<PAGE> 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended April 30, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission file number 1-3998
LITTON INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
Delaware 95-1775499
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
360 North Crescent Drive, Beverly Hills, California 90210-4867
(Address of principal executive offices) (Zip Code)
</TABLE>
Registrant's telephone number, including area code: (310) 859-5000
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes x No
On May 31, 1994 there were 45,856,700 shares of Common Stock outstanding.
Page 1 of 19
Exhibit Index appears on Page 14
<PAGE> 2
LITTON INDUSTRIES, INC. AND SUBSIDIARY COMPANIES
INDEX
REPORT ON FORM 10-Q
FOR QUARTER ENDED APRIL 30, 1994
<TABLE>
<CAPTION>
Page
Number
------
<S> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
-------
Consolidated Statements of Operations
Nine months ended April 30, 1994 and 1993 3
Consolidated Statements of Operations
Three months ended April 30, 1994 and 1993 5
Consolidated Balance Sheets
April 30, 1994 and July 31, 1993 6
Consolidated Statements of Cash Flows
Nine months ended April 30, 1994 and 1993 8
Notes to Consolidated Financial Statements 10
Item 2. Management's Discussion and Analysis of
------- Financial Condition and Results of Operations 12
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 14
-------
Signature 19
</TABLE>
-2-
<PAGE> 3
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
- - -----------------------------
LITTON INDUSTRIES, INC. AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(thousands of dollars, except per share amounts)
<TABLE>
<CAPTION>
Nine Months Ended
April 30,
--------------------------------
1994 1993
<S> <C> <C>
- - ------------------------------------------------------------------------------------------
Sales and Service Revenues $2,602,111 $2,529,803
- - ------------------------------------------------------------------------------------------
Costs and Expenses
Cost of sales 2,107,078 2,028,121
Selling, general and administrative 260,331 260,710
Depreciation and amortization 73,891 80,708
Interest - net 27,057 50,304
- - ------------------------------------------------------------------------------------------
Total 2,468,357 2,419,843
- - ------------------------------------------------------------------------------------------
Earnings from Continuing Operations before Taxes
on Income and Cumulative Effect of a Change in
Accounting Principle 133,754 109,960
Taxes on Income (54,170) (43,359)
- - ------------------------------------------------------------------------------------------
Earnings from Continuing Operations
before Cumulative Effect of a Change
in Accounting Principle 79,584 66,601
Discontinued Operations:
Results of Western Atlas Inc. (173,079) 70,051
- - ------------------------------------------------------------------------------------------
Earnings (Loss) before Cumulative Effect of a
Change in Accounting Principle (93,495) 136,652
Cumulative Effect of a Change in
Accounting Principle
Continuing Operations - (106,727)
Discontinued Operations:
Results of Western Atlas Inc. - (10,390)
- - ------------------------------------------------------------------------------------------
Net Earnings (Loss) $ (93,495) $ 19,535
==========================================================================================
</TABLE>
See accompanying notes to consolidated financial statements.
-3-
<PAGE> 4
LITTON INDUSTRIES, INC. AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(thousands of dollars, except per share amounts)
(continued)
<TABLE>
<CAPTION>
Nine Months Ended
April 30,
----------------------
1994 1993
- - ------------------------------------------------------------------------------------------
<S> <C> <C>
Primary Earnings (Loss) per Share
Earnings (Loss) before Cumulative Effect of a
Change in Accounting Principle
Continuing Operations $ 1.73 $ 1.61
Discontinued Operations:
Results of Western Atlas Inc. (3.79) 1.70
Cumulative Effect of a Change in
Accounting Principle
Continuing Operations - (2.60)
Discontinued Operations:
Results of Western Atlas Inc. - (0.25)
- - ------------------------------------------------------------------------------------------
Net Earnings (Loss) Per Share $(2.06) $ 0.46
==========================================================================================
Fully Diluted Earnings (Loss) per Share
Earnings (Loss) before Cumulative Effect of a
Change in Accounting Principle
Continuing Operations $ 1.73 $ 1.60
Discontinued Operations:
Results of Western Atlas Inc. (3.79) 1.70
Cumulative Effect of a Change in
Accounting Principle
Continuing Operations - (2.59)
Discontinued Operations:
Results of Western Atlas Inc. - (0.25)
- - ------------------------------------------------------------------------------------------
Net Earnings (Loss) Per Share $(2.06) $ 0.46
==========================================================================================
</TABLE>
See accompanying notes to consolidated financial statements.
-4-
<PAGE> 5
LITTON INDUSTRIES, INC. AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(thousands of dollars, except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended
April 30,
----------------------
1994 1993
- - -----------------------------------------------------------------------
<S> <C> <C>
Sales and Service Revenues $957,134 $902,381
- - -----------------------------------------------------------------------
Costs and Expenses
Cost of sales 784,746 729,476
Selling, general and administrative 88,010 88,339
Depreciation and amortization 24,614 26,550
Interest - net 8,920 18,469
- - -----------------------------------------------------------------------
Total 906,290 862,834
- - -----------------------------------------------------------------------
Earnings from Continuing Operations before
Taxes on Income 50,844 39,547
Taxes on Income (20,591) (15,580)
- - -----------------------------------------------------------------------
Earnings from Continuing Operations 30,253 23,967
Discontinued Operations:
Results of Western Atlas Inc. (7,465) 25,491
- - -----------------------------------------------------------------------
Net Earnings $ 22,788 $ 49,458
=======================================================================
Primary Earnings (Loss) per Share
Earnings from Continuing Operations $ 0.64 $0.59
Discontinued Operations:
Results of Western Atlas Inc. (0.16) 0.63
- - -----------------------------------------------------------------------
Net Earnings Per Share $ 0.48 $1.22
=======================================================================
Fully Diluted Earnings (Loss) per Share
Earnings from Continuing Operations $ 0.64 $0.59
Discontinued Operations:
Results of Western Atlas Inc. (0.16) 0.55
- - -----------------------------------------------------------------------
Net Earnings Per Share $ 0.48 $1.14
=======================================================================
</TABLE>
See accompanying notes to consolidated financial statements.
-5-
<PAGE> 6
LITTON INDUSTRIES, INC. AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS
(thousands of dollars)
<TABLE>
<CAPTION>
April 30, July 31,
1994 1993
- - --------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Current Assets
Cash and marketable securities $ 612,139 $ 353,737
Accounts receivable 335,513 470,970
Inventories less progress billings 490,772 509,078
Prepaid taxes on income and other expenses 344,710 326,756
- - --------------------------------------------------------------------------------
Total Current Assets 1,783,134 1,660,541
- - --------------------------------------------------------------------------------
Property, Plant and Equipment - at cost 1,506,035 1,557,386
Less accumulated depreciation (906,255) (919,348)
- - --------------------------------------------------------------------------------
Net Property, Plant and Equipment 599,780 638,038
- - --------------------------------------------------------------------------------
Goodwill and Other Intangibles, Net 135,314 137,193
- - --------------------------------------------------------------------------------
Long-term Investments and Other Assets (Balance
at July 31, 1993 included $100 million due
from Western Atlas Inc.) 261,444 313,298
- - --------------------------------------------------------------------------------
Net Assets of Western Atlas Inc. - 1,085,353
- - --------------------------------------------------------------------------------
Total Assets $2,779,672 $3,834,423
================================================================================
</TABLE>
See accompanying notes to consolidated financial statements.
-6-
<PAGE> 7
LITTON INDUSTRIES, INC. AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS
(thousands of dollars)
(continued)
<TABLE>
<CAPTION>
April 30, July 31,
1994 1993
- - ----------------------------------------------------------------------------------
<S> <C> <C>
LIABILITIES AND SHAREHOLDERS' INVESTMENT
Current Liabilities
Accounts payable $ 554,254 $ 546,349
Payrolls and related expenses 229,610 263,801
Taxes on income 137,306 152,029
Notes payable and current portion of
long-term obligations 13,490 65,721
Customer deposits and contract liabilities 229,818 197,335
- - ----------------------------------------------------------------------------------
Total Current Liabilities 1,164,478 1,225,235
- - ----------------------------------------------------------------------------------
Long-term Obligations 101,951 106,474
- - ----------------------------------------------------------------------------------
Postretirement Benefit Obligations other
than Pensions 194,134 183,032
- - ----------------------------------------------------------------------------------
Deferred Taxes on Income and Other Deferred Items 215,628 220,159
- - ----------------------------------------------------------------------------------
Subordinated Debt 435,805 435,805
- - ----------------------------------------------------------------------------------
Shareholders' Investment
Capital stock
Voting preferred stock - Series B 2,053 2,053
Common stock 45,824 45,520
Additional paid-in capital 649,714 706,191
Retained earnings - 934,605
Cumulative currency translation adjustment (29,915) (24,651)
- - ----------------------------------------------------------------------------------
Total Shareholders' Investment 667,676 1,663,718
- - ----------------------------------------------------------------------------------
Total Liabilities and Shareholders' Investment $2,779,672 $3,834,423
==================================================================================
</TABLE>
See accompanying notes to consolidated financial statements.
-7-
<PAGE> 8
LITTON INDUSTRIES, INC. AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(thousands of dollars)
<TABLE>
<CAPTION>
Nine Months Ended
April 30,
----------------------
1994 1993
- - ----------------------------------------------------------------------------------
<S> <C> <C>
Cash and cash equivalents at beginning of period $237,440 $169,972
- - ----------------------------------------------------------------------------------
Cash Was Provided by (Used for)
Operating Activities
Continuing Operations
Net earnings (loss) 79,584 (40,126)
Adjustments to reconcile net earnings (loss) to net
cash provided by operating activities
Depreciation and amortization 73,891 80,708
Deferred income tax credits (21,618) (72,231)
Cumulative effect of a change in
accounting principle - 106,727
Decrease in accounts receivable 136,935 70,341
Decrease in inventory 6,399 48,294
(Increase) decrease in prepaid taxes on income
and other expenses (17,861) 9,318
Decrease in accounts payable (32,163) (41,741)
Increase (decrease) in payrolls and related
expenses 33,379 (1,793)
Decrease in taxes on income (17,634) (50,862)
Increase (decrease) in customer deposits and
contract liabilities 32,483 (43,077)
Other operating activities (23,592) (1,160)
- - ----------------------------------------------------------------------------------
Total from continuing operations 249,803 64,398
- - ----------------------------------------------------------------------------------
Net operating activities of discontinued operations 44,583 208,101
- - ----------------------------------------------------------------------------------
Cash provided by operating activities 294,386 272,499
- - ----------------------------------------------------------------------------------
</TABLE>
See accompanying notes to consolidated financial statements.
-8-
<PAGE> 9
LITTON INDUSTRIES, INC. AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(thousands of dollars)
(continued)
<TABLE>
<CAPTION>
Nine Months Ended
April 30,
---------------------
1994 1993
- - ------------------------------------------------------------------------------
<S> <C> <C>
Investing Activities
Continuing Operations
(Increase) decrease in other current marketable
securities (268,221) 15,685
Purchase of capital assets (45,772) (54,698)
Proceeds from sale of investments 16,360 14,521
Proceeds from sale of property, plant and equipment 13,017 5,203
Other investing activities (1,755) (16,937)
- - ------------------------------------------------------------------------------
Total from continuing operations (286,371) (36,226)
- - ------------------------------------------------------------------------------
Net investing activities of discontinued operations (579,090) (104,387)
- - ------------------------------------------------------------------------------
Cash used for investing activities (865,461) (140,613)
- - ------------------------------------------------------------------------------
Financing Activities
Continuing Operations
Short-term obligations, net (50,033) (105,587)
Purchase of Common stock (2,595) (86,916)
Other financing activities 6,940 2,927
- - ------------------------------------------------------------------------------
Total from continuing operations (45,688) (189,576)
- - ------------------------------------------------------------------------------
Net financing activities of discontinued operations 606,944 (82,334)
- - ------------------------------------------------------------------------------
Cash provided by (used for) financing activities 561,256 (271,910)
- - ------------------------------------------------------------------------------
Resulting in decrease in cash and cash equivalents (9,819) (140,024)
- - ------------------------------------------------------------------------------
Cash and cash equivalents at end of period $ 227,621 $ 29,948
==============================================================================
Supplemental disclosure of cash flow information
Interest paid $ 32,840 $ 35,796
Income taxes paid $ 124,188 $ 171,043
</TABLE>
See accompanying notes to consolidated financial statements.
-9-
<PAGE> 10
LITTON INDUSTRIES, INC. AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NINE MONTHS ENDED APRIL 30, 1994
1. The amounts included in this report are unaudited; however, in the opinion
of management, all adjustments necessary for a fair statement of results for
the stated periods have been included. These adjustments are of a normal
recurring nature. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted. Certain
reclassifications of prior period information were made for comparative
purposes (also see Note 5). It is suggested that these condensed
consolidated financial statements be read in conjunction with the
financial statements and notes thereto included in the Company's Annual
Report to Shareholders for the fiscal year ended July 31, 1993. The
results of operations for the nine months ended April 30, 1994 are not
necessarily indicative of operating results for the entire year.
2. The components of inventory balances are summarized below:
<TABLE>
<CAPTION>
(thousands of dollars) April 30, 1994 July 31, 1993
- - -----------------------------------------------------------------------------
<S> <C> <C>
Raw materials and work in process $ 959,383 $ 972,896
Finished goods 44,014 53,392
- - -----------------------------------------------------------------------------
1,003,397 1,026,288
Less progress billings (512,625) (517,210)
- - -----------------------------------------------------------------------------
Net inventories $ 490,772 $ 509,078
=============================================================================
</TABLE>
3. Net interest expense is composed of the following:
<TABLE>
<CAPTION>
Nine Months Ended Three Months Ended
April 30, April 30,
--------------------- -------------------
(thousands of dollars) 1994 1993 1994 1993
- - -----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Interest expense $ 45,605 $ 61,394 $16,607 $22,060
Interest income (18,548) (11,090) (7,687) (3,591)
- - -----------------------------------------------------------------------------
Interest - net $ 27,057 $ 50,304 $ 8,920 $18,469
=============================================================================
</TABLE>
-10-
<PAGE> 11
LITTON INDUSTRIES, INC. AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NINE MONTHS ENDED APRIL 30, 1994
(continued)
4. In the fourth quarter of fiscal year 1993, the Company adopted, effective
as of the beginning of the fiscal year, the provisions of Statement of
Financial Accounting Standards No. 106, Employers' Accounting for
Postretirement Benefits Other Than Pensions. The Company elected
immediate recognition of the transition liability for such benefits and
the resultant cumulative effect of a change in accounting principle
amounted to $106.7 million, net of tax. Financial information for the
nine months of fiscal year 1993 has been restated for the cumulative
effect of a change in accounting principle.
5. On March 17, 1994, Litton Industries, Inc. distributed all of the issued and
outstanding shares of Common stock of its wholly-owned subsidiary Western
Atlas Inc. ("WAI"). The WAI operations comprised substantially all of the
Company's former oilfield services and industrial automation systems
businesses. The distribution ("Distribution") was made in the form of a
dividend to holders of record of Litton Common stock at the close of
business on March 14, 1994. Litton shareholders of record received
one share of WAI Common stock for each share of Litton Common stock owned.
The accounts of WAI have been classified as discontinued operations in
the Company's consolidated financial statements and prior year's financial
information has been restated to conform to the current presentation.
Corporate interest costs of $7 million and $9 million have been attributed
to WAI and, therefore, reclassified to discontinued operations in the
Company's Consolidated Statements of Operations for the nine months ended
April 30, 1994 and 1993, respectively. The consolidated financial
statements presented herein reflect the Distribution, which resulted in a
reduction of Litton's equity in the amount of $916.5 million representing
the book value of net assets distributed.
Concurrent with the Distribution, WAI reimbursed Litton for funds
advanced for use in the second quarter of fiscal year 1994 by WAI to
purchase Dresser Industries, Inc.'s minority interest in Western Atlas
International, Inc. ("WAII") and Halliburton Company's geophysical services
business. WAI also repaid Litton for certain other intercompany
indebtedness. Total cash received from WAI was approximately $570 million.
A portion of these funds was used by Litton to repay certain short-term
borrowings.
-11-
<PAGE> 12
PART I. FINANCIAL INFORMATION
(continued)
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
- - -------------------------------------------------------------------------------
As discussed in Note 5 of Item 1 of this Form 10-Q, the Company
distributed all of the issued and outstanding shares of Common stock of its
wholly-owned subsidiary WAI on March 17, 1994 to holders of Litton Common
stock. In the Company's consolidated financial statements, the operations of
WAI have been reported as discontinued operations. Accordingly, the accounts
of WAI have been reclassified to one line in the Consolidated Statements of
Operations and included in earnings (loss) of the Company as earnings (loss)
from discontinued operations.
Results of Continuing Operations:
Continuing operations are composed of the defense/electronics and
marine operations and the interconnect products businesses. The Company
reported earnings from continuing operations of $30.3 million and $79.6 million
for the third quarter and nine months ended April 30, 1994. The comparable
amounts for the prior year's periods were $24.0 million and $66.6 million,
respectively, before the cumulative effect of a change in accounting principle.
The improvements in the current year were primarily attributable to a
significant reduction in interest expense pursuant to the conversion of
substantially all of the zero coupon convertible subordinated notes to common
stock in the previous year's fourth quarter. Sales and operating profit for
the third quarter of the current fiscal year were $957.1 million and $73.3
million, respectively, compared with $902.4 million and $74.1 million,
respectively, for the third quarter of fiscal year 1993. Sales and operating
profit for the nine months ended April 30, 1994 were $2.60 billion and $207.0
million, respectively, compared with $2.53 billion and $208.4 million,
respectively, for the previous year's nine month period.
The Marine Engineering and Production segment reported sales and
operating profit of $421.6 million and $38.9 million, respectively, for the
third quarter of the current year, compared with $389.2 million and $36.5
million, respectively, for the third quarter of fiscal year 1993. For the nine
months ended April 30, 1994, sales and operating profit were $1.13 billion and
$105.0 million, respectively, compared with $1.03 billion and $97.5 million,
respectively, for the same period of fiscal year 1993. These increases reflect
the movement of certain long-term contracts into more advanced stages of
production, partially offset by the effects of other contracts nearing
completion. The Advanced Electronics segment reported sales and operating
profit of $468.9 million and $33.2 million, respectively, for the third quarter
of fiscal year 1994, compared with $452.5 million and $31.4 million,
respectively, for the third quarter of the previous year. Sales and operating
profit for the nine months of the current fiscal year were $1.30 billion and
$93.4 million, respectively, compared with $1.31 billion and $95.0 million,
respectively, for the nine months of fiscal year 1993. The segment also
maintained comparable profit margins with those of the previous year's periods.
-12-
<PAGE> 13
PART I. FINANCIAL INFORMATION
(continued)
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations (continued)
- - -------------------------------------------------------------------------------
As previously discussed, interest expense was significantly lower in the
current year periods due primarily to the June 28, 1993 call for redemption of
the zero coupon convertible subordinated notes. In addition, interest income
for the third quarter and nine months of the current fiscal year was higher due
mainly to higher average invested cash balances.
Concurrent with the Distribution, Litton was reimbursed for funds previously
advanced to WAI for use in the acquisition of Dresser Industries, Inc.'s
minority interest in WAII and the geophysical services business of Halliburton
Company (See Note 5 of Item 1 of this Form 10-Q). WAI also repaid Litton for
certain intercompany indebtedness. Total cash received from WAI on
Distribution date amounted to approximately $570 million. A portion of the
funds received was used by Litton to repay certain short-term borrowings. At
April 30, 1994, cash and marketable securities amounted to $612 million.
Additionally, the Company has available credit commitments of up to $400
million, which became effective on the Distribution date, for its general use.
Discontinued Operations:
On March 17, 1994, the Company distributed all of the issued and outstanding
shares of Common stock of WAI to holders of Litton Common stock (See Note 5 of
Item 1 of this Form 10-Q). The results of WAI's operations through the
effective accounting date of the Distribution have been included in Litton's
Consolidated Statements of Operations as discontinued operations.
Results for the current fiscal year included special charges recorded to
reflect the write-down of net assets in connection with WAI's decision to sell
the Core Laboratories division ("Core") of WAII and to provide for obsolescence
of older technology equipment, vessels and inventory and the consolidation of
facilities. These special charges totalled $179 million, net of tax, of which
$163 million was recorded in the second quarter of fiscal year 1994.
Subsequently efforts to sell Core and the results of an independent valuation
study provided evidence that the value of Core was further impaired and an
additional $16 million, net of tax, was recorded in the third quarter of fiscal
year 1994.
-13-
<PAGE> 14
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
- - -----------------------------------------
(a) Exhibits
<TABLE>
<S> <C>
Exhibit 3.1: By-laws of the Company as amended through the date of
this filing.
Exhibit 3.2: Board of Directors Resolution, adopted December 8,
1993, with respect to the number of members of the
Board of Directors.
Exhibit 4.1: $400,000,000 Credit Agreement, dated December 23, 1993,
among Litton Industries, Inc., a group of banks and
Morgan Guaranty Trust Company of New York, as Agent,
and Wells Fargo Bank, N.A., as Co-agent, along with
Amendment No. 1 and Amendment No. 2 to Credit Agreement.
Exhibit 10.1: Board of Directors Resolution, adopted December 8,
1993, with respect to nonemployee directors' annual
retainer and attendance fees.
Exhibit 10.2: Resolution adopted by the Compensation and Selection
Committee, dated January 26, 1994, approving the
participation by Orion L. Hoch and Catherine Nan Hoch
in the Supplemental Medical Insurance Plan.
Exhibit 10.3: Second Amendment, dated December 17, 1993, to the Agreement
of Trust dated December 20, 1988.
Exhibit 10.4: Second Amendment to the Supplemental Retirement
Agreement between the Company and Orion L. Hoch.
Exhibit 10.5: Consulting agreement between a subsidiary of the
Company and Thomas B. Hayward, a director of the
Company, dated December 17, 1993.
Exhibit 11: Statement of Computation of Earnings per Share
included herein as Exhibit 11 on page 15.
</TABLE>
(b) Reports on Form 8-K
In a report filed on Form 8-K dated March 17, 1994, the Company
reported the completion and presented on a pro forma basis the
effects of the distribution of all of the issued and outstanding
Common stock of its wholly-owned subsidiary Western Atlas Inc.
(See Note 5 of Item 1 of this Form 10-Q for further information).
-14-
<PAGE> 15
<TABLE>
<CAPTION>
EXHIBIT 11
LITTON INDUSTRIES, INC. AND SUBSIDIARY COMPANIES
PRIMARY EARNINGS (LOSS) PER SHARE AND FULLY DILUTED EARNINGS (LOSS) PER SHARE
(thousands of dollars, except per share data)
Nine Months Ended Three Months Ended
April 30, April 30,
----------------------- -------------------
1994 1993 1994 1993
- - --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
PRIMARY EARNINGS (LOSS) PER SHARE
- - ---------------------------------
Earnings available for common shares and common stock
equivalent shares deemed to have a dilutive effect:
Earnings from continuing operations $ 79,584 $ 66,601 $30,253 $23,967
Provision for cash dividends on preferred stock (Series B) (616) (616) (206) (206)
- - --------------------------------------------------------------------------------------------------------------------
Net earnings from continuing operations 78,968 65,985 30,047 23,761
Discontinued operations:
Results of Western Atlas Inc. (173,079) 70,051 (7,465) 25,491
Cumulative effect of a change in accounting principle:
Continuing operations - (106,727) - -
Discontinued operations:
Results of Western Atlas Inc. - (10,390) - -
- - --------------------------------------------------------------------------------------------------------------------
Net earnings (loss) available for common shares and common stock
equivalent shares deemed to have a dilutive effect $ (94,111) $ 18,919 $22,582 $49,252
====================================================================================================================
-15-
</TABLE>
<PAGE> 16
<TABLE>
<CAPTION>
EXHIBIT 11
LITTON INDUSTRIES, INC. AND SUBSIDIARY COMPANIES
PRIMARY EARNINGS (LOSS) PER SHARE AND FULLY DILUTED EARNINGS (LOSS) PER SHARE
(thousands of dollars, except per share data)
(continued)
Nine Months Ended Three Months Ended
April 30, April 30,
------------------ ------------------
1994 1993 1994 1993
- - ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Primary earnings (loss) per share before cumulative effect of a
change in accounting principle:
Continuing operations $ 1.73 $ 1.61 $ 0.64 $0.59
Discontinued operations:
Results of Western Atlas Inc. (3.79) 1.70 (0.16) 0.63
Cumulative effect of a change in accounting principle:
Continuing operations - (2.60) - -
Discontinued operations:
Results of Western Atlas Inc. - (0.25) - -
- - ---------------------------------------------------------------------------------------------------------------
Total Primary $(2.06) $ 0.46 $ 0.48 $1.22
===============================================================================================================
-16-
</TABLE>
<PAGE> 17
<TABLE>
<CAPTION>
EXHIBIT 11
LITTON INDUSTRIES, INC. AND SUBSIDIARY COMPANIES
PRIMARY EARNINGS (LOSS) PER SHARE AND FULLY DILUTED EARNINGS (LOSS) PER SHARE
(thousands of dollars, except per share data)
(continued)
Nine Months Ended Three Months Ended
April 30, April 30,
--------------------- ------------------
1994 1993 1994 1993
- - ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
FULLY DILUTED EARNINGS (LOSS) PER SHARE
- - ---------------------------------------
Net earnings (loss) available for common shares and common stock
equivalent shares deemed to have a dilutive effect $(94,111) $18,919 $22,582 $49,252
Add: Interest on zero coupon convertible subordinated notes,
net of applicable income taxes - - - 3,559
- - ---------------------------------------------------------------------------------------------------------------------
Total $(94,111) $18,919 $22,582 $52,811
=====================================================================================================================
Fully diluted earnings (loss) per share:
Continuing operations $ 1.73 $ 1.60 $ 0.64 $0.59
Discontinued operations:
Results of Western Atlas Inc. (3.79) 1.70 (0.16) 0.55
Cumulative effect of a change in accounting principle:
Continuing operations - (2.59) - -
Discontinued operations:
Results of Western Atlas Inc. - (0.25) - -
- - ---------------------------------------------------------------------------------------------------------------------
Total Fully Diluted $(2.06) $ 0.46 $ 0.48 $1.14
=====================================================================================================================
-17-
</TABLE>
<PAGE> 18
<TABLE>
<CAPTION>
EXHIBIT 11
LITTON INDUSTRIES, INC. AND SUBSIDIARY COMPANIES
PRIMARY EARNINGS (LOSS) PER SHARE AND FULLY DILUTED EARNINGS (LOSS) PER SHARE
(thousands of dollars, except per share data)
(continued)
Nine Months Ended Three Months Ended
April 30, April 30,
------------------------ -----------------------
1994 1993 1994 1993
- - -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares used in primary earnings (loss) per share computation
- - ------------------------------------------------------------
Weighted average common shares outstanding
(net of treasury shares) 45,667,830 40,053,248 45,776,442 39,147,856
Common stock equivalents - 970,452 1,031,300 1,073,461
- - -----------------------------------------------------------------------------------------------------------------------
Total common shares and common stock equivalent shares
deemed to have a dilutive effect 45,667,830 41,023,700 46,807,742 40,221,317
=======================================================================================================================
Shares used in fully diluted earnings (loss) per share computation
- - ------------------------------------------------------------------
Total common shares and common stock equivalent shares
deemed to have a dilutive effect 45,667,830 41,023,700 46,807,742 40,221,317
Additional potentially dilutive securities
(equivalent in common stock):
Zero coupon convertible subordinated notes - - - 6,122,490
Stock options - 263,179 24,506 116,001
- - -----------------------------------------------------------------------------------------------------------------------
Total 45,667,830 41,286,879 46,832,248 46,459,808
=======================================================================================================================
-18-
</TABLE>
<PAGE> 19
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
LITTON INDUSTRIES, INC.
(Registrant)
By /s/ Rudolph E. Lang, Jr.
-------------------------------
Rudolph E. Lang, Jr.
Senior Vice President and
Chief Financial Officer
June 14, 1994
-19-
<PAGE> 1
Exhibit 3.1
BY-LAWS
OF
LITTON INDUSTRIES, INC.
(A DELAWARE CORPORATION)
[COMPOSITE]
EXH. 3.1-1
<PAGE> 2
BY-LAWS
OF
LITTON INDUSTRIES, INC.
INDEX
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE I. OFFICES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1. Principal Office . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 2. Other Offices. . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II. MEETINGS OF STOCKHOLDERS . . . . . . . . . . . . . . . . . . . . . 1
Section 1. Place of Meetings. . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 2. Annual Election of Directors . . . . . . . . . . . . . . . . . . . 2
Section 3. Voting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 4. Quorum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 5. Special Meetings . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 6. Notice of Meetings . . . . . . . . . . . . . . . . . . . . . . . . 3
ARTICLE III. DIRECTORS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 1. Number and Term. . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 2. Chairman of the Board of Directors . . . . . . . . . . . . . . . . 4
Section 3. Resignation. . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 4. Vacancies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 5. Removal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 6. Powers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 7. Executive Committee. . . . . . . . . . . . . . . . . . . . . . . . 6
Section 8. Other Committees . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 9. Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 10. Quorum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 11. Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 12. Advisory Directors . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 13. Contracts of Interested Directors. . . . . . . . . . . . . . . . . 10
ARTICLE IV. OFFICERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 1. Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 2. Other Officers and Agents . . . . . . . . . . . . . . . . . . . . 12
Section 3. President. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 4. Chief Executive Officer . . . . . . . . . . . . . . . . . . . . . 13
Section 5. Treasurer. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 6. Secretary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 7. Controller . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
</TABLE>
i
EXH. 3.1-2
<PAGE> 3
BY-LAWS
OF
LITTON INDUSTRIES, INC.
