<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 15, 1998
================================================================================
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, 1998
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 29, 1998 there were 46,134,989 shares of Common Stock outstanding.
Page 1 of 12
Exhibit Index appears on Page 11.
================================================================================
<PAGE> 2
LITTON INDUSTRIES, INC. AND SUBSIDIARY COMPANIES
INDEX
REPORT ON FORM 10-Q
FOR QUARTER ENDED APRIL 30, 1998
<TABLE>
<CAPTION>
PAGE
NUMBER
------
<S> <C> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Statements of Operations
Nine months ended April 30, 1998 and 1997................. 3
Consolidated Statements of Operations
Three months ended April 30, 1998 and 1997................ 4
Consolidated Balance Sheets
April 30, 1998 and July 31, 1997.......................... 5
Consolidated Statements of Cash Flows
Nine months ended April 30, 1998 and 1997................. 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 1. Legal Proceedings........................................... 11
Item 6. Exhibits and Reports on Form 8-K............................ 11
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,
------------------------
1998 1997
---------- ----------
<S> <C> <C>
Sales and Service Revenues.................................. $3,155,887 $3,104,954
Costs and Expenses
Cost of sales............................................. 2,426,367 2,439,790
Selling, general and administrative....................... 367,830 333,331
Depreciation and amortization............................. 107,823 101,965
Interest -- net........................................... 35,729 33,238
---------- ----------
Total............................................. 2,937,749 2,908,324
---------- ----------
Earnings before Taxes on Income............................. 218,138 196,630
Taxes on Income............................................. (87,255) (78,653)
---------- ----------
Net Earnings...................................... $ 130,883 $ 117,977
========== ==========
Earnings per Share:
Basic..................................................... $ 2.82 $ 2.53
========== ==========
Diluted................................................... $ 2.75 $ 2.47
========== ==========
</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,
------------------------
1998 1997
---------- ----------
<S> <C> <C>
Sales and Service Revenues.................................. $1,143,037 $1,095,607
Costs and Expenses
Cost of sales............................................. 885,143 864,580
Selling, general and administrative....................... 127,171 115,001
Depreciation and amortization............................. 38,264 34,692
Interest -- net........................................... 14,430 11,347
---------- ----------
Total............................................. 1,065,008 1,025,620
---------- ----------
Earnings before Taxes on Income............................. 78,029 69,987
Taxes on Income............................................. (31,211) (27,995)
---------- ----------
Net Earnings...................................... $ 46,818 $ 41,992
========== ==========
Earnings per Share:
Basic..................................................... $ 1.01 $ 0.90
========== ==========
Diluted................................................... $ 0.98 $ 0.89
========== ==========
</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,
1998 1997
---------- ----------
<S> <C> <C>
ASSETS
Current Assets
Cash and marketable securities............................ $ 59,980 $ 19,894
Accounts receivable, net.................................. 818,611 666,867
Inventories less progress billings........................ 555,469 629,206
Deferred tax assets....................................... 413,223 414,177
Prepaid expenses.......................................... 28,841 30,272
---------- ----------
Total Current Assets.............................. 1,876,124 1,760,416
---------- ----------
Property, Plant and Equipment -- at cost.................... 1,604,495 1,559,636
Less accumulated depreciation............................. (957,204) (905,091)
---------- ----------
Property, Plant and Equipment, Net.......................... 647,291 654,545
---------- ----------
Goodwill and Other Intangibles, Net......................... 1,086,905 737,554
---------- ----------
Other Assets and Long-term Investments...................... 424,190 367,171
---------- ----------
Total Assets...................................... $4,034,510 $3,519,686
========== ==========
LIABILITIES AND SHAREHOLDERS' INVESTMENT
Current Liabilities
Accounts payable.......................................... $ 813,143 $ 869,880
Payrolls and related expenses............................. 232,241 211,686
Taxes on income........................................... 84,208 94,102
Short-term debt........................................... 333,035 147,182
Contract liabilities and customer deposits................ 329,274 316,406
---------- ----------
Total Current Liabilities......................... 1,791,901 1,639,256
---------- ----------
Long-term Obligations....................................... 770,744 507,344
---------- ----------
Postretirement Benefit Obligations Other than Pensions...... 205,315 205,331
---------- ----------
Deferred Tax and Other Long-term Liabilities................ 101,840 128,736
---------- ----------
Shareholders' Investment
Capital stock
Voting preferred stock -- Series B..................... 2,053 2,053
Common stock........................................... 46,190 45,996
Additional paid-in capital................................ 314,054 301,839
Retained earnings......................................... 845,706 730,019
Cumulative currency translation adjustment................ (43,293) (40,888)
---------- ----------
Total Shareholders' Investment.................... 1,164,710 1,039,019
---------- ----------
Total Liabilities and Shareholders' Investment.... $4,034,510 $3,519,686
========== ==========
</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,
----------------------
1998 1997
--------- ---------
<S> <C> <C>
Cash and cash equivalents at beginning of period............ $ 4,144 $ 77,105
--------- ---------
Operating activities
Net earnings.............................................. 130,883 117,977
Adjustments to reconcile net earnings to net cash provided
by operating activities
Depreciation and amortization.......................... 107,823 101,965
Changes in assets and liabilities
Accounts receivable.................................. (51,506) 28,220
Inventory............................................ 55,930 (50,286)
Prepaid expenses..................................... 6,695 (1,992)
Accounts payable..................................... (78,421) (81,026)
Payrolls and related expenses........................ 6,961 (3,440)
Deferred and current taxes on income................. (44,625) 13,182
Contract liabilities and customer deposits........... 17,697 44,974
Other operating activities............................. (25,680) (33,491)
--------- ---------
Cash provided by operating activities....................... 125,757 136,083
--------- ---------
Investing activities
Purchase of businesses.................................... (445,483) (93,945)
Purchase of capital assets................................ (72,751) (68,551)
Proceeds from sale of capital assets...................... 5,679 37,463
Other investing activities................................ (11,612) (7,277)
--------- ---------
Cash used for investing activities.......................... (524,167) (132,310)
--------- ---------
Financing activities
Proceeds from issuance of long-term obligations........... 296,839 33,038
Change in short-term obligations, net..................... 149,991 6,547
Other financing activities................................ (8,334) (39,369)
--------- ---------
Cash provided by financing activities....................... 438,496 216
--------- ---------
Resulting in increase in cash and cash equivalents.......... 40,086 3,989
--------- ---------
Cash and cash equivalents at end of period.................. $ 44,230 $ 81,094
========= =========
Supplemental disclosure of cash flow information
Interest paid............................................. $ 41,237 $ 41,647
Net income taxes paid..................................... $ 116,848 $ 73,693
Reconciliation to Consolidated Balance Sheet at April 30, 1998:
Cash and cash equivalents................................. $ 44,230
Marketable securities..................................... 15,750
---------
Total cash and marketable securities.............. $ 59,980
=========
</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, 1998
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,
1997. The results of operations for the nine months ended April 30, 1998 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,
1998 1997
---------- ----------
(THOUSANDS OF DOLLARS)
<S> <C> <C>
Raw materials and work in progress.................. $ 994,516 $ 987,717
Finished goods...................................... 55,361 51,196
---------- ----------
1,049,877 1,038,913
Less progress billings.............................. (494,408) (409,707)
---------- ----------
Net inventories..................................... $ 555,469 $ 629,206
========== ==========
</TABLE>
3. Interest (expense) income is shown below:
<TABLE>
<CAPTION>
NINE MONTHS ENDED THREE MONTHS ENDED
APRIL 30, APRIL 30,
-------------------- --------------------
1998 1997 1998 1997
-------- -------- -------- --------
(THOUSANDS OF DOLLARS)
<S> <C> <C> <C> <C>
Interest expense................ $(41,047) $(39,421) $(16,292) $(13,493)
Interest income................. 5,318 6,183 1,862 2,146
-------- -------- -------- --------
Net interest expense............ $(35,729) $(33,238) $(14,430) $(11,347)
======== ======== ======== ========
</TABLE>
4. On April 1, 1998, the Company completed the acquisition of TASC, Inc.("TASC")
from Primark Corporation for a preliminary purchase price of $432 million in
cash. TASC is a leading provider of information technology and services to
the national intelligence sector, the Department of Defense and non-defense
and commercial customers. The acquisition has been accounted for under the
purchase method of accounting and reflected herein based upon preliminary
allocations of the purchase price which is subject to finalization. This
acquisition has resulted in an increase to goodwill of approximately $365
million, to be amortized over forty years.
7
<PAGE> 8
LITTON INDUSTRIES, INC. AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NINE MONTHS ENDED APRIL 30, 1998
5. The Company adopted Statement of Financial Accounting Standards No. 128,
"Earnings per Share" ("SFAS 128"), in the quarter ended January 31, 1998.
SFAS 128 replaced the previously reported primary and fully diluted earnings
per share ("EPS") with basic and diluted EPS. Basic EPS is calculated based
on the weighted average number of shares outstanding and diluted EPS includes
the effects of dilutive potential common shares. EPS amounts for prior
periods have been restated to conform to the requirements of SFAS 128.
The following table sets forth the computation of basic and diluted earnings
per share:
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
APRIL 30, APRIL 30,
-------------------------- --------------------------
1998 1997 1998 1997
----------- ----------- ----------- -----------
(THOUSANDS OF DOLLARS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C>
Net earnings....................... $ 46,818 $ 41,992 $ 130,883 $ 117,977
Preferred stock dividends.......... (206) (206) (616) (616)
----------- ----------- ----------- -----------
Net earnings used for basic and
diluted earnings per share
calculations.................... $ 46,612 $ 41,786 $ 130,267 $ 117,361
=========== =========== =========== ===========
Weighted average common shares
outstanding -- used for basic
earnings per share.............. 46,278,410 46,250,502 46,132,610 46,438,005
Dilutive effect of stock options... 1,204,327 915,748 1,187,053 1,053,501
----------- ----------- ----------- -----------
Number of shares used for diluted
earnings per share.............. 47,482,737 47,166,250 47,319,663 47,491,506
=========== =========== =========== ===========
Basic earnings per share........... $ 1.01 $ 0.90 $ 2.82 $ 2.53
=========== =========== =========== ===========
Diluted earnings per share......... $ 0.98 $ 0.89 $ 2.75 $ 2.47
=========== =========== =========== ===========
</TABLE>
8
<PAGE> 9
PART I. FINANCIAL INFORMATION (CONTINUED)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The Company reported sales of $1.14 billion and $3.16 billion for the third
quarter and nine months ended April 30, 1998 compared with $1.10 billion and
$3.10 billion for the prior year's periods, respectively. Operating profit
improved to $106.8 million and $294.9 million for the third quarter and nine
months ended April 30, 1998 compared with $95.0 million and $271.2 million for
the corresponding periods of the prior fiscal year. Net earnings rose 11.5% to
$46.8 million for the quarter and 10.9% to $130.9 million for the nine months
ended April 30, 1998. Corresponding amounts for the fiscal year 1997 periods
were $42.0 million and $118.0 million, respectively.
Effective August 1, 1997, the Company's Information Systems businesses have
been reported as a separate segment. Accordingly, the segment information for
the third quarter and nine months ended April 30, 1997 as discussed herein has
been restated to reflect this change.
The Advanced Electronics segment reported sales and operating profit of
$407.8 million and $29.2 million for the third quarter of fiscal year 1998
compared with $419.8 million and $26.7 million, respectively, for the third
quarter of fiscal year 1997. Sales and operating profit for nine months of the
current fiscal year were $1.19 billion and $81.3 million compared with $1.14
billion and $70.6 million, respectively, for the nine months of fiscal year
1997. The improvements in sales and operating profit for the nine months of the
current year were primarily attributable to higher volume on programs in the
integrated avionics systems and radar warning systems businesses and the
acquisition of Racal Marine Group, a provider of marine electronic equipment, in
February 1997. Sales for the current year's third quarter decreased slightly
while operating margins improved as a result of reduced program costs in certain
defense electronics programs. Backlog for this segment at April 30, 1998 was
$1.48 billion compared with $1.61 billion at July 31, 1997.
The Information Systems segment reported sales and operating profit of
$314.6 million and $16.3 million for the third quarter of fiscal year 1998
compared with $279.4 million and $18.9 million for the third quarter of fiscal
year 1997. For the nine months of the current fiscal year, sales and operating
profit were $829.4 million and $48.8 million compared with $792.3 million and
$53.5 million for the nine months of the prior fiscal year. The increase in
sales was mainly due to the acquisitions of TASC in April 1998 as described in
Note 4 of Notes to Consolidated Financial Statements and SAI Technology in March
1997. The contributions from these acquisitions were mitigated by lower volume
under the PRC Inc. subsidiary's ("PRC") Super-Minicomputer program, which is an
indefinite delivery/indefinite quantity contract with various U.S. Government
agencies to provide computer systems integration and networking solutions.
Operating profit was also impacted by investments in new programs and technology
made to address new market opportunities associated with software used in mobile
command and control systems and displays and computer products. Firm backlog at
April 30, 1998 for the Information Systems segment increased to $956.2 million
from $518.1 million at July 31, 1997 due mainly to the acquisition of TASC. In
addition, TASC and PRC have unfunded backlog with potential contract values of
$2.0 billion at April 30, 1998 compared with $1.5 billion for PRC at July 31,
1997.
The Marine Engineering and Production segment reported sales and operating
profit of $279.5 million and $36.6 million for the third quarter of fiscal year
1998 compared with $286.2 million and $34.8 million for the third quarter of
fiscal year 1997. The respective amounts for the nine months of fiscal year 1998
were $740.9 million and $95.8 million compared with $835.9 million and $100.1
million for the nine months of fiscal year 1997. The decline in sales reflected
contracts completed during fiscal year 1997 and lower construction activities on
contracts nearing completion including an Aegis destroyer delivered during the
current quarter and a LHD class amphibious assault ship delivered shortly
thereafter. This sales decline was partially offset by other contracts moving
into more advanced stages of production, including a seventh LHD class
amphibious assault ship and three Aegis destroyers. Operating margins improved
as a result of increased earnings rates on programs maturing in the production
process and continued production efficiencies. Current construction activities
include four Aegis destroyers, one LHD class amphibious assault ship, and
multiple deepwater supply vessels for a commercial customer. During the current
quarter, the U.S. Navy awarded the
9
<PAGE> 10
Company a contract to build six additional Aegis destroyers with options for two
more, which was the primary reason for the increase in backlog to $3.78 billion
at April 30, 1998 from $3.23 billion at July 31, 1997.
The Electronic Components and Materials segment reported sales and
operating profit of $155.9 million and $26.7 million for the third quarter of
the current fiscal year compared with $128.4 million and $17.7 million for the
prior year's period. Sales and operating profit for the nine months of the
current fiscal year were $442.8 million and $72.4 million compared with $383.4
million and $51.4 million for the nine months of the prior fiscal year. These
improvements were driven by continued strong demand for this segment's
commercial electronics products used in the communications and computer
industries. Process improvements and cost reduction efforts also contributed to
the improved results.
Net interest expense for the third quarter and nine months ended April 30,
1998 amounted to $14.4 million and $35.7 million compared with $11.3 million and
$33.2 million for the prior year's periods, respectively. To finance the
acquisition of TASC in April 1998, the Company issued $100 million principal
amount of 6.05% Senior Notes due 2003, $200 million principal amount of 6.75%
Senior Debentures due 2018 and sold commercial paper. In the second quarter of
the current fiscal year, the Company also incurred short-term borrowings in
connection with a payment of prior years' taxes. The payment included interest
which is deductible and, therefore, reduces estimated tax payments for fiscal
year 1998.
Cash and marketable securities amounted to $60.0 million at April 30, 1998
compared with $19.9 million at July 31, 1997. Management believes that cash flow
from operations, along with availability under credit commitments, will be
sufficient to meet operating requirements.
In March 1998, the American Institute of Certified Public Accountants
("AICPA") issued Statement of Position ("SOP") 98-1, "Accounting for the Costs
of Computer Software Developed or Obtained for Internal Use." SOP 98-1 is
effective for the Company in its fiscal year 2000 and will require the
capitalization of certain costs incurred in connection with developing or
obtaining software for internal use. In April 1998, the AICPA issued SOP 98-5,
"Reporting on the Costs of Start-Up Activities." SOP 98-5 is also effective for
the Company in its fiscal year 2000 and will require that certain costs
associated with start-up activities and organization costs be expensed as
incurred. The Company does not expect the adoption of these statements to have a
material impact on its consolidated financial statements.
The Company is continuing its efforts to evaluate the extent of year 2000
issues through internal programs initiated to identify and resolve such issues.
Costs incurred to date have not been significant and the remaining costs to be
incurred are not expected to have a material impact on the consolidated
financial statements. The Company believes it will satisfactorily resolve its
year 2000 issues.
10
<PAGE> 11
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Litton is suing Honeywell, Inc. ("Honeywell") for patent infringement
relating to the manufacture of ring laser gyro navigation systems which are used
in commercial aircraft. After trial of that case in the U.S. District Court for
the Central District of California, on August 31, 1993, the jury rendered a
verdict in favor of Litton in the amount of $1.2 billion. On January 9, 1995,
the District Court released a Memorandum of Decision finding Litton's patent
invalid and rejecting the jury verdict. Litton appealed to the U.S. Court of
Appeals for the Federal Circuit. On July 3, 1996, the Court of Appeals rendered
a decision reversing the District Court's decision, finding the patent valid and
infringed by Honeywell. The Court of Appeals reinstated the jury's verdict on
liability including the findings of interference with contract and prospective
business advantage and ordered a new trial on the amount of damages sustained by
Litton in the District Court. On March 17, 1997, the U.S. Supreme Court vacated
the Court of Appeals ruling and remanded the case to the Court of Appeals for
further consideration in view of the Supreme Court's decision in Warner-Jenkins
Co. v. Hilton Davis Chemical Co. On September 30, 1997, a hearing took place
before the Court of Appeals. On April 7, 1998, the Court of Appeals reversed its
prior order remanding the case to the District Court for a new trial on damages
only. Instead, the Court of Appeals ordered a new trial on liability and damages
for the patent and interference with contract and prospective business advantage
claims. On April 21, 1998, Litton filed a motion asking the Court of Appeals to
reconsider its April 7 decision or for a hearing before the entire court.
Honeywell has filed opposition to the motion.
Litton is also suing Honeywell on antitrust grounds in the same U.S.
District Court. On February 29, 1996, a jury rendered a verdict in favor of
Litton. On July 25, 1996, the District Court upheld the jury's verdict that
Honeywell attempted to illegally monopolize and did monopolize the market for
inertial reference systems for large commercial air transport, commuter and
business aircraft. However, the District Court declined to enter the $234
million jury verdict on the basis that Litton's damage study as presented failed
to disaggregate damages between illegal and legal acts. A new trial limited to
the issue of the amount of damages sustained by Litton attributable to
Honeywell's unlawful conduct has been ordered by the District Court. The
District Court set a trial date of October 13, 1998.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit 4.1: Indenture dated as of April 13, 1998 between the Company
and The Bank of New York, Trustee, under which the 6.05%
Senior Notes due 2003 and the 6.75% Senior Debentures due
2018 were issued and related Officers' Certificates.
Exhibit 4.2: $400,000,000 Credit Agreement dated March 27, 1998 among
Litton Industries, Inc., a group of banks and Morgan
Guaranty Trust Company of New York, as Agent.
Exhibit 27: Financial Data Schedule.
(b) Reports on Form 8-K:
In a report filed on Form 8-K dated April 7, 1998, the Company submitted an
underwriting agreement in connection with the public offering on April 13,
1998 of $100 million principal amount of 6.05% Senior Notes due April 15,
2003 and $200 million principal amount of 6.75% Senior Debentures due April
15, 2018.
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 15, 1998
12
<PAGE> 1
Exhibit 4.1
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
LITTON INDUSTRIES, INC.
SENIOR DEBT SECURITIES
-----------------------------
INDENTURE
Dated as of April 13, 1998
-----------------------------
The Bank of New York,
AS TRUSTEE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
CROSS REFERENCE TABLE*
<TABLE>
<CAPTION>
TIA INDENTURE
SECTION SECTION
- ------- ---------
<S> <C> <C>
310 (a)(1)...............................................................7.8; 7.10
(a)(2)....................................................................7.10
(a)(3)....................................................................N.A.
(a)(4)....................................................................N.A.
(a)(5)....................................................................7.10
(b)..................................................................7.8; 7.10
(c)........................................................................N.A
311 (a).......................................................................7.11
(b).......................................................................7.11
(c).......................................................................N.A.
312 (a)........................................................................2.7
(b).......................................................................12.3
(c).......................................................................12.3
313 (a)....................................................................... 7.6
(b)........................................................................7.6
(c)..................................................................7.6; 12.2
(d)........................................................................7.6
314 (a)..................................................................4.2; 12.2
(b).......................................................................N.A.
(c)(1)....................................................................12.4
(c)(2)....................................................................12.4
(c)(3)....................................................................N.A.
(d)..................................................................... N.A.
(e)...................................................................... 12.5
(f)...................................................................... 4.3
315 (a)...................................................................... 7.1
(b)................................................................ 7.5; 12.2
315 (c)........................................................................7.1
(d)........................................................................7.1
(e).......................................................................6.11
316 (a)(1)(A)..................................................................6.5
(a)(1)(B)..................................................................6.4
(a)(2)....................................................................N.A.
(b)........................................................................6.7
(c).......................................................................N.A.
</TABLE>
- --------------
* Note: This Cross Reference Table shall not, for any purpose, be deemed
to be part of the Indenture.
<PAGE> 3
<TABLE>
<CAPTION>
TIA INDENTURE
SECTION SECTION
- ------- ---------
<S> <C> <C>
317 (a)(1).....................................................................6.8
(a)(2).....................................................................6.9
(b)........................................................................2.6
318 (a).......................................................................12.1
</TABLE>
<PAGE> 4
TABLE OF CONTENTS*
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
<TABLE>
<S> <C> <C>
SECTION 1.1 Definitions........................................................ 1
SECTION 1.2 Other Definitions.................................................. 6
SECTION 1.3 Incorporation by Reference of Trust Indenture Act.................. 7
SECTION 1.4 Rules of Construction.............................................. 7
ARTICLE II
THE SECURITIES
SECTION 2.1 Forms Generally.................................................... 8
SECTION 2.2 Securities in Global Form.......................................... 8
SECTION 2.3 Title, Terms and Denominations..................................... 10
SECTION 2.4 Execution, Authentication, Delivery and Dating..................... 13
SECTION 2.5 Registrar and Paying Agent......................................... 17
SECTION 2.6 Paying Agent to Hold Money and Securities in Trust................. 17
SECTION 2.7 Securityholder Lists............................................... 18
SECTION 2.8 Transfer and Exchange.............................................. 18
SECTION 2.9 Replacement Securities and Coupons................................. 22
SECTION 2.10 Outstanding Securities; Determinations of Holders' Action......... 23
SECTION 2.11 Temporary Securities.............................................. 24
SECTION 2.12 Cancellation...................................................... 26
SECTION 2.13 Payment of Interest; Interest Rights Preserved.................... 26
SECTION 2.14 Persons Deemed Owners............................................. 28
SECTION 2.15 Computation of Interest .......................................... 28
ARTICLE III
REDEMPTION
SECTION 3.1 Right to Redeem; Notices to Trustee................................ 28
SECTION 3.2 Selection of Securities to be Redeemed............................. 29
SECTION 3.3 Notice of Redemption............................................... 29
</TABLE>
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* Note: This Table of Contents shall not, for any purpose, be deemed to
be part of the Indenture.
i
<PAGE> 5
<TABLE>
<S> <C> <C>
SECTION 3.4 Effect of Notice of Redemption..................................... 30
SECTION 3.5 Deposit of Redemption Price........................................ 31
SECTION 3.6 Securities Redeemed in Part........................................ 31
ARTICLE IV
COVENANTS
SECTION 4.1 Payment of Securities.............................................. 31
SECTION 4.2 SEC Reports........................................................ 32
SECTION 4.3 Compliance Certificate............................................. 32
SECTION 4.4 Further Instruments and Acts....................................... 32
SECTION 4.5 Maintenance of Office or Agency.................................... 32
SECTION 4.6 Additional Amounts................................................. 34
ARTICLE V
SUCCESSOR CORPORATION
SECTION 5.1 When Company May Merge or Transfer Assets.......................... 35
ARTICLE VI
DEFAULTS AND REMEDIES
SECTION 6.1 Events of Default.................................................. 36
SECTION 6.2 Acceleration....................................................... 37
SECTION 6.3 Other Remedies..................................................... 38
SECTION 6.4 Waiver of Past Defaults............................................ 38
SECTION 6.5 Control by Majority................................................ 38
SECTION 6.6 Limitation on Suits................................................ 39
SECTION 6.7 Rights of Holders to Receive Payment............................... 39
SECTION 6.8 Collection Suit by Trustee......................................... 39
SECTION 6.9 Trustee May File Proofs of Claim................................... 40
SECTION 6.10 Priorities........................................................ 40
SECTION 6.11 Undertaking for Costs............................................. 41
SECTION 6.12 Waiver of Stay, Extension or Usury Laws........................... 41
</TABLE>
ii
<PAGE> 6
<TABLE>
<CAPTION>
PAGE
ARTICLE VII
TRUSTEE
<S> <C> <C>
SECTION 7.1 Duties of Trustee.................................................. 42
SECTION 7.2 Rights of Trustee.................................................. 43
SECTION 7.3 Individual Rights of Trustee, etc.................................. 44
SECTION 7.4 Trustee's Disclaimer............................................... 44
SECTION 7.5 Notice of Defaults................................................. 45
SECTION 7.6 Reports by Trustee to Holders...................................... 45
SECTION 7.7 Compensation and Indemnity......................................... 45
SECTION 7.8 Replacement of Trustee............................................. 46
SECTION 7.9 Successor Trustee by Merger........................................ 48
SECTION 7.10 Eligibility; Disqualification..................................... 48
SECTION 7.11 Preferential Collection of Claims Against Company................. 48
ARTICLE VIII
SATISFACTION AND DISCHARGE
SECTION 8.1 Discharge of Liability on Securities............................... 48
SECTION 8.2 Repayment to the Company........................................... 49
SECTION 8.3 Option to Effect Defeasance or Covenant Defeasance..................49
SECTION 8.4 Defeasance and Discharge............................................49
SECTION 8.5 Covenant Defeasance.................................................50
SECTION 8.6 Conditions to Defeasance or Covenant Defeasance.....................50
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.1 Supplemental Indentures without Consent of Holders................. 51
SECTION 9.2 Supplemental Indentures with Consent of Holders.................... 52
SECTION 9.3 Compliance with Trust Indenture Act................................ 53
SECTION 9.4 Revocation and Effect of Consents, Waivers and Actions............. 53
SECTION 9.5 Notation on or Exchange of Securities.............................. 54
SECTION 9.6 Trustee to Sign Supplemental Indentures............................ 54
SECTION 9.7 Effect of Supplemental Indentures.................................. 54
</TABLE>
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<PAGE> 7
ARTICLE X
SINKING FUNDS
<TABLE>
<S> <C> <C>
SECTION 10.1 Applicability of Article.......................................... 54
SECTION 10.2 Satisfaction of Sinking Fund Payments with Securities............. 55
SECTION 10.3 Redemption of Securities for Sinking Fund......................... 55
ARTICLE XI
ACTIONS OF HOLDERS OF SECURITIES
SECTION 11.1 Purposes for which Meetings may be Called......................... 56
SECTION 11.2 Call, Notice and Place of Meetings................................ 56
SECTION 11.3 Persons Entitled to Vote at Meetings.............................. 56
SECTION 11.4 Quorum; Action.................................................... 57
SECTION 11.5 Determination of Voting Rights; Conduct and
Adjournment of Meetings........................................... 57
SECTION 11.6 Counting Votes and Recording Action of Meetings................... 58
SECTION 11.7 Actions of Holders Generally...................................... 59
ARTICLE XII
MISCELLANEOUS
SECTION 12.1 Trust Indenture Act Controls...................................... 60
SECTION 12.2 Notices........................................................... 61
SECTION 12.3 Communication by Holders with Other Holders....................... 62
SECTION 12.4 Certificate and Opinion as to Conditions Precedent................ 62
SECTION 12.5 Statements Required in Certificate or Opinion..................... 63
SECTION 12.6 Separability Clause............................................... 63
SECTION 12.7 Rules by Trustee, Paying Agent and Registrar...................... 63
SECTION 12.8 Legal Holidays.................................................... 63
SECTION 12.9 Governing Law and Jurisdiction.................................... 64
SECTION 12.10 No Recourse Against Others....................................... 64
SECTION 12.11 Successors....................................................... 64
SECTION 12.12 Effect of Headings and Table of Contents......................... 64
SECTION 12.13 Benefits of Indenture............................................ 64
SECTION 12.14 Multiple Originals............................................... 66
</TABLE>
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<TABLE>
<CAPTION>
Page
----
EXHIBIT A
<S> <C>
CERTIFICATE..................................................................... 67
</TABLE>
v
<PAGE> 9
INDENTURE dated as of April 13, 1998, by and among Litton Industries,
Inc., a Delaware corporation ("Company"), and The Bank of New York, a New York
banking corporation, as trustee ("Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its unsecured
debentures, notes or other evidences of indebtedness (herein called the
"Securities") to be issued in one or more series as in this Indenture provided.
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually covenanted and agreed, for the
equal and ratable benefit of the Holders from time to time of the Securities or
each series thereof as follows:
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION I.1 Definitions.
"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 speci fied person means the power to
direct or cause the direction of 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.
"Authorized Newspaper" means a newspaper, in the English language or, at
the option of the Company, in an official language of the country of
publication, customarily published on each Business Day (with respect to Bearer
Securities, set forth in the Officers' Certificate with respect to a series of
Bearer Securities), whether or not published on Saturdays, Sundays or holidays,
and of general circulation in the place in connection with which the term is
used or in the financial community of such place. Where successive publications
are required to be made in Authorized Newspapers, the successive publica tions
may be made in the same or in different Authorized Newspapers meeting the
foregoing requirements and in each case on any Business Day.
<PAGE> 10
"Bearer Security" means any Security in the form (to the extent
applicable thereto) established pursuant to Section 2.1 which is payable to the
bearer.
"Board of Directors" means the board of directors of the Company or any
committee of such board authorized with respect to any matter to exercise the
powers of the Board of Directors of the Company.
"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, except as otherwise specified as contemplated by
Section 2.3(a), with respect to any Place of Payment or any other particular
location referred to in this Indenture or in the Securities, means each Monday,
Tuesday, Wednesday, Thursday and Friday which is not a day on which banking
institutions in that Place of Payment or other location are authorized or
obligated by law or executive order to close.
"Capital Stock" for any corporation means any and all shares, interests,
rights to purchase, warrants, options, participations or other equivalents of or
interests in (however designated) stock issued by that corporation.
"cash" means such coin or currency of the United States as at any time
of payment is legal tender for the payment of public and private debts.
"Cedel S.A." means Centrale de Livraison de Valeurs Mobilieres SA.
"Company" means the party named as the "Company" in the first paragraph
of this Indenture until a successor replaces it pursuant to the applicable
provisions of this Indenture and, thereafter, shall mean such successor.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its Chairman of the Board, a Vice Chairman,
its Chief Executive Officer, its President or a Vice President, and by its
Treasurer, an Assistant Treasurer, its Secretary or an Assistant Secretary, and
delivered to the Trustee or, with respect to Sections 2.4, 2.8, 2.11 and 7.2,
any other employee of the Company named in an Officers' Certificate delivered to
the Trustee.
"coupon" means any interest coupon appertaining to a Bearer Security.
"Default" means any event which is, or after notice or passage of time
or both would be, an Event of Default.
<PAGE> 11
"Depositary" means, with respect to the Securities of any series
issuable or issued in whole or in part in global form, the person specified as
contemplated by Section 2.3(a) as the Depositary with respect to such series of
Securities, until a successor shall have become such pursuant to the applicable
provisions of this Indenture, and thereafter "Depositary" shall mean or include
such successor.
"Discount Security" means any Security which provides for an amount less
than the Principal Amount thereof to be due and payable upon a declaration of
acceleration of the Maturity thereof pursuant to Section 6.2.
"Dollar" or "$" means a dollar or other equivalent unit in such coin or
currency of the United States as at the time shall be legal tender for the
payment of public and private debts.
"Euro-clear" means the operator of the Euro-clear System.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Holder" or "Securityholder," when used with respect to any Security,
means, in the case of a Registered Security, a person in whose name a Security
is registered on the Registrar's books and, in the case of a Bearer Security,
the bearer thereof and, when used with respect to any coupon, means the bearer
thereof.
"Indenture" means this Indenture, as amended or supplemented from time
to time in accordance with the terms hereof and shall include the terms of a
particular series of Securities established as contemplated in Section 2.3(a).
"interest," when used with respect to a Discount Security which by its
terms bears interest only after Maturity, means interest payable after Maturity.
"Interest Payment Date," when used with respect to any Security, means
the Stated Maturity of an installment of interest on such Security.
"Maturity," when used with respect to any Security, means the date on
which the Principal of such Security or an installment of Principal or, in the
case of a Discount Security, the Principal Amount payable upon a declaration of
acceleration pursuant to Section 6.2, becomes due and payable as therein or
herein provided, whether at the Stated Maturity or by declaration of
acceleration, call for redemption or otherwise.
3
<PAGE> 12
"Officer" means the Chairman of the Board, any Vice Chairman, the Chief
Executive Officer, the President, any Vice President, the Treasurer, the
Secretary, any Assistant Treasurer or any Assistant Secretary of the Company.
"Officers' Certificate" means a written certificate containing the
information specified in Sections 2.3, 12.4 and 12.5, signed in the name of the
Company by its Chair man of the Board, a Vice Chairman, its Chief Executive
Officer, its President or a Vice President, and by its Treasurer, an Assistant
Treasurer, its Secretary or an Assistant Secre tary, and delivered to the
Trustee.
"Opinion of Counsel" means a written opinion containing the information
specified in Sections 12.4 and 12.5, from legal counsel. The counsel may be an
employee of, or counsel to, the Company or the Trustee.
"Periodic Offering" means an offering of Securities of a series from
time to time the specific terms of which Securities, including, without
limitation, the rate or rates of interest, if any, thereon, the Stated Maturity
or Maturities thereof, the original issue date or dates thereof, the redemption
provisions, if any, and any other terms specified as contemplated by Section
2.3(a) with respect thereto, are to be determined by the Com pany, or one or
more of the Company's agents designated in an Officers' Certificate, upon the
issuance of such Securities.
"person" means any individual, corporation, partnership, joint venture,
associa tion, joint-stock company, limited liability company, trust,
unincorporated organization, or government or any agency or political
subdivision thereof.
"Place of Payment," when used with respect to the Securities of any
series, means the place or places where, subject to the provisions of Section
4.5, the Principal of and any interest on the Securities of that series are
payable as specified as contemplated by Section 2.3(a).
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 2.9 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security or a Security to which a
mutilated, destroyed, lost or stolen coupon appertains shall be deemed to
evidence the same debt as the mutilated, destroyed, lost or stolen Security or
the Security to which the mutilated, destroyed, lost or stolen coupon
appertains, as the case may be.
4
<PAGE> 13
"Principal" or "Principal Amount" of a Security, except as otherwise
specifically provided in this Indenture, means the outstanding principal of the
Security plus the premium, if any, of the Security.
"Redemption Date" or "redemption date," when used with respect to any
Security to be redeemed, shall mean the date specified for redemption of such
Security in accor dance with the terms of such Security and this Indenture.
"Redemption Price" or "redemption price," when used with respect to any
Security to be redeemed, means the price at which it is to be redeemed pursuant
to this Indenture.
"Registered Security" means any Security in the form (to the extent
applicable thereto) established pursuant to Section 2.1 which is registered on
the books of the Registrar.
"Regular Record Date" for the interest payable on any Interest Payment
Date on the Registered Securities of any series means the date specified for
that purpose as contemplated by Section 2.3(a).
"SEC" means the Securities and Exchange Commission.
"Securities" has the meaning stated in the first recital of this
Indenture and more particularly means any Securities authenticated and delivered
under this Indenture.
"Securityholder" or "Holder," when used with respect to any Security,
means in the case of a Registered Security, a person in whose name a Security is
registered on the Registrar's books and in the case of a Bearer Security the
bearer thereof and, when used with respect to any coupon, means the bearer
thereof.
"Special Record Date" for the payment of any Defaulted Interest on the
Registered Securities of any issue means a date fixed by the Trustee pursuant to
Section 2.13.
"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 or a coupon representing such installment of interest as the
fixed date on which an amount equal to the Principal of such Security or an
installment of Principal thereof or interest thereon is due and payable.
"Subsidiary" means, with respect to any person, a corporation of which a
majority of the Capital Stock having voting power under ordinary circumstances
to elect a majority
5
<PAGE> 14
of the board of directors of such corporation is owned by (i) such person, (ii)
such person and one or more Subsidiaries or (iii) one or more Subsidiaries of
such person.
"TIA" means the Trust Indenture Act of 1939 as in effect on the date of
this Indenture, except as provided in Section 9.3.
"Trust Officer" means, when used with respect to the Trustee, any Senior
Trust Officer, any Vice President, any Trust Officer, any Assistant Vice
President or any other officer or assistant officer of the Trustee customarily
performing functions similar to those performed by the persons who at the time
shall be such officers respectively, or to whom any corporate trust matter is
referred because of his or her knowledge of and familiarity with the particular
subject.
"Trustee" means the party named as the "Trustee" in the first paragraph
of this Indenture until a successor replaces it pursuant to the applicable
provisions of this Indenture and, thereafter, shall mean such successor.
"United States" means the United States of America, its territories, its
possessions (including the Commonwealth of Puerto Rico), and other areas subject
to its jurisdiction.
"United States Alien" means any person who, for United States Federal
income tax purposes, is a foreign corporation, a non-resident alien individual,
a non-resident alien fiduciary of a foreign estate or trust, or a foreign
partnership one or more of the members of which is, for United States Federal
income tax purposes, a foreign corporation, a non-resident alien individual or a
non-resident alien fiduciary of a foreign estate or trust.
SECTION I.2 Other Definitions.
<TABLE>
<CAPTION>
Defined in
Term Section
---- ----------
<S> <C>
"Bankruptcy Law" 6.1
"Common Depositary" 2.2
"Custodian" 6.1
"Defaulted Interest" 2.13
"Event of Default" 6.1
"Exchange Date" 2.2
"Legal Holiday" 12.8
"Notice of Default " 6.1
"Outstanding" 2.10
"Paying Agent" 2.5
"Permanent Global Bearer Security" 2.2
</TABLE>
6
<PAGE> 15
<TABLE>
<S> <C>
"Registrar" 2.5
"Temporary Global Bearer Security" 2.2
</TABLE>
SECTION I.3 Incorporation by Reference of Trust Indenture Act. Whenever
this Indenture refers to a provision of the TIA, the provision is incorporated
by reference in and made a part of this Indenture. The following TIA terms used
in this Indenture have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities.
"indenture security holder" means a Holder or Securityholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule have the
meanings assigned to them by such definitions.
SECTION I.4 Rules of Construction. Unless the context otherwise
requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with generally accepted accounting
principles in the United States as in effect from time to time;
(3) "or" is not exclusive;
(4) "including" means including, without limitation; and
(5) words in the singular include the plural, and words in the
plural include the singular.
ARTICLE II
7
<PAGE> 16
THE SECURITIES
SECTION II.1 Forms Generally. The Registered Securities, if any, of each
series and the Bearer Securities, if any, of each series and related coupons
shall be in substantially such form (including global form) as shall be
established by delivery to the Trustee of an Officers' Certificate or in one or
more indentures supplemental hereto, in each case with such appropriate
insertions, omissions, substitutions and other variations as are required or
permitted by this Indenture, and may have such letters, numbers or other marks
of identification and such legends or endorsements placed thereon as may be
required to comply with the rules of any securities exchange or as may,
consistently herewith, be determined by the Officers executing such Securities
or coupons as evidenced by their execution of the Securities or coupons. The
Officers' Certificate so establishing the form of Security or coupons, if any,
of any series shall be delivered to the Trustee at or prior to the delivery of
the Company Order contemplated by Section 2.4 for the authentication and
delivery of such Securities or coupons.
Unless otherwise specified as contemplated by Section 2.3(a), Bearer
Securities shall have interest coupons attached.
The permanent Securities and coupons, if any, shall be printed,
lithographed, engraved or word processed or produced by any combination of these
methods or may be produced in any other manner, provided, that such method is
permitted by the rules of any securities exchange on which such Securities may
be listed, all as determined by the Officers executing such Securities as
evidenced by their execution of such Securities.
SECTION II.2 Securities in Global Form. If Securities of a series are
issuable in temporary or permanent global form, as specified as contemplated by
Section 2.3(a), then, notwithstanding clause (10) of Section 2.3(a) and the
provisions of Section 2.3(b), any such Security shall represent such of the
Outstanding Securities of such series as shall be specified therein and may
provide that it shall represent the aggregate amount of Outstanding Securities
from time to time endorsed thereon or otherwise notated on the books and records
of the Registrar and that the aggregate amount of Outstanding Securities
represented thereby may from time to time be reduced to reflect exchanges. Any
endorsement of a Security in global form to reflect the amount of any increase
or decrease in the amount of Outstanding Securities represented thereby shall be
made by the Trustee in such manner and upon instructions given by such person or
persons as shall be specified therein or in the Company Order to be delivered to
the Trustee pursuant to Section 2.4 or Section 2.11. Subject to the provisions
of Section 2.4 and, if applicable, Section 2.11, the Trustee shall deliver and
redeliver any Security in global form in the manner and upon instructions given
by the person or persons specified therein or in the applicable Company Order.
