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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
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FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED DECEMBER 31, 1994
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COMMISSION FILE NUMBER 1-4238
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LORAL CORPORATION
600 Third Avenue
New York, New York 10016
Telephone: (212) 697-1105
State of incorporation: New York
IRS identification number: 13-1718360
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The registrant has filed all reports required to be filed by Section 13 or
15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and
has been subject to such filing requirements for the past 90 days.
As of January 31, 1995, there were 84,633,199 shares of Loral Corporation
Common Stock outstanding.
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<PAGE> 2
PART I. -- FINANCIAL INFORMATION
LORAL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
---------------------- ------------------------
1994 1993 1994 1993
---------- -------- ---------- ----------
<S> <C> <C> <C> <C>
Sales......................................... $1,334,910 $902,003 $4,025,035 $2,588,087
Costs and expenses............................ 1,189,995 804,051 3,643,393 2,341,557
---------- -------- ---------- ----------
Operating income.............................. 144,915 97,952 381,642 246,530
Interest and investment income................ 3,077 1,957 18,335 4,044
Interest expense.............................. 28,209 9,525 80,861 25,455
---------- -------- ---------- ----------
Income before taxes and equity in net income
(loss) of affiliates........................ 119,783 90,384 319,116 225,119
Income taxes.................................. 45,517 34,346 121,264 83,122
---------- -------- ---------- ----------
Income before equity in net income (loss) of
affiliates.................................. 74,266 56,038 197,852 141,997
Equity in net income (loss) of affiliates..... (3,263) 907 (5,632) 2,016
---------- -------- ---------- ----------
Net income.................................... 71,003 56,945 192,220 144,013
Retained earnings, beginning of period........ 740,315 525,435 643,373 460,288
Dividends..................................... (12,641) (11,602) (36,916) (33,523)
---------- -------- ---------- ----------
Retained earnings, end of period.............. $ 798,677 $570,778 $ 798,677 $ 570,778
========== ======== ========== ==========
Weighted average number of common shares
outstanding................................. 85,532 83,888 85,134 83,644
========== ======== ========== ==========
Earnings per share (primary).................. $ .83 $ .68 $ 2.26 $ 1.72
========== ======== ========== ==========
Cash dividends per common share............... $ .15 $ .14 $ .44 $ .405
========== ======== ========== ==========
</TABLE>
See notes to condensed consolidated financial statements.
1
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LORAL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)
(Unaudited)
<TABLE>
<CAPTION>
DECEMBER 31, MARCH 31,
1994 1994
------------ ----------
<S> <C> <C>
ASSETS:
Current assets:
Cash and cash equivalents........................................ $ 198,396 $ 238,498
Contracts in process............................................. 1,313,172 1,328,338
Deferred income taxes............................................ 61,063 104,063
Other current assets............................................. 127,907 173,714
------------ ----------
Total current assets............................................... 1,700,538 1,844,613
------------ ----------
Property, plant and equipment...................................... 1,988,834 1,926,978
Less, accumulated depreciation and amortization.................. 756,723 620,554
------------ ----------
1,232,111 1,306,424
------------ ----------
Cost in excess of net assets acquired, less amortization........... 1,315,423 1,342,872
Investment in affiliates........................................... 167,124 163,479
Deferred income taxes.............................................. 15,873 37,873
Prepaid pension cost and other assets.............................. 487,151 480,907
------------ ----------
$4,918,220 $5,176,168
========== =========
LIABILITIES and SHAREHOLDERS' EQUITY:
Current liabilities:
Current portion of debt.......................................... $ 572 $ 173,928
Accounts payable, trade.......................................... 197,974 248,657
Customer advances................................................ 212,851 286,273
Accrued employment costs......................................... 210,286 201,238
Income taxes..................................................... 97,146 77,815
Other current liabilities........................................ 326,241 302,256
------------ ----------
Total current liabilities.......................................... 1,045,070 1,290,167
------------ ----------
Postretirement benefits............................................ 632,033 639,266
Other liabilities.................................................. 243,479 241,368
Long-term debt..................................................... 1,421,095 1,624,061
Shareholders' equity:
Preferred stock, $1.00 par value................................. -- --
Common stock, $.25 par value..................................... 21,311 21,056
Capital surplus.................................................. 808,764 773,676
Retained earnings................................................ 798,677 643,373
------------ ----------
1,628,752 1,438,105
Less:
Treasury stock, at cost....................................... 19,633 19,681
Equity adjustments............................................ 32,576 37,118
------------ ----------
Total shareholders' equity......................................... 1,576,543 1,381,306
------------ ----------
$4,918,220 $5,176,168
========== =========
</TABLE>
See notes to condensed consolidated financial statements.
2
<PAGE> 4
LORAL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(Unaudited)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
DECEMBER 31,
------------------------
1994 1993
----------- --------
<S> <C> <C>
Operating activities:
Net income...................................................... $ 192,220 $144,013
Deferred income taxes........................................... 65,000 33,999
Depreciation and amortization................................... 197,091 111,366
Equity in net (income) loss of affiliate........................ 5,632 (2,016)
Changes in assets and liabilities:
Contracts in process......................................... 15,166 41,088
Other current assets......................................... 50,564 37,043
Other assets................................................. (10,938) (23,229)
Accounts payable and accrued liabilities..................... (40,715) (38,144)
Income taxes................................................. 23,827 (17,881)
Postretirement benefits and other liabilities................ (5,122) (7,383)
Other........................................................ (1,858) (114)
----------- --------
Net cash provided by operating activities......................... 490,867 278,742
----------- --------
Investing activities:
Acquisition of businesses....................................... (3,750) (25,767)
Advances to affiliates.......................................... (4,757) (3,895)
Investment in affiliates........................................ (13,773)
Notes receivable................................................ 20,935
Capital expenditures, net....................................... (79,994) (53,162)
----------- --------
(102,274) (61,889)
----------- --------
Financing activities:
Net payments under revolving credit facilities and commercial
paper........................................................ (1,026,322) (265,531)
Proceeds from borrowings........................................ 650,000 200,000
Payments of debt................................................ (37,816)
Seller financing in connection with acquisition of business..... (50,357)
Dividends paid.................................................. (36,916) (33,523)
Proceeds from common stock issuance for stock options and
employee benefit plans....................................... 34,900 6,321
----------- --------
(428,695) (130,549)
----------- --------
Net (decrease) increase in cash and cash equivalents.............. (40,102) 86,304
Cash and cash equivalents, beginning of period.................... 238,498 116,902
----------- --------
Cash and cash equivalents, end of period.......................... $ 198,396 $203,206
========== ========
Supplemental information:
Interest paid during the period................................. $ 72,675 $ 21,665
========== ========
Income taxes paid during the period, net of refunds............. $ 30,216 $ 62,166
========== ========
</TABLE>
See notes to condensed consolidated financial statements.
3
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LORAL CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. The accompanying unaudited condensed consolidated financial statements have
been prepared by the Company pursuant to the rules of the Securities and
Exchange Commission ("SEC") and, in the opinion of the Company, include all
adjustments (consisting of normal recurring accruals) necessary for a fair
presentation of financial position, results of operations and cash flows.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to such SEC rules. The
Company believes that the disclosures made are adequate to make the
information presented not misleading. The condensed consolidated statements
of income for the three and nine months ended December 31, 1994 are not
necessarily indicative of the results to be expected for the full year. It
is suggested that these financial statements be read in conjunction with the
audited financial statements and notes thereto included in the Company's
latest annual report.
2. ACCOUNTING CHANGE:
Effective April 1, 1994, the Company adopted Statement of Financial
Accounting Standards No. 112, "Employers' Accounting for Postemployment
Benefits" ("SFAS 112"). SFAS 112 requires that the costs of benefits
provided to employees after employment but before retirement be recognized
in the financial statements on an accrual basis. The adoption of SFAS 112
did not have a material effect on the financial position or results of
operations of the Company.
3. ACQUISITIONS:
On March 1, 1994, effective January 1, 1994, the Company, through its newly
formed wholly-owned subsidiary, Loral Federal Systems Company ("LFS"),
acquired substantially all the assets and liabilities of the Federal Systems
Company, a division of International Business Machines Corporation, for
$1,503,500,000 in cash, plus acquisition costs of $8,000,000.
This acquisition has been accounted for as a purchase. As such, the
condensed consolidated financial statements reflect the results of
operations of the acquired entity from the date of acquisition. Had this
acquisition occurred on April 1, 1993, the unaudited pro forma sales, net
income and earnings per share for the nine months ended December 31, 1993
would have been: $4,433,100,000; $143,700,000; and $1.72, respectively. The
unaudited pro forma results, which are based on various assumptions, are not
necessarily indicative of what would have occurred had the acquisition been
consummated as of April 1, 1993.
Performance under acquired contracts in process of LFS and other prior
acquisitions contributed after-tax income of $36,091,000 and $32,909,000,
net of after-tax interest cost on debt related to the acquisitions and
incremental amortization of cost in excess of net assets acquired, of
$60,836,000 and $14,798,000 for the nine months ended December 31, 1994 and
1993, respectively.
4
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LORAL CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
4. CONTRACTS IN PROCESS:
Billings and accumulated costs and profits on long-term contracts,
principally U.S. Government, comprise the following:
<TABLE>
<CAPTION>
DECEMBER 31, MARCH 31,
1994 1994
------------ -----------
(IN THOUSANDS)
<S> <C> <C>
Billed contract receivables................................. $ 404,427 $ 423,894
Unbilled contract receivables............................... 1,840,875 1,901,156
Inventoried costs........................................... 472,223 557,259
---------- ----------
2,717,525 2,882,309
Less, unliquidated progress payments........................ (1,404,353) (1,553,971)
---------- ----------
Net contracts in process.................................... $1,313,172 $1,328,338
========== ==========
</TABLE>
5. DEBT:
In June 1994, the Company issued $250,000,000 7 5/8% Senior Notes due 2004
and $400,000,000 8 3/8% Senior Debentures due 2024 under a shelf
registration statement which was increased to $800,000,000 in May 1994.
These securities are not callable and are not subject to any sinking fund
provisions. The proceeds were used to reduce the Company's outstanding
commercial paper borrowings. The Company has no immediate plans to utilize
the remaining balance of $150,000,000 available under the shelf registration
statement.
In February 1994, the Company entered into a $1,200,000,000 revolving credit
facility, currently maturing in November 1999, and a 364-day $500,000,000
revolving credit facility. In June 1994, the Company cancelled its 364-day
$500,000,000 revolving credit facility.
6. INVESTMENT IN AFFILIATES:
In September 1994, the Company exchanged the $30,000,000 14 3/4% pay-in-kind
Subordinated Convertible Debenture due 2004 (the "Debenture") issued in 1989
by K&F Industries, Inc. ("K&F") in connection with the purchase by K&F of
certain divisions of the Company. The Debenture was exchanged for
$11,514,000 in cash, net of expenses, representing a non-recurring gain
recorded as interest income, and a 22 1/2% equity interest in K&F. After the
exchange, the Chairman of Loral owns approximately 27% of K&F. In accordance
with Securities and Exchange Commission Staff Accounting Bulletin No. 81,
the Company had not recognized the value of the Debenture and has not
recognized any value for its 22 1/2% equity interest in K&F.
5
<PAGE> 7
LORAL CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
7. CONTINGENCIES:
At acquisition, LFS's contracts in process included a systems integration
contract with the Federal Aviation Administration ("FAA") for the
modernization of the U.S. air traffic control system. Prior to the
acquisition, discussions were held between LFS and FAA officials with
respect to modifying certain terms and conditions. In December 1993, the FAA
initiated a comprehensive review of the contract. In June 1994, the FAA (i)
reduced the scope of the contract by eliminating certain requirements of the
program and (ii) suspended certain other program activities pending
completion of their review. In September 1994, the FAA completed its review
and announced that LFS would continue as the contractor under a revised
program. LFS has continued to perform under the contract and, in response to
a FAA request, has submitted a proposal for a modified contract. The parties
anticipate completing negotiation of the scope and structure of the modified
contract during the first half of 1995. The ultimate extent of the contract
modifications is not determinable at this time. The final purchase price of
LFS is subject to a reduction, up to a specified limit, based upon the
outcome of these matters. In the opinion of management, and in light of the
potential reduction of the LFS purchase price and reserves provided, the
ultimate outcome of this matter will not have a material adverse effect on
the financial position or results of operations of the Company.
6
<PAGE> 8
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION
Effective January 1, 1994, the Company, through Loral Federal Systems
Company ("LFS") acquired substantially all the assets and liabilities of the
Federal Systems Company, a division of International Business Machines
Corporation. The results of operations of LFS are included from the effective
date of acquisition. (See Note 3 to Condensed Consolidated Financial
Statements.)
COMPARISON OF RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED
DECEMBER 31, 1994 AND DECEMBER 31, 1993
Sales for the quarter ended December 31, 1994 increased to $1.335 billion
from $902 million in the prior year. Net income for the quarter ended December
31, 1994 increased to $71.0 million, or $.83 per share, compared with $56.9
million or $.68 per share, in the prior year. The results of operations of LFS
contributed $15.4 million, or $.18 per share, to the current quarter's earnings;
the Company's share of the development costs of Globalstar, a limited
partnership formed in March 1994 to design, construct and operate a worldwide
satellite-based telecommunications system ("Globalstar"), reduced the current
quarter's earnings by $2.4 million, or $.03 per share.
Earnings per share for the quarter ended December 31, 1994 are based on
85.5 million primary weighted average shares outstanding, compared with 83.9
million in the prior year.
The sales increase was attributable to the results of sales in LFS business
divisions which, including $186.9 million of sales attributable to new business
awards subsequent to the acquisition, amounted to $604.1 million. Sales also
includes higher volume of $13.7 million for ALR-56 radar warning systems and
$8.3 million for Infrared Linescanners; offset by lower volume of $51.5 million
for the Multiple Launch Rocket System (MLRS), $31.3 million for the F/A-18
Forward-Looking Infrared (FLIR) targeting and weapon delivery system and $26.0
million for the ALQ-131 receiver/processor. The Company has a diverse base of
programs, none of which is expected to account for more than 7% of fiscal 1995
revenues. The change in sales from period to period includes increases and
decreases on a variety of programs which individually are not significant to the
overall sales change.
Operating income increased to $144.9 million from $98.0 million in the
prior year. The operating income increase includes $50.1 million attributable to
the results of the acquired LFS business. Operating income as a percentage of
sales remained constant at 10.9% However, excluding the effect of the acquired
LFS business, operating income as a percentage of sales increased to 13.0% from
10.9% as a result of improved margins due to operating efficiencies,
particularly at the Loral Vought Systems division, and lower postretirement
health care and life insurance costs (.7% of sales) primarily due to various
plan amendments the Company adopted in March 1994.
Interest expense, net of interest and investment income, increased to $25.1
million from $7.6 million in the prior year primarily due to the $25.2 million
of interest expense on the debt incurred as a result of the LFS acquisition,
offset by the Company's strong cash flow. The Company's free cash flow (net cash
from operating activities, less capital expenditures, plus proceeds of stock
purchases by employee benefit plans and exercises of stock options) was $498.2
million for the twelve months ended December 31, 1994, of which $170.8 million
was generated in the quarter ended December 31, 1994.
The Company's effective tax rate was 38% in the quarters ended December 31,
1994 and 1993.
7
<PAGE> 9
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION -- (CONTINUED)
FINANCIAL CONDITION
The LFS purchase price was initially financed through cash on hand and
commercial paper borrowings which were supported by a $1.2 billion revolving
credit facility, currently maturing in November 1999, and a 364-day $500 million
revolving credit facility. As originally planned, in order to fix interest costs
and lengthen maturities, in June 1994, the Company issued $250 million 7 5/8%
Senior Notes due 2004 and $400 million 8 3/8% Senior Debentures due 2024, under
a shelf registration statement which was increased to $800 million in May 1994.
The proceeds were used to reduce the Company's outstanding commercial paper
borrowings, including the $173.5 million which was classified as current portion
of debt at March 31, 1994. Additionally, in June 1994, the Company cancelled the
364-day $500 million revolving credit facility. The Company has no immediate
plans to utilize the balance available under the shelf registration statement.
(See Note 5 to Condensed Consolidated Financial Statements.)
The majority of the Company's foreign currency hedges are entered into at
the direction of the customer pursuant to contractual requirements. Any gain or
loss on the hedges accrues for the benefit or detriment of the customer and does
not expose the Company to risk. The remaining foreign currency hedges are not
material.
The Company's current ratio improved to 1.6:1 at December 31, 1994,
compared with 1.4:1 at March 31, 1994. The debt (net of cash) to equity ratio
improved to .78:1 at December 31, 1994 from 1.13:1 at March 31, 1994.
Although the Company is not immune to the effects of declining U.S. defense
spending, the Company believes that its areas of concentration, its diverse base
of programs, complemented and broadened by the program base of businesses
recently acquired, as well as other business opportunities, such as Globalstar,
will enable the Company to offset overall U.S. budget decline impacts.
COMPARISON OF RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED
DECEMBER 31, 1994 AND DECEMBER 31, 1993
Sales for the nine months ended December 31, 1994 increased to $4.025
billion from $2.588 billion in the prior year. Net income for the nine months
ended December 31, 1994 increased to $192.2 million, or $2.26 per share,
compared with $144.0 million or $1.72 per share, in the prior year. The results
of operations of LFS contributed $30.9 million, or $.36 per share, to the
current period's earnings; the Company's share of the development costs of
Globalstar reduced the current period's earnings by $6.9 million, or $.08 per
share.
Earnings per share for the nine months ended December 31, 1994 are based on
85.1 million primary weighted average shares outstanding, compared with 83.6
million in the prior year.
The sales increase was attributable to the results of sales in LFS business
divisions which, including $327.0 million of sales attributable to new business
awards subsequent to the acquisition, amounted to $1.715 billion. Sales also
includes higher volume of $36.2 million for ALR-56 radar warning systems, $13.4
million for the Army Tactical Missile System (ATACMS) and $13.3 million for the
Atmospheric Infrared Sounder (AIRS) that will fly on NASA's Earth Observing
System platform; offset by lower volume of $40.4 million for the Multiple Launch
Rocket System (MLRS), $37.4 million for the F/A-18 Forward-Looking Infrared
(FLIR) targeting and weapon delivery system, $30.4 million for the ALQ-131
receiver/processor, $28.2 million for gyro-optic assemblies for Maverick
missiles, $25.5 million for the Automated Remote Tracking Station (ARTS) and
$23.9 million for the AN/BSY-2 combat control system for the U.S. Navy's SSN-21
attack submarine. The Company has a diverse base of programs, none of which is
expected to account for more than 7% of fiscal 1995 revenues. The change in
sales from period to period includes increases and decreases on a variety of
programs which individually are not significant to the overall sales change.
8
<PAGE> 10
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION -- (CONTINUED)
Operating income increased to $381.6 million from $246.5 million in the
prior year. The operating income increase includes $119.0 million attributable
to the results of the acquired LFS business. Operating income as a percentage of
sales remained constant at 9.5%. However, excluding the effect of the acquired
LFS business, operating income as a percentage of sales increased to 11.4% in
the nine months ended December 31, 1994 from 9.5% in the prior year as a result
of improved margins due to sales mix and operating efficiencies, particularly at
the Loral Vought Systems division, and lower postretirement health care and life
insurance costs (.3% of sales) primarily due to various plan amendments the
Company adopted in March 1994.
Interest expense, net of interest and investment income, increased to $62.5
million from $21.4 million in the prior year primarily due to the $69.1 million
of interest expense on the debt incurred as a result of the LFS acquisition,
offset by a non-recurring gain, net of expenses, of $11.5 million ($.08 per
share) for the exchange of K&F debentures for cash and equity (see Note 6 to the
Condensed Consolidated Financial Statements) and strong cash flow. The Company's
free cash flow (net cash from operating activities, less capital expenditures,
plus proceeds of stock purchases by employee benefit plans and exercises of
stock options) was $498.2 million for the twelve months ended December 31, 1994,
of which $445.8 million was generated in the nine months ended December 31,
1994.
The Company's effective tax rate increased to 38% in the nine months ended
December 31, 1994 from 36.9% in the prior year due to the Omnibus Budget
Reconciliation Act of 1993, which was signed into law on August 10, 1993.
9
<PAGE> 11
PART II -- OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
The following exhibits are filed as part of this report:
<TABLE>
<S> <C>
Exhibit 4.1 Amended and Restated Revolving Credit Agreement among Loral
Corporation, Certain Banks, Morgan Guaranty Trust Company of New
York, Chemical Bank and Bank of America Illinois, dated as of
November 23, 1994
Exhibit 11.1 Computation of Earnings per Common Share for the three months ended
December 31, 1994 and 1993
Exhibit 11.2 Computation of Earnings per Common Share for the nine months ended
December 31, 1994 and 1993
Exhibit 12 Computation of Ratio of Earnings to Fixed Charges for the nine months
ended December 31, 1994 and 1993
</TABLE>
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the quarter ended December 31,
1994.
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.
