=================================================================
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
(x) Quarterly Report Pursuant To Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the quarterly period ended September 25, 1994
OR
( ) Transition Report Pursuant To Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the transition period from to
Commission file number 1-2193
LOCKHEED CORPORATION
(Exact name of registrant as specified in its charter)
State of Delaware 95-0941880
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4500 Park Granada Boulevard 91399
Calabasas, California (Zip Code)
(Address of principal executive offices)
Registrant's telephone number, including area code (818) 876-2000
Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90
days.
Yes /x/ No / /
At September 25, 1994, 63,181,594 of the Registrant's 100,000,000
authorized shares of Common Stock were outstanding, and 9,775,996 shares
were held as treasury stock. (2,957,850 shares were reserved for stock
options granted.)
==========================================================================
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
CONDENSED CONSOLIDATED STATEMENT OF EARNINGS (Unaudited)
In millions, except Third Quarter Nine Months
per-share data 1994 1993 1994 1993
==========================================================================
Sales $ 3,165 $ 3,475 $ 9,286 $ 9,332
Costs and expenses 2,946 3 249 8,665 8,748
- --------------------------------------------------------------------------
Program profits 219 226 621 584
Interest expense (38) (42) (115) (123)
Other income (deductions), net 1 3 (5) 1
- ---------------------------------------------------------------------------
Earnings before income taxes 182 187 501 462
Provision for income taxes 70 70 193 175
- --------------------------------------------------------------------------
Net earnings $ 112 $ 117 $ 308 $ 287
==========================================================================
Earnings per share $ 1.76 $ 1.85 $ 4.85 $ 4.57
- --------------------------------------------------------------------------
Average number of common and common
equivalent shares outstanding 63.6 63.1 63.5 62.8
- --------------------------------------------------------------------------
Dividend per share $ .57 $ .53 $ 1.67 $ 1.59
- --------------------------------------------------------------------------
See accompanying notes.
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (continued).
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)
Nine Months
In millions 1994 1993
==========================================================================
CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings $ 308 $ 287
Adjustments to reconcile net earnings to
net cash provided by operating activities
Depreciation and amortization 359 365
Changes in operating assets
and liabilities 76 (331)
- --------------------------------------------------------------------------
Net cash provided by operating activities 743 321
- --------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property, plant, and equipment (175) (272)
Purchase of Lockheed Fort Worth Company (1,519)
Other, net 8 19
- --------------------------------------------------------------------------
Net cash used for investing activities (167) (1,772)
- --------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
Increase (decrease) in total debt (23) 1,287
Cash dividends (105) (98)
Stock options exercised 22 53
- --------------------------------------------------------------------------
Net cash provided by (used for) financing activities (106) 1,242
- --------------------------------------------------------------------------
Increase (decrease) in cash and cash equivalents 470 (209)
Cash and cash equivalents, beginning of period 147 294
- --------------------------------------------------------------------------
Cash and cash equivalents, end of period $ 617 $ 85
==========================================================================
See accompanying notes.
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (continued).
CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited)
Dollar figures in millions, September 25, December 26,
except per-share data 1994 1993
=====================================================================
Assets
Current assets
Cash and cash equivalents $ 617 $ 147
Accounts receivable 1,595 1,644
Inventories 1,708 1,699
Other current assets 196 350
---------------------------------------------------------------------
Total current assets 4,116 3,840
Property, plant, and equipment (net of
accumulated depreciation and amortization
of $2,589 in 1994 and $2,641 in 1993) 1,841 1,950
Intangible assets related to tactical
aircraft programs acquired (net of
accumulated amortization of $159 in
1994 and $84 in 1993) 1,351 1,425
Excess of purchase price over fair value of
assets acquired (net of accumulated
amortization of $228 in 1994 and $204 in 1993) 766 782
Other noncurrent assets 951 964
---------------------------------------------------------------------
$9,025 $8,961
=====================================================================
Liabilities and Stockholders' Equity
Current liabilities
Short-term borrowings $ 14 $ 21
Accounts payable 713 841
Salaries and wages 399 355
Income taxes 82 44
Customers' advances in excess of related costs 478 606
Current portion of long-term debt 272 28
Other current liabilities 765 638
---------------------------------------------------------------------
Total current liabilities 2,723 2,533
Long-term debt 2,269 2,547
Accumulated retiree medical benefit obligation 911 942
Other long-term liabilities 433 496
Stockholders' equity
Common stock, $1 par value, 100,000,000
shares authorized; 72,957,590 shares
issued (72,471,642 in 1993) 73 73
Additional capital 825 804
Retained earnings 2,635 2,427
Treasury shares, at cost (9,775,996 shares) (454) (454)
Guarantee of ESOP obligations (390) (407)
---------------------------------------------------------------------
Total stockholders' equity 2,689 2,443
---------------------------------------------------------------------
$9,025 $8,961
=====================================================================
See accompanying notes.
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (continued).
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
General Comment
The accompanying unaudited consolidated financial information is condensed
from that which would appear in annual financial statements and should be
read in conjunction with the consolidated financial statements included in
Lockheed's Annual Report on Form 10-K for the year ended December 26, 1993.
In the opinion of management, the interim financial data reflect all
adjustments necessary for a fair presentation. Results for the third
quarter and first nine months of 1993 include certain nonrecurring
adjustments in the Aeronautical Systems segment described in Item 2. With
the exception of these items, no material adjustments other than of a
normal recurring nature were made. However, it should be understood that
accounting measurements at interim dates may be less precise than those at
year-end. Certain reclassifications have been made to the 1993 information
to conform to the 1994 presentation.
Inventories
Inventories consisted of the following components:
September 25, December 26,
In millions 1994 1993
==========================================================
Work in process $3,256 $3,166
Materials and spare parts 261 310
Advances to subcontractors 192 394
Finished goods 135 105
- ----------------------------------------------------------
3,844 3,975
Less customer advances and
progress payments 2,136 2,276
- ----------------------------------------------------------
$1,708 $1,699
==========================================================
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (continued).
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(continued)
Long-term Debt
Long-term debt consisted of the following components:
September 25, December 26,
In millions 1994 1993
=============================================================
Variable-rate notes due 1995 $ 200 $ 200
Fixed-rate notes due 1995 to 2004 140 140
4 7/8% notes due 1996 275 275
5.65% notes due 1997 100 100
5 7/8% notes due 1998 300 300
9 3/8% notes due 1999 300 300
6 3/4% notes due 2003 300 300
9% notes due 2022 200 200
7 7/8% debentures due 2023 300 300
Obligations under long-term
capital leases 18 17
Other obligations 18 36
- -------------------------------------------------------------
2,151 2,168
Guarantee of ESOP obligations 390 407
- -------------------------------------------------------------
2,541 2,575
Less portion due within one year 272 28
- -------------------------------------------------------------
$2,269 $2,547
=============================================================
During the third quarter, the company replaced the 1993 $1 billion loan
agreement (the 1993 Agreement) with a new $1 billion loan agreement (the
1994 Agreement). The covenants and restrictions of the 1994 Agreement are
substantially the same as the 1993 Agreement. The 1994 Agreement makes
funds available through September 15, 1999. The company did not replace
the 1993 $300 million loan agreement which lapsed in August 1994. At
September 25, 1994, no borrowings were outstanding under the 1994
Agreement.
<PAGE>
PART I. FINANCIAL INFORMATION
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
SELECTED FINANCIAL DATA
Third Quarter Nine Months
Dollar figures in millions 1994 1993 1994 1993
==========================================================================
Sales by segment
Aeronautical Systems $1,568 $1,697 $4,499 $4,115
Missiles and Space Systems 896 1,053 2,698 3,135
Electronic Systems 388 336 1,161 1,022
Technology Services 313 389 928 1,060
- --------------------------------------------------------------------------
Total sales $3,165 $3,475 $9,286 $9,332
==========================================================================
Program profits by segment
Aeronautical Systems $ 134 $ 131 $ 348 $ 284
Missiles and Space Systems 69 82 227 265
Electronic Systems 9 7 26 16
Technology Services 7 6 20 19
- --------------------------------------------------------------------------
Total program profits $ 219 $ 226 $ 621 $ 584
==========================================================================
Sales by customer
U. S. government: Defense 66% 66%
Nondefense 9 11
Foreign governments 14 13
Commercial 11 10
- --------------------------------------------------------------------------
Funded sign-ups* $7,886 $14,277
- --------------------------------------------------------------------------
September 25, December 26,
1994 1993
==========================================================================
Funded backlog** $11,757 $13,156
- --------------------------------------------------------------------------
Capitalization
Debt
Short-term borrowings 14 21
Long-term debt, including current portion 2,151 2,168
Guarantee of ESOP obligations 390 407
- --------------------------------------------------------------------------
Total debt 2,555 2,596
Stockholders' equity 2,689 2,443
- --------------------------------------------------------------------------
Total capitalization 5,244 5,039
- --------------------------------------------------------------------------
Number of employees 75,900 83,500
- --------------------------------------------------------------------------
*1993 included acquisition of existing funded backlog of Lockheed Fort
Worth Company of approximately $7 billion.
**Total negotiated backlog of $25.5 billion at September 25, 1994, and
$28.9 billion at December 26, 1993, includes programs under contract
to the United States and foreign governments for which funds have not
yet been allocated.
<PAGE>
PART I. FINANCIAL INFORMATION
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Lockheed's operating cycle is long term and involves
various types of production contracts and varying
production delivery schedules. Accordingly, results
of a particular quarter, or quarter-to-quarter
comparisons of recorded sales and profits, may not be
indicative of future operating results. The following
comparative analysis should be viewed in this context.
CONSOLIDATED OPERATIONS
For the first nine months of 1994, consolidated sales of $9.3 billion are
relatively unchanged from the same period in 1993. Higher sales in 1994 in
the Aeronautical Systems and Electronic Systems segments were offset by
lower sales in the Missiles and Space Systems and Technology Services
segments. Aeronautical Systems sales includes the Lockheed Fort Worth
Division for a full nine months in 1994 compared to seven months in 1993.
Consolidated sales in the third quarter of 1994 were $3.2 billion compared
with $3.5 billion in the same period of 1993. The decrease is primarily
due to lower sales in all segments except the Electronic Systems segment.
Program profits for the nine months of 1994 at $621 million were six
percent higher than the $584 million reported in 1993. The higher program
profits primarily reflect those segments with higher sales as well as
increased profit margins in most of the company's reporting segments.
Program profits in the third quarter of 1994 were $219 million, slightly
lower than the $226 million reported in the same period of 1993. The lower
program profits reflect a net gain in 1993 on several nonrecurring items in
the Aeronautical Systems segment offset in part by improved program profit
margins in most segments in 1994.
A discussion of operations by business segment begins on the next page.
The company and Martin Marietta Corporation announced on August 30, 1994,
that their respective boards of directors had approved a definitive
agreement to merge the two corporations through a tax-free exchange of
stock for a new Lockheed Martin Corporation stock. The merger, pending
governmental and stockholder approvals, is expected to be completed in the
first quarter of 1995.
INTEREST EXPENSE
Interest expense in both the third quarter and first nine months of 1994
was lower than the same periods in 1993 because of lower average borrowing
levels.
OTHER INCOME (DEDUCTIONS), NET
The net other deductions in the nine months of 1994 compared to net other
income in the nine months of 1993 primarily reflects greater miscellaneous
expenses and lower interest income from the temporary investment of excess
cash.
<PAGE>
PART I. FINANCIAL INFORMATION
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations (continued).
PROVISION FOR INCOME TAXES
For the nine months of 1994 compared to the same period in 1993, the
provision for income taxes is higher reflecting the greater earnings before
income taxes and the slightly higher tax rate in 1994. Income tax expense
for the third quarter of 1994 is relatively unchanged from the third
quarter of 1993, reflecting the lower earnings before income taxes in 1993
offset by the slightly higher tax rate in 1994.
NET EARNINGS
Net earnings for the nine months of 1994 were higher than in 1993 due to
the higher program profits and lower interest expense offset in part by net
other deductions in 1994 and the higher income tax rate. For the third
quarter of 1994 compared to 1993, the lower net earnings reflects the lower
program profits and the higher income tax rate offset in part by the lower
interest expense.
OPERATIONS BY BUSINESS SEGMENT
Aeronautical Systems revenues in the first nine months of 1994 of $4.5
billion were nine percent higher than the $4.1 billion reported in 1993.
This increase is primarily due to more C-130 deliveries (25 in 1994 versus
13 in 1993) and higher F-22 and commercial aircraft service programs
revenues. These increases are offset in part primarily by lower special
purpose aircraft revenue and lower F-16 deliveries (103 versus 111). For
the third quarter of 1994, revenues of $1.6 billion are slightly less than
the third quarter of 1993 due to the lower F-16 deliveries (30 versus 69)
offset in part by higher C-130 deliveries (11 versus 7) and higher F-22
revenues. Program profits of $348 million and $134 million in the first
nine months and third quarter of 1994, respectively, were higher than the
$284 million and $131 million in the same respective periods of 1993. The
higher program profits principally reflect a higher program profit margin
in special programs at Lockheed Fort Worth Company, improved profit margins
in most other programs, and the sales changes indicated above. Program
profits are negatively impacted by the absence in 1994 of a gain recognized
in 1993 on the settlement of a dispute with the U.S. Navy related to the
P-7A termination offset in part by charges related to declining real estate
values associated with discontinued activities in Burbank, California, and
the wide-body commercial aircraft modification facility at Norton Air Force
Base. The net effect of these nonrecurring items on the third quarter and
first nine months of 1993 was a $25 million pre-tax gain.
Missiles and Space Systems revenues in 1994 decreased 14 and 15 percent in
the first nine months and the third quarter of 1994, respectively, compared
with the same periods in 1993. The decline in the first nine months
reflects lower revenues from certain space systems programs, the Trident II
fleet ballistic missile program, and the terminated Advanced Solid Rocket
Motor and Follow-on Early Warning System programs offset in part by higher
revenues from the Theater High Altitude Area Defense (THAAD) program and
<PAGE>
PART I. FINANCIAL INFORMATION
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations (continued).
various research and development programs. The third quarter decreases are
in the same programs as the year-to-date declines, except that the third
quarter also reflects level sales in certain space systems programs and
temporarily lower THAAD program revenues. Program profits in the first
nine months and the third quarter of 1994 were 14 and 16 percent,
respectively, lower than in 1993 reflecting the sales declines as well as a
charge of $22 million related to the cancellation and final settlement of
disputes on the Mobile Satellite Antenna program. The declines and charges
were partially offset by performance incentives recognized in 1994 for the
Milstar, fleet ballistic missiles, and certain space systems programs.
Electronic Systems revenues were 14 percent and 15 percent higher for the
nine months and the third quarter of 1994, respectively, as compared to
1993, primarily reflecting higher sales of various commercial electronics
products. Program profits were greater for the first nine months and third
quarter of 1994 principally due to improved performance in commercial
electronics programs.
Technology Services revenues were lower in the nine months and third
quarter of 1994 than in the same periods of 1993 reflecting lower shuttle
processing activities, lower other NASA programs, and lower field support
activities. Program profits for the same periods are slightly higher than
the corresponding 1993 periods reflecting improved performance in several
programs.
LIQUIDITY AND CAPITAL RESOURCES
The company generated $470 million in positive cash flow including a
reduction in debt of $23 million during the first nine months of 1994 which
is reflected in the increase in cash and cash equivalents from $147 million
at year-end 1993 to $617 million at the end of the third quarter.
Positive cash flow from operating activities was $743 million for the nine
months of 1994 compared to $321 million in 1993. The increase reflects the
higher earnings and favorable trends in working capital requirements.
Earlier-than-expected resolution of certain tax issues will result in a net
cash payment of approximately $300 million in the fourth quarter rather
than in 1995 as previously anticipated. Resolution of these tax issues
will not affect net income. Cash in excess of immediate operating needs is
temporarily invested in interest-bearing instruments.
The company spent $175 million on additions to property, plant, and
equipment during the first nine months of 1994 compared with $272 million
in 1993. This decrease reflects the current plan for lower capital
expenditures.
At September 25, 1994 the total debt outstanding was essentially unchanged
from the $2.6 billion at year-end 1993. Total debt consists primarily of
intermediate and long-term notes as well as $390 million of ESOP debt which
is guaranteed by the company. Approximately $245 million of variable-rate
<PAGE>
PART I. FINANCIAL INFORMATION
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations (continued).
and fixed-rate debt becomes due in the first half of 1995 and is reflected
in current liabilities in the September 25, 1994, balance sheet.
During the third quarter, the company replaced its 1993 $1 billion loan
agreement (the 1993 Agreement) with a new $1 billion loan agreement (the
1994 Agreement) to extend the maturity by three years to September 25, 1999
and to reduce associated costs. The covenants and restrictions on the 1994
Agreement are substantially the same as the 1993 Agreement. The company
did not replace its 1993 $300 million loan agreement which lapsed in August
1994. At September 25, 1994, the company had no borrowings under the 1994
Agreement and no outstanding commercial paper borrowings.
Cash on hand and temporarily invested, internally generated funds, and
available financing resources are sufficient to meet anticipated operating
and debt service requirements and discretionary investment needs.
Stockholders' equity was approximately $2.7 billion at the nine months
ended September 25, 1994, up from approximately $2.4 billion at year-end
1993. The increase reflects the retention of the nine-month earnings in
excess of cash dividends paid, and the issuance of new shares upon the
exercise of employee stock options.
OTHER MATTERS
As a part of its downsizing activities and continuing review of property,
plant, and equipment requirements, the company has been focusing attention
on certain of its operations in view of the current and projected business
environment. Primary focus has been directed toward the Lockheed Missiles
and Space Company located predominately in Sunnyvale, California. The
assessment is not complete and the outcome will be influenced by potential
consolidation actions arising from the proposed merger with Martin Marietta
Corporation. However, in the event the merger does not proceed it is
likely that a decision will be made to reorganize activities in order to
reduce future costs and maintain a competitive position. Such activities
are likely to include a plan to accelerate vacating some of the facilities
now occupied and to sell or sublease associated properties. Although at
this time no action has been approved and no specific dollar effect can be
reasonably determined, management believes that the net impact of a
restructuring charge should be in the range of $200 million before tax,
absent any effect from the proposed merger.