If a Company Order pursuant to Section 2.4 or 2.11 has been, or simultaneously
is, delivered, any instructions by the Company with respect to endorsement or
other notation on the books and records of the Registrar or delivery or
redelivery of a Security
8
<PAGE> 17
of such series in global form shall be in writing but need not comply with
Section 12.4 or 12.5 and need not be accompanied by an Opinion of Counsel
(except as required by Section 2.4).
The provisions of the last sentence of Section 2.4 shall apply to any
Security represented by a Security in global form if such Security was never
issued and sold by the Company, and the Company delivers to the Trustee the
Security in global form together with written instructions (which need not
comply with Section 12.4 or 12.5 and need not be accompanied by an Opinion of
Counsel) with regard to the reduction in the Principal Amount of Securities
represented thereby, together with the written statement contemplated by the
last sentence of Section 2.4.
Notwithstanding the provisions of Sections 2.1 and 2.13, unless
otherwise specified as contemplated by Section 2.3(a), payment of Principal of
and any interest on any Security in global form shall be made to the person or
persons specified therein.
Any series of Bearer Securities shall be issued initially in the form of
one temporary global Bearer Security (the "Temporary Global Bearer Security"),
which Temporary Global Bearer Security shall be deposited on behalf of the
beneficial owners of the Bearer Securities represented thereby with The Bank of
New York Depositary (Nominees) Limited, as common depositary (the "Common
Depositary"), for credit to their respective accounts (or to such other accounts
as they may direct) at Morgan Guaranty Trust Company of New York, Brussels
office, as operator of the Euro-Clear or Cedel S.A.
On or before the date 40 days after the later of the announcement of the
offering and the date of settlement (the "Exchange Date"), the Company shall
deliver to a Paying Agent located outside the United States, or its designated
agent, Bearer Securities executed by the Company. On or after the Exchange Date,
the Temporary Global Bearer Security shall be surrendered by the Common
Depositary to the Trustee or its agent, as the Company's agent for such purpose,
to be exchanged, in whole or from time to time in part, at the sole discretion
of the Company for (i) Bearer Securities or (ii) a permanent global Bearer
Security (the "Permanent Global Bearer Security") without charge to Holders, and
the principal Paying Agent or other Paying Agent outside the United States shall
authenticate and deliver (at an office or agency outside the United States), in
exchange for the Temporary Global Bearer Security or the portions thereof to be
exchanged, an equal aggregate principal amount of Bearer Securities or the
Permanent Global Bearer Security, as shall be specified by the beneficial owners
thereof; provided, however, that upon such presentation by the Common
Depositary, the Temporary Global Bearer Security is accompanied by a certificate
dated the Exchange Date or a subsequent date and signed by Euro- Clear as to the
portion of the Temporary Global Bearer Security held for its account then to be
exchanged and a certificate dated the Exchange Date or a subsequent date and
signed by Cedel S.A. as to the portion of the Temporary Global Bearer Security
held for its account then to be exchanged, each to the effect hereinafter
provided. The Company and the Trustee agree that they will cooperate in causing
the paying agent located outside the United States to retain each certificate
provided by Euro-Clear or Cedel S.A. for a period of four calendar years
following
9
<PAGE> 18
the year in which the certificate is received and not to otherwise
dispose of any such certificate without first offering to deliver it to the
Company.
Each certificate to be provided by Euro-Clear and Cedel S.A. shall be
substantially in the form attached hereto as Exhibit A or with such changes
therein as shall be approved by the Company and be satisfactory to the Trustee.
Each certificate received by Euro-Clear and Cedel S.A. from persons
appearing in their records as persons entitled to a portion of the Temporary
Global Bearer Security shall be substantially to the effect set forth in this
Indenture.
Upon any such exchange of a portion of the Temporary Global Bearer
Security for Bearer Securities or the Permanent Global Bearer Security, the
Temporary Global Bearer Security shall be endorsed to reflect the reduction of
the principal amount evidenced thereby. Until so exchanged in full, the
Temporary Global Bearer Security shall in all respects be entitled to the same
benefits under, and subject to the same terms and conditions of, this Indenture
as Bearer Securities authenticated and delivered hereunder, except that none of
Euro-Clear, Cedel S.A. or the beneficial owners of the Temporary Global Bearer
Security shall be entitled to receive payment of interest or other payments
thereon or to convert the Temporary Global Bearer Security, or any portion
thereof, into Common Stock of the Company or any other security, cash or other
property.
SECTION II.3 Title, Terms and Denominations.
(a) The aggregate Principal Amount of Securities which may be
authenticated and delivered under this Indenture shall be unlimited.
The Securities may be issued in one or more series. There shall be
established and, subject to Section 2.4, set forth, or determined in the manner
provided, in an Officers' Certifi cate of the Company or established in one or
more indentures supplemental hereto:
(1) the title of the Securities of the series (which shall
distinguish the Securities of the series from all other Securities);
(2) any limit upon the aggregate Principal Amount of the
Securities of the series which may be authenticated and delivered under
this Indenture (except for Securities au thenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other
Securities of the series pursuant to Sections 2.8, 2.9, 2.11, 3.6, 9.5
or 10.3 and except for any Securities which, pursuant to Section 2.4,
are deemed never to have been authenticated and delivered hereunder);
10
<PAGE> 19
(3) whether Securities of the series are to be issuable as
Registered Securities, Bearer Securities or both, whether any Securities
of the series may be represented initially by a Security in temporary or
permanent global form and, if so, the initial Depositary with respect to
any such temporary or permanent global Security, and if other than as
provided in Section 2.8 or Section 2.11, as applicable, whether and the
circumstances under which beneficial owners of interests in any such
temporary or permanent global Security may exchange such interests for
Securities of such series and of like tenor of any authorized form and
denomination and the Authorized Newspapers for publication of notices to
holders of Bearer Securities;
(4) any other terms required for the establishment of a series of
Bearer Securi ties, including, but not limited to, tax compliance
procedures;
(5) the person to whom any interest on any Registered Security
of the series shall be payable, if other than the person in whose name
that Security (or one or more Predecessor Securities) is registered at
the close of business on the Regular Record Date for such interest, the
manner in which, and the person to whom, any interest on any Bearer
Security of the series shall be payable, if otherwise than upon
presentation and surrender of the coupons appertaining thereto as they
severally mature, and the extent to which, or the manner in which
(including any certification requirement and other terms and conditions
under which), any interest payable on a temporary or permanent global
Security on an Interest Payment Date will be paid if other than in the
manner provided in Section 2.2 and Section 2.4, as applicable;
(6) the date or dates on which the Principal of the Securities
of the series is payable or the method of determination thereof;
(7) the rate or rates at which the Securities of the series
shall bear interest, if any, the date or dates from which any such
interest shall accrue, the Interest Payment Dates on which any such
interest shall be payable and the Regular Record Date for any interest
payable on any Registered Securities on any Interest Payment Date;
(8) the place or places where, subject to the provisions of
Section 4.5, the Principal of and any interest on Securities of the
series shall be payable, any Registered Securities of the series may be
surrendered for registration of transfer, Securities of the series may
be surrendered for exchange and notices and demands to or upon the
Company in respect of the Securities of the series and this Indenture
may be served;
(9) the period or periods within which, the price or prices at
which and the terms and conditions upon which, Securities of the series
may be redeemed, in whole or in part, at the option of the Company;
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<PAGE> 20
(10) the obligation, if any, of the Company to redeem or purchase
Securities of the series pursuant to any sinking fund or analogous
provisions or at the option of a Holder thereof, the conditions, if any,
giving rise to such obligation, and the period or periods within which,
the price or prices at which and the terms and conditions upon which
Securities of the series shall be redeemed or purchased, in whole or in
part, and any provisions for the remarketing of such Securities;
(11) the denominations in which any Registered Securities of the
series shall be issuable, if other than denominations of $1,000 and any
integral multiple thereof, and the denomination or denominations in
which any Bearer Securities of the series shall be issuable, if other
than denominations of $5,000 and $100,000;
(12) the currency or currencies, including composite currencies,
in which payment of the Principal of and any interest on the Securities
of the series shall be payable if other than the currency of the United
States, and if so, whether the Securities of the series may be satisfied
and discharged other than as provided in Article VIII;
(13) if the amount of payments of principal of and any interest
on the Securities of the series is to be determined with reference to an
index, formula or other method, or based on a coin or currency other
than that in which the Securities are stated to be payable, the manner
in which such amounts shall be determined and the calculation agent, if
any, with respect thereto;
(14) if other than the Principal Amount thereof, the portion of
the Principal Amount of any Securities of the series which shall be
payable upon declaration of accel eration of the Maturity thereof
pursuant to Section 6.2;
(15) if the Company will pay additional amounts on any of the
Securities and coupons, if any, of the series to any Holder who is a
United States Alien (including any modification in the definition of
such term), in respect of any tax, assessment or governmental charge
withheld or deducted, under what circumstances and with what procedures
and documentation the Company will pay such additional amounts, whether
such additional amounts will be treated as interest or Principal
pursuant to this Inden ture, and whether the Company will have the
option to redeem such Securities rather than pay additional amounts (and
the terms of any such option);
(16) if other than as defined in Section 1.1, the meaning of
"Business Day" when used with respect to any Securities of the series;
(17) if and the terms and conditions upon which the Securities
of the series may or must be converted into securities of the Company or
exchanged for securities of the Company or another enterprise;
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(18) any terms applicable to Original Issue Discount, if any,
(as that term is defined in the Internal Revenue Code of 1986 and the
Regulations thereunder) including the rate or rates at which such
Original Issue Discount, if any, shall accrue;
(19) if the Securities of the series may be issued or delivered
(whether upon original issuance or upon exchange of a temporary Security
of such series or otherwise), or any installment of Principal of or any
interest is payable, only upon receipt of certain certificates or other
documents or satisfaction of other conditions in addition to those
specified in this Indenture, the form and terms of such certificates,
documents or conditions; and
(20) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture, except as permitted
by Section 9.1(7)).
All Securities of any one series and the coupons appertaining to any
Bearer Securities of such series shall be substantially identical except as to
denomination and the rate or rates of interest, if any, and Stated Maturity, the
date from which interest, if any, shall accrue and except as may otherwise be
provided in or pursuant to an Officers' Certificate pursuant to this Section
2.3(a) or in any indenture supplemental hereto. All Securities of any one series
need not be issued at the same time and, unless otherwise provided, a series may
be reopened for issuances of additional Securities of such series or for the
establishment of additional terms with respect to the Securities of such series.
If any of the terms of the series are established by action taken
pursuant to a Board Resolution, a copy of any appropriate record of such action
shall be certified by the Secretary or an Assistant Secretary of the Company and
delivered to the Trustee at or prior to the delivery of the Officers'
Certificate setting forth the terms of the series. With respect to Securities of
a series subject to a Periodic Offering, such Board Resolution or Officers'
Certificate may provide general terms for Securities of such series and provide
either that the specific terms of particular Securities of such series shall be
specified in a Company Order or that such terms shall be determined by the
Company, or one or more of the Company's agents designated in an Officers'
Certificate, in accordance with the Company Order as contemplated by the first
proviso of the third paragraph of Section 2.4.
(b) Unless otherwise provided as contemplated by Section 2.3(a) with
respect to any series of Securities, any Registered Securities of a series shall
be issuable in denominations of $1,000 and any integral multiple thereof and any
Bearer Securities of a series shall be issuable in denominations of $5,000 and
$100,000.
SECTION II.4 Execution, Authentication, Delivery and Dating. The
Securities shall be executed on behalf of the Company by its Chairman of the
Board, one of its Vice Chairmen, its
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<PAGE> 22
President or one of its Vice Presidents, or the Treasurer or any Assistant
Treasurer, attested by its Secretary or one of its Assistant Secretaries. The
signature of any of these officers on the Securities may be manual or facsimile.
Coupons shall bear the facsimile signature of the Treasurer or any Assistant
Treasurer of the Company.
Securities and coupons bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Securities or
did not hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery of
this Indenture (and subject to delivery of the Board Resolution or Officers'
Certificate or supplemental indenture as set forth in Section 2.3 with respect
to the initial issuance of Securities of any series), the Company may deliver
Securities of any series together with any coupons appertaining thereto,
executed by the Company to the Trustee or its authenticating agent with respect
to Bearer Securities for authentication, together with a Company Order for the
authentication and delivery of such Securities; and the Trustee or its
authenticating agent with respect to Bearer Securities in accordance with such
Company Order shall authenticate and deliver such Securities; provided, however,
that, with respect to Securities of a series subject to a Periodic Offering, (a)
such Company Order may be delivered by the Company to the Trustee or its
authenticating agent with respect to Bearer Securities prior to the delivery to
the Trustee of such Securities for au thentication and delivery, (b) the Trustee
shall authenticate and deliver Securities of such series for original issue from
time to time, in an aggregate Principal Amount not exceeding the aggregate
Principal Amount established for such series, pursuant to a Company Order or
pursuant to such procedures acceptable to the Trustee as may be specified from
time to time by a Company Order, (c) the rate or rates of interest, if any, the
Stated Maturity or Maturities, the original issue date or dates, the redemption
provisions, if any, and any other terms of Securities of such series shall be
determined by a Company Order or pursuant to such procedures and (d) if provided
for in such procedures, such Company Order may authorize authentication and
delivery pursuant to oral or electronic instructions from the Company, or the
Company's duly authorized agent or agents designated in an Officers'
Certificate, which oral instructions shall be promptly confirmed in writing; and
provided, further, that, no Bearer Security or coupon shall be mailed or
otherwise delivered to any person who is not a United States Alien or to any
location in the United States. Except as permitted by Section 2.9, the
authenticating agent shall not authenticate and deliver any Bearer Security
unless all appurtenant coupons for interest then matured have been detached and
cancelled.
If the forms or terms of the Securities of the series and any related
coupons have been established in or pursuant to one or more Officers'
Certificates as permitted by Sections 2.1 and 2.3(a), in authenticating such
Securities, and accepting the additional responsibilities under this Indenture
in relation to such Securities, the Trustee shall be entitled to receive, and
(subject to Section 7.1) shall be fully protected in relying upon, an Opinion of
Counsel stating:
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<PAGE> 23
(a) that the form and terms of such Securities and any coupons have been
duly authorized by the Company and established in conformity with the provisions
of this Indenture; and
(b) that such Securities, together with any coupons appertaining
thereto, when authenti cated and delivered by the Trustee or its authenticating
agent and issued by the Company in the manner and subject to any conditions
specified in such Opinion of Counsel, will constitute valid and legally binding
obligations of the Company, enforceable in accordance with their terms, subject
to customary exceptions;
provided, however, that, with respect to Securities of a series subject to a
Periodic Offering, the Trustee shall be entitled to receive such Opinion of
Counsel only once at or prior to the time of the first authentication of
Securities of such series (provided that such Opinion of Counsel covers all
Securities of such series) and that the Opinion of Counsel above may state:
(x) that the forms of such Securities have been, and the terms of
such Securities (when established in accordance with such procedures as
may be specified from time to time in a Company Order, all as
contemplated by and in accordance with a Board Resolution or an
Officers' Certificate or supplemental indenture pursuant to Section
2.3(a), as the case may be) will have been, duly authorized by the
Company and established in conformity with the provisions of this
Indenture; and
(y) that such Securities, together with the coupons, if any,
appertaining thereto, when (1) executed by the Company, (2) completed,
authenticated and delivered by the Trustee or in the case of Bearer
Securities and coupons, an authenticating agent located outside the
United States, in accordance with this Indenture, and (3) issued by the
Company in the manner and subject to any conditions specified in such
Opinion of Counsel, will constitute valid and legally binding
obligations of the Company, enforce able in accordance with their terms,
subject to customary exceptions.
With respect to Securities of a series subject to a Periodic Offering,
the Trustee may conclusively rely, as to the authorization by the Company of any
of such Securities, the form and terms thereof and the legality, validity,
binding effect and enforceability thereof, upon the Opinion of Counsel and other
documents delivered pursuant to Sections 2.1 and 2.3(a) and this Section, as
applicable, at or prior to the time of the first authentication of Securities of
such series unless and until it has received written notification that such
opinion or other documents have been superseded or revoked. In connection with
the authentication and delivery of Securities of a series subject to a Periodic
Offering, the Trustee shall be entitled to assume, unless it has actual
knowledge to the contrary, that the Company's instructions to authenticate and
deliver such Securities do not violate any rules, regulations or orders of any
governmental agency or commission having jurisdiction over the Company.
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<PAGE> 24
Notwithstanding the provisions of Section 2.3(a) and of the preceding
three paragraphs, if all Securities of a series are subject to a Periodic
Offering, it shall not be necessary to deliver the Officers' Certificate
otherwise required pursuant to Section 2.3(a) at or prior to the time of
authentication of each Security of such series if such Officers' Certificate is
delivered at or prior to the authentication upon original issuance of the first
Security of such series to be issued.
Each Registered Security shall be dated the date of its authentication;
and, unless otherwise specified as contemplated by Section 2.3(a), each Bearer
Security (including a Bearer Security represented by a temporary global
Security) shall be dated as of the date of original issuance of the first
Security of such series to be issued.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Securities. Unless otherwise provided in the
appointment, an authenticating agent may authenticate Securities whenever the
Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent.
No Security or coupon 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 duly executed by the Trustee by manual signature of an authorized
signatory, and such certificate upon any Security shall be conclusive evidence,
and the only evidence, that such Security has been duly authenticated and
delivered hereunder. The Trustee's certificate of authentication shall be in
substantially the following form:
This is one of the Securities of the series designated therein referred
to in the within-mentioned Indenture.
The Bank of New York, as Trustee
By:
---------------------------------------
Authorized Signatory
Notwithstanding the foregoing, if any Security shall have been duly
authenticated and delivered hereunder but never issued and sold by the Company,
and the Company shall deliver such Security to the Trustee for cancellation as
provided in Section 2.12 together with a written statement (which need not
comply with Section 12.4 or 12.5 and need not be accompanied by an Opinion of
Counsel) stating that such Security has never been issued and sold by the
Company, for all purposes of this Indenture such Security shall
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<PAGE> 25
be deemed never to have been authenticated and delivered hereunder and shall
never be entitled to the benefits of this Indenture.
SECTION II.5 Registrar and Paying Agent. The Company shall maintain,
with respect to each series of Securities, an office or agency where such
Securities may be presented for registration of transfer or for exchange
("Registrar") and an office or agency where such Securities may be presented for
purchase or payment ("Paying Agent"). The Registrar shall keep a register of the
Securities and of their transfer and exchange. The Company may have one or more
co-registrars and one or more additional paying agents. The term Paying Agent
includes any additional paying agent.
The Company shall enter into an appropriate agency agreement with
respect to each series of Securities with any Registrar, Paying Agent or
co-registrar (if not the Trustee). The agreement shall implement the provisions
of this Indenture that relate to such agent. The Company shall notify the
Trustee of the name and address of any such agent. If the Company fails to
maintain a Registrar or Paying Agent for a particular series of Securities, the
Trustee shall act as such and shall be entitled to appropriate compensa tion
therefor pursuant to Section 7.7. The Company or any Subsidiary or an Affiliate
of either of them may act as Paying Agent, Registrar or co-registrar.
The Company initially appoints the Trustee as the Registrar and Paying
Agent in connection with such Securities and the Trustee, acting through its
main office in London or as provided in the Officer's Certificate establishing
the Securities, as paying agent and authenticating agent for Bearer Securities.
SECTION II.6 Paying Agent to Hold Money and Securities in Trust. Except
as otherwise provided herein, prior to or on each due date of payments in
respect of any series of Securities, the Company shall deposit with the Paying
Agent with respect to such Securities a sum of money sufficient to make such
payments when so becoming due. The Company shall require each Paying Agent
(other than the Trustee) to agree in writing that the Paying Agent shall hold in
trust for the benefit of Holders or the Trustee all money held by such Paying
Agent for the making of payments in respect of the Securities of such series and
shall notify the Trustee of any default by the Company in making any such
payment. At any time during the continuance of any such default, a Paying Agent
shall, upon the written request of the Trustee, forthwith pay to the Trustee all
money so held in trust with respect to such Securities. If the Company, a
Subsidiary or an Affiliate of either of them acts as Paying Agent for a series
of Securities, it shall segregate the money held by it as Paying Agent with
respect to such Securities and hold it as a separate trust fund. The Company at
any time may require a Paying Agent for a series of Securities to pay all money
held by it with respect to such Securities to the Trustee and to account for any
money disbursed by it. Upon doing so, such Paying Agent shall have no further
liability for the money.
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SECTION II.7 Securityholder Lists. The Trustee shall preserve in as
current a form as is reasonably practicable the most recent list available to it
of the names and addresses of Holders of each series of Securities. If the
Trustee is not the Registrar for any series of Securities, the Company shall
cause to be furnished to the Trustee at least semiannually on June 1 and
December 1 a listing of Holders of such series of Securities dated within 15
days of the date on which the list is furnished and at such other times as the
Trustee may request in writing a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of Securityholders of
such series of Securities.
SECTION II.8 Transfer and Exchange. Upon surrender for registration of
transfer of any Security at the office or agency of the Company designated
pursuant to Section 4.5 for such purpose in a Place of Payment, the Company
shall execute, and the Trustee shall authenticate and deliver, in the name of
the designated transferee or transferees, one or more new Securities of any
authorized denomination or denominations of a like aggregate Principal Amount
and tenor. The Company shall not charge a service charge for any registration of
transfer or exchange, but the Company may require payment of a sum sufficient to
pay all taxes, assessments or other governmental charges that may be imposed in
connection with the transfer or exchange of the Securities from the
Securityholder requesting such transfer or exchange (other than any exchange of
a temporary Security for a definitive Security not involving any change in
ownership or any exchange pursuant to Section 2.11, 3.6, 9.5 or 10.3, not
involving any transfer).
Notwithstanding any other provisions (other than the provisions set
forth in the sixth and seventh paragraphs) of this Section, a Security in global
form representing all or a portion of the Securities of a series may not be
transferred except as a whole by the Depositary for such series to a nominee of
such Depositary or by a nominee of such Depositary to such Depositary or another
nominee of such Depositary or by such Depositary or any such nominee to a
successor Depositary for such series or a nominee of such successor Depositary.
At the option of the Holder, Registered Securities of any series may be
exchanged for other Registered Securities of the same series of any authorized
denomination or denominations, of a like aggregate Principal Amount and tenor,
upon surrender of the Securities to be exchanged at such office or agency.
Whenever any Securities are so surrendered for exchange, the Company shall
execute, and the Trustee shall authenticate and deliver, the Securities which
the Holder making the exchange is entitled to receive. Bearer Securities may not
be issued in exchange for Registered Securities.
At the option of the Holder, Bearer Securities of any series may be
exchanged for Registered Securities of the same series of any authorized
denomination or denominations and of a like aggregate Principal Amount and
tenor, upon surrender of the Bearer
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<PAGE> 27
Securities to be exchanged at any office or agency of the Company
located outside the United States, with all unmatured coupons and all matured
coupons in default thereto appertaining. If the Holder of a Bearer Security is
unable to produce any such unmatured coupon or coupons or matured coupon or
coupons in default, such exchange may be effected if the Bearer Securities are
accompanied by payment in funds acceptable to the Company and the Trustee or
Paying Agent in an amount equal to the face amount of such missing coupon or
coupons, or the surrender of such missing coupon or coupons may be waived by the
Company, the Paying Agent and the Trustee if there is furnished to them such
security or indemnity as they may require to save each of them and any Paying
Agent harmless. If thereafter the Holder of such Security shall surrender to any
Paying Agent any such missing coupon in respect of which such a payment shall
have been made, such Holder shall be entitled to receive the amount of such
payment; provided, however, that, except as otherwise provided in Section 4.5,
interest represented by coupons shall be payable only upon presentation and
surrender of those coupons at an office or agency located outside the United
States. Notwithstanding the foregoing, in case a Bearer Security of any series
is surrendered at any such office or agency in exchange for a Regis tered
Security of the same series and like tenor after the close of business at such
office or agency on (i) any Regular Record Date and before the opening of
business at such office or agency on the relevant Interest Payment Date, or (ii)
any Special Record Date and before the opening of business at such office or
agency on the related proposed date for payment of Defaulted Interest, such
Bearer Security shall be surrendered without the coupon relating to such
Interest Payment Date or proposed date for payment, as the case may be, and
interest or Defaulted Interest, as the case may be, will not be payable on such
Interest Payment Date or proposed date for payment, as the case may be, in
respect of the Registered Security issued in exchange for such Bearer Security,
but will be payable only to the Holder of such coupon when due in accordance
with the provisions of this Inden ture.
Whenever any Securities are so surrendered for exchange, the Company
shall execute, and the Trustee or a duly appointed authenticating agent shall
authenticate and deliver, the Securities which the Holder making the exchange is
entitled to receive.
If at any time the Depositary for the Securities of a series notifies
the Company that it is unwilling or unable to continue as Depositary for the
Securities of such series, the Company shall appoint a successor Depositary with
respect to the Securities of such series. If a successor Depositary for the
Securities of such series is not appointed by the Company within 90 days after
the Company receives such notice, the Company will execute, and the Trustee,
upon receipt of a Company Order for the authentication and delivery of
definitive Securities of such series, will authenticate and deliver Securities
of such series in definitive form in an aggregate Principal Amount equal to the
Principal Amount of the Security or Securities in global form representing such
series in exchange
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<PAGE> 28
for such Security or Securities in global form in accordance with the
instructions, if any, of the Depositary.
The Company may at any time and in its sole discretion determine that
the Securities of any series issued 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 Order
for the authentication and delivery of definitive Securities of such series,
will authenticate and deliver Securities of such series in definitive form and
in an aggregate Principal Amount equal to the Principal Amount of the Security
or Securities in global form representing such series in exchange for such
Security or Securities in global form in accordance with the instructions, if
any, of the Depositary.
Notwithstanding the foregoing, except as otherwise specified in the
preceding two paragraphs or as contemplated by Section 2.3(a), any global
Security shall be exchange able only as provided in this paragraph. If the
beneficial owners of interests in a global Security are entitled to exchange
such interests for definitive Securities of such series and of like Principal
Amount and tenor but of another authorized form and denomination, as specified
as contemplated by Section 2.3(a), then without unnecessary delay but in any
event not later than the earliest date on which such interests may be so
exchanged, the Company shall deliver to the Trustee definitive Securities in
aggregate Principal Amount equal to the Principal Amount of such global
Security, executed by the Company. On or after the earliest date on which such
interests may be so exchanged, such global Security shall be surrendered by the
Depositary with respect thereto to the Trustee, as the Com pany's agent for such
purpose, to be exchanged, in whole or from time to time in part, for definitive
Securities without charge and the Trustee or, in the case of Bearer Securities,
an authenticating agent outside the United States shall authenticate and
deliver, in exchange for each portion of such global Security, an equal
aggregate Principal Amount of definitive Securities of the same series of
authorized denominations and of like tenor as the portion of such global
Security to be exchanged which, unless the Securities of the series are not
issuable both as Bearer Securities and as Registered Securities, as specified as
contem plated by Section 2.3(a), shall be in the form of Bearer Securities or
Registered Securities, or any combination thereof, as shall be specified by the
beneficial owner thereof; pro vided, however, that notwithstanding the last
paragraph of this Section 2.8, no such ex changes may occur during a period
beginning at the opening of business 15 days before any selection of Securities
of that series to be redeemed and ending on the relevant Redemption Date; and
provided, further, that no Bearer Security or coupon delivered in exchange for a
portion of a global Security shall be mailed or otherwise delivered to any
person that is not a United States Alien or to any location in the United
States. If a Registered Security is issued in exchange for any portion of a
global Security after the close of business at the office or agency where such
exchange occurs on (i) any Regular Record Date and before the opening of
business at such office or agency on the relevant
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<PAGE> 29
Interest Payment Date, or (ii) any Special Record Date and before the opening of
business at such office or agency on the related proposed date for payment of
Defaulted Interest, interest or Defaulted Interest, as the case may be, will not
be payable on such Interest Payment Date or proposed date for payment, as the
case may be, in respect of such Registered Security, but will be payable on such
Interest Payment Date or proposed date for payment, as the case may be, only to
the Person to whom interest in respect of such portion of such global Security
is payable in accordance with the provisions of this Indenture.
Upon the exchange of a Security in global form for Securities in
definitive form, such Security in global form shall be cancelled by the Trustee.
All cancelled Securities and coupons held by the Trustee shall be destroyed by
the Trustee and a certificate of their destruction delivered to the Company
unless the Company directs, by Company Order, that the Trustee shall cancel
Securities and return them to the Company. Registered Secu rities issued in
exchange for a Security in global form pursuant to this Section 2.8 shall be
registered in such names and in such authorized denominations as the Depositary
for such Security in global form, pursuant to instructions from its direct or
indirect participants or otherwise, shall instruct the Trustee. The Trustee
shall deliver such Registered Securities to the persons in whose names such
Securities are so registered.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
Every Registered Security presented or surrendered for registration of
transfer or for exchange shall be duly endorsed, or be accompanied by a written
instrument of transfer in form satisfactory to the Company and the Registrar
duly executed, by the Holder thereof or his attorney duly authorized in writing.
The Company shall not be required (i) to issue, register the transfer of
or ex change Securities of any series during a period beginning at the opening
of business 15 days before any selection of Securities of that series to be
redeemed and ending (except as otherwise provided in the first proviso in the
eighth paragraph of this Section 2.8) at the close of business on (A) if
Securities of the Series are issuable only as Registered Securi ties, the day of
the mailing of the relevant notice of redemption and (B) if Securities of the
series are issuable as Bearer Securities, the day of the first publication of
the relevant notice of redemption or, if Securities of the series are also
issuable as Registered Securities and there is no publication, the mailing of
the relevant notice of redemption, or (ii) to register the transfer of or
exchange any Registered Security so selected for redemption, in whole or in
part, except the unredeemed portion of any Security being redeemed in part, or
(iii) to exchange any Bearer Security so selected for redemption except that
such a
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Bearer Security may be exchanged for a Registered Security of that series
and like tenor, provided that such Registered Security shall be simultaneously
surrendered for redemp tion.
SECTION II.9 Replacement Securities and Coupons. If (a) any mutilated
Security or a Security with a mutilated coupon appertaining thereto is
surrendered to the Trustee or paying agent outside the United States, or (b) the
Company and the Trustee receive evidence to their satisfaction of the
destruction, loss or theft of any Security or coupon, and 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 written notice to
the Company, any such paying agent or the Trustee that such Security or coupon
has been acquired by a bona fide purchaser, the Company shall execute and upon
its written request the Trustee or paying agent outside the United States shall
authenticate and deliver, in exchange for any such mutilated Security or coupon
or in lieu of any such destroyed, lost or stolen Security or coupon, or in
exchange for the Security to which a mutilated, destroyed, lost or stolen coupon
appertains (with all appurtenant coupons not mutilated, destroyed, lost or
stolen), a new Security of the same series and of like tenor and Principal
Amount, bearing a number not contemporaneously outstanding, with coupons
corresponding to the coupons, if any, appertaining to such destroyed, lost or
stolen Security or coupon, or to the Security to which such destroyed, lost or
stolen coupon appertains.
In case any such mutilated, destroyed, lost or stolen Security or coupon
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 or coupon; provided,
however, that the Principal of and any interest on Bearer Securities shall,
except as otherwise provided in Section 4.5, be payable only at an office or
agency located outside the United States and, unless otherwise specified as
contemplated by Section 2.3(a), any interest on Bearer Securities shall be
payable only upon presentation and surrender of the coupons apper taining
thereto.
Upon the issuance of any new Securities under this Section, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security of any series issued pursuant to this Section in lieu
of any mutilated, destroyed, lost or stolen Security, or in exchange for a
Security to which a mutilated, destroyed, lost or stolen coupon appertains,
shall constitute an original addi tional contractual obligation of the Company,
whether or not the destroyed, lost or stolen Security and its coupons, if any,
or the destroyed, lost or stolen coupon shall be at any time enforceable by
anyone, and any such new Security and coupons, if any, shall be
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<PAGE> 31
entitled to all benefits of this Indenture equally and proportionately with any
and all other Securities of that issue and their coupons, if any, 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 or coupons.
SECTION II.10 Outstanding Securities; Determinations of Holders' Action
. Securities of any series "Outstanding" at any time are, as of the date of
determination, all the Securities of such series theretofore authenticated by
the Trustee for such series except for those cancelled by it, those delivered to
it for cancellation and those described in this Section 2.10 as not outstanding.
A Security does not cease to be "Outstanding" because the Company or an
Affiliate thereof holds the Security; provided, however, that in determining
whether the Holders of the requisite Principal Amount of Outstanding Securities
have given or concurred in any request, demand, authorization, direction,
notice, consent or waiver hereunder, Securities owned by the Company or any
other obligor upon the Securities or any Affiliate of the Company or such other
obligor shall be disregarded and deemed not to be outstanding, except that, in
determining whether the Trustee shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent or waiver, only
Securities which a Trust Officer knows to be so owned shall be so disre garded.
Securities so owned which have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the Trustee the
pledgee's right so to act with respect to such Securities and that the pledgee
is not the Company or any other obligor upon the Securities or any Affiliate of
the Company or of such other obligor. Subject to the foregoing, only Securities
outstanding at the time of such determination shall be considered in any such
determination (including, without limitation, determinations pursuant to
Articles 6 and 9). In addition, in determining whether the Holders of the
requisite Principal Amount of Outstanding Securities have given or concurred in
any request, demand, authorization, direction, notice, consent or waiver
hereunder, (i) the Principal Amount of a 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 such determination upon acceleration of the
Maturity thereof pursuant to Section 6.2, (ii) the Principal Amount of a
Security denominated in a foreign currency or currencies shall be the Dollar
equivalent, as determined on the date of original issuance of such Security, of
the Principal Amount (or, in the case of a Discount Security, the Dollar
equivalent on the date of original issuance of such Security of the amount
determined as provided in (i) above) of such Security.
If a Security has been paid pursuant to Section 2.9 or in exchange for
or in lieu of which another Security has been authenticated and delivered
pursuant to this Indenture, it ceases to be outstanding unless the Trustee
receives proof satisfactory to it that the replaced Security is held by a bona
fide purchaser.
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If the Trustee (other than the Company) holds, in accordance with this
Indenture, on a Redemption Date or on Stated Maturity, money sufficient to pay
Securities and any coupons thereto appertaining payable on that date, then on
and after that date such Securities shall cease to be outstanding and interest,
if any, on such Securities shall cease to accrue; 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.
SECTION II.11 Temporary Securities. Pending the preparation of
definitive Securities of any series, the Company may execute, and upon Company
Order the Trustee shall authenticate and deliver, temporary Securities which are
printed, lithographed, typewritten, mimeographed or otherwise produced, in any
authorized denomination, substantially of the tenor of the definitive Securities
in lieu of which they are issued, in registered form or, if authorized, in
bearer form with one or more coupons or without coupons, and with such
appropriate insertions, omissions, substitutions and other variations as the
Officers executing such Securities may determine, as conclusively evidenced by
their execution of such Securities. Such temporary Securities may be in global
form.
Except in the case of Securities represented by a temporary global
Security (which shall be exchanged in accordance with the provisions of the
three succeeding paragraphs), if temporary Securities for some or all of the
Securities of any series are issued, the Company will cause definitive
Securities representing such Securities to be prepared without unreasonable
delay. Subject to Section 2.2, after the preparation of such definitive
Securities, the temporary Securities shall be exchangeable for such definitive
Securities of like tenor upon surrender of the temporary Securities at the
office or agency of the Company designated for such purpose pursuant to Section
4.5 in a Place of Payment for such series for the purpose of exchanges of
Securities of such series, without charge to the Holder. Upon surrender for
cancellation of any one or more temporary Securities of any series (accompanied
by any unmatured coupons appertaining thereto), the Company shall execute and
the Trustee shall authenticate and deliver in exchange therefor a like Principal
Amount of definitive Securities of the same series and of like tenor of
authorized denomi nations; provided, however, that no definitive Bearer Security
or Permanent Global Bearer Security shall be delivered in exchange for a
temporary Registered Security. Until so ex changed the temporary Securities
shall in all respects be entitled to the same benefits under this Indenture as
definitive Securities.
Unless otherwise specified as contemplated by Section 2.3(a), if Bearer
Securities of any series are represented by a Security in temporary global form,
any such temporary global Security shall be delivered to the Depositary for the
benefit of Euro-clear and Cedel S.A., for credit to the respective accounts of
the beneficial owners of such Securities (or to such other accounts as they may
direct).
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Without unnecessary delay but in any event not later than the Exchange
Date, the Company shall deliver to the Trustee or paying agent outside the
United States permanent Securities of the same series which may be in definitive
or global form at the sole discretion of the Company, in aggregate Principal
Amount equal to the Principal Amount of such temporary global Security, executed
by the Company. On or after the Exchange Date, such temporary global Security
shall be surrendered by the Depositary to the Trustee or paying agent outside
the United States, as the Company's agent for such purpose, to be exchanged, in
whole or from time to time in part, for permanent Securities of the same series
which may be in definitive or global form at the sole discretion of the Company
and of like tenor without charge and the Trustee shall authenticate and deliver,
in exchange for each portion of such temporary global Security, an equal
aggregate Principal Amount of definitive Securities or interests in the
Permanent Global Bearer Security of the same series of authorized denominations
and of like tenor as the portion of such temporary global Security to be
exchanged. The permanent Securities to be delivered in exchange for any such
temporary global Security shall be in definitive bearer form or registered form,
or shall be represented by a Permanent Global Bearer Security, or any
combination thereof, as specified as contemplated by Section 2.3(a), and, if any
combination thereof is so specified, as requested by the beneficial owner
thereof provided, that no beneficial owner of a registered Temporary Global
Bearer Security who is not a United States alien or who is located in the United
States shall be entitled to receive Bearer Securities.
Unless otherwise specified in any such Temporary Global Bearer Security,
the interest of a beneficial owner of Securities of a series represented by such
Temporary Global Bearer Security shall be exchanged for permanent Securities of
the same series which may be in definitive or global form at the sole discretion
of the Company and of like tenor following the Exchange Date when the account
holder instructs Euro-clear or Cedel S.A., as the case may be, to request such
exchange on his behalf and delivers to Euro-clear or Cedel S.A., as the case may
be, any certificate specified as contemplated by Section 2.3(a). Unless
otherwise specified in such Temporary Global Bearer Security, any such exchange
shall be made free of charge to the beneficial owners of such Temporary Global
Bearer Security, except that a person receiving permanent Securities must bear
the cost of insurance, postage, transportation and the like in the event that
such person does not take delivery of such permanent Securities in person at the
offices of Euro-clear or Cedel S.A.
Until exchanged in full as hereinabove provided, the temporary
Securities of any series shall in all respects be entitled to the same benefits
under this Indenture as permanent Securities of the same series and of like
tenor authenticated and delivered hereunder, except that, unless otherwise
specified as contemplated by Section 2.3(a), interest payable on a temporary
global Security representing a series of Bearer Securities on an Interest
Payment Date for Securities of such series occurring prior to the applicable
Exchange Date
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shall be payable to Euro-clear and Cedel S.A. on such Interest Payment Date,
upon delivery by Euro-clear and Cedel S.A. to a paying agent outside the United
States of any certificate specified as contemplated by Section 2.3(a), for
credit without further interest on or after such Interest Payment Date to the
respective accounts of the persons who are the beneficial owners of such
Temporary Global Bearer Security on such Interest Payment Date and who have each
delivered to Euro-clear or Cedel S.A., as the case may be, any certificate
specified as contemplated by Section 2.3(a).
SECTION II.12 Cancellation. All Securities or coupons surrendered for
payment, redemption, registration of transfer or exchange, or for credit against
any sinking fund payment, shall, if surrendered to any person other than the
Trustee, be delivered to the Trustee and all Registered Securities and matured
coupons so delivered shall be promptly cancelled by it. All Bearer Securities
and unmatured coupons so delivered shall be held by the Trustee and shall be
cancelled. 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 (including Securities
received by the Company in exchange or payment for other Securities of the
Company) and may deliver to the Trustee (or to any other person for delivery to
the Trustee) for cancellation any Securities previously authenticated hereunder
which the Company has not issued and sold, and all Securities so delivered shall
be promptly cancelled by the Trustee. The Company may not reissue, or issue new
Securities to replace, Securities it has paid or delivered to the Trustee for
cancellation. No Securities shall be authenticated in lieu of or in exchange for
any Securities cancelled as provided in this Section, except as expressly
permitted in the form of Securities for any particular series or as permitted by
this Indenture. All cancelled Securities and coupons held by the Trustee shall
be returned to the Company.
SECTION II.13 Payment of Interest; Interest Rights Preserved. Unless
otherwise provided as contemplated by Section 2.3(a) with respect to any series
of Securities, interest on any Registered 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. In case a Bearer Security of any series is surrendered in
exchange for a Registered Security of such series after the close of business
(at an office or agency in a Place of Payment for such series) on any Regular
Record Date and before the opening of business (at such office or agency) on the
next succeeding Interest Payment Date, such Bearer Security shall be surrendered
without the coupon relating to such Interest Payment Date and interest will not
be payable on such Interest Payment Date in respect of the Registered Security
issued in exchange for such Bearer Security, but will be payable only to the
Holder of such coupon when due in accordance with the provisions of this
Indenture.
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Any interest on any Registered Security of any series which is payable,
but is not punctually paid or duly provided for, on any Interest Payment Date
(herein called "Defaulted Interest") shall forthwith cease to be payable to the
Holder on the relevant Regular Record Date by virtue of having been such Holder,
and such Defaulted Interest may be paid by the Company, at its election in each
case, as provided in clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted
Interest to the persons in whose names the Securities of such series (or
their respective Prede cessor 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 Registered 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 days and not less than 10 days prior to the date of the proposed
payment and not less than 10 days after the receipt by the Trustee of
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 each Holder of Registered
Securities at his address as it appears in the register of the
Securities, not less than 10 days prior to such Special Record Date.
