UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549



                                ----------------

                                    FORM 8-K

                CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

                                ----------------


      DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED):  OCTOBER 20, 1994





                          NORTHROP GRUMMAN CORPORATION
             (Exact name of registrant as specified in its charter)





           DELAWARE                    1-3229               95-4320650
 (State or other jurisdiction        (Commission           (IRS Employer
       of incorporation             File Number)        Identification No.)


              1840 CENTURY PARK EAST, LOS ANGELES, CALIFORNIA 90067
                    (Address of principal executive offices)





       REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE:  (310) 553-6262



Item 5.   OTHER EVENTS

          This Current Report on Form 8-K is being filed in connection with the
offer and sale by Northrop Grumman Corporation, a Delaware corporation, of
$600,000,000 aggregate principal amount of 8-5/8% Notes due 2004 and 9-3/8%
Debentures due 2024 (the "Offered Debt Securities").  The Offered Debt
Securities are being offered and sold under an existing shelf Registration
Statement (Reg. No. 33-55143) covering up to $800,000,000 in Securities.

          On October 19, 1994, Northrop Grumman Corporation announced its
results of operations for the three months ended September 30, 1994.  A copy of
the press release of Northrop Grumman Corporation announcing the results of
operations is included in this Current Report on Form 8-K as an exhibit and is
incorporated by reference in this Item 5.


Item 7.   FINANCIAL STATEMENTS AND EXHIBITS

Exhibit No.    Description of Exhibit
- -----------    ----------------------

1.1            Underwriting Agreement dated October 20, 1994, among the
               Registrant and CS First Boston Corporation, J.P. Morgan
               Securities Inc., Merrill Lynch, Pierce, Fenner & Smith
               Incorporated and Salomon Brothers Inc.

1.2            Terms Agreement dated October 20, 1994, among the Registrant and
               CS First Boston Corporation, J.P. Morgan Securities Inc., Merrill
               Lynch, Pierce, Fenner & Smith Incorporated and Salomon Brothers
               Inc.

4.1            Indenture dated as of October 15, 1994, between the Registrant
               and The Chase Manhattan Bank (National Association), as trustee.

4.2            Officers' Certificate (without exhibits), dated as of October 20,
               1994, establishing the terms of the Registrant's 8-5/8% Notes due
               2004 and the 9-3/8% Debentures due 2024.

4.3            Form of 8-5/8% Note due 2004.

4.4            Form of 9-3/8% Debenture due 2024.

5              Opinion of Sheppard, Mullin, Richter & Hampton regarding the
               validity of the 8-5/8% Notes due 2004 and the 9-3/8% Debentures
               due 2024.


                                       -1-


99             Press Release dated October 19, 1994 announcing the results of
               operations for the three months ended September 30, 1994.


          Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.


                              NORTHROP GRUMMAN CORPORATION


                              By: /s/ Sheila M. Gibbons
                                  -------------------------
                                  Sheila M. Gibbons
                                  Corporate Vice President
                                     and Secretary


Dated: October 20, 1994


                                       -2-



                                                                 EXHIBIT 1-1

                           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 October 15, 1994 ("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. 33-55143), 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 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 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

                                        2




     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 ("Grumman"), 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
     its consolidated subsidiaries and Grumman and its consolidated
     subsidiaries, as the case may be, 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 and its consolidated subsidiaries and Grumman and its
     consolidated subsidiaries, as the case may be, 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.

     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 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


                                        3




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.

          (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

                                        4



     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.

          (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

                                        5





     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 a letter, dated the date of delivery
     thereof, of Deloitte & Touche L.L.P. 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 three months ended March 31, 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


                                        6



          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 consolidated
          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)  On or prior to the date of the Terms Agreement, the
     Representatives shall have received a letter, dated the date of delivery
     thereof, of Arthur Andersen & Co. 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 of Grumman and its subsidiaries 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; and

               (ii) they have performed procedures specified by the
          Representatives with respect to the unaudited consolidated financial
          statements of Grumman and its subsidiaries incorporated by reference
          in the Registration Statement, including (a) reviewing of the minutes
          of meetings of the stockholders of Grumman, the board of directors of
          Grumman and any committees thereof as set forth in the minute books at
          March 31, 1994, (b) reading the unaudited consolidated financial
          statements of Grumman and its subsidiaries incorporated by reference
          in the Registration Statement and agreeing the amounts contained
          therein with Grumman's accounting records as of March 31, 1994 and for
          the three-month period then ended and (c) inquiring of certain
          officials of Grumman who have responsibility for financial and
          accounting matters whether the unaudited condensed consolidated
          financial statements incorporated by reference in the Registration
          Statement (X) are in conformity with generally accepted accounting
          principles applied on a basis substantially consistent with that of
          the audited consolidated financial statements of Grumman and its
          subsidiaries incorporated by reference in the Registration Statement
          and (y) comply as to form in all material respects with the applicable
          accounting requirements of the Act and the related published rules and
          regulations.

                                        7



     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.

