Page 1 of 26
Exhibit Index - Page 24
FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999
[ ] 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 1-134
CURTISS-WRIGHT CORPORATION
(Exact name of Registrant as specified in its charter)
Delaware 13-0612970
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1200 Wall Street West, Lyndhurst, NJ 07071
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (201) 896-8400
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
------------------------ ------------------------
Common Stock, par value $1 per share New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
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, and (2) has been subject to such filing requirements
for the past 90 days. Yes [X] No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
The aggregate market value of the voting stock held by non-affiliates* of the
Registrant is $ 189,454,831.00 (based on the closing price of the Registrant's
Common Stock on the New York Stock Exchange on March 2, 2000 of $39.125).
Indicate the number of shares outstanding of each of the Registrant's classes of
Common Stock, as of the latest practicable date.
Number of Shares
Class Outstanding at March 2, 2000
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Common Stock, par value $1 per share 10,046,869
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Annual Report of the Registrant to stockholders for the year
ended December 31, 1999 are incorporated by reference into Parts I, II and IV.
Portions of the Proxy Statement of the Registrant with respect to the 2000
Annual Meeting of Stockholders are incorporated by reference into Part III.
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* Shares held by Unitrin, Inc. and Argonaut Group, Inc. have been excluded from
the amount shown solely because of the definition of the term "affiliate" in the
regulations promulgated pursuant to the Securities Exchange Act of 1934. Also,
for purposes of this computation, all directors and executive officers of
Registrant have been deemed to be affiliates, but the Registrant disclaims that
any of such directors or officers is an affiliate. See material referred to
under Item 12, below.
<PAGE>
FORWARD-LOOKING INFORMATION
Except for historical information, this Annual Report on Form 10-K may be deemed
to contain "forward looking" information. Examples of forward looking
information include, but are not limited to, (a) projections of or statements
regarding return on investment, future earnings, interest income, other income,
earnings or loss per share, investment mix and quality, growth prospects,
capital structure and other financial terms, (b) statements of plans and
objectives of management, (c) statements of future economic performance, and (d)
statements of assumptions, such as economic conditions underlying other
statements. Such forward looking information can be identified by the use of
forward looking terminology such as "believes," "expects," "may," "will,"
"should," "anticipates," or the negative of any of the foregoing or other
variations thereon or comparable terminology, or by discussion of strategy. No
assurance can be given that the future results described by the forward looking
information will be achieved. Such statements are subject to risks,
uncertainties, and other factors which could cause actual results to differ
materially from future results expressed or implied by such forward looking
information. Such statements in this Report include, without limitation, those
contained in (a) Item 1. Business, (b) Item 7. Management's Discussion and
Analysis of Financial Condition and Results of Operations and (c) the Notes to
the Consolidated Financial Statements including, without limitation, the
Environmental Matters Note. Important factors that could cause the actual
results to differ materially from those in these forward-looking statements
include, among other items, (i) a reduction in anticipated orders; (ii) an
economic downturn; (iii) unanticipated environmental remediation expenses or
claims; (iv) changes in the need for additional machinery and equipment and/or
in the cost for the expansion of the Corporation's operations; (v) changes in
the competitive marketplace and/or customer requirements; (vi) an inability to
perform customer contracts at anticipated cost levels and (vii) other factors
that generally affect the business of companies operating in the Corporation's
Segments.
<PAGE>
Introduction
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Pursuant to the Securities Exchange Act of 1934, the Registrant,
Curtiss-Wright Corporation hereby files its Form 10-K Annual Report for the
fiscal year ended December 31, 1999. References in the text to the
"Corporation," "Company," "Curtiss-Wright" or the "Registrant" include
Curtiss-Wright Corporation and its consolidated subsidiaries unless the context
indicates otherwise. References to the Company's "Annual Report" are to its 1999
Annual Report to Stockholders, which is attached hereto as Exhibit 13.
PART I
Item 1. Business.
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Curtiss-Wright Corporation was incorporated in 1929 under the laws of the
State of Delaware. During 1998, the Company adopted the Statement of Financial
Accounting Standards No. 131, "Disclosures about Segments of an Enterprise and
Related Information." (SFAS No. 131). Consistent with the requirements of SFAS
No. 131, the Company now reports its operations in three Segments: Motion
Control (formerly known as "Actuation and Control Products & Services Segment"),
Metal Treatment (formerly known as "Precision Manufacturing Products & Services
Segment"), and Flow Control (formerly known as "Flow Control Products &
Services").
Motion Control
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The Corporation designs, develops and manufactures flight control actuation
systems and components for the aerospace industry. Manufactured products offered
consist of electro-mechanical and hydro-mechanical actuation components and
systems, which are designed to position aircraft control surfaces, or to operate
canopies, cargo doors, weapons bay doors or other devices used on aircraft. They
include actuators and control systems for the Boeing 737, 747, 757, 767 and 777
jet airliners, the Lockheed Martin F-16 Falcon fighter, the Boeing F/A-18
fighter, the F-22 Raptor fighter jointly developed by Lockheed Martin and
Boeing, the Bell Boeing V-22 Osprey, and the Sikorsky Black Hawk and Seahawk
helicopters. The Corporation also is developing wing flap actuators for business
jet and small cargo aircraft. During 1999, the Corporation consolidated certain
operations, relocating substantially all of its manufacturing from the
Corporation's Fairfield, New Jersey facility into its Shelby, North Carolina
facility. Accordingly, these operations are mainly conducted from the
Corporation's facility in Shelby, North Carolina.
With the acquisition on December 31, 1998 of SIG Antriebstechnik AG*, the
Company also offers electro-mechanical and electro-hydraulic actuation
components and systems including electronic controls to the military tracked and
wheeled vehicle, high speed railroad train, and commercial marine propulsion
markets. These products which are designed and manufactured at the Corporation's
facility in Neuhausen am Rheinfall, Switzerland, primarily consist of drives and
suspension systems for armored military vehicles sold to defense equipment
manufacturers, and tilting systems for high speed railway car applications, in
each case to overseas markets.
The actuation and control products and services of this Segment are
marketed directly to customers by employees of the Corporation. These products
are sold in competition with a number of other system suppliers, most of which
have broader product lines and financial, technical, and human resources greater
than those of the Company. Competition is primarily on the basis of engineering
capability, quality and price and is directed to the placement of systems to
perform control and actuation functions on the limited number of new production
programs.
As a related service within this Segment, Curtiss-Wright also provides
commercial airlines, the military and general aviation customers with component
overhaul and repair services. The Corporation overhauls a variety of hydraulic,
pneumatic, mechanical, electro-mechanical, electrical and electronic components
found on Boeing, Lockheed Martin, Airbus and other aircraft. The Corporation
provides these services from facilities in Gastonia, North Carolina, Miami,
Florida, Karup, Denmark, and a marketing and distribution facility in Singapore.
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* Merged into Curtiss-Wright Antriebstechnik GmbH (Curtiss-Wright Drive
Technology) effective March 19, 1999.
<PAGE>
This Segment's overhaul services are sold in competition with a number of
other overhaul and repair providers. Competition in the overhaul business is
based upon quality, delivery and price. Marketing is accomplished through sales
representatives and by direct sales.
The Company sells a commercial rescue tool using its "Power Hinge"(TM)
aerospace technology under the trademark Power Hawk(R). Various accessories and
related equipment are also offered. The primary use for this tool is the
extrication of automobile accident victims.
Sales by this Segment to the Boeing Company in 1999, 1998, and 1997 were
$42.9, $39.3, and $32.0 million, respectively. The loss of the Boeing Company as
a customer would have a material adverse affect on this Segment. U.S. Government
direct and end use sales of this Segment in 1999, 1998 and 1997 were $17.4,
$19.7, and $20.1 million, respectively. The loss of this business would have a
material adverse effect on this Segment.
The backlog of this Segment as of January 31, 2000 was $164.4 million as
compared with $143.0 million as of January 31, 1999. Of the January 31, 2000
amount, approximately 52% is expected to be shipped during 2000. None of the
business of this Segment is seasonal. Raw materials are generally available in
adequate quantities from a number of suppliers.
Metal Treatment
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Curtiss-Wright provides approximately 50 metal-treating services in this
Segment, with its principal services being "shot peening" and "heat treating."
"Shot peening" is the process by which durability of metal parts are improved by
the bombardment of the part's surface with spherical media such as steel shot,
ceramic or glass beads to compress the outer layer of the metal. "Heat treating"
is a metallurgical process of subjecting metal objects to heat and/or cold or
otherwise subsequently treating the material to change the physical and/or
chemical characteristics or properties of the material. An overview of the metal
treating services is provided on page 7 in the Company's Annual Report, such
description being incorporated by reference in this Form 10-K. These processes
are used principally to improve the service life, strength and durability of
metal parts. They are also used to form curvatures in metal panels, which are
assembled as wingskins of commercial and military planes, and to manufacture
valve reeds used in compressors. The Corporation provides these services for a
broad spectrum of customers in various industries, including aerospace,
automotive, construction equipment, oil, petrochemical, metal working, and other
industries. Operations are conducted from 37 facilities located in the United
States, Canada, England, France, Germany, and Belgium.
<PAGE>
The services and products of this Segment are marketed directly by
employees of the Company. Although numerous companies compete with the Company
in this field, and many customers for the services provided have the resources
to perform such services themselves, Curtiss-Wright believes that its greater
technical know-how and superior quality provide it with a competitive advantage.
The Corporation also competes on the basis of quality, service and price.
The backlog of this Segment as of January 31, 2000 was $1.2 million, as
compared with $1.4 million as of January 31, 1999. All of such backlog is
expected to be shipped in the first quarter of 2000. The business of this
Segment is not seasonal. Raw materials are generally available in adequate
quantities from a number of suppliers, and the Segment is not materially
dependent upon any single source of supply. No single customer accounted for 10%
or more of total sales in 1999, 1998 and 1997 and the active customer base
numbers in excess of 5,000.
Flow Control
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At its facility located in East Farmingdale, New York, the Corporation
designs, manufactures, refurbishes and tests highly engineered valves of various
types and sizes, such as motor operated and solenoid operated globe, gate,
control and safety relief valves. These valves are used to control the flow of
liquids and gases and to provide safety relief in high-pressure applications. It
also supplies actuators and controllers for its own valves as well as for valves
manufactured by others. The primary customers for these valves are the U.S.
Navy, which uses them in nuclear propulsion systems, and owners and operators of
commercial power utilities who use them in new and existing nuclear and fossil
fuel power plants. All of the new nuclear plants are outside the U.S. and recent
sales for such plants have been to Korea and Taiwan. Sales are made by
responding directly to requests for proposals from customers. The production of
valves for the U.S. Navy and for new power plants is characterized by long lead
times from order placement to delivery.
Through its Enertech operation, the Company also designs, manufactures and
distributes additional flow control products for sale into global commercial
nuclear power markets, and it also distributes products made by others from its
facility in Brea, California. Enertech's product lines include: snubbers,
advanced valves, valve actuators, test and diagnostic equipment, as well as
related diagnostic services. In addition, the Company now provides training,
on-site services, staff augmentation and engineering programs relating to
nuclear power plants. The Company also provides hydraulic power units and
components primarily for the automotive and entertainment industries.
In August 1999, the Company further expanded its product lines and
distribution base through the acquisitions of Farris Engineering ("Farris") and
Sprague Products ("Sprague"), two former business units of Teledyne Fluid
Systems, Inc. As a result of acquiring Farris, one of the world's leading
manufacturers of spring-loaded and pilot operated pressure-relief valves, the
Company expanded its customer base into the processing industries. Farris'
primary customers are refineries, petrochemical/chemical plants and
pharmaceutical manufacturing facilities. Farris products are manufactured in
Brecksville, Ohio and Brantford, Ontario. A service and distribution center is
located in Edmonton, Alberta. Sprague, also located in Brecksville, Ohio,
manufactures and provides specialty hydraulic and pneumatic valves, air-driven
pumps and gas boosters under the "Sprague" and "PowerStar" trade names. Sprague
products are used generally in various industrial applications as well as
directional control valves for truck transmissions and car transport carriers.
<PAGE>
Strong competition in flow control products and services is encountered
primarily from a large number of domestic and foreign sources in the commercial
market. Sales to commercial users are accomplished through independent marketing
representatives and by direct sales. These products and services are sold to
customers who are sophisticated and demanding. Performance, quality, technology,
delivery and price are the principal areas of competition.
The backlog of this Segment as of January 31, 2000 was $67.3 million as
compared with $55.2 million as of January 31, 1999. Of the January 31, 2000
amount, approximately 47% is expected to be shipped during 2000. Approximately
25% of this Segment's backlog is composed of orders with the U.S. Navy through
its prime contractor, the Plant Apparatus Division of Bechtel National, Inc. a
unit of Bechtel Group, Inc. The loss of this customer would have a significant
adverse impact on the business of this Segment.
None of the business of this Segment is seasonal. Raw materials are
generally available in adequate quantities from a number of suppliers.
Other Information
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Government Sales
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In 1999, 1998 and 1997, direct sales to the United States Government and
sales for United States Government end use aggregated approximately 17%, 17% and
20% respectively, of total sales for all Segments. United States Government
sales, both direct and subcontract, are generally made under one of the standard
types of government contracts, including fixed price and fixed
price-redeterminable.
In accordance with normal practice in the case of United States Government
business, contracts and orders are subject to partial or complete termination at
any time, at the option of the customer. In the event of a termination for
convenience by the Government, there generally are provisions for recovery by
the Corporation of its allowable incurred costs and a proportionate share of the
profit or fee on the work done, consistent with regulations of the United States
Government. Subcontracts for Navy nuclear valves usually provide that
Curtiss-Wright must absorb most of any overrun of "target" costs. In the event
that there is a cost underrun, however, the customer is to recoup a portion of
the underrun based upon a formula in which the customer's portion increases as
the underrun exceeds certain established levels.
<PAGE>
It is the policy of the Corporation to seek customary progress payments on
certain of its contracts. Where such payments are obtained by the Corporation
under United States Government prime contracts or subcontracts, they are secured
by a lien in favor of the Government on the materials and work in process
allocable or chargeable to the respective contracts. (See Notes 1.C, 4 and 5 to
the Consolidated Financial Statements, on pages 23, 26 and 27 of the Annual
Report, which notes are incorporated by reference in this Form 10-K Annual
Report.) In the case of most valve products for United States Government end
use, the subcontracts typically provide for the retention by the customer of
stipulated percentages of the contract price, pending completion of contract
closeout conditions.
Research and Development
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Research and development expenditures sponsored by the Corporation amounted
to $2,801,000 in 1999 as compared with $1,346,000 in 1998 and $1,877,000 in
1997. The Corporation owns and is licensed under a number of United States and
foreign patents and patent applications, which have been obtained or filed over
a period of years. Curtiss-Wright does not consider that the successful conduct
of its business is materially dependent upon the protection of any one or more
of these patents, patent applications or patent license agreements under which
it now operates.
Environmental Protection
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The effect of compliance upon the Corporation with present legal
requirements concerning protection of the environment is described in the
material in Notes 1.H and 11 to the Consolidated Financial Statements which
appears on pages 24 and 31 of the Registrant's Annual Report and is incorporated
by reference in this Form 10-K Annual Report.
Employees
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At the end of 1999, the Corporation had 2,267 employees, 172 of which were
represented by labor unions and are covered by collective bargaining agreements.
Certain Financial Information
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The industry segment information is described in the material in Note 14 to
the Consolidated Financial Statements, which appears on pages 33 to 35 of the
Registrant's Annual Report, and is incorporated by reference in this Form 10-K
Annual Report. It should be noted that in recent years a significant percentage
of the pre-tax earnings from operations of the Corporation have been derived
from foreign operations. The Company does not regard the risks attendant to
these foreign operations to be materially greater than those applicable to its
business in the U.S.
<PAGE>
Item 2. Properties.
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The principal physical properties of the Corporation and its subsidiaries
are described below:
Owned/
Location Description(1) Leased Principal Use
East Farmingdale, 215,000 sq. ft. Owned(2) Flow Control
New York on 11 acres
Chester, Wales 175,666 sq. ft. Leased Metal Treatment
United Kingdom
Shelby, 137,440 sq. ft. Owned Motion Control
North Carolina on 29 acres
Brampton, 87,000 sq. ft. on Owned Metal Treatment
Ontario, Canada 8 acres
Deeside, Wales 81,000 sq. ft. Owned Metal Treatment
United Kingdom on 2.2 acres
Columbus, Ohio 75,000 sq. ft. Owned Metal Treatment
on 9 acres
Brecksville, Ohio 68,000 sq. ft Owned Flow Control
on 5.56 acres
Miami, Florida 65,000 sq. ft. Leased Motion Control
on 2.6 acres
Fort Wayne, 62,589 sq. ft. Owned Metal Treatment
Indiana on 3.2 acres
Gastonia, 52,860 sq. ft. Owned Motion Control
North Carolina on 7.5 acres
Pine Brook, 45,000 sq. ft. within Leased Motion Control
New Jersey a business complex
Neuhausen am, 40,100 sq. ft. within Leased Motion Control
Rheinfall a business complex
Switzerland
York, 32,396 sq. ft. Owned Metal Treatment
Pennsylvania on 3.6 acres
Brea, California 30,550 sq. ft. Leased Flow Control
on 1.76 acres
Brantford, 21,000 sq. ft Owned Flow Control
Ontario, Canada on 8.13 acres
<PAGE>
(1) Sizes are approximate. Unless otherwise indicated, all properties are owned
in fee, are not subject to any major encumbrance and are occupied primarily by
factory and/or warehouse buildings.
(2) The Suffolk County Industrial Development Agency in connection with the
issuance of an industrial revenue bond holds title to approximately six acres of
land and the building located thereon.
In addition to the properties listed above, the Corporation leases an
aggregate of approximately 360,000 square feet of space at twenty-two different
locations in the United States and England and owns buildings encompassing about
371,704 square feet in seventeen different locations in the United States,
France, Germany, Belgium and England. None of these properties individually is
material to the Company's business. It also leases approximately 8,000 square
feet of space in Karup, Denmark, for Motion Control; 2,000 square feet of space
in Suwanee, Georgia, for Flow Control; 1,150 square feet of space in Singapore
for Motion Control; and 600 square feet of warehouse and office space in
Edmonton, Alberta, Canada, for Flow Control.
The Corporation also owns a multi-tenant industrial rental facility located
in Wood-Ridge, New Jersey encompassing 2,322,000 square feet on 144 acres. The
former manufacturing facility has approximately 2,264,000 square feet leased to
other parties with the remaining 58,000 square feet vacant and available for
lease. Additionally, Curtiss-Wright leases approximately 14,000 square feet of
office space in Lyndhurst, New Jersey, for its corporate office.
The buildings on the properties referred to in this Item are well
maintained, in good condition, and are suitable and adequate for the uses
presently being made of them.
The following tracts of property, owned by the Registrant, are not
attributable to a particular Segment and are being held for sale: Hardwick
Township, New Jersey (the "Hardwick Property"), 21 acres; Fairfield, New Jersey,
39.8 acres (the "Fairfield Property"); and Perico Island, Florida, 112 acres,
the bulk of which is below water (the "Perico Island Property"). In June 1999,
the Company entered into a contract to sell the Perico Island Property. The
contract is contingent on the purchaser obtaining necessary governmental
approvals. The purchaser has until May 18, 2000 to obtain the necessary
approvals. The Company is also currently engaged in negotiations to sell the
Hardwick Property and the Fairfield Property. The Corporation also owns
approximately 7.4 acres of land in Lyndhurst, New Jersey, which is leased, on a
long-term basis, to the owner of the commercial building located on the land.
<PAGE>
Item 3. Legal Proceedings.
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In the ordinary course of business, the Corporation and its subsidiaries are
subject to various pending claims, lawsuits and contingent liabilities. The
Corporation does not believe that disposition of any of these matters will have
a material adverse effect on the Corporation's consolidated financial position
or results of operations.
In December 1999, the Corporation entered into a settlement agreement with
the Borough of Wood-Ridge (the "Borough"), resolving a long standing tax appeal
challenging the accuracy of the Borough's property value assessments for tax
years 1994 through 1999 on the Corporation's industrial rental facility referred
to above. Under the terms of the settlement, the assessments for the years in
question were reduced and the Corporation received a refund for taxes paid in
excess of those reduced assessments. A significant portion of the tax refund was
passed through to the tenants of the complex. See the information contained in
the Registrant's Annual Report on page 17 under the caption "Other Revenues" in
the Management's Discussion and Analysis of Financial Condition and Results of
Operations.
Item 4. Submission of Matters to a Vote of Security Holders.
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Not applicable.
<PAGE>
PART II
Item 5. Market for Registrant's Common Stock
And Related Stockholder Matters.
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See the information contained in the Registrant's Annual Report on the
inside back cover under the captions "Common Stock Price Range," "Dividends,"
and "Stock Exchange Listing" which information is incorporated herein by
reference. The approximate number of record holders of the Common Stock, $1.00
par value, of Registrant was 3,822 as of March 1, 2000.
Item 6. Selected Financial Data.
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See the information contained in the Registrant's Annual Report on page 14
under the caption "Consolidated Selected Financial Data," which information is
incorporated herein by reference.
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
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See the information contained in the Registrant's Annual Report at pages 15
through 17, under the caption "Management's Discussion and Analysis of Financial
Condition and Results of Operations," which information is incorporated herein
by reference.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
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The Corporation is exposed to certain market risks from changes in interest
rates and foreign currency exchange rates as a result of its global operating
and financing activities. However, the Corporation seeks to minimize the risks
from these interest rate and foreign currency exchange rate fluctuations through
its normal operating and financing activities and, when deemed appropriate,
through the use of derivative financial instruments. The Corporation did not use
such instruments for trading or other speculative purposes and did not use
leveraged derivative financial instruments during the year ended December 31,
1999. Information regarding the Corporation's accounting policy on financial
instruments is contained in Note 1.G to the Consolidated Financial Statements on
page 24 of the Annual Report, which is incorporated by reference in this Form
10-K Annual Report.
<PAGE>
The Corporation's market risk for a change in interest rates relates
primarily to the debt obligations. Approximately 49% of the Corporation's debt
at December 31, 1999 and 46% of the December 31, 1998 debt is comprised of
Industrial Revenue Bond financing. As described in Note 8 to the Consolidated
Financial Statements on page 29 of the Annual Report, which is incorporated by
reference in this Form 10-K Annual Report, the Corporation borrowed variable
rate debt under its short-term credit agreement and revolving credit agreement
aggregating 31,000,000 Swiss Francs arising out of the December 31, 1998
purchase of SIG Antriebstechnik AG to mitigate its currency exposure.
Financial instruments expose the Corporation to counter-party credit risk
for nonperformance and to market risk for changes in interest and currency
rates. The Corporation manages exposure to counter-party credit risk through
specific minimum credit standards, diversification of counter-parties and
procedures to monitor concentrations of credit risk. The Corporation monitors
the impact of market risk on the fair value and cash flows of its investments by
considering reasonably possible changes in interest rates and by limiting the
amount of potential interest and currency rate exposures to amounts that are not
material to the Corporation's consolidated results of operations and cash flows
Item 8. Financial Statements and Supplementary Data.
- ------------------------------------------------------------------
The following Consolidated Financial Statements of the Registrant and its
subsidiaries, and supplementary financial information, are included in the
Registrant's Annual Report, which information is incorporated herein by
reference.
Consolidated Statements of Earnings for the years ended December 31, 1999,
1998 and 1997, page 19.
Consolidated Balance Sheets at December 31, 1999 and 1998, page 20.
Consolidated Statements of Cash Flows for the years ended December 31,
1999, 1998 and 1997, page 21.
Consolidated Statements of Stockholders' Equity for the years ended
December 31, 1999, 1998 and 1997, page 22.
Notes to Consolidated Financial Statements, pages 23 through 35, inclusive,
and Quarterly Results of Operations on page 14.
Report of Independent Accountants for the three years ended December 31,
1999, 1998 and 1997, page 18.
<PAGE>
Item 9. Changes in and Disagreements with Accountants
On Accounting and Financial Disclosure.
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Not applicable.
PART III
Item 10. Directors and Executive Officers
Of the Registrant.
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Information required in connection with directors and executive officers is
set forth below, as well as under the caption "Election of Directors," in the
Registrant's Proxy Statement with respect to the Corporation's 2000 Annual
Meeting of Stockholders (the "Proxy Statement"), which information is
incorporated herein by reference.
Executive Officers of the Registrant
-------------------------------------
The following table sets forth the names, ages, and principal occupations
and employment of all executive officers of Registrant. The period of service is
for at least the past five years and such occupations and employment are with
Curtiss-Wright Corporation, except as otherwise indicated:
Principal Occupation
Name and Employment Age
David Lasky Chairman (since May 1995); 67
formerly President from 1993
to April 1999(1)
Martin R. Benante President and Chief Operating 47
Officer since April 1999; formerly
Vice President of the Corporation
from April 1996 to April 1999;
President of Curtiss-Wright Flow
Control Corporation, a wholly-owned
Subsidiary from March 1995 to April 1999
Gerald Nachman Executive Vice President; 70
President of Metal Improvement
Company, Inc., a wholly owned subsidiary,
since May 1970
<PAGE>
Principal Occupation
Name and Employment Age
George J. Yohrling Vice President of Curtiss-Wright Corporation; 59
President, Curtiss-Wright Flight Systems,
Inc., a wholly-owned subsidiary, since
April 1998; Executive Vice President for
Aerospace Operations of Curtiss-Wright Flight
Systems, Inc. from April 1997 to April 1998,
Senior Vice President from July 1996 to April
1997 of Curtiss-Wright Flight Systems, Inc.;
previously Vice President and General Manager
of Curtiss-Wright Flight Systems/Shelby, Inc.,
then a wholly-owned subsidiary.
Robert A. Bosi Vice President-Finance since January 1993 44
Brian D. O'Neill Secretary, General Counsel since April 1999; 50
formerly Assistant General Counsel from
December 1997 until April 1999; formerly
Staff Attorney and Associate General Counsel
from December 1980 to December 1997
Gary J. Benschip Treasurer since February 1993 52
Kenneth P. Slezak (2) Controller since 1991 48
The executive officers of the Registrant are elected annually by the Board
of Directors at its organization meeting in April and hold office until the
organization meeting in the next subsequent year and until their respective
successors are chosen and qualified.
There are no family relationships among these officers, or between any of
them and any director of Curtiss-Wright Corporation, nor any arrangements or
understandings between any officer and any other person pursuant to which the
officer was elected.
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(1) On February 3, 2000, Mr. Lasky announced his retirement following the
Corporation's Annual Meeting of Stockholders to be held on April 2000.
(2) Mr. Slezak resigned from his position with the Corporation effective
February 22, 2000.
<PAGE>
Section 16(a) Beneficial Ownership Reporting Compliance
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Information required by Item 405 of Regulation S-K is set forth in the Proxy
Statement under the heading "Section 16(a) Beneficial Ownership Reporting
Compliance," which information is incorporated herein by reference.
Item 11. Executive Compensation.
- ------------------------------------------
Information required by this Item is included under the captions "Executive
Compensation" and in the "Summary Compensation Table" in the Registrant's Proxy
Statement, which information is incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial
Owners and Management.
- -------------------------------------------------------------
See the following portions of the Registrant's Proxy Statement, all of
which information is incorporated herein by reference: (i) the material under
the caption "Security Ownership and Transactions with Certain Beneficial Owners"
and (ii) the material included under the caption "Election of Directors."
Item 13. Certain Relationships and Related Transactions.
- ---------------------------------------------------------------------
Information required by this Item is included under the captions "Executive
Compensation" and "Security Ownership and Transactions with Certain Beneficial
Owners" in the Registrant's Proxy Statement, which information is incorporated
herein by reference.
<PAGE>
PART IV
Item 14. Exhibits, Financial Statement
Schedules and Reports on Form 8-K.
- ----------------------------------------------------
(a)(1) Financial Statements:
The following Consolidated Financial Statements of Registrant and
supplementary financial information, included in Registrant's Annual
Report, are incorporated herein by reference in Item 8:
(i) Consolidated Statements of Earnings for the years ended
December 31, 1999, 1998 and 1997
(ii) Consolidated Balance Sheets at December 31, 1999 and 1998
(iii) Consolidated Statements of Cash Flows for the years ended
December 31, 1999, 1998 and 1997
(iv) Consolidated Statements of Stockholders' Equity for
the years ended December 31, 1999, 1998 and 1997
(v) Notes to Consolidated Financial Statements
(vi) Report of Independent Accountants for the years ended December
31, 1999, 1998 and 1997
(a)(2) Financial Statement Schedules:
The items listed below are presented herein on pages 22 and 23 of
this Form 10-K.
Report of Independent Accountants on Financial Statement Schedule
Schedule II - Valuation and Qualifying Accounts
Schedules other than those listed above have been omitted since they are not
required, are not applicable, or because the required information is included in
the financial statements or notes thereto.
<PAGE>
(a)(3) Exhibits:
(2) Plan of acquisition, reorganization, arrangement,
liquidation, or succession
(2)(i) Asset Purchase and Sale Agreement dated July 23, 1999
between Teledyne Industries, Inc., Teledyne Industries Canada
Limited and Curtiss-Wright Corporation (incorporated by
reference to Exhibit 2.1 to Registrant's Current Report on
Form 8-K, filed September 15, 1999).
(3) Articles of Incorporation and By-laws of the Registrant
(3)(i) Restated Certificate of Incorporation as amended May 8, 1987
(incorporated by reference to Exhibit 3(a) to Registrant's
Form 10-Q Report for the quarter ended June 30, 1987).
Restated Certificate of Incorporation as amended through April
18, 1997 (incorporated by reference to Exhibit 3(i) to
Registrant's Annual Report on Form 10-K for the year ended
December 31, 1997).
(3)(ii) By-laws as amended through April 30, 1999, filed herewith.
(4) Instruments defining the rights of security holders,
including indentures
(4)(i) Agreement to furnish to the Commission upon request, a copy of
any long term debt instrument where the amount of the
securities authorized thereunder does not exceed 10% of the
total assets of the Registrant and its subsidiaries on a
consolidated basis (incorporated by reference to Exhibit 4 to
Registrant's Annual Report on Form 10-K for the year ended
December 31, 1985).
(4)(ii) Revolving Credit Agreement dated December 20, 1999
between Registrant, the Lenders parties thereto from time
to time, the Issuing Banks referred to therein and Mellon
Bank, N.A., filed herewith.
(4)(iii) Short-Term Credit Agreement dated as of December 20, 1999
between Registrant, the Lender Parties and Mellon Bank,
N.A., as Agent, filed herewith.
<PAGE>
(10) Material Contracts:
(i) Modified Incentive Compensation Plan, as amended
November 9, 1989 (incorporated by reference to
Exhibit 10(a) to Registrant's Form 10-Q Report for
the quarter ended September 30, 1989).*
(ii) Curtiss-Wright Corporation 1995 Long-Term Incentive
Plan (incorporated by reference to Exhibit 4.1 to
Registrant's Form S-8 Registration Statement No.
95602114 filed December 15, 1995).*
(iii) Standard Severance Agreement with Officers of
Curtiss-Wright (incorporated by reference to Exhibit
10(iv) to Registrant's Annual Report on Form 10-K for
the year ended December 31, 1991).*
(iv) Retirement Benefits Restoration Plan as amended April
15, 1997 (incorporated by reference to Exhibit 10 to
Registrant's Form 10-Q Report for the quarter ended
June 30, 1997).*
(v) Curtiss-Wright Corporation Retirement Plan as amended
through August 1, 1997 (incorporated by reference to
Registrant's Annual Report on Form 10-K for the year
ended December 31, 1997); Fourth Amendment to the
Curtiss-Wright Corporation Retirement Plan dated
October 20, 1997 (incorporated by reference to
Registrant's Annual Report on Form 10-K for the year
ended December 31, 1997); Fifth Amendment to the
Curtiss-Wright Corporation Retirement Plan dated
January 1, 1998 (incorporated by reference to
Registrant's Annual Report on Form 10-K for the year
ended December 31, 1997); Amendments to
Curtiss-Wright Retirement Plan dated April 1, 1998,
April 20, 1998, April 30, 1998 and June 30, 1998
(incorporated by reference to Exhibit a(ii) to
Registrant's Quarterly Report for the quarter ended
June 30, 1998).*
(vi) Curtiss-Wright Corporation Savings and Investment
Plan dated March 1, 1995 (incorporated by reference
to Exhibit (10)(vii) to Registrant's Annual Report on
Form 10-K for the year ended December 31, 1994).*
<PAGE>
(vii) Curtiss-Wright Corporation 1996 Stock Plan for
Non-Employee Directors (incorporated by reference to
Exhibit 4.1 to Registrant's Form S-8 Registration
Statement No. 96583181, filed June 19, 1996).*
(viii)Curtiss-Wright Corporation Executive Deferred
Compensation Plan effective November 18, 1997
(incorporated by reference to Exhibit (10)(viii) to
Registrant's Annual Report on Form 10-K for the year
ended December 31, 1997).*
(ix) Standard Severance Protection Agreement dated June
19, 1998 between the Registrant and Officers of the
Registrant (incorporated by reference to Exhibit A(i)
to Registrant's Quarterly Report on Form 10-Q for the
period ended June 30, 1998).*
(x) Trust Agreement dated January 20, 1998 by and between
Curtiss-Wright Corporation and PNC Bank, National
Association (incorporated by reference to Exhibit
10(a) to Registrant's Quarterly Report on Form 10-Q
for the quarter ended March 31, 1998).*
(13) Annual Report to Stockholders for the year ended December 31,
1999
(21) Subsidiaries of the Registrant
(23) Consents of Experts and Counsel - see Consent of Independent
Accountants
(27) Financial Data Schedule
- -----------
*Management contract or compensatory plan or arrangement
(b) Reports on Form 8-K
No report on Form 8-K was filed during the three months ended
December 31, 1999.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
CURTISS-WRIGHT CORPORATION
(Registrant)
By: /s/ David Lasky
---------------------
David Lasky
Chairman and CEO
Date: March 20, 2000
<PAGE>
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
Date: March 20, 2000 By: /s/ Robert A. Bosi
---------------------
Robert A. Bosi
Vice President - Finance
Date: March 20, 2000 By: /s/ Gary R. Struening
------------------------
Gary R. Struening
Assistant Controller
Date: March 20, 2000 By: /s/ Martin R. Benante
-------------------------
Martin R. Benante
Director
Date: March 20, 2000 By: /s/ Thomas R. Berner
------------------------
Thomas R. Berner
Director
Date: March 20, 2000 By: /s/ James B.Busey
------------------------
James B. Busey IV
Director
Date: March 20, 2000 By: /s/ David Lasky
------------------------
David Lasky
Director
Date: March 20, 2000 By: /s/ William B. Mitchell
-------------------------
William B. Mitchell
Director
Date: March 20, 2000 By: /s/ John R. Myers
-------------------------
John R. Myers
Director
Date: March 20, 2000 By: /s/ William W. Sihler
-------------------------
William W. Sihler
Director
Date: March 20, 1999 By: /s/ J. McLain Stewart
--------------------------
J. McLain Stewart
Director
<PAGE>
PRICEWATERHOUSECOOPERS LLP [LOGO]
PricewaterhouseCoopers LLP
400 Campus Drive
P.O. Box 988
Florham Park, NJ 07932
Telephone (973) 236 4000
Facsimile (973) 236 5000
REPORT OF INDEPENDENT ACCOUNTANTS ON
FINANCIAL STATEMENT SCHEDULE
To the Board of Directors
of Curtiss-Wright Corporation:
Our audits of the consolidated financial statements referred to in our report
dated January 31, 2000 in the 1999 Annual Report to Shareholders of
Curtiss-Wright Corporation (which report and consolidated financial statements
are incorporated by reference in this Annual Report on Form 10-K) also included
an audit of the financial statement schedule listed in Item 14(a)(2) of this
Form 10-K. In our opinion, this financial statement schedule presents fairly, in
all material respects, the information set forth therein when read in
conjunction with the related consolidated financial statements.
/s/PricewaterhouseCoopers LLP
PRICEWATERHOUSECOOPERS LLP
Florham Park, New Jersey
January 31, 2000
<PAGE>
<TABLE>
<CAPTION>
CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
SCHEDULE II - VALUATION and QUALIFYING ACCOUNTS
for the years ended December 31, 1999, 1998 and 1997
(In thousands)
Additions
-----------------------
Charged to
Balance at Charged to Other Balance at
Beginning Costs and Accounts - Deductions - End of
Description of Period Expenses Describe Describe Period
<S> <C> <C> <C> <C> <C>
Deducted from assets to
which they apply:
Reserves for doubtful
accounts and notes:
Year-ended December 31,
1999 $1,910 $ 970 $ 733(A) $ 383 $3,230
------ ----- -------- -------- ------
Year-ended December 31,
1998 $1,747 $ 352 $ 20(B) $ 209 $1,910
------ ----- -------- -------- ------
Year-ended December 31,
1997 $1,557 $ 596 $ 406 $1,747
------ ----- -------- ------
Deferred tax asset
valuation allowance:
Year-ended December 31,
1999 $ - $ - $ - $ -
------ ----- -------- ------
Year-ended December 31,
1998 $ - $ - $ - $ -
------ ----- -------- ------
Year-ended December 31,
1997 $1,212 $ - $1,212(C) $ -
------ ----- --------- ------
<FN>
Notes:
(A) Acquired form the purchases of Drive Technology, Farris and Sprague.
(B) Acquired form the purchase of Enertech.
(C) Expiration of available capital loss carry forwards.
</FN>
</TABLE>
EXHIBIT INDEX
The following is an index of the
exhibits included in this report or
incorporated herein by reference.
Exhibit Name Page
No.
(3)(i) Restated Certificate of Incorporation as amended May 8, 1987 *
(incorporated by reference to Exhibit 3(a) to Registrant's
Form 10-Q Report for the quarter ended June 30, 1987).
Restated Certificate of Incorporation as amended through
April 18, 1997 to Registrant's Annual Report on Form 10-K
for the year ended December 31, 1997).
(3)(ii) By-laws as amended through April 30, 1999, filed herewith.
(4)(i) Agreement to furnish to the Commission upon request, a copy *
of any long term debt instrument where the amount of the
securities authorized thereunder does not exceed 10% of
the total assets of the Registrant and its subsidiaries on
a consolidated basis (incorporated by reference to Exhibit
4 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 1985).
(4)(ii) Revolving Credit Agreement dated December 20, 1999 between
Registrant, the Lenders parties thereto from time to time,
the Issuing Banks referred to therein and Mellon Bank,
N.A., filed herewith.
(4)(iii) Short-Term Credit Agreement dated as of December 20, 1999
Registrant, the Lenders parties thereto from time to time,
the Issuing Banks referred to therein and Mellon Bank,
N.A., filed herewith.
10(i)** Modified Incentive Compensation Plan, as amended November *
9, 1989 (incorporated by reference to Exhibit 10(a) to
Registrant's Form 10-Q Report for the quarter ended
September 30, 1989).
(10)(ii)** Curtiss-Wright Corporation 1995 Long-Term Incentive Plan *
(incorporated by * reference to Exhibit 4.1 to Registrant's
Form S-8 Registration Statement No. 95602114 filed December
15, 1995).
(10)(iii)** Standard Severance Agreement with Officers of Curtiss-Wright *
(incorporated by reference to Exhibit 10(iv) to Registrant's
Annual Report on Form 10-K Report for the year ended December
31, 1991).
(10)(iv)** Curtiss-Wright Corporation Retirement Benefits Restoration *
Plan as amended April 15, 1997 (incorporated by reference to
Exhibit 10 to Registrant's Report on Form 10-Q Report for
the quarter ended June 30, 1997).
(10)(v)** Curtiss-Wright Corporation Retirement Plan as amended through *
August 1, 1997(incorporated by reference to Registrant's
Annual Report on Form 10-K for the year ended December 31,
1997); Fourth Amendment to the Curtiss-Wright Corporation
Retirement Plan dated October 20, 1997 (incorporated by
reference to Registrant's Annual Report on Form 10-K for the
year ended December 31, 1997); Fifth Amendment to the
Curtiss-Wright Corporation Retirement Plan dated January
1, 1998 (incorporated by reference to Registrant's Annua
Report on Form 10-K for the year ended December 31, 1997);
Amendments to Curtiss-Wright Retirement Plan dated April 1,
1998, April 20, 1998, April 30, 1998 and June 30, 1998
(incorporated by reference to Exhibit a(ii) to Registrant's
Quarterly Report for the quarter ended June 30, 1998).
(10)(vi)** Amended Curtiss-Wright Corporation Savings and Investment *
Plan dated March 1, 1995 (incorporated by reference to Exhibit
(10)(vii) to Registrant's Annual Report on Form 10-K for the
fiscal year ended December 31, 1994).
(10)(vii)** Curtiss-Wright Corporation 1996 Stock Plan for Non-Employee *
Directors (incorporated by reference to Exhibit 4.1 to
Registrant's Form S-8 Registration Statement No. 96583181
filed June 19, 1996).
(10)(viii)**Curtiss-Wright Corporation Executive Deferred Compensation *
Plan effective November 18, 1997 (incorporated by reference
to Exhibit 4.1 to Registrant's Form S-8 Registration Statement
No. 96583181, filed June 19, 1996).
(10)(ix)** Standard Severance Protection Agreement dated June 19, 1998 *
between the Registrant and Officers of the Registrant
(incorporated by reference to Exhibit 4.1 to Registrant's
Form S-8 Registration Statement No. 96583181, filed June
19, 1996).
(10)(x)** Trust Agreement approved April 17, 1998 dated as of January *
30, 1998 by and between Registrant and PNC Bank, National
Association (incorporated by reference to Exhibit 10(a)
to Registrant's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1998).
(13) Annual Report to Stockholders for the year ended December
31, 1999 (only those portions expressly incorporated
herein by reference in this document are deemed "filed.")
(21) Subsidiaries of the Registrant
(23) Consents of Experts and Counsel - see Consent of Independent
Accountants
(27) Financial Data Schedule
- --------------------------
* Incorporated by reference as noted.
** Management contract or compensatory plan or arrangement.
EXHIBIT 3(ii)
CURTISS-WRIGHT CORPORATION
B Y - L A W S
AS AMENDED THROUGH APRIL 1999
ARTICLE I.
OFFICES.
SECTION 1. Registered Office. The registered office of Curtiss-Wright
Corporation (hereinafter called the Corporation) in the State of Delaware, shall
be in the City of Wilmington, County of New Castle.
SECTION 2. Other Offices. The Corporation may also have an office or
offices at such other place or places either within or without the State of
Delaware as the Board of Directors may from time to time determine or the
business of the Corporation require.
ARTICLE II.
MEETING OF STOCKHOLDERS.
SECTION 1. Place of Meetings. All meetings of Stockholders for the
election of directors or for any other purpose shall be held at such place
either within or without the State of Delaware as shall be designated from time
to time by the Board of Directors and stated in the notice of the meeting or in
a duly executed waiver of notice thereof.
SECTION 2. Annual Meetings. The annual meeting of the stockholders for
the election of directors and for the transaction of such other proper business
as may come before the meeting shall be held on a date and at a time as may be
designated from time to time by the Board of Directors and stated in the notice
of the meeting or in a duly executed waiver of notice thereof. If the election
of directors shall not be held on the date so designated for any annual meeting
or at any adjournment of such meeting, the Board of Directors shall cause the
election to be held at a special meeting as soon thereafter as conveniently may
be. At such special meeting the stockholders may elect the directors and
transact other business with the same force and effect as at an annual meeting
duly called and held.
SECTION 3. Special Meetings. A special meeting of the stockholders for
any purpose or purposes, unless otherwise prescribed by statute, may be called
at any time by the Chairman, or in his absence by the President, by the Board of
Directors, or by the Secretary at the request in writing of holders of a
majority of the shares of the Corporation outstanding and entitled to vote.
SECTION 4. Notice of Meetings. Except as otherwise provided by statute,
notice of each meeting of the stockholders, whether annual or special, shall be
given not less than ten days nor more than sixty days before the day on which
the meeting is to be held, to each stockholder of record entitled to vote at
such meeting by delivering a written or printed notice thereof to him
personally, or by mailing such notice in a postage prepaid envelope addressed to
him at his post office address furnished by him to the Secretary of the
Corporation for such purpose, or, if he shall not have furnished to the
Secretary of the Corporation his address for such purpose, then at his post
office address as it appears on the records of the Corporation, or by
transmitting a notice thereof to him at such address by telegraph, cable, telex,
facsimile transmitter or other similar means. Except where expressly required by
law, no publication of any notice of a meeting of stockholders shall be
required. Every such notice shall state the place, date and hour of the meeting
and in the case of special meetings, and annual meetings where business other
than the election of directors may be transacted, the purpose or purposes for
which the meeting is called. Notice of any meeting of stockholders shall not be
required to be given to any stockholder who shall attend such meeting in person
or by proxy except as otherwise provided by statute; and if any stockholder
shall in person or by attorney thereunto authorized, in writing or by telegraph,
cable, telex, facsimile transmitter or other similar means, waive notice of any
meeting, whether before or after such meeting be held, notice thereof need not
be given to him. Notice of any adjourned meeting of the stockholders shall not
be required to be given, except when expressly required by law. Notice of any
meeting of stockholders as herein provided shall not be required to be given to
any stockholder where the giving of such notice is prohibited or is rendered
impossible by the laws of the United States of America.
SECTION 5. List of Stockholders. It shall be the duty of the Secretary
or other officer who shall have charge of the stock ledger either directly or
through a transfer agent appointed by the Board of Directors, to prepare and
make, at least ten days before every meeting of stockholders, complete lists of
the stockholders entitled to vote thereat, arranged in alphabetical order, and
showing the address of each stockholder, the holders of each class of stock
appearing separately, and indicating the number of shares held by each,
certified by the Secretary or Transfer Agent. For said ten days such lists shall
be open to the examination of any stockholder for any purpose germane to the
meeting at the place where said meeting is to be held, or at a place permitted
by the Delaware General Corporation Law, and shall be produced and kept at the
time and place of the meeting during the whole time thereof, and subject to the
inspection of any stockholder who may be present. Upon the wilful neglect or
refusal of the directors to produce such lists at any meeting, they shall be
ineligible to any office at such meeting. The original or a duplicate stock
ledger shall be the only evidence as to who are the stockholders entitled to
examine the stock ledger, such lists, or the books of the Corporation or to vote
in person or by proxy at such meeting.
SECTION 6. Quorum. At each meeting of the stockholders, the holders of
not less than a majority of the issued and outstanding stock of the Corporation
present either in person or by proxy and entitled to vote at such meeting shall
constitute a quorum except where otherwise provided by law or by the Certificate
of Incorporation or these by-laws. In the absence of a quorum, the stockholders
of the Corporation present in person or by proxy and entitled to vote, by
majority vote, or, in the absence of all the stockholders, any officer entitled
to preside or act as Secretary at such meeting, shall have the power to adjourn
the meeting from time to time, until stockholders holding the requisite amount
of stock shall be present or represented. At any such adjourned meeting at which
a quorum may be present any business may be transacted which might have been
transacted at the meeting as originally called. The absence from any meeting of
the number required by the laws of the State of Delaware or by the Certificate
of Incorporation of the Corporation or by these by-laws for action upon any
given matter shall not prevent action at such meetings upon any other matter or
matters which may properly come before the meeting, and if the holders of not
less than a majority of the issued and outstanding stock of the Corporation
entitled to vote at that time upon such other matter or matters shall be present
either in person or by proxy at such meeting, a quorum for the consideration of
such other matter or matters shall be present and the meeting may proceed
forthwith and take action upon such other matter or matters.
SECTION 7. Organization. The Chairman or, in his absence, the
President, or, in the absence of both of them, any Vice President present, shall
call meetings of the stockholders to order and shall act as Chairman thereof. In
the absence of all of the foregoing officers, the holders of a majority in
interest of the stock present in person or by proxy and entitled to vote may
elect any stockholder of record present and entitled to vote to act as Chairman
of the meeting until such time as any one of the foregoing officers shall
arrive, whereupon he shall act as Chairman of the meeting. The Secretary or, in
his absence, an Assistant Secretary shall act as secretary at all meetings of
the stockholders. In the absence from any such meeting of the Secretary and the
Assistant Secretary or Secretaries, the Chairman may appoint any person present
to act as secretary of the meeting. Such person shall be sworn to the faithful
discharge of his duties as such secretary of the meeting before entering
thereon.
SECTION 8. Business and Order of Business. At each meeting of the
stockholders such business may be transacted as may properly be brought before
such meeting, except as otherwise in these by-laws expressly provided. The order
of business at all meetings of the stockholders shall be as determined by the
Chairman.
SECTION 9. Voting. Each stockholder of the Corporation shall, except as
otherwise provided by statute or in these by-laws or in the Certificate of
Incorporation of the Corporation, at every meeting of the stockholders be
entitled to one vote in person or by proxy for each share of the capital stock
of the Corporation registered in his name on the books of the Corporation on the
date fixed pursuant to Section 6 of Article VII of these by-laws as the record
date for the determination of stockholders entitled to vote at such meeting.
Persons holding in a fiduciary capacity stock having voting rights shall be
entitled to vote the shares so held, and persons whose stock having voting
rights is pledged shall be entitled to vote, unless in the transfer by the
pledgor on the books he shall have expressly empowered the pledgee to vote
thereon, in which case only the pledgee, or his proxy, may represent said stock
and vote thereon. Any vote on stock may be given by the stockholder entitled
thereto in person or by his proxy appointed by an instrument in writing,
subscribed by such stockholder or by his attorney thereunto authorized, and
delivered to the secretary of the meeting; provided, however, that no proxy
shall be voted on after three years from its date unless said proxy provides for
a longer period. At all meetings of the stockholders, all matters (except those
specified in Sections 3 and 12 of Article III and Article XI of these by-laws,
and except also in special cases where other provision is made by statute, and
except as otherwise provided in the Certificate of Incorporation) shall be
decided by the vote of a majority in interest of the stockholders present in
person or by proxy and entitled to vote thereat, a quorum being present. Except
as otherwise provided by statute, the vote on any question need not be by
ballot. On a vote by ballot each ballot shall be signed by the stockholder
voting, or in his name by his proxy if there be such proxy, and shall state the
number of shares voted by him.
SECTION 10. Inspectors of Election. On each matter or election at each
meeting of the stockholders where a vote by ballot is taken, the polls shall be
opened and closed, the proxies and ballots shall be received and be taken in
charge, and all questions touching the qualification of voters and the validity
of proxies and the acceptance or rejection of votes, shall be decided by two
inspectors of election who shall be appointed by the Chairman of such meeting.
The inspectors of election need not be stockholders. No candidate for the office
of director shall act as inspector at any election of directors. Inspectors
shall count and ascertain the number of shares voted; and shall declare the
result of the election or of the voting as the case may be; and shall make out a
certificate accordingly, stating the number of shares issued and outstanding and
entitled to vote at such election or on such matters and the number of shares
voted and how voted. Inspectors shall be sworn to faithfully perform their
duties and shall certify to the returns in writing. They shall hold office from
the date of their appointment until their successors shall have been appointed
and qualified.
SECTION 11. Action by Consent. Whenever the vote of stockholders at a
meeting thereof is required or permitted to be taken for or in connection with
any corporate action, by any provision of statute or of the Certificate of
Incorporation or of these by-laws, the meeting, prior notice thereof, and vote
of stockholders may be dispensed with, and the action taken without such
meeting, notice and vote, if a consent in writing, setting forth the action so
taken, shall be signed by the holders of outstanding stock having not less than
the minimum number of votes that would be necessary to authorize or take such
action at a meeting at which all shares of stock of the Corporation entitled to
vote thereon were present and voted. In order that the Corporation may determine
the stockholders entitled to consent to corporate action in writing without a
meeting, the Board of Directors may fix a record date, which record date shall
not precede the date upon which the resolution fixing the record date is adopted
by the Board of Directors, and which date shall not be more than ten days after
the date upon which the resolution fixing the record date is adopted by the
Board of Directors. Any stockholder of record seeking to have the stockholders
authorize or take corporate action by written consent shall, by written notice
to the Secretary, request the Board of Directors to fix a record date. Such
written notice shall be directed to the Secretary at the Corporation's principal
place of business, shall be by hand or by certified or registered mail, return
receipt requested, and shall set forth the corporate action proposed to be
taken. The Board of Directors shall promptly, but in all events within ten days
after the date on which such a request is received by the Secretary, adopt a
resolution fixing the record date. If no record date has been fixed by the Board
of Directors within ten days of the date on which such a request is received,
the record date for determining stockholders entitled to consent to such
corporate action in writing without a meeting, when no prior action by the Board
of Directors is required by applicable law, shall be the first date on which a
signed written consent setting forth such action taken or proposed to be taken
is delivered to the Corporation by delivery to its principal place of business,
or any officer or agent of the Corporation having custody of the book in which
proceedings of stockholders meetings are recorded, to the attention of the
Secretary of the Corporation. Delivery shall be by hand or by certified or
registered mail, return receipt requested. If no record date has been fixed by
the Board of Directors and prior action by the Board of Directors is required by
applicable law, the record date for determining stockholders entitled to consent
to corporate action in writing without a meeting shall be the close of business
on the date on which the Board of Directors adopts the resolution taking such
prior action. No consent to corporate action without a meeting of stockholders
shall be effective prior to the record date determined as set forth herein.
Prompt notice of the taking of any corporate action without a meeting of
stockholders by less than unanimous written consent shall be given to those
stockholders who have not consented to such action in writing.
ARTICLE III
BOARD OF DIRECTORS.
SECTION 1. General Powers. The property, affairs and business of the
Corporation shall be managed by or under the direction of the Board of
Directors.
SECTION 2. Number, Qualifications and Terms of Office. The number of
directors may be fixed from time to time by the affirmative vote of a majority
of the whole Board of Directors, but the number may be diminished to not less
than three, by amendment of these by-laws. Directors need not be stockholders.
The directors shall be elected annually and each director shall hold office
until his successor shall have been elected and shall qualify, or until his
death or until he shall resign or shall have been removed in the manner
hereinafter provided.
SECTION 3. Election of Directors. At each meeting of the stockholders
for the election of directors, at which a quorum is present, the persons
receiving the greatest number of votes shall be the directors. In case of any
increase in the number of directors, the additional directors may be elected by
the directors then in office at any regular meeting or special meeting, or by
the stockholders at the first annual meeting held after such increase or at a
special meeting called for the purpose.
SECTION 4. Quorum and Manner of Acting. Except as otherwise provided by
statute or by these by-laws, one-third of the whole Board of Directors (but not
less than two) shall be required to constitute a quorum for the transaction of
business at any meeting, and the act of a majority of the directors present at
any meeting at which a quorum is present shall be the act of the Board of
Directors. In the absence of a quorum, a majority of the directors present may
adjourn any meeting from time to time until a quorum be had. Notice of any
adjourned meeting need be given only to those directors who were not present at
any meeting at which the adjournment was taken, provided the time and place of
the adjourned meeting were announced at the meeting at which the adjournment was
taken. The directors shall act only as a board and the individual directors
shall have no power as such.
SECTION 5. Place of Meeting, etc. The Board of Directors may hold its
meetings, at such place or places within or without the State of Delaware as the
Board of Directors may from time to time determine or as shall be specified or
fixed in the respective notices or waivers of notice thereof.
SECTION 6. First Meeting. After each annual election of directors and
within a reasonable time thereafter, the Board of Directors shall meet for the
purpose of organization, the election of officers and the transaction of other
business at such hours and place as shall be convenient. Notice of such meeting
shall be given as hereinafter provided for special meetings of the Board of
Directors or in a consent and waiver of notice thereof signed by all the
directors.
SECTION 7. Regular Meetings. Regular meetings of the Board of Directors
shall be held at such place and at such times as the Board of Directors shall
from time to time by resolution determine or as shall be specified in the Notice
of Meeting. If any day fixed for a regular meeting shall be a legal holiday at
the place where the meeting is to be held, then the meeting which would
otherwise be held on that day shall be held at the same hour on the next
succeeding business day not a legal holiday. Notice of the regular meetings need
not be given.
SECTION 8. Special Meetings: Notice. Special meetings of the Board of
Directors shall be held whenever called by the Chairman, the President or by one
of the directors. Notice of each such meeting shall be mailed to each director,
addressed to him at his residence or usual place of business, at least two days
before the day on which the meeting is to be held, or shall be sent to him at
such place by telegraph, cable, telex, facsimile transmitter or other similar
means, or be delivered personally or by telephone, not later than the day before
the day on which the meeting is to be held. Every such notice shall state the
time and place of the meeting but need not state the purpose thereof except as
otherwise in these by-laws or by statute expressly provided. Notice of any
meeting of the Board of Directors need not be given to any director, however, if
waived by him in writing or by telegraph, cable, telex, facsimile transmitter or
other similar means whether before or after such meeting be held or if he shall
be present at the meeting; and any meeting of the Board of Directors shall be a
legal meeting without any notice thereof having been given if all of the
directors shall be present thereat.
SECTION 9. Organization. At each meeting of the Board of Directors, the
Chairman or, in his absence, the President, or, in the absence of both of them,
a director chosen by a majority of the directors present shall act as Chairman.
The Secretary or, in his absence, an Assistant Secretary or, in the absence of
both the Secretary and Assistant Secretaries, any person appointed by the
Chairman shall act as secretary of the meeting.
SECTION 10. Order of Business. At all meetings of the Board of
Directors business shall be transacted in the order determined by the Board of
Directors.
SECTION 11. Resignations. Any director of the Corporation may resign at
any time by giving written notice to the Chairman, the President or to the
Secretary of the Corporation. The resignation of any director shall take effect
at the time of the receipt of such notice or at any later time specified
therein; and, unless otherwise specified therein, the acceptance of such
resignation shall not be necessary to make it effective.
SECTION 12. Removal of Directors. Any director may be removed, either
with or without cause, at any time, by the affirmative vote of a majority in
interest of the holders of record of the stock having voting power at a meeting
of the stockholders and the vacancy in the Board of Directors caused by any such
removal may be filled by the stockholders at such meeting.
SECTION 13. Vacancies.
13.1 Any vacancy in the Board of Directors caused by death,
resignation, removal, disqualification, an increase in the number of directors,
or any cause may be filled by the directors then in office or by the
stockholders of the Corporation at the next annual meeting or any special
meeting called for the purpose and at which a quorum is present, and each
director so elected shall hold office until his successor shall be duly elected
and qualified, or until his death or until he shall resign or shall have been
removed in the manner herein provided. In case of a vacancy in the Board of
Directors, the remaining Directors shall continue to act, but if at any time the
number of directors in office shall be reduced to less than a majority of the
number necessary to constitute a full Board of Directors, the remaining
directors shall forthwith call a special meeting of the stockholders for the
purpose of filling vacancies. In case all the directors shall die or resign or
be removed or disqualified, any officer or any stockholder having voting power
may call a special meeting of the stockholders, upon notice given as herein
provided for meetings of the stockholders, at which directors for the unexpired
term may be elected.
13.2 A director who resigns, retires, or does not stand for reelection
may, in the discretion of the Board of Directors, be elected a Director
Emeritus. A Director Emeritus shall receive reimbursement for reasonable
expenses for attendance at meetings of the Board to which he is invited. Such
attendance shall be in a consulting capacity and he shall not be entitled to
vote or have any duties or powers of a Director of the Corporation.
SECTION 14. Regular Stipulated Compensation and Fees. Each director
shall be paid such regular stipulated compensation, if any, as shall be fixed by
the Board of Directors and/or such fee, if any, for each meeting of the Board of
Directors which he shall attend as shall be fixed by the Board of Directors and
in addition such transportation and other expenses actually incurred by him in
connection with services to the Corporation.
SECTION 15. Action by Consent. Unless restricted by the Certificate of
Incorporation, any action required or permitted to be taken by the Board of
Directors or any Committee thereof may be taken without a meeting if all members
of the Board of Directors or such Committee, as the case may be, consent thereto
in writing, and the writing or writings are filed with the minutes of the
proceedings of the Board of Directors or such Committee, as the case may be.
SECTION 16. Telephonic Meeting. Unless restricted by the Certificate of
Incorporation, any one or more members of the Board of Directors or any
Committee thereof may participate in a meeting of the Board of Directors or such
Committee by means of a conference telephone or similar communications equipment
by means of which all persons participating in the meeting can hear each other.
Participation by such means shall constitute presence in person at a meeting.
ARTICLE IV.
COMMITTEES.
SECTION 1. Committees. The Board of Directors may by resolution or
resolutions passed by a majority of the whole Board, designate one or more
Committees, each Committee to consist of two or more of the directors of the
Corporation, which, to the extent provided for in said resolution or resolutions
or in these by-laws, shall have and may exercise such powers as shall be
permitted by law to be, and shall be delegated to such Committee by the Board.
The Committee or Committees appointed by the Board shall be subject to the
supervision and direction of the Board of Directors.
SECTION 2. Term of Office and Vacancies. Each member of a Committee
shall continue in office until a director to succeed him shall have been elected
and shall have qualified, or until his death or until he shall have resigned or
shall have been removed in the manner hereinafter provided. Any vacancy in a
Committee shall be filled by the vote of a majority of the whole Board of
Directors at any regular or special meeting thereof.
SECTION 3. Organization. Except as otherwise provided in these by-laws,
the Chairman of each Committee shall be designated by the Board of Directors.
The Chairman of each Committee may designate a secretary of each such Committee.
In the absence from any meeting of any Committee of its Chairman or its
secretary such Committee shall appoint a temporary Chairman or secretary, as the
case may be, of the meeting unless otherwise provided in these by-laws. Each
Committee shall keep a record of its acts and proceedings and report the same
from time to time to the Board of Directors.
SECTION 4. Resignations. Any member of a Committee may resign at any
time by giving written notice to the Chairman, President or Secretary of the
Corporation. Such resignation shall take effect at the time of the receipt of
such notice or at any later time specified therein, and, unless otherwise
specified therein, the acceptance of such resignation shall not be necessary to
make it effective.
SECTION 5. Removal. Any member of a Committee may be removed with or
without cause at any time by the affirmative vote of a majority of the whole
Board of Directors given at any regular meeting or at any special meeting called
for the purpose.
SECTION 6. Meetings. Regular meetings of each Committee, of which no
notice shall be necessary, shall be held on such days and at such place as shall
be fixed by a resolution adopted by the vote of a majority of all the members of
such Committee. Special meetings of each Committee may be called by the Chairman
of such Committee or by the Chairman, President or Secretary of the Corporation.
Notice of each special meeting of the Committee shall be sent by mail to each
member thereof, addressed to him at his residence or usual place of business,
not later than the day before the day on which the meeting is to be held, or
shall be sent to each such member by telegraph, cable, telex, facsimile
transmitter or other similar means, or delivered to him personally or by
telephone, not less than three (3) hours before the time set for the meeting.
Every such notice shall state the time and place, but need not state the
purposes, of the meeting. Notice of any such meeting need not be given to any
member of a Committee, however, if waived by him in writing or by telegraph,
cable, telex, facsimile transmitter or other similar means, or if he shall
attend such meeting in person, and any meeting of a Committee shall be a legal
meeting without any notice thereof having been given if all of the members of
the Committee shall be present thereat.
SECTION 7. Quorum and Manner of Acting. Unless otherwise provided by
resolution of the Board of Directors one less than a majority of a Committee,
but not less than two, shall constitute a quorum for the transaction of business
and the act of a majority of those present at a meeting at which a quorum is
present shall be the act of such Committee. If at any time it shall be
determined that a quorum of a Committee for any regular or special meeting
thereof cannot be had, any member or members thereof shall have the right to
invite one or more members of the Board of Directors who are not members of such
Committee to attend any such meeting and to be counted as a member thereof for
the purpose of making a quorum. The members of each Committee shall act only as
a Committee and the individual members shall have no power as such.
SECTION 8. [RESERVED]
SECTION 9. Fees. Each member of a Committee shall be paid such fee, if
any, as shall be fixed by the Board of Directors, for each meeting of such
Committee which he shall attend, and in addition such transportation and other
expenses actually incurred by him in connection with his services as such
member.
ARTICLE V.
OFFICERS, EMPLOYEES AND AGENTS: POWERS AND DUTIES.
SECTION 1. Officers. The elected officers of the Corporation shall be a
Chairman and a President (each of whom shall be a director), a Chief Executive
Officer, a Chief Operating Officer, such Executive Vice Presidents, such Senior
Vice Presidents and other Vice Presidents as the Board may elect, a Controller,
a Treasurer, and a Secretary. The Board of Directors or any Committee
constituted pursuant to Article IV of these by-laws with power for the purpose
may also appoint one or more Assistant Controllers, one or more Assistant
Treasurers, one or more Assistant Secretaries, and such other officers and
agents as, from time to time, may appear to be necessary or advisable in the
conduct of the affairs of the Corporation. Any number of offices may be held by
the same person, except that any person serving as Chairman or President shall
not also serve as Secretary.
SECTION 2. Term of Office: Vacancies. So far as practicable, all
elected officers shall be elected at the organization meeting of the Board of
Directors in each year, and shall hold office until their respective successors
are chosen and qualified or until their earlier resignations or removals. All
other officers shall hold office during the pleasure of the Board. If any
vacancy occurs in any office, the Board of Directors, or, in the case of an
appointive office, any Committee constituted pursuant to Article IV of these
by-laws with power for the purpose, may elect or appoint a successor to fill
such vacancy for the remainder of the term.
SECTION 3. Removal of Elected Officers. Any elected officer may be
removed at any time, either for or without cause, by affirmative vote of a
majority of the whole Board of Directors, at any meeting called for the purpose.
SECTION 4. Chairman. The Chairman shall function under the general
supervision of the Board of Directors and shall perform such duties and exercise
such powers as from time to time may be assigned to him by the Board. During any
period in which there is a vacancy in the office of the President, the Chairman
shall, pending action by the Board, perform the duties and exercise the powers
of the President. The Chairman shall preside, when present, at all meetings of
the stockholders and of the Board of Directors and shall see to it that
appropriate agendas are developed for such meetings.
SECTION 5. President. The President shall perform such duties and
exercise such powers as from time to time may be assigned to him by the Board or
the Chairman. At the request of the Chairman or in case of the Chairman's
absence or inability to act, the President shall perform the duties of the
Chairman and, when so acting, shall have the powers of, and shall be subject to
the restrictions upon, the Chairman.
SECTION 6. Chief Executive Officer. The Chief Executive Officer shall
be designated from time to time by a resolution adopted by the Board of
Directors and shall be either the Chairman or the President. He shall have,
subject to the direction and control of the Board, general and active
supervision over the business and affairs of the Corporation and over its
several officers. He shall perform all duties incident to his position and such
other duties as may from time to time be assigned to him by the Board. He shall
see that all orders of the Board shall be carried into effect. He may sign,
execute and deliver all deeds, mortgages, contracts, stock certificates and
other instruments in the name of the Corporation, except in cases where the
signing, execution or delivery thereof shall be expressly delegated by the Board
or by a duly authorized Committee of the Board or by these By-Laws to some other
officer or agent of the Corporation or where any of them shall be required by
law otherwise to be signed, executed or delivered. He may cause the seal of the
Corporation to be affixed to any documents the execution of which on behalf of
the Corporation shall have been duly authorized. He shall have authority to
cause the employment or appointment of such employees and agents of the
Corporation as the proper conduct of operations may require, to fix their
compensation, subject to the provisions of these By-Laws, to remove or suspend
any employee or agent under authority of an officer to him, to suspend for
cause, pending final action by the authority which shall have elected or
appointed him, any officer subordinate to him, and to have all the duties and
exercise all the powers usually pertaining to the office held by the Chief
Executive Officer of a Corporation, except as otherwise provided in these
By-Laws.
SECTION 7. Chief Operating Officer. A Chief Operating Officer may be
designated from time to time by a resolution adopted by the Board of Directors,
and shall be subject to the direction and control of the Board, and the Chief
Executive Officer. He shall directly report to and assist the Chief Executive
Officer in the general and active supervision over the business and affairs of
the Corporation and over its several officers, and shall perform all duties
incident to his position and such other duties as may from time to time be
assigned to him by the Board, or the Chief Executive Officer.
SECTION 8. Vice Presidents. Under the direction of the Chief Executive
Officer or the Chief Operating Officer, the Executive Vice Presidents, Senior
Vice Presidents, and Vice Presidents of the Corporation shall perform all such
duties and exercise all such powers as may be provided by these by-laws or as
may from time to time be determined by the Board of Directors, any Committee
constituted pursuant to Article IV of these by-laws with power for the purpose,
the Chief Executive Officer, or the Chief Operating Officer.
SECTION 9. Controller. The Controller shall be the chief accounting
officer of the Corporation and shall see that the accounts of the Corporation
and its subsidiary corporations are maintained in accordance with generally
accepted accounting principles; and all decisions affecting the accounts shall
be subject to his approval or concurrence. He shall supervise the manner of
keeping all vouchers for payments by the Corporation and its subsidiary
corporations and all other documents relating to such payments, shall receive
and consolidate all operating and financial statements of the Corporation, its
various departments, divisions and subsidiary corporations; shall have
supervision of the books of account of the Corporation and its subsidiary
corporations, their arrangement and classification; shall supervise the
accounting practices of the Corporation and its subsidiary corporations and
shall have charge of all matters relating to taxation.
SECTION 10. Assistant Controllers. At the request of the Controller or
in his absence or disability the Assistant Controller designated by him or
(failing such request or designation) the Assistant Controller or other officer
designated by the President shall perform all the duties of the Controller and,
when so acting, shall have all the powers of, and be subject to all the
restrictions upon, the Controller.
SECTION 11. Treasurer. The Treasurer shall be the fiscal officer of the
Corporation. He shall have the care and custody of all moneys, funds and
securities of the Corporation, and shall cause the same to be deposited in such
bank or banks or depositories as from time to time may be designated, pursuant
to Section 4 and Section 5 of Article VI of these by-laws; shall advise upon all
terms of credit granted by the Corporation and its subsidiary corporations,
respectively; shall be responsible for the collection of their accounts, and
shall cause to be recorded, daily, a statement of all receipts and disbursements
of the Corporation and its subsidiary corporations, in order that proper entries
may be made in the books of account; and shall have power to give proper
receipts or discharges for all payments to the Corporation. He shall also have
power to sign any or all certificates of stock of the Corporation.
SECTION 12. Assistant Treasurers. At the request of the Treasurer or in
his absence or disability the Assistant Treasurer designated by him or (failing
such request or designation) the Assistant Treasurer or other officer designated
by the President shall perform all the duties of the Treasurer and, when so
acting, shall have the powers of, and be subject to all the restrictions upon,
the Treasurer.
SECTION 13. Secretary. The Secretary shall attend to the giving of
notice of all meetings of stockholders and of the Board of Directors and shall
record all the proceedings of the meetings thereof in books to be kept for that
purpose. He shall have charge of the corporate seal and have authority to attest
any and all instruments or writings to which the same may be affixed. He shall
be custodian of all books, documents, papers and records of the Corporation,
except those for which some other officer or agent is properly accountable. He
shall have authority to sign any or all certificates of stock of the
Corporation, and, in general, shall have all the duties and powers usually
appertaining to the office of secretary of a corporation.
SECTION 14. Assistant Secretaries. At the request of the Secretary or
in his absence or disability the Assistant Secretary designated by him or
(failing such request or designation) the Assistant Secretary or other officer
designated by the President shall perform all the duties of the Secretary and,
when so acting, shall have all the powers of, and be subject to all the
restrictions upon, the Secretary.
SECTION 15. Additional Duties and Powers. In addition to the foregoing
especially enumerated duties and powers, the several officers of the Corporation
shall perform such other duties and exercise such further powers as may be
provided in these by-laws or as may from time to time be determined by the Board
of Directors, or any Committee constituted pursuant to Article IV of these
by-laws with power for the purpose, or by any competent superior officer.
SECTION 16. Compensation. The compensation of all officers, except
assistant officers, of the Corporation shall be fixed, from time to time by the
Board of Directors, or any Committee constituted pursuant to Article IV of these
by-laws with power for the purpose.
SECTION 17. Resignations. Any officer may resign at any time by giving
written notice to the Board of Directors, the Chairman, the President, the Chief
Executive Officer, the Chief Operating Officer, or the Secretary. Any such
resignation shall take effect at the date of receipt of such notice or at any
later time specified therein; and unless otherwise specified therein, the
acceptance of such resignation shall not be necessary to make it effective.
ARTICLE VI.
CONTRACTS, CHECKS, DRAFTS, BANK ACCOUNTS, ETC.
SECTION 1. Contracts, etc., How Executed. The Board of Directors, or
any Committee constituted pursuant to Article IV of these by-laws with power for
the purpose, except as in these by-laws otherwise provided, may authorize any
officer or officers, agent or agents, of the Corporation to enter into any
contract or execute and deliver any instrument in the name of and on behalf of
the Corporation, and such authority may be general or confined to specific
instances; and, unless so authorized by the Board of Directors or by such
Committee or by these by-laws, no officer, agent, or employee shall have any
power or authority to bind the Corporation by any contract or agreement or to
pledge its credit or to render it liable pecuniarily for any purpose or to any
amount.
SECTION 2. Loans. No loan shall be contracted on behalf of the
Corporation, and no negotiable paper shall be issued in its name, unless
authorized by the Board of Directors or by any Committee constituted pursuant to
Article IV of these by-laws with power for the purpose. When so authorized, the
Chairman, President, Chief Executive Officer, Chief Operating Officer, or a Vice
President or the Secretary or the Treasurer or the Assistant Treasurer of the
Corporation may effect loans and advances at any time for the Corporation from
any bank, trust company or other institution, or from any firm, corporation or
individual and for such loans and advances may make, execute and deliver
promissory notes or other evidences of indebtedness of the Corporation and, when
authorized as aforesaid, as security for the payment of any and all loans,
advances, indebtedness and liabilities of the Corporation, may mortgage, pledge,
hypothecate or transfer any real or personal property at any time held by the
Corporation and to that end execute instruments of mortgage or pledge or
otherwise transfer such property.
Such authority may be general or confined to specific instances.
SECTION 3. Checks, Drafts, etc. All checks, drafts or other orders for
the payment of money, notes, or other evidences of indebtedness issued in the
name of the Corporation, shall be signed by such officer or officers, employee
or employees, of the Corporation as shall from time to time be determined by
resolution of the Board of Directors or by any Committee constituted pursuant to
Article IV of these by-laws with power for the purpose, or by any officer or
officers authorized pursuant to Section 4 or Section 5 of this Article to
designate depositaries or to open bank accounts.
SECTION 4. Deposits. All funds of the Corporation shall be deposited
from time to time to the credit of the Corporation in such banks, trust
companies or other depositories as the Board of Directors or any Committee
constituted pursuant to Article IV of these by-laws with power for the purpose
may from time to time designate, or as may be designated by an officer or
officers of the Corporation to whom such power may be delegated by the Board of
Directors, or by such Committee, and for the purpose of such deposit, the
President, the Chief Executive Officer, the Chief Operating Officer, or a Vice
President, or the Treasurer, or an Assistant Treasurer, or the Secretary, or an
Assistant Secretary, may endorse, assign and deliver checks, drafts and other
orders for the payment of money which are payable to the order of the
Corporation.
SECTION 5. General and Special Bank Accounts. The Board of Directors or
any Committee constituted pursuant to Article IV of these by-laws with power for
the purpose, or any officer or officers of the Corporation to whom such powers
may be delegated by the Board of Directors, or by such Committee, may from time
to time authorize the opening and keeping with such banks, trust companies or
other depositaries as it, or they, may designate of general and special bank
accounts, and may make such special rules and regulations with respect thereto,
not inconsistent with the provisions of these by-laws, as it, or they, may deem
expedient.
SECTION 6. Proxies. Except as otherwise in these by-laws or in the
Certificate of Incorporation of the Corporation provided, and unless otherwise
provided by resolution of the Board of Directors, or of any Committee
constituted pursuant to Article IV of these by-laws with power for the purpose,
the Chairman or President or Chief Executive Officer may from time to time
appoint an attorney or attorneys or agent or agents, of the Corporation, in the
name and on behalf of the Corporation to cast the votes which the Corporation
may be entitled to cast as a stockholder or otherwise in any other corporation
any of whose stock or other securities may be held by the Corporation, at
meetings of the holders of the stock or other securities of such other
corporation, or to consent in writing to any action by such other corporation,
and may instruct the person or persons so appointed as to the manner of casting
such votes or giving such consent, and may execute or cause to be executed in
the name and on behalf of the Corporation and under its corporate seal, or
otherwise, all such written proxies or other instruments as he may deem
necessary or proper in the premises.
SECTION 7. Independent Public Accountants. The stockholders of the
Corporation shall, at each annual meeting, appoint independent public
accountants for the purpose of auditing and certifying the annual financial
statements of the Corporation for its current fiscal year as sent to
stockholders or otherwise published by the Corporation. If the stockholders
shall fail to appoint such independent public accountants or if the independent
public accountants so appointed by the stockholders shall decline to act or
resign, or for some other reason be unable to perform their duties, the Board of
Directors shall appoint other independent public accountants to perform the
duties herein provided.
ARTICLE VII.
SHARES AND THEIR TRANSFER.
SECTION 1. Shares. The shares of the Corporation shall be represented
by certificates or shall be uncertificated. Each registered holder of shares,
upon request to the Corporation, shall be provided with a certificate of stock,
representing the number of shares owned by such holder. Absent a specific
request for such a certificate by the registered owner or transferee thereof,
all shares shall be uncertificated upon the original issuance thereof by the
Corporation or upon the surrender of the certificate representing such shares to
the Corporation. Certificates for shares of the capital stock of the Corporation
shall be in such form as shall be approved by the Board of Directors or by any
Committee constituted pursuant to Article IV of these by-laws with power for the
purpose. They shall be numbered, shall certify the number of shares held by the
holder thereof and shall be signed by the Chairman, President, Chief Executive
Officer, Chief Operating Officer or a Vice President and the Treasurer or an
Assistant Treasurer or the Secretary or an Assistant Secretary of the
Corporation, and the seal of the Corporation shall be affixed thereto. Where any
such certificate is countersigned by a transfer agent, other than the
Corporation or its employee, or by a registrar, other than the Corporation or
its employee, any other signature and the seal of the Corporation on such
certificate may be a facsimile, engraved, stamped or printed. In any case any
such officer, transfer agent or registrar who has signed or whose facsimile
signature has been placed upon any such certificate shall have ceased to be such
officer, transfer agent or registrar before such certificate is issued, it may
be issued by the Corporation with the same effect as if such officer, transfer
agent, or registrar were such officer, transfer agent or registrar at the date
of its issue.
SECTION 2. Transfer of Stock. Transfers of shares of the capital stock
of the Corporation shall be made only on the books of the Corporation by the
holder thereof, or by his attorney thereunto authorized by a power of attorney
duly executed and filed with the Secretary of the Corporation, or a transfer
agent of the Corporation, if any, and on surrender of the certificate or
certificates for such shares, properly endorsed, or upon receipt of proper
transfer instructions from the owner of uncertificated shares, or upon the
escheat of said shares under the laws of any state of the United States. A
person in whose name shares of stock stand on the books of the Corporation shall
be deemed the owner thereof as regards the Corporation, provided that whenever
any transfer of shares shall be made for collateral security, and not
absolutely, such fact, if known to the Secretary or to said transfer agent,
shall be so expressed in the entry of transfer.
SECTION 3. Addresses of Stockholders. Each stockholder shall designate
to the Secretary of the Corporation an address at which notices of meetings and
all other corporate notices may be served or mailed to him, and if any
stockholder shall fail to designate such address, corporate notices may be
served upon him by mail directed to him at his last known post office address as
it appears on the records of the Corporation.
SECTION 4. Lost, Stolen, Destroyed and Mutilated Certificates. To deal
with the eventuality of lost, stolen, destroyed and mutilated certificates of
stock the Board of Directors or any Committee constituted pursuant to Article IV
of these by-laws with power for the purpose may establish by appropriate
resolutions such rules and regulations as they deem expedient concerning the
issue to such holder uncertificated shares or, if requested by such holder, a
new certificate or certificates of stock, including, without limiting the
generality of the foregoing, such rules and regulations as they may deem
expedient with respect to the proof of loss, theft or destruction and the
surrender of mutilated certificates and the requirements as to the giving of a
bond or bonds to indemnify the Corporation against any claim which may be made
against it on account of the alleged loss, theft or destruction of any such
certificate. The holder of any stock of the Corporation shall immediately notify
the Corporation and/or the appropriate transfer agent of such stock of any loss,
theft, destruction or mutilation of the certificate therefor.
SECTION 5. Transfer Agent and Registrar: Regulations. The Corporation
shall, if and whenever the Board of Directors or any Committee constituted
pursuant to Article IV of these by-laws with power for the purpose shall so
determine, maintain one or more transfer offices or agencies, each in charge of
a transfer agent designated by the Board of Directors or by such Committee,
where the shares of the capital stock of the Corporation shall be directly
transferable, and also one or more registry offices, each in charge of a
registrar designated by the Board of Directors or by such Committee, where such
shares of stock shall be registered, and no certificate for shares of the
capital stock of the Corporation, in respect of which a registrar and transfer
agent shall have been designated, shall be valid unless countersigned by such
transfer agent and registered by such registrar. A firm may act at the same time
as both transfer agent and registrar of the Corporation. The Board of Directors
or any such Committee may also make such additional rules and regulations as it
may deem expedient concerning the issue, transfer and registration of
uncertificated shares or certificates for shares of the capital stock of the
Corporation.
SECTION 6. Fixing Record Date. The Board of Directors or any Committee
constituted pursuant to Article IV of these by-laws with power for the purpose
may fix, in advance, a date, not exceeding sixty days preceding the date of any
meeting of stockholders, or the date for the payment of any dividend, or the
date for the allotment of rights, or the date when any change or conversation or
exchange of capital stock shall go into effect, as a record date for the
determination of the stockholders entitled to notice of, and to vote at, any
such meeting or entitled to receive payment of any such dividend, or to any such
allotment of rights, or to exercise the rights in respect of any change,
conversation or exchange of the capital stock, and in each such case only such
stockholders as shall be stockholders of record on the date so fixed shall be
entitled to notice of, or to vote at, such meeting, or to receive payment of
such dividend, or to receive such allotment of rights, or to exercise such
rights, as the case may be, notwithstanding any transfer of any stock on the
books of the Corporation after any such record date as aforesaid.