Notice of the proposed payment of such Defaulted Interest and the
Special Record Date therefor having been so mailed, such Defaulted
Interest shall be paid to the persons in whose names the Securities (or
their respective Predecessor Securities) are registered at the close of
business on such Special Record Date and shall no longer be payable
pursuant to the following Clause (2).
(2) The Company may make payment of any Defaulted Interest on
the Registered Securities in any other lawful manner not inconsistent
with the require ments of any securities exchange on which such
Registered Securities may be listed, and upon such notice as may be
required by such exchange, if, after notice given by the Company to the
Trustee of the proposed payment pursuant to this clause, such manner of
payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section and Section 2.8,
each Security delivered under this Indenture upon registration of transfer of or
in exchange for or in lieu
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of any other Security shall carry the rights to interest accrued and unpaid, and
to accrue, which were carried by such other Security.
SECTION II.14 Persons Deemed Owners. Prior to due presentment of a
Registered Security for registration of transfer, the Company, the Trustee and
any agent of the Company or the Trustee may treat the person in whose name such
Registered Security is registered as the owner of such Registered Security for
the purpose of receiving payment of Principal of and (except as otherwise
specified as contem plated by Section 2.3(a) and subject to Section 2.8 and
Section 2.13) interest on such Registered Security and for all other purposes
whatsoever, whether or not such Registered 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.
Title to any Bearer Security and any coupons appertaining thereto shall
pass by delivery. The Company, the Trustee and any agent of the Company or the
Trustee may treat the bearer of any Bearer Security and the bearer of any coupon
as the absolute owner of such Bearer Security or coupon for the purpose of
receiving payment thereof or on account thereof and for all other purposes
whatsoever, whether or not such Bearer Security or coupon 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.
None of the Company, the Trustee, any Paying Agent or the 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 Security in
global form or for maintaining, supervising or reviewing any records relating to
such beneficial ownership interests.
SECTION II.15 Computation of Interest. Except as otherwise specified as
contemplated by Section 2.3(a) for Securities of any series, (i) interest on any
Securities which bear interest at a fixed rate shall be computed on the basis of
a 360-day year comprised of twelve 30-day months and (ii) interest on any
Securities which bear interest at a variable rate shall be computed on the basis
of the actual number of days in an interest period divided by 360.
ARTICLE III
REDEMPTION
SECTION III.1 Right to Redeem; Notices to Trustee. Securities of any
series which are redeemable before their Stated Maturity shall be redeemable in
accordance with their terms and (except as otherwise specified as contemplated
by Section 2.3(a) for Securities of any series) in accordance with this Article.
In the case of any redemption at
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the election of the Company of less than all the Securities of any series, the
Company shall, within the time period set forth below, notify the Trustee in
writing of the Redemption Date, the Principal Amount of and of any other
information necessary to identify the Securities of such series to be redeemed
and the Redemption Price (including the information set forth in clauses (4),
(5) and (6) of Section 3.3).
The Company shall give the notice to the Trustee provided for in this
Section 3.1 at least 60 days before the Redemption Date (unless a shorter notice
shall be satisfactory to the Trustee).
SECTION III.2 Selection of Securities to be Redeemed. Unless otherwise
specified as contemplated by Section 2.3(a) with respect to any series of
Securities, if less than all the Securities of any series with the same issue
date, interest rate and Stated Maturity are to be redeemed, the Trustee shall
select the particular Securities to be redeemed by such method the Trustee
considers fair and appropriate, which method may provide for the selection for
redemption of portions (equal to the minimum authorized denomination for
Securities of that series or any integral multiple thereof) of the Principal
Amount of Registered Securities of such series of a denomination larger than the
minimum authorized denomination for Securities of that series. The Trustee shall
make the selection not more than 60 days before the Redemption Date from
Outstanding Securities of such series not previously called for redemption.
Provisions of this Indenture that apply to Securities called for redemption also
apply to portions of Securities called for redemption. The Trustee shall notify
the Company promptly in writing of the Securities to be redeemed and, in the
case of any portions of Securities to be redeemed, the principal amount thereof
to be redeemed.
SECTION III.3 Notice of Redemption. Unless otherwise specified as
contemplated by Section 2.3(a) with respect to any series of Securi ties, at
least 30 days but not more than 60 days before a Redemption Date, the Company
shall mail a notice of redemption by first-class mail, postage prepaid, to each
Holder of Securities to be redeemed.
The notice shall identify the Securities (including CUSIP/ISIN numbers)
to be re deemed and shall state:
(1 the Redemption Date;
(2 the Redemption Price;
(3 if fewer than all the Outstanding Securities of any series are
to be re deemed, the identification (and, in the case of partial
redemption, the Principal Amounts) of the particular Securities to be
redeemed;
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(4 that on the Redemption Date the Redemption Price will become
due and payable upon each such Security (or portion thereof) to be
redeemed and, if applicable, that interest thereon will cease to accrue
on and after said date;
(5 the place or places where such Securities, together in the
case of Bearer Securities with all coupons appertaining thereto, if any,
maturing after the Redemption Date, are to be surrendered for payment of
the Redemption Price; and
(6 that the redemption is for a sinking fund, if such is the
case.
A notice of redemption published as contemplated by Section 12.2 need not
identify particular Registered Securities to be redeemed.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense; provided,
however, that, in all cases, the text of such Company notice shall be prepared
by the Company.
SECTION III.4 Effect of Notice of Redemption. Once notice of redemption
is given, Securities called for redemption become due and payable on the
Redemption Date and at the Redemption Price stated in the notice, and from and
after such date (unless the Company shall default in the payment of the
Redemption Price and accrued interest) such Securities shall cease to bear
interest and the coupons for such interest appertaining to any Bearer Securities
so to be redeemed, except to the extent provided below, shall be void. Upon
surrender of any such Security for redemption in accordance with said notice,
together with all coupons, if any, appertaining thereto maturing after the
Redemption Date, such Security shall be paid by the Company at the Redemption
Price, together with accrued interest to the Redemption Date; provided, however,
that installments of interest on Bearer Securities whose Stated Maturity is on
or prior to the Redemption Date shall be payable only at an office or agency
located outside the United States (except as otherwise provided in Section 4.5)
and, unless otherwise specified as contemplated by Section 2.3(a), only upon
presentation and surrender of coupons for such interest; and provided, further,
that, unless otherwise specified as contemplated by Section 2.3(a), installments
of interest on Registered Securities whose Stated Maturity is on or prior to the
Redemption Date shall be payable to the Holders of such Securities, or one or
more Predecessor Securities, registered as such at the close of business on the
relevant Regular Record Dates according to their terms and the provisions of
Sections 2.8 and 2.13.
If any Bearer Security surrendered for redemption shall not be
accompanied by all appurtenant coupons maturing after the Redemption Date, such
Security may be paid after deducting from the Redemption Price an amount equal
to the face amount of all such miss ing coupons, or the surrender of such
missing coupon or coupons may be waived by the Company and a paying agent
located outside the United States if there be furnished to the
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Company, the Trustee and such paying agent such security or indemnity as they
may require to save each of them and any Paying Agent harmless. If thereafter
the Holder of such Security shall surrender to any Paying Agent any such missing
coupon in respect of which a deduction shall have been made from the Redemption
Price, such Holder shall be entitled to receive the amount so deducted;
provided, however, that interest represented by coupons shall be payable only at
an office or agency located outside the United States (except as otherwise
provided in Section 4.5) and, unless otherwise specified as contem plated by
Section 2.3(a), only upon presentation and surrender of those coupons.
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 prescribed therefor in the Security.
SECTION III.5 Deposit of Redemption Price. Prior to 10:00 am, New York
Time on the Redemption Date, the Company shall deposit in the Place of Payment
with the Paying Agent (or if the Company or a Subsidiary or an Affiliate of
either of them is the Paying Agent, shall segregate and hold in trust) money
sufficient to pay the Redemption Price and (except if the Redemption Date shall
be an Interest Payment Date) accrued interest on, of all Securities to be
redeemed on that date other than Securities or portions of Securities called for
redemption which prior thereto have been delivered by the Company to the Trustee
for cancellation. If such money is then held by the Company in trust and is not
required for such purpose, it shall be discharged from such trust.
SECTION III.6 Securities Redeemed in Part. Any Registered Security which
is to be redeemed only in part shall be surrendered at a Place of Payment
therefor (with, if the Company or the Trustee so requires, due endorsement by,
or a written instrument of transfer in form satisfactory to the Company and the
Trustee duly executed by, the Holder thereof or his attorney duly authorized in
writing), and upon such surrender, the Company shall execute and the Trustee
shall authenticate and deliver to the Holder of such Security a new Registered
Security or Securities of the same series and of like tenor, in an authorized
denomination as requested by such Holder, equal in aggregate Principal Amount to
and in exchange for the unredeemed portion of the Principal of the Security
surrendered.
ARTICLE IV
COVENANTS
SECTION IV.1 Payment of Securities. The Company shall promptly make all
payments in respect of each series of Securities on the dates and in the manner
provided in the Securities and any coupons appertaining thereto and, to the
extent not otherwise so provided, pursuant to this Indenture. An installment of
Principal of or interest on the
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Securities shall be considered paid on the date it is due if the Trustee or a
Paying Agent (other than the Company or an Affiliate of the Company) holds on
that date funds (in the currency or currencies of payment with respect to such
Securi ties) designated for and sufficient to pay such installment. Unless
otherwise specified as contemplated by Section 2.3(a) with respect to any series
of Securities, any interest due on Bearer Securities on or before Maturity shall
be payable only upon presentation and surrender of the several coupons for such
interest installments as are evidenced thereby as they severally mature. At the
Company's option, payments of Principal or interest may be made by check or by
transfer to an account maintained by the payee subject, in the case of Bearer
Securities, to the provisions of Section 4.5.
SECTION IV.2 SEC Reports. The Company shall file with the Trustee,
within 15 days after it files such annual and quarterly reports, information,
documents and other reports with the SEC, copies of its annual report and of the
information, documents and other reports (or copies of such portions of any of
the foregoing as the SEC may by rules and regulations prescribe) which the
Company is re quired to file with the SEC pursuant to Section 13 or 15(d) of the
Exchange Act. The Company also shall comply with the other provisions of TIA
Section 314(a).
SECTION IV.3 Compliance Certificate. The Company shall deliver to the
Trustee within 120 days after the end of each fiscal year (beginning with the
fiscal year ending on July 31, 1997) an Officers' Certificate stating whether or
not the signers know of any Default that occurred during such period. If they
do, such Officers' Certificate shall describe the Default and its status.
SECTION IV.4 Further Instruments and Acts. Upon request of the Trustee,
the Company will execute and deliver such further instruments and do such
further acts as may be reasonably necessary or proper to carry out more
effectively the purposes of this Indenture.
SECTION IV.5 Maintenance of Office or Agency. If Securities of a series
are issuable only as Registered Securities, the Company will maintain in each
Place of Payment for such series an office or agency where Securi ties of that
series may be presented or surrendered for payment, where Securities of that
series may be surrendered for registration of transfer or exchange and where
notices and demands to or upon the Company in respect of the Securities of that
series and this Indenture may be served. If Securities of a series are issuable
as Bearer Securities, the Company will maintain (A) in the Borough of Manhattan,
the City of New York, an office or agency where any Registered Securities of
that series may be presented or surrendered for payment, where any Registered
Securities of that series may be surrendered for registration of transfer, where
Securities of that series may be surrendered for exchange, purchase or
redemption and where notices and demands to or upon the Company in respect of
the Securities of that
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series and this Indenture may be served and where Bearer Securities of that
series and related coupons may be presented or surrendered for payment in the
circumstances described in the following paragraph (and not otherwise), (B)
subject to any laws or regulations applicable thereto, in a Place of Payment for
that series which is located outside the United States, an office or agency
where Securities of that series and related coupons may be presented and
surrendered for payment (including payment of any additional amounts payable on
Securities of that series pursuant to Section 4.6), and (C) subject to any laws
or regulations applicable thereto, in a Place of Payment for that series located
outside the United States an office or agency where any Registered Securities of
that series may be surrendered for registration of transfer, where Securities of
that series may be surrendered for exchange and where notices and demands to or
upon the Company in respect of the Securities of that series and this Indenture
may be served. The office of the Trustee in New York, New York, shall be such
office or agency for all of the afore said purposes unless the Company shall
maintain some other office or agency for such purposes and shall give prompt
written notice to the Trustee of the location, and any change in the location,
of such other office or agency. If at any time the Company shall fail to
maintain any such required office or agency in respect of any series of
Securities or shall fail to furnish the Trustee with the address thereof, such
presentations and surrenders of Securities of that series may be made and
notices and demands may be made or served at the address of the Trustee set
forth in Section 12.2, except that Bearer Securities of that series and the
related coupons may be presented and surrendered for payment (including payment
of any additional amounts payable on Bearer Securities of that series pursuant
to Section 4.6) at the place specified for that purpose as contemplated by
Section 2.3(a) or, if no such place is specified, at the main office of The Bank
of New York, London branch, and the Company hereby appoints the same as its
agent to receive such respective presentations, surrenders, notices and demands.
No payment of Principal or interest on Bearer Securities shall be made
at any office or agency of the Company in the United States, by check mailed to
any address in the United States, by transfer to an account located in the
United States or upon presentation or surrender in the United States of a Bearer
Security or coupon for payment, even if the payment would be credited to an
account located outside the United States; provided, however, that, if the
Securities of a series are denominated and payable in Dollars, payment of
Principal of and any interest on any such Bearer Security (including any
additional amounts payable on Securities of such series pursuant to Section 4.6)
shall be made at the office of the Company's Paying Agent in the Borough of
Manhattan, The City of New York, if (but only if) payment in Dollars of the full
amount of such Principal, interest or additional amounts, as the case may be, at
all offices or agencies outside the United States maintained for such purpose by
the Company in accordance with this Indenture is illegal or effectively
precluded by exchange controls or other similar restrictions.
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The Company may also from time to time designate one or more other
offices or agencies where the Securities of one or more series may be presented
or surrendered for any or all such purposes and may from time to time rescind
such designations; provided, however, that no such designation or rescission
shall in any manner relieve the Company of its obligation to maintain an office
or agency in accordance with the requirements set forth above for Securities of
any series for such purposes. The Company will give prompt written notice to the
Trustee of any such designation or rescission and of any change in the location
of any such other office or agency.
SECTION IV.6 Additional Amounts. If specified as contemplated by Section
2.3(a), the Securities of a series may provide for the payment of additional
amounts, and in such case, the Company will pay to the Holder of any Security of
such series or any coupon appertaining thereto additional amounts as provided
therein. Wherever in this Indenture there is mentioned, in any context, the
payment of the Principal of or any interest on, or in respect of, any Security
of any series or payment of any related coupon, such mention shall be deemed to
include mention of the payment of additional amounts provided for in this
Section to the extent that, in such context, addi tional amounts are, were or
would be payable in respect thereof pursuant to the provisions of this Section
and express mention of the payment of additional amounts (if applicable) in any
provisions hereof shall not be construed as excluding additional amounts in
those provisions hereof where such express mention is not made.
If the Securities of a series provide for the payment of additional
amounts, at least 10 days prior to the first Interest Payment Date with respect
to that series of Securities (or if the Securities of that series will not bear
interest prior to Maturity, the first day on which payment of Principal is
made), and at least 10 days prior to each date of payment of Principal and any
interest if there has been any change with respect to the matters set forth in
the below-mentioned Officers' Certificate, the Company will furnish the Trustee
and the Company's Paying Agent or Paying Agents, if other than the Trustee, with
an Officers' Certificate instructing the Trustee and such Paying Agent or Paying
Agents whether such payment of Principal of and any interest on the Securities
of that series shall be made to Holders of Securities of that series or any
related coupons who are United States Aliens without withholding for or on
account of any tax, assessment or other governmental charge described in the
Securities of that series. If any such withholding shall be required, then such
Officers' Certificate shall specify by country the amount, if any, required to
be withheld on such payments to such Holders of Securities or coupons and the
Company will pay to the Trustee or such Paying Agent the additional amounts
required by the Securities of such series and this Section. The Company
covenants to indemnify the Trustee and any Paying Agent for, and to hold them
harmless against, any loss, liability or expense reasonably incurred without
negligence or bad faith on their part arising out of or in connection with
actions taken or omitted by any of them in reliance on any Officers' Certificate
furnished pursuant to this Section.
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ARTICLE V
SUCCESSOR CORPORATION
SECTION V.1 When Company May Merge or Transfer Assets.V.1 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 convey or transfer (by lease, assignment, sale or otherwise)
all or substantially all 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 conveyed or transferred
(i) shall be a corporation, partnership, limited liability company or
trust orga nized and validity 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;
(b) immediately after giving effect to such transaction and the
assumption contemplated by clause (a)(ii) above, no Default or 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 consolida
tion, merger, conveyance or transfer and, if a supplemental indenture is
required in connection with such transaction, such supplemental
indenture, comply with this Article and that all conditions precedent
herein provided for relating to such transaction have been satisfied.
For purposes of the foregoing, the conveyance or 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 conveyance or 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 or transfer
is made shall
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succeed to, and be substituted for, and may exercise every right and power of
the Com pany 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 from all obligations and covenants under this Indenture, the
Securities and coupons. 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 VI
DEFAULTS AND REMEDIES
SECTION VI.1 Events of Default. Unless otherwise specified as
contemplated by Section 2.3(a) with respect to any series of securities, an
"Event of Default" occurs, with respect to each series of the Securities
individually, if:
(1 the Company defaults in (a) the payment of the principal of
any Security of such series at its Maturity or (b) the payment of any
interest upon any Security of such series when the same becomes due and
payable and continuance of such default for a period of 30 days;
(2 the Company fails to comply with any of its agreements in the
Securi ties or this Indenture (other than those referred to in clause
(1) above and other than a covenant or warranty a default in whose
performance or whose breach is elsewhere in this Section specifically
dealt with or which has been expressly included in this Indenture solely
for the benefit of a series of Securities other than such series) and
such failure continues for 60 days after receipt by the Company of a
Notice of Default;
(3 there shall have been the entry by a court of competent
jurisdiction of (a) a decree or order for relief in respect of the
Company in an involuntary case or proceeding under any applicable
Bankruptcy Law or (b) a decree or order adjudg ing the Company bankrupt
or insolvent, or seeking reorganization, arrangement, adjustment or
composition of or in respect of the Company under any applicable federal
or state law, or appointing a custodian, receiver, liquidator, assignee,
trustee, sequestrator (or other similar official) of the Company or of
any substan tial part of its property, or ordering the wind up or
liquidation of its affairs, and any such decree or order for relief
shall continue to be in effect, or any such other decree or order shall
be unstayed and in effect, for a period of 60 consecutive days;
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(4 (a) the Company commences a voluntary case or proceeding under
any applicable Bankruptcy Law or any other case or proceeding to be
adjudicated bankrupt or insolvent, (b) the Company consents to the entry
of a decree or order for relief in respect of the Company in an
involuntary case or proceeding under any applicable Bankruptcy Law or to
the commencement of any bankruptcy or insolvency case or proceeding
against it, (c) the Company files a petition or answer or consent
seeking reorganization or substantially comparable relief under any
applicable federal state law, (d) the Company (x) consents to the filing
of such petition or the appointment of, or taking possession by, a
custodian, receiver, liquidator, assignee, trustee, sequestrator or
similar official of the Company or of any substantial part of its
property, (y) makes an assignment for the benefit of creditors or (z)
admits in writing its inability to pay its debts generally as they
become due or (e) the Company takes any corporate action in furtherance
of any such actions in this clause (4); or
(5 any other Event of Default provided with respect to Securities
of that series.
"Bankruptcy Law" means Title 11, United States Code, or any
similar Federal or state law for the relief of debtors. "Custodian" means any
receiver, trustee, assignee, liquidator, custodian or similar official under any
Bankruptcy Law.
A Default under clause (2) above is not an Event of Default until
the Trustee notifies the Company, or the Holders of at least 25% in aggregate
Principal Amount of the Outstanding Securities of such series notify the Company
and the Trustee, of the Default and the Company does not cure such Default
within the time specified in clause (2) above after receipt of such notice. Any
such notice must specify the Default, demand that it be remedied and state that
such notice is a "Notice of Default."
SECTION VI.2 Acceleration. If an Event of Default with respect to
Securities of any series at the time Outstanding (other than an Event of Default
specified in Section 6.1(3) or (4)) occurs and is continuing, the Trustee by
notice to the Company, or the Holders of at least 25% in aggregate Principal
Amount of the Outstand ing Securities of that series by notice to the Company
and the Trustee, may declare the Principal Amount (or, if any of the Securities
of that series are Discount Securities, such portion of the Principal Amount of
such Securities as may be specified in the terms thereof) of all the Securities
of that series to be immediately due and payable. Upon such a declaration, such
Principal (or portion thereof) shall be due and payable immediately. If an Event
of Default specified in Section 6.1(3) or (4) occurs and is continuing, the
Principal (or portion thereof) of all the Securities of that series shall become
and be imme diately due and payable without any declaration or other act on the
part of the Trustee or any Securityholders. The Holders of a majority in
aggregate Principal Amount of the Out-
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standing Securities of any series, by notice to the Trustee (and without notice
to any other Securityholder) may rescind an acceleration with respect to that
series and its conse quences if the rescission would not conflict with any
judgment or decree and all existing Events of Default with respect to Securities
of such series have been cured or waived except nonpayment of the Principal (or
portion thereof) of Securities of such series that has become due solely as a
result of such acceleration and if all amounts due to the Trustee under Section
7.7 have been paid. No such rescission shall affect any subsequent Default or
impair any right consequent thereto.
SECTION VI.3 Other Remedies. If an Event of Default with respect to a
series of Outstanding Securities occurs and is continuing, the Trustee may
pursue any available remedy to (a) collect the payment of the whole amount then
due and payable on such Securities for Principal and interest, with interest
upon the overdue Prin cipal and, to the extent that payment of such interest
shall be legally enforceable, upon overdue installments of interest from the
date such interest was due, at the rate or rates prescribed therefor in such
Securities and, in addition thereto, such further amount as shall be sufficient
to cover the costs and expenses of collection, including amounts due the Trustee
under Section 7.7 or (b) enforce the performance of any provision of the
Securities or this Indenture.
The Trustee may maintain a proceeding even if the Trustee does
not possess any of the Securities or coupons or does not produce any of the
Securities or coupons in the proceeding. A delay or omission by the Trustee or
any Securityholder in exercising any right or remedy accruing upon an Event of
Default shall not impair the right or remedy or constitute a waiver of, or
acquiescence in, the Event of Default. No remedy is exclusive of any other
remedy. All available remedies are cumulative.
SECTION VI.4 Waiver of Past Defaults. The Holders of a majority in
aggregate Principal Amount of the Outstanding Securities of any series, by
notice to the Trustee (and without notice to any other Securityholder), may on
behalf of the Holders of all the Securities of such series and any related
coupons waive an existing Default with respect to such series and its
consequences except (1) an Event of Default described in Section 6.1(1) with
respect to such series or (2) a Default in respect of a provision that under
Section 9.2 cannot be amended without the consent of the Holder of each
Outstanding Security of such series affected. When a Default is waived, it is
deemed cured, but no such waiver shall extend to any subsequent or other Default
or impair any consequent right.
SECTION VI.5 Control by Majority. The Holders of a majority in aggregate
Principal Amount of the Outstanding Securities of any series may direct the
time, method and place of conducting any proceeding for any remedy available to
the Trustee or of exercising any trust or power conferred on the Trustee with
respect to the Securities of such series. However, the Trustee may refuse to
follow any direction that conflicts with
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law or this Indenture or that the Trustee determines in good faith is unduly
prejudicial to the rights of other Securityholders or would involve the Trustee
in personal liability.
SECTION VI.6 Limitation on Suits. A Holder of any Security of any series
or any related coupons may not pursue any remedy with respect to this Indenture
or the Securities unless:
(1 the Holder gives to the Trustee written notice stating that an
Event of Default with respect to the Securities of that series is
continuing;
(2 the Holders of at least 25% in aggregate Principal Amount of
the Outstanding Securities of that series make a written request to the
Trustee to pursue the remedy;
(3 such Holder or Holders offer to the Trustee security or
indemnity against any loss, liability or expense satisfactory to the
Trustee;
(4 the Trustee does not comply with the request within 60 days
after receipt of the notice, the request and the offer of security or
indemnity; and
(5 the Holders of a majority in aggregate Principal Amount of the
Outstanding Securities of that series do not give the Trustee a
direction incon sistent with such request during such 60-day period.
A Securityholder may not use this Indenture to prejudice the
rights of any other Securityholder or to obtain a preference or priority over
any other Securityholder.
SECTION VI.7 Rights of Holders to Receive Payment. Notwithstanding any
other provision of this Indenture, the right, which is absolute and
unconditional, of any Holder of any Security or coupon to receive payment of the
Principal of and (subject to Section 2.13) interest on such Security or payment
of such coupon on the Stated Maturity or Maturities expressed in such Security
or coupon (or, in the case of redemption, on the Redemption Date) held by such
Holder, on or after the respective due dates expressed in the Securities or any
Redemption Date, or to bring suit for the enforcement of any such payment on or
after such respective dates, shall not be impaired or affected adversely without
the consent of each such Holder.
SECTION VI.8 Collection Suit by Trustee. If an Event of Default
described in Section 6.1(1) with respect to Securities of any series occurs and
is continuing, the Trustee may recover judgment in its own name and as trustee
of an express trust against the Company for the whole amount owing with respect
to such series of Securities and the amounts provided for in Section 7.7.
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SECTION VI.9 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 (irrespec tive
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
proceeding or otherwise,
(a) to file and prove a claim for the whole amount of Principal
and interest owing and unpaid in respect of the Securities and to file
such other papers or documents as may be necessary or 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 any other amount due the Trustee
under Section 7.7) and of the Holders of Securities and coupons allowed
in such judicial proceeding, and
(b) to collect and receive any moneys or other property payable
or deliverable on any such claims and to distribute the same;
and any Custodian, receiver, assignee, trustee, liquidator, sequestrator or
similar official in any such judicial proceeding is hereby authorized by each
Holder of Securities and coupons to make such payments to the Trustee and, in
the event that the Trustee shall consent to the making of such payments directly
to the Holders of Securities and coupons, to pay the Trustee any amount due it
for the reasonable compensation, expenses, disburse ments and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.7.
Nothing herein contained shall be deemed to authorize the Trustee or the
holders of Senior Indebtedness to authorize or consent to or accept or adopt on
behalf of any Holder of a Security or coupon any plan of reorganization,
arrangement, adjustment or composition affecting the Securities or coupons or
the rights of any Holder thereof, or to authorize the Trustee to vote in respect
of the claim of any Holder of a Security or coupon in any such proceeding.
SECTION VI.10 Priorities.VI. If the Trustee collects any money pursuant
to this Article 6, it shall pay out the money in the following order and, in
case of the distribution of such money on account of Principal or interest, upon
presentation of the Securities or
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coupons, or both, as the case may be, and the notation thereon of the payment if
only partially paid and upon surrender thereof if fully paid:
FIRST: to the Trustee for amounts due under Section 7.7;
SECOND: to Securityholders for amounts due and unpaid for the Principal
and interest on the Securities and interest evidenced by coupons 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 and coupons for Principal and interest, respectively;
and
THIRD: the balance, if any, to the Company.
The Trustee may fix a record date and payment date for any payment to
Securityholders pursuant to this Section 6.10. At least 15 days before such
record date, the Company shall mail to each Securityholder and the Trustee a
notice that states the record date, the payment date and amount to be paid.
SECTION VI.11 Undertaking for Costs. In any suit for the enforcement of
any right or remedy under this Indenture or in any suit against the Trustee for
any action taken or omitted by it as Trustee, a court in its discretion may
require the filing by any party litigant (other than the Trustee) in the suit of
an undertaking to pay the costs of the suit, and the court in its discretion may
assess reasonable costs, including reasonable attorneys' fees, against any party
litigant in the suit, having due regard to the merits and good faith of the
claims or defenses made by the party litigant. This Section 6.11 does not apply
to a suit by the Trustee, a suit by a Holder pursuant to Section 6.7 or a suit
by Holders of more than 10% in aggregate Principal Amount of the Outstanding
Securities of any series, or to any suit instituted by any Holder of any
Security or coupon for the enforcement of the payment of the Principal of or
interest on any Security or the payment of any coupon on or after the Stated
Maturity or Maturities expressed in such Security or coupon (or, in the case of
redemption, on or after the Redemption Date).
SECTION VI.12 Waiver of Stay, Extension or Usury 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 or any usury or other 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 VII
TRUSTEE
SECTION VII.1 Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise the rights and powers vested in it by this Indenture and use the
same degree of care and skill in its exercise as a prudent person would exercise
or use under the circum stances in the conduct of his/her own affairs.
(b) Except during the continuance of an Event of Default with respect to
Securi ties of any series:
(1 the Trustee need perform only those duties that are
specifically set forth in this Indenture and no others; and
(2 in the absence of bad faith on its part, the Trustee may
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. However, with respect to any certificates or opinions
specifically required to be furnished to the Trustee, the Trustee shall
examine the certificates and opinions to determine whether or not they
conform to the requirements of this Indenture.
(c) The Trustee may not be relieved from liability for its own negligent
action, its own negligent failure to act or its own willful misconduct, except
that:
(1 this paragraph (c) does not limit the effect of paragraph
(b) of this Section 7.1;
(2 the Trustee shall not be liable for any error of judgment made
in good faith by a Trust Officer unless it is proved that the Trustee
was negligent in ascertaining the pertinent facts; and
(3 the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.5 or exercising any trust or power
conferred upon the Trustee under this Indenture.
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(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b), (c) and (e) of this Section 7.1.
(e) The Trustee may refuse to perform any duty or exercise any right or
power or extend or risk its own funds or otherwise incur any financial liability
unless it receives indemnity satisfactory to it against any loss, liability or
expense.
(f) Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall not be
liable for any interest on any money received by it except as the Trustee may
otherwise agree with the Company.
SECTION VII.2 Rights of Trustee. (a) The Trustee may rely on any
document believed by it to be genuine and to have been signed or presented by
the proper person. The Trustee need not investigate any fact or matter stated in
the document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel. The Trustee shall not be liable
for any action it takes or omits to take in good faith in reliance on such
Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through agents and shall not be responsible for
the misconduct or negligence of any agent appointed with due care.
(d) Subject to the provisions of Section 7.1 (c), the Trustee shall not
be liable for any action it takes or omits to take in good faith which it
believes to be authorized or within its rights or powers.
(e) Subject to the provisions Section 7.1, the Trustee may rely and
shall be protected in acting or refraining from acting upon any resolution,
Officers' Certificate, Opinion of Counsel (or both), Company Order or any other
certificate, statement, instrument, opinion report, notice, request, consent,
order, bond, debenture, note, coupon, security or other paper believed to be
genuine and to have been signed or presented by the proper party or parties.
(f) Any request, direction, order or demand of the Company mentioned
herein shall be sufficiently evidenced by an Officers' Certificate (unless other
evidence in respect thereof be herein specifically prescribed); and any
resolution of the Board of Directors may be evidenced to the Trustee by a copy
thereof certified by the secretary or an assistant secretary of the Company.
(g) The Trustee may consult with counsel and any written advice or
Opinion of Counsel shall, subject to the provisions of Section 7.1, be full and
complete authorization
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and protection in respect of any action taken, suffered or omitted to be taken
by it hereunder in good faith and in reliance thereon in accordance with such
advice or Opinion of Counsel.
(h) The Trustee shall be under no obligation to exercise any of the
trusts or powers vested in it by this Indenture at the request, order or
direction of any of the Securityholders pursuant to the provisions of this
Indenture, unless such Securityholders shall have offered to the Trustee
security or indemnity satisfactory to the Trustee against the costs, expenses
and liabilities which might be incurred therein or thereby.
(i) Prior to the occurrence of an Event of Default hereunder and after
the curing or waiving of all Events of Default, the Trustee shall not be bound
to make any investiga tion into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request, consent,
order, approval, appraisal, bond, debenture, note, coupon, security or other
paper or document unless requested in writing to do so by the Holders of not
less than a majority in the aggregate principal amount of the Securities of such
series then Outstanding; provided, that, if the payment within a reasonable time
to the Trustee of the costs, expenses or liabilities likely to be incurred by it
in the making of any such investigation is, in the opinion of the Trustee, not
reasonably assured to the Trustee by the security afforded to it by the terms of
this Indenture, the Trustee may require such indemnity satisfactory to it
against such expense or liabilities as a condition to proceeding; the reasonable
expense of every such investigation shall be paid by the Company.
(j) 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 not regularly in its employ and the Trustee shall not be responsible
for any misconduct or negligence on the part of any such agent or attorney
appointed with due care by it hereunder.
SECTION VII.3 Individual Rights of Trustee, etc. The Trustee in its
individual or any other capacity may become the owner or pledgee of Securities
or coupons and may otherwise deal with the Company or its Affiliates with the
same rights it would have if it were not Trustee. Any Paying Agent, Registrar or
co-registrar or any other agent of the Company may do the same with like rights.
However, the Trustee must comply with Sections 7.10 and 7.11.
SECTION VII.4 Trustee's Disclaimer. The recitals contained herein and in
the Securities, except the Trustee's certificate of authentication, shall be
taken as the statements of the Company, and the Trustee assumes no
responsibility for the correctness of the same. The Trustee makes no
representation as to the validity or adequacy of this Indenture or the
Securities or coupons. The Trustee shall not be accountable for the Company's
use of the proceeds from the Securities and, shall not be responsible for any
statement in the registration statement for the Securities under the Securities
Act of 1933,
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as amended, or in the Indenture or the Securities or any coupons (other than its
certificate of authentication) or for the determination as to which beneficial
owners are entitled to receive any notices hereunder.
SECTION VII.5 Notice of Defaults.. If a Default with respect to the
Securities of any series occurs and is continuing and if it is known to a Trust
Officer, the Trustee shall give to each Holder of Securities of such series
notice of such Default in the manner set forth in TIA Section 315(b) within 90
days after it occurs. Except in the case of a Default described in Section
6.1(1) with respect to any Security of such series or a Default in the payment
of any sinking fund installment with respect to any Security of such series, the
Trustee may withhold the notice if and so long as a committee of its Trust
Officers in good faith determines that withholding the notice is in the
interests of the Holders of Securities of such series.
SECTION VII.6 Reports by Trustee to Holders. Within 60 days after each
May 15 beginning with the May 15 following the date of this Indenture, the
Trustee shall mail to each Holder of Securities a brief report dated as of such
May 15 that complies with TIA Section 313(a). The Trustee also shall comply with
TIA Section 313(b) and (c).
A copy of each report at the time of its mailing to Holders of
Securities shall be filed with the SEC and each stock exchange on which the
Securities of that series may be listed. The Company agrees to notify the
Trustee whenever the Securities of a particular series become listed on any
stock exchange and of any delisting thereof.
SECTION VII.7 Compensation and Indemnity. The Company agrees:
(a) to pay to the Trustee from time to time such compensation for
all services rendered by it hereunder as the parties shall agree to from
time to time (which compensation shall not be limited by any provision
of law in regard to the compensation of a trustee of an express trust);
(b) to reimburse the Trustee for all reasonable expenses,
disburse ments and advances incurred or made by the Trustee in
accordance with any provision of this Indenture (including the
reasonable compensation and the expenses, advances 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
(c) to indemnify the Trustee for, and to hold it harmless
against, any loss, liability or expense incurred without negligence or
bad faith on its part, arising out of or in connection with the
acceptance or adminis tration of this trust, including the costs and
expenses of defending itself
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against any claim or liability in connection with the exercise or perfor
mance of any of its powers or duties hereunder.
To secure the Company's payment obligations in this Section 7.7, the
Trustee shall have a lien prior to the Securities and any coupons on all money
or property held or collected by the Trustee, except that held in trust to pay
the Principal of or interest, if any, on particular Securities or for the
payment of particular coupons.
The Company's payment obligations pursuant to this Section 7.7 shall
survive the discharge of this Indenture. When the Trustee incurs expenses after
the occurrence of a Default specified in Section 6.1(3) or (4), the expenses are
intended to constitute expenses of administration under any Bankruptcy Law.
SECTION VII.8 Replacement of Trustee. The Trustee may resign by so
notifying the Company; provided, however, no such resignation shall be effective
until a successor Trustee has accepted its appointment pursuant to this Section
7.8. The Holders of a majority in aggregate Principal Amount of the Outstanding
Securities of any series at the time outstanding may remove the Trustee with
respect to the Securities of such series by so notifying the Trustee and may
appoint a successor Trustee. The Company shall remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or public officer takes charge of the Trustee or
its property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of the Trustee for any reason, with respect to the Securities of one or
more series, the Company shall promptly appoint, by resolution of its Board of
Directors, a successor Trustee with respect to the Securities of that or those
series (it being understood that any such successor Trustee may be appointed
with respect to the Securities of one or more or all of such series and that at
any time there shall be only one Trustee with respect to the Securities of any
series).
In the case of the appointment hereunder of a successor Trustee with
respect to all Securities, every such successor Trustee shall deliver a written
acceptance of its appoint ment to the retiring Trustee and to the Company.
Thereupon, the resignation or removal of the retiring Trustee shall become
effective and the successor Trustee shall have all the
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rights, powers and duties of the Trustee under this Indenture. The successor
Trustee shall mail a notice of its succession to Holders of Securities of the
particular series with respect to which such successor Trustee has been
appointed. The retiring Trustee shall promptly transfer all property held by it
as Trustee to the successor Trustee, subject to the lien provided for in Section
7.7.
In case of the appointment hereunder of a successor Trustee with respect
to the Securities of one or more (but not all) series, the Company, the retiring
Trustee and each successor Trustee with respect to the Securities of one or more
series shall execute and deliver an indenture supplemental hereto wherein each
successor Trustee shall accept such appointment and which (1) shall contain such
provisions as shall be necessary or desirable to transfer and confirm to, and to
vest in, each successor Trustee all the rights, powers, trusts and duties of the
retiring Trustee with respect to the Securities of that or those series to which
the appointment of such successor Trustee relates, (2) if the retiring Trustee
is not retiring with respect to all Securities, shall contain such provisions as
shall be deemed necessary or desirable to confirm that all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities of that
or those series as to which the retiring Trustee is not retiring shall continue
to be vested in the retiring Trustee, and (3) shall add to or change any of the
provisions of this Indenture as shall be necessary to provide for or facilitate
the administration of the trusts hereunder by more than one Trustee, it being
understood that nothing herein or in such supplemental indenture shall
constitute such Trustees as co-Trustees of the same trust and that each such
Trustee shall be trustee of a trust or trusts hereunder separate and apart from
any trust or trusts hereunder administered by any other such Trustee; and upon
the execution and delivery of such supplemental indenture the resignation or
removal of the retiring Trustee shall become effective to the extent provided
therein and each such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Trustee with respect to the Securities of that or those series
to which the appoint ment of such successor Trustee relates; but, on request of
the Company or any successor Trustee, such retiring Trustee shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder with respect to the Securities of that or those
series to which the appointment of such successor Trustee relates, subject,
nevertheless, to its lien, if any, provided for in Section 7.7.
If a successor Trustee with respect to the Securities of any series does
not take office within 30 days after the retiring Trustee resigns or is removed,
the retiring Trustee, the Company or the Holders of a majority in aggregate
Principal Amount of the Outstand ing Securities of such series at the time
outstanding may petition any court of competent jurisdiction for the appointment
of a successor Trustee with respect to the Securities of such series.
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If the Trustee fails to comply with Section 7.10, any Holder of a
Security of such series may petition any court of competent jurisdiction for the
removal of such Trustee and the appointment of a successor Trustee.
SECTION VII.9 Successor Trustee by Merger. If the Trustee consolidates
with, merges or converts into, or transfers all or substantially all its
corporate trust business or assets to, another corporation, the resulting,
surviving or transferee corporation without any further act shall be the
successor Trustee.
SECTION VII.10 Eligibility; Disqualification. The Trustee shall at all
times satisfy the requirements of TIA Section 310(a)(1) and 310(a)(5). The
Trustee shall have a combined capital and surplus of at least $50,000,000 as set
forth in its most recent published annual report of condition. The Trustee shall
comply with TIA Section 310(b), including the optional provision permitted by
the second sentence of TIA Section 310(b)(9). In determining whether the Trustee
has conflicting interests as defined in TIA Section 310(b)(1), the provisions
contained in the proviso to TIA Section 310(b)(1) shall be deemed incorporated
herein.
SECTION VII.11 Preferential Collection of Claims Against Company. The
Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated therein.
ARTICLE VIII
SATISFACTION AND DISCHARGE
SECTION VIII.1 Discharge of Liability on Securities. Except as otherwise
contemplated by Section 2.3(a), when (a) the Company delivers to the Trustee all
Outstanding Securities or all Outstanding Securities of any series, as the case
may be, theretofore authenticated and delivered and all coupons, if any,
appertaining thereto (other than (i) coupons appertaining to Bearer Securities
surren dered for exchange for Registered Securities and maturing after such
exchange, whose surrender is not required or has been waived as provided in
Section 2.8, (ii) Securities or Securities of such series, as the case may be,
and coupons, if any, which have been destroyed, lost or stolen and which have
been replaced or paid as provided in Section 2.9, (iii) coupons, if any,
appertaining to Securities or Securities of such series, as the case may be,
called for redemption and maturing after the relevant Redemption Date, whose
surrender has been waived as provided in Section 3.4, and (iv) Securities or
Securities of such series, as the case may be, and coupons, if any, 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 2.4) for cancellation or (b) all Outstand-
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ing Securities have become due and payable and the Company deposits with the
Trustee cash sufficient to pay at Stated Maturity the Principal Amount of all
Principal of and interest on Outstanding Securities or all Outstanding
Securities of such series (other than Securities replaced pursuant to Section
2.9), and if in either case the Company pays all other sums payable hereunder by
the Company, then this Indenture shall, subject to Section 7.7, cease to be of
further effect as to all Outstanding Securities or all Outstanding Securities of
any series, as the case may be. The Trustee shall join in the execution of a
document prepared by the Company acknowledging satisfaction and discharge of
this Indenture on demand of the Company accompanied by an Officers' Certificate
and Opinion of Counsel and at the cost and expense of the Company.