<TABLE>
<S> <C>
LORAL CORPORATION
---------------------------------------------
Registrant
Date: February 13, 1994 MICHAEL P. DEBLASIO
---------------------------------------------
Michael P. DeBlasio
Senior Vice President -- Finance
(Principal Financial Officer)
and
Registrant's Authorized Officer
</TABLE>
10
<PAGE> 12
EXHIBIT INDEX
-------------
Exhibit
No. Description
- ------- -----------
4.1 Amended and Restated Revolving Credit Agreement
among Loral Corporation, Certain Banks, Morgan
Guaranty Trust Company of New York, Chemical
Bank and Bank of America Illinois, dated as of
November 23, 1994
11.1 Computation of Earnings per Common share
for the three months ended December 31, 1994
and 1993
11.2 Computation of Earnings per Common Share for the
nine months ended December 31, 1994 and 1993
12 Computation of Ratio of Earnings to Fixed Charges
for the nine months ended December 31, 1994 and 1993
27 Financial Data Schedule
<PAGE> 1
Exhibit 4.1
AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT
among
LORAL CORPORATION,
CERTAIN BANKS,
MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
as Documentation Agent and Co-Arranger
CHEMICAL BANK,
as Administrative Agent and Co-Arranger
and
BANK OF AMERICA ILLINOIS,
as Co-Agent
Dated as of November 23, 1994
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
SECTION 1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Other Definitional Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
2.1 Revolving Credit Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
2.2 Revolving Credit Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
2.3 Procedure for Revolving Credit Borrowing . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
2.4 Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
(a) Commitment Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
(b) Other Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
2.5 Termination or Reduction of Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
2.6 Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
2.7 Conversion and Continuation Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
2.8 Minimum Amounts of Tranches . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
2.9 Interest Rates and Payment Dates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
2.10 Computation of Interest and Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
2.11 Inability to Determine Interest Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
2.12 Pro Rata Treatment and Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
2.13 Illegality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
2.14 Other Costs; Increased Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
2.15 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
2.16 Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
2.17 Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 3. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
3.1 Financial Condition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
3.2 No Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
3.3 Corporate Existence; Compliance with Law . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
3.4 Corporate Power; Authorization; Enforceable Obligations . . . . . . . . . . . . . . . . . . . 31
3.5 No Legal Bar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
3.6 No Material Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
3.7 No Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
3.8 Ownership of Property; Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
3.9 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
3.10 Federal Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
3.11 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
3.12 Investment Company Act; Other Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . 33
3.13 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
3.14 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
3.15 Full Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
</TABLE>
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<TABLE>
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SECTION 4 CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
4.1 Conditions of Initial Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
4.2 Conditions to all Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 5. AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
5.1 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
5.2 Certificates; Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
5.3 Payment of Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
5.4 Conduct of Business and Maintenance of Existence . . . . . . . . . . . . . . . . . . . . . . . 39
5.5 Maintenance of Property; Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
5.6 Inspection of Property; Books and Records; Discussions . . . . . . . . . . . . . . . . . . . . 40
5.7 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
5.8 Environmental Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
5.9 Ratings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 6. NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
6.1 Financial Condition Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
6.2 Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
6.3 Limitation on Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
6.4 Limitation on Fundamental Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
6.5 Limitation on Restricted Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
6.6 Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
6.7 Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
6.8 Sale and Leaseback . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
6.9 Corporate Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
6.10 Restrictions on Subsidiaries. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 7. EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 8. THE AGENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
8.1 Appointment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
8.2 Delegation of Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
8.3 Exculpatory Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
8.4 Reliance by Agents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
8.5 Notice of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
8.6 Non-Reliance on Agents and Other Banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
8.7 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
8.8 Each Agent in Its Individual Capacity . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
8.9 Successor Agents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 9. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
9.1 Amendments and Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
9.2 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
9.3 No Waiver; Cumulative Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
9.4 Survival of Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . 57
9.5 Payment of Expenses and Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
</TABLE>
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<TABLE>
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9.6 Successors and Assigns; Participations; Purchasing
Banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
9.7 Adjustments; Set-off . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
9.8 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
9.9 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
9.10 GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
9.11 Submission To Jurisdiction; Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
9.12 WAIVERS OF JURY TRIAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
9.13 Integration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
9.14 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
</TABLE>
Schedules:
- ---------
SCHEDULE I - Commitments and Commitment Percentages
SCHEDULE 6.4 - Existing Contractual Obligations
SCHEDULE 6.6 - Certain Investments
Exhibits:
- --------
EXHIBIT A - Form of Note
EXHIBIT B-1 - Form of Opinion of Willkie Farr & Gallagher
EXHIBIT B-2 - Form of Opinion of General Counsel
EXHIBIT C - Form of Closing Certificate
EXHIBIT D - Form of Commitment Transfer Supplement
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<PAGE> 5
AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT dated as of
November 23, 1994 among LORAL CORPORATION, a New York corporation (the
"Company"), the several financial institutions parties from time to time to this
Agreement (collectively, the "Banks"; individually, a "Bank"), MORGAN GUARANTY
TRUST COMPANY OF NEW YORK, a New York banking corporation ("Morgan"), as
documentation agent for the Banks hereunder (in such capacity, the
"Documentation Agent") and co-arranger (each of Morgan and Chemical in such
capacity is a "Co-Arranger"), CHEMICAL BANK, a New York banking corporation
("Chemical"), as administrative agent for the Banks hereunder (in such capacity,
the "Administrative Agent"; the Administrative Agent and the Documentation Agent
are herewith referred to collectively as the "Agents") and as Co-Arranger, and
BANK OF AMERICA ILLINOIS, an Illinois banking corporation, as Co-Agent.
W I T N E S S E T H :
WHEREAS, the Company has requested the Banks to make revolving
credit loans to the Company in an aggregate principal amount not to exceed
$1,200,000,000 at any time outstanding, the proceeds of which may be used for
general corporate purposes;
WHEREAS, the Banks are willing to make such Loans to the
Company upon the terms and subject to the conditions hereinafter set forth;
and
WHEREAS, this Agreement amends and restates the Existing
Revolving Credit Agreement (as hereinafter defined);
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the following
terms have the following meanings:
"Affiliate": with respect to any Person, any other Person
which, directly or indirectly, is in control of, is controlled by,
or is under common control with, such Person. For purposes of this
definition, a Person shall be deemed to be "controlled by" any
other Person which possesses, directly or indirectly, power either
to (i) vote 10% or more of the securities having ordinary voting
power for the election of directors of such Person or (ii) direct or
cause the direction of the management and policies of such Person
whether by contract or otherwise.
<PAGE> 6
"Agreement": this Amended and Restated Revolving Credit
Agreement, as amended, supplemented or modified from time to time.
"Applicable Margin": with respect to each day (a) for each
Eurodollar Loan and C/D Rate Loan when the Ratings are as set forth
below, the rate per annum set forth below opposite such Ratings:
Ratings Applicable Applicable
------- Eurodollar C/D Rate
Moody's S&P Margin Margin
------- --- ------ ----------
A2 A 0.2500% 0.3750%
A3 A- 0.3250% 0.4500%
Baa1 BBB+ 0.4000% 0.5250%
Baa2 BBB 0.4500% 0.5750%
Baa3 BBB- 0.5750% 0.7000%
Any other 0.6875% 0.8125%
Rating lower than
those set forth above
; and (b) for each Base Rate Loan, 0% (unless either Rating shall be
lower than Baa3 or BBB-, in which case the Applicable Margin for such
Base Rate Loan shall be 0.25%); provided, that (i) if the Ratings are
split by only one level, the Applicable Margin shall be the one
applicable to the lower Rating and (ii) if the Ratings are split by
two or more levels, the Applicable Margin shall be the one that is
applicable to the Rating which is one level above the lower Rating;
and provided further, that if the Loans or the Commitments shall be
designated a "highly leveraged transaction" by any applicable bank
regulator or by the Administrative Agent (if directed to do so by any
applicable Governmental Authority or if required to do so pursuant to
rules, regulations or interpretations promulgated by any applicable
Governmental Authority), in either case employing a definition of
"highly leveraged transaction" no more inclusive than the definition
in effect prior to June 30, 1992, the Administrative Agent shall so
notify the Banks and the Company and, on and after the date of such
notification, the Applicable Margin shall be 2.5%, 2.625% and 1.5% for
each Eurodollar Loan, C/D Rate Loan and Base Rate Loan, respectively.
"Available Commitment": as to any Bank, at a particular time,
an amount equal to such Bank's Commitment Percentage of the excess, if
any, of (a) the aggregate Commitments at such time over (b) the
aggregate outstanding
2
<PAGE> 7
principal amount of the Loans at such time; collectively, as to all
the Banks, the "Available Commitments".
"Base Rate": at a particular date, the higher of (a) the rate
of interest publicly announced by the Administrative Agent in New
York, New York from time to time as its reference rate and (b) 1/2 of
1% above the rate set forth for such date opposite the caption
"Federal Funds (Effective)" in the weekly statistical release
designated as "H.15(519)", or any successor publication, published by
the Board of Governors of the Federal Reserve System. The reference
rate is not intended to be the lowest rate of interest charged by the
Administrative Agent in connection with extensions of credit to
debtors.
"Base Rate Loans": Loans hereunder at such time as they are
made and/or being maintained at a rate of interest based upon the Base
Rate.
"Borrowing Date": any day specified by the Company in a
notice pursuant to Section 2.3 as a date on which the Company requests
the Banks to make Loans hereunder.
"Business Day": a day other than a Saturday, Sunday or other
day on which commercial banks in New York City are authorized or
required by law to close.
"Cash Collateral": as defined in Section 2.6(c).
"Cash Collateral Account": as defined in Section 2.6(c).
"Cash Equivalents": (i) securities issued or directly and
fully guaranteed or insured by the United States Government or any
agency or instrumentality thereof having maturities of not more than
twelve months from the date of acquisition, (ii) time deposits and
certificates of deposit of any Bank or any domestic commercial bank
having capital and surplus in excess of $500,000,000 the holding
company of which has a commercial paper rating meeting the
requirements specified in clause (iv) below having maturities of not
more than twelve months from the date of acquisition, (iii) repurchase
obligations with a term of not more than seven days for underlying
securities of the types described in clauses (i) and (ii) entered into
with any Bank or bank meeting the qualifications specified in clause
(ii) above, (iv) commercial paper rated at least A-1 or the equivalent
thereof by S&P or P-1 or the equivalent thereof by Moody's and in
either case maturing within twelve months after the date of
acquisition, (v) tax exempt obligations rated at least A2 or the
equivalent thereof by Moody's and A or the equivalent thereof by S&P,
(vi) money market mutual funds, and (vii) commercial paper (other than
commercial paper referred to in the preceding clause (iv)) rated at
least A-2
3
<PAGE> 8
or the equivalent thereof by S&P or P-2 or the equivalent thereof by
Moody's in an aggregate principal amount not in excess of 25% of the
liquid assets of the Company and its consolidated Subsidiaries and in
either case maturing within twelve months after the date of
acquisition.
"C/D Assessment Rate": for any day as applied to any C/D Rate
Loan, the net annual assessment rate (rounded upward to the nearest
1/100th of 1%) determined by the Administrative Agent to be payable on
such day to the Federal Deposit Insurance Corporation or any successor
(" FDIC") for FDIC's insuring time deposits made in Dollars at offices
of the Administrative Agent in the United States.
"C/D Base Rate": with respect to each day during each
Interest Period pertaining to a C/D Rate Loan, the rate of interest
per annum determined by the Administrative Agent to be the arithmetic
average (rounded upward to the nearest 1/100th of 1%) of the
respective rates notified to the Administrative Agent by each of the
Reference Banks as the average rate bid at 9:00 A.M., New York City
time, or as soon thereafter as practicable, on the first day of such
Interest Period by a total of three certificate of deposit dealers of
recognized standing selected by such Reference Bank for the purchase
at face value from such Reference Bank of its certificates of deposit
in an amount comparable to the C/D Rate Loan of such Reference Bank to
which such Interest Period applies and having a maturity comparable to
such Interest Period.
"C/D Rate": with respect to each day during each Interest
Period pertaining to a C/D Rate Loan, a rate per annum determined for
such day in accordance with the following formula (rounded upward to
the nearest 1/100th of 1%):
C/D Base Rate + C/D Assessment Rate
-----------------------------
1.00 - C/D Reserve Percentage
"C/D Rate Loans": Loans the rate of interest applicable to
which is based upon the C/D Rate.
"C/D Reserve Percentage": for any day as applied to any C/D
Rate Loan, that percentage (expressed as a decimal) which is in effect
on such day, as prescribed by the Board of Governors of the Federal
Reserve System (or any successor), for determining the maximum reserve
requirement for a member bank of the Federal Reserve System in New
York City with deposits exceeding one billion Dollars in respect of
new non-personal time deposits in Dollars in New York City having a
maturity comparable to the Interest Period for such C/D Rate Loan and
in an amount of $100,000 or more.
4
<PAGE> 9
"Change in Control": an event or series of events as a result
of which (i) any "person" (as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended (the "
Exchange Act")) is or becomes the "beneficial owner" (as defined in
Rules 13d-3 and 13d-5 under the Exchange Act) of shares entitling the
holder thereof to cast more than 30% of the votes for the election of
directors of the Company; or (ii) at any time Continuing Directors do
not constitute a majority of the Board of Directors of the Company.
"Closing Date": November 23, 1994.
"Code": the Internal Revenue Code of 1986, as amended from
time to time.
"Commitment": as to any Bank, its obligation to make Loans to
the Company in an aggregate principal amount not to exceed at any one
time outstanding the amount set forth opposite such Bank's name in
Schedule I hereto, as such amount may be reduced from time to time as
provided herein; collectively, as to all the Banks, the "
Commitments".
"Commitment Fee Rate": with respect to each day when the
Ratings are as set forth below, the rate per annum set forth below
opposite such Ratings:
Ratings
-------
Moody's S&P Commitment Fee Rate
------- --- -------------------
A2 A 0.0900%
A3 A- 0.1000%
Baa1 BBB+ 0.1250%
Baa2 BBB 0.1500%
Baa3 BBB- 0.1875%
Any other Rating 0.2500%
lower than those
set forth above
; provided, that (a) if the Ratings are split by only one level, the
Commitment Fee Rate shall be the one applicable to the lower Rating
and (b) if the Ratings are split by two or more levels, the Commitment
Fee Rate shall be the one that is applicable to the Rating which is
one level above the lower Rating; and provided further, that if the
Loans or the Commitments shall be designated a "highly leveraged
transaction" by any applicable bank regulator or by the Administrative
Agent (if directed to do so by any applicable Governmental Authority
or if required to do so pursuant to
5
<PAGE> 10
rules, regulations or interpretations promulgated by any applicable
Governmental Authority), in either case employing a definition of
"highly leveraged transaction" no more inclusive than the definition
in effect prior to June 30, 1992, the Administrative Agent shall so
notify the Banks and the Company and, on and after the date of such
notification, the Commitment Fee Rate shall be 0.5000%.
"Commitment Percentage": as to any Bank, the percentage of
the aggregate Commitments constituted by such Bank's Commitment.
"Commitment Period": the period from and including the date
hereof to but not including the Termination Date.
"Commitment Transfer Supplement": a Commitment Transfer
Supplement, substantially in the form of Exhibit D.
"Commonly Controlled Entity": an entity, whether or not
incorporated, which is under common control with the Company within
the meaning of Section 4001 of ERISA or is part of a group which
includes the Company and which is treated as a single employer under
Section 414 of the Code.
"Consolidated Net Income": for any period, the consolidated
net income (or deficit) of the Company and its Subsidiaries for such
period (taken as a cumulative whole), determined in accordance with
GAAP.
"Consolidated Net Worth": at a particular date, all amounts
which would be included under shareholders' equity on a consolidated
balance sheet of the Company and its Subsidiaries determined on a
consolidated basis in accordance with GAAP as at such date.
"Contingent Obligation": as to any Person, any obligation of
such Person guaranteeing or in effect guaranteeing any Indebtedness,
leases, dividends or other obligations quantified in accordance with
the last sentence of this definition (the "primary obligations") of
any other Person (the "primary obligor"), other than a Wholly Owned
Subsidiary, in any manner, whether directly or indirectly, including,
without limitation, any obligation of such Person, whether or not
contingent (a) to purchase any such primary obligation or any property
constituting direct or indirect security therefor, (b) to advance or
supply funds (i) for the purchase or payment of any such primary
obligation or (ii) to maintain working capital or equity capital of
the primary obligor or otherwise to maintain the net worth or solvency
of the primary obligor, (c) to purchase property, securities or
services primarily for the purpose of assuring the owner of any such
primary obligation of the ability of the primary obligor to make
payment of such primary obligation or (d) otherwise to assure or hold
6
<PAGE> 11
harmless the owner of any such primary obligation against loss in
respect thereof; provided, however, that the term Contingent
Obligation shall not include (i) endorsements of instruments for
deposit or collection in the ordinary course of business and (ii)
performance guarantees by the Company made in the ordinary course of
business of contracts entered into by SSL. The amount of any
Contingent Obligation shall be deemed to be an amount equal to the
stated or determinable amount of the primary obligation in respect of
which such Contingent Obligation is made or, if not stated or
determinable, the amount reasonably anticipated to be payable by the
Company in respect of such Contingent Obligation as determined by the
Company in good faith.
"Continuing Director": at any date a member of the Company's
Board of Directors who was a member of such Board 12 months prior to
such date.
"Contractual Obligation": as to any Person, any provision of
any security issued by such Person or of any agreement, instrument or
undertaking to which such Person is a party or by which it or any of
its property is bound.
"Customer Advances": at any time, advances and prepayments
received by the Company or any Subsidiary pursuant to written
contracts in the ordinary course of business less costs incurred by
the Company or any Subsidiary in the performance of such contracts.
"Default": any of the events specified in Section 7, whether
or not any requirement for the giving of notice, the lapse of time, or
both, or any other condition, has been satisfied.
"Dollars" and "$": dollars in lawful currency of the United
States of America.
"Domestic Dollar Loans": the collective reference to C/D Rate
Loans and Base Rate Loans.
"Domestic Lending Office": initially, the office of each Bank
designated as such in Schedule I; thereafter, such other office of
such Bank, if any, located within the United States which shall be
making or maintaining Base Rate Loans or C/D Rate Loans.
"Effective Date": the first date on which this Agreement
shall have been signed by a duly authorized officer of each of the
Company, the Agents and each of the Banks whose name is set forth on
the signature pages hereto.
"Environmental Laws": any and all foreign, Federal, state,
local or municipal laws, rules, orders, regulations, statutes,
ordinances, codes, decrees or requirements of any
7
<PAGE> 12
Governmental Authority regulating, relating to or imposing liability
or standards of conduct concerning environmental protection matters,
including without limitation, Hazardous Materials, as now or may at
any time hereafter be in effect.
"Equity Issuance Proceeds": an amount equal to (a) the
aggregate cash proceeds (other than any such proceeds received from
the issuance or sale of capital stock to a Subsidiary or received from
the issuance of Redeemable Stock) received by the Company or any
Subsidiary from such issuance or sale, as the case may be, less fees
and expenses, including underwriter's discount, paid in connection
with such issuance or sale, as the case may be; (b) the principal
amount of Indebtedness of the Company that has been converted into or
exchanged for capital stock (other than capital stock issued to a
Subsidiary and other than Redeemable Stock); (c) the fair market value
(as determined by the Board of Directors of the Company in good faith)
of any assets purchased by the Company or any of its Wholly Owned
Subsidiaries in exchange for the issuance of capital stock of the
Company (other than capital stock issued to a Subsidiary and other
than Redeemable Stock); and (d) if the Company issues capital stock to
any 401(k) plan of the Company in satisfaction of its obligation to
make contributions thereto, the amount of the contribution satisfied.
"ERISA": the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"Eurodollar Business Day": any Business Day on which dealings
in foreign currencies and exchange between banks may be carried on in
London, England.
"Eurodollar Lending Office": initially, the office of each
Bank designated as such in Schedule I; thereafter, such other office
of such Bank, if any, which shall be making or maintaining Eurodollar
Loans.
"Eurodollar Loans": Loans hereunder at such time as they are
made and/or being maintained at a rate of interest based upon the
Eurodollar Rate.
"Eurodollar Rate": with respect to the Interest Period
pertaining to a Eurodollar Loan, the rate per annum equal to the
average (rounded upwards to the nearest whole multiple of 1/100th of
1%) of the respective rates notified to the Administrative Agent by
the Reference Banks as the rate at which each of their Eurodollar
Lending Offices is offered Dollar deposits two Eurodollar Business
Days prior to the beginning of such Interest Period in the interbank
eurodollar market where the eurodollar and foreign currency and
exchange operations of such Eurodollar Lending Office are customarily
conducted at or about 10:00 A.M., New York
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City time, for delivery on the first day of such Interest Period for
the number of days comprised therein and in an amount comparable to
the amount of the Eurodollar Loan of such Reference Bank to which such
Interest Period applies.
"Event of Default": any of the events specified in Section 7;
provided, that any requirement for the giving of notice, the lapse of
time, or both, or any other condition, event or act has been
satisfied.
"Excluded Employee Loans": loans or advances to directors,
officers or employees of the Company or any Wholly Owned Subsidiary
the principal amount of which, when added to the principal amount of
existing such loans or advances, would not exceed $5,000,000.
"Existing Revolving Credit Agreement": the Revolving Credit
Agreement dated as of February 23, 1994, as amended, among the
Company, the financial institutions parties thereto, Morgan, as
documentation agent and co-arranger, Chemical, as administrative agent
and co-arranger, and Barclays Bank PLC and Bank of America Illinois
(formerly known as Continental Bank N.A.), as co-agents. The Existing
Revolving Credit Agreement will be in effect until the Closing Date.
"Federal Systems": Loral Federal Systems Corporation, a
Delaware corporation.
"Financing Lease": (a) any lease of property, real or
personal, the then present value of the minimum rental commitment
thereunder of which should, in accordance with GAAP, be capitalized on
a balance sheet of the lessee, and (b) any other such lease the
obligations under which are capitalized on a consolidated balance
sheet of the Company and its Subsidiaries.
"Funded Debt": of a Person, at a particular date, the sum
(without duplication) at such date of (a) all indebtedness of such
Person (i) for borrowed money or (ii) for the deferred purchase price
of property or services or (iii) which is evidenced by a note, bond,
debenture or similar instrument, and (b) all obligations under
Financing Leases.
"GAAP": generally accepted accounting principles in the
United States of America in effect from time to time.
"Governmental Authority": any nation or government, any state
or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
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"Hazardous Materials": any hazardous materials, hazardous
wastes, hazardous constituents, hazardous or toxic substances, and
petroleum products (including crude oil or any fraction thereof),
defined or regulated as such in or under any Environmental Law.
"Historical Dividends": annual cash dividends on the
Company's common stock in an amount per share not exceeding the amount
per share paid in respect of the Company's common stock for the fiscal
quarter ended September 30, 1994, calculated on an annualized basis;
provided, that in each year beginning in fiscal year 1995 "Historical
Dividends" shall be increased by an amount equal to 10% of Historical
Dividends for the previous year.
"Indebtedness": of a Person, at a particular date, the sum
(without duplication) at such date of (a) Funded Debt, (b) all
obligations of such Person in respect of letters of credit,
acceptances, or similar obligations issued or created for the account
of such Person and (c) all indebtedness or other liabilities secured
by any Lien on any property owned by such Person even though such
Person has not assumed or otherwise become liable for the payment
thereof; but excluding any trade or other account payable in the
ordinary course of business (i) which is not disputed or overdue for a
period longer than the period in which such Person customarily pays
such account or (ii) under which the amount owed is not in excess of
$5,000,000.
"Insolvency" or "Insolvent": at any particular time, the
condition that a Multiemployer Plan is insolvent within the meaning of
Section 4245 of ERISA.
"Interest Payment Date": (a) as to any Base Rate Loan, the
last day of each calendar month, (b) as to any Eurodollar Loan in
respect of which the Company has selected an Interest Period of one,
two or three months, and as to any C/D Rate Loan in respect of which
the Company has selected an Interest Period of 30, 60 or 90 days, the
last day of such Interest Period, and (c) as to any Eurodollar Loan or
C/D Rate Loan having an Interest Period of six months or 180 days,
respectively, each day which is three months or 90 days, respectively,
after the first day of such Interest Period and the last day of such
Interest Period.
