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FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 29549
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1994
or
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________________ to ______________________
For Quarter Ended March 31, 1994
Commission File Number 1-3229
NORTHROP CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE No. 95-1055798
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1840 Century Park East, Los Angeles, California 90067
(address of principal executive offices)
(310) 553-6262
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes x No
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Common Stock outstanding as of April 30, 1994 49,137,871 shares
Part I. Financial Information
Item 1. Financial Statements
SELECTED INDUSTRY SEGMENT INFORMATION Northrop Corporation and Subsidiaries
Three months ended March 31
$ in millions 1994 1993
Net Sales:
Aircraft $ 974 $1,049
Electronics 160 177
Missiles and Unmanned Vehicle Systems 88 59
Services 20 19
Intersegment sales (24) (29)
$1,218 $1,275
Operating Profit(Loss):
Aircraft $ 78 $ 105
Electronics 16 17
Missiles and Unmanned Vehicle Systems 3 (12)
Services 1
Total operating profit 98 110
Adjustments to reconcile
operating profit to operating margin:
Other deductions(income) included above 1 (1)
State and local income taxes (3) (9)
General corporate expenses (23) (28)
Corporate retiree benefit income 10 11
Operating margin $ 83 $ 83
Contract Acquisitions:
Aircraft $3,130 $1,001
Electronics 141 128
Missiles and Unmanned Vehicle Systems 62 137
Services 10 14
Intersegment acquisitions (36) (22)
$3,307 $1,258
Funded Order Backlog:
Aircraft $7,806 $5,951
Electronics 742 684
Missiles and Unmanned Vehicle Systems 501 527
Services 33 42
Intersegment backlog (74) (46)
$9,008 $7,158
I-1
CONSOLIDATED CONDENSED STATEMENTS Northrop Corporation and Subsidiaries
OF OPERATIONS
Three months ended March 31
$ in millions, except per share 1994 1993
Net Sales $1,218 $1,275
Cost of sales
Operating costs 1,019 1,074
Administrative and general expenses 116 118
Operating margin 83 83
Interest income 1 1
Other, net 4
Interest expense (5) (10)
Income before income taxes 79 78
Federal and foreign income taxes 27 26
Net income $ 52 $ 52
Weighted average shares outstanding,
in millions 49.1 47.4
Earnings per share $1.05 $1.09
Dividends per share $ .40 $.40
I-2
CONSOLIDATED CONDENSED STATEMENTS Northrop Corporation and Subsidiaries
OF CHANGES IN SHAREHOLDERS' EQUITY
Three months ended March 31
$ in millions 1994 1993
Paid-in Capital:
At beginning of year $ 256 $ 207
Employee stock awards and options
exercised, net of forfeitures 5 2
$ 261 $ 209
Retained Earnings:
At beginning of year $1,070 $1,051
Net income 52 52
Cash dividends (20) (19)
$1,102 $1,084
Unvested Employee Restricted Award Shares:
At beginning of year $ (2) $ (2)
Amortization 1
$ (1) $ (2)
Unfunded pension losses, net of taxes $ (2) $ (2)
I-3
CONSOLIDATED CONDENSED STATEMENTS Northrop Corporation and Subsidiaries
OF FINANCIAL POSITION
March 31 December 31
$ in millions 1994 1993
Assets:
Cash and cash equivalents $ 206 $ 100
Accounts receivable, net of progress payments
of $1,865 in 1994 and $2,410 in 1993 812 820
Inventoried costs, net of progress payments
of $290 in 1994 and $326 in 1993 564 569
Deferred state income taxes 45 46
Prepaid expenses 22 25
Total current assets 1,649 1,560
Property, plant and equipment 2,796 2,789
Accumulated depreciation and amortization (1,798) (1,773)
998 1,016
Prepaid pension cost and intangible
pension asset 298 278
Investments in and advances to
affiliates and sundry assets 83 78
Deferred state income taxes 7 7
388 363
$ 3,035 $ 2,939
I-4
March 31 December 31
$ in millions 1994 1993
Liabilities and Shareholders' Equity:
Trade accounts payable $ 294 $ 324
Accrued employees' compensation 159 146
Income taxes payable, including deferred
income taxes of $445 in 1994 and
$426 in 1993 462 438
Other current liabilities 212 171
Total current liabilities 1,127 1,079
Long-term debt 160 160
Accrued retiree benefits 318 308
Deferred gain on sale/leaseback 22 23
Deferred income taxes 48 47
Paid-in capital
Preferred stock, 10,000,000 shares
authorized and none issued
Common stock, 200,000,000 shares
authorized; issued and outstanding:
1994 -- 49,135,271; 1993 -- 48,913,403 261 256
Retained earnings 1,102 1,070
Unvested employee restricted award shares (1) (2)
Unfunded pension loss, net of taxes (2) (2)
1,360 1,322
$ 3,035 $ 2,939
I-5
CONSOLIDATED CONDENSED STATEMENTS Northrop Corporation and Subsidiaries
OF CASH FLOWS
Three months ended March 31
$ in millions 1994 1993
Operating Activities
Sources of Cash
Cash received from customers
Progress payments $ 581 $ 462
Other collections 625 680
Interest received 1
Other cash receipts 1 1
Cash provided by operating activities 1,207 1,144
Uses of Cash
Cash paid to suppliers and employees 1,052 1,083
Interest paid 1 1
Income taxes paid 4 2
Other cash payments 1
Cash used in operating activities 1,057 1,087
Net cash provided by operating activities 150 57
Investing Activities
Additions to property, plant and equipment (25) (34)
Proceeds from sale of affiliate 3
Investments in affiliates (1)
Other investing activities (4)
Net cash used in investing activities (29) (32)
Financing Activities
Repayment of borrowings under lines of credit (100)
Principal payments of long-term debt/capital leases (40)
Proceeds from issuance of stock 5
Dividends paid (20) (19)
Net cash used in financing activities (15) (159)
Increase(decrease) in cash and cash equivalents 106 (134)
Cash and cash equivalents balance at
beginning of period 100 230
Cash and cash equivalents balance at end of period $ 206 $ 96
I-6
Three months ended March 31
$ in millions 1994 1993
Reconciliation of Net Income to Net Cash
Provided by Operating Activities
Net income $ 52 $ 52
Adjustments to reconcile net income
to net cash provided
Depreciation and amortization 42 33
Common stock issued to employees 2
Loss on disposals of property,
plant and equipment 1 1
Non-cash retiree benefit income (6) (9)
Amortization of deferred gain on sale/leaseback (1)
Gain on sale of affiliate (2)
Decrease(increase) in
Accounts receivable 568 9
Inventoried costs 42 25
Increase(decrease) in
Progress payments (581) (126)
Accounts payable and accruals 30 46
Provisions for contract losses (20) (1)
Income taxes 25 33
Other non-cash transactions (2) (6)
Net cash provided by operating activities $ 150 $ 57
I-7
NOTES TO CONSOLIDATED CONDENSED Northrop Corporation and Subsidiaries
FINANCIAL STATEMENTS
Basis of Presentation
The accompanying unaudited consolidated condensed financial statements
have been prepared by management in accordance with the instructions to
Form 10-Q of the Securities and Exchange Commission. They do not
include all information and notes necessary for a complete presentation
of financial position, results of operations, changes in shareholders'
equity, and cash flows in conformity with generally accepted accounting
principles. They do, however, in the opinion of management, include all
adjustments (all of which were normal recurring accruals) necessary for
a fair statement of the results for the periods presented. The
financial statements should be read in conjunction with the Notes,
Operations Review, and Independent Auditors' Report contained in the
company's 1993 Annual Report.
Inventories
The company's inventories consist primarily of work in process related
to long-term contracts with customers; therefore further breakdown is
considered inapplicable.
Subsequent Events
In April 1994, following a tender offer pursuant to an Agreement and
Plan of Merger, the company began the process to purchase the
outstanding common stock of Grumman Corporation at a cost of about $2.17
billion. Grumman Corporation produces aerospace products, electronics
systems and special purpose vehicles, and provides electronic data
processing and other services. Reporting on a consolidated basis for
Northrop Grumman will begin with the second quarter 1994.
Also in April 1994, the company replaced its existing $400 million
credit agreement with a new credit agreement with a group of domestic
and foreign banks. The new Senior Credit Facility provides for two
credit facilities: $600 million available on a revolving credit basis
through March 1999 and, to finance the acquisition of Grumman, a
floating interest rate $2,200 million term loan due in 18 quarterly
installments of $110 million and a final installment of $220 million due
in March 1999. Grumman shares will serve as collateral under the new
Senior Credit Facility. The company will pay, quarterly, a facility fee
and, at least quarterly, interest based on the company's leverage ratio
and oustanding debt. In the event of a "change in control" the banks
are relieved of their commitments. Compensating balances are not
required.
The new credit agreement contains restrictions including those
relating to the payment of dividends, acquisition of the company's
stock, aggregate indebtedness for borrowed money, interest coverage and
the maintenance of shareholders' equity.
I-8
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE COMPANY'S FINANCIAL
CONDITION AND THE RESULTS OF ITS OPERATIONS
Sales were 4 percent lower in the first quarter of 1994 versus the first
quarter of 1993. Increases in the missiles and unmanned vehicle systems
(MUVS) and services segment sales were more than offset by decreases in
electronics and aircraft segments. Sales increased in the MUVS segment,
where revenue on the AGM-137 Tri-Service Standoff Attack Missile (TSSAM)
was higher than a year ago, when there was an unusually low level of
subcontractor activity with Northrop, the prime contractor.
Aircraft segment sales in the first quarter decreased because of
lower overall B-2 revenue and fewer F/A-18 C/D and 747 shipset
deliveries, which more than offset higher revenue on the F/A-18 E/F
development program.
Sales by major program and units delivered in the first quarter
were:
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ in millions 1994 1993
B-2 $ 674 $ 743
F/A-18C/D 80 95
F/A-18E/F 107 44
747 100 151
ECM 92 88
AGM-137 67 45
BAT 21 28
All other 77 81
$1,218 $1,275
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Units
1994 1993
F/A-18C/D 12 14
747 9 16
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The amount and the rate of operating profit decreased in the
aircraft segment in the first quarter of 1994 compared with last year's
first quarter. All three of the company's major aircraft production
programs -- B-2, F/A-18 and 747 - contributed to this unfavorable
operating profit comparison. Lower sales volume, including no B-2
deliveries in this year's first quarter, caused much of the aircraft
segment decline in operating profit. Lower negotiated rates of margin
on recent orders for subcontract work also contributed to the decline.
I-9
The MUVS loss in the first quarter of 1993 arose from an $18
million loss provision made for the AGM-137 TSSAM development program to
cover the additional costs estimated for its completion. In the targets
area lower margins were earned on higher sales in the first quarter of
1994 versus the first quarter of 1993.
Interest expense in the first quarter of 1994 was $5 million lower
than in the corresponding quarter of 1993, following the $255 million
decline in average debt outstanding between the two years' first
quarters.
During the first quarter, $150 million of cash was generated from
operations, versus $57 million in last year's first quarter, and was
more than sufficient to finance capital expenditures and dividends. The
company's liquidity and financial flexibility will be provided by cash
flow generated from operating activities, supplemented by the unused
borrowing capacity available under the recently negotiated $600-million
revolving credit facility and other short-term credit facilities. The
revolving credit facility, combined with a $2.2 billion term loan
facility comprise the new $2.8 billion Senior Credit Facility negotiated
in April 1994. The purpose of the five-year term loan is to finance the
tender offer and purchase of Grumman Corporation's outstanding common
stock pursuant to an Agreement and Plan of Merger. With more than 93
percent of Grumman's stock now purchased, the acquisition is expected to
be consummated during the second quarter of 1994 with the reporting of
consolidated financial statements to begin with the second quarter.
I-10
Part II OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit 10. Northrop Corporation Amended and Restated
Credit Agreement, dated as of April 15, 1994,
Amended and Restated as of April 18, 1994
Exhibit 11. Statement re Computation of Per Share Earnings
(b) A report on Form 8-K was filed with the Securities and
Exchange Commission on March 25, 1994 regarding an amendment
to the Company's Bylaws.
(c) A report on Form 8-K was filed with the Securities and
Exchange Commission on May 2, 1994 regarding the purchase of
Grumman Corporation.
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.
Northrop Corporation (Registrant)
Date: May 9, 1994
&&PINAZ2928
Nelson F. Gibbs
Vice President and Controller
Date: May 9, 1994 &&PINAD1368
Sheila M. Gibbons
Vice President and Secretary
II-1
Northrop Corporation and Subsidiaries
EXHIBIT 11
STATEMENT RE COMPUTATION OF PER SHARE EARNINGS
(in thousands, except per share)
Three months ended
March 31
1994 1993
Primary:
Average shares outstanding. . . . . . . . . . . . . . 49,051 47,447
Common stock equivalents. . . . . . . . . . . . . . . . 733 806
Totals . . . . . . . . . . . . . . . . . . . 49,784 48,253
Net income . . . . . . . . . . . . . . . . . . . . . . $51,643 $51,588
Earnings per share(1) . . . . . . . . . . . . . . . . $ 1.04 $ 1.07
Fully diluted:
Average shares outstanding. . . . . . . . . . . . . . 49,051 47,447
Common stock equivalents. . . . . . . . . . . . . . . 755 995
Totals . . . . . . . . . . . . . . . . . . 49,806 48,442
Net income . . . . . . . . . . . . . . . . . . . . . $51,643 $51,588
Earnings per share(1) . . . . . . . . . . . . . . . .. $ 1.04 $ 1.06
_____________
(1) This calculation was made in compliance with Item 601 of Regulation S-K.
Earnings per share presented elsewhere in this report exclude from their
calculation shares issuable under employee stock options, since their dilutive
effect is less than 3%.
NORTHROP CORPORATION
AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of April 15, 1994
Amended and Restated as of April 18, 1994
$2,800,000,000
THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION)
and
CHEMICAL BANK,
as Co-Agents
THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION),
as Administrative Agent
[Exhibits B-1, B-2, B-3, C, E and F Have
been Conformed to Appear as Delivered]
TABLE OF CONTENTS
Section 1. Definitions and Accounting Matters . . . . . . . . . . . .
1.01 Certain Defined Terms. . . . . . . . . . . . . . . . . . . . . .
1.02 Accounting Terms and Determinations. . . . .. . . . . . . . . . .
1.03 Classes and Types of Loans . . . . . . . . . . . . .
Section 2. Commitments. . . . . . . . . . . . . . . . .. . . . . . . .
2.01 Syndicated Loans . . . . . . . . . . . . . . . . . . . . . . . . .
2.02 Borrowings of Syndicated Loans . . . . . . . . . . . . . . . . . .
2.03 Competitive Bid Loans. . . . . . . . . . . . .. . . . . . . . . . .
2.04 Changes of Commitments . . . . . . . . . . . .. . . . . . . . . . .
2.05 Fees . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . .
2.06 Lending Offices. . . . . . . . . . . . . . . . . . . . . . . . . .
2.07 Several Obligations; Remedies Independent. . . . . . . . . . . . .
2.08 Notes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..
2.09 Optional Prepayments and Conversions or Continuations of
Loans. . . . . . . . . . . . . . . . . . . . .. . . . .
2.10 Mandatory Prepayments. . . . . . . . . . . . . . . . . . . . . . .
Section 3. Payments of Principal and Interest . . . . . . . . . . . . .
3.01 Repayment of Loans . . . . . . . . . . . . . . . . . . . . . . . ..
3.02 Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..
Section 4. Payments; Pro Rata Treatment; Computations;
Etc. . . . . . . . . . . . . . . . . . . . . . . . . . .
4.01 Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.02 Pro Rata Treatment . . . . . . . . . . . . . . . . . . . . . . . .
4.03 Computations . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.04 Non-Receipt of Funds by the Administrative Agent . . . . . . .
4.05 Sharing of Payments, Etc.. . . . . . . . . . . . . . . . . . . .
4.06 Minimum Amounts. . . . . . . . . . . . . . . . . . . . . . . . .
4.07 Certain Notices. . . . . . . . . . . . . . . . . . . . . . . . .
Section 5. Yield Protection and Illegality. . . . . . . . . . . . . . . .
5.01 Additional Costs . . . . . . . . . . . . . . . . . . . . . . . . . .
5.02 Limitation on Types of Loans . . . . . . . . . . . .
5.03 Illegality . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.04 Base Rate Loans Pursuant to Sections 5.01 and 5.03 . . . . . . . . .
5.05 Compensation . . . . . . . . . . . . . . . . . . . .
Section 6. Conditions Precedent . . . . . . . . . . . . . . . . . . . . .
6.01 Initial Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6.02 Subsequent Loans . . . . . . . . . . . . . . . . . .
6.03 Conditions Precedent to the Loans from the Merger Effective
Rate . . . . . . . . . . . . . . . . . . . . . . . . . . .
6.04 Initial and Subsequent Loans . . . . . . . . . . . . . . . . . . . ..
Section 7. Representations and Warranties . . . . . . . . . . . . . . . . .
7.01 Corporate Existence. . . . . . . . . . . . . . . . . . . . . . . . . .
7.02 Financial Condition. . . . . . . . . . . . . . . . . . . . . . . . . .
7.03 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7.04 No Breach. . . . . . . . . . . . . . . . . . . . .
7.05 Corporate Action . . . . . . . . . . . . . . . . . . . . . . . . . .
7.06 Approvals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7.07 Use of Proceeds, Etc.. . . . . . . . . . . . . . . . . . . . . . . . .
7.08 ERISA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7.09 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7.10 Funded Debt. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7.11 Properties . . . . . . . . . . . . . . . . . . . .
7.12 Environmental Matters. . . . . . . . . . . . . . . . . . . . . . .
7.13 True and Complete Disclosure . . . . . . . . . . . . . . . . . . . .
7.14 Offer to Purchase. . . . . . . . . . . . . . . . . . . . . . . . . .
7.15 Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7.16 Acquisition Intangibles. . . . . . . . . . . . . . . . . . . . . .
Section 8. Covenants of the Company . . . . . . . . . . . . . . . . . .
8.01 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . .
8.02 Existence, Payment of Taxes, ERISA, Etc. . . . . . . . . . . . . . .
8.03 Notice of Litigation . . . . . . . . . . . . . . . . . . . . . . . .
8.04 Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8.05 Access to Books and Properties . . . . . . . . . . . . . . . . . . .
8.06 Restricted Payments. . . . . . . . . . . . . . . . . . . . . . . . .
8.07 Sale, Lease, Etc.. . . . . . . . . . . . . . . . . . . . . . . . . .
8.08 Maintenance of Shareholders' Equity. . . . . . . . . . . . . . . ..
8.09 Contingent Liabilities . . . . . . . . . . . . . . . . . . . . . .
8.10 Acquisition of Assets. . . . . . . . . . . . . . . . . . . . . . .
8.11 Limitation on Liens. . . . . . . . . . . . . . . . . . . . . . . .
8.12 Loans and Investments. . . . . . . . . . . . . . . . . . . . . . .
8.13 Limitation on Funded Debt. . . . . . . . . . . . . . . . . . . . .
8.14 Limitation on Subsidiary Debt. . . . . . . . . . . . . . . . . . .
8.15 Interest Coverage Ratio. . . . . . . . . . . . . . . . . . . . . .
8.16 Use of Proceeds. . . . . . . . . . . . . . . . . . . . . . . . . .
8.17 Margin Stock . . . . . . . . . . . . . . . . . . . . . . . . . . .
8.18 Purchaser Indebtedness . . . . . . . . . . . . . . . . . . . . . .
8.19 Merger, Control, Etc.. . . . . . . . . . . . . . . . . . . . . . .
8.20 Interest Rate Protection Agreements. . . . . . . . . . . . . . . .
Section 9. Events of Default. . . . . . . . . . . . . . . . . . . . . .
Section 10. The Administrative Agent. . . . . . . . . . . . . . . . .
10.01 Appointment, Powers and Immunities. . . . . . . . . . . . . . . .
10.02 Reliance by Administrative Agent. . . . . . . . . . . . . . . . .
10.03 Defaults. . . . . . . . . . . . . . . . . . . . . . . . . . . .
10.04 Rights as a Bank. . . . . . . . . . . . . . . . . . . . . . . . .
10.05 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . .
10.06 Non-Reliance on Administrative Agent and other Banks. . . . . . .
10.07 Failure to Act. . . . . . . . . . . . . . . . . . . . . . . . . .
10.08 Resignation or Removal of Administrative Agent. . . . . . . . . .
10.09 Consents under Other Credit Documents . . . . . . . . . . . . . .
10.10 Co-Agents . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Section 11. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . .
11.01 Waiver. . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..
11.02 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
11.03 Expenses, Etc.. . . . . . . . . . . . . . . . . . . .
11.04 Amendments, Etc.. . . . . . . . . . . . . . . . . . . . . . . . .
11.05 Successors and Assigns. . . . . . . . . . . . . . . . . . . . . ..
11.06 Assignments and Participations. . . . . . . . . . . . . . . . . . .
11.07 Survival. . . . . . . . . . . . . . . . . . . . . . . . . . . . .. .
11.08 Captions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
11.09 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . .
11.10 Governing Law; Submission to Jurisdiction; Waiver of
Trial. . . . . . . . . . . . . . . . . . . . . . . . . .
11.11 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . .
11.12 Cancellation of Existing Northrop Credit Agreement. . . . . . . . .
11.13 Amendment Effective Date. . . . . . . . . . . . . . . . . . . . . .
SCHEDULE I - Commitments
SCHEDULE II - Refinanced Indebtedness
SCHEDULE III - Litigation
EXHIBIT A-1 - Form of Term Note
EXHIBIT A-2 - Form of Revolver Note
EXHIBIT A-3 - Form of Competitive Bid Note
EXHIBIT B-1 - Form of Opinion of Sheppard, Mullin, Richter &
Hampton, Special Counsel to the Company
EXHIBIT B-2 - Form of Opinion of Gibson, Dunn & Crutcher,
Special Counsel of the Company
EXHIBIT B-3 - Form of Opinion of General Counsel of the Company
EXHIBIT B-4 - Form of Opinion of Sheppard, Mullin, Richter &
Hampton, Special Counsel to the Company
EXHIBIT B-5 - Form of Opinion of Gibson, Dunn & Crutcher,
Special Counsel to the Company
EXHIBIT B-6 - Form of Opinion of General Counsel of Grumman
EXHIBIT C - Form of Opinion of Milbank, Tweed, Hadley &
McCloy Special New York Counsel to the Banks
EXHIBIT D - Form of Confidentiality Agreement
EXHIBIT E - Form of Pledge Agreement
EXHIBIT F - Form of Subsidiary Guaranty
AMENDED AND RESTATED CREDIT AGREEMENT dated as of April 15,
1994, as amended and restated as of April 18, 1994, among:
NORTHROP CORPORATION, a corporation duly organized and validly
existing under the laws of the State of Delaware (together with
its successors and permitted assigns, the "Company"); each of the
banks that is a signatory hereto (together with its successors
and permitted assigns, individually, a "Bank" and, collectively,
the "Banks"); and THE CHASE MANHATTAN BANK (NATIONAL
ASSOCIATION), as administrative agent for the Banks (in such
capacity, together with its successors in such capacity, the
"Administrative Agent").
The Company, certain of the Banks and the Administrative
Agent are party to the Credit Agreement dated as of April 15,
1994 (as in effect immediately prior to the amendment effective
date referred to in Section 11.13 hereof, the "Original Credit
Agreement"). The parties hereto wish to amend and restate the
Original Credit Agreement for the purpose, among others, of
adding additional Banks. Accordingly, the parties hereto hereby
agree to amend and restate the Original Credit Agreement so that,
as amended and restated, it reads in its entirety as herein
provided.
Section 1. Definitions and Accounting Matters.
1.01 Certain Defined Terms. As used herein, the following
terms shall have the following meanings (all terms defined in
this Section 1 or in other provisions of this Agreement in the
singular to have the same meanings when used in the plural and
vice versa):
"Acquisition" shall mean the acquisition directly or indirectly
by the Company of all of the Shares pursuant to the Tender Offer,
the Merger and otherwise.
"Acquisition Intangibles" shall mean assets arising out of the
Acquisition that should, in accordance with GAAP, be classified
as intangibles, including but not limited to goodwill, patents,
franchises, trade-marks, tradenames, copyrights and other
Acquisition intangibles.
"Additional Tender Offer Documents" shall mean all amendments and
exhibits to, and documents related to, the Tender Offer Documents
filed directly or indirectly by the Company with the SEC under
the Exchange Act, or distributed by the Company to the
stockholders of Grumman, in each case to the extent delivered to
the Banks after the date of this Agreement and shall include any
Merger Documents delivered to the Banks after the date of this
Agreement.
"Applicable Facility Fee Rate" with respect to the Revolving
Credit Commitments, and "Applicable Margin" for each Type of
Syndicated Loan, shall mean: (a) during the period from the date
of this Agreement to but excluding the date on which the
Administrative Agent shall have received (i) the financial
statements described in Section 8.01(b) hereof for the Company's
fiscal quarter ended June 30, 1994 and (ii) the certificate
required to be delivered under Section 8.01(h) hereof, the
Applicable Facility Fee Rate shall be 0.2500%, the Revolving Loan
Applicable Margin for Base Rate Loans shall be 0% and for
Eurodollar Loans shall be 0.5000% and the Term Loan Applicable
Margin for Base Rate Loans shall be 0% and for Eurodollar Loans
shall be 0.7500%, (b) during the period from the date on which
the Administrative Agent shall have received the financial
statements and the certificate referred to in clause (a) above to
December 31, 1994, the respective rates set forth opposite the
range of the Leverage Ratio set forth below which encompasses the
Leverage Ratio set forth in such certificate and (c) during each
Quarterly Period occurring after December 31, 1994, provided that
the Administrative Agent shall have received (i) the financial
statements described in Section 8.01 hereof as at and for the
fiscal period ending on the preceding Quarterly Date and (ii) the
certificate required to be delivered under Section 8.01(h)
hereof, the respective rates set forth below opposite the range
of the Leverage Ratio set forth below which encompasses the
Leverage Ratio set forth in such certificate delivered under
Section 8.01(h) hereof (provided, further, that if the Company
shall fail to deliver such financial statements and certificate,
the "Applicable Facility Fee Rate" with respect to the Revolving
Credit Commitments, and the "Applicable Margin" for each Type of
Syndicated Loan, during such Quarterly Period shall be determined
as if the relevant Leverage Ratio were greater than 65%):
Revolving Credit Commitments Term Loan Commitments
Applicable Margin Applicable Margin
Applicable
Range of Facility Base Rate Eurodollar Base Rate Eurodollar
Leverage Ratio Fee Rate Loan Loan Loan Loan
Greater than 0.2500% 0% 0.5000% 0% 0.7500%
or equal to 65%
Less than 65% 0.2000% 0% 0.4250% 0% 0.6250%
but greater than
or equal to 55%
Less than 55% 0.2000% 0% 0.3750% 0% 0.5750%
but greater than
or equal to 45%
Less than 45% 0.1875% 0% 0.3000% 0% 0.4875%
but greater than
or equal to 30%
Less than 30% 0.1250% 0% 0.2500% 0% 0.3750%
provided that, if the Company receives a rating of the Company's
senior unsecured long term public debt from Moody's Investors
Service, Inc. (or any successor thereto) and/or Standard & Poor's
Corporation (or any successor thereto), then during any such
period that neither of such ratings are Baa3 and BBB-,
respectively, or above, the Applicable Facility Fee Rate shall be
0.2500% and the Applicable Margin for Eurodollar Loans shall be
0.7500% for Revolving Loans and 1.0000% for Term Loans.
"Applicable Lending Office" shall mean, for each Bank and for
each Type of Loan, the "Lending Office" of such Bank (or of an
affiliate of such Bank) designated for such Type of Loan on the
signature pages hereof or such other office of such Bank (or of
an affiliate of such Bank) as such Bank may from time to time
specify to the Administrative Agent and the Company as the office
by which its Loans of such Type are to be made and maintained.
"Bankruptcy Code" shall mean the Federal Bankruptcy Code of 1978,
as amended from time to time.
"Base Rate" shall mean, with respect to any Base Rate Loan, for
any day, the higher of (a) the Federal Funds Rate for such day
plus 1/2 of 1% and (b) the Prime Rate for such day. Each change
in any interest rate provided for herein based upon the Base Rate
resulting from a change in the Base Rate shall take effect at the
time of such change in the Base Rate.
"Base Rate Loans" shall mean Syndicated Loans which bear interest
at rates based upon the Base Rate.
"Basle Accord" shall mean the proposals for risk-based capital
framework described by the Basle Committee on Banking Regulations
and Supervisory Practices in its paper entitled "International
Convergence of Capital Measurement and Capital Standards" dated
July 1988, as amended, supplemented and otherwise modified and in
effect from time to time, or any replacement thereof.
"Business Day" shall mean any day on which commercial banks are
not authorized or required to close in New York City and, where
such term is used in the definition of "Quarterly Date" in this
Section 1.01 or if such day relates to the giving of notices or
quotes in connection with a LIBOR Auction or to a borrowing of, a
payment or prepayment of principal of or interest on, a
Conversion of or into, or an Interest Period for, a Eurodollar
Loan or a LIBOR Bid Loan or a notice by the Company with respect
to any such borrowing, payment, prepayment, Conversion or
Interest Period for a Eurodollar Loan or a LIBOR Bid Loan, which
is also a day on which dealings in Dollar deposits are carried
out in the London interbank market.
"Capital Expenditures" shall mean, for any period, expenditures
(including, without limitation, the aggregate amount of Capital
Lease Obligations incurred during such period) made by the
Company or any of the Subsidiaries to acquire or construct fixed
assets, plant and equipment (including renewals, improvements and
replacements, but excluding repairs) during such period computed
in accordance with GAAP.
"Capital Lease Obligations" shall mean, for any Person, all
obligations of such Person to pay rent or other amounts under a
lease of (or other agreement conveying the right to use) Property
to the extent such obligations are required to be classified and
accounted for as a capital lease on a balance sheet of such
Person under GAAP, and, for purposes of this Agreement, the
amount of such obligations shall be the capitalized amount
thereof, determined in accordance with GAAP.
"Cash Flow" shall mean, for any period, the sum, for the Company
and its Subsidiaries (determined on a consolidated basis without
duplication in accordance with GAAP), of the following:
(a) operating margin (net sales minus cost of sales) for such
period plus (b) depreciation, amortization and any other non-cash
expense items (to the extent deducted in determining operating
margin) for such period minus (c) any non-cash income items (to
the extent included in determining operating margin) for such
period.
"Chase" shall mean The Chase Manhattan Bank (National
Association).
"Class" shall have the meaning assigned to such term in
Section 1.03 hereof.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Commitments" shall mean the Revolving Credit Commitments and the
Term Loan Commitments.
"Competitive Bid Borrowing" shall have the meaning assigned to
such term in Section 2.03(b) hereof.
"Competitive Bid Loan Limit" shall have the meaning assigned to
such term in Section 2.03(c) hereof.
"Competitive Bid Loans" shall mean the loans provided for by
Section 2.03 hereof.
"Competitive Bid Margin" shall have the meaning assigned to such
term in Section 2.03(c)(ii)(C) hereof.
"Competitive Bid Notes" shall mean the promissory notes provided
by Section 2.08(b) hereof and all promissory notes delivered in
substitution or exchange therefor, in each case as the same shall
be modified and supplemented and in effect from time to time.
"Competitive Bid Quote" shall mean an offer by a Bank to make a
Competitive Bid Loan in accordance with Section 2.03(c) hereof.
"Competitive Bid Quote Request" shall have the meaning assigned
to such term in Section 2.03(b) hereof.
"Competitive Bid Rate" shall have the meaning assigned to such
term in Section 2.03(c)(ii)(D) hereof.
"Consolidated Financial Statements" shall mean, for any fiscal
period, the unaudited consolidated statement of financial
position as at the last day of such fiscal period and the related
unaudited consolidated statements of income, changes in
shareholders' equity and cash flows, together with the supporting
consolidating statements of financial position and income for the
corporate office and principal operating centers in substantially
the form of the Consolidated Financial Statements of the Company
and Subsidiaries dated December 31, 1993 heretofore delivered to
the Banks.
"Consolidated Net Income Available for Restricted Payments" shall
mean an amount equal to (i) the sum of $225,000,000 plus 80% (or
minus 100% in case of consolidated net loss) of Net Income for
the period (taken as one accounting period) commencing January 1,
1994 and terminating on the Quarterly Date immediately preceding
the date of any proposed Restricted Payment, less (ii) the sum of
(A) the aggregate amount of all dividends (except stock
dividends) and other distributions paid or declared by the
Company on any class of its stock on and after January 1, 1994
and (B) the excess (if any) of the aggregate amount expended,
directly or indirectly, on and after January 1, 1994 for the
redemption, purchase or other acquisition of any shares of its
stock, over the aggregate amount received on and after said date
as the net cash proceeds of the sale of any shares of its stock.
"Consolidated Shareholders' Equity" shall mean the shareholders'
equity of the Company and the Subsidiaries (determined on a
consolidated basis without duplication in accordance with GAAP).
"Continue", "Continuation" and "Continued" shall refer to the
continuation pursuant to Section 2.09 hereof of a Eurodollar Loan
as a Eurodollar Loan from one Interest Period to the next
Interest Period.
"Convert", "Conversion" and "Converted" shall refer to a
conversion pursuant to Section 2.09 hereof of one Type of
Syndicated Loans into another Type of Syndicated Loans, which may
be accompanied by the transfer by a Bank (at its sole discretion)
of a Loan from one Applicable Lending Office to another.
"Credit Documents" shall mean this Agreement, the Notes, the
Pledge Agreement and the Subsidiary Guaranty.
"Credit Party" shall mean the Company and the Subsidiary
Guarantor.
"date hereof" and "date of this Agreement" shall mean April 15,
1994.
"default" shall mean an Event of Default or an event which with
notice or lapse of time or both would become an Event of Default.
"Documents" shall mean the Credit Documents and the Transaction
Documents.
"Dollars" and "$" shall mean lawful money of the United States of
America.
"Equity Issuance" shall mean (a) any issuance or sale (including,
without limitation, issuance or sale as a result of a conversion
or exchange of debt securities) by the Company or any of the
Subsidiaries of (i) any capital stock or any warrants, options or
rights exercisable in respect of capital stock, including any
capital stock issued upon the exercise of any such warrants,
options or rights (other than any capital stock, warrants,
options or rights issued to directors, officers or employees of
the Company or any of the Subsidiaries pursuant to employee
benefit plans, stock option plans or long-term incentive plans
established in the ordinary course of business and any capital
stock of the Company issued upon the exercise of such warrants,
options or rights) or (ii) any other security or instrument
representing an equity interest in the Company or any of the
Subsidiaries or (b) the receipt by the Company or any of the
Subsidiaries of any capital contribution (whether or not
evidenced by any equity security issued by the recipient of such
contribution); provided that Equity Issuance shall not include
(x) any such issuance or sale by any Subsidiary to the Company or
any Wholly-Owned Subsidiary or (y) any capital contribution by
the Company or any Wholly-Owned Subsidiary to any Subsidiary.
ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended from time to time.
"ERISA Affiliate" shall mean any corporation or trade or business
which is a member of the same controlled group of corporations
(within the meaning of Section 414(b) of the Code) as the Company
or is under common control (within the meaning of Section 414(c)
of the Code) with the Company.
"Eurodollar Loans" shall mean Syndicated Loans the interest rates
on which are determined on the basis of rates referred to in the
definition of "Fixed Base Rate" in this Section 1.01.
"Event of Default" shall have the meaning assigned to such term
in Section 9 hereof. Exchange Act" shall mean the
Securities Exchange Act of 1934, together with the Rules and
Regulations of the SEC thereunder, as amended.
"Existing Grumman Credit Agreements" shall mean the Restated
Credit Agreement dated February 26, 1993 that provides a
revolving facility up to $200,000,000 during the three year
period ending February 25, 1996 and a short-term credit facility
effective April 1, 1993, expiring on June 30, 1994 providing an
additional $100,000,000.
"Existing Northrop Credit Agreement" shall mean the Credit
Agreement dated as of January 7, 1994 among the Company, the
banks party thereto and The Chase Manhattan Bank (National
Association), as agent, as amended, supplemented and otherwise
modified and in effect from time to time.
"Facility" shall mean the Revolving Credit Facility and the Term
Loan Facility.
"Federal Funds Rate" shall mean, for any day, the rate per annum
(rounded upwards, if necessary, to the nearest 1/100th of 1%)
equal to the weighted average of the rates on overnight Federal
funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers on such day, as published by
the Federal Reserve Bank of New York on the Business Day next
succeeding such day, provided that (i) if the day for which such
rate is to be determined is not a Business Day, the Federal Funds
Rate for such day shall be such rate on such transactions on the
next preceding Business Day as so published on the next
succeeding Business Day and (ii) if such rate is not so published
for any day, the Federal Funds Rate for such day shall be the
average rate charged to Chase on such day on such transactions as
determined by the Administrative Agent.
"Fees" shall mean commitment fees and facility fees payable
pursuant to Section 2.05 hereof.
"Final Risk-Based Capital Guidelines" shall mean (a) the Final
Risk-Based Capital Guidelines of the Board of Governors of the
Federal Reserve System (12 C.F.R. Part 208, Appendix A and 12
C.F.R. Part 225, Appendix A) and (b) the Final Risk-Based Capital
Guidelines of the Office of the Comptroller of the Currency, and
any successor or supplemental regulations (12 C.F.R. Part 3,
Appendix A), and any successor regulations, in each case, as
amended, supplemented and otherwise modified and in effect from
time to time.
