AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 18, 1994
REGISTRATION NO. 33-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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NORTHROP GRUMMAN CORPORATION
(Exact name of Registrant as specified in its charter)
DELAWARE 95-1055798
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1840 CENTURY PARK EAST
LOS ANGELES, CALIFORNIA 90067
(310) 553-6262
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
SHEILA M. GIBBONS, CORPORATE VICE PRESIDENT AND SECRETARY
NORTHROP GRUMMAN CORPORATION
1840 CENTURY PARK EAST
LOS ANGELES, CALIFORNIA 90067
(310) 553-6262
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
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COPIES TO:
John D. Hussey, Esq. John R. Light, Esq.
Sheppard, Mullin, Richter & Hampton Latham & Watkins
333 South Hope Street, 48th Floor 633 West Sixth Street, Suite 4000
Los Angeles, California 90071 Los Angeles, California 90071
(213) 620-1780 (213) 485-1234
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APPROXIMATE DATE OF COMMENCEMENTS OF PROPOSED SALE TO PUBLIC:
FROM TIME TO TIME AFTER THIS REGISTRATION STATEMENT IS DECLARED EFFECTIVE.
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If the only securities being registered on this Form are being offered
pursuant to dividend or investment plans, please check the following box. / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
reinvestment plans, please check the following box. /X/
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CALCULATION OF REGISTRATION FEE
PROPOSED MAXIMUM
PROPOSED MAXIMUM AGGREGATE
TITLE OF EACH CLASS OF AMOUNT TO OFFERING PRICE OFFERING PRICE AMOUNT OF
SECURITIES TO BE REGISTERED BE REGISTERED (1)(2) PER UNIT (2) (1)(2) REGISTRATION FEE
Debt Securities, Preferred Stock, $1.00 par value,
Common Stock, $1.00 par value (3)(4), Warrants to
Purchase Debt Securities, Warrants to Purchase
Equity Securities (4) $800,000,000 $275,862
Capital Securities (5) (5) (5) None
(1) In no event will the aggregate initial offering price of the Debt
Securities, Preferred Stock, Common Stock, Warrants to Purchase Debt
Securities and Warrants to Purchase Equity Securities issued under these
Registration Statements exceed $800,000,000, or, if any securities are
issued in any foreign currency units, the U.S. dollar equivalent of
$800,000,000, and if any securities are issued at original issue discount,
such greater amount as shall result in an aggregate offering price not to
exceed $800,000,000.
(2) Not applicable pursuant to General Instruction IID to Form S-3.
(3) Includes Common Stock Purchase Rights. Prior to the occurrence of certain
events, the Rights will not be exercisable or evidenced separately from the
Common Stock.
(4) The aggregate amount of Common Stock registered hereunder is limited to
that which is permissible under Rule 415(a)(4) of the Securities Act.
(5) In addition to any Preferred Stock or Common Stock that may be issued
directly under this Registration Statement, there are being registered
hereunder an indeterminate number of shares of Preferred Stock or Common
Stock as may be issued upon conversion or exchange of Debt Securities or
Preferred Stock, as the case may be. No separate consideration will be
received for any shares of Preferred Stock or Common Stock so issued upon
such conversion or exchange.
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF ANY OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED, AUGUST 18, 1994
Northrop Grumman Corporation
Debt Securities, Preferred Stock,
Common Stock and Warrants
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NORTHROP GRUMMAN CORPORATION ("NORTHROP GRUMMAN" OR THE "COMPANY") MAY FROM TIME
TO TIME OFFER, TOGETHER OR SEPARATELY, ITS (I) DEBT SECURITIES ("DEBT
SECURITIES"), WHICH MAY BE EITHER SENIOR DEBT SECURITIES ("SENIOR DEBT
SECURITIES") OR SUBORDINATED DEBT SECURITIES ("SUBORDINATED DEBT
SECURITIES"), CONSISTING OF DEBENTURES, NOTES AND/OR OTHER UNSECURED
EVIDENCES OF INDEBTEDNESS IN ONE OR MORE SERIES; (II) SHARES OF ITS
PREFERRED STOCK ("PREFERRED STOCK"); (III) SHARES OF ITS COMMON STOCK,
$1.00 PAR VALUE (THE "COMMON STOCK"); AND (IV) WARRANTS TO PURCHASE
SECURITIES OF THE COMPANY AS SHALL BE DESIGNATED BY THE COMPANY AT
THE TIME OF THE OFFERING (THE "WARRANTS") IN AMOUNTS, AT PRICES AND
ON TERMS TO BE DETERMINED AT THE TIME OF THE OFFERING. THE DEBT
SECURITIES, PREFERRED STOCK, COMMON STOCK AND WARRANTS ARE
COLLECTIVELY CALLED THE "SECURITIES."
THE SECURITIES OFFERED PURSUANT TO THIS PROSPECTUS MAY BE ISSUED IN ONE OR MORE
SERIES OR ISSUANCES AT AN AGGREGATE INITIAL OFFERING PRICE NOT TO EXCEED
$800,000,000 OR ITS EQUIVALENT (BASED ON THE APPLICABLE EXCHANGE RATES
AT THE TIME OF SALE) IN ONE OR MORE FOREIGN CURRENCIES, CURRENCY
UNITS, COMPOSITE CURRENCIES OR IN AMOUNTS DETERMINED BY
REFERENCE TO AN INDEX AS SHALL BE DESIGNATED BY THE
COMPANY.
THE SENIOR DEBT SECURITIES WHEN ISSUED WILL RANK ON A PARITY WITH ALL OTHER
UNSECURED AND UNSUBORDINATED INDEBTEDNESS OF THE COMPANY, AND THE SUBORDINATED
DEBT SECURITIES WHEN ISSUED WILL BE SUBORDINATED AS DESCRIBED IN THE
ACCOMPANYING PROSPECTUS SUPPLEMENT (THE "PROSPECTUS SUPPLEMENT"). CERTAIN
SPECIFIC TERMS OF THE PARTICULAR SECURITIES IN RESPECT OF WHICH THIS
PROSPECTUS IS BEING DELIVERED ARE SET FORTH IN THE PROSPECTUS
SUPPLEMENT, INCLUDING, WHERE APPLICABLE, (I) IN THE CASE OF DEBT
SECURITIES, THE TITLE, AGGREGATE PRINCIPAL AMOUNT, DENOMINATIONS,
MATURITY, ANY INTEREST RATE (WHICH MAY BE FIXED OR VARIABLE) AND TIME
OF PAYMENT OF ANY INTEREST, ANY TERMS FOR REDEMPTION AT THE OPTION
OF THE COMPANY OR THE HOLDER, ANY TERMS FOR SINKING FUND PAYMENTS,
ANY TERMS FOR CONVERSION INTO OTHER SECURITIES, CURRENCY OR
CURRENCIES OF DENOMINATION AND PAYMENT, IF OTHER THAN U.S.
DOLLARS, ANY LISTING ON A SECURITIES EXCHANGE AND ANY OTHER
TERMS IN CONNECTION WITH THE OFFERING AND SALE OF THE DEBT
SECURITIES IN RESPECT OF WHICH THIS PROSPECTUS IS
DELIVERED, AS WELL AS THE INITIAL PUBLIC OFFERING PRICE;
(II) IN THE CASE OF PREFERRED STOCK, THE SPECIFIC TITLE,
THE AGGREGATE AMOUNT, ANY DIVIDEND (INCLUDING THE
METHOD OF CALCULATING PAYMENT OF DIVIDENDS),
LIQUIDATION, REDEMPTION, VOTING AND OTHER RIGHTS,
ANY TERMS FOR ANY CONVERSION OR EXCHANGE INTO
OTHER SECURITIES, ANY LISTING ON A SECURITIES
EXCHANGE, THE INITIAL PUBLIC OFFERING PRICE AND
ANY OTHER TERMS; (III) IN THE CASE OF COMMON
STOCK, THE NUMBER OF SHARES OF COMMON STOCK
AND THE TERMS OF THE OFFERING THEREOF; AND
(IV) IN THE CASE OF WARRANTS, THE
DESIGNATION AND NUMBER, THE EXERCISE
PRICE, ANY LISTING OF THE WARRANTS OR
THE UNDERLYING SECURITIES ON A
SECURITIES EXCHANGE AND ANY OTHER
TERMS IN CONNECTION WITH THE
OFFERING, SALE AND EXERCISE OF
THE WARRANTS.
THE PROSPECTUS SUPPLEMENT WILL ALSO CONTAIN INFORMATION, WHERE APPLICABLE, ABOUT
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
RELATING TO THE SECURITIES COVERED BY THE PROSPECTUS SUPPLEMENT.
THE COMPANY'S COMMON STOCK IS LISTED ON THE NEW YORK STOCK EXCHANGE AND THE
PACIFIC STOCK EXCHANGE UNDER THE TRADING SYMBOL "NOC." ANY COMMON STOCK
SOLD PURSUANT TO A PROSPECTUS SUPPLEMENT WILL BE LISTED ON
SUCH EXCHANGES, SUBJECT TO OFFICIAL
NOTICE OF ISSUANCE.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR AD-
EQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL
OFFENSE.
THE SECURITIES WILL BE SOLD DIRECTLY, THROUGH AGENTS, UNDERWRITERS OR DEALERS AS
DESIGNATED FROM TIME TO TIME, OR THROUGH A COMBINATION OF SUCH METHODS. SUCH
UNDERWRITERS MAY INCLUDE CS FIRST BOSTON OR MAY BE A GROUP OF UNDERWRITERS
REPRESENTED BY THE FOREGOING FIRM OR ONE OR MORE OTHER FIRMS. IF AGENTS
OF THE COMPANY OR ANY DEALERS OR UNDERWRITERS ARE INVOLVED IN THE SALE
OF THE SECURITIES IN RESPECT OF WHICH THIS PROSPECTUS IS BEING
DELIVERED, THE NAMES OF SUCH AGENTS, DEALERS OR UNDERWRITERS AND ANY
APPLICABLE COMMISSIONS OR DISCOUNTS ARE SET FORTH IN OR MAY BE
CALCULATED FROM THE PROSPECTUS SUPPLEMENT WITH RESPECT TO SUCH
SECURITIES.
THE DATE OF THIS PROSPECTUS IS , 1994
NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS, THE ACCOMPANYING PROSPECTUS
SUPPLEMENT OR THE DOCUMENTS INCORPORATED OR DEEMED INCORPORATED BY REFERENCE
HEREIN, AND ANY INFORMATION OR REPRESENTATIONS NOT CONTAINED HEREIN OR THEREIN
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR BY ANY
AGENT, DEALER OR UNDERWRITER. THIS PROSPECTUS OR PROSPECTUS SUPPLEMENT DOES NOT
CONSTITUTE AN OFFER TO SELL OR SOLICITATION OF AN OFFER TO BUY THE SECURITIES IN
ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL. THE DELIVERY
OF THIS PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT AT ANY TIME DOES NOT IMPLY THAT
THE INFORMATION HEREIN OR THEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE
DATE OF SUCH INFORMATION.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company has filed with the Securities and Exchange Commission (the
"Commission"), pursuant to Section 13 of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"):
(i) an Annual Report on Form 10-K for the year ended December 31,
1993;
(ii) Quarterly Reports on Form 10-Q for the quarterly periods ended
March 31, 1994 and June 30, 1994;
(iii) Current Reports on Form 8-K dated March 25, 1994 and April 16,
1994;
(iv) Amendment to Current Report on Form 8-K/A dated June 30, 1994;
and
(v) the description of the Common Stock set forth in the Registration
Statement on Form 8-B dated June 20, 1985;
which are hereby incorporated by reference in and made a part of this
Prospectus.
All documents hereafter filed by the Company with the Commission pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the filing of a
post-effective amendment which indicates that all securities offered hereby have
been sold or which deregisters all securities then remaining unsold shall be
deemed to be incorporated by reference in and to be a part of this Prospectus
from the date of filing of such documents. Any statement contained in a document
incorporated by reference or deemed to be incorporated herein shall be deemed to
be modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
This Prospectus may not be used to consummate sales of offered Securities
unless accompanied by a Prospectus Supplement. The delivery of this Prospectus
together with a Prospectus Supplement relating to particular offered Securities
in any jurisdiction shall not constitute an offer in the jurisdiction of any
other securities covered by this Prospectus.
THIS PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE WHICH ARE NOT PRESENTED
HEREIN OR DELIVERED HEREWITH. THESE DOCUMENTS (NOT INCLUDING EXHIBITS TO SUCH
DOCUMENTS, UNLESS SUCH EXHIBITS ARE INCORPORATED BY REFERENCE IN SUCH DOCUMENTS)
ARE AVAILABLE WITHOUT CHARGE UPON WRITTEN OR ORAL REQUEST DIRECTED TO: SHEILA M.
GIBBONS, CORPORATE VICE PRESIDENT AND SECRETARY, NORTHROP GRUMMAN CORPORATION,
1840 CENTURY PARK EAST, LOS ANGELES, CALIFORNIA 90067 (TELEPHONE: (310)
553-6262).
2
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Exchange Act
and in accordance therewith files reports, proxy statements and other
information with the Commission. Such reports, proxy statements and other
information may be inspected and copies may be obtained at the principal office
of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, and at the
following regional offices of the Commission: Northwestern Atrium Center, 500
West Madison Street, Suite 1400, Chicago, Illinois 60661; and 7 World Trade
Center, 13th Floor, New York, New York 10048. Copies of such materials can be
obtained from the Public Reference Section of the Commission, 450 Fifth Street,
N.W., Washington, D.C. 20549, at prescribed rates. Reports, proxy statements and
other information concerning the Company can also be inspected at the offices of
the New York Stock Exchange, Inc. ("NYSE"), 20 Broad Street, New York, New York
10005; and the Pacific Stock Exchange, Inc., 618 South Spring Street, Los
Angeles, California 90014, and 301 Pine Street, San Francisco, California 94104.
Northrop Grumman has filed with the Commission a Registration Statement
(herein, together with all amendments thereto, called the "Registration
Statement") under the Securities Act of 1933, as amended (the "Securities Act"),
with respect to the securities offered hereby. This Prospectus does not contain
all of the information included in the Registration Statement and the exhibits
and schedules thereto. Statements contained in this Prospectus as to the
contents of any contract or other document referred to herein and filed as an
exhibit to the Registration Statement are not necessarily complete, and, in each
instance, reference is made to the copy of such contract or other document filed
as an exhibit to the Registration Statement, each such statement being qualified
in all respects by such reference. For further information with respect to
Northrop Grumman and the securities, reference is hereby made to the
Registration Statement and the exhibits and schedules thereto.
THE COMPANY
Northrop Grumman is an advanced technology company that designs, develops
and manufactures military aircraft, missiles and unmanned aeronautical vehicles,
military and commercial aircraft and assemblies and sophisticated electronic
systems. The Company also provides technical and information services to
civilian and governmental customers.
In May 1994, the Company completed the acquisition of Grumman Corporation
("Grumman") and changed its name to "Northrop Grumman Corporation." Grumman
common stock was acquired for an aggregate purchase price of approximately $2.1
billion. The acquisition was financed by borrowings against credit facilities
aggregating $2.8 billion provided by a syndicate of commercial banks.
If the Company and Grumman had been combined during 1993, sales for that
year would have been approximately $8 billion. The combined Company has
significant experience in the design and manufacture of tactical and strategic
military aircraft with particular expertise in both stealth and naval airframe
technologies. In addition, both Northrop and Grumman have developed leading
technologies in the increasingly important area of military electronic systems.
The Company's experience in the integration of large, complex systems positions
it to be a significant competitor for future aircraft and electronics systems
integration programs.
Northrop Grumman programs include several which are important to current
Department of Defense procurement strategies. Northrop Grumman is the prime
contractor on the B-2 Stealth Bomber, the only bomber program currently in
production; the principal subcontractor on the F/A-18 Hornet Strike fighter, one
of the principal fighter aircraft used by the U.S. Navy as well as numerous
foreign countries; the prime contractor on the E-2C Hawkeye, the U.S. Navy's
principal early warning, command and control aircraft; and the prime contractor
for the JSTARS aircraft radar system, which will be the advanced airborne
surveillance and battle management system for the Air Force and Army. The
Company also participates in the commercial aircraft subassembly market as a
principal subcontractor to The Boeing Company on the 747 jetliner program as
well as providing components for other commercial aircraft.
3
The Company was founded in 1939 and reincorporated in 1985 in Delaware.
Northrop Grumman's executive offices are located at 1840 Century Park East, Los
Angeles, California 90067 and its telephone number is (310) 553-6262.
USE OF PROCEEDS
Except as otherwise described in the applicable Prospectus Supplement, the
net proceeds from the sale of Securities will be used for general corporate
purposes, which may include but are not limited to refinancings of indebtedness,
working capital, capital expenditures and acquisitions.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to fixed charges of the
Company for each of the five years in the period ended December 31, 1993, and
for the three months ended March 31, 1994.
THREE MONTHS
ENDED YEARS ENDED DECEMBER 31,
MARCH 31, -----------------------------------
1994(A) 1993(A) 1992 1991 1990 1989
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9.8 4.1 3.8 3.8 3.8 --
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(a) Pro forma ratio of earnings to fixed charges for 1993 and the quarter ended
March 31, 1994, assuming that the acquisition of Grumman had occurred at
the beginning of the respective periods, would have been 1.8 and 2.6,
respectively.
The ratio of earnings to fixed charges has been computed by dividing
earnings by fixed charges. Earnings consist of income (loss) from continuing
operations before income taxes, and in 1991, the net cumulative effect of
changes in accounting principles, plus fixed charges. Fixed charges consist of
interest on all indebtedness, amortization of debt issuance costs and other fees
and the portion of rental expense deemed to be representative of interest. In
1989, earnings before fixed charges were insufficient to cover fixed charges by
$81 million.
4
DESCRIPTION OF DEBT SECURITIES
The following description sets forth certain general terms and provisions of
the Debt Securities to which any Prospectus Supplement may relate. The
particular terms of the Debt Securities offered by any Prospectus Supplement and
the extent, if any, to which such general provisions may not apply to the Debt
Securities so offered will be described in the Prospectus Supplement relating to
such Debt Securities.
The Senior Debt Securities are to be issued under an Indenture (the "Senior
Indenture"), to be entered into between the Company and Chase Manhattan Bank,
National Association, as trustee. The Subordinated Debt Securities are to be
issued under a separate Indenture (the "Subordinated Indenture"), to be entered
into between the Company and Chase Manhattan Bank, National Association, as
trustee. The Senior Indenture and the Subordinated Indenture are sometimes
referred to collectively as the "Indentures." Copies of the Senior Indenture and
the Subordinated Indenture have been filed as exhibits to the Registration
Statement. Chase Manhattan Bank, National Association, as trustee under the
Senior Indenture or the Subordinated Indenture, as applicable, is referred to
herein as the "Applicable Trustee."
The following summaries of certain provisions of the Senior Debt Securities,
the Subordinated Debt Securities and the Indentures do not purport to be
complete and are subject, and are qualified in their entirety by reference, to
all the provisions of the Indenture applicable to a particular series of Debt
Securities (the "Applicable Indenture"), including the definitions therein of
certain terms. Wherever particular Sections, Articles or defined terms of the
Indentures are referred to, it is intended that such Sections, Articles or
defined terms shall be incorporated by reference herein. Section and Article
references used herein are references to the Applicable Indenture. Capitalized
terms not otherwise defined herein shall have the meanings given to them in the
Applicable Indenture.
GENERAL
The Indentures do not limit the aggregate principal amount of Debt
Securities that may be issued thereunder, and each Indenture provides that Debt
Securities may be issued thereunder from time to time in one or more series.
Unless otherwise specified in the Prospectus Supplement, the Senior Debt
Securities when issued will be unsecured and unsubordinated obligations of the
Company and will rank equally and ratably with all other unsecured and
unsubordinated indebtedness of the Company. The Subordinated Debt Securities
when issued will be subordinated in right of payment to the prior payment in
full of all Senior Indebtedness (as defined in the Subordinated Indenture) of
the Company as described in the Prospectus Supplement applicable to the offering
of Subordinated Debt Securities.
The Indentures do not contain any provisions that would limit the ability of
the Company to incur indebtedness or require the maintenance of financial ratios
or specified levels of net worth or liquidity. However, the provisions of the
Senior Indenture do provide that neither the Company nor any Restricted
Subsidiary (as defined) will subject certain of its property or assets to any
mortgage or other encumbrance unless the Senior Debt Securities issued under the
Senior Indenture are secured equally and ratably with or prior to such other
indebtedness thereby secured and contain certain limitations on the entry into
certain sale and leaseback arrangements. See "Certain Covenants -- Liens, --
Sale and Leaseback Arrangements." In addition, the Indentures do not contain any
provisions which would require the Company to repurchase or redeem or otherwise
modify the terms of any of its Debt Securities upon a change in control or other
events involving the Company which may adversely affect the creditworthiness of
the Debt Securities.
Reference is made to each Prospectus Supplement related to offered Debt
Securities for information with respect to any deletions from, modifications or
additions to the Events of Default or covenants of the Company that are
described below, including any addition of a covenant or other provision
providing event risk or similar protection.
Reference is made to the Prospectus Supplement relating to the particular
series of Debt Securities offered thereby for a description of the following
terms or additional provisions of the Debt Securities: (1) the title of the Debt
Securities; (2) whether the Debt Securities are Senior Debt Securities or
Subordinated Debt Securities; (3) any limit on the aggregate principal amount of
the Debt Securities; (4) the Person to whom any interest on a Debt Security of
such series will be payable, if other than the Person in whose
5
name that Debt Security is registered at the close of business on the Regular
Record Date for such interest; (5) the date or dates on which the principal of
the Debt Securities will be payable; (6) the rate or rates at which the Debt
Securities will bear interest, if any; (7) the date or dates from which any such
interest will accrue and the dates on which any such interest will be payable
and the record dates for such interest payments; (8) the place or places where
the principal of and any premium and interest on the Debt Securities will be
payable; (9) the period or periods within which, the price or prices at which,
and the terms and conditions on which the Debt Securities may be redeemed, in
whole or in part, at the option of the Company; (10) the obligation, if any, of
the Company to redeem or purchase the Debt Securities pursuant to any sinking
fund or analogous provision or at the option of the Holder thereof, and the
period or periods within which, the price or prices at which, and the terms and
conditions of which the Debt Securities will be redeemed or purchased, in whole
or in part, pursuant to such obligation; (11) the terms and conditions, if any,
pursuant to which such Debt Securities are convertible or exchangeable into a
security or securities of the Company; (12) the denominations in which the Debt
Securities will be issuable, if other than denominations of $1,000 and any
integral multiple thereof; (13) if the amount of principal of or any premium or
interest on any Debt Securities may be determined with reference to an index or
pursuant to a formula, the manner in which such amounts will be determined; (14)
if other than the currency of the United States of America, the currency,
currencies or currency units in which the principal of or any premium or
interest on any of the Debt Securities will be payable (and the manner in which
the equivalent thereof in the currency of the United States of America is to be
determined for any purpose, including for the purpose of determining the
principal amount deemed to be Outstanding at any time); (15) if the principal of
or any premium or interest on the Debt Securities is to be payable, at the
election of the Company or the Holder thereof, in one or more currencies or
currency units other than those in which the Debt Securities are stated to be
payable, the currency, currencies or currency units in which payment of any such
amount as to which such election is made will be payable, the periods within
which and the terms and conditions upon which such election is to be made and
the amount so payable (or the manner in which such amount is to be determined);
(16) if other than the entire principal amount thereof, the portion of the
principal amount of any of the Debt Securities which will be payable upon
declaration of acceleration of the maturity thereof; (17) if the principal
amount payable at the Stated Maturity of any of the Debt Securities will not be
determinable as of any one or more dates prior to the Stated Maturity, the
amount which will be deemed to be such principal amount as of any such date for
any purpose, including the principal amount thereof which will be due and
payable upon any maturity other than the Stated Maturity or which will be deemed
to be Outstanding as of any such date (or, in any such case, the manner in which
such deemed principal amount is to be determined); (18) if applicable, that the
Debt Securities, in whole or any specified part, are not subject to the
defeasance or covenant defeasance provisions of the Applicable Indenture
described under "Defeasance and Covenant Defeasance"; (19) whether any of the
Securities will be issuable in whole or in part in the form of one or more
Global Securities; (20) any addition to or change in the Events of Default
applicable to any of the Debt Securities and any change in the right of the
Applicable Trustee or the Holders to declare the principal amount of any of the
Debt Securities due and payable; (21) any addition to or change in the covenants
in the Applicable Indenture; (22) if the Debt Securities are Subordinated Debt
Securities, the subordination provisions and the definition of Senior
Indebtedness which will be applicable to such Subordinated Debt Securities; and
(23) any other terms of the Debt Securities not inconsistent with the provisions
of the Applicable Indenture. (Sections 301 and 901)
Debt Securities may be issued as Original Issue Discount Securities to be
sold at a substantial discount below their principal amount. Certain special
United States federal income tax considerations applicable to Debt Securities
sold at an original issue discount will be described in the Prospectus
Supplement relating thereto. In addition, certain special United States federal
income tax or other considerations applicable to any Debt Securities which are
denominated in a currency or currency unit other than United States dollars may
be described in the applicable Prospectus Supplement relating thereto.
DENOMINATIONS, REGISTRATION, TRANSFER AND PAYMENT
Unless otherwise indicated in the Prospectus Supplement relating thereto,
the Debt Securities will be issued only in fully registered form, without
coupons, and in denominations of $1,000 and integral multiples
6
thereof. (Section 302) No service charge will be made for any registration of
transfer or exchange of Debt Securities, but the Company may require payment of
a sum sufficient to cover any tax or other governmental charge payable in
connection therewith. (Section 305) The Indentures also provide that the Debt
Securities of any series, if so specified with respect to a particular series,
may be issued in permanent global form. See "Global Debt Securities."
Unless otherwise provided in the Prospectus Supplement relating thereto,
principal of and any premium and interest on the Debt Securities will be
payable, and the Debt Securities will be exchangeable and transfers thereof will
be registrable, at the office or agency of the Trustee in the Borough of
Manhattan, The City of New York, except that, at the option of the Company,
interest may be paid by mailing a check to the address of the Person entitled
thereto as it appears in the Security Register. (Sections 202, 305 and 1002)
SUBORDINATION
The Subordinated Debt Securities will be subordinated and junior in right of
payment, to the extent set forth in the applicable Prospectus Supplement, to all
"Senior Indebtedness" of the Company as defined in the applicable Prospectus
Supplement.
EVENTS OF DEFAULT
Unless otherwise specified in the Prospectus Supplement relating to a
particular series of Debt Securities, the following events will constitute an
Event of Default under the Indentures with respect to Debt Securities of any
series: (a) failure to pay principal of or any premium on any Debt Security of
that series when due, whether at maturity or otherwise (in the case of the
Subordinated Indenture, whether or not such payment is prohibited by the
subordination provisions); (b) failure to pay any interest on any Debt Security
of that series when due, and such failure continues for 30 days (in the case of
the Subordinated Indenture, whether or not such payment is prohibited by the
subordination provisions); (c) failure to deposit any sinking fund payment, when
due, in respect of any Debt Security of that series (in the case of the
Subordinated Indenture, whether or not such deposit is prohibited by the
subordination provisions); (d) failure to perform any other covenant or
agreement of the Company for the benefit of holders of Debt Securities in the
Applicable Indenture or such Debt Security (other than a covenant or agreement
included in the Applicable Indenture solely for the benefit of a series other
than that series), continued for 90 days after written notice has been given by
the Applicable Trustee, or the Holders of at least 10% in principal amount of
the Outstanding Debt Securities of that series, as provided in the Applicable
Indenture; and (e) certain events in bankruptcy, insolvency or reorganization;
and (f) any other event of default specifically provided for by the terms of
such series as described in the related Prospectus Supplement. (Section 501)
If an Event of Default (other than an Event of Default described in clause
(e) above) with respect to the Debt Securities of any series at the time
Outstanding shall occur and be continuing, either the Applicable Trustee or the
Holders of at least 25% in aggregate principal amount of the Outstanding Debt
Securities of that series by notice as provided in the Applicable Indenture may
declare the principal amount of the Debt Securities of that series (or, in the
case of any Debt Security that is an Original Issue Discount Security or the
principal amount of which is not then determinable, such portion of the
principal amount of such Debt Security, or such other amount in lieu of such
principal amount, as may be specified in the terms of such Debt Security) to be
due and payable immediately. If an Event of Default described in clause (e)
above with respect to the Debt Securities of any series at the time Outstanding
shall occur, the principal amount of all the Debt Securities of that series (or,
in the case of any such Original Issue Discount Security or other Debt Security,
such specified amount) will automatically, and without any action by the
Applicable Trustee or any Holder, become immediately due and payable. After any
such acceleration, but before a judgment or decree based on acceleration, the
Holders of a majority in aggregate principal amount of the Outstanding Debt
Securities of that series may, under certain circumstances, rescind and annul
such acceleration if all Events of Default, other than the non-payment of
accelerated principal (or other specified amount), have been cured or waived as
provided in the Applicable Indenture. (Section 502) For information as to waiver
of defaults, see "Modification and Waiver."
Subject to the provisions of the Applicable Indenture relating to the duties
of the Applicable Trustee in case an Event of Default shall occur and be
continuing, the Applicable Trustee will be under no obligation to
7
exercise any of its rights or powers under the Applicable Indenture at the
request or direction of any of the Holders, unless such Holders shall have
offered to the Applicable Trustee reasonable indemnity. (Section 603) Subject to
such provisions for the indemnification of the Applicable Trustee, the Holders
of a majority in aggregate principal amount of the Outstanding Debt Securities
of any series will have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Applicable Trustee or
exercising any trust or power conferred on the Applicable Trustee with respect
to the Debt Securities of that series. (Section 512)
No Holder of a Debt Security of any series will have any right to institute
any proceeding with respect to the Applicable Indenture, or for the appointment
of a receiver or a trustee, or for any other remedy thereunder, unless (i) such
Holder had previously given to the Applicable Trustee written notice of a
continuing Event of Default with respect to the Debt Securities of that series,
(ii) the Holders of at least 25% in aggregate principal amount of the
Outstanding Debt Securities of that series have made written request, and such
Holder or Holders have offered reasonable indemnity, to the Applicable Trustee
to institute such proceeding as trustee, and (iii) the Applicable Trustee has
failed to institute such proceeding, and has not received from the Holders of a
majority in aggregate principal amount of the Outstanding Debt Securities of
that series a direction inconsistent with such request, within 60 days after
such notice, request and offer. (Section 507) However, such limitations do not
apply to a suit instituted by a Holder of a Debt Security for the enforcement of
payment of the principal of or any premium or interest on such Debt Security on
or after the applicable due date specified in such Debt Security. (Section 508)
The Company will be required to furnish to the Applicable Trustee annually a
statement by certain of its officers as to whether or not the Company, to their
knowledge, is in default in the performance or observance of any of the terms,
provisions and conditions of the Applicable Indenture and, if so, specifying all
such known defaults. (Section 1004)
CONVERSION RIGHTS
The terms, if any, on which Debt Securities of any series are convertible
into Common Stock or other securities of the Company will be set forth in the
Prospectus Supplement relating thereto. Such terms will include provisions as to
whether conversion is mandatory or at the option of the Holder thereof and may
include provisions pursuant to which the number of shares of Common Stock or
other securities of the Company to be received by the Holders of Debt Securities
would be subject to adjustment.
GLOBAL DEBT SECURITIES
If any Debt Securities of a series are to be issued in global form, the
Prospectus Supplement relating thereto will describe the circumstances, if any,
under which beneficial owners of interests in any such global Debt Security
("Global Security") may exchange such interests for Debt Securities of such
series and of like tenor and principal amount in any authorized form and
denomination. Principal of and any premium and interest on a Global Security
will be payable in the manner described in the Prospectus Supplement relating
thereto. (Sections 204 and 305)
CONSOLIDATION, MERGER AND SALE OF ASSETS
The Company, without the consent of the Holders of any of the Debt
Securities under the Indentures, may consolidate with or merge into, or convey,
transfer or lease its properties and assets substantially as an entirety to, any
Person, and may permit any Person to merge into, or convey, transfer or lease
its properties and assets substantially as an entirety to, the Company, provided
(i) that any successor Person must be a corporation, partnership, trust or other
entity organized and validly existing under the laws of any domestic
jurisdiction and must assume the Company's obligations on the Debt Securities
and under the Indentures, (ii) that after giving effect to the transaction, no
Event of Default, and no event which, after notice or lapse of time or both,
would become an Event of Default, shall have occurred and be continuing and
(iii) that certain other conditions are met. Upon any consolidation or merger
into any other Person or any conveyance, transfer or lease of the Company's
assets substantially as an entirety to any Person, the successor Person will
succeed to, and be substituted for, the Company under the Indentures, and the
Company, except in the case of a lease, will be relieved of all obligations and
covenants under the Indentures and the Debt Securities to the extent it was the
predecessor Person. (Article Eight)
8
CERTAIN COVENANTS
LIMITATIONS ON LIENS. The Company covenants in the Senior Indenture that it
will not create, incur, assume or guarantee, and will not permit any Restricted
Subsidiary to create, incur, assume or guarantee, any indebtedness for borrowed
money ("Debt") secured by a mortgage, security interest, pledge, charge or
similar encumbrance ("Mortgages") upon any Principal Property of the Company or
any Restricted Subsidiary or upon any shares of stock or indebtedness of any
Restricted Subsidiary without equally and ratably securing the Debt Securities.
The foregoing restriction, however, will not apply to (a) Mortgages on property,
shares of stock or indebtedness of any corporation existing at the time such
corporation becomes a Restricted Subsidiary; (b) Mortgages on property existing
at the time of acquisition of such property by the Company or a Restricted
Subsidiary or Mortgages to secure the payment of all or any part of the purchase
price of such property upon the acquisition of such property by the Company or
any Restricted Subsidiary or to secure any Debt incurred prior to, at the time
of, or within 180 days after, the acquisition, completion of construction
(including improvements on an existing property) or commencement of full
operation of such property for the purpose of financing all or any part of the
purchase price thereof, or construction of improvements thereon; (c) Mortgages
to secure Debt of a Restricted Subsidiary owed to the Company or another
Restricted Subsidiary; (d) Mortgages existing at the date of the Indenture; (e)
Mortgages on property of a corporation existing at the time such corporation is
merged into or consolidated with the Company or a Restricted Subsidiary or at
the time of a sale, lease, or other disposition of the properties of a
corporation as an entirety or substantially as an entirety to the Company or a
Restricted Subsidiary; (f) Mortgages on property of the Company or a Restricted
Subsidiary in favor of the United States of America or any State thereof, or any
department, agency, instrumentality or political subdivision thereof, to secure
any payments, including advance or progress payments, pursuant to any contract
or statute or to secure any indebtedness incurred or guaranteed for the purpose
of financing all or any part of the purchase price or the cost of construction
of the property subject to such Mortgages (including, but not limited to,
Mortgages incurred in connection with pollution control bonds, industrial
revenue bonds or similar financings); or (g) extensions, renewals or
replacements of any mortgage referred to in the foregoing clauses (a) through
(f). (Section 1009)
Notwithstanding the restrictions outlined in the preceding paragraph, the
Company or any Restricted Subsidiary will be permitted to create, incur, assume
or guarantee any Debt secured by a Mortgage without equally and ratably securing
the Debt Securities, provided that after giving effect thereto, the aggregate
amount of all debt so secured by Mortgages (not including Mortgages permitted
under clauses (a) through (g) above) does not exceed the greater of $300,000,000
or 10% of Consolidated Net Tangible Assets. (Section 1009)
SALE AND LEASEBACK ARRANGEMENTS. The Company covenants in the Senior
Indenture that it will not, nor will it permit any Restricted Subsidiary to,
enter into any arrangement with any person that provides for the leasing to the
Company or any Restricted Subsidiary of Principal Property (other than any such
transaction involving a lease for a term of not more than three years or any
such transaction between the Company and a Restricted Subsidiary or between
Restricted Subsidiaries) which has been or is to be sold or transferred by the
Company or such Restricted Subsidiary to such person, unless either (a) the
Company or such Restricted Subsidiary would be entitled to create, incur, assume
or guarantee Debt secured by a mortgage on such Principal Property at least
equal in amount to the Attributable Debt with respect to such arrangement,
without equally and ratably securing the Debt Securities, pursuant to the
limitation in the Indenture on liens, provided that such Attributable Debt shall
thereupon be deemed to be Debt subject to the provisions of the second paragraph
under "Certain Covenants -- Limitations on Liens" above or (b) the Company shall
apply an amount equal to the greater of the net proceeds of such sale or the
Attributable Debt with respect to such arrangement to the retirement of Debt
that matures more than twelve months after the creation of such Debt. (Section
1010)
FUNDED DEBT OF RESTRICTED SUBSIDIARIES. The Company covenants in the Senior
Indenture that no Restricted Subsidiary may issue, assume, or guarantee any
Funded Debt unless the aggregate amount of all Funded Debt of all Restricted
Subsidiaries (excluding Funded Debt permitted by clauses (i) through (iii)
below) does not exceed 10% of Consolidated Net Tangible Assets. Such limitation
will not apply to (i) any
9
Funded Debt owed to, or any guaranty of Funded Debt which constitutes an
obligation of, the Company or any other Restricted Subsidiary; (ii) Funded Debt
secured by a Mortgage permitted as described in clauses (a) through (g) under
"Certain Covenants -- Limitations on Liens" above; and (iii) Funded Debt of a
corporation outstanding at the time such corporation first becomes a Restricted
Subsidiary. (Section 1011)
The Subordinated Indenture does not contain any of the foregoing covenants.
DEFINITIONS. The term "Consolidated Net Tangible Assets" shall mean as of
any particular time, the aggregate amount of assets (less applicable reserves
and other properly deductible items) after deducting therefrom (a) all current
liabilities except for (i) notes and loans payable, (ii) current maturities of
long-term debt, (iii) current maturities of obligations under capital leases,
and (iv) deferred income taxes and (b) all goodwill, tradenames, trademarks,
patents, unamortized debt discount and expenses (to the extent included in said
aggregate amount of assets) and other like intangibles, all as set forth on the
most recent quarterly or annual consolidated balance sheet of the Company and
its consolidated Subsidiaries and computed in accordance with generally accepted
accounting principles.
The term "Funded Debt" shall mean any Debt (indebtedness for money borrowed)
or guaranty thereof, whether or not secured, maturing by its terms more than one
year from the date of its creation, including any Debt or guaranty thereof
renewable or extendable at the option of the obligor to a date more than one
year from the date of original issuance thereof, but excluding any portion of
such Debt or guarantee which is included in current liabilities.
The term "Restricted Subsidiary" shall mean any subsidiary of the Company
except any subsidiary substantially all the assets of which are located, or
substantially all of the business of which is carried on, outside of the United
States of America, or any subsidiary substantially all of the assets of which
consists of stock or other securities of such a subsidiary. (Section 101 of the
Senior Indenture)
The term "Principal Property" shall mean any manufacturing plant or
manufacturing facility which is (i) owned by the Company or any Restricted
Subsidiary and (ii) located within the continental United States of America,
except any such plant which, in the opinion of the Board of Directors, is not of
material importance to the total business conducted by the Company and the
Restricted Subsidiaries taken as a whole.
The term "Attributable Debt" when used in connection with a sale and
leaseback transaction referred to above shall mean, at the time of
determination, the lesser of (a) the fair value of such property (as determined
by the Board of Directors of the Company) or (b) the present value (discounted
at the rate implicit in the terms of the relevant lease) of the obligation of
the lessee for net rental payments during the remaining term of the lease
(including any period for which such lease has been extended).
MODIFICATION AND WAIVER
Modifications and amendments of the Senior Indenture and the Subordinated
Indenture may be made by the Company and the Trustee under the Applicable
Indenture, only with the consent of the Holders of a majority in aggregate
principal amount of each series of the outstanding Debt Securities issued under
the Applicable Indenture and affected by such modification or amendment unless a
greater percentage of such aggregate principal amount is specified in the
applicable Prospectus Supplement; provided, however, that no such modification
or amendment may, without the consent of each Holder of such Debt Security
affected thereby, (a) change the Stated Maturity of the principal of, or any
installment of principal of or interest on, any such Debt Security, (b) reduce
the principal amount of, or any premium or interest on, any such Debt Security,
(c) reduce the amount of principal of an Original Issue Discount Security or any
other Debt Security payable upon acceleration of the maturity thereof, (d)
change the place or currency of payment of principal of, or any premium or
interest on, any such Debt Security, (e) impair the right to institute suit for
the enforcement of any payment on or with respect to any such Debt Security, (f)
in the case of the Subordinated Indenture, modify the subordination provisions
in a manner adverse to the Holders of the Subordinated Debt Securities, (g)
reduce the percentage in principal amount of Outstanding Debt Securities of any
series, the consent of whose Holders is required for modification or amendment
of the Applicable Indenture, (h) reduce the percentage in principal amount of
outstanding Debt Securities of any series
10
necessary for waiver of compliance with certain provisions of the Applicable
Indenture or for waiver of certain defaults or (i) modify such provisions with
respect to modification and waiver. (Section 902 of the Indentures and Section
907 of the Subordinated Indenture)
The Holders of a majority in principal amount of the Outstanding Debt
Securities of any series may waive compliance by the Company with certain
restrictive provisions of the Applicable Indenture and, if applicable, such Debt
Securities, unless a greater percentage of such aggregate principal amount is
specified in the applicable Prospectus Supplement. (Section 1008) The Holders of
a majority in principal amount of the Outstanding Debt Securities of any series
may waive any past default under the Applicable Indenture, except a default in
the payment of principal, premium or interest and certain covenants and
provisions of the Applicable Indenture and, if applicable, such Debt Securities
which may not be amended without the consent of the Holder of each Outstanding
Debt Security of such series affected. (Section 513)
OUTSTANDING DEBT SECURITIES
The Indentures provide that in determining whether the Holders of the
requisite principal amount of the Outstanding Debt Securities have given or
taken any direction, notice, consent, waiver or other action under the
Applicable Indenture as of any date, (i) the portion of the principal amount of
an Original Issue Discount Security that will be deemed to be Outstanding for
such purpose will be the amount of the principal thereof that would be due and
payable as of such date upon acceleration of the maturity thereof to such date,
(ii) if, as of such date, the principal amount payable at the Stated Maturity of
a Debt Security is not determinable (for example, because it is based on an
index), the principal amount of such Debt Security deemed to be Outstanding as
of such date will be an amount determined in the manner prescribed for such Debt
Security and (iii) the portion of the principal amount of a Debt Security
denominated in one or more foreign currencies or currency units that will be
deemed to be Outstanding will be the U.S. dollar equivalent, determined as of
such date in the manner prescribed for such Debt Security, of the principal
amount of such Debt Security (or, in the case of a Debt Security described in
clause (i) or (ii) above, of the amount described in such clause). Certain Debt
Securities, including those for whose payment or redemption money has been
deposited or set aside in trust for the Holders and those that have been fully
defeased, will not be deemed to be Outstanding. In addition, Debt Securities
owned by the Company or any of its Affiliates will not be deemed to be
Outstanding. (Section 101)
DEFEASANCE AND COVENANT DEFEASANCE
The Indentures provide that unless the Prospectus Supplement with respect to
a particular series of Debt Securities provides otherwise, the Company may elect
either (A) to defease and be discharged from any and all its obligations with
respect to such Debt Securities (including, in the case of Subordinated Debt
Securities, the subordination provisions which will be described in the
applicable Prospectus Supplement and except for the obligations to exchange or
register the transfer of such Debt Securities, to replace temporary or
mutilated, destroyed, lost or stolen Debt Securities, to maintain an office or
agency with respect to the Debt Securities and to hold moneys for payment in
trust) ("defeasance") or (B) to be released from its obligations with respect to
such Debt Securities concerning restrictive covenants (including, in the case of
Subordinated Debt Securities, the subordination provisions which will be
described in the applicable Prospectus Supplement) which are subject to covenant
defeasance ("covenant defeasance"), and the occurrence of certain Events of
Default, which are described above in clause (d) (with respect to such
restrictive covenants) and clause (e) under "Events of Default" and any that may
be described in the applicable Prospectus Supplement, shall no longer be an
Event of Default, in each case, upon deposit with the Applicable Trustee (or
other qualifying trustee), in trust for such purpose, money or U.S. Government
Obligations, or both (or Foreign Government Obligations (as defined) in the case
of Debt Securities denominated in foreign currencies), which, through the
payment of principal and interest in respect thereof in accordance with their
terms, will provide money in an amount sufficient to pay the principal of and
any premium and interest on such Debt Securities.
As a condition to defeasance or covenant defeasance, the Company must
deliver to the Applicable Trustee an Opinion of Counsel (as specified in the
Applicable Indenture) to the effect that Holders of such Debt Securities will
not recognize gain or loss for federal income tax purposes as a result of such
defeasance
11
or covenant defeasance and will be subject to federal income tax on the same
amounts, in the same manner and at the same times as would have been the case if
such defeasance or covenant defeasance had not occurred. The Company may
exercise its defeasance option with respect to such Debt Securities
notwithstanding its prior exercise of its covenant defeasance option. If the
Company exercises its defeasance option, payment of such Debt Securities may not
be accelerated by reference to the covenants noted under clause (B) above. In
the event the Company omits to comply with its remaining obligations with
respect to such Debt Securities under the Indenture after exercising its
covenant defeasance option and such Debt Securities are declared due and payable
because of the occurrence of any Event of Default, the amount of money and U.S.
Government Obligations (or Foreign Government Obligations in the case of Debt
Securities denominated in foreign currencies) on deposit in the defeasance trust
may be insufficient to pay amounts due on the Debt Securities of such series at
the time of the acceleration resulting from such Event of Default. However, the
Company will remain liable in respect of such payments. (Article Thirteen)
GOVERNING LAW
The Indentures and the Debt Securities will be governed by, and construed in
accordance with, the law of the State of New York, without regard to principles
of conflicts of laws. (Section 112)
REGARDING THE TRUSTEE
Chase Manhattan Bank, National Association, is the Trustee under the Senior
Indenture and the Subordinated Indenture. The Trustee or its affiliates perform
certain commercial banking services for the Company in the ordinary course of
business. The trustee is also a co-agent and lender with respect to the
Company's $2.8 billion credit agreement and may act as an underwriter with
respect to the Securities offered pursuant to a Prospectus Supplement. The
Trustee may be deemed to have a conflicting interest and may be required to
resign as Trustee if at the time of a default under one of the Indentures it is
a creditor of the Company. In addition, the Trustee will be required to resign
as Trustee under one of the Indentures if at the time of default under one
Indenture Debt Securities have been issued under the other Indenture.
Notices should be directed to Corporate Trust Department, 4 Chase MetroTech
Center, Brooklyn, NY 11245.
DESCRIPTION OF PREFERRED STOCK
The following summary contains a description of certain general terms of the
Company's Preferred Stock to which any Prospectus Supplement may relate. Certain
terms of any series of Preferred Stock offered by any Prospectus Supplement will
be described in the Prospectus Supplement relating thereto. If so indicated in
the Prospectus Supplement, the terms of any series may differ from the terms set
forth below. The description of certain provisions of the Company's Preferred
Stock does not purport to be complete and is subject to and qualified in its
entirety by reference to the provisions of the Company's Certificate of
Incorporation, as amended, and the Certificate of Designations (the "Certificate
of Designations") relating to each particular series of Preferred Stock which
will be filed or incorporated by reference, as the case may be, as an exhibit to
the Registration Statement of which this Prospectus is a part at or prior to the
time of the issuance of such Preferred Stock.
GENERAL
Under the Company's Certificate of Incorporation, the Board of Directors of
the Company is authorized, without further stockholder action, to provide for
the issuance of up to 10,000,000 shares of preferred stock, $1 par value (the
"Preferred Stock"). As of the date of this Prospectus the Company has no
Preferred Stock outstanding. The Preferred Stock may be issued in one or more
series, with such designations of titles; dividend rates; any redemption
provisions; special or relative rights in the event of liquidation, dissolution,
distribution or winding up of the Company; any sinking fund provisions; any
conversion provisions; any voting rights thereof; and any other preferences,
privileges, powers, rights, qualifications, limitations and restrictions, as
shall be set forth as and when established by the Board of Directors of the
Company. The shares of any series of Preferred Stock will be, when issued, fully
paid and non-assessable and holders thereof will have no preemptive rights in
connection therewith.
12
The liquidation preference of any series of Preferred Stock is not
necessarily indicative of the price at which shares of such series of Preferred
Stock will actually trade at or after the time of their issuance. The market
price of any series of Preferred Stock can be expected to fluctuate with changes
in market and economic conditions, the financial condition and prospects of the
Company and other factors that generally influence the market price of
securities.
RANK
Any Series of Preferred Stock will, with respect to rights on liquidation,
winding up and dissolution, rank (i) senior to all classes of Common Stock and
to all equity securities issued by the Company, the terms of which specifically
provide that such equity securities will rank junior to such series of Preferred
Stock (the "Junior Liquidation Securities"); (ii) on a parity with all equity
securities issued by the Company, the terms of which specifically provide that
such equity securities will rank on a parity with such series of Preferred Stock
("Parity Liquidation Securities"); and (iii) junior to all equity securities
issued by the Company, the terms of which specifically provide that such equity
securities will rank senior to such series of Preferred Stock (the "Senior
Liquidation Securities"). In addition, any series of Preferred Stock will, with
respect to dividend rights, rank (i) senior to all equity securities issued by
the Company, the terms of which specifically provide that such equity securities
will rank junior to such series of Preferred Stock and, to the extent provided
in the applicable Certificate of Designation, to Common Stock, (ii) on a parity
with all equity securities issued by the Company, the terms of which
specifically provide that such equity securities will rank on a parity with such
series of Preferred Stock and, to the extent provided in the applicable
Certificate of Designation, to Common Stock ("Parity Dividend Securities") and
(iii) junior to all equity securities issued by the Company, the terms of which
specifically provide that such equity securities will rank senior to such series
of Preferred Stock. As used in any Certificate of Designation for these
purposes, the term "equity securities" will not include debt securities
convertible into or exchangeable for equity securities.
DIVIDENDS
Holders of each series of Preferred Stock will be entitled to receive, when,
as and if declared by the Board of Directors of the Company out of funds legally
available therefor, cash dividends at such rates and on such dates as are set
forth in the Prospectus Supplement relating to such series of Preferred Stock.
Dividends will be payable to holders of record of Preferred Stock as they appear
on the books of the Company on such record dates as shall be fixed by the Board
of Directors. Dividends on any series of Preferred Stock may be cumulative or
non-cumulative.
No full dividends may be declared or paid on funds set apart for the payment
of dividends on any series of Preferred Stock unless dividends shall have been
paid or set apart for such payment on the Parity Dividend Securities. If full
dividends are not so paid, such series of Preferred Stock shall share dividends
pro rata with the Parity Dividend Securities.
CONVERSION AND EXCHANGE
The Prospectus Supplement for any series of Preferred Stock will state the
terms, if any, on which shares of that series are convertible into shares of
another series of Preferred Stock or Common Stock or exchangeable for another
series of Preferred Stock, Common Stock or Debt Securities of the Company. The
Common Stock of the Company is described below under "Description of Common
Stock."
REDEMPTION
A series of Preferred Stock may be redeemable at any time, in whole or in
part, at the option of the Company or the holder thereof and may be subject to
mandatory redemption pursuant to a sinking fund or otherwise upon terms and at
the redemption prices set forth in the Prospectus Supplement relating to such
series.
In the event of partial redemptions of Preferred Stock, whether by mandatory
or optional redemption, the shares to be redeemed will be determined by lot or
pro rata, as may be determined by the Board of Directors of the Company, or by
any other method determined to be equitable by the Board of Directors.
On or after a redemption date, unless the Company defaults in the payment of
the redemption price, dividends will cease to accrue on shares of Preferred
Stock called for redemption and all rights of holders of such shares will
terminate except for the right to receive the redemption price.
13
LIQUIDATION PREFERENCE
Upon any voluntary or involuntary liquidation, dissolution or winding up of
the Company, holders of each series of Preferred Stock that ranks senior to the
Junior Liquidation Securities will be entitled to receive out of assets of the
Company available for distribution to shareholders, before any distribution is
made on any Junior Liquidation Securities, including Common Stock, distributions
upon liquidation in the amount set forth in the Prospectus Supplement relating
to such series of Preferred Stock, plus an amount equal to any accrued and
unpaid dividends. If, upon any voluntary or involuntary liquidation, dissolution
or winding up of the Company, the amounts payable with respect to the Preferred
Stock of any series and any other Parity Liquidation Securities are not paid in
full, the holders of the Preferred Stock of such series and the Parity
Liquidation Securities will share ratably in any such distribution of assets of
the Company in proportion to the full liquidation preferences to which each is
entitled. After payment of the full amount of the liquidation preference to
which they are entitled, the holders of such series of Preferred Stock will not
be entitled to any further participation in any distribution of assets of the
Company.
VOTING RIGHTS
Except as indicated in the Prospectus Supplement relating to a particular
series of Preferred Stock or except as expressly required by applicable law, the
holders of shares of Preferred Stock will have no voting rights.
DESCRIPTION OF COMMON STOCK
The Company is authorized to issue 200,000,000 shares of Common Stock. As of
April 30, 1994, 49,137,871 shares of Common Stock were issued and outstanding,
not including shares reserved for issuance under the Company's stock plans. The
Common Stock is listed on the New York Stock Exchange and the Pacific Stock
Exchange.
The holders of Common Stock are entitled to receive such dividends as may be
declared from time to time by the Board of Directors out of funds legally
available therefor. Various credit agreements to which the Company is a party
contain provisions restricting dividends and other distributions and the
purchase or redemption of Common Stock of the Company under certain
circumstances. The holders of Common Stock are entitled to one vote per share on
all matters submitted to a vote of shareholders and do not have cumulative
voting rights. Holders of Common Stock are entitled to receive, upon any
liquidation of the Company, all remaining assets available for distribution to
shareholders after satisfaction of the Company's liabilities and the
preferential rights of any preferred stock that may then be issued and
outstanding. The outstanding shares of Common Stock are, and the shares offered
hereby will be, fully paid and nonassessable. The holders of Common Stock have
no preemptive, conversion or redemption rights. The registrar and transfer agent
for the Common Stock is Chemical Bank of New York.
COMMON STOCK PURCHASE RIGHTS
In 1988, the Company's Board of Directors authorized the distribution of one
Common Stock Purchase Right (a "Right") for each outstanding share of Common
Stock.
As distributed, the Rights trade together with the Common Stock. They may be
exercised or traded separately 10 business days after a person or group of
persons acquires 15% or more of the outstanding Common Stock, or announces the
intention to make a tender offer for 30% or more of the Company's outstanding
Common Stock. Upon exercise, each Right entitles the holder thereof to buy one
share of Common Stock at a price of $105. If a Person acquires 15% of the
outstanding voting power of the Company, each Right (other than those held by
the acquiror) will entitle its holder to purchase, at the Right's exercise
price, shares of Common Stock having a market value of two times the Right's
exercise price. Additionally, if the Company is acquired in a merger or other
business combination, each Right (other than those held by the surviving or
acquiring company) will entitle its holder to purchase, at the Right's exercise
price, shares of the acquiring company's common stock (or Common Stock of the
Company if it is the surviving corporation) having a market value of two times
the Right's exercise price.
14
Rights may be redeemed at the option of the Board of Directors for $0.02 per
Right at any time prior to the earlier of the expiration of the Rights or within
10 days following the date that a person or persons acquire 15 percent of the
general voting power of the Company. The Board may amend the Rights at any time
without stockholder approval. The Rights will expire by their terms in October
1998.
DESCRIPTION OF WARRANTS
The Company may issue Warrants, including Warrants to purchase Debt
Securities ("Debt Warrants"), as well as other types of Warrants to purchase
Securities. Warrants may be issued independently or together with any Securities
and may be attached to or separate from such securities. The Warrants are to be
issued under warrant agreements (each a "Warrant Agreement") to be entered into
between the Company and a bank or trust company, as warrant agent (the "Warrant
Agent"), all as shall be set forth in the Prospectus Supplement relating to
Warrants being offered pursuant thereto.
DEBT WARRANTS
The applicable Prospectus Supplement will describe the terms of Debt
Warrants offered thereby, the Warrant Agreement relating to such Debt Warrants
and the debt warrant certificates representing such Debt Warrants, including the
following: (1) the title of such Debt Warrants; (2) the aggregate number of such
Debt Warrants; (3) the price or prices at which such Debt Warrants will be
issued; (4) the currency or currencies, including composite currencies or
currency units, in which the price of such Debt Warrants may be payable; (5) the
designation, aggregate principal amount and terms of the Debt Securities
purchasable upon exercise of such Debt Warrants, and the procedures and
conditions relating to the exercise of such Debt Warrants; (6) the designation
and terms of any related Debt Securities with which such Debt Warrants are
issued, and the number of such Debt Warrants issued with each such Debt
Security; (7) the currency or currencies, including composite currencies or
currency units, in which the principal of or any premium or interest on the Debt
Securities purchasable upon exercise of such Debt Warrants will be payable; (8)
the date, if any, on and after which such Debt Warrants and the related Debt
Securities will be separately transferable; (9) the principal amount of Debt
Securities purchasable upon exercise of each Debt Warrant, and the price at
which and the currency or currencies, including composite currencies or currency
units, in which such principal amount of Debt Securities may be purchased upon
such exercise; (10) the date on which the right to exercise such Debt Warrants
will commence, and the date on which such right will expire; (11) the maximum or
minimum number of such Debt Warrants which may be exercised at any time; (12) a
discussion of any material federal income tax considerations; and (13) any other
terms of such Debt Warrants and terms, procedures and limitations relating to
the exercise of such Debt Warrants.
Debt warrant certificates will be exchangeable for new debt warrant
certificates of different denominations, and Debt Warrants may be exercised at
the corporate trust office of the Warrant Agent or any other office indicated in
the Prospectus Supplement. Prior to the exercise of their Debt Warrants, holders
of Debt Warrants will not have any of the rights of holders of the Debt
Securities purchasable upon such exercise and will not be entitled to payment of
principal of or any premium or interest on the Debt Securities purchasable upon
such exercise.
OTHER WARRANTS
The Company may issue other Warrants. The applicable Prospectus Supplement
will describe the following terms of any such other Warrants in respect of which
this Prospectus is being delivered: (1) the title of such Warrants; (2) the
Securities (which may include Preferred Stock or Common Stock) for which such
Warrants are exercisable; (3) the price or prices at which such Warrants will be
issued; (4) the currency or currencies, including composite currencies or
currency units, in which the price of such Warrants may be payable; (5) if
applicable, the designation and terms of the Preferred Stock or Common Stock
with which such Warrants are issued, and the number of such Warrants issued with
each such share of Preferred Stock or Common Stock; (6) if applicable, the date
on and after which such Warrants and the related Preferred Stock or Common Stock
will be separately transferable; (7) if applicable, a discussion of any material
federal income tax considerations; and (8) any other terms of such Warrants,
including terms, procedures and limitations relating to the exchange and
exercise of such Warrants.
15
EXERCISE OF WARRANTS
Each Warrant will entitle the holder to purchase for cash such principal
amount of Debt Securities or number of shares of Preferred Stock or Common Stock
at such exercise price as shall in each case be set forth in, or be determinable
as set forth in, the Prospectus Supplement relating to the Warrants offered
thereby. Warrants may be exercised at any time up to the close of business on
the expiration date set forth in the Prospectus Supplement relating to the
Warrants offered thereby. After the close of business on the expiration date,
unexercised Warrants will become void.
Warrants may be exercised as set forth in the Prospectus Supplement relating
to the Warrants offered thereby. Upon receipt of payment and the warrant
certificate properly completed and duly executed at the corporate trust office
of the Warrant Agent or any other office indicated in the Prospectus Supplement,
the Company will, as soon as practicable, forward the Securities purchasable
upon such exercise. If less than all of the Warrants represented by such
warrants certificate are exercised, a new warrant certificate will be issued for
the remaining Warrants.
PLAN OF DISTRIBUTION
The Company may sell the Securities being offered hereby in four ways: (i)
directly to purchasers, (ii) through agents, (iii) through underwriters, and
(iv) through dealers.
If one or more underwriters are used in the sale of Securities, the Company
will execute an underwriting agreement with such underwriters setting forth,
among other things, certain terms of the sale and offering.
The distribution of the Securities may be effected from time to time in one
or more transactions at a fixed price or prices, which may be changed, at market
prices prevailing at the time of sale, at prices related to such prevailing
market prices or at negotiated prices. The Prospectus Supplement will describe
the method of distribution of the Securities.
In connection with the sale of Securities, underwriters and agents may
receive compensation both from the Company, in the form of discounts,
concessions or commissions, and from purchasers of Securities for whom they may
act as agents. The underwriters, agents and dealers that participate in the
distribution of Securities may be deemed to be "underwriters" within the meaning
of, and any discounts or commissions received by them and any profit on the
resale of Securities by them may be deemed to be underwriting discounts and
commissions under, the Securities Act. Any such underwriters or agents will be
identified and any such compensation will be described in the Prospectus
Supplement.
Under agreements which may be entered into by the Company, underwriters,
agents and dealers who participate in the distribution of Securities may be
entitled to indemnification by the Company against or in respect of certain
liabilities, including liabilities under the Securities Act, or to contribution
with respect to payments required to be made in respect thereof.
Certain of the underwriters, dealers and agents and their associates may
engage in transactions with, and perform services for, the Company in the
ordinary course of business.
If so indicated in an applicable Prospectus Supplement, the Company will
authorize underwriters or other persons acting as agents to solicit offers by
certain institutions to purchase Debt Securities or Preferred Stock from the
Company at the public offering price set forth in such Prospectus Supplement
pursuant to Delayed Delivery Contracts ("Contracts") providing for payment and
delivery on the date or dates stated in the applicable Prospectus Supplement.
Each Contract will be for an amount stated in the applicable Prospectus
Supplement. Institutions with whom Contracts, when authorized, may be made
include commercial and savings banks, insurance companies, pension funds,
investment companies, educational and charitable institutions, and other
institutions but will in all cases be subject to the approval of the Company.
Contracts will not be subject to any conditions except that (i) the purchase by
an institution of the Securities covered by its Contracts will not at the time
of delivery be prohibited under the laws of any jurisdiction in the United
States to which such institution is subject and (ii) if the Securities are being
sold to underwriters, the
16
Company will have sold to such underwriters such amount specified in the
applicable Prospectus Supplement. Agents and underwriters will have no
responsibility in respect of the delivery or performance of Contracts. A
commission indicated in the applicable Prospectus Supplement will be paid to
underwriters and agents soliciting purchases of Securities pursuant to Contracts
accepted by the Company.
LEGAL OPINIONS
Unless otherwise indicated in the applicable Prospectus Supplement, certain
legal matters with respect to the legality of the issuance of Securities by the
Company will be passed on by Sheppard, Mullin, Richter & Hampton and Latham &
Watkins, Los Angeles, California, will pass upon certain legal matters in
connection with the Securities on behalf of any underwriters, agents or dealers.
INDEPENDENT AUDITORS
The audited consolidated financial statements and related financial
statement schedules of Northrop Corporation (now named Northrop Grumman
Corporation) and subsidiaries at December 31, 1993 and 1992, and for each of the
five years in the period ended December 31, 1993, appearing in Northrop
Corporation's Annual Report on Form 10-K for the year ended December 31, 1993,
incorporated in the prospectus by reference, have been audited by Deloitte &
Touche, independent accountants, as stated in their report, which is also
incorporated herein by reference. Such consolidated financial statements have
been so incorporated in reliance upon the report of such firm given upon their
authority as experts in accounting and auditing.
The consolidated balance sheet of Grumman Corporation at December 31, 1993
and 1992 and the related consolidated statements of income, shareholders' equity
and cash flows for each of the three years in the period ended December 31,
1993, appearing in Northrop Corporation's Form 8-K dated April 16, 1994,
incorporated herein by this reference, have been audited by Arthur Andersen &
Co., independent public accountants, as indicated in their report with respect
thereto, and are included herein in reliance upon the authority of said firm as
experts in giving said report.
17
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
An itemized statement of the estimated amount of the expenses, other than
underwriting discounts and commissions incurred and to be incurred by the
Company in connection with the issuance and distribution of the Securities
registered pursuant to this registration statement is as follows:
Securities and Exchange Commission filing fee.................... $ 275,862
Printing and engraving expenses..................................
Accounting fees and expenses.....................................
Legal fees and expenses..........................................
Listing fees.....................................................
Fees and expenses of trustee.....................................
Rating agencies' fees............................................
Blue sky fees and expenses and legal fees........................
Miscellaneous....................................................
-----------
Total.......................................................... $
-----------
-----------
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
DELAWARE GENERAL CORPORATION LAW
Section 145 of the Delaware General Corporation Law (the "Act"), and Article
V of the Company's Bylaws relate to the indemnification of the Company's
directors and officers, among others, in a variety of circumstances against
liabilities arising in connection with the performance of their duties.
The Act permits indemnification of directors and officers acting in good
faith and in a manner they reasonably believe to be in or not opposed to the
best interests of the Company or its shareholders (and, with respect to a
criminal proceeding, if they have no reasonable cause to believe their conduct
to be unlawful) against (i) expenses (including attorney's fees), judgments,
penalties, fines and amounts paid in settlement actually and reasonably incurred
in connection with any threatened, pending, or completed action, suit, or
proceeding (other than an action by or in the right of the Company) arising out
of a position with the Company (or with some other entity at the Company's
request) and (ii) expenses (including attorneys' fees) and amounts paid in
settlement actually and reasonably incurred in connection with a threatened,
pending, or completed action or suit by or in the right of the Company, unless
the director or officer is found liable to the Company and an appropriate court
does not determine that he or she is nevertheless fairly and reasonably entitled
to indemnification.
The Act requires indemnification for expenses to the extent that a director
or officer is successful on the merits in defending against any such action,
suit or proceeding, and otherwise requires in general that the indemnification
provided for in (i) and (ii) above be made only on a determination by a majority
vote of a quorum of the Board of Directors who were not parties or threatened to
be made parties to the action, suit or proceeding, or, if a quorum cannot be
obtained, (a) by independent legal counsel, or (b) by the shareholders. In
certain circumstances, the Act further permits advances to cover such expenses
before a final determination that indemnification is permissible, upon receipt
of a written undertaking by or on behalf of the director or officer to repay
such amounts if it shall ultimately be determined that they are not entitled to
indemnification.
Indemnification under the Act is not exclusive of other rights to
indemnification to which a person may be entitled under the Company's
Certificate of Incorporation, Bylaws, or a contractual agreement. The Act
permits the Company to purchase insurance on behalf of its directors and
officers against liabilities arising out of their positions with the Company
whether or not such liabilities would be within the foregoing indemnification
provisions.
II-1
BYLAWS
Under the Company's Bylaws, the Company is required to indemnify any person
who was or is a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the right of the
Company, a "derivative action") and any appeal thereof by reason of the fact
that such person is, was or agreed to become a director or officer of the
Company, against expenses (including attorneys' fees), judgments, penalties,
fines and amounts paid in settlement actually and reasonably incurred by such
person in connection with such action, suit or proceeding to the fullest extent
allowed under Delaware or other applicable state law. The Company shall
indemnify an indemnitee in connection with a suit brought by such indemnitee
only if the proceeding was authorized by the Company or is instituted to enforce
the indemnification rights herein above mentioned. The Company may pay the
expenses (including attorney's fees) incurrerd by any officer, director,
employee or agent who is interviewed, subpoenaed or deposed as a witness, or
otherwise incurs expenses, in connection with any action or proceeding, if it is
determined that such payments will benefit the Company.
The Company's Bylaws provide that the Company shall pay for the expenses
incurred by an indemnified director or officer in defending the proceedings
specified above, in advance of their final disposition, provided that the person
furnishes the Company with an undertaking to reimburse the Company if it is
ultimately determined that such person is not entitled to indemnification. The
Company may provide indemnification at the discretion of the Board of Directors
and on such terms and under such conditions as the Board shall deem appropriate
to any person who is or was serving as an employee or agent. In addition, the
Company may purchase and maintain insurance on behalf of any person who is or
was a director, officer, employee or agent of the Company (or is serving or was
serving at the request of an executive officer the Company in such a position at
a related entity) against any liability asserted against and incurred by such
person in such capacity, or arising out of the person's status as such whether
or not the Company would have the power or the obligation to indemnify such
person against such liability under the provisions of the Company's Bylaws.
ITEM 16. EXHIBITS
1-1 Form of Underwriting Agreement relating to common equity securities.
1-2 Form of Underwriting Agreements relating to preferred equity securities.
1-3 Form of Underwriting Agreement relating to debt securities.
4-1 Restated Certificate of Incorporation.
4-2 Bylaws, as amended.
4-3 Common Stock Purchase Rights Plan (filed as Exhibit 4(a) to Registrants' Form 8-A
dated September 22, 1988).
4-4 Amended and Restated Credit Agreement dated as of April 18, 1994, among the
Company, The Chase Manhattan Bank and Chemical Bank, as co-agents, and various
banks (filed as Exhibit 10 to Registrants' Form 10-Q for the quarterly period
ended March 31, 1994).
4-5 Form of Senior Indenture.
4-6 Form of Subordinated Indenture.
4-7 Form of Warrant Agreement for Debt Securities.
4-8 Form of Warrant Agreement for Equity Securities.
*4-9 Form of Certificate for Common Stock.
4-10 Form of Certificate of Designations of Preferred Stock.
5-1 Opinion of Sheppard, Mullin, Richter & Hampton.
12-1 Computation of Ratio of Earnings to Fixed Charges.
23-1 Consent of Deloitte & Touche LLP, independent auditors.
II-2
23-2 Consent of Arthur Andersen & Co., independent public accountants.
23-3 Consent of Sheppard, Mullin, Richter & Hampton (included in Exhibit 5-1).
24-1 Powers of Attorney.
25-1 Form T-1 Statement of Eligibility and Qualification of Trustee under the Trust
Indenture Act of 1939.
- ------------------------
*To be filed by amendment.
Note: Certain instruments with respect to issues of long-term debt have not been
filed as Exhibits to this statement since the authorized principal amount of any
one of such issues does not exceed 10% of the total assets of the Company on a
consolidated basis as of March 31, 1994. Such indebtedness is described in the
Notes to the Consolidated Financial Statements of the Company.
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes:
(a) to file, during any period in which offers or sales are being made of
the securities registered hereby, a post-effective amendment to this
registration statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) to reflect in the prospectus any fact or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in this
registration statement;
(iii) to include any material information with respect to the plan of
distribution not previously disclosed in this registration statement or any
material change to such information in the registration statement;
provided, however, that the undertakings set forth in the paragraphs (i) and
(ii) above do not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic reports
filed by the registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in this
registration statement.
(b) that, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) to remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
(d) that, for purposes of determining any liability under the Securities Act
of 1933, each filing of the registrant's annual report pursuant to Section 13(a)
or 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each
filing of an employee benefit plan's annual report pursuant to Section 15(d) of
the Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(e) that, insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the provisions described under Item 15
above, or otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in such Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion
II-3
of its counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in such Act and will be governed by the
final adjudication of such issue.
(f) that, for purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part of
this registration statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (a) or
497(h) under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.
(g) that, for purposes of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(h) to file an application for the purposes of determining the eligibility
of the trustee to act under subsection (a) of Section 310 of the Trust Indenture
Act in accordance with the rules and regulations prescribed by the Commission
under Section 305(b)(2) of such Act.
II-4
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Los Angeles, California on August 18, 1994.
NORTHROP GRUMMAN CORPORATION
By: /s/ NELSON F. GIBBS
-----------------------------------
Nelson F. Gibbs
CORPORATE VICE PRESIDENT
AND CONTROLLER
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on dates indicated.
NAME TITLE DATE
- ----------------------------------- ------------------------- ----------------
Chairman of the Board,
/s/ KENT KRESA President and Chief
- ----------------------------------- Executive Officer and August 18, 1994
Kent Kresa* Director (Principal
Executive Officer)
/s/ RICHARD B. WAUGH Corporate Vice President
- ----------------------------------- and Chief Financial August 18, 1994
Richard B. Waugh, Jr.* Officer
Corporate Vice President
/s/ NELSON F. GIBBS and Controller,
- ----------------------------------- Principal Accounting August 18, 1994
Nelson F. Gibbs Officer
/s/ OLIVER C. BOILEAU, JR.
- ----------------------------------- Director August 18, 1994
Oliver C. Boileau, Jr.*
/s/ JACK R. BORSTING
- ----------------------------------- Director August 18, 1994
Jack R. Borsting*
/s/ RENSO L. CAPORALI
- ----------------------------------- Director August 18, 1994
Renso L. Caporali*
/s/ JOHN T. CHAIN, JR.
- ----------------------------------- Director August 18, 1994
John T. Chain, Jr.*
II-5
NAME TITLE DATE
- ----------------------------------- ------------------------- ----------------
/s/ JACK EDWARDS
- ----------------------------------- Director August 18, 1994
Jack Edwards*
/s/ BARBRA C. JORDAN
- ----------------------------------- Director August 18, 1994
Barbra C. Jordan*
/s/ AULANA L. PETERS
- ----------------------------------- Director August 18, 1994
Aulana L. Peters*
/s/ JOHN E. ROBSON
- ----------------------------------- Director August 18, 1994
John E. Robson*
/s/ RICHARD M. ROSENBERG
- ----------------------------------- Director August 18, 1994
Richard M. Rosenberg*
/s/ WILLIAM F. SCHMIED
- ----------------------------------- Director August 18, 1994
William F. Schmied*
/s/ BRENT SCOWCROFT
- ----------------------------------- Director August 18, 1994
Brent Scowcroft*
/s/ JOHN BROOKS SLAUGHTER
- ----------------------------------- Director August 18, 1994
John Brooks Slaughter*
/s/ WALLACE C. SOLBERG
- ----------------------------------- Director August 18, 1994
Wallace C. Solberg*
/s/ RICHARD J. STEGEMEIER
- ----------------------------------- Director August 18, 1994
Richard J. Stegemeier*
*By: /s/ SHEILA M. GIBBONS
- ------------------------------------
Sheila M. Gibbons
Attorney-in-Fact**
** By authority of powers of attorney filed with this registration statement.
II-6
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION PAGE
- ----------- ------------------------------------------------------------------------------------------------- -----
1-1 Form of Underwriting Agreement relating to common equity securities..............................
1-2 Form of Underwriting Agreement relating to preferred equity securities...........................
1-3 Form of Underwriting Agreement relating to debt securities.......................................
4-1 Restated Certificate of Incorporation............................................................
4-2 Bylaws, as amended...............................................................................
4-3 Common Stock Purchase Rights Plan (filed as Exhibit 4(a) to Registrants' Form 8-A dated September
22, 1988).......................................................................................
4-4 Amended and Restated Credit Agreement dated as of April 18, 1994, among the Company, The Chase
Manhattan Bank and Chemical Bank, as co-agents, and various banks (filed as Exhibit 10 to
Registrants' Form 10-Q for the quarterly period ended March 31, 1994)...........................
4-5 Form of Senior Indenture.........................................................................
4-6 Form of Subordinated Indenture...................................................................
4-7 Form of Warrant Agreement for Debt Securities....................................................
4-8 Form of Warrant Agreement for Equity Securities..................................................
*4-9 Form of Certificate for Common Stock.............................................................
4-10 Form of Certificate of Designations of Preferred Stock...........................................
5-1 Opinion of Sheppard, Mullin, Richter & Hampton...................................................
12-1 Computation of Ratio of Earnings to Fixed Charges................................................
23-1 Consent of Deloitte & Touche LLP, independent auditors...........................................
23-2 Consent of Arthur Andersen & Co., independent public accountants.................................
23-3 Consent of Sheppard, Mullin, Richter & Hampton (included in Exhibit 5-1).........................
24-1 Powers of Attorney...............................................................................
25-1 Form T-1 Statement of Eligibility and Qualification of Trustee under the Trust Indenture Act of
1939............................................................................................
- ------------------------
*To be filed by amendment.
Note: Certain instruments with respect to issues of long-term debt have not been
filed as Exhibits to this statement since the authorized principal amount of any
one of such issues does not exceed 10% of the total assets of the Company on a
consolidated basis as of March 31, 1994. Such indebtedness is described in the
Notes to the Consolidated Financial Statements of the Company.
EXHIBIT 1-1
NORTHROP GRUMMAN CORPORATION
COMMON STOCK
[WARRANTS TO PURCHASE COMMON STOCK]
UNDERWRITING AGREEMENT
1. INTRODUCTORY. Northrop Grumman Corporation, a Delaware corporation
("Company"), proposes to issue and sell from time to time [warrants ("Warrants")
to purchase] shares of its ________________ ("Common Stock") (including any
[Warrants] [shares of Common Stock] issued and sold pursuant to the terms of any
over allotment option, if any) registered under the registration statement
referred to in Section 2(a) ("Registered Securities"). Particular offerings of
the Registered Securities will be sold pursuant to a Terms Agreement referred to
in Section 3, for resale in accordance with terms of offering determined at the
time of sale.
The Registered Securities involved in any such offering are hereinafter
referred to as the "Securities". The firm or firms which agree to purchase the
Securities are hereinafter referred to as the "Underwriters" of such Securities,
and the representative or representatives of the Underwriters, if any, specified
in a Terms Agreement referred to in Section 3 are hereinafter referred to as the
"Representatives"; provided, however, that if the Terms Agreement does not
specify any representative of the Underwriters, the term "Representatives", as
used in this Agreement (other than in Sections 2(b), 5(c) and 6 and the second
sentence of Section 3), shall mean the Underwriters.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents
and warrants to, and agrees with, each Underwriter that:
(a) A registration statement (No. 33-__), including a prospectus,
relating to the Registered Securities has been filed with the Securities
and Exchange Commission ("Commission") and has become effective; no order
preventing or suspending the use of such Prospectus has been issued by the
Commission and no proceeding for that purpose has been threatened or
initiated by the Commission. Such registration statement, as amended at
the time of any Terms Agreement referred to in Section 3, is hereinafter
referred to as the "Registration Statement," and the prospectus included in
such Registration Statement, as supplemented as contemplated by Section 3
to reflect the terms of the Securities and the terms of offering thereof,
as first filed with the Commission pursuant to and in accordance with Rule
424(b) ("Rule 424(b)") under the Securities Act of 1933, as amended (the
"Act"), including all material filed pursuant to the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and incorporated by reference
therein, is hereinafter referred to as the "Prospectus."
(b) On the effective date of the registration statement relating to
the Registered Securities, such registration statement conformed in all
respects to the requirements of the Act and the rules and regulations of
the Commission ("Rules and Regulations") and did not include any untrue
statement of a material fact or omit to state any material fact required to
be stated therein or necessary to make the statements therein not
misleading, and on the date of each Terms Agreement referred to in Section
3, the Registration Statement and the Prospectus will conform in all
respects to the requirements of the Act and the Rules and Regulations, and
neither of such documents will include any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not
misleading, except that the foregoing does not apply to statements in or
omissions from any of such documents based upon written information
furnished to the Company by any Underwriter through the Representatives, if
any, specifically for use therein.
(c) The documents incorporated by reference in the Prospectus, when
they became effective or were filed with the Commission, as the case may
be, conformed in all material respects to the requirements of the Act and
the Exchange Act, as applicable, and the Rules and Regulations, and none of
such documents contained an untrue statement of a material fact or omitted
to state a material fact required to be stated therein not necessary to
make the statements therein not misleading.
(d) Each of the Company and its significant subsidiaries (as is
defined in the Act) listed on Schedule A hereto (each, a "Subsidiary" and,
collectively, the "Subsidiaries") has been duly organized, is validly
existing as a corporation in good standing under the laws of its
jurisdiction of organization and has the requisite corporate power and
authority to carry on its business as currently being conducted, to own,
lease and operate its properties, and each is duly qualified and is in good
standing as a foreign corporation authorized to do business in each
jurisdiction where the operation, ownership or leasing of property or the
conduct of its business requires such qualification, except where the
failure to be so qualified would not, singly or in the aggregate, have a
material adverse effect on the properties, business, results of operations,
condition (financial or otherwise), affairs or prospects of the Company and
the Subsidiaries, taken as a whole (a "Material Adverse Effect").
(e) All of the outstanding shares of capital stock of the Company
have been duly authorized and validly issued and are fully paid and non-
assessable, are not subject to any preemptive rights and conform to the
description thereof contained in the Prospectus. All of the issued and
outstanding shares of capital stock of, or other ownership interest in,
each Subsidiary have been duly and validly authorized and issued and are
fully paid and non-assessable and not subject to any preemptive rights, and
all of the shares of capital stock of, or other ownership interests in,
each Subsidiary are owned, directly or through Subsidiaries, by the
Company. Except as set forth in the Prospectus, all such shares of capital
stock are owned free and clear of any security interest, mortgage, pledge,
claim, lien or encumbrance (each, a "Lien"). There are no outstanding
subscriptions, rights, warrants, options, calls, convertible securities,
commitments or sale or Liens related to or entitling any person to purchase
or otherwise to acquire any shares of the capital stock of, or other
ownership interest in, any Subsidiary.
(f) [The Securities have been duly authorized and valdily issued, are
fully paid and nonassessable and free of preemptive rights;] [Upon the
exercise of the Securities and the payment of the exercise price contained
therein, the Common Stock to be issued upon such exercise will be duly
authorized, validly issued, fully paid and non-assessable and free of any
preemptive rights;] the Securities conform to the description thereof
contained in the Prospectus; the stockholders of the Company have no
preemptive rights with respect to the Securities; and the Securities when
so issued, delivered and sold, will conform, to the description thereof
contained in the Prospectus.
(g) The Warrant Agreement by and between the Company and
______________________, as warrant agent (the "Warrant Agreement"), has
been duly authorized and validly executed
2
and delivered by the Company and constitutes a valid and legally binding
agreement of the Company, enforceable against the Company in accordance
with its terms.]
(h) Each of the firms of accountants that has certified or shall
certify the applicable consolidated financial statements and supporting
schedules of the Company and/or Grumman Corporation, as the case may be,
filed or to be filed with the Commission as part of the Registration
Statement and the Prospectus or incorporated by reference therein are
independent public accountants with respect to the Company and the
Subsidiaries, as required by the Act. The consolidated historical and PRO
FORMA financial statements, together with related schedules and notes, set
forth in the Prospectus and the Registration Statement or incorporated by
reference therein comply as to form in all material respects with the
requirements of the Act. Such historical financial statements fairly
present the consolidated financial position of the Company, Grumman
Corporation and the Subsidiaries at the respective dates indicated and the
results of their operations and their cash flows for the respective periods
indicated, in accordance with generally accepted accounting principles
("GAAP") consistently applied throughout such periods. Such PRO FORMA
financial statements have been prepared on the basis consistent with such
historical statements, except for the PRO FORMA adjustments specified
therein, and give effect to assumptions made on a reasonable basis and
present fairly the historical and proposed transactions contemplated by the
Prospectus and this Agreement. The other financial and statistical
information and data included in the Prospectus and in the Registration
Statement, historical and PRO FORMA, are, in all material respects,
accurately presented and prepared on a basis consistent with such financial
statements and the books and records of the Company and Grumman
Corporation.
(i) No holder of any security of the Company has or will have any
right to require the registration of such security by virtue of any
transaction contemplated by this Agreement [or the Warrant Agreement].
(j) The Company has not (i) taken, directly or indirectly, any action
designed to cause or to result in, or that has constituted or which might
reasonably be expected to constitute, the stabilization or manipulation of
the price of any security of the Company to facilitate the sale or resale
of the Securities or (ii) since the initial filing of the Registration
Statement (A) sold, bid for, purchased, or paid anyone any compensation for
soliciting purchases of, the Securities or (B) paid or agreed to pay to any
person any compensation for soliciting another to purchase any other
securities of the Company.
3. PURCHASE AND OFFERING OF SECURITIES. The obligation of the
Underwriters to purchase the Securities will be evidenced by an exchange of
telegraphic or other written communications ("Terms Agreement") at the time the
Company determines to sell the Securities. The Terms Agreement will incorporate
by reference the provisions of this Agreement, except as otherwise provided
therein, and will specify the firm or firms which will be Underwriters, the
names of any Representatives, the number of shares to be purchased by each
Underwriter, the purchase price to be paid by the Underwriters, the amount of
the over allotment option, if any, and the terms of the Securities not already
specified, including, but not limited to dividends. The Terms Agreement will
also specify the time and date of delivery and payment (such time and date, or
such other time not later than seven full business days thereafter as the
Representatives and the Company agree as the time for payment and delivery,
being herein and in the Terms Agreement referred to as the "Closing Date"), the
place of delivery and payment and any details of the terms of offering that
should be reflected in the prospectus supplement relating to the offering of the
Securities. The obligations of
3
the Underwriters to purchase the Securities will be several and not joint. It
is understood that the Underwriters propose to offer the Securities for sale as
set forth in the Prospectus. The Securities delivered to the Underwriters on
the Closing Date will be in definitive, fully registered form, in such
denominations and registered in such names as the Underwriters may request.
4. CERTAIN AGREEMENTS OF THE COMPANY. The Company agrees with the
several Underwriters that it will furnish to Latham & Watkins, counsel for the
Underwriters, one signed copy of the registration statement relating to the
Registered Securities, including all exhibits, in the form it became effective
and of all amendments thereto and that, in connection with each offering of
Securities:
(a) The Company will file the Prospectus with the Commission pursuant
to and in accordance with Rule 424(b)(2) (or, if applicable and if
consented to by the Representatives, subparagraph (5)) not later than the
second business day following the execution and delivery of the Terms
Agreement.
(b) The Company will advise the Representatives promptly of any
proposal to amend or supplement the Registration Statement or the
Prospectus and will afford the Representatives a reasonable opportunity to
comment on any such proposed amendment or supplement; and the Company will
also advise the Representatives promptly of the filing of any such
amendment or supplement and of the institution by the Commission of any
stop order proceedings in respect of the Registration Statement or of any
part thereof and will use its best efforts to prevent the issuance of any
such stop order and to obtain as soon as possible its lifting, if issued.
(c) If, at any time when a prospectus relating to the Securities is
required to be delivered under the Act, any event occurs as a result of
which the Prospectus as then amended or supplemented would include an
untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, or if it is necessary at any
time to amend the Prospectus to comply with the Act, the Company promptly
will prepare and file with the Commission an amendment or supplement which
will correct such statement or omission or an amendment which will effect
such compliance. Neither the Representatives' consent to, nor the
Underwriters' delivery of, any such amendment or supplement shall
constitute a waiver of any of the conditions set forth in Section 5.
(d) As soon as practicable following the issuance and sale of any of
the Registered Securities, the Company will make generally available to its
security holders and to the Representatives an earnings statement or
statements of the Company and its subsidiaries which will comply with the
provisions of Section 11(a) of the Act and Rule 158 under the Act.
(e) The Company will furnish to the Representatives copies of the
Registration Statement, including all exhibits, any related Prospectus, any
related preliminary prospectus supplement, the Prospectus and all
amendments and supplements to such documents, in each case as soon as
available and in such quantities as are reasonably requested.
(f) The Company will arrange for the qualification of the Securities
for sale under the laws of such jurisdictions as the Representatives
designate and will continue such qualifications in effect so long as
required for the distribution.
4
(g) During the period of 5 years after the date of any Terms
Agreement, the Company will furnish to the Representatives and, upon
request, to each of the other Underwriters, if any, as soon as practicable
after the end of each fiscal year a copy of its annual report to
stockholders for such year, and the Company will furnish to the
Representatives (i) as soon as available, a copy of each report or
definitive proxy statement of the Company filed with the Commission under
the Exchange Act or mailed to stockholders, and (ii) from time to time,
such other information concerning the Company as the Representatives may
reasonably request.
(h) The Company will pay all expenses incident to the performance of
its obligations under this Agreement and will reimburse the Underwriters
for any expenses (including fees and disbursements of counsel) incurred by
them in connection with qualification of the Registered Securities for sale
and determination of their eligibility for investment under the laws of
such jurisdictions as the Representatives may designate pursuant to Section
4(f) hereof and the printing of memoranda relating thereto, for any fees
charged by investment rating agencies for the rating of the Securities, for
fees charged by the National Association of Securities Dealers, Inc. and
for expenses incurred in distributing the Prospectus, any preliminary
prospectuses and any preliminary prospectus supplements to Underwriters.
It is understood, however, that, except as provided in this Section,
Section 6 and Section 8 hereof, the Underwriters will pay all of their own
costs and expenses, including the fees of their counsel, transfer taxes on
resale of any of the Securities by them, and any advertising expenses
connected with any offers they may make.
(i) For a period beginning at the time of execution of the Terms
Agreement and ending 90 days after the Closing Date, without the prior
consent of the Representatives, the Company will not offer, sell, contract
to sell or otherwise dispose of any shares of capital stock of the Company.
5. CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITERS. The obligations of
the several Underwriters to purchase and pay for the Securities will be subject
to the accuracy of the representations and warranties on the part of the Company
herein, to the accuracy of the statements of Company officers made pursuant to
the provisions hereof, to the performance by the Company of its obligations
hereunder and to the following additional conditions precedent:
(a) On or prior to the date of the Terms Agreement, the
Representatives shall have received letters, dated the date of delivery
thereof, of Deloitte & Touche L.L.P. and Arthur Andersen, respectively,
confirming that they are independent public accountants within the meaning
of the Act and the applicable published Rules and Regulations thereunder
and stating in effect that:
(i) in their opinion, the consolidated financial statements
and schedules examined by them and incorporated by reference in the
Registration Statement relating to the Registered Securities, as
amended at the date of such letter, comply in form in all material
respects with the applicable accounting requirements of the Act and
the related published Rules and Regulations;
(ii) they have performed procedures specified by the American
Institute of Certified Public Accountants for a review of interim
financial information as described in Statement on Auditing Standards
No. 71, "Interim Financial Information" on the
5
unaudited condensed consolidated financial statements incorporated by
reference in the Registration Statement;
(iii) on the basis of the procedures referred to in (ii) above,
and inquiries of officials of the Company who have responsibility for
financial and accounting matters, nothing came to their attention that
caused them to believe that: any modifications should be made to the
unaudited condensed consolidated financial statements incorporated by
reference in the Registration Statement for them to be in conformity
with generally accepted accounting principles, and such unaudited
condensed financial statements incorporated by reference in the
Registration Statement do not comply in form in all material respects
with the applicable accounting requirements of the Act and the related
published Rules and Regulations;
(iv) on the basis of reading the unaudited pro forma condensed
consolidated statement of earnings for the year ended December 31,
1993 and the six months ended June 30, 1994, incorporated by reference
in the Registration Statement, and inquiries of certain officials of
the Company who have responsibility for financial and accounting
matters, (x) nothing came to their attention that caused them to
believe that such unaudited pro forma condensed consolidated financial
statements do not comply as to form in all material respects with the
applicable accounting requirements of Rule 11-02 of Regulation S-X and
(y) they have proven the arithmetic accuracy of the application of the
pro forma adjustments to the historical amounts in the unaudited pro
forma condensed combined financial statements; and
(v) they have compared specified dollar amounts (or
percentages derived from such dollar amounts) and other financial
information, [including the ratio of earnings to fixed charges,]
contained in such prospectus (in each case to the extent that such
dollar amounts, percentages and other financial information are
derived from the general accounting records of the Company and its
Subsidiaries subject to the internal controls of the Company's
accounting system or are derived directly from such records by
analysis or computation) with the results obtained from inquiries, a
reading of such general accounting records and other procedures
specified in such letter and have found such dollar amounts,
percentages and other financial information to be in agreement with
such results, except as otherwise specified in such letter.
All financial statements and schedules included in material incorporated by
reference into such prospectus shall be deemed included in such prospectus
for purposes of this subsection.
(b) The Prospectus shall have been filed with the Commission in
accordance with the Rules and Regulations and Section 4(a) of this
Agreement. No stop order suspending the effectiveness of the Registration
Statement or of any part thereof shall have been issued and no proceedings
for that purpose shall have been instituted or, to the knowledge of the
Company or any Underwriter, shall be contemplated by the Commission.
(c) Subsequent to the execution of the Terms Agreement, there shall
not have occurred (i) any change, or any development involving a
prospective change, in or affecting particularly the business or properties
of the Company or its Subsidiaries which, in the judgment of a majority in
interest of the Underwriters, including any Representatives, materially
impairs the investment quality of the Securities or the Registered
Securities; (ii) any
6
downgrading in the rating of any debt securities or preferred stock of the
Company by any "nationally recognized statistical rating organization" (as
defined for purposes of Rule 436(g) under the Act), or any public
announcement that any such organization has under surveillance or review
its rating of any debt securities or preferred stock of the Company (other
than an announcement with positive implications of a possible upgrading,
and no implication of a possible downgrading, of such rating); (iii) any
suspension or limitation of trading in securities generally on the New York
Stock Exchange, or any setting of minimum prices for trading on such
exchange, or any suspension of trading of any securities of the Company on
any exchange or in the over-the-counter market; (iv) any banking moratorium
declared by Federal or New York authorities; or (v) any outbreak or
escalation of major hostilities in which the United States is involved, any
declaration of war by Congress or any other substantial national or
international calamity or emergency if, in the judgment of a majority in
interest of the Underwriters, including any Representatives, the effect of
any such outbreak, escalation, declaration, calamity or emergency makes it
impractical or inadvisable to proceed with completion of the sale of and
payment for the Securities.
(d) The Representatives shall have received an opinion, dated the
Closing Date, of Sheppard, Mullin, Richter & Hampton, counsel for the
Company, to the effect that:
(i) Each of the Company and its Subsidiaries has been duly
incorporated and is an existing corporation in good standing under the
laws of the State of its jurisdiction of incorporation, with corporate
power and authority to own its properties and conduct its business as
described in the Prospectus; and, to the best of such counsel's
knowledge, each of the Company and its Subsidiaries is duly qualified
to do business as a foreign corporation in good standing in all other
jurisdictions in which it owns or leases substantial properties or in
which the conduct of its business requires such qualification, except
where the failure to qualify would not have a Material Adverse Effect;
(ii) The Company has authorized capitalization as set forth in
the Prospectus;
(iii) [The Securities have been duly authorized and validly
issued, are fully paid and nonassessable and free of preemptive
rights;] [Upon the exercise of the Securities and the payment of the
exercise price contained therein, the Common Stock to be issued upon
such exercise will be duly authorized, validly issued, fully paid and
non-assessable and free of any preemptive rights;] the Securities
conform to the description thereof contained in the Prospectus; and
the stockholders fo the Company have no preemptive rights with respect
to the Securities;
(iv) To the best of such counsel's knowledge, after due
inquiry, no holder of any security of the Company has any right to
require registration of shares of Common Stock or any other security
of the Company;
(v) No consent, approval, authorization or order of, or
filing with, any governmental agency or body or any court is required
for the consummation of the transactions contemplated by the Terms
Agreement (including the provisions of this Agreement) [or the Warrant
Agreement] in connection with the issuance or sale of the
7
Securities by the Company, except such as have been obtained and made
under the Act and such as may be required under state securities laws;
(vi) The execution, delivery and performance of the Terms
Agreement (including the provisions of this Agreement) [and the
Warrant Agreement] and the issuance and sale of the Securities and
compliance with the terms and provisions thereof will not result in a
breach or violation of any of the terms and provisions of, or
constitute a default under, any Federal, California or Delaware
statute, any rule, regulation or order of any governmental agency
or body or any court having jurisdiction over the Company or any of
its properties or any material agreement or instrument to which the
Company is a party or by which the Company is bound or to which any of
the properties of the Company is subject, or the charter or by-laws of
the Company, and the Company has full power and authority to
authorize, issue and sell the Securities as contemplated by the Terms
Agreement (including the provisions of this Agreement);
(vii) After due inquiry, such counsel does not know of any
legal or governmental proceeding pending or threatened to which the
Company or any of its Subsidiaries is a party or to which any of their
respective property is subject which is required to be described in
the Registration Statement or the Prospectus and is not so described;
(viii) The Registration Statement has become effective under the
Act, the Prospectus was filed with the Commission pursuant to the
subparagraph of Rule 424(b) specified in such opinion on the date
specified therein, and, to the best of the knowledge of such counsel,
no stop order suspending the effectiveness of the Registration
Statement or of any part thereof has been issued and no proceedings
for that purpose have been instituted or are pending or contemplated
under the Act, and the Registration Statement and the Prospectus
(other than the financial statements and notes thereto and supporting
schedules and other financial and statistical information contained
therein as to which such counsel need express no opinion), complied as
to form in all material respects with the requirements of the Act and
the Rules and Regulations; such counsel shall also state that on the
basis of their involvement in the preparation of the Registration
Statement and although they have not verified the accuracy or
completeness of the statements contained therein or in any amendment
thereto, nothing has come to the attention of such counsel which
causes them to believe that the Registration Statement or the
Prospectus (other than the financial statements and notes thereto and
supporting schedules and other financial and statistical information
contained therein) contained any untrue statement of a material fact
or omitted to state any material fact required to be stated therein or
necessary to make the statements therein not misleading; the
descriptions in the Registration Statement and Prospectus of statutes,
legal and governmental proceedings and contracts and other documents
are accurate and fairly present the information required to be shown;
and such counsel do not know of any legal or governmental proceedings
required to be described in the Prospectus which are not described as
required or of any contracts or documents of a character required to
be described in the Registration Statement or Prospectus or to be
filed as exhibits to the Registration Statement which are not
described and filed as required; it being understood that such counsel
need
8
express no opinion as to the financial statements or other financial
data contained in the Registration Statement or the Prospectus; and
(ix) The Terms Agreement (including the provisions of this
Agreement) have been duly authorized, executed and delivered by the
Company.
In rendering such opinion, such counsel shall opine as to the effect of the
federal laws of the United States, the internal laws of the States of
California and New York and the General Corporation Laws of the State of
Delaware. As to matters involving application of the laws of the State of
New York, to the extent specified in such opinion, such counsel may rely on
the opinion of other counsel of good standing believed to be reliable and
who are satisfactory to counsel for the Underwriters.
(e) The Representatives shall have received an opinion, dated the
Closing Date, of Richard R. Molleur, Corporate Vice President and General
Counsel of the Company, to the effect that:
(i) The execution, delivery and performance of the Terms
Agreement (including the provisions of this Agreement) [and the
Warrant Agreement] and the issuance and sale of the Securities and
compliance with the terms and provisions thereof will not result in a
breach or violation of any of the terms and provisions of, or
constitute a default under, any Federal, California or Delaware
statute or any rule, regulation or order of any governmental agency or
body or any court having jurisdiction over the Company or any of its
properties or any material agreement or instrument to which the
Company is a party or by which the Company is bound or to which any of
its properties is subject, or the charter or by laws of the Company,
and the Company has the power and authority to authorize, issue and
sell the Securities as contemplated by the Terms Agreement (including
the provisions of this Agreement); and
(ii) Such counsel does not know of any legal or governmental
proceeding pending or threatened to which the Company or any of its
Subsidiaries is a party or to which any of their respective properties
is subject which is required to be described in the Registration
Statement or the Prospectus and is not so described, or of any
contract or other document which is required to be described in the
Registration Statement or the Prospectus or is required to be filed as
an exhibit to the Registration Statement which is not described or
filed as required.
In rendering such opinion, such counsel shall opine as to the effect of the
federal laws of the United States, the internal laws of the State of
California and the General Corporation Laws of the State of Delaware.
(f) The Representatives shall have received from Latham & Watkins,
counsel for the Underwriters, such opinion or opinions, dated the Closing
Date, with respect to the incorporation of the Company, the validity of the
Securities, the Registration Statement, the Prospectus and other related
matters as they may require, and the Company shall have furnished to such
counsel such documents as they request for the purpose of enabling them to
pass upon such matters.
9
(g) The Representatives shall have received a certificate, dated the
Closing Date, of the President or any Vice-President and a principal
financial or accounting officer of the Company in which such officers, to
the best of their knowledge after reasonable investigation, shall state
that the representations and warranties of the Company in this Agreement
[and the Warrant Agreement] are true and correct, that the Company has
complied with all agreements and satisfied all conditions on its part to be
performed or satisfied hereunder at or prior to the Closing Date, that no
stop order suspending the effectiveness of the Registration Statement or of
any part thereof has been issued and no proceedings for that purpose have
been instituted or are contemplated by the Commission and that, subsequent
to the date of the most recent financial statements in the Prospectus,
there has been no material adverse change in the financial position or
results of operation of the Company and its Subsidiaries except as set
forth in or contemplated by the Prospectus or as described in such
certificate.
(h) The Representatives shall have received letters dated the Closing
Date, of each of Deloitte & Touche L.L.P and Arthur Andersen, which
reconfirms the matters set forth in their letter delivered pursuant to
subsection (a) of this Section and which state in effect that:
(i) in their opinion, the consolidated financial statements
and schedules examined by them and incorporated by reference in the
Registration Statement relating to the Registered Securities, as
amended at the date of such letter, comply in form in all material
respects with the applicable accounting requirements of the Act and
the related published Rules and Regulations;
(ii) they have performed procedures specified by the American
Institute of Certified Public Accountants for a review of interim
financial information as described in Statement on Auditing Standards
No. 71, "Interim Financial Information" on the unaudited condensed
consolidated financial statements incorporated by reference in the
Registration Statement;
(iii) on the basis of the procedures referred to in (ii) above,
and inquiries of officials of the Company who have responsibility for
financial and accounting matters, nothing came to their attention that
caused them to believe that: any modifications should be made to the
unaudited condensed consolidated financial statements incorporated by
reference in the Registration Statement for them to be in conformity
with generally accepted accounting principles, and such unaudited
condensed financial statements incorporated by reference in the
Registration Statement do not comply in form in all material respects
with the applicable accounting requirements of the Act and the related
published Rules and Regulations;
(iv) on the basis of reading the unaudited pro forma condensed
consolidated statement of earnings for the year ended December 31,
1993 and the six months ended June 30, 1994, incorporated by reference
in the Registration Statement, and inquiries of certain officials of
the Company who have responsibility for financial and accounting
matters, (x) nothing came to their attention that caused them to
believe that such unaudited pro forma condensed consolidated financial
statements do not comply as to form in all material respects with the
applicable accounting requirements of Rule 11-02 of Regulation S-X and
(y) they have proven the arithmetic accuracy of the application of the
pro forma adjustments to the historical amounts in the unaudited pro
forma condensed combined financial statements;
10
(v) on the basis of the review referred to in (ii) above, a
reading of the latest available interim financial statements of the
Company, inquiries of officials of the Company who have responsibility
for financial and accounting matters and other specified procedures,
nothing came to their attention that caused them to believe that:
(A) the unaudited financial statements, if any,
included in the Prospectus and not covered by their letter
delivered pursuant to subsection (a) of this Section do not
comply in form in all material respects with the applicable
accounting requirements of the Act and the related published
Rules and Regulations or are not in conformity with generally
accepted accounting principles applied on a basis
substantially consistent with that of the audited financial
statements included in the Prospectus;
(B) the unaudited capsule information, if any,
included in the Prospectus does not agree with the amounts set
forth in the unaudited consolidated financial statements from
which it was derived or was not determined on a basis
substantially consistent with that of the audited financial
statements included in the Prospectus;
(C) at the date of the latest available balance
sheet read by such accountants, or at a subsequent specified
date not more than five days prior to the Closing Date, there
was any change in the capital stock or any increase in
short-term indebtedness or long-term debt of the Company and
consolidated Subsidiaries or, at the date of the latest
available balance sheet read by such accountants, there was
any decrease in consolidated net current assets or net assets,
as compared with amounts shown on the latest balance sheet
included in the Prospectus; or
(D) for the period from the date of the latest
income statement included in the Prospectus to the closing
date of the latest available income statement read by such
accountants there were any decreases, as compared with the
corresponding period of the previous year and with the period
of corresponding length ended the date of the latest income
statement included in the Prospectus, in consolidated net
sales, net operating income, income before extraordinary items
or net income or in the ratio of earnings to fixed charges;
except in all cases set forth in clauses (C) and (D) above for
changes, increases or decreases which the Prospectus discloses have
occurred or may occur or which are described in such letter; and
(vi) they have compared specified dollar amounts (or
percentages derived from such dollar amounts) and other financial
information included in the Prospectus and not covered by their letter
delivered pursuant to subsection (a) of this Section (in each case to
the extent that such dollar amounts, percentages and other financial
information are derived from the general accounting records of the
Company and its Subsidiaries subject to the internal controls of the
Company's accounting system or are derived directly from such records
by analysis or computation) with the results obtained from inquiries,
a reading of such general accounting records and other
11
procedures specified in such letter and have found such dollar
amounts, percentages and other financial information to be in
agreement with such results, except as otherwise specified in such
letter.
All financial statements and schedules included in material incorporated by
reference into the Prospectus shall be deemed included in the Prospectus
for the purposes of this subsection.
The Company will furnish the Representatives with such conformed copies of such
opinions, certificates, letters and documents as they reasonably request.
6. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company will indemnify and hold harmless each Underwriter against
any losses, claims, damages or liabilities, joint or several, to which such
Underwriter may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement, the Prospectus, or any
amendment or supplement thereto, or any related preliminary prospectus or
preliminary prospectus supplement, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
will reimburse each Underwriter for any legal or other expenses reasonably
incurred by such Underwriter in connection with investigating or defending any
such loss, claim, damage, liability or action as such expenses are incurred;
provided, however, that the Company will not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is based
upon an untrue statement or alleged untrue statement in or omission or alleged
omission from any of such documents in reliance upon and in conformity with
written information furnished to the Company by any Underwriter through the
Representatives, if any, specifically for use therein.
(b) Each Underwriter will, severally and not jointly, indemnify and hold
harmless the Company against any losses, claims, damages or liabilities to which
the Company may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement, the Prospectus, or any
amendment or supplement thereto, or any related preliminary prospectus or
preliminary prospectus supplement, or arise out of or are based upon the
omission or the alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, in
each case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with written information furnished to the Company by such
Underwriter through the Representatives, if any, specifically for use therein,
and will reimburse any legal or other expenses reasonably incurred by the
Company in connection with investigating or defending any such loss, claim,
damage, liability or action as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under this Section of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under
subsection (a) or (b) above, notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party will not relieve
it from any liability which it may have to any indemnified party otherwise than
under subsection (a) or (b) above. In case any such action is brought against
any indemnified party and it notifies the indemnify-
12
ing party of the commencement thereof, the indemnifying party will be entitled
to participate therein and, to the extent that it may wish, jointly with any
other indemnifying party similarly notified, to assume the defense thereof, with
counsel reasonably satisfactory to such indemnified party and after notice from
the indemnifying party to such indemnified party of its election so to assume
the defense thereof, the indemnifying party will not be liable to such
indemnified party under this Section for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation. In any such action, any
indemnified party shall have the right to retain its own counsel, but the fees
and expenses of such counsel shall be at the expense of such indemnified party
unless (i) the indemnifying party and the indemnified party shall have mutually
agreed to the retention of such counsel or (ii) the named parties to any such
action (including any impleaded parties) include both the indemnifying party and
the indemnified party and representation of both parties by the same counsel
would be inappropriate due to actual or potential differing interests between
them. It is understood that the indemnifying party shall not, in respect of the
legal expenses of any indemnified party in connection with any action or related
actions in the same jurisdiction, be liable for the fees and expenses of more
than one separate firm (in addition to any local counsel) for all such
indemnified parties and that all such fees and expenses shall be reimbursed as
they are incurred. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened action in respect of which any indemnified party is or could have
been a party and indemnity could have been sought hereunder by such indemnified
party unless such settlement includes an unconditional release of such
indemnified party from all liability on any claims that are the subject matter
of such action.
(d) If the indemnification provided for in this Section is unavailable or
insufficient to hold harmless an indemnified party under subsection (a) or (b)
above, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages or
liabilities referred to in subsection (a) or (b) above (i) in such proportion as
is appropriate to reflect the relative benefits received by the Company on the
one hand and the Underwriters on the other from the offering of the Securities
or (ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Company on the one hand and the Underwriters on the other in connection with
the statements or omissions which resulted in such losses, claims, damages or
liabilities as well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand and the Underwriters
on the other shall be deemed to be in the same proportion as the total net
proceeds from the offering (before deducting expenses) received by the Company
bear to the total underwriting discounts and commissions received by the
Underwriters. The relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Company or the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such untrue statement or omission. The amount paid by an indemnified
party as a result of the losses, claims, damages or liabilities referred to in
the first sentence of this subsection (d) shall be deemed to include any legal
or other expenses reasonably incurred by such indemnified party in connection
with investigating or defending any action or claim which is the subject of this
subsection (d). Notwithstanding the provisions of this subsection (d), no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
13
guilty of such fraudulent misrepresentation. The Underwriters' obligations in
this subsection (d) to contribute are several in proportion to their respective
underwriting obligations and not joint.
(e) The obligations of the Company under this Section shall be in addition
to any liability which the Company may otherwise have and shall extend, upon the
same terms and conditions, to each person, if any, who controls any Underwriter
within the meaning of the Act; and the obligations of the Underwriters under
this Section shall be in addition to any liability which the respective
Underwriters may otherwise have and shall extend, upon the same terms and
conditions, to each director of the Company, to each officer of the Company who
has signed the Registration Statement and to each person, if any, who controls
the Company within the meaning of the Act.
7. DEFAULT OF UNDERWRITERS. If any Underwriter or Underwriters default
in their obligations to purchase Securities under the Terms Agreement and the
number of shares of the Securities that such defaulting Underwriter or
Underwriters agreed but failed to purchase does not exceed 10% of the total
number of shares of the Securities, the Representatives may make arrangements
satisfactory to the Company for the purchase of such Securities by other
persons, including any of the Underwriters, but if no such arrangements are made
by the Closing Date, the non-defaulting Underwriters shall be obligated
severally, in proportion to their respective commitments under this Agreement
and the Terms Agreement, to purchase the Securities that such defaulting
Underwriters agreed but failed to purchase. If any Underwriter or Underwriters
so default and the number of shares of the Securities with respect to which such
default or defaults occur exceeds 10% of the total number of shares of the
Securities and arrangements satisfactory to the Representatives and the Company
for the purchase of such Securities by other persons are not made within 36
hours after such default, such Terms Agreement will terminate without liability
on the part of any nondefaulting Underwriter or the Company, except as provided
in Section 8. As used in this Agreement, the term "Underwriter" includes any
person substituted for an Underwriter under this Section.
The foregoing obligations and agreements set forth in this Section will not
apply if the Terms Agreement specifies that such obligations and agreements will
not apply.
8. SURVIVAL OF CERTAIN REPRESENTATIONS AND OBLIGATIONS. The respective
indemnities, agreements, representations, warranties and other statements of the
Company or its officers and of the several Underwriters set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless of
any investigation, or statement as to the results thereof, made by or on behalf
of any Underwriter, the Company or any of their respective representatives,
officers or directors or any controlling person and will survive delivery of and
payment for the Securities. If the Terms Agreement is terminated pursuant to
Section 7 or if for any reason the purchase of the Securities by the
Underwriters under the Terms Agreement is not consummated, the Company shall
remain responsible for the expenses to be paid or reimbursed by it pursuant to
Section 4 and the respective obligations of the Company and the Underwriters
pursuant to Section 6 shall remain in effect. If the purchase of the Securities
by the Underwriters is not consummated for any reason other than solely because
of the termination of this Agreement pursuant to Section 7 or the occurrence of
any event specified in clause (iii), (iv) or (v) of Section 5(c), the Company
will reimburse the Underwriters for all out-of-pocket expenses (including fees
and disbursements of counsel) reasonably incurred by them in connection with the
offering of the Securities.
9. NOTICES. All communications hereunder will be in writing and, if sent
to the Underwriters, will be mailed, delivered or telegraphed and confirmed to
them at their addresses
14
furnished to the Company in writing for the purpose of communications hereunder
or, if sent to the Company, will be mailed, delivered or telegraphed and
confirmed to it at Northrop Grumman Corporation, 1840 Century Park East, Los
Angeles, California 90067, Attention: _________________.
10. SUCCESSORS. This Agreement will inure to the benefit of and be
binding upon the Company and such Underwriters as are identified in Terms
Agreements and their respective successors and the officers and directors and
controlling persons referred to in Section 6, and no other person will have any
right or obligation hereunder.
11. APPLICABLE LAW. This Agreement and the Terms Agreement shall be
governed by, and construed in accordance with, the laws of the State of New
York.
NORTHROP GRUMMAN CORPORATION
By......................................
Name:
Title:
CS First Boston Corporation
[INSERT NAMES(S) OF OTHER
REPRESENTATIVES OR UNDERWRITERS]
[On behalf of--themselves--itself--and
as Representative[s] of the Several]
[As] Underwriter[s]
[By CS First Boston Corporation]
By......................................
Name:
Title:
15
SCHEDULE A
LIST OF SIGNIFICANT SUBSIDIARIES
EXHIBIT 1-2
NORTHROP GRUMMAN CORPORATION
PREFERRED STOCK
[WARRANTS TO PURCHASE PREFERRED STOCK]
UNDERWRITING AGREEMENT
1. INTRODUCTORY. Northrop Grumman Corporation, a Delaware corporation
("Company"), proposes to issue and sell from time to time [warrants ("Warrants")
to purchase] shares of its preferred stock [(including any shares of preferred
stock issued and sold pursuant to the terms of any over allotment option, if
any)] registered under the registration statement referred to in Section 2(a)
("Registered Securities"). The Registered Securities may be issued in one or
more series, which series may vary as to dividend rates, redemption provisions,
selling prices and other terms, with all such terms for any particular series of
the Registered Securities being determined at the time of sale. Particular
series of the Registered Securities will be sold pursuant to a Terms Agreement
referred to in Section 3, for resale in accordance with terms of offering
determined at the time of sale.
The Registered Securities involved in any such offering are hereinafter
referred to as the "Securities". The firm or firms which agree to purchase the
Securities are hereinafter referred to as the "Underwriters" of such Securities,
and the representative or representatives of the Underwriters, if any, specified
in a Terms Agreement referred to in Section 3 are hereinafter referred to as the
"Representatives"; provided, however, that if the Terms Agreement does not
specify any representative of the Underwriters, the term "Representatives", as
used in this Agreement (other than in Sections 2(b), 5(c) and 6 and the second
sentence of Section 3), shall mean the Underwriters.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents
and warrants to, and agrees with, each Underwriter that:
(a) A registration statement (No. 33-__), including a prospectus,
relating to the Registered Securities has been filed with the Securities
and Exchange Commission ("Commission") and has become effective; no order
preventing or suspending the use of such Prospectus has been issued by the
Commission and no proceeding for that purpose has been threatened or
initiated by the Commission. Such registration statement, as amended at
the time of any Terms Agreement referred to in Section 3, is hereinafter
referred to as the "Registration Statement", and the prospectus included in
such Registration Statement, as supplemented as contemplated by Section 3
to reflect terms of the Securities and the terms of offering thereof, as
first filed with the Commission pursuant to and in accordance with Rule
424(b) ("Rule 424(b)") under the Securities Act of 1933, as amended, (the
"Act"), including all material filed pursuant to the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and incorporated by reference
therein, is hereinafter referred to as the "Prospectus".
(b) On the effective date of the registration statement relating to
the Registered Securities, such registration statement conformed in all
respects to the requirements of the Act and the rules and regulations of
the Commission ("Rules and Regulations") and did not include any untrue
statement of a material fact or omit to state any material fact required to
be stated therein or necessary to make the statements therein not
misleading, and on the date of each Terms Agreement referred to in
Section 3, the Registration Statement and the Prospectus
will conform in all respects to the requirements of the Act and the Rules
and Regulations, and neither of such documents will include any untrue
statement of a material fact or omit to state any material fact required to
be stated therein or necessary to make the statements therein not
misleading, except that the foregoing does not apply to statements in or
omissions from any of such documents based upon written information
furnished to the Company by any Underwriter through the Representatives, if
any, specifically for use therein.
(c) The documents incorporated by reference in the Prospectus, when
they became effective or were filed with the Commission, as the case may
be, conformed in all material respects to the requirements of the Act and
the Exchange Act, as applicable, and the Rules and Regulations, and none of
such documents contained an untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to make
the statements therein not misleading.
(d) Each of the Company and its significant subsidiaries (as defined
in the Act) listed on Schedule A hereto (each, a "Subsidiary" and,
collectively, the "Subsidiaries") has been duly organized, is validly
existing as a corporation in good standing under the laws of its
jurisdiction of organization and has the requisite corporate power and
authority to carry on its business as currently being conducted, to own,
lease and operate its properties, and each is duly qualified and is in good
standing as a foreign corporation authorized to do business in each
jurisdiction where the operation, ownership or leasing of property or the
conduct of its business requires such qualification, except where the
failure to be so qualified would not, singly or in the aggregate, have a
material adverse effect on the properties, business, results of operations,
condition (financial or otherwise), affairs or prospects of the Company and
the Subsidiaries, taken as a whole (a "Material Adverse Effect").
(e) All of the outstanding shares of capital stock of the Company
have been duly authorized and validly issued and are fully paid and non-
assessable, are not subject to any preemptive rights and conform to the
description thereof contained in the Prospectus. All of the issued and
outstanding shares of capital stock of, or other ownership interest in,
each Subsidiary have been duly and validly authorized and issued and are
fully paid and non-assessable and not subject to any preemptive rights, and
all of the shares of capital stock of, or other ownership interests in,
each Subsidiary are owned, directly or through Subsidiaries, by the
Company. Except as set forth in the Prospectus, all such shares of capital
stock are owned free and clear of any security interest, mortgage, pledge,
claim, lien or encumbrance (each, a "Lien"). There are no outstanding
subscriptions, rights, warrants, options, calls, convertible securities,
commitments or sale or Liens related to or entitling any person to purchase
or otherwise to acquire any shares of the capital stock of, or other
ownership interest in, any Subsidiary.
(f) [The Securities have been duly authorized; the Securities other
than any Contract Securities have been validly issued and are fully paid
and nonassessable; any Contract Securities, when issued, delivered and sold
pursuant to Delayed Delivery Contracts, will be validly issued, fully paid
and nonassessable; and the Securities other than any Contract Securities
conform, and any Contract Securities, when so issued, delivered and sold,
will conform, to the description thereof contained in the Prospectus.]
[Upon the exercise of the Securities and the payment of the exercise price
contained therein the Preferred Stock to be issued upon such exercise will
be duly authorized, validly issued, fully paid and non-assessable and free
of any preemptive rights;] the Securities conform to the description
thereof
2
contained in the Prospectus; and the stockholders of the Company have no
preemptive rights with respect to the Securities.
[(g) The Warrant Agreement by and between the Company and
__________________, as warrant agent (the "Warrant Agreement"), has been
duly authorized and validly executed and delivered by the Company and
constitutes a valid and legally binding agreement of the Company,
enforceable against the Company in accordance with its terms.]
(h) Each of the firms of accountants that has certified or shall
certify the applicable consolidated financial statements and supporting
schedules of the Company and/or Grumman Corporation, as the case may be,
filed or to be filed with the Commission as part of the Registration
Statement and the Prospectus or incorporated by reference therein are
independent public accountants with respect to the Company and the
Subsidiaries, as required by the Act. The consolidated historical and PRO
FORMA financial statements, together with related schedules and notes, set
forth in the Prospectus and the Registration Statement or incorporated by
reference therein comply as to form in all material respects with the
requirements of the Act. Such historical financial statements fairly
present the consolidated financial position of the Company, Grumman
Corporation and the Subsidiaries at the respective dates indicated and the
results of their operations and their cash flows for the respective periods
indicated, in accordance with generally accepted accounting principles
("GAAP") consistently applied throughout such periods. Such PRO FORMA
financial statements have been prepared on the basis consistent with such
historical statements, except for the PRO FORMA adjustments specified
therein, and give effect to assumptions made on a reasonable basis and
present fairly the historical and proposed transactions contemplated by the
Prospectus and this Agreement. The other financial and statistical
information and data included in the Prospectus and in the Registration
Statement, historical and PRO FORMA, are, in all material respects,
accurately presented and prepared on a basis consistent with such financial
statements and the books and records of the Company and Grumman
Corporation.
(i) No holder of any security of the Company has or will have any
right to require the registration of such security by virtue of any
transaction contemplated by this Agreement [or the Warrant Agreement].
(j) The Company has not (i) taken, directly or indirectly, any action
designed to cause or to result in, or that has constituted or which might
reasonably be expected to constitute, the stabilization or manipulation of
the price of any security of the Company to facilitate the sale or resale
of the Securities or (ii) since the initial filing of the Registration
Statement (A) sold, bid for, purchased, or paid anyone any compensation for
soliciting purchases of, the Securities or (B) paid or agreed to pay to any
person any compensation for soliciting another to purchase any other
securities of the Company.
3. PURCHASE AND OFFERING OF SECURITIES. The obligation of the
Underwriters to purchase the Securities will be evidenced by an exchange of
telegraphic or other written communications ("Terms Agreement") at the time the
Company determines to sell the Securities. The Terms Agreement will incorporate
by reference the provisions of this Agreement, except as otherwise provided
therein, and will specify the firm or firms which will be Underwriters, the
names of any Representatives, the number of shares to be purchased by each
Underwriter, the purchase price to be paid by the Underwriters, the amount of
the over allotment option, if any, and the terms of the Securities not already
specified, including, but not limited to dividends, any redemption provisions,
3
any sinking fund requirements, any conversion rights and provisions and whether
any of the Securities may be sold to institutional investors pursuant to Delayed
Delivery Contracts (as defined below). The Terms Agreement will also specify
the time and date of delivery and payment (such time and date, or such other
time not later than seven full business days thereafter as the Representatives
and the Company agree as the time for payment and delivery, being herein and in
the Terms Agreement referred to as the "Closing Date"), the place of delivery
and payment and any details of the terms of offering that should be reflected in
the prospectus supplement relating to the offering of the Securities. The
obligations of the Underwriters to purchase the Securities will be several and
not joint. It is understood that the Underwriters propose to offer the
Securities for sale as set forth in the Prospectus. The Securities delivered to
the Underwriters on the Closing Date will be in definitive, fully registered
form, in such denominations and registered in such names as the Underwriters may
request.
If the Terms Agreement provides for sales of Securities pursuant to delayed
delivery contracts, the Company authorizes the Underwriters to solicit offers to
purchase Securities pursuant to delayed delivery contracts substantially in the
form of Annex I attached hereto ("Delayed Delivery Contracts") with such changes
therein as the Company may authorize or approve. Delayed Delivery Contracts are
to be with institutional investors, including commercial and savings banks,
insurance companies, pension funds, investment companies and educational and
charitable institutions. On the Closing Date the Company will pay, as
compensation, to the Representatives for the accounts of the Underwriters, the
fee set forth in such Terms Agreement in respect of the number of shares of
Securities to be sold pursuant to Delayed Delivery Contracts ("Contract
Securities"). The Underwriters will not have any responsibility in respect of
the validity or the performance of Delayed Delivery Contracts. If the Company
executes and delivers Delayed Delivery Contracts, the Contract Securities will
be deducted from the Securities to be purchased by the several Underwriters and
the number of shares of Securities to be purchased by each Underwriter will be
reduced pro rata in proportion to the number of shares of Securities set forth
opposite each Underwriter's name in such Terms Agreement, except to the extent
that the Representatives determine that such reduction shall be otherwise than
pro rata and so advise the Company. The Company will advise the Representatives
not later than the business day prior to the Closing Date of the number of
shares of Contract Securities.
4. CERTAIN AGREEMENTS OF THE COMPANY. The Company agrees with the
several Underwriters that it will furnish to Latham & Watkins, counsel for the
Underwriters, one signed copy of the registration statement relating to the
Registered Securities, including all exhibits, in the form it became effective
and of all amendments thereto and that, in connection with each offering of
Securities:
(a) The Company will file the Prospectus with the Commission pursuant
to and in accordance with Rule 424(b)(2) (or, if applicable and if
consented to by the Representatives, subparagraph (5)) not later than the
second business day following the execution and delivery of the Terms
Agreement.
(b) The Company will advise the Representatives promptly of any
proposal to amend or supplement the Registration Statement or the
Prospectus and will afford the Representatives a reasonable opportunity to
comment on any such proposed amendment or supplement; and the Company will
also advise the Representatives promptly of the filing of any such
amendment or supplement and of the institution by the Commission of any
stop order proceedings in respect of the Registration Statement or of any
part thereof and will use
4
its best efforts to prevent the issuance of any such stop order and to
obtain as soon as possible its lifting, if issued.
(c) If, at any time when a prospectus relating to the Securities is
required to be delivered under the Act, any event occurs as a result of
which the Prospectus as then amended or supplemented would include an
untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, or if it is necessary at any
time to amend the Prospectus to comply with the Act, the Company promptly
will prepare and file with the Commission an amendment or supplement which
will correct such statement or omission or an amendment which will effect
such compliance. Neither the Representatives' consent to, nor the
Underwriters' delivery of, any such amendment or supplement shall
constitute a waiver of any of the conditions set forth in Section 5.
(d) As soon as practicable following the issuance and sale of any of
the Registered Securities, the Company will make generally available to its
security holders and to the Representatives an earnings statement or
statements of the Company and its subsidiaries which will comply with the
provisions of Section 11(a) of the Act and Rule 158 under the Act.
(e) The Company will furnish to the Representatives copies of the
Registration Statement, including all exhibits, any related Prospectus, any
related preliminary prospectus supplement, the Prospectus and all
amendments and supplements to such documents, in each case as soon as
available and in such quantities as are reasonably requested.
(f) The Company will arrange for the qualification of the Securities
for sale under the laws of such jurisdictions as the Representatives
designate and will continue such qualifications in effect so long as
required for the distribution.
(g) During the period of 5 years after the date of any Terms
Agreement, the Company will furnish to the Representatives and, upon
request, to each of the other Underwriters, if any, as soon as practicable
after the end of each fiscal year a copy of its annual report to
stockholders for such year, and the Company will furnish to the
Representatives (i) as soon as available, a copy of each report or
definitive proxy statement of the Company filed with the Commission under
the Exchange Act or mailed to stockholders, and (ii) from time to time,
such other information concerning the Company as the Representatives may
reasonably request.
(h) The Company will pay all expenses incident to the performance of
its obligations under this Agreement and will reimburse the Underwriters
for any expenses (including fees and disbursements of counsel) incurred by
them in connection with qualification of the Registered Securities for sale
and determination of their eligibility for investment under the laws of
such jurisdictions as the Representatives may designate pursuant to Section
4(f) hereof and the printing of memoranda relating thereto, for any fees
charged by investment rating agencies for the rating of the Securities, for
fees charged by the National Association of Securities Dealers, Inc. and
for expenses incurred in distributing the Prospectus, any preliminary
prospectuses and any preliminary prospectus supplements to the
Underwriters. It is understood, however, that, except as provided in this
Section, Section 6 and Section 8 hereof, the Underwriters will pay all of
their own costs and expenses, including
5
the fees of their counsel, transfer taxes on resale of any of the
Securities by them, and any advertising expenses connected with any offers
they may make.
(i) For a period beginning at the time of execution of the Terms
Agreement and ending 90 days after the Closing Date, without the prior
consent of the Representatives, the Company will not offer, sell, contract
to sell or otherwise dispose of any shares of capital stock of the Company.
5. CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITERS. The obligations of
the several Underwriters to purchase and pay for the Securities will be subject
to the accuracy of the representations and warranties on the part of the Company
herein, to the accuracy of the statements of Company officers made pursuant to
the provisions hereof, to the performance by the Company of its obligations
hereunder and to the following additional conditions precedent:
(a) On or prior to the date of the Terms Agreement, the
Representatives shall have received letters, dated the date of delivery
thereof, of Deloitte & Touche and Arthur Andersen, respectively, confirming
that they are independent public accountants within the meaning of the Act
and the applicable published Rules and Regulations thereunder and stating
in effect that:
(i) in their opinion, the consolidated financial statements
and schedules examined by them and incorporated by reference in the
Registration Statement relating to the Registered Securities, as
amended at the date of such letter, comply in form in all material
respects with the applicable accounting requirements of the Act and
the related published Rules and Regulations;
(ii) they have performed procedures specified by the American
Institute of Certified Public Accountants for a review of interim
financial information as described in Statement on Auditing Standards
No. 71, "Interim Financial Information" on the unaudited condensed
consolidated financial statements incorporated by reference in the
Registration Statement;
(iii) on the basis of the procedures referred to in (ii) above,
and inquiries of officials of the Company who have responsibility for
financial and accounting matters, nothing came to their attention that
caused them to believe that: any modifications should be made to the
unaudited condensed consolidated financial statements incorporated by
reference in the Registration Statement for them to be in conformity
with generally accepted accounting principles, and such unaudited
condensed financial statements incorporated by reference in the
Registration Statement do not comply in form in all material respects
with the applicable accounting requirements of the Act and the related
published Rules and Regulations;
(iv) on the basis of reading the unaudited pro forma condensed
consolidated statement of earnings for the year ended December 31,
1993 and the six months ended June 30, 1994, incorporated by reference
in the Registration Statement, and inquiries of certain officials of
the Company who have responsibility for financial and accounting
matters, (x) nothing came to their attention that caused them to
believe that such unaudited pro forma condensed consolidated financial
statements do not comply as to form in all material respects with the
applicable accounting requirements
6
of Rule 11-02 of Regulation S-X and (y) they have proven the
arithmetic accuracy of the application of the pro forma adjustments to
the historical amounts in the unaudited pro forma condensed combined
financial statements; and
(v) they have compared specified dollar amounts (or
percentages derived from such dollar amounts) and other financial
information[, including the ratio of earnings to fixed charges,]
contained in such prospectus (in each case to the extent that such
dollar amounts, percentages and other financial information are
derived from the general accounting records of the Company and its
Subsidiaries subject to the internal controls of the Company's
accounting system or are derived directly from such records by
analysis or computation) with the results obtained from inquiries, a
reading of such general accounting records and other procedures
specified in such letter and have found such dollar amounts,
percentages and other financial information to be in agreement with
such results, except as otherwise specified in such letter.
All financial statements and schedules included in material incorporated by
reference into such prospectus shall be deemed included in such prospectus
for purposes of this subsection.
(b) The Prospectus shall have been filed with the Commission in
accordance with the Rules and Regulations and Section 4(a) of this
Agreement. No stop order suspending the effectiveness of the Registration
Statement or of any part thereof shall have been issued and no proceedings
for that purpose shall have been instituted or, to the knowledge of the
Company or any Underwriter, shall be contemplated by the Commission.
(c) Subsequent to the execution of the Terms Agreement, there shall
not have occurred (i) any change, or any development involving a
prospective change, in or affecting particularly the business or properties
of the Company or its Subsidiaries which, in the judgment of a majority in
interest of the Underwriters, including any Representatives, materially
impairs the investment quality of the Securities or the Registered
Securities; (ii) any downgrading in the rating of any debt securities or
preferred stock of the Company by any "nationally recognized statistical
rating organization" (as defined for purposes of Rule 436(g) under the
Act), or any public announcement that any such organization has under
surveillance or review its rating of any debt securities or preferred stock
of the Company (other than an announcement with positive implications of a
possible upgrading, and no implication of a possible downgrading, of such
rating); (iii) any suspension or limitation of trading in securities
generally on the New York Stock Exchange, or any setting of minimum prices
for trading on such exchange, or any suspension of trading of any
securities of the Company on any exchange or in the over-the-counter
market; (iv) any banking moratorium declared by Federal or New York
authorities; or (v) any outbreak or escalation of major hostilities in
which the United States is involved, any declaration of war by Congress or
any other substantial national or international calamity or emergency if,
in the judgment of a majority in interest of the Underwriters, including
any Representatives, the effect of any such outbreak, escalation,
declaration, calamity or emergency makes it impractical or inadvisable to
proceed with completion of the sale of and payment for the Securities.
(d) The Representatives shall have received an opinion, dated the
Closing Date, of Sheppard, Mullin, Richter & Hampton, counsel for the
Company, to the effect that:
7
(i) Each of the Company and its Subsidiaries has been duly
incorporated and is an existing corporation in good standing under the
laws of the State of its jurisdiction of incorporation, with corporate
power and authority to own its properties and conduct its business as
described in the Prospectus; and, to the best of such counsel's
knowledge, each of the Company and its Subsidiaries is duly qualified
to do business as a foreign corporation in good standing in all other
jurisdictions in which it owns or leases substantial properties or in
which the conduct of its business requires such qualification, except
where the failure to qualify would not have a Material Adverse Effect;
(ii) The Company has authorized capitalization as set forth in
the Prospectus;
(iii) To the best of such counsel's knowledge, after due
inquiry, no holder of any security of the Company has any right to
require registration of shares of Common Stock or any other security
of the Company;
(iv) [The Securities have been duly authorized; the Securities
other than any Contract Securities have been validly issued and are
fully paid and nonassessable; any Contract Securities, when issued,
delivered and sold pursuant to Delayed Delivery Contracts, will be
validly issued, fully paid and nonassessable; and the Securities other
than any Contract Securities conform, and any Contract Securities,
when so issued, delivered and sold, will conform, to the description
thereof contained in the Prospectus.] [Upon the exercise of the
Securities and the payment of the exercise price contained therein the
Preferred Stock to be issued upon such exercise will be duly
authorized, validly issued, fully paid and non-assessable and free of
any preemptive rights;] the Securities conform to the description
thereof contained in the Prospectus; and the stockholders of the
Company have no preemptive rights with respect to the Securities.
(v) No consent, approval, authorization or order of, or
filing with, any governmental agency or body or any court is required
for the consummation of the transactions contemplated by the Terms
Agreement (including the provisions of this Agreement) [or the Warrant
Agreement] in connection with the issuance or sale of the Securities
by the Company, except such as have been obtained and made under the
Act and such as may be required under state securities laws;
(vi) The execution, delivery and performance of the Terms
Agreement (including the provisions of this Agreement) [, the Warrant
Agreement] and any Delayed Delivery Contracts and the issuance and
sale of the Securities and compliance with the terms and provisions
thereof will not result in a breach or violation of any of the terms
and provisions of, or constitute a default under, any Federal,
California or Delaware statute or any rule, regulation or
order of any governmental agency or body or any court having
jurisdiction over the Company or any of its properties or any material
agreement or instrument to which the Company is a party or by which
the Company is bound or to which any of the properties of the Company
is subject, or the charter or by-laws of the Company, and the Company
has the power and authority to authorize, issue and sell the
Securities as contemplated by the Terms Agreement (including the
provisions of this Agreement);
8
(vii) After due inquiry, such counsel does not know of any
legal or governmental proceeding pending or threatened to which the
Company or any of its Subsidiaries is a party or to which any of their
respective property is subject which is required to be described in
the Registration Statement or the Prospectus and is not so described;
(viii) The Registration Statement has become effective under the
Act, the Prospectus was filed with the Commission pursuant to the
subparagraph of Rule 424(b) specified in such opinion on the date
specified therein, and, to the best of the knowledge of such counsel,
no stop order suspending the effectiveness of the Registration
Statement or of any part thereof has been issued and no proceedings
for that purpose have been instituted or are pending or contemplated
under the Act, and the Registration Statement and the Prospectus
(other than the financial statements and notes thereto and supporting
schedules and other financial and statistical information contained
therein as to which such counsel need express no opinion) complied as
to form in all material respects with the requirements of the Act and
the Rules and Regulations; such counsel shall also state that on the
basis of their involvement in the preparation of the Registration
Statement and although they have not verified the accuracy or
completeness of the statements contained therein or in any amendment
thereto, nothing has come to the attention of such counsel which
causes them to believe that the Registration Statement or the
Prospectus contained any untrue statement of a material fact or
omitted to state any material fact required to be stated therein or
necessary to make the statements therein not misleading; the
descriptions in the Registration Statement and Prospectus of statutes,
legal and governmental proceedings and contracts and other documents
are accurate and fairly present the information required to be shown;
and such counsel do not know of any legal or governmental proceedings
required to be described in the Prospectus which are not described as
required or of any contracts or documents of a character required to
be described in the Registration Statement or Prospectus or to be
filed as exhibits to the Registration Statement which are not
described and filed as required; it being understood that such counsel
need express no opinion as to the financial statements or other
financial data contained in the Registration Statement or the
Prospectus; and
(ix) The Terms Agreement (including the provisions of this
Agreement) and any Delayed Delivery Contracts have been duly
authorized, executed and delivered by the Company.
In rendering such opinion, such counsel shall opine as to the effect of the
federal laws of the United States, the internal laws of the States of
California and New York and the General Corporation Laws of the State of
Delaware. As to matters involving application of the laws of the State of
New York, to the extent specified in such opinion, such counsel may rely on
the opinion of other counsel of good standing believed to be reliable and
who are satisfactory to counsel for the Underwriters.
(e) The Representatives shall have received an opinion, dated the
Closing Date, of Richard R. Molleur, Corporate Vice President and General
Counsel of the Company, to the effect that:
9
(i) The execution, delivery and performance of the Terms
Agreement (including the provisions of this Agreement) [, the Warrant
Agreement] and any Delayed Delivery Contracts and the issuance and
sale of the Securities and compliance with the terms and provisions
thereof will not result in a breach or violation of any of the terms
and provisions of, or constitute a default under, any Federal,
California or Delaware statute or any rule, regulation or order of any
governmental agency or body or any court having jurisdiction over the
Company or any of its properties or any material agreement or
instrument to which the Company is a party or by which the Company is
bound or to which any of its properties is subject, or the charter or
by-laws of the Company, and the Company has the power and authority to
authorize, issue and sell the Securities as contemplated by the Terms
Agreement (including the provisions of this Agreement); and
(ii) Such counsel does not know of any legal or governmental
proceeding pending or threatened to which the Company or any of its
Subsidiaries is a party or to which any of their respective properties
is subject which is required to be described in the Registration
Statement or the Prospectus and is not so described, or of any
contract or other document which is required to be described in the
Registration Statement or the Prospectus or is required to be filed as
an exhibit to the Registration Statement which is not described or
filed as required.
In rendering such opinion, such counsel shall opine as to the effect of the
federal laws of the United States, the internal laws of the State of
California and the General Corporation Laws of the State of Delaware.
(f) The Representatives shall have received from Latham & Watkins,
counsel for the Underwriters, such opinion or opinions, dated the Closing
Date, with respect to the incorporation of the Company, the validity of the
Securities, the Registration Statement, the Prospectus and other related
matters as they may require, and the Company shall have furnished to such
counsel such documents as they request for the purpose of enabling them to
pass upon such matters.
(g) The Representatives shall have received a certificate, dated the
Closing Date, of the President or any Vice-President and a principal
financial or accounting officer of the Company in which such officers, to
the best of their knowledge after reasonable investigation, shall state
that the representations and warranties of the Company in this Agreement
[and the Warrant Agreement] are true and correct, that the Company has
complied with all agreements and satisfied all conditions on its part to be
performed or satisfied hereunder at or prior to the Closing Date, that no
stop order suspending the effectiveness of the Registration Statement or of
any part thereof has been issued and no proceedings for that purpose have
been instituted or are contemplated by the Commission and that, subsequent
to the date of the most recent financial statements in the Prospectus,
there has been no material adverse change in the financial position or
results of operation of the Company and its Subsidiaries except as set
forth in or contemplated by the Prospectus or as described in such
certificate.
(h) The Representatives shall have received letters, dated the
Closing Date, of each of Deloitte & Touche L.L.P. and Arthur Andersen,
which reconfirm the matters set forth in their letter delivered pursuant to
subsection (a) of this Section and which state in effect that:
10
(i) in their opinion, the consolidated financial statements
and schedules examined by them and incorporated by reference in the
Registration Statement relating to the Registered Securities, as
amended at the date of such letter, comply in form in all material
respects with the applicable accounting requirements of the Act and
the related published Rules and Regulations;
(ii) they have performed procedures specified by the American
Institute of Certified Public Accountants for a review of interim
financial information as described in Statement on Auditing Standards
No. 71, "Interim Financial Information" on the unaudited condensed
consolidated financial statements incorporated by reference in the
Registration Statement;
(iii) on the basis of the procedures referred to in (ii) above,
and inquiries of officials of the Company who have responsibility for
financial and accounting matters, nothing came to their attention that
caused them to believe that: any modifications should be made to the
unaudited condensed consolidated financial statements incorporated by
reference in the Registration Statement for them to be in conformity
with generally accepted accounting principles, and such unaudited
condensed financial statements incorporated by reference in the
Registration Statement do not comply in form in all material respects
with the applicable accounting requirements of the Act and the related
published Rules and Regulations;
(iv) on the basis of reading the unaudited pro forma condensed
consolidated statement of earnings for the year ended December 31,
1993 and the six months ended June 30, 1994, incorporated by reference
in the Registration Statement, and inquiries of certain officials of
the Company who have responsibility for financial and accounting
matters, (x) nothing came to their attention that caused them to
believe that such unaudited pro forma condensed consolidated financial
statements do not comply as to form in all material respects with the
applicable accounting requirements of Rule 11-02 of Regulation S-X and
(y) they have proven the arithmetic accuracy of the application of the
pro forma adjustments to the historical amounts in the unaudited pro
forma condensed combined financial statements;
(v) on the basis of the review referred to in (ii) above, a
reading of the latest available interim financial statements of the
Company, inquiries of officials of the Company who have responsibility
for financial and accounting matters and other specified procedures,
nothing came to their attention that caused them to believe that:
(A) the unaudited financial statements, if any,
included in the Prospectus and not covered by their letter
delivered pursuant to subsection (a) of this Section do not
comply in form in all material respects with the applicable
accounting requirements of the Act and the related published
Rules and Regulations or are not in conformity with generally
accepted accounting principles applied on a basis
substantially consistent with that of the audited financial
statements included in the Prospectus;
(B) the unaudited capsule information, if any,
included in the Prospectus does not agree with the amounts set
forth in the unaudited consolidated financial statements from
which it was derived or was not
11
determined on a basis substantially consistent with that of
the audited financial statements included in the Prospectus;
(C) at the date of the latest available balance
sheet read by such accountants, or at a subsequent specified
date not more than five days prior to the Closing Date, there
was any change in the capital stock or any increase in
short-term indebtedness or long-term debt of the Company and
consolidated Subsidiaries or, at the date of the latest
available balance sheet read by such accountants, there was
any decrease in consolidated net current assets or net assets,
as compared with amounts shown on the latest balance sheet
included in the Prospectus; or
(D) for the period from the date of the latest
income statement included in the Prospectus to the closing
date of the latest available income statement read by such
accountants there were any decreases, as compared with the
corresponding period of the previous year and with the period
of corresponding length ended the date of the latest income
statement included in the Prospectus, in consolidated net
sales, net operating income, income before extraordinary items
or net income or in the ratio of earnings to fixed charges and
preferred stock dividends combined;
except in all cases set forth in clauses (C) and (D) above for
changes, increases or decreases which the Prospectus discloses have
occurred or may occur or which are described in such letter; and
(vi) they have compared specified dollar amounts (or
percentages derived from such dollar amounts) and other financial
information included in the Prospectus and not covered by their letter
delivered pursuant to subsection (a) of this Section (in each case to
the extent that such dollar amounts, percentages and other financial
information are derived from the general accounting records of the
Company and its Subsidiaries subject to the internal controls of the
Company's accounting system or are derived directly from such records
by analysis or computation) with the results obtained from inquiries,
a reading of such general accounting records and other procedures
specified in such letter and have found such dollar amounts,
percentages and other financial information to be in agreement with
such results, except as otherwise specified in such letter.
All financial statements and schedules included in material incorporated by
reference into the Prospectus shall be deemed included in the Prospectus
for the purposes of this subsection.
The Company will furnish the Representatives with such conformed copies of such
opinions, certificates, letters and documents as they reasonably request.
6. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company will indemnify and hold harmless each Underwriter against
any losses, claims, damages or liabilities, joint or several, to which such
Underwriter may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of any
12
material fact contained in the Registration Statement, the Prospectus, or any
amendment or supplement thereto, or any related preliminary prospectus or
preliminary prospectus supplement, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
will reimburse each Underwriter for any legal or other expenses reasonably
incurred by such Underwriter in connection with investigating or defending any
such loss, claim, damage, liability or action as such expenses are incurred;
provided, however, that the Company will not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is based
upon an untrue statement or alleged untrue statement in or omission or alleged
omission from any of such documents in reliance upon and in conformity with
written information furnished to the Company by any Underwriter through the
Representatives, if any, specifically for use therein.
(b) Each Underwriter will, severally and not jointly, indemnify and hold
harmless the Company against any losses, claims, damages or liabilities to which
the Company may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement, the Prospectus, or any
amendment or supplement thereto, or any related preliminary prospectus or
preliminary prospectus supplement, or arise out of or are based upon the
omission or the alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, in
each case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with written information furnished to the Company by such
Underwriter through the Representatives, if any, specifically for use therein,
and will reimburse any legal or other expenses reasonably incurred by the
Company in connection with investigating or defending any such loss, claim,
damage, liability or action as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under this Section of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under
subsection (a) or (b) above, notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party will not relieve
it from any liability which it may have to any indemnified party otherwise than
under subsection (a) or (b) above. In case any such action is brought against
any indemnified party and it notifies the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate therein and, to
the extent that it may wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel reasonably satisfactory to
such indemnified party, and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party under this
Section for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation. In any such action, any indemnified party shall have
the right to retain its own counsel, but the fees and expenses of such counsel
shall be at the expense of such indemnified party unless (i) the indemnifying
party and the indemnified party shall have mutually agreed to the retention of
such counsel or (ii) the named parties to any such action (including any
impleaded parties) include both the indemnifying party and the indemnified party
and representation of both parties by the same counsel would be inappropriate
due to actual or potential differing interests between them. It is understood
that the indemnifying party shall not, in respect of the legal expenses of any
indemnified party in connection with any action or related actions in the same
jurisdiction, be liable for the fees and expenses of more than one separate firm
(in addition to any local counsel) for all such indemnified parties and that all
such fees and expenses shall be
13
reimbursed as they are incurred. No indemnifying party shall, without the prior
written consent of the indemnified party, effect any settlement of any pending
or threatened action in respect of which any indemnified party is or could have
been a party and indemnity could have been sought hereunder by such indemnified
party unless such settlement includes an unconditional release of such
indemnified party from all liability on any claims that are the subject matter
of such action.
(d) If the indemnification provided for in this Section is unavailable or
insufficient to hold harmless an indemnified party under subsection (a) or (b)
above, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages or
liabilities referred to in subsection (a) or (b) above (i) in such proportion as
is appropriate to reflect the relative benefits received by the Company on the
one hand and the Underwriters on the other from the offering of the Securities
or (ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Company on the one hand and the Underwriters on the other in connection with
the statements or omissions which resulted in such losses, claims, damages or
liabilities as well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand and the Underwriters
on the other shall be deemed to be in the same proportion as the total net
proceeds from the offering (before deducting expenses) received by the Company
bear to the total underwriting discounts and commissions received by the
Underwriters. The relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Company or the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such untrue statement or omission. The amount paid by an indemnified
party as a result of the losses, claims, damages or liabilities referred to in
the first sentence of this subsection (d) shall be deemed to include any legal
or other expenses reasonably incurred by such indemnified party in connection
with investigating or defending any action or claim which is the subject of this
subsection (d). Notwithstanding the provisions of this subsection (d), no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations in
this subsection (d) to contribute are several in proportion to their respective
underwriting obligations and not joint.
(e) The obligations of the Company under this Section shall be in addition
to any liability which the Company may otherwise have and shall extend, upon the
same terms and conditions, to each person, if any, who controls any Underwriter
within the meaning of the Act; and the obligations of the Underwriters under
this Section shall be in addition to any liability which the respective
Underwriters may otherwise have and shall extend, upon the same terms and
conditions, to each director of the Company, to each officer of the Company who
has signed the Registration Statement and to each person, if any, who controls
the Company within the meaning of the Act.
7. DEFAULT OF UNDERWRITERS. If any Underwriter or Underwriters default
in their obligations to purchase Securities under the Terms Agreement and the
number of shares of the Securities that such defaulting Underwriter or
Underwriters agreed but failed to purchase does not exceed 10% of the total
number of shares of the Securities, the Representatives may make arrangements
satisfactory to the Company for the purchase of such Securities by other
persons,
14
including any of the Underwriters, but if no such arrangements are made by the
Closing Date, the non-defaulting Underwriters shall be obligated severally, in
proportion to their respective commitments under this Agreement and the Terms
Agreement, to purchase the Securities that such defaulting Underwriters agreed
but failed to purchase. If any Underwriter or Underwriters so default and the
number of shares of the Securities with respect to which such default or
defaults occur exceeds 10% of the total number of shares of the Securities and
arrangements satisfactory to the Representatives and the Company for the
purchase of such Securities by other persons are not made within 36 hours after
such default, such Terms Agreement will terminate without liability on the part
of any nondefaulting Underwriter or the Company, except as provided in Section
8. As used in this Agreement, the term "Underwriter" includes any person
substituted for an Underwriter under this Section. Nothing herein will relieve
a defaulting Underwriter from liability for its default. The respective
commitments of the several Underwriters for the purposes of this Section shall
be determined without regard to reduction in the respective Underwriters'
obligations to purchase the numbers of shares of the Securities set forth
opposite their names in the Terms Agreement as a result of Delayed Delivery
Contracts entered into by the Company.
The foregoing obligations and agreements set forth in this Section will not
apply if the Terms Agreement specifies that such obligations and agreements will
not apply.
8. SURVIVAL OF CERTAIN REPRESENTATIONS AND OBLIGATIONS. The respective
indemnities, agreements, representations, warranties and other statements of the
Company or its officers and of the several Underwriters set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless of
any investigation, or statement as to the results thereof, made by or on behalf
of any Underwriter, the Company or any of their respective representatives,
officers or directors or any controlling person and will survive delivery of and
payment for the Securities. If the Terms Agreement is terminated pursuant to
Section 7 or if for any reason the purchase of the Securities by the
Underwriters under the Terms Agreement is not consummated, the Company shall
remain responsible for the expenses to be paid or reimbursed by it pursuant to
Section 4 and the respective obligations of the Company and the Underwriters
pursuant to Section 6 shall remain in effect. If the purchase of the Securities
by the Underwriters is not consummated for any reason other than solely because
of the termination of this Agreement pursuant to Section 7 or the occurrence of
any event specified in clause (iii), (iv) or (v) of Section 5(c), the Company
will reimburse the Underwriters for all out-of-pocket expenses (including fees
and disbursements of counsel) reasonably incurred by them in connection with the
offering of the Securities.
9. NOTICES. All communications hereunder will be in writing and, if sent
to the Underwriters, will be mailed, delivered or telegraphed and confirmed to
them at their addresses furnished to the Company in writing for the purpose of
communications hereunder or, if sent to the Company, will be mailed, delivered
or telegraphed and confirmed to it at Northrop Grumman Corporation, 1840 Century
Park East, Los Angeles, California 90067, Attention: _______________.
10. SUCCESSORS. This Agreement will inure to the benefit of and be
binding upon the Company and such Underwriters as are identified in Terms
Agreements and their respective successors and the officers and directors and
controlling persons referred to in Section 6, and no other person will have any
right or obligation hereunder.
15
11. APPLICABLE LAW. This Agreement and the Terms Agreement shall be
governed by, and construed in accordance with, the laws of the State of New
York.
NORTHROP GRUMMAN CORPORATION
By...........................................
Name:
Title:
CS First Boston Corporation
[INSERT NAMES(S) OF OTHER REPRESENTATIVES OR
UNDERWRITERS]
[On behalf of--themselves--itself--and as
Representative[s] of the Several] [As]
Underwriter[s]
[By CS First Boston Corporation]
By...........................................
Name:
Title:
16
SCHEDULE A
LIST OF SIGNIFICANT SUBSIDIARIES
ANNEX I
(THREE COPIES OF THIS DELAYED DELIVERY CONTRACT SHOULD BE SIGNED AND RETURNED
TO THE ADDRESS SHOWN BELOW SO AS TO ARRIVE NOT LATER THAN 9:00 A.M.,
NEW YORK TIME, ON............. .........., 19.....*)
DELAYED DELIVERY CONTRACT
[INSERT DATE OF PUBLIC OFFERING]
Northrop Grumman Corporation
c/o CS First Boston Corporation
Park Avenue Plaza
New York, N.Y. 10055
Attention: [INSERT NAME OF CORPORATE FINANCE OFFICER]
Gentlemen:
The undersigned hereby agrees to purchase from Northrop Grumman
Corporation, a Delaware corporation ("Company"), and the Company agrees to sell
to the undersigned, [IF ONE DELAYED CLOSING, INSERT-as of the date hereof, for
delivery on ______, 199__ ("Delivery Date"),]
...................... shares
of the Company's [INSERT TITLE OF SECURITIES] ("Securities"), offered by the
Company's Prospectus dated _______, 199___ and a Prospectus Supplement dated
______, 199__ relating thereto, receipt of copies of which is hereby
acknowledged, at $_____ per share plus accrued dividends, if any, and on the
further terms and conditions set forth in this Delayed Delivery Contract
("Contract").
[IF TWO OR MORE DELAYED CLOSING, INSERT THE FOLLOWING:
The undersigned will purchase from the Company as of the date hereof, for
delivery on the dates set forth below, Securities in the--principal--amounts
set forth below:
NUMBER
DELIVERY DATE OF SHARES
------------- ---------
........................... .........
........................... .........
Each of such delivery dates is hereinafter referred to as a Delivery Date.]
Payment for the Securities that the undersigned has agreed to purchase
for delivery on--the--each--Delivery Date shall be made to the Company or its
order by certified or official bank check in New York Clearing House (next day)
funds at the offices of __________________ at ___ __. M. on--the--such--Delivery
Date upon delivery to the undersigned of the Securities to be purchased by the
undersigned--for delivery on such Delivery Date--in definitive form and in such
denominations and registered in such names as the undersigned may designate by
written or telegraphic communication addressed to the Company not less than five
full business days prior to--the--such--Delivery Date.
____________________
* INSERT DATE WHICH IS THIRD FULL BUSINESS DAY PRIOR TO CLOSING DATE UNDER THE
TERMS AGREEMENT.
A-1
It is expressly agreed that the provisions for delayed delivery and
payment are for the sole convenience of the undersigned; that the purchase
hereunder of Securities is to be regarded in all respects as a purchase as of
the date of this Contract; that the obligation of the Company to make delivery
of and accept payment for, and the obligation of the undersigned to take
delivery of and make payment for, Securities on--the--each--Delivery Date shall
be subject only to the conditions that (1) investment in the Securities shall
not at--the--such--Delivery Date be prohibited under the laws of any
jurisdiction in the United States to which the undesigned is subject and (2) the
Company shall have sold to the Underwriters the total number of shares of the
Securities less the number of shares thereof covered by this and other similar
Contracts. The undersigned represents that its investment in the Securities is
not, as of the date hereof, prohibited under the laws of any jurisdiction to
which the undersigned is subject and which governs such investment.
Promptly after completion of the sale to the Underwriters the Company
will mail or deliver to the undersigned at the address set forth below notice to
such effect, accompanied by--a copy--copies--of the opinion[s] of counsel for
the Company delivered to the Underwriters in connection therewith.
This Contract will inure to the benefit of and be binding upon the
parties hereto and their respective successors, but will not be assignable by
either party hereto without the written consent of the other.
It is understood that the acceptance of any such Contract is in the
company's sole discretion and, without limiting the foregoing, need not be on a
first-come, first-served basis. If this Contract is acceptable to the Company,
it is requested that the Company sign the form of acceptance below and mail or
deliver one of the counterparts hereof to the undersigned at its address set
forth below. This will become a binding contract between the Company and the
undersigned when such counterpart is so mailed or delivered.
Yours very truly,
........................................
(NAME OF PURCHASER)
BY .....................................
.....................................
(TITLE OF SIGNATORY)
.....................................
.....................................
(ADDRESS OF PURCHASER)
Accepted, as of the above date.
Northrop Grumman Corporation
By ...........................................
Name:
Title:
A-2
EXHIBIT 1-3
NORTHROP GRUMMAN CORPORATION
DEBT SECURITIES
UNDERWRITING AGREEMENT
1. INTRODUCTORY. Northrop Grumman Corporation, a Delaware corporation
("Company"), proposes to issue and sell from time to time certain of its debt
securities registered under the registration statement referred to in Section
2(a) ("Registered Securities"). The Registered Securities will be issued under
an indenture, dated as of __________, 199__ ("Indenture"), between the Company
and Chase Manhattan Bank, National Association, as Trustee, in one or more
series, which series may vary as to interest rates, maturities, redemption
provisions, selling prices and other terms, with all such terms for any
particular series of the Registered Securities being determined at the time of
sale. Particular series of the Registered Securities will be sold pursuant to a
Terms Agreement referred to in Section 3, for resale in accordance with terms of
offering determined at the time of sale.
The Registered Securities involved in any such offering are hereinafter
referred to as the "Securities". The firm or firms which agree to purchase the
Securities are hereinafter referred to as the "Underwriters" of such Securities,
and the representative or representatives of the Underwriters, if any, specified
in a Terms Agreement referred to in Section 3 are hereinafter referred to as the
"Representatives"; provided, however, that if the Terms Agreement does not
specify any representative of the Underwriters, the term "Representatives", as
used in this Agreement (other than in Sections 2(b), 5(c) and 6 and the second
sentence of Section 3), shall mean the Underwriters.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents
and warrants to, and agrees with, each Underwriter that:
(a) A registration statement (No. 33-__), including a prospectus,
relating to the Registered Securities has been filed with the Securities
and Exchange Commission ("Commission") and has become effective; no order
preventing or suspending the use of such Prospectus has been issued by the
Commission and no proceeding for that purpose has been threatened or
initiated by the Commission. Such registration statement, as amended at
the time of any Terms Agreement referred to in Section 3, is hereinafter
referred to as the "Registration Statement", and the prospectus included in
such Registration Statement, as supplemented as contemplated by Section 3
to reflect the terms of the Securities and the terms of offering thereof,
as first filed with the Commission pursuant to and in accordance with Rule
424(b) ("Rule 424(b)") under the Securities Act of 1933, as amended, (the
"Act"), including all material filed pursuant to the Securities Exchange
Act of 1934, as amended (the "Exchange Act") and incorporated by reference
therein, is hereinafter referred to as the "Prospectus."
(b) On the effective date of the registration statement relating to
the Registered Securities, such registration statement conformed in all
respects to the requirements of the
Act, the Trust Indenture Act of 1939, as amended, (the "Trust Indenture
Act") and the rules and regulations of the Commission ("Rules and
Regulations") and did not include any untrue statement of a material fact
or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, and on the date of
each Terms Agreement referred to in Section 3, the Registration Statement
and the Prospectus will conform in all respects to the requirements of the
Act, the Trust Indenture Act and the Rules and Regulations, and neither of
such documents will include any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to
make the statements therein not misleading, except that the foregoing does
not apply to (i) statements in or omissions from any of such documents
based upon written information furnished to the Company by any Underwriter
through the Representatives, if any, specifically for use therein and (ii)
that part of the Registration Statement which shall constitute the
Statement of Eligibility and Qualification (Form T-1) of the Trustee under
the Trust Indenture Act.
(c) The documents incorporated by reference in the Prospectus, when
they became effective or were filed with the Commission, as the case may
be, conformed in all material respects to the requirements of the Act and
the Exchange Act, as applicable, and the Rules and Regulations, and none of
such documents contained an untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to make
the statements therein not misleading.
(d) Each of the Company and its significant subsidiaries (as is
defined in the Act) listed on Schedule A hereto (each, a "Subsidiary" and,
collectively, the "Subsidiaries") has been duly organized, is validly
existing as a corporation in good standing under the laws of its
jurisdiction of organization and has the requisite corporate power and
authority to carry on its business as currently being conducted, to own,
lease and operate its properties, and each is duly qualified and is in good
standing as a foreign corporation authorized to do business in each
jurisdiction where the operation, ownership or leasing of property or the
conduct of its business requires such qualification, except where the
failure to be so qualified would not, singly or in the aggregate, have a
material adverse effect on the properties, business, results of operations,
condition (financial or otherwise), affairs or prospects of the Company and
the Subsidiaries, taken as a whole (a "Material Adverse Effect").
(e) All of the issued and outstanding shares of capital stock of, or
other ownership interest in, each Subsidiary have been duly and validly
authorized and issued and are fully paid and non-assessable and not subject
to any preemptive rights, and all of the shares of capital stock of, or
other ownership interests in, each Subsidiary are owned, directly or
through Subsidiaries, by the Company. Except as set forth in the
Prospectus, all such shares of capital stock are owned free and clear of
any security interest, mortgage, pledge, claim, lien or encumbrance (each,
a "Lien"). There are no outstanding subscriptions, rights, warrants,
options, calls, convertible securities, commitments or sale or Liens
related to or entitling any person to purchase or otherwise to acquire any
shares of the capital stock of, or other ownership interest in, any
Subsidiary.
(f) The Indenture has been duly authorized by the Company, and, when
duly executed and delivered in accordance with its terms, will be a valid
and legally binding
2
agreement of the Company, enforceable against the Company in accordance
with its terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium and other similar laws relating to
or affecting creditors' rights generally, by general equitable principles
(regardless of whether such enforceability is considered in a proceeding in
equity or at law) or by any implied covenant of good faith and fair
dealing, and will conform to the description thereof in the Prospectus.
The Securities have been duly authorized by the Company and, on the Closing
Date, will have been duly executed by the Company and will conform to the
description thereof in the Prospectus. When the Securities are issued,
authenticated and delivered in accordance with the Indenture and paid for
in accordance with the terms of this Agreement, the Securities will
constitute valid and legally binding obligations of the Company,
enforceable against the Company in accordance with their terms and entitled
to the benefits of the Indenture.
(g) Each of the firms of accountants that has certified or shall
certify the applicable consolidated financial statements and supporting
schedules of the Company and/or Grumman Corporation, as the case may be,
filed or to be filed with the Commission as part of the Registration
Statement and the Prospectus or incorporated by reference therein are
independent public accountants with respect to the Company and the
Subsidiaries, as required by the Act. The consolidated historical and PRO
FORMA financial statements, together with related schedules and notes, set
forth in the Prospectus and the Registration Statement or incorporated by
reference therein comply as to form in all material respects with the
requirements of the Act. Such historical financial statements fairly
present the consolidated financial position of the Company, Grumman
Corporation and the Subsidiaries at the respective dates indicated and the
results of their operations and their cash flows for the respective periods
indicated, in accordance with generally accepted accounting principles
("GAAP") consistently applied throughout such periods. Such PRO FORMA
financial statements have been prepared on the basis consistent with such
historical statements, except for the PRO FORMA adjustments specified
therein, and give effect to assumptions made on a reasonable basis and
present fairly the historical and proposed transactions contemplated by the
Prospectus and this Agreement. The other financial and statistical
information and data included in the Prospectus and in the Registration
Statement, historical and PRO FORMA, are, in all material respects,
accurately presented and prepared on a basis consistent with such financial
statements and the books and records of the Company and Grumman
Corporation.
3. PURCHASE AND OFFERING OF SECURITIES. The obligation of the
Underwriters to purchase the Securities will be evidenced by an exchange of
telegraphic or other written communications ("Terms Agreement") at the time the
Company determines to sell the Securities. The Terms Agreement will incorporate
by reference the provisions of this Agreement, except as otherwise provided
therein, and will specify the firm or firms which will be Underwriters, the
names of any Representatives, the principal amount to be purchased by each
Underwriter, the purchase price to be paid by the Underwriters and the terms of
the Securities not already specified in the Indenture, including, but not
limited to, interest, maturity, any redemption provisions, any sinking fund
requirements, any conversion rights or provisions and whether any of the
Securities may be sold to institutional investors pursuant to Delayed Delivery
Contracts (as defined below). The Terms Agreement will also specify the time
and date of delivery and payment (such time and date, or such other time not
later than seven full business days thereafter as the Representatives and the
Company agree as the time for payment and delivery, being herein and in the
Terms Agreement referred to as
3
the "Closing Date"), the place of delivery and payment and any details of the
terms of offering that should be reflected in the prospectus supplement relating
to the offering of the Securities. The obligations of the Underwriters to
purchase the Securities will be several and not joint. It is understood that
the Underwriters propose to offer the Securities for sale as set forth in the
Prospectus. The Securities delivered to the Underwriters on the Closing Date
will be in definitive, fully registered form, in such denominations and
registered in such names as the Underwriters may request.
If the Terms Agreement provides for sales of Securities pursuant to
delayed delivery contracts, the Company authorizes the Underwriters to solicit
offers to purchase Securities pursuant to delayed delivery contracts
substantially in the form of Annex I attached hereto ("Delayed Delivery
Contracts") with such changes therein as the Company may authorize or approve.
Delayed Delivery Contracts are to be with institutional investors, including
commercial and savings banks, insurance companies, pension funds, investment
companies and educational and charitable institutions. On the Closing Date the
Company will pay, as compensation, to the Representatives for the accounts of
the Underwriters, the fee set forth in such Terms Agreement in respect of the
principal amount of Securities to be sold pursuant to Delayed Delivery Contracts
("Contract Securities"). The Underwriters will not have any responsibility in
respect of the validity or the performance of Delayed Delivery Contracts. If
the Company executes and delivers Delayed Delivery Contracts, the Contract
Securities will be deducted from the Securities to be purchased by the several
Underwriters and the aggregate principal amount of Securities to be purchased by
each Underwriter will be reduced pro rata in proportion to the principal amount
of Securities set forth opposite each Underwriter's name in such Terms
Agreement, except to the extent that the Representatives determine that such
reduction shall be otherwise than pro rata and so advise the Company. The
Company will advise the Representatives not later than the business day prior to
the Closing Date of the principal amount of Contract Securities.
4. CERTAIN AGREEMENTS OF THE COMPANY. The Company agrees with the
several Underwriters that it will furnish to Latham & Watkins, counsel for the
Underwriters, one signed copy of the registration statement relating to the
Registered Securities, including all exhibits, in the form it became effective
and of all amendments thereto and that, in connection with each offering of
Securities:
(a) The Company will file the Prospectus with the Commission pursuant
to and in accordance with Rule 424(b)(2) or, if applicable and if consented
to by the Representatives, subparagraph (5), not later than the second
business day following the execution and delivery of the Terms Agreement.
(b) The Company will advise the Representatives promptly of any
proposal to amend or supplement the Registration Statement or the
Prospectus and will afford the Representatives a reasonable opportunity to
comment on any such proposed amendment or supplement; and the Company will
also advise the Representatives promptly of the filing of any such
amendment or supplement and of the institution by the Commission of any
stop order proceedings in respect of the Registration Statement or of any
part thereof and will use its best efforts to prevent the issuance of any
such stop order and to obtain as soon as possible its lifting, if issued.
4
(c) If, at any time when a prospectus relating to the Securities is
required to be delivered under the Act, any event occurs as a result of
which the Prospectus as then amended or supplemented would include an
untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, or if it is necessary at any
time to amend the Prospectus to comply with the Act, the Company promptly
will prepare and file with the Commission an amendment or supplement which
will correct such statement or omission or an amendment which will effect
such compliance. Neither the Representatives' consent to, nor the
Underwriters' delivery of, any such amendment or supplement shall
constitute a waiver of any of the conditions set forth in Section 5.
(d) As soon as practicable following the issuance and sale of any of
the Registered Securities, the Company will make generally available to its
security holders and to the Representatives an earnings statement or
statements of the Company and its subsidiaries which will comply with the
provisions of Section 11(a) of the Act and Rule 158 under the Act.
(e) The Company will furnish to the Representatives copies of the
Registration Statement, including all exhibits, any related Prospectus, any
related preliminary prospectus supplement, the Prospectus and all
amendments and supplements to such documents, in each case as soon as
available and in such quantities as are reasonably requested.
(f) The Company will arrange for the qualification of the Securities
for sale under the laws of such jurisdictions as the Representatives
designate and will continue such qualifications in effect so long as
required for the distribution.
(g) During the period of 5 years after the date of any Terms
Agreement, the Company will furnish to the Representatives and, upon
request, to each of the other Underwriters, if any, as soon as practicable
after the end of each fiscal year a copy of its annual report to
stockholders for such year, and the Company will furnish to the
Representatives (i) as soon as available, a copy of each report or
definitive proxy statement of the Company filed with the Commission under
the Exchange Act or mailed to stockholders, and (ii) from time to time,
such other information concerning the Company as the Representatives may
reasonably request.
(h) The Company will pay all expenses incident to the performance of
its obligations under this Agreement and will reimburse the Underwriters
for any expenses (including fees and disbursements of counsel) incurred by
them in connection with qualification of the Registered Securities for sale
and determination of their eligibility for investment under the laws of
such jurisdictions as the Representatives may designate pursuant to Section
4(f) hereof and the printing of any memorandum relating thereto, for any
fees charged by investment rating agencies for the rating of the
Securities, for fees charged by the National Association of Securities
Dealers, Inc. and for expenses incurred in distributing the Prospectus, any
preliminary prospectuses and any preliminary prospectus supplements to the
Underwriters. It is understood, however, that, except as provided in this
Section, Section 6 and Section 8 hereof, the Underwriters will pay all of
their own costs and expenses, including the fees of their counsel, transfer
taxes on resale of any of the Securities by them, and any advertising
expenses connected with any offers they may make.
5
(i) For a period beginning at the time of execution of the Terms
Agreement and ending on the later of (x) the termination of the syndicate
of Underwriters in connection with the offering and sale of the Securities
or (y) the Closing Date, without the prior consent of the Representatives,
the Company will not offer, sell, contract to sell or otherwise dispose of
United States dollar-denominated debt securities issued or guaranteed by
the Company and having a maturity of more than one year from the date of
issue.
5. CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITERS. The obligations of
the several Underwriters to purchase and pay for the Securities will be subject
to the accuracy of the representations and warranties on the part of the Company
herein, to the accuracy of the statements of Company officers made pursuant to
the provisions hereof, to the performance by the Company of its obligations
hereunder and to the following additional conditions precedent:
(a) On or prior to the date of the Terms Agreement, the
Representatives shall have received letters, dated the date of delivery
thereof, of Deloitte & Touche L.L.P. and Arthur Andersen, respectively,
confirming that they are independent public accountants within the meaning
of the Act and the applicable published Rules and Regulations thereunder
and stating in effect that:
(i) in their opinion, the consolidated financial statements
and schedules examined by them and incorporated by reference in the
Registration Statement relating to the Registered Securities, as
amended at the date of such letter, comply in form in all material
respects with the applicable accounting requirements of the Act and
the related published Rules and Regulations;
(ii) they have performed procedures specified by the American
Institute of Certified Public Accountants for a review of interim
financial information as described in Statement on Auditing Standards
No. 71, "Interim Financial Information" on the unaudited condensed
consolidated financial statements incorporated by reference in the
Registration Statement;
(iii) on the basis of the procedures referred to in (ii) above,
and inquiries of officials of the Company who have responsibility for
financial and accounting matters, nothing came to their attention that
caused them to believe that: any modifications should be made to the
unaudited condensed consolidated financial statements incorporated by
reference in the Registration Statement for them to be in conformity
with generally accepted accounting principles, and such unaudited
condensed financial statements incorporated by reference in the
Registration Statement do not comply in form in all material respects
with the applicable accounting requirements of the Act and the related
published Rules and Regulations;
(iv) on the basis of reading the unaudited pro forma condensed
consolidated statement of earnings for the year ended December 31,
1993 and the six months ended June 30, 1994, incorporated by reference
in the Registration Statement, and inquiries of certain officials of
the Company who have responsibility for financial and accounting
matters, (x) nothing came to their attention that caused them to
believe that such unaudited pro forma condensed consolidated financial
statements do not
6
comply as to form in all material respects with the applicable
accounting requirements of Rule 11-02 of Regulation S-X and (y) they
have proven the arithmetic accuracy of the application of the pro
forma adjustments to the historical amounts in the unaudited pro forma
condensed consolidated financial statements; and
(v) they have compared specified dollar amounts (or
percentages derived from such dollar amounts) and other financial
information, [including the ratio of earnings to fixed charges],
contained in such prospectus (in each case to the extent that such
dollar amounts, percentages and other financial information are
derived from the general accounting records of the Company and its
Subsidiaries subject to the internal controls of the Company's
accounting system or are derived directly from such records by
analysis or computation) with the results obtained from inquiries, a
reading of such general accounting records and other procedures
specified in such letter and have found such dollar amounts,
percentages and other financial information to be in agreement with
such results, except as otherwise specified in such letter.
All financial statements and schedules included in material incorporated by
reference into such prospectus shall be deemed included in such prospectus
for purposes of this subsection.
(b) The Prospectus shall have been filed with the Commission in
accordance with the Rules and Regulations and Section 4(a) of this
Agreement. No stop order suspending the effectiveness of the Registration
Statement or of any part thereof shall have been issued and no proceedings
for that purpose shall have been instituted or, to the knowledge of the
Company or any Underwriter, shall be contemplated by the Commission.
(c) Subsequent to the execution of the Terms Agreement, there shall
not have occurred (i) any change, or any development involving a
prospective change, in or affecting particularly the business or properties
of the Company or its Subsidiaries which, in the judgment of a majority in
interest of the Underwriters, including any Representatives, materially
impairs the investment quality of the Securities or the Registered
Securities; (ii) any downgrading in the rating of any debt securities or
preferred stock of the Company by any "nationally recognized statistical
rating organization" (as defined for purposes of Rule 436(g) under the
Act), or any public announcement that any such organization has under
surveillance or review its rating of any debt securities or preferred stock
of the Company (other than an announcement with positive implications of a
possible upgrading, and no implication of a possible downgrading, of such
rating); (iii) any suspension or limitation of trading in securities
generally on the New York Stock Exchange, or any setting of minimum prices
for trading on such exchange, or any suspension of trading of any
securities of the Company on any exchange or in the over-the-counter
market; (iv) any banking moratorium declared by Federal or New York
authorities; or (v) any outbreak or escalation of major hostilities in
which the United States is involved, any declaration of war by Congress or
any other substantial national or international calamity or emergency if,
in the judgment of a majority in interest of the Underwriters, including
any Representatives, the effect of any such outbreak, escalation,
declaration, calamity or emergency makes it impractical or inadvisable to
proceed with completion of the sale of and payment for the Securities.
7
(d) The Representatives shall have received an opinion, dated the
Closing Date, of Sheppard, Mullin, Richter & Hampton, counsel for the
Company, to the effect that:
(i) Each of the Company and its Subsidiaries has been duly
incorporated and is an existing corporation in good standing under the
laws of the State of its jurisdiction of incorporation, with corporate
power and authority to own its properties and conduct its business as
described in the Prospectus; and, to the best of such counsel's
knowledge, each of the Company and its Subsidiaries is duly qualified
to do business as a foreign corporation in good standing in all other
jurisdictions in which it owns or leases substantial properties or in
which the conduct of its business requires such qualification, except
where the failure to qualify would not have a Material Adverse Effect;
(ii) The Company has authorized capitalization as set forth in
the Prospectus;
(iii) The Indenture has been duly authorized, executed and
delivered by the Company and has been duly qualified under the Trust
Indenture Act; the Securities have been duly authorized; the
Securities other than any Contract Securities have been duly executed,
authenticated, issued and delivered; the Indenture and the Securities
other than any Contract Securities constitute, and any Contract
Securities, when executed, authenticated, issued and delivered in the
manner provided in the Indenture and sold pursuant to Delayed Delivery
Contracts, will constitute, valid and legally binding obligations of
the Company enforceable in accordance with their terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or
affecting creditors' rights and to general equity principles
(regardless of whether such enforceability is considered in a
proceeding in equity or at law) or by any implied covenant of good
faith and fair dealing; and the Securities other than any Contract
Securities conform, and any Contract Securities, when so issued and
delivered and sold, will conform, to the description thereof contained
in the Prospectus;
(iv) No consent, approval, authorization or order of, or
filing with, any governmental agency or body or any court is required
for the consummation of the transactions contemplated by the Terms
Agreement (including the provisions of this Agreement) in connection
with the issuance or sale of the Securities by the Company, except
such as have been obtained and made under the Act and the Trust
Indenture Act and such as may be required under state securities laws;
(v) The execution, delivery and performance of the Indenture,
the Terms Agreement (including the provisions of this Agreement) and
any Delayed Delivery Contracts and the issuance and sale of the
Securities and compliance with the terms and provisions thereof will
not result in a breach or violation of any of the terms and provisions
of, or constitute a default under, any Federal, California or Delaware
statute or any rule, regulation or order of any governmental agency or
body or any court having jurisdiction over the Company or any of its
properties or any material agreement or instrument to which the
Company is a party or by which the Company
8
is bound or to which any of the properties of the Company is subject,
or the charter or by-laws of the Company, and the Company has the
power and authority to authorize, issue and sell the Securities as
contemplated by the Terms Agreement (including the provisions of this
Agreement);
(vi) After due inquiry, such counsel does not know of any
legal or governmental proceeding pending or threatened to which the
Company or any of its Subsidiaries is a party or to which any of their
respective property is subject which is required to be described in
the Registration Statement or the Prospectus and is not so described;
(vii) The Registration Statement has become effective under the
Act, the Prospectus was filed with the Commission pursuant to the
subparagraph of Rule 424(b) specified in such opinion on the date
specified therein, and, to the best of the knowledge of such counsel,
no stop order suspending the effectiveness of the Registration
Statement or of any part thereof has been issued and no proceedings
for that purpose have been instituted or are pending or contemplated
under the Act, and the Registration Statement and the Prospectus
(other than the financial statements and notes thereto and supporting
schedules and other financial and statistical information contained
therein as to which such counsel need express no opinion) complied as
to form in all material respects with the requirements of the Act, the
Trust Indenture Act and the Rules and Regulations; such counsel shall
also state that on the basis of their involvement in the preparation
of the Registration Statement and although they have not verified the
accuracy or completeness of the statements contained therein or in any
amendment thereto, nothing has come to the attention of such counsel
which causes them to believe that the Registration Statement or the
Prospectus (other than the financial statements and notes thereto and
supporting schedules and other financial and statistical information
contained therein) contained any untrue statement of a material fact
or omitted to state any material fact required to be stated therein or
necessary to make the statements therein not misleading; the
descriptions in the Registration Statement and Prospectus of statutes,
legal and governmental proceedings and contracts and other documents
are accurate and fairly present the information required to be shown;
and such counsel do not know of any legal or governmental proceedings
required to be described in the Prospectus which are not described as
required or of any contracts or documents of a character required to
be described in the Registration Statement or Prospectus or to be
filed as exhibits to the Registration Statement which are not
described and filed as required; it being understood that such counsel
need express no opinion as to the financial statements or other
financial data contained in the Registration Statement or the
Prospectus; and
(viii) The Terms Agreement (including the provisions of this
Agreement) and any Delayed Delivery Contracts have been duly
authorized, executed and delivered by the Company.
In rendering such opinion, such counsel shall opine as to the effect of the
federal laws of the United States, the internal laws of the States of California
and New York and the General Corporation Laws of the State of Delaware. As to
matters involving application of the laws of the State of New York,
9
to the extent specified in such opinion, such counsel may rely on the opinion of
other counsel of good standing believed to be reliable and who are satisfactory
to counsel for the Underwriters.