"Interest Period": (a) with respect to any Eurodollar Loan:
(i) initially, the period commencing on the
borrowing or conversion date, as the case may be, with respect
to such Eurodollar Loan and ending one, two, three or six
months thereafter, as selected by the Company in its notice of
borrowing or notice of
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<PAGE> 15
conversion, as the case may be, given with respect thereto; and
(ii) thereafter, each period commencing on the
last day of the next preceding Interest Period applicable to
such Eurodollar Loan and ending one, two, three or six months
thereafter, as selected by the Company by irrevocable notice
to the Administrative Agent not less than three Eurodollar
Business Days prior to the last day of the then current
Interest Period with respect thereto;
(b) with respect to any C/D Rate Loan:
(i) initially, the period commencing on the
borrowing or conversion date, as the case may be, with respect
to such C/D Rate Loan and ending 30, 60, 90 or 180 days
thereafter, as selected by the Company in its notice of
borrowing or notice of conversion, as the case may be, given
with respect thereto; and
(ii) thereafter, each period commencing on the
last day of the next preceding Interest Period applicable to
such C/D Rate Loan and ending 30, 60, 90 or 180 days
thereafter, as selected by the Company by irrevocable notice
to the Administrative Agent not less than one Business Day
prior to the last day of the then current Interest Period with
respect thereto;
and (c) with respect to any Base Rate Loan, the period commencing on
the borrowing or conversion date, as the case may be, with respect to
such Base Rate Loan and ending 30 days thereafter; provided, that all
of the foregoing provisions relating to Interest Periods are subject
to the following:
(a) if any Interest Period pertaining to a
Eurodollar Loan would otherwise end on a day that is not a
Eurodollar Business Day, such Interest Period shall be
extended to the next succeeding Eurodollar Business Day unless
the result of such extension would be to carry such Interest
Period into another calendar month in which event such
Interest Period shall end on the immediately preceding
Eurodollar Business Day;
(b) if any Interest Period pertaining to a C/D Rate
Loan or Base Rate Loan would otherwise end on a day that is
not a Business Day, such Interest Period shall be extended to
the next succeeding Business Day;
(c) any Interest Period that would otherwise extend
beyond the Termination Date shall end on the Termination Date;
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<PAGE> 16
(d) any Interest Period pertaining to a Eurodollar
Loan that begins on the last Eurodollar Business Day of a
calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such
Interest Period) shall end on the last Eurodollar Business Day
of a calendar month; and
(e) the Company shall select Interest Periods so as
not to require a payment or prepayment of any Eurodollar Loan
or C/D Rate Loan during an Interest Period for such Loan.
"Investment": any advance, loan, extension of credit or
capital contribution to, or purchase of any stock, bonds, notes,
debentures, ownership interests or other securities of, or other
investment in, any Person.
"LAH": Loral Aerospace Holdings, Inc., a Delaware corporation.
"Lien": any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), or
preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever (including, without
limitation, any conditional sale or other title retention agreement,
any Financing Lease having substantially the same economic effect as
any of the foregoing.
"Loan": as defined in Section 2.1.
"Material Adverse Effect": a material adverse effect on (a)
the business, operations, property, condition (financial or otherwise)
or prospects of the Company and its Subsidiaries taken as a whole and
the ability of the Company to perform its obligations under this
Agreement or the Notes, or (b) the validity or enforceability of this
Agreement or any of the Notes or the material rights or remedies of
the Agents or the Banks hereunder or thereunder.
"Moody's": Moody's Investors Service, Inc.
"Multiemployer Plan": a Plan which is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"9-1/8% Indenture": the Indenture dated as of January 15,
1992 between the Company and Bank of America Illinois (formerly known
as Continental Bank N.A.), as trustee, pursuant to which $100,000,000
aggregate principal amount of the Company's Senior Debentures due
February 1, 2022 were issued, as the same may be amended, supplemented
or modified.
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"1992 8-3/8% Indenture": the Indenture dated as of November
1, 1992 between the Company and Nationsbank of Georgia, National
Association, as trustee, pursuant to which $100,000,000 aggregate
principal amount of the Company's Senior Debentures due January 15,
2023 were issued, as the same may be amended, modified or
supplemented.
"1994 8-3/8% Indenture": the Indenture dated as of September
1, 1993 between the Company and Bank of America Illinois (formerly
known as Continental Bank N.A.), as trustee, pursuant to which
$400,000,000 aggregate principal amount of the Company's Senior
Debentures due June 15, 2024 were issued, as the same may be amended,
modified or supplemented.
"Notes": as defined in Section 2.2.
"Original Commitment": $1,200,000,000.
"Participants": as defined in Section 9.6(b).
"PBGC": the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA.
"Person": an individual, partnership, corporation, business
trust, joint stock company, trust, unincorporated association, joint
venture, Governmental Authority or other entity of whatever nature.
"Plan": at any particular time, any employee benefit plan
which is covered by ERISA and in respect of which the Company or a
Commonly Controlled Entity is (or, if such plan were terminated at
such time, would under Section 4069 of ERISA be deemed to be) an
"employer" as defined in Section 3(5) of ERISA.
"Properties": as defined in Section 3.14.
"Purchasing Banks": as defined in Section 9.6(c).
"Rating": the senior unsecured debt rating of the Company (or
its status as unrated) from time to time in effect from S&P or
Moody's, as the case may be.
"Redeemable Stock": means any equity interest which, by its
terms (or by the terms of any security into which it is convertible or
for which it is exchangeable before the date which is 91 days after
the Termination Date), or upon the happening of any event, matures or
is mandatorily redeemable, in whole or in part, prior to the date
which is 91 days after the Termination Date, or is, by its terms or
upon the happening of any event, redeemable at the option of the
holder thereof, in whole or in part, at any time prior to the date
which is 91 days after the Termination Date.
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"Reference Banks": Chemical, Morgan and Bank of America
Illinois.
"Register": as defined in Section 9.6(d).
"Reorganization": at any particular time, the condition that
a Multiemployer Plan is in reorganization within the meaning of
Section 4241 of ERISA.
"Reportable Event": any of the events set forth in Section
4043(b) of ERISA or the regulations thereunder, other than those
events as to which the thirty day notice period is waived under
subsections .13, .14, .16, .18, .19 or .20 of PBGC Reg. Section 2615.
"Required Banks": at any date, Banks whose Commitments
aggregate at least 66-2/3% of the total Commitments or, if the
Commitments have been terminated, of the outstanding Loans.
"Requirement of Law": as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing
documents of such Person, and any law, treaty, rule or regulation or
determination of an arbitrator or a court or other Governmental
Authority, in each case applicable to or binding upon such Person or
any of its property or to which such Person or any of its property is
subject.
"Responsible Officer": the Chairman, the President or any
Senior Vice President of the Company or, with respect to financial
matters, the chief financial officer of the Company.
"Restricted Payments": as defined in Section 6.5.
"7% Indenture": the Indenture dated as of November 1, 1992
between the Company and Nationsbank of Georgia, as trustee, pursuant
to which $200,000,000 aggregate principal amount of the Company's
Senior Debentures due September 15, 2023 were issued, as the same may
be amended, supplemented or modified.
"7-5/8% Indenture": the Indenture dated as of September 1,
1993 between the Company and Bank of America Illinois (formerly known
as Continental Bank N.A.), as trustee, pursuant to which $250,000,000
aggregate principal amount of the Company's Senior Notes due June 15,
2004 were issued, as the same may be amended, supplemented or
modified.
"S&P": Standard & Poor's Ratings Group.
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"Single Employer Plan": any Plan which is covered by Title IV
of ERISA but which is not a Multiemployer Plan.
"SSL": Space Systems/Loral, Inc., a Delaware corporation.
"Stockholders Agreement": the Stockholders Agreement dated as
of November 13, 1992 by and among Loral Aerospace Corp., LAH, the
Company, Shearson Lehman Brothers Capital Partners II, L.P., Lehman
Brothers Merchant Banking Portfolio Partnership L.P., Lehman Brothers
Offshore Investment Partnership L.P. and Lehman Brothers Offshore
Investment Partnership- Japan L.P., as amended, supplemented or
otherwise modified from time to time.
"Subordinated Debt": any unsecured Indebtedness of the
Company or any of its Subsidiaries, no part of the principal of which
is required to be paid (whether by way of mandatory sinking fund,
mandatory redemption or mandatory prepayment or otherwise) prior to
the date which is 30 days after the Termination Date, and the payment
of principal of and interest on which, and the payment of any other
obligations of the Company or such Subsidiary to the holders of such
Subordinated Debt, are subordinated to the prior payment in full of
the obligations and liabilities of the Company hereunder (including,
without limitation, obligations in respect of post-petition interest).
"Subsidiary": as to any Person, a corporation, partnership or
other entity (a) of which shares of stock or other ownership interests
having ordinary voting power (other than stock or other ownership
interests having such power only by reason of the happening of a
contingency) to elect a majority of the board of directors or other
managers of such corporation, partnership or other entity are at the
time owned, or the management of which is otherwise controlled,
directly or indirectly through one or more intermediaries, or both, by
such Person and (b) which is consolidated on such Person's financial
statements; provided, that SSL and Loral General Partner, Inc., a
Delaware corporation, and their respective Subsidiaries shall be
excluded from the definition of "Subsidiary". Unless otherwise
qualified, all references to a "Subsidiary" or to "Subsidiaries" in
this Agreement shall refer to a Subsidiary or Subsidiaries of the
Company.
"Substantial Subsidiary": any Subsidiary of the Company if
the book value of such Subsidiary's assets (determined in accordance
with GAAP for the most recent fiscal quarter for which financial
statements are available) exceeds 3% of the book value of the assets
of the Company and its Subsidiaries taken as a whole (determined on a
consolidated basis in accordance with GAAP for the most
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recent fiscal quarter for which financial statements are available).
"Termination Date": November 23, 1999 or such earlier date as
the Commitments shall terminate as provided herein.
"Tranche": the collective reference to Eurodollar Loans or
C/D Rate Loans the Interest Periods with respect to all of which begin
on the same date and end on the same later date (whether or not such
Loans shall originally have been made on the same day). Tranches may
be identified as "Eurodollar Tranches" or "C/D Rate Tranches", as
applicable.
"Transfer Effective Date": as defined in each Commitment
Transfer Supplement.
"Transferees": as defined in Section 9.6(f).
"Type": as to any Loan, its nature as a Base Rate Loan, a C/D
Rate Loan or a Eurodollar Loan.
"Unused Commitment": as to any Bank, at a particular time, an
amount equal to such Bank's Commitment Percentage of the excess, if
any, of (a) the aggregate Commitments at such time over (b) the
aggregate outstanding principal amount of the Loans at such time.
"Wholly Owned Subsidiary": any Subsidiary of the Company to
the extent at least 80% of the capital stock or other ownership
interests of such Subsidiary, other than directors' or nominees'
qualifying shares, is owned directly or indirectly by the Company;
provided, that the term "Wholly Owned Subsidiary" shall include LAH.
1.2 Other Definitional Provisions.
(a) Unless otherwise specified herein, all terms defined in
this Agreement shall have the defined meanings when used in the Notes or any
certificate or other document made or delivered pursuant hereto.
(b) As used herein and in the Notes, and any certificate or
other document made or delivered pursuant hereto, accounting terms relating to
the Company and its Subsidiaries not defined in Section 1.1 and accounting
terms partly defined in Section 1.1, to the extent not defined, shall have the
respective meanings given to them under GAAP; provided, that if a change in
GAAP occurs after the date hereof which materially affects (either favorably or
adversely) the ability of the Company to comply with any covenant contained in
Section 6, the Banks and the Company agree to renegotiate in good faith the
terms of such covenant.
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(c) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and Section,
Schedule and Exhibit references are to this Agreement unless otherwise
specified.
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS
2.1 Revolving Credit Commitments. (a) Subject to the terms
and conditions hereof, each Bank severally agrees to make revolving credit
loans (the "Loans") to the Company from time to time during the Commitment
Period in an aggregate principal amount at any one time outstanding not to
exceed the lesser of (i) such Bank's Commitment and (ii) such Bank's Commitment
Percentage of the aggregate Original Commitment. During the Commitment Period
the Company may use the Commitments by borrowing, prepaying the Loans in whole
or in part, and reborrowing, all in accordance with the terms and conditions
hereof.
(b) The Loans may from time to time be (i) Eurodollar Loans,
(ii) Base Rate Loans, (iii) C/D Rate Loans or (iv) a combination thereof, as
determined by the Company and notified to the Administrative Agent in
accordance with Sections 2.3 and 2.7; provided, that no Loan shall be made as a
Eurodollar Loan or a C/D Rate Loan after the day that is one month or 30 days,
respectively, prior to the Termination Date.
2.2 Revolving Credit Notes. The Loans made by each Bank
shall be evidenced by a promissory note of the Company, substantially in the
form of Exhibit A, with appropriate insertions as to payee, date and principal
amount (a "Note"), payable to the order of such Bank and in a principal amount
equal to the lesser of (a) the amount of the initial Commitment of such Bank
and (b) the aggregate unpaid principal amount of all Loans made by such Bank.
Each Bank is hereby authorized to record the date, Type and amount of each Loan
made by such Bank, each continuation thereof, each conversion of all or a
portion thereof to another Type, the date and amount of each payment or
prepayment of principal thereof and, in the case of Eurodollar Loans and C/D
Rate Loans, the length of each Interest Period with respect thereto, on the
schedule annexed to and constituting a part of its Note, and any such
recordation shall constitute prima facie evidence of the accuracy of the
information so recorded; provided, that the failure of any Bank to make any
such recordation or any error in any such recordation shall not affect the
obligations of the Company hereunder or under such Note. Each Note shall (x)
be dated the Closing Date, (y) be stated to mature on the Termination Date and
(z) provide for the payment of interest in accordance with Section 2.9.
2.3 Procedure for Revolving Credit Borrowing. The Company
may borrow under the Commitments during the Commitment
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Period on any Eurodollar Business Day, if all or any part of the requested
Loans are to be initially Eurodollar Loans, or on any Business Day, otherwise;
provided, that the Company shall give the Administrative Agent irrevocable
notice (which notice must be received by the Administrative Agent prior to
10:00 A.M., New York City time, (a) with respect to any of the requested Loans
that are to be initially Eurodollar Loans, three Eurodollar Business Days prior
to the requested Borrowing Date, (b) with respect to any of the requested Loans
that are to be initially C/D Rate Loans, one Business Day prior to the
requested Borrowing Date, or (c) with respect to any of the requested Loans
that are to be initially Base Rate Loans, one Business Day prior to the
requested Borrowing Date; provided, that with respect to any of the requested
Loans to be made on the initial Borrowing Date as Base Rate Loans, notice for
such Loans may be given on such initial Borrowing Date), specifying (i) the
amount to be borrowed, (ii) the requested Borrowing Date, (iii) whether the
borrowing is to be of Eurodollar Loans, Base Rate Loans, C/D Rate Loans or a
combination thereof and (iv) if the borrowing is to be entirely or partly of
Eurodollar Loans or C/D Rate Loans, the respective amounts of each such Loan
and the respective lengths of the initial Interest Periods therefor. Each
borrowing under the Commitments shall be in an amount equal to $10,000,000 or a
whole multiple of $1,000,000 in excess thereof or in the remaining amount of
the Available Commitments. Upon receipt of any such notice from the Company,
the Administrative Agent shall promptly notify each Bank thereof. Each Bank
will make the amount of its pro rata share of each borrowing available to the
Administrative Agent for the account of the Company at the office of the
Administrative Agent specified in Section 9.2 prior to 11:00 A.M., New York
City time, on the Borrowing Date requested by the Company in funds immediately
available to the Administrative Agent. Such borrowing will then be made
available to the Company by the Administrative Agent's crediting the account of
the Company on the books of such office with the aggregate of the amounts made
available to the Administrative Agent by the Banks and in like funds as
received by the Administrative Agent.
2.4 Fees. (a) Commitment Fee. The Company agrees to pay to
the Administrative Agent for the account of each Bank a commitment fee for the
period from and including the Closing Date, computed at the Commitment Fee Rate
on the average daily amount of the Unused Commitment of such Bank during the
period for which payment is made, payable quarterly in arrears on the last day
of each March, June, September and December and on the Termination Date,
commencing on the first of such dates to occur after the date hereof.
(b) Other Fees. The Company agrees to pay to each Agent such
other fees as have been agreed to in writing by the Company and such Agent.
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2.5 Termination or Reduction of Commitments. The Company
shall have the right, upon not less than three Business Days' notice to the
Agent, to terminate the Commitments or, from time to time, to reduce the amount
of the Commitments; provided, that no such termination or reduction shall be
permitted if, after giving effect thereto and to any payments or prepayments of
the Loans made on the effective date thereof, the aggregate principal amount of
the Loans then outstanding would exceed the aggregate Commitments then in
effect. Any such reduction shall be in an amount equal to $10,000,000 or a
whole multiple of $1,000,000 in excess thereof and shall reduce permanently the
Commitments then in effect.
2.6 Prepayments. (a) The Company may at any time and from
time to time prepay the Loans, in whole or in part, without premium or penalty,
upon at least three Business Days' irrevocable notice to the Administrative
Agent in the case of Base Rate Loans and C/D Rate Loans and at least three
Eurodollar Business Days' irrevocable notice to the Administrative Agent in the
case of Eurodollar Loans, which notice shall specify the date and amount of
prepayment and whether the prepayment is of Eurodollar Loans, Base Rate Loans,
C/D Rate Loans or a combination thereof, and, if of a combination thereof, the
amount allocable to each. Upon receipt of any such notice the Administrative
Agent shall promptly notify each Bank thereof. If any such notice is given,
the amount specified in such notice shall be due and payable on the date
specified therein, together with accrued interest to such date on the amount
prepaid. Partial prepayments shall be in an aggregate principal amount of
$10,000,000 or a whole multiple of $1,000,000 in excess thereof. Each
prepayment of Eurodollar Loans and C/D Rate Loans shall be subject to
compliance with the provisions of Sections 2.8 and 2.16.
(b) If at any time the principal amount of Loans then
outstanding shall exceed the Commitments, the Company shall immediately prepay
or at its option cash collateralize the Loans as provided in Section 2.6(c) in
an amount equal to such excess. Amounts payable pursuant to this Section
2.6(b) shall be applied, first, to prepay any Base Rate Loans then outstanding
and second, to prepay or cash collateralize (at the Company's option) any
Eurodollar Loans or C/D Rate Loans then outstanding (provided, that any
Eurodollar Loans or C/D Rate Loans so cash collateralized shall be prepaid no
later than the last day of the respective Interest Periods therefor). Each
prepayment pursuant to this Section 2.6(b) shall be accompanied by accrued
interest on the amount prepaid and, in the case of prepayments of Eurodollar
Loans and C/D Rate Loans, any amounts payable pursuant to Section 2.16.
(c) The Company shall cash collateralize Eurodollar Loans or
C/D Rate Loans pursuant to Section 2.6(b) by depositing in an account with the
Administrative Agent (the "Cash Collateral Account"), to be established and
maintained pursuant to such
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terms and conditions as shall be specified by the Administrative Agent in its
discretion, an amount determined pursuant to the second sentence of Section
2.6(b) with respect to Eurodollar Loans or C/D Rate Loans, as the case may be.
Such deposited monies shall be held by the Administrative Agent as cash
collateral (the "Cash Collateral") for the outstanding Eurodollar Loans or C/D
Rate Loans, as the case may be, on a pro rata basis; provided, that if any Base
Rate Loans shall be made while there is Cash Collateral on deposit in the Cash
Collateral Account, the Administrative Agent shall apply such Cash Collateral
to the immediate prepayment of such Base Rate Loans and only the Cash
Collateral remaining after such prepayment, if any, shall be retained in the
Cash Collateral Account. The Cash Collateral Account and the Cash Collateral
shall be subject to the sole dominion and control of the Administrative Agent
and, except as set forth above, the Cash Collateral shall be retained in the
Cash Collateral Account until the repayment of Eurodollar Loans or C/D Rate
Loans, as the case may be, in an amount equal to the amount of the Cash
Collateral deposited therein. Upon any such repayment, an amount equal to the
amount of such repayment shall be transferred from the Cash Collateral Account
to the Company. The Administrative Agent shall invest the Cash Collateral in
Cash Equivalents, and shall pay over to the Company any interest earned on such
investments quarterly on the last day of each March, June, September and
December; provided, that no Default or Event of Default shall have occurred and
be continuing (in which case such interest shall be retained as Cash
Collateral). The Administrative Agent shall not be liable for any losses or
decreases in value with respect to the Cash Collateral, other than those
occurring as a result of its gross negligence or willful misconduct.
2.7 Conversion and Continuation Options. (a) The Company
may elect from time to time to convert Eurodollar Loans or C/D Rate Loans to
Base Rate Loans, and/or to convert Eurodollar Loans or Base Rate Loans to C/D
Rate Loans, by giving the Administrative Agent at least two Business Days'
prior irrevocable notice of such election; provided, that any such conversion
of Eurodollar Loans or C/D Rate Loans may only be made on the last day of an
Interest Period with respect thereto. The Company may elect from time to time
to convert Base Rate Loans or C/D Rate Loans to Eurodollar Loans by giving the
Agent at least three Eurodollar Business Days' prior irrevocable notice of such
election; provided, that any such conversion of C/D Rate Loans may, subject to
the third succeeding sentence, only be made on the last day of an Interest
Period with respect thereto. Any such notice of conversion to Eurodollar Loans
or C/D Rate Loans shall specify the length of the initial Interest Period or
Interest Periods therefor. Upon receipt of any such notice the Agent shall
promptly notify each Bank thereof. If the last day of the then current
Interest Period with respect to C/D Rate Loans that are to be converted to
Eurodollar Loans is not a Eurodollar Business Day, such conversion shall be
made on the next succeeding Eurodollar Business Day, and during the period
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from such last day to such succeeding Eurodollar Business Day such Loans shall
bear interest as if they were Base Rate Loans. All or any part of outstanding
Eurodollar Loans, Base Rate Loans and C/D Rate Loans may be converted as
provided herein; provided, that (i) no Loan may be converted into a Eurodollar
Loan or a C/D Rate Loan when any Event of Default (upon notice from the
Administration Agent, on behalf of the Required Banks, except such notice shall
not be required in the case of the Event of Default described in Section 7(f))
has occurred and is continuing, (ii) any such conversion may only be made if,
after giving effect thereto, Section 2.8 shall not have been contravened and
(iii) no Loan may be converted into a Eurodollar Loan or a C/D Rate Loan after
the date that is one month or 30 days, respectively, prior to the Termination
Date.
(b) Any Eurodollar Loan or C/D Rate Loan may be continued as
such upon the expiration of the then current Interest Period with respect
thereto by the Company giving notice to the Administrative Agent, in accordance
with the applicable provisions of the term "Interest Period" set forth in
Section 1.1, of the length of the next Interest Period to be applicable to such
Loans; provided, that no Eurodollar Loan or C/D Rate Loan may be continued as
such (i) when any Event of Default (upon notice from the Administration Agent,
on behalf of the Required Banks, except such notice shall not be required in
the case of the Event of Default described in Section 7(f)) has occurred and is
continuing, (ii) if, after giving effect thereto, Section 2.8 would be
contravened or (iii) after the date that is one month or 30 days, respectively,
prior to the Termination Date; provided further, that if the Company shall fail
to give any required notice as described above in this paragraph or if such
continuation is not permitted pursuant to the preceding proviso such Loans
shall be automatically converted to Base Rate Loans on the last day of such
then expiring Interest Period.
2.8 Minimum Amounts of Tranches. All borrowings, conversions
and continuations of Loans hereunder and all selections of Interest Periods
hereunder shall be in such amounts and be made pursuant to such elections so
that, after giving effect thereto, the aggregate principal amount of the Loans
comprising (a) each Eurodollar Tranche shall be equal to $15,000,000 or a whole
multiple of $1,000,000 in excess thereof, (b) each C/D Rate Tranche shall be
equal to $15,000,000 or a whole multiple of $1,000,000 in excess thereof and
(c) there shall be no more than 12 different Tranches outstanding at any one
time.