"Fixed Base Rate" shall mean, with respect to any Fixed Rate Loan
for any Interest Period therefor, the arithmetic mean (rounded,
if necessary, to the nearest 1/16 of 1%), as determined by the
Administrative Agent, of the rate per annum quoted by each
Reference Bank at approximately 11:00 a.m. London time (or as
soon thereafter as practicable) on the date two Business Days
prior to the first day of such Interest Period for such Loan for
the offering by such Reference Bank to leading banks in the
London interbank market of Dollar deposits having a term
comparable to such Interest Period and in an amount comparable to
the principal amount of the Eurodollar Loan or LIBOR Bid Loan to
be made by such Reference Bank for such Interest Period. If any
Reference Bank is not participating in any Fixed Rate Loans
during any Interest Period therefor, the Fixed Base Rate for such
Loan shall be determined by reference to the amount of the Loan
which such Reference Bank would have made had it been
participating in such Loan during such Interest Period. In
determining the Fixed Base Rate with respect to any LIBOR Bid
Loan, each Reference Bank shall be deemed to have made a LIBOR
Bid Loan in an amount equal to $10,000,000. If any Reference
Bank does not timely furnish such information for determination
of any Fixed Base Rate, the Administrative Agent shall determine
such Fixed Base Rate on the basis of information timely furnished
by the remaining Reference Banks.
"Fixed Rate" shall mean for any Eurodollar Loan for any Interest
Period therefor, a rate per annum (rounded, if necessary, to the
nearest 1/100 of 1%) determined by the Administrative Agent to be
equal to the Fixed Base Rate for such Loan for such Interest
Period for such Loan.
"Fixed Rate Loans" shall mean Eurodollar Loans and, for the
purposes of the definition of "Fixed Base Rate" herein and
Section 5 hereof, LIBOR Bid Loans.
"Fully Diluted Basis" shall mean, with respect to the Shares, on
a "fully diluted basis" as such term is used in the Tender Offer
Documents.
"Funded Debt" shall mean any obligation of the Company or any
Subsidiary for borrowed money or the purchase price of property
which is shown on the financial statements as a liability,
including (a) Capital Lease Obligations and (b) obligations which
are deemed Funded Debt under Section 8.09 hereof but excluding
(i) items customarily reflected as current liabilities and
classified as other than debt (it being understood that progress
payments, trade accounts payable, obligations under leases which
are not capitalized leases and income taxes payable are excluded
from "Funded Debt" under this definition) and (ii) deferred
income taxes.
"GAAP" shall mean generally accepted accounting principles
applied on a basis consistent with those that, in accordance with
the last sentence of Section 1.02(a) hereof, are to be used in
making the calculations for the purposes of determining
compliance with this Agreement.
"Government" shall mean the United States of America or any
department or agency thereof.
"Grumman" shall mean Grumman Corporation, a New York corporation
and the corporation surviving the Merger.
"Intercompany Loan" shall have the meaning assigned to such term
in Section 2.01.B(a) hereof.
"Intercompany Note" shall have the meaning assigned to such term
in Section 2.01.B(c) hereof.
"Interest Coverage Ratio" shall mean, as at any date, the ratio
of (a) the sum of (i) Cash Flow for the period of four (or, if
less, the number of full fiscal quarters of the Company since the
Tender Offer Closing Date) consecutive fiscal quarters of the
Company ending on or most recently ended prior to such date minus
(ii) Capital Expenditures during such period to (b) Interest
Expense for such period.
"Interest Expense" shall mean, for any period, the sum, for the
Company and the Subsidiaries (determined on a consolidated basis
without duplication in accordance with GAAP), of the following:
(a) all interest in respect of Funded Debt (including, without
limitation, the interest component of any payments in respect of
Capital Lease Obligations) accrued or capitalized during such
period (whether or not actually paid during such period) plus
(b) the net amount payable (or minus the net amount receivable)
under Interest Rate Protection Agreements during such period
(whether or not actually paid or received during such period)
minus (c) all interest income accrued during such period (whether
or not actually received during such period).
"Interest Period" shall mean:
(a) With respect to any Eurodollar Loan, the period commencing
on the date such Eurodollar Loan is made or Converted from a Loan
of another Type or the last day of the next preceding Interest
Period for such Loan and ending on the numerically corresponding
day in the first, second, third, sixth or (with the consent of
all Banks) twelfth calendar month thereafter, as the Company may
select as provided in Section 2.02 hereof, except that each
Interest Period which commences on the last Business Day of a
calendar month (or on any day for which there is no numerically
corresponding day in the appropriate subsequent calendar month)
shall end on the last Business Day of the appropriate subsequent
calendar month.
(b) With respect to any Set Rate Loan, the period commencing on
the date such Set Rate Loan is made and ending on any Business
Day up to and including 360 days thereafter, as the Company may
select as provided in Section 2.03(b) hereof.
(c) With respect to any LIBOR Bid Loan, the period commencing on
the date such LIBOR Bid Loan is made and ending on the
numerically corresponding day in the first, second, third, sixth
or twelfth calendar month thereafter, as the Company may select
as provided in Section 2.03(b) hereof, except that each Interest
Period which commences on the last Business Day of a calendar
month (or any day for which there is no numerically corresponding
day in the appropriate subsequent calendar month) shall end on
the last Business Day of the appropriate subsequent calendar
month.
Notwithstanding the foregoing: (i) no Interest Period for
Revolving Loans may end after the Revolving Commitment
Termination Date; (ii) no Interest Period for any Term Loan may
commence before and end after any Principal Payment Date unless,
after giving effect thereto, the aggregate principal amount of
the Term Loans having Interest Periods that end after such
Principal Payment Date shall be equal to or less than the
aggregate principal amount of the Term Loans scheduled to be
outstanding after giving effect to the payments of principal
required to be made on such Principal Payment Date; (iii) each
Interest Period which would otherwise end on a day which is not a
Business Day shall end on the next succeeding Business Day (or,
in the case of an Interest Period for Eurodollar Loans or LIBOR
Bid Loans, if such next succeeding Business Day falls in the next
succeeding calendar month, on the next preceding Business Day);
and (iv) notwithstanding clauses (i) and (ii) above, no Interest
Period for any Eurodollar Loans or LIBOR Bid Loans shall have a
duration of less than one month and, if the Interest Period for
any Eurodollar Loans would otherwise be a shorter period, such
Loans shall not be available hereunder.
"Interest Rate Protection Agreement" shall mean, for any Person,
an interest rate swap, cap or collar agreement or similar
arrangement between such Person and one or more financial
institutions providing for the transfer or mitigation of interest
risks either generally or under specific contingencies.
"Leverage Ratio" shall mean, at any time, the ratio of (a) the
aggregate amount (determined without duplication on a
consolidated basis) of all Funded Debt outstanding at such time
to (b) the sum of (i) Consolidated Shareholders' Equity at such
time plus (ii) all Funded Debt outstanding at such time.
"LIBO Rate" shall mean, for any LIBOR Bid Loan, a rate per annum
determined by the Administrative Agent to be equal to the rate of
interest specified in the definition of "Fixed Base Rate" in this
Section 1.01 for the Interest Period for such Loan.
"LIBOR Auction" shall mean a solicitation of Competitive Bid
Quotes setting forth Competitive Bid Margins based on the LIBO
Rate pursuant to Section 2.03 hereof.
"LIBOR Bid Loans" shall mean Competitive Bid Loans the interest
rates on which are determined on the basis of LIBO Rates pursuant
to a LIBOR Auction.
"Lien" shall mean, with respect to any asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in
respect of such asset.
"Loans" shall mean Competitive Bid Loans and Syndicated Loans.
"Majority Banks" shall mean Banks holding more than 50% of the
aggregate amount of (a) the Revolving Credit Commitments or, if
the Revolving Credit Commitments shall have terminated, the sum
of (i) the aggregate unpaid principal amount of the Revolving
Loans plus (ii) the aggregate unpaid principal amount of the
Competitive Bid Loans plus (b) the Term Loan Commitments or, if
the Term Loan Commitments shall have terminated, the aggregate
principal amount of the Term Loans.
"Material Adverse Effect" shall mean a material adverse effect on
(a) the business, operations, condition (financial or otherwise)
or prospects of the Company and the Subsidiaries taken as a
whole, (b) the consummation of the Tender Offer or the Merger,
(c) the ability of any Credit Party to perform its obligations
under any of the Credit Documents to which it is a party, (d) the
validity or enforceability of any of the Credit Documents,
(e) the rights and remedies of the Banks and the Administrative
Agent under any of the Credit Documents or (f) the timely payment
of the principal of or interest on the Loans or other amounts
payable in connection therewith.
"Material Subsidiary" shall mean, at any time, any Subsidiary if,
at such time, such Subsidiary would qualify as a "significant
subsidiary" under Regulation S-X of the SEC as in effect on the
date hereof.
"Maximum Price Per Share" shall mean $62 or such higher price as
may be agreed to by all of the Banks.
"Merger" shall mean the merger pursuant to the Merger Agreement
of the Purchaser with and into Grumman, with Grumman as the
survivor.
"Merger Agreement" shall mean the Agreement and Plan of Merger
dated as of April 3, 1994 among the Company, the Purchaser and
Grumman providing for the Merger, together with such amendments,
modifications and supplements prior to the Merger Effective Date
as are satisfactory in form and substance to the Majority Banks.
"Merger Documents" shall mean all agreements and instruments,
including the Merger Agreement, the certificate of Merger, the
Proxy Statement and any other document or information sent by the
Company, the Purchaser or Grumman to Grumman's stockholders
generally or filed with the SEC under the Exchange Act in respect
of the Merger, effecting, evidencing or governing the Merger, in
the form delivered to the Banks pursuant to Section 6.01(j) and
(k) hereof and as the same may be subsequently amended, modified
or supplemented in accordance with the provisions thereof and
hereof.
"Merger Effective Date" shall mean the date on which the Merger
shall become effective.
"Multiemployer Plan" shall mean a multiemployer plan defined as
such in Section 3(37) of ERISA to which contributions have been
made by the Company or any ERISA Affiliate and which is covered
by Title IV of ERISA.
"Net Income" shall mean, for the Company and the Subsidiaries
(determined on a consolidated basis without duplication in
accordance with GAAP) for any fiscal period, an amount equal to
the consolidated net income of the Company and the Subsidiaries
for such fiscal period.
"Notes" shall mean Syndicated Notes and the Competitive Bid
Notes.
"Offer to Purchase" shall mean the Offer to Purchase dated March
14, 1994 issued in connection with the Acquisition, as amended
and supplemented prior to the date of this Agreement and as
further amended, modified or supplemented as provided in Section
6.01(k) hereof or otherwise with the consent of all of the Banks.
"PBGC" shall mean the Pension Benefit Guaranty Corporation or any
entity succeeding to any or all of its functions under ERISA.
"Person" shall mean an individual, a corporation, a company, a
voluntary association, a partnership, a trust, an unincorporated
organization or a government or any agency, instrumentality or
political subdivision thereof.
"Plan" shall mean an employee benefit or other plan established
or maintained by the Company or any ERISA Affiliate and which is
covered by Title IV of ERISA, other than a Multiemployer Plan.
"Pledge Agreement" shall mean a Pledge and Security Agreement,
substantially in the form of Exhibit E hereto, between the
Company and the Administrative Agent, as the same shall be
modified and supplemented and in effect from time to time.
"Post-Default Rate" shall mean, in respect of any principal of
any Loan or any other amount payable by the Company under this
Agreement or any Note which is not paid when due (whether at
stated maturity, by acceleration or otherwise), a rate per annum
during the period commencing on the due date until such amount is
paid in full equal to 2% plus the Base Rate as in effect from
time to time plus the Applicable Margin (if any) (provided that,
if such amount in default is principal of a Eurodollar Loan or a
Competitive Bid Loan and the due date is a day other than the
last day of the Interest Period therefor, the
"Post-Default Rate" for such principal shall be, for the period
commencing on the due date and ending on the last day of the
Interest Period therefor, 2% plus the interest rate for such Loan
as provided in Section 3.02 hereof and, thereafter, the rate
otherwise provided in this definition).
"Prime Rate" shall mean the rate of interest from time to time
announced by Chase at the Principal Office as its prime
commercial lending rate.
"Principal Office" shall mean the principal office of Chase,
located on the date of this Agreement at 1 Chase Manhattan Plaza,
New York, New York 10081.
"Principal Payment Dates" shall mean the Quarterly Dates falling
on or nearest to March 31, June 30, September 30 and December 31
of each year, commencing with September 30, 1994 through and
including March 31, 1999.
"Projections" shall have the meaning provided in Section 7.02(d)
hereof.
"Property" shall mean any right or interest in or to property of
any kind whatsoever, whether real, personal or mixed and whether
tangible or intangible.
"Proxy Statement" shall have the meaning assigned to such term in
the Merger Agreement.
"Purchaser" shall mean Northrop Acquisition, Inc., a Delaware
corporation and a Wholly-Owned Subsidiary of the Company, which
was created by the Company to effect the Acquisition.
"Quarterly Dates" shall mean the last Business Day of each March,
June, September and December in each year, the first of which
shall be the first such day after the date of this Agreement.
"Quarterly Period" shall mean the period from and including one
Quarterly Date to but excluding the next succeeding Quarterly
Date.
"Quotation Date" shall have the meaning assigned to such term in
Section 2.03(b) hereof.
"Reference Banks" shall mean Chase, Chemical Bank, Bank of
America National Trust and Savings Association and Morgan
Guaranty Trust Company of New York (or their Applicable Lending
Offices, as the case may be).
"Refinanced Indebtedness" shall mean (i) the indebtedness of the
Company set forth in Part A of Schedule II hereto, which may be
refinanced with the proceeds of Loans hereunder and
(ii) indebtedness of Grumman set forth in Part B of Schedule II
hereto, which may be refinanced with the proceeds of Loans
hereunder.
"Regulation A", "Regulation D", "Regulation T", "Regulation U"
and "Regulation X" shall mean, respectively, Regulation A,
Regulation D, Regulation T, Regulation U and Regulation X of the
Board of Governors of the Federal Reserve System (or any
successor), as the same may be modified and supplemented and in
effect from time to time.
"Regulatory Change" shall mean, with respect to any Bank, any
change after the date of this Agreement in United States Federal,
state or foreign law or regulations (including Regulation D) or
the adoption or making after such date of any interpretations,
directives or requests applying to a class of banks including
such Bank of or under any United States Federal, state or foreign
law or regulations (whether or not having the force of law) by
any court or governmental or monetary authority charged with the
interpretation or administration thereof.
"Required Shares" shall mean, as at any date of determination
thereof, the number of Shares on a Fully Diluted Basis sufficient
under the certificate of incorporation of Grumman (in effect on
such date), without the vote of any other shares of capital stock
of Grumman, to approve and adopt the Merger Agreement.
"Reserve Requirement" shall mean, for any Interest Period for any
Eurodollar Loan or LIBOR Bid Loan, the average maximum rate at
which reserves (including any marginal, supplemental or emergency
reserves) are required to be maintained during such Interest
Period under Regulation D by member banks of the Federal Reserve
System in New York City with deposits exceeding one billion
Dollars against "Eurocurrency liabilities" (as such term is used
in Regulation D). Without limiting the effect of the foregoing,
the Reserve Requirement shall reflect any other reserves required
to be maintained by such member banks by reason of any Regulatory
Change against (i) any category of liabilities which includes
deposits by reference to which the Fixed Base Rate for Eurodollar
Loans or LIBOR Bid Loans (as the case may be) is to be determined
as provided in the definition of "Fixed Base Rate" or "LIBO Rate"
in this Section 1.01 or (ii) any category of extensions of credit
or other assets which include Eurodollar Loans or LIBOR Bid
Loans.
"Restatement Date" shall mean April 18, 1994.
"Restricted Payment" shall mean any dividend (other than
dividends payable solely in stock of the Company) or any other
distribution with respect to any stock of the Company, whether
now or hereafter outstanding, or any payment on account of the
purchase, acquisition, redemption or other retirement, directly
or indirectly, of any shares of such stock.
"Revolving Commitment Termination Date" shall mean the Quarterly
Date falling on or nearest to March 31, 1999.
"Revolving Credit Banks" shall mean (a) on the Restatement Date,
the Banks having Revolving Credit Commitments in Schedule I
hereto and (b) thereafter, the Banks from time to time holding
Revolving Loans and/or Revolving Credit Commitments after giving
effect to any assignments thereof permitted by Section 11.06
hereof.
"Revolving Credit Commitment" shall mean, for each Revolving
Credit Bank, the obligation of such Bank to make Revolving Loans
in an aggregate principal amount at any one time outstanding up
to but not exceeding the amount set opposite the name of such
Bank on Schedule I hereto under the caption "Revolving Credit
Commitment" (as the same may be reduced from time to time
pursuant to Section 2.04 hereof). The original aggregate
principal amount of the Revolving Credit Commitments is
$600,000,000.
"Revolving Credit Facility" shall mean the Facility constituted
by the Revolving Credit Commitments.
"Revolving Loans" shall mean the loans provided for by Section
2.01.A(b) hereof, which may be Base Rate Loans and/or Eurodollar
Loans.
"Revolving Notes" shall mean the promissory notes provided for by
Section 2.08(a) hereof and all promissory notes delivered in
substitution or exchange therefor, in each case as the same shall
be modified and supplemented and in effect from time to time.
"Rights" shall mean the preferred stock purchase rights issued by
Grumman pursuant to the Rights Agreement dated as of February 28,
1988 as amended as of March 6, 1994 between Grumman and The Bank
of New York, as Rights Agent as at any time or from time to time
amended on or before the Tender Offer Closing Date.
"SEC" shall mean the Securities and Exchange Commission or any
successor thereto.
"Securities Act" shall mean the Securities Act of 1933, together
with the Rules and Regulations of the SEC thereunder, as amended.
"Set Rate Auction" shall mean a solicitation of Competitive Bid
Quotes setting forth Competitive Bid Rates pursuant to
Section 2.03 hereof.
"Set Rate Loans" shall mean Competitive Bid Loans the interest
rates on which are determined on the basis of Competitive Bid
Rates pursuant to a Set Rate Auction.
"Shares" shall mean shares of common stock, par value $1.00 per
share, of Grumman, together with the associated Rights.
"Subsidiary" shall mean any corporation of which outstanding
shares of stock of such corporation having by the terms thereof
ordinary voting power to elect (whether immediately or
ultimately) a majority of the board of directors of such
corporation (irrespective of whether or not at the time stock of
any other class or classes of such corporation shall have or
might have voting power by reason of the happening of any
contingency) are at the time directly or indirectly owned or
controlled by the Company or one or more of the Subsidiaries or
by the Company and one or more of the Subsidiaries.
"Wholly-Owned Subsidiary" shall mean any such corporation of
which all of such shares, other than directors' qualifying
shares, are so owned or controlled.
"Subsidiary Guarantor" shall mean the Purchaser prior to the
Merger Effective Date and Grumman on and after the Merger
Effective Date.
"Subsidiary Guaranty" shall mean a guarantee agreement
substantially in the form of Exhibit F hereto between the
Subsidiary Guarantor and the Administrative Agent, as the same
shall be modified and supplemented and in effect from time to
time.
"Syndicated Loans" shall mean the loans provided for by
Section 2.01 hereof.
"Syndicated Notes" shall mean the promissory notes provided for
by Section 2.08(a) hereof and all promissory notes delivered in
substitution or exchange therefor, in each case as the same shall
be modified and supplemented and in effect from time to time.
"Tender Offer" shall mean the tender offer commenced by the
Purchaser pursuant to the Offer to Purchase.
"Tender Offer Closing Date" shall mean the date the Purchaser
makes the initial payment for Shares purchased pursuant to the
Tender Offer.
"Tender Offer Documents" shall mean the Offer to Purchase, the
Schedule 14D-1 filed by the Purchaser, the Schedule 14D-9 filed
by Grumman with respect to the Offer to Purchase and all
amendments and exhibits thereto and related documents filed with
the SEC or distributed to the stockholders of Grumman, in each
case prior to the date of this Agreement, and shall, in any
event, include any Merger Documents delivered to the Banks prior
to the date of this Agreement.
"Tender Offer Expiration Date" shall mean April 15, 1994, unless
and until the Purchaser shall have extended the period of time
for which the Tender Offer is open, in which event "Tender Offer
Expiration Date" shall mean the latest date on which the Tender
Offer, as so extended by the Purchaser, shall expire.
"Term Loan Banks" shall mean (a) on the Restatement Date, the
Banks having Term Loan Commitments in Schedule I hereto and
(b) thereafter, the Banks from time to time holding Term Loans
and Term Loan Commitments after giving effect to any assignments
thereof permitted by Section 11.06 hereof.
"Term Loan Commitment" shall mean, for each Term Loan Bank, the
obligation of such Bank to make one or more Term Loans in an
aggregate amount up to but not exceeding the amount set opposite
the name of such Bank on Schedule I hereto under the caption
"Term Loan Commitment" (as the same may be reduced from time to
time pursuant to Section 2.04 hereof). The original aggregate
principal amount of the Term Loan Commitments is $2,200,000,000.
"Term Loan Commitment Termination Date" shall mean the earlier of
(i) the Merger Effective Date and (ii) the date 120 days after
the Tender Offer Closing Date.
"Term Loan Facility" shall mean the Facility constituted by the
Term Loan Commitments.
"Term Loans" shall mean the loans provided for by Section
2.01.A(a) hereof, which may be Base Rate Loans and/or Eurodollar
Loans.
"Term Notes" shall mean the promissory notes provided for by
Section 2.08(a) hereof and all promissory notes delivered in
substitution or exchange therefor, in each case as the same shall
be modified and supplemented and in effect from time to time.
"Transaction Documents" shall mean the Tender Offer Documents,
the Additional Tender Offer Documents and the Merger Documents.
"Type" shall have the meaning assigned to such term in
Section 1.03 hereof.
"Vought Acquisition" shall mean the acquisition, directly or
indirectly, of the shares of capital stock of Vought Aircraft
Inc. not owned, directly or indirectly, by the Company on the
date hereof.
1.02 Accounting Terms and Determinations.
(a) Except as otherwise expressly provided herein, all
accounting terms used herein shall be interpreted, and all
financial statements and certificates and reports as to financial
matters required to be delivered to the Banks hereunder shall
(unless otherwise disclosed to the Banks in writing at the time
of delivery thereof in the manner described in
subsection (b) below) be prepared, in accordance with generally
accepted accounting principles applied on a basis consistent with
those used in the preparation of the latest corresponding
financial statements furnished to the Banks hereunder after the
date hereof (or, until such financial statements are furnished,
consistent with those used in the preparation of the financial
statements referred to in Section 7.02 hereof). All calculations
made for the purposes of determining compliance with the
provisions of this Agreement shall (except as otherwise expressly
provided herein) be made by application of generally accepted
accounting principles applied on a basis consistent with those
used in the preparation of the latest corresponding annual or
quarterly financial statements furnished to the Banks pursuant to
Section 8.01 hereof (or, until such financial statements are
furnished, consistent with those used in the preparation of the
financial statements referred to in Section 7.02 hereof) unless
(i) the Company shall have objected to determining such
compliance on such basis at the time of delivery of such
financial statements or (ii) the Majority Banks shall so object
in writing within 30 days after delivery of such financial
statements, in either of which events such calculations shall be
made on a basis consistent with those used in the preparation of
the latest financial statements as to which such objection shall
not have been made (which, if objection is made in respect of the
first financial statements delivered under Section 8.01 hereof,
shall mean the financial statements referred to in Section 7.02
hereof).
(b) The Company shall deliver to the Banks at the same time as
the delivery of any annual or quarterly financial statement under
Section 8.01 hereof (i) a description in reasonable detail of any
material variation between the application of accounting
principles employed in the preparation of such statement and the
application of accounting principles employed in the preparation
of the next preceding annual or quarterly financial statements as
to which no objection has been made in accordance with the last
sentence of paragraph (a) above (which, in the case of the first
financial statements delivered under Section 8.01 hereof, shall
mean the financial statements referred to in Section 7.02 hereof)
and (ii) reasonable estimates of the difference between such
statements arising as a consequence thereof.
(c) If, under the last sentence of paragraph (a) above, the
Company or the Majority Banks shall object to determining
compliance with the covenants contained herein based upon the
latest financial statements delivered under Section 8.01 hereof,
and if the Company and the Banks (or the Majority Banks, as the
case may be) shall enter into an amendment or other modification
of the covenants and other terms and conditions of this Agreement
which, in their sole respective discretion, makes adequate
adjustments for any material variation of the type described in
clause (i) of Section 1.02(b) hereof, then neither the Company
nor the Banks shall thereafter have any right to object to
determining compliance with the covenants contained herein based
upon said financial statements.
1.03 Classes and Types of Loans. Loans hereunder are
distinguished by "Class" and by "Type". The "Class" of a Loan
(or of a Commitment to make a Loan) refers to whether such Loan
is a Competitive Bid Loan, a Revolving Loan, or a Term Loan, each
of which constitutes a Class. The "Type" of a Loan refers to
whether such Loan is a Base Rate Loan, a Eurodollar Loan, a Set
Rate Loan or a LIBOR Bid Loan, each of which constitutes a Type.
Loans may be identified by both Class and Type.
Section 2. Commitments.
2.01 Syndicated Loans.
A. Availability. Subject to and upon the terms and conditions
herein set forth, each Bank severally agrees to make loans (each
a "Syndicated Loan" and, collectively, the "Syndicated Loans") to
the Company up to but not exceeding the amount of such Bank's
Commitment under each of the Term Loan Facility and the Revolving
Credit Facility, as set forth below:
(a) Term Loans. Syndicated Loans under the Term Facility shall
be available at any time and from time to time from and after the
second Business Day after the Tender Offer Expiration Date to and
including the Term Loan Commitment Termination Date. Subject to
the terms and conditions of this Agreement, during such period,
Term Loans may, at the option of the Company, be borrowed and
maintained as, and/or Converted into, Base Rate Loans or
Eurodollar Loans; provided that until the date three Business
Days after the Tender Offer Closing Date, all Term Loans must be
Base Rate Loans.
(b) Revolving Loans. Syndicated Loans under the Revolving
Credit Facility shall be available at any time and from time to
time from and after the making of the initial Term Loans to and
including the Revolving Commitment Termination Date. Subject to
the terms and conditions of this Agreement, during such period,
Revolving Loans may be borrowed, repaid and reborrowed and may,
at the option of the Company, be borrowed and maintained as,
and/or Converted into, Base Rate Loans or Eurodollar Loans;
provided that until the date three Business Days after the Tender
Offer Closing Date, all Revolving Loans must be Base Rate Loans.
Notwithstanding the foregoing, no Revolving Loan shall be made if
the sum of (i) such Revolving Loan (together with all other
Revolving Loans and Competitive Bid Loans to be made on the same
day as such Revolving Loan), plus (ii) the aggregate principal
amount of all outstanding Competitive Bid Loans, plus (iii) the
aggregate principal amount of all outstanding Revolving Loans
exceeds the aggregate amount of the Revolving Credit Commitments
at such time.
B. Use of Proceeds.
(a) Term Loans. The proceeds of the Term Loans may be used by
the Company solely: (1) to make capital contributions, and,
subject to Section 2.01.B(c) below, to make loans, to the
Subsidiary Guarantor (each such loan an "Intercompany Loan" and
collectively the "Intercompany Loans") to (i) finance the
purchase of Shares pursuant to the Tender Offer and, after the
Tender Offer Closing Date, to acquire additional Shares through
private purchases, market transactions, tender or exchange offers
or otherwise, subject to any applicable legal restrictions, in
each case at a per share purchase price not in excess of the
Maximum Price Per Share, (ii) fund the Exchange Fund (as defined
in the Merger Agreement) in order to pay to holders of then
outstanding Shares (other than (x) Shares held in Grumman's
treasury or by any of Grumman's subsidiaries, (y) Shares held by
the Company, the Purchaser and any other Subsidiary and (z)
Shares held by a holder who has not voted in favor of the Merger
or consented thereto in writing and who has demanded appraisal
for such Shares in accordance with Section 623 of the New York
Business Corporation Law) the cash to which they become entitled
under the Merger Agreement upon the Merger Effective Date, in
each case at a per share amount not in excess of the Maximum
Price Per Share and (iii) refinance Refinanced Indebtedness of
Grumman on the Merger Effective Date; (2) to refinance Refinanced
Indebtedness of the Company; and (3) to pay reasonable costs and
expenses related to the Acquisition.
(b) Revolving Loans. The proceeds of the Revolving Loans will
be used in compliance with all applicable legal and regulatory
requirements, including (without limitation) Regulations U and X,
the Securities Act and the Exchange Act.
(c) Intercompany Loans. Intercompany Loans shall be evidenced
by a single promissory note (the "Intercompany Note"), in form
and substance satisfactory to the Administrative Agent. The
aggregate unpaid principal amount of Intercompany Loans may not
exceed $1,300,000,000 at any one time outstanding. To the extent
that the making of any Intercompany Loan would prevent the
Company, from and after the Merger Effective Date, from making
the representations contained in Section 7.02(c) hereof, the
Company shall instead make capital contributions to the Purchaser
and Grumman. The Company agrees that, from and after the Merger
Effective Date, each payment by the Subsidiary Guarantor under
the Subsidiary Guaranty shall (i) reduce pro tanto first the
obligations of the Subsidiary Guarantor in respect of the
Intercompany Loans and then obligations of the Subsidiary
Guarantor in respect of other indebtedness owing by the
Subsidiary Guarantor to the Company and (ii) when there are no
longer any such obligations, constitute an investment in the
equity capital of the Company by the Subsidiary Guarantor.
2.02 Borrowings of Syndicated Loans. The Company shall give the
Administrative Agent (which shall promptly notify the Banks)
notice of each borrowing of Syndicated Loans hereunder as
provided in Section 4.07 hereof. Not later than 1:00 p.m. New
York time on the date specified for each Syndicated Loan
borrowing hereunder, each Bank shall make available the amount of
the Syndicated Loan to be made by it on such date to the
Administrative Agent, at account number NYAO-DI-900-9-000002
maintained by the Administrative Agent with Chase at the
Principal Office, in immediately available funds, for account of
the Company. The amount so received by the Administrative Agent
shall, subject to the terms and conditions of this Agreement, be
made available to the Company by depositing the same, in
immediately available funds, in an account of the Company
maintained with Chase at the Principal Office designated by the
Company.
2.03 Competitive Bid Loans.
(a) In addition to borrowings of Revolving Loans, at any time
and from time to time on and after the Merger Effective Date and
prior to the Revolving Commitment Termination Date the Company
may, as set forth in this Section 2.03, request the Banks to make
offers to make Competitive Bid Loans to the Company. The Banks
may, but shall have no obligation to, make such offers and the
Company may, but shall have no obligation to, accept any such
offers in the manner set forth in this Section 2.03. Competitive
Bid Loans may be LIBOR Bid Loans or Set Rate Loans (each a "Type"
of Competitive Bid Loan), provided that:
(i) there may be no more than fifteen different Interest Periods
for both Syndicated Loans and Competitive Bid Loans outstanding
at the same time (for which purpose Interest Periods described in
different lettered clauses of the definition of the term
"Interest Period" shall be deemed to be different Interest
Periods even if they are coterminous); and
(ii) the aggregate principal amount of all Competitive Bid
Loans, together with the aggregate principal amount of all
Revolving Loans, at any one time outstanding shall not exceed the
aggregate amount of the Revolving Credit Commitments at such
time.
(b) When the Company wishes to request offers to make
Competitive Bid Loans, it shall give the Administrative Agent
(which shall promptly notify the Banks) notice (a "Competitive
Bid Quote Request") so as to be received no later than 11:00 a.m.
New York time on (x) the fourth Business Day prior to the date of
borrowing proposed therein, in the case of a LIBOR Auction or
(y) the Business Day next preceding the date of borrowing
proposed therein, in the case of a Set Rate Auction (or, in any
such case, such other time and date as the Company and the
Administrative Agent, with the consent of the Majority Banks, may
agree with notice by the Administrative Agent to the Banks of
such agreement), specifying:
(i) the proposed date of such borrowing (a "Competitive Bid
Borrowing"), which shall be a Business Day;
(ii) the aggregate amount of such Competitive Bid Borrowing,
which shall be $10,000,000 or an integral multiple of $5,000,000
in excess thereof, but shall not cause the limits specified in
Section 2.03(a) hereof to be violated;
(iii) the duration of the Interest Period applicable thereto;
(iv) whether the Competitive Bid Quotes requested are to set
forth a Competitive Bid Margin or a Competitive Bid Rate;
(v) if the Competitive Bid Quotes requested are to set forth a
Competitive Bid Rate, the date on which the Competitive Bid
Quotes are to be submitted (which may not be earlier than the
Business Day next succeeding the date of the Competitive Bid
Quote Request) if it is before the proposed date of borrowing
(the date on which such Competitive Bid Quotes are to be
submitted is called the "Quotation Date" and if no such date is
specified, the Quotation Date is the proposed date of borrowing);
and
(vi) the aggregate principal amount of all Competitive Bid Loans
and Revolving Loans outstanding at the date of such Competitive
Bid Quote Request.
The Company may request offers to make Competitive Bid Loans with
both Competitive Bid Margins and Competitive Bid Rates, and with
different Interest Periods, in a single request; provided that
(aa) the request for each separate Type and maturity shall be
deemed to be a separate Competitive Bid Quote Request for a
separate Competitive Bid Borrowing and (bb) the Company may not
make more than 5 Competitive Bid Quote Requests at the same time.
Except as otherwise provided in the preceding sentence, no
Competitive Bid Quote Request shall be given within five Business
Days (or such other number of days as the Company and the
Administrative Agent, with the consent of the Majority Banks, may
agree with notice by the Administrative Agent to the Banks of
such agreement) of any other Competitive Bid Quote Request.
(c) (i) Each Bank may submit a Competitive Bid Quote containing
an offer to make a Competitive Bid Loan in response to any
Competitive Bid Quote Request; provided that, if the Company's
request under Section 2.03(b) hereof specified more than one
Interest Period and/or Type of Competitive Bid Loan, such Bank
may make a single submission containing a separate offer for each
such Interest Period and for each such Type and each such
separate offer shall be deemed to be a separate Competitive Bid
Quote. Each Competitive Bid Quote must be submitted to the
Administrative Agent not later than (x) 2:00 p.m. New York time
on the fourth Business Day prior to the proposed date of
borrowing, in the case of a LIBOR Auction or (y) 10:00 a.m. New
York time on the Quotation Date, in the case of a Set Rate
Auction (or, in any such case, such other time and date as the
Company and the Administrative Agent, with the consent of the
Majority Banks, may agree with notice by the Administrative Agent
to the Banks of such agreement); provided that any Competitive
Bid Quote submitted by Chase (or its Applicable Lending Office)
may be submitted, and may only be submitted, if Chase (or such
Applicable Lending Office) notifies the Company of the terms of
the offer contained therein not later than (x) 1:00 p.m. New York
time on the fourth Business Day prior to the proposed date of
borrowing, in the case of a LIBOR Auction or (y) 9:45 a.m. New
York time on the Quotation Date, in the case of a Set Rate
Auction. Subject to Sections 5.02(b), 5.03, 6.02 and 9 hereof,
any Competitive Bid Quote so made shall be irrevocable except
with the written consent of the Administrative Agent given on the
instructions of the Company.
(ii) Each Competitive Bid Quote shall specify:
(A) the proposed date of borrowing and the Interest Period
therefor;
(B) the principal amount of the Competitive Bid Loan for which
each such offer is being made, which principal amount (x) may be
greater than or less than the unused Revolving Credit Commitment
of the quoting Bank, (y) shall be $10,000,000 or an integral
multiple of $5,000,000 in excess thereof and (z) may not exceed
the principal amount of the Competitive Bid Borrowing for which
offers were requested;
(C) in the case of a LIBOR Auction, the margin above or below
the applicable LIBO Rate (the "Competitive Bid Margin") offered
for each such Competitive Bid Loan, expressed as a percentage
(rounded upwards, if necessary, to the nearest 1/10,000th of 1%)
to be added to or subtracted from the applicable LIBO Rate;
(D) in the case of a Set Rate Auction, the rate of interest per
annum (rounded upwards, if necessary, to the nearest 1/10,000th
of 1%) (the "Competitive Bid Rate") offered for each such
Competitive Bid Loan; and
(E) the identity of the quoting Bank.
No Competitive Bid Quote shall contain qualifying, conditional or
similar language or propose terms other than or in addition to
those set forth in the applicable Competitive Bid Quote Request
and, in particular, no Competitive Bid Quote may be conditioned
upon acceptance by the Company of all (or some specified minimum)
of the principal amount of the Competitive Bid Loan for which
such Competitive Bid Quote is being made; provided that the
submission by any Bank containing more than one Competitive Bid
Quote may be conditioned on offers contained in such submission
not being accepted to the extent that it would result in such
Bank making Competitive Bid Loans pursuant thereto in excess of a
specified aggregate amount (the "Competitive Bid Loan Limit").
(d) The Administrative Agent shall (x) in the case of a Set Rate
Auction, as promptly as practicable after the Competitive Bid
Quote is submitted (but in any event not later than 10:15 a.m.
New York time) or (y) in the case of a LIBOR Auction, by
4:00 p.m. New York time on the day a Competitive Bid Quote is
submitted, notify the Company of the terms (i) of any Competitive
Bid Quote submitted by a Bank that is in accordance with
Section 2.03(c) hereof and (ii) of any Competitive Bid Quote that
amends, modifies or is otherwise inconsistent with a previous
Competitive Bid Quote submitted by such Bank with respect to the
same Competitive Bid Quote Request. Any such subsequent
Competitive Bid Quote shall be disregarded by the Administrative
Agent unless such subsequent Competitive Bid Quote is submitted
solely to correct a manifest error in such former Competitive Bid
Quote. The Administrative Agent's notice to the Company shall
specify (A) the aggregate principal amount of the Competitive Bid
Borrowing for which offers have been received and (B) the
respective principal amounts and Competitive Bid Margins or
Competitive Bid Rates, as the case may be, so offered by each
Bank (identifying the Bank that made each Competitive Bid Quote).