The company is also evaluating the future business potential of its
commercial aircraft maintenance facility at Tucson, Arizona and, during the
fourth quarter of this year, expects to be in a position to determine the
future viability of this operation. If a decision is made to close the
Tucson facility, a charge for the costs of this action would be recorded at
that time. Management believes that the costs associated with this
possible action would be less than $40 million before tax.
<PAGE>
PART I. FINANCIAL INFORMATION
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations (continued).
ACCOUNTING MATTERS
Lockheed has adopted Statement of Financial Accounting Standards No. 112
(SFAS 112), "Employers' Accounting for Postemployment Benefits," as of
December 27, 1993. Due to the design of Lockheed's postemployment
benefit plans and previously employed accounting practices for the costs
of these benefits, the adoption of SFAS 112 had an insignificant impact on
Lockheed's financial results.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
On June 22, 1994, an indictment was returned by a federal Grand Jury
sitting in Atlanta, Georgia, against the registrant and two of its
employees. The indictment charges that the registrant and the two
employees, one of whom was a regional vice president of one of the
registrant's subsidiaries and the other a divisional director of sales for
the Middle East and North Africa, violated the Foreign Corrupt Practices
Act, conspired to violate the act, conspired to commit wire fraud, and
impaired and impeded agencies of the United States Department of Defense.
The indictment relates to allegations that the registrant retained a sales
and marketing consultant in Egypt who was a member of the Egyptian
Parliament, and that the consultant received retainer payments and a one
million dollar contract termination payment in connection with the sale by
registrant of three C-130 Hercules Aircraft, in violation of the Foreign
Corrupt Practices Act.
By letter dated August 18, 1994, the Acting Assistant Secretary,
Department of State, Bureau of Political-Military Affairs ("State
Department") advised the registrant that it would be the State Department's
policy prospectively to deny defense-related export privileges to Lockheed
Aeronautical Systems Company (LASC), a division of Lockheed Corporation.
The State Department, referring to Sections 38, 39, and 42 of the Arms
Export Control Act (22 U.S.C. Sections 2778, 2779, and 2791), announced
that its action arose from the June 22, 1994, indictment discussed above.
The State Department announced that its action is confined to LASC and does
not affect any other divisions or subsidiaries of the registrant.
Moreover, the State Department announced that the action does not apply to
any approvals granted to LASC programs before June 22, 1994, but, rather,
to future export license applications. LASC may seek exceptions to the
announced policy on a case-by-case basis at the discretion of the State
Department, Office of Defense Controls, which must consider United States
foreign policy and national security interests, as well as law enforcement
concerns.
The company is disappointed that action has been taken against LASC in
spite of the presumption of innocence, on the basis of an indictment
containing unproven allegations. The registrant intends to seek exceptions
for LASC programs which are vital to national security and foreign policy
interests.
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings (continued).
The registrant denies the alleged violations and intends to vigorously
defend itself against all charges. In the meantime, the registrant
continues to cooperate with U.S. government agencies during the course of
their investigations. After review, Lockheed believes its policies and
practices with respect to the engagement of foreign consultants have been,
and continue to be, consistent with the spirit and intent of all applicable
laws and regulations.
On October 25, 1990, the EPA issued a notice of violation to the
company alleging violations of the Clean Water Act by discharging chromium-
containing wastewater without pretreatment. The company previously
disclosed that the matter was settled and would not result in liability or
other financial impact in excess of $500,000. At the end of the third
quarter of 1994, the company paid $460,000 in settlement of the notice of
violation.
The registrant has been named in five shareholder law suits in
connection with the proposed merger between the registrant and the Martin
Marietta Corporation: Rampell v. Tellep (filed August 31, 1994 in Los
Angeles Superior Court); Stanton Discount Pharmacy, Inc. v. Tellep (filed
September 12, 1994 in Los Angeles Superior Court); Lifshitz v. Lockheed
Corp. (filed September 26, 1994 in Delaware Chancery Court); Hadian v.
Tellep (filed October 27, 1994 in Los Angeles Superior Court); and Fish v.
Bennett (filed October 26, 1994 in Los Angeles Superior Court). The
Rampell, Stanton Discount Pharmacy, Lifshitz, and Hadian suits all purport
to be class action suits filed on behalf of the registrant's shareholders
against the registrant and each member of the registrant's Board of
Directors. In sum, all four of these suits allege breaches of various
fiduciary duties, including allegations that the directors have engaged in
self-dealing and conflicts of interest, that the consideration offered in
the proposed transaction is unconscionable and grossly unfair to the
shareholders, that the $100 million termination fee in the agreement
between the registrant and Martin Marietta is an improper "lock-up"
provision, and that the proposed merger fails to maximize shareholder value
by conducting an auction or allowing for some other open bidding or "market
check" mechanism. All four actions seek to enjoin completion of the
proposed merger, and damages in an unspecified amount. Three of the
actions also seek rescission of the transaction if the merger is
consummated before the law suits are resolved.
The Fish v. Bennett suit mirrors the allegations of the other four
suits, but is brought on behalf of Martin Marietta shareholders and is
directed principally at Martin Marietta and its directors. The registrant
is named as a defendant in the Fish suit for aiding and abetting Martin
Marietta and its directors in allegedly breaching their fiduciary duties to
Martin Marietta's shareholders. The Fish suit seeks the same injunctive,
rescission, and damages relief as the four suits brought on behalf of the
registrant's shareholders.
The registrant opposes all five law suits on the grounds that the
proposed transaction is a "merger of equals" which does not involve a sale
of the registrant or of Martin Marietta, and that the directors of both
companies have thoroughly reviewed the terms of the proposed merger and
determined the transaction to be in the best interests of their respective
shareholders. The registrant and the registrant's directors intend to
contest the claims asserted against them in these law suits.
<PAGE>
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
10 $1,000,000,000 Amended and Restated Loan Agreement
dated September 15, 1994
12 Computation of Ratio of Earnings to Fixed Charges.
The registrant undertakes to file with the Commission
upon its request any agreements otherwise excluded from
Item 601 (b)(4) as not exceeding 10 percent of the total
assets of the registrant and its subsidiaries on a
consolidated basis.
(b) Reports on Form 8-K
Form 8-K dated August 18, 1994, Item 5, Other Events.
Form 8-K dated August 29, 1994, Item 5, Other Events; and
Item 7, Financial Statements, Pro Forma Financial
Information and Exhibits.
Form 8-K dated August 30, 1994, Item 5, Other Events; and
Item 7, Financial Statements, Pro Forma Financial
Information and Exhibits.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
LOCKHEED CORPORATION
(Registrant)
Date: November 8, 1994 By: /s/ C. R. MARSHALL
--------------------------------
C. R. Marshall
Vice President and Secretary
Date: November 8, 1994 By: /s/ R. E. RULON
--------------------------------
R. E. Rulon
Vice President and Controller
(Principal Accounting Officer)
EXHIBIT 10
CONFORMED
COPY
$1,000,000,000
AMENDED AND RESTATED
LOAN AGREEMENT
dated
September 15, 1994
among
LOCKHEED CORPORATION,
The BANKS Listed Herein
and
MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
as Agent
<PAGE>
TABLE OF CONTENTS*
Page
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. . . . . . . . . . . . . . . . . . 1
1.02. Accounting Terms and Determinations . . . 9
ARTICLE II
THE LOANS
SECTION 2.01. The Loans. . . . . . . . . . . . . . . . . . . 9
2.02. Method of Borrowing . . . . . . . . . . . 10
2.03. Conversion/Continuation of Loans . . . . . . 11
2.04. Notes . . . . . . . . . . . . . . . . . . 12
2.05. Payment of Principal. . . . . . . . . . . 12
2.06. Interest. . . . . . . . . . . . . . . . . 12
2.07. Optional Prepayments. . . . . . . . . . . 14
2.08. General Provisions as to Payments . . . . 14
2.09. Fees. . . . . . . . . . . . . . . . . . . 15
2.10. Reduction or Termination of Commitments . 15
2.11. Optional Increase in Commitments. . . . . 16
2.12. Lending Offices . . . . . . . . . . . . . 16
2.13. Funding Loss; Indemnity . . . . . . . . . 16
ARTICLE III
CONDITIONS TO LOANS
SECTION 3.01. Conditions to Effectiveness. . . . . .. . . . . 17
3.02. Conditions to All Loans . . . . .. . . . . 18
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Corporate Existence and Power. . . . .. . . . . 18
4.02. No Contravention. . . . . . . . . .. . . . 19
4.03. Corporate Authorization; Binding Effect. . 19
4.04. Financial Information . . . . . . . . . . 19
4.05. Litigation; Taxes . . . . . . . . . . . . 19
4.06. Margin Regulations. . . . . . . . . . . . 20
4.07. Governmental Approvals. . . . . . . . . . 20
4.08. Title to Properties . . . . . . . . . . . 20
4.09. Pari Passu Obligations. . . . . . . . . . 20
4.10. No Defaults . . . . . . . . . . . . . . . 20
4.11. Full Disclosure . . . . . . . . . . . . . 20
4.12. ERISA . . . . . . . . . . . . . . . . . . 21
4.13. Possession of Patents, Licenses, etc. . . 21
4.14. Environmental Matters. . . . . . . . . . . . 21
- -----------------
* The Table of Contents is not a part of this Agreement.
<PAGE>
ARTICLE V
COVENANTS
SECTION 5.01. Information. . . . . . . . . . . . . . . . . . 22
5.02. Payment of Obligations. . . . . . . . . . 23
5.03. Insurance . . . . . . . . . . . . . . . . 23
5.04. Maintenance of Existence. . . . . . . . . 24
5.05. Maintenance of Properties . . . . . . . . 24
5.06. Compliance With Laws. . . . . . . . . . . 24
5.07. Mergers, Consolidations and Sales of
Assets . . . . . . . . . . . . . . . . . 24
5.08. Limitation on Liens . . . . . . . . . . . 25
5.09. Net Worth . . . . . . . . . . . . . . . . 27
5.10. Total Debt to Net Worth . . . . . . . . . 28
5.11. Use of Loans. . . . . . . . . . . . . . . 28
ARTICLE VI
DEFAULTS
SECTION 6.01. Events of Default. . . . . . . . . . . . . . . 28
ARTICLE VII
THE AGENT
SECTION 7.01. Appointment and Authorization. . . . . . . . . 31
7.02. Agent and Affiliates. . . . . . . . . . . 31
7.03. Action by Agent . . . . . . . . . . . . . 31
7.04. Consultation with Experts . . . . . . . . 31
7.05. Liability of Agent. . . . . . . . . . . . 31
7.06. Indemnification . . . . . . . . . . . . . 32
7.07. Credit Decision . . . . . . . . . . . . . 32
7.08. Successor Agent . . . . . . . . . . . . . 32
7.09. Agent's Fee . . . . . . . . . . . . . . . 33
ARTICLE VIII
CHANGE IN CIRCUMSTANCES
SECTION 8.01. Increased Cost and Reduced Return; Capital
Adequacy . . . . . . . . . . . . . . . . . . . 33
8.02. Substitute Rate . . . . . . . . . . . . . 35
8.03. Illegality. . . . . . . . . . . . . . . . 35
8.04. Taxes on Payments . . . . . . . . . . . . 36
ARTICLE IX
MISCELLANEOUS
SECTION 9.01 New Banks. . . . . . . . . . . . . . . . . . . 37
9.02. Notices . . . . . . . . . . . . . . . . . 37
9.03. No Waivers. . . . . . . . . . . . . . . . 38
9.04. Expenses; Documentary Taxes; Indemnifica-
tion. . . . . . . . . . . . . . . . . . . 38
9.05. Pro Rata Treatment. . . . . . . . . . . . 38
<PAGE>
9.06. Sharing of Set-Offs . . . . . . . . . . . 38
9.07. Amendments and Waivers. . . . . . . . . . 39
9.08. Successors and Assigns; Participations;
Novation. . . . . . . . . . . . . . . . . 39
9.09. Visitation. . . . . . . . . . . . . . . . 42
9.10. Collateral. . . . . . . . . . . . . . . . 42
9.11 Usury. . . . . . . . . . . . . . . . . . . . . 42
9.12 Reference Banks. . . . . . . . . . . . . . . . 42
9.13. Governing Law; Submission to Jurisdiction 42
9.14. Counterparts; Integration . . . . . . . . 42
9.15 WAIVER OF JURY TRIAL.. . . . . . . . . . . . . 43
9.16. Confidentiality . . . . . . . . . . . . . 43
SCHEDULE I - Pricing
Exhibit A - Notice of Borrowing
Exhibit B - Notice of Conversion/Continuation
Exhibit C - Form of Note
Exhibit D - Opinion of Special Counsel for the Company
Exhibit E - Opinion of General Counsel for the Company
Exhibit F - Opinion of Special Counsel for the Agent
Exhibit G - Assignment and Assumption Agreement
<PAGE>
AMENDED AND RESTATED LOAN AGREEMENT
AGREEMENT dated September 15, 1994 among LOCKHEED
CORPORATION, the BANKS listed on the signature pages hereof and
MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Agent.
R E C I T A L S
A. The parties hereto entered into a Loan
Agreement dated August 30, 1993 (the "Original Agreement").
B. The parties desire to amend and restate the
Original Agreement as follows:
A G R E E M E N T
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. The following terms,
as used herein and in any Exhibit or Schedule hereto, have the
following meanings:
"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 Company) duly completed by such Bank.
"Agent" means Morgan Guaranty Trust Company of New
York, in its capacity as agent for the Banks hereunder, and its
successors in such capacity.
"Agreement" means the Original Agreement as amended
and restated by this Amended Agreement and as the same may be
further amended or restated from time to time in accordance with
the terms hereof.
"Amended Agreement" means this Amended and Restated
Loan Agreement dated September 15, 1994.
"Assignment and Assumption Agreement" means an
agreement, substantially in the form of Exhibit G hereto, under
which an interest of a Bank hereunder is transferred to a
Purchaser pursuant to Section 9.08(c) hereof.
"Bank" means (i) each bank or financial institution
listed on the signature pages hereof, (ii) each bank or financial
institution which becomes a Bank pursuant to either Section 9.01
or Section 9.08(c), and (iii) their respective successors.
<PAGE>
"Base Rate" means, for any day, a rate per annum
equal to the higher of (i) the Prime Rate for such day or (ii)
the sum of 1/2 of 1% plus the Federal Funds Rate for such day,
each change in the Base Rate to become effective on the day on
which such change occurs.
"Base Rate Loan" means any Loan in respect of which
interest is to be computed on the basis of the Base Rate.
"Business Day" means any day (i) except a Saturday,
Sunday or other day on which commercial banks in Los Angeles or
New York City are required or authorized by law to close and
(ii) on which commercial banks are open for international
business (including dealings in Dollar deposits) in London.
"Capitalized Lease Obligations" means any and all
lease obligations which have been capitalized on the books of the
Company or any Subsidiary.
"Change in Law" means, for purposes of Section 8.01
and Section 8.03, the adoption of any applicable law, rule or
regulation, or any change therein, 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 with any request or directive (whether or not having the
force of law) of any such authority, central bank or comparable
agency.
"Closing Date" means the date, which shall be no
later than September 15, 1994 (or such later date as shall be
agreed upon by the Company and the Agent but not later than
October 15, 1994), on which all the conditions referred to in
Section 3.01 shall have been satisfied.
"Co-Agent" means any Bank listed as Co-Agent on the
signature pages hereof.
"Commitment" means as to each Bank at any time, the
amount set forth opposite such Bank's name on the signature pages
hereof, as such amount may be increased or decreased pursuant to
the terms of this Agreement.
"Commitment Termination Date" means September 15,
1999 (or if such date is not a Business Day, the next preceding
Business Day).
"Company" means Lockheed Corporation, a Delaware
corporation, and its successors.
"Consolidated Subsidiary" means any Subsidiary that
at any time was or shall be consolidated with the Company in any
consolidated financial statement furnished under this Agreement.
<PAGE>
"Debt" means Capitalized Lease Obligations and any
indebtedness heretofore or hereafter created, issued, guaranteed
(by any Guaranty), incurred or assumed by the Company or any
Subsidiary for or in respect of money borrowed or for or in
respect of the deferred (for one hundred and eighty days or more)
purchase price of property or services purchased, excluding,
however, accounts payable (other than for borrowed money or for
such deferred purchase price) and accrued expenses incurred in
the ordinary course of business, provided that the same are not
overdue in a material amount or are being contested in good faith
and by appropriate proceedings.
"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.
"Designated Representative" means any of the
employees, R.P. Kinscherff, P.L. Robertson or M. Chung, or any
such other person as shall be so identified in an Officer's
Certificate as having been authorized by the Board of Directors
of the Company to execute a Notice of Borrowing.
"Dollars" or "$" means lawful currency of the
United States of America.
"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 Company and the Agent.
"Environmental Laws" means any and all applicable
federal, state and local statutes, regulations, ordinances,
rules, judgments, orders, decrees, permits, concessions, grants,
franchises, licenses, agreements or other governmental restric-
tions relating to the environment or to emissions, discharges or
releases of pollutants, contaminants, hazardous substances, or
hazardous 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 hazardous
wastes.
"ERISA" means the Employee Retirement Income
Security Act of 1974, as amended from time to time, and unless
the context otherwise requires, the regulations thereunder.
"ERISA Group" means the Company and all members of
a controlled group of corporations and all trades or businesses
(whether or not incorporated) under common control which,
<PAGE>
together with the Company are treated as a single employer under
Section 414 of the Internal Revenue Code.
