Document:

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                                                                    EXHIBIT 10.1

                SETTLEMENT AGREEMENT, WAIVER AND GENERAL RELEASE

         THIS SETTLEMENT AGREEMENT, WAIVER AND GENERAL RELEASE (this
"Agreement") is made as of February __, 2003, by and between Sterling Chemicals,
Inc., a Delaware corporation ("Sterling"), and Frank P. Diassi c/o Vinson &
Elkins LLP, 2300 First City Tower, 1001 Fannin Street, Houston, Texas,
77002-6760 ("Mr. Diassi" and, together with Sterling, the "Parties").

                                   BACKGROUND

1.       On July 16, 2001, Sterling Chemicals Holdings, Inc. ("Holdings") and
         certain of its direct and indirect subsidiaries, including Sterling
         (together, the "Debtors") filed voluntary petitions for reorganization
         under Chapter 11 of the United States Bankruptcy Code (the "Bankruptcy
         Code") in the United States Bankruptcy Court for the Southern District
         of Texas (the "Bankruptcy Court"). The Debtors' bankruptcy cases are
         being jointly administered by the Bankruptcy Court under Case No.
         01-37805-H4-11. The Debtors, together with their direct and indirect
         subsidiaries are collectively referred to herein as the "Company").

2.       On December 13, 2001 and November 13, 2002, respectively, Mr. Diassi
         filed a proof of claim and an administrative claim (together, the
         "Claim") in the Debtors' bankruptcy case. By his Claim, Mr. Diassi
         sought to recover, among other things, benefits allegedly owed to him
         under the terms of a Third Amended and Restated Key Employee Protection
         Plan, an Amended and Restated Retention Bonus Plan, and an Amended and
         Restated Supplemental Pay Plan, as amended (together, the "Benefit
         Plans"). Each of the Benefit Plans is or was maintained by Holdings and
         Sterling.

3.       The Debtors objected to Mr. Diassi's Claim.  In doing so, the Debtors
         asserted that Mr. Diassi is not entitled to benefits under any of the
         Benefit Plans. On November 21, 2002, the Bankruptcy Court entered an
         order confirming a Plan of Reorganization in the Debtors' bankruptcy
         case (the "Plan of Reorganization").

4.       An arbitration proceeding (the "Arbitration") was initiated to resolve
         certain aspects of Mr. Diassi's Claim, and the Arbitration is being
         administered by the Dallas Office of the American Arbitration
         Association ("AAA") at Case Number 70 116 00171 02.

5.       Sterling and Mr. Diassi wish to resolve Mr. Diassi's Claim, including
         any and all disputes arising from Mr. Diassi's employment with the
         Company or his participation in the Benefit Plans, on the terms and
         conditions set forth below.

                                   Page 1 of 5
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         NOW, THEREFORE, in consideration of the promises and the mutual
covenants contained herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Parties, intending
to be legally bound, hereby agree as follows:

         Section 1. Allowed Administrative Claim: Subject to the terms and
conditions of this Agreement and of the Plan of Reorganization, Mr. Diassi's
Claim shall be Allowed as an Administrative Claim in the amount of: (a)
$300,000; plus (b) an additional amount of $150,000 as reimbursement in full for
attorneys' fees incurred by Mr. Diassi in pursuing his Claim.

