<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 11, 1996
===============================================================================
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(MARK ONE)
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED APRIL 30, 1996
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER 1-3998
LITTON INDUSTRIES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
DELAWARE 95-1775499
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
21240 BURBANK BOULEVARD
WOODLAND HILLS, CALIFORNIA 91367-6675
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
</TABLE>
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (818) 598-5000
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No____
On May 31, 1996 there were 46,494,546 shares of Common Stock outstanding.
Page 1 of 12
Exhibit Index appears on Page 10.
===============================================================================
<PAGE> 2
LITTON INDUSTRIES, INC. AND SUBSIDIARY COMPANIES
INDEX
REPORT ON FORM 10-Q
FOR QUARTER ENDED APRIL 30, 1996
<TABLE>
<CAPTION>
PAGE
NUMBER
------
<S> <C> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Statements of Operations
Nine months ended April 30, 1996 and 1995....... 3
Consolidated Statements of Operations
Three months ended April 30, 1996 and 1995...... 4
Consolidated Balance Sheets
April 30, 1996 and July 31, 1995................ 5
Consolidated Statements of Cash Flows
Nine months ended April 30, 1996 and 1995....... 6
Notes to Consolidated Financial Statements........ 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations............. 9
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.................. 10
Signature....................................................... 12
</TABLE>
2
<PAGE> 3
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
LITTON INDUSTRIES, INC. AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(THOUSANDS OF DOLLARS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
APRIL 30,
-------------------------
1996 1995
---------- ----------
<S> <C> <C>
Sales and Service Revenues................. $2,580,069 $2,344,650
---------- ----------
Costs and Expenses
Cost of sales............................ 2,019,858 1,850,831
Selling, general and administrative...... 292,476 258,151
Depreciation and amortization............ 80,581 71,828
Interest -- net.......................... 5,235 1,967
---------- ----------
Total............................ 2,398,150 2,182,777
---------- ----------
Earnings before Taxes on Income............ 181,919 161,873
Taxes on Income............................ (73,677) (65,559)
---------- ----------
Net Earnings..................... $ 108,242 $ 96,314
========== ==========
Primary Earnings per Share................. $ 2.26 $ 2.03
========== ==========
</TABLE>
See accompanying notes to consolidated financial statements.
3
<PAGE> 4
LITTON INDUSTRIES, INC. AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(THOUSANDS OF DOLLARS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
APRIL 30,
-----------------------
1996 1995
---------- --------
<S> <C> <C>
Sales and Service Revenues.................. $1,004,430 $861,442
---------- --------
Costs and Expenses
Cost of sales............................. 789,238 682,077
Selling, general and administrative....... 113,768 94,171
Depreciation and amortization............. 30,961 24,839
Interest -- net........................... 5,196 458
---------- --------
Total............................. 939,163 801,545
---------- --------
Earnings before Taxes on Income............. 65,267 59,897
Taxes on Income............................. (26,433) (24,259)
---------- --------
Net Earnings...................... $ 38,834 $ 35,638
========== ========
Primary Earnings per Share.................. $ 0.81 $ 0.75
========== ========
</TABLE>
See accompanying notes to consolidated financial statements.
4
<PAGE> 5
LITTON INDUSTRIES, INC. AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS
(THOUSANDS OF DOLLARS)
<TABLE>
<CAPTION>
APRIL 30, JULY 31,
1996 1995
---------- ----------
<S> <C> <C>
ASSETS
Current Assets
Cash and marketable securities............................. $ 151,662 $ 110,696
Accounts receivable, net................................... 646,877 420,937
Inventories less progress billings......................... 605,721 552,195
Deferred tax assets........................................ 362,657 362,819
Prepaid expenses........................................... 25,698 18,609
---------- ----------
Total Current Assets............................... 1,792,615 1,465,256
---------- ----------
Property, Plant and Equipment -- at cost..................... 1,557,596 1,546,264
Less accumulated depreciation.............................. (920,653) (924,425)
---------- ----------
Property, Plant and Equipment, Net........................... 636,943 621,839
---------- ----------
Goodwill and Other Intangibles, Net.......................... 541,960 218,283
---------- ----------
Other Assets and Long-term Investments....................... 295,071 254,244
---------- ----------
Total Assets....................................... $3,266,589 $2,559,622
========== ==========
LIABILITIES AND SHAREHOLDERS' INVESTMENT
Current Liabilities
Accounts payable........................................... $ 780,211 $ 702,897
Payrolls and related expenses.............................. 290,493 238,999
Taxes on income............................................ 102,459 117,947
Notes payable and current portion of long-term obligations. 35,929 25,106
Other current liabilities.................................. 290,083 250,174
---------- ----------
Total Current Liabilities.......................... 1,499,175 1,335,123
---------- ----------
Long-term Obligations........................................ 511,744 103,631
---------- ----------
Postretirement Benefit Obligations Other than Pensions....... 206,478 204,883
---------- ----------
Deferred Tax Liabilities..................................... 58,458 51,836
---------- ----------
Other Long-term Liabilities.................................. 118,947 106,006
---------- ----------
Shareholders' Investment
Capital stock
Voting preferred stock -- Series B...................... 2,053 2,053
Common stock............................................ 46,417 46,182
Additional paid-in capital................................. 293,082 284,399
Retained earnings.......................................... 559,476 451,862
Cumulative currency translation adjustment................. (29,241) (26,353)
---------- ----------
Total Shareholders' Investment..................... 871,787 758,143
---------- ----------
Total Liabilities and Shareholders' Investment..... $3,266,589 $2,559,622
========== ==========
</TABLE>
See accompanying notes to consolidated financial statements.
5
<PAGE> 6
LITTON INDUSTRIES, INC. AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(THOUSANDS OF DOLLARS)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
APRIL 30,
----------------------
1996 1995
--------- --------
<S> <C> <C>
Cash and cash equivalents at beginning of period................ $ 60,229 $ 44,526
--------- --------
Cash Was Provided by (Used for) Operating Activities
Net earnings.................................................. 108,242 96,314
Adjustments to reconcile net earnings to net cash
provided by operating activities
Depreciation and amortization.............................. 80,581 71,828
Deferred income tax charge................................. 33,458 33,326
Decrease in accounts receivable............................ 36,540 34,705
Increase in inventory...................................... (42,004) (6,887)
Decrease (increase) in prepaid expenses.................... 410 (4,023)
Decrease in accounts payable............................... (106,850) (29,932)
Increase in payrolls and related expenses.................. 42,626 16,172
Decrease in taxes on income................................ (17,318) (17,551)
Increase in other current liabilities...................... 30,569 40,824
Other operating activities................................. (24,848) (14,308)
--------- --------
Cash provided by operating activities........................... 141,406 220,468
--------- --------
Investing Activities
Purchase of businesses, net of cash acquired.................. (487,781) (65,616)
Purchase of capital assets.................................... (53,747) (72,461)
Decrease in other current marketable securities............... 32,801 22,611
Proceeds from sale of business................................ 28,700 16,385
Other investing activities.................................... (761) 10,270
--------- --------
Cash used for investing activities.............................. (480,788) (88,811)
--------- --------
Financing Activities
Net proceeds from issuance of debentures due 2026 and 2036.... 395,273 --
Increase (decrease) in short-term obligations, net............ 10,579 (66,945)
Other financing activities.................................... 7,297 (7,698)
--------- --------
Cash provided by (used for) financing activities................ 413,149 (74,643)
--------- --------
Resulting in increase in cash and cash equivalents.............. 73,767 57,014
--------- --------
Cash and cash equivalents at end of period...................... $ 133,996 $101,540
========= ========
Supplemental disclosure of cash flow information
Interest paid................................................. $ 4,999 $ 4,301
Net income taxes paid......................................... $ 58,274 $ 41,846
Reconciliation to Consolidated Balance Sheet at April 30, 1996:
Cash and cash equivalents.................................. $ 133,996
Marketable securities...................................... 17,666
---------
Total cash and marketable securities..................... $ 151,662
=========
</TABLE>
See accompanying notes to consolidated financial statements.
6
<PAGE> 7
LITTON INDUSTRIES, INC. AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NINE MONTHS ENDED APRIL 30, 1996
1. The amounts included in this report are unaudited; however, in the opinion
of management, all adjustments necessary for a fair statement of results for
the stated periods have been included. These adjustments are of a normal
recurring nature. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted. Certain
reclassifications of prior period information were made for comparative
purposes. These interim consolidated financial statements should be read in
conjunction with the financial statements and notes thereto included in the
Company's Annual Report to Shareholders for the fiscal year ended July 31,
1995. The results of operations for the nine months ended April 30, 1996 are
not necessarily indicative of operating results for the entire year.
2. The components of inventory balances are summarized below:
<TABLE>
<CAPTION>
APRIL 30, JULY 31,
1996 1995
--------- ----------
(THOUSANDS OF DOLLARS)
<S> <C> <C>
Raw materials and work in process............... $ 936,761 $ 982,830
Finished goods.................................. 40,943 44,565
--------- ----------
977,704 1,027,395
Less progress billings.......................... (371,983) (475,200)
--------- ----------
Net inventories............................ $ 605,721 $ 552,195
========= ==========
</TABLE>
3. Interest (expense) income is shown below:
<TABLE>
<CAPTION>
NINE MONTHS ENDED THREE MONTHS ENDED
APRIL 30, APRIL 30,
-------------------- -------------------
1996 1995 1996 1995
-------- ------- ------- -------
(THOUSANDS OF DOLLARS)
<S> <C> <C> <C> <C>
Interest expense............ $(14,511) $(9,088) $(8,069) $(2,864)
Interest income............. 9,276 7,121 2,873 2,406
-------- ------- ------- -------
Net interest expense... $ (5,235) $(1,967) $(5,196) $ (458)
======== ======= ======= =======
</TABLE>
4. On February 16, 1996, the Company completed the acquisition of PRC, Inc.
("PRC"), a diversified information technology company, from The Black &
Decker Corporation for a preliminary purchase price of $425 million in cash.
This acquisition is being accounted for under the purchase method of
accounting.
On May 15, 1996, the Company acquired Steerage Corp. ("Steerage") from an
investment partnership for approximately $158 million in cash, inclusive of
$52.4 million for repayment of existing Steerage debt. Steerage, which
conducts operations through its wholly-owned subsidiary Sperry Marine, Inc.
("Sperry Marine"), is a provider of advanced electronic navigation and
guidance systems to military and commercial customers. This acquisition
will be accounted for under the purchase method of accounting.
7
<PAGE> 8
LITTON INDUSTRIES, INC. AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NINE MONTHS ENDED APRIL 30, 1996
The unaudited pro forma sales, net earnings, primary and fully diluted
earnings per share for the nine months ended April 30, 1996, as if the
combinations had occurred on August 1, 1995, were $3.1 billion, $110.3 million,
$2.31 and $2.31, respectively. These pro forma results are based on preliminary
allocations of the acquisition costs among net assets acquired and intangibles.
The excess purchase price over the estimated fair value of tangible net assets
acquired is being amortized over a period of 30 years for PRC and 25 years for
Sperry Marine. These pro forma amounts are not necessarily indicative of what
the results of operations would have been if the combinations had occurred on
August 1, 1995. Additionally, they may not be indicative of future results.
In connection with the PRC acquisition, the Company issued $300 million
principal amount of 7.75% debentures due March 15, 2026 and $100 million
principal amount of 6.98% debentures due March 15, 2036. The Company also
borrowed, on a short-term basis, approximately $110 million under an existing
revolving credit agreement in connection with the acquisition of Sperry Marine
on May 15, 1996.
8
<PAGE> 9
PART I. FINANCIAL INFORMATION (CONTINUED)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Sales were $1.0 billion and $2.58 billion for the third quarter and nine
months of fiscal year 1996, representing improvements of 17% and 10% over the
corresponding prior year's amounts of $861.4 million and $2.34 billion,
respectively. Segment operating profit for the third quarter and nine months of
the current fiscal year increased to $83.7 million and $225.8 million, compared
with $73.2 million and $202.0 million for the same periods a year ago. Those
increases resulted in improvements of 9% and 12% in net earnings, respectively.
Interest expense was higher in the current year's periods due to the debt
incurred to finance the acquisition of PRC in February of 1996.
Sales from the Advanced Electronics' businesses in the third quarter of
fiscal year 1996 were $582.3 million compared with $408.1 million in the third
quarter of fiscal year 1995. For the first nine months of fiscal year 1996,
sales were $1.37 billion compared with $1.15 billion for the nine months of last
fiscal year. Operating profit for this segment amounted to $42.2 million and
$105.6 million in the third quarter and nine months ended April 30, 1996
compared with $31.8 million and $89.5 million in the prior year's periods. These
increases reflect the impact of recent acquisitions, including PRC, and improved
operating efficiency. With reported revenues of $712 million in its fiscal year
ended December 31, 1995, PRC is a diversified information technology company
that designs, develops, integrates and supports computer-based information
systems and re-engineers business processes for the U.S. Government, commercial
customers and state and local governments. Although management expects PRC to
contribute significantly in sales, the profit margin for this type of business
is lower in comparison with that historically experienced by the other
businesses in the Advanced Electronics segment. Operating margin for the
Advanced Electronics segment for the third quarter of fiscal year 1996 was 7.3%,
compared with 7.8% for the third quarter of fiscal year 1995. Backlog for this
segment at April 30, 1996 was $3.55 billion, significantly higher than the $1.75
billion at July 31, 1995 primarily due to the PRC acquisition. The Marine
Engineering and Production segment achieved improved operating margins on lower
sales. Sales for the third quarter and nine months of fiscal year 1996 were
$352.8 million and $1.01 billion, compared with $397.3 million and $1.03 billion
for the prior year's periods. The decrease in sales was attributable to lower
construction activity on long-term contracts nearing completion, partially
offset by activity on new contracts and others moving into more advanced stages
of production. Operating margins improved as a result of cost reduction efforts
and increased earnings rates on long-term contracts. The estimated earnings at
completion are adjusted as long-term contracts progress in the production
process and as uncertainties are resolved or, conversely, identified. Backlog
for the Marine Engineering and Production segment at April 30, 1996 was $3.36
billion, comparable to that at July 31, 1995 of $3.31 billion. The Interconnect
Products segment continued to benefit from strong demand for its
electronics-related products during the first nine months of the current fiscal
year. Management believes that its on-going cost reduction efforts and focus on
opportunities for new products will contribute to the solid performances by this
segment.
Management's continued focus on strategic acquisitions has resulted in the
May 15, 1996 acquisition of Sperry Marine for cash of approximately $158
million, which included repayment of $52.4 million in outstanding debt. With
reported revenues of $145 million for its fiscal year ended December 31, 1995,
Sperry Marine is a worldwide leader in the design, development, manufacture,
service and supply of advanced electronic navigation and guidance systems for
marine and aircraft uses.
Interest expense increased to $8.1 million and $14.5 million for the third
quarter and nine months of the current fiscal year compared with $2.9 million
and $9.1 million for the same periods of the prior fiscal year. In connection
with the acquisition of PRC, the Company borrowed $400 million under an existing
revolving credit agreement with various banks at an interest rate of 5.5125%.
This indebtedness was replaced by the subsequent issuance, on March 19, 1996, of
7.75% and 6.98% debentures due 2026 and 2036, respectively. The Company also
borrowed, on a short-term basis, approximately $110 million under the
aforementioned revolving credit agreement in connection with the Sperry Marine
acquisition on May 15, 1996. The Company expects to repay this indebtedness with
existing funds and cash flow from operations.
The Company completed the first nine months of fiscal year 1996 with $151.7
million in cash and marketable securities, compared with $110.7 million at July
31, 1995. Management believes that existing funds, along with cash flow from
operations, are sufficient to meet anticipated cash requirements.
9
<PAGE> 10
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit 4.1: Indenture dated as of December 15, 1991 between the Company
and The Bank of New York, Trustee, under which the 7.75%
and 6.98% debentures due 2026 and 2036 were issued and
specimens of such debentures.
Exhibit 4.2: Amendment No. 3 to the Amended and Restated Credit
Agreement dated December 22, 1994 among Litton Industries,
Inc., a group of banks and Morgan Guaranty Trust Company of
New York, as Agent, and Wells Fargo Bank, N.A., as
Co-Agent.
Exhibit 10: Board of Directors Resolutions, adopted December 7, 1995,
with respect to nonemployee directors' annual retainer and
attendance fees.
Exhibit 11: Statement of Computation of Earnings per Share included
herein on page 11.
Exhibit 27: Financial Data Schedule.
(b) Reports on Form 8-K
In a report filed on Form 8-K dated February 16, 1996 and as amended on
Form 8-K/A dated March 4, 1996, the Company reported the acquisition of PRC
Inc. pursuant to a Stock Purchase Agreement dated December 13, 1995.
In a report filed on Form 8-K dated March 19, 1996, the Company submitted
an underwriting agreement in connection with the public offering on March
19, 1996 of $300 million principal amount of 7.75% debentures due March 15,
2026 and $100 million principal amount of 6.98% debentures due March 15,
2036.
10
<PAGE> 11
EXHIBIT 11
LITTON INDUSTRIES, INC. AND SUBSIDIARY COMPANIES
PRIMARY EARNINGS PER SHARE AND FULLY DILUTED EARNINGS PER SHARE
(THOUSANDS OF DOLLARS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
NINE MONTHS ENDED THREE MONTHS ENDED
APRIL 30, APRIL 30,
------------------------- -------------------------
1996 1995 1996 1995
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
PRIMARY EARNINGS PER SHARE
Earnings available for common shares and
common stock equivalent shares deemed to
have a dilutive effect:
Earnings................................ $ 108,242 $ 96,314 $ 38,834 $ 35,638
Provision for cash dividends on
preferred stock (Series B)............. (616) (616) (206) (206)
----------- ----------- ----------- -----------
Net earnings available for common shares
and common stock equivalent shares deemed
to have a dilutive effect................ $ 107,626 $ 95,698 $ 38,628 $ 35,432
=========== =========== =========== ===========
Primary earnings per share................ $ 2.26 $ 2.03 $ 0.81 $ 0.75
=========== =========== =========== ===========
FULLY DILUTED EARNINGS PER SHARE
Net earnings available for common shares
and common stock equivalent shares deemed
to have a dilutive effect................ $ 107,626 $ 95,698 $ 38,628 $ 35,432
=========== =========== =========== ===========
Fully diluted earnings per share.......... $ 2.26 $ 2.03 $ 0.81 $ 0.75
=========== =========== =========== ===========
Shares used in primary earnings per share
computation
Weighted average common shares
outstanding (net of treasury shares)... 46,283,308 45,987,894 46,368,673 46,035,736
Common stock equivalents................ 1,263,737 1,160,096 1,290,057 1,153,312
----------- ----------- ----------- -----------
Total common shares and common stock
equivalent shares deemed to have a
dilutive effect........................ 47,547,045 47,147,990 47,658,730 47,189,048
=========== =========== =========== ===========
Shares used in fully diluted earnings per
share computation
Total common shares and common stock
equivalent shares deemed to have a
dilutive effect........................ 47,547,045 47,147,990 47,658,730 47,189,048
Additional potentially dilutive
securities (equivalent in common
stock):
Stock options........................ 37,641 -- -- --
----------- ----------- ----------- -----------
Total.............................. 47,584,686 47,147,990 47,658,730 47,189,048
=========== =========== =========== ===========
</TABLE>
11
<PAGE> 12
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
LITTON INDUSTRIES, INC.
(Registrant)
By /s/ CAROL A. WIESNER
----------------------------------
Carol A. Wiesner
Vice President and Controller
(Chief Accounting Officer)
June 11, 1996
12
<PAGE> 1
EXHIBIT 4.1
[CONFORMED COPY]
================================================================================
Litton Industries, Inc.