SECTION 7. Examination of Books by Stockholders. The Board of Directors
or any Committee constituted pursuant to Article IV of these by-laws with power
for the purpose shall, subject to the laws of the State of Delaware, have power
to determine, from time to time, whether and to what extent and under what
conditions and regulations the accounts and books of the Corporation, or any of
them, shall be open to the inspection of the stockholders; and no stockholder
shall have any right to inspect any account, book or document of the
Corporation, except as conferred by the laws of the State of Delaware, unless
and until authorized so to do by resolution of the Board of Directors or any
Committee constituted pursuant to Article IV of these by-laws with power for the
purpose or of the stockholders of the Corporation.
ARTICLE VIII.
DIVIDENDS, SURPLUS, ETC.
Subject to the provisions of the Certificate of Incorporation and any
restrictions imposed by statute, the Board of Directors may declare dividends
from the surplus of the Corporation or from the net profits arising from its
business, whenever, and in such amounts as, in its opinion, the condition of the
affairs of the Corporation shall render advisable. If the date appointed for the
payment of any dividend shall in any year fall on a legal holiday then the
dividend payable on such date shall be payable on the next succeeding business
day. The Board of Directors in its discretion may from time to time set aside
from such surplus or net profits such sum or sums as it, in its absolute
discretion, may think proper as a working capital or as a reserve fund to meet
contingencies, or for the purpose of maintaining or increasing the property or
business of the Corporation, or for any other purpose it may think conducive to
the best interests of the Corporation. All such surplus or net profits, until
actually declared in dividends, or used and applied as aforesaid, shall be
deemed to have been so set aside by the Board for one or more of said purposes.
ARTICLE IX.
SEAL.
The corporate seal of the Corporation shall consist of a metallic
stamp, circular in form, bearing in its center the figures and word "1929,
Delaware", and at the outer edge the name of the Corporation.
ARTICLE X.
FISCAL YEAR.
The fiscal year of the Corporation shall begin on the first day of
January in each year.
ARTICLE XI.
AMENDMENTS.
All by-laws of the Corporation shall be subject to alteration or
repeal, and new by-laws not inconsistent with any provision of the Certificate
of Incorporation of the Corporation or any provision of law, may be made, either
by the affirmative vote of the holders of record of a majority of the
outstanding stock of the Corporation entitled to vote in respect thereof, given
at an annual meeting or at any special meeting or by the Board of Directors at
any regular or special meeting.
EXHIBIT 4(ii)
EXECUTION COPY
CREDIT AGREEMENT
dated as of December 20, 1999
among
CURTISS-WRIGHT CORPORATION
and
THE SUBSIDIARY BORROWERS PARTIES HERETO FROM TIME TO TIME,
as Borrowers,
THE LENDERS PARTIES HERETO FROM TIME TO TIME,
THE ISSUING BANKS REFERRED TO HEREIN
and
MELLON BANK, N.A.
as Agent
THE BANK OF NOVA SCOTIA
as Syndication Agent
and
PNC BANK, NATIONAL ASSOCIATION
as Documentation Agent
<PAGE>
-iv-
-i-
TABLE OF CONTENTS
Section Title Page
ARTICLE I DEFINITIONS; CONSTRUCTION..........................................1
1.01. Certain Definitions.................................................1
1.02. Construction.......................................................15
1.03. Accounting Principles..............................................16
ARTICLE II THE CREDITS......................................................16
2.01. Revolving Credit Loans.............................................16
2.02. Facility Fee; Reduction of the Revolving Credit Committed Amounts..18
2.03. Making of Loans....................................................19
2.04. Interest Rates.....................................................20
2.05. Conversion or Renewal of Interest Rate Options.....................23
2.06. Prepayments Generally..............................................24
2.07. Optional Prepayments...............................................25
2.08. Interest Payment Dates.............................................25
2.09. Pro Rata Treatment; Payments Generally.............................25
2.10. Additional Compensation in Certain Circumstances...................26
2.11. HLT Classification.................................................28
2.12. Taxes..............................................................29
2.13. Funding by Branch, Subsidiary or Affiliate.........................30
2.14. Multicurrency Payments.............................................31
ARTICLE III LETTERS OF CREDIT...............................................32
3.01. Letters of Credit..................................................32
3.02. Letter of Credit Fees..............................................33
3.03. Procedure for Issuance and Amendment of Letters of Credit..........34
3.04. Participating Interests............................................35
3.05. Drawings and Reimbursements........................................36
3.06. Obligations Absolute...............................................37
3.07. Increased Costs....................................................37
3.08. Further Assurances.................................................37
3.09. Letter of Credit Application.......................................37
3.10. Cash Collateral for Letters of Credit..............................37
3.11. Certain Provisions Relating To the Issuing Banks...................39
ARTICLE IV REPRESENTATIONS AND WARRANTIES...................................40
4.01. Due Incorporation, Etc.............................................40
4.02. Due Authorization, Etc.............................................40
4.03. Approvals..........................................................41
4.04. Execution; Binding Effect..........................................41
4.05. Financial Statements...............................................41
4.06. Litigation.........................................................42
4.07. Title to Property..................................................42
4.08. ERISA..............................................................42
4.09. Environmental Laws.................................................42
4.10. Absence of Undisclosed Liabilities.................................43
4.11. Accurate and Complete Disclosure...................................43
4.12. Margin Regulations.................................................43
4.13. Subsidiaries.......................................................44
4.14. Partnerships, etc..................................................44
4.15. Absence of Events of Default.......................................44
4.16. Insurance..........................................................44
4.17. Intellectual Property..............................................45
4.18. Taxes..............................................................45
4.19. Year 2000 Compliance...............................................45
ARTICLE V CONDITIONS OF LENDING.............................................45
5.01. Conditions to Making of Initial Loans and Issuance of Initial
Letter of Credit..................................................45
5.02. Conditions to All Loans............................................47
ARTICLE VI AFFIRMATIVE COVENANTS............................................48
6.01. Basic Reporting Requirements.......................................48
6.02. Inspection.........................................................50
6.03. Payment of Taxes, Etc..............................................50
6.04. Preservation of Corporate Existence, Etc...........................51
6.05. Compliance with Laws, Etc..........................................51
6.06. Maintenance of Insurance...........................................51
6.07. Notice of Environmental Claims.....................................51
6.09. Governmental Approvals and Filings.................................52
6.10. Maintenance of Properties..........................................52
6.11. Avoidance of Other Conflicts.......................................52
6.12. Financial Accounting Practices.....................................52
6.13. Use of Proceeds....................................................52
6.14. Continuation of or Change in Business..............................52
6.15. Consolidated Tax Return............................................53
6.16. Fiscal Year........................................................53
6.17. Year 2000 Compliance...............................................53
6.18. ERISA Compliance...................................................53
ARTICLE VII NEGATIVE COVENANTS..............................................54
7.03. Indebtedness.......................................................55
7.04. Restriction on Liens and Additional Indebtedness...................55
7.05. Amendment of Certain Documents.....................................56
7.06. Mergers; Acquisitions..............................................56
7.07. Limitation on Other Restrictions on Dividends by Subsidiaries, etc.56
7.08. Sale of Assets.....................................................57
7.09. Guaranties, Indemnities, Etc.......................................57
7.11. Sale-Leasebacks....................................................57
7.12. Leases.............................................................58
7.13. Affiliates.........................................................58
ARTICLE VIII EVENTS OF DEFAULT..............................................58
8.01. Events of Default..................................................58
8.02. Consequences of an Event of Default................................61
8.03. Judgment Currency..................................................61
ARTICLE IX THE AGENT........................................................62
9.01. Appointment........................................................62
9.02. General Nature of Agent's Duties...................................62
9.03. Exercise of Powers.................................................63
9.04. General Exculpatory Provisions.....................................63
9.05. Administration by the Agent and the Issuing Bank...................64
9.06. Lender Not Relying on Agent or Other Lenders.......................65
9.07. Indemnification....................................................65
9.08. Agent in its Individual Capacity...................................66
9.09. Holders of Notes...................................................66
9.10. Successor Agent....................................................66
9.11. Additional Agents..................................................67
9.12. Calculations.......................................................67
9.13. Agent's Fee........................................................67
9.14. Funding by Agent...................................................67
ARTICLE X MISCELLANEOUS.....................................................67
10.01. Holidays..........................................................67
10.02. Records...........................................................68
10.03. Amendments and Waivers............................................68
10.04. No Implied Waiver; Cumulative Remedies............................69
10.05. Notices...........................................................69
10.06. Expenses; Taxes; Indemnity........................................70
10.07. Severability......................................................71
10.08. Prior Understandings..............................................71
10.09. Duration; Survival................................................71
10.10. Counterparts......................................................72
10.11. Limitation on Payments............................................72
10.12. Set-Off...........................................................72
10.13. Sharing of Collections............................................72
10.14. Successors and Assigns; Participations; Assignments...............73
10.15. Governing Law; Submission to Jurisdiction; Limitation of
Liability.....................................................76
10.16. Confidentiality...................................................77
Exhibits
Exhibit A Form of Revolving Credit Note
Exhibit B Form of Opinion of Counsel
Exhibit C Form of Quarterly Compliance Certificate
Exhibit D Form of Transfer Supplement
Exhibit E Form of Curtiss-Wright Guaranty
Exhibit F Form of Subsidiary Guaranty
Schedules
Schedule 3.01 Outstanding Letters of Credit
Schedule 4.01 Due Incorporation, Etc.
Schedule 4.06 Litigation
Schedule 4.07 Title to Property
Schedule 4.09 Hazardous Waste
Schedule 4.10 Indebtedness
Schedule 4.13 Significant Subsidiaries
Schedule 4.14 Partnerships, Etc.
Schedule 7.02 Liens
Schedule 7.03 Indebtedness
Schedule 7.09 Guaranty Equivalents
Schedule 7.11 Leases
<PAGE>
-13-
CREDIT AGREEMENT
THIS CREDIT AGREEMENT (this "Agreement"), dated as of December
20, 1999, by and among CURTISS-WRIGHT CORPORATION, a Delaware corporation
("Curtiss-Wright"), the Subsidiary Borrowers (as defined below) party hereto
from time to time (collectively with Curtiss-Wright, the "Borrowers", and each
individually a "Borrower"), the lenders party hereto from time to time (the
"Lenders", as defined further below), the Issuing Banks referred to herein (the
"Issuing Banks") and MELLON BANK, N.A., a national banking association, as agent
for the Lenders and the Issuing Banks hereunder (in such capacity, together with
its successors in such capacity, the "Agent").
WHEREAS, the Borrowers have requested the Agent, the Lenders
and the Issuing Banks to enter into this Agreement and extend credit as herein
provided;
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants herein contained and intending to be legally bound hereby, the
parties hereto agree as follows:
ARTICLE I
DEFINITIONS; CONSTRUCTION
. In addition to other words and terms defined elsewhere in this Agreement, as
used herein the following words and terms shall have the following meanings,
respectively, unless the context hereof otherwise clearly requires:
"Account Party" shall have the meaning set forth in Section
3.01(b) hereof.
"Affected Lender" shall have the meaning set forth in Section
2.04(e) hereof.
"Affiliate" of a Borrower shall mean any Person which directly
or indirectly controls or is controlled by or is under common control
with a Borrower. For purposes of this definition "control" (including,
with correlative meanings, the terms "controlled by" and "under common
control with") means the possession, directly or indirectly, of the
power to direct or cause the direction of management policies, whether
through ownership of voting securities or by contract or otherwise.
"Alternative Funds" shall have the meaning set forth in
Section 2.04(f) hereof.
"Anniversary Date" shall mean each December 20 during the term
of this Agreement.
"Applicable Funding Rate" shall have the meaning set forth in
Section 2.10(b) hereof.
"Applicable Margin" shall have the meaning set forth in
Section 2.04(b) hereof.
"Assured Obligation" shall have the meaning set forth in the
definition of "Guaranty Equivalent" in this Section 1.01.
"Base Rate" shall have the meaning set forth in Section 2.04
(a)(i) hereof.
"Base Rate Option" shall have the meaning set forth in Section
2.04(a) hereof.
"Base Rate Portion" of any Loan or Loans shall mean at any
time the portion, including the whole, of such Loan or Loans bearing
interest at such time (i) under the Base Rate Option or (ii) in
accordance with Section 2.09(c)(ii) hereof. If no Loan or Loans is
specified, "Base Rate Portion" shall refer to the Base Rate Portion of
all Loans outstanding at such time.
"Business Day" shall mean any day other than a Saturday,
Sunday, public holiday under the laws of the Commonwealth of
Pennsylvania or the State of New York or other day on which banking
institutions are authorized or obligated to close in the city in which
the Agent's Office is located.
"Change of Control" shall mean that any Person or group of
Persons (as used in Sections 13 and 14 of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), and the rules and regulations
thereunder) shall have become the beneficial owner (as defined in Rules
13d-3 and 13d-5 promulgated by the Securities and Exchange Commission
(the "SEC") under the Exchange Act) of 50% or more of the combined
voting power of all the outstanding voting securities of
Curtiss-Wright; provided, that none of Unitrin Corporation, Argonaut
Insurance Co. or any of their respective Subsidiaries shall be deemed
to be a Person for purposes of this definition.
"Closing Date" shall mean the date of this Agreement.
"Code" means the Internal Revenue Code of 1986, as amended,
and any successor statute of similar import, and regulations
thereunder, in each case as in effect from time to time. References to
sections of the Code shall be construed also to refer to any successor
sections.
"Commitment" of a Lender shall mean the Revolving Credit
Commitment of such Lender.
"Commitment Percentage" of a Lender at any time shall mean the
Commitment Percentage for such Lender set forth below its name on the
signature page hereof, as such percentage may be adjusted pursuant to
Section 2.01(e) hereof, and subject to transfer to another Lender as
provided in Section 10.14 hereof.
"Consolidated EBIT" shall mean, with respect to Curtiss-Wright
and its consolidated Subsidiaries, calculated for each fiscal quarter
then ending, and the immediately preceding three fiscal quarters
(determined on a consolidated basis and in accordance with GAAP), the
sum of (a) Consolidated Net Income, plus (b) Consolidated Interest
Expense, plus (c) consolidated federal and state income tax expenses
for such period.
"Consolidated EBITDA" shall mean, with respect to
Curtiss-Wright and its consolidated Subsidiaries, calculated for each
fiscal quarter then ending, and the immediately preceding three fiscal
quarters (determined on a consolidated basis and in accordance with
GAAP), the sum of (a) Consolidated EBIT, plus (b) depreciation and
amortization of assets for such period (if subtracted from earnings in
calculating the same), plus (c) extraordinary losses for such period,
minus (d) extraordinary gains for such period.
"Consolidated Interest Expense" shall mean, with respect to
Curtiss-Wright and its consolidated Subsidiaries calculated for each
fiscal quarter then ending, and the immediately preceding three fiscal
quarters, interest expense (whether cash or non-cash) determined in
accordance with GAAP for the relevant period ended on such date,
including, in any event, interest expense with respect to Indebtedness
of Curtiss-Wright and its consolidated Subsidiaries, interest expense
for the relevant period that has been capitalized on the balance sheet
and interest expense with respect to any Deemed Debt.
"Consolidated Net Income" shall mean, for any period, the
consolidated net income (or deficit) of Curtiss-Wright and its
consolidated Subsidiaries for such period, determined in accordance
with GAAP.
"Consolidated Net Worth" of Curtiss-Wright and its
consolidated Subsidiaries, shall mean total shareholder's equity which
would appear as such on the consolidated balance sheet of
Curtiss-Wright, determined in accordance with GAAP.
"Controlled Group" means all members of a group of
corporations and all trades or businesses (whether or not incorporated)
under common control which, together with Curtiss-Wright or any of its
Subsidiaries, are treated as a single employer under Section 414 of the
Code.
"Corresponding Source of Funds" shall mean, in the case of any
Funding Segment of the Euro-Rate Portion, the proceeds of hypothetical
receipts by a Notional Euro-Rate Funding Office or by a Lender through
a Notional Euro-Rate Funding Office of one or more Dollar deposits in
the interbank eurodollar market at the beginning of the Euro-Rate
Funding Period corresponding to such Funding Segment having maturities
approximately equal to such Euro-Rate Funding Period and in an
aggregate amount approximately equal to such Lender's Pro Rata share of
such Funding Segment.
"Curtiss-Wright Guaranty" shall have the meaning set forth in
Section 5.01(o) hereof.
"Debt Instrument" shall have the meaning set forth in Section
8.01(e) hereof.
"Deemed Debt" shall mean the amount of indebtedness incurred
by Curtiss-Wright and its consolidated Subsidiaries and any special
purpose corporation or trust which is an Affiliate of Curtiss-Wright or
any of its Subsidiaries in connection with any accounts receivable
financing facility, or other financing vehicle which is designed to
provide Curtiss-Wright or any Subsidiary thereof with off-balance sheet
financing whether or not shown on the balance sheet of Curtiss-Wright
or such Subsidiary in accordance with GAAP to the extent not included
in the definition of Indebtedness. For purposes of determining the
amount of Deemed Debt incurred by any Person in connection with any
off-balance sheet financing transaction, all contingent obligations of
such Person shall be included as well as non-recourse indebtedness
incurred in connection with such transaction. Deemed Debt shall not
include operating leases.
"Deemed Guarantor" shall have the meaning set forth in the
definition of "Guaranty Equivalent" in this Section 1.01.
"Deemed Obligor" shall have the meaning set forth in the
definition of "Guaranty Equivalent" in this Section 1.01.
"Dollar," "Dollars" and the symbol "$" shall mean lawful money
of the United States of America.
"Dollar Equivalent Amount" of any Revolving Credit Loan shall
mean (a) with respect to a Revolving Credit Loan denominated in an
Other Currency, an amount equal to the amount of Dollars that the
amount of such Other Currency (equal to the principal amount of such
Revolving Credit Loan) could purchase at 12:00 p.m., noon, Pittsburgh
time, on the date of determination, based upon the quoted spot rates of
the Agent, at which its applicable branch or office offers to exchange
Dollars for such currency in the foreign exchange market and (b) with
respect to a Revolving Credit Loan denominated in US Currency, an
amount in Dollars equal to the principal amount of such Revolving
Credit Loan.
"Environmental Claim" shall have the meaning set forth in
Section 4.09 hereof.
"Environmental Permits" shall have the meaning set forth in
Section 4.09 hereof.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended, and any successor statute of similar import, and
regulations thereunder, in each case as in effect from time to time.
References to sections of ERISA shall be construed also to refer to any
successor sections.
"Euro" and "Euros" shall mean the lawful currency of the
participating member states of the European Union that adopt a single
currency in accordance with the Treaty establishing the European
Communities, as amended by the Treaty on European Union.
"Euro-Rate" shall have the meaning set forth in Section 2.04
(a)(ii) hereof.
"Euro-Rate Option" shall have the meaning set forth in Section
2.04(a)(ii) hereof.
"Euro-Rate Portion" of any Loan or Loans shall mean at any
time the portion, including the whole, of such Loan or Loans bearing
interest at any time under the Euro-Rate Option or at a rate calculated
by reference to the Euro-Rate under Section 2.09(c)(i) hereof. If no
Loan or Loans is specified, "Euro-Rate Portion" shall refer to the
Euro-Rate Portion of all Loans outstanding at such time.
"Euro-Rate Reserve Percentage" shall have the meaning set
forth in Section 2.04(a)(ii) hereof.
"Event of Default" shall mean any of the Events of Default
described in Section 8.01 hereof.
"Extension Request" shall have the meaning set forth in
Section 2.01(e) hereof.
"Facility Fee" shall have the meaning set forth in Section
2.02(a) hereof.
"Federal Funds Effective Rate" for any day shall mean the rate
per annum (rounded upward to the nearest 1/100 of 1%) determined by the
Agent (which determination shall be conclusive absent manifest error)
to be the rate per annum announced by the Federal Reserve Bank of New
York (or any successor) on such day as being the weighted average of
the rates on overnight Federal funds transactions arranged by Federal
funds brokers on the previous trading day, as computed and announced by
such Federal Reserve Bank (or any successor) in substantially the same
manner as such Federal Reserve Bank computes and announces the weighted
average it refers to as the "Federal Funds Effective Rate" as of the
date of this Agreement; provided, that if such Federal Reserve Bank (or
its successor) does not announce such rate on any day, the "Federal
Funds Effective Rate" for such day shall be the Federal Funds Effective
Rate for the last day on which such rate was announced.
"Funding Breakage Date" shall have the meaning set forth in
Section 2.10(b) hereof.
"Funding Breakage Indemnity" shall have the meaning set forth
in Section 2.10(b) hereof.
"Funding Periods" shall have the meaning set forth in Section
2.04(c) hereof.
"Funding Segment" of the Euro-Rate Portion of the Revolving
Credit Loans at any time shall mean the entire principal amount of such
Portion to which at the time in question there is applicable a
particular Funding Period beginning on a particular day and ending on a
particular day. (By definition, each such Portion is at all times
composed of an integral number of discrete Funding Segments and the sum
of the principal amounts of all Funding Segments of any such Portion at
any time equals the principal amount of such Portion at such time.)
"GAAP" shall have the meaning set forth in Section 1.03
hereof.
"Governmental Action" shall mean any approval, order, consent,
authorization, certificate, license, permit or validation of, or
exemption or other action by, or filing, recording or registration
with, or notice to, any Governmental Authority.
"Governmental Authority" shall mean any government or
political subdivision or any agency, authority, bureau, central bank,
commission, department or instrumentality of either, or any court,
tribunal, grand jury or arbitrator, in each case whether foreign or
domestic.
"Guaranty Equivalent": A Person (the "Deemed Guarantor") shall
be deemed to be subject to a Guaranty Equivalent in respect of any
indebtedness, obligation or liability (the "Assured Obligation") of
another Person (the "Deemed Obligor") if the Deemed Guarantor directly
or indirectly guarantees, becomes surety for, endorses, assumes, agrees
to indemnify the Deemed Obligor against, or otherwise agrees, becomes
or remains liable (contingently or otherwise) for, such Assured
Obligation. Without limitation, a Guaranty Equivalent shall be deemed
to exist if a Deemed Guarantor agrees, becomes or remains liable
(contingently or otherwise), directly or indirectly: (a) to purchase or
assume, or to supply funds for the payment, purchase or satisfaction
of, an Assured Obligation, (b) to make any loan, advance, capital
contribution or other investment in, or to purchase or lease any
property or services from, a Deemed Obligor (i) to maintain the
solvency of the Deemed Obligor, (ii) to enable the Deemed Obligor to
meet any other financial condition, (iii) to enable the Deemed Obligor
to satisfy any Assured Obligation or to make any Stock Payment or any
other payment, or (iv) to assure the holder of such Assured Obligation
against loss, (c) to purchase or lease property or services from the
Deemed Obligor regardless of the nondelivery of or failure to furnish
of such property or services, or (d) in respect of any other
transaction the effect of which is to assure the payment or performance
(or payment of damages or other remedy in the event of nonpayment or
nonperformance) of any Assured Obligation.
"Hazardous Materials" shall have the meaning set forth in
Section 4.09 hereof.
"HLT Classification" shall have the meaning set forth in
Section 2.11 hereof.
"Indebtedness" of a Person, at a particular date, shall mean,
without duplication, the following: (a) all indebtedness of such Person
for borrowed money or for the deferred purchase price of property; (b)
the face amount of all letters of credit (other than standby letters of
credit issued for the account of such Person in connection with bids on
proposed contracts by such Person) issued for the account of such
Person and, without duplication, all drafts drawn under all letters of
credit (including standby letters of credit); (c) all liabilities
secured by any Lien (other than Permitted Liens permitted under clause
(h) of the definition thereof) on any property owned by such Person, to
the extent attributable to such Person's interest in such property,
even though it has not assumed or become liable for the payment
thereof; (d) all Indebtedness of others as to which such Person is the
Deemed Guarantor under a Guaranty Equivalent; and (e) lease obligations
of such Person which have been, or which in accordance with GAAP,
should be capitalized.
"Indemnified Parties" shall mean the Agent, the Lenders, their
respective affiliates, and the directors, officers, employees,
attorneys and agents of each of the foregoing.
"Initial Revolving Credit Committed Amount" shall have the
meaning set forth in Section 2.01(a) hereof.
"Interest Coverage Ratio" shall mean, with respect to
Curtiss-Wright and its Consolidated Subsidiaries for any period, the
ratio of (a) Consolidated EBIT to (b) Consolidated Interest Expense for
the immediately preceding four quarter period ending on the date of
determination.
"Issuing Banks" shall have the meaning set forth in Section
3.01(b) hereof.
"Judgment Amount" shall have the meaning set forth in Section
8.03 hereof.
"Law" shall mean any law (including common law), constitution,
statute, treaty, convention, regulation, rule, ordinance, order,
injunction, writ, decree or award of any Governmental Authority.
"Lender" shall mean any of the Lenders listed on the signature
pages hereof, subject to the provisions of Section 10.14 hereof
pertaining to Persons becoming or ceasing to be Lenders.
"Letter of Credit" shall have the meaning set forth in Section
3.01(b) hereof.
"Letter of Credit Application" shall have the meaning set
forth in Section 3.03(a)(ii) hereof.
"Letter of Credit Collateral Account" shall have the meaning
set forth in Section 3.10(b) hereof.
"Letter of Credit Exposure" shall mean the aggregate Letter of
Credit Undrawn Availability for all outstanding Letters of Credit.
"Letter of Credit Facing Fee" shall have the meaning assigned
to that term in Section 3.02(b) hereof.
"Letter of Credit Fee" shall have the meaning set forth in
Section 3.02(a) hereof.
"Letter of Credit Obligations" shall mean at any particular
time all liabilities of the Borrowers with respect to Letters of
Credit, whether or not such liability is contingent, including (without
duplication) the sum of (a) the aggregate Letter of Credit Undrawn
Availability of all Letters of Credit then outstanding plus (b) the
aggregate amount of all unpaid Letter of Credit Reimbursement
Obligations.
"Letter of Credit Participating Interest" shall have the
meaning set forth in Section 3.04(a) hereof.
"Letter of Credit Reimbursement Obligations" shall mean,
collectively, (a) the obligations of the Borrowers to reimburse the
Issuing Bank in accordance with the terms of this Agreement and the
related Letter of Credit Application for any payments made by the
Issuing Bank under any Letter of Credit, and (b) all fees and expenses
payable to the Agent for the account of the Lenders in respect of any
Letter of Credit.
"Letter of Credit Undrawn Availability" shall mean for each
Letter of Credit, the undrawn face amount of such Letter of Credit.
"Leverage Ratio" shall mean, with respect to Curtiss-Wright
and its consolidated Subsidiaries for any fiscal period, the ratio of
(a) Indebtedness of Curtiss-Wright and its consolidated Subsidiaries
plus any Deemed Debt as of the date of determination, to (b)
Consolidated EBITDA plus, in the event of any acquisition by
Curtiss-Wright, with respect to the acquired company, the sum of (i)
the net earnings (or loss), plus (ii) interest expense for such period,
plus (iii) consolidated federal and state income tax expenses for such
period, plus (iv) depreciation and amortization of assets for such
period (if subtracted from earnings in calculating the same), plus (v)
extraordinary losses for such period, minus (vi) extraordinary gains
for such period, with all of the foregoing amounts to be calculated for
the fiscal period then ending, and the immediately preceding three
fiscal quarters (determined on a consolidated basis in accordance with
GAAP).
"Lien" shall mean any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind (including any agreement to
give any of the foregoing, any additional sale or other title retention
agreement, any lease in the nature thereof, and the filing of or
agreement to give any financing statement under the Uniform Commercial
Code of any jurisdiction).
"Loan" shall mean any loan by a Lender to any Borrower under
this Agreement, and "Loans" shall mean all Loans made by the Lenders
under this Agreement.
"Loan Documents" shall mean this Agreement, the Notes, the
Curtiss-Wright Guaranty, the Subsidiary Guarantees and the Transfer
Supplements, and all other agreements and instruments extending,
renewing, refinancing or refunding any indebtedness, obligation or
liability arising under any of the foregoing, in each case as the same
may be amended, modified or supplemented from time to time hereafter.
"London Business Day" shall mean a day for dealing in deposits
in Dollars by and among banks in the London interbank market and which
is a Business Day.
"London Office", when used in connection with the Agent, shall
mean its office located at Princess House, One Suffolk Lane, London
EC4ROAN, or at such other office or offices of the Agent or any branch,
subsidiary or affiliate thereof as may be designated in writing from
time to time by the Agent to the Borrowers.
"Loss" shall have the meaning set forth in Section 8.03
hereof.
"Material Adverse Effect" shall mean (a) a material adverse
effect on the business, operations, condition (financial or otherwise)
or prospects of Curtiss-Wright and its Subsidiaries taken as a whole or
(b) a material adverse effect on the ability of Curtiss-Wright to
perform or comply with any of the terms and conditions of any Loan
Document.
"Mellon" shall mean Mellon Bank, N.A. in its individual
capacity.
"Multiemployer Plan" means a Plan maintained pursuant to a
collective bargaining agreement which is subject to Title IV of ERISA
to which Curtiss-Wright or any member of the Controlled Group is a
party to which more than one employer is obligated to make
contributions.
"Nonextending Lender" shall have the meaning set forth in
Section 2.01(e) hereof.
"Note" or "Notes" shall mean the Revolving Credit Notes of the
Borrowers executed and delivered under this Agreement, together with
all extensions, renewals, refinancings or refundings of any thereof in
whole or part.
"Notional Euro-Rate Funding Office" shall have the meaning set
forth in Section 2.13(a) hereof.
"Obligations" shall mean all indebtedness, obligations and
liabilities of any Borrower to any Lender, any Issuing Bank or the
Agent from time to time arising under or in connection with or related
to or evidenced by this Agreement or any other Loan Document, and all
extensions, renewals or refinancings thereof, whether such
indebtedness, obligations or liabilities are direct or indirect,
otherwise secured or unsecured, joint or several, absolute or
contingent, due or to become due, whether for payment or performance,
now existing or hereafter arising. Without limitation of the foregoing,
such indebtedness, obligations and liabilities include the principal
amount of Loans, accrued but unpaid interest, Letter of Credit
Obligations, unpaid fees, indemnities or expenses under or in
connection with this Agreement or any other Loan Document, and all
extensions, renewals and refinancings thereof, whether or not such
Loans were made in compliance with the terms and conditions of this
Agreement or in excess of the obligation of the Lenders to lend.
Obligations shall remain Obligations notwithstanding any assignment or
transfer or any subsequent assignment or transfer of any of the
Obligations or any interest therein.
"Office," when used in connection with the Agent, shall mean
its office located at One Mellon Bank Center, Pittsburgh, Pennsylvania
15258, or at such other office or offices of the Agent or any branch,
subsidiary or affiliate thereof as may be designated in writing from
time to time by the Agent to the Borrowers.
"Option" shall mean the Base Rate Option or the Euro-Rate
Option, as the case may be.
"Original Credit Agreements" shall mean that certain Credit
Agreement dated as of October 29, 1991, as amended, among
Curtiss-Wright, the Lenders party thereto, the Issuing Banks referred
to therein and the Agent, and that certain Short Term Credit Agreement
dated as of October 29, 1994, as amended, among Curtiss-Wright, the
Lenders party thereto and the Agent.
"Original Due Date" shall have the meaning set forth in
Section 8.03 hereof.
"Other Currency" shall mean Canadian Dollars, British Pounds,
Swiss Francs, Belgium Francs, French Francs, Italian Lira, German
Marks, Singapore Dollars, Dutch Guilders, Danish Krone, Euros and any
freely available currency that is freely transferable and freely
convertible into Dollars and requested by any Borrower and acceptable
to all of the Lenders and to the Agent.
"Outstanding Letter of Credit" shall have the meaning set
forth in Section 3.01(a) hereof.
"Participants" shall have the meaning set forth in Section
10.14(b) hereof.
"PBGC" means the Pension Benefit Guaranty Corporation
established under Title IV of ERISA or any other governmental agency,
department or instrumentality succeeding to the functions of said
corporation.
"Permitted Liens" shall mean (a) Liens arising from taxes,
assessments, charges, levies or claims that are not yet due or that
remain payable without penalty, (b) deposits or pledges of cash to
secure workmen's compensation, unemployment insurance, old age benefits
or other social security obligations, or in connection with or to
secure the performance of bids, tenders, trade contracts or leases, or
to secure statutory obligations, or stay, surety or appeal bonds, or
other pledges or deposits of cash of like nature and all in the
ordinary course of business, (c) Liens permitted by Section 7.02(b)
hereof, (d) Liens in favor of each of the Agent and the Lenders, (e)
Liens to secure Indebtedness existing on the date hereof, (f) with
respect to real property located in the State of New Jersey,
impediments to marketability arising by reason of the New Jersey
Environmental Cleanup Responsibility Act, (g) easements, rights of way
and other exceptions to title which do not materially affect any
Borrower's right of enjoyment of its properties, (h) Liens in favor of
customers for amounts paid to any Borrower or any Subsidiary of any
Borrower as progress payments, (i) Liens to secure non-recourse
Indebtedness, and (j) Liens to secure Deemed Debt.
"Person" shall mean an individual, corporation, limited
liability company, partnership, trust, unincorporated association,
joint venture, joint-stock company, Governmental Authority or any other
entity.
"Plan" means an employee pension benefit plan as defined in
Section 3(2) of ERISA, as to which Curtiss-Wright or any member of the
Controlled Group my have any liability.
"Portion" shall mean the Base Rate Portion or the Euro-Rate
Portion, as the case may be.
"Potential Default" shall mean any event or condition which
with notice or passage of time, or both, would constitute an Event of
Default.
"Prime Rate" as used herein, shall mean the interest rate per
annum announced from time to time by Mellon Bank, N.A. as its prime
rate, which rate may be greater or less than other interest rates
charged by Mellon Bank, N.A. to other borrowers and is not solely based
or dependent upon the interest rate which Mellon Bank, N.A. may charge
any particular borrower or class of borrowers.
"Pro Rata" shall mean from or to each Lender in proportion to
its Commitment Percentage.
"Purchase Money Security Interest" shall have the meaning set
forth in Section 7.02(b) hereof.
"Purchasing Lender" shall have the meaning set forth in
Section 10.14(c) hereof.
"Register" shall have the meaning set forth in Section
10.14(d) hereof.
"Regular Payment Date" shall mean the last day of each
December, March, June and September after the date hereof.
"Regulation T" means Regulation T of the Board of Governors of
the Federal Reserve System as from time to time in effect and shall
include any successor or other regulation or official interpretation of
such Board of Governors relating to the extension of credit by
securities brokers and dealers for the purpose of purchasing or
carrying margin stocks applicable to such Persons.
"Regulation U" means Regulation U of the Board of Governors of
the Federal Reserve System as from time to time in effect and shall
include any successor or other regulation or official interpretation of
such Board of Governors relating to the extension of credit by banks
for the purpose of purchasing or carrying margin stocks applicable to
such Persons.
"Regulation X" means Regulation X of the Board of Governors of
the Federal Reserve System as from time to time in effect and shall
include any successor or other regulation or official interpretation of
such Board of Governors relating to the extension of credit by banks
for the purpose of purchasing or carrying margin stocks applicable to
such Persons.
"Replacement Lender" shall have the meaning set forth in
Section 2.01(e) hereof.
"Reportable Event" means a reportable event as defined in
Section 4043(a) of ERISA and the regulations issued under such section,
with respect to a Plan, excluding, however, such events as to which the
PBGC has by regulation unconditionally or conditionally waived the
requirement of Section 4043(a) of ERISA that it be notified within 30
days of the occurrence of such event; provided, that a failure to meet
the minimum funding standard of Section 412 of the Code and of Section
302 of ERISA shall be a Reportable Event regardless of the issuance of
any such waiver of the notice requirement in accordance with either
Section 4043(a) of ERISA or Section 412(d) of the Code.
"Required Lenders" shall mean, as of any date, Lenders which
have Commitments constituting, in the aggregate, at least 51% of the
total Commitments of all the Lenders.
"Responsible Officer" shall mean the Chairman, President, any
Vice President, the Controller or the Treasurer of any Borrower.
"Revolving Credit Commitment" shall have the meaning set forth
in Section 2.01(a) hereof.
"Revolving Credit Committed Amount" shall have the meaning set
forth in Section 2.01(a) hereof.
"Revolving Credit Extensions of Credit" shall mean, at any
particular time, the sum of (i) the aggregate unpaid principal amount
of Revolving Credit Loans then outstanding and (ii) the aggregate
Letter of Credit Obligations then outstanding.
"Revolving Credit Loans" shall have the meaning set forth in
Section 2.01(a) hereof.
"Revolving Credit Maturity Date" shall mean, initially,
December 20, 2004, as such date may be extended by the Lenders pursuant
to Section 2.01(e) hereof.
"Revolving Credit Notes" shall mean the promissory notes of
the Borrowers executed and delivered under Section 2.01(c) hereof and
any promissory note issued in substitution therefor pursuant to
Sections 10.14(c) and 2.01(f) or any other provisions hereof, together
with all extensions, renewals, refinancings or refundings thereof in
whole or part.
"Short Term Commitments" shall mean the aggregate "Revolving
Credit Commitments" of the "Lenders" (each as defined in the Short Term
Credit Agreement) under the Short Term Credit Agreement.
"Short Term Credit Agreement" shall mean that certain Short
Term Credit Agreement dated the date hereof, by and among the
Borrowers, the Lenders named therein and Mellon Bank, N.A., as the
Agent, as amended.
"Significant Subsidiary" shall mean Curtiss-Wright Flight
Systems, Inc., Curtiss-Wright Flow Control Corporation, Metal
Improvement Company, Inc., and any other Subsidiary of Curtiss-Wright
(a) which, together with its Subsidiaries (determined on a consolidated
basis), has assets with a book value greater than or equal to 20% of
the total assets of Curtiss-Wright and its Subsidiaries (determined on
a consolidated basis) as of the end of the most recently completed
fiscal quarter for which financial information is available), or (b)
which, together with its Subsidiaries (determined on a consolidated
basis), has greater than 20% of the net revenues of Curtiss-Wright and
its Subsidiaries (determined on a consolidated basis) for the most
recent four fiscal quarters for which financial information is
available), all determined in accordance with GAAP.
"Single Employer Plan" means a Plan subject to Title IV of
ERISA maintained by any member of the Controlled Group for employees of
any member of the Controlled Group, other than a Multiemployer Plan.
"Standard Notice" shall mean an irrevocable notice provided to
the Agent on a Business Day which is
(a) provided on the same Business Day in the case of
selection of, conversion to or renewal of the Base Rate Option
or prepayment of any Base Rate Portion; and
(b) provided at least four London Business Days in
advance in the case of selection of, conversion to or renewal
of the Euro-Rate Option or prepayment of any Euro-Rate
Portion.
Standard Notice must be provided no later than 10:00 a.m., Pittsburgh
time, on the last day permitted for such notice.
"Stock Payments" shall mean any dividend, distribution or
payment of any nature (whether in cash, securities, or other property)
on account of or in respect of any shares of the capital stock or other
equity interests (or warrants, options or rights therefor) of such
Person, including but not limited to any payment on account of the
purchase, redemption, retirement, defeasance or acquisition of any
shares of the capital stock or other equity interests (or warrants,
options or rights therefor) of such Person, in each case regardless of
whether required by the terms of such capital stock or other equity
interest (or warrants, options or rights) or any other agreement or
instrument.
"Subsidiary" of a Person means (a) any corporation more than
50% of the outstanding securities having ordinary voting power of which
shall at the time be owned or controlled, directly or indirectly, by
such Person or (b) any partnership, association, joint venture or
similar business organization more than 50% of the ownership interests
having ordinary voting power of which shall at the time be so owned or
controlled.
"Subsidiary Borrower" shall mean any of the following
Subsidiaries of Curtiss-Wright that is (a) a party to this Agreement or
(b) has executed and delivered to the Agent (i) a Revolving Credit
Note, and (ii) a joinder to this Agreement, in form and substance
satisfactory to the Agent: Curtiss-Wright Flight Systems, Inc., a
Delaware corporation; Metal Improvement Company, Inc., a Delaware
corporation; Curtiss-Wright Flow Control Corporation, a New York
corporation; Curtiss-Wright Flow Control Service Corporation, a
Delaware corporation; Curtiss-Wright Foreign Sales Corp., a Barbados
corporation; Curtiss-Wright Flight Systems Europe A/S, a Danish
corporation and Curtiss-Wright Antriebstechnik GmbH, a Swiss
corporation.
"Subsidiary Guarantors" shall mean the Subsidiary Borrowers
and Significant Subsidiaries from time to time party to the Subsidiary
Guarantees.
"Subsidiary Guarantees" shall have the meaning set forth in
Section 5.01(o) hereof.
"Substantial Portion" means, with respect to the properties of
Curtiss-Wright and its consolidated Subsidiaries, property which (a)
represents more than 20% of the consolidated assets of Curtiss-Wright
and its Subsidiaries, as would be shown in the consolidated financial
statements of Curtiss-Wright and its Subsidiaries as at the end of the
fiscal quarter next preceding the date on which such determination is
made, or (b) is responsible for more than 10% of the consolidated net
revenues or of the Consolidated Net Income of Curtiss-Wright and its
Subsidiaries for the 12-month period ending as of the end of the fiscal
quarter next preceding the date of determination. For purposes of the
calculation of Consolidated Net Income hereunder, there shall be
excluded therefrom any extraordinary gains during such period and there
shall be included therein any extraordinary losses during such period.
"Taxes" shall have the meaning set forth in Section 2.12(a)
hereof.
"Termination Event" means, with respect to a Plan which is
subject to Title IV of ERISA, (a) a Reportable Event, (b) the
withdrawal of any member of the Controlled Group from such Plan during
a plan year in which such member of the Controlled Group was a
"substantial employer" as defined in Section 4001(a)(2) of ERISA or was
deemed such under Section 4068(f) of ERISA, (c) the termination of such
Plan, the filing of a notice of intent to terminate such Plan or the
treatment of an amendment of such Plan as a termination under Section
4041 of ERISA, (d) the institution by the PBGC of proceedings to
terminate such Plan or (e) any event or condition which could
reasonably be expected to constitute grounds under Section 4042 of
ERISA for the termination of or appointment of a trustee to administer,
such Plan.
"Transfer Effective Date" shall have the meaning set forth in
the applicable Transfer Supplement.
"Transfer Supplement" shall have the meaning set forth in
Section 10.14(c) hereof.
"Unfunded Liabilities" means the amount (if any) by which the
present value of all vested and unvested accrued benefits under all
Single Employer Plans exceeds the fair market value of all such Plan
assets allocable to such benefits, all determined as of the then most
recent valuation date for such Plans using PBGC actuarial assumptions
for single employer plan terminations.
"US Currency" shall mean Dollars.
"Year 2000 Problem" shall mean any significant risk that
computer hardware, software or equipment containing embedded microchips
of any Borrower or any of its Subsidiaries which is essential to its
business or operations will not, in the case of dates or time periods
occurring after December 31, 1999, function at least as effectively and
reliably as in the case of times or time periods occurring before
January 1, 2000, including the making of accurate leap year
calculations.
. Unless the context of this Agreement otherwise clearly requires, references to
the plural include the singular, the singular the plural and the part the whole;
"or" has the inclusive meaning represented by the phrase "and/or"; and
"property" includes all properties and assets of any kind or nature, tangible or
intangible, real, personal or mixed. References in this Agreement to
"determination" (and similar terms) by the Agent or by any Lender include good
faith estimates by the Agent or by any Lender (in the case of quantitative
determinations) and good faith beliefs by the Agent or by any Lender (in the
case of qualitative determinations). The words "hereof," "herein," "hereunder"
and similar terms in this Agreement refer to this Agreement as a whole and not
to any particular provision of this Agreement. The section and other headings
contained in this Agreement and the Table of Contents preceding this Agreement
are for reference purposes only and shall not control or affect the construction
of this Agreement or the interpretation thereof in any respect. Section,
subsection and exhibit references are to this Agreement unless otherwise
specified.
. 1.03. Accounting Principles
(a) As used herein, "GAAP" shall mean generally accepted
accounting principles in the United States, applied on a basis consistent with
the principles used in preparing Curtiss-Wright's consolidated financial
statements as of December 31, 1998 and for the fiscal year then ended, as
referred to in Section 4.05 hereof, together with such changes in GAAP as may be
adopted from time to time which, in the good faith judgment of the Agent, do not
have a material adverse effect on Curtiss-Wright's compliance with the covenants
contained in this Agreement.
(b) Except as otherwise provided in this Agreement, all
computations and determinations as to accounting or financial matters shall be
made, and all financial statements to be delivered pursuant to this Agreement
shall be prepared, in accordance with GAAP (including principles of
consolidation where appropriate), and all accounting or financial terms shall
have the meanings ascribed to such terms by GAAP.
(c) If and to the extent that the financial statements
generally prepared by Curtiss-Wright apply accounting principles other than
GAAP, all financial statements referred to in this Agreement or any other Loan
Document shall be delivered in duplicate, one set based on the accounting
principles then generally applied by Curtiss-Wright and one set based on GAAP.
To the extent this Agreement or such other Loan Document requires financial
statements to be accompanied by an opinion of independent accountants, each set
of financial statements shall be accompanied by such an opinion.
ARTICLE II
THE CREDITS
. 2.01. Revolving Credit Loans
(a) Revolving Credit Commitments. Subject to the terms and
conditions and relying upon the representations and warranties herein set forth,
each Lender, severally and not jointly, agrees (such agreement being herein
called such Lender's "Revolving Credit Commitment") to make loans in either US
Currency or in an Other Currency (the "Revolving Credit Loans") to one or more
Borrowers at any time or from time to time on or after the date hereof and to
but not including the Revolving Credit Maturity Date.
A Lender shall have no obligation to make any Revolving Credit
Loan to the extent that the aggregate principal amount of such Lender's Pro Rata
share of the total Revolving Credit Extensions of Credit at any time outstanding
would exceed such Lender's Revolving Credit Committed Amount at such time. Each
Lender's "Revolving Credit Committed Amount" at any time shall be equal to the
amount set forth as its "Initial Revolving Credit Committed Amount" below its
name on the signature pages hereof, as either such amount may have been reduced
under Section 2.02 hereof at such time, increased under Section 2.01(f), and
subject to transfer to another Lender as provided in Section 10.14 hereof.
(b) Nature of Credit. Within the limits of time and amount set
forth in this Section 2.01, and subject to the provisions of this Agreement, the
Borrowers may borrow, repay and reborrow Revolving Credit Loans hereunder.
(c) Revolving Credit Notes. The obligations of each Borrower
to repay the unpaid principal amount of the Revolving Credit Loans made to them
by each Lender and to pay interest thereon shall be evidenced in part by
promissory notes of each such Borrower, one to each Lender, dated the Closing
Date (the "Revolving Credit Notes") in substantially the form attached hereto as
Exhibit A, with the blanks appropriately filled, payable to the order of such
Lender in a face amount equal to such Lender's Initial Revolving Credit
Committed Amount.
(d) Maturity. To the extent not due and payable earlier, the
Revolving Credit Loans shall be due and payable on the Revolving Credit Maturity
Date.
(e) Extension of Revolving Credit Maturity Date. The Revolving
Credit Maturity Date may be extended for successive one year periods at the
request of Curtiss-Wright with the express consent of each Lender as provided
below. Not later than the date 90 days prior to each Anniversary Date,
Curtiss-Wright shall, at its option, in a written notice to the Agent request
(an "Extension Request") that the Revolving Credit Maturity Date be extended for
a period of one year. The Agent shall promptly inform the Lenders of such
Extension Request. Each Lender that agrees with such Extension Request shall
deliver to the Agent its express written consent thereto no later than 60 days
prior to such Anniversary Date. If (i) any Lender notifies the Agent in writing
on or before the 60th day prior to such Anniversary Date that it will not
consent to such Extension Request or (ii) all of the Lenders have not in writing
expressly consented to any such Extension Request as provided in the preceding
sentence, then the Agent shall immediately notify Curtiss-Wright and
Curtiss-Wright, at its option, may (x) withdraw the Extension Request, or (y)
replace each Lender which has not agreed to such Extension Request (a
"Nonextending Lender") with another commercial lending institution reasonably
satisfactory to the Agent (a "Replacement Lender") by giving notice (not later
than the date 20 days prior to such Anniversary Date) of the name of such
Replacement Lender to the Agent. Unless the Agent shall object to the identity
of such proposed Replacement Lender prior to the date 10 days prior to such
Anniversary Date, upon notice from the Agent, each Nonextending Lender shall
promptly (but in no event later than such Anniversary Date) assign all of its
interests hereunder to such Replacement Lender in accordance with the provisions
of Section 10.14(c) hereof. If, prior to such Anniversary Date some, but not
all, of the Lenders have agreed to such Extension Request, and each Nonextending
Lender has not been replaced by Curtiss-Wright in accordance with the terms of
this Section 2.01(e), the Revolving Credit Maturity Date shall be extended in
accordance with such Extension Request; provided, however, that on the original
Revolving Credit Maturity Date (as such date may have been previously extended),
the Commitment of each Nonextending Lender shall be terminated, the Borrowers
shall pay to the Agent for the account of such Nonextending Lender such
Nonextending Lender's Pro Rata share of the principal of and interest on all
outstanding Revolving Credit Loans and Letter of Credit Reimbursement
Obligations, and the total Revolving Credit Commitment shall be irrevocably
reduced by an amount equal to the aggregate Commitments of all Nonextending
Lenders. If all Lenders consent to any such Extension Request (or, if any
Nonextending Lenders are replaced in accordance with this Section 2.01(e)), then
as of 5:00 p.m. Pittsburgh time on the Anniversary Date, the Revolving Credit
Maturity Date shall be deemed to have been extended for, and shall be the date,
one year after the then effective Revolving Credit Maturity Date (as such date
may have been previously extended pursuant to this Section 201(e)).
(f) Increase in Commitments. Upon the written request of
Curtiss-Wright, if approved in writing by the Required Lenders (which must
include the Agent), the Commitments may be increased by an aggregate amount of
$25,000,000 less the amount, if any, by which the Short Term Commitments may
have been increased pursuant to Section 2.01(e) of the Short Term Credit
Agreement; provided, that no Lender's Revolving Credit Committed Amount shall be
increased without such Lender's approval. The Lenders' Revolving Credit
Committed Amounts shall be increased on a pro rata basis among the Lenders
approving the increase in Commitments. The increase in Commitments shall be
subject to the Agent's receipt, for each Lender, of substitute Notes, duly
executed by each Borrower, reflecting the amount of such Lender's Revolving
Credit Committed Amount after such increase in the Commitments.
. 2.02. Facility Fee; Reduction of the Revolving Credit
Committed Amounts
(a) Facility Fee. Curtiss-Wright shall pay to the Agent for
the account of each Lender a facility fee (the "Facility Fee") equal to the
facility fee percentage determined from the chart set forth below based on the
Leverage Ratio, as determined quarterly based upon the financial statements
delivered by Curtiss-Wright pursuant to this Agreement, with such Facility Fee
to be effective, with respect to calculations based upon the quarterly unaudited
financial statements delivered pursuant to Section 6.01(b) hereof, as of the
first day of the quarter immediately following the quarter for which such
financial statements are delivered:
- ---------------------------- ----------------------------------
Leverage Ratio Facility Fee Percentage
- ---------------------------- ----------------------------------
- ---------------------------- ----------------------------------
>2.5 0.35%
- ---------------------------- ----------------------------------
- ---------------------------- ----------------------------------
>1.5 and < 2.5 0.30%
-
- ---------------------------- ----------------------------------
- ---------------------------- ----------------------------------
< 1.5 0.20%
- -
- ---------------------------- ----------------------------------
for each day from and including the date hereof to but not including the
Revolving Credit Maturity Date, on the amount (not less than zero) equal to such
Lender's Revolving Credit Committed Amount on such day. Such Facility Fee shall
be due and payable for the preceding period for which such fee has not been paid
(x) on each Regular Payment Date, (y) on the date of each reduction of the
Revolving Credit Committed Amounts (whether optional or mandatory) on the amount
so reduced and (z) on the Revolving Credit Maturity Date.
(b) Reduction of the Revolving Credit Committed Amounts.
Curtiss-Wright may at any time or from time to time reduce Pro Rata the
Revolving Credit Committed Amounts of the Lenders to an aggregate amount (which
may be zero) not less than the Dollar Equivalent Amount sum of the unpaid
principal amount of the Revolving Credit Loans then outstanding plus the
principal amount of all Revolving Credit Loans not yet made as to which notice
has been given by a Borrower under Section 2.03 hereof. Any reduction of the
Revolving Credit Committed Amounts shall be in an aggregate amount which is a
minimum amount of $5,000,000 and integral multiples of $500,000 thereof.
Reduction of the Revolving Credit Committed Amounts shall be made by providing
not less than 30 days' notice (which notice shall be irrevocable) to such effect
to the Agent. After the date specified in such notice the Facility Fee shall be
calculated based upon the Revolving Credit Committed Amounts as so reduced. Upon
reduction of the Revolving Credit Committed Amounts to zero, payment in full of
all Obligations and expiration or termination of all outstanding Letters of
Credit, this Agreement shall be terminated.
. Whenever a Borrower desires that the Lenders make Revolving Credit Loans, such
Borrower shall provide Standard Notice to the Agent setting forth the following
information:
(a) The currency, which shall be either US Currency or an
Other Currency, in which such Revolving Credit Loans are to be made;
(b) The party making the borrowing thereunder;
(c) The date, which shall be a Business Day, on which such
proposed Loans are to be made;
(d) The aggregate principal amount of such proposed Loans,
which shall be the sum of the principal amounts selected pursuant to clause (e)
of this Section 2.03;
(e) The interest rate Option or Options selected in accordance
with Section 2.04(a) hereof and the principal amounts selected in accordance
with Section 2.04(d) hereof of the Base Rate Portion and each Funding Segment of
the Euro-Rate Portion, as the case may be, of such proposed Loans; and
(f) With respect to each such Funding Segment of such proposed
Loans, the Funding Period to apply to such Funding Segment, selected in
accordance with Section 2.04(c) hereof.
Standard Notice having been so provided, the Agent shall promptly notify each
Lender of the information contained therein and of the amount of such Lender's
Loan. Unless any applicable condition specified in Article V hereof has not been
satisfied, on the date specified in such Standard Notice each Lender shall make
the proceeds of its Loan available to the Agent (a) with respect to a Loan
denominated in US Currency, at the Agent's Office, no later than 12:00 o'clock
Noon, Pittsburgh time, in funds immediately available at such Office, and (b)
with respect to a Loan denominated in an Other Currency, at the Agent's London
Office, no later than 12:00 o'clock Noon, London time, in funds immediately
available at such London Office. The Agent will make the funds so received
available to the applicable Borrower in funds immediately available at the
Agent's Office or London Office, as the case may be.
. 2.04. Interest Rates
(a) Optional Bases of Borrowing. The unpaid principal amount
of the Loans shall bear interest for each day until due on one or more bases
selected by the applicable Borrower from among the interest rate Options set
forth below. Subject to the provisions of this Agreement the Borrowers may
select different options to apply simultaneously to different Portions of the
Loans and may select different Funding Segments to apply simultaneously to
different parts of the Euro-Rate Portion of the Loans. The aggregate number of
Funding Segments applicable to the Euro-Rate Portion of the Revolving Credit
Loans at any time shall not exceed ten without the approval of the Agent.
(i) Base Rate Option: A rate per annum (computed on the basis
of a year of 365 or 366 days, as the case may be, and actual days
elapsed) for each day equal to the Base Rate for such day. The "Base
Rate" for any day shall mean the greater of (A) the Prime Rate for such
day or (B) 0.50% plus the Federal Funds Effective Rate for such day,
such interest rate to change automatically from time to time effective
as of the effective date of each change in the Prime Rate or the
Federal Funds Effective Rate.
(ii) Euro-Rate Option: A rate per annum (based on a year of
360 days and actual days elapsed) for each day equal to the Euro-Rate
for such day plus the Applicable Margin for such day. "Euro-Rate" for
any day, as used herein, shall mean for each Funding Segment of the
Euro-Rate Portion corresponding to a proposed or existing Euro-Rate
Funding Period the rate per annum determined by the Agent by dividing
(the resulting quotient to be rounded upward to the nearest 1/100 of
1%) (A) the rate of interest (which shall be the same for each day in
such Euro-Rate Funding Period) determined in good faith by the Agent in
accordance with its usual procedures (which determination shall be
conclusive absent manifest error) to be the average of the rates per
annum for deposits in US Currency or any Other Currency, as applicable,
offered to major money center banks in the London interbank market at
approximately 11:00 a.m., London time, two London Business Days prior
to the first day of such Euro-Rate Funding Period for delivery on the
first day of such Euro-Rate Funding Period in amounts comparable to
such Funding Segment and having maturities comparable to such Euro-Rate
Funding Period by (B) a number equal to
1.00 minus the Euro-Rate Reserve Percentage.
The "Euro-Rate" may also be expressed by the following formula:
[average of the rates offered to major money ]
[center banks in the London interbank market ]
Euro-Rate = [determined by the Agent per subsection (A) ] ]
[1.00 - Euro-Rate Reserve Percentage ]
"Euro-Rate Reserve Percentage" for any day shall mean the
percentage (expressed as a decimal, rounded upward to the nearest 1/100
of 1%), as determined in good faith by the Agent (which determination
shall be conclusive absent manifest error), which is in effect on such
day as prescribed by the Board of Governors of the Federal Reserve
System (or any successor) representing the maximum reserve requirement
(including, without limitation, supplemental, marginal and emergency
reserve requirements) with respect to eurocurrency funding (currently
referred to as "Eurocurrency liabilities") of a member bank in such
System. The Euro-Rate shall be adjusted automatically as of the
effective date of each change in the Euro-Rate Reserve Percentage. The
Euro-Rate Option shall be calculated in accordance with the foregoing
whether or not any Lender is actually required to hold reserves in
connection with its eurocurrency funding or, if required to hold such
reserves, is required to hold reserves at the "Euro-Rate Reserve
Percentage" as herein defined.
The Agent shall give prompt notice to the applicable
Borrower and to the Lenders of the Euro-Rate determined or adjusted in
accordance with the definition of the Euro-Rate, which determination or
adjustment shall be conclusive absent manifest error.
(b) Applicable Margin. The "Applicable Margin" for the
Euro-Rate Option for any day shall be determined by reference to the Leverage
Ratio as determined on such day and shall mean the applicable percentage set
forth below:
- ----------------------------- ------------------------------------
Leverage Ratio Applicable Margin
- ----------------------------- ------------------------------------
> 2.5 1.45%
- ----------------------------- ------------------------------------
> 2.0 and <= 2.5 1.20%
- ----------------------------- ------------------------------------
> 1.5 and <= 2.0 0.95%
- ----------------------------- ------------------------------------
<= 1.5 0.80%
- ----------------------------- ------------------------------------
(c) Funding Periods. At any time when a Borrower shall select,
convert to or renew the Euro-Rate Option to apply to any part of the Loans, the
applicable Borrower shall specify one of the following periods (the "Funding
Periods") during which the Euro-Rate Option shall apply: One, two, three, six
months or one year or such longer period as may be offered by all of the Lenders
in their sole discretion; provided, that:
(i) Each Funding Period shall begin on a London Business Day,
and the term "month", when used in connection with a Funding Period,
shall be construed in accordance with prevailing practices in the
interbank eurodollar market at the commencement of such Funding Period,
as determined in good faith by the Agent (which determination shall be
conclusive);
(ii) A Borrower may not select a Funding Period that would end
after the Revolving Credit Maturity Date; and
(iii) A Borrower shall, in selecting any Funding Period, allow
for scheduled mandatory payments and foreseeable mandatory prepayments
of the Loans.
(d) Transactional Amounts. Every selection of, conversion
from, conversion to or renewal of an interest rate Option and every payment or
prepayment of any Loans shall be in a principal amount such that after giving
effect thereto the aggregate principal amount of the Base Rate Portion of the
Revolving Credit Loans, or the aggregate principal amount of each Funding
Segment of the Euro-Rate Portion of the Revolving Credit Loans, shall be as set
forth below:
- ---------------------------- --------------------------------------
Portion or Funding Segment Allowable Aggregate Principal Amounts
- ---------------------------- --------------------------------------
Base Rate Portion an integral multiple of 500,000 of US
Currency or the Other Currency
denominated by the Borrower
- ---------------------------- --------------------------------------
Each Funding Segment of the an integral multiple of 1,000,000 of
Euro-Rate Portion US Currency or the Other Currency
denominated by the Borrower
- ---------------------------- --------------------------------------
(e) Euro-Rate Unascertainable; Impracticability. If
(i) on any date on which a Euro-Rate would otherwise be set
the Agent (in the case of clauses (A) or (B) below) or any Lender (in
the case of clause (C) below) shall have determined in good faith
(which determination shall be conclusive absent manifest error) that:
(A) adequate and reasonable means do not exist
for ascertaining such Euro-Rate,
(B) a contingency has occurred which materially and
adversely affects the secondary market for the interbank
eurodollar market, or
(C) the effective cost to such Lender of funding a
proposed Funding Segment of the Euro-Rate Portion from a
Corresponding Source of Funds shall exceed the Euro-Rate,
applicable to such Funding Segment, or
(ii) at any time any Lender shall have determined in good
faith (which determination shall be conclusive absent manifest error)
that the making, maintenance or funding of any part of the Euro-Rate
Portion has been made impracticable or unlawful by compliance by such
Lender or a Notional Euro-Rate Funding Office in good faith with any
Law or guideline or interpretation or administration thereof by any
Governmental Authority charged with the interpretation or
administration thereof or with any request or directive of any such
Governmental Authority (whether or not having the force of law);
then, and in any such event, the Agent or such Lender, as the case may be, may
notify the Borrowers of such determination (and any Lender giving such notice
shall notify the Agent). Upon such date as shall be specified in such notice
(which shall not be earlier than the date such notice is given), the obligation
of each of the Lenders to allow the Borrowers to select, convert to or renew the
Euro-Rate Option, shall be suspended until the Agent or such Lender, as the case
may be, shall have later notified the Borrowers (and any Lender giving such
notice shall notify the Agent) of the Agent's or such Lender's determination in
good faith (which determination shall be conclusive absent manifest error) that
the circumstance giving rise to such previous determination no longer exist.
If any Lender notifies a Borrower of a determination under
subsection (ii) of this Section 2.04(e), the Euro-Rate Portion of the Loans of
such Lender (the "Affected Lender") shall automatically be converted to the Base
Rate Option as of the date specified in such notice (and accrued interest
thereon shall be due and payable on such date).
If at the time the Agent or a Lender makes a determination
under subsection (i) or (ii) of this Section 2.04(e) a Borrower previously has
notified the Agent that it wishes to select, convert to or renew the Euro-Rate
Option, with respect to any proposed Loans but such Loans have not yet been
made, such notification shall be deemed to provide for selection of, conversion
to or renewal of the Base Rate Option instead of the Euro-Rate Option with
respect to such Loans or, in the case of a determination by a Lender, such Loans
of such Lender.
(f) Availability of Funds. If at any time any Lender cannot
access funds through traditional sources, as determined by such Lender in good
faith (which determination shall be conclusive absent manifest error), and it is
necessary for such Lender to access funding through the Federal Reserve System's
Century Date Change Special Liquidity Facility Program (the "Alternative
Funds"), then the interest rate applicable to such Lender's Pro Rata share of
the Loans made with such Alternative Funds shall be equal to (i) the Federal
Funds Effective Rate then in effect, plus (ii) 1.50%, plus (iii) the Applicable
Margin determined by reference to the Leverage Ratio on such date.
. 2.05. Conversion or Renewal of Interest Rate Options
(a) Conversion or Renewal. Subject to the provisions of
Sections 2.09(c) and 2.10(b) hereof, unless an Event of Default shall have
occurred and be continuing, any Borrower may convert any part of its Loans from
any interest rate Option or Options to one or more different interest rate
Options and may renew the Euro-Rate Option as to any Funding Segment of the
Euro-Rate Portion:
(i) At any time with respect to conversion from the Base
Rate Option; or
(ii) At the expiration of any Funding Period with respect to
conversions from or renewals of the Euro-Rate Option, as to the Funding
Segment corresponding to such expiring Funding Period.
Whenever a Borrower desires to convert or renew any interest rate Option or
Options, such Borrower shall provide to the Agent Standard Notice setting forth
the following information:
(w) The date, which shall be a Business Day, on which the
proposed conversion or renewal is to be made;
(x) The principal amounts selected in accordance with Section
2.04(d) hereof of the Base Rate Portion and each Funding Segment of the
Euro-Rate Portion to be converted from or renewed;
(y) The interest rate Option or Options selected in accordance
with Section 2.04(a) hereof and the principal amounts selected in
accordance with Section 2.04(d) hereof of the Base Rate Portion and
each Funding Segment of the Euro-Rate Portion to be converted; and
(z) With respect to each Funding Segment to be converted to or
renewed, the Funding Period selected in accordance with Section 2.04(c)
hereof to apply to such Funding Segment.
Standard Notice having been so provided, after the date specified in such
Standard Notice, interest shall be calculated upon the principal amount of the
Loans as so converted or renewed. Interest on the principal amount of any part
of the Loans converted or renewed (automatically or otherwise) shall be due and
payable on the conversion or renewal date.
(b) Failure to Convert or Renew. Absent due notice from any
Borrower of conversion or renewal in the circumstances described in Section
2.05(a)(ii) hereof, any part of the Euro-Rate Portion for which such notice is
not received shall be converted automatically to the Base Rate Option on the
last day of the expiring Funding Period; provided, however, that if any
Euro-Rate Portion is in an Other Currency, such portion shall be renewed
automatically for one month on the last day of the expiring Funding Period.
. Whenever a Borrower desires or is required to prepay any part of its Loans, it
shall provide Standard Notice to the Agent setting forth the following
information:
(a) The currency, which shall be either US Currency or an
Other Currency, in which such prepayment is to be made;
(b) The date, which shall be a Business Day, on which the
proposed prepayment is to be made;
(c) The total principal amount of such prepayment, which shall
be the sum of the principal amounts selected pursuant to clause (d) of this
Section 2.06; and
(d) The principal amounts selected in accordance with Section
2.04(d) hereof of the Base Rate Portion and each part of each Funding Segment of
the Euro-Rate Portion to be prepaid.
Standard Notice having been so provided, on the date specified in such Standard
Notice, the principal amounts of the Base Rate Portion and each Funding Segment
of the Euro-Rate Portion specified in such notice, together with interest on
each such principal amount to such date, shall be due and payable.
. The Borrowers shall have the right at their option from time to time to prepay
their Loans in whole or part without premium or penalty (subject, however, to
Section 2.10(b) hereof):
(a) At any time with respect to any part of the Base Rate
Portion; or
(b) At the expiration of any Funding Period with respect to
prepayment of the Euro-Rate Portion with respect to any part of the Funding
Segment corresponding to such expiring Funding Period.
Any such prepayment shall be made in accordance with Section 2.06 hereof.
. Interest on the Base Rate Portion shall be due and payable in arrears on the
last day of each month. Interest on each Funding Segment of the Euro-Rate
Portion shall be due and payable on the last day of the corresponding Euro-Rate
Funding Period and, if such Euro-Rate Funding Period is longer than three
months, on each Regular Payment Date. After maturity of any part of the Loans
(by acceleration or otherwise), interest on such part of the Loans shall be due
and payable on demand.
. 2.09. Pro Rata Treatment; Payments Generally
(a) Pro Rata Treatment. Each borrowing and conversion and
renewal of interest rate Options hereunder shall be made, and all payments made
in respect of principal, interest and Facility Fees due from Curtiss-Wright
hereunder or under the Notes shall be applied, Pro Rata from and to each Lender,
except for payments of interest involving an Affected Lender as provided in
Section 2.04(e) hereof, payments to a Lender under Sections 2.10, 2.12 or 3.07
hereof and payments to any Issuing Bank pursuant to Section 3.02(b) hereof. The
failure of any Lender to make a Loan shall not relieve any other Lender of its
obligation to lend hereunder, but neither the Agent nor any Lender shall be
responsible for the failure of any other Lender to make a Loan.
(b) Payments Generally. The parties agree that (i) all
payments and prepayments of principal, interest and other amounts in connection
with Loans denominated in US Currency and all fees shall be made in US Currency
and (ii) all payments of principal, interest and other amounts (other than fees)
in connection with Revolving Credit Loans denominated in any Other Currency
shall be made in such Other Currency. All payments and prepayments to be made in
respect of principal, interest, fees or other amounts due from the Borrowers in
US Currency shall be payable by 12:00 o'clock noon, Pittsburgh time, on the day
when due without presentment, demand, protest or notice of any kind, all of
which are hereby expressly waived, and an action therefor shall immediately
accrue. Except for payments under Sections 2.10 and 10.06, such payments shall
be made to the Agent at its Office in US Currency in funds immediately available
at such Office without setoff, counterclaim or other deduction of any nature.
All payments and prepayments to be made in respect of principal, interest, fees
or other amounts due from the Borrowers in any Other Currency shall be payable
by 12:00 o'clock noon, London time, on the day when due without presentment,
demand, protest or notice of any kind, all of which are hereby expressly waived,
and an action therefor shall immediately accrue. Except for payments under
Sections 2.10 and 10.06, such payments shall be made to the Agent at its London
Office in such Other Currency in funds immediately available at such Office
without setoff, counterclaim or other deduction of any nature. Any payment or
prepayment received (i) in US Currency by the Agent or such Lender after 12:00
o'clock Noon, Pittsburgh time, on any day shall be deemed to have been received
on the next succeeding Business Day and (ii) in any Other Currency by the Agent
or such Lender after 12:00 o'clock noon, London time, on any day shall be deemed
to have been received on the next succeeding London Business Day. The Agent
shall distribute to the Lenders all such payments received by it from the
Borrowers as promptly as practicable after receipt by the Agent.
(c) Default Interest. To the extent permitted by law, from and
after the date on which an Event of Default shall have occurred hereunder, and
so long as such Event of Default continues to exist, principal, interest, fees,
indemnity, expenses or any other amounts due from the Borrowers hereunder or
under any other Loan Document, shall bear interest for each day (before and
after judgment), payable on demand, at a rate per annum (in each case based on a
year of 360 days and actual days elapsed) which for each day shall be equal to
the following:
(i) In the case of any part of Euro-Rate Portion of any Loans,
(A) until the end of the applicable then-current Funding Period at a
rate per annum 2% above the rate otherwise applicable to such part, and
(B) thereafter in accordance with the following clause (ii); and
(ii) In the case of any other amount due from the Borrowers
hereunder or under any Loan Document, 2% above the then-current Base
Rate Option.
To the extent permitted by law, interest accrued under this Section 2.09 on any
amount shall compound on a day-by-day basis, and hence shall be added daily to
the overdue amount to which such interest relates.
. 2.10. Additional Compensation in Certain Circumstances
(a) Increased Costs or Reduced Return Resulting From Taxes,
Reserves, Capital Adequacy Requirements, Expenses, Etc. If any Law or guideline
or interpretation or application thereof by any Governmental Authority charged
with the interpretation or administration thereof or compliance with any request
or directive of any Governmental Authority (whether or not having the force of
law) now existing or hereafter adopted:
(i) subjects any Lender or any Notional Euro-Rate Funding
Office to any tax or changes the basis of taxation with respect to this
Agreement, the Notes, the Loans or payments by the Borrowers of
principal, interest, commitment fees or other amounts due from the
Borrowers hereunder or under the Notes (except for taxes on the overall
net income or overall gross receipts of such Lender or such Notional
Euro-Rate Funding Office imposed by the jurisdictions (federal, state
and local) in which the Lender's principal office or Notional Euro-Rate
Funding Office is located),
(ii) imposes, modifies or deems applicable any reserve,
special deposit or similar requirement against credits or commitments
to extend credit extended by, assets (funded or contingent) of,
deposits with or for the account of, other acquisitions of funds by,
such Lender or any Notional Euro-Rate Funding Office (other than
requirements expressly included herein in the determination of the
Euro-Rate hereunder),
(iii) imposes, modifies or deems applicable any capital
adequacy or similar requirement (A) against assets (funded or
contingent) of, or credits or commitments to extend credit extended by,
any Lender or any Notional Euro-Rate Funding Office, or (B) otherwise
applicable to the obligations of any Lender or any Notional Euro-Rate
Funding Office under this Agreement, or
(iv) imposes upon any Lender or any Notional Euro-Rate Funding
Office any other condition or expense with respect to this Agreement,
the Notes or its making, maintenance or funding of any Loan or any
security therefor,
and the result of any of the foregoing is to increase the cost to, reduce the
income receivable by, or impose any expense (including loss of margin) upon any
Lender, any Notional Euro-Rate Funding Office or, in the case of clause (iii)
hereof, any Person controlling a Lender, with respect to this Agreement, the
Notes or the making, maintenance or funding of any Loan (or, in the case of any
capital adequacy or similar requirement, to have the effect of reducing the rate
of return on such Lender's or controlling Person's capital, taking into
consideration such Lender's or controlling Person's policies with respect to
capital adequacy) by an amount which such Lender deems in good faith to be
material (such Lender being deemed for this purpose to have made, maintained or
funded each Funding Segment of the Euro-Rate Portion from a Corresponding Source
of Funds), such Lender may from time to time notify the Borrowers of the amount
determined in good faith (using any averaging and attribution methods) by such
Lender (which determination shall be conclusive) to be necessary to compensate
such Lender or such Notional Euro-Rate Funding Office for such increase,
reduction or imposition. Such amount shall be due and payable by the Borrowers
to such Lender five Business Days after such notice is given, together with an
amount equal to interest on such amount from the date two Business Days after
the date demanded until such due date at the Base Rate Option. A certificate by
such Lender as to the amount due and payable under this Section 2.10(a) from
time to time and the method of calculating such amount shall be conclusive
absent manifest error.
(b) Funding Breakage. In addition to all other amounts payable
hereunder, if and to the extent for any reason any part of any Funding Segment
of any Euro-Rate Portion of the Loans becomes due (by acceleration or
otherwise), or is paid, prepaid or converted to another interest rate Option
(whether or not such payment, prepayment or conversion is mandatory or automatic
and whether or not such payment or prepayment is then due), on a day other than
the last day of the corresponding Funding Period (the date such amount so
becomes due, or is so paid, prepaid or converted, being referred to as the
"Funding Breakage Date"), the Borrowers shall pay each Lender an amount
("Funding Breakage Indemnity") determined by such Lender as follows:
(i) first, calculate the following amount: (A) the principal
amount of such Funding Segment of the Loans owing to such Lender which
so became due, or which was so paid, prepaid or converted, times (B)
the greater of (x) zero or (y) the rate of interest applicable to such
principal amount on the Funding Breakage Date minus the Applicable
Funding Rate as of the Funding Breakage Date, times (C) the number of
days from and including the Funding Breakage Date to but not including
the last day of such Funding Period, times (D) 1/360;
(ii) the Funding Breakage Indemnity to be paid by the
Borrowers to such Lender shall be the amount equal to the present value
as of the Funding Breakage Date (discounted at the Applicable Funding
Rate as of such Funding Breakage Date, and calculated on the basis of a
year of 365 or 366 days, as the case may be, and actual days elapsed)
of the amount described in the preceding clause (i) (which amount
described in the preceding clause (i) is assumed for purposes of such
present value calculation to be payable on the last day of the
corresponding Funding Period).
For purposes of this Section, the term "Applicable Funding
Rate" shall mean (i) in the case of any calculation of a Funding Breakage
Indemnity payment with respect to a particular Funding Segment for which the
corresponding Funding Period was originally one year or longer, the Federal
Funds Effective Rate, and (ii) in the case of any calculation of a Funding
Breakage Indemnity payment with respect to a Funding Segment for which the
corresponding Funding Period was originally less than one year, the Euro-Rate.
Such Funding Breakage Indemnity shall be due and payable on
demand, and each Lender shall, upon making such demand, notify the Agent of the
amount so demanded. In addition, the Borrowers shall, on the due date for
payment of any Funding Breakage Indemnity, pay to such Lender an additional
amount equal to interest on such Funding Breakage Indemnity from the Funding
Breakage Date to but not including such due date at the Base Rate Option
applicable to the Loans (calculated on the basis of a year of 360 days and
actual days elapsed).
The amount payable to each Lender under this Section 2.10(b)
shall be determined in good faith by such Lender, and such determination shall
be conclusive absent manifest error.
. In the event that after the date hereof the Loans hereunder are classified as
a "highly leveraged transaction" (an "HLT Classification") by any Governmental
Authority having jurisdiction over any Lender, such Lender may in its discretion
from time to time so notify the Agent, and upon receiving such notice the Agent
shall promptly give notice of such event to the Borrowers, the Issuing Banks and
the Lenders. In such event the parties hereto shall commence negotiations to
agree on revised Facility Fees, interest rates and Applicable Margins hereunder.
If the parties hereto fail to agree on such matters in their respective absolute
discretion within 60 days of the notice given by the Agent referred to above,
then the Required Lenders may at any time or from time to time thereafter direct
the Agent to (a) by ten Business Days' notice to the Borrowers, terminate the
Revolving Credit Commitments, and the Revolving Credit Commitments shall
thereupon terminate, or (b) by ten Business Days' notice to the Borrowers,
declare the Obligations, together with (without duplication) accrued interest
thereon, to be, and the Obligations shall thereupon become, immediately due and
payable without presentment, demand, protest or other notice of any kind, all of
which are hereby waived, and an action therefor shall immediately accrue. The
Lenders acknowledge that an HLT Classification is not an Event of Default or
Potential Default hereunder.
. 2.12. Taxes
(a) Payments Net of Taxes. All payments made by the Borrowers
under this Agreement or any other Loan Document shall be made free and clear of,
and without reduction or withholding, unless required by Law, for or on account
of, any present or future income, stamp or other taxes, levies, imposts, duties,
charges, fees, deductions or withholdings, now or hereafter imposed, levied,
collected, withheld or assessed by any Governmental Authority, and all
liabilities with respect thereto, excluding
(i) in the case of the Agent and each Lender, income or
franchise taxes imposed on the Agent or such Lender by the jurisdiction
under the laws of which the Agent or such Lender is organized or any
political subdivision or taxing authority thereof or therein or as a
result of a connection between such Lender and any jurisdiction other
than a connection resulting solely from this Agreement and the
transactions contemplated hereby, and
(ii) in the case of each Lender, income or franchise taxes
imposed by any jurisdiction in which such Lender's lending offices
which make or book Loans are located or any political subdivision or
taxing authority thereof or therein
(all such non-excluded taxes, levies, imposts, deductions, charges or
withholdings being hereinafter called "Taxes"). If any Taxes are required to be
withheld or deducted from any amounts payable to the Agent or any Lender under
this Agreement or any other Loan Document, the Borrowers shall pay the relevant
amount of such Taxes and the amounts so payable to the Agent or such Lender
shall be increased to the extent necessary to yield to the Agent or such Lender
(after payment of all Taxes) interest or any such other amounts payable
hereunder at the rates or in the amounts specified in this Agreement and the
other Loan Documents. Whenever any Taxes are paid by the Borrowers with respect
to payments made in connection with this Agreement or any other Loan Document,
as promptly as possible thereafter, the Borrowers shall send to the Agent for
its own account or for the account of such Lender, as the case may be, a
certified copy of an original official receipt received by the Borrowers showing
payment thereof.
(b) Indemnity. The Borrowers hereby indemnify the Agent and
each of the Lenders for the full amount of such Taxes and any present or future
claims, liabilities or losses with respect to or resulting from any omission to
pay or delay in paying such Taxes (including any incremental Taxes, interest or
penalties that may become payable by the Agent or such Lender as a result of any
failure to pay such Taxes but excluding any claims, liabilities or losses with
respect to or arising from omissions to pay or delays in payment attributable to
the act or omission of the Agent or any Lender), whether or not such Taxes were
correctly or legally asserted. Such indemnification shall be made within 30 days
from the date such Lender or the Agent, as the case may be, makes written demand
therefor.
(c) Withholding and Backup Withholding. Each Lender that is
incorporated or organized under the laws of any jurisdiction other than the
United States or any state thereof agrees that, on or prior to the date any
payment is due to be made to it hereunder or under any other Loan Document, it
will furnish to the Borrowers and the Agent
(i) two valid, duly completed copies of United States Internal
Revenue Service Form 4224 or United States Internal Revenue
Form 1001 or successor applicable form, as the case may be,
certifying in each case that such Lender is entitled to
receive payments under this Agreement and the other Loan
Documents without deduction or withholding of any United
States federal income taxes and
(ii) a valid, duly completed Internal Revenue Service Form W-8 or
W-9 or successor applicable form, as the case may be, to
establish an exemption from United States backup withholding
tax.
Each Lender which so delivers to the Borrowers and the Agent a Form 1001 or 4224
and Form W-8 or W-9, or successor applicable forms agrees to deliver to the
Borrowers and the Agent two further copies of the said Form 1001 or 4224 and
Form W-8 or W-9, or successor applicable forms, or other manner of
certification, as the case may be, on or before the date that any such form
expires or becomes obsolete or otherwise is required to be resubmitted as a
condition to obtaining an exemption from withholding tax, or after the
occurrence of any event requiring a change in the most recent form previously
delivered by it, and such extensions or renewals thereof as may reasonably be
requested by the Borrowers and the Agent, certifying in the case of a Form 1001
or Form 4224 that such Lender is entitled to receive payments under this
Agreement or any other Loan Document without deduction or withholding of any
United States federal income taxes, unless in any such cases an event (including
any changes in Law) has occurred prior to the date on which any such delivery
would otherwise be required which renders all such forms inapplicable or which
would prevent such Lender from duly completing and delivering any such letter or
form with respect to it and such Lender advises the Borrowers and the Agent that
it is not capable of receiving payments without any deduction or withholding of
United States federal income tax, and in the case of a Form W-8 or W-9,
establishing an exemption from United States backup withholding tax.
. 2.13. Funding by Branch, Subsidiary or Affiliate
(a) Notional Funding. Each Lender shall have the right from
time to time, prospectively or retrospectively, without notice to the Borrowers,
to deem any branch, subsidiary or affiliate of such Lender to have made,
maintained or funded any part of the Euro-Rate Portion at any time. Any branch,
subsidiary or affiliate so deemed shall be known as a "Notional Euro-Rate
Funding Office". Such Lender shall deem any part of the Euro-Rate Portion of the
Loans or the funding therefor to have been transferred to a different Notional
Euro-Rate Funding Office if such transfer would avoid or cure an event or
condition described in Section 2.04(e)(ii) hereof or would lessen compensation
payable by the Borrowers under Section 2.10(a) hereof, or if such Lender
determines in its sole discretion that such transfer would be practicable and
would not have a Material Adverse Effect on such part of the Loans, such Lender
or any Notional Euro-Rate Funding office (it being assumed for purposes of such
determination that each part of the Euro-Rate Portion is actually made or
maintained by or funded through the corresponding Notional Euro-Rate Funding
Office). Notional Euro-Rate Funding Offices may be selected by such Lender
without regard to such Lender's actual methods of making, maintaining or funding
Loans or any sources of funding actually used by or available to such Lender.
