1 EXHIBIT 10
AMENDMENT NO. 2 TO CREDIT AGREEMENT
AMENDMENT No. 2 dated as of August 16, 1996 among MCDONNELL DOUGLAS
FINANCE CORPORATION (the "Company"), MCDONNELL DOUGLAS FINANCIAL SERVICES
CORPORATION, the BANKS listed on the signature pages hereof (the "Banks")
MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Documentation Agent (the
"Documentation Agent") and THE CHASE MANHATTAN BANK, as Administrative Agent.
W I T N E S S E T H :
WHEREAS, certain of the parties hereto have heretofore entered into
a Credit Agreement dated as of September 29, 1994 and amended as of August 31,
1995 (collectively, the "Agreement");
WHEREAS, the parties hereto desire to increase the aggregate amount
of the Syndicated Commitments from $220,000,000 to $240,000,000; and
WHEREAS, the parties hereto desire to amend further the Agreement to
(i) extend the Termination Date from August 30, 1999 to August 16, 2001, (ii)
reduce certain interest rates and Commitment Fee Rates and (iii) make certain
other changes as hereinafter provided;
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. DEFINITIONS; REFERENCES. Unless otherwise specifically
defined herein, each capitalized term used herein which is defined in the
Agreement shall have the meaning assigned to such term in the Agreement. Each
reference to "hereof", "hereunder", "herein" and "hereby" and each other
similar reference and each reference to "this Agreement" and each other
similar reference contained in the Agreement shall from and after the date
hereof refer to the Agreement as amended hereby. The term "Notes" defined in
the Agreement shall include from and after the date hereof the New Notes (as
defined below).
SECTION 2. AMENDMENT OF TERMINATION DATE. The definition of
"Termination Date" in Section 1.01 of the Agreement is amended to read in its
entirety as follows:
"Termination Date" means August 16, 2001, or, if such day is not a
Euro-Dollar Business Day, the next succeeding Euro-Dollar Business Day,
unless such Euro-Dollar Business Day falls in another calendar month, in
which case the Termination Date shall be the next preceding Euro-Dollar
Business Day.
SECTION 3. AMENDMENT OF SECTION 1.01. (a) Each reference to
"1994" in the definition of "Company s 1994 Form 10-K" is amended to read
"1995".
(b) Each reference to "Adjusted Debt" in the definition of
"Unrestricted Subsidiary" is amended to read "Consolidated Adjusted Debt".
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(c) The text "(other than Non-Recourse Debt)" is deleted at eachplace
it appears in the definition of "Unrestricted Subsidiary".
(d) Section 1.01 of the Agreement is amended by inserting, in their
appropriate alphabetical positions, the following definitions:
"Adjusted Tangible Net Worth" means the sum (without duplication) of
(i) the consolidated stockholders' equity of the Company PLUS (ii)
preferred stock of the Company not reflected in clause (i) PLUS (iii)
preferred stock of any Subsidiary of the Company not reflected in clause
(i), PROVIDED that such Subsidiary has no material assets other than
subordinated obligations owed it by the Company all terms and conditions
of which shall have been approved by Banks having at least 51% of the
aggregate amount of the Syndicated Commitments, MINUS (iv) to the extent
reflected in clause (i), Intangible Assets.
"Consolidated Adjusted Debt" means the sum (without duplication) of
(i) the consolidated amount of Debt of the Company and its Restricted
Subsidiaries, (ii) the consolidated amount of Non-Recourse Debt of the
Company and its Restricted Subsidiaries and (iii) the aggregate amount of
discounted Net Rental Payments described in Section 5.11.
"Leverage Ratio" means, at any date, the ratio of (i) Consolidated
Adjusted Debt at such date to (ii) Adjusted Tangible Net Worth at such
date.
SECTION 4. AMENDMENT OF ARTICLE IV. (a) Each reference to "Decem-
ber 31, 1994" in Sections 4.04 and 4.11 of the Agreement is amended to read
"December 31, 1995".
(b) Each reference to "March 31, 1995" in Sections 4.04(b), 4.04(c)
and 4.11 of the Agreement is amended to read "March 31, 1996".
SECTION 5. AMENDMENT OF ARTICLE V. (a) Section 5.07 of the
Agreement is amended to read in its entirety as follows:
SECTION 5.07. LEVERAGE RATIO. The Leverage Ratio shall not exceed
800% as of the last day of any Fiscal Quarter.