and
The Bank of New York
Trustee
-------------
SENIOR INDENTURE
Dated as of December 15, 1991
--------------
Providing for issuance of Securities in Series
================================================================================
<PAGE> 2
i
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Recitals of the Company ................................................................. 1
Agreements of the Parties ................................................................. 1
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 101. Definitions.......................................................... 1
Act.................................................................. 2
Affiliate............................................................ 2
Authenticating Agent................................................. 2
Board of Directors................................................... 2
Board Resolution..................................................... 2
Business Day......................................................... 2
Capital Stock........................................................ 3
Commission........................................................... 3
Company.............................................................. 3
Company Request, Company Order and Company Consent................... 3
Consolidated Net Tangible Assets..................................... 3
Corporate Trust Office............................................... 3
Defaulted Interest................................................... 3
Depositary........................................................... 4
Event of Default..................................................... 4
Funded Debt.......................................................... 4
Global Security...................................................... 4
Holder............................................................... 4
Indenture, this Indenture............................................ 4
Independent.......................................................... 4
Interest............................................................. 5
Interest Payment Date................................................ 5
Lien................................................................. 5
Maturity............................................................. 5
Officers' Certificate................................................ 5
</TABLE>
<PAGE> 3
ii
<TABLE>
<CAPTION>
Page
----
<S> <C>
Opinion of Counsel................................................... 5
Original Issue Discount Security..................................... 6
Outstanding.......................................................... 6
Paying Agent......................................................... 7
Person............................................................... 7
Place of Payment..................................................... 7
Predecessor Securities............................................... 7
Preferred Stock...................................................... 7
Redemption Date...................................................... 7
Redemption Price..................................................... 7
Regular Record date.................................................. 8
Repayment Date....................................................... 8
Repayment Price...................................................... 8
Responsible Officer.................................................. 8
Restricted Property.................................................. 8
Sale and Leaseback Transaction....................................... 8
Security or Securities............................................... 9
Security Register.................................................... 9
Security Registrar................................................... 9
Securityholder....................................................... 9
Special Record Date.................................................. 9
Stated Maturity...................................................... 9
Subsidiary........................................................... 9
Trust Indenture Act or TIA........................................... 10
Trustee.............................................................. 10
Value................................................................ 10
Vice President....................................................... 10
SECTION 102. Compliance Certificates and Opinions................................. 10
SECTION 103. Form of Documents Delivered to Trustee............................... 11
SECTION 104. Acts of Securityholders.............................................. 12
SECTION 105. Notices, etc., to Trustee and Company................................ 13
SECTION 106. Notices to Securityholders; Waiver................................... 14
SECTION 107. Conflict with Trust Indenture Act.................................... 14
</TABLE>
<PAGE> 4
iii
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
SECTION 108. Effect of Headings and Table of Contents............................. 14
SECTION 109. Successors and Assigns............................................... 15
SECTION 110. Separability Clause.................................................. 15
SECTION 111. Benefits of Indenture................................................ 15
SECTION 112. Governing Law........................................................ 15
SECTION 113. Counterparts......................................................... 15
ARTICLE TWO
SECURITY FORMS
SECTION 201. Forms Generally...................................................... 15
SECTION 202. Forms of Securities.................................................. 16
SECTION 203. Forms of Trustee's Certificate of Authentication..................... 16
SECTION 204. Securities Issuable in the Form of a Global Security................. 16
ARTICLE THREE
THE SECURITIES
SECTION 301. General Title; General Limitations; Issuable in Series; Terms of
Particular Series................................................. 19
SECTION 302. Denominations........................................................ 21
SECTION 303. Execution, Authentication and Delivery and Dating.................... 21
SECTION 304. Temporary Securities................................................. 24
SECTION 305. Registration, Transfer and Exchange.................................. 24
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities..................... 26
SECTION 307. Payment of Interest; Interest Rights Preserved....................... 26
SECTION 308. Persons Deemed Owners................................................ 28
SECTION 309. Cancellation......................................................... 28
SECTION 310. Computation of Interest.............................................. 28
SECTION 311. Medium-Term Securities............................................... 29
SECTION 312. CUSIP Numbers........................................................ 29
</TABLE>
<PAGE> 5
iv
ARTICLE FOUR
SATISFACTION AND DISCHARGE
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
SECTION 401. Satisfaction and Discharge of Indenture.............................. 30
SECTION 402. Application of Trust Money........................................... 31
SECTION 403. Defeasance Upon Deposit of Funds or Government
Obligations...................................................... 31
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default.................................................... 33
SECTION 502. Acceleration of Maturity; Rescission and Annulment................... 34
SECTION 503. Collection of Indebtedness and Suits for Enforcement by
Trustee.......................................................... 36
SECTION 504. Trustee May File Proofs of Claim..................................... 37
SECTION 505. Trustee May Enforce Claims Without Possession
of Securities.................................................... 38
SECTION 506. Application of Money Collected....................................... 38
SECTION 507. Limitation on Suits.................................................. 38
SECTION 508. Unconditional Right of Securityholders to Receive Principal,
Premium and Interest............................................. 39
SECTION 509. Restoration of Rights and Remedies................................... 39
SECTION 510. Rights and Remedies Cumulative....................................... 39
SECTION 511. Delay or Omission Not Waiver......................................... 40
SECTION 512. Control by Securityholders........................................... 40
SECTION 513. Waiver of Past Defaults.............................................. 40
SECTION 514. Undertaking for Costs................................................ 41
SECTION 515. Waiver of Stay or Extension Laws..................................... 41
ARTICLE SIX
THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities.................................. 42
SECTION 602. Notice of Defaults................................................... 43
</TABLE>
<PAGE> 6
v
<TABLE>
<CAPTION>
Page
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<S> <C> <C>
SECTION 603. Certain Rights of Trustee............................................ 43
SECTION 604. Not Responsible for Recitals or Issuance of Securities............... 44
SECTION 605. May Hold Securities.................................................. 45
SECTION 606. Money Held in Trust.................................................. 45
SECTION 607. Compensation and Reimbursement....................................... 45
SECTION 608. Disqualification; Conflicting Interests.............................. 46
SECTION 609. Corporate Trustee Required; Eligibility.............................. 46
SECTION 610. Resignation and Removal; Appointment of Successor.................... 47
SECTION 611. Acceptance of Appointment by Successor............................... 49
SECTION 612. Merger, Conversion, Consolidation or Succession to Business.......... 50
SECTION 613. Preferential Collection of Claims Against Company.................... 50
SECTION 614. Appointment of Authenticating Agent.................................. 54
ARTICLE SEVEN
SECURITYHOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Company to Furnish Trustee Names and Addresses of
Securityholders.................................................. 56
SECTION 702. Preservation of Information; Communications to
Securityholders.................................................. 57
SECTION 703. Reports by Trustee................................................... 58
SECTION 704. Reports by Company................................................... 60
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE OR TRANSFER
SECTION 801. When Company May Merge or Transfer Assets............................ 61
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without Consent of
Securityholders.................................................. 62
SECTION 902. Supplemental Indentures with Consent of Securityholders.............. 63
SECTION 903. Execution of Supplemental Indentures................................. 64
</TABLE>
<PAGE> 7
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<TABLE>
<CAPTION>
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<S> <C> <C>
SECTION 904. Effect of Supplemental Indentures.................................... 65
SECTION 905. Conformity with Trust Indenture Act.................................. 65
SECTION 906. Reference in Securities to Supplemental Indentures................... 65
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal, Premium and Interest........................... 65
SECTION 1002. Maintenance of Office or Agency...................................... 65
SECTION 1003. Money for Security Payments to Be Held in Trust...................... 66
SECTION 1004. Statement as to Compliance........................................... 67
SECTION 1005. Legal Existence...................................................... 68
SECTION 1006. Limitation on Liens.................................................. 68
SECTION 1007. Limitation on Sale and Leasebacks.................................... 69
SECTION 1008. Waiver of Certain Covenants.......................................... 70
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 1101. Applicability of Article............................................. 70
SECTION 1102. Election to Redeem; Notice to Trustee................................ 70
SECTION 1103. Selection by Trustee of Securities to Be Redeemed.................... 71
SECTION 1104. Notice of Redemption................................................. 71
SECTION 1105. Deposit of Redemption Price.......................................... 72
SECTION 1106. Securities Payable on Redemption Date................................ 72
SECTION 1107. Securities Redeemed in Part.......................................... 73
SECTION 1108. Provisions with Respect to any Sinking Funds......................... 73
</TABLE>
<PAGE> 8
vii
Table Showing Reflection in Indenture of Certain Provisions
of Trust Indenture Act of 1939,
as amended by the Trust Indenture Reform Act of 1990
---------------
<TABLE>
<CAPTION>
Reflected in Indenture
TIA Section
- --- ----------------------
<S> <C>
Section 310(a)(1).......................................................... 609
(a)(2).......................................................... 609
(a)(3).......................................................... Not Applicable
(a)(4).......................................................... Not Applicable
(a)(5).......................................................... 609
(b) .......................................................... 608
Section 311(a) .......................................................... 613(a)
(b) .......................................................... 613(b)
(b)(2).......................................................... 703(a)(2)
.......................................................... 703(b)
Section 312(a) .......................................................... 701
.......................................................... 702(a)
(b) .......................................................... 702(b)
(c) .......................................................... 702(c)
Section 313(a) .......................................................... 703(a)
(b) .......................................................... 703(b)
(c) .......................................................... 703(a)
.......................................................... 703(b)
(d) .......................................................... 703(c)
Section 314(a)(1).......................................................... 704
(a)(2).......................................................... 704
(a)(3).......................................................... 704
(a)(4) ......................................................... 1004
(b) .......................................................... Not Applicable
(c)(1).......................................................... 102
(c)(2).......................................................... 102
(c)(3).......................................................... Not Applicable
(d) .......................................................... Not Applicable
(e) .......................................................... 102
Section 315(a) .......................................................... 601(a)
.......................................................... 601(c)
(b) .......................................................... 602
.......................................................... 703(a)(6)
(c) .......................................................... 601(b)
</TABLE>
<PAGE> 9
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<TABLE>
<CAPTION>
Reflected in Indenture
TIA Section
- --- ----------------------
<S> <C>
(d) ......................................................... 601
(d)(1) ......................................................... 601(a)
(d)(2) ......................................................... 601(c)(2)
(d)(3) ......................................................... 601(c)(3)
(e) ......................................................... 514
Section 316(a) ......................................................... 101
(a)(1)(A)......................................................... 502
......................................................... 512
(a)(1)(B)......................................................... 513
(a)(2) ......................................................... Not Applicable
(b) ......................................................... 508
(c) ......................................................... 104(d)
Section 317(a)(1) ......................................................... 503
(a)(2) ......................................................... 504
(b) ......................................................... 1003
Section 318(a) ......................................................... 107
</TABLE>
<PAGE> 10
THIS INDENTURE between LITTON INDUSTRIES, INC., a Delaware corporation
(hereinafter called the "Company") having its principal office at 360 North
Crescent Drive, Beverly Hills, California 90210, and THE BANK OF NEW YORK, a New
York banking corporation, as trustee (hereinafter called the "Trustee"), is made
and entered into as of the 15th day of December, 1991.
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance of its unsecured and unsubordinated
debentures, notes, bonds or other evidences of indebtedness, to be issued in one
or more fully registered series.
All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.
AGREEMENTS OF THE PARTIES
To set forth or to provide for the establishment of the terms and
conditions upon which the Securities are and are to be authenticated, issued and
delivered, and in consideration of the premises and the purchase of Securities
by the Holders thereof, it is mutually covenanted and agreed as follows, for the
equal and proportionate benefit of all Holders of the Securities or of a series
thereof, as the case may be:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 101. Definitions. For all purposes of this Indenture and of
any indenture supplemental hereto, except as otherwise expressly provided or
unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned
to them in this Article, and include the plural as well as the singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act or by Commission rule under the Trust Indenture Act,
either directly or by reference therein, have the meanings assigned to
them therein;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted
accounting
<PAGE> 11
2
principles and, except as otherwise herein expressly provided, the term
"generally accepted accounting principles" with respect to any
computation required or permitted hereunder shall mean such accounting
principles as are generally accepted in the United States of America at
the date of such computation; and
(4) all references in this instrument to designated "Articles",
"Sections" and other subdivisions are to the designated Articles,
Sections and other subdivisions of this instrument as originally
executed. The words "herein", "hereof" and "hereunder" and other words
of similar import refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision.
Certain terms, used principally in Article Six, are defined in that
Article.
"Act", when used with respect to any Securityholder, has the meaning
specified in Section 104.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise,
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Authenticating Agent" means any Person authorized by the Trustee to
authenticate Securities under Section 614.
"Board of Directors" means either the board of directors of the Company
or any duly authorized committee of that board or any committee of officers of
the Company acting pursuant to authority granted by the board of directors of
the Company or any committee of such board.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day" means, with respect to any series of Securities, each day
which is neither a Saturday, Sunday or other day on which banking institu-
<PAGE> 12
3
tions in the pertinent Place or Places of Payment are authorized or required by
law or executive order to be closed.
"Capital Stock" means, with respect to any corporation, any and all
shares, interests, rights to purchase, warrants, options, participations or
other equivalents of or interests (however designated) in stock issued by that
corporation.
"Commission" means the Securities and Exchange Commission, as from time
to time constituted, created under the Securities Exchange Act of 1934, or, if
at any time after the execution of this instrument such Commission is not
existing and performing the duties now assigned to it under the Trust Indenture
Act, then the body performing such duties at such time.
"Company" means the Person named as the "Company" in the first paragraph
of this instrument until a successor shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Company" shall mean
such successor.
"Company Request", "Company Order" and "Company Consent" mean a written
request, order or consent, respectively, signed in the name of the Company by
its Chairman of the Board, a Vice Chairman, its President or a Vice President,
and by its Treasurer, an Assistant Treasurer, its Secretary or an Assistant
Secretary, and delivered to the Trustee.
"Consolidated Net Tangible Assets" means the total amount of assets
(less applicable reserves and other properly deductible items) after deducting
(1) all current liabilities (excluding the amount of those which are by their
terms extendable or renewable at the option of the obligor to a date more than
12 months after the date as of which the amount is being determined) and (2) all
goodwill, tradenames, trademarks, patents, unamortized debt discount and expense
and other like intangible assets, all as set forth on the most recent balance
sheet of the Company and its consolidated subsidiaries and determined in
accordance with generally accepted accounting principles.
"Corporate Trust Office" means the office of the Trustee in New York,
New York at which at any particular time its corporate trust business shall be
principally administered, which office at the date hereof is located at 101
Barclay Street-21W, New York, New York 10286.
"Defaulted Interest" has the meaning specified in Section 307.
<PAGE> 13
4
"Depositary" means, unless otherwise specified by the Company pursuant
to either Section 204 or 301, with respect to Securities of any series issuable
or issued as a Global Security, The Depository Trust Company, New York, New
York, or any successor thereto registered as a clearing agency under the
Securities Exchange Act of 1934, as amended, or other applicable statute or
regulation.
"Event of Default" has the meaning specified in Article Five.
"Funded Debt" means indebtedness of the Company or a Subsidiary owning
Restricted Property maturing by its terms more than one year after its creation
and indebtedness classified as long-term debt under generally accepted
accounting principles and in each case ranking at least pari passu with the
Securities.
"Global Security", when used with respect to any series of Securities
issued hereunder, means a Security which is executed by the Company and
authenticated and delivered by the Trustee to the Depositary or pursuant to the
Depositary's instruction, all in accordance with this Indenture and an indenture
supplemental hereto, if any, or Board Resolution and pursuant to a Company
Request, which shall be registered in the name of the Depositary or its nominee
and which shall represent, and shall be denominated in an amount equal to the
aggregate principal amount of, all of the Outstanding Securities of such series
or any portion thereof, in either case having the same terms, including, without
]imitation, the same original issue date, date or dates on which principal is
due, and interest rate or method of determining interest.
"Holder", when used with respect to any Security, means a
Securityholder.
"Indenture" or "this Indenture" means this instrument as originally
executed or as it may from time to time be supplemented or amended by one or
more indentures supplemental hereto entered into pursuant to the applicable
provisions hereof and shall include the terms of particular series of Securities
established as contemplated by Section 301.
"Independent", when used with respect to any specified Person, means
such a Person who (1) is in fact independent, (2) does not have any direct
financial interest or any material indirect financial interest in the Company or
in any other obligor upon the Securities or in any Affiliate of the Company or
<PAGE> 14
5
of such other obligor, and (3) is not connected with the Company or such other
obligor or any Affiliate of the Company or of such other obligor, as an officer,
employee, promoter, underwriter, trustee, partner, director or person performing
similar functions. Whenever it is herein provided that any Independent Person's
opinion or certificate shall be furnished to the Trustee, such Person shall be
appointed by a Company Order and approved by the Trustee in the exercise of
reasonable care, and such opinion or certificate shall state that the signer has
read this definition and that the signer is independent within the meaning
hereof.
"Interest", when used with respect to an Original Issue Discount
Security which by its terms bears interest only after Maturity, means interest
payable after Maturity.
"Interest Payment Date", when used with respect to any series of
Securities, means the Stated Maturity of any installment of interest on those
Securities.
"Lien" means any mortgage, pledge, lien, encumbrance, charge or
security interest.
"Maturity", when used with respect to any Securities, means the date on
which the principal of any such Security becomes due and payable as therein or
herein provided, whether on a Repayment Date, at the Stated Maturity or by
declaration of acceleration, call for redemption or otherwise.
"Officers' Certificate" means a certificate signed by the Chairman of
the Board, a Vice Chairman, the President or a Vice President, and by the
Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary of
the Company, and delivered to the Trustee. Wherever this Indenture requires that
an Officers' Certificate be signed also by an engineer or an accountant or other
expert, such engineer, accountant or other expert (except as otherwise expressly
provided in this Indenture) may be in the employ of the Company, and shall be
acceptable to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may (except
as otherwise expressly provided in this Indenture) be an employee of or of
counsel to the Company. Such counsel shall be acceptable to the Trustee, whose
acceptance shall not be unreasonably withheld.
<PAGE> 15
6
"Original Issue Discount Security" means (i) any Security which provides
for an amount less than the principal amount thereof to be due and payable upon
a declaration of acceleration of the Maturity thereof, and (ii) any other
Security deemed an Original Issue Discount Security for United States Federal
income tax purposes.
"Outstanding", when used with respect to Securities or Securities of any
series, means, as of the date of determination, all such Securities theretofore
authenticated and delivered under this Indenture, except:
(i) such Securities theretofore canceled by the Trustee or
delivered to the Trustee for cancellation;
(ii) such Securities for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Trustee or any
Paying Agent in trust for the Holders of such Securities; provided that,
if such Securities are to be redeemed, notice of such redemption has
been duly given pursuant to this Indenture or provision therefor
satisfactory to the Trustee has been made; and
(iii) such Securities in exchange for or in lieu of which other
Securities have been authenticated and delivered pursuant to this
Indenture, or which shall have been paid pursuant to the terms of
Section 306 (except with respect to any such Security as to which proof
satisfactory to the Trustee is presented that such Security is held by a
person in whose hands such Security is a legal, valid and binding
obligation of the Company).
In determining whether the Holders of the requisite principal amount of such
Securities Outstanding have given any request, demand, authorization, direction,
notice, consent or waiver hereunder, (i) the principal amount of any Original
Issue Discount Security that shall be deemed to be Outstanding shall be the
amount of the principal thereof that would be due and payable as of the date of
the taking of such action upon a declaration of acceleration of the Maturity
thereof and (ii) Securities owned by the Company or any other obligor upon the
Securities or any Affiliate of the Company or of such other obligor shall be
disregarded and deemed not to be Outstanding. In determining whether the Trustee
shall be protected in relying upon any such request, demand, authorization,
direction, notice, consent or waiver, only Securities which a Responsible
Officer assigned to the corporate trust department of the Trustee knows to be
owned by the Company or any other obligor upon the Securities or any Affiliate
of the Company or such other obligor shall be so disregarded. Securities so
owned which have been pledged in good faith may be regarded as Outstanding if
the pledgee establishes to the satisfaction of the
<PAGE> 16
7
Trustee the pledgee's right to act as owner with respect to such Securities and
that the pledgee is not the Company or any other obligor upon the Securities or
any Affiliate of the Company or such other obligor.
"Paying Agent" means any Person authorized by the Company to pay the
principal of (and premium, if any) or interest on any Securities on behalf of
the Company. The Company initially authorizes the Trustee to act as Paying Agent
for the Securities on its behalf. The Company may at any time and from time to
time authorize one or more Persons, including the Company, to act as Paying
Agent in addition to or in place of the Trustee with respect to any series of
Securities issued under this Indenture.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Place of Payment" means with respect to any series of Securities issued
hereunder the city or political subdivision so designated with respect to the
series of Securities in question in accordance with the provisions of Section
301.
"Predecessor Securities" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 306 in lieu of a lost, destroyed or
stolen Security shall be deemed to evidence the same debt as the lost, destroyed
or stolen Security.
"Preferred Stock" means, as to any Person, capital stock of such Person
that has a preference as to dividends or upon liquidation over the common stock
of such Person.
"Redemption Date", when used with respect to any Security to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"Redemption Price", when used with respect to any Security to be
redeemed, means the price specified in the Security at which it is to be
redeemed pursuant to this Indenture.
<PAGE> 17
8
"Regular Record Date" for the interest payable on any Security on any
Interest Payment Date means the date specified in such Security as the Regular
Record Date.
"Repayment Date", when used with respect to any Security to be repaid,
means the date fixed for such repayment pursuant to such Security.
"Repayment Price", when used with respect to any Security to be repaid,
means the price at which it is to be repaid pursuant to such Security.
"Responsible Officer", when used with respect to the Trustee, means the
chairman or vice-chairman of the board of directors, the chairman or
vice-chairman of the executive committee of the board of directors, the
president, any vice president, the secretary, any assistant secretary, the
treasurer, any assistant treasurer, the cashier, any assistant cashier, any
senior trust officer or trust officer, the controller and any assistant
controller or any other officer of the Trustee customarily performing functions
similar to those performed by any of the above designated officers and also
means, with respect to a particular corporate trust matter, any other officer to
whom such matter is referred because of his knowledge of and familiarity with
the particular subject.
"Restricted Property" means (1) any manufacturing facility, or portion
thereof, owned or ]eased by the Company or any Subsidiary and located within the
continental United States of America, which, in the opinion of the Board of
Directors, is of material importance to the business of the Company and its
Subsidiaries taken as a whole, but no such manufacturing facility, or portion
thereof, shall be deemed of material importance if its gross book value (before
deducting accumulated depreciation) is less than 2% of Consolidated Net Tangible
Assets, or (2) any shares of capital stock or indebtedness of any Subsidiary
owning any such manufacturing facility. As used in this definition,
"manufacturing facility" means property, plant and equipment used for actual
manufacturing such as quality assurance, engineering, maintenance, staging areas
for work in process materials, employees' eating and comfort facilities and
manufacturing administration, and it excludes sales offices, research facilities
and facilities used only for warehousing or general administration.
"Sale and Leaseback Transaction" means any arrangement with any Person
pursuant to which the Company or any Subsidiary leases any Restricted Property
that has been or is to be sold or transferred by the Company or the Subsidiary
to such Person, other than (1) temporary leases for a term, includ-
<PAGE> 18
9
ing renewals at the option of the lessee, of not more than three years, (2)
leases between the Company and a Subsidiary or between Subsidiaries, (3) leases
of a Restricted Property executed by the time of, or within 12 months after the
latest of, the acquisition, the completion of construction or improvement, or
the commencement of commercial operation of the Restricted Property, and (4)
arrangements pursuant to any provision of law with an effect similar to the
former Section 168(f)(8) of the Internal Revenue Code of 1954.
"Security" or "Securities" means any note or notes, bond or bonds,
debenture or debentures, or any other evidences of indebtedness, as the case may
be, of any series authenticated and delivered from time to time under this
Indenture.
"Security Register" shall have the meaning specified in Section 305.
"Security Registrar" means the Person who keeps the Security Register
specified in Section 305. The Company initially appoints the Trustee to act as
Security Registrar for the Securities on its behalf. The Company may at any time
and from time to time authorize any Person, including the Company, to act as
Security Registrar in place of the Trustee with respect to any series of
Securities issued under this Indenture.
"Securityholder" means a Person in whose name a Security is registered
in the Security Register.
"Special Record Date" for the payment of any Defaulted Interest (as
defined in Section 307) means a date fixed by the Trustee pursuant to Section
307.
"Stated Maturity" when used with respect to any Security or any
installment of principal thereof or interest thereon means the date specified in
such Security as the fixed date on which the principal of such Security or such
installment of principal or interest is due and payable.
"Subsidiary" of any specified corporation means (i) a corporation, a
majority of whose Capital Stock with voting power, under ordinary circumstances,
to elect directors is, at the date of determination, directly or indirectly
owned by the Company, by one or more Subsidiaries of the Company or by the
Company and one or more Subsidiaries of the Company or (ii) a partnership in
which the Company or a Subsidiary of the Company is at the date of
determination, a general partner of such partnership, or (iii) any other Person
<PAGE> 19
10
(other than a corporation or a partnership) in which the Company, a Subsidiary
of the Company or the Company and one or more Subsidiaries of the Company,
directly or indirectly, at the date of determination, has (x) at least a
majority ownership interest or (y) the power to elect or direct the election of
a majority of the directors or other governing body of such Person.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939, as
amended by the Trust Indenture Reform Act of 1990, and as in force at the date
as of which this instrument was executed except as provided in Section 905.
"Trustee" means the Person named as the Trustee in the first paragraph
of this instrument until a successor Trustee shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Trustee" shall mean
and include each Person who is then a Trustee hereunder. If at any time there is
more than one such Person, "Trustee" as used with respect to the Securities of
any series shall mean the Trustee with respect to Securities of that series.
"Value" means, with respect to a Sale and Leaseback Transaction, an
amount equal to the present value of the lease payments with respect to the term
of the lease remaining on the date as of which the amount is being determined,
without regard to any renewal or extension options contained in the lease,
discounted at the weighted average interest rate on the Securities of all series
(including the effective interest rate on any original issue discount
Securities) which are outstanding on the effective date of such Sale and
Leaseback Transaction and which have the benefit of Section 1007.
"Vice President" when used with respect to the Company or the Trustee
means any vice president, whether or not designated by a number or a word or
words added before or after the title "vice president", including, without
limitation, an assistant vice president.
SECTION 102. Compliance Certificates and Opinions. Upon any application
or request by the Company to the Trustee to take any action under any provision
of this Indenture, the Company shall furnish to the Trustee an Officers'
Certificate stating that all conditions precedent, if any (including any,
covenants compliance with which constitutes a condition precedent), provided for
in this Indenture relating to the proposed action have been complied with and an
Opinion of Counsel stating that in the opinion of such Counsel all such
<PAGE> 20
11
conditions precedent, if any (including any covenants compliance with which
constitutes a condition precedent), have been complied with, except that in the
case of any such application or request as to which the furnishing of such
documents is specifically required by any provision of this Indenture relating
to such particular application or request, no additional certificate or opinion
need be furnished.
Every certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture (other than annual statements of
compliance provided pursuant to Section 1004) shall include
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he
has made such examination or investigation as is necessary to enable him
to express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 103. Form of Documents Delivered to Trustee. In any case where
several matters are required to be certified by, or covered by an opinion of,
any specified Person, it is not necessary that all such matters be certified by,
or covered by the opinion of, only one such Person, or that they be so certified
or covered by only one document, but one such Person may certify or give an
opinion with respect to some matters and one or more other such Persons may
certify or give an opinion as to the other matters, and any such Person may
certify or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or Opinion of Counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with
<PAGE> 21
12
respect to such factual matters is in the possession of the Company, unless such
counsel knows, or in the exercise of reasonable care should know, that the
certificate or opinion or representations with respect to such matters are
erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 104. Acts of Securityholders. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be given or taken by Securityholders or Securityholders of any
series may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Securityholders in person or by an
agent duly appointed in writing; and, except as herein otherwise expressly
provided, such action shall become effective when such instrument or instruments
are delivered to the Trustee, and, where it is hereby expressly required, to the
Company. Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the "Act" of the
Securityholders signing such instrument or instruments. Proof of execution of
any such instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Indenture and (subject to Section 601)
conclusive in favor of the Trustee and the Company, if made in the manner
provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness to such
execution or by the certificate of any notary public or other officer authorized
by law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by an officer of a corporation or a member of a partnership, on
behalf of such corporation or partnership, such certificate or affidavit shall
also constitute sufficient proof of his authority. The fact and date of the
execution of any such instrument or writing, or the authority of the person
executing the same, may also be proved in any other manner which the Trustee
deems sufficient.
(c) The ownership of Securities shall be proved by the Security
Register.