"Eurodollar 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 Eurodollar Lending Office) or
such other office, branch or affiliate of such Bank as it may
hereafter designate as its Eurodollar Lending Office by notice to
the Company and the Agent.
"Eurodollar Loan" means any Loan in respect of
which interest is to be computed on the basis of the Eurodollar
Rate.
"Eurodollar Rate" means, in respect of any
Eurodollar Loan for any Interest Period therefor, a rate per
annum equal to the arithmetic average (rounded upwards to the
nearest 1/16th of 1%) of the respective rates per annum at which
deposits in Dollars are offered to each of the Reference Banks in
the London Interbank Market in an amount approximately equal to
the principal amount of the Eurodollar Loan of such Reference
Bank for which the Eurodollar Rate is being determined for
maturities comparable to such Interest Period as of approximately
11:00 a.m. (London time) two Business Days prior to the
commencement of such Interest Period.
"Event of Default" has the meaning set forth in
Section 6.01.
"Exchange Act" means the Securities Exchange Act of
1934, as amended.
"Facility Fee" has the meaning set forth in
Section 2.09.
"Federal Funds Rate" means, for any day, the rate
per annum (rounded upward, if necessary, to the nearest 1/100th
of 1%) equal to the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Business
Day next succeeding such day, provided that (i) if such day is
not a Business Day, the Federal Funds Rate for such day shall be
such rate on such transactions on the next preceding Business Day
as so published on the next succeeding Business Day, and (ii) if
no such rate is so published on such next succeeding Business
Day, the Federal Funds Rate for such day shall be the average
rate quoted to the Agent on such day on such transactions as
determined by it.
"GD Acquisition" means the acquisition by the
Company of the assets, and the assumption of certain liabilities,
of the tactical military aircraft business of General Dynamics
Corporation, effective February 28, 1993.
<PAGE>
"Guaranty" means any agreement, undertaking or
arrangement by which any Person guarantees, endorses or otherwise
becomes contingently liable, whether directly or indirectly, by
way of agreement, contingent or otherwise, to purchase, to
provide funds for payment, to supply funds to or otherwise invest
in a debtor or otherwise to assure a creditor against loss, upon
the indebtedness, obligation, commitment or liability of any
Person or guarantees the payment of dividends or other distribu-
tions upon the stock of any corporation; excluding, however, the
endorsement of negotiable instruments for deposit or collection
and similar transactions in the ordinary course of business.
"Interest Period" means, as to any Eurodollar Loan,
(a) initially, the period commencing on and including the date of
such Loan and ending on and including the numerically correspond-
ing day in the 1st, the 2nd, the 3rd or the 6th calendar month
thereafter, as selected by the Company in accordance with Section
2.02 and (b) thereafter, the period commencing on the last day of
the next preceding Interest Period in respect of such Loan and
ending on and including the numerically corresponding day in the
1st, the 2nd, the 3rd or the 6th calendar month thereafter, as
selected by the Company in accordance with Section 2.03, provided
that each such Interest Period which commences on the last Busi-
ness Day of a calendar month (or on any day for which there is no
numerically corresponding day in the appropriate subsequent
calendar month) shall end on the last Business Day of the appro-
priate subsequent calendar month.
Notwithstanding the foregoing: (i) if any Interest Period would
otherwise commence before and end after the Commitment Termina-
tion Date, such Interest Period shall end on the Commitment
Termination Date; (ii) each Interest Period which would otherwise
end on a day which is not a Business Day shall end on the next
succeeding Business Day (or, if such next succeeding Business Day
falls in the next succeeding calendar month, on the next preced-
ing Business Day); and (iii) notwithstanding clause (i) above, no
Interest Period shall have a duration of less than one month and,
if the Interest Period would otherwise be a shorter period,
Eurodollar Loans shall not be available hereunder.
"Internal Revenue Code" means the Internal Revenue
Code of 1986, as amended, or any successor statute.
"LFC" means Lockheed Finance Corporation, a
California corporation, all of the stock of which (except
directors' qualifying shares, if any) is owned by the Company
and/or a Consolidated Subsidiary.
"Lending Office" means, as to each Bank, (i) in the
case of its Base Rate Loans, its Domestic Lending Office and (ii)
in the case of its Eurodollar Loans, its Eurodollar Lending
Office.
<PAGE>
"Lien" means any mortgage, pledge, security
interest, assignment, conditional sale or other title retention
agreement, lien, charge or encumbrance of any kind.
"Loan" and "Loans" mean and include each and every
loan made by a Bank under this Agreement.
"Margin", for Eurodollar Loans, shall mean the
percentage determined pursuant to Section 2.06(d) and Schedule I.
"Material Debt" means Debt (other than Debt
evidenced by the Notes) of the Company and/or one or more of its
Subsidiaries, arising in one or more related or unrelated
transactions, in an aggregate principal amount exceeding
$50,000,000.
"Moody's" means Moody's Investors Service, Inc. and
its successors.
"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 or has within the
preceding five plan years made contributions, including for these
purposes any Person which ceased to be a member of the ERISA
Group during such five year period.
"Net Worth" means at any time the sum of:
(1) consolidated stockholders' equity of the
Company and the Consolidated Subsidiaries (exclusive of the
deduction in respect of the guarantee of employee stock
ownership obligations reflected under stockholders' equity
on the consolidated balance sheet of the Company and the
Consolidated Subsidiaries) minus
(2) the sum of (without duplication of deductions
in respect of items already deducted in arriving at stock-
holders' equity) (x) the book value of all assets which
would be treated as intangibles, including without limita-
tion goodwill, trade-marks, trade-names, copyrights, patents
and unamortized debt discount and expense; and (y) any
write-up in book value of assets, resulting from a revalua-
tion thereof subsequent to December 26, 1993; plus
(3) any goodwill associated with the Company's
acquisition of Sanders' Associates, Inc.; plus
(4) any write-up in book value of assets acquired,
and any goodwill and other intangible assets resulting from,
the GD Acquisition; plus
(5) transition obligations occasioned by
application of Financial Accounting Standard Board Statement
No. 106.
<PAGE>
"Note" or "Notes" has the meaning set forth in
Section 2.04.
"Notice of Borrowing" has the meaning set forth in
Section 2.02.
"Notice of Conversion/Continuation" has the meaning
set forth in Section 2.03.
"Officer's Certificate" means a certificate signed
by a financial officer of the Company, in form and substance
satisfactory to the Agent.
"Original Agreement" has the meaning set forth in
the recitals hereto.
"Original Commitment" means $1,000,000,000.
"Parent" means with respect to any Bank, any Person
controlling such Bank.
"Participant" has the meaning set forth in
Section 9.08(b).
"PBGC" means the Pension Benefit Guaranty
Corporation or any entity succeeding to any or all of its
functions under ERISA.
"Person" means any individual, firm, company,
corporation, joint venture, joint-stock company, trust,
unincorporated organization, government or state entity, or any
association or partnership (whether or not having separate legal
personality) of two or more of the foregoing.
"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.
"Post-Default Rate" means, with respect to any Loan
or any interest payment at any date on or after the due date of
such Loan or interest payment, a rate per annum equal to the sum
of 2% plus the higher of (i) the Base Rate for such date and (ii)
the rate, if any, otherwise applicable to the relevant Loan at
such date.
<PAGE>
"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.
"Principal Property" means any manufacturing
facility located within the United States of America (other than
its territories or possessions) and owned by the Company or any
Subsidiary, except any such facility which, in the opinion of the
Board of Directors of the Company, is not of material importance
to the business conducted by the Company and its Subsidiaries,
taken as a whole.
"Purchaser" has the meaning set forth in Section
9.08(c).
"Quarterly Date" means the last day of February,
May, August and November in each year, commencing November 30,
1994.
"Rating Agency" means any one of Duff & Phelps
Inc., Fitch Investors Service Inc., Moody's, S&P and their
successors.
"Reference Banks" means, in reference to the
Eurodollar Rate or to Eurodollar Loans, Morgan Guaranty Trust
Company of New York, Barclays Bank PLC and National Westminster
Bank PLC.
"Required Banks" means at any time and for any
specific purpose the Bank or Banks holding at least 60% in
aggregate unpaid principal amount of the Loans, or if no Loans
are at the time outstanding, having at least 60% of the Total
Commitments.
"Restricted Subsidiary" means any Subsidiary which
owns or leases a Principal Property.
"Retiring Bank" has the meaning set forth in
Section 8.01(d).
"S&P" means Standard & Poor's Corporation and its
successors.
"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 Company. LFC is not a
Subsidiary for the purposes of this Agreement.
"Taxes" has the meaning set forth in Section 8.04.
"Total Commitments" shall mean, at the time for any
determination thereof, the aggregate of the Commitments of the
Banks.
"Transferee" has the meaning set forth in
Section 9.08(e).
<PAGE>
"Unfunded Liabilities" means, with respect to any
Plan at any time, the amount (if any) by which (i) the present
value of all benefits under such Plan exceeds (ii) the fair
market value of all Plan assets allocable to such benefits
(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 an appointed
trustee under Title IV of ERISA.
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 Company's independent public accountants)
with the most recent audited consolidated financial statements of
the Company and its Consolidated Subsidiaries delivered to the
Banks; provided that, if the Company notifies the Agent that the
Company wishes to amend any covenant contained in Article V to
eliminate the effect of any change after the date hereof in
generally accepted accounting principles (which, for purposes of
this proviso shall include the generally accepted application or
interpretation thereof) on the operation of such covenant (or if
the Agent notifies the Company that the Required Banks wish to
amend any such covenant for such purpose), then the Company'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 with-
drawn or such covenant is amended in a manner satisfactory to the
Company and the Required Banks.
ARTICLE II
THE LOANS
SECTION 2.01. The Loans. On or after the Closing
Date each of the Banks severally agrees upon the terms and
conditions of this Agreement, to make Eurodollar Loans and/or
Base Rate Loans to the Company under this Section 2.01 from time
to time prior to the Commitment Termination Date or the
termination in full of such Bank's Commitment, whichever is
earlier, at such time and in such amount as to each such Loan as
the Company shall request, up to but not exceeding in aggregate
principal amount at any one time outstanding as to all such Loans
from such Bank such Bank's Commitment in effect at such time.
Within such limits, the Company may borrow, repay and reborrow
under this Section 2.01. Each borrowing from the Banks shall be
in an aggregate amount of not less than $25,000,000 and in
multiples of
<PAGE>
$5,000,000. There may be outstanding Eurodollar Loans with no
more than 15 different Interest Periods at any one time.
SECTION 2.02. Method of Borrowing. (a) The
Company shall give the Agent written or telephonic notice (a
"Notice of Borrowing") no later than 11:30 a.m. (New York time)
(i) at least three Business Days before the date of each
borrowing hereunder on the basis of the Eurodollar Rate and (ii)
on the day of each borrowing hereunder on the basis of the Base
Rate, specifying in each case the amount to be borrowed, the date
of the borrowing, any election as between the Base Rate and the
Eurodollar Rate, and, if the Eurodollar Rate is elected, a
selection of the applicable Interest Period. A written Notice of
Borrowing shall be executed by two officers or an officer and a
Designated Representative and shall be substantially in the form
of Exhibit A hereto. A telephonic Notice of Borrowing hereunder
may only be provided by an officer or a Designated
Representative, such notice to be promptly followed by a written
Notice of Borrowing executed as set forth above.
(b) Upon receipt of the Notice of Borrowing, the
Agent shall give each Bank prompt notice of each such borrowing,
specifying the relevant information including such Bank's pro
rata portion of such borrowing and the date on which funds are to
be made available. If a Notice of Borrowing is revoked by the
Company after receipt thereof by the Agent, the Company shall be
subject to the provisions of Section 2.13.
(c) Not later than 3:00 p.m. (New York time) on
the date specified by the Agent pursuant to Section 2.02(b), each
Bank shall make available its share of the borrowing, in Dollars,
in immediately available funds, to the Agent at its address
referred to in Section 9.02. Unless (i) the Agent has not
received a written Notice of Borrowing pursuant to Section
2.02(a) or (ii) the Agent determines that any applicable condi-
tion set forth in Article III has not been satisfied, the amounts
so received by the Agent shall be made available not later than
4:00 p.m. (New York time) on such date to the Company by wire
transfer in Dollars, in immediately available funds, to an
account of the Company maintained at a financial institution
located in the United States designated by the Company to the
Agent.
(d) Unless the Agent shall have received notice
from a Bank at least one Business Day prior to the date of the
borrowing that such Bank will not make available to the Agent
such Bank's share of the borrowing, the Agent may assume that
such Bank has made such share available to the Agent on the date
of the borrowing in accordance with subsection (c) of this
Section 2.02 and the Agent may, in reliance upon such assumption,
make available to the Company on such date a corresponding
amount. If and to the extent that such Bank shall not have so
made such share available to the Agent, such Bank and the Company
severally agree to repay to the Agent forthwith on demand such
corresponding
<PAGE>
amount together with interest thereon, for each day from the date
such amount is made available to the Company 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 for
purposes of this Agreement, and the Company shall not be required
to repay such amount pursuant to this subsection (d).
(e) The failure of any Bank to make a Loan
required to be made by it as part of any borrowing hereunder
shall not relieve any other Bank of its obligation, if any,
hereunder to make its Loan on the date of such borrowing, but no
Bank shall be responsible for the failure of any other Bank to
make the Loan to be made by such other Bank on the date of the
borrowing.
SECTION 2.03. Conversion/Continuation of Loans.
(a) The Company shall have the option to (i) convert all or any
part of (A) outstanding Base Rate Loans equal to $25,000,000 and
multiples of $5,000,000 in excess of that amount to Eurodollar
Loans and (B) outstanding Eurodollar Loans equal to $25,000,000
and multiples of $5,000,000 in excess of that amount to Base Rate
Loans, or (ii) upon the expiration of any Interest Period appli-
cable to outstanding Eurodollar Loans, to continue all or any
portion of such Loans equal to $25,000,000 and multiples of
$5,000,000 in excess of that amount as Eurodollar Loans. The
Interest Period of any Base Rate Loan converted to a Eurodollar
Loan shall commence on the date of such conversion. The succeed-
ing Interest Period of any Eurodollar Loan continued pursuant to
clause (ii) above shall commence on the last day of the Interest
Period of the Loan so continued. Eurodollar Loans may only be
converted into Base Rate Loans on the last day of the then
current Interest Period applicable thereto or on the date
required pursuant to Section 8.03.
(b) The Company shall deliver a written or
telephonic notice of such continuation or conversion (a "Notice
of Conversion/Continuation") to the Agent no later than 11:30
a.m. (New York time) at least three Business Days in advance of
the date of the proposed conversion to, or continuation of, a
Eurodollar Loan, and on the day of a conversion to a Base Rate
Loan. A written Notice of Conversion/Continuation shall be
executed by two officers or an officer and a Designated
Representative, shall be in substantially the form attached as
Exhibit B and shall specify: (i) the proposed onversion/
continuation date (which shall be a Business Day), (ii) the
aggregate amount of the Loans being converted/continued, (iii) an
election between the Base Rate and the Eurodollar Rate and (iv),
in the case of a conversion to, or a continuation of, Eurodollar
Loans, the requested Interest Period. A telephonic Notice of
Conversion/Continuation may only be provided by an officer or a
Designated Representative, which notice must, to be effective, be
promptly followed by a written Notice of Conversion/Continuation
executed as set forth above. If no timely Notice of Conversion/
Continuation is delivered by the Company as to any Eurodollar
Loan and such Loan is
<PAGE>
not repaid by the Company at the end of the applicable Interest
Period, such Loan shall be converted to a Base Rate Loan.
SECTION 2.04. Notes. (a) The Loans of each Bank
shall be evidenced by a single note (each a "Note" and collec-
tively the "Notes") payable to the order of such Bank for the
account of its 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 Company 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 C 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(g), the Agent shall forward such Note to such Bank.
Each Bank shall record the date and amount of each Loan made by
it and the date and amount of each payment of principal made by
the Company 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 nota-
tions 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 Company hereunder or under the Notes. Each
Bank is hereby irrevocably authorized by the Company to so
endorse its Note and to attach to and make a part of its Note a
continuation of any such schedule as and when required.
SECTION 2.05. Payment of Principal. Each Loan
shall fall due and be paid as to principal on the Commitment
Termination Date.
SECTION 2.06. Interest. Payment of interest on
the Loans shall be in accordance with the following:
(a) Interest shall, subject to any decrease or
increase pursuant to clause (d) of this Section 2.06, accrue
(x) on each Base Rate Loan for each day at the Base Rate for such
day and (y) on each Eurodollar Loan, for each day during each
period commencing on the first day of an Interest Period therefor
to but excluding the last day of such Interest Period, at a rate
per annum equal to the sum of the Eurodollar Rate for such
Interest Period plus the Margin for such day, all as elected and
specified in a notice to the Agent furnished pursuant to Section
2.02(a) or Section 2.03; provided that:
(i) each election by the Company as between
the Base Rate and the Eurodollar Rate shall be made, as
<PAGE>
among the Banks, pro rata in accordance with the Loans held
by them respectively (or, if no Loans are outstanding, pro
rata in accordance with their respective Commitments),
except as variation from such pro-rationing may be required
by virtue of suspension as to a particular Bank of its
Commitment to make Eurodollar Loans, as contemplated by
Section 8.03(a);
(ii) subject to the other provisions of this
Section 2.06, there may be outstanding hereunder at the same
time Loans (or portions thereof) which are Base Rate Loans
and other Loans (or portions thereof) which are Eurodollar
Loans; and
(iii) there may be outstanding Eurodollar
Loans with no more than 15 different Interest Periods at any
one time.
