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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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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) November 17, 1999
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TRW Inc.
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
OHIO 1-2384 34-575430
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(STATE OR OTHER JURISDICTION (COMMISSION FILE (I.R.S. EMPLOYER
OF INCORPORATION ) NUMBER) IDENTIFICATION NUMBER)
1900 RICHMOND ROAD, CLEVELAND, OH 44124
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
Registrant's telephone number, including area code: (216) 291-7000
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(FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT)
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Item 5. Other Events
On November 17, 1999, TRW Inc. (the "Company") commenced a program for
the offer of Medium-Term Notes, Series E, due nine months or more from the date
of issuance ("Medium-Term Notes") for aggregate gross proceeds of up to
$2,500,000,000. The Medium-Term Notes are part of the $2,500,000,000 debt
securities, common stock, warrants to purchase debt securities, warrants to
purchase common stock, stock purchase contracts and stock purchase units
registered by the Company pursuant to Registration Statements filed with the
Securities and Exchange Commission on Form S-3 (Registration Nos. 333-48443 and
333-89133). The issuance and sale of the Medium-Term Notes may be made from time
to time in various amounts pursuant to an Indenture dated as of May 1, 1986,
between the Company and The Chase Manhattan Bank, as successor trustee to Mellon
Bank, N.A., as supplemented.
The Medium-Term Notes will be distributed pursuant to a Distribution
Agreement among the Company and certain agents. The form of the Distribution
Agreement is attached hereto as Exhibit 1 and incorporated by reference herein.
The Medium-Term Notes may bear fixed or floating rates of interest and will be
issued substantially in the form attached hereto as Exhibit 4 and incorporated
by reference herein.
Item 7. Financial Statements and Exhibits
(c) Exhibits
1 Distribution Agreement, dated November 17, 1999
4 Form of Medium-Term Note, Series E.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
TRW Inc.
By:
/s/ William B. Lawrence
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William B. Lawrence
Executive Vice President,
General Counsel and Secretary
DATE: November 18, 1999
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EXHIBIT INDEX
EXHIBIT TITLE
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1 Distribution Agreement, dated November 17, 1999
4 Form of Medium-Term Note, Series E
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EXHIBIT 1
TRW INC.
$2,500,000,000 MEDIUM-TERM NOTES, SERIES E
DUE NINE MONTHS OR MORE
FROM DATE OF ISSUE
DISTRIBUTION AGREEMENT
November 17, 1999
New York, New York
MORGAN STANLEY & CO. INCORPORATED
1585 Broadway
New York, New York 10036
GOLDMAN, SACHS & CO.
85 Broad Street
New York, New York 10004
J.P. MORGAN SECURITIES INC.
60 Wall Street
New York, New York 10260
Dear Sirs:
TRW Inc., an Ohio corporation (the "Company"), confirms its agreement
with each of you with respect to the issue and sale by the Company of up to U.S.
$2,500,000,000 (or the equivalent thereof if any of the notes are denominated in
foreign currencies or currency units) aggregate principal amount of its
Medium-Term Notes Due Nine Months or more from Date of Issue (the "Notes"). The
Notes will be issued under an Indenture, dated as of May 1, 1986, between the
Company and The Chase Manhattan Bank, as successor trustee (the "Trustee"), as
supplemented by a First Supplemental Indenture, dated as of August 24, 1989, the
Second, Third, Fourth and Fifth Supplemental Indentures, each dated as of June
2, 1999, and the Sixth and Seventh Supplemental Indentures, each dated as of
June 23, 1999, between the Company and the Trustee (as so supplemented, the
"Indenture"). Notes denominated in U.S. dollars will be issued in minimum
denominations of U.S. $1,000 and in any denomination that is an integral
multiple thereof. Notes not denominated in U.S. dollars will be denominated as
set forth in the applicable supplement to the Prospectus referred to below. Each
Note will be represented by either a Global Security registered in the name of a
nominee of The Depository Trust Company, as Depositary (a "Book-Entry Note"), or
a certificate issued in definitive form (a "Certificated Note"), as set forth
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in the applicable supplement to the Prospectus referred to below. The Notes will
be issued only in fully registered form and will have the annual interest rates,
maturities and, if appropriate, other terms set forth in a supplement to the
Prospectus referred to below. Administrative procedures with respect to the sale
of Notes shall be agreed upon from time to time by you and the Company (the
"Procedures"). You and the Company agree to perform the respective duties and
obligations specifically provided to be performed by you and the Company herein
and in the Procedures. The Procedures may only be amended by written agreement
of the Company and you after notice to, and with the approval of, the Trustee.
For the purposes of this Agreement, the term "Agent" shall refer to any of you
acting solely in the capacity as agent for the Company pursuant to Section 2(a)
and not as principal (collectively, the "Agents"), the term the "Purchaser"
shall refer to one of you acting solely as principal pursuant to Section 2(b)
and not as agent, and the term "you" shall refer to you collectively whether at
any time any of you is acting in both such capacities or in either such
capacity; PROVIDED, HOWEVER, that for purposes of Sections 8 and 9 herein, any
reference to the "Agent" or "Agents" shall refer to any or all of you (as
applicable) whether acting in the capacity as agent for the Company or in the
capacity as Purchaser.
SECTION 1. REPRESENTATIONS AND WARRANTIES. The Company represents and
warrants to, and agrees with, you as set forth below in this Section 1. Certain
terms used in this Section 1 are defined in paragraph (c) hereof.
(a) The Company meets the requirements for use of Form S-3 under the
Securities Act of 1933 (the "Act") and has filed with the Securities and
Exchange Commission (the "Commission") a Registration Statement on such Form,
including a basic prospectus relating to such Registration Statement, which has
become effective, for the registration under the Act of offers and sales of debt
securities, shares of common stock, warrants to purchase debt securities and
shares of common stock, stock purchase contracts and stock purchase units (the
"Securities"), including the Notes, producing aggregate proceeds of up to
$2,500,000,000. Such Registration Statement, as amended at the date of this
Agreement, meets the requirements set forth in Rule 415(a)(1)(ix) or (x) and
complies in all other material respects with said Rule. The Company has included
in such Registration Statement, or has filed or will file with the Commission
pursuant to Rule 424, a supplement to the form of prospectus included in such
Registration Statements relating to the Notes and the plan of distribution
thereof (the "Prospectus Supplement"). In connection with the sale of Notes, the
Company proposes to file with the Commission pursuant to Rule 424 further
supplements to the Prospectus Supplement specifying the interest rates, maturity
dates and, if appropriate, other terms of the Notes sold pursuant hereto or the
offering thereof.
(b) As of the Execution Time, on the Effective Date, when any
supplement to the Prospectus is filed with the Commission, as of the date of any
Terms Agreement (as defined by Section 2(b)) and at the date of delivery by the
Company of any Notes sold hereunder (a "Closing Date"), (i) the Registration
Statement, as amended as of any such time, and the Prospectus, as supplemented
as of any such time, and the Indenture will comply in all material respects with
the applicable requirements of the Act and the Trust Indenture Act of 1939, as
amended (the "Trust Indenture Act"), and the respective rules and regulations
thereunder; (ii) the Registration
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Statement, as amended as of any such time, did not or will not contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein not
misleading; and (iii) the Prospectus, as supplemented as of any such time, will
not contain any untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; PROVIDED, HOWEVER,
that the Company makes no representations or warranties as to (i) that part of
the Registration Statement which shall constitute the Statement of Eligibility
and Qualification (Form T-1) under the Trust Indenture Act of the Trustee or
(ii) the information contained in or omitted from the Registration Statement or
the Prospectus (or any supplement thereto) in reliance upon and in conformity
with information furnished in writing to the Company by or on behalf of any of
you specifically for use in the Registration Statement or the Prospectus (or any
supplement thereto).
(c) The terms which follow, when used in this Agreement, shall have the
meanings indicated. The term "the Effective Date" shall mean each date that the
Registration Statement and any post-effective amendment or amendments thereto
became or become effective. "Execution Time" shall mean the date and time that
this Agreement is executed and delivered by the parties hereto. "Basic
Prospectus" shall mean the form of basic prospectus relating to the Securities
contained in the Registration Statement at the Effective Date. "Prospectus"
shall mean the Basic Prospectus as supplemented by the Prospectus Supplement.
"Registration Statement" shall mean the Registration Statements No. 333-48443
and No. 333-89133, including incorporated documents, exhibits and financial
statements, as amended at the Execution Time. "Rule 415" and "Rule 424" refer to
such rules under the Act. Any reference herein to the Registration Statement,
the Basic Prospectus, the Prospectus Supplement or the Prospectus shall be
deemed to refer to and include the documents incorporated by reference therein
pursuant to Item 12 of Form S-3 which were filed under the Exchange Act on or
before the Effective Date of the Registration Statement or the issue date of the
Basic Prospectus, the Prospectus Supplement or the Prospectus, as the case may
be; and any reference herein to the terms "amend," "amendment" or "supplement"
with respect to the Registration Statement, the Basic Prospectus, the Prospectus
Supplement or the Prospectus shall be deemed to refer to and include the filing
of any document under the Exchange Act after the Effective Date of the
Registration Statement or the issue date of the Basic Prospectus, the Prospectus
Supplement or the Prospectus, as the case may be, deemed to be incorporated
therein by reference.
(d) Due Incorporation and Qualification. The Company has been duly
incorporated and is validly existing as a corporation in good standing under the
laws of Ohio, with corporate power and authority to own, lease and operate its
properties and to conduct the business being conducted by it as described in the
Prospectus; and the Company is duly qualified as a foreign corporation to
transact business in each jurisdiction in which the conduct of its business or
its ownership or leasing of property requires such qualification except to the
extent that the failure to be so qualified would not have a material adverse
effect on the financial condition or the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one enterprise; and
the Company is in good standing in the State of California and the Commonwealth
of Virginia.
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(e) Significant Subsidiaries. If the Company has one or more
Significant Subsidiaries, each Significant Subsidiary of the Company has been
duly incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation, has corporate power and
authority to own, lease and operate its properties and conduct its business as
described in the Registration Statement, and is duly qualified to do business as
a foreign corporation and is in good standing in any jurisdiction where such
Significant Subsidiary has material property or assets, and is duly qualified to
do business as a foreign corporation and is in good standing in each other
jurisdiction where the character of its properties or the nature of its business
requires such qualification (except where the failure to so qualify would not
have a material adverse effect on the financial condition, or the earnings,
business affairs or business prospects of the Company and its subsidiaries taken
as a whole); all of the issued and outstanding capital stock of each Significant
Subsidiary has been duly authorized and validly issued and is fully paid and
nonassessable, and all of such capital stock, except for directors' qualifying
shares, is owned by the Company, directly or through subsidiaries, free and
clear of any mortgage, pledge, lien, encumbrance, claim or equity. For purposes
of this paragraph a "Significant Subsidiary" shall mean a "significant
subsidiary" as defined in Rule 405 of Regulation C under the Act.
(f) Incorporated Documents. The documents incorporated by reference in
the Prospectus, at the time they were or hereafter are filed with the
Commission, complied and will comply in all material respects with the
requirements of the Securities Exchange Act of 1934 (the "Exchange Act") and the
rules and regulations thereunder and, when read together and with the other
information in the Prospectus, did not and will not contain an untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were or are made, not misleading.
(g) Financial Statements. The financial statements of the Company and
its consolidated subsidiaries included or incorporated by reference in the
Registration Statement and the Prospectus present fairly the consolidated
financial position of the Company and its consolidated subsidiaries as at the
dates indicated and the consolidated results of their operations for the periods
specified; and except as stated therein, said financial statements have been
prepared in conformity with generally accepted accounting principles in the
United States applied on a consistent basis.
(h) Legal Proceedings; Contracts. Except as may be set forth in the
Prospectus, there is no action, suit or proceeding before or by any court or
governmental agency or body, domestic or foreign, now pending, against or
affecting, the Company or any of its subsidiaries, which might, in the opinion
of the Company, result in any material adverse change in the financial position
of the Company and its subsidiaries taken as a whole, or might materially and
adversely affect the assets of the Company and its subsidiaries taken as a
whole; and there are no contracts or documents of the Company or any of its
subsidiaries which are required to be filed as exhibits to the Registration
Statement by the Act or by the rules and regulations thereunder which have not
been so filed.
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(i) Authorization and Validity of the Notes. The Notes have been duly
authorized for issuance and sale pursuant to this Agreement and, when issued,
authenticated and delivered pursuant to the provisions of this Agreement and the
Indenture against payment of the consideration therefor specified in the
Prospectus or pursuant to any Terms Agreement, the Notes will constitute valid
and legally binding obligations of the Company enforceable in accordance with
their terms, except as enforcement thereof may be limited by bankruptcy,
insolvency, or other laws relating to or affecting enforcement of creditors'
rights or by general equity principles, and except further as enforcement
thereof may be limited by (i) requirements that a claim with respect to any
Notes denominated other than in United States dollars (or a foreign currency or
currency unit judgment in respect of such claim) be converted into United States
dollars at a rate of exchange prevailing on a date determined pursuant to
applicable law or (ii) governmental authority to limit, delay or prohibit the
making of payments in a foreign currency or currency units or payments outside
the United States; the Notes and the Indenture will be substantially in the form
heretofore delivered to the Agent and conform in all material respects to all
statements relating thereto contained in the Prospectus; and the Notes will be
entitled to the benefits provided by the Indenture.
SECTION 2. APPOINTMENT OF AGENTS; SOLICITATION BY THE AGENTS OF OFFERS
TO PURCHASE; SALES OF NOTES TO A PURCHASER. (a) Subject to the terms and
conditions set forth herein and subject to the reservation by the Company of the
right to sell Notes directly to investors on its own behalf or through other
agents, the Company hereby authorizes each of the Agents to act as its agent to
solicit offers for the purchase of all or part of the Notes from the Company.
On the basis of the representations and warranties, and subject to the
terms and conditions set forth herein, each of the Agents agrees, as agent of
the Company, to use its reasonable best efforts to solicit offers to purchase
the Notes from the Company upon the terms and conditions set forth in the
Prospectus (and any supplement thereto) and in the Procedures.
The Company reserves the right, in its sole discretion, to instruct the
Agents to suspend at any time, for any period of time or permanently, the
solicitation of offers to purchase the Notes. Upon receipt of instructions from
the Company, the Agents will forthwith suspend solicitation of offers to
purchase Notes from the Company until such time as the Company has advised them
that such solicitation may be resumed. The Company shall not be required to
comply with the provisions of Sections 4(b), 4(h), 4(i) and 4(j) after such
instruction to suspend the solicitation of offers to purchase the Notes until
the time the Company shall determine that solicitation of offers to purchase the
Notes should be resumed or shall subsequently enter into a Terms Agreement with
any or all of the Agents at which time the Company shall promptly comply with
the provisions of Sections 4(b), 4(h), 4(i) and 4(j).
The Company agrees to pay each Agent a commission on the Closing Date,
with respect to each sale of Notes by the Company as a result of a solicitation
made by such Agent, in an amount equal to that percentage specified in Exhibit B
hereto of the aggregate principal amount of the Notes sold by the Company;
PROVIDED, HOWEVER, that the commission payable by the Company to each Agent with
respect to each such sale of Notes with maturities greater than 30
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years will be negotiated at the time the Company determines to issue such Notes.
Such commission shall be payable as specified in the Procedures.
Subject to the provisions of this Section and to the Procedures, offers
for the purchase of Notes may be solicited by an Agent as agent for the Company
at such time and in such amounts as such Agent deems advisable. The Company may
from time to time offer Notes for sale otherwise than through an Agent. The
Company reserves the right to solicit or accept offers to purchase Notes through
an agent other than the Agents; PROVIDED, HOWEVER, that (i) in the case of a
continuous offering by such agent, the Company has entered into a distribution
agreement with such Agent with terms, conditions and obligations substantially
identical to this Agreement and the Company, promptly after entering into such
distribution agreement, notifies the Agents that it has done so, or (ii) in the
case of a specific purchase of Notes by such agent, the Company engages such
agent at a commission that is the same as that contained in Exhibit B to this
Agreement with respect to Notes of identical maturities, and the Company,
promptly after making such sale, notifies the Agents that it has done so.
(b) Subject to the terms and conditions stated herein, whenever the
Company and one of you determines that the Company shall sell Notes directly to
you as Purchaser, each such sale of Notes shall be made in accordance with the
terms of this Agreement and any supplemental agreement relating thereto between
the Company and the Purchaser. Each such supplemental agreement (which may be an
oral agreement between any Agent and the Company or may be written or
transmitted by any generally accepted form of telecommunication) is herein
referred to as a "Terms Agreement." Unless the context otherwise requires, each
reference contained herein to "this Agreement" shall be deemed to include any
applicable Terms Agreement between the Company and any Agent. Each such Terms
Agreement, whether oral or in writing, shall be with respect to such information
(as applicable) as is specified in Exhibit A hereto. The Purchaser's commitment
to purchase Notes pursuant to any Terms Agreement shall be deemed to have been
made on the basis of the representations and warranties of the Company herein
contained and shall be subject to the terms and conditions herein set forth.
Each Terms Agreement shall describe the Notes to be purchased by the Purchaser
pursuant thereto, specify the principal amount of such Notes, the price to be
paid to the Company for such Notes, the rate at which interest will be paid on
the Notes, the Closing Date for such Notes, the place of delivery of the Notes
and payment therefor, the method of payment, any provisions relating to the
reoffering of the Notes and any requirements for the delivery of the opinions of
counsel, the certificates from the Company or its officers, and the letter from
the Company's independent public accountants, pursuant to Section 6(b). Each
Agent may offer Notes it has purchased to other dealers, or may use a selling or
dealer group in connection with the resale of the Notes purchased, subject to
the Company's prior approval. Such Agent may sell Notes to any such approved
dealer or selling or dealer group at a discount, and unless otherwise specified
in the applicable Terms Agreement or Pricing Supplement, such discount will not
be in excess of the discount to be received by such Agent from the Company.
Delivery of any certificates for Notes sold to the Purchaser pursuant
to any Terms Agreement shall be made as agreed to between the Company and the
Purchaser as set forth in the applicable Terms Agreement,not later than the
Closing Date set forth in such Terms Agreement,
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against payment of funds to the Company in the net amount due to the Company
for such Notes by the method and in the form set forth in the applicable Terms
Agreement. Unless otherwise indicated in an applicable Terms Agreement, any Note
sold to an Agent as principal shall be purchased by such Agent at a price equal
to 100% of the principal amount thereof less a percentage equal to the
commission applicable to an agency sale of a Note of identical maturity, and may
be resold by such Agent as set forth herein.
SECTION 3. PROCEDURES FOR OFFERING AND SALE OF NOTES. Each Agent and
the Company agree to perform the respective duties and obligations specifically
provided to be performed by them in the Procedures.
SECTION 4. AGREEMENTS. The Company agrees with you that:
(a) The Company will use its reasonable best efforts to cause the
Registration Statement, if not effective at the Execution Time, and any
amendment thereto, to become effective. Prior to the termination of the offering
of the Notes, the Company will not file any amendment of the Registration
Statement or supplement to the Prospectus (except for an amendment or supplement
relating to an offering of Securities other than the Notes) unless the Company
has furnished each of you a copy for your review prior to filing and will not
file any such proposed amendment or supplement (except for or relating to an
offering of Securities other than the Notes) to which any of you reasonably
objects. Subject to the foregoing sentence, the Company will cause each
supplement to the Prospectus to be filed with the Commission pursuant to Rule
424 within the time period prescribed. The Company will promptly advise each of
you (i) when the Registration Statement, if not effective at the Execution Time,
and any amendment thereto, shall have become effective, (ii) when the
Prospectus, and any supplement thereto, shall have been filed with the
Commission pursuant to Rule 424, (iii) when, prior to the termination of the
offering of the Notes, any amendment of the Registration Statement shall have
been filed or become effective, (iv) of any request by the Commission for any
amendment of the Registration Statement or supplement to the Prospectus or for
any additional information, (v) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or the
institution or threatening of any proceeding for that purpose and (vi) of the
receipt by the Company of any notification with respect to the suspension of the
qualification of the Notes for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose. The Company will use its best
efforts to prevent the issuance of any such stop order and, if issued, to obtain
as soon as possible the withdrawal thereof.