(e) Not later than (x) 11:00 a.m. New York time on the third
Business Day prior to the proposed date of borrowing, in the case
of a LIBOR Auction or (y) 11:00 a.m. New York time on the
Quotation Date, in the case of a Set Rate Auction (or, in any
such case, such other time and date as the Company and the
Administrative Agent, with the consent of the Majority Banks, may
agree with notice by the Administrative Agent to the Banks of
such agreement), the Company shall notify the Administrative
Agent of its acceptance or nonacceptance of the offers so
notified to it pursuant to Section 2.03(d) hereof (and the
failure by the Company to notify the Administrative Agent of its
acceptance of an offer as provided above shall be deemed to be
nonacceptance by the Company of such offer), and the
Administrative Agent shall promptly notify each affected Bank.
In the case of acceptance, such notice by the Administrative
Agent shall specify the aggregate principal amount of offers for
each Interest Period that are accepted and the lowest and highest
Competitive Bid Margins and Competitive Bid Rates that were
accepted for each Interest Period. The Company may accept any
Competitive Bid Quote in whole or in part (provided that any
Competitive Bid Quote accepted in part from any Bank shall be
$10,000,000 or an integral multiple of $5,000,000 in excess
thereof); provided that:
(i) the aggregate principal amount of each Competitive Bid
Borrowing may not exceed the applicable amount set forth in the
related Competitive Bid Quote Request;
(ii) the aggregate principal amount of each Competitive Bid
Borrowing shall be $10,000,000 or an integral multiple of
$5,000,000 in excess thereof, but shall not cause the limits
specified in Section 2.03(a) hereof to be violated;
(iii) acceptance of offers may only be made in ascending order
of Competitive Bid Margins or Competitive Bid Rates, as the case
may be, in each case beginning with the lowest rates so offered;
(iv) the Company may not accept any offer if the Administrative
Agent has advised the Company that such offer fails to comply
with Section 2.03(c)(ii) hereof or otherwise fails to comply with
the requirements of this Agreement (including, without
limitation, Section 2.03(a) hereof); and
(v) the aggregate principal amount of each Competitive Bid
Borrowing from any Bank may not exceed any applicable Competitive
Bid Loan Limit of such Bank.
If offers are made by two or more Banks with the same Competitive
Bid Margins or Competitive Bid Rates, as the case may be, for a
greater aggregate principal amount than the amount in respect of
which offers are permitted to be accepted for the related
Interest Period, the principal amount of Competitive Bid Loans in
respect of which such offers are accepted shall be allocated by
the Company among such Banks as nearly as possible (in integral
multiples of $5,000,000) in proportion to the aggregate principal
amount of such offers. Determinations by the Company of the
amounts of Competitive Bid Loans shall be conclusive in the
absence of manifest error.
(f) Any Bank whose offer to make any Competitive Bid Loan has
been accepted shall, not later than 1:00 p.m. New York time on
the date specified for the making of such Loan, make the amount
of such Loan available to the Administrative Agent at the
Principal Office in immediately available funds. The amount so
received by the Administrative Agent shall, subject to the terms
and conditions of this Agreement, be made available to the
Company on such date by depositing the same, in immediately
available funds, in an account of the Company maintained with
Chase at the Principal Office designated by the Company.
(g) Except for the purpose and to the extent expressly stated in
Section 2.04(a) hereof, the amount of any Competitive Bid Loan
made by any Bank shall not constitute a utilization of such
Bank's Revolving Credit Commitment.
2.04 Changes of Commitments.
(a) Voluntary Reduction of Commitments. The Company shall have
the right to terminate or reduce the unused amount of the
Commitments (solely for which purpose the amount of any
Competitive Bid Borrowing shall be deemed to be a pro rata (based
upon Commitments) utilization of each Bank's Revolving Credit
Commitment) at any time or from time to time upon not less than
three Business Days' prior notice to the Administrative Agent
(which shall promptly notify the Banks) of each such termination
or reduction, which notice shall specify the effective date
thereof and the amount of any such reduction (which shall be
$10,000,000 or an integral multiple of $1,000,000 in excess
thereof) and shall be irrevocable and effective only upon receipt
by the Administrative Agent.
(b) Termination of Commitments. The Commitments shall terminate
at the close of business on the sixth Business Day after the
Tender Offer Expiration Date unless the Tender Offer Closing Date
has occurred on or before such date. Otherwise (i) the Revolving
Credit Commitments shall terminate on the Revolving Commitment
Termination Date and (iii) the Term Loan Commitments shall
terminate on the Term Loan Commitment Termination Date.
(c) No Reinstatement. Commitments once terminated or reduced
may not be reinstated.
(d) Bank Replacement. If any Bank requests compensation
pursuant to Section 5.01 hereof (other than compensation
requested under Section 5.01(e) hereof), the Company may, so long
as no Default shall have occurred and be continuing, require that
such Bank transfer all or a portion of its rights and obligations
(including, without limitation, its Loans and Commitments) as a
"Bank" under this Agreement and such Bank's Notes to one or more
banks (such bank or banks being herein referred to as the
"Replacement Bank(s)") identified by the Company in a notice (the
"Replacement Notice") to the Administrative Agent (which shall
promptly notify the affected Bank) specifying the date on which
such transfer is to occur and whether all or a portion of said
rights and obligations are proposed to be transferred, which
notice shall be given not less than 10 Business Days prior to the
date on which such transfer is to occur; provided that no such
transfer shall be made unless (i) the Administrative Agent shall
have consented to the identity of the Replacement Bank(s), which
consent shall not be unreasonably withheld or delayed, (ii) the
aggregate amount of compensation that would be requested by the
Replacement Bank(s) under Section 5.01 hereof would be less than
the aggregate amount of compensation requested by the affected
Bank in respect of the rights and obligations proposed to be
transferred, (iii) the Commitments proposed to be transferred to
the Replacement Bank(s), together with the aggregate amount of
the Commitments transferred pursuant to this Section 2.04(d)
during the preceding period of 12 months shall not exceed 17.5%
of the aggregate amount of the Commitments as in effect on the
date of the proposed transfer and (iv) the amount of the
Commitments proposed to be transferred to any Replacement Bank
shall be at least $10,000,000 (or, if less than $10,000,000, the
entire Commitments of the affected Bank). On the date of any
transfer permitted under this Section 2.04(d), (x) the affected
Bank shall sell, assign and transfer to the Replacement Bank(s),
and the Replacement Bank(s) shall acquire and assume from the
affected Bank, all (or the lesser portion specified in the
Replacement Notice) of the rights and obligations of the affected
Bank as a "Bank" under this Agreement and under the affected
Bank's Notes (collectively, the "Transferred Interest") and
(y) the Company and/or the Replacement Bank(s) shall pay to the
affected Bank an amount equal to all principal, interest, fees
and other amounts then owing under this Agreement and the
affected Bank's Notes in respect of the Transferred Interest
(including, without limitation, any amounts which would be
payable in respect of the Transferred Interest under
Sections 5.01 and 5.05 hereof as if the affected Bank's Loans
were being prepaid in full on such date), whereupon the
Replacement Bank(s) shall become "Bank(s)" for all purposes of
this Agreement having all the rights and obligations, including,
without limitation, Commitment(s), under this Agreement of
"Bank(s)" holding the Transferred Interest, and the obligations
of the affected Bank in respect of the Transferred Interest shall
terminate (provided that the obligations of the Company under
Sections 5.01, 5.05 and 11.03 hereof to the affected Bank in
respect of the Transferred Interest shall survive such transfer
as provided in Section 11.07 hereof). If the Commitments of any
Bank that is a Reference Bank (or whose Applicable Lending Office
is a Reference Bank, as the case may be) shall terminate (other
than pursuant to Section 9 hereof), such Reference Bank shall
thereupon cease to be a Reference Bank and, if as a result of the
foregoing, there shall be only two Reference Banks remaining,
then the Administrative Agent (after consultation with the
Company) shall, by notice to the Company and the Banks, designate
another Bank as a Reference Bank.
2.05 Fees.
(a) The Company shall pay to the Administrative Agent for
account of each Term Loan Bank a commitment fee on the daily
average unused amount of such Bank's Term Loan Commitment for the
period from and including the date of this Agreement to but
excluding the earlier of the date such Term Loan Commitment is
terminated or the Term Loan Commitment Termination Date at a rate
per annum equal to 1/4 of 1% per annum. Accrued commitment fee
shall be payable on each Quarterly Date and on the earlier of the
date the Term Loan Commitments are terminated or the Term Loan
Commitment Termination Date.
(b) The Company shall pay to the Administrative Agent for
account of each Revolving Credit Bank a facility fee on the daily
average amount of such Bank's Revolving Credit Commitment
(whether or not utilized) for the period from and including the
date hereof to but excluding the earlier of the date such
Commitment is terminated or the Revolving Commitment Termination
Date at a rate per annum equal to the Applicable Facility Fee
Rate. Accrued facility fee shall be payable on each Quarterly
Date and on the earlier of the date the Revolving Credit
Commitments are terminated or the Revolving Commitment
Termination Date.
(c) The Company shall pay to the Administrative Agent for the
Administrative Agent's account a fee of $3,000 for each
Competitive Bid Quote Request (for which purpose multiple
Competitive Bid Quote Requests contained in a single request
shall be deemed to be a single Competitive Bid Quote Request
notwithstanding the provisions of the second sentence of
Section 2.03(b) hereof), such fees to be payable in arrears on
the last Business Day of each month.
2.06 Lending Offices. The Loans of each Type made by each Bank
shall be made and maintained at such Bank's Applicable Lending
Office for Loans of such Type.
2.07 Several Obligations; Remedies Independent. The failure of
any Bank to make any Loan to be made by it on the date specified
therefor shall not relieve any other Bank of its obligation to
make any Loan to be made by such other Bank on such date, but no
Bank shall be responsible for the failure of any other Bank to
make a Loan to be made by such other Bank. The amounts payable
by the Company at any time hereunder and under the Notes to each
Bank shall be a separate and independent debt and each Bank shall
be entitled to protect and enforce its rights arising out of this
Agreement and the Notes, and it shall not be necessary for any
other Bank or the Administrative Agent to consent to, or be
joined as an additional party in, any proceedings for such
purposes.
2.08 Notes.
(a) The Syndicated Loans made by each Bank shall be evidenced
(i) if Term Loans, by a single promissory note of the Company in
substantially the form of Exhibit A-1 hereto, dated the
Restatement Date, payable to such Bank in a principal amount
equal to its Term Loan Commitment and otherwise duly completed
(each a "Term Note" and, collectively, the "Term Notes"), and
(ii) if Revolving Loans, by a single promissory note of the
Company substantially in the form of Exhibit A-2 hereto, dated
the Restatement Date, payable to such Bank in a principal amount
equal to its Revolving Credit Commitment as originally in effect
and otherwise duly completed (each a "Revolving Note" and
collectively the "Revolving Notes"). The date, amount, Type and
interest rate of each Term Loan and each Revolving Loan made by
each Bank, and all payments made on account of the principal
thereof, shall be recorded by such Bank on its books and, prior
to any transfer of the Note evidencing the same, endorsed by such
Bank on the schedule attached to such Note or any continuation
thereof; provided that the failure by such Bank to make such
recordation or endorsement shall not relieve the Company of any
of its obligations hereunder or under such Note.
(b) The Competitive Bid Loans made by each Bank shall be
evidenced by a single promissory note of the Company in
substantially the form of Exhibit A-3 hereto, dated the
Restatement Date, payable to such Bank and otherwise duly
completed. The date, amount, Type, interest rate and maturity
date of each Competitive Bid Loan made by any Bank, and all
payments made on account of the principal thereof, shall be
recorded by such Bank on its books and, prior to any transfer of
such Note held by it, endorsed by such Bank on the schedule
attached to such Note or any continuation thereof; provided that
the failure by such Bank to make such recordation or endorsement
shall not relieve the Company of any of its obligations hereunder
or under such Note.
(c) No Note may be subdivided, by exchange for promissory notes
of lesser denominations or otherwise, except in connection with a
permitted assignment of all or any portion of such Bank's
Commitments, Loans and Notes pursuant to Sections 11.06(b) and
11.06(e) hereof.
2.09 Optional Prepayments and Conversions or Continuations of
Loans. Subject to Sections 4.06, 4.07 and 5.05 hereof, the
Company shall have the right to prepay Syndicated Loans, or to
Convert Syndicated Loans of one Type into Syndicated Loans of
another Type or Continue Syndicated Loans of one Type as
Syndicated Loans of the same Type, at any time or from time to
time, provided that: (a) the Company shall give the
Administrative Agent notice of each such prepayment, Conversion
or Continuation as provided in Section 4.07 hereof (and, upon the
date specified in any such notice of prepayment, the amount to be
prepaid shall become due and payable hereunder); (b) Eurodollar
Loans may be prepaid or Converted only on the last day of an
Interest Period for such Loans; and (c) prepayments of the Term
Loans shall be applied to the installments of the Term Loans in
the direct order of their maturities. Competitive Bid Loans may
not be prepaid (provided that this sentence shall not affect the
Company's obligation to pay Loans pursuant to Section 9 hereof).
Notwithstanding the foregoing, and without limiting the rights
and remedies of the Banks under Section 9 hereof, in the event
that any Event of Default specified in Section 9(a) or 9(b)(i)
hereof shall have occurred and be continuing, the Administrative
Agent may (and at the request of the Majority Banks shall)
suspend the right of the Company to Convert any Syndicated Loan
into a Eurodollar Loan, or to Continue any Syndicated Loan as a
Eurodollar Loan, in which event all Syndicated Loans shall be
Converted into (on the last day(s) of the respective Interest
Periods therefor) or Continued as Base Rate Loans.
2.10 Mandatory Prepayments.
(a) Repayment of Intercompany Loans. The Company shall apply
the proceeds of any repayment or prepayment of the principal of
any Intercompany Loans (but not other indebtedness owing by the
Subsidiary Guarantor to the Company) to the repayment or
prepayment of the Term Loans; provided that any such payment on
the Intercompany Loans shall be applied first to the installment
of the Term Loans falling on or next succeeding (as the case may
be) the date of such payment and thereafter pro rata to the
remaining installments; and provided further that for these
purposes conversion of the Intercompany Loans into equity shall
not constitute a repayment of the principal of the Intercompany
Loans.
(b) Funded Debt Incurrence. Upon the creation, incurrence or
issuance by the Company or any of the Subsidiaries of any Funded
Debt (other than the Loans), the Company shall, unless after
giving effect to such Funded Debt and the proposed use of the
proceeds thereof the Leverage Ratio would be less than 55%,
prepay the Term Loans in an aggregate amount equal to the lesser
of (i) 100% of all cash received by the Company and the
Subsidiaries in respect of such Funded Debt (net of reasonable
expenses incurred by the Company and the Subsidiaries in
connection therewith) and (ii) an amount sufficient to reduce the
Leverage Ratio to less than 55%, such prepayment to be applied
pro rata to the remaining installments of the Term Loans.
Section 3. Payments of Principal and Interest.
3.01 Repayment of Loans.
(a) The Company hereby promises to pay to the Administrative
Agent for account of each Bank the entire outstanding principal
amount of such Bank's Revolving Loans, and each Revolving Loan
shall mature, on the Revolving Commitment Termination Date.
(b) The Company hereby promises to pay to the Administrative
Agent for account of each Bank that makes any Competitive Bid
Loan the principal amount of such Competitive Bid Loan, and such
Competitive Bid Loan shall mature, on the last day of the
Interest Period for such Competitive Bid Loan.
(c) The Company hereby promises to pay to the Administrative
Agent for account of the Banks the aggregate principal amount of
the Term Loans in 19 consecutive quarterly installments payable
on the Principal Payment Dates, each of the first 18 installments
being in the aggregate amount of $110,000,000 and the last
installment being in the aggregate amount of $220,000,000. If
the Company does not borrow the full amount of the aggregate Term
Loan Commitments on or before the Term Loan Commitment
Termination Date, the shortfall shall be applied to reduce the
foregoing installments ratably.
3.02 Interest. The Company will pay to the Administrative Agent
for account of each Bank interest on the unpaid principal amount
of each Loan made by such Bank for the period commencing on the
date of such Loan to but excluding the date such Loan shall be
paid in full, at the following rates per annum:
(a) during such period as such Loan is a Base Rate Loan, the
Base Rate (as in effect from time to time) plus the Applicable
Margin (if any);
(b) during such period as such Loan is a Eurodollar Loan, for
each Interest Period relating thereto, the Fixed Rate for such
Loan for such Interest Period plus the Applicable Margin;
(c) if such Loan is a LIBOR Bid Loan, the LIBO Rate for such
Loan for the Interest Period therefor plus (or minus) the
Competitive Bid Margin quoted by the Bank making such Loan in
accordance with Section 2.03 hereof; and
(d) if such Loan is a Set Rate Loan, the Competitive Bid Rate
for such Loan for the Interest Period therefor quoted by the Bank
making such Loan in accordance with Section 2.03 hereof.
Notwithstanding the foregoing, the Company will pay to the
Administrative Agent for account of each Bank interest at the
applicable Post-Default Rate on any principal of any Loan made by
such Bank, and on any other amount payable by the Company
hereunder or under the Note held by such Bank to or for account
of such Bank, which shall not be paid in full when due (whether
at stated maturity, by acceleration or otherwise), for the period
commencing on the due date thereof until the same is paid in
full. Accrued interest on each Loan shall be payable (i) in the
case of a Base Rate Loan, quarterly on the Quarterly Dates,
(ii) in the case of a Eurodollar Loan or a Competitive Bid Loan,
on the last day of each Interest Period therefor and, if such
Interest Period is longer than 90 days (in the case of a Set Rate
Loan) or three months (in the case of a Eurodollar Loan or a
LIBOR Bid Loan), at 90-day or three-month intervals,
respectively, following the first day of such Interest Period,
and (iii) in the case of any Loan, upon the payment or prepayment
thereof or the Conversion of such Loan to a Loan of another Type
(but only on the principal amount so paid, prepaid or Converted),
except that interest payable at the Post-Default Rate shall be
payable from time to time on demand. Promptly after the
determination of any interest rate provided for herein or any
change therein, the Administrative Agent shall notify the Banks
to which such interest is payable and the Company thereof.
Section 4. Payments; Pro Rata Treatment; Computations; Etc.
4.01 Payments. Except to the extent otherwise provided herein,
all payments of principal, interest and other amounts to be made
by the Company under this Agreement and the Notes shall be made
in Dollars, in immediately available funds, to the Administrative
Agent at account number NYAO-DI-900-9-000002 maintained by the
Administrative Agent with Chase at the Principal Office, not
later than 1:00 p.m. New York time on the date on which such
payment shall become due (each such payment made after such time
on such due date to be deemed to have been made on the next
succeeding Business Day). Any Bank for whose account any such
payment is to be made, may (but shall not be obligated to) debit
the amount of any such payment which is not made by such time to
any ordinary deposit account of the Company with such Bank (with
notice to the Company and the Administrative Agent). The Company
shall, at the time of making each payment under this Agreement or
any Note for account of any Bank, specify to the Administrative
Agent the Loans or other amounts payable by the Company hereunder
to which such payment is to be applied (and in the event that it
fails to so specify, or if an Event of Default has occurred and
is continuing, the Administrative Agent shall distribute such
payment to the Banks pro rata (based on the amounts then due and
payable hereunder to the Banks) and each Bank may apply the
portion of such payment received by it to such amounts then due
and payable hereunder to such Bank as such Bank may determine).
Each payment received by the Administrative Agent under this
Agreement or any Note for account of a Bank shall be paid
promptly to such Bank, in immediately available funds, and, in
the case of principal or interest on any Loan, for account of
such Bank's Applicable Lending Office for such Loan. If the due
date of any payment under this Agreement or any Note would
otherwise fall on a day which is not a Business Day such date
shall be extended to the next succeeding Business Day, and
interest shall be payable for any principal so extended for the
period of such extension.
4.02 Pro Rata Treatment. Except to the extent otherwise
provided herein: (a) each borrowing from the Banks under
Section 2.01 hereof shall be made from the Banks, each payment of
Fees under Section 2.05 hereof shall be made for account of the
Banks, and each termination or reduction of the amount of the
Commitments under Section 2.04 hereof shall be applied to the
Commitments of the Banks, pro rata according to the amounts of
their respective Commitments; (b) the making, Conversion and
Continuation of Revolving Loans and Term Loans of a particular
Type (other than Conversions provided for by Section 5.04 hereof)
shall be made pro rata among the relevant Banks according to the
amounts of their respective Revolving Credit and Term Loan
Commitments (in the case of making of Loans) or their respective
Revolving Credit and Term Loans (in the case of Conversions and
Continuations of Loans) and the then current Interest Period for
each Loan of such Type shall be coterminous; (c) each payment of
principal of Syndicated Loans of any Class and Type by the
Company shall be made for account of the Banks pro rata in
accordance with the respective unpaid principal amounts of the
Syndicated Loans of such Class and Type held by the Banks; and
(d) each payment of interest on Syndicated Loans of any Class and
Type by the Company shall be made for account of the Banks pro
rata in accordance with the amounts of interest on Syndicated
Loans of such Class and Type due and payable to the respective
Banks.
4.03 Computations. Interest on Competitive Bid Loans and
Eurodollar Loans, and Fees payable pursuant to Section 2.05
hereof, respectively, shall be computed on the basis of a year of
360 days and actual days elapsed (including the first day but
excluding the last day) occurring in the period for which
payable, and interest on Base Rate Loans shall be computed on the
basis of a year of 365 or 366 days, as the case may be (or, for
each day the interest on Base Rate Loans is calculated by
reference to the Federal Funds Rate, on a year of 360 days), and
actual days elapsed (including the first day but excluding the
last day) occurring in the period for which payable.
4.04 Non-Receipt of Funds by the Administrative Agent. Unless
the Administrative Agent shall have been notified by a Bank or
the Company (each, a "Payor") prior to the date on which the
Payor is to make payment to the Administrative Agent of (in the
case of a Bank) the proceeds of a Loan to be made by it hereunder
or (in the case of the Company) a payment to the Administrative
Agent for account of one or more of the Banks hereunder (such
payment being herein called the "Required Payment"), which notice
shall be effective upon receipt, that it does not intend to make
the Required Payment to the Administrative Agent, the
Administrative Agent may assume that the Required Payment has
been made and may, in reliance upon such assumption (but shall
not be required to), make the amount thereof available to the
intended recipient(s) on such date; and, if the Payor has not in
fact made the Required Payment to the Administrative Agent, the
recipient(s) of such payment shall, on demand, repay to the
Administrative Agent the amount so made available together with
interest thereon in respect of each day during the period
commencing on the date such amount was so made available by the
Administrative Agent until the date the Administrative Agent
recovers such amount at a rate per annum equal to the Federal
Funds Rate for such day.
4.05 Sharing of Payments, Etc. The Company agrees that, in
addition to (and without limitation of) any right of set-off,
bankers' lien or counterclaim a Bank may otherwise have, each
Bank shall be entitled, at its option, to offset balances held by
such Bank or any of its affiliates at any of their respective
offices for account of the Company, in Dollars or in any other
currency, against any principal of or interest on any of such
Bank's Loans, or any other amount payable to such Bank hereunder,
which is not paid when due (regardless of whether such balances
are then due to the Company), in which case it shall promptly
notify the Company and the Administrative Agent thereof, provided
that such Bank's failure to give such notice shall not affect the
validity thereof. If any Bank shall obtain payment of any
principal of or interest on any Syndicated Loan of any Class and
Type made by it to the Company under this Agreement through the
exercise of any right of set-off, banker's lien or counterclaim
or similar right or otherwise, and, as a result of such payment,
such Bank shall have received a greater percentage of the
principal or interest then due hereunder by the Company to such
Bank in respect of Syndicated Loans of such Class and Type than
the percentage received by any other Banks, it shall promptly
purchase from such other Banks participations in (or, if and to
the extent specified by such Bank, direct interests in) the
Syndicated Loans of such Class and Type made by such other Banks
(or in interest due thereon, as the case may be) in such amounts,
and make such other adjustments from time to time as shall be
equitable, to the end that all the Banks shall share the benefit
of such excess payment (net of any expenses which may be incurred
by such Bank in obtaining or preserving such excess payment) pro
rata in accordance with the unpaid principal and/or interest on
the Syndicated Loans of such Class and Type held by each of the
Banks. To such end all the Banks shall make appropriate
adjustments among themselves (by the resale of participations
sold or otherwise) if such payment is rescinded or must otherwise
be restored. The Company agrees that any Bank so purchasing a
participation (or direct interest) in the Syndicated Loans made
by other Banks (or in interest due thereon, as the case may be)
may exercise all rights of set-off, bankers' lien, counterclaim
or similar rights with respect to such participation (or direct
interest) as fully as if such Bank were a direct holder of Loans
in the amount of such participation. Nothing contained herein
shall require any Bank to exercise any such right or shall affect
the right of any Bank to exercise, and retain the benefits of
exercising, any such right with respect to any other indebtedness
(including, without limitation, Competitive Bid Loans) or
obligation of the Company. If under any applicable bankruptcy,
insolvency or other similar law, any Bank receives a secured
claim in lieu of a set-off to which this Section 4.05 applies,
such Bank shall, to the extent practicable, exercise its rights
in respect of such secured claim in a manner consistent with the
rights of the Banks entitled under this Section 4.05 to share in
the benefits of any recovery on such secured claim.
4.06 Minimum Amounts. Except for mandatory prepayments pursuant
to Section 2.10 hereof and Conversions or prepayments made
pursuant to Section 5.04 hereof, each borrowing, Conversion and
partial prepayment of principal of Syndicated Loans shall be in
an aggregate amount at least equal to $10,000,000 or in multiples
of $1,000,000 in excess thereof (borrowings, Conversions and
prepayments of or into Loans of different Types or, in the case
of Eurodollar Loans, having different Interest Periods at the
same time hereunder to be deemed separate borrowings, Conversions
and prepayments for purposes of the foregoing, one for each Type
or Interest Period). Anything in this Agreement to the contrary
notwithstanding, the aggregate principal amount of Syndicated
Loans of each Class having the same Interest Period shall be in
an amount at least equal to $10,000,000 or in multiples of
$1,000,000 in excess thereof and, if any Syndicated Loans would
otherwise be in a lesser principal amount for any period, such
Loans shall be Base Rate Loans during such period.
4.07 Certain Notices. Except as otherwise provided in
Section 2.03 hereof with respect to Competitive Bid Loans,
notices by the Company to the Administrative Agent of
terminations or reductions of the Commitments, of borrowings,
Conversions, Continuations and optional prepayments of Loans and
of Classes of Loans, of Types of Loans and of the duration of
Interest Periods shall be irrevocable and shall be effective only
if received by the Administrative Agent not later than 11:00 a.m.
New York time on the number of Business Days prior to the date of
the relevant termination, reduction, Conversion, Continuation or
prepayment or the first day of such Interest Period specified
below:
Number of
Business
Notice Days Prior
Termination or reduction 3
of Commitments
Borrowing or prepayment of, or Conversions same day
into, Base Rate Loans
Borrowing or prepayment of, Conversions 3
into, Continuations as, or
duration of Interest Period
for, Eurodollar Loans
Each such notice of termination or reduction shall specify the
amount and the Class of the Commitments to be terminated or
reduced. Each such notice of borrowing, Conversion, Continuation
or optional prepayment shall specify the Class of Loans to be
borrowed, Converted, Continued or prepaid and the amount (subject
to Section 4.06 hereof) and Type of each Loan to be borrowed,
Converted, Continued or prepaid (and, in the case of a borrowing,
Conversion, the Type of Loan to result from such Conversion) and
the date of borrowing, Conversion, Continuation or optional
prepayment (which shall be a Business Day). Each such notice of
the duration of an Interest Period shall specify the Loans to
which such Interest Period is to relate. The Administrative
Agent shall promptly notify the Banks of the contents of each
such notice. In the event that the Company fails to select the
Type of Loan, or the duration of any Interest Period for any
Eurodollar Loan, within the time period and otherwise as provided
in this Section 4.07, such Loan (if outstanding as a Eurodollar
Loan) will be automatically Converted into a Base Rate Loan on
the last day of the then current Interest Period for such Loan or
(if outstanding as a Base Rate Loan) will remain as, or (if not
then outstanding) will be made as, a Base Rate Loan.
Section 5. Yield Protection and Illegality.
5.01 Additional Costs.
(a) The Company shall pay directly to each Bank from time to
time such amounts as such Bank may determine to be necessary to
compensate it for any costs which such Bank determines are
attributable to its making or maintaining of any Fixed Rate Loans
or its obligation to make any Fixed Rate Loans hereunder, or any
reduction in any amount receivable by such Bank hereunder in
respect of any of such Loans or such obligation (such increases
in costs and reductions in amounts receivable being herein called
"Additional Costs"), resulting from any Regulatory Change which:
(i) changes the basis of taxation of any amounts payable to such
Bank under this Agreement or its Notes in respect of any of such
Loans (other than taxes imposed on the overall net income of such
Bank or of its Applicable Lending Office for any of such Loans by
the jurisdiction in which such Bank has its principal office or
such Applicable Lending Office); or (ii) imposes or modifies any
reserve, special deposit, minimum capital, capital ratio or
similar requirements relating to any extensions of credit or
other assets of, or any deposits with or other liabilities of,
such Bank (including any of such Loans or any deposits referred
to in the definition of "Fixed Base Rate" in Section 1.01
hereof), or any Commitment of such Bank; or (iii) imposes any
other condition affecting this Agreement or its Notes (or any of
such extensions of credit or liabilities) or Commitment. Each
Bank will designate a different Applicable Lending Office for the
Loans of such Bank affected by such event if such designation
will avoid the need for, or reduce the amount of, such
compensation and will not, in the sole opinion of such Bank, be
disadvantageous to such Bank, provided that such Bank shall have
no obligation to so designate an Applicable Lending Office
located in the United States. If any Bank requests compensation
from the Company under this Section 5.01(a), the Company may, by
notice to such Bank (with a copy to the Administrative Agent),
suspend the obligation of such Bank to make additional or
Continue Loans of the Type with respect to which such
compensation is requested, or to Convert Loans of any Type into
Loans of such Type, until the Regulatory Change giving rise to
such request ceases to be in effect (in which case the provisions
of Section 5.04 hereof shall be applicable).
(b) Without limiting the effect of the provisions of
Section 5.01(a) hereof, in the event that, by reason of any
Regulatory Change, any Bank either (i) incurs Additional Costs
based on or measured by the excess above a specified level of the
amount of a category of deposits or other liabilities of such
Bank which includes deposits by reference to which the interest
rate on Eurodollar Loans is determined as provided in this
Agreement or a category of extensions of credit or other assets
of such Bank which includes Eurodollar Loans or (ii) becomes
subject to restrictions on the amount of such a category of
liabilities or assets which it may hold, then, if such Bank so
elects by notice to the Company (with a copy to the
Administrative Agent), the obligation of such Bank to make
additional or Continue, or to Convert Loans of any other Type
into, Loans of such Type hereunder shall be suspended until such
Regulatory Change ceases to be in effect (in which case the
provisions of Section 5.04 hereof shall be applicable).
(c) Without limiting the effect of the foregoing provisions of
this Section 5.01 (but without duplication), the Company shall
pay directly to each Bank from time to time on request such
amounts as such Bank may determine to be necessary to compensate
such Bank or any corporation controlling such Bank for any costs
which such Bank determines are attributable to the maintenance by
such Bank (or any Applicable Lending Office), pursuant to any law
or regulation or any interpretation, directive or request
(whether or not having the force of law) of any court or
governmental or monetary authority (i) following any Regulatory
Change or (ii) implementing any risk-based capital guideline or
other requirement heretofore or hereafter issued by any
government or governmental authority implementing at the national
level the Basle Accord (including, without limitation, the Final
Risk-Based Capital Guidelines), of capital in respect of its
Commitment (such compensation to include, without limitation, an
amount equal to any reduction of the rate of return on assets or
equity of such Bank (or any Applicable Lending Office) or any
corporation controlling such Bank to a level below that which
such Bank (or any Applicable Lending Office) or such corporation
could have achieved but for such law, regulation, interpretation,
directive or request). Each Bank will notify the Company that it
is entitled to compensation pursuant to this Section 5.01(c) as
promptly as practicable after it determines to request such
compensation.
(d) Each Bank will furnish the Company with a certificate
setting forth the basis, calculation and amount of each request
by such Bank for compensation under paragraph (a), (c) or (e) of
this Section 5.01. Notwithstanding anything in this Section 5.01
to the contrary, compensation with respect to any event entitling
any Bank to compensation under paragraph (a) or (c) of this
Section 5.01 shall be payable to such Bank only for costs
incurred by such Bank from and after the date 45 days after the
date that such Bank furnishes to the Company notice of its
intention to request the payment of compensation with respect to
such event. Determinations and allocations by any Bank for
purposes of this Section 5.01 of the effect of any Regulatory
Change pursuant to Section 5.01(a) or (b) hereof, or of the
effect of capital maintained pursuant to Section 5.01(c) hereof,
on its costs or rate of return of maintaining Loans or its
obligation to make Loans, or on amounts receivable by it in
respect of Loans, and of the amounts required to compensate such
Bank under this Section 5.01, shall be conclusive, provided that
such determinations and allocations are made on a reasonable
basis.
(e) Without limiting the effect of the foregoing, the Company
shall pay to each Bank on the last day of each Interest Period
(or, if later, on the date of the notice provided for below) so
long as such Bank is maintaining reserves against "Eurocurrency
liabilities" under Regulation D (or, unless the provisions of
paragraph (b) above are applicable, so long as such Bank is, by
reason of any Regulatory Change, maintaining reserves against any
other 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 through the
Administrative Agent within 45 days after the last day of such
Interest Period) equal to the product of the following for each
Eurodollar Loan for each day during such Interest Period:
(i) the principal amount of such Eurodollar Loan outstanding on
such day; and
(ii) the remainder of (x) a fraction the numerator of which is
the rate (expressed as a decimal) at which interest accrues on
such Eurodollar Loan for such Interest Period as provided in this
Agreement (less the Applicable Margin) and the denominator of
which is one minus the effective rate (expressed as a decimal) at
which such reserve requirements are imposed on such Bank on such
day minus (y) such numerator; and
(iii) 1/360.
5.02 Limitation on Types of Loans. Anything herein to the
contrary notwithstanding, if, on or prior to the determination of
any Fixed Base Rate for any Interest Period:
(a) the Administrative Agent determines (which determination
shall be conclusive) that quotations of interest rates for the
relevant deposits referred to in the definition of "Fixed Base
Rate" in Section 1.01 hereof are not being provided in the
relevant amounts or for the relevant maturities for purposes of
determining rates of interest for any Type of Fixed Rate Loans as
provided herein; or
(b) the Majority Banks determine (or any Bank that has
outstanding a Competitive Bid Quote with respect to a LIBOR Bid
Loan determines), which determination shall be conclusive, and
notify (or notifies, as the case may be) the Administrative Agent
that the relevant rates of interest referred to in the definition
of "Fixed Base Rate" in Section 1.01 hereof upon the basis of
which the rate of interest for Eurodollar Loans (or LIBOR Bid
Loans, as the case may be) for such Interest Period is to be
determined are not likely adequately to cover the cost to such
Banks (or to such quoting Bank) of making or maintaining such
Type of Loans;
then the Administrative Agent shall give the Company and each
Bank prompt notice thereof, and so long as such condition remains
in effect, the Banks (or such quoting Bank) shall be under no
obligation to make additional Loans of such Type.
5.03 Illegality. Notwithstanding any other provision of this
Agreement, in the event that it becomes unlawful for any Bank or
its Applicable Lending Office to honor its obligation to make or
maintain Eurodollar Loans and LIBOR Bid Loans hereunder, then
such Bank shall promptly notify the Company thereof (with a copy
to the Administrative Agent) and such Bank's obligation to make
Eurodollar Loans shall be suspended until such time as such Bank
may again make and maintain Eurodollar Loans (in which case the
provisions of Section 5.04 hereof shall be applicable), and such
Bank shall no longer be obligated to make any LIBOR Bid Loan that
it has offered to make.
5.04 Base Rate Loans Pursuant to Sections 5.01 and 5.03. If the
obligation of any Bank to make Fixed Rate Loans shall be
suspended pursuant to Section 5.01 or 5.03 hereof (Loans of such
Type being herein called "Affected Loans" and such Type being
herein called the "Affected Type"), all Loans (other than
Competitive Bid Loans) which would otherwise be made by such Bank
as Loans of the Affected Type shall be made instead as Base Rate
Loans (and, if an event referred to in Section 5.01(b) or 5.03
hereof has occurred and such Bank so requests by notice to the
Company with a copy to the Administrative Agent, all Affected
Loans of such Bank then outstanding shall be automatically
Converted into Base Rate Loans on the last day(s) of the then
current Interest Period(s) for Affected Loans (or, in the case of
a Conversion required by Section 5.01(b) or 5.03 hereof, on such
earlier date as such Bank may specify to the Company with a copy
to the Administrative Agent)) and, unless and until such Bank
gives notice as provided below that the circumstances specified
in Section 5.01 or 5.03 hereof that gave rise to such Conversion
no longer exist:
(a) to the extent that such Bank's Affected Loans have been so
Converted, all payments and prepayments of principal that would
otherwise be applied to such Bank's Affected Loans shall be
applied instead to its Base Rate Loans; and
(b) all Loans that would otherwise be made or Continued by such
Bank as Loans of the Affected Type shall be made or Continued
instead as Base Rate Loans, and all Loans of such Bank that would
otherwise be Converted into Loans of the Affected Type shall be
Converted instead into (or shall remain as) Base Rate Loans.
If such Bank gives notice to the Company with a copy to the
Administrative Agent that the circumstances specified in
Section 5.01 or 5.03 hereof that gave rise to the Conversion of
such Bank's Affected Loans pursuant to this Section 5.04 no
longer exist (which such Bank agrees to do promptly upon such
circumstances ceasing to exist) at a time when Loans of the
Affected Type made by other Banks are outstanding, such Bank's
Base Rate Loans shall be automatically Converted, on the first
day(s) of the next succeeding Interest Period(s) for such
outstanding Loans of the Affected Type, to the extent necessary
so that, after giving effect thereto, all Loans held by the Banks
holding Loans of the Affected Type and by such Bank are held pro
rata (as to principal amounts, Types and Interest Periods) in
accordance with their respective Commitments.