(b) Interest accrued on a Base Rate Loan shall be
paid on each Quarterly Date and on the date of any repayment or
prepayment thereof or any conversion thereof pursuant to Section
2.03. Interest accrued on a Eurodollar Loan shall be paid on the
last day of the Interest Period for such Loan and the date of any
prepayment pursuant to Section 2.07 or conversion pursuant to
Section 8.03.
(c) Interest on past-due principal and interest
shall accrue at the applicable Post-Default Rate during the
period from and including the due date thereof to but excluding
the date that such amount is paid and shall be payable on demand.
(d) The Margin shall be determined by reference to
the lower rating of the Company's two highest senior long-term
debt ratings, as announced by any two Rating Agencies (one of
which must be either S&P or Moody's), and Schedule I hereto. Any
change in the Margin shall become effective on the day on which
such a Rating Agency shall have publicly announced such ratings
change.
(e) The Agent shall determine each interest rate
applicable to the Loans hereunder. The Agent shall give prompt
notice to the Company and the Banks of each rate of interest so
determined, and its determination thereof shall be conclusive in
the absence of manifest error.
(f) Each Reference Bank agrees to use its best
efforts to furnish quotations to the Agent by 10:30 a.m. (New
York time) on the day such quotations are required to be
furnished hereunder. 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 8.02
shall apply.
<PAGE>
(g) Interest on Eurodollar Loans and on Base Rate
Loans (if the Federal Funds Rate is the basis for the effective
rate of interest) shall be computed on the basis of a year of 360
days and paid for the actual number of days elapsed, calculated
as to each Interest Period (or period ending on a repayment date
or date of conversion to a Eurodollar Loan or prepayment date
selected pursuant to Section 2.07 or required pursuant to Section
8.03) from and including the first day thereof to but excluding
the last day thereof. Interest on Base Rate Loans (if the Prime
Rate is the effective rate of interest) shall be computed on the
basis of a year of 365 or 366 days, as the case may be, and paid
for the actual number of days elapsed, calculated from and
including the date of such Base Rate Loan to but excluding the
date of repayment or conversion of such Loan to a Eurodollar
Loan.
SECTION 2.07. Optional Prepayments. The Company
shall have the right at any time or from time to time to prepay
the Loans in whole or in part, without penalty or premium,
provided that (a) the Company shall provide the Agent with notice
thereof not later than 11:30 a.m. (New York City time) on (i) the
date of prepayment, in the case of Base Rate Loans or (ii) the
third Business Day prior to the date of prepayment, in the case
of Eurodollar Loans, (b) each partial prepayment shall be in an
aggregate amount of not less than $25,000,000 and (c) interest on
the amount prepaid, accrued to the prepayment date, shall be paid
on such prepayment date.
SECTION 2.08. General Provisions as to Payments.
(a) All payments by the Company of principal, interest, Facility
Fee and other charges under this Agreement shall be made not
later than 3:00 p.m. (New York time) on the date when due, in
Dollars, in immediately available funds, to the Agent at its
address referred to in Section 9.02. 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, interest, Facility Fee or any other amounts
payable to the Banks hereunder shall be due on a day which is not
a Business Day, the date for payment thereof shall be extended to
the next succeeding Business Day unless such Business Day falls
in another calendar month, in which case the date for payment
thereof shall be the next preceding 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 Company prior to the date on which any payment is due to
the Banks hereunder that the Company will not make such payment
in full, the Agent may assume that the Company 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 Company shall not have so
made such
<PAGE>
payment, each Bank shall repay to the Agent forthwith on demand
such amount distributed to such Bank together with interest
thereon, for each day from the date such amount is distributed to
such Bank until the date such Bank repays such amount to the
Agent, at the Federal Funds Rate.
SECTION 2.09. Fees. The Company agrees to pay to
the Banks a facility fee (the "Facility Fee") on the daily
average of the Total Commitments at a rate per annum determined
by reference to the lower rating of the Company's two highest
senior long-term debt ratings, as announced by any two Rating
Agencies (one of which must be S&P or Moody's), and Schedule I
hereto (except that any unpaid Facility Fee that accrues prior to
the Closing Date shall be calculated pursuant to Schedule I to
the Original Agreement and shall be payable to such financial
institutions in such commitment amounts as set forth in the
Original Agreement). Any change in the Facility Fee shall become
effective on the day on which such a Rating Agency shall have
publicly announced a change in such rating. The Facility Fee
shall (i) be computed on the basis of a year of 360 days for the
actual number of days elapsed, (ii) be payable on each Quarterly
Date during the period from and including the Closing Date to but
excluding the Commitment Termination Date and on the Commitment
Termination Date, and (iii) be paid by the Company to the Agent
for the account of the Banks. Notwithstanding the foregoing,
Facility Fees in respect of the Commitment of any Bank shall
cease to accrue, and accrued but unpaid Facility Fees shall be
payable, on the date (if any) on which such Bank's Commitment is
terminated pursuant hereto.
SECTION 2.10. Reduction or Termination of
Commitments.
After the Closing Date, the Company shall have the
right at any time or from time to time, upon not less than 3
Business Days' prior written notice to the Agent, to terminate
the Commitments of the Banks, in whole or in part, provided that
each partial termination shall be in an aggregate amount of not
less than $25,000,000 and a multiple of $5,000,000, and shall
reduce the respective Commitments of all the Banks proportion-
ately (the signature pages hereto shall be deemed to be amended
to reflect the reduction in such Commitment). If after giving
effect to such reduction, the aggregate principal amount of the
outstanding Loans exceeds the Commitments as then reduced, the
Company shall on such date ratably prepay the Loans to the extent
of such excess, all in accordance with subsections (a) and (c) of
Section 2.07 and Section 2.13. The Agent shall give prompt
written notice to each Bank of each such termination. The
Commitment of a Bank may also be terminated under the provisions
of Section 8.01(d).
<PAGE>
SECTION 2.11. Optional Increase in Commitments.
At any time, if no Default has occurred and is
continuing, a Bank may at the request of the Company increase
such Bank's Commitment. The effectiveness of any such increase
is subject to the satisfaction of the following conditions:
(i) that the Company shall provide prompt notice
of such increase to the Agent, who shall promptly
notify the other Banks; and
(ii) if the increase in Commitments, together with
all other increases in Commitments pursuant to this
Section 2.11 since the date of this Agreement, exceeds
10% of the Original Commitment, the Company shall have
received the written consent of Banks representing 100%
of the Total Commitments.
Upon any such increase in any Bank's Commitment, the signature
pages hereto shall be deemed to be amended to reflect such
increase in such Commitment.
SECTION 2.12. Lending Offices. Each Loan shall be
made and maintained by the Lending Office of each respective
Bank. Subject to the provisions of Sections 8.01, 8.03 and
9.08(d), each Bank may transfer any Loan to or designate a
different office of itself or any subsidiary or affiliate and
such office shall thereupon become a Lending Office.
SECTION 2.13. Funding Loss; Indemnity. The
Company shall indemnify and hold harmless each Bank in respect of
any funding costs and/or losses (but excluding loss of Margin for
the period after any payment, conversion or failure to borrow as
described herein) in the event that the Company makes any payment
of principal with respect to, or converts, any Eurodollar Loan on
any day other than the last day of an Interest Period (pursuant
to Section 2.07 or otherwise) or any borrowing notified to the
Banks pursuant to Section 2.02 relative to Eurodollar Loans shall
not be consummated because of the Company's failure to satisfy
one or more of the applicable conditions precedent in Article III
or because the Company fails to borrow or convert at the
specified time. Any Bank claiming indemnity from the Company for
costs and/or losses pursuant to this Section 2.13 shall provide
the Company and the Agent with a certificate as to the amount of
such costs and/or losses, which certificate shall be conclusive
absent manifest error.
<PAGE>
ARTICLE III
CONDITIONS
SECTION 3.01. Conditions to Effectiveness. This
Amended Agreement shall become effective on the date that each of
the following conditions shall have been satisfied (or waived in
accordance with Section 9.07):
(a) Execution. The Agent and the Company shall
each have received one or more counterparts of this Agreement
executed by each of the parties hereto.
(b) Account. The Company shall have designated in
writing to the Agent its account pursuant to Section 2.02(c).
(c) Signatures. The Company shall have certified
the name and signature of each officer authorized to sign this
Agreement and the Notes and each officer and Designated Represen-
tative authorized to give Notices of Borrowing or give Notices of
Conversion/Continuation under this Agreement. The Banks may
conclusively rely on such certification until they respectively
receive notice in writing to the contrary.
(d) Opinion of Company Counsel. The Agent shall
have received (i) an opinion of O'Melveny & Myers, special
counsel for the Company, substantially in the form of Exhibit D
hereto and (ii) an opinion of the General Counsel or the
Assistant General Counsel of the Company substantially in the
form of Exhibit E hereto; the Company hereby expressly instructs
each such counsel to prepare such opinion for the benefit of the
Agent and the Banks.
(e) Opinion of Bank Counsel. The Agent shall have
received an opinion of Davis Polk & Wardwell, special counsel for
the Agent, substantially in the form of Exhibit F hereto.
(f) Proof of Corporate Action. The Company shall
have delivered copies certified by its Secretary or Assistant
Secretary of its charter and by-laws and of all corporate action
taken by the Company to authorize the execution, delivery and
performance of this Agreement and the Notes and the borrowing
hereunder.
(g) Notes. The Company shall have executed and
delivered for each Bank a Note, each dated the Closing Date and
payable to such Bank.
On the Closing Date the Original Agreement will be
automatically amended and restated in its entirety to read as set
forth in this Amended Agreement; provided the rights and
obligations of the parties hereto with respect to the period
prior to the Closing Date shall continue to be governed by the
provisions of the Original Agreement. The notes delivered to
<PAGE>
each financial institution under the Original Agreement shall be
cancelled and Notes under this Amended Agreement shall be given
in substitution thereof. Each Bank shall promptly after the
Closing Date deliver to the Borrower for cancellation the note
delivered to such Bank under the Original Agreement.
SECTION 3.02. Conditions to All Loans. The
obligation of each Bank to make each Loan to be made by it on or
after the Closing Date (including the initial Loan) is subject to
the following conditions precedent:
(a) Events of Default, etc. No Event of Default
shall have occurred and be continuing; except as otherwise
described by the Company in a writing to the Agent and waived by
the Required Banks, the representations of the Company in Article
IV (other than Sections 4.05(a), 4.14 and the last sentence of
Section 4.04), and in any writing furnished to the Banks pursuant
to the terms of this Agreement shall be true on and as of the
date of such Loan with the same force and effect as if made on
and as of such date; and except as otherwise described by the
Company in writing to the Agent and waived by the Required Banks,
no lawsuit or proceeding shall be pending (or, to the knowledge
of the Company, threatened) against the Company or any
Consolidated Subsidiary which is reasonably likely to have a
material adverse effect upon the consolidated financial condition
of the Company and the Consolidated Subsidiaries or upon the
ability of the Company to carry out the transactions contemplated
by this Agreement.
(b) Company Representation. Each Notice of
Borrowing given by the Company pursuant to Section 2.02 shall
constitute a representation by the Company as to the satisfaction
in respect of such borrowing of the conditions referred to in
Section 3.02(a).
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
The Company represents and warrants that:
SECTION 4.01. Corporate Existence and Power. Each
of the Company and its Subsidiaries is a corporation duly
organized and validly existing under the laws of the state of its
incorporation without limitation on the duration of its
existence, is in good standing therein, and is duly qualified to
transact business in all jurisdictions where such qualification
is necessary, except for such jurisdictions where the failure to
be so qualified or licensed will not materially adversely affect
the consolidated financial condition of the Company and its
Consolidated Subsidiaries, taken as a whole, or prevent the
enforcement of contracts to which the Company is a party; and the
Company has
<PAGE>
corporate power to enter into and perform this Agreement and to
borrow and issue Notes as contemplated by this Agreement.
SECTION 4.02. No Contravention. The execution and
delivery by the Company of this Agreement and the issuance of the
Notes in accordance herewith, and the performance by the Company
of its obligations under this Agreement and the Notes, do not
contravene, or constitute a default under, any provision of
applicable law or regulation or the Company's Certificate of
Incorporation or By-laws or any indenture, agreement, instrument,
judgment or order to which the Company is a party or by which it
or any of its material assets or properties may be bound or
affected.
SECTION 4.03. Corporate Authorization; Binding
Effect.
The Company has taken all corporate action necessary to authorize
its execution and delivery of this Agreement and the Notes and
the consummation of the transactions contemplated hereby; this
Agreement constitutes, and the Notes when issued in accordance
herewith will constitute, the valid and binding agreements of the
Company enforceable against the Company in accordance with their
respective terms, except to the extent limited by bankruptcy,
reorganization, insolvency, moratorium and other similar laws of
general application relating to or affecting the enforcement of
creditors' rights or by general equitable principles.
SECTION 4.04. Financial Information. The
consolidated balance sheet of the Company and the Consolidated
Subsidiaries dated as of December 26, 1993, and the related
consolidated statements of earnings and cash flows of the Company
and the Consolidated Subsidiaries for the period ended on
December 26, 1993 (hereinafter in this Section collectively
referred to as the "Financial Statements"), with the opinion of
Ernst & Young with respect to the Financial Statements, furnished
to the Banks prior to the execution of this Agreement, fairly
present the consolidated financial condition of the Company and
the Consolidated Subsidiaries as of December 26, 1993, and the
results of their operations for the period ended on December 26,
1993, all in conformity with generally accepted accounting
principles applied on a consistent basis, except as otherwise
stated in such opinion of Ernst & Young. Since December 26,
1993, there has been no material adverse change in the
consolidated financial condition of the Company and the
Consolidated Subsidiaries from that shown by the Financial
Statements.
SECTION 4.05. Litigation; Taxes. (a) There are no
suits, actions or proceedings pending, or to the knowledge of the
Company threatened, against or affecting the Company or any
Consolidated Subsidiary, the adverse determination of which is
reasonably likely to occur, and if so adversely determined would
have a material adverse effect on the consolidated financial
condition of the Company and the Consolidated Subsidiaries.
<PAGE>
(b) The Company and each Subsidiary have filed all
tax returns which to the knowledge of the Company were required
to be filed and have paid all taxes shown thereon to be due,
including interest and penalties, or provided reserves believed
by the Company to be adequate for payment thereof except for (i)
those not yet delinquent, (ii) those the nonpayment of which
would not be reasonably likely to result in a material adverse
effect on the consolidated financial condition of the Company and
its Consolidated Subsidiaries and (iii) those being contested in
good faith.
SECTION 4.06. Margin Regulations. No part of the
proceeds of any Loan will be used in a manner which would
violate, or result in a violation of, Regulation G, T, U or X of
the Board of Governors of the Federal Reserve System.
SECTION 4.07. Governmental Approvals. No consent,
approval, authorization, permit or license from, or registration
or filing with, any United States, state or other regulatory
authority is required in connection with the making of this
Agreement or the making or payment of the Notes, with the excep-
tion of routine periodic filings made under the Exchange Act.
SECTION 4.08. Title to Properties. The Company
and all Subsidiaries have good title to their respective
properties and assets, free and clear of all Liens, except such
as are permitted by Section 5.08 and except covenants,
restrictions, rights (including reservations of mineral rights
and surface rights incidental thereto), easements and minor
irregularities in title which do not interfere with the
occupation, use and enjoyment by the Company or such Subsidiaries
of such properties and assets in the normal course of business as
presently conducted or materially impair the value thereof for
such business.
SECTION 4.09. Pari Passu Obligations. Under
applicable United States laws in force at the date hereof, the
claims and rights of the other parties hereto against the Company
under this Agreement and the Notes will not be subordinate to,
and will rank at least pari passu with, the claims and rights of
any other unsecured creditors of the Company (except to the
extent provided by bankruptcy, reorganization, insolvency,
moratorium and other similar laws of general application relating
to or affecting the enforcement of creditors' rights).
SECTION 4.10. No Defaults. The obligations of the
Company and the Subsidiaries existing on the date hereof in
respect of any Material Debt are not overdue, or otherwise in
default, in any material respect.
SECTION 4.11. Full Disclosure. All information
furnished to the Banks in writing prior to the date hereof in
connection with the transactions contemplated hereby does not,
collectively, contain any misstatement of a material fact or omit
to state a fact necessary to make the statements contained
<PAGE>
therein, in the light of the circumstances under which they were
made, not misleading in any material respect on and as of the
date hereof.
SECTION 4.12. 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 made any amendment to any Plan which, in
either case has resulted or could result in the imposition of a
material Lien or the posting of a material bond or other material
security under ERISA or the Internal Revenue Code or
(iii) incurred any material liability under Title IV of ERISA
other than a liability to the PBGC for premiums under Section
4007 of ERISA.
SECTION 4.13. Possession of Patents, Licenses,
etc. The Company and each Subsidiary own or possess all patents,
trademarks, service marks, trade names, copyrights, licenses and
other rights that are necessary in any material respect for the
ownership, maintenance and operation of their respective proper-
ties and assets, and neither the Company nor any Subsidiary is in
violation of any provision thereof in any material respect.
SECTION 4.14. Environmental Matters. The
Financial Statements described in Section 4.04 provide certain
information regarding the Company's current and potential
obligations arising from various consent decrees, cleanup and
abatement orders, and current or potential proceedings pertaining
to actual or alleged soil and water contamination, disposal of
hazardous wastes, and other environmental matters related to
properties currently owned by the Company or its Subsidiaries,
previously owned properties, and other properties. Since
December 26, 1993, environmental matters have not caused any
material adverse change in the consolidated financial condition
of the Company and the Consolidated Subsidiaries from that shown
by such Financial Statements.
In the ordinary course of its business, the Company
from time to time reviews the ongoing operations of the Company
and its Restricted Subsidiaries to determine compliance with
applicable Environmental Laws. Based on these reviews, to the
best knowledge of the Company, ongoing operations at the
Principal Properties are currently being conducted in substantial
compliance with applicable Environmental Laws except to the
extent that noncompliance would not be reasonably likely to
result in a material adverse effect on the consolidated financial
condition of the Company and its Consolidated Subsidiaries.