         Section 2: Mutual Release and Waiver of all Claims: Subject to the
terms and conditions of this Agreement, Mr. Diassi hereby releases and waives --
for himself and for his heirs, spouse, representatives, attorneys, executors,
administrators and assigns -- any and all claims, whether at law, equity, by
statute or contract, that he has or may have against, the Company, or any of
their respective bankruptcy estates, officers, directors, shareholders,
employees, agents, administrators, trustees or fiduciaries, arising out of or in
any way related to Mr. Diassi's employment by or service for Sterling or the
Debtors. This release of claims includes, but is not limited to, claims under
the Benefit Plans, claims for breach of any implied or express contract or
covenant; claims for promissory estoppel; claims of entitlement to any pay
(other than the Allowed Administrative Claim provided for under Section 1 of
this Agreement); claims of wrongful denial of insurance and employee benefits;
claims for wrongful termination, public policy violations, defamation, invasion
of privacy, fraud, misrepresentation, emotional distress or other common law or
tort matters; whistle blower claims, claims of harassment, retaliation or
discrimination based on age, race, color, religion, sex, national origin,
ancestry, physical or mental disability, medical condition, marital status,
sexual preference, union action or veteran status; claims under the Texas
Commission on Human Rights Act, Texas Labor Code Section 21.001, et seq., the
Texas Workers' Compensation Act, Texas Labor Code Section 451.001, Texas Payday
Law, Title II, Chapter 61 and Texas Labor Code; claims based on legal
restrictions on Sterling's right to terminate, not to hire or promote employees,
or to change an employee's compensation; and claims based on any federal, state
or other governmental statute, regulation or ordinance, including, without
limitation: Title VII of the Civil Rights Act of 1964, as amended; the Equal Pay
Act, 29 U.S.C. Section 206(d)(1); the Age Discrimination in Employment Act
("ADEA"); the Americans with Disabilities Act; the Labor Management Relations
Act; and the Employee Retirement Income Security Act ("ERISA"). Subject to the
terms and conditions of this Agreement, Sterling hereby releases and waives any
and all claims, whether at law, equity, by statute or contract, that it has or
may have against Mr. Diassi arising out of or in any way related to Mr. Diassi's
employment by or service for the Company.

         Section 3. Taxes: Mr. Diassi acknowledges and agrees that a $300,000
portion of the Allowed Administrative Claim described in Section 1 of this
Agreement represents settlement of a disputed claim for benefits under the
Benefit Plans and, as such, shall constitute "wages" subject to employment taxes
under Subtitle C of the Internal Revenue Code of 1986, as amended. Mr. Diassi
further acknowledges and agrees that he is fully responsible for the payment of
any

                                   Page 2 of 5

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and all federal and state income taxes that may apply with respect to any
and all amounts received pursuant to the Allowed Administrative Claim described
in Section 1 of this Agreement.

         Section 4. Conditions to Effectiveness: The Parties acknowledge and
agree that this Agreement and the waivers and releases contained herein shall
not be or become effective unless and until the following conditions are
satisfied:

         (i)  this Agreement shall have been executed and delivered by the
              Parties; and

         (ii) the Bankruptcy Court shall have issued an order approving the
              terms of the Agreement

         Section 5. Non-Disparagement: Subject to Section 7 below: (i) the
Company agrees that it will not make any statements to third parties that are
intended to disparage, discredit or injure the reputation of Mr. Diassi; and
(ii) Mr. Diassi agrees that he will not make any statements to third parties
that are intended to disparage, discredit or injure the reputation of the
Company or any of their respective bankruptcy estates, officers, directors,
shareholders, employees, agents, administrators, trustees or fiduciaries. Mr.
Diassi further agrees that he will not do anything that would in any way tend to
harm the Company's good will and relationships with customers, suppliers and
others having business dealings with the Company. Nothing in this Section 5
shall obligate either Party to commit perjury or violate any law or court order.

         Section 6. Cooperation: Mr. Diassi agrees that, if reasonably requested
by the Company, he will be reasonably available to, and will cooperate in all
reasonable respects with the Company or any of its respective bankruptcy
estates, officers, directors, shareholders, employees, agents, administrators,
trustees or fiduciaries, and their respective counsel in connection with any
litigation, proceeding or investigation (administrative, civil or criminal). It
is understood and agreed that Mr. Diassi shall not be required to devote more
than one day of his time pursuant to any particular request by the Company under
this Section 6 unless the Parties shall have mutually agreed upon the amount of
reasonably compensation to be paid to Mr. Diassi therefore. Upon written request
accompanied by appropriate documentation, the Company agrees to reimburse Mr.
Diassi for any reasonably expenses incurred by Mr. Diassi in connection with any
actions taken by him pursuant to this Section 6.

         Section 7. Revocation: For a period of seven (7) calendar days
following his execution of this Agreement, Mr. Diassi may revoke the Agreement.
Said revocation must be in writing and must be delivered by telefacsimile and by
registered or certified mail, postmarked within seven (7) days of execution of
this Agreement, to:

                    Thomas S. Gigot
                    Groom Law Group, Chtd.
                    1701 Pennsylvania Avenue, N.W.
                    Washington, D.C. 20006
                    Phone (202) 861-9384
                    Telefacsimile (202) 659-4503

                                   Page 3 of 5

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The Agreement shall not become effective or enforceable until the revocation
period has expired.