<PAGE> 22
13
(d) If the Company shall solicit from the Holders any request, demand,
authorization, direction, notice, consent, waiver or other action, the Company
may, at its option, by Board Resolution, fix in advance a record date for the
determination of Holders entitled to give such request, demand, authorization,
direction, notice, consent, waiver or other action, but the Company shall have
no obligation to do so. Such record date shall be the later of 10 days prior to
the first solicitation of such action or the date of the most recent list of
Holders furnished to the Trustee pursuant to Section 701. If such a record date
is fixed, such request, demand, authorization, direction, notice, consent,
waiver or other action may be given before or after the record date, but only
the Holders of record at the close of business on the record date shall be
deemed to be Holders for the purposes of determining whether Holders of the
requisite proportion of Securities Outstanding have authorized or agreed or
consented to such request, demand, authorization, direction, notice, consent,
waiver or other action, and for that purpose the Securities Outstanding shall be
computed as of the record date; provided that no such authorization, agreement
or consent by the Holders on the record date shall be deemed effective unless it
shall become effective pursuant to the provisions of this Indenture not later
than six months after the record date, and that no such authorization, agreement
or consent may be amended, withdrawn or revoked once given by a Holder, unless
the Company shall provide for such amendment, withdrawal or revocation in
conjunction with such solicitation of authorizations, agreements or consents or
unless and to the extent required by applicable law.
(e) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Security shall bind the Holder of
every Security issued upon the transfer thereof or in exchange therefor or in
lieu thereof, in respect of anything done or suffered to be done by the Trustee
or the Company in reliance thereon whether or not notation of such action is
made upon such Security.
SECTION 105. Notices, etc., to Trustee and Company. Any request, demand,
authorization, direction, notice, consent, waiver or Act of Securityholders or
other document provided or permitted by this Indenture to be made upon, given or
furnished to, or filed with,
(1) the Trustee by any Securityholder or by the Company
shall be sufficient for every purpose hereunder if made, given,
furnished or filed in writing to or with the Trustee at its Corporate
Trust Office, Attention: Corporate Trust Trustee Administration, or
<PAGE> 23
14
(2) the Company by the Trustee or by any Securityholder shall be
sufficient for every purpose hereunder (except as provided in Section
501(4) or, in the case of a request for repayment, as specified in the
Security carrying the right to repayment) if in writing and mailed,
first-class postage prepaid, to the Company addressed to it at the
address of its principal office specified in the first paragraph of this
instrument, Attention: Treasurer, or at any other address previously
furnished in writing to the Trustee by the Company.
SECTION 106. Notices to Securityholders, Waiver. Where this Indenture or
any Security provides for notice to Securityholders of any event, such notice
shall be sufficiently given (unless otherwise herein or in such Security
expressly provided) if in writing and mailed, first-class postage prepaid, to
each Securityholder affected by such event, at his address as it appears in the
Security Register, not later than the latest date, and not earlier than the
earliest date, prescribed for the giving of such notice. In any case where
notice to Securityholders is given by mail, neither the failure to mail such
notice, nor any defect in any notice so mailed, to any particular Securityholder
shall affect the sufficiency of such notice with respect to other
Securityholders. Where this Indenture or any Security provides for notice in any
manner, such notice may be waived in writing by the Person entitled to receive
such notice, either before or after the event, and such waiver shall be the
equivalent of such notice. Waivers of notice by Securityholders shall be filed
with the Trustee, but such filing shall not be a condition precedent to the
validity of any action taken in reliance upon such waiver.
In case, by reason of the suspension of regular mail service as a result
of a strike, work stoppage or otherwise, it shall be impractical to mail notice
of any event to any Securityholder when such notice is required to be given
pursuant to any provision of this Indenture, then any method of notification as
shall be satisfactory to the Trustee and the Company shall be deemed to be a
sufficient giving of such notice.
SECTION 107. Conflict with Trust Indenture Act. If any provision hereof
limits, qualifies or conflicts with the duties imposed by any of Sections 310 to
317, inclusive, of the Trust Indenture Act through operation of Section 318(c)
thereof, such imposed duties shall control.
SECTION 108. Effect of Headings and Table of Contents. The Article and
Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.
<PAGE> 24
15
SECTION 109. Successors and Assigns. All covenants and agreements in
this Indenture by the Company shall bind its successors and assigns, whether
so expressed or not.
SECTION 110. Separability Clause. In case any provision in this
Indenture or in the Securities shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
SECTION 111. Benefits of Indenture. Nothing in this Indenture or in any
Securities, express or implied, shall give to any Person, other than the parties
hereto and their successors hereunder, any Authenticating Agent or Paying Agent,
the Security Registrar and the Holders of Securities (or such of them as may be
affected thereby), any benefit or any legal or equitable right, remedy or claim
under this Indenture.
SECTION 112. Governing Law. This Indenture shall be construed in
accordance with and governed by the laws of the State of New York.
SECTION 113. Counterparts. This instrument may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.
ARTICLE TWO
SECURITY FORMS
SECTION 201. Forms Generally. The Securities shall have such appropriate
insertions, omissions, substitutions and other variations as are required or
permitted by this Indenture and may have such letters, numbers or other marks of
identification and such legends or endorsements placed thereon, as may be
required to comply with the rules of any securities exchange, or as may,
consistently herewith, be determined by the officer executing such Securities,
as evidenced by such officer's execution of the Securities. Any portion of the
text of any Security may be set forth on the reverse thereof, with an
appropriate reference thereto on the face of the Security.
The definitive Securities shall be printed, lithographed or engraved or
produced by any combination of these methods on steel engraved borders or may be
produced in any other manner, all as determined by the officer execut-
<PAGE> 25
16
ing such Securities, as evidenced by such officer's execution of such
Securities, subject, with respect to the Securities of any series, to the rules
of any securities exchange on which such Securities are listed.
SECTION 202. Forms of Securities. Each Security shall be in one of the
forms approved from time to time by or pursuant to a Board Resolution, or
established in one or more indentures supplemental hereto. Prior to the delivery
of a Security to the Trustee for authentication in any form approved by or
pursuant to a Board Resolution, the Company shall deliver to the Trustee the
Board Resolution by or pursuant to which such form of Security has been
approved, which Board Resolution shall have attached thereto a true and correct
copy of the form of Security which has been approved thereby or, if a Board
Resolution authorizes a specific officer or officers to approve a form of
Security, a certificate of such officer or officers approving the form of
Security attached thereto. Any form of Security approved by or pursuant to a
Board Resolution must be acceptable as to form to the Trustee, such acceptance
to be evidenced by the Trustee's authentication of Securities in that form or a
certificate signed by a Responsible Officer of the Trustee and delivered to the
Company.
SECTION 203. Form of Trustee's Certificate of Authentication. The form
of Trustee's Certificate of Authentication for any Security issued pursuant to
this Indenture shall be substantially as follows:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities referred to in the within-mentioned
Indenture.
The Bank of New York,
as Trustee,
By: ____________________
Authorized Signatory
SECTION 204. Securities Issuable in the Form of a Global Security. (a)
If the Company shall establish pursuant to Sections 202 and 301 that the
Securities of a particular series are to be issued in whole or in part in the
form of one or more Global Securities, then the Company shall execute and the
Trustee or
<PAGE> 26
17
its agent shall, in accordance with Section 303 and the Company Order delivered
to the Trustee or its agent thereunder, authenticate and make available for
delivery, such Global Security or Securities, which (i) shall represent, and
shall be denominated in an amount equal to the aggregate principal amount of,
the Outstanding Securities of such series to be represented by such Global
Security or Securities, or such portion thereof as the Company shall specify in
a Company Order, (ii) shall be registered in the name of the Depositary for such
Global Security or Securities or its nominee, (iii) shall be delivered by the
Trustee or its agent to the Depositary or pursuant to the Depositary's
instruction and (iv) shall bear a legend substantially to the following effect:
"Unless this certificate is presented by an authorized representative of the
Depositary to Issuer or its agent for registration of transfer, exchange, or
payment, and any certificate issued is registered in the name of the nominee of
the Depositary or in such other name as is requested by an authorized
representative of the Depositary (and any payment is made to the nominee of the
Depositary or to such other entity as is requested by an authorized
representative of the Depositary), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered
owner hereof, the nominee of the Depositary, has an interest herein."
(b) Notwithstanding any other provision of this Section 204 or of
Section 305, and subject to the provisions of paragraph (c) below, unless the
terms of a Global Security expressly permit such Global Security to be exchanged
in whole or in part for individual Securities, a Global Security may be
transferred, in whole but not in part and in the manner provided in Section 305,
only to a nominee of the Depositary for such Global Security, or to the
Depositary, or a successor Depositary for such Global Security selected or
approved by the Company, or to a nominee of such successor Depositary.
(c) (i)If at any time the Depositary for a Global Security notifies the
Company that it is unwilling or unable to continue as Depositary for such Global
Security or if at any time the Depositary for the Securities for such series
shall no longer be eligible or in good standing under the Securities Exchange
Act of 1934, as amended, or other applicable statute or regulation, the Company
shall appoint a successor Depositary with respect to such Global Security. If a
successor Depositary for such Global Security is not appointed by the Company
within 90 days after the Company receives such notice or becomes aware of such
ineligibility, the Company will execute, and the Trustee
<PAGE> 27
18
or its agent, upon receipt of a Company Request for the authentication and
delivery of individual Securities of such series in exchange for such Global
Security, will authenticate and make available for delivery individual
Securities of such series of like tenor and terms in an aggregate principal
amount equal to the principal amount of the Global Security in exchange for such
Global Security.
(ii) The Company may at any time and in its sole discretion determine
that the Securities of any series or portion thereof issued or issuable in the
form of one or more Global Securities shall no longer be represented by such
Global Security or Securities. In such event the Company will execute, and the
Trustee, upon receipt of a Company Request for the authentication and delivery
of individual Securities of such series in exchange in whole or in part for such
Global Security, will authenticate and make available for delivery individual
Securities of such series of like tenor and terms in definitive form in an
aggregate principal amount equal to the principal amount of such Global Security
or Securities representing such series or portion thereof in exchange for such
Global Security or Securities.
(iii) If specified by the Company pursuant to Sections 202 and 301 with
respect to Securities issued or issuable in the form of a Global Security, the
Depositary for such Global Security may surrender such Global Security in
exchange in whole or in part for individual Securities of such series of like
tenor and terms in definitive form on such terms as are acceptable to the
Company and such Depositary. Thereupon the Company shall execute, and the
Trustee or its agent shall authenticate and make available for delivery, without
service charge, (1) to each Person specified by such Depositary a new Security
or Securities of the same series of like tenor and terms and of any authorized
denomination as requested by such Person in aggregate principal amount equal to
and in exchange for such Person's beneficial interest as specified by such
Depositary in the Global Security; and (2) to such Depositary a new Global
Security of like tenor and terms and in an authorized denomination equal to the
difference, if any, between the principal amount of the surrendered Global
Security and the aggregate principal amount of Securities delivered to Holders
thereof.
(iv) In any exchange provided for in any of the preceding three
paragraphs, the Company will execute and the Trustee or its agent will
authenticate and make available for delivery individual Securities in definitive
registered
<PAGE> 28
19
form in authorized denominations. Upon the exchange of the entire principal
amount of a Global Security for individual Securities, such Global Security
shall be canceled by the Trustee or its agent. Except as provided in the
preceding paragraph, Securities issued in exchange for a Global Security
pursuant to this Section shall be registered in such names and in such
authorized denominations as the Depositary for such Global Security, pursuant to
instructions from its direct or indirect participants or otherwise, shall
instruct the Trustee or the Security Registrar. The Trustee shall deliver at its
Corporate Trust Office such Securities to the Persons in whose names such
Securities are so registered.
ARTICLE THREE
THE SECURITIES
SECTION 301. General Title; General Limitations; Issuable in Series;
Terms of Particular Series. The aggregate principal amount of Securities which
may be authenticated and delivered and Outstanding under this Indenture is not
limited.
The Securities may be issued in one or more series up to an aggregate
principal amount of Securities as from time to time may be authorized by the
Board of Directors. All Securities of each series under this Indenture shall in
all respects be equally and ratably entitled to the benefits hereof with respect
to such series without preference, priority or distinction on account of the
actual time of the authentication and delivery or Stated Maturity of the
Securities of such series.
Each series of Securities shall be created either by or pursuant to a
Board Resolution or by an indenture supplemental hereto. The Securities of each
such series may bear such date or dates, be payable at such place or places,
have such Stated Maturity or Maturities, be issuable at such premium over or
discount from their face value, bear interest at such rate or rates, from such
date or dates, payable in such installments and on such dates and at such place
or places to the Holders of Securities registered as such on such Regular Record
Dates, or may bear no interest, and may be redeemable or repayable at such
Redemption Price or Prices or Repayment Price or Prices, as the case may be,
whether at the option of the Holder or otherwise, and upon such terms, all as
shall be provided for in or pursuant to the Board Resolution or in the
supplemental indenture creating that series. There may also be established
<PAGE> 29
20
in or pursuant to a Board Resolution or in a supplemental indenture prior to the
issuance of Securities of each such series, provision for:
(1) the exchange or conversion of the Securities of that series,
at the option of the Holders thereof, for or into new Securities of a
different series or other securities except shares of capital stock of
the Company or any subsidiary of the Company or securities directly or
indirectly convertible into or exchangeable for any such shares;
(2) a sinking or purchase fund or other analogous obligation;
(3) a limitation on the aggregate principal amount of the
Securities of that series;
(4) the exchange of Securities of that series, at the option of
the Holders thereof, for other Securities of the same series of the same
aggregate principal amount of a different authorized kind or different
authorized denomination or denominations, or both;
(5) the appointment by the Trustee of an Authenticating Agent in
one or more places other than the location of the office of the Trustee
with power to act on behalf of the Trustee and subject to its direction
in the authentication and delivery of the Securities of any one or more
series in connection with such transactions as shall be specified in the
provisions of this Indenture or in or pursuant to the Board Resolution
or the supplemental indenture creating such series;
(6) the portion of the principal amount of Securities of the
series, if other than the principal amount thereof, which shall be
payable upon declaration of acceleration of the Maturity thereof
pursuant to Section 502 or provable in bankruptcy pursuant to Section
504;
(7) any Event of Default with respect to the Securities of such
series, if not set forth herein, and any additions, deletions or other
changes to the Events of Default set forth herein that shall be
applicable to the Securities of such series;
(8) any covenant solely for the benefit of the Securities of
such series and any additions, deletions or other changes to the
provisions of Sections 1006 and 1007 that shall be applicable to the
Securities of that series;
(9) the inapplicability of Section 403 of this Indenture to the
Securities of such series and any covenant with respect to Section
403(b) established in or pursuant to a Board Resolution or in a
supplemental indenture as described above that has not already been
established herein;
(10) If the Securities of the series shall be issued in whole or
in part in the form of a Global Security or Securities, the terms and
conditions,
<PAGE> 30
21
if any, upon which such Global Security or Securities may be exchanged
in whole or in part for other individual Securities; and the Depositary
for such Global Security or Securities; and
(11) any other terms of the series,
all upon such terms as may be determined in or pursuant to a Board Resolution or
in a supplemental indenture with respect to such series. All Securities of the
same series shall be substantially identical in tenor and effect except as to
denomination and except if issued pursuant to Section 311.
The form of the Securities of each series shall be established pursuant
to the provisions of this Indenture in or pursuant to the Board Resolution or in
the supplemental indenture creating such series. The Securities of each series
shall be distinguished from the Securities of each other series in such manner,
reasonably satisfactory to the Trustee, as the Board of Directors may determine.
Unless otherwise provided with respect to Securities of a particular
series, the Securities of any series may only be issuable in registered form,
without coupons.
Any terms or provisions in respect of the Securities of any series
issued under this Indenture may be determined pursuant to this Section by
providing for the method by which such terms or provisions shall be determined.
SECTION 302. Denominations. The Securities of each series shall be
issuable in such denominations as shall be provided in the provisions of this
Indenture or in or pursuant to the Board Resolution or the supplemental
indenture creating such series. In the absence of any such provisions with
respect to the Securities of any series, the Securities of that series shall be
issuable only in fully registered form in denominations of $1,000 and any
integral multiple thereof.
SECTION 303. Execution, Authentication and Delivery and Dating. The
Securities shall be executed on behalf of the Company by its Chairman of the
Board, its Vice Chairman, its President or one of its Vice Presidents. The
signature of any of these officers on the Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals who
were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.
<PAGE> 31
22
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities executed by the Company to
the Trustee for authentication; and the Trustee shall, upon Company Order,
authenticate and make available for delivery such Securities as in this
Indenture provided and not otherwise.
Prior to any such authentication and delivery, the Trustee shall be
entitled to receive, in addition to any Officers' Certificate and Opinion of
Counsel required to be furnished to the Trustee pursuant to Section 102, and the
Board Resolution and any certificate relating to the issuance of the series of
Securities required to be furnished pursuant to Section 202, an Opinion of
Counsel stating that:
(1) all instruments furnished to the Trustee conform to the
requirements of the Indenture and constitute sufficient authority
hereunder for the Trustee to authenticate and deliver such Securities;
(2) the form and terms of such Securities have been
established in conformity with the provisions of this Indenture;
(3) all laws and requirements with respect to the execution and
delivery by the Company of such Securities have been complied with, the
Company has the corporate power to issue such Securities and such
Securities have been duly authorized and delivered by the Company and,
assuming due authentication and delivery by the Trustee, constitute
legal, valid and binding obligations of the Company enforceable in
accordance with their terms (subject, as to enforcement of remedies, to
applicable bankruptcy, reorganization, insolvency, moratorium or other
laws and legal principles affecting creditors' rights generally from
time to time in effect and to general equitable principles, whether
applied in an action at law or in equity) and entitled to the benefits
of this Indenture, equally and ratably with all other Securities, if
any, of such series Outstanding;
(4) the Indenture is qualified under the Trust Indenture
Act; and
(5) such other matters as the Trustee may reasonably request;
and, if the authentication and delivery relates to a new series of Securities
created by an indenture supplemental hereto, also stating that all laws and
requirements with respect to the form and execution by the Company of the
supplemental indenture with respect to that series of Securities have been
complied with, the Company has corporate power to execute and deliver any such
supplemental indenture and has taken all necessary corporate action for those
purposes and any such supplemental indenture has been executed and delivered and
constitutes the legal, valid and binding obligation of the Com-
<PAGE> 32
23
pany enforceable in accordance with its terms (subject, as to enforcement of
remedies, to applicable bankruptcy, reorganization, insolvency, moratorium or
other laws and legal principles affecting creditors' rights generally from time
to time in effect and to general equitable principles, whether applied in an
action at law or in equity) and, if the authentication and delivery relates to
Securities of a series issued pursuant to Section 311, paragraphs (2) and (3) of
the foregoing opinion shall read as follows:
"(2) the form of such Securities and the procedures for
determining the terms of such Securities as set forth in the procedures
relating thereto referred to in Section 311 have been established in
conformity with the provisions of this Indenture, and
(3) all laws and requirements with respect to the execution and
delivery by the Company of such Securities have been complied with, the
Company has the corporate power to issue such Securities and such
Securities have been duly authorized by the Company and when duly
executed by the Company and completed and authenticated in accordance
with the Indenture and issued, delivered and paid for in accordance with
the applicable selling agency or distribution agreement, will have been
duly issued under the Indenture and will constitute the legal, valid and
binding obligations of the Company enforceable in accordance with their
terms (subject, as to enforcement of remedies, to applicable bankruptcy,
reorganization, insolvency, moratorium or other laws and legal
principles affecting creditors' rights generally from time to time in
effect and to general equitable principles, whether applied in an action
at law or in equity) and entitled to the benefits of this Indenture,
equally and ratably with all other Securities, if any, of such series
Outstanding."
The Trustee shall not be required to authenticate such Securities if the
issue thereof will adversely affect the Trustee's own rights, duties or
immunities under the Securities and this Indenture.
Unless otherwise provided in the form of Security for any series, all
Securities shall be dated the date of their authentication.
No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and such certificate upon any
Security shall be conclusive evidence, and the only evidence, that such Security
has been duly authenticated and delivered hereunder.
<PAGE> 33
24
SECTION 304. Temporary Securities. Pending the preparation of definitive
Securities of any series, the Company may execute, and, upon receipt of the
documents required by Section 303, together with a Company Order, the Trustee
shall authenticate and make available for delivery, temporary Securities which
are printed, lithographed, typewritten, mimeographed or otherwise produced, in
any authorized denomination, substantially of the tenor of the definitive
Securities in lieu of which they are issued and with such appropriate
insertions, omissions, substitutions and other variations as the officers
executing such Securities may determine, as evidenced by their execution of such
Securities.
If temporary Securities of any series are issued, the Company will cause
definitive Securities of such series to be prepared without unreasonable delay.
After the preparation of definitive Securities, the temporary Securities of such
series shall be exchangeable for definitive Securities of such series upon
surrender of the temporary Securities of such series at the office or agency of
the Company in a Place of Payment, without charge to the Holder; and upon
surrender for cancellation of any one or more temporary Securities the Company
shall execute and the Trustee shall authenticate and make available for delivery
in exchange therefor a like principal amount of definitive Securities of such
series of authorized denominations and of like tenor and terms. Until so
exchanged the temporary Securities of such series shall in all respects be
entitled to the same benefits under this Indenture as definitive Securities of
such series.
SECTION 305. Registration, Transfer and Exchange. The Company shall keep
or cause to be kept a register or registers (herein sometimes referred to as the
"Security Register") in which, subject to such reasonable regulations as it may
prescribe, the Company shall provide for the registration of Securities, or of
Securities of a particular series, and for transfers of Securities or of
Securities of such series. Any such register shall be in written form or in any
other form capable of being converted into written form within a reasonable
time. At all reasonable times the information contained in such register or
registers shall be available for inspection by the Trustee at the office or
agency to be maintained by the Company as provided in Section 1002. There shall
be only one Security Register per series of Securities.
Subject to Section 204, upon surrender for transfer of any Security of
any series at the office or agency of the Company in a Place of Payment, the
<PAGE> 34
25
Company shall execute, and the Trustee shall authenticate and deliver, in the
name of the designated transferee or transferees, one or more new Securities of
such series of any authorized denominations, of a like aggregate principal
amount and Stated Maturity and of like tenor and terms.
Subject to Section 204, at the option of the Holder, Securities of any
series may be exchanged for other Securities of such series of any authorized
denominations, of a like aggregate principal amount and Stated Maturity and of
like tenor and terms, upon surrender of the Securities to be exchanged at such
office or agency. Whenever any Securities are so surrendered for exchange, the
Company shall execute, and the Trustee shall authenticate and make available for
delivery, the Securities which the Securityholder making the exchange is
entitled to receive.
All Securities issued upon any transfer or exchange of Securities shall
be the valid obligations of the Company, evidencing the same debt, and entitled
to the same benefits under this Indenture, as the Securities surrendered upon
such transfer or exchange.
Every Security presented or surrendered for transfer or exchange shall
(if so required by the Company or the Trustee) be duly endorsed, or be
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed, by the Holder thereof or his
attorney duly authorized in writing.
Unless otherwise provided in the Security to be transferred or
exchanged, no service charge shall be made on any Securityholder for any
transfer or exchange of Securities, but the Company may (unless otherwise
provided in such Security) require payment of a sum sufficient to cover any tax
or other governmental charge that may be imposed in connection with any transfer
or exchange of Securities, other than exchanges pursuant to Section 304 or 906
not involving any transfer.
The Company shall not be required (i) to issue, transfer or exchange any
Security of any series during a period beginning at the opening of business 15
days before the day of the mailing of a notice of redemption of Securities of
such series selected for redemption under Section 1103 and ending at the close
of business on the date of such mailing, or (ii) to transfer or exchange any
Security so selected for redemption in whole or in part.
<PAGE> 35
26
None of the Company, the Trustee, any agent of the Trustee, any Paying
Agent or the Security Registrar will have any responsibility or liability for
any aspect of the records relating to or payments made on account of beneficial
ownership interests of a Global Security or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities. If (i)
any mutilated Security is surrendered to the Trustee, or the Company and the
Trustee receive evidence to their satisfaction of the destruction, loss or theft
of any Security, and (ii) there is delivered to the Company and the Trustee such
security or indemnity as may be required by them to save each of them harmless,
then, in the absence of notice to the Company or the Trustee that such Security
has been acquired by a bona fide purchaser, the Company shall execute and upon
its request the Trustee shall authenticate and make available for delivery, in
exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Security, a new Security of like tenor, series, stated maturity and principal
amount, bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security issued pursuant to this Section in lieu of any
destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities of the same series duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities.