5.05 Compensation. The Company shall pay to the Administrative
Agent for account of each Bank, upon the request of such Bank
through the Administrative Agent, such amount or amounts as shall
be sufficient (in the reasonable opinion of such Bank) to
compensate it for any loss, cost or expense which such Bank
determines is attributable to:
(a) any payment or Conversion of a Fixed Rate Loan or a Set Rate
Loan for any reason (including, without limitation, under
Section 5.04 hereof or by reason of the acceleration of the Loans
pursuant to Section 9 hereof) on a date other than the last day
of the Interest Period for such Loan; or
(b) any failure by the Company for any reason (including,
without limitation, the failure of any of the conditions
precedent specified in Section 6 hereof to be satisfied) to
borrow a Fixed Rate Loan or a Set Rate Loan (with respect to
which, in the case of a Competitive Bid Loan, the Company has
accepted a Competitive Bid Quote) from such Bank on the date for
such borrowing specified in the relevant notice of borrowing
given pursuant to Section 2.02 or 2.03(b) hereof.
Without limiting the effect of the preceding sentence, such
compensation shall include an amount equal to the excess, if any,
of (i) the amount of interest which otherwise would have accrued
on the principal amount so paid or Converted or not borrowed for
the period from the date of such payment, Conversion or failure
to borrow to the last day of the Interest Period for such Loan
(or, in the case of a failure to borrow, the Interest Period for
such Loan which would have commenced on the date specified for
such borrowing) at the applicable rate of interest for such Loan
provided for herein over (ii) the interest component of the
amount such Bank would have bid in the London interbank market
(if such Loan is a Eurodollar Loan or a LIBOR Bid Loan) or the
United States certificate of deposit market for issuance at face
value of certificates of deposit (if such Loan is a Set Rate
Loan) for Dollar deposits in amounts comparable to such principal
amount and with maturities comparable to such period (as
reasonably determined by such Bank).
Section 6. Conditions Precedent.
6.01 Initial Loan. The obligation of each Bank to make its
initial Loan hereunder on the Tender Offer Closing Date is
subject to the receipt by the Administrative Agent of the
following documents and the occurrence of the following events,
as the case may be, each of which shall be satisfactory to the
Administrative Agent (and to the extent specified below, to the
Majority Banks or to each Bank) in form and substance:
(a) Corporate Documents. Certified copies of the charter and
by-laws of each Credit Party and all corporate action taken by
each Credit Party approving each Credit Document to which it is a
party and borrowings by the Company hereunder (including, without
limitation, a certificate setting forth the resolutions of the
Board of Directors of each Credit Party adopted in respect of the
transactions contemplated thereby).
(b) Incumbency Certificate. A certificate of each Credit Party
in respect of each of the officers (i) who is authorized to sign
each Credit Document to which it is a party on its behalf and
(ii) who will, until replaced by another officer or officers duly
authorized for that purpose, act as its representative for the
purposes of signing documents and giving notices and other
communications in connection with the Credit Documents and the
transactions contemplated thereby. The Administrative Agent and
each of the Banks may conclusively rely on such certificate until
it receives notice in writing from each Credit Party to the
contrary.
(c) Officer's Certificate. A certificate of a senior officer of
the Company to the effect set forth in clauses (a) and (b) of
Section 6.04 hereof.
(d) Opinions. (i) An opinion of Sheppard, Mullin, Richter &
Hampton, special counsel to the Company, substantially in the
form of Exhibit B-1 hereto, (ii) an opinion of Gibson, Dunn &
Crutcher, special counsel to the Company, substantially in the
form of Exhibit B-2 hereto and (iii) an opinion of Richard R.
Molleur, Esq., Corporate Vice President and General Counsel of
the Company, substantially in the form of Exhibit B-3 hereto (and
the Company hereby instructs each such counsel to deliver such
opinions to the Banks and the Administrative Agent).
(e) Opinion. An opinion of Milbank, Tweed, Hadley & McCloy,
special New York counsel to the Banks, substantially in the form
of Exhibit C hereto.
(f) Notes. The Notes, duly completed and executed.
(g) Existing Northrop Credit Agreement. To the extent not
effected by Section 11.12 hereof, evidence that any commitments
to extend credit under the Existing Northrop Credit Agreement
shall have been terminated.
(h) Subsidiary Guaranty. The Subsidiary Guaranty, duly executed
and delivered by the Purchaser.
(i) Pledge Agreement. The Pledge Agreement, duly executed and
delivered by the Company, certificates representing all of the
capital stock of the Purchaser (together with undated stock
powers duly executed and delivered by the Company in blank), the
Intercompany Note duly endorsed to the order of the
Administrative Agent and appropriate Uniform Commercial Code
financing statements naming the Company, as debtor, the
Administrative Agent, as secured party, and describing the
Collateral (as defined in the Pledge Agreement), to perfect the
security interests created by the Pledge Agreement.
(j) Merger Agreement. A true and correct copy of the Merger
Agreement, which shall have been duly completed, executed and
delivered and which shall be in full force and effect.
(k) Tender Offer. True and correct copies of the Tender Offer
Documents and the Additional Tender Offer Documents (which
Additional Tender Offer Documents, other than any Additional
Tender Offer Document consisting solely of an amendment extending
the Tender Offer Expiration Date, shall be satisfactory to the
Administrative Agent, provided that any Additional Tender Offer
Document amending the terms or conditions of the Tender Offer in
any material respect, other than any amendment consisting solely
of an extension of the Tender Offer Expiration Date, shall be
satisfactory to each of the Banks); each of the conditions to
purchase contained in the Offer to Purchase shall have been
satisfied to the satisfaction of, or, if applicable, waived with
the consent of, each of the Banks (any such conditions requiring
the satisfaction of the Company or the Purchaser being deemed for
this purpose to require the satisfaction of each of the Banks);
and evidence that all of the Shares tendered pursuant to the
Offer to Purchase shall have been accepted for payment by the
Purchaser in accordance with the terms of the Offer to Purchase.
(l) Fees and Expenses. All costs, fees and expenses, and all
other compensation contemplated by the Credit Documents and by
the Fee Letter dated March 10, 1994 between the Company and the
Co-Agents identified on the front page of this Agreement, due
from the Company to the Administrative Agent or the Banks
(including, without limitation, legal fees and expenses) shall
have been paid by the Company to the extent due.
(m) Governmental Approvals. All necessary governmental and
third party approvals in connection with the transactions
contemplated by the Documents and otherwise referred to therein
shall have been obtained and remain in effect, and all applicable
waiting periods shall have expired without any action being taken
by any competent authority which restrains or prevents such
transactions or would, in the reasonable determination of the
Majority Banks, be likely to have a Material Adverse Effect.
(n) Litigation. Except as set forth on Schedule III hereto, no
litigation by any entity (private or governmental) shall be
pending or threatened (a) with respect to this Agreement or any
other Document or (b) which the Majority Banks shall reasonably
determine would be likely to have a Material Adverse Effect.
(o) Existing Grumman Credit Agreements. Evidence that the
Existing Grumman Credit Agreements shall have been terminated.
(p) Miscellaneous. Such other documents as the Administrative
Agent or any Bank or special New York counsel to the Banks may
reasonably request.
6.02 Subsequent Loans. The obligation of the Banks to make
Loans during the period commencing on the date following the
Tender Offer Closing Date and ending on the Term Loan Commitment
Termination Date shall be subject to the following conditions:
(a) The Required Shares shall have been purchased under the
Tender Offer on the Tender Offer Closing Date.
(b) The conditions precedent set forth in clauses (m) and (n) of
Section 6.01 hereof shall continue to be satisfied.
6.03 Conditions Precedent to the Loans from the Merger Effective
Date. The obligation of each Bank to make its Loans on and after
the Merger Effective Date is subject to the receipt by the
Administrative Agent of the following documents:
(a) Organizational Documentation, Etc. To the extent not
theretofore delivered, copies of, or amendments to, the
Certificate of Incorporation and By-Laws of Grumman and any
agreements entered into by Grumman governing the terms and
relative rights of its capital stock, in each case certified as
true and complete by an appropriate governmental or corporate
official.
(b) Proxy Statement. The Proxy Statement, which shall be
satisfactory in form and substance to each of the Banks.
(c) Acquisition Intangibles. Evidence that, after giving effect
to the Merger, Acquisition Intangibles will not exceed
$2,050,000,000.
(d) Opinions of Counsel. (i) An opinion of Sheppard, Mullin,
Richter & Hampton, special counsel to the Company, substantially
in the form of Exhibit B-4 hereto, (ii) an opinion of Gibson,
Dunn & Crutcher, special counsel to the Company, substantially in
the form of Exhibit B-5 hereto and (iii) an opinion of the
General Counsel of Grumman, substantially in the form of
Exhibit B-6 hereto.
6.04 Initial and Subsequent Loans. The obligation of any Bank
to make any Loan (including, without limitation, any Competitive
Bid Loan and its initial Syndicated Loan) to the Company upon the
occasion of each borrowing hereunder is subject to the further
conditions precedent that, as of the date of such Loan and after
giving effect thereto:
(a) no Default shall have occurred and be continuing; and
(b) the representations and warranties made by the Company in
Section 7 hereof and in Section 2 of the Pledge Agreement and by
the Subsidiary Guarantor in Section 3 of the Subsidiary Guaranty
shall be true in all material respects on and as of the date of
the making of such Loan with the same force and effect as if made
on and as of such date.
Each notice of borrowing by the Company hereunder shall
constitute a certification by the Company to the effect set forth
in the preceding sentence (both as of the date of such notice
and, unless the Company otherwise notifies the Administrative
Agent prior to the date of such borrowing, as of the date of such
borrowing).
Section 7. Representations and Warranties.
7.01 Corporate Existence. Each of the Company and the Material
Subsidiaries: (a) is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction
of its incorporation; (b) has all requisite corporate power, and
has all material governmental licenses, authorizations, consents
and approvals, necessary to own its assets and carry on its
business as now being conducted; and (c) is qualified to do
business and is in good standing in all jurisdictions in which
the failure to so qualify would have a Material Adverse Effect.
7.02 Financial Condition. (a) The consolidated statement of
financial position of the Company and the Subsidiaries as at
December 31, 1993 and the related consolidated statements of
operations, changes in shareholders' equity and cash flows of the
Company and the Subsidiaries for the fiscal year ended on said
date, with the opinion thereon of Deloitte and Touche, heretofore
furnished to each of the Banks, are complete and present fairly,
in all material respects, the consolidated financial condition of
the Company and the Subsidiaries as at said date and the
consolidated results of their operations for the fiscal year, all
in accordance with generally accepted accounting principles and
practices applied on a consistent basis. Neither the Company nor
any of the Subsidiaries had on said dates any material contingent
liabilities, liabilities for taxes, unusual forward or long-term
commitments or unrealized or anticipated losses from any
unfavorable commitments, except as referred to or reflected or
provided for in said statements of financial position as at said
dates. Except as expressly disclosed in writing to the Banks
prior to the date of this Agreement, since December 31, 1993,
there has been no material adverse change in the consolidated
financial condition or operations, or the prospects or business
taken as a whole, of the Company and the Subsidiaries from that
set forth in said financial statements as at said date.
(b) The consolidated balance sheet of Grumman and its
subsidiaries as at December 31, 1993 and the related consolidated
statements of income, common shareholders' equity and cash flows
of Grumman and its subsidiaries for the period ended on such
date, with the opinion thereon of Arthur Andersen & Co., and the
pro forma (after giving effect to the Merger and the related
financing thereof) consolidated balance sheet of Grumman and its
subsidiaries as at December 31, 1993, copies of which have
heretofore been furnished to each Bank, present fairly, in all
material respects, the financial position of Grumman and its
subsidiaries, at the date of said statements and the results for
the periods covered thereby (or, in the case of the pro forma
balance sheet, present a good faith estimate of the consolidated
pro forma financial condition of Grumman and its subsidiaries at
the date thereof). All such financial statements (other than the
aforesaid pro forma balance sheet) have been prepared in
accordance with generally accepted accounting principles and
practices consistently applied. Except as expressly disclosed in
writing to the Banks prior to the date of this Agreement, since
December 31, 1993, there has been no material adverse change in
the consolidated financial condition or operations, or the
prospects or business taken as a whole, of Grumman and its
subsidiaries from that set forth in said financial statements as
at said date.
(c) On and as of the Merger Effective Date on a pro forma basis
after giving effect to the Merger and all debt assumed and
incurred and to be assumed and incurred by Grumman in connection
therewith (including, without limitation, debt owing to the
Company), (x) the sum of the assets of Grumman, at a fair
valuation, will exceed its debts, (y) Grumman will not have
assumed and incurred nor intended to, or believes that it will
not, assume and incur debts beyond its ability to pay such debts
as such debts mature and (z) Grumman will have sufficient capital
with which to conduct its business. For purposes of this
Section 7.02(c), "debt" means any liability on a claim, and
"claim" means (i) right to payment whether or not such a right is
reduced to judgment, liquidated, unliquidated, fixed, contingent,
matured, unmatured, disputed, undisputed, legal, equitable,
secured or unsecured; or (ii) right to an equitable remedy for
breach of performance if such breach gives rise to a payment,
whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured, unmatured, disputed,
undisputed, secured or unsecured.
(d) The "Strategic Analysis dated April 5, 1994" prepared by the
Company and delivered to the Banks prior to the date hereof (the
"Projections") shall be based on good faith estimates and
assumptions made by the management of the Company, and on the
date hereof such management believed that the Projections were
then reasonable and attainable, it being recognized by the Banks,
however, that projections as to future events are not to be
viewed as facts and that the actual results during the period or
periods covered by the Projections probably will differ from the
projected results and that the differences may be material.
7.03 Litigation. There are no legal or arbitral proceedings or
any proceedings by or before any governmental or regulatory
authority or agency, now pending or (to the knowledge of the
Company) threatened against the Company or any Material
Subsidiary which, if adversely determined, would result, in the
opinion of the Company, in any Material Adverse Effect except as
heretofore disclosed to the Banks in the Company's Annual Report
on Form 10-K for the calendar year ended December 31, 1993,
copies of which have been furnished to the Banks, or in Schedule
III hereto.
7.04 No Breach. Except as expressly disclosed in writing to the
Banks on or before the Restatement Date, none of the execution
and delivery of any of the Documents, the borrowing of the Loans
hereunder, the acquisition of the Shares pursuant to the Tender
Offer, the consummation of the Merger and the other transactions
herein contemplated and compliance with the terms and provisions
hereof will conflict with or result in a breach of, or require
any consent under, the charter or by-laws of the Company, or any
applicable law or regulation, or any order, writ, injunction or
decree of any court or governmental authority or agency, or any
agreement or instrument to which the Company or any Material
Subsidiary, or Grumman or any of its subsidiaries, is a party or
by which it is bound or to which it is subject, or constitute a
default under any such agreement or instrument, or result in the
creation or imposition of any Lien upon any of the revenues or
assets of the Company or any Material Subsidiary, or Grumman or
any of its subsidiaries, pursuant to the terms of any such
agreement or instrument.
7.05 Corporate Action. Each Credit Party has all necessary
corporate power and authority to execute, deliver and perform its
obligations under the Documents; and the execution, delivery and
performance by each of the Credit Parties of the Documents have
been duly authorized by all necessary corporate action on its
part; and this Agreement has been duly and validly executed and
delivered by the Company and constitutes, and each of the other
Documents when executed and delivered for value will constitute,
legal, valid and binding obligations of each Credit Party
thereto, enforceable in accordance with its terms, except as such
enforceability may be limited by (a) bankruptcy, insolvency,
reorganization, moratorium or other similar laws of general
applicability affecting the enforcement of creditors' rights and
(b) the application of general principles of equity (regardless
of whether such enforceability is considered in a proceeding in
equity or at law).
7.06 Approvals. Except as expressly disclosed in writing to the
Banks prior to the date of this Agreement, no authorizations,
approvals, consents or licenses of, and no filings or
registrations with, any governmental or regulatory authority or
agency are necessary to authorize or are necessary in connection
with (i) the execution, delivery and performance of any Document
or (ii) the legality, validity, binding effect or enforceability
of any Document.
7.07 Use of Proceeds, Etc. (a) The proceeds of the Loans shall
be used as required by Section 2.01.B hereof.
(b) Neither the making of any
Loan hereunder, nor the use of the proceeds thereof, will violate
the provisions of Regulation G, T, U or X of the Board of
Governors of the Federal Reserve System and no part of the
proceeds of any Loan will be used to purchase or carry any Margin
Stock in violation of Regulation U or X or to extend credit for
the purpose of purchasing or carrying any Margin Stock in
violation of Regulation U or X. At the request of any Bank, the
Company will furnish to such Bank in connection with any Loan a
statement in conformity with the requirements of Form U-1
referred to in Regulation U.
7.08 ERISA. Each of the Company and the ERISA Affiliates has
fulfilled its obligations under the minimum funding standards of
ERISA and the Code with respect to each Plan, is in compliance in
all material respects with the presently applicable provisions of
ERISA and the Code and has not incurred any liability to the PBGC
or any Plan or Multiemployer Plan (other than a liability to make
payments or contributions in the ordinary course of business).
No Termination Event has occurred and is continuing. As used in
this Agreement, the term "Termination Event" shall mean any event
or condition which might constitute grounds under Section 4042 of
ERISA for the termination of, or for the appointment of a trustee
to administer, any Plan and which involves a liability of the
Company to PBGC in excess of $25,000,000.
7.09 Taxes. United States Federal income tax returns of the
Company and its Material Subsidiaries have been examined and
reported on by the Internal Revenue Service or closed by
applicable statutes and satisfied through the fiscal year of the
Company ended December 31, 1985. Each of the Company and the
Subsidiaries has filed all United States Federal and State income
tax returns which, to the knowledge of the officers of the
Company, are required to be filed by it and has paid all taxes
due pursuant to such returns or pursuant to any assessment
received by the Company or any Subsidiary to the extent that such
taxes have become due (except as to such taxes which are being
contested in good faith by appropriate proceedings). The
charges, accruals and reserves on the books of the Company and
the Subsidiaries in respect of taxes and other governmental
charges are, in the opinion of the Company, adequate. The
California Franchise tax returns of the Company have been
examined and reported on by the California Franchise Tax Board or
closed by applicable statutes and satisfied for all fiscal years
prior to, and including, the fiscal year ended December 31, 1985.
7.10 Funded Debt. As of the date of this Agreement, no default
exists under the provisions of any instrument evidencing Funded
Debt or of any agreement relating thereto.
7.11 Properties. The Company has, and each of the Material
Subsidiaries has, good and marketable title to its respective
properties and assets, including the properties and assets
reflected in the balance sheet as at December 31, 1993
hereinabove described (other than Properties disposed of in the
ordinary course of business), subject to no Lien of any kind
except Liens permitted by Section 8.11 hereof.
7.12 Environmental Matters.
(a) Except as disclosed in the Company's or in Grumman's Annual
Report on Form 10-K for the calendar year ended December 31,
1993, neither the Company nor any Subsidiary, nor Grumman nor any
of its subsidiaries, (i) has received notice or otherwise
obtained knowledge of any claim, demand, action, event,
condition, report or investigation indicating or concerning any
potential or actual liability which would individually or in the
aggregate have a Material Adverse Effect arising in connection
with: (1) any non-compliance with or violation of the
requirements of any applicable Federal, state and local
environmental health and safety statutes and regulations or
(2) the release or threatened release of toxic or hazardous
waste, substance or constituent, or other substance into the
environment, (ii) has any threatened or actual liability in
connection with the release or threatened release of any toxic or
hazardous waste, substance or constituent, or other substance
into the environment which would individually or in the aggregate
have a Material Adverse Effect, (iii) has received notice or
otherwise obtained knowledge of any Federal or state
investigation evaluating whether any remedial action is needed to
respond to a release or threatened release of any toxic or
hazardous waste, substance or constituent or other substance into
the environment for which the Company or any Subsidiary, or
Grumman or any of its subsidiaries, is or may be liable, which
remedial action would have a Material Adverse Effect or (iv) has
received notice that the Company or any Subsidiary, or Grumman or
any of its subsidiaries, is or may be liable to any Person under
the Comprehensive Environmental Response, Compensation, and
Liability Act, as amended, 42 U.S.C. Sect. 9601 et seq. ("CERCLA"),
or any analogous state law which liability would have a Material
Adverse Effect.
(b) Each of the Company, each Subsidiary, Grumman and each of
its subsidiaries is in compliance with the financial
responsibility requirements of all Federal and state
environmental laws, including, without limitation, those
contained in 40 C.F.R., Parts 264 and 265, Subpart H, and any
similar state law requirements.
7.13 True and Complete Disclosure. All factual information
(taken as a whole) heretofore or contemporaneously furnished by
or on behalf of the Company or its Subsidiaries in writing to the
Administrative Agent or any Bank (including, without limitation,
all information contained in the Documents) for purposes of or in
connection with this Agreement or any transaction contemplated
herein is, and all other such factual information (taken as a
whole) hereafter furnished by or on behalf of the Company or its
Subsidiaries in writing to any Bank will be, true and accurate in
all material respects on the date as of which such information is
dated or certified and not incomplete by omitting to state any
material fact necessary to make such information (taken as a
whole) not misleading at such time in light of the circumstances
under which such information was provided. There is no fact
known to the Company which has, or is reasonably likely to have,
a Material Adverse Effect which has not been disclosed herein or
in such other documents, certificates and statements furnished to
the Banks for use in connection with the transactions
contemplated hereby.
7.14 Offer to Purchase. All necessary material governmental and
third party approvals in connection with the purchase of Shares
pursuant to the Offer to Purchase and the Merger, the
transactions contemplated thereby and otherwise referred to
therein have been or, prior to the time when required, will have
been, obtained and remain in effect, and all applicable waiting
periods have or, prior to the time when required, will have,
expired without, in all such cases, any action being taken by any
competent authority which restrains, prevents, imposes materially
adverse conditions upon or unduly hinders, the consummation of
the purchase of Shares pursuant to the Offer to Purchase or the
Merger. Additionally, except to the extent consented to by the
Majority Banks there does not exist any judgment, order,
injunction or other restraint issued or filed with respect to the
purchase of Shares pursuant to the Offer to Purchase, the
consummation of the Merger, the making of Loans or the
performance by the Credit Parties of their obligations under the
Documents. At the time of their dissemination to the public, the
Offer to Purchase and any amendments or supplements thereto and
all documents required to be filed by the Purchaser or Grumman
pursuant to the Exchange Act, copies of which documents have been
or will be delivered to each Bank (other than exhibits to such
filings, which have been made available to each Bank upon request
therefor), do not and will not contain any untrue statement of a
material fact or omit to state any material fact necessary in
order to make the statements therein, in light of the
circumstances under which made, not misleading.
7.15 Merger. On and as of the Merger Effective Date, all
material consents and approvals of, and filings and registrations
with, and all other actions in respect of, all governmental
agencies, authorities or instrumentalities required in order to
make or consummate the Merger, or otherwise required in
connection with the Merger, will have been obtained, given, filed
or taken and are or will be in full force and effect (or
effective judicial relief with respect thereto has been
obtained). All actions pursuant to or in furtherance of the
Merger have been and will be taken in compliance with all
applicable laws.
7.16 Acquisition Intangibles. After giving effect to the
Merger, Acquisition Intangibles will not exceed $2,050,000,000.
Section 8. Covenants of the Company. The Company agrees that,
so long as any of the Commitments are in effect and until payment
in full of all Loans hereunder, all interest thereon and all
other amounts payable by the Company hereunder:
8.01 Financial Statements. The Company shall deliver to each of
the Banks:
(a) within 90 days after the end of each fiscal year of the
Company, (i) a consolidated statement of financial position of
the Company and the Subsidiaries as at the close of such fiscal
year and consolidated statements of operations, changes in
shareholders' equity and cash flows of the Company and the
Subsidiaries for such year, certified by Deloitte and Touche or
by other independent public accountants selected by the Company
and reasonably satisfactory to the Administrative Agent and
(ii) the Consolidated Financial Statements for such year;
(b) within 60 days after the end of each of the first three
fiscal quarters of each fiscal year of the Company, (i) an
unaudited consolidated statement of financial position of the
Company and the Subsidiaries as at the end of such quarter and
unaudited consolidated statements of operations, changes in
shareholders' equity and cash flows of the Company and the
Subsidiaries for such quarter and for the period from the
beginning of the fiscal year to the end of such quarter,
certified by an authorized financial or accounting officer of the
Company and (ii) the Consolidated Financial Statements for such
fiscal quarter;
(c) within 90 days after the end of each fiscal year of the
Company, a list (in reasonable detail) of the guarantees referred
to in Section 8.09(d) hereof, as of the end of such year,
certified by an authorized officer of the Company or authorized
employee of the Company who is satisfactory to the Administrative
Agent, except that any individual guarantee in an amount of less
than $10,000,000 need not be reported separately;
(d) promptly upon becoming available, copies of all financial
statements, reports, notices, proxy statements and final
prospectuses sent by the Company to shareholders or the SEC or
any governmental agency successor to any or all of the functions
of said Commission;
(e) subject to Government restrictions, such other statement or
statements of the position and affairs of the Company and of the
Subsidiaries and the status of their contracts, open accounts and
budgets or forecasts, and other financial information, as may be
reasonably requested by the Administrative Agent;
(f) with each of the audited financial statements required to be
delivered under Section 8.01(a) hereof, a certificate by the
independent public accountants certifying such statements to the
effect that they are familiar with the provisions of this
Agreement and that, in auditing the financial statements which
they certified, they acquired no knowledge of any Default or, if
the contrary is the case, specifying the nature of such Default;
(g) with each of the financial statements required to be
delivered under Section 8.01(a) or Section 8.01(b) hereof, a
statement by an authorized financial or accounting officer of the
Company to the effect that no Default has occurred and is
continuing, or if any Default has occurred and is continuing,
describing such Default and the action taken or proposed to be
taken by the Company with respect thereto, and a detailed
computation, in form and substance satisfactory to the
Administrative Agent, of the financial calculations required in
Sections 8.06, 8.08, 8.09, 8.13, 8.14 and 8.15 hereof;
(h) with each of the financial statements required to be
delivered under Section 8.01(a) or 8.01(b) hereof, a certificate
of an authorized financial or accounting officer of the Company,
in form and substance satisfactory to the Administrative Agent,
setting forth the Leverage Ratio as at the last day of the fiscal
period of the Company as to which such financial statements
relate; and
(i) promptly after the Company knows or has reason to know that
any Default has occurred, a notice of such Default describing the
same in reasonable detail and, together with such notice or as
soon thereafter as is reasonably practicable, a description of
the action that the Company has taken or proposes to take with
respect thereto in such detail as the Company reasonably believes
to be appropriate.
8.02 Existence, Payment of Taxes, ERISA, Etc. The Company
shall, and shall cause each of the Material Subsidiaries to:
(a) preserve and maintain its legal existence and all of its
material rights, privileges, licenses and franchises (provided
that nothing in this Section 8.02 shall prohibit any transaction
expressly permitted under Section 8.07 or 8.10 hereof);
(b) comply in all material respects with the requirements of all
applicable laws, rules, regulations and orders of governmental or
regulatory authorities if failure to comply with such
requirements is reasonably likely (either individually or in the
aggregate) to have a Material Adverse Effect; and
(c) promptly pay and discharge, and cause each Subsidiary to
promptly pay and discharge, all taxes, assessments and
governmental charges prior to the date on which material
penalties attach thereto, but only to the extent that such taxes,
assessments and charges shall not be contested in good faith and
by appropriate proceedings by the Company or such Subsidiary.
The Company shall furnish to the Administrative Agent the
following:
(i) As soon as possible and in any event within 30 days after
the Company knows or has reason to know that any Termination
Event (as defined in Section 7.08 hereof) has occurred, a
statement of a senior financial or accounting officer of the
Company describing such Termination Event and the action, if any,
which the Company proposes to take with respect thereto;
(ii) Promptly after receipt thereof by the Company, copies of
each notice received from the PBGC of its intention to terminate
any Plan or to have a trustee appointed to administer any Plan;
and
(iii) Promptly after request therefor, such other documents and
information relating to any Plan as the Administrative Agent may
reasonably request from time to time.
8.03 Notice of Litigation. The Company shall promptly give
notice in writing to the Administrative Agent (which shall
promptly notify the Banks) of any litigation or proceeding
against the Company or any Subsidiary if in the opinion of the
Senior Vice President and General Counsel of the Company or any
person acting in such capacity such action or proceeding is
reasonably likely to have a Material Adverse Effect.
8.04 Insurance. The Company shall maintain, and cause each
Subsidiary to maintain, insurance with responsible companies in
such amounts and against such risks as is usually carried by
owners of similar businesses and Property in the same general
area in which the Company or such Subsidiary operates, including
reasonable war, comprehensive and commercial risk insurance when
and if available.
8.05 Access to Books and Properties. The Company shall, as may
be reasonably requested, give any representatives of the Banks
access, subject to Government restrictions, during normal
business hours to, and permit them to examine, copy or make
extracts from, any and all books, records and documents in the
possession of the Company or any Subsidiary relating to its
affairs and to inspect any Properties of the Company or any
Subsidiary.
8.06 Restricted Payments. The Company shall not declare, pay or
authorize any Restricted Payment if (a) any such Restricted
Payment is not paid out of Consolidated Net Income Available For
Restricted Payments, (b) at the time of, and immediately after,
the making of any such Restricted Payment (or the declaration of
any dividend except a stock dividend) a Default has occurred or
(c) the making of any such Restricted Payment would reduce
Consolidated Shareholders' Equity below the amount thereof which
the Company is required to maintain pursuant to Section 8.08
hereof.
8.07 Sale, Lease, Etc. The Company shall not, and shall not
permit any Subsidiary to, sell, lease, assign, transfer or
otherwise dispose of (each, a "disposition") Property having a
book value which, together with the book value of all Property
theretofore disposed of since January 1, 1994, equal or exceeds
10% of the total book value of all Property of the Company and
its Subsidiaries as at the last day of the fiscal quarter ending
on or most recently ended prior to such disposition, excluding
from the operation of this clause: (a) dispositions in the
ordinary and normal operation of business for full and adequate
consideration, (b) dispositions between the Company and any
Subsidiary or between Subsidiaries, (c) dispositions of
investments permitted by Section 8.12 hereof, (d) dispositions of
Property determined by the Company to be no longer useful in the
business of the Company or any Subsidiary and (e) any disposition
by the Purchaser, prior to the Merger Effective Date, of Shares
purchased by the Purchaser, as long as (i) the disposition is for
cash, (ii) fair value is received and (iii) the cash is deposited
in the Collateral Account under the Pledge Agreement.
8.08 Maintenance of Shareholders' Equity. The Company shall not
permit the amount of Consolidated Shareholders' Equity at any
time to be less than the sum of (a) $1,000,000,000 plus (b) the
cumulative sum of 50% of Net Income (but without reduction for
net losses) for each fiscal quarter of the Company commencing
with the fiscal quarter ending on March 31, 1994 plus (c) 75% of
the cumulative additions to shareholders' equity resulting from
Equity Issuances effected after January 1, 1994.
8.09 Contingent Liabilities. The Company shall not, and shall
not permit any Subsidiary to, assume, guarantee (which for
purposes of this Section 8.09 shall include agreements to
purchase or to provide funds for the payment of obligations of,
to maintain the net worth or working capital or other financial
test of, or otherwise become liable upon the obligations of, any
Person) or endorse any obligation of any Person (including,
without limitation, by causing a bank or similar institution to
issue a letter of credit or similar instrument to support any
obligation of any Person), or suffer to exist any of the
foregoing, except that:
(a) the Company may assume, guarantee or endorse any obligation
of the Company or any Subsidiary;
(b) any Subsidiary may assume, guarantee or endorse any
obligation of the Company or any other Subsidiary;
(c) the Company or any Subsidiary may, in the ordinary and
normal operation of its business as presently conducted (it being
understood that performance guaranty bonds, bank guarantees for
foreign work (including offset and countertrade activities),
advance payment bonds, direct guarantees for performance and
other surety bonds will be so considered), assume, guarantee or
endorse any obligation of any Person other than the Company and
the Subsidiaries;
(d) the Company or any Subsidiary may guarantee any direct
obligation for the payment of money of any of its customers
(other than the Company and the Subsidiaries) in connection with
any customer financing; and
(e) the Company or any Subsidiary may issue a guarantee of any
obligation of a Person other than the Company or any Subsidiary,
or assume an obligation of any such Person;
provided that (i) the excess (if any) of (x) the sum of the
aggregate amount of all obligations referred to in clauses (a)
and (b) above (to the extent said obligations do not otherwise
constitute Funded Debt) for which the Company or any Subsidiary
shall have caused a bank or similar institution to issue a letter
of credit or similar instrument in support thereof plus the
aggregate amount of all obligations referred to in clauses (c)
and (d) above over (y) 30% of Consolidated Shareholders' Equity
shall be deemed Funded Debt for the purposes of this Agreement
and (ii) the aggregate amount of all obligations referred to in
clause (e) above guaranteed or assumed by the Company or any
Subsidiary (excluding (aa) obligations of any Person other than
for the payment of borrowed money if the long-term corporate debt
of such Person is at such time rated "BBB" or higher by Standard
& Poor's Corporation or "Baa2" or higher by Moody's Investors
Service, Inc. unless the Company or any Subsidiary shall have
caused a bank or similar institution to issue a letter of credit
or similar instrument to support such obligations and
(bb) obligations referred to in clause (c) above) shall be deemed
Funded Debt for the purposes of this Agreement.
8.10 Acquisition of Assets. The Company shall not, and shall
not permit any Subsidiary to, acquire any Property of any other
Person through merger, consolidation or otherwise (including
acquisition of capital stock of any other Person if such
acquisition is analogous in either purpose or effect to a
consolidation or merger) except (a) in the ordinary course of
business, unless immediately after giving effect to such
acquisition (i) in the case of a merger or consolidation
involving the Company, the Company shall be the surviving
corporation and (ii) no Default shall have occurred and be
continuing, (b) the Acquisition and (c) the Vought Acquisition.
8.11 Limitation on Liens. The Company shall not, and shall not
permit any Subsidiary to, create, assume or suffer to exist any
Lien on any of its Property, whether now owned or hereafter
acquired, except:
(a) deposits or pledges to secure payments of workers'
compensation, unemployment insurance, old age pensions or other
social security, or in connection with or to secure the
performance of bids, tenders, contracts (other than contracts for
the repayment of borrowed money) or leases, or to secure
statutory obligations or surety or appeal bonds, or other pledges
or deposits for purposes of like nature in the ordinary and
normal operation of its business;
(b) Liens created in favor of the Government or any other
contracting party or customer in connection with advance or
progress payments;
(c) mechanics', carriers', workers', repairmen's or other like
Liens arising in the ordinary course of business in respect of
obligations which are not overdue;
(d) Liens for taxes which at the particular time are not due, or
remain payable without penalty, or which are being contested in
good faith and by proper proceedings;
(e) Liens securing obligations assumed in connection with a
transaction permitted by Section 8.10 hereof;
(f) purchase money liens on fixed assets (including trust deeds
or first mortgages) given substantially concurrently with the
acquisition of the fixed assets and liens existing on such fixed
assets at the time of acquisition thereof, conditional sales
agreements or other title retention agreements with respect to
fixed assets hereafter acquired, and extensions and renewals of
any of the same; provided that (i) the indebtedness secured by
any such Lien shall be reasonably related to the fair market
value of the related asset acquired by the Company or a
Subsidiary, as the case may be, and (ii) no such Lien shall
extend to any Property other than that then being acquired;
(g) Liens created by the Credit Documents; and
(h) Liens on the Shares prior to the Merger Effective Date;
provided that the aggregate amount of indebtedness or obligations
(whether or not assumed by the Company or a Subsidiary) secured
by all Liens and agreements permitted by clauses (e) and (f) of
this Section 8.11 shall not at any time exceed $250,000,000.
8.12 Loans and Investments. The Company shall not, and shall
not permit any Subsidiary to, make any loan to or investment in
others except:
(a) loans and investments made in the ordinary and normal
operation of its business as presently conducted;
(b) reasonable advances to its subcontractors and suppliers in
anticipation of deliveries;
(c) loans to or investments in others (including the Vought
Acquisition), whether domestic or foreign persons, in amounts
which do not exceed $250,000,000 in the aggregate at any time
outstanding;
(d) loans to or investments in others, whether domestic or
foreign persons, to the extent covered by guarantees or insurance
covering all political and credit risks issued by the Overseas
Private Investment Corporation or another agency of the United
States acceptable to the Administrative Agent;
(e) investments in prime quality short-term money market
instruments and direct obligations of the United States and
agencies thereof, having a remaining term to maturity of not more
than five years; and
(f) loans to, and investments in, the Purchaser by the Company
with the proceeds of Term Loans.
8.13 Limitation on Funded Debt. The Company shall not permit
the Leverage Ratio to exceed the following respective percentages
at any time during the following respective periods:
Period Percentage
From the date hereof
through December 31, 1994 75%
From January 1, 1995
through June 30, 1995 70%
From July 1, 1995
through December 31, 1995 65%
From January 1, 1996
and all times thereafter 60%
8.14 Limitation on Subsidiary Debt. The Company will not permit
the Funded Debt of all of the Subsidiaries (other than Funded
Debt owing to the Company) to exceed $275,000,000 in the
aggregate at any one time outstanding.
8.15 Interest Coverage Ratio. The Company will not permit the
Interest Coverage Ratio to be less than the following respective
ratios at any time during the following respective periods:
Period Ratio
From September 30, 1994
through September 30, 1995 3.00 to 1
From October 1, 1995
through June 30, 1996 3.50 to 1
From July 1, 1996
through December 31, 1996 3.75 to 1
From January 1, 1997
and at all times thereafter 4.00 to 1
8.16 Use of Proceeds. The
Company shall use the proceeds of the Loans hereunder as
contemplated by Section 2.01.B hereof and in compliance with all
applicable legal and regulatory requirements, including, without
limitation, Regulations U and X, the Securities Act and the
Exchange Act.