(e) The Representatives shall have received an opinion, dated the
Closing Date, of Richard R. Molleur, Corporate Vice President and General
Counsel of the Company, to the effect that:
(i) The execution, delivery and performance of the Indenture,
the Terms Agreement (including the provisions of this Agreement) and
any Delayed Delivery Contracts and the issuance and sale of the
Securities and compliance with the terms and provisions thereof will
not result in a breach or violation of any of the terms and provisions
of, or constitute a default under, any Federal, California or Delaware
statute or any rule, regulation or order of any governmental agency or
body or any court having jurisdiction over the Company or any of its
properties or any agreement or instrument to which the Company is a
party or by which the Company is bound or to which any of its
properties is subject, or the charter or by-laws of the Company, and
the Company has the power and authority to authorize, issue and sell
the Securities as contemplated by the Terms Agreement (including the
provisions of this Agreement);
(ii) Such counsel does not know of any legal or governmental
proceeding pending or threatened to which the Company or any of its
Subsidiaries is a party or to which any of their respective properties
is subject which is required to be described in the Registration
Statement or the Prospectus and is not so described, or of any
contract or other document which is required to be described in the
Registration Statement or the Prospectus or is required to be filed as
an exhibit to the Registration Statement which is not described or
filed as required.
In rendering such opinion, such counsel shall opine as to the effect of the
federal laws of the United States, the internal laws of the State of California
and the General Corporation Laws of the State of Delaware.
(f) The Representatives shall have received from Latham & Watkins,
counsel for the Underwriters, such opinion or opinions, dated the Closing
Date, with respect to the incorporation of the Company, the validity of the
Securities, the Registration Statement, the Prospectus and other related
matters as they may require, and the Company shall have furnished to such
counsel such documents as they request for the purpose of enabling them to
pass upon such matters.
(g) The Representatives shall have received a certificate, dated the
Closing Date, of the President or any Vice-President and a principal
financial or accounting officer of the Company in which such officers, to
the best of their knowledge after reasonable investigation, shall state
that the representations and warranties of the Company in this Agreement
are true and correct, that the Company has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied hereunder
at or prior to the Closing Date, that no stop order suspending the
effectiveness of the Registration Statement or of any part thereof has been
issued and no proceedings for that purpose have been instituted or are
contemplated by
10
the Commission and that, subsequent to the date of the most recent
financial statements in the Prospectus, there has been no material adverse
change in the financial position or results of operation of the Company and
its Subsidiaries except as set forth in or contemplated by the Prospectus
or as described in such certificate.
(h) The Representatives shall have received letters, dated the
Closing Date, of each of Deloitte & Touche L.L.P. and Arthur Andersen,
which reconfirms the matters set forth in their letter delivered pursuant
to subsection (a) of this Section and which state in effect that:
(i) in their opinion, the consolidated financial statements
and schedules examined by them and incorporated by reference in the
Registration Statement relating to the Registered Securities, as
amended at the date of such letter, comply in form in all material
respects with the applicable accounting requirements of the Act and
the related published Rules and Regulations;
(ii) they have performed procedures specified by the American
Institute of Certified Public Accountants for a review of interim
financial information as described in Statement on Auditing Standards
No. 71, "Interim Financial Information" on the unaudited condensed
consolidated financial statements incorporated by reference in the
Registration Statement;
(iii) on the basis of the procedures referred to in (ii) above,
and inquiries of officials of the Company who have responsibility for
financial and accounting matters, nothing came to their attention that
caused them to believe that: any modifications should be made to the
unaudited condensed consolidated financial statements incorporated by
reference in the Registration Statement for them to be in conformity
with generally accepted accounting principles, and such unaudited
condensed financial statements incorporated by reference in the
Registration Statement do not comply in form in all material respects
with the applicable accounting requirements of the Act and the related
published Rules and Regulations;
(iv) on the basis of reading the unaudited pro forma condensed
consolidated statement of earnings for the year ended December 31,
1993 and the six months ended June 30, 1994, incorporated by reference
in the Registration Statement, and inquiries of certain officials of
the Company who have responsibility for financial and accounting
matters, (x) nothing came to their attention that caused them to
believe that such unaudited pro forma condensed consolidated financial
statements do not comply as to form in all material respects with the
applicable accounting requirements of Rule 11-02 of Regulation S-X and
(y) they have proven the arithmetic accuracy of the application of the
pro forma adjustments to the historical amounts in the unaudited pro
forma condensed combined financial statements;
(v) on the basis of the review referred to in (ii) above, a
reading of the latest available interim financial statements of the
Company, inquiries of officials of the Company who have responsibility
for financial and accounting matters and other specified procedures,
nothing came to their attention that caused them to believe that:
11
(A) the unaudited financial statements, if any, included
in the Prospectus and not covered by their letter delivered
pursuant to subsection (a) of this Section do not comply in
form in all material respects with the applicable accounting
requirements of the Act and the related published Rules and
Regulations or are not in conformity with generally accepted
accounting principles applied on a basis substantially
consistent with that of the audited financial statements
included in the Prospectus;
(B) the unaudited capsule information, if any, included
in the Prospectus does not agree with the amounts set forth in
the unaudited consolidated financial statements from which it
was derived or was not determined on a basis substantially
consistent with that of the audited financial statements
included in the Prospectus;
(C) at the date of the latest available balance sheet
read by such accountants, or at a subsequent specified date not
more than five days prior to the Closing Date, there was any
change in the capital stock or any increase in short-term
indebtedness or long-term debt of the Company and consolidated
Subsidiaries or, at the date of the latest available balance
sheet read by such accountants, there was any decrease in
consolidated net current assets or net assets, as compared with
amounts shown on the latest balance sheet included in the
Prospectus; or
(D) for the period from the date of the latest income
statement included in the Prospectus to the closing date of the
latest available income statement read by such accountants
there were any decreases, as compared with the corresponding
period of the previous year and with the period of
corresponding length ended the date of the latest income
statement included in the Prospectus, in consolidated net
sales, net operating income, income before extraordinary items
or net income or in the ratio of earnings to fixed charges;
except in all cases set forth in clauses (C) and (D) above for
changes, increases or decreases which the Prospectus discloses have
occurred or may occur or which are described in such letter; and
(vi) they have compared specified dollar amounts (or
percentages derived from such dollar amounts) and other financial
information included in the Prospectus and not covered by their letter
delivered pursuant to subsection (a) of this Section (in each case to
the extent that such dollar amounts, percentages and other financial
information are derived from the general accounting records of the
Company and its Subsidiaries subject to the internal controls of the
Company's accounting system or are derived directly from such records
by analysis or computation) with the results obtained from inquiries,
a reading of such general accounting records and other procedures
specified in such letter and have found such dollar amounts,
percentages and other financial information to be in agreement with
such results, except as otherwise specified in such letter.
12
All financial statements and schedules included in material incorporated by
reference into the Prospectus shall be deemed included in the Prospectus
for the purposes of this subsection.
The Company will furnish the Representatives with such conformed copies of such
opinions, certificates, letters and documents as they reasonably request.
6. INDEMNIFICATION AND CONTRIBUTION. (a) The Company will indemnify and
hold harmless each Underwriter against any losses, claims, damages or
liabilities, joint or several, to which such Underwriter may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
the Registration Statement, the Prospectus, or any amendment or supplement
thereto, or any related preliminary prospectus or preliminary prospectus
supplement, or arise out of or are based upon the omission or alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, and will reimburse each Underwriter
for any legal or other expenses reasonably incurred by such Underwriter in
connection with investigating or defending any such loss, claim, damage,
liability or action as such expenses are incurred; provided, however, that the
Company will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement in or omission or alleged omission from any of such
documents in reliance upon and in conformity with written information furnished
to the Company by any Underwriter through the Representatives, if any,
specifically for use therein.
(b) Each Underwriter will, severally and not jointly, indemnify and hold
harmless the Company against any losses, claims, damages or liabilities to which
the Company may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement, the Prospectus, or any
amendment or supplement thereto, or any related preliminary prospectus or
preliminary prospectus supplement, or arise out of or are based upon the
omission or the alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, in
each case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with written information furnished to the Company by such
Underwriter through the Representatives, if any, specifically for use therein,
and will reimburse any legal or other expenses reasonably incurred by the
Company in connection with investigating or defending any such loss, claim,
damage, liability or action as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under this Section of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under
subsection (a) or (b) above, notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party will not relieve
it from any liability which it may have to any indemnified party otherwise than
under subsection (a) or (b) above. In case any such action is brought against
any indemnified party and it notifies the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate therein and, to
the extent that it may wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel reasonably satisfactory to
such indemnified party, and after notice from the indemnifying party to such
indemnified party of its
13
election so to assume the defense thereof, the indemnifying party will not be
liable to such indemnified party under this Section for any legal or other
expenses subsequently incurred by such indemnified party in connection with the
defense thereof other than reasonable costs of investigation. In any such
action, any indemnified party shall have the right to retain its own counsel,
but the fees and expenses of such counsel shall be at the expense of such
indemnified party unless (i) the indemnifying party and the indemnified party
shall have mutually agreed to the retention of such counsel or (ii) the named
parties to any such action (including any impleaded parties) include both the
indemnifying party and the indemnified party and representation of both parties
by the same counsel would be inappropriate due to actual or potential differing
interests between them. It is understood that the indemnifying party shall not,
in respect of the legal expenses of any indemnified party in connection with any
action or related actions in the same jurisdiction, be liable for the fees and
expenses of more than one separate firm (in addition to any local counsel) for
all such indemnified parties and that all such fees and expenses shall be
reimbursed as they are incurred. No indemnifying party shall, without the prior
written consent of the indemnified party, effect any settlement of any pending
or threatened action in respect of which any indemnified party is or could have
been a party and indemnity could have been sought hereunder by such indemnified
party unless such settlement includes an unconditional release of such
indemnified party from all liability on any claims that are the subject matter
of such action.
(d) If the indemnification provided for in this Section is unavailable or
insufficient to hold harmless an indemnified party under subsection (a) or (b)
above, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages or
liabilities referred to in subsection (a) or (b) above (i) in such proportion as
is appropriate to reflect the relative benefits received by the Company on the
one hand and the Underwriters on the other from the offering of the Securities
or (ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Company on the one hand and the Underwriters on the other in connection with
the statements or omissions which resulted in such losses, claims, damages or
liabilities as well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand and the Underwriters
on the other shall be deemed to be in the same proportion as the total net
proceeds from the offering (before deducting expenses) received by the Company
bear to the total underwriting discounts and commissions received by the
Underwriters. The relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Company or the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such untrue statement or omission. The amount paid by an indemnified
party as a result of the losses, claims, damages or liabilities referred to in
the first sentence of this subsection (d) shall be deemed to include any legal
or other expenses reasonably incurred by such indemnified party in connection
with investigating or defending any action or claim which is the subject of this
subsection (d). Notwithstanding the provisions of this subsection (d), no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
14
guilty of such fraudulent misrepresentation. The Underwriters' obligations in
this subsection (d) to contribute are several in proportion to their respective
underwriting obligations and not joint.
(e) The obligations of the Company under this Section shall be in addition
to any liability which the Company may otherwise have and shall extend, upon the
same terms and conditions, to each person, if any, who controls any Underwriter
within the meaning of the Act; and the obligations of the Underwriters under
this Section shall be in addition to any liability which the respective
Underwriters may otherwise have and shall extend, upon the same terms and
conditions, to each director of the Company, to each officer of the Company who
has signed the Registration Statement and to each person, if any, who controls
the Company within the meaning of the Act.
7. DEFAULT OF UNDERWRITERS. If any Underwriter or Underwriters default
in their obligations to purchase Securities under the Terms Agreement and the
aggregate principal amount of the Securities that such defaulting Underwriter or
Underwriters agreed but failed to purchase does not exceed 10% of the total
principal amount of the Securities, the Representatives may make arrangements
satisfactory to the Company for the purchase of such Securities by other
persons, including any of the Underwriters, but if no such arrangements are made
by the Closing Date, the non-defaulting Underwriters shall be obligated
severally, in proportion to their respective commitments under this Agreement
and the Terms Agreement, to purchase the Securities that such defaulting
Underwriters agreed but failed to purchase. If any Underwriter or Underwriters
so default and the aggregate principal amount of the Securities with respect to
which such default or defaults occur exceeds 10% of the total principal amount
of the Securities and arrangements satisfactory to the Representatives and the
Company for the purchase of such Securities by other persons are not made within
36 hours after such default, such Terms Agreement will terminate without
liability on the part of any nondefaulting Underwriter or the Company, except as
provided in Section 8. As used in this Agreement, the term "Underwriter"
includes any person substituted for an Underwriter under this Section. Nothing
herein will relieve a defaulting Underwriter from liability for its default.
The respective commitments of the several Underwriters for the purposes of this
Section shall be determined without regard to reduction in the respective
Underwriters' obligations to purchase the principal amounts of the Securities
set forth opposite their names in the Terms Agreement as a result of Delayed
Delivery Contracts entered into by the Company.
The foregoing obligations and agreements set forth in this Section will not
apply if the Terms Agreement specifies that such obligations and agreements will
not apply.
8. SURVIVAL OF CERTAIN REPRESENTATIONS AND OBLIGATIONS. The respective
indemnities, agreements, representations, warranties and other statements of the
Company or its officers and of the several Underwriters set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless of
any investigation, or statement as to the results thereof, made by or on behalf
of any Underwriter, the Company or any of their respective representatives,
officers or directors or any controlling person and will survive delivery of and
payment for the Securities. If the Terms Agreement is terminated pursuant to
Section 7 or if for any reason the purchase of the Securities by the
Underwriters under the Terms Agreement is not consummated, the Company shall
remain responsible for the expenses to be paid or reimbursed by it pursuant to
Section 4 and the respective obligations of the Company and the Underwriters
pursuant to Section 6 shall remain in effect. If the purchase of the Securities
by the Underwriters is not consummated for any reason other than solely because
of the termination of this Agreement pursuant to Section 7 or the occurrence of
any event
15
specified in clause (iii), (iv) or (v) of Section 5(c), the Company will
reimburse the Underwriters for all out-of-pocket expenses (including fees and
disbursements of counsel) reasonably incurred by them in connection with the
offering of the Securities.
9. NOTICES. All communications hereunder will be in writing and, if sent
to the Underwriters, will be mailed, delivered or telegraphed and confirmed to
them at their addresses furnished to the Company in writing for the purpose of
communications hereunder or, if sent to the Company, will be mailed, delivered
or telegraphed and confirmed to it at Northrop Grumman Corporation, 1840 Century
Park East, Los Angeles, California 90067, Attention: _________________.
10. SUCCESSORS. This Agreement will inure to the benefit of and be
binding upon the Company and such Underwriters as are identified in Terms
Agreements and their respective successors and the officers and directors and
controlling persons referred to in Section 6, and no other person will have any
right or obligation hereunder.
16
11. APPLICABLE LAW. This Agreement and the Terms Agreement shall be
governed by, and construed in accordance with, the laws of the State of New
York.
NORTHROP GRUMMAN CORPORATION
By......................................
Name:
Title:
CS First Boston Corporation
[INSERT NAMES(S) OF OTHER
REPRESENTATIVES OR UNDERWRITERS]
[On behalf of--themselves--itself--and
as Representative[s] of the Several]
[As] Underwriter[s]
[By CS First Boston Corporation]
By......................................
Name:
Title:
17
SCHEDULE A
[List of Significant Subsidiaries]
18
ANNEX I
(THREE COPIES OF THIS DELAYED DELIVERY CONTRACT SHOULD BE SIGNED AND RETURNED
TO THE ADDRESS SHOWN BELOW SO AS TO ARRIVE NOT LATER THAN 9:00 A.M.,
NEW YORK TIME, ON............. .........., 19.....*)
DELAYED DELIVERY CONTRACT
[INSERT DATE OF PUBLIC OFFERING]
Northrop Grumman Corporation
c/o CS First Boston Corporation
Park Avenue Plaza
New York, N.Y. 10055
Attention: [INSERT NAME OF CORPORATE FINANCE OFFICER]
Gentlemen:
The undersigned hereby agrees to purchase from Northrop Grumman
Corporation, a Delaware corporation ("Company"), and the Company agrees to sell
to the undersigned, [IF ONE DELAYED CLOSING, INSERT-as of the date hereof, for
delivery on ______, 199__ ("Delivery Date"),]
[$] ......................
- --principal amount--of the Company's [INSERT TITLE OF SECURITIES]
("Securities"), offered by the Company's Prospectus dated _______, 199___ and a
Prospectus Supplement dated ______, 199__ relating thereto, receipt of copies of
which is hereby acknowledged, at--__% of the principal amount thereof plus
accrued interest if any, and on the further terms and conditions set forth in
this Delayed Delivery Contract ("Contract").
[IF TWO OR MORE DELAYED CLOSING, INSERT THE FOLLOWING:
The undersigned will purchase from the Company as of the date hereof,
for delivery on the dates set forth below, Securities in the--principal--amounts
set forth below:
DELIVERY DATE PRINCIPAL AMOUNT
------------- ----------------
........................... ..........
........................... ..........
Each of such delivery dates is hereinafter referred to as a Delivery Date.
Payment for the Securities that the undersigned has agreed to purchase
for delivery on--the--each--Delivery Date shall be made to the Company or its
order by certified or official bank check in New York Clearing House (next day)
funds at the offices of __________________ at ___ __. M. on--the--such--Delivery
Date upon delivery to the undersigned of the Securities to be purchased by the
undersigned--for delivery on such Delivery Date--in definitive fully registered
form and in such denominations and registered in such names as the undersigned
may designate by written or telegraphic communication addressed to the Company
not less than five full business days prior to--the--such--Delivery Date.
____________________
* INSERT DATE WHICH IS THIRD FULL BUSINESS DAY PRIOR TO CLOSING DATE UNDER THE
TERMS AGREEMENT.
A-1
It is expressly agreed that the provisions for delayed delivery and
payment are for the sole convenience of the undersigned; that the purchase
hereunder of Securities is to be regarded in all respects as a purchase as of
the date of this Contract; that the obligation of the Company to make delivery
of and accept payment for, and the obligation of the undersigned to take
delivery of and make payment for, Securities on each Delivery Date shall be
subject only to the conditions that (1) investment in the Securities shall not
at such Delivery Date be prohibited under the laws of any jurisdiction in the
United States to which the undesigned is subject and (2) the Company shall have
sold to the Underwriters the total principal amount of the Securities less the
principal amount thereof covered by this and other similar Contracts. The
undersigned represents that its investment in the Securities is not, as of the
date hereof, prohibited under the laws of any jurisdiction to which the
undersigned is subject and which governs such investment.
Promptly after completion of the sale to the Underwriters the Company
will mail or deliver to the undersigned at the address set forth below notice to
such effect, accompanied by copies of the opinion[s] of counsel for the Company
delivered to the Underwriters in connection therewith.
This Contract will inure to the benefit of and be binding upon the
parties hereto and their respective successors, but will not be assignable by
either party hereto without the written consent of the other.
It is understood that the acceptance of any such Contract is in the
company's sole discretion and, without limiting the foregoing, need not be on a
first-come, first-served basis. If this Contract is acceptable to the Company,
it is requested that the Company sign the form of acceptance below and mail or
deliver one of the counterparts hereof to the undersigned at its address set
forth below. This will become a binding contract between the Company and the
undersigned when such counterpart is so mailed or delivered.
Yours very truly,
........................................
(NAME OF PURCHASER)
BY .....................................
........................................
(TITLE OF SIGNATORY)
........................................
........................................
(ADDRESS OF PURCHASER)
A-2
Accepted, as of the above date.
Northrop Grumman Corporation
By ...........................................
Name:
Title:
A-3
EXHIBIT 4-1
-----------
RESTATED CERTIFICATE OF INCORPORATION
OF
NORTHROP GRUMMAN CORPORATION
Northrop Grumman Corporation, a corporation organized and existing under the
laws of the State of Delaware, hereby certifies as follows:
1. The name of the corporation is Northrop Grumman Corporation, and
the name under which the corporation was originally incorporated is Northrop
Corporation. The date of filing of its original Certificate of Incorporation
with the Secretary of State was March 12, 1985.
2. This Restated Certificate of incorporation only restates and
integrates and does not further amend the provisions of the Certificate of
Incorporation of this corporation as heretofore amended or supplemented and
there is no discrepancy between those provisions and the provisions of this
Restated Certificate of Incorporation.
3. The text of the Certificate of Incorporation as amended or
supplemented heretofore is hereby restated without further amendments or changes
to read as herein set forth in full:
RESTATED CERTIFICATE OF INCORPORATION
OF
NORTHROP GRUMMAN CORPORATION
FIRST: The name of the corporation is Northrop Grumman Corporation (the
"Corporation").
SECOND: The address of the registered office of the Corporation in the
State of Delaware is Corporation Trust Center, 1209 Orange Street, in the City
of Wilmington, County of New Castle. The name and address of the Corporation's
registered agent in the State of Delaware is the Corporation Trust Company,
Corporation Trust Center, 1209 Orange Street, in the City of Wilmington, County
of New Castle, State of Delaware 19801.
THIRD: The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may now or hereafter be organized under the
General Corporation Law of the State of Delaware.
1
FOURTH: 1. The total number of shares of stock which the Corporation
shall have authority to issue is Two Hundred Ten Million (210,000,000),
consisting of Two Hundred Million (200,000,000) shares of Common Stock, par
value One Dollar ($1.00) per share (the "Common Stock"), and Ten Million
(10,000,000) shares of Preferred Stock, par value One Dollar ($1.00) per share
(the "Preferred Stock").
2. Shares of Preferred Stock may be issued from time to time in one or
more classes or series, each of which class or series shall have such
distinctive designation or title as shall be fixed by resolution of the Board of
Directors of the Corporation (the "Board of Directors") prior to the issuance of
any shares thereof. Each such class or series of Preferred Stock shall have such
voting powers, full or limited, or no voting powers, and such preferences and
relative, participating, optional or other special rights and such
qualifications, limitations or restrictions thereof, as shall be stated in such
resolution providing for the issuance of such class or series of Preferred Stock
as may be adopted from time to time by the Board of Directors prior to the
issuance of any shares thereof pursuant to the authority hereby expressly vested
in it, all in accordance with the laws of the State of Delaware. The Board of
Directors is further authorized to increase or decrease (but not below the
number of shares of such class or series then outstanding) the number of shares
of any class or series subsequent to the issuance of shares of that class or
series.
FIFTH: In furtherance and not in limitation of the powers conferred by
statute and subject to Article Sixth hereof, the Board of Directors is expressly
authorized to adopt, repeal rescind, alter or amend in any respect the bylaws of
the Corporation (the "Bylaws").
SIXTH: Notwithstanding Article Fifth hereof, the Bylaws may be adopted,
repealed, rescinded, altered or amended in any respect by the stockholders of
the Corporation, but only by the affirmative vote of the holders of not less
than eighty percent (80%) of the voting power of all outstanding shares of
Voting Stock (as defined in paragraph (f) of Section 3 of Article Fourteenth
hereof), regardless of class and voting together as a single voting class and,
where such action is proposed by an Interested Stockholder (as defined in
paragraph (d) of Section 3 of Article Fourteenth hereof), or by any Affiliate or
Associate (each as defined in paragraph (g) of Section 3 of Article Fourteenth
hereof) of an Interested Stockholder, including the affirmative vote of the
holders of a majority of the voting power of all outstanding shares of Voting
Stock, regardless of class and voting together as a single voting class, other
than shares held by the Interested Stockholder which proposed (or the Affiliate
or Associate of which proposed) such action, or any Affiliate or Associate of
such Interested Stockholder, PROVIDED, HOWEVER, that where such action is
approved by a majority of the Continuing Directors (as defined in paragraph (a)
of Section 3 of Article Fourteenth hereof), the affirmative vote of a majority
of the voting power of all outstanding shares of Voting Stock, regardless of
class and voting together as a single voting class shall be required for
approval of such action.
SEVENTH: The business and affairs of the Corporation shall be managed by
and under the direction of the Board of Directors. Except as may otherwise be
provided pursuant to Section 2 of Article Fourth hereof in connection with
rights to elect additional directors under specified
2
circumstances which may be granted to the holders of any class or series of
Preferred Stock, the exact number of directors of the Corporation shall be
determined from time to time by a Bylaw or amendment thereto.
EIGHTH: The Board of Directors shall be and is divided into three classes:
Class I, Class II and Class III. The number of directors in each class shall be
the whole number contained in the quotient obtained by dividing the authorized
number of directors by three. If a fraction is also contained in such quotient,
then additional directors shall be apportioned as follows: if such fraction is
one-third, the additional director shall be a member of Class I; and if such
fraction is two-thirds, one of the additional directors shall be a member of
Class I and the other shall be a member of Class II. Each director shall serve
for a term ending on the date of the third Annual Meeting of Stockholders of the
Corporation (the "Annual Meeting") following the Annual Meeting at which such
director was elected; PROVIDED, HOWEVER, that the directors first elected to
Class I shall serve for a term ending on the date of the first Annual Meeting
next following the end of the calendar year 1985, the directors first elected to
Class II shall serve for a term ending on the date of the second Annual Meeting
next following the end of the calendar year 1985 and the directors first elected
to Class III shall serve for a term ending on the date of the third Annual
Meeting next following the end of the calendar year 1985.
Notwithstanding the foregoing provisions of this Article Eighth: each
director shall serve until his successor is elected and qualified or until his
death, resignation or removal; no decrease in the authorized number of directors
shall shorten the term of any incumbent director, and additional directors,
elected pursuant to Section 2 of Article Fourth hereof in connection with rights
to elect such additional directors under specified circumstances which may be
granted to the holders of any class or series of Preferred Stock, shall not be
included in any class, but shall serve for such term or terms and pursuant to
such other provisions as are specified in the resolution of the Board of
Directors establishing such class or series.
NINTH: Except as may otherwise be provided pursuant to Section 2 of
Article Fourth hereof in connection with rights to elect additional directors
under specified circumstances which may be granted to the holders of any class
or series of Preferred Stock, newly created directorships resulting from any
increase in the number of directors, or any vacancies on the Board of Directors
resulting from death, resignation, removal or other causes, shall be filled
solely by the affirmative vote of a majority of the remaining directors then in
office, even though less than a quorum of the Board of Directors. Any director
elected in accordance with the preceding sentence shall hold office for the
remainder of the full term of the class of directors in which the new
directorship was created or the vacancy occurred and until such director's
successor shall have been elected and qualified or until such director's death,
resignation or removal, whichever first occurs.
TENTH: Except as may otherwise be provided pursuant to Section 2 of
Article Fourth hereof in connection with rights to elect additional directors
under specified circumstances which may be granted to the holders of any class
or series of Preferred Stock, any director may be removed from office only for
cause and only by the affirmative vote of the holders of not less
3
than eighty percent (80%) of the voting power of all outstanding shares of
Voting Stock entitled to vote in connection with the election of such director,
regardless of class and voting together as a single voting class; PROVIDED,
HOWEVER, that where such removal is approved by a majority of the Continuing
Directors, the affirmative vote of a majority of the voting power of all
outstanding shares of Voting Stock entitled to vote in connection with the
election of such director, regardless of class and voting together as a single
voting class, shall be required for approval of such removal.
ELEVENTH: Any action required or permitted to be taken by the stockholders
of the Corporation must be effected at a duly called Annual Meeting or at a
special meeting of stockholders of the Corporation, unless such action requiring
or permitting shareholder approval is approved by a majority of the Continuing
Directors, in which case such action may be authorized or taken by the written
consent of the holders of outstanding shares of Voting Stock having not less
than the minimum voting power that would be necessary to authorize or take such
action at a meeting of stockholders at which all shares entitled to vote thereon
were present and voted, provided all other requirements of applicable law and
this Certificate have been satisfied.
TWELFTH: Special meetings of the stockholders of the Corporation for any
purpose or purposes may be called at any time by a majority of the Board of
Directors or by the Chairman of the Board. Special meetings may not be called by
any other person or persons. Each special meeting shall be held at such date and
time as is requested by the person or persons calling the meeting, within the
limits fixed by law.
THIRTEENTH: Meetings of stockholders of the Corporation may be held within
or without the State of Delaware, as the Bylaws may provide. The books of the
Corporation may be kept (subject to any provision of applicable law) outside the
State of Delaware at such place or places as may be designated from time to time
by the Board of Directors or in the Bylaws.
FOURTEENTH: 1. Subject to the provisions of Section 2 of this Article
Fourteenth, in addition to any vote required by law, a Business Combination (as
defined in paragraph (b) of Section 3 of this Article Fourteenth) shall be
approved by the affirmative vote of the holders of not less than:
(a) eighty percent (80%) of the voting power of all outstanding
shares of Voting Stock, regardless of class and voting together as a single
voting class; and
(b) a majority of the voting power of all outstanding shares of
Voting Stock, other than shares held by any Interested Stockholder which is
(or the Affiliate or Associate of which is) a party to such Business
Combination or by any Affiliate or Associate of such Interested
Stockholder, regardless of class and voting together as a single voting
class.
4
The affirmative votes referred to in paragraphs (a) and (b) of this Section 1
shall be required notwithstanding the fact that no vote may be required, or that
a lesser percentage or proportion may be specified, by law, or in any agreement
between the Corporation and any national securities exchange or any other
person, or otherwise.
2. Notwithstanding the provisions of Section 1 of this Article Fourteenth,
a Business Combination may be approved if all of the conditions specified in
either of the following paragraphs (a) or (b) have been satisfied:
(a) both of the following conditions specified in clauses (i) and
(ii) of this paragraph (a) have been satisfied:
(i) there are one or more Continuing Directors and a majority of
such Continuing Directors shall have approved such Business
Combination; and
(ii) such Business Combination shall have been approved by the
affirmative vote of the Corporation's stockholders required by law, if
any such vote is so required: or
(b) all of the following conditions satisfied in clauses (i) through
(vii) of this paragraph (b) have been satisfied:
(i) such Business Combination shall have been approved by the
affirmative vote of holders of a majority of the voting power of all
outstanding shares of Voting Stock, regardless of class and voting
together as a single voting class;
(ii) the aggregate amount of (A) the cash and (B) the Fair
Market Value (as defined in paragraph (i) of Section 3 of this Article
Fourteenth), as of the date of the consummation of the Business
Combination (the "Consummation Date"), of consideration other than
cash received or to be received, per share, by holders of shares of
Common Stock in such Business Combination, shall be at least equal to
the higher of the following:
(I) (if applicable) the highest per share price (including
any brokerage commissions, transfer taxes and soliciting dealers'
fees) paid or agreed to be paid by the Interested Stockholder
which is (or the Affiliate or Associate of which is) a party to
such Business Combination for any shares of Common Stock (x)
within the two-year period immediately prior to and including the
date of the final public announcement of the terms of the
proposed Business Combination (the "Announcement Date"), or (y)
in the transaction in which it became an Interested Stockholder,
whichever is higher; or
5
(II) the Fair Market Value per share of Common Stock (x) on
the Announcement Date, or (y) on the date on which the Interested
Stockholder became an Interested Stockholder (the "Determination
Date"), whichever is higher;
(iii) the aggregate amount of (A) the cash and (B) the Fair
Market Value, as of the Consummation Date, of consideration other than
cash received or to be received, per share, by holders of shares of
any class of outstanding Voting Stock other than Common Stock in such
Business Combination, shall be at least equal to the highest of the
following (it being intended that the requirements of this clause
(iii) shall be required to be met with respect to every class of
outstanding Voting Stock other than Common Stock, whether or not such
Interested Stockholder (or such Affiliate or Associate) has previously
acquired any shares of a particular class of Voting Stock):
(I) (if applicable) the highest per share price (including
any brokerage commissions, transfer taxes and soliciting dealers'
fees) paid or agreed to be paid by the Interested Stockholder for
any shares of such class of Voting Stock (x) within the two-year
period immediately prior to the Announcement Date, or (y) in the
transaction in which it became an Interested Stockholder,
whichever is higher;
(II) (if applicable) the highest preferential amount per
share to which the holders of shares of such class of Voting
Stock are entitled in the event of any voluntary or involuntary
liquidation, dissolution or winding up of the Corporation; or
(III) the Fair Market Value per share of such class of
Voting Stock (x) on the Announcement Date, or (y) on the
Determination Date, whichever is higher;
(iv) the consideration to be received by the holders of a
particular class of outstanding Voting Stock (including Common Stock)
shall be in cash or in the same form as the Interested Stockholder has
previously paid (or agreed to pay) for shares of such class of Voting
Stock; if the Interested Stockholder has paid for shares of any class
of Voting Stock with varying forms of consideration, the form of
consideration to be received by holders of shares of such class of
Voting Stock shall be either cash or the form used to acquire the
largest number of shares of such class of Voting Stock previously
acquired by such Interested Stockholder, and the price determined in
accordance with clauses (ii) and (iii) of this paragraph (b) shall be
subject to appropriate adjustment in the event of any stock dividend,
stock split, combination of shares or similar event;
6
(v) after such Interested Stockholder has become an Interested
Stockholder, and prior to the consummation of such Business
Combination, neither such Interested Stockholder nor any of its
Affiliates or Associates shall have become the beneficial owner of any
additional shares of Voting Stock, except (A) as part of the action
which resulted in such Interested Stockholder becoming an Interested
Stockholder, or (B) upon conversion of convertible securities acquired
by it prior to such Interested Stockholder becoming an Interested
Stockholder, upon exercise of warrants acquired by it prior to such
Interested Stockholder becoming an Interested Stockholder, or as a
result of a stock split or a PRO RATA stock dividend;
(vi) after such Interested Stockholder has become an Interested
Stockholder, neither such Interested Stockholder nor any of its
Affiliates or Associates shall have received the benefit, directly or
indirectly (except proportionately as a stockholder), of any loans,
advances, guarantees, pledges or other financial assistance or any tax
credits or other tax advantages provided by the Corporation, whether
in anticipation of or in connection with such Business Combination or
otherwise; and
(vii) a proxy or information statement describing the proposed
Business Combination and complying with the requirements of the
Securities Exchange Act of 1934, as amended, and the rules and
regulations thereunder (or any subsequent provisions replacing such
Act, rules and/or regulations) shall be mailed to stockholders of the
Corporation at least thirty (30) days prior to the consummation of
such Business Combination (whether or not such proxy or information
statement is required to be mailed pursuant to such Act, rules and/or
regulations or such subsequent provisions).
3. For the purposes of this Certificate of Incorporation, the following
definitions shall apply:
(a) "Continuing Director" means (i) any member of the Board of
Directors who (A) is not an Interested Stockholder or an Affiliate or
Associate of an Interested Stockholder and (B) was a member of the Board of
Directors prior to the time that an Interested Stockholder became an
Interested Stockholder, and (ii) any person who is elected or nominated to
succeed a Continuing Director, or to join the Board of Directors, by a
majority of the Continuing Directors.
(b) "Business Combination" means any one or more of the following
transactions referred to in clauses (i) through (vi) of this paragraph (b):
(i) any merger or consolidation of the Corporation or any
Subsidiary (as defined in paragraph (h) of this Section 3) with or
into (A) any Interested Stockholder or (B) any other corporation
(whether or not itself an Interested
7
Stockholder) which immediately before is, or after such merger or
consolidation would be, an Affiliate or Associate of an Interested
Stockholder;
(ii) any sale, lease, exchange, mortgage, pledge, transfer or
other disposition (in one transaction or a series of related
transactions) to or with any Interested Stockholder, Affiliate and/or
any Associate of any Interested Stockholder of any assets of the
Corporation and/or any Subsidiary, where such assets have an aggregate
Fair Market Value of Twenty-Five Million Dollars ($25,000,000) or
more;
(iii) the issuance or transfer by the Corporation and/or any
Subsidiary (in one transaction or a series of related transactions) of
any equity securities of the Corporation and/or any Subsidiary to a
person which, immediately prior to such issuance or transfer, is an
Interested Stockholder or an Affiliate or Associate of an Interested
Stockholder, where such equity securities have an aggregate Fair
Market Value of Ten Million Dollars ($10,000,000) or more;
(iv) the adoption of any plan or proposal for the liquidation or
dissolution of the Corporation;
(v) any reclassification of securities (including any reverse
stock split) or recapitalization of the Corporation, or any merger or
consolidation of the Corporation with any of its Subsidiaries or any
similar transaction (whether or not with or into or otherwise
involving an Interested Stockholder), which has the effect, directly
or indirectly, of increasing the percentage of the outstanding shares
of any class of equity or convertible securities of the Corporation or
any Subsidiary which is directly or indirectly owned by any Interested
Stockholder or by any Affiliate and/or Associate of any Interested
Stockholder; or
(vi) any agreement, contract or other arrangement providing for
any of the transactions described in clauses (i) through (v) of this
paragraph (b).
(c) A "person" means an individual, firm, partnership, trust,
corporation or other entity.
(d) "Interested Stockholder" means any person who or which, together
with its Affiliates and Associates, as of the record date for the
determination of stockholders entitled to notice of, and to vote on, any
Business Combination, the removal of a director or the adoption of any
proposed amendment, alteration, rescission or repeal of any provision of
this Certificate of Incorporation or any Bylaw, or immediately prior to the
Consummation Date:
(i) is the beneficial owner (as defined in paragraph (e) of this
Section 3), directly or indirectly, of ten percent (10%) or more of
the voting power of (A)
8
all outstanding shares of Voting Stock or (B) all outstanding shares
of the capital stock of a Subsidiary having general voting power
("Subsidiary Stock"); or
(ii) is an assignee of or has otherwise succeeded to any share
of Voting Stock or Subsidiary Stock which was, at any time within the
two-year period prior thereto, beneficially owned by any person who at
such time was an Interested Stockholder, and such assignment or
succession shall have occurred in the course of a transaction or
series of transactions not involving a public offering within the
meaning of the Securities Act of 1933, as amended, and the rules and
regulations thereunder (or any subsequent provisions replacing such
Act, rules and/or regulations);
PROVIDED, HOWEVER, that the term "Interested Stockholder" shall not include
(A) the Corporation or any Subsidiary or (B) any profit-sharing, employee
stock ownership or other employee benefit plan of the Corporation or any
Subsidiary, or any trustee of, or fiduciary with respect to, any such plan
when acting in such capacity.
(e) A person is the "beneficial owner" of any shares of capital
stock:
(i) which such person or any of its Affiliates or Associates
beneficially owns, directly or indirectly;
(ii) which such person or any of its Affiliates or Associates
has (A) the right to acquire (whether such right is exercisable
immediately or only after the passage of time), pursuant to any
agreement, arrangement or understanding or upon the exercise of
conversion rights, exchange rights, warrants or options, or otherwise,
or (B) the right to vote pursuant to any agreement, arrangement or
understanding; or
(iii) which are beneficially owned, directly or indirectly, by
any other person with which such first-mentioned person or any of its
Affiliates or Associates has any agreement, arrangement or
understanding for the purpose of acquiring, holding, voting or
disposing of any shares of capital stock of the Corporation or a
Subsidiary, as the case may be.
(f) "Voting Stock" means the capital stock of the Corporation having
general voting power. For the purpose of determining whether a person is an
Interested Stockholder pursuant to paragraph (d) of this Section 3, the
number of shares of Voting Stock or Subsidiary Stock, as the case may be,
deemed to be outstanding shall include shares deemed owned by a beneficial
owner through application of paragraph (e) of this Section 3, but shall not
include any other shares of Voting Stock or Subsidiary Stock, as the case
may be, which may be issuable to any other person pursuant to any
agreement, arrangement or understanding, or upon exercise of conversion
rights, warrants or options, or otherwise.
9
(g) "Affiliate" and "Associate" have the respective meanings given to
those terms in Rule 12b-2 of the General Rules and Regulations under the
Securities Exchange Act of 1934, as amended, as in effect on January 1,
1985.
(h) "Subsidiary" means any corporation of which a majority of any
class of equity security (as defined in Rule 3a 11-1 of the General Rules
and Regulations under the Securities Exchange Act of 1934, as amended, as
in effect on January 1, 1985) is owned, directly or indirectly, by the
Corporation.
(i) "Fair Market Value" means (i) in the case of stock (A) the
highest closing sale price during the 30-day period including and
immediately preceding the date in the question of a share of such stock on
the Composite Tape for New York Stock Exchange-Listed Stocks, or (B) if
such stock is not quoted on the Composite Tape, the highest closing sale
price during such 30-day period on the New York Stock Exchange, or (C) if
such stock is not listed on such Exchange, the highest closing sale price
during such 30-day period on the principal United States securities
exchange registered under the Securities Exchange Act of 1934, as amended,
on which such stock is listed, or (D) if such stock is not listed on any
such exchange, the highest closing bid quotation with respect to a share of
such stock on the National Association of Securities Dealers, Inc.
Automated Quotations System or any system then in use during such 30-day
period, or (E) if no such quotations are available, the fair market value
on the date in question of a share of such stock as determined in good
faith by a majority of the Continuing Directors (or if there are no
Continuing Directors, then by a majority of the Board of Directors), and
(ii) in the case of property other than cash or stock, the fair market
value of such property on the date in question as determined in good faith
by a majority of the Continuing Directors (or if there are no Continuing
Directors, then by a majority of the Board of Directors).
(j) In the event of any Business Combination in which the Corporation
survives, the phrase "consideration other than cash received or to be
received" as used in clauses (ii) and (iii) of paragraph (b) of Section 2
of this Article Fourteenth shall include the shares of Common Stock and/or
the shares of any other class of Voting Stock retained by the holder of
such shares.
4. A majority of the Continuing Directors shall have the power and duty to
determine, for purposes of this Article Fourteenth, on the basis of information
known to them: (a) whether a person is an Interested Stockholder, (b) the number
of shares of Voting Stock or Subsidiary Stock beneficially owned by any person,
(c) whether a person is an Affiliate or Associate of another person, (d) whether
a person has an agreement, arrangement or understanding with another person as
to the matters referred to in clause (vi) of paragraph (b), or clause (ii) or
(iii) of paragraph (e), of Section 3 of this Article Fourteenth, (e) whether any
particular assets of the Corporation and/or any Subsidiary have an aggregate
Fair Market Value of Twenty-Five Million Dollars ($25,000,000) or more, or (f)
whether the consideration received for the issuance or transfer of securities by
the Corporation and/or any Subsidiary has an aggregate Fair Market
10
Value of Ten Million Dollars ($10,000,000) or more. In furtherance and not in
limitation of the preceding powers and duties set forth in this Section 4, a
majority of the Continuing Directors shall have the power and duty to interpret
all of the terms and provisions of this Article Fourteenth.
5. Nothing contained in this Article Fourteenth shall be construed to
relieve any Interested Stockholder or any Affiliate or Associate thereof from
any fiduciary obligation imposed by law.
6. The fact that any action or transaction complies with the provisions of
this Article Fourteenth shall not be construed to impose any fiduciary duty,
obligation or responsibility on the Board of Directors or any member thereof to
approve such action or transaction or recommend its adoption or approval to the
stockholders of the Corporation, nor shall such compliance limit, prohibit or
otherwise restrict in any manner the Board of Directors, or any member thereof,
with respect to evaluations of, or actions and responses taken with respect to,
such action or transaction.
FIFTEENTH: To the maximum extent permissible under Section 262 of the
General Corporation Law of the State of Delaware, the stockholders of the
Corporation shall be entitled to the statutory appraisal rights provided
therein, notwithstanding any exception otherwise provided therein, with respect
to any Business Combination involving the Corporation and any Interested
Stockholder (or any Affiliate or Associate of any Interested Stockholder), which
requires the affirmative vote specified in paragraph (a) of Section I of Article
Fourteenth hereof.
SIXTEENTH: The provisions set forth in this Article Sixteenth and in
Articles Fourth, Fifth, Sixth, Seventh, Eighth, Ninth, Tenth, Eleventh, Twelfth,
Fourteenth and Fifteenth hereof may not be repealed, rescinded, altered or
amended in any respect, and no other provision or provisions may be adopted
which impair(s) in any respect the operation or effect of any such provision,
except by the affirmative vote of the holders of not less than eighty percent
(80%) of the voting power of all outstanding shares of Voting Stock regardless
of class and voting together as a single voting class and, where such action is
proposed by an Interested Stockholder or by any Associate or Affiliate of an
Interested Stockholder, the affirmative vote of the holders of a majority of the
voting power of all outstanding shares of Voting Stock, regardless of class and
voting together as a single class, other than shares held by the Interested
Stockholder which proposed (or the Affiliate or Associate of which proposed)
such action, or any Affiliate or Associate of such Interested Stockholder,
PROVIDED, HOWEVER, that where such action is approved by a majority of the
Continuing Directors, the affirmative vote of a majority of the voting power of
all outstanding shares of Voting Stock, regardless of class and voting together
as a single voting class, shall be required for approval of such action.
SEVENTEENTH: The Corporation reserves the right to adopt, repeal rescind,
alter or amend in any respect any provision contained in this Certificate of
Incorporation in the manner now or hereafter prescribed by applicable law, and
all rights conferred on stockholders herein are granted subject to this
reservation. Notwithstanding the preceding sentence, the provisions
11
set forth in Articles Fourth, Fifth, Sixth, Seventh, Eighth, Ninth, Tenth,
Eleventh, Twelfth, Fourteenth, Fifteenth and Sixteenth may not be repealed,
rescinded, altered or amended in any respect, and no other provision or
provisions may be adopted which impair(s) in any respect the operation or effect
of any such provision, unless such action is approved as specified in Article
Sixteenth hereof.
EIGHTEENTH: A director of the Corporation shall not be personally liable
to the Corporation or to its stockholders for monetary damages for breach of
fiduciary duty as a director, except for liability (i) for any breach of the
director's duty of loyalty to the Corporation or to its stockholders, (ii) for
acts or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) under Section 174 of the General Corporation Law
of the State of Delaware, or (iv) for any transaction from which the director
derives any improper personal benefit. If, after approval of this Article by
the stockholders of the Corporation, the General Corporation Law of the State of
Delaware is amended to authorize the further elimination or limitation of the
liability of directors, then the liability of a director of the Corporation
shall be eliminated or limited to the fullest extent permitted by the General
Corporation Law of the State of Delaware, as so amended.
Any repeal or modification of this Article by the stockholders of the
Corporation as provided in Article Seventeen hereof shall not adversely affect
any right or protection of a director of the Corporation existing at the time of
such repeal or modification.
4. This Restated Certificate of Incorporation was duly adopted by the
Board of Directors in accordance with Section 245 of the General Corporation Law
of the State of Delaware.
IN WITNESS WHEREOF, said Northrop Grumman Corporation has caused this
Certification to be signed by Kent Kresa, Chairman, President and Chief
Executive Officer, and attested by Sheila M. Gibbons, its Corporate Vice
President and Secretary, this 10th day of June, 1994.
BY /s/ KENT KRESA
__________________________________
Kent Kresa
Chairman, President and
Chief Executive Officer
ATTEST:
BY /s/ SHEILA M. GIBBONS
_______________________________
Sheila M. Gibbons
Corporate Vice President
and Secretary
12
EXHIBIT 4-2
-----------
BYLAWS
OF
NORTHROP GRUMMAN CORPORATION
(A Delaware Corporation)
ARTICLE I
OFFICES
Section 1.01. REGISTERED OFFICE. The registered office of Northrop
Grumman Corporation (the "Corporation") in the State of Delaware shall be at
Corporation Trust Center, 1209 Orange Street, City of Wilmington, County of New
Castle, and the name of the registered agent at that address shall be The
Corporation Trust Company.
Section 1.02. PRINCIPAL EXECUTIVE OFFICE. The principal executive office
of the Corporation shall be located at 1840 Century Park East, Los Angeles,
California 90067. The Board of Directors of the Corporation (the "Board of
Directors") may change the location of said principal executive office.
Section 1.03. OTHER OFFICES. The Corporation may also have an office or
offices at such other place or places, either within or without the State of
Delaware, as the Board of Directors may from time to time determine or as the
business of the Corporation may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 2.01. ANNUAL MEETINGS. The annual meeting of stockholders of the
Corporation shall be held between May 1 and July 1 of each year on such date and
at such time as the Board of Directors shall determine. At each annual meeting
of stockholders, directors shall be elected in accordance with the provisions of
Section 3.04 hereof and any other proper business may be transacted.
Section 2.02. SPECIAL MEETINGS. Special meetings of stockholders for any
purpose or purposes may be called at any time by a majority of the Board of
Directors, the Chairman of the Board, or by the President and Chief Executive
Officer. Special meetings may not be called by any other person or persons.
Each special meeting shall be held at such date and time as is requested by the
person or persons calling the meeting, within the limits fixed by law.
Section 2.03. PLACE OF MEETINGS. Each annual or special meeting of
stockholders shall be held at such location as may be determined by the Board of
Directors or, if no such determination is made, at such place as may be
determined by the Chairman of the Board. If no location is so determined, any
annual or special meeting shall be held at the principal executive office of the
Corporation.
Section 2.04. NOTICE OF MEETINGS. Written notice of each annual or
special meeting of stockholders stating the date and time when, and the place
where, it is to be held shall be delivered either personally or by mail to
stockholders entitled to vote at such meeting not less than ten (10) nor more
than sixty (60) days before the date of the meeting. The purpose or purposes
for which the meeting is called may, in the case of an annual meeting, and
shall, in the case of a special meeting, also be stated. If mailed, such notice
shall be directed to a stockholder at his address as it shall appear on the
stock books of the Corporation, unless he shall have filed with the Secretary of
the Corporation a written request that notices intended for him be mailed to
some other address, in which case such notice shall be mailed to the address
designated in such request.
1
Section 2.05. CONDUCT OF MEETINGS. All annual and special meetings of
stockholders shall be conducted in accordance with such rules and procedures as
the Board of Directors may determine subject to the requirements of applicable
law and, as to matters not governed by such rules and procedures, as the
chairman of such meeting shall determine. The chairman of any annual or special
meeting of stockholders shall be the Chairman of the Board. The Secretary, or
in the absence of the Secretary, a person designated by the Chairman of the
Board, shall act as secretary of the meeting.
Section 2.06. NOTICE OF BUSINESS. At any meeting of stockholders, only
such business shall be conducted as shall be a proper matter for stockholder
action under the laws of the State of Delaware and as shall have been brought
before the meeting (a) by or at the direction of the Board of Directors or (b)
by any stockholder of the Corporation who is a stockholder of record at the time
of giving of the notice provided for in this Section 2.06 who shall be entitled
to vote at such meeting and who complies with the notice procedures set forth in
this Section 2.06. For business to be properly brought before a meeting of
stockholders by a stockholder, the stockholder shall have given timely notice
thereof in writing to the Secretary. To be timely, a stockholder's notice shall
be delivered to or mailed and received at the principal executive office of the
Corporation not less than sixty (60) days nor more than ninety (90) days prior
to the meeting: provided, however, that in the event that less than seventy (70)
days' notice or prior public disclosure of the date of the meeting is given or
made to stockholders, notice by the stockholder to be timely must be so received
not later than the close of business on the 10th day following the date on which
such notice of the date of the meeting was mailed or such public disclosure was
made, whichever first occurs. Such stockholder's notice to the Secretary shall
set forth as to each matter the stockholder proposes to bring before the meeting
(a) a brief description of the business desired to be brought before the
meeting, the reasons for conducting such business at the meeting, and, in the
event that such business includes a proposal to amend either the Certificate of
Incorporation or these Bylaws, the language of the proposed amendment, (b) the
name and address as they appear on the Corporation's books of the stockholder
proposing such business, (c) the class and number of shares of capital stock of
the Corporation which are beneficially owned by such stockholder and (d) any
material interest of such stockholder in such business. Notwithstanding
anything in these Bylaws to the contrary, no business shall be conducted at a
stockholder meeting except in accordance with the procedures set forth in this
Section 2.06. The chairman of the meeting shall, if the facts warrant,
determine and declare to the meeting that business was not properly brought
before the meeting and in accordance with the provisions of these Bylaws and if
he should so determine, he shall so declare to the meeting and any such business
not properly brought before the meeting shall not be transacted. Not
withstanding the foregoing provisions of this Section 2.06, a stockholder shall
also comply with all applicable requirements of the Securities Exchange Act of
1934 as amended and the rules and regulations thereunder with respect to the
matters set forth in this Section 2.06. Nothing in this Bylaw shall be deemed
to affect any rights of stockholders or the Corporation under Rule 14a-8 of the
Securities Exchange Act of 1934 with respect to proposals which are requested to
be included in the Corporation's proxy statement.
Section 2.07. QUORUM. At any meeting of stockholders, the presence, in
person or by proxy, of the holders of record of a majority of shares then issued
and outstanding and entitled to vote at the meeting shall constitute a quorum
for the transaction of business; provided, however, that this Section 2.06 shall
not affect any different requirement which may exist under statute, pursuant to
the rights of any authorized class or series of stock, or under the Certificate
of Incorporation of the Corporation (the "Certificate") for the vote necessary
for the adoption of any measure governed thereby. In the absence of a quorum,
the stockholders present in person or by proxy, by majority vote and without
further notice, may adjourn the meeting from time to time until a quorum is
attained. At any reconvened meeting following such an adjournment at which a
quorum shall be present, any business may be transacted which might have been
transacted at the meeting as originally notified.
Section 2.08. VOTES REQUIRED. A majority of the votes cast at a duly
called meeting of stockholders, at which a quorum is present, shall be
sufficient to take or authorize action upon any matter which may properly come
before the meeting, unless the vote of a greater or different number thereof is
required by statute, by the rights of any authorized class of stock or by the
Certificate. Unless the Certificate or a resolution of the Board of Directors
adopted in connection with the issuance of shares of any class or series of
stock provides for a greater or lesser number of votes per share, or limits or
denies voting rights, each outstanding share of stock, regardless of class,
shall be entitled to one vote on each matter submitted to a vote at a meeting of
stockholders.
2
Section 2.09. PROXIES. A stockholder may vote the shares owned of record
by him either in person or by proxy executed in writing (which shall include
writings sent by telex, telegraph, cable or facsimile transmission) by the
stockholder himself or by his duly authorized attorney-in-fact. No proxy shall
be valid after three (3) years from its date, unless the proxy provides for a
longer period. Each proxy shall be in writing, subscribed by the stockholder or
his duly authorized attorney-in-fact, and dated, but it need not be sealed,
witnessed or acknowledged.
Section 2.10. STOCKHOLDER ACTION. Any action required or permitted to be
taken by the stockholders of the Corporation must be effected at a duly called
annual meeting or special meeting of stockholders of the Corporation, unless
such action requiring or permitting shareholder approval is approved by a
majority of the Continuing Directors (as defined in the Certificate), in which
case such action may be authorized or taken by the written consent of the
holders of outstanding shares of stock having not less than the minimum voting
power that would be necessary to authorize or take such action at a meeting of
stockholders at which all shares entitled to vote thereon were present and
voted, provided all other requirements of applicable law and the Certificate
have been satisfied.
Section 2.11. LIST OF STOCKHOLDERS. The Secretary of the Corporation
shall prepare and make (or cause to be prepared and made), at least ten (10)
days before every meeting of stockholders, a complete list of the stockholders
entitled to vote at the meeting, arranged in alphabetical order and showing the
address of, and the number of shares registered in the name of, each
stockholder. Such list shall be open to the examination of any stockholder, for
any purpose germane to the meeting, during ordinary business hours, for a period
of at least ten (10) days prior to the meeting, either at a place within the
city where the meeting is to be held, which place shall be specified in the
notice of the meeting, or, if not so specified, at the place where the meeting
is to be held. The list shall also be produced and kept at the time and place
of the meeting during the duration thereof, and may be inspected by any
stockholder who is present.
Section 2.12. INSPECTORS OF ELECTION. In advance of any meeting of
stockholders, the Board of Directors may appoint Inspectors of Election to act
at such meeting or at any adjournment or adjournments thereof. If such
Inspectors are not so appointed or fail or refuse to act, the chairman of any
such meeting may (and, upon the demand of any stockholder or stockholder's
proxy, shall) make such an appointment.
The number of Inspectors of Election shall be one (1) or three (3). If
there are three (3) Inspectors of Election, the decision, act or certificate of
a majority shall be effective and shall represent the decision, act or
certificate of all. No such Inspector need be a stockholder of the Corporation.
The Inspectors of Election shall determine the number of shares
outstanding, the voting power of each, the shares represented at the meeting,
the existence of a quorum and the authenticity, validity and effect of proxies;
they shall receive votes, ballots or consents, hear and determine all challenges
and questions in any way arising in connection with the right to vote, count and
tabulate all votes or consents, determine when the polls shall close and
determine the result; and finally, they shall do such acts as may be proper to
conduct the election or vote with fairness to all stockholders. On request, the
Inspectors shall make a report in writing to the secretary of the meeting
concerning any challenge, question or other matter as may have been determined
by them and shall execute and deliver to such secretary a certificate of any
fact found by them.
ARTICLE III
DIRECTORS
Section 3.01. POWERS. The business and affairs of the Corporation shall
be managed by and be under the direction of the Board of Directors. The Board
of Directors shall exercise all the powers of the Corporation, except those that
are conferred upon or reserved to the stockholders by statute, the Certificate
or these Bylaws.
Section 3.02. NUMBER. Except as otherwise fixed pursuant to the
provisions of Section 2 of Article Fourth of the Certificate in connection with
rights to elect additional directors under specified circumstances which
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may be granted to the holders of any class or series of Preferred Stock, par
value One Dollar ($1.00) per share of the Corporation ("Preferred Stock"), the
number of directors shall be fixed from time to time by resolution of the Board
of Directors but shall not be less than three (3). The Board of Directors, as
of May 17, 1989, and thereafter, shall consist of fourteen (14) directors until
changed as herein provided.
Section 3.03. INDEPENDENT OUTSIDE DIRECTORS. At least sixty percent (60%)
of the members of the Board of Directors of the Corporation shall at all times
be "Independent Outside Directors", which term is hereby defined to mean any
director who:
1. has not in the last five (5) years been an officer or employee of
the Corporation or any of its subsidiaries or affiliates; and
2. is not related to an officer of the Corporation (or an officer of
any of the Corporation's parents, subsidiaries or affiliates) by blood,
marriage or adoption (except relationships more remote than first cousin);
and
3. is not, and has not within the last two (2) years been, an
officer, director or employee of, and does not own, and has not within the
last two (2) years owned, directly or indirectly, in excess of one percent
(1%) of any firm, corporation or other business or professional entity
which has made or proposes to make during either the Corporation's or such
entity's last or next fiscal year payments for property or services in
excess of one percent (1%) of the gross revenues either of the Corporation
for its last fiscal year or of such entity for its last fiscal year, but
excluding payments determined by competitive bids, public utility services
at rates set by law or government authority, or payments arising solely
from the ownership of securities, or to which the Corporation was indebted
at any time during the Corporation's last fiscal year in an aggregate
amount in excess of one percent (1%) of the Corporation's total assets at
the end of such fiscal year or Five Million Dollars ($5,000,000), whichever
is less, but excluding debt securities which have been publicly offered or
which are publicly traded; and
4. is not a director, partner, officer or employee of an investment
banking firm which has performed services for the Corporation in the last
two (2) years or which the Corporation proposes to have perform services in
the next year other than as a participating underwriting in a syndicate;
and
5. is not a control person of the Corporation (other than as a
director of the Corporation) as defined by the regulations of the
Securities and Exchange Commission.
Section 3.04. ELECTION AND TERM OF OFFICE. Except as provided in Section
3.07 hereof and subject to the right to elect additional directors under
specified circumstances which may be granted, pursuant to the provisions of
Section 2 of Article Fourth of the Certificate, to the holders of any class or
series of Preferred Stock, directors shall be elected by the stockholders of the
Corporation. The Board of Directors shall be and is divided into three classes:
Class I, Class II and Class III. The number of directors in each class shall be
the whole number contained in the quotient obtained by dividing the authorized
number of directors (fixed pursuant to Section 3.02 hereof) by three. If a
fraction is also contained in such quotient, then additional directors shall be
apportioned as follows: if such fraction is one-third, the additional director
shall be a member of Class I; and if such fraction is two-thirds, one of the
additional directors shall be a member of Class I and the other shall be a
member of Class II. Each director shall serve for a term ending on the date of
the third annual meeting of stockholders of the Corporation following the annual
meeting at which such director was elected; provided, however, that the
directors first elected to Class I shall serve for a term ending on the date of
the annual meeting next following the end of the calendar year 1985, the
directors first elected to Class II shall serve for a term ending on the date of
the second annual meeting next following the end of the calendar year 1985 and
the directors first elected to Class III shall serve for a term ending on the
date of the third annual meeting next following the end of the calendar year
1985.
Notwithstanding the foregoing provisions of this Section 3.04: each
director shall serve until his successor is elected and qualified or until his
death, resignation or removal; no decrease in the authorized number of directors
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shall shorten the term of any incumbent director; and additional directors,
elected pursuant to Section 2 of Article Fourth of the Certificate in connection
with rights to elect such additional directors under specified circumstances
which may be granted to the holders of any class or series of Preferred Stock,
shall not be included in any class, but shall serve for such term or terms and
pursuant to such other provisions as are specified in the resolution of the
Board of Directors establishing such class or series.
Nominations for the election of directors may be made by the Board or a
committee thereof or by any stockholder entitled to vote in the election of
directors; provided, however, that a stockholder may nominate a person for
election as a director at a meeting only if written notice of such stockholder's
intent to make such nomination has been given by such stockholder to, and
received by, the Secretary of the Corporation at the principal executive offices
of the Corporation not less than sixty (60) days nor more than ninety (90) days
prior to the meeting; provided, however, that (a) in the event that less than
seventy (70) days' notice or prior public disclosure of the date of the meeting
is given or made to stockholders, notice by the stockholder to be timely must be
so received not later than the close of business on the 10th day following the
date on which such notice of the date of the meeting was mailed or such public
disclosure was made, whichever first occurs; and (b) in the event that less than
seventy (70) days shall remain from the date of public disclosure of the
adoption of this bylaw provision to the date of any meeting, notice by the
stockholder to be timely with respect to such meeting must be so received not
later than the close of business on the 10th day following the date on which
such public disclosure was made. Each such notice shall set forth: (a) the
name and address of the stockholder who intends to make the nomination and of
the person or persons to be nominated; (b) the name and address as they appear
on the Corporation's books of the stockholder intending to make such nomination;
(c) the class and number of shares of capital stock of the Corporation which are
beneficially owned by such stockholder (d) a description of all arrangements or
understandings between the stockholder and each nominee and any other person or
persons (naming such person or persons) pursuant to which the nomination or
nominations are to be made by the stockholder; (e) the occupations and business
history for the previous five years, other directorships, names of business
entities of which the proposed nominee owns a 10 percent or more equity
interest, a list of any criminal convictions, including federal and state
securities violations and such other information regarding each proposed nominee
as may be required by the federal proxy rules in effect at the time the notice
is submitted and (f) the consent of each nominee to serve as a director of the
Corporation if so elected. No person shall be eligible for election as a
director of the Corporation unless nominated in accordance with the procedures
set forth in this Section 3.04. The Chairman of any meeting of stockholders
shall direct that any nomination not made in accordance with these procedures be
disregarded.
Section 3.05. ELECTION OF CHAIRMAN OF THE BOARD. At the organizational
meeting immediately following the annual meeting of stockholders, the directors
shall elect a Chairman of the Board from among the directors who shall hold
office until the corresponding meeting of the Board of Directors in the next
year and until his successor shall have been elected or until his earlier
resignation or removal. Any vacancy in such office may be filled for the
unexpired portion of the term in the same manner by the Board of Directors at
any regular or special meeting.
Section 3.06. REMOVAL. Subject to the right to elect directors under
specified circumstances which may be granted pursuant to Section 2 of Article
Fourth of the Certificate to the holders of any class or series of Preferred
Stock, any director may be removed from office only as provided in Article Tenth
of the Certificate.
Section 3.07. VACANCIES AND ADDITIONAL DIRECTORSHIPS. Except as otherwise
provided pursuant to Section 2 of Article Fourth of the Certificate in
connection with rights to elect additional directors under specified
circumstances which may be granted to the holders of any class or series of
Preferred Stock, newly created directorships resulting from any increase in the
number of directors and any vacancies on the Board of Directors resulting from
death, resignation, disqualification, removal or other cause shall be filled
solely by the affirmative vote of a majority of the remaining directors then in
office, even though less than a quorum of the Board of Directors. Any director
elected in accordance with the preceding sentence shall hold office for the
remainder of the full term of the class of directors in which the new
directorship was created or the vacancy occurred and until such director's
successor shall have been elected and qualified. No decrease in the number of
directors constituting the Board of Directors shall shorten the term of any
incumbent director.
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Section 3.08. REGULAR AND SPECIAL MEETINGS. Regular meetings of the Board
of Directors shall be held immediately following the annual meeting of
stockholders, and at 9:00 o'clock a.m. on the third Wednesday of each succeeding
month (or, should such day fall upon a legal holiday, then on the first day
thereafter which is not a legal holiday), unless a regular meeting is otherwise
called by the Chairman of the Board in accordance with applicable law.
Special meetings of the Board of Directors shall be held upon call by or at
the direction of the Chairman of the Board, the President either of whom may be
the, Chief Executive Officer, or any two directors, except that when the Board
of Directors consists of one director, then the one director may call a special
meeting. Except as otherwise required by law, notice of each special meeting
shall be mailed to each director, addressed to him at his residence or usual
place of business, at least two days before the day on which the meeting is to
be held, or shall be sent to him at such place by telex, telegram, cable,
facsimile transmission or telephoned or delivered to him personally, not later
than the day before the day on which the meeting is to be held. Such notice
shall state the time and place of such meeting, but need not state the purpose
or purposes thereof unless otherwise required by law, the Certificate or these
Bylaws.
Notice of any meeting need not be given to any director who shall attend
such meeting in person or who shall waive notice thereof, before or after such
meeting, in a signed writing.
Section 3.09. QUORUM. At all meetings of the Board of Directors, a
majority of the fixed number of directors shall constitute a quorum for the
transaction of business, except that when the Board of Directors consists of one
director, then the one director shall constitute a quorum. In the absence of a
quorum, the directors present, by majority vote and without notice other than by
announcement, may adjourn the meeting from time to time until a quorum shall be
present. At any reconvened meeting following such an adjournment at which a
quorum shall be present, any business may be transacted which might have been
transacted at the meeting as originally notified.
Section 3.10. VOTES REQUIRED. Except as otherwise provided by applicable
law or by the Certificate, the vote of a majority of the directors present at a
meeting duly held at which a quorum is present shall be sufficient to pass any
measure.
Section 3.11. PLACE AND CONDUCT OF MEETINGS. Each regular meeting and
special meeting of the Board of Directors shall be held at a location determined
as follows: The Board of Directors may designate any place, within or without
the State of Delaware, for the holding of any meeting. If no such designation
is made: (i) any meeting called by a majority of the directors shall be held at
such location, within the county of the Corporation's principal executive
office, as the directors calling the meeting shall designate; and (ii) any other
meeting shall be held at such location, within the county of the Corporation's
principal executive office, as the Chairman of the Board may designate or, in
the absence of such designation, at the Corporation's principal executive
office. Subject to the requirements of applicable law, all regular and special
meetings of the Board of Directors shall be conducted in accordance with such
rules and procedures as the Board of Directors may approve and, as to matters
not governed by such rules and procedures, as the chairman of such meeting shall
determine. The chairman of any regular or special meeting shall be the Chairman
of the Board, or in his absence a person designated by the Board of Directors.
The Secretary, or in the absence of the Secretary a person designated by the
chairman of the meeting, shall act as secretary of the meeting.
Section 3.12. FEES AND COMPENSATION. Directors shall be paid such
compensation as may be fixed from time to time by resolutions of the Board of
Directors (a) for their usual and contemplated services as directors, (b) for
their services as members of committees appointed by the Board of Directors,
including attendance at committee meetings as well as services which may be
required when committee members must consult with management staff, and (c) for
extraordinary services as directors or as members of committees appointed by the
Board of Directors, over and above those services for which compensation is
fixed pursuant to items (a) and (b) in this Section 3.12. Compensation may be
in the form of an annual retainer fee or a fee for attendance at meetings, or
both, or in such other form or on such basis as the resolutions of the Board of
Directors shall fix. Directors shall be reimbursed for all reasonable expenses
incurred by them in attending meetings of the Board of Directors and committees
appointed
6
by the Board of Directors and in performing compensable extraordinary services.
Nothing contained herein shall be construed to preclude any director from
serving the Corporation in any other capacity, such as an officer, agent,
employee, consultant or otherwise, and receiving compensation therefor.
Section 3.13. COMMITTEES OF THE BOARD OF DIRECTORS. Subject to the
requirements of applicable law, the Board of Directors may from time to time
establish committees, including standing or special committees, which shall have
such duties and powers as are authorized by these Bylaws or by the Board of
Directors. Committee members, and the chairman of each committee, shall be
appointed by the Board of Directors. The Chairman of the Board, in conjunction
with the several committee chairmen, shall make recommendations to the Board of
Directors for its final action concerning members to be appointed to the several
committees of the Board of Directors. Any member of any committee may be
removed at any time with or without cause by the Board of Directors. Vacancies
which occur in any committee shall be filled by a resolution of the Board of
Directors. If any vacancy shall occur in any committee by reason of death,
resignation, disqualification, removal or otherwise, the remaining members of
such committee, so long as a quorum is present, may continue to act until such
vacancy is filled by the Board of Directors. The Board of Directors may, by
resolution, at any time deemed desirable, discontinue any standing or special
committee. Members of standing committees, and their chairmen, shall be elected
yearly at the organizational meeting of the Board of Directors which is held
immediately following the annual meeting of stockholders.
Section 3.14. AUDIT COMMITTEE. There shall be an Audit Committee of the
Board of Directors which shall serve at the pleasure of the Board of Directors
and be subject to its control. The Committee shall have the following
membership and powers:
1. The Committee shall have at least three (3) members. All members
of the Committee shall be Independent Outside Directors.
2. The Committee shall recommend to the Board of Directors for its
action the appointment or discharge of the Corporation's independent
auditors, based upon the Committee's judgment of the independence of the
auditors (taking into account the fees charged both for audit and non-audit
services) and the quality of its audit work. Ratification by the
stockholders of the Board of Directors' appointment of the Corporation's
independent auditors may be sought in conjunction with management's
solicitation of proxies for the annual meeting of stockholders, if so
determined by the Board of Directors. If the auditors must be replaced,
the Committee shall recommend to the Board of Directors for its action the
appointment of new auditors until the next annual meeting of stockholders.
3. The Committee shall review and approve the scope and plan of the
audit.
4. The Committee shall meet with the independent auditors at
appropriate times to review, among other things, the results of the audit
and any certification, report or opinion which the auditors propose to
render in connection with the Corporation's financial statements.
5. The Committee shall review and approve each professional service
of a non-audit nature to be provided by the auditors.
6. The Committee shall meet with the Corporation's chief internal
auditor at least once a year to review his comments concerning the adequacy
of the Corporation's system of internal accounting controls and such other
matters as the Committee may deem appropriate.
7. The Committee shall have the power to direct the auditors and the
internal audit staff to inquire into and report to it with respect to any
of the Corporation's contracts, transactions or procedures, or the conduct
of the Corporate Office, or any division, profit center, subsidiary or
other unit, or any other matter having to do with the Corporation's
business and affairs. If authorized by the Board of Directors, the
Committee may initiate special investigations in these regards.
7
8. The Committee shall have such other duties as may be lawfully
delegated to it from time to time by the Board of Directors.
Section 3.15. COMPENSATION AND MANAGEMENT DEVELOPMENT COMMITTEE. There
shall be a Compensation and Management Development Committee of the Board of
Directors which shall serve at the pleasure of the Board of Directors and be
subject to its control. The Committee shall have the following membership and
powers:
1. The Committee shall be composed of at least three (3) members.
All members of the Committee shall be Independent Outside Directors. The
principal Human Resources officer of the Corporation shall be a non-voting
member of the Committee.
2. The Committee shall recommend to the Board of Directors for its
action the amount to be appropriated for awards to be made each year to
elected officers under the Corporation's incentive compensation plan.
3. The Committee shall establish the Corporation's annual performance
objectives under the Corporation's incentive compensation plans.
4. The Committee shall make recommendations to the Board of Directors
with respect to the base salary and incentive compensation of the elected
officers. The Committee shall take final action with respect to the base
salary and incentive compensation of all other officers and employees
receiving a base salary over an amount as shall be determined from time to
time either by the Committee or the Board of Directors.
5. The Committee shall review management's recommendations and take
final action with respect to all awards to be made under the Corporation's
long-term incentive plans or other similar benefit plans which may be
adopted by the Board of Directors or the stockholders and in which
corporate officers or directors are eligible to participate, provided
however that all such awards relative to the five (5) most highly
compensated officers must be reported to the Board of Directors.
6. The Committee shall review on a continuing basis the Corporation's
general compensation policies and practices, fringe benefits and the
Corporation's compliance with its various affirmative action plans and
programs. The committee shall also review and recommend to the Board of
Directors for its final action all compensation plans in which elected
officers or directors are eligible to participate.
7. The Committee shall review from time to time and report to the
Board of Directors actions taken by management concerning the Corporation's
overall executive structure and the steps being taken to assure the
succession of qualified management.
8. The Committee shall have such other duties as may be lawfully
delegated to it from time to time by the Board of Directors.
Section 3.16. EXECUTIVE COMMITTEE. There shall be an Executive Committee
of the Board of Directors which shall serve at the pleasure of the Board of
Directors and be subject to its control. The Committee shall have the following
membership and powers:
1. The Committee shall have at least five (5) members. At least
sixty percent (60%) of the members shall be Independent Outside Directors.
2. The Committee shall review, approve and monitor the policy,
organization, charter and implementation of the Northrop Grumman Employees
Political Action Committee.
3. The Committee shall review and approve all agreements with
consultants or commission agents
8
under procedures it may adopt from time to time where the total
compensation reaches a level which shall be determined from time to time by
the Committee or where the relationship is expected to be a sensitive one.
4. The Committee shall review and report to the Board of Directors
from time to time concerning the Corporation's compliance with the
Corporation's policies, practices and procedures with respect to
consultants and commission agents.
5. The Committee shall review and make policy and budget
recommendations to the Board of Directors for its actions concerning
proposed charitable contributions and aid to higher education to be given
by the Corporation each year.
6. The Committee shall have such other duties as lawfully may be
delegated to it from time to time by the Board of Directors.
Section 3.17. FINANCE COMMITTEE. There shall be a Finance Committee of
the Board of Directors which shall serve at the pleasure of the Board of
Directors and be subject to its control. The Committee shall have the following
membership and powers:
1. The Committee shall have at least five (5) members. At least
fifty percent (50%) of the members of the Committee shall be Independent
Outside Directors. The chief financial officer of the Corporation shall be
a non-voting member of the Committee.
2. The Committee shall review and give consideration to management
requests for required specific new financing of a long-term nature, whether
debt or equity, and make recommendations to the Board of Directors for its
final action.
3. The Committee shall review the current financial condition of the
Company and planned financial requirements.
4. The Committee shall review periodically the Corporation's dividend
policy in connection with dividend declarations and make recommendations to
the Board of Directors for its final action.
5. The Committee shall consider management's recommendations
concerning acquisitions, mergers or divestments which management has
determined to be of an unusual or material nature and shall make
recommendations to the Board of Directors for its final action.
6. The Committee shall consider management's recommendations
concerning contracts or programs which management has determined to be of
an unusual or material nature and shall make recommendations to the Board
of Directors for its final action.
7. The Committee shall periodically review the investment performance
of the employee benefit plans, capital asset requirements and short-term
investment policy when appropriate.
8. The Committee shall have such other duties as lawfully may be
delegated to it from time to time by the Board of Directors.
Section 3.18. NOMINATING COMMITTEE. There shall be a Nominating Committee
of the Board of Directors which shall serve at the pleasure of the Board of
Directors and be subject to its control. The Committee shall have the following
membership and powers:
1. The Committee shall have at least three (3) members. All members
of the Committee shall be Independent Outside Directors.
9
2. The Committee shall review candidates to serve as directors and
shall recommend nominees to the Board of Directors for election at each
annual meeting of stockholders or other special meetings where directors
are to be elected and shall recommend persons to serve as proxies to vote
proxies solicited by management in connection with such meetings.
3. The Committee shall cause the names of all director candidates
that are approved by the Board of Directors to be listed in the
Corporation's proxy materials and shall support the election of all
candidates so nominated by the Board of Directors to the extent permitted
by law.
4. The Committee shall review and make recommendations to the Board
of Directors for its final action concerning the composition and size of
the Board of Directors, its evaluation of the performance of incumbent
directors, its recommendations concerning the compensation of the
Directors, its recommendations concerning directors to fill vacancies and
its evaluation and recommendations concerning potential candidates to serve
in the future on the Board of Directors to assure the Board's continuity
and succession.
5. The Committee shall have such other duties as lawfully may be
delegated to it from time to time by the Board of Directors.
Section 3.19. MEETINGS OF COMMITTEES. Each committee of the Board of
Directors shall fix its own rules of procedure consistent with the provisions of
applicable law and of any resolutions of the Board of Directors governing such
committee. Each committee shall meet as provided by such rules or such
resolution of the Board of Directors, and shall also meet at the call of its
chairman or any two (2) members of such committee. Unless otherwise provided by
such rules or by such resolution, the provisions of these Bylaws under Article
III entitled "Directors" relating to the place of holding meetings and the
notice required for meetings of the Board of Directors shall govern the place of
meetings and notice of meetings for committees of the Board of Directors. A
majority of the members of each committee shall constitute a quorum thereof,
except that when a committee consists of one (1) member, then the one (1) member
shall constitute a quorum. In the absence of a quorum, a majority of the
members present at the time and place of any meeting may adjourn the meeting
from time to time until a quorum shall be present and the meeting may be held as
adjourned without further notice or waiver. Except in cases where it is
otherwise provided by the rules of such committee or by a resolution of the
Board of Directors, the vote of a majority of the members present at a duly
constituted meeting at which a quorum is present shall be sufficient to pass any
measure by the committee.
ARTICLE IV
OFFICERS
Section 4.01. DESIGNATION, ELECTION AND TERM OF OFFICE. The Corporation
shall have a Chairman of the Board and/or a President either of whom may be
designated Chief Executive Officer by the Board of Directors, such Vice
Presidents (each of whom may be assigned by the Board of Directors or the Chief
Executive Officer an additional title descriptive of the functions assigned to
him and one or more of whom may be designated Executive, Group or Senior Vice
President) as the Board of Directors deems appropriate, a Secretary and a
Treasurer. These officers shall be elected annually by the Board of Directors
at the organizational meeting immediately following the annual meeting of
stockholders, and each such officer shall hold office until the corresponding
meeting of the Board of Directors in the next year or until his earlier
resignation, death or removal. Any vacancy in any of the above offices may be
filled for an unexpired portion of the term by the Board of Directors at any
regular special meeting. The Chief Executive Officer may, by a writing filed
with the Secretary, designate titles for employees and agents, as, from time to
time, may appear necessary or advisable in the conduct of the affairs of the
Corporation and, in the same manner, terminate or change such titles.
10
Section 4.02. CHAIRMAN OF THE BOARD. The Board of Directors shall
designate the Chairman of the Board from among its members. The Chairman of the
Board of Directors shall preside at all meetings of the Board and the
Shareholders, and shall perform such other duties as shall be delegated to him
by the Board or the officer designated as chief executive.
Section 4.03. PRESIDENT. The President shall perform such duties and have
such responsibilities as may from time to time be delegated or assigned to him
by the Board of Directors or the officer designated as chief executive.
Section 4.04. CHIEF EXECUTIVE. The Board of Directors shall designate
either the Chairman of the Board or the President to be the chief executive of
the Corporation. The officer so designated shall be responsible for the general
supervision, direction and control of the business and affairs of the
Corporation.
Section 4.05. CHIEF FINANCIAL OFFICER. The Chief Financial Officer of the
Corporation shall be responsible to the Chief Executive Officer for the
management and supervision of all financial matters and to provide for the
financial growth and stability of the Corporation. He shall attend all regular
meetings of the Board of Directors and keep the Directors currently informed
concerning all significant financial matters that could impact upon the business
or affairs of the Corporation. He shall also perform such additional duties as
may be assigned to him from time to time by the Board of Directors or the Chief
Executive Officer.
Section 4.06. EXECUTIVE VICE PRESIDENTS, SENIOR VICE PRESIDENTS AND VICE
PRESIDENTS. Executive vice presidents, senior vice presidents and vice
presidents of the Corporation that are elected by the Board of Directors shall
perform such duties as may be assigned to them from time to time by the Chief
Executive Officer.
Section 4.07. CHIEF LEGAL OFFICER. The chief legal officer of the
Corporation shall be the General Counsel who shall be responsible to the Chief
Executive Officer for the management and supervision of all legal matters. The
General Counsel shall attend all regular meetings of the Board of Directors and
shall keep the Directors currently informed concerning all significant legal
matters, particularly those involving important business, legal, moral or
ethical issues that could impact upon the business or affairs of the
Corporation.
Section 4.08. SECRETARY. The Secretary shall keep the minutes of the
meetings of the stockholders, the Board of Directors and all committee meetings.
The Secretary shall be the custodian of the corporate seal and shall affix it to
all documents which he is authorized by law or the Board of Directors to sign
and seal. The Secretary also shall perform such other duties as may be assigned
from time to time by the Chief Executive Officer.
Section 4.09. TREASURER. The Treasurer shall be accountable to the Senior
Vice President, Finance, and shall perform such duties as may be assigned to the
Treasurer from time to time by the Senior Vice President, Finance.
Section 4.10. APPOINTED OFFICERS. The Chief Executive Officer may appoint
one or more Corporate Staff Vice Presidents, officers of groups or divisions or
assistant secretaries, assistant treasurers and such other assistant officers as
the business of the Corporation may require, each of whom shall hold office for
such period, have such authority and perform such duties as may be specified
from time to time by the Chief Executive Officer.
Section 4.11. ABSENCE OR DISABILITY OF AN OFFICER. In the case of the
absence or disability of an officer of the Corporation the Board of Directors,
or any officer designated by it, or the Chief Executive Officer may, for the
time of the absence or disability, delegate such officer's duties and powers to
any other officer of the Corporation.
Section 4.12. OFFICERS HOLDING TWO OR MORE OFFICES. The same person may
hold any two or more of the above-mentioned offices. However, no officer shall
execute, acknowledge or verify any instrument in
11
more than one capacity, if such instrument is required by law, by the
Certificate or by these Bylaws, to be executed, acknowledged or verified by any
two or more officers.
Section 4.13. COMPENSATION. The Board of Directors shall have the power
to fix the compensation of all officers and employees of the Corporation.
Section 4.14. RESIGNATIONS. Any officer may resign at any time by giving
written notice to the Board of Directors, to the Chief Executive Officer, or to
the Secretary of the Corporation. Any such resignation shall take effect at the
time specified therein unless otherwise determined by the Board of Directors.
The acceptance of a resignation by the Corporation shall not be necessary to
make it effective.
Section 4.15. REMOVAL. Any officer of the Corporation may be removed,
with or without cause, by the affirmative vote of a majority of the entire Board
of Directors. Any assistant officer of the Corporation may be removed, with or
without cause, by the Chief Executive Officer, or by the Board of Directors.
ARTICLE V
INDEMNIFICATION OF DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS
Section 5.01. RIGHT TO INDEMNIFICATION. Each person who was or is made a
party, or is threatened to be made a party, to any actual or threatened action,
suit, or proceeding, whether civil, criminal, administrative, or investigative
(hereinafter a "proceeding"), by reason of the fact that he or she is or was a
director, officer, employee, or agent of the Corporation (hereinafter an
"indemnitee") shall be indemnified and held harmless by the Corporation to the
fullest extent authorized by the Delaware General Corporation Law, as the same
exists or may hereafter be amended, or by other applicable law as then in
effect, against all expense, liability, and loss (including attorneys' fees,
judgments, fines, ERISA excise taxes or penalties, and amounts paid in
settlement) actually and reasonably incurred or suffered by such indemnitee in
connection therewith. Any person who was or is made a party, or is threatened
to be made a party, to any proceeding by reason of the fact that he or she is or
was serving at the request of an executive officer of the Corporation as a
director, officer, employee or agent of another corporation or of a partnership,
joint venture, trust or other enterprise, including service with respect to an
employee benefit plan, shall also be considered an indemnitee for the purposes
of this Article. The right to indemnification provided by this Article shall
apply whether or not the basis of such proceeding is alleged action in an
official capacity as such director, officer, employee or agent or in any other
capacity while serving as such director, officer, employee or agent.
Notwithstanding anything in this Section 5.01 to the contrary, except as
provided in Section 5.03 of this Article with respect to proceedings to enforce
rights to indemnification, the Corporation shall indemnify any such indemnitee
in connection with a proceeding (or part thereof) initiated by such indemnitee
only if such proceeding (or part thereof) was authorized by the Corporation.
Section 5.02. ADVANCEMENT OF EXPENSES. (a) The right to indemnification
conferred in Section 5.01 shall include the right to have the expenses incurred
in defending or preparing for any such proceeding in advance of its final
disposition (hereinafter an "advancement of expenses") paid by the Corporation;
provided, however, that an advancement of expenses incurred by an indemnitee in
his or her capacity as a director or officer (and not in any other capacity in
which service was or is to be rendered by such indemnitee, including, without
limitation, service to an employee benefit plan) shall be made only upon
delivery to the Corporation of an undertaking containing such terms and
conditions, including the requirement of security, as the Board of Directors
deems appropriate (hereinafter an "undertaking"), by or on behalf of such
indemnitee, to repay all amounts so advanced if it shall ultimately be
determined by final judicial decision from which there is no further right to
appeal that such indemnitee is not entitled to be indemnified for such expenses
under this Article or otherwise; and provided, further, that an advancement of
expenses shall not be made if the Corporation's Board of Directors makes a good
faith determination that such payment would violate any applicable law. The
Corporation shall not be obligated to advance fees and expenses to a director,
officer, employee or agent in connection with a proceeding instituted by the
Corporation against such person. (b) Notwithstanding anything in Section
5.02(a) to the contrary, the right of employees or agents to advancement of
12
expenses shall be at the discretion of the Board of Directors and on such terms
and conditions, including the requirement of security, as the Board of Directors
deems appropriate. The Corporation may, by action of its Board of Directors,
authorize one or more executive officers to grant rights for the advancement of
expenses to employees and agents of the Corporation on such terms and conditions
as such officers deem appropriate.
Section 5.03. RIGHT OF INDEMNITEE TO BRING SUIT. If a claim under Section
5.01 is not paid in full by the Corporation within sixty (60) calendar days
after a written claim has been received by the Corporation, except in the case
of a claim for an advancement of expenses under Section 5.02 in which case the
applicable period shall be thirty (30) calendar days, the indemnitee may at any
time thereafter bring suit against the Corporation to recover the unpaid amount
of the claim. If the indemnitee is successful in whole or in part in any such
suit, the indemnitee shall also be entitled to be paid the expense of
prosecuting or defending such suit.
Section 5.04. NONEXCLUSIVITY OF RIGHTS. (a) The rights to
indemnification and to the advancement of expenses conferred in this Article
shall not be exclusive of any other right which any person may have or hereafter
acquire under any statute, provisions of the Certificate of Incorporation,
Bylaw, agreement, vote of stockholders or disinterested directors, or otherwise.
Notwithstanding any amendment to or repeal of this Article, any indemnitee shall
be entitled to indemnification in accordance with the provisions hereof with
respect to any acts or omissions of such indemnitee occurring prior to such
amendment or repeal. (b) The Corporation may maintain insurance, at its
expense, to protect itself and any past or present director, officer, employee,
or agent of the Corporation or another corporation, partnership, joint venture,
trust, or other enterprise against any expense, liability, or loss, whether or
not the Corporation would have the power to indemnify such person against such
expense, liability, or loss under the Delaware General Corporation Law. The
Corporation may enter into contracts with any indemnitee in furtherance of the
provisions of this Article and may create a trust fund, grant a security
interest or use other means (including, without limitation, a letter of credit)
to ensure the payment of such amounts as may be necessary to effect
indemnification as provided in this Article. (c) The Corporation may without
reference to Sections 5.01 through 5.04 (a) and (b) hereof, pay the expenses,
including attorneys fees, incurred by any director, officer, employee or agent
of the Corporation who is subpoenaed, interviewed or deposed as a witness or
otherwise incurs expenses in connection with any civil, arbitration, criminal,
or administrative proceeding or governmental or internal investigation to which
the Corporation is a party, target, or potentially a party or target, or of any
such individual who appears as a witness at any trial, proceeding or hearing to
which the Corporation is a party, if the Corporation determines that such
payments will benefit the Corporation and if, at the time such expenses are
incurred by such individual and paid by the Corporation, such individual is not
a party, and is not threatened to be made a party, to such proceeding or
investigation.
ARTICLE VI
STOCK
Section 6.01. CERTIFICATES. Except as otherwise provided by law, each
stockholder shall be entitled to a certificate or certificates which shall
represent and certify the number and class (and series, if appropriate) of
shares of stock owned by him in the Corporation. Each certificate shall be
signed in the name of the Corporation by the Chairman of the Board, or the
President, or a Vice President, together with the Secretary, or an Assistant
Secretary, or the Treasurer or Assistant Treasurer. Any or all of the
signatures on any certificate may be facsimile. In case any officer, transfer
agent or registrar who has signed or whose facsimile signature has been placed
upon a certificate shall have ceased to be such officer, transfer agent or
registrar before such certificate is issued, it may be issued by the Corporation
with the same effect as if such person were an officer, transfer agent or
registrar at the date of issue.
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Section 6.02. TRANSFER OF SHARES. Shares of stock shall be transferable
on the books of the Corporation only by the holder thereof, in person or by his
duly authorized attorney, upon the surrender of the certificate representing the
shares to be transferred, properly endorsed, to the Corporation's registrar if
the Corporation has a registrar. The Board of Directors shall have power and
authority to make such other rules and regulations concerning the issue,
transfer and registration of certificates of the Corporation's stock as it may
deem expedient.
Section 6.03. TRANSFER AGENTS AND REGISTRARS. The Corporation may have
one or more transfer agents and one or more registrars of its stock whose
respective duties the Board of Directors or the Secretary may, from time to
time, define. No certificate of stock shall be valid until countersigned by a
transfer agent, if the Corporation has a transfer agent, or until registered by
a registrar, if the Corporation has a registrar. The duties of transfer agent
and registrar may be combined.