SECTION 307. Payment of Interest, Interest Rights Preserved. Unless
otherwise provided with respect to such Security pursuant to Section 301,
interest
<PAGE> 36
27
on any Security which is payable, and is punctually paid or duly provided for,
on any Interest Payment Date shall be paid to the Person in whose name that
Security (or one or more Predecessor Securities) is registered at the close of
business on the Regular Record Date for such interest.
Any interest on any Security which is payable, but is not punctually
paid or duly provided for, on any Interest Payment Date (herein called
"Defaulted Interest") shall forthwith cease to be payable to the registered
Holder on the relevant Regular Record Date by virtue of his having been such
Holder, and, except as hereinafter provided, such Defaulted Interest may be paid
by the Company, at its election in each case, as provided in Clause (1) or
Clause (2) below:
(1) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names any such Securities (or their
respective Predecessor Securities) are registered at the close of
business on a Special Record Date for the payment of such Defaulted
Interest, which shall be fixed in the following manner. The Company
shall notify the Trustee in writing of the amount of Defaulted Interest
proposed to be paid on each such Security and the date of the proposed
payment, and at the same time the Company shall deposit with the Trustee
an amount of money equal to the aggregate amount proposed to be paid in
respect of such Defaulted Interest or shall make arrangements
satisfactory to the Trustee for such deposit prior to the date of the
proposed payment, such money when deposited to be held in trust for the
benefit of the Persons entitled to such Defaulted Interest as in this
Clause provided. Thereupon the Trustee shall fix a Special Record Date
for the payment of such Defaulted Interest which shall be not more than
15 nor less than 10 days prior to the date of the proposed payment and
not less than 10 days after the receipt by the Trustee of the notice of
the proposed payment. The Trustee shall promptly notify the Company of
such Special Record Date and, in the name and at the expense of the
Company, shall cause notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor to be mailed, first class
postage prepaid, to the Holder of each such Security at his address as
it appears in the Security Register, not less than 10 days prior to such
Special Record Date. Notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor having been mailed as
aforesaid, such Defaulted Interest shall be paid to the Persons in whose
names such Securities (or their respective Predecessor Securities) are
registered on such Special Record Date and shall no longer be payable
pursuant to the following Clause (2).
(2) The Company may make payment of any Defaulted Interest
in any other lawful manner not inconsistent with the requirements of
any
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28
securities exchange on which such Securities may be listed, and upon
such notice as may be required by such exchange, if, after notice given
by the Company to the Trustee of the proposed payment pursuant to this
Clause, such manner of payment shall be deemed practicable by the
Trustee.
If any installment of interest the Stated Maturity of which is on or
prior to the Redemption Date for any Security called for redemption pursuant to
Article Eleven is not paid or duly provided for on or prior to the Redemption
Date in accordance with the foregoing provisions of this Section, such interest
shall be payable as part of the Redemption Price of such Securities.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon transfer of or in exchange for or in lieu of
any other Security shall carry the rights to interest accrued and unpaid, and to
accrue, which were carried by such other Security.
SECTION 308. Persons Deemed Owners. The Company, the Trustee and any
agent of the Company or the Trustee may treat the Person in whose name any
Security is registered as the owner of such Security for the purpose of
receiving payment of principal of (and premium, if any), and (subject to Section
307) interest on, such Security and for all other purposes whatsoever, whether
or not such Security be overdue, and neither the Company, the Trustee nor any
agent of the Company or the Trustee shall be affected by notice to the contrary.
SECTION 309. Cancellation. All Securities surrendered for payment,
redemption, transfer, or exchange or credit against a sinking fund shall, if
surrendered to any Person other than the Trustee, be delivered to the Trustee
and, if not already canceled, shall be promptly canceled by it. The Company may
at any time deliver to the Trustee for cancellation any Securities previously
authenticated and delivered hereunder which the Company may have acquired in any
manner whatsoever, and all Securities so delivered shall be promptly canceled by
the Trustee. No Security shall be authenticated in lieu of or in exchange for
any Securities canceled as provided in this Section, except as expressly
permitted by this Indenture. The Trustee shall deliver all canceled Securities
to the Company.
SECTION 310. Computation of Interest. Unless otherwise provided as
contemplated in Section 301, interest on the Securities shall be calculated on
the basis of a 360-day year of twelve 30-day months.
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29
SECTION 311. Medium-Term Securities. Notwithstanding any contrary
provision herein, if all Securities of a series are not to be originally issued
at one time, it shall not be necessary for the Company to deliver to the Trustee
an Officers' Certificate, Board Resolution, supplemental indenture, Opinion of
Counsel or Company Order otherwise required pursuant to Sections 102, 202, 301
and 303 at or prior to the time of authentication of each Security of such
series if such documents are delivered to the Trustee or its agent at or prior
to the authentication upon original issuance of the first Security of such
series to be issued; provided that any subsequent request by the Company to the
Trustee to authenticate Securities of such series upon original issuance shall
constitute a representation and warranty by the Company that as of the date of
such request, the statements made in the Officers' Certificate or other
certificates delivered pursuant to Sections 102 and 202 shall be true and
correct as if made on such date.
A Company Order, Officers' Certificate or Board Resolution or
supplemental indenture delivered by the Company to the Trustee in the
circumstances set forth in the preceding paragraph may provide that Securities
which are the subject thereof will be authenticated and delivered by the Trustee
or its agent on original issue from time to time in the aggregate principal
amount established for such series pursuant to such procedures acceptable to the
Trustee as may be specified from time to time by Company Order upon the
telephonic, electronic or written order of persons designated in such Company
Order, Officers' Certificate, supplemental indenture or Board Resolution (any
such telephonic or electronic instructions to be promptly confirmed in writing
by such persons) and that such persons are authorized to determine, consistent
with such Company Order, Officers' Certificate, supplemental indenture or Board
Resolution, such terms and conditions of said Securities as are specified in
such Company Order, Officers' Certificate, supplemental indenture or Board
Resolution.
SECTION 312. CUSIP Numbers. The Company in issuing the Securities may
use "CUSIP" numbers (if then generally in use), and, if so, the Trustee shall
use "CUSIP" numbers in notices of redemption as a convenience to Holders;
provided that any such notice may state that no representation is made as to the
correctness of such numbers either as printed on the Securities or as contained
in any notice of a redemption and that reliance may be placed only on the other
identification numbers printed on the Securities, and any such redemption shall
not be affected by any defect in or omission of such numbers.
<PAGE> 39
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ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture. This Indenture
shall cease to be of further effect with respect to any series of Securities
(except as to any surviving rights of conversion or transfer or exchange of
Securities of such series expressly provided for herein or in the form of
Security for such series), and the Trustee, on demand of and at the expense of
the Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture as to such series, when
(1) either
(A) all Securities of that series theretofore authenticated and
delivered (other than (i) Securities of such series which have been
destroyed, lost or stolen and which have been replaced or paid as
provided in Section 306, and (ii) Securities of such series for whose
payment money has theretofore been deposited in trust or segregated and
held in trust by the Company and thereafter repaid to the Company or
discharged from such trust, as provided in Section 1003) have been
delivered to the Trustee canceled or for cancellation; or
(B) all such Securities of that series not theretofore delivered
to the Trustee canceled or for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity
within one year, or
(iii) are to be called for redemption within one year
under arrangements satisfactory to the Trustee for the giving of
notice of redemption by the Trustee in the name, and at the
expense, of the Company,
and the Company, in the case of (i), (ii) or (iii) above, has
deposited or caused to be deposited with the Trustee as trust
funds in trust for the purpose an amount, which shall be
immediately due and payable, sufficient to pay and discharge the
entire indebtedness on such Securities not theretofore delivered
to the Trustee canceled or for cancellation, for principal (and
premium, if any) and interest to the date of such deposit (in the
case of Securities which have become due and payable), or to the
Stated Maturity or Redemption Date, as the case may be;
(2) the Company has paid or caused to be paid all other sums
payable hereunder by the Company with respect to the Securities of such
series; and
<PAGE> 40
31
(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel each stating that all conditions
precedent herein provided for relating to the satisfaction and discharge
of this Indenture with respect to the Securities of such series have
been complied with.
Notwithstanding the satisfaction and discharge of this Indenture with respect to
any series of Securities, the obligations of the Company to the Trustee with
respect to that series under Section 607 shall survive and the obligations of
the Trustee under Sections 402 and 1003 shall survive.
SECTION 402. Application of Trust Money. All money deposited with the
Trustee pursuant to Section 401 or Section 403 shall be held in trust and
applied by it, in accordance with the provisions of the series of Securities in
respect of which it was deposited and this Indenture, to the payment, either
directly or through any Paying Agent (including the Company acting as its own
Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of
the principal (and premium, if any) and interest for whose payment such money
has been deposited with the Trustee; but such money need not be segregated from
other funds except to the extent required by law.
SECTION 403. Defeasance Upon Deposit of Funds or Government Obligations.
Unless pursuant to Section 301 provision is made that this Section shall not be
applicable to the Securities of any series, at the Company's option, either (a)
the Company shall be deemed to have been Discharged (as defined below) from its
obligations with respect to any series of Securities after the applicable
conditions set forth below have been satisfied or (b) the Company shall cease to
be under any obligation to comply with any term, provision or condition set
forth in Sections 1006 and 1007 (and any other Sections applicable to such
Securities that are determined pursuant to Section 301 to be subject to this
provision) with respect to any series of Securities at any time after the
applicable conditions set forth below have been satisfied:
(1) the Company shall have deposited or caused to be deposited
irrevocably with the Trustee as trust funds in trust, specifically
pledged as security for, and dedicated solely to, the benefit of the
Holders of the Securities of such series (i) money in an amount, or (ii)
the equivalent in direct obligations of, or obligations the principal of
and interest on which are fully guaranteed by, the United States of
America which through the payment of interest and principal in respect
thereof in accordance with their terms will provide, not later than one
day before the due date of any payment, money in an amount, or (iii) a
combination of (i) and (ii),
<PAGE> 41
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sufficient, in the opinion (with respect to (ii) and (iii)) of a
nationally recognized firm of independent public accountants expressed
in a written certification thereof delivered to the Trustee, to pay and
discharge each installment of principal (including mandatory sinking
fund payments) and any premium of, interest on and any repurchase
obligations with respect to the outstanding Securities of such series
on the dates such installments of interest or principal or repurchase
obligations are due;
(2) no Event of Default or event (including such deposit) which
with notice or lapse of time would become an Event of Default with
respect to the Securities of such series shall have occurred and be
continuing on the date of such deposit; and
(3) the Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that Holders of the Securities of such series will
not recognize income, gain or loss for Federal income tax purposes as a
result of the Company's exercise of its option under this Section 403
and will be subject to Federal income tax on the same amount and in the
same manner and at the same times as would have been the case if such
option had not been exercised, and, in the case of Securities being
Discharged, such opinion shall be based upon at least one of the
following authorities (issued, enacted or promulgated after the date of
this Indenture), substantially on point and to the foregoing effect: (i)
a public ruling of the Internal Revenue Service, (ii) a private ruling
of the Internal Revenue Service issued to the Company with respect to
the Securities, (iii) a provision of the Internal Revenue Code, or (iv)
a final regulation promulgated by the Department of the Treasury.
"Discharged" means that the Company shall be deemed to have paid and
discharged the entire indebtedness represented by, and obligations under, the
Securities of such series and to have satisfied all the obligations under this
Indenture relating to the Securities of such series (and the Trustee, at the
expense of the Company, shall execute proper instruments acknowledging the
same), except (A) the rights of Holders of Securities to receive, from the trust
fund described in clause (1) above, payment of the principal and any premium of
and any interest on such Securities when such payments are due; (B) the
Company's obligations with respect to such Securities under Sections 305, 306,
402, 1002 and 1003; and (C) the rights, powers, trusts, duties and immunities of
the Trustee hereunder.
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ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default. "Event of Default", wherever used
herein, means with respect to any series of Securities any one of the following
events (whatever the reason for such Event of Default and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body), unless such event is either inapplicable
to a particular series or it is specifically deleted or modified in or pursuant
to the supplemental indenture or Board Resolution creating such series of
Securities or in the form of Security for such series:
(1) default in the payment of any interest upon any Security of
that series when it becomes due and payable, and continuance of such
default for a period of 30 days; or
(2) default in the payment of the principal of (or premium, if
any, on) any Security of that series at its Maturity; or
(3) default in the payment of any sinking or purchase fund or
analogous obligation when the same becomes due by the terms of the
Securities of such series; or
(4) default in the performance, or breach, of any covenant or
warranty of the Company in this Indenture in respect of the Securities
of such series (other than a covenant or warranty in respect of the
Securities of such series a default in the performance of which or the
breach of which is elsewhere in this Section specifically dealt with),
all of such covenants and warranties in the Indenture which are not
expressly stated to be for the benefit of a particular series of
Securities being deemed in respect of the Securities of all series for
this purpose, and continuance of such default or breach for a period of
90 days after receipt by the Company from the Trustee or by the Company
and the Trustee from the Holders of at least 25% in principal amount of
the Outstanding Securities of such series, a written notice, by
registered or certified mail, specifying such default or breach and
requiring it to be remedied and stating that such notice is a "Notice of
Default" hereunder; or
(5) the entry of an order for relief against the Company under
the Federal Bankruptcy Act by a court having jurisdiction in the
premises or a decree or order by a court having jurisdiction in the
premises adjudging the Company a bankrupt or insolvent under any other
applicable Federal, or State law, or the entry of a decree or order
approving as properly filed a petition seeking reorganization,
arrangement, adjustment or composition of or in respect of the Company
under the Federal Bankruptcy Code
<PAGE> 43
34
or any other applicable Federal or State law, or appointing a receiver,
liquidator, assignee, trustee, sequestrator (or other similar official)
of the Company or of any substantial part of its property, or ordering
the winding up or liquidation of its affairs, and the continuance of any
such decree or order unstayed and in effect for a period of 90
consecutive days; or
(6) the consent by the Company to the institution of bankruptcy
or insolvency proceedings against it, or the filing by it of a petition
or answer or consent seeking reorganization or relief under the Federal
Bankruptcy Code or any other applicable Federal or State law, or the
consent by it to the filing of any such petition or to the appointment
of a receiver, liquidator, assignee, trustee, sequestrator (or other
similar official) of the Company or of any substantial part of its
property, or the making by it of an assignment for the benefit of
creditors, or the admission by it in writing of its inability to pay its
debts generally as they become due, or the taking of corporate action by
the Company in furtherance of any such action; or
(7) any other Event of Default provided in the supplemental
indenture or Board Resolution under which such series of Securities is
issued or in the form of Security for such series.
SECTION 502. Acceleration of Maturity, Rescission and Annulment. If an
Event of Default described in paragraph (1), (2), (3), (4) or (7) (if the Event
of Default under paragraph (4) or (7) is with respect to less than all series of
Securities then Outstanding) of Section 501 occurs and is continuing with
respect to any series, then and in each and every such case, unless the
principal of all the Securities of such series shall have already become due and
payable, either the Trustee or the Holders of not less than 25% in aggregate
principal amount of the Securities of such series then Outstanding hereunder
(each such series acting as a separate class), by notice in writing to the
Company (and to the Trustee if given by Holders), may declare the principal
amount (or, if the Securities of such series are Original Issue Discount
Securities, such portion of the principal amount as may be specified in the
terms of that series) of all the Securities of such series and all accrued
interest thereon to be due and payable immediately, and upon any such
declaration the same shall become and shall be immediately due and payable,
anything in this Indenture or in the Securities of such series contained to the
contrary notwithstanding. If an Event of Default described in paragraph (4) or
(7) (if the Event of Default under paragraph (4) or (7) is with respect to all
series of Securities then Outstanding), (5) or (6) of Section 501 occurs and is
continuing, then and in each and every such case, unless the principal of all
the Securities shall have already become due and payable, either the Trustee or
the Holders of not less
<PAGE> 44
35
than 25% in aggregate principal amount of all the Securities then Outstanding
hereunder (treated as one class), by notice in writing to the Company (and to
the Trustee if given by Holders), may declare the principal amount (or, if any
Securities are Original Issue Discount Securities, such portion of the principal
amount as may be specified in the terms thereof) of all the Securities then
Outstanding and all accrued interest thereon to be due and payable immediately,
and upon any such declaration the same shall become and shall be immediately due
and payable, anything in this Indenture or in the Securities contained to the
contrary notwithstanding.
At any time after such a declaration of acceleration has been made with
respect to the Securities of any or all series, as the case may be, and before a
judgment or decree for payment of the money due has been obtained by the Trustee
as hereinafter in this Article provided, the Holders of a majority in principal
amount of the Outstanding Securities of such series, by written notice to the
Company and the Trustee, may rescind and annul such declaration and its
consequences if
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(A) all overdue installments of interest on the
Securities of such series,
(B) the principal of (and premium, if any, on) any
Securities of such series which have become due otherwise than by
such declaration of acceleration, and interest thereon at the
rate or rates prescribed therefor by the terms of the Securities
of such series, to the extent that payment of such interest is
lawful,
(C) interest upon overdue installments of interest at the
rate or rates prescribed therefor by the terms of the Securities
of such series to the extent that payment of such interest is
lawful, and
(D) all sums paid or advanced by the Trustee hereunder and
the reasonable compensation, expenses, disbursements and advances
of the Trustee, its agents and counsel and all other amounts due
the Trustee under Section 607;
and
(2) all Events of Default with respect to such series of
Securities, other than the nonpayment of the principal of the Securities
of such series which have become due solely by such acceleration, have
been cured or waived as provided in Section 513.
<PAGE> 45
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No such rescission shall affect any subsequent default or impair any right
consequent thereon.
SECTION 503. Collection of Indebtedness and Suits for Enforcement by
Trustee. The Company covenants that if
(1) default is made in the payment of any installment of
interest on any Security of any series when such interest becomes due
and payable, or
(2) default is made in the payment of the principal of (or
premium, if any, on) any Security at the Maturity thereof, or
(3) default is made in the payment of any sinking or purchase
fund or analogous obligation when the same becomes due by the terms of
the Securities of any series,
and any such default continues for any period of grace provided with respect to
the Securities of such series, the Company will, upon demand of the Trustee, pay
to it, for the benefit of the Holder of any such Security (or the Holders of any
such series in the case of Clause (3) above), the whole amount then due and
payable on any such Security (or on the Securities of any such series in the
case of Clause (3) above) for principal (and premium, if any) and interest, with
interest, to the extent that payment of such interest shall be legally
enforceable, upon the overdue principal (and premium, if any) and upon overdue
installments of interest, at such rate or rates as may be prescribed therefor by
the terms of any such Security (or of Securities of any such series in the case
of Clause (3) above); and, in addition thereto, such further amount as shall be
sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel and all other amounts due the Trustee under Section 607.
If the Company fails to pay such amounts forthwith upon such demand, the
Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, and may
prosecute such proceeding to judgment or final decree, and may enforce the same
against the Company or any other obligor upon the Securities of such series and
collect the money adjudged or decreed to be payable in the manner provided by
law out of the property of the Company or any other obligor upon such
Securities, wherever situated.
If an Event of Default with respect to any series of Securities occurs
and is continuing, the Trustee may in its discretion proceed to protect and
enforce
<PAGE> 46
37
its rights and the rights of the Holders of Securities of such series by such
appropriate judicial proceedings as the Trustee shall deem most effectual to
protect and enforce any such rights, whether for the specific enforcement of any
covenant or agreement in this Indenture or in aid of the exercise of any power
granted herein, or to enforce any other proper remedy.
SECTION 504. Trustee May File Proofs of Claim. In case of the pendency
of any receivership, insolvency, liquidation, bankruptcy, reorganization,
arrangement, adjustment, composition or other judicial proceeding relative to
the Company or any other obligor upon the Securities or the property of the
Company or of such other obligor or their creditors, the Trustee (irrespective
of whether the principal of the Securities shall then be due and payable as
therein expressed or by declaration or otherwise and irrespective of whether the
Trustee shall have made any demand on the Company for the payment of overdue
principal or interest) shall be entitled and empowered, by intervention in such
proceedings or otherwise,
(i) to file and prove a claim for the whole amount of principal
(and premium, if any) and interest owing and unpaid in respect of the
Securities and to file such other papers or documents as may be
necessary and advisable in order to have the claims of the Trustee
(including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel and
all other amounts due the Trustee under Section 607) and of the
Securityholders allowed in such judicial proceeding, and
(ii) to collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute the same;
and any receiver, assignee, trustee, liquidator, sequestrator (or other similar
official) in any such judicial proceeding is hereby authorized by each
Securityholder to make such payment to the Trustee and in the event that the
Trustee shall consent to the making of such payments directly to the
Securityholders, to pay to the Trustee any amount due to it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 607.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Securityholder any
plan of reorganization, arrangement, adjustment or composition affecting the
Securities or the rights of any Holder thereof, or to authorize the Trustee to
vote in respect of the claim of any Securityholder in any such proceeding.
<PAGE> 47
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SECTION 505. Trustee May Enforce Claims Without Possession of
Securities. All rights of action and claims under this Indenture or the
Securities of any series may be prosecuted and enforced by the Trustee without
the possession of any of the Securities of such series or the production thereof
in any proceeding relating thereto, and any such proceeding instituted by the
Trustee shall be brought in its own name as trustee of an express trust, and any
recovery of judgment shall, after provision for the payment of the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agent and
counsel and any other amounts due the Trustee under Section 607, be for the
ratable benefit of the Holders of the Securities of the series in respect of
which such judgment has been recovered.
SECTION 506. Application of Money Collected. Any money collected by the
Trustee with respect to a series of Securities pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal (or premium,
if any) or interest, upon presentation of the Securities of such series and the
notation thereon of the payment if only partially paid and upon surrender
thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under
Section 607.
SECOND:To the payment of the amounts then due and unpaid upon the
Securities of that series for principal (and premium, if any) and
interest, in respect of which or for the benefit of which such money has
been collected, ratably, without preference or priority of any kind,
according to the amounts due and payable on such Securities for
principal (and premium, if any) and interest, respectively.
SECTION 507. Limitation on Suits. No Holder of any Security of any
series shall have any right to institute any proceeding, judicial or
otherwise, with respect to this Indenture, or for the appointment of a
receiver or trustee, or for any other remedy hereunder, unless
(1) such Holder has previously given written notice to the
Trustee of a continuing Event of Default with respect to Securities of
such series;
(2) the Holders of not less than 25% in principal amount of the,
Outstanding Securities of such series shall have made written request to
the Trustee to institute proceedings in respect of such Event of Default
in its own name as Trustee hereunder;
<PAGE> 48
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(3) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such
proceeding; and
(5) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of a
majority in principal amount of the Outstanding Securities of such
series;
it being understood and intended that no one or more Holders of Securities of
such series shall have any right in any manner whatever by virtue of, or by
availing of, any provision of this Indenture to affect, disturb or prejudice the
rights of any other Holders of Securities of such series, or to obtain or to
seek to obtain priority or preference over any other such Holders or to enforce
any right under this Indenture, except in the manner herein provided and for the
equal and proportionate benefit of all the Holders of all Securities of such
series.
SECTION 508. Unconditional Right Of Securityholders To Receive
Principal, Premium and Interest. Notwithstanding any other provisions in this
Indenture, the Holder of any Security shall have the right, which is absolute
and unconditional, to receive payment of the principal of (and premium, if any)
and (subject to Section 307) interest on such Security on the respective Stated
Maturities expressed in such Security (or, in the case of redemption or
repayment, on the Redemption Date or Repayment Date, as the case may be) and to
institute suit for the enforcement of any such payment, and such right shall not
be impaired without the consent of such Holder.
SECTION 509. Restoration of Rights and Remedies. If the Trustee or any
Securityholder has instituted any proceeding to enforce any right or remedy
under this Indenture and such proceeding has been discontinued or abandoned for
any reason, then and in every such case the Company, the Trustee and the
Securityholders shall, subject to any determination in such proceeding, be
restored severally and respectively to their former positions hereunder, and
thereafter all rights and remedies of the Trustee and the Securityholders shall
continue as though no such proceeding had been instituted.