8.17 Margin Stock. From and after the Merger Effective Date,
the Company shall not permit more than 25% of the value (as
determined by any reasonable method) of the Property of the
Company and the Subsidiaries subject to the restrictions of
Section 8.07 or 8.11 hereof (or any similar restriction) to be
represented by margin stock (within the meaning of Regulation U
or X).
8.18 Purchaser Indebtedness. The Company will not permit the
Purchaser (prior to the Merger Effective Date) to create, incur
or suffer to exist any indebtedness other than (i) Intercompany
Loans and (ii) indebtedness under the Tender Offer in respect of
the purchase price of the tendered Shares.
8.19 Merger, Control, Etc. The Company shall (i) cause the
Merger to be consummated as promptly as practical and in no event
later than the date which is 120 days after the Tender Offer
Closing Date, (ii) take all actions available to it to cause
designees of the Company to constitute a majority of the Board of
Directors of Grumman as promptly as reasonably practical after
the Merger Effective Date, (iii) comply with all of its covenants
and agreements contained in the Merger Agreement, (iv) exercise
all of its rights and powers to cause Grumman to comply with all
of Grumman's covenants and conditions contained in the Merger
Agreement and (v) not waive or agree to amend any covenant
binding upon Grumman and its subsidiaries that is set forth in
Article 6 of the Merger Agreement (except to the extent the
requested action would not result in a breach of any of the
covenants contained in this Agreement (assuming same were then
binding upon Grumman and its subsidiaries)).
8.20 Interest Rate Protection Agreements. The Company will not
permit any of its Subsidiaries to enter into or become obligated
in respect of any Interest Rate Protection Agreement. The
Company will not enter into or become obligated in respect of any
Interest Rate Protection Agreement if the notional principal
amount of such Interest Rate Protection Agreement, together with
the aggregate notional principal amount of all other Interest
Rate Protection Agreements to which the Company is a party, would
exceed $600,000,000.
Section 9. Events of Default. If one or more of the following
events (herein called "Events of Default") shall occur and be
continuing:
(a) The Company shall defaultin the payment of any principal of
any Loan; or the Company shall default in the payment of any
interest on any Loan or any other amount payable by it hereunder
to any Bank or the Administrative Agent when due which nonpayment
shall have continued for a period of two Business Days or more;
or
(b) (i) Default by the Company or any Subsidiary in the payment
of any indebtedness of the Company or any Subsidiary, or in the
payment of any other obligation, whether direct or contingent,
for borrowed money or the acquisition of capital equipment on a
title retention or net lease basis, or in the performance or
observance of the terms of any instrument, as at any time
amended, pursuant to which any such obligation was created or
securing any such obligation or providing for any such
acquisition or lease, or (ii) any event specified in any note,
agreement, indenture or other document evidencing or relating to
any such obligation shall occur if the effect of such event is to
cause, or (with the giving of any notice or the lapse of time or
both) to permit the holder or holders of such indebtedness (or a
trustee or agent on behalf of such holder or holders) to cause,
such indebtedness to become due prior to its stated maturity;
except, in each case that may otherwise be covered by this
paragraph (b), for a default on indebtedness or obligations not
exceeding $50,000,000 in an aggregate amount (but excluding
indebtedness of Grumman or any of its subsidiaries which becomes
due and payable as a result of the Purchaser's purchase of
Shares, the Merger or credit downgrades following the purchase of
Shares pursuant to the terms of indebtedness of Grumman or its
subsidiaries, which Indebtedness does not exceed $275,000,000 in
the aggregate) if such default is being contested in good faith
by the Company; or
(c) Any representation, warranty or certification made or deemed
made in any of the Documents by the Company or by Grumman, or any
certificate furnished to any Bank or the Administrative Agent
pursuant to the provisions hereof, shall prove to have been false
or misleading as of the time made or deemed made or furnished in
any material respect; or
(d) The Company shall default in the performance of any of its
obligations under Section 8.01(i) or Sections 8.06 through 8.19
(inclusive) hereof; or the Company shall default in the
performance of any of its other obligations in this Agreement and
such default shall continue unremedied for a period of 30 days
after notice thereof to the Company by the Administrative Agent
or any Bank (through the Administrative Agent); or the Company,
the Purchaser or Grumman shall default in the performance of any
of its obligations under any Transaction Document; or
(e) The Company or any Subsidiary having total assets of
$50,000,000 or more shall admit in writing its inability to, or
be generally unable to, pay its debts as such debts become due;
or
(f) The Company or any Subsidiary having total assets of
$50,000,000 or more shall (i) apply for or consent to the
appointment of, or the taking of possession by, a receiver,
custodian, trustee or liquidator of itself or of all or a
substantial part of its property, (ii) make a general assignment
for the benefit of its creditors, (iii) commence a voluntary case
under the Bankruptcy Code (as now or hereafter in effect), (iv)
file a petition seeking to take advantage of any other law
relating to bankruptcy, insolvency, reorganization, winding-up,
or composition or readjustment of debts, (v) fail to controvert
in a timely and appropriate manner, or acquiesce in writing to,
any petition filed against it in an involuntary case under the
Bankruptcy Code, or (vi) take any corporate action for the
purpose of effecting any of the foregoing; or
(g) A proceeding or case shall be commenced, without the
application or consent of the Company or any Subsidiary having
total assets of $50,000,000 or more, in any court of competent
jurisdiction, seeking (i) its liquidation, reorganization,
dissolution or winding-up, or the composition or readjustment of
its debts, (ii) the appointment of a trustee, receiver,
custodian, liquidator or the like of the Company or such
Subsidiary or of all or any substantial part of its assets, or
(iii) similar relief in respect of the Company or such Subsidiary
under any law relating to bankruptcy, insolvency, reorganization,
winding-up, or composition or adjustment of debts, and such
proceeding or case shall continue undismissed, or an order,
judgment or decree approving or ordering any of the foregoing
shall be entered and continue unstayed and in effect, for a
period of 60 days; or an order for relief against the Company or
such Subsidiary shall be entered in an involuntary case under the
Bankruptcy Code; or
(h) If (i) a final judgment which, with other outstanding final
judgments against the Company and all Subsidiaries, exceeds an
aggregate of $100,000,000 shall be rendered against the Company
or any Subsidiary and (ii) within 60 days after entry thereof,
such judgment shall not have been discharged, vacated or reversed
or execution thereof stayed pending appeal or within 60 days
after the expiration of any such stay, such judgment shall not
have been discharged, vacated or reversed; or
(i) An event or condition (i) which might constitute grounds
under Section 4042 of ERISA for the termination of, or for the
appointment of a trustee to administer, any Plan or Multiemployer
Plan and which involves a liability of the Company to PBGC in
excess of $25,000,000 or (ii) leading to the receipt by the
Company from the PBGC of a notice of its intention to terminate
any Plan or Multiemployer Plan or to have a trustee appointed to
administer any such Plan or Multiemployer Plan shall occur or
exist and, as a result of such event or condition, together with
all other such events or conditions, the Company or any ERISA
Affiliate shall incur or in the opinion of the Majority Banks
shall be reasonably likely to incur a liability to a Plan, a
Multiemployer Plan or PBGC (or any combination of the foregoing)
which is, in the determination of the Majority Banks, material in
relation to the consolidated financial position of the Company
and the Subsidiaries; or
(j) Any person or group of persons (within the meaning of
Section 13 or 14 of the Exchange Act, it being agreed that an
employee of the Company or any Subsidiary for whom shares are
held under an employee stock ownership, employee retirement,
employee savings or similar plan and whose shares are voted in
accordance with the instructions of such employee shall not be a
member of a group of persons within the meaning of said
Section 13 or 14 solely because such employee's shares are held
by a trustee under said plan) shall acquire, directly or
indirectly, beneficial ownership (within the meaning of Rule 13d-
3 promulgated by the SEC under said Act, as amended) of more than
50% of the outstanding shares of stock of the Company having by
the terms thereof ordinary voting power to elect (whether
immediately or ultimately) a majority of the board of directors
of the Company (irrespective of whether or not at the time stock
of any other class or classes of stock of the Company shall have
or might have voting power by reason of the happening of any
contingency); or
(k) During any period of 25 consecutive calendar months, a
majority of the Board of Directors of the Company shall no longer
be composed of individuals (i) who were members of said Board on
the first day of such period, (ii) whose election or nomination
to said Board was approved by individuals referred to in clause
(i) above constituting at the time of such election or nomination
at least a majority of said Board or (iii) whose election or
nomination to said Board was approved by individuals referred to
in clauses (i) and (ii) above constituting at the time of such
election or nomination at least a majority of said Board; or
(l) The Subsidiary Guaranty or any provisions thereof shall
cease to be in full force and effect, or the Subsidiary Guarantor
thereunder or any Person acting by or on behalf of the Subsidiary
Guarantor shall deny or disaffirm the Subsidiary Guarantor's
obligations under the Subsidiary Guaranty or the Subsidiary
Guarantor shall default in the due performance or observance of
any material term, covenant or agreement on its part to be
performed or observed pursuant to the Subsidiary Guaranty; or
(m) Except to the extent the Pledge Agreement has been
terminated pursuant to the terms thereof, the Pledge Agreement
shall cease to be in full force and effect or shall fail to give
the Administrative Agent the Liens, rights, powers and privileges
purported to be created thereunder (as provided therein or
herein) or the Company shall default in the due performance or
observance of any material term, covenant or agreement therein;
THEREUPON: (i) in the case of an Event of Default other than one
referred to in clause (f) or (g) of this Section 9, (x) the
Administrative Agent, upon request of the Majority Banks, shall,
by notice to the Company, cancel the Commitments and (y) the
Administrative Agent, upon request of one or more Banks holding
more than 50% of the aggregate outstanding principal amount of
Loans, shall, by notice to the Company, declare the principal
amount then outstanding of and the accrued interest on the Loans
and all other amounts payable by the Company hereunder and under
the Notes to be forthwith due and payable, whereupon such amounts
shall be immediately due and payable without presentment, demand,
protest or other formalities of any kind, all of which are hereby
expressly waived by the Company; and (ii) in the case of the
occurrence of an Event of Default referred to in clause (f) or
(g) of this Section 9, the Commitments shall be automatically
canceled and the principal amount then outstanding of, and the
accrued interest on, the Loans and all other amounts payable by
the Company hereunder and under the Notes shall become
automatically immediately due and payable without presentment,
demand, protest or other formalities of any kind, all of which
are hereby expressly waived by the Company.
Without limiting Section 11.04 hereof, the Majority Banks may, on
behalf of all the Banks, waive, for the period and on the
conditions (if any) specified in such waiver, any Event of
Default arising from the failure by the Company to perform any of
its obligations under Section 8 hereof and any consequences
thereof (including any termination of the Commitments and/or any
declaration that the principal of and interest on the Loans and
all other amounts payable by the Company hereunder and under the
Notes shall be forthwith due and payable). In the case of any
such waiver, the Company, the Banks and the Administrative Agent,
for said period and on said conditions, shall be restored to
their respective former positions and rights hereunder and under
the Notes, and any Event of Default so waived shall, for said
period and on said conditions, be deemed not to be continuing for
the purposes of this Agreement; provided that no such waiver
shall extend to any subsequent or other Event of Default or
impair any other right of any Bank or the Administrative Agent
hereunder or under the Notes.
Section 10. The Administrative Agent.
10.01 Appointment, Powers and Immunities. Each Bank hereby
irrevocably appoints and authorizes the Administrative Agent to
act as its agent hereunder with such powers as are specifically
delegated to the Administrative Agent by the terms of this
Agreement and in the other Credit Documents, together with such
other powers as are reasonably incidental thereto. The
Administrative Agent (which term as used in this sentence and in
Section 10.05 and the first sentence of Section 10.06 hereof
shall include reference to its affiliates and its own and its
affiliates' officers, directors, employees and agents):
(a) shall have no duties or responsibilities except those
expressly set forth in this Agreement and in the other Credit
Documents, and shall not by reason of this Agreement or the other
Credit Documents be a trustee for any Bank; (b) shall not be
responsible to the Banks for any recitals, statements,
representations or warranties contained in this Agreement or the
other Credit Documents, or in any certificate or other document
referred to or provided for in, or received by any of them under,
this Agreement or the other Credit Documents, or for the value,
validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or the other Credit Documents, any
Note or any other document referred to or provided for herein or
for any failure by any Credit Party or any other Person to
perform any of its obligations hereunder or thereunder; (c) shall
not be required to initiate or conduct any litigation or
collection proceedings hereunder except in connection with
enforcement proceedings under the Pledge Agreement at the
direction of the Majority Banks; and (d) shall not be responsible
for any action taken or omitted to be taken by it hereunder or
under any other document or instrument referred to or provided
for herein or in connection herewith, except for its own gross
negligence or willful misconduct. The Administrative Agent may
employ agents and attorneys-in-fact and shall not be responsible
for the negligence or misconduct of any such agents or
attorneys-in-fact selected by it in good faith. The
Administrative Agent may deem and treat the payee of any Note as
the holder thereof for all purposes hereof unless and until
(except in the case of an assignment pursuant to Section 11.06(e)
hereof) a written notice of the assignment or transfer thereof
shall have been filed with the Administrative Agent, together
with the written consent of the Company to such assignment or
transfer.
10.02 Reliance by Administrative Agent. The Administrative
Agent shall be entitled to rely upon any certification, notice or
other communication (including any thereof by telephone, telex,
telegram or cable) believed by it to be genuine and correct and
to have been signed or sent by or on behalf of the proper Person
or Persons, and upon advice and statements of legal counsel,
independent accountants and other experts selected by the
Administrative Agent. As to any matters not expressly provided
for by this Agreement, the Administrative Agent shall in all
cases be fully protected in acting, or in refraining from acting,
hereunder in accordance with instructions signed by the Majority
Banks, and such instructions of the Majority Banks and any action
taken or failure to act pursuant thereto shall be binding on all
of the Banks.
10.03 Defaults. The Administrative Agent shall not be deemed to
have knowledge of the occurrence of a Default unless the
Administrative Agent has received notice from a Bank or the
Company specifying such Default and stating that such notice is a
"Notice of Default". In the event that the Administrative Agent
receives such a notice of the occurrence of a Default, the
Administrative Agent shall give prompt notice thereof to the
Banks. The Administrative Agent shall (subject to
Sections 10.01, 10.07 and 11.04 hereof) take such action under
the Credit Documents with respect to such Default as shall be
directed by the Majority 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 as it shall deem advisable in the best interest of
the Banks.
10.04 Rights as a Bank. With respect to its Commitment and the
Loans made by it, Chase (and any successor acting as
Administrative Agent) in its capacity as a Bank hereunder shall
have the same rights and powers hereunder as any other Bank and
may exercise the same as though it were not acting as the
Administrative Agent, and the term "Bank" or "Banks" shall,
unless the context otherwise indicates, include the
Administrative Agent in its individual capacity. Chase (and any
successor acting as Administrative Agent) and its affiliates may
(without having to account therefor to any Bank) accept deposits
from, lend money to and generally engage in any kind of banking,
trust or other business with the Company (and any of its
affiliates) as if it were not acting as the Administrative Agent,
and Chase and its affiliates may accept fees and other
consideration from the Company for services in connection with
this Agreement or any other Credit Document or otherwise without
having to account for the same to the Banks.
10.05 Indemnification. The Banks agree to indemnify the
Administrative Agent (to the extent not reimbursed under
Section 11.03 hereof, but without limiting the obligations of the
Company under said Section 11.03), ratably in accordance with
their respective Commitments (or, if the Commitments shall have
terminated, ratably in accordance with the outstanding principal
amounts of the Loans held by the respective Banks), for any and
all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of
any kind and nature whatsoever which may be imposed on, incurred
by or asserted against the Administrative Agent in any way
relating to or arising out of this Agreement or any other Credit
Document, or any other documents contemplated by or referred to
herein or therein or the transactions contemplated hereby or
thereby (including, without limitation, the costs and expenses
which the Company is obligated to pay under Section 11.03 hereof
but excluding, unless a Default has occurred and is continuing,
normal administrative costs and expenses incident to the
performance of its agency duties hereunder) or the enforcement of
any of the terms hereof or of any other Credit Document or of any
such other documents, provided that no Bank shall be liable for
any of the foregoing to the extent they arise from the gross
negligence or willful misconduct of the party to be indemnified.
10.06 Non-Reliance on Administrative Agent and other Banks.
Each Bank agrees that it has, independently and without reliance
on the Administrative Agent or any other Bank, and based on such
documents and information as it has deemed appropriate, made its
own credit analysis of the Company and the Subsidiaries and
decision to enter into this Agreement and that it will,
independently and without reliance upon the Administrative Agent
or any other Bank, and based on such documents and information as
it shall deem appropriate at the time, continue to make its own
analysis and decisions in taking or not taking action under this
Agreement. The Administrative Agent shall not be required to
keep itself informed as to the performance or observance by the
Company of this Agreement or any other document referred to or
provided for herein or to inspect the properties or books of the
Company or any Subsidiary. Except for notices, reports and other
documents and information expressly required to be furnished to
the Banks by the Administrative Agent hereunder, the
Administrative Agent shall not have any duty or responsibility to
provide any Bank with any credit or other information concerning
the affairs, financial condition or business of the Company or
any Subsidiary (or any of their affiliates) which may come into
the possession of the Administrative Agent or any of its
affiliates.
10.07 Failure to Act. Except for action expressly required of
the Administrative Agent hereunder, the Administrative Agent
shall in all cases be fully justified in failing or refusing to
act hereunder unless it shall receive further assurances to its
satisfaction from the Banks of their indemnification obligations
under Section 10.05 hereof against any and all liability and
expense which may be incurred by it by reason of taking or
continuing to take any such action.
10.08 Resignation or Removal of Administrative Agent. Subject
to the appointment and acceptance of a successor Administrative
Agent as provided below, the Administrative Agent may resign at
any time by giving notice thereof to the Banks and the Company
and the Administrative Agent may be removed at any time with or
without cause by the Majority Banks. Upon any such resignation
or removal, the Majority Banks shall, after consultation with the
Company, have the right to appoint a successor Administrative
Agent. If no successor Administrative Agent shall have been so
appointed by the Majority Banks and shall have accepted such
appointment within 30 days after the retiring Administrative
Agent's giving of notice of resignation or the Majority Banks'
removal of the retiring Administrative Agent, then the retiring
Administrative Agent may, on behalf of the Banks, after
consultation with the Company, appoint a successor Administrative
Agent, which shall be a bank with a combined capital and surplus
of at least $1,000,000,000. Upon the acceptance of any
appointment as Administrative Agent hereunder by a successor
Administrative Agent, such successor Administrative Agent shall
thereupon succeed to and become vested with all the rights,
powers, privileges and duties of the retiring Administrative
Agent, and the retiring Administrative Agent shall be discharged
from its duties and obligations hereunder. After any retiring
Administrative Agent's resignation or removal hereunder as
Administrative Agent, the provisions of this Section 10 shall
continue in effect for its benefit in respect of any actions
taken or omitted to be taken by it while it was acting as the
Administrative Agent.
10.09 Consents under Other Credit Documents. Except as
otherwise provided in Section 11.04 hereof with respect to this
Agreement, the Administrative Agent may, with the prior consent
of the Majority Banks (but not otherwise), consent to any
modification, supplement or waiver under any of the other Credit
Documents, provided that, without the prior consent of each Bank,
the Administrative Agent shall not (except as expressly provided
herein or in the Pledge Agreement) release any collateral or
otherwise terminate any Lien under the Pledge Agreement, or agree
to additional obligations being secured by such collateral,
except that no such consent shall be required, and the
Administrative Agent is hereby authorized, to release any Lien
covering Property that is the subject of a disposition of
Property expressly permitted hereunder or to which the Majority
Banks shall have consented.
10.10 Co-Agents. The Co-Agents identified on the front page of
this Agreement shall have no duties or responsibilities hereunder
other than as Banks hereunder or, in the case of Chase, as
Administrative Agent.
Section 11. Miscellaneous.
11.01 Waiver. No failure on the part of the Administrative
Agent or any Bank to exercise and no delay in exercising, and no
course of dealing with respect to, any right, power or privilege
under this Agreement or any other Credit Document shall operate
as a waiver thereof, nor shall any single or partial exercise of
any right, power or privilege under this Agreement or any other
Credit Document preclude any other or further exercise thereof or
the exercise of any other right, power or privilege. The
remedies provided herein are cumulative and not exclusive of any
remedies provided by law.
11.02 Notices. All notices and other communications provided
for herein (including, without limitation, any modifications of,
or waivers or consents under, this Agreement) shall be given or
made by telecopy or in writing (or, with respect to notices given
pursuant to Sections 2.02, 2.03 and 4.07 hereof, by telephone,
confirmed in writing by telecopy by the close of business on the
day the notice is given); and telecopied, mailed or delivered (or
telephoned, as the case may be) to the intended recipient at the
"Address for Notices" specified below its name on the signature
pages hereof or, as to any party, at such other address as shall
be designated by such party in a notice to each other party.
Officers of the Company authorized to give such telephone notices
shall be designated by the Company in writing to the
Administrative Agent and notices given by anyone purporting to be
any one of the designated officers may be honored by the
Administrative Agent. Except as otherwise provided in this
Agreement, all such communications shall be deemed to have been
duly given when transmitted by telecopier or personally delivered
or, in the case of a mailed notice, upon receipt, in each case
given or addressed as aforesaid.
11.03 Expenses, Etc. The Company agrees to pay or reimburse
each of the Banks and the Administrative Agent for paying: (a)
the reasonable fees and expenses of Milbank, Tweed, Hadley &
McCloy, special New York counsel to the Banks, in connection with
(i) the preparation, execution and delivery of this Agreement and
the other Credit Documents and the making of the Loans hereunder
and (ii) any amendment, modification or waiver of any of the
terms of this Agreement or any of the other Credit Documents; (b)
all reasonable costs and expenses of the Administrative Agent
(including, without limitation, telephone, telex and courier
expenses and printing and publishing costs) in connection with
the negotiation, syndication and execution of this Agreement and
the other Credit Documents; (c) all reasonable costs and expenses
of the Banks and the Administrative Agent (including reasonable
counsels' fees and allocated expenses of in-house lawyers) in
connection with the enforcement of this Agreement or any of the
other Credit Documents; and (d) all transfer, stamp, documentary
or other similar taxes, assessments or charges levied by any
governmental or revenue authority in respect of this Agreement,
any of the other Credit Documents or any other document referred
to herein or therein.
11.04 Amendments, Etc. Any provision of this Agreement may be
amended, waived or otherwise modified only by an instrument
signed by the Company and the Majority Banks, or by the Company
and the Administrative Agent acting with the consent of the
Majority Banks, and any provision of this Agreement may be waived
by the Majority Banks or by the Administrative Agent acting with
the consent of the Majority Banks; provided that (a) no
amendment, waiver or other modification shall, unless by an
instrument signed by all of the Banks or by the Administrative
Agent acting with the consent of all of the Banks: (i) increase
or extend the term, or extend the time or waive any requirement
for the reduction or termination, of any of the Commitments,
(ii) extend the date fixed for the payment of principal of or
interest on any Loan, (iii) reduce the amount of any payment of
principal thereof or the rate at which interest is payable
thereon or any Fee is payable hereunder, (iv) alter the terms of
clause (f) or (g) of Section 9 hereof, the paragraph of Section 9
hereof beginning with the word "THEREUPON" or this Section 11.04,
(v) amend the definition of the term "Majority Banks" or modify
in any other manner the number or percentage of the Banks
required to make any determinations or waive any rights hereunder
or to modify any provision hereof, (vi) waive any of the
conditions precedent set forth in Section 6 hereof, (vii) alter
any provision of this Agreement insofar as such provision
requires the consent or approval of all of the Banks or
(viii) alter any provision of this Agreement that would have the
effect set forth in any of the foregoing clauses (i) through
(vii) and (b) any amendment of Section 10 hereof, or any
provision which increases the obligations of the Administrative
Agent hereunder, shall require the consent of the Administrative
Agent.
11.05 Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns.
11.06 Assignments and Participations.
(a) The Company may not assign any of its rights or obligations
hereunder or under the Notes without the prior consent of all of
the Banks and the Administrative Agent.
(b) A Bank may assign any of its Loans, its Notes or its
Commitments to any other Person only with the prior consent of
the Company and the Administrative Agent (which consent, in each
case, may not be unreasonably withheld or delayed; it being
agreed that the Company, in determining whether to give such
consent, may reasonably consider, without limitation of other
factors that the Company may reasonably consider, the financial
capability, financial rating and location of a proposed assignee
and any prior business relationships between the Company and a
proposed assignee, provided that any such determination shall be
made by the Company in good faith and after consideration of all
relevant factors); provided that any Bank may assign to another
Bank all or (subject to the further provisos below) any portion
of its Commitments; provided that, unless the Company and the
Administrative Agent shall otherwise consent, any such partial
assignment shall be in an aggregate principal amount equal to
$25,000,000 or any integral multiple of $1,000,000 in excess
thereof; and provided further that such assigning Bank shall also
simultaneously assign to such assignee Bank the same proportion
of each of its Commitments and Syndicated Loans then outstanding
(together with the same proportion of the relevant Notes then
outstanding). For purposes of making the determination described
in the first sentence of this Section 11.06(b) of whether to give
its consent to an assignment by any Bank, the Company
(i) recognizes that the initial aggregate amount of the
Commitments of such Bank may exceed significantly the final
amount that such Bank intends to hold on a long term basis and
(ii) agrees to consider the targeted final hold amount of such
Bank as disclosed to the Company by such Bank. Upon written
notice to the Company and the Administrative Agent of an
assignment permitted by the provisos of the preceding sentence
(which notice shall identify the assignee Bank, the amount of the
assignor Bank's Commitments and Loans assigned in detail
reasonably satisfactory to the Administrative Agent) and upon the
effectiveness of any assignment consented to by the Company and
the Administrative Agent, the assignee shall have, to the extent
of such assignment (unless otherwise provided in such assignment
with the consent of the Company and the Administrative Agent),
the obligations, rights and benefits of a Bank hereunder holding
the Commitments and Loans (or portions thereof) assigned to it
(in addition to the Commitments and Loans, if any, theretofore
held by such assignee). Upon the effectiveness of any assignment
of any of its Commitments or Loans, the assignor Bank or the
assignee (as agreed between them) shall pay to the Administrative
Agent a transfer fee in an amount equal to $3,000; provided that
the assignee Bank shall pay any transfer fee payable in
connection with any assignment effected pursuant to
Section 2.04(d) hereof.
(c) A Bank may sell to one or more other Persons a participation
in all or any part of any Loan held or to be made by it or in any
of its Commitments, in which event each such participant shall
not have any rights or benefits under this Agreement or any Note
(the participant's rights against such Bank in respect of such
participation to be those set forth in the agreement (the
"Participation Agreement") executed by such Bank in favor of the
participant). All amounts payable by the Company to any Bank
under Section 5 hereof shall be determined as if such Bank had
not sold any participations in such Loan and in such Commitment
and as if such Bank were funding all of such Loan in the same way
that it is funding the portion of such Loan and such Commitment
in which no participations have been sold. In no event shall a
Bank that sells a participation be obligated to the participant
under the Participation Agreement to take or refrain from taking
any action hereunder or under such Bank's Note(s) except that
such Bank may agree in the Participation Agreement that it will
not, without the consent of the participant, agree to (i) the
increase or the extension of the term, or the extension of the
time or waive any requirement for the reduction or termination,
of such Bank's Commitment, (ii) the extension of any date fixed
for the payment of principal of or interest on the related Loan
or Loans, (iii) the reduction of any payment of principal
thereof, (iv) the reduction of the rate at which either interest
is payable thereon or (if the participant is entitled to any part
thereof) commitment fee or facility fee is payable hereunder to a
level below the rate at which the participant is entitled to
receive interest or facility fee (as the case may be) in respect
of such participation or (v) take any other action that, under
this Agreement, requires the consent or approval of all of the
Banks.
(d) A Bank may furnish any information concerning the Company or
any Subsidiary in the possession of such Bank from time to time
to any of its affiliates or its assignees and participants
(including prospective assignees and participants), subject to
the provisions of Section 11.11 hereof.
(e) Any Bank may at any time assign and pledge to any Federal
Reserve Bank (or to an affiliate of such Bank for the purpose of
permitting such affiliate to assign and pledge to any Federal
Reserve Bank), as collateral security pursuant to Regulation A
and any Operating Circular issued by such Federal Reserve Bank
all or any portion of its Loans and its Notes. No such
assignment shall release the assigning Bank from its obligations
hereunder.
11.07 Survival. The obligations of the Company under
Sections 5.01, 5.05 and 11.03 hereof shall survive the repayment
of the Loans and the termination of the Commitments.
11.08 Captions. Captions and section headings appearing herein
are included solely for convenience of reference and are not
intended to affect the interpretation of any provision of this
Agreement.
11.09 Counterparts. This Agreement may be executed in any
number of counterparts, all of which taken together shall
constitute one and the same instrument and any of the parties
hereto may execute this Agreement by signing any such
counterpart.
11.10 Governing Law; Submission to Jurisdiction; Waiver of Jury
Trial. THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
THE COMPANY HEREBY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF
THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW
YORK AND OF ANY NEW YORK STATE COURT SITTING IN NEW YORK COUNTY
FOR THE PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR
RELATING TO THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY. THE COMPANY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY
OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE
VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY
CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM. EACH OF THE PARTIES HERETO
HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
11.11 Confidentiality. Each Bank and the Administrative Agent
agrees (on behalf of itself and each of its affiliates,
directors, officers, employees and representatives) to keep
confidential, in accordance with their customary procedures for
handling confidential information of this nature and in
accordance with safe and sound banking practices, any non-public
information supplied to it by the Company pursuant to this
Agreement which is identified by the Company as being
proprietary, private and/or confidential at the time the same is
delivered to the Banks or the Administrative Agent, provided that
nothing herein shall limit the disclosure of any such information
(a) to the extent required by statute, rule, regulation or
judicial process, (b) to counsel for any of the Banks or the
Administrative Agent, (c) to bank examiners, auditors or
accountants, (d) to the Administrative Agent or any other Bank,
(e) in connection with any litigation to which any one or more of
the Banks or the Administrative Agent is a party or (f) to any
assignee or participant (or prospective assignee or participant)
so long as such assignee or participant (or prospective assignee
or participant) first executes and delivers to the respective
Bank a Confidentiality Agreement in substantially the form of
Exhibit D hereto (whereupon such Bank shall promptly deliver a
copy of such Confidentiality Agreement to the Company); provided,
further, that (i) unless specifically prohibited by applicable
law or court order, each Bank and the Administrative Agent shall,
prior to disclosure thereof, notify the Company of any request
for disclosure of any such non-public information (x) by any
governmental agency or representative thereof (other than any
such request in connection with an examination of the financial
condition of such Bank by such governmental agency) or
(y) pursuant to legal process and (ii) in no event shall any Bank
or the Administrative Agent be obligated or required to return
any materials furnished by the Company; and, provided, finally,
that no Bank shall, without the Company's prior consent, provide
any information relating to projections of the Company's
financial performance to any participant or any prospective
assignee or participant (other than any bank or other financial
institution identified to the Company as a participant under the
Existing Credit Agreement in a notice given to the Company prior
to the date of this Agreement), and, in lieu thereof, the Company
shall, promptly following the request of any Bank and at the
Company's expense, provide to a participant (or prospective
assignee or participant) of such Bank any information relating to
projections of the Company's financial performance that has been
made available to such Bank. Each Bank agrees that money damages
would not be a sufficient remedy for any breach of such
Bank's obligations under this Section 11.11 and that, in addition
to all other remedies available to the Company at law or in
equity, the Company shall be entitled to injunctive relief
against such Bank as a remedy for such breach.
11.12 Cancellation of Existing Northrop Credit Agreement. On
the date of the execution and delivery of this Agreement, the
commitments of the Banks party to the Existing Northrop Credit
Agreement shall automatically terminate and all fees payable to
such Banks accrued to such date under the Existing Northrop
Credit Agreement shall be immediately due and payable.
11.13 Amendment Effective Date. The amendment and restatement
of the Original Credit Agreement shall become effective upon the
execution and delivery of this Agreement by all parties hereto
and the payment to the Banks party to the Original Credit
Agreement of all Fees accrued to the date of such execution and
delivery.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed as of the day and year first above written.
NORTHROP CORPORATION
By /s/ John R. Rettberg
Title: Vice President
Address for Notices:
Northrop Corporation
1840 Century Park East
Los Angeles, California 90067
Attention: John R. Rettberg
Vice President and
Treasurer
Telecopier No.: 310-553-2076
Telephone No.: 310-201-3070
THE BANKS
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION)
By /s/ Patricia B. Bril
Title: Managing Director
Lending Office for all Loans:
The Chase Manhattan Bank
(National Association)
1 Chase Manhattan Plaza
New York, New York 10081
Address for Notices:
The Chase Manhattan Bank
(National Association)
1 Chase Manhattan Plaza
New York, New York 10081
Attention: Richard C. Smith
Telecopier No.: 212-552-1457
Telephone No.: 212-552-0667
CHEMICAL BANK
By /s/ Thomas Delaney
Title: Vice President
Lending Office for all Loans:
Chemical Bank
270 Park Avenue
10th Floor
New York, New York 10017
Address for Notices:
Chemical Bank
270 Park Avenue
New York, New York 10017
Attention: Thomas Delaney
Telecopier No.: 212-270-9647
Telephone No.: 212-270-4177
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By /s/ James C. Colegate
Title: Senior Vice President
Lending Office for all Loans:
Bank of America National Trust
and Savings Association
Global Payment Operations #5693
1850 Gateway Blvd. 4th Floor
Concord, California 94520
Address for Notices:
Bank of America National Trust
and Savings Association
Credit Products LA II #5618
11th Floor
555 South Flower Street
Los Angeles, California 90071
Attention: Lori Y. Kannegieter
Telecopier No.: 213-228-2756
Telephone No.: 213-228-6379
BANK OF MONTREAL
By /s/ J. Robert Peart
Title: Director
Lending Office for Base Rate
Loans, Set Rate Loans and
Eurodollar Loans:
Bank of Montreal
115 South LaSalle Street
12th Floor
Chicago, Illinois 60603
Lending Office for LIBOR Bid
Loans:
Bank of Montreal
115 South LaSalle Street
19th Floor
Chicago, Illinois 60603
Address for Notices:
Bank of Montreal
115 South LaSalle Street
12th Floor
Chicago, Illinois 60603
Attention: J. Robert Peart
Telecopier No.: 312-750-4314
Telephone No.: 312-750-4369
THE BANK OF NEW YORK
By /s/ Craig Rethmeyer
Title: Vice President
Lending Office for Base Rate
Loans, Set Rate Loans and
Eurodollar Loans:
The Bank of New York
1 Wall Street
22nd Floor
New York, New York 10286
Lending Office for LIBOR Bid
Loans:
The Bank of New York
48 Wall Street, 13th Floor
New York, New York 10286
Address for Notices:
The Bank of New York
1 Wall Street
22nd Floor
New York, New York 10286
Telecopier No.: 212-635-6397
Telephone No.: 212-635-6730
with a copy to:
The Bank of New York
10990 Wilshire Boulevard
Suite 1700
Los Angeles, California 90024
Attention: Craig Rethmeyer
Telecopier No.: 310-996-8667
Telephone No.: 310-996-8657
THE BANK OF NOVA SCOTIA
By /s/ M. Van Otterloo
Title: Vice President
By /s/ J.S. York
Title: Vice President & Agent
Lending Office for all Loans:
The Bank of Nova Scotia
101 California Street
48th Floor
San Francisco, California 94111
Address for Notices:
The Bank of Nova Scotia
101 California Street
48th Floor
San Francisco, California 94111
Attention: Norman O. Campbell
Telecopier No.: 415-397-0791
Telephone No.: 415-986-1100
Address for Notices for
Competitive Bid Loans:
1 Liberty Plaza
New York, New York 10006
Attention: Sarah Schramm
Telecopier No.: 212-225-5517
Telephone No.: 212-225-5550
With a copy to:
The Bank of Nova Scotia
101 California Street
48th Floor
San Francisco, California 94111
Attention: Norman O. Campbell
BANKERS TRUST COMPANY
By /s/ Edward G. Benedict
Title: Vice President
Lending Office for all Loans:
Bankers Trust Company
130 Liberty Street
23rd Floor
New York, New York 10006
Address for Notices:
Bankers Trust Company
130 Liberty Street
23rd Floor
New York, New York 10006
Attention: Edward G. Benedict
Telecopier No.: 212-250-7026
Telephone No.: 212-250-3708
CANADIAN IMPERIAL BANK OF
COMMERCE
By /s/ Glen R. Pittson
Title: Senior Agent
Lending Office for all Loans:
Canadian Imperial Bank of
Commerce
Two Paces Ferry Road
2727 Paces Ferry Road
Suite 1200
Atlanta, Georgia 30339
Address for Notices:
Canadian Imperial Bank of
Commerce
300 South Grand Avenue
Suite 2700
Los Angeles, California 90071
Attention: Robert J. Wagner
Telecopier No.: 213-346-0157
Telephone No.: 213-617-6248
CITICORP USA, INC.
By /s/ Barbara A. Cohen
Title: Vice President
Lending Office for Base Rate,
Set Rate and Eurodollar Loans:
Citicorp USA, Inc.
c/o Citicorp North America, Inc.
725 S. Figueroa Street
5th Floor
Los Angeles, California 90017
Lending Office for LIBOR Bid
Loans:
Citicorp USA, Inc.
One Court Square, 45th Floor/
Zone 8
Long Island City, New York 11120
Address for Notices:
Citicorp USA, Inc.
c/o Citicorp North America, Inc.