<PAGE>
ARTICLE V
COVENANTS
From the Closing Date and so long as any
Commitments of the Banks shall be outstanding and until the
payment in full of all Loans outstanding under this Agreement and
the performance of all other obligations of the Company under
this Agreement, the Company agrees that, unless the Required
Banks shall otherwise consent in writing:
SECTION 5.01. Information. The Company will
deliver to each of the Banks:
(a) as soon as available and in any event within
60 days after the end of each of its first three quarterly
account periods in each fiscal year, consolidated statements of
earnings and cash flows of the Company and the Consolidated
Subsidiaries for the period from the beginning of such fiscal
year to the end of such fiscal period and the related
consolidated balance sheet of the Company and the Consolidated
Subsidiaries as at the end of such fiscal period, all in
reasonable detail and certified by a financial officer of the
Company, subject, however, to year-end audit adjustments, which
certificate shall include a statement that such officer has no
knowledge, except as specifically stated, of any Default;
(b) as soon as available and in any event within
120 days after the end of each fiscal year, consolidated
statements of earnings and cash flows of the Company and the
Consolidated Subsidiaries for such year and the related
consolidated balance sheets of the Company and the Consolidated
Subsidiaries as at the end of such year, all in reasonable detail
and accompanied by (i) an opinion of independent public
accountants of recognized standing selected by the Company and
acceptable to the Agent as to such consolidated financial
statements, and (ii) a certificate signed by a financial officer
of the Company stating that such consolidated financial
statements fairly present the consolidated financial condition
and results of operations of the Company and the Consolidated
Subsidiaries as at the end of such year and for the year involved
and that such officer has no knowledge, except as specifically
stated, of any Default;
(c) promptly after their becoming available:
(i) copies of all financial statements,
stockholder reports and proxy statements which the Company
shall have sent to its stockholders generally; and
(ii) copies of all registration statements filed by
the Company under the Securities Act of 1933, as amended
(other than registration statements on Form S-8 or any
registration statement filed in connection with a dividend
reinvestment
<PAGE>
plan), and regular and periodic reports, if any, which the
Company or any Consolidated Subsidiary shall have filed with
the Securities and Exchange Commission (or any governmental
agency or agencies substituted therefor) under Section 13 or
Section 15(d) of the Exchange Act, or with any national or
international securities exchange (other than those on Form
11-K or any successor form);
(d) from time to time, with reasonable promptness,
but subject to restrictions imposed by applicable security
clearance regulations, such further information regarding the
business and financial condition of the Company and its
Subsidiaries as any Bank may reasonably request through the
Agent;
(e) prompt notice of the occurrence of any
Default;
(f) promptly following any change in a rating of
the Company's outstanding senior long-term debt by a Rating
Agency, notice thereof; and
(g) prompt notice of all litigation and of all
proceedings before any governmental or regulatory agency pending
(or, to the knowledge of the Company, threatened) and affecting
the Company or any Subsidiary, except litigation or proceedings
which, if adversely determined, would not materially affect the
consolidated financial condition of the Company and the
Consolidated Subsidiaries.
Each set of financial statements delivered pursuant
to clause (a) or clause (b) of this Section 5.01 shall be
accompanied by or include the computations showing, in detail
satisfactory to the Agent, whether the Company was at the end of
the respective fiscal period in compliance with the provisions of
clauses (i) and (o) of Section 5.08, Section 5.09 and Section
5.10.
SECTION 5.02. Payment of Obligations. The Company
will pay and discharge, and will cause each Subsidiary to pay and
discharge, all material taxes, assessments and governmental
charges or levies imposed upon it or upon its income or profits,
or upon any property belonging to it, prior to the date on which
penalties attach thereto, and all lawful material claims which,
if unpaid, might become a Lien upon the property of the Company
or such Subsidiary; provided that neither the Company nor any
such Subsidiary shall be required to pay any such tax, assess-
ment, charge, levy or claim (i) the payment of which is being
contested in good faith and by proper proceedings, (ii) those not
yet delinquent and (iii) those the non-payment of which would not
be reasonably likely to result in a material adverse effect on
the consolidated financial condition of the Company and its
Consolidated Subsidiaries.
SECTION 5.03. Insurance. The Company will
maintain, and will cause each Subsidiary to maintain, insurance
from
<PAGE>
responsible companies in such amounts and against such risks as
is customarily carried by owners of similar businesses and
properties in the same general areas in which the Company or such
Subsidiary operates.
SECTION 5.04. Maintenance of Existence. The
Company will preserve and maintain, and will cause each
Subsidiary to preserve and maintain, its corporate existence and
all of its rights, privileges and franchises necessary or
desirable in the normal conduct of its business, and conduct its
business in an orderly, efficient and regular manner. Nothing
herein contained shall prevent the termination of the business or
corporate existence of any Subsidiary which in the judgment of
the Company is no longer necessary or desirable, and nothing
herein contained shall prevent any merger, consolidation or
transfer of assets permitted by Section 5.07.
SECTION 5.05. Maintenance of Properties. The
Company will keep, and will cause each Subsidiary to keep, all of
its properties necessary, in the judgment of the Company, in its
business in good working order and condition, ordinary wear and
tear excepted. Nothing in this Section 5.05 shall prevent the
Company from discontinuing the operation or maintenance, or both
the operation and maintenance, of any such properties if such
discontinuance is, in the judgment of the Company, desirable in
the conduct of its business or the business of any Subsidiary.
SECTION 5.06. Compliance With Laws. The Company will
comply, and will cause each Subsidiary to comply, with the
requirements of all applicable laws, rules, regulations, and
orders of any governmental authority, a breach of which would
materially adversely affect the consolidated financial condition
of the Company and its Consolidated Subsidiaries, except where
contested in good faith and by proper proceedings.
SECTION 5.07. Mergers, Consolidations and Sales of
Assets.
(a) The Company shall not consolidate with or
merge into any other Person or convey or transfer its properties
and assets substantially as an entirety to any Person, unless:
(1) the Company or a Consolidated Subsidiary
that is incorporated under the laws of the United
States, any state thereof or the District of Columbia
is the surviving corporation of any such consolidation
or merger or is the Person that acquires by conveyance
or transfer the properties and assets of the Company
substantially as an entirety;
(2) if a Consolidated Subsidiary is the
surviving corporation or is the Person that acquires
the property and assets of the Company substantially as
an entirety, it shall expressly assume the performance
of every covenant of this
<PAGE>
Agreement and of the Notes on the part of the Company
to be performed or observed;
(3) immediately after giving effect to such
transaction, no Default shall have occurred and be
continuing; and
(4) the Company has delivered to the Agent
an Officer's Certificate and a legal opinion of its
General or Assistant General Counsel, upon the express
instruction of the Company for the benefit of the Agent
and the Banks, each stating that such transaction
complies with this Section and that all conditions
precedent herein provided for relating to such trans-
action have been complied with.
(b) Upon any consolidation by the Company with or
merger by the Company into a Consolidated Subsidiary or any
conveyance or transfer of the properties and assets of the
Company substantially as an entirety to a Consolidated Subsid-
iary, the Consolidated Subsidiary into which the Company is
merged or consolidated or to which such conveyance or transfer is
made shall succeed to, and be substituted for, and may exercise
every right and power of, the Company under this Agreement with
the same effect as if such Consolidated Subsidiary had been named
as the Company herein, and thereafter, in the case of a transfer
or conveyance permitted by Section 5.07(a), the Company shall be
relieved of all obligations and covenants under this Agreement
and the Notes.
SECTION 5.08. Limitation on Liens. The Company
will not, and will not permit any Restricted Subsidiary to,
create or suffer to exist any Lien upon any of its property or
assets, now owned or hereafter acquired, securing any
indebtedness or obligation; provided, however, that the foregoing
restrictions shall not apply to:
(a) Liens on any property or assets owned by the
Company or any Restricted Subsidiary existing at the date of this
Agreement;
(b) Liens on property of a corporation existing at
the time such corporation is merged into or consolidated with the
Company or a Restricted Subsidiary (in accordance with Section
5.07), or at the time of a purchase, lease or other acquisition
of the property of a corporation or firm as an entirety or
substantially as an entirety by the Company or a Restricted
Subsidiary, whether or not any indebtedness secured by such Liens
is assumed by the Company or such Restricted Subsidiary;
(c) Liens on property of a corporation existing at
the time such corporation becomes a Restricted Subsidiary;
<PAGE>
(d) Liens securing Debt of a Restricted Subsidiary
owing to the Company or to another Restricted Subsidiary;
(e) materialmen's, suppliers', tax or other
similar Liens arising in the ordinary course of business securing
obligations which are not overdue or are being contested in good
faith by appropriate proceedings;
(f) Liens (i) arising in connection with bonds
relating to worker's compensation, unemployment insurance, bids,
trade contracts (other than for borrowed money) and leases,
(ii) arising in connection with appeal and release bonds, and
(iii) incident to the conduct of business or the operation of
property or assets and not incurred in connection with the
obtaining of any advance or credit;
(g) Liens on property existing at the time of
acquisition of such property by the Company or a Restricted
Subsidiary, or Liens to secure the payment of all or any part of
the purchase price of property upon the acquisition of such
property by the Company or a Restricted Subsidiary or to secure
any Debt incurred or guaranteed by the Company or a Restricted
Subsidiary prior to, at the time of, or within 120 days after the
later of the acquisition, completion of construction (including
any improvements on an existing property) or commencement of full
operation of such property, which Debt is incurred or guaranteed
for the purpose of financing all or any part of the purchase
price thereof or construction or improvements thereon, and which
Debt may be in the form of obligations incurred in connection
with industrial revenue bonds or similar financings and letters
of credit issued in connection therewith; provided, however, that
in the case of any such acquisition, construction or improvement
the Lien shall not apply to any property theretofore owned by the
Company or a Restricted Subsidiary, other than, in the case of
any such construction or improvement, any theretofore unimproved
real property on which the property so constructed or the
improvement made is located;
(h) Liens in favor of any customer to secure
partial, progress, advance or other payments or performance
pursuant to any contract or statute or to secure any related
indebtedness;
(i) Liens in favor of an issuer of a letter of
credit on cash or cash equivalents deposited with such issuer
after the occurrence of an event of default under an agreement
providing for reimbursement of amounts drawn under the letter of
credit to secure payment of such reimbursement obligations, which
amounts so deposited, together with any other such amounts on
deposit with such an issuer, do not exceed 15% of Net Worth as of
the end of the fiscal quarter preceding the date of
determination;
(j) Liens arising by operation of law in favor of
any lender to the Company or any Restricted Subsidiary in the
ordinary course of business constituting a banker's lien or right
<PAGE>
of offset in moneys of the Company or a Restricted Subsidiary
deposited with such lender in the ordinary course of business;
(k) Liens arising out of consignment or similar
arrangements for the sale of goods entered into by the Company or
any of its Subsidiaries in the ordinary course of business;
(l) Liens in favor of customs and revenue
authorities arising as a matter of law to secure payment of
customs duties in connection with the export or import of goods;
(m) easements, rights-of-way, restrictions and
other similar encumbrances incurred in the ordinary course of
business which, in the aggregate, are not substantial in amount,
and which do not in any case materially detract from the value of
the property subject thereto or interfere with the ordinary
conduct of the businesses of the Company and its Subsidiaries;
(n) any extension, renewal or replacement (or
successive extensions, renewals or replacements) in whole or in
part of any Lien referred to in the foregoing; provided, however,
that the principal amount of Debt secured thereby shall not
exceed the principal amount of Debt so secured at the time of
such extension, renewal or replacement, and that such extension,
renewal or replacement shall be limited to all or part of the
property which secured the Lien so extended, renewed or replaced
(plus improvements and construction on such property); and
(o) Liens securing Debt in an aggregate amount
that, together with all other Debt of the Company and its
Restricted Subsidiaries that is secured by Liens not otherwise
permitted under subsections (a) through (n) above (if originally
issued, assumed or guaranteed at such time), does not at the time
exceed 12.5% of Net Worth as of the end of the fiscal quarter
preceding the date of determination. Liens described in
subsection (i) above securing Debt in excess of the amounts
permitted by such subsection shall not be permitted pursuant to
this subsection (o).
Notwithstanding the foregoing provisions of this
Section 5.08, the Company will not, and will not permit any
Subsidiary to, create or suffer to exist any pledge or other
security interest of or upon the shares of stock of any Subsid-
iary or LFC.
SECTION 5.09. Net Worth. The Company will not
permit Net Worth on any date (the "Measurement Date") to be less
than the sum of (i) $2,180,000,000 plus (ii) the sum of the
Quarterly Supplemental Amounts for all quarterly accounting
periods of the Company beginning with the quarter ending
September 25, 1994; provided that only those quarterly accounting
periods ending on a date which is 60 days or more prior to the
Measurement Date shall be included.
<PAGE>
The term "Quarterly Supplemental Amount" means,
with respect to each quarterly accounting period of the Company,
the sum of (i) additions to stockholder's equity resulting from
the issuance of additional shares of common or preferred stock by
the Company during such quarterly accounting period (excluding
issuances of shares of common stock of the Company pursuant to
any employee or director stock option program, benefit plan or
compensation program maintained by the Company or any Subsidiary)
plus (ii) the greater of (x) 40% of the consolidated net income
of the Company and the Consolidated Subsidiaries for such
quarterly accounting period or (y) zero.
SECTION 5.10. Total Debt to Net Worth. The
Company will not permit the ratio of total Debt of the Company
and the Subsidiaries, on a consolidated basis, to Net Worth to
exceed, at any time, the following:
From the Closing Date through 3/25/95 1.40:1.00
From 3/26/95 through 3/30/96 1.30:1.00
After 3/30/96 1.20:1.00
In calculating total Debt, any Debt guaranteed by the Company or
a Subsidiary shall be excluded to the extent the principal amount
thereof is otherwise included by reason of its being the primary
obligation of the Company or a Subsidiary.
SECTION 5.11. Use of Loans. The Company will use
the proceeds of the Loans for general corporate purposes of the
Company, including, without limitation, the repayment of maturing
commercial paper. The Company will not use the proceeds of the
Loans to provide cash collateral to an issuer of a letter of
credit as contemplated in Section 5.08(i). The Company will not,
directly or indirectly, use the proceeds of the Loans in
connection with (i) a tender offer for the securities of any
Person unless the board of directors (or similar body) of such
Person has agreed, prior to commencement thereof, to recommend
that holders of securities of such Person tender their securities
pursuant to such tender offer or (ii) any solicitation of any
proxy, consent or authorization for the purposes of proposing for
election directors (or individuals carrying out similar
functions) of any Person not nominated by management or the
incumbent board of directors (or a similar body) of such Person.
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 Company shall fail to pay the principal of
any Loan when due;
<PAGE>
(b) the Company shall fail to pay within 5 days of
the due date thereof (i) any Facility Fee or (ii) interest on any
Loan;
(c) the Company shall fail to pay within 30 days
after request for payment by any Bank acting through the Agent
any other amount payable under this Agreement;
(d) the Company shall fail to observe or perform
any agreement contained in Sections 5.07 through 5.11;
(e) the Company shall fail to observe or perform
any covenant or agreement contained in this Agreement (other than
those covered by clauses (a) through (d) above) for 30 days after
written notice thereof has been given to the Company by the Agent
at the request of the Required Banks;
(f) any representation or warranty made by the
Company in Article IV of this Agreement or any certificate or
writing furnished pursuant to this Agreement shall prove to have
been incorrect in any material respect when made and such
deficiency shall remain unremedied for 5 days after written
notice thereof shall have been given to the Company by the Agent
at the request of the Required Banks;
(g) any Material Debt shall become due before
stated maturity by the acceleration of the maturity thereof by
reason of default, or any Material Debt shall become due by its
terms and shall not be paid and, in any case aforesaid in this
clause (g), corrective action satisfactory to the Required Banks
shall not have been taken within 5 days after written notice of
the situation shall have been given to the Company by the Agent
at the request of the Required Banks;
(h) the Company or any Subsidiary shall commence a
voluntary case or other proceeding seeking liquidation, reorgani-
zation 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;
(i) an involuntary case or other proceeding shall
be commenced against the Company or any 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
<PAGE>
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 Company or any Subsidiary under the federal
bankruptcy laws as now or hereafter in effect;
(j) a final judgment for the payment of money in
excess of $50,000,000 shall have been entered against the Company
or any Subsidiary, and the Company or such Subsidiary shall not
have satisfied the same within 30 days, or caused execution
thereon to be stayed within 30 days, and such failure to satisfy
or stay such judgment shall remain unremedied for 5 days after
notice thereof shall have been given to the Company by the Agent
at the request of the Required Banks;
(k) notice of intent to terminate a Plan or Plans
having aggregate Unfunded Liabilities in excess of $50,000,000
shall be filed under Title IV of ERISA by any member of the ERISA
Group, any plan administrator or any combination of the fore-
going; 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 Plan or Plans having aggregate
Unfunded Liabilities in excess of $50,000,000; 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 $50,000,000;
(l) during any two-year period, individuals who at
the beginning of such period constituted the Company's Board of
Directors (together with any new director whose election by the
Board of Directors or whose nomination for election by the stock-
holders of the Company was approved by a vote of at least two-
thirds of the directors then in office who either were directors
at the beginning of such period or whose election or nomination
for election was previously so approved) cease for any reason to
constitute a majority of the directors then in office; or
(m) any person or group of persons (within the
meaning of Section 13 or 14 of the Exchange Act) (other than an
employee benefit or stock ownership plan of the Company) shall
have acquired, directly or indirectly, shares of capital stock
(whether common or preferred or a combination thereof) having
ordinary voting power to elect a majority of the Board of
Directors of the Company;
then, and in every such event, the Agent shall, if requested by
the Required Banks, (i) by notice to the Company terminate the
Commitments and they shall thereupon terminate, and (ii) by
notice to the Company declare the Notes, interest accrued thereon
and all other amounts payable hereunder to be, and the same shall
thereupon become, immediately due and payable without present-
<PAGE>
ment, demand, protest or other notice of any kind, all of which
are hereby waived by the Company; provided that in the event of
an actual or deemed entry of an order for relief with respect to
the Company under the federal bankruptcy laws as now or hereafter
in effect, without any notice to the Company or any other act by
the Agent or the Banks, the Total Commitments shall thereupon
terminate and the Notes, interest accrued thereon and all other
amounts payable hereunder shall become immediately due and
payable without presentment, demand, protest or other notice of
any kind, all of which are hereby waived by the Company.