SECTION VIII.2 Repayment to the Company. The Trustee and the Paying
Agent shall return to the Company on Company Request any money held by them for
the payment of any amount with respect to the Securities that remains unclaimed
for two years; provided, however, that the Trustee or such Paying Agent, before
being required to make any such return, may at the expense and direction of the
Company cause to be published once in an Authorized Newspaper in each Place of
Payment of or mail to each such Holder notice that such money remains unclaimed
and that, after a date specified therein, which shall not be less than 30 days
from the date of such publication or mailing, any unclaimed money then remaining
wilt be returned to the Company. After return to the Company, Holders entitled
to the money must look to the Company for payment as general creditors unless an
applicable abandoned property law designates another person.
SECTION VIII.3 Option to Effect Defeasance or Covenant Defeasance.
Unless otherwise specified as contemplated by Section 2.3(a) with respect to
Securities of a particular series, the Company, may at its option, by Board
Resolution, at any time, with respect to any series of Securities, elect to have
either Section 8.4 or Section 8.5 be applied to all of the outstanding
Securities of any series (the "Defeased Securities"), upon compliance with the
conditions set forth in this Article VIII.
SECTION VIII.4 Defeasance and Discharge. Upon the Company's exercise
under Section 8.3 of the option applicable to this Section 8.4, the Company
shall be deemed to have been discharged from its obligations with respect to the
Defeased Securities on the date the conditions set forth below in Section 8.6
are satisfied (hereinafter "defeasance"). For this purpose, such defeasance
means that the Company shall be deemed to have paid and discharged the entire
indebtedness represented by the defeased Securities, which shall thereafter be
deemed to be "outstand ing" only for the purposes of Sections 2.4, 2.5,2.6, 2.9,
2.11, 2.12, 4.1, 4.5, 6.6, 6.7, 7.7, 7.8 and 8.2 of this Indenture and to have
satisfied all its other obligations under such series of Securities and this
Indenture insofar as such series of Securities are concerned (and the Trustee,
at the expense of the Company, and, upon written request, shall execute proper
instruments acknowledging the same). Subject to compliance with this Article
VIII, the Company may
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exercise its option under this Section 8.4 notwithstanding the prior exercise of
its option under Section 8.5 with respect to a series of Securities.
SECTION VIII.5 Covenant Defeasance. Upon the Company's exercise under
Section 8.3 of the option applicable this Section 8.5, the Company shall be
released from its obligations under Sections 4.2 and 4.3 and Article V and such
other provisions as may be provided as contemplated by Section 2.3(a) with
respect to Securities of a particular series and with respect to the Defeased
Securities on and after the date the conditions set forth below in Section 8.6
are satisfied (hereinafter "covenant defeasance"), and the Defeased Securities
shall thereafter be deemed to be not "outstanding" for the purposes of any
direction, waiver, consent or declaration or act of Holders (and the
consequences if any thereof) in connection with such covenants, but shall
continue to be deemed "outstanding" for all other purposes hereunder. For this
purpose, such covenant defeasance means that, with respect to the Defeased
Securities, the Company may omit to comply with and shall have no liability in
respect of any term, condition or limitation set forth in any such Section or
Article described in this Section 8.5, whether directly or indirectly, by reason
of any reference elsewhere herein to any such Section or Article described in
this Section 8.5 or by reason of any reference in any such Section or Article
described in this Section 8.5 to any other provisions herein or in any other
document and such omission to comply shall not constitute a Default or an Event
of Default under Section 6.1 but, except as specified above, the remainder of
this Indenture and such Defeased Securities shall be unaffected thereby.
SECTION VIII.6 Conditions to Defeasance or Covenant Defeasance. The
following shall be the conditions to application of either Section 8.4 or
Section 8.5 to a series of outstanding Securities.
(a) The Company shall have irrevocably deposited with the Trustee, in
trust, (i) sufficient funds in the currency or currency unit in which the
Securities of such series are denominated to pay the Principal of and interest
to Stated Maturity (or redemption) on, the Debt Securities of such series, or
(ii) such amount of direct obligations of, or obliga tions the principal of and
interest on which are fully guaranteed by, the government which issued the
currency in which the Securities of such series are denominated, and which are
not subject to prepayment, redemption or call, as will, together with the
predetermined and certain income to accrue thereon without consideration of any
reinvestment thereof, be sufficient to pay when due the Principal of, and
interest to Stated Maturity (or redemption) on, the Debt Securities of such
series.
(b) The Company shall (i) have delivered an opinion of counsel that the
Holders of the Securities of such series will not recognize income, gain or loss
for United States Federal income tax purposes as a result of such defeasance,
and will be subject to tax in the same manner as if no defeasance and discharge
or covenant defeasance, as the case
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may be, had occurred or (ii) in the case of an election under Section 8.4 the
Company shall have delivered to the Trustee an Opinion of Counsel to the effect
that (A) the Company has received from, or there has been published by, the
Internal Revenue Service a ruling or (B) since the date this Indenture was first
executed, there has been a change in the applicable federal income tax law, in
either case to the effect that, and based thereon such Opinion of Counsel in the
United States shall confirm that, the holders of Outstanding Securities of that
particular series will not recognize income, gain or loss for federal income tax
purposes as a result of such defeasance.
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION IX.1 Supplemental Indentures without Consent of Holders.IX.1
Supplemental Indentures without Consent of Holders. Without the consent of any
Holders of Securities or coupons, the Company 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; or
(2) to add to the covenants, agreements and obligations of the
Company for the benefit of the Holders of all of the Securities or any
series thereof, or to surrender any right or power herein conferred upon
the Company; or
(3) to add to or change any of the provisions of this Indenture
to provide that Bearer Securities may be registrable as to Principal, to
change or eliminate any restrictions (including restrictions relating to
payment in the United States) on the payment of Principal of or any
premium or interest on Bearer Securities, to permit Bearer Securities to
be issued in exchange for Registered Securities, to permit Bearer
Securities to be issued in exchange for Bearer Securities of other
authorized denominations or to permit the issuance of Securities in
uncertificated form; or
(4) to establish the form or terms of Securities of any series
and any related coupons as permitted by Sections 2.1 and 2.3(a),
respectively; or
(5) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one
or more series and to add to or change any of the provisions of this
Indenture as shall be necessary to
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provide for or facilitate the administration of the trusts hereunder by
more than one Trustee, pursuant to the requirements of Section 7.8; or
(6) to cure any ambiguity, defect or inconsistency; or
(7) to add to, change or eliminate any of the provisions of this
Indenture (which addition, change or elimination may apply to one or
more series of Securi ties), provided that any such addition, change or
elimination shall neither (A) apply to any Security of any series
created prior to the execution of such supple mental indenture and
entitled to the benefit of such provision nor (B) modify the rights of
the Holder of any such Security with respect to such provision; or
(8) to secure the Securities; or
(9) to make any other change that does not adversely affect the
rights of any Securityholder.
SECTION IX.2 Supplemental Indentures with Consent of Holders. With the
written consent of the Holders of at least a majority in aggregate Principal
Amount of the Outstanding Securities of each series affected by such
supplemental indenture, the Company and the Trustee may amend this Indenture or
the Securities of any series or 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 such
series and any related coupons under this Indenture; provided, however, that no
such amendment or supplemental indenture shall, without the consent of the
Holder of each Outstanding Security affected thereby:
(1) change the Stated Maturity of the Principal of, or any
installment of Principal or interest on, any such Security, or reduce
the Principal Amount thereof or the rate of interest thereon or any
premium payable upon redemption thereof or reduce the amount of
Principal of any such Discount Security that would be due and payable
upon a declaration of acceleration of maturity thereof pursuant to
Section 6.2, or change the Place of Payment, or change the coin or
currency in which, any Principal of, or any installment of interest on,
any such Security is payable, or impair the right to institute suit for
the enforcement of any such payment on or after the Stated Maturity
thereof (or, in the case of redemption, on or after the Redemption
Date);
(2) reduce the percentage in Principal Amount of the Outstanding
Securi ties of any series, the consent of whose Holders is required for
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any such amend ment or supplemental indenture, or the consent of whose
Holders is required for any waiver (of compliance with certain
provisions of this Indenture or certain de faults hereunder and their
consequences) with respect to the Securities of such series provided for
in this Indenture; or
(3) modify any of the provisions of this Section, Section 6.4 or
6.7, except to increase the percentage of Outstanding Securities of such
series required for such actions 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 the consent of the Holders under this
Section 9.2 to approve the particular form of any proposed amendment or
supplemental indenture, but it shall be sufficient if such consent approves the
substance thereof.
After an amendment or supplemental indenture under this Section 9.2
becomes effective, the Company shall mail to each Holder of the particular
Securities affected thereby a notice briefly describing the amendment.
SECTION IX.3 Compliance with Trust Indenture Act. Every supplemental
indenture executed pursuant to this Article shall comply with the TIA as then in
effect.
SECTION IX.4 Revocation and Effect of Consents, Waivers and Actions.
Until an amendment or waiver with respect to a series of Securities becomes
effective, a consent to it or any other action by a Holder of a Security of that
series hereunder is a continuing consent by the Holder and every subsequent
Holder of that Security or portion of that Security that evidences the same
obligation as the consenting Holder's Security, even if notation of the consent,
waiver or action is not made on the Security. However, any such Holder or
subsequent Holder may revoke the consent, waiver or action as to such Holder's
Security or portion of the Security if the Trustee receives the notice of
revocation before the Company or an agent of the Company certifies to the
Trustee that the consent of the requisite aggregate Principal Amount of the
Securities of that series has been obtained. After an amendment, waiver or
action becomes effective, it shall bind every Holder of Securities of that
series.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders entitled to consent to any amendment or
waiver with respect to
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a series of Securities. If a record date is fixed, then notwithstanding the
first two sen tences of the immediately preceding paragraph, those persons who
were Holders of Securities of that series at such record date (or their duly
designated proxies), and only those persons, shall be entitled to revoke any
consent previously given, whether or not such persons continue to be Holders
after such record date. No such consent shall be valid or effective for more
than 90 days after such record date.
SECTION IX.5 Notation on or Exchange of Securities. Securities of any
series authenticated and delivered after the execution of any supplemental
indenture with respect to such series pursuant to this Article may, and shall if
required by the Trustee, bear a notation in form approved by the Trustee as to
any matter provided for in such supplemental indenture. If the Company shall so
determine, new Securities of such series 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 of that series.
SECTION IX.6 Trustee to Sign Supplemental Indentures. The Trustee shall
sign any supplemental indenture authorized pursuant to this Article 9 if the
amendment does not adversely affect the rights, duties, liabilities or
immunities of the Trustee. If it does, the Trustee may, but need not, sign it.
In signing such amendment, the Trustee shall be entitled to receive, and
(subject to the provisions of Section 7.1) shall be fully protected in relying
upon, an Officers' Certificate and an Opinion of Counsel stating that such
amendment is authorized or permitted by this Indenture.
SECTION IX.7 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, except
to the extent otherwise set forth thereon.
ARTICLE X
SINKING FUNDS
SECTION X.1 Applicability of Article. The provisions of this Article
shall be applicable to any sinking fund for the retirement of Securities of a
series, except as otherwise specified as contemplated by Section 2.3(a) for
Securities of such series.
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The minimum amount of any sinking fund payment provided for by the terms
of Securities of any series is herein referred to as a "mandatory sinking fund
payment," and any payment in excess of such minimum amount provided for by the
terms of Securities of any series is herein referred to as an "optional sinking
fund payment." If provided for by the terms of Securities of any series, the
cash amount of any sinking fund payment may be subject to reduction as provided
in Section 10.2. Each sinking fund payment shall be applied to the redemption of
Securities of any series as provided for by the terms of the Securities of such
series.
SECTION X.2 Satisfaction of Sinking Fund Payments with Securities. The
Company (1) may deliver Outstanding Securities of a series with the same issue
date, interest rate and Stated Maturity (other than any previously called for
redemption), together in the case of any Bearer Securities of such series with
the same issue date, interest rate and Stated Maturity with all unmatured
coupons appertaining thereto, and (2) may apply as a credit Securities of a
series with the same issue date, interest rate and Stated Maturity which have
been redeemed either at the election of the Company pursuant to the terms of
such Securities or through the application of permitted optional sinking fund
payments pursuant to the terms of such Securities, in each case in satisfaction
of all or any part of any mandatory sinking fund payment with respect to the
Securities of such series with the same issue date, interest rate and Stated
Maturity; provided that such Securities have not been previously so credited.
Such Securities shall be received and credited for such purpose by the Trustee
at the Redemption Price specified in such Securities for redemption through
operation of the sinking fund and the amount of such sinking fund payment shall
be reduced accordingly.
SECTION X.3 Redemption of Securities for Sinking Fund. Not less than 60
days (or such shorter period as shall be acceptable to the Trustee) prior to
each sinking fund payment date for any series of Securities, the Company will
deliver to the Trustee an Officers' Certificate specifying the amount of the
next ensuing sinking fund payment for that series pursuant to the terms of that
series, the portion thereof, if any, which is to be satisfied by payment of cash
and the portion thereof, if any, which is to be satisfied by delivering and
crediting Securities of that series pursuant to Section 10.2 and will also
deliver to the Trustee any Securities to be so delivered. Not less than 30 days
before each such sinking fund payment date the Trustee shall select the
Securities to be redeemed upon such sinking fund payment date in the manner
specified in Section 3.2 and cause notice of the redemption thereof to be given
in the name of and at the expense of the Company in the manner provided in
Section 3.3. Such notice having been duly given, the redemption of such
Securities shall be made upon the terms and in the manner stated in Sections 3.4
and 3.6.
ARTICLE XI
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ACTIONS OF HOLDERS OF SECURITIES
SECTION XI.1 Purposes for which Meetings may be Called. A meeting of
Holders of Securities of any series may be called at any time and from time to
time pursuant to this Article to make, give or take any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be made, given or taken by Holders of Securities of such
series.
SECTION XI.2 Call, Notice and Place of Meetings. (a) The Trustee may at
any time call a meeting of Holders of Securities of any series for any purpose
specified in Section 11.1, to be held at such time and at such place in the
Borough of Manhattan, The City of New York or, for a series of Securities issued
as Bearer Securities, in London as the Trustee shall determine or, with the
approval of the Company, at any other place. Notice of every meeting of Holders
of Securities of any series, setting forth the time and the place of such
meeting and in general terms the action proposed to be taken at such meeting,
shall be given, in the manner provided in Section 12.2, not less than 21 nor
more than 180 days prior to the date fixed for the meeting.
(b) In case at any time the Company or the Holders of at least 10% in
Principal Amount of the Outstanding Securities of any series shall have
requested the Trustee to call a meeting of the Holders of Securities of such
series for any purpose specified in Section 11.1, by written request setting
forth in reasonable detail the action proposed to be taken at the meeting, and
the Trustee shall not have made the first publication of the notice of such
meeting within 21 days after receipt of such request or shall not thereafter
proceed to cause the meeting to be held as provided herein, then the Company or
the Holders of Securities of such series in the amount above specified, as the
case may be, may determine the time and the place in the Borough of Manhattan,
The City of New York, or for a series of Securities issued as Bearer Securities,
in London, or in such other place as shall be determined and approved by the
Company, for such meeting and may call such meeting for such purposes by giving
notice thereof as provided in subsection (a) of this Section 11.2.
SECTION XI.3 Persons Entitled to Vote at Meetings. To be entitled to
vote at any meeting of Holders of Securities of any series, a person shall be
(1) a Holder of one or more Outstanding Securities of such series, or (2) a
person appointed by an instrument in writing as proxy for a Holder or Holders of
one or more Outstanding Securities of such series by such Holder or Holders. The
only persons who shall be entitled to be present or to speak at any meeting of
Holders of Securities of any series shall be the persons entitled to vote at
such meeting and their counsel, any representatives of the Trustee and its
counsel and any representatives of the Company and its counsel.
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SECTION XI.4 Quorum; Action. The persons entitled to vote a majority in
Principal Amount of the Outstanding Securities of a series shall constitute a
quorum for a meeting of Holders of Securities of such series. In the absence of
a quorum within 30 minutes of the time appointed for any such meeting, the
meeting shall, if convened at the request of Holders of Securities of such
series, be dissolved. In any other case, the meeting may be adjourned for a
period determined by the chairman of the meeting prior to the adjournment of
such meeting. In the absence of a quorum at any such adjourned meeting, such
adjourned meeting may be further adjourned for a period determined by the
chairman of the meeting prior to the adjournment of such adjourned meeting.
Notice of the reconvening of any adjourned meeting shall be given as provided in
Section 11.2(a), except that such notice need be given only once not less than
five days prior to the date on which the meeting is scheduled to be reconvened.
Notice of the reconvening of an adjourned meeting shall state expressly the
percentage, as provided above, of the principal amount of the Outstanding
Securities of such series which shall constitute a quorum.
Except as limited by the proviso to Section 9.2, any resolution
presented to a meeting or adjourned meeting duly reconvened at which a quorum is
present as aforesaid may be adopted by the affirmative vote of the Holders of a
majority in Principal Amount of the Outstanding Securities of that series;
provided, however, that, except as limited by the proviso to Section 9.2, any
resolution with respect to any request, demand, authoriza tion, direction,
notice, consent, waiver or other action which this Indenture expressly provides
may be made, given or taken by the Holders of a specified percentage, which is
less than a majority, in Principal Amount of the Outstanding Securities of a
series may be adopted at a meeting or an adjourned meeting duly reconvened and
at which a quorum is present as aforesaid by the affirmative vote of the Holders
of such specified percentage in Principal Amount of the Outstanding Securities
of that series.
Any resolution passed or decision taken at any meeting of Holders of
Securities of any series duly held in accordance with this Section shall be
binding on all the Holders of Securities of such series and the related coupons,
whether or not present or represented at the meeting.
SECTION XI.5 Determination of Voting Rights; Conduct and Adjournment of
Meetings. (a) Notwithstanding any other provisions of this Indenture, the
Trustee may make such reasonable regulations as it may deem advisable for any
meeting of Holders of Securities of a series in regard to proof of the holding
of Securities of such series and of the appointment of proxies and in regard to
the appointment and duties of inspectors of votes, the submission and
examination of proxies, certificates and other evidence of the right to vote,
and such other matters concerning the conduct of the meeting as it shall deem
appropriate. Except as otherwise permitted or required by any such regulations,
the holding of Securities shall be proved in the manner specified in Section
11.7 and the appointment of any proxy shall be proved in the manner specified in
Section 11.7 or by
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having the signature of the person executing the proxy witnessed or guaranteed
by any trust company, bank or banker authorized by Section 11.7 to certify to
the holding of Bearer Securities. Such regulations may provide that written
instruments appointing proxies, regular on their face, may be presumed valid and
genuine without the proof specified in Section 11.7 or other proof.
(b) The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by Holders of Securities as provided in Section 11.2(b), in which
case the Company or the Holders of Securities of the series calling the meeting,
as the case may be, shall in like manner appoint a temporary chairman. A
permanent chairman and a permanent secretary of the meeting shall be elected by
vote of the persons entitled to vote a majority in Principal Amount of the
Outstanding Securities of such series represented at the meeting.
(c) At any meeting each Holder of a Security of such series or proxy
shall be entitled to vote with respect to the Outstanding Securities of such
series held or repre sented by him; provided, however, that no vote shall be
cast or counted at any meeting in respect to any Security challenged as not
Outstanding and ruled by the chairman of the meeting to be not Outstanding. The
chairman of the meeting shall have no right to vote, except as a Holder of a
Security of such series or proxy.
(d) Any meeting of Holders of Securities of any series duly called
pursuant to Section 11.2 at which a quorum is present may be adjourned from time
to time by persons entitled to vote a majority in Principal Amount of the
Outstanding Securities of such series represented at the meeting; and the
meeting may be held as so adjourned without further notice.
SECTION XI.6 Counting Votes and Recording Action of Meetings. The vote
upon any resolution submitted to any meeting of Holders of Securities of any
series shall be by written ballots on which shall be subscribed signatures of
the Holders of Securities of such series or of their representatives by proxy
and the Principal Amounts and serial numbers of the Outstanding Securities of
such series held or represented by them. The permanent chairman of the meeting
shall appoint two inspectors of votes who shall count all votes cast at the
meeting for or against any resolution and who shall make and file with the
secretary of the meeting their verified written reports in duplicate of all
votes cast at the meeting. A record, at least in duplicate, of the proceedings
of each meeting of Holders of Securities of any series shall be prepared by the
secretary of the meeting and there shall be attached to said record the original
reports of the inspectors of votes on any vote by ballot taken thereat and
affidavits by one or more persons having knowledge of the facts setting forth a
copy of the notice of the meeting and showing that said notice was given as
provided in Section 11.2 and, if applicable, Section 11.4. Each copy shall be
signed and verified by the affidavits of the permanent chairman and secretary of
the meeting and one
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such copy shall be delivered to the Company, and another to the Trustee to be
preserved by the Trustee, the latter to have attached thereto the ballots voted
at the meeting. Any record so signed and verified shall be conclusive evidence
of the matters therein stated.
SECTION XI.7 Actions of Holders Generally. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be given or taken by Holders may be embodied in and evidenced
by one or more instruments of substantially similar tenor signed by such Holders
in person or by an agent duly appointed in writing. If Securities of a series
are issuable as Bearer Securities, any request, demand, authorization,
direction, notice, consent, waiver or other action provided by this Indenture to
be given or taken by Holders of such series may, alternatively, be embodied in
and evidenced by the record of Holders of Securities of such series voting in
favor thereof, either in person or by proxies duly appointed in writing, at any
meeting of Holders of Securities of such series duly called and held in
accordance with the provisions of this Article, or a combination of such instru
ments and any such record. Except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments or record or
both are delivered to the Trustee and, where it is hereby expressly required, to
the Company. Proof of execution of any such instrument or of a writing
appointing any such agent, or of the holding by any person of a Security, shall
be sufficient for any purpose of this Indenture and (subject to Section 7.1)
conclusive in favor of the Trustee and the Company, if made in the manner
provided in this Section. The record of any meeting of Holders of Securities
shall be proved in the manner provided in Section 11.6.
(b) The fact and date of the execution by any person of any such
instrument or writing, or the authority of the persons executing the same, may
be proved in any reasonable manner which the Trustee deems sufficient.
(c) The Principal Amount and serial numbers of Registered Securities
held by the person, and the date of holding the same, shall be proved by the
books of the Registrar.
(d) The Principal Amount and serial numbers of Bearer Securities held by
any person, and the date of holding the same, may be proved by the production of
such Bearer Securities or by a certificate executed by any trust company, bank,
banker or other depositary, wherever situated, as depositary, if such
certificate shall be deemed by the Trustee to be satisfactory, showing that at
the date therein mentioned such person had on deposit with such depositary, or
exhibited to it, the Bearer Securities therein described; or such facts may be
proved by the certificate or affidavit of the person holding such Bearer
Securities, if such certificate or affidavit is deemed by the Trustee to be
satisfactory. The Trustee and the Company may assume that such ownership of any
Bearer Security continues until (1) another certificate or affidavit bearing a
later date issued in respect of the same Bearer Security is produced, or (2)
such Bearer Security is produced to the
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Trustee by some other person, or (3) such Bearer Security is surrendered in
exchange for a Registered Security, or (4) such Bearer Security is no longer
Outstanding. The Principal Amount and serial numbers of Bearer Securities held
by any person, and the date of holding the same, may also be proved in any other
manner which the Trustee deems sufficient.
(e) Any request, demand, authorization, direction, notice, consent,
waiver or other act of the Holder of any Security in accordance with this
Section shall bind every future Holder of the same Security and the Holder of
every Security issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof in respect of anything done, omitted or suffered to
be done by the Trustee or the Company in reliance thereon, whether or not
notation of such action is made upon such Security.
(f) If the Company shall solicit from the Holders any request, demand,
authoriza tion, direction, notice, consent, waiver or other act in accordance
with this Section, the Company may, at its option, by or pursuant to an
Officers' Certificate delivered to the Trustee, fix in advance a record date for
the determination of Holders entitled to give such request, demand,
authorization, direction, notice, consent, waiver or such other act, but the
Company shall have no obligation to do so. If such a record date is fixed, such
request, demand, authorization, direction, notice, consent, waiver or other act
may be given before or after such record date, but only the Holders of record at
the close of business on such record date shall be deemed to be Holders for the
purposes of determin ing whether Holders of the requisite percentage of
Outstanding Securities or Outstanding Securities of a series, as the case may
be, have authorized or agreed or consented to such request, demand,
authorization, direction, notice, consent, waiver or other act, and for that
purpose the Outstanding Securities or Outstanding Securities of the series, as
the case may be, shall be computed as of such record date; provided, that no
such authorization, agreement or consent by the Holders on the record date shall
be deemed effective unless such request, demand, authorization, direction,
notice, consent, waiver or other act shall become effective pursuant to the
provisions of clause (a) of this Section 11.7 not later than six months after
the record date.
ARTICLE XII
MISCELLANEOUS
SECTION XII.1 Trust Indenture Act Controls. If any provision of this
Indenture limits, qualifies or conflicts with another provision hereof which is
required to be included in this Indenture by the TIA, the required provision
shall control.
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SECTION XII.2 Notices. Any notice or communication shall be in writing
and delivered in person or mailed by first-class mail, postage prepaid;
provided, that any notice or communication by and among the Trustee and the
Company may be made by telecopy or other commercially accepted electronic means
and shall be effective upon receipt thereof and shall be confirmed in writing,
mailed by first-class mail, postage prepaid, addressed as follows:
if to the Company:
Litton Industries, Inc.
21240 Burbank Boulevard
Woodland Hills, California 91367
Attention: Chief Financial Officer
if to the Trustee:
The Bank of New York
101 Barclay Street, Floor 21 West
New York, New York 10286
Attention: Corporate Trust Administration
The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
Any notice or communication given to a Holder of Registered Securities
shall be mailed to such Securityholder at the Securityholder's address as it
appears on the registra tion books of the Registrar and shall be sufficiently
given if so mailed within the time prescribed. Notice shall be sufficiently
given to Holders of Bearer Securities if published in an Authorized Newspaper in
The City of New York and in such other city or cities as may be specified in
such Securities on a Business Day at least twice, the first such publication to
be not earlier than the earliest date, and not later than the latest date,
prescribed for the giving of such notice.
Where this Indenture provides for notice in any manner, such notice may
be waived in writing by the person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Holders shall be filed with the Trustee, but such
filing shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.
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Failure to mail a notice or communication to a Securityholder or any
defect in it shall not affect its sufficiency with respect to other Holders of
Securities of the same series. If a notice or communication is mailed in the
manner provided above, it is duly given, whether or not received by the
addressee.
If the Company mails a notice or communication to the Holders of
Securities of a particular series, it shall mail a copy to the Trustee and each
Registrar, co-registrar or Paying Agent, as the case may be, with respect to
such series.
In case by reason of the suspension of regular mail service or by reason
of any other cause it shall be impracticable to give notice to Holders of
Registered Securities by mail, then such notification as shall be made with the
acceptance of the Trustee shall constitute a sufficient notification for every
purpose hereunder. In any case where notice to Holders of Registered Securities
is given by mail, neither the failure to mail such notice, nor any defect in any
notice so mailed, to any particular Holder of a Registered Security shall affect
the sufficiency of such notice with respect to other Holders of Registered
Securities or the sufficiency of any notice to Holders of Bearer Securities
given as provided herein.
In case by reason of the suspension of publication of any Authorized
Newspaper or Authorized Newspapers or by reason of any other cause it shall be
impracticable to publish any notice to Holders of Bearer Securities as provided
above, then such notification to Holders of Bearer Securities as shall be given
with the approval of the Trustee shall constitute sufficient notice to such
Holders for every purpose hereunder. Neither the failure to give notice by
publication to Holders of Bearer Securities as provided above, nor any defect in
any notice so published, shall affect the sufficiency of any notice to Holders
of Registered Securities given as provided herein.
Any request, demand, authorization, direction, notice, consent or waiver
required or permitted under this Indenture shall be in the English language,
except that any published notice may be in an official language of the country
of publication
SECTION XII.3 Communication by Holders with Other Holders..
Securityholders may communicate pursuant to TIA Section 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Company and the Trustee, the Registrar or the Paying Agent with
respect to a particular series of Securities, and anyone else, shall have the
protection of TIA Section 312(c).
SECTION XII.4 Certificate and Opinion as to Conditions Precedent. Upon
any request or application by the Company to the Trustee to take any action
under this Indenture, the Company shall furnish to the Trustee:
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(1) an Officers' Certificate stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with; and
(2) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
SECTION XII.5 Statements Required in Certificate or Opinion. Each
Officers' Certificate or Opinion of Counsel with respect to compliance with a
covenant or condition provided for in this Indenture shall include:
(1) statement that each person making such Officers' Certificate
or Opinion of Counsel has read such covenant or condition;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such Officers' Certificate or Opinion of Counsel are based;
(3) a statement that, in the opinion of each such person, he has
made such examination or investigation as is necessary to enable such
person to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(4) a statement that, in the opinion of such person, such
covenant or condition has been complied with.
SECTION XII.6 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 XII.7 Rules by Trustee, Paying Agent and Registrar. With respect
to the Securities of a particular series, the Trustee with respect to such
series of Securities may make reasonable rules for action by or a meeting of
Holders of such series of Securities. With respect to the Securities of a
particular series, the Registrar and the Paying Agent with respect to such
series of Securi ties may make reasonable rules for their functions.
SECTION XII.8 Legal Holidays. A "Legal Holiday" is any day other than a
Business Day. If any specified date (including an Interest Payment Date, Re
demption Date or Stated Maturity of any Security, or a date for giving notice)
is a Legal Holiday at any Place of Payment or place for giving notice, then
(notwithstanding any other provision of this Indenture or of the Securities or
coupons other than a provision in the Securities of any series which
specifically states that such provision shall apply in lieu of this Section)
payment of interest or Principal need not be made at such Place of Payment, or
such other
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action need not be taken, on such date, but the action shall be taken on the
next succeeding day that is not a Legal Holiday at such Place of Payment with
the same force and effect as if made on the Interest Payment Date or Redemption
Date, or at the Stated Maturity or such other date and to the extent applicable
no Original Issue Dis count or interest, if any, shall accrue for the
intervening period.
SECTION XII.9 Governing Law and Jurisdiction. THIS INDENTURE AND THE
SECURITIES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE
OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. THE COMPANY, THE
TRUSTEE, AND EACH HOLDER OF A SECURITY (BY ACCEPTANCE THEREOF) THEREBY, (I)
SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE FEDERAL AND NEW YORK STATE COURTS
LOCATED IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK IN CONNECTION WITH
ANY SUIT, ACTION OR PROCEEDING RELATED TO THIS INDENTURE, (II) IRREVOCABLY
WAIVES ANY DEFENSE OF LACK OF PERSONAL JURISDICTION IN SUCH SUITS AND (III)
IRREVOCABLY WAIVES TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER
APPLICABLE LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING
OF VENUE OF ANY SUIT, ACTION OR PROCEEDING BROUGHT IN THE FEDERAL AND NEW YORK
STATE COURTS LOCATED IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK AND (C)
THAT SUCH SUIT, ACTION OR PROCEEDING HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
SECTION XII.10 No Recourse Against Others. A director, officer, employee
or stockholder, as such, of the Company shall not have any liability for any
obligations of the Company under the Securities or this Indenture or for any
claim based on, in respect of or by reason of such obligations or their
creation. By accepting a Security, each Holder of such Security shall waive and
release all such liability. The waiver and release shall be part of the
consideration for the issue of the Securities.
SECTION XII.11 Successors. All agreements of the Company in this
Indenture and the Securities shall bind its successor. All agreements of the
Trustee in this Indenture shall bind its successor.
SECTION XII.12 Effect of Headings and Table of Contents. The Article and
Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.
SECTION XII.13 Benefits of Indenture. Nothing in this Indenture or in
the Securities, express or implied, shall give to any person, other than the
parties hereto and their succes-
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sors hereunder and the Holders of Securities, any benefits or any legal or
equitable right, remedy or claim under this Indenture.
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SECTION XII.14 Multiple Originals. The parties may sign any number of
copies of this Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement. One signed copy is enough to prove this
Indenture.
LITTON INDUSTRIES, INC.
By:/s/ Carol A. Wiesner
----------------------------------------
Name: Carol A. Wiesner
Title: Vice President and Controller
Attest:
/s/ Jeanette M. Thomas
-------------------------------
Name: Jeanette M. Thomas
Title: Vice President and Secretary
The Bank of New York, as Trustee
By:/s/ Mary Beth Lewicki
----------------------------------------
Name: Mary Beth Lewicki
Title: Assistant Vice President
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EXHIBIT A
CERTIFICATE
This is to certify that, based on certificates we have received from our
member organizations substantially in the form set out in the Indenture relating
to the above-captioned Securities, as of the date hereof, U.S.$___________
principal amount of the above-captioned Securities acquired from Litton
Industries, Inc. (i) is owned by persons that are not United States persons (as
defined below), (ii) is owned by United States persons that are (a) foreign
branches of United States financial institutions (as defined in United States
Treasury Regulations Section 1.165-12(c)(1)(v) ("financial institutions"))
purchasing for their own account or for resale or (b) United States persons who
acquired the Securities through foreign branches of United States financial
institutions and who hold the Securities through such financial institutions on
the date hereof (and in the case of either clause (a) or (b), each financial
institution has agreed for the benefit of Litton Industries, Inc. to comply with
the requirements of Section 165(j)(3)(A), (B) or (C) of the United States
Internal Revenue Code of 1986, as amended, and the regulations thereunder) or
(iii) is owned by financial institutions for purposes of resale during the
restricted period (as defined in United States Treasury Regulations Section
1.163-5(c)(2)(i)(D)(7)). Financial institutions described in clause (iii) of the
preceding sentence (whether or not also described in clause (i) or (ii)) have
certified that they have not acquired the Securities for purposes of resale
directly or indirectly to United States persons or to persons within the United
States or its possessions.
As used in this Certificate, "United States persons" means citizens or
residents of the United States, corporations, partnerships or other entities
created or organized in or under the laws of the United States or any political
subdivision thereof or estates or trusts the income of which is subject to
United States Federal income taxation regardless of the source; "United States"
means the United States of America (including the States and the District of
Columbia), its territories, its possessions and other areas subject to its
jurisdic tion; and its "possessions" include Puerto Rico, the U.S. Virgin
Islands, Guam, American Samoa, Wake Island and the Northern Mariana Islands.
We further certify that (i) we are not making available herewith for
exchange any portion of the Temporary Global Bearer Security excepted in such
certificates and (ii) as of the date hereof, we have not received any
notification from any of our member organiza tions to the effect that the
statements made by such member organizations with respect to any portion of the
part submitted herewith for exchange are no longer true and cannot be relied
upon as of the date hereof.
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We understand that this certificate is required in connection with
certain tax laws of the United States. In connection therewith, if
administrative or legal proceedings are com menced or threatened in connection
with which this certificate is or would be relevant, we irrevocably authorize
you to produce this certificate to any interested party in such proceedings. We
agree to retain each statement provided by a member organization for a period of
four calendar years following the year in which the statement is received.
Dated: _________, 19___*
*To be dated no
earlier than the
Exchange Date.
[MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, BRUSSELS OFFICE,
AS OPERATOR OF THE EUROCLEAR
CLEARANCE SYSTEM]
[CEDEL BANK SOCIETE ANONYME]
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LITTON INDUSTRIES, INC.
$200,000,000 6.75% SENIOR DEBENTURES DUE 2018
OFFICERS' CERTIFICATE
Pursuant to Sections 2.1 and 2.3 of the Indenture (the "Indenture"),
dated April 13, 1998, between Litton Industries, Inc., a Delaware corporation
(the "Company"), and The Bank of New York, a New York banking corporation, as
trustee (the "Trustee"), the undersigned, Carol Wiesner, Vice President and
Controller of the Company, and Tim Paulson, Vice President and Treasurer of the
Company, hereby certify on behalf of the Company as follows:
(1) Authorization. The establishment of a series of Securities of
the Company has been approved and authorized in accordance with the provisions
of the Indenture and in accordance with resolutions adopted by the Board of
Directors of the Company at meetings held on December 4, 1991, December 19,
1991, May 1, 1997, May 23, 1997, and March 20, 1998.
(2) Compliance with Covenants and Conditions Precedent. All
covenants and conditions precedent provided for in the Indenture relating to
establishment of the form and terms of the Notes (as defined below) as a series
of Securities have been complied with.
(3) Terms. The terms of the series of the Securities established
pursuant to this Officer's Certificate and in accordance with Section 2.3(a) of
the Indenture shall be as follows:
(a) Title. The title of the series of Securities is the
"6.75% Senior Debentures due 2018" (the "Notes").
(b) Aggregate Principal Amount. The aggregate principal
amount of the Notes which may be authenticated and delivered pursuant to the
Indenture (except for Notes authenticated and delivered upon registration of
transfer of, or in exchange for, or in lieu of, other Notes pursuant to Sections
2.8, 2.9, 2.11, 3.6, 9.5 or 10.3 of the Indenture and except for any Notes
which, pursuant to Section 2.4 of the Indenture, are deemed never to have been
authenticated and delivered) is $200,000,000.
<PAGE> 78
(c) Registered Securities; Global Notes; Initial Depositary. Each Note
is issuable only as a Registered Security, without coupons. The Notes shall be
issuable in whole or in part in the form of one or more global Notes. Such
global Notes may be exchanged in whole or in part for individual Notes only on
the terms and conditions set forth in the Indenture. The initial Depositary for
such global Notes shall be The Depositary Trust Company.
The Notes shall be substantially in the form of Exhibit A attached
hereto, with such modifications thereto as may be approved by the authorized
officer executing the same.
(d) Persons to Whom Interest Payable. Interest on any Note 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 Note (or one or more
Predecessor Securities) is registered at the close of business on the Regular
Record Date (whether or not a Business Day) for such interest set forth in
Section 3(f) below, except that defaulted interest shall be payable in the
manner and to the persons provided for in Section 2.13 of the Indenture.
(e) Stated Maturity. The principal amount of the Notes will be payable
on April 15, 2018.
(f) Rate of Interest; Interest Payment Date; Regular Record Date;
Accrual of Interest. The Notes will bear interest at the rate of 6.75% per
annum. Interest on the Notes will be paid semi-annually in arrears on April 15
and October 15 of each year (each of which is an Interest Payment Date with
respect to the Notes), commencing on October 15, 1998, and at maturity. The
Regular Record Date for interest payable on each April 15 will be the
immediately preceding April 1, and the Regular Record Date for interest payable
on each October 15 will be the immediately preceding October 1 (in each case
whether or not a Business Day).
The Notes will bear interest from the date hereof or from the most
recent date to which interest has been paid or duly provided for until the
principal thereof is paid or made available for payment. Interest payments shall
be the amount of interest accrued from and including the most recent date in
respect of which interest has been paid or duly provided for (or from and
including the date of issue if no interest has been paid or duly provided for
with respect to such Note), to but excluding the next succeeding Interest
Payment Date.
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Interest will be computed on the basis of a
360-day year of twelve 30-day months.
(g) Place of Payment; Registration of Transfer and
Exchange; Notice to Company. Payment of the principal of and interest on the
Notes will be made at the Corporate Trust Office of the Trustee, or at any other
office or agency designated by the Company for such purpose; 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 register of the Securities. The Notes may be presented for
registration of transfer or exchange at the Corporate Trust Office of the
Trustee or at any other office or agency hereafter designated by the Company for
such purpose. Notices and demands to or upon the Company in respect of the Notes
and the Indenture may be served at the Corporate Trust Office of the Trustee or
at Litton Industries, Inc., 21240 Burbank Boulevard, Woodland Hills, California
91367, Attention: Vice President and Treasurer or at such address as the Company
may designate by notice to Holders of the Notes.
(h) Redemption. The Notes shall be redeemable, in
whole or from time to time 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 Notes to be redeemed and (ii) as determined by an Independent Investment
Banker (as defined), the sum of the present values of the remaining scheduled
payments of principal and interest thereon discounted to the date of redemption
on a semiannual basis (assuming a 360-day year consisting of twelve 30-day
months) at the Adjusted Treasury Rate (as defined), plus, in each case, accrued
interest thereon to the date of redemption.
"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 (as
defined), assuming a price for the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the
Comparable Treasury Price (as defined) for such redemption date,
plus 0.1875%.
"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 Notes 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
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term of the Notes. "Independent Investment Banker" means one of the
Reference Treasury Dealers (as defined) 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 (as
defined) 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 Merrill Lynch,
Pierce, Fenner & Smith Incorporated, Credit Suisse First Boston
Corporation, Goldman Sachs & Co., 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.
(i) Sinking Fund. The Company shall not be obligated
to redeem or purchase the Notes pursuant to a sinking or purchase fund or
analogous obligation or at the option of any Holder thereof.
(j) Denominations. The Notes are issuable in
denominations of $1,000 and integral multiples thereof.
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(k) Additional Covenants. The Notes shall have the
benefit of the covenants and agreements set forth in this Section 3(k).