          (c)  On or prior to the date of the Terms Agreement, the
     Representatives shall have received a letter, dated the date of delivery
     thereof, of Ernst & Young 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) they
     audited the consolidated balance sheets of VAC Acquisition Corp.("VAC")
     and its subsidiaries as of December 31, 1993 and the related consolidated
     statements of income and retained earnings and cash flows for the year then
     ended (the "VAC Financial Statements") and (ii) they have compared
     specified dollar amounts and other financial information with respect VAC
     contained in the Prospectus with the financial information contained in
     the VAC Financial Statements and have found such dollar amounts and other
     financial information to be in agreement with such results.

          (d)  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.

          (e)  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.

          (f)  The Representatives shall have received an opinion, dated the
     Closing Date, of Sheppard, Mullin, Richter & Hampton, counsel for the
     Company, to the effect that:


                                        8



               (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 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

                                        9



          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;  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.


          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; and such counsel
     does not know 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.

          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.

                                       10




          (g)  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.


          (h)  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.

          (i)  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 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


                                       11



     operation of the Company and its Subsidiaries except as set forth in or
     contemplated by the Prospectus or as described in such certificate.

          (j)  The Representatives shall have received  a letter , dated the
     Closing Date,  of Deloitte & Touche L.L.P. , which reconfirms the matters
     set forth in their letter delivered pursuant to subsection (a) of this
     Section and which  states 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  three months ended  March 31, 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:

                                       12




                    (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.

                                       13



     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.

          (k)  The Representatives shall have received a letter, dated the
     Closing Date, of Arthur Andersen & Co., which reconfirms the matters set
     forth in their letter delivered pursuant to subsection (b) of this Section
     and which states in effect that:


               (i)  in their opinion, the consolidated financial statements and
          schedules of Grumman and its subsidiaries 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; and

               (ii) they have performed procedures specified by the
          Representatives with respect to the unaudited consolidated financial
          statements of Grumman and its subsidiaries incorporated by reference
          in the Registration Statement, including (a) reviewing of the minutes
          of meetings of the stockholders of Grumman, the board of directors of
          Grumman and any committees thereof as set forth in the minute books at
          March 31, 1994, (b) reading the unaudited consolidated financial
          statements of Grumman and its subsidiaries incorporated by reference
          in the Registration Statement and agreeing the amounts contained
          therein with Grumman's accounting records as of March 31, 1994 and for
          the three-month period then ended and (c) inquiring of certain
          officials of Grumman who have responsibility for financial and
          accounting matters whether the unaudited condensed consolidated
          financial statements incorporated by reference in the Registration
          Statement (x) are in conformity with generally accepted accounting
          principles applied on a basis substantially consistent with that of
          the audited consolidated financial statements of Grumman and its
          subsidiaries incorporated by reference in the Registration Statement
          and (y) comply as to form in all material respects with the applicable
          accounting requirements of the Act and the related published rules and
          regulations.

     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.

          (l)  The Representatives shall have received a letter, dated the
     Closing Date, of Ernst & Young, which reconfirms the matters set forth in
     their letter delivered pursuant to subsection (c) of this Section and which
     states in effect that (i) they are independent public accountants within
     the meaning of the Act and the applicable published Rules and Regulations
     thereunder, (ii) they audited the VAC Financial Statements and (iii)
     they have compared specified dollar amounts and other financial information
     with respect VAC contained in the prospectus with the financial
     information contained in the VAC Financial Statements and have found
     such dollar amounts and other financial information to be in agreement with
     such results.

                                       14



     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 election so to assume the defense thereof, the
indemnifying party will not be liable to such

                                       15




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
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.

                                       16




     (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 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.

                                       17




     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:  John R. Rettberg,
Corporate Vice President and Treasurer.

     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  /s/ John R. Rettberg
                                     ..................................
                                     Name: John R. Rettberg
                                     Title: Treasurer



                                   CS First Boston Corporation
                                   J. P. Morgan Securities Inc.
                                   Merrill Lynch, Pierce, Fenner &
                                   Smith Incorporated
                                   Salomon Brothers Inc
                                   On behalf of themselves and as
                                   Representatives of the Several
                                   Underwriters

                                   By CS First Boston Corporation

                                   By  /s/ G. M. Lodge
                                     ..................................
                                     Name: G. M. Lodge
                                     Title: Managing Director


                                       18



                                   SCHEDULE A


                               Grumman Corporation




                                       19



                                                                     EXHIBIT 1-2

                          NORTHROP GRUMMAN CORPORATION
                                   ("COMPANY")

                                 DEBT SECURITIES

                                 TERMS AGREEMENT
                                                                October 20, 1994
Northrop Grumman Corporation
1840 Century Park East
Los Angeles, California  90067

Dear Sirs:

     On behalf of several Underwriters named in Schedule A hereto and for their
respective accounts, we offer to purchase, on and subject to the terms and
conditions of the Underwriting Agreement filed as an exhibit to the Company's
registration statement on Form S-3 (No. 33-55143) ("Underwriting Agreement"),
the following securities ("Securities") on the following terms:

8-5/8% NOTES DUE 2004

          TITLE: 8-5/8% Notes Due 2004

          PRINCIPAL AMOUNT: $350,000,000

          INTEREST: 8 5/8% per annum, from October 27, 1994, payable
semiannually on April 15 and October 15, commencing April 15, 1995, to holder of
record on the preceding April 1 or October 1, as the case may be.