725 S. Figueroa Street
5th Floor
Los Angeles, California 90017
Attention: Walter L. Larsen
Telecopier No.: 213-623-3592
Telephone No.: 213-239-1501
CREDIT LYONNAIS CAYMAN ISLAND
BRANCH
By /s/ Thierry F. Vincent
Title: Authorized Signature
Lending Office for Base Rate
Loans and Set Rate Loans:
Credit Lyonnais Los Angeles
Branch
515 South Flower Street
Los Angeles, California 90071
Lending Office for Eurodollar
Loans and LIBOR Bid Loans:
Credit Lyonnais Cayman Island
Branch
c/o Credit Lyonnais Los Angeles
Branch
515 South Flower Street
Los Angeles, California 90071
Address for Notices:
Credit Lyonnais Cayman Island Branch
c/o Credit Lyonnais Los Angeles Branch
515 South Flower Street
Los Angeles, California 90071
Attention: Steven Yoon
Telecopier No.: 213-623-3437
Telephone No.: 213-362-5957
THE FIRST NATIONAL BANK
OF CHICAGO
By /s/ Michael Basak
Title: Vice President
Lending Office for all Loans:
The First National Bank of
Chicago
One First National Plaza
Suite 0634, 1-10
Chicago, Illinois 60670
Address for Notices:
The First National Bank of
Chicago
777 South Figueroa Street
4th Floor
Los Angeles, California 90017
Attention: J. Dirk Vos
Telecopier No.: 213-683-4999
Telephone No.: 213-683-4934
FIRST INTERSTATE BANK OF
CALIFORNIA
By /s/ William J. Baird
Title: Vice President
By /s/ Gregory P. Brown
Title: Vice President
Lending Office for Base Rate
Loans, Set Rate Loans and
Eurodollar Loans:
First Interstate Bank of
California
1055 Wilshire Boulevard
Mail Sort B10-6
Los Angeles, California 90017
Lending Office for LIBOR Bid
Loans:
First Interstate Bank of
California
707 Wilshire Boulevard
Mail Sort W16-20
Los Angeles, California 90017
Address for Notices:
First Interstate Bank of
California
707 Wilshire Boulevard
Mail Sort W16-13
Los Angeles, California 90017
Attention: Bill Baird
Telecopier No.: 213-614-2569
Telephone No.: 213-614-5540
THE LONG-TERM CREDIT BANK OF
JAPAN, LTD., LOS ANGELES AGENCY
By /s/ Motokazu Uematsu
Title: Deputy General Manager
Lending Office for all Loans:
The Long-Term Credit Bank of
Japan, Ltd.,
Los Angeles Agency
444 South Flower Street
Suite 3700
Los Angeles, California 90071
Address for Notices:
The Long-Term Credit Bank of
Japan, Ltd.,
Los Angeles Agency
444 South Flower Street
Suite 3700
Los Angeles, California 90071
Attention: Joanne Chou
Telecopier No.: 213-622-6908
Telephone No.: 213-689-6327
NATIONSBANK OF TEXAS, N.A.
By /s/ Tom F. Scharfenberg
Title: Vice President
Lending Office for all Loans:
NationsBank of Texas, N.A.
901 Main Street
TX1-492-67-01
Dallas, Texas 75202
Address for Notices:
NationsBank of Texas, N.A.
444 South Flower Street
Suite 1500
Los Angeles, California 90071
Attention: Tom Scharfenberg
Telecopier No.: 213-624-5815
Telephone No.: 213-236-4923
NATIONAL WESTMINSTER BANK PLC
LOS ANGELES OVERSEAS BRANCH
By /s/ Hal Sadoff
Title: Vice President
Lending Office for Base Rate
Loans and Set Rate Loans:
National Westminster Bank Plc
175 Water Street
New York, New York 10038
Lending Office for Eurodollar
Loans and LIBOR Bid Loans:
National Westminster Bank Plc
Nassau Branch
c/o National Westminster Bank Plc
175 Water Street
New York, New York 10038
Address for Notices:
National Westminster Bank Plc
400 South Hope Street
Los Angeles, California 90071
Attention: Thomas F. Dillon
Telecopier No.: 213-623-6540
Telephone No.: 213-624-8555
ROYAL BANK OF CANADA
By /s/ Brian W. Dixon
Title: Senior Manager
Lending Office for all Loans:
Royal Bank of Canada
Pierrepont Plaza
300 Cadman Plaza West
14th Floor
Brooklyn, New York 10201-2701
Address for Notices:
Royal Bank of Canada
600 Wilshire Boulevard
Suite 800
Los Angeles, California 90017
Attention: Brian Dixon
Telecopier No.: 213-955-5350
Telephone No.: 213-955-5316
SOCIETE GENERALE
By /s/ Jean-Gabriel Langlois
Title: Vice President & Manager
Lending Office for all Loans:
Societe Generale
2029 Century Park East
Suite 2900
Los Angeles, California 90067
Address for Notices:
Societe Generale
2029 Century Park East
Suite 2900
Los Angeles, California 90067
Attention: J. Staley Stewart
Telecopier No.: 310-551-1537
Telephone No.: 310-788-7103
CREDIT SUISSE
By /s/ David J. Worthington
Title: Member of Senior Management
By /s/ Kevin Mark Fowler
Title: Associate
Lending Office for all Loans:
Credit Suisse
800 Wilshire Boulevard
Los Angeles, California 90017
Address for Notices:
Credit Suisse
800 Wilshire Boulevard
Los Angeles, California 90017
Attention: Stephen M. Flynn
Telecopier No.: 213-955-8245
Telephone No.: 213-955-8215
THE INDUSTRIAL BANK OF JAPAN,
LIMITED, LOS ANGELES AGENCY
By /s/ Masatake Yashiro
Title: General Manager
Lending Office for all Loans:
The Industrial Bank of Japan,
Limited, Los Angeles Agency
350 South Grand Avenue
Suite 1500
Los Angeles, California 90071
Address for Notices:
The Industrial Bank of Japan,
Limited, Los Angeles Agency
350 South Grand Avenue
Suite 1500
Los Angeles, California 90071
Attention: Jane Chang
Telecopier No.: 213-688-7486
Telephone No.: 213-628-7241
NBD BANK, N.A.
By /s/ Curtis A. Price
Title: Vice President
Lending Office for all Loans:
NBD Bank, N.A.
611 Woodward Avenue
Detroit, Michigan 48226
Address for Notices:
NBD Bank, N.A.
611 Woodward Avenue
Detroit, Michigan 48226
Attention: Curtis A. Price
Telecopier No.: 313-225-2649
Telephone No.: 313-225-4387
THE SUMITOMO BANK, LIMITED
LOS ANGELES BRANCH
By /s/ Hiroshi Amano
Title: General Manager
Lending Office for all Loans:
The Sumitomo Bank, Limited,
Los Angeles Branch
777 S. Figueroa Street
Suite 2600
Los Angeles, California 90017
Address for Notices:
The Sumitomo Bank, Limited,
Los Angeles Branch
777 S. Figueroa Street
Suite 2600
Los Angeles, California 90017
Attention: Lisanne Rawson
Telecopier No.: 213-623-6832
Telephone No.: 213-955-0933
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By /s/ Robert M. Osieski
Title: Vice President
Lending Office for Base Rate
Loans and Set Rate Loans:
Morgan Guaranty Trust Company
of New York
60 Wall Street
New York, New York 10260-0060
Attention: Loan Department
Lending Office for Eurodollar
Loans and LIBOR Bid Loans:
Morgan Guaranty Trust Company
of New York
Nassau, Bahamas Office
c/o J.P. Morgan Services Inc.
Euro-Loan Servicing Unit -
Loan Operations
500 Stanton Christiana Road -
3rd Floor
Newark, Delaware 19713
Address for Notices:
Morgan Guaranty Trust Company
of New York
60 Wall Street
22 Floor
New York, New York 10260-0060
Attention: Leslie Nilsen
Telecopier No.: 212-648-5014
Telephone No.: 212-648-6987
BANCO CENTRAL HISPANOAMERICANO,
SAN FRANCISCO AGENCY
By /s/ Jose Castello
Title: S.V.P. & General Manager
Lending Office for all Loans:
Banco Central Hispanoamericano,
San Francisco Agency
505 Sansome Street
San Francisco, California 94111
Address for Notices:
Banco Central Hispanoamericano
San Francisco Agency
505 Sansome Street
San Francisco, California 94111
Attention: Jose Castello
Telecopier No.: 415-398-3173
Telephone No.: 415-398-6333
LLOYDS BANK PLC
By /s/ Paul D. Briamonte
Title: Vice President
/s/ Ted R. Walser
Title: Senior Vice President
Lending Office for all Loans:
Lloyds Bank PLC
199 Water Street
New York, New York 10038
Address for Notices:
Lloyds Bank PLC
199 Water Street
New York, New York 10038
Attention: Paul Briamonte
Telecopier No.: 212-607-4999
Telephone No.: 212-607-4965
MELLON BANK, N.A.
By /s/ V. Charles Jackson
Title: Senior Vice President
Lending Office for all Loans:
Mellon Bank, N.A.
Three Mellon Bank Center #2302
Pittsburgh, Pennsylvania 15259
Address for Notices:
Mellon Bank, N.A.
300 South Grand Avenue #3800
Los Angeles, California 90071
Attention: Lawrence C. Ivey
Telecopier No.: 213-626-3745
Telephone No.: 213-680-7354
SHAWMUT BANK, N.A.
By /s/ John B. Desmond
Title: Vice President
Lending Office for all Loans:
Shawmut Bank, N.A.
One Federal Street
Boston, Massachusetts 02211
Address for Notices:
Shawmut Bank, N.A.
One Federal Street
Boston, Massachusetts 02211
Attention: John B. Desmond
Telecopier No.: 617-292-3241
Telephone No.: 617-292-3275
WACHOVIA BANK OF GEORGIA, N.A.
By /s/ Douglas L. Williams
Title: Senior Vice President
Lending Office for all Loans:
Wachovia Bank of Georgia, N.A.
191 Peachtree Street N.E.
Mail Code GA 370
Atlanta, Georgia 30303
Address for Notices:
Wachovia Bank of Georgia, N.A.
191 Peachtree Street N.E.
Mail Code GA 370
Atlanta, Georgia 30303
Attention: William H. Duncan
Telecopier No.: 404-332-6898
Telephone No.: 404-332-5760
J.P. MORGAN DELAWARE
By /s/ David J. Morris
Title: Vice President
Lending Office for All Loans:
J.P. Morgan Delaware
c/o J.P. Morgan Services, Inc.
500 Stanton Christiana Road
Newark, DE 19713-2107
Address for Notices:
J.P. Morgan Delaware
902 North Market Street
Wilmington, DE 19801-3015
Attention: David J. Morris
Telecopier No.: (302) 654-5336
Telephone No.: (302) 651-3788
ADMINISTRATIVE AGENT
CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION),
Administrative Agent
/s/ Patricia B. Bril
Title: Managing Director
Address for Notices to
Chase as Administrative Agent:
Chase Manhattan Bank
(National Association)
Metrotech Center -- 13th Floor
Brooklyn, New York 11245
Attention: New York Agency
Telecopier No.: 718-242-6910
Telephone No.: 718-242-7979
SCHEDULE I
Term Loan Revolving Loan Total
Banks Commitments Commitments Commitments
The Chase Manhattan Bank
(National Association) $106,071,428.54 $28,928,571.46 $135,000,000
Chemical Bank 106,071,428.53 28,928,571.47 135,000,000
Bank of America National
Trust and Savings Assn. 94,285,714.29 25,714,285.71 120,000,000
Bank of Montreal 94,285,714.29 25,714,285.71 120,000,000
The Bank of New York 94,285,714.29 25,714,285.71 120,000,000
The Bank of Nova Scotia 94,285,714.29 25,714,285.71 120,000,000
Bankers Trust Company 94,285,714.29 25,714,285.71 120,000,000
Canadian Imperial Bank 94,285,714.29 25,714,285.71 120,000,000
of Commerce
Citicorp USA, Inc. 94,285,714.29 25,714,285.71 120,000,000
Credit Lyonnais
Cayman Island Branch 94,285,714.29 25,714,285.71 120,000,000
First National Bank of
Chicago 94,285,714.29 25,714,285.71 120,000,000
First Interstate Bank of
California 94,285,714.29 25,714,285.71 120,000,000
The Long-Term Credit Bank
of Japan, Ltd., Los
Angeles Agency 94,285,714.29 25,714,285.71 120,000,000
NationsBank of Texas, N.A. 94,285,714.29 25,714,285.71 120,000,000
National Westminster Bank
Plc Los Angeles Overseas
Branch 94,285,714.29 25,714,285.71 120,000,000
Royal Bank of Canada 94,285,714.29 25,714,285.71 120,000,000
Societe Generale 94,285,714.29 25,714,285.71 120,000,000
Credit Suisse 70,714,285.71 19,285,714.29 90,000,000
The Industrial Bank of
Japan, Limited, Los
Angeles Agency 70,714,285.71 19,285,714.29 90,000,000
NBD Bank, N.A. 70,714,285.71 19,285,714.29 90,000,000
The Sumitomo Bank, Limited,
Los Angeles Branch 70,714,285.71 19,285,714.29 90,000,000
Morgan Guaranty Trust
Company of New York 62,857,142.86 17,142,857.14 80,000,000
Banco Central Hispano-
americano, San
Francisco Agency 39,285,714.29 10,714,285.71 50,000,000
Lloyds Bank Plc 39,285,714.29 10,714,285.71 50,000,000
Mellon Bank, N.A. 39,285,714.29 10,714,285.71 50,000,000
Shawmut Bank, N.A. 39,285,714.29 10,714,285.71 50,000,000
Wachovia Bank of
Georgia, N.A. 39,285,714.29 10,714,285.71 50,000,000
J.P. Morgan Delaware 31,428,571.43 8,571,428.57 40,000,000
TOTAL $2,200,000,000 $600,000,000 $2,800,000,000
SCHEDULE II
REFINANCED INDEBTEDNESS
PART A - NORTHROP CORPORATION
Series C 10.24% Notes due November 1995 in an aggregate principal amount of
$160,000,000 issued under the Note Purchase Agreement dated October 15,
1988
PART B - GRUMMAN CORPORATION
10-3/8% Notes due January 1, 1999 in an aggregate principal amount of
$200,000,000 issued under an Indenture dated as of January 1, 1989 between
Grumman Corporation and The Chase Manhattan Bank (National Association) as
Trustee
SCHEDULE III
LITIGATION
NONE
EXHIBIT A-1
[Form of Term Note]
PROMISSORY NOTE
$_____________________
FOR VALUE RECEIVED, NORTHROP CORPORATION, a Delaware corporation
(the "Company"), hereby promises to pay to _____________________
(the "Bank"), for account of its respective Applicable Lending
Offices provided for by the Credit Agreement referred to below,
at the principal office of The Chase Manhattan Bank (National
Association) at 1 Chase Manhattan Plaza, New York, New York
10081, the principal sum of __________________ Dollars (or such
lesser amount as shall equal the aggregate unpaid principal
amount of the Term Loans made by the Bank to the Company under
the Credit Agreement), in lawful money of the United States of
America and in immediately available funds, on the dates and in
the principal amount provided in the Credit Agreement, and to pay
interest on the unpaid principal amount of each such Term Loan,
at such office, in like money and funds, for the period
commencing on the date of such Term Loan until such Term Loan
shall be paid in full, at the rates per annum and on the dates
provided in the Credit Agreement.
The date, amount, Type, interest rate and duration of Interest
Period (if applicable) of each Term Loan made by the Bank to the
Company, and each payment made on account of the principal
thereof, shall be recorded by the Bank on its books and, prior to
any transfer of this Note, endorsed by the Bank on the schedule
attached hereto or any continuation thereof, provided that the
failure of the Bank to make any such recordation or endorsement
shall not affect the obligations of the Company to make a payment
when due of any amount owing under the Credit Agreement or
hereunder in respect of the Term Loans made by the Bank.
This Note is one of the Term Notes referred to in the Credit
Agreement dated as of April 15, 1994, as amended and restated as
of April 18, 1994 (as modified and supplemented and in effect
from time to time, the "Credit Agreement") among the Company, the
Banks named therein (including the Bank) and The Chase Manhattan
Bank (National Association), as Administrative Agent, and
evidences Term Loans made by the Bank thereunder. Terms used but
not defined in this Note have the respective meanings assigned to
them in the Credit Agreement.
The Credit Agreement provides for the acceleration of the
maturity of this Note upon the occurrence of certain events and
for prepayments of Term Loans upon the terms and conditions
specified therein.
Except as permitted by Section 11.06 of the Credit Agreement,
this Note may not be assigned by the Bank to any other Person.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
NORTHROP CORPORATION
By_____________________
Title:
TERM LOANS
Amount
Date Prin- Paid,
Made, cipal Duration Prepaid, Unpaid
Continued Amount Type of Continued Prin-
or of of Interest Interest or cipal Notation
Converted Loan Loan Rate Period Converted Amount Made by
EXHIBIT A-2
[Form of Revolving Note]
PROMISSORY NOTE
$_____________________
FOR VALUE RECEIVED, NORTHROP CORPORATION, a Delaware corporation
(the "Company"), hereby promises to pay to _____________________
(the "Bank"), for account of its respective Applicable Lending
Offices provided for by the Credit Agreement referred to below,
at the principal office of The Chase Manhattan Bank (National
Association) at 1 Chase Manhattan Plaza, New York, New York
10081, the principal sum of __________________ Dollars (or such
lesser amount as shall equal the aggregate unpaid principal
amount of the Revolving Loans made by the Bank to the Company
under the Credit Agreement), in lawful money of the United States
of America and in immediately available funds, on the dates and
in the principal amount provided in the Credit Agreement, and to
pay interest on the unpaid principal amount of each such
Revolving Loan, at such office, in like money and funds, for the
period commencing on the date of such Revolving Loan until such
Revolving Loan shall be paid in full, at the rates per annum and
on the dates provided in the Credit Agreement.
The date, amount, Type, interest rate and duration of Interest
Period (if applicable) of each Revolving Loan made by the Bank to
the Company, and each payment made on account of the principal
thereof, shall be recorded by the Bank on its books and, prior to
any transfer of this Note, endorsed by the Bank on the schedule
attached hereto or any continuation thereof, provided that the
failure of the Bank to make any such recordation or endorsement
shall not affect the obligations of the Company to make a payment
when due of any amount owing under the Credit Agreement or
hereunder in respect of the Revolving Loans made by the Bank.
This Note is one of the Revolving Notes referred to in the Credit
Agreement dated as of April 15, 1994, as amended and restated as
of April 18, 1994 (as modified and supplemented and in effect
from time to time, the "Credit Agreement") among the Company, the
Banks named therein (including the Bank) and The Chase Manhattan
Bank (National Association), as Administrative Agent, and
evidences Revolving Loans made by the Bank thereunder. Terms
used but not defined in this Note have the respective meanings
assigned to them in the Credit Agreement.
The Credit Agreement provides for the acceleration of the
maturity of this Note upon the occurrence of certain events and
for prepayments of Revolving Loans upon the terms and conditions
specified therein.
Except as permitted by Section 11.06 of the Credit Agreement,
this Note may not be assigned by the Bank to any other Person.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAW OF THE STATE OF NEW YORK.
NORTHROP CORPORATION
By_____________________
Title:
REVOLVING LOANS
Amount
Date Prin- Paid,
Made, cipal Duration Prepaid, Unpaid
Continued Amount Type of Continued Prin-
or of of Interest Interest or cipal Notation
Converted Loan Loan Rate Period Converted Amount Made by
EXHIBIT A-3
[Form of Competitive Bid Note]
PROMISSORY NOTE
FOR VALUE RECEIVED, NORTHROP CORPORATION, a Delaware corporation
(the "Company"), hereby promises to pay to
(the "Bank"), for account of its
respective Applicable Lending Offices provided for by the Credit
Agreement referred to below, at the principal office of The Chase
Manhattan Bank (National Association) at 1 Chase Manhattan Plaza,
New York, New York 10081, the aggregate unpaid principal amount
of the Competitive Bid Loans made by the Bank to the Company
under the Credit Agreement, in lawful money of the United States
of America and in immediately available funds, on the dates and
in the amounts provided in the Credit Agreement, and to pay
interest on the unpaid principal amount of each such Competitive
Bid Loan, at such office, in like money and funds, for the period
commencing on the date of such Loan until such Loan shall be paid
in full, at the rates and on the dates provided in the Credit
Agreement.
The date, amount, Type, interest rate and maturity date of each
Competitive Bid Loan made by the Bank to the Company, and each
payment made on account of the principal thereof, shall be
recorded by the Bank on its books and, prior to the transfer of
this Note, endorsed by the Bank on the schedule attached hereto
or any continuation thereof, provided that the failure by the
Bank to make such recordation or endorsement shall not affect the
obligations of the Company to make a payment when due of any
amount owing under the Credit Agreement or hereunder in respect
of the Competitive Bid Loans made by the Bank.
This Note is one of the Competitive Bid Notes referred to in the
Credit Agreement dated as of April 15, 1994, as amended and
restated as of April 18, 1994 (as amended, supplemented and
otherwise modified and in effect from time to time, the "Credit
Agreement") among the Company, the Banks named therein (including
the Bank) and The Chase Manhattan Bank (National Association), as
Administrative Agent, and evidences Competitive Bid Loans made by
the Bank thereunder. Terms used in this Note have the respective
meanings assigned to them in the Credit Agreement.
The Credit Agreement provides for the acceleration of the
maturity of this Note upon the occurrence of certain events and
for prepayments of Loans upon the terms and conditions specified
therein.
Except as permitted by Section 11.06 of the Credit Agreement,
this Note may not be assigned by the Bank to any other Person.
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.
NORTHROP CORPORATION
By
Title
COMPETITIVE BID LOANS
Principal
Date Amount Type Maturity Amount Unpaid
of of of Interest Date of Paid or Principal Notation
Loan Loan Loan Rate Loan Prepaid Amount Made by
EXHIBIT B-1
[Form of Opinion of Sheppard, Mullin, Richter & Hampton
in Connection with Initial Borrowing]
April __, 1994
To the Banks party to the
Credit Agreement referred to
below and The Chase Manhattan
Bank (National Association),
as Administrative Agent
Ladies and Gentlemen:
We have acted as special counsel to Northrop Corporation (the
"Company") and Northrop Acquisition, Inc. (the "Subsidiary
Guarantor" and, together with the Company, the "Credit Parties")
in connection with (i) the Credit Agreement (the "Credit
Agreement") dated as of April 15, 1994, among the Company, the
lenders named therein (the "Banks") and The Chase Manhattan Bank
(National Association), as administrative agent for the Banks (in
such capacity, the "Administrative Agent"), providing for loans
to be made by the Banks for the purpose, inter alia, of financing
the Tender Offer referred to therein and (ii) the various other
agreements and instruments referred to in the next following
paragraph. Terms defined in the Credit Agreement and not
otherwise defined herein are used herein as defined therein.
This opinion is being delivered to you at the request of the
Credit Parties pursuant to Section 6.01(d)(i) of the Credit
Agreement.
In rendering the opinions expressed below, we have examined the
following agreements, instruments and other documents:
(a) the Credit Agreement;
(b) the Notes;
(c) the Pledge Agreement;
(d) the Subsidiary Guaranty;
(e) such corporate records of the Credit Parties and such other
documents as we have deemed necessary as a basis for the opinions
expressed below.
The agreements, instruments and other documents referred to in
the foregoing clauses (a) through (d) are collectively referred
to as the "Credit Documents".
In our examination, we have assumed the genuineness of all
signatures, the authenticity of all documents submitted to us as
originals and the conformity with authentic original documents of
all documents submitted to us as copies. When relevant facts
were not independently established, we have relied upon
statements of governmental officials, representations made in or
pursuant to the Credit Documents and certificates of appropriate
representatives of the Credit Parties.
In rendering the opinions expressed below, we have assumed, with
respect to all of the documents referred to in this opinion
letter, that (except, to the extent set forth in the opinions
expressed below, as to the Credit Parties):
(i) such documents have been duly authorized by, have been
duly executed and delivered by, and constitute legal, valid,
binding and enforceable obligations of, all of the parties to
such documents;
(ii) all signatories to such documents have been duly
authorized;
(iii) all of the parties to such documents are duly organized
and validly existing and have the power and authority (corporate
or other) to execute, deliver and perform such documents; and
(iv) the Credit Documents and the transactions contemplated by
the Credit Documents comply with all laws and regulations that
are applicable to the Administrative Agent and each of the Banks
because of the nature of the businesses of the Administrative
Agent and the Banks.
Based upon and subject to the foregoing and subject also to the
comments and qualifications set forth below, and having
considered such questions of law as we have deemed necessary as a
basis for the opinions expressed below, we are of the opinion
that:
1. Each of the Credit Documents constitutes the legal, valid and
binding obligation of each Credit Party party thereto, in each
case enforceable against such Credit Party in accordance with its
terms under the laws of the State of New York, except as may be
limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws relating to or affecting the rights of
creditors generally, including without limitation the effect of
statutory or other laws regarding fraudulent conveyances or
transfers and preferential transfers, and except as the
enforceability thereof is subject to the application of general
principles of equity (regardless of whether considered in a
proceeding in equity or at law), including, without limitation,
(a) the possible unavailability of specific performance,
injunctive relief or any other equitable remedy and (b) concepts
of materiality, reasonableness, good faith and fair dealing. In
the event that a court in California did not give effect to the
choice of New York law contained in the Credit Documents and
instead applied the internal laws of the California to the
enforcement thereof, each of the Credit Documents would
constitute the legal, valid and binding obligation of each Credit
Party party thereto, enforceable against such Credit Party in
accordance with its terms under the laws of the State of
California, except as provided in the preceding sentence.
2. No authorization, approval or consent of, and no filing or
registration with, any governmental or regulatory authority or
agency of the United States of America, the State of California
or the State of New York is required by law to be obtained or
made by either Credit Party in connection with the execution,
delivery and performance by such Credit Party, or for the
validity or enforceability against such Credit Party, of any of
the Credit Documents to which it is a party, for the borrowings
by the Company under the Credit Agreement or for the borrowings
by the Subsidiary Guarantor of the Intercompany Loans, except for
(i) the filing of financing statements in respect of the Liens
created pursuant to the Pledge Agreement in respect of the
Collateral (other than the Pledged Collateral, as defined below)
and (ii) such consents, approvals, authorizations, registrations,
declarations and filings, the failure to make or obtain (a) which
would not have a material adverse effect on the business,
condition or results of operation of such Credit Party and (b)
which would not adversely affect the validity or enforceability
of any of the Credit Documents or the rights or remedies of the
Administrative Agent or the Banks thereunder or the ability of
any of them to perform its obligations under the Credit Documents
to which it is a party, or would give rise to liability on the
part of the Administrative Agent or the Banks.
3. The execution, delivery and performance by each Credit Party
of the Credit Documents to which it is party, the borrowings by
the Company under the Credit Agreement and the borrowings by the
Subsidiary Guarantor of the Intercompany Loans do not and will
not (a) violate any provision of the charter or by-laws of either
Credit Party or (b) violate any applicable law, rule or
regulation, including, without limitation, the Exchange Act, the
Securities Act or Regulations U and X.
4. We have no knowledge of any legal or arbitral proceedings, or
any proceedings by or before any governmental or regulatory
authority or agency, pending or threatened against or affecting
the Credit Parties or any of their respective Subsidiaries or any
of their respective Properties that, if adversely determined,
could have a Material Adverse Effect, except as disclosed in the
Company's Annual Report on Form 10-K for the calendar year ended
December 31, 1993 or in Schedule III to the Credit Agreement.
5. Assuming delivery to the Administrative Agent of New York of
stock certificates representing shares of common stock
certificates representing shares of common stock of the
Subsidiary Guarantor described in Annex 1 to the Pledge Agreement
(the "Pledged Shares") and the Intercompany Note (together with
the Pledged Shares, the "Pledged Collateral"), the security
interests in the Pledged Collateral granted by the Company to the
Administrative Agent, for the benefit of the Banks, in the Pledge
Agreement will constitute valid and perfected security interests
therein under New York law, prior in right to all other security
interests therein created under, and the priority of which is
governed by, Articles 8 and 9 of the New York Uniform Commercial
Code (the "New York UCC").
6. The Pledge Agreement is effective to create, in favor of the
Administrative Agent, for the benefit of the Banks, a valid
security interest (together with the security interests in the
Pledged Collateral, the "Security Interests") in the interest of
the Company in and to the Collateral (as defined in the Pledge
Agreement) (other than the Pledged Collateral) to the extent that
a security interest can be created therein under the New York
UCC. A security interest can be created in all of the Company's
right, title and interest in, to and under the Merger Agreement.
The foregoing opinions are subject to the following comments and
qualifications:
(A) The enforceability of Section 11.03 of the Credit Agreement
(and any similar provisions in any of the other Credit Documents)
may be limited by laws rendering unenforceable (i)
indemnification contrary to Federal or state securities laws and
the public policy underlying such laws and (ii) the release of a
party from, or the indemnification of a party against, liability
for its own wrongful or negligent acts under certain
circumstances.
(B) The enforceability of provisions in the Credit Documents to
the effect that terms may not be waived or modified except in
writing may be limited under certain circumstances.
(C) We express no opinion as to (i) the effect of the laws of
any jurisdiction in which any Bank is located (other than the
States of California and New York) that limit the interest, fees
or other charges such Bank may impose, (ii) the fourth sentence
of Section 4.05 of the Credit Agreement, (iii) the second
sentence of Section 11.10 of the Credit Agreement (and any
similar provisions in any of the other Credit Documents), insofar
as such sentence relates to the subject matter jurisdiction of
the United States District Court for the Southern District of New
York to adjudicate any controversy related to the Credit
Documents, and (iv) the waiver of inconvenient forum set forth in
the third sentence of Section 11.10 of the Credit Agreement (and
any similar provisions in any of the other Credit Documents) with
respect to proceedings in the United States District Court for
the Southern District of New York.
(D) We wish to point out that the obligations of the Company,
and the rights and remedies of the Administrative Agent and the
Banks, under the Pledge Agreement may be subject to possible
limitations upon the exercise of remedial or procedural
provisions contained in the Pledge Agreement, provided that such
limitations do not, in our opinion, make the remedies and
procedures that will be afforded to the Administrative Agent and
the Banks inadequate for the practical realization of the
substantive benefits purported to be provided to the
Administrative Agent and the Banks by the Pledge Agreement.
(E) We express no opinion as to the existence of, or the right,
title or interest of the Company in, to or under, any of the
Collateral (as defined in the Pledge Agreement).
(F) Except as expressly provided in paragraphs 5 and 6 above, we
express no opinion as to the creation, perfection or priority of
any security interest in, or other Lien on, the Collateral (as
defined in the Pledge Agreement).
(G) We express no opinion as to the applicability to the
obligations of the Subsidiary Guarantor (or the enforceability of
such obligations) of Section 548 of the Bankruptcy Code, Article
10 of the New York Debtor and Creditor Law or any other provision
of law relating to fraudulent conveyances, transfers or
obligations.
(H) We have assumed that the Company has rights in the
Collateral covered by the Pledge Agreement, and that no agreement
exists that postpones attachment of, or modifies, releases or
terminates, the Administrative Agent's security interest therein
or that would expand, modify or otherwise affect the respective
rights and obligations of the parties to the Credit Documents.
(I) We assume that the Administrative Agent will continuously
maintain possession of the Pledged Collateral.
(J) Our opinions set forth in Paragraph 1 hereof are subject to
the following qualifications: (A) the Administrative Agent may
not be entitled to vote the Pledged Shares or to receive
dividends or other distributions directly from the issuer thereof
prior to becoming the record holder of the Pledged Shares; and
(B) none of the Pledged Shares may be sold or further transferred
by the Administrative Agent or the Banks without registration
under the Securities Act of 1933, except pursuant to an exemption
from registration contained in such Act, and qualification or
exemption from qualification under any applicable state
securities or Blue Sky laws.
(K) We call to your attention that, in the case of Collateral
consisting of instruments or certificated securities, the
Security Interests therein will only be enforceable and perfected
if, when and to the extent that the Administrative Agent, on
behalf of the Banks, obtains and maintains possession of such
instruments or certificated securities in accordance with
applicable provisions of the Uniform Commercial Code as in effect
in the relevant jurisdiction. Without limitation, in the case of
the issuance of additional shares in respect of the Pledged
Shares or payments or other distributions in respect to the
Pledged Collateral which may only be perfected by possession, the
Security Interests of the Administrative Agent therein will be
perfected only upon delivery thereof to the Administrative Agent.
(L) With respect to our opinion as to priority set forth in
paragraph 5, we have assumed that (i) the Pledged Collateral was
delivered to the Administrative Agent together with an instrument
of transfer or was endorsed by the Company to the Administrative
Agent or in blank, (ii) the Administrative Agent, on behalf of
the Banks, has taken its Security Interests in the Pledged
Collateral in good faith, without the Administrative Agent or any
Bank having, at the time of delivery thereof to the
Administrative Agent, notice or actual knowledge of any adverse
claims thereto by, or any interest therein of, any Person other
than the pledgor (or, in the case of the Intercompany Note, that
it was overdue or had been dishonored or that any defense to
payment then existed).
(M) We call to your attention the effect of California Civil
Code Section 1717 which provides, in essence, that where a
contract permits one party to the contract to recover attorneys'
fees, the prevailing party in any action to enforce any provision
of the contract shall be entitled to recovery of its reasonable
attorneys' fees.
(N) With respect to the opinion set forth in paragraph 4 above,
we note to you that while we have made due inquiry of the General
Counsel and other appropriate officers of the Company we have not
conducted a search of any litigation index or any other records
maintained with any court or other tribunal.
(O) We have assumed that the Administrative Agent obtained
possession of all of the Pledged Collateral in the State of New
York.
The foregoing opinions are limited to matters involving the
currently existing Federal laws of the United States of America,
the Delaware General Corporation Law and the laws of the States
of California and New York, and we do not express any opinion as
to the laws of any other jurisdiction. Insofar as the foregoing
opinions relate to matters involving the laws of the State of New
York, we have relied with your permission exclusively upon the
opinion of Gibson, Dunn & Crutcher attached hereto.
This opinion letter is provided to you by us in our capacity as
counsel to the Credit Parties and may not be relied upon by any
Person for any purpose other than in connection with the
transactions contemplated by the Credit Agreement without, in
each instance, our prior written consent.
Very truly yours,
EXHIBIT B-2
[Form of Opinion of Gibson, Dunn & Crutcher
in Connection with Initial Borrowing]
April __, 1994
To the Banks party to the
Credit Agreement referred to
below and The Chase Manhattan
Bank (National Association),
as Administrative Agent
Ladies and Gentlemen:
We have acted as special counsel to Northrop Corporation (the
"Company") and Northrop Acquisition, Inc. (the "Purchaser" and,
together with the Company, the "Credit Parties") in connection
with the Tender Offer referred to in the Credit Agreement (the
"Credit Agreement") dated as of April 15, 1994, among the
Company, the lenders named therein (the "Banks") and The Chase
Manhattan Bank (National Association), as administrative agent
for the Banks (in such capacity, the "Administrative Agent"),
providing for loans to be made by the Banks for the purpose,
inter alia, of financing such Tender Offer. Terms defined in the
Credit Agreement and not otherwise defined herein are used herein
as defined therein. This opinion is being delivered to you at
the request of the Credit Parties pursuant to Section 6.01(d)(ii)
of the Credit Agreement.
In rendering the opinions expressed below, we have examined such
corporate records of the Credit Parties and such other documents
as we have deemed necessary as a basis for such opinions. In our
examination, we have assumed the genuineness of all signatures,
the authenticity of all documents submitted to us as originals
and the conformity with authentic original documents of all
documents submitted to us as copies. When relevant facts were
not independently established, we have relied upon statements of
governmental officials, representations made in or pursuant to
the Tender Offer Documents and certificates of appropriate
representatives of the Credit Parties.
Based upon and subject to the foregoing and subject also to the
comments and qualifications set forth below, and having
considered such questions of law as we have deemed necessary as a
basis for the opinions expressed below, we are of the opinion
that:
1. No authorization, approval or consent of, and no filing or
registration with, any governmental or regulatory authority or
agency of the United States of America, the State of California
or the State of New York is required on the part of any Credit
Party for the consummation of the transactions contemplated by
the Tender Offer Documents, except for such authorizations,
approvals, consents, filings and registrations as are disclosed
in the Offer to Purchase which have been duly obtained or
effected and remain in full force and effect.
2. The consummation of the transactions contemplated by the
Tender Offer Documents do not and will not (a) violate any
provision of the charter or by-laws of either Credit Party or (b)
violate any applicable law, rule or regulation, including,
without limitation, the Exchange Act, the Securities Act or
Regulations U and X. Our opinion in clause (b) of the foregoing
sentence is based upon the assumption that no Tender Offer
Document contains any untrue statement of any material fact or
omits to state any material fact required to be stated therein or
necessary in order to make the statements made therein, in light
of the circumstances under which they were made, not misleading.
3. The Schedule 14D-1 has been duly and timely filed with the
SEC in compliance with and pursuant to the Exchange Act.
4. The Schedule 14D-1 (except the financial statements and other
financial and statistical data included therein, as to which we
express no opinion) appears on its face to be appropriately
responsive in all material respects to the applicable provisions
of the Exchange Act.
5. The Shares tendered to the Purchaser pursuant to Tender Offer
have been accepted by the Purchaser in accordance with its terms.
The foregoing opinions are limited to matters involving the
Federal laws of the United States of America, the Delaware
General Corporation Law and the laws of the States of California
and New York, and we do not express any opinion as to the laws of
any other jurisdiction.
This opinion letter is provided to you by us in our capacity as
counsel to the Credit Parties and may not be relied upon by any
Person for any purpose other than in connection with the
transactions contemplated by the Credit Agreement without, in
each instance, our prior written consent.
Very truly yours,
EXHIBIT B-3
[Form of Opinion of General Counsel of the Company]
___________ __, 1994
To The Banks party to the
Credit Agreement referred to
below and The Chase Manhattan
Bank (National Association)
as Administrative Agent
Ladies and Gentlemen:
I am a Corporate Vice President and the General Counsel of
Northrop Corporation (the "Company"), and I have participated on
behalf of the Company and Northrop Acquisition, Inc. (the
"Subsidiary Guarantor" and, together with the Company, the
"Credit Parties") in the negotiation, execution, delivery and
closing of the Credit Agreement (the "Credit Agreement") dated as
of April 15, 1994, as amended and restated as of April 18, 1994,
among the Company, the lenders named therein (the "Banks") and
The Chase Manhattan Bank (National Association), as
administrative agent for the Banks (in such capacity, the
"Administrative Agent"), providing for loans to be made by the
Banks for the purpose, inter alia, of financing the Tender Offer
referred to therein. Terms defined in the Credit Agreement and
not otherwise defined herein are used herein as defined therein.