(i) Limitation on Liens. The Company shall
not, and shall not permit any Subsidiary (as defined) to, create, assume or
suffer to exist any mortgage, pledge, lien, encumbrance, charge or security
interest (collectively, a "Lien") upon Restricted Property (as defined) to
secure any debt of the Company, any Subsidiary or any other Person (as defined),
without making effective provision whereby the Notes then outstanding 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) any Lien existing on the date of issuance of
the Notes;
(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 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 or any State thereof or any other country, or any agency,
instrumentality or political
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subdivision of any of 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 (as defined) of existing Sale and Leaseback
Transactions (as defined) which would be subject to the restrictions of Section
3(k)(ii) herein but for this clause (9), does not at any time exceed 15% of
Consolidated Net Tangible Assets (as defined).
(ii) 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 Notes) because such Liens would be of such character that no
violation of any of the provisions of Section 3(k)(i) herein 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 (as defined)
(whether by redemption, defeasance, repurchase, or otherwise) an amount
equal to the Value of such Sale and Leaseback Transaction.
6
<PAGE> 83
(iii) Definitions.
"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.
"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 Notes.
"Restricted Property" means (1) any
manufacturing facility, or portion thereof, owned
or leased 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, maintenances, 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.
7
<PAGE> 84
"Sale and Leaseback Transaction" means
any arrangement with any individual, corporation,
partnership, joint venture, association,
joint-stock company, trust, unincorporated
organization or government or any agency or
political subdivision thereof ("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, including 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.
Only for purposes of this Section 3(k),
"Subsidiary" of any specified corporation means
(i) a corporation, a majority of whose shares,
interests, rights to purchase, warrants, options,
participations or other equivalents of or
interests (however designated) in 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 (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.
"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
8
<PAGE> 85
renewal or extension options contained in the
lease, discounted at the weighted average
interest rate on the Notes of all series
(including the effective interest rate on any
original issue discount Notes) which are
outstanding on the effective date of such Sale
and Leaseback Transaction and which have the
benefit of Section 3(k)(ii) herein.
(4) Miscellaneous.
(a) Capitalized terms used herein and not otherwise defined
shall have the meanings specified in the Indenture.
(b) Concurrently herewith, the undersigned have executed an
Officers' Certificate relating to a series of Securities designated as 6.05%
Senior Notes due 2003.
(c) Pursuant to Section 12.5 of the Indenture, each of the
undersigned, for him/herself, states that he/she has read and is familiar with
the provisions of Article II of the Indenture relating to the establishment of
the form of security representing a series of Securities thereunder and the
establishment of the terms of a series of Securities thereunder and, in each
case, the definitions therein relating thereto; that he/she is generally
familiar with the other provisions of the Indenture and with the affairs of the
Company and its acts and proceedings and that the statements and opinions made
by him/her in this Officers' Certificate are based upon such familiarity; and
that, in his/her opinion, he/she has made such examination or investigation as
is necessary to enable him/her to express an informed opinion as to whether or
not all conditions precedent provided for in the Indenture related to the
establishment of the form and terms of the Notes have been complied with, and
that in his/her opinion all such conditions precedent have been complied with.
(d) This Officers' Certificate may be executed in one or
more counterparts, each of which so executed shall be deemed to be an original,
and shall together constitute one and the same Officers' Certificate.
9
<PAGE> 86
IN WITNESS WHEREOF, the undersigned have hereunto executed this
Officers' Certificate as of the 13th day of April, 1998.
LITTON INDUSTRIES, INC.
By: /s/ Carol A. Wiesner
-----------------------------------------
Name: Carol A. Wiesner
Title: Vice President and Controller
By: /s/ Timothy G. Paulson
-----------------------------------------
Name: Timothy G. Paulson
Title: Vice President and Treasurer
10
<PAGE> 87
LITTON INDUSTRIES, INC.
$100,000,000 6.05% Senior Notes due 2003
OFFICERS' CERTIFICATE
Pursuant to Sections 2.1 and 2.3 of the Indenture (the "Indenture"),
dated April 13, 1998, between Litton Industries, Inc., a Delaware corporation
(the "Company"), and The Bank of New York, a New York banking corporation, as
trustee (the "Trustee"), the undersigned, Carol Wiesner, Vice President and
Controller of the Company, and Tim Paulson, Vice President and Treasurer of the
Company, hereby certify on behalf of the Company as follows:
(1) Authorization. The establishment of a series of Securities of the
Company has been approved and authorized in accordance with the provisions of
the Indenture and in accordance with resolutions adopted by the Board of
Directors of the Company at meetings held on December 4, 1991, December 19,
1991, May 1, 1997, May 23, 1997 and March 20, 1998.
(2) Compliance with Covenants and Conditions Precedent. All covenants
and conditions precedent provided for in the Indenture relating to establishment
of the form and terms of the Notes (as defined below) as a series of Securities
have been complied with.
(3) Terms. The terms of the series of the Securities established
pursuant to this Officer's Certificate and in accordance with Section 2.3(a) of
the Indenture shall be as follows:
(a) Title. The title of the series of Securities is the "6.05%
Senior Notes due 2003" (the "Notes").
(b) Aggregate Principal Amount. The aggregate principal amount of
the Notes which may be authenticated and delivered pursuant to the Indenture
(except for Notes authenticated and delivered upon registration of transfer of,
or in exchange for, or in lieu of, other Notes pursuant to Sections 2.8, 2.9,
2.11, 9.5 or 10.3 of the Indenture and except for any Notes which, pursuant to
Section 2.4 of the Indenture, are deemed never to have been authenticated and
delivered) is $100,000,000.
<PAGE> 88
(c) Registered Securities; Global Notes; Initial Depositary. Each
Note is issuable only as a Registered Security, without coupons. The Notes shall
be issuable in whole or in part in the form of one or more global Notes. Such
global Notes may be exchanged in whole or in part for individual Notes only on
the terms and conditions set forth in the Indenture. The initial Depositary for
such global Notes shall be The Depositary Trust Company.
The Notes shall be substantially in the form of Exhibit A
attached hereto, with such modifications thereto as may be approved by the
authorized officer executing the same.
(d) Persons to Whom Interest Payable. Interest on any Note 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 Note (or one or more
Predecessor Securities) is registered at the close of business on the Regular
Record Date (whether or not a Business Day) for such interest set forth in
Section 3(f) below, except that defaulted interest shall be payable in the
manner and to the persons provided for in Section 2.13 of the Indenture.
(e) Stated Maturity. The principal amount of the Notes will be
payable on April 15, 2003.
(f) Rate of Interest; Interest Payment Date; Regular Record Date;
Accrual of Interest. The Notes will bear interest at the rate of 6.05% per
annum. Interest on the Notes will be paid semi-annually in arrears on April 15
and October 15 of each year (each of which is an Interest Payment Date with
respect to the Notes), commencing on October 15, 1998, and at maturity. The
Regular Record Date for interest payable on each April 15 will be the
immediately preceding April 1, and the Regular Record Date for interest payable
on each October 15 will be the immediately preceding October 1 (in each case
whether or not a Business Day).
The Notes will bear interest from the date hereof or from the
most recent date to which interest has been paid or duly provided for until the
principal thereof is paid or made available for payment. Interest payments shall
be the amount of interest accrued from and including the most recent date in
respect of which interest has been paid or duly provided for (or from and
including the date of issue if no interest has been paid or duly provided for
with respect to such Note), to but excluding the next succeeding Interest
Payment Date.
2
<PAGE> 89
Interest will be computed on the basis of a 360-day year of
twelve 30-day months.
(g) Place of Payment; Registration of Transfer and Exchange; Notice
to Company. Payment of the principal of and interest on the Notes will be made
at the Corporate Trust Office of the Trustee, or at any other office or agency
designated by the Company for such purpose; 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
register of the Securities. The Notes may be presented for registration of
transfer or exchange at the Corporate Trust Office of the Trustee or at any
other office or agency hereafter designated by the Company for such purpose.
Notices and demands to or upon the Company in respect of the Notes and the
Indenture may be served at the Corporate Trust Office of the Trustee or at
Litton Industries, Inc., 21240 Burbank Boulevard, Woodland Hills, California
91367, Attention: Vice President and Treasurer or at such address as the Company
may designate by notice to Holders of the Notes.
(h) Redemption. The Notes are not redeemable prior to their Stated
Maturity.
(i) Sinking Fund. The Company shall not be obligated to redeem or
purchase the Notes pursuant to a sinking or purchase fund or analogous
obligation or at the option of any Holder thereof.
(j) Denominations. The Notes are issuable in denominations of
$1,000 and integral multiples thereof.
(k) Additional Covenants. The Notes shall have the benefit of the
covenants and agreements set forth in this Section 3(k).
(i) Limitation on Liens. The Company shall not, and shall not
permit any Subsidiary (as defined) to, create, assume or suffer to exist any
mortgage, pledge, lien, encumbrance, charge or security interest (collectively,
a "Lien") upon Restricted Property (as defined) to secure any debt of the
Company, any Subsidiary or any other Person (as defined), without making
effective provision whereby the Notes then outstanding 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:
3
<PAGE> 90
(1) any Lien existing on the date of issuance of the
Notes;
(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 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 or
any State thereof or any other country, or any agency, instrumentality or
political subdivision of any of 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
4
<PAGE> 91
(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 (as defined) of existing Sale and Leaseback Transactions (as
defined) which would be subject to the restrictions of Section 3(k)(ii) herein
but for this clause (9), does not at any time exceed 15% of Consolidated Net
Tangible Assets (as defined).
(ii) 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 Notes) because such Liens
would be of such character that no violation of any of the provisions of Section
3(k)(i) herein 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 (as defined) (whether by redemption, defeasance,
repurchase, or otherwise) an amount equal to the Value of such Sale and
Leaseback Transaction.
(iii) Definitions.
"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.
5
<PAGE> 92
"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 Notes.
"Restricted Property" means (1) any manufacturing
facility, or portion thereof, owned or leased 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,
maintenances, 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 individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated
organization or government or any agency or political
subdivision thereof ("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, including 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
6
<PAGE> 93
provision of law with an effect similar to the former Section
168(f)(8) of the Internal Revenue Code of 1954.
Only for purposes of this Section 3(k), "Subsidiary" of
any specified corporation means (i) a corporation, a majority
of whose shares, interests, rights to purchase, warrants,
options, participations or other equivalents of or interests
(however designated) in 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 (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.
"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
Notes of all series (including the effective interest rate on
any original issue discount Notes) which are outstanding on
the effective date of such Sale and Leaseback Transaction and
which have the benefit of Section 3(k)(ii) herein.
(4) Miscellaneous.
(a) Capitalized terms used herein and not otherwise defined shall
have the meanings specified in the Indenture.
7
<PAGE> 94
(b) Concurrently herewith, the undersigned have executed an
Officers' Certificate relating to a series of Securities designated as 6.75%
Senior Debentures due 2018.
(c) Pursuant to Section 12.5 of the Indenture, each of the
undersigned, for him/herself, states that he/she has read and is familiar with
the provisions of Article II of the Indenture relating to the establishment of
the form of security representing a series of Securities thereunder and the
establishment of the terms of a series of Securities thereunder and, in each
case, the definitions therein relating thereto; that he/she is generally
familiar with the other provisions of the Indenture and with the affairs of the
Company and its acts and proceedings and that the statements and opinions made
by him/her in this Officers' Certificate are based upon such familiarity; and
that, in his/her opinion, he/she has made such examination or investigation as
is necessary to enable him/her to express an informed opinion as to whether or
not all conditions precedent provided for in the Indenture related to the
establishment of the form and terms of the Notes have been complied with, and
that in his/her opinion all such conditions precedent have been complied with.
(d) This Officers' Certificate may be executed in one or more
counterparts, each of which so executed shall be deemed to be an original, and
shall together constitute one and the same Officers' Certificate.
8
<PAGE> 95
IN WITNESS WHEREOF, the undersigned have hereunto executed this
Officers' Certificate as of the 13th day of April, 1998.
LITTON INDUSTRIES, INC.
By: /s/ Carol A. Wiesner
---------------------------------------
Name: Carol A. Wiesner
Title: Vice President and Controller
By: /s/ Timothy G. Paulson
---------------------------------------
Name: Timothy G. Paulson
Title: Vice President and Treasurer
9
<PAGE> 1
Exhibit 4.2
CONFORMED COPY
$400,000,000
CREDIT AGREEMENT
dated as of
March 27, 1998
among
Litton Industries, Inc.
The Banks Listed Herein
and
Morgan Guaranty Trust Company of New York,
as Agent
------------------------------------
J.P. Morgan Securities Inc.,
Arranger
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions.......................................................................................1
SECTION 1.02. Accounting Terms and Determinations..............................................................16
SECTION 1.03. Types of Borrowings..............................................................................16
ARTICLE 2
THE CREDITS
SECTION 2.01. Commitments to Lend..............................................................................17
SECTION 2.02. Notice of Committed Borrowings...................................................................17
SECTION 2.03. Money Market Borrowings..........................................................................18
SECTION 2.04. Notice to Banks; Funding of Loans................................................................22
SECTION 2.05. Registry; Notes..................................................................................23
SECTION 2.06. Maturity of Loans................................................................................23
SECTION 2.07. Interest Rates...................................................................................24
SECTION 2.08. Facility Fee.....................................................................................27
SECTION 2.09. Optional Termination or Reduction of Commitments.................................................27
SECTION 2.10. Scheduled Termination of Commitments.............................................................27
SECTION 2.11. Optional Prepayments.............................................................................27
SECTION 2.12. General Provisions as to Payments................................................................28
SECTION 2.13. Funding Losses...................................................................................29
SECTION 2.14. Computation of Interest and Fees.................................................................29
SECTION 2.15. Regulation D Compensation........................................................................29
SECTION 2.16. Method of Electing Interest Rates................................................................30
ARTICLE 3
CONDITIONS
SECTION 3.01. Effectiveness....................................................................................32
SECTION 3.02. Borrowings.......................................................................................33
ARTICLE 4
REPRESENTATIVES AND WARRANTIES
SECTION 4.01. Corporate Existence and Power....................................................................33
SECTION 4.02. Corporate and Governmental Authorization; No
Contravention........................................................................................34
</TABLE>
<PAGE> 3
<TABLE>
<CAPTION>
PAGE
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<S> <C>
SECTION 4.03. Binding Effect...................................................................................34
SECTION 4.04. Financial Information............................................................................34
SECTION 4.05. Litigation.......................................................................................35
SECTION 4.06. Compliance with ERISA............................................................................35
SECTION 4.07. Environmental Matters............................................................................35
SECTION 4.08. Taxes............................................................................................36
SECTION 4.09. Material Subsidiaries............................................................................36
SECTION 4.10. Not an Investment Company........................................................................36
SECTION 4.11. Use of Proceeds..................................................................................36
SECTION 4.12. Full Disclosure..................................................................................36
ARTICLE 5
COVENANTS
SECTION 5.01. Information......................................................................................37
SECTION 5.02. Maintenance of Property; Insurance...............................................................39
SECTION 5.03. Maintenance of Existence.........................................................................39
SECTION 5.04. Compliance with Laws.............................................................................39
SECTION 5.05. Leverage Ratio ..................................................................................40
SECTION 5.06. Minimum Consolidated Net Worth...................................................................40
SECTION 5.07. Interest Coverage Ratio..........................................................................40
SECTION 5.08. Subsidiary Debt Limitation.......................................................................40
SECTION 5.09. Negative Pledge..................................................................................40
SECTION 5.10. Consolidations, Mergers and Sales of Assets......................................................41
SECTION 5.11. Limitation on Affiliate Transactions.............................................................41
ARTICLE 6
DEFAULTS
SECTION 6.01. Events of Default................................................................................41
SECTION 6.02. Notice of Default................................................................................44
ARTICLE 7
THE AGENT
SECTION 7.01. Appointment and Authorization....................................................................44
SECTION 7.02. Agent and Affiliates.............................................................................44
SECTION 7.03. Action by Agent..................................................................................44
SECTION 7.04. Consultation with Experts........................................................................44
SECTION 7.05. Liability of Agent...............................................................................44
SECTION 7.06. Indemnification..................................................................................45
</TABLE>
ii
<PAGE> 4
<TABLE>
<CAPTION>
PAGE
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<S> <C>
SECTION 7.07. Credit Decision..................................................................................45
SECTION 7.08. Successor Agent..................................................................................45
SECTION 7.09. Agent's Fees.....................................................................................46
ARTICLE 8
CHANGE IN CIRCUMSTANCES
SECTION 8.01. Basis for Determining Interest Rate Inadequate or Unfair.........................................46
SECTION 8.02. Illegality.......................................................................................47
SECTION 8.03. Increased Cost and Reduced Return................................................................47
SECTION 8.04. Taxes............................................................................................49
SECTION 8.05. Base Rate Loans Substituted for Affected Fixed Rate Loans........................................50
SECTION 8.06. Substitution of Bank.............................................................................51
ARTICLE 9
MISCELLANEOUS
SECTION 9.01. Notices..........................................................................................51
SECTION 9.02. No Waivers.......................................................................................52
SECTION 9.03. Expenses; Indemnification........................................................................52
SECTION 9.04. Sharing of Set-Offs..............................................................................52
SECTION 9.05. Amendments and Waivers...........................................................................52
SECTION 9.06. Successors and Assigns...........................................................................53
SECTION 9.07. Designated Lenders...............................................................................53
SECTION 9.08. Collateral.......................................................................................56
SECTION 9.09. Governing Law; Submission to Jurisdiction........................................................56
SECTION 9.10. Counterparts; Integration........................................................................56
SECTION 9.11. WAIVER OF JURY TRIAL.............................................................................56
</TABLE>
Pricing Schedule
Commitment Schedule
Exhibit A - Note
Exhibit B - Money Market Quote Request
Exhibit C - Invitation for Money Market Quotes
Exhibit D - Money Market Quote
Exhibit E - Opinion of Counsel for the Borrower
Exhibit F - Opinion of Special Counsel for the Agent
Exhibit G - Assignment and Assumption Agreement
Exhibit H - Designation Agreement
Exhibit I - Extension Agreement
iii
<PAGE> 5
CREDIT AGREEMENT
AGREEMENT dated as of March 27, 1998 among LITTON INDUSTRIES, INC.,
the BANKS listed on the signature pages hereof and MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Agent.
The parties hereto hereby agree as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions. The following terms, as used herein, have
the following meanings:
"ABSOLUTE RATE AUCTION" means a solicitation of Money Market Quotes
setting forth Money Market Absolute Rates pursuant to Section 2.03.
"ADJUSTED CD RATE" has the meaning set forth in Section 2.07(b).
"ADMINISTRATIVE QUESTIONNAIRE" means, with respect to each Bank, an
administrative questionnaire in the form prepared by the Agent and submitted to
the Agent (with a copy to the Borrower) duly completed by such Bank.
"AFFILIATE" means any Person (other than a Subsidiary) directly or
indirectly controlling or controlled by or under direct or indirect common
control with the Borrower. 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.
"AGENT" means Morgan Guaranty Trust Company of New York in its
capacity as agent for the Banks hereunder, and its successors in such capacity.
"APPLICABLE LENDING OFFICE" means, with respect to any Bank, (i) in
the case of its Domestic Loans, its Domestic Lending Office, (ii) in the case of
its Euro-Dollar Loans, its Euro-Dollar Lending Office and (iii) in the case of
its Money Market Loans, its Money Market Lending Office.
"ASSESSMENT RATE" has the meaning set forth in Section 2.07(b).
<PAGE> 6
"ASSIGNEE" has the meaning set forth in Section 9.06(c).
"BANK" means each financial institution listed on the signature pages
hereof, each Assignee which becomes a Bank pursuant to Section 9.06(c), and
their respective successors.
"BASE RATE" means, for any day, a rate per annum equal to the higher
of (i) the Prime Rate for such day and (ii) the sum of 1/2 of 1% plus the
Federal Funds Rate for such day.
"BASE RATE LOAN" means a Committed Loan which bears interest at the
Base Rate pursuant to the applicable Notice of Committed Borrowing or Notice of
Interest Rate Election or the provisions of Section 2.16(a) or Article 8.
"BENEFIT ARRANGEMENT" means at any time an employee benefit plan
within the meaning of Section 3(3) of ERISA which is not a Plan or a
Multiemployer Plan and which is maintained or otherwise contributed to by any
member of the ERISA Group.
"BORROWER" means Litton Industries, Inc., a Delaware corporation, and
its successors.
"BORROWER'S 1997 FORM 10-K" means the Borrower's annual report on
Form 10-K for the fiscal year ended July 31, 1997, as filed with the Securities
and Exchange Commission pursuant to the Securities Exchange Act of 1934.
"BORROWING" has the meaning set forth in Section 1.03.
"CD BASE RATE" has the meaning set forth in Section 2.07(b).
"CD LOAN" means a Committed Loan which bears interest at a CD Rate
pursuant to the applicable Notice of Committed Borrowing or Notice of Interest
Rate Election.
"CD MARGIN" means a rate per annum determined in accordance with the
Pricing Schedule.
"CD RATE" means a rate of interest determined pursuant to Section
2.07(b) on the basis of an Adjusted CD Rate.
"CD REFERENCE BANKS" means _____________, _____________, and Morgan
Guaranty Trust Company of New York, or such other bank or banks as the Borrower
and the Agent may from time to time mutually designate.
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<PAGE> 7
"CHANGE OF CONTROL" means any of the following:
(a) The acquisition by any individual, entity or group (within
the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange
Act of 1934, as amended (the "EXCHANGE ACT")) (a "PERSON") of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of 30% or more of either (i) the then outstanding shares
of common stock of the Borrower (the "OUTSTANDING BORROWER COMMON
STOCK") or (ii) the combined voting power of the then outstanding voting
securities of the Borrower entitled to vote generally in the election of
directors (the "OUTSTANDING BORROWER VOTING SECURITIES"); provided,
however, that for purposes of this subsection (a), the following
acquisitions of stock shall not constitute a Change of Control: (i) any
acquisition by the Borrower, (ii) any acquisition by any employee
benefit plan (or related trust) sponsored or maintained by the Borrower
or any corporation controlled by the Borrower or (iii) any acquisition
by any corporation pursuant to a transaction which complies with clauses
(i), (ii) and (iii) of subsection (c) of this definition;
(b) Individuals who, as of the date hereof, constitute the Board
of Directors of the Borrower (the "INCUMBENT BOARD") cease for any
reason to constitute at least a majority of the Board; provided,
however, that any individual becoming a director subsequent to the date
hereof whose election, or nomination for election by the Borrower's
shareholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall be considered as
though such individual were a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose initial
assumption of office occurs as a result of an actual or threatened
election contest with respect to the election or removal of directors or
other actual or threatened solicitation of proxies or consents by or on
behalf of a Person other than the Board;
(c) Consummation of a reorganization, merger or consolidation or
sale or other disposition of all or substantially all of the assets of
the Borrower (a "BUSINESS COMBINATION"), in each case, unless, following
such Business Combination, (i) all or substantially all of the
individuals and entities who were the beneficial owners, respectively,
of the Outstanding Borrower Common Stock and Outstanding Borrower Voting
Securities immediately prior to such Business Combination beneficially
own, directly or indirectly, more than 60% of, respectively, the then
outstanding shares of common stock and the combined voting power of the
then outstanding voting securities entitled to vote generally in the
election of directors, as the case may be, of the corporation resulting
from
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<PAGE> 8
such Business Combination (including, without limitation, a corporation
which as a result of such transaction owns the Borrower or all or
substantially all of the Borrower's assets either directly or through
one or more subsidiaries) in substantially the same proportions as their
ownership, immediately prior to such Business Combination of the
Outstanding Borrower Common Stock and Outstanding Borrower Voting
Securities, as the case may be, (ii) no Person (excluding any employee
benefit plan (or related trust) of the Borrower or such corporation
resulting from such Business Combination) beneficially owns, directly or
indirectly, 30% or more of, respectively, the then outstanding shares of
common stock of the corporation resulting from such Business Combination
or the combined voting power of the then outstanding voting securities
of such corporation and (iii) at least a majority of the members of the
board of directors of the corporation resulting from such Business
Combination were members of the Incumbent Board at the time of the
execution of the initial agreement, or of the action of the Board,
providing for such Business Combination; or
(d) Approval by the shareholders of the Borrower of a complete
liquidation or dissolution of the Borrower.
"COMMITMENT" means (i) with respect to each Bank listed on the
Commitment Schedule, the amount set forth opposite such Bank's name on the
Commitment Schedule and (ii) with respect to any Assignee which becomes a Bank
pursuant to Section 9.06(c), the amount of the transferor Bank's Commitment
assigned to it pursuant to Section 9.06(c), in each case as such amount may be
changed from time to time pursuant to Section 2.09 or 9.06(c); provided that, if
the context so requires, the term "Commitment" means the obligation of a Bank to
extend credit up to such amount to the Borrower hereunder.
"COMMITMENT SCHEDULE" means the Commitment Schedule attached
hereto.
"COMMITTED LOAN" means a loan made by a Bank pursuant to Section
2.01; provided that, if any such loan or loans (or portions thereof) are
combined or subdivided pursuant to a Notice of Interest Rate Election, the term
"Committed Loan" shall refer to the combined principal amount resulting from
such combination or to each of the separate principal amounts resulting from
such subdivision, as the case may be.
"CONSOLIDATED EBIT" means, for any period, the sum of Consolidated
Net Income for such period plus, to the extent deducted in the determination of
4
<PAGE> 9
such Consolidated Net Income, Consolidated Interest Expense for such period and
the provision for income taxes for such period.
"CONSOLIDATED EBITDA" means, for any period, the Consolidated Net
Income of the Borrower and its Consolidated Subsidiaries for such period before
cumulative effect of accounting changes, provision for income tax, interest
expense and depreciation and amortization expense.
"CONSOLIDATED INTEREST EXPENSE" means, for any period, the interest
expense of the Borrower and its Consolidated Subsidiaries determined on a
consolidated basis for such period.
"CONSOLIDATED NET INCOME" means, for any period, the net income of
the Borrower and its Consolidated Subsidiaries for such period, determined on a
consolidated basis.
"CONSOLIDATED NET WORTH" means at any date the shareholders'
investment in the Borrower and its Consolidated Subsidiaries determined on a
consolidated basis as of such date.
"CONSOLIDATED SUBSIDIARY" means at any date any Subsidiary or other
entity the accounts of which would be consolidated with those of the Borrower in
its consolidated financial statements if such statements were prepared as of
such date.
"DEBT" of any Person means at any date, without duplication, (i) all
obligations of such Person for borrowed money, (ii) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments, (iii)
all obligations of such Person to pay the deferred purchase price of property or
services, except trade accounts payable and deferred employee compensation
obligations arising in the ordinary course of business, (iv) all obligations of
such Person as lessee which are capitalized in accordance with generally
accepted accounting principles, (v) all unpaid reimbursement obligations of such
Person in respect of letters of credit or similar instruments but only to the
extent that either (x) the issuer has honored a drawing thereunder or (y)
payment of such obligation is otherwise due under the terms thereof, (vi) all
Debt secured by a Lien on any asset of such Person, whether or not such Debt is
otherwise an obligation of such Person, and (vii) all Debt of others Guaranteed
by such Person.
"DEFAULT" means any condition or event which constitutes an Event of
Default or which with the giving of notice or lapse of time or both would,
unless cured or waived, become an Event of Default.
5
<PAGE> 10
"DERIVATIVES OBLIGATIONS" of any Person means all obligations of such
Person in respect of any rate swap transaction, basis swap, forward rate
transaction, commodity swap, commodity option, equity or equity index swap,
equity or equity index option, bond option, interest rate option, foreign
exchange transaction, cap transaction, floor transaction, collar transaction,
currency swap transaction, cross-currency rate swap transaction, currency option
or any other similar transaction (including any option with respect to any of
the foregoing transactions) or any combination of the foregoing transactions.
"DESIGNATED LENDER" means, with respect to any Designating Bank, an
Eligible Designee designated by it pursuant to Section 9.07(a) as a Designated
Lender for purposes of this Agreement.
"DESIGNATING BANK" means, with respect to each Designated Lender, the
Bank that designated such Designated Lender pursuant to Section 9.07(a).
"DIVIDEND PAYMENT" means (i) any dividend or other distribution on
any shares of the Borrower's capital stock or (ii) any payment on account of the
purchase, redemption, retirement or acquisition of (a) any shares of the
Borrower's capital stock or (b) any option, warrant or other right to acquire
shares of the Borrower's capital stock.
"DOMESTIC BUSINESS DAY" means any day except a Saturday, Sunday or
other day on which commercial banks in New York City are authorized or required
by law to close.
"DOMESTIC LENDING OFFICE" means, as to each Bank, its office located
at its address set forth in its Administrative Questionnaire (or identified in
its Administrative Questionnaire as its Domestic Lending Office) or such other
office as such Bank may hereafter designate as its Domestic Lending Office by
notice to the Borrower and the Agent; provided that any Bank may so designate
separate Domestic Lending Offices for its Base Rate Loans, on the one hand, and
its CD Loans, on the other hand, in which case all references herein to the
Domestic Lending Office of such Bank shall be deemed to refer to either or both
of such offices, as the context may require.
"DOMESTIC LOANS" means CD Loans or Base Rate Loans or both.
"DOMESTIC RESERVE PERCENTAGE" has the meaning set forth in Section
2.07(b).
"EFFECTIVE DATE" means the date this Agreement becomes effective in
accordance with Section 3.01.
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<PAGE> 11
"ELIGIBLE DESIGNEE" means a special purpose corporation that (i) is
organized under the laws of the United States or any state thereof, (ii) is
engaged in making, purchasing or otherwise investing in commercial loans in the
ordinary course of its business and (iii) issues (or the parent of which issues)
commercial paper rated at least A-1 or the equivalent thereof by S&P or P-1 or
the equivalent thereof by Moody's.
"ENVIRONMENTAL LAWS" means any and all federal, state, local and
foreign statutes, laws, judicial decisions, regulations, ordinances, rules,
judgments, orders, decrees, plans, injunctions, permits, concessions, grants,
franchises, licenses, agreements and other governmental restrictions relating to
the environment, the effect of the environment on human health or to emissions,
discharges or releases of pollutants, contaminants, Hazardous Substances or
wastes into the environment including, without limitation, ambient air, surface
water, ground water, or land, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of pollutants, contaminants, Hazardous Substances or wastes or the
clean-up or other remediation thereof.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, or any successor statute.
"ERISA GROUP" means the Borrower, any Subsidiary and all members of a
controlled group of corporations and all trades or businesses (whether or not
incorporated) under common control which, together with the Borrower or any
Subsidiary, are treated as a single employer under Section 414 of the Internal
Revenue Code.
"EURO-DOLLAR BUSINESS DAY" means any Domestic Business Day on which
commercial banks are open for international business (including dealings in
dollar deposits) in London.
"EURO-DOLLAR LENDING OFFICE" means, as to each Bank, its office,
branch or affiliate located at its address set forth in its Administrative
Questionnaire (or identified in its Administrative Questionnaire as its
Euro-Dollar Lending Office) or such other office, branch or affiliate of such
Bank as it may hereafter designate as its Euro-Dollar Lending Office by notice
to the Borrower and the Agent.
"EURO-DOLLAR LOAN" means a Committed Loan which bears interest at a
Euro-Dollar Rate pursuant to the applicable Notice of Committed Borrowing or
Notice of Interest Rate Election.
"EURO-DOLLAR MARGIN" means a rate per annum determined in accordance
with the Pricing Schedule.
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<PAGE> 12
"EURO-DOLLAR RATE" means a rate of interest determined pursuant to
Section 2.07(c) on the basis of a London Interbank Offered Rate.
"EURO-DOLLAR REFERENCE BANKS" means the principal London offices of
________________, __________________ and Morgan Guaranty Trust Company of New
York, or such other bank or banks as the Borrower and the Agent may from time to
time mutually designate.
"EURO-DOLLAR RESERVE PERCENTAGE" means for any day that percentage
(expressed as a decimal) which is in effect on such day, as prescribed by the
Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement for a member bank of the Federal
Reserve System in New York City with deposits exceeding five billion dollars in
respect of "EUROCURRENCY LIABILITIES" (or in respect of any other category of
liabilities which includes deposits by reference to which the interest rate on
Euro-Dollar Loans is determined or any category of extensions of credit or other
assets which includes loans by a non-United States office of any Bank to United
States residents).
"EVENT OF DEFAULT" has the meaning set forth in Section 6.01.
"FEDERAL FUNDS RATE" means, for any day (the "ACCRUAL DATE"), the
rate per annum (rounded upward, if necessary, to the nearest 1/100th of 1%)
equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on the accrual date, as published by the Federal Reserve Bank of
New York on the Domestic Business Day next succeeding such day, provided that
(i) if the accrual date is not a Domestic Business Day, the Federal Funds Rate
for the accrual date shall be such rate on such transactions on the next
preceding Domestic Business Day as so published on the next succeeding Domestic
Business Day, and (ii) if no such rate is so published on such next succeeding
Domestic Business Day, the Federal Funds Rate for the accrual date shall be the
average rate quoted to Morgan Guaranty Trust Company of New York on the accrual
date (or next preceding Domestic Business Day) on such transactions as
determined by the Agent.
"FIXED RATE LOANS" means CD Loans or Euro-Dollar Loans or Money
Market Loans (excluding Money Market LIBOR Loans bearing interest at the Base
Rate pursuant to Section 8.01(a)) or any combination of the foregoing.
"GROUP OF LOANS" means, at any time, a group of Loans consisting of
(i) all Committed Loans which are Base Rate Loans at such time, (ii) all
Euro-Dollar Loans having the same Interest Period at such time or (iii) all CD
Loans having the same Interest Period at such time, provided that, if a
Committed Loan of any
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<PAGE> 13
particular Bank is converted to or made as a Base Rate Loan pursuant to Article
8, such Loan shall be included in the same Group or Groups of Loans from time to
time as it would have been in if it had not been so converted or made.
"GUARANTEE" by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Debt of any
other Person and, without limiting the generality of the foregoing, any
obligation, direct or indirect, contingent or otherwise, of such Person (i) to
purchase or pay (or advance or supply funds for the purchase or payment of) such
Debt (whether arising by virtue of partnership arrangements, by agreement to
keep-well, to purchase assets, goods, securities or services, to take-or-pay, or
to maintain financial statement conditions or otherwise) or (ii) entered into
for the purpose of assuring in any other manner the holder of such Debt of the
payment thereof or to protect such holder against loss in respect thereof (in
whole or in part), provided that the term Guarantee shall not include
endorsements for collection or deposit in the ordinary course of business. The
term "GUARANTEE" used as a verb has a corresponding meaning.
"HAZARDOUS SUBSTANCES" means any toxic, radioactive, caustic or
otherwise hazardous substance, including petroleum, its derivatives, by-products
and other hydrocarbons, or any substance having any constituent elements
displaying any of the foregoing characteristics.
"INDEMNITEE" has the meaning set forth in Section 9.03(b).
"INTEREST COVERAGE RATIO" means, for any period, the ratio of
Consolidated EBIT for such period to Consolidated Interest Expense for such
period.
"INTEREST PERIOD" means:
(1) with respect to each Euro-Dollar Loan, the period commencing on
the date of borrowing specified in the applicable Notice of Borrowing or on the
date specified in an applicable Notice of Interest Rate Election and ending one,
two, three or six months thereafter, as the Borrower may elect in the applicable
Notice of Borrowing; provided that:
(a) any Interest Period which would otherwise end on a day which
is not a Euro-Dollar Business Day shall be extended to the next
succeeding Euro-Dollar Business Day unless such Euro-Dollar Business Day
falls in another calendar month, in which case such Interest Period
shall end on the next preceding Euro-Dollar Business Day;
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<PAGE> 14
(b) any Interest Period which begins on the last Euro-Dollar
Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such
Interest Period) shall, subject to clause (c) below, end on the last
Euro-Dollar Business Day of a calendar month; and
(c) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date;
(2) with respect to each CD Loan, the period commencing on the date
of borrowing specified in the applicable Notice of Borrowing or on the date
specified in an applicable Notice of Interest Rate Election and ending 30, 60,
90 or 180 days thereafter, as the Borrower may elect in the applicable Notice of
Borrowing; provided that:
(a) any Interest Period (other than an Interest Period
determined pursuant to clause (b) below) which would otherwise end on a
day which is not a Euro-Dollar Business Day shall be extended to the
next succeeding Euro-Dollar Business Day; and
(b) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date;
(3) with respect to each Money Market LIBOR Borrowing, the period
commencing on the date of such Borrowing and ending such whole number of months
thereafter as the Borrower may elect in accordance with Section 2.03; provided
that:
(a) any Interest Period which would otherwise end on a day which
is not a Euro-Dollar Business Day shall be extended to the next
succeeding Euro-Dollar Business Day unless such Euro-Dollar Business Day
falls in another calendar month, in which case such Interest Period
shall end on the next preceding Euro-Dollar Business Day;
(b) any Interest Period which begins on the last Euro-Dollar
Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such
Interest Period) shall, subject to clause (c) below, end on the last
Euro-Dollar Business Day of a calendar month; and
(c) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date;
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<PAGE> 15
(4) with respect to each Money Market Absolute Rate Borrowing, the
period commencing on the date of such Borrowing and ending such number of days
thereafter (but not less than 14 days) as the Borrower may elect in accordance
with Section 2.03; provided that:
(a) any Interest Period which would otherwise end on a day which
is not a Euro-Dollar Business Day shall be extended to the next
succeeding Euro-Dollar Business Day; and
(b) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986, as
amended, or any successor statute.
"LEVERAGE RATIO" means, at any date, the ratio of Total Borrowed
Funds at such date to Consolidated EBITDA for the period of the four fiscal
quarters most recently ended on or prior to such date.
"LIBOR AUCTION" means a solicitation of Money Market Quotes setting
forth Money Market Margins based on the London Interbank Offered Rate pursuant
to Section 2.03.
"LIEN" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset.
For the purposes of this Agreement, the Borrower or any Subsidiary shall be
deemed to own subject to a Lien any asset which it has acquired or holds subject
to the interest of a vendor or lessor under any conditional sale agreement,
capital lease or other title retention agreement relating to such asset.
"LOAN" means a Committed Loan or a Money Market Loan and "LOANS"
means Committed Loans or Money Market Loans or any combination of the foregoing.
"LONDON INTERBANK OFFERED RATE" has the meaning set forth in Section
2.07(c).
"MATERIAL DEBT" means Debt (other than the Notes) of the Borrower
and/or one or more of its Subsidiaries, arising in one or more related or
unrelated transactions, in an aggregate principal amount exceeding $25,000,000.
"MATERIAL FINANCIAL OBLIGATIONS" means a principal amount of Debt
and/or payment obligations in respect of Derivatives Obligations of the Borrower
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<PAGE> 16
and/or one or more of its Subsidiaries, arising in one or more related or
unrelated transactions, exceeding in the aggregate $25,000,000.
"MATERIAL PLAN" means at any time a Plan or Plans having aggregate
Unfunded Liabilities in excess of $10,000,000.
"MATERIAL SUBSIDIARY" means a Subsidiary, including its Subsidiaries,
which meets any of the following conditions:
(1) the Borrower's and its other Subsidiaries' investments in
and advances to the Subsidiary exceed 5 percent of the total assets of
the Borrower and its Subsidiaries consolidated as of the end of the most
recently completed fiscal year; or
(2) the Borrower's and its other Subsidiaries' proportionate
share of the total assets (after intercompany eliminations) of the
Subsidiary exceeds 5 percent of the total assets of the Borrower and its
Subsidiaries consolidated as of the end of the most recently completed
fiscal year; or
(3) the Borrower's and its other Subsidiaries' equity in the
income from continuing operations before income taxes, extraordinary
items and cumulative effect of a change in accounting principle of the
Subsidiary exceeds 5 percent of such income of the Borrower and its
Subsidiaries consolidated for the most recently completed fiscal year.
Computational note: For purposes of making the prescribed income test
the following guidance should be applied:
1. When a loss has been incurred by either the Borrower and its
Subsidiaries consolidated or the tested Subsidiary, but not both, the
equity in the income or loss of the tested Subsidiary should be excluded
from the income of the Borrower and its Subsidiaries consolidated for
purposes of the computation.
2. If income of the Borrower and its Subsidiaries consolidated
for the most recent fiscal year is at least 5 percent lower than the
average of the income for the last five fiscal years, such average
income should be substituted for purposes of the computation. Any loss
years should be omitted for purposes of computing average income.
"MINIMUM COMPLIANCE LEVEL" means, at any date, an amount equal to the
sum of (i) $845,000,000 plus (ii) for each fiscal quarter of the Borrower
commencing after January 31, 1998 and on or prior to such date for which
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<PAGE> 17
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, 1998 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.
"MONEY MARKET ABSOLUTE RATE" has the meaning set forth in Section
2.03(d).
"MONEY MARKET ABSOLUTE RATE LOAN" means a loan to be made by a Bank
pursuant to an Absolute Rate Auction.
"MONEY MARKET LENDING OFFICE" means, as to each Bank, its Domestic
Lending Office or such other office, branch or affiliate of such Bank as it may
hereafter designate as its Money Market Lending Office by notice to the Borrower
and the Agent; provided that any Bank may from time to time by notice to the
Borrower and the Agent designate separate Money Market Lending Offices for its
Money Market LIBOR Loans, on the one hand, and its Money Market Absolute Rate
Loans, on the other hand, in which case all references herein to the Money
Market Lending Office of such Bank shall be deemed to refer to either or both of
such offices, as the context may require.
"MONEY MARKET LIBOR LOAN" means a loan to be made by a Bank pursuant
to a LIBOR Auction (including such a loan bearing interest at the Base Rate
pursuant to Section 8.01(a)).
"MONEY MARKET LOAN" means a Money Market LIBOR Loan or a Money
Market Absolute Rate Loan.