2.9 Interest Rates and Payment Dates. (a) Each Eurodollar
Loan shall bear interest for each day during each Interest Period with respect
thereto at a rate per annum equal to the Eurodollar Rate determined for such
Interest Period plus the Applicable Margin.
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(b) Each Base Rate Loan shall bear interest at a rate per
annum equal to the Base Rate plus the Applicable Margin.
(c) Each C/D Rate Loan shall bear interest for each day
during each Interest Period with respect thereto at a rate per annum equal to
the C/D Rate determined for such day plus the Applicable Margin.
(d) If all or a portion of (i) the principal amount of any
Loan, (ii) any interest payable thereon or (iii) any fee or other amount
payable pursuant to this Agreement shall not be paid when due (whether at the
stated maturity, by acceleration or otherwise), such overdue amount shall bear
interest at a rate per annum which is (x) in the case of overdue principal, the
rate that would otherwise be applicable thereto pursuant to the foregoing
provisions of this Section 2.9 plus 2%, (y) in the case of overdue interest (to
the extent permitted by applicable law) or fees, the rate described in
paragraph (b) of this Section 2.9 plus 2% or (z) in the case of other amounts
payable pursuant to this Agreement, the then applicable Base Rate, in each case
from the date of such non-payment until such amount is paid in full (as well
after as before judgment).
(e) Interest shall be payable in arrears on each Interest
Payment Date; provided, that interest accruing pursuant to paragraph (d) of
this Section 2.9 shall be payable on demand, or, in the absence of demand,
weekly on Friday of each week.
2.10 Computation of Interest and Fees. (a) Interest on Loans
and fees shall be calculated on the basis of a 360- day year for the actual
days elapsed; provided, that interest on Base Rate Loans computed with
reference to the Administrative Agent's reference rate shall be calculated on
the basis of a 365- (or 366-, as the case may be) day year for the actual days
elapsed. The Administrative Agent shall as soon as practicable notify in
writing the Company and the Banks of each determination of a Eurodollar Rate or
of a C/D Rate. Any change in the interest rate on a Loan resulting from a
change in the Ratings, the Base Rate, the C/D Assessment Rate or the C/D
Reserve Percentage and any change in the commitment fee pursuant to Section
2.4(a) resulting from a change in the Commitment Fee Rate shall become
effective as of the opening of business on the day on which such change becomes
effective. The Administrative Agent shall as soon as practicable notify in
writing the Company and the Banks of the effective date and the amount of each
such change in interest rate.
(b) Each determination of an interest rate by the
Administrative Agent pursuant to any provision of this Agreement shall be
conclusive and binding on the Company and the Banks in the absence of manifest
error. The Administrative Agent shall, at the request of the Company or a
Bank, deliver to the Company or such Bank, as the case may be, a statement
showing the
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quotations used by the Administrative Agent in determining any interest rate
pursuant to Section 2.9(a) or (c).
(c) If any Reference Bank's Commitment shall terminate or all
its Loans shall be assigned for any reason whatsoever or such Reference Bank
shall fail on two consecutive times to furnish quotations of the rate to the
Administrative Agent pursuant to Section 2.10(d), such Reference Bank shall
thereupon cease to be a Reference Bank, and if, as a result of the foregoing,
there shall only be one Reference Bank remaining, the Administrative Agent
(after consultation with the Company and the Banks) shall, by notice to the
Company and the Banks, designate another Bank as a Reference Bank so that there
shall at all times be at least two Reference Banks.
(d) Each Reference Bank shall use its best efforts to furnish
quotations of rates to the Administrative Agent as contemplated hereby. If any
of the Reference Banks shall be unable or shall otherwise fail to supply such
rates to the Administrative Agent upon its request, the rate of interest shall,
subject to the provisions of Section 2.11, be determined on the basis of the
quotations of the remaining Reference Banks or Reference Bank.
2.11 Inability to Determine Interest Rate. In the event that
prior to the first day of any Interest Period:
(a) the Administrative Agent shall have determined (which
determination shall be conclusive and binding upon the Company) that,
by reason of circumstances affecting the relevant market, adequate and
reasonable means do not exist for ascertaining the Eurodollar Rate or
the C/D Rate for such Interest Period, or
(b) the Administrative Agent shall have received notice from
the Required Banks that the Eurodollar Rate or the C/D Rate determined
or to be determined for such Interest Period will not adequately and
fairly reflect the cost to such Banks (as conclusively certified in
writing by such Banks) of making or maintaining their affected Loans
during such Interest Period,
the Administrative Agent shall give telecopy or telephonic notice (confirmed in
writing) thereof to the Company and the Banks as soon as practicable
thereafter. If such notice is given (x) any Eurodollar Loans or C/D Rate
Loans, as the case may be, requested to be made on the first day of such
Interest Period shall be made as Base Rate Loans, (y) any Loans that were to
have been converted on the first day of such Interest Period to Eurodollar
Loans or C/D Rate Loans, as the case may be, shall be converted to or continued
as Base Rate Loans and (z) any outstanding Eurodollar Loans or C/D Rate Loans,
as the case may be, shall be converted, on the first day of such Interest
Period, to Base Rate Loans. The Administrative Agent shall promptly notify the
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Company at such time as the conditions set forth in (a) and (b) above are no
longer in effect, and until such notice has been delivered by the
Administrative Agent, no further Eurodollar Loans or C/D Rate Loans shall be
made or continued as such, nor shall the Company have the right to convert
Loans to Eurodollar Loans or C/D Rate Loans, as the case may be.
2.12 Pro Rata Treatment and Payments. (a) Each borrowing by
the Company from the Banks of Loans, each payment by the Company on account of
any commitment fee or upfront fee hereunder and any reduction of the
Commitments of the Banks shall be made pro rata according to the respective
Commitment Percentages of the Banks. Each payment (including each prepayment)
by the Company on account of principal of and interest on the Loans shall be
made pro rata according to the respective outstanding principal amounts of the
Loans then held by the Banks. All payments (including prepayments) to be made
by the Company hereunder and under the Notes, whether on account of principal,
interest, fees or otherwise, shall be made without set-off or counterclaim and
shall be made prior to 12:00 Noon, New York City time, on the due date thereof
to the Administrative Agent, for the account of the Banks, at the
Administrative Agent's office specified in Section 9.2, in Dollars and in
immediately available funds. The Administrative Agent shall distribute such
payments to the Banks promptly upon receipt in like funds as received. If any
payment hereunder (other than payments on the Eurodollar Loans) becomes due and
payable on a day other than a Business Day, such payment shall be extended to
the next succeeding Business Day, and, with respect to payments of principal,
interest thereon shall be payable at the then applicable rate during such
extension. If any payment on a Eurodollar Loan becomes due and payable on a
day other than a Eurodollar Business Day, the maturity thereof shall be
extended to the next succeeding Eurodollar Business Day unless the result of
such extension would be to extend such payment into another calendar month, in
which event such payment shall be made on the immediately preceding Eurodollar
Business Day.
(b) Unless the Administrative Agent shall have been notified
in writing by any Bank prior to a Borrowing Date that such Bank will not make
the amount that would constitute its portion of the borrowing to be made on
such date available to the Administrative Agent, the Administrative Agent may
assume that such Bank has made such amount available to the Administrative
Agent on such Borrowing Date, and the Administrative Agent may, in reliance
upon such assumption, make available to the Company a corresponding amount. If
such amount is made available to the Administrative Agent on a date after such
Borrowing Date, such Bank shall pay to the Administrative Agent on demand an
amount equal to the product of (i) the daily average Federal funds rate during
such period as quoted by the Administrative Agent, times (ii) the amount of
such Bank's portion of such borrowing, times (iii) a fraction the numerator of
which is the number of days that elapse from and including such Borrowing Date
to the date on
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which such Bank's portion of such borrowing shall have become immediately
available to the Administrative Agent and the denominator of which is 360. A
certificate of the Administrative Agent submitted to any Bank with respect to
any amounts owing under this Section 2.12(b) shall be conclusive in the absence
of manifest error. If such Bank's portion of such borrowing is not in fact
made available to the Administrative Agent by such Bank within three Business
Days of such Borrowing Date, the Administrative Agent shall be entitled to
recover such amount with interest thereon at the rate per annum applicable to
Base Rate Loans hereunder, on demand, from the Company. If the Company returns
to the Administrative Agent any amount with interest thereon as described in
the immediately preceding sentence, such Bank shall indemnify the Company for
the difference, if any, between (i) the aggregate interest paid by the Company
to the Administrative Agent in accordance with the immediately preceding
sentence less (ii) the aggregate interest which actually accrued on such amount
prior to its return to the Administrative Agent.
2.13 Illegality. Notwithstanding any other provision herein,
if any change in any Requirement of Law or in the interpretation or application
thereof shall make it unlawful for any Bank to make or maintain Eurodollar
Loans as contemplated by this Agreement, (a) the commitment of such Bank
hereunder to make Eurodollar Loans, continue Eurodollar Loans as such and
convert Domestic Dollar Loans to Eurodollar Loans shall forthwith be cancelled
and (b) such Bank's Loans then outstanding as Eurodollar Loans, if any, shall
be converted automatically to Base Rate Loans on the respective last days of
the then current Interest Periods with respect to such Loans or within such
earlier period as required by law. If any such conversion of a Eurodollar Loan
occurs on a day which is not the last day of the then current Interest Period
with respect thereto, the Company shall pay to such Bank such amounts, if any,
as may be required pursuant to Section 2.16.
2.14 Other Costs; Increased Costs. (a) The Company agrees
to pay to each Bank which requests compensation under this Section 2.14(a) (by
written notice to the Company), on the last day of each Interest Period with
respect to any Eurodollar Loan made by such Bank, so long as such Bank shall be
required to maintain reserves against "Eurocurrency liabilities" under
Regulation D of the Board of Governors of the Federal Reserve System (or, so
long as such Bank may be required by such Board of Governors or by any other
Governmental Authority to maintain reserves against any category of liabilities
which includes deposits by reference to which the interest rate on Eurodollar
Loans is determined as provided in this Agreement or against any category of
extensions of credit or other assets of such Bank which includes any Eurodollar
Loans), an additional amount (determined by such Bank and notified to the
Company) representing such Bank's calculation or, if an accurate calculation is
impracticable, reasonable estimate (using such
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reasonable means of allocation as such Bank shall determine) of the actual
costs, if any, incurred by such Bank while such Eurodollar Loans were
outstanding as a result of the applicability of the foregoing reserves to such
Eurodollar Loans, which amount in any event shall not exceed the product of the
following for each day while such Eurodollar Loans were outstanding:
(i) the principal amount of the relevant Eurodollar Loans
made by such Bank outstanding on such day; and
(ii) the difference between (x) a fraction the numerator
of which is the Eurodollar Rate (expressed as a decimal) applicable to
such Eurodollar Loans, and the denominator of which is one minus the
maximum rate (expressed as a decimal) at which such reserve
requirements are imposed by such Board of Governors or other
Governmental Authority on such date minus (y) such numerator; and
(iii) a fraction the numerator of which is one and the
denominator of which is 360.
(b) In the event that any change in any Requirement of Law or
in the interpretation or application thereof or compliance by any Bank with any
request or directive (whether or not having the force of law) from any central
bank or other Governmental Authority made subsequent to the date hereof:
(i) shall subject any Bank to any tax of any kind whatsoever
with respect to this Agreement, any Note or any Eurodollar Loan or C/D
Rate Loan made by it, or change the basis of taxation of payments to
such Bank in respect thereof (except for taxes covered by Section 2.15
and changes in the rate of tax on the overall net income of such
Bank);
(ii) shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement against assets
held by, deposits or other liabilities in or for the account of,
advances, loans or other extensions of credit by, or any other
acquisition of funds by, any office of such Bank which is not
otherwise described in Section 2.14(a) or otherwise included in the
determination of the C/D Rate; or
(iii) shall impose on such Bank any other condition;
and the result of any of the foregoing is to increase the cost to such Bank, by
an amount which such Bank deems to be material, of making, converting into,
continuing or maintaining Eurodollar Loans or C/D Rate Loans or to reduce any
amount receivable hereunder in respect thereof, then, in any such case, the
Company shall pay such Bank within 15 Business Days following demand therefor
any additional amounts necessary to compensate such Bank
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for such increased cost or reduced amount receivable. If any Bank becomes
entitled to claim any additional amounts pursuant to this Section 2.14(b), it
shall promptly notify the Company, through the Administrative Agent, of the
event by reason of which it has become so entitled.
(c) In the event that any Bank shall have determined that any
change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Bank or any
corporation controlling such Bank with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority made subsequent to the date hereof does or shall have the effect of
reducing the rate of return on such Bank's or such corporation's capital as a
consequence of its obligations hereunder to a level below that which such Bank
or such corporation could have achieved but for such change or compliance
(taking into consideration such Bank's or such corporation's policies with
respect to capital adequacy) by an amount deemed by such Bank to be material,
then from time to time, after submission by such Bank to the Company (with a
copy to the Administrative Agent) of a written request therefor, the Company
shall pay to such Bank within 15 Business Days following demand therefor such
additional amount or amounts as will compensate such Bank for such reduction.
(d) A certificate as to any additional amounts payable
pursuant to this Section 2.14 submitted by the relevant Bank, through the
Administrative Agent, to the Company shall be conclusive in the absence of
manifest error. The covenants contained in this Section 2.14 shall survive the
termination of this Agreement and the payment of the Notes and all other
amounts payable hereunder. Any notice to be given by a Bank under this Section
2.14 after termination of this Agreement shall be effective only if given
within 120 days after such Bank becomes aware or should have become aware of
the events giving rise to such notice.
2.15 Taxes. (a) All payments made by the Company under this
Agreement and the Notes shall be made free and clear of, and without deduction
or withholding for or on account of, any present or future income, stamp or
other taxes, levies, imposts, duties, charges, fees, deductions or withholdings
imposed, levied, collected, withheld or assessed by any Governmental Authority,
excluding, in the case of each Agent and each Bank, (i) net income taxes,
franchise and branch profit taxes (imposed in lieu of net income taxes) imposed
on such Agent or such Bank, as the case may be, as a result of a present or
former connection between the jurisdiction of the government or taxing
authority imposing such tax and such Agent or such Bank (excluding a connection
arising solely from such Agent or such Bank having executed, delivered or
performed its obligations or received a payment under, or enforced, this
Agreement or the Notes) or any political subdivision or taxing authority
thereof
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or therein and (ii) any taxes, levies, imposts, duties, charges, fees,
deductions or withholdings arising after the Closing Date, solely as a result
of or attributable to such Agent or Bank (x) changing its designated lending
office as of the Closing Date to a lending office located in any other
jurisdiction or (y) designating an additional lending office located in any
other jurisdiction (all such non-excluded taxes, levies, imposts, duties,
charges, fees, deductions and withholdings being hereinafter called "Taxes").
If any Taxes are required to be withheld from any amounts payable to any Agent
or any Bank hereunder or under the Notes, the amounts so payable to such Agent
or such Bank shall be increased to the extent necessary to yield to such Agent
or such Bank (after payment of all Taxes) interest or any such other amounts
payable hereunder at the rates or in the amounts specified in this Agreement
and the Notes. Whenever any Taxes are payable by the Company, as promptly as
possible thereafter the Company shall send to the Administrative Agent for its
own account or for the account of such Agent or Bank, as the case may be, a
copy of any original official receipt that may be received by the Company
showing payment thereof. If the Company fails to pay any Taxes when due to the
appropriate taxing authority or fails to remit to the Administrative Agent the
receipts that may be received or other available documentary evidence, the
Company shall indemnify the Agents and the Banks for any incremental taxes,
interest or penalties that may become payable by any Agent or any Bank to the
United States or other Governmental Authority as a result of any such failure.
The agreements in this Section 2.15(a) shall survive the termination of this
Agreement and the payment of the Notes and all other amounts payable hereunder.
If any Taxes constituting a withholding tax of the United States of America or
any other Governmental Authority shall be or become applicable, after the
Closing Date, to such payments by the Company to an Agent or Bank, such Agent
or Bank shall use its best efforts to make, fund and maintain its Loans through
another lending office of such Agent or Bank in another jurisdiction so as to
reduce, to the fullest extent possible, the Company's liability hereunder, if
the making, funding or maintenance of such Loans through such other office does
not otherwise materially adversely affect such Loans or such Agent or Bank.
(b) Prior to the first Interest Payment Date, each Bank that
is not incorporated under the laws of the United States of America or a state
thereof agrees that it will deliver to the Company and the Administrative Agent
(i) two duly completed copies of United States Internal Revenue Service Form
1001 or 4224 or successor applicable form, as the case may be, and (ii) an
Internal Revenue Service Form W-8 or W-9 or successor applicable form. Each
such Bank also agrees to deliver to the Company and the Administrative Agent
two further copies of the said Form 1001 or 4224 and Form W-8 or W-9, or
successor applicable forms or other manner of certification, as the case may
be, on or before the date that any such form expires or becomes obsolete or
after the occurrence of any event requiring a
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change in the most recent form previously delivered by it to the Company, and
such extensions or renewals thereof as may reasonably be requested by the
Company or the Administrative Agent, unless in any such case an event
(including, without limitation, any change in treaty, law or regulation) has
occurred prior to the date on which any such delivery would otherwise be
required which renders all such forms inapplicable or which would prevent such
Bank from duly completing and delivering any such form with respect to it and
such Bank so advises the Company and the Administrative Agent. Such Bank shall
certify (i) in the case of a Form 1001 or 4224, that it is entitled to receive
payments under this Agreement without deduction or withholding of any United
States federal income taxes and (ii) in the case of a Form W-8 or W-9, that it
is entitled to an exemption from United States backup withholding tax. The
Company shall not be required to pay any increased amount on account of Taxes
pursuant to this Section 2.15 to an Agent or Bank that fails to furnish any
form or statement that it is required to furnish in accordance with this
Section 2.15(b) and, to the extent required by law, the Company shall be
entitled to deduct Taxes from the payments owed to such Bank or Agent. In the
event that the Company is required to pay any Bank any additional amount or
indemnify any Bank pursuant to Section 2.15(a) and no change in lending office
is made in accordance with the last sentence of Section 2.15(a), after the
Company makes such payment, such Bank shall transfer, in accordance with the
procedures set forth in Section 9.6(c), its Loans and Commitment to a Bank
selected by the Company with the approval of such transferor Bank and the
Administrative Agent (not to be unreasonably withheld).
2.16 Indemnity. The Company agrees to indemnify each Bank
and to hold each Bank harmless from any loss or expense which such Bank may
sustain or incur as a consequence of (a) default by the Company in payment when
due of the principal amount of or interest on any Eurodollar Loan or C/D Rate
Loan, (b) default by the Company in making a borrowing of, conversion into or
continuation of Eurodollar Loans or C/D Rate Loans after the Company has given
a notice requesting the same in accordance with the provisions of this
Agreement, (c) default by the Company in making any prepayment after the
Company has given a notice thereof in accordance with the provisions of this
Agreement, (d) the making of a voluntary or involuntary prepayment of
Eurodollar Loans or C/D Rate Loans on a day which is not the last day of an
Interest Period with respect thereto or (e) the conversion of Eurodollar Loans
to Domestic Dollar Loans pursuant to Section 2.11 or 2.13 on a day which is not
the last day of the Interest Period with respect thereto, including, without
limitation, in each case, any such loss or expense arising from the
reemployment of funds obtained by it or from fees payable to terminate the
deposits from which such funds were obtained. A certificate setting forth the
computation of any amount payable pursuant to the foregoing sentence submitted
by a Bank, through the Administrative Agent, to the Company shall be conclusive
in the absence of manifest error. This covenant shall survive the
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termination of this Agreement and the payment of the Notes and all other
amounts payable hereunder.
2.17 Purpose. The proceeds of the Loans shall be used by the
Company solely for general corporate purposes, including acquisitions and to
back up or fund the repayment of commercial paper.
SECTION 3. REPRESENTATIONS AND WARRANTIES
In order to induce the Banks to enter into this Agreement and
to make the Loans herein provided for, the Company hereby represents and
warrants to each Agent and to each Bank that:
3.1 Financial Condition. (a) The consolidated balance sheet
of the Company and its Subsidiaries as at March 31, 1994 and the related
consolidated statements of income and retained earnings and of cash flows for
the fiscal year ended on such date, reported on by Coopers & Lybrand and (b)
the unaudited consolidated balance sheets of the Company and its Subsidiaries
as at September 30, 1994 and the related unaudited consolidated statements of
income and retained earnings and of cash flows for the fiscal quarter ended on
such date, copies of which have heretofore been furnished to each Bank, are
complete and correct in all material respects and present fairly (except, with
respect to interim reports, for normal year-end adjustments) the consolidated
financial condition of the Company and its Subsidiaries as at such date, and
the consolidated results of their operations and cash flows for the fiscal
period then ended. All such financial statements, including the related
schedules and notes thereto, have been prepared in accordance with GAAP applied
consistently throughout the periods involved (except as approved by such
accountants and as disclosed therein). Such audited financial statements,
taken together, disclose, in accordance with GAAP, all material contingent
liabilities and liability for taxes, long-term leases and unusual forward or
long-term commitments of the Company and its Subsidiaries.
3.2 No Change. Since March 31, 1994 (a) there has been no
change in the business, operations, property or financial or other condition of
the Company or any of its Subsidiaries which has or could reasonably be
expected to have a Material Adverse Effect and (b) no dividends or other
distributions have been declared, paid or made upon any shares of capital stock
of the Company nor have any shares of capital stock of the Company been
redeemed, retired, purchased or otherwise acquired for value by the Company or
any of the Subsidiaries except as permitted by Section 6.5.
3.3 Corporate Existence; Compliance with Law. Each of the
Company and the Subsidiaries (a) is duly organized, validly existing and in
good standing under the laws of the jurisdiction
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of its incorporation or organization, (b) has the corporate power and authority
and the legal right to own and operate its property, to lease the property it
operates as lessee and to conduct the business in which it is currently
engaged, (c) is duly qualified as a foreign corporation and in good standing
under the laws of each jurisdiction where its ownership, lease or operation of
property or the conduct of its business requires such qualification, except to
the extent that the failure to be so qualified could not, in the aggregate,
reasonably be expected to have a Material Adverse Effect, and (d) is in
compliance with all Requirements of Law except to the extent that the failure
to comply therewith could not, in the aggregate, reasonably be expected to have
a Material Adverse Effect.
3.4 Corporate Power; Authorization; Enforceable Obligations.
The Company has the corporate power and authority and the legal right to make,
deliver and perform this Agreement and the Notes and to borrow hereunder and
has taken all necessary corporate action to authorize the borrowings on the
terms and conditions of this Agreement and the Notes and to authorize the
execution, delivery and performance of this Agreement and the Notes. No
consent or authorization of, filing with or other act by or in respect of any
Governmental Authority is required in connection with the borrowings hereunder
or with the execution, delivery, performance, validity or enforceability of
this Agreement and the Notes, other than those which have been obtained or made
and are in full force and effect. This Agreement has been, and each Note will
be, duly executed and delivered on behalf of the Company. This Agreement
constitutes, and each Note when executed and delivered will constitute, a
legal, valid and binding obligation of the Company enforceable against the
Company in accordance with its terms, except as enforceability may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting the enforcement of creditors' rights generally and by general
equitable principles (whether enforcement is sought by proceedings in equity or
at law).