          MATURITY: October 15, 2004.

          DELAYED DELIVERY CONTRACTS: None.

          PURCHASE PRICE: 99.350% of principal amount (plus accrued interest
from October 27, 1994).

          EXPECTED REOFFERING PRICE:  100.00% of principal amount, subject to
change by the undersigned (plus accrued interest from October 27, 1994).

          CLOSING DATE: 7:00 A.M. (Pacific Time) on October 27, 1994 at the
offices of Latham & Watkins, 633 West Fifth Street, Suite 4000, Los Angeles,
California 90071, in New York Clearing House (next day) funds.

9-3/8% DEBENTURES DUE 2024

          TITLE:  9-3/8% Debentures Due 2024

          PRINCIPAL AMOUNT: $250,000,000

          INTEREST: 9 3/8% per annum, from October 27, 1994, payable
semiannually on April 15 and October 15, commencing April 15, 1995, to holder of
record on the preceding April 1 or October 1, as the case may be.

          MATURITY:  October 15, 2024



          OPTIONAL REDEMPTION:  The Debentures Due 2024 may not be redeemed by
the Company prior to October 15, 2004.  On and after such date, the Debentures
Due 2024 may be redeemed at the option of the Company, on not less than 30 days'
nor more than 60 days' notice, in whole or in part, at the redemption prices set
forth below, in each case plus accrued and unpaid interest (if any) to the date
fixed for redemption.

          The redemption prices (expressed as percentages of principal amount),
if redeemed during the 12-month period beginning October 15 of the years
indicated, are as follows:

               Percentage of                           Percentage of
                 Principal                               Principal
Year               Amount               Year              Amount
- ----           --------------           ----           -------------
2004               104.363%             2009             102.181%
2005               103.926              2010             101.745
2006               103.490              2011             101.309
2007               103.054              2012             100.873
2008               102.618              2013             100.436

and thereafter at 100% of the principal amount thereof.

          DELAYED DELIVERY CONTRACTS: None.

          PURCHASE PRICE: 98.475% of principal amount (plus accrued interest
from October 27, 1994).

          EXPECTED REOFFERING PRICE:  99.350% of principal amount, subject to
change by the undersigned (plus accrued interest from October 27, 1994).

          CLOSING DATE: 7:00 A.M. (Pacific Time) on October 27, 1994 at the
offices of Latham & Watkins, 633 West Fifth Street, Suite 4000, Los Angeles,
California 90071, in New York Clearing House (next day) funds.

     The respective principal amounts of the Securities to be purchased by each
of the Underwriters are set forth opposite their names in Schedule A hereto.

     The Securities will be issued in the form of global securities in the name
of the Depository Trust Company or its nominee.


                                        2


     Please signify your acceptance of our offer by signing the enclosed
response to us in the space provided and returning it to us.


                              Very truly yours,

                              CS First Boston Corporation
                              J.P. Morgan Securities Inc.
                              Merrill Lynch, Pierce, Fenner & Smith Incorporated
                              Salomon Brothers Inc
                              On behalf of themselves and as Representatives of
                              the Several Underwriters

                              By CS First Boston Corporation



                              By  /s/ G. M. Lodge
                                ------------------------
                                Name:  G. M. Lodge
                                Title: Managing Director


                                        3


                                   SCHEDULE A


PRINCIPAL PRINCIPAL AMOUNT OF UNDERWRITER AMOUNT OF DEBENTURES ----------- NOTES DUE 2004 DUE 2024 -------------- ---------- CS First Boston Corporation $ 84,550,000 $ 60,350,000 J.P. Morgan Securities Inc 84,400,000 60,300,000 Merrill Lynch, Pierce, Fenner & Smith Incorporated 84,400,000 60,300,000 Salomon Brothers Inc 84,400,000 60,300,000 Chase Securities, Inc. 12,250,000 8,750,000 Total ------------ ------------ $350,000,000 $250,000,000
4 To: CS First Boston Corporation J.P. Morgan Securities Inc. Merrill Lynch, Pierce, Fenner & Smith Incorporated Salomon Brothers Inc As Representatives of the Several Underwriters, c/o CS First Boston Corporation Park Avenue Plaza, New York, N.Y. 10055 We accept the offer contained in your letter, dated October 20, 1994, relating to $350,000,000 aggregate principal amount of our 8 5/8% Notes Due 2004 and $250,000,000 aggregate principal amount of our 9 3/8% Debentures Due 2024. We also confirm that the representations and warranties of the undersigned in the Underwriting Agreement filed as an exhibit to the undersigned's registration statement on Form S-3 (No. 33-55143) ("Underwriting Agreement") are true and correct, no stop order suspending the effectiveness of the Registration Statement (as defined in the Underwriting Agreement) or of any part thereof has been issued and no proceedings for that purpose have been instituted or, to the knowledge of the undersigned, are contemplated by the Securities and Exchange Commission. Very truly yours, Northrop Grumman Corporation By: /s/ John R. Rettberg ------------------------- Name: John R. Rettberg Title: Vice President and Treasurer 5








                                                                     EXHIBIT 4-1






                        NORTHROP GRUMMAN CORPORATION

                                     TO

          THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION), TRUSTEE


                               _______________


                                  INDENTURE

                         Dated as of October 15, 1994


                               _______________


                           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


                                       -i-


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


                                      -ii-


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


                                      -iii-


      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.