INDEX
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE V. MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 1. Certificates of Stock. . . . . . . . . . . . . . . . . . . . . . . 16
Section 2. Lost Certificates. . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 3. Transfer of Shares . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 4. Record Date. . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 5. Dividends. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 6. Seal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 7. Fiscal Year. . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 8. Checks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 9. Notice and Waiver of Notice. . . . . . . . . . . . . . . . . . . . 18
ARTICLE VI. AMENDMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
</TABLE>
ii
EXH. 3.1-3
<PAGE> 4
BY-LAWS
OF
LITTON INDUSTRIES, INC.
-------------------------
ARTICLE I
OFFICES
SECTION 1. PRINCIPAL OFFICE. -- The principal office shall be
established and maintained at the office of The Prentice-Hall Corporation
System, Inc., in the City of Dover, in the County of Kent, in the State of
Delaware, and said corporation shall be the resident agent of this Corporation
in charge thereof.
SECTION 2. OTHER OFFICES. -- The Corporation may have other
offices, either within or outside of the State of Delaware, at such place or
places as the Board of Directors may from time to time appoint or the business
of the Corporation may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
SECTION 1. PLACE OF MEETINGS. -- The annual meeting and all other
meetings of the stockholders shall be held at such place as shall be fixed by
resolution of the Board of Directors and stated in the notice of the meeting.
- 1 -
EXH. 3.1-4
<PAGE> 5
SECTION 2. ANNUAL ELECTION OF DIRECTORS. -- The annual meeting of
stockholders for the election of directors and the transaction of other
business shall be held in each year on the second Saturday in December at 10
o'clock a.m., or on such other date and time as may be fixed by resolution of
the Board of Directors. Each annual meeting will be held within thirteen (13)
months of the last annual meeting.
Notice of the date, place and time of the annual meeting shall be
given to each stockholder entitled to vote, in person, or by letter mailed to
his last known post office address not more than 60 or less than 10 days before
the election is to be held.
SECTION 3. VOTING. -- Each stockholder entitled to vote in
accordance with the terms of the Certificate of Incorporation and in accordance
with the provisions of these By-laws shall be entitled to one vote, in person
or by proxy, for each share of stock entitled to vote held by such stockholder,
but no proxy shall be voted after three years from its date unless such proxy
provides for a longer period. The Board of Directors shall fix a record date
to determine the stockholders entitled to receive notice thereof and vote at
any election for directors. All elections for directors shall be decided by
plurality votes; all other questions shall be decided by majority vote except
as otherwise provided by the Certificate of Incorporation or the laws of the
State of Delaware.
The Secretary shall prepare, at least ten days before every meeting of
stockholders, a complete list of the stockholders entitled to vote at the
meeting, arranged in alphabetical order, and showing the address of each
stockholder and the number of shares registered in the name of each
stockholder. Such list shall be open to the examination of any stockholder for
any purpose germane to the meeting during ordinary business hours for a period
of at least ten days prior to the meeting, either at a
- 2 -
EXH. 3.1-5
<PAGE> 6
place within the city where the meeting is to be held, which place shall
be specified in the notice of meeting, or, if not so specified, at the place
where the meeting is to be held. The list shall also be kept at the time and
place of the meeting during the whole time thereof and may be inspected by any
stockholder who is present.
SECTION 4. QUORUM. -- Except as otherwise required by law, by the
Certificate of Incorporation or by these By-laws, the presence, in person or by
proxy, of stockholders holding a majority of the stock of the Corporation
entitled to vote shall constitute a quorum at all meetings of the stockholders.
In case a quorum shall not be present at any meeting, a majority in interest of
the stockholders entitled to vote thereat, present in person or by proxy, shall
have power to adjourn the meeting from time to time, without notice other than
announcement at the meeting, until the requisite amount of stock entitled to
vote shall be present. At any such adjourned meeting at which the requisite
amount of stock entitled to vote shall be represented, any business may be
transacted which might have been transacted at the meeting as originally
noticed; but only those stockholders entitled to vote at the meeting as
originally noticed shall be entitled to vote at any adjournment or adjournments
thereof.
SECTION 5. SPECIAL MEETINGS. -- Special meetings of the
stockholders for any purpose or purposes shall be called upon a requisition in
writing therefor, stating the purpose or purposes thereof, delivered to the
Chairman of the Board, the President, or the Secretary, signed by a majority of
the directors or by fifty-one percent in interest of the stockholders entitled
to vote, or by resolution of the Board of Directors or the Executive Committee
thereof.
SECTION 6. NOTICE OF MEETINGS. -- Written or printed notice, stating
the place and time of the meeting and the general nature of the business to be
- 3 -
EXH. 3.1-6
<PAGE> 7
considered, shall be given by the Secretary to each stockholder entitled
to vote thereat at his last known post office address at least ten days
before the meeting in the case of an annual meeting or a special meeting
called upon request by the directors and at least forty-five days before the
meeting in the case of a special meeting called upon request of the
stockholders.
No business other than that stated in the notice shall be transacted
at any meeting without unanimous consent of all the stockholders entitled to
vote thereat.
ARTICLE III
DIRECTORS
SECTION 1. NUMBER AND TERM. -- The number of directors shall be
fixed from time to time by resolution of the Board of Directors but shall be
not less than seven nor more than fifteen, of whom a majority shall be persons
not serving as an officer or director of a company, the stock of which was
distributed to the stockholders of the Corporation as a dividend, and in order
to assure compliance with the Shipping Act, 1916, as amended, and the Merchant
Marine Act, 1936, as amended, no more than a minority of the number of
directors necessary to constitute a quorum of the Board of Directors, as
provided in Section 10 of this Article III, shall be aliens.
The directors shall be elected at the annual meeting of the
stockholders and each director shall be elected to serve until a successor
shall be elected and shall qualify. Directors need not be stockholders.
SECTION 2. CHAIRMAN OF THE BOARD OF DIRECTORS. -- The Chairman of
the Board of Directors shall be elected by the Board of Directors. He
- 4 -
EXH. 3.1-7
<PAGE> 8
shall preside at the meetings of the Board of Directors and he or any
director or officer of the Corporation designated by him shall preside at all
meetings of the stockholders of the Corporation. He shall perform such other
duties and services as shall be assigned to him by the Board of Directors. The
Chairman of the Board of Directors shall be an officer of the Corporation
unless the Chairman is a director or officer of a company, the stock of which
was distributed to the stockholders of the Corporation as a dividend.
SECTION 3. RESIGNATION. -- Any director, member of a committee or
other officer may resign at any time. Such resignation shall be made in
writing and shall take effect at the time specified therein, and if no time be
specified, at the time of its receipt by the Chairman of the Board, the
President, or the Secretary. The acceptance of a resignation shall not be
necessary to make it effective.
SECTION 4. VACANCIES. -- If the office of any director, member of a
committee or other officer becomes vacant, the remaining directors in office,
by a majority vote, may appoint any qualified person to fill such vacancy, who
shall hold office for the unexpired term and until his successor shall be duly
chosen.
SECTION 5. REMOVAL. -- Any director or directors may be removed
either for or without cause at any time by the affirmative vote of the holders
of a majority of all the shares of stock outstanding and entitled to vote at a
special meeting of the stockholders called for that purpose.
SECTION 6. POWERS. -- The Board of Directors shall exercise all of
the powers of the Corporation except such as are by law, or by the Certificate
of
- 5 -
EXH. 3.1-8
<PAGE> 9
Incorporation of the Corporation, or by these By-laws conferred upon or
reserved to the stockholders.
SECTION 7. EXECUTIVE COMMITTEE. -- The Board of Directors shall
elect from among its membership an Executive Committee to consist of five
members, a majority of whom must be directors who are not directors or officers
of a company the stock of which was distributed to the stockholders of the
Corporation as a dividend. Between the meetings of the Board of Directors and
while such Board is not in session, the Executive Committee shall have all the
powers and exercise all the duties of the Board of Directors unless prohibited
under Section 141 of the Delaware General Corporation Law, including the powers
to authorize the issuance of the stock of the Corporation and to adopt a
certificate of ownership and merger pursuant to Section 253 of the Delaware
General Corporation Law. The Executive Committee shall report all of its
actions to the Board of Directors, and its powers herein created shall be
subject to such limitation as may be imposed by the Board of Directors, acting
at any regular meeting or at any special meeting for which notice of such
action has been given. The Committee shall keep regular minutes of its
proceedings and report the same to the Board of Directors when required.
The meetings of the Executive Committee shall be called by the Secretary of the
Corporation, from time to time, at the direction and upon the request of any
member of the Executive Committee. Notice of such meeting shall in each
instance be given to each member of the Committee at his last known business
address, at least one day before the meeting, either orally or in writing,
delivered personally or by mail or telegraph.
- 6 -
EXH. 3.1-9
<PAGE> 10
A quorum of the Committee shall consist of a majority of the members of the
Committee. In order for any business to be conducted at the meeting, a
majority of the Committee members must be persons who are not directors or
officers of a company the stock of which was distributed to the stockholders of
the Corporation as a dividend, and such persons must be present and remain for
the duration of the meeting.
The Chairman of the Executive Committee, unless otherwise provided by
resolution or resolutions of the Board of Directors, shall be elected by a
majority of the members of the Executive Committee, and whenever any change
shall be made in the membership of any such Committee, a new Chairman shall be
elected in the same manner.
SECTION 8. OTHER COMMITTEES. -- The Board of Directors may by
resolution or resolutions passed by a majority of the whole Board, designate
one or more additional committees, each committee to consist of two or more of
the directors of the Corporation which, to the extent provided in said
resolution or resolutions or in these By-laws, shall have and may exercise the
powers of the Board of Directors in the management of the business and affairs
of the Corporation, and may have power to authorize the seal of the Corporation
to be affixed to all papers which may require it. A majority of the members of
each Committee must be directors who are not directors or officers of a company
the stock of which was distributed to the stockholders of the Corporation as a
dividend. In addition to the regular members of each committee, the Board may
designate one or more alternate members who may replace any absent or
disqualified member at any meeting of the committee. In the event of the
absence or disqualification of any member of such committee or committees at a
time when the Board is not in session, the members of the committee present at
any meeting and not disqualified from voting, whether or not he, she, or they
constitute a quorum, may unanimously appoint another member of the Board of
Directors to act at the meeting in
- 7 -
EXH. 3.1-10
<PAGE> 11
the place of any such absent or disqualified member, subject to the
requirements set forth in the second sentence of this Section 8. Such
committee or committees shall have such name or names as may be stated in these
By-laws or as may be determined from time to time by resolution adopted by the
Board of Directors. The Chairman of each such committee, unless otherwise
provided by the Board of Directors in such resolution or resolutions
designating such committee, shall be elected by a majority of the members of
each such committee and whenever any change shall be made in the membership of
any such committee, a new Chairman shall be elected in the same manner. The
committees shall keep regular minutes of their proceedings and report the same
to the Board when required.
SECTION 9. MEETINGS. -- The newly elected directors may hold their
first meeting for the purpose of organization and the transaction of business,
if a quorum be present, immediately after the annual meeting of the
stockholders, or the time and place of such meeting may be fixed by consent in
writing of all the directors.
Regular meetings of the directors may be held without notice at such
places and times as shall be determined from time to time by resolution of the
directors.
Special meetings of the Board may be called by the Chairman of the
Board, by the President, or by the Secretary on the written request of any two
directors upon notice to each director and shall be held at such place or
places as may be determined by the directors, or as shall be stated in the call
of the meeting.
Members of the Board of Directors or any committee designated by such
Board, may participate in a meeting of such Board or committee by means of
conference telephone or similar communications equipment by means of which all
persons
- 8 -
EXH. 3.1-11
<PAGE> 12
participating in the meeting can hear each other, and such participation shall
constitute presence in the person at such meeting.
Any action required or permitted to be taken at any meeting of the
Board of Directors or governing body, or any committee thereof may be taken
without a meeting if all the members of the Board or committee, as the case may
be, consent thereto in writing, and the writing or writings are filed with the
minutes of proceedings of the Board, governing body, or committee.
SECTION 10. QUORUM. -- One-third of the directors but not less than
four, shall constitute a quorum for the transaction of business. A majority of
directors whose presence is counted for purposes of determining a quorum must
be directors who are not directors or officers of a company the stock of which
was distributed to the stockholders of the Corporation as a dividend. If at
any meeting of the Board there shall be less than a quorum present, a majority
of those present may adjourn the meeting from time to time until a quorum is
obtained, and no further notice thereof need be given other than by
announcement at the meeting which shall be so adjourned.
SECTION 11. COMPENSATION. -- Directors shall not receive any stated
salary for their services as directors or as members of committees, or for any
other special assignment but by resolution of the Board a fixed annual fee and
fee and expenses of attendance may be allowed for attendance at each meeting.
In addition, a fixed annual or other fee may be paid for specified services to
the Board, such as service as Chairman of the Board or of any Committee
thereof. Nothing herein contained shall be construed to preclude any director
from serving the Corporation in any other capacity as an officer, agent or
otherwise, and receiving compensation therefor.
- 9 -
EXH. 3.1-12
<PAGE> 13
SECTION 12. ADVISORY DIRECTORS. -- The Board of Directors may elect
one or more advisory directors who shall have such powers and shall perform
such duties as the directors shall assign to them. Advisory directors shall,
upon election, serve until the next annual meeting of stockholders.
Advisory directors shall receive notices of all meetings of the Board
of Directors called by the Chairman of the Board, by the President, or by the
Secretary (on written request of any two directors) in the same manner and at
the same time as the directors. They shall attend said meetings referred to in
said notices in an advisory capacity, but will not cast a vote or be counted to
determine a quorum. Any advisory directors may be removed either with or
without cause, by a majority of the directors at the time in office, at any
regular or special meeting of the Board of Directors.
Advisory Directors shall not receive any stated salary for their
services as Advisory Directors, but by resolution of the Board of Directors a
fixed annual fee and expenses of attendance may be allowed for attendance at
each meeting, as aforementioned in Section 11. Nothing herein contained shall
be construed to preclude any advisory director from serving the Corporation in
any other capacity as an officer, agent or otherwise, and receiving
compensation therefor.
SECTION 13. CONTRACTS OF INTERESTED DIRECTORS. -- No contract or
other transaction between the Corporation and one or more of its directors or
officers or between the Corporation and any other corporation, partnership,
association or other organization in which one or more of its directors or
officers are directors or officers or have financial interest, shall be void or
voidable solely for this reason or solely because such person is present or
participates in the meeting of the
- 10 -
EXH. 3.1-13
<PAGE> 14
Board of Directors or the committee thereof which authorizes the contract or
transaction or solely because his vote is counted for this purpose, provided
that: (1) the material facts as to his relationship or interest and as to the
contract or transaction are disclosed or known to the Board or committee by the
vote of a majority of its disinterested directors (even though less than a
quorum) in good faith authorizes said contract or transaction, or said facts
are disclosed or known to the stockholders entitled to vote thereon and said
stockholders in good faith approve said contract or transaction, or (2) the
contract or transaction is fair as to the Corporation at the time it is
authorized, approved or ratified by the Board, committee or stockholders.
For the purposes of this By-law the common or interested director or
directors may be counted in determining the presence of a quorum at a meeting
of the Board or committee which authorizes the contract or transaction.
ARTICLE IV
OFFICERS
SECTION 1. OFFICERS. -- The officers of the Corporation shall be a
President, Chief Executive Officer, a Secretary, a Treasurer, a Controller,
and if deemed necessary, expedient or desirable by the Board of Directors, one
or more Vice Presidents (one or more of whom may be designated Executive or
Senior Vice President) one or more Assistant Secretaries and one or more
Assistant Treasurers. The Board of Directors shall also designate the Chairman
of the Board or the President as the Chief Executive Officer of the Corporation
unless prohibited by Section 2 of ARTICLE III. None of such officers, except
the President need be directors. The officers shall be elected by the Board of
Directors at their first meeting after the annual meeting of stockholders. Any
number of offices may be held by the same person,
- 11 -
EXH. 3.1-14
<PAGE> 15
except as otherwise required by applicable state law. In order to assure
compliance with the Shipping Act, 1916, as amended, and the Merchant Marine
Act, 1936, as amended, the Chairman of the Board of Directors and the
President shall be citizens of the United States and no Vice President or
other individual shall be authorized to act in the absence or disability
of the Chairman of the Board of Directors and the President unless he or she
is a citizen of the United States.
Unless otherwise provided for in the resolution choosing him or her,
each officer shall be chosen for a term that shall continue until the meeting
of the Board of Directors following the next annual meeting of stockholders and
until his or her successor shall have been chosen and qualified.
All officers of the Corporation shall have such authority and perform
such duties in the management and operation of the Corporation as shall be
prescribed in the By-laws or in the resolutions of the Board of Directors
designating and choosing such officers and prescribing their authority and
duties, and shall have such additional authority and duties as are incident to
their office except to the extent that such resolutions may be inconsistent
therewith. Any officer may be removed, with or without cause, by the Board of
Directors. Any vacancy in any office may be filled by the Board of Directors.
SECTION 2. OTHER OFFICERS AND AGENTS. -- The Board of Directors
may appoint such other officers and agents as it may deem advisable, who shall
hold their offices for such terms and shall exercise such powers and perform
such duties as shall be determined from time to time by the Board of Directors.
The Chief Executive Officer may appoint key executives to the position of staff
vice president. Such staff vice presidents shall not be corporate officers and
shall exercise such powers
- 12 -
EXH. 3.1-15
<PAGE> 16
and perform such duties as are assigned to them by the Chief Executive Officer
or the President.
SECTION 3. PRESIDENT. -- During the absence or disability of the
Chairman of the Board of Directors, the President shall preside at all meetings
of the Board of Directors and he or any director or officer designated by him
shall preside at all meetings of the stockholders of the Corporation and he
shall exercise all of the functions of the Chairman of the Board of Directors.
Except when the Board of Directors shall authorize the execution thereof in
some other manner, the President is authorized and empowered to execute and
deliver all bonds, mortgages, and other contracts, instruments, amendments and
supplements thereto, for and on behalf of the Corporation, as he shall deem
appropriate and in the best interest of the Corporation and he may designate
any other officer or employee to execute and deliver such documents or to
ratify and approve the execution and delivery thereof and such action by the
President and any officer or employee so designated shall be binding on the
Corporation. He shall cause the corporate seal to be affixed to any instrument
requiring it and attested by the signature of the Secretary or an Assistant
Secretary. The President shall perform such other duties as may be required of
him by the Board of Directors.
SECTION 4. CHIEF EXECUTIVE OFFICER. -- The officer designated by
the Board of Directors as the Chief Executive Officer shall have the general
power to supervise, direct, manage and control the business and affairs of the
Corporation. He shall have the general power to appoint, remove or suspend all
employees and agents of the Corporation, subject to the power of the Board of
Directors and the provisions of these By-laws. Except as the Board of
Directors shall, by resolution, otherwise determine, the Chief Executive
Officer shall exercise for and in the name of the
- 13 -
EXH. 3.1-16
<PAGE> 17
Corporation, in his own and sole judgement, all of the rights, powers
and privileges of ownership, including the right to vote thereon, of any and all
securities of any nature whatsoever held by or in the name of the Corporation.
He shall exercise all of the powers usually appertaining to the office held by
the Chief Executive Officer of a corporation.
SECTION 5. TREASURER. -- The Treasurer shall have custody of the
corporate funds and securities and shall cause full and accurate account of the
receipts and disbursements of the Corporation to be kept in books and records
belonging to the Corporation. He shall establish and maintain bank accounts in
the name of the Corporation in such bank or banks, as he, with the approval of
the Chairman of the Board of Directors or the President or the Chief Financial
Officer, may deem appropriate; deposit all moneys or other valuables in the
name and to the credit of the Corporation in such depositories; designate the
person or persons and the conditions under which he or they may withdraw funds
therefrom; and, revoke the authorization of such persons.
The Treasurer shall disburse the funds of the Corporation as may be
ordered by the Chairman of the Board of Directors or the President or Chief
Financial Officer, taking proper vouchers for such disbursement when
appropriate. He shall render to the Chairman of the Board of Directors, the
President and the Board of Directors at regular meetings of the Board of
Directors, or at their request, an account of all his transactions as
Treasurer. If required by the Board of Directors he shall give the corporation
a bond for the faithful discharge of his duties in such amount and with such
surety as the Board shall prescribe.
- 14 -
EXH. 3.1-17
<PAGE> 18
SECTION 6. SECRETARY. -- The Secretary shall give, or cause to be
given, notice of all meetings of the stockholders and directors, and all other
notices required by law or by these By-laws, and in case of his absence or
refusal or neglect so to do, any such notices may be given by any person
thereunto directed by the President, or by the directors, or stockholders, upon
whose requisition the meeting is called as provided in these By-laws. He shall
record all the proceedings of the meetings of the Corporation and of the Board
of Directors in a book to be kept for that purpose, and shall perform such
other duties as may be assigned to him by the Board of Directors, the Chairman
of the Board of Directors or the President. He shall have the custody of the
seal of the Corporation and shall affix the same to all instruments requiring
it, when authorized by the Board of Directors, the Chairman of the Board of
Directors, or the President, and attest the same.
SECTION 7. CONTROLLER. -- The Controller shall have custody of the
financial records of the Corporation and shall keep full and accurate books and
records of the financial transactions of the Corporation. He shall determine
the methods of accounting and reporting for all entities comprising the
Corporation, and shall be responsible for assuring adequate systems of internal
control.
The Controller shall render to the Chairman of the Board of Directors,
the President, and the Board of Directors, at the regular meetings of the Board
of Directors or whenever they may request it, a report on the financial
condition of the Corporation and of the results of its operations. If required
by the Board of Directors, he shall give the Corporation a bond for the
faithful discharge of his duties in such amount and with such surety as the
Board shall prescribe.
- 15 -
EXH. 3.1-18
<PAGE> 19
ARTICLE V
MISCELLANEOUS
SECTION 1. CERTIFICATES OF STOCK. -- Certificates of stock,
numbered and with the seal of the Corporation affixed, signed by the Chairman
of the Board of Directors, the President or Vice President, and the Treasurer
or an Assistant Treasurer, or Secretary or an Assistant Secretary, shall be
issued to each stockholder certifying the number of shares owned by him in the
Corporation. When such certificates are signed by either (1) a transfer agent
other than the Corporation or its employee, or (2) a registrar other than the
Corporation or its employee, the signatures of such officers may be facsimiles.
SECTION 2. LOST CERTIFICATES. -- A new certificate of stock may be
issued in the place of any certificate theretofore issued by the Corporation,
alleged to have been lost or destroyed, and the directors may, in their
discretion, require the owner of the lost or destroyed certificate, or his
legal representative, to give the Corporation a bond, in such sum as they may
direct to indemnify the Corporation against any claim that may be made against
it on account of the alleged loss of any such certificate or the issuance of
any such new certificate.
SECTION 3. TRANSFER OF SHARES. -- Upon the surrender to the
Corporation of a certificate for shares, properly endorsed, the corporation
shall issue a new certificate to the transferee, cancel the old certificate,
and record the transaction on its books. The person in whose name shares of
stock stand on the books of the Corporation shall be deemed by the Corporation
to be the owner thereof for all purposes, and the Corporation shall not be
bound to recognize any equitable or other claim thereto on the part of any
other person.
- 16 -
EXH. 3.1-19
<PAGE> 20
SECTION 4. RECORD DATE. -- The Board of Directors may affix in
advance a date, not more than 60 days nor less than 10 preceding any action,
including the date of the payment of any dividend or the date for the allotment
of rights or the date when any change or conversion 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 meeting of
stockholders, or to express consent to corporate action in writing without a
meeting or entitled to receive payment of any such dividends or to any such
allotment of rights or to exercise the rights in respect of any such change,
conversion or exchange of capital stock, or for the purpose of any lawful
action, and in such case such stockholders only as shall be stockholders of
record on the date so fixed shall be entitled to such notice of, and to vote at
such meeting, or to receive payment of such dividend or to receive 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 fixed as aforesaid.
SECTION 5. DIVIDENDS. -- Subject to the provisions of the
Certificate of Incorporation, the Board of Directors may, out of funds legally
available therefor at any regular or special meeting, declare dividends upon
the capital stock of the Corporation as and when they deem expedient. Before
declaring any dividend there may be set apart out of any funds of the
Corporation available for dividends, such sum or sums as the directors from
time to time in their discretion deem proper for working capital or as a
reserve fund to meet contingencies or for equalizing dividends or for such
other purposes as the directors shall deem conducive to the interests of the
Corporation.
SECTION 6. SEAL. -- The corporate seal shall be circular in form
and shall contain the name of the Corporation, the year of its creation and
the words
- 17 -
EXH. 3.1-20
<PAGE> 21
"CORPORATE SEAL DELAWARE". Said seal may be used by causing it or a
facsimile thereof to be impressed or affixed or reproduced or otherwise.
SECTION 7. FISCAL YEAR. -- The fiscal year of the Corporation shall
begin August 1st and end July 31st.
SECTION 8. CHECKS. -- 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, agent or agents
of the Corporation and in such a manner as shall be determined from time to
time by resolution of the Board of Directors.
SECTION 9. NOTICE AND WAIVER OF NOTICE. -- Whenever any notice is
required by these By-laws to be given, personal notice is not meant unless
expressly so stated, and any notice so required shall be deemed to be
sufficient if given by depositing the same in a post office box in a sealed
post-paid wrapper, addressed to the person entitled thereto at his last known
post office address, and such notice shall be deemed to have been given on the
day of such mailing. Stockholders not entitled to vote shall not be entitled
to receive notice of any meetings except as otherwise provided by statute.
Whenever any notice whatever is required to be given under the
provisions of any law, or under the provisions of the Certificate of
Incorporation of the Corporation or these By-laws, a waiver thereof in writing,
signed by the person or persons entitled to said notice, whether before or
after the time stated therein, shall be deemed equivalent thereto.
- 18 -
EXH. 3.1-21
<PAGE> 22
ARTICLE VI
AMENDMENTS
These By-laws may be altered or repealed and new By-laws may be
adopted (1) at any annual or special meeting of stockholders if notice of the
proposed alteration, repeal or adoption of the new By-law or By-laws be
contained in the notice of such special meeting by the affirmative vote of a
majority of the stock issued and outstanding and entitled to vote thereat, (2)
by the affirmative vote of a majority of the members present at any regular
meeting of the Board of Directors, or at any special meeting of the Board of
Directors, if notice of the proposed alteration, repeal or new By-law or
By-laws to be made, be contained in the notice of such special meeting.
-oo0oo-
- 19 -
EXH. 3.1-22
<PAGE> 1
Exhibit 3.2
MINUTES OF ORGANIZATIONAL MEETING
OF THE NEWLY ELECTED
BOARD OF DIRECTORS
DECEMBER 8, 1993 (PAGE 22)
NUMBER OF DIRECTORS
"RESOLVED, that the number of members of the Board of Directors be
established as ten."
EXH. 3.2-1
<PAGE> 1
EXHIBIT 4.1
$400,000,000
CREDIT AGREEMENT
dated as of
December 23, 1993
among
Litton Industries, Inc.
The Banks Listed Herein
and
Morgan Guaranty Trust Company of New York,
as Agent, and
Wells Fargo Bank, N.A.,
as Co-Agent
1
EXH. 4.1-1
<PAGE> 2
TABLE OF CONTENTS(1)
<TABLE>
<CAPTION>
Page
----
<S> <C> <C> <C>
ARTICLE I
DEFINITIONS
SECTION 1.01 Definitions.......................... 1
1.02 Accounting Terms and Determinations.. 18
1.03 Types of Borrowings.................. 18
1.04 Basis for Ratings.................... 19
ARTICLE II
THE CREDITS
SECTION 2.01 Commitments to Lend.................. 19
2.02 Notice of Committed Borrowings....... 21
2.03 Money Market Borrowings.............. 21
2.04 Notice to Banks; Funding of Loans.... 26
2.05 Notes................................ 27
2.06 Maturity of Loans.................... 28
2.07 Interest Rates....................... 28
2.08 Fees................................. 32
2.09 Optional Termination or Reduction
of Commitments..................... 33
2.10 Mandatory Termination
of Commitments..................... 33
2.11 Optional Prepayments................. 33
2.12 General Provisions as to Payments.... 34
2.13 Funding Losses....................... 35
2.14 Computation of Interest and Fees..... 35
2.15 Regulation D Compensation............ 35
ARTICLE III
CONDITIONS
SECTION 3.01 Effectiveness........................ 36
3.02 Borrowings........................... 37
</TABLE>
____________________
(1) The Table of Contents is not a part of this Agreement.