(b) Each reference to "Adjusted Debt" in Section 5.09 of the
Agreement is amended to read "Consolidated Adjusted Debt".
(c) Each reference to "Adjusted Debt" in Section 5.10 of the
Agreement is amended to read "Consolidated Adjusted Debt".
(d) Each reference to "Adjusted Debt" in Section 5.11 of the
Agreement is amended to read "Consolidated Adjusted Debt".
(e) The text "(other than Non-Recourse Debt)" is deleted at each
place it appears in Sections 5.09 and 5.10.
SECTION 6. AMENDMENT OF SECTION 6.01(f). Section 6.01(f)is amended
to read in its entirety as follows:
(f) any event or condition shall occur which results in the
acceleration of the maturity of any Material Financial Obligations or
enables the holder of such Material Financial Obligations or any Person
3
acting on such holder's behalf to accelerate the maturity thereof;
SECTION 7. CHANGES IN SYNDICATED COMMITMENTS. With effect from and
including the date this Amendment No. 2 becomes effective in accordance with
Section 11 hereof, (i) each Person listed on the signature pages hereof which
is not a party to the Agreement (a "New Bank") shall become a Bank party to
the Agreement and (ii) the Syndicated Commitment of each Bank shall be the
amount set forth opposite its name on the signature pages hereto. Any Bank
whose Syndicated Commitment is changed to zero shall upon such effectiveness
cease to be a Bank party to the Agreement, and all accrued fees and other
amounts payable under the Agreement for the account of such Bank shall be due
and payable on such date; PROVIDED that the provisions of Sections 8.03 and
9.03 of the Agreement shall continue to inure to the benefit of each such
Bank.
SECTION 8. REPRESENTATIONS AND WARRANTIES. The Company hereby
represents and warrants that as of the date hereof and after giving effect
hereto:
(a) no Default has occurred and is continuing; and
(b) each representation and warranty of the Borrower set forth in
the Agreement is true and correct as though made on and as of this date.
SECTION 9. Amendment of Pricing Schedule. The Pricing Schedule is
amended to read in its entirety as set forth in Exhibit I to this Amendment
No. 2.
SECTION 10. Governing Law. This Amendment No. 2 shall be governed
by and construed in accordance with the laws of the State of New York.
SECTION 11. Counterparts; Effectiveness. This Amendment No. 2 may
be signed in any number of counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the
same instrument. This Amendment No. 2 shall become effective as of the date
hereof when (i) the Documentation Agent shall have received duly executed
counterparts hereof signed by each of the parties hereto (or, in the case of
any party as to which an executed counterpart shall not have been received,
the Documentation Agent shall have received telegraphic, telex or other
written confirmation from such party of execution of a counterpart hereof by
such party); (ii) the Documentation Agent shall have received a duly executed
Note for each of the New Banks (a "New Note"), dated on or before the date of
effectiveness hereof and otherwise in compliance with Section 2.03 of the
Agreement; (iii) the Documentation Agent shall have received an opinion of the
Associate General Counsel of the Company (or such other counsel for the
Company as may be acceptable to the Documentation Agent), substantially in the
form of Exhibit B to the Agreement with reference to the New Notes, this
Amendment No. 2 and the Agreement as amended hereby; and (iv) the
Documentation Agent shall have received all documents it may reasonably
request relating to the existence of the Company, the corporate authority for
and the validity of the Agreement as amended hereby, the New Notes and any
other matters relevant hereto, all in form and substance satisfactory to the
Documentation Agent.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 2 to
be duly executed by their respective authorized officers as of theday and
year first above written.
MCDONNELL DOUGLAS
FINANCE CORPORATION
By /s/Phillip B. Dandridge
Title: Treasurer
MCDONNELL DOUGLAS FINANCIAL
SERVICES CORPORATION
By /s/Phillip B. Dandridge
Title: Treasurer
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Syndicated
Commitments
- -----------
$25,000,000 MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By /s/Diana H. Imhof
Title: Vice President
$25,000,000 THE BANK OF NEW YORK
By /s/Lisa Brown
Title: Vice President
$25,000,000 THE CHASE MANHATTAN BANK
By /s/Matthew H. Massie
Title: Vice President
$25,000,000 THE INDUSTRIAL BANK OF JAPAN, LTD
By /s/Toshinari Iyoda
Title: Senior Vice President
$20,000,000 BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By /s/Gina M. West
Title: Vice President
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$20,000,000 BANK OF MONTREAL
By /s/Claudia C. Heldring
Title: Director
$20,000,000 DEUTSCHE BANK AG, LOS ANGELES
AND/OR CAYMAN ISLAND BRANCHES
By /s/Olaf Janke
Title: Associate
By /s/J. Scott Jessup
Title: Vice President
$20,000,000 NATIONAL WESTMINSTER BANK PLC
By /s/Caroline A. Percy
Title: Vice President
$20,000,000 THE FIRST NATIONAL BANK OF CHICAGO
By /s/Al R. Chircop
Title: Authorized Agent
$20,000,000 THE LONG-TERM CREDIT BANK OF JAPAN
LTD.