                                      -iv-


            INDENTURE dated as of October 15, 1994 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


                                    -1-


      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.


                                    -2-


            "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.


                                    -3-


            "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.


                                    -5-


            "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.


                                    -10-


            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.


                                    -11-


            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,


                                    -13-


            (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.


                                    -14-


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, insert -- 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


                                    -18-


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


                                    -19-


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 -20- 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 -33- 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 -34- 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. -35- 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 -36- (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 -37- 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 -38- 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 -39- 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. -40- 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 -41- 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 -42- 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, -43- 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. -44- 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. -45- 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 -46- (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. -47- 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, -48- 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 -49- 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. -50- 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. -51- 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 -52- 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 -53- 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 -54- 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 -55- 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: -56- 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 April 15 and October 15 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 April 1 or October 1 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. -57- 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 October 15 in each calendar year, commencing in 1995. 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. -58- 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. -59- 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 -60- 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, -61- 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. -62- 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. -63- 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 -64- 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 -65- 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. -66- 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. -67- 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 -68- 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 -69- 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 the Company or a Restricted Subsidiary, (ii) Funded Debt existing at the date of this Identure and extensions, renewals or replacements thereof, (iii) Funded Debt Secured by a Mortgage excluded from the operation of Section 1009(a) by clauses (i) through (vii) thereof, (iv) any guaranty by a Restricted Subsidiary of Funded Debt of the Company incurred in connection with the acquisition of such Restricted Subsidiary, or (v) Funded Debt of a corporation outstanding at the time such corporation first becomes a 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, -70- together with the other Funded Debt of all Restricted Subsidiaries (excluding Funded Debt permitted by clauses (i), (ii), (iii), (iv) and (v) 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 -71- 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, -72- (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. -73- 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 -74- 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 60 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 30 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 -75- 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 -76- 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 -77- 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 -78- 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 -79- 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. -80- 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 [SEAL] By /s/ John R. Rettberg -------------------------------- ATTEST: /s/ Sheila Gibbons - ---------------------- THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION), as Trustee [SEAL] By /s/ Valerie Dunbar -------------------------------- ATTEST: /s/ Brooks Von Arx, Jr. - ------------------------ -81- State of California ) ) County of Los Angeles ) On October 24, 1994 before me, Lily Jones Parker, Notary Public, personally appeared John R. Rettberg, / / 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. /s/ Lily Jones Parker _______________________________ State of New York ) ) County of New York ) On October 20, 1994 before me, Della K. Benjamin, Notary Public, personally appeared Valerie Dunbar and Brooks Von Arx, Jr., / / 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. /s/ Della K. Benjamin ------------------------------- -82-


                                                                     EXHIBIT 4-2

                              OFFICERS' CERTIFICATE
                      PURSUANT TO SECTIONS 201, 301 AND 303
                                OF THE INDENTURE


          The undersigned, Sheila Gibbons and John R. Rettberg, do hereby
certify that they are the duly appointed and acting Corporate Vice President
and Treasurer, respectively, of NORTHROP GRUMMAN CORPORATION, a Delaware
corporation (the "Company").  Each of the undersigned also hereby certifies,
pursuant to Sections 201, 301 and 303 of the Indenture, dated as of October 15,
1994, between the Company and The Chase Manhattan Bank (National Association),
as Trustee (the "Indenture"), that:

          A.   There is hereby established pursuant to resolutions duly adopted
by the Board of Directors of the Company on September 21, 1994, two series of
Securities (as defined in the Indenture) to be issued under the Indenture, with
the following terms:

                            I.  8-5/8% NOTES DUE 2004

          (1)  The title of the Securities of the series is "8-5/8%  Notes Due
     2004" (the "Notes").

          (2)  The limit upon the aggregate principal amount of the Notes which
     may be authenticated and delivered under the Indenture (except for Notes
     authenticated and delivered upon registration of transfer of, or in
     exchange for, or in lieu of, other Notes 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) is $350,000,000.

          (3)  Interest on the Notes shall be payable to the persons in whose
     names the Notes are registered at the close of business on the Regular
     Record Date (as specified below) for such interest.

          (4)  The principal of the Notes shall be payable, unless accelerated
     pursuant to the Indenture, on October 15, 2004.

          (5)  The rate at which each of the Notes shall bear interest shall be
     8-5/8% per annum.  Interest on the Notes shall be computed on the basis of
     a 360-day year of twelve 30-day months.  The date from which interest shall
     accrue for each of the Notes shall be October 27, 1994.  The Interest
     Payment Dates on which interest on the Notes


                                       -1-


     shall be payable are April 15 and October 15, commencing April 15, 1995.
     The Regular Record Date for the interest payable on the Notes on any
     Interest Payment Date shall be the April 1 or October 1 (whether or not a
     Business Day, as defined in the Indenture), as the case may be, next
     preceding such Interest Payment Date.

