust Company
of New York, as Agent
60 Wall Street
New York, New York 10260
Dear Sirs:
We have participated in the preparation of the $1,000,000,000
Credit Agreement (the "Credit Agreement") dated as of September 16, 1996 among
AT&T Capital Corporation, a Delaware corporation (the "Borrower"), the banks
listed on the signature pages thereof (the "Banks") and Morgan Guaranty Trust
Company of New York, as Agent (the "Agent"), and have acted as special counsel
for the Agent for the purpose of rendering this opinion pursuant to Section
3.01(c) of the Credit Agreement. Terms defined in the Credit Agreement are used
herein as therein defined.
We have examined originals or copies, certified or otherwise
identified to our satisfaction, of such documents, corporate records,
certificates of public officials and other instruments and have conducted such
other investigations of fact and law as we have deemed necessary or advisable
for purposes of this opinion.
Upon the basis of the foregoing, we are of the opinion that:
1. The execution, delivery and performance by the Borrower of the
Credit Agreement and the Notes are within the Borrower's corporate power and
have been duly authorized by all necessary corporate action.
2. The Credit Agreement constitutes a valid and binding agreement
of the Borrower and the Notes constitute valid and binding obligations of the
Borrower, in each case enforceable against the Borrower in accordance with their
respective terms, except as the same may be limited by bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium and similar laws affecting
creditors' rights generally and by general principles of equity (regardless of
whether considered in a proceeding in equity or at law).
We are members of the Bar of the State of New York and the
foregoing opinion is limited to the laws of the State of New York, the federal
laws of the United
3
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States of America and the General Corporation Law of the State of Delaware. In
giving the foregoing opinion, we express no opinion as to the effect (if any) of
any law of any jurisdiction (except the State of New York) in which any Bank is
located which limits the rate of interest that such Bank may charge or collect.
This opinion is rendered solely to you in connection with the
above matter. This opinion may not be relied upon by you for any other purpose
or relied upon by any other person without our prior written consent.
Very truly yours,
2
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EXHIBIT G
ASSIGNMENT AND ASSUMPTION AGREEMENT
AGREEMENT dated as of _________, ____ among [ASSIGNOR] (the
"Assignor"), [ASSIGNEE] (the "Assignee"), AT&T CAPITAL CORPORATION (the
"Borrower") and MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Agent (the
"Agent").
W I T N E S S E T H
WHEREAS, this Assignment and Assumption Agreement (the
"Agreement") relates to the $1,000,000,000 Credit Agreement dated as of
September 16, 1996 among the Borrower, the Assignor and the other Banks party
thereto, as Banks, and the Agent (as amended, the "Credit Agreement");
WHEREAS, as provided under the Credit Agreement, the Assignor has
a Commitment to make Committed Loans to the Borrower in an aggregate principal
amount at any time outstanding not to exceed $__________;
WHEREAS, [Committed] Loans made to the Borrower by the Assignor
under the Credit Agreement in the aggregate principal amount of $__________ are
outstanding at the date hereof; and
WHEREAS, the Assignor proposes to assign to the Assignee all of
the rights of the Assignor under the Credit Agreement in respect of a portion of
its Commitment thereunder in an amount equal to $__________ (the "Assigned
Amount"), together with a corresponding portion of its outstanding [Committed]
Loans, and the Assignee proposes to accept assignment of such rights and assume
the corresponding obligations from the Assignor on such terms;
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements contained herein, the parties hereto agree as follows:
SECTION 1. Definitions. All capitalized terms not otherwise
defined herein shall have the respective meanings set forth in the Credit
Agreement.
SECTION 2. Assignment. The Assignor hereby assigns and sells to
the Assignee all of the rights of the Assignor under the Credit Agreement to the
extent of the Assigned Amount, and the Assignee hereby accepts such assignment
from the Assignor and assumes all of the obligations of the Assignor under the
Credit Agreement to the extent of the Assigned Amount, including the purchase
from the Assignor of the corresponding portion of the principal amount of the
[Committed] Loans made by the Assignor outstanding at the date hereof. Upon the
execution and delivery hereof by the
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Assignor, the Assignee, the Borrower and the Agent and the payment of the
amounts specified in Section 3 hereof required to be paid on the date hereof (i)
the Assignee shall, as of the date hereof, succeed to the rights and be
obligated to perform the obligations of a Bank under the Credit Agreement with a
Commitment in an amount equal to the Assigned Amount, and (ii) the Commitment of
the Assignor shall, as of the date hereof, be reduced by a like amount and the
Assignor released from its obligations under the Credit Agreement to the extent
such obligations have been assumed by the Assignee. The assignment provided for
herein shall be without recourse to the Assignor.
SECTION 3. Payments. As consideration for the assignment and sale
contemplated in Section 2 hereof, the Assignee shall pay to the Assignor on the
date hereof in Federal funds the amount heretofore agreed between them. It is
understood that commitment and/or facility fees accrued to the date hereof in
respect of the Assigned Amount are for the account of the Assignor and such fees
accruing from and including the date hereof are for the account of the Assignee.