SECTION 510. Rights and Remedies Cumulative. No right or remedy
herein conferred upon or reserved to the Trustee or to the Securityholders is
intended to be exclusive of any other right or remedy, and every right and
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remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law
or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
SECTION 511. Delay or Omission Not Waiver. No delay or omission of the
Trustee or of any Holder of any Security to exercise any right or remedy
accruing upon any Event of Default shall impair any such right or remedy or
constitute a waiver of any such Event of Default or an acquiescence therein.
Every right and remedy given by this article or by law to the Trustee or to the
Securityholders may be exercised from time to time, and as often as may be
deemed expedient, by the Trustee or by the Securityholders, as the case may be.
SECTION 512. Control by Securityholders. The Holders of a majority in
principal amount of the Outstanding Securities of any series shall have the
right to direct the time, method and place of conducting any proceeding for any
remedy available to the Trustee or exercising any trust or power conferred on
the Trustee with respect to the Securities of such series, provided that
(1) the Trustee shall have the right to decline to follow any
such direction if the Trustee, being advised by counsel, determines that
the action so directed may not lawfully be taken or would conflict with
this Indenture or if the Trustee in good faith shall, by a Responsible
Officer, determine that the proceedings so directed would involve it in
personal liability or be unjustly prejudicial to the Holders not taking
part in such direction, and
(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
SECTION 513. Waiver of Past Defaults. The Holders of not less than a
majority in principal amount of the Outstanding Securities of any series may on
behalf of the Holders of all the Securities of such series waive any past
default hereunder with respect to such series and its consequences, except a
default not theretofore cured
(1) in the payment of the principal of (or premium, if any) or
interest on any Security of such series, or in the payment of any
sinking or purchase fund or analogous obligation with respect to the
Securities of such series, or
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(2) in respect of a covenant or provision hereof which under
Article Nine cannot be modified or amended without the consent of the
Holder of each Outstanding Security of such series.
Upon any such waiver, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or impair any right consequent thereon.
SECTION 514. Undertaking for Costs. All parties to this Indenture agree,
and each Holder of any Security by his acceptance thereof shall be deemed to
have agreed, that any court may in its discretion require, in any suit for the
enforcement of any right or remedy under this Indenture, or in any suit against
the Trustee for any action taken or omitted by it as Trustee, the filing by any
party litigant in such suit of an undertaking to pay the costs of such suit, and
that such court may in its discretion assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in such suit, having due
regard to the merits and good faith of the claims or defenses made by such party
litigant; but the provisions of this Section shall not apply to any suit
instituted by the Trustee, to any suit instituted by any Securityholder, or
group of Securityholders, holding in the aggregate more than 10% in principal
amount of the Outstanding Securities of any series to which the suit relates, or
to any suit instituted by any Securityholder for the enforcement of the payment
of the principal of (or premium, if any) or interest on any Security on or after
the respective Stated Maturities expressed in such Security (or, in the case of
redemption or repayment, on or after the Redemption Date or Repayment Date, as
the case may be).
SECTION 515. Waiver of Stay or Extension Laws. The Company covenants (to
the extent that it may lawfully do so) that it will not at any time insist upon,
or plead, or in any manner whatsoever claim or take the benefit or advantage of,
any stay or extension law wherever enacted, now or at any time hereafter in
force, which may affect the covenants or the performance of this Indenture; and
the Company (to the extent that it may lawfully do so) hereby expressly waives
all benefit or advantage of any such law, and covenants that it will not hinder,
delay or impede the execution of any power herein granted to the Trustee, but
will suffer and permit the execution of every such power as though no such law
had been enacted.
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ARTICLE SIX
THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities. (a) Except during the
continuance of an Event of Default with respect to any series of Securities,
(1) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture with respect to
the Securities of such series, and no implied covenants or obligations
shall be read into this Indenture against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may,
with respect to Securities of such series, conclusively rely, as to the
truth of the statements and the correctness of the opinions expressed
therein, upon certificates or opinions furnished to the Trustee and
conforming to the requirements of this Indenture; but in the case of
any such certificates or opinions which by any provision hereof are
specifically required to be furnished to the Trustee, the Trustee shall
be under a duty to examine the same to determine whether or not they
conform to the requirements of this Indenture.
(b) In case an Event of Default with respect to any series of
Securities has occurred and is continuing, the Trustee shall exercise with
respect to the Securities of such series such of the rights and powers vested in
it by this Indenture, and use the same degree of care and skill in their
exercise, as a prudent man would exercise or use under the circumstances in the
conduct of his own affairs.
(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct, except that
(1) this Subsection shall not be construed to limit the effect
of Subsection (a) of this Section;
(2) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it shall be proved
that the Trustee was negligent in ascertaining the pertinent facts;
(3) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the
direction of the Holders of a majority in principal amount of the
Outstanding Securities of any series relating to the time, method and
place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred upon the Trustee,
under this Indenture with respect to the Securities of such series; and
<PAGE> 52
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(4) no provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability
in the performance of any of its duties hereunder, or in the exercise
of any of its rights or powers, if it shall have reasonable grounds for
believing that repayment of such funds or adequate indemnity against
such risk or liability is not reasonably assured to it.
(d) Whether or not therein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Section.
SECTION 602. Notice of Defaults. Within 90 days after the occurrence of
any default hereunder with respect to Securities of any series, the Trustee
shall transmit by mail to all Securityholders of such series, as their names and
addresses appear in the Security Register, notice of such default hereunder
known to the Trustee, unless such default shall have been cured or waived;
provided, however, that, except in the case of a default in the payment of the
principal of (or premium, if any) or interest on any Security of such series or
in the payment of any sinking or purchase fund installment or analogous
obligation with respect to Securities of such series, the Trustee shall be
protected in withholding such notice if and so long as the board of directors,
the executive committee or a trust committee of directors and/or Responsible
Officers of the Trustee in good faith determine that the withholding of such
notice is in the interests of the Securityholders of such series; and provided,
further, that in the case of any default of the character specified in Section
501(4) with respect to Securities of such series no such notice to
Securityholders of such series shall be given until at least 90 days after the
occurrence thereof. For the purpose of this Section, the term "default", with
respect to Securities of any series, means any event which is, or after notice
or lapse of time or both would become, an Event of Default with respect to
Securities of such series.
SECTION 603. Certain Rights of Trustee. Except as otherwise provided in
Section 601:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of indebtedness or other
paper or document believed by it to be genuine and to have been signed
or presented by the proper party or parties;
<PAGE> 53
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(b) any request or direction of the Company mentioned herein
shall be sufficiently evidenced by a Company Request or Company Order
and any resolution of the Board of Directors may be sufficiently
evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or established
prior to taking, suffering or omitting any action hereunder, the
Trustee (unless other evidence be herein specifically prescribed) may,
in the absence of bad faith on its part, rely upon an Officers'
Certificate;
(d) the Trustee may consult with counsel of its selection and
the written advice of such counsel or any Opinion of Counsel shall be
full and complete authorization and protection in respect of any action
taken, suffered or omitted by it hereunder in good faith and in
reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture at the request or
direction of any of the Securityholders pursuant to this Indenture,
unless such Securityholders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and
liabilities which might be incurred by it in compliance with such
request or direction;
(f) the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness
or other paper or document, but the Trustee, in its discretion, may
make such further inquiry or investigation into such facts or matters
as it may see fit, and, if the Trustee shall determine to make such
further inquiry or investigation, it shall be entitled to examine the
books, records and premises of the Company, personally or by agent or
attorney;
(g) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys and the Trustee shall not be responsible
for any misconduct or negligence on the part of any agent or attorney
appointed with due care by it hereunder; and
(h) the Trustee shall not be liable for any action taken,
suffered, or omitted to be taken by it in good faith and reasonably
believed by it to be authorized or within the discretion or rights or
powers conferred upon it by this Indenture.
SECTION 604. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities, except the certificates of
authentication, shall be taken as the statements of the Company, and the Trustee
assumes no responsibility for their correctness. The Trustee makes no repre-
<PAGE> 54
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sentations as to the validity or sufficiency of this Indenture or of the
Securities. The Trustee shall not be accountable for the use or application
by the Company of Securities or the proceeds thereof.
SECTION 605. May Hold Securities. The Trustee, any Paying Agent, the
Security Registrar or any other agent of the Company, in its individual or any
other capacity, may become the owner or pledgee of Securities and, subject to
Sections 608 and 613, may otherwise deal with the Company with the same rights
it would have if it were not Trustee, Paying Agent, Security Registrar or such
other agent.
SECTION 606. Money Held in Trust. Subject to the provisions of Section
1003 hereof, all moneys received by the Trustee shall, until used or applied as
herein provided, be held in trust for the purposes for which they were received,
but need not be segregated from other funds except to the extent required by
law. The Trustee shall be under no liability for interest on any money received
by it hereunder except as otherwise agreed in writing with the Company.
SECTION 607. Compensation and Reimbursement. The Company agrees
(1) to pay to the Trustee from time to time such compensation
as the Company and the Trustee shall from time to time agree in writing
for all services rendered by it hereunder (which compensation shall not
be limited by any provision of law in regard to the compensation of a
trustee of an express trust);
(2) except as otherwise expressly provided herein, to reimburse
the Trustee upon its request for all reasonable expenses, disbursements
and advances incurred or made by the Trustee in accordance with any
provision of this Indenture (including the reasonable compensation and
the expenses and disbursements of its agents and counsel), except any
such expense, disbursement or advance as may be attributable to its
negligence or bad faith; and
(3) to indemnify each of the Trustee or any predecessor Trustee
for, and to hold it harmless against, any and all losses, damages,
claims, liabilities or expenses, including taxes (other than taxes
based upon, measured by, or determined by the income of the Trustee),
incurred without negligence or bad faith on its part, arising out of or
in connection with the acceptance or administration of this trust,
including the costs and expenses of defending itself against any claim
or liability in connection with the exercise or performance of any of
its powers or duties hereunder.
As security for the performance of the obligations of the Company under
this Section the Trustee shall have a claim prior to the Securities upon all
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property and funds held or collected by the Trustee as such, except funds held
in trust for the payment of principal of (and premium, if any) or interest on
particular Securities.
When the Trustee incurs expenses or renders services in connection with
an Event of Default specified in Section 501(5) or Section 501(6), the expenses
(including the reasonable charges and expenses of its counsel) and the
compensation for the services are intended to constitute expenses of
administration under any applicable Federal or State bankruptcy, insolvency or
other similar law.
The provisions of this Section shall survive the termination of this
Indenture.
SECTION 608. Disqualification; Conflicting Interests. The Trustee for
the Securities of any series issued hereunder shall be subject to the provisions
of Section 310(b) of the Trust Indenture Act during the period of time provided
for therein. In determining whether the Trustee has a conflicting interest as
defined in Section 310(b) of the Trust Indenture Act with respect to the
Securities of any series, there shall be excluded this Indenture with respect to
Securities of any particular series of Securities other than that series.
Nothing herein shall prevent the Trustee from filing with the Commission the
application referred to in the second to last paragraph of Section 310(b) of the
Trust Indenture Act.
SECTION 609. Corporate Trustee Required; Eligibility. There shall at
all times be a Trustee hereunder with respect to each series of Securities,
which shall be either
(i) a corporation organized and doing business under the laws
of the United States of America or of any State, authorized under such
laws to exercise corporate trust powers and subject to supervision or
examination by Federal or State authority, or
(ii) a corporation or other Person organized and doing business
under the laws of a foreign government that is permitted to act as
Trustee pursuant to a rule, regulation or order of the Commission,
authorized under such laws to exercise corporate trust powers, and
subject to supervision or examination by authority of such foreign
government or a political subdivision thereof substantially equivalent
to supervision or examination applicable to United States institutional
trustees,
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47
in either case having a combined capital and surplus of at least $50,000,000. If
such corporation publishes reports of condition at least annually, pursuant to
law or to the requirements of the aforesaid supervising or examining authority,
then for the purposes of this Section, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. Neither the Company nor any
person directly or indirectly controlling, controlled by, or under common
control with the Company shall serve as trustee for the Securities of any series
issued hereunder. If at any time the Trustee with respect to any series of
Securities shall cease to be eligible in accordance with the provisions of this
Section, it shall resign immediately in the manner and with the effect specified
in Section 610.
SECTION 610. Resignation and Removal; Appointment of Successor. (a) No
resignation or removal of the Trustee and no appointment of a successor Trustee
pursuant to this Article shall become effective until the acceptance of
appointment by the successor Trustee under Section 611.
(b) The Trustee may resign with respect to any series of Securities at
any time by giving written notice thereof to the Company. If an instrument of
acceptance by a successor Trustee shall not have been delivered to the Trustee
within 30 days after the giving of such notice of resignation, the resigning
Trustee may petition any court of competent jurisdiction for the appointment of
a successor Trustee.
(c) The Trustee may be removed with respect to any series of Securities
at any time by Act of the Holders of a majority in principal amount of the
Outstanding Securities of that series, delivered to the Trustee and to the
Company. If an instrument of acceptance by a successor Trustee shall not have
been delivered to the Trustee within 30 days after the giving of such notice of
removal, the Trustee subject to removal may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 310(b) of the
Trust Indenture Act pursuant to Section 608 with respect to any series
of Securities after written request therefor by the Company or by any
Securityholder who has been a bona fide Holder of a Security of that
series for at least 6 months, or
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(2) the Trustee shall cease to be eligible under Section 609
with respect to any series of Securities and shall fail to resign after
written request therefor by the Company or by any such Securityholder,
or
(3) the Trustee shall become incapable of acting with respect
to any series of Securities, or
(4) the Trustee shall be adjudged a bankrupt or insolvent or a
receiver of the Trustee or of its property shall be appointed or any
public officer shall take charge or control of the Trustee or of its
property or affairs for the purpose of rehabilitation, conservation or
liquidation,
then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee, with respect to the series, or in the case of Clause (4), with respect
to all series, or (ii) subject to Section 514, any Securityholder who has been a
bona fide Holder of a Security of such series for at least 6 months may, on
behalf of himself and all others similarly situated, petition any court of
competent jurisdiction for the removal of the Trustee and the appointment of a
successor Trustee with respect to the series, or, in the case of Clause (4),
with respect to all series.
(e) If the Trustee shall resign, be removed or become incapable of
acting with respect to any series of Securities, or if a vacancy shall occur in
the office of the Trustee with respect to any series of Securities for any
cause, the Company, by a Board Resolution, shall promptly appoint a successor
Trustee for that series of Securities. If, within one year after such
resignation, removal or incapacity, or the occurrence of such vacancy, a
successor Trustee with respect to such series of Securities shall be appointed
by Act of the Holders of a majority in principal amount of the Outstanding
Securities of such series delivered to the Company and the retiring Trustee, the
successor Trustee so appointed shall, forthwith upon its acceptance of such
appointment, become the successor Trustee with respect to such series and
supersede the successor Trustee appointed by the Company with respect to such
series. If no successor Trustee with respect to such series shall have been so
appointed by the Company or the Securityholders of such series and accepted
appointment in the manner hereinafter provided, subject to Section 514, any
Securityholder who has been a bona fide Holder of a Security of that series for
at least 6 months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the appointment of a successor
Trustee with respect to such series.
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(f) The Company shall give notice of each resignation and each
removal of the Trustee with respect to any series and each appointment
of a successor Trustee with respect to any series by mailing written
notice of such event by first-class mail, postage prepaid, to the
Holders of Securities of that series as their names and addresses
appear in the Security Register. Each notice shall include the name of
the successor Trustee and the address of its principal Corporate Trust
Office.
SECTION 611. Acceptance of Appointment by Successor. Every successor
Trustee appointed hereunder shall execute, acknowledge and deliver to the
Company and to the predecessor Trustee an instrument accepting such appointment,
and thereupon the resignation or removal of the predecessor Trustee shall become
effective with respect to any series as to which it is resigning or being
removed as Trustee, and such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the predecessor Trustee with respect to any such series; but, on request of
the Company or the successor Trustee, such predecessor Trustee shall, upon
payment of its reasonable charges, if any, execute and deliver an instrument
transferring to such successor Trustee all the rights, powers and trusts of the
predecessor Trustee, and shall duly assign, transfer and deliver to such
successor Trustee all property and money held by such predecessor Trustee
hereunder with respect to all or any such series, subject nevertheless to its
lien, if any, provided for in Section 607. Upon request of any such successor
Trustee, the Company shall execute any and all instruments for more fully and
certainly vesting in and confirming to such successor Trustee all such rights,
powers and trusts.
In case of the appointment hereunder of a successor Trustee with
respect to the Securities of one or more (but not all) series, the Company, the
predecessor Trustee and each successor Trustee with respect to the Securities of
any applicable series shall execute and deliver an indenture supplemental hereto
which shall contain such provisions as shall be deemed necessary or desirable to
confirm that all the rights, powers, trusts and duties of the predecessor
Trustee with respect to the Securities of any series as to which the predecessor
Trustee is not being succeeded shall continue to be vested in the predecessor
Trustee, and shall add to or change any of the provisions of this Indenture as
shall be necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, it being understood that nothing herein or
in such supplemental indenture shall constitute such Trustees co-trustees of
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the same trust and that each such Trustee shall be Trustee of a trust or trusts
hereunder separate and apart from any trust or trusts hereunder administered by
any other such Trustee.
No successor Trustee with respect to any series of Securities shall
accept its appointment unless at the time of such acceptance such successor
Trustee shall be qualified and eligible with respect to that series under this
Article.
SECTION 612. Merger, Conversion, Consolidation or Succession to
Business. Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto. In case any Securities shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Securities so authenticated with the same
effect as if such successor Trustee had itself authenticated such Securities.
SECTION 613. Preferential Collection of Claims Against Company. (a)
Subject to Subsection (b) of this Section, if the Trustee shall be or shall
become a creditor, directly or indirectly, secured or unsecured, of the Company
within 3 months prior to a default, as defined in Subsection (c) of this
Section, or subsequent to such a default, then, unless and until such default
shall be cured, the Trustee shall set apart and hold in a special account for
the benefit of the Trustee individually, the Holders of the Securities and the
holders of other indenture securities (as defined in Subsection (c) of this
Section):
(1) an amount equal to any and all reduction in the amount due
and owing upon any claim as such creditor in respect of principal or
interest, effected after the beginning of such 3-month period and valid
as against the Company and its other creditors, except any such
reduction resulting from the receipt or disposition of any property
described in paragraph (2) of this Subsection, or from the exercise of
any right of set-off which the Trustee could have exercised if a
petition in bankruptcy had been filed by or against the Company upon
the date of such default; and
(2) all property received by the Trustee in respect of any
claim as such creditor, either as security therefor, or in satisfaction
or composition
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thereof, or otherwise, after the beginning of such 3-month period, or an amount
equal to the proceeds of any such property, if disposed of, subject, however, to
the rights, if any, of the Company and its other creditors in such property or
such proceeds.
Nothing herein contained, however, shall affect the right of the Trustee
(A) to retain for its own account (i) payments made on account
of any such claim by any Person (other than the Company) who is liable
thereon, and (ii) the proceeds of the bona fide sale of any such claim
by the Trustee to a third person, and (iii) distributions made in cash,
securities or other property in respect of claims filed against the
Company in bankruptcy or receivership or in proceedings for
reorganization pursuant to the Federal Bankruptcy Act or applicable
State law;
(B) to realize, for its own account, upon any property held by
it as security for any such claim, if such property was so held prior
to the beginning of such 3-month period;
(C) to realize, for its own account, but only to the extent of
the claim hereinafter mentioned, upon any property held by it as
security for any such claim, if such claim was created after the
beginning of such 3-month period and such property was received as
security therefor simultaneously with the creation thereof, and if the
Trustee shall sustain the burden of proving that at the time such
property was so received the Trustee had no reasonable cause to believe
that a default as defined in Subsection (c) of this Section would occur
within 3 months; or
(D) to receive payment on any claim referred to in paragraph
(B) or against the release of any property held as security for such
claim as provided in paragraph (B) or (C), as the case may be, to the
extent of the fair value of such property.
For the purposes of paragraphs (B), (C) and (D), property substituted
after the beginning of such 3-month period for property held as security at the
time of such substitution shall, to the extent of the fair value of the property
released, have the same status as the property released, and, to the extent that
any claim referred to in any of such paragraphs is created in renewal of or in
substitution for or for the purpose of repaying or refunding any pre-existing
claim of the Trustee as such creditor, such claim shall have the same status as
such pre-existing claim.
If the Trustee shall be required to account, the funds and property
held in such special account and the proceeds thereof shall be apportioned
between the Trustee, the Securityholders and the holders of other indenture
securities in such manner that the Trustee, the Securityholders and the holders
of other
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indenture securities realize, as a result of payments from such special account
and payments of dividends on claims filed against the Company in bankruptcy or
receivership or in proceedings for reorganization pursuant to the Federal
Bankruptcy Act or applicable State law, the same percentage of their respective
claims, figured before crediting to the claim of the Trustee anything on account
of the receipt by it from the Company of the funds and property in such special
account and before crediting to the respective claims of the Trustee and the
Securityholders and the holders of other indenture securities dividends on
claims filed against the Company in bankruptcy or receivership or in proceedings
for reorganization pursuant to the Federal Bankruptcy Act or applicable State
law, but after crediting thereon receipts on account of the indebtedness
represented by their respective claims from all sources other than from such
dividends and from the funds and property so held in such special account. As
used in this paragraph, with respect to any claim, the term "dividends" shall
include any distribution with respect to such claim, in bankruptcy or
receivership or proceedings for reorganization pursuant to the Federal
Bankruptcy Act or applicable State law, whether such distribution is made in
cash, securities, or other property, but shall not include any such distribution
with respect to the secured portion, if any, of such claim. The court in which
such bankruptcy, receivership or proceedings for reorganization is pending shall
have jurisdiction (i) to apportion between the Trustee and the Securityholders
and the holders of other indenture securities, in accordance with the provisions
of this paragraph, the funds and property held in such special account and
proceeds thereof, or (ii) in lieu of such apportionment, in whole or in part, to
give to the provisions of this paragraph due consideration in determining the
fairness of the distributions to be made to the Trustee and the Securityholders
and the holders of other indenture securities with respect to their respective
claims, in which event it shall not be necessary to liquidate or to appraise the
value of any securities or other property held in such special account or as
security for any such claim, or to make a specific allocation of such
distributions as between the secured and unsecured portions of such claims, or
otherwise to apply the provisions of this paragraph as a mathematical formula.
Any Trustee which has resigned or been removed after the beginning of
such 3-month period shall be subject to the provisions of this Subsection as
though such resignation or removal had not occurred. If any Trustee has resigned
or been removed prior to the beginning of such 3-month period, it
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shall be subject to the provisions of this Subsection if and only if the
following conditions exist:
(i) the receipt of property or reduction of claim, which would
have given rise to the obligation to account, if such Trustee had
continued as Trustee, occurred after the beginning of such 3-month
period; and
(ii) such receipt of property or reduction of claim occurred
within 3 months after such resignation or removal.
(b) There shall be excluded from the operation of Subsection (a) of this
Section a creditor relationship arising from
(1) the ownership or acquisition of securities issued under any
indenture, or any security or securities having a maturity of one year
or more at the time of acquisition by the Trustee;
(2) advances authorized by a receivership or bankruptcy court of
competent jurisdiction, or by this Indenture, for the purpose of
preserving any property which shall at any time be subject to the lien
of this Indenture or of discharging tax liens or other prior liens or
encumbrances thereon, if notice of such advances and of the
circumstances surrounding the making thereof is given to the
Securityholders at the time and in the manner provided in this
Indenture;
(3) disbursements made in the ordinary course of business in
the capacity of trustee under an indenture, transfer agent, registrar,
custodian, paying agent, fiscal agent or depository, or other similar
capacity;
(4) an indebtedness created as a result of services rendered or
premises rented; or an indebtedness created as a result of goods or
securities sold in a cash transaction as defined in Subsection (c) of
this Section;
(5) the ownership of stock or of other securities of a
corporation organized under the provisions of Section 25(a) of the
Federal Reserve Act, as amended, which is directly or indirectly a
creditor of the Company; or
(6) the acquisition, ownership, acceptance or negotiation of
any drafts, bills of exchange, acceptances or obligations which fall
within the classification of self-liquidating paper as defined in
Subsection (c) of this Section.
(c) For the purposes of this Section only:
(1) The term "default" means any failure to make payment in
full of the principal of or interest on any of the Securities or upon
the other indenture securities when and as such principal or interest
becomes due and payable.