3.5 No Legal Bar. The execution, delivery and performance of
this Agreement and the Notes by the Company, the borrowings hereunder and the
use of the proceeds thereof, will not violate any Requirement of Law or any
Contractual Obligation applicable to the Company or of any of the Subsidiaries,
and will not result in, or require, the creation or imposition of any Lien on
any of its or their respective properties or revenues pursuant to any
Requirement of Law or Contractual Obligation.
3.6 No Material Litigation. No litigation, investigation or
proceeding of or before any arbitrator or Governmental Authority is pending or,
to the knowledge of the Company, threatened by or against the Company or any of
the Subsidiaries or against any of its or their respective properties or
revenues (a) with respect to this Agreement and the Notes or any of the
transactions contemplated hereby, or (b) which could
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reasonably be expected to have a Material Adverse Effect, excluding litigation
described in the Company's Form 10-K for the fiscal year ended March 31, 1994
filed with the Securities and Exchange Commission (but not excluding
developments with respect thereto occurring after March 31, 1994 not described
in such Form 10-K).
3.7 No Default. Neither the Company nor any of the
Subsidiaries is in default under or with respect to any Contractual Obligation
in any respect which could reasonably be expected to have a Material Adverse
Effect. No Default or Event of Default has occurred and is continuing.
3.8 Ownership of Property; Liens. Each of the Company and
the Subsidiaries has good record and marketable title in fee simple to or valid
leasehold interests in all its real property, and good title to all its other
property, and none of such property is subject to any Lien, except as permitted
in Section 6.3 and except where the failure to have such title could not, in
the aggregate, reasonably be expected to have a Material Adverse Effect.
3.9 Taxes. Each of the Company and the Subsidiaries has
filed or caused to be filed all tax returns which to the knowledge of the
Company are required to be filed and has paid all taxes shown to be due and
payable on said returns or on any assessments made against it or any of its
property and all other taxes, fees or other charges imposed on it or any of its
property by any Governmental Authority (other than those the amount or validity
of which is currently being contested in good faith by appropriate proceedings
and with respect to which reserves in conformity with GAAP have been provided
on the books of the Company or the Subsidiaries, as the case may be, and other
than those the non-payment of which could not, in the aggregate, reasonably be
expected to have a Material Adverse Effect); and no federal income tax liens
have been filed and, to the knowledge of the Company, no claims are being
asserted with respect to any such taxes, fees or other charges, except any such
claims which could not reasonably be expected to have a Material Adverse
Effect.
3.10 Federal Regulations. No part of the proceeds of any
Loans hereunder will be used for the purpose of "purchasing" or "carrying" any
"margin stock" within the respective meanings of each of the quoted terms under
Regulation U of the Board of Governors of the Federal Reserve System as now and
from time to time hereafter in effect or for any purpose which violates the
provisions of the Regulations of such Board of Governors. If requested by any
Bank or the Administrative Agent, the Company will furnish to the
Administrative Agent and each Bank a statement to the foregoing effect in
conformity with the requirements of Federal Reserve Form U-1 referred to in
said Regulation U.
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3.11 ERISA. Neither a Reportable Event nor an "accumulated
funding deficiency" (within the meaning of Section 412 of the Code or Section
302 of ERISA) has occurred during the five-year period prior to the date on
which this representation is made or deemed made with respect to any Plan which
has resulted or could reasonably be expected to result in a liability to the
Company or any Substantial Subsidiary in excess of $2,000,000, and each Plan
has complied in all material respects with the applicable provisions of ERISA
and the Code. No termination of a Single Employer Plan has occurred, and no
Lien in favor of the PBGC or a Plan has arisen, during such five-year period.
The present value of all accrued benefits under each Single Employer Plan
(based on those assumptions used to fund such Plans) did not, as of the last
annual valuation date prior to the date on which this representation is made or
deemed made, exceed, by more than $35,000,000, the value of the assets of such
Plan allocable to such accrued benefits; provided, however, that with respect
to the defined benefit pension plan established by Federal Systems, such amount
shall be $50,000,000 rather than $35,000,000. Neither the Company nor any
Commonly Controlled Entity has had a complete or partial withdrawal from any
Multiemployer Plan, and neither the Company nor any Commonly Controlled Entity
would become subject to any liability under ERISA if the Company or any such
Commonly Controlled Entity were to withdraw completely from all Multiemployer
Plans as of the valuation date most closely preceding the date on which this
representation is made or deemed made, where such liability could, in the
aggregate, reasonably be expected to have a Material Adverse Effect. No such
Multiemployer Plan is in Reorganization or Insolvent.
3.12 Investment Company Act; Other Regulations. The Company
is not an "investment company", or a company "controlled" by an "investment
company", within the meaning of the Investment Company Act of 1940, as amended.
The Company is not subject to regulation under any Federal or State statute or
regulation which limits its ability to incur Indebtedness.
3.13 Subsidiaries. The Subsidiaries listed in the Company's
annual report on Form 10-K for its fiscal year ended March 31, 1994 constitute
all of the Subsidiaries of the Company on the Effective Date.
3.14 Environmental Matters. Each of the representations and
warranties set forth in paragraphs (a) through (e) of this Section 3.14 is true
and correct with respect to each parcel of real property owned or operated by
the Company or any Subsidiary (the "Properties"), except to the extent that (i)
the facts and circumstances giving rise to any such failure to be so true and
correct could not reasonably be expected to have a Material Adverse Effect or
(ii) the Company and the Subsidiaries are fully indemnified against any
liabilities which may result from any such failure to be so true and correct:
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(a) The Properties do not contain, and have not
previously contained, in, on, or under, including, without limitation,
the soil and groundwater thereunder, any Hazardous Materials in
concentrations which violate Environmental Laws.
(b) The Properties and all operations and facilities at
the Properties are in compliance with all Environmental Laws, and
there is no Hazardous Materials contamination or violation of any
Environmental Law which could interfere with the continued operation
of any of the Properties or impair the fair saleable value of any
thereof.
(c) Neither the Company nor any of the Subsidiaries has
received any written complaint, notice of violation, alleged
violation, investigation or advisory action or of potential liability
or of potential responsibility regarding environmental protection
matters or permit compliance with regard to the Properties, nor is the
Company aware that any Governmental Authority is threatening to
deliver to the Company or any of the Subsidiaries any such notice.
(d) Hazardous Materials have not been generated, treated,
stored, disposed of, at, on or under any of the Properties, nor have
any Hazardous Materials been transferred from the Properties to any
other location in violation of any Environmental Law.
(e) There are no governmental, administrative actions or
judicial proceedings pending or (to the knowledge of the Company)
contemplated under any Environmental Laws to which the Company or any
of the Subsidiaries is or (to the knowledge of the Company) will be
named as a party with respect to the Properties, nor are there any
consent decrees or other decrees, consent orders, administrative
orders or other orders, or other administrative or judicial
requirements outstanding under any Environmental Law with respect to
any of the Properties.
3.15 Full Disclosure. All information heretofore furnished
by the Company to any Agent or any Bank for purposes of or in connection with
this Agreement or any transaction contemplated hereby is, and all such
information hereafter furnished by the Company to any Agent or any Bank will
be, true and accurate in all material respects on the date as of which such
information is stated or certified. The Company has disclosed to the Banks in
writing any and all facts which could reasonably be expected to have a Material
Adverse Effect.
SECTION 4 CONDITIONS PRECEDENT
4.1 Conditions of Initial Loans. The obligation of each Bank
to make its initial Loan hereunder and the
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<PAGE> 39
effectiveness of this Agreement are subject to the satisfaction of the following
conditions precedent:
(a) Agreement and Notes. The Documentation Agent shall have
received (i) counterparts of this Agreement duly executed and
delivered by the Company, each Agent and each Bank and (ii) for the
account of each Bank a Note conforming to the requirements hereof and
executed by a duly authorized officer of the Company.
(b) Legal Opinions. The Documentation Agent shall have
received, with a photocopy counterpart for each Bank, (i) an opinion
of Willkie Farr & Gallagher, counsel to the Company, dated the Closing
Date and addressed to the Agents and the Banks, substantially in the
form of Exhibit B-1, (ii) an opinion of Eric J. Zahler, Esq., General
Counsel of the Company, dated the Closing Date and addressed to the
Agents and the Banks, substantially in the form of Exhibit B-2, and
given on the express instructions of the Company and (iii) an opinion
of Simpson Thacher & Bartlett, counsel to the Agents and the Banks,
dated the Closing Date and addressed to the Agents and the Banks, in
form and substance satisfactory to the Agents.
(c) Closing Certificate. The Documentation Agent shall have
received, with a photocopy counterpart for each Bank, a Closing
Certificate of the Company, dated the Closing Date, substantially in
the form of Exhibit C, with appropriate insertions and attachments,
satisfactory in form and substance to the Documentation Agent and its
counsel, executed by the President or any Vice President and the
Secretary or any Assistant Secretary of the Company.
(d) No Proceeding or Litigation; No Injunctive Relief. No
action, suit or proceeding before any arbitrator or any Governmental
Authority shall have been commenced, no investigation by any
Governmental Authority shall have been commenced, no action, suit,
proceeding or investigation by any Governmental Authority shall have
been threatened and no Requirement of Law shall have been enacted or
proposed, in each case as of the Closing Date (i) seeking to restrain,
prevent or change the transactions contemplated by this Agreement in
whole or in part or questioning the validity or legality of the
transactions contemplated by this Agreement or seeking damages in
connection with such transactions or (ii) which could reasonably be
expected to have a Material Adverse Effect.
(e) Consents, Licenses, Approvals, etc. The Documentation
Agent shall have received true copies (certified to be such by the
President or any Vice President of the Company or other appropriate
party) of all consents, licenses and approvals required as of the
Closing Date in accordance with applicable law in connection with the
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<PAGE> 40
execution, delivery, performance, validity and enforceability of this
Agreement and the Notes, if the failure to obtain such consents,
licenses or approvals, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect.
(f) Audited Financial Statements. The Documentation Agent
shall have received, with a copy for each Bank, the audited financial
statements described in Section 3.1(a), which financial statements
shall be in form and substance satisfactory to the Banks as of the
Closing Date and shall have been reported on without a "going concern"
or like qualification or exception, or qualification arising out of
the scope of the audit.
(g) Unaudited Financial Statements. The Documentation Agent
shall have received, with a copy for each Bank, the unaudited
consolidated financial statements of the Company described in Section
3.1(b), which financial statements shall be in form and substance
satisfactory to the Banks as of the Closing Date.
(h) Indebtedness; Restrictions. The terms and conditions of
any Indebtedness and Contingent Obligations (including, without
limitation, maturities, interest rates, prepayment and redemption
requirements, covenants, defaults, remedies, security provisions and
subordination provisions) of the Company or any of the Subsidiaries to
remain outstanding after the Closing Date shall be satisfactory to the
Banks in all respects as of the Closing Date, and the Banks shall be
satisfied as of the Closing Date that the Company and its Subsidiaries
are not subject to contractual or other restrictions that would be
violated by this Agreement or the transactions contemplated hereby.
(i) New Developments. As of the Closing Date there shall not
have occurred any change, or development or event involving a
prospective change, which in either case in the opinion of the Banks
could reasonably be expected to have a Material Adverse Effect.
(j) Undisclosed Information. As of the Closing Date the
Banks shall not have become aware of any previously undisclosed
materially adverse information with respect to (i) the business,
operations, properties, condition (financial or otherwise) or
prospects of the Company and its Subsidiaries taken as a whole, (ii)
the ability of the Company to perform its obligations under this
Agreement or the Notes or (iii) the rights or remedies of the Agents
or the Banks hereunder or thereunder.
(k) Fees. The Agents and the Banks shall have received all
fees and expenses required to be paid on or before the Closing Date.
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(l) Representations and Warranties. Each of the
representations and warranties made by the Company in or pursuant to
this Agreement shall be true and correct on and as of the Closing Date
as if made on and as of such date.
(m) No Default. No Default or Event of Default shall have
occurred and be continuing on the Closing Date or after giving effect
to the Loans requested to be made on such date, if any.
(n) Amendment and Restatement of Existing Revolving Credit
Agreement. All unpaid obligations of the Company accrued under the
Existing Revolving Credit Agreement through the Closing Date shall
have been paid in full. On and after the Closing Date, the rights and
obligations of the parties hereto shall be governed by the provisions
of this Agreement, and the rights and obligations of the parties under
the Existing Revolving Credit Agreement with respect to the period
prior to the Closing Date shall continue to be governed by the
provisions thereof as in effect prior to the Closing Date except that
the commitment of each non-continuing Bank under the Existing
Revolving Credit Agreement shall terminate on the Closing Date.
(o) Additional Documents. The Documentation Agent shall have
received each additional document, instrument, legal opinion or item
of information reasonably requested by it on or prior to the Closing
Date, including, without limitation, a copy of any debt instrument,
security agreement or other material contract to which the Company or
any Subsidiary may then be a party.
(p) Additional Matters. All corporate and other proceedings
and all documents, instruments and other legal matters in connection
with the transactions contemplated by this Agreement shall be
satisfactory in form and substance to the Documentation Agent as of
the Closing Date, and the Documentation Agent shall have received such
other documents and legal opinions in respect of any aspect or
consequence of the transactions contemplated hereby or thereby as it
shall reasonably request on or prior to the Closing Date.
4.2 Conditions to all Loans. The obligation of each Bank to
make any Loan to be made by it hereunder is subject to the satisfaction of the
following conditions precedent on the relevant Borrowing Date:
(a) Representations and Warranties. Each of the
representations and warranties made by the Company in or pursuant to
this Agreement shall be true and correct on and as of such date as if
made on and as of such date except to the extent they expressly relate
to an earlier date.
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(b) No Default. No Default or Event of Default shall have
occurred and be continuing on such date or after giving effect to the
Loans requested to be made on such date.
Each borrowing by the Company hereunder shall constitute a representation and
warranty by the Company as of the date of such borrowing that the conditions
contained in this Section 4.2 have been satisfied.
SECTION 5. AFFIRMATIVE COVENANTS
The Company hereby agrees that, so long as the Commitments
remain in effect, any Note remains outstanding and unpaid or any other amount
is owing to any Bank or any Agent hereunder, the Company shall and (except in
the case of delivery of financial information, reports and notices) shall cause
each of the Subsidiaries to:
5.1 Financial Statements. Furnish to each Bank:
(a) as soon as available, but in any event within 90 days
after the end of each fiscal year of the Company, a copy of the
consolidated balance sheet of the Company and its consolidated
Subsidiaries as at the end of such year and the related consolidated
statements of income and retained earnings and of cash flows for such
year, setting forth in each case in comparative form the figures for
the previous year, reported on without a "going concern" or like
qualification or exception, or qualification arising out of the scope
of the audit, by independent certified public accountants of
nationally recognized standing; and
(b) as soon as available, but in any event not later than 45
days after the end of each of the first three quarterly periods of
each fiscal year of the Company, the unaudited consolidated balance
sheets of the Company and its consolidated Subsidiaries as at the end
of such quarter and the related unaudited consolidated statements of
income and retained earnings and cash flows of the Company and its
consolidated Subsidiaries for such quarter (except as to statements of
cash flow) and the portion of the fiscal year through such date,
setting forth in each case in comparative form the figures for the
previous periods which would be required under Form 10-Q promulgated
by the Securities and Exchange Commission, certified by a Responsible
Officer (subject to normal year-end audit adjustments);
all such financial statements to be complete and correct in all material
respects and to be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein (except as
approved by such accountants or officer, as the case may be, and disclosed
therein).
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5.2 Certificates; Other Information. Furnish to each Bank:
(a) concurrently with the delivery of the financial
statements referred to in Section 5.1(a) above, a certificate of the
independent certified public accountants reporting on such financial statements
stating that in making the examination necessary therefor no knowledge was
obtained of any Default or Event of Default, except as specified in such
certificate;
(b) concurrently with the delivery of the financial
statements referred to in Sections 5.1(a) and (b) above, a certificate of a
Responsible Officer (i) stating that, to the best of such officer's knowledge,
the Company during such period has observed or performed all of its covenants
and other agreements, and satisfied every condition, contained in this
Agreement and in the Notes to be observed, performed or satisfied by it, and
that such officer has obtained no knowledge of any Default or Event of Default
except as specified in such certificate, and (ii) showing in detail the
calculations supporting such statement in respect of Sections 6.1, 6.2, and
6.5;
(c) within five days after the same are sent, copies of all
financial statements and reports which the Company sends to its stockholders,
and within five days after the same are filed, copies of all financial
statements and reports which the Company may make to, or file with, the
Securities and Exchange Commission or any successor or analogous Governmental
Authority; and
(d) promptly, such additional financial and other information
as any Bank may from time to time reasonably request.
5.3 Payment of Obligations. Pay, discharge or otherwise
satisfy at or before maturity or before they become delinquent, as the case may
be, all its material obligations of whatever nature (other than Indebtedness
and Contingent Obligations, which shall be beyond the scope of this Section
5.3), except when the amount or validity thereof is currently being contested
in good faith by appropriate proceedings and reserves in conformity with GAAP
with respect thereto have been provided on the books of the Company or its
Subsidiaries, as the case may be.
5.4 Conduct of Business and Maintenance of Existence. With
respect to the Company and its Subsidiaries taken as a whole, continue to
engage in business of a similar, related, synergistic or complimentary nature
as now conducted by it and preserve, renew and keep in full force and effect
its corporate existence and maintain all rights, privileges and franchises
necessary or desirable in the normal conduct of its business and comply in all
material respects with all material Contractual
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Obligations (other than Indebtedness and Contingent Obligations, which shall be
beyond the scope of this Section 5.4) and material Requirements of Law (except
for Environmental Laws, which shall be governed by Section 5.8), except as
otherwise expressly permitted by this Agreement.
5.5 Maintenance of Property; Insurance. Keep all property
useful and necessary in its business in good working order and condition;
maintain with financially sound and reputable insurance companies or through a
formal self-insurance program insurance on all its property in at least such
amounts and against at least such risks but including in any event public
liability, product liability and business interruption as are usually insured
against in the same general area by companies engaged in the same or a similar
business; and furnish to each Bank, upon written request, full information as
to the insurance carried.
5.6 Inspection of Property; Books and Records; Discussions.
Keep proper books of records and account in which full, true and correct
entries in conformity with GAAP and all Requirements of Law shall be made of
all dealings and transactions in relation to its business and activities; and,
subject to applicable governmental security and secrecy regulations, permit
representatives of any Bank to visit and inspect any of its properties and
examine and make abstracts from any of its books and records at any reasonable
time and as often as may reasonably be desired with prior notice to the Company
(which can have a representative present if it so chooses), and to discuss the
business, operations, properties and financial and other condition of the
Company and its Subsidiaries with officers and employees of the Company and its
Subsidiaries and with its independent certified public accountants.
5.7 Notices. Promptly give notice (to be confirmed promptly
in writing) to the Administrative Agent and each Bank:
(a) of the occurrence of any Default or Event of Default;
(b) of any (i) default or event of default under any
Contractual Obligation of the Company or any Subsidiary or (ii) litigation,
investigation or proceeding which may exist at any time between the Company or
any Subsidiary and any Governmental Authority, which in either case, if not
cured or if adversely determined, as the case may be, could reasonably be
expected to have a Material Adverse Effect;
(c) of any litigation or proceeding affecting the Company or
any Subsidiary in which the amount involved is $15,000,000 or more and not
covered by insurance; or in which injunctive or similar relief is sought and
which could reasonably be expected to have a Material Adverse Effect;
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(d) as soon as possible and in any event within 30 days after
the Company knows or has reason to know of the following events: (i) the
occurrence or expected occurrence of any Reportable Event with respect to any
Plan which could reasonably be expected to result in any liability to the
Company or any Subsidiary in excess of $2,000,000 or any withdrawal from, or
the termination, Reorganization or Insolvency of, any Multiemployer Plan, or
(ii) the institution of proceedings or the taking or expected taking of any
other action by PBGC or the Company or any Commonly Controlled Entity with
respect to the withdrawal from, or the terminating, Reorganization or
Insolvency of, any Plan. The Company shall deliver to the Administrative Agent
and each Bank a certificate of the chief financial officer of the Company
setting forth the details thereof and the action that the Company or Commonly
Controlled Entity proposes to take with respect thereto;
(e) of any put notice received by the Company made pursuant
to Section 2.09 of the Stockholders Agreement;
(f) of any change in a Rating; and
(g) of any change in the business, operations, property or
financial or other condition of the Company or any of its Subsidiaries.
Each notice pursuant to this Section 5.7 shall be accompanied by a statement of
a Responsible Officer setting forth details of the occurrence referred to
therein and stating what action the Company proposes to take with respect
thereto.
5.8 Environmental Laws.
(a) Comply with, and require compliance by all tenants and
subtenants, if any, with, all Environmental Laws and obtain and comply with and
maintain, and insure that all tenants and subtenants obtain and comply with and
maintain, any and all licenses, approvals, registrations or permits required by
Environmental Laws, except to the extent that failure to do so could not
reasonably be expected to have a Material Adverse Effect;
(b) Conduct and complete all investigations, studies,
sampling and testing, and all remedial, removal and other actions required by a
Governmental Authority under Environmental Laws and promptly comply with all
lawful orders and directives of all Governmental Authorities respecting
Environmental Laws, except to the extent that the same are being contested in
good faith by appropriate proceedings and the pendency of such proceedings
could not reasonably be expected to have a Material Adverse Effect; and
(c) Defend, indemnify and hold harmless the Agents and the
Banks, and their respective employees, agents, officers and
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directors, from and against any claims, demands, penalties, fines, liabilities,
settlements, damages, costs and expenses of whatever kind or nature known or
unknown, contingent or otherwise, arising out of, or in any way relating to the
violation of or noncompliance with any Environmental Laws applicable to the
Properties, or any orders, requirements or demands of Governmental Authorities
related thereto, including, without limitation, attorney's and consultant's
fees, investigation and laboratory fees, court costs and litigation expenses,
except to the extent that any of the foregoing arise out of the gross
negligence or willful misconduct of the party seeking indemnification therefor.
The agreements in this paragraph shall survive repayment of the Notes and all
other amounts payable hereunder.
5.9 Ratings. Take all reasonable action to enable
Moody's and S&P, or their respective successors, to have in effect a published
or unpublished rating for the Company's senior unsecured debt.
SECTION 6. NEGATIVE COVENANTS
The Company hereby agrees that, so long as the Commitments
remain in effect, any Note remains outstanding and unpaid or any other amount
is owing to any Bank or any Agent hereunder, the Company shall not nor shall it
permit any Subsidiary to, directly or indirectly:
6.1 Financial Condition Covenants. (a) Maintenance of
Consolidated Net Worth. Permit Consolidated Net Worth on the last day of any
fiscal quarter to be less than the sum of (X) $1.140 billion plus (Y) 40% of
Consolidated Net Income, if positive, for the period from October 1, 1994 to
the last day of such fiscal quarter.