Section 6.04. STOCK LEDGERS. Original or duplicate stock ledgers,
containing the names and addresses of the stockholders of the Corporation and
the number of shares of each class of stock held by them, shall be kept at the
principal executive office of the Corporation or at the office of its transfer
agent or registrar.
Section 6.05. RECORD DATES. The Board of Directors shall fix, in advance,
a date as the record date for the purpose of determining stockholders entitled
to notice of, or to vote at, any meeting of stockholders or any adjournment
thereof, or stockholders entitled to receive payment of any dividend or other
distribution or allotment of any rights, or entitled to exercise any rights in
respect of any change, conversion or exchange of stock, or in order to make a
determination of stockholders for any other proper purpose. Such date in any
case shall be not more than sixty (60) days, and in case of a meeting of
stockholders, not less than ten (10) days, prior to the date on which the
particular action, requiring such determination of stockholders is to be taken.
Only those stockholders of record on the date so fixed shall be entitled to any
of the foregoing rights, notwithstanding the transfer of any such stock on the
books of the Corporation after any such record date fixed by the Board of
Directors.
Section 6.06. NEW CERTIFICATES. In case any certificate of stock is lost,
stolen, mutilated or destroyed, the Board of Directors may authorize the
issuance of a new certificate in place thereof upon such terms and conditions as
it may deem advisable; or the Board of Directors may delegate such power to any
officer or officers or agents of the Corporation; but the Board of Directors or
such officer or officers or agents, in their discretion, may refuse to issue
such a new certificate unless the Corporation is ordered to do so by a court of
competent jurisdiction.
ARTICLE VII
RESTRICTIONS ON SECURITIES REPURCHASES
Section 7.01. RESTRICTIONS ON SECURITIES REPURCHASES.
1. Vote required for certain acquisition of securities. Except as set
forth in Subsection 2 of this Section 7.01, in addition to any affirmative vote
of stockholders required by any provision of law, the Certificate of
Incorporation or Bylaws of this Corporation, or any policy adopted by the Board
of Directors, neither the Corporation nor any Subsidiary shall knowingly effect
any direct or indirect purchase or other acquisition of any equity security of a
class of securities which is registered pursuant to Section 12 of the
/Securities Exchange Act of 1934, as amended (the "Exchange Act"), issued by the
Corporation at a price which is in excess of the highest Market Price of such
equity security on the largest principal national securities exchange in the
United States on which such security is listed for
14
trading on the date that the understanding to effect such transaction is entered
into by the Corporation (whether or not such transaction is concluded or a
written agreement relating to such transaction is executed on such date, and
such date to be conclusively established by determination of the Board of
Directors), from any Interested Person, without the affirmative vote of the
holders of the Voting Shares representing at least a majority of the aggregate
voting power of all outstanding voting shares, excluding Voting Shares
beneficially owned by such Interested Person, voting together as a single class.
Such affirmative vote shall be required notwithstanding the fact that no vote
may be required, or that a lesser percentage may be specified, by law or any
agreement with any national securities exchange, or otherwise.
2. When A Vote Is Not Required. The provisions of Subsection 1 of this
Section 7.01 shall not be applicable with respect to:
a. any purchase, acquisition, redemption or exchange of such equity
securities, the purchase, acquisition, redemption or exchange of which is
provided for in the Corporation's Certificate of Incorporation;
b. any purchase or other acquisition of equity securities made as
part of a tender or exchange offer by the Corporation to purchase
securities of the same class made on the same terms to all holders of such
securities and complying with the applicable requirements of the Exchange
Act of 1934, as amended and the rules and regulations thereunder (or any
successor provisions to such Act, rules or regulations);
c. any purchase or acquisition of equity securities made pursuant to
an open market purchase program which has been approved by the Board of
Directors.
3. Certain definitions. For the purpose of this Section:
a. "Affiliate" and "Associate" shall have their respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations
under the Exchange Act, as in effect on January 1, 1991.
b. "Beneficial Owner" and "Beneficial Ownership" shall have the
meanings ascribed to such terms in Rule 13d-3 and Rule 13d-5 of the General
Rules and Regulations under the Exchange Act, as in effect on January 1,
1991.
c. "Interested person" shall mean any person (other than the
Corporation or any subsidiary) that is the direct or indirect Beneficial
Owner of five percent (5%) or more of the aggregate voting power of the
Voting Shares, and any Affiliate or Associate of any such person. For the
purpose of determining whether a person is an Interested Person, the
outstanding Voting Shares include unissued shares of voting stock of the
Corporation of which the Interested Person is the Beneficial Owner, but
shall not include any other shares of voting stock of the Corporation which
may be issuable pursuant to any agreement, arrangement or understanding, or
upon exercise or conversion of rights, warrants or options, or otherwise to
any person who is not the Interested Person.
d. "Market Price" of shares of the class of equity security of the
Corporation on any day shall mean the highest sale price (regular way) of
shares of such class of such equity security on such day, or, if that day
is not a trading day, on the trading day immediately preceding such day, on
the largest principal national securities exchange on which such class of
stock is then listed or admitted to trading, or if not listed or admitted
to trading on any national securities exchange, then the highest reported
sale price for such shares in the over-the-counter market as reported on
the NASDAQ National Market System, or if such sale price shall not be
reported thereon, the highest bid price so reported, or, of such price
shall not be reported thereon, as the same shall be reported by the
National Quotation Bureau, Incorporated, or if the price is not
determinable as set forth above, as determined in good faith by the Board
of Directors.
e. "Person" shall mean any individual, partnership, firm,
corporation, association, trust, unincorporated organization or other
entity, as well as any syndicate or group deemed to be a person pursuant to
Section 13(d)(3) of the Exchange Act, as in effect on January 1, 1991.
15
f. "Subsidiary" shall mean any company or entity of which the
Corporation owns, directly or indirectly, (i) a majority of the outstanding
shares of equity securities, or (ii) shares having a majority of the voting
power represented by all of the outstanding Voting Stock of such company
entitled to vote generally in the election of directors. For the purpose
of determining whether a company is a Subsidiary, the outstanding voting
stock and shares of equity securities thereof shall include unissued shares
of which The Corporation is the beneficial owner but, except for the
purpose of determining whether a company is a Subsidiary for the purpose of
Subsection 3(c) hereof shall not include any shares which may be issuable
pursuant to any agreement, arrangement, or understanding, or upon the
exercise of conversion rights, warrants or options, or otherwise to any
Person who is not the Corporation.
g. "Voting shares" shall mean the outstanding shares of capital stock
of the Corporation entitled to vote generally in the election of directors.
ARTICLE VIII
SUNDRY PROVISIONS
Section 8.01. FISCAL YEAR. The fiscal year of the Corporation shall end
on the 31st day of December of each year.
Section 8.02. SEAL. The seal of the Corporation shall bear the name of
the Corporation and the words "Delaware" and "Incorporated March 12, 1985."
Section 8.03. VOTING OF STOCK IN OTHER CORPORATIONS. Any shares of stock
in other corporations or associations, which may from time to time be held by
the Corporation, may be represented and voted at any of the stockholders'
meetings thereof by the Chief Executive Officer or his designee. The Board of
Directors, however, may by resolution appoint some other person or persons to
vote such shares, in which case such person or persons shall be entitled to vote
such shares upon the production of a certified copy of such resolution.
Section 8.04. AMENDMENTS. These Bylaws may be adopted, repealed,
rescinded, altered or amended only as provided in Articles Fifth and Sixth of
the Certificate.
May 18, 1994
16
EXHIBIT 4-5
NORTHROP GRUMMAN CORPORATION
TO
THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION), TRUSTEE
_______________
INDENTURE
Dated as of _____________, 199__
_______________
SENIOR DEBT SECURITIES
TABLE OF CONTENTS
Page
----
ARTICLE ONE DEFINITIONS AND OTHER PROVISIONS OF
GENERAL APPLICATION............................. 1
Section 101. Definitions...................................... 1
Section 102. Compliance Certificates and Opinions............. 9
Section 103. Form of Documents Delivered to Trustee........... 10
Section 104. Acts of Holders; Record Dates.................... 11
Section 105. Notices, Etc., to Trustee and Company............ 13
Section 106. Notice to Holders; Waiver........................ 14
Section 107. Conflict with Trust Indenture Act................ 14
Section 108. Effect of Headings and Table of Contents......... 14
Section 109. Successors and Assigns........................... 15
Section 110. Separability Clause.............................. 15
Section 111. Benefits of Indenture............................ 15
Section 112. Governing Law.................................... 15
Section 113. Legal Holidays................................... 15
ARTICLE TWO SECURITY FORMS............................................... 16
Section 201. Forms Generally.................................. 16
Section 202. Form of Face of Security......................... 16
Section 203. Form of Reverse of Security...................... 19
Section 204. Form of Legend for Global Securities............. 24
Section 205. Form of Trustee's Certificate of Authentication.. 24
ARTICLE THREE THE SECURITIES............................................. 24
Section 301. Amount Unlimited; Issuable in Series............. 24
Section 302. Denominations.................................... 28
Section 303. Execution, Authentication, Delivery and Dating... 28
Section 304. Temporary Securities............................. 30
Section 305. Registration, Registration of Transfer
and Exchange..................................... 30
Section 306. Mutilated, Destroyed, Lost or Stolen Securities.. 33
Section 307. Payment of Interest; Interest Rights Preserved... 34
Section 308. Persons Deemed Owners............................ 35
Section 309. Cancellation..................................... 36
Section 310. Computation of Interest.......................... 36
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ARTICLE FOUR SATISFACTION AND DISCHARGE.................................. 36
Section 401. Satisfaction and Discharge of Indenture.......... 36
Section 402. Application of Trust Money....................... 37
ARTICLE FIVE REMEDIES.................................................... 38
Section 501. Events of Default................................ 38
Section 502. Acceleration of Maturity; Rescission
and Annulment.................................... 39
Section 503. Collection of Indebtedness and Suits
for Enforcement by Trustee....................... 41
Section 504. Trustee May File Proofs of Claim................. 41
Section 505. Trustee May Enforce Claims Without
Possession of Securities......................... 42
Section 506. Application of Money Collected................... 42
Section 507. Limitation on Suits.............................. 43
Section 508. Unconditional Right of Holders to
Receive Principal, Premium and
Interest and to Convert.......................... 43
Section 509. Restoration of Rights and Remedies............... 44
Section 510. Rights and Remedies Cumulative................... 44
Section 511. Delay or Omission Not Waiver..................... 44
Section 512. Control by Holders............................... 45
Section 513. Waiver of Past Defaults.......................... 45
Section 514. Undertaking for Costs............................ 45
Section 515. Waiver of Usury, Stay or Extension Laws.......... 46
ARTICLE SIX THE TRUSTEE.................................................. 46
Section 601. Certain Duties and Responsibilities.............. 46
Section 602. Notice of Defaults............................... 47
Section 603. Certain Rights of Trustee........................ 48
Section 604. Not Responsible for Recitals or
Issuance of Securities........................... 49
Section 605. May Hold Securities.............................. 49
Section 606. Money Held in Trust.............................. 50
Section 607. Compensation and Reimbursement................... 50
Section 608. Conflicting Interests............................ 51
Section 609. Corporate Trustee Required; Eligibility.......... 51
Section 610. Resignation and Removal; Appointment
of Successor..................................... 51
Section 611. Acceptance of Appointment by Successor........... 53
Section 612. Merger, Conversion, Consolidation or
Succession to Business........................... 54
Section 613. Preferential Collection of Claims
Against Company.................................. 55
Section 614. Appointment of Authenticating Agent.............. 55
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ARTICLE SEVEN HOLDERS' LISTS AND REPORTS BY TRUSTEE
AND COMPANY...................................... 57
Section 701. Company to Furnish Trustee Names and
Addresses of Holders............................. 57
Section 702. Preservation of Information;
Communications to Holders........................ 57
Section 703. Reports by Trustee............................... 58
Section 704. Reports by Company............................... 58
ARTICLE EIGHT CONSOLIDATION, MERGER, CONVEYANCE,
TRANSFER OR LEASE................................ 59
Section 801. Company May Consolidate, Etc., Only on
Certain Terms.................................... 59
Section 802. Successor Substituted............................ 60
ARTICLE NINE SUPPLEMENTAL INDENTURES.......................... 60
Section 901. Supplemental Indentures Without
Consent of Holders............................... 60
Section 902. Supplemental Indentures with Consent of Holders.. 61
Section 903. Execution of Supplemental Indentures............. 63
Section 904. Effect of Supplemental Indentures................ 63
Section 905. Conformity with Trust Indenture Act.............. 63
Section 906. Reference in Securities to Supplemental
Indentures....................................... 63
ARTICLE TEN COVENANTS........................................ 64
Section 1001. Payment of Principal, Premium and Interest....... 64
Section 1002. Maintenance of Office or Agency.................. 64
Section 1003. Money for Securities Payments to Be Held
in Trust......................................... 64
Section 1004. Statement by Officers as to Default.............. 66
Section 1005. Existence........................................ 66
Section 1006. Maintenance of Properties........................ 67
Section 1007. Payment of Taxes and Other Claims................ 67
Section 1008. Waiver of Certain Covenants...................... 67
Section 1009. Limitation on Liens.............................. 68
Section 1010. Limitation on Sale and Lease-Back................ 69
Section 1011. Limitations on Funded Debt of Restricted
Subsidiaries..................................... 70
ARTICLE ELEVEN REDEMPTION OF SECURITIES......................... 71
Section 1101. Applicability of Article......................... 71
Section 1102. Election to Redeem; Notice to Trustee............ 71
Section 1103. Selection by Trustee of Securities to
Be Redeemed...................................... 71
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Section 1104. Notice of Redemption............................. 72
Section 1105. Deposit of Redemption Price...................... 73
Section 1106. Securities Payable on Redemption Date............ 73
Section 1107. Securities Redeemed in Part...................... 74
ARTICLE TWELVE SINKING FUNDS.................................... 74
Section 1201. Applicability of Article......................... 74
Section 1202. Satisfaction of Sinking Fund Payments
with Securities.................................. 74
Section 1203. Redemption of Securities for Sinking Fund........ 75
ARTICLE THIRTEEN DEFEASANCE AND COVENANT DEFEASANCE............... 75
Section 1301. Applicability of Article; Company's
Option to Effect Defeasance or
Covenant Defeasance.............................. 75
Section 1302. Defeasance and Discharge......................... 75
Section 1303. Covenant Defeasance.............................. 76
Section 1304. Conditions to Defeasance or Covenant
Defeasance....................................... 77
Section 1305. Deposited Money and U.S. Government
Obligations to Be Held in Trust;
Miscellaneous Provisions......................... 80
Section 1306. Reinstatement.................................... 80
NOTE: THIS TABLE OF CONTENTS SHALL NOT, FOR ANY PURPOSE, BE DEEMED TO BE
A PART OF THE INDENTURE.
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INDENTURE dated as of _______________, 199__ between NORTHROP
GRUMMAN CORPORATION, a corporation duly organized and existing under the laws of
the State of Delaware (herein called the "Company"), having its principal office
at 1840 Century Park East, Los Angeles, California, and THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION), a national banking association duly organized and
existing under the laws of the United States of America, as Trustee (herein
called the "Trustee"), having its Corporate Trust Office at 4 Chase MetroTech
Center, Brooklyn, New York 11245.
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its unsecured
debentures, notes or other evidences of indebtedness (herein called the
"Securities"), to be issued in one or more series as this Indenture provides.
All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the promises and the purchase of the
Securities by the Holders thereof, it is mutually agreed, for the equal and
proportionate benefit of all Holders of the Securities or of series thereof, as
follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
Section 101. DEFINITIONS.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned
to them in this Article and include the plural as well as the singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance
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with generally accepted accounting principles, and, except as otherwise
herein expressly provided, the term "generally accepted accounting
principles" with respect to any computation required or permitted
hereunder shall mean such accounting principles as are generally accepted
at the date hereof;
(4) unless the context otherwise requires, any reference to an
"Article" or a "Section" refers to an Article or a Section, as the case
may be, of this Indenture; and
(5) the words "herein," "hereof," and "hereunder" and other words
of similar import refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision.
"Act," when used with respect to any Holder, has the meaning
specified in Section 104.
"Affiliate" of any specified Person means any other Person directly
or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this
definition, "control" when used with respect to any specified Person means
the power to direct the management and policies of such Person, directly
or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
"Attributable Debt" has the meaning specified in Section 1010.
"Authenticating Agent" means any Person authorized by the Trustee
pursuant to Section 614 to act on behalf of the Trustee to authenticate
Securities of one or more series.
"Board of Directors" means either the board of directors of the
Company or any duly authorized committee of that board.
"Board Resolution" means (i) a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly
adopted by the Board of Directors and to be in full force and effect on
the date of such certification, or (ii) a certificate signed by the
authorized officer or officers of the Company to whom the Board of
Directors of the Company has delegated its authority, and in each case,
delivered to the Trustee.
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"Business Day," when used with respect to any Place of Payment,
means each Monday, Tuesday, Wednesday, Thursday and Friday which is not a
day on which banking institutions in that Place of Payment are authorized
or obligated by law or executive order to close.
"Commission" means the Securities and Exchange Commission, from time
to time constituted, created under the Exchange Act, or, if at any time
after the execution of this instrument such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act,
then the body performing such duties at such time.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor Person shall have become
such pursuant to the applicable provisions of this Indenture, and
thereafter "Company" shall mean such successor Person.
"Company Request" or "Company Order" means a written request or
order signed in the name of the Company by its Chairman of the Board, its
Vice Chairman of the Board, its President or a Vice President, and by its
Treasurer, an Assistant Treasurer, its Secretary or an Assistant
Secretary, and delivered to the Trustee.
"Consolidated Net Tangible Assets" means, as of any particular time,
the aggregate amount of assets (less applicable reserves and properly
deductible items) after deducting therefrom (a) all current liabilities
except for (i) notes and loans payable, (ii) current maturities of
long-term debt, (iii) current maturities of obligations under capital
leases, and (iv) deferred income taxes and (b) all goodwill, tradenames,
trademarks, patents, unamortized debt discount and expenses (to the extent
included in said aggregate amount of assets) and other like intangibles,
all as set forth on the most recent quarterly or annual consolidated
balance sheet of the Company and its consolidated Subsidiaries and
computed in accordance with generally accepted accounting principles.
"Corporate Trust Office" means the principal office of the Trustee
or agent of the Trustee, in either case, in the City of New York, at which
at any particular time the corporate trust business of the Trustee shall
be administered.
"corporation" means a corporation, association, company, joint-stock
company or business trust.
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"Covenant Defeasance" has the meaning specified in Section 1303.
"Debt," for purposes of Sections 1009 and 1010, shall have the
meaning ascribed that term in Section 1009.
"Defaulted Interest" has the meaning specified in Section 307.
"Defeasance" has the meaning specified in Section 1302.
"Depositary" means, with respect to Securities of any series
issuable in whole or in part in the form of one or more Global Securities,
a clearing agency registered under the Exchange Act that is designated to
act as Depositary for such Securities as contemplated by Section 301.
"Event of Default" has the meaning specified in Section 501.
"Exchange Act" means the Securities Exchange Act of 1934 and any
statute successor thereto, in each case as amended from time to time.
"Expiration Date" has the meaning specified in Section 104.
"Foreign Government Obligation" has the meaning specified in Section
1304.
"Funded Debt" means any Debt or guaranty thereof, whether or not
secured, maturing by its terms more than one year from the date of its
creation, including any Debt or guaranty thereof renewable or extendable
at the option of the obligor to a date more than one year from the date of
original issuance thereof, but excluding any portion of such Debt or
guarantee which is included in current liabilities.
"Global Security" means a Security that evidences all or part of the
Securities of any series and bears the legend set forth in Section 204 (or
such legend as may be specified as contemplated by Section 301 for such
Securities).
"Holder" means a Person in whose name a Security is registered in
the Security Register.
"Indenture" means this instrument as originally executed and as it
may from time to time be supplemented or amended by one or more indentures
supplemental hereto
-4-
entered into pursuant to the applicable provisions hereof, including, for
all purposes of this instrument and any such supplemental indenture, the
provisions of the Trust Indenture Act that are deemed to be a part of and
govern this instrument and any such supplemental indenture, respectively.
The term "Indenture" shall also include the terms of particular series of
Securities established as contemplated by Section 301.
"interest," when used with respect to an Original Issue Discount
Security which by its terms bears interest only after Maturity, means
interest payable after Maturity.
"Interest Payment Date," when used with respect to any Security,
means the Stated Maturity of an installment of interest on such Security.
"Investment Company Act" means the Investment Company Act of 1940
and any statute successor thereto, in each case as amended from time to
time.
"Maturity," when used with respect to any Security, means the date
on which the principal of such Security or an installment of principal
becomes due and payable as therein or herein provided, whether at the
Stated Maturity or by declaration of acceleration, call for redemption or
otherwise.
"Mortgage" has the meaning ascribed that term in Section 1009.
"Notice of Default" means a written notice of the kind specified in
Section 501(4).
"Officers' Certificate" means a certificate signed by the Chairman
of the Board, a Vice Chairman of the Board, the President or a Vice
President, and by the Treasurer, an Assistant Treasurer, the Secretary or
an Assistant Secretary, of the Company, and delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company, and who shall be acceptable to the Trustee.
"Original Issue Discount Security" means any Security which provides
for an amount less than the principal amount thereof to be due and payable
upon a declaration of acceleration of the Maturity thereof pursuant to
Section 502.
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"Outstanding," when used with respect to Securities, means, as of
the date of determination, all Securities theretofore authenticated and
delivered under this Indenture, except:
(1) Securities theretofore cancelled by the Trustee or delivered
to the Trustee for cancellation;
(2) Securities for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Trustee or any
Paying Agent (other than the Company) in trust or set aside and segregated
in trust by the Company (if the Company shall act as its own Paying Agent)
for the Holders of such Securities; provided that, if such Securities are
to be redeemed, notice of such redemption has been duly given pursuant to
this Indenture or provision therefor satisfactory to the Trustee has been
made;
(3) Securities as to which Defeasance has been effected pursuant
to Section 1302; and
(4) Securities which have been paid pursuant to Section 306 or in
exchange for or in lieu of which other Securities have been authenticated
and delivered pursuant to this Indenture, other than any such Securities
in respect of which there shall have been presented to the Trustee proof
satisfactory to it that such Securities are held by a bona fide purchaser
in whose hands such Securities are valid obligations of the Company;
provided, however, that in determining whether the Holders of the
requisite principal amount of the Outstanding Securities have given, made
or taken any request, demand, authorization, direction, notice, consent,
waiver or other action hereunder as of any date, (A) the principal amount
of an Original Issue Discount Security which shall be deemed to be
Outstanding shall be the amount of the principal thereof which would be
due and payable as of such date upon acceleration of the Maturity thereof
to such date pursuant to Section 502, (B) if, as of such date, the
principal amount payable at the Stated Maturity of a Security is not
determinable, the principal amount of such Security which shall be deemed
to be Outstanding shall be the amount as specified or determined as
contemplated by Section 301, (C) the principal amount of a Security
denominated in one or more foreign currencies or currency units which
shall be deemed to be Outstanding shall be the U.S. dollar equivalent,
determined as of such date in the manner provided as contemplated by
Section 301, of the principal amount of such Security (or, in the case of
a Security described in Clause (A) or (B)
-6-
above, of the amount determined as provided in such Clause), and (D)
Securities owned by the Company or any other obligor upon the Securities
of any Affiliate of the Company or of such other obligor shall be
disregarded and deemed not to be Outstanding, except that, in determining
whether the Trustee shall be protected in relying upon any such request,
demand, authorization, direction, notice, consent, waiver or other action,
only Securities which a responsible officer of the Trustee actually knows
to be so owned shall be so disregarded. Securities so owned which have
been pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Trustee the pledgee's right so to
act with respect to such Securities and that the pledgee is not the
Company or any other obligor upon the Securities or any Affiliate of the
Company or of such other obligor.
"Paying Agent" means any Person authorized by the Company to pay the
principal of or any premium or interest on any Securities on behalf of the
Company.
"Person" means any individual, corporation, partnership, joint
venture, trust, unincorporated organization or government or any agency or
political subdivision thereof.
"Place of Payment," when used with respect to the Securities of any
series, means the place or places where the principal of any premium and
interest on the Securities of that series are payable as specified as
contemplated by Section 301.
"Predecessor Security" of any particular Security means every
previous Security evidencing all or a portion of the same debt as that
evidenced by such particular Security; and, for the purposes of this
definition, any Security authenticated and delivered under Section 306 in
exchange for or in lieu of a mutilated, destroyed, lost or stolen Security
shall be deemed to evidence the same debt as the mutilated, destroyed,
lost or stolen Security.
"Principal Property" means any manufacturing plant or manufacturing
facility which is (i) owned by the Company or any Restricted Subsidiary
and (ii) located within the continental United States of America, except
any such plant which, in the opinion of the Board of Directors, is not of
material importance to the total business conducted by the Company and the
Restricted Subsidiaries taken as a whole.
-7-
"Redemption Date," when used with respect to any Security to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"Redemption Price," when used with respect to any Security to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"Regular Record Date" for the interest payable on any Interest
Payment Date on the Securities of any series means the date specified for
that purpose as contemplated by Section 301.
"Responsible Officer," when used with respect to the Trustee, means
any officer within the Corporate Trust Office of the Trustee including any
vice president, the secretary, any assistant secretary, the treasurer, any
assistant treasurer, the cashier, any assistant cashier, any trust officer
or assistant trust officer or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above
designated officers and also means, with respect to a particular corporate
trust matter, any other officer to whom such matter is referred because of
his knowledge of and familiarity with the particular subject.
"Restricted Subsidiary" means any Subsidiary of the Company except
any Subsidiary substantially all of the assets of which are located, or
substantially all of the business of which is carried on, outside of the
United States of America, or any Subsidiary substantially all of the
assets of which consist of stock or other securities of such a Subsidiary.
"Securities" has the meaning stated in the first recital of this
Indenture and more particularly means any Securities authenticated and
delivered under this Indenture.
"Securities Act" means the Securities Act of 1933 and any statute
successor thereto, in each case as amended from time to time.
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 305.
"Special Record Date" for the payment of any Defaulted Interest
means a date fixed by the Trustee pursuant to Section 307.
"Stated Maturity," when used with respect to any Security or any
installment of principal thereof or
-8-
interest thereon, means the date specified in such Security as the fixed
date on which the principal of such Security or such installment of
principal or interest is due and payable.
"Subsidiary" means a corporation more than 50% of the outstanding
voting stock of which is owned, directly or indirectly, by the Company or
by one or more other Subsidiaries, or by the Company and one or more other
Subsidiaries. For the purposes of this definition, "voting stock" means
stock which ordinarily has voting power for the election of directors,
whether at all times or only so long as no senior class of stock has such
voting power by reason of any contingency.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in
force at the date as of which this instrument was executed; provided,
however, that in the event the Trust Indenture Act of 1939 is amended
after such date, "Trust Indenture Act" means, to the extent required by
any such amendment, the Trust Indenture Act of 1939 as so amended.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become
such pursuant to the applicable provisions of this Indenture, and
thereafter "Trustee" shall mean or include each Person who is then a
Trustee hereunder, and if at any time there is more than one such Person,
"Trustee" as used with respect to the Securities of any series shall mean
the Trustee with respect to Securities of that series.
"U.S. Government Obligation" has the meaning specified in Section
1304.
"Vice President," when used with respect to the Company or the
Trustee, means any vice president, whether or not designated by a number
or a word or words added before or after the title "Vice President."
Section 102. COMPLIANCE CERTIFICATES AND OPINIONS.
Upon any application or request by the Company to the Trustee to
take any action under any provision of this Indenture, the Company shall furnish
to the Trustee such certificates and opinions as may be required under the Trust
Indenture Act. Each such certificate or opinion shall be given in the form of
an Officers' Certificate, if to be given by an officer of the Company, or an
Opinion of Counsel, if to be given by counsel, and shall comply with the
requirements of the
-9-
Trust Indenture Act and any other requirements set forth in this Indenture.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he
has made such examination or investigation as is necessary to enable him
to express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
Section 103. FORM OF DOCUMENTS DELIVERED TO TRUSTEE.
In any case where several matters are required to be certified by,
or covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be
based, insofar as it relates to legal matters, upon an opinion of counsel,
unless such officer knows, or in the exercise of reasonable care should know,
that the opinion with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such certificate or opinion of counsel may
be based, insofar as it relates to factual matters, upon a certificate of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or representations with respect to such matters are
erroneous.
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Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Section 104. ACTS OF HOLDERS; RECORD DATES.
Any request, demand, authorization, direction, notice, consent,
waiver or other action provided or permitted by this Indenture to be given, made
or taken by Holders may be embodied in and evidenced by one or more instruments
of substantially similar tenor signed by such Holders in person or by agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for any purpose of this
Indenture and (subject to Section 601) conclusive in favor of the Trustee and
the Company, if made in the manner provided in this Section.
The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where
such execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which the Trustee deems sufficient.
The ownership of Securities shall be proved by the Security
Register.
Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Security shall bind every future Holder
of the same Security and the Holder of every Security issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be done by the Trustee or the
Company in reliance thereon, whether or not notation of such action is made upon
such Security.
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The Company may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities of any series entitled to
give, make or take any request, demand, authorization, direction, notice,
consent, waiver or other action provided or permitted by this Indenture to be
given, made or taken by Holders of Securities of such series, provided that the
Company may not set a record date for, and the provisions of this paragraph
shall not apply with respect to, the giving or making of any notice,
declaration, request or direction referred to in the next paragraph. If any
record date is set pursuant to this paragraph, the Holders of Outstanding
Securities of the relevant series on such record date, and no other Holders,
shall be entitled to take the relevant action, whether or not such Holders
remain Holders after such record date; provided that no such action shall be
effective hereunder unless taken on or prior to the applicable Expiration Date
by Holders of the requisite principal amount of Outstanding Securities of such
series on such record date. Nothing in this paragraph shall be construed to
prevent the Company from setting a new record date for any action for which a
record date has previously been set pursuant to this paragraph (whereupon the
record date previously set shall automatically and with no action by any Person
be cancelled and of no effect), and nothing in this paragraph shall be construed
to render ineffective any action taken by Holders of the requisite principal
amount of Outstanding Securities of the relevant series on the date such action
is taken. Promptly after any record date is set pursuant to this paragraph, the
Company, at its own expense, shall cause notice of such record date, the
proposed action by Holders and the applicable Expiration Date to be given to the
Trustee in writing and to each Holder of Securities of the relevant series in
the manner set forth in Section 106.
The Trustee may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities of any series entitled to join
in the giving or making of (i) any Notice of Default, (ii) any declaration of
acceleration referred to in Section 502, (iii) any request to institute
proceedings referred to in Section 507(2) or (iv) any direction referred to in
Section 512, in each case with respect to Securities of such series. If any
record date is set pursuant to this paragraph, the Holders of Outstanding
Securities of such series on such record date, and no other Holders, shall be
entitled to join in such notice, declaration, request or direction, whether or
not such Holders remain Holders after such record date; provided that no such
action shall be effective hereunder unless taken on or prior to the applicable
Expiration Date by Holders of the requisite principal amount of Outstanding
Securities of such series on such record date. Nothing in this paragraph shall
be construed to prevent the Trustee from setting a new record date for any
action for which
-12-
a record date has previously been set pursuant to this paragraph (whereupon the
record date previously set shall automatically and with no action by any Person
be cancelled and of no effect), and nothing in this paragraph shall be construed
to render ineffective any action taken by Holders of the requisite principal
amount of Outstanding Securities of the relevant series on the date such action
is taken. Promptly after any record date is set pursuant to this paragraph, the
Trustee, at the Company's expense, shall cause notice of such record date, the
proposed action by Holders and the applicable Expiration Date to be given to the
Company in writing and to each Holder of Securities of the relevant series in
the manner set forth in Section 106.
With respect to any record date set pursuant to this Section, the
party hereto which sets such record dates may designate any date as the
"Expiration Date" and from time to time may change the Expiration Date to any
earlier or later day; provided that no such change shall be effective unless
notice of the proposed new Expiration Date is given to the other party hereto in
writing, and to each Holder of Securities of the relevant series in the manner
set forth in Section 106, on or prior to the existing Expiration Date. If an
Expiration Date is not designated with respect to any record date set pursuant
to this Section, the party hereto which sets such record date shall be deemed to
have initially designated the 180th day after such record date as the Expiration
Date with respect thereto, subject to its right to change the Expiration Date as
provided in this paragraph. Notwithstanding the foregoing, no Expiration Date
shall be later than the 180th day after the applicable record date.
Without limiting the foregoing, a Holder entitled hereunder to give
or take any action hereunder with regard to any particular Security may do so
with regard to all or any part of the principal amount of such Security or by
one or more duly appointed agents each of which may do so pursuant to such
appointment with regard to all or any part of such principal amount.
Section 105. NOTICES, ETC., TO TRUSTEE AND COMPANY.
Any request, demand, authorization, direction, notice, consent,
waiver or Act of Holders or other document provided or permitted by this
Indenture to be made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be
sufficient for every purpose hereunder if made, given, furnished or filed
in writing to or with the Trustee at 4 MetroTech Center, Brooklyn, New
York 11245, Attn: Corporate Trust Department,
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(2) the Company by the Trustee or by any Holder shall be
sufficient for every purpose hereunder (unless otherwise herein expressly
provided) if in writing and mailed, first-class postage prepaid, to the
Company addressed to it at the address of its principal office specified
in the first paragraph of this instrument or at any other address
previously furnished in writing to the Trustee by the Company.
Section 106. NOTICE TO HOLDERS; WAIVER.
Where this Indenture provides for notice to Holders of any event,
such notice shall be sufficiently given (unless otherwise herein expressly
provided) if in writing and mailed, first-class postage prepaid, to each Holder
affected by such event, at his address as it appears in the Security Register,
not later than the latest date (if any), and not earlier than the earliest date
(if any), prescribed for the giving of such notice. In any case where notice to
Holders is given by mail, neither the failure to mail such notice, nor any
defect in any notice so mailed, to any particular Holder shall affect the
sufficiency of such notice with respect to other Holders. Where this Indenture
provides for notice in any manner, such notice may be waived in writing by the
Person entitled to receive such notice, either before or after the event, and
such waiver shall be the equivalent of such notice. Waivers of notice by
Holders shall be filed with the Trustee, but such filing shall not be a
condition precedent to the validity of any action taken in reliance upon such
waiver.
In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice by mail,
then such notification as shall be made with the approval of the Trustee shall
constitute a sufficient notification for every purpose hereunder.
Section 107. CONFLICT WITH TRUST INDENTURE ACT.
If any provision hereof limits, qualifies or conflicts with a
provision of the Trust Indenture Act that is required under such Act to be a
part of and govern this Indenture, the latter provision shall control. If any
provision of this Indenture modifies or excludes any provision of the Trust
Indenture Act that may be so modified or excluded, the latter provision shall be
deemed to apply to this Indenture as so modified or to be excluded, as the case
may be.
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Section 108. EFFECT OF HEADINGS AND TABLE OF CONTENTS.
The Article and Section headings herein and the Table of Contents
are for convenience only and shall not affect the construction hereof.
Section 109. SUCCESSORS AND ASSIGNS.
All covenants and agreements in this Indenture by the Company shall
bind its successors and assigns, whether so expressed or not.
Section 110. SEPARABILITY CLAUSE.
In case any provision in this Indenture or in the Securities shall
be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.
Section 111. BENEFITS OF INDENTURE.
Nothing in this Indenture or in the Securities, express or implied,
shall give to any Person, other than the parties hereto and their successors
hereunder and the Holders, any benefit or any legal or equitable right, remedy
or claim under this Indenture.
Section 112. GOVERNING LAW.
This Indenture and the Securities shall be governed by and construed
in accordance with the law of the State of New York, without regard to
principles of conflicts of laws.
Section 113. LEGAL HOLIDAYS.
In any case where any Interest Payment Date, Redemption Date or
Stated Maturity of any Security shall not be a Business Day at any Place of
Payment, then (notwithstanding any other provision of this Indenture or of the
Securities (other than a provision of any Security that specifically states that
such provision shall apply in lieu of this Section)) payment of interest or
principal (and premium, if any) need not be made at such Place of Payment on
such date, but may be made on the next succeeding Business Day at such Place of
Payment with the same force and effect as if made on the Interest Payment Date
or Redemption Date, or at the Stated Maturity, provided, that no interest shall
accrue with respect to such payment for the period from and after such Interest
Payment Date, Redemption Date or Stated Maturity, as the case may be.
-15-
ARTICLE TWO
SECURITY FORMS
Section 201. FORMS GENERALLY.
The Securities of each series shall be in substantially the form set
forth in this Article, or in such other form as shall be established by or
pursuant to a Board Resolution or in one or more indentures supplemental hereto,
in each case with such appropriate insertions, omissions, substitutions and
other variations as are required or permitted by this Indenture, and may have
such letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with the rules of any
securities exchange or as may, consistently herewith, be determined by the
officers executing such Securities, as evidenced by their execution thereof. If
the form of Securities of any series is established by action taken pursuant to
a Board Resolution, a copy of an appropriate record of such action shall be
certified by the Secretary or an Assistant Secretary of the Company and
delivered to the Trustee at or prior to the delivery of the Company Order
contemplated by Section 303 for the authentication and delivery of such
Securities.
The definitive Securities shall be printed, lithographed or engraved
on steel engraved borders or may be produced in any other manner, all as
determined by the officers executing such Securities, as evidenced by their
execution of such Securities.
Section 202. FORM OF FACE OF SECURITY.
[Insert any legend required by the Internal Revenue Code and the
regulations thereunder.]
NORTHROP GRUMMAN CORPORATION
_______________________________________________________________
No. ____________ $ _____________
CUSIP _____________
Northrop Grumman Corporation, a corporation duly organized and
existing under the laws of Delaware (herein called the "Company," which term
includes any successor Person under the Indenture hereinafter referred to), for
value received, hereby promises to pay to _______________________, or registered
assigns, the principal sum of ______________________ [Dollars] [if other than
Dollars, substitute other currency or currency units] on
____________________________________________ [If the Security is to bear
interest prior to Maturity,
-16-
Interest __, and to pay interest thereon from _______________________________
or from the most recent Interest Payment Date to which interest has been paid or
duly provided for, [semi-annually on ______________________________ and
_____________________ in each year] [if other than semi-annual interest at a
fixed rate, insert frequency of payments and payment dates], commencing
___________________ at [If the Security is to bear interest at a fixed rate,
insert -- the rate of ____% per annum] [if the Security is to bear interest at a
rate determined with reference to one or more formula, refer to description of
index below], until the principal hereof is paid or made available for payment
[If applicable, insert --, provided that any principal and premium, and any such
installment of interest, which is overdue shall bear interest at the rate of
____% per annum (to the extent that the payment of such interest shall be
legally enforceable), from the dates such amounts are due until they are paid or
made available for payment, and such interest shall be payable on demand.]
Interest shall be computed on the basis of a 360-day year of twelve 30-day
months. The interest so payable, and punctually paid or duly provided for, on
any Interest Payment Date will, as provided in such Indenture, be paid to the
Person in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such
interest, which shall be the _________________ or ___________________ (whether
or not a Business Day), as the case may be, next preceding such Interest Payment
Date. Any such interest not so punctually paid or duly provided for will
forthwith cease to be payable to the Holder on such Regular Record Date and may
either be paid to the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of business on a Special
Record Date for the Payment of such Defaulted Interest to be fixed by the
Trustee, notice whereof shall be given to Holders of Securities of this series
not less than 10 days prior to such Special Record Date, or be paid at any time
in any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities of this series may be listed, and
upon such notice as may be required by such exchange, all as more fully provided
in said Indenture].
[If the Securities are securities with respect to which the
principal of or any premium or interest may be determined with reference to one
or more indices or formulas, insert the text of such indices or formulas]
[If the Security is not to bear interest prior to Maturity, insert
- -- The principal of this Security shall not bear interest except in the case of
a default in payment of principal upon acceleration, upon redemption or at
Stated Maturity and in such case the overdue principal and any overdue premium
shall bear interest at the rate of _____% per annum (to the extent that the
payment of such interest shall be legally
-17-
enforceable), from the dates such amounts are due until they are paid or made
available for payment. Interest on any overdue principal or premium shall be
payable on demand. [Any such interest on overdue principal or premium which is
not paid on demand shall bear interest at the rate of _______________% per annum
(to the extent that the payment of such interest on interest shall be legally
enforceable), from the date of such demand until the amount so demanded is paid
or made available for payment. Interest on any overdue interest shall be
payable on demand.]]
Payment of the principal of (and premium, if any) and [if
applicable, interest -- any such] interest on this Security will be made at the
office or agency of the Company maintained for that purpose in ________________
in such coin or currency [of the United States of America] [if the Security is
denominated in a currency other than U.S. dollars, specify other currency or
currency unit in which payment of the principal of any premium or interest may
be made] as at the time of payment is legal tender for payment of public and
private debts [if applicable, insert --; provided, however, that at the option
of the Company payment of interest may be made by check mailed to the address of
the Person entitled thereto as such address shall appear in the Security
Register or by wire transfer to an account maintained by the person entitled
thereto as specified in the Security Register.]
Reference is hereby made to the further provisions of this Security
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any
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benefit under the Indenture or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be
duly executed under its corporate seal.
Dated: ________________
NORTHROP GRUMMAN CORPORATION
By ___________________________________
Attest:
______________________
Section 203. FORM OF REVERSE OF SECURITY.
This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), issued and to be issued in one or more
series under an Indenture, dated as of ________________, 199__ (herein called
the "Indenture", which term shall have the meaning assigned to it in such
instrument), between the Company and The Chase Manhattan Bank (National
Association), as Trustee (herein called the "Trustee", which term includes any
successor trustee under the Indenture), and reference is hereby made to the
Indenture for a statement of the respective rights, limitations of rights,
duties and immunities thereunder of the Company, the Trustee and the Holders of
the Securities and of the terms upon which the securities are, and are to be
authenticated and delivered. This Security is one of the series designated on
the face hereof [if applicable, insert -- limited in aggregate principal amount
to $________________]. [The Securities are [unsecured general obligations of
the Company.]]
[If applicable, insert -- the securities of this series are subject
to redemption upon not less than 30 days' notice by mail, [If applicable, insert
- -- (1) on _______________ in any year commencing with the year _____________ and
ending with the year ______________ through operation of the sinking fund for
this series at a Redemption Price equal to 100% of the principal amount, and
(2)] at any time [if applicable, insert -- on or after ______________, 19___],
as a whole or in part, at the election of the Company, at the following
Redemption Prices (expressed as percentages of
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the principal amount): If redeemed [if applicable, insert -- on or before
__________________, _____% and if redeemed] during the 12-month period beginning
________________ of the years indicated,
Redemption Redemption
Year Price Year Price
- ---- ---------- ---- ----------
and thereafter at a Redemption Price equal to _____% of the principal amount,
together in the case of any such redemption [if applicable, insert -- (whether
through operation of the sinking fund or otherwise)] with accrued interest to
the Redemption Date, but interest installments whose Stated Maturity is on or
prior to such Redemption Date will be payable to the Holders of such Securities,
or one or more Predecessor Securities, of record at the close of business on the
relevant Record Dates referred to on the face hereof, all as provided in the
Indenture.]
[If applicable, insert -- The Securities of this series are subject
to redemption upon not less than 30 days' notice by mail, (1) on ______________
in any year commencing with the year ______ and ending with the year ______
through operation of the sinking fund for this series at the Redemption Prices
for redemption through operation of the sinking fund (expressed as percentages
of the principal amount) set forth in the table below, and (2) at any time [if
applicable, insert -- on or after ________________, as a whole or in part, at
the election of the Company, at the Redemption Prices for redemption otherwise
than through operation of the sinking fund (expressed as percentages of the
principal amount) set forth in the table below: If redeemed during the 12-month
period beginning _____________________ of the years indicated,
Redemption Price
For Redemption Redemption Price For
Through Operation Redemption Otherwise
of the Than Through Operation
Year Sinking Fund of the Sinking Fund
- ---- ----------------- ----------------------
and thereafter at a Redemption Price equal to __________% of the principal
amount, together in the case of any such redemption (whether through operation
of the sinking fund or otherwise) with accrued interest to the Redemption Date,
but
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interest installments whose Stated Maturity is on or prior to such Redemption
Date will be payable to the Holders of such Securities, or one or more
Predecessor Securities, of record at the close of business on the relevant
Record Dates referred to on the face hereof, all as provided in the Indenture.]
[If applicable, insert -- Notwithstanding the foregoing, the Company
may not, prior to ________________ redeem any Securities of this series as
contemplated by [if applicable, insert -- Clause (2) of the preceding paragraph
as a part of, or in anticipation of, any refunding operation by the application,
directly or indirectly, of moneys borrowed having an interest cost to the
Company (calculated in accordance with generally accepted financial practice) of
less than _________% per annum.]
[If applicable, insert -- The sinking fund for this series provides
for the redemption on __________________ in each year beginning with the year
___________ and ending with the year ________ of [if applicable, insert -- not
less than $_______________ ("mandatory sinking fund") and not more than]
$_______________ aggregate principal amount of Securities of this series.
Securities of this series acquired or redeemed by the Company otherwise than
through [if applicable, insert -- mandatory] sinking fund payments may be
credited against subsequent [if applicable, insert -- mandatory] [sinking fund
payments otherwise required to be made [if applicable, insert --, in the inverse
order in which they become due].]
[If the Security is subject to redemption of any kind, insert -- In
the event of redemption of this Security in part only, a new Security or
Securities of this series and of like tenor for the unredeemed portion hereof
will be issued in the name of the Holder hereof upon the cancellation hereof.]
[If applicable, insert -- The Indenture contains provisions for
defeasance at any time of [the entire indebtedness of this Security] [or]
[certain restrictive covenants and Events of Default with respect to this
Security] [, in each case] upon compliance with certain conditions set forth in
the Indenture.]
[If the Security is convertible into securities of the Company,
specify the conversion features.]
[If the Security is not an Original Issue Discount Security, insert
- -- If an Event of Default with respect to Securities of this series shall occur
and be continuing, the principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture.]
-21-
[If the Security is an Original Issue Discount Security, insert --
If an Event of Default with respect to Securities of this series shall occur and
be continuing, an amount of principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture. Such amount shall be equal to -- [insert formula for determining the
amount.] Upon payment (i) of the amount of principal so declared due and
payable and (ii) of interest on any overdue principal, premium and interest (in
each case to the extent that the payment of such interest shall be legally
enforceable), all of the Company's obligations in respect of the payment of the
principal of and premium and interest, if any, on the Securities of this series
shall terminate.]
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of a majority in principal amount of the securities at
the time Outstanding of each series to be affected. The Indenture also contains
provisions permitting the Holders of specified percentages in principal amount
of the Securities of each series at the time Outstanding, on behalf of the
Holders of all Securities of such series, to waive compliance by the Company
with certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Security shall be conclusive and binding upon such Holder and upon all
future Holders of this Security and of any Security issued upon the registration
of transfer hereof or in exchange herefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Security.
As provided in and subject to the provisions of the Indenture, the
Holder of this Security shall not have the right to institute any proceeding
with respect to the Indenture or for the appointment of a receiver or trustee or
for any other remedy thereunder, unless such Holder shall have previously given
the Trustee written notice of a continuing Event of Default with respect to the
Securities of this series, the Holders of not less than 25% in principal amount
of the Securities of this series at the time Outstanding shall have made written
request to the Trustee to institute proceedings in respect of such Event of
Default as Trustee and offered the Trustee reasonable indemnity, and the Trustee
shall not have received from the Holders of a majority in principal amount of
Securities of this series at the time Outstanding a direction inconsistent with
such request, and shall have failed to institute any such proceeding, for 60
days after receipt of such notice, request and offer of indemnity. The
foregoing
-22-
shall not apply to any suit instituted by the Holder of this Security for the
enforcement of any payment of principal hereof or any premium or interest hereon
on or after the respective due dates expressed herein.
No reference herein to the Indenture and no provision of this
Security or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and any
premium and interest on this Security at the times, place and rate, and in the
coin or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Security is registrable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company in any place where the principal of and any
premium and interest on this Security are payable, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Securities of
this series and of like tenor, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees.
The Securities of this series are issuable only in registered form
without coupons in denominations of $1,000 and any integral multiple thereof.
As provided in the Indenture and subject to certain limitations therein set
forth, Securities of this series are exchangeable for a like aggregate principal
amount of Securities of this series and of like tenor of a different authorized
denomination, as requested by the Holder surrendering the same.
No service charge shall be made for any such registration of
transfer or exchange, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Security is registered as the owner
hereof for all purposes, whether or not this Security be overdue, and neither
the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
-23-
Section 204. FORM OF LEGEND FOR GLOBAL SECURITIES.
Unless otherwise specified as contemplated by Section 301 for the
Securities evidenced thereby, every Global Security authenticated and delivered
hereunder shall bear a legend in substantially the following form:
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A
NOMINEE THEREOF. THIS SECURITY MAY NOT BE TRANSFERRED TO, OR REGISTERED OR
EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REGISTERED IN THE NAME OF ANY
PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE.
Section 205. FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION.
The Trustee's certificates of authentication shall be in
substantially the following form:
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
THE CHASE MANHATTAN BANK (NATIONAL
ASSOCIATION), As Trustee
By _____________________________________
Authorized Officer
ARTICLE THREE
THE SECURITIES
Section 301. AMOUNT UNLIMITED; ISSUABLE IN SERIES.
The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is unlimited.
The Securities may be issued in one or more series. There shall be
established in or pursuant to a Board Resolution and, subject to Section 303,
set forth, or determined in the manner provided, in an Officers' Certificate, or
established in one or more indentures supplemental hereto, prior to the issuance
of Securities of any series:
-24-
(1) the title of the Securities of the series (which shall
distinguish the Securities of the series from Securities of any other
series);
(2) any limit upon the aggregate principal amount of the
Securities of the series which may be authenticated and delivered under
this Indenture (except for Securities authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other
Securities of the series pursuant to Section 304, 305, 306, 906 or 1107
and except for any Securities which, pursuant to Section 303, are deemed
never to have been authenticated and delivered hereunder);
(3) the Person to whom any interest on a Security of the series
shall be payable, if other than the Person in whose name that Security (or
one or more Predecessor Securities) is registered at the close of business
on the Regular Record Date for such interest;
(4) the date or dates on which the principal of any Securities of
the series is payable;
(5) the rate or rates at which any Securities of the series shall
bear interest, if any, the date or dates from which any such interest
shall accrue, the Interest Payment Dates on which any such interest shall
be payable and the Regular Record Date for any such interest payable on
any Interest Payment Date;
(6) the place or places where the principal of and any premium and
interest on any Securities of the series shall be payable;
(7) the period or periods within which, the price or prices at
which and the terms and conditions upon which any Securities of the series
may be redeemed, in whole or in part, at the option of the Company;
(8) the obligation, if any, of the Company to redeem or purchase
any Securities of the series pursuant to any sinking fund or analogous
provisions or at the option of the Holder thereof and the period or
periods within which, the price or prices at which and the terms and
conditions upon which any Securities of the series shall be redeemed or
purchased, in whole or in part, pursuant to such obligation;
(9) any provision for the conversion or exchange of Securities of
the series, either at the option of the Holder thereof or the Company,
into or for another security or securities of the Company, the security or
-25-
securities into or for which, the period or periods within which, the
price or prices, including any adjustments thereto, at which and the other
terms and conditions upon which any Securities of the series shall be
converted or exchanged, in whole or in part, pursuant to such obligation;
(10) if other than denominations of $1,000 and any integral
multiple thereof, the denominations in which any Securities of the series
shall be issuable;
(11) if the amount of principal of or any premium or interest on
any Securities of the series may be determined with reference to one or
more indices or pursuant to a formula, the manner in which such amounts
shall be determined;
(12) if other than the currency of the United States of America,
the currency, currencies or currency units in which the principal of or
any premium or interest on any Securities of the series shall be payable
and the manner of determining the equivalent thereof in the currency of
the United States of America for any purpose, including for purposes of
the definition of "Outstanding" in Section 101;
(13) if the principal of or any premium or interest on any
Securities of the series is to be payable, at the election of the Company
or the Holder thereof, in one or more currencies or currency units other
than that or those in which such Securities are stated to be payable, the
currency, currencies or currency units in which the principal of or any
premium or interest on such Securities as to which such election is made
shall be payable, the periods within which and the terms and conditions
upon which such election is to be made and the amount so payable (or the
manner in which such amount shall be determined);
(14) if other than the entire principal amount thereof, the portion
of the principal amount of any Securities of the series which shall be
payable upon declaration of acceleration of the Maturity thereof pursuant
to Section 502;
(15) if the principal amount payable at the Stated Maturity of any
Securities of the series will not be determinable as of any one or more
dates prior to the Stated Maturity, the amount which shall be deemed to be
the principal amount of such Securities as of any such date for any
purpose thereunder or hereunder, including the principal amount thereof
which shall be due and
-26-
payable upon any Maturity other than the Stated Maturity or which shall be
deemed to be Outstanding as of any date prior to the Stated Maturity (or,
in any such case, the manner in which such amount deemed to be the
principal amount shall be determined);
(16) whether either or both of Section 1302 and Section 1303 shall
not apply to the Securities of the series;
(17) if and as applicable, that any Securities of the series shall
be issuable in whole or in part in the form of one or more Global
Securities and, in such case, the respective Depositaries for such Global
Securities, the form of any legend or legends which shall be borne by any
such Global Security in addition to or in lieu of that set forth in
Section 204 and any circumstances in addition to or in lieu of those set
forth in Clause (2) of the last paragraph of Section 305 in which any such
Global Security may be exchanged in whole or in part for Securities
registered, and any transfer of such Global Security in whole or in part
may be registered, in the name or names of Persons other than the
Depositary for such Global Security or a nominee thereof;
(18) any addition to or change in the Events of Default which
applies to any Securities of the series and any change in the right of the
Trustee or the requisite Holders of such Securities to declare the
principal amount thereof due and payable pursuant to Section 502;
(19) any addition to or change in the covenants set forth in
Article Ten which applies to Securities of the series;
(20) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture, except as permitted by
Section 901(5)).
All Securities of any one series shall be substantially identical
except as to denomination and except as may otherwise be provided in or pursuant
to the Board Resolution referred to above and (subject to Section 303) set
forth, or determined in the manner provided in the Officers' Certificate
referred to above or in any such indenture supplemental hereto. All Securities
of any one series need not be issued at one time and, unless otherwise provided,
a series may be reopened for issuances of additional Securities of such series.
Unless otherwise provided with respect to the Securities of any
series, at the option of the Company,
-27-
interest on the Securities of any series that bears interest may be paid by
mailing a check to the address of the person entitled thereto as such address
shall appear in the Security Register.
If any of the terms of the series are established by action taken
pursuant to a Board Resolution, a copy of an appropriate record of such action
shall be certified by the Secretary or an Assistant Secretary of the Company and
delivered to the Trustee at or prior to the delivery of the Officers'
Certificate setting forth the terms of the series.
Section 302. DENOMINATIONS.
The Securities of each series shall be issuable only in registered
form without coupons and only in such denominations as shall be specified as
contemplated by Section 301. In the absence of any such specified denomination
with respect to the Securities of any series, the Securities of such series
shall be issuable in denominations of $1,000 and any integral multiple thereof.
Section 303. EXECUTION, AUTHENTICATION, DELIVERY AND DATING.
The Securities shall be executed on behalf of the Company by its
Chairman of the Board, its Vice Chairman of the Board, its President or one of
its Vice Presidents, under its corporate seal reproduced thereon attested by its
Secretary or one of its Assistant Secretaries. The signature of any of these
officers on the Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery
of this Indenture, the Company may deliver Securities of any series executed by
the Company to the Trustee for authentication, together with a Company Order for
the authentication and delivery of such Securities, and the Trustee in
accordance with the Company Order shall authenticate and deliver such
Securities. If the form or terms of the Securities of the series have been
established by or pursuant to one or more Board Resolutions as permitted by
Sections 201 and 301, in authenticating such Securities, and accepting the
additional responsibilities under this Indenture in relation to such Securities,
the Trustee shall be entitled to receive, and (subject to Section 601) shall be
fully protected in relying upon, an Opinion of Counsel stating,
-28-
(1) if the form of such Securities has been established by or
pursuant to Board Resolution as permitted by Section 201, that such form
has been established in conformity with the provisions of this Indenture;
(2) if the terms of such Securities have been established by or
pursuant to Board Resolution as permitted by Section 301, that such terms
have been established in conformity with the provisions of this Indenture;
and
(3) that such Securities, when authenticated and delivered by the
Trustee and issued by the Company in the manner and subject to any
conditions specified in such Opinion of Counsel, will constitute valid and
legally binding obligations of the Company enforceable in accordance with
their terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity
principles [and, if applicable, to provisions of law which may require
that a judgment for money damages rendered by a court in the United States
be expressed in United States dollars].
If such form or terms have been so established, the Trustee shall not be
required to authenticate such Securities if the issue of such Securities
pursuant to this Indenture will affect the Trustee's own rights, duties or
immunities under the Securities and this Indenture or otherwise in a manner
which is not reasonably acceptable to the Trustee.
Notwithstanding the provisions of Section 301 and of the preceding
paragraph, if all Securities of a series are not to be originally issued at one
time, it shall not be necessary to deliver the Officers' Certificate otherwise
required pursuant to Section 301 or the Company Order and Opinion of Counsel
otherwise required pursuant to such preceding paragraph at or prior to the
authentication of each Security of such series if such documents are delivered
at or prior to the authentication upon original issuance of the first Security
of such series to be issued.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or
be valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein,
executed by the
-29-
Trustee by manual signature, and such certificate upon any Security shall be
conclusive evidence, and the only evidence, that such Security has been duly
authenticated and delivered hereunder. Notwithstanding the foregoing, if any
Security shall have been authenticated and delivered hereunder but never issued
and sold by the Company, and the Company shall deliver such Security to the
Trustee for cancellation as provided in Section 309, for all purposes of this
Indenture such Security shall be deemed never to have been authenticated and
delivered hereunder and shall never be entitled to the benefits of this
Indenture.
Section 304. TEMPORARY SECURITIES.
Pending the preparation of definitive Securities of any series, the
Company may execute, and upon Company Order the Trustee shall authenticate and
deliver, temporary Securities which are printed, lithographed, typewritten,
mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Securities in lieu of which they
are issued and with such appropriate insertions, omissions, substitutions and
other variations as the officers executing such Securities may determine, as
evidenced by their execution of such Securities.
If temporary Securities of any series are issued, the Company will
cause definitive Securities of that series to be prepared without unreasonable
delay. After the preparation of definitive Securities of such series, the
temporary Securities of such series shall be exchangeable for definitive
Securities of such series upon surrender of the temporary Securities of such
series at the office or agency of the Company in a Place of Payment for that
series, without charge to the Holder. Upon surrender for cancellation of any
one or more temporary Securities of any series, the Company shall execute and
the Trustee shall authenticate and deliver in exchange therefor one or more
definitive Securities of the same series, of any authorized denominations and of
like tenor and aggregate principal amount. Until so exchanged, the temporary
Securities of any series shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities of such series and tenor.
Section 305. REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE.
The Company shall cause to be kept at the Corporate Trust Office of
the Trustee a register (the register maintained in such office and in any other
office or agency of the Company in a Place of Payment being herein sometimes
collectively referred to as the "Security Register") in which, subject to such
reasonable regulations as it may prescribe, the Company
-30-
shall provide for the registration of Securities and of transfers of Securities.
The Trustee is hereby appointed "Security Registrar" for the purpose of
registering Securities and transfers of Securities as herein provided.
Upon surrender for registration of transfer of any Security of a
series at the office or agency of the Company in a Place of Payment for that
series, the Company shall execute, and the Trustee shall authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Securities of the same series, of any authorized denominations and of like
tenor and aggregate principal amount.
At the option of the Holder, Securities of any series may be
exchanged for other Securities of the same series, of any authorized
denominations and of like tenor and aggregate principal amount, upon surrender
of the Securities to be exchanged at such office or agency. Whenever any
Securities are so surrendered for exchange, the Company shall execute, and the
Trustee shall authenticate and deliver, the Securities which the Holder making
the exchange is entitled to receive.
All Securities issued upon any registration of transfer or exchange
of Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of transfer
or for exchange shall (if so required by the Company or the Trustee) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed, by the
Holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Securities, other than
exchanges pursuant to Section 304, 906 or 1107 not involving any transfer.
If the Securities of any series (or of any series and specified
tenor) are to be redeemed in part, the Company shall not be required (A) to
issue, register the transfer of or exchange any Securities of that series (or of
that series and specified tenor, as the case may be) during a period beginning
at the opening of business 15 days before the day of the mailing of a notice of
redemption of any such Securities
-31-
selected for redemption under Section 1103 and ending at the close of business
on the day of such mailing, or (B) to register the transfer of or exchange any
Security so selected for redemption in whole or in part, except the unredeemed
portion of any Security being redeemed in part.
The provisions of Clauses (1), (2), (3), (4) and (5) below shall
apply only to Global Securities:
(1) Each Global Security authenticated under this Indenture shall
be registered in the name of the Depositary designated for such Global
Security or a nominee thereof and delivered to such Depositary or a
nominee thereof or custodian therefor, and each such Global Security shall
constitute a single Security for all purposes of this Indenture.
(2) Notwithstanding any other provision in this Indenture, no
Global Security may be exchanged in whole or in part for Securities
registered, and no transfer of a Global Security in whole or in part may
be registered, in the name of any Person other than the Depositary for
such Global Security or a nominee thereof unless (A) such Depositary (i)
has notified the Company that it is unwilling or unable to continue as
Depositary for such Global Security or (ii) has ceased to be a clearing
agency registered under the Exchange Act, (B) there shall have occurred
and be continuing an Event of Default with respect to such Global Security
or (C) there shall exist such circumstances, if any, in addition to or in
lieu of the foregoing as have been specified for this purpose as
contemplated by Section 301.
(3) Subject to the provisions of Clause (2) above, the rights of
holders of such Global Securities shall be exercised only through the
Depositary and shall be limited to those established by law and agreements
between such holders and the Depositary and or the Depositary
participants. The initial Depositary will make book-entry transfers among
the Depositary participants and receive and transmit distributions of
principal and interest on the Global Securities to such Depositary
participants.
The Depositary may be treated by the Company and the Trustee, and
any of their respective agents, employees, officers and directors, as the
absolute owner of the Global Securities for all purposes whatsoever.
Notwithstanding the foregoing, nothing in this Indenture shall prevent the
Company and the Trustee, or any of their respective agents, from giving
effect to any written certification, proxy or other authorization
furnished by
-32-
the Depositary, or shall impair the operation of customary practices
governing the exercise of the rights of a holder of any Global Security.
Subject to the foregoing provisions of this Section, any holder may grant
proxies and otherwise authorize any person to take any action which a
holder is entitled to take under this Indenture or the Global Securities.
(4) Subject to Clause (2) above, any exchange of a Global Security
for other Securities may be made in whole or in part, and all Securities
issued in exchange for a Global Security or any portion thereof shall be
registered in such names as the Depositary for such Global Security shall
direct.
(5) Every Security authenticated and delivered upon registration
of transfer of, or in exchange for or in lieu of, a Global Security or any
portion thereof, whether pursuant to this Section, Section 304, 306, 906
or 1107 or otherwise, shall be authenticated and delivered in the form of,
and shall be, a Global Security, unless such Security is registered in the
name of a Person other than the Depositary for such Global Security or a
nominee thereof.
Section 306. MUTILATED, DESTROYED, LOST OR STOLEN SECURITIES.
If any mutilated Security is surrendered to the Trustee, the Company
shall execute and the Trustee shall authenticate and deliver in exchange
therefor a new Security of the same series and of like tenor and principal
amount and bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any Security
and (ii) such security or indemnity as may be required by them to save each of
them and any agent of either of them harmless, then, in the absence of notice to
the Company or the Trustee that such Security has been acquired by a bona fide
purchaser, the Company shall execute and the Trustee shall authenticate and
deliver, in lieu of any such destroyed, lost or stolen Security, a new Security
of the same series and of like tenor and principal amount and bearing a number
not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the
Company may require the payment of a sum
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sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto and any other expenses (including the fees and expenses of the
Trustee) connected therewith.
Every new Security of any series issued pursuant to this Section in
lieu of any destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, whether or not the destroyed,
lost or stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities of that series duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities.
Section 307. PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED.
Except as otherwise provided as contemplated by Section 301 with
respect to any series of Securities, interest on any Security which is payable,
and is punctually paid or duly provided for, on any Interest Payment Date shall
be paid to the Person in whose name that Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest.
Any interest on any Security of any series which is payable, but is
not punctually paid or duly provided for, on any Interest Payment Date (herein
called "Defaulted Interest") shall forthwith cease to be payable to the Holder
on the relevant Regular Record Date by virtue of having been such Holder, and
such Defaulted Interest may be paid by the Company, at its election in each
case, as provided in Clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose name the Securities of such series (or
their respective Predecessor Securities) are registered at the close of
business on a Special Record Date for the payment of such Defaulted
Interest, which shall be fixed in the following manner. The Company shall
notify the Trustee in writing of the amount of Defaulted Interest proposed
to be paid on each Security of such series and the date of the proposed
payment, and at the same time the Company shall deposit with the Trustee
an amount of money equal to the aggregate amount proposed to be paid in
respect of such Defaulted Interest or shall make arrangements satisfactory
to the Trustee for such deposit prior to the date of the proposed
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payment, such money when deposited to be held in trust for the benefit of
the Persons entitled to such Defaulted Interest as in this Clause
provided. Thereupon the Trustee shall fix a Special Record Date for the
payment of such Defaulted Interest which shall be not more than 15 days
and not less than 10 days prior to the date of the proposed payment and
not less than 10 days after the receipt by the Trustee of any notice of
the proposed payment. The Trustee shall promptly notify the Company of
such Special Record Date and, in the name and at the expense of the
Company, shall cause notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor to be mailed, first-class
postage prepaid, to each Holder of Securities of such series, not less
than 10 days prior to such Special Record Date. Notice of the proposed
payment of such Defaulted Interest and the Special Record Date therefor
having been so mailed, such Defaulted Interest shall be paid to the
Persons in whose names the Securities of such series (or their respective
Predecessor Securities) are registered at the close of business on such
Special Record Date and shall no longer be payable pursuant to the
following Clause (2).
(2) The Company may make payment of any Defaulted Interest on the
Securities of any series in any other lawful manner not inconsistent with
the requirements of any securities exchange on which such Securities may
be listed, and upon such notice as may be required by such exchange, if,
after notice given by the Company to the Trustee of the proposed payment
pursuant to this Clause, such manner of payment shall be deemed
practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
Section 308. PERSONS DEEMED OWNERS.
Prior to due presentment of a Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name such Security is registered as the owner of such
Security for the purpose of receiving payment of principal of and any premium
and (subject to Section 307) any interest on such Security and for all other
purposes whatsoever, whether or not such Security be overdue, and neither the
Company, the Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary.
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Section 309. CANCELLATION.
All Securities surrendered for payment, redemption, registration of
transfer or exchange or for credit against any sinking fund payment shall, if
surrendered to any Person other than the Trustee, be delivered to the Trustee
and shall be promptly cancelled by it. The Company may at any time deliver to
the Trustee for cancellation any Securities previously authenticated and
delivered hereunder which the Company may have acquired in any manner
whatsoever, and may deliver to the Trustee (or to any other Person for delivery
to the Trustee) for cancellation any Securities previously authenticated
hereunder which the Company has not issued and sold, and all Securities so
delivered shall be promptly cancelled by the Trustee. No Securities shall be
authenticated in lieu of or in exchange for any Securities cancelled as provided
in this Section, except as expressly permitted by this Indenture. All cancelled
Securities held by the Trustee shall be disposed of as directed by a Company
Order.
Section 310. COMPUTATION OF INTEREST.
Except as otherwise specified as contemplated by Section 301 for
Securities of any series, interest on the Securities of each series shall be
computed on the basis of a 360-day year of twelve 30-day months.
ARTICLE FOUR
SATISFACTION AND DISCHARGE
Section 401. SATISFACTION AND DISCHARGE OF INDENTURE.
This Indenture shall upon Company Request cease to be of further effect
(except as to any surviving rights of registration of transfer or exchange of
Securities herein expressly provided for), and the Trustee, at the expense of
the Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when
(1) either
(A) all Securities theretofore authenticated and delivered
(other than (i) Securities which have been destroyed, lost or stolen
and which have been replaced or paid as provided in Section 306 and
(ii) Securities for whose payment money has theretofore been
deposited in trust or segregated and held in trust by the Company
and thereafter repaid to the Company or discharged from such trust,
as provided in Section 1003) have been delivered to the Trustee for
cancellation; or
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(B) all such Securities not theretofore delivered to the
Trustee for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated
Maturity within one year, or
(iii) are to be called for redemption within one year
under arrangements satisfactory to the Trustee for the giving of
notice of redemption by the Trustee in the name, and at the expense,
of the Company,
and the Company, in the case of (i) (ii) or (iii) above, has deposited or caused
to be deposited with the Trustee as trust funds in trust for the purpose money
(either in United States dollars or such other currency or currency units in
which the securities of any series may be payable) in an amount sufficient to
pay and discharge the entire indebtedness on such Securities not theretofore
delivered to the Trustee for cancellation, for principal and any premium and
interest to the date of such deposit (in the case of Securities which have
become due and payable) or to the Stated Maturity or Redemption Date, as the
case may be;
(2) the Company has paid or caused to be paid all other sums
payable hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the satisfaction and discharge
of this Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture,
the obligations of the Company to the Trustee under Section 607, the obligations
of the Trustee to any Authenticating Agent under Section 614 and, if money shall
have been deposited with the Trustee pursuant to subclause (B) of Clause (1) of
this Section, the obligations of the Trustee under Section 402 and the last
paragraph of Section 1003 shall survive.
Section 402. APPLICATION OF TRUST MONEY.
Subject to the provisions of the last paragraph of Section 1003, all
money deposited with the Trustee pursuant to Section 401 shall be held in trust
and applied by it, in accordance with the provisions of the Securities and this
Indenture, to the payment, either directly or through any
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Paying Agent (including the Company acting as its own Paying Agent) as the
Trustee may determine, to the Persons entitled thereto, of the principal and any
premium and interest for whose payment such money has been deposited with the
Trustee.
ARTICLE FIVE
REMEDIES
Section 501. EVENTS OF DEFAULT.
"Event of Default", wherever used herein with respect to Securities
of any series, means any of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be effected
by operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(1) default in the payment of any interest upon any Security of
that series when it becomes due and payable, and continuance of such
default for a period of 30 days; or
(2) default in the payment of the principal of or any premium on
any Security of that series when due, whether at its Maturity, upon
acceleration or otherwise; or
(3) default in the deposit of any sinking fund payment, when and
as due by the terms of a Security of that series; or
(4) default in the performance, or breach, of any covenant,
agreement or warranty of the Company for the benefit of the Holders of the
Security in this Indenture (other than a covenant, agreement or warranty a
default in whose performance or whose breach is elsewhere in this Section
specifically dealt with or which has expressly been included in this
Indenture solely for the benefit of series of Securities other than that
series), and continuance of such default or breach for a period of 90 days
after there has been given, by registered or certified mail, to the
Company by the Trustee or to the Company and the Trustee by the Holders of
at least 10% in principal amount of the Outstanding Securities of that
series a written notice specifying such default or breach and requiring it
to be remedied and stating that such notice is a "Notice of Default"
hereunder; or
(5) the entry by a court having jurisdiction in the premises of
(A) a decree or order for relief in respect of
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the Company in an involuntary case or proceeding under any
applicable Federal or State bankruptcy, insolvency, reorganization or
other similar law or (B) a decree or order adjudging the Company a
bankrupt or insolvent, or approving as properly filed a petition seeking
reorganization, arrangement, adjustment or composition of or in respect of
the Company under any applicable Federal or State law, or appointing a
custodian, receiver, liquidator, assignee, trustee, sequestrator or other
similar official of the Company or of any substantial part of its
property, or ordering the winding up or liquidation of its affairs, and
the continuance of any such decree or order for relief or any such other
decree or order unstayed and in effect for a period of 60 consecutive
days; or
(6) the commencement by the Company of a voluntary case or
proceeding under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or of any other case or proceeding to
be adjudicated a bankrupt or insolvent, or the consent by it to the entry
of a decree or order for relief in respect of the Company in an
involuntary case or proceeding under any applicable Federal or State
bankruptcy, insolvency, reorganization or other similar law or to the
commencement of any bankruptcy or insolvency case or proceeding against
it, or the filing by it of a petition or answer or consent seeking
reorganization or relief under any applicable Federal or State law, or the
consent by it to the filing of such petition or to the appointment of or
taking possession by a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Company or of any
substantial part of its property, or the making by it of an assignment for
the benefit of creditors, or the admission by it in writing of its
inability to pay its debts generally as they become due, or the taking of
corporate action by the Company in furtherance of any such action; or
(7) any other Event of Default provided with respect to Securities
of that series.
Section 502. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.
If an Event of Default (other than an Event of Default specified in
Section 501(5) or 501(6)) with respect to Securities of any series at the time
Outstanding occurs and is continuing, then in every such case the Trustee or the
Holders of not less than 25% in principal amount of the Outstanding Securities
of that series may declare the principal amount of all the Securities of that
series (or, if any Securities of
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that series are Original Issue Discount Securities, such portion of the
principal amount of such Securities as may be specified by the terms thereof) to
be due and payable immediately, by a notice in writing to the Company (and to
the Trustee if given by Holders), and upon any such declaration such principal
amount (or specified amount) shall become immediately due and payable. If an
Event of Default specified in Section 501(5) or 501(6) with respect to
Securities of any series at the time Outstanding occurs, the principal amount of
all the Securities of that series (or, if any Securities of that series are
Original Issue Discount Securities, such portion of the principal amount of such
Securities as may be specified by the terms thereof) shall automatically, and
without any declaration or other action on the part of the Trustee or any
Holder, become immediately due and payable.
At any time after such a declaration of acceleration with respect to
Securities of any series has been made and before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in this
Article provided, the Holders of a majority in principal amount of the
Outstanding Securities of that series, by written notice to the Company and the
Trustee, may rescind and annul such declaration and its consequences if:
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay;
(A) all overdue interest on all Securities of that series,
(B) the principal of (and premium, if any, on) any
Securities of that series which have become due otherwise than by such
declaration of acceleration and any interest thereon at the rate or rates
prescribed therefor in such Securities,
(C) to the extent that payment of such interest is lawful,
interest upon overdue interest at the rate or rates prescribed therefor in
such Securities, and
(D) all sums paid or advanced by the Trustee hereunder and
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel; and
(2) all Events of Default with respect to Securities of that
series, other than the non-payment of the principal of Securities of that
series which have become due solely by such declaration of acceleration,
have been cured or waived as provided in Section 513.
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No such rescission shall affect any subsequent default or impair any right
consequent thereon.
Section 503. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY TRUSTEE.
The Company covenants that if:
(1) default is made in the payment of any interest on any Security
when such interest becomes due and payable and such default continues for
a period of 30 days; or
(2) default is made in the payment of the principal of (or
premium, if any, on) any Security whether at the Maturity or upon
acceleration or otherwise thereof;
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities, the whole amount then due and payable on such
Securities for principal and any premium and interest and, to the extent that
payment of such interest shall be legally enforceable, interest on any overdue
principal and premium and on any overdue interest, at the rate or rates
prescribed therefor in such Securities, and, in addition thereto, such further
amount as shall be sufficient to cover the costs and expenses of collection,
including the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel.
If an Event of Default with respect to Securities of any series
occurs and is continuing, the Trustee may in its discretion proceed to protect
and enforce its rights and the rights of the Holders of Securities of such
series by such appropriate judicial proceedings as the Trustee shall deem most
effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
Section 504. TRUSTEE MAY FILE PROOFS OF CLAIM.
In case of any judicial proceeding relative to the Company (or any
other obligor upon the Securities), its property or its creditors, the Trustee
shall be entitled and empowered, by intervention in such proceeding or
otherwise, to take any and all actions authorized under the Trust Indenture Act
in order to have claims of the Holders and the Trustee allowed in any such
proceeding. In particular, the Trustee shall be authorized to collect and
receive any moneys or other property payable or deliverable on any such claims
and to distribute the same; and any custodian, receiver, assignee, trustee,
liquidator, sequestrator or other similar official in any such judicial
proceeding is hereby authorized by each
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Holder to make such payments to the Trustee and, in the event that the Trustee
shall consent to the making of such payments directly to the Holders, to pay to
the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 607.
No provision of this Indenture shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any Holder
any plan of reorganization, arrangement, adjustment or composition affecting the
Securities or the rights of any Holder thereof or to authorize the Trustee to
vote in respect of the claim of any Holder in any such proceeding; provided,
however, that the Trustee may, on behalf of the Holders, vote for the election
of a trustee in bankruptcy or similar official and be a member of a creditors'
or other similar committee.
Section 505. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF SECURITIES.
All rights of action and claims under this Indenture or the
Securities may be prosecuted and enforced by the Trustee without the possession
of any of the Securities or the production thereof in any proceeding relating
thereto, and any such proceeding instituted by the Trustee shall be brought in
its own name as trustee of an express trust, and any recovery of judgment shall,
after provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Securities in respect of which such
judgment has been recovered.
Section 506. APPLICATION OF MONEY COLLECTED.
Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal or any premium
or interest, upon presentation of the Securities and the notation thereon of the
payment if only partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under Section
607; and
SECOND: To the payment of the amounts then due and unpaid for
principal of and any premium and interest on the Securities in respect of
which or for the benefit of which such money has been collected, ratably,
without preference or priority of any kind, according to the
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amounts due and payable on such Securities for principal and any premium
and interest, respectively.
THIRD: To the Company or any other Person or Persons entitled
thereto.
Section 507. LIMITATION ON SUITS.
No Holder of any Security of any series shall have any right to
institute any proceeding, judicial or otherwise, with respect to this Indenture,
or for the appointment of a receiver or trustee, or for any other remedy
hereunder, unless:
(1) such Holder has previously given written notice to the Trustee
of a continuing Event of Default with respect to the Securities of that
series;
(2) the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series shall have made written request to
the Trustee to institute proceedings in respect of such Event of Default
in its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such
proceeding; and
(5) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of a
majority in principal amount of the Outstanding Securities of that series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all of such
Holders.
Section 508. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL, PREMIUM AND
INTEREST AND TO CONVERT.
Notwithstanding any other provision in this Indenture, the Holder of
any Security shall have the right,
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which is absolute and unconditional, to receive payment of the principal of and
any premium and (subject to Section 307) interest on such Security on the
respective Stated Maturities expressed in such Security (or, in the case of
redemption, on the Redemption Date) and to convert such Security in accordance
with the provisions in the form of Security of any particular series pursuant to
Section 301(9) and to institute suit for the enforcement of any such payment and
right to convert, and such rights shall not be impaired without the consent of
such Holder.
Section 509. RESTORATION OF RIGHTS AND REMEDIES.
If the Trustee or any Holder has instituted any proceeding to
enforce any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders shall
be restored severally and respectively to their former positions hereunder and
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding had been instituted.
Section 510. RIGHTS AND REMEDIES CUMULATIVE.
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities in the last paragraph
of Section 306, no right or remedy herein conferred upon or reserved to the
Trustee or to the Holders is intended to be exclusive of any other right or
remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.
Section 511. DELAY OR OMISSION NOT WAIVER.
No delay or omission of the Trustee or of any Holder of any
Securities to exercise any right or remedy accruing upon any Event of Default
shall impair any such right or remedy or constitute a waiver of any such Event
of Default or an acquiescence therein. Every right and remedy given by this
Article or by law to the Trustee or to the Holders may be exercised from time to
time, and as often as may be deemed expedient, by the Trustee or by the Holders,
as the case may be.
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Section 512. CONTROL BY HOLDERS.
The Holders of a majority in principal amount of the Outstanding
Securities of any series shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee, with respect to the
Securities of such series, provided that:
(1) such direction shall not be in conflict with any rule of law
or with this Indenture; and
(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
Section 513. WAIVER OF PAST DEFAULTS.
The Holders of not less than a majority in principal amount of the
Outstanding Securities of any series may on behalf of the Holders of all the
Securities of such series waive any past default hereunder with respect to such
series and its consequences, except a default:
(1) in the payment of the principal of or any premium or interest
on any Security of such series, or
(2) in respect of a covenant or provision hereof which under
Article Nine cannot be modified or amended without the consent of the
Holder of each Outstanding Security of such series affected.
Upon any such waiver, such default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or impair any right consequent thereon.
Section 514. UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under this
Indenture, or in any suit against the Trustee for any action taken, suffered or
omitted by it as Trustee, a court may require any party litigant in such suit to
file an undertaking to pay the costs of such suit, and may assess costs against
any such party litigant, in the manner and to the extent provided in the Trust
Indenture Act; provided that neither this Section nor the Trust Indenture Act
shall be deemed to authorize any court to require such an undertaking or to make
such an assessment in any suit instituted by the Company.
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Section 515. WAIVER OF USURY, STAY OR EXTENSION LAWS.
The Company covenants (to the extent that it may lawfully do so)
that it will not at any time insist upon, or plead, or in any manner whatsoever
claim or take the benefit or advantage of, any usury, stay or extension law
wherever enacted, now or at any time hereafter in force, which may affect the
covenants or the performance of this Indenture; and the Company (to the extent
that it may lawfully do so) hereby expressly waives all benefit or advantage of
any such law and covenants that it will not hinder, delay or impede the
execution of any power herein granted to the Trustee, but will suffer and permit
the execution of every such power as though no such law had been enacted.
ARTICLE SIX
THE TRUSTEE
Section 601. CERTAIN DUTIES AND RESPONSIBILITIES.
The Trustee, prior to the occurrence of an Event of Default and
after the curing or waiving of all Events of Default which may have occurred,
undertakes to perform such duties and only such duties as are specifically set
forth in this Indenture. In case an Event of Default to the actual knowledge of
a Responsible Officer of the Trustee has occurred, has not been waived and is
continuing, the Trustee shall exercise such of the rights and powers vested in
it by this Indenture, and use the same degree of care and skill in their
exercise, as a prudent man would exercise or use under the circumstances in the
conduct of his own affairs.
No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent actions, its own negligent failure
to act or its own willful misconduct, except that:
(a) prior to the occurrence of an Event of Default and after
the curing or waiving of all such Events of Default which may have
occurred;
(i) the duties and obligations of the Trustee shall be
determined solely by the express provisions of this Indenture, and
the Trustee shall not be liable except for the performance of such
duties and obligations as are specifically set forth in this
Indenture, and no implied covenants or obligations shall be read
into this Indenture against the Trustee; and
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(ii) in the absence of bad faith on the part of the Trustee,
the Trustee may conclusively rely, as to the truth of the statements
and the correctness of the opinions expressed therein, upon any
statements, certificates or opinions furnished to the Trustee and
conforming to the requirements of this Indenture; but in the case of
any such statements, certificates or opinions which by any provision
hereof are specifically required to be furnished to the Trustee, the
Trustee shall be under a duty to examine the same to determine
whether or not they conform to the requirements of this Indenture;
(b) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer or Responsible
Officers of the Trustee, unless it shall be proved that the Trustee was
negligent in ascertaining the pertinent facts; and
(c) the Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance with
the direction of the Holders of not less than a majority in principal
amount of the Securities at the time outstanding relating to the time,
method and place of conducting a proceeding for any remedy available to
the Trustee, or exercising any trust or power conferred upon the Trustee,
under this Indenture.
None of the provisions contained in this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the exercise of any of
its rights or powers, if there shall be reasonable ground for believing that the
repayment of such funds or adequate indemnity against such liability is not
reasonably assured to it.
This Section is in furtherance of and subject to Sections 315 and
316 of the Trust Indenture Act.
Section 602. NOTICE OF DEFAULTS.
If a default occurs hereunder with respect to Securities of any
series, the Trustee shall give the Holders of Securities of such series notice
of such default as and to the extent provided by the Trust Indenture Act;
provided, however, that in the case of any default of the character specified in
Section 501(4) with respect to Securities of such series, no such notice to
Holders shall be given until at least 30 days after the occurrence thereof. For
the purpose of this Section, the term "default" means any event which is, or
after notice or lapse of time or both would become, an Event of Default with
respect to Securities of such series.
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Section 603. CERTAIN RIGHTS OF TRUSTEE.
Subject to the provisions of Section 601:
(1) the Trustee may conclusively rely and shall be fully protected
in acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness or
other paper or document believed by it to be genuine and to have been
signed or presented by the proper party or parties;
(2) any request or direction of the Company mentioned herein shall
be sufficiently evidenced by a Company Request or Company Order, and any
resolution of the Board of Directors shall be sufficiently evidenced by a
Board Resolution;
(3) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless
other evidence be herein specifically prescribed) may, in the absence of
bad faith on its part, rely upon an Officers' Certificate;
(4) the Trustee may consult with counsel and the advice of such
counsel or any Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon;
(5) the Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture at the request or
direction of any of the Holders pursuant to this Indenture, unless such
Holders shall have offered to the Trustee reasonable security or indemnity
against the costs, expenses and liabilities which might be incurred by it
in compliance with such request or direction;
(6) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent order,
bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Trustee, in its discretion may make such further inquiry
or investigation into such facts or matters as it may see fit, and, if the
Trustee shall determine to make such further inquiry or investigation,
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it shall be entitled to examine the books, records and premises of the
Company, personally or by agent or attorney at the sole cost and expense
of the Company;
(7) the Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of, or for the supervision of, any agent or
attorney appointed with due care by it hereunder;
(8) in the event the Trustee is also acting as Paying Agent,
Authenticating Agent or Security Registrar hereunder, the rights and
protections afforded to the Trustee pursuant to this Indenture shall also
be afforded to such Paying Agent, Authenticating Agent or Registrar;
(9) the Trustee shall not be charged with knowledge of an Event of
Default unless a Responsible Officer of the Trustee obtains actual
knowledge of such event or the Trustee receives written notice of such
event from the Company or form Holders of Securities of any series so
affected evidencing no less than 51 % of the aggregate outstanding
principal amount of Securities of such series; and
(10) when the Trustee incurs expenses or renders services in
connection with an Event of Default specified in Section 501(5) or Section
501(6), such expenses (including the fees and expenses of its counsel) and
the compensation for such services are intended to constitute expenses of
administration under any bankruptcy or insolvency law.
Section 604. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES.
The recitals contained herein and in the Securities, except the
Trustee's certificates of authentication, shall be taken as the statements of
the Company, and neither the Trustee nor any Authenticating Agent assumes any
responsibility for their correctness. The Trustee makes no representations as
to the validity or sufficiency of this Indenture or of the Securities. Neither
the Trustee nor any Authenticating Agent shall be accountable for the use or
application by the Company of Securities or the proceeds thereof.
Section 605. MAY HOLD SECURITIES.
The Trustee, any Authenticating Agent, any Paying Agent, any
Security Registrar or any other agent of the Company, in its individual or any
other capacity, may become
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the owner or pledgee of Securities and, subject to Sections 608 and 613, may
otherwise deal with the Company with the same rights it would have if it were
not Trustee, Authenticating Agent, Paying Agent, Security Registrar or such
other agent.
Section 606. MONEY HELD IN TRUST.
Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it hereunder except as
otherwise agreed with the Company.
Section 607. COMPENSATION AND REIMBURSEMENT.
The Company agrees:
(1) to pay to the Trustee from time to time reasonable
compensation for all services rendered by it hereunder (which compensation
shall not be limited by any provision of law in regard to the compensation
of a trustee of an express trust);
(2) except as otherwise expressly provided herein, to reimburse
the Trustee upon its request for all reasonable expenses, disbursements
and advances incurred or made by the Trustee in accordance with any
provision of this Indenture (including the reasonable compensation and the
expenses and disbursements of its agents and counsel), except any such
expense, disbursement or advance as may be attributable to its negligence
or bad faith; and
(3) to indemnify the Trustee and its officers, directors, agents,
and employees for, and to hold it and its officers, directors, agents, and
employees harmless against, any loss, liability or expense incurred
without negligence or bad faith on its part, arising out of or in
connection with the acceptance or administration of the trust or trusts
hereunder, including the costs and expenses of defending itself against
any claim or liability in connection with the exercise or performance of
any of its powers or duties hereunder.
As security for the performance of the obligations of the Company
under this Section, the Trustee shall have a lien prior to the Securities upon
all property and funds held or collected by the Trustee as such, except funds
held in trust for the benefit of the Holders of particular Securities.
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Section 608. CONFLICTING INTERESTS.
If the Trustee has or shall acquire a conflicting interest within
the meaning of the Trust Indenture Act, the Trustee shall either eliminate such
interest or resign, to the extent and in the manner provided by, and subject to
the provisions of, the Trust Indenture Act and this Indenture. To the extent
permitted by such Act, the Trustee shall not be deemed to have a conflicting
interest by virtue of being a trustee under this Indenture with respect to
Securities of more than one series.
Section 609. CORPORATE TRUSTEE REQUIRED; ELIGIBILITY.
There shall at all times be a Trustee hereunder, which may be
Trustee hereunder for Securities of one or more other series. Each Trustee
shall be a Person that is eligible pursuant to the Trust Indenture Act to act as
such and has a combined capital and surplus of at least $50,000,000 and has its
Corporate Trust Office in the City of New York. If any such Person publishes
reports of condition at least annually, pursuant to law or to the requirements
of its supervising or examining authority, then for the purposes of this Section
and to the extent permitted by the Trust Indenture Act, the combined capital and
surplus of such Person shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time
the Trustee with respect to the Securities of any series shall cease to be
eligible in accordance with the provisions of this Section, it shall resign
immediately in the manner and with the effect hereinafter specified in this
Article.
Section 610. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.
No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 611.