ARTICLE VII
THE AGENT
SECTION 7.01. Appointment and Authorization. Each
Bank 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; provided, however, that the Agent
shall not commence any legal action or proceeding before a court
of law on behalf of any Bank without such Bank's prior consent.
SECTION 7.02. Agent and Affiliates. 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 Company or any Subsidiary or affiliate of the
Company as if it were not the Agent hereunder. With respect to
its Commitment and Loans made by it, Morgan Guaranty Trust
Company of New York (and any successor acting as the Agent), in
its capacity as a Bank hereunder, shall have the same rights and
obligations hereunder as any other Bank and may exercise (or be
subject to) the same as though it were not the Agent. The term
"Bank" or "Banks" shall, unless otherwise expressly indicated,
include Morgan Guaranty Trust Company of New York (and any
successor acting as the Agent) in its capacity as a Bank.
SECTION 7.03. Action by Agent. The obligations of
the Agent hereunder are only those expressly set forth herein.
Without limiting the generality of the foregoing, the Agent shall
not be required to take any action with respect to any Default,
except as expressly provided in Article VI.
SECTION 7.04. Consultation with Experts. The
Agent may consult with legal counsel (who may be counsel for the
Company), independent public accountants and other experts
selected by it and shall not be liable to any Bank 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 directors, officers, agents, or employees
shall be
<PAGE>
liable for any action taken or not taken by it in connection
herewith (i) with the consent or at the request of the Required
Banks or (ii) in the absence of its own gross negligence or
willful misconduct. Neither the Agent nor any of its directors,
officers, agents or employees shall be responsible for or have
any duty to ascertain, inquire into or verify (i) any statement,
warranty or representation made by any Person in connection with
this Agreement or any borrowing hereunder; (ii) the performance
or observance of any of the covenants or agreements of the
Company; (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 (except for its
own due execution and delivery) or genuineness of this Agreement,
the Notes or any other instrument or writing furnished in connec-
tion herewith. The Agent shall not incur any liability by acting
in reasonable 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
(to the extent not reimbursed by the Company) against any cost,
expense (including counsel fees and disbursements), claim,
demand, action, loss or liability (except such as result from the
Agent's gross negligence or willful misconduct) that the Agent
may suffer or incur in connection with this Agreement or any
action taken or omitted by the Agent hereunder.
SECTION 7.07. Credit Decision. Each Bank
acknowledges that it has, independently and without reliance upon
the Agent, any Co-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, any Co-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 written notice thereof to the Banks
and the Company. Upon any such resignation, the Company shall,
with the consent of the Required Banks, have the right to appoint
a successor Agent. If no successor Agent shall have been so
appointed, and shall have accepted such appointment, within 30
days after the retiring Agent gives notice of resignation, the
retiring Agent may, on behalf of the Banks, appoint a successor
Agent, which shall be a commercial bank organized or licensed
under the laws of the United States of America or of any State
thereof and having a combined capital and surplus of at least
$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
<PAGE>
duties of the retiring Agent, and the retiring Agent shall be
discharged from its duties and obligations hereunder as Agent.
After any retiring Agent's resignation hereunder as Agent, the
provisions of this Article shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Agent.
SECTION 7.09. Agent's Fee. The Company shall pay
to the Agent for its own account fees in the amounts and at the
times previously agreed upon between the Company and the Agent.
ARTICLE VIII
CHANGE IN CIRCUMSTANCES
SECTION 8.01. Increased Cost and Reduced Return;
Capital Adequacy. (a) If after the date hereof, a Change in Law:
(i) shall subject any Bank to any tax, duty or
other charge with respect to its Eurodollar Loans or its
Note, or shall change the basis of taxation of payments to
any Bank of the principal of or interest on its Eurodollar
Loans or any other amounts due under this Agreement in
respect of its Eurodollar Loans (except for changes in the
rate of tax on the overall net income of such Bank or its
applicable Lending Office imposed by any jurisdiction in
which such Bank's principal executive office or applicable
Lending Office is located); or
(ii) shall impose, modify or deem applicable any
reserve, special deposit, assessment or similar requirement
(including, without limitation, any such requirement imposed
by the Board of Governors of the Federal Reserve System
pursuant to Regulation D or otherwise) against assets of,
deposits with or for the account of, or credit extended by,
any Bank or shall impose on any Bank or the London interbank
market any other condition affecting such Bank's Eurodollar
Loan or its Note;
and the result of any of the foregoing is to increase the cost to
such Bank of making or maintaining any such Eurodollar Loan, or
to reduce the amount of any sum received or receivable by such
Bank under this Agreement or under its Note, by an amount deemed
by such Bank to be material, then, within 15 days after demand by
such Bank in the form of the certificate referred to in
Section 8.01(c) (with a copy to the Agent), the Company shall pay
to such Bank such additional amount or amounts as will compensate
such Bank for such increased cost or reduction; provided that the
Company shall not be required to pay any such compensation with
respect to any period prior to the 30th day before the date of
any such demand.
(b) Without limiting the effect of Section 8.01(a)
(but without duplication), if any Bank determines at any time
<PAGE>
after the Closing Date that a Change in Law will have the effect
of increasing the amount of capital required to be maintained by
such Bank (or its Parent) based on the existence of such Bank's
Loans, Commitment and/or other obligations hereunder, then the
Company shall pay to such Bank, within 15 days after its written
demand therefor, in the form of the certificate referred to in
Section 8.01(c) (with a copy to the Agent), such additional
amounts as shall be required to compensate such Bank for any
reduction in the rate of return on capital of such Bank (or its
Parent) as a result of such increased capital requirement;
provided that the Company shall not be required to pay any such
compensation with respect to any period prior to the 30th day
before the date of any such demand; provided further, however,
that to the extent (i) a Bank shall increase its level of capital
above the level maintained by such Bank on the date of this
Agreement and there has not been a Change in Law or (ii) there
has been a Change in Law and a Bank shall increase its level of
capital by an amount greater than the increase attributable
(taking into consideration the same variables taken into consid-
eration in determining the level of capital maintained by such
Bank on the date of this Agreement) to such Change in Law, the
Company shall not be required to pay any amount or amounts under
this Agreement with respect to any such increase in capital.
Thus, for example, a Bank which is "adequately capitalized" (as
such term or any similar term is used by any applicable bank
regulatory agency having authority with respect to such Bank) may
not require the Company to make payments in respect of increases
in such Bank's level of capital made under the circumstances
described in clause (i) or (ii) above which improve its capital
position from "adequately capitalized" to "well capitalized" (as
such term or any similar term is used by any applicable bank
regulatory agency having authority with respect to such Bank).
(c) Each Bank will promptly notify the Company of
any event of which it has knowledge, occurring after the Closing
Date, which will entitle such Bank to compensation pursuant to
this Section 8.01 and will designate a different Lending Office
if such designation will avoid the need for, or reduce the amount
of, such compensation and will not, in the sole judgment of such
Bank, be otherwise disadvantageous to such Bank. A certificate of
any Bank claiming compensation under this Section 8.01 and
setting forth the additional amount or amounts to be paid to it
hereunder and setting forth the basis for the determination
thereof shall be conclusive in the absence of manifest error. In
determining such amount, such Bank shall act reasonably and in
good faith, and may use any reasonable averaging and attribution
methods.
(d) Upon receipt of notice by any Bank pursuant to
clause (c) above, the Company shall have the right, exercisable
upon ten Business Days' prior notice to such Bank through the
Agent, to terminate the Commitment in full of such Bank (a
"Retiring Bank"). The effectiveness of the termination of the
<PAGE>
Commitment of a Retiring Bank pursuant to this Section 8.01(d)
shall be subject to the satisfaction of the following conditions:
(i) in the event that on such effective date
there shall be any Loans outstanding hereunder, the
Company shall have prepaid on such date the aggregate
principal amount of such Loans held by the Retiring
Bank only; and
(ii) in addition to the payment of the
principal of the Loans held by the Retiring Bank
pursuant to clause (i) above, the Company shall have
paid such Retiring Bank all accrued interest thereon,
and Facility Fee and any other amounts then payable to
it hereunder and under the Note or Notes held by such
Retiring Bank, including, without limitation, all
amounts payable by the Company to such Bank under
Section 2.13 by reason of the prepayment of Loans
pursuant to clause (i) with respect to the period
ending on such effective date; provided that the
provisions of this Section 8.01, Section 8.04 and
Section 9.04 shall survive for the benefit of any
Retiring Bank.
Upon satisfaction of the conditions set forth in
clauses (i) and (ii) above, such Bank shall cease to be a Bank
hereunder.
SECTION 8.02. Substitute Rate. Anything herein to
the contrary notwithstanding, if within 2 Business Days prior to
the first day of an Interest Period none of the Reference Banks
is, for any reason whatsoever, being offered Dollars for deposit
in the Eurodollar market for a period and amount relevant to the
computation of the rate of interest on such Eurodollar Loan for
such Interest Period, the Agent shall give the Company and each
Bank prompt notice thereof and on what would otherwise be the
first day of such Interest Period such Loans shall be made as
Base Rate Loans.
SECTION 8.03. Illegality. (a) Notwithstanding any
other provision herein, if, after the Closing Date, a Change in
Law shall make it unlawful or impossible for any Bank to
(i) honor any Commitment it may have hereunder to make any
Eurodollar Loan, then such Commitment shall be suspended, or
(ii) maintain any Eurodollar Loan, then all Eurodollar Loans of
such Bank then outstanding shall be converted into Base Rate
Loans as provided in Section 8.03(b), and any remaining
Commitment of such Bank hereunder to make Eurodollar Loans (but
not other Loans) shall be immediately suspended, in either case
until such Bank may again make and/or maintain Eurodollar Loans
(as the case may be), and borrowings from such Bank, at a time
when borrowings from the other Banks are to be of Eurodollar
Loans, shall be made, simultaneously with such borrowings from
the other Banks, by way of Base Rate Loans. Upon the occurrence
<PAGE>
of any such change, such Bank shall promptly notify the Company
thereof (with a copy to the Agent), and shall furnish to the
Company in writing evidence thereof certified by such Bank.
Before giving any notice pursuant to this Section 8.03, such Bank
shall designate a different Lending Office if such designation
will avoid the need for giving such notice and will not, in the
sole reasonable judgment of such Bank, be otherwise disadvan-
tageous to such Bank.
(b) Any conversion of any outstanding Eurodollar
Loan which is required under this Section 8.03 shall be effected
immediately (or, if permitted by applicable law, on the last day
of the Interest Period therefor).
SECTION 8.04. Taxes on Payments. (a) All payments
in respect of the Loans shall be made free and clear of and
without any deduction or withholding for or on account of any
present and future taxes, assessments or governmental charges
imposed by the United States of America, or any political
subdivision or taxing authority thereof or therein (all such
taxes being hereinafter called "Taxes"), except as expressly
provided in this Section 8.04. If any Taxes are imposed and
required by law to be deducted or withheld from any amount
payable to any Bank, then the Company shall (i) increase the
amount of such payment so that such Bank will receive a net
amount (after deduction of all Taxes) equal to the amount due
hereunder, (ii) pay such Taxes to the appropriate taxing
authority for the account of such Bank, and (iii) as promptly as
possible thereafter, send such Bank evidence showing payment
thereof, together with such additional documentary evidence as
such Bank may from time to time require. If the Company fails to
perform its obligations under (ii) or (iii) above, the Company
shall indemnify such Bank for any incremental taxes, interest or
penalties that may become payable as a result of any such
failure; provided, however, that the Company will not be required
to make any payment to any Bank under this Section 8.04 if
withholding is required in respect of such Bank by reason of such
Bank's inability or failure to furnish under subsection (b) an
extension or renewal of a Form 1001 or Form 4224 (or successor
form), as applicable, unless such inability results from an
amendment to or a change in any applicable law or regulation or
in the interpretation thereof by any regulatory authority
(including without limitation any change in an applicable tax
treaty), which amendment or change becomes effective after the
date hereof.
(b) Each Bank that is not incorporated in the
United States of America or a state thereof agrees that it shall
deliver to the Company (with a copy to the Agent) (i) at least 10
Business Days prior to the first interest payment date two duly
completed copies of United States Internal Revenue Service Form
1001 or 4224, as appropriate, indicating that such Bank is
entitled to receive payments under this Agreement without
deduction or withholding of any United States federal income
taxes, (ii) from time to time, such extensions or renewals of
<PAGE>
such forms (or successor forms) as may reasonably be requested by
the Company but only to the extent such Bank determines that it
may properly effect such extensions or renewals under applicable
tax treaties, laws, regulations and directives and (iii) in the
event of a transfer of any Loan to a subsidiary or affiliate of
such Bank, a new Internal Revenue Service Form 1001 or 4224 (or
any successor form), as the case may be, for such subsidiary or
affiliate. The Company and the Agent shall each be entitled to
rely on such forms in its possession until receipt of any revised
or successor form pursuant to the preceding sentence.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01 New Banks. Upon the termination of
a Bank's Commitment pursuant to Section 8.01(d), the Company may
notify the Agent and the Banks that it desires to replace such
Retiring Bank with a new bank or banks (which may be one or more
of the Banks); provided, however, that such new bank(s) will not
have incremental Commitment(s) aggregating more than the
Commitment of the Retiring Bank being replaced. Such notice
shall identify such bank, the amount of its proposed Commitment
and the proposed effective date of its inclusion hereunder. Upon
such proposed date, with the consent of Required Banks, such bank
shall become a Bank hereunder for all purposes and to the same
effect as if set forth on the signature pages hereof, subject to
its execution and delivery to the Agent of at least one
counterpart of this Agreement (which shall be deemed to include
all amendments thereto) and the execution and delivery by the
Agent and the Company of each such counterpart. The Company and
the Agent shall make appropriate arrangements so that Notes are
issued to such Bank reflecting its Commitment.
SECTION 9.02. Notices. All notices, requests and
other communications to any party hereunder shall be in writing
(including bank wire, telex, telecopy, facsimile transmission or
similar writing) and shall be given to such party (x) in the case
of the Company or the Agent, at its address or telex number set
forth on the signature pages hereof, (y) in the case of any Bank,
at its address or telex number set forth in its Administrative
Questionnaire or (z) in the case of any party, such other address
or telex number as such party may hereafter specify for the
purpose by notice to the Agent and the Company. 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 communi-
cation is deposited in the mails with first class postage
prepaid, addressed as aforesaid or (iii) if given by any other
means, when received at the address or telecopier number speci-
fied in this Section; provided that notices to the Agent under
Article II or VIII shall not be effective until received.
<PAGE>
SECTION 9.03. 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 9.04. Expenses; Documentary Taxes;
Indemnification. (a) The Company shall pay (i) the reasonable
fees and disbursements of special counsel for the Agent in
connection with the preparation of this Agreement and (ii) if an
Event of Default occurs, all reasonable out-of-pocket expenses
incurred by the Agent and the Banks, including reasonable fees
and disbursements of counsel, in connection with such Event of
Default and collection and other enforcement proceedings
resulting therefrom. The Company shall indemnify the Agent and
each Bank against any transfer taxes, documentary taxes,
assessments or charges made by any governmental authority by
reason of the execution and delivery of this Agreement or the
Notes.
(b) The Company agrees to indemnify the Agent and
each Bank, their respective affiliates and the respective
directors, officers, agents and employees of the foregoing (each
an "Indemnitee") and hold each Indemnitee harmless from and
against any and all liabilities, losses, damages, costs and
reasonable expenses of any kind, including, without limitation,
the reasonable fees and disbursements of counsel, which may be
incurred by such Indemnitee in response to or in defense of any
investigative, administrative or judicial proceeding brought or
threatened against the Agent or any Bank 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 as determined by a court of
competent jurisdiction.
SECTION 9.05. Pro Rata Treatment. Except as
expressly provided in this Agreement, (a) each borrowing from,
and change in the Commitments of, the Banks shall be made pro
rata according to their respective Commitments, and (b) each
payment and prepayment on the Loans shall be made to all the
Banks, pro rata in accordance with the unpaid principal amount of
the Loans held by each of them.
SECTION 9.06. Sharing of Set-Offs. Each Bank
agrees that if it shall, by exercising any right of set-off or
counterclaim or otherwise (except as contemplated by Section 2.13
or Article VIII), receive payment of a proportion of the
aggregate amount of principal and interest due with respect to
the Loans 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 the Loans held by such
other Bank,
<PAGE>
the Bank receiving such proportionately greater payment shall
purchase such participations in the Loans 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 Loans 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 Company, other
than its indebtedness under the Notes.
SECTION 9.07. 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 Company and the Required Banks (and, if the rights
or duties of the Agent are affected thereby, by the Agent);
provided that no such amendment or waiver shall, unless signed by
the Company and all the Banks, (i) subject any Bank to any
additional obligation, except as provided in Section 2.11, (ii)
reduce the principal of 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 for termination of any
Commitment or (iv) change the percentage of Loans or Total
Commitments that shall be required for the Banks or any of them
to take any action under this Section 9.07 or any other provision
of this Agreement.
SECTION 9.08. Successors and Assigns;
Participations; Novation.