(b) Actual Funding. Each Lender shall have the right from time
to time to make or maintain any part of the Euro-Rate Portion by arranging for a
branch, subsidiary or affiliate of such Lender to make or maintain such part of
the Euro-Rate Portion. Such Lender shall have the right to (i) hold any
applicable Note payable to its order for the benefit and account of such branch,
subsidiary or affiliate or (ii) request the Borrowers to issue one or more
substitute promissory notes in the principal amount of such Euro-Rate Portion,
in substantially the form attached hereto as Exhibit A, with the blanks
appropriately filled, payable to such branch, subsidiary or affiliate and with
appropriate changes reflecting that the holder thereof is not obligated to make
any additional Loans to the Borrowers; provided, that if a Lender requests the
Borrowers to issue one or more substitute promissory notes in accordance with
clause (ii) above, the amount of the Note payable to such Lender shall
automatically be reduced accordingly. The Borrowers agree to comply promptly
with any request under subsection (ii) of this Section 2.13(b). If any Lender
causes a branch, subsidiary or affiliate to make or maintain any part of the
Euro-Rate Portion hereunder, all terms and conditions of this Agreement shall,
except where the context clearly requires otherwise, be applicable to such part
of the Euro-Rate Portion and to any note payable to the order of such branch,
subsidiary or affiliate to the same extent as if such part of the Euro-Rate
Portion were made or maintained and such note were a Revolving Credit Note
payable to such Lender's order.
. 2.14. Multicurrency Payments
(a) Dollar Equivalent Amounts.
(i) Calculation of Dollar Equivalent Amounts. Upon each making
and upon each payment of a Revolving Credit Loan denominated in an
Other Currency, the Agent shall calculate the Dollar Equivalent Amount
of such Revolving Credit Loan, as the case may be, and shall provide
written confirmation to the Lenders.
(ii) Recalculation of Dollar Equivalent Amounts. In
determining the Dollar Equivalent Amount of the aggregate Revolving
Credit Extensions of Credit of the Lenders, the Agent may use the
respective Dollar Equivalent Amounts for the Revolving Credit Loans
pursuant to paragraph (i) of this subsection (a), unless such Dollar
Equivalent Amount so calculated exceeds 90% of the Revolving Credit
Commitment Amount, in which case the Agent shall recalculate the Dollar
Equivalent Amount of the Revolving Credit Loans outstanding no less
frequently than once each week. The Agent may recalculate the Dollar
Equivalent Amounts of each of the Revolving Credit Loans as frequently
as it determines to do so in its discretion, PROVIDED, that such
recalculation shall be made for all of the Revolving Credit Loans no
less frequently than once each week during any period when the
aggregate Dollar Equivalent Amount of the aggregate Credit Exposure of
the Lenders exceeds 90% of the Revolving Credit Commitment Amount.
(b) Unavailability.
(i) General. Subject to paragraph (ii) of this
subsection (b), if, in the reasonable judgment of the Agent, any Other
Currency ceases to be available and freely tradable in the London
foreign exchange market, such Other Currency shall cease to be an Other
Currency. The Agent shall give prompt notice to the Borrowers and the
Lenders of such event. In the event that (A) the Agent has determined
that an Other Currency has ceased to be available and freely tradable
in the London foreign exchange market and (B) the Agent has determined
in good faith that such Other Currency is not otherwise available to
the Borrowers, then, on the date any Revolving Credit Loan denominated
in such Other Currency would become due under the terms of this
Agreement (other than as a result of an optional prepayment under
Section 2.07 or of the acceleration of such Revolving Credit Loans
under Section 8.02), the Borrowers shall repay such Revolving Credit
Loans by paying to each Lender an amount in Dollars equal to the amount
determined in good faith by such Lender (which determination shall be
conclusive absent manifest error) necessary to compensate such Lender
for the principal of and accrued interest on such Revolving Credit
Loans and any additional cost, expense or loss incurred by such Lender
as a result of such Revolving Credit Loans being repaid in Dollars
(rather than in the denominated Other Currency).
ARTICLE III
LETTERS OF CREDIT
. 3.01. Letters of Credit
(a) Outstanding Letter of Credit. The Agent or one or more
Issuing Banks previously issued the irrevocable letters of credit set forth on
Schedule 3.01 hereto (the "Outstanding Letters of Credit") pursuant to the
Original Credit Agreements or other agreements between Mellon and
Curtiss-Wright. The Borrowers, the Lenders, the Agent and the Issuing Banks
hereby agree that on the Closing Date, subject to the terms and conditions
hereof, the Outstanding Letters of Credit shall be deemed to have been issued
hereunder as of the Closing Date.
(b) General. Subject to the terms and conditions of this
Agreement, and relying upon the representations and warranties herein set forth
and upon the agreements of the Lenders set forth in Sections 3.04 and 3.05
hereof, Mellon, such affiliates of Mellon and such other Lender as the Agent may
in its discretion from time to time elect to cause to issue Letters of Credit
(collectively, the "Issuing Banks") shall issue for the account of a Borrower
(an "Account Party") letters of credit (each, as amended, modified or
supplemented from time to time, a "Letter of Credit") at any time or from time
to time on or after the date hereof.
(c) Terms of Letters of Credit. No Account Party shall request
any Letter of Credit to be issued, except within the following limitations: (i)
no Letter of Credit shall be issued on or after the Revolving Credit Maturity
Date, (ii) at the time any Letter of Credit is issued, the aggregate Revolving
Credit Extensions of Credit (after giving effect to issuance of the requested
Letter of Credit) shall not exceed the sum of the Revolving Credit Committed
Amounts of the Lenders at such time, (iii) each Letter of Credit shall have an
expiration date no later than ten days before the Revolving Credit Maturity Date
unless the Revolving Credit Maturity Date shall have been extended by some, but
not all, of the Lenders, and the Nonextending Lenders have not been replaced
pursuant to Section 2.01(e) hereof, in which case each Letter of Credit shall
have an expiration date no later than ten days before the original Revolving
Credit Maturity Date (as such date may previously have been extended by all
Lenders), (iv) no Letter of Credit shall be an evergreen Letter of Credit, other
than (x) such Letters of Credit as requested by an Account Party and approved by
the Required Lenders and by the Issuing Bank issuing such Letter of Credit, and
(y) the irrevocable Letter of Credit issued in favor of National Union Fire
Insurance Company of Pittsburgh, Pennsylvania in the amount of $107,666, and the
irrevocable Letter of Credit issued in favor of Atlantic Mutual Insurance
Company in the amount of $84,444, (v) each Letter of Credit shall be denominated
in Dollars or in an Other Currency, (vi) each Letter of Credit shall be payable
only against sight drafts (and not time drafts) and such other certificates and
documents as may be required by such Letter of Credit, (vii) at any time any
Letter of Credit is issued, the aggregate Letter of Credit Obligations (after
giving effect to issuance of the requested Letter of Credit) shall not exceed
$50,000,000, and (viii) the minimum stated amount of any Letter of Credit shall
be $50,000.
(d) Purposes of Letters of Credit. Each Letter of Credit shall
be satisfactory in form, substance and beneficiary to the Issuing Bank in its
discretion. Letters of Credit may be used by the Account Party for any proper
corporate purpose, including providing credit support for any Indebtedness or
other direct or indirect financing arrangements of the Borrowers as permitted by
this Agreement. The provisions of this Section 3.01(d) represent only an
obligation of the Account Party to the Issuing Banks and the Lenders; the
Issuing Bank shall have no obligation to the Lenders to ascertain the purpose of
any Letter of Credit, and the rights and obligations of the Lenders and the
Issuing Bank among themselves shall not be impaired or affected by a breach of
this Section 3.01(d).
. 3.02. Letter of Credit Fees
(a) Letter of Credit Fee. Curtiss-Wright shall pay to the
Agent for the account of each Lender a fee (the "Letter of Credit Fee") in an
amount equal to the Applicable Margin determined based on the Leverage Ratio,
for each day from and including the date of issuance of each standby Letter of
Credit to and including the date of expiration or termination of such Letter of
Credit, on the Letter of Credit Undrawn Availability on such day. Such Letter of
Credit Fee shall be due and payable on each Regular Payment Date.
(b) Facing Fee; Administration Fees. Curtiss-Wright shall pay
to the Agent, for the sole account of the Issuing Bank, for each Letter of
Credit, on the date of issuance of such Letter of Credit, a fee (the "Letter of
Credit Facing Fee") in an amount equal to 0.125% of the stated amount of such
Letter of Credit. In addition, Curtiss-Wright shall pay to the Agent, for the
sole account of the Issuing Bank, such other administration, maintenance,
amendment, drawing, negotiation and other fees as may be customarily charged by
the Issuing Bank from time to time in connection with letters of credit.
. 3.03. Procedure for Issuance and Amendment of Letters of
Credit
(a) Request for Issuance. An Account Party may from time to
time request, upon at least five Business Days' notice, Mellon to issue (or
cause another Issuing Bank selected by Mellon to issue) a Letter of Credit by:
(i) Delivering to Mellon (or such other Issuing Bank as Mellon
may from time to time designate) and the Agent a written request to
such effect, specifying the date on which such Letter of Credit is to
be issued, the expiration date thereof, and the stated amount thereof,
and
(ii) Delivering to the Issuing Bank an application, in such
form as may from time to time be approved by the Issuing Bank (the
"Letter of Credit Application"), completed to the satisfaction of the
Issuing Bank, together with such other certificates, documents and
other papers and information as the Issuing Bank may request.
The Issuing Bank shall promptly notify the Agent (by telephone or otherwise),
and furnish the Agent with the proposed form of Letter of Credit to be issued.
The Agent shall determine, as of the close of business on the day before such
proposed issuance, whether such proposed Letter of Credit complies with the
limitations set forth in Sections 3.01(b) and 3.01(c) hereof. Unless such
limitations are not satisfied the Agent shall notify the Issuing Bank (in
writing or by telephone promptly confirmed in writing) that the Issuing Bank is
authorized to issue such Letter of Credit. If the Issuing Bank issues a Letter
of Credit, it shall deliver the original of such Letter of Credit to the
beneficiary thereof or as the Account Party shall otherwise direct, and shall
promptly notify the Agent thereof and furnish a copy thereof to the Agent.
(b) Request for Extension or Increase. An Account Party may
from time to time request the Issuing Bank to extend the expiration date of an
outstanding Letter of Credit or increase the stated amount of such Letter of
Credit. Such extension or increase shall for all purposes hereunder be treated
as though the Account Party had requested issuance of a replacement Letter of
Credit (except only that the Issuing Bank may, if it elects, issue a notice of
extension or increase in lieu of issuing a new Letter of Credit in substitution
for the outstanding Letter of Credit).
(c) Issuance, Extension and Amendment Generally.
(i) Upon satisfaction by the Account Party of the conditions
set forth in Section 5.02 and this Article III with respect to the
issuance of a Letter of Credit, the Agent shall cause the Issuing Bank
to issue such Letter of Credit for the Account Party's account.
(ii) The Issuing Bank may amend, modify or supplement Letters
of Credit or Letter of Credit Applications, or waive compliance to any
condition of issuance or payment, without the consent of, and without
liability to, the Agent or any Lender, provided that any such
amendment, modification or supplement that extends the expiration date
or increases the stated amount of an outstanding Letter of Credit shall
be subject to Section 3.03(b) hereof.
(iii) As between the Agent, on the one hand, and the Lenders,
on the other hand, the Agent shall not authorize issuance of any Letter
of Credit if any condition precedent set forth in Section 5.02 has not
been satisfied.
. 3.04. Participating Interests
(a) Generally. Concurrently with the issuance of each Letter
of Credit in accordance with the terms of this Article III, the Issuing Bank
automatically shall be deemed, irrevocably and unconditionally, to have sold,
assigned, transferred and conveyed to each other Lender, and each other Lender
automatically shall be deemed, irrevocably and unconditionally, severally to
have purchased, acquired, accepted and assumed from the Issuing Bank, without
recourse to, or representation or warranty by, the Issuing Bank, an undivided
interest, in a proportion equal to such Lender's Pro Rata share, in all of the
Issuing Bank's rights and obligations in, to or under such Letter of Credit, the
related Letter of Credit Application, the Letter of Credit Reimbursement
Obligations, and all collateral, guarantees and other rights from time to time
directly or indirectly securing the foregoing (such interest of each Lender
being referred to herein as a "Letter of Credit Participating Interest"). On the
date that any Purchasing Lender becomes a party to this Agreement in accordance
with Section 10.14 hereof, Letter of Credit Participating Interests in any
outstanding Letters of Credit held by the Lender from which such Purchasing
Lender acquired its interest hereunder shall be proportionately realotted
between such Purchasing Lender and such transferor Lender (and, to the extent
such transferor Lender is an Issuing Bank, the Purchasing Lender shall be deemed
to have acquired a Letter of Credit Participating Interest from such transferor
Lender to such extent).
(b) Obligations Absolute. Notwithstanding any other provision
hereof, each Lender hereby agrees that its obligation to participate in each
Letter of Credit issued in accordance herewith, its obligation to make the
payments specified in Section 3.05 hereof, and the right of the Issuing Bank to
receive such payments in the manner specified therein, are each absolute,
irrevocable and unconditional and shall not be affected by any circumstance
whatever. The failure of any Lender to make any such payment shall not relieve
any other Lender of its funding obligation hereunder on the date due, but no
Lender shall be responsible for the failure of any other Lender to meet its
funding obligations hereunder.
. 3.05. Drawings and Reimbursements
(a) Account Party's Reimbursement Obligation. Each Account
Party hereby agrees to reimburse the Issuing Bank, by making payment to the
Agent for the account of the Issuing Bank and the Lenders in accordance with
Section 2.09(b) hereof on the date of each payment made by the Issuing Bank
under any Letter of Credit issued on behalf of such Account Party, without
notice, protest or demand, all of which are hereby waived, and an action
therefor shall immediately accrue. To the extent such payment is not timely
made, such Account Party hereby agrees to pay to the Agent, for the account of
the Issuing Bank and the Lenders, on demand, interest on any unreimbursed Letter
of Credit Reimbursement Obligations for each day from and including the date of
such payment by the Issuing Bank until paid (before and after judgment) in
accordance with Section 2.09(c) hereof, at the rate per annum set forth in
Section 2.09(c)(ii) hereof.
(b) Payment by Lenders on Account of Unreimbursed Draws. If
the Issuing Bank makes a payment under any Letter of Credit and is not
reimbursed in full therefor on such payment date in accordance with Section
3.05(a) hereof, the Issuing Bank will promptly notify the Agent thereof (which
notice may be by telephone), and the Agent shall forthwith notify each Lender
(which notice may be by telephone promptly confirmed in writing) thereof. No
later than the Agent's close of business on the date such notice is given, each
such Lender will pay to the Agent, for the account of the Issuing Bank, in
immediately available funds, an amount equal to such Lender's ratable share of
the unreimbursed portion of such payment by the Issuing Bank. If and to the
extent that any Lender fails to make such payment to the Issuing Bank on such
date, such Lender shall pay such amount on demand, together with interest, for
the Issuing Bank's own account, for each day from and including the date of the
Issuing Bank's payment to and including the date of repayment to the Issuing
Bank (before and after judgment) at the rate per annum applicable to such Letter
of Credit Reimbursement Obligations.
(c) Distributions to Participants. If, at any time, after the
Issuing Bank has made a Letter of Credit unreimbursed draw and has received from
any Lender such Lender's share of such Letter of Credit unreimbursed draw, and
the Issuing Bank receives any payment or makes any application of funds on
account of the Letter of Credit Reimbursement Obligation arising from such
Letter of Credit unreimbursed draw, the Issuing Bank will pay to the Agent, for
the account of such Lender, such Lender's Pro Rata share of such payment.
(d) Rescission. If any payment received by the Issuing Bank,
or any application made by the Issuing Bank on account of any Letter of Credit
Reimbursement Obligation shall be rescinded or otherwise shall be required to be
returned or paid over by the Issuing Bank for any reason at any time, whether
before or after the termination of this Agreement (or the Issuing Bank believes
in good faith that such rescission, return or payment is required, whether or
not such matter has been adjudicated), each such Lender will, promptly upon
notice from the Agent or the Issuing Bank, pay over to the Agent for the account
of the Issuing Bank its ratable share of the amount so rescinded, returned or
paid over, together with its ratable share of any interest or penalties payable
with respect thereto.
(e) Equalization. If any Lender receives any payment or makes
any application on account of its Letter of Credit Participating Interest, such
Lender shall forthwith pay over to the Issuing Bank, in Dollars and in like kind
of funds received or applied by it the amount in excess of such Lender's Pro
Rata share of the amount so received or applied.
. The payment obligations of each Account Party under Section 3.05 shall be
absolute and unconditional under any and all circumstances and irrespective of
any setoff, counterclaim or defense to payment that the Account Party may have
or have had against the Issuing Bank, including without limitation any defense
based on the failure of any drawings under any Letter of Credit to conform to
the terms of the Letter of Credit, other than a defense based on a misdirection
of payments intended to be made under a Letter of Credit directly caused by the
negligence of the Issuing Bank, or any other defense based on the gross
negligence or willful misconduct of the Issuing Bank.
. Without limitation of any provision of Section 2.10(a) hereof, each Issuing
Bank and each Lender shall be entitled to the benefit of Section 2.10(a) hereof,
and each Account Party shall pay additional compensation to each Issuing Bank
and each Lender in accordance with such Section 2.10(a), in respect of this
Agreement, the Letters of Credit and Letter of Credit Participating Interests,
to the same extent and in the same manner as if the word "Lender," in each place
in which it occurs in such Section 2.10(a), were replaced with "Lender or
Issuing Bank," and the word "Loan," in each place in which it occurs in such
Section 2.10(a), were replaced with "Loan, Letter of Credit or Letter of Credit
Participating Interest."
. The Account Parties hereby agree, from time to time, to do and perform any and
all acts and to execute any and all further instruments reasonably requested by
the Issuing Bank more fully to effect the purposes of this Agreement and the
issuance of the Letters of Credit hereunder.
. The representations, warranties and covenants by the Account Parties under,
rights and remedies of the Issuing Bank under, any Letter of Credit Application
relating to any Letter of Credit are in addition to, and not in limitation or
derogation of, representations, warranties and covenants by the Account Parties
under, and rights and remedies of the Issuing Bank and the Lenders under, this
Agreement, the Loan Documents, and applicable law. The Account Parties
acknowledge and agree that all rights of the Issuing Bank under any Letter of
Credit Application shall inure to the benefit of each Lender to the extent of
its Commitment Percentage as fully as if such Lender was a party to such Letter
of Credit Application. In the event of any inconsistency between the terms of
this Agreement and any Letter of Credit Application, this Agreement shall
prevail.
. 3.10. Cash Collateral for Letters of Credit
(a) Cash Collateral for Letter of Credit Exposure following
Repayment of Revolving Credit Loans. To the extent that this Agreement or any
other Loan Document requires a payment or prepayment to be made with respect to
the Revolving Credit Loans (whether at maturity, by acceleration or otherwise),
such provision shall be construed as follows: (i) if the amount of such payment
or prepayment is less than or equal to the amount of the outstanding Revolving
Credit Loans and Letter of Credit Reimbursement Obligations at such time, then
such payment or prepayment shall be applied to the payment of principal of and
interest on the outstanding Revolving Credit Loans and Letter of Credit
Reimbursement Obligations (whether or not such payment or prepayment would
require an Account Party to pay any amount under Section 2.10(b) hereof); and
(ii) if the amount of such payment or prepayment is greater than the amount of
outstanding Revolving Credit Loans and Letter of Credit Reimbursement
Obligations at such time, then (A) such payment or prepayment shall be applied
to the principal of and interest accrued on the outstanding Revolving Credit
Loans and Letter of Credit Reimbursement Obligations (whether or not such
payment or prepayment would require an Account Party to pay any amount under
Section 2.10(b) hereof) and (B) the Account Party shall immediately pay to the
Agent cash or cash equivalents for deposit in the Letter of Credit Collateral
Account in an amount equal to the amount by which such payment or prepayment
exceeds the outstanding Revolving Credit Loans and Letter of Credit
Reimbursement Obligations; provided, however, that the amount required to be
paid under clause (B) shall not exceed the aggregate Letter of Credit Exposure
at such time minus the balance in the Letter of Credit Collateral Account at
such time.
(b) Letter of Credit Collateral Account. The Agent shall
maintain in its own name an interest bearing deposit account (the "Letter of
Credit Collateral Account") over which the Agent on behalf of the Lenders shall
have sole dominion and control, and the Account Parties shall have no right to
withdraw or cause the Agent to withdraw any funds deposited therein. The Agent
shall deposit into the Letter of Credit Collateral Account such cash or cash
equivalents as this Agreement or any Loan Document requires to be paid therein.
As security for the payment of all Obligations, each Account Party hereby
grants, conveys, assigns, pledges, transfers to the Agent, and creates in the
Agent's favor for the benefit of the Lenders a continuing Lien on and security
interest in, the Letter of Credit Collateral Account, all amounts from time to
time on deposit therein, all proceeds of the conversion, voluntary or
involuntary, thereof into cash, instruments, securities or other property, and
all other proceeds thereof. Each Account Party hereby represents, warrants,
covenants and agrees that such Lien shall at all times be valid, perfected and
of first priority, subject to no other Lien whatever, and each Account Party
shall take or cause to be taken such actions and execute and deliver such
instruments and documents as may be necessary or, in the Agent's judgment,
desirable to perfect or protect such Lien. No Account Party shall create or
suffer to exist any Lien on any amounts or investment held in the Letter of
Credit Collateral Account other than the Lien in favor of the Agent granted
under this Section 3.10(b).
(c) Application of Funds. Subject to the provisions of Section
8.02(c) hereof, the Agent shall apply funds in the Letter of Credit Collateral
Account: (i) on account of principal of and interest on the Letter of Credit
Reimbursement Obligations as and when the same become due and payable if and to
the extent that an Account Party fails directly to pay the same, and (ii) if no
Letter of Credit Reimbursement Obligations are due and payable and the balance
of the Letter of Credit Collateral Account exceeds the aggregate Letter of
Credit Exposure, the excess shall be applied on account of the other Obligations
secured hereby. If all such Obligations have been paid in full, all Revolving
Credit Commitments terminated and all Letters of Credit have expired, promptly
following demand by the Account Parties, the Agent shall release to the Account
Parties all remaining funds in the Letter of Credit Collateral Account. If an
Event of Default shall have occurred and be continuing, interest earned on funds
in the Letter of Credit Collateral Account shall be held by the Agent as part of
Letter of Credit Collateral Account and may be applied by the Agent as set forth
herein.
. 3.11. Certain Provisions Relating To the Issuing Banks
(a) General. The Issuing Banks shall have no duties or
responsibilities except those expressly set forth in this Agreement and the
other Loan Documents, and no implied duties or responsibilities on the part of
the Issuing Banks shall be read into this Agreement or any Loan Document or
shall otherwise exist.
The duties and responsibilities of the Issuing Banks under
this Agreement and the other Loan Documents shall be mechanical and
administrative in nature, and the Issuing Banks shall not have a fiduciary
relationship in respect of any Lender or any other Person. The Issuing Banks
shall not be liable for any action taken or omitted to be taken by it under or
in connection with this Agreement or any other Loan Document, unless caused by
its own gross negligence or willful misconduct. The Issuing Banks shall not be
under any obligation to ascertain, inquire or give any notice relating to (i)
the performance or observance of any of the terms or conditions of this
Agreement or any other Loan Document on the part of any Account Party, (ii) the
business, operations, condition (financial or otherwise) or prospects of any
Account Party or any other Person, or (iii) the existence of any Event of
Default or Potential Default. The Issuing Banks shall not be under any
obligation, either initially or on a continuing basis, to provide the Agent or
any Lender with any notices, reports or information of any nature, whether in
its possession presently or hereafter, except for such notices, reports and
other information expressly required by this Agreement to be so furnished.
(b) Administration. The Issuing Banks may rely upon any notice
or other communication of any nature (written or oral, including but not limited
to telephone conversations, whether or not such notice or other communication is
made in a manner permitted or required by this Agreement or any Loan Document)
purportedly made by or on behalf of the proper party or parties, and the Issuing
Banks shall not have any duty to verify the identity or authority of any Person
giving such notice or other communication. The Issuing Banks may consult with
legal counsel (including, without limitation, in-house counsel for the Issuing
Bank or in-house or other counsel for any Account Party), independent public
accountants and any other experts selected by it from time to time, and the
Issuing Banks shall not be liable for any action taken or omitted to be taken in
good faith in accordance with the advice of such counsel, accountants or
experts.
(c) Indemnification of Issuing Bank by Lenders. Each Lender
hereby agrees to reimburse and indemnify each Issuing Bank, in its capacity as
such, and its directors, officers, employees and agents (to the extent not
reimbursed by the Account Parties and without limitation of the obligations of
the Account Parties to do so), Pro Rata, from and against any and all amounts,
losses, liabilities, claims, damages, expenses, obligations, penalties, actions,
judgments, suits, costs or disbursements of any kind or nature (including,
without limitation, the fees and disbursements of counsel for the Issuing Bank
or such other Person in connection with any investigative, administrative or
judicial proceeding commenced or threatened, whether or not the Issuing Bank or
such other Person shall be designated a party thereto) that may at any time be
imposed on, incurred by or asserted against the Issuing Bank, in its capacity as
such, or such other Person, as a result of, or arising out of, or in any way
related to or by reason of, this Agreement, any other Loan Document, any
transaction from time to time contemplated hereby or thereby, or any transaction
financed in whole or in part or directly or indirectly with the proceeds of any
Letter of Credit, provided that no Lender shall be liable for any portion of
such amounts, losses, liabilities, claims, damages, expenses, obligations,
penalties, actions, judgments, suits, costs or disbursements resulting solely
from the gross negligence or willful misconduct of the Issuing Bank or such
other Person, as finally determined by a court of competent jurisdiction.
(d) Certain Standby Letters of Credit. Each Issuing Bank
agrees, with respect to Letters of Credit issued on behalf of an Account Party
to a bond trustee or other party as credit and/or liquidity support in
connection with any industrial revenue bond or similar instrument, that it will
not exercise any remedies available to it under any indenture, pledge agreement
or other agreement executed and delivered in connection with the issuance of
such bonds or other instruments, including without limitation any instruction to
accelerate the payment of principal of and interest on such bonds or other
instruments, without the prior written consent of the Agent and the Required
Lenders.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
The Borrowers hereby represent and warrant to the Agent and
each Lender as follows:
. Each Borrower is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation, is duly qualified
as a foreign corporation in good standing in each jurisdiction in which failure
to so qualify would have a Material Adverse Effect, and has all requisite power
and authority, corporate or otherwise, to conduct its business, to own its
properties and to execute and deliver, and to perform all of its obligations
under, this Agreement. Schedule 4.01 hereof states as of the date hereof the
jurisdiction of incorporation of each Borrower and each of their respective
Subsidiaries and the jurisdiction in which each Borrower and each of their
respective Subsidiaries is qualified to do business as a foreign corporation.
. The execution, delivery and performance by each Borrower of this Agreement
have been duly authorized by each Borrower and do not and will not (i) require
any consent or approval of the stockholders of any Borrower, (ii) violate in any
material respect any provision of any Law, rule, regulation (including, without
limitation, Regulations T, U or X of the Board of Governors of the Federal
Reserve System), order, writ, judgment, injunction, decree, determination or
award presently in effect having applicability to any Borrower or of the charter
or by-laws of any Borrower, (iii) result in a material breach of or constitute a
material default under any indenture or loan or credit agreement or any other
agreement, lease or instrument to which any Borrower is a party or by which any
of them or their respective properties may be bound or affected, or (iv) result
in, or require, the creation or imposition of any Lien upon or with respect to
any of the material properties now owned or hereafter acquired by any Borrower;
and no Borrower is in default under any such law, rule, regulation, order, writ,
judgment, injunction, decree, determination or award or any such indenture,
agreement, lease or instrument except any such default which is listed on
Schedules 4.06 or 4.09 hereof and which a Borrower is contesting in good faith
and by appropriate proceedings and such contest is operating to stay the
consequences thereof. No Borrower is a party to, or otherwise subject to any
provision contained in, any instrument evidencing indebtedness of any Borrower,
any agreement relating thereto or any other contract or agreement (including its
charter) which limits the amount of, or otherwise imposes restrictions on the
incurring of, obligations of any Borrower of the type set forth herein.
. No consent, approval or other action by or any notice to or filing with any
Governmental Authority is or will be necessary for the valid execution, delivery
or performance by any Borrower of this Agreement.
. This Agreement and each other Loan Document to which any Borrower is a party
has been, or upon its execution and delivery will be, duly executed and
delivered by such Borrower and each constitutes a legal, valid and binding
obligation of such Borrower, enforceable against such Borrower in accordance
with its terms, subject as to enforceability, to bankruptcy, insolvency,
moratorium or other laws and equitable principles relating to or affecting
creditors' rights generally from time to time in effect.
. Curtiss-Wright has furnished the Agent and each Lender with the following
financial statements, identified by a principal financial officer of
Curtiss-Wright: (i) consolidated audited balance sheets of Curtiss-Wright and
its consolidated Subsidiaries as at December 31, 1998 and December 31, 1997, and
consolidated profit and loss and surplus statements of Curtiss-Wright and its
consolidated Subsidiaries for the fiscal years ended on such dates,
respectively, certified by its certified public accountants; and (ii) a
consolidated balance sheet of Curtiss-Wright and its consolidated Subsidiaries
as at June 30, 1999, and consolidated profit and loss and surplus statements of
Curtiss-Wright and its consolidated Subsidiaries for the six months ended on
such date, prepared by Curtiss-Wright. Such financial statements (including any
related schedules and/or notes) are true and correct in all material respects
(subject, as to interim statements, to changes resulting from audits and
year-end adjustments) and have been prepared in accordance with GAAP and show
all liabilities, direct and contingent, of Curtiss-Wright and its consolidated
Subsidiaries required to be shown in accordance with such principles. The
balance sheets fairly present the condition of Curtiss-Wright and its
consolidated Subsidiaries as at the dates thereof, and the profit and loss and
surplus statements fairly present the results of the operations of
Curtiss-Wright and its consolidated Subsidiaries for the periods indicated.
Except as otherwise disclosed in Curtiss-Wright's consolidated financial
statements for six months ended June 30, 1999, copies of which have been
furnished to the Agent and each Lender, there has been no material adverse
change in the business, condition (financial or otherwise) or operations of
Curtiss-Wright and its consolidated Subsidiaries considered as a whole since
December 31, 1998.
. Other than as described in Schedules 4.06 and 4.09 hereof, there are no
actions, suits, arbitration proceedings or other proceedings pending or, to the
knowledge of any Borrower, threatened against or affecting any Borrower, or any
properties or rights of any Borrower which, if determined adversely to any
Borrower, would have a Material Adverse Effect.
. Each Borrower has good and marketable title to its material real properties
(other than properties which it leases) and good title to all of its other
material properties and assets (other than properties and assets disposed of in
the ordinary course of business and other than as contemplated by this
Agreement), subject to no liens, charges, encumbrances or impediments to
marketability except Permitted Liens. Except as set forth in Schedule 4.07, with
respect to real property of Curtiss-Wright and its Subsidiaries located in the
State of New Jersey, there are no impediments to marketability arising by reason
of the New Jersey Environmental Cleanup Responsibility Act.
. The Unfunded Liabilities of all Single Employer Plans maintained by
Curtiss-Wright or any of its subsidiaries do not in the aggregate exceed
$1,000,000 and the Unfunded Liabilities of all Single Employer Plans maintained
by the other members of the Controlled Group do not in the aggregate exceed an
amount which could reasonably be expected to have a Material Adverse Effect.
Except as set forth in Schedule 4.08 neither Curtiss-Wright nor any other member
of the Controlled Group maintains, or is obligated to contribute to, any
Multiemployer Plan. Each Plan complies in all material respects with all
applicable requirements of law and regulations, no Reportable Event has occurred
with respect to any Plan maintained by Curtiss-Wright or any of its
Subsidiaries, no Reportable Event has occurred with respect to any Plan
maintained by any other member of the Controlled Group that could reasonably be
expected to have a Material Adverse Effect, neither Curtiss-Wright nor any
Subsidiary has withdrawn from any Multiemployer Plan or initiated steps to do
so, no other member of the Controlled Group has withdrawn from any Multiemployer
Plan resulting in any withdrawal liability that could reasonably be expected to
have a Material Adverse Effect or initiated steps to do so, and no steps have
been taken to reorganize or terminate any Plan by any member of the Controlled
Group or, to Curtiss Wright's knowledge, by any other Person.
. There are no claims, investigations, litigation, administrative proceedings,
notices, requests for information (each an "Environmental Claim"), whether
pending or, to any Borrower's knowledge, threatened, or judgments or orders
asserting violations of applicable federal, state and local environmental,
health and safety statutes, regulations, ordinances, codes, rules, orders,
decrees, directives and standards ("Environmental Laws") or relating to any
toxic or hazardous waste, substance or chemical or any pollutant, contaminant,
chemical or other substance defined or regulated pursuant to any Environmental
Law, including, without limitation, asbestos, petroleum, crude oil or any
fraction thereof ("Hazardous Materials") asserted against Curtiss-Wright or any
of its Subsidiaries which, in any case, could reasonably be expected to have a
Material Adverse Effect. As of the date hereof, there are no such Environmental
Claims pending, or to any Borrower's knowledge threatened, except as disclosed
on Schedule 4.09. Curtiss Wright and each of its Subsidiaries have obtained and
are in compliance in all material aspects with all permits, certificates,
licenses, approvals and other authorizations ("Environmental Permits") required
for the operation of their business and have filed all required notifications or
reports relating, in each case, to chemical substances, air emissions, effluent
discharges and the storage, treatment, transport and disposal of Hazardous
Materials. As of the date hereof, Curtiss-Wright and its Subsidiaries do not
have liabilities exceeding $13,700,000 in the aggregate for all of them with
respect to compliance with applicable Environmental Laws and Environmental
Permits or related to the generation, treatment, storage, disposal, release,
investigation or cleanup of Hazardous Materials, and, to the knowledge of any
Borrower, no facts or circumstances exist which could give rise to such
liabilities with respect to compliance with applicable Environmental Laws and
Environmental Permits and the generation, treatment, storage, release,
investigation or cleanup of Hazardous Materials.
. No Borrower nor any Subsidiary of any Borrower has any liability or obligation
of any nature whatever (whether absolute, accrued, contingent or otherwise,
whether or not due), forward or long-term commitments or unrealized or
anticipated losses from unfavorable obligations, except (a) as disclosed in the
financial statements referred to in Section 4.05 hereof and the Schedules
hereto, (b) matters that, individually or in the aggregate, in a Borrower's
reasonable judgment, could not have a Material Adverse Effect, (c) liabilities,
obligations, commitments and losses incurred after December 31, 1998 in the
ordinary course of business and consistent with past practices, and (d) the
Indebtedness of the Borrowers and their respective Subsidiaries set forth on
Schedule 4.10 hereto.
. No information heretofore, contemporaneously or hereafter provided by or on
behalf of any Borrower or any Subsidiary of any Borrower in writing to either
the Agent or any Lender pursuant to or in connection with any Loan Document or
any transaction contemplated hereby or thereby contains any untrue statement of
a material fact or omits to state any material fact necessary to make such
information (taken as a whole) not misleading at such time in light of the
circumstances in which it was provided. The Borrowers have disclosed to the
Agent and each Lender in the Loan Documents or otherwise every fact or
circumstance known to any Borrower which has, or which in the foreseeable future
will in any Borrower's reasonable judgment have, a Material Adverse Effect.
. No Borrower nor any Subsidiary of any Borrower is engaged, directly or
indirectly, principally, or as one of its important activities, in the business
of extending, or arranging for the extension of credit for the purpose of
purchasing or carrying margin stock. No part of the proceeds of any Letter of
Credit or Loan will be used in a manner which would violate, or result in a
violation of Regulation T, Regulation U or Regulation X. Neither the issuance of
any Letter of Credit or the making of any Loan hereunder nor the use of the
proceeds thereof will violate or conflict with the provisions of, Regulation T,
Regulation U or Regulation X. Following the issuance of any Letter of Credit or
the making of any Loan, less than 25% of the value (as determined by any
reasonable method) of the assets of such Borrower and its Subsidiaries which are
subject to any limitation on sale, pledge, or other restriction hereunder taken
as a whole has been, and will continue to be, represented by margin stock.
. Schedule 4.13 hereof states as of the Closing Date each Subsidiary of each
Borrower and the percentage of outstanding shares owned by each Borrower and by
each Subsidiary. Each Subsidiary of each Borrower is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation, is duly qualified as a foreign corporation in
good standing in each jurisdiction in which failure to so qualify would have a
Material Adverse Effect, and has all requisite power and authority, corporate or
otherwise, to conduct its business and own its properties. The outstanding
shares of each Subsidiary of each Borrower have been duly authorized and validly
issued and are fully paid and nonassessable. The Borrowers and each Subsidiary
thereof own beneficially and of record and have good title to all of the shares
represented by the ownership percentage shown in such Schedule 4.13, free and
clear of any Lien. There are no options, warrants, calls, subscriptions,
conversion rights, exchange rights, preemptive rights or other rights,
agreements or arrangements (contingent or otherwise) which may in any
circumstances now or hereafter obligate any Subsidiary of any Borrower to issue
any shares of its capital stock or any other securities. As of the Closing Date,
no Subsidiary of any Borrower has outstanding any class of preferred stock or
any class of common stock with a prior right to dividends.
. As of the Closing Date, no Borrower nor any Subsidiary thereof is a partner
(general or limited) of any partnership, is a party to any joint venture or owns
(beneficially or of record) any equity in any other Person (including but not
limited to any interest pursuant to which any Borrower or such Subsidiary has or
may in any circumstance have an obligation to make capital contributions to, or
be generally liable for or on account of the liabilities, acts or omissions of
such other Person), except for the interests set forth in Schedule 4.14 hereof.
. No event has occurred and is continuing and no condition exists which
constitutes an Event of Default or Potential Default.
. The policies, binders or self-insurance programs for fire, liability, product
liability, workmen's compensation, vehicular and other insurance currently held
by or on behalf of the Borrowers and each Subsidiary thereof insure their
respective properties and business activities against such losses and risks as
are adequate to protect their respective properties in accordance with customary
industry practice when entered into or renewed. To the best knowledge of the
Borrowers, all such policies, binders and self-insurance programs are in full
force and effect. As of the date hereof, no Borrower nor, to the best knowledge
of any Borrower, any of their respective Subsidiaries has received notice from
any insurer or agent of such insurer that substantial capital improvements or
other expenditures will have to be made in order to continue such insurance and,
to the best knowledge of the Borrowers, no such improvements or expenditures are
required. As of the date hereof, no Borrower nor, to the best knowledge of the
Borrowers, any of their respective Subsidiaries has received notice of
cancellation of any insurance policy or binder.
. Each Borrower and each Subsidiary thereof owns, or is licensed or otherwise
has the right to use, all the material patents, trademarks, service marks, names
(trade, service, fictitious or otherwise), copyrights, technology (including but
not limited to computer programs and software), processes, data bases and other
rights, free from restrictions not usual in such circumstances, necessary to own
and operate its properties and to carry on its business considered as a whole as
presently conducted and presently planned to be conducted without material
conflict with the rights of others.
. Each Borrower and each Subsidiary thereof has filed all federal, state and
local tax returns required to be filed by it and has not failed to pay any
taxes, or interest and penalties relating thereto, on or before the due dates
thereof except for taxes not yet due and except for those the amount or validity
of which is currently being contested in good faith by appropriate proceedings.
Except to the extent that reserves therefor are reflected in the financial
statements, to the best knowledge of the Borrowers (a) there are no material
federal, state or local tax liabilities of any Borrower or any of their
respective Subsidiaries due or to become due for any tax year ended on or prior
to the Closing Date relating to any Borrower or any of their respective
Subsidiaries, whether incurred in respect of or measured by the income of the
Borrower or any of its Subsidiaries, which are not properly reflected in the
financial statements delivered pursuant to Section 4.05, and (b) there are no
material claims pending, proposed or threatened against any Borrower or any of
their respective Subsidiaries for past federal, state or local taxes, except
those, if any, as to which proper reserves in accordance with GAAP are reflected
in such financial statements.
. Each Borrower has reviewed its operations and those of its Subsidiaries with a
view to assessing whether its businesses, or the businesses of any of its
Subsidiaries, will be vulnerable to a Year 2000 Problem or will be vulnerable to
the effects of a Year 2000 Problem suffered by any of the Borrowers' or any of
their respective Subsidiaries' major commercial counter-parties. Each Borrower
represents and warrants that it has a reasonable basis to believe that no Year
2000 Problem will cause a Material Adverse Effect.
ARTICLE V
CONDITIONS OF LENDING
Credit. The obligation of each Lender to make Loans and the obligation of the
Issuing Banks to issue Letters of Credit on the Closing Date are subject to the
satisfaction, immediately prior to or concurrently with the making of such Loan
or issuance of such Letter of Credit, of the following conditions precedent, in
addition to the conditions precedent set forth in Section 5.02 hereof:
(a) Agreement; Notes. The Agent shall have received an
executed counterpart of this Agreement for each Lender, duly executed by each
Borrower, and an executed Revolving Credit Note for each Lender, conforming to
the requirements hereof, duly executed on behalf of each Borrower.
(b) Opinion of Counsel. There shall have been delivered to the
Agent an opinion of counsel of each Borrower, dated the Closing Date in
substantially the form attached hereto as Exhibit B.
(c) No Default. On the Closing Date, no Potential Default or
Event of Default shall have occurred or be continuing.
(d) Representations and Warranties. On the Closing Date, all
representations and warranties of each Borrower contained herein or otherwise
made in writing in connection herewith shall be true and correct with the same
force and effect as though such representations and warranties had been made on
and as of such time.
(e) Corporate Proceedings. The Agent shall have received, with
a counterpart for each Lender, certificates by the Secretary or Assistant
Secretary of each Borrower dated as of the Closing Date as to (i) true copies of
the articles of incorporation and by-laws (or other constituent documents) of
each Borrower in effect on such date, (ii) true copies of all corporate action
taken by each Borrower relative to this Agreement and the other Loan Documents
and (iii) the incumbency and signature of the respective officers of each
Borrower executing this Agreement and the other Loan Documents to which each
Borrower is a party, together with satisfactory evidence of the incumbency of
such Secretary or Assistant Secretary. The Agent shall have received, with a
copy for each Lender, certificates from the appropriate Secretaries of State or
other applicable Governmental Authorities dated not more than 30 days before the
Closing Date showing the good standing of each Borrower in its state of
incorporation.
(f) Financial Statements. The Agent shall have received, with
a counterpart for each Lender, copies of the consolidated financial statements
referred to in Section 4.05 hereof.
(g) Fees, Expenses, etc. All fees and other compensation
required to be paid to the Agent or the Lenders pursuant hereto or pursuant to
any other written agreement on or prior to the Closing Date shall have been paid
or received.
(h) Financial Forecast. The Agent shall have received the
five-year financial forecast of Curtiss-Wright, including balance sheets, income
statements and cash flow statements, and shall have determined, in its absolute
discretion, that the five-year forecast is satisfactory.
(i) Environmental Reports. The Agent shall have received
appropriate environmental reports with respect to the properties of
Curtiss-Wright and its Subsidiaries, in form and substance satisfactory to the
Agent, and shall have determined in its absolute discretion that such reports
are satisfactory.
(j) Market Conditions. No change in the financial or capital
market conditions generally shall have occurred that, in the judgment of the
Agent, would materially impair the Agent's ability to syndicate the Loans to
other Lenders.
(k) Material Adverse Change. No material adverse change in the
business, condition (financial or otherwise), operations or prospects of
Curtiss-Wright and its consolidated Subsidiaries considered as a whole has
occurred since December 31, 1998.
(l) No Litigation. No actions, suits, arbitration proceedings
or other proceedings pending or, to the knowledge of any Borrower, threatened
against or affecting any Borrower, or any properties or rights of any Borrower
which, if determined adversely to any Borrower, would have a Material Adverse
Effect, or which seeks to challenge or prevent or declare illegal the
transactions contemplated by this Agreement or any of the Loan Documents.
(m) Additional Matters. The Agent shall have received such
other certificates, opinions, documents and instruments as may be requested by
any Lender. All corporate and other proceedings, and all documents, instruments
and other matters in connection with the transactions contemplated by this
Agreement and the other Loan Documents shall be satisfactory in form and
substance to the Agent, each Lender and their counsel. The Agent, each Lender
and their counsel shall have received all such counterpart originals or
certified or other copies of such documents as the Agent or such counsel shall
reasonably request.
(n) Original Credit Agreements. The Original Credit Agreements
shall have been terminated and shall be of no further force and effect, and all
amounts outstanding thereunder shall have been paid in full.
(o) Guarantees. The Agent shall have received a Guaranty and
Suretyship Agreement in substantially the form of Exhibit E hereto (the
"Curtiss-Wright Guaranty"), duly executed by Curtiss-Wright and (ii) a Guaranty
and Suretyship Agreement in substantially the form of Exhibit F hereto (the
"Subsidiary Guarantees"), duly executed by each Subsidiary Borrower and each
Significant Subsidiary.
. The obligation of each Lender to make any Loan (including the initial Loans)
and the obligation of the Issuing Banks to issue Letters of Credit (including
the initial Letter of Credit issued on or after the Closing Date) are subject to
performance by each Borrower of its obligations to be performed hereunder or
under the other Loan Documents on or before the date of such Loan or issuance of
such Letter of Credit, satisfaction of the conditions precedent set forth herein
and in the other Loan Documents and to satisfaction of the following further
conditions precedent:
(a) Notice. Appropriate notice of such Loan or Letter of
Credit shall have been given by the applicable Borrower as provided in Article
II or Article III, respectively, hereof.
(b) Representations and Warranties. On the date of the making
of such Loan or the issuance of such Letter of Credit, as the case may be, all
representations and warranties of each Borrower contained herein or otherwise
made in writing in connection herewith shall be true and correct (except with
respect to representations and warranties which specifically refer to an earlier
date, which shall be true and correct in all material respects as of such
earlier date) with the same force and effect as though such representations and
warranties had been made on and as of such time.
(c) No Defaults. No Event of Default or Potential Default
shall have occurred and be continuing on such date or after giving effect to the
Loans requested to be made or the Letters of Credit requested to be issued on
such date.
(d) No Violations of Law, etc. Neither the making nor use of
the Loans or Letters of Credit shall cause any Lender to violate or conflict
with any Law.
Each request by any Borrower for any Loan (including the initial Loans) or
Letter of Credit shall constitute a representation and warranty by such Borrower
that the conditions set forth in this Section 5.02 have been satisfied as of the
date of such request. Failure of the Agent to receive notice from the applicable
Borrower to the contrary before such Loan is made or Letter of Credit is issued,
shall constitute a further representation and warranty by such Borrower that the
conditions referred to in this Section 5.02 have been satisfied as of the date
such Loan is made or Letter of Credit is issued.
ARTICLE VI
AFFIRMATIVE COVENANTS
So long as any Loan or Letter of Credit is outstanding, any
Obligation is outstanding, the Issuing Bank has any obligation to issue, or the
Lenders have any obligation to participate in, Letters of Credit, or the Lenders
have any obligation to make any Loan:
. 6.01. Basic Reporting Requirements
(a) Annual Audit Reports. Curtiss-Wright shall deliver to the
Agent, with a copy for each Lender, as soon as available, but in any event
within 90 days after the last day of each of its fiscal years, a consolidated
balance sheet of Curtiss-Wright as at such last day of the fiscal year, and the
related consolidated statement of income and retained earnings and changes in
financial position, for such fiscal year, each prepared in accordance with GAAP
(except as required by any change in accounting principles or concurred in by
Curtiss-Wright's independent certified public accountants), in reasonable
detail, and, as to the financial statements, certified without qualification
(other than relating to a change in accounting principles with which such
accountants concur and other than any other qualification which the Agent and
the Required Lenders deem, in their reasonable judgment, to be immaterial) by
PriceWaterhouseCoopers or another firm of independent certified public
accountants of nationally recognized standing as fairly presenting the financial
position and the results of operations of Curtiss-Wright as at and for the year
ending on such date and as having been prepared in accordance with GAAP.
(b) Quarterly Consolidated Reports. Curtiss-Wright shall
deliver to the Agent, with a copy for each Lender, as soon as available, but in
any event within 60 days after the end of each of Curtiss-Wright's fiscal
quarterly periods, a consolidated balance sheet of Curtiss-Wright as of the last
day of such quarter and consolidated statement of income and retained earnings
and changes in financial position, for such quarter, and on a comparative basis
figures for the corresponding period of the immediately preceding fiscal year,
all in reasonable detail, each such statement to be certified in a certificate
of a Responsible Officer of Curtiss-Wright, as the case may be, as fairly
presenting the financial position and the results of operations of
Curtiss-Wright as at such date and for such quarter and as having been prepared
in accordance with GAAP (subject to year-end audit adjustments).
(c) Quarterly Compliance Certificates. Curtiss-Wright shall
deliver to the Agent, with a copy for each Lender, a quarterly compliance
certificate in substantially the form set forth as Exhibit C hereto, duly
completed and signed by a Responsible Officer of Curtiss-Wright, concurrently
with the delivery of the financial statements referred to in subsections (a) and
(b) of this Section 6.01. Each Quarterly Compliance Certificate shall be
accompanied by a certificate, duly completed and signed by a Responsible Officer
of Curtiss-Wright providing, as of the end of the preceding calendar quarter,
the information contained in Schedule 7.09 hereto.
(d) Certain Other Reports and Information. Promptly upon their
becoming available to Curtiss-Wright, Curtiss-Wright shall deliver to the Agent,
with a copy for each Lender, a copy of (i) all regular or special reports,
registration statements and amendments to the foregoing which Curtiss-Wright or
any Subsidiary of Curtiss-Wright shall file with the Securities and Exchange
Commission (or any successor thereto) or any securities exchange other than
reports required by Section 16 of the Securities Exchange Act of 1934 which
Curtiss-Wright files as an accommodation for its officers, and (ii) all reports,
proxy statements, financial statements and other written information distributed
by Curtiss-Wright to its stockholders or bondholders.
(e) Further Information. Curtiss-Wright will promptly furnish
to the Agent, with a copy for each Lender, such other information and in such
form as the Agent or any Lender may reasonably request from time to time.
(f) Notice of Certain Events. Promptly upon becoming aware of
any of the following, Curtiss-Wright shall give the Agent notice thereof,
together with a written statement of a Responsible Officer of Curtiss-Wright
setting forth the details thereof and any action with respect thereto taken or
proposed to be taken by such Borrower:
(i) Any Event of Default or Potential Default; provided,
however, that Curtiss-Wright shall not be required to deliver notice of
any violation of any covenant contained in Article VI hereof during the
30 days immediately following the onset of such violation if
Curtiss-Wright reasonably believes that such violation will be cured
within such 30 day period;
(ii) Any change in the business, operations or condition
(financial or otherwise) of Curtiss-Wright and its Subsidiaries taken
as a whole which could have a Material Adverse Effect.
(iii) Any pending or threatened action, suit, proceeding or
investigation by or before any Governmental Authority against or
affecting Curtiss-Wright or any Subsidiary of Curtiss-Wright, except
for matters that if adversely decided, individually or in the
aggregate, could not have a Material Adverse Effect.
(iv) Any violation, breach or default by Curtiss-Wright or any
Subsidiary of Curtiss-Wright of or under any agreement or instrument
material to the business, operations or condition (financial or
otherwise) of Curtiss-Wright and its Subsidiaries taken as a whole
which could in the reasonable judgment of Curtiss-Wright have a
Material Adverse Effect.
(v) Any Termination Event. Such notice shall be accompanied
by: (A) a copy of any notice, request, return, petition or other
document received by Curtiss-Wright or any Controlled Group Member from
any Person, or which has been or is to be filed with or provided to any
Person (including without limitation the Internal Revenue Service, PBGC
or any Plan participant, beneficiary, alternate payee or employer
representative), in connection with such Termination Event, and (B) in
the case of any Termination Event with respect to a Plan, the most
recent Annual Report (5500 Series), with attachments thereto, and the
most recent actuarial valuation report, for such Plan.
The Agent shall promptly deliver to each Lender copies of all
notices received pursuant to this Section 6.01.
. Each Borrower covenants that upon reasonable notice it will permit any Person
reasonably designated by the Agent or any Lender in writing and who is acting on
behalf of the Agent or any Lender pursuant to this Agreement, at the Agent's or
such Lender's expense, to visit any of the properties of such Borrower and to
discuss the affairs, finances and accounts of any of such corporations with the
principal officers of such Borrower and with such Borrower's independent
accountants, all at such reasonable times and as often as the Agent or any
Lender may reasonably request. Such Person shall contact a Borrower's
independent accountants only through such Borrower, and not directly. Each
Borrower shall have the right to have an officer, employee or other
representative present during any discussion relating to such Borrower with such
Borrower's independent accountants.
. Each Borrower covenants that it will pay and discharge and will cause each of
its Subsidiaries to pay and discharge all taxes, assessments and governmental
charges or levies imposed upon it or upon its income or profits, or upon any
properties belonging to it, and all lawful claims which, if unpaid, would become
a Lien upon any of its properties; provided that no Borrower nor any Subsidiary
of any Borrower shall be required to pay any such tax, assessment, charge, levy
or claim which is being contested in good faith and by appropriate proceedings.
. Each Borrower and each Significant Subsidiary covenants that it will (a)
preserve and maintain its corporate existence, and its material rights,
franchises and privileges in the jurisdiction of its incorporation, and (b)
qualify and remain qualified as a foreign corporation in each jurisdiction in
which failure to so qualify would have a Material Adverse Effect.
. Each Borrower covenants that it and each of its Subsidiaries will comply with
the requirements of all applicable Laws (including without limitation
Environmental Laws), noncompliance with which would have a Material Adverse
Effect upon any Borrower's ability to perform its obligations under this
Agreement, unless the same is being contested in good faith and by appropriate
proceedings and such contest shall operate to stay the Material Adverse Effect
of any such noncompliance.
. Each Borrower covenants that it and each of its Subsidiaries will maintain
insurance with responsible and reputable insurance companies in such amounts,
with such deductibles and covering such risks as is usually maintained by
companies engaged in similar businesses and owning similar properties.
. Each Borrower covenants that it will deliver to the Agent, with a copy for
each Lender, promptly upon the request by the Agent or any Lender, copies of all
Environmental Claims made or brought against any Borrower or any Subsidiary of
any Borrower. Curtiss-Wright covenants to provide to the Agent, with a copy for
each Lender, promptly upon a request by the Agent or any Lender, a report
describing the principal facts and circumstances known to Curtiss-Wright
underlying all such Environmental Claims, together with Curtiss-Wright's then
current estimate as to its probable liability with respect thereto.
Curtiss-Wright covenants that it will deliver to the Agent, with a copy for each
Lender, concurrently with the financial statements delivered pursuant to Section
6.01 hereof, a report describing the principal facts and circumstances known to
Curtiss-Wright underlying each Environmental Claim made or brought against
Curtiss-Wright or any of its Subsidiaries during such quarter and providing an
update of the principal facts and circumstances known to Curtiss-Wright
underlying each Environmental Claim made or brought against Curtiss-Wright or
any of its Subsidiaries during a prior quarter and not, as of the end of the
applicable quarter, terminated or resolved. Curtiss-Wright covenants that it
shall make available for meetings with the Agent or any Lender and its
consultants and advisors appropriate personnel employed by or consultants
retained by Curtiss-Wright and its Subsidiaries having knowledge of such
matters. With respect to each Environmental Claim, Curtiss-Wright shall make
available to the Agent and each Lender for inspection and copying such
historical and operational information, copies of correspondence with
Governmental Authorities and environmental audits or reviews regarding
properties, products and wastes of Curtiss-Wright or its Subsidiaries as are
within its possession, custody or control. The Agent shall promptly deliver to
each Lender copies of all notices received pursuant to this Section 6.07.
. Each Borrower shall, and shall cause each of its Subsidiaries to, keep and
maintain in full force and effect all Governmental Actions necessary in
connection with the operation of its business.
. Each Borrower shall, and shall cause each of its Subsidiaries to, maintain or
cause to be maintained in good repair, working order and condition the material
properties now or hereafter owned, leased or otherwise possessed by it and shall
make or cause to be made all needful and proper repairs, renewals, replacements
and improvements thereto so that they are able to serve the functions for which
they are currently being used.
. No Borrower shall, nor shall it permit any of its Subsidiaries to, conflict
with, be in conflict with, or be or remain subject to any liability (contingent
or otherwise) on account of any conflict with
(a) any Law,
(b) its articles of incorporation of by-laws (or other
constituent documents), or
(c) any agreement or instrument to which it is party or by
which any of them or any of their respective Subsidiaries is a party or by which
any of them or any of their respective properties (now owned or hereafter
acquired) may be subject or bound
except for matters which, individually or in the aggregate, could not have a
Material Adverse Effect.
. Each Borrower shall, and shall cause each of its Subsidiaries to, keep proper
books of record and account in accordance with normal business practice in which
full and appropriate entries shall be made of all dealings or transactions in
relation to its business and activities.
. The Borrowers shall apply the proceeds of Loans hereunder (i) to fund
acquisitions permitted by Section 7.06 hereof, (ii) for general working capital
and corporate purposes, and (iii) for Curtiss-Wright to repurchase its stock,
subject to compliance with the terms of this Agreement. The Borrowers shall not
use the proceeds of any Loans hereunder directly or indirectly for any unlawful
purpose or in any manner inconsistent with any other provision of any Loan
Document.
. The Borrowers and their respective Subsidiaries considered as a whole shall
continue to engage in their businesses substantially as conducted and operated
during the present and preceding fiscal year, and the Borrowers shall not, and
shall not permit any of their respective Subsidiaries to, (a) make any material
change in its or their respective businesses, or in the nature of its or their
respective operations, (b) liquidate or dissolve itself (or suffer any
liquidation or dissolution) or (c) convey, sell, assign, transfer or otherwise
dispose of any capital stock of or other ownership interest in any Significant
Subsidiaries held by it.
. The Borrowers shall not, and shall not suffer any of their respective
Subsidiaries to, file or consent to the filing of any consolidated income tax
return with any Person other than the Borrowers and their respective
Subsidiaries.
. The Borrowers shall not, and shall not suffer any of their respective
Subsidiaries to, change its fiscal year or fiscal quarter except in accordance
with GAAP.
. Each Borrower shall take all actions necessary and commit adequate resources
to assure that its computer-based and other systems (and those of all its
Subsidiaries) are able to effectively process data, including dates before, on
and after January 1, 2000, to avoid experiencing any Year 2000 Problem that
could reasonably be expected to cause a Material Adverse Effect.
. 6.17. ERISA Compliance
With respect to any Plan neither any Borrower nor any
Subsidiary of any Borrower shall:
(a) engage in any "prohibited transaction" (as such term is
defined in Section 406 of ERISA or Section 4975 of the Code) for which a civil
penalty pursuant to Section 502(i) of ERISA or a tax pursuant to Section 4975 of
the Code in excess of $1,000,000 could be imposed;
(b) permit to be incurred any "accumulated funding deficiency"
(as such term is defined in Section 302 of ERISA) in excess of $1,000,000,
whether or not waived;
(c) permit the occurrence of any Termination Event which could
result in a liability to any member of the Controlled Group in excess of
$1,000,000;
(d) be an "employer" (as such term is defined in Section 3(5)
of ERISA) required to contribute to any Multiemployer Plan or a "substantial
employer" (as such term is defined in Section 4001(a)(2) of ERISA) required to
contribute to any Multiemployer Plan; or
(e) permit the establishment, or amendment of any Plan or fail
to comply with the applicable provisions of ERISA and the Code with respect to
any Plan which could reasonably be expected to result in liability to any member
of the Controlled Group which, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect.
6.18. Additional Subsidiary Guarantors. Curtiss-Wright will
cause each Person which is or becomes a Significant Subsidiary or Subsidiary
Borrower (other than a Subsidiary which is not organized under the laws of the
United States or a state or political subdivision jurisdiction thereof) to
become a Subsidiary Guarantor as promptly as practicable after (but in any event
within 90 days of) the date such Person first satisfies the foregoing criteria,
by causing such Subsidiary to execute and deliver to the Agent a Subsidiary
Guaranty, together with all documents which the Agent may reasonably request
relating to the existence of such Subsidiary, the corporate authority for and
the validity of such Subsidiary Guaranty, and any other matters reasonably
determined by the Agent to be relevant thereto, all in form and substance
reasonably satisfactory to the Agent.
ARTICLE VII
NEGATIVE COVENANTS
So long as any Loan or Letter of Credit is outstanding, any
Obligation is outstanding, the Issuing Bank has any obligation to issue, or the
Lenders have any obligation to participate in, Letters of Credit, or the Lenders
have any obligation to make any Loan:
7.01. Financial Covenants. Curtiss-Wright covenants that it
will not:
(a) Leverage Ratio. Permit the Leverage Ratio at any
time to exceed 3.0:1.0.
(b) Interest Coverage Ratio. Permit the Interest Coverage
Ratio at any time to be less than 3.0:1.0.
(c) Consolidated Net Worth. Permit the Consolidated Net Worth
at any time to be less than $215,000,000 plus an amount to be added on the last
day of each quarter during the term of this Agreement equal to 50% of the
Consolidated Net Income (excluding net losses) less 50% of any after-tax gain
associated with sales by Curtiss-Wright of real estate (to the extent included
in Consolidated Net Income), for the immediately preceding quarter, beginning
December 31, 1999. For purposes of calculation of Consolidated Net Worth
pursuant to this Section 7.01(c), Curtiss-Wright's repurchase of its stock in
the maximum aggregate amount of $47,500,000 shall not be considered a reduction
of Consolidated Net Worth.
7.02. Liens. No Borrower will, nor will it permit any of its
Subsidiaries to create, or assume or permit to exist, any Lien on any of the
properties or assets of any Borrower or any of their respective Subsidiaries,
whether now owned or hereafter acquired except:
(a) ERISA Liens in an aggregate amount at any time outstanding
which, when added to the amount of any Liens outstanding at such time which
arose after the Closing Date and secure Indebtedness of any Subsidiaries of any
Borrower, does not exceed 10% of the Consolidated Net Worth of Curtiss-Wright;
(b) Purchase money mortgages or purchase money security
interests, conditional sale arrangements and other similar security interests,
on property or assets acquired by any Borrower or any Subsidiary of any Borrower
simultaneously (hereinafter referred to individually as a "Purchase Money
Security Interest") or replacements thereof, upon incurring Indebtedness the
proceeds of which are used to acquire such property or asset; provided, however,
that:
(i) The transaction in which any Purchase Money Security
Interest is proposed to be created is not then prohibited by this
Agreement;
(ii) Any Purchase Money Security Interest shall attach only to
the property or asset so acquired in such transaction or any addition
thereto or replacement thereof and shall not extend to or cover any
other assets or properties of any Borrower or any of their respective
Subsidiaries; and
(iii) The Indebtedness secured or covered by any Purchase
Money Security Interest together with any other Indebtedness secured by
the property or asset acquired shall not exceed 100% of the lesser of
the cost or fair market value of the property or asset acquired and
shall not be renewed, extended or prepaid from the proceeds of any
borrowing by any Borrower or any of their respective Subsidiaries;
(c) Liens on the property or assets of any Borrower and its
Subsidiaries in existence immediately prior to the Closing Date as listed on
Schedule 7.02 hereto, provided that no such Lien is spread to cover any
additional property after the Closing Date and the amount of Indebtedness
secured thereby is not increased, provided that the maturity of such
Indebtedness may be extended or renewed;
(d) Liens on all or any part of the property or the assets of
any Subsidiary in favor of any Borrower or any other Subsidiary as security for
the Indebtedness owing to any Borrower or such other Subsidiary of such
Borrower; and
(e) Permitted Liens.
7.03. Indebtedness. No Borrower will, nor will it permit any
of its Subsidiaries to, create incur or suffer to exist any Indebtedness,
except:
(a) the Obligations;
(b) Indebtedness existing (or committed to) on the date
hereof and described on Schedule 7.03 hereto;
(c) Indebtedness which in the aggregate for all Subsidiaries
of Curtiss-Wright at any time does not exceed $25,000,000; and
(d) Deemed Debt which in the aggregate at any time does not
exceed $50,000,000.
. No Borrower will, nor will it permit any of its Subsidiaries to enter into any
agreement or covenant on or after the Closing Date which would directly and
expressly limit or restrict any Borrower's ability to grant any Lien to the
Lenders or to incur additional Indebtedness to the Lenders, whether pursuant to
this Agreement or otherwise (it being understood and agreed that this Section
7.04 is not intended to restrict the Borrowers from entering into any covenant
or agreement limiting generally the ability of any Borrowers from incurring
Indebtedness).
. No Borrower will, nor will it permit any of its Subsidiaries to modify, amend,
supplement or terminate, or agree to modify, amend, supplement or terminate any
of their respective certificates of incorporation or by-laws, in any manner
which would have a material adverse effect upon the interests of the Agent or
any of the Lenders hereunder or under any other agreement to which the Agent or
any Lender is a party.
. No Borrower will, nor will it permit any of its Subsidiaries to merge or
consolidate with any Person or acquire all or substantially all of the assets or
any of the capital stock of any Person; provided, however, that any Borrower or
any Subsidiary thereof may merge or consolidate with another Person or acquire
all or substantially all of the assets or capital stock of another Person if (a)
the Borrower or the Subsidiary, as the case may be, is the surviving
corporation, (b) the Person whose stock or assets are being acquired or is
merging into a Borrower or any Subsidiary of a Borrower is in a similar line of
business as such Borrower, as determined by the Agent, (c) Curtiss-Wright will
be in compliance, on a proforma basis, both before and after the merger,
consolidation or acquisition, with each of the financial covenants in Section
7.01, and (d) after giving effect to any such merger, consolidation or
acquisition, no Potential Default or Event of Default would then exist.
. No Borrower will, nor will it permit any of its Subsidiaries to be or become
subject to any restriction of any nature (whether arising by operation of Law,
by agreement, by its articles of incorporation, by-laws or other constituent
documents of any Subsidiary of such Borrower, or otherwise) on the right of any
Subsidiary of any Borrower from time to time to (w) declare and pay Stock
Payments with respect to capital stock owned by the Borrower or any Subsidiary
of any Borrower, (x) pay any indebtedness, obligations or liabilities from time
to time owed to any Borrower or any Subsidiary of any Borrower, (y) make loans
or advances to any Borrower or any Subsidiary of any Borrower, or (z) transfer
any of its properties or assets to any Borrower or any Subsidiary of any
Borrower, except:
(a) Restrictions pursuant to the Loan Documents;
(b) Legal restrictions of general applicability under the
corporation law under which such Subsidiary is incorporated, and fraudulent
conveyance or similar laws or general applicability for the benefit of creditors
of such Subsidiary generally;
(c) With respect to clause (z) above: (i) nonassignment
provisions of any executory contract or of any lease by any Borrower or such
Subsidiary as lessee, and (ii) restrictions on transfer of property subject to a
Permitted Lien for the benefit of the holder of such Permitted Lien; and
(d) Any restriction contained in an agreement or instrument
applicable to a Subsidiary acquired by any Borrower or any Subsidiary of any
Borrower after the date hereof, which restriction was not entered into in
connection with or in contemplation of such acquisition, and which restriction
is not applicable to any Person, property or assets, other than such acquired
Subsidiary and its property and assets.
. No Borrower will, nor will it permit any of its Subsidiaries
to lease, sell, transfer or otherwise dispose of its property, or permit any
Subsidiary to lease, sell, transfer or otherwise dispose of its property to any
other Person except for (a) sales of Investments in the ordinary course of
business by a Borrower or any Subsidiary of a Borrower, including without
limitation, transactions undertaken for the purpose of restructuring all or a
part of the portfolio of investments owned by such Borrower or Subsidiary
thereof and (b) leases, sales, transfers or other dispositions of its property
that together with all other property of its Subsidiaries previously leased,
sold or disposed of (other than Investments sold in the ordinary course of
business by Subsidiaries of Borrowers) as permitted by this Section 7.08 since
the date hereof do not constitute a Substantial Portion of the property of
Curtiss-Wright and its consolidated Subsidiaries.
. No Borrower will, nor will it permit any of its Subsidiaries
to be or become subject to or bound by any Guaranty Equivalent, or agree, become
or remain liable (contingently or otherwise) to do any of the foregoing, except:
(a) Guaranty Equivalents existing on the date hereof
and listed in Schedule 7.09;
(b) Guaranty Equivalents of Curtiss-Wright in
respect of indebtedness of any of its Subsidiaries;
(c) Contingent liabilities arising from the
endorsement of negotiable or other instruments for deposit or collection or
similar transactions in the ordinary course of business; and
(d) Indemnities by the Borrowers or any of their
respective Subsidiaries of the liabilities of its directors or officers in their
capacities as such pursuant to provisions presently contained in their articles
of incorporation or by-laws (or other constituent documents) or as permitted by
Law; and
(e) the Curtiss-Wright Guaranty and the Subsidiary
Guarantees.
. No Borrower will, nor will it permit any of its Subsidiaries
to enter into or suffer to remain in effect any transaction to which any
Borrower or any Subsidiary of any Borrower is a party involving the sale,
transfer or other disposition by such Borrower or any Subsidiary of any Borrower
of any property (now owned or hereafter acquired), with a view directly or
indirectly to the leasing back of any part of the same property or any other
property used for the same or a similar purpose or purposes, or agree, become or
remain liable (contingently or otherwise) to do any of the foregoing
(collectively, "Sale-Leasebacks"), except Sale-Leasebacks to which any Borrower
or any Subsidiary of any Borrower is a party that will not result in sales,
transfers or other dispositions of more than $2,500,000 in the aggregate at any
time.
. No Borrower will, nor will it permit any of its Subsidiaries
to enter into or suffer to remain in effect any lease, as lessee, of any
property, or agree, become or remain liable (contingently or otherwise) to do
any of the foregoing, except:
(a) Operating leases of data processing equipment,
office equipment, manufacturing equipment, transportation equipment or office
space used by the lessee in the ordinary course of business, provided that such
leases will not result in the payment or accrual by the Borrowers and their
respective Subsidiaries of more than $5,000,000 in the aggregate in any
twelve-month period and no such lease has a term longer than 8 years;
(b) Leases cancelable by the lessee without penalty
on not more than 90 days' notice;
(c) Leases by a Borrower or any Subsidiary of a
Borrower, as lessor to any other
Borrower or Subsidiary of a Borrower, as lessee; and
(d) Leases described on Schedule 7.11.
. No Borrower will, nor will it permit any of its Subsidiaries
to enter into or permit any Subsidiary to enter into any transaction (including,
without limitation, the purchase or sale of any property or service) with, or
make any payment or transfer to, any Affiliate of such Borrower or Subsidiary
except in the ordinary course of business and pursuant to the reasonable
requirements of such Borrower's or such Subsidiary's business and upon fair and
reasonable terms no less favorable to such Borrower or such Subsidiary than the
Borrower or such Subsidiary would obtain in a comparable arm's-length
transaction.
ARTICLE VIII
EVENTS OF DEFAULT
. An Event of Default shall mean the occurrence or existence of one or more of
the following events or conditions (for any reason, whether voluntary,
involuntary or effected or required by Law):
(a) Any Borrower shall fail to pay when due principal of any
Loan or Letter of Credit Reimbursement Obligations.
(b) Any Borrower shall fail to pay when due interest on any
Loan, or any fees, indemnity or expenses, or any other amount due hereunder or
under any other Loan Document and such failure shall have continued for a period
of five days.
(c) Any representation or warranty made or deemed made by any
Borrower in or pursuant to any Loan Document or in any certificate delivered
thereunder, or any statement made by any Borrower in any financial statement,
certificate, report, exhibit or document furnished by a Borrower to either the
Agent or any Lender pursuant to or in connection with any Loan Document, shall
prove to have been false or misleading in any material respect as of the time
when made or deemed made (including by omission of material information
necessary to make such representation, warranty or statement not misleading).
(d) Any Borrower shall default in the performance or
observance of any covenant, agreement or duty under this Agreement or any other
Loan Document and such default shall have continued (i) in the case of any
default in the performance or observance of any covenant set forth in Sections
6.04(a), 7.04, 7.06, 7.07 or 7.08 hereof, for a period of 30 days after the
first occurrence of such default, and (ii) in the case of a default in the
performance or observance of any other covenant, agreement or duty contained
herein, for a period of 30 days after notice from the Agent to the applicable
Borrower.
(e) (i) Any Borrower shall fail to perform or observe any
term, condition or covenant of any bond, note, debenture, loan agreement,
indenture, guaranty, trust agreement, mortgage or similar instrument (other than
a non-recourse obligation) to which any Borrower is a party or by which it is
bound, or to which any of its properties or assets is subject (a "Debt
Instrument"), so that, as a result of any such failure to perform, the
Indebtedness included therein or secured or covered thereby may at the time be
declared due and payable prior to the date on which such Indebtedness would
otherwise become due and payable; or (ii) any event or condition referred to in
any Debt Instrument shall occur or fail to occur, so that, as a result thereof,
the Indebtedness included therein or secured or covered thereby may at such time
be declared due and payable prior to the date on which such Indebtedness would
otherwise become due and payable; or (iii) the Borrower shall fail to pay any
Indebtedness when due, pursuant to demand under any Debt Instrument or
otherwise; provided, however, that each of clauses (i), (ii) and (iii) above
shall be subject to any applicable grace period provided in the relevant Debt
Instrument; and provided, further, that the provisions of this Section 8.01(e)
shall be applicable only if the aggregate principal amount of such Indebtedness
exceeds $5,000,000.
(f) One or more final judgments for the payment of money shall
have been entered against any Borrower, which judgment or judgments exceed
$5,000,000 in the aggregate, and such judgment or judgments shall have remained
undischarged, in effect, and unstayed or unbonded for a period of thirty
consecutive days.
(g) One or more writs or warrants of attachment, garnishment,
execution, distraint or similar process exceeding in value the aggregate amount
of $5,000,000 shall have been issued against any Borrower or any of its
properties and shall have remained undischarged, in effect and unstayed or
unbonded for a period of thirty consecutive days.
(h) A Change of Control shall have occurred.
(i) This Agreement or any Loan Document or term or provision
hereof or thereof shall cease to be in full force and effect, or any Borrower
shall, or shall purport to, terminate (other than termination in accordance with
the last sentence of Section 2.02(b) hereof), repudiate, declare voidable or
void or otherwise contest, this Agreement or any Loan Document or term or
provision hereof or thereof or any obligation or liability of any Borrower
hereunder or thereunder.
(j) Any one or more Termination Events shall have occurred.
(k) A proceeding shall have been instituted in respect of any
Borrower or any Subsidiary of a Borrower:
(i) seeking to have an order for relief entered in
respect of such Person, or seeking a declaration or entailing
a finding that such Person is insolvent or a similar
declaration or finding, or seeking dissolution, winding-up,
charter revocation or forfeiture, liquidation, reorganization,
arrangement, adjustment, composition or other similar relief
with respect to such Person, its assets or its debts under any
Law relating to bankruptcy, insolvency, relief of debtors or
protection of creditors, termination of legal entities or any
other similar Law now or hereafter in effect, or
(ii) seeking appointment of a receiver, trustee,
liquidator, assignee, sequestrator or other custodian for such
Person or for all or any substantial part of its property
and such proceeding shall result in the entry, making or grant of any
such order for relief, declaration, finding, relief or appointment, or
such proceeding shall remain undismissed, unstayed and unbonded for a
period of sixty consecutive days.
(l) Any Borrower or any Subsidiary of any Borrower shall
become insolvent; shall fail to pay, become unable to pay, or state that it is
or will be unable to pay, its debts as they become due; shall voluntarily
suspend transaction of its business; shall make a general assignment for the
benefit of creditors; shall institute (or fail to controvert in a timely and
appropriate manner) a proceeding described in Section 8.01(k)(i) hereof, or
(whether or not any such proceeding has been instituted) shall consent to or
acquiesce in any such order for relief, declaration, finding or relief described
therein; shall institute (or fail to controvert in a timely and appropriate
manner) a proceeding described in Section 8.01(k)(ii) hereof, or (whether or not
any such proceeding has been instituted) shall consent to or acquiesce in any
such appointment or to the taking of possession by any such custodian of all or
any substantial part of its property; shall dissolve, wind-up, revoke or forfeit
its charter (or other constituent documents) or liquidate itself or any
substantial part of its property; or shall take any action in furtherance of any
of the foregoing.
(m) Any consent, approval or other action by any Governmental
Authority that is necessary for the valid execution, delivery or performance by
the Borrowers of this Agreement ceases to be in full force and effect and the
cessation of such consent, approval or other action could reasonably be expected
to have a Material Adverse Effect.
(n) Curtiss-Wright shall cease to own, beneficially or of
record, directly or indirectly, 100% of the issued and outstanding shares of
capital stock of any Significant Subsidiary or any other Subsidiary Borrower.
. 8.02. Consequences of an Event of Default
(a) If an Event of Default specified in subsections (a)
through (j), (l), (m) or (n) of Section 8.01 hereof shall occur and be
continuing or shall exist, then, in addition to all other rights and remedies
which the Agent or any Lender may have hereunder or under any other Loan
Document, at law, in equity or otherwise, the Lenders shall be under no further
obligation to make Loans hereunder, the Issuing Bank shall be under no further
obligation to issue Letters of Credit hereunder and the Agent, upon the written
request of the Required Lenders shall, by notice to the Borrowers, from time to
time do any or all of the following:
(i) Declare the Revolving Credit Commitments terminated,
whereupon the Commitments will terminate and any fees accrued but
unpaid hereunder shall be immediately due and payable without
presentment, demand, protest or further notice of any kind, all of
which are hereby waived, and an action therefor shall immediately
accrue.
(ii) Declare the unpaid principal amount of the Loans,
interest accrued thereon and all other Obligations to be immediately
due and payable without presentment, demand, protest or further notice
of any kind, all of which are hereby waived, and an action therefor
shall immediately accrue.
(b) If an Event of Default specified in subsection (k) or (l)
of Section 8.01 hereof shall occur or exist, then, in addition to all other
rights and remedies which the Agent or any Lender may have hereunder or under
any other Loan Document, at law, in equity or otherwise, the Revolving Credit
Commitments shall automatically terminate and the Lenders shall be under no
further obligation to make Loans, the Issuing Bank shall be under no further
obligation to issue Letters of Credit hereunder and the unpaid principal amount
of the Loans, Letter of Credit Reimbursement Obligations, interest accrued
thereon and all other Obligations shall become immediately due and payable
without presentment, demand, protest or notice of any kind, all of which are
hereby waived, and an action therefor shall immediately accrue.
(c) Without limitation of other rights and remedies under this
Agreement or the Loan Documents or at law or in equity, if all of the
Obligations shall have become due and payable pursuant to clause (a) or (b) of
this Section 8.02, the Borrowers shall immediately pay to the Agent, for deposit
in the Letter of Credit Collateral Account, an amount equal to the excess, if
any, of the aggregate Letter of Credit Exposure at such time over the balance in
the Letter of Credit Collateral Account. Amounts in the Letter of Credit
Collateral Account shall be applied by the Agent to the Obligations as the
Required Lenders shall elect.
. If any Lender or the Agent obtains a judgment against any Borrower in an Other
Currency, the obligations of such Borrower in respect of any sum adjudged to be
due to such Lender or the Agent hereunder or under the Revolving Credit Notes
(the "Judgment Amount") shall be discharged only to the extent that, on the
Business Day following receipt by such Lender or the Agent of the Judgment
Amount in such Other Currency, such Lender or Agent, in accordance with normal
banking procedures, purchases Dollars with the Judgment Amount in such Other
Currency. If the amount of Dollars so purchased is less than the amount of
Dollars that could have been purchased with the Judgment Amount on the date or
dates the Judgment Amount was originally due and owing to the Lenders or the
Agent hereunder or under the Revolving Credit Notes (the "Original Due Date")
(excluding the portion of the Judgment Amount which has accrued as a result of
the failure of any Borrower to pay the sum originally due hereunder or under the
Revolving Credit Notes when it was originally due hereunder or under the
Revolving Credit Notes) (the "Loss"), the Borrowers agree to indemnify such
Lender or the Agent, as the case may be, against the Loss, and if the amount of
Dollars so purchased exceeds the amount of Dollars that could have been
purchased with the Judgment Amount on the Original Due Date, such Lender or the
Agent agrees to remit such excess to the applicable Borrower.
ARTICLE IX
THE AGENT
. Each Lender hereby irrevocably appoints Mellon to act as Agent for such Lender
under this Agreement and the other Loan Documents. Each Lender hereby
irrevocably authorizes the Agent to take such action on behalf of such Lender
under the provisions of this Agreement and the other Loan Documents, and to
exercise such powers and to perform such duties, as are expressly delegated to
or required of the Agent by the terms hereof or thereof, together with such
powers as are reasonably incidental thereto. Mellon hereby agrees to act as
Agent on behalf of the Lenders on the terms and conditions set forth in this
Agreement and the other Loan Documents, subject to its right to resign as
provided in Section 9.10 hereof. Each Lender hereby irrevocably authorizes the
Agent to execute and deliver each of the Loan Documents and to accept delivery
of such of the other Loan Documents as may not require execution by the Agent.
Each Lender agrees that the rights and remedies granted to the Agent under the
Loan Documents shall be exercised exclusively by the Agent, and that no Lender
shall have any right individually to exercise any such right or remedy, except
to the extent expressly provided herein or therein.
. Notwithstanding anything to the contrary elsewhere in this Agreement or in
any other Loan Document:
(a) The Agent shall have no duties or responsibilities except
those expressly set forth in this Agreement and the other Loan Documents, and no
implied duties or responsibilities on the part of the Agent shall be read into
this Agreement or any Loan Document or shall otherwise exist; provided, however,
that nothing contained in this Article IX shall affect the express duties and
responsibilities of the Agent to the Borrowers under this Agreement and the
other Loan Documents.
(b) The duties and responsibilities of the Agent under this
Agreement and the other Loan Documents shall be mechanical and administrative in
nature, and the Agent shall not have a fiduciary relationship in respect of any
Lender.