"MONEY MARKET MARGIN" has the meaning set forth in Section 2.03(d).
"MONEY MARKET QUOTE" means an offer by a Bank to make a Money Market
Loan in accordance with Section 2.03.
"MULTIEMPLOYER PLAN" means at any time an employee pension benefit
plan within the meaning of Section 4001(a)(3) of ERISA to which any member of
the ERISA Group is then making or accruing an obligation to make contributions
in an amount exceeding $1,000,000 per annum or has within the preceding five
plan years made such contributions, including for these purposes any Person
which ceased to be a member of the ERISA Group during such five year period.
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<PAGE> 18
"NOTES" means promissory notes of the Borrower, substantially in the
form of Exhibit A hereto, evidencing the obligation of the Borrower to repay the
Loans, and "NOTE" means any one of such promissory notes issued hereunder.
"NOTICE OF BORROWING" means a Notice of Committed Borrowing (as
defined in Section 2.02) or a Notice of Money Market Borrowing (as defined in
Section 2.03(f)).
"NOTICE OF INTEREST RATE ELECTION" has the meaning set forth in
Section 2.16.
"PARENT" means, with respect to any Bank, any Person controlling such
Bank.
"PARTICIPANT" has the meaning set forth in Section 9.06(b).
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"PERSON" means an individual, a corporation, a partnership, an
association, a trust or any other entity or organization, including a government
or political subdivision or an agency or instrumentality thereof.
"PLAN" means at any time an employee pension benefit plan (other than
a Multiemployer Plan) which is covered by Title IV of ERISA or subject to the
minimum funding standards under Section 412 of the Internal Revenue Code and
either (i) is maintained, or contributed to, by any member of the ERISA Group
for employees of any member of the ERISA Group or (ii) has at any time within
the preceding five years been maintained, or contributed to, by any Person which
was at such time a member of the ERISA Group for employees of any Person which
was at such time a member of the ERISA Group.
"PRICING SCHEDULE" means the Schedule attached hereto identified as
such.
"PRIME RATE" means the rate of interest publicly announced by Morgan
Guaranty Trust Company of New York in New York City from time to time as its
Prime Rate.
"QUARTERLY PAYMENT DATES" means each March 31, June 30, September 30
and December 31.
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"REFERENCE BANKS" means the CD Reference Banks or the Euro-Dollar
Reference Banks, as the context may require, and "REFERENCE BANK" means any one
of such Reference Banks.
"REGULATION U" means Regulation U of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"REQUIRED BANKS" means at any time Banks having at least 55% of the
aggregate amount of the Commitments or, if the Commitments shall have been
terminated, holding at least 55% of the aggregate unpaid principal amount of the
Loans.
"REVOLVING CREDIT PERIOD" means the period from and including the
Effective Date to but not including the Termination Date.
"SUBSIDIARY" means any corporation or other entity of which
securities or other ownership interests having ordinary voting power to elect a
majority of the board of directors or other persons performing similar functions
are at the time directly or indirectly owned by the Borrower (or, if such term
is used with reference to another Person, by such other Person).
"TERMINATION DATE" means March 26, 1999 or such later date to which
the Termination Date shall have been extended pursuant to Section 2.01(b), or,
if such day is not a Euro-Dollar Business Day, the next preceding Euro-Dollar
Business Day.
"TOTAL BORROWED FUNDS" means, at any date, the Debt of the Borrower
and its Consolidated Subsidiaries determined on a consolidated basis as of such
date.
"UNFUNDED LIABILITIES" means, with respect to any Plan at any time,
the amount (if any) by which (i) the value of all benefit liabilities under such
Plan, determined on a plan termination basis using the assumptions prescribed by
the PBGC for purposes of Section 4044 of ERISA, exceeds (ii) the fair market
value of all Plan assets allocable to such liabilities under Title IV of ERISA
(excluding any accrued but unpaid contributions), all determined as of the then
most recent valuation date for such Plan, but only to the extent that such
excess represents a potential liability of a member of the ERISA Group to the
PBGC or any other Person under Title IV of ERISA.
"UNITED STATES" means the United States of America, including the
States and the District of Columbia, but excluding its territories and
possessions.
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"WHOLLY-OWNED CONSOLIDATED SUBSIDIARY" means any Consolidated
Subsidiary all of the shares of capital stock or other ownership interests of
which (except directors' qualifying shares) are at the time directly or
indirectly owned by the Borrower.
SECTION 1.02. Accounting Terms and Determinations. Accounting Terms
and Determinations. Unless otherwise specified herein, all accounting terms used
herein shall be interpreted, all accounting determinations hereunder shall be
made, and all financial statements required to be delivered hereunder shall be
prepared in accordance with generally accepted accounting principles as in
effect from time to time, applied on a basis consistent (except for changes
concurred in by the Borrower's independent public accountants) with the most
recent audited consolidated financial statements of the Borrower and its
Consolidated Subsidiaries delivered to the Banks; provided that, if the Borrower
notifies the Agent that the Borrower wishes to amend any covenant in Article 5
to eliminate the effect of any change in generally accepted accounting
principles on the operation of such covenant (or if the Agent notifies the
Borrower that the Required Banks wish to amend Article 5 for such purpose), then
the Borrower's compliance with such covenant shall be determined on the basis of
generally accepted accounting principles in effect immediately before the
relevant change in generally accepted accounting principles became effective,
until either such notice is withdrawn or such covenant is amended in a manner
satisfactory to the Borrower and the Required Banks.
SECTION 1.03. Types of Borrowings. The term "BORROWING" denotes the
aggregation of Loans of one or more Banks to be made to the Borrower pursuant to
Article 2 on a single date and for a single initial Interest Period. Borrowings
are classified for purposes of this Agreement either by reference to the pricing
of Loans comprising such Borrowing (e.g., a "BASE RATE BORROWING" is a Borrowing
comprised of Base Rate Loans and a "EURO-DOLLAR BORROWING" is a Borrowing
comprised of Euro-Dollar Loans) or by reference to the provisions of Article 2
under which participation therein is determined (i.e., a "COMMITTED BORROWING"
is a Borrowing under Section 2.01 in which all Banks participate in proportion
to their Commitments, while a "MONEY MARKET BORROWING" is a Borrowing under
Section 2.03 in which the Bank participants are determined on the basis of their
bids in accordance therewith).
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ARTICLE 2
THE CREDITS
SECTION 2.01. Commitments to Lend. (a) During the Revolving Credit
Period each Bank severally agrees, on the terms and conditions set forth in this
Agreement, to make loans to the Borrower pursuant to this Section from time to
time in amounts such that the aggregate principal amount of Committed Loans by
such Bank at any one time outstanding shall not exceed the amount of its
Commitment. Each Borrowing under this Section shall be in an aggregate principal
amount of $15,000,000 or any larger multiple of $1,000,000 (except that any such
Borrowing may be in the aggregate amount available in accordance with Section
3.02(b)) and shall be made from the several Banks ratably in proportion to their
respective Commitments. Within the foregoing limits, the Borrower may borrow
under this Section, repay, or to the extent permitted by Section 2.11, prepay
Loans and reborrow at any time during the Revolving Credit Period under this
Section 2.01.
(b) The Termination Date may be extended in the manner set forth in
this subsection (b) for a period of 364 days from the Termination Date then in
effect. If the Borrower wishes to request an extension of the Termination Date,
it shall give written notice to that effect to the Agent not less than 40 nor
more than 55 days prior to the Termination Date then in effect, whereupon the
Agent shall promptly notify each of the Banks of such request. Each Bank will
use its best efforts to respond to such request, whether affirmatively or
negatively, as it may elect in its sole discretion, within 20 days of such
notice to the Agent. If less than all Banks respond affirmatively to such
request within such 20 days, then the Borrower may request the Banks that do not
elect to extend the Termination Date to assign their Commitments in their
entirety, no later than 5 days prior to the Termination Date then in effect, to
one or more Assignees pursuant to Section ? which Assignees will agree to extend
the Termination Date. If all Banks (including such Assignees and excluding their
respective transferor Banks) respond affirmatively, then, subject to receipt by
the Agent of counterparts of an Extension Agreement in substantially the form of
Exhibit I hereto duly completed and signed by all of the parties thereto, the
Termination Date shall be extended to the date specified above.
SECTION 2.02. Notice of Committed Borrowings. The Borrower shall give
the Agent notice (a "NOTICE OF COMMITTED BORROWING") not later than 10:30 A.M.
(New York City time) on (x) the date of each Base Rate Borrowing, (y) the second
Domestic Business Day before each CD Borrowing and (z) the third Euro-Dollar
Business Day before each Euro-Dollar Borrowing, specifying:
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<PAGE> 22
(a) the date of such Borrowing, which shall be a Domestic
Business Day in the case of a Domestic Borrowing or a Euro-Dollar
Business Day in the case of a Euro-Dollar Borrowing,
(b) the aggregate amount of such Borrowing,
(c) whether the Loans comprising such Borrowing are to bear
interest initially at the Base Rate, a CD Rate or a Euro-Dollar Rate;
and
(d) in the case of a Fixed Rate Borrowing, the duration of the
initial Interest Period applicable thereto, subject to the provisions of
the definition of Interest Period.
SECTION 2.03. Money Market Borrowings. (a) The Money Market Option.
In addition to Committed Borrowings pursuant to Section 2.01, the Borrower may,
as set forth in this Section, request the Banks during the Revolving Credit
Period to make offers to make Money Market Loans to the Borrower. The Banks may,
but shall have no obligation to, make such offers and the Borrower may, but
shall have no obligation to, accept any such offers in the manner set forth in
this Section.
(b) Money Market Quote Request. When the Borrower wishes to request
offers to make Money Market Loans under this Section, it shall transmit to the
Agent by telex or facsimile transmission a Money Market Quote Request
substantially in the form of Exhibit B hereto so as to be received no later than
10:30 A.M. (New York City time) on (x) the fifth Euro-Dollar Business Day prior
to the date of Borrowing proposed therein, in the case of a LIBOR Auction or (y)
the Domestic Business Day next preceding the date of Borrowing proposed therein,
in the case of an Absolute Rate Auction (or, in either case, such other time or
date as the Borrower and the Agent shall have mutually agreed and shall have
notified to the Banks not later than the date of the Money Market Quote Request
for the first LIBOR Auction or Absolute Rate Auction for which such change is to
be effective) specifying:
(i) the proposed date of Borrowing, which shall be a Euro-Dollar
Business Day in the case of a LIBOR Auction or a Domestic Business Day
in the case of an Absolute Rate Auction,
(ii) the aggregate amount of such Borrowing, which shall be
$15,000,000 or a larger multiple of $1,000,000,
(iii) the duration of the Interest Period applicable thereto,
subject to the provisions of the definition of Interest Period, and
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<PAGE> 23
(iv) whether the Money Market Quotes requested are to set forth
a Money Market Margin or a Money Market Absolute Rate.
The Borrower may request offers to make Money Market Loans for more than one
Interest Period in a single Money Market Quote Request. No Money Market Quote
Request shall be given within five Euro-Dollar Business Days (or such other
number of days as the Borrower and the Agent may agree) of any other Money
Market Quote Request.
(c) Invitation for Money Market Quotes. Promptly upon receipt of a
Money Market Quote Request, the Agent shall send to the Banks by telex or
facsimile transmission an Invitation for Money Market Quotes substantially in
the form of Exhibit C hereto, which shall constitute an invitation by the
Borrower to each Bank to submit Money Market Quotes offering to make the Money
Market Loans to which such Money Market Quote Request relates in accordance with
this Section.
(d) Submission and Contents of Money Market Quotes.
(i) Each Bank may submit a Money Market Quote containing an
offer or offers to make Money Market Loans in response to any Invitation
for Money Market Quotes. Each Money Market Quote must comply with the
requirements of this subsection 2.03(d)(i) and must be submitted to the
Agent by telex or facsimile transmission at its offices specified in or
pursuant to Section 9.01 not later than (x) 2:00 P.M. (New York City
time) on the fourth Euro-Dollar Business Day prior to the proposed date
of Borrowing, in the case of a LIBOR Auction or (y) 9:30 A.M. (New York
City time) on the proposed date of Borrowing, in the case of an Absolute
Rate Auction (or, in either case, such other time or date as the
Borrower and the Agent shall have mutually agreed and shall have
notified to the Banks not later than the date of the Money Market Quote
Request for the first LIBOR Auction or Absolute Rate Auction for which
such change is to be effective); provided that Money Market Quotes
submitted by the Agent (or any affiliate of the Agent) in the capacity
of a Bank may be submitted, and may only be submitted, if the Agent or
such affiliate notifies the Borrower of the terms of the offer or offers
contained therein not later than (x) 1:00 P.M. (New York City time) on
the fourth Euro-Dollar Business Day prior to the proposed date of
Borrowing, in the case of a LIBOR Auction or (y) 9:15 A.M. (New York
City time) on the proposed date of Borrowing, in the case of an Absolute
Rate Auction. Subject to Articles 3 and 4, any Money Market Quote so
made shall be irrevocable except with the written consent of the Agent
given on the instructions of the Borrower.
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(ii) Each Money Market Quote shall be in substantially
the form of Exhibit D hereto and shall in any case specify:
(A) the proposed date of Borrowing,
(B) the principal amount of the Money Market
Loan for which each such offer is being made, which
principal amount (w) may be greater than or less than
the Commitment of the quoting Bank, (x) must be
$5,000,000 or a larger multiple of $1,000,000, (y) may
not exceed the principal amount of Money Market Loans
for which offers were requested and (z) may be subject
to an aggregate limitation as to the principal amount of
Money Market Loans for which offers being made by such
quoting Bank may be accepted,
(C) in the case of a LIBOR Auction, the margin
above or below the applicable London Interbank Offered
Rate (the "MONEY MARKET MARGIN") offered for each such
Money Market Loan, expressed as a percentage (specified
to the nearest 1/10,000th of 1%) to be added to or
subtracted from such base rate,
(D) in the case of an Absolute Rate Auction, the
rate of interest per annum (specified to the nearest
1/10,000th of 1%) (the "MONEY MARKET ABSOLUTE RATE")
offered for each such Money Market Loan, and
(E) the identity of the quoting Bank.
A Money Market Quote may set forth up to five separate offers by the
quoting Bank with respect to each Interest Period specified in the
related Invitation for Money Market Quotes.
(iii) Any Money Market Quote shall be disregarded if it:
(A) is not substantially in conformity with
Exhibit D hereto or does not specify all of the
information required by subsection (d)(ii);
(B) contains qualifying, conditional or similar
language (other than the limitation set forth in clause
(ii)(B)(z) above);
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<PAGE> 25
(C) proposes terms other than or in addition to
those set forth in the applicable Invitation for Money
Market Quotes; or
(D) arrives after the time set forth in
subsection (d)(i).
(e) Notice to Borrower. The Agent shall promptly notify the Borrower
of the terms (x) of any Money Market Quote submitted by a Bank that is in
accordance with subsection (d) and (y) of any Money Market Quote that amends,
modifies or is otherwise inconsistent with a previous Money Market Quote
submitted by such Bank with respect to the same Money Market Quote Request. Any
such subsequent Money Market Quote shall be disregarded by the Agent unless such
subsequent Money Market Quote is submitted solely to correct a manifest error in
such former Money Market Quote. The Agent's notice to the Borrower shall specify
(A) the aggregate principal amount of Money Market Loans for which offers have
been received for each Interest Period specified in the related Money Market
Quote Request, (B) the respective principal amounts and Money Market Margins or
Money Market Absolute Rates, as the case may be, so offered and (C) if
applicable, limitations on the aggregate principal amount of Money Market Loans
for which offers in any single Money Market Quote may be accepted.
(f) Acceptance and Notice by Borrower. Not later than 10:30 A.M.
(New York City time) on (x) the third Euro-Dollar Business Day prior to the
proposed date of Borrowing, in the case of a LIBOR Auction or (y) the proposed
date of Borrowing, in the case of an Absolute Rate Auction (or, in either case,
such other time or date as the Borrower and the Agent shall have mutually agreed
and shall have notified to the Banks not later than the date of the Money Market
Quote Request for the first LIBOR Auction or Absolute Rate Auction for which
such change is to be effective), the Borrower shall notify the Agent of its
acceptance or non-acceptance of the offers so notified to it pursuant to
subsection (e). In the case of acceptance, such notice (a "NOTICE OF MONEY
MARKET BORROWING") shall specify the aggregate principal amount of offers for
each Interest Period that are accepted. The Borrower may accept any Money Market
Quote in whole or in part; provided that:
(i) the aggregate principal amount of each Money Market
Borrowing may not exceed the applicable amount set forth in the related
Money Market Quote Request,
(ii) the principal amount of each Money Market Borrowing must be
$15,000,000 or a larger multiple of $1,000,000,
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(iii) acceptance of offers may only be made on the basis of
ascending Money Market Margins or Money Market Absolute Rates, as the
case may be, and
(iv) the Borrower may not accept any offer that is described in
subsection (d)(iii) or that otherwise fails to comply with the
requirements of this Agreement.
(g) Allocation by Agent. If offers are made by two or more Banks
with the same Money Market Margins or Money Market Absolute Rates, as the case
may be, for a greater aggregate principal amount than the amount in respect of
which such offers are accepted for the related Interest Period, the principal
amount of Money Market Loans in respect of which such offers are accepted shall
be allocated by the Agent among such Banks as nearly as possible (in multiples
of $1,000,000, as the Agent may deem appropriate) in proportion to the aggregate
principal amounts of such offers. Determinations by the Agent of the amounts of
Money Market Loans shall be conclusive in the absence of manifest error.
SECTION 2.04. Notice to Banks; Funding of Loans. (a) Upon receipt of
a Notice of Borrowing, the Agent shall promptly notify each Bank of the contents
thereof and of such Bank's share (if any) of such Borrowing and such Notice of
Borrowing shall not thereafter be revocable by the Borrower.
(b) Not later than 12:00 Noon (New York City time) on the date of
each Borrowing, each Bank participating therein shall make available its share
of such Borrowing, in Federal or other funds immediately available in New York
City, to the Agent at its address referred to in Section 9.01. Unless the Agent
determines that any applicable condition specified in Article 3 has not been
satisfied, the Agent will make the funds so received from the Banks available to
the Borrower at the Agent's aforesaid address.
(c) Unless the Agent shall have received notice from a Bank prior to
the date of any Borrowing that such Bank will not make available to the Agent
such Bank's share of such Borrowing, the Agent may assume that such Bank has
made such share available to the Agent on the date of such Borrowing in
accordance with subsection (b) of this Section 2.04 and the Agent may, in
reliance upon such assumption, make available to the Borrower on such date a
corresponding amount. If and to the extent that such Bank shall not have so made
such share available to the Agent, such Bank and, if such Bank shall fail to do
so within one Domestic Business Day, the Borrower severally agree to repay to
the Agent forthwith on demand such corresponding amount together with interest
thereon, for each day from the date such amount is made available to the
Borrower until the date such amount is repaid to the Agent, at the Federal Funds
Rate. If such
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Bank shall repay to the Agent such corresponding amount, such amount so repaid
shall constitute such Bank's Loan included in such Borrowing for purposes of
this Agreement.
SECTION 2.05. Registry; Notes. (a) The Agent shall maintain a
register (the "REGISTER") on which it will record the Commitment of each Bank,
each Loan made by such Bank and each repayment of any Loan made by such Bank.
Any such recordation by the Agent on the Register shall be presumptively
correct, absent manifest error. Failure to make any such recordation, or any
error in such recordation, shall not affect the Borrower's obligations
hereunder.
(b) The Borrower hereby agrees that, promptly upon the request of
any Bank at any time, the Borrower shall deliver to such Bank a duly executed
Note, in substantially the form of Exhibit A hereto, payable to the order of
such Bank and representing the obligation of the Borrower to pay the unpaid
principal amount of the Loans made by such Bank, with interest as provided
herein on the unpaid principal amount from time to time outstanding.
(c) Each Bank shall record the date, amount and maturity of each
Loan made by it and the date and amount of each payment of principal made by the
Borrower with respect thereto, and each Bank receiving a Note pursuant to this
Section, if such Bank so elects in connection with any transfer or enforcement
of any Note, may endorse on the schedule forming a part thereof appropriate
notations to evidence the foregoing information with respect to each such Loan
then outstanding; provided that the failure of such Bank to make any such
recordation or endorsement shall not affect the obligations of the Borrower
hereunder or under the Notes. Such Bank is hereby irrevocably authorized by the
Borrower so to endorse any Note and to attach to and make a part of any Note a
continuation of any such schedule as and when required.
(d) Each Bank may, by notice to the Borrower and the Agent, request
that its Loans of a particular type be evidenced by a separate Note in an amount
equal to the aggregate unpaid principal amount of such Loans. Each such Note
shall contain appropriate modifications to reflect the fact that it evidences
solely Loans of the relevant type. Each reference in this Agreement to the
"Note" of such Bank shall be deemed to refer to and include any or all of such
Notes, as the context may require.
SECTION 2.06. Maturity of Loans. (a) Each Committed Loan shall
mature, and the principal amount thereof shall be due and payable (together with
interest accrued thereon), on the Termination Date.
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(b) Each Money Market Loan included in any Money Market Borrowing
shall mature, and the principal amount thereof shall be due and payable
(together with interest accrued thereon), on the last day of the Interest Period
applicable to such Borrowing.
SECTION 2.07. Interest Rates. (a) Each Base Rate Loan shall bear
interest on the outstanding principal amount thereof, for each day from the date
such Loan is made until it becomes due, at a rate per annum equal to the Base
Rate for such day. Such interest shall be payable quarterly in arrears on each
Quarterly Payment Date and at maturity. Any overdue principal of or interest on
any Base Rate Loan shall bear interest, payable on demand, for each day until
paid at a rate per annum equal to the sum of 2% plus the rate otherwise
applicable to Base Rate Loans for such day.
(b) Each CD Loan shall bear interest on the outstanding principal
amount thereof, for each day during each Interest Period applicable thereto, at
a rate per annum equal to the sum of the CD Margin for such day plus the
Adjusted CD Rate applicable to such Interest Period; provided that if any CD
Loan shall, as a result of clause (2)(b) of the definition of Interest Period,
have an Interest Period of less than 30 days, such CD Loan shall bear interest
during such Interest Period at the rate applicable to Base Rate Loans during
such period. Such interest shall be payable for each Interest Period on the last
day thereof and, if such Interest Period is longer than 90 days, at intervals of
90 days after the first day thereof. Any overdue principal of or interest on any
CD Loan shall bear interest, payable on demand, for each day until paid at a
rate per annum equal to the sum of 2% plus the higher of (i) the sum of the CD
Margin for such day plus the Adjusted CD Rate applicable to such Loan on the day
before such payment was due and (ii) the rate applicable to Base Rate Loans for
such day.
The "ADJUSTED CD RATE" applicable to any Interest Period means a rate
per annum determined pursuant to the following formula:
CDBR
ACDR = [ ------------------------------ ]* + AR
1.00 - DRP
ACDR = Adjusted CD Rate
CDBR = CD Base Rate
DRP = Domestic Reserve Percentage
AR = Assessment Rate
- --------
*The amount in brackets being rounded upward, if necessary, to the next
higher 1/100 of 1%
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The "CD BASE RATE" applicable to any Interest Period is the rate of
interest determined by the Agent to be the average (rounded upward, if
necessary, to the next higher 1/100 of 1%) of the prevailing rates per annum bid
at 10:00 A.M. (New York City time) (or as soon thereafter as practicable) on the
first day of such Interest Period by two or more New York certificate of deposit
dealers of recognized standing for the purchase at face value from each CD
Reference Bank of its certificates of deposit in an amount comparable to the
principal amount of the CD Loan of such CD Reference Bank to which such Interest
Period applies and having a maturity comparable to such Interest Period.
"DOMESTIC RESERVE PERCENTAGE" means for any day that percentage
(expressed as a decimal) which is in effect on such day, as prescribed by the
Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement (including without limitation any
basic, supplemental or emergency reserves) for a member bank of the Federal
Reserve System in New York City with deposits exceeding five billion dollars in
respect of new non-personal time deposits in dollars in New York City having a
maturity comparable to the related Interest Period and in an amount of $100,000
or more. The Adjusted CD Rate shall be adjusted automatically on and as of the
effective date of any change in the Domestic Reserve Percentage.
"ASSESSMENT RATE" means for any day the annual assessment rate in
effect on such day which is payable by a member of the Bank Insurance Fund
classified as adequately capitalized and within supervisory subgroup "A" (or a
comparable successor assessment risk classification) within the meaning of 12
C.F.R. Section 327.4(a) (or any successor provision) to the Federal Deposit
Insurance Corporation (or any successor) for such Corporation's (or such
successor's) insuring time deposits at offices of such institution in the United
States. The Adjusted CD Rate shall be adjusted automatically on and as of the
effective date of any change in the Assessment Rate.
(c) Each Euro-Dollar Loan shall bear interest on the outstanding
principal amount thereof, for each day during each Interest Period applicable
thereto, at a rate per annum equal to the sum of the Euro-Dollar Margin for such
day plus the London Interbank Offered Rate applicable to such Interest Period.
Such interest shall be payable for each Interest Period on the last day thereof
and, if such Interest Period is longer than three months, at intervals of three
months after the first day thereof.
The "LONDON INTERBANK OFFERED RATE" applicable to any Interest Period
means the average (rounded upward, if necessary, to the next higher 1/16 of 1%)
of the respective rates per annum at which deposits in dollars are offered to
each of the Euro-Dollar Reference Banks in the London interbank market at
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<PAGE> 30
approximately 11:00 A.M. (London time) two Euro-Dollar Business Days before the
first day of such Interest Period in an amount approximately equal to the
principal amount of the Euro-Dollar Loan of such Euro-Dollar Reference Bank to
which such Interest Period is to apply and for a period of time comparable to
such Interest Period.
(d) Any overdue principal of or interest on any Euro-Dollar Loan
shall bear interest, payable on demand, for each day from and including the date
payment thereof was due to but excluding the date of actual payment, at a rate
per annum equal to the sum of 2% plus the higher of (i) the sum of the
Euro-Dollar Margin for such day plus the London Interbank Offered Rate
applicable to such Loan on the day before such payment was due and (ii) the
Euro-Dollar Margin for such day plus the quotient obtained (rounded upward, if
necessary, to the next higher 1/100 of 1%) by dividing (x) the average (rounded
upward, if necessary, to the next higher 1/16 of 1%) of the respective rates per
annum at which one day (or, if such amount due remains unpaid more than three
Euro-Dollar Business Days, then for such other period of time not longer than
three months as the Agent may select) deposits in dollars in an amount
approximately equal to such overdue payment due to each of the Euro-Dollar
Reference Banks are offered to such Euro-Dollar Reference Bank in the London
interbank market for the applicable period determined as provided above by (y)
1.00 minus the Euro-Dollar Reserve Percentage (or, if the circumstances
described in clause (a) or (b) of Section 8.01 shall exist, at a rate per annum
equal to the sum of 2% plus the rate applicable to Base Rate Loans for such
day).
(e) Subject to Section 8.01(a), each Money Market LIBOR Loan shall
bear interest on the outstanding principal amount thereof, for the Interest
Period applicable thereto, at a rate per annum equal to the sum of the London
Interbank Offered Rate for such Interest Period (determined in accordance with
Section 2.07(c) as if the related Money Market LIBOR Borrowing were a
Euro-Dollar Borrowing) plus (or minus) the Money Market Margin quoted by the
Bank making such Loan in accordance with Section 2.03. Each Money Market
Absolute Rate Loan shall bear interest on the outstanding principal amount
thereof, for the Interest Period applicable thereto, at a rate per annum equal
to the Money Market Absolute Rate quoted by the Bank making such Loan in
accordance with Section 2.03. Such interest shall be payable for each Interest
Period on the last day thereof and, if such Interest Period is longer than three
months, at intervals of three months after the first day thereof. Any overdue
principal of or interest on any Money Market Loan shall bear interest, payable
on demand, for each day until paid at a rate per annum equal to the sum of 2%
plus the Base Rate for such day.
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(f) The Agent shall determine each interest rate applicable to the
Loans hereunder. The Agent shall give prompt notice to the Borrower and the
participating Banks of each rate of interest so determined, and its
determination thereof shall be conclusive in the absence of manifest error.
(g) Each Reference Bank agrees to use its best efforts to furnish
quotations to the Agent as contemplated by this Section 2.07. If any Reference
Bank does not furnish a timely quotation, the Agent shall determine the relevant
interest rate on the basis of the quotation or quotations furnished by the
remaining Reference Bank or Banks or, if none of such quotations is available on
a timely basis, the provisions of Section 8.01 shall apply.
SECTION 2.08. Facility Fee. The Borrower shall pay to the Agent for
the account of the Banks ratably in proportion to their Commitments a facility
fee at the Facility Fee Rate (determined daily in accordance with the Pricing
Schedule). Such facility fee shall accrue (i) from and including the Effective
Date to but excluding the Termination Date (or earlier date of termination of
the Commitments in their entirety), on the daily aggregate amount of the
Commitments (whether used or unused) and (ii) from and including the Termination
Date or such earlier date of termination to but excluding the date the Loans
shall be repaid in their entirety, on the daily aggregate outstanding principal
amount of the Loans. Accrued fees under this Section shall be payable quarterly
in arrears on each Quarterly Payment Date and upon the date of termination of
the Commitments in their entirety (and, if later, the date the Loans shall be
repaid in their entirety).
SECTION 2.09. Optional Termination or Reduction of Commitments. The
Borrower may, upon at least three Domestic Business Days' notice to the Agent,
(i) terminate the Commitments at any time, if no Loans are outstanding at such
time or (ii) ratably reduce from time to time by an aggregate amount of
$10,000,000 or any larger multiple thereof, the aggregate amount of the
Commitments in excess of the aggregate outstanding principal amount of the
Loans.
SECTION 2.10. Scheduled Termination of Commitments. The Commitments
shall terminate on the Termination Date, and any Loans then outstanding
(together with accrued interest thereon) shall be due and payable on such date.
SECTION 2.11. Optional Prepayments. (a) The Borrower may (i) upon at
least one Domestic Business Day's notice to the Agent, prepay any Base Rate
Borrowing (or any Money Market Borrowing bearing interest at the Base Rate
pursuant to Section 8.01(a)), (ii) upon at least three Domestic Business Days'
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notice to the Agent, subject to Section 2.13, prepay any CD Borrowing and (iii)
upon at least three Euro-Dollar Business Days' notice to the Agent, subject to
Section 2.13, prepay any Euro-Dollar Borrowing, in whole at any time, or from
time to time in part in amounts aggregating $15,000,000 or any larger multiple
of $1,000,000, by paying the principal amount to be prepaid together with
accrued interest thereon to the date of prepayment. Each such optional
prepayment shall be applied to prepay ratably the Loans of the several Banks
included in such Borrowing.
(b) Except as provided in Section 2.11(a), the Borrower may not
prepay all or any portion of the principal amount of any Money Market Loan prior
to the maturity thereof.
(c) Upon receipt of a notice of prepayment pursuant to this Section,
the Agent shall promptly notify each Bank of the contents thereof and of such
Bank's ratable share (if any) of such prepayment and such notice shall not
thereafter be revocable by the Borrower.
SECTION 2.12. General Provisions as to Payments. (a) The Borrower
shall make each payment of principal of, and interest on, the Loans and of fees
hereunder, not later than 12:00 Noon (New York City time) on the date when due,
in Federal or other funds immediately available in New York City, to the Agent
at its address referred to in Section 9.01. The Agent will promptly distribute
to each Bank its ratable share of each such payment received by the Agent for
the account of the Banks. Whenever any payment of principal of, or interest on,
the Domestic Loans or of fees shall be due on a day which is not a Domestic
Business Day, the date for payment thereof shall be extended to the next
succeeding Domestic Business Day. Whenever any payment of principal of, or
interest on, the Euro-Dollar Loans shall be due on a day which is not a
Euro-Dollar Business Day, the date for payment thereof shall be extended to the
next succeeding Euro-Dollar Business Day unless such Euro-Dollar Business Day
falls in another calendar month, in which case the date for payment thereof
shall be the next preceding Euro-Dollar Business Day. Whenever any payment of
principal of, or interest on, the Money Market Loans shall be due on a day which
is not a Euro-Dollar Business Day, the date for payment thereof shall be
extended to the next succeeding Euro-Dollar Business Day. If the date for any
payment of principal is extended by operation of law or otherwise, interest
thereon shall be payable for such extended time.
(b) Unless the Agent shall have received notice from the Borrower
prior to the date on which any payment is due to the Banks hereunder that the
Borrower will not make such payment in full, the Agent may assume that the
Borrower has made such payment in full to the Agent on such date and the Agent
may, in
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reliance upon such assumption, cause to be distributed to each Bank on such due
date an amount equal to the amount then due such Bank. If and to the extent that
the Borrower shall not have so made such payment, each Bank shall repay to the
Agent forthwith on demand such amount distributed to such Bank together with
interest thereon, for each day from the date such amount is distributed to such
Bank until the date such Bank repays such amount to the Agent, at the Federal
Funds Rate.
SECTION 2.13. Funding Losses. If the Borrower makes any payment of
principal with respect to any Fixed Rate Loan or any Fixed Rate Loan is
converted to a different type of Loan (whether such payment or conversion is
pursuant to Article 2, 6 or 8 or otherwise) on any day other than the last day
of an Interest Period applicable thereto, or the last day of an applicable
period fixed pursuant to Section 2.07(d), or if the Borrower fails to borrow,
prepay, convert or continue any Fixed Rate Loan after notice has been given to
any Bank in accordance with Section 2.04(a), 2.11(c) or 2.16(c), the Borrower
shall reimburse each Bank within 15 days after demand for any resulting loss or
expense incurred by it (or by an existing or prospective Participant in the
related Loan), including (without limitation) any loss incurred in obtaining,
liquidating or employing deposits from third parties, but excluding loss of
margin for the period after such payment or conversion or failure to borrow,
prepay, convert or continue; provided that such Bank shall have delivered to the
Borrower a certificate as to the amount of such loss or expense, setting forth
the basis of calculation thereof, which certificate shall be conclusive in the
absence of manifest error.
SECTION 2.14. Computation of Interest and Fees. Interest based on the
Prime Rate hereunder shall be computed on the basis of a year of 365 days (or
366 days in a leap year) and paid for the actual number of days elapsed
(including the first day but excluding the last day). All other interest and
facility fees shall be computed on the basis of a year of 360 days and paid for
the actual number of days elapsed (including the first day but excluding the
last day).
SECTION 2.15. Regulation D Compensation. For so long as any Bank
maintains reserves against "EUROCURRENCY LIABILITIES" (or any other category of
liabilities which includes deposits by reference to which the interest rate on
Euro-Dollar Loans is determined or any category of extensions of credit or other
assets which includes loans by a non-United States office of such Bank to United
States residents), and as a result the cost to such Bank (or its Euro-Dollar
Lending Office) of making or maintaining its Euro-Dollar Loans is increased,
then such Bank may require the Borrower to pay, contemporaneously (or at such
other time or times as the Borrower and such Bank may mutually agree) with each
payment of interest on the Euro-Dollar Loans, additional interest on the related
Euro-Dollar Loan of such Bank at a rate per annum up to but not exceeding the
excess of (i)
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(A) the applicable London Interbank Offered Rate divided by (B) one minus the
Euro-Dollar Reserve Percentage over (ii) the applicable London Interbank Offered
Rate. Any Bank wishing to require payment of such additional interest (x) shall
so notify the Borrower and the Agent, in which case such additional interest on
the Euro-Dollar Loans of such Bank shall be payable to such Bank at the place
indicated in such notice with respect to each Interest Period commencing at
least three Euro-Dollar Business Days after the giving of such notice and (y)
shall furnish to the Borrower at least five Euro-Dollar Business Days prior to
each date on which interest is payable on the Euro-Dollar Loans (or at such
other time or times as the Borrower and such Bank may mutually agree) an
officer's certificate setting forth the amount to which such Bank is then
entitled under this Section 2.15 (which shall be consistent with such Bank's
good faith estimate of the level at which the related reserves are maintained by
it). Each such certificate shall be accompanied by such information as the
Borrower may reasonably request as to the computation set forth therein.
SECTION 2.16. Method of Electing Interest Rates. (a) The Loans
included in each Committed Borrowing shall bear interest initially at the type
of rate specified by the Borrower in the applicable Notice of Committed
Borrowing. Thereafter, the Borrower may from time to time elect to change or
continue the type of interest rate borne by each Group of Loans (subject to
Section 2.16(d) and the provisions of Article 8), as follows:
(i) if such Loans are Base Rate Loans, the Borrower may elect to
convert such Loans to CD Loans as of any Domestic Business Day or to
Euro-Dollar Loans as of any Euro-Dollar Business Day;
(ii) if such Loans are CD Loans, the Borrower may elect to
convert such Loans to Base Rate Loans as of any Domestic Business Day or
convert such Loans to Euro-Dollar Loans as of any Euro-Dollar Business
Day or continue such Loans as CD Loans for an additional Interest
Period, subject to Section 2.13 if any such conversion is effective on
any day other than the last day of an Interest Period applicable to such
Loans; and
(iii) if such Loans are Euro-Dollar Loans, the Borrower may
elect to convert such Loans to Base Rate Loans as of any Domestic
Business Day or convert such Loans to CD Loans as of any Euro-Dollar
Business Day or elect to continue such Loans as Euro-Dollar Loans for an
additional Interest Period, subject to Section 2.13 if any such
conversion is effective on any day other than the last day of an
Interest Period applicable to such Loans.
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Each such election shall be made by delivering a notice (a "NOTICE OF
INTEREST RATE ELECTION") to the Agent not later than 10:30 A.M. (New
York City time) on the third Euro-Dollar Business Day before the
conversion or continuation selected in such notice is to be effective
(unless the relevant Loans are to be converted from Domestic Loans of
one type to Domestic Loans of the other type or are CD Loans to be
continued as CD Loans for an additional Interest Period, in which
case such notice shall be delivered to the Agent not later than 10:30
A.M. (New York City time) on the second Domestic Business Day before
such conversion or continuation is to be effective). A Notice of
Interest Rate Election may, if it so specifies, apply to only a
portion of the aggregate principal amount of the relevant Group of
Loans; provided that (i) such portion is allocated ratably among the
Loans comprising such Group and (ii) the portion to which such Notice
applies, and the remaining portion to which it does not apply, are
each at least $15,000,000 (unless such portion is comprised of Base
Rate Loans). If no such notice is timely received before the end of
an Interest Period for any Group of CD Loans or Euro-Dollar Loans,
the Borrower shall be deemed to have elected that such Group of Loans
be converted to Base Rate Loans at the end of such Interest Period.
(b) Each Notice of Interest Rate Election shall specify:
(i) the Group of Loans (or portion thereof) to which
such notice applies;
(ii) the date on which the conversion or continuation
selected in such notice is to be effective, which shall comply with
the applicable clause of Section 2.16(a) above;
(iii) if the Loans comprising such Group are to be
converted, the new type of Loans and, if the Loans resulting from
such conversion are to be CD Loans or Euro-Dollar Loans, the
duration of the next succeeding Interest Period applicable thereto;
and
(iv) if such Loans are to be continued as CD Loans or
Euro-Dollar Loans for an additional Interest Period, the duration of
such additional Interest Period.
Each Interest Period specified in a Notice of Interest Rate Election
shall comply with the provisions of the definition of Interest
Period.
(c) Promptly after receiving a Notice of Interest Rate Election from
the Borrower pursuant to Section 2.16(a) above, the Agent shall notify each Bank
of
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the contents thereof and such notice shall not thereafter be revocable by the
Borrower.
(d) The Borrower shall not be entitled to elect to convert any
Committed Loans to, or continue any Committed Loans for an additional Interest
Period as, CD Loans or Euro-Dollar Loans if (i) the aggregate principal amount
of any Group of CD Loans or Euro-Dollar Loans created or continued as a result
of such election would be less than $15,000,000 or (ii) a Default shall have
occurred and be continuing when the Borrower delivers notice of such election to
the Agent.
(e) If any Committed Loan is converted to a different type of Loan,
the Borrower shall pay, on the date of such conversion, the interest accrued to
such date on the principal amount being converted.
ARTICLE 3
CONDITIONS
SECTION 3.01. Effectiveness. This Agreement shall become effective on
the date that each of the following conditions shall have been satisfied (or
waived in accordance with Section 9.05):
(a) receipt by the Agent of counterparts hereof signed
by each of the parties hereto (or, in the case of any party as to
which an executed counterpart shall not have been received, receipt
by the Agent in form satisfactory to it of telegraphic, telex or
other written confirmation from such party of execution of a
counterpart hereof by such party);
(b) receipt by the Agent of an opinion of the principal
legal officer of the Borrower, substantially in the form of Exhibit
E hereto and covering such additional matters relating to the
transactions contemplated hereby as the Required Banks may
reasonably request;
(c) receipt by the Agent of an opinion of Davis Polk &
Wardwell, special counsel for the Agent, substantially in the form
of Exhibit F hereto and covering such additional matters relating to
the transactions contemplated hereby as the Required Banks may
reasonably request; and
(d) receipt by the Agent of all documents it may
reasonably request relating to the existence of the Borrower, the
corporate authority
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for and the validity of this Agreement and the Notes, and any other
matters relevant hereto, all in form and substance satisfactory to
the Agent;
provided that this Agreement shall not become effective or binding on any party
hereto unless all of the foregoing conditions are satisfied not later than April
15, 1998. The Agent shall promptly notify the Borrower and each Bank of the
effectiveness of this Agreement, and such notice shall be conclusive and binding
on all parties hereto.