(b) If, at any time when a prospectus relating to the Notes is required
to be delivered under the Act, any event occurs as a result of which the
Prospectus as then supplemented would include any untrue statement of a material
fact or omit to state any material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, or if it shall be necessary to amend the Registration Statement or
to supplement the Prospectus to comply with the Act or the Exchange Act or the
respective rules thereunder, the Company promptly will (i) notify each of you to
suspend solicitation of offers to purchase Notes (and, if so notified by the
Company, each of you shall forthwith suspend such solicitation and cease using
the Prospectus as then supplemented), (ii) prepare and file with the Commission,
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subject to the second sentence of paragraph (a) of this Section 4, an amendment
or supplement which will correct such statement or omission or effect such
compliance and (iii) supply any supplemented Prospectus to each of you in such
quantities as you may reasonably request. If such amendment or supplement, and
any documents, certificates and opinions furnished to each of you pursuant to
this Section 4 in connection with the preparation or filing of such amendment or
supplement are satisfactory in all respects to you, you will, upon the filing of
such amendment or supplement with the Commission and upon the effectiveness of
an amendment to the Registration Statement, if such an amendment is required,
resume your obligation to solicit offers to purchase Notes hereunder.
(c) As soon as practicable, the Company will make generally available
to its security holders and to each of you an earnings statement or statements
of the Company and its subsidiaries which will satisfy the provisions of Section
11(a) of the Act and Rule 158 under the Act.
(d) The Company will furnish to each of you and your counsel, without
charge, copies of the Registration Statement (including exhibits thereto) and,
so long as delivery of a prospectus may be required by the Act, as many copies
of the Prospectus and any supplement thereto as you may reasonably request.
(e) The Company will arrange for the qualification of the Notes for
sale under the laws of such jurisdictions as any of you may reasonably
designate, will maintain such qualifications in effect so long as required for
the distribution of the Notes, and will arrange for the determination of the
legality of the Notes for purchase by institutional investors.
(f) The Company, whether or not any sale of the Notes is consummated,
will pay all expenses incident to the performance of its obligations under this
Agreement, including: (i) the preparation and filing of the Registration
Statement and all amendments thereto and the Prospectus and any amendments or
supplements thereto; (ii) the preparation, filing and printing of this
Agreement; (iii) the preparation, printing, issuance and delivery of the Notes;
(iv) the fees and disbursements of the Company's accountants and counsel, of the
Trustee and its counsel, and of any Calculation Agent or Exchange Rate Agent;
(v) the reasonable fees and disbursements of counsel to the Agents incurred in
connection with the transactions contemplated hereby; (vi) the qualification of
the Notes under securities laws in accordance with the provisions of paragraph
(e) of this Section 4, including filing fees and the reasonable fees and
disbursements of counsel to the Agents in connection therewith; (vii) the
printing and delivery to you in quantities as hereinabove stated of copies of
the Registration Statement and any amendments thereto, and of the Prospectus and
any amendments or supplements thereto, and the delivery by you of the Prospectus
and any amendments or supplements thereto in connection with solicitations or
confirmations of sales of the Notes; (viii) the preparation, printing and
delivery to you of copies of the Indenture; (ix) any fees charged by rating
agencies for the rating of the Notes; (x) the fees and expenses, if any,
incurred in connection with the listing of the Notes on any securities exchange;
(xi) the fees and expenses, if any, incurred with respect to any filing with the
National Association of Securities Dealers, Inc.; and (xii) any advertising and
other out-of-pocket expenses of the Agents incurred with the approval of the
Company.
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(g) Each acceptance by the Company of an offer to purchase Notes and
each delivery of Notes will be deemed to be a reconfirmation to you of the
representations and warranties of the Company contained herein.
(h) Each time that the Registration Statement or the Prospectus is
amended or supplemented (other than by an amendment or supplement relating to
any offering of Securities other than the Notes or providing solely for the
specification of or a change in the maturity dates, the interest rates, the
issuance prices or other similar terms of any Notes sold pursuant hereto), the
Company will deliver or cause to be delivered promptly to each of you a
certificate of the Company, signed by two officers, one of whom shall be the
principal financial officer, treasurer or controller of the Company, and the
other of whom shall be the chief executive officer, the chief operational
officer, an executive vice president, the general counsel or any assistant or
associate general counsel of the Company, dated the date of the effectiveness of
such amendment or the date of the filing of such supplement, in form reasonably
satisfactory to you, of the same tenor as the certificate referred to in Section
5(d) but modified to relate to the last day of the fiscal quarter for which
financial statements of the Company were last filed with the Commission and to
the Registration Statement and the Prospectus as amended and supplemented to the
time of the effectiveness of such amendment or the filing of such supplement.
(i) Each time that the Registration Statement or the Prospectus is
amended or supplemented (other than by an amendment or supplement (i) relating
to any offering of Securities other than the Notes, (ii) providing solely for
the specification of or a change in the maturity dates, the interest rates, the
issuance prices or other similar terms of any Notes sold pursuant hereto or
(iii) setting forth or incorporating by reference financial statements or other
information as of and for a fiscal quarter, unless, in the case of clause (iii)
above, in the reasonable judgment of any of you, such financial statements or
other information are of such a nature that an opinion of counsel should be
furnished), the Company shall furnish or cause to be furnished promptly to each
of you a written opinion of the General Counsel, or any Associate or Assistant
General Counsel authorized to sign such opinion, of the Company reasonably
satisfactory to each of you, dated the date of the effectiveness of such
amendment or the date of the filing of such supplement, in form reasonably
satisfactory to each of you, of the same tenor as the opinion referred to in
Section 5(b) but modified to relate to the Registration Statement and the
Prospectus as amended and supplemented to the time of the effectiveness of such
amendment or the filing of such supplement or, in lieu of such opinion, counsel
last furnishing such an opinion to you may furnish each of you with a letter to
the effect that you may rely on such last opinion to the same extent as though
it were dated the date of such letter authorizing reliance (except that
statements in such last opinion will be deemed to relate to the Registration
Statement and the Prospectus as amended and supplemented to the time of the
effectiveness of such amendment or the filing of such supplement).
(j) Each time that the Registration Statement or the Prospectus is
amended or supplemented to set forth amended or supplemental financial
information, the Company shall cause its independent public accountants promptly
to furnish each of you a letter, dated the date of the effectiveness of such
amendment or the date of the filing of such supplement, in form
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satisfactory to each of you, of the same tenor as the letter referred to in
Section 5(e) with such changes as may be necessary to reflect the amended and
supplemental financial information included or incorporated by reference in the
Registration Statement and the Prospectus, as amended or supplemented to the
date of such letter; provided, however, that, if the Registration Statement or
the Prospectus is amended or supplemented solely to include or incorporate by
reference financial information as of and for a fiscal quarter, the Company's
independent public accountants may limit the scope of such letter, which shall
be reasonably satisfactory in form to each of you, to the unaudited financial
statements, the related "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and any other information of an accounting,
financial or statistical nature included in such amendment or supplement,
unless, in the reasonable judgment of any of you, such letter should cover other
information or changes in specified financial statement line items.
(k) Unless otherwise specified in the applicable Terms Agreement,
during the period from and including the date of acceptance of an offer to and
including the date of settlement of such trade, the Company shall not, without
the prior consent of the Purchaser thereunder, issue or announce the proposed
issuance of any of its debt securities, including Notes, with terms
substantially similar to the Notes being purchased pursuant to such Terms
Agreement.
(l) During the period when a prospectus relating to the Notes is
required to be delivered under the Act, the Company will file promptly all
documents required to be filed with the Commission under the Exchange Act.
(m) On or prior to the date on which the Company makes any announcement
to the general public concerning earnings or concerning any other event which is
required to be described, or which the Company proposes to describe, in a
document filed pursuant to the Exchange Act, the Company will furnish the
information contained or to be contained in such announcement to each of you,
confirmed in writing. The Company will also furnish to each of you copies of all
other press releases or announcements to the general public relating to a
material change or prospective change in the condition (financial, business or
management) of the Company.
(n) The Company will as promptly as possible notify each of you in
writing of any downgrading in the rating of the Notes or any other debt
securities of the Company or of its receipt of any notice of (A) any intended or
potential downgrading or (B) any review or possible change that does not
indicate the direction of a possible change in the rating accorded any of the
Company's securities by any "nationally recognized statistical rating
organization," as such term is defined for purposes of Rule 436(g)(2) under the
Act, as soon as the Company learns of such downgrading or proposal to downgrade.
(o) On any Closing Date, the Company shall, if requested by the Agent
that solicited or received the offer to purchase the Notes being delivered on
such Closing Date, furnish such Agent with an opinion of the General Counsel, or
any Associate or Assistant General Counsel authorized to sign such opinion of
the Company, dated the Closing Date, to the effect set forth in clauses (iv) and
(vi) of Section 5(b), but modified, as necessary, to relate to the Prospectus as
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amended or supplemented at such Closing Date and except that such opinion shall
state that the Notes being sold by the Company on such Closing Date, when
delivered against payment therefor as provided in the Indenture and this
Agreement, will have been duly executed, authenticated, issued and delivered and
will constitute the valid and legally binding obligations of the Company
enforceable in accordance with their terms, subject only to the exceptions set
forth in clause (iv) of Section 5(b), and will conform to the description
thereof contained in the Prospectus as amended or supplemented at such Closing
Date.
SECTION 5. CONDITIONS TO THE OBLIGATIONS OF THE AGENTS. The obligations
of each Agent to solicit offers to purchase the Notes shall be subject to the
accuracy of the representations and warranties on the part of the Company
contained herein as of the Execution Time, on the Effective Date, when any
supplement to the Prospectus is filed with the Commission and as of each Closing
Date, to the accuracy of the statements of the Company made in any certificates
pursuant to the provisions hereof, to the performance by the Company of its
obligations hereunder and to the following additional conditions:
(a) If filing of the Prospectus, or any supplement thereto, is required
pursuant to Rule 424(b), the Prospectus, and any such supplement, shall have
been filed in the manner and within the time period required by Rule 424(b); and
no stop order suspending the effectiveness of the Registration Statement as
amended shall have been issued and no proceedings for that purpose shall have
been instituted or threatened.
(b) The Company shall have furnished to each Agent the opinion of
either the General Counsel or any Associate or Assistant General Counsel for the
Company, dated the date hereof, to the effect that:
(i) the Company is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Ohio, with
full corporate power and authority to own its properties and conduct
the business now being conducted by it as described in the Prospectus,
and is duly qualified to do business as a foreign corporation and is in
good standing in each jurisdiction which requires such qualification
wherein it owns or leases material properties or conducts material
business except where the failure to so qualify would not have a
material adverse effect on the financial condition, or the earnings,
business affairs or business prospects of the Company and its
Subsidiaries taken as a whole; and the Company is in good standing in
the State of California and the Commonwealth of Virginia;
(ii) the Company's authorized equity capitalization is as set
forth in the Prospectus; and the Notes conform to the description
thereof contained in the Prospectus (subject to the insertion in the
Notes of the maturity dates, the interest rates and other similar terms
thereof which will be described in supplements to the Prospectus as
contemplated by the fourth sentence of Section 1(a) of this Agreement);
(iii) (if the Company has one or more Significant Subsidiaries
at the date of such opinion) each Significant Subsidiary of the Company
has been duly incorporated
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and is validly existing as a corporation in good standing under the
laws of the jurisdiction of its incorporation, has corporate power and
authority to own, lease and operate its properties and conduct its
business as described in the Registration Statement, and is duly
qualified to do business as a foreign corporation and is in good
standing in any jurisdiction where such Significant Subsidiary has
material property or assets, and is duly qualified to do business as a
foreign corporation and is in good standing in each other jurisdiction
where the character of its properties or the nature of its business
requires such qualification (except where the failure to so qualify
would not have a material adverse effect on the financial condition, or
the earnings, business affairs or business prospects of the Company and
its subsidiaries taken as a whole); all of the issued and outstanding
capital stock of each Significant Subsidiary has been duly authorized
and validly issued and is fully paid and nonassessable, and all of such
capital stock, except for directors' qualifying shares, is owned by the
Company, directly or through subsidiaries, free and clear of any
mortgage, pledge, lien, encumbrance, claim or equity. For purposes of
this paragraph a "Significant Subsidiary" shall mean a "significant
subsidiary" as defined in Rule 405 of Regulation C under the Act;
(iv) the Indenture has been duly authorized, executed and
delivered by or on behalf of the Company, has been duly qualified under
the Trust Indenture Act and, assuming the Indenture has been duly
authorized, executed and delivered by the Trustee, constitutes a legal,
valid and binding instrument enforceable against the Company in
accordance with its terms except as the enforcement of remedies may be
(i) limited by applicable bankruptcy, reorganization, insolvency,
moratorium or other laws or proceedings affecting the enforcement of
creditors' rights generally or (ii) subject to the effect of general
principles of equity, whether applied by a court of law or equity; and
the Notes have been duly authorized and, when executed and
authenticated in accordance with the provisions of the Indenture and
delivered to and paid for by the purchasers thereof, will constitute
legal, valid and binding obligations of the Company entitled to the
benefits of the Indenture except as the enforcement of remedies may be
(i) limited by applicable bankruptcy, reorganization, insolvency,
moratorium or other laws or proceedings affecting the enforcement of
creditors' rights generally or (ii) subject to the effect of general
principles of equity, whether applied by a court of law or equity;
(v) to the knowledge of such counsel, there is no pending or
threatened action, suit or proceeding before any court or governmental
agency, authority or body or any arbitrator involving the Company or
any of its subsidiaries, of a character required to be disclosed in the
Registration Statement which is not adequately disclosed in the
Prospectus, and there is no franchise, contract or other document of a
character required to be described in the Registration Statement or
Prospectus, or to be filed as an exhibit, which is not described or
filed as required; and the statements included or incorporated in the
Prospectus describing any legal proceedings or material contracts or
agreements relating to the Company fairly summarize such matters;
(vi) the Registration Statement has become effective under the
Act; any required filing of the Prospectus, and any supplements
thereto, pursuant to Rule 424(b)
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<PAGE> 13
has been made in the manner and within the time period required by Rule
424; to the best knowledge of such counsel, no stop order suspending
the effectiveness of the Registration Statement has been issued, no
proceedings for that purpose have been instituted or threatened, and
the Registration Statement and the Prospectus comply as to form in all
material respects with the applicable requirements of the Act and the
rules thereunder; the documents filed by the Company under the Exchange
Act and incorporated by reference into the Registration Statement as of
their respective filing dates complied as to form in all material
respects with the applicable requirements of the Exchange Act and the
rules thereunder; and such counsel has no reason to believe that the
Registration Statement at the Effective Date or at the Execution Time
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 or that the Prospectus includes
any untrue statement of a material fact or omits to state a material
fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; PROVIDED,
HOWEVER, that such counsel need express no opinion as to (A) that part
of the Registration Statement, as amended, which shall constitute the
Statement of Eligibility and Qualification (Form T-1) under the Trust
Indenture Act of the Trustee, (B) the financial statements and other
financial and statistical information contained in the Registration
Statement or Prospectus or (C) the information contained in or omitted
from the Registration Statement or any amendment thereof or the
Prospectus in reliance upon and in conformity with written information
furnished to the Company by or on behalf of any Agent specifically for
use in the Registration Statement or the Prospectus;
(vii) this Agreement has been duly authorized, executed and
delivered by the Company;
(viii) no consent, approval, authorization or order of any
court or governmental agency or body is required for the consummation
of the transactions contemplated herein except such as have been
obtained under the Act and such as may be required under the blue sky
laws of any jurisdiction in connection with the sale of the Notes as
contemplated by this Agreement and such other approvals (specified in
such opinion) as have been obtained;
(ix) neither the execution and delivery of the Indenture, the
issue and sale of the Notes, nor the consummation of any other of the
transactions herein contemplated nor the fulfillment of the terms
hereof will conflict with, result in a breach of, or constitute a
default under, the Amended Articles of Incorporation or Regulations of
the Company or the terms of any indenture or other agreement or
instrument known to such counsel and to which the Company or any of its
Significant Subsidiaries is a party or bound, or any order or
regulation known to such counsel to be applicable to the Company or any
of its Significant Subsidiaries of any court, regulatory body,
administrative agency, governmental body or arbitrator having
jurisdiction over the Company or any of its Significant Subsidiaries;
and
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(x) to the best knowledge of such counsel, no holders of
securities of the Company have rights to the registration of such
securities under the Registration Statement.
In rendering such opinion, such counsel may rely (A) as to matters involving the
application of laws of any jurisdiction other than the State of Ohio or the
United States, to the extent deemed proper and specified in such opinion, upon
the opinion of other counsel of good standing believed to be reliable and who
are satisfactory to counsel for the Agents; and (B) as to matters of fact, to
the extent deemed proper, on certificates of responsible officers of the Company
and public officials. References to the Prospectus in this paragraph (b) include
any supplements thereto at the date such opinion is rendered.
(c) Each Agent shall have received from Cravath, Swaine & Moore,
counsel for the Agents, such opinion or opinions, dated the date hereof, with
respect to the issuance and sale of the Notes, the Indenture, the Registration
Statement, the Prospectus and other related matters as the Agents may reasonably
require, and the Company shall have furnished to such counsel such documents as
they may reasonably request for the purpose of enabling them to pass upon such
matters.
(d) The Company shall have furnished to each Agent a certificate of the
Company, signed by two officers of the Company, one of whom shall be the
principal financial officer, treasurer or controller of the Company, and the
other of whom shall be the chief executive officer, an executive vice president,
the general counsel or any assistant or associate general counsel of the
Company, dated the Execution Time, to the effect that the signers of such
certificate have carefully examined the Registration Statement, the Prospectus,
any supplement to the Prospectus and this Agreement and that:
(i) the representations and warranties of the Company in this
Agreement are true and correct in all material respects on and as of
the date thereof with the same effect as if made on the date thereof
and the Company has complied with all the agreements and satisfied all
the conditions on its part to be performed or satisfied as a condition
to the obligation of the Agents to solicit offers to purchase the
Notes;
(ii) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose have been instituted or, to the Company's knowledge,
threatened; and
(iii) since the date of the most recent financial statements
included in the Prospectus, there has been no material adverse change
in the financial condition, earnings, business or properties of the
Company and its subsidiaries taken as a whole, whether or not arising
from transactions in the ordinary course of business, except as set
forth in or contemplated in the Prospectus.