This opinion is being delivered to you at the request of the
Credit Parties pursuant to Section 6.01(d)(iii) of the Credit
Agreement.
In rendering the opinions expressed below, I have examined, or
caused to be examined by lawyers on my staff, the following
agreements, instruments and other documents:
(a) the Credit Agreement;
(b) the Notes;
(c) the Pledge Agreement;
(d) the Subsidiary Guaranty;
(e) the Tender Offer Documents; and
(f) such corporate records of the Credit Parties
and such other documents as I have deemed necessary as
a basis for the opinions expressed below.
The agreements, instruments and other documents referred to in
the foregoing clauses (a) through (e) are collectively referred
to as the "Transaction Documents".
In my examination, I have assumed the genuineness of all
signatures, the authenticity of all documents submitted to me as
originals and the conformity with authentic original documents of
all documents submitted to me as copies. When relevant facts
were not independently established, I have relied upon statements
of governmental officials, representations made in or pursuant to
the Transaction Documents and certificates of appropriate
representatives of the Credit Parties.
Based upon and subject to the foregoing and subject also to the
comments and qualifications set forth below, and having
considered such questions of law as I have deemed necessary as a
basis for the opinions expressed below, I am of the opinion that:
1. Each Credit Party is a corporation duly organized, validly
existing and in good standing under the law of the State of
Delaware.
2. Each Credit Party has all requisite corporate power to
execute and deliver, and to perform its obligations under, the
Credit Documents to which it is a party and to consummate the
other transactions contemplated by the Transaction Documents.
The Company has all requisite corporate power to borrow under the
Credit Agreement. The Subsidiary Guarantor has all requisite
corporate power to borrow the Intercompany Loans.
3. The execution, delivery and performance by each Credit Party
of each Credit Document to which it is a party, the borrowings by
the Company under the Credit Agreement, the borrowings by the
Subsidiary Guarantor of the Intercompany Loans and the
consummation of the other transactions contemplated by the
Transaction Documents have been duly authorized by all necessary
corporate action on the part of such Credit Party.
4. Each Credit Document has been duly executed and delivered by
each Credit Party thereto.
5. The execution, delivery and performance by each Credit Party
of the Credit Documents to which it is a party, the borrowings by
the Company under the Credit Agreement, the borrowings by the
Subsidiary Guarantor of the Intercompany Loans and the
consummation of the other transactions contemplated by the
Transaction Documents do not and will not (a) violate any order,
writ, injunction or decree of any court or governmental authority
or agency of any arbitral award applicable to the Credit Parties
or any of their respective Subsidiaries of which I have knowledge
(after due inquiry) or (b) except as disclosed in writing to the
Banks prior to the date of the Credit Agreement in accordance
with Section 7.04 of the Credit Agreement, result in a breach of,
constitute a default under, require any consent under, or result
in the acceleration or required prepayment of any indebtedness
pursuant to the terms of, any material agreement or instrument of
which I have knowledge (after due inquiry) to which the Credit
Parties or any of their respective Subsidiaries is a party or by
which any of them is bound or to which any of them is subject, or
(except for the Liens created pursuant to the Pledge Agreement)
result in the creation or imposition of any Lien upon any
Property of any Credit Party pursuant to, the terms of any such
agreement or instrument.
6. I have no knowledge (after due inquiry) of any legal or
arbitral proceedings, or any proceedings by or before any
governmental or regulatory authority or agency, now pending or
threatened against or affecting the Credit Parties or any of
their Subsidiaries, which, if adversely determined, would result
in any Material Adverse Effect, except as heretofore disclosed to
the Banks in the Company's Annual Report on Form 10-K for the
calendar year ended December 31, 1993 or on Schedule III to the
Credit Agreement.
The foregoing opinions are limited to matters involving the
Federal laws of the United States of America, the Delaware
General Corporation Law and the laws of the State of California,
and I do not express any opinion as to the laws of any other
jurisdiction.
This opinion letter is provided to you by me in my capacity as a
Corporate Vice President and the General Counsel of the Company
and may not be relied upon by any Person for any purpose other
than in connection with the transactions contemplated by the
Credit Agreement without, in each instance, my prior written
consent.
Very truly yours,
Richard R. Molleur
EXHIBIT B-4
[Form of Opinion of Sheppard, Mullin, Richter & Hampton
on Merger Date]
______________, 1994
To the Banks party to the
Credit Agreement referred to
below and The Chase Manhattan
Bank (National Association),
as Administrative Agent
Ladies and Gentlemen:
We have acted as special counsel to Northrop Corporation (the
"Company") and Northrop Acquisition, Inc. (the "Subsidiary
Guarantor") in connection with (i) the Credit Agreement (the
"Credit Agreement") dated as of April 15, 1994, among the
Company, the lenders named therein (the "Banks") and The Chase
Manhattan Bank (National Association), as administrative agent
for the Banks (in such capacity, the "Administrative Agent"),
providing for loans to be made by the Banks for the purpose,
inter alia, of financing the Tender Offer referred to therein and
(ii) the various other agreements and instruments referred to in
the next following paragraph. Terms defined in the Credit
Agreement and not otherwise defined herein are used herein as
defined therein. This opinion is being delivered to you at the
request of the Company pursuant to Section 6.03(b)(i) of the
Credit Agreement.
In rendering the opinions expressed below, we have examined the
following agreements, instruments and other documents:
(a) the Credit Agreement;
(b) the Notes;
(c) the Pledge Agreement;
(d) the Subsidiary Guaranty; and
(e) such corporate records of the Company, the Subsidiary
Guarantor and Grumman Corporation ("Grumman") and such other
documents as we have deemed necessary as a basis for the
opinions expressed below.
In our examination, we have assumed the genuineness of all
signatures, the authenticity of all documents submitted to us as
originals and the conformity with authentic original documents of
all documents submitted to us as copies. When relevant facts
were not independently established, we have relied upon
statements of governmental officials, representations made in or
pursuant to the Credit Documents and certificates of appropriate
representatives of the Company, the Subsidiary Guarantor and/or
Grumman.
In rendering the opinions expressed below, we have assumed, with
respect to all of the documents referred to in this opinion
letter, that (except, to the extent set forth in the opinions
expressed below or in our opinion previously furnished to you
pursuant to Section 6.01(d)(i) of the Credit Agreement, as to the
Company and the Subsidiary Guarantor):
(i) such documents have been duly authorized by, have been duly
executed and delivered by, and constitute legal, valid, binding
and enforceable obligations of, all of the parties to such
documents;
(ii) all signatories to such documents have been duly
authorized;
(iii) all of the parties to such documents are duly organized
and validly existing and have the power and authority (corporate
or other) to execute, deliver and perform such documents;
(iv) the Merger has been duly and validly consummated in
accordance with the Merger Agreement and applicable law;
(v) by operation of law, Grumman has assumed all of the
obligations of the Subsidiary Guarantor under the Subsidiary
Guaranty and the Intercompany Note (such assumption being
hereinafter referred to as the "Assumption" and the obligations
so assumed being hereinafter being referred to as the "Assumed
Obligations"); and
(vi) the issued and outstanding shares of capital stock of
Grumman acquired by the Company in the Merger (the "Grumman
Stock") have been duly and validly issued and are fully paid and
nonassessable.
Based upon and subject to the foregoing and subject also to the
comments and qualifications set forth below, and having
considered such questions of law as we have deemed necessary as a
basis for the opinions expressed below, we are of the opinion
that:
1. The Assumed Obligations constitute the legal, valid and
binding obligations of Grumman, enforceable against Grumman in
accordance with their respective terms under the laws of the
State of New York, except as may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws
relating to or affecting the rights of creditors generally and
except as the enforceability thereof is subject to the
application of general principles of equity (regardless of
whether considered in a proceeding in equity or at law),
including, without limitation, (a) the possible unavailability of
specific performance, injunctive relief or any other equitable
remedy and (b) concepts of materiality, reasonableness, good
faith and fair dealing. In the event that a court in California
did not give effect to the choice of New York law contained in
the Subsidiary Guaranty and instead applied the internal laws of
the California to the enforcement thereof, the Subsidiary
Guaranty would constitute the legal, valid and binding obligation
of Grumman, enforceable against Grumman in accordance with its
terms under the laws of the State of California, except as
provided in the preceding sentence.
2. No authorization, approval or consent of, and no filing or
registration with, any governmental or regulatory authority or
agency of the United States of America or the State of New York
is required on the part of Grumman for the Assumption or the
performance of the Assumed Obligations.
3. The Assumption and the performance by Grumman of the Assumed
Obligations does not and will not violate any applicable law,
rule or regulation, including, without limitation, the Exchange
Act, the Securities Act or Regulations U and X.
4. The Pledge Agreement is effective to create, in favor of the
Administrative Agent for the benefit of the Administrative Agent
and the Banks, a valid security interest under the Uniform
Commercial Code as in effect in the State of New York (the
"Uniform Commercial Code") in all of the right, title and
interest of the Company in, to and under the Grumman Stock,
except that the creation of such security interest requires the
transfer of the Grumman Stock to the Administrative Agent
pursuant to Section 8-313(1) of the Uniform Commercial Code,
which transfer in the case of a "certificated security" (as
defined in said Section 8-102) may be effected in the manner
contemplated by paragraph 5 below.
5. The security interest referred to in paragraph 4 above in the
Grumman Stock will, upon the creation of such security interest,
be perfected by the Administrative Agent taking possession
thereof (or any certificates representing the same) in the State
of New York and thereafter retaining possession.
6. Assuming that the Administrative Agent (or any custodian
acting on its behalf) obtains, and thereafter maintains,
possession of the Grumman Stock in good faith and without notice
of any adverse claim (as defined in Section 8-302(2) of the
Uniform Commercial Code) and in bearer form or in registered form
issued to the Administrative Agent or endorsed to the
Administrative Agent or in blank, any perfected security interest
therein will have priority over all other security interests
theretofore or thereafter created under the Uniform Commercial
Code.
The foregoing opinions are subject to the following comments and
qualifications:
(A) The enforceability of Section 4.03 of the Subsidiary
Guaranty may be limited by laws rendering unenforceable (i)
indemnification contrary to Federal or state securities laws and
the public policy underlying such laws and (ii) the release of a
party from, or the indemnification of a party against, liability
for its own wrongful or negligent acts under certain
circumstances.
(B) The enforceability of provisions in the Subsidiary Guaranty
to the effect that terms may not be waived or modified except in
writing may be limited under certain circumstances.
(C) We express no opinion as to (i) the effect of the laws of
any jurisdiction in which any Bank is located (other than the
States of California and New York) that limit the interest, fees
or other charges such Bank may impose, (ii) the second sentence
of Section 4.09 of the Subsidiary Guaranty, insofar as such
sentence relates to the subject matter jurisdiction of the United
States of America District Court for the Southern District of New
York to adjudicate any controversy related to the Credit
Documents, and (iii) the waiver of inconvenient forum set forth
in the third sentence of Section 4.09 of the Subsidiary Guaranty
with respect to proceedings in the United States of America
District Court for the Southern District of New York.
(D) We express no opinion as to the existence of, or the right,
title or interest of the Company in, to or under, any of the
Collateral (as defined in the Pledge Agreement).
(E) Except as expressly provided in paragraphs 4, 5 and 6 above,
we express no opinion as to the creation, perfection or priority
of any security interest in, or other Lien on, the Collateral (as
defined in the Pledge Agreement).
(F) We express no opinion as to the applicability to the
obligations of Grumman (or the enforceability of such
obligations) of Section 548 of the Bankruptcy Code, Article 10 of
the New York Debtor and Creditor Law or any other provision of
law relating to fraudulent conveyances, transfers or obligations.
The foregoing opinions are limited to matters involving the
Federal laws of the United States of America, the Delaware
General Corporation Law and the laws of the States of California
and New York, and we do not express any opinion as to the laws of
any other jurisdiction. Insofar as the foregoing opinions relate
to matters involving the laws of the State of New York, we have
relied upon the opinion of Gibson, Dunn & Crutcher attached
hereto.
This opinion letter is provided to you by us in our capacity as
counsel to the Company and may not be relied upon by any Person
for any purpose other than in connection with the transactions
contemplated by the Credit Agreement without, in each instance,
our prior written consent.
Very truly yours,
EXHIBIT B-5
[Form of Opinion of Gibson, Dunn & Crutcher on Merger Date]
______________, 1994
To the Banks party to the
Credit Agreement referred to
below and The Chase Manhattan
Bank (National Association),
as Administrative Agent
Ladies and Gentlemen:
We have acted as special counsel to Northrop Corporation (the
"Company") and Northrop Acquisition, Inc. (the "Purchaser" in
connection with the Merger referred to in the Credit Agreement
(the "Credit Agreement") dated as of April 15, 1994, as amended
and restated as of April 18, 1994, among the Company, the lenders
named therein (the "Banks") and The Chase Manhattan Bank
(National Association), as administrative agent for the Banks (in
such capacity, the "Administrative Agent"). Terms defined in the
Credit Agreement and not otherwise defined herein are used herein
as defined therein. This opinion is being delivered to you at
the request of the Company pursuant to Section 6.03(b)(ii) of the
Credit Agreement.
In rendering the opinions expressed below, we have examined (i)
the Assumption Agreement dated as of [__________], 1994 (the
"Assumption Agreement") made by Grumman Corporation ("Grumman")
for the benefit of the Agent and the Banks and (ii) such
corporate records of the Company, the Purchaser and Grumman and
such other documents as we have deemed necessary as a basis for
the opinions expressed below.
In our examination, we have assumed the genuineness of all
signatures, the authenticity of all documents submitted to us as
originals and the conformity with authentic original documents of
all documents submitted to us as copies. When relevant facts
were not independently established, we have relied upon
statements of governmental officials, representations made in or
pursuant to the Merger Documents and certificates of appropriate
representatives of the Company, the Purchaser and/or Grumman.
In rendering the opinions expressed below, we have assumed, with
respect to all of the documents referred to in this opinion
letter, that (except, to the extent set forth in the opinions
expressed below):
(i) such documents have been duly authorized by, have been duly
executed and delivered by, and constitute legal, valid, binding
and enforceable obligations of, all of the parties to such
documents;
(ii) all signatories to such documents have been duly
authorized; and
(iii) all of the parties to such documents are duly organized
and validly existing and have the power and authority (corporate
or other) to execute, deliver and perform such documents.
Based upon and subject to the foregoing and subject also to the
comments and qualifications set forth below, and having
considered such questions of law as we have deemed necessary as a
basis for the opinions expressed below, we are of the opinion
that:
1. The Merger has been duly and validly consummated in
accordance with the Merger Agreement and applicable New York and
Delaware law. By operation of law, and pursuant to the
Assumption Agreement, Grumman has assumed all of the obligations
of the Purchaser under the Subsidiary Guaranty and the
Intercompany Note.
2. The issued and outstanding shares of capital stock of Grumman
acquired by the Company in the Merger consist of
___________________. All of such shares have been duly and
validly issued and are fully paid and nonassessable.
We are admitted to practice in the State of New York; however, we
are generally familiar with the Delaware General Corporation Law
as presently in effect and have made such inquiries as we
consider necessary to render the opinions set forth herein
relating to Delaware law. Except with respect to the present
laws of the State of Delaware and the present judicial
interpretations thereof to the limited extent set forth above,
this opinion is limited to the present laws of the United States
of America and the State of New York and the present judicial
interpretations thereof, and we express no opinion as to the laws
of any other jurisdiction.
This opinion is rendered to the Agent and the Banks as of the
date hereof in connection with the Credit Agreement, and may not
be relied upon by any person other than the Agent and the Banks,
or by them in any other context, and may not be furnished to any
other person or entity without our prior written consent,
provided that each Bank may provide this opinion (i) to bank
examiners and other regulatory authorities should they so request
or in connection with their normal examination, (ii) to the
independent auditors and attorneys of such Bank, (iii) pursuant
to order or legal process of any court or governmental agency,
(iv) in connection with any legal action to which the Bank is a
party arising out of the transactions contemplated by the Credit
Agreement, or (v) to any assignee or participant, or prospective
assignee or participant, in connection with the assignment of or
sale of participations in the Loans.
Very truly yours,
EXHIBIT B-6
[Form of Opinion of General Counsel of Grumman]
April __, 1994
To the Banks party to the
Credit Agreement referred to
below and The Chase Manhattan
Bank (National Association),
as Administrative Agent
Ladies and Gentlemen:
I am the General Counsel of Grumman Corporation ("Grumman"), and
I have participated on behalf of Grumman in (i) the closing of
the Merger referred to in the Credit Agreement (the "Credit
Agreement") dated as of April 15, 1994, as amended and restated
as of April 18, 1994, among the Company, the lenders named
therein (the "Banks") and The Chase Manhattan Bank (National
Association), as administrative agent for the Banks (in such
capacity, the "Administrative Agent"), and (ii) the assumption
by Grumman by operation of law as a result of such Merger of all
of the obligations of Northrop Acquisition, Inc. under the
Subsidiary Guaranty, the Intercompany Loans and the Intercompany
Note referred to in the Credit Agreement (such assumption being
hereinafter referred to as the "Assumption" and the obligations
so assumed being hereinafter being referred to as the "Assumed
Obligations"). Terms defined in the Credit Agreement and not
otherwise defined herein are used herein as defined therein.
This opinion is being delivered to you at the request of Grumman
pursuant to Section 6.03(b)(iii) of the Credit Agreement.
In rendering the opinions expressed below, I have examined, or
caused to be examined by lawyers on my staff, the following
agreements, instruments and other documents:
(a) the Credit Agreement;
(b) the Notes;
(c) the Subsidiary Guaranty;
(d) the Intercompany Note;
(e) the Merger Agreement; and
(f) such corporate records of Grumman and such other documents
as I have deemed necessary as a basis for the opinions
expressed below.
The agreements, instruments and other documents referred to in
the foregoing clauses (a) through (e) are collectively referred
to as the "Merger Date Transaction Documents".
In my examination, I have assumed the genuineness of all
signatures, the authenticity of all documents submitted to me as
originals and the conformity with authentic original documents of
all documents submitted to me as copies. When relevant facts
were not independently established, I have relied upon statements
of governmental officials, representations made in or pursuant to
the Merger Date Transaction Documents and certificates of
appropriate representatives of Grumman.
In rendering the opinions expressed below, I have assumed, with
respect to all of the documents referred to in this opinion
letter, that (except, to the extent set forth in the opinions
expressed below, as to Grumman):
(i) such documents have been duly authorized by, have been duly
executed and delivered by, and constitute legal, valid, binding
and enforceable obligations of, all of the parties to such
documents;
(ii) all signatories to such documents have been duly
authorized; and
(iii) all of the parties to such documents are duly organized
and validly existing and have the power and authority (corporate
or other) to execute, deliver and perform such documents.
Based upon and subject to the foregoing and subject also to the
comments and qualifications set forth below, and having
considered such questions of law as I have deemed necessary as a
basis for the opinions expressed below, I am of the opinion that:
1. Grumman is a corporation duly organized, validly existing and
in good standing under the laws of the State of New York.
2. The Merger has been duly and validly consummated in
accordance with the Merger Agreement and applicable law.
3. Grumman has all requisite corporate power to make the
Assumption and to perform the Assumed Obligations.
4. The Assumption and the performance of the Assumed Obligations
have been duly authorized by all necessary corporate action on
the part of Grumman.
5. The Assumption and the performance of the Assumed Obligations
do not and will not (a) violate any provision of the charter or
by-laws of Grumman, (b) violate any order, writ, injunction or
decree of any court or governmental authority or agency or any
arbitral award applicable to Grumman or any of its Subsidiaries
of which I have knowledge (after due inquiry) or (c) result in a
breach of, constitute a default under, require any consent under,
or result in the acceleration or required prepayment of any
indebtedness pursuant to the terms of, any material agreement or
instrument of which I have knowledge (after due inquiry) to which
Grumman or any of its Subsidiaries is a party or by which any of
them is bound or to which any of them is subject, or result in
the creation or imposition of any Lien upon any Property of
Grumman pursuant to, the terms of any such agreement or
instrument.
The foregoing opinions are limited to matters involving the
Federal laws of the United States of America and the laws of the
State of New York, and I do not express any opinion as to the
laws of any other jurisdiction.
This opinion letter is provided to you by me in my capacity as
the General Counsel of Grumman and may not be relied upon by any
Person for any purpose other than in connection with the
transactions contemplated by the Credit Agreement without, in
each instance, my prior written consent.
Very truly yours,
EXHIBIT C
[Form of Opinion of Special New York Counsel to the Banks]
April __, 1994
To the Banks party to the
Credit Agreement referred to
below and The Chase Manhattan
Bank (National Association),
as Administrative Agent
Ladies and Gentlemen:
We have acted as your special New York counsel in connection with
the Credit Agreement (the "Credit Agreement") dated as of April
15, 1994, as amended and restated as of April 18, 1994, among
Northrop Corporation (the "Company"), the lenders named therein
(the "Banks") and The Chase Manhattan Bank (National
Association), as administrative agent for the Banks (in such
capacity, the "Administrative Agent"), providing for loans to be
made by the Banks for the purpose, inter alia, of financing the
Tender Offer referred to therein. Terms defined in the Credit
Agreement and not otherwise defined herein are used herein as
defined therein. This opinion is being delivered to you pursuant
to Section 6.01(e) of the Credit Agreement.
In rendering the opinions expressed below, we have examined the
following agreements, instruments and other documents:
(a) the Credit Agreement;
(b) the Notes;
(c) the Pledge Agreement; and
(d) the Subsidiary Guaranty.
In our examination, we have assumed the genuineness of all
signatures, the authenticity of all documents submitted to us as
originals and the conformity with authentic original documents of
all documents submitted to us as copies. We have also assumed
for all purposes of the opinions expressed below, with respect to
all of the documents referred to in this opinion letter, that
(except, to the extent set forth below, as to the Credit
Parties):
(i) such documents have been duly authorized by, have been duly
executed and delivered by, and constitute legal, valid, binding
and enforceable obligations of, all of the parties to such
documents;
(ii) all signatories to such documents have been duly
authorized; and
(iii) all of the parties to such documents are duly organized
and validly existing and have the power and authority (corporate
or other) to execute, deliver and perform such documents.
Based upon and subject to the foregoing and subject also to the
comments and qualifications set forth below, and having
considered such questions of law as we have deemed necessary as a
basis for the opinions expressed below, we are of the opinion
that:
1. Each of the Credit Documents constitutes the legal, valid and
binding obligation of each Credit Party thereto, in each case
enforceable against such Credit Party in accordance with its
terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or
affecting the rights of creditors generally and except as the
enforceability thereof is subject to the application of general
principles of equity (regardless of whether considered in a
proceeding in equity or at law), including, without limitation,
(a) the possible unavailability of specific performance,
injunctive relief or any other equitable remedy and (b) concepts
of materiality, reasonableness, good faith and fair dealing.
2. The Pledge Agreement is effective to create, in favor of the
Administrative Agent for the benefit of the Administrative Agent
and the Banks, a valid security interest under the Uniform
Commercial Code as in effect in the State of New York (the
"Uniform Commercial Code") in all of the right, title and
interest of the Company in, to and under the Collateral (as
defined in the Pledge Agreement) as collateral security for the
payment of the Secured Obligations (as defined in the Pledge
Agreement), except that (a) such security interest will continue
in Collateral after its sale, exchange or other disposition only
to the extent provided in Section 9-306 of the Uniform Commercial
Code and (b) the creation of a security interest in the Pledged
Stock requires the transfer thereof to the Administrative Agent
pursuant to Section 8-313(1) of the Uniform Commercial Code,
which transfer in the case of a "certificated security" (as
defined in said Section 8-102) may be effected in the manner
contemplated by paragraph 3 below.
3. The security interest referred to in paragraph 2 above in
that portion of the Collateral consisting of Pledged Stock (as
defined in the Pledge Agreement) and the Intercompany Note will,
upon the creation of such security interest, be perfected by the
Administrative Agent taking possession thereof (or any
certificates representing or instruments evidencing the same) in
the State of New York and thereafter retaining possession.
4. Assuming that the Administrative Agent (or any custodian
acting on its behalf) obtains, and thereafter maintains,
possession of the portion of the Collateral consisting of the
certificates representing any Pledged Stock in good faith without
notice of any adverse claim (as defined in Section 8-302(2) of
the Uniform Commercial Code) and in bearer form or in registered
form issued to the Administrative Agent or endorsed to the
Administrative Agent or in blank, any perfected security interest
therein will have priority over all other security interests
theretofore or thereafter created under the Uniform Commercial
Code.
The foregoing opinions are subject to the following comments and
qualifications:
(A) The enforceability of Section 11.03 of the Credit Agreement
(and any similar provisions in any of the other Credit Documents)
may be limited by laws rendering unenforceable (i)
indemnification contrary to Federal or state securities laws and
the public policy underlying such laws and (ii) the release of a
party from, or the indemnification of a party against, liability
for its own wrongful or negligent acts under certain
circumstances.
(B) The enforceability of provisions in the Credit Documents to
the effect that terms may not be waived or modified except in
writing may be limited under certain circumstances.
(C) We express no opinion as to (i) the effect of the laws of
any jurisdiction in which any Bank is located (other than the
State of New York) that limit the interest, fees or other charges
such Bank may impose, (ii) the fourth sentence of Section 4.05 of
the Credit Agreement, (iii) the second sentence of Section 11.10
of the Credit Agreement (and any similar provisions in any of the
other Credit Documents), insofar as such sentence relates to the
subject matter jurisdiction of the United States District Court
for the Southern District of New York to adjudicate any
controversy related to the Credit Documents, and (iv) the waiver
of inconvenient forum set forth in the third sentence of Section
11.10 of the Credit Agreement (and any similar provisions in any
of the other Credit Documents) with respect to proceedings in the
United States District Court for the Southern District of New
York.
(D) We wish to point out that the obligations of the Company,
and the rights and remedies of the Administrative Agent and the
Banks, under the Pledge Agreement may be subject to possible
limitations upon the exercise of remedial or procedural
provisions contained in the Pledge Agreement, provided that such
limitations do not, in our opinion, make the remedies and
procedures that will be afforded to the Administrative Agent and
the Banks inadequate for the practical realization of the
substantive benefits purported to be provided to the
Administrative Agent and the Banks by the Pledge Agreement.
(E) We express no opinion as to the existence of, or the right,
title or interest of the Company in, to or under, any of the
Collateral (as defined in the Pledge Agreement).
(F) Except as expressly provided in paragraphs 2,3 and 4 above,
we express no opinion as to the creation, perfection or priority
of any security interest in, or other Lien on, the Collateral (as
defined in the Pledge Agreement).
(G) We express no opinion as to the applicability to the
obligations of the Subsidiary Guarantor under the Subsidiary
Guaranty or the Intercompany Note (or the enforceability of such
obligations) of Section 548 of the Bankruptcy Code, Article 10 of
the New York Debtor and Creditor Law or any other provision of
law relating to fraudulent conveyances, transfers or obligations.
The foregoing opinions are limited to matters involving the
Federal laws of the United States of America and the laws of the
State New York, and we do not express any opinion as to the laws
of any other jurisdiction.
This opinion letter is provided to you by us in our capacity as
your special New York counsel and may not be relied upon by any
Person for any purpose other than in connection with the
transactions contemplated by the Credit Agreement without, in
each instance, our prior written consent.
Very truly yours,
CDP/RMG
EXHIBIT D
[Form of Confidentiality Agreement]
CONFIDENTIALITY AGREEMENT
[Insert Date]
[Insert Name and
Address of Prospective
Participant or Assignee]
Ladies and Gentlemen:
Reference is made to the Credit Agreement, dated as of April 15,
1994, as amended and restated as of April 18, 1994 (the "Credit
Agreement") among Northrop Corporation (the "Company"), the Banks
named therein and The Chase Manhattan Bank (National
Association), as Administrative Agent, providing for loans in the
aggregate principal amount of $2,800,000,000 at any one time
outstanding. Terms defined in the Credit Agreement are used
herein as defined therein.
As a Bank party to the Credit Agreement, we have agreed with the
Company in Section 11.11 of the Credit Agreement to keep
confidential, except as otherwise provided therein, all
non-public information identified by the Company as being
proprietary, private and/or confidential at the time the same is
delivered to us pursuant to the Credit Agreement.
As provided in said Section 11.11, we are permitted to provide
you, as a prospective [holder of a participation in the Loans]
[assignee Bank], with certain of such non-public information
subject to the execution and delivery by you, prior to receiving
such non-public information, of a Confidentiality Agreement in
this form. Such information will not be made available to you
until your execution and return to us of this Confidentiality
Agreement.
Accordingly, in consideration of the foregoing, you hereby agree
(on behalf of yourself and each of your affiliates, directors,
officers, employees and representatives) that (A) such
information will not be used by you except in connection with the
proposed [participation] [assignment] mentioned above and (B) you
shall use reasonable precautions, in accordance with your
customary procedures for handling confidential information and in
accordance with safe and sound banking practices, to keep such
information confidential, provided that nothing herein shall
limit the disclosure of any such information (i) to the extent
required by statute, rule, regulation or judicial process,
(ii) to your counsel or to counsel for any of the Banks or the
Administrative Agent, (iii) to bank examiners, auditors or
accountants, (iv) to the Administrative Agent or any other Bank,
(v) in connection with any litigation to which you or any one or
more of the Banks is a party; provided, further, that, unless
specifically prohibited by applicable law or court order, you
agree, prior to disclosure thereof, to notify the Company of any
request for disclosure of any such non-public information (x) by
any governmental agency or representative thereof (other than any
such request in connection with an examination of your financial
condition by such governmental agency) or (y) pursuant to legal
process; and provided finally that in no event shall you be
obligated to return any materials furnished to you pursuant to
this Confidentiality Agreement. In addition, you hereby agree
that money damages would not be a sufficient remedy for any
breach of your obligations under this Confidentiality Agreement
and that, in addition to all other remedies available to the
Company at law or in equity, the Company shall be entitled to
injunctive relief against you as a remedy for such breach and
that the Company is an express beneficiary hereof entitled to
enforce your obligations hereunder as if the Company were a party
hereto.
Please indicate your agreement to the foregoing by signing at the
place provided below the enclosed copy of this Confidentiality
Agreement.
Very truly yours,
[INSERT NAME OF BANK]
By____________________________
Title:
AGREED AS AFORESAID:
[INSERT NAME OF PROSPECTIVE
PARTICIPANT OR ASSIGNEE]
By____________________________
Title:EXHIBIT E
[Form of Pledge Agreement]
PLEDGE AND SECURITY AGREEMENT dated as of April 18, 1994 between
NORTHROP CORPORATION, a corporation duly organized and validly
existing under the laws of the State of Delaware (the "Company");
and THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION), as
administrative agent for the banks party to the Credit Agreement
referred to below (in such capacity, together with its successors
in such capacity, the "Administrative Agent").
The Company, certain banks and the Administrative Agent are
parties to a Credit Agreement, dated as of April 15, 1994, as
amended and restated as of April 18, 1994 (as modified and
supplemented and in effect from time to time, the "Credit
Agreement"), providing, subject to the terms and conditions
thereof, for extensions of credit to be made by said banks to the
Company in an aggregate principal amount not exceeding
$2,800,000,000 (the "Loans"). In addition, the Company may from
time to time be obligated to various of said banks and other
financial institutions in respect of Other Indebtedness (as
defined below).
To induce said banks to enter into the Credit Agreement and to
extend credit thereunder in the form of Loans and to extend
credit to the Company that would constitute Other Indebtedness,
and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company has
agreed to pledge and grant a security interest in the Collateral
(as hereinafter defined) as security for the Secured Obligations
(as so defined). Accordingly, the parties hereto agree as
follows:
Section 1. Definitions. Terms defined in the Credit Agreement
are used herein as defined therein. In addition, as used herein:
"Collateral" shall have the meaning ascribed thereto in Section 3
hereof.
"Collateral Account" shall have the meaning ascribed thereto in
Section 4 hereof.
"Other Indebtedness" shall mean, collectively, all obligations of
the Company in respect of each Interest Rate Protection Agreement
owing to any Person that was, on the date on which the Company
entered into such Interest Rate Protection Agreement, a Bank.
"Permitted Investments" shall mean: (a) direct obligations of
the United States of America, or of any agency thereof, or
obligations guaranteed as to principal and interest by the United
States of America, or of any agency thereof, in either case
maturing not more than 90 days from the date of acquisition
thereof; (b) certificates of deposit issued by any bank or trust
company organized under the laws of the United States of America
or any state thereof and having capital, surplus and undivided
profits of at least $500,000,000, maturing not more than 90 days
from the date of acquisition thereof; and (c) commercial paper
rated A-1 or better or P-1 by Standard & Poor's Corporation or
Moody's Investors Services, Inc., respectively, maturing not more
than 90 days from the date of acquisition thereof.
"Pledged Note" shall mean the Intercompany Note.
"Pledged Stock" shall have the meaning ascribed thereto in
Section 3(a) hereof.
"Secured Obligations" shall mean, collectively, (a) the
obligations of the Company in respect of the principal of and
interest on the Loans made by the Banks to, and the Note(s) held
by each Bank of, the Company and all other amounts from time to
time owing to the Banks or the Administrative Agent by the
Company under the Credit Documents, (b) all Other Indebtedness
and interest thereon and (c) all obligations of the Company to
the Banks and the Administrative Agent hereunder.
"Stock Collateral" shall mean, collectively, the Collateral
described in clauses (a) through (c) of Section 3 hereof and the
proceeds of and to any such property and, to the extent related
to any such property or such proceeds, all books, correspondence,
credit files, records, invoices and other papers.
"Uniform Commercial Code" shall mean the Uniform Commercial Code
as in effect from time to time in the State of New York.
Section 2. Representations and Warranties. The Company
represents and warrants to the Banks and the Administrative Agent
that:
(a) At the time that any Collateral becomes subject to the Lien
of this Agreement, the Company will be the sole beneficial owner
of such Collateral and no Lien exists or will exist upon such
Collateral at any time (and no right or option to acquire the
same exists in favor of any other Person), except for the pledge
and security interest in favor of the Administrative Agent for
the benefit of the Banks created or provided for herein, which
pledge and security interest constitute a first priority
perfected pledge and security interest in and to such Collateral.
(b) The Pledged Stock represented by the certificates identified
in Annex 1 hereto is, and all other Pledged Stock in which the
Company shall hereafter grant a security interest pursuant to
Section 3 hereof will be, duly authorized, validly existing,
fully paid and non-assessable and none of such Pledged Stock is
or will be subject to any contractual restriction, or any
restriction under the charter or by-laws of the Purchaser, upon
the transfer of such Pledged Stock (except for any such
restriction contained herein or in the Credit Agreement).
(c) The Pledged Stock represented by the certificates identified
in Annex 1 hereto constitutes all of the issued and outstanding
shares of capital stock of any class of the Subsidiary Guarantor
beneficially owned by the Company on the date hereof (whether or
not registered in the name of the Company) and said Annex 1
correctly identifies, as at the date hereof, the respective class
and par value of the shares comprising such Pledged Stock and the
respective number of shares (and registered owners thereof)
represented by each such certificate.
Section 3. Collateral. As collateral security for the prompt
payment in full when due (whether at stated maturity, by
acceleration or otherwise) of the Secured Obligations, the
Company hereby pledges and grants to the Administrative Agent,
for the benefit of the Banks as hereinafter provided, a security
interest in all of the Company's right, title and interest in the
following Property, whether now owned by the Company or hereafter
acquired and whether now existing or hereafter coming into
existence (all being collectively referred to herein as
"Collateral"):
(a) the shares of common stock of the Subsidiary Guarantor
represented by the certificates identified in Annex 1 hereto and
all other shares of capital stock of whatever class of the
Subsidiary Guarantor, now or hereafter owned by the Company
(including, without limitation, from and after the Merger
Effective Date, the shares of common stock of Grumman), in each
case together with the certificates representing the same
(collectively, the "Pledged Stock");
(b) all shares, securities, moneys or other Property
representing a dividend on any of the Pledged Stock, or
representing a distribution or return of capital upon or in
respect of the Pledged Stock, or resulting from a split-up,
revision, reclassification or other like change of the Pledged
Stock or otherwise received in exchange therefor, and any
subscription warrants, rights or options issued to the holders
of, or otherwise in respect of, the Pledged Stock;
(c) without affecting the obligations of the Company under any
provision prohibiting such action hereunder or under the Credit
Agreement, in the event of any consolidation or merger in which
the Subsidiary Guarantor is not the surviving corporation, all
shares of each class of the capital stock of the successor
corporation (including, without limitation, from and after the
Merger Effective Date, Grumman) formed by or resulting from such
consolidation or merger (the Pledged Stock, together with all
other certificates, shares, securities, moneys and other Property
as may from time to time be pledged hereunder pursuant to
clause (a) or (b) above and this clause (c) being herein
collectively called the "Stock Collateral");
(d) the Pledged Note and the principal of and interest on the
Intercompany Loans evidenced thereby;
(e) the Merger Agreement including, (i) all rights of the
Company to receive moneys due and to become due under or pursuant
to the Merger Agreement, (ii) all rights to receive proceeds of
any insurance, indemnity, warranty or guaranty with respect to
the Merger Agreement, (iii) all claims of the Company for damages
arising out of or for breach of or default under the Merger
Agreement and (iv) all rights of the Company to terminate, amend,
supplement or modify the Merger Agreement, to perform thereunder
and to compel performance and otherwise exercise all remedies
thereunder (provided that nothing contained herein shall limit
the rights of the Company under the Merger Agreement until the
occurrence and continuation of an Event of Default); and
(f) all proceeds, benefits, substitutions and replacements of
and to any of the Property of the Company described in the
preceding clauses of this Section 3;
provided that, if after the Merger Effective Date the Company
receives a rating of the Company's senior unsecured long-term
public debt from Moody's Investors Service, Inc. (or any
successor thereto) of Baa3 or above and also from Standard &
Poor's Corporation (or any successor thereto) of BBB- or above,
then so long as no Default shall have occurred and be continuing
the Administrative Agent shall, at the request of the Company,
release to the Company the certificates representing the Pledge
Stock and the Pledged Note, against receipt but without any
recourse, warranty or representation whatsoever, whereupon this
Agreement shall terminate and the provisions of Section 5.12
hereof shall apply.