2
EXH. 4.1-2
<PAGE> 3
<TABLE>
<CAPTION>
Page
----
<S> <C> <C> <C>
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01 Corporate Existence and Power....... 38
4.02 Corporate and Governmental
Authorization; No Contravention... 38
4.03 Binding Effect...................... 39
4.04 Financial Information............... 39
4.05 Litigation.......................... 39
4.06 Compliance with ERISA............... 40
4.07 Environmental Matters............... 40
4.08 Taxes............................... 41
4.09 Material Subsidiaries............... 41
4.10 Not an Investment Company........... 41
4.11 Use of Proceeds..................... 41
4.12 Full Disclosure..................... 42
ARTICLE V
COVENANTS
SECTION 5.01 Information......................... 42
5.02 Maintenance of Property; Insurance.. 44
5.03 Maintenance of Existence............ 45
5.04 Compliance with Laws................ 45
5.05 Leverage Ratio...................... 45
5.06 Minimum Consolidated Tangible
Net Worth......................... 45
5.07 Interest Coverage Ratio............. 45
5.08 Subsidiary Debt Limitation.......... 46
5.09 Negative Pledge..................... 46
5.10 Consolidations, Mergers and
Sales of Assets................... 47
5.11 Limitation on Affiliate
Transactions...................... 47
ARTICLE VI
DEFAULTS
SECTION 6.01 Events of Default................... 47
6.02 Notice of Default................... 50
</TABLE>
ii
EXH. 4.1-3
<PAGE> 4
<TABLE>
<CAPTION>
Page
----
<S> <C> <C> <C>
ARTICLE VII
THE AGENT
SECTION 7.01 Appointment and Authorization....... 50
7.02 Agent and Affiliates................ 50
7.03 Action by Agent..................... 50
7.04 Consultation with Experts........... 51
7.05 Liability of Agent.................. 51
7.06 Indemnification..................... 51
7.07 Credit Decision..................... 52
7.08 Successor Agent..................... 52
7.09 Agent's Fees........................ 52
7.10 Co-Agent............................ 52
ARTICLE VIII
CHANGE IN CIRCUMSTANCES
SECTION 8.01 Basis for Determining Interest
Rate Inadequate or Unfair......... 53
8.02 Illegality.......................... 53
8.03 Increased Cost and Reduced Return... 54
8.04 Taxes............................... 56
8.05 Base Rate Loans Substituted for
Affected Fixed Rate Loans......... 58
8.06 Substitution of Bank................ 58
ARTICLE IX
MISCELLANEOUS
SECTION 9.01 Notices............................. 59
9.02 No Waivers.......................... 59
9.03 Expenses; Indemnification........... 59
9.04 Sharing of Set-Offs................. 60
9.05 Amendments and Waivers.............. 61
9.06 Successors and Assigns.............. 61
9.07 Collateral.......................... 63
9.08 Governing Law; Submission to
Jurisdiction...................... 63
9.09 Counterparts; Integration........... 63
9.10 WAIVER OF JURY TRIAL................ 64
</TABLE>
iii
EXH. 4.1-4
<PAGE> 5
Exhibit A - Note
Exhibit B - Money Market Quote Request
Exhibit C - Invitation for Money Market Quotes
Exhibit D - Money Market Quote
Exhibit E - Opinion of Counsel for the Borrower
Exhibit F - Opinion of Special Counsel for the Agent
Exhibit G - Assignment and Assumption Agreement
Exhibit H - Extension Agreement
iv
EXH. 4.1-5
<PAGE> 6
CREDIT AGREEMENT
AGREEMENT dated as of December 23, 1993 among LITTON
INDUSTRIES, INC., the BANKS listed on the signature pages hereof and MORGAN
GUARANTY TRUST COMPANY OF NEW YORK, as Agent, and WELLS FARGO BANK, N.A., as
Co-Agent.
The parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. The following terms, as used
herein, have the following meanings:
"Absolute Rate Auction" means a solicitation of Money Market
Quotes setting forth Money Market Absolute Rates pursuant to Section 2.03.
"Adjusted CD Rate" has the meaning set forth in Section
2.07(b).
"Administrative Questionnaire" means, with respect to each
Bank, an administrative questionnaire in the form prepared by the Agent and
submitted to the Agent (with a copy to the Borrower) duly completed by such
Bank.
"Affiliate" means any Person (other than a Subsidiary)
directly or indirectly controlling or controlled by or under direct or indirect
common control with the Borrower. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Agent" means Morgan Guaranty Trust Company of New York in its
capacity as agent for the Banks hereunder, and its successors in such capacity.
"Applicable Lending Office" means, with respect to any Bank,
(i) in the case of its Domestic Loans, its Domestic Lending Office, (ii) in the
case of its Euro-Dollar
1
EXH. 4.1-6
<PAGE> 7
Loans, its Euro-Dollar Lending Office and (iii) in the case of its Money Market
Loans, its Money Market Lending Office.
"Applicable Margin" has the meaning set forth in Section
2.07(h).
"Assessment Rate" has the meaning set forth in Section 2.07(b).
"Assignee" has the meaning set forth in Section 9.06(c).
"Bank" means each financial institution listed on the
signature pages hereof, each substitute financial institution which becomes a
Bank pursuant to Section 2.01(b), each Assignee which becomes a Bank pursuant
to Section 9.06(c), and their respective successors.
"Base Rate" means, for any day, a rate per annum equal to the
higher of (i) the Prime Rate for such day and (ii) the sum of 1/2 of 1% plus
the Federal Funds Rate for such day.
"Base Rate Loan" means a Committed Loan to be made by a Bank
as a Base Rate Loan in accordance with the applicable Notice of Committed
Borrowing or pursuant to Article VIII.
"Benefit Arrangement" means at any time an employee benefit
plan within the meaning of Section 3(3) of ERISA which is not a Plan or a
Multiemployer Plan and which is maintained or otherwise contributed to by any
member of the ERISA Group.
"Borrower" means Litton Industries, Inc., a Delaware
corporation, and its successors.
"Borrower's 1993 Form 10-K" means the Borrower's annual report
on Form 10-K for the fiscal year ended July 31, 1993, as filed with the
Securities and Exchange Commission pursuant to the Securities Exchange Act of
1934.
"Borrowing" has the meaning set forth in Section 1.03.
"CD Base Rate" has the meaning set forth in Section 2.07(b).
2
EXH. 4.1-7
<PAGE> 8
"CD Loan" means a Committed Loan to be made by a Bank as a CD
Loan in accordance with the applicable Notice of Committed Borrowing.
"CD Reference Banks" means Chemical Bank, Union Bank of
Switzerland and Morgan Guaranty Trust Company of New York, or such other bank
or banks as the Borrower and the Agent may from time to time mutually
designate.
"Change of Control" means any of the following:
(a) The acquisition by any individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act")) (a "Person") of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act)
of 30% or more of either (i) the then outstanding shares of common stock of the
Borrower (the "Outstanding Borrower Common Stock") or (ii) the combined voting
power of the then outstanding voting securities of the Borrower entitled to
vote generally in the election of directors (the "Outstanding Borrower Voting
Securities"); provided, however, that for purposes of this subsection (a), the
following acquisitions of stock shall not constitute a Change of Control: (i)
any acquisition by the Borrower, (ii) any acquisition by any employee benefit
plan (or related trust) sponsored or maintained by the Borrower or any
corporation controlled by the Borrower or (iii) any acquisition by any
corporation pursuant to a transaction which complies with clauses (i), (ii) and
(iii) of subsection (c) of this definition;
(b) Individuals who, as of the date hereof, constitute the
Board of Directors of the Borrower (the "Incumbent Board") cease for any reason
to constitute at least a majority of the Board; provided, however, that any
individual becoming a director subsequent to the date hereof whose election, or
nomination for election by the Borrower's shareholders, was approved by a vote
of at least a majority of the directors then comprising the Incumbent Board
shall be considered as though such individual were a member of the Incumbent
Board, but excluding, for this purpose, any such individual whose initial
assumption of office occurs as a result of an actual or threatened election
contest with respect to the election or removal of directors or other actual or
threatened solicitation of proxies or consents by or on behalf of a Person
other than the Board;
3
EXH. 4.1-8
<PAGE> 9
(c) Consummation of a reorganization, merger or consolidation
or sale or other disposition of all or substantially all of the assets of the
Borrower (a "Business Combination"), in each case, unless, following such
Business Combination, (i) all or substantially all of the individuals and
entities who were the beneficial owners, respectively, of the Outstanding
Borrower Common Stock and Outstanding Borrower Voting Securities immediately
prior to such Business Combination beneficially own, directly or indirectly,
more than 60% of, respectively, the then outstanding shares of common stock and
the combined voting power of the then outstanding voting securities entitled to
vote generally in the election of directors, as the case may be, of the
corporation resulting from such Business Combination (including, without
limitation, a corporation which as a result of such transaction owns the
Borrower or all or substantially all of the Borrower's assets either directly
or through one or more subsidiaries) in substantially the same proportions as
their ownership, immediately prior to such Business Combination of the
Outstanding Borrower Common Stock and Outstanding Borrower Voting Securities,
as the case may be, (ii) no Person (excluding any employee benefit plan (or
related trust) of the Borrower or such corporation resulting from such Business
Combination) beneficially owns, directly or indirectly, 30% or more of,
respectively, the then outstanding shares of common stock of the corporation
resulting from such Business Combination or the combined voting power of the
then outstanding voting securities of such corporation and (iii) at least a
majority of the members of the board of directors of the corporation resulting
from such Business Combination were members of the Incumbent Board at the time
of the execution of the initial agreement, or of the action of the Board,
providing for such Business Combination; or
(d) Approval by the shareholders of the Borrower of a
complete liquidation or dissolution of the Borrower.
"Co-Agent" means Wells Fargo Bank, National Association in its
capacity as co-agent hereunder, and its successors in such capacity.
"Commitment" means, with respect to each Bank, the amount set
forth opposite the name of such Bank on the signature pages hereof, as such
amount may be reduced from time to time pursuant to Sections 2.09 and 2.10.
4
EXH. 4.1-9
<PAGE> 10
"Committed Loan" means a loan made by a Bank pursuant to
Section 2.01.
"Consolidated EBIT" means, for any period, the sum of
Consolidated Net Income for such period plus, to the extent deducted in the
determination of such Consolidated Net Income, Consolidated Interest Expense
for such period and the provision for income taxes for such period.
"Consolidated Interest Expense" means, for any period, the
interest expense of the Borrower and its Consolidated Subsidiaries determined
on a consolidated basis for such period.
"Consolidated Net Income" means, for any period, the net
income of the Borrower and its Consolidated Subsidiaries for such period,
determined on a consolidated basis.
"Consolidated Net Worth" means at any date the shareholders'
investment in the Borrower and its Consolidated Subsidiaries determined on a
consolidated basis as of such date.
"Consolidated Subsidiary" means at any date any Subsidiary or
other entity the accounts of which would be consolidated with those of the
Borrower in its consolidated financial statements if such statements were
prepared as of such date.
"Consolidated Tangible Net Worth" means at any date the
shareholders' investment in the Borrower and its Consolidated Subsidiaries less
their consolidated Intangible Assets, all determined as of such date. For
purposes of this definition "Intangible Assets" means the amount (to the extent
reflected in determining such consolidated shareholders' investment) of (i) all
write-ups (other than write-ups resulting from foreign currency translations
and write-ups of assets of a going concern business made within twelve months
after the acquisition of such business) subsequent to July 31, 1993 in the book
value of any asset owned by the Borrower or a Consolidated Subsidiary, (ii) all
investments in unconsolidated Subsidiaries and, to the extent the same exceed
$20,000,000 in aggregate amount, all equity investments in Persons which are
not Subsidiaries (other than investments in readily marketable securities) and
(iii) all unamortized debt discount and expense, unamortized deferred charges,
goodwill, patents, trademarks,
5
EXH. 4.1-10
<PAGE> 11
service marks, trade names, copyrights, organization or developmental expenses
and other intangible assets. Publicly traded securities will be deemed
"readily marketable" if the investment of the Borrower or a Subsidiary therein
may be offered or sold to the public generally without registration under the
Securities Act of 1933, as amended.
"D&P" means Duff & Phelps Credit Rating Co.
"Debt" of any Person means at any date, without duplication,
(i) all obligations of such Person for borrowed money, (ii) all obligations of
such Person evidenced by bonds, debentures, notes or other similar instruments,
(iii) all obligations of such Person to pay the deferred purchase price of
property or services, except trade accounts payable and deferred employee
compensation obligations arising in the ordinary course of business, (iv) all
obligations of such Person as lessee which are capitalized in accordance with
generally accepted accounting principles, (v) all unpaid reimbursement
obligations of such Person in respect of letters of credit or similar
instruments but only to the extent that either (x) the issuer has honored a
drawing thereunder or (y) payment of such obligation is otherwise due under the
terms thereof, (vi) all Debt secured by a Lien on any asset of such Person,
whether or not such Debt is otherwise an obligation of such Person, and (vii)
all Debt of others Guaranteed by such Person; provided that Debt of the
Borrower shall not include Debt of Western Atlas Inc. or its subsidiaries in an
aggregate principal amount not exceeding $175,000,000 Guaranteed by the
Borrower prior to the Spin-Off so long as Western Atlas Inc. shall have
counter-indemnified the Borrower with respect to such Guarantee and is not in
default with respect thereto.
"Default" means any condition or event which constitutes an
Event of Default or which with the giving of notice or lapse of time or both
would, unless cured or waived, become an Event of Default.
"Dividend Payment" means (i) any dividend or other
distribution on any shares of the Borrower's capital stock or (ii) any payment
on account of the purchase, redemption, retirement or acquisition of (a) any
shares of the Borrower's capital stock or (b) any option, warrant or other
right to acquire shares of the Borrower's capital stock.
6
EXH. 4.1-11
<PAGE> 12
"Domestic Business Day" means any day except a Saturday,
Sunday or other day on which commercial banks in New York City are authorized
or required by law to close.
"Domestic Lending Office" means, as to each Bank, its office
located at its address set forth in its Administrative Questionnaire (or
identified in its Administrative Questionnaire as its Domestic Lending Office)
or such other office as such Bank may hereafter designate as its Domestic
Lending Office by notice to the Borrower and the Agent; provided that any Bank
may so designate separate Domestic Lending Offices for its Base Rate Loans, on
the one hand, and its CD Loans, on the other hand, in which case all references
herein to the Domestic Lending Office of such Bank shall be deemed to refer to
either or both of such offices, as the context may require.
"Domestic Loans" means CD Loans or Base Rate Loans or both.
"Domestic Reserve Percentage" has the meaning set forth in
Section 2.07(b).
"Effective Date" means the date this Agreement becomes
effective in accordance with Section 3.01.
"Environmental Laws" means any and all federal, state, local
and foreign statutes, laws, judicial decisions, regulations, ordinances, rules,
judgments, orders, decrees, plans, injunctions, permits, concessions, grants,
franchises, licenses, agreements and other governmental restrictions relating
to the environment, the effect of the environment on human health or to
emissions, discharges or releases of pollutants, contaminants, Hazardous
Substances or wastes into the environment including, without limitation,
ambient air, surface water, ground water, or land, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, contaminants, Hazardous Substances or
wastes or the clean-up or other remediation thereof.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, or any successor statute.
"ERISA Group" means the Borrower, any Subsidiary and all
members of a controlled group of corporations and all trades or businesses
(whether or not incorporated) under
7
EXH. 4.1-12
<PAGE> 13
common control which, together with the Borrower or any Subsidiary, are treated
as a single employer under Section 414 of the Internal Revenue Code.
"Euro-Dollar Business Day" means any Domestic Business Day on
which commercial banks are open for international business (including dealings
in dollar deposits) in London.
"Euro-Dollar Lending Office" means, as to each Bank, its
office, branch or affiliate located at its address set forth in its
Administrative Questionnaire (or identified in its Administrative Questionnaire
as its Euro-Dollar Lending Office) or such other office, branch or affiliate of
such Bank as it may hereafter designate as its Euro-Dollar Lending Office by
notice to the Borrower and the Agent.
"Euro-Dollar Loan" means a Committed Loan to be made by a Bank
as a Euro-Dollar Loan in accordance with the applicable Notice of Committed
Borrowing.
"Euro-Dollar Reference Banks" means the principal London
offices of Chemical Bank, Union Bank of Switzerland and Morgan Guaranty Trust
Company of New York, or such other bank or banks as the Borrower and the Agent
may from time to time mutually designate.
"Euro-Dollar Reserve Percentage" means for any day that
percentage (expressed as a decimal) which is in effect on such day, as
prescribed by the Board of Governors of the Federal Reserve System (or any
successor) for determining the maximum reserve requirement for a member bank of
the Federal Reserve System in New York City with deposits exceeding five
billion dollars in respect of "Eurocurrency liabilities" (or in respect of any
other category of liabilities which includes deposits by reference to which the
interest rate on Euro-Dollar Loans is determined or any category of extensions
of credit or other assets which includes loans by a non-United States office of
any Bank to United States residents).
"Event of Default" has the meaning set forth in Section 6.01.
"Federal Funds Rate" means, for any day (the "accrual date"),
the rate per annum (rounded upward, if necessary, to the nearest 1/100th of 1%)
equal to the
8
EXH. 4.1-13
<PAGE> 14
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on the
accrual date, as published by the Federal Reserve Bank of New York on the
Domestic Business Day next succeeding such day, provided that (i) if the
accrual date is not a Domestic Business Day, the Federal Funds Rate for the
accrual date shall be such rate on such transactions on the next preceding
Domestic Business Day as so published on the next succeeding Domestic Business
Day, and (ii) if no such rate is so published on such next succeeding Domestic
Business Day, the Federal Funds Rate for the accrual date shall be the average
rate quoted to Morgan Guaranty Trust Company of New York on the accrual date
(or next preceding Domestic Business Day) on such transactions as determined by
the Agent.
"Fixed Rate Loans" means CD Loans or Euro-Dollar Loans or
Money Market Loans (excluding Money Market LIBOR Loans bearing interest at the
Base Rate pursuant to Section 8.01(a)) or any combination of the foregoing.
"Guarantee" by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Debt or other
obligation of any other Person and, without limiting the generality of the
foregoing, any obligation, direct or indirect, contingent or otherwise, of such
Person (i) to purchase or pay (or advance or supply funds for the purchase or
payment of) such Debt or other obligation (whether arising by virtue of
partnership arrangements, by agreement to keep-well, to purchase assets, goods,
securities or services, to take-or-pay, or to maintain financial statement
conditions or otherwise) or (ii) entered into for the purpose of assuring in
any other manner the obligee of such Debt or other obligation of the payment
thereof or to protect such obligee against loss in respect thereof (in whole or
in part), provided that the term Guarantee shall not include endorsements for
collection or deposit in the ordinary course of business. The term "Guarantee"
used as a verb has a corresponding meaning.
"Hazardous Substances" means any toxic, radioactive, caustic
or otherwise hazardous substance, including petroleum, its derivatives,
by-products and other hydrocarbons, or any substance having any constituent
elements displaying any of the foregoing characteristics.
"Indemnitee" has the meaning set forth in Section 9.03(b).
9
EXH. 4.1-14
<PAGE> 15
"Interest Coverage Ratio" means, for any period, the ratio of
Consolidated EBIT for such period to Consolidated Interest Expense for such
period.
"Interest Period" means: (1) with respect to each Euro-Dollar
Borrowing, the period commencing on the date of such Borrowing and ending one,
two, three or six months thereafter, as the Borrower may elect in the
applicable Notice of Borrowing; provided that:
(a) any Interest Period which would otherwise end on a day
which is not a Euro-Dollar Business Day shall be extended to the next
succeeding Euro-Dollar Business Day unless such Euro-Dollar Business
Day falls in another calendar month, in which case such Interest
Period shall end on the next preceding Euro-Dollar Business Day;
(b) any Interest Period which begins on the last Euro-Dollar
Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such
Interest Period) shall, subject to clause (c) below, end on the last
Euro-Dollar Business Day of a calendar month; and
(c) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date.
(2) with respect to each CD Borrowing, the period commencing on the date of
such Borrowing and ending 30, 60, 90 or 180 days thereafter, as the Borrower
may elect in the applicable Notice of Borrowing; provided that:
(a) any Interest Period (other than an Interest Period
determined pursuant to clause (b) below) which would otherwise end on
a day which is not a Euro-Dollar Business Day shall be extended to the
next succeeding Euro-Dollar Business Day; and
(b) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date.
(3) with respect to each Base Rate Borrowing, the period commencing on the
date of such Borrowing and ending 30 days thereafter; provided that:
10
EXH. 4.1-15
<PAGE> 16
(a) any Interest Period (other than an Interest Period
determined pursuant to clause (b) below) which would otherwise end on
a day which is not a Euro-Dollar Business Day shall be extended to the
next succeeding Euro-Dollar Business Day; and
(b) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date.
(4) with respect to each Money Market LIBOR Borrowing, the period commencing
on the date of such Borrowing and ending such whole number of months thereafter
as the Borrower may elect in accordance with Section 2.03; provided that:
(a) any Interest Period which would otherwise end on a day
which is not a Euro-Dollar Business Day shall be extended to the next
succeeding Euro-Dollar Business Day unless such Euro-Dollar Business
Day falls in another calendar month, in which case such Interest
Period shall end on the next preceding Euro-Dollar Business Day;
(b) any Interest Period which begins on the last Euro-Dollar
Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such
Interest Period) shall, subject to clause (c) below, end on the last
Euro-Dollar Business Day of a calendar month; and
(c) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date.
(5) with respect to each Money Market Absolute Rate Borrowing, the period
commencing on the date of such Borrowing and ending such number of days
thereafter (but not less than 14 days) as the Borrower may elect in accordance
with Section 2.03; provided that:
(a) any Interest Period which would otherwise end on a day
which is not a Euro-Dollar Business Day shall be extended to the next
succeeding Euro-Dollar Business Day; and
11
EXH. 4.1-16
<PAGE> 17
(b) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date.
"Internal Revenue Code" means the Internal Revenue Code of
1986, as amended, or any successor statute.
"Level I Status" exists at any date if, at such date, the
Borrower's long-term debt is rated A-/A3 or higher by at least two Rating
Agencies.
"Level II Status" exists at any date if, at such date, (i) the
Borrower's long-term debt is rated BBB+/Baa1 or higher by at least two Rating
Agencies and (ii) Level I Status does not exist at such date.
"Level III Status" exists at any date if, at such date, (i)
the Borrower's long-term debt is rated BBB/Baa2 or higher by at least two
Rating Agencies and (ii) neither Level I Status nor Level II Status exists at
such date.
"Level IV Status" exists at any date if, at such date, (i) the
Borrower's long-term debt is rated BBB-/Baa3 or higher by at least two Rating
Agencies and (ii) none of Level I Status, Level II Status or Level III Status
exists at such date.
"Level V Status" exists at any date, if at the close of
business on such date, none of Level I Status, Level II Status, Level III
Status or Level IV Status exists.
"Leverage Ratio" means, at any date, the ratio of Total
Borrowed Funds at such date to Consolidated Net Worth at such date.
"LIBOR Auction" means a solicitation of Money Market Quotes
setting forth Money Market Margins based on the London Interbank Offered Rate
pursuant to Section 2.03.
"Lien" means, with respect to any asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in respect of such
asset. For the purposes of this Agreement, the Borrower or any Subsidiary
shall be deemed to own subject to a Lien any asset which it has acquired or
holds subject to the interest of a vendor or lessor under any conditional sale
agreement, capital lease or other title retention agreement relating to such
asset.
12
EXH. 4.1-17
<PAGE> 18
"Loan" means a Domestic Loan or a Euro-Dollar Loan or a Money
Market Loan and "Loans" means Domestic Loans or Euro-Dollar Loans or Money
Market Loans or any combination of the foregoing.
"London Interbank Offered Rate" has the meaning set forth in
Section 2.07(c).
"Material Debt" means Debt (other than the Notes) of the
Borrower and/or one or more of its Subsidiaries, arising in one or more related
or unrelated transactions, in an aggregate principal amount exceeding
$10,000,000.
"Material Plan" means at any time a Plan or Plans having
aggregate Unfunded Liabilities in excess of $10,000,000.
"Material Subsidiary" means a Subsidiary, including its
Subsidiaries, which meets any of the following conditions:
(1) the Borrower's and its other Subsidiaries' investments in
and advances to the Subsidiary exceed 5 percent of the total assets of the
Borrower and its Subsidiaries consolidated as of the end of the most recently
completed fiscal year; or
(2) the Borrower's and its other Subsidiaries' proportionate
share of the total assets (after intercompany eliminations) of the Subsidiary
exceeds 5 percent of the total assets of the Borrower and its Subsidiaries
consolidated as of the end of the most recently completed fiscal year; or
(3) the Borrower's and its other Subsidiaries' equity in the
income from continuing operations before income taxes, extraordinary items and
cumulative effect of a change in accounting principle of the Subsidiary exceeds
5 percent of such income of the Borrower and its Subsidiaries consolidated for
the most recently completed fiscal year.
Computational note: For purposes of making the prescribed
income test the following guidance should be applied:
1. When a loss has been incurred by either the Borrower and
its Subsidiaries consolidated or the tested Subsidiary, but not both, the
equity in the income or loss
13
EXH. 4.1-18
<PAGE> 19
of the tested Subsidiary should be excluded from the income of the Borrower and
its Subsidiaries consolidated for purposes of the computation.
2. If income of the Borrower and its Subsidiaries
consolidated for the most recent fiscal year is at least 5 percent lower than
the average of the income for the last five fiscal years, such average income
should be substituted for purposes of the computation. Any loss years should
be omitted for purposes of computing average income.
"Minimum Compliance Level" means, at any date, an amount equal
to the sum of (i) the greater of 75% of Consolidated Tangible Net Worth at the
Effective Date and $335,000,000 plus (ii) for each fiscal quarter of the
Borrower commencing after the Effective Date and on or prior to such date for
which Consolidated Net Income is a positive number, an amount equal to 50% of
Consolidated Net Income for such fiscal quarter plus (iii) for each issuance
and/or sale subsequent to the Effective Date and on or prior to such date by
the Borrower of shares of its capital stock, an amount equal to 100% of the
amount by which Consolidated Tangible Net Worth is increased on account of such
transaction.
"Money Market Absolute Rate" has the meaning set forth in
Section 2.03(d).
"Money Market Absolute Rate Loan" means a loan to be made by a
Bank pursuant to an Absolute Rate Auction.
"Money Market Lending Office" means, as to each Bank, its
Domestic Lending Office or such other office, branch or affiliate of such Bank
as it may hereafter designate as its Money Market Lending Office by notice to
the Borrower and the Agent; provided that any Bank may from time to time by
notice to the Borrower and the Agent designate separate Money Market Lending
Offices for its Money Market LIBOR Loans, on the one hand, and its Money Market
Absolute Rate Loans, on the other hand, in which case all references herein to
the Money Market Lending Office of such Bank shall be deemed to refer to either
or both of such offices, as the context may require.
"Money Market LIBOR Loan" means a loan to be made by a Bank
pursuant to a LIBOR Auction (including such a loan bearing interest at the Base
Rate pursuant to Section 8.01(a)).
14
EXH. 4.1-19
<PAGE> 20
"Money Market Loan" means a Money Market LIBOR Loan or a Money
Market Absolute Rate Loan.
"Money Market Margin" has the meaning set forth in Section
2.03(d).
"Money Market Quote" means an offer by a Bank to make a Money
Market Loan in accordance with Section 2.03.
"Moody's" means Moody's Investors Service, Inc.
"Multiemployer Plan" means at any time an employee pension
benefit plan within the meaning of Section 4001(a)(3) of ERISA to which any
member of the ERISA Group is then making or accruing an obligation to make
contributions in an amount exceeding $1,000,000 per annum or has within the
preceding five plan years made such contributions, including for these purposes
any Person which ceased to be a member of the ERISA Group during such five year
period.
"Notes" means promissory notes of the Borrower, substantially
in the form of Exhibit A hereto, evidencing the obligation of the Borrower to
repay the Loans, and "Note" means any one of such promissory notes issued
hereunder.
"Notice of Borrowing" means a Notice of Committed Borrowing
(as defined in Section 2.02) or a Notice of Money Market Borrowing (as defined
in Section 2.03(f)).
"Parent" means, with respect to any Bank, any Person
controlling such Bank.
"Participant" has the meaning set forth in Section 9.06(b).
"PBGC" means the Pension Benefit Guaranty Corporation or any
entity succeeding to any or all of its functions under ERISA.
"Person" means an individual, a corporation, a partnership, an
association, a trust or any other entity or organization, including a
government or political subdivision or an agency or instrumentality thereof.
15
EXH. 4.1-20
<PAGE> 21
"Plan" means at any time an employee pension benefit plan
(other than a Multiemployer Plan) which is covered by Title IV of ERISA or
subject to the minimum funding standards under Section 412 of the Internal
Revenue Code and either (i) is maintained, or contributed to, by any member of
the ERISA Group for employees of any member of the ERISA Group or (ii) has at
any time within the preceding five years been maintained, or contributed to, by
any Person which was at such time a member of the ERISA Group for employees of
any Person which was at such time a member of the ERISA Group.
"Prime Rate" means the rate of interest publicly announced by
Morgan Guaranty Trust Company of New York in New York City from time to time as
its Prime Rate.
"Prior Credit Agreement" means the Credit Agreement dated as
of January 8, 1993 among the Borrower, the banks listed on the signature pages
thereof and Morgan Guaranty Trust Company of New York and Wells Fargo Bank,
N.A., as agents.
"Rating Agencies" means D&P, Moody's and S&P.
"Reference Banks" means the CD Reference Banks or the
Euro-Dollar Reference Banks, as the context may require, and "Reference Bank"
means any one of such Reference Banks.
"Refunding Borrowing" means a Committed Borrowing which, after
application of the proceeds thereof, results in no net increase in the
outstanding principal amount of Committed Loans made by any Bank.
"Regulation U" means Regulation U of the Board of Governors of
the Federal Reserve System, as in effect from time to time.
"Required Banks" means at any time Banks having at least 55%
of the aggregate amount of the Commitments or, if the Commitments shall have
been terminated, holding Notes evidencing at least 55% of the aggregate unpaid
principal amount of the Loans.
"Revolving Credit Period" means the period from and including
the Effective Date to but not including the Termination Date.
"S&P" means Standard & Poor's Corporation.
16
EXH. 4.1-21
<PAGE> 22
"Spin-Off" means the distribution by the Borrower to its
shareholders of 100% of the capital stock of Western Atlas Inc., a Subsidiary
of the Borrower.
"Status" refers to the determination of whichever of Level I
Status, Level II Status, Level III Status, Level IV Status or Level V Status
exists at any date.
"Subsidiary" means any corporation or other entity of which
securities or other ownership interests having ordinary voting power to elect a
majority of the board of directors or other persons performing similar
functions are at the time directly or indirectly owned by the Borrower (or, if
such term is used with reference to another Person, by such other Person).