The Trustee may resign at any time with respect to the Securities of
one or more series by giving written notice thereof to the Company. If the
instrument of acceptance by a successor Trustee required by Section 611 shall
not have been delivered to the Trustee within 30 days after the giving of such
notice of resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee with respect to the
Securities of such series.
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The Trustee may be removed at any time with respect to the
Securities of any series by Act of the Holders of a majority in principal amount
of the Outstanding Securities of such series, delivered to the Trustee and to
the Company.
If at any time:
(1) the Trustee shall fail to comply with Section 608 after
written request therefor by the Company or by any Holder who has been a
bona fide Holder of a Security for at least six months,
(2) the Trustee shall cease to be eligible under Section 609 and
shall fail to resign after written request therefor by the Company or by
any such Holder, or
(3) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation;
then, in any such case, (A) the Company by a Board Resolution may remove the
Trustee with respect to all Securities, or (B) subject to Section 514, any
Holder who has been a bona fide Holder of a Security for at least six months
may, on behalf of himself and all others similarly situated, petition any court
of competent jurisdiction for the removal of the Trustee with respect to all
Securities and the appointment of a successor Trustee or Trustees.
If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause, with
respect to the Securities of one or more series, the Company, by a Board
Resolution, shall promptly appoint a successor Trustee or Trustees with respect
to the Securities of that or those series (it being understood that any such
successor Trustee may be appointed with respect to the Securities of one or more
or all of such series and that at any time there shall be only one Trustee with
respect to the Securities of any particular series) and shall comply with the
applicable requirements of Section 611. If, within one year after such
resignation, removal or incapability, or the occurrence of such vacancy, a
successor Trustee with respect to the Securities of any series shall be
appointed by act of the Holders of a majority in principal amount of the
Outstanding Securities of such series delivered to the Company and the retiring
Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance
of such appointment in accordance with the applicable requirements of Section
611, become the successor Trustee with respect to the Securities of such series
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and to that extent supersede the successor Trustee appointed by the Company. If
no successor Trustee with respect to the Securities of any series shall have
been so appointed by the Company or the Holders and accepted appointment in the
manner required by Section 611, any Holder who has been a bona fide
Holder of a Security of such series for at least six months may, on behalf of
himself and all others similarly situated, petition any court of competent
jurisdiction for the appointment of a successor Trustee with respect to the
Securities of such series.
The Company shall give notice of each resignation and each removal
of the Trustee with respect to the Securities of any series and each appointment
of a successor Trustee with respect to the Securities of any series to all
Holders of Securities of such series in the manner provided in Section 106.
Each notice shall include the name of the successor Trustee with respect to the
Securities of such series and the address of its corporate trust office.
Section 611. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
In case of the appointment hereunder of a successor Trustee with
respect to all Securities, every such successor Trustee so appointed shall
execute, acknowledge and deliver to the Company and to the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or removal
of the retiring Trustee shall become effective and such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee; but, on the request
of the Company or the successor Trustee, such retiring Trustee shall, upon
payment of its charges, execute and deliver an instrument transferring to such
successor Trustee all the rights, powers and trusts of the retiring Trustee and
shall duly assign, transfer and deliver to such successor Trustee all property
and money held by such retiring Trustee hereunder.
In case of the appointment hereunder of a successor Trustee with
respect to the Securities of one or more (but not all) series, the Company, the
retiring Trustee and each successor Trustee with respect to the Securities of
one or more series shall execute and deliver an indenture supplemental hereto
wherein each successor Trustee shall accept such appointment and which (1) shall
contain such provisions as shall be necessary or desirable to transfer and
confirm to, and to vest in, each successor Trustee all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities of that
or those series to which the appointment of such successor Trustee relates, (2)
if the retiring Trustee is not retiring with respect to all Securities, shall
contain such provisions as shall be deemed necessary or desirable to confirm
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that all the rights, powers, trusts and duties of the retiring Trustee with
respect to the Securities of that or those series as to which the retiring
Trustee is not retiring shall continue to be vested in the retiring Trustee, and
(3) shall add to or change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, it being understood that nothing herein or
in such supplemental indenture shall constitute such Trustees co-trustees of the
same trust and that each such Trustee shall be trustee of a trust or trusts
hereunder separate and apart from any trust or trusts hereunder administered by
any other such Trustee; and upon the execution and delivery of such supplemental
indenture the resignation or removal of the retiring Trustee shall become
effective to the extent provided therein and each such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee with respect to the
Securities of that or those series to which the appointment of such successor
Trustee relates; but, on request of the Company or any successor Trustee, such
retiring Trustee shall duly assign, transfer and deliver to such successor
Trustee all property and money held by such retiring Trustee hereunder with
respect to the Securities of that or those series to which the appointment of
such successor Trustee relates.
Upon request of any such successor Trustee, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all such rights, powers and trusts referred
to in the first or second preceding paragraph, as the case may be.
No successor Trustee shall accept its appointment unless at the time
of such acceptance such successor Trustee shall be qualified and eligible under
this Article. No trustee hereunder shall be liable for the acts or omissions of
any successor Trustee.
Section 612. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Securities shall have been
authenticated, but not delivered, by the
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Trustee then in office, any successor by merger, conversion or consolidation to
such authenticating Trustee may adopt such authentication and deliver the
Securities so authenticated with the same effect as if such successor Trustee
had itself authenticated such Securities.
Section 613. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
If and when the Trustee shall be or become a creditor of the Company
(or any other obligor upon the Securities), the Trustee shall be subject to the
provisions of the Trust Indenture Act regarding the collection of claims against
the Company (or any such other obligor).
Section 614. APPOINTMENT OF AUTHENTICATING AGENT.
The Trustee may appoint an Authenticating Agent or Agents with
respect to one or more series of Securities which shall be authorized to act on
behalf of the Trustee to authenticate Securities of such series issued upon
original issue and upon exchange, registration of transfer or partial redemption
thereof or pursuant to Section 306, and Securities so authenticated shall be
entitled to the benefits of this Indenture and shall be valid and obligatory for
all purposes as if authenticated by the Trustee hereunder. Wherever reference
is made in this Indenture to the authentication and delivery of Securities by
the Trustee or the Trustee's certificate of authentication, such reference shall
be deemed to include authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on behalf of
the Trustee by an Authenticating Agent. Each Authenticating Agent shall be
acceptable to the Company and shall at all times be a corporation organized and
doing business under the laws of the United States of America, any State thereof
or the District of Columbia, authorized under such laws to act as Authenticating
Agent, having a combined capital and surplus of not less than $50,000,000 and
subject to supervision or examination by Federal or State authority. If such
Authenticating Agent publishes reports of condition at least annually, pursuant
to law or to the requirements of said supervising or examining authority, then
for the purposes of this Section, the combined capital and surplus of such
Authenticating Agent shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time
an Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, such Authenticating Agent shall resign immediately
in the manner and with the effect specified in this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be
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consolidated, or any corporation resulting from any merger, conversion or
consolidation to which such Authenticating Agent shall be a party, or any
corporation succeeding to the corporate agency or corporate trust business of an
Authenticating Agent, shall continue to be an Authenticating Agent, provided
such corporation shall be otherwise eligible under this Section, without the
execution or filing of any paper or any further act on the part of the Trustee
or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written
notice thereof to the Trustee and to the Company. The Trustee may at any time
terminate the agency of an Authenticating Agent by giving written notice thereof
to such Authenticating Agent and to the Company. Upon receiving such a notice
of resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall give notice of such
appointment by first-class mail, postage prepaid, to all Holders of Securities
of the series with respect to which such Authenticating Agent will serve. Any
successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an Authenticating Agent.
No successor Authenticating Agent shall be appointed unless eligible under the
provisions of this Section.
The Trustee agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section, and the
Trustee shall be entitled to be reimbursed for such payments, in accordance with
the provisions of Section 607.
If an appointment with respect to one or more series is made
pursuant to this Section, the Securities of such series may have endorsed
thereon, in addition to the Trustee's certificate of authentication, an
alternative certificate of authentication in the following form:
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This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
THE CHASE MANHATTAN BANK (NATIONAL
ASSOCIATION), as Trustee
By ___________________________________
As Authenticating Agent
By ___________________________________
Authorized Officer
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 701. COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES OF HOLDERS.
The Company will furnish or cause to be furnished to the Trustee,
(1) semi-annually, not later than . . . . . . and. . . . . . in
each year, a list in such form as the Trustee may reasonably require, of
the names and addresses of the Holders of Securities of each series as of
the preceding . . . . . . or . . . . . . as the case may be; and
(2) at such other times as the Trustee may request in writing,
within 30 days after the receipt by the Company of any such request, a
list of similar form and content as of a date not more than 15 days prior
to the time such list is furnished;
excluding from any such list names and addresses received by the Trustee in its
capacity as Security Registrar.
Section 702. PRESERVATION OF INFORMATION; COMMUNICATIONS TO HOLDERS.
The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 701 and the names and
addresses of Holders received by the Trustee in its capacity as Security
Registrar.
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The Trustee may destroy any list furnished to it as provided in Section 701 upon
receipt of a new list so furnished.
The rights of Holders to communicate with other Holders with respect
to their rights under this Indenture or under the Securities, and the
corresponding rights and privileges of the Trustee, shall be as provided by the
Trust Indenture Act.
Every Holder of Securities, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company nor the Trustee
nor any agent of either of them shall be held accountable by reason of any
disclosure of information as to names and addresses of Holders made pursuant to
the Trust Indenture Act.
Section 703. REPORTS BY TRUSTEE.
The Trustee shall transmit to Holder such reports concerning the
Trustee and its actions under this Indenture as may be required pursuant to the
Trust Indenture Act at the times and in the manner provided pursuant thereto.
Reports so required to be transmitted at stated intervals of not
more than 12 months shall be transmitted no later than the ___ day in each
calendar year, commencing in ______________.
A copy of each such report shall, at the time of such transmission
to Holders, be filed by the Trustee with each stock exchange upon which any
Securities are listed, with the Commission and with the Company. The Company
will notify the Trustee when any Securities are listed on any stock exchange.
Section 704. REPORTS BY COMPANY.
The Company shall file with the Trustee and the Commission, and
transmit to Holders, such information, documents and other reports, and such
summaries thereof, as may be required pursuant to the Trust Indenture Act at the
times and in the manner provided pursuant to such Act; provided that any such
information, documents or reports required to be filed with the Commission
pursuant to Section 13 or 15(d) of the Exchange Act shall be filed with the
Trustee within 15 days after the same is so required to be filed with the
Commission.
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ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
Section 801. COMPANY MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS.
The Company shall not consolidate with or merge into any other
Person or convey, transfer or lease its properties and assets substantially as
an entirety to any Person, and the Company shall not permit any Person to
consolidate with or merge into the Company or convey, transfer or lease its
properties and assets substantially as an entirety to the Company, unless:
(1) in case the Company shall consolidate with or merge into
another Person or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, the Person formed by such
consolidation or into which the Company is merged or the Person which
acquires by conveyance or transfer, or which leases, the properties and
assets of the Company substantially as an entirety shall be a corporation,
partnership or trust, shall be organized and validly existing under the
laws of the United States of America, any State thereof or the District of
Columbia and shall expressly assume, by an indenture supplemental hereto,
executed and delivered to the Trustee, in form satisfactory to the
Trustee, the due and punctual payment of the principal of and any premium
and interest on all the Securities and the performance or observance of
every covenant of this Indenture on the part of the Company to be
performed or observed;
(2) immediately after giving effect to such transaction and
treating any indebtedness which becomes an obligation of the Company or
any Subsidiary as a result of such transaction as having been incurred by
the Company or such Subsidiary at the time of such transaction, no Event
of Default, and no event which, after notice or lapse of time or both,
would become an Event of Default, shall have happened and be continuing;
and
(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance, transfer or lease and, if a
supplemental indenture is required in connection with such transaction,
such supplemental indenture comply with this Article and that all
conditions precedent herein provided for relating to such transaction have
been complied with.
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Section 802. SUCCESSOR SUBSTITUTED.
Upon any consolidation of the Company with, or merger of the Company
into, any other Person or any conveyance, transfer or lease of the properties
and assets of the Company substantially as an entirety in accordance with
Section 801, the successor Person formed by such consolidation or into which the
Company is merged or to which such conveyance, transfer or lease is made shall
succeed to, and be substituted for, and may exercise every right and power of,
the Company under this Indenture with the same effect as if such successor
Person had been named as the Company herein, and thereafter, except in the case
of a lease, the predecessor Person shall be relieved of all obligations and
covenants under this Indenture and the Securities.
ARTICLE NINE
SUPPLEMENTAL INDENTURES
Section 901. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS.
Without the consent of any Holders, the Company, when authorized by a
Board Resolution, and the Trustee, at any time and from time to time, may enter
into one or more indentures supplemental hereto, in form satisfactory to the
Trustee, for any of the following purposes:
(1) to evidence the succession of another Person to the Company
and the assumption by any such successor of the covenants of the Company
herein and in the Securities;
(2) to add to the covenants of the Company for the benefit of the
Holders of all or any series of Securities (and if such covenants are to
be for the benefit of less than all series of Securities, stating that
such covenants are expressly being included solely for the benefit of such
series) or to surrender any right or power herein conferred upon the
Company;
(3) to add any additional Events of Default for the benefit of the
Holders of all or any series of Securities (and if such additional Events
of Default are to be for the benefit of less than all series of
Securities, stating that such additional Events of Default are expressly
being included solely for the benefit of such series);
(4) to add to or change any of the provisions of this Indenture to
such extent as shall be necessary to permit or facilitate the issuance of
Securities in bearer form, registrable or not registrable as to principal,
and
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with or without interest coupons, or to permit or facilitate the issuance
of Securities in uncertificated form;
(5) to add to, change or eliminate any of the provisions of this
Indenture in respect to one or more series of Securities, provided that
any such addition, change or elimination (A) shall neither (i) apply to
any Security or series created prior to the execution of such supplemental
indenture and entitled to the benefit of such provision nor (ii) modify
the rights of the Holder of any such Security with respect to such
provision or (B) shall become effective only when there is no such
Security Outstanding;
(6) to secure the Securities;
(7) to establish the form or terms of Securities of any series as
permitted by Sections 201 and 301;
(8) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one or
more series and to add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Trustee, pursuant
to the requirements of Section 611;
(9) to cure any ambiguity, to correct or supplement any provision
herein which may be defective or inconsistent with any other provision
herein, or to make any other provisions with respect to matters or
questions arising under this Indenture, provided that such action pursuant
to this Clause (9) shall not adversely affect the interests of the Holders
of Securities of any series in any material respect; or
(10) to make provisions with respect to the conversion rights of
Holders, including providing for the conversion of the Securities into any
security or securities of the Company.
Section 902. SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS.
With the consent of the Holders of not less than a majority in
principal amount of the Outstanding Securities of each series affected by such
supplemental indenture, by act of said Holders delivered to the Company and the
Trustee, the Company, when authorized by a Board Resolution, and the Trustee may
enter into an indenture or indentures supplemental hereto for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture,
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or of modifying in any manner the rights of the Holders of Securities of such
series under this Indenture; provided, however, that no such supplemental
indenture shall, without the consent of the Holder of each Outstanding Security
affected thereby:
(1) change the Stated Maturity of the principal of, or any
installment of principal of or interest on, any Security, or reduce the
principal amount thereof or the rate of interest thereon (including any
change in the index, indices or formula pursuant to which such rate is
determined that would reduce such rate for any period) or any premium
payable upon the redemption thereof, or reduce the amount of the principal
of an Original Issue Discount Security or any other Security which would
be due and payable upon a declaration of acceleration of the Maturity
thereof pursuant to Section 502, or change any Place of Payment where, or
the coin or currency in which, any Security or any premium or interest
thereon is payable, or impair the right to institute suit for the
enforcement of any such payment on or after the Stated Maturity thereof
(or, in the case of redemption, on or after the Redemption Date), or
(2) reduce the percentage in principal amount of the Outstanding
Securities of any series, the consent of whose Holders is required for any
such supplemental indenture, or the consent of whose Holders is required
for any waiver (of compliance with certain provisions of this Indenture or
certain defaults hereunder and their consequences) provided for in this
Indenture, or
(3) modify any of the provisions of this Section, Section 513 or
Section 1008, except to increase any such percentage or to provide that
certain other provisions of this Indenture cannot be modified or waived
without the consent of the Holder of each Outstanding Security affected
thereby; provided, however, that this clause shall not be deemed to
require the consent of any Holder with respect to changes in the
references to "the Trustee" and concomitant changes in this Section and
Section 1008, or the deletion of this proviso, in accordance with the
requirements of Sections 611 and 901(8).
A supplemental indenture which changes or eliminates any covenant or other
provision of this Indenture which has expressly been included solely for the
benefit of one or more particular series of Securities, or which modifies the
rights of the Holders of Securities of such series with respect to such covenant
or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.
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It shall not be necessary for any Act of Holders under this Section
to approve the particular form of any proposed supplemental indenture, but it
shall be sufficient if such Act shall approve the substance thereof.
Section 903. EXECUTION OF SUPPLEMENTAL INDENTURES.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 601) shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Trustee may, but shall not be
obligated to, enter into any such supplemental indenture which affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.
Section 904. EFFECT OF SUPPLEMENTAL INDENTURES.
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.
Section 905. CONFORMITY WITH TRUST INDENTURE ACT.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act.
Section 906. REFERENCE IN SECURITIES TO SUPPLEMENTAL INDENTURES.
Securities of any series authenticated and delivered after the
execution of any supplemental indenture pursuant to this Article may, and shall
if required by the Trustee, bear a notation in form approved by the Trustee as
to any matter provided for in such supplemental indenture. If the Company shall
so determine, new Securities of any series so modified as to conform, in the
opinion of the Trustee and the Company, to any such supplemental indenture may
be prepared and executed by the Company and authenticated and delivered by the
Trustee in exchange for Outstanding Securities of such series.
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ARTICLE TEN
COVENANTS
Section 1001. PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST.
The Company covenants and agrees for the benefit of each series of
Securities that it will duly and punctually pay the principal of and any premium
and interest on the Securities of that series in accordance with the terms of
the Securities and this Indenture.
Section 1002. MAINTENANCE OF OFFICE OR AGENCY.
The Company will maintain in each Place of Payment for any series of
Securities an office or agency where Securities of that series may be presented
or surrendered for payment, where Securities of that series may be surrendered
for registration of transfer or exchange and where notices and demands to or
upon the Company in respect of the Securities of that series and this Indenture
may be served. The Company will give prompt written notice to the Trustee of
the location, and any change in the location, of such office or agency. If at
any time the Company shall fail to maintain any such required office or agency
or shall fail to furnish the Trustee with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee, and the Company hereby appoints the
Trustee as its agent to receive all such presentations, surrenders, notices and
demands.
The Company may also from time to time designate one or more other
offices or agencies where the Securities of one or more series may be presented
or surrendered for any or all such purposes and may from time to time rescind
such designations; provided, however, that no such designation or rescission
shall in any manner relieve the Company of its obligation to maintain an office
or agency in each Place of Payment for Securities of any series for such
purposes. The Company will give prompt written notice to the Trustee of any
such designation or rescission and of any change in the location of any such
other office or agency.
Section 1003. MONEY FOR SECURITIES PAYMENTS TO BE HELD IN TRUST.
If the Company shall at any time act as its own Paying Agent with
respect to any series of Securities, it will, on or before each due date of the
principal of or any premium or interest on any of the Securities of that series,
segregate and hold in trust for the benefit of the Persons entitled thereto a
sum sufficient to pay the principal and any premium and interest so becoming due
until such sums shall be paid to
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such Persons or otherwise disposed of as herein provided and will promptly
notify the Trustee of its action or failure so to act.
Whenever the Company shall have one or more Paying Agent for any
series of Securities, it will, prior to each due date of the principal of or any
premium or interest on any Securities of that series, deposit with a Paying
Agent a sum sufficient to pay such amount, such sum to be held as provided by
the Trust Indenture Act, and (unless such Paying Agent is the Trustee) the
Company will promptly notify the Trustee of its action or failure so to act.
The Company will cause each Paying Agent for any series of
Securities other than the Trustee to execute and deliver to the Trustee an
instrument in which such Paying Agent shall agree with the Trustee, subject to
the provisions of this Section, that such Paying Agent will (1) comply with the
provisions of the Trust Indenture Act applicable to it as a Paying Agent and (2)
during the continuance of any default by the Company (or any other obligor upon
the Securities of that series) in the making of any payment in respect of the
Securities of that series, upon the written request of the Trustee, forthwith
pay to the Trustee all sums held in trust by such Paying Agent for payment in
respect of the Securities of that series.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such money.
Any money deposited with the Trustee or any Paying Agent, or then
held by the Company, in trust for the payment of the principal of or any premium
or interest on any Security of any series and remaining unclaimed for two years
after such principal, premium or interest has become due and payable shall be
paid to the Company on Company request, or (if then held by the Company) shall
be discharged from such trust; and the Holder of such Security shall thereafter,
as an unsecured general creditor, look only to the Company for payment thereof,
and all liability of the Trustee or such Paying Agent with respect to such trust
money, and all liability of the Company as trustee thereof, shall thereupon
cease; provided, however, that the Trustee or such Paying Agent, before being
required to make any such repayment, may at the expense of the Company
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cause to be published once, in a newspaper published in the English language,
customarily published on each Business Day and of general circulation in the
Borough of Manhattan, The City of New York, notice that such money remains
unclaimed and that, after a date specified therein, which shall not be less than
30 days from the date of such publication, any unclaimed balance of such money
then remaining will be repaid to the Company.
Section 1004. STATEMENT BY OFFICERS AS TO DEFAULT.
The Company will deliver to the Trustee, within 120 days after the
end of each fiscal year of the Company ending after the date hereof, an
Officers' Certificate stating that a review of the activities of the Company and
its subsidiaries during the preceding fiscal year has been made under the
supervision of such officers with a view to determining whether the Company has
kept, performed, fulfilled and observed its obligations under this Indenture and
stating as to each such officer signing such Officers' Certificate that, to the
best of such officers' knowledge, the Company has kept, observed, performed and
fulfilled each and every covenant contained in this Indenture and is not in
default in the performance and observance of any of the terms, provisions and
conditions of this Indenture (without regard to any period of grace or
requirement of notice provided hereunder) and, if the Company is in default,
specifying all such defaults and the nature and status thereof of which such
officer may have knowledge.
The Company will, so long as any of the Securities are outstanding,
deliver to the Trustee forthwith upon becoming aware of (i) an Event of Default
or default in the performance of a covenant or agreement or condition contained
in this Indenture or (ii) any default or Event of Default of the type provided
for herein specifying such default or Event of Default, notice of such default
or Event of Default.
Section 1005. EXISTENCE.
Subject to Article Eight, the Company will do or cause to be done
all things necessary to preserve and keep in full force and effect its
existence, rights (charter and statutory) and franchises and the existence,
rights (charter and statutory) and franchises of its subsidiaries; provided,
however, that the Company shall not be required to preserve any such right or
franchise if the Board of Directors shall determine that the preservation
thereof is no longer desirable in the conduct of the business of the Company and
that the loss thereof is not disadvantageous in any material respect to the
Holders.
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Section 1006. MAINTENANCE OF PROPERTIES.
The Company will cause all properties used or useful in the conduct
of its business or the business of any Subsidiary to be maintained and kept in
good condition, repair and working order and supplied with all necessary
equipment and will cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
the Company may be necessary so that the business carried on in connection
therewith may be properly and advantageously conducted at all times; provided,
however, that nothing in this Section shall prevent the Company from
discontinuing the operation or maintenance of any of such properties if such
discontinuance is, in the judgement of the Company, desirable in the conduct of
its business or the business of any Subsidiary and not disadvantageous in any
material respect to the Holders.
Section 1007. PAYMENT OF TAXES AND OTHER CLAIMS.
The Company will pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (1) all taxes, assessments and
governmental charges levied or imposed upon the Company or any Subsidiary or
upon the income, profits or property of the Company or any Subsidiary, and (2)
all lawful claims for labor, materials and supplies which, if unpaid, might by
law become a lien upon the property of the Company or any Subsidiary; provided,
however, that the Company shall not be required to pay or discharge or cause to
be paid or discharged any such tax, assessment, charge or claim whose amount,
applicability or validity is being contested in good faith by appropriate
proceedings.
Section 1008. WAIVER OF CERTAIN COVENANTS.
Except as otherwise specified as contemplated by Section 301 for
Securities of such series, the Company may, with respect to the Securities of
any series, omit in any particular instance to comply with any term, provision
or condition set forth in any covenant provided pursuant to Section 301(19),
901(2) or 901(7) for the benefit of the Holders of such series, if before the
time for such compliance the Holders of at least a majority in principal amount
of the Outstanding Securities of such series shall, by act of such Holders,
either waive such compliance in such instance or generally waive compliance with
such term, provision or condition, but no such waiver shall extend to or affect
such term, provision or condition except to the extent so expressly waived, and,
until such waiver shall become effective, the obligations of the Company and the
duties of the Trustee in respect of any such term, provision or condition shall
remain in full force and effect.
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Section 1009. LIMITATION ON LIENS.
(a) The Company will not, and will not permit any Restricted
Subsidiary to, create, incur, assume or guarantee any indebtedness for money
borrowed (hereinafter in Sections 1009, 1010 and 1011 referred to as "Debt"),
secured by a mortgage, security interest, pledge, lien, charge or similar
encumbrance (mortgages, security interests, pledges, liens, charges and other
encumbrances, hereinafter in Sections 1009, 1010 and 1011 referred to as a
"Mortgage") upon any Principal Property of the Company or any Restricted
Subsidiary or upon any shares of stock or indebtedness or any Restricted
Subsidiary (whether such Principal Property, shares of stock or indebtedness are
now owned or hereafter acquired) without in any such case effectively providing
concurrently with the issuance, assumption or guaranty of any such Debt that the
Outstanding Securities (together with, if the Company shall so determine, any
other indebtedness of or guarantee by the Company or such Restricted Subsidiary
ranking equally with the Outstanding Securities and then existing or thereafter
created) shall be secured equally and ratably with such Debt; provided, however,
that the foregoing restrictions shall not apply to Debt secured by:
(i) Mortgages on property, shares of stock or indebtedness of any
corporation existing at the time such corporation becomes a Restricted
Subsidiary;
(ii) Mortgages on property existing at the time of acquisition of
such property by the Company or a Restricted Subsidiary, Mortgages to
secure the payment of all or any part of the purchase price of such
property incurred prior to, at the time of, or within 180 days after the
acquisition of such property by the Company or a Restricted Subsidiary, or
Mortgages to secure any debt incurred prior to, at the time of, or within
180 days after the completion of construction or commencement of full
operation of any property for the purpose of financing all or any part of
the cost to the Company or a Restricted Subsidiary of improvements to such
property;
(iii) Mortgages securing Debt of a Restricted Subsidiary owing to
the Company or to another Restricted Subsidiary;
(iv) Mortgages existing at the date of this Indenture;
(v) Mortgages on property of a corporation existing at the time
such corporation is merged into or consolidated with the Company or a
Restricted Subsidiary
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or at the time of a sale, lease or other disposition of the properties of
a corporation as an entirety or substantially as an entirety to the
Company or a Restricted Subsidiary;
(vi) Mortgages on property of the Company or a Restricted
Subsidiary in favor of the United States of America or any State thereof,
or any department, agency, instrumentality or political subdivision
thereof, to secure any payments, including advance or progress payments,
pursuant to any contract or statute or to secure any indebtedness incurred
or guaranteed for the purpose of financing all or any part of the purchase
price or the cost of construction of the property subject to such
Mortgages (including, but not limited to, Mortgages incurred in connection
with pollution control bonds, industrial revenue bonds or similar
financings); or
(vii) any extension, renewal or replacement (or successive
extensions, renewals or replacements), in whole or in part, of any
Mortgage referred to in the foregoing clauses (i) to (vi), inclusive;
provided, however, that such extension, renewal or replacement shall be
limited to all or a part of the property which secured the Mortgage so
extended, renewed or replaced (plus improvements on such property).
(b) Notwithstanding the foregoing provisions of this Section 1009,
the Company and any one or more Restricted Subsidiaries may issue, assume or
guarantee Debt secured by a Mortgage which would otherwise be subject to the
foregoing restrictions in an aggregate amount which, together with all other
outstanding Debt of the Company and its Restricted Subsidiaries which (if
originally issued, assumed or guaranteed at such time) would otherwise be
subject to the foregoing restrictions (not including Debt permitted to be
secured under clauses (i) through (vii) above), does not at the time exceed the
greater of $300,000,000 or 10% of Consolidated Net Tangible Assets of the
Company and its consolidated Subsidiaries as shown on the most recent
consolidated financial statements of the Company and its consolidated
Subsidiaries.
Section 1010. LIMITATION ON SALE AND LEASE-BACK.
The Company will not, nor will it permit any Restricted Subsidiary
to, enter into any arrangement with any Person that provides for the leasing to
the Company or any Restricted Subsidiary of any Principal Property (except for
leases for a term of not more than three years and except for leases between the
Company and a Restricted Subsidiary or between Restricted Subsidiaries), which
Principal Property has been or is to be sold or transferred by the Company or
such
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Restricted Subsidiary to such person, unless (a) the Company or such
Restricted Subsidiary would be entitled, pursuant to the provisions of Section
1009, to issue, assume or guarantee Debt secured by a Mortgage upon such
Principal Property at least equal in the amount to the Attributable Debt in
respect of such arrangement without equally and ratably securing the Outstanding
Securities; provided, however, that from and after the date on which such
arrangement becomes effective the Attributable Debt in respect of such
arrangement shall be deemed for all purposes under Sections 1009 and 1010 to be
Debt subject to the provisions of Section 1009, or (b) the Company shall apply
an amount in cash equal to the greater of the net proceeds of such sale or the
Attributable Debt in respect of such an arrangement to the retirement (other
than any mandatory retirement or by way or payment at maturity), within 120 days
of the effective date of any such arrangement, of Debt (except as otherwise
provided by the terms of any series of Outstanding Securities) of the Company or
any Restricted Subsidiary (other than the Debt owed by the Company or any
Restricted Subsidiary to the Company or any Restricted Subsidiary) which by its
terms matures at or is extendible or renewable at the opinion of the obligor to
a date more than twelve months after the date of the creation of such Debt.
For the purposes of this Section 1010, the term "Attributable Debt"
means, at the time of determination, the lesser of (a) the fair market value of
such property (as determined by the Board of Directors of the Company) or (b)
the present value (discounted at the rate implicit in the terms of the relevant
lease) of the obligation of the lessee for net rental payments during the
remaining term of the lease (including any period for which such lease has been
extended).
Section 1011. LIMITATIONS ON FUNDED DEBT OF RESTRICTED SUBSIDIARIES.
(a) The Company will not permit any Restricted Subsidiary to
issue, assume or guarantee any Funded Debt other than (i) Funded Debt owed to,
or any guaranty of Funded Debt which constitutes an obligation of, the Company
or a Restricted Subsidiary, (ii) Funded Debt Secured by Mortgages excluded from
the operation of Section 1009(a) by clauses (i) through (vii) thereof, (iii)
Funded Debt of a corporation outstanding at the time such corporation first
becomes a Restricted Subsidiary or (iv) any Funded Debt incurred by any
Restricted Subsidiary to extend, renew or refund any equivalent amount of Funded
Debt of such Restricted Subsidiary.
(b) Notwithstanding the provisions of Section 1011(a), any
Restricted Subsidiary may issue, assume or guarantee Funded Debt which would
otherwise be subject to the restrictions of Section 1011(a) in an aggregate
amount which,
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together with the other Funded Debt of all Restricted Subsidiaries
(excluding Funded Debt permitted by clauses (i), (ii), (iii) and (iv) of Section
1011(a)), does not exceed 10% of Consolidated Net Tangible Assets.
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
Section 1101. APPLICABILITY OF ARTICLE.
Securities of any series which are redeemable before their Stated
Maturity shall be redeemable in accordance with their terms and (except as
otherwise specified as contemplated by Section 301 for such Securities) in
accordance with this Article.
Section 1102. ELECTION TO REDEEM; NOTICE TO TRUSTEE.
The election of the Company to redeem any Securities shall be
evidenced by a Board Resolution or in another manner specified as contemplated
by Section 301 for such Securities. In case of any redemption at the election
of the Company of less than all the Securities of any series (including any such
redemption affecting only a single Security), the Company shall, at least 60
days prior to the Redemption Date fixed by the Company (unless a shorter notice
shall be satisfactory to the Trustee), notify the Trustee in writing of such
Redemption Date, of the principal amount of Securities of such series to be
redeemed and, if applicable, of the tenor of the Securities to be redeemed. In
the case of any redemption of Securities prior to the expiration of any
restriction on such redemption provided in the terms of such Securities or
elsewhere in this Indenture, the Company shall furnish the Trustee with an
Officers' Certificate evidencing compliance with such restriction.
Section 1103. SELECTION BY TRUSTEE OF SECURITIES TO BE REDEEMED.
If less than all the Securities of any series are to be redeemed
(unless all the Securities of such series and of a specified tenor are to be
redeemed or unless such redemption affects only a single Security), the
particular Securities to be redeemed shall be selected not more than 60 days
prior to the Redemption Date by the Trustee, from the Outstanding Securities of
such series not previously called for redemption, by such method as the Trustee
shall deem fair and appropriate and which may provide for the selection for
redemption of a portion of the principal amount of any Security of such series,
provided that the unredeemed portion of the principal amount of any Security
shall be in an authorized denomination (which shall not be less than the minimum
authorized denomination) for
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such Security. If less than all the Securities of such series and of a
specified tenor are to be redeemed (unless such redemption affects only a single
Security), the particular Securities to be redeemed shall be selected not more
than 60 days prior to the Redemption Date by the Trustee, from the Outstanding
Securities of such series and specified tenor not previously called for
redemption in accordance with the preceding sentence.
The Trustee shall promptly notify the Company in writing of the
Securities selected for redemption as aforesaid and, in case of any Securities
selected for partial redemption as aforesaid, the principal amount thereof to be
redeemed.
The provisions of the two preceding paragraphs shall not apply with
respect to any redemption affecting only a single Security, whether such
Security is to be redeemed in whole or in part. In the case of any such
redemption in part, the unredeemed portion of the principal amount of the
Security shall be in an authorized denomination (which shall not be less than
the minimum authorized denomination) for such Security.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall relate,
in the case of any Securities redeemed or to be redeemed only in part, to the
portion of the principal amount of such Securities which has been or is to be
redeemed.
Section 1104. NOTICE OF REDEMPTION.
Notice of redemption shall be given by first-class mail, postage
prepaid, mailed not less than 30 nor more than 60 days prior to the Redemption
Date, to each Holder of Securities to be redeemed, at his address appearing in
the Security Register.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) if less than all the Outstanding Securities of any series
consisting of more than a single Security are to be redeemed, the
identification (and, in the case of partial redemption of any such
Securities, the principal amounts) of the particular Securities to be
redeemed and, if less than all the Outstanding Securities of any series
consisting of a single Security are to be redeemed, the principal amount
of the particular Security to be redeemed,
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(4) that on the Redemption Date the Redemption Price will become
due and payable upon each such Security to be redeemed and, if applicable,
that interest thereon will cease to accrue on and after said date,
(5) the place or places where each such Security is to be
surrendered for payment of the Redemption Price, and
(6) that the redemption is for a sinking fund, if such is the
case.
Notice of redemption of Securities to be redeemed at the election of
the Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company.
Section 1105. DEPOSIT OF REDEMPTION PRICE.
Prior to any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust as provided in Section 1003) an amount of
money sufficient to pay the Redemption Price of, and (except if the Redemption
Date shall be an Interest Payment Date) accrued interest on, all the Securities
which are to be redeemed on that date.
Section 1106. SECURITIES PAYABLE ON REDEMPTION DATE.
Notice of redemption having been given as aforesaid, the Securities
so to be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified, and from and after such date (unless the
Company shall default in the payment of the Redemption Price and accrued
interest) such Securities shall cease to bear interest. Upon surrender of any
such Security for redemption in accordance with said notice, such Security shall
be paid by the Company at the Redemption Price, together with accrued interest
to the Redemption Date; provided, however, that, unless otherwise specified as
contemplated by Section 301, installments of interest whose Stated Maturity is
on or prior to the Redemption Date will be payable to the Holders of such
Securities, or one or more Predecessor Securities, registered as such at the
close of business on the relevant Record Dates according to their terms and the
provisions of Section 307.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal and any premium shall, until
paid, bear interest from the Redemption Date at the rate prescribed therefor in
the Security.
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Section 1107. SECURITIES REDEEMED IN PART.
Any Security which is to be redeemed only in part shall be
surrendered at a Place of Payment therefor (with, if the Company or the Trustee
so requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed by, the Holder thereof
or his attorney duly authorized in writing), and the Company shall execute, and
the Trustee shall authenticate and deliver to the Holder of such Security
without service charge, a new Security or Securities of the same series and of
like tenor, of any authorized denomination as requested by such Holder, in
aggregate principal amount equal to and in exchange for the unredeemed portion
of the principal of the Security so surrendered.
ARTICLE TWELVE
SINKING FUNDS
Section 1201. APPLICABILITY OF ARTICLE.
The provisions of this Article shall be applicable to any sinking
fund for the retirement of Securities of any series except as otherwise
specified as contemplated by Section 301 for such Securities.
The minimum amount of any sinking fund payment provided for by the
terms of any Securities is herein referred to as a "mandatory sinking fund
payment", and any payment in excess of such minimum amount provided for by the
terms of such Securities is herein referred to as an "optional sinking fund
payment". If provided for by the terms of any Securities, the cash amount of
any sinking fund payment may be subject to reduction as provided in Section
1202. Each sinking fund payment shall be applied to the redemption of
Securities as provided for by the terms of such Securities.
Section 1202. SATISFACTION OF SINKING FUND PAYMENTS WITH SECURITIES.
The Company (1) may deliver Outstanding Securities of a series
(other than any previously called for redemption) and (2) may apply as a credit
Securities of a series which have been redeemed either at the election of the
Company pursuant to the terms of such Securities or through the application of
permitted optional sinking fund payments pursuant to the terms of such
Securities, in each case in satisfaction of all or any part of any sinking fund
payment with respect to any Securities of such series required to be made
pursuant to the terms of such Securities as and to the extent provided for by
the terms
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of such Securities; provided that the Securities to be so credited have not been
previously so credited. The Securities to be so credited shall by received and
credited for such purpose by the Trustee at the Redemption Price, as specified
in the Securities so to be redeemed, for redemption through operation of the
sinking fund and the amount of such sinking fund payment shall be reduced
accordingly.
Section 1203. REDEMPTION OF SECURITIES FOR SINKING FUND.
Not less than . . . . . . days prior to each sinking fund payment
date for any Securities, the Company will deliver to the Trustee an Officers'
Certificate specifying the amount of the next ensuing sinking fund payment for
such Securities pursuant to the terms of such Securities, the portion thereof,
if any, which is to be satisfied by payment of cash and the portion thereof, if
any, which is to be satisfied by delivering and crediting Securities pursuant to
Section 1202 and will also deliver to the Trustee any Securities to be so
delivered. Not less than . . . . . . days prior to each such sinking fund
payment date, the Trustee shall select the Securities to be redeemed upon such
sinking fund payment date in the manner specified in Section 1103 and cause
notice of the redemption thereof to be given in the name of and at the expense
of the Company in the manner provided in Section 1104. Such notice having been
duly given, the redemption of such Securities shall be made upon the terms and
in the manner stated in Sections 1106 and 1107.
ARTICLE THIRTEEN
DEFEASANCE AND COVENANT DEFEASANCE
Section 1301. APPLICABILITY OF ARTICLE; COMPANY'S OPTION TO EFFECT DEFEASANCE
OR COVENANT DEFEASANCE.
Unless otherwise provided pursuant to Section 301, this Article
Thirteen shall be applicable to the Securities of such series, and the Company
may at its option by Board Resolution, at any time, with respect to the
Securities of such series, elect to have either Section 1302 (if applicable) or
Section 1303 (if applicable) be applied to the Outstanding Securities of such
series upon compliance with the conditions set forth below in this Article
Thirteen.
Section 1302. DEFEASANCE AND DISCHARGE.
Upon the Company's exercise of its option (if any) to have this
Section applied to any Securities or any series of Securities, as the case may
be, the Company shall be deemed to have been discharged from its obligations
with respect to such Securities as provided in this Section on and after the
date
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the conditions set forth in Section 1304 are satisfied (hereinafter called
"Defeasance"). For this purpose, such Defeasance means that the Company shall
be deemed to have paid and discharged the entire indebtedness represented by
such Securities and to have satisfied all its other obligations under such
Securities and this Indenture insofar as such Securities are concerned (and the
Trustee, at the expense of the Company, shall execute proper instruments
acknowledging the same), subject to the following which shall survive until
otherwise terminated or discharged hereunder; (1) the rights of Holders of such
Securities to receive, solely from the trust fund described in Section 1304 and
as more fully set forth in such Section, payments in respect of the principal of
and any premium and interest on such Securities when payments are due, (2) the
Company's obligations with respect to such Securities under Sections 304, 305,
306, 1002 and 1003, (3) the rights, powers, trusts, duties and immunities of the
Trustee hereunder, and (4) this Article. Subject to compliance with this
Article, the Company may exercise its option (if any) to have this Section
applied to any Securities notwithstanding the prior exercise of its option (if
any) to have Section 1303 applied to such Securities.
Section 1303. COVENANT DEFEASANCE.
Upon the Company's exercise of its option (if any) to have this
Section applied to any Securities or any series of Securities, as the case may
be, (1) the Company shall be released from its obligations under Sections 1006
and 1007 (and any other Sections or covenants applicable to such Securities that
are determined pursuant to Section 301 to be subject to this provision), and any
covenants provided pursuant to Section 301(19), 901(2) or 901(7) for the benefit
of the Holders of such Securities, and (2) the occurrence of any event specified
in Section 501(4) (with respect to Sections 1006 and 1007 (and any other
Sections or covenants applicable to such Securities that are determined pursuant
to Section 301 to be subject to this provision), and any such Covenants provided
pursuant to Sections 301(19), 901(2) or 901(7) and 501(7) shall be deemed not to
be or result in an Event of Default, in each case with respect to such
Securities as provided in this Section on and after the date the conditions set
forth in Section 1304 are satisfied (hereinafter called "Covenant Defeasance").
For this purpose, such Covenant Defeasance means that, with respect to such
Securities, the Company may omit to comply with and shall have no liability in
respect of any term, condition or limitation set forth in any such specified
Section (to the extent so specified in the case of Section 501(4)), whether
directly or indirectly by reason of any reference elsewhere herein to any such
Section or Article or by reason of any reference in any such Section or Article
to any other
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provision herein or in any other document, but the remainder of this Indenture
and such Securities shall be unaffected thereby.
Section 1304. CONDITIONS TO DEFEASANCE OR COVENANT DEFEASANCE.
The following shall be the conditions to the application of Section
1302 or Section 1303 to any Securities or any series of Securities, as the case
may be:
(1) The Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee which satisfies the
requirements contemplated by Section 609 and agrees to comply with the
provisions of this Article applicable to it) as trust funds in trust for
the purpose of making the following payments, specifically pledged as
security for, and dedicated solely to, the benefit of the Holders of such
Securities, (A) in the case of Securities of such series denominated in
U.S. dollars, (i) money in an amount, (ii) U.S. Government Obligations
that through the scheduled payment of principal and interest in respect
thereof in accordance with their terms will provide, not later than one
day before the due date of any payment, money in an amount, or (iii) a
combination thereof, in each case sufficient, in the opinion of a
nationally recognized firm of independent public accountants expressed in
a written certification thereof delivered to the Trustee, to pay and
discharge, and which shall be applied by the Trustee (or any such other
qualifying trustee) to pay and discharge, the principal of and any premium
and interest on such Securities on the respective Stated Maturities, in
accordance with the terms of this Indenture and such Securities. As used
herein, "U.S. Government Obligation" means (x) any security that is (i) a
direct obligation of the United States of America for the payment of which
the full faith and credit of the United States of America is pledged or
(ii) an obligation of a Person controlled or supervised by and acting as
an agency or instrumentality of the United States of America the payment
of which is unconditionally guaranteed as a full faith and credit
obligation by the United States of America, which, in either case (i) or
(ii), is not callable or redeemable at the option of the issuer thereof,
and (y) any depositary receipt issued by a bank (as defined in Section
3(a)(2) of the Securities Act) as custodian with respect to any U.S.
Government Obligation which is specified in Clause (x) above and held by
such bank for the account of the holder of such depositary receipt, or
with respect to any specific payment of principal of or interest on any
U.S. Government Obligation which is so specified and held, provided that
(except as required by law) such custodian is not authorized to make any
deduction from the amount payable to the holder of
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such depositary receipt from any amount received by the custodian in
respect of the U.S. Government Obligation or the specific payment of
principal or interest evidenced by such depositary receipt or (B) in the
case of Securities of such series denominated in a currency other than the
U.S. dollar, (i) money in such currency in an amount, or (ii) Foreign
Government Obligations that through the scheduled payment of principal and
interest in respect thereof in accordance with their terms will provide,
not later than one day before the due date of any payment, money in such
currency in an amount, or (iii) a combination thereof, in each case
sufficient, in the opinion of a nationally recognized firm of independent
public accountants expressed in a written certification thereof delivered
to the Trustee, to pay and discharge, and which shall be applied by the
Trustee (or any such other qualifying trustee) to pay and discharge, the
principal of and any premium and interest on the Securities of such series
on the respective Stated Maturities, in accordance with the terms of this
Indenture and the Securities of such series. As used herein, "Foreign
Government Obligation" means (x) any security that is (i) a direct
obligation of the government that issued such currency for the payment of
which full faith and credit of such government is pledged or (ii) an
obligation of a Person controlled or supervised by and acting as an agency
or instrumentality for such government the payment of which is
unconditionally guaranteed as a full faith and credit obligation by such
government, which, in either case (i) or (ii), is not callable or
redeemable at the option of the issuer thereof, and (y) any depositary
receipt issued by a bank (as defined in Section 3(a)(2) of the Securities
Act) as custodian with respect to any Foreign Government Obligation which
is specified in Clause (x) and held by such bank for the account of the
holder of such depositary receipt, or with respect to any specific payment
of principal of or interest on any such Foreign Government Obligation
which is so specified and held, provided that (except as required by law)
such custodian is not authorized to make any deduction from the amount
payable to the holder of such depositary receipt from any amount received
by the custodian in respect of the Foreign Government Obligation or the
specific payment of principal or interest evidenced by such depositary
receipt.
(2) In the event of an election to have Section 1302 apply to any
Securities or any series of Securities, as the case may be, the Company
shall have delivered to the Trustee an Opinion of Counsel stating that (A)
the Company has received from, or there has been published by, the
Internal Revenue Service a ruling or (B) since the date of
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this instrument, there has been a change in the applicable Federal income
tax law, in either case (A) or (B) to the effect that, and based thereon
such opinion shall confirm that, the Holders of such Securities will not
recognize gain or loss for Federal income tax purposes as a result of the
deposit, Defeasance and discharge to be effected with respect to such
Securities and will be subject to Federal income tax on the same amount,
in the same manner and at the same times as would be the case if such
deposit, Defeasance and discharge were not to occur.
(3) In the event of an election to have Section 1303 apply to any
Securities or any series of Securities, as the case may be, the Company
shall have delivered to the Trustee an Opinion of Counsel to the effect
that the Holders of such Securities will not recognize gain or loss for
Federal income tax purposes as a result of the deposit and Covenant
Defeasance to be effected with respect to such Securities and will be
subject to Federal income tax on the same amount, in the same manner and
at the same times as would be the case if such deposit and Covenant
Defeasance were not to occur.
(4) The Company shall have delivered to the Trustee an Officer's
Certificate to the effect that neither such Securities nor any other
Securities of the same series, if then listed on any securities exchange,
will be delisted as a result of such deposit.
(5) No event which is, or after notice or lapse of time or both
would become, an Event of Default with respect to such Securities or any
other Securities shall have occurred and be continuing at the time of such
deposit or, with regard to any such event specified in Sections 501(5) and
(6), at any time on or prior to the 90th day after the date of such
deposit (it being understood that this condition shall not be deemed
satisfied until after such 90th day).
(6) Such Defeasance or Covenant Defeasance shall not cause the
Trustee to have a conflicting interest within the meaning of the Trust
Indenture Act (assuming all Securities are in default within the meaning
of such Act).
(7) Such Defeasance or Covenant Defeasance shall not result in a
breach or violation of, or constitute a default under, any other agreement
or instrument to which the Company is a party or by which it is bound.
(8) Such Defeasance or Covenant Defeasance shall not result in the
trust arising from such deposit constituting an investment company within
the meaning of the Investment
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Company Act unless such trust shall be registered under such Act or exempt
from registration thereunder.
(9) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent with respect to such Defeasance or Covenant Defeasance have been
complied with.
Section 1305. DEPOSITED MONEY AND U.S. GOVERNMENT OBLIGATIONS TO BE HELD IN
TRUST; MISCELLANEOUS PROVISIONS.
Subject to the provisions of the last paragraph of Section 1003, all
money and U.S. Government Obligations or Foreign Government Obligations
(including the proceeds thereof) deposited with the Trustee or other qualifying
trustee (solely for purposes of this Section and Section 1306, the Trustee and
any such other trustee are referred to collectively as the "Trustee") pursuant
to Section 1304 in respect of any Securities shall be held in trust and applied
by the Trustee, in accordance with the provisions of such Securities and this
Indenture, to the payment, either directly or through any such Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Holders of such Securities, of all sums due and to become due
thereon in respect of principal and any premium and interest, but money so held
in trust need not be segregated from other funds except to the extent required
by law.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the U.S. Government Obligations
or Foreign Government Obligations deposited pursuant to Section 1304 or the
principal and interest received in respect thereof other than any such tax, fee
or other charge which by law is for the account of the Holders of Outstanding
Securities.
Anything in this Article to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon Company
Request any money or U.S. Government Obligations held by it as provided in
Section 1304 with respect to any Securities that, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee, are in excess of an amount
thereof which would then be required to be deposited to effect the Defeasance or
Covenant Defeasance, as the case may be, with respect to such Securities.
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Section 1306. REINSTATEMENT.
If the Trustee or the Paying Agent is unable to apply any money in
accordance with this Article with respect to any Securities by reason of any
order or judgment of any court or governmental authority enjoining, restraining
or otherwise prohibiting such application, then the obligations under this
Indenture and such Securities from which the Company has been discharged or
released pursuant to Section 1302 or 1303 shall be revived and reinstated as
though no deposit had occurred pursuant to this Article with respect to such
Securities, until such time as the Trustee or Paying Agent is permitted to apply
all money held in trust pursuant to Section 1305 with respect to such Securities
in accordance with this Article; provided, however, that if the Company makes
any payment of principal of or any premium or interest on any such Security
following such reinstatement of its obligations, the Company shall be subrogated
to the rights (if any) of the Holders of such Securities to receive such payment
from the money so held in trust.
This instrument may be executed in any number of counterparts, each
of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, and their respective corporate seals to be hereunto affixed
and attested, all as of the day and year first above written.
NORTHROP GRUMMAN CORPORATION
By ________________________________
ATTEST:
______________________
THE CHASE MANHATTAN BANK (NATIONAL
ASSOCIATION), as Trustee
By ________________________________
ATTEST:
________________________
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State of California )
)
County of __________ )
On ______________ before me, __________________, Notary Public, personally
appeared ___________________________________,
/ / personally known to me or / / proved to me on the basis of satisfactory
evidence to be the person(s) whose name(s) is/are subscribed to the within
instrument and acknowledged to me that he/she/they executed the same in
his/her/their authorized capacity(ies), and that by his/her/their signature(s)
on the instrument the person(s), or the entity upon behalf of which the
person(s) acted, executed the instrument.
WITNESS my hand and official seal.
_______________________________
State of New York )
)
County of __________ )
On ______________ before me, __________________, Notary Public, personally
appeared ___________________________________,
/ / personally known to me or / / proved to me on the basis of satisfactory
evidence to be the person(s) whose name(s) is/are subscribed to the within
instrument and acknowledged to me that he/she/they executed the same in
his/her/their authorized capacity(ies), and that by his/her/their signature(s)
on the instrument the person(s), or the entity upon behalf of which the
person(s) acted, executed the instrument.
WITNESS my hand and official seal.
_______________________________
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EXHIBIT 4-6
NORTHROP GRUMMAN CORPORATION
TO
THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION), TRUSTEE
---------------
INDENTURE
Dated as of _____________, 199__
---------------
SUBORDINATED DEBT SECURITIES
TABLE OF CONTENTS
Page
----
ARTICLE ONE DEFINITIONS AND OTHER PROVISIONS OF
GENERAL APPLICATION . . . . . . . . . . . . . . . . . . . . 1
Section 101. Definitions. . . . . . . . . . . . . . . . . . . . . . 1
Section 102. Compliance Certificates and Opinions.. . . . . . . . . 9
Section 103. Form of Documents Delivered to Trustee.. . . . . . . . 9
Section 104. Acts of Holders; Record Dates. . . . . . . . . . . . . 10
Section 105. Notices, Etc., to Trustee and Company. . . . . . . . . 13
Section 106. Notice to Holders; Waiver. . . . . . . . . . . . . . . 13
Section 107. Conflict with Trust Indenture Act. . . . . . . . . . . 14
Section 108. Effect of Headings and Table of Contents.. . . . . . . 14
Section 109. Successors and Assigns.. . . . . . . . . . . . . . . . 14
Section 110. Separability Clause. . . . . . . . . . . . . . . . . . 14
Section 111. Benefits of Indenture. . . . . . . . . . . . . . . . . 14
Section 112. Governing Law. . . . . . . . . . . . . . . . . . . . . 14
Section 113. Legal Holidays.. . . . . . . . . . . . . . . . . . . . 15
ARTICLE TWO SECURITY FORMS. . . . . . . . . . . . . . . . . . . . . . . 15
Section 201. Forms Generally. . . . . . . . . . . . . . . . . . . . 15
Section 202. Form of Face of Security . . . . . . . . . . . . . . . 16
Section 203. Form of Reverse of Security. . . . . . . . . . . . . . 18
Section 204. Form of Legend for Global Securities . . . . . . . . . 23
Section 205. Form of Trustee's Certificate of Authentication. . . . 23
ARTICLE THREE THE SECURITIES . . . . . . . . . . . . . . . . . . . . 23
Section 301. Amount Unlimited; Issuable in Series . . . . . . . . . 23
Section 302. Denominations. . . . . . . . . . . . . . . . . . . . . 27
Section 303. Execution, Authentication, Delivery and Dating . . . . 27
Section 304. Temporary Securities . . . . . . . . . . . . . . . . . 29
Section 305. Registration, Registration of Transfer and
Exchange . . . . . . . . . . . . . . . . . . . . . . . 30
Section 306. Mutilated, Destroyed, Lost or Stolen Securities. . . . 32
Section 307. Payment of Interest; Interest Rights Preserved . . . . 33
Section 308. Persons Deemed Owners. . . . . . . . . . . . . . . . . 35
Section 309. Cancellation . . . . . . . . . . . . . . . . . . . . . 35
Section 310. Computation of Interest. . . . . . . . . . . . . . . . 35
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ARTICLE FOUR SATISFACTION AND DISCHARGE . . . . . . . . . . . . . . 35
Section 401. Satisfaction and Discharge of Indenture. . . . . . . . 35
Section 402. Application of Trust Money . . . . . . . . . . . . . . 37
ARTICLE FIVE REMEDIES . . . . . . . . . . . . . . . . . . . . . . . 37
Section 501. Events of Default. . . . . . . . . . . . . . . . . . . 37
Section 502. Acceleration of Maturity; Rescission and Annulment . . 39
Section 503. Collection of Indebtedness and Suits for
Enforcement by Trustee . . . . . . . . . . . . . . . . 40
Section 504. Trustee May File Proofs of Claim . . . . . . . . . . . 41
Section 505. Trustee May Enforce Claims Without Possession of
Securities . . . . . . . . . . . . . . . . . . . . . . 41
Section 506. Application of Money Collected . . . . . . . . . . . . 42
Section 507. Limitation on Suits. . . . . . . . . . . . . . . . . . 42
Section 508. Unconditional Right of Holders to Receive
Principal, Premium and Interest and to Convert . . . . 43
Section 509. Restoration of Rights and Remedies . . . . . . . . . . 43
Section 510. Rights and Remedies Cumulative . . . . . . . . . . . . 43
Section 511. Delay or Omission Not Waiver . . . . . . . . . . . . . 44
Section 512. Control by Holders . . . . . . . . . . . . . . . . . . 44
Section 513. Waiver of Past Defaults. . . . . . . . . . . . . . . . 44
Section 514. Undertaking for Costs. . . . . . . . . . . . . . . . . 45
Section 515. Waiver of Usury, Stay or Extension Laws. . . . . . . . 45
ARTICLE SIX THE TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 601. Certain Duties and Responsibilities. . . . . . . . . . 45
Section 602. Notice of Defaults . . . . . . . . . . . . . . . . . . 47
Section 603. Certain Rights of Trustee. . . . . . . . . . . . . . . 47
Section 604. Not Responsible for Recitals or Issuance of
Securities . . . . . . . . . . . . . . . . . . . . . . 49
Section 605. May Hold Securities. . . . . . . . . . . . . . . . . . 49
Section 606. Money Held in Trust. . . . . . . . . . . . . . . . . . 49
Section 607. Compensation and Reimbursement . . . . . . . . . . . . 49
Section 608. Conflicting Interests. . . . . . . . . . . . . . . . . 50
Section 609. Corporate Trustee Required; Eligibility. . . . . . . . 50
Section 610. Resignation and Removal; Appointment of Successor. . . 51
Section 611. Acceptance of Appointment by Successor . . . . . . . . 52
Section 612. Merger, Conversion, Consolidation or Succession to
Business . . . . . . . . . . . . . . . . . . . . . . . 54
Section 613. Preferential Collection of Claims Against Company. . . 54
Section 614. Appointment of Authenticating Agent. . . . . . . . . . 54
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ARTICLE SEVEN HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY. . . 56
Section 701. Company to Furnish Trustee Names and Addresses of
Holders. . . . . . . . . . . . . . . . . . . . . . . . 56
Section 702. Preservation of Information; Communications to
Holders. . . . . . . . . . . . . . . . . . . . . . . . 57
Section 703. Reports by Trustee . . . . . . . . . . . . . . . . . . 57
Section 704. Reports by Company . . . . . . . . . . . . . . . . . . 57
ARTICLE EIGHT CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE. . . . 58
Section 801. Company May Consolidate, Etc., Only on Certain
Terms. . . . . . . . . . . . . . . . . . . . . . . . . 58
Section 802. Successor Substituted. . . . . . . . . . . . . . . . . 59
ARTICLE NINE SUPPLEMENTAL INDENTURES . . . . . . . . . . . . . . . . . . 59
Section 901. Supplemental Indentures Without Consent of Holders . . 59
Section 902. Supplemental Indentures with Consent of Holders. . . . 61
Section 903. Execution of Supplemental Indentures . . . . . . . . . 62
Section 904. Effect of Supplemental Indentures. . . . . . . . . . . 62
Section 905. Conformity with Trust Indenture Act. . . . . . . . . . 62
Section 906. Reference in Securities to Supplemental Indentures . . 63
Section 907. Subordination Unimpaired . . . . . . . . . . . . . . . 63
ARTICLE TEN COVENANTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Section 1001. Payment of Principal, Premium and Interest . . . . . . 63
Section 1002. Maintenance of Office or Agency. . . . . . . . . . . . 63
Section 1003. Money for Securities Payments to Be Held in Trust. . . 64
Section 1004. Statement by Officers as to Default. . . . . . . . . . 65
Section 1005. Existence. . . . . . . . . . . . . . . . . . . . . . . 66
Section 1006. Maintenance of Properties. . . . . . . . . . . . . . . 66
Section 1007. Payment of Taxes and Other Claims. . . . . . . . . . . 66
Section 1008. Waiver of Certain Covenants. . . . . . . . . . . . . . 67
ARTICLE ELEVEN REDEMPTION OF SECURITIES. . . . . . . . . . . . . . . . . . 67
Section 1101. Applicability of Article . . . . . . . . . . . . . . . 67
Section 1102. Election to Redeem; Notice to Trustee. . . . . . . . . 67
Section 1103. Selection by Trustee of Securities to Be Redeemed. . . 68
Section 1104. Notice of Redemption . . . . . . . . . . . . . . . . . 68
Section 1105. Deposit of Redemption Price. . . . . . . . . . . . . . 69
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Section 1106. Securities Payable on Redemption Date. . . . . . . . . 69
Section 1107. Securities Redeemed in Part. . . . . . . . . . . . . . 70
ARTICLE TWELVE SINKING FUNDS . . . . . . . . . . . . . . . . . . . . . . . 70
Section 1201. Applicability of Article . . . . . . . . . . . . . . . 70
Section 1202. Satisfaction of Sinking Fund Payments with
Securities . . . . . . . . . . . . . . . . . . . . . . 71
Section 1203. Redemption of Securities for Sinking Fund. . . . . . . 71
ARTICLE THIRTEEN DEFEASANCE AND COVENANT DEFEASANCE. . . . . . . . . . . . . 72
Section 1301. Applicability of Article; Company's Option to
Effect Defeasance or Covenant Defeasance . . . . . . . 72
Section 1302. Defeasance and Discharge . . . . . . . . . . . . . . . 72
Section 1303. Covenant Defeasance. . . . . . . . . . . . . . . . . . 72
Section 1304. Conditions to Defeasance or Covenant Defeasance. . . . 73
Section 1305. Deposited Money and U.S. Government Obligations to
Be Held in Trust; Miscellaneous Provisions . . . . . . 77
Section 1306. Reinstatement. . . . . . . . . . . . . . . . . . . . . 77
ARTICLE FOURTEEN SUBORDINATION OF SECURITIES . . . . . . . . . . . . . . . . 78
Section 1401. Debt Securities Subordinate to Senior Indebtedness . . 78
Section 1402. Trustee And Holders Of Debt Securities May Rely On
Certificate Of Liquidating Agent; Trustee May
Require Further Evidence As To Ownership Of Senior
Indebtedness; Trustee Not Fiduciary To Holders Of
Senior Indebtedness. . . . . . . . . . . . . . . . . . 81
Section 1403. Payment Permitted If No Default. . . . . . . . . . . . 82
Section 1404. Trustee Not Charged With Knowledge Of Prohibition. . . 82
Section 1405. Trustee to Effectuate Subordination. . . . . . . . . . 83
Section 1406. Rights Of Trustee As Holder Of Senior Indebtedness . . 83
Section 1407. Article Applicable To Paying Agents. . . . . . . . . . 83
Section 1408. Subordination Rights Not Impaired By Acts Or
Omissions Of The Company Or Holders Of Senior
Indebtedness . . . . . . . . . . . . . . . . . . . . . 83
NOTE: THIS TABLE OF CONTENTS SHALL NOT, FOR ANY PURPOSE, BE DEEMED TO BE A PART
OF THE INDENTURE.
-iv-
INDENTURE dated as of _______________, 199__ between NORTHROP GRUMMAN
CORPORATION, a corporation duly organized and existing under the laws of the
State of Delaware (herein called the "Company"), having its principal office at
1840 Century Park East, Los Angeles, California, and THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION), a corporation duly organized and existing under the laws
of the United States, as Trustee (herein called the "Trustee"), having its
Corporate Trust Office at 4 Chase MetroTech Center, Brooklyn, New York 11245.
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its unsecured
debentures, notes or other evidences of indebtedness (herein called the
"Securities"), to be issued in one or more series as this Indenture provides.
All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the promises and the purchase of the
Securities by the Holders thereof, it is mutually agreed, for the equal and
proportionate benefit of all Holders of the Securities or of series thereof, as
follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
Section 101. DEFINITIONS.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles, and, except as otherwise herein expressly provided, the term
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"generally accepted accounting principles" with respect to any computation
required or permitted hereunder shall mean such accounting principles as
are generally accepted at the date hereof;
(4) unless the context otherwise requires, any reference to an
"Article" or a "Section" refers to an Article or a Section, as the case may
be, of this Indenture; and
(5) the words "herein," "hereof," and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
"Act," when used with respect to any Holder, has the meaning specified
in Section 104.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Authenticating Agent" means any Person authorized by the Trustee
pursuant to Section 614 to act on behalf of the Trustee to authenticate
Securities of one or more series.
"Board of Directors" means either the board of directors of the
Company or any duly authorized committee of that board.
"Board Resolution" means (i) a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly
adopted by the Board of Directors and to be in full force and effect on the
date of such certification, or (ii) a certificate signed by the authorized
officer or officers of the Company to whom the Board of Directors of the
Company has delegated its authority, and in each case, delivered to the
Trustee.
"Business Day," when used with respect to any Place of Payment, means
each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on
which banking institutions in that Place of Payment are authorized or
obligated by law or executive order to close.
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"Commission" means the Securities and Exchange Commission, from time
to time constituted, created under the Exchange Act, or, if at any time
after the execution of this instrument such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act,
then the body performing such duties at such time.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor Person shall have become
such pursuant to the applicable provisions of this Indenture, and
thereafter "Company" shall mean such successor Person.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its Chairman of the Board, its Vice
Chairman of the Board, its President or a Vice President, and by its
Treasurer, an Assistant Treasurer, its Secretary or an Assistant Secretary,
and delivered to the Trustee.
"Corporate Trust Office" means the principal office of the Trustee or
agent of the Trustee, in either case, in the Borough of Manhattan, The City
of New York, at which at any particular time the corporate trust business
of the Trustee shall be administered.
"corporation" means a corporation, association, company, joint-stock
company or business trust.
"Covenant Defeasance" has the meaning specified in Section 1303.
"Defaulted Interest" has the meaning specified in Section 307.
"Defeasance" has the meaning specified in Section 1302.
"Depositary" means, with respect to Securities of any series issuable
in whole or in part in the form of one or more Global Securities, a
clearing agency registered under the Exchange Act that is designated to act
as Depositary for such Securities as contemplated by Section 301.
"Event of Default" has the meaning specified in Section 501.
"Exchange Act" means the Securities Exchange Act of 1934 and any
statute successor thereto, in each case as amended from time to time.
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"Existing Subordinated Indebtedness" [to come]
"Expiration Date" has the meaning specified in Section 104.
"Foreign Government Obligation" has the meaning specified in
Section 1304.
"Global Security" means a Security that evidences all or part of the
Securities of any series and bears the legend set forth in Section 204 (or
such legend as may be specified as contemplated by Section 301 for such
Securities).
"Holder" means a Person in whose name a Security is registered in the
Security Register.
"Indenture" means this instrument as originally executed and as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions
hereof, including, for all purposes of this instrument and any such
supplemental indenture, the provisions of the Trust Indenture Act that are
deemed to be a part of and govern this instrument and any such supplemental
indenture, respectively. The term "Indenture" shall also include the terms
of particular series of Securities established as contemplated by
Section 301.
"interest," when used with respect to an Original Issue Discount
Security which by its terms bears interest only after Maturity, means
interest payable after Maturity.
"Interest Payment Date," when used with respect to any Security, means
the Stated Maturity of an installment of interest on such Security.
"Investment Company Act" means the Investment Company Act of 1940 and
any statute successor thereto, in each case as amended from time to time.
"Maturity," when used with respect to any Security, means the date on
which the principal of such Security or an installment of principal becomes
due and payable as therein or herein provided, whether at the Stated
Maturity or by declaration of acceleration, call for redemption or
otherwise.
"Notice of Default" means a written notice of the kind specified in
Section 501(4).
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"Officers' Certificate" means a certificate signed by the Chairman of
the Board, a Vice Chairman of the Board, the President or a Vice President,
and by the Treasurer, an Assistant Treasurer, the Secretary or an Assistant
Secretary, of the Company, and delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company, and who shall be acceptable to the Trustee.
"Original Issue Discount Security" means any Security which provides
for an amount less than the principal amount thereof to be due and payable
upon a declaration of acceleration of the Maturity thereof pursuant to
Section 502.
"Outstanding," when used with respect to Securities, means, as of the
date of determination, all Securities theretofore authenticated and
delivered under this Indenture, except:
(1) Securities theretofore cancelled by the Trustee or delivered to
the Trustee for cancellation;
(2) Securities for whose payment or redemption money in the necessary
amount has been theretofore deposited with the Trustee or any Paying Agent
(other than the Company) in trust or set aside and segregated in trust by
the Company (if the Company shall act as its own Paying Agent) for the
Holders of such Securities; provided that, if such Securities are to be
redeemed, notice of such redemption has been duly given pursuant to this
Indenture or provision therefor satisfactory to the Trustee has been made;
(3) Securities as to which Defeasance has been effected pursuant to
Section 1302; and
(4) Securities which have been paid pursuant to Section 306 or in
exchange for or in lieu of which other Securities have been authenticated
and delivered pursuant to this Indenture, other than any such Securities in
respect of which there shall have been presented to the Trustee proof
satisfactory to it that such Securities are held by a bona fide purchaser
in whose hands such Securities are valid obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given, made or taken
any request, demand, authorization, direction, notice, consent, waiver or
other
-5-
action hereunder as of any date, (A) the principal amount of an Original
Issue Discount Security which shall be deemed to be Outstanding shall be
the amount of the principal thereof which would be due and payable as of
such date upon acceleration of the Maturity thereof to such date pursuant
to Section 502, (B) if, as of such date, the principal amount payable at
the Stated Maturity of a Security is not determinable, the principal amount
of such Security which shall be deemed to be Outstanding shall be the
amount as specified or determined as contemplated by Section 301, (C) the
principal amount of a Security denominated in one or more foreign
currencies or currency units which shall be deemed to be Outstanding shall
be the U.S. dollar equivalent, determined as of such date in the manner
provided as contemplated by Section 301, of the principal amount of such
Security (or, in the case of a Security described in Clause (A) or (B)
above, of the amount determined as provided in such Clause), and
(D) Securities owned by the Company or any other obligor upon the
Securities of any Affiliate of the Company or of such other obligor shall
be disregarded and deemed not to be Outstanding, except that, in
determining whether the Trustee shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent, waiver or other
action, only Securities which a responsible officer of the Trustee actually
knows to be so owned shall be so disregarded. Securities so owned which
have been pledged in good faith may be regarded as Outstanding if the
pledgee establishes to the satisfaction of the Trustee the pledgee's right
so to act with respect to such Securities and that the pledgee is not the
Company or any other obligor upon the Securities or any Affiliate of the
Company or of such other obligor.
"Paying Agent" means any Person authorized by the Company to pay the
principal of or any premium or interest on any Securities on behalf of the
Company.
"Person" means any individual, corporation, partnership, joint
venture, trust, unincorporated organization or government or any agency or
political subdivision thereof.
"Place of Payment," when used with respect to the Securities of any
series, means the place or places where the principal of any premium and
interest on the Securities of that series are payable as specified as
contemplated by Section 301.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by
such particular
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Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 306 in exchange for or in lieu of
a mutilated, destroyed, lost or stolen Security shall be deemed to evidence
the same debt as the mutilated, destroyed, lost or stolen Security.
"Redemption Date," when used with respect to any Security to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"Redemption Price," when used with respect to any Security to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"Regular Record Date" for the interest payable on any Interest Payment
Date on the Securities of any series means the date specified for that
purpose as contemplated by Section 301.
"Responsible Officer," when used with respect to the Trustee, means
any officer within the Corporate Trust Office of the Trustee including any
vice president, the secretary, any assistant secretary, the treasurer, any
assistant treasurer, the cashier, any assistant cashier, any trust officer
or assistant trust officer or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above
designated officers and also means, with respect to a particular corporate
trust matter, any other officer to whom such matter is referred because of
his knowledge of and familiarity with the particular subject.
"Securities" has the meaning stated in the first recital of this
Indenture and more particularly means any Securities authenticated and
delivered under this Indenture.
"Securities Act" means the Securities Act of 1933 and any statute
successor thereto, in each case as amended from time to time.
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 305.
"Senior Indebtedness" means the principal of (and premium, if any) and
interest (including, without limitation, any post-petition interest) on any
indebtedness, whether outstanding at the date hereof or thereafter created
or incurred, which is for (a) money borrowed by the Company,
(b) obligations of the Company evidencing the purchase price for
acquisitions by the Company or a subsidiary other than in the ordinary
course
-7-
of business, (c) money borrowed by others and assumed or guaranteed by the
Company, (d) capitalized lease obligations of the Company, (e) obligations
under performance guarantees, support agreements and other agreements in
the nature thereof and (f) renewals, extensions, refundings, amendments and
modifications of any indebtedness, of the kind described in the foregoing
clauses (a), (b), (c), (d) and (e) or of the instruments creating or
evidencing such indebtedness, unless, in each case, by the terms of the
instrument creating or evidencing such indebtedness or such renewal,
extension, refunding, amendment and modification, it is provided that such
indebtedness is not senior in right of payment to the Securities.
"Special Record Date" for the payment of any Defaulted Interest means
a date fixed by the Trustee pursuant to Section 307.
"Stated Maturity," when used with respect to any Security or any
installment of principal thereof or interest thereon, means the date
specified in such Security as the fixed date on which the principal of such
Security or such installment of principal or interest is due and payable.
"Subsidiary" means a corporation more than 50% of the outstanding
voting stock of which is owned, directly or indirectly, by the Company or
by one or more other Subsidiaries, or by the Company and one or more other
Subsidiaries. For the purposes of this definition, "voting stock" means
stock which ordinarily has voting power for the election of directors,
whether at all times or only so long as no senior class of stock has such
voting power by reason of any contingency.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in
force at the date as of which this instrument was executed; provided,
however, that in the event the Trust Indenture Act of 1939 is amended after
such date, "Trust Indenture Act" means, to the extent required by any such
amendment, the Trust Indenture Act of 1939 as so amended.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become
such pursuant to the applicable provisions of this Indenture, and
thereafter "Trustee" shall mean or include each Person who is then a
Trustee hereunder, and if at any time there is more than one such Person,
"Trustee" as used with respect to the Securities
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of any series shall mean the Trustee with respect to Securities of that
series.
"U.S. Government Obligation" has the meaning specified in
Section 1304.
"Vice President," when used with respect to the Company or the
Trustee, means any vice president, whether or not designated by a number or
a word or words added before or after the title "Vice President."
Section 102. COMPLIANCE CERTIFICATES AND OPINIONS.
Upon any application or request by the Company to the Trustee to take
any action under any provision of this Indenture, the Company shall furnish to
the Trustee such certificates and opinions as may be required under the Trust
Indenture Act. Each such certificate or opinion shall be given in the form of
an Officers' Certificate, if to be given by an officer of the Company, or an
Opinion of Counsel, if to be given by counsel, and shall comply with the
requirements of the Trust Indenture Act and any other requirements set forth in
this Indenture.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
Section 103. FORM OF DOCUMENTS DELIVERED TO TRUSTEE.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified
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by, or covered by the opinion of, only one such Person, or that they be so
certified or covered by only one document, but one such Person may certify or
give an opinion with respect to some matters and one or more other such Persons
as to other matters, and any such Person may certify or give an opinion as to
such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon an opinion of counsel, unless such
officer knows, or in the exercise of reasonable care should know, that the
opinion with respect to the matters upon which his certificate or opinion is
based are erroneous. Any such certificate or opinion of counsel may be based,
insofar as it relates to factual matters, upon a certificate of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or representations with respect to such matters are
erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Section 104. ACTS OF HOLDERS; RECORD DATES.
Any request, demand, authorization, direction, notice, consent, waiver
or other action provided or permitted by this Indenture to be given, made or
taken by Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for any purpose of this
Indenture and (subject to Section 601) conclusive in favor of the Trustee and
the Company, if made in the manner provided in this Section.
The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual
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signing such instrument or writing acknowledged to him the execution thereof.
Where such execution is by a signer acting in a capacity other than his
individual capacity, such certificate or affidavit shall also constitute
sufficient proof of his authority. The fact and date of the execution of any
such instrument or writing, or the authority of the Person executing the same,
may also be proved in any other manner which the Trustee deems sufficient.
The ownership of Securities shall be proved by the Security Register.
Any request, demand, authorization, direction, notice, consent, waiver
or other Act of the Holder of any Security shall bind every future Holder of the
same Security and the Holder of every Security issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Trustee or the Company in
reliance thereon, whether or not notation of such action is made upon such
Security.
The Company may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities of any series entitled to
give, make or take any request, demand, authorization, direction, notice,
consent, waiver or other action provided or permitted by this Indenture to be
given, made or taken by Holders of Securities of such series, provided that the
Company may not set a record date for, and the provisions of this paragraph
shall not apply with respect to, the giving or making of any notice,
declaration, request or direction referred to in the next paragraph. If any
record date is set pursuant to this paragraph, the Holders of Outstanding
Securities of the relevant series on such record date, and no other Holders,
shall be entitled to take the relevant action, whether or not such Holders
remain Holders after such record date; provided that no such action shall be
effective hereunder unless taken on or prior to the applicable Expiration Date
by Holders of the requisite principal amount of Outstanding Securities of such
series on such record date. Nothing in this paragraph shall be construed to
prevent the Company from setting a new record date for any action for which a
record date has previously been set pursuant to this paragraph (whereupon the
record date previously set shall automatically and with no action by any Person
be cancelled and of no effect), and nothing in this paragraph shall be construed
to render ineffective any action taken by Holders of the requisite principal
amount of Outstanding Securities of the relevant series on the date such action
is taken. Promptly after any record date is set pursuant to this paragraph, the
Company, at its own expense, shall cause notice of such record date, the
proposed action by Holders and the applicable Expiration Date to be given to the
Trustee in writing and to
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each Holder of Securities of the relevant series in the manner set forth in
Section 106.
The Trustee may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities of any series entitled to join
in the giving or making of (i) any Notice of Default, (ii) any declaration of
acceleration referred to in Section 502, (iii) any request to institute
proceedings referred to in Section 507(2) or (iv) any direction referred to in
Section 512, in each case with respect to Securities of such series. If any
record date is set pursuant to this paragraph, the Holders of Outstanding
Securities of such series on such record date, and no other Holders, shall be
entitled to join in such notice, declaration, request or direction, whether or
not such Holders remain Holders after such record date; provided that no such
action shall be effective hereunder unless taken on or prior to the applicable
Expiration Date by Holders of the requisite principal amount of Outstanding
Securities of such series on such record date. Nothing in this paragraph shall
be construed to prevent the Trustee from setting a new record date for any
action for which a record date has previously been set pursuant to this
paragraph (whereupon the record date previously set shall automatically and with
no action by any Person be cancelled and of no effect), and nothing in this
paragraph shall be construed to render ineffective any action taken by Holders
of the requisite principal amount of Outstanding Securities of the relevant
series on the date such action is taken. Promptly after any record date is set
pursuant to this paragraph, the Trustee, at the Company's expense, shall cause
notice of such record date, the proposed action by Holders and the applicable
Expiration Date to be given to the Company in writing and to each Holder of
Securities of the relevant series in the manner set forth in Section 106.
With respect to any record date set pursuant to this Section, the
party hereto which sets such record dates may designate any date as the
"Expiration Date" and from time to time may change the Expiration Date to any
earlier or later day; provided that no such change shall be effective unless
notice of the proposed new Expiration Date is given to the other party hereto in
writing, and to each Holder of Securities of the relevant series in the manner
set forth in Section 106, on or prior to the existing Expiration Date. If an
Expiration Date is not designated with respect to any record date set pursuant
to this Section, the party hereto which sets such record date shall be deemed to
have initially designated the 180th day after such record date as the Expiration
Date with respect thereto, subject to its right to change the Expiration Date as
provided in this paragraph. Notwithstanding the foregoing, no Expiration Date
shall be later than the 180th day after the applicable record date.
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Without limiting the foregoing, a Holder entitled hereunder to give or
take any action hereunder with regard to any particular Security may do so with
regard to all or any part of the principal amount of such Security or by one or
more duly appointed agents each of which may do so pursuant to such appointment
with regard to all or any part of such principal amount.
Section 105. NOTICES, ETC., TO TRUSTEE AND COMPANY.
Any request, demand, authorization, direction, notice, consent, waiver
or Act of Holders or other document provided or permitted by this Indenture to
be made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be sufficient
for every purpose hereunder if made, given, furnished or filed in writing
to or with the Trustee at 4 MetroTech Center, Brooklyn, New York 11245,
Attn: Corporate Trust Department, or
(2) the Company by the Trustee or by any Holder shall be sufficient
for every purpose hereunder (unless otherwise herein expressly provided) if
in writing and mailed, first-class postage prepaid, to the Company
addressed to it at the address of its principal office specified in the
first paragraph of this instrument or at any other address previously
furnished in writing to the Trustee by the Company.
Section 106. NOTICE TO HOLDERS; WAIVER.
Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, to each Holder affected
by such event, at his address as it appears in the Security Register, not later
than the latest date (if any), and not earlier than the earliest date (if any),
prescribed for the giving of such notice. In any case where notice to Holders
is given by mail, neither the failure to mail such notice, nor any defect in any
notice so mailed, to any particular Holder shall affect the sufficiency of such
notice with respect to other Holders. Where this Indenture provides for notice
in any manner, such notice may be waived in writing by the Person entitled to
receive such notice, either before or after the event, and such waiver shall be
the equivalent of such notice. Waivers of notice by Holders shall be filed with
the Trustee, but such filing shall not be a condition precedent to the validity
of any action taken in reliance upon such waiver.
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In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice by mail,
then such notification as shall be made with the approval of the Trustee shall
constitute a sufficient notification for every purpose hereunder.
Section 107. CONFLICT WITH TRUST INDENTURE ACT.
If any provision hereof limits, qualifies or conflicts with a
provision of the Trust Indenture Act that is required under such Act to be a
part of and govern this Indenture, the latter provision shall control. If any
provision of this Indenture modifies or excludes any provision of the Trust
Indenture Act that may be so modified or excluded, the latter provision shall be
deemed to apply to this Indenture as so modified or to be excluded, as the case
may be.
Section 108. EFFECT OF HEADINGS AND TABLE OF CONTENTS.
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
Section 109. SUCCESSORS AND ASSIGNS.
All covenants and agreements in this Indenture by the Company shall
bind its successors and assigns, whether so expressed or not.
Section 110. SEPARABILITY CLAUSE.
In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
Section 111. BENEFITS OF INDENTURE.
Nothing in this Indenture or in the Securities, express or implied,
shall give to any Person, other than the parties hereto and their successors
hereunder any benefit or any legal or equitable right, remedy or claim under
this Indenture.
Section 112. GOVERNING LAW.
This Indenture and the Securities shall be governed by and construed
in accordance with the law of the State of New York, without regard to
principles of conflicts of laws.
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Section 113. LEGAL HOLIDAYS.
In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Security shall not be a Business Day at any Place of Payment,
then (notwithstanding any other provision of this Indenture or of the Securities
(other than a provision of any Security that specifically states that such
provision shall apply in lieu of this Section)) payment of interest or principal
(and premium, if any) need not be made at such Place of Payment on such date,
but may be made on the next succeeding Business Day at such Place of Payment
with the same force and effect as if made on the Interest Payment Date or
Redemption Date, or at the Stated Maturity, provided, that no interest shall
accrue with respect to such payment for the period from and after such Interest
Payment Date, Redemption Date or Stated Maturity, as the case may be.
ARTICLE TWO
SECURITY FORMS
Section 201. FORMS GENERALLY.
The Securities of each series shall be in substantially the form set
forth in this Article, or in such other form as shall be established by or
pursuant to a Board Resolution or in one or more indentures supplemental hereto,
in each case with such appropriate insertions, omissions, substitutions and
other variations as are required or permitted by this Indenture, and may have
such letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with the rules of any
securities exchange or as may, consistently herewith, be determined by the
officers executing such Securities, as evidenced by their execution thereof. If
the form of Securities of any series is established by action taken pursuant to
a Board Resolution, a copy of an appropriate record of such action shall be
certified by the Secretary or an Assistant Secretary of the Company and
delivered to the Trustee at or prior to the delivery of the Company Order
contemplated by Section 303 for the authentication and delivery of such
Securities.
The definitive Securities shall be printed, lithographed or engraved
on steel engraved borders or may be produced in any other manner, all as
determined by the officers executing such Securities, as evidenced by their
execution of such Securities.
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Section 202. FORM OF FACE OF SECURITY.
[Insert any legend required by the Internal Revenue Code and the
regulations thereunder.]
NORTHROP GRUMMAN CORPORATION
________________________________________________________________________________
No. ____________ $ _____________
CUSIP _____________
Northrop Grumman Corporation, a corporation duly organized and
existing under the laws of Delaware (herein called the "Company," which term
includes any successor Person under the Indenture hereinafter referred to), for
value received, hereby promises to pay to _______________________, or registered
assigns, the principal sum of ______________________ [Dollars] [if other than
Dollars, substitute other currency or currency units] on
____________________________________________ [If the Security is to bear
interest prior to Maturity, Interest __, and to pay interest thereon from
_________________ or from the most recent Interest Payment Date to which
interest has been paid or duly provided for, [semi-annually on ________
______________________ and _____________________ in each year] [if other than
semi-annual interest at a fixed rate, insert frequency of payments and payment
dates], commencing ___________________ at [If the Security is to bear interest
at a fixed rate, insert -- the rate of ____% per annum] [if the Security is to
bear interest at a rate determined with reference to one or more formula, refer
to description of index below], until the principal hereof is paid or made
available for payment [If applicable, insert --, provided that any principal and
premium, and any such installment of interest, which is overdue shall bear
interest at the rate of ____% per annum (to the extent that the payment of such
interest shall be legally enforceable), from the dates such amounts are due
until they are paid or made available for payment, and such interest shall be
payable on demand.] Interest shall be computed on the basis of a 360-day year
of twelve 30-day months. The interest so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, as provided in such Indenture,
be paid to the Person in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest, which shall be the _________________ or ___________________
(whether or not a Business Day), as the case may be, next preceding such
Interest Payment Date. Any such interest not so punctually paid or duly
provided for will forthwith cease to be payable to the Holder on such Regular
Record Date and may either be paid to the Person in whose name this Security (or
one or more Predecessor Securities) is registered at the close of business on a
Special Record Date for the Payment of such Defaulted Interest to be
-16-
fixed by the Trustee, notice whereof shall be given to Holders of Securities of
this series not less than 10 days prior to such Special Record Date, or be paid
at any time in any other lawful manner not inconsistent with the requirements of
any securities exchange on which the Securities of this series may be listed,
and upon such notice as may be required by such exchange, all as more fully
provided in said Indenture].
[If the Securities are securities with respect to which the principal
of or any premium or interest may be determined with reference to one or more
indices or formulas, insert the text of such indices or formulas]
[If the Security is not to bear interest prior to Maturity, insert --
The principal of this Security shall not bear interest except in the case of a
default in payment of principal upon acceleration, upon redemption or at Stated
Maturity and in such case the overdue principal and any overdue premium shall
bear interest at the rate of _____% per annum (to the extent that the payment of
such interest shall be legally enforceable), from the dates such amounts are due
until they are paid or made available for payment. Interest on any overdue
principal or premium shall be payable on demand. [Any such interest on overdue
principal or premium which is not paid on demand shall bear interest at the rate
of _______________% per annum (to the extent that the payment of such interest
on interest shall be legally enforceable), from the date of such demand until
the amount so demanded is paid or made available for payment. Interest on any
overdue interest shall be payable on demand.]]
Payment of the principal of (and premium, if any) and [if applicable,
interest -- any such] interest on this Security will be made at the office or
agency of the Company maintained for that purpose in ________________ in such
coin or currency [of the United States of America] [if the Security is
denominated in a currency other than U.S. dollars, specify other currency or
currency unit in which payment of the principal of any premium or interest may
be made] as at the time of payment is legal tender for payment of public and
private debts [if applicable, insert --; provided, however, that at the option
of the Company payment of interest may be made by check mailed to the address of
the Person entitled thereto as such address shall appear in the Security
Register or by wire transfer to an account maintained by the person entitled
thereto as specified in the Security Register.]
Reference is hereby made to the further provisions of this Security
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
-17-
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated: ________________
NORTHROP GRUMMAN CORPORATION
By ___________________________________
Attest:
______________________
Section 203. FORM OF REVERSE OF SECURITY.
This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), issued and to be issued in one or more
series under an Indenture, dated as of ________________, 199__ (herein called
the "Indenture", which term shall have the meaning assigned to it in such
instrument), between the Company and The Chase Manhattan Bank (National
Association), as Trustee (herein called the "Trustee", which term includes any
successor trustee under the Indenture), and reference is hereby made to the
Indenture for a statement of the respective rights, limitations of rights,
duties and immunities thereunder of the Company, the Trustee and the Holders of
the Securities and of the terms upon which the securities are, and are to be
authenticated and delivered. This Security is one of the series designated on
the face hereof [if applicable, insert -- limited in aggregate principal amount
to $________________]. [The Securities are [unsecured general obligations of
the Company.]]
[If applicable, insert -- the securities of this series are subject to
redemption upon not less than 30 days' notice by mail, [If applicable, insert --
(1) on _______________ in any year commencing with the year _____________ and
ending with the year ______________ through operation of the sinking fund for
this series at a Redemption Price equal to 100% of the principal amount, and
(2)] at any
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time [if applicable, insert -- on or after ______________, 19___], as a whole or
in part, at the election of the Company, at the following Redemption Prices
(expressed as percentages of the principal amount): If redeemed [if applicable,
insert -- on or before __________________, _____% and if redeemed] during the
12-month period beginning ________________ of the years indicated,
Redemption Redemption
Year Price Year Price
---- ---------- ---- ----------
and thereafter at a Redemption Price equal to _____% of the principal amount,
together in the case of any such redemption [if applicable, insert -- (whether
through operation of the sinking fund or otherwise)] with accrued interest to
the Redemption Date, but interest installments whose Stated Maturity is on or
prior to such Redemption Date will be payable to the Holders of such Securities,
or one or more Predecessor Securities, of record at the close of business on the
relevant Record Dates referred to on the face hereof, all as provided in the
Indenture.]