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(2) The term "other indenture securities" means securities upon
which the Company is an obligor outstanding under any other indenture
(i) under which the Trustee is also trustee, (ii) which contains
provisions substantially similar to the provisions of this Section, and
(iii) under which a default exists at the time of the apportionment of
the funds and property held in such special account.
(3) The term "cash transaction" means any transaction in which
full payment for goods or securities sold is made within 7 days after
delivery of the goods or securities in currency or in checks or other
orders drawn upon banks or bankers and payable upon demand.
(4) The term "self-liquidating paper" means any draft, bill of
exchange, acceptance or obligation which is made, drawn, negotiated or
incurred by the Company for the purpose of financing the purchase,
processing, manufacturing, shipment, storage or sale of goods, wares or
merchandise and which is secured by documents evidencing title to,
possession of, or a lien upon, the goods, wares or merchandise or the
receivables or proceeds arising from the sale of the goods, wares or
merchandise previously constituting the security, provided the security
is received by the Trustee simultaneously with the creation of the
creditor relationship with the Company arising from the making,
drawing, negotiating or incurring of the draft, bill of exchange,
acceptance or obligation.
(5) The term "Company" means any obligor upon the Securities.
SECTION 614. Appointment of Authenticating Agent. At any time when any
of the Securities remain Outstanding the Trustee, with the approval of the
Company, may appoint an Authenticating Agent or Agents with respect to one or
more series of Securities which shall be authorized to act on behalf of the
Trustee to authenticate Securities of such series issued upon exchange,
registration of transfer or partial redemption thereof or pursuant to Section
306, and Securities so authenticated shall be entitled to the benefits of this
Indenture and shall be valid and obligatory for all purposes as if authenticated
by the Trustee hereunder. Wherever reference is made in this Indenture to the
authentication and delivery of Securities by the Trustee or the Trustee's
certificate of authentication, such reference shall be deemed to include
authentication and delivery on behalf of the Trustee by an Authenticating Agent
and a certificate of authentication executed on behalf of the Trustee by an
Authenticating Agent. Each Authenticating Agent shall be acceptable to the
Company and shall at all times be a corporation organized and doing business
under the laws of the United States of America, any State thereof or the
District of Columbia, authorized under such laws to act as an Authenticating
Agent, having a combined capital and surplus of not less than $50,000,000 and,
if
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other than the Company itself, subject to supervision or examination by Federal
or State authority. If such Authenticating Agent publishes reports of condition
at least annually, pursuant to law or to the requirements of said supervising or
examining authority, then for the purposes of this Section, the combined capital
and surplus of such Authenticating Agent shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. If at any time an Authenticating Agent shall cease to be eligible in
accordance with the provisions of this Section, such Authenticating Agent shall
resign immediately in the manner and with the effect specified in this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper or any further
act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and, if other than the Company, to the Company. The
Trustee may at any time terminate the agency of an Authenticating Agent by
giving written notice thereof to such Authenticating Agent and, if other than
the Company, to the Company. Upon receiving such a notice of resignation or upon
such a termination, or in case at any time such Authenticating Agent shall cease
to be eligible in accordance with the provisions of this Section, the Trustee,
with the approval of the Company, may appoint a successor Authenticating Agent
which shall be acceptable to the Company and shall mail written notice of such
appointment by first-class mail, postage prepaid, to all Holders of Securities
of the series with respect to which such Authenticating Agent will serve, as
their names and addresses appear in the Security Register. Any successor
Authenticating Agent upon acceptance of its appointment hereunder shall become
vested with all the rights, powers and duties of its predecessor hereunder, with
like effect as if originally named as an Authenticating Agent. No successor
Authenticating Agent shall be appointed unless eligible under the provisions of
this Section.
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The Company agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section.
If an appointment with respect to one or more series is made pursuant
to this Section, the Securities of such series may have endorsed thereon, in
addition to the Trustee's certificate of authentication, an alternate
certificate of authentication in the following form:
This is one of the Securities referred to in the within-mentioned
Indenture.
The Bank of New York,
as Trustee,
By:
-------------------------
As Authenticating Agent
By:
-------------------------
Authorized Officer
ARTICLE SEVEN
SECURITYHOLDERS' LISTS AND REPORTS BY
TRUSTEE AND COMPANY
SECTION 701. Company To Furnish Trustee Names and Addresses of
Securityholders. The Company will furnish or cause to be furnished to the
Trustee
(1) semi-annually, not later than December 1 and June 1 in each
year in such form as the Trustee may reasonably require, a list of the
names and addresses of the Holders of Securities of each series as of a
date not more than 15 days prior to the date such list is furnished,
and
(2) at such other times as the Trustee may request in writing,
within 30 days after the receipt by the Company of any such request, a
list of similar form and content as of a date not more than 15 days
prior to the date such list is furnished,
excluding from any such list names and addresses received by the Trustee in its
capacity as Security Registrar.
<PAGE> 66
57
SECTION 702. Preservation of Information; Communications to
Securityholders. (a) The Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders of Securities
contained in the most recent list furnished to the Trustee as provided in
Section 701 and the names and addresses of Holders of Securities received by the
Trustee in its capacity as Security Registrar. The Trustee may destroy any list
furnished to it as provided in Section 701 upon receipt of a new list so
furnished.
(b) If 3 or more Holders of Securities of any series (hereinafter
referred to as "applicants") apply in writing to the Trustee, and furnish to the
Trustee reasonable proof that each such applicant has owned a Security of such
series for a period of at least 6 months preceding the date of such application,
and such application states that the applicants desire to communicate with other
Holders of Securities of such series or with the Holders of all Securities with
respect to their rights under this Indenture or under such Securities and is
accompanied by a copy of the form of proxy or other communication which such
applicants propose to transmit, then the Trustee shall, within 5 Business Days
after the receipt of such application, at its election, either
(i) afford such applicants access to the information preserved
at the time by the Trustee in accordance with Section 702(a), or
(ii) inform such applicants as to the approximate number of
Holders of Securities of such series or all Securities, as the case may
be, whose names and addresses appear in the information preserved at
the time by the Trustee in accordance with Section 702(a), and as to
the approximate cost of mailing to such Securityholders the form of
proxy or other communication, if any, specified in such application.
If the Trustee shall elect not to afford such applicants access to such
information, the Trustee shall, upon the written request of such applicants,
mail to each Holder of a Security of such series or to all Securityholders, as
the case may be, whose names and addresses appear in the information preserved
at the time by the Trustee in accordance with Section 702(a), a copy of the form
of proxy or other communication which is specified in such request, with
reasonable promptness after a tender to the Trustee of the material to be mailed
and of payment, or provision for the payment, of the reasonable expenses of
mailing, unless, within 5 days after such tender, the Trustee shall mail to such
applicants and file with the Commission, together with a copy of the material to
be mailed, a written statement to the effect that, in the opinion
<PAGE> 67
58
of the Trustee, such mailing would be contrary to the best interests of the
Holders of Securities of such series or all Securityholders, as the case may be,
or would be in violation of applicable law. Such written statement shall specify
the basis of such opinion. If the Commission, after opportunity for a hearing
upon the objections specified in the written statement so filed, shall enter an
order refusing to sustain any of such objections or if, after the entry of an
order sustaining one or more of such objections, the Commission shall find,
after notice and opportunity for hearing, that all the objections so sustained
have been met and shall enter an order so declaring, the Trustee shall mail
copies of such material to all Securityholders of such series or all
Securityholders, as the case may be, with reasonable promptness after the entry
of such order and the renewal of such tender, otherwise the Trustee shall be
relieved of any obligation or duty to such applicants respecting their
application.
(c) Every Holder of Securities, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company nor the Trustee
shall be held accountable by reason of the disclosure of any such information as
to the names and addresses of the Holders of Securities in accordance with
Section 702(b), regardless of the source from which such information was
derived, and that the Trustee shall not be held accountable by reason of mailing
any material pursuant to a request made under Section 702(b).
SECTION 703. Reports by Trustee. (a) The term "reporting date" as used
in this Section means May 15. Within 60 days after the reporting date in each
year, beginning in 1992, the Trustee shall transmit by mail to all
Securityholders, as their names and addresses appear in the Security Register, a
brief report dated as of such reporting date with respect to any of the
following events which may have occurred during the twelve months preceding the
date of such report (but if no such event has occurred within such period, no
report need be transmitted):
(1) any change to its eligibility under Section 609 and its
qualifications under Section 608;
(2) the creation of or any material change to a relationship
specified in Section 310(b)(1) through Section 310(b)(10) of the Trust
Indenture Act;
(3) the character and amount of any advances (and if the
Trustee elects so to state, the circumstances surrounding the making
thereof) made by the Trustee (as such) which remain unpaid on the date
of such report, and for the reimbursement of which it claims or may
claim a lien
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or charge, prior to that of Securities of any series, on any property or funds
held or collected by it as Trustee, except that the Trustee shall not be
required (but may elect) to report such advances if such advances so remaining
unpaid aggregate not more than 1/2 of 1% of the principal amount of the
Securities of such series Outstanding on the date of such report;
(4) any change to the amount, interest rate and maturity date
of all other indebtedness owing by the Company (or by any other obligor
on the Securities) to the Trustee in its individual capacity, on the
date of such report, with a brief description of any property held as
collateral security therefor, except an indebtedness based upon a
creditor relationship arising in any manner described in Section
613(b)(2), (3), (4), or (6);
(5) any change to the property and funds, if any, physically in
the possession of the Trustee as such on the date of such report;
(6) any additional issue of Securities which the Trustee has
not previously reported; and
(7) any action taken by the Trustee in the performance of its
duties hereunder which it has not previously reported and which in its
opinion materially affects the Securities, except action in respect of
a default, notice of which has been or is to be withheld by the Trustee
in accordance with Section 602.
(b) The Trustee shall transmit by mail to all Securityholders, as their
names and addresses appear in the Security Register, a brief report with respect
to the character and amount of any advances (and if the Trustee elects so to
state, the circumstances surrounding the making thereof) made by the Trustee (as
such) since the date of the last report transmitted pursuant to Subsection (a)
of this Section (or if no such report has yet been so transmitted, since the
date of execution of this instrument) for the reimbursement of which it claims
or may claim a lien or charge, prior to that of the Securities of any series, on
property or funds held or collected by it as Trustee, and which it has not
previously reported pursuant to this Subsection, except that the Trustee shall
not be required (but may elect) to report such advances if such advances
remaining unpaid at any time aggregate 10% or less of the principal amount of
the Securities Outstanding of such series at such time, such report to be
transmitted within 90 days after such time.
(c) A copy of each such report shall, at the time of such transmission
to Securityholders, be furnished to the Company and be filed by the Trustee with
each stock exchange upon which the Securities are listed, and also with the
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60
Commission. The Company will promptly notify the Trustee when the Securities
are listed on any stock exchange.
SECTION 704. Reports by Company. The Company will
(1) file with the Trustee, within 15 days after the Company is
required to file the same with the Commission, copies of the annual
reports and of the information, documents and other reports (or copies
of such portions of any of the foregoing as the Commission may from
time to time by rules and regulations prescribe) which the Company may
be required to file with the Commission pursuant to Section 13 or
Section 15(d) of the Securities Exchange Act of 1934, or, if the
Company is not required to file information, documents or reports
pursuant to either of said Sections, then it will file with the Trustee
and the Commission, in accordance with rules and regulations prescribed
from time to time by the Commission, such of the supplementary and
periodic information, documents and reports which may be required
pursuant to Section 13 of the Securities Exchange Act of 1934 in
respect of a security listed and registered on a national securities
exchange as may be prescribed from time to time in such rules and
regulations;
(2) file with the Trustee and the Commission, in accordance
with rules and regulations prescribed from time to time by the
Commission, such additional information, documents and reports with
respect to compliance by the Company with the conditions and covenants
of this Indenture as may be required from time to time by such rules
and regulations; and
(3) transmit by mail to all Securityholders, as their names and
addresses appear in the Security Register, within 30 days after the
filing thereof with the Trustee, such summaries of any information,
documents and reports required to be filed by the Company pursuant to
paragraphs (1) and (2) of this Section as may be required by rules and
regulations prescribed from time to time by the Commission.
<PAGE> 70
61
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE OR TRANSFER
SECTION 801. When Company May Merge or Transfer Assets. The Company, in
a single transaction or through a series of related transactions, shall not
consolidate with or merge with or into any other Person or transfer (by lease,
assignment, sale or otherwise) all or substantially all of its properties and
assets to another Person or group of affiliated Persons, unless:
(a) either (1) the Company shall be the continuing corporation
or (2) the Person (if other than the Company) formed by such
consolidation or into which the Company is merged or to which all or
substantially all of the properties and assets of the Company are
transferred (i) shall be a corporation, partnership or trust organized
and validly existing under the laws of the United States or any State
thereof or the District of Columbia and (ii) shall expressly assume, by
an indenture supplemental hereto, executed and delivered to the
Trustee, in form satisfactory to the Trustee, all of the obligations of
the Company under the Securities and this Indenture and the performance
of every covenant of this Indenture on the part of the Company to be
performed or observed;
(b) immediately after giving effect to such transaction, and
the assumption contemplated by clause (a) above, no Event of Default,
and no event which, after notice or lapse of time, or both, would
become an Event of Default, shall have occurred and be continuing; and
(c) the Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that such
consolidation, merger or transfer and, if a supplemental indenture is
required in connection with such transaction, such supplemental
indenture, comply with this Article 8 and that all conditions precedent
herein provided for relating to such transaction have been satisfied.
For purposes of the foregoing, the transfer (by lease, assignment,
sale or otherwise) of the properties and assets of one or more Subsidiaries
(other than to the Company or another wholly owned Subsidiary), which, if such
assets were owned by the Company, would constitute all or substantially all of
the properties and assets of the Company, shall be deemed to be the transfer of
all or substantially all of the properties and assets of the Company.
The successor Person formed by such consolidation or into which the
Company is merged or the successor Person to which such conveyance, transfer or
lease is made shall succeed to, and be substituted for, and may exercise
<PAGE> 71
62
every right and power of, the Company under this Indenture with the same effect
as if such successor had been named as the Company herein, and thereafter,
except in the case of a lease of its properties and assets substantially as an
entirety, the Company shall be discharged and released from all obligations and
covenants under this Indenture and the Securities. The Trustee shall enter into
a supplemental indenture to evidence the succession and substitution of such
successor Person and such discharge and release of the Company.
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without Consent of
Securityholders. Without the consent of the Holders of any Securities, the
Company, when authorized by a Board Resolution, and the Trustee, at any time
and from time to time, may enter into one or more indentures supplemental
hereto, in form satisfactory to the Trustee, for any of the following purposes:
(1) to evidence the succession of another corporation to the
Company, and the assumption by any such successor of the covenants of
the Company herein and in the Securities contained; or
(2) to add to the covenants of the Company, or to surrender any
right or power herein conferred upon the Company, for the benefit of
the Holders of the Securities of any or all series (and if such
covenants or the surrender of such right or power are to be for the
benefit of less than all series of Securities, stating that such
covenants are expressly being included or such surrenders are expressly
being made solely for the benefit of one or more specified series); or
(3) to cure any ambiguity, to correct or supplement any
provision herein which may be inconsistent with any other provision
herein, or to make any other provisions with respect to matters or
questions arising under this Indenture; or
(4) to add to this Indenture such provisions as may be
expressly permitted by the TIA, excluding, however, the provisions
referred to in Section 316(a)(2) of the TIA as in effect at the date as
of which this instrument was executed or any corresponding provision in
any similar Federal statute hereafter enacted; or
(5) to establish any form of Security, as provided in Article
Two, and to provide for the issuance of any series of Securities as
provided in Article Three and to set forth the terms thereof, and/or to
add to the rights of the Holders of the Securities of any series; or
<PAGE> 72
63
(6) to evidence and provide for the acceptance of appointment
by another corporation as a successor Trustee hereunder with respect to
one or more series of Securities and to add to or change any of the
provisions of this Indenture as shall be necessary to provide for or
facilitate the administration of the trusts hereunder by more than one
Trustee, pursuant to Section 611; or,
(7) to add any additional Events of Default in respect of the
Securities of any or all series (and if such additional Events of
Default are to be in respect of less than all series of Securities,
stating that such Events of Default are expressly being included solely
for the benefit of one or more specified series); or
(8) to provide for the issuance of Securities in coupon as well
as fully registered form.
No supplemental indenture for the purposes identified in Clauses (2),
(3), (5) or (7) above may be entered into if to do so would adversely affect
the interest of the Holders of Securities of any series.
SECTION 902. Supplemental Indentures with Consent of Securityholders.
With the consent of the Holders of not less than a majority in principal amount
of the Outstanding Securities of each series affected by such supplemental
indenture or indentures, by Act of said Holders delivered to the Company and the
Trustee, the Company, when authorized by a Board Resolution, and the Trustee may
enter into an indenture or indentures supplemental hereto for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of modifying in any manner the rights of the
Holders of the Securities of each such series under this Indenture; provided,
however, that no such supplemental indenture shall, without the consent of the
Holder of each Outstanding Security affected thereby,
(1) change the Maturity of the principal of, or the Stated
Maturity of any premium on, or any installment of interest on, any
Security, or reduce the principal amount thereof or the interest or any
premium thereon, or change the method of computing the amount of
principal thereof or interest thereon on any date or change any Place
of Payment where any Security or any premium or interest thereon is
payable, or impair the right to institute suit for the enforcement of
any such payment on or after the Maturity or the Stated Maturity, as
the case may be, thereof (or, in the case of redemption or repayment,
on or after the Redemption Date or the Repayment Date, as the case may
be); or
(2) reduce the percentage in principal amount of the
Outstanding Securities of any series, the consent of whose Holders is
required for any
<PAGE> 73
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such supplemental indenture, or the consent of whose Holders is
required for any waiver of compliance with certain provisions of this
Indenture or certain defaults hereunder and their consequences,
provided for in this Indenture; or
(3) modify any of the provisions of this Section, Section 513
or Section 1008, except to increase any such percentage or to provide
that certain other provisions of this Indenture cannot be modified or
waived without the consent of the Holder of each Outstanding Security
affected thereby.
A supplemental indenture which changes or eliminates any covenant or
other provision of this Indenture which has expressly been included solely for
the benefit of one or more particular series of Securities, or which modifies
the rights of the Holders of Securities of such series with respect to such
covenant or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.
It shall not be necessary for any Act of Securityholders under this
Section to approve the particular form of any proposed supplemental indenture,
but it shall be sufficient if such Act shall approve the substance thereof.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Persons entitled to consent to any indenture
supplemental hereto. If a record date is fixed, the Holders on such record date,
or their duly designated proxies, and only such Persons, shall be entitled to
consent to such supplemental indenture, whether or not such Holders remain
Holders after such record date; provided, that unless such consent shall have
become effective by virtue of the requisite percentage having been obtained
prior to the date which is 90 days after such record date, any such consent
previously given shall automatically and without further action by any Holder be
canceled and of no further effect.
SECTION 903. Execution of Supplemental Indentures. In executing, or
accepting the additional trusts created by, any supplemental indenture permitted
by this Article or the modifications thereby of the trusts created by this
Indenture, the Trustee shall be entitled to receive, and (subject to Section
601) shall be fully protected in relying upon, an Opinion of Counsel stating
that the execution of such supplemental indenture is authorized or permitted by
this Indenture. The Trustee may, but shall not be obligated to, enter into any
such supplemental indenture which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
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SECTION 904. Effect of Supplemental Indentures. Upon the execution of
any supplemental indenture under this Article, this Indenture shall be modified
in accordance therewith, and such supplemental indenture shall form a part of
this Indenture for all purposes; and every Holder of Securities theretofore or
thereafter authenticated and delivered hereunder shall be bound thereby to the
extent provided therein.
SECTION 905. Conformity with Trust Indenture Act. Every supplemental
indenture executed pursuant to this Article shall conform to the requirements of
TIA as then in effect.
SECTION 906. Reference in Securities to Supplemental Indentures.
Securities authenticated and delivered after the execution of any supplemental
indenture pursuant to this Article may, and shall if required by the Trustee,
bear a notation in form approved by the Trustee as to any matter provided for in
such supplemental indenture. If the Company shall so determine, new Securities
so modified as to conform, in the opinion of the Trustee and the Board of
Directors, to any such supplemental indenture may be prepared and executed by
the Company and authenticated and delivered by the Trustee in exchange for
Outstanding Securities.
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal, Premium and Interest. With respect
to each series of Securities, the Company will duly and punctually pay the
principal of (and premium, if any) and interest on such Securities in accordance
with their terms and this Indenture, and will duly comply with all the other
terms, agreements and conditions contained in, or made in the Indenture for the
benefit of, the Securities of such series.
SECTION 1002. Maintenance of Office or Agency. The Company will
maintain an office or agency in each Place of Payment where Securities may be
presented or surrendered for payment, where Securities may be surrendered for
transfer or exchange and where notices and demands to or upon the Company in
respect of the Securities and this Indenture may be served. The Company will
give prompt written notice to the Trustee of the location, and of any change in
the location, of such office or agency. If at any time the Company shall fail to
maintain such office or agency or shall fail to furnish the Trustee
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with the address thereof, such presentations, surrenders, notices and demands
may be made or served at the principal Corporate Trust Office of the Trustee,
Attention: Corporate Trust Trustee Administration, and the Company hereby
appoints the Trustee its agent to receive all such presentations, surrenders,
notices and demands.
SECTION 1003. Money for Security Payments to be Held in Trust. If
the Company shall at any time act as its own Paying Agent for any series of
Securities, it will, on or before each due date of the principal of (and
premium, if any) or interest on, any of the Securities of such series,
segregate and hold in trust for the benefit of the Persons entitled thereto a
sum sufficient to pay the principal (and premium, if any) or interest so
becoming due until such sums shall be paid to such Persons or otherwise
disposed of as herein provided, and will promptly notify the Trustee of its
action or failure to act.
Whenever the Company shall have one or more Paying Agents for any
series of Securities, it will, prior to each due date of the principal of (and
premium, if any) or interest on, any Securities of such series, deposit with a
Paying Agent a sum sufficient to pay the principal (and premium, if any) or
interest so becoming due, such sum to be held in trust for the benefit of the
Persons entitled to such principal (and premium, if any) or interest, and
(unless such Paying Agent is the Trustee) the Company will promptly notify the
Trustee of its action or failure so to act.
The Company will cause each Paying Agent other than the Trustee for
any series of Securities to execute and deliver to the Trustee an instrument in
which such Paying Agent shall agree with the Trustee, subject to the provisions
of this Section, that such Paying Agent will
(1) hold all sums held by it for the payment of principal of
(and premium, if any) or interest on Securities of such series in trust
for the benefit of the Persons entitled thereto until such sums shall
be paid to such Persons or otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the Company (or
any other obligor upon the Securities of such series) in the making of
any such payment of principal (and premium, if any) or interest on the
Securities of such series; and
(3) at any time during the continuance of any such default,
upon the written request of the Trustee, forthwith pay to the Trustee
all sums so held in trust by such Paying Agent.
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The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture with respect to any series of
Securities or for any other purpose, pay, or by Company Order direct any Paying
Agent to pay, to the Trustee all sums held in trust by the Company or such
Paying Agent in respect of each and every series of Securities as to which it
seeks to discharge this Indenture or, if for any other purpose, all sums so
held in trust by the Company in respect of all Securities, such sums to be held
by the Trustee upon the same trusts as those upon which such sums were held by
the Company or such Paying Agent, and, upon such payment by any Paying Agent to
the Trustee, such Paying Agent shall be released from all further liability
with respect to such money.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of (and premium, if
any) or interest on any Security of any series and remaining unclaimed for two
years after such principal (and premium, if any) or interest has become due and
payable shall be paid to the Company on Company Request, or (if then held by
the Company) shall be discharged from such trust; and the Holder of such
Security shall thereafter, as an unsecured general creditor, look only to the
Company for payment thereof, and all liability of the Trustee or such Paying
Agent with respect to such trust money, and all liability of the Company as
trustee thereof, shall thereupon cease. The Trustee or such Paying Agent,
before being required to make any such repayment, may at the expense of the
Company mail to the Holders of the Securities as to which the money to be
repaid was held in trust, as their names and addresses appear in the Security
Register, a notice that such moneys remain unclaimed and that, after a date
specified in the notice, which shall not be less than 30 days from the date on
which the notice was first mailed to the Holders of the Securities as to which
the money to be repaid was held in trust, any unclaimed balance of such moneys
then remaining will be paid to the Company free of the trust formerly impressed
upon it.