"Termination Date" means March 31, 1997, or such later date to
which the Revolving Credit Period shall have been extended pursuant to Section
2.01(b) or, if such day is not a Euro-Dollar Business Day, the next succeeding
Euro-Dollar Business Day unless such Euro-Dollar Business Day falls in another
calendar month, in which case the Termination Date shall be the next preceding
Euro-Dollar Business Day.
"Total Borrowed Funds" means, at any date, the Debt of the
Borrower and its Consolidated Subsidiaries determined on a consolidated basis
as of such date.
"Unfunded Liabilities" means, with respect to any Plan at any
time, the amount (if any) by which (i) the value of all benefit liabilities
under such Plan, determined on a plan termination basis using the assumptions
prescribed by the PBGC for purposes of Section 4044 of ERISA, exceeds (ii) the
fair market value of all Plan assets allocable to such liabilities under Title
IV of ERISA (excluding any accrued but unpaid contributions), all determined as
of the then most recent valuation date for such Plan, but only to the extent
that such excess represents a potential liability of a member of the ERISA
Group to the PBGC or any other Person under Title IV of ERISA.
"United States" means the United States of America, including
the States and the District of Columbia, but excluding its territories and
possessions.
17
EXH. 4.1-22
<PAGE> 23
"Utilization" means at any date the percentage equivalent of a
fraction (i) the numerator of which is the aggregate outstanding principal
amount of the Loans at such date, after giving effect to any borrowing or
payment on such date, and (ii) the denominator of which is the aggregate amount
of the Commitments at such date, after giving effect to any reduction of the
Commitments on such date. For purposes of Section 2.07(h), if for any reason
any Loans remain outstanding after termination of the Commitments, the
Utilization for each date on or after the date of such termination shall be
deemed to be greater than 50%.
"Wholly-Owned Consolidated Subsidiary" means any Consolidated
Subsidiary all of the shares of capital stock or other ownership interests of
which (except directors' qualifying shares) are at the time directly or
indirectly owned by the Borrower.
SECTION 1.02. Accounting Terms and Determinations. Unless
otherwise specified herein, all accounting terms used herein shall be
interpreted, all accounting determinations hereunder shall be made, and all
financial statements required to be delivered hereunder shall be prepared in
accordance with generally accepted accounting principles as in effect from time
to time, applied on a basis consistent (except for changes concurred in by the
Borrower's independent public accountants) with the most recent audited
consolidated financial statements of the Borrower and its Consolidated
Subsidiaries delivered to the Banks; provided that, if the Borrower notifies
the Agent that the Borrower wishes to amend any covenant in Article V to
eliminate the effect of any change in generally accepted accounting principles
on the operation of such covenant (or if the Agent notifies the Borrower that
the Required Banks wish to amend Article V for such purpose), then the
Borrower's compliance with such covenant shall be determined on the basis of
generally accepted accounting principles in effect immediately before the
relevant change in generally accepted accounting principles became effective,
until either such notice is withdrawn or such covenant is amended in a manner
satisfactory to the Borrower and the Required Banks.
SECTION 1.03. Types of Borrowings. The term "Borrowing"
denotes the aggregation of Loans of one or more Banks to be made to the
Borrower pursuant to Article II on a single date and for a single Interest
Period. Borrowings
18
EHX. 4.1-23
<PAGE> 24
are classified for purposes of this Agreement either by reference to the
pricing of Loans comprising such Borrowing (e.g., a "Base Rate Borrowing" is a
Borrowing comprised of Base Rate Loans and a "Euro-Dollar Borrowing" is a
Borrowing comprised of Euro-Dollar Loans) or by reference to the provisions of
Article II under which participation therein is determined (i.e., a "Committed
Borrowing" is a Borrowing under Section 2.01 in which all Banks participate in
proportion to their Commitments, while a "Money Market Borrowing" is a
Borrowing under Section 2.03 in which the Bank participants are determined on
the basis of their bids in accordance therewith).
SECTION 1.04. Basis for Ratings. The credit ratings to be
utilized for purposes of determining a Status hereunder are those assigned to
the senior unsecured long-term debt of the Borrower without third-party credit
enhancement, and any rating assigned to any other debt of the Borrower shall be
disregarded; provided that if the Borrower's senior unsecured long-term debt is
not rated by at least two Rating Agencies but the Borrower's subordinated
unsecured long-term debt, without third party credit enhancement, is rated by
at least two Rating Agencies, then Status shall be determined upon the basis of
the rating for such subordinated debt and the rating threshold for each Status
shall be adjusted downward by one whole rating category (e.g., Level I Status
shall exist if such subordinated debt is rated BBB+/Baa1 or higher by at least
two Rating Agencies); provided further that if at any time neither the
Borrower's senior unsecured long-term debt nor the Borrower's subordinated
unsecured long-term debt, without third party credit enhancement, is rated by
at least two Rating Agencies, then Status shall be Level V Status. The rating
in effect at any date is that in effect at the close of business on such date.
ARTICLE II
THE CREDITS
SECTION 2.01. Commitments to Lend. (a) During the Revolving
Credit Period each Bank severally agrees, on the terms and conditions set forth
in this Agreement, to make loans to the Borrower pursuant to this Section from
time to time in amounts such that the aggregate principal
19
EXH. 4.1-24
<PAGE> 25
amount of Committed Loans by such Bank at any one time outstanding shall not
exceed the amount of its Commitment. Each Borrowing under this Section shall
be in an aggregate principal amount of $15,000,000 or any larger multiple of
$1,000,000 (except that any such Borrowing may be in the aggregate amount
available in accordance with Section 3.02(b)) and shall be made from the
several Banks ratably in proportion to their respective Commitments. Within
the foregoing limits, the Borrower may borrow under this Section, repay, or to
the extent permitted by Section 2.11, prepay Loans and reborrow at any time
during the Revolving Credit Period under this Section.
(b) The Revolving Credit Period may be extended, in the
manner set forth in this subsection (b), on January 16, 1995 and on January 15,
1996 (an "Extension Date") for a period of one year after the date on which the
Revolving Credit Period would otherwise have expired. If the Borrower wishes
to request an extension of the Revolving Credit Period on any Extension Date,
it shall give written notice to that effect to the Agent not less than 45 nor
more than 90 days prior to such Extension Date, whereupon the Agent shall
notify each of the Banks of such notice. Each Bank will use its best efforts
to respond to such request, whether affirmatively or negatively, within 30 days
of such notice. If a Bank or Banks do not elect to extend, but such
non-extending Bank(s) have Commitment(s) totalling less than 25% of the
aggregate amount of the Commitments, the Borrower shall, for a period of 60
days following the Extension Date, have the right, with the assistance of the
Agent, to seek a mutually satisfactory substitute financial institution or
financial institutions (which may be one or more of the Banks) to assume the
Commitment(s) of such non-extending Bank(s). Not later than ten days after the
end of such 60-day period, the Borrower shall, by notice to the Banks through
the Agent, either (i) terminate, effective on the third Domestic Business Day
after the giving of such notice, the Commitment(s) of such non-extending
Bank(s), whereupon the aggregate amount of the Commitment(s) will be reduced by
the amount (if any) of such Commitment(s) not assumed by a substitute financial
institution or financial institutions within such 60-day period or (ii)
withdraw its request for an extension of the Revolving Credit Period. So long
as Banks having Commitment(s) totalling not less than 75% of the aggregate
amount of the Commitment(s) shall have responded affirmatively to such a
request, and such request is not withdrawn in accordance with the preceding
sentence, then, subject to receipt by the Agent of counterparts of an
20
EXH. 4.1-25
<PAGE> 26
Extension Agreement in substantially the form of Exhibit H duly completed and
signed by the Borrower, such Banks and the Agent, the Revolving Credit Period
shall be extended for a period of one year to the date stated in such Extension
Agreement. Termination of the Commitment of a non-extending Bank in accordance
with this subsection (b) shall not affect the maturity of any Loans of such
Bank at the time outstanding, but such Bank shall be entitled to facility fees
with respect to its CD Loans and Euro-Dollar Loans for so long after the
effective date of such termination as such Loans remain outstanding.
SECTION 2.02. Notice of Committed Borrowings. The Borrower
shall give the Agent notice (a "Notice of Committed Borrowing") not later than
10:30 A.M. (New York City time) on (x) the date of each Base Rate Borrowing,
(y) the second Domestic Business Day before each CD Borrowing and (z) the third
Euro-Dollar Business Day before each Euro-Dollar Borrowing, specifying:
(a) the date of such Borrowing, which shall be a Domestic
Business Day in the case of a Domestic Borrowing or a Euro-Dollar
Business Day in the case of a Euro-Dollar Borrowing,
(b) the aggregate amount of such Borrowing,
(c) whether the Loans comprising such Borrowing are to be CD
Loans, Base Rate Loans or Euro-Dollar Loans, and
(d) in the case of a Fixed Rate Borrowing, the duration of
the Interest Period applicable thereto, subject to the provisions of
the definition of Interest Period.
SECTION 2.03. Money Market Borrowings.
(a) The Money Market Option. In addition to Committed
Borrowings pursuant to Section 2.01, the Borrower may, as set forth in this
Section, request the Banks during the Revolving Credit Period to make offers to
make Money Market Loans to the Borrower. The Banks may, but shall have no
obligation to, make such offers and the Borrower may, but shall have no
obligation to, accept any such offers in the manner set forth in this Section.
21
EXH. 4.1-26
<PAGE> 27
(b) Money Market Quote Request. When the Borrower wishes to
request offers to make Money Market Loans under this Section, it shall transmit
to the Agent by telex or facsimile transmission a Money Market Quote Request
substantially in the form of Exhibit B hereto so as to be received no later
than 10:00 A.M. (New York City time) on (x) the fifth Euro-Dollar Business Day
prior to the date of Borrowing proposed therein, in the case of a LIBOR Auction
or (y) the Domestic Business Day next preceding the date of Borrowing proposed
therein, in the case of an Absolute Rate Auction (or, in either case, such
other time or date as the Borrower and the Agent shall have mutually agreed and
shall have notified to the Banks not later than the date of the Money Market
Quote Request for the first LIBOR Auction or Absolute Rate Auction for which
such change is to be effective) specifying:
(i) the proposed date of Borrowing, which shall be a
Euro-Dollar Business Day in the case of a LIBOR Auction or a Domestic
Business Day in the case of an Absolute Rate Auction,
(ii) the aggregate amount of such Borrowing, which shall be
$15,000,000 or a larger multiple of $1,000,000,
(iii) the duration of the Interest Period applicable thereto,
subject to the provisions of the definition of Interest Period, and
(iv) whether the Money Market Quotes requested are to set
forth a Money Market Margin or a Money Market Absolute Rate.
The Borrower may request offers to make Money Market Loans for more than one
Interest Period in a single Money Market Quote Request. No Money Market Quote
Request shall be given within five Euro-Dollar Business Days (or such other
number of days as the Borrower and the Agent may agree) of any other Money
Market Quote Request.
(c) Invitation for Money Market Quotes. Promptly upon
receipt of a Money Market Quote Request, the Agent shall send to the Banks by
telex or facsimile transmission an Invitation for Money Market Quotes
substantially in the form of Exhibit C hereto, which shall constitute an
invitation by the Borrower to each Bank to submit Money Market Quotes offering
to make the Money Market Loans to
22
EXH. 4.1-27
<PAGE> 28
which such Money Market Quote Request relates in accordance with this Section.
(d) Submission and Contents of Money Market Quotes.
(i) Each Bank may submit a Money Market Quote containing an
offer or offers to make Money Market Loans in response to any Invitation for
Money Market Quotes. Each Money Market Quote must comply with the requirements
of this subsection (d) and must be submitted to the Agent by telex or facsimile
transmission at its offices specified in or pursuant to Section 9.01 not later
than (x) 2:00 P.M. (New York City time) on the fourth Euro-Dollar Business Day
prior to the proposed date of Borrowing, in the case of a LIBOR Auction or (y)
9:15 A.M. (New York City time) on the proposed date of Borrowing, in the case
of an Absolute Rate Auction (or, in either case, such other time or date as the
Borrower and the Agent shall have mutually agreed and shall have notified to
the Banks not later than the date of the Money Market Quote Request for the
first LIBOR Auction or Absolute Rate Auction for which such change is to be
effective); provided that Money Market Quotes submitted by the Agent (or any
affiliate of the Agent) in the capacity of a Bank may be submitted, and may
only be submitted, if the Agent or such affiliate notifies the Borrower of the
terms of the offer or offers contained therein not later than (x) 1:00 P.M.
(New York City time) on the fourth Euro-Dollar Business Day prior to the
proposed date of Borrowing, in the case of a LIBOR Auction or (y) 9:00 A.M.
(New York City time) on the proposed date of Borrowing, in the case of an
Absolute Rate Auction. Subject to Articles III and VI, any Money Market Quote
so made shall be irrevocable except with the written consent of the Agent given
on the instructions of the Borrower.
(ii) Each Money Market Quote shall be in substantially the
form of Exhibit D hereto and shall in any case specify:
(A) the proposed date of Borrowing,
(B) the principal amount of the Money Market Loan for which
each such offer is being made, which principal amount (w) may be
greater than or less than the Commitment of the quoting Bank, (x) must
be $5,000,000 or a larger multiple of $1,000,000, (y) may not exceed
the principal amount of Money Market Loans
23
EXH. 4.1-28
<PAGE> 29
for which offers were requested and (z) may be subject to an aggregate
limitation as to the principal amount of Money Market Loans for which
offers being made by such quoting Bank may be accepted,
(C) in the case of a LIBOR Auction, the margin above or below
the applicable London Interbank Offered Rate (the "Money Market
Margin") offered for each such Money Market Loan, expressed as a
percentage (specified to the nearest 1/10,000th of 1%) to be added to
or subtracted from such base rate,
(D) in the case of an Absolute Rate Auction, the rate of
interest per annum (specified to the nearest 1/10,000th of 1%) (the
"Money Market Absolute Rate") offered for each such Money Market Loan,
and
(E) the identity of the quoting Bank.
A Money Market Quote may set forth up to five separate offers by the quoting
Bank with respect to each Interest Period specified in the related Invitation
for Money Market Quotes.
(iii) Any Money Market Quote shall be disregarded if it:
(A) is not substantially in conformity with Exhibit D hereto
or does not specify all of the information required by subsection
(d)(ii);
(B) contains qualifying, conditional or similar language
(other than the limitation set forth in clause (ii)(B)(z) above);
(C) proposes terms other than or in addition to those set
forth in the applicable Invitation for Money Market Quotes; or
(D) arrives after the time set forth in subsection (d)(i).
(e) Notice to Borrower. The Agent shall promptly notify the
Borrower of the terms (x) of any Money Market Quote submitted by a Bank that is
in accordance with subsection (d) and (y) of any Money Market Quote that
amends, modifies or is otherwise inconsistent with a previous Money Market
Quote submitted by such Bank with
24
EXH. 4.1-29
<PAGE> 30
respect to the same Money Market Quote Request. Any such subsequent Money
Market Quote shall be disregarded by the Agent unless such subsequent Money
Market Quote is submitted solely to correct a manifest error in such former
Money Market Quote. The Agent's notice to the Borrower shall specify (A) the
aggregate principal amount of Money Market Loans for which offers have been
received for each Interest Period specified in the related Money Market Quote
Request, (B) the respective principal amounts and Money Market Margins or Money
Market Absolute Rates, as the case may be, so offered and (C) if applicable,
limitations on the aggregate principal amount of Money Market Loans for which
offers in any single Money Market Quote may be accepted.
(f) Acceptance and Notice by Borrower. Not later than 10:15
A.M. (New York City time) on (x) the third Euro-Dollar Business Day prior to
the proposed date of Borrowing, in the case of a LIBOR Auction or (y) the
proposed date of Borrowing, in the case of an Absolute Rate Auction (or, in
either case, such other time or date as the Borrower and the Agent shall have
mutually agreed and shall have notified to the Banks not later than the date of
the Money Market Quote Request for the first LIBOR Auction or Absolute Rate
Auction for which such change is to be effective), the Borrower shall notify
the Agent of its acceptance or non-acceptance of the offers so notified to it
pursuant to subsection (e). In the case of acceptance, such notice (a "Notice
of Money Market Borrowing") shall specify the aggregate principal amount of
offers for each Interest Period that are accepted. The Borrower may accept any
Money Market Quote in whole or in part; provided that:
(i) the aggregate principal amount of each Money Market
Borrowing may not exceed the applicable amount set forth in the
related Money Market Quote Request,
(ii) the principal amount of each Money Market Borrowing must
be $15,000,000 or a larger multiple of $1,000,000,
(iii) acceptance of offers may only be made on the basis of
ascending Money Market Margins or Money Market Absolute Rates, as the
case may be, and
(iv) the Borrower may not accept any offer that is described in
subsection (d)(iii) or that otherwise fails to comply with the
requirements of this Agreement.
25
EXH. 4.1-30
<PAGE> 31
(g) Allocation by Agent. If offers are made by two or more
Banks with the same Money Market Margins or Money Market Absolute Rates, as the
case may be, for a greater aggregate principal amount than the amount in
respect of which such offers are accepted for the related Interest Period, the
principal amount of Money Market Loans in respect of which such offers are
accepted shall be allocated by the Agent among such Banks as nearly as possible
(in multiples of $1,000,000, as the Agent may deem appropriate) in proportion
to the aggregate principal amounts of such offers. Determinations by the Agent
of the amounts of Money Market Loans shall be conclusive in the absence of
manifest error.
SECTION 2.04. Notice to Banks; Funding of Loans.
(a) Upon receipt of a Notice of Borrowing, the Agent shall
promptly notify each Bank of the contents thereof and of such Bank's share (if
any) of such Borrowing and such Notice of Borrowing shall not thereafter be
revocable by the Borrower.
(b) Not later than 12:00 Noon (New York City time) on the
date of each Borrowing, each Bank participating therein shall (except as
provided in subsection (c) of this Section) make available its share of such
Borrowing, in Federal or other funds immediately available in New York City, to
the Agent at its address referred to in Section 9.01. Unless the Agent
determines that any applicable condition specified in Article III has not been
satisfied, the Agent will make the funds so received from the Banks available
to the Borrower at the Agent's aforesaid address.
(c) If any Bank makes a new Loan hereunder on a day on which
the Borrower is to repay all or any part of an outstanding Loan from such Bank,
such Bank shall apply the proceeds of its new Loan to make such repayment and
only an amount equal to the difference (if any) between the amount being
borrowed and the amount being repaid shall be made available by such Bank to
the Agent as provided in subsection (b), or remitted by the Borrower to the
Agent as provided in Section 2.12, as the case may be.
(d) Unless the Agent shall have received notice from a Bank
prior to the date of any Borrowing that such Bank will not make available to
the Agent such Bank's share of such Borrowing, the Agent may assume that such
Bank has
26
EXH. 4.1-31
<PAGE> 32
made such share available to the Agent on the date of such Borrowing in
accordance with subsections (b) and (c) of this Section 2.04 and the Agent may,
in reliance upon such assumption, make available to the Borrower on such date a
corresponding amount. If and to the extent that such Bank shall not have so
made such share available to the Agent, such Bank and, if such Bank shall fail
to do so within one Domestic Business Day, the Borrower severally agree to
repay to the Agent forthwith on demand such corresponding amount together with
interest thereon, for each day from the date such amount is made available to
the Borrower until the date such amount is repaid to the Agent, at the Federal
Funds Rate. If such Bank shall repay to the Agent such corresponding amount,
such amount so repaid shall constitute such Bank's Loan included in such
Borrowing for purposes of this Agreement.
SECTION 2.05. Notes. (a) The Loans of each Bank shall be
evidenced by a single Note payable to the order of such Bank for the account of
its Applicable Lending Office in an amount equal to the aggregate unpaid
principal amount of such Bank's Loans.
(b) Each Bank may, by notice to the Borrower and the Agent,
request that its Loans of a particular type be evidenced by a separate Note in
an amount equal to the aggregate unpaid principal amount of such Loans. Each
such Note shall be in substantially the form of Exhibit A hereto with
appropriate modifications to reflect the fact that it evidences solely Loans of
the relevant type. Each reference in this Agreement to the "Note" of such Bank
shall be deemed to refer to and include any or all of such Notes, as the
context may require.
(c) Upon receipt of each Bank's Note pursuant to Section
3.01(b), the Agent shall forward such Note to such Bank. Each Bank shall
record the date, amount, type and maturity of each Loan made by it and the date
and amount of each payment of principal made by the Borrower with respect
thereto, and may, if such Bank so elects in connection with any transfer or
enforcement of its Note, endorse on the schedule forming a part thereof
appropriate notations to evidence the foregoing information with respect to
each such Loan then outstanding; provided that the failure of any Bank to make
any such recordation or endorsement shall not affect the obligations of the
Borrower hereunder or under the Notes. Each Bank is hereby irrevocably
authorized by the Borrower so to endorse its Note and to attach to and make a
27
EXH. 4.1-32
<PAGE> 33
part of its Note a continuation of any such schedule as and when required.
SECTION 2.06. Maturity of Loans. Each Loan included in any
Borrowing shall mature, and the principal amount thereof shall be due and
payable, on the last day of the Interest Period applicable to such Borrowing.
SECTION 2.07. Interest Rates. (a) Each Base Rate Loan shall
bear interest on the outstanding principal amount thereof, for each day from
the date such Loan is made until it becomes due, at a rate per annum equal to
the Base Rate for such day. Such interest shall be payable for each Interest
Period on the last day thereof. Any overdue principal of or interest on any
Base Rate Loan shall bear interest, payable on demand, for each day until paid
at a rate per annum equal to the sum of 2% plus the rate otherwise applicable
to Base Rate Loans for such day.
(b) Each CD Loan shall bear interest on the outstanding
principal amount thereof, for each day during the Interest Period applicable
thereto, at a rate per annum equal to the sum of the Applicable Margin for such
day plus the Adjusted CD Rate applicable to such Interest Period; provided that
if any CD Loan or any portion thereof shall, as a result of clause (2)(b) of
the definition of Interest Period, have an Interest Period of less than 30
days, such portion shall bear interest during such Interest Period at the rate
applicable to Base Rate Loans during such period. Such interest shall be
payable for each Interest Period on the last day thereof and, if such Interest
Period is longer than 90 days, at intervals of 90 days after the first day
thereof. Any overdue principal of or interest on any CD Loan shall bear
interest, payable on demand, for each day until paid at a rate per annum equal
to the sum of 2% plus the higher of (i) the sum of the Applicable Margin for
such day plus the Adjusted CD Rate applicable to such Loan and (ii) the rate
applicable to Base Rate Loans for such day.
The "Adjusted CD Rate" applicable to any Interest Period means
a rate per annum determined pursuant to the following formula:
[ CDBR ]*
ACDR = [ ---------- ] + AR
[ 1.00 - DRP ]
28
EXH. 4.1-33
<PAGE> 34
ACDR = Adjusted CD Rate
CDBR = CD Base Rate
DRP = Domestic Reserve Percentage
AR = Assessment Rate
__________
* The amount in brackets being rounded upward, if
necessary, to the next higher 1/100 of 1%
The "CD Base Rate" applicable to any Interest Period is the
rate of interest determined by the Agent to be the average (rounded upward, if
necessary, to the next higher 1/100 of 1%) of the prevailing rates per annum
bid at 10:00 A.M. (New York City time) (or as soon thereafter as practicable)
on the first day of such Interest Period by two or more New York certificate of
deposit dealers of recognized standing for the purchase at face value from each
CD Reference Bank of its certificates of deposit in an amount comparable to the
principal amount of the CD Loan of such CD Reference Bank to which such
Interest Period applies and having a maturity comparable to such Interest
Period.
"Domestic Reserve Percentage" means for any day that
percentage (expressed as a decimal) which is in effect on such day, as
prescribed by the Board of Governors of the Federal Reserve System (or any
successor) for determining the maximum reserve requirement (including without
limitation any basic, supplemental or emergency reserves) for a member bank of
the Federal Reserve System in New York City with deposits exceeding five
billion dollars in respect of new non-personal time deposits in dollars in New
York City having a maturity comparable to the related Interest Period and in an
amount of $100,000 or more. The Adjusted CD Rate shall be adjusted
automatically on and as of the effective date of any change in the Domestic
Reserve Percentage.
"Assessment Rate" means for any day the annual assessment rate
in effect on such day which is payable by a member of the Bank Insurance Fund
classified as adequately capitalized and within supervisory subgroup "A" (or a
comparable successor assessment risk classification) within the meaning of 12
C.F.R. Section 327.3(d) (or any successor provision) to the Federal Deposit
Insurance Corporation (or any successor) for such Corporation's (or such
successor's) insuring time deposits at offices of such institution in the
United States. The Adjusted CD Rate shall be adjusted
29
EXH. 4.1-34
<PAGE> 35
automatically on and as of the effective date of any change in the Assessment
Rate.
(c) Each Euro-Dollar Loan shall bear interest on the
outstanding principal amount thereof, for each day during the Interest Period
applicable thereto, at a rate per annum equal to the sum of the Applicable
Margin for such day plus the London Interbank Offered Rate applicable to such
Interest Period. Such interest shall be payable for each Interest Period on
the last day thereof and, if such Interest Period is longer than three months,
at intervals of three months after the first day thereof.
The "London Interbank Offered Rate" applicable to any Interest
Period means the average (rounded upward, if necessary, to the next higher 1/16
of 1%) of the respective rates per annum at which deposits in dollars are
offered to each of the Euro-Dollar Reference Banks in the London interbank
market at approximately 11:00 A.M. (London time) two Euro-Dollar Business Days
before the first day of such Interest Period in an amount approximately equal
to the principal amount of the Euro-Dollar Loan of such Euro-Dollar Reference
Bank to which such Interest Period is to apply and for a period of time
comparable to such Interest Period.
(d) Any overdue principal of or interest on any Euro-Dollar
Loan shall bear interest, payable on demand, for each day from and including
the date payment thereof was due to but excluding the date of actual payment,
at a rate per annum equal to the sum of 2% plus the higher of (i) the sum of
the Applicable Margin for such day plus the London Interbank Offered Rate
applicable to such Loan and (ii) the Applicable Margin for such day plus the
quotient obtained (rounded upward, if necessary, to the next higher 1/100 of
1%) by dividing (x) the average (rounded upward, if necessary, to the next
higher 1/16 of 1%) of the respective rates per annum at which one day (or, if
such amount due remains unpaid more than three Euro-Dollar Business Days, then
for such other period of time not longer than three months as the Agent may
select) deposits in dollars in an amount approximately equal to such overdue
payment due to each of the Euro-Dollar Reference Banks are offered to such
Euro-Dollar Reference Bank in the London interbank market for the applicable
period determined as provided above by (y) 1.00 minus the Euro-Dollar Reserve
Percentage (or, if the circumstances described in clause (a) or (b) of Section
8.01 shall exist, at a rate per annum equal to the sum of 2% plus the rate
applicable to Base Rate Loans for such day).
30
EXH. 4.1-35
<PAGE> 36
(e) Subject to Section 8.01(a), each Money Market LIBOR Loan
shall bear interest on the outstanding principal amount thereof, for the
Interest Period applicable thereto, at a rate per annum equal to the sum of the
London Interbank Offered Rate for such Interest Period (determined in
accordance with Section 2.07(c) as if the related Money Market LIBOR Borrowing
were a Euro-Dollar Borrowing) plus (or minus) the Money Market Margin quoted by
the Bank making such Loan in accordance with Section 2.03. Each Money Market
Absolute Rate Loan shall bear interest on the outstanding principal amount
thereof, for the Interest Period applicable thereto, at a rate per annum equal
to the Money Market Absolute Rate quoted by the Bank making such Loan in
accordance with Section 2.03. Such interest shall be payable for each Interest
Period on the last day thereof and, if such Interest Period is longer than
three months, at intervals of three months after the first day thereof. Any
overdue principal of or interest on any Money Market Loan shall bear interest,
payable on demand, for each day until paid at a rate per annum equal to the sum
of 2% plus the Base Rate for such day.
(f) The Agent shall determine each interest rate applicable
to the Loans hereunder. The Agent shall give prompt notice to the Borrower and
the participating Banks of each rate of interest so determined, and its
determination thereof shall be conclusive in the absence of manifest error.
(g) Each Reference Bank agrees to use its best efforts to
furnish quotations to the Agent as contemplated by this Section. If any
Reference Bank does not furnish a timely quotation, the Agent shall determine
the relevant interest rate on the basis of the quotation or quotations
furnished by the remaining Reference Bank or Banks or, if none of such
quotations is available on a timely basis, the provisions of Section 8.01 shall
apply.
(h) The "Applicable Margin" with respect to any CD Loan or
Euro-Dollar Loan at any date is the applicable percentage amount set forth in
the table below based on the Utilization and Status for such day:
<TABLE>
<CAPTION>
Level I Level II Level III Level IV Level V
Status Status Status Status Status
------- -------- --------- -------- -------
<S> <C> <C> <C> <C> <C>
If Utilization is
</TABLE>
31
EXH. 4.1-36
<PAGE> 37
<TABLE>
<S> <C> <C> <C> <C> <C>
equal to or
less than
50%:
Euro-Dollar .3125% .375% .375% .625% .875%
Loans
CD Loans .4375% .50% .50% .75% 1.00%
If Utilization is
greater than 50%:
Euro-Dollar .375% .4375% .5625% .75% 1.00%
Loans
CD Loans .50% .5625% .6875% .875% 1.125%
</TABLE>
SECTION 2.08. Fees.
(a) Commitment Fee. The Borrower shall pay to the Agent for the
account of the Banks ratably in proportion to their Commitments a commitment
fee at the Commitment Fee Rate on the daily amount by which the aggregate
amount of the Commitments exceeds the aggregate outstanding principal amount of
the Loans. Such commitment fee shall accrue from and including the date hereof
to but excluding the Termination Date.
"Commitment Fee Rate" means a rate per annum equal to (i) 0.125%
for any day on which Level V Status exists and (ii) 0.0625% for any other day.