          (6)  The principal of (and premium, if any) and interest on the Notes
     shall be payable at the office or agency of the Company maintained for that
     purpose in the Borough of Manhattan, the City of New York (as of the date
     of this Certificate, such office being located at the office of the
     Trustee, 1 Chase Manhattan Plaza, New York, New York, 10081, Attention:
     Institutional Trust Group), in such coin or currency of the United States
     of America as at the time of payment is legal tender for payment of public
     and private debts, 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 (as defined in the Indenture) or by wire transfer to an account
     maintained by the person entitled thereto as specified in the Security
     Register.

          (7)  The Notes are not redeemable prior to the Stated Maturity (as
     defined in the Indenture) date of October 15, 2004.

          (8)  There is no obligation of the Company to redeem or purchase the
     Notes pursuant to any sinking fund or analogous provisions or to redeem or
     purchase any of the Notes prior to the Stated Maturity (as defined in the
     Indenture) at the option of the Holder thereof.

          (9)  There is no provision for the conversion or exchange of the
     Notes, either at the option of the Holder thereof or the Company, into or
     for another security or securities of the Company.

          (10) The Notes shall be issued only in fully registered form without
     coupons in denominations of $1,000 and integral multiples thereof.

          (11) The entire principal amount of the Notes shall be payable upon
     declaration of acceleration of the maturity thereof pursuant to Section 502
     of the Indenture.

          (12) The Notes shall be issued as Global Securities (as defined in the
     Indenture) and The Depository Trust Company shall be the Depositary (as
     defined in the Indenture) for the Notes.


                                       -2-


                         II.  9-3/8% DEBENTURES DUE 2024

          (1)  The title of the Securities of the series is "9-3/8%  Debentures
     Due 2024" (the "Debentures").

          (2)  The limit upon the aggregate principal amount of the Debentures
     which may be authenticated and delivered under the Indenture (except for
     Debentures authenticated and delivered upon registration of transfer of, or
     in exchange for, or in lieu of, other Debentures 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) is $250,000,000.

          (3)  Interest on the Debentures shall be payable to the persons in
     whose names the Debentures are registered at the close of business on the
     Regular Record Date (as specified below) for such interest.

          (4)  The principal of the Debentures shall be payable, unless
     accelerated pursuant to the Indenture, on October 15, 2024.

          (5)  The rate at which each of the Debentures shall bear interest
     shall be 9-3/8% per annum.  Interest on the Debentures shall be computed on
     the basis of a 360-day year of twelve 30-day months.  The date from which
     interest shall accrue for each of the Debentures shall be October 27, 1994.
     The Interest Payment Dates on which interest on the Debentures shall be
     payable are April 15 and October 15, commencing April 15, 1995.  The
     Regular Record Date for the interest payable on the Debentures on any
     Interest Payment Date shall be the April 1 or October 1 (whether or not a
     Business Day, as defined in the Indenture), as the case may be, next
     preceding such Interest Payment Date.

          (6)  The principal of (and premium, if any) and interest on the
     Debentures shall be payable at the office or agency of the Company
     maintained for that purpose in the Borough of Manhattan, the City of New
     York (as of the date of this Certificate, such office being located at the
     office of the Trustee, 1 Chase Manhattan Plaza, New York, New York, 10081,
     Attention: Institutional Trust Group), in such coin or currency of the
     United States of America as at the time of payment is legal tender for
     payment of public and private debts, 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 (as defined in the Indenture) or by wire transfer to an


                                       -3-


     account maintained by the person entitled thereto as specified in the
     Security Register.

          (7)  The Debentures may not be redeemed by the Company prior to
     October 15, 2004.  On and after such date, the Debentures may be redeemed
     at the option of the Company, on not less than 30 days' nor more than 60
     days' notice, in whole or in part, at the redemption prices set forth
     below, in each case plus accrued and unpaid interest (if any) to the date
     fixed for redemption.  The redemption prices (expressed as percentages of
     principal amount), if redeemed during the 12-month period beginning
     October 15 of the years indicated, are as follows:

                    Percentage of                        Percentage of
                      Principal                           Principal
     Year               Amount          Year                 Amount
     ----           -------------       ----             -------------

     2004 . . . . . .  104.363%         2009 . . . . . .  102.181%
     2005 . . . . . .  103.926          2010 . . . . . .  101.745
     2006 . . . . . .  103.490          2011 . . . . . .  101.309
     2007 . . . . . .  103.054          2012 . . . . . .  100.873
     2008 . . . . . .  102.618          2013 . . . . . .  100.436

     and thereafter at 100% of the principal amount thereof.

          (8)  There is no obligation of the Company to redeem or purchase the
     Debentures pursuant to any sinking fund or analogous provisions or to
     redeem or purchase any of the Debentures prior to the Stated Maturity (as
     defined in the Indenture) at the option of the Holder thereof.

          (9)  There is no provision for the conversion or exchange of the
     Debentures, either at the option of the Holder thereof or the Company, into
     or for another security or securities of the Company.

          (10) The Debentures shall be issued only in fully registered form
     without coupons in denominations of $1,000 and integral multiples thereof.

          (11) The entire principal amount of the Debentures shall be payable
     upon declaration of acceleration of the maturity thereof pursuant to
     Section 502 of the Indenture.