(b) Interest Coverage. Permit the ratio of Consolidated Net
Income (before consolidated interest expense, interest income and taxes) to
consolidated interest expense (net of interest income) for the twelve-month
period ending on the last day of any fiscal quarter of the Company to be less
than 2.5 to 1.0, commencing with the fiscal quarter ending December 31, 1994.
6.2 Indebtedness. Create, incur, assume or suffer to exist
any Indebtedness, except:
(a) Indebtedness under this Agreement;
(b) (i) Indebtedness outstanding under the 7% Indenture, the
9-1/8% Indenture, the 1992 8-3/8% Indenture, the 1994 8-3/8% Indenture and the
7-5/8% Indenture; and (ii) Subordinated Debt;
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(c) unsecured Indebtedness incurred in the ordinary course of
business consistent with prior practice in respect of commercial and standby
letters of credit issued by any financial institution to secure contractual
commitments to its customers;
(d) Customer Advances arising in the ordinary course of
business consistent with prior practice;
(e) Indebtedness arising out of clause (c) of the definition
of "Indebtedness" as a result of progress payments or advances made pursuant to
government contracts;
(f) Indebtedness owed by a Wholly Owned Subsidiary to another
Wholly Owned Subsidiary and Indebtedness owed to the Company by a Wholly Owned
Subsidiary; and
(g) in addition to any Indebtedness permitted by clauses (a)
through (f) above, Funded Debt incurred after the date hereof so long as the
ratio of consolidated Funded Debt of the Company and its consolidated
Subsidiaries to Consolidated Net Worth as of the last day of the most recently
completed fiscal quarter on a pro forma basis (i.e., after giving effect to the
incurrence of Funded Debt and the application of the proceeds thereof), as if
such debt had been incurred on the first day of such fiscal quarter, would not
exceed the ratio set forth below opposite the period in which such most
recently completed fiscal quarter occurred:
<TABLE>
<CAPTION>
Period Ratio
------ -----
<S> <C>
Closing Date - March 31, 1995 1.65:1
April 1, 1995 - March 31, 1996 1.40:1
April 1, 1996 - March 31, 1997 1.25:1
Thereafter 1.00:1
</TABLE>
Notwithstanding the foregoing, (x) no Subsidiary shall create, incur, assume or
suffer to exist any Funded Debt other than intercompany debt permitted by
clause (f) above if the principal amount of such Funded Debt exceeds 10% of
Consolidated Net Worth, and (y) no Funded Debt shall be created, incurred or
assumed after the occurrence of a Default or Event of Default or if such
creation, incurrence or assumption would result in a Default or Event of
Default, unless the Company shall obtain the written consent of the Required
Banks prior to such creation, incurrence or assumption.
6.3 Limitation on Liens. Create, incur, assume or suffer to
exist any Lien upon any of its property, assets or revenues, whether now owned
or hereafter acquired, except:
(a) Liens for taxes not yet due or which are being contested
in good faith and by appropriate proceedings if adequate reserves with respect
thereto are maintained on the
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books of the Company or the appropriate Subsidiary, as the case may be, in
accordance with GAAP;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of business
which are not overdue for a period of more than 60 days or which are being
contested in good faith and by appropriate proceedings;
(c) pledges or deposits in connection with workmen's
compensation, unemployment insurance and other social security legislation and
deposits securing liabilities to insurance carriers under insurance and
self-insurance agreements;
(d) deposits to secure the performance of bids, trade
contracts (other than for borrowed money), leases, statutory obligations,
surety and appeal bonds, performance bonds and other obligations of a like
nature incurred in the ordinary course of business;
(e) easements, rights-of-way, restrictions and other Liens
incurred in the ordinary course of business which do not secure Indebtedness
and which do not in any case materially detract from the value of the property
subject thereto or materially interfere with the ordinary conduct of the
business of the Company or any Subsidiaries;
(f) Liens in favor of the United States of America for
amounts paid to the Company or any of the Subsidiaries as progress payments
under government contracts entered into by it;
(g) (i) Liens which were in existence on March 31, 1993 and
which secured obligations reflected in the audited balance sheet referred to in
Section 3.1(a) hereof, (ii) immaterial Liens created after March 31, 1994 and
in existence on the Effective Date, (iii) Liens on the assets of Loral Vought
Systems, Inc., and (iv) Liens on the assets of Federal Systems and its
Subsidiaries existing on the date of the acquisition thereof by the Company and
its Subsidiaries, and renewals and extensions of any of the foregoing which do
not increase the principal amount of the obligations secured thereby or extend
to or cover any property other than the property covered by any such Lien or
property covered by another permitted Lien on March 31, 1994, the Effective
Date or such date of acquisition, as the case may be;
(h) Liens on assets of corporations which become Subsidiaries
after the date of this Agreement; provided, that such Liens existed at the time
the respective corporations become Subsidiaries and were not created in
anticipation thereof;
(i) Liens in favor of customs and revenue authorities arising
as a matter of law to secure payment of customs duties in connection with the
importation of goods;
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(j) Liens upon real and/or personal property, which property
was acquired after the Effective Date by the Company or any Subsidiary in the
ordinary course of business, each of which Liens was created solely for the
purpose of securing Indebtedness incurred for the purpose of financing such
acquisition or for the purpose of securing any refinancings or renewals
thereof; provided, that no such Lien shall extend to or cover any property of
the Company or any such Subsidiary other than the respective property so
acquired and improvements thereon, and the principal amount of Indebtedness
secured by any such Lien shall at no time exceed 100% of the fair market value
(as determined in good faith by the board of directors of the Company) of the
respective property at the time it was acquired; and
(k) Liens created pursuant to Section 2.6(c).
6.4 Limitation on Fundamental Changes. (a) Enter into any
transaction of merger or consolidation or amalgamation, or liquidate, wind up
or dissolve itself (or suffer any liquidation or dissolution) except that any
Subsidiary may be merged or consolidated (i) with or into the Company (provided
that the Company shall be the continuing or surviving corporation) or (ii) with
or into any one or more Wholly Owned Subsidiaries (including any entity that,
after giving effect to such merger or consolidation, is a Wholly Owned
Subsidiary) other than a Wholly Owned Subsidiary domiciled outside the United
States of America (provided that the Wholly Owned Subsidiary shall be the
continuing or surviving corporation); or
(b) convey, sell, lease, transfer or otherwise dispose of any
assets in a transaction or series of related transactions if the fair market
value of such assets (determined by the Board of Directors of the Company in
good faith) is greater than 10% of Consolidated Net Worth, except that:
(i) any Subsidiary may sell, lease, transfer or otherwise
dispose of any or all of its assets (upon voluntary liquidation or
otherwise) to the Company or a Wholly Owned Subsidiary (other than a
Wholly Owned Subsidiary domiciled outside the United States of
America);
(ii) the Company or any Subsidiary may sell, lease, transfer
or otherwise dispose of inventory in the ordinary course of business;
(iii) the Company or any Subsidiary may sell, transfer or
otherwise dispose of Cash Equivalents in exchange for a comparable
amount of cash and/or Cash Equivalents;
(iv) the Company and its Subsidiaries may sell receivables
in a principal amount not to exceed $100,000,000 at any one time
outstanding to a special purpose vehicle for the purpose of a
receivables-based financing;
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(v) the Company or any Subsidiary may convey, sell, lease,
transfer or otherwise dispose of any assets in a transaction or series
of related transactions if the fair market value of such assets
(determined by the Board of Directors of the Company in good faith) is
greater than 10% of Consolidated Net Worth and the amount of such
excess is used to prepay the Loans and to permanently reduce the
Commitments; and
(vi) any Subsidiary may sell assets pursuant to existing
Contractual Obligations disclosed on Schedule 6.4.
6.5 Limitation on Restricted Payments. (a) Declare or pay
any dividends (other than dividends payable solely in stock of the Company or
Historical Dividends) on, or make any payment on account of, or set apart
assets for a sinking or other analogous fund for the purchase, redemption,
retirement or other acquisition of, any shares of any class of stock of the
Company or any Subsidiary (except dividends payable to the Company and
dividends by LAH on the Series S Preferred Stock issued by LAH), whether now or
hereafter outstanding, or make any other distribution in respect thereof,
either directly or indirectly, whether in cash or property or in obligations of
the Company or any Subsidiary, or permit any Subsidiary to make any payment on
account of, or purchase or otherwise acquire, any shares of any class of stock
of the Company or any Subsidiary from any Person (all of the foregoing shall
collectively be referred to as "Restricted Payments"), except that, so long as
no Default or Event of Default has occurred and is continuing or would result
from the making of such Restricted Payment, the Company may make a Restricted
Payment if the sum of (i) such Restricted Payment plus (ii) the Restricted
Payments made from the Closing Date through any date of determination, shall
not exceed an amount equal to the sum of (A) $100,000,000 plus (B) 25% of the
aggregate (if positive) Consolidated Net Income from April 1, 1993 through the
end of the fiscal quarter immediately preceding such date of determination; or
(b) make any Investment (other than pursuant to clauses (b)
through (h) of Section 6.6) or incur, directly or indirectly, any Contingent
Obligation (all of the foregoing shall collectively be referred to as "Other
Restricted Payments"), except that, so long as no Default or Event of Default
has occurred and is continuing or would result from the making of such Other
Restricted Payment, the Company may make an Other Restricted Payment if the sum
of (i) such Other Restricted Payment plus (ii) the Other Restricted Payments
made from the Closing Date through any date of determination, shall not exceed
an amount equal to the sum of (A) 100% of the aggregate Equity Issuance
Proceeds received by the Company or any Subsidiary subsequent to April 1, 1992
plus (B) upon any Person becoming a Wholly Owned Subsidiary, the amount of any
Investments made by the Company or any Wholly Owned Subsidiary in such Person
(other than Investments permitted by Section 6.6) prior to such time
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plus (C) the proceeds from the sale of any Investment made with an Other
Restricted Payment permitted by this Section 6.5.
The value of any dividends paid other than in cash and the value of any
Investments made other than in cash shall be the value determined in good faith
by the Board of Directors of the Company and evidenced by a resolution of such
Board.
6.6 Investments. Make, commit to make or maintain any
Investment, except:
(a) as permitted by Section 6.5;
(b) Investments by the Company existing on the date
hereof as set forth on Schedule 6.6;
(c) Investments by the Company or Subsidiaries in Wholly
Owned Subsidiaries and Investments by Subsidiaries in the Company;
(d) Investments in accounts, contract rights and chattel
paper (as defined in the Uniform Commercial Code), and notes
receivable, arising or acquired in the ordinary course of business;
(e) Investments in Cash Equivalents;
(f) short-term Investments in adjustable rate preferred stock
issued by an issuer rated at least A-1 or the equivalent thereof by
S&P or P-1 or the equivalent thereof by Moody's; and
(g) Excluded Employee Loans.
6.7 Affiliates. Enter into any transaction, including,
without limitation, the purchase, sale or exchange of property or the rendering
of any services, with any Affiliate (other than a Wholly Owned Subsidiary) or
enter into, assume or suffer to exist any employment or consulting contract
with any such Affiliate, except any contract disclosed in the Company's Form
10-K for the fiscal year ended March 31, 1994 filed with the Securities and
Exchange Commission (including any modification or amendment to any such
contract that, in the reasonable judgment of the Company, is no less favorable
to the Company than such contract) and any transaction or contract which is in
the ordinary course of the Company's business and which is upon fair and
reasonable terms no less favorable to the Company than it would obtain in a
comparable arm's length transaction with a Person not an Affiliate.
6.8 Sale and Leaseback. After the date hereof, enter into
any arrangement with any Person providing for the leasing by the Company or any
Subsidiary of real or personal property which has been or is to be sold or
transferred by the Company or any
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Subsidiary to such Person or to any other Person to whom funds have been or are
to be advanced by such Person on the security of such property or rental
obligations of the Company or such Subsidiary, unless the amount by which all
such transactions occurring after the Effective Date exceeds $50,000,000 is
applied by the Company to prepay the Loans and to permanently reduce the
Commitments.
6.9 Corporate Documents. Amend its Certificate of
Incorporation in any material respect adverse to the Banks (except to increase
the number of authorized shares of common stock).
6.10 Restrictions on Subsidiaries. Permit any Wholly Owned
Subsidiary to enter into any agreement which prohibits or restricts the ability
of such Wholly Owned Subsidiary to (i) pay dividends or make any other
distributions on its capital stock (other than the Series S Preferred Stock
issued by LAH), or any other interest or participation in, or measured by, its
profits, owned by the Company or any of its Wholly Owned Subsidiaries, or pay
any Indebtedness owed to the Company or any of its Wholly Owned Subsidiaries,
(ii) make loans or advances to the Company or any of its Wholly Owned
Subsidiaries or (iii) transfer any of its properties or assets to the Company
or any of its Wholly Owned Subsidiaries, except for such encumbrances or
restrictions existing under or by reason of: (A) the terms of this Agreement,
(B) applicable law, (C) customary non-assignment provisions entered into in the
ordinary course of business and consistent with past practices, (D) the terms
of purchase money obligations for property acquired in the ordinary course of
business, but only to the extent that such purchase money obligations restrict
or prohibit the transfer of the property so acquired, (E) any encumbrance or
restriction with respect to a Wholly Owned Subsidiary of the Company that is
not a Wholly Owned Subsidiary of the Company on the Effective Date which
encumbrance or restriction is in existence at the time such person becomes a
Wholly Owned Subsidiary of the Company or is created on the date it becomes a
Wholly Owned Subsidiary of the Company, (F) any encumbrance or restriction with
respect to a Wholly Owned Subsidiary of the Company imposed pursuant to an
agreement which has been entered into for the sale or disposition of all or
substantially all the capital stock or assets of such Wholly Owned Subsidiary
or (G) any encumbrance or restriction existing under any agreement which
refinances or replaces the agreement described in clause (A); provided, that
the terms and conditions of any such encumbrances or restrictions contained in
any such agreement constitute no greater encumbrance or restriction on the
ability of any Wholly Owned Subsidiary to pay dividends or make distributions,
make loans or advances or transfer properties or assets than those under or
pursuant to the agreement evidencing the Indebtedness or obligations
refinanced.
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SECTION 7. EVENTS OF DEFAULT
Upon the occurrence of any of the following events:
(a) The Company shall fail to pay any principal of any Notes
when due in accordance with the terms thereof or hereof; or the Company shall
fail to pay any interest on any Notes, or any fee or other amount payable
hereunder, within five days after any such amount becomes due in accordance
with the terms thereof or hereof; or
(b) Any representation or warranty made or deemed made by or
on behalf of the Company herein or which is contained in any certificate,
document or financial or other statement furnished at any time under or in
connection with this Agreement shall prove to have been incorrect in any
material respect on or as of the date made or deemed made; or
(c) The Company shall default in the observance or
performance of any agreement contained in Section 6; or
(d) The Company shall default in the observance or
performance of any other agreement contained in this Agreement, and such
default shall continue unremedied for a period of 30 days; or
(e) The Company or any of its Subsidiaries shall (A) default
in any payment of principal of or interest on any Indebtedness (other than the
Notes) or in the payment of any Contingent Obligation, beyond the period of
grace, if any, provided in the instrument or agreement under which such
Indebtedness or Contingent Obligation was created and (I) the aggregate
principal amount of (x) all such Indebtedness equals or exceeds $15,000,000 or
(y) all such Contingent Obligations equals or exceeds $100,000,000 and (II)
with respect to a default in the payment of interest by the Company or any
Subsidiary, the effect of such default is to cause, or permit the holder or
holders of such Indebtedness or beneficiary or beneficiaries of such Contingent
Obligation (or a trustee or agent on behalf of such holder or holders or
beneficiary or beneficiaries) to cause, with the giving of notice if required,
such Indebtedness to become due prior to its stated maturity or such Contingent
Obligation to become payable or (B) default in the observance or performance of
any other agreement or condition relating to any such Indebtedness or such
Contingent Obligation or contained in any instrument or agreement evidencing,
securing or relating thereto, or any other event shall occur or condition
exist, the effect of which default or other event or condition is to cause, or
to permit the holder or holders of such Indebtedness or beneficiary or
beneficiaries of such Contingent Obligation (or a trustee or agent on behalf of
such holder or holders or beneficiary or beneficiaries) to cause, with the
giving of notice if required, such Indebtedness to become due prior to its
stated maturity or such Contingent Obligation to become payable; or
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(f) (i) The Company or any of its Substantial Subsidiaries
shall commence any case, proceeding or other action (A) under any existing or
future law of any jurisdiction, domestic or foreign, relating to bankruptcy,
insolvency, reorganization or relief of debtors, seeking to have an order for
relief entered with respect to it, or seeking to adjudicate it a bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with respect to it or its
debts, or (B) seeking appointment of a receiver, trustee, custodian or other
similar official for it or for all or any substantial part of its assets, or
the Company or any of its Substantial Subsidiaries shall make a general
assignment for the benefit of its creditors; or (ii) there shall be commenced
against the Company or any of its Substantial Subsidiaries any case, proceeding
or other action of a nature referred to in clause (i) above which (A) results
in the entry of an order for relief or any such adjudication or appointment or
(B) remains undismissed, undischarged or unbonded for a period of 60 days; or
(iii) there shall be commenced against the Company or any of its Substantial
Subsidiaries any case, proceeding or other action seeking issuance of a warrant
of attachment, execution, distraint or similar process against all or any
substantial part of its assets which results in the entry of an order for any
such relief which shall not have been vacated, discharged, or stayed or bonded
pending appeal within 60 days from the entry thereof; or (iv) the Company or
any of its Substantial Subsidiaries shall take any action in furtherance of, or
indicating its consent to, approval of, or acquiescence in, any of the acts set
forth in clause (i), (ii), or (iii) above; or (v) the Company or any of its
Substantial Subsidiaries shall generally not, or shall be unable to, or shall
admit in writing its inability to, pay its debts as they become due; or
(g) (i) Any Person shall engage in any "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of the Code)
involving any Plan, (ii) any "accumulated funding deficiency" (as defined in
Section 302 of ERISA), whether or not waived, shall exist with respect to any
Plan, (iii) a Reportable Event shall occur with respect to, or proceedings
shall commence to have a trustee appointed, or a trustee shall be appointed, to
administer or to terminate, any Single Employer Plan, which Reportable Event or
commencement of proceedings or appointment of a trustee is, in the reasonable
opinion of the Required Banks, likely to result in the termination of such Plan
for purposes of Title IV of ERISA, (iv) any Single Employer Plan shall
terminate for purposes of Title IV of ERISA, (v) the Company or any Commonly
Controlled Entity shall, or is, in the reasonable opinion of the Required
Banks, likely to, incur any liability in connection with a withdrawal from, or
the Insolvency or Reorganization of, a Multiemployer Plan, or (vi) any other
event or condition shall occur or exist with respect to a Plan; and in each
case in clauses (i) through (vi) above, such event or condition, together with
all other such events or conditions, if any, could subject the Company or any
of its Subsidiaries to any
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tax, penalty or other liabilities in the aggregate material in relation to the
business, operations, property or financial or other condition of the Company
and its Subsidiaries taken as a whole;
(h) One or more judgments or decrees shall be entered against
the Company or any of its Substantial Subsidiaries involving in the aggregate a
liability (not paid or fully covered by insurance) of $15,000,000 or more and
all such judgments or decrees shall not have been vacated, discharged, stayed
or bonded pending appeal within 60 days from the entry thereof; or
(i) A Change in Control shall occur;
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) above, automatically the Commitments
shall immediately terminate and the Loans hereunder (with accrued interest
thereon) and all other amounts owing under this Agreement and the Notes shall
immediately become due and payable, and (B) if such event is any other Event of
Default, either or both of the following actions may be taken, without
prejudice to the rights of any Bank to enforce its claims against the Company:
(i) with the consent of the Required Banks, the Administrative Agent may, or
upon the request of the Required Banks, the Administrative Agent shall, by
notice to the Company, declare the Commitments to be terminated forthwith,
whereupon the Commitments shall immediately terminate; and (ii) with the
consent of the Required Banks, the Administrative Agent may, or upon the
request of the Required Banks, the Administrative Agent shall, by notice of
default to the Company, declare the Loans hereunder (with accrued interest
thereon) and all other amounts owing under this Agreement and the Notes to be
due and payable forthwith, whereupon the same shall immediately become due and
payable. Except as expressly provided above in this Section 7, presentment,
demand, protest and all other notices of any kind are hereby expressly waived.
SECTION 8. THE AGENTS
8.1 Appointment. Each Bank hereby irrevocably designates
Morgan as the Documentation Agent of such Bank under this Agreement and each
such Bank irrevocably authorizes Morgan, as the Documentation Agent for such
Bank, to take such action on its behalf under the provisions of this Agreement
and to exercise such powers and perform such duties as are expressly delegated
to the Documentation Agent by the terms of this Agreement, together with such
other powers as are reasonably incidental thereto. Each Bank hereby
irrevocably designates and appoints Chemical as the Administrative Agent of
such Bank under this Agreement, and each such Bank irrevocably authorizes
Chemical, as the Administrative Agent for such Bank, to take such action on its
behalf under the provisions of this Agreement and to exercise such powers and
perform such duties as are expressly delegated to
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the Administrative Agent by the terms of this Agreement, together with such
other powers as are reasonably incidental thereto. Notwithstanding any
provision to the contrary elsewhere in this Agreement, the Agents shall not
have any duties or responsibilities, except those expressly set forth herein,
or any fiduciary relationship with any Bank, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into this Agreement or otherwise exist against the Agents.
8.2 Delegation of Duties. The Agents may execute any of
their duties under this Agreement by or through agents or attorneys-in-fact and
shall be entitled to advice of counsel concerning all matters pertaining to
such duties. The Agents shall not be responsible for the negligence or
misconduct of any agents or attorneys-in-fact selected by any of them with
reasonable care.
8.3 Exculpatory Provisions. No Agent nor any of its
officers, directors, employees, agents, attorneys-in-fact or Affiliates shall
be (i) liable for any action lawfully taken or omitted to be taken by it or
such Person under or in connection with this Agreement (except for its or such
Person's own gross negligence or willful misconduct), or (ii) responsible in
any manner to any of the Banks for any recitals, statements, representations or
warranties made by the Company or any officer thereof contained in this
Agreement or in any certificate, report, statement or other document referred
to or provided for in, or received by such Agent under or in connection with,
this Agreement or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or the Notes or for any failure
of the Company to perform its obligations hereunder or thereunder. No Agent
shall be under any obligation to any Bank to ascertain or to inquire as to the
observance or performance of any of the agreements contained in, or conditions
of, this Agreement, or to inspect the properties, books or records of the
Company.
8.4 Reliance by Agents. The Agents shall be entitled to
rely, and shall be fully protected in relying, upon any Note, writing,
resolution, notice, consent, certificate, affidavit, letter, cablegram,
telegram, telecopy, telex or teletype message, statement, order or other
document or conversation believed by them to be genuine and correct and to have
been signed, sent or made by the proper Person or Persons and upon advice and
statements of legal counsel (including, without limitation, counsel to the
Company), independent accountants and other experts selected by the Agents.