[If applicable, insert -- The Securities of this series are subject to
redemption upon not less than 30 days' notice by mail, (1) on ______________ in
any year commencing with the year ______ and ending with the year ______ through
operation of the sinking fund for this series at the Redemption Prices for
redemption through operation of the sinking fund (expressed as percentages of
the principal amount) set forth in the table below, and (2) at any time [if
applicable, insert -- on or after ________________, as a whole or in part, at
the election of the Company, at the Redemption Prices for redemption otherwise
than through operation of the sinking fund (expressed as percentages of the
principal amount) set forth in the table below: If redeemed during the 12-month
period beginning _____________________ of the years indicated,
Redemption Price
For Redemption Redemption Price For
Through Operation Redemption Otherwise
of the Than Through Operation
Year Sinking Fund of the Sinking Fund
---- ---------------- ----------------------
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and thereafter at a Redemption Price equal to __________% of the principal
amount, together in the case of any such redemption (whether through operation
of the sinking fund or otherwise) with accrued interest to the Redemption Date,
but interest installments whose Stated Maturity is on or prior to such
Redemption Date will be payable to the Holders of such Securities, or one or
more Predecessor Securities, of record at the close of business on the relevant
Record Dates referred to on the face hereof, all as provided in the Indenture.]
[If applicable, insert -- Notwithstanding the foregoing, the Company
may not, prior to ________________ redeem any Securities of this series as
contemplated by [if applicable, insert -- Clause (2) of the preceding paragraph
as a part of, or in anticipation of, any refunding operation by the application,
directly or indirectly, of moneys borrowed having an interest cost to the
Company (calculated in accordance with generally accepted financial practice) of
less than _________% per annum.]
[If applicable, insert -- The sinking fund for this series provides
for the redemption on __________________ in each year beginning with the year
___________ and ending with the year ________ of [if applicable, insert -- not
less than $_______________ ("mandatory sinking fund") and not more than]
$_______________ aggregate principal amount of Securities of this series.
Securities of this series acquired or redeemed by the Company otherwise than
through [if applicable, insert -- mandatory] sinking fund payments may be
credited against subsequent [if applicable, insert -- mandatory] [sinking fund
payments otherwise required to be made [if applicable, insert --, in the inverse
order in which they become due].]
[If the Security is subject to redemption of any kind, insert -- In
the event of redemption of this Security in part only, a new Security or
Securities of this series and of like tenor for the unredeemed portion hereof
will be issued in the name of the Holder hereof upon the cancellation hereof.]
[Insert paragraph regarding subordination of the Security.]
[If applicable, insert -- The Indenture contains provisions for
defeasance at any time of [the entire indebtedness of this Security] [or]
[certain restrictive covenants and Events of Default with respect to this
Security] [, in each case] upon compliance with certain conditions set forth in
the Indenture.]
[If the Security is convertible into securities of the Company,
specify the conversion features.]
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[If the Security is not an Original Issue Discount Security, insert --
If an Event of Default with respect to Securities of this series shall occur and
be continuing, the principal of the Securities of this series may be declared
due and payable in the manner and with the effect provided in the Indenture.]
[If the Security is an Original Issue Discount Security, insert -- If
an Event of Default with respect to Securities of this series shall occur and be
continuing, an amount of principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture. Such amount shall be equal to -- [insert formula for determining the
amount.] Upon payment (i) of the amount of principal so declared due and
payable and (ii) of interest on any overdue principal, premium and interest (in
each case to the extent that the payment of such interest shall be legally
enforceable), all of the Company's obligations in respect of the payment of the
principal of and premium and interest, if any, on the Securities of this series
shall terminate.]
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of a majority in principal amount of the securities at
the time Outstanding of each series to be affected. The Indenture also contains
provisions permitting the Holders of specified percentages in principal amount
of the Securities of each series at the time Outstanding, on behalf of the
Holders of all Securities of such series, to waive compliance by the Company
with certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Security shall be conclusive and binding upon such Holder and upon all
future Holders of this Security and of any Security issued upon the registration
of transfer hereof or in exchange herefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Security.
As provided in and subject to the provisions of the Indenture, the
Holder of this Security shall not have the right to institute any proceeding
with respect to the Indenture or for the appointment of a receiver or trustee or
for any other remedy thereunder, unless such Holder shall have previously given
the Trustee written notice of a continuing Event of Default with respect to the
Securities of this series, the Holders of not less than 25% in principal amount
of the Securities of this series at the time Outstanding shall have made written
request to the Trustee to institute proceedings in
-21-
respect of such Event of Default as Trustee and offered the Trustee reasonable
indemnity, and the Trustee shall not have received from the Holders of a
majority in principal amount of Securities of this series at the time
Outstanding a direction inconsistent with such request, and shall have failed to
institute any such proceeding, for 60 days after receipt of such notice, request
and offer of indemnity. The foregoing shall not apply to any suit instituted by
the Holder of this Security for the enforcement of any payment of principal
hereof or any premium or interest hereon on or after the respective due dates
expressed herein.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of and any premium and
interest on this Security at the times, place and rate, and in the coin or
currency, herein prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Security is registrable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company in any place where the principal of and any
premium and interest on this Security are payable, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Securities of
this series and of like tenor, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees.
The Securities of this series are issuable only in registered form
without coupons in denominations of $1,000 and any integral multiple thereof.
As provided in the Indenture and subject to certain limitations therein set
forth, Securities of this series are exchangeable for a like aggregate principal
amount of Securities of this series and of like tenor of a different authorized
denomination, as requested by the Holder surrendering the same.
No service charge shall be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Security is registered as the owner
hereof for all purposes, whether or not this Security be overdue, and
-22-
neither the Company, the Trustee nor any such agent shall be affected by notice
to the contrary.
All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
Section 204. FORM OF LEGEND FOR GLOBAL SECURITIES.
Unless otherwise specified as contemplated by Section 301 for the
Securities evidenced thereby, every Global Security authenticated and delivered
hereunder shall bear a legend in substantially the following form:
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A
NOMINEE THEREOF. THIS SECURITY MAY NOT BE TRANSFERRED TO, OR REGISTERED OR
EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REGISTERED IN THE NAME OF ANY
PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE.
Section 205. FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION.
The Trustee's certificates of authentication shall be in substantially
the following form:
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION),
As Trustee
By _____________________________________
Authorized Officer
ARTICLE THREE
THE SECURITIES
Section 301. AMOUNT UNLIMITED; ISSUABLE IN SERIES.
The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is unlimited.
The Securities may be issued in one or more series. There shall be
established in or pursuant to a Board Resolution
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and, subject to Section 303, set forth, or determined in the manner provided, in
an Officers' Certificate, or established in one or more indentures supplemental
hereto, prior to the issuance of Securities of any series:
(1) the title of the Securities of the series (which shall
distinguish the Securities of the series from Securities of any other
series);
(2) any limit upon the aggregate principal amount of the Securities
of the series which may be authenticated and delivered under this Indenture
(except for Securities authenticated and delivered upon registration of
transfer of, or in exchange for, or in lieu of, other Securities of the
series pursuant to Section 304, 305, 306, 906 or 1107 and except for any
Securities which, pursuant to Section 303, are deemed never to have been
authenticated and delivered hereunder);
(3) the Person to whom any interest on a Security of the series shall
be payable, if other than the Person in whose name that Security (or one or
more Predecessor Securities) is registered at the close of business on the
Regular Record Date for such interest;
(4) the date or dates on which the principal of any Securities of the
series is payable;
(5) the rate or rates at which any Securities of the series shall
bear interest, if any, the date or dates from which any such interest shall
accrue, the Interest Payment Dates on which any such interest shall be
payable and the Regular Record Date for any such interest payable on any
Interest Payment Date;
(6) the place or places where the principal of and any premium and
interest on any Securities of the series shall be payable;
(7) the period or periods within which, the price or prices at which
and the terms and conditions upon which any Securities of the series may be
redeemed, in whole or in part, at the option of the Company;
(8) the obligation, if any, of the Company to redeem or purchase any
Securities of the series pursuant to any sinking fund or analogous
provisions or at the option of the Holder thereof and the period or periods
within which, the price or prices at which and the terms and conditions
upon which any Securities of the series shall be redeemed or purchased, in
whole or in part, pursuant to such obligation;
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(9) any provision for the conversion or exchange of Securities of the
series, either at the option of the Holder thereof or the Company, into or
for another security or securities of the Company, the security or
securities into or for which, the period or periods within which, the price
or prices, including any adjustments thereto, at which and the other terms
and conditions upon which any Securities of the series shall be converted
or exchanged, in whole or in part, pursuant to such obligation;
(10) if other than denominations of $1,000 and any integral multiple
thereof, the denominations in which any Securities of the series shall be
issuable;
(11) if the amount of principal of or any premium or interest on any
Securities of the series may be determined with reference to one or more
indices or pursuant to a formula, the manner in which such amounts shall be
determined;
(12) if other than the currency of the United States of America, the
currency, currencies or currency units in which the principal of or any
premium or interest on any Securities of the series shall be payable and
the manner of determining the equivalent thereof in the currency of the
United States of America for any purpose, including for purposes of the
definition of "Outstanding" in Section 101;
(13) if the principal of or any premium or interest on any Securities
of the series is to be payable, at the election of the Company or the
Holder thereof, in one or more currencies or currency units other than that
or those in which such Securities are stated to be payable, the currency,
currencies or currency units in which the principal of or any premium or
interest on such Securities as to which such election is made shall be
payable, the periods within which and the terms and conditions upon which
such election is to be made and the amount so payable (or the manner in
which such amount shall be determined);
(14) if other than the entire principal amount thereof, the portion of
the principal amount of any Securities of the series which shall be payable
upon declaration of acceleration of the Maturity thereof pursuant to
Section 502;
(15) if the principal amount payable at the Stated Maturity of any
Securities of the series will not be
-25-
determinable as of any one or more dates prior to the Stated Maturity, the
amount which shall be deemed to be the principal amount of such Securities
as of any such date for any purpose thereunder or hereunder, including the
principal amount thereof which shall be due and payable upon any Maturity
other than the Stated Maturity or which shall be deemed to be Outstanding
as of any date prior to the Stated Maturity (or, in any such case, the
manner in which such amount deemed to be the principal amount shall be
determined);
(16) whether either or both of Section 1302 or Section 1303 shall not
apply to the Securities of the series;
(17) if and as applicable, that any Securities of the series shall be
issuable in whole or in part in the form of one or more Global Securities
and, in such case, the respective Depositaries for such Global Securities,
the form of any legend or legends which shall be borne by any such Global
Security in addition to or in lieu of that set forth in Section 204 and any
circumstances in addition to or in lieu of those set forth in Clause (2) of
the last paragraph of Section 305 in which any such Global Security may be
exchanged in whole or in part for Securities registered, and any transfer
of such Global Security in whole or in part may be registered, in the name
or names of Persons other than the Depositary for such Global Security or a
nominee thereof;
(18) any addition to or change in the Events of Default which applies
to any Securities of the series and any change in the right of the Trustee
or the requisite Holders of such Securities to declare the principal amount
thereof due and payable pursuant to Section 502;
(19) any addition to or change in the covenants set forth in
Article Ten which applies to Securities of the series;
(20) if applicable, that the subordination provisions in
Article Fourteen shall apply to the Securities of the series or that any
different subordination provisions, including different definitions of the
terms "Senior Indebtedness" or "Existing Subordinated Indebtedness", shall
apply to Securities of the series; and
(21) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture, except as permitted by
Section 901(5)).
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All Securities of any one series shall be substantially identical
except as to denomination and except as may otherwise be provided in or pursuant
to the Board Resolution referred to above and (subject to Section 303) set
forth, or determined in the manner provided in the Officers' Certificate
referred to above or in any such indenture supplemental hereto. All Securities
of any one series need not be issued at one time and, unless otherwise provided,
a series may be reopened for issuances of additional Securities of such series.
Unless otherwise provided with respect to the Securities of any
series, at the option of the Company, interest on the Securities of any series
that bears interest may be paid by mailing a check to the address of the person
entitled thereto as such address shall appear in the Security Register.
If any of the terms of the series are established by action taken
pursuant to a Board Resolution, a copy of an appropriate record of such action
shall be certified by the Secretary or an Assistant Secretary of the Company and
delivered to the Trustee at or prior to the delivery of the Officers'
Certificate setting forth the terms of the series.
Section 302. DENOMINATIONS.
The Securities of each series shall be issuable only in registered
form without coupons and only in such denominations as shall be specified as
contemplated by Section 301. In the absence of any such specified denomination
with respect to the Securities of any series, the Securities of such series
shall be issuable in denominations of $1,000 and any integral multiple thereof.
Section 303. EXECUTION, AUTHENTICATION, DELIVERY AND DATING.
The Securities shall be executed on behalf of the Company by its
Chairman of the Board, its Vice Chairman of the Board, its President or one of
its Vice Presidents, under its corporate seal reproduced thereon attested by its
Secretary or one of its Assistant Secretaries. The signature of any of these
officers on the Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.
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At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities of any series executed by the
Company to the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Securities, and the Trustee in accordance
with the Company Order shall authenticate and deliver such Securities. If the
form or terms of the Securities of the series have been established by or
pursuant to one or more Board Resolutions as permitted by Sections 201 and 301,
in authenticating such Securities, and accepting the additional responsibilities
under this Indenture in relation to such Securities, the Trustee shall be
entitled to receive, and (subject to Section 601) shall be fully protected in
relying upon, an Opinion of Counsel stating,
(1) if the form of such Securities has been established by or
pursuant to Board Resolution as permitted by Section 201, that such form
has been established in conformity with the provisions of this Indenture;
(2) if the terms of such Securities have been established by or
pursuant to Board Resolution as permitted by Section 301, that such terms
have been established in conformity with the provisions of this Indenture;
and
(3) that such Securities, when authenticated and delivered by the
Trustee and issued by the Company in the manner and subject to any
conditions specified in such Opinion of Counsel, will constitute valid and
legally binding obligations of the Company enforceable in accordance with
their terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity principles
[and, if applicable, to provisions of law which may require that a judgment
for money damages rendered by a court in the United States be expressed in
United States dollars].
If such form or terms have been so established, the Trustee shall not be
required to authenticate such Securities if the issue of such Securities
pursuant to this Indenture will affect the Trustee's own rights, duties or
immunities under the Securities and this Indenture or otherwise in a manner
which is not reasonably acceptable to the Trustee.
Notwithstanding the provisions of Section 301 and of the preceding
paragraph, if all Securities of a series are not to be originally issued at one
time, it shall not be necessary to deliver the Officers' Certificate otherwise
required
-28-
pursuant to Section 301 or the Company Order and Opinion of Counsel otherwise
required pursuant to such preceding paragraph at or prior to the authentication
of each Security of such series if such documents are delivered at or prior to
the authentication upon original issuance of the first Security of such series
to be issued.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or
be valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein,
executed by the Trustee by manual signature, and such certificate upon any
Security shall be conclusive evidence, and the only evidence, that such Security
has been duly authenticated and delivered hereunder. Notwithstanding the
foregoing, if any Security shall have been authenticated and delivered hereunder
but never issued and sold by the Company, and the Company shall deliver such
Security to the Trustee for cancellation as provided in Section 309, for all
purposes of this Indenture such Security shall be deemed never to have been
authenticated and delivered hereunder and shall never be entitled to the
benefits of this Indenture.
Section 304. TEMPORARY SECURITIES.
Pending the preparation of definitive Securities of any series, the
Company may execute, and upon Company Order the Trustee shall authenticate and
deliver, temporary Securities which are printed, lithographed, typewritten,
mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Securities in lieu of which they
are issued and with such appropriate insertions, omissions, substitutions and
other variations as the officers executing such Securities may determine, as
evidenced by their execution of such Securities.
If temporary Securities of any series are issued, the Company will
cause definitive Securities of that series to be prepared without unreasonable
delay. After the preparation of definitive Securities of such series, the
temporary Securities of such series shall be exchangeable for definitive
Securities of such series upon surrender of the temporary Securities of such
series at the office or agency of the Company in a Place of Payment for that
series, without charge to the Holder. Upon surrender for cancellation of any
one or more temporary Securities of any series, the Company shall execute and
the Trustee shall authenticate and deliver in exchange therefor one or more
definitive Securities of the same series, of any authorized denominations and of
like tenor and aggregate
-29-
principal amount. Until so exchanged, the temporary Securities of any series
shall in all respects be entitled to the same benefits under this Indenture as
definitive Securities of such series and tenor.
Section 305. REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE.
The Company shall cause to be kept at the Corporate Trust Office of
the Trustee a register (the register maintained in such office and in any other
office or agency of the Company in a Place of Payment being herein sometimes
collectively referred to as the "Security Register") in which, subject to such
reasonable regulations as it may prescribe, the Company shall provide for the
registration of Securities and of transfers of Securities. The Trustee is
hereby appointed "Security Registrar" for the purpose of registering Securities
and transfers of Securities as herein provided.
Upon surrender for registration of transfer of any Security of a
series at the office or agency of the Company in a Place of Payment for that
series, the Company shall execute, and the Trustee shall authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Securities of the same series, of any authorized denominations and of like
tenor and aggregate principal amount.
At the option of the Holder, Securities of any series may be exchanged
for other Securities of the same series, of any authorized denominations and of
like tenor and aggregate principal amount, upon surrender of the Securities to
be exchanged at such office or agency. Whenever any Securities are so
surrendered for exchange, the Company shall execute, and the Trustee shall
authenticate and deliver, the Securities which the Holder making the exchange is
entitled to receive.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of transfer
or for exchange shall (if so required by the Company or the Trustee) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed, by the
Holder thereof or his attorney duly authorized in writing.
-30-
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Securities, other than
exchanges pursuant to Section 304, 906 or 1107 not involving any transfer.
If the Securities of any series (or of any series and specified tenor)
are to be redeemed in part, the Company shall not be required (A) to issue,
register the transfer of or exchange any Securities of that series (or of that
series and specified tenor, as the case may be) during a period beginning at the
opening of business 15 days before the day of the mailing of a notice of
redemption of any such Securities selected for redemption under Section 1103 and
ending at the close of business on the day of such mailing, or (B) to register
the transfer of or exchange any Security so selected for redemption in whole or
in part, except the unredeemed portion of any Security being redeemed in part.
The provisions of Clauses (1), (2), (3), (4) and (5) below shall apply
only to Global Securities:
(1) Each Global Security authenticated under this Indenture shall be
registered in the name of the Depositary designated for such Global
Security or a nominee thereof and delivered to such Depositary or a nominee
thereof or custodian therefor, and each such Global Security shall
constitute a single Security for all purposes of this Indenture.
(2) Notwithstanding any other provision in this Indenture, no Global
Security may be exchanged in whole or in part for Securities registered,
and no transfer of a Global Security in whole or in part may be registered,
in the name of any Person other than the Depositary for such Global
Security or a nominee thereof unless (A) such Depositary (i) has notified
the Company that it is unwilling or unable to continue as Depositary for
such Global Security or (ii) has ceased to be a clearing agency registered
under the Exchange Act, (B) there shall have occurred and be continuing an
Event of Default with respect to such Global Security or (C) there shall
exist such circumstances, if any, in addition to or in lieu of the
foregoing as have been specified for this purpose as contemplated by
Section 301.
(3) Subject to the provisions of Clause (2) above, the rights of
holders of such Global Securities shall be exercised only through the
Depositary and shall be limited to those established by law and agreements
between such
-31-
holders and the Depositary and or the Depositary participants. The initial
Depositary will make book-entry transfers among the Depositary participants
and receive and transmit distributions of principal and interest on the
Global Securities to such Depositary participants.
The Depositary may be treated by the Company and the Trustee, and any
of their respective agents, employees, officers and directors, as the
absolute owner of the Global Securities for all purposes whatsoever.
Notwithstanding the foregoing, nothing in this Indenture shall prevent the
Company and the Trustee, or any of their respective agents, from giving
effect to any written certification, proxy or other authorization furnished
by the Depositary, or shall impair the operation of customary practices
governing the exercise of the rights of a holder of any Global Security.
Subject to the foregoing provisions of this Section, any holder may grant
proxies and otherwise authorize any person to take any action which a
holder is entitled to take under this Indenture or the Global Securities.
(4) Subject to Clause (2) above, any exchange of a Global Security
for other Securities may be made in whole or in part, and all Securities
issued in exchange for a Global Security or any portion thereof shall be
registered in such names as the Depositary for such Global Security shall
direct.
(5) Every Security authenticated and delivered upon registration of
transfer of, or in exchange for or in lieu of, a Global Security or any
portion thereof, whether pursuant to this Section, Section 304, 306, 906
or 1107 or otherwise, shall be authenticated and delivered in the form of,
and shall be, a Global Security, unless such Security is registered in the
name of a Person other than the Depositary for such Global Security or a
nominee thereof.
Section 306. MUTILATED, DESTROYED, LOST OR STOLEN SECURITIES.
If any mutilated Security is surrendered to the Trustee, the Company
shall execute and the Trustee shall authenticate and deliver in exchange
therefor a new Security of the same series and of like tenor and principal
amount and bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and the
Trustee (i) evidence to their satisfaction of the destruction, loss or theft of
any Security and (ii) such security or indemnity as may be required by them to
save each of them and
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any agent of either of them harmless, then, in the absence of notice to the
Company or the Trustee that such Security has been acquired by a bona fide
purchaser, the Company shall execute and the Trustee shall authenticate and
deliver, in lieu of any such destroyed, lost or stolen Security, a new Security
of the same series and of like tenor and principal amount and bearing a number
not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security of any series issued pursuant to this Section in
lieu of any destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, whether or not the destroyed,
lost or stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities of that series duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities.
Section 307. PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED.
Except as otherwise provided as contemplated by Section 301 with
respect to any series of Securities, interest on any Security which is payable,
and is punctually paid or duly provided for, on any Interest Payment Date shall
be paid to the Person in whose name that Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest.
Any interest on any Security of any series which is payable, but is
not punctually paid or duly provided for, on any Interest Payment Date (herein
called "Defaulted Interest") shall forthwith cease to be payable to the Holder
on the relevant Regular Record Date by virtue of having been such Holder, and
such Defaulted Interest may be paid by the Company, at its election in each
case, as provided in Clause (1) or (2) below:
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(1) The Company may elect to make payment of any Defaulted Interest
to the Persons in whose name the Securities of such series (or their
respective Predecessor Securities) are registered at the close of business
on a Special Record Date for the payment of such Defaulted Interest, which
shall be fixed in the following manner. The Company shall notify the
Trustee in writing of the amount of Defaulted Interest proposed to be paid
on each Security of such series and the date of the proposed payment, and
at the same time the Company shall deposit with the Trustee an amount of
money equal to the aggregate amount proposed to be paid in respect of such
Defaulted Interest or shall make arrangements satisfactory to the Trustee
for such deposit prior to the date of the proposed payment, such money when
deposited to be held in trust for the benefit of the Persons entitled to
such Defaulted Interest as in this Clause provided. Thereupon the Trustee
shall fix a Special Record Date for the payment of such Defaulted Interest
which shall be not more than 15 days and not less than 10 days prior to the
date of the proposed payment and not less than 10 days after the receipt by
the Trustee of any notice of the proposed payment. The Trustee shall
promptly notify the Company of such Special Record Date and, in the name
and at the expense of the Company, shall cause notice of the proposed
payment of such Defaulted Interest and the Special Record Date therefor to
be mailed, first-class postage prepaid, to each Holder of Securities of
such series, not less than 10 days prior to such Special Record Date.
Notice of the proposed payment of such Defaulted Interest and the Special
Record Date therefor having been so mailed, such Defaulted Interest shall
be paid to the Persons in whose names the Securities of such series (or
their respective Predecessor Securities) are registered at the close of
business on such Special Record Date and shall no longer be payable
pursuant to the following Clause (2).
(2) The Company may make payment of any Defaulted Interest on the
Securities of any series in any other lawful manner not inconsistent with
the requirements of any securities exchange on which such Securities may be
listed, and upon such notice as may be required by such exchange, if, after
notice given by the Company to the Trustee of the proposed payment pursuant
to this Clause, such manner of payment shall be deemed practicable by the
Trustee.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other
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Security shall carry the rights to interest accrued and unpaid, and to accrue,
which were carried by such other Security.
Section 308. PERSONS DEEMED OWNERS.
Prior to due presentment of a Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name such Security is registered as the owner of such
Security for the purpose of receiving payment of principal of and any premium
and (subject to Section 307) any interest on such Security and for all other
purposes whatsoever, whether or not such Security be overdue, and neither the
Company, the Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary.
Section 309. CANCELLATION.
All Securities surrendered for payment, redemption, registration of
transfer or exchange or for credit against any sinking fund payment shall, if
surrendered to any Person other than the Trustee, be delivered to the Trustee
and shall be promptly cancelled by it. The Company may at any time deliver to
the Trustee for cancellation any Securities previously authenticated and
delivered hereunder which the Company may have acquired in any manner
whatsoever, and may deliver to the Trustee (or to any other Person for delivery
to the Trustee) for cancellation any Securities previously authenticated
hereunder which the Company has not issued and sold, and all Securities so
delivered shall be promptly cancelled by the Trustee. No Securities shall be
authenticated in lieu of or in exchange for any Securities cancelled as provided
in this Section, except as expressly permitted by this Indenture. All cancelled
Securities held by the Trustee shall be disposed of as directed by a Company
Order.
Section 310. COMPUTATION OF INTEREST.
Except as otherwise specified as contemplated by Section 301 for
Securities of any series, interest on the Securities of each series shall be
computed on the basis of a 360-day year of twelve 30-day months.
ARTICLE FOUR
SATISFACTION AND DISCHARGE
Section 401. SATISFACTION AND DISCHARGE OF INDENTURE.
This Indenture shall upon Company Request cease to be of further effect
(except as to any surviving rights of registration of transfer or exchange of
Securities herein expressly provided for), and the Trustee, at the expense of
the
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Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when
(1) either
(A) all Securities theretofore authenticated and delivered (other
than (i) Securities which have been destroyed, lost or stolen and
which have been replaced or paid as provided in Section 306 and
(ii) Securities for whose payment money has theretofore been deposited
in trust or segregated and held in trust by the Company and thereafter
repaid to the Company or discharged from such trust, as provided in
Section 1003) have been delivered to the Trustee for cancellation; or
(B) all such Securities not theretofore delivered to the Trustee
for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity
within one year, or
(iii) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice of
redemption by the Trustee in the name, and at the expense, of the
Company,
and the Company, in the case of (i) (ii) or (iii) above, has deposited or caused
to be deposited with the Trustee as trust funds in trust for the purpose money
(either in United States dollars or such other currency or currency units in
which the securities of any series may be payable) in an amount sufficient to
pay and discharge the entire indebtedness on such Securities not theretofore
delivered to the Trustee for cancellation, for principal and any premium and
interest to the date of such deposit (in the case of Securities which have
become due and payable) or to the Stated Maturity or Redemption Date, as the
case may be;
(2) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent
herein provided for relating to the satisfaction and discharge of this
Indenture have been complied with.
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Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 607, the obligations of
the Trustee to any Authenticating Agent under Section 614 and, if money shall
have been deposited with the Trustee pursuant to subclause (B) of Clause (1) of
this Section, the obligations of the Trustee under Section 402 and the last
paragraph of Section 1003 shall survive.
Section 402. APPLICATION OF TRUST MONEY.
Subject to the provisions of the last paragraph of Section 1003, all
money deposited with the Trustee pursuant to Section 401 shall be held in trust
and applied by it, in accordance with the provisions of the Securities and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal and any premium and
interest for whose payment such money has been deposited with the Trustee.
ARTICLE FIVE
REMEDIES
Section 501. EVENTS OF DEFAULT.
"Event of Default", wherever used herein with respect to Securities of
any series, means any of the following events (whatever the reason for such
Event of Default and whether it shall be occasioned by the provisions of Article
Fourteen or be voluntary or involuntary or be effected by operation of law or
pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body):
(1) default in the payment of any interest upon any Security of that
series when it becomes due and payable, and continuance of such default for
a period of 30 days; or
(2) default in the payment of the principal of or any premium on any
Security of that series when due, whether at its Maturity, upon
acceleration or otherwise; or
(3) default in the deposit of any sinking fund payment, when and as
due by the terms of a Security of that series; or
(4) default in the performance, or breach, of any covenant, agreement
or warranty of the Company for the
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benefit of the Holders of the Security in this Indenture (other than a
covenant, agreement or warranty a default in whose performance or whose
breach is elsewhere in this Section specifically dealt with or which has
expressly been included in this Indenture solely for the benefit of series
of Securities other than that series), and continuance of such default or
breach for a period of 90 days after there has been given, by registered or
certified mail, to the Company by the Trustee or to the Company and the
Trustee by the Holders of at least 10% in principal amount of the
Outstanding Securities of that series a written notice specifying such
default or breach and requiring it to be remedied and stating that such
notice is a "Notice of Default" hereunder; or
(5) the entry by a court having jurisdiction in the premises of (A) a
decree or order for relief in respect of the Company in an involuntary case
or proceeding under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or (B) a decree or order adjudging the
Company a bankrupt or insolvent, or approving as properly filed a petition
seeking reorganization, arrangement, adjustment or composition of or in
respect of the Company under any applicable Federal or State law, or
appointing a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Company or of any substantial
part of its property, or ordering the winding up or liquidation of its
affairs, and the continuance of any such decree or order for relief or any
such other decree or order unstayed and in effect for a period of
60 consecutive days; or
(6) the commencement by the Company of a voluntary case or proceeding
under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or of any other case or proceeding to
be adjudicated a bankrupt or insolvent, or the consent by it to the entry
of a decree or order for relief in respect of the Company in an involuntary
case or proceeding under any applicable Federal or State bankruptcy,
insolvency, reorganization or other similar law or to the commencement of
any bankruptcy or insolvency case or proceeding against it, or the filing
by it of a petition or answer or consent seeking reorganization or relief
under any applicable Federal or State law, or the consent by it to the
filing of such petition or to the appointment of or taking possession by a
custodian, receiver, liquidator, assignee, trustee, sequestrator or other
similar official of the Company or of any substantial part of its property,
or the making by it of an assignment for the benefit of creditors, or the
admission by it in writing of its inability to pay its
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debts generally as they become due, or the taking of corporate action by
the Company in furtherance of any such action; or
(7) any other Event of Default provided with respect to Securities of
that series.
Section 502. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.
If an Event of Default (other than an Event of Default specified in
Section 501(5) or 501(6)) with respect to Securities of any series at the time
Outstanding occurs and is continuing, then in every such case the Trustee or the
Holders of not less than 25% in principal amount of the Outstanding Securities
of that series may declare the principal amount of all the Securities of that
series (or, if any Securities of that series are Original Issue Discount
Securities, such portion of the principal amount of such Securities as may be
specified by the terms thereof) to be due and payable immediately, by a notice
in writing to the Company (and to the Trustee if given by Holders), and upon any
such declaration such principal amount (or specified amount) shall become
immediately due and payable. If an Event of Default specified in Section 501(5)
or 501(6) with respect to Securities of any series at the time Outstanding
occurs, the principal amount of all the Securities of that series (or, if any
Securities of that series are Original Issue Discount Securities, such portion
of the principal amount of such Securities as may be specified by the terms
thereof) shall automatically, and without any declaration or other action on the
part of the Trustee or any Holder, become immediately due and payable.
At any time after such a declaration of acceleration with respect to
Securities of any series has been made and before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in this
Article provided, the Holders of a majority in principal amount of the
Outstanding Securities of that series, by written notice to the Company and the
Trustee, may rescind and annul such declaration and its consequences if:
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay;
(A) all overdue interest on all Securities of that series,
(B) the principal of (and premium, if any, on) any Securities of
that series which have become due otherwise than by such declaration of
acceleration
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and any interest thereon at the rate or rates prescribed therefor in such
Securities,
(C) to the extent that payment of such interest is lawful,
interest upon overdue interest at the rate or rates prescribed therefor in
such Securities, and
(D) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel; and
(2) all Events of Default with respect to Securities of that series,
other than the non-payment of the principal of Securities of that series
which have become due solely by such declaration of acceleration, have been
cured or waived as provided in Section 513.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
Section 503. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY TRUSTEE.
The Company covenants that if:
(1) default is made in the payment of any interest on any Security
when such interest becomes due and payable and such default continues for a
period of 30 days; or
(2) default is made in the payment of the principal of (or premium,
if any, on) any Security whether at the Maturity or upon acceleration or
otherwise thereof;
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities, the whole amount then due and payable on such
Securities for principal and any premium and interest and, to the extent that
payment of such interest shall be legally enforceable, interest on any overdue
principal and premium and on any overdue interest, at the rate or rates
prescribed therefor in such Securities, and, in addition thereto, such further
amount as shall be sufficient to cover the costs and expenses of collection,
including the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel.
If an Event of Default with respect to Securities of any series occurs
and is continuing, the Trustee may in its discretion proceed to protect and
enforce its rights and the rights of the Holders of Securities of such series by
such appropriate judicial proceedings as the Trustee shall deem most effectual
to protect and enforce any such rights, whether for
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the specific enforcement of any covenant or agreement in this Indenture or in
aid of the exercise of any power granted herein, or to enforce any other proper
remedy.
Section 504. TRUSTEE MAY FILE PROOFS OF CLAIM.
In case of any judicial proceeding relative to the Company (or any
other obligor upon the Securities), its property or its creditors, the Trustee
shall be entitled and empowered, by intervention in such proceeding or
otherwise, to take any and all actions authorized under the Trust Indenture Act
in order to have claims of the Holders and the Trustee allowed in any such
proceeding. In particular, the Trustee shall be authorized to collect and
receive any moneys or other property payable or deliverable on any such claims
and to distribute the same; and any custodian, receiver, assignee, trustee,
liquidator, sequestrator or other similar official in any such judicial
proceeding is hereby authorized by each Holder to make such payments to the
Trustee and, in the event that the Trustee shall consent to the making of such
payments directly to the Holders, to pay to the Trustee any amount due it for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 607.
No provision of this Indenture shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any Holder
any plan of reorganization, arrangement, adjustment or composition affecting the
Securities or the rights of any Holder thereof or to authorize the Trustee to
vote in respect of the claim of any Holder in any such proceeding; provided,
however, that the Trustee may, on behalf of the Holders, vote for the election
of a trustee in bankruptcy or similar official and be a member of a creditors'
or other similar committee.
Section 505. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF SECURITIES.
All rights of action and claims under this Indenture or the Securities
may be prosecuted and enforced by the Trustee without the possession of any of
the Securities or the production thereof in any proceeding relating thereto, and
any such proceeding instituted by the Trustee shall be brought in its own name
as trustee of an express trust, and any recovery of judgment shall, after
provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Securities in respect of which such
judgment has been recovered.
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Section 506. APPLICATION OF MONEY COLLECTED.
Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal or any premium
or interest, upon presentation of the Securities and the notation thereon of the
payment if only partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under
Section 607; and
SECOND: Subject to Article Fourteen, to the payment of the amounts
then due and unpaid for principal of and any premium and interest on the
Securities in respect of which or for the benefit of which such money has
been collected, ratably, without preference or priority of any kind,
according to the amounts due and payable on such Securities for principal
and any premium and interest, respectively.
THIRD: To the Company or any other Person or Persons entitled
thereto.
Section 507. LIMITATION ON SUITS.
No Holder of any Security of any series shall have any right to
institute any proceeding, judicial or otherwise, with respect to this Indenture,
or for the appointment of a receiver or trustee, or for any other remedy
hereunder, unless:
(1) such Holder has previously given written notice to the Trustee of
a continuing Event of Default with respect to the Securities of that
series;
(2) the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series shall have made written request to
the Trustee to institute proceedings in respect of such Event of Default in
its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and
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(5) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of a majority
in principal amount of the Outstanding Securities of that series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all of such
Holders.
Section 508. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL, PREMIUM AND
INTEREST AND TO CONVERT.
Notwithstanding any other provision in this Indenture, the Holder of
any Security shall have the right, which is absolute and unconditional, to
receive payment of the principal of and any premium and (subject to Section 307)
interest on such Security on the respective Stated Maturities expressed in such
Security (or, in the case of redemption, on the Redemption Date) and to convert
such Security in accordance with the provisions in the form of Security of any
particular series pursuant to Section 301(9) and to institute suit for the
enforcement of any such payment and right to convert, and such rights shall not
be impaired without the consent of such Holder.
Section 509. RESTORATION OF RIGHTS AND REMEDIES.
If the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders shall
be restored severally and respectively to their former positions hereunder and
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding had been instituted.
Section 510. RIGHTS AND REMEDIES CUMULATIVE.
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities in the last paragraph
of Section 306, no right or remedy herein conferred upon or reserved to the
Trustee or to the Holders is intended to be exclusive of any other right or
remedy, and every right and remedy shall, to the extent
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permitted by law, be cumulative and in addition to every other right and remedy
given hereunder or now or hereafter existing at law or in equity or otherwise.
The assertion or employment of any right or remedy hereunder, or otherwise,
shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.
Section 511. DELAY OR OMISSION NOT WAIVER.
No delay or omission of the Trustee or of any Holder of any Securities
to exercise any right or remedy accruing upon any Event of Default shall impair
any such right or remedy or constitute a waiver of any such Event of Default or
an acquiescence therein. Every right and remedy given by this Article or by law
to the Trustee or to the Holders may be exercised from time to time, and as
often as may be deemed expedient, by the Trustee or by the Holders, as the case
may be.
Section 512. CONTROL BY HOLDERS.
The Holders of a majority in principal amount of the Outstanding
Securities of any series shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee, with respect to the
Securities of such series, provided that:
(1) such direction shall not be in conflict with any rule of law or
with this Indenture; and
(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
Section 513. WAIVER OF PAST DEFAULTS.
The Holders of not less than a majority in principal amount of the
Outstanding Securities of any series may on behalf of the Holders of all the
Securities of such series waive any past default hereunder with respect to such
series and its consequences, except a default:
(1) in the payment of the principal of or any premium or interest on
any Security of such series, or
(2) in respect of a covenant or provision hereof which under Article
Nine cannot be modified or amended without the consent of the Holder of
each Outstanding Security of such series affected.
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Upon any such waiver, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or impair any right consequent thereon.
Section 514. UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under this
Indenture, or in any suit against the Trustee for any action taken, suffered or
omitted by it as Trustee, a court may require any party litigant in such suit to
file an undertaking to pay the costs of such suit, and may assess costs against
any such party litigant, in the manner and to the extent provided in the Trust
Indenture Act; provided that neither this Section nor the Trust Indenture Act
shall be deemed to authorize any court to require such an undertaking or to make
such an assessment in any suit instituted by the Company.
Section 515. WAIVER OF USURY, STAY OR EXTENSION LAWS.
The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, or plead, or in any manner whatsoever claim
or take the benefit or advantage of, any usury, stay or extension law wherever
enacted, now or at any time hereafter in force, which may affect the covenants
or the performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
ARTICLE SIX
THE TRUSTEE
Section 601. CERTAIN DUTIES AND RESPONSIBILITIES.
The Trustee, prior to the occurrence of an Event of Default and after
the curing or waiving of all Events of Default which may have occurred,
undertakes to perform such duties and only such duties as are specifically set
forth in this Indenture. In case an Event of Default to the actual knowledge of
a Responsible Officer of the Trustee has occurred, has not been waived and is
continuing, the Trustee shall exercise such of the rights and powers vested in
it by this Indenture, and use the same degree of care and skill in their
exercise, as a prudent man would exercise or use under the circumstances in the
conduct of his own affairs.
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No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent actions, its own negligent failure
to act or its own willful misconduct, except that:
(a) prior to the occurrence of an Event of Default and after the
curing or waiving of all such Events of Default which may have occurred;
(i) the duties and obligations of the Trustee shall be
determined solely by the express provisions of this Indenture, and the
Trustee shall not be liable except for the performance of such duties
and obligations as are specifically set forth in this Indenture, and
no implied covenants or obligations shall be read into this Indenture
against the Trustee; and
(ii) in the absence of bad faith on the part of the Trustee, the
Trustee may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon any
statements, certificates or opinions furnished to the Trustee and
conforming to the requirements of this Indenture; but in the case of
any such statements, certificates or opinions which by any provision
hereof are specifically required to be furnished to the Trustee, the
Trustee shall be under a duty to examine the same to determine whether
or not they conform to the requirements of this Indenture;
(b) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer or Responsible Officers of the
Trustee, unless it shall be proved that the Trustee was negligent in
ascertaining the pertinent facts; and
(c) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the
direction of the Holders of not less than a majority in principal amount of
the Securities at the time outstanding relating to the time, method and
place of conducting a proceeding for any remedy available to the Trustee,
or exercising any trust or power conferred upon the Trustee, under this
Indenture.
None of the provisions contained in this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the exercise of any of
its rights or powers, if there shall be reasonable ground for believing that
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the repayment of such funds or adequate indemnity against such liability is not
reasonably assured to it.
This Section is in furtherance of and subject to Sections 315 and 316
of the Trust Indenture Act.
Section 602. NOTICE OF DEFAULTS.
If a default occurs hereunder with respect to Securities of any
series, the Trustee shall give the Holders of Securities of such series notice
of such default as and to the extent provided by the Trust Indenture Act;
provided, however, that in the case of any default of the character specified in
Section 501(4) with respect to Securities of such series, no such notice to
Holders shall be given until at least 30 days after the occurrence thereof. For
the purpose of this Section, the term "default" means any event which is, or
after notice or lapse of time or both would become, an Event of Default with
respect to Securities of such series.
Section 603. CERTAIN RIGHTS OF TRUSTEE.
Subject to the provisions of Section 601:
(1) the Trustee may conclusively rely and shall be fully protected in
acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness or
other paper or document believed by it to be genuine and to have been
signed or presented by the proper party or parties;
(2) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order, and any
resolution of the Board of Directors shall be sufficiently evidenced by a
Board Resolution;
(3) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless
other evidence be herein specifically prescribed) may, in the absence of
bad faith on its part, rely upon an Officers' Certificate;
(4) the Trustee may consult with counsel and the written advice of
such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon;
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(5) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction
of any of the Holders pursuant to this Indenture, unless such Holders shall
have offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities which might be incurred by it in compliance
with such request or direction;
(6) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent order,
bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Trustee, in its discretion may make such further inquiry
or investigation into such facts or matters as it may see fit, and, if the
Trustee shall determine to make such further inquiry or investigation, it
shall be entitled to examine the books, records and premises of the
Company, personally or by agent or attorney at the sole cost and expense of
the Company;
(7) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of, or for the supervision of, any agent or attorney
appointed with due care by it hereunder;
(8) in the event the Trustee is also acting as Paying Agent,
Authenticating Agent or Security Registrar hereunder, the rights and
protections afforded to the Trustee pursuant to this Indenture shall also
be afforded to such Paying Agent, Authenticating Agent or Registrar;
(9) the Trustee shall not be charged with knowledge of an Event of
Default unless a Responsible Officer of the Trustee obtains actual
knowledge of such event or the Trustee receives written notice of such
event from the Company or from Holders of Securities of any series so
affected evidencing no less than 51 % of the aggregate outstanding
principal amount of Securities of such series; and
(10) when the Trustee incurs expenses or renders services in
connection with an Event of Default specified in Section 501(5) or
Section 501(6), such expenses (including the fees and expenses of its
counsel) and the compensation for such services are intended to constitute
expenses of administration under any bankruptcy or insolvency law.
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Section 604. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES.
The recitals contained herein and in the Securities, except the
Trustee's certificates of authentication, shall be taken as the statements of
the Company, and neither the Trustee nor any Authenticating Agent assumes any
responsibility for their correctness. The Trustee makes no representations as
to the validity or sufficiency of this Indenture or of the Securities. Neither
the Trustee nor any Authenticating Agent shall be accountable for the use or
application by the Company of Securities or the proceeds thereof.
Section 605. MAY HOLD SECURITIES.
The Trustee, any Authenticating Agent, any Paying Agent, any Security
Registrar or any other agent of the Company, in its individual or any other
capacity, may become the owner or pledgee of Securities and, subject to
Sections 608 and 613, may otherwise deal with the Company with the same rights
it would have if it were not Trustee, Authenticating Agent, Paying Agent,
Security Registrar or such other agent.
Section 606. MONEY HELD IN TRUST.
Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it hereunder except as
otherwise agreed with the Company.
Section 607. COMPENSATION AND REIMBURSEMENT.
The Company agrees:
(1) to pay to the Trustee from time to time reasonable compensation
for all services rendered by it hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee
of an express trust);
(2) except as otherwise expressly provided herein, to reimburse the
Trustee upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with any provision
of this Indenture (including the reasonable compensation and the expenses
and disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence or bad
faith; and
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(3) to indemnify the Trustee and its officers, directors, agents, and
employees for, and to hold it and its officers, directors, agents, and
employees harmless against, any loss, liability or expense incurred without
negligence or bad faith on its part, arising out of or in connection with
the acceptance or administration of the trust or trusts hereunder,
including the costs and expenses of defending itself against any claim or
liability in connection with the exercise or performance of any of its
powers or duties hereunder.
As security for the performance of the obligations of the Company
under this Section, the Trustee shall have a lien prior to the Securities upon
all property and funds held or collected by the Trustee as such, except funds
held in trust for the benefit of the Holders of particular Securities.
Section 608. CONFLICTING INTERESTS.
If the Trustee has or shall acquire a conflicting interest within the
meaning of the Trust Indenture Act, the Trustee shall either eliminate such
interest or resign, to the extent and in the manner provided by, and subject to
the provisions of, the Trust Indenture Act and this Indenture. To the extent
permitted by such Act, the Trustee shall not be deemed to have a conflicting
interest by virtue of being a trustee under this Indenture with respect to
Securities of more than one series.
Section 609. CORPORATE TRUSTEE REQUIRED; ELIGIBILITY.
There shall at all times be a Trustee hereunder, which may be Trustee
hereunder for Securities of one or more other series. Each Trustee shall be a
Person that is eligible pursuant to the Trust Indenture Act to act as such and
has a combined capital and surplus of at least $50,000,000 and has its Corporate
Trust Office in the City of New York. If any such Person publishes reports of
condition at least annually, pursuant to law or to the requirements of its
supervising or examining authority, then for the purposes of this Section and to
the extent permitted by the Trust Indenture Act, the combined capital and
surplus of such Person shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time
the Trustee with respect to the Securities of any series shall cease to be
eligible in accordance with the provisions of this Section, it shall resign
immediately in the manner and with the effect hereinafter specified in this
Article.
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Section 610. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.
No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 611.
The Trustee may resign at any time with respect to the Securities of
one or more series by giving written notice thereof to the Company. If the
instrument of acceptance by a successor Trustee required by Section 611 shall
not have been delivered to the Trustee within 30 days after the giving of such
notice of resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee with respect to the
Securities of such series.
The Trustee may be removed at any time with respect to the Securities
of any series by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series, delivered to the Trustee and to the
Company.
If at any time:
(1) the Trustee shall fail to comply with Section 608 after written
request therefor by the Company or by any Holder who has been a bona fide
Holder of a Security for at least six months,
(2) the Trustee shall cease to be eligible under Section 609 and
shall fail to resign after written request therefor by the Company or by
any such Holder, or
(3) the Trustee shall become incapable of acting or shall be adjudged
a bankrupt or insolvent or a receiver of the Trustee or of its property
shall be appointed or any public officer shall take charge or control of
the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation;
then, in any such case, (A) the Company by a Board Resolution may remove the
Trustee with respect to all Securities, or (B) subject to Section 514, any
Holder who has been a bona fide Holder of a Security for at least six months
may, on behalf of himself and all others similarly situated, petition any court
of competent jurisdiction for the removal of the Trustee with respect to all
Securities and the appointment of a successor Trustee or Trustees.
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If the Trustee shall resign, be removed or become incapable of acting,
or if a vacancy shall occur in the office of Trustee for any cause, with respect
to the Securities of one or more series, the Company, by a Board Resolution,
shall promptly appoint a successor Trustee or Trustees with respect to the
Securities of that or those series (it being understood that any such successor
Trustee may be appointed with respect to the Securities of one or more or all of
such series and that at any time there shall be only one Trustee with respect to
the Securities of any particular series) and shall comply with the applicable
requirements of Section 611. If, within one year after such resignation,
removal or incapability, or the occurrence of such vacancy, a successor Trustee
with respect to the Securities of any series shall be appointed by act of the
Holders of a majority in principal amount of the Outstanding Securities of such
series delivered to the Company and the retiring Trustee, the successor Trustee
so appointed shall, forthwith upon its acceptance of such appointment in
accordance with the applicable requirements of Section 611, become the successor
Trustee with respect to the Securities of such series and to that extent
supersede the successor Trustee appointed by the Company. If no successor
Trustee with respect to the Securities of any series shall have been so
appointed by the Company or the Holders and accepted appointment in the manner
required by Section 611, any Holder who has been a bona fide Holder of a
Security of such series for at least six months may, on behalf of himself and
all others similarly situated, petition any court of competent jurisdiction for
the appointment of a successor Trustee with respect to the Securities of such
series.
The Company shall give notice of each resignation and each removal of
the Trustee with respect to the Securities of any series and each appointment of
a successor Trustee with respect to the Securities of any series to all Holders
of Securities of such series in the manner provided in Section 106. Each notice
shall include the name of the successor Trustee with respect to the Securities
of such series and the address of its corporate trust office.
Section 611. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
In case of the appointment hereunder of a successor Trustee with
respect to all Securities, every such successor Trustee so appointed shall
execute, acknowledge and deliver to the Company and to the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or removal
of the retiring Trustee shall become effective and such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee; but, on the request
of the Company or the successor Trustee, such retiring Trustee shall, upon
payment of
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its charges, execute and deliver an instrument transferring to such successor
Trustee all the rights, powers and trusts of the retiring Trustee and shall duly
assign, transfer and deliver to such successor Trustee all property and money
held by such retiring Trustee hereunder.
In case of the appointment hereunder of a successor Trustee with
respect to the Securities of one or more (but not all) series, the Company, the
retiring Trustee and each successor Trustee with respect to the Securities of
one or more series shall execute and deliver an indenture supplemental hereto
wherein each successor Trustee shall accept such appointment and which (1) shall
contain such provisions as shall be necessary or desirable to transfer and
confirm to, and to vest in, each successor Trustee all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities of that
or those series to which the appointment of such successor Trustee relates,
(2) if the retiring Trustee is not retiring with respect to all Securities,
shall contain such provisions as shall be deemed necessary or desirable to
confirm that all the rights, powers trusts and duties of the retiring Trustee
with respect to the Securities of that or those series as to which the retiring
Trustee is not retiring shall continue to be vested in the retiring Trustee, and
(3) shall add to or change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, it being understood that nothing herein or
in such supplemental indenture shall constitute such Trustees co-trustees of the
same trust and that each such Trustee shall be trustee of a trust or trusts
hereunder separate and apart from any trust or trusts hereunder administered by
any other such Trustee; and upon the execution and delivery of such supplemental
indenture the resignation or removal of the retiring Trustee shall become
effective to the extent provided therein and each such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee with respect to the
Securities of that or those series to which the appointment of such successor
Trustee relates; but, on request of the Company or any successor Trustee, such
retiring Trustee shall duly assign, transfer and deliver to such successor
Trustee all property and money held by such retiring Trustee hereunder with
respect to the Securities of that or those series to which the appointment of
such successor Trustee relates.
Upon request of any such successor Trustee, the Company shall execute
any and all instruments for more fully and certainly vesting in and confirming
to such successor Trustee all such rights, powers and trusts referred to in the
first or second preceding paragraph, as the case may be.
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No successor Trustee shall accept its appointment unless at the time
of such acceptance such successor Trustee shall be qualified and eligible under
this Article. No trustee hereunder shall be liable for the acts or omissions of
any successor Trustee.
Section 612. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Securities shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Securities so authenticated with the same
effect as if such successor Trustee had itself authenticated such Securities.
Section 613. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
If and when the Trustee shall be or become a creditor of the Company
(or any other obligor upon the Securities), the Trustee shall be subject to the
provisions of the Trust Indenture Act regarding the collection of claims against
the Company (or any such other obligor).
Section 614. APPOINTMENT OF AUTHENTICATING AGENT.
The Trustee may appoint an Authenticating Agent or Agents with respect
to one or more series of Securities which shall be authorized to act on behalf
of the Trustee to authenticate Securities of such series issued upon original
issue and upon exchange, registration of transfer or partial redemption thereof
or pursuant to Section 306, and Securities so authenticated shall be entitled to
the benefits of this Indenture and shall be valid and obligatory for all
purposes as if authenticated by the Trustee hereunder. Wherever reference is
made in this Indenture to the authentication and delivery of Securities by the
Trustee or the Trustee's certificate of authentication, such reference shall be
deemed to include authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on behalf of
the Trustee by an Authenticating Agent.
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Each Authenticating Agent shall be acceptable to the Company and shall at all
times be a corporation organized and doing business under the laws of the
United States of America, any State thereof or the District of Columbia,
authorized under such laws to act as Authenticating Agent, having a combined
capital and surplus of not less than $50,000,000 and subject to supervision or
examination by Federal or State authority. If such Authenticating Agent
publishes reports of condition at least annually, pursuant to law or to the
requirements of said supervising or examining authority, then for the purposes
of this Section, the combined capital and surplus of such Authenticating Agent
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. If at any time an Authenticating Agent
shall cease to be eligible in accordance with the provisions of this Section,
such Authenticating Agent shall resign immediately in the manner and with the
effect specified in this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper or any further
act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written
notice thereof to the Trustee and to the Company. The Trustee may at any time
terminate the agency of an Authenticating Agent by giving written notice thereof
to such Authenticating Agent and to the Company. Upon receiving such a notice
of resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall give notice of such
appointment by first-class mail, postage prepaid, to all Holders of Securities
of the series with respect to which such Authenticating Agent will serve. Any
successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an Authenticating Agent.
No successor Authenticating Agent shall be appointed unless eligible under the
provisions of this Section.
The Trustee agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its
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services under this Section, and the Trustee shall be entitled to be reimbursed
for such payments, in accordance with the provisions of Section 607.
If an appointment with respect to one or more series is made pursuant
to this Section, the Securities of such series may have endorsed thereon, in
addition to the Trustee's certificate of authentication, an alternative
certificate of authentication in the following form:
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
THE CHASE MANHATTAN BANK (NATIONAL
ASSOCIATION), as Trustee
By ___________________________________
As Authenticating Agent
By ___________________________________
Authorized Officer
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 701. COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES OF HOLDERS.
The Company will furnish or cause to be furnished to the Trustee,
(1) semi-annually, not later than . . . . . . and . . . . . . in each
year, a list in such form as the Trustee may reasonably require, of the
names and addresses of the Holders of Securities of each series as of the
preceding . . . . . . or . . . . . . as the case may be; and
(2) at such other times as the Trustee may request in writing, within
30 days after the receipt by the Company of any such request, a list of
similar form and content as of a date not more than 15 days prior to the
time such list is furnished;
excluding from any such list names and addresses received by the Trustee in its
capacity as Security Registrar.
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Section 702. PRESERVATION OF INFORMATION; COMMUNICATIONS TO HOLDERS.
The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 701 and the names and
addresses of Holders received by the Trustee in its capacity as Security
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 701 upon receipt of a new list so furnished.
The rights of Holders to communicate with other Holders with respect
to their rights under this Indenture or under the Securities, and the
corresponding rights and privileges of the Trustee, shall be as provided by the
Trust Indenture Act.
Every Holder of Securities, by receiving and holding the same, agrees
with the Company and the Trustee that neither the Company nor the Trustee nor
any agent of either of them shall be held accountable by reason of any
disclosure of information as to names and addresses of Holders made pursuant to
the Trust Indenture Act.
Section 703. REPORTS BY TRUSTEE.
The Trustee shall transmit to Holder such reports concerning the
Trustee and its actions under this Indenture as may be required pursuant to the
Trust Indenture Act at the times and in the manner provided pursuant thereto.
Reports so required to be transmitted at stated intervals of not more
than 12 months shall be transmitted no later than the ___ day in each calendar
year, commencing in ______________.
A copy of each such report shall, at the time of such transmission to
Holders, be filed by the Trustee with each stock exchange upon which any
Securities are listed, with the Commission and with the Company. The Company
will notify the Trustee when any Securities are listed on any stock exchange.
Section 704. REPORTS BY COMPANY.
The Company shall file with the Trustee and the Commission, and
transmit to Holders, such information, documents and other reports, and such
summaries thereof, as may be required pursuant to the Trust Indenture Act at the
times and in the manner provided pursuant to such Act; provided that any such
information, documents or reports required to be filed with the Commission
pursuant to Section 13 or 15(d) of the
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Exchange Act shall be filed with the Trustee within 15 days after the same is so
required to be filed with the Commission.
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
Section 801. COMPANY MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS.
The Company shall not consolidate with or merge into any other Person
or convey, transfer or lease its properties and assets substantially as an
entirety to any Person, and the Company shall not permit any Person to
consolidate with or merge into the Company or convey, transfer or lease its
properties and assets substantially as an entirety to the Company, unless:
(1) in case the Company shall consolidate with or merge into another
Person or convey, transfer or lease its properties and assets substantially
as an entirety to any Person, the Person formed by such consolidation or
into which the Company is merged or the Person which acquires by conveyance
or transfer, or which leases, the properties and assets of the Company
substantially as an entirety shall be a corporation, partnership or trust,
shall be organized and validly existing under the laws of the United States
of America, any State thereof or the District of Columbia and shall
expressly assume, by an indenture supplemental hereto, executed and
delivered to the Trustee, in form satisfactory to the Trustee, the due and
punctual payment of the principal of and any premium and interest on all
the Securities and the performance or observance of every covenant of this
Indenture on the part of the Company to be performed or observed;
(2) immediately after giving effect to such transaction and treating
any indebtedness which becomes an obligation of the Company or any
Subsidiary as a result of such transaction as having been incurred by the
Company or such Subsidiary at the time of such transaction, no Event of
Default, and no event which, after notice or lapse of time or both, would
become an Event of Default, shall have happened and be continuing; and
(3) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that such consolidation, merger,
conveyance, transfer or lease and, if a supplemental indenture is required
in connection with such transaction, such supplemental indenture comply
with this Article and that
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all conditions precedent herein provided for relating to such transaction
have been complied with.
Section 802. SUCCESSOR SUBSTITUTED.
Upon any consolidation of the Company with, or merger of the Company
into, any other Person or any conveyance, transfer or lease of the properties
and assets of the Company substantially as an entirety in accordance with
Section 801, the successor Person formed by such consolidation or into which the
Company is merged or to which such conveyance, transfer or lease is made shall
succeed to, and be substituted for, and may exercise every right and power of,
the Company under this Indenture with the same effect as if such successor
Person had been named as the Company herein, and thereafter, except in the case
of a lease, the predecessor Person shall be relieved of all obligations and
covenants under this Indenture and the Securities.
ARTICLE NINE
SUPPLEMENTAL INDENTURES
Section 901. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS.
Without the consent of any Holders, the Company, when authorized by a Board
Resolution, and the Trustee, at any time and from time to time, may enter into
one or more indentures supplemental hereto, in form satisfactory to the Trustee,
for any of the following purposes:
(1) to evidence the succession of another Person to the Company and
the assumption by any such successor of the covenants of the Company herein
and in the Securities;
(2) to add to the covenants of the Company for the benefit of the
Holders of all or any series of Securities (and if such covenants are to be
for the benefit of less than all series of Securities, stating that such
covenants are expressly being included solely for the benefit of such
series) or to surrender any right or power herein conferred upon the
Company;
(3) to add any additional Events of Default for the benefit of the
Holders of all or any series of Securities (and if such additional Events
of Default are to be for the benefit of less than all series of Securities,
stating that such additional Events of Default are expressly being included
solely for the benefit of such series);
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(4) to add to or change any of the provisions of this Indenture to
such extent as shall be necessary to permit or facilitate the issuance of
Securities in bearer form, registrable or not registrable as to principal,
and with or without interest coupons, or to permit or facilitate the
issuance of Securities in uncertificated form;
(5) to add to, change or eliminate any of the provisions of this
Indenture in respect to one or more series of Securities, provided that any
such addition, change or elimination (A) shall neither (i) apply to any
Security or series created prior to the execution of such supplemental
indenture and entitled to the benefit of such provision nor (ii) modify the
rights of the Holder of any such Security with respect to such provision or
(B) shall become effective only when there is no such Security Outstanding;
(6) to secure the Securities;
(7) to establish the form or terms of Securities of any series as
permitted by Sections 201 and 301;
(8) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one or
more series and to add to or change any of the provisions of this Indenture
as shall be necessary to provide for or facilitate the administration of
the trusts hereunder by more than one Trustee, pursuant to the requirements
of Section 611;
(9) subject to Section 907, to add to, change or eliminate any of the
provisions of Article Fourteen or change the definition of "Senior
Indebtedness" in respect of one or more series of Securities, including
Outstanding Securities, provided that any such addition, change or
elimination shall not adversely affect the interests of the Holders of
Outstanding Securities of any series in any material respect;
(10) to cure any ambiguity, to correct or supplement any provision
herein which may be defective or inconsistent with any other provision
herein, or to make any other provisions with respect to matters or
questions arising under this Indenture, provided that such action pursuant
to this Clause (10) shall not adversely affect the interests of the Holders
of Securities of any series in any material respect; or
(11) to make provisions with respect to the conversion rights of
Holders, including providing for the
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conversion of the Securities into any security or securities of the
Company.
Section 902. SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS.
With the consent of the Holders of not less than a majority in
principal amount of the Outstanding Securities of each series affected by such
supplemental indenture, by act of said Holders delivered to the Company and the
Trustee, the Company, when authorized by a Board Resolution, and the Trustee may
enter into an indenture or indentures supplemental hereto for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture, or of modifying in any manner the rights of the
Holders of Securities of such series under this Indenture; provided, however,
that no such supplemental indenture shall, without the consent of the Holder of
each Outstanding Security affected thereby:
(1) change the Stated Maturity of the principal of, or any
installment of principal of or interest on, any Security, or reduce the
principal amount thereof or the rate of interest thereon (including any
change in the index, indices or formula pursuant to which such rate is
determined that would reduce such rate for any period) or any premium
payable upon the redemption thereof, or reduce the amount of the principal
of an Original Issue Discount Security or any other Security which would be
due and payable upon a declaration of acceleration of the Maturity thereof
pursuant to Section 502, or change any Place of Payment where, or the coin
or currency in which, any Security or any premium or interest thereon is
payable, or impair the right to institute suit for the enforcement of any
such payment on or after the Stated Maturity thereof (or, in the case of
redemption, on or after the Redemption Date) or modify the provisions of
this Indenture with respect to the subordination of the Securities in a
manner adverse to the Holders, or
(2) reduce the percentage in principal amount of the Outstanding
Securities of any series, the consent of whose Holders is required for any
such supplemental indenture, or the consent of whose Holders is required
for any waiver (of compliance with certain provisions of this Indenture or
certain defaults hereunder and their consequences) provided for in this
Indenture, or
(3) modify any of the provisions of this Section, Section 513 or
Section 1008, except to increase any such percentage or to provide that
certain other provisions of this Indenture cannot be modified or waived
without the consent of the Holder of each Outstanding Security
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affected thereby; provided, however, that this clause shall not be deemed
to require the consent of any Holder with respect to changes in the
references to "the Trustee" and concomitant changes in this Section and
Section 1008, or the deletion of this proviso, in accordance with the
requirements of Sections 611 and 901(8).
A supplemental indenture which changes or eliminates any covenant or other
provision of this Indenture which has expressly been included solely for the
benefit of one or more particular series of Securities, or which modifies the
rights of the Holders of Securities of such series with respect to such covenant
or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
Section 903. EXECUTION OF SUPPLEMENTAL INDENTURES.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 601) shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Trustee may, but shall not be
obligated to, enter into any such supplemental indenture which affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.
Section 904. EFFECT OF SUPPLEMENTAL INDENTURES.
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.
Section 905. CONFORMITY WITH TRUST INDENTURE ACT.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act.
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Section 906. REFERENCE IN SECURITIES TO SUPPLEMENTAL INDENTURES.
Securities of any series authenticated and delivered after the
execution of any supplemental indenture pursuant to this Article may, and shall
if required by the Trustee, bear a notation in form approved by the Trustee as
to any matter provided for in such supplemental indenture. If the Company shall
so determine, new Securities of any series so modified as to conform, in the
opinion of the Trustee and the Company, to any such supplemental indenture may
be prepared and executed by the Company and authenticated and delivered by the
Trustee in exchange for Outstanding Securities of such series.
Section 907. SUBORDINATION UNIMPAIRED.
No provision in any supplemental indenture that affects the superior
position of the holders of Senior Indebtedness shall be effective against
holders of Senior Indebtedness.
ARTICLE TEN
COVENANTS
Section 1001. PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST.
The Company covenants and agrees for the benefit of each series of
Securities that it will duly and punctually pay the principal of and any premium
and interest on the Securities of that series in accordance with the terms of
the Securities and this Indenture.
Section 1002. MAINTENANCE OF OFFICE OR AGENCY.
The Company will maintain in each Place of Payment for any series of
Securities an office or agency where Securities of that series may be presented
or surrendered for payment, where Securities of that series may be surrendered
for registration of transfer or exchange and where notices and demands to or
upon the Company in respect of the Securities of that series and this Indenture
may be served. The Company will give prompt written notice to the Trustee of
the location, and any change in the location, of such office or agency. If at
any time the Company shall fail to maintain any such required office or agency
or shall fail to furnish the Trustee with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee, and the Company hereby appoints the
Trustee as its agent to receive all such presentations, surrenders, notices and
demands.
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The Company may also from time to time designate one or more other
offices or agencies where the Securities of one or more series may be presented
or surrendered for any or all such purposes and may from time to time rescind
such designations; provided, however, that no such designation or rescission
shall in any manner relieve the Company of its obligation to maintain an office
or agency in each Place of Payment for Securities of any series for such
purposes. The Company will give prompt written notice to the Trustee of any
such designation or rescission and of any change in the location of any such
other office or agency.
Section 1003. MONEY FOR SECURITIES PAYMENTS TO BE HELD IN TRUST.
If the Company shall at any time act as its own Paying Agent with
respect to any series of Securities, it will, on or before each due date of the
principal of or any premium or interest on any of the Securities of that series,
segregate and hold in trust for the benefit of the Persons entitled thereto a
sum sufficient to pay the principal and any premium and interest so becoming due
until such sums shall be paid to such Persons or otherwise disposed of as herein
provided and will promptly notify the Trustee of its action or failure so to
act.
Whenever the Company shall have one or more Paying Agent for any
series of Securities, it will, prior to each due date of the principal of or any
premium or interest on any Securities of that series, deposit with a Paying
Agent a sum sufficient to pay such amount, such sum to be held as provided by
the Trust Indenture Act, and (unless such Paying Agent is the Trustee) the
Company will promptly notify the Trustee of its action or failure so to act.
The Company will cause each Paying Agent for any series of Securities
other than the Trustee to execute and deliver to the Trustee an instrument in
which such Paying Agent shall agree with the Trustee, subject to the provisions
of this Section, that such Paying Agent will (1) comply with the provisions of
the Trust Indenture Act applicable to it as a Paying Agent and (2) during the
continuance of any default by the Company (or any other obligor upon the
Securities of that series) in the making of any payment in respect of the
Securities of that series, upon the written request of the Trustee, forthwith
pay to the Trustee all sums held in trust by such Paying Agent for payment in
respect of the Securities of that series.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any
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Paying Agent to pay, to the Trustee all sums held in trust by the Company or
such Paying Agent, such sums to be held by the Trustee upon the same trusts as
those upon which such sums were held by the Company or such Paying Agent; and,
upon such payment by any Paying Agent to the Trustee, such Paying Agent shall be
released from all further liability with respect to such money.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of or any premium or
interest on any Security of any series and remaining unclaimed for two years
after such principal, premium or interest has become due and payable shall be
paid to the Company on Company request, or (if then held by the Company) shall
be discharged from such trust; and the Holder of such Security shall thereafter,
as an unsecured general creditor, look only to the Company for payment thereof,
and all liability of the Trustee or such Paying Agent with respect to such trust
money, and all liability of the Company as trustee thereof, shall thereupon
cease; provided, however, that the Trustee or such Paying Agent, before being
required to make any such repayment, may at the expense of the Company cause to
be published once, in a newspaper published in the English language, customarily
published on each Business Day and of general circulation in the Borough of
Manhattan, The City of New York, notice that such money remains unclaimed and
that, after a date specified therein, which shall not be less than 30 days from
the date of such publication, any unclaimed balance of such money then remaining
will be repaid to the Company.
Section 1004. STATEMENT BY OFFICERS AS TO DEFAULT.
The Company will deliver to the Trustee, within 120 days after the end
of each fiscal year of the Company ending after the date hereof, an Officers'
Certificate stating that a review of the activities of the Company and its
subsidiaries during the preceding fiscal year has been made under the
supervision of such officers with a view to determining whether the Company has
kept, performed, fulfilled and observed its obligations under this Indenture and
stating as to each such officer signing such Officers' Certificate that, to the
best of such officers' knowledge, the Company has kept, observed, performed and
fulfilled each and every covenant contained in this Indenture and is not in
default in the performance and observance of any of the terms, provisions and
conditions of this Indenture (without regard to any period of grace or
requirement of notice provided hereunder) and, if the Company is in default,
specifying all such defaults and the nature and status thereof of which such
officer may have knowledge.
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The Company will, so long as any of the Securities are outstanding,
deliver to the Trustee forthwith upon becoming aware of (i) an Event of Default
or default in the performance of a covenant or agreement or condition contained
in this Indenture or (ii) any default or Event of Default of the type provided
for herein specifying such default or Event of Default, notice of such default
or Event of Default.
Section 1005. EXISTENCE.
Subject to Article Eight, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its existence,
rights (charter and statutory) and franchises and the existence, rights (charter
and statutory) and franchises of its subsidiaries; provided, however, that the
Company shall not be required to preserve any such right or franchise if the
Board of Directors shall determine that the preservation thereof is no longer
desirable in the conduct of the business of the Company and that the loss
thereof is not disadvantageous in any material respect to the Holders.
Section 1006. MAINTENANCE OF PROPERTIES.
The Company will cause all properties used or useful in the conduct of
its business or the business of any Subsidiary to be maintained and kept in good
condition, repair and working order and supplied with all necessary equipment
and will cause to be made all necessary repairs, renewals, replacements,
betterments and improvements thereof, all as in the judgment of the Company may
be necessary so that the business carried on in connection therewith may be
properly and advantageously conducted at all times; provided, however, that
nothing in this Section shall prevent the Company from discontinuing the
operation or maintenance of any of such properties if such discontinuance is, in
the judgement of the Company, desirable in the conduct of its business or the
business of any Subsidiary and not disadvantageous in any material respect to
the Holders.
Section 1007. PAYMENT OF TAXES AND OTHER CLAIMS.
The Company will pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (1) all taxes, assessments and
governmental charges levied or imposed upon the Company or any Subsidiary or
upon the income, profits or property of the Company or any Subsidiary, and
(2) all lawful claims for labor, materials and supplies which, if unpaid, might
by law become a lien upon the property of the Company or any Subsidiary;
provided, however, that the Company shall not be required to pay or discharge or
cause to be paid or discharged any such tax, assessment, charge or claim whose
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amount, applicability or validity is being contested in good faith by
appropriate proceedings.
Section 1008. WAIVER OF CERTAIN COVENANTS.
Except as otherwise specified as contemplated by Section 301 for
Securities of such series, the Company may, with respect to the Securities of
any series, omit in any particular instance to comply with any term, provision
or condition set forth in any covenant provided pursuant to Section 301(19),
901(2) or 901(7) for the benefit of the Holders of such series, if before the
time for such compliance the Holders of at least a majority in principal amount
of the Outstanding Securities of such series shall, by act of such Holders,
either waive such compliance in such instance or generally waive compliance with
such term, provision or condition, but no such waiver shall extend to or affect
such term, provision or condition except to the extent so expressly waived, and,
until such waiver shall become effective, the obligations of the Company and the
duties of the Trustee in respect of any such term, provision or condition shall
remain in full force and effect.
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
Section 1101. APPLICABILITY OF ARTICLE.
Securities of any series which are redeemable before their Stated
Maturity shall be redeemable in accordance with their terms and (except as
otherwise specified as contemplated by Section 301 for such Securities) in
accordance with this Article.
Section 1102. ELECTION TO REDEEM; NOTICE TO TRUSTEE.
The election of the Company to redeem any Securities shall be
evidenced by a Board Resolution or in another manner specified as contemplated
by Section 301 for such Securities. In case of any redemption at the election
of the Company of less than all the Securities of any series (including any such
redemption affecting only a single Security), the Company shall, at
least 60 days prior to the Redemption Date fixed by the Company (unless a
shorter notice shall be satisfactory to the Trustee), notify the Trustee in
writing of such Redemption Date, of the principal amount of Securities of such
series to be redeemed and, if applicable, of the tenor of the Securities to be
redeemed. In the case of any redemption of Securities prior to the expiration
of any restriction on such redemption provided in the terms of such Securities
or elsewhere in this Indenture, the Company shall furnish the Trustee with an
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Officers' Certificate evidencing compliance with such restriction.
Section 1103. SELECTION BY TRUSTEE OF SECURITIES TO BE REDEEMED.
If less than all the Securities of any series are to be redeemed
(unless all the Securities of such series and of a specified tenor are to be
redeemed or unless such redemption affects only a single Security), the
particular Securities to be redeemed shall be selected not more than 60 days
prior to the Redemption Date by the Trustee, from the Outstanding Securities of
such series not previously called for redemption, by such method as the Trustee
shall deem fair and appropriate and which may provide for the selection for
redemption of a portion of the principal amount of any Security of such series,
provided that the unredeemed portion of the principal amount of any Security
shall be in an authorized denomination (which shall not be less than the minimum
authorized denomination) for such Security. If less than all the Securities of
such series and of a specified tenor are to be redeemed (unless such redemption
affects only a single Security), the particular Securities to be redeemed shall
be selected not more than 60 days prior to the Redemption Date by the Trustee,
from the Outstanding Securities of such series and specified tenor not
previously called for redemption in accordance with the preceding sentence.
The Trustee shall promptly notify the Company in writing of the
Securities selected for redemption as aforesaid and, in case of any Securities
selected for partial redemption as aforesaid, the principal amount thereof to be
redeemed.
The provisions of the two preceding paragraphs shall not apply with
respect to any redemption affecting only a single Security, whether such
Security is to be redeemed in whole or in part. In the case of any such
redemption in part, the unredeemed portion of the principal amount of the
Security shall be in an authorized denomination (which shall not be less than
the minimum authorized denomination) for such Security.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall relate,
in the case of any Securities redeemed or to be redeemed only in part, to the
portion of the principal amount of such Securities which has been or is to be
redeemed.
Section 1104. NOTICE OF REDEMPTION.
Notice of redemption shall be given by first-class mail, postage
prepaid, mailed not less than 30 nor more than
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60 days prior to the Redemption Date, to each Holder of Securities to be
redeemed, at his address appearing in the Security Register.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) if less than all the Outstanding Securities of any series
consisting of more than a single Security are to be redeemed, the
identification (and, in the case of partial redemption of any such
Securities, the principal amounts) of the particular Securities to be
redeemed and, if less than all the Outstanding Securities of any series
consisting of a single Security are to be redeemed, the principal amount of
the particular Security to be redeemed,
(4) that on the Redemption Date the Redemption Price will become due
and payable upon each such Security to be redeemed and, if applicable, that
interest thereon will cease to accrue on and after said date,
(5) the place or places where each such Security is to be surrendered
for payment of the Redemption Price, and
(6) that the redemption is for a sinking fund, if such is the case.
Notice of redemption of Securities to be redeemed at the election of
the Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company.
Section 1105. DEPOSIT OF REDEMPTION PRICE.
Prior to any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust as provided in Section 1003) an amount of
money sufficient to pay the Redemption Price of, and (except if the Redemption
Date shall be an Interest Payment Date) accrued interest on, all the Securities
which are to be redeemed on that date.
Section 1106. SECURITIES PAYABLE ON REDEMPTION DATE.
Notice of redemption having been given as aforesaid, the Securities so
to be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein
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specified, and from and after such date (unless the Company shall default in the
payment of the Redemption Price and accrued interest) such Securities shall
cease to bear interest. Upon surrender of any such Security for redemption in
accordance with said notice, such Security shall be paid by the Company at the
Redemption Price, together with accrued interest to the Redemption Date;
provided, however, that, unless otherwise specified as contemplated by
Section 301, installments of interest whose Stated Maturity is on or prior to
the Redemption Date will be payable to the Holders of such Securities, or one or
more Predecessor Securities, registered as such at the close of business on the
relevant Record Dates according to their terms and the provisions of
Section 307.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal and any premium shall, until
paid, bear interest from the Redemption Date at the rate prescribed therefor in
the Security.
Section 1107. SECURITIES REDEEMED IN PART.
Any Security which is to be redeemed only in part shall be surrendered
at a Place of Payment therefor (with, if the Company or the Trustee so requires,
due endorsement by, or a written instrument of transfer in form satisfactory to
the Company and the Trustee duly executed by, the Holder thereof or his attorney
duly authorized in writing), and the Company shall execute, and the Trustee
shall authenticate and deliver to the Holder of such Security without service
charge, a new Security or Securities of the same series and of like tenor, of
any authorized denomination as requested by such Holder, in aggregate principal
amount equal to and in exchange for the unredeemed portion of the principal of
the Security so surrendered.
ARTICLE TWELVE
SINKING FUNDS
Section 1201. APPLICABILITY OF ARTICLE.
The provisions of this Article shall be applicable to any sinking fund
for the retirement of Securities of any series except as otherwise specified as
contemplated by Section 301 for such Securities.
The minimum amount of any sinking fund payment provided for by the
terms of any Securities is herein referred to as a "mandatory sinking fund
payment", and any payment in excess of such minimum amount provided for by the
terms of such Securities is herein referred to as an "optional sinking fund
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payment". If provided for by the terms of any Securities, the cash amount of
any sinking fund payment may be subject to reduction as provided in
Section 1202. Each sinking fund payment shall be applied to the redemption of
Securities as provided for by the terms of such Securities.
Section 1202. SATISFACTION OF SINKING FUND PAYMENTS WITH SECURITIES.
The Company (1) may deliver Outstanding Securities of a series (other
than any previously called for redemption) and (2) may apply as a credit
Securities of a series which have been redeemed either at the election of the
Company pursuant to the terms of such Securities or through the application of
permitted optional sinking fund payments pursuant to the terms of such
Securities, in each case in satisfaction of all or any part of any sinking fund
payment with respect to any Securities of such series required to be made
pursuant to the terms of such Securities as and to the extent provided for by
the terms of such Securities; provided that the Securities to be so credited
have not been previously so credited. The Securities to be so credited shall be
received and credited for such purpose by the Trustee at the Redemption Price,
as specified in the Securities so to be redeemed, for redemption through
operation of the sinking fund and the amount of such sinking fund payment shall
be reduced accordingly.
Section 1203. REDEMPTION OF SECURITIES FOR SINKING FUND.
Not less than . . . . . . days prior to each sinking fund payment date
for any Securities, the Company will deliver to the Trustee an Officers'
Certificate specifying the amount of the next ensuing sinking fund payment for
such Securities pursuant to the terms of such Securities, the portion thereof,
if any, which is to be satisfied by payment of cash and the portion thereof, if
any, which is to be satisfied by delivering and crediting Securities pursuant to
Section 1202 and will also deliver to the Trustee any Securities to be so
delivered. Not less than . . . . . . days prior to each such sinking fund
payment date, the Trustee shall select the Securities to be redeemed upon such
sinking fund payment date in the manner specified in Section 1103 and cause
notice of the redemption thereof to be given in the name of and at the expense
of the Company in the manner provided in Section 1104. Such notice having been
duly given, the redemption of such Securities shall be made upon the terms and
in the manner stated in Sections 1106 and 1107.
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ARTICLE THIRTEEN
DEFEASANCE AND COVENANT DEFEASANCE
Section 1301. APPLICABILITY OF ARTICLE; COMPANY'S OPTION TO EFFECT DEFEASANCE
OR COVENANT DEFEASANCE.
Unless otherwise provided pursuant to Section 301, this Article
Thirteen shall be applicable to the Securities of such series, and the Company
may at its option by Board Resolution, at any time, with respect to the
Securities of such series, elect to have either Section 1302 (if applicable) or
Section 1303 (if applicable) be applied to the Outstanding Securities of such
series upon compliance with the conditions set forth below in this Article
Thirteen.
Section 1302. DEFEASANCE AND DISCHARGE.
Upon the Company's exercise of its option (if any) to have this
Section applied to any Securities or any series of Securities, as the case may
be, the Company shall be deemed to have been discharged from its obligations,
and the provisions of Article Fourteen shall cease to be effective, with respect
to such Securities as provided in this Section on and after the date the
conditions set forth in Section 1304 are satisfied (hereinafter called
"Defeasance"). For this purpose, such Defeasance means that the Company shall
be deemed to have paid and discharged the entire indebtedness represented by
such Securities and to have satisfied all its other obligations under such
Securities and this Indenture insofar as such Securities are concerned (and the
Trustee, at the expense of the Company, shall execute proper instruments
acknowledging the same), subject to the following which shall survive until
otherwise terminated or discharged hereunder; (1) the rights of Holders of such
Securities to receive, solely from the trust fund described in Section 1304 and
as more fully set forth in such Section, payments in respect of the principal of
and any premium and interest on such Securities when payments are due, (2) the
Company's obligations with respect to such Securities under Sections 304, 305,
306, 1002 and 1003, (3) the rights, powers, trusts, duties and immunities of the
Trustee hereunder, and (4) this Article. Subject to compliance with this
Article, the Company may exercise its option (if any) to have this Section
applied to any Securities notwithstanding the prior exercise of its option (if
any) to have Section 1303 applied to such Securities.
Section 1303. COVENANT DEFEASANCE.
Upon the Company's exercise of its option (if any) to have this
Section applied to any Securities or any series of Securities, as the case may
be, (1) the Company shall be released from its obligations under Sections 1006
and 1007 (and
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any other Sections or covenants applicable to such Securities that are
determined pursuant to Section 301 to be subject to this provision), and any
covenants provided pursuant to Section 301(19), 901(2) or 901(7) for the benefit
of the Holders of such Securities, (2) the occurrence of any event specified in
Section 501(4) (with respect to Sections 1006 and 1007 (and any other Sections
or covenants applicable to such Securities that are determined pursuant to
Section 301 to be subject to this provision), and any such Covenants provided
pursuant to Sections 301(19), 901(2) or 901(7) and 501(7) shall be deemed not to
be or result in an Event of Default and (3) the provisions of Article Fourteen
shall cease to be effective, in each case with respect to such Securities as
provided in this Section on and after the date the conditions set forth in
Section 1304 are satisfied (hereinafter called "Covenant Defeasance"). For this
purpose, such Covenant Defeasance means that, with respect to such Securities,
the Company may omit to comply with and shall have no liability in respect of
any term, condition or limitation set forth in any such specified Section (to
the extent so specified in the case of Section 501(4) or Article Fourteen,
whether directly or indirectly by reason of any reference elsewhere herein to
any such Section or Article or by reason of any reference in any such Section or
Article to any other provision herein or in any other document, but the
remainder of this Indenture and such Securities shall be unaffected thereby.
Section 1304. CONDITIONS TO DEFEASANCE OR COVENANT DEFEASANCE.
The following shall be the conditions to the application of
Section 1302 or Section 1303 to any Securities or any series of Securities, as
the case may be:
(1) The Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee which satisfies the
requirements contemplated by Section 609 and agrees to comply with the
provisions of this Article applicable to it) as trust funds in trust for
the purpose of making the following payments, specifically pledged as
security for, and dedicated solely to, the benefit of the Holders of such
Securities, (A) in the case of Securities of such series denominated in
U.S. dollars, (i) money in an amount, (ii) U.S. Government Obligations that
through the scheduled payment of principal and interest in respect thereof
in accordance with their terms will provide, not later than one day before
the due date of any payment, money in an amount, or (iii) a combination
thereof, in each case sufficient, in the opinion of a nationally recognized
firm of independent public accountants expressed in a written certification
thereof delivered to the Trustee, to pay and discharge, and which shall be
applied by the Trustee (or any such other
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qualifying trustee) to pay and discharge, the principal of and any premium
and interest on such Securities on the respective Stated Maturities, in
accordance with the terms of this Indenture and such Securities. As used
herein, "U.S. Government Obligation" means (x) any security that is (i) a
direct obligation of the United States of America for the payment of which
the full faith and credit of the United States of America is pledged or
(ii) an obligation of a Person controlled or supervised by and acting as an
agency or instrumentality of the United States of America the payment of
which is unconditionally guaranteed as a full faith and credit obligation
by the United States of America, which, in either case (i) or (ii), is not
callable or redeemable at the option of the issuer thereof, and (y) any
depositary receipt issued by a bank (as defined in Section 3(a)(2) of the
Securities Act) as custodian with respect to any U.S. Government Obligation
which is specified in Clause (x) above and held by such bank for the
account of the holder of such depositary receipt, or with respect to any
specific payment of principal of or interest on any U.S. Government
Obligation which is so specified and held, provided that (except as
required by law) such custodian is not authorized to make any deduction
from the amount payable to the holder of such depositary receipt from any
amount received by the custodian in respect of the U.S. Government
Obligation or the specific payment of principal or interest evidenced by
such depositary receipt or (B) in the case of Securities of such series
denominated in a currency other than the U.S. dollar, (i) money in such
currency in an amount, or (ii) Foreign Government Obligations that through
the scheduled payment of principal and interest in respect thereof in
accordance with their terms will provide, not later than one day before the
due date of any payment, money in such currency in an amount, or (iii) a
combination thereof, in each case sufficient, in the opinion of a
nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, to pay and
discharge, and which shall be applied by the Trustee (or any such other
qualifying trustee) to pay and discharge, the principal of and any premium
and interest on the Securities of such series on the respective Stated
Maturities, in accordance with the terms of this Indenture and the
Securities of such series. As used herein, "Foreign Government Obligation"
means (x) any security that is (i) a direct obligation of the government
that issued such currency for the payment of which full faith and credit of
such government is pledged or (ii) an obligation of a Person controlled or
supervised by and acting as an agency or instrumentality for such
government the payment of which is unconditionally guaranteed as a
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full faith and credit obligation by such government, which, in either
case (i) or (ii), is not callable or redeemable at the option of the issuer
thereof, and (y) any depositary receipt issued by a bank (as defined in
Section 3(a)(2) of the Securities Act) as custodian with respect to any
Foreign Government Obligation which is specified in Clause (x) and held by
such bank for the account of the holder of such depositary receipt, or with
respect to any specific payment of principal of or interest on any such
Foreign Government Obligation which is so specified and held, provided that
(except as required by law) such custodian is not authorized to make any
deduction from the amount payable to the holder of such depositary receipt
from any amount received by the custodian in respect of the Foreign
Government Obligation or the specific payment of principal or interest
evidenced by such depositary receipt.
(2) In the event of an election to have Section 1302 apply to any
Securities or any series of Securities, as the case may be, the Company
shall have delivered to the Trustee an Opinion of Counsel stating that
(A) the Company has received from, or there has been published by, the
Internal Revenue Service a ruling or (B) since the date of this instrument,
there has been a change in the applicable Federal income tax law, in either
case (A) or (B) to the effect that, and based thereon such opinion shall
confirm that, the Holders of such Securities will not recognize gain or
loss for Federal income tax purposes as a result of the deposit, Defeasance
and discharge to be effected with respect to such Securities and will be
subject to Federal income tax on the same amount, in the same manner and at
the same times as would be the case if such deposit, Defeasance and
discharge were not to occur.
(3) In the event of an election to have Section 1303 apply to any
Securities or any series of Securities, as the case may be, the Company
shall have delivered to the Trustee an Opinion of Counsel to the effect
that the Holders of such Securities will not recognize gain or loss for
Federal income tax purposes as a result of the deposit and Covenant
Defeasance to be effected with respect to such Securities and will be
subject to Federal income tax on the same amount, in the same manner and at
the same times as would be the case if such deposit and Covenant Defeasance
were not to occur.
(4) The Company shall have delivered to the Trustee an Officer's
Certificate to the effect that neither such Securities nor any other
Securities of the same series, if then listed on any securities exchange,
will be delisted as a result of such deposit.
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(5) No event which is, or after notice or lapse of time or both would
become, an Event of Default with respect to such Securities or any other
Securities shall have occurred and be continuing at the time of such
deposit or, with regard to any such event specified in Sections 501(5)
and (6), at any time on or prior to the 90th day after the date of such
deposit (it being understood that this condition shall not be deemed
satisfied until after such 90th day).
(6) Such Defeasance or Covenant Defeasance shall not cause the
Trustee to have a conflicting interest within the meaning of the Trust
Indenture Act (assuming all Securities are in default within the meaning of
such Act).
(7) Such Defeasance or Covenant of Defeasance shall not result in a
breach or violation of, or constitute a default under, any other agreement
or instrument to which the Company is a party or by which it is bound.
(8) Such Defeasance or Covenant of Defeasance shall not result in the
trust arising from such deposit constituting an investment company within
the meaning of the Investment Company Act unless such trust shall be
registered under such Act or exempt from registration thereunder.
(9) At the time of such deposit, (A) no default in the payment of any
principal of or premium or interest on any Senior Indebtedness shall have
occurred and be continuing, (B) no event of default with respect to any
Senior Indebtedness shall have resulted in such Senior Indebtedness
becoming, and continuing to be, due and payable prior to the date on which
it would otherwise have become due and payable (unless payment of such
Senior Indebtedness has been made or duly provided for ), and (C) no other
event of default with respect to any Senior Indebtedness shall have
occurred and be continuing permitting (after notice or lapse of time or
both) the holders of such Senior Indebtedness (or a trustee on behalf of
such holders) to declare such Senior Indebtedness due and payable prior to
the date on which it would otherwise have become due and payable.