(a) This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective
successors and assigns; provided that except in accordance with
Section 5.07, the Company may not assign or transfer any of its
rights or obligations under this Agreement without the consent of
all Banks.
(b) Any Bank may at any time sell to one or more
banks or other financial institutions (each a "Participant")
participating interests in any Loan owing to such Bank, any Note
held by such Bank, the Commitment of such Bank hereunder, and any
other interest of such Bank hereunder. In the event of any such
sale by a Bank of a participating interest to a Participant, such
Bank's obligations under this Agreement shall remain unchanged,
such Bank shall remain solely responsible for the performance
thereof, such Bank shall remain the holder of its Note or Notes
for all purposes under this Agreement and the Company 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 a Bank may grant such
a participating interest shall provide that such Bank shall
retain the sole right and responsibility to enforce the obliga-
tions of the Company hereunder including, without limitation, the
right to approve any amendment, modification or waiver of any
provision of this Agreement; provided that such participation
<PAGE>
agreement may provide that such Bank will not agree to any modi-
fication, amendment or waiver of this Agreement described in
clauses (i), (ii) or (iii) of Section 9.07 affecting such Parti-
cipant without the consent of the Participant; provided further
that such Participant shall be bound by any waiver, amendment or
other decision that all Banks shall be required to abide by
pursuant to a vote by Required Banks. Subject to the provisions
of Section 9.08(d), the Company agrees that each Participant
shall, to the extent provided in its participation agreement, be
entitled to the benefits of Article VIII with respect to its
participating interest. An assignment or other transfer which is
not permitted by subsection (c) or (g) 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 sell to one or more
banks or financial institutions (each a "Purchaser") all or a
portion of its rights and obligations under this Agreement and
the Notes; provided that the minimum sale permitted under this
Section 9.08(c) is $10,000,000. Each Purchaser shall assume all
such rights and obligations pursuant to an Assignment and
Assumption Agreement executed by such Purchaser, such transferor
Bank and the Company. No interest may be sold by a Bank pursuant
to this subsection (c), except to an affiliate of such Bank,
without the consent of the Company, which consent shall not be
unreasonably withheld. Each Purchaser shall be bound by any
waiver, amendment or other decision that all Banks shall be
required to abide by pursuant to a vote by Required Banks. In no
event shall (i) any Commitment of a transferor Bank (together
with the Commitment of any affiliate of such Bank), after giving
effect to any sale pursuant to this subsection (c), be less than
$10,000,000, or (ii) any Commitment of a Purchaser (together with
the Commitment of any affiliate of such Purchaser), after giving
effect to any sale pursuant to this subsection (c), be less than
$10,000,000 or not be in multiples of $1,000,000 except in each
case as may result upon the transfer by a Bank of its Commitment
in its entirety. Upon (I) execution of an Assignment and
Assumption Agreement, (II) delivery by the transferor Bank of an
executed copy thereof, together with notice that the payment
referred to in clause (III) below shall have been made, to the
Company and the Agent, (III) payment by such Purchaser to such
transferor Bank of an amount equal to the purchase price agreed
between such transferor Bank and such Purchaser and (IV) if the
Purchaser is organized under the laws of any jurisdiction other
than the United States or any state thereof, evidence
satisfactory to the Agent and the Company of compliance with the
provisions of Section 9.08(f), such Purchaser shall for all
purposes be a Bank party to this Agreement and shall have all the
rights and obligations of a Bank under this Agreement to the same
extent as if it were an original party hereto with a Commitment
as set forth in such Assignment and Assumption Agreement, and the
transferor Bank shall be released from its obligations hereunder
to a correspondent extent, and no further consent or action by
<PAGE>
the Company, the Banks or the Agent shall be required to
effectuate such transfer. Upon the consummation of any transfer
to a Purchaser pursuant to this subsection (c), the transferor
Bank, the Agent and the Company shall make appropriate
arrangements so that, if required, a new Note or Notes are issued
to the transferor Bank and such Purchaser. In connection with
any such assignment, the Purchaser or the transferor Bank shall
pay to the Agent an administrative fee for processing such
assignment in the amount of $2,500.
(d) No Purchaser, Participant or other transferee
(including any successor Lending Office) of any Bank's rights
shall be entitled to receive any greater payment under Section
8.01 than such Bank would have been entitled to receive with
respect to the rights transferred, unless such transfer is made
with the Company's prior written consent or by reason of the
provisions of Section 8.01 or 8.03 requiring such Bank to desig-
nate a different Lending Office under certain circumstances or at
a time when the circumstances giving rise to such greater payment
did not exist.
(e) Each Bank may, upon the written consent of the
Company, which consent shall not be unreasonably withheld,
disclose to any Participant or Purchaser (each a "Transferee")
and any prospective Transferee any and all financial information
in such Bank's possession concerning the Company that has been
delivered to such Bank by the Company pursuant to this Agreement
or that has been delivered to such Bank by the Company in connec-
tion with such Bank's credit evaluation prior to entering into
this Agreement, subject in all cases to agreement by such Trans-
feree or prospective Transferee to comply with the provisions of
Section 9.16.
(f) If pursuant to subsection (c) of this
Section 9.08, any interest in this Agreement or any Note is
transferred to any Purchaser that is organized under the laws of
any jurisdiction other than the United States or any state
thereof, the transferor Bank shall cause such Purchaser, concur-
rently with the effectiveness of such transfer, (i) to represent
to the transferor Bank (for the benefit of the transferor Bank,
the Agent and the Company) that under applicable law and treaties
no taxes will be required to be withheld by the Agent, the
Company or the transferor Bank with respect to any payments to be
made to such Purchaser in respect of the Loans and (ii) to
furnish to each of the transferor Bank, the Agent and the Company
two duly completed copies of the forms required by
Section 8.04(b)(i).
(g) Notwithstanding any provision of this Section
9.08 to the contrary, any Bank may assign or pledge any of its
rights and interests in the Loans to a Federal Reserve Bank
without the consent of the Company.
<PAGE>
SECTION 9.09. Visitation. Subject to restrictions
imposed by applicable security clearance regulations, the Company
will upon reasonable notice permit representatives of any Bank at
such Bank's expense to visit any of its major properties and to
discuss its affairs and finances with its officers, employees and
independent public accountants, all at such reasonable times and
as often as may reasonably be requested.
SECTION 9.10. 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 of the Board of Governors of the Federal Reserve
System) as collateral in the extension or maintenance of the
credit provided for in this Agreement.
SECTION 9.11 Usury. Anything herein to the
contrary notwithstanding, the obligations of the Company under
this Agreement shall be subject to the limitation that payments
of interest for the account of any Bank shall not be required to
the extent that receipt thereof would be contrary to provisions
of law applicable to such Bank limiting rates of interest which
may be charged or collected by such Bank.
SECTION 9.12 Reference Banks. If any Reference
Bank assigns its rights and obligations hereunder and under the
Notes to an unaffiliated institution, the Agent shall, in
consultation with the Company, and with the consent of the
Required Banks, appoint another Bank to act as a Reference Bank
hereunder. If the Commitment of any Bank (which is also a
Reference Bank) is terminated pursuant to the terms of this
Agreement, the Company may, in consultation with the Agent, and
with the consent of the Required Banks, appoint a replacement
Reference Bank.
SECTION 9.13. Governing Law; Submission to Juris-
diction. This Agreement and each Note shall be governed by and
construed in accordance with the internal laws of the State of
New York. Each of the Company, the Agent and the Banks hereby
submits to the nonexclusive jurisdiction of the United States
District Court for the Southern District of New York and of any
New York State Court sitting in New York City for purposes of all
legal proceedings arising out of or relating to this Agreement or
the transactions contemplated hereby. Each of the Company, the
Agent and the Banks 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 9.14. Counterparts; Integration. This
Agreement may be signed in any number of counterparts, each of
which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
This Agreement constitutes the entire agreement and understanding
among the parties hereto and supersedes any and all prior
<PAGE>
agreements and understandings, oral or written, relating to the
subject matter hereof.
SECTION 9.15 WAIVER OF JURY TRIAL. EACH OF THE
COMPANY, THE AGENT AND THE BANKS HEREBY IRREVOCABLY WAIVES ANY
AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING
OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY.
SECTION 9.16. Confidentiality. Each Bank agrees
to exercise all reasonable efforts to keep any information
delivered or made available by the Company to it that is clearly
indicated to be confidential information or private data
confidential from anyone other than Persons employed or retained
by such Bank who are or are expected to become engaged in
evaluating, approving, structuring or administering this
Agreement and the transactions contemplated hereby. Nothing
herein shall prevent any Bank from disclosing such information
(i) to any other Bank, (ii) to its affiliates, officers,
directors, employees, agents, attorneys and accountants who have
a need to know such information in accordance with customary
banking practices and who receive such information having been
made aware of the restrictions set forth in this Section, (iii)
upon the order of any court or administrative agency, (iv) upon
the request or demand of any regulatory agency or authority
having jurisdiction over such Bank, (v) which has been publicly
disclosed, (vi) to the extent reasonably required in connection
with any litigation to which the Agent, any Bank, the Company or
their respective affiliates may be a party, (vii) to the extent
reasonably required in connection with the exercise of any remedy
hereunder and (viii) with the prior written consent of the
Company. The use of the term "confidential" in this Section 9.16
is not intended to refer to data classified by the government of
the United States under laws and regulations relating to the
handling of data, but is intended to refer to information and
other data regarded by the Company as private.
<PAGE>
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.
LOCKHEED CORPORATION
By ______________________________
Name: Walter E. Skowronski
Title: Vice President and
Treasurer
By ______________________________
Name: Carol R. Marshall
Title: Vice President
4500 Park Granada Blvd.
Calabasas, CA 91399
Telex number: 797847 UD
Telecopy number: (818) 876-2329
MORGAN GUARANTY TRUST COMPANY OF
NEW YORK, as Agent
By ____________________________
Title:
60 Wall Street
New York, New York 10260
Telex Number: 177615
Commitment
$ 55,000,000 MORGAN GUARANTY TRUST COMPANY OF
NEW YORK
By /s/ Diana H. Imhof
____________________________
Title: Associate
<PAGE>
Co-Agents:
$ 40,000,000 BANK OF AMERICA NATIONAL TRUST &
SAVINGS ASSOCIATION
By /s/ L. Kannegieter
____________________________
Title: Vice President
$ 40,000,000 BANKERS TRUST COMPANY
By /s/ Edward G. Benedict
____________________________
Title: Vice President
$ 40,000,000 THE CHASE MANHATTAN BANK, N.A.
By /s/ Dawn Lee Lum
____________________________
Title: Vice President
$ 40,000,000 NATIONAL WESTMINSTER BANK PLC
By /s/ Gary A. Miller
___________________________
Title: Senior Vice President
$ 40,000,000 THE FIRST NATIONAL BANK OF CHICAGO
By /s/ L. Gene Beube
____________________________
Title: Senior Vice President
$ 40,000,000 THE INDUSTRIAL BANK OF JAPAN
By /s/ Kazutaka Kiyoto
____________________________
Title: Senior Vice President
<PAGE>
$ 40,000,000 CHEMICAL BANK
By /s/ Richard Stewart
____________________________
Title: Vice President
$ 40,000,000 CITICORP USA, INC.
By /s/ Barbara A. Cohen
____________________________
Title: Vice President
$ 40,000,000 THE BANK OF NOVA SCOTIA
By /s/ Chris Johnson
____________________________
Title: Representative
By /s/ M. Van Otterloo
____________________________
Title: Senior Relationship Manager
$ 40,000,000 CREDIT SUISSE
By /s/ S. Flynn
____________________________
Title: Member of Senior Management
By /s/ M. Palenzuela
____________________________
Title: Member of Senior Management
$ 40,000,000 CANADIAN IMPERIAL BANK OF COMMERCE
By /s/ R. Wagner
____________________________
Title: Vice President
<PAGE>
$ 40,000,000 SWISS BANK CORPORATION,
SAN FRANCISCO BRANCH
By /s/ Marcia Burkey
____________________________
Title: Director Merchant Banking
By /s/ J. Dillon
____________________________
Title: Director Merchant Banking
$ 40,000,000 BARCLAYS BANK PLC
By /s/ Douglas A. Butler
____________________________
Title: Associate Director
By ____________________________
Title:
$ 40,000,000 THE BANK OF NEW YORK
By /s/ Robert Louk
____________________________
Title: Vice President
$ 40,000,000 NATIONSBANK OF TEXAS, N.A.
By /s/ M. M. Shafroth
____________________________
Title: Senior Vice President
$ 40,000,000 CREDIT LYONNAIS LOS ANGELES BRANCH
By /s/ F. Coussot
____________________________
Title: Vice President
CREDIT LYONNAIS CAYMAN ISLAND BRANCH
By /s/ R. Ivosevich
____________________________
Title: Authorized Signature
<PAGE>
$ 40,000,000 FIRST INTERSTATE BANK OF CALIFORNIA
By /s/ Gregory P. Brown
____________________________
Title: Vice President
By /s/ Daniel Hom
____________________________
Title: Vice President
Lead Managers:
$ 25,000,000 TRUST COMPANY BANK
By /s/ Catherine L. Trense
____________________________
Title: Vice President
By /s/ Mark W. James
____________________________
Title: Assistant Vice President
$ 25,000,000 BANQUE NATIONALE DE PARIS
By /s/ C. Morio
____________________________
Title: Senior Vice President
and Manager
By /s/ P. Mansoorian
____________________________
Title: Assistant Vice President
$ 25,000,000 DEUTSCHE BANK AG LOS ANGELES AND/OR
CAYMAN ISLANDS BRANCHES
By /s/ Michael U. Hotze
____________________________
Title: Managing Director
By /s/ J. Scott Jessup
____________________________
Title: Vice President
<PAGE>
$ 25,000,000 MELLON BANK, N.A.
By /s/ Edwin H. Wiest
____________________________
Title: First Vice President
$ 25,000,000 THE LONG-TERM CREDIT BANK OF JAPAN,
LTD., LOS ANGELES AGENCY
By /s/ M. Uematsu
____________________________
Title: Deputy General Manager
$ 25,000,000 ROYAL BANK OF CANADA
By /s/ Brian W. Dixon
____________________________
Title: Senior Manager
$ 25,000,000 THE SUMITOMO BANK, LIMITED
By /s/ H. Amano
____________________________
Title: General Manager
Banks:
$ 15,000,000 KREDIETBANK N.V., GRAND CAYMAN
BRANCH
By /s/ R. Snauffer
____________________________
Title: Vice President
By /s/ K. McCarthy
____________________________
Title: Vice President
<PAGE>
$ 15,000,000 BERLINER HANDELS-UND FRANKFURTER
BANK
By /s/ David C. Graenkel
____________________________
Title: Vice President
By /s/ Joy Robin
____________________________
Title: Assistant Treasurer
$ 15,000,000 ISTITUTO BANCARIO SAN PAOLO DI
TORINO, SpA
By /s/ Donald W. Brown
____________________________
Title: Branch Manager
By /s/ Glen Binder
____________________________
Title: Vice President
$ 15,000,000 GULF INTERNATIONAL BANK B.S.C.
By /s/ Thomas E. Fitzherbert
____________________________
Title: Vice President
By /s/ Abdel-Fattah tahoun
____________________________
Title: Senior Vice President
$ 15,000,000 BANK SOUTH, N.A.
By /s/ W. W. Tucker
____________________________
Title: Corporate Banking Officer
$ 15,000,000 WACHOVIA BANK OF GEORGIA, N.A.
By /s/ Terry L. Akins
____________________________
Title: Senior Vice President
Total Commitments:
$1,000,000,000
<PAGE>
SCHEDULE I
Pricing
The Margin (applicable only to Eurodollar Loans) and
the Facility Fee shall be as specified below (in basis points per
annum) under the column that identifies the lower rating of the
Company's two highest senior unsecured long-term debt ratings as
of the date of determination, by any two Rating Agencies (one of
which must be S&P or Moody's). If only two ratings exist, the
lower of the two shall apply; however, if the lower rating is
more than one rating level below the higher rating, pricing shall
be based on one level above the lower rating.
Lower than
BBB/Baa2 BBB-/Baa3
A/A2 or or
or higher A-/A3 BBB+/Baa1 BBB-/Baa3 unrated
Facility
Fee 10.0 12.50 15.0 20.0 35.0
Margin 22.50 22.50 27.50 35.0 40.0
<PAGE>
EXHIBIT A
NOTICE OF BORROWING
Pursuant to that certain $1,000,000,000 Amended and
Restated Loan Agreement dated September 15, 1994 (such agreement,
as it may be amended, amended and restated, supplemented or
otherwise modified from time to time, the "Loan Agreement";
capitalized terms used herein without definition shall have the
meanings assigned those terms in the Loan Agreement) among
Lockheed Corporation, a Delaware corporation (the "Company"), the
banks listed therein (the "Banks"), and Morgan Guaranty Trust
Company of New York, as agent for the Banks (the "Agent"), this
represents the Company's request to
___ borrow on ___________, 19__ $__________ from the
Banks on a pro rata basis as Base Rate Loans.
___ borrow on ___________, 19__ $__________ from the
Banks on a pro rata basis as Eurodollar Loans.
The Interest Period for such Eurodollar Loans is
requested to be a [one][two][three][six] month
period.
The proceeds of such Loans are to be deposited in the Company's
account heretofore designated to the Agent.
Each of the undersigned, to the best of his or her
knowledge, and the Company certify that (i) no Event of Default
has occurred and is continuing; (ii) except as otherwise
described by the Company in a writing to the Agent and waived by
Required Banks, the representations of the Company contained in
Article IV of the Loan Agreement (other than Sections 4.05(a),
4.14 and the last sentence of Section 4.04 thereof) and in any
writing furnished to the Agent pursuant to the terms of the Loan
Agreement are true on and as of the date hereof with the same
force and effect as if made on the date hereof; and (iii) except
as described by the Company in writing to the Agent and waived by
Required Banks, no lawsuit or proceeding is pending, or
threatened, against the Company or any Consolidated Subsidiary
which is reasonably likely to have a material adverse effect upon
<PAGE>
the financial condition of the Company and the Consolidated
Subsidiaries or upon the ability of the Company to carry out the
transactions contemplated by the Loan Agreement.