(b) Facility Fee. The Borrower shall pay to the Agent for the
account of the Banks ratably in proportion to their Commitments a facility fee
at the Facility Fee Rate. Such facility fee shall accrue (i) from and
including the date hereof to but excluding the Termination Date on the daily
aggregate amount of the Commitments (whether used or unused) and (ii) from and
including the Termination Date to but excluding the date the Loans shall be
repaid in their entirety, on the daily aggregate outstanding principal amount
of the Loans.
"Facility Fee Rate" means a rate per annum equal to (i) 0.125% for
any day on which Level I Status exists, (ii) 0.1875% for any day on which Level
II Status exists and (iii) 0.25% for any other day.
(c) Fee Calculations. For purposes of fee calculations under
subsections (a) and (b) above for the period from and including the date hereof
to but not
32
EXH. 4.1-37
<PAGE> 38
including the earlier of (i) the Effective Date or (ii) January 1, 1994, the
Commitment of each Bank shall be reduced (but not below zero) by an amount
equal to the commitment (if any) of such Bank under the Prior Credit Agreement.
(d) Payments. Accrued fees under this Section shall be payable
quarterly in arrears on the last Euro-Dollar Business Day of each March, June,
September and December, and upon the date of termination of the Commitments in
their entirety (and, if later, the date the Loans shall be repaid in their
entirety).
SECTION 2.09. Optional Termination or Reduction of Commitments.
The Borrower may, upon at least three Domestic Business Days' notice to the
Agent, (i) terminate the Commitments at any time, if no Loans are outstanding
at such time or (ii) ratably reduce from time to time by an aggregate amount of
$10,000,000 or any larger multiple thereof, the aggregate amount of the
Commitments in excess of the aggregate outstanding principal amount of the
Loans.
SECTION 2.10. Mandatory Termination of Commitments. The
Commitments shall terminate on the Termination Date, and any Loans then
outstanding (together with accrued interest thereon) shall be due and payable
on such date.
SECTION 2.11. Optional Prepayments. (a) The Borrower may (i)
upon at least one Domestic Business Day's notice to the Agent, prepay any Base
Rate Borrowing (or any Money Market Borrowing bearing interest at the Base Rate
pursuant to Section 8.01(a)), (ii) upon at least three Domestic Business Days'
notice to the Agent, subject to Section 2.13, prepay any CD Borrowing and (iii)
upon at least three Euro-Dollar Business Days' notice to the Agent, subject to
Section 2.13, prepay any Euro-Dollar Borrowing, in whole at any time, or from
time to time in part in amounts aggregating $15,000,000 or any larger multiple
of $1,000,000, by paying the principal amount to be prepaid together with
accrued interest thereon to the date of prepayment. Each such optional
prepayment shall be applied to prepay ratably the Loans of the several Banks
included in such Borrowing.
(b) Except as provided in Section 2.11(a), the Borrower may not
prepay all or any portion of the principal
33
EXH. 4.1-38
<PAGE> 39
amount of any Money Market Loan prior to the maturity thereof.
(c) Upon receipt of a notice of prepayment pursuant to this
Section, the Agent shall promptly notify each Bank of the contents thereof and
of such Bank's ratable share (if any) of such prepayment and such notice shall
not thereafter be revocable by the Borrower.
SECTION 2.12. General Provisions as to Payments. (a) The
Borrower shall make each payment of principal of, and interest on, the Loans
and of fees hereunder, not later than 12:00 Noon (New York City time) on the
date when due, in Federal or other funds immediately available in New York
City, to the Agent at its address referred to in Section 9.01. The Agent will
promptly distribute to each Bank its ratable share of each such payment
received by the Agent for the account of the Banks. Whenever any payment of
principal of, or interest on, the Domestic Loans or of fees shall be due on a
day which is not a Domestic Business Day, the date for payment thereof shall be
extended to the next succeeding Domestic Business Day. Whenever any payment of
principal of, or interest on, the Euro-Dollar Loans shall be due on a day which
is not a Euro-Dollar Business Day, the date for payment thereof shall be
extended to the next succeeding Euro-Dollar Business Day unless such
Euro-Dollar Business Day falls in another calendar month, in which case the
date for payment thereof shall be the next preceding Euro-Dollar Business Day.
Whenever any payment of principal of, or interest on, the Money Market Loans
shall be due on a day which is not a Euro-Dollar Business Day, the date for
payment thereof shall be extended to the next succeeding Euro-Dollar Business
Day. If the date for any payment of principal is extended by operation of law
or otherwise, interest thereon shall be payable for such extended time.
(b) Unless the Agent shall have received notice from the Borrower
prior to the date on which any payment is due to the Banks hereunder that the
Borrower will not make such payment in full, the Agent may assume that the
Borrower has made such payment in full to the Agent on such date and the Agent
may, in reliance upon such assumption, cause to be distributed to each Bank on
such due date an amount equal to the amount then due such Bank. If and to the
extent that the Borrower shall not have so made such payment, each Bank shall
repay to the Agent forthwith on demand such amount distributed to such Bank
together with interest thereon, for each day from the date such amount is
distributed to such
34
EXH. 4.1-39
<PAGE> 40
Bank until the date such Bank repays such amount to the Agent, at the Federal
Funds Rate.
SECTION 2.13. Funding Losses. If the Borrower makes any payment
of principal with respect to any Fixed Rate Loan (pursuant to Article VI or
VIII or otherwise) on any day other than the last day of the Interest Period
applicable thereto, or the last day of an applicable period fixed pursuant to
Section 2.07(d), or if the Borrower fails to borrow or prepay any Fixed Rate
Loans after notice has been given to any Bank in accordance with Section
2.04(a) or 2.11(c), the Borrower shall reimburse each Bank within 15 days after
demand for any resulting loss or expense incurred by it (or by an existing or
prospective Participant in the related Loan), including (without limitation)
any loss incurred in obtaining, liquidating or employing deposits from third
parties, but excluding loss of margin for the period after any such payment or
failure to borrow or prepay, provided that such Bank shall have delivered to
the Borrower a certificate as to the amount of such loss or expense, setting
forth the basis of calculation thereof, which certificate shall be conclusive
in the absence of manifest error.
SECTION 2.14. Computation of Interest and Fees. Interest based
on the Prime Rate and commitment fees hereunder shall be computed on the basis
of a year of 365 days (or 366 days in a leap year) and paid for the actual
number of days elapsed (including the first day but excluding the last day).
All other interest and facility fees shall be computed on the basis of a year
of 360 days and paid for the actual number of days elapsed (including the first
day but excluding the last day).
SECTION 2.15. Regulation D Compensation. For so long as any Bank
maintains reserves against "Eurocurrency liabilities" (or any other category of
liabilities which includes deposits by reference to which the interest rate on
Euro-Dollar Loans is determined or any category of extensions of credit or
other assets which includes loans by a non-United States office of such Bank to
United States residents), and as a result the cost to such Bank (or its
Euro-Dollar Lending Office) of making or maintaining its Euro-Dollar Loans is
increased, then such Bank may require the Borrower to pay, contemporaneously
(or at such other time or times as the Borrower and such Bank may mutually
agree) with each payment of interest on the Euro-Dollar Loans, additional
interest on the related Euro-Dollar Loan
35
EXH. 4.1-40
<PAGE> 41
of such Bank at a rate per annum up to but not exceeding the excess of (i) (A)
the applicable London Interbank Offered Rate divided by (B) one minus the
Euro-Dollar Reserve Percentage over (ii) the applicable London Interbank
Offered Rate. Any Bank wishing to require payment of such additional interest
(x) shall so notify the Borrower and the Agent, in which case such additional
interest on the Euro-Dollar Loans of such Bank shall be payable to such Bank at
the place indicated in such notice with respect to each Interest Period
commencing at least three Euro-Dollar Business Days after the giving of such
notice and (y) shall furnish to the Borrower at least five Euro-Dollar Business
Days prior to each date on which interest is payable on the Euro-Dollar Loans
(or at such other time or times as the Borrower and such Bank may mutually
agree) an officer's certificate setting forth the amount to which such Bank is
then entitled under this Section (which shall be consistent with such Bank's
good faith estimate of the level at which the related reserves are maintained
by it). Each such certificate shall be accompanied by such information as the
Borrower may reasonably request as to the computation set forth therein.
ARTICLE III
CONDITIONS
SECTION 3.01. Effectiveness. This Agreement shall become
effective on the date that each of the following conditions shall have been
satisfied (or waived in accordance with Section 9.05):
(a) receipt by the Agent of counterparts hereof signed by each of
the parties hereto (or, in the case of any party as to which an executed
counterpart shall not have been received, receipt by the Agent in form
satisfactory to it of telegraphic, telex or other written confirmation from
such party of execution of a counterpart hereof by such party);
(b) receipt by the Agent for the account of each Bank of a duly
executed Note dated on or before the Effective Date complying with the
provisions of Section 2.05;
36
EXH. 4.1-41
<PAGE> 42
(c) receipt by the Agent of an opinion of the principal legal
officer of the Borrower, substantially in the form of Exhibit E hereto and
covering such additional matters relating to the transactions contemplated
hereby as the Required Banks may reasonably request;
(d) receipt by the Agent of an opinion of Davis Polk & Wardwell,
special counsel for the Agent, substantially in the form of Exhibit F
hereto and covering such additional matters relating to the transactions
contemplated hereby as the Required Banks may reasonably request;
(e) receipt by the Agent of letters from Wachtell Lipton Rosen &
Katz and Miller & Chevalier authorizing the Agent and the Banks to rely on
their respective opinions rendered to the Borrower as to the Federal income
tax treatment of the Spin-Off;
(f) receipt by the Agent of all documents it may reasonably
request relating to the existence of the Borrower, the corporate authority
for and the validity of this Agreement and the Notes, and any other matters
relevant hereto, all in form and substance satisfactory to the Agent; and
(g) receipt by the Agent of evidence satisfactory to it of the
payment of all amounts payable under the Prior Credit Agreement;
provided that this Agreement shall not become effective or be binding on any
party hereto unless all of the foregoing conditions are satisfied not later
than February 23, 1994. The Agent shall promptly notify the Borrower and the
Banks of the Effective Date, and such notice shall be conclusive and binding on
all parties hereto. The Banks that are parties to the Prior Credit Agreement
and the Borrower agree that the commitments under the Prior Credit Agreement
shall terminate in their entirety simultaneously with and subject to the
effectiveness of this Agreement and that the Borrower shall be obligated to pay
the accrued commitment and facility fees thereunder to but excluding the date
of such effectiveness.
SECTION 3.02. Borrowings. The obligation of any Bank to make a
Loan on the occasion of any Borrowing is subject to the satisfaction of the
following conditions:
37
EXH. 4.1-42
<PAGE> 43
(a) receipt by the Agent of a Notice of Borrowing as required by
Section 2.02 or 2.03, as the case may be;
(b) the fact that, immediately after such Borrowing, the
aggregate outstanding principal amount of the Loans will not exceed the
aggregate amount of the Commitments;
(c) the fact that, immediately before and after such Borrowing,
no Default shall have occurred and be continuing; and
(d) the fact that the representations and warranties of the
Borrower contained in this Agreement (except, in the case of a Refunding
Borrowing, the representations and warranties set forth in Section 4.04(b)
as to any matter which has theretofore been disclosed in writing by the
Borrower to the Banks) shall be true on and as of the date of such
Borrowing.
Each Borrowing hereunder shall be deemed to be a representation and warranty by
the Borrower on the date of such Borrowing as to the facts specified in clauses
(b), (c) and (d) of this Section.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants that:
SECTION 4.01. Corporate Existence and Power. The Borrower is a
corporation duly incorporated, validly existing and in good standing under the
laws of Delaware, and has all corporate powers and all material governmental
licenses, authorizations, consents and approvals required to carry on its
business as now conducted.
SECTION 4.02. Corporate and Governmental Authorization; No
Contravention. The execution, delivery and performance by the Borrower of this
Agreement and the Notes are within the Borrower's corporate powers, have been
duly authorized by all necessary corporate action, require no action by or in
respect of, or filing with, any
38
EXH. 4.1-43
<PAGE> 44
governmental body, agency or official and do not contravene, or constitute a
default under, any provision of applicable law or regulation or of the
certificate of incorporation or by-laws of the Borrower or of any agreement,
judgment, injunction, order, decree or other instrument binding upon the
Borrower or result in the creation or imposition of any Lien on any asset of
the Borrower or any of its Subsidiaries.
SECTION 4.03. Binding Effect. This Agreement constitutes a valid
and binding agreement of the Borrower and the Notes, when executed and
delivered in accordance with this Agreement, will constitute valid and binding
obligations of the Borrower.
SECTION 4.04. Financial Information.
(a) The consolidated balance sheets of the Borrower and its
Consolidated Subsidiaries as of July 31, 1992 and 1993 and the related
consolidated statements of operations, shareholders' investment and cash flows
for each of the three years ended July 31, 1993, reported on by Deloitte &
Touche and set forth in the Borrower's 1993 Form 10-K, a copy of which has been
delivered to each of the Banks, fairly present, in conformity with generally
accepted accounting principles, the consolidated financial position of the
Borrower and its Consolidated Subsidiaries as of such dates and their
consolidated results of operations and cash flows for such fiscal years.
(b) Since July 31, 1993 there has been no material adverse change
in the business, financial position, results of operations or prospects of the
Borrower and its Consolidated Subsidiaries, considered as a whole.
SECTION 4.05. Litigation.
(a) Except for actions, suits or proceedings (i) described in the
Borrower's 1993 Form 10-K or (ii) commenced after the date of this Agreement
and disclosed in writing to the Banks, there is no action, suit or proceeding
pending against, or to the knowledge of the Borrower threatened against or
affecting, the Borrower or any of its Subsidiaries before any court or
arbitrator or any governmental body, agency or official an adverse decision in
which might materially adversely affect the business, consolidated financial
position or consolidated results of
39
EXH. 4.1-44
<PAGE> 45
operations of the Borrower and its Consolidated Subsidiaries taken as a whole.
(b) Since the date of the Borrower's 1993 Form 10-K and except as
disclosed in the Borrower's quarterly report on Form 10-Q for the quarter ended
October 31, 1993, there has been no change in the status of the actions, suits
and proceedings described therein which materially and adversely affects the
business, financial position, results of operations or prospects of the
Borrower and its Consolidated Subsidiaries, considered as a whole.
(c) There is no action, suit or proceeding pending against, or to
the knowledge of the Borrower threatened against or affecting, the Borrower or
any of its Subsidiaries before any court or arbitrator or any governmental
body, agency or official which in any manner questions the validity of this
Agreement or the Notes.
SECTION 4.06. Compliance with ERISA. Each member of the ERISA
Group has fulfilled its obligations under the minimum funding standards of
ERISA and the Internal Revenue Code with respect to each Plan and is in
compliance in all material respects with the presently applicable provisions of
ERISA and the Internal Revenue Code with respect to each Plan. No member of
the ERISA Group has (i) sought a waiver of the minimum funding standard under
Section 412 of the Internal Revenue Code in respect of any Plan, (ii) failed to
make any contribution or payment to any Plan or Multiemployer Plan or in
respect of any Benefit Arrangement, or made any amendment to any Plan or
Benefit Arrangement, which has resulted or could result in the imposition of a
Lien or the posting of a bond or other security under ERISA or the Internal
Revenue Code or (iii) incurred any liability under Title IV of ERISA other than
a liability to the PBGC for premiums under Section 4007 of ERISA.
SECTION 4.07. Environmental Matters. In the ordinary course of
its business, the Borrower conducts an ongoing review of the effect of
Environmental Laws on the business, operations and properties of the Borrower
and its Subsidiaries, in the course of which it identifies and evaluates
associated liabilities and costs (including, without limitation, any capital or
operating expenditures required for clean-up or closure of properties presently
or previously owned, any capital or operating expenditures required to achieve
or maintain compliance with environmental protection standards imposed by law
or as a
40
EXH. 4.1-45
<PAGE> 46
condition of any license, permit or contract, any related constraints on
operating activities, including any periodic or permanent shutdown of any
facility or reduction in the level of or change in the nature of operations
conducted thereat, any costs or liabilities in connection with off-site
disposal of wastes or Hazardous Substances, and any actual or potential
liabilities to third parties, including employees, and any related costs and
expenses). On the basis of this review, and based upon conditions of which the
Borrower has knowledge and upon its estimates of the costs of compliance with
and/or remediation mandated by Environmental Laws, the Borrower has reasonably
concluded that Environmental Laws are unlikely to have a material adverse
effect on the business, financial condition, results of operations or prospects
of the Borrower and its Consolidated Subsidiaries, considered as a whole.
SECTION 4.08. Taxes. United States Federal income tax returns of
the Borrower and its Subsidiaries have been examined and closed through the
fiscal year ended August 1, 1982. The Borrower and its Subsidiaries have filed
all United States Federal income tax returns and all other material tax returns
which are required to be filed by them and have paid all taxes due pursuant to
such returns or pursuant to any assessment received by the Borrower or any
Subsidiary. In the Borrower's opinion, all material tax liabilities were
adequately provided for as of July 31, 1993 and are now so provided for in the
books of the Borrower and its Consolidated Subsidiaries.
SECTION 4.09. Material Subsidiaries. Each of the Borrower's
Material Subsidiaries is a corporation duly incorporated, validly existing and
in good standing under the laws of its jurisdiction of incorporation, and has
all corporate powers and all material governmental licenses, authorizations,
consents and approvals required to carry on its business as now conducted.
SECTION 4.10. Not an Investment Company. The Borrower is not an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended.
SECTION 4.11. Use of Proceeds. The proceeds of the loans under
this Agreement will be used for general corporate purposes. None of such
proceeds will be used, directly or indirectly, for the purpose, whether
immediate, incidental or ultimate, of buying or carrying any "margin stock",
within the meaning of Regulation U.
41
EXH. 4.1-46
<PAGE> 47
SECTION 4.12. Full Disclosure. All information heretofore
furnished by the Borrower to the Agent or any Bank for purposes of or in
connection with this Agreement or any transaction contemplated hereby is, and
all such information hereafter furnished by the Borrower to the Agent or any
Bank will be, true and accurate in all material respects on the date as of
which such information is stated or certified. The Borrower has disclosed to
the Banks in writing any and all facts which materially and adversely affect or
may affect (to the extent the Borrower can now reasonably foresee), the
business, operations or financial condition of the Borrower and its
Consolidated Subsidiaries, taken as a whole, or the ability of the Borrower to
perform its obligations under this Agreement.
ARTICLE V
COVENANTS
The Borrower agrees that, from and after the Effective Date for so
long as any Bank has any Commitment hereunder or any amount payable under any
Note remains unpaid:
SECTION 5.01. Information. The Borrower will deliver to each of
the Banks:
(a) as soon as available and in any event within 120 days after
the end of each fiscal year of the Borrower, a consolidated balance sheet
of the Borrower and its Consolidated Subsidiaries as of the end of such
fiscal year and the related consolidated financial statements in the form
then required to be filed with the Securities and Exchange Commission on
Form 10-K or its then equivalent, all reported on by Deloitte & Touche or
other independent public accountants of nationally recognized standing;
(b) as soon as available and in any event within 60 days after
the end of each of the first three quarters of each fiscal year of the
Borrower, a consolidated balance sheet of the Borrower and its Consolidated
Subsidiaries as of the end of such quarter and the related consolidated
financial statements in the form then required to be filed with the
Securities
42
EXH. 4.1-47
<PAGE> 48
and Exchange Commission on Form 10-Q or its then equivalent, all certified
(subject to normal year-end audit adjustments) by the chief financial
officer or the chief accounting officer of the Borrower;
(c) simultaneously with the delivery of each set of financial
statements referred to in clauses (a) and (b) above, a certificate of the
chief financial officer or the chief accounting officer of the Borrower (i)
setting forth in reasonable detail the calculations required to establish
whether the Borrower was in compliance with the requirements of Sections
5.05 to 5.08, inclusive, on the date of such financial statements and (ii)
stating whether any Default exists on the date of such certificate and, if
any Default then exists, setting forth the details thereof and the action
which the Borrower is taking or proposes to take with respect thereto;
(d) simultaneously with the delivery of each set of financial
statements referred to in clause (a) above, a statement of the firm of
independent public accountants which reported on such statements whether
anything has come to their attention to cause them to believe that any
Default existed on the date of such statements;
(e) within five days after any officer of the Borrower obtains
knowledge of any Default, if such Default is then continuing, a certificate
of the chief financial officer or the chief accounting officer of the
Borrower setting forth the details thereof and the action which the
Borrower is taking or proposes to take with respect thereto;
(f) promptly upon the mailing thereof to the shareholders of the
Borrower generally, copies of all financial statements, reports and proxy
statements so mailed;
(g) promptly upon the filing thereof, copies of all registration
statements (other than the exhibits thereto and any registration statements
on Form S-8 or its equivalent) and reports on Forms 10-K, 10-Q and 8-K (or
their equivalents) which the Borrower shall have filed with the Securities
and Exchange Commission;
43
EXH. 4.1-48
<PAGE> 49
(h) if and when any member of the ERISA Group (i) gives or is
required to give notice to the PBGC of any "reportable event" (as defined
in Section 4043 of ERISA) with respect to any Material Plan which might
constitute grounds for a termination of such Plan under Title IV of ERISA,
or knows that the plan administrator of any Material Plan has given or is
required to give notice of any such reportable event, a copy of the notice
of such reportable event given or required to be given to the PBGC; (ii)
receives notice of complete or partial withdrawal liability under Title IV
of ERISA or notice that any Multiemployer Plan is in reorganization, is
insolvent or has been terminated, a copy of such notice; (iii) receives
notice from the PBGC under Title IV of ERISA of an intent to terminate,
impose liability (other than for premiums under Section 4007 of ERISA) in
respect of, or appoint a trustee to administer, any Material Plan, a copy
of such notice; (iv) applies for a waiver of the minimum funding standard
under Section 412 of the Internal Revenue Code, a copy of such application;
(v) gives notice of intent to terminate any Material Plan under Section
4041(c) of ERISA, a copy of such notice and other information filed with
the PBGC; (vi) gives notice of withdrawal from any Material Plan pursuant
to Section 4063 of ERISA, a copy of such notice; or (vii) fails to make any
payment or contribution to any Material Plan or Multiemployer Plan or in
respect of any Benefit Arrangement or makes any amendment to any Material
Plan or Benefit Arrangement which has resulted or could result in the
imposition of a Lien or the posting of a bond or other security, a
certificate of the chief financial officer or the chief accounting officer
of the Borrower setting forth details as to such occurrence and action, if
any, which the Borrower or applicable member of the ERISA Group is required
or proposes to take;
(i) forthwith, notice of any change of which the Borrower becomes
aware in the rating by any Rating Agency of the Borrower's long-term debt;
and
(j) from time to time such additional information regarding the
financial position or business of the Borrower and its Subsidiaries as the
Agent, at the request of any Bank, may reasonably request.
SECTION 5.02. Maintenance of Property; Insurance.
44
EXH. 4.1-49
<PAGE> 50
(a) The Borrower will keep, and will cause each Subsidiary to
keep, all property useful and necessary in its business in good working order
and condition, ordinary wear and tear excepted.
(b) The Borrower will, and will cause each of its Subsidiaries
to, maintain (either in the name of the Borrower or in such Subsidiary's own
name) with financially sound and responsible insurance companies, insurance on
all their respective properties in at least such amounts and against at least
such risks (and with such risk retention) as are usually insured against in the
same general area by companies of established repute engaged in the same or a
similar business; and will furnish to the Banks, upon request from the Agent,
information presented in reasonable detail as to the insurance so carried.
SECTION 5.03. Maintenance of Existence. The Borrower will renew
and keep in full force and effect its corporate existence and its rights,
privileges and franchises necessary or desirable in the normal conduct of
business.
SECTION 5.04. Compliance with Laws. The Borrower will comply, and
cause each Subsidiary to comply, in all material respects with all applicable
laws, ordinances, rules, regulations, and requirements of governmental
authorities (including, without limitation, Environmental Laws and ERISA and
the rules and regulations thereunder) except where the necessity of compliance
therewith is contested in good faith by appropriate proceedings.
SECTION 5.05. Leverage Ratio. The Leverage Ratio will not exceed
(i) 175% at any date prior to July 31, 1995 or (ii) 50% at any date on or after
July 31, 1995.
SECTION 5.06. Minimum Consolidated Tangible Net Worth.
Consolidated Tangible Net Worth will at no time be less than the Minimum
Compliance Level.
SECTION 5.07. Interest Coverage Ratio. The Interest Coverage
Ratio will not be less than (i) 300% for any period of four consecutive fiscal
quarters ending prior to July 31, 1995 or (ii) 350% for any period of four
consecutive fiscal quarters ending on or after July 31, 1995.
45
EXH. 4.1-50
<PAGE> 51
SECTION 5.08. Subsidiary Debt Limitation. The aggregate
outstanding amount of Debt of Subsidiaries (exclusive of (i) Debt secured by a
Lien permitted by clause (g) of Section 5.09 and (ii) Debt owing to the
Borrower or another Subsidiary) will at no time exceed $175,000,000.
SECTION 5.09. Negative Pledge. The Borrower will not, and will
not permit any Consolidated Subsidiary to, create, assume or suffer to exist
any Lien securing Debt on any asset now owned or hereafter acquired by it,
except:
(a) Liens existing on the date of this Agreement securing Debt
outstanding on the date of this Agreement in an aggregate principal amount
not exceeding $60,000,000;
(b) any Lien existing on the assets of any Person at the time
such Person becomes a Consolidated Subsidiary;
(c) any Lien on any asset securing Debt incurred or assumed for
the purpose of financing all or any part of the purchase price or cost of
construction of such asset, provided that such Lien attaches to such asset
within 270 days after the acquisition or completion of construction and
commencement of full operations thereof;
(d) any Lien on any asset of any Person existing at the time such
Person is acquired by, merged into or consolidated with the Borrower or a
Consolidated Subsidiary;
(e) any Lien existing on any asset prior to the acquisition
thereof by the Borrower or a Consolidated Subsidiary and not created in
contemplation of such acquisition;
(f) any Lien arising out of the refinancing, extension, renewal
or refunding of any Debt secured by any Lien permitted by any of the
foregoing clauses of this Section, provided that such Debt is not increased
and is not secured by any additional assets; and
(g) Liens on real property (and ancillary personalty) not
otherwise permitted by the foregoing clauses of this Section securing Debt
in an aggregate
46
EXH. 4.1-51
<PAGE> 52
principal amount at any time outstanding not to exceed $75,000,000.
SECTION 5.10. Consolidations, Mergers and Sales of Assets. The
Borrower will not (i) consolidate or merge with or into any other Person or
(ii) sell, lease or otherwise transfer, directly or indirectly, all or any
substantial part of the assets of the Borrower and its Subsidiaries, taken as a
whole, to any other Person; provided that the Borrower may merge with another
Person if the Borrower is the surviving corporation and, after giving effect
thereto, no Default exists.
SECTION 5.11. Limitation on Affiliate Transactions. The Borrower
will not, and will not permit any of its Subsidiaries to, enter into any
material transaction, including, without limitation, the purchase, sale or
exchange of property or assets or the rendering of any services, with any
Affiliate, except (i) a transaction in the ordinary course of business which is
upon terms no less favorable to the Borrower or such Subsidiary, as the case
may be, than it would obtain in a comparable transaction on an arm's length
basis with a Person not an Affiliate, (ii) a Dividend Payment permitted by
Sections 5.05 and 5.06 and (iii) the arrangements with Western Atlas Inc.
entered into in connection with the Spin-Off, as disclosed in the Registration
Statement on Form 10 of Western Atlas Inc., as filed with the Securities and
Exchange Commission on October 12, 1993, as amended on December 13, 1993,
copies of which have been delivered to each of the Banks.