          (12) The Debentures shall be issued as Global Securities (as defined
     in the Indenture) and The Depository Trust Company shall be the Depositary
     (as defined in the Indenture) for the Debentures.

          B.   The forms of the Notes and the Debentures attached hereto as
Exhibits A and B, respectively, are approved.


                                       -4-


          C.   The Trustee is appointed as Paying Agent.

          D.   The foregoing forms and terms of the Notes and the Debentures
have been established in conformity with the provisions of the Indenture.

          E.   This Officers' Certificate shall constitute evidence of, and
shall be, action by the undersigned as Officers designated in the resolutions
referred to in paragraph A above, determining and setting the specific terms of
the Notes and the Debentures as set forth in paragraph A above.

          F.   Each of the undersigned has read the provisions of Sections 201,
301 and 303 of the Indenture and the definitions relating thereto and has
examined the resolutions referred to in paragraph A above and the forms of the
Notes and the Debentures and, in the opinion of each of the undersigned, has
made such examination or investigation as is necessary to enable the undersigned
to express an informed opinion as to whether or not all conditions precedent
provided in the Indenture relating to the establishment, authentication and
delivery of the Notes and the Debentures have been complied with.  In the
opinion of each of the undersigned, all such conditions precedent have been
complied with.

          IN WITNESS WHEREOF, the undersigned have hereunto executed this
Officers' Certificate as of the 20th day of October, 1994.


                              /s/ Sheila Gibbons
                              -------------------------------
                              Name: Sheila Gibbons
                              Title: Corporate Vice President


                              /s/ John R. Rettberg
                              -------------------------------
                              Name: John R. Rettberg
                              Title: Treasurer


                                       -5-


                                                                     EXHIBIT 4-3

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.


                          NORTHROP GRUMMAN CORPORATION
                              8-5/8% NOTE DUE 2004

No. ____________                                                $ ______________
                                                                CUSIP 666807 AD4

          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 Cede & Co., or registered assigns, the
principal sum of ______________________ Dollars on October 15, 2004 and to pay
interest thereon from October 27, 1994 or from the most recent Interest Payment
Date to which interest has been paid or duly provided for, semi-annually on
April 15 and October 15 in each year, commencing April 15, 1995 at the rate of
8-5/8% per annum, until the principal hereof is paid or made available for
payment.  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 April 1 or October 1 (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.

          Payment of the principal of (and premium, if any) and any such
interest on this Security will be made at the office


                                       -1-


or agency of the Company maintained for that purpose in the Borough of
Manhattan, the City of New York in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts; 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 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:  October 27, 1994

                              NORTHROP GRUMMAN CORPORATION



                              By _________________________

                              Attest:



                              ____________________________


     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


                                       -2-


                              [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 October 15, 1994 (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 limited in aggregate principal amount to $350,000,000.  The
Securities are unsecured general obligations of the Company.

          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 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.

          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.


                                       -3-


          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 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.


                                       -4-


          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.


                                       -5-


                                                                     EXHIBIT 4-4

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.


                          NORTHROP GRUMMAN CORPORATION
                           9-3/8%  DEBENTURE DUE 2024

No. _________________                                           $ ______________
                                                                CUSIP 666807 AE2

          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 Cede & Co., or registered assigns, the
principal sum of _____________________ Dollars on October 15, 2024 and to pay
interest thereon from October 27, 1994 or from the most recent Interest Payment
Date to which interest has been paid or duly provided for, semi-annually on
April 15 and October 15 in each year, commencing April 15, 1995 at the rate of
9-3/8% per annum, until the principal hereof is paid or made available for
payment.  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 April 1 or October 1 (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.


                                       -1-


          Payment of the principal of (and premium, if any) and any such
interest on this Security will be made at the office or agency of the Company
maintained for that purpose in the Borough of Manhattan, the City of New York in
such coin or currency of the United States of America as at the time of payment
is legal tender for payment of public and private debts; 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 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:  October 27, 1994

                              NORTHROP GRUMMAN CORPORATION



                              By _________________________

                              Attest:


                              ____________________________


     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


                                       -2-


                              [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 October 15, 1994 (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 limited in aggregate principal amount to $250,000,000.  The
Securities are unsecured general obligations of the Company.

          The securities of this series are subject to redemption upon not less
than 30 days' nor more than 60 days' notice by mail at any time on or after
October 15, 2004, 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 during the 12-month period beginning October 15 of the years
indicated,

               Redemption                          Redemption
Year              Price            Year               Price
- ----           -----------         ----            -----------
2004            104.363%           2009              102.181%
2005            103.926            2010              101.745
2006            103.490            2011              101.309
2007            103.054            2012              100.873
2008            102.618            2013              100.436


and thereafter at a Redemption Price equal to 100% of the principal amount,
together in the case of any such redemption 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.

          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.


                                       -3-


          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 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.

          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 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.


                                       -4-


          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.