The Administrative Agent may deem and treat the payee of any Note as the owner
thereof for all purposes unless a written notice of assignment, negotiation or
transfer thereof shall have been filed with the Administrative Agent. The
Administrative Agent shall be fully justified in failing or refusing to take
any action under this Agreement unless it shall first receive such advice or
concurrence of the
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Required Banks as it deems appropriate or it shall first be indemnified to its
satisfaction by the Banks against any and all liability and expense which may
be incurred by it by reason of taking or continuing to take any such action.
The Administrative Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement and the Notes in accordance with a
request of the Required Banks, and such request and any action taken or failure
to act pursuant thereto shall be binding upon all the Banks and all future
holders of the Notes.
8.5 Notice of Default. The Agents shall not be deemed to
have knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless the Administrative Agent has received notice from a Bank or
the Company referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a "notice of default". In the event
that the Administrative Agent receives such a notice, the Administrative Agent
shall give notice thereof to the Banks. The Administrative Agent shall take
such action with respect to such Default or Event of Default as shall be
reasonably directed by the Required Banks; provided, that unless and until the
Administrative Agent shall have received such directions, the Administrative
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it
shall deem advisable in the best interests of the Banks.
8.6 Non-Reliance on Agents and Other Banks. Each Bank
expressly acknowledges that no Agent nor any of its officers, directors,
employees, agents, attorneys-in-fact or Affiliates has made any representations
or warranties to it and that no act by any Agent hereafter taken, including any
review of the affairs of the Company, shall be deemed to constitute any
representation or warranty by such Agent to any Bank. Each Bank represents to
the Agents that it has, independently and without reliance upon the Agents or
any other Bank, and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
operations, property, financial and other condition and creditworthiness of the
Company and made its own decision to make its Loans hereunder and enter into
this Agreement. Each Bank also represents that it will, independently and
without reliance upon the Agents 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 analysis, appraisals and/or decisions in taking or not taking action
under this Agreement, and to make such investigation as it deems necessary to
inform itself as to the business, operations, property, financial and/or other
condition and creditworthiness of the Company. Except for notices, reports and
other documents expressly required to be furnished to the Banks by the
Administrative Agent hereunder, no Agent shall have any duty or responsibility
to provide any Bank with any credit or other information concerning the
business, operations, property, financial and other condition or
creditworthiness of the Company
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which may come into the possession of such Agent or any of its officers,
directors, employees, agents, attorneys-in-fact or Affiliates.
8.7 Indemnification. The Banks agree to indemnify each Agent
in its capacity as such (to the extent not reimbursed by the Company and
without limiting the obligation of the Company to do so), ratably according to
their respective Commitment Percentages, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind whatsoever which may at any
time (including without limitation at any time following the payment of the
Notes) be imposed on, incurred by or asserted against such Agent in any way
relating to or arising out of this Agreement, or any documents contemplated by
or referred to herein or the transactions contemplated hereby or any action
taken or omitted by such Agent under or in connection with any of the
foregoing; provided, that no Bank shall be liable for the payment of any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting solely from such
Agent's gross negligence or willful misconduct. If any such amount with
respect to which the Banks have indemnified such Agent is recovered from the
Company, such Agent shall return the amount so recovered to the Banks which so
indemnified such Agent, but without interest, unless the Company has paid
interest. The agreements in this Section shall survive the payment of the
Notes and all other amounts payable hereunder.
8.8 Each Agent in Its Individual Capacity. Each Agent and
its affiliates may make loans to, accept deposits from and generally engage in
any kind of business with the Company as though such Agent were not an Agent
hereunder. With respect to its Loans made or renewed by it and any Note issued
to it, each Agent shall have the same rights and powers under this Agreement as
any Bank and may exercise the same as though it were not an Agent, and the
terms "Bank" and "Banks" shall include each Agent in its individual capacity.
8.9 Successor Agents. An Agent may resign as such upon 10
days' notice to the Banks and the Company; provided, that such resignation
shall not become effective until a successor Agent is appointed in accordance
with this Section 8.9. If such Agent shall resign as an Agent under this
Agreement, then the Required Banks shall appoint from among the Banks a
successor agent for the Banks which successor agent shall be approved by the
Company, whereupon such successor agent shall succeed to the rights, powers and
duties of such Agent, and any references to such Agent herein or in the Notes
shall mean such successor agent effective upon its appointment, and the former
Agent's rights, powers and duties as such shall be terminated, without any
other or further act or deed on the part of such former Agent or any of the
parties to this Agreement or any holders of the Notes. After any retiring
Agent's resignation as such, the provisions of this
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Section 8.9 shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was an Agent under this Agreement.
8.10 Co-Agent. Bank of America Illinois shall not have any
right, power, obligation, liability, responsibility or duty under this
Agreement other than those applicable to all Banks or Reference Banks, as the
case may be, as such. Each Bank acknowledges that it has not relied, and will
not rely, on Bank of America Illinois in deciding to enter into this Agreement
or in taking or not taking action hereunder.
SECTION 9. MISCELLANEOUS
9.1 Amendments and Waivers. Neither this Agreement, any
Note, nor any terms hereof or thereof may be amended, supplemented or modified
except in accordance with the provisions of this Section 9.1. With the written
consent of the Required Banks, the Documentation Agent, on behalf of the Banks
and the Agents, and the Company may, from time to time, enter into written
amendments, supplements or modifications hereto and to the Notes for the
purpose of adding any provisions to this Agreement or the Notes or changing in
any manner the rights of the Banks or of the Company hereunder or thereunder or
waiving, on such terms and conditions as the Documentation Agent may specify in
such instrument, any of the requirements of this Agreement or the Notes or any
Default or Event of Default and its consequences; provided, however, that no
such waiver and no such amendment, supplement or modification shall (a) reduce
the amount or extend the scheduled maturity of any Note, or reduce the rate or
extend the time of payment of interest thereon, or reduce any fee payable to
any Bank hereunder, or reduce the principal amount of any Note, or change the
amount of any Bank's Commitment, in each case without the written consent of
each Bank affected thereby, or (b) amend, modify or waive any provision of this
Section 9.1, or reduce the percentage specified in the definition of Required
Banks, or consent to the assignment or transfer by the Company of any of its
rights and obligations under this Agreement, or release amounts in the Cash
Collateral Account other than in accordance with Section 2.6 in each case
without the written consent of all the Banks, or (c) amend, modify or waive any
provision of Section 8 without the written consent of the then Agents. Any
such waiver and any such amendment, supplement or modification shall apply
equally to each of the Banks and shall be binding upon the Company, the Banks,
the Agents and all future holders of the Notes. In the case of any waiver, the
Company, the Banks and the Agents shall be restored to their former position
and rights hereunder and under the outstanding Notes, and any Default or Event
of Default waived shall be deemed to be cured and not continuing; but no such
waiver shall extend to any subsequent or other Default or Event of Default, or
impair any right consequent thereon.
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9.2 Notices. All notices, requests and demands to or upon
the respective parties hereto to be effective shall be in writing (including by
telecopy or telex), and, unless otherwise expressly provided herein, shall be
deemed to have been duly given or made when delivered by hand, or three
Business Days after being deposited in the mail, postage prepaid, or, in the
case of telecopy notice, when received, or, in the case of telex notice, when
sent, answerback received, addressed as follows in the case of the Company and
the Agents, and as set forth in Schedule I in the case of the other parties
hereto, or to such other address as may be hereafter notified by the respective
parties hereto and any future holders of the Notes:
The Company: Loral Corporation
600 Third Avenue
New York, New York 10016
Attention: Michael P. DeBlasio
Senior Vice President - Finance
Telecopy: 212-661-8988
Telex: 64401
Answerback: LORAL CORP
with a copy to:
Loral Corporation
600 Third Avenue
New York, New York 10016
Attention: General Counsel
The Documentation
Agent: Morgan Guaranty Trust Company
of New York
60 Wall Street
New York, New York 10260-0600
Attention: Robert M. Osieski
Telecopy: 212-648-5014
with a copy to:
James T. Knight, Esq.
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017
Telecopy: 212-455-2502
The Administrative
Agent: Chemical Bank
270 Park Avenue
New York, New York 10017
Attention: John C. Riordan
Telecopy: 212-270-9647
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with a copy to:
Chemical Bank Agent
Bank Services Group
Grand Central Tower
140 East 45th Street, 29th Floor
New York, New York 10017
Attention: Sandra Miklave
Telecopy: 212-622-0002
; provided, that any notice, request or demand to or upon the Agents or the
Banks pursuant to Sections 2.3, 2.5, 2.6 and 2.7 shall not be effective until
received.
9.3 No Waiver; Cumulative Remedies. No failure to exercise
and no delay in exercising, on the part of the Administrative Agent or any
Bank, any right, remedy, power or privilege hereunder or under the Notes shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, remedy, power or privilege hereunder or thereunder preclude any other or
further exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges herein provided or
provided in the Notes are cumulative and not exclusive of any rights, remedies,
powers and privileges provided by law.
9.4 Survival of Representations and Warranties. All
representations and warranties made hereunder and in any document, certificate
or statement delivered pursuant hereto or in connection herewith shall survive
the execution and delivery of this Agreement and the Notes.
9.5 Payment of Expenses and Taxes. The Company agrees (a) to
pay or reimburse each Agent for all its reasonable out-of-pocket costs and
expenses incurred in connection with the preparation and execution of, and any
amendment, supplement or modification to, this Agreement and the Notes and any
other documents prepared in connection herewith or therewith, and the
consummation of the transactions contemplated hereby and thereby, including,
without limitation, the reasonable fees and disbursements of counsel to the
Agents, (b) to pay or reimburse each Bank and the Agents for all their
reasonable costs and expenses incurred in connection with the enforcement or
preservation of any rights under this Agreement, the Notes and any such other
documents, including, without limitation, fees and disbursements of counsel to
the Agents and to the several Banks (including, without limitation, the
allocated costs of in-house counsel), (c) to pay, indemnify, and hold each Bank
and the Agents harmless from, any and all recording and filing fees and any and
all liabilities with respect to, or resulting from any delay in paying, stamp,
excise and other taxes, if any, which may be payable or determined to be
payable in connection with the execution and delivery of, or consummation of
any of the transactions contemplated by, or any amendment, supplement or
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<PAGE> 62
modification of, or any waiver or consent under or in respect of, this
Agreement, the Notes and any such other documents, and (d) to pay, indemnify,
and hold each Bank and the Agents (and their respective directors, officers,
employees and agents) harmless from and against any and all other liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever with respect to or
arising out of the execution, delivery, enforcement, performance, syndication
and administration of this Agreement, the Notes and any such other documents
and the use of proceeds of the Loans (all the foregoing, collectively, the
"indemnified liabilities"); provided, that the Company shall have no obligation
hereunder to any Agent or any Bank with respect to indemnified liabilities
arising from the gross negligence or willful misconduct of any such Agent or
any such Bank. The agreements in this Section 9.5 shall survive repayment of
the Notes and all other amounts payable hereunder.
9.6 Successors and Assigns; Participations; Purchasing Banks.
(a) This Agreement shall be binding upon and inure to the benefit of the
Company, the Banks, the Agents, all future holders of the Notes, and their
respective successors and assigns, except that the Company may not assign or
transfer any of its rights or obligations under this Agreement without the
prior written consent of each Bank.
(b) Any Bank may, in the ordinary course of its commercial
banking business and in accordance with applicable law, at any time sell to one
or more banks or other entities ("Participants") participating interests in any
Loan owing to such Bank, any Note held by such Bank, the Commitment of such
Bank or any other interest of such Bank hereunder; provided, that if the
Participant is not an Affiliate of such Bank or another Bank, such Bank shall
obtain the prior consent of the Company to such sale of participating interests
(which consent shall not be unreasonably withheld or delayed); and provided
further, that such Bank shall reserve solely unto itself, and shall not grant
to any Participant, any part or all of its right to agree to the amendment,
modification or waiver of any of the terms of this Agreement, its Note or any
document related thereto, except to the extent that such amendment,
modification or waiver would reduce the principal of, or interest on, the Notes
or any fees payable hereunder, in each case to the extent subject to such
participation, or postpone the date of the final maturity of, or any date fixed
for any payment of interest on, the Notes, in each case to the extent subject
to such participation. In the event of any such sale by a Bank of a
participating interest to a Participant, such Bank's obligations under this
Agreement to the other parties to this Agreement shall remain unchanged, such
Bank shall remain solely responsible for the performance thereof, such Bank
shall remain the holder of any such Note for all purposes under this Agreement
and the Company, the Documentation Agent, and the Administrative Agent shall
continue to deal solely and directly with such Bank in connection with such
Bank's rights and
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<PAGE> 63
obligations under this Agreement. The Company agrees that if amounts
outstanding under this Agreement and the Notes are due and unpaid, or shall
have been declared or shall have become due and payable upon the occurrence of
an Event of Default, each Participant shall be deemed to have the right of
setoff in respect of its participating interest in amounts owing under this
Agreement and any Note to the same extent as if the amount of its participating
interest were owing directly to it as a Bank under this Agreement or any Note;
provided, that such right of setoff shall be subject to the obligation of such
Participant to share with the Banks, and the Banks agree to share with such
Participant, as provided in Section 9.7. The Company also agrees that each
Participant shall be entitled to the benefits of Sections 2.14, 2.15, 2.16 and
9.5 with respect to its participation in the Commitments and the Loans
outstanding from time to time; provided, that no Participant shall be entitled
to receive any greater amount pursuant to such Sections than the transferor
Bank would have been entitled to receive in respect of the amount of the
participation transferred by such transferor Bank to such Participant had no
such transfer occurred.
(c) Any Bank may, in the ordinary course of its commercial
banking business and in accordance with applicable law, and (if the Purchasing
Bank is not an Affiliate of such Bank or an existing Bank) with the prior
consent of the Company (which shall not be unreasonably withheld or delayed),
at any time sell to one or more banks or financial institutions ("Purchasing
Banks") all or any part of its rights and obligations under this Agreement and
the Notes, pursuant to a Commitment Transfer Supplement, executed by such
Purchasing Bank and such transferor Bank, and delivered to the Administrative
Agent for its acceptance and recording in the Register; provided, that if the
Purchasing Bank is not an Affiliate of such Bank or an existing Bank any sale
of Loans shall be in an amount equal to the lesser of (i) such Bank's
Commitment and (ii) $15,000,000. Upon such execution, delivery, acceptance and
recording, from and after the Transfer Effective Date determined pursuant to
such Commitment Transfer Supplement, (x) the Purchasing Bank thereunder shall
be a party hereto and, to the extent provided in such Commitment Transfer
Supplement, have the rights and obligations of a Bank hereunder with a
Commitment as set forth therein, and (y) the transferor Bank thereunder shall,
to the extent provided in such Commitment Transfer Supplement, be released from
its obligations under this Agreement (and, in the case of a Commitment Transfer
Supplement covering all or the remaining portion of a transferor Bank's rights
and obligations under this Agreement, such transferor Bank shall cease to be a
party hereto). Such Commitment Transfer Supplement shall be deemed to amend
this Agreement to the extent, and only to the extent, necessary to reflect the
addition of such Purchasing Bank and the resulting adjustment of Commitment
Percentages arising from the purchase by such Purchasing Bank of all or a
portion of the rights and obligations of such transferor Bank under this
Agreement and the Notes. On or prior to the Transfer Effective Date determined
59
<PAGE> 64
pursuant to such Commitment Transfer Supplement, the Company, at its own
expense, shall execute and deliver to the Administrative Agent in exchange for
the surrendered Note a new Note to the order of such Purchasing Bank in an
amount equal to the Commitment assumed by it pursuant to such Commitment
Transfer Supplement and, if the transferor Bank has retained a Commitment
hereunder, a new Note to the order of the transferor Bank in an amount equal to
the Commitment retained by it hereunder. Such new Notes shall be dated the
Closing Date and shall otherwise be in the form of the Notes replaced thereby.
The Note surrendered by the transferor Bank shall be returned by the
Administrative Agent to the Company marked "cancelled".
(d) The Administrative Agent shall maintain at its address
referred to in Section 9.2 a copy of each Commitment Transfer Supplement
delivered to it and a register (the "Register") for the recordation of the
names and addresses of the Banks and the Commitment of, and principal amount of
the Loans owing to, each Bank from time to time. The entries in the Register
shall be conclusive, in the absence of manifest error, and the Company, the
Administrative Agent and the Banks may treat each Person whose name is recorded
in the Register as the owner of the Loan recorded therein for all purposes of
this Agreement. The Register shall be available for inspection by the Company
or any Bank at any reasonable time and from time to time upon reasonable prior
notice.
(e) Upon its receipt of a Commitment Transfer Supplement
executed by a transferor Bank and a Purchasing Bank together with payment to
the Administrative Agent of a registration and processing fee of $4,000, the
Administrative Agent shall (i) promptly accept such Commitment Transfer
Supplement and (ii) on the Transfer Effective Date determined pursuant thereto
record the information contained therein in the Register and give notice of
such acceptance and recordation to the Documentation Agent, the Banks and the
Company.
(f) The Company authorizes each Bank to disclose to any
Participant or Purchasing Bank (each, a "Transferee") and any prospective
Transferee any and all financial information in such Bank's possession
concerning the Company and its affiliates which has been delivered to such Bank
by or on behalf of the Company pursuant to this Agreement or which has been
delivered to such Bank by or on behalf of the Company in connection with such
Bank's credit evaluation of the Company and its affiliates prior to becoming a
party to this Agreement; provided, that such Transferee or prospective
Transferee agrees in writing to be bound by the confidentiality provisions set
forth in Section 9.14 hereof.
(g) If, pursuant to this Section 9.6, any interest in this
Agreement or any Note is transferred to any Transferee which is organized under
the laws of any jurisdiction other than the United States or any State thereof,
the transferor Bank shall
60
<PAGE> 65
cause such Transferee, concurrently with the effectiveness of such transfer,
(i) to represent to the transferor Bank (for the benefit of the transferor
Bank, the Agents and the Company) that under applicable law and treaties no
taxes will be required to be withheld by the Administrative Agent, the Company
or the transferor Bank with respect to any payments to be made to such
Transferee in respect of the Loans, (ii) to furnish to the transferor Bank
(and, in the case of any Purchasing Bank registered in the Register, the
Administrative Agent and the Company) either U.S. Internal Revenue Service Form
4224 or U.S. Internal Revenue Service Form 1001 (wherein such Transferee claims
entitlement to complete exemption from U.S. federal withholding tax on all
interest payments hereunder) and an Internal Revenue Service Form W-8 or W-9 or
successor applicable form (wherein such Transferee claims exemption from United
States backup withholding tax) and (iii) to agree (for the benefit of the
transferor Bank, the Agents and the Company) to provide the transferor Bank
(and, in the case of any Purchasing Bank registered in the Register, the
Administrative Agent and the Company) a new Form 4224 or 1001 or Form W-8 or
W-9 upon the expiration or obsolescence of any previously delivered form and
comparable statements in accordance with applicable U.S. laws and regulations
and amendments duly executed and completed by such Transferee, and to comply
from time to time with all applicable U.S. laws and regulations with regard to
such withholding and backup withholding tax exemptions.
(h) Nothing herein shall prohibit any Bank from pledging or
assigning any Note to any Federal Reserve Bank in accordance with applicable
law.
9.7 Adjustments; Set-off. (a) If any Bank (a "benefitted
Bank") shall receive any payment of all or part of its Loans or interest
thereon, or receive any collateral in respect of its Loans (in each case
whether voluntarily or involuntarily, by set-off, pursuant to events or
proceedings of the nature referred to in clause (f) of Section 7, or otherwise)
in a greater proportion than any such payment to and collateral received by any
other Bank, if any, in respect of such other Bank's Loans or interest thereon,
or Loans or interest thereon, such benefitted Bank shall purchase for cash from
the other Banks such portion of each such other Bank's Loans, or shall provide
such other Banks with the benefits of any such collateral, or the proceeds
thereof, as shall be necessary to cause such benefitted Bank to share the
excess payment or benefits of such collateral or proceeds ratably with each of
the Banks; provided, however, that if all or any portion of such excess payment
or benefits is thereafter recovered from such benefitted Bank, such purchase
shall be rescinded, and the purchase price and benefits returned, to the extent
of such recovery, but without interest. The Company agrees that each Bank so
purchasing a portion of another Bank's Loans may exercise all rights of payment
(including, without limitation, rights of set-off) with respect to such
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<PAGE> 66
portion as fully as if such Bank were the direct holder of such portion.
(b) In addition to any rights and remedies of the Banks
provided by law, each Bank shall have the right, without prior notice to the
Company, any such notice being expressly waived by the Company to the extent
permitted by applicable law, upon any amount becoming due and payable by the
Company hereunder or under the Notes (whether at the stated maturity, by
acceleration or otherwise) to set off and appropriate and apply against such
amount any and all deposits (general or special, time or demand, provisional or
final), in any currency, and any other credits, indebtedness or claims, in any
currency, in each case whether direct or indirect, absolute or contingent,
matured or unmatured, at any time held or owing by such Bank to or for the
credit or the account of the Company. Each Bank agrees promptly to notify the
Company and the Administrative Agent after any such set-off and application
made by such Bank; provided, that the failure to give such notice shall not
affect the validity of such set-off and application.
9.8 Severability. Any provision of this Agreement which
is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate
or render unenforceable such provision in any other jurisdiction.
9.9 Counterparts. This Agreement may be executed by one
or more of the parties to this Agreement on any number of separate counterparts
and all of said counterparts taken together shall be deemed to constitute one
and the same instrument. A set of the copies of this Agreement signed by all
the parties shall be lodged with the Company and the Agent.
9.10 GOVERNING LAW. THIS AGREEMENT AND THE NOTES AND THE
RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT AND THE NOTES SHALL
BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF
THE STATE OF NEW YORK.
9.11 Submission To Jurisdiction; Waivers. The Company
hereby irrevocably and unconditionally:
(a) submits for itself and its property in any legal
action or proceeding relating to this Agreement or the Notes, or for
recognition and enforcement of any judgement in respect thereof, to
the non-exclusive general jurisdiction of the courts of the State of
New York, the courts of the United States of America for the Southern
District of New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be
brought in such courts and waives any objection that it may
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<PAGE> 67
now or hereafter have to the venue of any such action or proceeding in
any such court or that such action or proceeding was brought in an
inconvenient court and agrees not to plead or claim the same;
(c) agrees that service of process in any such action or
proceeding may be affected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage
prepaid, to the Company at its address set forth in Section 9.2 or at
such other address of which the Agent shall have been notified
pursuant thereto;
(d) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or
shall limit the right to sue in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any
right it may have to claim or recover in any legal action or
proceeding referred to in this Section any special, exemplary,
punitive or consequential damages.
9.12 WAIVERS OF JURY TRIAL. THE COMPANY, THE AGENTS AND
THE BANKS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY
LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR THE NOTES AND FOR ANY
COUNTERCLAIM THEREIN.