(c) The Agent is and shall be solely the agent of the Lenders.
The Agent does not assume, and shall not at any time be deemed to have, any
relationship of agency or trust with or for, or any other duty or responsibility
to, the Borrowers or any other Person (except only for its relationship as agent
for the Lenders, and its express duties and responsibilities to the Lenders and
the Borrowers, as provided in this Agreement and the other Loan Documents).
(d) The Agent shall be under no obligation to take any action
hereunder or under any other Loan Document if the Agent believes in good faith
that taking such action may conflict with any Law or any provision of this
Agreement or any other Loan Document, or may require the Agent to qualify to do
business in any jurisdiction where it is not then so qualified.
. The Agent shall take any action of the type specified in this Agreement or any
other Loan Document as being within the Agent's rights, powers or discretion in
accordance with directions from the Required Lenders (or, to the extent this
Agreement or such Loan Document expressly requires the direction or consent of
some other Person or set of Persons, then instead in accordance with the
directions of such other Person or set of Persons). In the absence of such
directions, the Agent shall have the authority (but under no circumstances shall
be obligated), in its sole discretion, to take any such action, except to the
extent this Agreement or such Loan Document expressly requires the direction or
consent of the Required Lenders (or some other Person or set of Persons), in
which case the Agent shall not take such action absent such direction or
consent. Any action or inaction pursuant to such direction, discretion or
consent shall be binding on all the Lenders. Subject to Section 9.04(a) hereof,
the Agent shall not have any liability to any Person as a result of (x) the
Agent acting or refraining from acting in accordance with the directions of the
Required Lenders (or other applicable Person or set of Persons), (y) the Agent
refraining from acting in the absence of instructions to act from the Required
Lenders (or other applicable Person or set of Persons), whether or not the Agent
has discretionary power to take such action, or (z) the Agent taking
discretionary action it is authorized to take under this Section.
. Notwithstanding anything to the contrary elsewhere in this Agreement or any
other Loan Document:
(a) Neither the Agent nor the Issuing Bank shall be liable for
any action taken or omitted to be taken by it under or in connection with this
Agreement or any other Loan Document, unless caused by its own gross negligence
or willful misconduct.
(b) Neither the Agent nor the Issuing Bank shall be
responsible for (i) the execution, delivery, effectiveness, enforceability,
genuineness, validity or adequacy of this Agreement or any other Loan Document,
(ii) any recital, representation, warranty, document, certificate, report or
statement in, provided for in, or received under or in connection with, this
Agreement or any other Loan Document, or (iii) any failure of any Lender to
perform any of its obligations under this Agreement or any other Loan Document.
(c) Neither the Agent nor the Issuing Bank shall be under any
obligation to ascertain, inquire or give any notice relating to (i) the
performance or observance of any of the terms or conditions of this Agreement or
any other Loan Document on the part of the Borrowers or their respective
Subsidiaries, (ii) the business, operations, condition (financial or otherwise)
or prospects of the Borrowers or their respective Subsidiaries, or any other
Person, or (iii) except to the extent set forth in Section 9.05(f) hereof, the
existence of any Event of Default or Potential Default.
(d) Neither the Agent nor the Issuing Bank shall be under any
obligation, either initially or on a continuing basis, to provide any Lender
with any notices, reports or information of any nature, whether in its
possession presently or hereafter, except for such notices, reports and other
information expressly required by this Agreement or any other Loan Document to
be furnished by the Agent or the Issuing Bank to such Lender.
. 9.05. Administration by the Agent and the Issuing Bank
(a) Each of the Agent and the Issuing Bank may rely upon any
notice or other communication of any nature (written or oral, including but not
limited to telephone conversations, whether or not such notice or other
communication is made in a manner permitted or required by this Agreement or any
Loan Document) purportedly made by or on behalf of the proper party or parties,
and each of the Agent and the Issuing Bank shall not have any duty to verify the
identity or authority of any Person giving such notice or other communication.
(b) Each of the Agent and the Issuing Bank may consult with
legal counsel (including, without limitation, in-house counsel for the Agent or
the Issuing Bank, respectively, or in-house or other counsel for any Borrower),
independent public accountants and any other experts selected by it from time to
time, and each of the Agent and the Issuing Bank shall not be liable for any
action taken or omitted to be taken in good faith by it in accordance with the
advice of such counsel, accountants or experts.
(c) Each of the Agent and the Issuing Bank may conclusively
rely upon the truth of the statements and the correctness of the opinions
expressed in any certificates or opinions furnished to the Agent or the Issuing
Bank in accordance with the requirements of this Agreement or any other Loan
Document. Whenever either the Agent or the Issuing Bank shall deem it necessary
or desirable that a matter be proved or established with respect to any Borrower
or any Lender, such matter may be established by a certificate of the applicable
Borrower or such Lender, as the case may be, and either the Agent or the Issuing
Bank may conclusively rely upon such certificate (unless other evidence with
respect to such matter is specifically prescribed in this Agreement or another
Loan Document).
(d) Each of the Agent and the Issuing Bank may fail or refuse
to take any action unless it shall be indemnified to its satisfaction from time
to time against any and all amounts, liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature which may be imposed on, incurred by or asserted against the
Agent and the Issuing Bank by reason of taking or continuing to take any such
action.
(e) The Agent may perform any of its duties under this
Agreement or any other Loan Document by or through agents or attorneys-in-fact.
The Agent shall not be responsible for the negligence or misconduct of any
agents or attorneys-in fact selected and supervised by it with reasonable care.
(f) Neither the Agent nor the Issuing Bank shall be deemed to
have any knowledge or notice of the occurrence of any Event of Default or
Potential Default unless the Agent has received notice from a Lender or any
Borrower referring to this Agreement, describing such Event of Default or
Potential Default. If the Agent receives such a notice, the Agent shall give
prompt notice thereof to each Lender and if the Issuing Bank receives such a
notice, the Issuing Bank shall give prompt notice thereof to the Agent.
. Each Lender acknowledges as follows: (a) Neither the Agent nor any other
Lender has made any representations or warranties to it, and no act taken
hereafter by the Agent or any other Lender shall be deemed to constitute any
representation or warranty by the Agent or such other Lender to it. (b) It has,
independently and without reliance upon the Agent or any other Lender, and based
upon such documents and information as it has deemed appropriate, made its own
credit and legal analysis and decision to enter into this Agreement and the
other Loan Documents. (c) It will, independently and without reliance upon the
Agent or any other Lender, and based upon such documents and information as it
shall deem appropriate at the time, make its own decisions to take or not take
action under or in connection with this Agreement and the other Loan Documents.
. Each Lender agrees to reimburse and indemnify each of the Agent and the
Issuing Bank and their respective directors, officers, employees and agents (to
the extent not reimbursed by the Borrowers and without limitation of the
obligations of the Borrowers to do so), Pro Rata, from and against any and all
amounts, losses, liabilities, claims, damages, expenses, obligations, penalties,
actions, judgments, suits, costs or disbursements of any kind or nature
(including, without limitation, the fees and disbursements of counsel for the
Agent or the Issuing Bank or such other Person in connection with any
investigative, administrative or judicial proceeding commenced or threatened,
whether or not the Agent or the Issuing Bank or such other Person shall be
designated a party thereto) that may at any time be imposed on, incurred by or
asserted against the Agent or the Issuing Bank or such other Person as a result
of, or arising out of, or in any way related to or by reason of, this Agreement,
any other Loan Document, any transaction from time to time contemplated hereby
or thereby, or any transaction financed in whole or in part or directly or
indirectly with the proceeds of any Loan, provided that no Lender shall be
liable for any portion of such amounts, losses, liabilities, claims, damages,
expenses, obligations, penalties, actions, judgments, suits, costs or
disbursements resulting solely from the gross negligence or willful misconduct
of the Agent or the Issuing Bank or such other Person, as finally determined by
a court of competent jurisdiction. Payments under this Section 9.07 shall be due
and payable on demand, and to the extent that any Lender fails to pay any such
amount on demand, such amount shall bear interest for each day from the date of
demand until paid (before and after judgment) at a rate per annum (calculated on
the basis of a year of 365 or 366 days, as the case may be, and actual days
elapsed) which for each day shall be equal to the Prime Rate.
. With respect to its Revolving Credit Commitments and the Obligations owing to
it, the Agent shall have the same rights and powers under this Agreement and
each other Loan Document as any other Lender and may exercise the same as though
it were not the Agent, and the terms "Lenders," "holders of Notes" and like
terms shall include the Agent in its individual capacity as such. The Agent and
its affiliates may, without liability to account, make loans to, accept deposits
from, acquire debt or equity interests in, act as trustee under indentures of,
and engage in any other business with, any Borrower and any stockholder,
subsidiary or affiliate of any Borrower, as though the Agent were not the Agent
hereunder.
. The Agent may deem and treat the Lender which is payee of a Note as the owner
and holder of such Note for all purposes hereof unless and until a Transfer
Supplement with respect to the assignment or transfer thereof shall have been
filed with the Agent in accordance with Section 10.14 hereof. Any authority,
direction or consent of any Person who at the time of giving such authority,
direction or consent is shown in the Register as being a Lender shall be
conclusive and binding on each present and subsequent holder, transferee or
assignee of any Note or Notes payable to such Lender or of any Note or Notes
issued in exchange therefor.
. The Agent may resign at any time by giving 10 days' prior written notice
thereof to the Lenders and the Borrowers. The Agent may be removed by the
Required Lenders at any time by giving 10 days' prior written notice thereof to
the Agent, the other Lenders and the Borrowers. Upon any such resignation or
removal, the Required Lenders shall have the right to appoint a successor Agent.
If no successor Agent shall have been so appointed and consented to, and shall
have accepted such appointment, within 30 days after such notice of resignation
or removal, then the retiring Agent may, on behalf of the Lenders, appoint a
successor Agent. Each successor Agent shall be a commercial bank or trust
company organized or licensed under the laws of the United States of America or
any State thereof and having a combined capital and surplus of at least
$1,000,000,000. Upon the acceptance by a successor Agent of its appointment as
Agent hereunder, such successor Agent shall thereupon succeed to and become
vested with all the properties, rights, powers, privileges and duties of the
former Agent, without further act, deed or conveyance. Upon the effective date
of resignation or removal of a retiring Agent, such Agent shall be discharged
from its duties under this Agreement and the other Loan Documents, but the
provisions of this Agreement shall inure to its benefit as to any actions taken
or omitted by it while it was Agent under this Agreement. If and so long as no
successor Agent shall have been appointed, then any notice or other
communication required or permitted to be given by the Agent shall be
sufficiently given if given by the Required Lenders, all notices or other
communications required or permitted to be given to the Agent shall be given to
each Lender, and all payments to be made to the Agent shall be made directly to
the Borrower or Lender for whose account such payment is made.
. If the Agent shall from time to time deem it necessary or advisable, for its
own protection in the performance of its duties hereunder or in the interest of
the Lenders and if the Borrowers and the Required Lenders shall consent (which
consent shall not be unreasonably withheld), the Agent and the Borrowers shall
execute and deliver a supplemental agreement and all other instruments and
agreements necessary or advisable, in the opinion of the Agent, to constitute
another commercial bank or trust company, or one or more other Persons approved
by the Agent, to act as co-Agent, with such powers of the Agent as may be
provided in such supplemental agreement, and to vest in such bank, trust company
or Person as such co-Agent or separate agent, as the case may be, any
properties, rights, powers, privileges and duties of the Agent under this
Agreement or any other Loan Document.
. The Agent shall not be liable for any calculation, apportionment or
distribution of payments made by it in good faith. If such calculation,
apportionment or distribution is subsequently determined to have been made in
error, the sole recourse of any Lender to whom payment was due but not made
shall be to recover from the other Lenders any payment in excess of the amount
to which they are determined to be entitled.
. Curtiss-Wright agrees to pay to the Agent, for its individual account,
Agent's fees in the amounts set forth in the Agent's fee letter.
. Unless the Agent shall have been notified in writing by any Lender not later
than the close of business on the day before the day on which Loans are
requested by any Borrower to be made that such Lender will not make its Pro Rata
share of such Loans, the Agent may assume that such Lender will make its Pro
Rata share of the Loans, and in reliance upon such assumption the Agent may (but
in no circumstances shall be required to) make available to any Borrower a
corresponding amount. If and to the extent that any Lender fails to make such
payment to the Agent on such date, such Lender shall pay such amount on demand
(or, if such Lender fails to pay such amount on demand, the applicable Borrower
shall pay such amount on demand), together with interest, for the Agent's own
account, for each day from and including the date of the Agent's payment to and
including the date of repayment to the Agent (before and after judgment) at the
rate per annum applicable to such Loans. All payments to the Agent under this
Section shall be made to the Agent at its Office in Dollars in funds immediately
available at such Office, without set-off, withholding, counterclaim or other
deduction of any nature.
9.15. Syndication Agent and Documentation Agent. The titles
"Syndication Agent" and "Documentation Agent" given to certain Lenders named on
the cover page of this Agreement are purely honorific, and no Syndication Agent
or Documentation Agent, as the case may be, in its capacity as such, shall have
any duties or responsibilities hereunder.
ARTICLE X
MISCELLANEOUS
. Whenever any payment or action to be made or taken hereunder or under any
other Loan Document shall be stated to be due on a day which is not a Business
Day, such payment or action shall be made or taken on the next following
Business Day and such extension of time shall be included in computing interest
or fees, if any, in connection with such payment or action.
. The unpaid principal amount of the Loans owing to each Lender, the unpaid
interest accrued thereon, the interest rate or rates applicable to such unpaid
principal amount, the duration of such applicability, each Lender's Revolving
Credit Committed Amount and the accrued and unpaid Facility Fees shall at all
times be ascertained from the records of the Agent, which shall be conclusive
absent manifest error.
. Neither this Agreement nor any Loan Document may be amended, modified or
supplemented except in accordance with the provisions of this Section. The
Required Lenders and the Borrowers may from time to time amend, modify or
supplement the provisions of this Agreement or any other Loan Document for the
purpose of amending, adding to, or waiving any provisions or changing in any
manner the rights and duties of the Borrowers, the Agent or any Lender. Any such
amendment, modification or supplement made in accordance with the provisions of
this Section shall be binding upon the Borrowers, each Lender and the Agent. The
Agent shall enter into such amendments, modifications or supplements from time
to time as directed by the Required Lenders, and only as so directed, provided,
that no such amendment, modification or supplement may be made which will:
(a) Increase the Revolving Credit Committed Amount of any
Lender over the amount thereof then in effect, or extend the Revolving Credit
Maturity Date, without the written consent of each Lender affected thereby;
(b) Reduce the principal amount of or extend the time for any
payment of any Loan, or reduce the amount of or rate of interest or extend the
time for payment of interest borne by any Loan or extend the time for payment of
or reduce the amount of any Facility Fee or reduce or postpone the date for
payment of any other fees, expenses, indemnities or amounts payable under any
Loan Document, without the written consent of each Lender affected thereby;
(c) Change the definition of "Required Lenders" or amend this
Section 10.03, without the written consent of all the Lenders;
(d) Release any collateral from the Letter of Credit
Collateral Account without the written consent of all Lenders;
(e) Release any "Guarantor" or reduce any "Guaranteed
Obligations" (as such terms are defined in the Subsidiary Guarantees) of any
Guarantor under any Subsidiary Guaranty in connection with the sale or other
disposition of all of the capital stock of and other equity interests in such
Guarantor to a Person or Persons other than a Borrower or a Subsidiary of a
Borrower, which sale or other disposition is in compliance with this Agreement
and the Loan Documents (a "Permitted Sale"), without the written consent of the
Required Lenders;
(f) Release any "Guarantor" or reduce any "Guaranteed
Obligations" (as such terms are defined in the Curtiss-Wright Guaranty or
Subsidiary Guarantees, as applicable) of any Guarantor under the Curtiss-Wright
Guaranty or any Subsidiary Guaranty, other than in connection with a Permitted
Sale, without the written consent of all Lenders; or
(g) Amend or waive any of the provisions of Article IX hereof,
or impose additional duties upon the Agent or any Issuing Bank or otherwise
adversely affect the rights, interests or obligations of the Agent or any
Issuing Bank, without the written consent of the Agent and the Issuing Banks;
and provided further, that Transfer Supplements may be entered into in the
manner provided in Section 10.14 hereof. Any such amendment, modification or
supplement must be in writing and shall be effective only to the extent set
forth in such writing. Any Event of Default or Potential Default waived or
consented to in any such amendment, modification or supplement shall be deemed
to be cured and not continuing to the extent and for the period set forth in
such waiver or consent, but no such waiver or consent shall extend to any other
or subsequent Event of Default or Potential Default or impair any right
consequent thereto.
. No course of dealing and no delay or failure of the Agent or any Lender in
exercising any right, power or privilege under this Agreement or any other Loan
Document shall affect any other or future exercise thereof or exercise of any
other right, power or privilege; nor shall any single or partial exercise of any
such right, power or privilege or any abandonment or discontinuance of steps to
enforce such a right, power or privilege preclude any further exercise thereof
or of any other right, power or privilege. The rights and remedies of the Agent
and the Lenders under this Agreement and any other Loan Document are cumulative
and not exclusive of any rights or remedies which either the Agent or any Lender
would otherwise have hereunder or thereunder, at law, in equity or otherwise.
. 10.05. Notices
(a) Except to the extent otherwise expressly permitted
hereunder or thereunder, all notices, requests, demands, directions and other
communications (collectively "notices") under this Agreement or any Loan
Document shall be in writing (including telexed and telecopied communication)
and shall be sent by first-class mail, or by nationally-recognized overnight
courier, or by telex or telecopier (with confirmation in writing mailed
first-class or sent by such an overnight courier), or by personal delivery. All
notices shall be sent to the applicable party at the address stated on the
signature pages hereof or in accordance with the last unrevoked written
direction from such party to the other parties hereto, in all cases with postage
or other charges prepaid. All notices given to Curtiss-Wright under this
Agreement shall be deemed to be given to each Borrower. Any such properly given
notice shall be effective on the earliest to occur of receipt, telephone
confirmation of receipt of telex or telecopy communication, one Business Day
after delivery to a nationally-recognized overnight courier, or three Business
Days after deposit in the mail.
(b) Any Lender giving any notice to the Borrowers shall
simultaneously send a copy thereof to the Agent, and the Agent shall promptly
notify the other Lenders of the receipt by it of any such notice.
(c) The Agent and each Lender may rely on any notice (whether
or not such notice is made in a manner permitted or required by this Agreement
or any Loan Document) purportedly made by or on behalf of the Borrowers, and
neither the Agent nor any Lender shall have any duty to verify the identity or
authority of any Person giving such notice.
. 10.06. Expenses; Taxes; Indemnity
(a) Curtiss-Wright agrees to pay or cause to be paid and to
save the Agent and each of the Lenders harmless against liability for the
payment of all reasonable out-of-pocket costs and expenses (including but not
limited to reasonable fees and expenses of counsel to the Agent and, with
respect to costs incurred by the Agent, or any Lender pursuant to clause (iii)
below, such counsel and local counsel) incurred by the Agent or, in the case of
clause (iii) below any Lender from time to time arising from or relating to (i)
the negotiation, preparation, execution, delivery, administration and
performance of this Agreement and the other Loan Documents, (ii) any requested
amendments, modifications, supplements, waivers or consents (whether or not
ultimately entered into or granted) to this Agreement or any Loan Document, and
(iii) except as to costs and expenses made necessary by reason of the gross
negligence or willful misconduct of the Agent, any Issuing Bank or any Lender,
the enforcement or preservation of rights under this Agreement or any Loan
Document (including but not limited to any such costs or expenses arising from
or relating to (A) collection or enforcement of an outstanding Loan or any other
amount owing hereunder or thereunder by either the Agent or any Lender, (B) any
litigation brought by the Agent, any Lender, any Issuing Bank or such Borrower
and related in any way to this Agreement or the Loan Documents (other than the
costs and expenses incurred by the Agent, any Lender or any Issuing Bank,
respectively, in connection with any litigation which results in a final,
non-appealable judgment against the Agent, such Issuing Bank or such Lender) and
(C) any proceeding, dispute, work-out, restructuring or rescheduling related in
any way to this Agreement or the Loan Documents).
(b) The Borrowers hereby agree to pay all stamp, document,
transfer, recording, filing, registration, search, sales and excise fees and
taxes and all similar impositions now or hereafter determined by the Agent or
any Lender to be payable in connection with this Agreement or any other Loan
Documents or any other documents, instruments or transactions pursuant to or in
connection herewith or therewith, and the Borrowers agree to save the Agent and
each Lender harmless from and against any and all present or future claims,
liabilities or losses with respect to or resulting from any omission to pay or
delay in paying any such fees, taxes or impositions other than those resulting
from omissions to pay or delays in payment attributable to the acts or omissions
of the Agent or any Lender.
(c) Curtiss-Wright hereby agrees to reimburse and indemnify
each of the Indemnified Parties from and against any and all losses,
liabilities, claims, damages, expenses, obligations, penalties, actions,
judgments, suits, costs or disbursements of any kind or nature whatsoever
(including, without limitation, the reasonable fees and disbursements of counsel
for such Indemnified Party in connection with any investigative, administrative
or judicial proceeding commenced or threatened, whether or not such Indemnified
Party shall be designated a party thereto) that may at any time be imposed on,
asserted against or incurred by such Indemnified Party as a result of, or
arising out of, or in any way related to or by reason of, any act or conduct of
any Borrower with respect to or in connection with the transactions described in
this Agreement or any other Loan Document, or any transaction financed in whole
or in part or directly or indirectly with the proceeds of any Loan (and without
in any way limiting the generality of the foregoing, including any violation or
breach of any requirement of Law or any other Law by any Borrower or any
Subsidiary of any Borrower); or any exercise by either the Agent or any Lender
of any of its rights or remedies under this Agreement or any other Loan
Document); but excluding any such losses, liabilities, claims, damages,
expenses, obligations, penalties, actions, judgments, suits, costs or
disbursements resulting solely from the gross negligence or willful misconduct
of such Indemnified Party, as finally determined by a court of competent
jurisdiction. If and to the extent that the foregoing obligations of the
Borrowers under this subsection (c), or any other indemnification obligation of
the Borrowers hereunder or under any other Loan Document, are unenforceable for
any reason, the Borrowers hereby agree to make the maximum contribution to the
payment and satisfaction of such obligations which is permissible under
applicable Law.
. The provisions of this Agreement are intended to be severable. If any
provision of this Agreement shall be held invalid or unenforceable in whole or
in part in any jurisdiction such provision shall, as to such jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without in any
manner affecting the validity or enforceability thereof in any other
jurisdiction or the remaining provisions hereof in any jurisdiction.
. This Agreement and the other Loan Documents supersede all prior and
contemporaneous understandings and agreements, whether written or oral, among
the parties hereto relating to the transactions provided for herein and therein.
. All representations and warranties of the Borrowers contained herein or in any
other Loan Document or made in connection herewith shall survive the making of,
and shall not be waived by the execution and delivery, of this Agreement or any
other Loan Document, any investigation by the Agent or any Lender, the making of
any Loan, or any other event or condition whatever. All covenants and agreements
of the Borrowers contained herein or in any other Loan Document shall continue
in full force and effect from and after the date hereof so long as any Borrower
may borrow hereunder and until payment in full of all Obligations. Without
limitation, all obligations of the Borrowers hereunder or under any other Loan
Document to make payments to or indemnify the Agent or any Lender shall survive
the payment in full of all other Obligations, termination of the Borrowers'
rights to borrow hereunder, and all other events and conditions whatever. In
addition, all obligations of each Lender to make payments to or indemnify the
Agent shall survive the payment in full by the Borrowers of all Obligations,
termination of the Borrowers' rights to borrow hereunder, and all other events
or conditions whatever.
. This Agreement may be executed in any number of counterparts and by the
different parties hereto on separate counterparts each of which, when so
executed, shall be deemed an original, but all such counterparts shall
constitute but one and the same instrument.
. The parties hereto intend to conform to all applicable Laws in effect from
time to time limiting the maximum rate of interest that may be charged or
collected. Accordingly, notwithstanding any other provision hereof or of any
other Loan Document, the Borrowers shall not be required to make any payment to
or for the account of any Lender, and each Lender shall refund any payment made
by the Borrowers, to the extent that such requirement or such failure to refund
would violate or conflict with nonwaivable provisions of applicable Laws
limiting the maximum amount of interest which may be charged or collected by
such Lender.
. The Borrowers hereby agree that, to the fullest extent permitted by law, if
any Obligation of any Borrower shall be due and payable (by acceleration or
otherwise), each Lender shall have the right, without notice to such Borrower,
to set-off against and to appropriate and apply to the Obligation any
indebtedness, liability or obligation of any nature owing to such Borrower by
such Lender, including but not limited to all deposits (whether time or demand,
general or special, provisionally credited or finally credited, whether or not
evidenced by a certificate of deposit) now or hereafter maintained by such
Borrower with such Lender. Such right shall be absolute and unconditional in all
circumstances and, without limitation, shall exist whether or not such Lender or
any other Person shall have given notice or made any demand to such Borrower or
any other Person, whether such indebtedness, obligation or liability owed to
such Borrower is contingent, absolute, matured or unmatured, and regardless of
the existence or adequacy of any collateral, guaranty or any other security,
right or remedy available to any Lender or any other Person. The Borrowers
hereby agree that, to the fullest extent permitted by law, any Participant and
any branch, subsidiary or affiliate of any Lender or any Participant shall have
the same rights of set-off as a Lender as provided in this Section (regardless
of whether such Participant, branch, subsidiary or affiliate would otherwise be
deemed in privity with or a direct creditor of such Borrower). The rights
provided by this Section are in addition to all other rights of set-off and
banker's lien and all other rights and remedies which any Lender (or any such
Participant, branch, subsidiary or affiliate) may otherwise have under this
Agreement, any other Loan Document, at law or in equity, or otherwise, and
nothing in this Agreement or any Loan Document shall be deemed a waiver or
prohibition of or restriction on the rights of set-off or bankers' lien of any
such Person.
. The Lenders hereby agree among themselves that if any Lender shall receive (by
voluntary payment, realization upon security, set-off or from any other source)
any amount on account of the Loans, interest thereon, or any other Obligation
contemplated by this Agreement or the other Loan Documents to be made by the
Borrowers Pro Rata to all Lenders in greater proportion than any such amount
received by any other Lender, then the Lender receiving such proportionately
greater payment shall notify each other Lender and the Agent of such receipt,
and equitable adjustment will be made in the manner stated in this Section so
that, in effect, all such excess amounts will be shared Pro Rata among all of
the Lenders. The Lender receiving such excess amount shall purchase (which it
shall be deemed to have done simultaneously upon the receipt of such excess
amount) for cash from the other Lenders a participation in the applicable
Obligations owed to such other Lenders in such amount as shall result in a Pro
Rata sharing by all Lenders of such excess amount (and to such extent the
receiving Lender shall be a Participant). If all or any portion of such excess
amount is thereafter recovered from the Lender making such purchase, such
purchase shall be rescinded and the purchase price restored to the extent of
such recovery, together with interest or other amounts, if any, required by Law
to be paid by the Lender making such purchase. The Borrowers hereby consent to
and confirm the foregoing arrangements. Each Participant shall be bound by this
Section as fully as if it were a Lender hereunder.
. 10.14. Successors and Assigns; Participations; Assignments
(a) Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the Borrowers, the Lenders, all future holders
of the Notes, the Agent and their respective successors and assigns, except that
the Borrowers may not assign or transfer any of their respective rights
hereunder or interests herein without the prior written consent of all the
Lenders and the Agent, and any purported assignment without such consent shall
be void.
(b) Participations. Any Lender may, in the ordinary course of
its commercial banking business and in accordance with applicable Law, at any
time sell participations to one or more commercial banks or other Persons (each
a "Participant") in all or a portion of its rights and obligations under this
Agreement and the other Loan Documents (including, without limitation, all or a
portion of its Revolving Credit Commitments and the Loans owing to it and any
Note held by it); provided, that
(i) any such Lender's obligations under this Agreement
and the other Loan Documents shall remain unchanged,
(ii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations,
(iii) the parties hereto shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement and each of the other Loan Documents,
(iv) such Participant shall be bound by the provisions of
Section 10.13 hereof, and the Lender selling such participation shall
obtain from such Participant a written confirmation of its agreement to
be so bound,
(v) no Participant (unless such Participant is an affiliate of
such Lender, or is itself a Lender) shall be entitled to require such
Lender to take or refrain from taking action under this Agreement or
under any other Loan Document, except that such Lender may agree with
such Participant that such Lender will not, without such Participant's
consent, take action of the type described in subsections (a), (b),
(c), (d) or (e) of Section 10.03 hereof; notwithstanding the foregoing,
in no event shall any participation by any Lender have the effect of
releasing such Lenders from its obligations hereunder, and
(vi) no Participant shall be an Affiliate of any Borrower.
The Borrowers agree that any such Participant shall be entitled to the benefits
of Sections 2.10, 2.12 and 10.06 with respect to its participation in the
Revolving Credit Commitments and the Loans outstanding from time to time but
only to the extent such Participant sustains such losses; provided, that no such
Participant shall be entitled to receive any greater amount pursuant to such
Sections than the transferor Lender would have been entitled to receive in
respect of the amount of the participation transferred to such Participant had
no such transfer occurred and provided, further, that any such Participant, as a
condition precedent to receiving the benefits of Sections 2.10, 2.12 and 10.06,
shall agree in writing to indemnify the Borrowers and hold them harmless as
against any and all claims or demands by or liabilities to the transferor Lender
or Lenders or any other Person for an amount which in whole or in part
duplicates, but only to the extent of such duplication, the amount or amounts to
be paid to the Participant under this Section.
(c) Assignments. Any Lender may, in the ordinary course of its
commercial banking business and in accordance with applicable Law, at any time
assign all or a portion of its rights and obligations under this Agreement and
the other Loan Documents (including, without limitation, all or any portion of
its Revolving Credit Commitments and Loans owing to it and any Note held by it)
to any Lender, any affiliate of a Lender or to one or more additional commercial
banks or other Persons (each a "Purchasing Lender"); provided, that
(i) any such assignment to a Purchasing Lender which is not a
Lender shall be made only with the consent of Curtiss-Wright, the
Issuing Banks and the Agent, which consent shall not be unreasonably
withheld,
(ii) if a Lender makes such an assignment of less than all of
its then remaining rights and obligations under this Agreement and the
other Loan Documents, such transferor Lender shall retain, after such
assignment, a minimum principal amount of $5,000,000 of the Revolving
Credit Commitments and Revolving Credit Extensions of Credit then
outstanding, and such assignment shall be in a minimum aggregate
principal amount of $5,000,000 of the Revolving Credit Commitments and
Revolving Credit Extensions of Credit then outstanding,
(iii) each such assignment shall be of a constant, and not a
varying, percentage of each Revolving Credit Commitment of the
transferor Lender and of all of the transferor Lender's rights and
obligations under this Agreement and the other Loan Documents, and
(iv) each such assignment shall be made pursuant to a Transfer
Supplement in substantially the form of Exhibit D to this Agreement,
duly completed (a "Transfer Supplement").
In order to effect any such assignment, the transferor Lender and the Purchasing
Lender shall execute and deliver to the Agent a duly completed Transfer
Supplement (including the consents required by clause (i) of the preceding
sentence) with respect to such assignment, together with any Note or Notes
subject to such assignment (the "Transferor Lender Notes") and a processing and
recording fee of $2,500; and, upon receipt thereof, the Agent shall accept such
Transfer Supplement. Upon receipt of the Purchase Price Receipt Notice pursuant
to such Transfer Supplement, the Agent shall record such acceptance in the
Register. Upon such execution, delivery, acceptance and recording, from and
after the Transfer Effective Date specified in such Transfer Supplement
(x) the Purchasing Lender shall be a party hereto and, to the
extent provided in such Transfer Supplement, shall have the rights and
obligations of a Lender hereunder, and
(y) the transferor Lender thereunder shall be released from
its obligations under this Agreement to the extent so transferred (and,
in the case of an Transfer Supplement covering all or the remaining
portion of a transferor Lender's rights and obligations under this
Agreement, such transferor Lender shall cease to be a party to this
Agreement) from and after the Transfer Effective Date.
On or prior to the Transfer Effective Date specified in an Transfer Supplement,
the Borrowers, at their expense, shall execute and deliver to the Agent (for
delivery to the Purchasing Lender) new Notes evidencing such Purchasing Lender's
assigned Revolving Credit Commitments or Loans and (for delivery to the
transferor Lender) replacement Notes in the principal amount of the Loans or
Revolving Credit Commitments retained by the transferor Lender (such Notes to be
in exchange for, but not in payment of, those Notes then held by such transferor
Lender). Each such Note shall be dated the date and be substantially in the form
of the predecessor Note. The Agent shall mark the predecessor Notes "exchanged"
and deliver them to the applicable Borrower. Accrued interest and accrued fees
shall be paid to the Purchasing Lender at the same time or times provided in the
predecessor Notes and this Agreement.
(d) Register. The Agent shall maintain at its office a copy of
each Transfer Supplement delivered to it and a register (the "Register") for the
recordation of the names and addresses of the Lenders and the Revolving Credit
Commitment of, and principal amount of the Loans owing to, each Lender from time
to time. The entries in the Register shall be conclusive absent manifest error
and the Borrower, the Agent and the Lenders may treat each person whose name is
recorded in the Register as a Lender hereunder for all purposes of the
Agreement. The Register shall be available for inspection by the Borrowers or
any Lender at any reasonable time and from time to time upon reasonable prior
notice.
(e) Financial and Other Information. The Borrowers authorize
the Agent and each Lender to disclose to any Participant or Purchasing Lender
(each, a "transferee") and any prospective transferee any and all financial and
other information in such Person's possession concerning the Borrowers and their
respective Subsidiaries and Affiliates which has been or may be delivered to
such Person by or on behalf of such Borrowers in connection with this Agreement
or any other Loan Document or such Person's credit evaluation of such Borrowers
and their respective Subsidiaries and Affiliates; subject, however, to the
provisions of Section 10.16 hereof.
. 10.15. Governing Law; Submission to Jurisdiction; Limitation
of Liability
(a) Governing Law. THIS AGREEMENT AND ALL OTHER LOAN DOCUMENTS
(EXCEPT TO THE EXTENT, IF ANY, OTHERWISE EXPRESSLY STATED IN SUCH OTHER LOAN
DOCUMENTS) SHALL BE GOVERNED BY, CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CHOICE OF LAW PRINCIPLES.
(b) Certain Waivers. EACH OF THE BORROWERS, THE AGENT
AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY:
(i) AGREE THAT ANY ACTION, SUIT OR PROCEEDING BY ANY PERSON
ARISING FROM OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT
OR ANY STATEMENT, COURSE OF CONDUCT, ACT, OMISSION, OR EVENT OCCURRING
IN CONNECTION HEREWITH OR THEREWITH (COLLECTIVELY, "RELATED
LITIGATION") MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION SITTING IN THE CITY AND COUNTY OF NEW YORK, NEW YORK,
SUBMITS TO THE JURISDICTION OF SUCH COURTS, AND TO THE FULLEST EXTENT
PERMITTED BY LAW AGREES THAT IT WILL NOT BRING ANY RELATED LITIGATION
IN ANY OTHER FORUM;
(ii) WAIVE ANY OBJECTION WHICH IT MAY HAVE AT ANY TIME TO THE
LAYING OF VENUE OF ANY RELATED LITIGATION BROUGHT IN ANY SUCH COURT,
WAIVES ANY CLAIM THAT ANY SUCH RELATED LITIGATION HAS BEEN BROUGHT IN
AN INCONVENIENT FORUM, AND WAIVES ANY RIGHT TO OBJECT, WITH RESPECT TO
ANY RELATED LITIGATION BROUGHT IN ANY SUCH COURT, THAT SUCH COURT DOES
NOT HAVE JURISDICTION;
(iii) CONSENTS AND AGREES TO SERVICE OF ANY SUMMONS, COMPLAINT
OR OTHER LEGAL PROCESS IN ANY RELATED LITIGATION BY REGISTERED OR
CERTIFIED U.S. MAIL, POSTAGE PREPAID, AT THE ADDRESS FOR NOTICES
DESCRIBED IN SECTION 10.05 HEREOF, AND CONSENTS AND AGREES THAT SUCH
SERVICE SHALL CONSTITUTE IN EVERY RESPECT VALID AND EFFECTIVE SERVICE
(BUT NOTHING HEREIN SHALL AFFECT THE VALIDITY OR EFFECTIVENESS OF
PROCESS SERVED IN ANY OTHER MANNER PERMITTED BY LAW); AND
(iv) WAIVES THE RIGHT TO TRIAL BY JURY IN ANY RELATED
LITIGATION.
. Each party hereto agrees to keep confidential any information concerning the
business and financial activities of the other party hereto obtained in
connection with this Agreement except information which (a) is lawfully in the
public domain, (b) is obtained from a third party who is not bound by an
obligation of confidentiality with respect to such information, (c) is required
to be disclosed to any Governmental Authority having jurisdiction over such
person but only to the extent of such requirement, or (d) is disclosed by the
Agent or any Lender in accordance with Section 10.14 hereof.
[Signatures on following pages]
<PAGE>
IN WITNESS WHEREOF, the parties hereto, by their officers
thereunto duly authorized, have executed and delivered this Agreement as of the
date first above written.
ATTEST: CURTISS-WRIGHT CORPORATION
By /s/ Paul J. Ferdenzi By /s/ Gary Benschip
Title: A.G.C. Gary J. Benschip
Treasurer
[Corporate Seal]
Address for Notices:
1200 Wall Street West
Suite 501
Lyndhurst, NJ 07071
Attn: Robert Bosi
Vice President of Finance
Telephone: 201-896-8439
Telecopier: 201-438-5680
ATTEST: CURTISS-WRIGHT FLIGHT SYSTEMS, INC.
By /s/ Paul J. Ferdenzi By /s/ Gary Benschip
Title: A.G.C. Gary J. Benschip
Treasurer
[Corporate Seal]
Address for Notices:
1200 Wall Street West
Suite 501
Lyndhurst, NJ 07071
Attn: Robert Bosi
Vice President of Finance
Telephone: 201-896-8439
Telecopier: 201-438-5680
ATTEST: CURTISS-WRIGHT FLOW CONTROL
CORPORATION
By /s/ Paul J. Ferdenzi By /s/ Gary Benschip
Title: A.G.C. Gary J. Benschip
Treasurer
Address for Notices:
1200 Wall Street West
Suite 501
Lyndhurst, NJ 07071
Attn: Robert Bosi
Vice President of Finance
Telephone: 201-896-8439
Telecopier: 201-438-5680
ATTEST: METAL IMPROVEMENT COMPANY, INC.
By /s/ Paul J. Ferdenzi By /s/ Gary Benschip
Title: A.G.C. Gary J. Benschip
Treasurer
[Corporate Seal]
Address for Notices:
1200 Wall Street West
Suite 501
Lyndhurst, NJ 07071
Attn: Robert Bosi
Vice President of Finance
Telephone: 201-896-8439
Telecopier: 201-438-5680
ATTEST: CURTISS-WRIGHT ANTRIEBSTECHNIK GmbH
By /s/ Paul J. Ferdenzi By /s/ G. J. Yohrling
Title: Assistant General Counsel George J. Yohrling
Manager
[Corporate Seal]
Address for Notices:
1200 Wall Street West
Suite 501
Lyndhurst, NJ 07071
Attn: Robert Bosi
Vice President of Finance
Telephone: 201-896-8439
Telecopier: 201-438-5680
<PAGE>
MELLON BANK, N.A., individually
and as Agent
By /s/ J.W. Bell
J. Wade Bell
Vice President
Initial Revolving Credit
Committed Amount: $15,000,000
Commitment Percentage: 25%
Address for Notices:
1735 Market Street
AIM 191-0750
Philadelphia, Pennsylvania 19103
Attn: J. Wade Bell
Vice President
Telephone: (215) 553-3875
Telecopier: (215) 553-4899
<PAGE>
EUROPEAN AMERICAN BANK
By /s/ Anthony V. Pantina
Title: Vice President
Initial Revolving Credit
Committed Amount: $9,000,000
Commitment Percentage: 15%
Address for Notices:
335 Madison Avenue
New York, New York 10017
Attn: Brian Foster
Telephone: (212) 503-2576
Telecopier: (212) 503-2667
<PAGE>
SCOTIABANC INC.
By /s/ W. Brown
Title:
Initial Revolving Credit
Committed Amount: $13,500,000
Commitment Percentage: 22.5%
Address for Notices:
600 Peachtree Street, N.E.
Suite 2700
Atlanta, Georgia 30308
Attn: William Brown
Telephone: (404) 877-1500
Telecopier: (404) 888-8998
<PAGE>
PNC BANK, NATIONAL ASSOCIATION
By /s/ Judy B. Land
Title: Vice President
Initial Revolving Credit
Committed Amount: $13,500,000
Commitment Percentage: 22.5%
Address for Notices:
1 Garret Mountain Plaza
4th Floor
West Patterson, New Jersey 07424
Attn: Karen Voight
Judy Land
Telephone: (973) 881-5231
Telecopier: (973) 881-5234
<PAGE>
SUNTRUST BANK, ATLANTA
By /s/ W. David Wisdom
Title: Vice PResident
Initial Revolving Credit
Committed Amount: $9,000,000
Commitment Percentage: 15%
Address for Notices:
25 Park Place
21st Floor
Center 1927
Atlanta, Georgia 30383
Attn:
Telephone:
Telecopier:
<PAGE>
EXHIBIT A
to Credit Agreement
FORM OF REVOLVING CREDIT NOTE
Revolving Credit Note
$ Pittsburgh, Pennsylvania
- ------------------ ----------, 1999
FOR VALUE RECEIVED, the undersigned, [NAME OF BORROWER], a
corporation (the "Borrower"), promises to pay to the order of [NAME OF THE
LENDER] (the "Lender") on or before the Revolving Credit Maturity Date (as
defined in the Agreement referred to below), and at such earlier dates as may be
required by such Agreement, the lesser of (i) the principal sum of
($ ) or (ii) the aggregate
- --------------------------- ----------
unpaid principal amount of all Revolving Credit Loans made by the Lender to the
Borrower from time to time pursuant to the Agreement. The Borrower further
promises to pay to the order of the Lender interest on the unpaid principal
amount hereof from time to time outstanding at the rate or rates per annum
determined pursuant to the Agreement, payable on the dates set forth in the
Agreement.
This Note is one of the "Revolving Credit Notes" as referred
to in, and is entitled to the benefits of, the Credit Agreement, dated as of
December 20, 1999 by and among the Borrower, the other Borrowers party thereto
from time to time, the Lenders party thereto from time to time, the Issuing
Banks from time to time thereunder, and Mellon Bank, N.A., as Agent (as the same
may be amended, modified or supplemented from time to time, the "Agreement"),
which among other things provides for the acceleration of the maturity hereof
upon the occurrence of certain events and for prepayments in certain
circumstances and upon certain terms and conditions.
Terms defined in the Agreement have the same meanings herein.
The Borrower hereby expressly waives presentment, demand,
notice, protest and all other demands and notices in connection with the
delivery, acceptance, performance, default or enforcement of this Note and the
Agreement, and an action for amounts due hereunder or thereunder shall
immediately accrue.
This Note shall be governed by, construed and enforced in
accordance with the laws of the State of New York, without regard to principles
of conflicts of law.
[NAME OF BORROWER]
By
Name:
Title:
<PAGE>
EXHIBIT B
to Credit Agreement
FORM OF OPINION OF COUNSEL
Letterhead of Associate General Counsel of Curtiss-Wright Corporation
December 20, 1999
Mellon Bank, N.A., as Agent
for the Lenders identified on Annex 1 hereto
Re: Credit Agreement dated as of December 20, 1999 by and
among Curtiss-Wright Corporation, the Subsidiary
Borrowers parties thereto from time to time, the
Lenders parties thereto from time to time, the
Issuing Banks referred to therein, Mellon Bank, N.A.,
as Agent, The Bank of Nova Scotia, New York Branch,
as Syndication Agent and PNC Bank, National
Association, as Documentation Agent
Short Term Credit Agreement dated as of December 20,
1999 by and among Curtiss-Wright Corporation, the
Subsidiary Borrowers parties thereto from time to
time, the Lenders parties thereto from time to time,
Mellon Bank, N.A., as Agent, The Bank of Nova Scotia,
New York Branch, as Syndication Agent and PNC Bank,
National Association, as Documentation Agent
Gentlemen:
I am the Associate General Counsel of Curtiss-Wright
Corporation, a Delaware corporation ("Curtiss-Wright") and, in such capacity, I
am delivering this opinion to the Agent and the Lenders in connection with the
above referenced Credit Agreement and Short Term Credit Agreement and the Loan
Documents (as defined in the Credit Agreement and the Short Term Credit
Agreement) to which Curtiss-Wright or any Subsidiary Borrower is a party.
Capitalized terms used in this opinion and not otherwise defined herein shall
have the meanings given them by that certain Credit Agreement. Capitalized terms
which are defined in the Credit Agreement and which are not otherwise defined in
this letter shall have the meanings ascribed to them in the Credit Agreement,
unless the context clearly requires otherwise. This opinion is being rendered
pursuant to Section 5.01(b) of the Credit Agreement.
In rendering this opinion, I or lawyers acting under my
supervision have examined originals or copies, certified or otherwise identified
to the satisfaction of such lawyers, of such documents, corporate records,
certificates of public officials and of officers of the Curtiss-Wright and the
Subsidiary Borrowers (collectively, the "Borrower Entities") 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. We have
examined, among other documents, the following documents:
(i) the Articles of Incorporation and Bylaws of
each of the Borrower Entities;
(ii) certificates dated [date] of the Secretary of
State of [identify jurisdictions] certifying as to
the good standing of each of the Borrower Entities
in their respective jurisdictions of organization;
(iii) counterparts executed by the Borrower
Entities of each of the Loan Documents to which
such Borrower Entities are parties.
With your permission, we have assumed without any independent
investigation (a) that each party to the Loan Documents (other than the Borrower
Entities) (i) is duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation; (ii) is duly authorized to
execute and deliver the Loan Documents and to consummate the transactions
contemplated by such Loan Documents; and (iii) has the full power and authority
to enter into the same for the purposes set forth therein; (b) that the Loan
Documents have been duly executed and delivered by each of the parties thereto
(other than the Borrower Entities), are in full force and effect with respect to
such parties and are the legal, valid and binding obligations of such parties,
enforceable against such parties (other than the Borrower Entities) in
accordance with the terms thereof; and (c) in respect of all documents and
instruments which were submitted to us, the capacity of natural persons, the
genuineness of all signatures (other than those of representatives of the
Borrower Entities on documents on which an opinion is expressed herein), the
authenticity of all documents and instruments submitted to us as originals, the
conformity to the originals of all documents and instruments submitted to us as
copies and the execution of all documents and instruments in the form of such
documents and instruments submitted to us in execution form.
Upon the basis of and subject to the foregoing and subject to
the exceptions, limitations, assumptions and qualifications set forth below, I
am of the opinion that:
1. Each Borrower Entity is a corporation duly organized,
existing and in good standing under the laws of its state of incorporation, has
the corporate power and authority to enter into, deliver and perform under and
pursuant to the Loan Documents to which it is a party, to own its property and
to carry on its business as it is now conducted, and is duly qualified to do
business in each jurisdiction where the character of the property owned by it
therein or in which the transaction of its business makes such qualification
necessary, except where the failure to so qualify would not have a material
adverse effect on the assets, business, operations or financial condition of
such Borrower Entity.
2. The execution, delivery and performance by each Borrower
Entity of the Credit Agreement, the Short Term Credit Agreement and the other
Loan Documents to which it is a party has been duly authorized by all necessary
corporate action. The execution and delivery by the Borrower Entities of the
foregoing documents, the making of the borrowings contemplated by the Credit
Agreement and the Short Term Credit Agreement, the execution, delivery and
issuance of the Notes by the Borrower Entities pursuant to the Credit Agreement
and the Short Term Credit Agreement to evidence such borrowings and the
performance of the Borrower Entities under the Loan Documents require no (i)
approval of any official body or (ii) approval of any other third party.
3. The Credit Agreement, the Short Term Credit Agreement and
the other Loan Documents to which the Borrower is a party have been duly and
validly executed and delivered by the Borrower and constitute valid, legal and
binding obligations of the Borrower enforceable in accordance with their
respective terms.
4. The execution and delivery of the Credit Agreement, the
Short Term Credit Agreement and the other Loan Documents by each Borrower
Entity, the consummation of the transactions therein contemplated, and
compliance with the terms and provisions thereof (a) will not conflict with or
result in any breach of the terms and conditions of the Articles of
Incorporation or Bylaws of such Borrower Entity or of any law or regulation, and
(b) to the best of my knowledge, after due inquiry, will not conflict with or
result in any breach of the terms and conditions of any order, writ, injunction
or decree of any court or governmental instrumentality or of any agreement or
instrument to which such Borrower Entity is bound or to which such Borrower
Entity is subject, or constitute a default thereunder.
The foregoing opinions are subject to the following
exceptions, limitations, assumptions and qualifications:
A. Our opinions are subject to the effect of bankruptcy,
insolvency, fraudulent conveyance and transfer and other laws of general
application relating to or affecting the enforcement of creditors rights and of
general principles of equity, judicial discretion and general requirements of
good faith, fair dealing and commercial reasonableness (regardless of whether
relief is sought in an action at law or in equity).
B. Our opinions are further subject to public policy
considerations which may limit the rights of the Agent or the Lenders to obtain
certain remedies and to indemnifications, but should not make the remedies
provided in the Loan Documents inadequate for the practical realization of the
benefits intended thereby.
C. This opinion is furnished solely for your benefit in
connection with the transactions contemplated by the Credit Agreement, the Short
Term Credit Agreement and the other Loan Documents. You may not rely on this
opinion for any other purpose, and no other person may rely on this opinion for
any purpose without the express written consent of the undersigned. This opinion
is limited to the matters set forth herein, and no opinion may be inferred or
implied beyond the matters expressly stated in this letter.
Very truly yours,
<PAGE>
Annex I
Mellon Bank, N.A.
Scotiabanc Inc.
PNC Bank, National Association
SunTrust Bank, Atlanta
European American Bank
<PAGE>
EXHIBIT C
to Credit Agreement
FORM OF QUARTERLY COMPLIANCE CERTIFICATE
CURTISS-WRIGHT CORPORATION
Quarterly Compliance Certificate
Pursuant to the Credit Agreement, dated as of December 20,
1999 by and among Curtiss-Wright Corporation, a Delaware corporation
("Curtiss-Wright"), the Subsidiary Borrowers party thereto from time to time
(collectively with Curtiss-Wright, the "Borrowers" and each individually a
"Borrower"), the Lenders from time to time party thereto, the Issuing Banks from
time to time thereunder, and Mellon Bank, N.A., as Agent (as the same may be
amended, modified or supplemented from time to time, the "Agreement"), the
undersigned, being a Responsible Officer of the Borrower, hereby certifies on
behalf of the Borrower as follows:
1. Delivered herewith are the financial statements prepared
pursuant to Section 6.01(a) or Section 6.01(b), as the case may be, of the
Agreement, for the fiscal ________ ended ___________, _____. All such financial
statements comply with the applicable requirements of the Agreement.
2. Schedule I hereto sets forth in reasonable detail the
information and calculations necessary to establish compliance with the
provisions of Sections 7.01 and 7.02 of the Agreement as of the end of the
fiscal period referred to in paragraph 1 above.
3. (Check one and only one:)
___ No Event of Default or Potential Default has occurred and
is continuing or exists.
___ An Event of Default or Potential Default has occurred and
is continuing or exists, and the document(s) attached hereto as Schedule II
specify in detail the nature and period of existence of such Event of Default or
Potential Default as well as any and all actions with respect thereto taken or
contemplated to be taken by the applicable Borrower.
4. The undersigned has personally reviewed the Agreement, and
this certificate was based on an examination made by or under the supervision of
the undersigned sufficient to assure that this certificate is accurate.
5. Capitalized terms used in this certificate and not
otherwise defined shall have the meanings given in the Agreement.
CURTISS-WRIGHT CORPORATION
By:
Name:
Title:
Date
<PAGE>
-4-
EXHIBIT D
to Credit Agreement
FORM OF TRANSFER SUPPLEMENT
Transfer Supplement
THIS TRANSFER SUPPLEMENT, dated as of the date specified in
Item 1 of Schedule I hereto, among the Transferor Lender specified in Item 2 of
Schedule I hereto (the "Transferor Lender"), each Purchasing Lender specified in
Item 3 of Schedule I hereto (each a "Purchasing Lender") and Mellon Bank, N.A.,
as Agent for the Lenders under the Agreement described below.
Recitals:
A. This Transfer Supplement is being executed and delivered in
accordance with Section 10.14(c) of the Agreement, dated as of December 20,
1999, by and among Curtiss-Wright Corporation, a Delaware corporation
("Curtiss-Wright"), the Subsidiary Borrowers party thereto from time to time
(collectively with Curtiss-Wright, the "Borrowers" and each individually a
"Borrower"), the Lenders party thereto from time to time, the Issuing Banks from
time to time thereunder, and Mellon Bank, N.A., as Agent for the Lenders (as the
same may be amended, modified or supplemented from time to time, the
"Agreement"). Capitalized terms used herein without definition have the meaning
specified in the Agreement.
B. Each Purchasing Lender (if it is not already a Lender)
wishes to become a Lender party to the Agreement.
C. The Transferor Lender is selling and assigning to each
Purchasing Lender, and each Purchasing Lender is purchasing and assuming, a
certain portion of the Transferor Lender's rights and obligations under the
Agreement, including, without limitation, the Transferor Lender's Commitments
and Loans owing to it and any Notes held by it (the "Transferor Lender's
Interests").
NOW, THEREFORE, the parties hereto, intending to be legally
bound, hereby agree as follows:
Section 1. Transfer Effective Notice. Upon receipt by the
Agent of five counterparts of this Transfer Supplement (to each of which is
attached a fully completed Schedule I and Schedule II), and each of which has
been executed by the Transferor Lender, by each Purchasing Lender and by any
other Person required by Section 10.14(c) of the Agreement to execute this
Transfer Supplement, the Agent will transmit to Curtiss-Wright, the Transferor
Lender and each Purchasing Lender a transfer effective notice, substantially in
the form of Schedule III to this Transfer Supplement (a "Transfer Effective
Notice"). The date specified in such Transfer Effective Notice as the date on
which the transfer effected by this Transfer Supplement shall become effective
(the "Transfer Effective Date") shall be the fifth Business Day following the
date of such Transfer Effective Notice or such other date as shall be agreed
upon among the Transferor Lender, the Purchasing Lender, the Agent and
Curtiss-Wright. From and after the close of business at the Agent's Office on
the Transfer Effective Date each Purchasing Lender (if not already a Lender
party to the Agreement) shall be a Lender party to the Agreement for all
purposes thereof having the respective interests in the Transferor Lender's
interests reflected in this Transfer Supplement.
Section 2. Purchase Price; Sale. At or before 12:00 Noon,
local time at the Transferor Lender's office specified in Schedule II, on the
Transfer Effective Date, each Purchasing Lender shall pay to the Transferor
Lender, in immediately available funds, an amount equal to the purchase price,
as agreed between the Transferor Lender and such Purchasing Lender (the
"Purchase Price"), of the portion being purchased by such Purchasing Lender
(such Purchasing Lender's "Purchased Percentage") of the Transferor Lender's
Interests. Effective upon receipt by the Transferor Lender of the Purchase Price
from a Purchasing Lender, the Transferor Lender hereby irrevocably sells,
assigns and transfers to such Purchasing Lender, without recourse,
representation or warranty (express or implied) except as set forth in Section 6
hereof, and each Purchasing Lender hereby irrevocably purchases, takes and
assumes from the Transferor Lender such Purchasing Lender's Purchased Percentage
of the Transferor Lender's Interests. The Transferor Lender shall promptly
notify the Agent of the receipt of the Purchase Price from a Purchasing Lender
("Purchase Price Receipt Notice"). Upon receipt by the Agent of such Purchase
Price Receipt Notice, the Agent shall record in the Register the information
with respect to such sale and purchase as contemplated by Section 10.14(d) of
the Agreement.
Section 3. Principal, Interest and Fees. All principal
payments, interest, fees and other amounts that would otherwise be payable under
the Loan Documents from and after the Transfer Effective Date to or for the
account of the Transferor Lender in respect of the Transferor Lender's Interests
shall, instead, be payable to or for the account of the Transferor Lender and
the Purchasing Lenders, as the case may be, in accordance with their respective
interests as reflected in this Transfer Supplement.
Section 4. Closing Documents. Concurrently with the execution
and delivery hereof, the Transferor Lender will request that Curtiss-Wright
provide to each Purchasing Lender (if it is not already a Lender party to the
Agreement) conformed copies of all Loan Documents delivered to such Transferor
Lender on the Closing Date in satisfaction of conditions precedent set forth in
the Agreement.
Section 5. Further Assurances. Each of the parties to this
Transfer Supplement agrees that at any time and from time to time upon the
written request of any other party, it will execute and deliver such further
documents and do such further acts and things as such other party may reasonably
request in order to effect the purposes of this Transfer Supplement.
Section 6. Certain Representations and Agreements. By
executing and delivering this Transfer Supplement, the Transferor Lender and
each Purchasing Lender confirm to and agree with each other and the Agent and
the Lenders as follows:
(a) Other than the representation and warranty that it is the
legal and beneficial owner of the interest being assigned hereby free
and clear of any adverse claim, the Transferor Lender makes no
representation or warranty and assumes no responsibility with respect
to (i) the execution, delivery, effectiveness, enforceability,
genuineness, validity or adequacy of the Agreement or any other Loan
Document, (ii) any recital, representation, warranty, document,
certificate, report or statement in, provided for in, received under or
in connection with, the Agreement or any other Loan Document, or (iii)
the existence, validity, enforceability, perfection, recordation,
priority, adequacy or value, now or hereafter, of any Lien or other
direct or indirect security afforded or purported to be afforded by any
of the Loan Documents or otherwise from time to time.
(b) The Transferor Lender makes no representation or warranty
and assumes no responsibility with respect to (i) the performance or
observance of any of the terms or conditions of the Agreement or any
other Loan Document on the part of the Borrowers, (ii) the business,
operations, condition (financial or otherwise) or prospects of the
Borrowers or any other Person, or (iii) the existence of any Event of
Default or Potential Default.
(c) Each Purchasing Lender confirms that it has received a
copy of the Agreement and each of the other Loan Documents, together
with copies of the financial statements referred to in Section 4.05
thereof, the most recent financial statements delivered pursuant to
Section 6.01 thereof, if any, and such other documents and information
as it has deemed appropriate to make its own credit and legal analysis
and decision to enter into this Transfer Supplement. Each Purchasing
Lender confirms that it has made such analysis and decision
independently and without reliance upon the Agent, the Transferor
Lender or any other Lender.
(d) Each Purchasing Lender, independently and without reliance
upon the Agent, the Transferor Lender or any other Lender, and based on
such documents and information as it shall deem appropriate at the
time, will make its own decisions to take or not take action under or
in connection with the Agreement or any other Loan Document.
(e) Each Purchasing Lender that is not a Lender and that is
not chartered under the laws of the United States or a state thereof
shall provide Curtiss-Wright and the Agent with any documentation
either of them may reasonably request pertaining to withholding taxes
and backup withholding.
(f) Each Purchasing Lender irrevocably appoints the Agent to
act as Agent for such Purchasing Lender under the Agreement and the
other Loan Documents, all in accordance with Article IX of the
Agreement and the other provisions of the Agreement and the other Loan
Documents.
(g) Each Purchasing Lender agrees that it will perform in
accordance with their terms all of the obligations which by the terms
of the Agreement and the other Loan Documents are required to be
performed by it as a Lender.
Section 7. Schedule II. Schedule II hereto sets forth the
revised Commitments of the Transferor Lender and each Purchasing Lender as well
as administrative information with respect to each Purchasing Lender.
Section 8. Governing Law. This Transfer Supplement shall be
governed by, construed and enforced in accordance with the laws of the State of
New York, without regard to principles of conflicts of law.
Section 9. Counterparts. This Transfer Supplement may be
executed on any number of counterparts and by the different parties hereto on
separate counterparts each of which, when so executed, shall be deemed an
original, but all such counterparts shall constitute but one and the same
instrument.
IN WITNESS WHEREOF, the parties hereto have caused this
Transfer Supplement to be executed by their respective duly authorized officers
on Schedule I hereto as of the date set forth in Item 1 of Schedule I hereto.
<PAGE>
-2-
SCHEDULE I
To Transfer Supplement
COMPLETION OF INFORMATION AND
SIGNATURES FOR TRANSFER SUPPLEMENT
Re: Credit Agreement, dated as of December 20, 1999, by and among
Curtiss-Wright Corporation, a Delaware corporation ("Curtiss-Wright"),
the Subsidiary Borrowers party thereto from time to time (collectively
with Curtiss-Wright, the "Borrowers" and each individually a
"Borrower") the Lenders party thereto from time to time, the Issuing
Banks from time to time thereunder, and Mellon Bank, N.A., as Agent for
the Lenders (as amended, modified or supplemented from time to time,
the "Agreement")
Item 1 (Date of Transfer [INSERT DATE OF
Supplement): TRANSFER SUPPLEMENT]
Item 2 (Transferor Lender): [INSERT NAME OF TRANSFEROR
LENDER]
Item 3 (Purchasing Lender[s]): [INSERT NAME[S] OF
PURCHASING LENDER[S]]
Item 4 (Signatures of Parties
to Transfer Supplement):
[NAME OF TRANSFEROR LENDER]
as Transferor Lender
By:
Name:
Title:
[NAME OF PURCHASING LENDER]
as Purchasing Lender
By:
Name:
Title:
[NAME OF PURCHASING LENDER]
as Purchasing Lender
By:
Name:
Title:
[Following consents required only
when Purchasing Lender is not a Lender]
<PAGE>
CONSENTED TO AND ACKNOWLEDGED:
MELLON BANK, N.A., as Agent
By:
Name:
Title:
CONSENTED TO AND ACKNOWLEDGED:
CURTISS-WRIGHT CORPORATION
By:
Name:
Title:
CONSENTED TO AND ACKNOWLEDGED:
[Name of ISSUING BANKS]
By:
Name:
Title:
ACCEPTED FOR RECORDATION
IN REGISTER:
MELLON BANK, N.A., as Agent
By:
Name:
Title:
<PAGE>
SCHEDULE II
to Transfer Supplement
LIST OF LENDING OFFICES, ADDRESSES
FOR NOTICES AND COMMITTED AMOUNTS
[NAME OF TRANSFEROR
LENDER, LENDING
OFFICE AND ADDRESS] Revised Commitment and Loan Amounts:
Revolving Credit
Committed Amount $
Commitment Percentage of
Revolving Credit Commitment: %
[NAME OF PURCHASING
LENDER] New Commitment and Loan Amounts:
Revolving Credit
Committed Amount $
Commitment Percentage of
Revolving Credit Commitment: %
Administrative Information
for Purchasing Lender:
Address:
Attention:
Telephone:
Telecopier:
<PAGE>
5
SCHEDULE III
to Transfer Supplement
Transfer Effective Notice
To: Curtiss-Wright Corporation
[INSERT NAME OF TRANSFEROR
LENDER AND EACH PURCHASING LENDER]
The undersigned, as Agent under the Credit Agreement, dated as
of December 20, 1999, by and among Curtiss-Wright Corporation, a Delaware
corporation ("Curtiss-Wright"), the Subsidiary Borrowers party thereto from time
to time (collectively with Curtiss-Wright, the "Borrowers" and each individually
a "Borrower"), the Lenders party thereto from time to time, the Issuing Banks
from time to time thereunder, and Mellon Bank, N.A., as Agent for the Lenders
(as the same may be amended, modified or supplemented from time to time, the
"Credit Agreement"), acknowledges receipt of five executed counterparts of a
completed Transfer Supplement, dated
, from [NAME OF TRANSFEROR LENDER] to [NAME OF EACH PURCHASING
LENDER] (the "Transfer Supplement"). Terms defined in the Transfer Supplement
are used herein as therein defined.
1. Pursuant to the Transfer Supplement, you are advised that
the Transfer Effective Date will be , ____. [INSERT FIFTH BUSINESS DAY FOLLOWING
DATE OF TRANSFER EFFECTIVE NOTICE OR OTHER DATE AGREED TO AMONG THE TRANSFEROR
LENDER, THE PURCHASING LENDER, THE AGENT AND CURTISS-WRIGHT.]
2. Pursuant to Section 10.14(c) of the Credit Agreement, the
Transferor Lender has delivered to the Agent the Transferor Lender Notes.
3. Section 10.14(c) of the Credit Agreement provides that the
Borrowers are to deliver to the Agent on or before the Transfer Effective Date
the following Notes, each dated the date of the Note it replaces, and the
replaced Notes shall be marked cancelled and returned to the Borrowers.
[DESCRIBE EACH NEW REVOLVING CREDIT NOTE AND/OR SUBSIDIARY
NOTE FOR TRANSFEROR LENDER AND PURCHASING LENDER AS TO DATE (AS REQUIRED BY THE
CREDIT AGREEMENT), PRINCIPAL AMOUNT AND PAYEE.]
4. The Transfer Supplement provides that each Purchasing
Lender is to pay its Purchase Price to the Transferor Lender at or before 12:00
Noon, local time at the Transferor Lender's lending office specified in Schedule
II to the Transfer Supplement, on the Transfer Effective Date in immediately
available funds.
Very truly yours,
MELLON BANK, N.A., as Agent
By:
Name:
Title:
<PAGE>
EXHIBIT E
to Credit Agreement
FORM OF CURTISS-WRIGHT GUARANTY
GUARANTY AND SURETYSHIP AGREEMENT
THIS GUARANTY AND SURETYSHIP AGREEMENT (this "Guaranty") dated
as of the 20th day of December, 1999, made by CURTISS-WRIGHT CORPORATION, a
Delaware corporation ("Guarantor"), to the lenders parties hereto from time to
time (the "Lenders", as defined further below) and MELLON BANK, N.A., a national
banking association, as agent for the Lenders (in such capacity, together with
its successors in such capacity, the "Agent").
W I T N E S S E T H:
WHEREAS, Guarantor, the Subsidiary Borrowers, the Lenders, the
Issuing Banks and the Agent are parties to a Credit Agreement, dated as of
December 20, 1999 (as amended, the "Credit Agreement"); and
WHEREAS, pursuant to the terms of the Credit Agreement,
Lenders may make certain Loans to one or more Subsidiaries of Guarantor (each, a
"Borrower"), as evidenced in part by certain promissory notes of each such
Borrower to each Lender dated of even date herewith (collectively, the "Note");
and
WHEREAS, the execution and delivery by Guarantor of this
Guaranty is a condition to Lenders' obligation to make Loans to any Borrower,
and Guarantor, as owner, directly or indirectly, of all of the outstanding
shares of stock of each Borrower, expects to derive a financial benefit from the
making of such Loans.
NOW, THEREFORE, in consideration of the premises and other
good and valuable consideration, the receipt of which is hereby acknowledged by
Guarantor, and intending to be legally bound, Guarantor hereby agrees as
follows:
ARTICLE I
DEFINITIONS
1.1 Definitions.
(a) Certain Definitions. Capitalized terms not otherwise defined herein shall
have the meanings given in the Credit Agreement. In addition to the other terms
defined elsewhere in this Agreement, as used herein the following terms shall
have the following meanings:
"Guaranteed Obligations" shall mean all obligations from time
to time of the Borrowers to the Agent or any Lender under or in
connection with any Loan Document, including all obligations to pay
principal, interest, fees, indemnities or other amounts under such Loan
Documents, in each case whether such obligations are direct or
indirect, secured or unsecured, joint or several, absolute or
contingent, due or to become due, whether for payment or performance,
now existing or hereafter arising (including interest and other
obligations arising or accruing after the commencement of any
bankruptcy, insolvency, reorganization, dissolution or similar
proceeding with respect to any Borrower or any other Person, or which
would have arisen or accrued but for the commencement of such
proceeding, even if such obligation or the claim therefor is not
enforceable or allowable in such proceeding).
ARTICLE II
GUARANTY AND SURETYSHIP
2.1. Guaranty and Suretyship. The Guarantor hereby absolutely,
unconditionally and irrevocably guarantees and becomes surety for the full and
punctual payment and performance of the Guaranteed Obligations as and when such
payment or performance shall become due (at scheduled maturity, by acceleration
or otherwise) in accordance with the terms of the Loan Documents. This Agreement
is an agreement of suretyship as well as of guaranty, is a guarantee of payment
and performance and not merely of collectibility, and is in no way conditioned
upon any attempt to collect from or proceed against any Borrower or any other
Person or any other event or circumstance. The obligations of the Guarantor
under this Agreement are direct and primary obligations of the Guarantor and are
independent of the Guaranteed Obligations, and a separate action or actions may
be brought against the Guarantor regardless of whether action is brought against
any Borrower or any other Person or whether such Borrower or any other Person is
joined in any such action or actions.
2.2. Obligations Absolute. The Guarantor agrees that the
Guaranteed Obligations will be paid and performed strictly in accordance with
the terms of the Loan Documents, regardless of any law, regulation or order now
or hereafter in effect in any jurisdiction affecting the Guaranteed Obligations,
any of the terms of the Loan Documents or the rights of the Agent or any Lender
or any other Person with respect thereto. The obligations of the Guarantor under
this Agreement shall be absolute, unconditional and irrevocable, irrespective of
any of the following:
(a) any lack of legality, validity, enforceability,
allowability (in a bankruptcy, insolvency, reorganization, dissolution
or similar proceeding, or otherwise), or any avoidance or
subordination, in whole or in part, of any Loan Document or any of the
Guaranteed Obligations;
(b) any change in the amount, nature, time, place or manner of
payment or performance of, or in any other term of, any of the
Guaranteed Obligations (whether or not such change is contemplated by
the Loan Documents as presently constituted, and specifically including
any increase in the Guaranteed Obligations, whether resulting from the
extension of additional credit to any Borrower or otherwise), any
execution of any additional Loan Documents, or any amendment or waiver
of or any consent to departure from any Loan Document;
(c) any taking, exchange, release, impairment or nonperfection
of any collateral, or any taking, release, impairment or amendment or
waiver of or consent to departure from any other guaranty or other
direct or indirect security for any of the Guaranteed Obligations;
(d) any manner of application of collateral or other direct or
indirect security for any of the Guaranteed Obligations, or proceeds
thereof, to any of the Guaranteed Obligations, or any commercially
reasonable manner of sale or other disposition of any collateral for
any of the Guaranteed Obligations or any other assets of any Borrower;
(e) any permanent impairment by any Lender or any other Person
of any recourse of the Guarantor against any Borrower or any other
Person, or any other permanent impairment by any Lender or any other
Person of the suretyship status of the Guarantor;
(f) any bankruptcy, insolvency, reorganization, dissolution or
similar proceedings with respect to, or any change, restructuring or
termination of the corporate structure or existence of, any Borrower,
the Guarantor or any other Person; or
(g) any failure of any Lender or any other Person to disclose
to the Guarantor any information pertaining to the business,
operations, condition (financial or other) or prospects of any Borrower
or any other Person, or to give any other notice, disclosure or demand.
2.3. Waivers, etc. The Guarantor hereby irrevocably waives any
defense to or limitation on its obligations under this Agreement arising out of
or based upon any matter referred to in Section 2.2 and, without limiting the
generality of the foregoing, any requirement of promptness, diligence or notice
of acceptance, any other notice, disclosure or demand with respect to any of the
Guaranteed Obligations and this Agreement, any requirement of acceptance hereof,
reliance hereon or knowledge hereof by the Agent or any Lender, and any
requirement that the Agent or any Lender protect, secure, perfect or insure any
lien or any property subject thereto or exhaust any right or take any action
against any Borrower or any other Person or any collateral or other direct or
indirect security for any of the Guaranteed Obligations. Notwithstanding the
foregoing sentence, the Guarantor's waiver under this Section 2.3 shall apply
only to the Guarantor's obligations hereunder and shall not limit or waive any
of the Guarantor's rights or obligations as a borrower under the Credit
Agreement.
2.4. Reinstatement. This Agreement shall continue to be
effective, or be automatically reinstated, as the case may be, if at any time
payment of any of the Guaranteed Obligations is avoided, rescinded or must
otherwise be returned by the Agent or any Lender for any reason, all as though
such payment had not been made.
2.5. No Stay. Without limiting the generality of any other
provision of this Agreement, if any acceleration of the time for payment or
performance of any Guaranteed Obligation, or any condition to any such
acceleration, shall at any time be stayed, enjoined or prevented for any reason
(including stay or injunction resulting from the pendency against any Borrower
or any other Person of a bankruptcy, insolvency, reorganization, dissolution or
similar proceeding), the Guarantor agrees that, for purposes of this Agreement
and its obligations hereunder, at the option of the Agent such Guaranteed
Obligation shall be deemed to have been accelerated and such condition to
acceleration shall be deemed to have been met.
2.6. Payments. All payments to be made by the Guarantor
pursuant to this Agreement shall be made at the times and in the manner
prescribed for payments in Articles II and III of the Credit Agreement, without
setoff, counterclaim, withholding or other deduction of any nature. All payments
made by the Guarantor pursuant to this Agreement may be applied to the
Guaranteed Obligations and all other amounts payable under this Agreement in
such order as the Agent may elect.
2.7. Subrogation, Etc. Any rights which the Guarantor may have
or acquire by way of subrogation, reimbursement, restitution, exoneration,
contribution or indemnity, and any similar rights (whether arising by operation
of law, by agreement or otherwise), against any Borrower arising from the
existence, payment, performance or enforcement of any of the obligations of the
Guarantor under or in connection with this Agreement, shall be subordinate in
right of payment to the Guaranteed Obligations, and the Guarantor shall not
exercise any such rights until all Guaranteed Obligations and all other
obligations under this Agreement have been paid in cash or in such other manner
as may be acceptable to the Agent and performed in full and all commitments to
extend credit under, and all Letters of Credit issued under, the Loan Documents
shall have terminated. If, notwithstanding the foregoing, any amount shall be
received by the Guarantor on account of any such rights at any time prior to the
time at which all Guaranteed Obligations and all other obligations under this
Agreement shall have been paid in cash or in such other manner as may be
acceptable to the Agent and performed in full and all commitments to extend
credit under, and all Letters of Credit issued under, the Loan Documents shall
have terminated, such amount shall be held by the Guarantor in trust for the
benefit of the Lenders, segregated from other funds held by the Guarantor, and
shall be forthwith delivered to Agent for the benefit of the Lenders in the
exact form received by the Guarantor (with any necessary endorsement), to be
applied to the Guaranteed Obligations, whether matured or unmatured, in such
order as the Agent may elect, or to be held by the Agent as security for the
Guaranteed Obligations and disposed of by the Agent in any lawful manner, all as
the Agent may elect.
2.8. Continuing Agreement. This Agreement is a continuing
guaranty and shall continue in full force and effect until all Guaranteed
Obligations and all other amounts payable under this Agreement have been paid in
cash or such other manner as may be acceptable to the Agent and performed in
full, and all commitments to extend credit under, and all Letters of Credit
issued under, the Loan Documents have terminated, subject in any event to
reinstatement in accordance with Section 2.4. Without limiting the generality of
the foregoing, the Guarantor hereby irrevocably waives any right to terminate or
revoke this Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
The Guarantor hereby represents and warrants to the Agent and
the Lenders as follows:
3.1. Credit Agreement. The provisions of Article IV of the
Credit Agreement are hereby incorporated by reference (together with all related
definitions and cross references). The Guarantor hereby represents and warrants
to the Agent and the Lenders as provided therein.
3.2. Representations and Warranties Remade at Each Extension
of Credit. Each request (including any deemed request) by any Borrower for any
extension of credit under any Loan Document shall be deemed to constitute a
representation and warranty by the Guarantor to the Agent and the Lenders that
the representations and warranties made by the Guarantor in this Article III are
true and correct on and as of the date of such request with the same effect as
though made on and as of such date. Failure by the Agent to receive notice from
the Guarantor to the contrary before the Lenders make any extension of credit
under any Loan Document shall constitute a further representation and warranty
by the Guarantor to the Agent and the Lenders that the representations and
warranties made by the Guarantor in this Article III are true and correct on and
as of the date of such extension of credit with the same effect as though made
on and as of such date.
ARTICLE IV
COVENANTS
4.1. Covenants Generally. Reference is hereby made to the
provisions of Articles VI and VII of the Credit Agreement (together with all
related definitions and cross-references). To the extent such provisions impose
upon any Borrower a duty to cause the Guarantor (or a Subsidiary of the
Guarantor) to do or refrain from doing certain acts or things or to meet or
refrain from meeting certain conditions, the Guarantor shall (or shall cause
such Subsidiary of the Guarantor to, as the case may be) do or refrain from
doing such acts or things, or meet or refrain from meeting such conditions, as
the case may be.
ARTICLE V
MISCELLANEOUS
5.1. Amendments, etc. No amendment to or waiver of any
provision of this Agreement, and no consent to any departure by the Guarantor
herefrom, shall in any event be effective unless in a writing manually signed by
or on behalf of each Lender. Any such waiver or consent shall be effective only
in the specific instance and for the specific purpose for which given.
5.2. No Implied Waiver; Remedies Cumulative. No delay or
failure of the Agent or any Lender in exercising any right or remedy under this
Agreement shall operate as a waiver thereof; nor shall any single or partial
exercise of any such right or remedy preclude any other or further exercise
thereof or the exercise of any other right or remedy. The rights and remedies of
the Agent and the Lenders under this Agreement are cumulative and not exclusive
of any other rights or remedies available hereunder, under any other agreement,
at law, or otherwise.
5.3. Notices. Except to the extent, if any, otherwise
expressly provided herein, all notices and other communications (collectively,
"notices") under this Agreement shall be in writing (including facsimile
transmission) and shall be sent by certified or registered mail, by
nationally-recognized overnight courier or by personal delivery. All notices
shall be sent to the address specified in the Credit Agreement for the
applicable party, or, in any case, to such other address as shall have been
designated by the applicable party by notice to the other party hereto. Any
properly given notice shall be effective when received, except that properly
given notices to the Guarantor shall be effective at the following time, if
earlier: if given by telephone, when telephoned; if by first-class mail, three
Business Days after deposit in the mail; if by overnight courier, one Business
Day after pickup by such courier; and if by facsimile transmission, upon
transmission. The Agent and the Lenders may rely on any notice (whether or not
made in a manner contemplated by this Agreement) purportedly made by or on
behalf of the Guarantor, and Agent and the Lenders shall have no duty to verify
the identity or authority of the Person giving such notice.
5.4. Expenses. The Guarantor agrees to pay upon demand all
reasonable expenses (including reasonable fees and expenses of counsel) which
the Agent or any Lender may incur from time to time arising from or relating to
the administration of, or exercise, enforcement or preservation of rights or
remedies under, this Agreement, other than costs and expenses incurred by the
Agent or any Lender, respectively, in connection with any litigation which
results in a final, non-appealable judgment against the Agent or such Lender.
5.5. Entire Agreement. This Agreement constitutes the entire
agreement of the parties hereto with respect to the subject matter hereof and
supersedes all prior and contemporaneous understandings and agreements.
5.6. Survival. All representations and warranties of the
Guarantor contained in or made in connection with this Agreement shall survive,
and shall not be waived by, the execution and delivery of this Agreement, any
investigation by or knowledge of the Agent or any Lender, any extension of
credit, or any other event or circumstance whatever.
5.7. Counterparts. This Agreement may be executed in any
number of counterparts, including facsimile counterparts, each of which shall be
deemed an original, and all such counterparts shall constitute but one and the
same agreement.
5.8. Setoff. In the event that any obligation of the Guarantor
now or hereafter existing under this Agreement or any other Loan Document shall
have become due and payable, after an Event of Default under the Loan Documents
has occurred, each Lender shall have the right from time to time, without notice
to the Guarantor, to set off against and apply to such due and payable amount
any obligation of any nature of each Lender to the Guarantor, including all
deposits (whether time or demand, general or special, provisionally or finally
credited, however evidenced) now or hereafter maintained by the Guarantor with
the Lender. Such right shall be absolute and unconditional in all circumstances
and, without limitation, shall exist whether such obligation to the Guarantor is
absolute or contingent, matured or unmatured (it being agreed that each Lender
may deem such obligation to be then due and payable at the time of such setoff),
regardless of the offices or branches through which the parties are acting with
respect to the offset obligations, regardless of whether the offset obligations
are denominated in the same or different currencies, and regardless of the
existence or adequacy of any other direct or indirect security or any other
right or remedy available to such Lender. Nothing in this Agreement or any other
Loan Document shall be deemed a waiver of or restriction on any right of setoff
or banker's lien available to any Lender under this Section 5.8, at law or
otherwise. The Guarantor hereby agrees that any affiliate of any Lender, and any
holder of a participation in any Guaranteed Obligations of the Guarantor under
this Agreement, shall have the same rights of setoff as each Lender as provided
in this Section 5.8 (regardless of whether such affiliate or participant
otherwise would be deemed a creditor of the Guarantor).
5.9. Construction. In this Agreement, unless the context
otherwise clearly requires, references to the plural include the singular, the
singular the plural, and the part the whole; the neuter case includes the
masculine and feminine cases; and "or" is not exclusive. In this Agreement, any
references to property (or similar terms) include any interest in such property
(or other item referred to); "include," "includes," "including" and similar
terms are not limiting; and "hereof," "herein," "hereunder" and similar terms
refer to this Agreement as a whole and not to any particular provision; Section
and other headings in this Agreement, and any table of contents herein, are for
reference purposes only and shall not affect the interpretation of this
Agreement in any respect. Section and other references in this Agreement are to
this Agreement unless otherwise specified. This Agreement has been fully
negotiated between the applicable parties, each party having the benefit of
legal counsel, and accordingly neither any doctrine of construction of
guaranties or suretyships in favor of the guarantor or surety, nor any doctrine
of construction of ambiguities against the party controlling the drafting, shall
apply to this Agreement.