(e) At the Execution Time, Ernst & Young LLP shall have furnished to
each Agent a letter or letters (which may refer to letters previously delivered
to the Agents), dated as of the
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<PAGE> 15
Execution Time, in form and substance satisfactory to the Agents, confirming
that they are independent accountants within the meaning of the Act and the
Exchange Act and the respective applicable published rules and regulations
thereunder and stating in effect that:
(i) in their opinion the audited financial statements,
financial statement schedules and pro forma financial statements, if
any, included or incorporated in the Registration Statement and the
Prospectus and reported on by them comply in form in all material
respects with the applicable accounting requirements of the Act and the
Exchange Act and the related published rules and regulations;
(ii) on the basis of a reading of the latest unaudited
financial statements made available by the Company and its
subsidiaries; carrying out certain specified procedures (but not an
examination in accordance with generally accepted auditing standards)
which would not necessarily reveal matters of significance with respect
to the comments set forth in such letter; a reading of the minutes of
the meetings of the shareholders, directors and executive committee of
the Company; and inquiries of certain officials of the Company who have
responsibility for financial and accounting matters of the Company and
its subsidiaries as to transactions and events subsequent to the date
of the most recent audited financial statements included or
incorporated in the Prospectus, nothing came to their attention which
caused them to believe that:
(1) any unaudited financial statements included or
incorporated in the Registration Statement and the Prospectus
do not comply in form in all material respects with applicable
accounting requirements and with the published rules and
regulations of the Commission with respect to financial
statements included or incorporated in quarterly reports on
Form 10-Q under the Exchange Act; and said unaudited financial
statements are not in conformity with generally accepted
accounting principles applied on a basis substantially
consistent with that of the audited financial statements
included or incorporated in the Registration Statement and the
Prospectus;
(2) with respect to the period subsequent to the date
of the most recent financial statements (other than any
capsule information), audited or unaudited, in or incorporated
in the Registration Statement and the Prospectus, there were
any changes, at a specified date not more than five business
days prior to the date of the letter, in the long-term debt of
the Company and its subsidiaries or capital stock of the
Company or decreases in the shareholders' investment of the
Company as compared with the amounts shown on the most recent
consolidated balance sheet included or incorporated in the
Registration Statement and the Prospectus, or for the period
from the date of the most recent financial statements included
or incorporated in the Registration Statement and the
Prospectus to such specified date there were any decreases, as
compared with the corresponding period in the preceding year
in net sales or other income, in earnings before income taxes
or in total or per share amounts (basic and diluted) of net
earnings of the Company and its subsidiaries, except in all
instances for changes or decreases
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set forth in such letter, in which case the letter shall be
accompanied by an explanation by the Company as to the
significance thereof unless said explanation is not deemed
necessary by the Agents; or
(3) the amounts included in any unaudited "capsule"
information included or incorporated in the Registration
Statement and the Prospectus do not agree with the amounts set
forth in the unaudited financial statements for the same
periods or were not determined on a basis substantially
consistent with that of the corresponding amounts in the
audited financial statements included or incorporated in the
Registration Statement and the Prospectus;
(iii) they have performed certain other specified procedures
as a result of which they determined that certain information of an
accounting, financial or statistical nature (which is limited to
accounting, financial or statistical information derived from the
general accounting records of the Company and its subsidiaries) set
forth in the Registration Statement and the Prospectus and in Exhibit
12 to the Registration Statement, including the information included or
incorporated in Item 1 (excluding information relating to backlog) and
Items 6 and 7 of the Company's Annual Report on Form 10-K, incorporated
in the Registration Statement and the Prospectus, and the information
included in the "Management's Discussion and Analysis of Financial
Condition and Results of Operations" included or incorporated in the
Company's Quarterly Reports on Form 10-Q, incorporated in the
Registration Statement and the Prospectus, agrees with the accounting
records of the Company and its subsidiaries, excluding any questions of
legal interpretation; and
(iv) if unaudited pro forma financial statements are included
or incorporated in the Registration Statement and the Prospectus, on
the basis of a reading of the unaudited pro forma financial statements,
carrying out certain specified procedures, inquiries of certain
officials of the Company and the acquired company who have
responsibility for financial and accounting matters, and proving the
arithmetic accuracy of the application of the pro forma adjustments to
the historical amounts in the pro forma financial statements, nothing
came to their attention which caused them to believe that the pro forma
financial statements do not comply in form in all material respects
with the applicable accounting requirements of Rule 11-02 of Regulation
S-X or that the pro forma adjustments have not been properly applied to
the historical amounts in the compilation of such statements.
References to the Prospectus in this paragraph (e) include any
supplement thereto at the date of the letter.
(f) At the Execution Time, (i) Ernst & Young, independent public
accountants, (ii) KPMG Audit plc, independent public accountants and (iii) KPMG
Audit plc and Ernst & Young, jointly, shall have furnished to each Agent a
letter, dated as of the Execution Time, in each case containing statements and
information of the type ordinarily included in accountants' "comfort letters to
underwriters with respect to the financial statements and certain financial
information
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<PAGE> 17
contained in or incorporated by reference into the Prospectus; provided that the
KPMG Audit plc letter shall use a "cut-off date" not earlier than March 24,
1999.
(g) Prior to the Execution Time, the Company shall have furnished to
each Agent such further information, documents, certificates and opinions of
counsel as the Agents may reasonably request.
If any of the conditions specified in this Section 5 shall not have
been fulfilled in all material respects when and as provided in this Agreement,
or if any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in form
and substance to such Agents and counsel for the Agents, this Agreement and all
obligations of any Agent hereunder may be canceled at any time by the Agents.
Notice of such cancelation shall be given to the Company in writing or by
telephone or telegraph confirmed in writing.
The documents required to be delivered by this Section 5 shall be
delivered at the office of Cravath, Swaine & Moore, counsel for the Agents, at
Worldwide Plaza, 825 Eighth Avenue, New York, New York, on the date hereof.
SECTION 6. CONDITIONS TO THE OBLIGATIONS OF THE PURCHASER. The
obligations of the Purchaser to purchase any Notes will be subject to the
accuracy of the representations and warranties on the part of the Company herein
as of the date of any related Terms Agreement and as of the Closing Date for
such Notes, to the performance and observance by the Company of all covenants
and agreements herein contained on its part to be performed and observed and to
the following additional conditions precedent:
(a) No stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose shall have
been instituted or threatened.
(b) If specified by any related Terms Agreement and except to the
extent modified by such Terms Agreement, the Purchaser shall have received,
appropriately updated, (i) a certificate of the Company, dated as of the Closing
Date, to the effect set forth in Section 5(d) (except that references to the
Prospectus shall be to the Prospectus as supplemented at the time of execution
of the Terms Agreement), (ii) the opinion of the General Counsel, an Associate
General Counsel or an Assistant General Counsel for the Company, dated as of the
Closing Date, to the effect set forth in Section 5(b), (iii) the opinion of
Cravath, Swaine & Moore, counsel for the Purchaser, dated as of the Closing
Date, to the effect set forth in Section 5(c), and (iv) the letter of Ernst &
Young LLP, independent accountants for the Company, dated as of the Closing
Date, to the effect set forth in Section 5(e).
(c) Prior to the Closing Date, the Company shall have furnished to the
Purchaser such further information, certificates and documents as the Purchaser
may reasonably request.
If any of the conditions specified in this Section 6 shall not have
been fulfilled in all material respects when and as provided in this Agreement
and any Terms Agreement, or if any of
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the opinions and certificates mentioned above or elsewhere in this Agreement or
such Terms Agreement shall not be in all material respects reasonably
satisfactory in form and substance to the Purchaser and its counsel, such Terms
Agreement and all obligations of the Purchaser thereunder and with respect to
the Notes subject thereto may be canceled at, or at any time prior to, the
respective Closing Date by the Purchaser. Notice of such cancelation shall be
given to the Company in writing or by telephone or telegraph confirmed in
writing.
SECTION 7. RIGHT OF PERSON WHO AGREED TO PURCHASE TO REFUSE TO
PURCHASE. The Company agrees that any person who has agreed to purchase and pay
for any Note, including a Purchaser and any person who purchases pursuant to a
solicitation by any of the Agents, shall have the right to refuse to purchase
such Note if, at the Closing Date therefor, either (a) any condition set forth
in Section 5 or 6, as applicable, shall not be satisfied or (b) subsequent to
the agreement to purchase such Note, any change, condition or development
specified in subsections (b)(i) through (v) of Section 10 hereto shall have
occurred.
SECTION 8. INDEMNIFICATION. (a) Indemnification of the Agents. The
Company agrees to indemnify and hold harmless each Agent and each person, if
any, who controls such Agent within the meaning of Section 15 of the Act as
follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), or the omission or
alleged omission therefrom of a material fact required to be stated
therein or necessary to make the statements therein not misleading or
arising out of any untrue statement or alleged untrue statement of a
material fact contained in the Prospectus (or any amendment or
supplement thereto) or the omission or alleged omission therefrom of a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or investigation or proceeding by
any governmental agency or body, commenced or threatened, or of any
claim whatsoever based upon any such untrue statement or omission, or
any such alleged untrue statement or omission, if such settlement is
effected with the written consent of the Company; and
(iii) against any and all expense whatsoever (including the
fees and disbursements of counsel chosen by you), as incurred,
reasonably incurred in investigating, preparing or defending against
any litigation, or investigation or proceeding by any governmental
agency or body, commenced or threatened, or any claim whatsoever based
upon any such untrue statement or omission, or any such alleged untrue
statement or omission, to the extent that any such expense is not paid
under (i) or (ii) above;
PROVIDED, HOWEVER, that this indemnity agreement shall not apply to any
loss, liability, claim, damage or expense to the extent arising out of
any untrue statement or omission or
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alleged untrue statement or omission made in reliance upon and in
conformity with written information furnished to the Company by an
Agent expressly for use in the Registration Statement (or any amendment
thereto) or the Prospectus (or any amendment or supplement thereto), or
made in reliance upon the Trustee's Statement of Eligibility and
Qualification under the Trust Indenture Act filed as an exhibit to the
Registration Statement.
(b) Indemnification of Company. Each Agent agrees to indemnify and hold
harmless the Company, its directors, each of its officers who signed the
Registration Statement, and each person, if any, who controls the Company within
the meaning of Section 15 of the Act against any and all loss, liability, claim,
damage and expense (including reimbursement of moneys paid pursuant to
subsection (a) herein which are subsequently found to be indemnifiable under
this subsection (b)) described in the indemnity contained in subsection (a) of
this Section, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the Registration
Statement (or any amendment thereto) or the Prospectus (or any amendment or
supplement thereto) in reliance upon and in conformity with written information
furnished to the Company by such Agent expressly for use in the Registration
Statement (or any amendment thereto) or the Prospectus (or any amendment or
supplement thereto).
(c) General. Each indemnified party shall give prompt notice to each
indemnifying party of any action commenced against it in respect of which
indemnity may be sought hereunder, but failure to so notify an indemnifying
party shall not relieve such indemnifying party from any liability which it may
have otherwise than on account of this indemnity agreement. An indemnifying
party may participate at its own expense in the defense of such action. In no
event shall the indemnifying parties be liable for the fees and expenses of more
than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances.
SECTION 9. CONTRIBUTION. If the indemnification provided for in Section
8 is unavailable to an indemnified party or insufficient in respect of any
losses, claims, damages or liabilities referred to therein, then each
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and each Agent on the other from the offering of the Notes 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 of each Agent 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 each Agent on the other in connection with
the offering of the Notes shall be deemed to be in the same proportion as the
total net proceeds from the offering of such Notes (before deducting expenses)
received by the Company bear to the total underwriting discounts and commissions
received by such Agent in
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respect thereof. The relative fault of the Company on the one hand and of each
Agent on the other 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 by such Agent and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The Company and the Agents agree that it would not be just and
equitable if contribution pursuant to this Section 9 were determined by pro rata
allocation or by any other method of allocation which does not take account of
the considerations referred to in the immediately preceding paragraph. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages and liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such indemnified party
in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 9, no Agent shall be required to
contribute any amount in excess of the amount by which the total price at which
the Notes underwritten or solicited by such Agent were offered to the public
exceeds the amount of any damages which such Agent 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 Agents'
obligations to contribute pursuant to this Section 9 are several, in proportion
to the respective principal amounts of Notes purchased or solicited by each of
such Agents, and not joint.
SECTION 10. TERMINATION. (a) Termination of This Agreement. This
Agreement may be terminated for any reason, at any time by either the Company
with respect to any Agent or any Agent with respect to itself, upon the giving
of 30 days' written notice of such termination to each other party hereto.
(b) Termination of a Terms Agreement. An Agent who is party to a Terms
Agreement may terminate such Terms Agreement, immediately upon notice to the
Company, at any time prior to the Closing Date relating thereto (i) if there has
been, since the date of such Terms Agreement or since the respective dates as of
which information is given in the Registration Statement, any change, or any
development involving a prospective change, in or affecting the business or
properties of the Company and its subsidiaries shall have occurred the effect of
which is, in the judgment of such Agent, so material and adverse to the Company
and its subsidiaries taken as a whole as to make it impractical or inadvisable
to proceed with the delivery of such Note or (ii) if there shall have occurred
any material adverse change in the financial markets in the United States or any
outbreak or escalation of hostilities or other national or international
calamity or crisis, the effect of which shall be such as to make it, in the
judgment of such Agent, impracticable to market the Notes or enforce contracts
for the sale of the Notes, or (iii) if trading in any securities of the Company
shall have been suspended by the Commission or a national securities exchange,
or if trading generally on either the American Stock Exchange or the New York
Stock Exchange shall have been suspended, or minimum or maximum prices for
20
<PAGE> 21
trading shall have been fixed, or maximum ranges for prices for securities shall
have been required, by either of said exchanges or by order of the Commission or
any other governmental authority, or if a banking moratorium shall have been
declared by either Federal or New York authorities or if a banking moratorium
shall have been declared by the relevant authorities in the country or countries
of origin of any foreign currency or currencies in which the Notes are
denominated or payable, or (iv) if the rating assigned by any nationally
recognized securities rating agency to any debt securities of the Company as of
the date of any applicable Terms Agreement shall have been lowered since that
date or if any such rating agency shall have publicly announced that it has
placed any debt securities of the Company on what is commonly termed a "watch
list" for possible downgrading, or (v) if there shall have come to the attention
of such Agent any facts that would cause you to believe that the Prospectus, at
the time it was required to be delivered to a purchaser of Notes, contained an
untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in light of the circumstances
existing at the time of such delivery, not misleading.
(c) General. In the event of any termination pursuant to paragraph (a),
neither party will have any liability to the other party hereto, except that (i)
each Agent shall be entitled to any commissions earned in accordance with the
fourth paragraph of Section 2(a) hereof, (ii) if at the time of termination (a)
you shall own any Notes purchased pursuant to a Terms Agreement with the
intention of reselling them or (b) an offer to purchase any of the Notes has
been accepted by the Company but the time of delivery to the purchaser or his
agent of the Note or Notes relating thereto has not occurred, the covenants set
forth in Section 4 hereof shall remain in effect until such Notes are so resold
or delivered, as the case may be, and (iii) the provisions of Section 4(f)
hereof, the indemnity and contribution agreements set forth in Sections 8 and 9
hereof, and the provisions of Sections 12 and 14 hereof shall remain in effect.
SECTION 11. STATUS OF THE AGENTS. Except when an Agent is purchasing
Notes as a Purchaser pursuant to a Terms Agreement, in soliciting purchases of
the Notes on behalf of the Company, the Agents are acting individually and not
jointly and are acting solely as agent for the Company and not as principal.
Each Agent will make all reasonable efforts to assist the Company in obtaining
performance by each purchaser whose offer to purchase Notes from the Company has
been solicited by the Agent and accepted by the Company, but such Agent shall
have no liability to the Company in the event that any such purchase is not
consummated for any reason. If the Company shall default on its obligations to
deliver Notes to a purchaser whose offer it has accepted, the Company shall (i)
hold the Agents harmless against any loss, claim or damage arising from or as a
result of such default by the Company and (ii) notwithstanding such default, pay
to the Agent that solicited such offer any commission to which it would be
entitled in connection with such sale.
SECTION 12. REPRESENTATIONS AND INDEMNITIES TO SURVIVE. The respective
agreements, representations, warranties, indemnities and other statements of the
Company or its officers and of you set forth in or made pursuant to this
Agreement will remain in full force and effect, regardless of any investigation
made by or on behalf of you or the Company or any of the officers, directors or
controlling persons referred to in Section 8 hereof, and will
21
<PAGE> 22
survive delivery of and payment for the Notes. The provisions of Sections 4(f)
and 8 hereof shall survive the termination or cancelation of this Agreement.
SECTION 13. NOTICES. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the Agents
shall be directed to: Morgan Stanley & Co. Incorporated, 1585 Broadway, 2nd
Floor, New York, New York 10036, Attn: Manager - Continuously Offered Products,
with a copy to Morgan Stanley & Co. Incorporated, 1585 Broadway, 34th Floor, New
York, New York 10036, Attn: Peter Cooper - Investment Banking Information
Center; Goldman, Sachs & Co., 85 Broad Street, New York, New York 10004, Attn:
Karen Robertson - Registration Department; and J.P. Morgan Securities Inc.,
Transaction Execution Group, Attn: Maria Sramek, 60 Wall Street, 5th Floor, New
York, New York 10260; notices to the Company shall be directed to it at TRW
Inc., 1900 Richmond Road, Cleveland, Ohio 44124-3760, attention of Treasurer and
attention of Secretary.
SECTION 14. PARTIES. This Agreement and any Terms Agreement shall inure
to the benefit of and be binding upon you and the Company and your and their
respective successors. Nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any person, firm or corporation, other
than the parties hereto and their respective successors and the controlling
persons and officers and directors referred to in Sections 8 and 9 and their
heirs and legal representatives, any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision herein contained. This
Agreement and all conditions and provisions hereof are intended to be for the
sole and exclusive benefit of the parties hereto and their respective successors
and said controlling persons and officers and directors and their heirs and
legal representatives, and for the benefit of no other person, firm or
corporation, except as expressly contemplated in Section 7 herein. No purchaser
of Notes shall be deemed to be a successor by reason merely of such purchase.
SECTION 15. GOVERNING LAW. This Agreement and the rights and
obligations of the parties created hereby shall be governed by and construed in
accordance with the laws of the State of New York applicable to agreements made
and to be performed in such State. Any suit, action or proceeding brought by the
Company against any Agent in connection with or arising under this Agreement
shall be brought solely in the state or Federal court of appropriate
jurisdiction located in the Borough of Manhattan, The City of New York.
22
<PAGE> 23
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument along with all counterparts will become a binding agreement
between you and the Company in accordance with its terms.
Very truly yours,
TRW INC.
By:/s/ Carl G. Miller
---------------------------------
Title: Executive Vice President and
Chief Financial Officer
------------------------------
The foregoing Agreement is hereby confirmed and accepted as of the date hereof:
MORGAN STANLEY & CO.
INCORPORATED
By: /s/ Michael Fusco
--------------------------------
Title: Vice President
------------------------------
GOLDMAN, SACHS & CO.
/s/ Goldman, Sachs & Co.
- ------------------------------------
J.P. MORGAN SECURITIES INC.
By: /s/ Robert Nordlinger
---------------------------------
Title: Vice President
------------------------------
23
<PAGE> 24
EXHIBIT A
The following terms, if applicable, shall be agreed to by you and the
Company pursuant to each Terms Agreement:
Principal Amount: $ (or principal amount of foreign currency)
Interest Rate:
If Fixed Rate Note, Interest Rate:
If Floating Rate Note:
Interest Rate Basis:
Initial Interest Rate:
Initial Interest Reset Date:
Spread and/or Spread Multiplier, if any:
Interest Rate Reset Month(s):
Interest Payment Month(s):
Index Maturity:
Maximum Interest Rate, if any:
Minimum Interest Rate, if any:
Interest Rate Reset Period:
Interest Payment Period:
Calculation Agent:
If Redeemable:
Initial Redemption Date:
Initial Redemption Percentage:
Annual Redemption Percentage Reduction:
Date of Maturity:
Purchase Price: ____%
Provisions Relating to Reoffering, if any:
Closing Date, Time and Place:
Currency of Denomination:
Denominations (if currency is other than U.S. dollar):
Currency Payment:
Additional Terms:
Also, agreement as to whether the following will be required, and if so, whether
in modified form:
Officer's Certificate pursuant to Section 6(b)(i) of the Distribution
Agreement.
Legal Opinion pursuant to Section 6(b)(ii) of the Distribution
Agreement.
Legal Opinion pursuant to Section 6(b)(iii) of the Distribution
Agreement.