9.13 Integration. This Agreement represents the
agreement of the Company, the Agents and the Banks with respect to the subject
matter hereof, and there are no promises, undertakings, representations or
warranties by any Agent or any Bank relative to the subject matter hereof not
expressly set forth or referred to herein or in the Notes.
9.14 Confidentiality. The Banks shall hold all
non-public information obtained pursuant to the requirements of this Agreement
which has been identified as such by the Company in accordance with their
customary procedures for handling confidential information of this nature and
in accordance with safe and sound banking practices but in any event may make
disclosure reasonably required by a bona fide prospective Purchasing Bank or
Participant in connection with the contemplated transfer of any Note or
participation therein (subject to such prospective Purchasing Bank's or
Participant's compliance with Section 9.6(f) hereof) or as required or
requested by any Governmental Authority or representative thereof or pursuant
to legal process.
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<PAGE> 68
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered in New York, New York by their
proper and duly authorized officers as of the day and year first above written.
LORAL CORPORATION
By: Nicholas C. Moren
------------------------------------
Title: Vice President
Treasurer
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Documentation
Agent and as a Bank
By: Diana H. Imhof
------------------------------------
Title: Associate
CHEMICAL BANK, as
Administrative Agent and as
a Bank
By: John C. Riordan
------------------------------------
Title: Vice President
BANK OF AMERICA ILLINOIS,
as Agent and as a
Bank
By: Steven Aronowitz
------------------------------------
Title: Vice President
ABN AMRO BANK N.V., NEW YORK
BRANCH, as a Bank
By: Nancy F. Watkins
------------------------------------
Title: Group Vice President
By: Margaret P. Hanahoe
------------------------------------
Title: Assistant Vice President
64
<PAGE> 69
NATIONSBANK OF NORTH CAROLINA,
N.A., as a Bank
By: Sally L. Hazard
------------------------------------
Title: Senior Vice President
DEUTSCHE BANK AG, NEW YORK
AND/OR CAYMAN ISLANDS
BRANCH, as a Bank
By: Robert B. Landis
------------------------------------
Title: Managing Director
By: J. Tracy Mehr
------------------------------------
Title: Vice President
THE INDUSTRIAL BANK OF JAPAN,
LIMITED, NEW YORK BRANCH, as
a Bank
By: Takeshi Kawano
------------------------------------
Title: Senior Vice President
and Senior Manager
ROYAL BANK OF CANADA, as a Bank
By: Michael Korine
------------------------------------
Title: Senior Manager
BANCA COMMERCIALE ITALIANA,
NEW YORK BRANCH, as a Bank
By: Jenifer Casalvieri
------------------------------------
Title: Assistant Vice
President
By: Charles Dougherty
------------------------------------
Title: Vice President
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<PAGE> 70
THE BANK OF NEW YORK, as a Bank
By: Howard F. Bascom, Jr.
------------------------------------
Title: Vice President
BANQUE NATIONALE DE PARIS, as a
Bank
By: Eric Vigne
------------------------------------
Title: Senior Vice President
By: Walter Kaplan
------------------------------------
Title: Vice President
LTCB TRUST COMPANY, as a Bank
By: Rene O. LeBlanc
------------------------------------
Title: Senior Vice
President
PNC BANK, NATIONAL ASSOCIATION,
as a Bank
By: Mark Williams
------------------------------------
Title: Vice President
SOCIETE GENERALE, NEW YORK
BRANCH, as a Bank
By: Paul Dalle Molle
------------------------------------
Title: Vice President
CREDIT LYONNAIS, NEW YORK
BRANCH, as a Bank
By: Mark A. Campellone
------------------------------------
Title: Vice President
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<PAGE> 71
MELLON BANK, N.A., as a Bank
By: David N. Smith
------------------------------------
Title: Assistant Vice
President
NATIONAL CITY BANK, as a Bank
By: David A. Burns
------------------------------------
Title: Assistant Vice
President
THE NIPPON CREDIT BANK, LTD.,
as a Bank
By: Elizabeth S. Tarbell
------------------------------------
Title: Assistant Vice
President
BAYERISCHE LANDESBANK
GIROZENTRALE, as a Bank
By: Peter Obermann
------------------------------------
Title: First Vice President
Manager Lending
Division
By: K.H. Wallner
------------------------------------
Title: Senior Vice President
Manager of Operations and
Administration
CANADIAN IMPERIAL BANK OF
COMMERCE (NEW YORK AGENCY),
as a Bank
By: Dean T. Criares
------------------------------------
Title: Authorized Signatory
CREDIT SUISSE, as a Bank
By: Chris T. Horgan
------------------------------------
Title: Associate
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<PAGE> 72
By: Michael C. Mast
------------------------------------
Title: Member of Senior Management
THE CHASE MANHATTAN BANK, N.A.,
as a Bank
By: Richard C. Smith
------------------------------------
Title: Vice President
THE FUJI BANK, LIMITED, NEW
YORK BRANCH, as a Bank
By: Gina M. Kearns
------------------------------------
Title: Vice President and
Manager
THE MITSUBISHI BANK, LIMITED,
NEW YORK BRANCH, as a Bank
By: J. Bruce Meredith
------------------------------------
Title: Senior Vice President
and Manager
THE SANWA BANK LIMITED, as
a Bank
By: Dominic J. Sorresso
------------------------------------
Title: Vice President
THE BANK OF NOVA SCOTIA, as a
Bank
By: J. Alan Edwards
------------------------------------
Title: Authorized Signatory
SUMITOMO BANK, LIMITED, NEW
YORK BRANCH, as a Bank
By: Shuntaro Higashi
------------------------------------
Title: Joint General Manager
68
<PAGE> 73
WELLS FARGO BANK, N.A., as a
Bank
By: Kathleen Harrison
------------------------------------
Title: Vice President
69
<PAGE> 74
SCHEDULE I
Commitments and Commitment Percentages
<TABLE>
<CAPTION>
Commitment
Bank Commitments Percentages
---- ----------- -----------
<S> <C> <C>
Morgan Guaranty Trust $75,000,000 6.250%
Company of New York
60 Wall Street
New York, New York 10260-0060
Attention: Robert M. Osieski, VP
Telecopy: (212) 648-5014
Domestic Lending Office:
Morgan Guaranty Trust
Company of New York
60 Wall Street
Attention: Loan Department
New York, New York 10260
Eurodollar Lending Office:
Morgan Guaranty Trust
Company of New York
Nassau, Bahamas Office
c/o J.P. Morgan Services, Inc.
Loan Operations - 3rd Floor
500 Stanton Christiana Road
Newark, Delaware 19713
Chemical Bank 75,000,000 6.250%
270 Park Avenue
New York, New York 10017
Attention: John C. Riordan, VP
Telecopy: (212) 270-9647
Domestic Lending Office and
Eurodollar Lending Office:
Chemical Bank
270 Park Avenue
New York, New York 10017
</TABLE>
<PAGE> 75
<TABLE>
<CAPTION>
Commitment
Bank Commitments Percentages
---- ----------- -----------
<S> <C> <C>
Bank of America Illinois 68,000,000 5.667%
335 Madison Avenue
5th Floor
New York, New York 10017
Attention: Steven Aronowitz
Telecopy: (212) 503-7771
Domestic Lending Office and
Eurodollar Lending Office:
Bank of America Illinois
231 South La Salle Street
Chicago, Illinois 60697
ABN AMRO Bank N.V., 19,000,000 1.584%
New York Branch
500 Park Avenue
2nd Floor
New York, New York 10022
Attention: Margaret P. Hannahoe,
Corporate Banking
Officer
Telecopy: (212) 832-7129
Domestic Lending Office and
Eurodollar Lending Office:
ABN AMRO Bank N.V.
New York Branch
500 Park Avenue
2nd Floor
New York, New York 10022
Nationsbank of North 54,000,000 4.500%
Carolina, N.A.
100 North Tryon Street
Charlotte, NC 28255
Attention: Lisa McClelland
Telecopy: (704) 386-8694
</TABLE>
<PAGE> 76
<TABLE>
<CAPTION>
Commitment
Bank Commitments Percentages
---- ----------- -----------
<S> <C> <C>
Domestic Lending Office and
Eurodollar Lending Office:
Nationsbank of North
Carolina, N.A.
100 North Tryon Street
Charlotte, NC 28255
Attention: Lisa McClelland
Telecopy: (704) 386-8694
With Copy to the New York Office:
NationsBank of North
Carolina, N.A.
767 Fifth Avenue
23rd Floor
New York, New York 10153
Attention: Sally L. Hazard
Telecopy: (212) 751-6909
Deutsche Bank AG 54,000,000 4.500%
New York Branch
31 West 52d Street
24th Floor
New York, New York 10019
Attention: Rolf Peter Mikolayczyk,
VP
Telecopy: (212) 474-8212
Domestic Lending Office:
Deutsche Bank AG, New York Branch
31 West 52nd Street
24th Floor
New York, New York 10019
Eurodollar Lending Office:
Deutsche Bank AG, Cayman Islands Branch
c/o Deutsche Bank AG, New York Branch
31 West 52nd Street
24th Floor
New York, New York 10019
The Industrial Bank 51,000,000 4.250%
of Japan, Limited
New York Branch
245 Park Avenue
New York, New York 10167-0037
Attention: Mr. Tomoya Aoki
Telecopy: (212) 856-9450
</TABLE>
<PAGE> 77
<TABLE>
<CAPTION>
Commitment
Bank Commitments Percentages
---- ----------- -----------
<S> <C> <C>
Domestic Lending Office and
Eurodollar Lending Office:
The Industrial Bank of Japan,
Limited, New York Branch
245 Park Avenue
New York, New York 10167-0037
Banca Commerciale Italiana 19,000,000 1.584%
New York Branch
One William Street
New York, New York 10004
Attention: Mimi Welch, AVP
Telecopy: (212) 809-2124
Domestic Lending Office and
Eurodollar Lending Office:
Banca Commerciale Italiana
New York Branch
One William Street
New York, New York 10004
The Bank of New York 51,000,000 4.250%
One Wall Street
8th Floor
New York, New York 10286
Attention: Howard F. Bascom, Jr.
Telecopy: (212) 635-1480
Domestic Lending Office and
Eurodollar Lending Office:
The Bank of New York
One Wall Street
8th Floor
New York, New York 10286
Banque Nationale de Paris 31,000,000 2.583%
499 Park Avenue
6th Floor
New York, New York 10022
Attention: Sophie Kaufman/
Walter Kaplan
Telecopy: (212) 418-8269
Domestic Lending Office and
Eurodollar Lending Office:
Banque Nationale de Paris
499 Park Avenue
6th Floor
New York, New York 10022
</TABLE>
<PAGE> 78
<TABLE>
<CAPTION>
Commitment
Bank Commitments Percentages
---- ----------- -----------
<S> <C> <C>
LTCB Trust Company 31,000,000 2.583%
165 Broadway
New York, New York 10006
Attention: Laura Buckley
Telecopy: (212) 608-3081
Domestic Lending Office and
Eurodollar Lending Office:
LTCB Trust Company
165 Broadway
New York, New York 10006
PNC Bank, National Association 51,000,000 4.250%
335 Madison Avenue
10th Floor
New York, New York 10017
Attention: Mark Williams, VP
Telecopy: (212) 557-5461
Domestic Lending Office and
Eurodollar Lending Office:
PNC Bank, National Association
5th Avenue and Wood Street
Pittsburgh, PA 15265
Royal Bank of Canada 51,000,000 4.250%
Financial Square
New York, New York 10005
Attention: Michael Korine
Telecopy: (212) 428-6459
Domestic Lending Office and
Eurodollar Lending Office:
Royal Bank of Canada
Financial Square
New York, New York 10005
Societe Generale 54,000,000 4.500%
1221 Avenue of the Americas
New York, New York 10020
Attention: Paul Dalle Molle
Telecopy: (212) 278-7430
Domestic Lending Office and
Eurodollar Lending Office:
Societe Generale
1221 Avenue of the Americas
New York, New York 10020
</TABLE>
<PAGE> 79
<TABLE>
<CAPTION>
Commitment
Bank Commitments Percentages
---- ----------- -----------
<S> <C> <C>
Credit Lyonnais 54,000,000 4.500%
New York Branch
1301 Avenue of the Americas
18th Floor
New York, New York 10019
Attention: Alex Averbukh
Telecopy: (212) 459-3179
Domestic Lending Office:
Credit Lyonnais
New York Branch
1301 Avenue of the Americas
18th Floor
New York, New York 10019
Eurodollar Lending Office:
Credit Lyonnais
Cayman Island Branch
c/o Credit Lyonnais
New York Branch
1301 Avenue of the Americas
18th Floor
New York, New York 10019
Mellon Bank, N.A. 51,000,000 4.250%
3 Mellon Bank Center
Room # 153-2332
Pittsburgh, Pennsylvania 15258
Attention: F. Lindsay, Loan Admin.
Telecopy: (412) 236-2028
with a copy for credit purposes to:
Mellon Bank, N.A.
Mellon Financial Services
65 East 55th Street
15th Floor
New York, New York 10022-3219
Attention: David Smith
Telecopy: (212) 702-5269
Domestic Lending Office and
Eurodollar Lending Office:
Mellon Bank, N.A.
3 Mellon Bank Center
Room # 153-2332
Pittsburgh, Pennsylvania 15258
</TABLE>
<PAGE> 80
<TABLE>
<CAPTION>
Commitment
Bank Commitments Percentages
---- ----------- -----------
<S> <C> <C>
National City Bank 23,000,000 1.917%
National City Center
10th Floor
1900 E. 9th Street
Cleveland, Ohio 44114
Attention: Renold D. Thompson, Jr.,
VP
Telecopy: (216) 575-9396
Domestic Lending Office and
Eurodollar Lending Office:
National City Bank
National City Center
10th Floor
1900 E. 9th Street
Cleveland, Ohio 44114
The Nippon Credit Bank, LTD. 31,000,000 2.583%
New York Branch
245 Park Avenue
30th Floor
New York, New York 10167
Attention: Elizabeth Tarbell
Telecopy: (212) 490-3895
Domestic Lending Office and
Eurodollar Lending Office:
The Nippon Credit Bank, LTD.
New York Branch
245 Park Avenue
30th Floor
New York, New York 10167
The Chase Manhattan Bank, N.A. 43,000,000 3.583%
One Chase Manhattan Plaza
5th Floor
New York, New York 10081
Attention: Richard C. Smith
Telecopy: (212) 552-1457
Domestic Lending Office and
Eurodollar Lending Office:
The Chase Manhattan Bank, N.A.
One Chase Manhattan Plaza
5th Floor
New York, New York 10081
</TABLE>
<PAGE> 81
<TABLE>
<CAPTION>
Commitment
Bank Commitments Percentages
---- ----------- -----------
<S> <C> <C>
The Fuji Bank, Limited 39,000,000 3.250%
New York Branch
2 World Trade Center
79th Floor
New York, New York 10048
Attention: Raymond Ventura
Telecopy: (212) 912-0516
Domestic Lending Office and
Eurodollar Lending Office:
The Fuji Bank, Limited
New York Branch
2 World Trade Center
New York, New York 10048
The Sanwa Bank Limited 27,000,000 2.250%
55 East 52nd Street
24th Floor
New York, New York 10055
Attention: Dominic Sorresso
Telecopy: (212) 754-1304
Domestic Lending Office and
Eurodollar Lending Office:
The Sanwa Bank Limited
55 East 52nd Street
24th Floor
New York, New York 10055
Sumitomo Bank, Limited 39,000,000 3.250%
277 Park Avenue
New York, New York 10172
Attention: Hiro Hyakutome
Telecopy: (212) 224-5197
Domestic Lending Office and
Eurodollar Lending Office:
Sumitomo Bank, Limited
New York Branch
277 Park Avenue
New York, New York 10172
Wells Fargo Bank, N.A. 43,000,000 3.583%
Corporate Banking
420 Montgomery Street
MAC #0101-091
San Francisco, California 94163
Attention: Kathleen Harrison
Vice President
Telecopy: (415) 421-1352
</TABLE>
<PAGE> 82
<TABLE>
<CAPTION>
Commitment
Bank Commitments Percentages
---- ----------- -----------
<S> <C> <C>
Domestic Lending Office:
Wells Fargo Bank, N.A.
Corporate Banking
420 Montgomery Street
MAC #0101-091
San Francisco, California 94163
Eurodollar Lending Office:
Wells Fargo Bank, N.A.
Corporate Banking
Attention: Lupe Barajas
420 Montgomery Street
MAC #0101-091
San Francisco, California 94163
Bayerische Landesbank 27,000,000 2.250%
Girozentrale
560 Lexington Avenue
22nd Floor
New York, New York 10022
Attention: Joanne Cicino
Telecopy: (212) 310-9868
Domestic Lending Office:
Bayerische Landesbank
Girozentrale
560 Lexington Avenue
22nd Floor
New York, New York 10022
Eurodollar Lending Office:
Bayerische Landesbank
Girozentrale
Cayman Islands Branch
560 Lexington Avenue
22nd Floor
New York, New York 10022
Canadian Imperial Bank of 43,000,000 3.583%
Commerce, (New York Agency)
425 Lexington Avenue
6th Floor
New York, New York 10017
Attention: Dean Criares
Telecopy: (212) 856-3991
</TABLE>
<PAGE> 83
<TABLE>
<CAPTION>
Commitment
Bank Commitments Percentages
---- ----------- -----------
<S> <C> <C>
Domestic Lending Office and
Eurodollar Lending Office:
Two Paces West
2727 Paces Ferry Road
Suite 1200
Atlanta, Georgia 30339
Credit Suisse 39,000,000 3.250%
12 East 49th Street
44th Floor
New York, New York 10017
Attention: Chris Horgan
Telecopy: (212) 238-5439
Domestic Lending Office and
Eurodollar Lending Office:
Credit Suisse
12 East 49th Street
44th Floor
New York, New York 10017
The Mitsubishi Bank, Limited, 39,000,000 3.250%
New York Branch
225 Liberty Street
Two World Financial Center
New York, New York 10281
Attention: Mr. J. Bruce Meredith
Senior Vice President
Telecopy: (212) 667-3562
Domestic Lending Office and
Eurodollar Lending Office:
The Mitsubishi Bank, Limited
225 Liberty Street
Two World Financial Center
New York, New York 10281
The Bank of Nova Scotia 18,000,000 1.500%
One Liberty Plaza
26th Floor
New York, New York 10006
Attention: Leslie Colin
Telecopy: (212) 225-5090
</TABLE>
<PAGE> 84
<TABLE>
<CAPTION>
Commitment
Bank Commitments Percentages
---- ----------- -----------
<S> <C> <C>
Domestic Lending Office and
Eurodollar Lending Office:
The Bank of Nova Scotia
One Liberty Plaza
26th Floor
New York, New York 10006
-------------- -------
$1,200,000,000 100.000%
============== =======
</TABLE>
<PAGE> 1
EXHIBIT 11.1
LORAL CORPORATION AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER COMMON SHARE
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
DECEMBER 31,
-------------------
1994 1993
------- -------
<S> <C> <C>
Primary:
Net income applicable to common shares................................. $71,003 $56,945
======= =======
Shares:
Weighted average common shares outstanding.......................... 84,044 82,583
Common equivalent shares applicable to stock options................ 1,488 1,305
------- -------
Average number of shares outstanding and common equivalent shares... 85,532 83,888
======= =======
Primary earnings per common share and common equivalent share............ $ .83 $ .68
======= =======
Fully Diluted:
Net income applicable to common shares................................. $71,003 $56,945
======= =======
Shares:
Average number of common shares as adjusted for primary
computation........................................................ 85,532 83,888
Incremental increase to shares under stock options where the
quarter's ending market price is higher than the average market
price during the quarter........................................... 225
------- -------
Average number of shares outstanding on a fully diluted basis....... 85,532 84,113
======= =======
Earnings per common share assuming full dilution......................... $ .83 $ .68
======= =======
</TABLE>
11
<PAGE> 1
EXHIBIT 11.2
LORAL CORPORATION AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER COMMON SHARE
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(Unaudited)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
DECEMBER 31,
-----------------------
1994 1993
-------- --------
<S> <C> <C>
Primary:
Net income applicable to common shares............................. $192,220 $144,013
======== ========
Shares:
Weighted average common shares outstanding...................... 83,680 82,475
Common equivalent shares applicable to stock options............ 1,454 1,169
-------- --------
Average number of shares outstanding and common equivalent
shares......................................................... 85,134 83,644
======== ========
Primary earnings per common share and common equivalent share........ $ 2.26 $ 1.72
======== ========
Fully Diluted:
Net income applicable to common shares............................. $192,220 $144,013
======== ========
Shares:
Average number of common shares as adjusted for primary
computation.................................................... 85,134 83,644
Incremental increase to shares under stock options where the
quarter's ending market price is higher than the average market
price during the quarter....................................... 22 125
-------- --------
Average number of shares outstanding on a fully diluted basis... 85,156 83,769
======== ========
Earnings per common share assuming full dilution..................... $ 2.26 $ 1.72
======== ========
</TABLE>
12
<PAGE> 1
EXHIBIT 12
LORAL CORPORATION AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(IN THOUSANDS, EXCEPT RATIOS)
(Unaudited)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
DECEMBER 31,
-----------------------
1994 1993
-------- --------
<S> <C> <C>
Earnings:
Income before taxes and equity in net income (loss) of
affiliates...................................................... $319,116 $225,119
Add:
Interest expense................................................ 80,210 25,249
Amortization of debt expense.................................... 651 206
Amortization of capitalized interest............................ 858 1,064
Interest component of rent expense.............................. 19,350 12,555
-------- --------
Earnings........................................................... $420,185 $264,193
======== ========
Fixed charges:
Interest expense................................................... $ 80,210 $ 25,249
Amortization of debt expense....................................... 651 206
Capitalized interest............................................... 188 181
Interest component of rent expense................................. 19,350 12,555
-------- --------
Fixed charges...................................................... $100,399 $ 38,191
======== ========
Ratio of earnings to fixed charges................................... 4.19x 6.92x
======== ========
</TABLE>
13
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF LORAL CORPORATION FOR THE NINE MONTHS ENDED
DECEMBER 31, 1994, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAR-31-1995
<PERIOD-END> DEC-31-1994
<CASH> 198,396
<SECURITIES> 0
<RECEIVABLES> 1,071,233
<ALLOWANCES> 0
<INVENTORY> 326,553
<CURRENT-ASSETS> 1,700,538
<PP&E> 1,988,834
<DEPRECIATION> 756,723
<TOTAL-ASSETS> 4,918,220
<CURRENT-LIABILITIES> 1,045,070
<BONDS> 1,421,095
<COMMON> 21,311
0
0
<OTHER-SE> 1,555,232
<TOTAL-LIABILITY-AND-EQUITY> 4,918,220
<SALES> 4,025,035
<TOTAL-REVENUES> 4,043,370
<CGS> 3,643,393
<TOTAL-COSTS> 3,643,393
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 80,861
<INCOME-PRETAX> 319,116
<INCOME-TAX> 121,264
<INCOME-CONTINUING> 197,852
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 192,220
<EPS-PRIMARY> 2.26
<EPS-DILUTED> 2.26
</TABLE>