         Section 8. Binding Effect. This Agreement shall insure to the benefit
of, and shall be binding upon the Parties and their respective heirs,
successors, permitted assigns, trustees and representatives.

         Section 9. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which taken
together shall constitute one and the same agreement. It shall not be necessary
in making proof of this Agreement to produce or account for more than one such
counterpart.

         Section 10. Severability. Should any clause, sentence, paragraph,
subsection or Section of this Agreement be judicially declared to be invalid,
unenforceable or void, such decision will not have the effect of invalidating or
voiding the remainder of this Agreement, and the Parties agree that the part or
parts of this Agreement so held to be invalid, unenforceable or void will be
deemed to have been stricken herefrom as if such stricken part or parts had
never been included herein.

         Section 11. Governing Law. This Agreement Shall Be Construed and
Enforced in Accordance With, and the Rights of the Parties Shall Be Governed By,
the Internal Laws of the State of Texas, Without Reference to Principles of
Conflicts of Law.

         Section 12. Entire Agreement. This Agreement sets forth all of the
promises, agreements, conditions, understandings, warranties and representations
between the Parties with respect to the matters covered hereby, and supersedes
all prior agreements, arrangements and understandings between the Parties,
whether written, oral or otherwise. There are no promises, agreements,
conditions, understandings, warranties or representations, oral or written,
express or implied, between the Parties concerning the subject matter hereof
except as set forth herein.

         Section 13. Arbitration. Upon satisfaction of the Conditions to
Effectiveness, the Parties shall notify the AAA that Mr. Diassi's Claim has been
settled. Mr. Diassi shall withdraw all claims pending in the Arbitration and
request that the AAA close the arbitration proceedings. Any outstanding fees and
costs of the Arbitration, including the Arbitrator's fee, shall be borne equally
by the Parties.

         Section 14. Acknowledgements, Representations and Warranties: Mr.
Diassi, in connection with his execution of this Agreement, acknowledges that:
he is waiving rights or claims arising under the Age Discrimination in
Employment Act and ERISA; he has been advised by Sterling to consult with an
attorney prior to executing this Agreement; he has a period

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of 21 days in which to consider this Agreement; and for a period of 7 days
following execution of this Agreement, he may revoke the Agreement (pursuant to
Section 5), and that the Agreement shall not become effective and enforceable
until that 7-day revocation period has expired. Mr. Diassi further represents
and warrants that he has completely read this Agreement prior to executing it,
has had an opportunity to review it and to understand its terms, contents,
conditions and effects and has entered into this Agreement knowingly and
voluntarily.

IN WITNESS WHEREOF, the Parties have executed this Agreement on the day and year
first written above.

FRANK P. DIASSI

/s/ Frank P. Diassi
-----------------------------------

STERLING CHEMICALS, INC.

BY: /s/ Rick K. Crump
   --------------------------------

                                   Page 5 of 5Form of Eighth Supplemental Indenture

 
EXECUTION COPY

 
Exhibit 4.1 
 
 

 
 
NORTHROP GRUMMAN SPACE &
MISSION SYSTEMS CORP., 
 
 
NORTHROP GRUMMAN CORPORATION 
 
 
AND 
 
 
JPMORGAN CHASE BANK, as Trustee 
 
 
Eighth Supplemental Indenture 
 
 
Dated as of March 27, 2003 
 
 
Relating to the Guarantee 
 
 
and 
 
 
Certain Other Changes 
 
 

 

 
EIGHTH
SUPPLEMENTAL INDENTURE (this “Eighth Supplemental Indenture”) dated as of March 27, 2003, by and among Northrop Grumman Space & Mission Systems Corp. (formerly TRW Inc.), an Ohio corporation (the “Company”),
Northrop Grumman Corporation, a Delaware corporation and the parent of the Company (the “Guarantor”), and JPMorgan Chase Bank (formerly The Chase Manhattan Bank), a New York banking corporation, as successor trustee (the
“Trustee”) under the Indenture referred to below. 
 