SECTION 3.02. Borrowings. The obligation of any Bank to make a Loan
on the occasion of any Borrowing is subject to the satisfaction of the following
conditions:
(a) receipt by the Agent of a Notice of Borrowing as
required by Section 2.02 or 2.03, as the case may be;
(b) the fact that, immediately after such Borrowing, the
aggregate outstanding principal amount of the Loans will not exceed
the aggregate amount of the Commitments;
(c) the fact that, immediately before and after such
Borrowing, no Default shall have occurred and be continuing; and
(d) the fact that the representations and warranties of
the Borrower contained in this Agreement shall be true on and as of
the date of such Borrowing.
Each Borrowing hereunder shall be deemed to be a representation and
warranty by the Borrower on the date of such Borrowing as to the facts specified
in clauses (b), (c) and (d) of this Section.
ARTICLE 4
REPRESENTATIVES AND WARRANTIES
The Borrower represents and warrants that:
SECTION 4.01. Corporate Existence and Power. The Borrower is a
corporation duly incorporated, validly existing and in good standing under the
laws of Delaware, and has all corporate powers and all material governmental
licenses, authorizations, consents and approvals required to carry on its
business as now conducted.
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SECTION 4.02. Corporate and Governmental Authorization; No
Contravention. The execution, delivery and performance by the Borrower of this
Agreement and the Notes are within the Borrower's corporate powers, have been
duly authorized by all necessary corporate action, require no action by or in
respect of, or filing with, any governmental body, agency or official and do not
contravene, or constitute a default under, any provision of applicable law or
regulation or of the certificate of incorporation or by-laws of the Borrower or
of any agreement, judgment, injunction, order, decree or other instrument
binding upon the Borrower or result in the creation or imposition of any Lien on
any asset of the Borrower or any of its Subsidiaries.
SECTION 4.03. Binding Effect. This Agreement constitutes a valid and
binding agreement of the Borrower and each Note, when executed and delivered in
accordance with this Agreement, will constitute a valid and binding obligation
of the Borrower, in each case enforceable in accordance with its terms.
SECTION 4.04. Financial Information. (a) The consolidated balance
sheets of the Borrower and its Consolidated Subsidiaries as of July 31, 1996 and
1997 and the related consolidated statements of operations, shareholders'
investment and cash flows for each of the three years ended July 31, 1997,
reported on by Deloitte & Touche and set forth in the Borrower's 1997 Form 10-K,
a copy of which has been delivered to each of the Banks, fairly present, in
conformity with generally accepted accounting principles, the consolidated
financial position of the Borrower and its Consolidated Subsidiaries as of such
dates and their consolidated results of operations and cash flows for such
fiscal years.
(b) The consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries as of January 31, 1998 and the related consolidated
statements of operations and cash flows for the six months then ended, set forth
in the Borrower's Quarterly Report on Form 10-Q for the quarter then ended, a
copy of which has been delivered to each of the Banks, fairly present, in
conformity with generally accepted accounting principles applied on a basis
consistent with the financial statements referred to in subsection (a) of this
Section, the consolidated financial position of the Borrower and its
Consolidated Subsidiaries as of such date and their consolidated results of
operations and cash flows for such six month period (subject to normal year-end
adjustments).
(c) Since January 31, 1998 there has been no material adverse change
in the business, financial position, results of operations or prospects of the
Borrower and its Consolidated Subsidiaries, considered as a whole.
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SECTION 4.05. Litigation. (a) Except for actions, suits or
proceedings (i) described in the Borrower's 1997 Form 10-K or (ii) commenced
after the date of this Agreement and disclosed in writing to the Banks, there is
no action, suit or proceeding pending against, or to the knowledge of the
Borrower threatened against or affecting, the Borrower or any of its
Subsidiaries before any court or arbitrator or any governmental body, agency or
official an adverse decision in which might materially adversely affect the
business, consolidated financial position or consolidated results of operations
of the Borrower and its Consolidated Subsidiaries taken as a whole.
(b) Since the date of the Borrower's 1997 Form 10-K, there has been
no change in the status of the actions, suits and proceedings described therein
which materially and adversely affects the business, financial position, results
of operations or prospects of the Borrower and its Consolidated Subsidiaries,
considered as a whole.
(c) There is no action, suit or proceeding pending against, or to
the knowledge of the Borrower threatened against or affecting, the Borrower or
any of its Subsidiaries before any court or arbitrator or any governmental body,
agency or official which in any manner questions the validity of this Agreement
or the Notes.
SECTION 4.06. Compliance with ERISA. Each member of the ERISA Group
has fulfilled its obligations under the minimum funding standards of ERISA and
the Internal Revenue Code with respect to each Plan and is in compliance in all
material respects with the presently applicable provisions of ERISA and the
Internal Revenue Code with respect to each Plan. No member of the ERISA Group
has (i) sought a waiver of the minimum funding standard under Section 412 of the
Internal Revenue Code in respect of any Plan, (ii) failed to make any
contribution or payment to any Plan or Multiemployer Plan or in respect of any
Benefit Arrangement, or made any amendment to any Plan or Benefit Arrangement,
which has resulted or could result in the imposition of a Lien or the posting of
a bond or other security under ERISA or the Internal Revenue Code or (iii)
incurred any liability under Title IV of ERISA other than a liability to the
PBGC for premiums under Section 4007 of ERISA.
SECTION 4.07. Environmental Matters. In the ordinary course of its
business, the Borrower conducts an ongoing review of the effect of Environmental
Laws on the business, operations and properties of the Borrower and its
Subsidiaries, in the course of which it identifies and evaluates associated
liabilities and costs (including, without limitation, any capital or operating
expenditures required for clean-up or closure of properties presently or
previously owned, any capital or operating expenditures required to achieve or
maintain
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compliance with environmental protection standards imposed by law or as a
condition of any license, permit or contract, any related constraints on
operating activities, including any periodic or permanent shutdown of any
facility or reduction in the level of or change in the nature of operations
conducted thereat, any costs or liabilities in connection with off-site disposal
of wastes or Hazardous Substances, and any actual or potential liabilities to
third parties, including employees, and any related costs and expenses). On the
basis of this review, and based upon conditions of which the Borrower has
knowledge and upon its estimates of the costs of compliance with and/or
remediation mandated by Environmental Laws, the Borrower has reasonably
concluded that Environmental Laws are unlikely to have a material adverse effect
on the business, financial condition, results of operations or prospects of the
Borrower and its Consolidated Subsidiaries, considered as a whole.
SECTION 4.08. Taxes. The Borrower and its Subsidiaries have filed all
United States Federal income tax returns and all other material tax returns
which are required to be filed by them and have paid all taxes due pursuant to
such returns or pursuant to any assessment received by the Borrower or any
Subsidiary. In the Borrower's opinion, all material tax liabilities were
adequately provided for as of July 31, 1997 and are now so provided for in the
books of the Borrower and its Consolidated Subsidiaries.
SECTION 4.09. Material Subsidiaries. Each of the Borrower's Material
Subsidiaries is a corporation duly incorporated, validly existing and in good
standing under the laws of its jurisdiction of incorporation, and has all
corporate powers and all material governmental licenses, authorizations,
consents and approvals required to carry on its business as now conducted.
SECTION 4.10. Not an Investment Company. The Borrower is not an
"INVESTMENT COMPANY" within the meaning of the Investment Company Act of
1940, as amended.
SECTION 4.11. Use of Proceeds. The proceeds of the loans under this
Agreement will be used for general corporate purposes. None of such proceeds
will be used, directly or indirectly, for the purpose, whether immediate,
incidental or ultimate, of buying or carrying any "MARGIN STOCK", within the
meaning of Regulation U.
SECTION 4.12. Full Disclosure. All information heretofore furnished
by the Borrower to the Agent or any Bank for purposes of or in connection with
this Agreement or any transaction contemplated hereby is, and all such
information hereafter furnished by the Borrower to the Agent or any Bank will
be, true and accurate in all material respects on the date as of which such
information is stated
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or certified. The Borrower has disclosed to the Banks in writing any and all
facts which materially and adversely affect or may affect (to the extent the
Borrower can now reasonably foresee), the business, operations or financial
condition of the Borrower and its Consolidated Subsidiaries, taken as a whole,
or the ability of the Borrower to perform its obligations under this Agreement.
ARTICLE 5
COVENANTS
The Borrower agrees that, from and after the Effective Date for so
long as any Bank has any Commitment hereunder or any amount payable hereunder
remains unpaid:
SECTION 5.01. Information. The Borrower will deliver to each of the
Banks:
(a) as soon as available and in any event within 120 days
after the end of each fiscal year of the Borrower, a consolidated
balance sheet of the Borrower and its Consolidated Subsidiaries as of
the end of such fiscal year and the related consolidated financial
statements in the form then required to be filed with the Securities
and Exchange Commission on Form 10-K or its then equivalent, all
reported on by Deloitte & Touche or other independent public
accountants of nationally recognized standing;
(b) as soon as available and in any event within 60 days
after the end of each of the first three quarters of each fiscal year
of the Borrower, a consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries as of the end of such quarter and the
related consolidated financial statements in the form then required
to be filed with the Securities and Exchange Commission on Form 10-Q
or its then equivalent, all certified (subject to normal year-end
audit adjustments) by the chief financial officer or the chief
accounting officer of the Borrower;
(c) simultaneously with the delivery of each set of
financial statements referred to in clauses (a) and (b) above, a
certificate of the chief financial officer or the chief accounting
officer of the Borrower (i) setting forth in reasonable detail the
calculations required to establish whether the Borrower was in
compliance with the requirements of Sections 5.05 to 5.08, inclusive,
on the date of such financial statements and (ii) stating whether any
Default exists on the date of such certificate and, if any
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Default then exists, setting forth the details thereof and the action
which the Borrower is taking or proposes to take with respect
thereto;
(d) simultaneously with the delivery of each set of
financial statements referred to in clause (a) above, a statement of
the firm of independent public accountants which reported on such
statements whether anything has come to their attention to cause them
to believe that any Default existed on the date of such statements;
(e) within five days after any officer of the Borrower
obtains knowledge of any Default, if such Default is then continuing,
a certificate of the chief financial officer or the chief accounting
officer of the Borrower setting forth the details thereof and the
action which the Borrower is taking or proposes to take with respect
thereto;
(f) promptly upon the mailing thereof to the shareholders
of the Borrower generally, copies of all financial statements,
reports and proxy statements so mailed;
(g) promptly upon the filing thereof, copies of all
registration statements (other than the exhibits thereto and any
registration statements on Form S-8 or its equivalent) and reports on
Forms 10-K, 10-Q and 8-K (or their equivalents) which the Borrower
shall have filed with the Securities and Exchange Commission;
(h) if and when any member of the ERISA Group (i) gives or
is required to give notice to the PBGC of any "REPORTABLE EVENT" (as
defined in Section 4043 of ERISA) with respect to any Material Plan
which might constitute grounds for a termination of such Plan under
Title IV of ERISA, or knows that the plan administrator of any
Material Plan has given or is required to give notice of any such
reportable event, a copy of the notice of such reportable event given
or required to be given to the PBGC; (ii) receives notice of complete
or partial withdrawal liability under Title IV of ERISA or notice
that any Multiemployer Plan is in reorganization, is insolvent or has
been terminated, a copy of such notice; (iii) receives notice from
the PBGC under Title IV of ERISA of an intent to terminate, impose
liability (other than for premiums under Section 4007 of ERISA) in
respect of, or appoint a trustee to administer, any Material Plan, a
copy of such notice; (iv) applies for a waiver of the minimum funding
standard under Section 412 of the Internal Revenue Code, a copy of
such application; (v) gives notice of intent to terminate any
Material Plan under Section 4041(c) of ERISA, a copy of such notice
and other information filed with the PBGC; (vi) gives notice of
withdrawal from any Material
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Plan pursuant to Section 4063 of ERISA, a copy of such notice; or
(vii) fails to make any payment or contribution to any Material Plan
or Multiemployer Plan or in respect of any Benefit Arrangement or
makes any amendment to any Material Plan or Benefit Arrangement which
has resulted or could result in the imposition of a Lien or the
posting of a bond or other security, a certificate of the chief
financial officer or the chief accounting officer of the Borrower
setting forth details as to such occurrence and action, if any, which
the Borrower or applicable member of the ERISA Group is required or
proposes to take;
(i) forthwith, notice of any change of which the Borrower
becomes aware in the rating by any Rating Agency (as defined in the
Pricing Schedule) of the Borrower's long-term debt; and
(j) from time to time such additional information
regarding the financial position or business of the Borrower and its
Subsidiaries as the Agent, at the request of any Bank, may reasonably
request.
SECTION 5.02. Maintenance of Property; Insurance. (a) The Borrower
will keep, and will cause each Subsidiary to keep, all property useful and
necessary in its business in good working order and condition, ordinary wear and
tear excepted.
(b) The Borrower will, and will cause each of its Subsidiaries to,
maintain (either in the name of the Borrower or in such Subsidiary's own name)
with financially sound and responsible insurance companies, insurance on all
their respective properties in at least such amounts and against at least such
risks (and with such risk retention) as are usually insured against in the same
general area by companies of established repute engaged in the same or a similar
business; and will furnish to the Banks, upon request from the Agent,
information presented in reasonable detail as to the insurance so carried.
SECTION 5.03. Maintenance of Existence. The Borrower will renew and
keep in full force and effect its corporate existence and its rights, privileges
and franchises necessary or desirable in the normal conduct of business.
SECTION 5.04. Compliance with Laws. The Borrower will comply, and
cause each Subsidiary to comply, in all material respects with all applicable
laws, ordinances, rules, regulations, and requirements of governmental
authorities (including, without limitation, Environmental Laws and ERISA and the
rules and regulations thereunder) except where the necessity of compliance
therewith is contested in good faith by appropriate proceedings.
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SECTION 5.05. Leverage Ratio. The Leverage Ratio will at no time
exceed 250%.
SECTION 5.06. Minimum Consolidated Net Worth. Consolidated Net
Worth will at no time be less than the Minimum Compliance Level.
SECTION 5.07. Interest Coverage Ratio. The Interest Coverage Ratio
will not be less than 350% for any period of four consecutive fiscal quarters.
SECTION 5.08. Subsidiary Debt Limitation. The aggregate outstanding
amount of Debt of Subsidiaries (exclusive of (i) Debt secured by a Lien
permitted by clause (g) of Section 5.09 and (ii) Debt owing to the Borrower or
another Subsidiary) will at no time exceed $175,000,000.
SECTION 5.09. Negative Pledge. The Borrower will not, and will not
permit any Consolidated Subsidiary to, create, assume or suffer to exist any
Lien securing Debt or Derivative Obligations on any asset now owned or hereafter
acquired by it, except:
(a) Liens existing on the date of this Agreement securing
Debt outstanding on the date of this Agreement in an aggregate
principal amount not exceeding $60,000,000;
(b) any Lien existing on the assets of any Person at the
time such Person becomes a Consolidated Subsidiary;
(c) any Lien on any asset securing Debt incurred or
assumed for the purpose of financing all or any part of the purchase
price or cost of construction of such asset, provided that such Lien
attaches to such asset within 270 days after the acquisition or
completion of construction and commencement of full operations
thereof;
(d) any Lien on any asset of any Person existing at the
time such Person is acquired by, merged into or consolidated with the
Borrower or a Consolidated Subsidiary;
(e) any Lien existing on any asset prior to the
acquisition thereof by the Borrower or a Consolidated Subsidiary and
not created in contemplation of such acquisition;
(f) any Lien arising out of the refinancing, extension,
renewal or refunding of any Debt secured by any Lien permitted by any
of the
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foregoing clauses of this Section, provided that such Debt is not
increased and is not secured by any additional assets;
(g) Liens on real property (and ancillary personalty) not
otherwise permitted by the foregoing clauses of this Section securing
Debt in an aggregate principal amount at any time outstanding not to
exceed $75,000,000; and
(h) Liens on cash and cash equivalents securing
Derivatives Obligations, provided that the aggregate amount of cash
and cash equivalents subject to such Liens may at no time exceed
$25,000,000.
SECTION 5.10. Consolidations, Mergers and Sales of Assets. The
Borrower will not (i) consolidate or merge with or into any other Person or (ii)
sell, lease or otherwise transfer, directly or indirectly, all or any
substantial part of the assets of the Borrower and its Subsidiaries, taken as a
whole, to any other Person; provided that the Borrower may merge with another
Person if the Borrower is the surviving corporation and, after giving effect
thereto, no Default exists.
SECTION 5.11. Limitation on Affiliate Transactions. The Borrower will
not, and will not permit any of its Subsidiaries to, enter into any material
transaction, including, without limitation, the purchase, sale or exchange of
property or assets or the rendering of any services, with any Affiliate, except
(i) a transaction in the ordinary course of business which is upon terms no less
favorable to the Borrower or such Subsidiary, as the case may be, than it would
obtain in a comparable transaction on an arm's length basis with a Person not an
Affiliate and (ii) a Dividend Payment permitted by Sections 5.05 and 5.06.
ARTICLE 6
DEFAULTS
SECTION 6.01. Events of Default. If one or more of the following
events ("EVENTS OF DEFAULT") shall have occurred and be continuing:
(a) the Borrower (i) shall fail to pay when due any
principal of any Loan or (ii) shall fail to pay any interest on any
Loan, any fees or any other amount payable hereunder within five days
after the due date thereof;
(b) the Borrower shall fail to observe or perform any
covenant contained in Sections 5.05 through 5.11, inclusive;
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(c) the Borrower shall fail to observe or perform any
covenant or agreement contained in this Agreement (other than those
covered by clause (a) or (b) above) for 30 days after notice thereof
has been given to the Borrower by the Agent at the request of any
Bank;
(d) any representation, warranty, certification or
statement made (or deemed made) by the Borrower in this Agreement or
in any certificate, financial statement or other document delivered
pursuant to this Agreement shall prove to have been incorrect in any
material respect when made (or deemed made) or delivered;
(e) the Borrower or any Subsidiary shall fail to make any
payment in respect of any Material Financial Obligations when due or
within any applicable grace period (or in the case of any Derivatives
Obligation for which no grace period is otherwise provided, within
five days of the due date);
(f) any event or condition shall occur which results in
the acceleration of the maturity of any Material Debt or enables
(with the giving of appropriate notice if required) the holder of
such Debt or any Person acting on such holder's behalf to accelerate
the maturity thereof;
(g) the Borrower or any Material Subsidiary shall commence
a voluntary case or other proceeding seeking liquidation,
reorganization or other relief with respect to itself or its debts
under any bankruptcy, insolvency or other similar law now or
hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of it or
any substantial part of its property, or shall consent to any
such relief or to the appointment of or taking possession by any such
official in an involuntary case or other proceeding commenced against
it, or shall make a general assignment for the benefit of creditors,
or shall fail generally to pay its debts as they become due, or shall
take any corporate action to authorize any of the foregoing;
(h) an involuntary case or other proceeding shall be
commenced against the Borrower or any Material Subsidiary seeking
liquidation, reorganization or other relief with respect to it or its
debts under any bankruptcy, insolvency or other similar law now or
hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of it or
any substantial part of its property, and such involuntary case or
other proceeding shall remain undismissed and unstayed for a period
of 60 days; or an order for relief shall be entered
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against the Borrower or any Material Subsidiary under the federal
bankruptcy laws as now or hereafter in effect;
(i) any member of the ERISA Group shall fail to pay when
due an amount or amounts aggregating in excess of $10,000,000 which
it shall have become liable to pay under Title IV of ERISA; or notice
of intent to terminate a Material Plan shall be filed under Title IV
of ERISA by any member of the ERISA Group, any plan administrator or
any combination of the foregoing; or the PBGC shall institute
proceedings under Title IV of ERISA to terminate, to impose liability
(other than for premiums under Section 4007 of ERISA) in respect of,
or to cause a trustee to be appointed to administer, any Material
Plan; or a condition shall exist by reason of which the PBGC would be
entitled to obtain a decree adjudicating that any Material Plan must
be terminated; or there shall occur a complete or partial withdrawal
from, or a default, within the meaning of Section 4219(c)(5) of
ERISA, with respect to, one or more Multiemployer Plans which could
cause one or more members of the ERISA Group to incur a current
payment obligation in excess of $10,000,000;
(j) a judgment or order for the payment of money in excess
of $10,000,000 shall be rendered against the Borrower or any Material
Subsidiary and such judgment or order shall continue unsatisfied and
unstayed for a period of 30 days; or
(k) a Change of Control shall occur;
then, and in every such event, the Agent shall (i) if requested by Banks having
more than 50% in aggregate amount of the Commitments, by notice to the Borrower
terminate the Commitments and they shall thereupon terminate, and (ii) if
requested by Banks holding more than 50% in aggregate principal amount of the
Loans, by notice to the Borrower declare the Loans (together with accrued
interest thereon) to be, and the Loans (together with accrued interest thereon)
shall thereupon become, immediately due and payable without presentment, demand,
protest or other notice of any kind, all of which are hereby waived by the
Borrower; provided that in the case of any of the Events of Default specified in
clause (g) or (h) above with respect to the Borrower, without any notice to the
Borrower or any other act by the Agent or any Bank, the Commitments shall
thereupon terminate and the Loans (together with accrued interest thereon) shall
become immediately due and payable without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by the Borrower.
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SECTION 6.02. Notice of Default. The Agent shall give notice to the
Borrower under Section 6.01(c) promptly upon being requested to do so by any
Bank and shall thereupon notify all the Banks thereof.
ARTICLE 7
THE AGENT
SECTION 7.01. Appointment and Authorization. Each Bank irrevocably
appoints and authorizes the Agent to take such action as agent on its behalf and
to exercise such powers under this Agreement and the Notes as are delegated to
the Agent by the terms hereof or thereof, together with all such powers as are
reasonably incidental thereto.
SECTION 7.02. Agent and Affiliates. Morgan Guaranty Trust Company of
New York shall have the same rights and powers under this Agreement as any other
Bank and may exercise or refrain from exercising the same as though it were not
the Agent, and Morgan Guaranty Trust Company of New York and its affiliates may
accept deposits from, lend money to, and generally engage in any kind of
business with the Borrower or any Subsidiary or Affiliate of the Borrower as if
it were not the Agent hereunder.
SECTION 7.03. Action by Agent. The obligations of the Agent hereunder
are only those expressly set forth herein. Without limiting the generality of
the foregoing, the Agent shall not be required to take any action with respect
to any Default, except as expressly provided in Article 4.
SECTION 7.04. Consultation with Experts. The Agent may consult with
legal counsel (who may be counsel for the Borrower), independent public
accountants and other experts selected by it and shall not be liable for any
action taken or omitted to be taken by it in good faith in accordance with the
advice of such counsel, accountants or experts.
SECTION 7.05. Liability of Agent. Neither the Agent nor any of its
affiliates nor any of the directors, officers, agents or employees of the
foregoing shall be liable for any action taken or not taken by it or them in
connection herewith (i) with the consent or at the request of the Required Banks
or (ii) in the absence of its or their own gross negligence or willful
misconduct. Neither the Agent nor any of its affiliates nor any of the
directors, officers, agents or employees of the foregoing shall be responsible
for or have any duty to ascertain, inquire into or verify (i) any statement,
warranty or representation made in connection with this Agreement or any
borrowing hereunder; (ii) the performance
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or observance of any of the covenants or agreements of the Borrower; (iii) the
satisfaction of any condition specified in Article 3, except receipt of items
required to be delivered to the Agent; or (iv) the validity, effectiveness or
genuineness of this Agreement, the Notes or any other instrument or writing
furnished in connection herewith. The Agent shall not incur any liability by
acting in reliance upon any notice, consent, certificate, statement, or other
writing (which may be a bank wire, telex or similar writing) believed by it to
be genuine or to be signed by the proper party or parties.
SECTION 7.06. Indemnification. Each Bank shall, ratably in accordance
with its Commitment, indemnify the Agent, its affiliates and their respective
directors, officers, agents and employees (to the extent not reimbursed by the
Borrower) against any cost, expense (including counsel fees and disbursements),
claim, demand, action, loss or liability (except such as result from such
indemnitees' gross negligence or willful misconduct) that such indemnitees may
suffer or incur in connection with this Agreement or any action taken or omitted
by such indemnitees hereunder.
SECTION 7.07. Credit Decision. Each Bank acknowledges that it has,
independently and without reliance upon the Agent or any other Bank, and based
on such documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement. Each Bank also
acknowledges that it will, independently and without reliance upon the Agent or
any other Bank, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking any action under this Agreement.
SECTION 7.08. Successor Agent. The Agent may resign at any time by
giving notice thereof to the Banks and the Borrower. Upon any such resignation,
the Required Banks shall have the right to appoint a successor Agent, subject to
the approval of the Borrower. If no successor Agent shall have been so appointed
by the Required Banks, with the approval of the Borrower, and shall have
accepted such appointment, within 30 days after the retiring Agent gives notice
of resignation, then the retiring Agent may, on behalf of the Banks, appoint a
successor Agent, which shall be a Bank, if any Bank is willing to accept such
appointment, and in any event shall be a commercial bank organized or licensed
under the laws of the United States of America or of any State thereof and
having a combined capital and surplus of at least $50,000,000. Upon the
acceptance of its appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the rights
and duties of the retiring Agent, and the retiring Agent shall be discharged
from its duties and obligations hereunder. After any retiring Agent's
resignation hereunder as Agent,
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the provisions of this Article shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Agent.
SECTION 7.09. Agent's Fees. The Borrower shall pay to the Agent for
its own account fees in the amounts and at the times previously agreed upon
between the Borrower and the Agent.
ARTICLE 8
CHANGE IN CIRCUMSTANCES
SECTION 8.01. Basis for Determining Interest Rate Inadequate or
Unfair. If on or prior to the first day of any Interest Period for any CD Loans,
Euro-Dollar Loans or Money Market LIBOR Loan:
(a) the Agent is advised by the Reference Banks that
deposits in dollars (in the applicable amounts) are not being offered
to the Reference Banks in the relevant market for such Interest
Period, or
(b) in the case of CD Loans or Euro-Dollar Loans, Banks
having 50% or more of the aggregate amount of the Commitments advise
the Agent that the Adjusted CD Rate or the London Interbank Offered
Rate, as the case may be, as determined by the Agent will not
adequately and fairly reflect the cost to such Banks of funding their
CD Loans or Euro-Dollar Loans, as the case may be, for such Interest
Period,
the Agent shall forthwith give notice thereof to the Borrower and the Banks,
whereupon until the Agent notifies the Borrower that the circumstances giving
rise to such suspension no longer exist, (i) the obligations of the Banks to
make CD Loans or Euro-Dollar Loans, as the case may be, or to continue or
convert outstanding Loans as or into CD Loans or Euro-Dollar Loans, as the case
may be, shall be suspended and (ii) each outstanding CD Loan or Euro-Dollar
Loan, as the case may be, shall be converted into a Base Rate Loan on the last
day of the then current Interest Period applicable thereto. Unless the Borrower
notifies the Agent at least two Domestic Business Days before the date of any
Fixed Rate Borrowing for which a Notice of Borrowing has previously been given
that it elects not to borrow on such date, (i) if such Fixed Rate Borrowing is a
Committed Borrowing, such Borrowing shall instead be made as a Base Rate
Borrowing and (ii) if such Fixed Rate Borrowing is a Money Market LIBOR
Borrowing, the Money Market LIBOR Loans comprising such Borrowing shall bear
interest for each day from and including the first day to but excluding the last
day of the Interest Period applicable thereto at the Base Rate for such day.
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SECTION 8.02. Illegality. If, on or after the date of this Agreement,
the adoption of any applicable law, rule or regulation, or any change in any
applicable law, rule or regulation, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by any Bank (or its Euro-Dollar Lending Office) with any request or directive
(whether or not having the force of law) of any such authority, central bank or
comparable agency shall make it unlawful or impossible for any Bank (or its
Euro-Dollar Lending Office) to make, maintain or fund its Euro-Dollar Loans and
such Bank shall so notify the Agent, the Agent shall forthwith give notice
thereof to the other Banks and the Borrower, whereupon until such Bank notifies
the Borrower and the Agent that the circumstances giving rise to such suspension
no longer exist, the obligation of such Bank to make Euro-Dollar Loans or to
convert outstanding Loans into Euro-Dollar Loans or continue outstanding Loans
as Euro-Dollar Loans, shall be suspended. Before giving any notice to the Agent
pursuant to this Section 8.02, such Bank shall designate a different Euro-Dollar
Lending Office if such designation will avoid the need for giving such notice
and will not, in the judgment of such Bank, be otherwise disadvantageous to such
Bank. If such notice is given, each Euro-Dollar Loan of such Bank then
outstanding shall be converted to a Base Rate Loan either (i) on the last day of
the then current Interest Period applicable to such Euro-Dollar Loan if such
Bank may lawfully continue to maintain and fund such Loan as a Euro-Dollar Loan
to such day or (ii) immediately if such Bank shall determine that it may not
lawfully continue to maintain and fund such Loan as a Euro-Dollar Loan to such
day. Interest and principal on any such Base Rate Loan shall be payable on the
same dates as, and on a pro rata basis with, the interest and principal payable
on the related Euro-Dollar Loans of the other Banks.
SECTION 8.03. Increased Cost and Reduced Return. (a) If on or after
(x) the date hereof, in the case of any Committed Loan or any obligation to make
Committed Loans or (y) the date of the related Money Market Quote, in the case
of any Money Market Loan, the adoption of any applicable law, rule or
regulation, or any change in any applicable law, rule or regulation, or any
change in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Bank (or its Applicable Lending
Office) with any request or directive (whether or not having the force of law)
of any such authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Bank (or its
Applicable Lending Office) with any request or directive (whether or not having
the force of law) of any such authority, central bank or comparable agency shall
impose, modify or deem applicable any reserve (including, without limitation,
any such requirement imposed by the Board of Governors of the Federal Reserve
System, but excluding
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(i) with respect to any CD Loan any such requirement included in an applicable
Domestic Reserve Percentage and (ii) with respect to any Euro-Dollar Loan any
such requirement with respect to which such Bank is entitled to compensation
during the relevant Interest Period under Section 2.15), special deposit,
insurance assessment (excluding, with respect to any CD Loan, any such
requirement reflected in an applicable Assessment Rate) or similar requirement
against assets of, deposits with or for the account of, or credit extended by,
any Bank (or its Applicable Lending Office) or shall impose on any Bank (or its
Applicable Lending Office) or on the United States market for certificates of
deposit or the London interbank market any other condition affecting its Fixed
Rate Loans, its Note or its obligation to make Fixed Rate Loans and the result
of any of the foregoing is to increase the cost to such Bank (or its Applicable
Lending Office) of making or maintaining any Fixed Rate Loan, or to reduce the
amount of any sum received or receivable by such Bank (or its Applicable Lending
Office) under this Agreement or under its Note with respect thereto, by an
amount deemed by such Bank to be material, then, within 15 days after demand by
such Bank (with a copy to the Agent), the Borrower shall pay to such Bank such
additional amount or amounts as will compensate such Bank for such increased
cost or reduction.
(b) If any Bank shall have determined that, after the date hereof,
the adoption of any applicable law, rule or regulation regarding capital
adequacy, or any change in any such law, rule or regulation, or any change in
the interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or any request or directive regarding capital adequacy
(whether or not having the force of law) of any such authority, central bank or
comparable agency (including any determination by any such authority, central
bank or comparable agency that, for purposes of capital adequacy requirements,
the Commitments hereunder do not constitute commitments with an original
maturity of one year or less), has or would have the effect of reducing the rate
of return on capital of such Bank (or its Parent) as a consequence of such
Bank's obligations hereunder to a level below that which such Bank (or its
Parent) could have achieved but for such adoption, change, request or directive
(taking into consideration its policies with respect to capital adequacy) by an
amount deemed by such Bank to be material, then from time to time, within 15
days after demand by such Bank (with a copy to the Agent), the Borrower shall
pay to such Bank such additional amount or amounts as will compensate such Bank
(or its Parent) for such reduction; provided that the Borrower shall not be
liable for any such amounts attributable to a period more than three months
prior to the date of notice by such Bank to the Borrower of its intention to
seek compensation under this subsection (b).
(c) Each Bank will promptly notify the Borrower and the Agent of any
event of which it has knowledge, occurring after the date hereof, which will
entitle
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such Bank to compensation pursuant to this Section and will designate a
different Applicable Lending Office if such designation will avoid the need for,
or reduce the amount of, such compensation and will not, in the judgment of such
Bank, be otherwise disadvantageous to such Bank. A certificate of any Bank
claiming compensation under this Section, setting forth the additional amount or
amounts to be paid to it hereunder and the basis of calculation thereof, shall
be conclusive in the absence of manifest error. In determining such amount, such
Bank may use any reasonable averaging and attribution methods.
SECTION 8.04. Taxes. (a) Any and all payments by the Borrower to or
for the account of any Bank or the Agent hereunder or under any Note shall be
made free and clear of and without deduction for any and all present or future
taxes, duties, levies, imposts, deductions, charges and withholdings, and all
liabilities with respect thereto, excluding, in the case of each Bank and the
Agent, taxes imposed on its income, and franchise taxes imposed on it, by the
jurisdiction under the laws of which such Bank or the Agent (as the case may be)
is organized or any political subdivision thereof and, in the case of each Bank,
taxes imposed on its income, and franchise or similar taxes imposed on it, by
the jurisdiction of such Bank's Applicable Lending Office or any political
subdivision thereof (all such non-excluded taxes, duties, levies, imposts,
deductions, charges, withholdings and liabilities being hereinafter referred to
as "TAXES"). If the Borrower shall be required by law to deduct any Taxes from
or in respect of any sum payable hereunder or under any Note to any Bank or the
Agent, (i) the sum payable shall be increased as necessary so that after making
all required deductions (including deductions applicable to additional sums
payable under this Section 8.04) such Bank or the Agent (as the case may be)
receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Borrower shall make such deductions, (iii) the
Borrower shall pay the full amount deducted to the relevant taxation authority
or other authority in accordance with applicable law and (iv) the Borrower shall
furnish to the Agent, at its address referred to in Section 9.01, the original
or a certified copy of a receipt evidencing payment thereof.
(b) In addition, the Borrower agrees to pay any present or future
stamp or documentary taxes and any other excise or property taxes, or charges or
similar levies which arise from any payment made hereunder or under any Note or
from the execution or delivery of, or otherwise with respect to, this Agreement
or any Note (hereinafter referred to as "OTHER TAXES").
(c) The Borrower agrees to indemnify each Bank and the Agent for the
full amount of Taxes and Other Taxes (including, without limitation, any Taxes
and Other Taxes imposed or asserted by any jurisdiction on amounts payable under
this Section 8.04) paid by such Bank or the Agent (as the case may be) and
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any liability (including penalties, interest and expenses) arising therefrom or
with respect thereto. This indemnification shall be made within 15 days from the
date such Bank or the Agent (as the case may be) makes demand therefor.
(d) Each Bank organized under the laws of a jurisdiction outside the
United States, on or prior to the date of its execution and delivery of this
Agreement in the case of each Bank listed on the signature pages hereof and on
or prior to the date on which it becomes a Bank in the case of each other Bank,
and from time to time thereafter if requested in writing by the Borrower (but
only so long as such Bank remains lawfully able to do so), shall provide the
Borrower with Internal Revenue Service form 1001 or 4224, as appropriate, or any
successor form prescribed by the Internal Revenue Service, certifying that such
Bank is entitled to benefits under an income tax treaty to which the United
States is a party which reduces the rate of withholding tax on payments of
interest or certifying that the income receivable pursuant to this Agreement is
effectively connected with the conduct of a trade or business in the United
States. If the form provided by a Bank at the time such Bank first becomes a
party to this Agreement indicates a United States interest withholding tax rate
in excess of zero, withholding tax at such rate shall be considered excluded
from "TAXES" as defined in Section 8.04(a).
(e) For any period with respect to which a Bank has failed to
provide the Borrower with the form required pursuant to Section 8.04(d), if any
(unless such failure is due to a change in treaty, law or regulation occurring
subsequent to the date on which a form originally was required to be provided),
such Bank shall not be entitled to indemnification under Section 8.04(a) with
respect to Taxes imposed by the United States; provided, however, that should a
Bank, which is otherwise exempt from or subject to a reduced rate of withholding
tax, become subject to Taxes because of its failure to deliver a form required
hereunder, the Borrower shall take such steps as such Bank shall reasonably
request to assist such Bank to recover such Taxes.
(f) If the Borrower is required to pay additional amounts to or for
the account of any Bank pursuant to this Section 8.04, then such Bank will
change the jurisdiction of its Applicable Lending Office so as to eliminate or
reduce any such additional payment which may thereafter accrue if such change,
in the judgment of such Bank, is not otherwise disadvantageous to such Bank.
SECTION 8.05. Base Rate Loans Substituted for Affected Fixed Rate
Loans. If (i) the obligation of any Bank to make, or to continue or convert
outstanding Loans as or to, Euro-Dollar Loans has been suspended pursuant to
Section 8.02 or (ii) any Bank has demanded compensation under Section 8.03 or
8.04 with respect to its CD Loans or Euro-Dollar Loans, and in any such case the
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Borrower shall, by at least five Euro-Dollar Business Days' prior notice to such
Bank through the Agent, have elected that the provisions of this Section shall
apply to such Bank, then, unless and until such Bank notifies the Borrower that
the circumstances giving rise to such suspension or demand for compensation no
longer exist, all Loans which would otherwise be made by such Bank as (or
continued as or converted to) CD Loans or Euro-Dollar Loans, as the case may be,
shall instead be Base Rate Loans on which interest and principal shall be
payable contemporaneously with the related CD Loans or Euro-Dollar Loans of the
other Banks. If such Bank notifies the Borrower that the circumstances giving
rise to such suspension or demand for compensation no longer exist, the
principal amount of each such Base Rate Loan shall be converted into a CD Loan
or Euro-Dollar Loan, as the case may be, on the first day of the next
succeeding Interest Period applicable to the related CD Loans or Euro-Dollar
Loans of the other Banks.
SECTION 8.06. Substitution of Bank. If (i) the obligation of any Bank
to make Euro-Dollar Loans has been suspended pursuant to Section 8.02 or (ii)
any Bank has demanded compensation under Section 8.03 or 8.04, the Borrower
shall have the right, with the assistance of the Agent, to seek a mutually
satisfactory substitute bank or banks (which may be one or more of the Banks) to
purchase the Loans and assume the Commitment of such Bank.
ARTICLE 9
MISCELLANEOUS
SECTION 9.01. Notices. All notices, requests and other communications
to any party hereunder shall be in writing (including bank wire, telex,
facsimile transmission or similar writing) and shall be given to such party: (x)
in the case of the Borrower or the Agent, at its address or facsimile or telex
number set forth on the signature pages hereof, (y) in the case of any Bank, at
its address or facsimile or telex number set forth in its Administrative
Questionnaire or (z) in the case of any party, such other address or facsimile
or telex number as such party may hereafter specify for the purpose by notice to
the Agent and the Borrower. Each such notice, request or other communication
shall be effective (i) if given by telex, when such telex is transmitted to the
telex number specified in this Section and the appropriate answerback is
received, (ii) if given by mail, 72 hours after such communication is deposited
in the mails with first class postage prepaid, addressed as aforesaid or (iii)
if given by any other means, when delivered at the address specified in this
Section; provided that notices to the Agent under Article 2 or Article 8 shall
not be effective until received.
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SECTION 9.02. No Waivers. No failure or delay by the Agent or any
Bank in exercising any right, power or privilege hereunder or under any Note
shall operate as a waiver thereof nor shall any single or partial exercise
thereof preclude any other or further exercise thereof or the exercise of any
other right, power or privilege. The rights and remedies herein provided shall
be cumulative and not exclusive of any rights or remedies provided by law.
SECTION 9.03. Expenses; Indemnification. (a) The Borrower shall pay
(i) all out-of-pocket expenses of the Agent, including fees and disbursements of
special counsel for the Agent, in connection with the preparation and
administration of this Agreement, any waiver or consent hereunder or any
amendment hereof or any Default or alleged Default hereunder and (ii) if an
Event of Default occurs, all out-of-pocket expenses incurred by the Agent or any
Bank, including fees and disbursements of outside counsel (or, in lieu thereof,
the allocated cost of in-house counsel), in connection with such Event of
Default and collection, bankruptcy, insolvency and other enforcement proceedings
resulting therefrom.
(b) The Borrower agrees to indemnify the Agent and each Bank, their
respective affiliates and the respective directors, officers, agents and
employees of the foregoing (each an "INDEMNITEE") and hold each Indemnitee
harmless from and against any and all liabilities, losses, damages, costs and
expenses of any kind, including, without limitation, the reasonable fees and
disbursements of counsel, which may be incurred by such Indemnitee in connection
with any investigative, administrative or judicial proceeding (whether or not
such Indemnitee shall be designated a party thereto) brought or threatened
relating to or arising out of this Agreement or any actual or proposed use of
proceeds of Loans hereunder; provided that no Indemnitee shall have the right to
be indemnified hereunder for such Indemnitee's own gross negligence or willful
misconduct.
SECTION 9.04. Sharing of Set-Offs. Each Bank agrees that if it shall,
by exercising any right of set-off or counterclaim or otherwise, receive payment
of a proportion of the aggregate amount of principal and interest due with
respect to the Loans held by it which is greater than the proportion received by
any other Bank in respect of the aggregate amount of principal and interest due
with respect to the Loans held by such other Bank, the Bank receiving such
proportionately greater payment shall purchase such participations in the Loans
held by the other Banks, and such other adjustments shall be made, as may be
required so that all such payments of principal and interest with respect to the
Loans held by the Banks shall be shared by the Banks pro rata; provided that
nothing in this Section shall impair the right of any Bank to exercise any right
of set-off or counterclaim it may have and to apply the amount subject to such
exercise to the payment of indebtedness of the Borrower other than its
indebtedness under this Agreement.