DATED: ________________________
LOCKHEED CORPORATION
By: __________________________
Title: _______________________
By: __________________________
Title: _______________________
<PAGE>
EXHIBIT B
NOTICE OF CONVERSION/CONTINUATION
Pursuant to that certain $1,000,000,000 Amended and
Restated Loan Agreement dated September 15, 1994 (such agreement,
as it may be amended, amended and restated, supplemented or
otherwise modified from time to time, the "Loan Agreement";
capitalized terms used herein without definition shall have the
meanings assigned to those terms in the Loan Agreement) among
Lockheed Corporation, a Delaware corporation (the "Company"), the
banks listed therein (the "Banks") and Morgan Guaranty Trust
Company of New York, as agent for the Banks (the "Agent"), this
represents the Company's request to
___ convert $____________ in principal amount of
presently outstanding Base Rate Loans to Eurodollar Loans on
_________________, 19__; the Interest Period for such
Eurodollar Loans is requested to be a [one][two][three][six]
month period.
___ continue as Eurodollar Loans $__________ in
principal amount of presently outstanding Loans with an
Interest Period ending on _____________, 19__; the Interest
Period for such Eurodollar Loans commencing on the last day
of such Interest Period is requested to be a
[one][two][three][six] month period.
___ convert $___________ in principal amount of
presently outstanding Eurodollar Loans with an Interest
Period ending on __________, 19__ to Base Rate Loans at the
end of such Interest Period.
DATED: ________________
LOCKHEED CORPORATION
By: _________________________
Title: ______________________
By: _________________________
Title: ______________________
<PAGE>
EXHIBIT C
NOTE
New York, New York
September 15, 1994
For value received, LOCKHEED CORPORATION, a Delaware
corporation (the "Borrower"), promises to pay to the order of
____________________________ (the "Bank"), [for the account of
its Lending Office,] the unpaid principal amount of each Loan
made by the Bank to the Borrower pursuant to the Loan Agreement
referred to below on the Commitment Termination Date. 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 Loan 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 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 Loan Agreement.
This note is one of the Notes referred to in the
$1,000,000,000 Amended and Restated Loan Agreement dated
September 15, 1994 among the Borrower, the banks listed on the
signature pages thereof and Morgan Guaranty Trust Company of New
York, as Agent (as the same may be amended, amended and restated,
supplemented or otherwise modified from time to time, the "Loan
Agreement"). Terms defined in the Loan Agreement are used herein
with the same meanings. Reference is made to the Loan Agreement
for provisions for the prepayment hereof and the acceleration of
the maturity hereof.
LOCKHEED CORPORATION
By: _________________________
Title: ______________________
By: _________________________
Title: ______________________
<PAGE>
Note (cont'd)
LOANS AND PAYMENTS OF PRINCIPAL
_________________________________________________________________
Amount of
Amount of Principal Notation
Date Loan Repaid Made By
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
<PAGE>
EXHIBIT D
OPINION OF
SPECIAL COUNSEL
FOR THE COMPANY
[Dated as provided in
Section 3.01 of the
Loan Agreement]
To the Banks and the Agent
Referred to Below
c/o Morgan Guaranty Trust
Company of New York, as Agent
Re: Lockheed Corporation $1,000,000,000 Amended and
Restated Loan Agreement dated September 15, 1994
Ladies and Gentlemen:
We have acted as special counsel to Lockheed Corpora-
tion (the "Company") in connection with the $1,000,000,000
Amended and Restated Loan Agreement (the "Loan Agreement") dated
September 15, 1994 by and among the Company, the Banks listed on
the signature pages of the Loan Agreement (the "Banks") and
Morgan Guaranty Trust Company of New York, as agent (the
"Agent"). This opinion is rendered to you in compliance with
Section 3.01(d) of the Loan Agreement. Terms defined in the Loan
Agreement are used herein as therein defined.
In our capacity as such counsel, we have examined,
among other things, originals or copies identified to our satis-
faction as being true copies of the Loan Agreement and such
records, documents and other instruments as in our judgment are
necessary and appropriate to enable us to render the opinions
expressed below.
On the basis of such examination and our consideration
of such questions of law as we have deemed relevant in the
circumstances, we are of the opinion that:
(i) the execution, delivery and performance by the
Company of the Loan Agreement and the issuance of the Notes
in accordance therewith are within the Company's corporate
powers and have been duly authorized by all necessary
corporate action;
(ii) the Loan Agreement constitutes a legally valid and
binding obligation of the Company and the Notes constitute
legally valid and binding obligations of the Company,
enforceable against the Company in accordance with their
respective terms; and
<PAGE>
(iii) neither the execution and delivery of the
Loan Agreement and the Notes nor the payment of amounts due
thereunder will conflict with any present Federal,
California or New York statute, rule or regulation that we
would, in our experience, reasonably recognize as directly
applicable to the Company or to transactions of the type
contemplated by the Loan Agreement, or the General
Corporation Law of the State of Delaware.
Our opinions in paragraph (ii) above as to the
validity, binding effect and enforceability of the Loan Agreement
and the Notes are subject to (a) bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium or similar laws
relating to or affecting creditors' rights generally; (b) the
effect of general principles of equity, including, without
limitation, concepts of materiality, reasonableness, good faith
and fair dealing, and the possible unavailability of specific
performance or injunctive relief, regardless of whether
considered in a proceeding in equity or at law; (c) public policy
considerations or court decisions which may limit the rights of
the Banks to obtain indemnification; and (d) the unenforceability
under certain circumstances of provisions imposing penalties or
an increase in interest rate upon delinquency in payment or the
occurrence of a default.
In rendering the foregoing opinion, we have assumed
that the Loan Agreement has been duly authorized, executed and
delivered by the Banks and is the legally valid and binding
obligation of the Banks.
We express no opinion on the laws of any jurisdiction
except those of California, New York and the United States, and
the General Corporation Law of the State of Delaware.
This opinion is furnished solely for your benefit and
may not be relied upon, nor may copies be delivered to, any other
person without our prior written consent.
Very truly yours,
<PAGE>
EXHIBIT E
OPINION OF
COUNSEL FOR THE COMPANY
[Dated as provided in
Section 3.01 of the
Loan Agreement]
To the Banks and the Agent
Referred to Below
c/o Morgan Guaranty Trust
Company of New York, as Agent
Dear Sirs:
This opinion is furnished to you pursuant to
Section 3.01(d) of the $1,000,000,000 Amended and Restated Loan
Agreement (the "Loan Agreement") dated September 15, 1994 among
Lockheed Corporation (the "Company"), the banks listed on the
signature pages thereof and Morgan Guaranty Trust Company of New
York, as Agent. Terms defined in the Loan Agreement are used
herein as therein defined.
I am [Assistant] General Counsel of the Company and in
this capacity I am generally familiar with legal and governmental
proceedings to which the Company or any of its Subsidiaries is a
party.
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 Company is a corporation duly organized and
validly existing under the laws of the State of Delaware without
limitation on the duration of its existence, is in good standing
therein and in the State of California, and the Company has
corporate power to enter into and perform the Loan Agreement and
to borrow and issue the Notes as contemplated by the Loan
Agreement.
2. The execution and delivery by the Company of the
Loan Agreement, the issuance of Notes in accordance therewith and
the performance by the Company of its obligations under the Loan
Agreement and the Notes do not contravene the Company's
Certificate of Incorporation or By-laws or any indenture,
agreement, instrument, judgment or order known to me to which the
Company is a party or by which it or any of its material assets
or properties may be bound or affected.
3. The Company has taken all corporate action
necessary to authorize its execution and delivery of the Loan
Agreement and the Notes and the consummation of the transactions
contemplated thereby.
4. There are to the best of my knowledge no suits,
actions, or proceedings pending or threatened against or affect-
ing the Company or any Consolidated Subsidiary the adverse
determination of which is reasonably likely to occur, and if so
adversely determined would have a material adverse effect on the
consolidated financial condition of the Company and the
Consolidated Subsidiaries.
5. No consent, approval, authorization, permit or
license from, or registration or filing with, any United States,
state or other regulatory authority is required in connection
with the making of the Loan Agreement or the making or payment of
the Notes, with the exception of routine periodic filings made
under the Exchange Act and the filing of International Capital
Form CQ-1 with the Federal Reserve Bank of New York.
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 or furnished to any
other person without my prior written consent.
Very truly yours,
<PAGE>
EXHIBIT F
OPINION OF
DAVIS POLK & WARDWELL,
SPECIAL COUNSEL FOR THE AGENT
[Dated as provided in
Section 3.01 of the
Loan Agreement)
To the Banks and the Agent
Referred to Below
c/o Morgan Guaranty Trust
Company of New York, as Agent
Dear Sirs:
We have participated in the preparation of the
$1,000,000,000 Amended and Restated Loan Agreement (the "Loan
Agreement") dated September 15, 1994 among Lockheed Corporation,
a Delaware corporation (the "Company"), the banks listed on the
signature pages thereof (the "Banks") and Morgan Guaranty Trust
Company of New York, as Agent (the "Agent") and have acted as
special counsel for the Agent for the purpose of rendering this
opinion pursuant to Section 3.01(e) of the Loan Agreement. Terms
defined in the Loan 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
Company of the Loan Agreement and the issuance of the Notes in
accordance with the Loan Agreement are within the Company's
corporate powers and have been duly authorized by all necessary
corporate action.
2. The Loan Agreement constitutes a valid and binding
agreement of the Company and the Notes constitute valid and
binding obligations of the Company, in each case enforceable in
accordance with their respective terms except as limited by (a)
bankruptcy, insolvency or other similar laws affecting creditors'
rights generally and (b) general principles of equity (regardless
of whether considered in a proceeding in equity or at law).
<PAGE>
We are members of the Bar of the State of New York and
the foregoing opinion is limited to the laws of the State of New
York, the federal laws of the United States of America and the
General Corporation Law of the State of Delaware. In giving the
foregoing opinion, we express no opinion as to the effect (if
any) of any law of any jurisdiction (except the State of New
York) in which any Bank is located which limits the rate of
interest that such Bank may charge or collect.
This opinion is rendered solely to you in connection
with the above matter. This opinion may not be relied upon by
you for any other purpose or relied upon by any other person
without our prior written consent.
Very truly yours,
<PAGE>
EXHIBIT G
ASSIGNMENT AND ASSUMPTION AGREEMENT
AGREEMENT dated as of _________, 19__ among [ASSIGNOR]
(the "Assignor"), [ASSIGNEE] (the "Assignee") and LOCKHEED
CORPORATION (the "Company").
W I T N E S S E T H
WHEREAS, this Assignment and Assumption Agreement (the
"Assignment") relates to the $1,000,000,000 Amended and Restated
Loan Agreement dated September 15, 1994 among the Company, the
Assignor and the other Banks party thereto, as Banks, and Morgan
Guaranty Trust Company of New York, as Agent (the "Loan
Agreement");
WHEREAS, as provided under the Loan Agreement, the
Assignor has a Commitment to make Loans to the Company in an
aggregate principal amount not to exceed $______________;
WHEREAS, Loans made to the Company by the Assignor
under the Loan 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 Loan
Agreement and its Notes in respect of a portion of its Commitment
and its Loans thereunder in an amount equal to $_________ (the
"Assigned Amount")(1) and the Assignee proposes to accept
assignment of such rights and assume the corresponding
obligations from the Assignor on such terms.
NOW, THEREFORE, in consideration of the foregoing and
the mutual agreements contained herein, the parties hereto agree
as follows:
SECTION 1. Definitions. All capitalized terms not
otherwise defined herein shall have the respective meanings set
forth in the Loan Agreement.
SECTION 2. Assignment. The Assignor hereby assigns
and sells to the Assignee all of the rights of the Assignor under
_____________________
(1) If any amount is retained by the Assignor, the Assigned
Amount must equal at least $10,000,000 (and multiples of
$1,000,000 in excess thereof) and the retained amount must equal
at least $10,000,000
<PAGE>
the Loan 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 Loan
Agreement to the extent of the Assigned Amount, including the
purchase from the Assignor of the corresponding portion of the
principal amount of the Loans made by the Assignor outstanding at
the date hereof. Upon the execution and delivery hereof by the
Assignor, the Assignee and the Company, 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 Loan Agreement with a Commitment and Loans outstanding
thereunder in an amount equal to the Assigned Amount, and
(ii) the Commitment and the Loans of the Assignor shall, as of
the date hereof, be reduced by a like amount and the Assignor
released from its obligations under the Loan Agreement to the
extent such obligations have been assumed by the Assignee. The
assignment provided for herein shall be without recourse to the
Assignor.
SECTION 3. Payments. As consideration for the
assignment and sale contemplated in Section 2 hereof, the
Assignee shall pay to the Assignor on the date hereof in Federal
funds the amount heretofore agreed between them.(2) It is under-
stood that Facility Fees accrued to the date hereof with respect
to the Assigned Amount are for the account of the Assignor and
such fees accruing from and including the date hereof are for the
account of the Assignee. Each of the Assignor and the Assignee
hereby agrees that if it receives any amount under the Loan
Agreement which is for the account of the other party hereto, it
shall receive the same for the account of such other party to the
extent of such other party's interest therein and shall promptly
pay the same to such other party.
SECTION 4. Consent of the Company. This Agreement is
conditioned upon the consent of the Company pursuant to Section
9.08(c) of the Loan Agreement. The execution of this Agreement
by the Company is evidence of this consent. No consent of the
Company is required if the Assignee is an affiliate of Assignor.
Pursuant to Section 9.08(c), the Company agrees to execute and
deliver a Note payable to the order of Assignee and, if
necessary, the Assignor to evidence the assignment and assumption
provided for herein.
SECTION 5. Agreement of Assignee. The Assignee
(i) appoints and authorizes the Agent to take such action as
agent on its behalf and to exercise such powers under the Loan
________________________
(2) Amount should comvine principal together with accrued
interest and breakage compensation, if any, to be paid by the
Assignee, net (at the option of the Assignor) of any portion of
any upfront fee to be paid by the Assignor to the Assignee. It
may be preferable in any appropriate case to specify these
amounts generically or by formula rather than as a fixed sum.
<PAGE>
Agreement as are delegated to the Agent by the terms thereof,
together with such powers as are reasonably incidental thereto;
(ii) agrees that it will perform in accordance with their terms
all of the obligations which by the terms of the Loan Agreement
are required to be performed by it as a Bank [and] (iii) agrees
that upon the effectiveness of this Assignment, it shall be bound
by any waiver, consent, amendment or other action relating to the
Loan Agreement taken thereunder, by Required Banks which by the
terms of the Loan Agreement is binding on all Banks [; and
(iv) attaches the forms prescribed by the Internal Revenue
Service of the United States certifying as to the Assignee's
status for purposes of determining exemption from United States
withholding taxes with respect to all payments to made to the
Assignee under the Loan Agreement, such other documents as are
necessary to indicate that all such payments are subject to such
rates at a rate reduced by an applicable tax treaty or a letter
certifying that Assignee is not entitled to any such exemption or
reduced rate.](3)
SECTION 6. 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 Company, or the validity and
enforceability of the obligations of the Company in respect of
the Loan 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 Company.
SECTION 7. Governing Law. This Agreement shall be
governed by and construed in accordance with the internal laws of
the State of New York.
SECTION 8. 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.
________________________________
(3) If the Assignee is organized under the laws of a jurisdiction
outside the United States.
<PAGE>
IN WITNESS WHEREOF, the parties have caused this
Agreement to be executed and delivered by their duly authorized
officers as of the date first above written.
[ASSIGNOR]
By:___________________________
Title:
[ASSIGNEE]
By:___________________________
Title:
LOCKHEED CORPORATION
By:___________________________
Title:
Exhibit 12
COMPUTATION OF RATIO OF
EARNINGS TO FIXED CHARGES
(In millions except ratios)
THIRD QUARTER
-----------------
1994 1993
------- -------
EARNINGS BEFORE TAX $ 501 $ 462
FIXED CHARGES
Capitalized interest 1
Interest expense 115 123
Interest expense for finance subsidiary 1 1
Interest portion of rental expense 28 33
------- --------
TOTAL FIXED CHARGES $ 145 $ 157
======= ========
TOTAL FIXED CHARGES EXCLUDING CAPITALIZED INTEREST $ 144 $ 157
======= ========
EARNINGS PLUS FIXED CHARGES EXCLUDING CAPITALIZED INTEREST $ 645 $ 619
======= ========
RATIO OF EARNINGS TO FIXED CHARGES 4.4 3.9
======= ========
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
Unaudited
</LEGEND>
<MULTIPLIER> 1,000,000
<S> <C> <C>
<PERIOD-TYPE> QTR-3 9-MOS
<FISCAL-YEAR-END> DEC-25-1994 DEC-25-1994
<PERIOD-END> SEP-25-1994 SEP-25-1994
<CASH> 0 617
<SECURITIES> 0 0
<RECEIVABLES> 0 1,595
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<INVENTORY> 0 1,708
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<CURRENT-LIABILITIES> 0 2,723
<BONDS> 0 2,269
<COMMON> 0 73
0 0
0 0
<OTHER-SE> 0 2,616
<TOTAL-LIABILITY-AND-EQUITY> 0 9,025
<SALES> 3,165 9,286
<TOTAL-REVENUES> 3,165 9,286
<CGS> 2,946 8,665
<TOTAL-COSTS> 0 0
<OTHER-EXPENSES> (1) 5
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<INTEREST-EXPENSE> 38 115
<INCOME-PRETAX> 182 501
<INCOME-TAX> 70 193
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