5.10. Successors and Assigns. This Agreement shall be binding
upon the Guarantor, its successors and assigns, and shall inure to the benefit
of and be enforceable by the Agent, the Lender and their respective successors
and assigns. Without limitation of the foregoing, the Agent or any Lender (and
any successive assignee or transferee) from time to time may assign or otherwise
transfer all or any portion of its rights or obligations under the Loan
Documents (including all or any portion of any commitment to extend credit), or
any Guaranteed Obligations, to any other Person, and such Guaranteed Obligations
(including any Guaranteed Obligations resulting from extension of credit by such
other Person under or in connection with the Loan Documents) shall be and remain
Guaranteed Obligations entitled to the benefit of this Agreement, and to the
extent of its interest in such Guaranteed Obligations such other Person shall be
vested with all the benefits in respect thereof granted to the Agent or any
Lender, as the case may be, in this Agreement or otherwise.
5.11. Certain Legal Matters.
(A) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, EXCLUSIVE OF CHOICE OF LAW
PRINCIPLES.
(B) SUBMISSION TO JURISDICTION AND VENUE; CONSENT TO SERVICE OF PROCESS;
WAIVER OF JURY TRIAL; ETC. THE GUARANTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY:
(I) AGREES THAT ANY ACTION, SUIT OR PROCEEDING BY ANY PERSON ARISING FROM
OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR ANY
STATEMENT, COURSE OF CONDUCT, ACT, OMISSION OR EVENT IN CONNECTION WITH
ANY OF THE FOREGOING (COLLECTIVELY, "RELATED LITIGATION") MAY BE
BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION SITTING
IN THE CITY OR COUNTY OF NEW YORK, NEW YORK, SUBMITS TO THE
JURISDICTION OF SUCH COURTS, AND AGREES NOT TO BRING ANY RELATED
LITIGATION IN ANY OTHER FORUM (BUT NOTHING HEREIN SHALL AFFECT THE
RIGHT OF THE AGENT OR ANY LENDER TO BRING ANY RELATED LITIGATION IN ANY
OTHER FORUM);
(II) ACKNOWLEDGES THAT SUCH COURTS WILL BE THE MOST CONVENIENT FORUM FOR ANY
RELATED LITIGATION, WAIVES ANY OBJECTION TO THE LAYING OF VENUE OF ANY
RELATED LITIGATION BROUGHT IN ANY SUCH COURT, WAIVES ANY CLAIM THAT ANY
RELATED LITIGATION BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM, AND WAIVES ANY RIGHT TO OBJECT, WITH RESPECT TO ANY
RELATED LITIGATION, THAT SUCH COURT DOES NOT HAVE JURISDICTION OVER IT;
(III) CONSENTS AND AGREES TO SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER LEGAL
PROCESS IN ANY RELATED LITIGATION BY REGISTERED OR CERTIFIED U.S. MAIL,
POSTAGE PREPAID, TO IT AT THE ADDRESS FOR NOTICES DESCRIBED IN THIS
AGREEMENT, AND CONSENTS AND AGREES THAT SUCH SERVICE SHALL CONSTITUTE
IN EVERY RESPECT VALID AND EFFECTIVE SERVICE (BUT NOTHING HEREIN SHALL
AFFECT THE VALIDITY OR EFFECTIVENESS OF PROCESS SERVED IN ANY OTHER
MANNER PERMITTED BY LAW); AND
(IV) WAIVES THE RIGHT TO TRIAL BY JURY IN ANY RELATED LITIGATION.
(C) LIMITATION OF LIABILITY. NO CLAIM MAY BE MADE BY THE GUARANTOR AGAINST THE
AGENT OR ANY LENDER OR ANY AFFILIATE, DIRECTOR, OFFICER, EMPLOYEE, ATTORNEY OR
AGENT OF THE AGENT OR ANY LENDER FOR ANY SPECIAL, INDIRECT, CONSEQUENTIAL OR
PUNITIVE DAMAGES IN RESPECT OF ANY CLAIM ARISING FROM OR RELATING TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT OR ANY STATEMENT, COURSE OF CONDUCT, ACT,
OMISSION OR EVENT IN CONNECTION WITH ANY OF THE FOREGOING (WHETHER BASED ON
BREACH OF CONTRACT, TORT OR ANY OTHER THEORY OF LIABILITY); AND THE GUARANTOR
HEREBY WAIVES, RELEASES AND AGREES NOT TO SUE UPON ANY CLAIM FOR ANY SUCH
DAMAGES, WHETHER OR NOT ACCRUED AND WHETHER OR NOT KNOWN OR SUSPECTED TO EXIST.
THE GUARANTOR ACKNOWLEDGES THAT IT HAS BEEN REPRESENTED BY LEGAL COUNSEL IN
CONNECTION WITH THE EXECUTION AND DELIVERY OF THIS AGREEMENT AND THAT IT
UNDERSTANDS THE PROVISIONS OF THIS AGREEMENT.
IN WITNESS WHEREOF, the Guarantor has executed and delivered
this Agreement as of the date first above written.
CURTISS-WRIGHT CORPORATION
By
Name:
Title:
<PAGE>
EXHIBT F
to Credit Agreement
FORM OF SUBSIDIARY GUARANTY
GUARANTY AND SURETYSHIP AGREEMENT
THIS GUARANTY AND SURETYSHIP AGREEMENT (this "Guaranty") dated
as of the 20th day of December, 1999, made by [NAME OF SUBSIDIARY], a
corporation ("Guarantor"), to the lenders parties hereto from time to time (the
"Lenders", as defined further below) and MELLON BANK, N.A., a national banking
association, as agent for the Lenders (in such capacity, together with its
successors in such capacity, the "Agent").
W I T N E S S E T H:
WHEREAS, Curtiss-Wright Corporation, a Delaware corporation
("Curtiss-Wright") and the Subsidiary Borrowers party thereto from time to time
(collectively with Curtiss-Wright, the "Borrowers" and each individually a
"Borrower") have entered into a Credit Agreement of even date herewith with the
Lenders parties thereto from time to time, the Issuing Banks referred to
therein, and Mellon Bank, N.A., as Agent (as amended, modified or supplemented
from time to time, the "Credit Agreement"); and
WHEREAS, the Guarantor will derive substantial direct and
indirect benefit from the transactions contemplated by the Credit Agreement, and
the Guarantor may receive extensions of credit under the Credit Agreement from
time to time; and
WHEREAS, it is a condition precedent to the extension of
credit under the Credit Agreement that the Guarantor execute and deliver this
Agreement; and
WHEREAS, this Agreement, among other things, is made by the
Guarantor to induce the Lenders to enter into the Loan Documents (as defined in
the Credit Agreement) and to induce the Lenders to extend credit under the
Credit Agreement;
NOW, THEREFORE, in consideration of the premises and other
good and valuable consideration, the receipt of which is hereby acknowledged by
Guarantor, and intending to be legally bound, Guarantor hereby agrees as
follows:
ARTICLE I
DEFINITIONS
1.1 Definitions.
(a) Certain Definitions. Capitalized terms not otherwise
defined herein shall have the meanings given in the Credit Agreement. In
addition to the other terms defined elsewhere in this Agreement, as used herein
the following terms shall have the following meanings:
"Guaranteed Obligations" shall mean all obligations from time
to time of the Borrowers to the Agent or any Lender under or in
connection with any Loan Document, including all obligations to pay
principal, interest, fees, indemnities or other amounts under such Loan
Documents, in each case whether such obligations are direct or
indirect, secured or unsecured, joint or several, absolute or
contingent, due or to become due, whether for payment or performance,
now existing or hereafter arising (including interest and other
obligations arising or accruing after the commencement of any
bankruptcy, insolvency, reorganization, dissolution or similar
proceeding with respect to any Borrower or any other Person, or which
would have arisen or accrued but for the commencement of such
proceeding, even if such obligation or the claim therefor is not
enforceable or allowable in such proceeding).
ARTICLE II
GUARANTY AND SURETYSHIP
2.1. Guaranty and Suretyship. The Guarantor hereby absolutely,
unconditionally and irrevocably guarantees and becomes surety for the full and
punctual payment and performance of the Guaranteed Obligations as and when such
payment or performance shall become due (at scheduled maturity, by acceleration
or otherwise) in accordance with the terms of the Loan Documents. This Agreement
is an agreement of suretyship as well as of guaranty, is a guarantee of payment
and performance and not merely of collectibility, and is in no way conditioned
upon any attempt to collect from or proceed against any Borrower or any other
Person or any other event or circumstance. The obligations of the Guarantor
under this Agreement are direct and primary obligations of the Guarantor and are
independent of the Guaranteed Obligations, and a separate action or actions may
be brought against the Guarantor regardless of whether action is brought against
any Borrower or any other Person or whether such Borrower or any other Person is
joined in any such action or actions.
2.2. Obligations Absolute. The Guarantor agrees that the
Guaranteed Obligations will be paid and performed strictly in accordance with
the terms of the Loan Documents, regardless of any law, regulation or order now
or hereafter in effect in any jurisdiction affecting the Guaranteed Obligations,
any of the terms of the Loan Documents or the rights of the Agent or any Lender
or any other Person with respect thereto. The obligations of the Guarantor under
this Agreement shall be absolute, unconditional and irrevocable, irrespective of
any of the following:
(a) any lack of legality, validity, enforceability,
allowability (in a bankruptcy, insolvency, reorganization, dissolution
or similar proceeding, or otherwise), or any avoidance or
subordination, in whole or in part, of any Loan Document or any of the
Guaranteed Obligations;
(b) any change in the amount, nature, time, place or manner of
payment or performance of, or in any other term of, any of the
Guaranteed Obligations (whether or not such change is contemplated by
the Loan Documents as presently constituted, and specifically including
any increase in the Guaranteed Obligations, whether resulting from the
extension of additional credit to any Borrower or otherwise), any
execution of any additional Loan Documents, or any amendment or waiver
of or any consent to departure from any Loan Document;
(c) any taking, exchange, release, impairment or nonperfection
of any collateral, or any taking, release, impairment or amendment or
waiver of or consent to departure from any other guaranty or other
direct or indirect security for any of the Guaranteed Obligations;
(d) any manner of application of collateral or other direct or
indirect security for any of the Guaranteed Obligations, or proceeds
thereof, to any of the Guaranteed Obligations, or any commercially
reasonable manner of sale or other disposition of any collateral for
any of the Guaranteed Obligations or any other assets of any Borrower;
(e) any permanent impairment by any Lender or any other Person
of any recourse of the Guarantor against any Borrower or any other
Person, or any other permanent impairment by any Lender or any other
Person of the suretyship status of the Guarantor;
(f) any bankruptcy, insolvency, reorganization, dissolution or
similar proceedings with respect to, or any change, restructuring or
termination of the corporate structure or existence of, any Borrower,
the Guarantor or any other Person; or
(g) any failure of any Lender or any other Person to disclose
to the Guarantor any information pertaining to the business,
operations, condition (financial or other) or prospects of any Borrower
or any other Person, or to give any other notice, disclosure or demand.
2.3. Waivers, etc. The Guarantor hereby irrevocably waives any
defense to or limitation on its obligations under this Agreement arising out of
or based upon any matter referred to in Section 2.2 and, without limiting the
generality of the foregoing, any requirement of promptness, diligence or notice
of acceptance, any other notice, disclosure or demand with respect to any of the
Guaranteed Obligations and this Agreement, any requirement of acceptance hereof,
reliance hereon or knowledge hereof by the Agent or any Lender, and any
requirement that the Agent or any Lender protect, secure, perfect or insure any
lien or any property subject thereto or exhaust any right or take any action
against any Borrower or any other Person or any collateral or other direct or
indirect security for any of the Guaranteed Obligations. Notwithstanding the
foregoing sentence, the Guarantor's waiver under this Section 2.3 shall apply
only to the Guarantor's obligations hereunder and shall not limit or waive any
of the Guarantor's rights or obligations as a borrower under the Credit
Agreement.
2.4. Reinstatement. This Agreement shall continue to be
effective, or be automatically reinstated, as the case may be, if at any time
payment of any of the Guaranteed Obligations is avoided, rescinded or must
otherwise be returned by the Agent or any Lender for any reason, all as though
such payment had not been made.
2.5. No Stay. Without limiting the generality of any other
provision of this Agreement, if any acceleration of the time for payment or
performance of any Guaranteed Obligation, or any condition to any such
acceleration, shall at any time be stayed, enjoined or prevented for any reason
(including stay or injunction resulting from the pendency against any Borrower
or any other Person of a bankruptcy, insolvency, reorganization, dissolution or
similar proceeding), the Guarantor agrees that, for purposes of this Agreement
and its obligations hereunder, at the option of the Agent such Guaranteed
Obligation shall be deemed to have been accelerated and such condition to
acceleration shall be deemed to have been met.
2.6. Payments. All payments to be made by the Guarantor
pursuant to this Agreement shall be made at the times and in the manner
prescribed for payments in Articles II and III of the Credit Agreement, without
setoff, counterclaim, withholding or other deduction of any nature. All payments
made by the Guarantor pursuant to this Agreement may be applied to the
Guaranteed Obligations and all other amounts payable under this Agreement in
such order as the Agent may elect.
2.7. Subrogation, Etc. Any rights which the Guarantor may have
or acquire by way of subrogation, reimbursement, restitution, exoneration,
contribution or indemnity, and any similar rights (whether arising by operation
of law, by agreement or otherwise), against any Borrower arising from the
existence, payment, performance or enforcement of any of the obligations of the
Guarantor under or in connection with this Agreement, shall be subordinate in
right of payment to the Guaranteed Obligations, and the Guarantor shall not
exercise any such rights until all Guaranteed Obligations and all other
obligations under this Agreement have been paid in cash or such other manner as
may be acceptable to the Agent and performed in full and all commitments to
extend credit under, and all Letters of Credit issued under, the Loan Documents
shall have terminated. If, notwithstanding the foregoing, any amount shall be
received by the Guarantor on account of any such rights at any time prior to the
time at which all Guaranteed Obligations and all other obligations under this
Agreement shall have been paid in cash or such other manner as may be acceptable
to the Agent and performed in full and all commitments to extend credit under,
and all Letters of Credit issued under, the Loan Documents shall have
terminated, such amount shall be held by the Guarantor in trust for the benefit
of the Lenders, segregated from other funds held by the Guarantor, and shall be
forthwith delivered to Agent for the benefit of the Lenders in the exact form
received by the Guarantor (with any necessary endorsement), to be applied to the
Guaranteed Obligations, whether matured or unmatured, in such order as the Agent
may elect, or to be held by the Agent as security for the Guaranteed Obligations
and disposed of by the Agent in any lawful manner, all as the Agent may elect.
2.8. Continuing Agreement. This Agreement is a continuing
guaranty and shall continue in full force and effect until all Guaranteed
Obligations and all other amounts payable under this Agreement have been paid in
cash or such other manner as may be acceptable to the Agent and performed in
full, and all commitments to extend credit under, and all Letters of Credit
issued under, the Loan Documents have terminated, subject in any event to
reinstatement in accordance with Section 2.4. Without limiting the generality of
the foregoing, the Guarantor hereby irrevocably waives any right to terminate or
revoke this Agreement.
2.9. Limitation on Obligations. Notwithstanding any other
provision hereof, to the extent that mandatory and nonwaivable provisions of
applicable Law pertaining to fraudulent transfer or fraudulent conveyance
otherwise would render the full amount of the obligations of the Guarantor under
this Agreement avoidable, invalid or unenforceable, the obligations of the
Guarantor under this Agreement shall be limited to the maximum amount which does
not result in such avoidability, invalidity or unenforceability. In any action,
suit or proceeding pertaining to this Agreement, the burden of proof, by clear
and convincing evidence, shall be on the Person claiming that this Section 2.9
applies to limit any obligation of the Guarantor under this Agreement, or
claiming that any obligation of the Guarantor under this Agreement is avoidable,
invalid or unenforceable, as to each element of such claim.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
The Guarantor hereby represents and warrants to the Agent and
the Lenders as follows:
3.1. Credit Agreement. The provisions of Article IV of the
Credit Agreement are hereby incorporated by reference (together with all related
definitions and cross references). The Guarantor hereby represents and warrants
to the Agent and the Lenders as provided therein.
3.2. Representations and Warranties Remade at Each Extension
of Credit. Each request (including any deemed request) by any Borrower for any
extension of credit under any Loan Document shall be deemed to constitute a
representation and warranty by the Guarantor to the Agent and the Lenders that
the representations and warranties made by the Guarantor in this Article III are
true and correct on and as of the date of such request with the same effect as
though made on and as of such date. Failure by the Agent to receive notice from
the Guarantor to the contrary before the Lenders make any extension of credit
under any Loan Document shall constitute a further representation and warranty
by the Guarantor to the Agent and the Lenders that the representations and
warranties made by the Guarantor in this Article III are true and correct on and
as of the date of such extension of credit with the same effect as though made
on and as of such date.
ARTICLE IV
COVENANTS
4.1. Covenants Generally. Reference is hereby made to the
provisions of Articles VI and VII of the Credit Agreement (together with all
related definitions and cross-references). To the extent such provisions impose
upon any Borrower a duty to cause the Guarantor (or a Subsidiary of the
Guarantor) to do or refrain from doing certain acts or things or to meet or
refrain from meeting certain conditions, the Guarantor shall (or shall cause
such Subsidiary of the Guarantor to, as the case may be) do or refrain from
doing such acts or things, or meet or refrain from meeting such conditions, as
the case may be.
ARTICLE V
MISCELLANEOUS
5.1. Amendments, etc. No amendment to or waiver of any
provision of this Agreement, and no consent to any departure by the Guarantor
herefrom, shall in any event be effective unless in a writing manually signed by
or on behalf of each Lender; provided that this Agreement may be terminated and
the Guarantor may be released herefrom with the written consent of the Required
Lenders in connection with the sale or other disposition of all of the capital
stock of and other equity interests in the Guarantor to a Person or Persons
other than a Borrower or a Subsidiary of a Borrower, which sale or other
disposition is in compliance with the Credit Agreement and the Loan Documents.
Any such waiver or consent shall be effective only in the specific instance and
for the specific purpose for which given.
5.2. No Implied Waiver; Remedies Cumulative. No delay or
failure of the Agent or any Lender in exercising any right or remedy under this
Agreement shall operate as a waiver thereof; nor shall any single or partial
exercise of any such right or remedy preclude any other or further exercise
thereof or the exercise of any other right or remedy. The rights and remedies of
the Agent and the Lenders under this Agreement are cumulative and not exclusive
of any other rights or remedies available hereunder, under any other agreement,
at law, or otherwise.
5.3. Notices. Except to the extent, if any, otherwise
expressly provided herein, all notices and other communications (collectively,
"notices") under this Agreement shall be in writing (including facsimile
transmission) and shall be sent by certified or registered mail, by
nationally-recognized overnight courier or by personal delivery. All notices
shall be sent to the address specified in the Credit Agreement for the
applicable party, or, in any case, to such other address as shall have been
designated by the applicable party by notice to the other party hereto. Any
properly given notice shall be effective when received, except that properly
given notices to the Guarantor shall be effective at the following time, if
earlier: if given by telephone, when telephoned; if by first-class mail, three
Business Days after deposit in the mail; if by overnight courier, one Business
Day after pickup by such courier; and if by facsimile transmission, upon
transmission. The Agent and the Lenders may rely on any notice (whether or not
made in a manner contemplated by this Agreement) purportedly made by or on
behalf of the Guarantor, and Agent and the Lenders shall have no duty to verify
the identity or authority of the Person giving such notice.
5.4. Expenses. The Guarantor agrees to pay upon demand all
reasonable expenses (including reasonable fees and expenses of counsel) which
the Agent or any Lender may incur from time to time arising from or relating to
the administration of, or exercise, enforcement or preservation of rights or
remedies under, this Agreement, other than costs and expenses incurred by the
Agent or any Lender, respectively, in connection with any litigation which
results in a final, non-appealable judgment against the Agent or such Lender.
5.5. Entire Agreement. This Agreement constitutes the entire
agreement of the parties hereto with respect to the subject matter hereof and
supersedes all prior and contemporaneous understandings and agreements.
5.6. Survival. All representations and warranties of the
Guarantor contained in or made in connection with this Agreement shall survive,
and shall not be waived by, the execution and delivery of this Agreement, any
investigation by or knowledge of the Agent or any Lender, any extension of
credit, or any other event or circumstance whatever.
5.7. Counterparts. This Agreement may be executed in any
number of counterparts, including facsimile counterparts, each of which shall be
deemed an original, and all such counterparts shall constitute but one and the
same agreement.
5.8. Setoff. In the event that any obligation of the Guarantor
now or hereafter existing under this Agreement or any other Loan Document shall
have become due and payable, after an Event of Default under the Loan Documents
has occurred, each Lender shall have the right from time to time, without notice
to the Guarantor, to set off against and apply to such due and payable amount
any obligation of any nature of each Lender to the Guarantor, including all
deposits (whether time or demand, general or special, provisionally or finally
credited, however evidenced) now or hereafter maintained by the Guarantor with
such Lender. Such right shall be absolute and unconditional in all circumstances
and, without limitation, shall exist whether such obligation to the Guarantor is
absolute or contingent, matured or unmatured (it being agreed that each Lender
may deem such obligation to be then due and payable at the time of such setoff),
regardless of the offices or branches through which the parties are acting with
respect to the offset obligations, regardless of whether the offset obligations
are denominated in the same or different currencies, and regardless of the
existence or adequacy of any other direct or indirect security or any other
right or remedy available to such Lender. Nothing in this Agreement or any other
Loan Document shall be deemed a waiver of or restriction on any right of setoff
or banker's lien available to any Lender under this Section 5.8, at law or
otherwise. The Guarantor hereby agrees that any affiliate of any Lender, and any
holder of a participation in any Guaranteed Obligations of the Guarantor under
this Agreement, shall have the same rights of setoff as each Lender as provided
in this Section 5.8 (regardless of whether such affiliate or participant
otherwise would be deemed a creditor of the Guarantor).
5.9. Construction. In this Agreement, unless the context
otherwise clearly requires, references to the plural include the singular, the
singular the plural, and the part the whole; the neuter case includes the
masculine and feminine cases; and "or" is not exclusive. In this Agreement, any
references to property (or similar terms) include any interest in such property
(or other item referred to); "include," "includes," "including" and similar
terms are not limiting; and "hereof," "herein," "hereunder" and similar terms
refer to this Agreement as a whole and not to any particular provision; Section
and other headings in this Agreement, and any table of contents herein, are for
reference purposes only and shall not affect the interpretation of this
Agreement in any respect. Section and other references in this Agreement are to
this Agreement unless otherwise specified. This Agreement has been fully
negotiated between the applicable parties, each party having the benefit of
legal counsel, and accordingly neither any doctrine of construction of
guaranties or suretyships in favor of the guarantor or surety, nor any doctrine
of construction of ambiguities against the party controlling the drafting, shall
apply to this Agreement.
5.10. Successors and Assigns. This Agreement shall be binding
upon the Guarantor, its successors and assigns, and shall inure to the benefit
of and be enforceable by the Agent, the Lenders and their respective successors
and assigns. Without limitation of the foregoing, the Agent or any Lender (and
any successive assignee or transferee) from time to time may assign or otherwise
transfer all or any portion of its rights or obligations under the Loan
Documents (including all or any portion of any commitment to extend credit), or
any Guaranteed Obligations, to any other Person, and such Guaranteed Obligations
(including any Guaranteed Obligations resulting from extension of credit by such
other Person under or in connection with the Loan Documents) shall be and remain
Guaranteed Obligations entitled to the benefit of this Agreement, and to the
extent of its interest in such Guaranteed Obligations such other Person shall be
vested with all the benefits in respect thereof granted to the Agent or any
Lender, as the case may be, in this Agreement or otherwise.
5.11. Certain Legal Matters.
(A) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, EXCLUSIVE OF
CHOICE OF LAW PRINCIPLES.
(B) SUBMISSION TO JURISDICTION AND VENUE; CONSENT TO SERVICE
OF PROCESS; WAIVER OF JURY TRIAL; ETC. THE GUARANTOR HEREBY IRREVOCABLY AND
UNCONDITIONALLY:
(I) AGREES THAT ANY ACTION, SUIT OR PROCEEDING BY ANY PERSON
ARISING FROM OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT
OR ANY STATEMENT, COURSE OF CONDUCT, ACT, OMISSION OR EVENT IN
CONNECTION WITH ANY OF THE FOREGOING (COLLECTIVELY, "RELATED
LITIGATION") MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION SITTING IN THE CITY OR COUNTY OF NEW YORK, NEW YORK,
SUBMITS TO THE JURISDICTION OF SUCH COURTS, AND AGREES NOT TO BRING ANY
RELATED LITIGATION IN ANY OTHER FORUM (BUT NOTHING HEREIN SHALL AFFECT
THE RIGHT OF THE AGENT OR ANY LENDER TO BRING ANY RELATED LITIGATION IN
ANY OTHER FORUM);
(II) ACKNOWLEDGES THAT SUCH COURTS WILL BE THE MOST CONVENIENT
FORUM FOR ANY RELATED LITIGATION, WAIVES ANY OBJECTION TO THE LAYING OF
VENUE OF ANY RELATED LITIGATION BROUGHT IN ANY SUCH COURT, WAIVES ANY
CLAIM THAT ANY RELATED LITIGATION BROUGHT IN ANY SUCH COURT HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM, AND WAIVES ANY RIGHT TO OBJECT, WITH
RESPECT TO ANY RELATED LITIGATION, THAT SUCH COURT DOES NOT HAVE
JURISDICTION OVER IT;
(III) CONSENTS AND AGREES TO SERVICE OF ANY SUMMONS, COMPLAINT
OR OTHER LEGAL PROCESS IN ANY RELATED LITIGATION BY REGISTERED OR
CERTIFIED U.S. MAIL, POSTAGE PREPAID, TO IT AT THE ADDRESS FOR NOTICES
DESCRIBED IN THIS AGREEMENT, AND CONSENTS AND AGREES THAT SUCH SERVICE
SHALL CONSTITUTE IN EVERY RESPECT VALID AND EFFECTIVE SERVICE (BUT
NOTHING HEREIN SHALL AFFECT THE VALIDITY OR EFFECTIVENESS OF PROCESS
SERVED IN ANY OTHER MANNER PERMITTED BY LAW); AND
(I) WAIVES THE RIGHT TO TRIAL BY JURY IN ANY RELATED LITIGATION.
(C) LIMITATION OF LIABILITY. NO CLAIM MAY BE MADE BY THE
GUARANTOR AGAINST THE AGENT OR ANY LENDER OR ANY AFFILIATE, DIRECTOR, OFFICER,
EMPLOYEE, ATTORNEY OR AGENT OF THE AGENT OR ANY LENDER FOR ANY SPECIAL,
INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES IN RESPECT OF ANY CLAIM ARISING FROM
OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR ANY STATEMENT,
COURSE OF CONDUCT, ACT, OMISSION OR EVENT IN CONNECTION WITH ANY OF THE
FOREGOING (WHETHER BASED ON BREACH OF CONTRACT, TORT OR ANY OTHER THEORY OF
LIABILITY); AND THE GUARANTOR HEREBY WAIVES, RELEASES AND AGREES NOT TO SUE UPON
ANY CLAIM FOR ANY SUCH DAMAGES, WHETHER OR NOT ACCRUED AND WHETHER OR NOT KNOWN
OR SUSPECTED TO EXIST.
THE GUARANTOR ACKNOWLEDGES THAT IT HAS BEEN REPRESENTED BY LEGAL COUNSEL IN
CONNECTION WITH THE EXECUTION AND DELIVERY OF THIS AGREEMENT AND THAT IT
UNDERSTANDS THE PROVISIONS OF THIS AGREEMENT.
IN WITNESS WHEREOF, the Guarantor has executed and delivered
this Agreement as of the date first above written.
[NAME OF SUBSIDIARY]
By
Name:
Title:
EXHIBIT 4(iii)
EXECUTION COPY
SHORT TERM CREDIT AGREEMENT
dated as of December 20, 1999
among
CURTISS-WRIGHT CORPORATION
and
THE SUBSIDIARY BORROWERS PARTIES HERETO FROM TIME TO TIME,
as Borrowers,
THE LENDERS PARTIES HERETO FROM TIME TO TIME
and
MELLON BANK, N.A.
as Agent
THE BANK OF NOVA SCOTIA
as Syndication Agent
and
PNC BANK, NATIONAL ASSOCIATION
as Documentation Agent
<PAGE>
TABLE OF CONTENTS
Section Title Page
ARTICLE I DEFINITIONS; CONSTRUCTION..........................................1
1.01. Certain Definitions.................................................1
1.02. Construction.......................................................11
1.03. Accounting Principles..............................................12
ARTICLE II THE CREDITS......................................................12
2.01. Revolving Credit Loans.............................................12
2.02. Facility Fee; Reduction of the Revolving Credit Committed Amounts..13
2.03. Making of Loans....................................................14
2.04. Interest Rates.....................................................15
2.05. Conversion or Renewal of Interest Rate Options.....................18
2.06. Prepayments Generally..............................................19
2.07. Optional Prepayments...............................................20
2.08. Interest Payment Dates.............................................20
2.09. Pro Rata Treatment; Payments Generally.............................20
2.10. Additional Compensation in Certain Circumstances...................22
2.11. HLT Classification.................................................24
2.12. Taxes..............................................................24
2.13. Funding by Branch, Subsidiary or Affiliate.........................26
2.14. Extension of Expiration Date.......................................26
2.15. Multicurrency Payments.............................................28
ARTICLE III REPRESENTATIONS AND WARRANTIES..................................29
3.01. Incorporation by Reference.........................................29
ARTICLE IV CONDITIONS OF LENDING............................................29
4.01. Conditions to Making of Initial Loans..............................29
4.02. Conditions to All Loans............................................30
ARTICLE V COVENANTS..........................................................31
5.01. Incorporation by Reference.........................................31
ARTICLE VI EVENTS OF DEFAULT................................................31
6.01. Events of Default..................................................31
6.02. Consequences of an Event of Default................................33
6.03. Judgment Currency..................................................34
ARTICLE VII THE AGENT.......................................................35
7.01. Appointment........................................................35
7.02. General Nature of Agent's Duties...................................35
7.03. Exercise of Powers.................................................35
7.04. General Exculpatory Provisions.....................................36
7.05. Administration by the Agent........................................36
7.06. Lender Not Relying on Agent or Other Lenders.......................37
7.07. Indemnification....................................................38
7.08. Agent in its Individual Capacity...................................38
7.09. Holders of Notes...................................................38
7.10. Successor Agent....................................................38
7.11. Additional Agents..................................................39
7.12. Calculations.......................................................39
7.13. Agent's Fee........................................................39
7.14. Funding by Agent...................................................39
ARTICLE VIII MISCELLANEOUS..................................................40
8.01. Holidays...........................................................40
8.02. Records............................................................40
8.03. Amendments and Waivers.............................................40
8.04. No Implied Waiver; Cumulative Remedies.............................41
8.05. Notices............................................................41
8.06. Expenses; Taxes; Indemnity.........................................42
8.07. Severability.......................................................43
8.08. Prior Understandings...............................................43
8.09. Duration; Survival.................................................43
8.10. Counterparts.......................................................44
8.11. Limitation on Payments.............................................44
8.12. Set-Off............................................................44
8.13. Sharing of Collections.............................................45
8.14. Successors and Assigns; Participations; Assignments................45
8.15. Governing Law; Submission to Jurisdiction; Limitation of
Liability.....................................................48
8.16. Confidentiality....................................................49
Exhibits
Exhibit A Form of Revolving Credit Note
Exhibit B Form of Opinion of Counsel
Exhibit C Form of Transfer Supplement
Exhibit D Form of Curtiss-Wright Guaranty
Exhibit E Form of Subsidiary Guaranty
<PAGE>
-13-
SHORT TERM CREDIT AGREEMENT
THIS SHORT TERM CREDIT AGREEMENT (this "Agreement"), dated as
of December 20, 1999, by and among CURTISS-WRIGHT CORPORATION, a Delaware
corporation ("Curtiss-Wright"), the Subsidiary Borrowers (as defined below)
party hereto from time to time (collectively with Curtiss-Wright, the
"Borrowers", and each individually a "Borrower"), the lenders party hereto from
time to time (the "Lenders", as defined further below) and MELLON BANK, N.A., a
national banking association, as agent for the Lenders (in such capacity,
together with its successors in such capacity, the "Agent").
WHEREAS, the Borrowers have requested the Agent and the
Lenders to enter into this Agreement and extend credit as herein provided;
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants herein contained and intending to be legally bound hereby, the
parties hereto agree as follows:
ARTICLE I
DEFINITIONS; CONSTRUCTION
. In addition to other words and terms defined elsewhere in this Agreement, as
used herein the following words and terms shall have the following meanings,
respectively, unless the context hereof otherwise clearly requires:
"Affected Lender" shall have the meaning set forth in Section
2.04(e) hereof.
"Affiliate" of a Borrower shall mean any Person which directly
or indirectly controls or is controlled by or is under common control
with a Borrower. For purposes of this definition "control" (including,
with correlative meanings, the terms "controlled by" and "under common
control with") means the possession, directly or indirectly, of the
power to direct or cause the direction of management policies, whether
through ownership of voting securities or by contract or otherwise.
"Alternative Funds" shall have the meaning set forth in
Section 2.04(f) hereof.
"Applicable Funding Rate" shall have the meaning set forth in
Section 2.10(b) hereof.
"Applicable Margin" shall have the meaning set forth in
Section 2.04(b) hereof.
"Assured Obligation" shall have the meaning set forth in the
definition of "Guaranty Equivalent" in this Section 1.01.
"Base Rate" shall have the meaning set forth in Section
2.04(a)(i) hereof.
"Base Rate Option" shall have the meaning set forth in Section
2.04(a) hereof.
"Base Rate Portion" of any Loan or Loans shall mean at any
time the portion, including the whole, of such Loan or Loans bearing
interest at such time (i) under the Base Rate Option or (ii) in
accordance with Section 2.09(c)(ii) hereof. If no Loan or Loans is
specified, "Base Rate Portion" shall refer to the Base Rate Portion of
all Loans outstanding at such time.
"Business Day" shall mean any day other than a Saturday,
Sunday, public holiday under the laws of the Commonwealth of
Pennsylvania or the State of New York or other day on which banking
institutions are authorized or obligated to close in the city in which
the Agent's Office is located.
"Change of Control" shall mean that any Person or group of
Persons (as used in Sections 13 and 14 of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), and the rules and regulations
thereunder) shall have become the beneficial owner (as defined in Rules
13d-3 and 13d-5 promulgated by the Securities and Exchange Commission
(the "SEC") under the Exchange Act) of 50% or more of the combined
voting power of all the outstanding voting securities of
Curtiss-Wright; provided, that none of Unitrin Corporation, Argonaut
Insurance Co. or any of their respective Subsidiaries shall be deemed
to be a Person for purposes of this definition.
"Closing Date" shall mean the date of this Agreement.
"Code" means the Internal Revenue Code of 1986, as amended,
and any successor statute of similar import, and regulations
thereunder, in each case as in effect from time to time. References to
sections of the Code shall be construed also to refer to any successor
sections.
"Commitment" of a Lender shall mean the Revolving Credit
Commitment of such Lender.
"Commitment Percentage" of a Lender at any time shall mean the
Commitment Percentage for such Lender set forth below its name on the
signature page hereof, as such percentage may be adjusted pursuant to
Section 2.14 hereof, and subject to transfer to another Lender as
provided in Section 8.14 hereof.
"Consolidated EBIT" shall mean, with respect to Curtiss-Wright
and its consolidated Subsidiaries, calculated for each fiscal quarter
then ending, and the immediately preceding three fiscal quarters
(determined on a consolidated basis and in accordance with GAAP), the
sum of (a) Consolidated Net Income, plus (b) Consolidated Interest
Expense, plus (c) consolidated cash federal and state income tax
expenses for such period.
"Consolidated EBITDA" shall mean, with respect to
Curtiss-Wright and its consolidated Subsidiaries, calculated for each
fiscal quarter then ending, and the immediately preceding three fiscal
quarters (determined on a consolidated basis and in accordance with
GAAP), the sum of (a) Consolidated EBIT, plus (b) depreciation and
amortization of assets for such period (if subtracted from earnings in
calculating the same), plus (c) extraordinary losses for such period,
minus (d) extraordinary gains for such period.
"Consolidated Interest Expense" shall mean, with respect to
Curtiss-Wright and its consolidated Subsidiaries calculated for each
fiscal quarter then ending, and the immediately preceding three fiscal
quarters, interest expense (whether cash or non-cash) determined in
accordance with GAAP for the relevant period ended on such date,
including, in any event, interest expense with respect to Indebtedness
of Curtiss-Wright and its consolidated Subsidiaries, interest expense
for the relevant period that has been capitalized on the balance sheet
and interest expense with respect to any Deemed Debt.
"Consolidated Net Income" shall mean, for any period, the
consolidated net income (or deficit) of Curtiss-Wright and its
consolidated Subsidiaries for such period, determined in accordance
with GAAP.
"Corresponding Source of Funds" shall mean, in the case of any
Funding Segment of the Euro-Rate Portion, the proceeds of hypothetical
receipts by a Notional Euro-Rate Funding Office or by a Lender through
a Notional Euro-Rate Funding Office of one or more Dollar deposits in
the interbank eurodollar market at the beginning of the Euro-Rate
Funding Period corresponding to such Funding Segment having maturities
approximately equal to such Euro-Rate Funding Period and in an
aggregate amount approximately equal to such Lender's Pro Rata share of
such Funding Segment.
"Curtiss-Wright Guaranty" shall have the meaning set forth in
Section 4.01(k) hereof.
"Debt Instrument" shall have the meaning set forth in Section
6.01(e) hereof.
"Deemed Debt" shall mean the amount of indebtedness incurred
by Curtiss-Wright and its consolidated Subsidiaries and any special
purpose corporation or trust which is an Affiliate of Curtiss-Wright or
any of its Subsidiaries in connection with any accounts receivable
financing facility, or other financing vehicle which is designed to
provide Curtiss-Wright or any Subsidiary thereof with off-balance sheet
financing whether or not shown on the balance sheet of Curtiss-Wright
or such Subsidiary in accordance with GAAP to the extent not included
in the definition of Indebtedness. For purposes of determining the
amount of Deemed Debt incurred by any Person in connection with any
off-balance sheet financing transaction, all contingent obligations of
such Person shall be included as well as non-recourse indebtedness
incurred in connection with such transaction. Deemed Debt shall not
include operating leases.
"Deemed Guarantor" shall have the meaning set forth in the
definition of "Guaranty Equivalent" in this Section 1.01.
"Deemed Obligor" shall have the meaning set forth in the
definition of "Guaranty Equivalent" in this Section 1.01.
"Dollar," "Dollars" and the symbol "$" shall mean lawful money
of the United States of America.
"Dollar Equivalent Amount" of any Revolving Credit Loan shall
mean (a) with respect to a Revolving Credit Loan denominated in an
Other Currency, an amount equal to the amount of Dollars that the
amount of such Other Currency (equal to the principal amount of such
Revolving Credit Loan) could purchase at 12:00 p.m., noon, Pittsburgh
time, on the date of determination, based upon the quoted spot rates of
the Agent, at which its applicable branch or office offers to exchange
Dollars for such currency in the foreign exchange market and (b) with
respect to a Revolving Credit Loan denominated in US Currency, an
amount in Dollars equal to the principal amount of such Revolving
Credit Loan.
"Euro" and "Euros" shall mean the lawful currency of the
participating member states of the European Union that adopt a single
currency in accordance with the Treaty establishing the European
Communities, as amended by the Treaty on European Union.
"Euro-Rate" shall have the meaning set forth in Section
2.04(a)(ii) hereof.
"Euro-Rate Option" shall have the meaning set forth in Section
2.04(a)(ii) hereof.
"Euro-Rate Portion" of any Loan or Loans shall mean at any
time the portion, including the whole, of such Loan or Loans bearing
interest at any time under the Euro-Rate Option or at a rate calculated
by reference to the Euro-Rate under Section 2.09(c)(i) hereof. If no
Loan or Loans is specified, "Euro-Rate Portion" shall refer to the
Euro-Rate Portion of all Loans outstanding at such time.
"Euro-Rate Reserve Percentage" shall have the meaning set
forth in Section 2.04(a)(ii) hereof.
"Event of Default" shall mean any of the Events of Default
described in Section 6.01 hereof.
"Expiration Date" shall mean December 17, 2000, or such later
date to which the Expiration Date may be extended pursuant to Section
2.14 hereof. Notwithstanding the foregoing, the Commitment shall never
have a remaining term of more than 364 days, and if for any reason the
Agent receives the consent of any Lender to an extension of the
Expiration Date pursuant to Section 2.14 hereof more than 364 days
before the requested new Expiration Date, such consent of such Lender
shall be considered absolutely revocable and in no manner binding on
such Lender until such date that is 364 days prior to such requested
new Expiration Date.
"Extension Request" shall have the meaning set forth in
Section 2.14 hereof.
"Facility Fee" shall have the meaning set forth in Section
2.02(a) hereof.
"Federal Funds Effective Rate" for any day shall mean the rate
per annum (rounded upward to the nearest 1/100 of 1%) determined by the
Agent (which determination shall be conclusive absent manifest error)
to be the rate per annum announced by the Federal Reserve Bank of New
York (or any successor) on such day as being the weighted average of
the rates on overnight Federal funds transactions arranged by Federal
funds brokers on the previous trading day, as computed and announced by
such Federal Reserve Bank (or any successor) in substantially the same
manner as such Federal Reserve Bank computes and announces the weighted
average it refers to as the "Federal Funds Effective Rate" as of the
date of this Agreement; provided, that if such Federal Reserve Bank (or
its successor) does not announce such rate on any day, the "Federal
Funds Effective Rate" for such day shall be the Federal Funds Effective
Rate for the last day on which such rate was announced.
"Funding Breakage Date" shall have the meaning set forth in
Section 2.10(b) hereof.
"Funding Breakage Indemnity" shall have the meaning set forth
in Section 2.10(b) hereof.
"Funding Periods" shall have the meaning set forth in Section
2.04(c) hereof.
"Funding Segment" of the Euro-Rate Portion of the Revolving
Credit Loans at any time shall mean the entire principal amount of such
Portion to which at the time in question there is applicable a
particular Funding Period beginning on a particular day and ending on a
particular day. (By definition, each such Portion is at all times
composed of an integral number of discrete Funding Segments and the sum
of the principal amounts of all Funding Segments of any such Portion at
any time equals the principal amount of such Portion at such time.)
"GAAP" shall have the meaning set forth in Section 1.03
hereof.
"Governmental Authority" shall mean any government or
political subdivision or any agency, authority, bureau, central bank,
commission, department or instrumentality of either, or any court,
tribunal, grand jury or arbitrator, in each case whether foreign or
domestic.
"Guaranty Equivalent": A Person (the "Deemed Guarantor") shall
be deemed to be subject to a Guaranty Equivalent in respect of any
indebtedness, obligation or liability (the "Assured Obligation") of
another Person (the "Deemed Obligor") if the Deemed Guarantor directly
or indirectly guarantees, becomes surety for, endorses, assumes, agrees
to indemnify the Deemed Obligor against, or otherwise agrees, becomes
or remains liable (contingently or otherwise) for, such Assured
Obligation. Without limitation, a Guaranty Equivalent shall be deemed
to exist if a Deemed Guarantor agrees, becomes or remains liable
(contingently or otherwise), directly or indirectly: (a) to purchase or
assume, or to supply funds for the payment, purchase or satisfaction
of, an Assured Obligation, (b) to make any loan, advance, capital
contribution or other investment in, or to purchase or lease any
property or services from, a Deemed Obligor (i) to maintain the
solvency of the Deemed Obligor, (ii) to enable the Deemed Obligor to
meet any other financial condition, (iii) to enable the Deemed Obligor
to satisfy any Assured Obligation or to make any Stock Payment or any
other payment, or (iv) to assure the holder of such Assured Obligation
against loss, (c) to purchase or lease property or services from the
Deemed Obligor regardless of the nondelivery of or failure to furnish
of such property or services, or (d) in respect of any other
transaction the effect of which is to assure the payment or performance
(or payment of damages or other remedy in the event of nonpayment or
nonperformance) of any Assured Obligation.
"HLT Classification" shall have the meaning set forth in
Section 2.11 hereof.
"Indebtedness" of a Person, at a particular date, shall mean,
without duplication, the following: (a) all indebtedness of such Person
for borrowed money or for the deferred purchase price of property; (b)
the face amount of all letters of credit (other than standby letters of
credit issued for the account of such Person in connection with bids on
proposed contracts by such Person) issued for the account of such
Person and, without duplication, all drafts drawn under all letters of
credit (including standby letters of credit); (c) all liabilities
secured by any Lien (other than Permitted Liens permitted under clause
(h) of the definition thereof) on any property owned by such Person, to
the extent attributable to such Person's interest in such property,
even though it has not assumed or become liable for the payment
thereof; (d) all Indebtedness of others as to which such Person is the
Deemed Guarantor under a Guaranty Equivalent; and (e) lease obligations
of such Person which have been, or which in accordance with GAAP,
should be capitalized.
"Indemnified Parties" shall mean the Agent, the Lenders, their
respective affiliates, and the directors, officers, employees,
attorneys and agents of each of the foregoing.
"Initial Revolving Credit Committed Amount" shall have the
meaning set forth in Section 2.01(a) hereof.
"Judgment Amount" shall have the meaning set forth in Section
6.03 hereof.
"Law" shall mean any law (including common law), constitution,
statute, treaty, convention, regulation, rule, ordinance, order,
injunction, writ, decree or award of any Governmental Authority.
"Lender" shall mean any of the Lenders listed on the signature
pages hereof, subject to the provisions of Section 8.14 hereof
pertaining to Persons becoming or ceasing to be Lenders.
"Leverage Ratio" shall mean, with respect to Curtiss-Wright
and its consolidated Subsidiaries for any fiscal period, the ratio of
(a) Indebtedness of Curtiss-Wright and its consolidated Subsidiaries
plus any Deemed Debt as of the date of determination, to (b)
Consolidated EBITDA plus, in the event of any acquisition by
Curtiss-Wright, with respect to the acquired company, the sum of (i)
the net earnings (or loss), plus (ii) interest expense for such period,
plus (iii) consolidated federal and state income tax expenses for such
period, plus (iv) depreciation and amortization of assets for such
period (if subtracted from earnings in calculating the same), plus (v)
extraordinary losses for such period, minus (vi) extraordinary gains
for such period, with all of the foregoing amounts to be calculated for
the fiscal period then ending, and the immediately preceding three
fiscal quarters (determined on a consolidated basis in accordance with
GAAP).
"Lien" shall mean any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind (including any agreement to
give any of the foregoing, any additional sale or other title retention
agreement, any lease in the nature thereof, and the filing of or
agreement to give any financing statement under the Uniform Commercial
Code of any jurisdiction).
"Loan" shall mean any loan by a Lender to any Borrower under
this Agreement, and "Loans" shall mean all Loans made by the Lenders
under this Agreement.
"Loan Documents" shall mean this Agreement, the Notes, the
Curtiss-Wright Guaranty, the Subsidiary Guarantees and the Transfer
Supplements, and all other agreements and instruments extending,
renewing, refinancing or refunding any indebtedness, obligation or
liability arising under any of the foregoing, in each case as the same
may be amended, modified or supplemented from time to time hereafter.
"London Business Day" shall mean a day for dealing in deposits
in Dollars by and among banks in the London interbank market and which
is a Business Day.
"London Office", when used in connection with the Agent, shall
mean its office located at Princess House, One Suffolk Lane, London
EC4ROAN, or at such other office or offices of the Agent or any branch,
subsidiary or affiliate thereof as may be designated in writing from
time to time by the Agent to the Borrowers.
"Long Term Commitments" shall mean the aggregate "Revolving
Credit Commitments" of the "Lenders" (each as defined in the Long Term
Credit Agreement) under the Long Term Credit Agreement.
"Long Term Credit Agreement" shall mean that certain Credit
Agreement dated the date hereof, by and among the Borrowers party
thereto, the Lenders named therein, the Issuing Banks referred to
therein and Mellon Bank, N.A. , as the Agent, as amended.
"Loss" shall have the meaning set forth in Section 6.03
hereof.
"Material Adverse Effect" shall mean (a) a material adverse
effect on the business, operations, condition (financial or otherwise)
or prospects of Curtiss-Wright and its Subsidiaries taken as a whole or
(b) a material adverse effect on the ability of Curtiss-Wright to
perform or comply with any of the terms and conditions of any Loan
Document.
"Maturity Date" shall mean the date which is one year after
the Expiration Date.
"Mellon" shall mean Mellon Bank, N.A. in its individual
capacity.
"Nonextending Lender" shall have the meaning set forth in
Section 2.14 hereof.
"Note" or "Notes" shall mean the Revolving Credit Notes of the
Borrowers executed and delivered under this Agreement, together with
all extensions, renewals, refinancings or refundings of any thereof in
whole or part.
"Notional Euro-Rate Funding Office" shall have the meaning set
forth in Section 2.13(a) hereof.
"Obligations" shall mean all indebtedness, obligations and
liabilities of any Borrower to any Lender or the Agent from time to
time arising under or in connection with or related to or evidenced by
this Agreement or any other Loan Document, and all extensions, renewals
or refinancings thereof, whether such indebtedness, obligations or
liabilities are direct or indirect, otherwise secured or unsecured,
joint or several, absolute or contingent, due or to become due, whether
for payment or performance, now existing or hereafter arising. Without
limitation of the foregoing, such indebtedness, obligations and
liabilities include the principal amount of Loans, accrued but unpaid
interest, unpaid fees, indemnities or expenses under or in connection
with this Agreement or any other Loan Document, and all extensions,
renewals and refinancings thereof, whether or not such Loans were made
in compliance with the terms and conditions of this Agreement or in
excess of the obligation of the Lenders to lend. Obligations shall
remain Obligations notwithstanding any assignment or transfer or any
subsequent assignment or transfer of any of the Obligations or any
interest therein.
"Office," when used in connection with the Agent, shall mean
its office located at One Mellon Bank Center, Pittsburgh, Pennsylvania
15258, or at such other office or offices of the Agent or any branch,
subsidiary or affiliate thereof as may be designated in writing from
time to time by the Agent to the Borrowers.
"Option" shall mean the Base Rate Option or the Euro-Rate
Option, as the case may be.
"Original Credit Agreements" shall mean that certain Credit
Agreement dated as of October 29, 1991, as amended, among
Curtiss-Wright, the Lenders party thereto, the Issuing Banks referred
to therein and the Agent, and that certain Short Term Credit Agreement
dated as of October 29, 1994, as amended, among Curtiss-Wright, the
Lenders party thereto and the Agent.
"Original Due Date" shall have the meaning set forth in
Section 6.03 hereof.
"Other Currency" shall mean Canadian Dollars, British Pounds,
Swiss Francs, Belgium Francs, French Francs, Italian Lira, German
Marks, Singapore Dollars, Dutch Guilders, Danish Krone, Euros and any
freely available currency that is freely transferable and freely
convertible into Dollars and requested by any Borrower and acceptable
to all of the Lenders and to the Agent.
"Participants" shall have the meaning set forth in Section
8.14(b) hereof.
"Permitted Liens" shall mean (a) Liens arising from taxes,
assessments, charges, levies or claims that are not yet due or that
remain payable without penalty, (b) deposits or pledges of cash to
secure workmen's compensation, unemployment insurance, old age benefits
or other social security obligations, or in connection with or to
secure the performance of bids, tenders, trade contracts or leases, or
to secure statutory obligations, or stay, surety or appeal bonds, or
other pledges or deposits of cash of like nature and all in the
ordinary course of business, (c) Liens permitted by Section 7.02(b) of
the Long Term Credit Agreement, (d) Liens in favor of each of the Agent
and the Lenders, (e) Liens to secure Indebtedness existing on the date
hereof, (f) with respect to real property located in the State of New
Jersey, impediments to marketability arising by reason of the New
Jersey Environmental Cleanup Responsibility Act, (g) easements, rights
of way and other exceptions to title which do not materially affect any
Borrower's right of enjoyment of its properties, (h) Liens in favor of
customers for amounts paid to any Borrower or any Subsidiary of any
Borrower as progress payments, (i) Liens to secure non-recourse
Indebtedness, and (j) Liens to secure Deemed Debt.
"Person" shall mean an individual, corporation, limited
liability company, partnership, trust, unincorporated association,
joint venture, joint-stock company, Governmental Authority or any other
entity.
"Portion" shall mean the Base Rate Portion or the Euro-Rate
Portion, as the case may be.
"Potential Default" shall mean any event or condition which
with notice or passage of time, or both, would constitute an Event of
Default.
"Prime Rate" as used herein, shall mean the interest rate per
annum announced from time to time by Mellon Bank, N.A. as its prime
rate, which rate may be greater or less than other interest rates
charged by Mellon Bank, N.A. to other borrowers and is not solely based
or dependent upon the interest rate which Mellon Bank, N.A. may charge
any particular borrower or class of borrowers.
"Pro Rata" shall mean from or to each Lender in proportion to
its Commitment Percentage.
"Purchasing Lender" shall have the meaning set forth in
Section 8.14(c) hereof.
"Register" shall have the meaning set forth in Section
8.14(d) hereof.
"Regular Payment Date" shall mean the last day of each
December, March, June and September after the date hereof.
"Replacement Lender" shall have the meaning set forth in
Section 2.14 hereof.
"Required Lenders" shall mean, as of any date, Lenders which
have Commitments constituting, in the aggregate, at least 51% of the
total Commitments of all the Lenders.
"Responsible Officer" shall mean the Chairman, President, any
Vice President, the Controller or the Treasurer of any Borrower.
"Revolving Credit Commitment" shall have the meaning set forth
in Section 2.01(a) hereof.
"Revolving Credit Committed Amount" shall have the meaning set
forth in Section 2.01(a) hereof.
"Revolving Credit Loans" shall have the meaning set forth in
Section 2.01(a) hereof.
"Revolving Credit Notes" shall mean the promissory notes of
the Borrowers executed and delivered under Section 2.01(c) hereof and
any promissory note issued in substitution therefor pursuant to
Sections 8.14(c) and 2.14 or any other provisions hereof, together with
all extensions, renewals, refinancings or refundings thereof in whole
or part.
"Significant Subsidiary" shall mean Curtiss-Wright Flight
Systems, Inc., Curtiss-Wright Flow Control Corporation, Metal
Improvement Company, Inc., and any other Subsidiary of Curtiss-Wright
(a) which, together with its Subsidiaries (determined on a consolidated
basis), has assets with a book value greater than or equal to 20% of
the total assets of Curtiss-Wright and its Subsidiaries (determined on
a consolidated basis) as of the end of the most recently completed
fiscal quarter for which financial information is available), or (b)
which, together with its Subsidiaries (determined on a consolidated
basis), has greater than 20% of the net revenues of Curtiss-Wright and
its Subsidiaries (determined on a consolidated basis) for the most
recent four fiscal quarters for which financial information is
available), all determined in accordance with GAAP.
"Standard Notice" shall mean an irrevocable notice provided to
the Agent on a Business Day which is
(a) provided on the same Business Day in the case of
selection of, conversion to or renewal of the Base Rate Option
or prepayment of any Base Rate Portion; and
(b) provided at least four London Business Days in
advance in the case of selection of, conversion to or renewal
of the Euro-Rate Option or prepayment of any Euro-Rate
Portion.
Standard Notice must be provided no later than 10:00 a.m., Pittsburgh
time, on the last day permitted for such notice.
"Subsidiary" of a Person means (a) any corporation more than
50% of the outstanding securities having ordinary voting power of which
shall at the time be owned or controlled, directly or indirectly, by
such Person or (b) any partnership, association, joint venture or
similar business organization more than 50% of the ownership interests
having ordinary voting power of which shall at the time be so owned or
controlled.
"Subsidiary Borrower" shall mean any of the following
Subsidiaries of Curtiss-Wright that is (a) a party to this Agreement or
(b) has executed and delivered to the Agent (i) a Revolving Credit
Note, and (ii) a joinder to this Agreement, in form and substance
satisfactory to the Agent: Curtiss-Wright Flight Systems, Inc., a
Delaware corporation; Metal Improvement Company, Inc., a Delaware
corporation; Curtiss-Wright Flow Control Corporation, a New York
corporation; Curtiss-Wright Flow Control Service Corporation, a
Delaware corporation; Curtiss-Wright Foreign Sales Corp., a Barbados
corporation; Curtiss-Wright Flight Systems Europe A/S, a Danish
corporation and Curtiss-Wright Antriebstechnik GmbH, a Swiss
corporation.
"Subsidiary Guarantors" shall mean the Subsidiary Borrowers
and Significant Subsidiaries from time to time party to the Subsidiary
Guarantees.
"Subsidiary Guarantees" shall have the meaning set forth in
Section 4.01(k) hereof.
"Taxes" shall have the meaning set forth in Section 2.12(a)
hereof.
"Transfer Effective Date" shall have the meaning set forth in
the applicable Transfer Supplement.
"Transfer Supplement" shall have the meaning set forth in
Section 8.14(c) hereof.
"US Currency" shall mean Dollars.
. Unless the context of this Agreement otherwise clearly requires, references to
the plural include the singular, the singular the plural and the part the whole;
"or" has the inclusive meaning represented by the phrase "and/or"; and
"property" includes all properties and assets of any kind or nature, tangible or
intangible, real, personal or mixed. References in this Agreement to
"determination" (and similar terms) by the Agent or by any Lender include good
faith estimates by the Agent or by any Lender (in the case of quantitative
determinations) and good faith beliefs by the Agent or by any Lender (in the
case of qualitative determinations). The words "hereof," "herein," "hereunder"
and similar terms in this Agreement refer to this Agreement as a whole and not
to any particular provision of this Agreement. The section and other headings
contained in this Agreement and the Table of Contents preceding this Agreement
are for reference purposes only and shall not control or affect the construction
of this Agreement or the interpretation thereof in any respect. Section,
subsection and exhibit references are to this Agreement unless otherwise
specified.
. 1.03. Accounting Principles
(a) As used herein, "GAAP" shall mean generally accepted
accounting principles in the United States, applied on a basis consistent with
the principles used in preparing Curtiss-Wright's consolidated financial
statements as of December 31, 1998 and for the fiscal year then ended, as
referred to in Section 4.05 hereof, together with such changes in GAAP as may be
adopted from time to time which, in the good faith judgment of the Agent, do not
have a material adverse effect on Curtiss-Wright's compliance with the covenants
contained in this Agreement.
(b) Except as otherwise provided in this Agreement, all
computations and determinations as to accounting or financial matters shall be
made, and all financial statements to be delivered pursuant to this Agreement
shall be prepared, in accordance with GAAP (including principles of
consolidation where appropriate), and all accounting or financial terms shall
have the meanings ascribed to such terms by GAAP.
(c) If and to the extent that the financial statements
generally prepared by Curtiss-Wright apply accounting principles other than
GAAP, all financial statements referred to in this Agreement or any other Loan
Document shall be delivered in duplicate, one set based on the accounting
principles then generally applied by Curtiss-Wright and one set based on GAAP.
To the extent this Agreement or such other Loan Document requires financial
statements to be accompanied by an opinion of independent accountants, each set
of financial statements shall be accompanied by such an opinion.
ARTICLE II
THE CREDITS
. 2.01. Revolving Credit Loans
(a) Revolving Credit Commitments. Subject to the terms and
conditions and relying upon the representations and warranties herein set forth,
each Lender, severally and not jointly, agrees (such agreement being herein
called such Lender's "Revolving Credit Commitment") to make loans in either US
Currency or in an Other Currency (the "Revolving Credit Loans") to one or more
Borrowers at any time or from time to time on or after the date hereof and to
but not including the Expiration Date.
A Lender shall have no obligation to make any Revolving Credit
Loan to the extent that the aggregate principal amount of such Lender's Pro Rata
share of the total Revolving Credit Loans at any time outstanding would exceed
such Lender's Revolving Credit Committed Amount at such time. Each Lender's
"Revolving Credit Committed Amount" at any time shall be equal to the amount set
forth as its "Initial Revolving Credit Committed Amount" below its name on the
signature pages hereof, as either such amount may have been reduced under
Section 2.02 hereof at such time, increased under Section 2.01(e) and subject to
transfer to another Lender as provided in Section 8.14 hereof.
(b) Nature of Credit. Within the limits of time and amount set
forth in this Section 2.01, and subject to the provisions of this Agreement, the
Borrowers may borrow, repay and reborrow Revolving Credit Loans hereunder.
(c) Revolving Credit Notes. The obligations of each Borrower
to repay the unpaid principal amount of the Revolving Credit Loans made to them
by each Lender and to pay interest thereon shall be evidenced in part by
promissory notes of each such Borrower, one to each Lender, dated the Closing
Date (the "Revolving Credit Notes") in substantially the form attached hereto as
Exhibit A, with the blanks appropriately filled, payable to the order of such
Lender in a face amount equal to such Lender's Initial Revolving Credit
Committed Amount.
(d) Maturity. To the extent not due and payable earlier, the
Revolving Credit Loans shall be due and payable on the Maturity Date.
(e) Increase in Commitments. Upon the written request of
Curtiss-Wright, if approved in writing by the Required Lenders (which must
include the Agent), the Commitments may be increased by an aggregate amount of
$25,000,000 less the amount, if any, by which the Long Term Commitments may have
been increased pursuant to Section 2.01(f) of the Long Term Credit Agreement;
provided, that no Lender's Revolving Credit Committed Amount shall be increased
without such Lender's approval. The Lenders' Revolving Credit Committed Amounts
shall be increased on a pro rata basis among the Lenders approving the increase
in Commitments. The increase in Commitments shall be subject to the Agent's
receipt, for each Lender, of substitute Notes, duly executed by each Borrower,
reflecting the amount of such Lender's Revolving Credit Committed Amount after
such increase in the Commitments.
. 2.02. Facility Fee; Reduction of the Revolving Credit
Committed Amounts
(a) Facility Fee. Curtiss-Wright shall pay to the Agent for
the account of each Lender a facility fee (the "Facility Fee") equal to the
facility fee percentage determined from the chart set forth below based on the
Leverage Ratio, as determined quarterly based upon the financial statements
delivered by Curtiss-Wright pursuant to this Agreement, with such Facility Fee
to be effective, with respect to calculations based upon the quarterly unaudited
financial statements delivered pursuant to Section 6.01(b) of the Long Term
Credit Agreement, as of the first day of the quarter immediately following the
quarter for which such financial statements are delivered:
- ---------------------- ---------------------------------
Leverage Ratio Facility Fee Percentage
- ---------------------- ---------------------------------
>2.5 0.30%
- ----------------------- ---------------------------------
>1.5 and < 2.5 0.25%
- ----------------------- ---------------------------------
< 1.5 0.15%
- ----------------------- ---------------------------------
for each day from and including the date hereof to but not including the
Expiration Date, on the amount (not less than zero) equal to such Lender's
Revolving Credit Committed Amount on such day. Such Facility Fee shall be due
and payable for the preceding period for which such fee has not been paid (x) on
each Regular Payment Date, (y) on the date of each reduction of the Revolving
Credit Committed Amounts (whether optional or mandatory) on the amount so
reduced and (z) on the Expiration Date.
(b) Reduction of the Revolving Credit Committed Amounts.
Curtiss-Wright may at any time or from time to time reduce Pro Rata the
Revolving Credit Committed Amounts of the Lenders to an aggregate amount (which
may be zero) not less than the Dollar Equivalent Amount sum of the unpaid
principal amount of the Revolving Credit Loans then outstanding plus the
principal amount of all Revolving Credit Loans not yet made as to which notice
has been given by a Borrower under Section 2.03 hereof. Any reduction of the
Revolving Credit Committed Amounts shall be in an aggregate amount which is a
minimum amount of $5,000,000 and integral multiples of $500,000 thereof.
Reduction of the Revolving Credit Committed Amounts shall be made by providing
not less than 30 days' notice (which notice shall be irrevocable) to such effect
to the Agent. After the date specified in such notice the Facility Fee shall be
calculated based upon the Revolving Credit Committed Amounts as so reduced. Upon
reduction of the Revolving Credit Committed Amounts to zero, payment in full of
all Obligations, this Agreement shall be terminated.
. Whenever a Borrower desires that the Lenders make Revolving Credit Loans, such
Borrower shall provide Standard Notice to the Agent setting forth the following
information:
(a) The currency, which shall be either US Currency or an
Other Currency, in which such Revolving Credit Loans are to be made;
(b) The party making the borrowing thereunder;
(c) The date, which shall be a Business Day, on which such
proposed Loans are to be made;
(d) The aggregate principal amount of such proposed Loans,
which shall be the sum of the principal amounts selected pursuant to clause (e)
of this Section 2.03;
(e) The interest rate Option or Options selected in accordance
with Section 2.04(a) hereof and the principal amounts selected in accordance
with Section 2.04(d) hereof of the Base Rate Portion and each Funding Segment of
the Euro-Rate Portion, as the case may be, of such proposed Loans; and
(f) With respect to each such Funding Segment of such proposed
Loans, the Funding Period to apply to such Funding Segment, selected in
accordance with Section 2.04(c) hereof.
Standard Notice having been so provided, the Agent shall promptly notify each
Lender of the information contained therein and of the amount of such Lender's
Loan. Unless any applicable condition specified in Article V hereof has not been
satisfied, on the date specified in such Standard Notice each Lender shall make
the proceeds of its Loan available to the Agent (a) with respect to a Loan
denominated in US Currency, at the Agent's Office, no later than 12:00 o'clock
Noon, Pittsburgh time, in funds immediately available at such Office, and (b)
with respect to a Loan denominated in an Other Currency, at the Agent's London
Office, no later than 12:00 o'clock Noon, London time, in funds immediately
available at such London Office. The Agent will make the funds so received
available to the applicable Borrower in funds immediately available at the
Agent's Office or London Office, as the case may be.
. 2.04. Interest Rates
(a) Optional Bases of Borrowing. The unpaid principal amount
of the Loans shall bear interest for each day until due on one or more bases
selected by the applicable Borrower from among the interest rate Options set
forth below. Subject to the provisions of this Agreement the Borrowers may
select different options to apply simultaneously to different Portions of the
Loans and may select different Funding Segments to apply simultaneously to
different parts of the Euro-Rate Portion of the Loans. The aggregate number of
Funding Segments applicable to the Euro-Rate Portion of the Revolving Credit
Loans at any time shall not exceed ten without the approval of the Agent.
(i) Base Rate Option: A rate per annum (computed on the basis
of a year of 365 or 366 days, as the case may be, and actual days
elapsed) for each day equal to the Base Rate for such day. The "Base
Rate" for any day shall mean the greater of (A) the Prime Rate for such
day or (B) 0.50% plus the Federal Funds Effective Rate for such day,
such interest rate to change automatically from time to time effective
as of the effective date of each change in the Prime Rate or the
Federal Funds Effective Rate.
(ii) Euro-Rate Option: A rate per annum (based on a year of
360 days and actual days elapsed) for each day equal to the Euro-Rate
for such day plus the Applicable Margin for such day. "Euro-Rate" for
any day, as used herein, shall mean for each Funding Segment of the
Euro-Rate Portion corresponding to a proposed or existing Euro-Rate
Funding Period the rate per annum determined by the Agent by dividing
(the resulting quotient to be rounded upward to the nearest 1/100 of
1%) (A) the rate of interest (which shall be the same for each day in
such Euro-Rate Funding Period) determined in good faith by the Agent in
accordance with its usual procedures (which determination shall be
conclusive absent manifest error) to be the average of the rates per
annum for deposits in US Currency or any Other Currency, as applicable,
offered to major money center banks in the London interbank market at
approximately 11:00 a.m., London time, two London Business Days prior
to the first day of such Euro-Rate Funding Period for delivery on the
first day of such Euro-Rate Funding Period in amounts comparable to
such Funding Segment and having maturities comparable to such Euro-Rate
Funding Period by (B) a number equal to
1.00 minus the Euro-Rate Reserve Percentage.
The "Euro-Rate" may also be expressed by the following formula:
[average of the rates offered to major money ]
[center banks in the London interbank market ]
Euro-Rate = [determined by the Agent per subsection (A) ] ]
[1.00 - Euro-Rate Reserve Percentage ]
"Euro-Rate Reserve Percentage" for any day shall mean the
percentage (expressed as a decimal, rounded upward to the nearest 1/100
of 1%), as determined in good faith by the Agent (which determination
shall be conclusive absent manifest error), which is in effect on such
day as prescribed by the Board of Governors of the Federal Reserve
System (or any successor) representing the maximum reserve requirement
(including, without limitation, supplemental, marginal and emergency
reserve requirements) with respect to eurocurrency funding (currently
referred to as "Eurocurrency liabilities") of a member bank in such
System. The Euro-Rate shall be adjusted automatically as of the
effective date of each change in the Euro-Rate Reserve Percentage. The
Euro-Rate Option shall be calculated in accordance with the foregoing
whether or not any Lender is actually required to hold reserves in
connection with its eurocurrency funding or, if required to hold such
reserves, is required to hold reserves at the "Euro-Rate Reserve
Percentage" as herein defined.
The Agent shall give prompt notice to the applicable
Borrower and to the Lenders of the Euro-Rate determined or adjusted in
accordance with the definition of the Euro-Rate, which determination or
adjustment shall be conclusive absent manifest error.
(b) Applicable Margin. The "Applicable Margin" for the
Euro-Rate Option for any day shall be determined by reference to the Leverage
Ratio as determined on such day and shall mean the applicable percentage set
forth below:
- ------------------- ---------------------------
Leverage Ratio Applicable Margin
- ------------------- ---------------------------
> 2.5 1.50%
- ------------------- ---------------------------
> 2.0 and <= 2.5 1.25%
- ------------------- ---------------------------
> 1.5 and <= 2.0 1.00%
- ------------------- ---------------------------
<= 1.5 0.85%
- ------------------- ---------------------------
(c) Funding Periods. At any time when a Borrower shall select,
convert to or renew the Euro-Rate Option to apply to any part of the Loans, the
applicable Borrower shall specify one of the following periods (the "Funding
Periods") during which the Euro-Rate Option shall apply: One, two, three or six
months; provided, that:
(i) Each Funding Period shall begin on a London Business Day,
and the term "month", when used in connection with a Funding Period,
shall be construed in accordance with prevailing practices in the
interbank eurodollar market at the commencement of such Funding Period,
as determined in good faith by the Agent (which determination shall be
conclusive);
(ii) A Borrower may not select a Funding Period that would end
after the Expiration Date; and
(iii) A Borrower shall, in selecting any Funding Period, allow
for scheduled mandatory payments and foreseeable mandatory prepayments
of the Loans.
(d) Transactional Amounts. Every selection of, conversion
from, conversion to or renewal of an interest rate Option and every payment or
prepayment of any Loans shall be in a principal amount such that after giving
effect thereto the aggregate principal amount of the Base Rate Portion of the
Revolving Credit Loans, or the aggregate principal amount of each Funding
Segment of the Euro-Rate Portion of the Revolving Credit Loans, shall be as set
forth below:
- ------------------------------- --------------------------------------
Portion or Funding Segment Allowable Aggregate Principal Amounts
- ------------------------------- --------------------------------------
Base Rate Portion an integral multiple of 500,000 of US
Currency or the Other Currency
denominated by the Borrower
- ------------------------------- --------------------------------------
Each Funding Segment of the an integral multiple of 1,000,000 of US
Euro-Rate Portion Currency or the Other Currency
denominated by the Borrower
- ------------------------------- ---------------------------------------
(e) Euro-Rate Unascertainable; Impracticability. If
(i) on any date on which a Euro-Rate would otherwise be set
the Agent (in the case of clauses (A) or (B) below) or any Lender (in
the case of clause (C) below) shall have determined in good faith
(which determination shall be conclusive absent manifest error) that:
(A) adequate and reasonable means do not exist
for ascertaining such Euro-Rate,
(B) a contingency has occurred which materially and
adversely affects the secondary market for the interbank
eurodollar market, or
(C) the effective cost to such Lender of funding a
proposed Funding Segment of the Euro-Rate Portion from a
Corresponding Source of Funds shall exceed the Euro-Rate,
applicable to such Funding Segment, or
(ii) at any time any Lender shall have determined in good
faith (which determination shall be conclusive absent manifest error)
that the making, maintenance or funding of any part of the Euro-Rate
Portion has been made impracticable or unlawful by compliance by such
Lender or a Notional Euro-Rate Funding Office in good faith with any
Law or guideline or interpretation or administration thereof by any
Governmental Authority charged with the interpretation or
administration thereof or with any request or directive of any such
Governmental Authority (whether or not having the force of law);
then, and in any such event, the Agent or such Lender, as the case may be, may
notify the Borrowers of such determination (and any Lender giving such notice
shall notify the Agent). Upon such date as shall be specified in such notice
(which shall not be earlier than the date such notice is given), the obligation
of each of the Lenders to allow the Borrowers to select, convert to or renew the
Euro-Rate Option, shall be suspended until the Agent or such Lender, as the case
may be, shall have later notified the Borrowers (and any Lender giving such
notice shall notify the Agent) of the Agent's or such Lender's determination in
good faith (which determination shall be conclusive absent manifest error) that
the circumstance giving rise to such previous determination no longer exist.
If any Lender notifies a Borrower of a determination under
subsection (ii) of this Section 2.04(e), the Euro-Rate Portion of the Loans of
such Lender (the "Affected Lender") shall automatically be converted to the Base
Rate Option as of the date specified in such notice (and accrued interest
thereon shall be due and payable on such date).
If at the time the Agent or a Lender makes a determination
under subsection (i) or (ii) of this Section 2.04(e) a Borrower previously has
notified the Agent that it wishes to select, convert to or renew the Euro-Rate
Option, with respect to any proposed Loans but such Loans have not yet been
made, such notification shall be deemed to provide for selection of, conversion
to or renewal of the Base Rate Option instead of the Euro-Rate Option with
respect to such Loans or, in the case of a determination by a Lender, such Loans
of such Lender.
(f) Availability of Funds. If at any time any Lender cannot
access funds through traditional sources, as determined by such Lender in good
faith (which determination shall be conclusive absent manifest error), and it is
necessary for such Lender to access funding through the Federal Reserve System's
Century Date Change Special Liquidity Facility Program (the "Alternative
Funds"), then the interest rate applicable to such Lender's Pro Rata share of
the Loans made with such Alternative Funds shall be equal to (i) the Federal
Funds Effective Rate then in effect, plus (ii) 1.50%, plus (iii) the Applicable
Margin determined by reference to the Leverage Ratio on such date.
. 2.05. Conversion or Renewal of Interest Rate Options
(a) Conversion or Renewal. Subject to the provisions of
Sections 2.09(c) and 2.10(b) hereof, unless an Event of Default shall have
occurred and be continuing, any Borrower may convert any part of its Loans from
any interest rate Option or Options to one or more different interest rate
Options and may renew the Euro-Rate Option as to any Funding Segment of the
Euro-Rate Portion:
(i) At any time with respect to conversion from the Base
Rate Option; or
(ii) At the expiration of any Funding Period with respect to
conversions from or renewals of the Euro-Rate Option, as to the Funding
Segment corresponding to such expiring Funding Period.
Whenever a Borrower desires to convert or renew any interest rate Option or
Options, such Borrower shall provide to the Agent Standard Notice setting forth
the following information:
(w) The date, which shall be a Business Day, on which the
proposed conversion or renewal is to be made;
(x) The principal amounts selected in accordance with Section
2.04(d) hereof of the Base Rate Portion and each Funding Segment of the
Euro-Rate Portion to be converted from or renewed;
(y) The interest rate Option or Options selected in accordance
with Section 2.04(a) hereof and the principal amounts selected in
accordance with Section 2.04(d) hereof of the Base Rate Portion and
each Funding Segment of the Euro-Rate Portion to be converted; and
(z) With respect to each Funding Segment to be converted to or
renewed, the Funding Period selected in accordance with Section 2.04(c)
hereof to apply to such Funding Segment.
Standard Notice having been so provided, after the date specified in such
Standard Notice, interest shall be calculated upon the principal amount of the
Loans as so converted or renewed. Interest on the principal amount of any part
of the Loans converted or renewed (automatically or otherwise) shall be due and
payable on the conversion or renewal date.
(b) Failure to Convert or Renew. Absent due notice from any
Borrower of conversion or renewal in the circumstances described in Section
2.05(a)(ii) hereof, any part of the Euro-Rate Portion for which such notice is
not received shall be converted automatically to the Base Rate Option on the
last day of the expiring Funding Period; provided, however, that if any
Euro-Rate Portion is in an Other Currency, such portion shall be renewed
automatically for one month on the last day of the expiring Funding Period.
. Whenever a Borrower desires or is required to prepay any part of its Loans, it
shall provide Standard Notice to the Agent setting forth the following
information:
(a) The currency, which shall be either US Currency or an
Other Currency, in which such prepayment is to be made;
(b) The date, which shall be a Business Day, on which the
proposed prepayment is to be made;
(c) The total principal amount of such prepayment, which shall
be the sum of the principal amounts selected pursuant to clause (d) of this
Section 2.06; and
(d) The principal amounts selected in accordance with Section
2.04(d) hereof of the Base Rate Portion and each part of each Funding Segment of
the Euro-Rate Portion to be prepaid.
Standard Notice having been so provided, on the date specified in such Standard
Notice, the principal amounts of the Base Rate Portion and each Funding Segment
of the Euro-Rate Portion specified in such notice, together with interest on
each such principal amount to such date, shall be due and payable.
. The Borrowers shall have the right at their option from time to time to prepay
their Loans in whole or part without premium or penalty (subject, however, to
Section 2.10(b) hereof):
(a) At any time with respect to any part of the Base Rate
Portion; or
(b) At the expiration of any Funding Period with respect to
prepayment of the Euro-Rate Portion with respect to any part of the Funding
Segment corresponding to such expiring Funding Period.
Any such prepayment shall be made in accordance with Section 2.06 hereof.
. Interest on the Base Rate Portion shall be due and payable in arrears on the
last day of each month. Interest on each Funding Segment of the Euro-Rate
Portion shall be due and payable on the last day of the corresponding Euro-Rate
Funding Period and, if such Euro-Rate Funding Period is longer than three
months, on each Regular Payment Date. After maturity of any part of the Loans
(by acceleration or otherwise), interest on such part of the Loans shall be due
and payable on demand.
. 2.09. Pro Rata Treatment; Payments Generally
(a) Pro Rata Treatment. Each borrowing and conversion and
renewal of interest rate Options hereunder shall be made, and all payments made
in respect of principal, interest and Facility Fees due from Curtiss-Wright
hereunder or under the Notes shall be applied, Pro Rata from and to each Lender,
except for payments of interest involving an Affected Lender as provided in
Section 2.04(e) hereof and payments to a Lender under Sections 2.10 or 2.12
hereof. The failure of any Lender to make a Loan shall not relieve any other
Lender of its obligation to lend hereunder, but neither the Agent nor any Lender
shall be responsible for the failure of any other Lender to make a Loan.
(b) Payments Generally. The parties agree that (i) all
payments and prepayments of principal, interest and other amounts in connection
with Loans denominated in US Currency and all fees shall be made in US Currency
and (ii) all payments of principal, interest and other amounts (other than fees)
in connection with Revolving Credit Loans denominated in any Other Currency
shall be made in such Other Currency. All payments and prepayments to be made in
respect of principal, interest, fees or other amounts due from the Borrowers in
US Currency shall be payable by 12:00 o'clock noon, Pittsburgh time, on the day
when due without presentment, demand, protest or notice of any kind, all of
which are hereby expressly waived, and an action therefor shall immediately
accrue. Except for payments under Sections 2.10 and 8.06, such payments shall be
made to the Agent at its Office in US Currency in funds immediately available at
such Office without setoff, counterclaim or other deduction of any nature. All
payments and prepayments to be made in respect of principal, interest, fees or
other amounts due from the Borrowers in any Other Currency shall be payable by
12:00 o'clock noon, London time, on the day when due without presentment,
demand, protest or notice of any kind, all of which are hereby expressly waived,
and an action therefor shall immediately accrue. Except for payments under
Sections 2.10 and 8.06, such payments shall be made to the Agent at its London
Office in such Other Currency in funds immediately available at such Office
without setoff, counterclaim or other deduction of any nature. Any payment or
prepayment received (i) in US Currency by the Agent or such Lender after 12:00
o'clock Noon, Pittsburgh time, on any day shall be deemed to have been received
on the next succeeding Business Day and (ii) in any Other Currency by the Agent
or such Lender after 12:00 o'clock noon, London time, on any day shall be deemed
to have been received on the next succeeding London Business Day. The Agent
shall distribute to the Lenders all such payments received by it from the
Borrowers as promptly as practicable after receipt by the Agent.
(c) Default Interest. To the extent permitted by law, from and
after the date on which an Event of Default shall have occurred hereunder, and
so long as such Event of Default continues to exist, principal, interest, fees,
indemnity, expenses or any other amounts due from the Borrowers hereunder or
under any other Loan Document, shall bear interest for each day (before and
after judgment), payable on demand, at a rate per annum (in each case based on a
year of 360 days and actual days elapsed) which for each day shall be equal to
the following:
(i) In the case of any part of Euro-Rate Portion of any Loans,
(A) until the end of the applicable then-current Funding Period at a
rate per annum 2% above the rate otherwise applicable to such part, and
(B) thereafter in accordance with the following clause (ii); and
(ii) In the case of any other amount due from the Borrowers
hereunder or under any Loan Document, 2% above the then-current Base
Rate Option.
To the extent permitted by law, interest accrued under this Section 2.09 on any
amount shall compound on a day-by-day basis, and hence shall be added daily to
the overdue amount to which such interest relates.