Comfort Letter pursuant to Section 6(b)(iv) of the Distribution
Agreement.
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EXHIBIT B
COMMISSION MATURITY RANGES RATE
More than 9 mos. to less than 1 yr. .125%
1 yr. to less than 18 mos. .150
18 mos. to less than 2 yrs. .200
2 yrs. to less than 3 yrs. .250
3 yrs. to less than 4 yrs. .350
4 yrs. to less than 5 yrs .450
5 yrs. to less than 6 yrs. .500
6 yrs. to less than 7 yrs. .550
7 yrs. to less than 8 yrs. .600
8 yrs. to less than 9 yrs. .600
9 yrs. to less than 10 yrs. .600
10 yrs. to less than 15 yrs. .625
15 yrs. to less than 20 yrs. .700
20 yrs. to 30 yrs. .750
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<PAGE> 26
MEDIUM-TERM NOTE ADMINISTRATIVE PROCEDURES FOR
FIXED RATE AND FLOATING RATE NOTES
(DATED AS OF NOVEMBER 17, 1999)
Medium-Term Notes (the "Notes") in the aggregate principal amount of up
to U.S. $2,500,000,000 are to be offered on a continuing basis by TRW Inc. (the
"Company") through Morgan Stanley & Co. Incorporated, Goldman, Sachs & Co. and
J.P. Morgan Securities Inc. who, as agents (each an "Agent", and, collectively,
the "Agents"), have agreed to use their best efforts to solicit offers to
purchase the Notes from the Company. The Agents may also purchase Notes as
principal for resale.
The Notes are being sold pursuant to a Distribution Agreement between
the Company and the Agents, dated as of November 17, 1999 (the "Distribution
Agreement"). The Notes will be issued pursuant to an Indenture dated as of May
1, 1986, between the Company and The Chase Manhattan Bank, as successor trustee
(the "Trustee") as amended and supplemented by a First Supplemental Indenture,
dated as of August 24, 1989, the Second, Third, Fourth and Fifth Supplemental
Indentures, each dated as of June 2, 1999, and the Sixth and Seventh
Supplemental Indentures, each dated as of June 23, 1999, between the Company and
the Trustee (as so amended and supplemented, the "Indenture"). Pursuant to
Sections 3.01, 3.03 and 5.02 of the Indenture, the Trustee will act as paying
agent and registrar for the Notes (hereinafter, when acting in such capacity,
the "Paying Agent") and as calculation agent (the "Calculation Agent"). Two
Registration Statements on Form S-3 (File Numbers: 333-48443 and 333-89133) (the
"Registration Statement," which term shall include any additional registration
statements filed in connection with the Notes as provided in the Distribution
Agreement) with respect to the Notes have been filed with the Securities and
Exchange Commission (the "Commission"). The most recent basic Prospectus
included in the Registration Statement, as supplemented with respect to the
Notes, is herein referred to as the "Prospectus Supplement". The accompanying
supplement to the Prospectus Supplement with respect to the specific terms of
the Notes is herein referred to as the "Pricing Supplement".
The Notes will either be issued (a) in book-entry form and represented
by one or more fully registered Notes (each, a "Book-Entry Note") delivered to
the Paying Agent, as agent for The Depository Trust Company ("DTC"), and
recorded in the book-entry system maintained by DTC, or (b) in certificated form
delivered to the purchaser thereof or a person designated by such purchaser.
Owners of beneficial interests in Notes issued in book-entry form will be
entitled to physical delivery of Notes in certificated form equal in principal
amount to their respective beneficial interests only upon certain limited
circumstances described in the Indenture and the Prospectus Supplement.
Administrative procedures and specific terms of the offering are
explained below.
General procedures relating to the issuance of all Notes are set forth
in Part I hereof. Additionally, Notes issued in book-entry form will be issued
in accordance with the administrative procedures set forth in Part II hereof and
Notes issued in certificated form will be
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<PAGE> 27
issued in accordance with the administrative procedures set forth in Part III
hereof. Capitalized terms used herein that are not otherwise defined shall have
the meanings ascribed thereto in the Indenture or the Notes (which in the case
of Notes issued in book-entry form shall be the related Book-Entry Note) as the
case may be.
PART I: PROCEDURES OF GENERAL APPLICABILITY
Date of Issuance/ Authentication: Each Note will be dated as of the date of its
authentication by the Trustee. Each Note shall also bear an original issue date
(the "Original Issue Date") which shall be the settlement date relating to such
Note. The Original Issue Date shall remain the same for all Notes subsequently
issued upon transfer, exchange or substitution of an original Note regardless of
their dates of authentication.
Maturities: Each Note will mature on a date selected by the purchaser and agreed
to by the Company which is not less than nine months from its Original Issue
Date; provided, however, that Notes bearing interest at rates determined by
reference to selected indices ("Floating Rate Notes") will mature on an Interest
Payment Date.
Registration: Notes will be issued only in fully registered form.
Calculation of Interest: In the case of Fixed Rate Notes, interest (including
payments for partial periods) will be calculated and paid on the basis of a
360-day year of twelve 30-day months. In the case of Floating Rate Notes,
interest will be calculated and paid on the basis of the actual number of days
in the interest period divided by 360 or by the actual number of days in the
year, in the case of Treasury Rate Notes and CMT Rate Notes.
Acceptance and Rejection of Offers: The Company shall have the sole right to
accept offers to purchase Notes from the Company and may reject any such offer
in whole or in part. The Agents shall communicate to the Company, orally or in
writing, each reasonable offer to purchase Notes from the Company received by
it. The Agents shall have the right, in their discretion reasonably exercised,
without notice to the Company, to reject any offer to purchase Notes in whole or
in part.
Preparation of Pricing Supplement: If any offer to purchase a Note is accepted
by the Company, the Company, with the approval of the Agent which presented such
offer (the "Presenting Agent"), will prepare a Pricing Supplement reflecting the
terms of such Note and file such Pricing Supplement relating to the Notes and
the plan of distribution thereof (the "Supplemented Prospectus"), with the
Commission in accordance with Rule 424 under the Act and will supply by next day
mail or telecopy at least one copy thereof (and additional copies if requested)
to the Presenting Agent to arrive no later than 11:00 a.m. on the Business Day
following the trade date. The Presenting Agent will cause a stickered
Supplemented Prospectus to be delivered to the purchaser of the Note. Such
Supplemented Prospectus will be delivered to the Presenting Agent at the
following applicable address: Morgan Stanley & Co. Incorporated, 1585 Broadway,
2nd Floor, New York, New York 10036, Attn: Medium-Term Notes Trading Desk,
Carlos Cabrera; Goldman, Sachs & Co., 85 Broad Street, New York, New York 10004,
Attn: Prospectus
B-3
<PAGE> 28
Department; and J.P. Morgan Securities Inc., Transaction Execution Group, Attn:
Maria Sramek, 60 Wall Street, 5th Floor, New York, New York 10260.
In each instance that a Pricing Supplement is prepared, the Agents will
affix the Pricing Supplement to Supplemented Prospectuses prior to their use.
Outdated Pricing Supplements, and the Supplemented Prospectuses to which they
are attached (other than those retained for files) will be destroyed.
Settlement: The receipt of immediately available funds by the Company in payment
for a Note and the authentication and delivery of such Note shall, with respect
to such Note, constitute "settlement". Offers accepted by the Company will be
settled three Business Days from the trade date or at a time as the purchaser
and the Company shall agree, pursuant to the timetable for settlement set forth
in Parts II and III hereof under "Settlement Procedures" with respect to
Book-Entry Notes and Certificated Notes, respectively. If procedures A and B of
the applicable Settlement Procedures with respect to a particular offer are not
completed on or before the time set forth under the applicable "Settlement
Procedures Timetable," such offer shall not be settled until the Business Day
following the completion of settlement procedures A and B or such later date as
the purchaser and the Company shall agree.
In the event of a purchase of Notes by any Agent as principal,
appropriate settlement details will be as agreed between the Agent and the
Company pursuant to the applicable Terms Agreement. Such settlement details
shall include confirmation by the Company of the terms of such purchase to the
Agent.
Procedure for Changing Rates or Other Variable Terms: When a decision has been
reached to change the interest rate or any other variable term on any Notes
being sold by the Company, the Company will promptly advise the Agents and the
Agents will forthwith suspend solicitation of offers to purchase such Notes. The
Agents will telephone the Company with recommendations as to the changed
interest rates or other variable terms. At such time as the Company advises the
Agents of the new interest rates or other variable terms, the Agents may resume
solicitation of offers to purchase such Notes. Until such time only "indications
of interest" may be recorded. Immediately after acceptance by the Company of an
offer to purchase at a new interest rate or new variable term, the Company, the
Presenting Agent and the Paying Agent shall follow the procedures set forth
under the applicable "Settlement Procedures". The foregoing procedure for
changes shall in no way affect the Company's right to suspend all solicitations
of offers to purchase Notes as set forth in the Distribution Agreement.
Suspension of Solicitation; Amendment or Supplement: The Company may instruct
the Agents to suspend solicitation of purchases at any time. Upon receipt of
such instructions the Agents will forthwith suspend solicitation of offers to
purchase from the Company until such time as the Company has advised them that
solicitation of offers to purchase may be resumed. If the Company decides to
amend the Registration Statement (including incorporating any documents by
reference therein) or supplement any of such documents (other than to change
rates or other variable terms), it will promptly advise the Agents and will
furnish the Agents and their counsel with copies of the proposed amendment
(including any document proposed to be incorporated by
B-4
<PAGE> 29
reference therein) or supplement (except an amendment or supplement which
relates exclusively to an offering of securities other than the Notes). One copy
of such filed document, along with a copy of the cover letter sent to the
Commission, will be delivered or mailed to the Agents at the following
respective addresses: Morgan Stanley & Co. Incorporated, 1585 Broadway, 2nd
Floor, New York, New York 10036, Attn: Manager - Continuously Offered Products,
with a copy to Morgan Stanley & Co. Incorporated, 1585 Broadway, 34th Floor, New
York, New York 10036, Attn: Peter Cooper - Investment Banking Information
Center; Goldman, Sachs & Co., 85 Broad Street, New York, New York 10004, Attn:
Karen Robertson Registration Department; and J.P. Morgan Securities Inc.,
Transaction Execution Group, Attn: Maria Sramek, 60 Wall Street, 5th Floor, New
York, New York 10260.
In the event that at the time the solicitation of offers to purchase
from the Company is suspended (other than to change interest rates or other
variable terms) there shall be any orders outstanding which have not been
settled, the Company will promptly advise the Agents and the Paying Agent
whether such orders may be settled and which copies of the Prospectus may be
delivered in connection with the settlement of such orders. The Company will
have the sole responsibility for such decision and for any arrangements which
may be made in the event that the Company determines that such orders may not be
settled or that copies of such Prospectus may not be so delivered.
Delivery of Prospectus: A copy of the most recent Prospectus, Prospectus
Supplement and Pricing Supplement must accompany or precede the earlier of (a)
the written confirmation of a sale sent to a customer or his Agent and (b) the
delivery of Notes to a customer or his Agent.
Authenticity of Signatures: The Agents will have no obligations or liability to
the Company or the Trustee in respect of the authenticity of the signature of
any officer, employee or agent of the Company or the Trustee on any Note.
Documents Incorporated by Reference: The Company shall supply the Agents with an
adequate supply of all documents incorporated by reference in the Registration
Statement.
Business Day: "Business Day" means any day, other than a Saturday or Sunday,
that meets each of the following applicable requirements: the day is (a) not a
day on which banking institutions are authorized or required by law or
regulation to be closed in The City of New York and (b) if the Note is
denominated in a Specified Currency other than U.S. Dollars, (i) not a day on
which banking institutions are authorized or required by law or regulation to
close in the major financial center of the country issuing the Specified
Currency (which in the case of ECU shall be as determined by the ECU Banking
Association in Paris) and (ii) a day on which banking institutions in such
financial center are carrying out transactions in such Specified Currency and,
(c) with respect to LIBOR Notes, a London Banking Day. "London Banking Day"
means any day on which dealings in deposits in U.S. dollars are transacted in
the London interbank market.
Trustee Not to Risk Funds: Nothing herein shall be deemed to require the Trustee
or the Paying Agent to risk or expend its own funds in connection with any
payment to the Company, DTC, any holder of a Note or the Agents, it being
understood by all parties that payments made by the
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<PAGE> 30
Trustee or the Paying Agent to the Company, DTC, any holder of a Note or the
Agents shall be made only to the extent that funds are provided to the Trustee
or the Paying Agent for such purpose.
PART II: PROCEDURES FOR NOTES ISSUED IN BOOK-ENTRY FORM
In connection with the qualification of Notes issued in book-entry form
for eligibility in the book-entry system maintained by DTC, the Trustee will
perform the custodial, document control and administrative functions described
below, in accordance with its obligations under a Letter of Representations from
the Company and the Trustee to DTC, dated April 13, 1998, as amended on November
17, 1999, and a Medium-Term Note Certificate Agreement, dated March 10, 1989,
between the Trustee and DTC and its obligations as a participant in DTC,
including DTC's Same-Day Funds Settlement System ("SDFS").
Issuance: All Fixed Rate Notes issued in book-entry form having the same
Original Issue Date, interest rate, and Stated Maturity (collectively, the
"Fixed Rate Terms") will be represented initially by a single global security in
fully registered form without coupons (each, a "Book-Entry Note"); and all
Floating Rate Notes issued in book-entry form having the same Original Issue
Date, base rate upon which interest may be determined (each, a "Base Rate"),
which may be the Commercial Paper Rate, LIBOR, any other rate set forth by the
Company, Initial Interest Rate, Index Maturity, Spread and/or Spread Multiplier,
if any, minimum interest rate, if any, maximum interest rate, if any, and Stated
Maturity (collectively, "Floating Rate Terms") will be represented initially by
a single Book-Entry Note. Unless otherwise specified in the applicable Pricing
Supplement, all Notes which are DTC eligible will be issued as Book-Entry Notes.
Each Book-Entry Note will be dated and issued as of the date of its
authentication by the Paying Agent. Each Book-Entry Note will bear an Interest
Accrual Date, which will be (a) with respect to an original Book-Entry Note (or
any portion thereof), its Original Issue Date and (b) with respect to any
Book-Entry Note (or portion thereof) issued subsequently upon exchange of a
Book-Entry Note or in lieu of a destroyed, lost or stolen Book-Entry Note, the
most recent Interest Payment Date to which interest has been paid or duly
provided for on the predecessor Book-Entry Note or Notes (or if no such payment
or provision has been made, the Original Issue Date of the predecessor
Book-Entry Note or Notes), regardless of the date of authentication of such
subsequently issued Book-Entry Note. No Book-Entry Note shall represent any Note
issued in certificated form.
Identification: The Company has arranged with the CUSIP Service Bureau of
Standard & Poor's corporation (the "CUSIP Service Bureau") for the reservation
of approximately 900 CUSIP numbers which have been reserved for future
assignment to Book-Entry Notes representing Notes issued in book-entry form and
the Company has delivered to the Trustee and DTC an initial written list of 900
of such CUSIP numbers. The Company will assign CUSIP numbers to Book-Entry Notes
as described below under Settlement Procedure B. DTC will notify the CUSIP
Service Bureau periodically of the CUSIP numbers that the Company has assigned
to Book-Entry Notes. At any time when fewer than 100 of the reserved CUSIP
numbers remain unassigned to Book-Entry Notes, and, if it deems necessary, the
Company will reserve additional CUSIP
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<PAGE> 31
numbers for assignment to Book-Entry Notes representing Notes issued in
book-entry form. Upon obtaining such additional CUSIP numbers, the Company will
deliver a list of such additional numbers to the Trustee and DTC, if requested.
Registration: Each Book-Entry Note will be registered in the name of Cede & Co.,
as nominee for DTC, on the register maintained by the Paying Agent under the
Indenture. The beneficial owner of a Note issued in book-entry form (i.e., an
owner of a beneficial interest in a Book-Entry Note) (or one or more indirect
participants in DTC designated by such owner) will designate one or more
participants in DTC (with respect to such Note issued in book-entry form, the
"Participants") to act as agent for such beneficial owner in connection with the
book-entry system maintained by DTC, and DTC will record in book-entry form, in
accordance with instructions provided by such Participants, a credit balance
with respect to such Note issued in book-entry form in the account of such
Participants. The ownership interest of such beneficial owner in such Note
issued in book-entry form will be recorded through the records of such
Participants or through the separate records of such Participants and one or
more indirect participants in DTC.
Transfers: Transfers of a Book-Entry Note will be accomplished by book entries
made by DTC and, in turn, by participants (and in certain cases, one or more
indirect participants in DTC) acting on behalf of beneficial transferors and
transferees of such Book-Entry Note.
Exchanges: The Trustee may deliver to DTC and the CUSIP Service Bureau at any
time a written notice specifying (a) the CUSIP numbers of two or more Book-Entry
Notes outstanding on such date that represent Book-Entry Notes having the same
Fixed Rate Terms or Floating Rate Terms (other than Original Issue Dates), as
the case may be, and for which interest has been paid to the same date; (b) a
date, occurring at least 30 days after such written notice is delivered and at
least 30 days before the next Interest Payment Date for the related Notes issued
in book-entry form, on which such Book-Entry Notes shall be exchanged for a
single replacement Book-Entry Note; and (c) a new CUSIP number, obtained from
the Company, to be assigned to such replacement Book-Entry Note. Upon receipt of
such a notice, DTC will send to its participants (including the Trustee) a
written reorganization notice to the effect that such exchange will occur on
such date. Prior to the specified exchange date, the Trustee will deliver to the
CUSIP Service Bureau written notice setting forth such exchange date and the new
CUSIP number and stating that, as of such exchange date, the CUSIP numbers of
the Book-Entry Notes to be exchanged will no longer be valid. On the specified
exchange date, the Trustee will exchange such Book-Entry Notes for a single
Book-Entry Note bearing the new CUSIP number and the CUSIP numbers of the
exchanged Book-Entry Notes will, in accordance with CUSIP Service Bureau
procedures, be canceled and not immediately reassigned. Notwithstanding the
foregoing, if the Book-Entry Notes to be exchanged exceed $200,000,000 in
aggregate principal amount, one replacement Book-Entry Note will be
authenticated and issued to represent $200,000,000 of principal amount of the
exchanged Book-Entry Notes and an additional Book-Entry Note or Notes will be
authenticated and issued to represent any remaining principal amount of such
Book-Entry Notes (See "Denominations" below).
Denominations: All Notes issued in book-entry form will be denominated in U.S.
dollars. Notes issued in book-entry form will be issued in denominations of
$1,000 and any integral multiple
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<PAGE> 32
thereof. Book-Entry Notes will be denominated in principal amounts not in excess
of $200,000,000. If one or more Notes issued in book-entry form having an
aggregate principal amount in excess of $200,000,000 would, but for the
preceding sentence, be represented by a single Book-Entry Note, then one
Book-Entry Note will be issued to represent $200,000,000 principal amount of
such Note or Notes issued in book-entry form and an additional Book-Entry Note
or Notes will be issued to represent any remaining principal amount of such Note
or Notes issued in book-entry form. In such a case, each of the Book-Entry Notes
representing such Note or Notes issued in book-entry form shall be assigned the
same CUSIP number.
Interest: General. Interest on each Note issued in book-entry form will accrue
from the Interest Accrual Date of the Book-Entry Note representing such Note.