(10) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent with respect to such Defeasance or Covenant of Defeasance have
been complied with.
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Section 1305. DEPOSITED MONEY AND U.S. GOVERNMENT OBLIGATIONS TO BE HELD IN
TRUST; MISCELLANEOUS PROVISIONS.
Subject to the provisions of the last paragraph of Section 1003, all
money and U.S. Government Obligations or Foreign Government Obligations
(including the proceeds thereof) deposited with the Trustee or other qualifying
trustee (solely for purposes of this Section and Section 1306, the Trustee and
any such other trustee are referred to collectively as the "Trustee") pursuant
to Section 1304 in respect of any Securities shall be held in trust and applied
by the Trustee, in accordance with the provisions of such Securities and this
Indenture, to the payment, either directly or through any such Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Holders of such Securities, of all sums due and to become due
thereon in respect of principal and any premium and interest, but money so held
in trust need not be segregated from other funds except to the extent required
by law. Money, U.S. Government Obligations and Foreign Government Obligations
so held in trust shall not be subject to the provisions of Article Fourteen.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the U.S. Government Obligations
or Foreign Government Obligations deposited pursuant to Section 1304 or the
principal and interest received in respect thereof other than any such tax, fee
or other charge which by law is for the account of the Holders of Outstanding
Securities.
Anything in this Article to the contrary notwithstanding, the Trustee
shall deliver or pay to the Company from time to time upon Company Request any
money or U.S. Government Obligations held by it as provided in Section 1304 with
respect to any Securities that, in the opinion of a nationally recognized firm
of independent public accountants expressed in a written certification thereof
delivered to the Trustee, are in excess of an amount thereof which would then be
required to be deposited to effect the Defeasance or Covenant Defeasance, as the
case may be, with respect to such Securities.
Section 1306. REINSTATEMENT.
If the Trustee or the Paying Agent is unable to apply any money in
accordance with this Article with respect to any Securities by reason of any
order or judgment of any court or governmental authority enjoining, restraining
or otherwise prohibiting such application, then the obligations under this
Indenture and such Securities from which the Company has been discharged or
released pursuant to Section 1302 or 1303 shall be revived and reinstated as
though no deposit had occurred
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pursuant to this Article with respect to such Securities, until such time as the
Trustee or Paying Agent is permitted to apply all money held in trust pursuant
to Section 1305 with respect to such Securities in accordance with this Article;
provided, however, that if the Company makes any payment of principal of or any
premium or interest on any such Security following such reinstatement of its
obligations, the Company shall be subrogated to the rights (if any) of the
Holders of such Securities to receive such payment from the money so held in
trust.
ARTICLE FOURTEEN
SUBORDINATION OF SECURITIES
Section 1401. DEBT SECURITIES SUBORDINATE TO SENIOR INDEBTEDNESS.
The Company covenants and agrees that anything in this Indenture or
the Securities of any series to the contrary notwithstanding, the indebtedness
evidenced by the Securities of each series and any coupons appurtenant thereto
is subordinate and junior in right to payment to all Senior Indebtedness to the
extent provided herein, and each Holder of Securities of each series and coupons
appurtenant thereto, by such Holder's acceptance thereof, likewise covenants and
agrees to the subordination herein provided and shall be bound by the provisions
hereof. Senior Indebtedness shall continue to be Senior Indebtedness and
entitled to the benefits of these subordination provisions irrespective of any
amendment, modification or waiver of any term of the Senior Indebtedness or
extension or renewal of the Senior Indebtedness.
In the event that the Company shall default in the payment of any
principal of (or premium, if any) or interest on any Senior Indebtedness when
the same become due and payable, whether at maturity or at a date fixed for
prepayment or by declaration of acceleration or otherwise, then, upon written
notice of such default to the Company by the Holders of Senior Indebtedness or
any trustee therefor, unless and until such default shall have been cured or
waived or shall have ceased to exist, no direct or indirect payment (in cash,
property, securities, by set-off or otherwise) shall be made or agreed to be
made on account of the principal of (or premium, if any) or interest on any of
the Securities, or in respect of any redemption, repayment, retirement, purchase
or other acquisition of any of the Securities.
In the event of
(a) any insolvency, bankruptcy, receivership, liquidation,
reorganization, readjustment, composition or other
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similar proceeding relating to the Company, its creditors or its property,
(b) any proceeding for the liquidation, dissolution, or other winding
up of the Company, voluntary or involuntary, whether or not involving insolvency
or bankruptcy proceedings,
(c) any assignment by the Company for the benefit of creditors, or
(d) any other marshalling of the assets of the Company,
all Senior Indebtedness (including any interest thereon accruing after the
commencement of any such proceedings) shall first be paid in full before any
payment or distribution, whether in cash, securities or other property, and
shall be made to any Holder of any of the Securities or coupons appurtenant
thereto on account thereof. Any payment or distribution, whether in cash,
securities or other property (other than securities of the Company or any other
corporation provided for by a plan of reorganization or readjustment the payment
of which is subordinate, at least to the extent provided in these subordination
provisions with respect to the indebtedness evidenced by the Securities, to the
payment of all Senior Indebtedness at the time outstanding and to any securities
issued in respect thereof under any such plan of reorganization or
readjustment), which would otherwise (but for these subordination provisions) be
payable or deliverable in respect of the Securities of any series or coupons
appurtenant thereto shall be paid or delivered directly to the Holders of Senior
Indebtedness in accordance with the priorities then existing among such Holders
until all Senior Indebtedness (including any interest thereon accruing after the
commencement of any such proceedings) shall have been paid in full. In the
event of any such proceeding, after payment in full of all sums owing with
respect to Senior Indebtedness, the Holders of the Securities and coupons
appurtenant thereto, together with the Holders of any obligations of the Company
ranking on a parity with the Securities, shall be entitled to be paid from the
remaining assets of the Company the amounts at the time due and owing on account
of unpaid principal of (and premium, if any) and interest on the Securities and
such other obligations before any payment or other distribution, whether in
cash, property or otherwise, shall be made on account of any capital stock or
any obligations of the Company ranking junior to the Securities and such other
obligations.
In the event that, notwithstanding the foregoing, any payment or
distribution of any character or any security, whether in cash, securities or
other property (other than securities of the Company or any other corporation
provided for
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by a plan of reorganization or readjustment the payment of which is subordinate,
at least to the extent provided in these subordination provisions with respect
to the indebtedness evidenced by the Securities, to the payment of all Senior
Indebtedness at the time outstanding with respect to the indebtedness evidenced
by the Securities, to the payment of all Senior Indebtedness at the time
outstanding and to any securities issued in respect thereof under any such plan
of reorganization or readjustment), shall be received by the Trustee or any
Holder in contravention of any of the terms hereof such payment or dissolution
or security shall be received in trust for the benefit of, and shall be paid
over or delivered and transferred to, the holders of the Senior Indebtedness at
the time outstanding in accordance with the priorities then existing among such
holders for application to the payment of all Senior Indebtedness remaining
unpaid, to the extent necessary to pay all such Senior Indebtedness in full. In
the event of the failure of the Trustee or any Holder to endorse or assign any
such payment, distribution or security, each holder of Senior Indebtedness is
hereby irrevocably authorized to endorse or assign the same.
No present or future holder of any Senior Indebtedness shall be
prejudiced in the right to enforce subordination of the indebtedness evidenced
by the Securities by any act or failure to act on the part of the Company.
Nothing contained herein shall impair, as between the Company and the Holders of
Securities of each series the obligation of the Company to pay to such Holders
the principal of (and premium, if any) and interest on such Securities and
coupons appurtenant thereto or prevent the Trustee or the Holder from exercising
all rights, powers and remedies otherwise permitted by applicable law or
hereunder upon a default or Event of Default hereunder, all subject to the
rights of the holders of the Senior Indebtedness to receive cash, securities or
other property otherwise payable or deliverable to the Holders.
Senior Indebtedness shall not be deemed to have been paid in full
unless the holders thereof shall have received cash, securities or other
property equal to the amount of such Senior Indebtedness then outstanding. Upon
the payment in full of all Senior Indebtedness, the Holders of Securities of
each series and coupons appurtenant thereto, if any, shall be subrogated to all
rights of any holders of Senior Indebtedness to receive any further payments or
distributions applicable to the Senior Indebtedness until the indebtedness
evidenced by the Securities of such series and coupons appertaining thereto, if
any, shall have been paid in full, and such payments or distributions received
by such Holders, by reason of such subrogation, of cash, securities or other
property which otherwise would be paid or distributed to the holders of Senior
Indebtedness, shall, as between the Company and its creditors
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other than the holders of Senior Indebtedness, on the one hand, and such
Holders, on the other hand, be deemed to be a payment by the Company on account
of Senior Indebtedness, and not on account of the Securities of such series.
The Trustee and Holders will take such action (including without
limitation, the delivery of this Indenture to an agent for the holders of Senior
Indebtedness or consent to the filing of a financing statement with respect
hereto) as may, in the opinion of counsel designated by the holders of a
majority in principal amount of the Senior Indebtedness at the time outstanding,
be necessary or appropriate to assure the effectiveness of the subordination
effected by these provisions.
The provisions of this Section 1401 shall not impair any rights,
interests, remedies or powers of any secured creditor of the Company in respect
of any security interest the creation of which is not prohibited by the
provisions of this Indenture.
The securing of any obligations of the Company, otherwise ranking on a
parity with the Securities or ranking junior to the Securities, shall not be
deemed to prevent such obligations from constituting, respectively, obligations
ranking on a parity with the Securities or ranking junior to the Securities.
Section 1402. TRUSTEE AND HOLDERS OF DEBT SECURITIES MAY RELY ON CERTIFICATE OF
LIQUIDATING AGENT; TRUSTEE MAY REQUIRE FURTHER EVIDENCE AS TO OWNERSHIP OF
SENIOR INDEBTEDNESS; TRUSTEE NOT FIDUCIARY TO HOLDERS OF SENIOR INDEBTEDNESS.
Upon any payment or distribution of assets of the Company referred to
in this Article Fourteen, the Trustee and the Holders shall be entitled to rely
upon an order or decree made by any court of competent jurisdiction in which
such dissolution or winding up or liquidation or reorganization or arrangement
proceedings are pending or upon a certificate of the trustee in bankruptcy,
receiver, assignee for the benefit of creditors or other Person making such
payment or distribution, delivered to the Trustee or to the Holders, for the
purpose of ascertaining the persons entitled to participate in such
distribution, the holders of the Senior Indebtedness and other indebtedness of
the Company, the amount thereof or payable thereon, the amount or amounts paid
or distributed thereon and all other facts pertinent thereto or to this Article
Fourteen. In the absence of any such bankruptcy trustee, receiver, assignee or
other Person, the Trustee shall be entitled to rely upon a written notice by a
Person representing himself or herself to be a holder of Senior Indebtedness (or
a trustee or representative on behalf of such
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holder) as evidence that such Person is a holder of such Senior Indebtedness (or
is such a trustee or representative). In the event that the Trustee determines,
in good faith, that further evidence is required with respect to the right of
any Person as a holder of Senior Indebtedness to participate in any payments or
distributions pursuant to this Article Fourteen, the Trustee may request such
person to furnish evidence to the reasonable satisfaction of the Trustee as to
the amount of Senior Indebtedness held by such Person, as to the extent to which
such Person is entitled to participate in such payment or distribution, and as
to other facts pertinent to the rights of such Person under this Article
Fourteen, and if such evidence is not furnished, the Trustee may offer any
payment to such Person pending judicial determination as to the right of such
Person to receive payment. The Trustee, however, shall not be deemed to owe any
fiduciary duty to the holders of Senior Indebtedness.
Section 1403. PAYMENT PERMITTED IF NO DEFAULT.
Nothing contained in this Article Fourteen or elsewhere in this
Indenture, or in any of the Securities, shall prevent (a) the Company at any
time, except during the pendency of any dissolution, winding up, liquidation or
reorganization proceedings referred to in, or under the conditions described in
Section 1401, from making payments of the principal of (or premium, if any) or
interest on the Securities or (b) the application by the Trustee or any Paying
Agent of any moneys deposited with it hereunder to payments of the principal of
or interest on the Securities, if, at the time of such deposit, the Trustee or
such Paying Agent, as the case may be, did not have the written notice provided
for in Section 1404 of any event prohibiting the making of such deposit, or if,
at the time of such deposit (whether or not in trust) by the Company with the
Trustee or any Paying Agent (other than the Company) such payment would not have
been prohibited by the provisions of this Article, and the Trustee or any Paying
Agent shall not be affected by any notice to the contrary received by it on or
after such date.
Section 1404. TRUSTEE NOT CHARGED WITH KNOWLEDGE OF PROHIBITION.
Anything in this Article Fourteen or elsewhere in this Indenture
contained to the contrary notwithstanding, the Trustee shall not at any time be
charged with knowledge of the existence of any facts which would prohibit the
making of any payment of money to or by the Trustee and shall be entitled
conclusively to assume that no such facts exist and that no event specified in
Section 1401 has happened, until the Trustee shall have received an Officers'
Certificate to that effect or notice in writing to that effect signed by or on
behalf of the
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holder or holders, or their representatives, of Senior Indebtedness who shall
have been certified by the Company or otherwise established to the reasonable
satisfaction of the Trustee to be such holder or holders or representatives or
from any trustee under any indenture pursuant to which such Senior Indebtedness
shall be outstanding. The Company shall give prompt written notice to the
Trustee and to the Paying Agent of any facts which would prohibit the payment of
money to or by the Trustee or any Paying Agent.
Section 1405. TRUSTEE TO EFFECTUATE SUBORDINATION.
Each Holder of Securities or coupons by such Holder's acceptance
thereof authorizes and directs the Trustee on such Holder's behalf to take such
action as may be necessary or appropriate to effectuate the subordination as
between such Holder and holders of Senior Indebtedness as provided in this
Article and appoints the Trustee its attorney-in-fact for any and all such
purposes.
Section 1406. RIGHTS OF TRUSTEE AS HOLDER OF SENIOR INDEBTEDNESS.
The Trustee shall be entitled to all the rights set forth in this
Article with respect to any Senior Indebtedness which may at the time be held by
it, to the same extent as any other holder of Senior Indebtedness; provided that
nothing in this Article shall deprive the Trustee of any rights as such holder
and provided further that nothing in this Article shall apply to claims of, or
payments to, the Trustee under or pursuant to Section 607.
Section 1407. ARTICLE APPLICABLE TO PAYING AGENTS.
In case at any time any Paying Agent other than the Trustee shall have
been appointed by the Company and be then acting hereunder, the term "Trustee"
as used in this Article shall in such case (unless the context shall otherwise
require) be construed as extending to and including such Paying Agent within its
meaning as fully for all intents and purposes as if the Paying Agent were named
in this Article in addition to or in place of the Trustee; provided, however,
that Sections 1404 and 1406 shall not apply to the Company or any Affiliate of
the Company if the Company or such Affiliate acts as Paying Agent.
Section 1408. SUBORDINATION RIGHTS NOT IMPAIRED BY ACTS OR OMISSIONS OF THE
COMPANY OR HOLDERS OF SENIOR INDEBTEDNESS.
No right of any present or future holders of any Senior Indebtedness
to enforce subordination as herein provided shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the Company
or by any act
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or failure to act, in good faith, by any such holder, or by any noncompliance by
the Company with the terms, provisions and covenants of this Indenture,
regardless of any knowledge thereof which any such holder may have or be
otherwise charged with. The holders of Senior Indebtedness may, at any time or
from time to time and in their absolute discretion, change the manner, place or
terms of payment, change or extend the time of payment of, or renew or alter,
any such Senior Indebtedness, or amend or supplement any instrument pursuant to
which any such Senior Indebtedness is issued or by such it may be secured, or
release any security therefor, or exercise or refrain from exercising any other
of their rights under the Senior Indebtedness including, without limitation, the
waiver of default thereunder, all without notice to or assent from the Holders
of the Securities or the Trustee and without affecting the obligations of the
Company, the Trustee or the Holders of the Securities under this Article.
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, and their respective corporate seals to be hereunto affixed
and attested, all as of the day and year first above written.
NORTHROP GRUMMAN CORPORATION
By _____________________________
ATTEST:
______________________
THE CHASE MANHATTAN BANK (NATIONAL
ASSOCIATION), as Trustee
By ______________________________
ATTEST:
________________________
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State of California )
)
County of __________ )
On ______________ before me, __________________, Notary Public, personally
appeared ___________________________________, / / personally known to me or
/ / proved to me on the basis of satisfactory evidence to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and
that by his/her/their signature(s) on the instrument the person(s), or the
entity upon behalf of which the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
_______________________________
State of New York )
)
County of __________ )
On ______________ before me, __________________, Notary Public, personally
appeared ___________________________________, / / personally known to me or
/ / proved to me on the basis of satisfactory evidence to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and
that by his/her/their signature(s) on the instrument the person(s), or the
entity upon behalf of which the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
_______________________________
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EXHIBIT 4-7
-----------
ALTERNATIVES REPRESENTED BY BRACKETED OR BLANK SECTIONS
HEREIN SHALL BE DETERMINED IN CONFORMITY WITH THE
APPLICABLE PROSPECTUS SUPPLEMENT OR SUPPLEMENTS
DEBT WARRANT AGREEMENT
dated as of _______________
for
WARRANTS TO PURCHASE DEBT SECURITIES
between
NORTHROP GRUMMAN CORPORATION
and
(NAME OF DEBT WARRANT AGENT),
as Debt Warrant Agent
TABLE OF CONTENTS
PAGE
ARTICLE 1. ISSUANCE OF DEBT WARRANTS AND EXECUTION AND DELIVERY OF DEBT
WARRANT CERTIFICATES . . . . . . . . . . . . . . . . . . . . . 1
1.1 Issuance of Debt Warrants . . . . . . . . . . . . . . . . 1
1.2 Form of Execution of Debt Warrant Certificates . . . . . . 2
1.3 Issuance and Delivery of Debt Warrant Certificates . . . . 3
1.4 Temporary Debt Warrant Certificates . . . . . . . . . . . 4
1.5 Payment of Taxes . . . . . . . . . . . . . . . . . . . . . 4
1.6 "Holder" . . . . . . . . . . . . . . . . . . . . . . . . . 4
ARTICLE 2. DURATION AND EXERCISE OF DEBT WARRANTS . . . . . . . . . . . . 5
2.1 Duration of Debt Warrants . . . . . . . . . . . . . . . . 5
2.2 Exercise of Debt Warrants . . . . . . . . . . . . . . . . 5
ARTICLE 3. OTHER PROVISIONS RELATING TO RIGHTS OF HOLDERS OF DEBT
WARRANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.1 No Rights as Holder of Underlying Debt Security
Conferred by Debt Warrants or Debt Warrant Certificates . 7
3.2 Lost, Stolen, Destroyed or Mutilated Debt Warrant
Certificates . . . . . . . . . . . . . . . . . . . . . . . 7
3.3 Holder of Debt Warrants May Enforce Rights . . . . . . . . 7
ARTICLE 4. EXCHANGE AND TRANSFER OF DEBT WARRANTS . . . . . . . . . . . . 8
4.1 [Debt Warrant Register;] Exchange and Transfer of Debt
Warrants . . . . . . . . . . . . . . . . . . . . . . . . . 8
4.2 Treatment of Holders of Debt Warrants . . . . . . . . . . 9
ARTICLE 5. CONCERNING THE DEBT WARRANT AGENT . . . . . . . . . . . . . . . 10
5.1 Debt Warrant Agent . . . . . . . . . . . . . . . . . . . . 10
5.2 Conditions of Debt Warrant Agent's Obligations . . . . . . 10
5.3 Compliance With Applicable Laws . . . . . . . . . . . . . 12
5.5 Office . . . . . . . . . . . . . . . . . . . . . . . . . . 15
ARTICLE 6. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . 15
6.1 Consolidation or Merger of the Company and Conveyance or
Transfer Permitted Subject to Certain Conditions . . . . . 15
6.2 Rights and Duties of Successor Corporation . . . . . . . . 15
6.3 Supplements and Amendments . . . . . . . . . . . . . . . . 15
-i-
6.4 Notices and Demands to the Company and Debt Warrant
Agent . . . . . . . . . . . . . . . . . . . . . . . . . . 16
6.5 Addresses For Notices . . . . . . . . . . . . . . . . . . 16
6.6 Governing Law . . . . . . . . . . . . . . . . . . . . . . 16
6.7 Delivery of Prospectus . . . . . . . . . . . . . . . . . . 16
6.8 Governmental Approvals . . . . . . . . . . . . . . . . . . 17
6.9 Persons Having Rights Under Debt Warrant Agreement . . . . 17
6.10 Headings . . . . . . . . . . . . . . . . . . . . . . . . . 17
6.11 Counterparts . . . . . . . . . . . . . . . . . . . . . . . 17
6.12 Inspection of Agreement . . . . . . . . . . . . . . . . . 17
-ii-
THIS DEBT WARRANT AGREEMENT, dated as of _____________, between
Northrop Grumman Corporation, a Delaware corporation (the "Company"), and
_________________, a _________________ organized and existing under the laws of
__________________, warrant agent (the "Debt Warrant Agent").
WHEREAS, the Company has entered into an Indenture dated as of
____________________, 19__ (the "Indenture") with
__________________________________________, trustee (the "Trustee"), providing
for the issuance by the Company from time to time, in one or more series, of
debt securities evidencing its unsecured, [senior] [subordinated] indebtedness
(such debt securities being referred to as the "Debt Securities"); and
WHEREAS, the Company proposes to issue warrants (the "Debt
Warrants") representing the right to purchase Debt Securities of one or more
series (the "Underlying Debt Securities"); and
WHEREAS, the Company has duly authorized the execution and delivery
of this Debt Warrant Agreement to provide for the issuance of Debt Warrants to
be exercisable at such times and for such prices, and to have such other
provisions, as shall be fixed as hereinafter provided.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein contained, the parties hereto agree as follows:
ARTICLE 1.
ISSUANCE OF DEBT WARRANTS AND EXECUTION AND DELIVERY
OF DEBT WARRANT CERTIFICATES
1.1 ISSUANCE OF DEBT WARRANTS. Debt Warrants may be issued from
time to time, together with or separately from any Securities (the "Offered Debt
Securities"). Prior to the issuance of any Debt Warrants, there shall be
established by or pursuant to a resolution or resolutions duly adopted by the
Company's Board of Directors or by any committee thereof duly authorized to act
with respect thereto (a "Board Resolution"):
(a) the title and aggregate number of such Debt Warrants;
(b) whether such Debt Warrants are to be issued with any
Offered Debt Securities and, if so, the title, aggregate principal amount
and terms of any such Offered Debt Securities; the number of Debt
Warrants to be issued with each $1,000 principal amount of such Offered
Debt Securities (or such other principal amount of such Offered
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Debt Securities as is provided for in the Board Resolution); and the
date, if any, on and after which such Debt Warrants and such Offered Debt
Securities will be separately transferable (the "Detachable Date");
(c) the title, aggregate principal amount, ranking and terms
[(including the subordination and conversion provisions)] of the
Underlying Debt Securities that may be purchased upon exercise of such
Debt Warrants;
(d) the time or times at which, or period or periods during
which, such Debt Warrants may be exercised and the final date on which
such Debt Warrants may be exercised (the "Expiration Date");
(e) the principal amount of Underlying Debt Securities that
may be purchased upon exercise of each Debt Warrant and the price, or the
manner of determining the price (the "Debt Warrant Price"), at which such
principal amount may be purchased upon such exercise;
(f) the currency or currencies, including composite currencies
or currency units, in which the price of such Debt Warrants, the
principal of or any premium or interest on the Debt Securities
purchasable upon the exercise of such Debt Warrants and the exercise
price of such Debt Warrants, will be payable.
(g) the terms of any right to redeem such Debt Warrants; and
(h) any other terms of such Debt Warrants not inconsistent
with the provisions of this Agreement.
1.2 FORM OF EXECUTION OF DEBT WARRANT CERTIFICATES.
(a) The Debt Warrants shall be evidenced by warrant
certificates (the "Debt Warrant Certificates"), which may be in
registered or bearer form and otherwise shall be substantially in such
form or forms as shall be established by or pursuant to a Board
Resolution. Each Debt Warrant Certificate, whenever issued, shall be
dated the date it is countersigned by the Debt Warrant Agent and may have
such letters, numbers or other identifying marks and such legends or
endorsements printed, lithographed or engraved thereon as are not
inconsistent with the provisions of this Agreement, or as may be required
to comply with any applicable law, rule or regulation or with any rule or
regulation of any securities exchange on which the Debt Warrants may be
listed, or to conform to usage, as the officer of the Company executing
the same may approve (such officer's execution thereof to be conclusive
evidence
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of such approval). Each Debt Warrant Certificate shall evidence one or
more Debt Warrants.
(b) The Debt Warrant Certificates shall be signed in the name
and on behalf of the Company by its Chairman, its President or a Vice
President (any reference to a Vice President of the Company herein shall
be deemed to include any Vice President of the Company whether or not
designated by a number or a word or words added before or after the title
"Vice President") under its corporate seal, and attested by its Secretary
or an Assistant Secretary. Such signatures may be manual or facsimile
signatures of the present or any future holder of any such office and may
be imprinted or otherwise reproduced on the Debt Warrant Certificates.
The seal of the Company may be in the form of a facsimile thereof and may
be impressed, affixed, imprinted or otherwise reproduced on the Debt
Warrant Certificates.
(c) No Debt Warrant Certificate shall be valid for any
purpose, and no Debt Warrant evidenced thereby shall be deemed issued or
exercisable, until such Debt Warrant Certificate has been countersigned
by the manual or facsimile signature of the Debt Warrant Agent. Such
signature by the Debt Warrant Agent upon any Debt Warrant Certificate
executed by the Company shall be conclusive evidence that the Debt
Warrant Certificate so countersigned has been duly issued hereunder.
(d) In case any officer of the Company who shall have signed
any Debt Warrant Certificate either manually or by facsimile signature
shall cease to be such officer before the Debt Warrant Certificate so
signed shall have been countersigned and delivered by the Debt Warrant
Agent, such Debt Warrant Certificate nevertheless may be countersigned
and delivered as though the person who signed such Debt Warrant
Certificate had not ceased to be such officer of the Company; and any
Debt Warrant Certificate may be signed on behalf of the Company by such
person as, at the actual date of the execution of such Debt Warrant
Certificate, shall be the proper officer of the Company, although at the
date of the execution of this Agreement such person was not such an
officer.
1.3 ISSUANCE AND DELIVERY OF DEBT WARRANT CERTIFICATES. At any
time and from time to time after the execution and delivery of this Agreement,
the Company may deliver Debt Warrant Certificates executed by the Company to the
Debt Warrant Agent for countersignature. Except as provided in the following
sentence, the Debt Warrant Agent shall thereupon countersign and deliver such
Debt Warrant Certificates to or upon the written request of the Company.
Subsequent to the
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original issuance of a Debt Warrant Certificate evidencing Debt Warrants, the
Debt Warrant Agent shall countersign a new Debt Warrant Certificate evidencing
such Debt Warrants only if such Debt Warrant Certificate is issued in exchange
or substitution for one or more previously countersigned Debt Warrant
Certificates evidencing such Debt Warrants or in connection with their transfer,
as hereinafter provided.
1.4 TEMPORARY DEBT WARRANT CERTIFICATES. Pending the preparation of
definitive Debt Warrant Certificates, the Company may execute, and upon the
order of the Company the Debt Warrant Agent shall countersign and deliver,
temporary Debt Warrant Certificates that are printed, lithographed, typewritten,
mimeographed or otherwise produced, substantially of the tenor of the definitive
Debt Warrant Certificates in lieu of which they are issued and with such
appropriate insertions, omissions, substitutions and other variations as the
officer executing such Debt Warrant Certificates may determine, as evidenced by
such officer's execution of such Debt Warrant Certificates.
If temporary Debt Warrant Certificates are issued, the Company will cause
definitive Debt Warrant Certificates to be prepared without unreasonable delay.
After the preparation of definitive Debt Warrant Certificates, the temporary
Debt Warrant Certificates shall be exchangeable for definitive Debt Warrant
Certificates upon surrender of the temporary Debt Warrant Certificates at the
corporate trust office of the Debt Warrant Agent [or _____], without charge to
the Holder, as defined in Section 1.6 hereof. Upon surrender for cancellation
of any one or more temporary Debt Warrant Certificates, the Company shall
execute, and the Debt Warrant Agent shall countersign and deliver in exchange
therefor, definitive Debt Warrant Certificates representing the same aggregate
number of Debt Warrants. Until such exchanges, the temporary Debt Warrant
Certificates shall in all respects be entitled to the same benefits under this
Agreement as definitive Debt Warrant Certificates.
1.5 PAYMENT OF TAXES. The Company will pay all stamp and other duties,
if any, to which this Agreement or the original issuance of the Debt Warrants or
Debt Warrant Certificates may be subject under the laws of the United States of
America or any state or locality.
1.6 "HOLDER". The term "Holder" or "Holders," as used herein with
reference to a Debt Warrant Certificate, shall mean [if registered Debt
Warrants -- the person or persons in whose name such Debt Warrant Certificate
shall then be registered as set forth in the Debt Warrant Register to be
maintained by the Debt Warrant Agent pursuant to Section 4.1 for that purpose
[if bearer Debt Warrants -- the bearer of such Debt Warrant Certificate] or, in
the case of Debt Warrants that are issued
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with Offered Debt Securities and cannot then be transferred separately
therefrom, [if registered Offered Debt Securities and Debt Warrants that are not
then detachable -- the person or persons in whose name the related Offered Debt
Securities shall be registered as set forth in the security register to be
maintained by the Trustee for such Offered Debt Securities pursuant to the
Indenture] [if bearer Offered Debt Securities and Debt Warrants that are not
then detachable -- the bearer of the related Offered Debt Security], prior to
the Detachable Date. [If registered Offered Debt Securities and Debt Warrants
that are not then detachable -- the Company will, or will cause the security
registrar of any such Offered Debt Securities to, make available to the Debt
Warrant Agent at all times (including on and after the Detachable Date, in the
case of Debt Warrants originally issued with Offered Debt Securities and not
subsequently transferred separately therefrom) such information as to holders of
Offered Debt Securities with Debt Warrants as may be necessary to keep the
Warrant Register up to date.]
ARTICLE 2.
DURATION AND EXERCISE OF DEBT WARRANTS
2.1 DURATION OF DEBT WARRANTS. Each Debt Warrant may be exercise
at the time or times, or during the period or periods, provided by or pursuant
to the Board Resolution relating thereto and specified in the Debt Warrant
Certificate evidencing such Debt Warrant. Each Debt Warrant not exercised at or
before 5:00 P.M., New York City time, on its Expiration Date shall become void,
and all rights of the Holder of such Debt Warrant thereunder and under this
Agreement shall cease.
2.2 EXERCISE OF DEBT WARRANTS.
(a) The Holder of a Debt Warrant shall have the right, at its
option, to exercise such Debt Warrant and, subject to subsection (f) of
this Section 2.2, purchase the principal amount of Underlying Debt
Securities provided for therein at the time or times or during the period
or periods referred to in Section 2.1 and specified in the Debt Warrant
Certificate evidencing such Debt Warrant. Except as may be provided in a
Debt Warrant Certificate, a Debt Warrant may be exercised by completing
the form of election to purchase set forth on the reverse side of the
Debt Warrant Certificate, by duly executing and delivering the same,
together with payment in full of the Debt Warrant Price in lawful money
of the [United States of America,] in cash or by certified or official
bank check or by bank wire transfer, to the Debt Warrant Agent. Except
as may be provided in a Debt Warrant Certificate, the date on which such
Debt Warrant Certificate and payment are received by the Debt Warrant
Agent as aforesaid shall be deemed to be
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the date on which the Debt Warrant is exercised and the Underlying Debt
Securities issued.
(b) Upon the exercise of a Debt Warrant, the Company shall
issue, pursuant to the Indenture, in authorized denominations to or upon
the order of the Holder of such Debt Warrant, the Underlying Debt
Securities to which such Holder is entitled, in the form required under
such Indenture, registered, in the case of Underlying Debt Securities in
registered form, in such name or names as may be directed by such Holder.
(c) If fewer than all of the Debt Warrants evidenced by a Debt
Warrant Certificate are exercised, the Company shall execute, and an
authorized officer of the Debt Warrant Agent shall countersign and
deliver, a new Debt Warrant Certificate evidencing the number of Debt
Warrants remaining unexercised.
(d) The Debt Warrant Agent shall deposit all funds received by
it in payment of the Debt Warrant Price in the account of the Company
maintained with it for such purpose and shall advise the Company by
telephone by 5:00 P.M., New York City time, of each day on which a
payment of the Debt Warrant Price for Debt Warrants is received of the
amount so deposited in its account. The Debt Warrant Agent shall
promptly confirm such telephone advice in writing to the Company.
(e) The Debt Warrant Agent shall, from time to time, as
promptly as practicable, advise the Company and the Trustee of (i) the
number of Debt Warrants of each title exercised as provided herein,
(ii) the instructions of each Holder with respect to delivery of the
Underlying debt Securities to which such Holder is entitled upon such
exercise, (iii) the delivery of Debt Warrant Certificates evidencing the
balance, if any, of the Debt Warrants remaining unexercised after such
exercise, and (iv) such other information as the Company or the Trustee
shall reasonably require. Such notice may be given by telephone, to be
promptly confirmed in writing.
(f) The Holder, and not the Company, shall be required to pay
any stamp or other tax or other governmental charge that may be imposed
in connection with any transfer involved in the issuance of the
Underlying Debt Securities; and in the event that any such transfer is
involved, the Company shall not be required to issue any Underlying Debt
Securities (and the Holder's purchase of the Underlying Debt Securities
upon the exercise of such Holder's Debt Warrant shall not be deemed to
have been consummated) until such tax or other charge shall have been
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paid or it has been established to the Company's satisfaction that no
such tax or other charge is due.
ARTICLE 3.
OTHER PROVISIONS RELATING TO RIGHTS OF HOLDERS
OF DEBT WARRANTS
3.1 NO RIGHTS AS HOLDER OF UNDERLYING DEBT SECURITY CONFERRED BY
DEBT WARRANTS OR DEBT WARRANT CERTIFICATES. No Debt Warrant or Debt Warrant
Certificate shall entitle the Holder to any of the rights of a holder of
Underlying Debt Securities, including, without limitation, the right to receive
the payment of principal of (or premium, if any, on) or interest, if any, on
Underlying Debt Securities or to enforce any of the covenants in the Indenture.
3.2 LOST, STOLEN, DESTROYED OR MUTILATED DEBT WARRANT CERTIFICATES.
Upon receipt by the Company and the Debt Warrant Agent of evidence reasonably
satisfactory to them of the ownership of and the loss, theft, destruction or
mutilation of any Debt Warrant Certificate and of indemnity (other than in
connection with any mutilated Debt Warrant certificates surrendered to the Debt
Warrant Agent for cancellation) reasonably satisfactory to them, the Company
shall execute, and the Debt Warrant Agent shall countersign and deliver, in
exchange for or in lieu of each lost, stolen, destroyed or mutilated Debt
Warrant Certificate, a new Debt Warrant Certificate evidencing a like number of
Debt Warrants of the same title. Upon the issuance of a new Debt Warrant
Certificate under this Section, the Company may require the payment of a sum
sufficient to cover any stamp or other tax or other governmental charge that may
be imposed in connection therewith and any other expenses (including the fees
and expenses of the Debt Warrant Agent) in connection therewith. Every
substitute Debt Warrant Certificate executed and delivered pursuant to this
Section in lieu of any lost, stolen or destroyed Debt Warrant Certificate shall
represent a contractual obligation of the Company, whether or not such lost,
stolen or destroyed Debt Warrant Certificate shall be at any time enforceable by
anyone, and shall be entitled to the benefits of this Agreement equally and
proportionately with any and all other Debt Warrant Certificates, duly executed
and delivered hereunder, evidencing Debt Warrants of the same title. The
provisions of this Section are exclusive and shall preclude (to the extent
lawful) all other rights and remedies with respect to the replacement of lost,
stolen, destroyed or mutilated Debt Warrant Certificates.
3.3 HOLDER OF DEBT WARRANTS MAY ENFORCE RIGHTS. Notwithstanding
any of the provisions of this Agreement, a Holder, without the consent of the
Debt Warrant Agent, the Trustee, the holder of any Underlying Debt Securities or
the
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Holder of any other Debt Warrant, may, on its own behalf and for its own
benefit, enforce, and may institute and maintain any suit, action or proceeding
against the Company to enforce, or otherwise in respect of, its right to
exercise its Debt Warrant or Debt Warrants in the manner provided in this
Agreement and its Debt Warrant Certificate.
ARTICLE 4.
EXCHANGE AND TRANSFER OF DEBT WARRANTS
4.1 [DEBT WARRANT REGISTER;] EXCHANGE AND TRANSFER OF DEBT
WARRANTS. [If registered Debt Warrants -- The Debt Warrant Agent shall
maintain, at its corporate trust office [or at
_________________________________], a register (the "Debt Warrant Register") in
which, upon the issuance of Debt Warrants, or on and after the Detachable Date
in the case of Debt Warrants not separately transferable prior thereto, and,
subject to such reasonable regulations as the Debt Warrant Agent may prescribe,
it shall register Debt Warrant Certificates and exchanges and transfers thereof.
The Debt Warrant Register shall be in written form or in any other form capable
of being converted into written form within a reasonable time.]
Except as provided in the following sentence, upon surrender at the
corporate trust office of the Debt Warrant Agent [or at ____________________],
Debt Warrant Certificates may be exchanged for one or more other Debt Warrant
Certificates evidencing the same aggregate number of Debt Warrants of the same
title, or may be transferred in whole or in part. A Debt Warrant Certificate
evidencing Debt Warrants that are not then transferable separately from the
Offered Debt Security with which they were issued may be exchanged or
transferred prior to its Detachable Date only together with such Offered Debt
Security and only for the purpose of effecting, or in conjunction with, an
exchange or transfer of such Offered Debt Security; and on or prior to the
Detachable Date, [if registered Offered Debt Securities and Debt Warrants --
each exchange or transfer of such Offered Debt Security on the security register
of the Offered Debt Securities shall operate also to exchange or transfer the
related Debt Warrants] [if bearer Offered Debt Securities and Debt Warrants --
an exchange or transfer of possession of the related Offered Debt Security shall
operate also to exchange or transfer the related Debt Warrants]. [If registered
Debt Warrants -- A transfer shall be registered upon surrender of a Debt Warrant
Certificate to the Debt Warrant Agent at its corporate trust office [or at
________________] for transfer, properly endorsed or accompanied by appropriate
instruments of transfer and written instructions for transfer, all in form
satisfactory to the Company and the Debt Warrant Agent.] Whenever a Debt
Warrant Certificate is surrendered for exchange or transfer, the Debt Warrant
Agent shall countersign
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and deliver to the person or persons entitled thereto one or more Debt Warrant
Certificates duly executed by the Company, as so requested. The Debt Warrant
Agent shall not be required to effect any exchange or transfer which will result
in the issuance of a Debt Warrant Certificate evidencing a fraction of a Debt
Warrant. All Debt Warrant Certificates issued upon any exchange or transfer of
a Debt Warrant Certificate shall be the valid obligations of the Company,
evidencing the same obligations, and entitled to the same benefits under this
Agreement, as the Debt Warrant Certificate surrendered for such exchange or
transfer.
No service charge shall be made for any exchange or transfer of Debt
Warrants, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection with any such
exchange or transfer, in accordance with Section 2.2(f) hereof.
4.2 TREATMENT OF HOLDERS OF DEBT WARRANTS. Every Holder of a Debt
Warrant, by accepting the Debt Warrant Certificate evidencing the same, consents
and agrees with the Company, the Debt Warrant Agent and with every other Holder
of Debt Warrants of the same title that the Company and the Debt Warrant Agent
may treat the Holder of a Debt Warrant Certificate (or, if the Debt Warrant
Certificate is not then detachable, the Holder of the related Offered Debt
Security) as the absolute owner of such Debt Warrant for all purposes and as the
person entitled to exercise the rights represented by such Debt Warrant, any
notice to the contrary notwithstanding.
4.3 CANCELLATION OF DEBT WARRANT CERTIFICATES. In the event that
the Company shall purchase, redeem or otherwise acquire any Debt Warrants after
the issuance thereof, the Debt Warrant Certificate or Certificates evidencing
such Debt Warrants shall thereupon be delivered to the Debt Warrant Agent and be
cancelled by it. The Debt Warrant Agent shall also cancel any Debt Warrant
Certificate (including any mutilated Debt Warrant Certificate) delivered to it
for exercise, in whole or in part, or for exchange [or transfer] [if Debt
Warrant Certificates are issued in bearer form -- , except that Debt Warrant
Certificates delivered to the Debt Warrant Agent in exchange for Debt Warrant
Certificates of other denominations may be retained by the Debt Warrant Agent
for reissue]. Debt Warrant Certificates so cancelled shall be delivered by the
Debt Warrant Agent to the Company from time to time, or disposed of in
accordance with the instructions of the Company.
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ARTICLE 5.
CONCERNING THE DEBT WARRANT AGENT
5.1 DEBT WARRANT AGENT. The Company hereby appoints
_________________________________ as Debt Warrant Agent of the Company in
respect of the Debt Warrants and the Debt Warrant Certificates upon the terms
and subject to the conditions set forth herein; and ____________________ hereby
accepts such appointment. The Debt Warrant Agent shall have the powers and
authority granted to and conferred upon it hereby and such further powers and
authority to act on behalf of the Company as the Company may hereafter grant to
or confer upon it. All of the terms and provisions with respect to such powers
and authority contained in any Debt Warrant Certificate are subject to and
governed by the terms and provisions hereof.
5.2 CONDITIONS OF DEBT WARRANT AGENT'S OBLIGATIONS. The Debt
Warrant Agent accepts its obligations set forth herein upon the terms and
conditions hereof, including the following, to all of which the Company agrees
and to all of which the rights hereunder of the Holders shall be subject:
(a) COMPENSATION AND INDEMNIFICATION. The Company agrees to
promptly pay the Debt Warrant Agent the compensation to be set forth as
an exhibit hereto and to reimburse the Debt Warrant Agent for reasonable
out-of-pocket expenses (including counsel fees) incurred by the Debt
Warrant Agent in connection with the services rendered hereunder by the
Debt Warrant Agent. The Company also agrees to indemnify the Debt
Warrant Agent for, and to hold it harmless against, any loss, liability
or expense (including the reasonable costs and expenses of defending
against any claim of liability) incurred without negligence or bad faith
on the part of the Debt Warrant Agent arising out of or in connection
with its appointment as Debt Warrant Agent hereunder.
(b) AGENT FOR THE COMPANY. In acting under this Agreement and
in connection with any Debt Warrant Certificate, the Debt Warrant Agent
is acting solely as agent of the Company and does not assume any
obligation or relationship of agency or trust for or with any Holder.
(c) COUNSEL. The Debt Warrant Agent may consult with counsel
satisfactory to it, and the advice of such counsel shall be full and
complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in accordance with
the advice of such counsel.
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(d) DOCUMENTS. The Debt Warrant Agent shall be protected and
shall incur no liability for or in respect of any action taken, suffered
or omitted by it in reliance upon any notice, direction, consent,
certificate, affidavit, statement or other paper or document reasonably
believed by it to be genuine and to have been presented or signed by the
proper parties.
(e) OFFICER'S CERTIFICATE. Whenever in the performance of its
duties hereunder the Debt Warrant Agent shall reasonably deem it
necessary that any fact or matter be proved or established by the Company
prior to taking, suffering or omitting any action hereunder, the Debt
Warrant Agent may (unless other evidence in respect thereof be herein
specifically prescribed), in the absence of bad faith on its party, rely
upon a certificate signed by the Chairman, the President, a Vice
President, the Treasurer, an Assistant Treasurer, the Secretary or an
Assistant Secretary of the Company (an "Officer's Certificate") delivered
by the Company to the Debt Warrant Agent.
(f) ACTIONS THROUGH AGENTS. The Debt Warrant Agent may
execute and exercise any of the rights or powers hereby vested in it or
perform any duty hereunder either itself or by or through its attorneys
or agents, and the Debt Warrant Agent shall not be answerable or
accountable for any act, default, neglect or misconduct of any such
attorney or agent or for any loss to the Company resulting from such
neglect or misconduct; provided, however, that reasonable care shall have
been exercised in the selection and continued employment of such
attorneys and agents.
(g) CERTAIN TRANSACTIONS. The Debt Warrant Agent, and any
officer, director or employee thereof, may become the owner of, or
acquire any interest in, any Debt Warrant, with the same rights that he,
she or it would have if it were not the Debt Warrant Agent, and, to the
extent permitted by applicable law, he, she or it may engage or be
interested in any financial or other transaction with the Company and may
serve on, or as depositary, trustee or agent for, any committee or body
of holders of Underlying Debt Securities or other obligations of the
Company as if it were not the Debt Warrant Agent. Nothing in this
Agreement shall be deemed to prevent the Debt Warrant Agent from acting
as Trustee under the Indenture.
(h) NO LIABILITY FOR INTEREST. The Debt Warrant Agent shall
not be liable for interest on any monies at any time received by it
pursuant to any of the provisions of this Agreement or of the Debt
Warrant Certificates, except as otherwise agreed with the Company.
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(i) NO LIABILITY FOR INVALIDITY. The Debt Warrant Agent shall
incur no liability with respect to the validity of this Agreement (except
as to the due execution hereof by the Debt Warrant Agent) or any Debt
Warrant Certificate (except as to the countersignature thereof by the
Debt Warrant Agent).
(j) NO RESPONSIBILITY FOR COMPANY REPRESENTATIONS. The Debt
Warrant Agent shall not be responsible for any of the recitals or
representations contained herein (except as to such statements or
recitals as describe the Debt Warrant Agent or action taken or to be
taken by it) or in any Debt Warrant Certificate (except as to the Debt
Warrant Agent's countersignature on such Debt Warrant Certificate), all
of which recitals and representations are made solely by the Company.
(k) NO IMPLIED OBLIGATIONS. The Debt Warrant Agent shall be
obligated to perform only such duties as are specifically set forth
herein, and no other duties or obligations shall be implied. The Debt
Warrant Agent shall not be under any obligation to take any action
hereunder that may subject it to any expense or liability, the payment of
which within a reasonable time is not, in its reasonable opinion, assured
to it. The Debt Warrant Agent shall not be accountable or under any duty
or responsibility for the use by the Company of any Debt Warrant
Certificate countersigned by the Debt Warrant Agent and delivered by it
to the Company pursuant to this Agreement or for the application by the
Company of the proceeds of the issuance or exercise of Debt Warrants.
The Debt Warrant Agent shall have no duty or responsibility in case of
any default by the Company in the performance of its covenants or
agreements contained herein or in any Debt Warrant Certificate or in case
of the receipt of any written demand from a Holder with respect to such
default, including, without limiting the generality of the foregoing, any
duty or responsibility to initiate or attempt to initiate any proceedings
at law or otherwise or, except as provided in Section 6.4 hereof, to make
any demand upon the Company.
5.3 COMPLIANCE WITH APPLICABLE LAWS. The Debt Warrant Agent agrees
to comply with all applicable federal and state laws imposing obligations on it
in respect of the services rendered by it under this Debt Warrant Agreement and
in connection with the Debt Warrants, including (but not limited to) the
provisions of United States federal income tax laws regarding information
reporting and backup withholding. The Debt Warrant Agent expressly assumes all
liability for its failure to comply with any such laws imposing obligations on
it, including (but not limited to) any liability for failure to
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comply with any applicable provisions of United States federal income tax laws
regarding information reporting and backup withholding.
5.4 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.
(a) The Debt Warrant Agent may at any time resign as such by
giving written notice to the Company, specifying the date on which such
resignation shall become effective; provided that such date shall not be
less than 90 days after the date on which such notice is given, unless
the Company agrees to accept a shorter notice. The Debt Warrant Agent
may be removed at any time by the filing with it of an instrument in
writing signed on behalf of the Company and specifying such removal and
the date when it shall become effective. Notwithstanding the two
preceding sentences, such resignation or removal shall take effect only
upon the appointment by the Company, as hereinafter provided, of a
successor Debt Warrant Agent (which shall be a bank or trust company
organized and doing business under the laws of the United States of
America, any state thereof or the District of Columbia, authorized under
the laws of such jurisdiction to exercise corporate trust powers and
having at the time of its appointment as Debt Warrant Agent a combined
capital and surplus (as set forth in its most recent published report of
condition) of at least $50,000,000 and the acceptance of such appointment
by such successor Debt Warrant Agent.
(b) In case at any time the Debt Warrant Agent shall resign,
or shall be removed, or shall become incapable of acting, or shall be
adjudged a bankrupt or insolvent, or shall file a petition seeking relief
under Title 11 of the United States Code, as now constituted or hereafter
amended, or under any other applicable federal or state bankruptcy law or
similar law, or make an assignment for the benefit of its creditors, or
consent to the appointment of a receiver or custodian for all or any
substantial part of its property, or shall admit in writing its inability
to pay or meet its debts as they mature, or if a receiver or custodian
for it or for all or any substantial part of its property shall be
appointed, or if an order of any court shall be entered for relief
against it under the provisions of Title 11 of the United States Code, as
now constituted or hereafter amended, or under any other applicable
federal or state bankruptcy or similar law, or if any public officer
shall have taken charge or control of the Debt Warrant Agent or of its
property or affairs for the purpose of rehabilitation, conservation or
liquidation, a successor Debt Warrant Agent, qualified as
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aforesaid, shall be appointed by the Company by an instrument in writing,
filed with the successor Debt Warrant Agent. Upon the appointment as
aforesaid of a successor Debt Warrant Agent and acceptance by the
successor Debt Warrant Agent of such appointment, the Debt Warrant Agent
so superseded shall cease to be Debt Warrant Agent hereunder.
(c) Any successor Debt Warrant Agent appointed hereunder shall
execute, acknowledge and deliver to its predecessor and to the Company an
instrument accepting such appointment hereunder, and thereupon such
successor Debt Warrant Agent, without any further act, deed or
conveyance, shall become vested with all the authority, rights, powers,
trusts, immunities, duties and obligations of such predecessor with like
effect as if originally named as Debt Warrant Agent hereunder, and such
predecessor, upon payment of its charges and disbursements then unpaid,
shall thereupon become obligated to transfer, deliver and pay over, and
such successor Debt Warrant Agent shall be entitled to receive, [the Debt
Warrant Register and] all monies, securities and other property on
deposit with or held by such predecessor (together with any books and
records relating thereto), as Debt Warrant Agent hereunder.
(d) The Company shall cause notice of the appointment of any
successor Debt Warrant Agent to be [if registered Debt Warrants -- mailed
by first-class mail, postage prepaid, to each Holder at its address
appearing on the Debt Warrant Register or, in the case of Debt Warrants
that are issued with Offered Debt Securities and cannot then be
transferred separately therefrom, on the security register for the
Offered Securities] [if bearer Debt Warrants -- published in an
Authorized Newspaper (as defined in the Indenture) in The City of New
York [and in such other city or cities as may be specified by the
Company] at least twice within any seven-day period]. Such notice shall
set forth the name and address of the successor Debt Warrant Agent.
Failure to give any notice provided for in this Section 5.3(d), or any
defect therein, shall not, however, affect the legality or validity of
the appointment of the successor Debt Warrant Agent.
(e) Any corporation into which the Debt Warrant Agent may be
merged or converted, or any corporation with which the Debt Warrant Agent
may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Debt Warrant Agent shall be a
party, or any corporation to which the Debt Warrant Agent shall sell or
otherwise transfer all or substantially all of its assets and business,
shall be the successor Debt Warrant Agent under this Agreement without
the execution or
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filing of any paper, the giving of any notice to Holders or any further
act on the part of the parties hereto, provided that such corporation be
qualified as aforesaid.
5.5 OFFICE. The Company will maintain an office or agency where
Debt Warrant Certificates may be presented for exchange[, transfer] or exercise.
The office initially designated for this purpose shall be the corporate trust
office of the Debt Warrant Agent at ____________________________.
ARTICLE 6.
MISCELLANEOUS
6.1 CONSOLIDATION OR MERGER OF THE COMPANY AND CONVEYANCE OR
TRANSFER PERMITTED SUBJECT TO CERTAIN CONDITIONS. To the extent permitted in
the Indenture, the Company may consolidate with or merge into another
corporation or other entity, or convey or transfer all or substantially all of
its properties and assets to any other corporation or other entity.
6.2 RIGHTS AND DUTIES OF SUCCESSOR CORPORATION. In case of any
such consolidation, merger, conveyance or transfer and upon any assumption of
the duties and obligations of the Company by the successor corporation, such
successor corporation shall succeed to and be substituted for the Company, with
the same effect as if it had been named herein, and the Company shall be
relieved of any further obligation under this Agreement and the Debt Warrants.
Such successor corporation thereupon may cause to be signed, and may issue
either in its own name or in the name of the Company, any or all of the
Underlying Debt Securities issuable pursuant to the terms hereof. All the
Underlying Debt Securities so issued shall in all respects have the same legal
rank and benefit under the Indenture as the Underlying Debt Securities
theretofore or thereafter issued in accordance with the terms of this Agreement
and the Indenture. In case of any such consolidation, merger, conveyance or
transfer, such changes in phraseology and form (but not in substance) may be
made in the Underlying Debt Securities thereafter to be issued as may be
appropriate.
6.3 SUPPLEMENTS AND AMENDMENTS.
(a) The Company and the Debt Warrant Agent from time to time
may supplement or amend this Agreement without the approval of any Holder
in order to cure any ambiguity, to correct or supplement any provision
contained herein that may be defective or inconsistent with any other
provision herein, or to make any other provision in regard to matters or
questions arising hereunder that the Company and the Debt Warrant Agent
may deem necessary or desirable and that shall not adversely affect the
interests of the
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Holders. Every Holder of Debt Warrants, whether issued before or after
any such supplement or amendment, shall be bound thereby. Promptly after
the effectiveness of any supplement or amendment that affects the
interests of the Holders, the Company shall give notice thereof, as
provided in Section 5.3(d) hereof, to the Holders affected thereby,
setting forth, in general terms, the substance of such supplement or
amendment.
(b) The Company and the Debt Warrant Agent may modify or amend
this Agreement and the Debt Warrant Certificates with the consent of the
Holders of not fewer than a majority in number of the then outstanding
unexercised Debt Warrants affected by such modification or amendment, for
any purpose; provided, however, that no such modification or amendment
that shortens the period of time during which the Debt Warrants may be
exercised, or otherwise materially and adversely affects the exercise
rights of the Holders or reduces the percentage of Holders of outstanding
Debt Warrants the consent of which is required for modification or
amendment of this Agreement or the Debt Warrants, may be made without the
consent of each Holder affected thereby.
6.4 NOTICES AND DEMANDS TO THE COMPANY AND DEBT WARRANT AGENT. If
the Debt Warrant Agent shall receive any notice or demand addressed to the
Company by a Holder pursuant to the provisions of this Agreement or a Debt
Warrant Certificate (other than notices relating to the exchange[, transfer] or
exercise of Debt Warrants), the Debt Warrant Agent shall promptly forward such
notice or demand to the Company.
6.5 ADDRESSES FOR NOTICES. Any communications from the Company to
the Debt Warrant Agent with respect to this Agreement shall be directed to
_______________, Attention: ________________, and any communications from the
Debt Warrant Agent to the Company with respect to this Agreement shall be
directed to Northrop Grumman Corporation, 1840 Century Park East, Los Angeles,
California 90067, Attention: ____________, with a copy to the Secretary (or
such other address as shall be specified in writing by the Debt Warrant Agent or
by the Company).
6.6 GOVERNING LAW. This Agreement and the Debt Warrants shall be
governed by and construed in accordance with the laws of the State of New York
applicable to contracts made and to be performed entirely within such state.
6.7 DELIVERY OF PROSPECTUS. The Company will furnish to the Debt
Warrant Agent sufficient copies of a prospectus or prospectuses relating to the
Underlying Debt Securities deliverable upon exercise of any outstanding Debt
Warrants (each
-16-
a "Prospectus"), and the Debt Warrant Agent agrees to deliver to the Holder of a
Debt Warrant, prior to or concurrently with the Delivery of the Underlying Debt
Securities issued upon the exercise thereof, a copy of the Prospectus relating
to such Underlying Debt Securities.
6.8 GOVERNMENTAL APPROVALS. The Company will take such action as
may be necessary to obtain and keep effective any and all permits, consents and
approvals of governmental agencies and authorities, and will make all filings
under federal and state securities laws (including, without limitations, the
maintenance of the effectiveness of a registration statement in respect of the
Underlying Debt Securities under the Securities Act of 1933), as may be or
become requisite in connection with the issuance, sale, transfer and delivery of
Debt Warrants and Debt Warrant Certificates, the exercise of Debt Warrants and
the issuance, sale and delivery of Underlying Debt Securities issued upon
exercise of Debt Warrants.
6.9 PERSONS HAVING RIGHTS UNDER DEBT WARRANT AGREEMENT. Nothing in
this Agreement, expressed or implied, and nothing that may be inferred from any
of the provisions hereof, is intended or shall be construed to confer upon or
give to any person or corporation other than the Company, the Debt Warrant Agent
and the Holders any right, remedy or claim under or by reason of this Agreement
or any covenant, condition, stipulation, promise or agreement herein; and all
covenants, conditions, stipulations, promises and agreements herein shall be for
the sole and exclusive benefit of the Company, the Debt Warrant Agent and their
respective successors and the Holders.
6.10 HEADINGS. The descriptive headings of the several Articles and
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
6.11 COUNTERPARTS. This Agreement may be executed in one or more
counterparts and, when a counterpart has been executed by each party hereto, all
such counterparts taken together shall constitute one and the same agreement.
6.12 INSPECTION OF AGREEMENT. A copy of this Agreement shall be
available during business hours at the office of the Debt Warrant Agent for
inspection by any Holder. The Debt Warrant Agent may require such Holder to
submit its Debt
-17-
Warrant Certificate for inspection prior to making such copy available.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed, all as of the day and year first above written.
NORTHROP GRUMMAN CORPORATION
By ___________________________________
___________________________________
[Printed Name and Title]
Attest:
Name:______________________
Title:____________________
______________________________________
[Name of Debt Warrant Agent]
By ___________________________________
___________________________________
[Printed Name and Title]
Attest:
Name:______________________
Title:____________________
-18-
EXHIBIT 4-8
-----------
ALTERNATIVES REPRESENTED BY BRACKETED OR BLANK SECTIONS HEREIN
SHALL BE DETERMINED IN CONFORMITY WITH THE APPLICABLE
PROSPECTUS SUPPLEMENT OR SUPPLEMENTS
EQUITY WARRANT AGREEMENT
dated as of ______________, ____
FOR
WARRANTS TO PURCHASE
[UP TO _________ SHARES OF COMMON STOCK AND/OR PREFERRED STOCK]
EXPIRING ____________, ____
between
NORTHROP GRUMMAN CORPORATION
and
(NAME OF EQUITY WARRANT AGENT), as
Equity Warrant Agent
TABLE OF CONTENTS
Page
----
ARTICLE 1.
ISSUANCE OF EQUITY WARRANTS AND EXECUTION AND DELIVERY OF EQUITY WARRANT
CERTIFICATES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Issuance of Equity Warrants . . . . . . . . . . . . . . . . . . 1
1.2 Form and Execution of Equity Warrant Certificates . . . . . . . 2
1.3 Issuance and Delivery of Equity Warrant Certificates . . . . . 3
1.4 Temporary Equity Warrant Certificates . . . . . . . . . . . . . 4
1.5 Payment of Taxes . . . . . . . . . . . . . . . . . . . . . . . 4
1.6 "Holder" . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
ARTICLE 2.
DURATION AND EXERCISE OF EQUITY WARRANTS . . . . . . . . . . . . . . . . . 5
2.1 Duration of Equity Warrants . . . . . . . . . . . . . . . . . . 5
2.2 Exercise of Equity Warrants . . . . . . . . . . . . . . . . . . 5
2.3 Equity Warrant Adjustments . . . . . . . . . . . . . . . . . . 7
ARTICLE 3.
OTHER PROVISIONS RELATING TO RIGHTS OF HOLDERS OF EQUITY WARRANTS . . . . . 7
3.1 No Rights as Holder of Equity Securities Conferred by Equity
Warrants or Equity Warrant Certificates . . . . . . . . . . . . 7
3.2 Lost, Stolen, Destroyed or Mutilated Equity Warrant
Certificates . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.3 Holders of Equity Warrants May Enforce Rights . . . . . . . . . 8
3.4 Merger, Consolidation, Sale, Transfer or Conveyance . . . . . . 8
3.5 Treatment of Holders of Equity Warrant Certificates . . . . . . 9
ARTICLE 4.
EXCHANGE AND TRANSFER OF EQUITY WARRANTS . . . . . . . . . . . . . . . . . 10
4.1 Equity Warrant Register; Exchange and Transfer of Equity
Warrants . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.2 Treatment of Holders of Equity Warrants . . . . . . . . . . . . 11
4.3 Cancellation of Equity Warrant Certificates . . . . . . . . . . 11
-i-
ARTICLE 5.
CONCERNING THE EQUITY WARRANT AGENT . . . . . . . . . . . . . . . . . . . . 11
5.1 Equity Warrant Agent . . . . . . . . . . . . . . . . . . . . . 11
5.2 Conditions of Equity Warrant Agent's Obligations . . . . . . . 12
5.3 Compliance With Applicable Laws . . . . . . . . . . . . . . . . 14
5.4 Resignation and Appointment of Successor . . . . . . . . . . . 14
ARTICLE 6.
MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
6.1 Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
6.2 Notices and Demands to the Company and Equity Warrant Agent . . 16
6.3 Addresses For Notices . . . . . . . . . . . . . . . . . . . . . 17
6.4 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . 17
6.5 Governmental Approvals . . . . . . . . . . . . . . . . . . . . 17
6.6 Persons Having Rights Under Equity Warrant Agreement . . . . . 17
6.7 Delivery of Prospectus . . . . . . . . . . . . . . . . . . . . 17
6.8 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
6.9 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . 18
6.10 Inspection of Agreement . . . . . . . . . . . . . . . . . . . . 18
-ii-
THIS EQUITY WARRANT AGREEMENT, dated as of ___________________,
between Northrop Grumman Corporation, a Delaware corporation (the "Company"),
and ____________________, a ________________ organized and existing under the
laws of ______________________, as warrant agent (the "Equity Warrant Agent").
WHEREAS, the Company proposes to sell [title of preferred stock,
common stock or other securities being offered (the "Offered Securities") with]
certificates evidencing one or more warrants (the "Equity Warrants" or,
individually, an "Equity Warrant") representing the right to purchase shares of
the common stock, par value $1.00 per share, of the Company (the "Common Stock")
and/or preferred stock, par value $1.00 per share, of the Company (the
"Preferred Stock"), such warrant certificates and other warrant certificates
issued pursuant to this Agreement being herein called the "Equity Warrant
Certificates"; the Common Stock and the Preferred Stock being referred to
herein, individually or together, as the "Equity Securities", and
WHEREAS, the Company has duly authorized the execution and delivery
of this Equity Warrant Agreement to provide for the issuance of Equity Warrants
to be exercisable at such times and for such prices, and to have such other
provisions, as shall be fixed as hereinafter provided.
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements herein contained, the parties hereto agree as follows:
ARTICLE 1.
ISSUANCE OF EQUITY WARRANTS AND EXECUTION AND
DELIVERY OF EQUITY WARRANT CERTIFICATES
1.1 ISSUANCE OF EQUITY WARRANTS. Equity Warrants may be issued
from time to time, together with or separately from Offered Securities. Prior
to the issuance of any Equity Warrants, there shall be established by or
pursuant to a resolution or resolutions duly adopted by the Company's Board of
Directors or by any committee thereof duly authorized to act with respect
thereto (a "Board Resolution"):
(a) The title and aggregate number of such Equity Warrants.
(b) The offering price of such Equity Warrant.
(c) The number of shares of Equity Securities that may be purchased
upon exercise of such Equity Warrants; the price, or the manner of
determining the price (the "Equity Warrant Price") at which such shares
of Equity Securities
-1-
may be purchased upon exercise of the Equity Warrants; and any minimum
number of such Equity Warrants that are exercisable at any one time.
(d) The currency or currencies, including composite currencies or
currency units, in which the price of such Equity Warrants may be
payable.
(e) The time or times at which, or period or periods during which,
such Equity Warrants may be exercised and the final date on which such
Equity Warrants may be exercised (the "Expiration Date").
(f) The terms of any right to redeem such Equity Warrants.
(g) Whether such Equity Warrants are to be issued with any Offered
Securities and, if so, the number and terms of any such Offered
Securities and the number of Equity Warrants to be issued with each
Offered Security.
(h) The date, if any, on and after which the Equity Warrants and
the Offered Securities will be separately transferable (the "Detachable
Date").
(i) The terms of any right of the Company to accelerate the Equity
Warrants upon the occurrence of certain events.
(j) Any other terms of such Equity Warrants not inconsistent with
the provisions of this Agreement.
1.2 FORM AND EXECUTION OF EQUITY WARRANT CERTIFICATES.
(a) The Equity Warrants shall be evidenced by warrant certificates
(the "Equity Warrant Certificates"), which shall be in registered form
and substantially in such form or forms as shall be established by or
pursuant to a Board Resolution. Each Equity Warrant Certificate,
whenever issued, shall be dated the date it is countersigned by the
Equity Warrant Agent and may have such letters, numbers or other marks of
identification and such legends or endorsements printed, lithographed or
engraved thereon as are not inconsistent with the provisions of this
Agreement, or as may be required to comply with any law or with any rule
or regulation made pursuant thereto or with any rule or regulation of any
securities exchange on which the Equity Warrants may be listed, or to
conform to usage, as the officer of the Company executing the same may
approve (his execution thereof to be conclusive evidence or such
approval). Each Equity Warrant Certificate shall evidence one or more
Equity Warrants.
-2-
(b) The Equity Warrant Certificates shall be signed in the name and
on behalf of the Company by its Chairman, its President or a Vice
President (any reference to a Vice President of the Company herein shall
be deemed to include any Vice President of the Company whether or not
designated by a number or a word or words added before or after the title
"Vice President") under its corporate seal, and attested by its Secretary
or an Assistant Secretary. Such signatures may be manual or facsimile
signatures of the present or any future holder of any such office and may
be imprinted or otherwise reproduced on the Equity Warrant Certificates.
The seal of the Company may be in the form of a facsimile thereof and may
be impressed, affixed, imprinted or otherwise reproduced on the Equity
Warrant Certificates.
(c) No Equity Warrant Certificate shall be valid for any purpose,
and no Equity Warrant evidenced thereby shall be deemed issued or
exercisable, until such Equity Warrant Certificate has been countersigned
by the manual or facsimile signature of the Equity Warrant Agent. Such
signature by the Equity Warrant Agent upon any Equity Warrant Certificate
executed by the Company shall be conclusive evidence that the Equity
Warrant Certificate so countersigned has been duly issued hereunder.
(d) In case any officer of the Company who shall have signed any
Equity Warrant Certificate either manually or by facsimile signature
shall cease to be such officer before the Equity Warrant Certificate so
signed shall have been countersigned and delivered by the Equity Warrant
Agent, such Equity Warrant Certificate nevertheless may be countersigned
and delivered as though the person who signed such Equity Warrant
Certificate had not ceased to be such officer of the Company; and any
Equity Warrant Certificate may be signed on behalf of the Company by such
person as, at the actual date of the execution of such Equity Warrant
Certificate, shall be the proper officer of the Company, although at the
date of the execution of this Agreement such person was not such an
officer.
1.3 ISSUANCE AND DELIVERY OF EQUITY WARRANT CERTIFICATES. At any
time and from time to time after the execution and delivery of this Agreement,
the Company may deliver Equity Warrant Certificates executed by the Company to
the Equity Warrant Agent for countersignature. Except as provided in the
following sentence, the Equity Warrant Agent shall thereupon countersign and
deliver such Equity Warrant Certificates to or upon the written request of the
Company. Subsequent to the original issuance of an Equity Warrant Certificate
evidencing Equity Warrants, the Equity Warrant Agent shall countersign a new
-3-
Equity Warrant Certificate evidencing such Equity Warrants only if such Equity
Warrant Certificate is issued in exchange or substitution for one or more
previously countersigned Equity Warrant Certificates evidencing such Equity
Warrants or in connection with their transfer, as hereinafter provided.
1.4 TEMPORARY EQUITY WARRANT CERTIFICATES. Pending the preparation
of definitive Equity Warrant Certificate, the Company may execute, and upon the
order of the Company the Equity Warrant Agent shall countersign and deliver,
temporary Equity Warrant Certificates that are printed, lithographed,
typewritten, mimeographed or otherwise produced, substantially of the tenor of
the definitive Equity Warrant Certificates in lieu of which they are issued and
with such appropriate insertions, omissions, substitutions and other variations
as the officer executing such Equity Warrant Certificates may determine, as
evidenced by his execution of such Equity Warrant Certificates.
If temporary Equity Warrant Certificates are issued, the Company
will cause definitive Equity Warrant Certificates to be prepared without
unreasonable delay. After the preparation of definitive Equity Warrant
Certificates, the temporary Equity Warrant Certificates shall be exchangeable
for definitive Equity Warrant Certificates upon surrender of the temporary
Equity Warrant Certificates at the corporate trust office of the Equity Warrant
Agent [or ], without charge to the Holder, as defined in Section 1.6
hereof. Upon surrender for cancellation of any one or more temporary Equity
Warrant Certificates, the Company shall execute and the Equity Warrant Agent
shall countersign and deliver in exchange therefor definitive Equity Warrant
Certificates representing the same aggregate number of Equity Warrants. Until
so exchanged, the temporary Equity Warrant Certificates shall in all respects be
entitled to the same benefits under this Agreement as definitive Equity Warrant
Certificates.
1.5 PAYMENT OF TAXES. The Company will pay all stamp and other
duties, if any, to which this Agreement or the original issuance of the Equity
Warrants or Equity Warrant Certificates may be subject under the laws of the
United States of America or any state or locality.
1.6 "HOLDER". The term "Holder" or "Holders" as used herein with
reference to an Equity Warrant certificate shall mean the person or persons in
whose name such Equity Warrant Certificate shall then be registered as set forth
in the Equity Warrant Register to be maintained by the Equity Warrant Agent
pursuant to Section 4.1 for that purpose or, in the case of Equity Warrants that
are issued with Offered Securities and cannot then be transferred separately
therefrom, [IF REGISTERED OFFERED SECURITIES AND EQUITY WARRANTS THAT ARE NOT
THEN DETACHABLE -- the person or persons in whose name the related
-4-
Offered Securities shall be registered as set forth in the security register for
such Offered Securities, prior to the Detachable Date.] [IF REGISTERED OFFERED
SECURITIES AND EQUITY WARRANTS THAT ARE NOT THEN DETACHABLE -- the Company will,
or will cause the security registrar of any such Offered Securities to, make
available to the Equity Warrant Agent at all times (including on and after the
Detachable Date, in the case of Equity Warrants originally issued with Offered
Securities and not subsequently transferred separately therefrom] such
information as to holders of Offered Securities with Equity Warrants as may be
necessary to keep the Warrant Register up to date.]
ARTICLE 2.
DURATION AND EXERCISE OF EQUITY WARRANTS
2.1 DURATION OF EQUITY WARRANTS. Each Equity Warrant may be
exercised at the time or times, or during the period or periods, provided by or
pursuant to the Board Resolution relating thereto and specified in the Equity
Warrant Certificate evidencing such Equity Warrant. Each Equity Warrant not
exercised at or before 5:00 P.M., New York City time, on its Expiration Date
shall become void, and all rights of the Holder of such Equity Warrant
thereunder and under this Agreement shall cease, provided that the Company
reserves the right to, and may, in its sole discretion, at any time and from
time to time, at such time or times as the Company so determines, extend the
expiration date of the Equity Warrants for such periods of time as it chooses;
further provided that in no case may the expiration date of the Equity Warrants
(as extended) be extended beyond five years from the expiration date set forth
above. Whenever the expiration date of the Equity Warrants is so extended, the
Company shall at least 20 days prior to the then expiration date cause to be
mailed to the Equity Warrant Agent and the registered Holders of the Equity
Warrants in accordance with the provisions of Section 5.3 hereof a notice
stating that the expiration date has been extended and setting forth the new
expiration date. No adjustment shall be made for any dividends on any Equity
Securities issuable upon exercise of any Equity Warrant.
2.2 EXERCISE OF EQUITY WARRANTS.
(a) The Holder of an Equity Warrant shall have the right, at its
option, to exercise such Equity Warrant and, subject to subsection (e) of
this Section 2.2, purchase the number of shares of Equity Securities
provided for therein at the time or times or during the period or periods
referred to in Section 2.1 and specified in the Equity Warrant
Certificate evidencing such Equity Warrant. If specified in the Equity
Warrant Certificate, no fewer than
-5-
the minimum number of Equity Warrants may be exercised by or on behalf of
any one Holder at any one time. Except as may be provided in an Equity
Warrant Certificate, an Equity Warrant may be exercised by completing the
form of election to purchase set forth on the reverse side of the Equity
Warrant Certificate, by duly executing the same, and by delivering the
same, together with payment in full of the Equity Warrant Price, in
lawful money of the [United States of America,] in cash or by certified
or official bank check or by bank wire transfer, to the Equity Warrant
Agent. Except as may be provided in an Equity Warrant Certificate, the
date on which such Equity Warrant Certificate and payment are received by
the Equity Warrant Agent as aforesaid shall be deemed to be the date on
which the Equity Warrant is exercised and the relevant shares of Equity
Securities are issued.
(b) Upon the exercise of an Equity Warrant, the Company shall, as
soon as practicable, issue, to or upon the order of the Holder of such
Equity Warrant, the shares of Equity Securities to which such Holder is
entitled, registered, in the case of shares of Equity Securities in
registered form, in such name or names as may be directed by such Holder.
(c) The Equity Warrant Agent shall deposit all funds received by it
in payment of the Equity Warrant Price for Equity Warrants in the amount
of the Company maintained with it for such purpose and shall advise the
Company by telephone by 5:00 P.M., New York City time, of each day on
which a payment of the Equity Warrant Price for Equity Warrants is
received of the amount so deposited in its account. The Equity Warrant
Agent shall promptly confirm such telephone advice in writing to the
Company.
(d) The Equity Warrant Agent shall, from time to time, as promptly
as practicable, advise the Company of (i) the number of Equity Warrants
of each title exercised as provided herein, (ii) the instructions of each
Holder of such Equity Warrants with respect to delivery of the Equity
Securities issued upon exercise of such Equity Warrants to which such
Holder is entitled upon such exercise, and (iii) such other information
as the Company or such Trustee shall reasonably require. Such advice may
be given by telephone to be promptly confirmed in writing.
(e) The Company will pay all documentary stamp taxes attributable
to the initial issuance of Equity Warrants; provided, however, that the
holder, and not the Company, shall be required to pay any stamp or other
tax or other governmental charge that may be imposed in connection with
any transfer involved in the issuance of the Equity
-6-
Securities; and in the event that any such transfer is involved, the
Company shall not be required to issue any Equity Securities (and the
holder's purchase of the shares of Equity Securities issued upon the
exercise of such holder's Equity Warrant shall not be deemed to have been
consummated) until such tax or other charge shall have been paid or it
has been established to the Company's satisfaction that no such tax or
other charge is due.
2.3 EQUITY WARRANT ADJUSTMENTS. The terms and conditions, if any,
on which the exercise price of and/or the number of shares of Equity Securities
covered by an Equity Warrant are subject to adjustments will be set forth in the
Prospectus Supplement relating thereto. Such terms will include the adjustment
mechanism for the exercise price of, and the number of shares of Equity
Securities covered by, an Equity Warrant, the events requiring such adjustments,
the events upon which the Company may, in lieu of making such adjustments, make
proper provisions so that the Holder, upon exercise of such holder's Equity
Warrant, would be treated as if such Holder had been a holder of the Equity
Securities received upon such exercise, prior to the occurrence of such events,
and provisions affecting exercise of the Equity Warrants in the event of certain
events affecting the Equity Securities.
ARTICLE 3.
OTHER PROVISIONS RELATING TO RIGHTS OF HOLDERS
OF EQUITY WARRANTS
3.1 NO RIGHTS AS HOLDER OF EQUITY SECURITIES CONFERRED BY EQUITY
WARRANTS OR EQUITY WARRANT CERTIFICATES. No Equity Warrant or Equity Warrant
Certificate shall entitle the Holder to any of the rights of a holder of Equity
Securities, including, without limitation, voting, dividend or liquidation
rights.
3.2 LOST, STOLEN, DESTROYED OR MUTILATED EQUITY WARRANT
CERTIFICATES. Upon receipt by the Company and the Equity Warrant Agent of
evidence reasonably satisfactory to them of the ownership of and the loss,
theft, destruction or mutilation of any Equity Warrant Certificate and of
indemnity (other than in connection with any mutilated Equity Warrant
certificates surrendered to the Equity Warrant Agent for cancellation)
reasonably satisfactory to them, the Company shall execute, and the Equity
Warrant Agent shall countersign and deliver, in exchange for or in lieu of each
lost, stolen, destroyed or mutilated Equity Warrant Certificate, a new Equity
Warrant Certificate evidencing a like number of Equity Warrants of the same
title. Upon the issuance of a new Equity Warrant Certificate under this
Section, the Company may require the payment of a sum sufficient to cover any
stamp or other tax or other governmental charge that may be imposed in
connection
-7-
therewith and any other expenses (including the fees and expenses of the Equity
Warrant Agent) in connection therewith. Every substitute Equity Warrant
Certificate executed and delivered pursuant to this Section in lieu of any lost,
stolen or destroyed Equity Warrant Certificate shall represent a contractual
obligation of the Company, whether or not such lost, stolen or destroyed Equity
Warrant Certificate shall be at any time enforceable by anyone, and shall be
entitled to the benefits of this Agreement equally and proportionately with any
and all other Equity Warrant Certificates, duly executed and delivered
hereunder, evidencing Equity Warrants of the same title. The provisions of this
Section are exclusive and shall preclude (to the extent lawful) all other rights
and remedies with respect to the replacement of lost, stolen, destroyed or
mutilated Equity Warrant Certificates.
3.3 HOLDERS OF EQUITY WARRANTS MAY ENFORCE RIGHTS. Notwithstanding
any of the provisions of this Agreement, any Holder may, without the consent of
the Equity Warrant Agent, enforce and may institute and maintain any suit,
action or proceeding against the Company suitable to enforce, or otherwise in
respect of his right to exercise his Equity Warrants as provided in the Equity
Warrants and in this Agreement.
3.4 MERGER, CONSOLIDATION, SALE, TRANSFER OR CONVEYANCE.
(a) In case any of the following shall occur while any Equity
Warrants are outstanding: (i) any reclassification or change of the
outstanding shares of Equity Securities; or (ii) any consolidation or
merger to which the Company is party (other than a consolidation or a
merger in which the Company is the continuing corporation and which does
not result in any reclassification of, or change in, the outstanding
shares of Equity Securities issuable upon exercise of the Equity
Warrants); or (iii) any sale, conveyance or lease to another corporation
of the property of the Company as an entirety or substantially as an
entirety; then the Company, or such successor or purchasing corporation,
as the case may be, shall make appropriate provision by amendment of this
Agreement or otherwise so that the Holders of the Equity Warrants then
outstanding shall have the right at any time thereafter, upon exercise of
such Equity Warrants, to purchase the kind and amount of shares of stock
and other securities and property receivable upon such a
reclassification, change, consolidation, merger, sale, conveyance or
lease as would be received by a holder of the number of shares of Equity
Securities issuable upon exercise of such Equity Warrant immediately
prior to such reclassification, change, consolidation, merger, sale,
conveyance or lease, and, in the case of a consolidation, merger, sale,
conveyance or lease, the Company shall
-8-
thereupon be relieved of any further obligation hereunder or under the
Equity Warrants, and the Company as the predecessor corporation may
thereupon or at any time thereafter be dissolved, wound up or liquidated.
Such successor or assuming corporation thereupon may cause to be signed,
and may issue either in its own name or in the name of the Company, any
or all of the Equity Warrants issuable hereunder which theretofore shall
not have been signed by the Company, and may execute and deliver Equity
Securities in its own name, in fulfillment of its obligations to deliver
Equity Securities upon exercise of the Equity Warrants. All the Equity
Warrants so issued shall in all respects have the same legal rank and
benefit under this Agreement as the Equity Warrants theretofore or
thereafter issued in accordance with the terms of this Agreement as
though all of such Equity Warrants had been issued at the date of the
execution hereof. In any case of any such reclassification, change,
consolidation, merger, conveyance, transfer or lease, such changes in
phraseology and form (but not in substance) may be made in the Equity
Warrants thereafter to be issued as may be appropriate.
(b) The Equity Warrant Agent may receive a written opinion of legal
counsel as conclusive evidence that any such merger, consolidation, sale,
transfer, conveyance or other disposition of substantially all of the
assets of the Company complies with the provisions of this Section 3.2.
3.5 TREATMENT OF HOLDERS OF EQUITY WARRANT CERTIFICATES.
(a) In the event that the Equity Warrants are offered together
with, and, prior to the Detachable Date, are not detachable to, offered
Securities, the Company, the Equity Warrant Agent and all other persons
may, prior to such Detachable Date, treat the holder of the Offered
Security as the Holder of the Equity Warrant Certificates initially
attached thereto for any purpose and as the person entitled to exercise
the rights represented by the Equity Warrants evidenced by such Equity
Warrant Certificates, any notice to the contrary notwithstanding. After
the Detachable Date and prior to due presentment of an Equity Warrant
Certificate for registration of transfer, the Company and the Equity
Warrant Agent may treat the registered Holder of an Equity Warrant
Certificate as the absolute Holder thereof for any purpose and as the
person entitled to exercise the rights represented by the Equity Warrants
evidenced thereby, any notice to the contrary notwithstanding.
(b) In all other cases, the Company and the Equity Warrant
Agent may treat the registered Holder of an
-9-
Equity Warrant Certificate as the absolute Holder thereof for any purpose
and as the person entitled to exercise the rights represented by the
Equity Warrants evidenced thereby, any notice to the contrary
notwithstanding.
ARTICLE 4.
EXCHANGE AND TRANSFER OF EQUITY WARRANTS
4.1 EQUITY WARRANT REGISTER; EXCHANGE AND TRANSFER OF EQUITY
WARRANTS. The Equity Warrant Agent shall maintain, at its corporate trust
office [or at _________________], a register (the "Equity Warrant Register") in
which, upon the issuance of Equity Warrants, or on and after the Detachable Date
in the case of Equity Warrants not separately transferable prior thereto, and,
subject to such reasonable regulations as the Equity Warrant Agent may
prescribe, it shall register Equity Warrant Certificates and exchanges and
transfers thereof. The Equity Warrant Register shall be in written form or in
any other form capable of being converted into written form within a reasonable
time.
Except as provided in the following sentence, upon surrender at the
corporate trust office of the Equity Warrant Agent [or at
________________________], Equity Warrant Certificates may be exchanged for one
or more other Equity Warrant Certificates evidencing the same aggregate number
of Equity Warrants of the same title, or may be transferred in whole or in part.
An Equity Warrant Certificate evidencing Equity Warrants that are not then
transferable separately from the Offered Security with which they were issued
may be exchanged or transferred prior to its Detachable Date only together with
such Offered Security and only for the purpose of effecting, or in conjunction
with, an exchange or transfer of such Offered Security; and on or prior to the
Detachable Date, each exchange or transfer of such Offered Security on the
Security Register of the Offered Securities shall operate also to exchange or
transfer the related Equity Warrants. A transfer shall be registered upon
surrender of an Equity Warrant Certificate to the Equity Warrant Agent at its
corporate trust office [or at _______________] for transfer, properly endorsed
or accompanied by appropriate instruments of transfer and written instructions
for transfer, all in form satisfactory to the Company and the Equity Warrant
Agent. Whenever an Equity Warrant Certificate is surrendered for exchange or
transfer, the Equity Warrant Agent shall countersign and deliver to the person
or person entitled thereto one or more Equity Warrant Certificates duly executed
by the Company, as so requested. The Equity Warrant Agent shall not be required
to effect any exchange or transfer which will result in the issuance of an
Equity Warrant Certificate evidencing a fraction of an Equity Warrant. All
Equity Warrant Certificates issued upon any exchange or transfer of an Equity
Warrant Certificate shall be
-10-
the valid obligations of the Company, evidencing the same obligations, and
entitled to the same benefits under this Agreement, as the Equity Warrant
Certificate surrendered for such exchange or transfer.
No service charge shall be made for any exchange or transfer of
Equity Warrants, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
with any such exchange or transfer, in accordance with Section 2.2(f) hereof.
4.2 TREATMENT OF HOLDERS OF EQUITY WARRANTS. Every Holder of an
Equity Warrant, by accepting the Equity Warrant Certificate evidencing the same,
consents and agrees with the Company, the Equity Warrant Agent and with every
other Holder of Equity Warrants of the same title that the Company and the
Equity Warrant Agent may treat the holder of an Equity Warrant Certificate (or
if the Equity Warrant Certificate is not then detachable, the Holder of the
related Offered Security) as the absolute owner of such Equity Warrant for all
purposes and as the person entitled to exercise the rights represented by such
Equity Warrant, any notice to the contrary notwithstanding.
4.3 CANCELLATION OF EQUITY WARRANT CERTIFICATES. In the event that
the Company shall purchase, redeem or otherwise acquire any Equity Warrants
after the issuance thereof, the Equity Warrant Certificate or Certificates
evidencing such Equity Warrants shall thereupon be delivered to the Equity
Warrant Agent and be cancelled by it. The Equity Warrant Agent shall also
cancel any Equity Warrant Certificate (including any mutilated Equity Warrant
Certificate) delivered to it for exercise, in whole or in part, or for exchange
or transfer. Equity Warrant Certificates so cancelled shall be delivered by the
Equity Warrant Agent to the Company from time to time, or disposed of in
accordance with the instructions of the Company.
ARTICLE 5.
CONCERNING THE EQUITY WARRANT AGENT
5.1 EQUITY WARRANT AGENT. The Company hereby appoints
______________________ as Equity Warrant Agent of the Company in respect of the
Equity Warrants upon the terms and subject to the conditions set forth herein;
and _______________ hereby accepts such appointment. The Equity Warrant Agent
shall have the powers and authority granted to and conferred upon it in the
Equity Warrant Certificates and hereby and such further powers and authority
acceptable to it to act on behalf of the Company as the Company may hereafter
grant to or confer upon it. All of the terms and provisions with respect to
such powers and authority contained in the Equity Warrant Certificates are
subject to and governed by the terms and provisions hereof.
-11-
5.2 CONDITIONS OF EQUITY WARRANT AGENT'S OBLIGATIONS. The Equity
Warrant Agent accepts its obligations set forth herein upon the terms and
conditions hereof, including the following, to all of which the Company agrees
and to all of which the rights hereunder of the Holders shall be subject:
(a) COMPENSATION AND INDEMNIFICATION. The Company agrees to
promptly pay the Equity Warrant Agent the compensation to be set forth in
an exhibit hereto and to reimburse the Equity Warrant Agent for
reasonable out-of-pocket expenses (including counsel fees) incurred by
the Equity Warrant Agent in connection with the services rendered
hereunder by the Equity Warrant Agent. The Company also agrees to
indemnify the Equity Warrant Agent for, and to hold it harmless against,
any loss, liability or expenses (including the reasonable costs and
expense of defending against any claim of liability) incurred without
negligence or bad faith on the part of the Equity Warrant Agent arising
our of or in connection with its appointment as Equity Warrant Agent
hereunder.
(b) AGENT FOR THE COMPANY. In acting under this Agreement and in
connection with any Equity Warrant Certificate, the Equity Warrant Agent
is acting solely as agent of the Company and does not assume any
obligation or relationship of agency or trust for or with any Holder.
(c) COUNSEL. The Equity Warrant Agent may consult with counsel
satisfactory to it, and the advice of such counsel shall be full and
complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in accordance with
the advice of such counsel.
(d) DOCUMENTS. The Equity Warrant Agent shall be protected and
shall incur no liability for or in respect of any action taken, suffered
or omitted by it in reliance upon any notice, direction, consent,
certification, affidavit, statement or other paper or document reasonably
believed by it to be genuine and to have been presented or signed by the
proper parties.
(e) OFFICER'S CERTIFICATE. Whenever in the performance of its
duties hereunder the Equity Warrant Agent shall reasonably deem it
necessary that any fact or matter be proved or established by the Company
prior to taking, suffering or omitting any action hereunder, the Equity
Warrant Agent may (unless other evidence in respect thereof be herein
specifically prescribed), in the absence of bad faith on its part, rely
upon a certificate signed by the Chairman, the President, a Vice
President, the Treasurer,
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and Assistant Treasurer, the Secretary or an Assistant Secretary of the
Company (an "Officer's Certificate") delivered by the Company to the
Equity Warrant Agent.
(f) ACTIONS THROUGH AGENTS. The Equity Warrant Agent may execute
and exercise any of the rights or powers hereby vested in it or perform
any duty hereunder either itself or by or through its attorneys or
agents, and the Equity Warrant Agent shall not be answerable or account-
able for any act, default, neglect or misconduct or any such attorney or
agent or for any loss to the Company resulting from such neglect or
misconduct; provided, however, that reasonable care shall have been
exercised in the selection and continued employment of such attorneys and
agents.