Each of the Assignor and the Assignee hereby agrees that if it receives any
amount under the Credit Agreement which is for the account of the other party
hereto, it shall receive the same for the account of such other party to the
extent of such other party's interest therein and shall promptly pay the same to
such other party.
SECTION 4. Consent of the Borrower and the Agent. This Agreement
is conditioned upon the consent of the Borrower and the Agent pursuant to
Section 9.06(c) of the Credit Agreement. The execution of this Agreement by the
Borrower and the Agent is evidence of this consent. Pursuant to Section 9.06(c)
the Borrower agrees to execute and deliver a Note payable to the order of the
Assignee to evidence the assignment and assumption provided for herein.
SECTION 5. Non-Reliance on Assignor. The Assignor makes no
representation or warranty in connection with, and shall have no responsibility
with respect to, the solvency, financial condition, or statements of the
Borrower, or the validity and enforceability of the obligations of the Borrower
in respect of the Credit Agreement or any Note. The Assignee acknowledges that
it has, independently and without reliance on the Assignor, and based on such
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement and will continue to be
responsible for making its own independent appraisal of the business, affairs
and financial condition of the Borrower.
SECTION 6. Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York.
SECTION 7. Counterparts. 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.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered by their duly authorized officers as of the date first
above written.
2
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[ASSIGNOR]
By_________________________
Title:
[ASSIGNEE]
By__________________________
Title:
AT&T CAPITAL CORPORATION
By__________________________
Title:
MORGAN GUARANTY TRUST
COMPANY OF NEW YORK, as Agent
By__________________________
Title:
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<PAGE>
1 EXHIBIT 11
FORM 10-Q for the Quarter
Ended September 30, 1996
File No. 1-11237
AT&T CAPITAL CORPORATION AND SUBSIDIARIES
COMPUTATION OF PRIMARY AND FULLY DILUTED
EARNINGS PER SHARE
(In Thousands, except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
For the Three Months For the Nine Months
Ended September 30, Ended September 30,
1996 1995 1996 1995
------- ------- ------- -------
<S> <C> <C> <C> <C>
Net income $40,467 $32,472 $115,290 $85,466
======= ======= ======= =======
Primary Earnings Per Share:
Weighted average number of
shares outstanding 47,018 46,940 46,993 46,942
Net effect of dilutive
stock options (based on the
treasury stock method using
average market price) 547 255 504 121
------- ------- ------- -------
Total 47,565 47,195 47,497 47,063
======= ======= ======= =======
Primary Earnings:
Per Share $ .85 $ .69 $ 2.43 $ 1.82
======= ======= ======= =======
Fully Diluted Earnings
Per Share:
Weighted average
number of shares
outstanding 47,018 46,940 46,993 46,942
Net effect of dilutive
stock options (based on
the treasury stock method
using the greater of the
average market price or
quarter end price) 555 515 568 523
------- ------- ------- -------
Total 47,573 47,455 47,561 47,465
======= ======= ======= =======
Fully diluted earnings
per share $ .85 $ .68 $ 2.42 $ 1.80
======= ======= ======= =======
</TABLE>
* This calculation is submitted in accordance with Regulation S-K item 601(b) 11
although not required by footnote 2 to paragraph 14 of APB Opinion No. 15
because it results in dilution of less than 3%.
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1 EXHIBIT 12
FORM 10-Q for the Quarter
Ended September 30, 1996
File No. 1-11237
AT&T CAPITAL CORPORATION AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO
FIXED CHARGES*
(Dollars in Thousands)
(Unaudited)
<TABLE>
<CAPTION>
For the
Nine Months Ended
September 30, 1996
----------------
<S> <C>
Earnings from continuing operations:
Income before income taxes $182,496
Add: Fixed charges included in income before taxes 355,701
--------
Total earnings from continuing operations, as adjusted 538,197
--------
Total fixed charges* $355,701
========
Ratio of earnings to fixed charges 1.51
========
</TABLE>
* Fixed charges include interest on indebtedness and the portion of rentals
representative of the interest factor.
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<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 18,574
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 235,205
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 716,763
<TOTAL-ASSETS> 10,251,600
<CURRENT-LIABILITIES> 0
<BONDS> 4,896,467
<COMMON> 471
0
0
<OTHER-SE> 1,217,331
<TOTAL-LIABILITY-AND-EQUITY> 10,251,600
<SALES> 72,608
<TOTAL-REVENUES> 1,370,494
<CGS> 61,677
<TOTAL-COSTS> 391,013
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 71,454
<INTEREST-EXPENSE> 350,359
<INCOME-PRETAX> 182,496
<INCOME-TAX> 67,206
<INCOME-CONTINUING> 115,290
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 115,290
<EPS-PRIMARY> 2.43
<EPS-DILUTED> 2.42
</TABLE>