Each payment of interest on a Note issued in book-entry form will include
interest accrued through the day preceding, as the case may be, the Interest
Payment Date (provided that in the case of Floating Rate Notes which reset daily
or weekly interest payments will include interest accrued to but excluding the
Regular Record Date immediately preceding the Interest Payment Date), or Stated
Maturity (each Stated Maturity is referred to herein as a "Maturity"). Interest
payable at Maturity of a Note issued in book-entry form will be payable to the
Person to whom the principal of such Note is payable. DTC will arrange for each
pending deposit message described under Settlement Procedure C below to be
transmitted to Standard & Poors, which will use the information in the message
to include certain terms of the related Book-Entry Note in the appropriate daily
bond report published by Standard & Poor's.
Regular Record Dates. Unless otherwise specified in the applicable
Pricing Supplement and Note, the Regular Record Date with respect to any
Interest Payment Date for a Fixed Rate Note shall be the February 28 (or
February 29, in the case of leap years) or August 31 preceding such Interest
Payment Date. The Regular Record Date with respect to any Interest Payment Date
for a Floating Rate Note shall be the date 15 calendar days (whether or not a
Business Day) preceding such Interest Payment Date.
Interest Payment Dates. Interest payments will be made on each Interest
Payment Date commencing with the first Interest Payment Date following the
Original Issue Date; PROVIDED, HOWEVER, the first payment of interest on any
Book-Entry Note originally issued between a Regular Record Date and an Interest
Payment Date will occur on the Interest Payment Date following the next Regular
Record Date.
If an Interest Payment Date with respect to any Floating Rate Note
issued in book-entry form would otherwise fall on a day that is not a Business
Day with respect to such Note, such Interest Payment Date will be the following
day that is a Business Day with respect to such Note, except that in the case of
a LIBOR Note, if such day falls in the next calendar month, such Interest
Payment Date will be the preceding day that is a London Business Day.
Fixed Rate Notes. Unless otherwise specified in the applicable Pricing
Supplement and Note, the interest payments on Fixed Rate Notes issued in
book-entry form will be made semiannually on March 15 and September 15 of each
year and at Maturity.
B-8
<PAGE> 33
Floating Rate Notes. In the case of the Floating Rate Notes issued in
book-entry form which reset daily or weekly, interest payments shall include
accrued interest from, and including, the date of issue or from, but excluding,
the last date in respect of which interest has been accrued and paid, as the
case may be, through, and including, the Regular Record Date, except that at
maturity the interest payable will include interest accrued to, but excluding,
the maturity date. For additional special provisions relating to Floating Rate
Notes, see the Prospectus Supplement.
Notice of Interest Rates. On the first Business Day of each January,
April, July and October of each year, the Paying Agent will deliver to the
Company and DTC a written list of Regular Record Dates and Interest Payment
Dates that will occur during the six-month period beginning on such first
Business Day with respect to Floating Rate Notes issued in book-entry form.
Promptly after each Interest Determination Date for Floating Rate Notes issued
in book-entry form, the Calculation Agent will notify Standard & Poor's of the
interest rates determined on such Interest Determination Date.
Payments of Principal and Interest: Payments of Interest Only. Promptly after
each Regular Record Date, the Paying Agent will deliver to the Company and DTC a
written notice specifying by CUSIP number the amount of interest to be paid on
each Book-Entry Note on the following Interest Payment Date (other than an
Interest Payment Date coinciding with Maturity) and the total of such amounts.
DTC will confirm the amount payable on each Book-Entry Note on such Interest
Payment Date by reference to the daily bond reports published by Standard &
Poor's. On such Interest Payment Date, the Company will pay to the Paying Agent,
and the Paying Agent in turn will pay to DTC, such total amount of interest due
(other than at Maturity), at the times and in the manner set forth below under
"Manner of Payment".
Payments at Maturity. On or about the first Business Day of each month,
the Paying Agent will deliver to the Company and DTC a written list of
principal, interest and premium, if any, to be paid on each Book-Entry Note
maturing either at Stated Maturity or on a Redemption Date in the following
month. The Paying Agent, the Company and DTC will confirm the amounts of such
principal and interest payments with respect to a Book-Entry Note on or about
the fifth Business Day preceding the Maturity of such Book-Entry Note. At such
Maturity, the Company will pay to the Paying Agent, and the Paying Agent in turn
will pay to DTC, the principal amount of such Note, together with interest and
premium, if any, due at such Maturity, at the times and in the manner set forth
below under "Manner of Payment". If any Maturity of a Book-Entry Note is not a
Business Day, the payment due on such day shall be made on the next succeeding
Business Day and no interest shall accrue on such payment for the period from
and after such Maturity. Promptly after payment to DTC of the principal,
interest and premium, if any, due at the Maturity of such Book-Entry Note, the
Paying Agent will deliver to the Trustee for cancelation such Book-Entry Note.
The Trustee will cancel such Book-Entry Note and deliver it to the Company with
an appropriate debit advice, together with a statement setting forth the
principal amount of Notes issued and outstanding as of the related Maturity
Date.
Manner of Payment. The total amount of any principal, premium, if any,
and interest due on Book-Entry Notes on any Interest Payment Date or at Maturity
shall be paid by the Company
B-9
<PAGE> 34
to the Paying Agent in funds available for use by the Paying Agent as of 9:30
a.m., New York City time, on such date. The Company will make such payment on
such Book-Entry Notes by instructing the Paying Agent to withdraw funds from an
account maintained by the Company at the Paying Agent. The Company will confirm
such instructions in writing to the Paying Agent. On such date or as soon as
possible thereafter, the Paying Agent will pay by separate wire transfer (using
Fedwire message entry instructions in a form previously specified by DTC) to an
account at the Federal Reserve Bank of New York previously specified by DTC, in
funds available for immediate use by DTC, each payment of interest, principal
and premium, if any, due on a Book-Entry Note on such date. Thereafter on such
date, DTC will pay, in accordance with its SDFS operating procedures then in
effect, such amounts in funds available for immediate use to the respective
Participants in whose names such Notes are recorded in the book-entry system
maintained by DTC. Neither the Company nor the Paying Agent shall have any
responsibility or liability for the payment by DTC of the principal of, or
interest on, the Book-Entry Notes to such Participants.
Withholding Taxes. The amount of any taxes required under applicable
law to be withheld from any interest payment on a Note will be determined and
withheld by the Participant, indirect participant in DTC or other Person
responsible for forwarding payments and materials directly to the beneficial
owner of such Note.
Acceptance and Rejections of Offers: The Company shall have the sole right to
accept offers to purchase Notes from the Company and may reject any such offer
in whole or in part. Each Agent shall promptly communicate to the Company,
orally or in writing, each reasonable offer to purchase Book-Entry Notes from
the Company received by it, other than those rejected by such Agent. The Agents
shall have the right, in their discretion reasonably exercised, without notice
to the Company, to reject any offer to purchase Notes in whole or in part.
Settlement Procedures: Settlement Procedures with regard to each Note in
book-entry form sold by each Agent, as agent of the Company, will be as follows:
A. The Agent will advise the Company by telephone of the following
Settlement information, confirmed promptly thereafter by facsimile:
1. Taxpayer identification number of the purchaser.
2. Principal amount of the Note.
3. Fixed Rate Notes: (a) interest rate; (b) sinking fund or
redemption date, if any; and (c) sinking fund or redemption
prices, if any
Floating Rate Notes: (a) interest rate basis; (b) initial
interest rate; (c) spread or spread multiplier, if any; (d)
interest rate reset dates; (e) interest rate reset period;
(f) interest payment dates; (g) interest payment period;
(h) index maturity; (i) calculation agent (if other than
the Trustee); (j) maximum interest rate, if any; (k)
minimum interest rate, if any; (l)
B-10
<PAGE> 35
calculation date; (m) interest determination dates; (n)
sinking fund or redemption date, if any; and (o) sinking
fund or redemption prices, if any.
4. Price to public of the Note.
5. Trade date.
6. Settlement Date (Original Issue Date).
7. Maturity.
8. Net proceeds to the Company.
9. Agent's commission.
B. The Company will assign a CUSIP number to the Book-Entry Note
representing such Note and then advise the Trustee by electronic transmission of
the above settlement information received from the Presenting Agent, such CUSIP
number and the name of the Agent.
C. The Trustee will communicate to DTC and the Agent through DTC's
Participant Terminal System, a pending deposit message specifying the following
settlement information:
1. The information set forth in Settlement Procedure A.
2. Identification numbers of the participant accounts
maintained by DTC on behalf of the Paying Agent and the Agent.
3. Identification as a Fixed Rate Book-Entry Note or Floating
Rate Book-Entry Note.
4. Initial Interest Payment Date for such Note, number of days
by which such date succeeds the related record date for DTC purposes
(or, in the case of Floating Rate Notes which reset daily or weekly,
the date five calendar days preceding the Interest Payment Date) and,
if then calculable, the amount of interest payable on such Interest
Payment Date (which amount shall have been confirmed by the Trustee).
5. CUSIP number of the Book-Entry Note representing such Note.
6. Whether such Book-Entry Note represents any other Notes
issued or to be issued in book-entry form.
D. The Company will complete and deliver to the Trustee a Book-Entry
Note representing such Note in a form that has been approved by the Company, the
Agents and the Paying Agent.
B-11
<PAGE> 36
E. The Trustee will authenticate the Book-Entry Note representing such
Note and will register such Book-Entry Note in the name of Cede & Co. as nominee
of DTC. The Trustee will take delivery thereof as agent for DTC.
F. DTC will credit such Note to the participant account of the Trustee
maintained by DTC.
G. The Trustee will enter an SDFS deliver order through DTC's
Participant Terminal System instructing DTC (i) to debit such Note to the
Trustee's participant account and credit such Note to the participant account of
the Presenting Agent maintained by DTC and (ii) to debit the settlement account
of the Presenting Agent and credit the settlement account of the Trustee
maintained by DTC in an amount equal to the price of such Note less such Agent's
commission. Any entry of such a deliver order shall be deemed to constitute a
representation and warranty by the Trustee to DTC that (i) the Book-Entry Note
representing such Note has been issued and authenticated and (ii) the Trustee is
holding such Book-Entry Note pursuant to the terms of any Medium-Term Note
Certificate Agreement outstanding between the Trustee and DTC.
H. The Presenting Agent will enter an SDFS deliver order through DTC's
Participant Terminal System instructing DTC (i) to debit such Note to the
Presenting Agent's participant account and credit such Note to the participant
account of the Participants maintained by DTC and (ii) to debit the settlement
accounts of such Participants and credit the settlement account of the
Presenting Agent maintained by DTC, in an amount equal to the initial public
offering price of such Note.
I. Transfers of funds in accordance with SDFS deliver orders described
in settlement Procedures G and H will be settled in accordance with SDFS
operating procedures in effect on the Settlement Date.
J. The Trustee will credit to an account of the Company maintained at
the Trustee funds available for immediate use in the amount transferred to the
Trustee in accordance with Settlement Procedure G.
K. Promptly after authentication of a Note, the Trustee will send to
the Company a copy of the face of such Note, together with a statement setting
forth the principal amount of Notes issued and outstanding as of the related
Settlement Date.
L. The Agent will confirm the purchase of such Note to the purchaser
either by transmitting to the Participant with respect to such Note a
confirmation order through DTC's Participant Terminal System or by mailing a
written confirmation to such purchaser.
Settlement Procedures Timetable: For orders of Notes accepted by the Company,
Settlement Procedures "A" through "L" set forth above shall be completed as soon
as possible but not later than the respective times (New York City time) set
forth below:
Settlement Procedure Time
B-12
<PAGE> 37
A-B 11:00 a.m. on the trade date
C 2:00 p.m. on the trade date
D 3:00 p.m. on the Business Day before Settlement Date
E 9:00 a.m. on Settlement Date
F 10:00 a.m. on Settlement Date
G-H No later than 2:00 p.m. on Settlement Date
I 4:45 p.m. on Settlement Date
J-L 5:00 p.m. on Settlement Date
If a sale is to be settled more than one Business Day after the trade
date, Settlement Procedures A, B, and C may, if necessary, be completed at any
time prior to the specified times on the first Business Day after such sale
date. In connection with a sale which is to be settled more than one Business
Day after the trade date, Settlement Procedures B and C shall be completed as
soon as such rates have been determined, but no later than 11:00 a.m. and 2:00
p.m., New York City time, respectively, on the second Business Day before the
Settlement Date. Settlement Procedure I is subject to extension in accordance
with any extension of Fedwire closing deadlines and in the other events
specified in the SDFS operating procedures in effect on the Settlement Date.
Upon receipt of information that settlement of a Note issued in
book-entry form has been rescheduled or canceled, the Trustee will deliver to
DTC, through DTC's Participant Terminal System, a cancellation message to such
effect by no later than 3:00 p.m., New York City time, on the Business Day
immediately preceding the scheduled Settlement Date. Failure to Settle: If the
Trustee fails to enter an SDFS deliver order with respect to a Book-Entry Note
issued in book-entry form pursuant to Settlement Procedure G, the Trustee may
deliver to DTC, through DTC's Participant Terminal System, as soon as
practicable a withdrawal message instructing DTC to debit such Note to the
participant account of the Trustee maintained at DTC. DTC will process the
withdrawal message, provided that such participant account contains a principal
amount of the Book-Entry Note representing such Note that is at least equal to
the principal amount to be debited. If withdrawal messages are processed with
respect to all the Notes represented by a Book-Entry Note, the Trustee will mark
such Book-Entry Note "canceled," make appropriate entries in its records and
send such canceled Book-Entry Note to the Company. The CUSIP number assigned to
such Book-Entry Note shall, in accordance with CUSIP Service Bureau procedures,
be canceled and not immediately reassigned. If withdrawal messages are processed
with respect to a portion of the Notes represented by a Book-Entry Note, the
Trustee will exchange such Book-Entry Note for two Book-Entry Notes, one of
which shall represent the Notes for which withdrawal messages are processed and
shall be canceled immediately after issuance, and the other of which shall
represent the other Notes previously represented by the surrendered Book-Entry
Note and shall bear the CUSIP number of the surrendered Book-Entry Note.
If the purchase price for any Book-Entry Note is not timely paid to the
Participants with respect to such Note by the beneficial purchaser thereof (or a
person, including an indirect participant in DTC, acting on behalf of such
purchaser), such Participants and, in turn, the related Agent may enter SDFS
deliver orders through DTC's Participant Terminal System reversing the
B-13
<PAGE> 38
orders entered pursuant to Settlement Procedures G and H, respectively.
Thereafter, the Trustee will deliver the withdrawal message and take the related
actions described in the preceding paragraph. If such failure shall have
occurred for any reason other than default by the applicable Agent to perform
its obligations hereunder or under the Distribution Agreement, the Company will
reimburse such Agent on an equitable basis for its loss of the use of funds
during the period when the funds were credited to the account of the Company.
Notwithstanding the foregoing, upon any failure to settle with respect
to a Book-Entry Note, DTC may take any actions in accordance with its SDFS
operating procedures then in effect. In the event of a failure to settle with
respect to a Note that was to have been represented by a Book-Entry Note also
representing other Notes, the Trustee will provide, in accordance with
Settlement Procedures D and E, for the authentication and issuance of a
Book-Entry Note representing such remaining Notes and will make appropriate
entries in its records.
PART III: PROCEDURES FOR NOTES ISSUED IN CERTIFICATED FORM
Denominations: The Notes will be issued in denominations of U.S. $1,000 and any
integral multiple thereof or in denominations of a foreign currency as is stated
in the Note.
Interest: Each Note will bear interest in accordance with its terms. Interest
will begin to accrue on the Original Issue Date of a Note for the first interest
period and on the most recent Interest Payment Date to which interest has been
paid for all subsequent interest periods. Each payment of interest shall include
interest accrued to, but excluding, the date of such payment. Unless otherwise
specified in the applicable Pricing Supplement and Note, interest payments in
respect of Fixed Rate Notes will be made semiannually on March 15 and September
15 of each year and at maturity. However, the first payment of interest on any
Note issued between a Regular Record Date and an Interest Payment Date will be
made on the Interest Payment Date following the next succeeding Regular Record
Date. Unless otherwise specified in the applicable Pricing Supplement and Note,
the Regular Record Date for any payment of interest shall be the February 28 (or
February 29, in the case of leap years) or August 31 prior to the applicable
Interest Payment Date. Interest at maturity will be payable to the person to
whom the principal is payable. Payments of Principal and Interest: Upon
presentment and delivery of the Note, the Paying Agent will pay the principal
amount of each Note at maturity and the final installment of interest in
immediately available funds. All interest payments on a Note, other than
interest due at maturity, will be made by check drawn on the Paying Agent and
mailed by the Paying Agent to the person entitled thereto as provided in the
Note. However, holders of ten million dollars or more in aggregate principal
amount of Notes (whether having identical or different terms and provisions)
shall be entitled to receive payments of interest, other than at maturity, by
wire transfer of immediately available funds if appropriate wire transfer
instructions have been received in writing by the Paying Agent not less than 16
days prior to the applicable Interest Payment Date. Any payment of principal or
interest required to be made on an Interest Payment Date or at maturity of a
Note which is not a Business Day (as defined below) need not be made on such
day, but may be made on the next succeeding Business Day with the same force and
effect as if made on the Interest Payment Date or at maturity, as the case may
be, and no interest shall accrue for the period from and after such Interest
Payment Date or maturity.
B-14
<PAGE> 39
The Paying Agent will provide monthly to the Company a list of the
principal and interest, to the extent ascertainable, in each currency to be paid
on Notes maturing in the next succeeding month. The Paying Agent will be
responsible for withholding taxes on interest paid as required by applicable
law, but shall be relieved from any such responsibility if it acts in good faith
and in reliance upon an opinion of counsel.
Notes presented to the Paying Agent at maturity for payment will be
delivered to the Trustee for cancelation. All canceled Notes held by the Trustee
shall be destroyed, and the Trustee shall furnish to the Company a certificate
with respect to such destruction. Settlement Procedures: Settlement Procedures
with regard to each Note purchased through any Agent, as agent, shall be as
follows:
A. The Presenting Agent will advise the Company by telephone of the
following settlement information with regard to each Note confirmed promptly
thereafter by facsimile:
1. Exact name in which the Note is to be registered (the
"Registered Owner").
2. Exact address or addresses of the Registered Owner for
delivery, notices and payments of principal and interest.
3. Taxpayer identification number of the Registered Owner.
4. Principal amount of the Note.
5. Denomination of the Note.
6. Fixed Rate Notes: (a) interest rate; (b) sinking fund or
redemption date, if any; and (c) sinking fund or redemption prices, if
any.
Floating Rate Notes: (a) interest rate basis; (b)
initial interest rate; (c) spread or spread multiplier, if any; (d)
interest rate reset dates; (e) interest rate reset period; (f) interest
payment dates; (g) interest payment period; (h) index maturity; (i)
calculation agent; (j) maximum interest rate, if any; (k) minimum
interest rate, if any; (l) calculation date; (m) interest determination
dates; (n) sinking fund or redemption date, if any; and (o) sinking
fund or redemption prices, if any.
7. Price to public of the Note.
8. Settlement Date (Original Issue Date).
9. Maturity Date.
10. Net proceeds to the Company.
B-15
<PAGE> 40
11. Agent's Commission.
B. The Company shall provide promptly, to the Trustee, if requested,
the above Settlement information received from the Agent and shall cause the
Trustee, from the Agent and shall cause the Trustee to issue, authenticate and
deliver Notes. The Company also shall provide to the Trustee and/or Agent a copy
of the applicable Pricing Supplement, if requested.
C. The Trustee will complete the preprinted 4-ply Note packet
containing the following documents in forms approved by the Company, the
Presenting Agent and the Trustee:
1. Note with Agent's customer confirmation.
2. Stub 1--for the Trustee.
3. Stub 2--for Agent.
4. Stub 3--for the Company.
D. With respect to each trade, the Trustee will deliver the Notes and
Stub 2 thereof to the Presenting Agent at the following applicable address: Bank
of New York, Dealer Clearance Department, 1 Wall Street, 3rd Floor, Window 3B,
New York, New York 10005, Attn: For the Account of Morgan Stanley & Co.