                                       -5-


                                                                       EXHIBIT 5

                               October 20, 1994

                                                                       W12-52384






Northrop Grumman Corporation
1840 Century Park East
Los Angeles, California  90067


          Re:  $350,000,000 8-5/8% Notes Due 2004 and
               $250,000,000 9-3/8% Debentures Due 2024
               (collectively, the "Securities")
               ---------------------------------------

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 the Company's securities on a
Registration Statement on Form S-3 (Reg. No. 33-55143), as amended (the
"Registration Statement"), and the issuance and sale of the above-referenced
Securities as described in a Prospectus Supplement dated October 20, 1994 (the
"Prospectus Supplement").  The Securities are being sold pursuant to an
Underwriting Agreement dated October 20, 1994 (the "Underwriting Agreement") and
a Terms Agreement dated October 20, 1994 (the "Terms Agreement") executed
pursuant to the Underwriting Agreement among the Company and CS First Boston
Corporation, J.P. Morgan Securities Inc., Merrill Lynch, Pierce, Fenner & Smith
Incorporated and Salomon Brothers Inc, as Representatives of the several
Underwriters named therein.  The terms used herein, unless otherwise defined,
have the meanings assigned to them in the Underwriting Agreement and the Terms
Agreement.



Northrop Grumman Corporation
October 20, 1994
Page 2


          We have examined such documents as we have considered necessary for
purposes of this opinion, including (i) the amended Certificate of Incorporation
and By-Laws of the Company, (ii) the Indenture dated as of October 15, 1994,
between the Company and The Chase Manhattan Bank (National Association), as
Trustee (the "Indenture"), (iii) the forms of 8-5/8% Note Due 2004 and 9-3/8%
Debenture Due 2024, and (iv) the Officers' Certificate dated as of October 20,
1994 pursuant to Sections 201, 301 and 303 of the Indenture.  In such
examination, we have assumed 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 Securities have been duly and validly authorized by the
Company; and

          2.  Upon proper authentication, sale and delivery at the price and in
accordance with the terms set forth in the Registration Statement, the
Prospectus Supplement, the Underwriting Agreement and the Terms Agreement, the
Securities will be legally issued and binding obligations of the Company,
subject to the application of bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability relating to
or affecting creditors' rights, general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law)
and limitations imposed by applicable New York or other laws of general
applicability which limit or restrict the enforceability of specific provisions
or the availability of specific remedies.

          We hereby consent to the filing of this opinion as an exhibit to the
Current Report on Form 8-K of the Company dated the date hereof.  In giving such
consent, we do not thereby



Northrop Grumman Corporation
October 20, 1994
Page 3


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


2\A\L071743N.LDA


NEWS                                                       FOR IMMEDIATE RELEASE
NORTHROP GRUMMAN
[Logo]

NET INCOME UP 50%


                NORTHROP GRUMMAN REPORTS SHARP INCREASE IN SALES,
             BUSINESS BACKLOG FOLLOWING GRUMMAN, VOUGHT ACQUISITIONS


          LOS ANGELES -- Oct. 19, 1994 -- Northrop Grumman Corporation today
reported third quarter sales of $1.93 billion, up 58 percent from the
$1.22 billion recorded in the third quarter of 1993.  Net income during the
quarter was $39 million, up 50 percent from the $26 million recorded in the
third quarter of 1993.  Earnings per share totaled 79 cents, compared with
54 cents per share in the corresponding quarter of 1993.

          Last year's third quarter included a pretax loss provision of
$14 million for the AGM-137 Tri-Service Standoff Attack Missile (TSSAM) program
and an $18 million retroactive tax increase enacted in August 1993.  The benefit
in this year's third quarter from the delivery of two B-2 bombers to the Air
Force was largely offset by a $20 million pretax loss provision on TSSAM, due to
increased costs to complete the development program.  The company also recorded
a $1 million loss on the 747 jetliner program as a result of a cumulative margin
rate adjustment on existing 747 production contracts.  The one-time adjustment
was made principally to cover increased costs allocated to the contracts as a
result of establishing a separate commercial aircraft operating element.

          Northrop Grumman's business backlog at Sept. 30, 1994, was
$12.4 billion versus $7.2 billion reported a year earlier.


                                     -more-



                                                                          Page 2

NET INCOME UP 50%


                NORTHROP GRUMMAN REPORTS SHARP INCREASE IN SALES,
             BUSINESS BACKLOG FOLLOWING GRUMMAN, VOUGHT ACQUISITIONS


          Following its acquisition of the Grumman Corporation last April, the
company completed its purchase of the Vought Aircraft Company during the
third quarter of 1994.  Northrop Grumman results for the third quarter and the
first nine months of 1994 include Grumman activity for only the second and
third quarters, and Vought for August and September.  Comparative results for
1993 do not include Vought or Grumman data.

          Without the Grumman and Vought acquisitions, the company's
third quarter sales would have declined 6 percent due primarily to lower B-2
revenues and fewer 747 shipset deliveries.  F/A-18E/F development revenues rose
during the quarter.

          The company said the Grumman acquisition was basically neutral to
earnings in the third quarter, while Vought was accretive.

          Net income for the first nine months of 1994 totaled $156 million, up
19 percent from the $131 million in the same period of 1993.  Earnings per share
in the first nine months of 1994 were $3.17 compared to $2.74 in the first
nine months of last year.  The increase in net income for the first nine months
of 1994 resulted from the same factors cited for the improvement in
third quarter net income.