By /s/Motokazu Uematsu
Title: Deputy General Manager
$20,000,000 THE MITSUBISHI TRUST AND BANKING
CORPORATION
By /s/Scott J. Paige
Title: Senior Vice President
Total Syndicated
Commitments
- ----------------
$240,000,000
============
7
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Agent
By /s/Diana H. Imhof
Title: Vice President
THE CHASE MANHATTAN BANK,
as Agent
By /s/Matthew H. Massie
Title: Vice President
8 EXHIBIT I
PRICING SCHEDULE
The "LIBOR Margin" and "Commitment Fee Rate" for any day are the
respective percentage set forth below in the applicable row under the column
corresponding to the Status that exists on such day:
Level Level Level Level Level Level
Status I II III IV V VI
- -------------------------------------------------------------------------
LIBOR Margin 0.225% 0.25% 0.30% 0.375% 0.475% 0.75%
Commitment Fee Rate 0.075% 0.08% 0.10% 0.125% 0.175% 0.250%
For purposes of this Schedule, the following terms have the following
meanings:
"Level I Status" exists at any date if, at such date, the Company's long-
term debt is rated A or higher by S&P or A2 or higher by Moody's.
"Level II Status" exists at any date if, at such date, (i) the Company's
long-term debt is rated A- or higher by S&P or A3 or higher by Moody's and
(ii) Level I Status does not exist.
"Level III Status" exists at any date if, at such date, (i) the Company's
long-term debt is rated BBB+ or higher by S&P or Baa1 or higher by Moody's and
(ii) neither Level I Status nor Level II Status exists.
"Level IV Status" exists at any date if, at such date, (i) the Company's
long-term debt is rated BBB or higher by S&P or Baa2 or higher by Moody's and
(ii) none of Level I Status, Level II Status and Level III Status exists.
"Level V Status" exists at any date if, at such date, (i) the Company's
long-term debt is rated BBB- or higher by S&P or Baa3 or higher by Moody's and
(ii) none of Level I Status, Level II Status, Level III Status or Level IV
Status exists.
"Level VI Status" exists at any date if, at such date, no other Status
exists.
"Moody's" means Moody's Investors Service, Inc.
"S&P" means Standard and Poor's Ratings Group.
"Status" means, at any date, whichever of Level I Status, Level II
Status, Level III Status, Level IV Status, Level V Status or Level VI Status
exists at such date.
The credit ratings to be utilized for purposes of determining a Status
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are the publicly announced ratings assigned to unsecured senior obligations
ofthe Company without third party credit support (the "Long-Term Securities").
Ratings assigned to any obligation which is secured or which has the benefit
of third party credit support shall be disregarded. Notwithstanding the
foregoing two sentences, if the obligations of the company under this
Agreement and its Notes are hereafter secured or entitled to the benefit of
any third party credit support, then the credit ratings utilized in
determining a Status shall, if the Company so requests by written notice to
the Documentation Agent, be the ratings assigned to any other senior
obligations of the Company that are secured by the same collateral or entitled
to the benefit of the same third party credit support, in each case equally
and ratably with the obligations of the Company under this Agreement and the
Notes (and such obligations shall be "Long-Term Securities" for purposes of
the next succeeding paragraph).
For purposes of determining Status, if at any date the rating of the Long-Term
Securities by Moody's shall be higher or lower than the comparable rating by
S&P by two or more rating levels (it being understood that for these purposes
an S&P rating of A+ is comparable to a Moody's rating of A1, an S&P rating of
A is comparable to a Moody s rating of A2, and so forth), then the rating of
the Long-Term Securities by each of Moody's and S&P shall be deemed to be one
rating level above the lower of the two actual ratings.