WHEREAS, the Company and the predecessor trustee to the Trustee entered into an Indenture dated as of May 1, 1986, as amended and supplemented by the First Supplemental Indenture dated as of August 24, 1989, the Second
Supplemental Indenture dated as of June 2, 1999, the Third Supplemental Indenture dated as of June 2, 1999, the Fourth Supplemental Indenture dated as of June 2, 1999, the Fifth Supplemental Indenture dated as of June 2, 1999, the Sixth Supplemental
Indenture dated as of June 23, 1999 and the Seventh Supplemental Indenture dated as of June 23, 1999 (as from time to time amended and supplemented, the “Indenture”), pursuant to which the Company has issued and from time to time
hereafter may issue, debentures, notes, bonds or other evidences of indebtedness (collectively the “Securities”); 
 
WHEREAS, pursuant to an Agreement and Plan of Merger dated as of June 30, 2002, on December 11, 2002 Richmond Acquisition Corp., a
wholly-owned subsidiary of the Guarantor, was merged with and into the Company, with the Company surviving the merger as a wholly-owned subsidiary of the Guarantor, and thereafter the Company’s name was changed from “TRW Inc.” to
“Northrop Grumman Space & Mission Systems Corp.;” 
 
WHEREAS, Section 11.01(a) of the Indenture provides, among other things, that the Trustee and the Company, when authorized by a Board Resolution, may enter into a supplemental indenture without consent of any holder of Securities
(each, a “Holder”), the purpose of which is to evidence the succession of another corporation to the Company, or successive successions, and the assumption by the successor corporation of the covenants, agreements and obligations of
he Company therein and contained in the Securities pursuant to Article Twelve thereof; 
 
WHEREAS, JP Morgan & Co. previously was merged with and into Chase Manhattan Corp., as a result of which the name of the Trustee was changed from “The Chase Manhattan Bank” to
“JPMorgan Chase Bank;” 
 
WHEREAS,
Section 11.01(e) of the Indenture provides, among other things, that the Trustee and the Company, when authorized by a Board Resolution, may enter into a supplemental indenture without the consent of any Holder, the purpose of which is to evidence
and provide for the acceptance of appointment by another corporation as a successor Trustee hereunder with respect to one or more series of Securities; 
 
WHEREAS, Section 11.01(c) of the Indenture provides, among other things, that the Trustee and the Company, when authorized by a Board
Resolution, may enter into a supplemental indenture without the consent of any Holder, the purpose of which is to make such other provisions in regard to matters or questions arising under this Indenture as shall not adversely affect the interests
of the Holders of the Securities; 
 

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WHEREAS, the
Guarantor and the Company now desire to provide for the full and unconditional guarantee by the Guarantor of the payment obligations of the Company in respect of the Securities (the “Guarantee”), each of the Guarantor and the
Company having determined that execution of such Guarantee is in the best interests of each of the Guarantor and the Company; 
 
WHEREAS, in connection herewith the Company has determined that this Eighth Supplemental Indenture complies with Section 11.01 of the
Indenture and, pursuant to such section, does not require the consent of any Holders; 
 
WHEREAS, the Company has furnished the Trustee with an Officers’ Certificate and an Opinion of Counsel as required by Sections 11.03, 12.04 and 15.05 of the Indenture and Board Resolutions as
required by Section 11.01 of the Indenture; and 
 
WHEREAS, all conditions and requirements necessary to make this Eighth Supplemental Indenture a valid instrument that is legally binding on the parties hereto and on the Holders have been satisfied. 
 
NOW, THEREFORE, for and in consideration of the foregoing
premises, it is mutually covenanted and agreed, for the equal and proportionate benefit of all Holders of the Securities (including any Holder of any coupon appertaining to any such Security) or of any series thereof, as follows: 
 
 
ARTICLE ONE 
 
AMENDMENTS
TO INDENTURE 
 

	 	1.1	 	Amendments to Article One of the Indenture. 

 
        (a) Capitalized terms used herein and not defined herein have the meanings ascribed to
such terms in the Indenture. 
 