SECTION 1004. Statement as to Compliance. The Company will deliver to
the Trustee, within 120 days after the end of each fiscal year, a written
statement signed by the principal executive officer, principal financial officer
or principal accounting officer of the Company stating that
(1) a review of the activities of the Company during such year
and of performance under this Indenture and under the terms of the
Securities has been made under his supervision; and
<PAGE> 77
68
(2) to the best of his knowledge, based on such review, the
Company has fulfilled all its obligations under this Indenture and has
complied with all conditions and covenants on its part contained in
this Indenture through such year, or, if there has been a default in
the fulfillment of any such obligation, covenant or condition,
specifying each such default known to him and the nature and status
thereof.
For the purpose of this Section 1004, default and compliance shall be
determined without regard to any grace period or requirement of notice provided
pursuant to the terms of this Indenture.
SECTION 1005. Legal Existence. Subject to Article Eight the Company
will do or cause to be done all things necessary to preserve and keep in full
force and effect its legal existence.
SECTION 1006. Limitation on Liens. The Company shall not create, assume
or suffer to exist any Lien upon Restricted Property to secure any debt of the
Company, any Subsidiary or any other person, or permit any Subsidiary so to do,
without making effective provision whereby the Securities then outstanding and
having the benefit of this Section shall be secured by the Lien equally and
ratably with such debt for so long as such debt shall be so secured, except that
the foregoing shall not prevent the Company or any Subsidiary from creating,
assuming or suffering to exist Liens of the following character:
(1) with respect to any series of Securities any Lien existing
on the date of issuance of the series;
(2) any Lien existing on property owned or leased by a
corporation at the time it becomes a Subsidiary;
(3) any Lien existing on property at the time of the
acquisition thereof by the Company or a Subsidiary;
(4) any Lien to secure any debt incurred prior to, at the time
of, or within 12 months after the acquisition of Restricted Property
for the purpose of financing all or any part of the purchase price
thereof and any Lien to the extent that it secures debt which is in
excess of such purchase price and for the payment of which recourse may
be had only against such Restricted Property;
(5) any Lien to secure any debt incurred prior to, at the time
of, or within 12 months after the completion of the construction and
commencement of commercial operation, alteration, repair or improvement
of Restricted Property for the purpose of financing all or any part of
the cost thereof and any Lien to the extent that it secures debt which
is in excess
<PAGE> 78
69
of such cost and for the payment of which recourse may be had only
against such Restricted Property;
(6) any Lien securing debt of a Subsidiary owing to the Company
or to another Subsidiary;
(7) any Lien in favor of the United States of America of any
State thereof or any other country, or any agency, instrumentality of
political subdivision or any or the foregoing, to secure partial,
progress, advance or other payments or performance pursuant to the
provisions of any contract or statute, or any Liens securing industrial
development, pollution control, or similar revenue bonds;
(8) any extension, renewal or replacement (or successive
extensions, renewals or replacements) in whole or in part of any Lien
referred to in clauses (1) through (7) above, so long as the principal
amount of the debt secured thereby does not exceed the principal amount
of debt so secured at the time of the extension, renewal or replacement
(except that, where an additional principal amount of debt is incurred
to provide funds for the completion of a specific project, the
additional principal amount, and any related financing costs, may be
secured by the Lien as well) and the Lien is limited to the same
property subject to the Lien so extended, renewed or replaced (plus
improvements on the property); and
(9) any Lien not permitted by clauses (1) through (8) above
securing debt which, together with the aggregate outstanding principal
amount of all other debt of the Company and its Subsidiaries owning
Restricted Property which would otherwise be subject to the foregoing
restrictions and the aggregate Value of existing Sale and Leaseback
Transactions which would be subject to the restrictions of Section 1007
but for this clause (9), does not at any time exceed 10% of
Consolidated Net Tangible Assets.
SECTION 1007. Limitation on Sale and Leasebacks. The Company shall not
enter into any Sale and Leaseback Transaction, nor permit any Subsidiary owning
Restricted Property so to do, unless either:
(1) the Company or such Subsidiary would be entitled to incur
debt, in a principal amount at least equal to the Value of such Sale
and Leaseback Transaction, which is secured by Liens on the property to
be leased (without equally and ratably securing the outstanding
Securities) because such Liens would be of such character that no
violation of any of the provisions of Section 1006 would result, or
(2) the Company during the six months immediately following the
effective date of such Sale and Leaseback Transaction causes to be
applied to (A) the acquisition of Restricted Property or (B) the
voluntary retirement of Funded Debt (whether by redemption, defeasance,
repurchase,
<PAGE> 79
70
or otherwise) an amount equal to the Value of such Sale and Leaseback
Transaction.
SECTION 1008. Waiver of Certain Covenants. Ile Company may omit in
respect of any series of Securities, in any particular instance, to comply with
any covenant or condition set forth in Sections 1006 and 1007, if before or
after the time for such compliance the Holders of at least a majority in
principal amount of the Securities at the time Outstanding of such series shall,
by Act of such Securityholders, either waive such compliance in such instance or
generally waive compliance with such covenant or condition, but no such waiver
shall extend to or affect such covenant or condition except to the extent so
expressly waived, and, until such waiver shall become effective, the obligations
of the Company and the duties of the Trustee in respect of any such covenant or
condition shall remain in full force and effect.
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 1101. Applicability of Article. The Company may reserve the
right to redeem and pay before Stated Maturity all or any part of the Securities
of any series, either by optional redemption, sinking or purchase fund or
analogous obligation or otherwise, by provision therefor in the form of Security
for such series established and approved pursuant to Section 202 and on such
terms as are specified in such form or in the indenture supplemental hereto with
respect to Securities of such series as provided in Section 301. Redemption of
Securities of any series shall be made in accordance with the terms of such
Securities and, to the extent that this Article does not conflict with such
terms, the succeeding Sections of this Article.
SECTION 1102. Election To Redeem; Notice to Trustee. The election of
the Company to redeem any Securities redeemable at the election of the Company
shall be evidenced by, or pursuant to authority granted by, a Board Resolution.
In case of any redemption at the election of the Company of less than all of the
Securities of any series, the Company shall, at least 60 days prior to the
Redemption Date fixed by the Company (unless a shorter notice shall be
satisfactory to the Trustee), notify the Trustee of such Redemption Date and of
the principal amount of Securities of such series and the Tranche (as defined in
Section 1103) to be redeemed.
<PAGE> 80
71
In the case of any redemption of Securities (i) prior to the
expiration of any restriction on such redemption provided in the terms of such
Securities or elsewhere in this Indenture, or (ii) pursuant to an election of
the Company which is subject to a condition specified in the terms of such
Securities, the Company shall furnish the Trustee with an Officers' Certificate
evidencing compliance with such restriction or condition.
SECTION 1103. Selection by Trustee of Securities To Be Redeemed. If
less than all the Securities of like tenor and terms of any series (a "Tranche")
are to be redeemed, the particular Securities to be redeemed shall be selected
not more than 60 days prior to the Redemption Date by the Trustee, from the
Outstanding Securities of such Tranche not previously called for redemption, by
such method as the Trustee shall deem fair and appropriate (other than pro rata
selection) and which may include provision for the election for redemption of
portions of the principal of Securities of such Tranche of a denomination larger
than the minimum authorized denomination for Securities of that series. Unless
otherwise provided in the terms of a particular series of Securities, the
portions of the principal of Securities so selected for partial redemption shall
be equal to the minimum authorized denomination of the Securities of such
series, or an integral multiple thereof, and the principal amount which remains
outstanding shall not be less than the minimum authorized denomination for
Securities of such series. If less than all the Securities of unlike tenor and
terms of a series are to be redeemed, the particular Tranche of Securities to be
redeemed shall be selected by the Company.
The Trustee shall promptly notify the Company in writing of the
Securities selected for redemption and, in the case of any Security selected
for partial redemption, the principal amount thereof to be redeemed.
For a purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall relate,
in the case of any Security redeemed or to be redeemed only in part, to the
portion of the principal of such Security which has been or is to be redeemed.
SECTION 1104. Notice of Redemption. Notice of redemption shall be given
by first-class mail, postage prepaid, mailed not less than 30 nor more than 60
days prior to the Redemption Date, to each holder of Securities to be redeemed,
at his address appearing in the Security Register.
<PAGE> 81
72
All notices of redemption shall state:
(1) the Redemption Date;
(2) the Redemption Price;
(3) the CUSIP number;
(4) if less than all Outstanding Securities of any series are
to be redeemed, the identification (and, in the case of partial
redemption, the respective principal amounts) of the Securities to be
redeemed, from the Holder to whom the notice is given;
(5) that on the Redemption Date the Redemption Price will
become due and payable upon each such Security, and that interest, if
any, thereon shall cease to accrue from and after said date;
(6) the place where such Securities are to be surrendered for
payment of the Redemption Price, which shall be the office or agency of
the Company in the Place of Payment; and
(7) that the redemption is on account of a sinking or purchase
fund, or other analogous obligation, if that be the case.
Notice of redemption of Securities to be redeemed at the election of
the Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company.
SECTION 1105. Deposit of Redemption Price. On or prior to any
Redemption Date, the Company shall deposit with the Trustee or with a Paying
Agent (or, if the Company is acting as its own Paying Agent, segregate and hold
in trust as provided in Section 1003) an amount of money sufficient to pay the
Redemption Price of all the Securities which are to be redeemed on that date;
provided that such amount shall be so deposited with the Trustee or Paying Agent
in time for the Trustee or Paying Agent, as the case may be, to pay such
Redemption Price in accordance with its normal procedures.
SECTION 1106. Securities Payable on Redemption Date. Notice of
Redemption having been given as aforesaid, the Securities so to be redeemed
shall, on the Redemption Date, become due and payable at the Redemption Price
therein specified and from and after such date (unless the Company shall default
in the payment of the Redemption Price) such Securities shall cease to bear
interest. Upon surrender of such Securities for redemption in accordance with
the notice, such Securities shall be paid by the Company at the Redemption
Price. Unless otherwise provided with respect to such Securities pursuant
<PAGE> 82
73
to Section 301, installments of interest the Stated Maturity of which is on or
prior to the Redemption Date shall be payable to the Holders of such Securities
registered as such on the relevant Regular Record Dates according to their
terms and the provisions of Section 307.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal shall, until paid, bear
interest from the Redemption Date at the rate borne by the Security, or as
otherwise provided in such Security.
SECTION 1107. Securities Redeemed in Part. Any Security which is to be
redeemed only in part shall be surrendered at the office or agency of the
Company in the Place of Payment with respect to that series (with, if the
Company or the Trustee so requires, due endorsement by, or a written instrument
of transfer in form satisfactory to the Company and the Trustee duly executed
by, the Holder thereof or his attorney duly authorized in writing) and the
Company shall execute and the Trustee shall authenticate and make available for
delivery to the Holder of such Security without service charge, a new Security
or Securities of the same series and Stated Maturity and of like tenor and
terms, of any authorized denomination as requested by such Holder in aggregate
principal amount equal to and in exchange for the unredeemed portion of the
principal of the Security so surrendered.
SECTION 1108. Provisions with Respect to any Sinking Funds. Unless the
form or terms of any series of Securities shall provide otherwise, in lieu of
making all or any part of any mandatory sinking fund payment with respect to
such series of Securities in cash, the Company may at its option (1) deliver to
the Trustee for cancellation any Securities of such series theretofore acquired
by the Company, or (2) receive credit for any Securities of such series (not
previously so credited) acquired by the Company (including by way of optional
redemption (pursuant to the sinking fund or otherwise) but not by way of
mandatory sinking fund redemption) and theretofore delivered to the Trustee for
cancellation, and if it does so then (i) Securities so delivered or credited
shall be credited at the applicable sinking fund Redemption Price with respect
to Securities of such series, and (ii) on or before the 60th day next preceding
each sinking fund Redemption Date with respect to such series of Securities, the
Company will deliver to the Trustee (A) an Officers' Certificate specifying the
portions of such sinking fund payment to be satisfied by payment of cash and by
delivery or credit of Securities of such series acquired by
<PAGE> 83
74
the Company, and (B) such Securities, to the extent not previously surrendered.
Such Officers' Certificate shall also state the basis for such credit and that
the Securities for which the Company elects to receive credit have not been
previously so credited and were not acquired by the Company through operation
of the mandatory sinking fund, if any, provided with respect to such Securities
and shall also state that no Event of Default with respect to Securities of
such series has occurred and is continuing. All Securities so delivered to the
Trustee shall be canceled by the Trustee and no Securities shall be
authenticated in lieu thereof.
If the sinking fund payment or payments (mandatory or optional) with
respect to any series of Securities made in cash plus any unused balance of any
preceding sinking fund payments with respect to Securities of such series made
in cash shall exceed $50,000 (or a lesser sum if the Company shall so request),
unless otherwise provided by the terms of such series of Securities, that cash
shall be applied by the Trustee on the sinking fund Redemption Date with respect
to Securities of such series next following the date of such payment to the
redemption of Securities of such series at the applicable sinking fund
Redemption Price with respect to Securities of such series, together with
accrued interest, if any, to the date fixed for redemption, with the effect
provided in Section 1106. The Trustee shall select, in the manner provided in
Section 1103, for redemption on such sinking fund Redemption Date a sufficient
principal amount of Securities of such series to utilize that cash and shall
thereupon cause notice of redemption of the Securities of such series for the
sinking fund to be given in the manner provided in Section 1104 (and with the
effect provided in Section 1106) for the redemption of Securities in part at the
option of the Company. Any sinking fund moneys not so applied or allocated by
the Trustee to the redemption of Securities of such series shall be added to the
next cash sinking fund payment with respect to Securities of such series
received by the Trustee and, together with such payment, shall be applied in
accordance with the provisions of this Section 1108. Any and all sinking fund
moneys with respect to Securities of any series held by the Trustee at the
Maturity of Securities of such series, and not held for the payment or
redemption of particular Securities of such series, shall be applied by the
Trustee, together with other moneys, if necessary, to be deposited sufficient
for the purpose, to the payment of the principal of the Securities of such
series at Maturity.
On or before each sinking fund Redemption Date provided with respect to
Securities of any series, the Company shall deposit with the Trustee cash in
<PAGE> 84
75
a sum equal to all accrued interest, if any, to the date fixed for redemption on
Securities to be redeemed on such sinking fund Redemption Date pursuant to this
Section 1108; provided that such cash shall be so deposited with the Trustee in
time for the Trustee to make the payment of such accrued interest in accordance
with its normal procedures.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed as of the day and year first above written.
LITTON INDUSTRIES, INC.,
By /s/ CAROL A. WIESNER
-----------------------------------------
Name: Carol A. Wiesner
Title: Vice President and Treasurer
[SEAL]
Attest:
/s/ VIRGINIA S. YOUNG
- ---------------------------------------
Name: Virginia S. Young
Title: Secretary
THE BANK OF NEW YORK,
as Trustee,
By /s/ LLOYD A. McKENZIE
-----------------------------------------
Name: Lloyd A. McKenzie
Title: Assistant Vice President
[SEAL]
Attest:
/s/ CHRISTINE AMBERGER
- ---------------------------------------
Name: Christine Amberger
Title: Assistant Treasurer
<PAGE> 85
76
STATE OF CALIFORNIA )
) SS:
COUNTY OF LOS ANGELES: )
On the 15th day of January, 1992, before me personally came Carol A.
Wiesner, to me personally known, who, being by me duly sworn, did depose and
say that she resides at 1450 Mira Valle, Monterey Park, California 91754; is
Vice President and Treasurer of Litton Industries, Inc., one of the parties
described in and which executed the above instrument; and that she signed her
name thereto by authority of the board of directors of Litton Industries, Inc.
/s/ B. J. BROCK
---------------------------------
B. J. Brock
[Notarial Seal]
STATE OF NEW YORK )
) SS:
COUNTY OF NEW YORK: )
On the 16th day of January, 1992, before me personally came W. T.
Cunningham, to me known, who, being by me duly sworn, did dispose and say that
he resides at Danville, N. J.; is Vice President of The Bank of New York, one of
the parties described in and which executed the above instrument; and that he
signed his name thereto by authority of the board of directors of The Bank of
New York.
/s/ MARTIN PAPADOGONAS
---------------------------------
Name
[Notarial Seal]
<PAGE> 86
[FACE OF SECURITY]
CUSIP No. 53 8021 AC0
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE
INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY
OR A NOMINEE THEREOF. THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR
A SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY
BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE
THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.
Unless this certificate is presented by an authorized
representative of The Depository Trust Company, a New York corporation ("DTC"),
to Litton Industries, Inc. or its agent for registration of transfer, exchange,
or payment, and any certificate issued is registered in the name of Cede & Co.
or in such other name as is requested by an authorized representative of DTC
(and any payment is made to Cede & Co. or to such other entity as is requested
by an authorized representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the
registered owner hereof, Cede & Co., has an interest herein.
LITTON INDUSTRIES, INC.
7.75% Debentures Due March 15, 2026
No. A-1 $150,000,000
LITTON INDUSTRIES, INC., a corporation duly organized and
existing under the laws of the State of Delaware (herein called the "Company",
which term includes any successor Person under the Indenture hereinafter
referred to), for value received, hereby promises to pay to CEDE & CO., or
registered assigns, the principal sum of One Hundred Fifty Million Dollars on
March 15, 2026, and to pay interest thereon from March 15, 1996 or from the most
recent Interest Payment Date to which interest has been paid or duly provided
for, semi-annually on March 15 and September 15 in each year, commencing
September 15, 1996, at the rate of 7.75% per annum, until the principal hereof
is paid or made available for payment. The interest so payable, and punctually
paid or duly provided for, on any Interest Payment Date will, as provided in
such Indenture, be paid to the Person in whose name this Security (or one or
more Predecessor Securities) is registered at the close of business on the
Regular Record Date for such interest, which shall be the February 28 or August
31 (whether or not a Business Day), as the case may be, next preceding such
Interest Payment Date. Any such interest not so punctually paid or duly provided
for will forthwith cease to be payable to the Holder on such Regular Record Date
and may either be paid to the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest to be fixed by the
Trustee, notice whereof shall be mailed to Holders of Securities of this series
not less than 10 days prior to such Special Record Date, or be paid at any time
in any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities of this series may be listed, and
upon such notice as may be required by such exchange, all as more fully provided
in said Indenture. Interest on the Securities of each series shall be computed
on the basis of a 360-day year of twelve 30-day months.
<PAGE> 87
Payment of the principal of (and premium, if any) and any such
interest on this Security will be made at the office or agency of the Company
maintained for that purpose in The Borough of Manhattan, The City of New York,
in such coin or currency of the United States of America as at the time of
payment is legal tender for payment of public and private debts; provided,
however, that at the option of the Company payment of interest may be made by
check mailed to the address of the Person entitled thereto as such address shall
appear in the Security Register.
Reference is hereby made to the further provisions of this
Security set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been
executed by the Trustee referred to on the reverse hereof by manual signature,
this Security shall not be entitled to any benefit under the Indenture or be
valid or obligatory for any purpose.
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<PAGE> 88
IN WITNESS WHEREOF, the Company has caused this instrument to
be duly executed.
LITTON INDUSTRIES, INC.
By /s/ Rudolph E. Lang, Jr.
---------------------------
Attest:
/s/ Jeanette M. Thomas
- ----------------------
Secretary
CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
Dated: March 19, 1996 THE BANK OF NEW YORK,
As Trustee
By /s/ Vivian Georges
-----------------------------
Authorized Signatory
-3-
<PAGE> 89
[REVERSE OF SECURITY]
This Security is one of a duly authorized issue of securities
of the Company (herein called the "Securities"), issued and to be issued in one
or more series under a Senior Indenture, dated as of December 15, 1991 (herein
called the "Indenture", which term shall have the meaning assigned to it in such
instrument), between the Company and The Bank of New York, as Trustee (herein
called the "Trustee", which term includes any successor trustee under the
Indenture), and reference is hereby made to the Indenture for a statement of the
respective rights, limitations of rights, duties and immunities thereunder of
the Company, the Trustee and the Holders of the Securities and of the terms upon
which the Securities are, and are to be, authenticated and delivered. This
Security is one of the series designated on the face hereof, limited in
aggregate principal amount to $300,000,000.
The Securities of this series are subject to redemption upon
not less than 30 days' notice by mail, in whole or in part, at the option of the
Company at any time at a Redemption Price equal to the greater of (i) 100% of
the principal amount of the Securities so redeemed or (ii) as determined by an
Independent Investment Banker, the sum of the present values of the remaining
scheduled payments of principal and interest thereon discounted to the
redemption date on a semiannual basis (assuming a 360-day year consisting of
twelve 30-day months) at the Adjusted Treasury Rate, plus, in each case, accrued
interest thereon to the Redemption Date.
"Adjusted Treasury Rate" means, with respect to any Redemption
Date, the rate per annum equal to the semiannual equivalent yield to maturity of
the Comparable Treasury Issue, assuming a price for the Comparable Treasury
Issue (expressed as a percentage of its principal amount) equal to the
Comparable Treasury Price for such Redemption Date, plus 0.10%.
"Comparable Treasury Issue" means the United States Treasury
security selected by an Independent Investment Banker as having a maturity
comparable to the remaining term of the Security to be redeemed that would be
utilized, at the time of selection and in accordance with customary financial
practice, in pricing new issues of corporate debt securities of comparable
maturity to the remaining term of such Security. "Independent Investment Banker"
means one of the Reference Treasury Dealers appointed by the Trustee after
consultation with the Company.
"Comparable Treasury Price" means, with respect to any
Redemption Date, (i) the average of the bid and asked prices for the Comparable
Treasury Issue (expressed in each case as a percentage of its principal amount)
on the third Business Day preceding such Redemption Date, as set forth in the
daily statistical release (or any successor release) published by the Federal
Reserve Bank of New York and designated "Composite 3:30 p.m. Quotations for U.S.
Government Securities" or (ii) if such release (or any successor release) is not
published or does not contain such prices on such Business Day, (A) the
Reference Treasury Dealer Quotations for such Redemption Date, after excluding
the highest and lowest such Reference Treasury Dealer Quotations, or (B) if the
Trustee obtains fewer than three such Reference Treasury Dealer Quotations, the
average of all such Quotations. "Reference Treasury Dealer Quotations" means,
with respect to each Reference Treasury Dealer and any Redemption Date, the
average, as determined by the Trustee, of the bid and asked prices for
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<PAGE> 90
the Comparable Treasury Issue (expressed in each case as a percentage of its
principal amount) quoted in writing to the Trustee by such Treasury Reference
Dealer at 5:00 p.m. on the third Business Day preceding such Redemption Date.
"Reference Treasury Dealer" means each of Goldman, Sachs &
Co., CS First Boston Corporation, Merrill Lynch, Pierce, Fenner & Smith
Incorporated and J.P. Morgan Securities Inc. and their respective successors;
provided, however, that if any of the foregoing shall cease to be a primary U.S.
Government securities dealer in New York City (a "Primary Treasury Dealer"), the
Company shall substitute therefor another Primary Treasury Dealer.
In the event of redemption of this security in part only, a
new Security or Securities of this series and of like tenor for the unredeemed
portion hereof will be issued in the name of the Holder hereof upon the
cancellation hereof.
The Indenture contains provisions for defeasance at any time
of the entire indebtedness of this Security or certain restrictive covenants
with respect to this Security, in each case upon compliance with certain
conditions set forth in the Indenture.
If an Event of Default with respect to Securities of this
series shall occur and be continuing, the principal of the Securities of this
series may be declared due and payable in the manner and with the effect
provided in the Indenture.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Company and the rights of the Holders of the Securities of
each series to be affected under the Indenture at any time by the Company and
the Trustee with the consent of the Holders of a majority in principal amount of
the Securities at the time Outstanding of each series to be affected. The
Indenture also contains provisions permitting the Holders of specified
percentages in principal amount of the Securities of each series at the time
Outstanding, on behalf of the Holders of all Securities of such series, to waive
compliance by the Company with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences. Any such consent or
waiver by the Holder of this Security shall be conclusive and binding upon such
Holder and upon all future Holders of this Security and of any Security issued
upon the registration of transfer hereof or in exchange herefor or in lieu
hereof, whether or not notation of such consent or waiver is made upon this
Security.