<PAGE>
. 2.10. Additional Compensation in Certain Circumstances
(a) Increased Costs or Reduced Return Resulting From Taxes,
Reserves, Capital Adequacy Requirements, Expenses, Etc. If any Law or guideline
or interpretation or application thereof by any Governmental Authority charged
with the interpretation or administration thereof or compliance with any request
or directive of any Governmental Authority (whether or not having the force of
law) now existing or hereafter adopted:
(i) subjects any Lender or any Notional Euro-Rate Funding
Office to any tax or changes the basis of taxation with respect to this
Agreement, the Notes, the Loans or payments by the Borrowers of
principal, interest, commitment fees or other amounts due from the
Borrowers hereunder or under the Notes (except for taxes on the overall
net income or overall gross receipts of such Lender or such Notional
Euro-Rate Funding Office imposed by the jurisdictions (federal, state
and local) in which the Lender's principal office or Notional Euro-Rate
Funding Office is located),
(ii) imposes, modifies or deems applicable any reserve,
special deposit or similar requirement against credits or commitments
to extend credit extended by, assets (funded or contingent) of,
deposits with or for the account of, other acquisitions of funds by,
such Lender or any Notional Euro-Rate Funding Office (other than
requirements expressly included herein in the determination of the
Euro-Rate hereunder),
(iii) imposes, modifies or deems applicable any capital
adequacy or similar requirement (A) against assets (funded or
contingent) of, or credits or commitments to extend credit extended by,
any Lender or any Notional Euro-Rate Funding Office, or (B) otherwise
applicable to the obligations of any Lender or any Notional Euro-Rate
Funding Office under this Agreement, or
(iv) imposes upon any Lender or any Notional Euro-Rate Funding
Office any other condition or expense with respect to this Agreement,
the Notes or its making, maintenance or funding of any Loan or any
security therefor,
and the result of any of the foregoing is to increase the cost to, reduce the
income receivable by, or impose any expense (including loss of margin) upon any
Lender, any Notional Euro-Rate Funding Office or, in the case of clause (iii)
hereof, any Person controlling a Lender, with respect to this Agreement, the
Notes or the making, maintenance or funding of any Loan (or, in the case of any
capital adequacy or similar requirement, to have the effect of reducing the rate
of return on such Lender's or controlling Person's capital, taking into
consideration such Lender's or controlling Person's policies with respect to
capital adequacy) by an amount which such Lender deems in good faith to be
material (such Lender being deemed for this purpose to have made, maintained or
funded each Funding Segment of the Euro-Rate Portion from a Corresponding Source
of Funds), such Lender may from time to time notify the Borrowers of the amount
determined in good faith (using any averaging and attribution methods) by such
Lender (which determination shall be conclusive) to be necessary to compensate
such Lender or such Notional Euro-Rate Funding Office for such increase,
reduction or imposition. Such amount shall be due and payable by the Borrowers
to such Lender five Business Days after such notice is given, together with an
amount equal to interest on such amount from the date two Business Days after
the date demanded until such due date at the Base Rate Option. A certificate by
such Lender as to the amount due and payable under this Section 2.10(a) from
time to time and the method of calculating such amount shall be conclusive
absent manifest error.
(b) Funding Breakage. In addition to all other amounts payable
hereunder, if and to the extent for any reason any part of any Funding Segment
of any Euro-Rate Portion of the Loans becomes due (by acceleration or
otherwise), or is paid, prepaid or converted to another interest rate Option
(whether or not such payment, prepayment or conversion is mandatory or automatic
and whether or not such payment or prepayment is then due), on a day other than
the last day of the corresponding Funding Period (the date such amount so
becomes due, or is so paid, prepaid or converted, being referred to as the
"Funding Breakage Date"), the Borrowers shall pay each Lender an amount
("Funding Breakage Indemnity") determined by such Lender as follows:
(i) first, calculate the following amount: (A) the principal
amount of such Funding Segment of the Loans owing to such Lender which
so became due, or which was so paid, prepaid or converted, times (B)
the greater of (x) zero or (y) the rate of interest applicable to such
principal amount on the Funding Breakage Date minus the Applicable
Funding Rate as of the Funding Breakage Date, times (C) the number of
days from and including the Funding Breakage Date to but not including
the last day of such Funding Period, times (D) 1/360;
(ii) the Funding Breakage Indemnity to be paid by the
Borrowers to such Lender shall be the amount equal to the present value
as of the Funding Breakage Date (discounted at the Applicable Funding
Rate as of such Funding Breakage Date, and calculated on the basis of a
year of 365 or 366 days, as the case may be, and actual days elapsed)
of the amount described in the preceding clause (i) (which amount
described in the preceding clause (i) is assumed for purposes of such
present value calculation to be payable on the last day of the
corresponding Funding Period).
For purposes of this Section, the term "Applicable Funding
Rate" shall mean (i) in the case of any calculation of a Funding Breakage
Indemnity payment with respect to a particular Funding Segment for which the
corresponding Funding Period was originally one year or longer, the Federal
Funds Effective Rate, and (ii) in the case of any calculation of a Funding
Breakage Indemnity payment with respect to a Funding Segment for which the
corresponding Funding Period was originally less than one year, the Euro-Rate.
Such Funding Breakage Indemnity shall be due and payable on
demand, and each Lender shall, upon making such demand, notify the Agent of the
amount so demanded. In addition, the Borrowers shall, on the due date for
payment of any Funding Breakage Indemnity, pay to such Lender an additional
amount equal to interest on such Funding Breakage Indemnity from the Funding
Breakage Date to but not including such due date at the Base Rate Option
applicable to the Loans (calculated on the basis of a year of 360 days and
actual days elapsed).
The amount payable to each Lender under this Section 2.10(b)
shall be determined in good faith by such Lender, and such determination shall
be conclusive absent manifest error.
. In the event that after the date hereof the Loans hereunder are classified as
a "highly leveraged transaction" (an "HLT Classification") by any Governmental
Authority having jurisdiction over any Lender, such Lender may in its discretion
from time to time so notify the Agent, and upon receiving such notice the Agent
shall promptly give notice of such event to the Borrowers and the Lenders. In
such event the parties hereto shall commence negotiations to agree on revised
Facility Fees, interest rates and Applicable Margins hereunder. If the parties
hereto fail to agree on such matters in their respective absolute discretion
within 60 days of the notice given by the Agent referred to above, then the
Required Lenders may at any time or from time to time thereafter direct the
Agent to (a) by ten Business Days' notice to the Borrowers, terminate the
Revolving Credit Commitments, and the Revolving Credit Commitments shall
thereupon terminate, or (b) by ten Business Days' notice to the Borrowers,
declare the Obligations, together with (without duplication) accrued interest
thereon, to be, and the Obligations shall thereupon become, immediately due and
payable without presentment, demand, protest or other notice of any kind, all of
which are hereby waived, and an action therefor shall immediately accrue. The
Lenders acknowledge that an HLT Classification is not an Event of Default or
Potential Default hereunder.
. 2.12. Taxes
(a) Payments Net of Taxes. All payments made by the Borrowers
under this Agreement or any other Loan Document shall be made free and clear of,
and without reduction or withholding, unless required by Law, for or on account
of, any present or future income, stamp or other taxes, levies, imposts, duties,
charges, fees, deductions or withholdings, now or hereafter imposed, levied,
collected, withheld or assessed by any Governmental Authority, and all
liabilities with respect thereto, excluding
(i) in the case of the Agent and each Lender, income or
franchise taxes imposed on the Agent or such Lender by the jurisdiction
under the laws of which the Agent or such Lender is organized or any
political subdivision or taxing authority thereof or therein or as a
result of a connection between such Lender and any jurisdiction other
than a connection resulting solely from this Agreement and the
transactions contemplated hereby, and
(ii) in the case of each Lender, income or franchise taxes
imposed by any jurisdiction in which such Lender's lending offices
which make or book Loans are located or any political subdivision or
taxing authority thereof or therein
(all such non-excluded taxes, levies, imposts, deductions, charges or
withholdings being hereinafter called "Taxes"). If any Taxes are required to be
withheld or deducted from any amounts payable to the Agent or any Lender under
this Agreement or any other Loan Document, the Borrowers shall pay the relevant
amount of such Taxes and the amounts so payable to the Agent or such Lender
shall be increased to the extent necessary to yield to the Agent or such Lender
(after payment of all Taxes) interest or any such other amounts payable
hereunder at the rates or in the amounts specified in this Agreement and the
other Loan Documents. Whenever any Taxes are paid by the Borrowers with respect
to payments made in connection with this Agreement or any other Loan Document,
as promptly as possible thereafter, the Borrowers shall send to the Agent for
its own account or for the account of such Lender, as the case may be, a
certified copy of an original official receipt received by the Borrowers showing
payment thereof.
(b) Indemnity. The Borrowers hereby indemnify the Agent and
each of the Lenders for the full amount of such Taxes and any present or future
claims, liabilities or losses with respect to or resulting from any omission to
pay or delay in paying such Taxes (including any incremental Taxes, interest or
penalties that may become payable by the Agent or such Lender as a result of any
failure to pay such Taxes but excluding any claims, liabilities or losses with
respect to or arising from omissions to pay or delays in payment attributable to
the act or omission of the Agent or any Lender), whether or not such Taxes were
correctly or legally asserted. Such indemnification shall be made within 30 days
from the date such Lender or the Agent, as the case may be, makes written demand
therefor.
(c) Withholding and Backup Withholding. Each Lender that is
incorporated or organized under the laws of any jurisdiction other than the
United States or any state thereof agrees that, on or prior to the date any
payment is due to be made to it hereunder or under any other Loan Document, it
will furnish to the Borrowers and the Agent
(i) two valid, duly completed copies of United States Internal
Revenue Service Form 4224 or United States Internal Revenue
Form 1001 or successor applicable form, as the case may be,
certifying in each case that such Lender is entitled to
receive payments under this Agreement and the other Loan
Documents without deduction or withholding of any United
States federal income taxes and
(ii) a valid, duly completed Internal Revenue Service Form W-8 or
W-9 or successor applicable form, as the case may be, to
establish an exemption from United States backup withholding
tax.
Each Lender which so delivers to the Borrowers and the Agent a Form 1001 or 4224
and Form W-8 or W-9, or successor applicable forms agrees to deliver to the
Borrowers and the Agent two further copies of the said Form 1001 or 4224 and
Form W-8 or W-9, or successor applicable forms, or other manner of
certification, as the case may be, on or before the date that any such form
expires or becomes obsolete or otherwise is required to be resubmitted as a
condition to obtaining an exemption from withholding tax, or after the
occurrence of any event requiring a change in the most recent form previously
delivered by it, and such extensions or renewals thereof as may reasonably be
requested by the Borrowers and the Agent, certifying in the case of a Form 1001
or Form 4224 that such Lender is entitled to receive payments under this
Agreement or any other Loan Document without deduction or withholding of any
United States federal income taxes, unless in any such cases an event (including
any changes in Law) has occurred prior to the date on which any such delivery
would otherwise be required which renders all such forms inapplicable or which
would prevent such Lender from duly completing and delivering any such letter or
form with respect to it and such Lender advises the Borrowers and the Agent that
it is not capable of receiving payments without any deduction or withholding of
United States federal income tax, and in the case of a Form W-8 or W-9,
establishing an exemption from United States backup withholding tax.
. 2.13. Funding by Branch, Subsidiary or Affiliate
(a) Notional Funding. Each Lender shall have the right from
time to time, prospectively or retrospectively, without notice to the Borrowers,
to deem any branch, subsidiary or affiliate of such Lender to have made,
maintained or funded any part of the Euro-Rate Portion at any time. Any branch,
subsidiary or affiliate so deemed shall be known as a "Notional Euro-Rate
Funding Office". Such Lender shall deem any part of the Euro-Rate Portion of the
Loans or the funding therefor to have been transferred to a different Notional
Euro-Rate Funding Office if such transfer would avoid or cure an event or
condition described in Section 2.04(e)(ii) hereof or would lessen compensation
payable by the Borrowers under Section 2.10(a) hereof, or if such Lender
determines in its sole discretion that such transfer would be practicable and
would not have a Material Adverse Effect on such part of the Loans, such Lender
or any Notional Euro-Rate Funding office (it being assumed for purposes of such
determination that each part of the Euro-Rate Portion is actually made or
maintained by or funded through the corresponding Notional Euro-Rate Funding
Office). Notional Euro-Rate Funding Offices may be selected by such Lender
without regard to such Lender's actual methods of making, maintaining or funding
Loans or any sources of funding actually used by or available to such Lender.
(b) Actual Funding. Each Lender shall have the right from time
to time to make or maintain any part of the Euro-Rate Portion by arranging for a
branch, subsidiary or affiliate of such Lender to make or maintain such part of
the Euro-Rate Portion. Such Lender shall have the right to (i) hold any
applicable Note payable to its order for the benefit and account of such branch,
subsidiary or affiliate or (ii) request the Borrowers to issue one or more
substitute promissory notes in the principal amount of such Euro-Rate Portion,
in substantially the form attached hereto as Exhibit A, with the blanks
appropriately filled, payable to such branch, subsidiary or affiliate and with
appropriate changes reflecting that the holder thereof is not obligated to make
any additional Loans to the Borrowers; provided, that if a Lender requests the
Borrowers to issue one or more substitute promissory notes in accordance with
clause (ii) above, the amount of the Note payable to such Lender shall
automatically be reduced accordingly. The Borrowers agree to comply promptly
with any request under subsection (ii) of this Section 2.13(b). If any Lender
causes a branch, subsidiary or affiliate to make or maintain any part of the
Euro-Rate Portion hereunder, all terms and conditions of this Agreement shall,
except where the context clearly requires otherwise, be applicable to such part
of the Euro-Rate Portion and to any note payable to the order of such branch,
subsidiary or affiliate to the same extent as if such part of the Euro-Rate
Portion were made or maintained and such note were a Revolving Credit Note
payable to such Lender's order.
(a) The Revolving Credit Commitment of the Lenders shall expire and shall be
automatically reduced to zero on the Expiration Date. Not later than 60 days and
not sooner than 90 days immediately preceding the Expiration Date then in
effect, if Curtiss-Wright wishes the Lenders to extend the Expiration Date to
the date which is 364 days after the then effective Expiration Date (or, if such
date is not a Business Day, the next preceding Business Day), Curtiss-Wright
shall so advise the Agent in writing (an "Extension Request"). The Agent shall
thereupon promptly notify each of the Lenders of such Extension Request of
Curtiss-Wright. Within 20 days of its receipt of such Extension Request from
Curtiss-Wright, the Agent shall notify Curtiss-Wright as to whether the Lenders
have agreed so to extend the Expiration Date and, if so, as to any additional or
different terms on which such extension is conditioned (the determination of the
Lenders as to whether to agree to such extension and upon what terms being in
the sole, absolute and unconditional discretion of each Lender). If such notice
contains any such additional or different terms, Curtiss-Wright shall advise the
Agent in writing within 5 days next following receipt of such notice from the
Agent as to whether Curtiss-Wright agrees to such terms. If Curtiss-Wright
notifies the Agent that it so agrees, or if the Agent's notice that the Lenders
have agreed to extend the Expiration Date contains no such additional or
different terms, the Expiration Date shall automatically be extended to the date
which is 364 days after the then effective Expiration Date (or, if such date is
not a Business Day, the next preceding Business Day). If the Agent fails to
notify Curtiss-Wright within 20 days of the Agent's receipt of any Extension
Request from Curtiss-Wright as specified above as to whether the Lenders have
agreed to such Extension Request, the Lenders shall be deemed not to have agreed
to such Extension Request.
(b) If (i) any Lender notifies the Agent in writing that it
will not consent to such Extension Request or (ii) all of the Lenders have not
in writing expressly consented to any such Extension Request as provided in the
preceding paragraph, then the Agent shall so notify Curtiss-Wright and
Curtiss-Wright, at its option, may (x) withdraw the Extension Request, or (y)
replace each Lender which has not agreed to such Extension Request (a
"Nonextending Lender") with another commercial lending institution reasonably
satisfactory to the Agent (a "Replacement Lender") by giving notice of the name
of such Replacement Lender to the Agent. Unless the Agent shall object to the
identity of such proposed Replacement Lender prior to the date 5 days prior to
the then current Expiration Date, upon notice from the Agent, each Nonextending
Lender shall promptly (but in no event later than the then current Expiration
Date) assign all of its interests hereunder to such Replacement Lender in
accordance with the provisions of Section 8.14(c) hereof. If, immediately prior
to the Expiration Date some, but not all, of the Lenders have agreed to such
Extension Request, and each Nonextending Lender has not been replaced by
Curtiss-Wright in accordance with the terms of this Section 2.14(b), the
Expiration Date shall be extended in accordance with such Extension Request;
provided, however, that on the original Expiration Date (as such date may have
been previously extended), the total Revolving Credit Commitment shall be
irrevocably reduced by an amount equal to the Commitment of each Nonextending
Lender. If all Lenders consent to any such Extension Request (or, if any
Nonextending Lenders are replaced in accordance with this Section), then as of
5:00 p.m. New York time on the then current Expiration Date, such Expiration
Date shall be deemed to have been extended for the period requested by
Curtiss-Wright in the related Extension Request
<PAGE>
. 2.15. Multicurrency Payments
(a) Dollar Equivalent Amounts.
(i) Calculation of Dollar Equivalent Amounts. Upon each making
and upon each payment of a Revolving Credit Loan denominated in an
Other Currency, the Agent shall calculate the Dollar Equivalent Amount
of such Revolving Credit Loan, as the case may be, and shall provide
written confirmation to the Lenders.
(ii) Recalculation of Dollar Equivalent Amounts. In
determining the Dollar Equivalent Amount of the aggregate Revolving
Credit Loans of the Lenders, the Agent may use the respective Dollar
Equivalent Amounts for the Revolving Credit Loans pursuant to paragraph
(i) of this subsection (a), unless such Dollar Equivalent Amount so
calculated exceeds 90% of the Revolving Credit Commitment Amount, in
which case the Agent shall recalculate the Dollar Equivalent Amount of
the Revolving Credit Loans outstanding no less frequently than once
each week. The Agent may recalculate the Dollar Equivalent Amounts of
each of the Revolving Credit Loans as frequently as it determines to do
so in its discretion, PROVIDED, that such recalculation shall be made
for all of the Revolving Credit Loans no less frequently than once each
week during any period when the aggregate Dollar Equivalent Amount of
the aggregate Credit Exposure of the Lenders exceeds 90% of the
Revolving Credit Commitment Amount.
(b) Unavailability.
(i) General. Subject to paragraph (ii) of this
subsection (b), if, in the reasonable judgment of the Agent, any Other
Currency ceases to be available and freely tradable in the London
foreign exchange market, such Other Currency shall cease to be an Other
Currency. The Agent shall give prompt notice to the Borrowers and the
Lenders of such event. In the event that (A) the Agent has determined
that an Other Currency has ceased to be available and freely tradable
in the London foreign exchange market and (B) the Agent has determined
in good faith that such Other Currency is not otherwise available to
the Borrowers, then, on the date any Revolving Credit Loan denominated
in such Other Currency would become due under the terms of this
Agreement (other than as a result of an optional prepayment under
Section 2.07 or of the acceleration of such Revolving Credit Loans
under Section 8.02), the Borrowers shall repay such Revolving Credit
Loans by paying to each Lender an amount in Dollars equal to the amount
determined in good faith by such Lender (which determination shall be
conclusive absent manifest error) necessary to compensate such Lender
for the principal of and accrued interest on such Revolving Credit
Loans and any additional cost, expense or loss incurred by such Lender
as a result of such Revolving Credit Loans being repaid in Dollars
(rather than in the denominated Other Currency).
ARTICLE III
REPRESENTATIONS AND WARRANTIES
. The representations and warranties contained in the Long Term Credit Agreement
and the defined terms used therein are incorporated herein by reference as if
set forth in full. The Borrowers hereby represent and warrant to the Agent and
each Lender that such representations and warranties of the Borrowers contained
therein are true and correct.
ARTICLE IV
CONDITIONS OF LENDING
. The obligation of each Lender to make Loans on the Closing Date is subject to
the satisfaction, immediately prior to or concurrently with the making of such
Loan of the following conditions precedent, in addition to the conditions
precedent set forth in Section 4.02 hereof:
(a) Agreement; Notes. The Agent shall have received an
executed counterpart of this Agreement for each Lender, duly executed by each
Borrower, and an executed Revolving Credit Note for each Lender, conforming to
the requirements hereof, duly executed on behalf of each Borrower.
(b) Opinion of Counsel. There shall have been delivered to the
Agent an opinion of counsel of each Borrower, dated the Closing Date in
substantially the form attached hereto as Exhibit B.
(c) No Default. On the Closing Date, no Potential Default or
Event of Default shall have occurred or be continuing.
(d) Representations and Warranties. On the Closing Date, all
representations and warranties of each Borrower contained herein or otherwise
made in writing in connection herewith shall be true and correct with the same
force and effect as though such representations and warranties had been made on
and as of such time.
(e) Corporate Proceedings. The Agent shall have received, with
a counterpart for each Lender, certificates by the Secretary or Assistant
Secretary of each Borrower dated as of the Closing Date as to (i) true copies of
the articles of incorporation and by-laws (or other constituent documents) of
each Borrower in effect on such date, (ii) true copies of all corporate action
taken by each Borrower relative to this Agreement and the other Loan Documents
and (iii) the incumbency and signature of the respective officers of each
Borrower executing this Agreement and the other Loan Documents to which each
Borrower is a party, together with satisfactory evidence of the incumbency of
such Secretary or Assistant Secretary. The Agent shall have received, with a
copy for each Lender, certificates from the appropriate Secretaries of State or
other applicable Governmental Authorities dated not more than 30 days before the
Closing Date showing the good standing of each Borrower in its state of
incorporation.
(f) Fees, Expenses, etc. All fees and other compensation
required to be paid to the Agent or the Lenders pursuant hereto or pursuant to
any other written agreement on or prior to the Closing Date shall have been paid
or received.
(g) Market Conditions. No change in the financial or capital
market conditions generally shall have occurred that, in the judgment of the
Agent, would materially impair the Agent's ability to syndicate the Loans to
other Lenders.
(h) Material Adverse Change. No material adverse change in the
business, condition (financial or otherwise), operations or prospects of
Curtiss-Wright and its consolidated Subsidiaries considered as a whole has
occurred since December 31, 1998.
(i) No Litigation. No actions, suits, arbitration proceedings
or other proceedings pending or, to the knowledge of any Borrower, threatened
against or affecting any Borrower, or any properties or rights of any Borrower
which, if determined adversely to any Borrower, would have a Material Adverse
Effect, or which seeks to challenge or prevent or declare illegal the
transactions contemplated by this Agreement or any of the Loan Documents.
(j) Additional Matters. The Agent shall have received such
other certificates, opinions, documents and instruments as may be requested by
any Lender. All corporate and other proceedings, and all documents, instruments
and other matters in connection with the transactions contemplated by this
Agreement and the other Loan Documents shall be satisfactory in form and
substance to the Agent, each Lender and their counsel. The Agent, each Lender
and their counsel shall have received all such counterpart originals or
certified or other copies of such documents as the Agent or such counsel shall
reasonably request.
(k) Guarantees. The Agent shall have received a Guaranty and
Suretyship Agreement in substantially the form of Exhibit D hereto (the
"Curtiss-Wright Guaranty"), duly executed by Curtiss-Wright and (ii) a Guaranty
and Suretyship Agreement in substantially the form of Exhibit E hereto (the
"Subsidiary Guarantees"), duly executed by each Subsidiary Borrower and each
Significant Subsidiary.
(l) Original Credit Agreements. The Original Credit Agreements
shall have been terminated and shall be of no further force and effect, and all
amounts outstanding thereunder shall have been paid in full.
. The obligation of each Lender to make any Loan (including the initial Loans)
is subject to performance by each Borrower of its obligations to be performed
hereunder or under the other Loan Documents on or before the date of such Loan,
satisfaction of the conditions precedent set forth herein and in the other Loan
Documents and to satisfaction of the following further conditions precedent:
(a) Notice. Appropriate notice of such Loan shall have been
given by the applicable Borrower as provided in Article II hereof.
(b) Representations and Warranties. On the date of the making
of such Loan, all representations and warranties of each Borrower contained
herein or otherwise made in writing in connection herewith shall be true and
correct (except with respect to representations and warranties which
specifically refer to an earlier date, which shall be true and correct in all
material respects as of such earlier date) with the same force and effect as
though such representations and warranties had been made on and as of such time.
(c) No Defaults. No Event of Default or Potential Default
shall have occurred and be continuing on such date or after giving effect to the
Loans requested to be made on such date.
(d) No Violations of Law, etc. Neither the making nor use of
the Loans shall cause any Lender to violate or conflict with any Law.
Each request by any Borrower for any Loan (including the initial Loans) shall
constitute a representation and warranty by such Borrower that the conditions
set forth in this Section 4.02 have been satisfied as of the date of such
request. Failure of the Agent to receive notice from the applicable Borrower to
the contrary before such Loan is made shall constitute a further representation
and warranty by such Borrower that the conditions referred to in this Section
4.02 have been satisfied as of the date such Loan is made.
ARTICLE V
COVENANTS
. Each of the covenants set forth in Article VI and Article VII of the Long Term
Credit Agreement and the defined terms used therein are hereby incorporated by
reference as if set forth in full.
ARTICLE VI
EVENTS OF DEFAULT
. An Event of Default shall mean the occurrence or existence of one or more of
the following events or conditions (for any reason, whether voluntary,
involuntary or effected or required by Law):
(a) Any Borrower shall fail to pay when due principal of
any Loan.
(b) Any Borrower shall fail to pay when due interest on any
Loan, or any fees, indemnity or expenses, or any other amount due hereunder or
under any other Loan Document and such failure shall have continued for a period
of five days.
(c) Any representation or warranty made or deemed made by any
Borrower in or pursuant to any Loan Document or in any certificate delivered
thereunder, or any statement made by any Borrower in any financial statement,
certificate, report, exhibit or document furnished by a Borrower to either the
Agent or any Lender pursuant to or in connection with any Loan Document, shall
prove to have been false or misleading in any material respect as of the time
when made or deemed made (including by omission of material information
necessary to make such representation, warranty or statement not misleading).
(d) An Event of Default shall have occurred and be continuing
under the Long Term Credit Agreement.
(e) (i) Any Borrower shall fail to perform or observe any
term, condition or covenant of any bond, note, debenture, loan agreement,
indenture, guaranty, trust agreement, mortgage or similar instrument (other than
a non-recourse obligation) to which any Borrower is a party or by which it is
bound, or to which any of its properties or assets is subject (a "Debt
Instrument"), so that, as a result of any such failure to perform, the
Indebtedness included therein or secured or covered thereby may at the time be
declared due and payable prior to the date on which such Indebtedness would
otherwise become due and payable; or (ii) any event or condition referred to in
any Debt Instrument shall occur or fail to occur, so that, as a result thereof,
the Indebtedness included therein or secured or covered thereby may at such time
be declared due and payable prior to the date on which such Indebtedness would
otherwise become due and payable; or (iii) the Borrower shall fail to pay any
Indebtedness when due, pursuant to demand under any Debt Instrument or
otherwise; provided, however, that each of clauses (i), (ii) and (iii) above
shall be subject to any applicable grace period provided in the relevant Debt
Instrument; and provided, further, that the provisions of this Section 6.01(e)
shall be applicable only if the aggregate principal amount of such Indebtedness
exceeds $5,000,000.
(f) One or more final judgments for the payment of money shall
have been entered against any Borrower, which judgment or judgments exceed
$5,000,000 in the aggregate, and such judgment or judgments shall have remained
undischarged, in effect, and unstayed or unbonded for a period of thirty
consecutive days.
(g) One or more writs or warrants of attachment, garnishment,
execution, distraint or similar process exceeding in value the aggregate amount
of $5,000,000 shall have been issued against any Borrower or any of its
properties and shall have remained undischarged, in effect and unstayed or
unbonded for a period of thirty consecutive days.
(h) A Change of Control shall have occurred.
(i) This Agreement or any Loan Document or term or provision
hereof or thereof shall cease to be in full force and effect, or any Borrower
shall, or shall purport to, terminate (other than termination in accordance with
the last sentence of Section 2.02(b) hereof), repudiate, declare voidable or
void or otherwise contest, this Agreement or any Loan Document or term or
provision hereof or thereof or any obligation or liability of any Borrower
hereunder or thereunder.
(j) Any one or more Termination Events (as defined in the Long
Term Credit Agreement) shall have occurred.
(k) A proceeding shall have been instituted in respect of any
Borrower or any Subsidiary of a Borrower:
(i) seeking to have an order for relief entered in
respect of such Person, or seeking a declaration or entailing
a finding that such Person is insolvent or a similar
declaration or finding, or seeking dissolution, winding-up,
charter revocation or forfeiture, liquidation, reorganization,
arrangement, adjustment, composition or other similar relief
with respect to such Person, its assets or its debts under any
Law relating to bankruptcy, insolvency, relief of debtors or
protection of creditors, termination of legal entities or any
other similar Law now or hereafter in effect, or
(ii) seeking appointment of a receiver, trustee,
liquidator, assignee, sequestrator or other custodian for such
Person or for all or any substantial part of its property
and such proceeding shall result in the entry, making or grant of any
such order for relief, declaration, finding, relief or appointment, or
such proceeding shall remain undismissed, unstayed and unbonded for a
period of sixty consecutive days.
(l) Any Borrower or any Subsidiary of any Borrower shall
become insolvent; shall fail to pay, become unable to pay, or state that it is
or will be unable to pay, its debts as they become due; shall voluntarily
suspend transaction of its business; shall make a general assignment for the
benefit of creditors; shall institute (or fail to controvert in a timely and
appropriate manner) a proceeding described in Section 6.01(k)(i) hereof, or
(whether or not any such proceeding has been instituted) shall consent to or
acquiesce in any such order for relief, declaration, finding or relief described
therein; shall institute (or fail to controvert in a timely and appropriate
manner) a proceeding described in Section 6.01(k)(ii) hereof, or (whether or not
any such proceeding has been instituted) shall consent to or acquiesce in any
such appointment or to the taking of possession by any such custodian of all or
any substantial part of its property; shall dissolve, wind-up, revoke or forfeit
its charter (or other constituent documents) or liquidate itself or any
substantial part of its property; or shall take any action in furtherance of any
of the foregoing.
(m) Any consent, approval or other action by any Governmental
Authority that is necessary for the valid execution, delivery or performance by
the Borrowers of this Agreement ceases to be in full force and effect and the
cessation of such consent, approval or other action could reasonably be expected
to have a Material Adverse Effect.
(n) Curtiss-Wright shall cease to own, beneficially or of
record, directly or indirectly, 100% of the issued and outstanding shares of
capital stock of any Significant Subsidiary or any other Subsidiary Borrower.
. 6.02. Consequences of an Event of Default
(a) If an Event of Default specified in subsections (a)
through (j), (l), (m) or (n) of Section 6.01 hereof shall occur and be
continuing or shall exist, then, in addition to all other rights and remedies
which the Agent or any Lender may have hereunder or under any other Loan
Document, at law, in equity or otherwise, the Lenders shall be under no further
obligation to make Loans hereunder and the Agent, upon the written request of
the Required Lenders shall, by notice to the Borrowers, from time to time do any
or all of the following:
(i) Declare the Revolving Credit Commitments terminated,
whereupon the Commitments will terminate and any fees accrued but
unpaid hereunder shall be immediately due and payable without
presentment, demand, protest or further notice of any kind, all of
which are hereby waived, and an action therefor shall immediately
accrue.
(ii) Declare the unpaid principal amount of the Loans and
interest accrued thereon to be immediately due and payable without
presentment, demand, protest or further notice of any kind, all of
which are hereby waived, and an action therefor shall immediately
accrue.
(b) If an Event of Default specified in subsection (k) or (l)
of Section 6.01 hereof shall occur or exist, then, in addition to all other
rights and remedies which the Agent or any Lender may have hereunder or under
any other Loan Document, at law, in equity or otherwise, the Revolving Credit
Commitments shall automatically terminate and the Lenders shall be under no
further obligation to make Loans and the unpaid principal amount of the Loans
and interest accrued thereon shall become immediately due and payable without
presentment, demand, protest or notice of any kind, all of which are hereby
waived, and an action therefor shall immediately accrue.
. If any Lender or the Agent obtains a judgment against any Borrower in an Other
Currency, the obligations of such Borrower in respect of any sum adjudged to be
due to such Lender or the Agent hereunder or under the Revolving Credit Notes
(the "Judgment Amount") shall be discharged only to the extent that, on the
Business Day following receipt by such Lender or the Agent of the Judgment
Amount in such Other Currency, such Lender or Agent, in accordance with normal
banking procedures, purchases Dollars with the Judgment Amount in such Other
Currency. If the amount of Dollars so purchased is less than the amount of
Dollars that could have been purchased with the Judgment Amount on the date or
dates the Judgment Amount was originally due and owing to the Lenders or the
Agent hereunder or under the Revolving Credit Notes (the "Original Due Date")
(excluding the portion of the Judgment Amount which has accrued as a result of
the failure of any Borrower to pay the sum originally due hereunder or under the
Revolving Credit Notes when it was originally due hereunder or under the
Revolving Credit Notes) (the "Loss"), the Borrowers agree to indemnify such
Lender or the Agent, as the case may be, against the Loss, and if the amount of
Dollars so purchased exceeds the amount of Dollars that could have been
purchased with the Judgment Amount on the Original Due Date, such Lender or the
Agent agrees to remit such excess to the applicable Borrower.
ARTICLE VII
THE AGENT
. Each Lender hereby irrevocably appoints Mellon to act as Agent for such Lender
under this Agreement and the other Loan Documents. Each Lender hereby
irrevocably authorizes the Agent to take such action on behalf of such Lender
under the provisions of this Agreement and the other Loan Documents, and to
exercise such powers and to perform such duties, as are expressly delegated to
or required of the Agent by the terms hereof or thereof, together with such
powers as are reasonably incidental thereto. Mellon hereby agrees to act as
Agent on behalf of the Lenders on the terms and conditions set forth in this
Agreement and the other Loan Documents, subject to its right to resign as
provided in Section 7.10 hereof. Each Lender hereby irrevocably authorizes the
Agent to execute and deliver each of the Loan Documents and to accept delivery
of such of the other Loan Documents as may not require execution by the Agent.
Each Lender agrees that the rights and remedies granted to the Agent under the
Loan Documents shall be exercised exclusively by the Agent, and that no Lender
shall have any right individually to exercise any such right or remedy, except
to the extent expressly provided herein or therein.
. Notwithstanding anything to the contrary elsewhere in this Agreement or in
any other Loan Document:
(a) The Agent shall have no duties or responsibilities except
those expressly set forth in this Agreement and the other Loan Documents, and no
implied duties or responsibilities on the part of the Agent shall be read into
this Agreement or any Loan Document or shall otherwise exist; provided, however,
that nothing contained in this Article VII shall affect the express duties and
responsibilities of the Agent to the Borrowers under this Agreement and the
other Loan Documents.
(b) The duties and responsibilities of the Agent under this
Agreement and the other Loan Documents shall be mechanical and administrative in
nature, and the Agent shall not have a fiduciary relationship in respect of any
Lender.
(c) The Agent is and shall be solely the agent of the Lenders.
The Agent does not assume, and shall not at any time be deemed to have, any
relationship of agency or trust with or for, or any other duty or responsibility
to, the Borrowers or any other Person (except only for its relationship as agent
for the Lenders, and its express duties and responsibilities to the Lenders and
the Borrowers, as provided in this Agreement and the other Loan Documents).
(d) The Agent shall be under no obligation to take any action
hereunder or under any other Loan Document if the Agent believes in good faith
that taking such action may conflict with any Law or any provision of this
Agreement or any other Loan Document, or may require the Agent to qualify to do
business in any jurisdiction where it is not then so qualified.
. The Agent shall take any action of the type specified in this Agreement or any
other Loan Document as being within the Agent's rights, powers or discretion in
accordance with directions from the Required Lenders (or, to the extent this
Agreement or such Loan Document expressly requires the direction or consent of
some other Person or set of Persons, then instead in accordance with the
directions of such other Person or set of Persons). In the absence of such
directions, the Agent shall have the authority (but under no circumstances shall
be obligated), in its sole discretion, to take any such action, except to the
extent this Agreement or such Loan Document expressly requires the direction or
consent of the Required Lenders (or some other Person or set of Persons), in
which case the Agent shall not take such action absent such direction or
consent. Any action or inaction pursuant to such direction, discretion or
consent shall be binding on all the Lenders. Subject to Section 7.04(a) hereof,
the Agent shall not have any liability to any Person as a result of (x) the
Agent acting or refraining from acting in accordance with the directions of the
Required Lenders (or other applicable Person or set of Persons), (y) the Agent
refraining from acting in the absence of instructions to act from the Required
Lenders (or other applicable Person or set of Persons), whether or not the Agent
has discretionary power to take such action, or (z) the Agent taking
discretionary action it is authorized to take under this Section.
. Notwithstanding anything to the contrary elsewhere in this Agreement or any
other Loan Document:
(a) The Agent shall not be liable for any action taken or
omitted to be taken by it under or in connection with this Agreement or any
other Loan Document, unless caused by its own gross negligence or willful
misconduct.
(b) The Agent shall not be responsible for (i) the execution,
delivery, effectiveness, enforceability, genuineness, validity or adequacy of
this Agreement or any other Loan Document, (ii) any recital, representation,
warranty, document, certificate, report or statement in, provided for in, or
received under or in connection with, this Agreement or any other Loan Document,
or (iii) any failure of any Lender to perform any of its obligations under this
Agreement or any other Loan Document.
(c) The Agent shall not be under any obligation to ascertain,
inquire or give any notice relating to (i) the performance or observance of any
of the terms or conditions of this Agreement or any other Loan Document on the
part of the Borrowers or their respective Subsidiaries, (ii) the business,
operations, condition (financial or otherwise) or prospects of the Borrowers or
their respective Subsidiaries, or any other Person, or (iii) except to the
extent set forth in Section 7.05(f) hereof, the existence of any Event of
Default or Potential Default.
(d) The Agent shall not be under any obligation, either
initially or on a continuing basis, to provide any Lender with any notices,
reports or information of any nature, whether in its possession presently or
hereafter, except for such notices, reports and other information expressly
required by this Agreement or any other Loan Document to be furnished by the
Agent to such Lender.
. 7.05. Administration by the Agent
(a) The Agent may rely upon any notice or other communication
of any nature (written or oral, including but not limited to telephone
conversations, whether or not such notice or other communication is made in a
manner permitted or required by this Agreement or any Loan Document) purportedly
made by or on behalf of the proper party or parties, and the Agent shall not
have any duty to verify the identity or authority of any Person giving such
notice or other communication.
(b) The Agent may consult with legal counsel (including,
without limitation, in-house counsel for the Agent or in-house or other counsel
for any Borrower), independent public accountants and any other experts selected
by it from time to time, and the Agent shall not be liable for any action taken
or omitted to be taken in good faith by it in accordance with the advice of such
counsel, accountants or experts.
(c) The Agent may conclusively rely upon the truth of the
statements and the correctness of the opinions expressed in any certificates or
opinions furnished to the Agent in accordance with the requirements of this
Agreement or any other Loan Document. Whenever the Agent shall deem it necessary
or desirable that a matter be proved or established with respect to any Borrower
or any Lender, such matter may be established by a certificate of the applicable
Borrower or such Lender, as the case may be, and the Agent may conclusively rely
upon such certificate (unless other evidence with respect to such matter is
specifically prescribed in this Agreement or another Loan Document).
(d) The Agent may fail or refuse to take any action unless it
shall be indemnified to its satisfaction from time to time against any and all
amounts, liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature which
may be imposed on, incurred by or asserted against the Agent by reason of taking
or continuing to take any such action.
(e) The Agent may perform any of its duties under this
Agreement or any other Loan Document by or through agents or attorneys-in-fact.
The Agent shall not be responsible for the negligence or misconduct of any
agents or attorneys-in fact selected and supervised by it with reasonable care.
(f) The Agent shall not be deemed to have any knowledge or
notice of the occurrence of any Event of Default or Potential Default unless the
Agent has received notice from a Lender or any Borrower referring to this
Agreement, describing such Event of Default or Potential Default. If the Agent
receives such a notice, the Agent shall give prompt notice thereof to each
Lender.
. Each Lender acknowledges as follows: (a) Neither the Agent nor any other
Lender has made any representations or warranties to it, and no act taken
hereafter by the Agent or any other Lender shall be deemed to constitute any
representation or warranty by the Agent or such other Lender to it. (b) It has,
independently and without reliance upon the Agent or any other Lender, and based
upon such documents and information as it has deemed appropriate, made its own
credit and legal analysis and decision to enter into this Agreement and the
other Loan Documents. (c) It will, independently and without reliance upon the
Agent or any other Lender, and based upon such documents and information as it
shall deem appropriate at the time, make its own decisions to take or not take
action under or in connection with this Agreement and the other Loan Documents.
. Each Lender agrees to reimburse and indemnify the Agent and its directors,
officers, employees and agents (to the extent not reimbursed by the Borrowers
and without limitation of the obligations of the Borrowers to do so), Pro Rata,
from and against any and all amounts, losses, liabilities, claims, damages,
expenses, obligations, penalties, actions, judgments, suits, costs or
disbursements of any kind or nature (including, without limitation, the fees and
disbursements of counsel for the Agent or such other Person in connection with
any investigative, administrative or judicial proceeding commenced or
threatened, whether or not the Agent or such other Person shall be designated a
party thereto) that may at any time be imposed on, incurred by or asserted
against the Agent or such other Person as a result of, or arising out of, or in
any way related to or by reason of, this Agreement, any other Loan Document, any
transaction from time to time contemplated hereby or thereby, or any transaction
financed in whole or in part or directly or indirectly with the proceeds of any
Loan, provided that no Lender shall be liable for any portion of such amounts,
losses, liabilities, claims, damages, expenses, obligations, penalties, actions,
judgments, suits, costs or disbursements resulting solely from the gross
negligence or willful misconduct of the Agent or such other Person, as finally
determined by a court of competent jurisdiction. Payments under this Section
7.07 shall be due and payable on demand, and to the extent that any Lender fails
to pay any such amount on demand, such amount shall bear interest for each day
from the date of demand until paid (before and after judgment) at a rate per
annum (calculated on the basis of a year of 365 or 366 days, as the case may be,
and actual days elapsed) which for each day shall be equal to the Prime Rate.
. With respect to its Revolving Credit Commitments and the Obligations owing to
it, the Agent shall have the same rights and powers under this Agreement and
each other Loan Document as any other Lender and may exercise the same as though
it were not the Agent, and the terms "Lenders," "holders of Notes" and like
terms shall include the Agent in its individual capacity as such. The Agent and
its affiliates may, without liability to account, make loans to, accept deposits
from, acquire debt or equity interests in, act as trustee under indentures of,
and engage in any other business with, any Borrower and any stockholder,
subsidiary or affiliate of any Borrower, as though the Agent were not the Agent
hereunder.
. The Agent may deem and treat the Lender which is payee of a Note as the owner
and holder of such Note for all purposes hereof unless and until a Transfer
Supplement with respect to the assignment or transfer thereof shall have been
filed with the Agent in accordance with Section 8.14 hereof. Any authority,
direction or consent of any Person who at the time of giving such authority,
direction or consent is shown in the Register as being a Lender shall be
conclusive and binding on each present and subsequent holder, transferee or
assignee of any Note or Notes payable to such Lender or of any Note or Notes
issued in exchange therefor.
. The Agent may resign at any time by giving 10 days' prior written notice
thereof to the Lenders and the Borrowers. The Agent may be removed by the
Required Lenders at any time by giving 10 days' prior written notice thereof to
the Agent, the other Lenders and the Borrowers. Upon any such resignation or
removal, the Required Lenders shall have the right to appoint a successor Agent.
If no successor Agent shall have been so appointed and consented to, and shall
have accepted such appointment, within 30 days after such notice of resignation
or removal, then the retiring Agent may, on behalf of the Lenders, appoint a
successor Agent. Each successor Agent shall be a commercial bank or trust
company organized or licensed under the laws of the United States of America or
any State thereof and having a combined capital and surplus of at least
$1,000,000,000. Upon the acceptance by a successor Agent of its appointment as
Agent hereunder, such successor Agent shall thereupon succeed to and become
vested with all the properties, rights, powers, privileges and duties of the
former Agent, without further act, deed or conveyance. Upon the effective date
of resignation or removal of a retiring Agent, such Agent shall be discharged
from its duties under this Agreement and the other Loan Documents, but the
provisions of this Agreement shall inure to its benefit as to any actions taken
or omitted by it while it was Agent under this Agreement. If and so long as no
successor Agent shall have been appointed, then any notice or other
communication required or permitted to be given by the Agent shall be
sufficiently given if given by the Required Lenders, all notices or other
communications required or permitted to be given to the Agent shall be given to
each Lender, and all payments to be made to the Agent shall be made directly to
the Borrower or Lender for whose account such payment is made.
. If the Agent shall from time to time deem it necessary or advisable, for its
own protection in the performance of its duties hereunder or in the interest of
the Lenders and if the Borrowers and the Required Lenders shall consent (which
consent shall not be unreasonably withheld), the Agent and the Borrowers shall
execute and deliver a supplemental agreement and all other instruments and
agreements necessary or advisable, in the opinion of the Agent, to constitute
another commercial bank or trust company, or one or more other Persons approved
by the Agent, to act as co-Agent, with such powers of the Agent as may be
provided in such supplemental agreement, and to vest in such bank, trust company
or Person as such co-Agent or separate agent, as the case may be, any
properties, rights, powers, privileges and duties of the Agent under this
Agreement or any other Loan Document.
. The Agent shall not be liable for any calculation, apportionment or
distribution of payments made by it in good faith. If such calculation,
apportionment or distribution is subsequently determined to have been made in
error, the sole recourse of any Lender to whom payment was due but not made
shall be to recover from the other Lenders any payment in excess of the amount
to which they are determined to be entitled.
. Curtiss-Wright agrees to pay to the Agent, for its individual account,
Agent's fees in the amounts set forth in the Agent's fee letter.
. Unless the Agent shall have been notified in writing by any Lender not later
than the close of business on the day before the day on which Loans are
requested by any Borrower to be made that such Lender will not make its Pro Rata
share of such Loans, the Agent may assume that such Lender will make its Pro
Rata share of the Loans, and in reliance upon such assumption the Agent may (but
in no circumstances shall be required to) make available to any Borrower a
corresponding amount. If and to the extent that any Lender fails to make such
payment to the Agent on such date, such Lender shall pay such amount on demand
(or, if such Lender fails to pay such amount on demand, the applicable Borrower
shall pay such amount on demand), together with interest, for the Agent's own
account, for each day from and including the date of the Agent's payment to and
including the date of repayment to the Agent (before and after judgment) at the
rate per annum applicable to such Loans. All payments to the Agent under this
Section shall be made to the Agent at its Office in Dollars in funds immediately
available at such Office, without set-off, withholding, counterclaim or other
deduction of any nature.
7.15. Syndication Agent and Documentation Agent. The titles
"Syndication Agent" and "Documentation Agent" given to certain Lenders named on
the cover page of this Agreement are purely honorific, and no Syndication Agent
or Documentation Agent, as the case may be, in its capacity as such, shall have
any duties or responsibilities hereunder.
ARTICLE VIII
MISCELLANEOUS
. Whenever any payment or action to be made or taken hereunder or under any
other Loan Document shall be stated to be due on a day which is not a Business
Day, such payment or action shall be made or taken on the next following
Business Day and such extension of time shall be included in computing interest
or fees, if any, in connection with such payment or action.
. The unpaid principal amount of the Loans owing to each Lender, the unpaid
interest accrued thereon, the interest rate or rates applicable to such unpaid
principal amount, the duration of such applicability, each Lender's Revolving
Credit Committed Amount and the accrued and unpaid Facility Fees shall at all
times be ascertained from the records of the Agent, which shall be conclusive
absent manifest error.
. Neither this Agreement nor any Loan Document may be amended, modified or
supplemented except in accordance with the provisions of this Section. The
Required Lenders and the Borrowers may from time to time amend, modify or
supplement the provisions of this Agreement or any other Loan Document for the
purpose of amending, adding to, or waiving any provisions or changing in any
manner the rights and duties of the Borrowers, the Agent or any Lender. Any such
amendment, modification or supplement made in accordance with the provisions of
this Section shall be binding upon the Borrowers, each Lender and the Agent. The
Agent shall enter into such amendments, modifications or supplements from time
to time as directed by the Required Lenders, and only as so directed, provided,
that no such amendment, modification or supplement may be made which will:
(a) Increase the Revolving Credit Committed Amount of any
Lender over the amount thereof then in effect, or extend the Expiration Date,
without the written consent of each Lender affected thereby;
(b) Reduce the principal amount of or extend the time for any
payment of any Loan, or reduce the amount of or rate of interest or extend the
time for payment of interest borne by any Loan or extend the time for payment of
or reduce the amount of any Facility Fee or reduce or postpone the date for
payment of any other fees, expenses, indemnities or amounts payable under any
Loan Document, without the written consent of each Lender affected thereby;
(c) Change the definition of "Required Lenders" or amend this
Section 8.03, without the written consent of all the Lenders;
(d) Release any "Guarantor" or reduce any "Guaranteed
Obligations" (as such terms are defined in the Subsidiary Guarantees) of any
Guarantor under any Subsidiary Guaranty in connection with the sale or other
disposition of all of the capital stock of and other equity interests in such
Guarantor to a Person or Persons other than a Borrower or a Subsidiary of a
Borrower, which sale or other disposition is in compliance with this Agreement
and the Loan Documents (a "Permitted Sale"), without the written consent of the
Required Lenders;
(e) Release any "Guarantor" or reduce any "Guaranteed
Obligations" (as such terms are defined in the Curtiss-Wright Guaranty or
Subsidiary Guarantees, as applicable) of any Guarantor under the Curtiss-Wright
Guaranty or any Subsidiary Guaranty, other than in connection with a Permitted
Sale, without the written consent of all Lenders; or
(f) Amend or waive any of the provisions of Article VII
hereof, or impose additional duties upon the Agent or otherwise adversely affect
the rights, interests or obligations of the Agent, without the written consent
of the Agent;
and provided further, that Transfer Supplements may be entered into in the
manner provided in Section 8.14 hereof. Any such amendment, modification or
supplement must be in writing and shall be effective only to the extent set
forth in such writing. Any Event of Default or Potential Default waived or
consented to in any such amendment, modification or supplement shall be deemed
to be cured and not continuing to the extent and for the period set forth in
such waiver or consent, but no such waiver or consent shall extend to any other
or subsequent Event of Default or Potential Default or impair any right
consequent thereto.
. No course of dealing and no delay or failure of the Agent or any Lender in
exercising any right, power or privilege under this Agreement or any other Loan
Document shall affect any other or future exercise thereof or exercise of any
other right, power or privilege; nor shall any single or partial exercise of any
such right, power or privilege or any abandonment or discontinuance of steps to
enforce such a right, power or privilege preclude any further exercise thereof
or of any other right, power or privilege. The rights and remedies of the Agent
and the Lenders under this Agreement and any other Loan Document are cumulative
and not exclusive of any rights or remedies which either the Agent or any Lender
would otherwise have hereunder or thereunder, at law, in equity or otherwise.
. 8.05. Notices
(a) Except to the extent otherwise expressly permitted
hereunder or thereunder, all notices, requests, demands, directions and other
communications (collectively "notices") under this Agreement or any Loan
Document shall be in writing (including telexed and telecopied communication)
and shall be sent by first-class mail, or by nationally-recognized overnight
courier, or by telex or telecopier (with confirmation in writing mailed
first-class or sent by such an overnight courier), or by personal delivery. All
notices shall be sent to the applicable party at the address stated on the
signature pages hereof or in accordance with the last unrevoked written
direction from such party to the other parties hereto, in all cases with postage
or other charges prepaid. All notices given to Curtiss-Wright under this
Agreement shall be deemed to be given to each Borrower. Any such properly given
notice shall be effective on the earliest to occur of receipt, telephone
confirmation of receipt of telex or telecopy communication, one Business Day
after delivery to a nationally-recognized overnight courier, or three Business
Days after deposit in the mail.
(b) Any Lender giving any notice to the Borrowers shall
simultaneously send a copy thereof to the Agent, and the Agent shall promptly
notify the other Lenders of the receipt by it of any such notice.
(c) The Agent and each Lender may rely on any notice (whether
or not such notice is made in a manner permitted or required by this Agreement
or any Loan Document) purportedly made by or on behalf of the Borrowers, and
neither the Agent nor any Lender shall have any duty to verify the identity or
authority of any Person giving such notice.
. 8.06. Expenses; Taxes; Indemnity
(a) Curtiss-Wright agrees to pay or cause to be paid and to
save the Agent and each of the Lenders harmless against liability for the
payment of all reasonable out-of-pocket costs and expenses (including but not
limited to reasonable fees and expenses of counsel to the Agent and, with
respect to costs incurred by the Agent, or any Lender pursuant to clause (iii)
below, such counsel and local counsel) incurred by the Agent or, in the case of
clause (iii) below any Lender from time to time arising from or relating to (i)
the negotiation, preparation, execution, delivery, administration and
performance of this Agreement and the other Loan Documents, (ii) any requested
amendments, modifications, supplements, waivers or consents (whether or not
ultimately entered into or granted) to this Agreement or any Loan Document, and
(iii) except as to costs and expenses made necessary by reason of the gross
negligence or willful misconduct of the Agent or any Lender, the enforcement or
preservation of rights under this Agreement or any Loan Document (including but
not limited to any such costs or expenses arising from or relating to (A)
collection or enforcement of an outstanding Loan or any other amount owing
hereunder or thereunder by either the Agent or any Lender, (B) any litigation
brought by the Agent, any Lender or such Borrower and related in any way to this
Agreement or the Loan Documents (other than the costs and expenses incurred by
the Agent or any Lender, respectively, in connection with any litigation which
results in a final, non-appealable judgment against the Agent or such Lender)
and (C) any proceeding, dispute, work-out, restructuring or rescheduling related
in any way to this Agreement or the Loan Documents).
(b) The Borrowers hereby agree to pay all stamp, document,
transfer, recording, filing, registration, search, sales and excise fees and
taxes and all similar impositions now or hereafter determined by the Agent or
any Lender to be payable in connection with this Agreement or any other Loan
Documents or any other documents, instruments or transactions pursuant to or in
connection herewith or therewith, and the Borrowers agree to save the Agent and
each Lender harmless from and against any and all present or future claims,
liabilities or losses with respect to or resulting from any omission to pay or
delay in paying any such fees, taxes or impositions other than those resulting
from omissions to pay or delays in payment attributable to the acts or omissions
of the Agent or any Lender.
(c) Curtiss-Wright hereby agrees to reimburse and indemnify
each of the Indemnified Parties from and against any and all losses,
liabilities, claims, damages, expenses, obligations, penalties, actions,
judgments, suits, costs or disbursements of any kind or nature whatsoever
(including, without limitation, the reasonable fees and disbursements of counsel
for such Indemnified Party in connection with any investigative, administrative
or judicial proceeding commenced or threatened, whether or not such Indemnified
Party shall be designated a party thereto) that may at any time be imposed on,
asserted against or incurred by such Indemnified Party as a result of, or
arising out of, or in any way related to or by reason of, any act or conduct of
any Borrower with respect to or in connection with the transactions described in
this Agreement or any other Loan Document, or any transaction financed in whole
or in part or directly or indirectly with the proceeds of any Loan (and without
in any way limiting the generality of the foregoing, including any violation or
breach of any requirement of Law or any other Law by any Borrower or any
Subsidiary of any Borrower); or any exercise by either the Agent or any Lender
of any of its rights or remedies under this Agreement or any other Loan
Document); but excluding any such losses, liabilities, claims, damages,
expenses, obligations, penalties, actions, judgments, suits, costs or
disbursements resulting solely from the gross negligence or willful misconduct
of such Indemnified Party, as finally determined by a court of competent
jurisdiction. If and to the extent that the foregoing obligations of the
Borrowers under this subsection (c), or any other indemnification obligation of
the Borrowers hereunder or under any other Loan Document, are unenforceable for
any reason, the Borrowers hereby agree to make the maximum contribution to the
payment and satisfaction of such obligations which is permissible under
applicable Law.
. The provisions of this Agreement are intended to be severable. If any
provision of this Agreement shall be held invalid or unenforceable in whole or
in part in any jurisdiction such provision shall, as to such jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without in any
manner affecting the validity or enforceability thereof in any other
jurisdiction or the remaining provisions hereof in any jurisdiction.
. This Agreement and the other Loan Documents supersede all prior and
contemporaneous understandings and agreements, whether written or oral, among
the parties hereto relating to the transactions provided for herein and therein.
. All representations and warranties of the Borrowers contained herein or in any
other Loan Document or made in connection herewith shall survive the making of,
and shall not be waived by the execution and delivery, of this Agreement or any
other Loan Document, any investigation by the Agent or any Lender, the making of
any Loan, or any other event or condition whatever. All covenants and agreements
of the Borrowers contained herein or in any other Loan Document shall continue
in full force and effect from and after the date hereof so long as any Borrower
may borrow hereunder and until payment in full of all Obligations. Without
limitation, all obligations of the Borrowers hereunder or under any other Loan
Document to make payments to or indemnify the Agent or any Lender shall survive
the payment in full of all Obligations, termination of the Borrowers' rights to
borrow hereunder, and all other events and conditions whatever. In addition, all
obligations of each Lender to make payments to or indemnify the Agent shall
survive the payment in full by the Borrowers of all Obligations, termination of
the Borrowers' rights to borrow hereunder, and all other events or conditions
whatever.
. This Agreement may be executed in any number of counterparts and by the
different parties hereto on separate counterparts each of which, when so
executed, shall be deemed an original, but all such counterparts shall
constitute but one and the same instrument.
. The parties hereto intend to conform to all applicable Laws in effect from
time to time limiting the maximum rate of interest that may be charged or
collected. Accordingly, notwithstanding any other provision hereof or of any
other Loan Document, the Borrowers shall not be required to make any payment to
or for the account of any Lender, and each Lender shall refund any payment made
by the Borrowers, to the extent that such requirement or such failure to refund
would violate or conflict with nonwaivable provisions of applicable Laws
limiting the maximum amount of interest which may be charged or collected by
such Lender.
. The Borrowers hereby agree that, to the fullest extent permitted by law, if
any Obligation of any Borrower shall be due and payable (by acceleration or
otherwise), each Lender shall have the right, without notice to such Borrower,
to set-off against and to appropriate and apply to the Obligation any
indebtedness, liability or obligation of any nature owing to such Borrower by
such Lender, including but not limited to all deposits (whether time or demand,
general or special, provisionally credited or finally credited, whether or not
evidenced by a certificate of deposit) now or hereafter maintained by such
Borrower with such Lender. Such right shall be absolute and unconditional in all
circumstances and, without limitation, shall exist whether or not such Lender or
any other Person shall have given notice or made any demand to such Borrower or
any other Person, whether such indebtedness, obligation or liability owed to
such Borrower is contingent, absolute, matured or unmatured, and regardless of
the existence or adequacy of any collateral, guaranty or any other security,
right or remedy available to any Lender or any other Person. The Borrowers
hereby agree that, to the fullest extent permitted by law, any Participant and
any branch, subsidiary or affiliate of any Lender or any Participant shall have
the same rights of set-off as a Lender as provided in this Section (regardless
of whether such Participant, branch, subsidiary or affiliate would otherwise be
deemed in privity with or a direct creditor of such Borrower). The rights
provided by this Section are in addition to all other rights of set-off and
banker's lien and all other rights and remedies which any Lender (or any such
Participant, branch, subsidiary or affiliate) may otherwise have under this
Agreement, any other Loan Document, at law or in equity, or otherwise, and
nothing in this Agreement or any Loan Document shall be deemed a waiver or
prohibition of or restriction on the rights of set-off or bankers' lien of any
such Person.
. The Lenders hereby agree among themselves that if any Lender shall receive (by
voluntary payment, realization upon security, set-off or from any other source)
any amount on account of the Loans, interest thereon, or any other Obligation
contemplated by this Agreement or the other Loan Documents to be made by the
Borrowers Pro Rata to all Lenders in greater proportion than any such amount
received by any other Lender, then the Lender receiving such proportionately
greater payment shall notify each other Lender and the Agent of such receipt,
and equitable adjustment will be made in the manner stated in this Section so
that, in effect, all such excess amounts will be shared Pro Rata among all of
the Lenders. The Lender receiving such excess amount shall purchase (which it
shall be deemed to have done simultaneously upon the receipt of such excess
amount) for cash from the other Lenders a participation in the applicable
Obligations owed to such other Lenders in such amount as shall result in a Pro
Rata sharing by all Lenders of such excess amount (and to such extent the
receiving Lender shall be a Participant). If all or any portion of such excess
amount is thereafter recovered from the Lender making such purchase, such
purchase shall be rescinded and the purchase price restored to the extent of
such recovery, together with interest or other amounts, if any, required by Law
to be paid by the Lender making such purchase. The Borrowers hereby consent to
and confirm the foregoing arrangements. Each Participant shall be bound by this
Section as fully as if it were a Lender hereunder.
. 8.14. Successors and Assigns; Participations; Assignments
(a) Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the Borrowers, the Lenders, all future holders
of the Notes, the Agent and their respective successors and assigns, except that
the Borrowers may not assign or transfer any of their respective rights
hereunder or interests herein without the prior written consent of all the
Lenders and the Agent, and any purported assignment without such consent shall
be void.
(b) Participations. Any Lender may, in the ordinary course of
its commercial banking business and in accordance with applicable Law, at any
time sell participations to one or more commercial banks or other Persons (each
a "Participant") in all or a portion of its rights and obligations under this
Agreement and the other Loan Documents (including, without limitation, all or a
portion of its Revolving Credit Commitments and the Loans owing to it and any
Note held by it); provided, that
(i) any such Lender's obligations under this Agreement
and the other Loan Documents shall remain unchanged,
(ii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations,
(iii) the parties hereto shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement and each of the other Loan Documents,
(iv) such Participant shall be bound by the provisions of
Section 8.13 hereof, and the Lender selling such participation shall
obtain from such Participant a written confirmation of its agreement to
be so bound,
(v) no Participant (unless such Participant is an affiliate of
such Lender, or is itself a Lender) shall be entitled to require such
Lender to take or refrain from taking action under this Agreement or
under any other Loan Document, except that such Lender may agree with
such Participant that such Lender will not, without such Participant's
consent, take action of the type described in subsections (a), (b),
(c), (d) or (e) of Section 8.03 hereof; notwithstanding the foregoing,
in no event shall any participation by any Lender have the effect of
releasing such Lenders from its obligations hereunder, and
(vi) no Participant shall be an Affiliate of any Borrower.
The Borrowers agree that any such Participant shall be entitled to the benefits
of Sections 2.10, 2.12 and 8.06 with respect to its participation in the
Revolving Credit Commitments and the Loans outstanding from time to time but
only to the extent such Participant sustains such losses; provided, that no such
Participant shall be entitled to receive any greater amount pursuant to such
Sections than the transferor Lender would have been entitled to receive in
respect of the amount of the participation transferred to such Participant had
no such transfer occurred and provided, further, that any such Participant, as a
condition precedent to receiving the benefits of Sections 2.10, 2.12 and 8.06,
shall agree in writing to indemnify the Borrowers and hold them harmless as
against any and all claims or demands by or liabilities to the transferor Lender
or Lenders or any other Person for an amount which in whole or in part
duplicates, but only to the extent of such duplication, the amount or amounts to
be paid to the Participant under this Section.
(c) Assignments. Any Lender may, in the ordinary course of its
commercial banking business and in accordance with applicable Law, at any time
assign all or a portion of its rights and obligations under this Agreement and
the other Loan Documents (including, without limitation, all or any portion of
its Revolving Credit Commitments and Loans owing to it and any Note held by it)
to any Lender, any affiliate of a Lender or to one or more additional commercial
banks or other Persons (each a "Purchasing Lender"); provided, that
(i) any such assignment to a Purchasing Lender which is not a
Lender shall be made only with the consent of Curtiss-Wright and the
Agent, which consent shall not be unreasonably withheld,
(ii) if a Lender makes such an assignment of less than all of
its then remaining rights and obligations under this Agreement and the
other Loan Documents, such transferor Lender shall retain, after such
assignment, a minimum principal amount of $5,000,000 of the Revolving
Credit Commitments and Loans then outstanding, and such assignment
shall be in a minimum aggregate principal amount of $5,000,000 of the
Revolving Credit Commitments and Loans then outstanding,
(iii) each such assignment shall be of a constant, and not a
varying, percentage of each Revolving Credit Commitment of the
transferor Lender and of all of the transferor Lender's rights and
obligations under this Agreement and the other Loan Documents, and
(iv) each such assignment shall be made pursuant to a Transfer
Supplement in substantially the form of Exhibit C to this Agreement,
duly completed (a "Transfer Supplement").
In order to effect any such assignment, the transferor Lender and the Purchasing
Lender shall execute and deliver to the Agent a duly completed Transfer
Supplement (including the consents required by clause (i) of the preceding
sentence) with respect to such assignment, together with any Note or Notes
subject to such assignment (the "Transferor Lender Notes") and a processing and
recording fee of $2,500; and, upon receipt thereof, the Agent shall accept such
Transfer Supplement. Upon receipt of the Purchase Price Receipt Notice pursuant
to such Transfer Supplement, the Agent shall record such acceptance in the
Register. Upon such execution, delivery, acceptance and recording, from and
after the Transfer Effective Date specified in such Transfer Supplement
(x) the Purchasing Lender shall be a party hereto and, to the
extent provided in such Transfer Supplement, shall have the rights and
obligations of a Lender hereunder, and
(y) the transferor Lender thereunder shall be released from
its obligations under this Agreement to the extent so transferred (and,
in the case of an Transfer Supplement covering all or the remaining
portion of a transferor Lender's rights and obligations under this
Agreement, such transferor Lender shall cease to be a party to this
Agreement) from and after the Transfer Effective Date.
On or prior to the Transfer Effective Date specified in an Transfer Supplement,
the Borrowers, at their expense, shall execute and deliver to the Agent (for
delivery to the Purchasing Lender) new Notes evidencing such Purchasing Lender's
assigned Revolving Credit Commitments or Loans and (for delivery to the
transferor Lender) replacement Notes in the principal amount of the Loans or
Revolving Credit Commitments retained by the transferor Lender (such Notes to be
in exchange for, but not in payment of, those Notes then held by such transferor
Lender). Each such Note shall be dated the date and be substantially in the form
of the predecessor Note. The Agent shall mark the predecessor Notes "exchanged"
and deliver them to the applicable Borrower. Accrued interest and accrued fees
shall be paid to the Purchasing Lender at the same time or times provided in the
predecessor Notes and this Agreement.
(d) Register. The Agent shall maintain at its office a copy of
each Transfer Supplement delivered to it and a register (the "Register") for the
recordation of the names and addresses of the Lenders and the Revolving Credit
Commitment of, and principal amount of the Loans owing to, each Lender from time
to time. The entries in the Register shall be conclusive absent manifest error
and the Borrower, the Agent and the Lenders may treat each person whose name is
recorded in the Register as a Lender hereunder for all purposes of the
Agreement. The Register shall be available for inspection by the Borrowers or
any Lender at any reasonable time and from time to time upon reasonable prior
notice.
(e) Financial and Other Information. The Borrowers authorize
the Agent and each Lender to disclose to any Participant or Purchasing Lender
(each, a "transferee") and any prospective transferee any and all financial and
other information in such Person's possession concerning the Borrowers and their
respective Subsidiaries and Affiliates which has been or may be delivered to
such Person by or on behalf of such Borrowers in connection with this Agreement
or any other Loan Document or such Person's credit evaluation of such Borrowers
and their respective Subsidiaries and Affiliates; subject, however, to the
provisions of Section 8.16 hereof. . 8.15. Governing Law; Submission to
Jurisdiction; Limitation of Liability
(a) Governing Law. THIS AGREEMENT AND ALL OTHER LOAN DOCUMENTS
(EXCEPT TO THE EXTENT, IF ANY, OTHERWISE EXPRESSLY STATED IN SUCH OTHER LOAN
DOCUMENTS) SHALL BE GOVERNED BY, CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CHOICE OF LAW PRINCIPLES.
(b) Certain Waivers. EACH OF THE BORROWERS, THE AGENT
AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY:
(i) AGREE THAT ANY ACTION, SUIT OR PROCEEDING BY ANY PERSON
ARISING FROM OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT
OR ANY STATEMENT, COURSE OF CONDUCT, ACT, OMISSION, OR EVENT OCCURRING
IN CONNECTION HEREWITH OR THEREWITH (COLLECTIVELY, "RELATED
LITIGATION") MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION SITTING IN THE CITY AND COUNTY OF NEW YORK, NEW YORK,
SUBMITS TO THE JURISDICTION OF SUCH COURTS, AND TO THE FULLEST EXTENT
PERMITTED BY LAW AGREES THAT IT WILL NOT BRING ANY RELATED LITIGATION
IN ANY OTHER FORUM;
(ii) WAIVE ANY OBJECTION WHICH IT MAY HAVE AT ANY TIME TO THE
LAYING OF VENUE OF ANY RELATED LITIGATION BROUGHT IN ANY SUCH COURT,
WAIVES ANY CLAIM THAT ANY SUCH RELATED LITIGATION HAS BEEN BROUGHT IN
AN INCONVENIENT FORUM, AND WAIVES ANY RIGHT TO OBJECT, WITH RESPECT TO
ANY RELATED LITIGATION BROUGHT IN ANY SUCH COURT, THAT SUCH COURT DOES
NOT HAVE JURISDICTION;
(iii) CONSENTS AND AGREES TO SERVICE OF ANY SUMMONS, COMPLAINT
OR OTHER LEGAL PROCESS IN ANY RELATED LITIGATION BY REGISTERED OR
CERTIFIED U.S. MAIL, POSTAGE PREPAID, AT THE ADDRESS FOR NOTICES
DESCRIBED IN SECTION 8.05 HEREOF, AND CONSENTS AND AGREES THAT SUCH
SERVICE SHALL CONSTITUTE IN EVERY RESPECT VALID AND EFFECTIVE SERVICE
(BUT NOTHING HEREIN SHALL AFFECT THE VALIDITY OR EFFECTIVENESS OF
PROCESS SERVED IN ANY OTHER MANNER PERMITTED BY LAW); AND
(iv) WAIVES THE RIGHT TO TRIAL BY JURY IN ANY RELATED
LITIGATION.
. Each party hereto agrees to keep confidential any information concerning the
business and financial activities of the other party hereto obtained in
connection with this Agreement except information which (a) is lawfully in the
public domain, (b) is obtained from a third party who is not bound by an
obligation of confidentiality with respect to such information, (c) is required
to be disclosed to any Governmental Authority having jurisdiction over such
person but only to the extent of such requirement, or (d) is disclosed by the
Agent or any Lender in accordance with Section 8.14 hereof.
[Signatures on following pages]
<PAGE>
IN WITNESS WHEREOF, the parties hereto, by their officers
thereunto duly authorized, have executed and delivered this Agreement as of the
date first above written.
ATTEST: CURTISS-WRIGHT CORPORATION
By /s/ Paul J. Ferdenzi By /s/ Gary Benschip
Title: A.G.C. Gary J. Benschip
Treasurer
[Corporate Seal]
Address for Notices:
1200 Wall Street West
Suite 501
Lyndhurst, NJ 07071
Attn: Robert Bosi
Vice President of Finance
Telephone: 201-896-8439
Telecopier: 201-438-5680
ATTEST: CURTISS-WRIGHT FLIGHT SYSTEMS, INC.
By /s/ Paul J. Ferdenzi By /s/ Gary Benschip
Title: A.G.C. Gary J. Benschip
Treasurer
[Corporate Seal]
Address for Notices:
1200 Wall Street West
Suite 501
Lyndhurst, NJ 07071
Attn: Robert Bosi
Vice President of Finance
Telephone: 201-896-8439
Telecopier: 201-438-5680
ATTEST: CURTISS-WRIGHT FLOW CONTROL
CORPORATION
By /s/ Paul J. Ferdenzi By /s/ Gary Benschip
Title: A.G.C. Gary J. Benschip
Treasurer
Address for Notices:
1200 Wall Street West
Suite 501
Lyndhurst, NJ 07071
Attn: Robert Bosi
Vice President of Finance
Telephone: 201-896-8439
Telecopier: 201-438-5680
ATTEST: METAL IMPROVEMENT COMPANY, INC.
By /s/ Paul J. Ferdenzi By /s/ Gary Benschip
Title: A.G.C. Gary J. Benschip
Treasurer
[Corporate Seal]
Address for Notices:
1200 Wall Street West
Suite 501
Lyndhurst, NJ 07071
Attn: Robert Bosi
Vice President of Finance
Telephone: 201-896-8439
Telecopier: 201-438-5680
ATTEST: CURTISS-WRIGHT ANTRIEBSTECHNIK GmbH
By /s/ Paul J. Ferdenzi By /s/ G. J. Yohrling
Title: Assistant General Counsel George J. Yohrling
Manager
[Corporate Seal]
Address for Notices:
1200 Wall Street West
Suite 501
Lyndhurst, NJ 07071
Attn: Robert Bosi
Vice President of Finance
Telephone: 201-896-8439
Telecopier: 201-438-5680
<PAGE>
MELLON BANK, N.A., individually
and as Agent
By /s/ J.W. Bell
J. Wade Bell
Vice President
Initial Revolving Credit
Committed Amount: $10,000,000
Commitment Percentage: 25%
Address for Notices:
1735 Market Street
AIM 191-0750
Philadelphia, Pennsylvania 19103
Attn: J. Wade Bell
Vice President
Telephone: (215) 553-3875
Telecopier: (215) 553-4899
<PAGE>
EUROPEAN AMERICAN BANK
By /s/ Anthony V. Pantina
Title: Vice President
Initial Revolving Credit
Committed Amount: $6,000,000
Commitment Percentage: 15%
Address for Notices:
335 Madison Avenue
New York, New York 10017
Attn: Brian Foster
Telephone: (212) 503-2576
Telecopier: (212) 503-2667
<PAGE>
SCOTIABANC INC.
By /s/ W. Brown
Title:
Initial Revolving Credit
Committed Amount: $9,000,000
Commitment Percentage: 22.5%
Address for Notices:
600 Peachtree Street, N.E.
Suite 2700
Atlanta, Georgia 30308
Attn: William Brown
Telephone: (404) 877-1500
Telecopier: (404) 888-8998
<PAGE>
PNC BANK, NATIONAL ASSOCIATION
By /s/ Judy B. Land
Title: Vice President
Initial Revolving Credit
Committed Amount: $9,000,000
Commitment Percentage: 22.5%
Address for Notices:
1 Garret Mountain Plaza
4th Floor
West Patterson, New Jersey 07424
Attn: Karen Voight
Judy Land
Telephone: (973) 881-5231
Telecopier: (973) 881-5234
<PAGE>
SUNTRUST BANK, ATLANTA
By /s/ W. David Wisdom
Title: Vice PResident
Initial Revolving Credit
Committed Amount: $6,000,000
Commitment Percentage: 15%
Address for Notices:
25 Park Place
21st Floor
Center 1927
Atlanta, Georgia 30383
Attn:
Telephone:
Telecopier:
<PAGE>
EXHIBIT A
to Short Term
Credit Agreement
FORM OF REVOLVING CREDIT NOTE
Revolving Credit Note
$________________ Pittsburgh, Pennsylvania
__________, 1999
FOR VALUE RECEIVED, the undersigned, [NAME OF BORROWER], a
corporation (the "Borrower"), promises to pay to the
order of [NAME OF THE LENDER] (the
"Lender") on or before the Maturity Date (as defined in the Agreement referred
to below), and at such earlier dates as may be required by such Agreement, the
lesser of (i) the principal sum of___________ ($_______ ) or (ii) the aggregate
unpaid principal amount of all Revolving Credit Loans made by the Lender to the
Borrower from time to time pursuant to the Agreement. The Borrower further
promises to pay to the order of the Lender interest on the unpaid principal
amount hereof from time to time outstanding at the rate or rates per annum
determined pursuant to the Agreement, payable on the dates set forth in the
Agreement.
This Note is one of the "Revolving Credit Notes" as referred
to in, and is entitled to the benefits of, the Short Term Credit Agreement,
dated as of December 20, 1999 by and among the Borrower, the other Borrowers
party thereto from time to time, the Lenders party thereto from time to time and
Mellon Bank, N.A., as Agent (as the same may be amended, modified or
supplemented from time to time, the "Agreement"), which among other things
provides for the acceleration of the maturity hereof upon the occurrence of
certain events and for prepayments in certain circumstances and upon certain
terms and conditions. Terms defined in the Agreement have the same meanings
herein.
The Borrower hereby expressly waives presentment, demand,
notice, protest and all other demands and notices in connection with the
delivery, acceptance, performance, default or enforcement of this Note and the
Agreement, and an action for amounts due hereunder or thereunder shall
immediately accrue.
This Note shall be governed by, construed and enforced in
accordance with the laws of the State of New York, without regard to principles
of conflicts of law.
[NAME OF BORROWER]
By
Name:
Title:
<PAGE>
EXHIBIT B
to Short Term
Credit Agreement
FORM OF OPINION OF COUNSEL
Letterhead of Associate General Counsel of Curtiss-Wright Corporation
December 20, 1999
Mellon Bank, N.A., as Agent
for the Lenders identified on Annex 1 hereto
Re: Credit Agreement dated as of December 20, 1999 by and
among Curtiss-Wright Corporation, the Subsidiary
Borrowers parties thereto from time to time, the
Lenders parties thereto from time to time, the
Issuing Banks referred to therein, Mellon Bank, N.A.,
as Agent, The Bank of Nova Scotia, New York Branch,
as Syndication Agent and PNC Bank, National
Association, as Documentation Agent
Short Term Credit Agreement dated as of December 20,
1999 by and among Curtiss-Wright Corporation, the
Subsidiary Borrowers parties thereto from time to
time, the Lenders parties thereto from time to time,
Mellon Bank, N.A., as Agent, The Bank of Nova Scotia,
New York Branch, as Syndication Agent and PNC Bank,
National Association, as Documentation Agent
Gentlemen:
I am the Associate General Counsel of Curtiss-Wright
Corporation, a Delaware corporation ("Curtiss-Wright") and, in such capacity, I
am delivering this opinion to the Agent and the Lenders in connection with the
above referenced Credit Agreement and Short Term Credit Agreement and the Loan
Documents (as defined in the Credit Agreement and the Short Term Credit
Agreement) to which Curtiss-Wright or any Subsidiary Borrower is a party.
Capitalized terms used in this opinion and not otherwise defined herein shall
have the meanings given them by that certain Credit Agreement. Capitalized terms
which are defined in the Credit Agreement and which are not otherwise defined in
this letter shall have the meanings ascribed to them in the Credit Agreement,
unless the context clearly requires otherwise. This opinion is being rendered
pursuant to Section 5.01(b) of the Credit Agreement.
In rendering this opinion, I or lawyers acting under my
supervision have examined originals or copies, certified or otherwise identified
to the satisfaction of such lawyers, of such documents, corporate records,
certificates of public officials and of officers of the Curtiss-Wright and the
Subsidiary Borrowers (collectively, the "Borrower Entities") 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. We have
examined, among other documents, the following documents:
(i) the Articles of Incorporation and Bylaws of
each of the Borrower Entities;
(ii) certificates dated [date] of the Secretary of
State of [identify jurisdictions] certifying as to
the good standing of each of the Borrower Entities
in their respective jurisdictions of organization;
(iii) counterparts executed by the Borrower
Entities of each of the Loan Documents to which
such Borrower Entities are parties.
With your permission, we have assumed without any independent
investigation (a) that each party to the Loan Documents (other than the Borrower
Entities) (i) is duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation; (ii) is duly authorized to
execute and deliver the Loan Documents and to consummate the transactions
contemplated by such Loan Documents; and (iii) has the full power and authority
to enter into the same for the purposes set forth therein; (b) that the Loan
Documents have been duly executed and delivered by each of the parties thereto
(other than the Borrower Entities), are in full force and effect with respect to
such parties and are the legal, valid and binding obligations of such parties,
enforceable against such parties (other than the Borrower Entities) in
accordance with the terms thereof; and (c) in respect of all documents and
instruments which were submitted to us, the capacity of natural persons, the
genuineness of all signatures (other than those of representatives of the
Borrower Entities on documents on which an opinion is expressed herein), the
authenticity of all documents and instruments submitted to us as originals, the
conformity to the originals of all documents and instruments submitted to us as
copies and the execution of all documents and instruments in the form of such
documents and instruments submitted to us in execution form.
Upon the basis of and subject to the foregoing and subject to
the exceptions, limitations, assumptions and qualifications set forth below, I
am of the opinion that:
1. Each Borrower Entity is a corporation duly organized,
existing and in good standing under the laws of its state of incorporation, has
the corporate power and authority to enter into, deliver and perform under and
pursuant to the Loan Documents to which it is a party, to own its property and
to carry on its business as it is now conducted, and is duly qualified to do
business in each jurisdiction where the character of the property owned by it
therein or in which the transaction of its business makes such qualification
necessary, except where the failure to so qualify would not have a material
adverse effect on the assets, business, operations or financial condition of
such Borrower Entity.
2. The execution, delivery and performance by each Borrower
Entity of the Credit Agreement, the Short Term Credit Agreement and the other
Loan Documents to which it is a party has been duly authorized by all necessary
corporate action. The execution and delivery by the Borrower Entities of the
foregoing documents, the making of the borrowings contemplated by the Credit
Agreement and the Short Term Credit Agreement, the execution, delivery and
issuance of the Notes by the Borrower Entities pursuant to the Credit Agreement
and the Short Term Credit Agreement to evidence such borrowings and the
performance of the Borrower Entities under the Loan Documents require no (i)
approval of any official body or (ii) approval of any other third party.
3. The Credit Agreement, the Short Term Credit Agreement and
the other Loan Documents to which the Borrower is a party have been duly and
validly executed and delivered by the Borrower and constitute valid, legal and
binding obligations of the Borrower enforceable in accordance with their
respective terms.
4. The execution and delivery of the Credit Agreement, the
Short Term Credit Agreement and the other Loan Documents by each Borrower
Entity, the consummation of the transactions therein contemplated, and
compliance with the terms and provisions thereof (a) will not conflict with or
result in any breach of the terms and conditions of the Articles of
Incorporation or Bylaws of such Borrower Entity or of any law or regulation, and
(b) to the best of my knowledge, after due inquiry, will not conflict with or
result in any breach of the terms and conditions of any order, writ, injunction
or decree of any court or governmental instrumentality or of any agreement or
instrument to which such Borrower Entity is bound or to which such Borrower
Entity is subject, or constitute a default thereunder.
The foregoing opinions are subject to the following
exceptions, limitations, assumptions and qualifications:
A. Our opinions are subject to the effect of bankruptcy,
insolvency, fraudulent conveyance and transfer and other laws of general
application relating to or affecting the enforcement of creditors rights and of
general principles of equity, judicial discretion and general requirements of
good faith, fair dealing and commercial reasonableness (regardless of whether
relief is sought in an action at law or in equity).
B. Our opinions are further subject to public policy
considerations which may limit the rights of the Agent or the Lenders to obtain
certain remedies and to indemnifications, but should not make the remedies
provided in the Loan Documents inadequate for the practical realization of the
benefits intended thereby.