ARTICLE VI
DEFAULTS
SECTION 6.01. Events of Default. If one or more of the following
events ("Events of Default") shall have occurred and be continuing:
(a) the Borrower (i) shall fail to pay when due any principal of
any Loan or (ii) shall fail to pay any interest on any Loan, any fees or
any other amount payable hereunder within five days after the due date
thereof;
47
EXH. 4.1-52
<PAGE> 53
(b) the Borrower shall fail to observe or perform any covenant
contained in Sections 5.05 through 5.11, inclusive;
(c) the Borrower shall fail to observe or perform any covenant or
agreement contained in this Agreement (other than those covered by clause
(a) or (b) above) for 30 days after written notice thereof has been given
to the Borrower by the Agent at the request of any Bank;
(d) any representation, warranty, certification or statement made
(or deemed made) by the Borrower in this Agreement or in any certificate,
financial statement or other document delivered pursuant to this Agreement
shall prove to have been incorrect in any material respect when made (or
deemed made) or delivered;
(e) the Borrower or any Subsidiary shall fail to make any payment
in respect of any Material Debt when due or within any applicable grace
period;
(f) any event or condition shall occur which results in the
acceleration of the maturity of any Material Debt or enables (with the
giving of appropriate notice if required) the holder of such Debt or any
Person acting on such holder's behalf to accelerate the maturity thereof;
(g) the Borrower or any Material Subsidiary shall commence a
voluntary case or other proceeding seeking liquidation, reorganization or
other relief with respect to itself or its debts under any bankruptcy,
insolvency or other similar law now or hereafter in effect or seeking the
appointment of a trustee, receiver, liquidator, custodian or other similar
official of it or any substantial part of its property, or shall consent to
any such relief or to the appointment of or taking possession by any such
official in an involuntary case or other proceeding commenced against it,
or shall make a general assignment for the benefit of creditors, or shall
fail generally to pay its debts as they become due, or shall take any
corporate action to authorize any of the foregoing;
48
EXH. 4.1-53
<PAGE> 54
(h) an involuntary case or other proceeding shall be commenced
against the Borrower or any Material Subsidiary seeking liquidation,
reorganization or other relief with respect to it or its debts under any
bankruptcy, insolvency or other similar law now or hereafter in effect or
seeking the appointment of a trustee, receiver, liquidator, custodian or
other similar official of it or any substantial part of its property, and
such involuntary case or other proceeding shall remain undismissed and
unstayed for a period of 60 days; or an order for relief shall be entered
against the Borrower or any Material Subsidiary under the federal
bankruptcy laws as now or hereafter in effect;
(i) any member of the ERISA Group shall fail to pay when due an
amount or amounts aggregating in excess of $10,000,000 which it shall have
become liable to pay under Title IV of ERISA; or notice of intent to
terminate a Material Plan shall be filed under Title IV of ERISA by any
member of the ERISA Group, any plan administrator or any combination of the
foregoing; or the PBGC shall institute proceedings under Title IV of ERISA
to terminate, to impose liability (other than for premiums under Section
4007 of ERISA) in respect of, or to cause a trustee to be appointed to
administer, any Material Plan; or a condition shall exist by reason of
which the PBGC would be entitled to obtain a decree adjudicating that any
Material Plan must be terminated; or there shall occur a complete or
partial withdrawal from, or a default, within the meaning of Section
4219(c)(5) of ERISA, with respect to, one or more Multiemployer Plans which
could cause one or more members of the ERISA Group to incur a current
payment obligation in excess of $10,000,000;
(j) a judgment or order for the payment of money in excess of
$10,000,000 shall be rendered against the Borrower or any Material
Subsidiary and such judgment or order shall continue unsatisfied and
unstayed for a period of 30 days; or
(k) a Change of Control shall occur;
then, and in every such event, the Agent shall (i) if requested by Banks having
more than 50% in aggregate amount of the Commitments, by notice to the Borrower
terminate the Commitments and they shall thereupon terminate, and (ii) if
49
EXH. 4.1-54
<PAGE> 55
requested by Banks holding Notes evidencing more than 50% in aggregate
principal amount of the Loans, by notice to the Borrower declare the Notes
(together with accrued interest thereon) to be, and the Notes (together with
accrued interest thereon) shall thereupon become, immediately due and payable
without presentment, demand, protest or other notice of any kind, all of which
are hereby waived by the Borrower; provided that in the case of any of the
Events of Default specified in clause (g) or (h) above with respect to the
Borrower, without any notice to the Borrower or any other act by the Agent or
any Bank, the Commitments shall thereupon terminate and the Notes (together
with accrued interest thereon) shall become immediately due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrower.
SECTION 6.02. Notice of Default. The Agent shall give notice to
the Borrower under Section 6.01(c) promptly upon being requested to do so by
any Bank and shall thereupon notify all the Banks thereof.
ARTICLE VII
THE AGENT
SECTION 7.01. Appointment and Authorization. Each Bank
irrevocably appoints and authorizes the Agent to take such action as agent on
its behalf and to exercise such powers under this Agreement and the Notes as
are delegated to the Agent by the terms hereof or thereof, together with all
such powers as are reasonably incidental thereto.
SECTION 7.02. Agent and Affiliates. Morgan Guaranty Trust
Company of New York shall have the same rights and powers under this Agreement
as any other Bank and may exercise or refrain from exercising the same as
though it were not the Agent, and Morgan Guaranty Trust Company of New York and
its affiliates may accept deposits from, lend money to, and generally engage in
any kind of business with the Borrower or any Subsidiary or Affiliate of the
Borrower as if it were not the Agent hereunder.
SECTION 7.03. Action by Agent. The obligations of the Agent
hereunder are only those expressly set forth herein. Without limiting the
generality of the foregoing, the Agent shall not be required to take any action
with
50
EXH. 4.1-55
<PAGE> 56
respect to any Default, except as expressly provided in Article VI.
SECTION 7.04. Consultation with Experts. The Agent may consult
with legal counsel (who may be counsel for the Borrower), independent public
accountants and other experts selected by it and shall not be liable for any
action taken or omitted to be taken by it in good faith in accordance with the
advice of such counsel, accountants or experts.
SECTION 7.05. Liability of Agent. Neither the Agent nor any of
its affiliates nor any of the directors, officers, agents or employees of the
foregoing shall be liable for any action taken or not taken by it or them in
connection herewith (i) with the consent or at the request of the Required
Banks or (ii) in the absence of its or their own gross negligence or willful
misconduct. Neither the Agent nor any of its affiliates nor any of the
directors, officers, agents or employees of the foregoing shall be responsible
for or have any duty to ascertain, inquire into or verify (i) any statement,
warranty or representation made in connection with this Agreement or any
borrowing hereunder; (ii) the performance or observance of any of the covenants
or agreements of the Borrower; (iii) the satisfaction of any condition
specified in Article III, except receipt of items required to be delivered to
the Agent; or (iv) the validity, effectiveness or genuineness of this
Agreement, the Notes or any other instrument or writing furnished in connection
herewith. The Agent shall not incur any liability by acting in reliance upon
any notice, consent, certificate, statement, or other writing (which may be a
bank wire, telex or similar writing) believed by it to be genuine or to be
signed by the proper party or parties.
SECTION 7.06. Indemnification. Each Bank shall, ratably in
accordance with its Commitment, indemnify the Agent, its affiliates and their
respective directors, officers, agents and employees (to the extent not
reimbursed by the Borrower) against any cost, expense (including counsel fees
and disbursements), claim, demand, action, loss or liability (except such as
result from such indemnitees' gross negligence or willful misconduct) that such
indemnitees may suffer or incur in connection with this Agreement or any action
taken or omitted by such indemnitees hereunder.
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EXH. 4.1-56
<PAGE> 57
SECTION 7.07. Credit Decision. Each Bank acknowledges that it
has, independently and without reliance upon the Agent or any other Bank, and
based on such documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Agreement. Each Bank also
acknowledges that it will, independently and without reliance upon the Agent or
any other Bank, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking any action under this Agreement.
SECTION 7.08. Successor Agent. The Agent may resign at any time
by giving notice thereof to the Banks and the Borrower. Upon any such
resignation, the Required Banks shall have the right to appoint a successor
Agent, subject to the approval of the Borrower. If no successor Agent shall
have been so appointed by the Required Banks, with the approval of the
Borrower, and shall have accepted such appointment, within 30 days after the
retiring Agent gives notice of resignation, then the retiring Agent may, on
behalf of the Banks, appoint a successor Agent, which shall be a Bank, if any
Bank is willing to accept such appointment, and in any event shall be a
commercial bank organized or licensed under the laws of the United States of
America or of any State thereof and having a combined capital and surplus of at
least $50,000,000. Upon the acceptance of its appointment as Agent hereunder
by a successor Agent, such successor Agent shall thereupon succeed to and
become vested with all the rights and duties of the retiring Agent, and the
retiring Agent shall be discharged from its duties and obligations hereunder.
After any retiring Agent's resignation hereunder as Agent, the provisions of
this Article shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was Agent.
SECTION 7.09. Agent's Fees. The Borrower shall pay to the Agent
for its own account fees in the amounts and at the times previously agreed upon
between the Borrower and the Agent.
SECTION 7.10. Co-Agent. Nothing in this Agreement shall impose
upon the Co-Agent, in such capacity, any duty or responsibility whatsoever.
ARTICLE VIII
52
EXH. 4.1-57
<PAGE> 58
CHANGE IN CIRCUMSTANCES
SECTION 8.01. Basis for Determining Interest Rate Inadequate or
Unfair. If on or prior to the first day of any Interest Period for any Fixed
Rate Borrowing:
(a) the Agent is advised by the Reference Banks that deposits in
dollars (in the applicable amounts) are not being offered to the Reference
Banks in the relevant market for such Interest Period, or
(b) in the case of a Committed Borrowing, Banks having 50% or
more of the aggregate amount of the Commitments advise the Agent that the
Adjusted CD Rate or the London Interbank Offered Rate, as the case may be,
as determined by the Agent will not adequately and fairly reflect the cost
to such Banks of funding their CD Loans or Euro-Dollar Loans, as the case
may be, for such Interest Period,
the Agent shall forthwith give notice thereof to the Borrower and the Banks,
whereupon until the Agent notifies the Borrower that the circumstances giving
rise to such suspension no longer exist, the obligations of the Banks to make
CD Loans or Euro-Dollar Loans, as the case may be, shall be suspended. Unless
the Borrower notifies the Agent at least two Domestic Business Days before the
date of any Fixed Rate Borrowing for which a Notice of Borrowing has previously
been given that it elects not to borrow on such date, (i) if such Fixed Rate
Borrowing is a Committed Borrowing, such Borrowing shall instead be made as a
Base Rate Borrowing and (ii) if such Fixed Rate Borrowing is a Money Market
LIBOR Borrowing, the Money Market LIBOR Loans comprising such Borrowing shall
bear interest for each day from and including the first day to but excluding
the last day of the Interest Period applicable thereto at the Base Rate for
such day.
SECTION 8.02. Illegality. If, on or after the date of this
Agreement, the adoption of any applicable law, rule or regulation, or any
change in any applicable law, rule or regulation, or any change in the
interpretation or administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by any Bank (or its Euro-Dollar Lending Office) with any
53
EXH. 4.1-58
<PAGE> 59
request or directive (whether or not having the force of law) of any such
authority, central bank or comparable agency shall make it unlawful or
impossible for any Bank (or its Euro-Dollar Lending Office) to make, maintain
or fund its Euro-Dollar Loans and such Bank shall so notify the Agent, the
Agent shall forthwith give notice thereof to the other Banks and the Borrower,
whereupon until such Bank notifies the Borrower and the Agent that the
circumstances giving rise to such suspension no longer exist, the obligation of
such Bank to make Euro-Dollar Loans shall be suspended. Before giving any
notice to the Agent pursuant to this Section 8.02, such Bank shall designate a
different Euro-Dollar Lending Office if such designation will avoid the need
for giving such notice and will not, in the judgment of such Bank, be otherwise
disadvantageous to such Bank. If such Bank shall determine that it may not
lawfully continue to maintain and fund any of its outstanding Euro-Dollar Loans
to maturity and shall so specify in such notice, the Borrower shall immediately
prepay in full the then outstanding principal amount of each such Euro-Dollar
Loan, together with accrued interest thereon. Concurrently with prepaying each
such Euro-Dollar Loan, the Borrower shall borrow a Base Rate Loan in an equal
principal amount from such Bank (on which interest and principal shall be
payable contemporaneously with the related Euro-Dollar Loans of the other
Banks), and such Bank shall make such a Base Rate Loan.
SECTION 8.03. Increased Cost and Reduced Return. (a) If on or
after (x) the date hereof, in the case of any Committed Loan or any obligation
to make Committed Loans or (y) the date of the related Money Market Quote, in
the case of any Money Market Loan, the adoption of any applicable law, rule or
regulation, or any change in any applicable law, rule or regulation, or any
change in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Bank (or its Applicable Lending
Office) with any request or directive (whether or not having the force of law)
of any such authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Bank (or its
Applicable Lending Office) with any request or directive (whether or not having
the force of law) of any such authority, central bank or comparable agency
shall impose, modify or deem applicable any reserve (including, without
limitation, any such requirement imposed by the Board of Governors of the
Federal
54
EXH. 4.1-59
<PAGE> 60
Reserve System, but excluding (i) with respect to any CD Loan any such
requirement included in an applicable Domestic Reserve Percentage and (ii) with
respect to any Euro-Dollar Loan any such requirement with respect to which such
Bank is entitled to compensation during the relevant Interest Period under
Section 2.15), special deposit, insurance assessment (excluding, with respect
to any CD Loan, any such requirement reflected in an applicable Assessment
Rate) or similar requirement against assets of, deposits with or for the
account of, or credit extended by, any Bank (or its Applicable Lending Office)
or shall impose on any Bank (or its Applicable Lending Office) or on the United
States market for certificates of deposit or the London interbank market any
other condition affecting its Fixed Rate Loans, its Note or its obligation to
make Fixed Rate Loans and the result of any of the foregoing is to increase the
cost to such Bank (or its Applicable Lending Office) of making or maintaining
any Fixed Rate Loan, or to reduce the amount of any sum received or receivable
by such Bank (or its Applicable Lending Office) under this Agreement or under
its Note with respect thereto, by an amount deemed by such Bank to be material,
then, within 15 days after demand by such Bank (with a copy to the Agent), the
Borrower shall pay to such Bank such additional amount or amounts as will
compensate such Bank for such increased cost or reduction.
(b) If any Bank shall have determined that, after the date
hereof, the adoption of any applicable law, rule or regulation regarding
capital adequacy, or any change in any such law, rule or regulation, or any
change in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the interpretation or
administration thereof, or any request or directive regarding capital adequacy
(whether or not having the force of law) of any such authority, central bank or
comparable agency, has or would have the effect of reducing the rate of return
on capital of such Bank (or its Parent) as a consequence of such Bank's
obligations hereunder to a level below that which such Bank (or its Parent)
could have achieved but for such adoption, change, request or directive (taking
into consideration its policies with respect to capital adequacy) by an amount
deemed by such Bank to be material, then from time to time, within 15 days
after demand by such Bank (with a copy to the Agent), the Borrower shall pay to
such Bank such additional amount or amounts as will compensate such Bank (or
its Parent) for such reduction; provided that the Borrower shall not be liable
for any such amounts attributable to a period more
55
EXH. 4.1-60
<PAGE> 61
than three months prior to the date of notice by such Bank to the Borrower of
its intention to seek compensation under this subsection (b).
(c) Each Bank will promptly notify the Borrower and the Agent of
any event of which it has knowledge, occurring after the date hereof, which
will entitle such Bank to compensation pursuant to this Section and will
designate a different Applicable Lending Office if such designation will avoid
the need for, or reduce the amount of, such compensation and will not, in the
judgment of such Bank, be otherwise disadvantageous to such Bank. A
certificate of any Bank claiming compensation under this Section, setting forth
the additional amount or amounts to be paid to it hereunder and the basis of
calculation thereof, shall be conclusive in the absence of manifest error. In
determining such amount, such Bank may use any reasonable averaging and
attribution methods.
SECTION 8.04. Taxes. (a) Any and all payments by the Borrower to
or for the account of any Bank or the Agent hereunder or under any Note shall
be made free and clear of and without deduction for any and all present or
future taxes, duties, levies, imposts, deductions, charges and withholdings,
and all liabilities with respect thereto, excluding, in the case of each Bank
and the Agent, taxes imposed on its income, and franchise taxes imposed on it,
by the jurisdiction under the laws of which such Bank or the Agent (as the case
may be) is organized or any political subdivision thereof and, in the case of
each Bank, taxes imposed on its income, and franchise or similar taxes imposed
on it, by the jurisdiction of such Bank's Applicable Lending Office or any
political subdivision thereof (all such non-excluded taxes, duties, levies,
imposts, deductions, charges, withholdings and liabilities being hereinafter
referred to as "Taxes"). If the Borrower shall be required by law to deduct
any Taxes from or in respect of any sum payable hereunder or under any Note to
any Bank or the Agent, (i) the sum payable shall be increased as necessary so
that after making all required deductions (including deductions applicable to
additional sums payable under this Section 8.04) such Bank or the Agent (as the
case may be) receives an amount equal to the sum it would have received had no
such deductions been made, (ii) the Borrower shall make such deductions, (iii)
the Borrower shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable law and (iv) the
Borrower shall furnish to the Agent, at its address
56
EXH. 4.1-61
<PAGE> 62
referred to in Section 9.01, the original or a certified copy of a receipt
evidencing payment thereof.
(b) In addition, the Borrower agrees to pay any present or future
stamp or documentary taxes and any other excise or property taxes, or charges
or similar levies which arise from any payment made hereunder or under any Note
or from the execution or delivery of, or otherwise with respect to, this
Agreement or any Note (hereinafter referred to as "Other Taxes").
(c) The Borrower agrees to indemnify each Bank and the Agent for
the full amount of Taxes and Other Taxes (including, without limitation, any
Taxes and Other Taxes imposed or asserted by any jurisdiction on amounts
payable under this Section 8.04) paid by such Bank or the Agent (as the case
may be) and any liability (including penalties, interest and expenses) arising
therefrom or with respect thereto. This indemnification shall be made within
15 days from the date such Bank or the Agent (as the case may be) makes demand
therefor.
(d) Each Bank organized under the laws of a jurisdiction outside
the United States, on or prior to the date of its execution and delivery of
this Agreement in the case of each Bank listed on the signature pages hereof
and on or prior to the date on which it becomes a Bank in the case of each
other Bank, and from time to time thereafter if requested in writing by the
Borrower (but only so long as such Bank remains lawfully able to do so), shall
provide the Borrower with Internal Revenue Service form 1001 or 4224, as
appropriate, or any successor form prescribed by the Internal Revenue Service,
certifying that such Bank is entitled to benefits under an income tax treaty to
which the United States is a party which reduces the rate of withholding tax on
payments of interest or certifying that the income receivable pursuant to this
Agreement is effectively connected with the conduct of a trade or business in
the United States. If the form provided by a Bank at the time such Bank first
becomes a party to this Agreement indicates a United States interest
withholding tax rate in excess of zero, withholding tax at such rate shall be
considered excluded from "Taxes" as defined in Section 8.04(a).
(e) For any period with respect to which a Bank has failed to
provide the Borrower with the form required pursuant to Section 8.04(d), if any
(unless such failure is
57
EXH. 4.1-62
<PAGE> 63
due to a change in treaty, law or regulation occurring subsequent to the date
on which a form originally was required to be provided), such Bank shall not be
entitled to indemnification under Section 8.04(a) with respect to Taxes imposed
by the United States; provided, however, that should a Bank, which is otherwise
exempt from or subject to a reduced rate of withholding tax, become subject to
Taxes because of its failure to deliver a form required hereunder, the Borrower
shall take such steps as such Bank shall reasonably request to assist such Bank
to recover such Taxes.
(f) If the Borrower is required to pay additional amounts to or
for the account of any Bank pursuant to this Section 8.04, then such Bank will
change the jurisdiction of its Applicable Lending Office so as to eliminate or
reduce any such additional payment which may thereafter accrue if such change,
in the judgment of such Bank, is not otherwise disadvantageous to such Bank.
SECTION 8.05. Base Rate Loans Substituted for Affected Fixed Rate
Loans. If (i) the obligation of any Bank to make Euro-Dollar Loans has been
suspended pursuant to Section 8.02 or (ii) any Bank has demanded compensation
under Section 8.03 or 8.04 with respect to its CD Loans or Euro-Dollar Loans
and the Borrower shall, by at least five Euro-Dollar Business Days' prior
notice to such Bank through the Agent, have elected that the provisions of this
Section shall apply to such Bank, then, unless and until such Bank notifies the
Borrower that the circumstances giving rise to such suspension or demand for
compensation no longer exist:
(a) all Loans which would otherwise be made by such Bank as CD
Loans or Euro-Dollar Loans, as the case may be, shall be made instead as
Base Rate Loans (on which interest and principal shall be payable
contemporaneously with the related Fixed Rate Loans of the other Banks),
and
(b) after each of its CD Loans or Euro-Dollar Loans, as the case
may be, has been repaid, all payments of principal which would otherwise be
applied to repay such Fixed Rate Loans shall be applied to repay its Base
Rate Loans instead.
SECTION 8.06. Substitution of Bank. If (i) the obligation of any
Bank to make Euro-Dollar Loans has been
58
EXH. 4.1-63
<PAGE> 64
suspended pursuant to Section 8.02 or (ii) any Bank has demanded compensation
under Section 8.03 or 8.04, the Borrower shall have the right, with the
assistance of the Agent, to seek a mutually satisfactory substitute bank or
banks (which may be one or more of the Banks) to purchase the Note and assume
the Commitment of such Bank.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Notices. All notices, requests and other
communications to any party hereunder shall be in writing (including bank wire,
telex, facsimile transmission or similar writing) and shall be given to such
party: (x) in the case of the Borrower or the Agent, at its address or
facsimile or telex number set forth on the signature pages hereof, (y) in the
case of any Bank, at its address or facsimile or telex number set forth in its
Administrative Questionnaire or (z) in the case of any party, such other
address or facsimile or telex number as such party may hereafter specify for
the purpose by notice to the Agent and the Borrower. Each such notice, request
or other communication shall be effective (i) if given by telex, when such
telex is transmitted to the telex number specified in this Section and the
appropriate answerback is received, (ii) if given by mail, 72 hours after such
communication is deposited in the mails with first class postage prepaid,
addressed as aforesaid or (iii) if given by any other means, when delivered at
the address specified in this Section; provided that notices to the Agent under
Article II or Article VIII shall not be effective until received.
SECTION 9.02. No Waivers. No failure or delay by the Agent or
any Bank in exercising any right, power or privilege hereunder or under any
Note shall operate as a waiver thereof nor shall any single or partial exercise
thereof preclude any other or further exercise thereof or the exercise of any
other right, power or privilege. The rights and remedies herein provided shall
be cumulative and not exclusive of any rights or remedies provided by law.
SECTION 9.03. Expenses; Indemnification. (a) The Borrower shall
pay (i) all out-of-pocket expenses of the Agent, including fees and
disbursements of special counsel for the Agent, in connection with the
preparation and
59
EXH. 4.1-64
<PAGE> 65
administration of this Agreement, any waiver or consent hereunder or any
amendment hereof or any Default or alleged Default hereunder and (ii) if an
Event of Default occurs, all out-of-pocket expenses incurred by the Agent or
any Bank, including fees and disbursements of outside counsel (or, in lieu
thereof, the allocated cost of in-house counsel), in connection with such Event
of Default and collection, bankruptcy, insolvency and other enforcement
proceedings resulting therefrom.
(b) The Borrower agrees to indemnify the Agent and each Bank,
their respective affiliates and the respective directors, officers, agents and
employees of the foregoing (each an "Indemnitee") and hold each Indemnitee
harmless from and against any and all liabilities, losses, damages, costs and
expenses of any kind, including, without limitation, the reasonable fees and
disbursements of counsel, which may be incurred by such Indemnitee in
connection with any investigative, administrative or judicial proceeding
(whether or not such Indemnitee shall be designated a party thereto) brought or
threatened relating to or arising out of this Agreement or any actual or
proposed use of proceeds of Loans hereunder; provided that no Indemnitee shall
have the right to be indemnified hereunder for such Indemnitee's own gross
negligence or willful misconduct.
SECTION 9.04. Sharing of Set-Offs. Each Bank agrees that if it
shall, by exercising any right of set-off or counterclaim or otherwise, receive
payment of a proportion of the aggregate amount of principal and interest due
with respect to any Note held by it which is greater than the proportion
received by any other Bank in respect of the aggregate amount of principal and
interest due with respect to any Note held by such other Bank, the Bank
receiving such proportionately greater payment shall purchase such
participations in the Notes held by the other Banks, and such other adjustments
shall be made, as may be required so that all such payments of principal and
interest with respect to the Notes held by the Banks shall be shared by the
Banks pro rata; provided that nothing in this Section shall impair the right of
any Bank to exercise any right of set-off or counterclaim it may have and to
apply the amount subject to such exercise to the payment of indebtedness of the
Borrower other than its indebtedness under the Notes. The Borrower agrees, to
the fullest extent it may effectively do so under applicable law, that any
holder of a participation in a Note, whether or not acquired pursuant to
60
EXH. 4.1-65
<PAGE> 66
the foregoing arrangements, may exercise rights of set-off or counterclaim and
other rights with respect to such participation as fully as if such holder of a
participation were a direct creditor of the Borrower in the amount of such
participation.
SECTION 9.05. Amendments and Waivers. Any provision of this
Agreement or the Notes may be amended or waived if, but only if, such amendment
or waiver is in writing and is signed by the Borrower and the Required Banks
(and, if the rights or duties of the Agent or Co-Agent are affected thereby, by
the Agent or Co-Agent); provided that no such amendment or waiver shall, unless
signed by all the Banks, (i) increase or decrease the Commitment of any Bank
(except for a ratable decrease in the Commitments of all Banks) or subject any
Bank to any additional obligation, (ii) reduce the principal of, accrued
interest on or rate of interest on any Loan or any fees hereunder, (iii)
postpone the date fixed for any payment of principal of or interest on any Loan
or any fees hereunder or for any reduction or termination of any Commitment or
(iv) change the percentage of the Commitments or of the aggregate unpaid
principal amount of the Notes, or the number of Banks, which shall be required
for the Banks or any of them to take any action under this Section or any other
provision of this Agreement.
SECTION 9.06. Successors and Assigns. (a) The provisions of
this Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns, except that the Borrower
may not assign or otherwise transfer any of its rights under this Agreement
without the prior written consent of all Banks.
(b) Any Bank may at any time grant to one or more banks or other
institutions (each a "Participant") participating interests in up to 45% of its
Commitment or in any or all of its Loans. In the event of any such grant by a
Bank of a participating interest to a Participant, whether or not upon notice
to the Borrower and the Agent, such Bank shall remain responsible for the
performance of its obligations hereunder, and the Borrower and the Agent shall
continue to deal solely and directly with such Bank in connection with such
Bank's rights and obligations under this Agreement. Any agreement pursuant to
which any Bank may grant such a participating interest shall provide that such
Bank shall retain the sole right and responsibility to enforce the obligations
of the Borrower hereunder including, without limitation, the right to approve
any amendment,
61
EXH. 4.1-66
<PAGE> 67
modification or waiver of any provision of this Agreement; provided that such
participation agreement may provide that such Bank will not agree to any
modification, amendment or waiver of this Agreement described in clause (i),
(ii) or (iii) of Section 9.05 without the consent of the Participant. The
Borrower agrees that each Participant shall, to the extent provided in its
participation agreement, be entitled to the benefits of Section 2.15 and
Article VIII with respect to its participating interest. An assignment or
other transfer which is not permitted by subsection (c) or (d) below shall be
given effect for purposes of this Agreement only to the extent of a
participating interest granted in accordance with this subsection (b).
(c) Any Bank may at any time assign to one or more banks or other
institutions (each an "Assignee") all, or a proportionate part (equivalent to a
Commitment of not less than $5,000,000) of all, of its rights and obligations
under this Agreement and the Notes, and such Assignee shall assume such rights
and obligations, pursuant to an Assignment and Assumption Agreement in
substantially the form of Exhibit G hereto executed by such Assignee and such
transferor Bank, with (and subject to) the subscribed consent of the Borrower
and the Agent; provided that if an Assignee is an affiliate of such transferor
Bank, no such consent shall be required; provided further that such assignment
may, but need not, include rights of the transferor Bank in respect of
outstanding Money Market Loans; and provided further that if an Assignee is
another Bank, such consent shall not be unreasonably withheld. Upon execution
and delivery of such instrument and payment by such Assignee to such transferor
Bank of an amount equal to the purchase price agreed between such transferor
Bank and such Assignee, such Assignee shall be a Bank party to this Agreement
and shall have all the rights and obligations of a Bank with a Commitment as
set forth in such instrument of assumption, and the transferor Bank shall be
released from its obligations hereunder to a corresponding extent, and no
further consent or action by any party shall be required. Upon the
consummation of any assignment pursuant to this subsection (c), the transferor
Bank, the Agent and the Borrower shall make appropriate arrangements so that,
if required, a new Note is issued to the Assignee. In connection with any such
assignment, the transferor Bank shall pay to the Agent an administrative fee
for processing such assignment in the amount of $2,500. If the Assignee is not
incorporated under the laws of the United States of
62
EXH. 4.1-67
<PAGE> 68
America or a state thereof, it shall deliver to the Borrower and the Agent
certification as to exemption from deduction or withholding of any United
States federal income taxes in accordance with Section 8.04.
(d) Any Bank may at any time assign all or any portion of its
rights under this Agreement and its Note to a Federal Reserve Bank. No such
assignment shall release the transferor Bank from its obligations hereunder.
(e) No Assignee, Participant or other transferee of any Bank's
rights shall be entitled to receive any greater payment under Section 8.03 or
8.04 than such Bank would have been entitled to receive with respect to the
rights transferred, unless such transfer is made with the Borrower's prior
written consent or by reason of the provisions of Section 8.02, 8.03 or 8.04
requiring such Bank to designate a different Applicable Lending Office under
certain circumstances.
SECTION 9.07. Collateral. Each of the Banks represents to the
Agent and each of the other Banks that it in good faith is not relying upon any
"margin stock" (as defined in Regulation U) as collateral in the extension or
maintenance of the credit provided for in this Agreement.
SECTION 9.08. Governing Law; Submission to Jurisdiction. This
Agreement and each Note shall be governed by and construed in accordance with
the laws of the State of New York. The Borrower hereby submits to the
nonexclusive jurisdiction of the United States District Court for the Southern
District of New York and of any New York State court sitting in New York City
for purposes of all legal proceedings arising out of or relating to this
Agreement, the Notes or the transactions contemplated hereby. The Borrower
irrevocably waives, to the fullest extent permitted by law, any objection which
it may now or hereafter have to the laying of the venue of any such proceeding
brought in such a court and any claim that any such proceeding brought in such
a court has been brought in an inconvenient forum.
SECTION 9.09. Counterparts; Integration. This Agreement may be
signed in any number of counterparts, each of which shall be an original, with
the same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement constitutes the entire agreement and understanding
among the parties hereto and supersedes
63
EXH. 4.1-68
<PAGE> 69
any and all prior agreements and understandings, oral or written, relating to
the subject matter hereof.
SECTION 9.10. WAIVER OF JURY TRIAL. EACH OF THE BORROWER, THE
AGENT, THE CO-AGENT AND THE BANKS HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT
TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT, THE NOTES OR THE TRANSACTIONS CONTEMPLATED HEREBY.
64
EXH. 4.1-69
<PAGE> 70
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed by their respective authorized officers as of the day and
year first above written.
LITTON INDUSTRIES, INC.