As provided in and subject to the provisions of the Indenture,
the Holder of this Security shall not have the right to institute any proceeding
with respect to the Indenture or for the appointment of a receiver or trustee or
for any other remedy thereunder, unless such Holder shall have previously given
the Trustee written notice of a continuing Event of Default with respect to the
Securities of this series, the Holders of not less than 25% in principal amount
of the Securities of this series at the time Outstanding shall have made written
request to the Trustee to institute proceedings in respect of such Event of
Default as Trustee and offered the Trustee reasonable indemnity, and the Trustee
shall not have received from the Holders of a majority in principal amount of
Securities of this series at the time Outstanding a direction inconsistent with
such request, and shall have failed to institute any such proceeding, for 60
days after receipt of such notice, request and offer of indemnity. The foregoing
shall not apply to any suit instituted by the Holder of this Security for the
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<PAGE> 91
enforcement of any payment of principal hereof or any premium or interest hereon
on or after the respective due dates expressed herein.
No reference herein to the Indenture and no provision of this
Security or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and any
premium and interest on this Security at the times, place and rate, and in the
coin or currency, herein prescribed.
As provided in the Indenture and subject to certain
limitations therein set forth, the transfer of this Security is registrable in
the Security Register, upon surrender of this Security for transfer at the
office or agency of the Company in any place where the principal of and any
premium and interest on this Security are payable, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Securities of
this series and of like tenor, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees.
The Securities of this series are issuable only in registered
form without coupons in denominations of $1,000 and any integral multiple
thereof. As provided in the Indenture and subject to certain limitations therein
set forth, Securities of this series are exchangeable for a like aggregate
principal amount of Securities of this series and of like tenor of a different
authorized denomination, as requested by the Holder surrendering the same.
No service charge shall be made for any such transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name this Security is registered as the owner hereof for all
purposes, whether or not this Security be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
All terms used in this Security which are defined in the
Indenture shall have the meanings assigned to them in the Indenture.
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK.
-6-
<PAGE> 92
[FACE OF SECURITY]
CUSIP No. 53 8021 AH9
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE
INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY
OR A NOMINEE THEREOF. THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR
A SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY
BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE
THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.
Unless this certificate is presented by an authorized
representative of The Depository Trust Company, a New York corporation ("DTC"),
to Litton Industries, Inc. or its agent for registration of transfer, exchange,
or payment, and any certificate issued is registered in the name of Cede & Co.
or in such other name as is requested by an authorized representative of DTC
(and any payment is made to Cede & Co. or to such other entity as is requested
by an authorized representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the
registered owner hereof, Cede & Co., has an interest herein.
LITTON INDUSTRIES, INC.
6.98% Debentures Due March 15, 2036
No. B-1 $100,000,000
LITTON INDUSTRIES, INC., a corporation duly organized and
existing under the laws of the State of Delaware (herein called the "Company",
which term includes any successor Person under the Indenture hereinafter
referred to), for value received, hereby promises to pay to CEDE & CO., or
registered assigns, the principal sum of One Hundred Million Dollars on March
15, 2036, and to pay interest thereon from March 15, 1996 or from the most
recent Interest Payment Date to which interest has been paid or duly provided
for, semi-annually on March 15 and September 15 in each year, commencing
September 15, 1996, at the rate of 6.98% per annum, until the principal hereof
is paid or made available for payment. The interest so payable, and punctually
paid or duly provided for, on any Interest Payment Date will, as provided in
such Indenture, be paid to the Person in whose name this Security (or one or
more Predecessor Securities) is registered at the close of business on the
Regular Record Date for such interest, which shall be the February 28 or August
31 (whether or not a Business Day), as the case may be, next preceding such
Interest Payment Date. Any such interest not so punctually paid or duly provided
for will forthwith cease to be payable to the Holder on such Regular Record Date
and may either be paid to the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest to be fixed by the
Trustee, notice whereof shall be mailed to Holders of Securities of this series
not less than 10 days prior to such Special Record Date, or be paid at any time
in any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities of this series may be listed, and
upon such notice as may be required by such exchange, all as more fully provided
in said Indenture. Interest on the Securities of each series shall be computed
on the basis of a 360-day year of twelve 30-day months.
<PAGE> 93
Payment of the principal of (and premium, if any) and any such
interest on this Security will be made at the office or agency of the Company
maintained for that purpose in The Borough of Manhattan, The City of New York,
in such coin or currency of the United States of America as at the time of
payment is legal tender for payment of public and private debts; provided,
however, that at the option of the Company payment of interest may be made by
check mailed to the address of the Person entitled thereto as such address shall
appear in the Security Register.
Reference is hereby made to the further provisions of this
Security set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been
executed by the Trustee referred to on the reverse hereof by manual signature,
this Security shall not be entitled to any benefit under the Indenture or be
valid or obligatory for any purpose.
-2-
<PAGE> 94
IN WITNESS WHEREOF, the Company has caused this instrument to
be duly executed.
LITTON INDUSTRIES, INC.
By /s/ Rudolph E. Lang, Jr.
-------------------------
Attest:
/s/ Jeanette M. Thomas
- -----------------------
Secretary
CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
Dated: March 19, 1996 THE BANK OF NEW YORK,
As Trustee
By /s/ Vivian Georges
----------------------
Authorized Signatory
-3-
<PAGE> 95
[REVERSE OF SECURITY]
This Security is one of a duly authorized issue of securities
of the Company (herein called the "Securities"), issued and to be issued in one
or more series under a Senior Indenture, dated as of December 15, 1991 (herein
called the "Indenture", which term shall have the meaning assigned to it in such
instrument), between the Company and The Bank of New York, as Trustee (herein
called the "Trustee", which term includes any successor trustee under the
Indenture), and reference is hereby made to the Indenture for a statement of the
respective rights, limitations of rights, duties and immunities thereunder of
the Company, the Trustee and the Holders of the Securities and of the terms upon
which the Securities are, and are to be, authenticated and delivered. This
Security is one of the series designated on the face hereof, limited in
aggregate principal amount to $100,000,000.
Subject to and upon compliance with the provisions set forth
herein, each Holder shall have the right, at such Holder's option, to require
the Company to repay, and if such right is exercised the Company shall repay,
all or any part of such Holder's Securities on March 15, 2006 (the "Repayment
Date") at a price (the "Repayment Price") equal to 100% of the principal amount
thereof, together with accrued interest to March 15, 2006.
To exercise such right, the Holder of this Security shall
surrender this Security, at the office or agency of the Company in New York, New
York during the period beginning on January 15, 2006 and ending at 5:00 PM (New
York City time) on February 15, 2006 (or, if February 15, 2006 is not a Business
Day, the next succeeding Business Day), with the form entitled "Option to Elect
Repayment on March 15, 2006" on the reverse hereof duly completed. Any such
notice received by the Company during the period beginning on January 15, 2006
and ending at 5:00 PM (New York City time) on February 15, 2006 (or, if February
15, 2006 is not a Business Day, the next succeeding Business Day) shall be
irrevocable. If the Repayment Date falls between any Regular Record Date and the
next succeeding Interest Payment Date, this Security must be accompanied by
payment from the Holder of an amount equal to the interest thereon which the
registered Holder thereof is to receive on such Interest Payment Date. The
repayment option may be exercised by any Holder for less than the entire
principal amount of this Security, provided that the principal amount with
respect to which such right is exercised must be equal to $1,000 or an integral
multiple of $1,000. All questions as to the validity, form, eligibility
(including time of receipt) and acceptance of this Security for repayment shall
be determined by the Company, whose determination shall be final and binding.
Failure by the Company to repay the Debentures Due 2036 when
required as described in the preceding paragraphs will result in an Event of
Default under the Indenture.
The Securities of this series are subject to redemption upon
not less than 30 days' notice by mail, in whole or in part, at the option of the
Company at any time after March 15, 2006 at a Redemption Price equal to the
greater of (i) 100% of the principal amount of the Securities so redeemed or
(ii) as determined by an Independent Investment Banker, the sum of the present
values of the remaining scheduled payments of principal and interest thereon
discounted to the redemption date on a semiannual basis (assuming a 360-day
-4-
<PAGE> 96
year consisting of twelve 30-day months) at the Adjusted Treasury Rate, plus, in
each case, accrued interest thereon to the Redemption Date.
"Adjusted Treasury Rate" means, with respect to any Redemption
Date, the rate per annum equal to the semiannual equivalent yield to maturity of
the Comparable Treasury Issue, assuming a price for the Comparable Treasury
Issue (expressed as a percentage of its principal amount) equal to the
Comparable Treasury Price for such Redemption Date, plus 0.10%.
"Comparable Treasury Issue" means the United States Treasury
security selected by an Independent Investment Banker as having a maturity
comparable to the remaining term of the Security to be redeemed that would be
utilized, at the time of selection and in accordance with customary financial
practice, in pricing new issues of corporate debt securities of comparable
maturity to the remaining term of such Security. "Independent Investment Banker"
means one of the Reference Treasury Dealers appointed by the Trustee after
consultation with the Company.
"Comparable Treasury Price" means, with respect to any
Redemption Date, (i) the average of the bid and asked prices for the Comparable
Treasury Issue (expressed in each case as a percentage of its principal amount)
on the third Business Day preceding such Redemption Date, as set forth in the
daily statistical release (or any successor release) published by the Federal
Reserve Bank of New York and designated "Composite 3:30 p.m. Quotations for U.S.
Government Securities" or (ii) if such release (or any successor release) is not
published or does not contain such prices on such Business Day, (A) the
Reference Treasury Dealer Quotations for such Redemption Date, after excluding
the highest and lowest such Reference Treasury Dealer Quotations, or (B) if the
Trustee obtains fewer than three such Reference Treasury Dealer Quotations, the
average of all such Quotations. "Reference Treasury Dealer Quotations" means,
with respect to each Reference Treasury Dealer and any Redemption Date, the
average, as determined by the Trustee, of the bid and asked prices for the
Comparable Treasury Issue (expressed in each case as a percentage of its
principal amount) quoted in writing to the Trustee by such Treasury Reference
Dealer at 5:00 p.m. on the third Business Day preceding such Redemption Date.
"Reference Treasury Dealer" means each of Goldman, Sachs &
Co., CS First Boston Corporation, Merrill Lynch, Pierce, Fenner & Smith
Incorporated and J.P. Morgan Securities Inc. and their respective successors;
provided, however, that if any of the foregoing shall cease to be a primary U.S.
Government securities dealer in New York City (a "Primary Treasury Dealer"), the
Company shall substitute therefor another Primary Treasury Dealer.
In the event of redemption of this Security in part only, a
new Security or Securities of this series and of like tenor for the unredeemed
portion hereof will be issued in the name of the Holder hereof upon the
cancellation hereof.
The Indenture contains provisions for defeasance at any time
after March 15, 2006 of the entire indebtedness of this Security or certain
restrictive covenants with respect to this Security, in each case upon
compliance with certain conditions set forth in the Indenture.
-5-
<PAGE> 97
If an Event of Default with respect to Securities of this
series shall occur and be continuing, the principal of the Securities of this
series may be declared due and payable in the manner and with the effect
provided in the Indenture.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Company and the rights of the Holders of the Securities of
each series to be affected under the Indenture at any time by the Company and
the Trustee with the consent of the Holders of a majority in principal amount of
the Securities at the time Outstanding of each series to be affected. The
Indenture also contains provisions permitting the Holders of specified
percentages in principal amount of the Securities of each series at the time
Outstanding, on behalf of the Holders of all Securities of such series, to waive
compliance by the Company with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences. Any such consent or
waiver by the Holder of this Security shall be conclusive and binding upon such
Holder and upon all future Holders of this Security and of any Security issued
upon the transfer hereof or in exchange herefor or in lieu hereof, whether or
not notation of such consent or waiver is made upon this Security.
As provided in and subject to the provisions of the Indenture,
the Holder of this Security shall not have the right to institute any proceeding
with respect to the Indenture or for the appointment of a receiver or trustee or
for any other remedy thereunder, unless such Holder shall have previously given
the Trustee written notice of a continuing Event of Default with respect to the
Securities of this series, the Holders of not less than 25% in principal amount
of the Securities of this series at the time Outstanding shall have made written
request to the Trustee to institute proceedings in respect of such Event of
Default as Trustee and offered the Trustee reasonable indemnity, and the Trustee
shall not have received from the Holders of a majority in principal amount of
Securities of this series at the time Outstanding a direction inconsistent with
such request, and shall have failed to institute any such proceeding, for 60
days after receipt of such notice, request and offer of indemnity. The foregoing
shall not apply to any suit instituted by the Holder of this Security for the
enforcement of any payment of principal hereof or any premium or interest hereon
on or after the respective due dates expressed herein.
No reference herein to the Indenture and no provision of this
Security or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and any
premium and interest on this Security at the times, place and rate, and in the
coin or currency, herein prescribed.
As provided in the Indenture and subject to certain
limitations therein set forth, the transfer of this Security is registrable in
the Security Register, upon surrender of this Security for transfer at the
office or agency of the Company in any place where the principal of and any
premium and interest on this Security are payable, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Securities of
this series and of like tenor, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees.
-6-
<PAGE> 98
The Securities of this series are issuable only in registered
form without coupons in denominations of $1,000 and any integral multiple
thereof. As provided in the Indenture and subject to certain limitations therein
set forth, Securities of this series are exchangeable for a like aggregate
principal amount of Securities of this series and of like tenor of a different
authorized denomination, as requested by the Holder surrendering the same.
No service charge shall be made for any such transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name this Security is registered as the owner hereof for all
purposes, whether or not this Security be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
All terms used in this Security which are defined in the
Indenture shall have the meanings assigned to them in the Indenture.
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK.
-7-
<PAGE> 99
OPTION TO ELECT REPAYMENT ON MARCH 15, 2006
The undersigned registered Holder of this Security hereby
irrevocably exercises the option to require the Company to repay this Security
or portion thereof (which is $1,000 or an integral multiple thereof) below
designated on March 15, 2006, in accordance with the terms of such Security, and
directs that payment be made to the registered Holder hereof unless a different
name has been indicated below. Any amount required to be paid by the undersigned
on account of interest accompanies this Security.
Dated: ________________, 2006
Signature(s) must be Holder's Signature:
guaranteed if payment is to be
made other than to and in the name
of the registered Holder. --------------------------------
- ------------------------------------ Portion of Security to be repayed (in
Signature Guarantee integral multiples of $1,000) if other
than the full principal amount thereof:
Fill in for payment of Repayment
Price if to be made otherwise than --------------------------------
to the registered Holder
- ------------------------------------
Name
- ------------------------------------
Address
- ------------------------------------
Please print name and address
(including zip code)
SOCIAL SECURITY OR TAXPAYER
IDENTIFICATION NUMBER
- ------------------------------------
-8-
<PAGE> 1
EXHIBIT 4.2
CONFORMED COPY
AMENDMENT NO. 3 TO CREDIT AGREEMENT
AMENDMENT dated as of April 25, 1996 among LITTON INDUSTRIES, INC.
(the "Borrower"), the BANKS listed on the signature pages hereof (the "Banks"),
MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Agent (the "Agent") and WELLS
FARGO BANK, N.A., as Co-Agent (the "Co-Agent").
W I T N E S S E T H :
WHEREAS, the parties hereto have heretofore entered into an Amended and
Restated Credit Agreement dated as of December 22, 1994 (as heretofore amended,
the "Agreement") and desire to amend the Agreement as set forth herein;
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. Definitions; References. Unless otherwise specifically
defined herein, each term used herein which is defined in the Agreement shall
have the meaning assigned to such term in the Agreement. Each reference to
"hereof", "hereunder", "herein" and "hereby" and each other similar reference
and each reference to "this Agreement" and each other similar reference
contained in the Agreement shall from and after the date hereof refer to the
Agreement as amended hereby.
SECTION 2. Amendments of Net Worth Covenant and Related Definitions.
(a) The definition of "Minimum Compliance Level" contained in Section 1.01 of
the Agreement is amended to read in full as follows:
"Minimum Compliance Level" means, at any date, an amount equal
to the sum of (i) $669,000,000 plus (ii) for each fiscal quarter of the
Borrower commencing after January 31, 1996 and on or prior to such date
for which Consolidated Net Income is a positive number, an amount equal
to 50% of Consolidated Net Income for such fiscal quarter plus (iii)
for each issuance and/or sale subsequent to January 31, 1996 and on or
prior to such date by the Borrower of shares of its capital stock, an
amount equal to 100% of the amount by which Consolidated Net Worth is
increased on account of such transaction.
<PAGE> 2
(b) Section 1.01 of the Agreement is further amended by
deleting therefrom the definition of "Consolidated Tangible Net Worth".
(c) Section 5.06 of the Agreement is amended to read in full as
follows:
Section 5.06. Minimum Consolidated Net Worth.
Consolidated Net Worth will at no time be less than the Minimum
Compliance Level.
SECTION 3. Representations and Warranties. The Borrower hereby
represents and warrants that as of the date hereof and after giving effect
hereto:
(a) no Default under the Agreement has occurred and is
continuing; and
(b) each representation and warranty of the Borrower set forth
in the Agreement is true and correct as though made on and as of this
date.
SECTION 4. Governing Law. This Amendment shall be governed by
and construed in accordance with the laws of the State of New York.
SECTION 5. Counterparts; Conditions to Effectiveness. This
Amendment may be signed in any number of counterparts, each of which shall be
an original, with the same effect as if the signatures thereto and hereto were
upon the same instrument. This Amendment shall become effective as of the date
hereof when the Agent shall have received duly executed counterparts hereof
signed by the Borrower and the Required Banks (or, in the case of any party as
to which an executed counterpart shall not have been received, the Agent shall
have received telegraphic, telex or other written confirmation from such party
of execution of a counterpart hereof by such party).
2
<PAGE> 3
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed as of the date first above written.
LITTON INDUSTRIES, INC.
By: /s/ Timothy G. Paulson
-----------------------------------
Title: Vice President and Treasurer
3
<PAGE> 4
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Bank and Agent
By: /s/ Diana M. Imhof
-----------------------------
Title: Vice President
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION
By: /s/ Lori Y. Kannegieter
-----------------------------
Title: Vice President
THE BANK OF NEW YORK
By: /s/ Craig J. Rethmeyer
-----------------------------
Title: Vice President
CHEMICAL BANK
By: /s/ James B. Treger
-----------------------------
Title: Vice President
UNION BANK OF SWITZERLAND,
Los Angeles Branch
By: /s/ James I. Chu
-----------------------------
Title: Vice President
By: /s/ L. Scott Sommers
-----------------------------
Title: Vice President
4
<PAGE> 5
WELLS FARGO BANK, N.A.,
as Bank and Co-Agent
By: /s/ Daniel H. Hom
-----------------------------
Title: Vice President
THE BANK OF NOVA SCOTIA
By: /s/ Maarten Van Otterloo
-----------------------------
Title: Senior Relationship
Manager
CIBC INC.
By: /s/ Paul M. Mohme
-----------------------------
Title: Associate Director
CREDIT SUISSE
By: /s/ Stephen M. Flynn
-----------------------------
Title: Member of Senior
Management
By: /s/ Deborah A. Shea
-----------------------------
Title: Associate
DRESDNER BANK AG
By: /s/ Jon M. Bland
-----------------------------
Title: Senior Vice President
By: /s/ Sidney S. Jordan
-----------------------------
Title: Vice President
5
<PAGE> 6
MELLON BANK, N.A.
By: /s/ Lawrence C. Ivey
----------------------------------
Title: Vice President
NATIONSBANK OF TEXAS, N.A.
By: /s/ Tom F. Scharfenberg
----------------------------------
Title: Vice President
SWISS BANK CORPORATION,
San Francisco Branch
By: /s/ Stephanie W. Kim
----------------------------------
Title: Associate Director
By: /s/ Hans-Ueli Surber
----------------------------------
Title: Executive Director
BANK OF HAWAII
By: /s/ Susan McCarthy
----------------------------------
Title: Assistant Vice President
FIRST INSTERSTATE BANK OF
CALIFORNIA
By: /s/ Daniel H. Hom
----------------------------------
Title: Vice President
6
<PAGE> 7
NBD BANK, N.A.
By: /s/ L. Gene Beube
-----------------------------
Title: Senior Vice President
THE NORTHERN TRUST COMPANY
By: /s/ Michelle D. Griffin
-----------------------------
Title: Vice President
TORONTO DOMINION (TEXAS), INC.
By: /s/ Frederic B. Hawley
-----------------------------
Title: Vice President
7
<PAGE> 1
Exhibit 10
[Litton logo]
CERTIFICATION OF RESOLUTIONS
OF THE BOARD OF DIRECTORS OF
LITTON INDUSTRIES, INC.
I, the undersigned JEANETTE M. THOMAS, Vice President and Secretary of Litton
Industries, Inc., a corporation organized and existing under the laws of the
State of Delaware, DO HEREBY CERTIFY that the following is a true and correct
extract of certain resolutions duly adopted by the Board of Directors of said
corporation on December 7, 1995, in accordance with the laws of Delaware and the
By-laws of this corporation, and that said resolutions are in full force and
effect as of the date hereof:
RESOLVED, that pursuant to Article III, Section 11, of the By-laws of
this corporation, during calendar year 1996 the members of the Board of
Directors of this corporation who are not employees of this corporation
("nonemployee directors") shall be paid a fixed fee of $27,500 for
services to be rendered as members of the Board of Directors, payable in
quarterly installments of $6,875 at the beginning of each calendar
quarter, and, in addition thereto, they shall be paid an attendance fee
of $1,500 for each Board meeting attended by them, payable following any
such meeting attended;
RESOLVED FURTHER, that during calendar year 1996 nonemployee directors
of this corporation shall be paid a fee of $1,500 for attendance at each
Board committee meeting and each nonemployee Chairman of the Committee
shall be paid a fee of $2,500 for attendance, with the exception of
attendance at meetings of the Executive Committee, payable following any
such meeting attended;
RESOLVED FURTHER, that during calendar year 1996 a nonemployee director
serving as Chairman of the Executive Committee of the Corporation shall
be paid a fixed fee for services to be rendered as Chairman of the
Executive Committee of $15,000, payable in quarterly installments of
$3,750 at the beginning of each calendar quarter; and any nonemployee
director serving as a member of the Executive Committee (but not as
Chairman thereof) shall be paid a fixed fee for services to be rendered
as a member of the Executive Committee of $12,000, payable in quarterly
installments of $3,000 at the beginning of each calendar quarter; and
RESOLVED FURTHER, that the members of the Board shall be paid their
normal travel and incidental expenses incurred in traveling to any
<PAGE> 2
Board or Board committee meeting upon presentment of invoices covering
such expenditures to the Secretary of the Corporation.
IN WITNESS WHEREOF, I have here unto subscribed my name and affixed the seal of
said corporation at Woodland Hills, California, this 14th day of March, 1996.
[SEAL] /s/ JEANETTE M. THOMAS
-----------------------
Jeanette M. Thomas
Vice President and Secretary
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
Exhibit 27
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET AT APRIL 30, 1996 AND THE CONSOLIDATED STATEMENT OF
OPERATIONS FOR THE NINE MONTHS ENDED APRIL 30, 1996 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUL-31-1996
<PERIOD-END> APR-30-1996
<CASH> 133,996
<SECURITIES> 17,666
<RECEIVABLES> 646,877
<ALLOWANCES> 0
<INVENTORY> 605,721
<CURRENT-ASSETS> 1,792,615
<PP&E> 1,557,596
<DEPRECIATION> 920,653
<TOTAL-ASSETS> 3,266,589
<CURRENT-LIABILITIES> 1,499,175
<BONDS> 511,744
0
2,053
<COMMON> 46,417
<OTHER-SE> 823,317
<TOTAL-LIABILITY-AND-EQUITY> 3,266,589
<SALES> 2,580,069
<TOTAL-REVENUES> 2,580,069
<CGS> 2,019,858
<TOTAL-COSTS> 2,019,858
<OTHER-EXPENSES> 80,581
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 5,235
<INCOME-PRETAX> 181,919
<INCOME-TAX> 73,677
<INCOME-CONTINUING> 108,242
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 108,242
<EPS-PRIMARY> 2.26
<EPS-DILUTED> 2.26
</TABLE>