C. This opinion is furnished solely for your benefit in
connection with the transactions contemplated by the Credit Agreement, the Short
Term Credit Agreement and the other Loan Documents. You may not rely on this
opinion for any other purpose, and no other person may rely on this opinion for
any purpose without the express written consent of the undersigned. This opinion
is limited to the matters set forth herein, and no opinion may be inferred or
implied beyond the matters expressly stated in this letter.
Very truly yours,
<PAGE>
Annex I
Mellon Bank, N.A.
Scotiabanc Inc.
PNC Bank, National Association
SunTrust Bank, Atlanta
European American Bank
<PAGE>
EXHIBIT C
to Short Term
Credit Agreement
FORM OF TRANSFER SUPPLEMENT
Transfer Supplement
THIS TRANSFER SUPPLEMENT, dated as of the date specified in
Item 1 of Schedule I hereto, among the Transferor Lender specified in Item 2 of
Schedule I hereto (the "Transferor Lender"), each Purchasing Lender specified in
Item 3 of Schedule I hereto (each a "Purchasing Lender") and Mellon Bank, N.A.,
as Agent for the Lenders under the Agreement described below.
Recitals:
A. This Transfer Supplement is being executed and delivered in
accordance with Section 8.14(c) of the Agreement, dated as of December 20, 1999,
by and among Curtiss-Wright Corporation, a Delaware corporation
("Curtiss-Wright"), the Subsidiary Borrowers party thereto from time to time
(collectively with Curtiss-Wright, the "Borrowers" and each individually a
"Borrower"), the Lenders party thereto from time to time and Mellon Bank, N.A.,
as Agent for the Lenders (as the same may be amended, modified or supplemented
from time to time, the "Agreement"). Capitalized terms used herein without
definition have the meaning specified in the Agreement.
B. Each Purchasing Lender (if it is not already a Lender)
wishes to become a Lender party to the Agreement.
C. The Transferor Lender is selling and assigning to each
Purchasing Lender, and each Purchasing Lender is purchasing and assuming, a
certain portion of the Transferor Lender's rights and obligations under the
Agreement, including, without limitation, the Transferor Lender's Commitments
and Loans owing to it and any Notes held by it (the "Transferor Lender's
Interests").
NOW, THEREFORE, the parties hereto, intending to be legally
bound, hereby agree as follows:
Section 1. Transfer Effective Notice. Upon receipt by the
Agent of five counterparts of this Transfer Supplement (to each of which is
attached a fully completed Schedule I and Schedule II), and each of which has
been executed by the Transferor Lender, by each Purchasing Lender and by any
other Person required by Section 8.14(c) of the Agreement to execute this
Transfer Supplement, the Agent will transmit to Curtiss-Wright, the Transferor
Lender and each Purchasing Lender a transfer effective notice, substantially in
the form of Schedule III to this Transfer Supplement (a "Transfer Effective
Notice"). The date specified in such Transfer Effective Notice as the date on
which the transfer effected by this Transfer Supplement shall become effective
(the "Transfer Effective Date") shall be the fifth Business Day following the
date of such Transfer Effective Notice or such other date as shall be agreed
upon among the Transferor Lender, the Purchasing Lender, the Agent and
Curtiss-Wright. From and after the close of business at the Agent's Office on
the Transfer Effective Date each Purchasing Lender (if not already a Lender
party to the Agreement) shall be a Lender party to the Agreement for all
purposes thereof having the respective interests in the Transferor Lender's
interests reflected in this Transfer Supplement.
Section 2. Purchase Price; Sale. At or before 12:00 Noon,
local time at the Transferor Lender's office specified in Schedule II, on the
Transfer Effective Date, each Purchasing Lender shall pay to the Transferor
Lender, in immediately available funds, an amount equal to the purchase price,
as agreed between the Transferor Lender and such Purchasing Lender (the
"Purchase Price"), of the portion being purchased by such Purchasing Lender
(such Purchasing Lender's "Purchased Percentage") of the Transferor Lender's
Interests. Effective upon receipt by the Transferor Lender of the Purchase Price
from a Purchasing Lender, the Transferor Lender hereby irrevocably sells,
assigns and transfers to such Purchasing Lender, without recourse,
representation or warranty (express or implied) except as set forth in Section 6
hereof, and each Purchasing Lender hereby irrevocably purchases, takes and
assumes from the Transferor Lender such Purchasing Lender's Purchased Percentage
of the Transferor Lender's Interests. The Transferor Lender shall promptly
notify the Agent of the receipt of the Purchase Price from a Purchasing Lender
("Purchase Price Receipt Notice"). Upon receipt by the Agent of such Purchase
Price Receipt Notice, the Agent shall record in the Register the information
with respect to such sale and purchase as contemplated by Section 8.14(d) of the
Agreement.
Section 3. Principal, Interest and Fees. All principal
payments, interest, fees and other amounts that would otherwise be payable under
the Loan Documents from and after the Transfer Effective Date to or for the
account of the Transferor Lender in respect of the Transferor Lender's Interests
shall, instead, be payable to or for the account of the Transferor Lender and
the Purchasing Lenders, as the case may be, in accordance with their respective
interests as reflected in this Transfer Supplement.
Section 4. Closing Documents. Concurrently with the execution
and delivery hereof, the Transferor Lender will request that Curtiss-Wright
provide to each Purchasing Lender (if it is not already a Lender party to the
Agreement) conformed copies of all Loan Documents delivered to such Transferor
Lender on the Closing Date in satisfaction of conditions precedent set forth in
the Agreement.
Section 5. Further Assurances. Each of the parties to this
Transfer Supplement agrees that at any time and from time to time upon the
written request of any other party, it will execute and deliver such further
documents and do such further acts and things as such other party may reasonably
request in order to effect the purposes of this Transfer Supplement.
Section 6. Certain Representations and Agreements. By
executing and delivering this Transfer Supplement, the Transferor Lender and
each Purchasing Lender confirm to and agree with each other and the Agent and
the Lenders as follows:
(a) Other than the representation and warranty that it is the
legal and beneficial owner of the interest being assigned hereby free
and clear of any adverse claim, the Transferor Lender makes no
representation or warranty and assumes no responsibility with respect
to (i) the execution, delivery, effectiveness, enforceability,
genuineness, validity or adequacy of the Agreement or any other Loan
Document, (ii) any recital, representation, warranty, document,
certificate, report or statement in, provided for in, received under or
in connection with, the Agreement or any other Loan Document, or (iii)
the existence, validity, enforceability, perfection, recordation,
priority, adequacy or value, now or hereafter, of any Lien or other
direct or indirect security afforded or purported to be afforded by any
of the Loan Documents or otherwise from time to time.
(b) The Transferor Lender makes no representation or warranty
and assumes no responsibility with respect to (i) the performance or
observance of any of the terms or conditions of the Agreement or any
other Loan Document on the part of the Borrowers, (ii) the business,
operations, condition (financial or otherwise) or prospects of the
Borrowers or any other Person, or (iii) the existence of any Event of
Default or Potential Default.
(c) Each Purchasing Lender confirms that it has received a
copy of the Agreement and each of the other Loan Documents, together
with copies of the financial statements referred to in Section 4.05 of
the Credit Agreement (as defined in the Agreement), the most recent
financial statements delivered pursuant to Section 6.01 of the Credit
Agreement, if any, and such other documents and information as it has
deemed appropriate to make its own credit and legal analysis and
decision to enter into this Transfer Supplement. Each Purchasing Lender
confirms that it has made such analysis and decision independently and
without reliance upon the Agent, the Transferor Lender or any other
Lender.
(d) Each Purchasing Lender, independently and without reliance
upon the Agent, the Transferor Lender or any other Lender, and based on
such documents and information as it shall deem appropriate at the
time, will make its own decisions to take or not take action under or
in connection with the Agreement or any other Loan Document.
(e) Each Purchasing Lender that is not a Lender and that is
not chartered under the laws of the United States or a state thereof
shall provide Curtiss-Wright and the Agent with any documentation
either of them may reasonably request pertaining to withholding taxes
and backup withholding.
(f) Each Purchasing Lender irrevocably appoints the Agent to
act as Agent for such Purchasing Lender under the Agreement and the
other Loan Documents, all in accordance with Article VII of the
Agreement and the other provisions of the Agreement and the other Loan
Documents.
(g) Each Purchasing Lender agrees that it will perform in
accordance with their terms all of the obligations which by the terms
of the Agreement and the other Loan Documents are required to be
performed by it as a Lender.
Section 7. Schedule II. Schedule II hereto sets forth the
revised Commitments of the Transferor Lender and each Purchasing Lender as well
as administrative information with respect to each Purchasing Lender.
Section 8. Governing Law. This Transfer Supplement shall be
governed by, construed and enforced in accordance with the laws of the State of
New York, without regard to principles of conflicts of law.
Section 9. Counterparts. This Transfer Supplement may be
executed on any number of counterparts and by the different parties hereto on
separate counterparts each of which, when so executed, shall be deemed an
original, but all such counterparts shall constitute but one and the same
instrument.
IN WITNESS WHEREOF, the parties hereto have caused this
Transfer Supplement to be executed by their respective duly authorized officers
on Schedule I hereto as of the date set forth in Item 1 of Schedule I hereto.
<PAGE>
SCHEDULE I
To Transfer Supplement
COMPLETION OF INFORMATION AND
SIGNATURES FOR TRANSFER SUPPLEMENT
Re: Short Term Credit Agreement, dated as of December 20, 1999, by and
among Curtiss-Wright Corporation, a Delaware corporation
("Curtiss-Wright"), the Subsidiary Borrowers party thereto from time to
time (collectively with Curtiss-Wright, the "Borrowers" and each
individually a "Borrower") the Lenders party thereto from time to time
and Mellon Bank, N.A., as Agent for the Lenders (as amended, modified
or supplemented from time to time, the "Agreement")
Item 1 (Date of Transfer [INSERT DATE OF
Supplement): TRANSFER SUPPLEMENT]
Item 2 (Transferor Lender): [INSERT NAME OF TRANSFEROR
LENDER]
Item 3 (Purchasing Lender[s]): [INSERT NAME[S] OF
PURCHASING LENDER[S]]
Item 4 (Signatures of Parties
to Transfer Supplement):
[NAME OF TRANSFEROR LENDER]
as Transferor Lender
By:
Name:
Title:
[NAME OF PURCHASING LENDER]
as Purchasing Lender
By:
Name:
Title:
[NAME OF PURCHASING LENDER]
as Purchasing Lender
By:
Name:
Title:
[Following consents required only
when Purchasing Lender is not a Lender]
<PAGE>
CONSENTED TO AND ACKNOWLEDGED:
MELLON BANK, N.A., as Agent
By:
Name:
Title:
CONSENTED TO AND ACKNOWLEDGED:
CURTISS-WRIGHT CORPORATION
By:
Name:
Title:
ACCEPTED FOR RECORDATION
IN REGISTER:
MELLON BANK, N.A., as Agent
By:
Name:
Title:
<PAGE>
SCHEDULE II
to Transfer Supplement
LIST OF LENDING OFFICES, ADDRESSES
FOR NOTICES AND COMMITTED AMOUNTS
[NAME OF TRANSFEROR
LENDER, LENDING
OFFICE AND ADDRESS] Revised Commitment and Loan Amounts:
Revolving Credit
Committed Amount $_______
Commitment Percentage of
Revolving Credit Commitment: ______%
[NAME OF PURCHASING
LENDER] New Commitment and Loan Amounts:
Revolving Credit
Committed Amount $______
Commitment Percentage of
Revolving Credit Commitment: _____%
Administrative Information
for Purchasing Lender:
Address:
Attention:
Telephone:
Telecopier:
<PAGE>
SCHEDULE III
to Transfer Supplement
Transfer Effective Notice
To: Curtiss-Wright Corporation
[INSERT NAME OF TRANSFEROR
LENDER AND EACH PURCHASING LENDER]
The undersigned, as Agent under the Short Term Credit
Agreement, dated as of December 20, 1999, by and among Curtiss-Wright
Corporation, a Delaware corporation ("Curtiss-Wright"), the Subsidiary Borrowers
party thereto from time to time (collectively with Curtiss-Wright, the
"Borrowers" and each individually a "Borrower"), the Lenders party thereto from
time to time and Mellon Bank, N.A., as Agent for the Lenders (as the same may be
amended, modified or supplemented from time to time, the "Credit Agreement"),
acknowledges receipt of five executed counterparts of a completed Transfer
Supplement, dated ______, from [NAME OF TRANSFEROR LENDER] to [NAME OF EACH
PURCHASING LENDER] (the "Transfer Supplement"). Terms defined in the Transfer
Supplement are used herein as therein defined.
1. Pursuant to the Transfer Supplement, you are advised that
the Transfer Effective Date will be______, ____. [INSERT FIFTH BUSINESS DAY
FOLLOWING DATE OF TRANSFER EFFECTIVE NOTICE OR OTHER DATE AGREED TO AMONG THE
TRANSFEROR LENDER, THE PURCHASING LENDER, THE AGENT AND CURTISS-WRIGHT.]
2. Pursuant to Section 8.14(c) of the Credit Agreement, the
Transferor Lender has delivered to the Agent the Transferor Lender Notes.
3. Section 8.14(c) of the Credit Agreement provides that the
Borrowers are to deliver to the Agent on or before the Transfer Effective Date
the following Notes, each dated the date of the Note it replaces, and the
replaced Notes shall be marked cancelled and returned to the Borrowers.
[DESCRIBE EACH NEW REVOLVING CREDIT NOTE AND/OR SUBSIDIARY
NOTE FOR TRANSFEROR LENDER AND PURCHASING LENDER AS TO DATE (AS REQUIRED BY THE
CREDIT AGREEMENT), PRINCIPAL AMOUNT AND PAYEE.]
4. The Transfer Supplement provides that each Purchasing
Lender is to pay its Purchase Price to the Transferor Lender at or before 12:00
Noon, local time at the Transferor Lender's lending office specified in Schedule
II to the Transfer Supplement, on the Transfer Effective Date in immediately
available funds.
Very truly yours,
MELLON BANK, N.A., as Agent
By:
Name:
Title:
<PAGE>
EXHIBIT D
to Short Term
Credit Agreement
FORM OF CURTISS-WRIGHT GUARANTY
GUARANTY AND SURETYSHIP AGREEMENT
THIS GUARANTY AND SURETYSHIP AGREEMENT (this "Guaranty") dated
as of the 20th day of December, 1999, made by CURTISS-WRIGHT CORPORATION, a
Delaware corporation ("Guarantor"), to the lenders parties hereto from time to
time (the "Lenders", as defined further below) and MELLON BANK, N.A., a national
banking association, as agent for the Lenders (in such capacity, together with
its successors in such capacity, the "Agent").
W I T N E S S E T H:
WHEREAS, Guarantor, the Subsidiary Borrowers, the Lenders and
the Agent are parties to a Short Term Credit Agreement, dated as of December 20,
1999 (as amended, the "Credit Agreement"); and
WHEREAS, pursuant to the terms of the Credit Agreement,
Lenders may make certain Loans to one or more Subsidiaries of Guarantor (each, a
"Borrower"), as evidenced in part by certain promissory notes of each such
Borrower to each Lender dated of even date herewith (collectively, the "Note");
and
WHEREAS, the execution and delivery by Guarantor of this
Guaranty is a condition to Lenders' obligation to make Loans to any Borrower,
and Guarantor, as owner, directly or indirectly, of all of the outstanding
shares of stock of each Borrower, expects to derive a financial benefit from the
making of such Loans.
NOW, THEREFORE, in consideration of the premises and other
good and valuable consideration, the receipt of which is hereby acknowledged by
Guarantor, and intending to be legally bound, Guarantor hereby agrees as
follows:
ARTICLE I
DEFINITIONS
1.1 Definitions.
(a) Certain Definitions. Capitalized terms not otherwise defined herein shall
have the meanings given in the Credit Agreement. In addition to the other terms
defined elsewhere in this Agreement, as used herein the following terms shall
have the following meanings:
"Guaranteed Obligations" shall mean all obligations from time
to time of the Borrowers to the Agent or any Lender under or in
connection with any Loan Document, including all obligations to pay
principal, interest, fees, indemnities or other amounts under such Loan
Documents, in each case whether such obligations are direct or
indirect, secured or unsecured, joint or several, absolute or
contingent, due or to become due, whether for payment or performance,
now existing or hereafter arising (including interest and other
obligations arising or accruing after the commencement of any
bankruptcy, insolvency, reorganization, dissolution or similar
proceeding with respect to any Borrower or any other Person, or which
would have arisen or accrued but for the commencement of such
proceeding, even if such obligation or the claim therefor is not
enforceable or allowable in such proceeding).
ARTICLE II
GUARANTY AND SURETYSHIP
2.1. Guaranty and Suretyship. The Guarantor hereby absolutely,
unconditionally and irrevocably guarantees and becomes surety for the full and
punctual payment and performance of the Guaranteed Obligations as and when such
payment or performance shall become due (at scheduled maturity, by acceleration
or otherwise) in accordance with the terms of the Loan Documents. This Agreement
is an agreement of suretyship as well as of guaranty, is a guarantee of payment
and performance and not merely of collectibility, and is in no way conditioned
upon any attempt to collect from or proceed against any Borrower or any other
Person or any other event or circumstance. The obligations of the Guarantor
under this Agreement are direct and primary obligations of the Guarantor and are
independent of the Guaranteed Obligations, and a separate action or actions may
be brought against the Guarantor regardless of whether action is brought against
any Borrower or any other Person or whether such Borrower or any other Person is
joined in any such action or actions.
2.2. Obligations Absolute. The Guarantor agrees that the
Guaranteed Obligations will be paid and performed strictly in accordance with
the terms of the Loan Documents, regardless of any law, regulation or order now
or hereafter in effect in any jurisdiction affecting the Guaranteed Obligations,
any of the terms of the Loan Documents or the rights of the Agent or any Lender
or any other Person with respect thereto. The obligations of the Guarantor under
this Agreement shall be absolute, unconditional and irrevocable, irrespective of
any of the following:
(a) any lack of legality, validity, enforceability,
allowability (in a bankruptcy, insolvency, reorganization, dissolution
or similar proceeding, or otherwise), or any avoidance or
subordination, in whole or in part, of any Loan Document or any of the
Guaranteed Obligations;
(b) any change in the amount, nature, time, place or manner of
payment or performance of, or in any other term of, any of the
Guaranteed Obligations (whether or not such change is contemplated by
the Loan Documents as presently constituted, and specifically including
any increase in the Guaranteed Obligations, whether resulting from the
extension of additional credit to any Borrower or otherwise), any
execution of any additional Loan Documents, or any amendment or waiver
of or any consent to departure from any Loan Document;
(c) any taking, exchange, release, impairment or nonperfection
of any collateral, or any taking, release, impairment or amendment or
waiver of or consent to departure from any other guaranty or other
direct or indirect security for any of the Guaranteed Obligations;
(d) any manner of application of collateral or other direct or
indirect security for any of the Guaranteed Obligations, or proceeds
thereof, to any of the Guaranteed Obligations, or any commercially
reasonable manner of sale or other disposition of any collateral for
any of the Guaranteed Obligations or any other assets of any Borrower;
(e) any permanent impairment by any Lender or any other Person
of any recourse of the Guarantor against any Borrower or any other
Person, or any other permanent impairment by any Lender or any other
Person of the suretyship status of the Guarantor;
(f) any bankruptcy, insolvency, reorganization, dissolution or
similar proceedings with respect to, or any change, restructuring or
termination of the corporate structure or existence of, any Borrower,
the Guarantor or any other Person; or
(g) any failure of any Lender or any other Person to disclose
to the Guarantor any information pertaining to the business,
operations, condition (financial or other) or prospects of any Borrower
or any other Person, or to give any other notice, disclosure or demand.
2.3. Waivers, etc. The Guarantor hereby irrevocably waives any
defense to or limitation on its obligations under this Agreement arising out of
or based upon any matter referred to in Section 2.2 and, without limiting the
generality of the foregoing, any requirement of promptness, diligence or notice
of acceptance, any other notice, disclosure or demand with respect to any of the
Guaranteed Obligations and this Agreement, any requirement of acceptance hereof,
reliance hereon or knowledge hereof by the Agent or any Lender, and any
requirement that the Agent or any Lender protect, secure, perfect or insure any
lien or any property subject thereto or exhaust any right or take any action
against any Borrower or any other Person or any collateral or other direct or
indirect security for any of the Guaranteed Obligations. Notwithstanding the
foregoing sentence, the Guarantor's waiver under this Section 2.3 shall apply
only to the Guarantor's obligations hereunder and shall not limit or waive any
of the Guarantor's rights or obligations as a borrower under the Credit
Agreement.
2.4. Reinstatement. This Agreement shall continue to be
effective, or be automatically reinstated, as the case may be, if at any time
payment of any of the Guaranteed Obligations is avoided, rescinded or must
otherwise be returned by the Agent or any Lender for any reason, all as though
such payment had not been made.
2.5. No Stay. Without limiting the generality of any other
provision of this Agreement, if any acceleration of the time for payment or
performance of any Guaranteed Obligation, or any condition to any such
acceleration, shall at any time be stayed, enjoined or prevented for any reason
(including stay or injunction resulting from the pendency against any Borrower
or any other Person of a bankruptcy, insolvency, reorganization, dissolution or
similar proceeding), the Guarantor agrees that, for purposes of this Agreement
and its obligations hereunder, at the option of the Agent such Guaranteed
Obligation shall be deemed to have been accelerated and such condition to
acceleration shall be deemed to have been met.
2.6. Payments. All payments to be made by the Guarantor
pursuant to this Agreement shall be made at the times and in the manner
prescribed for payments in Article II of the Credit Agreement, without setoff,
counterclaim, withholding or other deduction of any nature. All payments made by
the Guarantor pursuant to this Agreement may be applied to the Guaranteed
Obligations and all other amounts payable under this Agreement in such order as
the Agent may elect.
2.7. Subrogation, Etc. Any rights which the Guarantor may have
or acquire by way of subrogation, reimbursement, restitution, exoneration,
contribution or indemnity, and any similar rights (whether arising by operation
of law, by agreement or otherwise), against any Borrower arising from the
existence, payment, performance or enforcement of any of the obligations of the
Guarantor under or in connection with this Agreement, shall be subordinate in
right of payment to the Guaranteed Obligations, and the Guarantor shall not
exercise any such rights until all Guaranteed Obligations and all other
obligations under this Agreement have been paid in cash or in such other manner
as may be acceptable to the Agent and performed in full and all commitments to
extend credit under the Loan Documents shall have terminated. If,
notwithstanding the foregoing, any amount shall be received by the Guarantor on
account of any such rights at any time prior to the time at which all Guaranteed
Obligations and all other obligations under this Agreement shall have been paid
in cash or in such other manner as may be acceptable to the Agent and performed
in full and all commitments to extend credit under the Loan Documents shall have
terminated, such amount shall be held by the Guarantor in trust for the benefit
of the Lenders, segregated from other funds held by the Guarantor, and shall be
forthwith delivered to Agent for the benefit of the Lenders in the exact form
received by the Guarantor (with any necessary endorsement), to be applied to the
Guaranteed Obligations, whether matured or unmatured, in such order as the Agent
may elect, or to be held by the Agent as security for the Guaranteed Obligations
and disposed of by the Agent in any lawful manner, all as the Agent may elect.
2.8. Continuing Agreement. This Agreement is a continuing
guaranty and shall continue in full force and effect until all Guaranteed
Obligations and all other amounts payable under this Agreement have been paid in
cash or such other manner as may be acceptable to the Agent and performed in
full, and all commitments to extend credit under the Loan Documents have
terminated, subject in any event to reinstatement in accordance with Section
2.4. Without limiting the generality of the foregoing, the Guarantor hereby
irrevocably waives any right to terminate or revoke this Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
The Guarantor hereby represents and warrants to the Agent and
the Lenders as follows:
3.1. Credit Agreement. The provisions of Article III of the
Credit Agreement are hereby incorporated by reference (together with all related
definitions and cross references). The Guarantor hereby represents and warrants
to the Agent and the Lenders as provided therein.
3.2. Representations and Warranties Remade at Each Extension
of Credit. Each request (including any deemed request) by any Borrower for any
extension of credit under any Loan Document shall be deemed to constitute a
representation and warranty by the Guarantor to the Agent and the Lenders that
the representations and warranties made by the Guarantor in this Article III are
true and correct on and as of the date of such request with the same effect as
though made on and as of such date. Failure by the Agent to receive notice from
the Guarantor to the contrary before the Lenders make any extension of credit
under any Loan Document shall constitute a further representation and warranty
by the Guarantor to the Agent and the Lenders that the representations and
warranties made by the Guarantor in this Article III are true and correct on and
as of the date of such extension of credit with the same effect as though made
on and as of such date.
ARTICLE IV
COVENANTS
4.1. Covenants Generally. Reference is hereby made to the
provisions of Article V of the Credit Agreement (together with all related
definitions and cross-references). To the extent such provisions impose upon any
Borrower a duty to cause the Guarantor (or a Subsidiary of the Guarantor) to do
or refrain from doing certain acts or things or to meet or refrain from meeting
certain conditions, the Guarantor shall (or shall cause such Subsidiary of the
Guarantor to, as the case may be) do or refrain from doing such acts or things,
or meet or refrain from meeting such conditions, as the case may be.
ARTICLE V
MISCELLANEOUS
5.1. Amendments, etc. No amendment to or waiver of any
provision of this Agreement, and no consent to any departure by the Guarantor
herefrom, shall in any event be effective unless in a writing manually signed by
or on behalf of each Lender. Any such waiver or consent shall be effective only
in the specific instance and for the specific purpose for which given.
5.2. No Implied Waiver; Remedies Cumulative. No delay or
failure of the Agent or any Lender in exercising any right or remedy under this
Agreement shall operate as a waiver thereof; nor shall any single or partial
exercise of any such right or remedy preclude any other or further exercise
thereof or the exercise of any other right or remedy. The rights and remedies of
the Agent and the Lenders under this Agreement are cumulative and not exclusive
of any other rights or remedies available hereunder, under any other agreement,
at law, or otherwise.
5.3. Notices. Except to the extent, if any, otherwise
expressly provided herein, all notices and other communications (collectively,
"notices") under this Agreement shall be in writing (including facsimile
transmission) and shall be sent by certified or registered mail, by
nationally-recognized overnight courier or by personal delivery. All notices
shall be sent to the address specified in the Credit Agreement for the
applicable party, or, in any case, to such other address as shall have been
designated by the applicable party by notice to the other party hereto. Any
properly given notice shall be effective when received, except that properly
given notices to the Guarantor shall be effective at the following time, if
earlier: if given by telephone, when telephoned; if by first-class mail, three
Business Days after deposit in the mail; if by overnight courier, one Business
Day after pickup by such courier; and if by facsimile transmission, upon
transmission. The Agent and the Lenders may rely on any notice (whether or not
made in a manner contemplated by this Agreement) purportedly made by or on
behalf of the Guarantor, and Agent and the Lenders shall have no duty to verify
the identity or authority of the Person giving such notice.
5.4. Expenses. The Guarantor agrees to pay upon demand all
reasonable expenses (including reasonable fees and expenses of counsel) which
the Agent or any Lender may incur from time to time arising from or relating to
the administration of, or exercise, enforcement or preservation of rights or
remedies under, this Agreement, other than costs and expenses incurred by the
Agent or any Lender, respectively, in connection with any litigation which
results in a final, non-appealable judgment against the Agent or such Lender.
5.5. Entire Agreement. This Agreement constitutes the entire
agreement of the parties hereto with respect to the subject matter hereof and
supersedes all prior and contemporaneous understandings and agreements.
5.6. Survival. All representations and warranties of the
Guarantor contained in or made in connection with this Agreement shall survive,
and shall not be waived by, the execution and delivery of this Agreement, any
investigation by or knowledge of the Agent or any Lender, any extension of
credit, or any other event or circumstance whatever.
5.7. Counterparts. This Agreement may be executed in any
number of counterparts, including facsimile counterparts, each of which shall be
deemed an original, and all such counterparts shall constitute but one and the
same agreement.
5.8. Setoff. In the event that any obligation of the Guarantor
now or hereafter existing under this Agreement or any other Loan Document shall
have become due and payable, after an Event of Default under the Loan Documents
has occurred, each Lender shall have the right from time to time, without notice
to the Guarantor, to set off against and apply to such due and payable amount
any obligation of any nature of each Lender to the Guarantor, including all
deposits (whether time or demand, general or special, provisionally or finally
credited, however evidenced) now or hereafter maintained by the Guarantor with
the Lender. Such right shall be absolute and unconditional in all circumstances
and, without limitation, shall exist whether such obligation to the Guarantor is
absolute or contingent, matured or unmatured (it being agreed that each Lender
may deem such obligation to be then due and payable at the time of such setoff),
regardless of the offices or branches through which the parties are acting with
respect to the offset obligations, regardless of whether the offset obligations
are denominated in the same or different currencies, and regardless of the
existence or adequacy of any other direct or indirect security or any other
right or remedy available to such Lender. Nothing in this Agreement or any other
Loan Document shall be deemed a waiver of or restriction on any right of setoff
or banker's lien available to any Lender under this Section 5.8, at law or
otherwise. The Guarantor hereby agrees that any affiliate of any Lender, and any
holder of a participation in any Guaranteed Obligations of the Guarantor under
this Agreement, shall have the same rights of setoff as each Lender as provided
in this Section 5.8 (regardless of whether such affiliate or participant
otherwise would be deemed a creditor of the Guarantor).
5.9. Construction. In this Agreement, unless the context
otherwise clearly requires, references to the plural include the singular, the
singular the plural, and the part the whole; the neuter case includes the
masculine and feminine cases; and "or" is not exclusive. In this Agreement, any
references to property (or similar terms) include any interest in such property
(or other item referred to); "include," "includes," "including" and similar
terms are not limiting; and "hereof," "herein," "hereunder" and similar terms
refer to this Agreement as a whole and not to any particular provision; Section
and other headings in this Agreement, and any table of contents herein, are for
reference purposes only and shall not affect the interpretation of this
Agreement in any respect. Section and other references in this Agreement are to
this Agreement unless otherwise specified. This Agreement has been fully
negotiated between the applicable parties, each party having the benefit of
legal counsel, and accordingly neither any doctrine of construction of
guaranties or suretyships in favor of the guarantor or surety, nor any doctrine
of construction of ambiguities against the party controlling the drafting, shall
apply to this Agreement.
5.10. Successors and Assigns. This Agreement shall be binding
upon the Guarantor, its successors and assigns, and shall inure to the benefit
of and be enforceable by the Agent, the Lender and their respective successors
and assigns. Without limitation of the foregoing, the Agent or any Lender (and
any successive assignee or transferee) from time to time may assign or otherwise
transfer all or any portion of its rights or obligations under the Loan
Documents (including all or any portion of any commitment to extend credit), or
any Guaranteed Obligations, to any other Person, and such Guaranteed Obligations
(including any Guaranteed Obligations resulting from extension of credit by such
other Person under or in connection with the Loan Documents) shall be and remain
Guaranteed Obligations entitled to the benefit of this Agreement, and to the
extent of its interest in such Guaranteed Obligations such other Person shall be
vested with all the benefits in respect thereof granted to the Agent or any
Lender, as the case may be, in this Agreement or otherwise.
5.11. Certain Legal Matters.
(A) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, EXCLUSIVE OF CHOICE OF LAW
PRINCIPLES.
(B) SUBMISSION TO JURISDICTION AND VENUE; CONSENT TO SERVICE OF PROCESS;
WAIVER OF JURY TRIAL; ETC. THE GUARANTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY:
(I) AGREES THAT ANY ACTION, SUIT OR PROCEEDING BY ANY PERSON ARISING FROM
OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR ANY
STATEMENT, COURSE OF CONDUCT, ACT, OMISSION OR EVENT IN CONNECTION WITH
ANY OF THE FOREGOING (COLLECTIVELY, "RELATED LITIGATION") MAY BE
BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION SITTING
IN THE CITY OR COUNTY OF NEW YORK, NEW YORK, SUBMITS TO THE
JURISDICTION OF SUCH COURTS, AND AGREES NOT TO BRING ANY RELATED
LITIGATION IN ANY OTHER FORUM (BUT NOTHING HEREIN SHALL AFFECT THE
RIGHT OF THE AGENT OR ANY LENDER TO BRING ANY RELATED LITIGATION IN ANY
OTHER FORUM);
(II) ACKNOWLEDGES THAT SUCH COURTS WILL BE THE MOST CONVENIENT FORUM FOR ANY
RELATED LITIGATION, WAIVES ANY OBJECTION TO THE LAYING OF VENUE OF ANY
RELATED LITIGATION BROUGHT IN ANY SUCH COURT, WAIVES ANY CLAIM THAT ANY
RELATED LITIGATION BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM, AND WAIVES ANY RIGHT TO OBJECT, WITH RESPECT TO ANY
RELATED LITIGATION, THAT SUCH COURT DOES NOT HAVE JURISDICTION OVER IT;
(III) CONSENTS AND AGREES TO SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER LEGAL
PROCESS IN ANY RELATED LITIGATION BY REGISTERED OR CERTIFIED U.S. MAIL,
POSTAGE PREPAID, TO IT AT THE ADDRESS FOR NOTICES DESCRIBED IN THIS
AGREEMENT, AND CONSENTS AND AGREES THAT SUCH SERVICE SHALL CONSTITUTE
IN EVERY RESPECT VALID AND EFFECTIVE SERVICE (BUT NOTHING HEREIN SHALL
AFFECT THE VALIDITY OR EFFECTIVENESS OF PROCESS SERVED IN ANY OTHER
MANNER PERMITTED BY LAW); AND
(IV) WAIVES THE RIGHT TO TRIAL BY JURY IN ANY RELATED LITIGATION.
(C) LIMITATION OF LIABILITY. NO CLAIM MAY BE MADE BY THE GUARANTOR AGAINST THE
AGENT OR ANY LENDER OR ANY AFFILIATE, DIRECTOR, OFFICER, EMPLOYEE, ATTORNEY OR
AGENT OF THE AGENT OR ANY LENDER FOR ANY SPECIAL, INDIRECT, CONSEQUENTIAL OR
PUNITIVE DAMAGES IN RESPECT OF ANY CLAIM ARISING FROM OR RELATING TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT OR ANY STATEMENT, COURSE OF CONDUCT, ACT,
OMISSION OR EVENT IN CONNECTION WITH ANY OF THE FOREGOING (WHETHER BASED ON
BREACH OF CONTRACT, TORT OR ANY OTHER THEORY OF LIABILITY); AND THE GUARANTOR
HEREBY WAIVES, RELEASES AND AGREES NOT TO SUE UPON ANY CLAIM FOR ANY SUCH
DAMAGES, WHETHER OR NOT ACCRUED AND WHETHER OR NOT KNOWN OR SUSPECTED TO EXIST.
THE GUARANTOR ACKNOWLEDGES THAT IT HAS BEEN REPRESENTED BY LEGAL COUNSEL IN
CONNECTION WITH THE EXECUTION AND DELIVERY OF THIS AGREEMENT AND THAT IT
UNDERSTANDS THE PROVISIONS OF THIS AGREEMENT.
IN WITNESS WHEREOF, the Guarantor has executed and delivered
this Agreement as of the date first above written.
CURTISS-WRIGHT CORPORATION
By
Name:
Title:
<PAGE>
EXHIBIT E
to Short Term
Credit Agreement
FORM OF SUBSIDIARY GUARANTY
GUARANTY AND SURETYSHIP AGREEMENT
THIS GUARANTY AND SURETYSHIP AGREEMENT (this "Guaranty") dated
as of the 20th day of December, 1999, made by [NAME OF SUBSIDIARY], a __________
corporation ("Guarantor"), to the lenders parties hereto from time to time (the
"Lenders", as defined further below) and MELLON BANK, N.A., a national banking
association, as agent for the Lenders (in such capacity, together with its
successors in such capacity, the "Agent").
W I T N E S S E T H:
WHEREAS, Curtiss-Wright Corporation, a Delaware corporation
("Curtiss-Wright") and the Subsidiary Borrowers party thereto from time to time
(collectively with Curtiss-Wright, the "Borrowers" and each individually a
"Borrower") have entered into a Credit Agreement of even date herewith with the
Lenders parties thereto from time to time and Mellon Bank, N.A., as Agent (as
amended, modified or supplemented from time to time, the "Credit Agreement");
and
WHEREAS, the Guarantor will derive substantial direct and
indirect benefit from the transactions contemplated by the Credit Agreement, and
the Guarantor may receive extensions of credit under the Credit Agreement from
time to time; and
WHEREAS, it is a condition precedent to the extension of
credit under the Credit Agreement that the Guarantor execute and deliver this
Agreement; and
WHEREAS, this Agreement, among other things, is made by the
Guarantor to induce the Lenders to enter into the Loan Documents (as defined in
the Credit Agreement) and to induce the Lenders to extend credit under the
Credit Agreement;
NOW, THEREFORE, in consideration of the premises and other
good and valuable consideration, the receipt of which is hereby acknowledged by
Guarantor, and intending to be legally bound, Guarantor hereby agrees as
follows:
ARTICLE I
DEFINITIONS
1.1 Definitions.
(a) Certain Definitions. Capitalized terms not otherwise
defined herein shall have the meanings given in the Credit Agreement. In
addition to the other terms defined elsewhere in this Agreement, as used herein
the following terms shall have the following meanings:
"Guaranteed Obligations" shall mean all obligations from time
to time of the Borrowers to the Agent or any Lender under or in
connection with any Loan Document, including all obligations to pay
principal, interest, fees, indemnities or other amounts under such Loan
Documents, in each case whether such obligations are direct or
indirect, secured or unsecured, joint or several, absolute or
contingent, due or to become due, whether for payment or performance,
now existing or hereafter arising (including interest and other
obligations arising or accruing after the commencement of any
bankruptcy, insolvency, reorganization, dissolution or similar
proceeding with respect to any Borrower or any other Person, or which
would have arisen or accrued but for the commencement of such
proceeding, even if such obligation or the claim therefor is not
enforceable or allowable in such proceeding).
ARTICLE II
GUARANTY AND SURETYSHIP
2.1. Guaranty and Suretyship. The Guarantor hereby absolutely,
unconditionally and irrevocably guarantees and becomes surety for the full and
punctual payment and performance of the Guaranteed Obligations as and when such
payment or performance shall become due (at scheduled maturity, by acceleration
or otherwise) in accordance with the terms of the Loan Documents. This Agreement
is an agreement of suretyship as well as of guaranty, is a guarantee of payment
and performance and not merely of collectibility, and is in no way conditioned
upon any attempt to collect from or proceed against any Borrower or any other
Person or any other event or circumstance. The obligations of the Guarantor
under this Agreement are direct and primary obligations of the Guarantor and are
independent of the Guaranteed Obligations, and a separate action or actions may
be brought against the Guarantor regardless of whether action is brought against
any Borrower or any other Person or whether such Borrower or any other Person is
joined in any such action or actions.
2.2. Obligations Absolute. The Guarantor agrees that the
Guaranteed Obligations will be paid and performed strictly in accordance with
the terms of the Loan Documents, regardless of any law, regulation or order now
or hereafter in effect in any jurisdiction affecting the Guaranteed Obligations,
any of the terms of the Loan Documents or the rights of the Agent or any Lender
or any other Person with respect thereto. The obligations of the Guarantor under
this Agreement shall be absolute, unconditional and irrevocable, irrespective of
any of the following:
(a) any lack of legality, validity, enforceability,
allowability (in a bankruptcy, insolvency, reorganization, dissolution
or similar proceeding, or otherwise), or any avoidance or
subordination, in whole or in part, of any Loan Document or any of the
Guaranteed Obligations;
(b) any change in the amount, nature, time, place or manner of
payment or performance of, or in any other term of, any of the
Guaranteed Obligations (whether or not such change is contemplated by
the Loan Documents as presently constituted, and specifically including
any increase in the Guaranteed Obligations, whether resulting from the
extension of additional credit to any Borrower or otherwise), any
execution of any additional Loan Documents, or any amendment or waiver
of or any consent to departure from any Loan Document;
(c) any taking, exchange, release, impairment or nonperfection
of any collateral, or any taking, release, impairment or amendment or
waiver of or consent to departure from any other guaranty or other
direct or indirect security for any of the Guaranteed Obligations;
(d) any manner of application of collateral or other direct or
indirect security for any of the Guaranteed Obligations, or proceeds
thereof, to any of the Guaranteed Obligations, or any commercially
reasonable manner of sale or other disposition of any collateral for
any of the Guaranteed Obligations or any other assets of any Borrower;
(e) any permanent impairment by any Lender or any other Person
of any recourse of the Guarantor against any Borrower or any other
Person, or any other permanent impairment by any Lender or any other
Person of the suretyship status of the Guarantor;
(f) any bankruptcy, insolvency, reorganization, dissolution or
similar proceedings with respect to, or any change, restructuring or
termination of the corporate structure or existence of, any Borrower,
the Guarantor or any other Person; or
(g) any failure of any Lender or any other Person to disclose
to the Guarantor any information pertaining to the business,
operations, condition (financial or other) or prospects of any Borrower
or any other Person, or to give any other notice, disclosure or demand.
2.3. Waivers, etc. The Guarantor hereby irrevocably waives any
defense to or limitation on its obligations under this Agreement arising out of
or based upon any matter referred to in Section 2.2 and, without limiting the
generality of the foregoing, any requirement of promptness, diligence or notice
of acceptance, any other notice, disclosure or demand with respect to any of the
Guaranteed Obligations and this Agreement, any requirement of acceptance hereof,
reliance hereon or knowledge hereof by the Agent or any Lender, and any
requirement that the Agent or any Lender protect, secure, perfect or insure any
lien or any property subject thereto or exhaust any right or take any action
against any Borrower or any other Person or any collateral or other direct or
indirect security for any of the Guaranteed Obligations. Notwithstanding the
foregoing sentence, the Guarantor's waiver under this Section 2.3 shall apply
only to the Guarantor's obligations hereunder and shall not limit or waive any
of the Guarantor's rights or obligations as a borrower under the Credit
Agreement.
2.4. Reinstatement. This Agreement shall continue to be
effective, or be automatically reinstated, as the case may be, if at any time
payment of any of the Guaranteed Obligations is avoided, rescinded or must
otherwise be returned by the Agent or any Lender for any reason, all as though
such payment had not been made.
2.5. No Stay. Without limiting the generality of any other
provision of this Agreement, if any acceleration of the time for payment or
performance of any Guaranteed Obligation, or any condition to any such
acceleration, shall at any time be stayed, enjoined or prevented for any reason
(including stay or injunction resulting from the pendency against any Borrower
or any other Person of a bankruptcy, insolvency, reorganization, dissolution or
similar proceeding), the Guarantor agrees that, for purposes of this Agreement
and its obligations hereunder, at the option of the Agent such Guaranteed
Obligation shall be deemed to have been accelerated and such condition to
acceleration shall be deemed to have been met.
2.6. Payments. All payments to be made by the Guarantor
pursuant to this Agreement shall be made at the times and in the manner
prescribed for payments in Article II of the Credit Agreement, without setoff,
counterclaim, withholding or other deduction of any nature. All payments made by
the Guarantor pursuant to this Agreement may be applied to the Guaranteed
Obligations and all other amounts payable under this Agreement in such order as
the Agent may elect.
2.7. Subrogation, Etc. Any rights which the Guarantor may have
or acquire by way of subrogation, reimbursement, restitution, exoneration,
contribution or indemnity, and any similar rights (whether arising by operation
of law, by agreement or otherwise), against any Borrower arising from the
existence, payment, performance or enforcement of any of the obligations of the
Guarantor under or in connection with this Agreement, shall be subordinate in
right of payment to the Guaranteed Obligations, and the Guarantor shall not
exercise any such rights until all Guaranteed Obligations and all other
obligations under this Agreement have been paid in cash or such other manner as
may be acceptable to the Agent and performed in full and all commitments to
extend credit under the Loan Documents shall have terminated. If,
notwithstanding the foregoing, any amount shall be received by the Guarantor on
account of any such rights at any time prior to the time at which all Guaranteed
Obligations and all other obligations under this Agreement shall have been paid
in cash or such other manner as may be acceptable to the Agent and performed in
full and all commitments to extend credit under the Loan Documents shall have
terminated, such amount shall be held by the Guarantor in trust for the benefit
of the Lenders, segregated from other funds held by the Guarantor, and shall be
forthwith delivered to Agent for the benefit of the Lenders in the exact form
received by the Guarantor (with any necessary endorsement), to be applied to the
Guaranteed Obligations, whether matured or unmatured, in such order as the Agent
may elect, or to be held by the Agent as security for the Guaranteed Obligations
and disposed of by the Agent in any lawful manner, all as the Agent may elect.
2.8. Continuing Agreement. This Agreement is a continuing
guaranty and shall continue in full force and effect until all Guaranteed
Obligations and all other amounts payable under this Agreement have been paid in
cash or such other manner as may be acceptable to the Agent and performed in
full, and all commitments to extend credit under the Loan Documents have
terminated, subject in any event to reinstatement in accordance with Section
2.4. Without limiting the generality of the foregoing, the Guarantor hereby
irrevocably waives any right to terminate or revoke this Agreement.
2.9. Limitation on Obligations. Notwithstanding any other
provision hereof, to the extent that mandatory and nonwaivable provisions of
applicable Law pertaining to fraudulent transfer or fraudulent conveyance
otherwise would render the full amount of the obligations of the Guarantor under
this Agreement avoidable, invalid or unenforceable, the obligations of the
Guarantor under this Agreement shall be limited to the maximum amount which does
not result in such avoidability, invalidity or unenforceability. In any action,
suit or proceeding pertaining to this Agreement, the burden of proof, by clear
and convincing evidence, shall be on the Person claiming that this Section 2.9
applies to limit any obligation of the Guarantor under this Agreement, or
claiming that any obligation of the Guarantor under this Agreement is avoidable,
invalid or unenforceable, as to each element of such claim.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
The Guarantor hereby represents and warrants to the Agent and
the Lenders as follows:
3.1. Credit Agreement. The provisions of Article III of the
Credit Agreement are hereby incorporated by reference (together with all related
definitions and cross references). The Guarantor hereby represents and warrants
to the Agent and the Lenders as provided therein.
3.2. Representations and Warranties Remade at Each Extension
of Credit. Each request (including any deemed request) by any Borrower for any
extension of credit under any Loan Document shall be deemed to constitute a
representation and warranty by the Guarantor to the Agent and the Lenders that
the representations and warranties made by the Guarantor in this Article III are
true and correct on and as of the date of such request with the same effect as
though made on and as of such date. Failure by the Agent to receive notice from
the Guarantor to the contrary before the Lenders make any extension of credit
under any Loan Document shall constitute a further representation and warranty
by the Guarantor to the Agent and the Lenders that the representations and
warranties made by the Guarantor in this Article III are true and correct on and
as of the date of such extension of credit with the same effect as though made
on and as of such date.
ARTICLE IV
COVENANTS
4.1. Covenants Generally. Reference is hereby made to the
provisions of Articles V of the Credit Agreement (together with all related
definitions and cross-references). To the extent such provisions impose upon any
Borrower a duty to cause the Guarantor (or a Subsidiary of the Guarantor) to do
or refrain from doing certain acts or things or to meet or refrain from meeting
certain conditions, the Guarantor shall (or shall cause such Subsidiary of the
Guarantor to, as the case may be) do or refrain from doing such acts or things,
or meet or refrain from meeting such conditions, as the case may be.
ARTICLE V
MISCELLANEOUS
5.1. Amendments, etc. No amendment to or waiver of any provision of this
Agreement, and no consent to any departure by the Guarantor herefrom, shall in
any event be effective unless in a writing manually signed by or on behalf of
each Lender; provided that this Agreement may be terminated and the Guarantor
may be released herefrom with the written consent of the Required Lenders in
connection with the sale or other disposition of all of the capital stock of and
other equity interests in the Guarantor to a Person or Persons other than a
Borrower or a Subsidiary of a Borrower, which sale or other disposition is in
compliance with the Credit Agreement and the Loan Documents. Any such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given.
5.2. No Implied Waiver; Remedies Cumulative. No delay or
failure of the Agent or any Lender in exercising any right or remedy under this
Agreement shall operate as a waiver thereof; nor shall any single or partial
exercise of any such right or remedy preclude any other or further exercise
thereof or the exercise of any other right or remedy. The rights and remedies of
the Agent and the Lenders under this Agreement are cumulative and not exclusive
of any other rights or remedies available hereunder, under any other agreement,
at law, or otherwise.
5.3. Notices. Except to the extent, if any, otherwise
expressly provided herein, all notices and other communications (collectively,
"notices") under this Agreement shall be in writing (including facsimile
transmission) and shall be sent by certified or registered mail, by
nationally-recognized overnight courier or by personal delivery. All notices
shall be sent to the address specified in the Credit Agreement for the
applicable party, or, in any case, to such other address as shall have been
designated by the applicable party by notice to the other party hereto. Any
properly given notice shall be effective when received, except that properly
given notices to the Guarantor shall be effective at the following time, if
earlier: if given by telephone, when telephoned; if by first-class mail, three
Business Days after deposit in the mail; if by overnight courier, one Business
Day after pickup by such courier; and if by facsimile transmission, upon
transmission. The Agent and the Lenders may rely on any notice (whether or not
made in a manner contemplated by this Agreement) purportedly made by or on
behalf of the Guarantor, and Agent and the Lenders shall have no duty to verify
the identity or authority of the Person giving such notice.
5.4. Expenses. The Guarantor agrees to pay upon demand all
reasonable expenses (including reasonable fees and expenses of counsel) which
the Agent or any Lender may incur from time to time arising from or relating to
the administration of, or exercise, enforcement or preservation of rights or
remedies under, this Agreement, other than costs and expenses incurred by the
Agent or any Lender, respectively, in connection with any litigation which
results in a final, non-appealable judgment against the Agent or such Lender.
5.5. Entire Agreement. This Agreement constitutes the entire
agreement of the parties hereto with respect to the subject matter hereof and
supersedes all prior and contemporaneous understandings and agreements.
5.6. Survival. All representations and warranties of the
Guarantor contained in or made in connection with this Agreement shall survive,
and shall not be waived by, the execution and delivery of this Agreement, any
investigation by or knowledge of the Agent or any Lender, any extension of
credit, or any other event or circumstance whatever.
5.7. Counterparts. This Agreement may be executed in any
number of counterparts, including facsimile counterparts, each of which shall be
deemed an original, and all such counterparts shall constitute but one and the
same agreement.
5.8. Setoff. In the event that any obligation of the Guarantor
now or hereafter existing under this Agreement or any other Loan Document shall
have become due and payable, after an Event of Default under the Loan Documents
has occurred, each Lender shall have the right from time to time, without notice
to the Guarantor, to set off against and apply to such due and payable amount
any obligation of any nature of each Lender to the Guarantor, including all
deposits (whether time or demand, general or special, provisionally or finally
credited, however evidenced) now or hereafter maintained by the Guarantor with
such Lender. Such right shall be absolute and unconditional in all circumstances
and, without limitation, shall exist whether such obligation to the Guarantor is
absolute or contingent, matured or unmatured (it being agreed that each Lender
may deem such obligation to be then due and payable at the time of such setoff),
regardless of the offices or branches through which the parties are acting with
respect to the offset obligations, regardless of whether the offset obligations
are denominated in the same or different currencies, and regardless of the
existence or adequacy of any other direct or indirect security or any other
right or remedy available to such Lender. Nothing in this Agreement or any other
Loan Document shall be deemed a waiver of or restriction on any right of setoff
or banker's lien available to any Lender under this Section 5.8, at law or
otherwise. The Guarantor hereby agrees that any affiliate of any Lender, and any
holder of a participation in any Guaranteed Obligations of the Guarantor under
this Agreement, shall have the same rights of setoff as each Lender as provided
in this Section 5.8 (regardless of whether such affiliate or participant
otherwise would be deemed a creditor of the Guarantor).
5.9. Construction. In this Agreement, unless the context
otherwise clearly requires, references to the plural include the singular, the
singular the plural, and the part the whole; the neuter case includes the
masculine and feminine cases; and "or" is not exclusive. In this Agreement, any
references to property (or similar terms) include any interest in such property
(or other item referred to); "include," "includes," "including" and similar
terms are not limiting; and "hereof," "herein," "hereunder" and similar terms
refer to this Agreement as a whole and not to any particular provision; Section
and other headings in this Agreement, and any table of contents herein, are for
reference purposes only and shall not affect the interpretation of this
Agreement in any respect. Section and other references in this Agreement are to
this Agreement unless otherwise specified. This Agreement has been fully
negotiated between the applicable parties, each party having the benefit of
legal counsel, and accordingly neither any doctrine of construction of
guaranties or suretyships in favor of the guarantor or surety, nor any doctrine
of construction of ambiguities against the party controlling the drafting, shall
apply to this Agreement.
5.10. Successors and Assigns. This Agreement shall be binding
upon the Guarantor, its successors and assigns, and shall inure to the benefit
of and be enforceable by the Agent, the Lenders and their respective successors
and assigns. Without limitation of the foregoing, the Agent or any Lender (and
any successive assignee or transferee) from time to time may assign or otherwise
transfer all or any portion of its rights or obligations under the Loan
Documents (including all or any portion of any commitment to extend credit), or
any Guaranteed Obligations, to any other Person, and such Guaranteed Obligations
(including any Guaranteed Obligations resulting from extension of credit by such
other Person under or in connection with the Loan Documents) shall be and remain
Guaranteed Obligations entitled to the benefit of this Agreement, and to the
extent of its interest in such Guaranteed Obligations such other Person shall be
vested with all the benefits in respect thereof granted to the Agent or any
Lender, as the case may be, in this Agreement or otherwise.
5.11. Certain Legal Matters.
(A) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, EXCLUSIVE OF
CHOICE OF LAW PRINCIPLES.
(B) SUBMISSION TO JURISDICTION AND VENUE; CONSENT TO SERVICE
OF PROCESS; WAIVER OF JURY TRIAL; ETC. THE GUARANTOR HEREBY IRREVOCABLY AND
UNCONDITIONALLY:
(I) AGREES THAT ANY ACTION, SUIT OR PROCEEDING BY ANY PERSON
ARISING FROM OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT
OR ANY STATEMENT, COURSE OF CONDUCT, ACT, OMISSION OR EVENT IN
CONNECTION WITH ANY OF THE FOREGOING (COLLECTIVELY, "RELATED
LITIGATION") MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION SITTING IN THE CITY OR COUNTY OF NEW YORK, NEW YORK,
SUBMITS TO THE JURISDICTION OF SUCH COURTS, AND AGREES NOT TO BRING ANY
RELATED LITIGATION IN ANY OTHER FORUM (BUT NOTHING HEREIN SHALL AFFECT
THE RIGHT OF THE AGENT OR ANY LENDER TO BRING ANY RELATED LITIGATION IN
ANY OTHER FORUM);
(II) ACKNOWLEDGES THAT SUCH COURTS WILL BE THE MOST CONVENIENT
FORUM FOR ANY RELATED LITIGATION, WAIVES ANY OBJECTION TO THE LAYING OF
VENUE OF ANY RELATED LITIGATION BROUGHT IN ANY SUCH COURT, WAIVES ANY
CLAIM THAT ANY RELATED LITIGATION BROUGHT IN ANY SUCH COURT HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM, AND WAIVES ANY RIGHT TO OBJECT, WITH
RESPECT TO ANY RELATED LITIGATION, THAT SUCH COURT DOES NOT HAVE
JURISDICTION OVER IT;
(III) CONSENTS AND AGREES TO SERVICE OF ANY SUMMONS, COMPLAINT
OR OTHER LEGAL PROCESS IN ANY RELATED LITIGATION BY REGISTERED OR
CERTIFIED U.S. MAIL, POSTAGE PREPAID, TO IT AT THE ADDRESS FOR NOTICES
DESCRIBED IN THIS AGREEMENT, AND CONSENTS AND AGREES THAT SUCH SERVICE
SHALL CONSTITUTE IN EVERY RESPECT VALID AND EFFECTIVE SERVICE (BUT
NOTHING HEREIN SHALL AFFECT THE VALIDITY OR EFFECTIVENESS OF PROCESS
SERVED IN ANY OTHER MANNER PERMITTED BY LAW); AND
(I) WAIVES THE RIGHT TO TRIAL BY JURY IN ANY RELATED LITIGATION.
(C) LIMITATION OF LIABILITY. NO CLAIM MAY BE MADE BY THE
GUARANTOR AGAINST THE AGENT OR ANY LENDER OR ANY AFFILIATE, DIRECTOR, OFFICER,
EMPLOYEE, ATTORNEY OR AGENT OF THE AGENT OR ANY LENDER FOR ANY SPECIAL,
INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES IN RESPECT OF ANY CLAIM ARISING FROM
OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR ANY STATEMENT,
COURSE OF CONDUCT, ACT, OMISSION OR EVENT IN CONNECTION WITH ANY OF THE
FOREGOING (WHETHER BASED ON BREACH OF CONTRACT, TORT OR ANY OTHER THEORY OF
LIABILITY); AND THE GUARANTOR HEREBY WAIVES, RELEASES AND AGREES NOT TO SUE UPON
ANY CLAIM FOR ANY SUCH DAMAGES, WHETHER OR NOT ACCRUED AND WHETHER OR NOT KNOWN
OR SUSPECTED TO EXIST.
THE GUARANTOR ACKNOWLEDGES THAT IT HAS BEEN REPRESENTED BY LEGAL COUNSEL IN
CONNECTION WITH THE EXECUTION AND DELIVERY OF THIS AGREEMENT AND THAT IT
UNDERSTANDS THE PROVISIONS OF THIS AGREEMENT.
IN WITNESS WHEREOF, the Guarantor has executed and delivered
this Agreement as of the date first above written.
[NAME OF SUBSIDIARY]
By
Name:
Title:
[LOGO]
ANNUAL =
REPORT
1999
=
----
=
1995
=
- --------
=
1996
=
- ------------
1997
=
- ---------------
1998
=
- --------------------
1999
=
- -------------------------
FIVE YEARS OF =
GROWTH
<PAGE>
- --------------------------
CURTISS-WRIGHT CORPORATION
- --------------------------
is a diversified global provider of highly engineered products and =
services to
the Motion Control, Flow Control and Metal Treatment industries. The =
firm
employs approximately 2,270 people. More information on Curtiss-Wright =
can be
found on the Internet at www.curtisswright.com
CONTENTS
1 | Financial Highlights
2 | Letter to Stockholders
5 | Note from the Chairman
6 | At a Glance
8 | Motion Control
10 | Metal Treatment
12 | Flow Control
14 | Quarterly Results of Operations
14 | Consolidated Selected Financial Data
14 | Forward-Looking Statements
15 | Management's Discussion and Analysis of
Financial Condition and Results of Operations
18 | Report of the Corporation
18 | Report of Independent Accountants
19 | Consolidated Financial Statements
23 | Notes to Consolidated Financial Statements
36 | Corporate Directory and Information
[GRAPHIC OMITTED]
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
=
- -------------------------------------------------=20
(Dollars in thousands, except per share data; unaudited) 1999 =
1998 1997
- ------------------------------------------------------------------------=
- ------------------------------------
<S> <C> =
<C> <C> =20
Performance:
Sales $ 293,263 =
$ 249,413 $ 219,395=20
Earnings before interest, taxes,
depreciation and amortization $ 77,462 =
$ 57,726 $ 51,383
Net earnings $ 39,045 =
$ 29,053 $ 27,885
Normalized net earnings $ =
34,042(1) $ 27,817(1) $ 27,885
Diluted earnings per common share $ 3.82 =
$ 2.82 $ 2.71
Normalized diluted earnings per share $ 3.33 =
$ 2.70 $ 2.71
Return on sales 13.3% =
11.6% 12.7%
Return on assets 10.6% =
9.1% 10.1%
Return on average stockholders' equity 16.0% =
13.4% 14.4%
New orders $ 295,709 =
$ 232,217 $ 259,260
Backlog at year-end $ 212,820 =
$ 198,297 $ 149,201
- ------------------------------------------------------------------------=
- ------------------------------------
Year-End Financial Position: =20
Working capital $ 124,438 =
$ 130,763 $ 132,751
Current ratio 3.2 to 1 =
2.9 to 1 4.4 to 1
Total assets $ 387,126 =
$ 352,740 $ 284,708
Stockholders' equity $ 258,355 =
$ 229,593 $ 204,853
Stockholders' equity per common share $ 25.73 =
$ 22.53 $ 20.13
Other Year-End Data: =20
Depreciation and amortization $ 12,864 =
$ 9,661 $ 9,097
Capital expenditures $ 19,883 =
$ 10,642 $ 11,231
Shares of common stock outstanding 10,040,250 =
10,190,790 10,175,140
Number of stockholders 3,854 =
3,926 4,142
Number of employees 2,267 =
2,052 1,884
- ------------------------------------------------------------------------=
- ------------------------------------
Dividends per Common Share $ .52 =
$ .52 $ .505
- ------------------------------------------------------------------------=
- ------------------------------------
</TABLE>
(1) Earnings are adjusted to exclude the effects of the environmental
insurance settlements and consolidation costs associated with its =
Motion
Control business segment.
FINANCIAL HIGHLIGHTS
1995-1999
[GRAPHIC OMITTED]
[The following table was depicted as a line graph in the printed =
material.]
Sales/Backlog
(in thousands)
95 96 97 98 99
Sales $393,783
Backlog $313,879
[GRAPHIC OMITTED]
[The following table was depicted as a line graph in the printed =
material.]
Operating Income/Net Earnings
(in thousands)
95 96 97 98 99
Operating Income $51,137
Net Earnings $35,046
[GRAPHIC OMITTED]
[The following table was depicted as a line graph in the printed =
material.]
Return on Equity
(percentage)
95 96 97 98 99
16.8%
CURTISS-WRIGHT CORPORATION AND =
SUBSIDIARIES | 1
<PAGE>
- -------------------
TO OUR SHAREHOLDERS
- -------------------
In 1999, Curtiss-Wright enjoyed its most profitable year since 1981. =
Net
earnings increased 34% from 1998 (22% in normalized net earnings) on a =
sales
increase of 18%.
Since 1995, Curtiss-Wright has achieved a compound annual growth rate =
of 17% in
sales and 25% in normalized operating income. The fact that our profits =
grew
even faster than our sales is particularly significant in our view. =
This
performance helped place us on Forbes magazine's list of America's 200 =
Best
Small Companies for 1999. Of course, the Forbes ranking was based on =
more than
growth and profitability over the past five years. There were also =
subjective
considerations, such as "forthrightness and clarity in the presentation =
of
investor information." We are honored by Forbes' evaluation and will =
strive to
continue to increase sales while producing superior profits and to =
maintain that
level of quality in our communications to you.
Balanced Growth
The accompanying pie chart reflects our current sales mix, fully =
recognizing
acquisitions made during 1999. It illustrates the balance among our =
three
business segments: Motion Control, Metal Treatment and Flow Control. =
Five years
ago, our aerospace businesses were vulnerable to the cyclicality of new
commercial aircraft production rates, and our valve products were =
serving
markets with low growth prospects. We were not pleased with our =
vulnerability in
these areas, and initiated diversification activities.
Today, Curtiss-Wright is diversified in a way that benefits our =
financial
performance and improves our growth prospects. With three business =
segments that
all have profitable growth opportunities, we are now better positioned =
to create
more value for our shareholders. Our strong balance sheet allows us to =
invest in
internal growth initiatives, make selective acquisitions and maintain a =
steady
course through weak economic cycles.
Flow Control
In 1999, we positioned our Flow Control business for future growth by =
acquiring
the Farris Engineering pressure-relief valve product line. Farris is =
one of the
world's leading manufacturers of spring-loaded and pilot-operated
pressure-relief valves for use in processing facilities including =
refineries,
petrochemical/chemical
2 | CURTISS-WRIGHT CORPORATION AND SUBSIDIARIES
<PAGE>
Today, Curtiss-Wright is diversified in a way that benefits our =
financial
performance and improves our growth prospects.
plants and pharmaceutical manufacturing operations. One purpose of =
acquiring
such a well-established provider to the processing industry was to =
introduce our
existing valve product lines to that market. The strengths of Farris in =
the
industrial markets complement Curtiss-Wright Flow Control's established =
position
in the nuclear area, and the combined business can better serve both =
markets on
a global basis with a broader product line, an improved distribution =
system and
superior engineering capabilities.
Aircraft Production Rates
With the growth of our aerospace overhaul and repair business and the
acquisition of Curtiss-Wright Drive Technologies, aircraft production =
rates are
no longer the determining factor for our financial performance. Well =
over
one-third of our aerospace sales are now to the aftermarket. While =
Boeing, our
largest customer, is forecasting a significant reduction in aircraft =
shipments
in 2000, we expect our Boeing-related sales to be down only about 10%, =
or $5
million. One factor directly insulating us from the general turndown in =
Boeing's
production rates is a new contract to be performed over the next =
several years
to supply torque limiter kits for trailing-edge wing-flap actuation =
systems on
Boeing 757 aircraft. More importantly, the decline in Boeing volume =
represents
less than 2% of Curtiss-Wright's total sales and will be more than =
offset by
additional sales in other areas of the Company.
This reduction of dependency on the commercial aircraft build rates is =
exactly
what we were determined to accomplish through the diversifica tion =
activities
initiated five years ago. It has been accomplished through both =
acquisitions and
internal development programs. Our anticipated growth and profitability =
during
the upcoming cyclical downturn of this portion of the aerospace sector =
will
validate our strategy.
Cost Reductions
As a result of actions taken during 1999, we have significantly reduced =
our cost
of manufacturing actuation and control products. Anticipating the =
downturn in
Boeing production, in late 1998 we decided to consolidate our =
Fairfield, New
Sales by Business Segment
- ------------------------------------------------------------------------=
- --------
[The following table was depicted as a pie chart in the printed =
material.]
[GRAPHIC OMITTED]
Flow Control
Metal Treatment
Motion Control
- ------------------------------------------------------------------------=
- --------
Sales by Industry
- ------------------------------------------------------------------------=
- --------
[The following table was depicted as a pie chart in the printed =
material.]
[GRAPHIC OMITTED]
Marine
Military Aerospace
Agriculture
Automotive
Commercial Aerospace
Construction & Mining
Oil & Petroleum
Other
Power Generation
Transportation
Non-Aviation Military
Rescue
- ------------------------------------------------------------------------=
- --------
CURTISS-WRIGHT CORPORATION AND =
SUBSIDIARIES | 3
<PAGE>
[PHOTO OMITTED]
David Lasky
Chairman and Chief Executive Officer
[PHOTO OMITTED]
Martin R. Benante
President and Chief Operating Officer
...aircraft production rates are no longer the determining factor for =
our
financial performance.
Jersey, manufacturing operations into our Shelby, North Carolina, =
facility. In
1999, $3.8 million in pretax expenses associated with this =
consolidation were
incurred. The consolidation is now complete; the Fairfield facility is =
up for
sale, and the profitability of our aerospace actuation product line =
will
improve.
Metal Treatment
New facilities are an important part of our plan to expand shot-peening
operations globally to tap markets we find attractive. We intend to =
continue to
grow our heat-treating services through acquisition. Through these =
efforts we
will be expanding the 37-facility metal treatment network we now have =
around the
world.
The impressive trend in sales and profit growth our Metal Treatment =
business
segment had been establishing over the past several years was =
interrupted in
1999 by a slowdown in several markets, most notably aerospace, oil =
tool,
agriculture and construction machinery. Profitability also was limited
temporarily by start-up costs associated with several new shot-peening
facilities.
Outlook
In the past year, we have made great progress in establishing =
Curtiss-Wright as
a growth company. Having achieved a significant measure of global =
diversity in
our revenue and customer base, and a balance among our business =
segments, we
face the future with confidence. We recognize and appreciate the =
dedication and
hard work of all the Curtiss-Wright employees who have worked =
tirelessly to set
new standards of excellence and increase the value of their Company.
Sincerely,
/s/ David Lasky /s/ Martin R. Benante
David Lasky Martin R. Benante
Chairman and Chief Executive Officer President and Chief =
Operating Officer
February 3, 2000
4 | CURTISS-WRIGHT CORPORATION AND SUBSIDIARIES
<PAGE>
Note from the Chairman
It is now 38 years since I joined Curtiss-Wright. I have seen the =
Company
transformed from a shrinking entity, overly dependent on one business, =
to a
vibrant, growing, multi-sector enterprise with an enviable record of
profitability. That transformation has been the result of the efforts =
of a
unique group of very talented people who have given of themselves to =
the utmost.
I will retire as Chairman and Chief Executive Officer of Curtiss-Wright
following the Annual Meeting of Stockholders. I do so with the =
knowledge that
the Company will be in the very capable hands of Marty Benante, your =
President
and Chief Operating Officer, and the other key executives of the =
Company. I am
confident that they will lead Curtiss-Wright to new heights of =
performance.
Marty was appointed to his current position in April of last year. He =
is a
career employee of Curtiss-Wright and has held positions of increasing
responsibility since joining the Company in 1978.
As for myself, I expect to continue to serve on the Company's Board of =
Directors
and, along with the other members, to support the management team at
Curtiss-Wright.
I deeply appreciate the opportunity I have been given to serve the =
Company.
Thank you for your support.
/s/ =
David Lasky
David =
Lasky
Curtiss-Wright Corporation and =
Subsidiaries | 5
<PAGE>
Curtiss-Wright's three business segments serve many markets.
AT A GLANCE
[PHOTO OMITTED]
Motion Control
Keeping the world in motion.
[GRAPHIC OMITTED]
[PHOTO OMITTED]
Flow Control
The leader in valve =
technology.
Curtiss-Wright is diversified across three business segments with a =
fairly equal
sales distribution. While about half of our sales are related to the =
aerospace
industry, the balance of our activity is spread over a number of =
markets. Even
within aerospace, however, our operations have expanded. In addition to =
being a
supplier of products and services for OEM applications tied to the =
production of
new aircraft, we now provide overhaul and repair services to a global =
customer
base.
Sales generated from services are about equal to those generated from
manufactured products. Our activities in the aftermarket have grown, =
and we have
expanded globally as measured by both our customer base and our =
facility
locations.
Curtiss-Wright is now diversified in many aspects and is no longer =
dependent on
any one customer or exposed to the cyclicality of any single market =
segment.
6 | CURTISS-WRIGHT CORPORATION AND SUBSIDIARIES
<PAGE>
[GRAPHIC OMITTED]
AT A GLANCE
Metal Treatment
We offer a wide variety of quality services.
<TABLE>
<CAPTION>
=
- ------------------------------------------------------------------------=
- -----------------
PRODUCTS & SERVICES =
MAJOR MARKETS =20
- ------------------------------------------------------------------------=
- ----------------------------------------------
<S> <C> =
<C>
METAL TREATMENT Among the approximately 50 services we =
provide are: Aerospace Manufacturing =20
=
Automotive Manufacturing =20
Aluminum/Nonferrous Treating =
Metalworking Industries =20
Annealing/Stress Relieving =
Oil and Gas Drilling/Exploration=20
Austempering/Brazing =
Power Generation =20
Blast Cleaning =
Jet Engine Manufacturing =20
Carbonitriding/Nitriding =
Agricultural Equipment =20
Carbon Restoration/Carburizing =
Transportation =20
Cryogenic Treatments =
Construction and Mining =20
Deburring =
=20
Edge, Vibratory and Superfinishing
Engineering and Field Services
Fabrication of Machinery, Tooling,
Parts and Supplies
Fatigue and Physical Testing
Flame, Induction and
Precipitation Hardening
Marquenching/Normalizing
Nondestructive Testing
Painting/Plating
Shot-Peening
Shot-Peen Forming
Straightening
Texturizing
Vacuum Treatments
Valve Reed Manufacturing
- ------------------------------------------------------------------------=
- ----------------------------------------------
MOTION CONTROL Control and Actuation =
Aerospace Manufacturing =20
Components and Systems =
Commercial Airlines =20
Aerospace Overhaul Services =
Airfreight Haulers =20
Hydropneumatic Suspension Systems =
Military Air Forces =20
Electromechanical Drives and Systems =
Military Vehicle Manufacturing =20
Electrohydraulic Drives and Systems =
Railway Car Manufacturing =20
Rescue Tools =
Diesel Engine Manufacturing =20
=
Rescue Tool Industry =20
- ------------------------------------------------------------------------=
- ----------------------------------------------
FLOW CONTROL Military and Commercial =
U.S. Navy Propulsion Systems =20
Nuclear/Nonnuclear Valves (globe, =
U.S. Navy Shipbuilding =20
gate, control, safety, solenoid and =
relief) Nuclear Power Plants =20
Fluid Power Products and Systems =
Petrochemical/Chemical Industry
Valve Overhaul and Repair =
Entertainment Industry =20
Engineering, Inspection and Testing =
Services Petroleum Production/Refining =20
Air-Driven Hydraulic Pumps and =
Pharmaceutical Industry =20
Gas Boosters =
Industrial Gases Industry =20
=
Automotive/Truck Industry =20
=
- ------------------------------------------------------------------------=
- -----------------
</TABLE>
CURTISS-WRIGHT CORPORATION AND =
SUBSIDIARIES | 7
<PAGE>
CAPABILITIES
[GRAPHIC =
OMITTED]
New =
Capabilities
Providing stabilizing =
and aiming
systems for military =
vehicles is a
new market we now =
service.
[GRAPHIC OMITTED]
[GRAPHIC =
OMITTED]
The =
Aftermarket
We have built a business =
providing
aerospace maintenance, =
repair and
overhaul =
services.
MOTION CONTROL
Curtiss-Wright's formidable capabilities in motion control have evolved =
from its
base business as a supplier of actuation and control components for the =
movement
of aircraft surfaces, such as wing flaps and cargo and weapons bay =
doors. Our
largest commercial programs include numerous Boeing commercial aircraft =
such as
the next-generation 737, 747, 767 and 777 platforms. Two of our largest =
military
programs are the Lockheed Martin F-16 Fighting Falcon as well as the =
F-22
Raptor, both of which contain Curtiss-Wright proprietary designs for =
the
secondary flight control and utility actuation systems.
Maintenance, repair and overhaul (MRO) of aerospace components has =
become a more
important part of this business segment. We repair and overhaul not =
only parts
we manufacture but also parts produced by others, and we have grown =
these MRO
operations into a $50 million business. MRO services are provided at =
four
locations, serving more than 550 airlines and airfreight haulers. =
Having a vital
MRO operation significantly broadens our scope beyond the initial =
production of
an aircraft to encompass the entire life cycle. It also takes advantage =
of the
aging of aircraft fleets and the growing trend of outsourcing MRO =
services.
Our recent acquisition of Curtiss-Wright Drive Technologies (CWDT), =
based in
Switzerland, expanded our motion control markets beyond aerospace. We =
now have
sophisticated
[GRAPHIC OMITTED]
8 | CURTISS-WRIGHT CORPORATION AND SUBSIDIARIES
<PAGE>
[GRAPHIC OMITTED]
New Programs
We will be providing three actuation systems for the F-22.
Our Motion Control business has expanded from being only a supplier of =
aerospace
OEM components.
applications for armored-vehicle turret aiming stabilization and =
suspension
systems. We also provide technology and products for railway tilting =
systems as
well as fuel-injection controls for diesel engine applications. CWDT is =
a Swiss
company with customers throughout Europe.
Growth Opportunities
In addition to expanding MRO opportunities, we participate in two =
military
programs that are in their initial production stages: the V-22 Osprey =
vertical
takeoff and landing craft, and the F-22 Raptor advanced tactical =
fighter. If
these programs continue forward in the numbers currently under =
consideration,
they will be significant to Curtiss-Wright in the future.
We continue to work on development programs for new aircraft. In 1999, =
we signed
a teaming agreement with Moog Inc. to pursue actuation system =
opportunities on
the Joint Strike Fighter (JSF) program. This strategic alliance allows =
both
companies to offer their core competencies and capabilities for the =
advanced
technology JSF program at the best overall value and lowest risk. The =
JSF is the
next-generation, multirole jet fighter for the United States and Great =
Britain.
It will be based on a common aircraft platform that can be used by more =
than one
branch of the armed services. Boeing and Lockheed Martin are currently =
competing
to be the prime contractor for the 3,000 aircraft projected to be =
produced.
We are currently introducing CWDT's technologies and product lines to =
the U.S.
land-based military and aerospace markets, where they have had only =
limited
exposure so far. Curtiss-Wright's long-standing reputation as a =
military
supplier will facilitate this process.
[GRAPHIC OMITTED]
THE LAST FIVE YEARS
(1995-1999)
The sales for the period benefited from increased production of =
commercial
aircraft, the growth of our maintenance, repair and overhaul =
operations, and our
movement into new markets.
[The following table was depicted as a line chart in the printed =
material.]
95 $ 50,677
96 $ 64,623
97 $ 97,369
98 $105,400
99 ................................ $124,155
CURTISS-WRIGHT CORPORATION AND =
SUBSIDIARIES | 9
<PAGE>
EXPANDING
[GRAPHIC OMITTED]
Wing Skins
Shot-peen forming is =
used to put
the curvature in wing =
skins.
[GRAPHIC OMITTED]
METAL TREATMENT
Curtiss-Wright is considered the technological leader in shot-peening =
and
shot-peen forming metal treatment services. Our global network of 37 =
regional
facilities, covering most of North America and many of the major =
markets in
Europe, is unmatched by any other supplier of these services. Short =
turnaround
time is an important customer requirement, and our well-placed regional
facilities enable us to meet that need.
While half of our metal treatment business relates to the aerospace =
industry
(both original production and aftermarket), the balance is diversified =
across a
number of markets, including automotive, in which we have
[GRAPHIC OMITTED]
10 | CURTISS-WRIGHT CORPORATION AND SUBSIDIARIES
<PAGE>
[GRAPHIC OMITTED]
Applications
Shot-peening is diverse in its product applications.
[GRAPHIC OMITTED]
Diverse Markets
Agricultural equipment is only one of the many markets we serve.
Curtiss-Wright is the largest independent provider of shot-peening =
services.
an active base of over 5,000 customers. While the level of metal =
treatment
services we provide directly to Boeing is not significant, many of =
Boeing's
suppliers are our customers, and they have been feeling the effects of =
curtailed
production schedules. To some extent, these will be offset by an =
increase in
production scheduled for the Airbus programs in 2000. We provide metal =
treatment
services for engine, landing gear, actuation systems, wheel and brake =
components
and wing skins for commercial, military and business aircraft. Overall, =
the
outlook for the aerospace segment of our Metal Treatment business in =
2000 is
good.
Growth Opportunities
We have identified attractive markets into which we should expand our =
network of
shot-peening facilities, and we plan to step up our rate of =
establishing new
locations in the years ahead. In addition, 6 of our 37 facilities also =
offer
heat-treating services, and we want to expand our heat-treating =
operation into a
broad network. We will continue our plan to accomplish this through a =
program of
selective acquisitions.
Internally, we are advancing our technological capabilities. We have =
developed a
robotic shot-peening machine that we are introducing to several of our
facilities. The machine offers significantly shorter setup times and =
will
improve customer turnaround times. In conjunction with Lawrence =
Livermore
National Laboratory, we are developing applications for the new =
technology of
laser peening.
THE LAST FIVE YEARS
(1995-1999)
We have realized the benefits of diversification in our Metal Treatment =
business
segment. Sales growth leveled off in 1999 as slowdowns in some of our =
served
markets were offset by growth in other areas.
[The following table was depicted as a line chart in the printed =
material.]
95 $ 74,458
96 $ 82,615
97 $ 95,362
98 $105,999
99 $104,143
CURTISS-WRIGHT CORPORATION AND =
SUBSIDIARIES | 11
<PAGE>
OPPORTUNITIES
[GRAPHIC OMITTED]
[GRAPHIC OMITTED]
Nuclear Marine Market
We will continue our commitment to support the U.S. Navy's nuclear =
fleet.
[GRAPHIC OMITTED]
Systems Management
An industry focus today is on systems that manage the entire flow =
control
process.
FLOW CONTROL
Our flow control business is well-known for its highly engineered, =
leakless
valves for nuclear power generation applications. We improved our =
distribution
capabilities to the nuclear industry and the breadth of our product =
line with
the acquisition of Enertech in 1998. We now not only manufacture our =
own
products but also distribute complementary products of others to the =
commercial
nuclear industry. In 1999, we acquired Farris Engineering, a supplier =
of
pressure-relief valves to the process industry. We significantly =
expanded our
market reach to include the chemical, oil and gas, and pharmaceutical
industries. This expanded our product line and opened a new =
distribution channel
to these additional
[GRAPHIC OMITTED]
12 | CURTISS-WRIGHT CORPORATION AND SUBSIDIARIES
<PAGE>
[GRAPHIC OMITTED]
Capabilities
Our welding capability is one of the key components of our leakless =
valve
technology.
Our actions have significantly expanded our product lines and served =
markets.
markets for our traditional valves. Our leakless valve technology has
performance advantages in nonnuclear applications as well, and the =
Farris
addition improves our access to those opportunities.
As we have expanded our Flow Control business, we have maintained our =
strong
support relationship with the U.S. Navy. During the recent decline in =
the
construction rate of nuclear submarines, we have kept in place the =
manufacturing
and testing capabilities required to support Navy programs while other =
suppliers
have chosen to curtail their participation or exit this area entirely. =
We have
taken advantage of this situation to expand our sales to this market. =
We have
made a long-term commitment to what has been and will continue to be an
important market for us.
Growth Opportunities
The market for our type of high-end technology in the flow control =
arena is
growing, and we are developing products that apply our valve technology =
to areas
beyond our traditional applications. We also see more demand for =
management
systems for flow control processes, which make use of smart-valve =
technology
that not only regulates flow but also gathers information, transmits it =
to a
data collection center for evaluation, and receives and executes =
instructions
for adjusting control settings. Our valve designs are uniquely suited =
to serve
this demand.
Opportunities for growth exist within our naval markets. Growing =
concern over
maintaining minimum force requirements is driving consideration of =
accelerating
construction of new nuclear submarines to replace retiring vessels. In =
addition,
we now are providing an unprecedented degree of technical support to =
the U.S.
Navy. We also are developing valves with materials of construction that =
offer
superior resistance to corrosion from sea water, and are developing =
shipboard
flow control systems that reduce manning requirements.
THE LAST FIVE YEARS
(1995-1999)
Our acquisition program generated sales growth in our Flow Control =
segment as we
broadened both our product line and the markets we participate in.
[The following table was depicted as a line chart in the printed =
material.]