52
<PAGE> 57
The Borrower agrees, to the fullest extent it may effectively do so under
applicable law, that any holder of a participation in a Loan, whether or not
acquired pursuant to the foregoing arrangements, may exercise rights of set-off
or counterclaim and other rights with respect to such participation as fully as
if such holder of a participation were a direct creditor of the Borrower in the
amount of such participation.
SECTION 9.05. Amendments and Waivers. Any provision of this Agreement
or the Notes may be amended or waived if, but only if, such amendment or waiver
is in writing and is signed by the Borrower and the Required Banks (and, if the
rights or duties of the Agent are affected thereby, by the Agent); provided that
no such amendment or waiver shall:
(a) unless signed by all the Banks, (i) increase or
decrease the Commitment of any Bank (except for a ratable decrease in
the Commitments of all the Banks) or subject any Bank to any
additional obligation, (ii) reduce the principal of or rate of
interest on any Loan or any fees hereunder, (iii) postpone the date
fixed for any payment of principal of or interest on any Loan or any
fees hereunder or for the termination of any Commitment or (iv)
change the percentage of the Commitments or of the aggregate unpaid
principal amount of the Loans, or the number of Banks, which shall be
required for the Banks or any of them to take any action under this
Section or any other provision of this Agreement; or
(b) unless signed by a Designated Lender or its
Designating Bank, subject such Designated Lender to any additional
obligation or affect its rights hereunder (unless the rights of all
the Banks hereunder are similarly affected).
SECTION 9.06. Successors and Assigns. (a) The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns, except that the Borrower may not
assign or otherwise transfer any of its rights under this Agreement without the
prior written consent of all Banks.
(b) Any Bank may at any time grant to one or more banks or other
institutions (each a "PARTICIPANT") participating interests in its Commitment or
in any or all of its Loans. In the event of any such grant by a Bank of a
participating interest to a Participant, whether or not upon notice to the
Borrower and the Agent, such Bank shall remain responsible for the performance
of its obligations hereunder, and the Borrower and the Agent shall continue to
deal solely and directly with such Bank in connection with such Bank's rights
and obligations
53
<PAGE> 58
under this Agreement. Any agreement pursuant to which any Bank may grant such a
participating interest shall provide that such Bank shall retain the sole right
and responsibility to enforce the obligations of the Borrower hereunder
including, without limitation, the right to approve any amendment, modification
or waiver of any provision of this Agreement; provided that such participation
agreement may provide that such Bank will not agree to any modification,
amendment or waiver of this Agreement described in clause (i), (ii) or (iii) of
Section 9.05 without the consent of the Participant. The Borrower agrees that
each Participant shall, to the extent provided in its participation agreement,
be entitled to the benefits of Section 2.15 and Article 8 with respect to its
participating interest. An assignment or other transfer which is not permitted
by subsection (c) or (d) below shall be given effect for purposes of this
Agreement only to the extent of a participating interest granted in accordance
with this subsection (b).
(c) Any Bank may at any time assign to one or more banks or other
institutions (each an "ASSIGNEE") all, or a proportionate part (equivalent to a
Commitment of not less than $5,000,000) of all, of its rights and obligations
under this Agreement and the Notes (if any), and such Assignee shall assume such
rights and obligations, pursuant to an Assignment and Assumption Agreement in
substantially the form of Exhibit G hereto executed by such Assignee and such
transferor Bank, with (and subject to) the subscribed consent of the Borrower
and the Agent (which consents shall not be unreasonably withheld); provided that
if an Assignee is a Bank or an affiliate of such transferor Bank, no such
consents shall be required; provided further that such assignment may, but need
not, include rights of the transferor Bank in respect of outstanding Money
Market Loans. Upon execution and delivery of such instrument and payment by such
Assignee to such transferor Bank of an amount equal to the purchase price agreed
between such transferor Bank and such Assignee, such Assignee shall be a Bank
party to this Agreement and shall have all the rights and obligations of a Bank
with a Commitment as set forth in such instrument of assumption, and the
transferor Bank shall be released from its obligations hereunder to a
corresponding extent, and no further consent or action by any party shall be
required. Upon the consummation of any assignment pursuant to this subsection
(c), the transferor Bank, the Agent and the Borrower shall make appropriate
arrangements so that, if required, a new Note is issued to the Assignee. In
connection with any such assignment, the transferor Bank shall pay to the Agent
an administrative fee for processing such assignment in the amount of $3,000. If
the Assignee is not incorporated under the laws of the United States of America
or a state thereof, it shall deliver to the Borrower and the Agent certification
as to exemption from deduction or withholding of any United States federal
income taxes in accordance with Section 8.04.
54
<PAGE> 59
(d) Any Bank may at any time assign all or any portion of its rights
under this Agreement and its Note (if any) to a Federal Reserve Bank. No such
assignment shall release the transferor Bank from its obligations hereunder.
(e) No Assignee, Participant or other transferee of any Bank's
rights shall be entitled to receive any greater payment under Section 8.03 or
8.04 than such Bank would have been entitled to receive with respect to the
rights transferred, unless such transfer is made with the Borrower's prior
written consent or by reason of the provisions of Section 8.02, 8.03 or 8.04
requiring such Bank to designate a different Applicable Lending Office under
certain circumstances.
SECTION 9.07. Designated Lenders. (a) Subject to the provisions of
this Section 9.07(a), any Bank may from time to time elect to designate an
Eligible Designee to provide all or a portion of the Loans to be made by such
Bank pursuant to this Agreement; provided that such designation shall not be
effective unless the Borrower and the Agent consent thereto. When a Bank and its
Eligible Designee shall have signed an agreement substantially in the form of
Exhibit H hereto (a "DESIGNATION AGREEMENT") and the Borrower and the Agent
shall have signed their respective consents thereto, such Eligible Designee
shall become a Designated Lender for purposes of this Agreement. The Designating
Bank shall thereafter have the right to permit such Designated Lender to provide
all or a portion of the Loans to be made by such Designating Bank pursuant to
Section 2.01 or 2.03, and the making of such Loans or portions thereof shall
satisfy the obligation of the Designating Bank to the same extent, and as if,
such Loans or portion thereof were made by the Designating Bank. As to any Loans
or portion thereof made by it, each Designated Lender shall have all the rights
that a Bank making such Loans or portion thereof would have had under this
Agreement and otherwise; provided that (x) its voting rights under this
Agreement shall be exercised solely by Designating Bank and (y) its Designating
Bank shall remain solely responsible to the other parties hereto for the
performance of its obligations under this Agreement, including its obligations
in respect of the Loans or portion thereof made by it. No additional Note shall
be required to evidence Loans or portions thereof made by a Designated Lender;
and the Designating Bank shall be deemed to hold its Note (if any) as agent for
its Designated Lender to the extent of the Loans or portion thereof funded by
such Designated Lender. Each Designating Bank shall act as administrative agent
for its Designated Lender and give and receive notices and other communications
on its behalf. Any payments for the account of any Designated Lender shall be
paid to its Designating Bank as administrative agent for such Designated Lender
and neither the Borrower nor the Agent shall be responsible for any Designating
Bank's application of such payments. In addition, any Designated Lender may (i)
with notice to, but without the prior written consent of the Borrower or the
Agent, assign all or portions of its interest in any Loans to its Designating
Bank or to any financial institutions
55
<PAGE> 60
consented to by the Borrower and the Agent providing liquidity and/or credit
facilities to or for the account of such Designated Lender to support the
funding of Loans or portions thereof made by such Designated Lender and (ii)
disclose on a confidential basis any non-public information relating to its
Loans or portions thereof to any rating agency, commercial paper dealer or
provider of any guarantee, surety, credit or liquidity enhancement to such
Designated Lender.
(b) Each party to this Agreement agrees that it will not institute
against, or join any other person in instituting against, any Designated Lender
any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceeding or other proceeding under any federal or state bankruptcy or similar
law, for one year and a day after all outstanding senior indebtedness of such
Designated Lender is paid in full. The Designating Bank for each Designated
Lender agrees to indemnify, save, and hold harmless each other party hereto for
any loss, cost, damage and expense arising out of its inability to institute any
such proceeding against such Designated Lender. This Section 9.07(b) shall
survive the termination of this Agreement.
SECTION 9.08. Collateral. Each of the Banks represents to the Agent
and each of the other Banks that it in good faith is not relying upon any
"MARGIN STOCK" (as defined in Regulation U) as collateral in the extension or
maintenance of the credit provided for in this Agreement.
SECTION 9.09. Governing Law; Submission to Jurisdiction. This
Agreement and each Note shall be governed by and construed in accordance with
the laws of the State of New York. The Borrower hereby submits to the
nonexclusive jurisdiction of the United States District Court for the Southern
District of New York and of any New York State court sitting in New York City
for purposes of all legal proceedings arising out of or relating to this
Agreement, the Notes or the transactions contemplated hereby. The Borrower
irrevocably waives, to the fullest extent permitted by law, any objection which
it may now or hereafter have to the laying of the venue of any such proceeding
brought in such a court and any claim that any such proceeding brought in such a
court has been brought in an inconvenient forum.
SECTION 9.10. Counterparts; Integration. This Agreement 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 Agreement constitutes the entire agreement and understanding among the
parties hereto and supersedes any and all prior agreements and understandings,
oral or written, relating to the subject matter hereof.
56
<PAGE> 61
SECTION 9.11. WAIVER OF JURY TRIAL. EACH OF THE BORROWER, THE AGENT
AND THE BANKS HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN
ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE NOTES OR
THE TRANSACTIONS CONTEMPLATED HEREBY.
57
<PAGE> 62
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and year
first above written.
LITTON INDUSTRIES, INC.
By: /s/ Timothy G. Paulson
---------------------------------
Title: Vice President & Treasurer
Address: 21240 Burbank Blvd.
Woodland Hills, CA 91367
Telecopy: 818-598-3366
MORGAN GUARANTY TRUST
COMPANY OF NEW YORK, as Agent
By: /s/ Robert Bottamedi
---------------------------------
Title: Vice President
Address: 60 Wall Street
New York, NY 10260-0060
Telex number: 177615
Facsimile number: (212) 648-5018
BANK OF AMERICA NATIONAL
TRUST AND SAVINGS ASSOCIATION
By: /s/ Robert W. Troutman
---------------------------------
Title: Managing Director
<PAGE> 63
THE BANK OF NEW YORK
By: /s/ Lisa Y. Brown
---------------------------------
Title: Vice President
THE BANK OF NOVA SCOTIA
By: /s/ R. P. Reynolds
---------------------------------
Title: Relationship Manager
THE CHASE MANHATTAN BANK
By: /s/ Richard C. Smith
---------------------------------
Title: Vice President
CREDIT SUISSE FIRST BOSTON
By: /s/ Robert N. Finney
---------------------------------
Title: Managing Director
By: /s/ Thomas G. Muoio
---------------------------------
Title: Vice President
THE FIRST NATIONAL BANK OF
CHICAGO
By: /s/ Mark A. Isley
---------------------------------
Title: First Vice President
<PAGE> 64
MARINE MIDLAND BANK
By: /s/ William M. Holland
---------------------------------
Title: Vice President
WELLS FARGO BANK, N. A.
By: /s/ Eugene Fuentes
---------------------------------
Title: Vice President
By: /s/ Freida Youlios
---------------------------------
Title: Vice President
BANCA DI ROMA - SAN FRANCISCO
By: /s/ A. Bianchi
---------------------------------
Title: First Vice President
By: /s/ Thomas C. Woodruff
---------------------------------
Title: Vice President
<PAGE> 65
BANQUE NATIONALE DE PARIS
By: /s/ C. Bettles
---------------------------------
Title: Sr. Vice President & Manager
By: /s/ Deborah Y. Gohh
---------------------------------
Title: Vice President
CREDITO ITALIANO
By: /s/ Umberto Seretti
---------------------------------
Title: Vice President
By: /s/ Saiyed A. Abbas
---------------------------------
Title: Assistant Vice President
MELLON BANK, N. A.
By: /s/ L. C. Ivey
---------------------------------
Title: Vice President
NATIONSBANK OF TEXAS, N. A.
By: /s/ George V. Hausler
---------------------------------
Title: Vice President
<PAGE> 66
BANK OF HAWAII
By: /s/ Robert M. Wheeler III
---------------------------------
Title: Vice President
THE NORTHERN TRUST COMPANY
By: /s/ Stephen B. Bowman
---------------------------------
Title: Vice President
<PAGE> 67
PRICING SCHEDULE
The "EURO-DOLLAR MARGIN", "CD MARGIN" and "FACILITY FEE RATE" for any
day are the respective percentages set forth below in the applicable row under
the column corresponding to the Status that exists on such day:
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
STATUS LEVEL I LEVEL II LEVEL III LEVEL IV LEVEL V
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Euro-Dollar Margin
Utilization < 33 % 0.1950% 0.2250% 0.3250% 0.4250% 0.600%
-
Utilization > 33 % 0.2450% 0.2750% 0.3750% 0.4750% 0.650%
- ----------------------------------------------------------------------------------------------------------------
CD Margin
Utilization < 33 % 0.320% 0.350% 0.450% 0.550% 0.7250%
-
Utilization > 33 % 0.370% 0.400% 0.500% 0.600% 0.7750%
- ----------------------------------------------------------------------------------------------------------------
Facility Fee Rate 0.0550% 0.0750% 0.100% 0.1250% 0.150%
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
For purposes of this Schedule, the following terms have the following
meanings:
"D&P" means Duff & Phelps Credit Rating Co., and its successors.
"LEVEL I STATUS" exists at any date if, at such date, the Borrower's
long-term debt is rated A-/A3 or higher by at least two Rating Agencies.
"LEVEL II STATUS" exists at any date if, at such date, (i) the
Borrower's long-term debt is rated BBB+/Baa1 or higher by at least two Rating
Agencies and (ii) Level I Status does not exist at such date.
"LEVEL III STATUS" exists at any date if, at such date, (i) the
Borrower's long-term debt is rated BBB/Baa2 or higher by at least two Rating
Agencies and (ii) neither Level I Status nor Level II Status exists at such
date.
"LEVEL IV STATUS" exists at any date if, at such date, (i) the
Borrower's long-term debt is rated BBB-/Baa3 or higher by at least two Rating
Agencies and (ii) none of Level I Status, Level II Status or Level III Status
exists at such date.
"LEVEL V STATUS" exists at any date, if at the close of business on
such date, none of Level I Status, Level II Status, Level III Status or Level IV
Status exists.
"MOODY'S" means Moody's Investors Service, Inc., and its successors.
"RATING AGENCIES" means D&P, Moody's and S&P.
<PAGE> 68
"S&P" means Standard & Poor's Ratings Group, and its successors.
"STATUS" refers to the determination of which of Level I Status,
Level II Status, Level III Status, Level IV Status or Level V Status exists at
any date.
"UTILIZATION" means at any date the percentage equivalent of a
fraction (i) the numerator of which is the aggregate outstanding principal
amount of the Loans at such date, after giving effect to any borrowing or
payment on such date, and (ii) the denominator of which is the aggregate amount
of the Commitments at such date, after giving effect to any reduction of the
Commitments on such date. For purposes of this Schedule, if for any reason any
Loans remain outstanding after termination of the Commitments, the Utilization
for each date on or after the date of such termination shall be deemed to be
greater than 33%.
The credit ratings to be utilized for purposes of determining a
Status hereunder are those assigned to the senior unsecured long-term debt of
the Borrower without third-party credit enhancement, and any rating assigned to
any other debt of the Borrower shall be disregarded; provided that if at any
time the Borrower's senior unsecured long-term debt is rated by exactly two
Rating Agencies and the ratings assigned to such debt by such two Rating
Agencies are more than one full rating category apart, Status shall be
determined based on a rating one category higher than the lower of such two
ratings (e.g., if the S&P rating is BBB+, the Moody's rating is Baa3 and there
is no D&P rating, then Level III Status shall exist); provided further that if
at any time the Borrower's senior unsecured long-term debt, without third party
credit enhancement, is not rated by at least two Rating Agencies, then Status
shall be level V Status. The rating in effect at any date is that in effect at
the close of business on such date.
<PAGE> 69
COMMITMENT SCHEDULE
<TABLE>
<CAPTION>
BANK COMMITMENT
- ------------------------------------------------------------------ -----------------
<S> <C>
Morgan Guaranty Trust Company of New York $35,000,000
Bank of America National Trust and Savings
Association $30,000,000
The Bank of New York $30,000,000
The Bank of Nova Scotia $30,000,000
The Chase Manhattan Bank $30,000,000
Credit Suisse First Boston $30,000,000
The First National Bank of Chicago $30,000,000
Marine Midland Bank $30,000,000
Wells Fargo Bank, N.A. $30,000,000
Banca Di Roma - San Francisco $20,000,000
Banque Nationale de Paris $20,000,000
Credito Italiano $20,000,000
Mellon Bank, N.A. $20,000,000
NationsBank of Texas, N.A. $20,000,000
Bank of Hawaii $12,500,000
The Northern Trust Company $12,500,000
-----------------
Total $400,000,000
</TABLE>
<PAGE> 70
EXHIBIT A
NOTE
New York, New York
[Date]
For value received, Litton Industries, Inc. a Delaware corporation
(the "BORROWER"), promises to pay to the order of (the "BANK"), for the account
of its Applicable Lending Office, the unpaid principal amount of each Loan made
by the Bank to the Borrower pursuant to the Credit Agreement referred to below
on the maturity date provided for in the Credit Agreement. The Borrower promises
to pay interest on the unpaid principal amount of each such Loan on the dates
and at the rate or rates provided for in the Credit Agreement. All such payments
of principal and interest shall be made in lawful money of the United States in
Federal or other immediately available funds at the office of Morgan Guaranty
Trust Company of New York, 60 Wall Street, New York, New York.
All Loans made by the Bank, the respective types and maturities
thereof and all repayments of the principal thereof shall be recorded by the
Bank and, if the Bank so elects in connection with any transfer or enforcement
hereof, appropriate notations to evidence the foregoing information with respect
to each such Loan then outstanding may be endorsed by the Bank on the schedule
attached hereto, or on a continuation of such schedule attached to and made a
part hereof; provided that the failure of the Bank to make any such recordation
or endorsement shall not affect the obligations of the Borrower hereunder or
under the Credit Agreement.
This note is one of the Notes referred to in the Credit Agreement
dated as of March 27, 1998 among the Borrower, the banks parties thereto and
Morgan Guaranty Trust Company of New York, as Agent (as the same may be amended
from time to time, the "CREDIT AGREEMENT"). Terms defined in the Credit
Agreement are used herein with the same meanings. Reference is made to the
Credit Agreement for provisions for the prepayment hereof and the acceleration
of the maturity hereof.
LITTON INDUSTRIES, INC.
By:_________________________
Name:
Title:
<PAGE> 71
Note (cont'd)
LOANS AND PAYMENTS OF PRINCIPAL
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
AMOUNT OF
AMOUNT OF TYPE PRINCIPAL MATURITY NOTATION
DATE LOAN OF LOAN REPAID DATE MADE BY
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 72
EXHIBIT B
FORM OF MONEY MARKET QUOTE REQUEST
[Date]
To: Morgan Guaranty Trust Company of New York
From: Litton Industries, Inc.
Re: Credit Agreement (as amended from time to time, the "CREDIT
AGREEMENT") dated as of March 27, 1998 among the Borrower, the
Banks parties thereto and Morgan Guaranty Trust Company of
New York, as Agent
We hereby give notice pursuant to Section 2.03 of the Credit
Agreement that we request Money Market Quotes for the following proposed Money
Market Borrowing(s):
Date of Borrowing: __________________
Principal Amount(*) Interest Period(**)
$
Such Money Market Quotes should offer a Money Market [Margin]
[Absolute Rate]. [The applicable base rate is the London Interbank Offered
Rate.]
Terms used herein have the meanings assigned to them in the Credit
Agreement.
LITTON INDUSTRIES, INC.
By:_________________________
Name:
Title:
- --------
(*)Amount must be $15,000,000 or a larger multiple of $1,000,000.
(**)Not less than one month (LIBOR Auction) or not less than 14 days
(Absolute Rate Auction), subject to the provisions of the definition of Interest
Period.
<PAGE> 73
EXHIBIT C
FORM OF INVITATION FOR MONEY MARKET QUOTES
To: [Name of Bank]
Re: Invitation for Money Market Quotes to Litton Industries, Inc. (the
"BORROWER")
Pursuant to Section 2.03 of the Credit Agreement (as amended from
time to time, the "CREDIT AGREEMENT") dated as of March 27, 1998 among the
Borrower, the Banks parties thereto and the undersigned, as Agent, we are
pleased on behalf of the Borrower to invite you to submit Money Market Quotes to
the Borrower for the following proposed Money Market Borrowing(s):
Date of Borrowing: __________________
Principal Amount Interest Period
$
Such Money Market Quotes should offer a Money Market [Margin]
[Absolute Rate]. [The applicable base rate is the London Interbank Offered
Rate.]
Please respond to this invitation by no later than [2:00 P.M.] [9:30
A.M.] (New York City time) on [date].
Terms used herein have the meanings assigned to them in the Credit
Agreement.
MORGAN GUARANTY TRUST
COMPANY OF NEW YORK
By:_________________________
Name:
Title: Authorized Officer
<PAGE> 74
EXHIBIT D
FORM OF MONEY MARKET QUOTE
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Agent
60 Wall Street
New York, New York 10260-0060
Attention:
Re: Money Market Quote to
Litton Industries, Inc. (the "BORROWER")
In response to your invitation on behalf of the Borrower dated
_____________, 19__, we hereby make the following Money Market Quote on the
following terms:
1. Quoting Bank: ________________________________
2. Person to contact at Quoting Bank:
_____________________________
3. Date of Borrowing: ____________________(*)
4. We hereby offer to make Money Market Loan(s) in the
following principal amounts, for the following Interest
Periods and at the following rates:
<TABLE>
<CAPTION>
Principal Interest Money Market Absolute
Amount(**) Period(***) Margin(****) Rate(*****)
- ---------- ----------- ------------ -----------
<S> <C> <C> <C>
$
$
</TABLE>
[Provided, that the aggregate principal amount of Money Market Loans
for which the above offers may be accepted shall not exceed
$____________.](**)
- --------
(*)As specified in the related Invitation.
(Notes continued on the following page.)
<PAGE> 75
We understand and agree that the offer(s) set forth above, subject to
the satisfaction of the applicable conditions set forth in the Credit Agreement
(as amended from time to time, the "CREDIT AGREEMENT") dated as of March 27,
1998 among the Borrower, the Banks parties thereto and yourselves, as Agent,
irrevocably obligates us to make the Money Market Loan(s) for which any offer(s)
are accepted, in whole or in part.
Terms used herein have the meanings assigned to them in the Credit
Agreement.
Very truly yours,
[NAME OF BANK]
Dated:____________________ By:______________________________
Name:
Title: Authorized Officer
- ----------
(**) Principal amount bid for each Interest Period may not exceed principal
amount requested. Specify aggregate limitation if the sum of the
individual offers exceeds the amount the Bank is willing to lend. Bids
must be made for $5,000,000 or a larger multiple of $1,000,000.
(***) Not less than one month or not less than 14 days, as specified in the
related Invitation. No more than five bids are permitted for each
Interest Period.
(****) Margin over or under the London Interbank Offered Rate determined for
the applicable Interest Period. Specify percentage (to the nearest
1/10,000 of 1%) and specify whether "PLUS" or "MINUS".
(*****) Specify rate of interest per annum (to the nearest 1/10,000th of 1%).
<PAGE> 76
EXHIBIT E
OPINION OF
COUNSEL FOR THE BORROWER
[Dated the Effective Date]
To the Banks and the Agent
Referred to Below
c/o Morgan Guaranty Trust Company
of New York, as Agent
60 Wall Street
New York, New York 10260-0060
Dear Sirs:
I am the chief legal officer of Litton Industries, Inc. (the
"BORROWER") and have acted in that capacity in connection with the Credit
Agreement (the "CREDIT AGREEMENT") dated as of March 27, 1998 among the
Borrower, the banks listed on the signature pages thereof and Morgan Guaranty
Trust Company of New York, as Agent. Terms defined in the Credit Agreement are
used herein as therein defined.
I have examined originals or copies, certified or otherwise
identified to my satisfaction, of such documents, corporate records,
certificates of public officials and other instruments and have conducted such
other investigations of fact and law as I have deemed necessary or advisable for
purposes of this opinion.
Upon the basis of the foregoing, I am of the opinion that:
1. The Borrower is a corporation duly incorporated, validly
existing and in good standing under the laws of Delaware and has all corporate
powers and all material governmental licenses, authorizations, consents and
approvals required to carry on its business as now conducted.
2. The execution, delivery and performance by the Borrower of the
Credit Agreement and the Notes are within the Borrower's corporate powers, have
been duly authorized by all necessary corporate action, require no action by or
in respect of, or filing with, any governmental body, agency or official and do
not contravene, or constitute a default under, any provision of applicable law
or regulation or of the certificate of incorporation or by-laws of the Borrower
or of any agreement, judgment, injunction, order, decree or other instrument
binding upon the Borrower or result in the creation or imposition of any Lien on
any asset of the Borrower or any of its Subsidiaries.
<PAGE> 77
3. The Credit Agreement constitutes a valid and binding agreement
of the Borrower and each Note constitutes a valid and binding obligation of the
Borrower, in each case enforceable in accordance with its terms, except as the
same may be limited by bankruptcy, insolvency or similar laws affecting
creditors' rights generally and by general principles of equity.
4. (a) Except for actions, suits or proceedings described in the
Borrower's 1997 Form 10-K, there is no action, suit or proceeding pending
against, or to the best of my knowledge threatened against or affecting, the
Borrower or any of its Subsidiaries before any court or arbitrator or any
governmental body, agency or official, in which there is a reasonable
possibility of an adverse decision which could materially adversely affect the
business, consolidated financial position or consolidated results of operations
of the Borrower and its Consolidated Subsidiaries, taken as a whole.
(b) There is no action, suit or proceeding pending against, or to
the best of my knowledge threatened against or affecting, the Borrower or any of
its Subsidiaries before any court or arbitrator or any governmental body, agency
or official which in any manner questions the validity of the Credit Agreement
or the Notes.
5. Each of the Borrower's Material Subsidiaries is a corporation
duly incorporated, validly existing and in good standing under the laws of its
jurisdiction of incorporation, and has all corporate powers and all material
governmental licenses, authorizations, consents and approvals required to carry
on its business as now conducted.
I am a member of the Bar of the State of California, and the
foregoing opinion is limited to the laws of the State of California, the General
Corporation Law of the State of Delaware and the Federal laws of the United
States of America. Inasmuch as the Credit Agreement and the Notes are governed
by the law of the State of New York, I have assumed for purposes of the
foregoing opinion that such law is the same as the law of the State of
California.
Very truly yours,
<PAGE> 78
EXHIBIT F
OPINION OF
DAVIS POLK & WARDWELL, SPECIAL COUNSEL
FOR THE AGENT
[Dated the Effective Date]
To the Banks and the Agent
Referred to Below
c/o Morgan Guaranty Trust Company
of New York, as Agent
60 Wall Street
New York, New York 10260-0060
Dear Sirs:
We have participated in the preparation of the Credit Agreement (the
"CREDIT AGREEMENT") dated as of March 27, 1998 among Litton Industries, Inc., a
Delaware corporation (the "BORROWER"), the banks listed on the signature pages
thereof (the "BANKS") and Morgan Guaranty Trust Company of New York, as Agent
(the "AGENT"), and have acted as special counsel for the Agent for the purpose
of rendering this opinion pursuant to Section 3.01(c) of the Credit Agreement.
Terms defined in the Credit Agreement are used herein as therein defined.
We have examined originals or copies, certified or otherwise
identified to our satisfaction, of such documents, corporate records,
certificates of public officials and other instruments and have conducted such
other investigations of fact and law as we have deemed necessary or advisable
for purposes of this opinion.
Upon the basis of the foregoing, we are of the opinion that:
1. The execution, delivery and performance by the Borrower of the
Credit Agreement and the Notes are within the Borrower's corporate powers and
have been duly authorized by all necessary corporate action.
2. The Credit Agreement constitutes a valid and binding agreement
of the Borrower and each Note constitutes a valid and binding obligation of the
Borrower, in each case enforceable in accordance with its terms, except as the
same may be limited by bankruptcy, insolvency or similar laws affecting
creditors' rights generally and by general principles of equity.
<PAGE> 79
3. The documents delivered to the Agent by the Borrower pursuant to
Section 3.01 of the Credit Agreement are substantially responsive to the
requirements of said Section.
We are members of the Bar of the State of New York and the foregoing
opinion is limited to the laws of the State of New York, the federal laws of the
United States of America and the General Corporation Law of the State of
Delaware. In giving the foregoing opinion, we express no opinion as to the
effect (if any) of any law of any jurisdiction (except the State of New York) in
which any Bank is located which limits the rate of interest that such Bank may
charge or collect.
This opinion is rendered solely to you in connection with the above
matter. This opinion may not be relied upon by you for any other purpose or
relied upon by any other person without our prior written consent.
Very truly yours,
<PAGE> 80
EXHIBIT G
ASSIGNMENT AND ASSUMPTION AGREEMENT
AGREEMENT dated as of _________, 19__ among [ASSIGNOR] (the
"ASSIGNOR"), [ASSIGNEE] (the "ASSIGNEE"), LITTON INDUSTRIES, INC. (the
"BORROWER") and MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Agent (the
"AGENT").
W I T N E S S E T H
WHEREAS, this Assignment and Assumption Agreement (the "AGREEMENT")
relates to the Credit Agreement dated as of March 27, 1998 among the Borrower,
the Assignor and the other Banks party thereto, as Banks, and the Agent (as
amended from time to time, the "CREDIT AGREEMENT");
WHEREAS, as provided under the Credit Agreement, the Assignor has a
Commitment to make Committed Loans to the Borrower in an aggregate principal
amount at any time outstanding not to exceed $__________;
WHEREAS, Committed Loans made to the Borrower by the Assignor under
the Credit Agreement in the aggregate principal amount of $__________ are
outstanding at the date hereof; and
WHEREAS, the Assignor proposes to assign to the Assignee all of the
rights of the Assignor under the Credit Agreement in respect of a portion of its
Commitment thereunder in an amount equal to $__________ (the "ASSIGNED AMOUNT"),
together with a corresponding portion of its outstanding Committed Loans, and
the Assignee proposes to accept assignment of such rights and assume the
corresponding obligations from the Assignor on such terms;
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements contained herein, the parties hereto agree as follows:
SECTION 1. Definitions. All capitalized terms not otherwise defined
herein shall have the respective meanings set forth in the Credit Agreement.
SECTION 2. Assignment. The Assignor hereby assigns and sells to the
Assignee all of the rights of the Assignor under the Credit Agreement to the
extent of the Assigned Amount, and the Assignee hereby accepts such assignment
from the Assignor and assumes all of the obligations of the Assignor under the
Credit Agreement to the extent of the Assigned Amount, including the purchase
from the Assignor of the corresponding portion of the principal amount of the
Committed Loans made by the Assignor outstanding at the date hereof. Upon the
execution
<PAGE> 81
and delivery hereof by the Assignor, the Assignee, the Borrower and the Agent
and the payment of the amounts specified in Section 3 required to be paid on the
date hereof (i) the Assignee shall, as of the date hereof, succeed to the rights
and be obligated to perform the obligations of a Bank under the Credit Agreement
with a Commitment in an amount equal to the Assigned Amount, and (ii) the
Commitment of the Assignor shall, as of the date hereof, be reduced by a like
amount and the Assignor released from its obligations under the Credit Agreement
to the extent such obligations have been assumed by the Assignee. The assignment
provided for herein shall be without recourse to the Assignor.
SECTION 3. Payments. As consideration for the assignment and sale
contemplated in Section 2 hereof, the Assignee shall pay to the Assignor on the
date hereof in Federal funds the amount heretofore agreed between them. It is
understood that commitment and/or facility fees accrued to the date hereof are
for the account of the Assignor and such fees accruing from and including the
date hereof in respect of the Assigned Amount are for the account of the
Assignee. Each of the Assignor and the Assignee hereby agrees that if it
receives any amount under the Credit Agreement which is for the account of the
other party hereto, it shall receive the same for the account of such other
party to the extent of such other party's interest therein and shall promptly
pay the same to such other party.
SECTION 4. Consent of the Borrower and the Agent. This Agreement is
conditioned upon the consent of the Borrower and the Agent, pursuant to Section
9.06(c) of the Credit Agreement. The execution of this Agreement by the Borrower
and the Agent is evidence of this consent. Pursuant to Section 9.06(c) the
Borrower agrees to execute and deliver a Note payable to the order of the
Assignee to evidence the assignment and assumption provided for herein.]
SECTION 5. Non-reliance on Assignor. The Assignor makes no
representation or warranty in connection with, and shall have no responsibility
with respect to, the solvency, financial condition, or statements of the
Borrower, or the validity and enforceability of the obligations of the Borrower
in respect of the Credit Agreement or any Note. The Assignee acknowledges that
it has, independently and without reliance on the Assignor, and based on such
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement and will continue to be
responsible for making its own independent appraisal of the business, affairs
and financial condition of the Borrower.
SECTION 6. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
<PAGE> 82
SECTION 7. Counterparts. This Agreement 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.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered by their duly authorized officers as of the date first
above written.
[ASSIGNOR]
By:_______________________________
Name:
Title:
[ASSIGNEE]
By:_______________________________
Name:
Title:
LITTON INDUSTRIES, INC.
By:_______________________________
Name:
Title:
MORGAN GUARANTY TRUST
COMPANY OF NEW YORK
By:_______________________________
Name:
Title:
<PAGE> 83
EXHIBIT H
DESIGNATION AGREEMENT
dated as of ________________, _____
Reference is made to the Credit Agreement dated as of March 27, 1998
(as amended from time to time, the "CREDIT AGREEMENT") among Litton Industries,
Inc., a Delaware corporation (the "BORROWER"), the banks party thereto (the
"BANKS") and Morgan Guaranty Trust Company of New York, as Agent (the "AGENT").
Terms defined in the Credit Agreement are used herein with the same meaning.
_________________ (the "DESIGNATOR") and ________________ (the
"DESIGNEE") agree as follows:
1. The Designator designates the Designee as its Designated Lender
under the Credit Agreement and the Designee accepts such designation.
2. The Designator makes no representations or warranties and
assumes no responsibility with respect to the financial condition of the
Borrower or the performance or observance by the Borrower of any of its
obligations under the Credit Agreement or any other instrument or document
furnished pursuant thereto.
3. The Designee confirms that it is an Eligible Designee; appoints
and authorizes the Designator as its administrative agent and attorney-in-fact
and grants the Designator an irrevocable power of attorney to receive payments
made for the benefit of the Designee under the Credit Agreement and to deliver
and receive all communications and notices under the Credit Agreement, if any,
that the Designee is obligated to deliver or has the right to receive
thereunder; and acknowledges that the Designator retains the sole right and
responsibility to vote under the Credit Agreement, including, without
limitation, the right to approve any amendment or waiver of any provision of the
Credit Agreement, and agrees that the Designee shall be bound by all such votes,
approvals, amendments and waivers and all other agreements of the Designator
pursuant to or in connection with the Credit Agreement, all subject to Section
9.05(b) of the Credit Agreement.
4. The Designee confirms that it has received a copy of the Credit
Agreement, together with copies of the most recent financial statements referred
to in Article 4 or delivered pursuant to Article 5 thereof and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Designation Agreement; agrees that it
will, independently and without reliance upon the Agent, the Designator or any
other
<PAGE> 84
Bank and based on such documents and information as it shall deem appropriate at
the time, continue to make its own credit decisions in taking or not taking any
action it may be permitted to take under the Credit Agreement. The Designee
acknowledges that it is subject to and bound by the confidentiality provisions
of the Credit Agreement (except as provided in Section 9.07(a) thereof).
5. Following the execution of this Designation Agreement by the
Designator and the Designee and the consent hereto by the Borrower, it will be
delivered to the Agent for its consent. This Designation Agreement shall become
effective when the Agent consents hereto or on any later date specified on the
signature page hereof.
6. Upon the effectiveness hereof, (a) the Designee shall have the
right to make Loans or portions thereof as a Bank pursuant to Section 2.01 or
2.03 of the Credit Agreement and the rights of a Bank related thereto and (b)
the making of any such Loans or portions thereof by the Designee shall satisfy
the obligations of the Designator under the Credit Agreement to the same extent,
and as if, such Loans or portions thereof were made by the Designator.
7. This Designation Agreement shall be governed by, and construed
in accordance with, the laws of the State of New York.
IN WITNESS WHEREOF, the parties have caused this Designation
Agreement to be executed by their respective officers hereunto duly authorized,
as of the date first above written.
Effective Date(*):______ , ____
[NAME OF DESIGNATOR]
By:_____________________________
Name:
Title:
[NAME OF DESIGNEE]
By:_____________________________
Name:
- --------
(*)This date should be no earlier than the date of the Agent's consent
hereto.
<PAGE> 85
Title:
The undersigned consent to the foregoing designation.
LITTON INDUSTRIES, INC.
By:_____________________________
Name:
Title:
MORGAN GUARANTY TRUST
COMPANY OF NEW YORK, as Agent
By:_____________________________
Name:
Title:
<PAGE> 86
EXHIBIT I
EXTENSION AGREEMENT
Litton Industries, Inc.
21240 Burbank Boulevard
Woodland Hills, CA 91367-6675
Morgan Guaranty Trust Company
of New York, as Agent
under the Credit Agreement
referred to below
60 Wall Street
New York, NY 10260
Ladies and Gentlemen:
Effective as of [effective date], the undersigned hereby agree to
extend the Termination Date as now in effect under the Amended and Credit
Agreement dated as of March 27, 1998 among Litton Industries, Inc., the Banks
listed therein and Morgan Guaranty Trust Company of New York, as Agent (the
"CREDIT AGREEMENT") to [Date]. Terms defined in the Credit Agreement are used
herein as therein defined.
This Extension Agreement shall be construed in accordance with and
governed by the law of the State of New York.
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Agent
By:_____________________________
Title:
[NAME OF BANK]
By:_____________________________
Title:
Agreed and accepted:
<PAGE> 87
LITTON INDUSTRIES, INC.
By:_____________________________
Title:
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Agent
By:_____________________________
Title:
<PAGE> 88
CROSS-REFERENCE TARGET LIST
NOTE: DUE TO THE NUMBER OF TARGETS SOME TARGET NAMES MAY NOT APPEAR IN THE
TARGET PULL-DOWN LIST.
(This list is for the use of the wordprocessor only, is
not a part of this document and may be discarded.)
<TABLE>
<CAPTION>
ARTICLE/SECTION TARGET NAME ARTICLE/SECTION TARGET NAME ARTICLE/SECTION TARGET NAME
=============== =========== =============== =========== =============== ===========
<S> <C> <C> <C> <C> <C>
1.03...................type.borrowings
2..........................the.credits
2.01......................comm.to.lend
2.01......................comm.to.lend
2.02..............note.comm.borrowings
2.03....................money.mart.opt
2.03(d)..............money.mart.borr.d
2.03(d)(i).........money.mart.borr.d.i
2.03(f)..............money.mart.borr.f
2.04......................notice.banks
2.04(a).................notice.banks.a
2.05.............................notes
2.07....................interest.rates
2.07(b)...............interest.rates.b
2.07(c)................interest.rate.c
2.07(d)...............interest.rates.d
2.09.....................optional.term
2.11...................opt.prepayments
2.11(a)..............opt.prepayments.a
2.11(c)..............opt.prepayments.c
2.13....................funding.losses
2.15........................reg.d.comp
2.16.............method.elect.int.rate
2.16(a)..............method.electing.a
2.16(d)..................not.ent.elect
3...........................conditions
3.01.....................effectiveness
3.01(d)...............receipt.by.agent
3.02(b)...................borrowings.b
4.......................rep.warranties
5............................covenants
5.05....................leverage.ratio
5.08....................sub.debt.limit
5.09...................nagative.pledge
5.11............limit.aff.transactions
6.01....................events.default
6.01(c)...............events.default.c
8........................change.circum
8.01...........basis.det.int.rate.ioru
8.01(a).............basis.det.int.rate
8.02........................illegality
8.03...............inc.cost.red.return
8.04.............................taxes
8.04(a)........................taxes.a
8.04(d)........................taxes.d
9.01...........................notices
9.03(b).................expenses.indem
9.05.....................amend.waivers
9.05(b)..............signed.desig.lend
9.06(b).................succ.assigns.b
9.06(c).................succ.assings.c
9.07(a)....................elect.desig
9.07(b)..................desig.lenders
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET AT APRIL 30, 1998 AND THE CONSOLIDATED STATEMENT OF
OPERATIONS FOR THE NINE MONTHS ENDED APRIL 30, 1998 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUL-31-1998
<PERIOD-END> APR-30-1998
<CASH> 44,230
<SECURITIES> 15,750
<RECEIVABLES> 818,611
<ALLOWANCES> 0
<INVENTORY> 555,469
<CURRENT-ASSETS> 1,876,124
<PP&E> 1,604,495
<DEPRECIATION> (957,204)
<TOTAL-ASSETS> 4,034,510
<CURRENT-LIABILITIES> 1,791,901
<BONDS> 770,744
0
2,053
<COMMON> 46,190
<OTHER-SE> 1,116,467
<TOTAL-LIABILITY-AND-EQUITY> 4,034,510
<SALES> 3,155,887
<TOTAL-REVENUES> 3,155,887
<CGS> 2,426,367
<TOTAL-COSTS> 2,426,367
<OTHER-EXPENSES> 107,823
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 35,729
<INCOME-PRETAX> 218,138
<INCOME-TAX> 87,255
<INCOME-CONTINUING> 130,883
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 130,883
<EPS-PRIMARY> 2.82
<EPS-DILUTED> 2.75
</TABLE>