        (b) Section 1.01 of the Indenture hereby is supplemented and amended to include the following definitions, in the appropriate alphabetical sequence (and in place of any corresponding
definitions in the Indenture), as follows: 
 
        “The term ‘Company’ shall mean Northrop Grumman Space & Mission Systems Corp. (formerly TRW Inc.), an Ohio corporation, and, subject to the provisions of Article
Twelve, shall mean its successors and assigns from time to time hereafter.” 
 
        “The term ‘Corporate Trust Office of the Trustee,’ or other similar term, shall mean the principal office of the Trustee at which at any
particular time its corporate trust business shall be administered, and, so long as JPMorgan Chase Bank shall be Trustee hereunder, shall mean the office in New York, New York of the Corporate Trust Division of the Trustee, which office at the date
hereon is located at 4 New York Plaza, 15th Floor, New York, New York 10004, Attention: Institutional Trust Services.” 
 

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        “The term ‘Guarantee’ means the Guarantee dated as of March 27, 2003 made by the Guarantor in favor of and for the benefit of the Trustee for the Holders whereby the
Guarantor guarantees the payment obligations of the Company with respect to any and all of the Securities.” 
 
        “The term ‘Guarantor’ shall mean Northrop Grumman Corporation, a Delaware
corporation and parent of the Company.” 
 
        “The term ‘Trustee’ means JPMorgan Chase Bank and, subject to the provisions of Article Eight, shall also include the successors and assigns of the Trustee hereunder;
provided, however, that if at any time there is more than one such person acting as Trustee hereunder, ‘Trustee’ as used with respect to the Securities of any series shall mean only the Trustee with respect to the Securities
of that series.” 
 
1.2    Amendments to Article Fifteen of the Indenture. The Indenture hereby is amended and supplemented by deleting the first sentence of Section 15.03 and inserting the following text in its place:

 
“Any notice, direction, request or demand
which by any provision of this Indenture is required or permitted to be given or served by the Trustee or by the Holders to or on the Company may be given or served by being deposited, first-class, postage prepaid, in a post office letter box in the
United States (except as otherwise provided in paragraph (d) of Section 7.01) addressed (until another address is filed by the Company with the Trustee) as follows: Northrop Grumman Space & Mission Systems Corp. c/o Northrop Grumman Corporation,
1840 Century Park East, Los Angeles, California 90067. Any notice, direction, request, or demand which by any provision of this Indenture is required or permitted to be given or served by the Trustee, the Company or by the Holders to or on the
Guarantor may be given or served by being deposited, first-class, postage prepaid, in a post office letter box in the United States addressed (until another address is filed by the Guarantor with the Trustee) as follows: Northrop Grumman
Corporation, 1840 Century Park East, Los Angeles, California 90067, Attention: Corporate Vice President and Secretary.” 
 
1.3    Addition of New Article to the Indenture. The Indenture hereby is amended and supplemented by inserting
the following immediately after Article Fifteen thereof: 
 
 
“ARTICLE SIXTEEN 
GUARANTEE OF PAYMENT OBLIGATIONS OF THE COMPANY 
 
SECTION 16.01. Agreement to Guarantee Obligations. Guarantor hereby agrees with each
Holder of a Security, and with each Holder of any coupon appertaining to any such Security, and with the Trustee on behalf of each such Holder, to enter into and thereby become bound by the terms and provisions of the Guarantee in the form attached
hereto as Exhibit A, a copy of which shall be executed and delivered by the Guarantor concurrently with the execution and delivery hereof. 
 

4 

 
SECTION 16.02. Execution and Delivery of Guarantee. 
 
        (a) The Guarantee referred to Section 16.01 hereof shall be executed on behalf of the Guarantor by the manual or facsimile signature of an officer of
such Guarantor and delivered to the Trustee. If an officer of a Guarantor whose signature is on such Guarantee no longer holds that office, such Guarantee will be valid nevertheless. 
 
        (b) Upon the execution and delivery of the Guarantee in
accordance with paragraph (a) of this Section 16.02, the Trustee shall cause such Guarantee (or a copy thereof) to be affixed to each Security; provided, however, that such Guarantee executed and delivered pursuant to paragraph (a) of
this Section 16.02 shall be deemed to form a part of each Security whether or not such Guarantee (or a copy thereof) is affixed thereto.” 
 