Incorporated; Goldman, Sachs & Co., 85 Broad Street, New York, New York 10004,
Attn: Karen Robertson Registration Department; and J.P. Morgan Securities Inc.,
Transaction Execution Group, Attn: Maria Sramek, 60 Wall Street, 5th Floor, New
York, New York 10260. The Paying Agent will keep Stub 1. The Presenting Agent
will acknowledge receipt of the Note through a broker's receipt and will keep
Stub 2. Delivery of the Note will be made only against such acknowledgment of
receipt. Upon determination that the Note has been authorized, delivered and
completed as aforementioned, the Presenting Agent will wire the net proceeds of
the Note after deduction of its applicable commission to the Company pursuant to
standard wire instructions given by the Company.
E. The Presenting Agent will deliver the Note (with confirmations), as
well as a copy of the Prospectus and any applicable Prospectus Supplement or
Supplements received from the Company to the purchaser against payment in
immediately available funds.
F. The Trustee will send Stub 3 to the Company.
Settlement Procedures Timetable: For offers accepted by the Company, Settlement
Procedures "A" through "F" set forth above shall be completed on or before the
respective times set forth below:
Settlement Procedure Time
A-B 3:00 p.m. on Business Day prior to Settlement Date
B-16
<PAGE> 41
C-D 2:15 p.m. on Settlement Date
E 3:00 p.m. on Settlement Date
F 5:00 p.m. on Settlement Date
Failure to Settle: In the event that a purchaser of a Note from the Company
shall either fail to accept delivery of or make payment for a Note on the date
fixed for settlement, the Presenting Agent will forthwith notify the Trustee and
the Company by telephone, confirmed in writing, and return the Note to the
Trustee.
The Trustee, upon receipt of the Note from the Agent, will immediately
advise the Company and the Company will promptly arrange to credit the account
of the Presenting Agent in an amount of immediately available funds equal to the
amount previously paid by such Agent in settlement for the Note. Such credits
will be made on the Settlement Date if possible, and in any event not later than
the Business Day following the Settlement Date; provided that the Company has
received notice on the same day. If such failure shall have occurred for any
reason other than failure by such Agent to perform its obligations hereunder or
under the Distribution Agreement, the Company will reimburse such Agent on an
equitable basis for its loss of the use of funds during the period when the
funds were credited to the account of the Company. Immediately upon receipt of
the Note in respect of which the failure occurred, the Trustee will cancel and
destroy the Note, make appropriate entries in its records to reflect the fact
that the Note was never issued, and accordingly notify in writing the Company.
B-17
<PAGE> 1
EXHIBIT 4
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) TO THE ISSUER
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND
ANY PAYMENT IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR THE INDIVIDUAL
SECURITIES REPRESENTED HEREBY, THIS GLOBAL SECURITY MAY NOT BE TRANSFERRED
EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A
NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY
OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE
OF SUCH SUCCESSOR DEPOSITARY.
REGISTERED TRW INC. REGISTERED
- ---------- MEDIUM-TERM NOTE, SERIES E ----------
(GLOBAL NOTE)
Number ______________ CUSIP ______________
If applicable, the "Total Amount of OID," "Yield to Maturity" and
"Initial Accrual Period OID" (computed under the approximate method) below will
be completed solely for the purposes of applying the United States Federal
income tax original issue discount ("OID") rules.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
[ ] Floating Rate Note [ ] Fixed Rate Note [ ] Specified Currency: [ ] U.S. Dollars
[ ]Other: ________________
Original Issue Date:________________________
Authorized Denominations:____________________________(Only
Principal Amount:___________________________ applicable if Specified Currency is other than U.S.
Dollars)
Issue Price:________________________________ Total Amount of OID:_____________________________________
Maturity Date:______________________________ Yield to Maturity:_______________________________________
Interest Rate:______________________________ Initial Accrual Period OID:______________________________
Interest Payment Period:____________________ Interest Payment Dates:__________________________________
Index:______________________________________
Alternative Payment Procedures (Only Applicable if Specified Currency is other than U.S. Dollars):______
- --------------------------------------------------------------------------------------------------------
[ ] Holder May Not Elect to Receive Payments in U.S. Dollars (Only Applicable if Specified Currency is
other than U.S. Dollars).
REDEMPTION REDEMPTION SINKING FUND SINKING FUND REPAYMENT REPAYMENT
DATE(S) PRICE(S) DATE(S) PRICE(S) DATE(S) PRICE(S)
- ------------- ------------- ------------- ------------- ------------- -------------
- ------------- ------------- ------------- ------------- ------------- -------------
- ------------- ------------- ------------- ------------- ------------- -------------
- ------------- ------------- ------------- ------------- ------------- -------------
Other Provisions:_______________________________________________________________________________________
________________________________________________________________________________________________________
________________________________________________________________________________________________________
________________________________________________________________________________________________________
</TABLE>
<PAGE> 2
ONLY APPLICABLE IF THIS IS A FLOATING RATE NOTE:
<TABLE>
<CAPTION>
<S> <C>
Initial Interest Rate:________________________ Spread (plus or minus):_______________________
Base Rate:____________________________________ Spread Multiplier:____________________________
Index Maturity:_______________________________ Maximum Interest Rate:________________________
Interest Reset Period:________________________ Minimum Interest Rate:________________________
Interest Reset Dates:_________________________ Calculation Agent:____________________________
</TABLE>
This Note is a Registered Note of TRW Inc., an Ohio corporation (the
"Company"). This note is one of a series of Securities (as defined on the
attachment hereto) issued under the Indenture referred to on the attachment
hereto designated as Medium-Term Notes, Series E (the "Notes"). Subject to the
provisions hereof, the Company, for value received, hereby promises to pay to:
, or
registered assigns, the principal sum of:
(Specified Currency) on the Maturity Date shown above and to pay premium, if
any, and interest, if any, thereon, as described on the attachment hereto.
The principal of, premium, if any, and interest on this Note are
payable by the Company in such coin or currency of the United States of America
(or other Specified Currency as provided in this Note) as at the time of payment
shall be legal tender for the payment of public and private debts.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS NOTE SET
FORTH ON THE ATTACHMENT HERETO, 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 manually
executed by or on behalf of the Trustee under the Indenture, this Note shall not
be entitled to any benefit under the Indenture, or be valid or obligatory for
any purpose.
IN WITNESS WHEREOF, TRW Inc. has caused this Note to be duly executed
under its corporate seal.
<TABLE>
<CAPTION>
<S> <C>
TRW INC., an Ohio corporation
By:_______________________________________________
Carl G. Miller, Executive Vice President and
[Seal] Chief Financial Officer
By:_______________________________________________
William B. Lawrence, Executive Vice President,
General Counsel and Secretary
</TABLE>
----------------------------------
CERTIFICATE OF AUTHENTICATION
This is one of the Notes issued under the within-mentioned Indenture.
Dated: _________________________
THE CHASE MANHATTAN BANK,
as Trustee and Authenticating Agent
By:___________________________________
Authorized Signatory
2
<PAGE> 3
TRW Inc.
Medium-Term Note, Series E
1. This Note is one of the Medium-Term Notes, Series E (herein called
the "Notes") of the Company that is among the duly authorized debentures, notes
or other evidences of indebtedness (hereinafter called the "Securities") of the
Company, all such Securities issued and to be issued under an Indenture, dated
as of May 1, 1986, as amended by the First Supplemental Indenture, dated as of
August 24, 1989, the Second, Third, Fourth and Fifth Supplemental Indentures,
each dated as of June 2, 1999, and the Sixth and Seventh Supplemental
Indentures, each dated as of June 23, 1999, between the Company and The Chase
Manhattan Bank, as successor Trustee to Mellon Bank, N.A. (herein called the
"Indenture"), to which Indenture and all other indentures supplemental thereto
reference is hereby made for a statement of the rights and limitations of rights
thereunder of the Holders of the Securities and of the rights, obligations,
duties and immunities of the Trustee, any agent of the Trustee and the Paying
Agent for each series of Securities and of the Company, and the terms upon which
the Securities are issued and are to be authenticated and delivered. As provided
in the Indenture, the Securities may be issued in one or more series, which
different series may be issued in various aggregate principal amounts, may
mature at different times, may bear interest, if any, at different rates, may be
subject to different redemption provisions, if any, may be subject to different
sinking, purchase or analogous funds, if any, may be subject to different
covenants and Events of Default (as defined in the Indenture) and may otherwise
vary as provided or permitted in the Indenture. The Notes of this series may be
issued at various times with different maturity dates and different principal
repayment provisions, may be issued as global Notes in registered form ("Global
Notes") or definitive Notes in registered form without coupons attached
("Certificated Notes"), may bear interest at different rates, may be payable in
different currencies and may otherwise vary, all as provided in the Indenture.
2.A. The principal of, premium, if any, and interest, if any, on this
Note are payable by the Company in such coin or currency specified on the face
hereof as at the time of payment shall be legal tender for the payment of public
and private debts (the "Specified Currency"). Principal and interest will be
determined with reference to such rate, formula, index, including commodity
prices or equity indices, or method of calculation shown on the face hereof. If
the maturity (or date of redemption or repayment) of this Note falls on a day
that is not a Business Day (as defined below), the payment of principal,
premium, if any, and interest will be made on the next succeeding Business Day,
and no interest on such payment shall accrue for the period from and after such
maturity, redemption or repayment date, as the case may be, and such Business
Day shall be considered the day such payments are due for all purposes of this
Note.
B. The Regular Record Date (as defined in the Indenture) with respect
to any Interest Payment Date (as defined below) shall be the date 15 calendar
days immediately preceding such Interest Payment Date, whether or not such date
shall be a Business Day (as defined below). Interest 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 a Note is registered at the close of business on the
Regular Record Date next
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preceding such Interest Payment Date; provided, however, that interest payable
on the Interest Payment Date occurring at Maturity will be paid to the person to
whom principal shall be payable; provided, further, that the first payment of
interest on any Note with an Original Issue Date between a Regular Record Date
and an Interest Payment Date or on an Interest Payment Date will be made on the
Interest Payment Date following the next succeeding Regular Record Date to the
registered owner of this Note at the close of business on such next succeeding
Regular Record Date. Notwithstanding the foregoing, any interest that is payable
but not punctually paid or duly provided for on any Interest Payment Date shall
forthwith cease to be payable to the registered Holder thereof on such Regular
Record Date, and may be paid to the person in whose name such Note is registered
on the close of business on a Special Record Date (as defined in the Indenture)
for the payment of such Defaulted Interest to be fixed by the Trustee, notice
whereof having been given to the Holder of such Note not less than 30 days prior
to the date of the proposed payment, or may be paid at any time and in any other
lawful manner, as more fully provided in the Indenture. A "Business Day" means
any day, other than a Saturday or Sunday, (a) that is neither a legal holiday
nor a day on which banking institutions are authorized or required by law or
regulation to close (x) in The City of New York or (y) for notes denominated in
a specified currency other than U.S. dollars, Australian dollars or euro, in the
principal financial center of the country of the specified currency or (z) for
notes denominated in Australian dollars, in Sydney, (b) for notes denominated in
euro, that is also a day on which the Trans-European Automated Real-time Gross
Settlement Express Transfer System, which is commonly referred to as "TARGET,"
is operating and (c) for LIBOR Notes, a London Banking Day. "London Banking Day"
means any day on which dealings in deposits in the relevant Index Currency are
transacted in the London interbank market. In connection with any calculations
of the rate of interest hereon, all percentages will be rounded, if necessary,
to the nearest one hundred-thousandth of a percentage point (with five
one-millionths of a percentage point being rounded up), and all currency or
currency unit amounts used and resulting from such calculations on the Notes
will be rounded to the nearest one-hundredth of a unit (with five
one-thousandths of a unit being rounded up) and all dollar amounts used in or
resulting from such calculation on Floating Rate Notes will be rounded to the
nearest cent, with half-cent rounded up.
C. If this is a Fixed Rate Note, the Company promises to pay interest
on the principal amount at the rate per annum shown on the face hereof until the
principal amount hereof is paid or made available for payment. The Company will
pay interest on March 15 and September 15 of each year or on the dates otherwise
specified on the face hereof (each an "Interest Payment Date"), commencing with
the Interest Payment Date immediately following the Original Issue Date shown on
the face hereof, and at Maturity. If any Interest Payment Date falls on a day
that is not a Business Day, the interest payment shall be made on the next day
that is a Business Day, and no interest on such payment shall accrue for the
period from and after the Interest Payment Date. Interest shall accrue from and
including the most recent Interest Payment Date or, if no interest has been paid
or duly provided for, from and including the Original Issue Date shown on the
face hereof, to but excluding the Interest Payment Date. The amount of such
interest payable on any Interest Payment Date shall be computed on the basis of
a 360-day year of twelve 30-day months. Notwithstanding the foregoing, periodic
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payments of interest will not be made in respect of a Note for which the
interest rate is zero (a "Zero-Coupon Note").
D. If this is a Floating Rate Note, the Company promises to pay
interest on the principal amount at the rate per annum equal to the Initial
Interest Rate shown on the face hereof until the first Interest Reset Date shown
on the face hereof following the Original Issue Date specified on the face
hereof and thereafter at a rate determined in accordance with the provisions
below under the heading "Determination of CD Rate," "Determination of Commercial
Paper Rate," "Determination of EURIBOR," "Determination of LIBOR,"
"Determination of Federal Funds Rate," "Determination of CMT Rate,"
"Determination of Prime Rate," or "Determination of Treasury Rate" depending
upon whether the Base Rate specified on the face hereof is CD Rate, Commercial
Paper Rate, EURIBOR, LIBOR, Federal Funds Rate, CMT Rate, Prime Rate or Treasury
Rate or at a rate determined with reference to such other interest rate,
formula, index, including commodity prices or equity indices, or method of
calculation shown on the face hereof, until the principal hereof is paid or duly
made available for payment. The Company will pay interest monthly, quarterly,
semi-annually or annually as specified on the face hereof opposite "Interest
Payment Period", commencing with the first Interest Payment Date specified on
the face hereof next succeeding the Original Issue Date, and at Maturity. Unless
otherwise provided on the face hereof, each Interest Payment Date will be, in
the case of Floating Rate Notes with a daily, weekly or monthly Interest Payment
Period, the third Wednesday of each month or on the third Wednesday of March,
June, September and December; in the case of Floating Rate Notes with a
quarterly Interest Payment Period, the third Wednesday of March, June, September
and December; in the case of Floating Rate Notes with a semi-annual Interest
Payment Period, the third Wednesday of the two months specified on the face
hereof; and in the case of Floating Rate Notes with an annual Interest Payment
Period, the third Wednesday of the month specified on the face hereof; provided,
however, that if an Interest Payment Date would fall on a day that is not a
Business Day, such Interest Payment Date shall be the following day that is a
Business Day, except that if the Base Rate is EURIBOR or LIBOR and such
following day is in the next succeeding calendar month, such Interest Payment
Date shall be the immediately preceding Business Day. The interest payable on a
Floating Rate Note (except in the case of a Floating Rate Note that resets daily
or weekly) on each Interest Payment Date shall be the amount of interest accrued
from and including the Original Issue Date shown on the face hereof or from and
including the last date in respect of which interest has been paid or duly
provided for, to but excluding such Interest Payment Date. The interest payable
at Maturity shall be the amount of interest accrued from and including the
Original Issue Date or from and including the last date in respect of which
interest has been paid, as the case may be, to, but excluding, the date of
Maturity. Such accrued interest will be calculated by multiplying the principal
amount hereof by an accrued interest factor. This accrued interest factor shall
be computed by adding the interest factors calculated for each day in the period
for which accrued interest is being calculated. The interest factor (expressed
as a decimal) for each such day shall be computed by dividing the interest rate
applicable to such day (a) by 360, if the Base Rate is the CD Rate, the
Commercial Paper Rate, EURIBOR, the Federal Funds Rate, LIBOR (except for LIBOR
notes denominated in pounds sterling) and the Prime Rate; (b) by 365, in the
case of LIBOR notes denominated in pounds sterling; or (c) by the actual number
of days in the
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year, if the Base Rate is the Treasury Rate or the CMT Rate. If this is a
Floating Rate Note, the interest rate in effect on each day will be (a) if such
day is an Interest Reset Date (as defined in the Indenture), the interest rate
with respect to the Interest Determination Date (as defined in the Indenture)
pertaining to such Interest Reset Date or (b) if such day is not an Interest
Reset Date, the interest rate with respect to the Interest Determination Date
pertaining to the next preceding Interest Reset Date subject in either case to
any adjustment by the addition or subtraction of the Spread, if any, specified
on the face hereof, and/or by multiplication by the Spread Multiplier, if any,
specified on the face hereof and to any Maximum or Minimum Interest Rate
limitation; provided, however, that (i) the interest rate in effect from the
Original Issue Date to the first Interest Reset Date shall be the Initial
Interest Rate and (ii) the interest rate in effect for the ten calendar days
immediately prior to Maturity shall be that in effect on the tenth calendar day
preceding Maturity. Notwithstanding the foregoing, the interest rate hereon
shall not be greater than the Maximum Interest Rate, if any, or less than the
Minimum Interest Rate, if any, shown on the face hereof. In addition, the
interest rate hereon shall in no event be higher than the maximum rate, if any,
permitted by New York law as the same may be modified by United States law of
general application. Commencing with the first Interest Reset Date specified on
the face hereof following the Original Issue Date and thereafter upon each
succeeding Interest Reset Date specified on the face hereof, the rate at which
interest on a Floating Rate Note is payable shall be adjusted as specified on
the face hereof opposite Interest Reset Period; provided, however, that if any
Interest Reset Date would otherwise be a day that is not a Business Day, such
Interest Reset Date shall be postponed to the next day that is a Business Day,
except that if the Base Rate is EURIBOR or LIBOR and such Business Day is in the
next succeeding calendar month, such Interest Reset Date shall be the
immediately preceding Business Day; further, provided, that if the Base Rate is
the Treasury Rate and resets weekly and the normally scheduled Treasury auction
is not on a Monday, the Interest Reset Date shall be as provided below. The
Interest Determination Date pertaining to an Interest Reset Date if the Base
Rate is the CD Rate, the Commercial Paper Rate, the Federal Funds Rate, the CMT
Rate, or the Prime Rate will be the second Business Day next preceding such
Interest Reset Date. For EURIBOR notes or LIBOR notes for which the Index
Currency is euros, the Interest Determination Date will be the second Target
Settlement Day prior to the Interest Reset Date. "TARGET Settlement Day" means
any day on which the Trans-European Automated Real-time Gross Settlement Express
Transfer System is open. The Interest Determination Date pertaining to an
Interest Reset Date if the Base Rate is LIBOR (other than for LIBOR notes for
which the Index Currency is euros) will be the second London Banking Day
preceding such Interest Reset Date except that the Interest Determination Date
pertaining to an Interest Reset Date for a LIBOR note for which the Index
Currency is pounds sterling will be the Interest Reset Date. The Interest
Determination Date pertaining to an Interest Reset Date if the Base Rate is the
Treasury Rate will be the day of the week in which such Interest Reset Date
falls on which Treasury bills would normally be auctioned. Treasury bills are
normally sold at auction on Monday of each week, unless that day is a legal
holiday, in which case the auction is normally held on the following Tuesday,
but such auction may be held on the preceding Friday. If, as the result of a
legal holiday, an auction is so held on the preceding Friday, such Friday will
be the Interest Determination Date pertaining to the Interest Reset Date
occurring in the next succeeding week. If an auction falls on a day
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<PAGE> 7
that is an Interest Reset Date, such Interest Reset Date will be the next
following Business Day. Subject to applicable provisions of law and except as
specified herein, on each Interest Reset Date the rate of interest shall be the
rate determined in accordance with the provisions of the applicable heading
below.