95 $23,792
96 $23,298
97 $26,664
98 $38,014
99 .................... $64,965
CURTISS-WRIGHT CORPORATION AND =
SUBSIDIARIES | 13
<PAGE>
QUARTERLY RESULTS OF OPERATIONS (Unaudited)
<TABLE>
<CAPTION>
=
- -------------------------------------------------------
(In thousands, except per share amounts) First Second =
Third Fourth
- ------------------------------------------------------------------------=
- --------------------------
<S> <C> <C> =
<C> <C> =20
1999 Quarters:
Sales $ 70,350 $ 70,195 =
$ 69,009 $ 83,709
Gross profit 25,018 24,680 =
23,881 28,832
Net earnings 7,982 8,279 =
13,985 8,799
Earnings per share:
Basic earnings per common share $ .79 $ .82 =
$ 1.38 $ .87
Diluted earnings per common share $ .78 $ .79 =
$ 1.38 $ .87
Dividends per common share $ .13 $ .13 =
$ .13 $ .13
- ------------------------------------------------------------------------=
- --------------------------
1998 Quarters:
Sales $ 60,846 $ 59,405 =
$ 62,603 $ 66,559
Gross profit 18,122 21,749 =
20,851 21,292
Net earnings 6,605 7,701 =
6,758 7,989
Earnings per share:
Basic earnings per common share $ .65 $ .76 =
$ .66 $ .78
Diluted earnings per common share $ .64 $ .75 =
$ .66 $ .77
Dividends per common share $ .13 $ .13 =
$ .13 $ .13
- ------------------------------------------------------------------------=
- --------------------------
</TABLE>
Net earnings for the third quarter of 1999 includes a net insurance =
settlement
of $7,354,000 or $0.72 per diluted share.
CONSOLIDATED SELECTED FINANCIAL DATA (Unaudited)
<TABLE>
<CAPTION>
=
- ------------------------------------------------------------
(In thousands, except per share data) 1999 1998 =
1997 1996 1995
- ------------------------------------------------------------------------=
- -------------------------------
<S> <C> <C> =
<C> <C> <C> =20
Sales $293,263 $249,413 =
$219,395 $170,536 $154,446
Net earnings 39,045 29,053 =
27,885 16,109 18,169
Total assets 387,126 352,740 =
284,708 267,164 246,201
Long-term debt 34,171 20,162 =
10,347 10,347 10,347
Basic earnings per common share: $ 3.86 $ 2.85 $ =
2.74 $ 1.59 $ 1.79
Diluted earnings per common share $ 3.82 $ 2.82 $ =
2.71 $ 1.58 $ 1.79
Cash dividends $ .52 $ .52 $ =
.505 $ .50 $ .50
- ------------------------------------------------------------------------=
- -------------------------------
</TABLE>
See notes to consolidated financial statements for additional financial
information.
FORWARD-LOOKING STATEMENTS
This Annual Report contains not only historical information but also
forward-looking statements regarding expectations for future company
performance. Forward-looking statements involve risk and uncertainty. =
Please
refer to the Company's 1999 Annual Report on Form 10-K for a discussion =
relating
to forward-looking statements contained in this Annual Report and =
factors that
could cause future results to differ from current expectations.
14 | CURTISS-WRIGHT CORPORATION AND SUBSIDIARIES
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS:
Curtiss-Wright Corporation continued to build on improving sales and =
operating
performance in 1999. Sales for the year totaled $293.3 million, =
reflecting an
18% increase over 1998 sales of $249.4 million and 34% above 1997 sales =
of
$219.4 million. Operating income, in the aggregate, increased 41% from =
$36.3
million in 1998 to $51.2 million in 1999. Net earnings for the =
Corporation
increased to $39.0 million, or $3.82 per diluted share for 1999, 34% =
above 1998
net earnings of $29.1 million, or $2.82 per diluted share and 40% above =
1997 net
earnings. New orders received in 1999 totaled $295.7 million, =
increasing 27% and
14% compared with orders received in 1998 and 1997, respectively. =
Backlog at
December 31, 1999 stands at $212.8 million compared with $198.3 at =
December 31,
1998 and $149.2 million at December 31, 1997.
Included in the 1999 performance was the benefit of a major settlement =
of
litigation against an insurance carrier for the recovery of =
environmental
remediation costs. The settlement, net of taxes, associated litigation =
expenses
and amounts recognized for additional related environmental costs, =
added $7.4
million or $.72 per diluted share to net earnings for the year. The =
Corporation
recognized other insurance claim proceeds in late 1998, which added =
$1.7 million
or $.17 per diluted share to net earnings of that year. Also =
significantly
impacting 1999 earnings were costs associated with the consolidation of
operations within the Motion Control business segment, which reduced =
net
earnings by $2.3 million or $.23 per diluted share. Absent the =
settlement and
consolidation costs, net earnings for 1999 were $34.0 million or $3.33 =
per
diluted share, 17% above those of 1998.
Increases in operating income and net earnings, sales, new orders and =
backlog
for 1999 largely reflect the recent acquisitions made by the =
Corporation. Since
April 1998, the Corporation has acquired six new businesses; Alpha Heat
Treaters, Enertech, Drive Technology, Metallurgical Processing, Farris
Engineering and Sprague. In the aggregate, these businesses had sales =
in 1999 of
$59.9 million. Acquisitions are discussed further in Note 2 to the =
Consolidated
Financial Statements, and in the Segment Performance section below.
Sales increases for 1998, as compared with 1997, occurred in all of the
Corporation's business operating segments. Sales from acquisitions =
(Enertech,
acquired on July 31, 1998 and Alpha Heat Treaters acquired on April 30, =
1998)
augmented this increase. Net earnings for 1998, as compared with 1997, =
were
impaired by the high level of additional charges for anticipated losses =
on
military development programs, inventory adjustments and costs related =
to the
consolidation of manufacturing operations within the Motion Control =
business
segment, as detailed in the Segment Performance section below. In the =
aggregate,
1998 net earnings were reduced by $3.9 million or $.38 per share as a =
result of
these charges. Offsetting those charges was the aforementioned =
recognition in
1998 of insurance claims proceeds. The 1997 earnings results included a =
one-time
gain from the sale of excess real estate which, after the benefit of a
capital-loss carryforward, added $2.0 million or $.20 per share. Net =
earnings
for 1997 had also been impacted by losses caused by significant =
overruns on
military actuation development contracts.
SEGMENT PERFORMANCE
Motion Control
The Corporation's Motion Control segment posted sales of $124.2 million =
for
1999, 18% above sales reported for the prior year. Higher sales largely =
reflect
the acquisition of Drive Technology on December 31, 1998. Sales of =
commercial
aircraft actuation products also improved for 1999 over those of the =
prior year,
reflecting Boeing's increased production levels for commercial =
aircraft. Net
earnings, which totaled $5.2 million in 1999, also benefited from cost =
and
performance improvements for these programs. Sales for aircraft =
component
overhaul and repair services improved slightly for 1999 in comparison =
with the
prior year, but sales of military aircraft actuation products declined.
Net earnings for the Motion Control segment were impacted in 1999 by =
substantial
one-time costs associated with the consolidation of its manufacturing =
operations
into its expanded Shelby, NC facility and with the move of certain =
overhaul and
repair services to a new location in Gastonia, NC. Expenses related to =
the
consolidation activities, including costs related to the previously =
announced
shutdown of our Fairfield, NJ facility, totaled approximately $3.8 =
million in
1999, as compared to $.9 million in 1998. Discussions are currently =
underway for
the sale of this property.
Public information indicates that Boeing's scheduled delivery rate of =
commercial
aircraft will be down significantly in the year 2000. Estimates are for
deliveries of 480 aircraft, which would represent a decline in excess =
of 22%
from the 1999 level of 620 planes.
CURTISS-WRIGHT CORPORATION AND =
SUBSIDIARIES | 15
<PAGE>
While Boeing is an important and valued customer, the acquisitions and =
internal
development activities of the Corporation over the past several years =
in other
business areas have reduced the potential impact of the production =
cycles of the
commercial aircraft market on overall sales. Additionally, in 1999 the
Corporation was awarded a new Boeing contract for the retrofit of =
Boeing 757
aircraft torque limiters. The potential for generating additional =
revenue also
exists to the extent the Corporation provides the associated =
installation
service through its maintenance, repair and overhaul operations. Taking =
only
these additional retrofit production sales into consideration, it is =
estimated
that the reduction in sales to Boeing of original equipment will =
represent less
than 2% of the Corporation's total sales in 2000.
Motion Control posted a sales increase of 8% for 1998 when compared =
with 1997.
This primarily reflected the increasing level of original equipment =
manufactured
(OEM) products for Boeing. However, during 1998 the segment experienced =
a number
of cost and efficiency issues. In addition, inventory write-offs,
book-to-physical and valuation adjustments severely impacted profits =
for this
segment. In the aggregate, accounting adjustments, cost overruns on =
military
development contracts and costs related to the consolidation of =
manufacturing
operations resulted in a charge to net earnings of $3.9 million or $.38 =
per
share in 1998. Sales of military actuation products for 1998 were =
slightly below
those of 1997 as sales resulting from the completion of "safety of =
flight"
testing on F-22 components early in 1998 were offset by the end of an =
F-16 shaft
retrofit contract and lower foreign military sales. Sales of component =
overhaul
services to foreign regions, while slightly below expectations, were =
steady in
1998 and above 1997 levels. During 1998, the Corporation's sales of =
component
overhaul and repair services in the aggregate improved 7% compared with =
the
prior year.
Metal Treatment
The Corporation's Metal Treatment segment reported sales of $104.1 =
million in
1999, slightly lower than the record sales for metal treatment services =
in 1998
of $106.0 million. This segment has felt several of its primary markets =
soften
in 1999. Services for industrial, agricultural and certain aerospace =
customers
have declined in comparison with the prior year. Sales of heat treating =
services
benefited from the acquisition of Metallurgical Processing in June 1999 =
and
improved slightly despite a significant decline in oil tool market =
activity.
Net earnings in 1999 of $14.4 million for Metal Treatment were =
significantly
below those of 1998, reflecting lower sales and margins and increased =
operating
expenses. Operating expenses for 1999 included costs for facility =
expansions,
taking place in both North America and Europe. Three of this segment's
operations relocated into larger facilities and incurred higher =
operating costs
and temporary start-up costs as a result.
The Metal Treatment business had shown an 11% sales improvement in 1998 =
over
1997, reflecting increases in aerospace, oil tool, petrochemical and =
other
industrial markets, worldwide. In addition, 1998 sales benefited from
contributions of an additional heat-treating facility in York, =
Pennsylvania that
was acquired in April 1998. Sales improvements also reflected newly =
opened
facilities in Belgium, Germany, England and Kansas. 1998 net earnings =
for the
segment increased from 1997 by $3.3 million or 22% to $18.2 million. =
This
increase reflected improved sales in traditional markets, growth in =
producing
flapper valve components, lower overhead costs and a reduction in =
start-up costs
of new facilities. Sales and net earnings for 1997 were also =
particularly strong
as the result of a worldwide improvement in aerospace applications, =
including
peen-forming of wingskins for commercial, regional and business =
aircraft and
other metal treatment services for engine components and other aircraft =
parts.
Flow Control
The Corporation's Flow Control segment produced substantially higher =
sales and
improved earnings in 1999, as compared with 1998. Sales of $65.0 =
million were
71% above those of 1998, reflecting the acquisitions of Enertech in =
July 1998
and the Farris and Sprague business units in August 1999. Sales =
improvements for
the year also reflect additional U.S. Navy valve business resulting =
from
contracts received in 1998. Net earnings of $3.6 million in 1999 =
benefited from
the recent acquisitions, which offset higher administrative expenses =
during the
year.
The Flow Control segment posted increases in sales and net earnings of =
43% and
39% in 1998. These increases largely reflected the acquisition of =
Enertech. In
1998, sales of commer- cial valve products increased as a result of =
shipments to
a new foreign nuclear power plant. Net income for 1998 also benefited =
from
improved cost performance on valve remakes and upgrade programs, while =
net
earnings for 1997 were slightly impaired by higher administrative costs =
and
expenses relating to a commercial royalty agreement.
16 | CURTISS-WRIGHT CORPORATION AND SUBSIDIARIES
<PAGE>
CORPORATE AND OTHER EXPENSES
Operating income for the Corporation includes the recognition of =
environmental
remediation costs, related administrative expenses, costs for legal =
services to
pursue claims against related parties and related recoveries of such =
claims.
Details of expenses and related recoveries are discussed further in =
Note 11 to
the Consolidated Financial Statements.
OTHER REVENUES
The Corporation recorded nonoperating net revenues for 1999 aggregating =
$13.4
million compared with $11.7 million in 1998 and $12.3 million in 1997. =
Noncash
pension income recognized as a result of the Corporation's overfunded =
pension
plan increased 28% to $6.6 million for 1999. The amounts recorded as =
pension
income reflect the extent to which the return on plan assets exceeds =
the cost of
providing benefits in the same year, as detailed further in Note 12 to =
the
Consolidated Financial Statements. Rental income also improved when =
comparing
1999 to the prior year, primarily due to a settlement of a real estate =
tax
appeal. The Corporation recognized $.7 million of additional rental =
income from
the settlement. Investment income declines reflect lower cash balances =
available
for investments due to expenditures for acquisitions in each of the =
last two
years. In 1997, the Corporation sold two parcels of undeveloped land =
generating
net earnings of $2.0 million or $.20 per share.
CHANGES IN FINANCIAL POSITION:
Liquidity and Capital Resources
The Corporation's working capital decreased 5% at December 31, 1999, =
totaling
$124.4 million as compared with $130.8 million at December 31, 1998. =
The ratio
of current assets to current liabilities improved to 3.2 to 1 at =
December 31,
1999 compared with 2.9 to 1 at the end of 1998. The Corporation's =
balance of
cash and short-term investments totaled $35.1 million at December 31, =
1999
declining $37.1 million from balances at December 31, 1998. Declines in =
cash and
short-term investments reflect the acquisition of three businesses in =
1999,
which involved the aggregate cash outflows of $49.3 million.
Working capital changes were highlighted by an increase in accounts =
receivable
of $9.8 million and inventories of $6.5 million during the year. These =
increases
are largely due to the acquisitions of Metallurgical, Farris and =
Sprague during
1999. Current liabilities declined $11.9 million at December 31, 1999, =
compared
with the prior year end because of reclassification from current to =
long-term
status of borrowings used to fund the Drive Technology acquisition.
Acquisitions in 1999 also added $19.7 million of goodwill to the =
balance sheet
for the excess of the total purchase prices over the combined fair =
value of the
net assets acquired. In 1998, the Corporation completed an industrial =
revenue
bond (IRB) financing adding $8.4 million of debt to provide for the =
plant
expansion of the Shelby, North Carolina facility and related equipment =
purchases
necessary to meet the demands of the new Boeing contracts and the =
growth of the
overhaul service business.
At December 31, 1999, the Corporation has two credit agreements in =
effect
aggregating $100.0 million with a group of five banks. The Revolving =
Credit
Agreement commits a maximum of $60.0 million to the Corporation for =
cash
borrowings and letters of credit. The Corporation also has in effect a
Short-Term Credit Agreement, which allows for cash borrowings of $40.0 =
million.
The maximum unused credit available under these agreements at December =
31, 1999
was $58.2 million. Cash Borrowings under the Revolving Credit =
Agreements at
December 31, 1999 were $19.5 million. During 1998, the Corporation =
maintained a
$22.5 million Revolving Credit lending facility and a $22.5 million =
Short-term
Credit Agreement. As discussed above and in Note 9 to the Consolidated =
Financial
Statements, these credit agreements were used to finance the Drive =
Technology
acquisition at December 31, 1998. Borrowings under these credit =
agreements
totaled $20.5 million at December 31, 1998, all of which was =
transferred to the
new agreement in 1999.
Capital expenditures were $19.9 million in 1999, increasing from $10.6 =
million
spent in 1998 and $11.2 million in 1997. Principal expenditures were =
for
additional equipment to service the facility expansions of Metal =
Treatment. In
2000, capital expenditures are expected to decline modestly with =
continued
expansion of the Metal Treatment segment and expenditures for equipment =
in both
the Motion Control and Flow Control segments. At December 31, 1999, the
Corporation had commitments of $1.7 million primarily for the purchase =
of
capital equipment in 2000.
Cash generated from operations and current short-term investment =
holdings are
considered adequate to meet the Corporation's overall cash requirements =
for the
upcoming year. This includes planned capital expenditures, anticipated =
debt
repayments, normal dividends, satisfying environmental obligations and =
other
working capital requirements.
CURTISS-WRIGHT CORPORATION AND =
SUBSIDIARIES | 17
<PAGE>
REPORT OF THE CORPORATION
The consolidated financial statements appearing on pages 19 through 35 =
of this
Annual Report have been prepared by the Corporation in conformity with =
generally
accepted accounting principles. The financial statements necessarily =
include
some amounts that are based on the best estimates and judgments of the
Corporation. Other financial information in the Annual Report is =
consistent with
that in the financial statements.
The Corporation maintains accounting systems, procedures and internal =
accounting
controls designed to provide reasonable assurance that assets are =
safeguarded
and that transactions are executed in accordance with the appropriate =
corporate
authorization and are properly recorded. The accounting systems and =
internal
accounting controls are augmented by written policies and procedures;
organizational structure providing for a division of responsibilities; =
selection
and training of qualified personnel and an internal audit program. The =
design,
monitoring, and revision of internal accounting control systems =
involve, among
other things, management's judgment with respect to the relative cost =
and
expected benefits of specific control measures.
PricewaterhouseCoopers LLP, independent certified public accountants, =
have
examined the Corporation's consolidated financial statements as stated =
in their
report. Their examination included a study and evaluation of the =
Corporation's
accounting systems, procedures and internal controls, and tests and =
other
auditing procedures, all of a scope deemed necessary by them to support =
their
opinion as to the fairness of the financial statements.
The Audit Committee of the Board of Directors, composed entirely of =
Directors
from outside the Corporation, among other things, makes recommendations =
to the
Board as to the nomination of independent auditors for appointment by
stockholders and considers the scope of the independent auditors' =
examination,
the audit results and the adequacy of internal accounting controls of =
the
Corporation. The independent auditors have direct access to the Audit =
Committee,
and they meet with the Committee from time to time with and without =
management
present, to discuss accounting, auditing, internal control and =
financial
reporting matters.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholders of
Curtiss-Wright Corporation
In our opinion, the accompanying consolidated balance sheets and the =
related
consolidated statements of earnings and stockholders' equity and of =
cash flows
present fairly, in all material respects, the financial position of
Curtiss-Wright Corporation and its subsidiaries at December 31, 1999 =
and 1998,
and the results of their operations and their cash flows for each of =
the three
years in the period ended December 31, 1999, in conformity with =
accounting
principles generally accepted in the United States. These financial =
statements
are the responsibility of the Company's management; our responsibility =
is to
express an opinion on these financial statements based on our audits. =
We
conducted our audits of these statements in accordance with auditing =
standards
generally accepted in the United States, which require that we plan and =
perform
the audit to obtain reasonable assurance about whether the financial =
statements
are free of material misstatement. An audit includes examining, on a =
test basis,
evidence supporting the amounts and disclosures in the financial =
statements,
assessing the accounting principles used and significant estimates made =
by
management, and evaluating the overall financial statement =
presentation. We
believe that our audits provide a reasonable basis for the opinion =
expressed
above.
Florham Park, New Jersey
January 31, 2000
18 | Curtiss-Wright Corporation and Subsidiaries
<PAGE>
CONSOLIDATED STATEMENTS OF EARNINGS
<TABLE>
<CAPTION>
=
=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D
For the years ended December 31, (In thousands except per share data) =
1999 1998 1997
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D
<S> =
<C> <C> <C> =20
Net sales =
$ 293,263 $ 249,413 $ 219,395
Cost of sales =
190,852 167,399 143,706
- ------------------------------------------------------------------------=
- ------------------------------------------
Gross profit =
102,411 82,014 75,689
Research and development costs =
2,801 1,346 1,877
Selling expenses =
17,015 11,606 7,979
General and administrative expenses =
43,121 34,277 32,694
Environmental remediation and administrative expenses, =
=20
net of recovery =
(11,683) (1,562) 3,132
- ------------------------------------------------------------------------=
- ------------------------------------------
=
=20
Operating income =
51,157 36,347 30,007
Investment income, net =
2,295 3,206 3,432
Rental income, net =
4,580 3,299 3,342
Pension income, net =
6,574 5,126 3,312
Other income (expense), net =
(8) 87 2,193
Interest expense =
1,289 485 387
- ------------------------------------------------------------------------=
- ------------------------------------------
=
=20
Earnings before income taxes =
63,309 47,580 41,899
Provision for income taxes =
24,264 18,527 14,014
- ------------------------------------------------------------------------=
- ------------------------------------------
Net earnings =
$ 39,045 $ 29,053 $ 27,885
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D
Net Earnings per Common Share: =
=20
Basic earnings per share =
$ 3.86 $ 2.85 $ 2.74
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D
Diluted earnings per share =
$ 3.82 $ 2.82 $ 2.71
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D
</TABLE>
See notes to consolidated financial statements.
CURTISS-WRIGHT CORPORATION AND =
SUBSIDIARIES | 19
<PAGE>
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
=
=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
December 31, (In thousands) =
1999 1998
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D
<S> =
<C> <C> =20
Assets:
Current assets:
Cash and cash equivalents =
$ 9,547 $ 5,809
Short-term investments =
25,560 66,444
Receivables, net =
70,729 60,912
Deferred tax assets =
8,688 7,841
Inventories =
60,584 54,048
Other current assets =
5,262 3,519
- ------------------------------------------------------------------------=
- -------------------------------------------
Total current assets =
180,370 198,573
- ------------------------------------------------------------------------=
- -------------------------------------------
Property, plant and equipment, at cost:
Land =
5,267 4,645
Buildings and improvements =
95,631 91,325
Machinery, equipment and other =
141,102 141,245
- ------------------------------------------------------------------------=
- -------------------------------------------
=
242,000 237,215
Less, accumulated depreciation =
147,422 162,704
- ------------------------------------------------------------------------=
- -------------------------------------------
Property, plant and equipment, net =
94,578 74,511
Prepaid pension costs =
50,447 43,822
Goodwill, net =
50,357 30,724
Property held for sale =
2,653 322
Other assets =
8,721 4,788
- ------------------------------------------------------------------------=
- -------------------------------------------
Total assets =
$ 387,126 $ 352,740
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D
Liabilities:
Current liabilities:
Current portion of long-term debt =
$ 4,047 $ 20,523
Accounts payable =
13,304 13,433
Accrued expenses =
19,463 17,254
Income taxes payable =
5,203 5,052
Other current liabilities =
13,915 11,548
- ------------------------------------------------------------------------=
- -------------------------------------------
Total current liabilities =
55,932 67,810
- ------------------------------------------------------------------------=
- -------------------------------------------
Long-term debt =
34,171 20,162
Deferred income taxes =
14,113 9,714
Accrued postretirement benefit costs =
8,515 9,575
Other liabilities =
16,040 15,886
- ------------------------------------------------------------------------=
- -------------------------------------------
Total liabilities =
128,771 123,147
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D
Contingencies and Commitments (Notes 9 & 14)
Stockholders' Equity:
Preferred stock, $1 par value, 650,000 authorized, none issued =
-- --=20
Common stock, $1 par value, 22,500,000 authorized, 15,000,000 shares =
issued
(outstanding shares 10,040,250 for 1999 and 10,190,790 for 1998) =
15,000 15,000
Additional paid in capital =
51,599 51,669
Retained earnings =
376,006 342,218
Unearned portion of restricted stock =
(24) (40)
Accumulated other comprehensive income =
(2,622) (2,800)
- ------------------------------------------------------------------------=
- -------------------------------------------
=
439,959 406,047
Less, treasury stock at cost (4,959,750 shares for 1999 and 4,809,210 =
shares for 1998) 181,604 176,454
- ------------------------------------------------------------------------=
- -------------------------------------------
Total stockholders' equity =
258,355 229,593
- ------------------------------------------------------------------------=
- -------------------------------------------
Total liabilities and stockholders' equity =
$ 387,126 $ 352,740
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D
</TABLE>
See notes to consolidated financial statements.
20 | CURTISS-WRIGHT CORPORATION AND SUBSIDIARIES
<PAGE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
=
=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D
For the years ended December 31, (In thousands) =
1999 1998 1997
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D
<S> =
<C> <C> <C> =20
Cash flows from operating activities:
Net earnings =
$ 39,045 $ 29,053 $ 27,885
- ------------------------------------------------------------------------=
- -----------------------------------------
Adjustments to reconcile net earnings to net cash provided by
operating activities:
Depreciation and amortization =
12,864 9,661 9,097
Noncash pension income =
(6,574) (5,126) (3,312)
Net (gains) losses on sales and disposals of real estate
and equipment =
-- 94 (1,968)
Net (gains) losses on short-term investments =
390 (266) (1,717)
Deferred taxes =
2,300 1,494 76
Changes in operating assets and liabilities, net of businesses
acquired:
Proceeds from sales of trading securities =
394,355 374,802 342,416
Purchases of trading securities =
(353,861) (379,097) (349,500)
(Increase) decrease in receivables =
6,878 (7,181) (4,929)
(Increase) decrease in inventories =
2,830 734 (3,624)
Increase (decrease) in progress payments =
(13,057) (1,248) 1,934
Increase (decrease) in accounts payable and
accrued expenses =
(1,734) 2,470 (666)
Increase in income taxes payable =
151 207 1,656
Increase in other assets =
(1,016) (320) (548)
Increase (decrease) in other liabilities =
241 (236) (2,458)
Other, net =
(1,758) 881 (879)
- ------------------------------------------------------------------------=
- -----------------------------------------
Total adjustments =
42,009 (3,131) (14,422)
- ------------------------------------------------------------------------=
- -----------------------------------------
Net cash provided by operating activities =
81,054 25,922 13,463
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D
Cash flows from investing activities:
Proceeds from sales and disposals of real estate and equipment =
2,586 950 3,460
Additions to property, plant and equipment =
(19,883) (10,642) (11,231)
Acquisition of new businesses, net of cash =
(49,322) (41,711) --
- ------------------------------------------------------------------------=
- -----------------------------------------
Net cash used for investing activities =
(66,619) (51,403) (7,771)
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D
Cash flows from financing activities:
Proceeds from short-term borrowing =
-- 20,523 --
Proceeds from long-term borrowing =
-- 9,815 --
Common stock repurchase =
(5,440) (611) --
Dividends paid =
(5,257) (5,309) (5,137)
- ------------------------------------------------------------------------=
- -----------------------------------------
Net cash (used for) provided by financing activities =
(10,697) 24,418 (5,137)
- ------------------------------------------------------------------------=
- -----------------------------------------
Net increase (decrease) in cash and cash equivalents =
3,738 (1,063) 555
Cash and cash equivalents at beginning of year =
5,809 6,872 6,317
- ------------------------------------------------------------------------=
- -----------------------------------------
Cash and cash equivalents at end of year =
$ 9,547 $ 5,809 $ 6,872
- ------------------------------------------------------------------------=
- -----------------------------------------
Supplemental disclosure of non-cash investing activities:
Acquisitions:
Fair value of assets acquired: =
$ 54,868 $ 54,635 $ --
Liabilities assumed =
(5,034) (10,857) --
Cash acquired =
(512) (2,067) --
- ------------------------------------------------------------------------=
- -----------------------------------------
Net cash paid =
$ 49,322 $ 41,711 $ --
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D
</TABLE>
See notes to consolidated financial statements.
CURTISS-WRIGHT CORPORATION AND =
SUBSIDIARIES | 21
<PAGE>
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D
=
Unearned Accumulated
Additional =
Portion of Other
Common Paid in =
Retained Restricted Comprehensive Comprehensive Treasury
(In thousands) Stock Capital =
Earnings Stock Awards Income Income Stock
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D
<S> <C> <C> <C> =
<C> <C> <C> <C> =20
December 31, 1996 $10,000 $57,127 =
$299,740 $ (608) $(1,506) $181,390
- ------------------------------------------------------------------------=
- ----------------------------------------------------------
Comprehensive income:
Net earnings =
27,885 $27,885
Translation adjustments, net =
(1,783) (1,783)
- ------------------------------------------------------------------------=
- ----------------------------------------------------------
Total comprehensive income =
$26,102
- ------------------------------------------------------------------------=
- ----------------------------------------------------------
Common dividends =
(5,137)
Stock options exercised, net (117) =
(376)
Amortization of earned
portion of restricted stock awards =
266
Two-for-one stock split 5,000 (5,000) =
(4,014) (4,014)
- ------------------------------------------------------------------------=
- ----------------------------------------------------------
December 31, 1997 15,000 52,010 =
318,474 (342) (3,289) 177,000
- ------------------------------------------------------------------------=
- ----------------------------------------------------------
Comprehensive income:
Net earnings =
29,053 $29,053
Translation adjustments, net =
489 489
- ------------------------------------------------------------------------=
- ----------------------------------------------------------
Total comprehensive income =
$29,542
- ------------------------------------------------------------------------=
- ----------------------------------------------------------
Common dividends =
(5,309)
Common stock repurchase =
612
Stock options exercised, net (449)
Amortization of earned
portion of restricted stock awards 108 =
302 (1,158)
- ------------------------------------------------------------------------=
- ----------------------------------------------------------
December 31, 1998 15,000 51,669 =
342,218 (40) (2,800) 176,454
- ------------------------------------------------------------------------=
- ----------------------------------------------------------
Comprehensive income:
Net earnings =
39,045 $39,045
Translation adjustments, net =
178 178
- ------------------------------------------------------------------------=
- ----------------------------------------------------------
Total comprehensive income =
$39,223
- ------------------------------------------------------------------------=
- ----------------------------------------------------------
Common dividends =
(5,257)
Common stock repurchase =
5,400
Stock options exercised, net (70) =
(290)
Amortization of earned
portion of restricted
stock awards =
16
- ------------------------------------------------------------------------=
- ----------------------------------------------------------
December 31, 1999 $15,000 $51,599 =
$376,006 $ (24) $(2,622) $181,604
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D
</TABLE>
See notes to consolidated financial statements.
22 | CURTISS-WRIGHT CORPORATION AND SUBSIDIARIES
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Curtiss-Wright Corporation and its subsidiaries (the "Corporation") is =
a
diversified multinational manufacturing and service concern that =
designs,
manufactures and overhauls precision components and systems and =
provides highly
engineered services to the aerospace, defense, automotive, =
shipbuilding,
processing, oil, petrochemical, agricultural equipment, railroad, power
generation, and metalworking industries. Operations are conducted =
through eight
manufacturing facilities, thirty-seven metal treatment service =
facilities and
four component overhaul locations.
A. Principles of Consolidation
The financial statements of the Corporation have been prepared in =
conformity
with generally accepted accounting principles and such preparation has =
required
the use of management's estimates in presenting the consolidated =
accounts of the
Corporation, after elimination of all significant intercompany =
transactions and
accounts. Management's estimates include assumptions that affect the =
reported
amount of assets, liabilities, revenue and expenses in the accompanying
financial statements. Actual results may differ from these estimates. =
Certain
prior year information has been restated to conform to current year's
presentation.
B. Cash Equivalents
Cash equivalents consist of money market funds and commercial paper =
that are
readily convertible into cash, all with original maturity dates of =
three months
or less.
C. Progress Payments
Progress payments received under U.S. Government prime contracts and
subcontracts have been deducted from receivables and inventories as =
disclosed in
the appropriate following notes.
With respect to such contracts, the Government has a lien on all =
materials and
work-in-process to the extent of progress payments.
D. Revenue Recognition
The Corporation records sales and related profits for the majority of =
its
operations as units are shipped, services are rendered, or as =
engineering
milestones are achieved. Sales and estimated profits under long-term =
valve
contracts are recognized under the percentage-of-completion method of
accounting. Profits are recorded pro rata, based upon current estimates =
of
direct and indirect manufacturing and engineering costs to complete =
such
contracts.
Losses on contracts are provided for in the period in which the loss =
becomes
determinable. Revisions in profit estimates are reflected on a =
cumulative basis
in the period in which the basis for such revisions becomes known.
In accordance with industry practice, inventoried costs contain amounts =
relating
to contracts and programs with long production cycles, a portion of =
which will
not be realized within one year.
E. Property, Plant and Equipment
Property, plant and equipment are carried at cost. Major renewals and
betterments are capitalized, while maintenance and repairs that do not =
improve
or extend the life of the assets are expensed in the period they occur.
Depreciation is computed using the straight-line method based upon the =
estimated
useful lives of the respective assets.
Average useful lives for property and equipment are as follows:
Buildings and improvements 10 to =
40 years
Machinery and equipment 4 to =
15 years
Office furniture and equipment 3 to =
10 years
=20
F. Intangible Assets
Intangible assets consist primarily of the excess purchase price of the
acquisitions over the fair value of net tangible assets acquired. The
Corporation amortizes such costs on a straight-line basis over the =
estimated
period benefited but not exceeding 30 years.
The Corporation periodically reviews the recoverability of all =
long-term assets,
including the related amortization period, whenever events or changes =
in
circumstances indicate that the carrying amount of an asset might not =
be
recoverable. The Corporation determines whether there has been an =
impairment by
comparing the anticipated undiscounted future net cash flows to the =
related
asset's carrying value. If an asset is considered impaired, the asset =
is written
down to fair value which is either deter mined based on discounted cash =
flows or
appraised values, depending on the nature of the asset. There were no =
such write
downs in 1999, 1998, and 1997.
CURTISS-WRIGHT CORPORATION AND =
SUBSIDIARIES | 23
<PAGE>
G. Financial Instruments
The financial instruments with which the Corporation is involved are =
primarily
of a traditional nature. The Corporation's short-term investments are =
comprised
of equity and debt securities, all classified as trading securities, =
which are
carried at their fair value based upon the quoted market prices of =
those
investments at December 31, 1999 and 1998. Accordingly, net realized =
and
unrealized gains and losses on trading securities are included in net =
earnings.
The Corporation also, where circumstances warrant, participates in =
derivative
financial instruments consisting primarily of commitments to purchase =
stock.
H. Environmental Costs
The Corporation establishes a reserve for a potential environmental
responsibility when it concludes that a determination of legal =
liability is
probable, based upon the advice of counsel. Such amounts, if =
quantifiable,
reflect the Corporation's estimate of the amount of that liability. If =
only a
range of potential liability can be estimated, a reserve will be =
established at
the low end of that range. Such reserves represent today's values of =
anticipated
remediation not recognizing any recovery from insurance carriers, or =
third-party
legal actions, and are not discounted.
I. Accounting for Stock-Based Compensation
The Corporation follows Accounting Principles Board Opinion No. 25, =
"Accounting
for Stock Issued to Employees" (APB No. 25), in accounting for its =
employee
stock options, rather than the alternative method of accounting =
provided under
Statement of Financial Accounting Standards No. 123, "Accounting for =
Stock-Based
Compensation" (SFAS No. 123). Under APB No. 25, the Corporation does =
not
recognize compensation expense on stock options granted to employees =
when the
exercise price of the options is equal to the market price of the =
underlying
stock on the date of the grant. Further information concerning options =
granted
under the Corporation's Long-Term Incentive Plan is provided in Note =
10.
J. Capital Stock
On April 11, 1997, the stockholders approved an increase in the number =
of
authorized common shares from 12,500,000 to 22,500,000. On November 17, =
1997,
the Board of Directors declared a two-for-one stock split in the form =
of a 100%
stock dividend. The split, in the form of one share of common stock for =
each
share outstanding, was payable on December 23, 1997. To effectuate the =
stock
split, the Corporation issued 5,000,000 original shares at $1.00 par =
value from
capital surplus and the remaining 87,271 shares from its treasury =
account at
cost, with a corresponding reduction in retained earnings of =
$4,014,000.
Accordingly, all references throughout this annual report to number of =
shares,
per share amounts, stock option data and market prices of the =
Corporation's
common stock have been restated to reflect the effect of the split for =
all
periods presented.
In October 1998 the Corporation initiated a stock repurchase program, =
approved
by its Board of Directors, under which the Company is authorized to =
purchase up
to 300,000 shares or approximately 3% of its outstanding common stock. =
Purchases
were authorized to be made from time to time in the open market or =
privately
negotiated transactions, depending on market and other conditions, =
based upon
the view of the Corporation that recent market prices of the stock did =
not
adequately reflect the true value of the Corporation. Accordingly, it
represented an attractive investment opportunity for the Corporation.
K. Comprehensive Income
Effective January 1, 1998, the Corporation adopted Statement of =
Financial
Accounting Standards No. 130, "Reporting Comprehensive Income" (SFAS =
No. 130).
SFAS No. 130 establishes standards for reporting and displaying changes =
in
equity from non-owner sources. Total comprehensive income for the years =
ended
December 31, 1999, 1998 and 1997 is shown in the Statements of =
Stockholders'
Equity.
24 | CURTISS-WRIGHT CORPORATION AND SUBSIDIARIES
<PAGE>
L. Earnings per Share
The Corporation is required to report both basic earnings per share =
(EPS) as
based on the weighted average number of common shares outstanding and =
diluted
earnings per share as based on the weighted average number of common =
shares
outstanding plus all potentially dilutive common shares issuable. At =
December
31, 1999, the Corporation had approximately 334,000 additional stock =
options
outstanding that could potentially dilute basic EPS in the future. The =
effect of
these options were not included in the computation of diluted EPS =
because to do
so would have been antidilutive for the period. Earnings per share =
calculations
for the years ended December 31, 1999, 1998 and 1997 are as follows:
=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D
Weighted
Average
Net Shares =
Per Share
(In thousands, except per share data) Income Outstanding =
Amount
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D
1999
Basic earnings per share $39,045 10,115 =
$ 3.86
Effective of dilutive securities:
Stock options 99
Deferred stock compensation 1
- ------------------------------------------------------------------------=
- --------
Diluted earnings per share $39,045 10,215 =
$ 3.82
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D
1998
Basic earnings per share $29,053 10,194 =
$ 2.85
Effective of dilutive securities:
Stock options 109
Deferred stock compensation 2
- ------------------------------------------------------------------------=
- --------
Diluted earnings per share $29,053 $10,305 =
$ 2.82
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D
1997
Basic earnings per share $27,885 10,172 =
$ 2.74
Effective of dilutive securities:
Stock options 118
Deferred stock compensation 1
- ------------------------------------------------------------------------=
- --------
Diluted earnings per share $27,885 10,291 =
$ 2.71
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D
M. Newly Issued Accounting Pronouncements
In June 1999, the Financial Accounting Standards Board issued Statement =
No. 137
deferring the effective date of Statement No. 133, "Accounting for =
Derivatives
and Hedging Activities (SFAS No. 133). SFAS No. 133 is now effective =
for all
fiscal quarters of all fiscal years beginning after June 15, 2000 =
(January 1,
2001 for the Corporation). SFAS No. 133 requires that all derivative =
instruments
be recorded on the balance sheet at their fair value. Changes in the =
fair value
of derivatives are recorded each period in current earnings or other
comprehensive income, depending on whether a derivative is designated =
as part of
a hedge transaction and, if it is, the type of hedge transaction. =
Management of
the Corporation anticipates that, due to its limited use of derivative
instruments, the adoption of SFAS No. 133 will not have a significant =
effect on
its results of operations or its financial position.
2. ACQUISITIONS
The Corporation acquired three businesses in 1999 and three in 1998, as
described below. All companies acquired have been accounted for as =
purchases
with the excess of the purchase price over the estimated fair value of =
the net
assets acquired recorded as goodwill. The results of each operation =
have been
included in the consolidated financial results of the Corporation from =
the date
of acquisition.
Farris Engineering and Sprague Products
On August 27, 1999, the Corporation completed its acquisition of the =
Farris and
Sprague business units of Teledyne Fluid Systems, an Allegheny Teledyne
Incorporated company.
Farris is one of the world's leading manufacturers of pressure-relief =
valves for
use in processing industries, which include refineries, =
petrochemical/chemical
plants and pharmaceutical manufacturing. Products are manufactured in
Brecksville, Ohio and Brantford, Ontario. A service and distribution =
center is
located in Edmonton, Alberta. The Sprague business, also located in =
Brecksville,
Ohio, provides specialty hydraulic and pneumatic valves and air-driven =
pumps and
gas boosters under the "Sprague" and "PowerStar" trade names for =
general
industrial applications as well as directional control valves for truck
transmissions and car transport carriers.
The Corporation acquired the net assets of the Farris and Sprague =
businesses for
approximately $44.0 million in cash, subject to adjustment as provided =
for in
the agreement. This acquisition has been accounted for as a purchase in =
the
third quarter of 1999. The excess of purchase price over the fair value =
of the
net assets acquired is approximately $18.3 million and is being =
amortized over
30 years. The fair value of the net assets acquired was based on =
preliminary
estimates and may be revised at a later date.
Metallurgical Processing Inc.
On June 30, 1999, the Corporation acquired Metallurgical Processing, =
Inc. (MPI),
a Midwest supplier of commercial heat-treating services, primarily to =
the
automotive and industrial markets. MPI provides a number of =
metal-treatment
processes including carburizing, hardening, and carbonitriding and =
services a
broad spectrum of customers from its Fort Wayne, Indiana location.
CURTISS-WRIGHT CORPORATION AND =
SUBSIDIARIES | 25
<PAGE>
The Corporation acquired the stock of MPI for approximately $7.4 =
million in cash
(of which $1.0 million has been deferred for two years) and accounted =
for the
acquisition as a purchase in the second quarter of 1999. The excess of =
purchase
price over the fair value of the net assets acquired is approximately =
$2.4
million and is being amortized over 25 years. The fair value of the net =
assets
acquired was based on preliminary estimates and may be revised at a =
later date.
Curtiss-Wright Antriebstechnik GmbH (Drive Technology)
On December 31, 1998, the Corporation completed the acquisition of the =
shares of
SIG-Antriebstechnik AG, a unit of SIG Swiss Industrial Company Holding =
Ltd., for
approximately $22.8 million in cash. The acquired company, was renamed
Curtiss-Wright Antriebstechnik GmbH (Curtiss-Wright Drive Technology, =
Ltd.), and
is a leading provider of high-technology drive solutions for three =
principal
markets: military tracked and wheeled vehicles, high-speed railroad =
trains, and
commercial marine propulsion. The Company's drive system solutions =
involve
electromechanical and electrohydraulic actuation components and systems
including electronic controls. The excess of purchase price over the =
fair value
of the net assets is approximately $17.5 million, and is being =
amortized over 30
years.
Enertech
On July 31, 1998, the Corporation purchased the assets of Enertech, LLC
(Enertech) which distributes, represents and manufactures a number of =
products
for sale into commercial nuclear power plants, both domestically and
internationally. Enertech also provides a broad range of overhaul and
maintenance services for such plants from its two principal locations =
in
California and Georgia. The Corporation acquired the net assets of =
Enertech for
approxi mately $14.2 million in cash. The excess of purchase price over =
the fair
value of the net assets is approximately $9.3 million and is being =
amortized
over 30 years.
Alpha Heat Treaters
The Corporation purchased the assets of the Alpha Heat Treaters (Alpha) =
division
of Alpha-Beta Industries, Inc. on April 30, 1998. Alpha services a =
broad
spectrum of customers from its York, Pennsylvania location and provides =
a number
of metal-treatment processes including carburizing, surface hardening, =
stress
relieving, induction hardening and black oxide surface treatment =
services. The
Corporation acquired the net assets of Alpha for approximately $6.1 =
million in
cash. The excess of purchase price over the fair value of the net =
assets is
approximately $1.0 million, which is being amortized over 25 years.
The unaudited pro forma consolidated results of operations shown below =
have been
prepared as if the above acquisitions had occurred at the beginning of =
1999 and
1998, respectively:
=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
(In thousands, except per share data) 1999 =
1998
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D
Net sales $325,893 =
$277,945
Net earnings 41,413 =
30,280
Diluted earnings per common share 4.05 =
2.94
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D
3. SHORT-TERM INVESTMENTS
The composition of short-term investments at December 31 is as follows:
=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D
(In thousands) 1999 1998
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D
Cost Fair Value Cost =
Fair Value
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D
Money market
preferred stock $11,400 $11,400 $54,797 =
$54,797
Tax-exempt money
market preferred
stock -- -- 2,995 =
2,995
Common and
preferred stocks 2,104 1,960 6,007 =
6,203
Options -- -- 49 =
49
Tax exempt revenue
bonds 12,200 12,200 2,400 =
2,400
- ------------------------------------------------------------------------=
- --------
Total short-term
investments $25,704 $25,560 $66,248 =
$66,444
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D
Investment income for the years ended December 31 consists of:
=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D
(In thousands) 1999 1998 =
1997
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D
Net realized gains on the sales of
trading securities $ 274 $ 141 =
$1,435
Interest and dividend income, net 2,361 2,940 =
1,715
Net unrealized holding (losses) gains (340) 125 =
282
- ------------------------------------------------------------------------=
- --------
Investment income, net $2,295 $3,206 =
$3,432
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D
4. RECEIVABLES
Receivables include amounts billed to customers, claims and other =
receivables
and unbilled charges on long-term contracts consisting of amounts =
recognized as
sales but not billed. Substantially all amounts of unbilled receivables =
are
expected to be billed and collected in the subsequent year.
CURTISS-WRIGHT CORPORATION AND =
SUBSIDIARIES
<PAGE>
Credit risk is generally diversified due to the large number of =
entities
comprising the Corporation's customer base and their geographic =
dispersion. The
largest single customer represented 8% of the total outstanding billed
receivables at December 31, 1999 and 7% of the total outstanding billed
receivables at December 31, 1998. The Corporation performs ongoing =
credit
evaluations of its customers and establishes appropriate allowances for =
doubtful
accounts based upon factors surrounding the credit risk of specific =
customers,
historical trends and other information.
The composition of receivables at December 31 is as follows:
=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D
(In thousands) 1999 =
1998
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D
Billed Receivables:
Trade and other receivables $66,652 =
$63,412
Less: progress payments applied 1,922 =
11,687
Allowance for doubtful accounts 3,230 =
1,910
- ------------------------------------------------------------------------=
- --------
Net billed receivables 61,500 =
49,815
- ------------------------------------------------------------------------=
- --------
Unbilled Receivables:
Recoverable costs and estimated earnings
not billed 16,473 =
17,447
Less: progress payments applied 7,244 =
6,350
- ------------------------------------------------------------------------=
- --------
Net unbilled receivables 9,229 =
11,097
- ------------------------------------------------------------------------=
- --------
Total receivables, net $70,729 =
$60,912
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D
5. INVENTORIES
Inventories are valued at the lower of cost (principally average cost) =
or
market. The composition of inventories at December 31 is as follows:
=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D
(In thousands) 1999 =
1998
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D
Raw material $10,713 =
$ 8,862
Work-in-process 14,519 =
22,802
Finished goods/component parts 28,978 =
23,130
Inventoried costs related to U.S. Government
and other long-term contracts 7,714 =
4,780
- ------------------------------------------------------------------------=
- --------
Inventories 61,924 =
59,574
Less: progress payments applied,
principally related to
long-term contracts 1,340 =
5,526
- ------------------------------------------------------------------------=
- --------
Net inventories $60,584 =
$54,048
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D
6. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
Accrued expenses at December 31 consist of the following:
=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D
(In thousands) 1999 =
1998
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D
Accrued compensation $ 7,545 =
$ 5,967
Accrued taxes other than income taxes 1,961 =
1,108
Accrued insurance 1,623 =
1,662
All other 8,334 =
8,517
- ------------------------------------------------------------------------=
- --------
Total accrued expenses $19,463 =
$17,254
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D
Other current liabilities at December 31 consist of the following:
=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D
(In thousands) 1999 =
1998
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D
Customer advances $ 2,338 =
$ 4,655
Current portion of environmental reserves 2,717 =
1,881
Anticipated losses on long-term contracts 2,280 =
1,878
Due tenants on tax recovery 3,520 =
--
All other 3,060 =
3,134
- ------------------------------------------------------------------------=
- --------
Total other current liabilities $13,915 =
$11,548
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D
7. INCOME TAXES
There was no valuation allowance recorded in 1999 or 1998 because it is =
more
likely than not that all deferred tax assets will be realized. During =
1997, the
Corporation fully utilized its capital loss carryforward of $3,252,000 =
that
would have expired on December 31, 1997. In 1997, the valuation =
allowance of
$1,212,000 that was established to offset this deferred tax asset was =
reversed.
Earnings before income taxes for the years ended December 31 are:
=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D
(In thousands) 1999 1998 =
1997
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D
Domestic $47,088 $33,320 =
$29,965
Foreign 16,221 14,260 =
11,934
- ------------------------------------------------------------------------=
- --------
Total $63,309 $47,580 =
$41,899
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D
CURTISS-WRIGHT CORPORATION AND =
SUBSIDIARIES | 27
<PAGE>
The provisions (benefits) for taxes on earnings for the years ended =
December 31
consist of:
=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D
(In thousands) 1999 1998 =
1997
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D
Current:
Federal $ 11,843 $ 8,835 =
$ 7,523
State 3,619 3,045 =
4,197
Foreign 6,000 5,019 =
1,910
- ------------------------------------------------------------------------=
- --------
21,462 16,899 =
13,630
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D
Deferred:
Federal 2,143 1,231 =
332
State 407 397 =
126
Foreign 252 -- =
--
- ------------------------------------------------------------------------=
- --------
2,802 1,628 =
458
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D
Federal income tax on
net capital gains -- -- =
1,135
Utilization of capital
loss carryforwards -- -- =
(1,135)
Valuation allowance -- -- =
(74)
- ------------------------------------------------------------------------=
- --------
Provision for income tax $ 24,264 $ 18,527 =
$ 14,014
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D
The effective tax rate varies from the U. S. Federal statutory tax rate =
for the
years ended December 31 principally due to the following:
=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D
1999 1998 =
1997
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D
U.S. Federal statutory tax rate 35.0% 35.0% =
35.0%
Add (deduct):
Utilization of capital loss
carryforward -- -- =
(2.7)
Dividends received deduction
and tax exempt income (0.8) (1.4) =
(1.2)
State and local taxes 4.1 4.7 =
3.3
Valuation allowance -- -- =
(.2)
All other -- .6 =
(.8)
- ------------------------------------------------------------------------=
- --------
Effective tax rate 38.3% 38.9% =
33.4%
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D
The components of the Corporation's deferred tax assets and liabilities =
at
December 31 are as follows; however, 1998 figures have been =
reclassified for
reporting purposes.
=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D
(In thousands) 1999 =
1998
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D
Deferred tax assets:
Environmental cleanup $ 6,119 =
$ 6,428
Postretirement/employment benefits 3,540 =
4,065
Inventories 4,407 =
3,805
Vacation pay 1,048 =
932
Other 4,961 =
4,756
- ------------------------------------------------------------------------=
- --------
Total deferred tax assets $20,075 =
$19,986
- ------------------------------------------------------------------------=
- --------
Deferred tax liabilities:
Retirement plans $19,265 =
$16,901
Depreciation 4,697 =
3,773
Other 1,538 =
1,185
- ------------------------------------------------------------------------=
- --------
Total deferred tax liabilities $25,500 =
$21,859
- ------------------------------------------------------------------------=
- --------
Net deferred tax liabilities $ 5,425 =
$ 1,873
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D
Deferred tax assets and liabilities are reflected on the Corporation's
consolidated balance sheets at December 31 as follows:
=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D
(In thousands) 1999 =
1998
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D
Current deferred tax assets $ 8,688 =
$ 7,841
Non-current deferred tax liabilities (14,113) =
(9,714)
- ------------------------------------------------------------------------=
- --------
Net deferred tax liabilities $ (5,425) =
$ (1,873)
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D
Income tax payments of $20,954,000 were made in 1999, $16,321,000 in =
1998, and
$12,432,000 in 1997.
28 | CURTISS-WRIGHT CORPORATION AND SUBSIDIARIES
<PAGE>
8. LONG-TERM DEBT
Long-term debt at December 31 consists of the following:
=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D
(In thousands) 1999 =
1998
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D
Short-term credit agreement borrowing,
due 1999. Interest rate is 2.31% for 1998 $ -- =
$20,523
Industrial Revenue Bonds, due from 2000
to 2028. Weighted average interest
rate is 3.12% and 2.52% per annum
for 1999 and 1998, respectively 18,747 =
$18,747
- ------------------------------------------------------------------------=
- --------
Revolving Credit Agreement Borrowing,
due 2004. Weighted average interest rate is
2.94% for 1999 and 2.31% for 1998 19,471 =
1,415
- ------------------------------------------------------------------------=
- --------
Total debt 38,218 =
40,685
- ------------------------------------------------------------------------=
- --------
Less: Portion due within one-year 4,047 =
20,523
- ------------------------------------------------------------------------=
- --------
Total Long-Term Debt $34,171 =
$20,162
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D
Short-term credit agreement borrowings of $20,523,000 in 1998 were =
transferred
to the Revolving Credit Agreement in 1999, and have a maturity date of =
December
17, 2004.
Debts under the Corporation's short-term credit agreement and revolving =
credit
agreement are denominated in Swiss francs. Actual borrowings at =
December 31,
1999 and 1998 total 31,000,000 Swiss francs.
Aggregate maturities of debt are as follows:
(In thousands)
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D
2000 =
$ 4,047
2001 =
1,300
2002 =
--
2003 =
--
2004 =
19,471
2005 and beyond =
13,400
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D
Interest payments of approximately $818,000, $470,000 and $347,000 were =
made in
1999, 1998 and 1997, respectively.
9. CREDIT AGREEMENTS
The Corporation has two credit agreements in effect aggregating =
$100,000,000
with a group of five banks. The credit agreements allow for borrowings =
to be
denominated in a number of foreign currencies. The Revolving Credit =
Agreement
commits a maximum of $60,000,000 to the Corporation for cash borrowings =
and
letters of credit. The unused credit available under this facility at =
December
31, 1999 was $18,226,000. The commitments made under the Revolving =
Credit
Agreement expire December 17, 2004, but may be extended annually for =
successive
one-year periods with the consent of the bank group. The Corporation =
also has in
effect a Short-Term Credit Agreement which allows for cash borrowings =
of
$40,000,000, of which $40,000,000 was available at December 31, 1999. =
The
Short-Term Credit Agreement expires December 17, 2000. The Short-Term =
Credit
Agreement may be extended, with the consent of the bank group, for an =
additional
period not to exceed 364 days. Cash borrowings under the Revolving =
Credit
Agreement at December 31, 1999 were $19,471,000 with a weighted average =
interest
rate of 2.94%. Cash borrowings at December 31, 1998 were $21,938,000 =
with a
weighted average interest rate of 2.31%. The Corporation is required =
under these
Agreements to maintain certain financial ratios, and meet certain net =
worth and
indebtedness tests for which the Corporation is in compliance.
At December 31, 1999, substantially all of the industrial revenue bond =
issues
are collateralized by real estate, machinery and equipment. Certain of =
these
issues are supported by letters of credit, which total approximately
$17,793,000. The Corporation has various other letters of credit, most =
of which
are now included under the Revolving Credit Agreement.
CURTISS-WRIGHT CORPORATION AND =
SUBSIDIARIES | 29
<PAGE>
10. STOCK COMPENSATION PLANS
Stock-Based Compensation: Pro forma information regarding net earnings =
and
earnings per share is required by SFAS No. 123 and has been determined =
as if the
Corporation had accounted for its 1999, 1998 and 1997 employee stock =
option
grants under the fair value method of that Statement. Information with =
regards
to the number of options granted, market price of the grants, vesting
requirements and the maximum term of the options granted appears by =
plan type in
the sections below. The fair value for these options was estimated at =
the date
of grant using a Black-Scholes option pricing model with the following =
weighted
average assumptions for 1999, 1998 and 1997, respectively: a risk-free =
interest
rate of 6.09%, 4.80% and 5.88%; an expected volatility of 25.06%, =
18.80% and
18.18%; an expected dividend yield of 1.37%, 1.38% and 1.37%; and a =
weighted
average expected life of the option of 7 years. For purposes of pro =
forma
disclosures, no expense was recognized on the 1999 options due to the =
timing of
the grant. The estimated fair value of the option grants are presented =
as
amortized to expense over the options' vesting period beginning January =
1 of the
following year. The Corporation's pro forma information for the years =
ended
December 31, 1999, 1998 and 1997 are as follows:
=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D
(In thousands, except per share data) 1999 1998 =
1997
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D
Net earnings:
As reported $ 39,045 $ 29,053 $ =
27,885
Pro forma $ 38,430 $ 28,509 $ =
27,570
Net earnings per common share:
As reported:
Basic $ 3.86 $ 2.85 $ =
2.74
Diluted $ 3.82 $ 2.82 $ =
2.71
Pro forma:
Basic $ 3.80 $ 2.80 $ =
2.71
Diluted $ 3.76 $ 2.77 $ =
2.68
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D
Long-Term Incentive Plan: Under a Long-Term Incentive Plan approved by
stockholders in 1995, an aggregate total of 1,000,000 shares of common =
stock
were reserved for issuance under said Plan. No more than 50,000 shares =
of common
stock subject to the plan may be awarded in any year to any one =
participant in
the plan.
Under this Plan, the Corporation awarded 1,539,778 performance units in =
1999,
1,184,604 in 1998 and 997,841 in 1997 to certain key employees. The =
performance
units are denominated in dollars and are contingent upon the =
satisfaction of
performance objectives keyed to profitable growth over a period of =
three fiscal
years commencing with the fiscal year following such awards. The =
anticipated
cost of such awards is expensed over the three-year performance period. =
However,
the actual cost of the performance units may vary from total value of =
the awards
depending upon the degree to which the key performance objectives are =
met.
The Corporation has also granted nonqualified stock options in 1999, =
1998 and
1997 to key employees. Stock options granted under this Plan expire ten =
years
after the date of the grant and are exercisable as follows: up to =
one-third of
the grant after one full year, up to two-thirds of the grant after two =
full
years and in full three years from the date of grant. Stock option =
activity
during the periods is indicated as follows:
=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D
Weighted
Average
Exercise =
Options
Shares Price =
Exercisable
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D
Outstanding at December 31, 1996 308,720 $ 20.38 =
165,360
Granted 89,286 38.00
Exercised (19,302) 17.08
Forfeited (8,878) 22.33
- ------------------------------------------------------------------------=
- --------
Outstanding at December 31, 1997 369,826 24.762 =
16,398
Granted 118,886 37.66
Exercised (31,554) 19.13
Forfeited (20,657) 30.59
- ------------------------------------------------------------------------=
- --------
Outstanding at December 31, 1998 436,501 28.632 =
42,071
Granted 147,551 37.82
Exercised (6,155) 21.01
Forfeited (20,276) 34.78
- ------------------------------------------------------------------------=
- --------
Outstanding at December 31, 1999 557,621 $ 30.92 =
310,586
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D
30 | CURTISS-WRIGHT CORPORATION AND SUBSIDIARIES
<PAGE>
Stock Plan for Non-Employee Directors: The Stock Plan for Non-employee
Directors, approved by stockholders in 1996, authorized the grant of =
restricted
stock awards and, at the option of the directors, the payment of =
regular
stipulated compensation and meeting fees in equivalent shares. In June =
1996,
pursuant to the Plan 3,612 shares of restricted stock were issued to
non-employee directors, at no cost to them. The shares have been valued =
at a
price of $25.78 per share, the fair market price on the date of the =
award. The
cost of the restricted stock awards is being amortized over their =
five-year
restriction period. During 1999, the Corporation had deferred an =
aggregate
additional 9,531 shares, at an average market value of $27.45, for its
non-employee directors pursuant to election by directors to receive =
such shares
in lieu of payment for earned compensation under the plan. Depending on =
the
extent to which the non-employee directors elect to receive future =
compensation
in shares, total awards under this Plan could reach or exceed 16,000 =
shares by
April 12, 2006, the termination date of the Plan. Pursuant to =
elections, 2,072
shares were issued as compensation in 1999 under the Plan.
11. ENVIRONMENTAL COSTS
The operation of the Corporation's Wood-Ridge, New Jersey to remediate =
site
ground water and soil continued through 1999. The cost of constructing =
and
operating this site was provided for in 1990 when the Corporation =
established a
$21,000,000 reserve to remediate the property. Costs for operating and
maintaining this site in 1999 totaled $563,000. The Corporation has =
been named
as a potentially responsible party, as have many other corporations and
municipalities, in a number of environmental clean-up sites. The =
Corporation
continues to make progress in resolving these claims through settlement
discussions and payments from reserves previously established. The =
lawsuit by
the Corporation against several insurance carriers seeking recovery for
environmental costs will continue into 2000. The Corporation did settle =
with two
carriers in 1999 and another carrier in 1998, but the lawsuit is moving =
toward a
trial with the remaining carriers. No potential recovery from this =
lawsuit has
been utilized to offset or reduce any of the Corporation's =
environmental
liabilities. During the year, one site did require an increase in the =
reserve
for that site by $2,984,000. Significant sites remaining open at the =
end of the
year are: Caldwell Trucking landfill superfund site, Fairfield, New =
Jersey;
Pfohl Brothers landfill site, Cheektowaga, New York; Sharkey landfill =
superfund
site, Parsippany, New Jersey and Chemsol, Inc. superfund site, =
Piscataway, New
Jersey. The Corporation believes the outcome for any of these remaining =
sites
will not have a materially adverse effect on the Corporation's results =
of
operations or financial condition.
The noncurrent environmental obligation on the books at December 31, =
1999 was
$8,857,000, compared to $10,469,000 at December 1998.
12. PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS
The Corporation maintains a noncontributory defined benefit pension =
plan
covering substantially all employees. The Curtiss-Wright Retirement =
Plan
nonunion formula is based on years of credited service and the five =
highest
consecutive years' compensation during the last ten years of service =
and a "cash
balance" benefit; union employees who have negotiated a benefit under =
this plan
are entitled to a benefit based on years of service multiplied by a =
monthly
pension rate. Employees are eligible to participate in this plan after =
one year
of service and are vested after five years of service. At December 31, =
1999 and
December 31, 1998, the Corporation had prepaid pension costs of =
$50,447,000 and
$43,822,000, respectively, under this plan. The Corporation also =
maintains a
nonqualified Restoration Plan covering those employees whose =
compensation or
benefits exceeds the IRS limitation for pension benefits. Benefits =
under this
plan are not funded and as such, the Corporation had an accrued pension
liability of $2,102,000 and $2,142,000 at December 31, 1999 and 1998,
respectively. Disclosures made below are aggre gated in accordance with
Statement of Financial Accounting Standards No. 132, "Employers' =
Disclosures
about Pensions and Other Postretirement Benefits," and are reflective =
of a
measurement period from October 1 to September 30 for the respective =
years.
CURTISS-WRIGHT CORPORATION AND =
SUBSIDIARIES | 31
<PAGE>
<TABLE>
<CAPTION>
Pension Benefits =
Other Benefits
=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D
(In thousands) 1999 =
1998 1999 1998
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D
<S> <C> <C> =
<C> <C> =20
Change in Benefit Obligation:
Benefit obligation at beginning of Year $ 109,487 $ =
113,718 $ 5,187 $ 4,125
Service cost 4,703 =
3,770 191 177
Interest cost 7,377 =
7,399 298 335
Plan participants' contributions -- =
-- 42 --
Actuarial gain (338) =
(1,805) (264) 999
Benefits paid (14,264) =
(13,595) (401) (449)
Change due to curtailment of benefits -- =
-- (1,098) --
- ------------------------------------------------------------------------=
- ---------------------------------
Benefit obligation at end of year 106,965 =
109,487 3,955 5,187
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D
Change in Plan Assets:
Fair value of plan assets at beginning of year 216,882 =
230,743 -- --
Actual return on plan assets 35,105 =
(343) -- --
Employer contribution 90 =
77 359 449
Plan participants' contribution -- =
-- 42 --
Benefits paid (14,264) =
(13,595) (401) (449)
- ------------------------------------------------------------------------=
- ---------------------------------
Fair value of plan assets at end of year 237,813 =
216,882 -- --
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D
Funded status 130,848 =
107,395 (3,955) (5,187)
Unrecognized net actuarial gain (78,326) =
(59,314) (2,925) (2,560)
Unrecognized transition obligation (4,394) =
(6,582) -- --
Unrecognized prior service costs 217 =
181 (1,635) (1,828)
- ------------------------------------------------------------------------=
- ---------------------------------
Prepaid (accrued) benefit cost $ 48,345 $ =
41,680 $ (8,515) $ (9,575)
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D
Weighted-average assumptions as of December 31:
Discount rate 7.00% =
6.75% 7.00% 6.75%
Expected return on plan assets 8.50% =
8.50% -- --
Rate of compensation increase 4.50% =
4.50% -- --
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D
</TABLE>
For measurement purposes, an 8.63% annual rate of increase in the per =
capita
cost of covered health care benefits was assumed for 1999. The rate was =
assumed
to decrease gradually to 5.5% for 2008 and remain at that level =
thereafter.
32 | CURTISS-WRIGHT CORPORATION AND SUBSIDIARIES
<PAGE>
<TABLE>
<CAPTION>
Pension =
Benefits Other Benefits
=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D
(In thousands) 1999 =
1998 1999 1998
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D
<S> <C> <C> =
<C> <C> =20
Components of Net Periodic Benefit Cost (Revenue):
Service cost $ 4,703 $ =
3,770 $ 191 $ 177
Interest cost 7,377 =
7,399 298 335
Expected return on plan assets (15,579) =
(14,562) -- --
Amortization of prior service cost (36) =
(37) (193) (193)
Amortization of transition obligation (2,188) =
(1,157) -- --
Recognized net actuarial loss (851) =
(539) (184) (145)
Benefit cost reduction due to curtailment -- =
-- (813) --
- ------------------------------------------------------------------------=
- ------------------------------
Net periodic benefit cost (revenue) $ (6,574) $ =
(5,126) $ (701) $ 174
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D
<CAPTION>
=
1% 1%
=
Increase Decrease
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D
<S> <C> =
<C> =20
Effect on total of services and interest cost components $ =
72 $ (60)
Effect on postretirement benefit obligation $ =
551 $ (461)
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D
</TABLE>
The Corporation had foreign pension costs in 1999, 1998 and 1997 under
retirement plans of $734,000, $367,000 and $312,000, respectively. At =
December
31, 1999, approximately 31% of the plan's assets are invested in debt
securities, including a portion in U. S. Government issues. =
Approximately 69% of
plan assets are invested in equity securities.
Included in earnings for 1999, 1998, and 1997 is net pension income of
$6,574,000 $5,126,000 and $3,312,000, respectively. The Corporation =
discontinued
postretirement medical coverage for the former employees of its Buffalo =
plant
which resulted in a cost reduction of $813,000 for 1999.
13. LEASES
Buildings and Improvements Leased to Others: The Corporation leases =
certain of
its buildings and related improvements to outside parties under =
noncancelable
operating leases. Cost and accumulated depreciation of the leased =
buildings and
improvements at December 31, 1999, were $50,878,000 and $44,095,000,
respectively, and at December 31, 1998, were $50,816,000 and =
$44,559,000,
respectively.
Facilities Leased from Others: The Corporation conducts a portion of =
its
operations from leased facilities, which include manufacturing and =
service
facilities, administrative offices and warehouses. In addition, the =
Corporation
leases automobiles, machinery and office equipment under operating =
leases.
Rental expenses for all operating leases amounted to approximately =
$2,770,000 in
1999, $2,586,000 in 1998 and $2,239,000 in 1997.
At December 31, 1999, the approximate future minimum rental income and
commitment under operating leases that have initial or remaining =
noncancelable
lease terms in excess of one year are as follows:
Rental =
Rental=20
(In thousands) Income =
Commitment
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D
2000 $ 5,571 =
$3,281
2001 5,277 =
2,930
2002 3,618 =
2,724
2003 2,442 =
2,448
2004 1,905 =
1,860
2005 and beyond 10,303 =
2,557
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D
14. INDUSTRY SEGMENTS
The Corporation has adopted Statement of Financial Accounting Standards =
No. 131,
"Disclosures about Segments of an Enterprise and Related Information" =
(SFAS No.
131). SFAS No. 131 establishes new standards for reporting information =
about
operating segments and related disclosures about products and services =
and
geographic areas. Operating segments are defined as components of an =
enterprise
about which separate financial information is available, such that it =
is
evaluated regularly by the chief operating decision-maker in assessing
performance and allocating resources. The Corporation's chief operating
decision-maker is its Chairman and CEO. The operating segments are =
managed
separately because each offers different products and serves different =
markets.
The principle products and major markets of=20
CURTISS-WRIGHT CORPORATION AND =
SUBSIDIARIES | 33
<PAGE>
the three operating segments are described in the At a Glance section =
of this
Annual Report.
The accounting policies of the operating segments are the same as those
described in the summary of significant accounting policies. Interest =
income is
not reported on an operating segment basis because short-term =
investments and
returns on those investments are aggregated and evaluated separately =
from
business operations.
The Corporation is changing the names of its segments in this report to =
better
reflect the activity of the business units and simplify references to =
them. The
name changes are as follows:
Motion Control (formerly Actuation and
Control Products & Services)
Metal Treatment (formerly Precision Manufacturing
Products & Services)
Flow Control (formerly Flow Control Products & Services)
The Corporation had one customer in the motion control segment which =
accounted
for 14% of consolidated revenue in 1999, 16% in 1998 and 15% in 1997.
CONSOLIDATED INDUSTRY SEGMENT INFORMATION:
<TABLE>
<CAPTION>
=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D
Motion Metal =
Flow Segment Corporate Consolidated
(In thousands) Control Treatment =
Control Total & Other Total
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D
<S> <C> <C> =
<C> <C> <C> <C> =20
Year Ended December 31, 1999:
Revenue from external customers $ 124,155 $ 104,143 =
$ 64,965 $ 293,263 $ -- $ 293,263
Intersegment revenues -- 337 =
-- 337 -- 337
Interest expense 449 170 =
224 843 446 1,289
Depreciation and amortization expense 5,056 4,407 =
2,355 11,818 1,046 12,864
Income tax expense 2,834 9,128 =
2,380 14,342 9,922 24,264
Segment net income 5,199 14,416 =
3,641 23,256 15,789 39,045
Segment assets 112,943 83,350 =
95,214 291,507 95,619 387,126
Expenditures for long-lived assets 3,433 14,530 =
1,543 19,506 377 19,883
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D
Year Ended December 31, 1998:
Revenue from external customers $ 105,400 $ 105,999 =
$ 38,014 $ 249,413 $ -- $ 249,413
Intersegment revenues -- 554 =
-- 554 -- 554
Interest expense 148 78 =
253 479 6 485
Depreciation and amortization expense 3,608 3,792 =
1,246 8,646 1,015 9,661
Income tax expense (benefit) (240) 11,671 =
1,997 13,428 5,099 18,527
Segment net income (loss) (1,033) 18,213 =
3,010 20,190 8,863 29,053
Segment assets 119,351 68,198 =
40,080 227,629 125,111 352,740
Expenditures for long-lived assets 2,111 6,053 =
2,180 10,344 298 10,642
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D
Year Ended December 31, 1997:
Revenue from external customers $ 97,369 $ 95,362 =
$ 26,664 $ 219,395 $ -- $ 219,395
Intersegment revenues -- 691 =
-- 691 -- 691
Interest expense 138 78 =
171 387 -- 387
Depreciation and amortization expense 3,455 3,656 =
1,005 8,116 981 9,097
Income tax expense 805 9,328 =
1,409 11,542 2,472 14,014
Segment net income 2,116 14,932 =
2,161 19,209 8,676 27,885
Segment assets 94,473 56,254 =
15,986 166,713 117,995 284,708
Expenditures for long-lived assets 4,675 4,838 =
1,244 10,757 474 11,231
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D
</TABLE>
32 | CURTISS-WRIGHT CORPORATION AND SUBSIDIARIES
<PAGE>
<TABLE>
<CAPTION>
Reconciliations: =
December 31,
=
=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D
(In thousands) =
1999 1998 1997
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D
<S> =
<C> <C> <C> =20
Revenues: =
=20
Total segment revenue =
$293,263 $249,413 $219,395 =20
Intersegment revenue =
337 554 691
Elimination of intersegment revenue =
(337) (554) (691)
- ------------------------------------------------------------------------=
- -----------------------------------------
Total consolidated revenues =
$293,263 $249,413 $219,395
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D
Net Income: =
=20
Total segment net income =
$ 23,256 $20,190 $ 19,209
Insurance settlement =
7,354 1,116 --
Rental income, net =
2,531 1,873 2,634
Investment Income =
1,824 2,581 3,181
Pension income =
3,889 3,131 2,164
Corporate and other =
191 162 697
- ------------------------------------------------------------------------=
- -----------------------------------------
Total consolidated profit or loss =
$ 39,045 $ 29,053 $ 27,885
- ------------------------------------------------------------------------=
- -----------------------------------------
Assets: =
=20
Total assets for reportable segments =
$291,507 $227,629 $166,713
Short-term investments =
25,560 66,444 61,883
Pension assets =
50,447 43,822 38,674
Other assets =
19,652 14,914 17,528
Elimination of intersegment receivables =
(40) (69) (90)
- ------------------------------------------------------------------------=
- -----------------------------------------
Total consolidated assets =
$387,126 $352,740 $284,708
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D
<CAPTION>
December 31, 1999 =
December 31, 1998 December 31, 1997
=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D
Long-Lived =
Long-Lived Long-Lived
(In thousands) Revenues(1) Assets =
Revenues(1) Assets Revenues(1) Assets
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D
<S> <C> <C> <C> =
<C> <C> <C> =20
Geographic Information: =
=20
United States $200,253 $209,370 =
$165,567 $217,668 $155,279 $201,718
United Kingdom 29,762 20,986 =
32,320 11,454 22,842 7,405
Other foreign countries 63,248 11,644 =
51,526 8,093 41,274 10,464
- ------------------------------------------------------------------------=
- -----------------------------------------
Consolidated total $293,263 $242,000 =
$249,413 $237,215 $219,395 $219,587
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D
</TABLE>
(1) Revenues are attributed to countries based on the location of the
customer.
CURTISS-WRIGHT CORPORATION AND =
SUBSIDIARIES | 35
<PAGE>
- -------------------
CORPORATE DIRECTORY
- -------------------
DIRECTORS
Martin R. Benante
President and Chief Operating Officer
Thomas R. Berner
Partner
Law firm of Berner & Berner, P.C.
Admiral James B. Busey IV
Admiral, U.S. Navy (Ret.)
Former President and Chief Executive Officer
AFCEA International
David Lasky
Chairman and Chief Executive Officer
William B. Mitchell
Former Vice Chairman
Texas Instruments Inc.
John R. Myers
Management Consultant
Former Chairman of the Board
Garrett Aviation Services
Dr. William W. Sihler
Ronald E. Trzcinski Professor of Business Administration
Darden Graduate School of Business Administration
University of Virginia
J. McLain Stewart
Director
McKinsey & Co.
Management Consultants
OFFICERS
David Lasky
Chairman and Chief Executive Officer
Martin R. Benante
President and Chief Operating Officer
Gerald Nachman
Executive Vice President
George J. Yohrling
Vice President
Robert A. Bosi
Vice President-Finance
Brian D. O'Neill
General Counsel and Secretary
Gary J. Benschip
Treasurer
Kenneth P. Slezak
Controller
Gary R. Struening
Assistant Controller
James V. Maher
Assistant Secretary
36 | CURTISS-WRIGHT CORPORATION AND SUBSIDIARIES
<PAGE>
=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D
CORPORATE INFORMATION CORPORATE HEADQUARTERS
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D
1200 Wall Street West, Lyndhurst, New =
Jersey 07071
Tel. (201) 896-8400 Fax. (201) 438-5680
=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D
Annual Meeting
The 2000 Annual Meeting of Stockholders will be held on April 7, 2000, =
at 2:00
p.m., at the Novotel Meadowlands Hotel, One Polito Avenue, Lyndhurst, =
New Jersey
07071.
Stock Exchange Listing
The Corporation's common stock is listed and traded on the New York =
Stock
Exchange. The stock transfer symbol is CW.
Common Stockholders
As of December 31, 1999, the approximate number of holders of record of =
common
stock, par value $1.00 per share, of the Corporation was 3,848.
Stock Transfer Agent and Registrar
For services such as changes of address, replacement of lost =
certi/cates or
dividend checks, and changes in registered ownership, or for inquiries =
as to
account status, write to ChaseMellon Shareholder Services, L.L.C., at =
the
following addresses:
STOCKHOLDER INQUIRIES/ADDRESS CHANGES/CONSOLIDATIONS
P.O. Box 3315, South Hackensack, NJ 07606
DUPLICATE MAILINGS
If you receive duplicate mailings because of slight differences in the
registration of your accounts and wish to eliminate the duplication, =
please call
ChaseMellon's toll-free number, (800) 416-3743, or write to ChaseMellon
Shareholder Services, L.L.C., 85 Challenger Road, Ridge/eld Park, NJ =
07660 for
instructions on combining your accounts.
DIRECT STOCK PURCHASE PLAN/DIVIDEND REINVESTMENT PLAN
A plan administered by the Chase Manhattan Bank is available to =
purchase or sell
shares of Curtiss-Wright that provides a low-cost alternative to the =
traditional
methods of buying, holding, and selling stock. The plan also provides =
for the
automatic reinvestment of Curtiss-Wright dividends. For more =
information contact
our transfer agent, ChaseMellon Shareholder Services, L.L.C., toll-free =
at (888)
266-6793.
LOST CERTIFICATES/CERTIFICATE REPLACEMENT
Estoppel Department, P.O. Box 3317,=20
South Hackensack, NJ 07606
CERTIFICATE TRANSFERS
Stock Transfer Department, P. O. Box 3312,=20
South Hackensack, NJ 07606
Please include your name, address, and telephone number with all =
correspondence.
Telephone inquiries may be made to (800) 416-3743. Foreign: (201) =
329-8660.
Domestic hearing-impaired: (800) 231-5469. Foreign hearing-impaired: =
(201)
329-8354. Internet inquiries should be addressed to =
http://www.chasemellon.com
Investor Information
Investors, stockbrokers, security analysts, and others seeking =
information about
Curtiss-Wright Corporation should contact Robert A. Bosi, Vice
President--Finance, or Gary J. Benschip, Treasurer, at the Corporate
Headquarters; telephone (201) 896-1751.
Internet Address
Use http://www.curtisswright.com to reach the Curtiss-Wright home page =
for
information about Curtiss-Wright on the World Wide Web.
Financial Reports
This Annual Report includes most of the periodic /nancial information =
required
to be on /le with the Securities and Exchange Commission. The Company =
also /les
an Annual Report on Form 10-K, a copy of which may be obtained free of =
charge.
These reports, as well as additional /nancial documents such as =
quarterly
shareholder reports, proxy statements, and quarterly reports on Form =
10-Q, may
be obtained by written request to Gary J. Benschip, Treasurer, at =
Corporate
Headquarters.
COMMON STOCK PRICE RANGE
=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D
1999 1998 =
=20
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D
High Low High =
Low
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D
First Quarter $ 40.6250 $ 31.0000 $ 39.1875 =
$33.8125
Second Quarter 39.0625 31.1875 41.8750 =
38.1250
Third Quarter 38.8750 30.3750 48.3750 =
39.1875
Fourth Quarter 38.6250 31.5000 39.5000 =
33.0625
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D
Dividends =20
=
=3D=3D=3D=3D=3D=3D=3D
1999 =
1998
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D
First Quarter $0.130 =
$0.130
Second Quarter $0.130 =
$0.130
Third Quarter $0.130 =
$0.130
Fourth Quarter $0.130 =
$0.130
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D
DESIGN: WATERSDESIGN.COM NEW YORK CITY PHOTOGRAPHY: MATTHEW KLEIN AND =
JOHN RAY
<PAGE>
[LOGO]
CURTISS-WRIGHT CORPORATION
1200 Wall Street West
Lyndhurst, New Jersey 07071
CW
Listed
NYSE
THE NEW YORK STOCK EXCHANGE
Exhibit 21
Subsidiaries of the Registrant
The information below is provided, as of March 1, 2000, with respect to
the subsidiaries of Registrant. The names of certain inactive subsidiaries and
other consolidated subsidiaries of Registrant have been omitted because all such
subsidiaries, considered in the aggregate as a single subsidiary, would not
constitute a significant subsidiary.
Percentage of
Voting
Organized Under Securities Owned by
Name the Laws of Immediate Parent
Curtiss-Wright Flight Systems, Inc. Delaware 100%
Metal Improvement Company, Inc. Delaware 100%
Curtiss-Wright Flow Control Corporation New York 100%
Curtiss-Wright Flow Control Delaware 100%
Service Corporation
Curtiss-Wright Flow Control Company Nova Scotia, 100%
Canada Canada
Curtiss-Wright Flight Systems Europe A/S Denmark 100%
Curtiss-Wright Foreign Sales Corp. Barbados 100%
Curtiss-Wright Antriebstechnik GmbH Switzerland 100%
Exhibit 23
PRICEWATERHOUSECOOPERS LLP [LOGO]
PricewaterhouseCoopers LLP
400 Campus Drive
P.O. Box 988
Florham Park, NJ 07932
Telephone (973) 236 4000
Facsimile (973) 236 5000
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 and S-3 (No. 33-95562329) and in the Registration
Statements on Forms S-8 (Nos. 33-95602114 and 33-96583181) of Curtiss-Wright
Corporation of our report dated January 31, 2000 appearing on page 18 of the
Curtiss-Wright Corporation 1999 Annual Report which is incorporated in this
Annual Report on Form 10-K. We also consent to the incorporation by reference of
our report on the Financial Statement Schedule, which appears in this Form 10-K.
/s/ PricewaterhouseCoopers LLP
PRICEWATERHOUSECOOPERS LLP
Florham Park, New Jersey
March 20, 2000
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> DEC-31-1999
<CASH> 9,547
<SECURITIES> 25,560
<RECEIVABLES> 73,959
<ALLOWANCES> 3,230
<INVENTORY> 60,584
<CURRENT-ASSETS> 180,370
<PP&E> 242,000
<DEPRECIATION> 147,422
<TOTAL-ASSETS> 387,126
<CURRENT-LIABILITIES> 55,932
<BONDS> 34,171
0
0
<COMMON> 15,000
<OTHER-SE> 243,355
<TOTAL-LIABILITY-AND-EQUITY> 387,126
<SALES> 293,263
<TOTAL-REVENUES> 306,712
<CGS> 190,852
<TOTAL-COSTS> 242,106
<OTHER-EXPENSES> 8
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,289
<INCOME-PRETAX> 63,309
<INCOME-TAX> 24,264
<INCOME-CONTINUING> 39,045
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 39,045
<EPS-BASIC> 3.86
<EPS-DILUTED> 3.82
</TABLE>