Section 4. Cash Proceeds of Collateral.
4.01 Collateral Account. The Administrative Agent may establish
with Chase a cash collateral account (the "Collateral Account")
in the name and under the control of the Administrative Agent
into which there shall be deposited from time to time the cash
proceeds of any of the Collateral required to be delivered to the
Administrative Agent pursuant hereto and into which the Company
may from time to time deposit any additional amounts that the
Company wishes to pledge to the Administrative Agent for the
benefit of the Banks as additional collateral security hereunder.
The balance from time to time standing to the credit of the
Collateral Account shall constitute part of the Collateral
hereunder and shall not constitute payment of the Secured
Obligations until applied as hereinafter provided. Except with
respect to cash deposited in accordance with clause (e)(iii) of
Section 8.07 of the Credit Agreement and as expressly provided in
the next sentence, the Administrative Agent shall remit the
collected balance standing to the credit of the Collateral
Account to or upon the order of the Company as the Company shall
from time to time instruct. However, at any time following the
occurrence and during the continuance of an Event of Default, the
Administrative Agent may (and, if instructed by the Majority
Banks, shall) in its (or their) discretion apply or cause to be
applied (subject to collection) the balance from time to time
standing to the credit of the Collateral Account to the payment
of the Secured Obligations in the manner specified in Section
5.09 hereof. The balance from time to time standing to the
credit of the Collateral Account shall be subject to withdrawal
only as provided herein. In addition to the foregoing, the
Company agrees that if the proceeds of any Collateral hereunder
shall be received by the Company, the Company shall, except as
otherwise expressly provided in Section 5.04(c) hereof, as
promptly as possible deposit such proceeds into the Collateral
Account. Until so deposited, all such proceeds shall be held in
trust by the Company for the Administrative Agent and shall not
be commingled with any other funds or Property of the Company.
4.02 Investment of Balance in Collateral Account. Amounts on
deposit in the Collateral Account shall be invested from time to
time in such Permitted Investments as the Company (or, after the
occurrence and during the continuance of an Event of Default, the
Administrative Agent) shall determine, which Permitted
Investments shall be held in the name and be under the control of
the Administrative Agent, provided that at any time after the
occurrence and during the continuance of an Event of Default, the
Administrative Agent may (and, if instructed by the Majority
Banks, shall) in its (or their) discretion at any time and from
time to time elect to liquidate any such Permitted Investments
and to apply or cause to be applied the proceeds thereof to the
payment of the Secured Obligations in the manner specified in
Section 5.09 hereof.
Section 5. Further Assurances; Remedies. In furtherance of the
grant of the pledge and security interest pursuant to Section 3
hereof, the Company hereby agrees with each Bank and the
Administrative Agent as follows:
5.01 Delivery and Other Perfection. The Company shall:
(a) if any of the shares, securities or other Property required
to be pledged by the Company under clauses (a), (b) and (c) of
Section 3 hereof are received by the Company, forthwith either
(x) transfer and deliver to the Administrative Agent such shares,
securities, moneys or other Property so received by the Company
(together with the certificates for any such shares and
securities duly endorsed in blank or accompanied by undated stock
powers duly executed in blank), all of which thereafter shall be
held by the Administrative Agent, pursuant to the terms of this
Agreement, as part of the Collateral or (y) take such other
action as the Administrative Agent shall deem necessary or
appropriate to duly record the Lien created hereunder in such
shares, securities or other Property in said clauses (a), (b)
and (c);
(b) give, execute, deliver, file and/or record any financing
statement, notice, instrument, document, agreement or other
papers that may be necessary or desirable (in the judgment of the
Administrative Agent) to create, preserve, perfect or validate
the security interest granted pursuant hereto or to enable the
Administrative Agent to exercise and enforce its rights hereunder
with respect to such pledge and security interest;
(c) keep full and accurate books and records relating to the
Collateral, and stamp or otherwise mark such books and records in
such manner as the Administrative Agent may reasonably require in
order to reflect the security interests granted by this
Agreement; and
(d) permit representatives of the Administrative Agent, upon
reasonable notice, at any time during normal business hours to
inspect and make abstracts from its books and records pertaining
to the Collateral, and permit representatives of the
Administrative Agent to be present at the Company's place of
business to receive copies of all communications and remittances
relating to the Collateral, and forward copies of any notices or
communications received by the Company with respect to the
Collateral, all in such manner as the Administrative Agent may
require.
5.02 Other Financing Statements and Liens. Without the prior
written consent of the Administrative Agent (granted with the
authorization of the Banks as specified in Section 10.09 of the
Credit Agreement), the Company shall not file or suffer to be on
file, or authorize or permit to be filed or to be on file, in any
jurisdiction, any financing statement or like instrument with
respect to the Collateral in which the Administrative Agent is
not named as the sole secured party for the benefit of the Banks.
5.03 Preservation of Rights. The Administrative Agent shall not
be required to take steps necessary to preserve any rights
against prior parties to any of the Collateral.
5.04 Stock Collateral and the Pledged Note.
(a) The Company will cause the Stock Collateral to constitute at
all times 100% of the total number of shares of each class of
capital stock of the Subsidiary Guarantor then outstanding.
(b) So long as no Event of Default shall have occurred and be
continuing, the Company shall have the right to exercise all
voting, consensual and other powers of ownership pertaining to
the Stock Collateral for all purposes not inconsistent with the
terms of this Agreement, the Credit Agreement, the Notes or any
other instrument or agreement referred to herein or therein,
provided that the Company agrees that (1) it will not vote the
Stock Collateral in any manner that is inconsistent with the
terms of this Agreement, the Credit Agreement, the Notes or any
such other instrument or agreement and (2) it will not agree to
any amendment, supplement or other modification to the Pledged
Note; and the Administrative Agent shall execute and deliver to
the Company or cause to be executed and delivered to the Company
all such proxies, powers of attorney, dividend and other orders,
and all such instruments, without recourse, as the Company may
reasonably request for the purpose of enabling the Company to
exercise the rights and powers that it is entitled to exercise
pursuant to this Section 5.04(b).
(c) Unless and until an Event of Default has occurred and is
continuing, the Company shall be entitled to receive and retain
any dividends on the Stock Collateral paid in cash out of earned
surplus and, subject to the last sentence of Section 2.01.B(c) of
the Credit Agreement, all payments of principal of and interest
on the Pledged Note.
(d) If an Event of Default shall have occurred, then so long as
such Event of Default shall continue the Administrative Agent
shall, upon the giving of notice to the Company of its intention
to do so, have the right to exercise all voting and consensual
rights pertaining to the Stock Collateral for all purposes and
the Company shall execute and deliver to the Administrative Agent
or cause to be executed and delivered to the Administrative Agent
all such proxies, powers of attorney and all such other
instruments, without recourse, as the Administrative Agent may
reasonably request for the purpose of enabling the Administrative
Agent to exercise the rights that it is entitled to exercise
pursuant to this Section 5.04(d).
(e) If any Event of Default shall have occurred, then so long as
such Event of Default shall continue, and whether or not the
Administrative Agent or any Bank exercises any available right to
declare any Secured Obligation due and payable or seeks or
pursues any other relief or remedy available to it under
applicable law or under this Agreement, the Credit Agreement, the
Notes or any other agreement relating to such Secured Obligation,
all dividends and other distributions on the Stock Collateral and
all principal of and interest on the Intercompany Loans
(including, without limitation, all principal of and interest on
the Pledged Note) shall be paid directly to the Administrative
Agent and retained by it in the Collateral Account as part of the
Stock Collateral, subject to the terms of this Agreement, and, if
the Administrative Agent shall so request in writing, the Company
agrees to execute and deliver to the Administrative Agent
appropriate additional dividend, distribution and other orders
and documents to that end, provided that if such Event of Default
is cured, any such dividend or distribution theretofore paid to
the Administrative Agent shall, upon request of the Company
(except to the extent theretofore applied to the Secured
Obligations), be returned by the Administrative Agent to the
Company.
5.05 Events of Default, Etc. During the period during which an
Event of Default shall have occurred and be continuing:
(a) the Administrative Agent shall have all of the rights and
remedies with respect to the Collateral of a secured party under
the Uniform Commercial Code (whether or not said Code is in
effect in the jurisdiction where the rights and remedies are
asserted) and such additional rights and remedies to which a
secured party is entitled under the laws in effect in any
jurisdiction where any rights and remedies hereunder may be
asserted, including, without limitation, the right, to the
maximum extent permitted by law, to exercise all voting,
consensual and other powers of ownership pertaining to the
Collateral as if the Administrative Agent were the sole and
absolute owner thereof (and the Company agrees to take all such
action as may be appropriate to give effect to such right);
(b) the Administrative Agent in its discretion may, in its name
or in the name of the Company or otherwise, demand, sue for,
collect or receive any money or property at any time payable or
receivable on account of or in exchange for any of the
Collateral, but shall be under no obligation to do so; and
(c) the Administrative Agent may, upon ten business days' prior
written notice to the Company of the time and place, with respect
to the Collateral or any part thereof that shall then be or shall
thereafter come into the possession, custody or control of the
Administrative Agent, the Banks or any of their respective
agents, sell, assign or otherwise dispose of all or any part of
such Collateral, at such place or places as the Administrative
Agent deems best, and for cash or for credit or for future
delivery (without thereby assuming any credit risk), at public or
private sale, without demand of performance or notice of
intention to effect any such disposition or of the time or place
thereof (except such notice as is required above or by applicable
statute and cannot be waived), and the Administrative Agent or
any Bank or anyone else may be the purchaser, assignee or
recipient of any or all of the Collateral so disposed of at any
public sale (or, to the extent permitted by law, at any private
sale) and thereafter hold the same absolutely, free from any
claim or right of whatsoever kind, including any right or equity
of redemption (statutory or otherwise), of the Company, any such
demand, notice and right or equity being hereby expressly waived
and released. The proceeds of each collection, sale or other
disposition under this Section 5.05 shall be applied in
accordance with Section 5.09 hereof.
The Company recognizes that, by reason of certain prohibitions
contained in the Securities Act and applicable state securities
laws, the Administrative Agent may be compelled, with respect to
any sale of all or any part of the Stock Collateral, to limit
purchasers to those who will agree, among other things, to
acquire the Stock Collateral for their own account, for
investment and not with a view to the distribution or resale
thereof. The Company acknowledges that any such private sales
may be at prices and on terms less favorable to the
Administrative Agent than those obtainable through a public sale
without such restrictions, and, notwithstanding such
circumstances, agrees that any such private sale shall be deemed
to have been made in a commercially reasonable manner and that
the Administrative Agent shall have no obligation to engage in
public sales and no obligation to delay the sale of any Stock
Collateral for the period of time necessary to permit the
Purchaser or issuer thereof to register it for public sale.
5.06 Private Sale. The Administrative Agent and the Banks shall
incur no liability as a result of the sale of the Collateral, or
any part thereof, at any private sale pursuant to Section 5.05
hereof conducted in a commercially reasonable manner. The
Company hereby waives any claims against the Administrative Agent
or any Bank arising by reason of the fact that the price at which
the Collateral may have been sold at such a private sale was less
than the price that might have been obtained at a public sale or
was less than the aggregate amount of the Secured Obligations,
even if the Administrative Agent accepts the first offer received
and does not offer the Collateral to more than one offeree.
5.07 Deficiency. If the proceeds of sale, collection or other
realization of or upon the Collateral pursuant to Section 5.05
hereof are insufficient to cover the costs and expenses of such
realization and the payment in full of the Secured Obligations,
the Company shall remain liable for any deficiency.
5.08 Removals, Etc. Without at least 30 days' prior written
notice to the Administrative Agent, the Company shall not
(i) maintain its chief executive office at any place other than
at the address indicated beneath the signature of the Company to
the Credit Agreement or (ii) change its name, or the name under
which it does business, from the name shown on the signature
pages hereto (except that the Company may change its name to
Northrop Grumman Corporation if it promptly notifies the
Administrative Agent thereof and files financing statements
identical to those filed pursuant to Section 6.01(i) of the
Credit Agreement and Section 5.11 hereof except naming Northrop
Grumman Corporation as debtor).
5.09 Application of Proceeds. Except as otherwise herein
expressly provided, the proceeds of any collection, sale or other
realization of all or any part of the Collateral pursuant to
Section 5.05 hereof, and any other cash at the time held by the
Administrative Agent under Section 5 hereof shall be applied by
the Administrative Agent:
First, to the payment of the costs and expenses of such
collection, sale or other realization, including reasonable
out-of-pocket costs and expenses of the Administrative Agent and
the fees and expenses of its agents and counsel, and all expenses
incurred and advances made by the Administrative Agent in
connection therewith;
Next, to the payment in full of the Secured Obligations, in each
case equally and ratably in accordance with the respective
amounts thereof then due and owing or as the Banks holding the
same may otherwise agree; and
Finally, to the payment to the Company, or its successors or
assigns, or as a court of competent jurisdiction may direct, of
any surplus then remaining.
As used in this Section 5, "proceeds" of Collateral shall mean
cash, securities and other property realized in respect of, and
distributions in kind of, Collateral, including any thereof
received under any reorganization, liquidation or adjustment of
debt of the Company or any issuer of or obligor on any of the
Collateral.
5.10 Attorney-in-Fact. Without limiting any rights or powers
granted by this Agreement to the Administrative Agent while no
Event of Default has occurred and is continuing, upon the
occurrence and during the continuance of any Event of Default the
Administrative Agent is hereby appointed the attorney-in-fact of
the Company for the purpose of carrying out the provisions of
this Section 5 and taking any action and executing any
instruments that the Administrative Agent may deem necessary or
advisable to accomplish the purposes hereof, which appointment as
attorney-in-fact is irrevocable and coupled with an interest.
Without limiting the generality of the foregoing, so long as the
Administrative Agent shall be entitled under this Section 5 to
make collections in respect of the Collateral, the Administrative
Agent shall have the right and power to receive, endorse and
collect all checks made payable to the order of the Company
representing any dividend, payment or other distribution in
respect of the Collateral or any part thereof and to give full
discharge for the same.
5.11 Perfection. Prior to or concurrently with the execution
and delivery of this Agreement, the Company shall (i) file such
financing statements and other documents in such filing or
recording offices as the Administrative Agent may reasonably
request to perfect the security interests granted by Section 3 of
this Agreement and (ii) deliver to the Administrative Agent all
certificates identified in Annex I hereto, accompanied by undated
stock powers duly executed in blank, and the Pledged Note
endorsed to the order of the Administrative Agent.
5.12 Termination. When all Secured Obligations shall have been
paid in full, the Commitments of the Banks under the Credit
Agreement shall have expired or been terminated and the Interest
Rate Protection Agreements constituting Other Indebtedness shall
have been terminated, this Agreement shall terminate, and the
Administrative Agent shall forthwith cause to be assigned,
transferred and delivered, against receipt but without any
recourse, warranty or representation whatsoever, any remaining
Collateral and money received in respect thereof, to or on the
order of the Company. The Administrative Agent shall also
execute and deliver to the Company upon such termination such
Uniform Commercial Code termination statements and such other
documentation as shall be reasonably requested by the Company to
effect the termination and release of the Liens on the
Collateral.
5.13 Further Assurances. The Company agrees that, from time to
time upon the written request of the Administrative Agent, the
Company will execute and deliver such further documents and do
such other acts and things as the Administrative Agent may
reasonably request in order fully to effect the purposes of this
Agreement.
Section 6. Miscellaneous.
6.01 No Waiver. No failure on the part of the Administrative
Agent or any Bank to exercise, and no course of dealing with
respect to, and no delay in exercising, any right, power or
remedy hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise by the Administrative Agent or any
Bank of any right, power or remedy hereunder preclude any other
or further exercise thereof or the exercise of any other right,
power or remedy. The remedies herein are cumulative and are not
exclusive of any remedies provided by law.
6.02 Notices. All notices, requests, consents and demands
hereunder shall be in writing and telecopied or delivered to the
intended recipient at its "Address for Notices" specified
pursuant to Section 11.02 of the Credit Agreement and shall be
deemed to have been given at the times specified in said Section
11.02.
6.03 Expenses. The Company agrees to reimburse each of the
Banks and the Administrative Agent for all reasonable costs and
expenses of the Banks and the Administrative Agent (including,
without limitation, the reasonable fees and expenses of legal
counsel) in connection with (i) any Default and any enforcement
or collection proceeding resulting therefrom, including, without
limitation, all manner of participation in or other involvement
with (w) performance by the Administrative Agent of any
obligations of the Company in respect of the Collateral that the
Company has failed or refused to perform, (x) bankruptcy,
insolvency, receivership, foreclosure, winding up or liquidation
proceedings, or any actual or attempted sale, or any exchange,
enforcement, collection, compromise or settlement in respect of
any of the Collateral, and for the care of the Collateral and
defending or asserting rights and claims of the Administrative
Agent in respect thereof, by litigation or otherwise, including
expenses of insurance, (y) judicial or regulatory proceedings and
(z) workout, restructuring or other negotiations or proceedings
(whether or not the workout, restructuring or transaction
contemplated thereby is consummated) and (ii) the enforcement of
this Section 6.03, and all such costs and expenses shall be
Secured Obligations entitled to the benefits of the collateral
security provided pursuant to Section 3 hereof.
6.04 Amendments, Etc. The terms of this Agreement may be
waived, altered or amended only by an instrument in writing duly
executed by the Company and the Administrative Agent (with the
consent of the Banks as specified in Section 10.09 of the Credit
Agreement). Any such amendment or waiver shall be binding upon
the Administrative Agent and each Bank, each holder of any of the
Secured Obligations and the Company.
6.05 Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the respective successors and
assigns of the Company, the Administrative Agent, the Banks and
each holder of any of the Secured Obligations (provided, however,
that the Company shall not assign or transfer its rights
hereunder without the prior written consent of the Administrative
Agent).
6.06 Captions. The captions and section headings appearing
herein are included solely for convenience of reference and are
not intended to affect the interpretation of any provision of
this Agreement.
6.07 Counterparts. This Agreement may be executed in any number
of counterparts, all of which taken together shall constitute one
and the same instrument and either of the parties hereto may
execute this Agreement by signing any such counterpart.
6.08 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the law of the State of New York.
6.09 Agents and Attorneys-in-Fact. The Administrative Agent may
employ agents and attorneys-in-fact in connection herewith and
shall not be responsible for the negligence or misconduct of any
such agents or attorneys-in-fact selected by it in good faith.
6.10 Severability. If any provision hereof is invalid and
unenforceable in any jurisdiction, then, to the fullest extent
permitted by law, (i) the other provisions hereof shall remain in
full force and effect in such jurisdiction and shall be liberally
construed in favor of the Administrative Agent and the Banks in
order to carry out the intentions of the parties hereto as nearly
as may be possible and (ii) the invalidity or unenforceability of
any provision hereof in any jurisdiction shall not affect the
validity or enforceability of such provision in any other
jurisdiction.
6.11 The Administrative Agent. As provided in Section 10.01 of
the Credit Agreement, each Bank has appointed The Chase Manhattan
Bank (National Association) as its agent for purposes of this
Agreement. Following the payment in full of all Secured
Obligations outstanding under the Credit Agreement and the
termination or expiration of the Commitments thereunder, the
provisions of said Section 10.01 shall be deemed to continue in
full force and effect for the benefit of the Administrative Agent
under this Agreement. In that connection, following such payment
in full and expiration and termination of the Commitments, the
term "Majority Banks" (as used in said Section 10.01) shall be
deemed to refer to Persons holding Secured Obligations
representing more than 50% of the aggregate Secured Obligations.
IN WITNESS WHEREOF, the parties hereto have caused this Pledge
and Security Agreement to be duly executed and delivered as of
the day and year first above written.
NORTHROP CORPORATION
By /s/ John R. Rettberg
Title: Vice President
and Treasurer
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION),
as Administrative Agent
By /s/ Patricia B. Bril
Title: Managing Director
ANNEX 1
PLEDGED STOCK
[See Section 2(b) and (c)]
Certificate Registered
Issuer Nos. Owner Number of Shares
Northrop 1 Northrop 100 shares of
Acquisition, Inc. Corporation capital stock,
(common stock,
$.01 par value)
[Form of Subsidiary Guaranty]
SUBSIDIARY GUARANTEE AGREEMENT dated as of April 18, 1994 between
NORTHROP ACQUISITION, INC., a wholly-owned Subsidiary of the
Company referred to below, duly organized and validly existing
xisting
under the laws of Delaware (together with its successors and
assigns, including Grumman Corporation after the Merger Effective
Date, the "Subsidiary Guarantor"); and THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION), as administrative agent for the banks
party to the Credit Agreement referred to below (in such
capacity, together with its successors in such capacity, the
"Administrative Agent").
Northrop Corporation, a Delaware corporation (the "Company"),
certain banks and the Administrative Agent are parties to a
Credit Agreement, dated as of April 15, 1994, as amended and
restated as of April 18, 1994 (as modified and supplemented and
in effect from time to time, the "Credit Agreement"), providing,
subject to the terms and conditions thereof, for loans to be made
by said banks to the Company in an aggregate principal amount not
exceeding $2,800,000,000.
To induce said banks to enter into the Credit Agreement and to
extend credit thereunder, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the Subsidiary Guarantor has agreed to guarantee
the Guaranteed Obligations (as hereinafter defined).
Accordingly, the parties hereto agree as follows:
Section 1. Definitions. Terms defined in the Credit Agreement
are used herein as defined therein.
Section 2. The Guarantee.
2.01 The Guarantee. The Subsidiary Guarantor hereby guarantees
to each Bank and the Administrative Agent and their respective
successors and assigns the prompt payment in full when due
(whether at stated maturity, by acceleration or otherwise) of the
principal of and interest on the Loans made by the Banks to, and
the Note(s) held by each Bank of, the Company and all other
amounts from time to time owing to the Banks or the
Administrative Agent by the Company under the Credit Agreement
and under the Notes, in each case strictly in accordance with the
terms thereof (such obligations being herein collectively called
the "Guaranteed Obligations"). In addition, the Subsidiary
Guarantor hereby further agrees that if the Company shall fail to
pay in full when due (whether at stated maturity, by acceleration
or otherwise) any of the Guaranteed Obligations, the Subsidiary
Guarantor will promptly pay the same, without any demand or
notice whatsoever, and that in the case of any extension of time
of payment or renewal of any of the Guaranteed Obligations, the
same will be promptly paid in full when due (whether at extended
maturity, by acceleration or otherwise) in accordance with the
terms of such extension or renewal.
2.02 Obligations Unconditional. The obligations of the
Subsidiary Guarantor under Section 2.01 hereof are absolute and
unconditional irrespective of the value, genuineness, validity,
regularity or enforceability of the Credit Agreement, the Notes
or any other agreement or instrument referred to herein or
therein, or any substitution, release or exchange of any other
guarantee of or security for any of the Guaranteed Obligations,
and, to the fullest extent permitted by applicable law,
irrespective of any other circumstance whatsoever that might
otherwise constitute a legal or equitable discharge or defense of
a surety or guarantor, it being the intent of this Section 2.02
that the obligations of the Subsidiary Guarantor hereunder shall
be absolute and unconditional under any and all circumstances.
Without limiting the generality of the foregoing, it is agreed
that the occurrence of any one or more of the following shall not
alter or impair the liability of the Subsidiary Guarantor
hereunder which shall remain absolute and unconditional as
described above:
(i) at any time or from time to time, without notice to the
Subsidiary Guarantor, the time for any performance of or
compliance with any of the Guaranteed Obligations shall be
extended, or such performance or compliance shall be waived;
(ii) any of the acts mentioned in any of the provisions of the
Credit Agreement or the Notes or any other agreement or
instrument referred to herein or therein shall be done or
omitted;
(iii) the maturity of any of the Guaranteed Obligations shall be
accelerated, or any of the Guaranteed Obligations shall be
modified, supplemented or amended in any respect, or any right
under the Credit Agreement or the Notes or any other agreement or
instrument referred to herein or therein shall be waived or any
other guarantee of any of the Guaranteed Obligations or any
security therefor shall be released or exchanged in whole or in
part or otherwise dealt with; or
(iv) any lien or security interest granted to, or in favor of,
the Administrative Agent or any Bank or Banks as security for any
of the Guaranteed Obligations shall fail to be perfected.
The Subsidiary Guarantor hereby expressly waives diligence,
presentment, demand of payment, protest and all notices
whatsoever, and any requirement that the Administrative Agent or
any Bank exhaust any right, power or remedy or proceed against
the Company under the Credit Agreement or the Notes or any other
agreement or instrument referred to herein or therein, or against
any other Person under any other guarantee of, or security for,
any of the Guaranteed Obligations.
2.03 Reinstatement. The obligations of the Subsidiary Guarantor
under this Section 2 shall be automatically reinstated if and to
the extent that for any reason any payment by or on behalf of the
Company in respect of the Guaranteed Obligations is rescinded or
must be otherwise restored by any holder of any of the Guaranteed
Obligations, whether as a result of any proceedings in bankruptcy
or reorganization or otherwise, and the Subsidiary Guarantor
agrees that it will indemnify the Administrative Agent and each
Bank on demand for all reasonable costs and expenses (including,
without limitation, fees of counsel) incurred by the
Administrative Agent or such Bank in connection with such
rescission or restoration, including any such costs and expenses
incurred in defending against any claim alleging that such
payment constituted a preference, fraudulent transfer or similar
payment under any bankruptcy, insolvency or similar law.
2.04 Remedies. The Subsidiary Guarantor agrees that, as between
the Subsidiary Guarantor and the Banks, the obligations of the
Company under the Credit Agreement and the Notes may be declared
to be forthwith due and payable as provided in Section 9 of the
Credit Agreement (and shall be deemed to have become
automatically due and payable in the circumstances provided in
said Section 9) for purposes of Section 2.01 hereof
notwithstanding any stay, injunction or other prohibition
preventing such declaration (or such obligations from becoming
automatically due and payable) as against the Company and that,
in the event of such declaration (or such obligations being
deemed to have become automatically due and payable), such
obligations (whether or not due and payable by the Company) shall
forthwith become due and payable by the Subsidiary Guarantor for
purposes of said Section 2.01.
2.05 Instrument for the Payment of Money. The Subsidiary
Guarantor hereby acknowledges that the guarantee in this
Section 2 constitutes an instrument for the payment of money, and
consents and agrees that any Bank or the Administrative Agent, at
its sole option, in the event of a dispute by the Subsidiary
Guarantor in the payment of any moneys due hereunder, shall have
the right to bring motion-action under New York CPLR
Section 3213.
2.06 Continuing Guarantee. The guarantee in this Section 2 is a
continuing guarantee, and shall apply to all Guaranteed
Obligations whenever arising.
2.07 General Limitation on Guaranteed Obligations. In any
action or proceeding involving any state corporate law, or any
state or Federal bankruptcy, insolvency, reorganization or other
law affecting the rights of creditors generally, if the
obligations of the Subsidiary Guarantor under Section 2.01 hereof
would otherwise be held or determined to be void, invalid or
unenforceable, or subordinated to the claims of any other
creditors, on account of the amount of its liability under said
Section 2.01, then, notwithstanding any other provision hereof to
the contrary, the amount of such liability shall, without any
further action by the Subsidiary Guarantor, the Administrative
Agent, the Banks or any other Person, be automatically limited
and reduced to the highest amount that is valid and enforceable
and not subordinated to the claims of other creditors as
determined in such action or proceeding.
2.08 Subrogation. The Subsidiary Guarantor hereby waives all
rights of subrogation or contribution, whether arising by
contract or operation of law (including, without limitation, any
such right arising under the Federal Bankruptcy Code) or
otherwise by reason of any payment by it pursuant to the
provisions of this Section 2 and further agrees with the Company
for the benefit of each of its creditors (including, without
limitation, each Bank and the Administrative Agent) that any such
payment by it shall, to the extent that it does not result under
the last sentence of Section 2.01.B(c) of the Credit Agreement in
a reduction in the obligations of the Subsidiary Guarantor in
respect of the Intercompany Loans or obligations of the
Subsidiary Guarantor in respect of other indebtedness owing by
the Subsidiary Guarantor to the Company, constitute an investment
in the equity capital of the Company by the Subsidiary Guarantor.
2.09 Specific Limitation on Obligations. Anything herein to the
contrary notwithstanding, from and after the Merger Effective
Date, the maximum liability of the Subsidiary Guarantor hereunder
shall in no event exceed the Maximum Guaranteed Amount. For the
purposes of this Section 2.09, the term "Maximum Guaranteed
Amount" shall mean 95% of the Adjusted Net Worth of the
Subsidiary Guarantor on the Merger Effective Date (after giving
effect to the consummation of the Merger) and the term "Adjusted
Net Worth" shall mean the excess of (a) the lesser of (i) the
amount of the "present fair saleable value of the assets" of the
Subsidiary Guarantor and (ii) the amount of the Subsidiary
Guarantor's "property, at fair valuation" over (b) the greater of
(i) the Subsidiary Guarantor's "debts" and (ii) the amount that
will be required to pay the "probable liability on the existing
debts" of the Subsidiary Guarantor, as such quoted terms are
interpreted under Sect. 548 of the Bankruptcy Code or Article 10 of
the New York Debtor and Creditor Law, as the case may be.
Section 3. Representations and Warranties. The Subsidiary
Guarantor represents and warrants to the Banks and the
Administrative Agent that:
3.01 Corporate Existence. The Subsidiary Guarantor: (a) is a
corporation duly organized and validly existing under the laws of
the jurisdiction of its incorporation; (b) has all requisite
corporate power, and has all material governmental licenses,
authorizations, consents and approvals necessary to own its
assets and carry on its business as now being or as proposed to
be conducted; and (c) is qualified to do business in all
jurisdictions in which the nature of the business conducted by it
makes such qualification necessary and where failure so to
qualify would have a Material Adverse Effect.
3.02 Litigation. There are no legal or arbitral proceedings or
any proceedings by or before any governmental or regulatory
authority or agency, now pending or (to the knowledge of the
Subsidiary Guarantor) threatened against the Subsidiary Guarantor
that, if adversely determined, could have a Material Adverse
Effect.
3.03 No Breach. None of the execution and delivery of this
Agreement, the consummation of the transactions herein
contemplated or compliance with the terms and provisions hereof
will conflict with or result in a breach of, or require any
consent under, the charter or by-laws of the Subsidiary
Guarantor, or any applicable law or regulation, or any order,
writ, injunction or decree of any court or governmental authority
or agency, or any agreement or instrument to which the Subsidiary
Guarantor is a party or by which it is bound or to which it is
subject, or constitute a default under any such agreement or
instrument.
3.04 Corporate Action. The Subsidiary Guarantor has all
necessary corporate power and authority to execute and deliver,
and to incur, assume and perform its obligations under, this
Agreement; the execution and delivery, and the incurrence,
assumption and performance of its obligations under, this
Agreement by the Subsidiary Guarantor have been duly authorized
by all necessary corporate action on its part; and this Agreement
has been duly and validly executed and delivered, and the
obligations hereunder have been duly and validly incurred and
assumed, by the Subsidiary Guarantor; and this Agreement
constitutes the legal, valid and binding obligation of the
Subsidiary Guarantor, enforceable in accordance with its terms,
except as such enforceability may be limited by (a) bankruptcy,
insolvency, reorganization, moratorium or other similar laws of
general applicability affecting the enforcement of creditors'
rights and (b) the application of general principles of equity
(regardless of whether such enforceability is considered in a
proceeding in equity or at law).
3.05 Approvals. No authorizations, approvals or consents of,
and no filings or registrations with, any governmental or
regulatory authority or agency are necessary for the execution,
delivery or performance by the Subsidiary Guarantor of this
Agreement or for the validity or enforceability hereof.
3.06 Investment Company Act. The Subsidiary Guarantor 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.
3.07 Public Utility Holding Company Act. The Subsidiary
Guarantor is not a "holding company", or an "affiliate" of a
"holding company" or a "subsidiary company" of a "holding
company", within the meaning of the Public Utility Holding
Company Act of 1935, as amended.
Section 4. Miscellaneous.
4.01 No Waiver. No failure on the part of the Administrative
Agent or any Bank to exercise, and no course of dealing with
respect to, and no delay in exercising, any right, power or
remedy hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise by the Administrative Agent or any
Bank of any right, power or remedy hereunder preclude any other
or further exercise thereof or the exercise of any other right,
power or remedy. The remedies herein are cumulative and are not
exclusive of any remedies provided by law.
4.02 Notices. All notices, requests, consents and demands
hereunder shall be in writing and telecopied or delivered to the
intended recipient at the "Address for Notices" specified beneath
its name on the signature pages hereof or, as to either party, at
such other address as shall be designated by such party in a
notice to the other party. Except as otherwise provided in this
Agreement, all such communications shall be deemed to have been
duly given when transmitted by telecopier or personally delivered
or, in the case of a mailed notice, upon receipt, in each case
given or addressed as aforesaid.
4.03 Expenses. The Subsidiary Guarantor agrees to reimburse
each of the Banks and the Administrative Agent for all reasonable
costs and expenses of the Banks and the Administrative Agent
(including, without limitation, the reasonable fees and expenses
of legal counsel) in connection with (i) any Default and any
enforcement or collection proceeding resulting therefrom,
including, without limitation, all manner of participation in or
other involvement with (x) bankruptcy, insolvency, receivership,
foreclosure, winding up or liquidation proceedings, (y) judicial
or regulatory proceedings and (z) workout, restructuring or other
negotiations or proceedings (whether or not the workout,
restructuring or transaction contemplated thereby is consummated)
and (ii) the enforcement of this Section 4.03.
4.04 Amendments, Etc. The terms of this Agreement may be
waived, altered or amended only by an instrument in writing duly
executed by the Subsidiary Guarantor and the Administrative Agent
(with the consent of the Banks as specified in Section 10.09 of
the Credit Agreement). Any such amendment or waiver shall be
binding upon the Administrative Agent and each Bank, each holder
of any of the Guaranteed Obligations and the Subsidiary
Guarantor.
4.05 Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the respective successors and
assigns of the Subsidiary Guarantor, the Administrative Agent,
the Banks and each holder of any of the Guaranteed Obligations
(provided, however, that the Subsidiary Guarantor shall not
assign or transfer its rights hereunder without the prior written
consent of the Administrative Agent).
4.06 Captions. The captions and section headings appearing
herein are included solely for convenience of reference and are
not intended to affect the interpretation of any provision of
this Agreement.
4.07 Counterparts. This Agreement may be executed in any number
of counterparts, all of which taken together shall constitute one
and the same instrument and either of the parties hereto may
execute this Agreement by signing any such counterpart.
4.08 Severability. If any provision hereof is invalid and
unenforceable in any jurisdiction, then, to the fullest extent
permitted by law, (i) the other provisions hereof shall remain in
full force and effect in such jurisdiction and shall be liberally
construed in favor of the Administrative Agent and the Banks in
order to carry out the intentions of the parties hereto as nearly
as may be possible and (ii) the invalidity or unenforceability of
any provision hereof in any jurisdiction shall not affect the
validity or enforceability of such provision in any other
jurisdiction.
4.09 Governing Law; Submission to Jurisdiction. This Agreement
shall be governed by, and construed in accordance with, the law
of the State of New York. The Subsidiary Guarantor hereby
submits to the nonexclusive jurisdiction of the United States
District Court for the Southern District of New York and of any
New York State Court sitting in New York County for the purposes
of all legal proceedings arising out of or relating to this
Agreement or the transactions contemplated hereby. The
Subsidiary Guarantor irrevocably waives, to the fullest extent
permitted by applicable law, any objection which it may now or
hereafter have to the laying of the venue of any such proceeding
brought in such a court and any claim that any such proceeding
brought in such a court has been brought in an inconvenient
forum.
4.10 Waiver of Jury Trial. The parties hereto hereby
irrevocably waive, to the fullest extent permitted by applicable
law, any and all right to trial by jury in any legal proceeding
arising out of or relating to this Agreement or the transactions
contemplated hereby.
4.11 Agents. The Administrative Agent may employ agents and
attorneys-in-fact in connection herewith and shall not be
responsible for the negligence or misconduct of any such agents
or attorneys-in-fact selected by it in good faith.
IN WITNESS WHEREOF, the parties hereto have caused this Guarantee
Agreement to be duly executed and delivered as of the day and
year first above written.
NORTHROP ACQUISITION, INC.
By /s/ John R. Rettberg
Title: Vice President
and Treasurer
Address for Notices:
c/o Northrop Corporation
1840 Century Park East
Los Angeles, California 90067
Attention: John R. Rettberg
Vice President and Treasurer
Telecopier No.: 310-553-2076
Telephone No. : 310-201-3070
With a copy (after the Merger Effective Date) to:
Grumman Corporation
1111 Stewart Street
Bethpage, Long Island, New York 11714
Attention: Chief Financial Officer
Telecopier No.: 516-575-0538
Telephone No. : 516-575-7991
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION),
as Administrative Agent
By /s/ Patricia B. Bril
Title: Director
Address for Notices:
The Chase Manhattan Bank
(National Association), as
Administrative Agent
4 Metrotech Center -- 13th Floor
Brooklyn, New York 11245
Attention: New York Agency
Telecopier No.: 718-242-6910
Telephone No.: 718-242-7979
With a copy to:
The Chase Manhattan Bank
(National Association)
1 Chase Manhattan Plaza
New York, New York 10081
Attention: Richard C. Smith
Telecopier No.: 212-552-1457
Telephone No.: 212-552-0667