DETERMINATION OF CD RATE. If the Base Rate indicated on the face hereof
is CD Rate, the interest rate shall be the rate on such date for negotiable
certificates of deposit having the Index Maturity specified in the applicable
Pricing Supplement as published by the Board of Governors of the Federal Reserve
System in "Statistical Release H.15(519), Selected Interest Rates," or any
successor publication of the Board of Governors of the Federal Reserve System
("H.15(519)") under the heading "CDs (Secondary Market)." If the above rate is
not published in H.15(519) by 9:00 a.m., New York City time, on the Calculation
Date (as defined below), the CD Rate will be the rate on that Interest
Determination Date set forth in the daily update of H.15(519), available through
the world wide website of the Board of Governors of the Federal Reserve System
at http://www.bog.frb.fed.us/releases/h15/update, or any successor site or
publication (the "H.15 Daily Update") for the Interest Determination Date for
certificates of deposit having the Index Maturity specified in the applicable
Pricing Supplement, under the caption "CDs (Secondary Market)." If the above
rate is not yet published in either H.15(519) or the H.15 Daily Update by 3:00
p.m., New York City time, on the Calculation Date, the Calculation Agent will
determine the CD rate to be the arithmetic mean of the secondary market offered
rates as of 10:00 a.m., New York City time, on that Interest Determination Date
of three leading nonbank dealers in negotiable U.S. dollar certificates of
deposit in The City of New York selected by the Calculation Agent, after
consultation with the Company, for negotiable certificates of deposit of major
United States money center banks of the highest credit standing in the market
for negotiable certificates of deposit with a remaining maturity closest to the
Index Maturity specified in the applicable Pricing Supplement in an amount that
is representative for a single transaction in that market at that time. If the
dealers selected by the Calculation Agent are not quoting as set forth above,
the CD Rate will remain the CD Rate for the immediately preceding Interest Reset
Period, or, if there was no Interest Reset Period, the rate of interest payable
will be the Initial Interest Rate.
DETERMINATION OF COMMERCIAL PAPER RATE. If the Base Rate indicated on
the face hereof is the Commercial Paper Rate, the interest rate shall equal the
Money Market Yield (as defined below), calculated as described below, of the
rate on the Interest Determination Date for commercial paper having the Index
Maturity specified on the face hereof, as that rate is published in H.15(519),
under the heading "Commercial Paper -- Nonfinancial." If the above rate is not
published by 9:00 a.m., New York City time, on the Calculation Date, then the
Commercial Paper Rate will be the Money Market Yield of the rate on that
Interest Determination Date for commercial paper of the Index Maturity specified
on the face hereof as published in the H.15 Daily Update under the heading
"Commercial Paper -- Nonfinancial." If by 3:00 p.m., New York City time, on that
Calculation Date the rate is not yet published in either H.15(519) or the H.15
Daily Update, then the Calculation Agent will determine the Commercial Paper
Rate to be the Money Market Yield of the arithmetic mean of the offered rates as
of 11:00 a.m., New York City time, on that Interest Determination Date of three
leading dealers of commercial paper in The City of New York selected by the
Calculation Agent, after
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<PAGE> 8
consultation with the Company, for commercial paper of the Index Maturity
specified on the face hereof, placed for an industrial issuer whose bond rating
is "AA," or the equivalent, from a nationally recognized statistical rating
agency. If the dealers selected by the Calculation Agent are not quoting as
mentioned above, the Commercial Paper Rate for that Interest Determination Date
will remain the Commercial Paper Rate for the immediately preceding Interest
Reset Period, or, if there was no Interest Reset Period, the rate of interest
payable will be the initial interest rate. The "Money Market Yield" will be a
yield calculated in accordance with the following formula:
D x 360
Money Market Yield = -------------- x 100
360 - (D x M)
where "D" refers to the applicable per year rate for commercial paper quoted on
a bank discount basis and expressed as a decimal and "M" refers to the actual
number of days in the interest period for which interest is being calculated.
DETERMINATION OF EURIBOR. If the Base Rate indicated on the face hereof
is EURIBOR, the interest rate shall be the rate for deposits in euros as
sponsored, calculated and published jointly by the European Banking Federation
and ACI - The Financial Market Association, or any company established by the
joint sponsors for purposes of compiling and publishing those rates, for the
Index Maturity specified in the applicable Pricing Supplement as that rate
appears on the display on Bridge Telerate, Inc., or any successor service, on
page 248 or any other page as may replace page 248 on that service, which is
commonly referred to as "Telerate Page 248," as of 11:00 a.m. (Brussels time).
If the above rate does not appear, the Calculation Agent will request the
principal Euro-zone office of each of four major banks in the Euro-zone
interbank market, as selected by the Calculation Agent, after consultation with
the Company, to provide the Calculation Agent with its offered rate for deposits
in euros, at approximately 11:00 a.m. (Brussels time) on the interest
determination date, to prime banks in the Euro-zone interbank market for the
Index Maturity specified in the applicable Pricing Supplement commencing on the
applicable Interest Reset Date, and in a principal amount not less than the
equivalent of U.S.$1 million in euro that is representative of a single
transaction in euro, in that market at that time. If at least two quotations are
provided, EURIBOR will be the arithmetic mean of those quotations. If fewer than
two quotations are provided, EURIBOR will be the arithmetic mean of the rates
quoted by four major banks in the Euro-zone, as selected by the Calculation
Agent, after consultation with the Company, at approximately 11:00 a.m.
(Brussels time), on the applicable Interest Reset Date for loans in euro to
leading European banks for a period of time equivalent to the Index Maturity
specified in the applicable Pricing Supplement commencing on that Interest Reset
Date in a principal amount not less than the equivalent of U.S.$1 million in
euro. If the banks so selected by the Calculation Agent are not quoting as
mentioned in the previous sentence, the EURIBOR rate in effect for the
applicable period will be the same as EURIBOR for the immediately preceding
Interest Reset Period, or, if there was no Interest Reset Period, the rate of
interest will be the Initial Interest Rate. "Euro-zone" means the region
comprised of member states of the European Union that adopt the single currency
in
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accordance with the treaty establishing the European Community, as amended by
the treaty on European Union.
DETERMINATION OF LIBOR. If the Base Rate indicated on the face hereof
is LIBOR, with respect to LIBOR indexed to the offered rates for U.S. Dollar
deposits, the interest rate shall be either: (a) if "LIBOR Reuters" is specified
in the applicable Pricing Supplement, the arithmetic mean of the offered rates
for deposits in the Index Currency having the Index Maturity designated in the
applicable Pricing Supplement, commencing on the second London Banking Day
immediately following that Interest Determination Date, that appear on the
Designated LIBOR Page, as defined below, as of 11:00 a.m., London time, on that
Interest Determination Date, if at least two such offered rates appear on such
Designated LIBOR Page; except that if the specified Designated LIBOR Page by its
terms provides only for a single rate, that single rate shall be used, or (b) if
"LIBOR Telerate" is specified in the applicable Pricing Supplement, the rate for
deposits in the Index Currency having the Index Maturity designated in the
applicable Pricing Supplement, commencing on the second London Banking Day
immediately following such Interest Determination Date, or, if pounds sterling
is the index currency, commencing on that Interest Determination Date, that
appears on the Designated LIBOR Page as of 11:00 a.m., London time, on that
Interest Determination Date. If (1) fewer than two offered rates appear and
"LIBOR Reuters" is specified in the applicable Pricing Supplement, or (2) no
rate appears and the applicable Pricing Supplement specifies either (x) "LIBOR
Telerate" or (y) "LIBOR Reuters," and the Designated LIBOR Page by its term
provides only for a single rate, then the Calculation Agent will request the
principal London offices of each of four major reference banks in the London
interbank market, as selected by the Calculation Agent, after consultation with
the Company, to provide the Calculation Agent with its offered quotation for
deposits in the Index Currency for the period of the Index Maturity designated
in the applicable Pricing Supplement commencing on the second London Banking Day
immediately following such Interest Determination Date, or, if pounds sterling
is the Index Currency, commencing on that Interest Determination Date, to prime
banks in the London interbank market at approximately 11:00 a.m., London time,
on that Interest Determination Date and in a principal amount of not less than
U.S. $1,000,000 (or the equivalent in the Index Currency, if the Index Currency
is not the U.S. Dollar) that is representative of a single transaction in such
Index Currency in such market at such time. If at least two such quotations are
provided, LIBOR determined on such Interest Determination Date will be the
arithmetic mean of such quotations. If fewer than two quotations are provided,
LIBOR determined on such Interest Determination Date will be the arithmetic mean
of the rates quoted at approximately 11:00 a.m. (or such other time specified in
the applicable Pricing Supplement), in the applicable principal financial center
for the country of the Index Currency on such Interest Determination Date, by
three major banks in such principal financial center selected by the Calculation
Agent, after consultation with the Company, for loans in the Index Currency to
leading European banks commencing on the second London Banking Day immediately
following such Interest Determination Date having the Index Maturity designated
in the applicable Pricing Supplement and in a principal amount of not less than
U.S. $1,000,000 (or the equivalent in the Index Currency, if the Index Currency
is not the U.S. Dollar) that is representative for a single transaction in such
Index Currency in such market at such time. If the banks so selected by the
Calculation
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Agent are not quoting as mentioned in this sentence, LIBOR in effect for the
applicable period will be the same as LIBOR for the immediately preceding
Interest Reset Period (or, if there was no such Interest Reset Period, the rate
of interest payable on the LIBOR Notes for which LIBOR is being determined shall
be the Initial Interest Rate). "Index Currency" means the currency specified in
the applicable Pricing Supplement as the currency for which LIBOR shall be
calculated, or if the euro is substituted for that currency, the index currency
will be the euro. If no such currency is specified in the applicable Pricing
Supplement, the Index Currency shall be U.S. Dollars. "Designated LIBOR Page"
means either (a) if "LIBOR Reuters" is designated in the applicable Pricing
Supplement, the display on the Reuters Monitor Money Rates Service for the
purpose of displaying the London interbank rates of major banks for the
applicable Index Currency or its designated successor, or (b) if "LIBOR
Telerate" is designated in the applicable Pricing Supplement, the display on
Bridge Telerate, Inc., or any successor service on the page specified in the
applicable Pricing Supplement, or any other page as may replace that page on
that service for the purpose of displaying the London Interbank rates of major
banks for the applicable Index Currency. If neither LIBOR Reuters nor LIBOR
Telerate is specified in the applicable Pricing Supplement, LIBOR for the
applicable Index Currency, as it will be determined as if LIBOR Telerate were
specified, and, if the U.S. Dollar is the Index Currency, Page 3750 had been
specified.
DETERMINATION OF FEDERAL FUNDS RATE. If the Base Rate indicated on the
face hereof is the Federal Funds Rate, the interest rate shall be the rate on
such date for Federal funds, as published in H.15(519) under the heading
"Federal Funds (Effective)" as displayed on Bridge Telerate, Inc., or any
successor service, on page 120 or any other page as may replace the applicable
page on that service, which is commonly referred to as "Telerate Page 120." If
the above rate is not so published by 9:00 a.m., New York City time, on the
Calculation Date pertaining to such Interest Determination Date, the Federal
Funds Rate will be the rate on such Interest Determination Date as published in
the H.15 Daily Update under the heading "Federal Funds/Effective Rate." If such
rate is not yet published in either H.15(519) or the H.15 Daily Update by 3:00
p.m., New York City time, on the Calculation Date pertaining to such Interest
Determination Date, the Federal Funds Rate for such Interest Determination Date
will be calculated by the Calculation Agent and will be the arithmetic mean of
the rates for the last transaction in overnight Federal funds by each of three
leading brokers of Federal funds transactions in The City of New York selected
by the Calculation Agent, after consultation with the Company, prior to 9:00
a.m., New York City time, on such Interest Determination Date. If the brokers
selected by the Calculation Agent are not quoting as set forth above, the
Federal Funds Rate relating to that Interest Determination Date will remain the
Federal Funds Rate for the immediately preceding Interest Reset Period, or, if
there was no such Interest Reset Period, the rate of interest payable on the
Federal Funds Rate Notes for which such Federal Funds Rate is being determined
shall be the Initial Interest Rate.
DETERMINATION OF PRIME RATE. If the Base Rate indicated on the face
hereof is the Prime Rate, the interest rate shall be the rate set forth in
H.15(519) for such date under the heading "Bank Prime Loan." If that rate is not
published prior to 9:00 a.m., New York City time, on the Calculation Date
pertaining to such Interest Determination
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Date, the Prime Rate for such Interest Determination Date will be the rate on
that Interest Determination Date as published in the H.15 Daily Update under the
heading "Bank Prime Loan." If such rate is not published prior to 3:00 p.m., New
York City time, on the Calculation Date pertaining to such Interest
Determination Date in either H.15(519) or the H.15 Daily Update, then the
Calculation Agent will determine the Prime Rate to be the arithmetic mean of the
rates of interest publicly announced by each bank that appears on the Reuters
Screen USPRIME 1 Page (as defined below) as that bank's prime rate or base
lending rate as in effect for such Interest Determination Date, or, if fewer
than four such rates appear on the Reuters Screen USPRIME 1 Page for that
Interest Determination Rate, the Calculation Agent will determine the Prime Rate
to be the arithmetic mean of the prime rates quoted on the basis of the actual
number of days in the year divided by 360 as of the close of business on such
Interest Determination Date by at least three major banks in the City of New
York selected by the Calculation Agent, after consultation with the Company. If
the banks selected as aforesaid by the Calculation Agent are not quoting as set
forth above, the "Prime Rate" in effect for the applicable period remains the
Prime Rate for the immediately preceding Interest Reset Period, or, if there was
no Interest Reset Period, the rate of interest payable on the Prime Rate Notes
for which such Prime Rate is being determined shall be the Initial Interest
Rate. "Reuters Screen USPRIME 1 Page" means the display designated as Page
USPRIME 1 on the Reuters Monitor Money Rates Services, or any successor service,
or any other page as may replace the USPRIME 1 Page on that service for the
purpose of displaying prime rates or base lending rates of major United States
banks.
DETERMINATION OF TREASURY RATE. If the Base Rate indicated on the face
hereof is the Treasury Rate, the interest rate shall be the rate from the
auction held on the applicable Interest Determination Date of direct obligations
of the United States ("Treasury Bills)," having the Index Maturity specified in
the applicable pricing supplement as that rate appears under the caption
"INVESTMENT RATE" on the display on Bridge Telerate, Inc., or any successor
service, on page 56 or any other page as may replace page 56 on that service,
("Telerate Page 56)," or page 57 or any other page as may replace page 57 on
that service ("Telerate Page 57)," or
if the rate described in the preceding clause is not published by 3:00
p.m., New York City time, on the Calculation Date, the bond equivalent yield of
the rate for the applicable Treasury Bills as published in the H.15 Daily
Update, or other recognized electronic source used for the purpose of displaying
the applicable rate, under the caption "U.S. Government Securities/Treasury
Bills/Auction High," or
if the rate described in the preceding clause is not published by 3:00
p.m., New York City time, on the related Calculation Date, the bond equivalent
yield of the auction rate of the applicable Treasury Bills, announced by the
United States Department of the Treasury, or
in the event that the rate referred to in the preceding clause is not
announced by the United States Department of the Treasury, or if the auction is
not held, the bond equivalent yield of the rate on the applicable Interest
Determination Date of Treasury Bills having the Index Maturity specified in the
applicable pricing supplement published
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in H.15(519) under the caption "U.S. Government Securities/Treasury
Bills/Secondary Market," or
if the rate referred to in the preceding clause is not so published by
3:00 p.m., New York City time, on the related Calculation Date, the rate on the
applicable Interest Determination Date of the applicable Treasury Bills as
published in H.15 Daily Update, or other recognized electronic source used for
the purpose of displaying the applicable rate, under the caption "U.S.
Government Securities/Treasury Bills/Secondary Market," or
if the rate referred to in the preceding clause is not so published by
3:00 p.m., New York City time, on the related Calculation Date, the rate on the
applicable Interest Determination Date calculated by the Calculation Agent as
the bond equivalent yield of the arithmetic mean of the secondary market bid
rates, as of approximately 3:30 p.m., New York City time, on the applicable
Interest Determination Date, of three primary United States government
securities dealers, which may include the agent or its affiliates, selected by
the Calculation Agent, for the issue of Treasury Bills with a remaining maturity
closest to the Index Maturity specified in the applicable pricing supplement, or
if the dealers selected by the Calculation Agent are not quoting as
mentioned in the preceding clause point, the Treasury rate for the immediately
preceding Interest Reset Period, or, if there was no Interest Reset Period, the
rate of interest payable will be the Initial Interest Rate.
The "bond equivalent yield" means a yield calculated in accordance with
the following formula and expressed as a percentage:
D x N
Bond Equivalent Yield= _______________x 100
360 - (D x M)
where "D" refers to the applicable per annum rate for Treasury Bills quoted on a
bank discount basis, "N" refers to 365 or 366, as the case may be, and "M"
refers to the actual number of days in the interest period for which interest is
being calculated.
DETERMINATION OF CMT RATE. If the Base Rate indicated on the face
hereof is the CMT Rate, the interest rate shall be the rate displayed on the
Designated CMT Telerate Page (as defined below) under the caption " ...Treasury
Constant Maturities ... Federal Reserve Board Release H.15 ...Mondays
Approximately 3:45 p.m.," under the column for the Designated CMT Maturity Index
(as defined below) for (i) the rate on that Interest Determination Date, if the
Designated CMT Telerate Page is 7051, and (ii) the week or the month, as
applicable, ended immediately preceding the week in which the related Interest
Determination Date occurs, if the Designated CMT Telerate Page is 7052. If such
rate is no longer displayed on the relevant page, or if not displayed by 3:00
p.m., New York City time, on the related Calculation Date, then the CMT Rate for
such Interest Determination Date will be the Treasury Constant Maturity rate for
the Designated CMT Maturity Index as published in the relevant H.15(519). If
such rate is
12
<PAGE> 13
no longer published, or, if not published by 3:00 p.m., New York
City time, on the related Calculation Date, then the CMT Rate for such Interest
Determination Date will be the Treasury Constant Maturity rate for the
Designated CMT Maturity Index (or other United States Treasury rate for the
Designated CMT Maturity Index) on the Interest Determination Date with respect
to such Interest Reset Date as may then be published by either the Board of
Governors of the Federal Reserve System or the United States Department of the
Treasury that the Calculation Agent determines to be comparable to the rate
formerly displayed on the Designated CMT Telerate Page and published in the
relevant H.15(519). If the information described in the immediately preceding
sentence is not provided by 3:00 p.m., New York City time, on the related
Calculation Date, then the CMT Rate for the Interest Determination Date will be
calculated by the Calculation Agent and will be a yield to maturity, based on
the arithmetic mean of the secondary market closing offer side prices as of
approximately 3:30 p.m., New York City time, on the Interest Determination Date
reported, according to their written records, by three leading primary United
States government securities dealers (each, a "Reference Dealer") in The City of
New York (which may include the Agents or their affiliates) selected by the
Calculation Agent (from five such Reference Dealers selected by the Calculation
Agent, after consultation with the Company, and eliminating the highest
quotation (or, in the event of equality, one of the highest) and the lowest
quotation (or, in the event of equality, one of the lowest), for the most
recently issued direct noncallable fixed rate obligations of the United States
("Treasury Notes") with an original maturity of approximately the Designated CMT
Maturity Index and remaining term to maturity of not less than such Designated
CMT Maturity Index minus one year. If the Calculation Agent cannot obtain three
such Treasury Note quotations, the CMT Rate for such Interest Determination Date
will be calculated by the Calculation Agent and will be a yield to maturity
based on the arithmetic mean of the secondary market offer side prices as of
approximately 3:30 p.m., New York City time, on the Interest Determination Date
of three Reference Dealers in The City of New York (from five such Reference
Dealers selected by the Calculation Agent, after consultation with the Company,
and eliminating the highest quotation (or, in the event of equality, one of the
highest) and the lowest quotation (or, in the event of equality, one of the
lowest), for Treasury Notes with an original maturity of the number of years
that is the next highest to the Designated CMT Maturity Index and a remaining
term to maturity closest to the Designated CMT Maturity Index and in an amount
of at least $100,000,000. If three or four (and not five) of such Reference
Dealers are quoting as described above then the CMT Rate will be based on the
arithmetic mean of the offer prices obtained and neither the highest nor the
lowest of such quotes will be eliminated. If fewer than three Reference Dealers
selected by the Calculation Agent are quoting as described herein, the CMT rate
for such Interest Reset Date will be the same as the CMT Rate for the
immediately preceding Interest Reset Period (or, if there was no such Interest
Reset Period, the rate of interest payable on the CMT Rate Notes for which the
CMT Rate is being determined shall be the Initial Interest Rate). If two
Treasury Notes with an original maturity as described in the third preceding
sentence have remaining terms to maturity equally close to the Designated CMT
Maturity Index, the quotes for the Treasury Note with the shorter remaining term
to maturity will be used. "Designated CMT Telerate Page" means the display on
Bridge Telerate, Inc., or any successor service, on the page designated in an
applicable Pricing Supplement (or any other page as may replace such page on
that service, for the purpose of displaying Treasury
13
<PAGE> 14
Constant Maturities as reported in H.15(519)). If no such page is specified in
the applicable Pricing Supplement, the Designated CMT Telerate Page shall be
7052, for the most recent week. "Designated CMT Maturity Index" means the
original period to maturity of the U.S. Treasury securities, which is either 1,
2, 3, 5, 7, 10, 20 or 30 years, specified in an applicable Pricing Supplement
with respect to which the CMT Rate will be calculated. If no such maturity is
specified in the applicable Pricing Supplement, the Designated CMT Maturity
Index shall be two years.