 
ARTICLE TWO 
 
REPRESENTATIONS AND WARRANTIES 
 
2.1    Organization. Each of the
Guarantor and the Company is a corporation or company, as the case may be, duly organized, validly existing and in good standing under the laws of its jurisdiction of organization. 
 
2.2    Authority. Each of the Guarantor and the Company has taken all corporate
action required by applicable law, its Certificate or Articles of Incorporation, as the case may be, and its Bylaws or Regulations, as the case may be, or otherwise to authorize the execution and delivery of this Eighth Supplemental Indenture. This
Eighth Supplemental Indenture has been duly and validly authorized, executed and delivered by each of the Guarantor and the Company and is the valid and binding obligation of each of the Guarantor and the Company, enforceable against it in
accordance with its terms, subject to any applicable bankruptcy, insolvency (including all applicable laws relating to fraudulent transfers), reorganization, moratorium or similar laws now or hereafter in effect relating to creditors’ rights
generally or to general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law). 
 
2.3    Absence of Conflicts. The execution, delivery and performance of this Eighth Supplemental Indenture by
each of the Guarantor and the Company do not (i) conflict with or breach any provision of its Certificate or Articles of Incorporation, as the case may be, or Bylaws or Regulations, as the case may be, or (ii) violate any order, writ, injunction,
decree, judgment, statute, rule, regulation or ruling of any court or governmental authority applicable to it. 
 
 
ARTICLE THREE 
 
MISCELLANEOUS 
 
3.1    This Supplemental Indenture. This Eighth Supplemental Indenture and the Exhibits hereto shall be
construed as supplemental to the Indenture and shall form a part of it, and the Indenture is hereby incorporated by reference herein and each is hereby ratified, approved and confirmed. 
 

5 

 
3.2    GOVERNING LAW. THIS EIGHTH SUPPLEMENTAL INDENTURE SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. 
 
3.3    Counterparts. This Eighth Supplemental Indenture may be executed by
facsimile signature and in any number of counterparts, each of which shall be an original, but such counterparts shall together constitute but one and the same instrument. 
 
3.4    Severability. In case any one or more of the provisions contained in this
Eighth Supplemental Indenture or the Securities shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision of the Eighth Supplemental
Indenture or the Securities, but this Eighth Supplemental Indenture and the Securities shall be construed as if such invalid or illegal or unenforceable provision had never been contained herein or therein. 
 
3.5    Recitals. The recitals
contained herein shall be taken as the statements of the Company and the Guarantor, and the Trustee assumes no responsibility for their correctness. 
 
3.6    Trustee Makes No Representation. The Trustee makes no representation as to the validity or sufficiency
of this Eighth Supplemental Indenture. 
 
3.7    Indenture Ratified. Except to the extent expressly amended hereby, the Indenture and the Securities are in all respects ratified and confirmed, and all the terms, conditions and provisions thereof
shall remain in full force and effect. Pursuant to Section 11.03 of the Indenture, this Eighth Supplemental Indenture shall form a part of the Indenture for all purposes, and every Holder of Securities heretofore or hereafter authenticated and
delivered shall be bound hereby. 
 
3.8    Notices. Any request, demand, authorization, direction, notice, consent, waiver or other Act of Holders or other document provided or permitted by this Eighth Supplemental Indenture shall be made in
accordance with Section 15.03 of the Indenture, as amended and supplemented hereby. 
 
[signature page follows] 
 

6 

 
IN WITNESS
WHEREOF, the parties hereto have caused this Eighth Supplemental Indenture to be duly executed as of the date first above written. 
 
 

	 NORTHROP GRUMMAN SPACE & MISSION SYSTEMS CORP.

	
	 by
	  	 	  	 
	 	  	

	 	  	 Name:
 Title:
	  	 
	
	 JPMORGAN CHASE BANK
 as Trustee

	
	 by
	  	 	  	 
	 	  	

	 	  	 Name:
 Title:
	  	 
	
	 NORTHROP GRUMMAN CORPORATION
 as Guarantor

	
	 by
	  	 	  	 
	 	  	

	 	  	 Name:
 Title:
	  	 

 

7

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