By: /s/ Carol A. Wiesner
___________________________________
Title: Vice President and Treasurer
360 North Crescent Drive
Beverly Hills, California 90210
Telex number: 674991
Telecopy number: (310) 859-5940
65
EXH. 4.1-70
<PAGE> 71
<TABLE>
<CAPTION>
Commitments
- - -----------
<S> <C>
$22,000,000 MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By: /s/ Diana S. Imhof
___________________________
Title: Associate
$18,000,000 J.P. MORGAN DELAWARE
By: /s/ Robert S. Ward
___________________________
Title: Vice President
$20,000,000 WELLS FARGO BANK, N.A.
By: /s/ David A. Neumann
___________________________
Title: Vice President
$30,000,000 BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION
By: /s/ Lori Y. Kannegieter
____________________________
Title: Vice President
$30,000,000 THE BANK OF NEW YORK
By: /s/ Craig J. Rethmeyer
____________________________
Title: Vice President
$30,000,000 CHEMICAL BANK
</TABLE>
66
EXH. 4.1-71
<PAGE> 72
<TABLE>
<S> <C>
By: /s/ Elaine D. Grant
_______________________________
Title: Vice President
$30,000,000 CONTINENTAL BANK N.A.
By: /s/ Hetty E. Harlan
_______________________________
Title: Managing Director
$30,000,000 UNION BANK OF SWITZERLAND,
Los Angeles Branch
By: /s/ James I. Chu
________________________________
Title: Assistant Vice President
By: /s/ Patrick J. McKenna
________________________________
Title: Vice President
$20,000,000 THE BANK OF NOVA SCOTIA
By: /s/ Suzanne L. Baird
________________________________
Title: Representative
By: /s/ Maartin Van Otterloo
________________________________
Title: Vice President
$20,000,000 CIBC INC.
By: /s/ Robert J. Wagner
_______________________________
Title: Vice President
$20,000,000 CREDIT SUISSE
</TABLE>
67
EXH. 4.1-72
<PAGE> 73
<TABLE>
<S> <C>
By: /s/ Marilou Palenzuela
__________________________________
Title: Member of Senior Management
By: /s/ Sarah U. Johnston
__________________________________
Title: Associate
$20,000,000 DRESDNER BANK AG
By: /s/ Jon M. Bland
__________________________________
Title: Senior Vice President
By: /s/ Sidney S. Jordan
_________________________________
Title: Vice President
$20,000,000 MELLON BANK, N.A.
By: /s/ V. Charles Jackson
________________________________
Title: Senior Vice President
$20,000,000 NATIONSBANK OF TEXAS, N.A.
By: /s/ Tom S. Scharfenberg
________________________________
Title: Vice President
$20,000,000 SWISS BANK CORPORATION,
San Francisco Branch
By: /s/ David L. Parrot
________________________________
Title: Associate Director,
Merchant Banking
By: /s/ Hans-Ueli Surber
________________________________
Title: Executive Director,
Merchant Banking
</TABLE>
68
EXH. 4.1-73
<PAGE> 74
<TABLE>
<S> <C>
$10,000,000 BANK OF HAWAII
By: /s/ Joseph Donalson
_______________________________
Title: Vice President
$10,000,000 FIRST INTERSTATE BANK OF
CALIFORNIA
By: /s/ Daniel H. Hom
_______________________________
Title: Vice President
$10,000,000 NBD BANK, N.A.
By: /s/ Jack J. Csernits
_______________________________
Title: Vice President
$10,000,000 THE NORTHERN TRUST COMPANY
By: /s/ Martin G. Alston
______________________________
Title: Vice President
$10,000,000 TORONTO DOMINION (TEXAS), INC.
By: /s/ Warran Finlay
_____________________________
Title: Vice President
- - -----------------
Total Commitments
$400,000,000
- - -----------------
- - -----------------
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Agent
</TABLE>
69
EXH. 4.1-74
<PAGE> 75
<TABLE>
<C> <S>
By: /s/ Diana H. Imhof
______________________________
Title: Associate
60 Wall Street
New York, New York 10260-0060
Attention: Robert M. Osieski
Telex number: 177615
WELLS FARGO BANK, N.A.,
as Co-Agent
By: /s/ David A. Neumann
_______________________________
Title: Vice President
420 Montgomery Street
San Francisco, California 94163
Telex number: 184904
</TABLE>
70
EXH. 4.1-75
<PAGE> 76
EXHIBIT A
NOTE
New York, New York
[Date]
For value received, Litton Industries, Inc. a Delaware corporation
(the "Borrower"), promises to pay to the order of (the "Bank"), for the account
of its Applicable Lending Office, the unpaid principal amount of each Loan
made by the Bank to the Borrower pursuant to the Credit Agreement referred to
below on the last day of the Interest Period relating to such Loan. The
Borrower promises to pay interest on the unpaid principal amount of each
such Loan on the dates and at the rate or rates provided for in the Credit
Agreement. All such payments of principal and interest shall be made in
lawful money of the United States in Federal or other immediately available
funds at the office of Morgan Guaranty Trust Company of New York, 60 Wall
Street, New York, New York.
All Loans made by the Bank, the respective types and maturities
thereof and all repayments of the principal thereof shall be recorded by the
Bank and, if the Bank so elects in connection with any transfer or enforcement
hereof, appropriate notations to evidence the foregoing information with
respect to each such Loan then outstanding may be endorsed by the Bank on the
schedule attached hereto, or on a continuation of such schedule attached to and
made a part hereof; provided that the failure of the Bank to make any such
recordation or endorsement shall not affect the obligations of the Borrower
hereunder or under the Credit Agreement.
This note is one of the Notes referred to in the Credit Agreement
dated as of December 23, 1993 among the Borrower, the banks parties thereto and
Morgan Guaranty Trust Company of New York, as Agent, and Wells Fargo Bank,
N.A., as Co-Agent (as the same may be amended from time to time, the "Credit
Agreement"). Terms defined in the Credit Agreement are used herein with the
same meanings. Reference is made to the Credit Agreement for provisions for
the prepayment hereof and the acceleration of the maturity hereof.
LITTON INDUSTRIES, INC.
1
EXH. 4.1-76
<PAGE> 77
By ________________________
Title:
2
EXH. 4.1-77
<PAGE> 78
Note (cont'd)
<TABLE>
<CAPTION>
LOANS AND PAYMENTS OF PRINCIPAL
- - ------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Amount of
Amount of Type of Principal Maturity Notation
Date Loan Loan Repaid Date Made By
- - ------------------------------------------------------------------
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
</TABLE>
3
EXH. 4.1-78
<PAGE> 79
EXHIBIT B
FORM OF MONEY MARKET QUOTE REQUEST
[Date]
To: Morgan Guaranty Trust Company of New York
From: Litton Industries, Inc.
Re: Credit Agreement (as amended from time to time, the "Credit
Agreement") dated as of December 23, 1993 among the Borrower, the
Banks parties thereto and Morgan Guaranty Trust Company of New
York, as Agent, and Wells Fargo Bank, N.A., as Co-Agent
We hereby give notice pursuant to Section 2.03 of the Credit
Agreement that we request Money Market Quotes for the following proposed Money
Market Borrowing(s):
Date of Borrowing: __________________
Principal Amount(2) Interest Period(3)
- - ------------------- ------------------
$
Such Money Market Quotes should offer a Money Market [Margin]
[Absolute Rate]. [The applicable base rate is the London Interbank Offered
Rate.]
Terms used herein have the meanings assigned to them in the Credit
Agreement.
____________________
(2)Amount must be $15,000,000 or a larger multiple of $1,000,000.
(3)Not less than one month (LIBOR Auction) or not less than 14
days (Absolute Rate Auction), subject to the provisions of the
definition of Interest Period.
1
EXH. 4.1-79
<PAGE> 80
LITTON INDUSTRIES, INC.
By ________________________
Title:
EXHIBIT C
FORM OF INVITATION FOR MONEY MARKET QUOTES
To: [Name of Bank]
Re: Invitation for Money Market Quotes
to Litton Industries, Inc. (the
"Borrower")
Pursuant to Section 2.03 of the Credit Agreement (as amended from
time to time, the "Credit Agreement") dated as of December 23, 1993 among the
Borrower, the Banks parties thereto and the undersigned, as Agent, and Wells
Fargo Bank, N.A., as Co- Agent, we are pleased on behalf of the Borrower to
invite you to submit Money Market Quotes to the Borrower for the following
proposed Money Market Borrowing(s):
Date of Borrowing: __________________
Principal Amount Interest Period
- - ---------------- ---------------
$
Such Money Market Quotes should offer a Money Market [Margin]
[Absolute Rate]. [The applicable base rate is the London Interbank Offered
Rate.]
Please respond to this invitation by no later than [2:00 P.M.]
[9:15 A.M.] (New York City time) on [date].
Terms used herein have the meanings assigned to them in the Credit
Agreement.
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
2
EXH. 4.1-80
<PAGE> 81
By ______________________
Authorized Officer
2
EXH. 4.1-81
<PAGE> 82
EXHIBIT D
FORM OF MONEY MARKET QUOTE
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Agent
60 Wall Street
New York, New York 10260-0060
Attention:
Re: Money Market Quote to
Litton Industries, Inc. (the "Borrower")
In response to your invitation on behalf of the Borrower dated
_____________, 19__, we hereby make the following Money Market Quote on the
following terms:
1. Quoting Bank: ________________________________
2. Person to contact at Quoting Bank:
3. Date of Borrowing: ____________________*
4. We hereby offer to make Money Market Loan(s) in the following principal
amounts, for the following Interest Periods and at the following rates:
<TABLE>
<S> <C> <C>
Principal Interest Money Market
Amount** Period*** [Margin****] [Absolute Rate*****]
- - -------- --------- ---------------------------------
$
$
</TABLE>
[Provided, that the aggregate principal amount of Money Market Loans for
which the above offers may be accepted shall not exceed $____________.]**
__________
1
EXH. 4.1-82
<PAGE> 83
* As specified in the related Invitation.
(notes continued on following page)
We understand and agree that the offer(s) set
forth above, subject to the satisfaction of the applicable
conditions set forth in the Credit Agreement (as amended from time
to time, the "Credit Agreement") dated as of December 23, 1993
among the Borrower, the Banks parties thereto and yourselves, as
Agent, and Wells Fargo Bank, N.A., as Co-Agent, irrevocably
obligates us to make the Money Market Loan(s) for which any
offer(s) are accepted, in whole or in part.
Terms used herein have the meanings assigned to them in the
Credit Agreement.
Very truly yours,
[NAME OF BANK]
Dated:_______________ By:__________________________
Authorized Officer
__________
** Principal amount bid for each Interest Period may not exceed principal
amount requested. Specify aggregate limitation if the sum of the individual
offers exceeds the amount the Bank is willing to lend. Bids must be made for
$5,000,000 or a larger multiple of $1,000,000.
*** Not less than one month or not less than 14 days, as specified in the
related Invitation. No more than five bids are permitted for each Interest
Period.
**** Margin over or under the London Interbank Offered Rate determined for the
applicable Interest Period. Specify
2
EXH. 4.1-83
<PAGE> 84
percentage (to the nearest 1/10,000 of 1%) and specify whether "PLUS" or
"MINUS".
***** Specify rate of interest per annum (to the nearest 1/10,000th of 1%).
3
EXH. 4.1-84
<PAGE> 85
EXHIBIT E
OPINION OF
COUNSEL FOR THE BORROWER
[Dated the Effective Date]
To the Banks and the Agent
Referred to Below
c/o Morgan Guaranty Trust Company
of New York, as Agent
60 Wall Street
New York, New York 10260-0060
Dear Sirs:
I am the chief legal officer of Litton Industries, Inc. (the
"Borrower") and have acted in that capacity in connection with the Credit
Agreement (the "Credit Agreement") dated as of December 23, 1993 among the
Borrower, the banks listed on the signature pages thereof and Morgan Guaranty
Trust Company of New York, as Agent, and Wells Fargo Bank, N.A., as Co-Agent.
Terms defined in the Credit Agreement are used herein as therein defined.
I have examined originals or copies, certified or otherwise
identified to my satisfaction, of such documents, corporate records,
certificates of public officials and other instruments and have conducted such
other investigations of fact and law as I have deemed necessary or advisable
for purposes of this opinion.
Upon the basis of the foregoing, I am of the opinion that:
1. The Borrower is a corporation duly incorporated, validly
existing and in good standing under the laws of Delaware and has all corporate
powers and all material governmental licenses, authorizations, consents and
approvals required to carry on its business as now conducted.
2. The execution, delivery and performance by the Borrower of the
Credit Agreement and the Notes are within
1
EXH. 4.1-85
<PAGE> 86
the Borrower's corporate powers, have been duly authorized by all necessary
corporate action, require no action by or in respect of, or filing with, any
governmental body, agency or official and do not contravene, or constitute a
default under, any provision of applicable law or regulation or of the
certificate of incorporation or by-laws of the Borrower or of any agreement,
judgment, injunction, order, decree or other instrument binding upon the
Borrower or result in the creation or imposition of any Lien on any asset of
the Borrower or any of its Subsidiaries.
3. The Credit Agreement constitutes a valid and binding agreement
of the Borrower and the Notes constitute valid and binding obligations of the
Borrower.
4. (a) Except for actions, suits or proceedings described in the
Borrower's 1993 Form 10-K, there is no action, suit or proceeding pending
against, or to the best of my knowledge threatened against or affecting, the
Borrower or any of its Subsidiaries before any court or arbitrator or any
governmental body, agency or official, in which there is a reasonable
possibility of an adverse decision which could materially adversely affect the
business, consolidated financial position or consolidated results of operations
of the Borrower and its Consolidated Subsidiaries, taken as a whole.
(b) There is no action, suit or proceeding pending against, or
to the best of my knowledge threatened against or affecting, the Borrower or
any of its Subsidiaries before any court or arbitrator or any governmental
body, agency or official which in any manner questions the validity of the
Credit Agreement or the Notes.
5. Each of the Borrower's Material Subsidiaries is a corporation
duly incorporated, validly existing and in good standing under the laws of its
jurisdiction of incorporation, and has all corporate powers and all material
governmental licenses, authorizations, consents and approvals required to carry
on its business as now conducted.
I am a member of the Bar of the State of California, and the
foregoing opinion is limited to the laws of the State of California, the
General Corporation Law of the State of Delaware and the Federal laws of the
United States of America. Inasmuch as the Credit Agreement and the Notes are
governed by the law of the State of New York, I
2
EXH. 4.1-86
<PAGE> 87
have assumed for purposes of the foregoing opinion that such law is the same as
the law of the State of California.
Very truly yours,
3
EXH. 4.1-87
<PAGE> 88
EXHIBIT F
OPINION OF
DAVIS POLK & WARDWELL, SPECIAL COUNSEL
FOR THE AGENT
[Dated the Effective Date]
To the Banks and the Agent
Referred to Below
c/o Morgan Guaranty Trust Company
of New York, as Agent
60 Wall Street
New York, New York 10260-0060
Dear Sirs:
We have participated in the preparation of the Credit Agreement
(the "Credit Agreement") dated as of December 23, 1993 among Litton Industries,
Inc. a Delaware corporation (the "Borrower"), the banks listed on the signature
pages thereof (the "Banks") and Morgan Guaranty Trust Company of New York, as
Agent (the "Agent"), and Wells Fargo Bank, N.A., as Co-Agent, and have acted as
special counsel for the Agent for the purpose of rendering this opinion
pursuant to Section 3.01(d) of the Credit Agreement. Terms defined in the
Credit Agreement are used herein as therein defined.
We have examined originals or copies, certified or otherwise
identified to our satisfaction, of such documents, corporate records,
certificates of public officials and other instruments and have conducted such
other investigations of fact and law as we have deemed necessary or advisable
for purposes of this opinion.
Upon the basis of the foregoing, we are of the opinion that:
1. The execution, delivery and performance by the Borrower of the
Credit Agreement and the Notes are within the Borrower's corporate powers and
have been duly authorized by all necessary corporate action.
1
EXH. 4.1-88
<PAGE> 89
2. The Credit Agreement constitutes a valid and binding agreement
of the Borrower and the Notes constitute valid and binding obligations of the
Borrower.
3. The documents delivered to the Agent by the Borrower pursuant
to Section 3.01 of the Credit Agreement are substantially responsive to the
requirements of said Section.
We are members of the Bar of the State of New York and the
foregoing opinion is limited to the laws of the State of New York, the federal
laws of the United States of America and the General Corporation Law of the
State of Delaware. In giving the foregoing opinion, we express no opinion as
to the effect (if any) of any law of any jurisdiction (except the State of New
York) in which any Bank is located which limits the rate of interest that such
Bank may charge or collect.
This opinion is rendered solely to you in connection with the
above matter. This opinion may not be relied upon by you for any other purpose
or relied upon by or furnished to any other person without our prior written
consent.
Very truly yours,
2
EXH. 4.1-89
<PAGE> 90
EXHIBIT G
ASSIGNMENT AND ASSUMPTION AGREEMENT
AGREEMENT dated as of _________, 19__ among [ASSIGNOR] (the
"Assignor"), [ASSIGNEE] (the "Assignee"), LITTON INDUSTRIES, INC. (the
"Borrower") and MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Agent (the
"Agent").
W I T N E S S E T H
WHEREAS, this Assignment and Assumption Agreement (the
"Agreement") relates to the Credit Agreement dated as of December 23, 1993
among the Borrower, the Assignor and the other Banks party thereto, as Banks,
and the Agent and Wells Fargo Bank, N.A., as Co-Agent (as amended from time to
time, the "Credit Agreement");
WHEREAS, as provided under the Credit Agreement, the Assignor has
a Commitment to make Committed Loans to the Borrower in an aggregate principal
amount at any time outstanding not to exceed $__________;
WHEREAS, Committed Loans made to the Borrower by the Assignor
under the Credit Agreement in the aggregate principal amount of $__________ are
outstanding at the date hereof; and
WHEREAS, the Assignor proposes to assign to the Assignee all of
the rights of the Assignor under the Credit Agreement in respect of a portion
of its Commitment thereunder in an amount equal to $__________ (the "Assigned
Amount"), together with a corresponding portion of its outstanding Committed
Loans, and the Assignee proposes to accept assignment of such rights and assume
the corresponding obligations from the Assignor on such terms;
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements contained herein, the parties hereto agree as follows:
1
EXH. 4.1-90
<PAGE> 91
SECTION 1. Definitions. All capitalized terms not otherwise
defined herein shall have the respective meanings set forth in the Credit
Agreement.
2
EXH. 4.1-91
<PAGE> 92
SECTION 2. Assignment. The Assignor hereby assigns and sells to
the Assignee all of the rights of the Assignor under the Credit Agreement to
the extent of the Assigned Amount, and the Assignee hereby accepts such
assignment from the Assignor and assumes all of the obligations of the Assignor
under the Credit Agreement to the extent of the Assigned Amount, including the
purchase from the Assignor of the corresponding portion of the principal amount
of the Committed Loans made by the Assignor outstanding at the date hereof.
Upon the execution and delivery hereof by the Assignor, the Assignee, the
Borrower and the Agent and the payment of the amounts specified in Section 3
required to be paid on the date hereof (i) the Assignee shall, as of the date
hereof, succeed to the rights and be obligated to perform the obligations of a
Bank under the Credit Agreement with a Commitment in an amount equal to the
Assigned Amount, and (ii) the Commitment of the Assignor shall, as of the date
hereof, be reduced by a like amount and the Assignor released from its
obligations under the Credit Agreement to the extent such obligations have been
assumed by the Assignee. The assignment provided for herein shall be without
recourse to the Assignor.
SECTION 3. Payments. As consideration for the assignment and
sale contemplated in Section 2 hereof, the Assignee shall pay to the Assignor
on the date hereof in Federal funds an amount equal to $_________.(4) It is
understood that commitment and/or facility fees accrued to the date hereof are
for the account of the Assignor and such fees accruing from and including the
date hereof in respect of the Assigned Amount are for the account of the
Assignee. Each of the Assignor and the Assignee hereby agrees that if it
receives any amount under the Credit Agreement which is for the account of the
other party hereto, it shall receive the same for the account of such other
party to the extent of such other party's interest therein and shall promptly
pay the same to such other party.
____________________
(4)Amount should combine principal together with accrued interest and
breakage compensation, if any, to be paid by the Assignee, net of any
portion of any upfront fee to be paid by the Assignor to the Assignee.
It may be preferable in an appropriate case to specify these amounts
generically or by formula rather than as a fixed sum.
3
EXH. 4.1-92
<PAGE> 93
SECTION 4. Consent of the Borrower and the Agent. This Agreement
is conditioned upon the consent of the Borrower and the Agent, pursuant to
Section 9.06(c) of the Credit Agreement. The execution of this Agreement by
the Borrower and the Agent is evidence of this consent. Pursuant to Section
9.06(c) the Borrower agrees to execute and deliver a Note payable to the order
of the Assignee to evidence the assignment and assumption provided for herein.
SECTION 5. Non-Reliance on Assignor. The Assignor makes no
representation or warranty in connection with, and shall have no responsibility
with respect to, the solvency, financial condition, or statements of the
Borrower, or the validity and enforceability of the obligations of the Borrower
in respect of the Credit Agreement or any Note. The Assignee acknowledges that
it has, independently and without reliance on the Assignor, and based on such
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement and will continue to be
responsible for making its own independent appraisal of the business, affairs
and financial condition of the Borrower.
SECTION 6. Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York.
SECTION 7. Counterparts. This Agreement may be signed in any
number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered by their duly authorized officers as of the date first
above written.
[ASSIGNOR]
By_________________________
Title:
[ASSIGNEE]
4
EXH. 4.1-93
<PAGE> 94
By__________________________
Title:
LITTON INDUSTRIES, INC.
By__________________________
Title:
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By___________________________
Title:
5
EXH. 4.1-94
<PAGE> 95
EXHIBIT H
EXTENSION AGREEMENT
[Date]
Litton Industries, Inc.
360 North Crescent Drive
Beverly Hills, CA 90210-4867
Morgan Guaranty Trust Company
of New York, as Agent
under the Credit Agreement
referred to below
60 Wall Street
New York, New York 10260-0060
Gentlemen:
The undersigned hereby agree to extend, effective [Extension
Date], the Revolving Credit Period under the Credit Agreement dated as of
December 23, 1993 among Litton Industries, Inc., the Banks listed therein and
Morgan Guaranty Trust Company of New York, as Agent, and Wells Fargo Bank,
N.A., as Co-Agent (as amended from time to time, the "Credit Agreement") for
one year to (but not including) [date to which the Revolving Credit Period is
extended]. Terms defined in the Credit Agreement are used herein as therein
defined.
This Extension Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument.
This Extension Agreement shall be construed in accordance with and
governed by the law of the State of New York.
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
1
EXH. 4.1-95
<PAGE> 96
By___________________________
Title:
J.P. MORGAN DELAWARE
By_____________________________
Title:
WELLS FARGO BANK, N.A.
By_____________________________
Title:
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By: _________________________
Title:
THE BANK OF NEW YORK
By: _________________________
Title:
CHEMICAL BANK
By: _________________________
Title:
CONTINENTAL BANK N.A.
2
EXH. 4.1-96
<PAGE> 97
By: _________________________
Title:
UNION BANK OF SWITZERLAND,
Los Angeles Branch
By: _________________________
Title:
By: ___________________________
Title:
THE BANK OF NOVA SCOTIA
By: _________________________
Title:
By: _________________________
Title:
CIBC INC.
By: _________________________
Title:
CREDIT SUISSE
By: _________________________
Title:
By: _________________________
Title:
3
EXH. 4.1-97
<PAGE> 98
DRESDNER BANK AG
By: _________________________
Title:
By: _________________________
Title:
MELLON BANK, N.A.
By: _______________________
Title:
NATIONSBANK OF TEXAS, N.A.
By: _________________________
Title:
SWISS BANK CORPORATION,
San Francisco Branch
By: _________________________
Title:
By: _________________________
Title:
BANK OF HAWAII
By: _________________________
Title:
4
EXH. 4.1-98
<PAGE> 99
FIRST INTERSTATE BANK OF
CALIFORNIA
By: _________________________
Title:
NBD BANK, N.A.
By: _________________________
Title:
THE NORTHERN TRUST COMPANY
By: _________________________
Title:
TORONTO DOMINION (TEXAS), INC.
By: __________________________
Title:
Agreed and accepted:
LITTON INDUSTRIES, INC.
By_____________________________
Title:
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Agent
5
EXH. 4.1-99
<PAGE> 100
By_____________________________
Title:
6
EXH. 4.1-100
<PAGE> 101
CONFORMED COPY
AMENDMENT NO. 1 TO CREDIT AGREEMENT
AMENDMENT dated as of February 22, 1994 among LITTON INDUSTRIES,
INC. (the "Borrower") and the BANKS listed on the signature pages hereof (the
"Banks").
W I T N E S S E T H :
WHEREAS, the parties hereto have heretofore entered into a Credit
Agreement dated as of December 23, 1993 (the "Agreement"); and
WHEREAS, the parties hereto desire to amend the Agreement to
extend the date by which the Borrower must satisfy certain closing conditions.
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. Definitions; References. Unless otherwise
specifically defined herein, each term used herein which is defined in the
Agreement shall have the meaning assigned to such term in the Agreement. Each
reference to "hereof", "hereunder", "herein" and "hereby" and each other
similar reference and each reference to "this Agreement" and each other similar
reference contained in the Agreement shall from and after the date hereof refer
to the Agreement as amended hereby.
SECTION 2. Amendment of Section 3.01 of the Agreement. Section
3.01 of the Agreement is amended by changing the date in the proviso thereof
from "February 23, 1994" to "March 11, 1994."
SECTION 3. Governing Law. This Amendment shall be governed by
and construed in accordance with the laws of the State of New York.
1
EXH. 4.1-101
<PAGE> 102
SECTION 4. Counterparts; Effectiveness. This Amendment may be
signed in any number of counterparts, each of which shall be an original, with
the same effect as if the signatures thereto and hereto were upon the same
instrument. This Amendment shall become effective when the Agent shall have
received duly executed counterparts hereof signed by the Borrower and the
Required Banks (or, in the case of any party as to which an executed
counterpart shall not have been received, the Agent shall have received
telegraphic, telex or other written confirmation from such party of execution
of a counterpart hereof by such party).
2
EXH. 4.1-102
<PAGE> 103
IN WITNESS WHEREOF, the parties hereto have caused this Amendment
to be duly executed as of the date first above written.
LITTON INDUSTRIES, INC.
By /s/ Carol A. Wiesner
------------------------------------
Title: Vice President and
Treasurer
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By /s/ Diana H. Imhof
------------------------------------
Title: Associate
J.P. MORGAN DELAWARE
By /s/ Philip S. Detjens
------------------------------------
Title: Vice President
WELLS FARGO BANK, N.A.
By /s/ Brian P. McDonald
------------------------------------
Title: Corporate Banking Officer
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By /s/ Lori Kannegieter
------------------------------------
Title: Vice President
3
EXH. 4.1-103
<PAGE> 104
THE BANK OF NEW YORK
By /s/ Craig J. Rethmeyer
------------------------------------
Title: Vice President
CHEMICAL BANK
By /s/ Jeffrey C. Howe
------------------------------------
Title: Vice President
CONTINENTAL BANK N.A.
By /s/ Wyatt R. Ritchie
------------------------------------
Title: Vice President
UNION BANK OF SWITZERLAND,
Los Angeles Branch
By /s/ James I. Chu
------------------------------------
Title: Assistant Vice President
By /s/ L. Scott Sommers
------------------------------------
Title: Vice President
THE BANK OF NOVA SCOTIA
By /s/ Suzanne L. Baird
------------------------------------
Title: Representative
4
EXH. 4.1-104
<PAGE> 105
By /s/ M. Van Otterloo
------------------------------------
Title: Vice President
CIBC INC.
By /s/ Paul M. Mohme
------------------------------------
Title: Assistant Vice President
CREDIT SUISSE
By /s/ Marilou Palenzuela
------------------------------------
Title: Member of Senior Management
By /s/ Maria N. Gaspara
------------------------------------
Title: Associate
DRESDNER BANK AG
By /s/ Jon M. Bland
------------------------------------
Title: Senior Vice President
By /s/ Barbara J. Readick
------------------------------------
Title: Vice President
MELLON BANK, N.A.
By /s/ V.C. Jackson
------------------------------------
Title: Senior Vice President
NATIONSBANK OF TEXAS, N.A.
5
EXH. 4.1-105
<PAGE> 106
By /s/ Tom F. Scharfenberg
-----------------------------------
Title: Vice President
SWISS BANK CORPORATION,
San Francisco Branch
By /s/ Jamie Dillon
-----------------------------------
Title: Director
By /s/ Hans-Ueli Surber
-----------------------------------
Title: Executive Director
BANK OF HAWAII
By /s/ Cynthia L. Davis
-----------------------------------
Title: Vice President
FIRST INTERSTATE BANK
OF CALIFORNIA
By /s/ Daniel H. Hom
-----------------------------------
Title: Vice President
NBD BANK, N.A.
By /s/ James Gregory Mickens
-----------------------------------
Title: Vice President
THE NORTHERN TRUST COMPANY
6
EXH. 4.1-106
<PAGE> 107
By /s/ Martin G. Alston
-----------------------------------
Title: Vice President
TORONTO DOMINION (TEXAS), INC.
By /s/ Carole A. Clause
-----------------------------------
Title: Vice President
7
EXH. 4.1-107
<PAGE> 108
CONFORMED COPY
AMENDMENT NO. 2 TO CREDIT AGREEMENT
AMENDMENT dated as of March 7, 1994 among LITTON INDUSTRIES, INC.
(the "Borrower") and the BANKS listed on the signature pages hereof (the
"Banks").