(g) CERTAIN TRANSACTIONS. The Equity Warrant Agent, and any
officer, director or employee thereof, may become the owner of, or
acquire interest in, any Equity Warrant, with the same rights that he,
she or it would have if it were not the Equity Warrant Agent, and, to the
extent permitted by applicable law, he, she or it may engage or be
interested in any financial or other transaction with the Company and may
serve on, or as depositary, trustee or agent for, any committee or body
of holders of Debt Securities or other obligations of the Company as if
it were not the Equity Warrant Agent.
(h) NO LIABILITY FOR INTEREST. The Equity Warrant Agent shall not
be liable for interest on any monies at any time received by it pursuant
to any of the provisions of this Agreement or of the Equity Warrant
Certificates, except as otherwise agreed with the Company.
(i) NO LIABILITY FOR INVALIDITY. The Equity Warrant Agent shall
incur no liability with respect to the validity of this Agreement (except
as to the due execution hereof by the Equity Warrant Agent) or any Equity
Warrant Certificate (except as to the countersignature thereof by the
Equity Warrant Agent).
(j) NO RESPONSIBILITY FOR COMPANY REPRESENTATIONS. The Equity
Warrant Agent shall not be responsible for any of the recitals or
representations contained herein (except as to such statements or
recitals as describe the Equity Warrant Agent or action taken or to be
taken by it) or in any Equity Warrant Certificate (except as to the
Equity Warrant Agent's countersignature on such Equity Warrant
Certificate), all of which recitals and representations are made solely
by the Company.
(k) NO IMPLIED OBLIGATIONS. The Equity Warrant Agent shall be
obligated to perform only such duties as are
-13-
specifically set forth herein, and no other duties or obligations shall
be implied. The Equity Warrant Agent shall not be under any obligation
to take any action hereunder that may subject it to any expense or
liability, the payment of which within a reasonable time is not, in its
reasonable opinion, assured to it. The Equity Warrant Agent shall not be
accountable or under any duty or responsibility for the use by the
Company of any Equity Warrant Certificate countersigned by the Equity
Warrant Agent and delivered by it to the Company pursuant to this
Agreement or for the Application by the Company of the proceeds of the
issuance or exercise of Equity Warrants. The Equity Warrant Agent shall
have no duty or responsibility in case of any default by the Company in
the performance of its covenants or agreements contained herein or in any
Equity Warrant Certificate or in case of the receipt of any written
demand from a Holder with respect to such default, including, without
limiting the generality of the foregoing, any duty or responsibility to
initiate or attempt to initiate any proceedings at law or otherwise or,
except as provided in Section 6.2 hereof, to make any demand upon the
Company.
5.3 COMPLIANCE WITH APPLICABLE LAWS. The Equity Warrant Agent
agrees to comply with all applicable federal and state laws imposing obligations
on it in respect of the services rendered by it under this Equity Warrant
Agreement and in connection with the Equity Warrants, including (but not limited
to) the provisions of United States federal income tax laws regarding
information reporting and backup withholding. The Equity Warrant Agent
expressly assumes all liability for its failure to comply with any such laws
imposing obligations on it, including (but not limited to) any liability for
failure to comply with any applicable provisions of United States federal income
tax laws regarding information reporting and backup withholding.
5.4 RESIGNATION AND APPOINTMENT OF SUCCESSOR.
(a) The Company agrees, for the benefit of the Holders of the
Equity Warrants, that there shall at all times be an Equity Warrant Agent
hereunder until all the Equity Warrants are no longer exercisable.
(b) The Equity Warrant Agent may at any time resign as such agent
by giving written notice to the Company of such intention on its part,
specifying the date on which its desired resignation shall become
effective, subject to the appointment of a successor Equity Warrant Agent
and acceptance of such appointment by such successor Equity Warrant
Agent, as hereinafter provided. The Equity Warrant Agent hereunder may
be removed at any time by the filing
-14-
with it of an instrument in writing signed by or on behalf of the Company
and specifying such removal and the date when it shall become effective.
Such resignation or removal shall take effect upon the appointment by the
Company, as hereinafter provided, of a successor Equity Warrant Agent
(which shall be a banking institution organized under the laws of the
United States of America, or one of the states thereof and having an
office or an agent's office in the Borough of Manhattan, the City of New
York) and the acceptance of such appointment by such successor Equity
Warrant Agent. In the event a successor Equity Warrant Agent has not
been appointed and has not accepted its duties within 90 days of the
Equity Warrant Agent's notice of resignation, the Equity Warrant Agent
may apply to any court of competent jurisdiction for the designation of a
successor Equity Warrant Agent. The obligation of the Company under
Section 5.2(a) shall continue to the extent set forth therein
notwithstanding the resignation or removal of the Equity Warrant Agent.
(c) In case at any time the Equity Warrant Agent shall resign, or
shall be removed, or shall become incapable of acting, or shall be
adjudged bankrupt or insolvent, or make an assignment for the benefit of
its creditors or consent to the appointment of a receiver or custodian of
all or any substantial part of its property, or shall admit in writing
its inability to pay or meet its debts as they mature, or if a receiver
or custodian of it or all or any substantial part of its property shall
be appointed, or if any public officer shall have taken charge or control
of the Equity Warrant Agent or of its property or affairs, for the
purpose of rehabilitation, conservation or liquidation, a successor
Equity Warrant Agent, qualified as aforesaid, shall be appointed by the
Company by an instrument in writing, filed with the successor Equity
Warrant Agent. Upon the appointment as aforesaid of a successor Equity
Warrant Agent and acceptance by the latter of such appointment, the
Equity Warrant Agent so superseded shall cease to be the Equity Warrant
Agent hereunder.
(d) Any successor Equity Warrant Agent appointed hereunder shall
execute, acknowledge and deliver to its predecessor and to the Company an
instrument accepting such appointment hereunder, and thereupon such
successor Equity Warrant Agent, without any further act, deed or
conveyance, shall become vested with all the authority, rights, powers,
trusts, immunities, duties and obligations of such predecessor with like
effect as if originally named as Equity Warrant Agent hereunder, and such
predecessor, upon payment of its charges and disbursements then unpaid,
shall thereupon become obligated to transfer, deliver and pay over, and
such successor Equity Warrant Agent shall be
-15-
entitled to receive all moneys, securities and other property on deposit
with or held by such predecessor, as Equity Warrant Agent hereunder.
(e) Any corporation into which the Equity Warrant Agent
hereunder may be merged or converted or any corporation with which the
Equity Warrant Agent may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Equity Warrant
Agent shall be a party, or any corporation to which the Equity Warrant
Agent shall sell or otherwise transfer all or substantially all of the
assets and business of the Equity Warrant Agent, provided that it shall
be qualified as aforesaid, shall be the successor Equity Warrant Agent
under this Agreement without the execution or filing of any paper or any
further act on the part of any of the parties hereto.
ARTICLE 6.
MISCELLANEOUS
6.1 AMENDMENT.
(a) This Agreement and the Equity Warrants may be amended by the
Company and the Equity Warrant Agent, without the consent of the Holders
of Equity Warrants, for the purpose of curing any ambiguity, or of
curing, correcting or supplementing any defective or inconsistent
provision contained herein or therein or in any other manner which the
Company may deem to be necessary or desirable and which will not
materially and adversely affect the interests of the Holders of the
Equity Warrants.
(b) The Company and the Equity Warrant Agent may modify or amend
this Agreement and the Equity Warrant Certificates with the consent of
the Holders of not fewer than a majority in number of the then
outstanding unexercised Equity Warrants affected by such modification or
amendment, for any purpose; provided, however, that no such modification
or amendment that shortens the period of time during which the Equity
Warrants may be exercised, or otherwise materially and adversely affects
the exercise rights of the holders or reduces the percentage of holders
of outstanding Equity Warrants the consent of which is required for
modification or amendment of this agreement or the Equity Warrants, may
be made without the consent of each holder affected thereby.
6.2 NOTICES AND DEMANDS TO THE COMPANY AND EQUITY WARRANT AGENT.
If the Equity Warrant Agent shall receive any notice or demand addressed to the
Company by any Holder pursuant
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to the provisions of the Equity Warrant Certificate, the Equity Warrant Agent
shall promptly forward such notice or demand to the Company.
6.3 ADDRESSES FOR NOTICES. Any communications from the Company to
the Equity Warrant Agent with respect to this Agreement shall be addressed to
[name of Equity Warrant Agent], [_____________________, New York, New York
______], Attention: [Corporate Trust Department]; any communications from the
Equity Warrant Agent to the Company with respect to this Agreement shall be
addressed to Northrop Grumman Corporation, 1840 Century Park East, Los Angeles,
California 90067, Attention: ___________________ (with a copy to the Secretary);
or such other addresses as shall be specified in writing by the Equity Warrant
Agent or by the Company.
6.4 GOVERNING LAW. This Agreement and the Equity Warrants shall be
governed by the laws of the State of New York applicable to contracts made and
to be performed entirely within such state.
6.5 GOVERNMENTAL APPROVALS. The Company will from time to time use
all reasonable efforts to obtain and keep effective any and all permits,
consents and approvals of governmental agencies and authorities and the national
securities exchange on which the Equity Warrants may be listed or authorized for
trading from time to time and filings under the United States federal and state
laws, which may be or become requisite in connection with the issuance, sale,
trading, transfer or delivery of the Equity Warrants, and the exercise of the
Equity Warrants.
6.6 PERSONS HAVING RIGHTS UNDER EQUITY WARRANT AGREEMENT. Nothing
in this Agreement expressed or implied and nothing that my be inferred from any
of the provisions hereof is intended, or shall be construed, to confer upon, or
give to, any person or corporation other than the Company, the Equity Warrant
Agent and the Holders any right, remedy or claim under or by reason of this
Agreement or of any covenant, condition, stipulation, promise or agreement
hereof; and all covenants, conditions, stipulations, promises and agreements in
this Agreement contained shall be for the sole and exclusive benefit of the
Company and the Equity Warrant Agent and their successors and of the Holders of
Equity Warrant Certificates.
6.7 DELIVERY OF PROSPECTUS. The Company will furnish to the Equity
Warrant Agent sufficient copies of a prospectus of prospectuses relating to the
Equity Securities deliverable upon exercise of any outstanding Equity Warrants
(each a "Prospectus"), and the Equity Warrant Agent agrees to deliver to the
Holder of the Equity Warrant, prior to or concurrently with the delivery of the
Equity Securities issued upon the exercise
-17-
thereof, a copy of the Prospectus relating to such Equity Securities.
6.8 HEADINGS. The descriptive headings of the several Articles and
Sections and the Table of Contents of this Agreement are for convenience only
and shall not control or affect the meaning or construction of any of the
provisions hereof.
6.9 COUNTERPARTS. This Agreement may be executed by the parties
hereto in any number of counterparts, each of which when so executed and
delivered shall be deemed to be an original; but all such counterparts shall
together constitute but one and the same instrument.
6.10 INSPECTION OF AGREEMENT. A copy of this Agreement shall be
available at all reasonable times at the principal corporate trust office of the
Equity Warrant Agent, for inspection by the Holders of Equity Warrants.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed, all as of the day and year first above written.
NORTHROP GRUMMAN CORPORATION
By ___________________________________
___________________________________
[Printed Name and Title]
Attest:
Name:______________________
Title:____________________
______________________________________
[Name of Equity Warrant Agent]
By ___________________________________
___________________________________
[Printed Name and Title]
Attest:
Name:______________________
Title:____________________
-18-
EXHIBIT 4-10
FORM OF CERTIFICATE OF DESIGNATIONS
of
PREFERRED STOCK, SERIES _____
of
NORTHROP GRUMMAN CORPORATION
NORTHROP GRUMMAN CORPORATION, a corporation organized and existing
under the laws of the State of Delaware (herein referred to as the
"Corporation"), in accordance with the provisions of Section 151 of the General
Corporation Law of the State of Delaware, does hereby CERTIFY:
1. The Certificate of Incorporation, as amended, of the Corporation
fixes the total number of shares of all classes of capital stock which the
Corporation shall have the authority to issue at two hundred ten million
(210,000,000) shares, of which ten million (10,000,000) shares shall be shares
of preferred stock, $1.00 par value, and two hundred million (200,000,000)
shares shall be shares of common stock, $1.00 par value.
2. The Certificate of Incorporation, as amended, of the Corporation,
expressly grants to the Board of Directors of the Corporation authority to
provide for the issuance of the preferred stock in one or more series, with such
voting powers, full or limited, or without voting powers, and with such
designations, preferences and relative, participating, optional or other special
rights, and qualifications, limitations or restrictions thereof, as shall be
stated and expressed in the Certificate of Incorporation or any amendment
thereto, or in the resolution or resolutions providing for the issue of such
stock adopted by the Board of Directors.
[3.] [IF ANY SERIES OF PREFERRED STOCK HAS BEEN PREVIOUSLY
AUTHORIZED, INSERT - Pursuant to the authority conferred upon the Board of
Directors by the Certificate of Incorporation, as amended, of the Corporation,
the Board of Directors, by action duly taken on _______________ [and by action
of the ___________ committee duly taken on _______________,] authorized the
issuance of __________ (__________) shares of __________ Preferred Stock, Series
____, $1.00 par value].
[4.] Pursuant to the authority conferred upon the Board of Directors
by the Certificate of Incorporation, as amended, of the Corporation, [and the
authority conferred upon the __________ committee of the Board of Directors by
the resolutions adopted
-1-
by the Board of Directors on _______________,] the Board of Directors, by
actions duly taken on _______________, [and the __________ committee of the
Board of Directors, by actions duly taken on __________] adopted resolutions
that compositely provide for a series of the preferred stock as follows:
"RESOLVED, that an issue of a series of the preferred stock, $1.00 par
value, of the Corporation (such preferred stock being herein referred to as
"Preferred Stock", which term shall include any additional shares of preferred
stock of the same class heretofore or hereafter authorized to be issued by the
Corporation), consisting of _______________ (__________) shares is hereby
provided for, and the voting power, designation, preference and relative,
participating, optional or other special rights, and qualifications, limitations
yor restrictions thereof, are fixed hereby as follows:
1. DESIGNATION. The designation of such series shall be
______________________________ (hereinafter referred to as the "Series _____
Preferred Stock") and the number of shares constituting such series is
____________________ (_____). Shares of Series _____ Preferred Stock shall have
a stated value of $__________ per share. The number of authorized shares of
Series ___ Preferred Stock may be reduced by further resolution duly adopted by
the Board of Directors of the Corporation [or by a duly authorized committee of
the Board of Directors] and by the filing of a certificate pursuant to the
provisions of the General Corporation Law of the State of Delaware stating that
such reduction has been so authorized, but the number of authorized shares of
Series ____ Preferred Stock shall not be increased.
2. DIVIDENDS. Quarterly Dividend Periods shall commence on
__________ 1, __________ 1, __________ 1 and __________ 1 in each year and shall
end on and include the day next preceding the first day of the next Quarterly
Dividend Period. Such dividends shall be [cumulative/non-cumulative] from the
respective dates of original issue of shares of Series ____ Stock and shall be
payable, when and as declared by the Board of Directors, on __________,
__________, __________ and __________ of each year, commencing
____________________. Each such dividend shall be paid to the holders of record
of shares of Series ____ Preferred Stock as they appear on the stock register of
the Corporation on such record date, not exceeding 30 days preceding the payment
date thereof, as shall be fixed by the Board of Directors of the Corporation.
Dividends on account of arrears for any past Dividend Periods may be declared
and paid at any time, without reference to any regular dividend payment date, to
holders of record on such date, not exceeding 45 days preceding the payment date
thereof, as may be fixed by the Board of Directors of the Corporation. If there
shall be outstanding shares of any other series of Preferred Stock ranking on a
parity as to dividends with the Series ____ Preferred Stock, the
-2-
Corporation, in making any dividend payment on account of arrears on the
Series ____ Preferred Stock or such other series of Preferred Stock, shall make
payments ratably upon all outstanding shares of Series ____ Preferred Stock and
such other series of Preferred Stock in proportion to the respective amounts of
dividends in arrears upon all such outstanding shares of Series ____ Preferred
Stock and such other series of Preferred Stock to the date of such dividend
payment. No interest, or sum of money in lieu of interest, shall be payable in
respect of any dividend payments or payments which may be in arrears.
The amount of dividends per share payable for each Quarterly Dividend
Period shall be computed by dividing the Dividend Rate (as defined below) for
such Dividend Period by four and applying such rate against the stated value per
share of the Series ____ Preferred Stock. Dividends payable on the Series ____
Preferred Stock for any period other than a full Quarterly Dividend Period shall
be computed on the basis of a 360-day year of twelve 30-day months.
[IF PREFERRED STOCK HAS ADJUSTABLE DIVIDENDS, INSERT THE FOLLOWING --
3. DIVIDEND RATE. The dividend rates on the shares of Series ____
Preferred Stock shall be: (i) for the period (the "Initial Dividend Period")
from the respective dates of original issue thereof to and including __________,
_____% per annum and (ii) for each Quarterly Dividend Period thereafter a rate
per annum of the stated value thereof equal to the Applicable Rate (as defined
below).
Except as provided below in this paragraph, the "Applicable Rate" for
any Quarterly Dividend Period shall be (a) _____% less than (b) the highest of
the Treasury Bill Rate, the Ten Year Constant Maturity Rate or the Thirty Year
Constant Maturity Rate (each as hereinafter defined) for such Dividend Period.
If the Corporation determines in good faith that for any reason one or more of
such rates cannot be determined for any Dividend Period, then the Applicable
Rate for such Dividend Period shall be _____% less than the higher of whichever
of such rates can be so determined. If the Corporation determines in good faith
that none of such rates can be determined for any Dividend Period, then the
Applicable Rate in effect for the preceding Dividend Period shall be continued
for such Dividend Period. Anything herein to the contrary notwithstanding, the
Applicable Rate for any Quarterly Dividend Period shall in no event be less than
_____% per annum or greater than _____% per annum.
Except as provided below in this paragraph, the "Treasury Bill Rate"
for each Quarterly Dividend Period shall be the arithmetic average of the two
weekly per annum market
-3-
discount rates (or the one weekly per annum market discount rate, if only one
such rate shall be published during the relevant Calendar Period as provided
below) for three-month U.S. Treasury bills, as published weekly by the Federal
Reserve Board during the Calendar Period immediately prior to the ten calendar
days immediately preceding the __________, __________, __________ and _________,
as the case may be, prior to the Quarterly Dividend Period for which the
dividend rate on the Series ____ Preferred Stock is being determined. If the
Federal Reserve Board does not publish such a weekly per annum market discount
rate during such Calendar Period, then the Treasury Bill Rate for such Dividend
Period shall be the arithmetic average of the two weekly per annum market
discount rates (or the one weekly per annum market discount rate, if only one
such rate shall be published during the relevant Calendar Period as provided
below) for three-month U.S. Treasury bills, as published weekly during such
Calendar Period by any Federal Reserve Bank or by any U.S. Government department
or agency selected by the Corporation. If a per annum market discount rate for
three-month U.S. Treasury bills shall not be published by the Federal Reserve
Board or by any Federal Reserve Bank or by any U.S. Government department or
agency during such Calendar Period, then the Treasury Bill Rate for such
Dividend Period shall be the arithmetic average of the two weekly per annum
market discount rates (or the one weekly per annum market discount rate, if only
one such rate shall be published during the relevant Calendar Period as provided
below) for all the U.S. Treasury bills then having maturities of not less than
80 nor more than 100 days, as finally published during such Calendar Period by
the Federal Reserve Board or, if the Federal Reserve Board shall not publish
such rates, by any Federal Reserve Bank or by any U.S. Government department or
agency selected by the Corporation. If the Corporation determines in good faith
that for any reason no such U.S. Treasury bill rates are published as provided
above during such Calendar Period, then the Treasury Bill Rate for such Dividend
Period shall be the arithmetic average of the per annum market discount rates
based upon the closing bids during such Calendar Period for each of the issues
of marketable non-interest bearing U.S. Treasury securities with a maturity of
not less than 80 or more than 100 days from the date of each such quotation, as
chosen and quoted daily for each business day in New York City (or less
frequently if daily quotations shall not be generally available) to the
Corporation by at least three recognized U.S. Government securities dealers
selected by the Corporation. If the Corporation determines in good faith that
for any reason the Corporation cannot determine the Treasury Bill Rate for any
Quarterly Dividend Period as provided above in this paragraph, the Treasury Bill
Rate for such Dividend Period shall be the arithmetic average of the per annum
market discount rates based upon the closing bids during such Calendar Period
for each of the issues of marketable interest-bearing U.S. Treasury securities
with a maturity of not less than 80 nor more than 100 days from
-4-
the date of each such quotation, as chosen and quoted daily for each business
day in New York City (or less frequently if daily quotations shall not be
generally available) to the Corporation by at least three recognized U.S.
Government securities dealers selected by the Corporation.
Except as provided below in this paragraph, the "Ten Year Constant
Maturity Rate" for each Quarterly Dividend Period shall be the arithmetic
average of the two weekly per annum Ten Year Average Yields (or the one weekly
per annum Ten Year Average yield, if only one such yield shall be published
during the relevant Calendar Period as provided below), as published weekly by
the Federal Reserve Board during the Calendar Period immediately prior to the
ten calendar days immediately preceding the __________, __________, __________
and __________, as the case may be, prior to the Quarterly Dividend Period for
which the dividend rate on the Series ____ Preferred Stock is being determined.
If the Federal Reserve Board does not publish such a weekly per annum Ten Year
Average Yield during such Calendar Period, then the Ten Year Constant Maturity
Rate for such Dividend Period shall be the arithmetic average of the two weekly
per annum Ten Year Average Yields (or the one weekly per annum Ten Year Average
Yield, if only one such Yield shall be published during the relevant Calendar
Period as provided below), as published weekly during such Calendar Period by
any Federal Reserve Bank or by any U.S. Government department or agency elected
by the Corporation. If a per annum Ten Year Average Yield shall not be
published by the Federal Reserve Board or by any Federal Reserve Bank or by any
U.S. Government department or agency during such Calendar Period, then the Ten
Year Constant Maturity Rate for such Dividend Period shall be the arithmetic
average of the two weekly per annum average yields to maturity (or the one
weekly average yield to maturity, if only one such yield shall be published
during the relevant Calendar Period as provided below) for all of the actively
traded marketable U.S. Treasury fixed interest rate securities (other than
Special Securities) then having maturities of not less than eight nor more than
twelve years, as finally published during such Calendar Period by the Federal
Reserve Board or, if the Federal Reserve Board shall not publish such yields, by
any Federal Reserve Bank or by any U.S. Government department or agency selected
by the Corporation. If the Corporation determines in good faith that for any
reason the Corporation cannot determine the Ten Year Constant Maturity Rate for
any Quarterly Dividend Period as provided above in this paragraph, then the Ten
Year Constant Maturity Rate for such Dividend Period shall be the arithmetic
average of the per annum average yields to maturity based upon the closing bids
during such Calendar Period for each of the issues of actively traded marketable
U.S. Treasury fixed interest rate securities (other than Special Securities)
with a final maturity date not less than eight nor more than twelve years from
the date of each such quotation, as chosen and quoted daily for
-5-
each business day in New York City (or less frequently if daily quotations shall
not be generally available) to the Corporation by at least three recognized U.S.
Government securities dealers selected by the Corporation.
Except as provided below in this paragraph, the "Thirty Year Constant
Maturity Rate" for each Quarterly Dividend Period shall be the arithmetic
average of the two weekly per annum Thirty Year Average Yields (or the one
weekly per annum Thirty Year Average Yield, if only one such Yield shall be
published during the relevant Calendar Period as provided below), as published
weekly by the Federal Reserve Board during the Calendar Period immediately prior
to the ten calendar days immediately preceding the __________, __________,
__________ and __________, as the case may be, prior to the Quarterly Dividend
Period for which the dividend rate on the Series ____ Preferred Stock is being
determined. If the Federal Reserve Board does not publish such a weekly per
annum Thirty Year Average Yield during such Calendar Period then the Thirty Year
Constant Maturity Rate for such Dividend Period shall be the arithmetic average
of the two weekly per annum Thirty Year Average Yields (or the one weekly per
annum Thirty Year Average Yield, if only one such Yield shall be published
during the relevant Calendar Period as provided below), as published weekly
during such Calendar Period by any Federal Reserve Bank or by any U.S.
Government department or agency selected by the Corporation. If a per annum
Thirty Year Average Yield shall not be published by the Federal Reserve Board or
by any Federal Reserve Bank or by any U.S. Government department or agency
during such Calendar Period, then the Thirty Year Constant Maturity Rate for
such Dividend Period shall be the arithmetic average of the two weekly per annum
average yields to maturity (or the one weekly average yield to maturity, if only
one such yield shall be published during the relevant Calendar Period as
provided below) for all of the actively traded marketable U.S. Treasury fixed
interest rate securities (other than Special Securities) then having maturities
of not less than twenty-eight nor more than thirty-two years, as finally
published during such Calendar Period by the Federal Reserve Board or, if the
Federal Reserve Board shall not publish such yields, by any Federal Reserve Bank
or by any U.S. Government department or agency selected by the Corporation. If
the Corporation determines in good faith that for any reason the Corporation
cannot determine the Thirty Year Constant Maturity Rate for any Quarterly
Dividend Period as provided above in this paragraph, then the Thirty Year
Constant Maturity Rate for such Dividend Period shall be the arithmetic average
of the per annum average yields to maturity based upon the closing bids during
such Calendar Period for each of the issues of actively traded marketable U.S.
Treasury fixed interest rate securities (other than Special Securities) with a
final maturity date not less than twenty-eight nor more than thirty-two years
from the date of each such quotation, as chosen and quoted daily for each
business day
-6-
in New York City (or less frequently if daily quotations shall not be generally
available) to the Corporation by at least three recognized U.S. Government
security dealers selected by the Corporation.
The Treasury Bill Rate, the Ten Year Constant Maturity Rate and the
Thirty Year Constant Maturity Rate shall each be rounded to the nearest five
hundredths of a percentage point.
The Applicable Rate with respect to each Quarterly Dividend Period
will be calculated as promptly as practicable by the Corporation according to
the appropriate method described herein. The mathematical accuracy of each such
calculation will be confirmed in writing by independent accountants of
recognized standing. The Corporation will cause each Applicable Rate to be
published in a newspaper of general circulation in New York City and San
Francisco prior to the commencement of the new Quarterly Dividend Period to
which it applies and will cause notice of such Applicable Rate to be enclosed
with the dividend payment checks next mailed to the holder of the Series ____
Preferred Stock.
For purposes of this Section, the term
(i) "Calendar Period" shall mean 14 calendar days;
(ii) "Special Securities" shall mean securities which can, at the option of
the holder, be surrendered at face value in payment of any Federal
estate tax or which provide tax benefits to the holder and are priced
to reflect such tax benefits or which were originally issued at a deep
or substantial discount;
(iii) "Ten Year Average yield" shall mean the average yield to maturity for
actively traded marketable U.S. Treasury fixed interest rate
securities (adjusted to constant maturities of ten years); and
(iv) "Thirty Year Average Yield" shall mean the average yield to maturity
for actively traded marketable U.S. Treasury fixed interest rate
securities (adjusted to constant maturities of thirty years).]
[IF PREFERRED STOCK HAS A FIXED DIVIDEND RATE WITH A CONTINGENT DIVIDEND RATE
ADJUSTMENT, INSERT THE FOLLOWING --
3. DIVIDEND RATE. (a) Definitions:
(1) "Contingent Dividend Disqualification Period" shall mean any four
consecutive fiscal quarters in which aggregate Earnings Per Share, on a fully
diluted basis, are greater than $__________.
-7-
(2) "Contingent Dividend Qualification Period" shall mean any four
consecutive fiscal quarters [(other than any fiscal quarters occurring within
one year after a Contingent Dividend Disqualification Period)] commencing on or
after __________, in which aggregate Earnings Per Share, on a fully diluted
basis, are less than $__________.
(3) "Earnings Per Share" shall mean earnings per common share as
reported in the Corporation's financial statements as publicly announced on the
respective Reporting Dates; provided, however, that if for any Dividend Period
earnings per share as reported in the Corporation's financial statements filed
with the Securities and Exchange Commission ("SEC") in its Quarterly Reports on
Form 10-Q and (for the fourth quarter) in its Annual Report on Form 10-K (or
their successor forms), as the case may be, including any amendments thereto
filed with the SEC, vary from the earnings per share announced on the Reporting
Date, and, as a result, the dividend rate must be adjusted up, such adjustment
shall be made both retroactively and prospectively, and any deficiency as a
result of such a retroactive adjustment shall be paid on the next Quarterly
Payment Date that is not less than _____ days after the date of filing such
amendment with the SEC and such deficiency shall be paid to the persons entitled
to receive any dividends otherwise payable on that Quarterly Payment Date. If,
as a result of an amendment to Earnings Per Share filed with the SEC, a dividend
rate must be adjusted down, such adjusted dividend rate shall become effective
on the first Quarterly Dividend Period commencing after the amended earnings per
share has been filed with the SEC, and there shall be no retroactive adjustment.
(4) "Quarterly Payment Dates" shall mean __________, __________,
__________ and __________ of each year.
(5) "Reporting Date" shall mean the date on which the Corporation
first publicly announces its results of operations for an immediately preceding
fiscal quarter, but in no event later than the date on which the Corporation's
Quarterly Report on Form 10-Q or Annual Report on Form 10-K must be filed with
the Securities and Exchange Commission with respect to the relevant fiscal
period.
(b) Rate. The dividend rate on the shares of Series ____ Preferred
Stock for the period (the "Initial Dividend Period") from the respective dates
of original issue thereof to and including __________, shall be _____% per
annum. The dividend rate for each Quarterly Dividend Period thereafter shall be
_____% per annum; provided, however, that in the event of a Contingent Dividend
Qualification Period, the dividend rate shall be changed to _____% per annum for
the first Quarterly Dividend Period during which the first Reporting Date after
the Contingent Dividend Qualification Period occurs. Such dividend rate shall
-8-
remain in effect thereafter; provided, that, if a Contingent Dividend
Disqualification Period thereafter occurs, the dividend rate shall again be
_____% per annum, beginning with the first Quarterly Dividend Period commencing
four fiscal quarters after the Contingent Dividend Disqualification Period. The
dividend rate shall continue to be adjusted upon the occurrence of any
subsequent Contingent Dividend Qualification Periods and Contingent Dividend
Disqualification Periods as set forth above.]
[IF THE PREFERRED STOCK HAS A FIXED DIVIDEND DATE, INSERT THE FOLLOWING --
3. DIVIDEND RATE. The Dividend Rate on the shares of Series ____
Preferred Stock for the period (the "Initial Dividend Period") from the
respective dates of original issue thereof to and including
____________________, and for each Quarterly Dividend Period thereafter shall be
_____% per annum.]
[IF THE PREFERRED STOCK IS REDEEMABLE AT A FIXED PRICE, INSERT THE FOLLOWING --
4. REDEMPTION. [(a)] The corporation, at its option, may redeem
shares of the Series ____ Preferred Stock, as a whole or in part, at any time or
from time to time, at a redemption price of $__________ per share plus accrued
and unpaid dividends thereon to the date fixed for redemption[; provided,
however, that no shares of Series ____ Preferred Stock shall be redeemed
hereunder prior to __________] [If the Series ____ Preferred Stock is
convertible, insert --, unless the closing price of the Common Stock on the New
York Stock Exchange shall have equaled or exceeded _____% of the conversion
price then in effect for at least 20 out of 30 consecutive trading days ending
within five trading days prior to the date notice of redemption is given. The
"conversion price" shall be the quotient of $_____ divided by the then effective
conversion rate]].
IF THE PREFERRED STOCK IS REDEEMABLE BY THE CORPORATION AT A VARIABLE PRICE,
INSERT THE FOLLOWING --
4. REDEMPTION. [(a)] The Corporation, at its option, may redeem
shares of the Series ____ Preferred Stock, as a whole or in part, at any time or
from time to time, at a redemption price as set forth below, plus accrued and
unpaid dividends thereon to the date fixed for redemption:
Date of Redemption Redemption Price per Share
------------------ --------------------------
On or after __________, ____________________
but prior to __________.
On or after __________, ____________________
but prior to __________.
-9-
On or after __________. ____________________
Notwithstanding the foregoing, no shares of Series ____ Preferred Stock shall be
redeemed hereunder prior to __________ [if the Series ____ Preferred Stock is
convertible, insert --unless the closing price of the Common Stock on the New
York Stock Exchange shall have equaled or exceeded __________% of the conversion
price then in effect for at least 20 out of 30 consecutive trading days ending
within five trading days prior to the date notice of redemption is given]]. In
the event of the redemption of less than all of the outstanding shares of
Series ____ Preferred Stock under this paragraph 4(a), the Corporation shall
effect such redemption ratably based on the full number of shares of Series ____
Preferred Stock held by each holder thereof. In the alternative, at the
discretion of the Company, the shares to be so redeemed may be determined by a
draw of lots or such other equitable means as shall be determined from time to
time.
If the Corporation shall redeem shares of Series ____ Preferred Stock
pursuant to this subparagraph (a), notice of such redemption shall be given by
publication (not less than 30 nor more than 90 days prior to the redemption
date) at least once in a newspaper printed in the English language and of
general circulation in the City and County of Los Angeles, State of California
(upon any secular day of the week) stating such election on the part of the
Corporation and that on the redemption date there will become due and payable
upon each of the shares to be redeemed, at the place or places specified in such
notice, the applicable redemption price therein specified. A similar notice
shall be mailed by first class mail, postage prepaid, not less than 30 nor more
than 90 days prior to the redemption date, to each holder of record of the
shares to be redeemed, at such holder's address as the same appears on the stock
register of the Corporation. Each such notice shall state: (a) the redemption
date; (b) the number of shares of Series ____ Preferred Stock to be redeemed
and, if less than all the shares held by such holder are to be redeemed, the
number of such shares to be redeemed from such holder; (c) the redemption price;
(d) the place or places where certificates for such shares are to be surrendered
for payment of the redemption price; and (e) that dividends on the shares to be
redeemed will cease to accrue on such redemption date. Notice having been
mailed as aforesaid, from and after the redemption date (unless default shall be
made by the Corporation in providing money for the payment of the redemption
price) dividends on the shares of the Series ____ Preferred Stock so called for
redemption shall cease to accrue, and said shares shall no longer be deemed to
be outstanding, and all rights of the holders thereof as stockholders of the
Corporation (except the right to receive from the Corporation the redemption
price) shall cease. Upon surrender in accordance with such notice of the
certificates for
-10-
any shares so redeemed (properly endorsed or assigned for transfer, if the Board
of Directors of the Corporation shall so require and the notice shall so state),
such shares shall be redeemed by the Corporation at the redemption price
aforesaid. If less than all the outstanding shares of Series ____ Preferred
Stock are to be redeemed, shares to be redeemed shall be selected by the
Corporation from outstanding shares of Series ____ Preferred Stock not
previously called for redemption by lot or pro rata (as nearly as may be) in any
method determined by the Corporation in its sole discretion to be equitable.
[IF THE PREFERRED STOCK IS SUBJECT TO MANDATORY REDEMPTION AND A SINKING FUND,
INSERT THE FOLLOWING--]
(b) MANDATORY REDEMPTION; SINKING FUND.
(1) SINKING FUND. So long as any Series ____ Preferred Stock
shall be outstanding, the Corporation shall, on each of the dates set forth in
the following schedule ("Sinking Fund Payment Dates") set aside as and for a
sinking fund for the redemption of the Series ____ Preferred Stock (the "Sinking
Fund"), subject to the subsequent deferral provided for in paragraph 4(b)(2)
hereof, in cash out of any funds legally available therefor, a sum equal to the
product of (i) the applicable Mandatory-Redemption Price (as hereinafter
defined) multiplied by (ii) the number of shares of Series ____ Preferred Stock
set forth opposite such Sinking Fund Payment Date:
Number of Shares of
Sinking Fund Series ____ Preferred
Payment Date Stock to be Redeemed
- ------------ ----------------------
Notwithstanding the foregoing, in no event shall the Corporation on any Sinking
Fund Payment Date be obligated to set aside in cash an amount with respect to
the Series ____ Preferred Stock greater than a sum equal to the product of the
Mandatory-Redemption Price for such series and the number of the then
outstanding shares of such series.
(2) DEFERRAL. Notwithstanding paragraph 4(b)(1) above, each
Mandatory-Redemption Date (as hereinafter defined) for Series ____ Preferred
Stock may be deferred for a period of one year by the holders of the then
outstanding shares of such series if the holders of at least 66-2/3% of shares
of such series consent thereto in writing at least ten days prior to such date.
The right to defer a Mandatory-Redemption Date may be exercised any number of
times in the manner set forth herein.
-11-
(3) MANDATORY-REDEMPTION PRICE. The Mandatory-Redemption Price
for each share of Series ____ Preferred Stock shall be an amount in cash equal
to $__________, plus all accrued and unpaid dividends thereon, whether or not
earned or declared, to and including the date fixed for redemption.
(4) SINKING FUND REQUIREMENT CUMULATIVE. If on any Sinking
Fund Payment Date the funds of the Corporation legally available therefor
shall be insufficient to discharge such Sinking Fund requirement in full,
funds to the extent legally available for such purpose shall be set aside for
the Sinking Fund. Such Sinking Fund requirements shall be cumulative, so that
if for any year or years such requirements shall not be fully discharged as
they accrue, funds legally available therefor, after such payment or provision
for dividends, for each year thereafter shall be applied thereto until such
requirements are fully discharged.
(5) USE OF SINKING FUND. Thirty days following each Sinking
Fund Payment Date (the "Mandatory-Redemption Date"), the cash in the Sinking
Fund shall be used to acquire by redemption, in the manner provided below, the
number of shares of Series ____ Preferred Stock specified opposite the Sinking
Fund Payment Date in the schedule appearing in paragraph 4(b)(1).
(6) PARTIAL REDEMPTION PRO RATA. In the event of the
redemption of only a part of the then outstanding Series ____ Preferred Stock
pursuant to this paragraph 4(b), the Corporation shall effect such redemption
ratably according to the full amount each holder of the Series ____ Preferred
Stock is otherwise then entitled to receive.
(7) MANDATORY-REDEMPTION NOTICE. In addition to the required
notice by publication, not less than 30 days nor more than 90 days prior to the
Mandatory-Redemption Date, written notice (the "Mandatory-Redemption Notice"),
shall be mailed, postage prepaid, to each holder of record of the Series ____
Preferred Stock to be redeemed at his post office address last shown on the
records of the Corporation. Such Mandatory-Redemption Notice shall state:
(i) Whether all or less than all of the outstanding shares of Series ____
Preferred Stock are to be redeemed and the total number of shares
being redeemed;
(ii) The number of shares of Series ____ Preferred Stock held by the holder
that the Corporation intends to redeem;
(iii) The Mandatory-Redemption Date and Mandatory-Redemption Price;
-12-
[(iv) The date upon which the holder's conversion rights (as hereinafter
described) as to such shares terminate;]
(v) That the holder is to surrender to the Corporation in the manner and
at the price designated, his certificate or certificates representing
the shares of Series ____Preferred Stock to be redeemed; and
(vi) That, with the written consent of the holders of _____% of the then
outstanding shares of such series, the Mandatory-Redemption Date for
such series may be deferred for a period of one year.
(8) SURRENDER OF CERTIFICATES; PAYMENT. On or before the
Mandatory-Redemption Date, each holder of shares of Series ____ Preferred Stock
to be redeemed [unless such holder has exercised his right to convert the shares
as provided in Section 6 hereof,] shall surrender the certificate or
certificates representing such shares to the Corporation, in the manner and at
the place designated in the Mandatory-Redemption Notice, and thereupon the
Mandatory-Redemption Price for such shares shall be payable to the order of the
person whose name appears on such certificate or certificates as the owner
thereof, and each surrendered certificate shall be cancelled and retired. In
the event less than all of the shares represented by such certificate are
redeemed, a new certificate representing the unredeemed shares shall be issued
forthwith.
(9) RIGHTS SUBSEQUENT TO MANDATORY REDEMPTION. If the
Mandatory-Redemption Notice shall have been duly given, and if on the
Mandatory-Redemption Date the Mandatory-Redemption Price is either paid or made
available for payment through the deposit arrangement specified in
subparagraph (10) below, then notwithstanding that the certificates evidencing
any of the shares of Series ____ Preferred Stock so called for redemption shall
not have been surrendered, the dividends with respect to such shares shall cease
to accrue after the Mandatory-Redemption Date and all rights with respect to
such shares shall forthwith after the Mandatory-Redemption Date terminate,
except only the right of the holders to receive the Mandatory-Redemption Price
without interest upon surrender of their certificate or certificates thereof.
(10) DEPOSIT OF FUNDS. On or prior to the Mandatory-Redemption
Date, the Corporation shall deposit with any bank or trust company in either Los
Angeles, California, or New York, New York, having a capital and surplus of at
least $50,000,000 as a trust fund, a sum equal to the aggregate
Mandatory-Redemption Price of all shares of Series ____ Preferred Stock called
for redemption and not yet redeemed or converted, with irrevocable instructions
and authority to the bank or trust
-13-
company to pay, on and after the Mandatory-Redemption Date, the
Mandatory-Redemption Price to the respective holders upon the surrender of their
share certificates. From and after the date of such deposit (but not prior to
the Mandatory-Redemption Date), the shares so called for redemption shall be
redeemed. The deposit shall constitute full payment of the shares to their
holders, and from and after the Mandatory-Redemption Date the shares shall be
deemed to be no longer outstanding, and the holders thereof shall cease to be
shareholders with respect to such shares and shall have no rights with respect
thereto except the rights to receive from the bank or trust company payment of
the Mandatory-Redemption Price of the shares without interest, upon surrender of
their certificates therefor. Any funds so deposited and unclaimed at the end of
one year from the Mandatory-Redemption Date shall be released or repaid to the
Corporation, after which the holders of shares called for redemption shall be
entitled to receive payment of the Mandatory-Redemption Price only from the
Corporation.]
[IF THE PREFERRED STOCK IS REDEEMABLE AT OPTION OF HOLDER, INSERT APPROPRIATE
LANGUAGE HERE]
[(c)] In no event shall the Corporation redeem or purchase any shares
of Series ____ Preferred Stock pursuant to this Section 4 unless full cumulative
dividends shall have been paid or declared and set apart for payment upon all
outstanding shares of Series ____ Preferred Stock for all past Dividend Periods,
and unless all matured obligations of the Corporation with respect to all
sinking funds, retirement funds or purchase funds for all series of Preferred
Stock then outstanding have been met.
5. SHARES TO BE RETIRED. All shares of Series ____ Preferred Stock
redeemed by the Corporation shall be retired and cancelled and shall be restored
to the status of authorized but unissued shares of Preferred Stock, without
designation as to series, and may thereafter be issued.
[IF THE PREFERRED STOCK IS NOT CONVERTIBLE, INSERT THE FOLLOWING --
6. CONVERSION OR EXCHANGE. The holders of shares of Series ____
Preferred Stock shall not have any rights herein to convert such shares into or
exchange such shares for shares of any other class or classes or of any other
series of any class or classes of capital stock of the Corporation.]
[IF THE PREFERRED STOCK IS CONVERTIBLE, INSERT THE FOLLOWING--]
6. CONVERSION RIGHTS. (a) The holder of any share or shares of
Series ____ Preferred Stock shall have the right,
-14-
at any time, to convert any shares of Series ____ Preferred Stock (except any
share of Series ____ Preferred Stock which shall have been called for redemption
pursuant to the provisions hereof, the conversion right with respect thereto
shall terminate on the close of business of the date fixed for redemption) into
fully paid and non-assessable shares of the common stock of the Corporation, at
a conversion rate of _____ (_____) shares of common stock for each share of
Series ____ Preferred Stock, subject to adjustment as hereinafter provided. The
conversion right herein granted shall be exercised by the surrender of a
certificate or certificates for Series ____ Preferred Stock to be so converted
at the office of any transfer agent for the Series ____ Preferred Stock, at any
time during its usual business hours, together with written notice that the
holder elects to convert the same, or a stated number of shares thereof, which
notice shall state the name or names (with addresses) in which the certificate
or certificates of common stock shall be issued. Every such notice of election
to convert shall constitute a contract between the holder of such Series ____
Preferred Stock and the Corporation, whereby such holder shall be deemed to
subscribe for the amount of common stock which he will be entitled to receive
upon such conversion and, in payment and satisfaction of such subscription (and
any cash adjustment to which he may be entitled), to surrender such Series ____
Preferred Stock and to release the Corporation from all obligation on the shares
to be converted and whereby the Corporation shall be deemed to agree that the
surrender of such shares and the extinguishment of obligation thereon shall
constitute full payment for the common stock so subscribed for and to be issued
upon such conversion.
(b) As promptly as practicable after the surrender for conversion of
any Series ____ Preferred Stock and the payment in cash of any amount required
by paragraph (i) of this Section 6, the Corporation shall deliver or cause to be
delivered to or upon the written order of the holder of such Series ____
Preferred Stock certificates representing the number of shares of common stock
issuable upon such conversion, issued in such name or names as such holder shall
have directed, together with cash in respect of any fractional interest in a
share of Common Stock issuable upon such conversion and, if only a part of such
Series ____ Preferred Stock is converted, a certificate or certificates for the
unconverted shares of Series ____ Preferred Stock. Such conversion shall be
deemed to have been made at the close of business on the day of surrender of the
Series ____ Preferred Stock for conversion, and the rights of the holder of
such stock as a Series ____ Preferred Stockholder, in respect of the stock
surrendered for conversion, shall cease at such time and the person or persons
in whose name or names the certificates for such shares are to be issued shall
be treated for all purposes as having become the record holder or holders of
common stock at such time and such conversion shall be at the conversion
-15-
rate in effect at such time; provided, however, that no such surrender on any
date when the stock transfer books of the Corporation shall be closed shall be
effective to constitute the person or persons entitled to receive the shares of
common stock upon such conversion as the record holder or holders of such shares
on such date, but such surrender shall be effective to constitute the person or
persons entitled to receive such shares of common stock as the record holder or
holders thereof for all purposes at the opening of business on the next
succeeding day on which such stock transfer books are open and such conversion
shall be at the conversion rate in effect at the opening of business on such
next succeeding day.
If the last day for the exercise of the conversion is a legal holiday
in the city in which the transfer agent to which shares are presented for
conversion is located, then such conversion right may be exercised (at the
conversion rate in effect on such last day) upon the next succeeding day not in
such city a legal holiday.
(c) No payment or adjustment shall be made upon any conversion in
respect of dividends accrued and unpaid on the Series ____ Preferred Stock to
the date of conversion or in respect of any dividends on the common stock issued
upon such conversion.
(d) The conversion rate shall be subject to adjustment from time to
time as follows:
(i) In case the Corporation shall at any time (A) pay a
dividend or make a distribution on shares of its common stock in shares of
its capital stock (whether shares of common stock or of capital stock of
any other class), (B) subdivide or reclassify its outstanding shares of
common stock into a greater number of securities (including shares of
common stock), or (C) combine or reclassify its outstanding shares of
common stock into a smaller number of shares (including shares of common
stock), the conversion rate in effect immediately prior thereto shall be
adjusted so that the holder of record of any shares of Series ____
Preferred Stock thereafter surrendered for conversion shall be entitled to
receive the number of shares of the Corporation which he would have owned
or have been entitled to receive after the happening of any of the events
described above had such shares of Series ____ Preferred Stock been
converted immediately prior to the happening of such event. An adjustment
made pursuant to this subparagraph (i) shall become effective immediately
after the record date in the case of a dividend and shall become effective
immediately after the effective date in the case of a subdivision or
combination. If, as a result of an adjustment made pursuant to this
subparagraph (i), the holder of any Series ____ Preferred Stock thereafter
-16-
converted shall become entitled to receive shares of two or more classes of
capital stock of the Corporation, the Board of Directors of the Corporation
(whose determination shall be conclusive) shall determine the allocation of
the adjusted conversion rate between or among shares of such classes of
capital stock.
In the event that at any time, as a result of an adjustment made pursuant
to this subparagraph (i), the holder of any Series ____ Preferred Stock
thereafter converted shall become entitled to receive any shares or other
securities of the Corporation other than shares of common stock, thereafter
the number of such other shares so received upon conversion of any
Series ____ Preferred Stock shall be subject to adjustment from time to
time in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to the shares of common stock contained in this
paragraph 6(d), and other provisions of this Section 6 with respect to the
shares of common stock shall apply on like term to any such other shares or
other securities.
(ii) In case the Corporation shall fix a record date for the
issuance of rights or warrants to all holders of its common stock entitling
them (for a period expiring within 45 days after such record date) to
subscribe for or purchase common stock (or securities convertible into
common stock) at a price per share (or a conversion price per share) less
than the current market price per share of common stock (as defined in
subparagraph (iv) below) at such record date, the conversion rate in effect
immediately prior thereto shall be adjusted so that the same shall equal
the rate determined by multiplying the conversion rate in effect
immediately prior to such record date by a fraction of which the numerator
shall be the number of shares of common stock outstanding on such record
date plus the number of additional shares of common stock offered for
subscription or purchase (or into which the convertible security or
securities so offered are initially convertible), and of which the
denominator shall be the number of shares of common stock outstanding on
such record date plus the number of shares which the aggregate offering
price of the total number of shares so offered (or the aggregate initial
conversion price of the convertible securities so offered) would purchase
at such current market price. Such adjustment shall be made successively
whenever such a record date is fixed, and shall become effective
immediately after such record date. In determining whether any rights or
warrants entitle the holders to subscribe for or purchase shares of common
stock at less than such current market price, and in determining the
aggregate offering price of such shares, there shall be taken into account
any consideration received by the Corporation for such rights
-17-
or warrants, the value of such consideration, if other than cash to be
determined by the Board of Directors of the Corporation. Common stock
owned by or held for the account of the Corporation or any majority owned
subsidiary shall not be deemed outstanding for the purpose of any
adjustment required under this subparagraph (ii).
(iii) In case the Corporation shall fix a record date for making
a distribution to all holders of its common stock of evidences of its
indebtedness or assets (excluding regular quarterly or other periodic or
recurring cash dividends or distributions and cash dividends or
distributions paid from retained earnings or referred to in
subparagraph (i) above) or rights or warrants to subscribe or purchase any
of the foregoing (excluding those referred to in subparagraph (ii) above),
or any other securities of the Corporation other than common stock, then in
each such case the conversion rate shall be adjusted so that the same shall
equal the rate determined by multiplying the conversion rate in effect
immediately prior to such record date by a fraction of which the numerator
shall be the current market price (as defined in subparagraph (iv) below)
per share of the common stock on such record date, and the denominator of
which shall be such current market price per share of common stock, less
the then fair market value (as determined in good faith by the Board of
Directors, whose determination shall be conclusive) of the portion of the
assets or evidences of indebtedness so distributed or of such rights or
warrants applicable to one share of common stock. Such adjustment shall be
made successively whenever such a record date is fixed and shall become
effective immediately after such record date. Notwithstanding the
foregoing, in the event that the Corporation shall distribute any rights or
warrants to acquire capital stock ("Rights") pursuant to this subparagraph
(iii), the distribution of separate certificates representing such Rights
subsequent to their initial distribution (whether or not such distribution
shall have occurred prior to the date of the issuance of such Series ____
Preferred Stock) shall be deemed to be the distribution of such Rights for
purposes of this subparagraph (iii); provided that the Corporation may, in
lieu of making any adjustment pursuant to this subparagraph (iii) upon a
distribution of separate certificates representing such Rights, make proper
provision so that each holder of such Series ____ Preferred Stock who
converts such Series ____ Preferred Stock (or any portion thereof)
(A) before the record date for such distribution of separate certificates
shall be entitled to receive upon such conversion shares of common stock
issued with Rights and (B) after such record date and prior to the
expiration, redemption or termination of such Rights shall be entitled to
receive upon such conversion, in addition to the shares
-18-
of common stock issuable upon such conversion, the same number of such
Rights as would a holder of the number of shares of common stock that such
Series ____ Preferred Stock so converted would have entitled the holder
thereof to purchase in accordance with the terms and provisions of and
applicable to the Rights if such Series ____ Preferred Stock were converted
immediately prior to the record date for such distribution. Common stock
owned by or held for the account of the Corporation or any majority owned
subsidiary shall not be deemed outstanding for the purpose of any
adjustment required under this subparagraph (iii).
(iv) For the purpose of any computation under subparagraph (ii)
and (iii) above, the current market price per share of common stock at any
date shall be deemed to be the average of the daily Closing Prices for the
thirty consecutive business days commencing forty-five business days before
the day in question. The Closing Price for any day shall be (A) if the
common stock is listed or admitted for trading on any national securities
exchange, the last sale price (regular way), or the average of the closing
bid and ask prices, if no sale occurred, of common stock on the principal
securities exchange on which the common stock is listed, (B) if not listed
as described in (A), the mean between the closing high bid and low asked
quotations of common stock in the National Association of Securities
Dealers, Inc., Automated Quotation System, or any similar system or
automated dissemination of quotations of securities prices then in common
use, if so quoted, or (C) if not quoted as described in clause (B), the
mean between the high bid and low asked quotations for common stock as
reported by the National Quotation Bureau Incorporated if at least two
securities dealers have inserted both bid and asked quotations for common
stock on at least 5 of the 10 preceding days. If none of the conditions
set forth above is met the Closing Price of common stock on any day or the
average of such Closing Prices for any period shall be the fair market
value of common stock as determined by a member firm or the New York Stock
Exchange, Inc. selected by the Corporation.
(v) (A) Nothing contained herein shall be construed to require
an adjustment in the conversion rate as a result of the issuance of common
stock pursuant to, or the granting or exercise of any rights under, any
plan adopted by the Corporation providing for the purchase of shares of
common stock by the Corporation's stockholders or employees at a price not
less than 90% of the "average market price" during the "pricing period" as
such terms, or equivalent terms, are defined in, and as calculated pursuant
to, such plans from time to time.
-19-
(B) In addition, no adjustment in the conversion rate shall
be required unless such adjustment would require an increase or decrease of
at least 1% in such rates provided, however, that any adjustments which by
reason of this subparagraph (v)(B) are not required to be made shall be
carried forward and taken into account in any subsequent adjustment;
further provided, however, that any adjustments which by reason of this
subparagraph (v)(B) are not otherwise required to be made shall be made no
later than ___ years after the date on which occurs an event that requires
an adjustment to be made or carried forward.
(C) All calculations under this Section 6 shall be made to
the nearest cent or to the nearest one-hundredth of a share, as the case
may be. Anything in this Section 6 to the contrary notwithstanding, the
Corporation shall be entitled to make such increases in the conversion
rate, in addition to those required by this paragraph (d), as it in its
discretion shall determine to be advisable in order that any stock
dividends, subdivision of shares, distribution of rights to purchase stock
or securities, or distribution of securities convertible into or
exchangeable for stock hereafter made by the Corporation to its
shareholders shall not be taxable.
(vi) In any case in which this paragraph (d) provides that an
adjustment shall become effective immediately after a record date for an
event, the Corporation may defer until the occurrence of such event
(A) delivering to the holder of any Series ____ Preferred Stock converted
after such record date and before the occurrence of such event the
additional shares of common stock deliverable upon such conversion by
reason of the adjustment required by such event over and above the common
stock deliverable upon such conversion before giving effect to such
adjustment and (B) paying to such holder any amount in cash in lieu of any
fraction pursuant to paragraph (e), provided, however, that the Corporation
shall deliver to such holder a due bill or other appropriate instrument
evidencing such holder's rights to receive such additional shares, and such
cash, upon the occurrence of the event requiring such adjustment. If such
event does not occur, no adjustments shall be made pursuant to this
paragraph (d).
(e) No fractional shares of stock shall be issued upon the conversion
of any Series ____ Preferred Stock. If more than one share of Series ____
Preferred Stock shall be surrendered for conversion at one time by the same
holder, the number of full shares of common stock which shall be issuable upon
conversion thereof shall be computed on the basis of the aggregate number of
shares of Series ____ Preferred Stock so surrendered. Instead of any fractional
share of common stock which would otherwise be
-20-
issuable upon conversion of any Series ____ Preferred Stock, the Corporation
shall pay a cash adjustment in respect of such fraction in an amount equal to
the same fraction of the Closing Price per share of common stock on the business
day which immediately precedes the day of conversion.
(f) In case any of the following shall occur while any Series ____
Preferred Stock is outstanding: (i) any reclassification or change of the
outstanding shares of common stock deliverable upon conversion of the
Series ____ Preferred stock (other than a change in par value, or from par value
to no par value, or from no par value to par value, or as a result of a
subdivision or combination, but including any change in the shares of common
stock into two or more classes or series of securities); or (ii) any
consolidation or merger to which the Corporation is a party (other than a
consolidation or a merger in which the Corporation is the continuing corporation
and which does not result in any reclassification of, or change other than a
change in par value, or from par value to no par value, or from no par value to
par value, or as a result of a subdivision or combination) in, the outstanding
shares of common stock issuable upon conversion of the Series ____ Preferred
Stock); or (iii) any sale or conveyance to another corporation of the properties
and assets of the Corporation as an entirety or substantially as an entirety;
then the Corporation, or such successor or purchasing corporation, as the case
may be, shall make appropriate provision in its charter or otherwise so that the
holders of the Series ____ Preferred Stock then outstanding shall have the right
at any time thereafter to convert such Series ____ Preferred Stock into the kind
and amount of shares of stock and other securities and property receivable upon
such reclassification, change, consolidation, merger, sale or conveyance by a
holder of the number of shares of common stock issuable upon conversion of such
Series ____ Preferred Stock immediately prior to such reclassification, change,
consolidation, merger, sale or conveyance. Such provision shall provide for
adjustments which shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Section 6. The above provisions of this
paragraph (f) shall similarly apply to successive reclassification, changes,
consolidations, mergers, sales or conveyances.
(g) The Corporation will at all times reserve and keep available out
of its authorized but unissued or treasury stock, solely for the purpose of
issue upon conversion of the Series ____ Preferred Stock as provided in this
Section 6, such number of shares of common stock as shall from time to time be
sufficient to effect the conversion of all outstanding Series ____ Preferred
Stock.
(h) Before taking any action which would cause an adjustment
increasing the conversion rate so that the liquidation
-21-
value divided by the conversion rate is below the then par value of the shares
of common stock, the Corporation will take any corporate action which may, in
the opinion of its counsel, be necessary in order that the Corporation may
validly and legally issue fully paid and non-assessable shares of common stock
at the conversion rate as so adjusted.
(i) The issuance of certificates for shares of common stock upon
conversion of Series ____ Preferred Stock shall be made without charge to the
converting stockholder for such certificates or for any tax in respect of the
issuance of such certificates, and such certificates shall be issued in the name
of, or in such name or names as may be directed by, the holder of the
Series ____ Preferred Stock converted. However, if any such certificate is to
be issued in a name other than that of the holder of the converted Series ____
Preferred Stock, the Corporation shall not be required to issue or deliver any
stock certificate or certificates unless and until the holder has paid to the
Corporation the amount of any tax which may be payable in respect of any
transfer involved in such issuance or shall establish to the satisfaction of the
Corporation that such tax has been paid.
(j) Whenever the conversion rate then in effect is adjusted as herein
provided, the Corporation shall mail to each holder of the Series ____ Preferred
Stock at such holder's address as it shall appear on the books of the
Corporation a statement setting forth the adjusted conversion rate, then and
thereafter effective under the provisions hereof together with the facts, in
reasonable detail, upon which such adjustment is based.
(k) In case (i) the Corporation shall declare a dividend (or any
other distribution) on its common stock other than in cash out of its current or
retained earnings, or (ii) other than pursuant to any plan in accordance with
paragraph (d)(v)(A) above, the Corporation shall authorize the granting to the
holders of its common stock of rights or warrants to subscribe for or purchase
any shares of capital stock of any class or of any other rights or warrants, or
(iii) of any reclassification or change of the common stock of the Corporation
(other than a subdivision or combination of its outstanding shares of common
stock, or a change in par value, or from par value to no par value, or from no
par value to par value), or of any consolidation or merger to which the
Corporation is a party and for which approval of any stockholders of the
Corporation is required or the sale or transfer of all or substantially all of
the assets of the Corporation, or (iv) of the voluntary or involuntary
dissolution, liquidation or winding up of the Corporation; the Corporation shall
mail to each holder of Series ____ Preferred Stock at such holder's address as
it shall appear on the books of the Corporation, at least fifteen days
-22-
prior to the applicable record date hereinafter specified, a notice stating
(x) the record date for such dividend, distribution or rights, or, if a record
is not to be taken, the date as of which the holders of common stock of record
to be entitled to such dividend, distribution or rights are to be determined, or
(y) the date on which such reclassification, consolidation, merger, dissolution,
liquidation or winding up is expected to become effective, and the date as of
which it is expected that holders of common stock of record shall be entitled to
exchange their shares of common stock for securities or other property
deliverable upon such reclassification, consolidation, merger, dissolution,
liquidation or winding up. No failure to mail such notice nor any defect
therein or in the mailing thereof shall affect the legality or validity of any
such transaction or any adjustment in the conversion rate or conversion price
required by this Section 6.]
[IF THE PREFERRED STOCK IS EXCHANGEABLE FOR OTHER SECURITIES, INSERT APPROPRIATE
LANGUAGE HERE]
7. VOTING. Except as hereinafter in this Section 7 expressly
provided or as otherwise required by law, the Series ____ Preferred Stock shall
have no voting power.
[IF THE PREFERRED STOCK IS GENERAL VOTING STOCK, INSERT THE FOLLOWING --
(a) SPECIAL VOTING RIGHTS.]
Whenever and as often as dividends payable on any share or shares of
the Preferred Stock at the time outstanding shall be accumulated and unpaid in
an amount equivalent to or exceeding _____ quarterly dividends (whether or not
declared and whether or not consecutive), the holders of record of the Preferred
Stock of all series shall thereafter have the right, as a single class, to elect
two directors, and, subject to the terms of any outstanding series of Preferred
Stock, the holders of record of the common stock, as a single class, shall have
the right to elect the remaining authorized number of Directors. In any such
election, the holders of shares of Series ____ Preferred Stock shall be entitled
to cast one vote per share.
Upon the happening of the _____ dividend defaults hereinabove set
forth, a special meeting of stockholders of the Corporation then entitled to
vote shall be called by the Chairman of the Board or the President or the
Secretary of the Corporation, if requested in writing by the holders of record
of not less than ten percent of the Preferred Stock then outstanding. At such
special meeting, or, if no such special meeting shall have been called, then at
the next annual meeting of stockholders, the stockholders of the Corporation
then entitled to vote shall elect, voting as above provided, an
-23-
entirely new Board of Directors, and the term of office of the Directors in
office at the time of such election shall expire upon the election of their
successors at such meeting; provided, however, that nothing herein contained
shall be construed to be a bar to the re-election of any Director at such
meeting. At all meetings of stockholders at which holders of Preferred Stock
shall be entitled to vote for Directors as a single class, the holders of a
majority of the outstanding shares of each class or series of capital stock of
the Corporation having the right to vote as a single class shall be necessary to
constitute a quorum, whether present in person or by proxy for the election by
that class or series of its designated Directors. In order to validate an
election of Directors by stockholders voting as a class, such Directors shall be
elected by the vote of at least a plurality of shares held by such stockholders
present or represented at the meeting. At any such meeting, the election of
Directors by stockholders voting as a class shall be valid notwithstanding that
a quorum of other stockholders voting as one or more classes may not be present
or represented at such meeting, and if any stockholder voting as a class shall
elect Directors, the Directors so elected shall be deemed to be Directors of the
Corporation unless and until the other stockholders entitled to vote as one or
more classes shall elect their Directors.
While class voting is in effect with respect to the Preferred Stock,
any Director elected by holders of Preferred Stock voting as a class may be
removed at any annual or special meeting, by vote of a majority of the
stockholders voting as a class who elected such Director, for any cause deemed
sufficient by such stockholders present at such meeting. In case any vacancy
shall occur among the Directors elected by such stockholders voting as a class,
such vacancy may be filled by the remaining Director so elected, or his
successor then in office, and the Director so elected to fill such vacancy shall
serve until the next meeting of stockholders for the election of Directors.
Such voting rights of the holders of Preferred Stock as a single
class, once effective, shall continue only until all arrears in dividends
(whether or not declared) on the Preferred Stock shall have been paid or
declared and set apart for payment at which time the right of the Preferred
Stock to vote as a single class for the election of Directors, as hereinabove
set forth, shall terminate. Upon such termination, a special meeting of the
stockholders of the Corporation then entitled to vote may be called by the
Chairman of the Board or the President, and shall be called by the Chairman of
the Board or the President or the Secretary of the Corporation if requested in
writing by the holders of record of not less than one percent of the common
stock then outstanding, and at such special meeting, or if no such special
meeting shall have been called then at the next
-24-
annual meeting of the stockholders the stockholders of the Corporation then
entitled to vote shall elect an entirely new Board of Directors and the term of
office of the Directors in office at the time of such election shall expire upon
the election of their successors at such meeting; provided, however, that
nothing herein contained shall be construed to be a bar to the re-election of
any such Director at such meeting.
The consent of the holders of at least two-thirds of the number of
shares of Preferred Stock at the time outstanding, given in person or by proxy,
either in writing or at a meeting of stockholders at which the holders of the
Preferred Stock shall vote separately as a class without regard to series, the
holders of shares of Series ____ Preferred Stock being entitled to cast one vote
per share thereon, shall be necessary for effecting or validating:
(i) any change in the Certificate of Incorporation or
certificate supplemental thereto or By-laws of the Corporation which would
materially and adversely alter or change the preferences, privileges,
rights or powers given to the holders of the Preferred Stock; provided,
that if one or more but not all series of Preferred Stock at the time
outstanding are so affected, only the consent of the holders of at least
two-thirds of each series so affected voting separately as a class, shall
be required; or
(ii) the issuance of any shares of any other class of stock
of the Corporation ranking prior to the Preferred Stock.
The term "ranking prior to the Preferred Stock" shall mean and include
all shares of stock of the Corporation in respect of which the rights of the
holders thereof as to the payment of dividends or as to distributions in the
event of a voluntary or an involuntary liquidation, dissolution or winding up of
the Corporation, are given preference over the rights of the holders of the
Preferred Stock.
[IF PREFERRED STOCK IS GENERAL VOTING CONVERTIBLE STOCK, INSERT THE FOLLOWING --
(b) GENERAL VOTING RIGHTS. In addition to the voting rights conferred
by Section 7(a) hereof, the holders of Series ____ Preferred Stock shall be
entitled to vote, together with holders of common stock, on all matters
submitted to the vote of the holders of common stock, including the election of
directors. Upon any matter so submitted to the vote or the shareholders having
voting rights with respect thereto, each holder of Series ____ Preferred Stock
shall be entitled to the number of votes per share of Series ____ Preferred
Stock equal
-25-
to the number of whole shares of common stock into which such share of
Series ____ Preferred Stock is convertible on the record date set for
determining the holders of shares entitled to vote upon the matter submitted to
such vote.]
8. LIQUIDATION PREFERENCE. In the event of any liquidation,
dissolution or winding up of the Corporation, voluntary or involuntary, the
holders of all shares of Series ____ Preferred Stock shall be entitled to be
paid in full out of the assets of the Corporation available for distribution to
stockholders, before any distribution of assets shall be made to the holders of
common stock or of any other shares of stock of the Corporation ranking as to
such distribution junior to the Series ____ Preferred Stock, an amount equal to
$_____ per share plus an amount equal to any accrued and unpaid dividends
thereon to the date fixed for payment of such distribution. If, upon any
voluntary or involuntary liquidation, dissolution or winding up of the
Corporation, the amounts payable with respect to the Series ____ Preferred Stock
and any other shares of stock of the Corporation ranking as to any such
distribution on a parity with the Series ____ Preferred Stock are not paid in
full, the holders of the Series ____ Preferred Stock and of such other shares
shall share ratably in any such distribution of assets of the Corporation in
proportion to the full respective preferential amounts to which they are
entitled. After payment to the holders of the Series ____ Preferred Stock of
the full preferential amounts provided for in this Section 8, the holders of the
Series ____ Preferred Stock shall be entitled to no further participation in any
distribution of assets by the Corporation.
Consolidation or merger of the Corporation with or into another
corporation or corporations, or a sale whether for cash, shares of stock,
securities or properties, of all or substantially all of the assets of the
Corporation, shall not be deemed or construed to be a liquidation, dissolution
or winding up of the Corporation within the meaning of this paragraph 8.
9. LIMITATION ON DIVIDENDS ON JUNIOR RANKING STOCK. So long as any
Series ____ Preferred Stock shall be outstanding, the Corporation shall not
declare any dividends on the common stock of the Corporation or any other stock
of the Corporation ranking as to dividends or distribution of assets junior to
the Series ____ Preferred Stock (the common stock and any such other stock being
herein referred to as "Junior Stock"), or make any payment on account of, or set
apart money for, a sinking or other analogous fund for the purchase, redemption
or other retirement of any shares of Junior Stock, or make any distribution in
respect thereof, whether in cash or property or in obligations or stock of the
Corporation, other than Junior Stock (such dividends, payments, setting apart
and distributions being herein called "Junior Stock Payments"), unless all of
the conditions set forth in the following subsections A and B shall exist at the
-26-
date of such declaration in the case of any such dividend, or the date of such
setting apart in the case of any such fund, or the date of such payment or
distribution in the case of any other Junior Stock Payment:
A. Full cumulative dividends shall have been paid or declared and set
apart for payment upon all outstanding shares of Preferred Stock other than
Junior Stock.
B. The Corporation shall not be in default or in arrears with respect
to any sinking or other analogous fund or any call for tenders, obligation or
other agreement for the purchase, redemption or other retirement of any shares
of Preferred Stock other than Junior Stock.
-27-
EXHIBIT 5-1
-----------
Sheppard, Mullin, Richter & Hampton
________________, 1994
Northrop Grumman Corporation
1840 Century Park East
Los Angeles, California 90067
Re: Northrop Grumman Corporation
Registration Statement on Form S-3
Ladies and Gentlemen:
We have acted as counsel for Northrop Grumman Corporation, a Delaware
corporation (the "Company"), in connection with the registration under the
Securities Act of 1933, as amended (the "Act"), of $800,000,000 aggregate
principal amount of the Company's senior and subordinated debt securities
(collectively, the "Debt Securities"); warrants to purchase Debt Securities
("Debt Warrants"); preferred stock, par value $1.00 per share ("Preferred
Stock"); common stock, par value $1.00 per share ("Common Stock"); and warrants
to purchase shares of Common Stock, Preferred Stock or other securities ("Equity
Warrants"). The Debt Securities, Debt Warrants, Preferred Stock, Common Stock
and Equity Warrants are herein referred to collectively as the "Securities".
The Securities may be issued from time to time by the Company after the
registration statement to which this opinion is an exhibit (the "Registration
Statement") becomes effective. The terms used herein, unless otherwise defined,
have the meanings assigned to them in the Registration Statement.
We have examined such documents as we have considered necessary for
purposes of this opinion, including (i) the form of Senior Indenture between the
Company and The Chase Manhattan Bank (National Association) as trustee (the
"Senior Indenture"), (ii) the form of Subordinated Indenture between the Company
and The Chase Manhattan Bank (National Association) as trustee (the
"Subordinated Indenture"), (iii) the amended Certificate of Incorporation and
By-Laws of the Company, (iv) the forms of debt warrant agreement and equity
warrant agreement (the "Warrant Agreements"), each between the Company and one
or more warrant agents (each, a "Warrant Agent") relating to the Debt Warrants
of the Equity Warrants, as the case may be, and such other documents and matters
of law as we have deemed necessary in connection with the opinions hereinafter
expressed. In such examination, we have assumed
-1-
the genuineness of all signatures, the authenticity of all documents submitted
to us as originals and the conformity to authentic originals of all documents
submitted to us as certified copies or photocopies. In rendering the opinions
expressed below, we have relied on factual representations by Company officials
and statements of fact contained in the documents we have examined.
On the basis of the foregoing and having regard for legal
considerations we deem relevant, we are of the opinion that:
(1) The Company has been duly incorporated and is an existing
corporation in good standing under the laws of the State of Delaware.
(2) Upon the taking of appropriate corporate action by the Company;
the effectiveness of the Registration Statement under the Act; the qualification
of the Senior Indenture or the Subordinated Indenture, as the case may be, under
the Trust Indenture Act of 1939; the compliance with the "blue sky" laws of
certain states; the due execution and delivery by the parties thereto of (a) the
Senior Indenture and Subordinated Indenture and each amendment of or supplement
thereto, as the case may be (each such Indenture, as so amended or supplemented,
being referred to as an "Indenture", and the Trustee under any Indenture being
referred to as a "Trustee") and (b) a Warrant Agreement relating to Debt
Warrants, and each amendment of or supplement thereto (each such Warrant
Agreement, as so amended or supplemented, being referred to as a "Debt Warrant
Agreement"), assuming that the relevant Indenture and Debt Warrant Agreement are
consistent with the forms thereof filed as exhibits to the Registration
Statement; and the due execution of the Debt Securities and the Debt Warrants on
behalf of the Company, the Debt Securities and the Debt Warrants will be duly
and validly authorized and, when the Debt Securities are duly authenticated by
the relevant Trustee and the Debt Warrants are duly authenticated by the
relevant Warrant Agent and sold and delivered at the price and in accordance
with the terms set forth in the Registration Statement and the supplement or
supplements to the relevant Prospectus included therein, the Debt Securities and
the Debt Warrants will be valid and binding obligations of the Company, entitled
to the benefits of the relevant Indenture and Debt Warrant Agreement, except as
such enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors' rights generally and
subject to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
-2-
(3) Upon the taking of appropriate corporate action by the Company
and its shareholders, including the approval of the terms of any class or series
of Securities; the effectiveness of the Registration Statement under the Act;
the due execution and delivery by the parties thereto of a Warrant Agreement
relating to Equity Warrants, and each amendment thereof or supplement thereto
(each such Warrant Agreement, as so amended or supplemented, being referred to
an "Equity Warrant Agreement"), assuming that the relevant Equity Warrant
Agreement is consistent with the form thereof filed as an exhibit to the
Registration Statement and the due execution of the Equity Warrants on behalf of
the Company, the Equity Warrants will be duly and validly authorized and, when
duly authenticated by the relevant Warrant Agent and sold and delivered at the
price and in accordance with the terms set forth in the Registration Statement
and the supplement or supplements to the relevant Prospectus included therein,
the Common Stock and the Preferred Stock will be validly issued, fully paid and
nonassessable and the Equity Warrants will be valid and binding obligations of
the Company, entitled to the benefits of the Equity Warrant Agreement except as
such enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors' rights generally and
subject to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to our firm under the caption "Legal
Opinions" in the Prospectus. In giving such consent, we do not thereby admit
that we come within the category of persons whose consent is required under
Section 7 of the Act.
Very truly yours,
SHEPPARD, MULLIN, RICHTER &
HAMPTON
-3-
EXHIBIT 12-1
------------
RATIO OF EARNINGS TO FIXED CHARGES
($ in millions of U.S. Dollars except ratios)
Three Months Years Ended December 31,
Ended -------------------------------------------------------
March 31, 1994 1993(a) 1992 1991 1990 1989
-------------- ------- ---- ---- ---- ----
Earnings (Loss):
Income (loss) from
continuing operations
before income taxes and
cumulative effect of
accounting changes 79 170 180 268 312 (81)
------- ------- ------- ------- ------- -------
Fixed Charges:
Portion of rent expense
deemed to be representative
of interest 4 16 17 17 16 15
Interest Expense 5 38 47 80 95 124
Amortization of debt issue costs
and other fees -- -- -- -- -- --
Total fixed charges 9 54 64 97 111 139
------- ------- ------- ------- ------- -------
------- ------- ------- ------- ------- -------
Earnings before fixed
charges 88 224 244 365 423 58
------- ------- ------- ------- ------- -------
------- ------- ------- ------- ------- -------
Ratio of earnings to fixed
charges 9.8 4.1 3.8 3.8 3.8 --
------- ------- ------- ------- ------- -------
------- ------- ------- ------- ------- -------
Amount by which earnings
before fixed charges are
insufficient to cover
fixed charges -- -- -- -- -- (81)
------- ------- ------- ------- ------- -------
------- ------- ------- ------- ------- -------
(a) Pro forma ratio of earnings to fixed charges for 1993 and the quarter ended
March 31, 1994, assuming that the acquisition of Grumman had occurred at the
beginning of 1993, would have been 1.8 and 2.6, respectively.
EXHIBIT 23-1
------------
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration
Statement of Northrop Grumman Corporation on Form S-3 of our report dated
February 1, 1994, appearing in the Annual Report on Form 10-K of Northrop
Corporation (now named Northrop Grumman Corporation) for each of the five years
in the period ended December 31, 1993 and to the reference to us under the
heading "Independent Auditors" in such Registration Statement.
DELOITTE & TOUCHE LLP
Los Angeles, California
August 16, 1994
EXHIBIT 23-2
------------
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report to the board of directors
and shareholders of Grumman Corporation and subsidiaries included in or
incorporated by reference in Grumman Corporation's Annual Report on Form 10-K
for the year ended December 31, 1993.
ARTHUR ANDERSEN & CO.
New York, New York
August 16, 1994
EXHIBIT 24-1
------------
POWER OF ATTORNEY
FILING OF REGISTRATION STATEMENT ON FORM S-3
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned directors and
officers of NORTHROP GRUMMAN CORPORATION, a Delaware corporation (the
"Company"), nominate, constitute and appoint RICHARD R. MOLLEUR and SHEILA M.
GIBBONS, and each of them, acting or signing singly, as his or her agents and
attorneys-in-fact, in his or her respective name and in the capacity indicated
below to execute and/or file (1) a registration statement on Form S-3 under the
Securities Act of 1933, as amended (the "Act"), in connection with the
registration under the Act of Debt Securities, Preferred Stock, Common Stock,
Warrants to purchase Debt Securities and Warrants to purchase Equity Securities
(including the final prospectus, schedules and all exhibits and other documents
filed therewith or constituting a part thereof); and (2) any one or more
amendments to any part of the foregoing registration statement, including any
post-effective amendments or appendices or supplements that may be required to
be filed under the Act to keep such registration statement effective or to
terminate its effectiveness.
Further, the undersigned do hereby authorize and direct the said agents and
attorneys-in-fact to take any and all actions and execute and file any and all
documents with the Securities and Exchange Commission (the "SEC"), or state
regulatory agencies, necessary, proper or convenient in their opinion to comply
with the Act and the rules and regulations or orders of the SEC, or state
regulatory agencies, adopted or issued pursuant thereto, including the making of
any requests for acceleration of the effective date of said registration
statement, to the end that the registration statement of the
-1-
Company shall become effective under the Act and any other applicable law.
Finally, each of the undersigned does hereby ratify, confirm and approve each
and every act and document which the said appointment agents and
attorneys-in-fact may take, execute or file pursuant thereto with the same force
and effect as though such action had been taken or such document had been
executed or filed by the undersigned, respectively.
This Power of Attorney shall remain in full force and effect until revoked or
superseded by written notice filed with the SEC.
IN WITNESS WHEREOF, each of the undersigned has subscribed these presents this
17th day of August, 1994.
/s/ KENT KRESA
- -------------------------------- Chairman of the Board,
Kent Kresa President and Chief
Executive Officer and
Director (Principal
Executive Officer)
/s/ OLIVER C. BOILEAU, JR.
- -------------------------------- Director
Oliver C. Boileau, Jr.
/s/ JACK R. BORSTING
- -------------------------------- Director
Jack R. Borsting
/s/ RENSO L. CAPORALI
- -------------------------------- Director
Renso L. Caporali
/s/ JOHN T. CHAIN, JR.
- -------------------------------- Director
John T. Chain, Jr.
/s/ JACK EDWARDS
- -------------------------------- Director
Jack Edwards
-2-
/s/ BARBARA C. JORDAN
- -------------------------------- Director
Barbara C. Jordan
/s/ AULANA L. PETERS
- -------------------------------- Director
Aulana L. Peters
/s/ JOHN E. ROBSON
- -------------------------------- Director
John E. Robson
/s/ RICHARD M. ROSENBERG
- -------------------------------- Director
Richard M. Rosenberg
/s/ WILLIAM F. SCHMIED
- -------------------------------- Director
William F. Schmied
/s/ BRENT SCOWCROFT
- -------------------------------- Director
Brent Scowcroft
/s/ JOHN BROOKS SLAUGHTER
- -------------------------------- Director
John Brooks Slaughter
/s/ WALLACE C. SOLBERG
- -------------------------------- Director
Wallace C. Solberg
/s/ RICHARD J. STEGEMEIER
- -------------------------------- Director
Richard J. Stegemeier
/s/ RICHARD B. WAUGH, JR.
- -------------------------------- Corporate Vice President and
Richard B. Waugh, Jr. Chief Financial Officer
(Principal Financial
Officer)
/s/ NELSON F. GIBBS
- -------------------------------- Corporate Vice President and
Nelson F. Gibbs Controller (Principal
Accounting Officer)
-3-
EXHIBIT 25-1
------------
Securities Act of 1933 File No. _________
(If application to determine eligibility of trustee
for delayed offering pursuant to Section 305 (b) (2))
________________________________________________________________________________
_____
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2)___________
__________________
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION)
(Exact name of trustee as specified in its charter)
13-2633612
(I.R.S. Employer Identification Number)
1 CHASE MANHATTAN PLAZA, NEW YORK, NEW YORK
(Address of principal executive offices)
10081
(Zip Code)
________________
CHASE MANHATTAN BANK (NATIONAL ASSOCIATION)
4 CHASE METROTECH CENTER, BROOKLYN, NEW YORK 11245
(718) 242-7287
(Name address and telephone number of agent for service)
NORTHROP GRUMMAN CORPORATION
(Exact name of obligor as specified in its charter)
DELAWARE
(State or other jurisdiction of incorporation or organization)
95-1055798
(I.R.S. Employer Identification No.)
1840 CENTURY PARK EAST
LOS ANGELES, CALIFORNIA
(Address of principal executive offices)
90067
(Zip Code)
__________________________________
DEBT SECURITIES
(Title of the indenture securities)
________________________________________________________________________________
ITEM 1. GENERAL INFORMATION.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to which
it is subject.
Comptroller of the Currency, Washington, D.C.
Board of Governors of The Federal Reserve System, Washington, D. C.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
The Trustee is not the obligor, nor is the Trustee directly or
indirectly controlling, controlled by, or under common control with
the obligor.
(See Note on Page 2.)
ITEM 16. LIST OF EXHIBITS.
List below all exhibits filed as a part of this statement of
eligibility.
*1. -- A copy of the articles of association of the trustee as
now in effect. (See Exhibit T-1 (Item 12), Registration
No. 33-55626.)
*2. -- Copies of the respective authorizations of The Chase
Manhattan Bank (National Association) and The Chase Bank
of New York (National Association) to commence business
and a copy of approval of merger of said corporations,
all of which documents are still in effect. (See Exhibit
T-1 (Item 12), Registration No. 2-67437.)
*3. -- Copies of authorizations of The Chase Manhattan Bank
(National Association) to exercise corporate trust
powers, both of which documents are still in effect. (See
Exhibit T-1 (Item 12), Registration No. 2-67437).
*4. -- A copy of the existing by-laws of the trustee. (See
Exhibit T-1 (Item 12(a)), Registration No. 33-28806.)
*5. -- A copy of each indenture referred to in Item 4, if the
obligor is in default. (Not applicable).
*6. -- The consents of United States institutional trustees
required by Section 321(b) of the Act. (See Exhibit T-1,
(Item 12), Registration No. 22-19019.)
7. -- A copy of the latest report of condition of the trustee
published pursuant to law or the requirements of its
supervising or examining authority.
___________________
*The Exhibits thus designated are incorporated herein by reference.
Following the description of such Exhibits is a reference to the copy of the
Exhibit heretofore filed with the Securities and Exchange Commission, to which
there have been no amendments or changes.
___________________
1.
NOTE
Inasmuch as this Form T-1 is filed prior to the ascertainment by the
trustee of all facts on which to base a responsive answer to Item 2 the answer
to said Item is based on incomplete information.
Item 2 may, however, be considered as correct unless amended by an
amendment to this Form T-1.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the
trustee, The Chase Manhattan Bank (National Association), a corporation
organized and existing under the laws of the United States of America, has duly
caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in the City of New York, and the
State of New York, on the 16th day August, 1994.
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION)
By Valerie Dunbar
--------------
Second Vice President
_________________
2.
EXHIBIT 7
REPORT OF CONDITION
CONSOLIDATING DOMESTIC AND FOREIGN SUBSIDIARIES OF
THE CHASE MANHATTAN BANK, N.A.
OF NEW YORK IN THE STATE OF NEW YORK, AT THE CLOSE OF BUSINESS ON MARCH 31,
1994, PUBLISHED IN RESPONSE TO CALL MADE BY COMPTROLLER OF THE CURRENCY, UNDER
TITLE 12, UNITED STATES CODE, SECTION 161.
CHARTER NUMBER 02370
COMPTROLLER OF THE CURRENCY NORTHEASTERN DISTRICT
STATEMENT OF RESOURCES AND LIABILITIES
ASSETS THOUSANDS
OF DOLLARS
CASH AND BALANCES DUE FROM DEPOSITORY INSTITUTIONS:
NONINTEREST-BEARING BALANCES AND CURRENCY AND COIN $4,591,256
INTEREST-BEARING BALANCES 5,173,036
HELD-TO-MATURITY SECURITIES 547,237
AVAILABLE-FOR-SALE SECURITIES 5,871,767
FEDERAL FUNDS SOLD AND SECURITIES PURCHASED UNDER AGREEMENTS TO
RESELL IN DOMESTIC OFFICES OF THE BANK AND OF ITS EDGE AND AGREEMENT
SUBSIDIARIES.
AND IN IBFS:
FEDERAL FUNDS SOLD. 3,277,510
SECURITIES PURCHASED UNDER AGREEMENTS TO RESELL 40,431
LOANS AND LEASE FINANCING RECEIVABLES:
LOANS AND LEASES. NET OF UNEARNED INCOME $51,008,579
LESS: ALLOWANCE FOR LOAN AND LEASE LOSSES 1,079,989
LESS: ALLOCATED TRANSFER RISK RESERVE 0
----------
LOANS AND LEASES, NET OF UNEARNED INCOME, ALLOWANCE, AND RESERVE 49,928,590
ASSETS HELD IN TRADING ACCOUNTS 15,548,982
PREMISES AND FIXED ASSETS (INCLUDING CAPITALIZED LEASES) 1,626,241
OTHER REAL ESTATE OWNED 1,082,804
INVESTMENTS IN UNCONSOLIDATED SUBSIDIARIES AND ASSOCIATED COMPANIES 64,040
CUSTOMERS' LIABILITY TO THIS BANK ON ACCEPTANCES OUTSTANDING 799,111
INTANGIBLE ASSETS 359,509
OTHER ASSETS 4,865,124
-----------
TOTAL ASSETS $93,775,638
LIABILITIES
DEPOSITS:
IN DOMESTIC OFFICES $31,058,916
NONINTEREST-BEARING $11,004,911
INTEREST-BEARING $20,054,005
IN FOREIGN OFFICES, EDGE AND AGREEMENT SUBSIDIARIES, AND IBFS 32,442,645
NONINTEREST-BEARING $2,882,103
INTEREST-BEARING 29,560,542
FEDERAL FUNDS PURCHASED AND SECURITIES SOLD UNDER AGREEMENTS TO
REPURCHASE IN DOMESTIC OFFICES OF THE BANK AND OF ITS EDGE AND
AGREEMENT SUBSIDIARIES, AND IN IBF'S:
FEDERAL FUNDS PURCHASED 2,257,218
SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE 55,951
DEMAND NOTES ISSUED TO THE U.S. TREASURY 500,000
TRADING LIABILITIES 10,215,151
OTHER BORROWED MONEY:
WITH ORGINIAL MATURITY OF ONE YEAR OR LESS 2,318,773
WITH ORGINIAL MATURITY OF MORE THAN ONE YEAR 662,234
MORTGAGE INDEBTEDNESS AND OBLIGATIONS UNDER CAPITALIZED LEASES 41,168
BANK'S LIABILITY ON ACCEPTANCES, EXECUTED AND OUTSTANDING 809,183
SUBORDINATED NOTES AND DEBENTURES 2,360,000
OTHER LIABILITIES 4,643,166
TOTAL LIABILITIES $87,364,405
LIMITED-LIFE PREFERRED STOCK AND RELATED SURPLUS 0
EQUITY CAPITAL
PERPETUAL PREFERRED STOCK AND RELATED SURPLUS 0
COMMON STOCK $911,914
SURPLUS 4,390,954
UNDIVIDED PROFITS AND CAPITAL RESERVES 1,123,632
NET UNREALIZED GAINS ON AVAILABLE-FOR -SALE SECURITIES (26,509)
CUMULATIVE FOREIGN CURRENCY TRANSLATION ADJUSTMENTS 11,242
TOTAL EQUITY CAPITAL 6,411,233
TOTAL LIABILITIES, LIMITED-LIFE PREFERRED STOCK, AND EQUITY CAPITAL $93,775,638
I, LESTER J. STEPHENS, JR., SENIOR VICE PRESIDENT AND CONTROLLER OF THE ABOVE
NAMED BANK DO HEREBY DECLARE THAT THIS REPORT OF CONDITION IS TRUE AND CORRECT
TO THE BEST OF MY KNOWLEDGE AND BELIEF.
(SIGNED) LESTER J. STEPHENS, JR.
WE THE UNDERSIGNED DIRECTORS, ATTEST TO THE CORRECTNESS OF THIS STATEMENT OF
RESOURCES AND LIABILITIES. WE DECLARE THAT IT HAS BEEN EXAMINED BY US, AND TO
THE BEST OF OUR KNOWLEDGE AND BELIEF HAS BEEN PREPARED IN CONFORMANCE WITH THE
INSTRUCTIONS AND IS TRUE AND CORRECT.
(SIGNED) THOMAS G. LABRECQUE
(SIGNED) ARTHUR F. RYAN DIRECTORS
(SIGNED) RICHARD J. BOYLE
3.