          Sales for the first three quarters of 1994 were $4.8 billion versus
$3.8 billion the first three quarters of 1993.  The increase achieved from
including Grumman and Vought's post-acquisition sales and higher F/A-18E/F
revenue was partially offset by lower B-2 revenue and fewer F/A-18C/D shipset
deliveries.


                                      -more-



                                                                          Page 3

NET INCOME UP 50%


                NORTHROP GRUMMAN REPORTS SHARP INCREASE IN SALES,
             BUSINESS BACKLOG FOLLOWING GRUMMAN, VOUGHT ACQUISITIONS


          At Sept. 30, 1994, Northrop Grumman's total debt was $1.9 billion,
compared with $2 billion at June 30, 1994, and $370 million at Sept. 30, 1993.
The company's $1.9 billion net debt at Sept. 30, 1994, remained unchanged from
the close of the previous quarter.

          Northrop Grumman had an average of 49,115,305 shares outstanding
during the first nine months of 1994, compared with 47,816,403 during the first
nine months of 1993.





NORTHROP GRUMMAN CORPORATION - COMPARATIVE FINANCIAL RESULTS ------------------------------------------------------------ PERIOD JANUARY 1, 1994 THROUGH SEPTEMBER 30, 1994 ------------------------------------------------- SALES (IN MILLIONS) MARCH 31 JUNE 30 SEPTEMBER 30 NINE MONTHS - ------------------ -------- ------- ------------ ----------- 1994 $1,218 $1,686 $1,927 $4,831 1993 1,275 1,312 1,220 3,807 % Change (4%) 29% 58% 27% NET INCOME (IN MILLIONS) - ------------------------ 1994 $ 52 $ 65 $ 39 $ 156 1993 52 53 26 131 % Change 23% 50% 19% EARNINGS PER SHARE - ------------------ 1994 $ 1.05 $ 1.33 $ .79 $ 3.17 1993 1.09 1.12 .54 2.74 % Change (4%) 19% 46% 16%
NORTHROP CORPORATION OPERATING RESULTS NINE MONTHS ENDED SEPTEMBER 30, 1994 ($ IN MILLIONS) FUNDED CONTRACT ACQUISITIONS ORDER BACKLOG --------------------- ------------- THIRD QUARTER FIRST NINE MONTHS SEPTEMBER 30, ------------- ----------------- ------------- 1994 1993 1994 1993 1994 1993 ---- ---- ---- ---- ---- ---- MILITARY AND COMMERCIAL AIRCRAFT $1,528 $1,064 $7,277 $3,060 $9,515 $6,026 ELECTRONICS AND SYSTEMS INTEGRATION 507 146 2,594 429 2,306 626 MISSILES AND UNMANNED VEHICLE SYSTEMS 7 163 160 310 423 491 DATA SYSTEMS AND SERVICES 144 52 403 69 224 58 INTERSEGMENT ELIMINATIONS (21) (22) (158) (79) (106) (44) ------- ------- ------- ------- -------- -------- TOTAL $2,165 $1,403 $10,276 $3,789 $12,364 $7,157 ------- ------- ------- ------- -------- -------- ------- ------- ------- ------- -------- -------- NET SALES OPERATING PROFIT (LOSS) -------------------- ----------------------- THIRD QUARTER FIRST NINE MONTHS THIRD QUARTER 1ST NINE MONTHS ------------- ----------------- --------------------------------- 1994 1993 1994 1993 1994 1993 1994 1993 ---- ----- ---- ---- ---- ---- ---- ----- MILITARY AND COMMERCIAL AIRCRAFT $1320 $960 $3,412 $3,033 $121 $84 $317 $282 ELECTRONICS AND SYSTEMS INTEGRATION 484 178 1,047 536 40 15 87 46 MISSILES AND UNMANNED VEHICLE SYSTEMS 68 89 264 268 (20) (11) (14) (25) DATA SYSTEMS AND SERVICES 94 19 222 58 4 2 8 3 INTERSEGMENT ELIMINATIONS (39) (26) (114) (88) ------- ------- ------- ------- ------- ------- -------- ------- TOTAL $1,927 $1,220 $4,831 $3,807 145 90 398 306 ------- ------- ------- ------- ------- ------- ------- ------- ADJUSTMENTS TO RECONCILE OPERATING PROFIT TO OPERATING MARGIN: OTHER DEDUCTIONS 4 2 4 3 INCLUDED IN OPERATING PROFIT (14) (1) (29) (15) GENERAL CORPORATE EXPENSES (28) (19) (84) (71) CORPORATE RETIREE BENEFIT INCOME (COST) (2) 11 32 36 ------- ------- ------- ------- OPERATING MARGIN 105 83 321 259 OTHER DEDUCTIONS (8) (4) (1) (2) INTEREST EXPENSE (35) (10) (73) (30) ------- ------- ------- ------- INCOME BEFORE INCOME TAXES 62 69 247 227 FEDERAL INCOME TAXES 23 43 91 96 ------- ------- ------- ------- NET INCOME $39 $26 $156 $131 ------- ------- ------- ------- ------- ------- ------- ------- AIRCRAFT UNITS DELIVERED F/A-18 C/D 10 10 32 40 747 7 14 25 45 E-2 2 3