W I T N E S S E T H :
WHEREAS, the parties hereto have heretofore entered into a Credit
Agreement dated as of December 23, 1993 (as heretofore amended, the
"Agreement"); and
WHEREAS, the parties hereto desire to amend the Agreement to
extend the date by which the Borrower must satisfy certain closing conditions.
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. Definitions; References. Unless otherwise
specifically defined herein, each term used herein which is defined in the
Agreement shall have the meaning assigned to such term in the Agreement. Each
reference to "hereof", "hereunder", "herein" and "hereby" and each other
similar reference and each reference to "this Agreement" and each other similar
reference contained in the Agreement shall from and after the date hereof refer
to the Agreement as amended hereby.
SECTION 2. Amendment of Section 3.01 of the Agreement. Section
3.01 of the Agreement is amended by changing the date in the proviso thereof
from "March 11, 1994" to "March 25, 1994."
SECTION 3. Governing Law. This Amendment shall be governed by
and construed in accordance with the laws of the State of New York.
1
EXH. 4.1-108
<PAGE> 109
SECTION 4. Counterparts; Effectiveness. This Amendment may be
signed in any number of counterparts, each of which shall be an original, with
the same effect as if the signatures thereto and hereto were upon the same
instrument. This Amendment shall become effective when the Agent shall have
received duly executed counterparts hereof signed by the Borrower and the
Required Banks (or, in the case of any party as to which an executed
counterpart shall not have been received, the Agent shall have received
telegraphic, telex or other written confirmation from such party of execution
of a counterpart hereof by such party).
2
EXH. 4.1-109
<PAGE> 110
IN WITNESS WHEREOF, the parties hereto have caused this Amendment
to be duly executed as of the date first above written.
LITTON INDUSTRIES, INC.
By /s/ Carol A. Wiesner
------------------------------------
Title: Vice President and
Treasurer
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By /s/ Diana H. Imhof
------------------------------------
Title: Associate
J.P. MORGAN DELAWARE
By /s/ Philip S. Detjens
------------------------------------
Title: Vice President
WELLS FARGO BANK, N.A.
By /s/ David A. Neumann
------------------------------------
Title: Vice President
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By /s/ Lori Kannegieter
------------------------------------
Title: Vice President
3
EXH. 4.1-110
<PAGE> 111
THE BANK OF NEW YORK
By /s/ Craig J. Rethmeyer
------------------------------------
Title: Vice President
CHEMICAL BANK
By /s/ Jeffrey C. Howe
------------------------------------
Title: Vice President
CONTINENTAL BANK N.A.
By /s/ Wyatt R. Ritchie
------------------------------------
Title: Vice President
UNION BANK OF SWITZERLAND,
Los Angeles Branch
By /s/ James I. Chu
------------------------------------
Title: Assistant Vice President
By /s/ L. Scott Sommers
------------------------------------
Title: Vice President
THE BANK OF NOVA SCOTIA
By /s/ Suzanne L. Baird
------------------------------------
Title: Representative
4
EXH 4.1-111
<PAGE> 112
By /s/ Maarten Van Otterloo
------------------------------------
Title: Vice President
CIBC INC.
By /s/ Robert J. Wagner
------------------------------------
Title: Vice President
CREDIT SUISSE
By /s/ Sarah U. Johnston
------------------------------------
Title: Member of Senior Management
By /s/ Marilou Palenzuela
------------------------------------
Title: Member of Senior Management
DRESDNER BANK AG
By /s/ Jon M. Bland
------------------------------------
Title: Senior Vice President
By /s/ Sidney S. Jordan
------------------------------------
Title: Vice President
MELLON BANK, N.A.
By /s/ Paul A. Briggs
------------------------------------
Title: Senior Vice President
5
EXH. 4.1-112
<PAGE> 113
NATIONSBANK OF TEXAS, N.A.
By /s/ Tom F. Scharfenberg
-----------------------------------
Title: Vice President
SWISS BANK CORPORATION,
San Francisco Branch
By /s/ Jamie Dillon
-----------------------------------
Title: Director Merchant Banking
By /s/ David L. Parrot
-----------------------------------
Title: Associate Director
Merchant Banking
BANK OF HAWAII
By /s/ Cynthia L. Davis
-----------------------------------
Title: Vice President
FIRST INTERSTATE BANK
OF CALIFORNIA
By /s/ Daniel H. Hom
-----------------------------------
Title: Vice President
NBD BANK, N.A.
By /s/ Jack J. Csernits
-----------------------------------
Title: Vice President
THE NORTHERN TRUST COMPANY
6
EXH. 4.1-113
<PAGE> 114
By /s/ Martin G. Alston
------------------------------------
Title: Vice President
TORONTO DOMINION (TEXAS), INC.
By /s/ Carole A. Clause
------------------------------------
Title: Vice President
7
EXH. 4.1-114
<PAGE> 1
Exhibit 10.1
MINUTES OF ORGANIZATIONAL MEETING
OF THE NEWLY ELECTED
BOARD OF DIRECTORS
DECEMBER 8, 1993 (PAGE 3)
DIRECTOR'S FEES
"RESOLVED, that pursuant to Article III, Section 10, of the By-laws
of this corporation, during calendar year 1994 the members of the
Board of Directors of this corporation who are not employees of this
corporation ("nonemployee directors") shall be paid a fixed fee of
$27,500 for services to be rendered as members of the Board of
Directors, payable in quarterly installments of $6,875 at the
beginning of each calendar quarter, and, in addition thereto, they
shall be paid an attendance fee of $1,500 for each Board meeting
attended by them, payable following any such meeting attended;
RESOLVED FURTHER, that during calendar year 1994 nonemployee
directors of this corporation shall be paid a fee of $1,500 for
attendance at each Board committee meeting, with the exception of
attendance at meetings of the Executive Committee, payable following
any such meeting attended;
RESOLVED FURTHER, that during calendar year 1994 a nonemployee
director serving as Chairman of the Board of the Corporation shall
be paid a fixed fee for services to be rendered as Chairman of the
Board of $60,000, payable in quarterly installments of $15,000 at
the beginning of each calendar quarter; a nonemployee director
serving as Chairman of the Executive Committee of the Corporation
shall be paid a fixed fee for services to be rendered as Chairman of
the Executive Committee of $15,000, payable in quarterly
installments of $3,750 at the beginning of each calendar quarter;
and any nonemployee director serving as a member of the Executive
Committee (but not as Chairman thereof or the Chairman of the Board)
shall be paid a fixed fee for services to be rendered as a member of
the Executive Committee of $12,000, payable in quarterly
installments of $3,000 at the beginning of each calendar quarter;
and
RESOLVED FURTHER, that the members of the Board shall be paid their
normal travel and incidental expenses incurred in traveling to any
Board or Board committee meeting upon presentment of invoices
covering such expenditures to the Secretary of the Corporation."
EXH. 10.1-1
<PAGE> 1
Exhibit 10.2
RESOLUTION ADOPTED BY THE
COMPENSATION & SELECTION COMMITTEE
JANUARY 26, 1994
SUPPLEMENTAL MEDICAL
INSURANCE PLAN (HOCH)
The Compensation and Selection Committee of the Board of Directors hereby
approves the participation by Orion L. Hoch and Catherine Nan Hoch,
individually, in the Supplemental Medical Insurance Plan for their respective
lifetimes.
COMPENSATION AND SELECTION
COMMITTEE
/s/ Wallace W. Booth
_________________________________________
Wallace W. Booth, Chairman
/s/ Paul Bancroft, III
_________________________________________
Paul Bancroft, III
/s/ William C. Edwards
_________________________________________
William C. Edwards
/s/ Carol B. Hallett
_________________________________________
Carol B. Hallett
EXH. 10.2-1
<PAGE> 1
Exhibit 10.3
SECOND AMENDMENT
TO THE
AGREEMENT OF TRUST
WHEREAS, an Agreement of Trust was executed by the Grantor and the
Trustee on December 20, 1988, and amended on June 12, 1990; and
WHEREAS, it is desired to amend the Agreement of Trust as set forth
herein; and
WHEREAS, the Grantor has the right to amend the Agreement of Trust
with the Written Consent of the Contract Payment Recipients; and
WHEREAS, the Written Consent of the Contract Payment Recipients to
such amendments has been obtained in accordance with the provisions of the
Agreement of Trust;
NOW, THEREFORE, the Agreement of Trust is hereby amended in the
following respects:
1. Subsection (d) of Section 3 is amended by striking "thirty-five
percent (35%)" and substituting in place thereof "twenty percent (20%)".
2. Subsection (b) of Section 10 is deleted in its entirety and the
following new subsection (b) is added to Section 10:
"(b) After December 1, 1993, the Grantor may not add additional
Contract Payment Recipients or Deferred Compensation Contracts without
the Written Consent of the Contract Payment Recipients."
3. These amendments are effective on the date of execution of this Second
Amendment.
IN WITNESS WHEREOF, the Grantor has executed this Second Amendment on
the date shown below.
LITTON INDUSTRIES, INC. (Grantor)
- 28 -
EXH. 10.3-1
<PAGE> 2
Date: December 17, 1993 By: /s/ Carol A. Wiesner
_________________________
Carol A. Wiesner
Vice President and Treasurer
- 29 -
EXH. 10.3-2
<PAGE> 1
Exhibit 10.4
SECOND AMENDMENT OF AGREEMENT
WHEREAS, Orion L. Hoch (hereinafter called Hoch) and Litton
Industries, Inc.(hereinafter called Litton) executed an agreement on February
15, 1983 and an amendment thereof on November 4, 1983 relative to the services
and compensation of Hoch, and
WHEREAS, substantial changes where made to the Litton's cash incentive
plan which necessitate amendment hereof:
NOW, THEREFORE, the parties hereto agree to amend their agreement, as
amended, as follows.
1. Section 13(i)(2) is deleted and the following is substituted in lieu
thereof:
(2) except as limited herein, the amount paid to Hoch
during such three 12-month periods under the Litton
Industries, Inc., Performance Award Plan; provided, however,
if more than one payment is made to Hoch under the Performance
Award Plan during any of the three specified periods, only the
largest payment made during any single specified period shall
be taken into account."
IN WITNESS WHEREOF, the parties have executed this amendment of
agreement on this 21st day of January, 1994.
LITTON INDUSTRIES INC.
By: /s/ J. T. Casey
___________________________
ATTEST:
/s/ Virginia S. Young
__________________________ /s/ O. L. Hoch
___________________________
ATTEST: ORION L. HOCH
/s/ Virginia S. Young
__________________________
- 30 -
EXH. 10.4-1
<PAGE> 1
Exhibit 10.5
SALES CONSULTANT AGREEMENT
THIS AGREEMENT, entered into as of the 17th day of December 1993 between
LITTON SYSTEMS, INC. by and through its Applied Technology Division
(hereinafter called "Litton"), A Delaware corporation having offices at 4747
Hellyer Avenue, P.O. Box 7012, San Jose, California 95150-7012, United States
of America Division, and Thomas B. Hayward Associates with offices at 737
Bishop Street, Suite 1655, Honolulu, HI 96813 (hereinafter called
"Consultant").
WHEREAS, Consultant operates a marketing and support organization in order
to provide industrial corporations with bona fide marketing services in the
Territory; and
WHEREAS, Litton manufactures certain products which it desires to sell in the
Territory; and
WHEREAS, Litton desires to utilize the marketing and support services of
Consultant in order to effectively sell its products in the Territory.
NOW, THEREFORE, in consideration of mutual covenants hereinafter set forth,
the parties agree as follows:
1. APPOINTMENT AND TERRITORY
Litton (including, whenever the term "Litton" is hereafter used, participating
Litton organizations) hereby appoints and grants Consultant the non-exclusive
right to promote the sale in the Territory described in Appendix A, dated 17
December 1993 attached hereto and made a part hereof (hereinafter called the
"Territory"), the Products and services of the Litton organizations described
in Appendix A (hereinafter called the "Products"), and Consultant hereby
accepts this appointment. Areas, accounts or customers located in the
Territory, but excluded from this Agreement, are also listed in Appendix A.
This appointment and this Agreement shall commence as of the 17th day of
December 1993 upon execution by Litton and continue until 01 May 1997 unless
sooner terminated in accordance with the provisions hereof. Litton, at its
sole discretion, reserves the right to modify, alter, improve, change or
discontinue any or all of the Products covered by this Agreement, and this
Agreement shall only cover the sale of such Products as they may be modified,
altered, improved or changed. It is an express provision of this agreement
that it will not be renewed after 01 May 1997 and that Applied Technology
Division not procure further services after such date from Consultant.
2. RELATIONSHIP OF THE PARTIES
A. Consultant shall serve Litton as an independent contractor, and
under no circumstances shall Consultant be or be deemed to be a partner, agent,
servant, distributor or employee of Litton in its performance hereunder. All
salesmen and other employees used by Consultant shall be and be deemed to be
exclusively Consultant's employees or agents, and the entire management,
direction and control of all such salesmen and employees shall be exclusively
vested in Consultant.
B. All orders for the Products solicited by Consultant shall be
forwarded by Consultant to the applicable Litton organization described in
Appendix A for acceptance. Litton shall have the sole right to accept or
reject all orders, to establish the prices of the Products, to set the terms
and conditions of sale, and to approve returns, allowances, or other
adjustments. Litton shall not be bound by any order solicited by Consultant
until the same shall have been accepted in writing by Litton.
EXH. 10.5-1
<PAGE> 2
C. Consultant shall have no authority to bind, act for, or obligate
Litton in any manner whatsoever, and shall not make any representations,
statements or warranties, either oral on in writing, concerning any Litton
Products or services other than to make available to prospective customers such
promotional literature, data and information as Litton shall from time to time
furnish to Consultant for such purposes. Consultant shall be responsible for
informing any and all customers, or potential customers of Products of
Consultant's status under this Agreement.
D. Except as otherwise specifically provided in this Agreement,
Consultant shall assume and discharge for its own account all costs, expenses
and charges necessary or incidental to its operations under this Agreement,
and shall indemnify and save Litton harmless from and against all such costs,
expenses, and charges and all claims, promises, guarantees, debts, obligations,
expenses and liabilities of any nature and kind made, incurred, contracted or
created by Consultant which were not specifically assumed in advance in writing
by Litton.
E. Litton shall have no liability to Consultant or to the customer
with respect to any alleged defective Products sold by Litton except as
specifically set forth in Litton's warranty, if any, included as part of the
terms and conditions of the sale made by Litton. Consultant shall have no
authority to and shall not make any warranty representation with respect to
the Products contrary to or inconsistent with Litton's warranty, if any.
F. Neither party shall be liable to the other for any delay or
failure in the performance of its obligations and responsibilities hereunder
if such delay or failure is caused by any fires, floods, strikes, work
stoppages, accident, wars (declared or undeclared), acts of God, acts of any
government agency or authority, epidemics, quarantine restrictions, freight
embargoes, public disorders, riots or any other cause beyond the fault or
control of the defaulting party.
G. Consultant agrees that it will indemnify and hold harmless Litton,
its officers, agents, servants and employees, from and against any loss, cost,
damage, claim, expense or liability, including reasonable attorneys' fees,
resulting from any property damage, personal injury or death arising out of or
in connection with the acts of Consultant, its officers, agents, servants or
employees under this Agreement.
3. DUTIES: CONSULTANT
A. Consultant shall devote its best efforts in the development and
support of markets and sales in the Territory. Such efforts shall include
but not be limited to the duties and responsibilities set forth in Appendix B
dated 17 December 1993 attached hereto and made a part hereof.
B. Neither Consultant nor its officers, agents, servants or employees
shall, at any time during the term of this Agreement, directly or indirectly,
perform any service or be employed by or become associated in any capacity
with any person, firm or corporation competing with or setting up to compete
with Litton in the Territory in the manufacture or sale of goods similar to the
Products; nor shall Consultant, its officers, agents, servants or employees
compete with Litton as proprietor in the manufacture or sale of similar goods
in the Territory.
-2-
EXH. 10.5-2
<PAGE> 3
C. Consultant shall, for a period of sixty (60) days following the
expiration or termination of this Agreement, cooperate with and render all
reasonable assistance to the person or persons designated by Litton to
represent Litton as sales agent or representative in the Territory.
4. RESPONSIBILITIES: LITTON
A. Litton shall keep Consultant advised of its marketing objectives
in the Territory, and Litton shall provide sales and service assistance to
Consultant, including literature, data, catalogs, etc. as deemed reasonable
by Litton.
B. Litton shall be solely responsible for the design, development,
supply, production and performance of Litton Products. Litton shall keep
Consultant informed of all specification or price changes in regard to the
Products.
C. Litton shall determine, if any, and what allowance, adjustment or
credit will be given in the event a Product is rejected or returned by a
customer. No Products shipped under any order may be returned to Litton for
credit without the prior written approval of Litton.
D. Litton shall promptly accept or reject in writing any order from a
customer in the Territory for the Products forwarded to Litton by Consultant.
E. Litton shall have no other obligations to the Consultant
whatsoever. By way of illustration and not by way of limitation, Litton need
not negotiate or consummate any agreement with anyone located by the
Consultant, need not avail itself of the Consultant's assistance in
negotiating, consummating or servicing any agreement, and may locate and deal
directly with prospective or existing customers through its own company
personnel.
5. COMPENSATION AND PAYMENT
Litton shall compensate Consultant for its services under this
Agreement in accordance with the provisions set forth in Appendix C,
dated 17 December 1993 which is attached and made a part hereof (hereinafter
called "Compensation").
6. TERMINATION
A. Litton shall have the right to terminate this Agreement
immediately by giving notice to that effect in the event of Consultant's
insolvency, bankruptcy or receivership, cessation of operations, or for any
other breach of the provisions of the Agreement.
B. Except as specifically provided herein, upon any termination or
expiration of this Agreement, Consultant shall be entitled only to the
compensation payable under paragraph 5 hereof, entitled "Compensation and
Payment". Consultant shall not be entitled to any other compensation for
orders received and accepted by Litton prior to or after the termination date.
Consultant shall not be entitled to any other amounts such as for "goodwill",
termination or similar charges.
-3-
EXH. 10.5-3
<PAGE> 4
7. WAIVER
The failure of either party to exercise any right or to do so in a
timely manner, under this Agreement shall not be deemed to be a waiver of such
right, and the failure of either party to terminate this Agreement for breach
or default shall not be deemed to be a waiver of the right to do so for any
subsequent breach or default or for the continuing breach or default of the
other party.
8. ASSIGNMENT
This Agreement and any modifications are not assignable, and any
assignment of this Agreement or any modification without Litton's prior written
consent, shall be void. Payments made to Consultant under this Agreement or
any modification are not assignable without the prior written consent of
Litton.
9. CONFIDENTIAL INFORMATION
Consultant, its officers, agents, servants and employees shall not,
during the term of this Agreement or any time thereafter, disclose in any
manner to any person, firm or corporation, whether in competition with Litton
or not, any knowledge or information pertaining to the conduct or details of
Litton's business or its processes, formulas, machinery, devices, products
and components used by Litton in carrying on its own business, or lists of
Litton's customers. Consultant agrees not to use Litton's customers.
Consultant agrees not to use Litton's trademarks, name, logo or trade names
in any manner except as authorized by Litton or in connection with Litton's
literature. Consultant agrees to discontinue such usage upon termination of
this Agreement for whatever reason. Consultant further agrees that upon
termination of this Agreement, Consultant will deliver to Litton all copies
in its possession or within its control of Litton customer lists, catalog
sheets, specifications, proposals, quotations, price lists, contracts (whether
or not executed) and all other documents and data relating to the Products or
the conduct of Litton's business and Consultant hereby agrees that Litton may
withhold all sums due the Consultant upon termination until all such material
and documents have been received by Litton.
10. APPROVALS
Any sales contemplated by this Agreement may be subject to review and
approval by the U.S. Government, and the obligations of either party herein
contained shall not become effective until such approval is obtained, where
required. Further, the payment of consultant's compensation may be subject to
review and approval by the Governments of the Territory or the United States
or Litton's customers, and Litton shall be obligated to pay only that
compensation which is approved by such customers or Governments, if approval
is required. The Consultant's compensation may be disclosed in invoices issued
by Litton to its customers when so required by the customer. Consultant agrees
to provide information necessary to comply with this Article.
11. THIRD PARTY RELATIONSHIP
A. Consultant agrees that Litton shall not be obligated to third
parties with whom Consultant may make agreements or to whom Consultant may
direct payments without Litton's prior written consent. Consultant covenants
not to make any representations, directly or by implication, that any such
obligation exists or will be created.
-4-
EXH. 10.5-4
<PAGE> 5
B. Consultant warrants and represents that in connection with
performance under this Agreement consultant will not make any payments to
third parties if such payments would be in violation of the law, including
the laws of the United States and the Territory. Further, Consultant shall
make no payments on Litton's behalf for political purposes or to obtain
political influence. Consultant acknowledges that no employee of Litton or of
any of its divisions or subsidiaries has any authority to give any direction,
written or oral, in connection with the making of any commitment by Consultant
to any third party in contravention of this paragraph.
C. Except as specifically set forth in Appendix B, Consultant
warrants and represents that no owner, principal shareholder, officer or
active representative of Consultant is an affiliate, official, director,
officer, employee or active member of the Government of the Territory or a
customer.
D. Consultant warrants and represents that it has not and shall not
make any payments to any employees of Litton, its affiliates or subsidiaries
except as specifically provided for in this Agreement.
E. Consultant agrees to give prompt written notice to Litton in the
event that, at any time during the term of this Agreement, the representations
set forth above are no longer accurate. In the event of such notice, or if
Litton otherwise verifies that the representations set forth above are no
longer true and accurate, Litton, notwithstanding any other provisions of this
Agreement, may terminate this Agreement upon thirty (30) days written notice
with respect to sales as Litton deems appropriate. Subsequent to the date of
such notice or the date on which said representations were untrue and
inaccurate, Consultant shall not be entitled to receive any compensation
whatsoever in connection with such sales.
12. COMPLIANCE WITH LAWS
Consultant certifies that this Agreement does not violate any laws,
regulations or acts of the Government of the Territory and agrees in
performance of this Agreement to fully comply with such laws, regulations or
acts. In the event this Agreement or its performance is determined to be
illegal or contrary to the laws, regulations, acts or direction of the
Governments of the Territory or United States, this Agreement shall be null
and void unless the parties agree to modify the Agreement to comply with such
law, regulation, act or direction.
13. MODIFICATION
This Agreement shall not be varied, extended, amended or supplemented
except by an instrument in writing executed by both parties.
14. NOTICE
All formal notices and communications hereunder may be sent by
telegram, cablegram or by registered air mail, with a copy by ordinary mail,
and shall be deemed to have been given on the day when deposited in the cable
or telegraph office or post office addressed to the other party, provided that
either party may from time to time change the address to which notices to it
are to be sent by giving written notice of such change to the other party. All
notices to any participating Litton organizations shall be made to the address
for that organization listed in the appropriate modification attached hereto.
Any notice to Litton Systems, Inc. shall be made to:
-5-
EXH. 10.5-5
<PAGE> 6
LITTON SYSTEMS, INC.
Applied Technology Division
4747 Hellyer Avenue
P.O. Box 7012
San Jose, California 951-701250
Attn: President
Any notice to Consultant shall be made to:
MAILING ADDRESS: Thomas B. Hayward Associates
737 Bishop Street, Suite 1655
Honolulu, HI 96813
Attn: Thomas B. Hayward, President
15. DISPUTES
This Agreement shall be interpreted and governed by the laws of the
State of California, United States of America. Consultant agrees not to
initiate or maintain any legal action against Litton, its divisions,
affiliates or parent, without Litton's prior written consent, except in
the city and county of Los Angeles, California, United States of America.
16. ENTIRE AGREEMENT
The parties hereto agree that this Agreement shall constitute the
entire agreement between the parties regarding the subject matter of this
Agreement; and any prior or subsequent understanding or representations of
any kind between Consultant and Litton shall not be binding on either party
except to the extent specifically set forth herein or subsequently agreed
upon, in writing, by both parties and made apart hereof. This Agreement
supersedes and controls any course of dealing and usage of trade.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement and caused it to become effective as of the date set forth at the
beginning hereof.
LITTON SYSTEMS INC.
Applied Technology Division
By: /s/ C.A. Williams
___________________________
C.A. Williams
Title President
CONSULTANT
By: /s/ Thomas B. Hayward
___________________________
Title President
-6-
EXh. 10.5-6
<PAGE> 7
APPENDIX A DATED 17 December 1993
TERRITORY AND PRODUCTS
A. TERRITORY
International
Pacific Rim and Latin American Countries
B. LITTON ORGANIZATION PRODUCTS AND SERVICES
Applied Technology Applied Technology Radar
Division of Warning Systems with
Litton Systems Inc. applicable test and support
4747 Hellyer Avenue equipment; and upgrades
P.O. Box 7012 thereto.
San Jose, CA 95150-7012
Electronic environment
simulation, training and
test systems, subsystems,
instrumentation, components
and services.
NOTES All notices, orders or other communications regarding Products
shall be made by Consultant to the applicable Litton organization
at the address listed above.
C. EXCLUDED AREAS, ACCOUNTS OR CUSTOMERS
All other sales and products of Litton, including, but not limited to
sales through third countries, and sales through third parties are excluded
from this Agreement.
D. AMENDMENTS
Consultant is appointed as nonexclusive agent for sale of Applied
Technology products and services within the territory as outlined in
paragraphs A., and B., above.
EXH. 10.5-7
<PAGE> 8
APPENDIX B DATED 17 December 1993
CONSULTANT DUTIES AND RESPONSIBILITIES
Consultant shall perform such duties as requested from time to time by the
President and/or Vice President International Business Development of Applied
Technology Division. The duties and responsibilities listed in the following
sections apply only to the extent directly requested or applicable under the
circumstances of any given assignment.
1. Duties
A. Consultant shall supply Litton on a timely basis with information
in writing concerning any potential customer, such as their needs,
organizational structure, budget and procurement plans, provided
such information is not classified or otherwise restricted by the
Government of the Territory.
B. Consultant shall maintain good relationships with all of Litton's
actual and prospective customers in the Territory, and work
constantly and diligently in the best interests of Litton.
C. Consultant shall counsel Litton and furnish it with general
information concerning the Territory including all economic,
commercial, industrial data pertaining to potential customers and
affecting Litton's business or prospects for business.
D. Consultant shall inform Litton about the direction and trends of
technology in the Territory, both civil and military, and shall
assist Litton in evaluating civil and military organizations who
may be potential customers including their financial capacity,
technical conditions and need or desire for new projects, services,
and equipment of the type sold by Litton.
E. Consultant shall advise Litton of conditions and marketing
situations within the Territory for products, equipment or services
of the type sold by Litton.
F. Consultant shall give Litton guidance as to the customs and
procedures for "doing business" in and with personnel in the
Territory.
G. Consultant shall keep Litton informed about the activities of
its competitors in the Territory.
H. Consultant shall submit monthly reports to Litton including
such of the above information as is available. It shall further
give its written opinion on specific marketing or support matters
when requested.
I. Consultant shall familiarize itself with Litton Products and the
technical and operational data thereof.
J. Consultant shall advise when a visit by Litton personnel to a
customer or potential customer is considered timely and necessary.
K. Consultant shall set up and coordinate appointment
schedules for Litton personnel in the Territory when necessary.
EXH. 10.5-8
<PAGE> 9
L. Consultant shall, when requested by Litton, participate with
Litton's representatives in negotiations with any potential
customer.
M. Consultant shall expedite communications between Litton
and any potential customer.
Responsibilities
A. Consultant shall quote only such prices as established by
Litton and promptly forward to Litton all orders obtained.
B. Consultant shall handle and forward to Litton in writing all
inquiries and related matters brought to the attention of the
Consultant.
C. Consultant shall not make any oral or written statement
implying that performance of Litton Products are greater than
described in Litton's written guarantee applicable to the product
and/or service involved.
D. Consultant agrees that in the event personnel in the
Consultant`s organization, who in Litton's opinion are key
personnel, either become disassociated with the Consultant or are
required to devote their efforts on behalf of business unrelated to
Litton, Litton shall have the unilateral right, at its option, to
terminate in whole or in part this Agreement or modify the
compensation to be paid the Consultant.
EXH. 10.5-9
<PAGE> 10
APPENDIX C DATED 17 December 1993
CONSULTANT'S COMPENSATION
A. LITTON ORGANIZATION AND BILLING ADDRESS
APPLIED TECHNOLOGY, A Division of
LITTON SYSTEMS, INC.
4747 Hellyer Avenue
P.O. Box 7012
San Jose, CA 95150-7012
1. Monthly Fee
Consultant shall be paid a monthly fee of $4,000.
2. Expenses
Consultant's expenses are included in its monthly fee specified in
Item 1 above except as authorized specifically by Applied
Technology. Consultant shall have no claim above and beyond
such payments either during the life of this Agreement or at the
termination thereof.
3. Payment
a. Quarterly invoice for fees shall be rendered directly to the
President, Litton Applied Technology. Litton Applied
Technology shall pay the invoices within 30 days from their
receipt.
b. In the event this Agreement is terminated on a date other
than the last day of any given month, a pro-rata adjustment
of Consultant's fee will be made by Litton.
c. Litton reserves the unilateral right to pay the Consultant in
advance of the month(s) for which services are rendered.
NOTE: No commissions shall be paid for sales of Products of the Litton
organization identified in paragraph A above.
EXH. 10.5-10
<PAGE> 11
Appendix C Continued
PAGE 2
B. FORCE MAJEURE
The obligations of both Litton and the Consultant under this Agreement
shall be suspended in the event of a force majeure which operates to
preclude the normal conduct of business between Litton and its
customers. Examples of force majeure are acts of God or the public
enemy, acts of either the U.S. Government or the Government of the
Territory acting in either their sovereign or contractual capacity,
fires, floods epidemics, quarantine restrictions, strikes, freight
embargoes and unusually severe weather.
EXH. 10.5-11