3.A. Payments in U.S. Dollars of interest (other than interest payable
at Maturity) on Notes will be made (except as specified below) by mailing a
check to the Holder at the address of the Holder appearing on the Security
Register (as defined in the Indenture) on the applicable Record Date (or, in the
case of Global Notes, by wire transfer to The Depository Trust Company, as
depository, or such other depository as is specified in the applicable Pricing
Supplement, or its nominee). Notwithstanding the foregoing, a Holder of U.S.
$10,000,000 or more in aggregate principal amount of Certificated Notes of like
tenor and terms (or a Holder of the equivalent thereof in a Specified Currency
other than U.S. Dollars as determined by the Exchange Rate Agent on the basis of
the Market Exchange Rate (as defined below) if such Holder is permitted to
elect, and has elected, to receive payments in U.S. Dollars in accordance with
Section 7C) shall be entitled to receive such payments in U.S. Dollars by wire
transfer of immediately available funds, but only if appropriate payment
instructions have been received in writing by the Paying Agent in The City of
New York on or prior to the Record Date relating to the applicable Interest
Payment Date. All payments of principal, premium, if any, and interest in a
Specified Currency other than U.S. Dollars will be made in immediately available
funds to an account maintained by the payee with a bank located outside the
United States and designated by the Holder of such Note unless otherwise
specified on the face hereof. Principal, premium, if any, and interest payable
at Maturity will be paid in immediately available funds upon surrender of such
Note at the office of the Paying Agent in The City of New York or at such other
office or agency as the Company may designate.
B. Initially, The Chase Manhattan Bank will be the Paying Agent with
respect to the Notes. The Company reserves the right at any time to vary or
terminate the appointment of any Paying Agent and to appoint additional or other
Paying Agents and to approve any change in the office through which any Paying
Agent acts, provided that there will at all times be a Paying Agent in The City
of New York.
4. If specified on the face hereof, this Note may be redeemed, as a
whole or from time to time in part, at the option of the Company, on not less
than 30 nor more than 60 days' notice given as provided in the Indenture, on any
Redemption Date(s) and at the related Redemption Price(s) set forth on the face
hereof. The Redemption Price(s) are expressed as a percentage of the principal
amount of this Note. If no such Redemption Date is set forth on the face hereof,
this Note may not be so redeemed pursuant to this Section 4. If less than all
the Outstanding Notes of like tenor and terms are to be redeemed, the particular
Notes to be redeemed shall be selected by the Trustee or the Registrar, if other
than the Trustee (initially, The Chase Manhattan Bank), not more than 60 days
prior to the Redemption Date from the Outstanding Notes of like tenor and terms
not previously called for redemption. Such selection shall be of
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<PAGE> 15
principal amounts equal to the minimum authorized denomination for such Notes or
any integral multiple thereof. Subject to the immediately preceding sentence,
such selection shall be made by any method as the Trustee or the Registrar, if
other than the Trustee, deems fair and appropriate. The notice of such
redemption shall specify which Notes are to be redeemed. In the event of
redemption of this Note in part only, a new Note or Notes of this series of like
tenor and terms for the unredeemed portion hereof will be issued to the Holder
hereof upon the cancellation hereof. If specified on the face hereof, the Note
will be subject to sinking fund payments.
5. If specified on the face hereof, this Note will be subject to
repayment at the option of the Holder hereof on the Repayment Date(s) and at the
related Repayment Price(s) set forth on the face hereof. The Repayment Price(s)
are expressed as a percentage of the principal amount of this Note. If no such
Repayment Date is set forth on the face hereof, this Note may not be so repaid.
On each Repayment Date, if any, this Note shall be repayable in whole or in part
at the option of the Holder hereof at the applicable Repayment Price set forth
on the face hereof, together with interest thereon to the date of repayment. For
this Note to be repaid in whole or in part at the option of the Holder hereof,
the Paying Agent must receive not less than 30 nor more than 45 days prior to
the Repayment Date (i) the Note with the form entitled "Option to Elect
Repayment" below duly completed or (ii) a telegram, telex, facsimile
transmission or a letter from a member of a national securities exchange or the
National Association of Securities Dealers, Inc., the Depository, in accordance
with its normal procedures, or a commercial bank or trust company in the United
States of America setting forth the name of the Holder of the Note, the
principal amount of the Note, the certificate number of the Note or a
description of the tenor and terms of the Note to be repaid, a statement that
the option to elect repayment is being exercised thereby and a guarantee that
the Note to be repaid with the form entitled "Option to Elect Repayment" on the
attachment to the Note duly completed will be received by the Paying Agent not
later than five Business Days after the date of such telegram, telex, facsimile
transmission or letter and such Note and form duly completed are received by the
Paying Agent by such fifth Business Day. Except in the case of renewable notes,
exercise of such repayment option shall be irrevocable. Such option may be
exercised by the Holder for less than that entire principal amount provided that
the principal amount remaining outstanding after repayment is an authorized
denomination.
6. Unless otherwise provided on the face hereof, the Company, at its
option, either (i) will be discharged from its obligations with respect to this
Note and (ii) need not comply with certain restrictive covenants of the
Indenture, upon the deposit with the Trustee, or, in the case of a discharge, 91
days after such deposit, in trust of money or the equivalent of securities of
the government that issued the currency in which this Note is denominated or
government agencies backed by the full faith and credit of such government, or a
combination thereof, which through the payment of interest thereon and principal
thereof in accordance with their terms will provide money in an amount
sufficient to pay all the principal (including any mandatory sinking fund
provisions) of, and interest on, and any repurchase obligations with respect to,
this Note, and all other notes of the series, on the dates such payments are due
in accordance with the terms of such notes. Such discharge of obligations or
lifting of restrictive covenants is subject to certain conditions as described
in the Indenture.
15
<PAGE> 16
7.A. If the Specified Currency is other than U.S. Dollars, unless the
Holder has elected otherwise in accordance with Section 7C, payment in respect
of this Note shall be made in the Specified Currency. If the Holder is permitted
to elect, and has elected, to receive payment in U.S. Dollars in accordance with
Section 7C, the Specified Currency will be converted into U.S. Dollars as
determined by the Exchange Rate Agent appointed by the Company based on the
highest bid quotation in The City of New York received by such Exchange Rate
Agent at approximately 11:00 a.m. New York City time on the second Business Day
preceding the applicable payment date, from three recognized foreign exchange
dealers selected by the Exchange Rate Agent (one of which may be the Exchange
Rate Agent) for the purchase by the quoting dealer of the Specified Currency for
U.S. Dollars for settlement on such payment date in the aggregate amount of the
Specified Currency payable on such payment date in respect of all Notes
denominated in such Specified Currency and scheduled to receive U.S. Dollar
payments on such date and at which the applicable dealer commits to execute a
contract. If no such bid quotations are available, payments will be made in the
Specified Currency unless such Specified Currency is unavailable due to the
imposition of exchange controls or to other circumstances beyond the Company's
control, in which case the Company will be entitled to make payments in respect
hereof in other currencies as provided below. All currency exchange costs will
be borne by the Holders of such Notes by deductions from such payments. Except
as set forth below, if the principal of, premium, if any, or interest on, any
Note is payable in a Specified Currency other than U.S. Dollars and such
currency is not available as of any payment date due to the imposition of
exchange controls or to other circumstances beyond the Company's control or is
no longer used by the government of the country issuing such currency or for the
settlement of transactions by public institutions of or within the international
banking community, then the Company will be entitled to satisfy its obligations
to Holders by making such payments in U.S. Dollars on the basis of the noon
dollar buying rate in The City of New York for cable transfers of the Specified
Currency published by the Federal Reserve Bank of New York (the "Market Exchange
Rate") on the date of such payment. If that rate of exchange is not then
available or is not published for a particular payment currency, the market
exchange rate will be based on the highest bid quotation in The City of New York
received by the Exchange Rate Agent at approximately 11:00 a.m., New York City
time, on the second Business Day preceding the applicable payment date from
three recognized foreign exchange dealers selected by the Exchange Rate Agent
for the purchase by the quoting dealer of the Specified Currency for U.S.
dollars for settlement on the payment date in the aggregate amount of the
Specified Currency payable to those holders or beneficial owners of notes and at
which the applicable dealer commits to execute a contract. Any such payment made
in U.S. Dollars shall not constitute an Event of Default. Notwithstanding the
foregoing, if payment on a Note is required to be made in a Specified Currency
other than U.S. Dollars and the Specified Currency is replaced by the Euro, the
payment of principal of, premium, if any, or interest on such Note shall be
effected in Euro in conformity with legally applicable measures taken pursuant
to, or by virtue of, the treaty establishing the European Community ("EC"), as
amended by the treaty on European Union (as so amended, the "Treaty"). Any such
payment made in Euro shall not constitute an Event of Default.
16
<PAGE> 17
B. All determinations of the Exchange Rate Agent pursuant to this
Section 7 shall be at its sole discretion (except to the extent expressly
provided herein that any determination is subject to approval by the Company)
and, in the absence of manifest error, shall be conclusive for all purposes and
binding upon the Holders of the Notes and the Trustee, any agent of the Trustee,
or the Paying Agent and the Exchange Rate Agent shall have no liability
therefor.
C. Unless otherwise specified on the face hereof, a Holder of Notes
denominated in a foreign currency may elect to receive payment of the principal
of, premium, if any, and interest on the Notes in U.S. Dollars by transmitting a
written request for such payment to the principal office of the Paying Agent in
the Borough of Manhattan, The City of New York, on or prior to the Regular
Record Date or at least 15 days prior to Maturity, as the case may be. Such
request may be in writing (mailed or hand delivered) or by cable, telex or other
form of facsimile transmissions confirmed in writing promptly thereafter. A
Holder of such Note may elect to receive payment in the U.S. Dollars for all
principal, premium, if any, and interest payments, if any, and need not file a
separate election for each payment. Such election will remain in effect until
revoked by written notice to such Paying Agent in the Borough of Manhattan, The
City of New York, but written notice of any such revocation must be received by
such Paying Agent in the Borough of Manhattan, The City of New York, on or prior
to the Regular Record Date or at least 15 days prior to Maturity, as the case
may be.
D. Interest on Notes denominated in a foreign currency paid in the
Specified Currency will be made to an account maintained by the payee with a
bank located outside the United States and designated by the Holder, unless
otherwise specified on the face hereof. Any payment of principal, premium, if
any, or interest required to be made on an Interest Payment Date or at Maturity
of a Note not denominated in U.S. Dollars which is not a Business Day need not
be made on such day, but may be made on the next succeeding Business Day with
the same force and effect as if made on the Interest Payment Date or at
Maturity, as the case may be, and no interest shall accrue for the period from
and after such Interest Payment Date or Maturity.
8. If an Event of Default with respect to the Notes shall occur and be
continuing, the principal of all of the Notes may be declared due and payable in
the manner and with the effect provided in the Indenture. If the principal of
any Original Issue Discount Note is declared to be due and payable or if such a
Note is to be redeemed pursuant to Section 4 above, the amount of principal due
and payable with respect to such Note shall be limited to the sum of the
principal amount of such Note multiplied by the Issue Price (expressed as a
percentage of such principal amount) plus the original issue discount amortized
from the date of issue to the date of declaration, which amortization shall be
calculated using the "interest method" (computed in accordance with generally
accepted accounting principles) in effect on the date of declaration or
redemption, as the case may be. An Original Issue Discount Note is a Note,
including any Zero-Coupon Note, which has a stated redemption price at maturity
that exceeds its Issue Price by at least 0.25% of its Principal Amount,
multiplied by the number of full years from the Original Issue Date to the
Maturity Date for such Note and any other Note designated by the Company as
issued with original issue discount for United States Federal income tax
purposes.
17
<PAGE> 18
9. 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 under the Indenture at
any time by the Company with the consent of the Holders of not less than 66-2/3%
in aggregate principal amount of the Securities at the time Outstanding of all
series to be affected thereby (voting as one class). The Indenture also contains
provisions permitting the Holders of a majority in aggregate principal amount of
the Securities of a 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 Note shall
be conclusive and binding upon such Holder and upon all future Holders of this
Note and of any Note issued upon the registration of transfer hereof or in
exchange hereof or in lieu hereof, whether or not notation of such consent or
waiver is made upon this Note.
10. No reference herein to the Indenture and no provision of this Note
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of, premium, if any, and
interest on this Note at the times, place and rate, and in the coin or currency,
herein and in the Indenture prescribed.
11. The authorized denominations of Registered Notes denominated in
U.S. Dollars will be U.S. $1,000 and any larger amount that is an integral
multiple of U.S. $1,000. The authorized denominations of Notes denominated in a
currency other than U.S. Dollars will be as set forth on the face hereof.
12. As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of a Registered Note is registerable in the
Security Register (as defined in the Indenture), upon surrender of such Note for
registration of transfer at the office of the Registrar for this series or at
the offices of any transfer agent designated by the Company for such purpose.
Every Note presented for registration of transfer shall (if so required by the
Company, the Trustee or the Registrar) be duly endorsed, or accompanied by a
written instrument of transfer in form satisfactory to the Company, the Trustee
and the Registrar duly executed by the Holder or its attorney duly authorized in
writing, and one or more new Notes of like tenor and terms in registered form,
of authorized denominations and for the same aggregate principal amount, will be
issued in the name or names of the designated transferee or transferees and
delivered at the office of the Registrar in The City of New York, or mailed, at
the request, risk and expense of the transferee or transferees, to the address
or addresses shown in the Security Register for such transferee or transferees.
Any transfers of Notes or interests in Notes in different denominations shall in
each case be for Notes or interests of like tenor and terms and equal aggregate
principal amount. Prior to due presentment of a Note for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the person in whose name a Note is registered as the owner hereof for
all purposes, whether or not such Note is overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary. The
initial transfer agent is set forth below. The Company reserves the right at any
time
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<PAGE> 19
to vary or terminate the appointment of the Registrar or of any transfer agent
and to appoint additional transfer agents and to approve any change in the
office through which the Registrar or a transfer agent acts, provided that, so
long as any Notes remain outstanding, the Company (i) will maintain in The City
of New York a Registrar and (ii) will maintain a transfer agent for the Notes in
New York. The Company shall not be required (i) to issue, register the transfer
of or exchange Notes to be redeemed for a period of 15 days preceding the first
publication of the relevant notice of redemption, or if any Notes are
outstanding and there is no publication, the mailing of the relevant notice of
redemption, or (ii) to register the transfer of any Note selected for
redemption, in whole or in part, except the unredeemed or unpaid portion of any
such Note being redeemed in part. No service charge shall be made for any such
registration of transfer, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
13. Except as set forth below, a holder of a Global Note or a holder of
an interest in a Global Note may not exchange the Global Note or interest in the
Global Note for a Certificated Note. A beneficial owner of notes represented by
a Global Note may exchange the securities for Certificated Notes only if:
(1) The Depository Trust Company ("DTC") notifies TRW that it (or
its nominee) is unwilling or unable to continue to act as a
depositary registered under the Securities Exchange Act of
1934, and a successor depositary registered as a clearing
agency under the Exchange Act is not appointed by TRW within
90 days; or
(2) TRW determines that the Global Notes for any series of notes
(in whole or in part) should be exchanged for Certificated
Notes.
In addition to the foregoing, during the continuance of an Event of Default,
holders of interests in a Global Note will be entitled to request and receive
Certificated Notes. Such Certificated Notes will be issued to and registered as
directed by that person only upon the request in writing made through a DTC
participant. If the events described above occur, the Company will execute, and
the Trustee or its agent, upon receipt of a Company Request for the
authentication and delivery of individual Notes of this series in exchange in
whole or in part for such Global Note, will authenticate and deliver individual
Notes of this series of like tenor and terms in definitive form in an aggregate
principal amount equal to the principal amount of such Global Note or in
exchange for such Global Note.
14. Unless otherwise defined herein, all terms used in this Note which
are defined in the Indenture shall have the meanings assigned to them in the
Indenture.
15. The Indenture and the Notes shall be construed in accordance with
and governed by the laws of the State of New York.
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<PAGE> 20
---------------------------
REGISTRAR, PAYING AGENTS AND TRANSFER AGENT
REGISTRAR AND PAYING AGENT
(subject to change)
The Chase Manhattan Bank
One New York Plaza, 14th Floor
New York, New York 10081
---------------------------
OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably requests and instructs the Company
to repay the within Note (or portion hereof specified below) pursuant to its
terms at a price equal to the applicable Repayment Price thereof together with
interest to the Repayment Date, to the undersigned
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Please print or typewrite name and address of the undersigned)
If less than the entire principal amount of the within Note is to be
repaid, specify the portion thereof which the Holder elects to have repaid:
_________________; and specify the denomination or denominations (which shall be
in authorized denominations) of the Notes to be issued to the Holder for the
portion of the within Note not being repaid (in the absence of any such
specification, one such Note will be issued for the portion not being repaid):
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Date Signature
------------------------------- ----------------------------
---------------------------
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM--as tenants in common
TEN ENT--as tenants by the entirety
JT TEN--as joint tenants with right of survivorship and not as tenants
in common
UNIF GIFT MIN ACT--......................Custodian for.................
(Cust) (Minor)
Under Uniform Gifts to Minors Act
.....................................................
(State)
Additional abbreviations may also be used though not in the above list.
20
<PAGE> 21
--------------------------------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto (PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF
ASSIGNEE):
- --------------------------------------------------------------------------------
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF
ASSIGNEE:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
the within Security and all rights thereunder, hereby irrevocably constituting
and appointing ______________________________________________________________
attorney to transfer said Security on the books of the Company, with full power
of substitution in the premises.
Date Signature
---------------------------- ----------------------------------
(Signature must correspond with the
name as written upon the face of the
within instrument in every
particular, without alteration or
enlargement or any change whatever.)
21
